THE GIFT OF 
 
 MAY TREAT MORRISON 
 
 IN MEMORY OF 
 
 ALEXANDER F MORRISON
 
 Protection and Progress.
 
 Protection and Progress 
 
 A STUDY OF THE ECONOMIC BASES OF 
 THE AMERICAN PROTECTIVE SYSTEM 
 
 BY JOHN P. YOUNG. 
 
 Author of " The Manufacturing Industries of Japan" and 
 " Bimetallism or Monometallism." 
 
 Chicago and New York: 
 RAND, McNALLY & COMPANY, 
 
 publishers.
 
 Copyright, 1900, by Rand, McNally & Co.
 
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 CONTENTS. 
 
 chapter page 
 
 Introduction 9 
 
 I. Growth of English Industry 25 
 
 II. Balance of Trade Theory 39 
 
 III. Free Trade in England 59 
 
 I V. Foundation of English Supremacy 78 
 
 J^ V. England the World's Workshop 91 
 
 ^ VI. International Friction 114 
 
 VII. Waste of Energy 128 
 
 VIII. Protection Promotes Economy 148 
 
 Q IX. Internal Trade 173 
 
 2 X. Agriculture and Economics 196 
 
 O XI. Industrial Development 218 
 
 ^ XII. Labor Efficiency 238 
 
 < XIII. Labor-Saving Devices 266 
 
 XIV. Production and Consumption 292 
 
 XV. External Trade 320 
 
 XVI. Industrialism in Asia 349 
 
 XVII. Formation of Trusts 375 
 
 XVIII. Two Kinds of Consumers 406 
 
 XIX. Workingmen and Wages 444 
 
 XX. Equalization of Condition 485 
 
 XXI. Cobdenism a Failure 525 
 
 XXII. Triumph of Protection 560 
 
 433054
 
 INTRODUCTION. 
 
 The purpose of the writer in presenting what he con- 
 ceives to be the true object of the protective pohcy is to 
 combat the erroneous idea that the only useful function 
 of the system of protection is to assist in the establishment 
 of a domestic manufacturing industry. This opinion is 
 now freely expressed by authors who concede that protec- 
 tion performs a valuable service to a nation by artificially 
 calling into existence industries whose growth under so- 
 called natural conditions would have been slow, perhaps 
 impossible ; but who contend that when this result has been 
 accomplished the industries created should be left to work 
 out their destinies under a system of unrestrained com- 
 petition. 
 
 Those who hold to this view have been led astray by the 
 false teachings of professional economists who have failed 
 to perceive that no system of political economy which 
 merely corisiders the present can be sound. That this is a 
 fundamental defect of the doctrines of the Manchester 
 school will be demonstrated in the following pages. 
 
 It will be conclusively shown that the teachings and 
 practices of the British followers of Cobden, although hav- 
 ing for their professed object the cheapening of production 
 and the consequent increase of consumption, had they been 
 accepted and imitated by the world, would have resulted 
 in an arrest of industrial progress and the ultimate defeat 
 of the purpose which free traders assert is the sole aim 
 of the policy advocated by them. 
 
 It will be made clear that the most distinguished ex-
 
 lo INTRODUCTION 
 
 ponents of the doctrines of the Manchester school con- 
 stantly disregard the fact that present cheapness may result 
 in ultimate dearness, and that they completely ignore the 
 necessity of considering the future. 
 
 If there is a free trader who has pointed out that the 
 welfare of the consumer in time to come is as much to be 
 regarded by the economist as that of the consumer of the 
 present day, his writings have not received much considera- 
 tion. Those who have borne the Cobden banner in the front 
 of the fray have certainly not done so, for their writings 
 present an uninterrupted advocacy of a system which has 
 for its object immediate gain at the expense of posterity. 
 
 That this accusation is well founded will be admitted 
 by every one capable of recognizing that the inevitable result 
 of acting up to the theory of "buying in the cheapest and 
 selling in the dearest market" is to promote the wasteful 
 system of unnecessary transportation, which is carried on 
 by a useless expenditure of human energy and the uncalled 
 for destruction of an immense proportion of the world's 
 store of fuel. 
 
 The cheapest market for the time being must necessarily 
 be that in which an industry is already established. No 
 matter how great the resources of raw materials, or how 
 abundant the facilities for converting them into finished 
 products may be in an undeveloped country, in practice it is 
 impossible to utilize them profitably unless artificial aid is 
 extended to overcome the advantages enjoyed by those 
 carrying on industries in older lands. 
 
 Had the free trade theory that it is the part of wisdom 
 to buy in the cheapest market been generally accepted it 
 would have resulted in the arrest of that almost simul- 
 taneous universal progress which is one of the most con- 
 spicuous features of the closing years of the nineteenth 
 century. Had the advice of Cobden and his adherents been 
 followed by Americans and other peoples the world would
 
 INTRODUCTION il 
 
 have witnessed the singular spectacle of one nation becom- 
 ing its workshop. Had considerations of the immediate 
 benefit of the consumer prevailed England must inevitably 
 have maintained her industrial supremacy, for there is no 
 doubt that it would have been impossible for rivals, if the 
 disposition to engage in rivalry could exist under such 
 circumstances, to produce as cheaply as that country. 
 
 That the advantages enjoyed by the, country with a 
 well developed manufacturing industry would have been 
 indefinitely retained under a system of exchange which 
 discouraged efforts at competition cannot be doubted. To 
 illustrate : it would have been impossible, if the theory 
 that it is wise to buy in the cheapest market had prevailed 
 in the United States, for that country to have created a 
 great iron and steel industry ; for at no time until within the 
 past three years have Americans been able to manufacture 
 those products as cheaply as Great Britain. 
 
 It ought not to be difficult to perceive that the present 
 abundance and cheapness of iron and steel is wholly due to 
 the refusal of the people of protected countries to consider 
 immediate cheapness as of paramount importance. Deliber- 
 ate defiance of the Cobdenite tenet that it is wise to buy in 
 the cheapest market has called into existence rival iron and 
 steel industries which cause those of the country once 
 supreme in this department of manufacture to shrink in 
 importance. At the beginning of the free trade era Great 
 Britain produced more than half of the pig iron consumed 
 by the world ; fifty years later she produced less than one- 
 fourth. In 1840 Great Britain mined 3,500,000 tons of 
 iron ore and the rest of the world only 2,900,000 tons ; in 1894 
 the Iron ore production of the United Kingdom was 12,400,- 
 000 tons, and that of the other manufacturing countries 
 reached the colossal aggregate of 40,800,000 tons. The out- 
 put of iron ore in the United States was 500,000 tons in 
 1840 ; in 1894 it had increased to 17,000,000 tons.
 
 12 INTRODUCTION 
 
 It is impossible to escape the conclusion these figures 
 suggest. They clearly indicate the cause of the present 
 cheapness and extended consumption of iron and steel. 
 Production on an enormous scale has compelled the result, 
 and this production is obviously due to the disregard of the 
 advice to buy in the cheapest market. Had Americans and 
 Germans been frightened by the Cobdenite bogie of dear- 
 ness they would still be dependent upon the British for 
 their supplies of iron and steel. The restricted resources 
 of the English and the practical monopoly which they en- 
 joyed would, under such circumstances, have kept up 
 prices, and the result would have been permanent dearness, 
 although Great Britain might have remained the cheapest 
 producer for an indefinite period. 
 
 The strength of the policy of protection is due to the 
 perception that it promotes true, not merely nominal, cheap- 
 ness. Protection could never have made headway if it had 
 operated to make things actually and permanently dearer. 
 Its economic basis is the elimination of wastefulness. By 
 decentralizing industry it has vastly promoted its growth. 
 The bringing of the consumer and producer together, which 
 is the object of all consistent protectionists, promotes con- 
 sumption and prevents waste of energy and the source 
 of energy, fuel. Because it accomplishes this latter result 
 it must always hold first place in any system of economy 
 which does not disregard the future. 
 
 Cobdenism was foredoomed because its successful work- 
 ing depended upon the violation of true economic laws. 
 It set up the theory that the world would be benefited by 
 concentrating manufacturing operations in one quarter of 
 the globe. A temporary advantage due to adventitious 
 circumstances was mistaken for evidence that the British 
 people were more capable than others. Acting on this 
 erroneous idea a system of economics was elaborated by 
 the Manchester school which, had it been accepted, must
 
 INTRODUCTION 13 
 
 inevitably have prevented numerous peoples passing the 
 stage of homogenity. Heterogenity would have been im- 
 possible under a system of industry which proposed to rele- 
 gate some nations to the position of producers of rude 
 products for others to convert into finished articles. 
 
 Had the doctrine advanced by the followers of Cobden 
 prevailed there must have been a perpetual waste of energy. 
 Could mankind generally have been induced to believe that 
 it is unwise to make temporary sacrifices to diversify in- 
 dustry England would have indefinitely continued the waste- 
 ful process of transporting raw materials from all parts of 
 the world to be worked up into manufactured articles by 
 the people of two islands, whose capabilities experience has 
 demonstrated are in nowise greater than those of the peo- 
 ples of numerous other nations. 
 
 It ought to require no argument to establish that it is 
 wasteful to transport raw cotton to England to be manu- 
 factured for American consumption in the face of the con- 
 cession made by free traders that the labor efficiency of 
 operatives in this particular industry is greater in the 
 United States than in the United Kingdom. If it is true 
 that there is no natural obstacle in the way of manufacturers 
 of cotton textiles in the United States producing goods 
 vieing in quality with those turned out by English mills, 
 sound economy demands that they should be produced in 
 this country, not only for consumption by Americans but as 
 well for Englishmen. 
 
 From the standpoint of the economist who regards the 
 elimination of wastefulness as the most important thing 
 to be considered the attempt to perpetuate cotton manufac- 
 turing in England will always be viewed as an effort to 
 maintain an exotic industry. No country incapable of pro- 
 ducing the raw material required in the prosecution of an 
 industry can be regarded as naturally adapted to its man- 
 ufacture, and unless the inhabitants of a country in which a
 
 14 INTRODUCTION 
 
 raw material is not indigenous are superior in skill to those 
 who have the raw material in abundance they cannot hope 
 to successfully compete when the latter have overcome the 
 disadvantages inherent to the establishment of a new in- 
 dustry in a new country. 
 
 It is the function of protection to destroy the artificial 
 advantages resulting from accumulations of capital and 
 those which result from prior occupation of fields of in- 
 dustry. In performing this work protection is gradually 
 reducing the wastefulness involved in useless carriage. In 
 this respect it presents a complete antithesis to free trade, 
 which promotes this sort of wastefulness by encouraging 
 the unnecessary hauling to and fro of raw and finished 
 articles. The inevitable outcome of the general adoption 
 of protection must be the creation of many centers of in- 
 dustry instead of one or two. The result of this practical 
 conversion of the whole world into a workshop will be an 
 enormous gain to mankind. 
 
 The far-reaching consequences of the elimination of the 
 waste which the general adoption of the Cobden system 
 would have entailed are easily apprehended when we reflect 
 that the world's supply of that great source of energy, coal, 
 is not inexhaustible. We need not accept the pessimistic 
 opinions which in some cases are gloomy enough to make 
 the subject one of present concern in countries like Eng- 
 land, but we are forced to admit that within a very brief 
 period, as periods are measured in history, the available 
 supply of coal will be exhausted. 
 
 In an article on "European and American Bridge Con- 
 struction," which recently appeared in the Engineering 
 Magazine (September, 1898), the writer, Gustav Linden- 
 thai, stated that "authorities estimate that the coal fields 
 of Europe and America will last from four hundred to 
 fifteen hundred years longer. Those of Asia and Africa 
 are not yet well known. Measured by the Egyptian
 
 INTRODUCTION 15 
 
 pyramids," he says, "the steel age will therefore be of short 
 duration, but the most glorious in the history of mankind." 
 
 If the assumption is sound that "mineral fuel is the only 
 great source of power which can be used for the reduction 
 of iron ores," it is extremely doubtful whether the future 
 historian will extol the achievements of those who are so 
 lavishly wasting it. He will more probably condemn them 
 as exhibitions of selfish disregard of the rights of posterity 
 and of incapacity to make the best use of the gifts of 
 nature. 
 
 If it is a blunder bordering on the criminal to heedlessly 
 strip the earth of its forests, which human care and energy 
 may restore, what may we call the unnecessary destruction 
 of the store of mineral fuel, which can never be replaced? 
 This is a question which will come home to posterity, and 
 when the answer is framed it will embrace an awful indict- 
 ment against a false economic system which taught men to 
 deliberately waste an indispensable economic assistant pro- 
 vided by nature which can never be replaced. 
 
 That Cobdenism is responsible for waste of this char- 
 acter is easily demonstrable, and that the waste is on a 
 colossal scale and is constantly accelerated by the system 
 which has for its shibboleth "buy in the cheapest market" 
 will be shown in the following chapters. It will be made 
 clear that an enormous proportion of the coal annually 
 mined in Europe and other parts of the world is consumed 
 in the unnecessary moving to and fro of raw materials and 
 finished articles and in supplying the motive power of the 
 vast navies of modern times, which are admittedly main- 
 tained for the purpose of protecting a forced and unnatural 
 external trade. 
 
 According to recent estimates the coal output of the 
 year 1897 was 574,532,600 tons. It would be impossible 
 to even approximately state how much of this enormous 
 total is absolutely wasted, but some conception of the magni-
 
 i6 INTRODUCTION 
 
 tilde of the unnecessary consumption may be obtained from 
 a consideration of the following facts : 
 
 Nearly two-thirds of the raw cotton, about one-third 
 of the wheat, a large quantity of the corn, and similar pro- 
 portions of the ruder productions of the United States are 
 unnecessarily moved to England and other countries in 
 vessels propelled by steam generated by coal. Obviously 
 the fuel thus consumed must be regarded as an economic 
 waste, as it has been demonstrated that cotton textiles and 
 other finished articles can be equally well produced in prox- 
 imity to the source of raw materials. This being true, there 
 can be no economic justification for moving the raw mate- 
 rials of manufacture or the food products required to feed 
 operatives in countries remote from the places where the 
 raw materials and food are produced. If, instead of ship- 
 ping abroad the raw materials and food products of the 
 United States, they were worked up into finished articles 
 in this country, and if the food now exported was consumed 
 by American workingmen, perhaps two-thirds of the coal 
 now required to propel the ships plying between American 
 ports and other parts of the world would be saved. The 
 tonnage required to move finished articles from countries 
 where raw materials are found in abundance to lands where 
 they cannot be produced would be insignificant by compar- 
 ison with that now employed in useless transportation. 
 This illustration applies with varying force to the move- 
 ment of products between other countries. The unnecessary 
 shipment to and fro of competing articles, which is chiefly 
 due to the failure of exporters of rude products to diversify 
 their industries, is as much a feature of the intercourse 
 between other nations as it is of the trade of this with other 
 countries. 
 
 In 1897 the United Kingdom mined 202,129,931 tons of 
 coal. Of this quantity 154,572,035 tons were retained 
 for domestic consumption, 37,102,138 tons were exported
 
 INTRODUCTION 17 
 
 to foreign countries and 10,455,758 tons were shipped for 
 the use of steamers engaged in the foreign trade. To segre- 
 gate the quantities used for developing energy from those 
 consumed for warmth and kindred purposes would be im- 
 possible, but it may be assumed that so much of the 154,- 
 572,035 tons as is employed in manufacturing textiles and 
 other articles for export, which could be equally well 
 made in the countries where the raw materials of manufac- 
 ture are or could be produced, is sheer waste. All that pro- 
 portion consumed in providing for the domestic comfort 
 of workingmen who would be more profitably employed 
 if their services were made use of in factories situated near 
 the base of supplies of raw and food products may also be 
 set down as economic waste. In the same category must 
 be placed all that part of the 37,102,138 tons shipped abroad, 
 which goes to countries having coal measures whose inhab- 
 itants neglect or are unable to develop them because the 
 superior equipment and great capital of the British coal 
 miners make competition impossible. The 10,455,758 tons 
 shipped for the use of steamers engaged in the foreign 
 trade and for navies can be said to have been profitably 
 employed only when it supplied the motive power for mov- 
 ing non-competing products. Great Britain occupies a pre- 
 eminent position as a coal producer and exporter, but the 
 illustration employed applies equally to other countries 
 which in the same manner wastefully consume their stores 
 of fuel. 
 
 This present wastefulness, attributable to the pursuit 
 of a false economy which elevates immediate above per- 
 manent cheapness, necessarily entails future waste of human 
 energy and fuel. The consequences of the blunder are only 
 in part visited upon its perpetrators. In time to come, if a 
 manufacturing industry is to be carried on in the United 
 Kingdom the current of coal carriage must be reversed, 
 and instead of mineral fuel being carried out of Great
 
 i8 INTRODUCTION 
 
 Britain it will have to be brought into it. That country now 
 ships coal to many parts of the world where it exists in 
 greater quantity than in the comparatively limited measures 
 of the British Isles. When these latter have been exploited 
 to such an extent that they can no longer be profitably 
 worked in competition with those of countries now occupy- 
 ing to England the relation of importers of coal, the move- 
 ment of mineral fuel will be in the opposite direction. 
 
 When we consider that the British have for a long period 
 been shipping coal to countries which have extensive coal 
 measures of their own, and that the quantity exported at 
 present nearly reaches fifty million tons annually, and that 
 that rate of export promises to increase before the power 
 of capital to artifically force out of the country its limited 
 supplies of fuel is destroyed, we are enabled to form an 
 impression, but a very inadequate one, of the extent of the 
 waste involved in living up to the Cobdenite maxim of 
 buying in the cheapest market. 
 
 If, at some future day, an economist with the statistical 
 bias undertakes to show the wastefulness of the system 
 which unduly stimulated external trade in competing prod- 
 ucts he will have no difficulty in doing so. He will be able 
 to cite that during the period while the. people of Great 
 Britain were exporting coal the aggregate of their ship- 
 ments amounted to billions of tons, and that when their 
 mines were practically exhausted they were compelled to 
 reverse the process and import mineral fuel. The figures 
 thus presented will interpret themselves. They will admit 
 of but one conclusion, and that is that the cheapness result- 
 ing from the system of unnecessary transportation was 
 merely fancied, and that it involved irreparable waste and 
 therefore a future dearness which the wit of man cannot 
 mitigate. 
 
 Although the unnecessary and premature consumption 
 of mineral fuel by a people like the British, caused by manu-
 
 INTRODUCTION 19 
 
 facturing articles for peoples capable of producing for them- 
 selves, affords the most striking illustration of the fatuity 
 of the free trade system, it will not weaken the argument 
 directed against economic waste to point out that the forced 
 development of the iron and steel industry of Great Britain 
 has brought about a similar result, the effects of which are 
 already seen. While the United Kingdom remained 
 supreme in this branch of manufacture her annual shipments 
 of its products reached millions of tons. The advantages 
 of superior equipment and greater capital which for a time 
 enabled British manufacturers to export to countries whose 
 resources in the shape of ores and fuel were immeasurably 
 greater are rapidly disappearing. The iron and steel man- 
 ufacturers of England are becoming more and more depend- 
 ent upon the foreigner for supplies of ores, and the tide of 
 products of iron and steel is beginning to set in toward 
 the shores of Britain rather than away from them. 
 
 The consequences to the British, as a people, of this 
 reflex action is fully considered in its appropriate place. 
 Here, it is only referred to in order to impress on the 
 economic student that it has resulted in the unnecessary 
 dissipation of an enormous quantity of human energy and 
 an irreparable waste of the world's stock of mineral fuel. 
 Viewed in its broader aspect, trading which results in denud- 
 ing a country of its supplies of fuel and raw material will 
 always be regarded as improvident. Its outcome must 
 necessarily be disastrous. 
 
 It is impossible to keep the lamp burning without oil. 
 The history of industrialism shows that in the countries 
 which cannot produce their own oil the flame of industry 
 soon dies out. Where the consumption is unavoidable no 
 blame can attach, but when it is prompted by greed for 
 present gain it may be set down as a crime against posterity. 
 When the industrial lamp of England goes out and the 
 British people are left in darkness the historian will arraign
 
 20 INTRODUCTION 
 
 as fools "the blind leaders" of a blind people who deliber- 
 ately shipped to lands far better supplied with mineral fuel 
 and iron ores than were those of the exporters billions of 
 tons of coal and hundreds of millions of tons of iron and the 
 products of iron and steel. 
 
 Philosophers have amused themselves constructing 
 theories to explain the origin of the family. The merely 
 animal instinct of self-defense is generally conceded by them 
 to have been the primary cause which brought about an or- 
 ganization which served as a foundation for rearing the 
 structure of a highly complex civilization. When primeval 
 man, impelled by instinct, formed the family group he could 
 not have divined its far-reaching influence. It seems that 
 modern protectionists, driven by the instinct of self-defense 
 into formulating a system that permits them to maintain 
 themselves in the struggle for existence which modern com- 
 petition has engendered, are equally blind to the far-reaching 
 consequences to mankind of their action. They do not see 
 — at least many do not — that the instinct of banding against 
 aggression has called into existence economic methods which 
 tend to promote universal progress. 
 
 Had not this instinct been planted in the human breast 
 the process of evolution would be infinitely slower than 
 it is. Had Great Britain, to confine our observations to 
 comparatively recent times, accepted the theory which the 
 Dutch might have advanced when England was little better 
 than a pastoral country, that the true interests of Englishmen 
 would be promoted by confining themselves to the produc- 
 tion of raw wool and exchanging it for the cheaply made 
 cloths of the Flemings, the weaver might still be plodding 
 at his hand loom and the names of Watt, Hargreaves and 
 Arkwright might have been unknown to the world. Had 
 Americans accepte'd the dictum of the Cobdenites, that it 
 is wisdom to buy in the cheapest market, no McCormick or 
 Edison would have been heard of in the United States.
 
 INTRODUCTION 21 
 
 It has been the aim of the writer to develop the idea 
 that the desire for industrial independence which has called 
 into operation the system of protection is almost wholly 
 responsible for the marvelous strides toward universal in- 
 tegration which have been witnessed in modern times, and 
 to show that the acceptance of the theory of buying in the 
 cheapest market would have resulted in paralyzing endeavor 
 throughout the greater part of the habitable world. To 
 accomplish this purpose it has been necessary to briefly 
 sketch the industrial history of England and show that the 
 progress of that country and the commercial supremacy 
 attained by it were wholly due to a well conceived and 
 strictly maintained policy of protection, and that the con- 
 cept of buying in the cheapest market never received its 
 modern interpretation until Englishmen felt confident that 
 they would be able to prevent rivals manufacturing for 
 themselves. 
 
 The fact is also brought forward with as much force as 
 the writer can command that the school of economists who 
 have given form to the so-called free trade system were 
 misled regarding the causes of the industrial supremacy 
 which the British enjoyed for a considerable period. The 
 blunders and inconsistencies of the advocates of the idea 
 that some time about the middle of the nineteenth century 
 the world had assumed fixed conditions which made it pos- 
 sible to assert that the people of one country were best fitted 
 by nature to produce rude products, while other peoples 
 were providentially endowed with the gift to fashion them 
 into finished articles, have been exposed ; and the logic of 
 experience has been set against conclusions reached by a 
 priori methods and the latter have invariably been proved 
 unsound. 
 
 The parallel attempt to sketch the advances toward in- 
 tegration under protection and to point out and analyze 
 the errors of writers who have been unable to see that the
 
 22 INTRODUCTION 
 
 system of present cheapness advocated by them must ulti- 
 mately lead to dearness has prevented that orderly marshal- 
 ing of facts and arguments which is always desirable. But 
 while the narrative may occasionally lack continuity, it is 
 hoped that the digressions are not serious enough to divert 
 attention from the main purpose of establishing the fact 
 that protection has an economic basis, and that it is unques- 
 tionably broadening the field of industrial development and 
 concurrently bringing into the pale of heterogenity nations 
 which, had the free trade idea prevailed, must always have 
 remained in that homogenous state which the historian and 
 philosopher have alike agreed to think and speak of as a 
 condition resembling barbarism. 
 
 If the demonstration that protection by encouraging the 
 spirit of self dependence is turning the whole world into a 
 workshop, thus eliminating the factor of unnecessary waste 
 of human energy and fuel, is not complete, the purpose of 
 writing the following chapters has not been accomplished. 
 If the writer has not been able to show conclusively that 
 the adoption of Cobdenism must have resulted in ultimate 
 dearness he has missed his aim. But nevertheless, as the 
 years march on, it will be seen that a system which elevated 
 the consumer to the first place and which has made the mid- 
 dleman of more consequence than the producer has vital 
 defects. Unless it can be shown that the value of com- 
 modities is enhanced by unnecessarily transporting them 
 to and fro the Cobdenite policy of moving raw materials to 
 one country to be manufactured, and thence distributing 
 them over the world, can never be justified. 
 
 The porter fills a useful function, but no one will say that 
 he makes the article he carries more valuable. The dis- 
 honest hackman who drives an ignorant passenger two or 
 three miles out of his way to increase his fare may profit 
 by the transaction, but the object of the extortion is not a 
 gainer. The swelling army of middlemen composed of
 
 INTRODUCTION 23 
 
 transporters, factors, jobbers, etc., who are engaged in the 
 unnecessary handHng and hauHng of products, perform no 
 greater service to society than the "cabby" who charges his 
 fare an extra rate for consuming his time in a purposely 
 roundabout journey. 
 
 The promotion of free trade must inevitably result in 
 wastefulness, because in the main its workings are anal- 
 ogous to the tricky operation of the cabman. It makes the 
 consumer pay for unnecessary expenditures of energy. 
 Whatever its professed purpose may be, Cobdenism's real 
 object is to increase the wealth of the nation practicing it 
 at the expense of society generally, and to further that aim 
 methods have been advocated by professional economists 
 that are no more defensible than the trick of the hackman. 
 The extolled roundabout foreign trades and the lauded bene- 
 fits of international exchanges have obscured the fact that 
 true economy demands that producer .and consumer be 
 brought as close together as possible. 
 
 This is the purpose of protection, and the swelling figures 
 of production, and its lessening of prices, show that it is 
 being achieved. The great factor in the marvelous expan- 
 sion of modern industry is national self dependence and its 
 resultant economies. It is inconceivable that the world 
 would be able to consume the tremendous quantity of prod- 
 ucts of iron and steel it does at present if it were dependent 
 upon one or two nations for its supplies. It is by bringing 
 the rolling mill close to the doors of the farmers of this and 
 other countries and eliminating the waste of unnecessary 
 transportation that they are enabled to use those articles 
 freely. Had England remained the chief producer the 
 British would have grown more wealthy, but American 
 farmers and those of other countries would have used less 
 iron and steel. 
 
 The conditions which have admittedly been brought 
 about by protective tariffs can only be maintained by retain-
 
 24 INTRODUCTION 
 
 ing them. Nothing will have been gained by a nation if 
 after laboriously building up a great industry it deliberately 
 sacrifices it by entering upon a competition the terms of 
 which can never be fairly adjusted. There can be no real 
 economy in a country such as the United States, with its 
 overwhelming superiority of resources of raw materials and 
 its skillful artisans, importing iron products or textile 
 fabrics. If any nation produces them more cheaply it is 
 because its workingmen are willing to adopt a lower standard 
 of living than Americans. That the desperate straits in 
 which the peoples of some overcrowded countries find them- 
 selves will induce them to lower their standard of living 
 and thus make future reductions in labor cost is more than 
 probable. The chief function of a protective tariff is to 
 guard against such a result and preserve the standard of 
 living attained by workers within the boundaries of a 
 nation, thus preventing them being reduced to a common 
 level of degradation. The result, no matter how nominal 
 prices may be affected, must be real cheapness, that cheap- 
 ness which manifests itself in increased consumption and 
 the enlarged enjoyment of the conveniences of an advanced 
 civilization. 
 
 That protection is conducive to this end the writer hopes 
 to prove in the following pages, which have been written to 
 show that the system has not fulfilled its mission by merely 
 calling manufacturing industries into existence, but that 
 it must be maintained to guard against the destructive 
 eflfects of the growing tendency of nations producing in 
 excess of their needs to dump their surpluses upon foreign- 
 ers. Justice to the producing population requires the inter- 
 vention of an equalizing tarifif, and in according this justice 
 the prime object of a true economic policy will be subserved, 
 namely, the elimination of wastefulness. That is the eco- 
 nomic basis of protection, and it accounts for the virility of 
 the system now generally adopted by the civiHzed world. 
 San Francisco, January 5, 1899.
 
 CHAPTER 1. 
 GROWTH OF English' industry. 
 
 SKETCH OF THE EARLY INDUSTRIAL ATTEMPTS OF THE 
 BRITISH PEOPLE. 
 
 Simon de Montfort's essay at protection in 1264 — Aspirations for in- 
 dustrial independence and liberty go together — Edward III and 
 his protective efforts — Immigration of skilled Flemings into 
 the realm during his reign — The rise of the English cloth 
 trade causes the industrial prostration of Flanders — British 
 agriculture did not prosper until manufactures were introduced 
 in the islands — An agricultural country will remain perma- 
 nently destitute of manufactures unless it resorts to artificial 
 methods to stimulate them — Slow growth of English manu- 
 factures — The commercial element in the Puritan character — 
 Effects of the Navigation Act — Control of the trade of the 
 colonies through its adoption — Use of coal in smelting iron a 
 great stimulus to industry — Growth of English industry more 
 rapid before than after the repeal of the corn laws — Great 
 Britain's industrial primacy during the Napoleonic wars — 
 Free trade fallacy exposed by comparison of England's position 
 before and after 1846 — The prostration of British industries in 
 the '40s due to overproduction — Origin of the theory of 
 the cheap loaf and the world's workshop. 
 
 In the second volume of Nicholson's "Principles of 
 Political Economy," which may be said to present the 
 revised opinion of the professional economists of England 
 on the subject of free trade, we find the admission that the 
 adoption of the system by the United Kingdom "in the sense 
 of extreme laissea faire was dtie to the force of events rather 
 than to the force of reasoning."* The author also tells us 
 that "free trade finds its strongest support in the direct 
 
 ^Nicholson, Principles of Political Economy, Vol. II, p. 249.
 
 26 PROTECTION AND PROGRESS 
 
 appeal to complex experience rather than in the statements 
 of first principles."* 
 
 Those familiar with the literature of the subject will 
 recognize that this attitude of the Edinburgh professor 
 differs str-kingly from, fhitt oi the teachers of the Manchester 
 school^ Avho have formulated theories which have for a 
 long.tinie fcet^n accepted by millions of people in and out 
 of England as perfectly sound, despite the fact that most of 
 them have refused to work well in practice. 
 
 In this and the succeeding chapters an effort will be 
 made to trace the growth of these theories and to examine 
 the causes which led to their acceptance. To do this it will 
 be necessary to briefly outline the economic history of Eng- 
 land during preceding centuries in order to show the in- 
 dustrial status of that country at the time of the abrogation 
 of the corn laws and to determine what causes contributed to 
 make the people of an island, not over-endowed with natural 
 resources, the wealthiest on the globe. 
 
 The material for such an investigation as that proposed 
 exists in overwhelming abundance, and much of it is of such 
 a character that when presented it will be accepted without 
 challenge, consisting, as it does, almost wholly of state- 
 ments and admissions made by English historians and those 
 of economic writers who have advocated "Cobdenism," a 
 term which will frequently be employed alternatively with 
 that of free trade in the following discussion. 
 
 The first attempt at protection in England was made as 
 early as 1264 by Simon de Montfort during the Barons' 
 war. He forbade any cloth to be worn that was not of 
 English make. It is significant that this statesman was 
 regarded by the people of his time as the champion of 
 liberty, and historians are agreed that he brought about 
 "a constitutional change of mighty issue" in English history. 
 It was through his instrumentality that the merchant and 
 
 ♦Nicholson, Principles of Political Economy, Vol. II, p. 270.
 
 ENGLISH INDUSTRY 27 
 
 the trader were first summoned to sit beside the knight of 
 the shire, the Baron and the Bishop in the Parhament of the 
 realm of England.* 
 
 It is not surprising that this English patriot, who so 
 greatly enlarged the bounds of liberty, should have advocated 
 protection, and on the distinct ground that the British peo- 
 ple should develop their own resources, and so far as possible 
 render themselves independent of foreigners. The troubled 
 conditions of the times may have helped impel his mind to 
 such a policy, but it is more than probable that it was obser- 
 vation of the fact that the foreigner was powerful because 
 he utilized his resources which prompted Sir Simon to the 
 course he pursued. 
 
 The times following the death of Simon de Montfort 
 and the accession of Edward III were troublous, but much 
 was accomplished for freedom. "Under the first Edward 
 the Parliament had vindicated its right to the control of 
 taxation ; under the second it had advanced from the removal 
 of Ministers to the deposition of a King; under the third 
 it gave its voice on questions of peace and war, controlled 
 expenditure and regulated the course of civil administra- 
 tion."! Concurrently with the growth of these civil and 
 political rights the idea began to prevail that it was a sense- 
 less proceeding for Englishmen to grow wool, ship it to other 
 countries and have it returned to them in the shape of manu- 
 factured cloth. The seed sown by Simon de Montfort was 
 beginning to bear fruit. The national feeling was growing 
 stronger and stronger and many efforts were made to 
 promote the development of the resources of England. The 
 exportation of sheep was forbidden and Englishmen were 
 not permitted to wear foreign cloth without special license 
 from the King. This was in 1338, under Edward III. 
 About this time that monarch invited a number of Flemings 
 
 *Green, History of the English People, Vol. I, p. 301. 
 flbid, Vol. I, p. 416.
 
 28 PROTECTION AND PROGRESS 
 
 skilled in the art of making cloth to make their homes In 
 England, and to encourage the industry which he sought to 
 establish heavy export duties were imposed on wool, the 
 object being to make it cheaper at home and dearer abroad. 
 
 This method of bringing about the desired result does 
 not commend itself to modern protectionists, but it must be 
 recalled that at this time England was one of the chief 
 sources of the raw material required by the manufacturers 
 of Flanders and that the idea was prevalent in that country 
 and in England that English-grown wool was incomparably 
 superior to any other. Time has shown that the assumption 
 was fallacious, but the evidence is incontestable that the 
 purpose of Edward was achieved. 
 
 A carefully prepared sketch of the early history of the 
 English woolen industry, by W. J. Ashley, a fellow of 
 Lincoln College, opens with the statement that "the history 
 of English wool and cloth explains the origin of the wealth 
 of England and illustrates with peculiar clearness the devel- 
 opment of industry,"* an assertion which he follows with 
 conclusive proof that the policy inaugurated by Edward III 
 was one of the chief causes "of the destruction of the 
 Flemish industry and the rise of the English cloth trade in 
 the sixteenth and seventeenth centuries." 
 
 It would be impossible to even glance at all the results 
 which followed the conscious efforts of English statesmen 
 to diversify the industries of the realm. To do so would 
 involve rewriting the history of England for the past five 
 centuries ; but in order to make it clear that the present 
 wealth of Great Britain is unquestionably due to the policy 
 of protection it will be well to point out that prior to the 
 introduction of the Flemish weavers by Edward there was 
 absolutely no progress and that the condition of the British 
 people was in many respects deplorable. Although the pop- 
 ulation of the island at the time of Edward's accession was 
 
 ♦American Economic Association Publication.
 
 ENGLISH INDUSTRY 29 
 
 not less than two and a quarter millions* the inhabitants 
 were steeped in poverty. 
 
 A distinguished English writer, the gifts of whose intel- 
 lect were devoted to the discovery of theories to support the 
 contention that the prosperity which followed the abroga- 
 tion of the corn laws was due to this change in the incidence 
 of British taxation, has made an exhaustive study of the 
 stationary condition of the English people during the middle 
 ages and has furnished much evidence to support his opinion 
 that it was due to failure to improve the arts of agriculture. 
 It is not difficult, however, to detect that this failure was a 
 secondary cause and that the primary one was the neglect 
 of other and more important resources of the island. Had 
 the English, between 1377 and the close of the sixteenth 
 century, been energetic in all fields of industry the writer 
 we quote would not have been called upon to record "that 
 for upward of two centuries, just as there had been no 
 improvement in the art of agriculture, so there was no 
 increase in population. "f 
 
 The same writer and other English economists have 
 made it tolerably clear that the improvement of agriculture 
 is in a large degree dependent upon the growth of manu- 
 factures and that it is always in a more forward state in 
 those countries in which the mechanic arts flourish. Arthur 
 Hassall, writing of the beginning of the eighteenth century, 
 tells us that "wherever trade developed in Europe the con- 
 dition of the agricultural classes improved and an independ- 
 ent, wealthy and intelligent middle class grew up which 
 supplied to the various countries many admirable financiers, 
 administrators and soldiers. "| Adam Smith, whose views 
 regarding the state of agriculture in England differ from 
 those expressed by Rogers, asserted that the cultivation of 
 the land in England in his time was in a more forward state 
 
 *Rogers, Economic Interpretation of History, p. 48. 
 
 flbid, p. 49. 
 
 JHassall, European History 17 15- 1789, p. 5.
 
 30 PROTECTION AND PROGRESS 
 
 than that of France,* and he pointed out that it was im- 
 portant that the capital of manufacture should reside within 
 a country, because "it necessarily puts in motion a greater 
 quantity of productive labor and adds a greater value to the 
 produce of the land and labor of society. "f Mill lays it down 
 as a general proposition that "a country will seldom have 
 a productive agriculture unless it has a large town popula- 
 tion,"J and he attributes the relatively inferior agricultural 
 productiveness of India to its comparative lack of large 
 towns and cities." § 
 
 On the whole, therefore, we must conclude that while the 
 later improvement of agriculture in England, which Pro- 
 fessor Rogers notes, undoubtedly permitted the expansion of 
 population, that improvement was due chiefly if not wholly 
 to the extension of manufactures, which, in turn, called into 
 existence a growing commercial class. As commerce and 
 manufactures expanded the condition of the agricultural 
 classes improved, and it continued to do so until the British 
 adopted the policy of stimulating manufacturing at the ex- 
 pense of the tiller of the soil. 
 
 The slow growth of manufactures and trade in England 
 after the policy of protection had been resolved upon exhibits 
 the great difficulty experienced by a people in changing the 
 course of industry and disputes the assumption that a popula- 
 tion wholly devoted to agriculture will, in the face of an 
 active competition and without artificial aid, ultimately 
 develop a system of manufactures for itself. As already 
 noted, the practical beginning of manufacturing in Eng- 
 land may be dated from the beginning of the fourteenth 
 century. One hundred and fifty years later, or about the time 
 of the discovery of America, the product of British 
 manufactures was only valued at ii,ooo,ooo, or a trifle over 
 
 ♦Smith, Wealth of Nations, Book III, Chap. IV. 
 flbid, Book II, Chap. V. 
 
 JMill, Principles of Political Economy, Vol. I, p. 162. 
 §Ibid, p. 163.
 
 ENGLISH INDUSTRY 3I; 
 
 5 shillings per capita. But great oaks grow from small acorns, 
 and while that planted by Simon de Montfort and watered 
 by Edward III and other sagacious sovereigns, who, like 
 Elizabeth, were guided by the advice of shrewd statesmen, 
 increased in girth and height, but slowly it eventually be- 
 came a mighty monarch in the forest of industry and for a 
 long time threatened to overshadow and exterminate, root 
 and branch, the trade trees planted by rival nations. 
 
 That the growth of English trade and manufactures was 
 in no sense a natural one every reader of history must be 
 aware. Few writers make the fact perfectly clear, but those 
 who care to read between the lines can see that the animating 
 spring of all British political movement after the fifteenth 
 century was trade. The Reformation was in a certain sense 
 as much a struggle for commercial supremacy as for religious 
 freedom. One cannot help noting the admixture of political 
 economy and religion in such writings as the "Constitutional 
 Documents of the Puritan Revolution" and Fuller's "Church 
 History," and he who only sees the sentimental side of 
 Oliver Cromwell's character fails to recognize the qualities 
 that entitled him to a niche in the temple of fame as a great 
 statesman ; one who was considerately desirous of advancing 
 the material interests of the people whose destinies he con- 
 trolled. 
 
 A letter written in 1659 by Samuel Lamb, a prominent 
 London merchant, to Cromwell, and afterward published 
 as a pamphlet, shows the trend of Puritan thought in Eng- 
 land at this time, and how largely it was filled with the idea 
 that in order for a people to truly appreciate the beauties of 
 religious freedom they must be afiforded the opportunity to 
 increase their stores of wealth.* Sir Joshua Child, in a 
 treatise published in 1690, found as much to admire in the 
 mercantile system of the Netherlands as he did in the 
 religious teachings of the Dutch scholars. His book is 
 
 ♦Lord Somer's Tracts, Ed. by Sir W. Scott, Vol. VI, p. 446, etc.
 
 32 PROTECTION AND PROGRESS 
 
 filled with advice to his countrymen, upon whom he urges 
 the necessity of imitating the Holland virtue of honesty 
 in commercial dealings as well as their theology if they desire 
 to become great.* 
 
 The policy of stimulating shipping, so highly extolled by 
 Smith, who says : "As defense is of much more importance 
 than opulence, the act of navigation is perhaps the wisest 
 of all the commercial regulations of England,"! was bor- 
 rowed from the Dutch during the sitting of the Long 
 Parliament, but it is doubtful whether there is any ground 
 for the assumption that its adoption was inspired by the 
 animosity existing between the Hollanders and English. 
 There is too much evidence of the kind referred to above 
 to forbid any other explanation of the English resort to the 
 system than a desire to secure for England the commercial 
 advantages which the Dutch had derived from a similar law 
 and which Englishmen were observing with growing 
 jealousy. 
 
 But the motive need not be inquired into so narrowly, 
 as we are merely concerned with the results. That they were 
 excellent Smith testifies, for he says "the regulations of this 
 famous act are as wise as if they had been dictated by the 
 most deliberate wisdom. National animosity at that partic- 
 ular time aimed at the very same object which the most 
 deliberate wisdom would have recommended, the diminution 
 of the naval power of Holland, the only naval power which 
 could endanger the security of England. "| 
 
 The EngHsh economist assumes that the chief part played 
 by the navigation act was to promote the national defense, 
 but those familiar with the history of the British trade with 
 the American colonies assert with positiveness that such a 
 measure was essential to its preservation. "Throughout 
 the greater part of the seventeenth century the people of 
 Holland were larger producers of certain kinds of manufac- 
 
 ♦Child, A New Discourse on Trade. 
 
 fSmith, Wealth of Nations, Book IV, Chap. II. 
 
 Jlbid.
 
 ENGLISH INDUSTRY 33 
 
 tured articles than the people of England and were in a 
 position to sell at lower figures. As long as the English and 
 Dutch merchants stood upon equal footing in the colony 
 (the writer quoted from is here speaking particularly of 
 Virginia) the English had to conform to the prices of the 
 Dutch in disposing of their cargoes in Virginia, and from this 
 fact the population reaped a decided advantage in their sup- 
 plies. The exclusion of the Dutch (by the act of navigation) 
 signified that thereafter the English trader was restricted by 
 competition only with men of his own nationality in fixing 
 prices."* 
 
 That the navigation act proved an important aid to the 
 extension of English commerce we learn from other sources. 
 Rogers tells us that "the beginning of the trade in English 
 manufactures is to be found in the trade relations between 
 this country (England) and the American Plantations * * * 
 and that the most important factors in that trade were 
 tobacco and rice."t Up to the time of the passage of the act 
 the Dutch were successfully dealing with the colonists, and, 
 by offering manufactured wares more cheaply than the 
 English, were threatening the trade of the latter. The ex- 
 clusion of the Dutch gave the British a complete monopoly 
 of the sale of manufactured goods in the plantations, and 
 eventually choked off the disposition which had once mani- 
 fested itself among the colonists to pursue a course of self- 
 helpfulness. 
 
 How completely the business of supplying the early 
 Virginians was engrossed by British traders after the naviga- 
 tion act gave them absolute control may be inferred from 
 the statement that the hides of animals killed in the planta- 
 tions were shipped to England, while shoes were imported 
 from that country, and that in spite of the fact that the forests 
 of the colony abounded in an infinite variety of woods the 
 
 ♦Bruce, Economic History of Virginia, Vol. II, p. 376. 
 
 fRogers, Industrial and Commercial History of England, p. 397, 
 8
 
 34 PROTECTION AND PROGRESS 
 
 colonists were in the habit of obtaining from England their 
 chairs, tables, stools, chests, boxes, cart wheels and even 
 their wooden bowls and birchen brooms.* 
 
 The reference to the colonizing of Virginia reminds us 
 that it was prompted by the expectation that the new planta- 
 tions would furnish the mother country with a vast supply 
 of raw iron. The demand for ma mfactured iron was 
 rapidly increasing in England at the time the plantations 
 were established, but the ability of English furnaces to 
 meet it was declining on account of the diminishing quantity 
 of fuel provided by the English forests. The existence of 
 large bodies of coal in England was already known, but it 
 was not until- the middle of the eighteenth century that a 
 process of smelting iron with this species of fuel was devised 
 which proved effective.! 
 
 Up to this latter time the English manufacturer depended 
 almost exclusively for his supplies of raw iron on the Bis- 
 cayan and Swedish forges, the efforts to open mines in 
 Virginia having failed. It is doubtful whether a ton of iron 
 of English or Scotch manufacture was exported until after 
 the first half of the eighteenth century. But about this 
 time the discovery that coal would serve as a smelting fuel 
 revolutionized the aspect of the iron trade, and it was the 
 free utilization of the discovery in conjunction with the 
 artificial efforts to stimulate external and preserve the home 
 trade that soon placed England at the head of. industrial 
 Europe. 
 
 That the English under certain circumstances might 
 have continued dependent for a long time upon the Biscayan 
 or Swedish forges for the limited supplies of iron required 
 by them is quite certain. Had they permitted their country 
 to remain in a state little better than pastoral, with no other 
 ambition than to provide wool for the Dutch to fashion into 
 
 ♦Bruce, Economic History of Virginia, Vol. II, p. 398. 
 
 f Green, History of English People, Vol. IV, p. 1732. 
 
 J Rogers, Industrial and Commercial History of England, p. 397.
 
 ENGLISH INDUSTRY 35 
 
 fabrics, it is very probable they would never have made 
 the experiments which resulted in the utilization of their coal 
 measures. The lethargic condition into which all purely agri- 
 cultural and pastoral peoples fall would have made inno- 
 vation impossible. 
 
 The discovery of the availability of coal as a smelting 
 fuel was due to the trading instinct which was aroused by 
 the encouragement of manufactures, and in its train followed 
 an invention of equal, perhaps of greater, importance. It 
 was the revelation of the value of coal as a means of pro- 
 viding mechanical energy which enabled Watt in 1765 to 
 transform the steam engine into the most wonderful instru- 
 ment which industry has ever had at its command. Green 
 says "the innovation came at a moment when the existing 
 supply of manual labor could no longer cope with the 
 demands of the manufacturers," and he rightly holds that 
 the three inventions within the space of twelve years — that 
 of the spinning jenny in 1764 by the weaver Hargreaves, 
 the spinning machine in 1768 by the barber Arkwright, and 
 of the mule by the weaver Crompton, and the loom which 
 followed not long after — were the natural results of the 
 discovery of the valuable heat-giving property of coal.* 
 
 The tremendous industrial strides made by the English 
 after the introduction of these remarkable aids to industry 
 is testified to by all historians, no less emphatically by those 
 who are affected by the free trade bias than by protectionists, 
 but it has been the custom during recent years for English 
 writers to give undue prominence to the expansion of trade 
 and manufactures since the repeal of the corn laws. Truth, 
 however, demands that they should occasionally bring into 
 relief the conditions which existed prior to 1846. Whenever 
 this is done it will be seen that England occupied a more 
 dominating commercial position before than since that date. 
 
 The historian Green is authority for the assertion that at 
 
 *Green, History of English People, Vol. IV, p. 1732.
 
 36 PROTECTION AND PROGRESS 
 
 the time of the great Napoleonic wars the pervasiveness of 
 English manufactures was such as to virtually nullify the 
 political movements of enemies. Speaking of the paper 
 blockade, he says : "It was impossible even for Napoleon to 
 do without the goods he pretended to exclude ; an immense 
 system of licenses soon neutralized the decree; and the 
 French army which marched to Eylau was clad in greatcoats 
 made at Leeds and shod with shoes made at Northampton."* 
 Properly interpreted, this means that during the early part 
 of the present century the rest of the civilized world was 
 largely dependent on England for its supplies of manufac- 
 tured articles. 
 
 By artificially stimulating her various industries Great 
 Britain had early attained a commanding position. Her 
 protective tariffs had multiplied factories throughout the 
 islands and her navigation act had covered the sea with her 
 fleets. The coffers of her merchants were filled to over- 
 flowing, their prosperity being directly due to the system 
 which had been consistently followed for five centuries. 
 But superficial free trade writers, disregarding the evidence 
 that it was protection which made the subsequent career of 
 England possible, have assumed that it was the repeal of 
 the corn laws and others changes in the incidence of taxation 
 which made her the wealthiest nation in the world. 
 
 The assumption that the commanding position achieved 
 by Great Britain is due to free trade cannot be successfully 
 than it is today. If the circumstances are properly con- 
 sidered it will be seen that the Cobdenites are no more en- 
 titled to claim that their policy brought about the industrial 
 conditions existing in England than the inheritor of a great 
 estate would be privileged to assert that he is the architect of 
 his own fortunes. 
 
 In 1830 the population of England had already reached 
 24,000,000 ; her foreign commerce was valued at i88,ooo,ooo 
 
 ♦Green, History of English People, Vol. IV, p. 1805.
 
 ENGLISH INDUSTRY 37 
 
 and the output of her manufactures aggregated £67,000,000, 
 In 1841 the £88,000,000 of British external trade had in- 
 creased to £110,000,000. That it showed signs of lassitude 
 after that year can hardly be attributed to the working of the 
 protective system which had built up the great manufactur- 
 ing industry which permitted the enormous expansion of 
 commerce noted. The falling off, or, rather, the stationary 
 stage, was due to overproduction occasioned by the incapacity 
 of the customers of the British manufacturers to absorb 
 their products. It was this apparent inability of foreigners 
 to consume which gave rise to the idea that if the cost of pro- 
 duction could be still further reduced in England the out- 
 side world would be able to take larger quantities of British 
 products. 
 
 Accordingly, it was suggested that by reducing or en- 
 tirely abolishing the duties on corn the English artisan would 
 always be supplied with cheap bread. This, it was assumed, 
 would permit the manufacturer to pay a low wage to his 
 working people and enable him to produce more cheaply 
 than any competitor possibly could. By adopting this course 
 it was supposed that the new countries which might under 
 certain conditions aspire to manufacturing rivalry would be 
 effectually barred from the contest. By progressive stages 
 this idea was expanded into the theory that England was 
 fitted by nature to be the world's workshop and that the 
 rest of mankind would be more benefited by depending upon 
 the skill and resources of the British than by developing 
 their own. 
 
 The extraordinary blunders into which this fallacious ex- 
 pectation led the philosophers, economists and other English 
 writers will be referred to more extensively in another place ; 
 here it is merely desired to point out that such an idea could 
 never have occurred to the English had they not by the 
 means outlined in the preceding pages created an enormous 
 manufacturing industry by resorting to methods which they 
 subsequently sought to bring into contempt in order to dis-
 
 38 PROTECTION AND PROGRESS 
 
 suade other people from imitating them and profiting by the 
 imitation. 
 
 That the effort partly succeeded the student of economic 
 history is aware. The means adopted by the propagandists 
 of the free trade idea were numerous, but none accomplished 
 its purpose better than the misrepresentation deliberately 
 resorted to in order to completely disguise the fact that 
 England had become prosperous by artificially promoting 
 manufactures. In the following chapter an attempt will be 
 made to show the extent to which history was perverted and 
 how unblushingly the teachings and writings of the earlier 
 English economists were distorted in order to conviVice a 
 credulous people that their predecessors, who had created a 
 vast and profitable industry and made their country the 
 wealthiest on the globe, entertained views of which children 
 might well be ashamed.
 
 CHAPTER II. 
 
 BALANCE OF TRADE THEORY. 
 
 FREE TRADE MISREPRESENTATION OF THE VIEWS AND OBJECTS 
 OF THE MERCANTILISTS. 
 
 Cobdenites make a fetich of economics — Familiarity of the Mer- 
 cantilists with the true functions of money — The views of 
 Thomas Mun — His experience with the Duke of Tuscany — The 
 real purpose of the Mercantilists was to develop internal and 
 external trade and to promote home production — Smith, though 
 a critic of the Mercantilists, held practically the same views 
 regarding money as the objects of his criticism — The effects 
 of the introduction of abundant supplies of money described 
 by the Scotch economist — Influence on Smith of Montesquieu's 
 "Spirit of the Laws" — The Frenchman's prediction regarding 
 the future part to be played by credit — Professor Nicholson's 
 estimate of the Mercantilists — The balance of trade theory — It 
 is held to be sound by practical men, though denied by scholastic 
 economists — The blunder of a professional statistician — The 
 adverse and favorable trade balances of the United States — 
 Export and import tables show the relations of debtors and 
 creditors — England's prosperity due to following the advice of 
 eminent Mercantilists. 
 
 It seems incredible that economic writers should have 
 attempted to misrepresent the opinions of their predecessors 
 in order to insure a favorable reception for their own doc- 
 trines, but it is impossible to escape the conclusion that the 
 Cobdenites are amenable to the charge of having done so. 
 The only possible excuse or, rather, explanation that can be 
 offered for this singular course is that the writers of the 
 Manchester school very early in the discussion became so 
 enamored of their ideas that they made a fetich of them.
 
 40 PROTECTION AND PROGRESS 
 
 They ceased to view matters from the standpoint of practi- 
 caHty and attempted to make everything square with their 
 theories. No matter how illy their system worked, with 
 the intolerance of theologians they demanded that it should 
 not be questioned. 
 
 It is a matter of record that an English Prime Min- 
 ister told a delegation of hop-growers who waited upon 
 him with representations that their industry was being 
 ruined by foreign competition that he could not consider 
 their case because to do so would involve the commission 
 of an economic heresy. The subsequent course of the official 
 alluded to raises the suspicion that he employed the term 
 heresy sarcastically, but the average Cobdenite accepted 
 him seriously and has always been disposed to look upon any 
 one who ventured to question the arguments in favor of 
 free trade very much as a pious divine regards a man who 
 rejects the teachings of his church. 
 
 The natural results of such an attitude are misconception 
 and misrepresentation ; therefore we are not surprised to 
 find men whose understanding seems perfectly clear except 
 when under the blighting influence of Cobdenism, making 
 statements which are denied by the teachings of history and 
 every day experience. 
 
 A striking illustration of this tendency to pervert is 
 found in the writings of one of the most distinguished 
 champions of the later English economic system, selected 
 on account of his efficiency and devotion to the cause to 
 write the sketch of free trade which finds a place in the 
 latest edition of the Encyclopaedia Britannica. In this article 
 the writer attempts to account for the adoption of the protec- 
 tive system by making a statement which has absolutely no 
 foundation. He says: "But there are in most countries 
 a number of industries the continuity of which governments 
 have attempted and still attempt to promote by hindering 
 the free entrance of foreign-made articles of the same kind. 
 It will be found that, historically, this practice has had its
 
 BALANCE OF TRADE 41 
 
 origin in what is now understood to be a delusion as to the 
 true functions of the currency."^ 
 
 That there may be abundant evidence pointing to the 
 existence of a beHef among the earher protectionists of Eng- 
 land that a favorable balance of trade tended to provide the 
 people with an abundance of needed specie no one will deny ; 
 but that such a belief displayed ignorance of "the true func- 
 tions of currency," or that it indicated that protective meas- 
 ures were originally resorted to for the purpose of securing 
 supplies of the precious metals cannot be demonstrated. 
 
 In the light of later investigations it appears that the 
 adherents of the so-called mercantile school had a far better 
 knowledge of the true functions of money than their Cob- 
 denite critics, who have made the blunder of relegating the 
 mechanism of exchange to an inferior position, although 
 the evidence of history and contemporary observation show 
 conclusively that it not only deserves to but actually does 
 occupy the foremost place in the commercial transactions of 
 mankind. 
 
 The Britannica essayist says : "The control of produc- 
 tion and trade in modern Europe is historically due to the 
 development of what Adam Smith called the mercantile sys- 
 tem, i. e., the effort of Government to secure as far as possible 
 the largest amount of specie within the country whose affairs 
 it administered." t This is certainly a most superficial view 
 of the motives of the adherents of the so-called mercantile 
 theory and suggests the idea that the writer who entertained 
 it did not seriously investigate the subject he discusses in 
 this off-hand fashion. 
 
 It would be impossible to derive any such impression 
 of the mercantilists as Rogers seeks to convey, from Thomas 
 Mun's "English Treasure by Foreign Trade," referred to 
 bv Adam Smith in his "Wealth of Nations" and termed 
 
 *Rogers, Article on "Free Trade," Ency. Brit, 
 tibid.
 
 42 PROTECTION AND PROGRESS 
 
 by McCulloch in his "Literature of Political Economy" the 
 earliest expositor of what has been called the mercantile 
 system of commercial policy, 
 
 Mun's treatise was probably written and privately cir- 
 culated about 1630, and made its first appearance in print 
 in 1664, his son causing its publication some years after 
 his father's death. An excerpt or two from its pages will 
 show in the most convincing fashion that the author had no 
 delusions regarding the true functions of money, but, on the 
 contrary, held views which are indorsed by the business 
 men of all the great modern commercial nations of the 
 world, although they are sneered at by some professional 
 political economists. 
 
 Discussing the efifect of an excessive quantity of money 
 within a kingdom on prices Mun observes that "although 
 this is a very hard lesson for some great landed men to learn, 
 yet I am sure it is a true lesson for all the land to observe, 
 lest when we have gained some store of money by trade, we 
 lose it again by not trading with our money." 
 
 He then, by way of illustration, proceeds to the relation of 
 a personal experience with the Duke of Tuscany, from whom 
 he had borrowed 40,000 crowns gratis for a whole year, 
 although the Duke knew that he would employ the money 
 thus borrowed for the purpose of purchasing wares not in 
 Tuscany, but in Turkey. This generosity of the Duke of 
 Tuscany, according to Mun, was extended to other mer- 
 chants, the enlightened Prince understanding perfectly that 
 the money would in the course of trade return to the country 
 from which it was shipped. As a consequence of his policy, 
 Mun tells us, "the said great Duke of Tuscanie and his 
 subjects" were much enriched by the continual great con- 
 course of merchants from all the states of the neighbor 
 Princes, bringing them plenty of money daily to supply 
 their wants of the said wares. "And thus we see," he adds, 
 "that the current of merchandize which carries away their
 
 BA^LANCE OF TRADE 43 
 
 Treasure, becomes a flowing stream to fill them again in a 
 greater measure with money."* 
 
 It is doing violence to truth to say that the views of the 
 mercantilists thus outlined bear the remotest resemblance 
 to the descriptions of them furnished by Smith, Rogers and 
 others. They do not indicate a desire on the part of the 
 mercantilists to secure money for its own sake, or a dullness 
 of perception concerning its true functions. On the con- 
 trary, the evidence is overwhelming that the mercantilists 
 clearly recognized the importance of the precious metals as 
 a medium of exchange and that their policy was to secure 
 them in abundance in order to stimulate internal and external 
 trade. 
 
 The rebuke administered by Mun to the landed gentry 
 of his time, who were disposed to hoard, shows that the 
 failing was not shared by alert merchants of the mercantile 
 school who took good care when they "gained some store 
 of money by trade" it should not be lost by failing to trade 
 with it. 
 
 Although the mercantilists laid great stress on the value 
 of money as a mechanism of exchange it can hardly be 
 truthfully affirmed that their policy revolved about its ac- 
 quisition. It would be as great a mistake to assume that the 
 shrewd modern merchant or banker whose life is devoted 
 to making money in piling up a fortune is simply aiming 
 at the control of a greater or less number of gold pieces 
 as it is to suppose that the mercantilists, in advocating that 
 a country should sell more than it buys, had in view the 
 absurd purpose of bringing into the country in which they 
 lived a vast quantity of specie to lay it away in idleness. 
 The nineteenth century business man whose daily talk and 
 thoughts are of making money does not desire it for its own 
 sake and usually does not retain it after he has acquired it. 
 Unless he is a miser he sees to it th^ it continues to perform 
 
 *Meen, Treasure by Foreign Trade, pp. 24, 25.
 
 44 PROTECTION AND PROGRESS 
 
 its functions as a measurer and exchanger of values. This, 
 according to the testimony cited, was also the aim of the 
 mercantilists. 
 
 It is rather singular that writers who aim at reducing 
 economics to an exact science should permit themselves to be 
 deceived by expressions, when the opportunities for studying 
 the true motives of men are so abundant. If Professor 
 Rogers had carefully analyzed the views of Adam Smith 
 regarding the functions of money he would speedily have 
 discovered that those of the eminent Scotchman did not differ 
 materially from those held by the mercantilists. The latter, 
 as Mun expressly declares, sought to replenish their stocks 
 of the precious metals in order that the work of exchanging 
 products might be facilitated. That an increased stock of 
 money is required to accomplish such an object Smith 
 admits in numerous parts of his great work. In one place 
 he tells us that "when the wealth of any country increases, 
 when the annual product of the labor becomes gradually 
 greater, a greater quantity of coin becomes necessary to 
 circulate a greater number of commodities."* 
 
 As England did not produce the precious metals, ob- 
 viously her only course was to obtain a supply of them 
 by trading; and it is equally clear that unless the English 
 had sold more than they bought it would have been im- 
 possible for them to add to their stock of coin. Had they 
 imported more merchandise than they sold they could not 
 have prevented the diminution of their supply of metallic 
 money. 
 
 If the theory of the mercantilists was at fault Smith 
 must have been equally astray, for although he may have 
 arrived at his conclusions in a different fashion there can be 
 no question that he was just as profoundly impressed with 
 the importance of money as a medium of exchange as the 
 most extreme exponent of the ideas of the mercantile school. 
 
 ♦Smith, Wealth of Nations, Book I, Chap. XI.
 
 BAj:.ANCE OF TRADE 45 
 
 Not only does Smith carefully indicate the necessity of 
 maintaining abundant supplies of coin for the purposes of 
 promoting internal trade, but he also, in almost the same 
 terms as Mun, points out that it is highly desirable for a 
 nation engaged in what he calls the round about foreign 
 trade to secure plenty of the precious metals. In a passage, 
 explaining the peculiar value of the trade of Portugal to 
 England, he says: "The great annual importation of gold 
 and silver is neither for the purpose of plate nor of coin, 
 but of foreign trade. A round about trade of foreign con- 
 sumption can be carried on more advantageously by means 
 of these metals than of almost any other goods, * * * In 
 facilitating all the different round about trades of consump- 
 tion which are carried on in Great Britain consists the 
 principal advantage of the Portugal trade ; and though it is 
 not a capital advantage, it is, no doubt, a considerable one."* 
 
 Adam Smith appears to have had no doubts about the 
 eflfects of the introduction of fresh supplies of the precious 
 metals into Europe. He noted that "since the discovery of 
 America the greater part of Europe has been much im- 
 proved. England, Holland, France and Germany, even 
 Sweden, Denmark and Russia, all advanced considerably 
 both in agriculture and manufactures ;"t and in other places 
 he minutely describes the changes which resulted from the 
 injection of vast quantities of silver into the existing stocks, 
 invariably assuming that the effect was to stimulate trade 
 whenever those who obtained the metal were sagacious 
 enough to use it as a medium of exchange instead of hoard- 
 ing it, as some foolishly did, or of diverting it from its proper 
 use, as was done by Spanish grandees who consumed it in 
 ostentatious displays of plate and other forms of ornamenta- 
 tion. 
 
 It would have been extraordinary had Smith taken any 
 
 ♦Smith, Wealth of Nations, Book IV, Chap. VI. 
 flbid, Book I, Chap. XI.
 
 46 PROTECTION AND PROGRESS 
 
 other view of the important part played by money than that 
 which we find expressed by him in his "Wealth of Nations." 
 The Scotchman was undoubtedly a close student and admirer 
 of Montesquieu and followed many of his speculations close- 
 ly. The celebrated "Spirit of the Laws" was a new book when 
 Smith was revolving in his mind the project of an English 
 work on economics, and there can be no question that the 
 Frenchman's ideas influenced the author of the "Wealth 
 of Nations." 
 
 It has been sought to convey the idea that Smith owes 
 nothing to Montesquieu, and in support of the assumption 
 the fact that toward the close of his life he was working on a 
 critique of the "Spirit of the Laws" is often cited, but this 
 proves nothing.* No one has ever contended that the 
 Scotchman was not a strikingly original thinker. His book 
 and lectures forbid such an assumption ; but it is no unusual 
 thing for men of great minds to frankly accept that which 
 commends itself to them as sound ; therefore we find Smith 
 repeating in another, perhaps a better, form, statements and 
 thoughts which had originally appeared in the "Spirit of 
 the Laws." 
 
 There is much in the "Wealth of Nations" that suggests 
 that this passage from Montesquieu made a deep impression 
 on Smith: "The bullion drawn from American mines, and 
 thence sent to the East, has greatly promoted the naviga- 
 tion of the European nations ; for it is merchandise which 
 Europe receives in exchange from America, and which she 
 sends in exchange to the Indies, A prodigious quantity of 
 gold and silver is therefore an advantage when we consider 
 these metals as merchandise; but it is otherwise when we 
 consider them as a sign, because their abundance gives an 
 alloy to their quality as a sign which is chiefly founded on 
 their scarcity."! 
 
 When the views of Smith on the subject of money are 
 
 ♦Ingram, History of Political Economy, p. 92. 
 •j-Montesquieu, Spirit of the Laws, Book XXII, Chap. VI.
 
 BALANCE OF TRADE 47 
 
 examined in detail it will be seen that they follow those of 
 Montesquieu closely, not only in recognizing the important 
 part played by the metals in stimulating a round about 
 foreign commerce but in their clear perception of the effect 
 of quantity on prices. Montesquieu, in his "Grandeur and 
 Decadence of the Romans," emphasized his conviction that 
 the lack of the precious metals contributed to the ruin of the 
 Roman State, an opinion which Smith accepted by implica- 
 tion, as he did also another striking deduction of the French- 
 man that "when civilized nations are the mistresses of the 
 world, gold and silver, whether they draw it from among 
 themselves or fetch it from the mines, must increase every 
 day."* 
 
 There is no essential difference between this statement 
 of the case by Montesquieu, and that of Smith, who tells us 
 that "gold, like every other commodity, is always somewhere 
 or other to be got for its value by those who have that 
 value to give for it."f 
 
 It would be absurd to assume that either of these thinkers 
 when advancing this idea meant to carry the impression 
 that gold and silver were desirable for their own sakes, 
 because in other places they indicate clearly that the worst 
 possible use that the precious metals can be put to is to 
 devote them to meretricious ornamentation or to hoard them, 
 and thus withdraw them from the channels of trade. 
 
 In order to still more firmly establish the proposition that 
 there is no foundation for the assumption that correct ideas 
 regarding the functions of money were first promulgated 
 by Smith, the fact that Montesquieu clearly defined the nature 
 of bank notes and divined the future of the credit system 
 which would be developed by their use must be cited. He 
 tells us that "the companies and banks established in many 
 nations have put a finishing stroke to the lowering of gold 
 
 ♦Montesquieu, Spirit of the Laws, Book XXII, Chap. IV. 
 fSmith, Wealth of Nations, Book IV, Chap. VI.
 
 48 PROTECTION AND PROGRESS 
 
 and silver as a sign representative of riches; for by new 
 fictions they have muhipHed in such a manner the signs of 
 wealth that gold and silver, having this office only in part, 
 have become less precious. The public credit serves instead 
 of mines, and diminishes the profit which the Spaniards draw 
 from them."* Changing the terminology very slightly, 
 Smith thus restated this idea : "When paper is substituted in 
 the room of gold and silver money, the quantity of the 
 materials, tools and maintenance which the whole circulating 
 capital can supply can be increased by the whole value of 
 gold and silver which used to be employed in purchasing 
 them."t 
 
 We may carry our investigations much further back 
 than the days of Montesquieu or Mun and find that the 
 value of banks and notes were comprehended by those who 
 are supposed to have had no other working economic rule 
 than that of bringing money into the State and keeping it 
 after it had been secured. As early as 1659 Samuel Lamb 
 addressed a letter to Cromwell in which he urged the founda- 
 tion of a bank in England similar to that in operation in 
 Amsterdam. This latter institution came into existence in 
 1609. At a much earlier period banks had been in existence 
 in Italian cities, but the Dutch creation was on a much 
 greater scale. It was established to meet the inconvenience 
 arising from the circulation of currency from all parts of 
 the globe and to accommodate merchants in their dealings. 
 Any one making a deposit of gold or silver received notes 
 for the amount, less a small commission, and these notes 
 commanded a premium in all countries. 
 
 Lamb, perceiving the benefits conferred by such a bank 
 and such a system of exchange, set forth the arguments 
 in its favor at great length. It would puzzle the most acute 
 opponent of the mercantile school to discover in this letter 
 
 ♦Montesquieu, Spirit of the Laws, Book XXI, Chap. XXII. 
 t Smith, Wealth of Nations, Book II, Chap. II.
 
 BALANCE OF TRADE 49 
 
 any trace of the existence of a belief that would collide with 
 the views of the most eminent bankers of the present day. 
 Nowhere in its voluminous pages can any support be found 
 for the curious assumption that the mercantilists of Lamb's 
 time sought gold and silver for their own sake. On the con- 
 trary, every line shows a thorough perception of the fact 
 that the writer regarded the precious metals as a mere in- 
 strument for promoting commerce, and that mankind would 
 be most benefited by making that instrument as accessible 
 as possible. 
 
 A modern economist who has devoted some attention to 
 the question here reviewed tells us that "Adam Smith en- 
 deavored to show not that the nationalist aspirations of the 
 mercantilists were unworthy, but that ,the devices adopted 
 to gain their ends were almost in all cases useless or hurt- 
 ful."* He also tells us that while Smith "attacked both the 
 ideas and methods of the mercantile system, it is to be 
 observed that he was far from stating the principles of free 
 trade in the simple and dogmatic form to which they were 
 afterward reduced for popular consumption." But it seems 
 to us that it is a case of the professional economists having 
 deceived themselves rather than the vulgar. 
 
 There is reason for believing that the Scotch economist, 
 who said he "thought it necessary, though at the hazard 
 of being tedious, to examine at full length the popular notion 
 that wealth consists in money, or in gold and silver, "-j- mis- 
 directed his efforts, and that he should have directed himself 
 to the learned, for it seems that the latter have adopted more 
 fantastic notions regarding money than the masses, who 
 instinctively recognize that its true function is to facilitate 
 the exchange of the products of industry. 
 
 There are notable exceptions among the later economists 
 who have avoided the indiscretion of misrepresenting the 
 
 ♦Nicholson, Principles of Political Economy, Vol. II, p. 247. 
 tSmith, Wealth of Nations, Book IV, Chap. I. 
 4
 
 50 PROTECTION AND PROGRESS 
 
 mercantile system, but not many. The recent work of 
 Professor Nicholson of Edinburgh University discusses the 
 theories of the mercantilists in a reasonable manner. He 
 says : "It does not appear to be a just criticism of this system 
 to deal with it after the manner of Adam Smith. Money was 
 recognized by the mercantilists as one of the most important 
 instruments of exchange and thus of production. Mediaeval 
 progress in every part was associated with the adoption and 
 extension of a money economy. Any scarcity of money at 
 once checked development. A plentiful supply of money 
 in the middle ages was as necessary for the national welfare 
 as plentiful bank reserves are at present. The regulations 
 which aimed at the prevention of the circulation of foreign 
 money and provided for the immediate recoinage were 
 justifiable, not merely for the lawful seigniorage claimed, 
 but also for the preservation of the national coinage."* 
 
 A proper consideration of this statement and of the fact 
 that England was entirely dependent upon other countries 
 for her supply of the precious metals will convince any 
 thoughtful person that the middle age economic idea that it 
 was necessary for the nation to sell more than it bought in 
 order to maintain a currency was not an unsound one. And, 
 although the facts are somewhat obscured by the resort to 
 representative money, there is no doubt that the Middle Age 
 view is tenaciously adhered to by the financiers of the Eng- 
 land of today. 
 
 While some college professors, and others who ought to 
 know better, speak derisively of those who contend that no 
 nation can continue to prosper which persistently buys more 
 than it sells, it is noteworthy that men of brains in the 
 financial marts of Europe, and especially in the great money 
 center of England, are constantly watching the trade reports 
 in order to guard against the ill results of unfavorable bal- 
 ances. Professor Nicholson recognizes this when he says: 
 
 ♦Nicholson, Principles of Political Economy, Vol. II, p. 24^.
 
 BALANCE OF TRADE 51 
 
 "The case of foreign trade is of still greater importance, 
 especially in such a country as England. Any excess of im- 
 ports over exports (not accounted for by other elements of 
 indebtedness) may create an unfavorable balance of trade. 
 Although in one sense an unfavorable balance to import- 
 ers is equally favorable to exporters, and therefore from the 
 point of view of national gain may be so far disregarded in 
 another sense, an unfavorable balance may mean such a 
 foreign drain as to lead to a financial crisis."* 
 
 When we compare this judicious comment upon a subject 
 which occupies the mind of the financial world of today with 
 the crude observations of a professional statistician on the 
 alleged workings of the mercantile theory in the United 
 States, some idea is gained of the facility with which erro- 
 neous impressions are disseminated. Citing the figures of the 
 external trade of this country Mulhall says : "The foreign 
 trade of 1896 averaged only £5 per inhabitant, against £18 
 in the United Kingdom. It is manifest that trade has been 
 cramped and hindered in all directions by the protective 
 tariffs; these have had the effect of stimulating manufac- 
 tures, but at an enormous cost to the American people. 
 Suffice it to compare the aggregate of imports and exports 
 for the last fourteen years, which shows that there has been 
 a great excess of exports, or in other words, a 'balance of 
 trade' largely in favor of the United States, a proof that 
 the trade with foreign countries is on an unsatisfactory foot- 
 ing, viz.: imports 2104, exports 2351, surplus exports 248 
 millions sterling. The old fallacy of the mercantile system, 
 which is still in force among protectionists, supposed that 
 the value of surplus exports came back in bullion, but the 
 official tables of the United States show the reverse." f 
 
 He then proceeds to show that although our surplus ex- 
 ports during the fourteen years ending 1896 amounted to 
 
 ♦Nicholson, Principles of Political Economy, Vol. 11, p. 226. 
 t Mulhall, Industries and Wealth of Nations.
 
 52 PROTECTION AND PROGRESS 
 
 £248,000,000, the excess of gold exports for the period 
 1871-1895 was £133,000,000, and these figures, he seems to 
 imagine, conclusively dispose of the common sense assump- 
 tion that nations, like individuals, cannot live beyond their 
 means. 
 
 In this place no attempt will be made to confute Mul- 
 hall's assertion that trade has been "cramped and hindered 
 in all directions in the United States by protective tariffs." 
 That part of the discussion is reserved for another chapter, 
 in which the statistician's own admissions will be employed 
 to show that the expansion of American trade has been 
 phenomenal compared with that of other countries. Here 
 we shall merely examine Mr, Mulhall's conclusion that the 
 course of United States trade completely demonstrates the 
 fallacy of the mercantile theory and that our foreign trade 
 is in an unsatisfactory condition because it shows a so- 
 called favorable balance. 
 
 To dispose of Mr. Mulhall's arguments we need merely 
 ask the question : Why is it that during the fourteen years 
 referred to by him, although we sold £343,000,000 worth 
 more of products than we bought, we are still obliged to 
 part with large quantities of specie? To this question there 
 can only be one answer. This anomalous condition of affairs 
 existed during the period under review because during a 
 previous period we had disregarded the teachings of com- 
 mon sense by borrowing heavily, thus mortgaging our future. 
 
 It will be noticed that Mr. Mulhall takes as a period for 
 estimating excess of exports the fourteen years ending in 
 1896. Had he carried his investigations further back he 
 would have discovered that there was a time in the history of 
 our commerce when the imports exceeded the exports, and 
 that in consequence we were stripped bare of specie. In 
 the years between 1847 ^"<^ 1874 there was an adverse bal- 
 ance against us of $1,532,000,000.* During these same 
 
 ♦United States Statistical Abstract, 1897.
 
 BALANCE OF TRADE 53 
 
 years the product of our gold and silver mines reached 
 $1,447,588,000. According to the implication in Mulhall's 
 observation on the mercantile system this made no difference 
 to the country and did not affect the national welfare, but 
 those who know the sacrifices made to obtain specie after 
 the breaking out of our Civil War hold a different view. 
 
 Americans understand clearly, if Mr. Mulhall does not, 
 that the excessive exports of products now witnessed must 
 be made to meet obligations incurred during the period when 
 we imported more than we exported and to pay interest and 
 dividends on investments made in this country by English- 
 men and other foreigners who advanced to us, not specie, 
 but merchandise. 
 
 Does Mr. Mulhall fancy that if the conditions which 
 existed until 1874, and even later, had continued down to 
 the present day that the people of the United States would 
 be in better condition than they are at present ? Suppose in- 
 stead of the excess of exports over imports of £248,000,000 
 since 1880, to which Mulhall refers, there had been $1,240,- 
 000,000 more goods imported into the country than were ex- 
 ported, or to put the case as strongly as possible let us assume 
 that the excess of exports since 1874, which amounted in 
 round figures to $2,500,000,000, had been an import excess, 
 what would be our position today? Would it not be one 
 of absolute dependency upon foreigners? And ultimately 
 would it not have resulted in a permanent excess of exports 
 over imports? Is it conceivable that the foreigner would 
 have gone on forever putting more into the country than he 
 took out of it? 
 
 It is extraordinary that writers of the school to which 
 Mulhall belongs are incapable of perceiving that under pres- 
 ent conditions tables of exports and imports are the indices 
 of the relations of creditors and debtors rather than a mere 
 record of exchange of commodities. The fact that the 
 United States is obliged to part with merchandise to the 
 value of over $250,000,000 in a single year more than she
 
 54 PROTECTION AND PROGRESS 
 
 receives in return in the shape of merchandise or bullion 
 clearly indicates one of two things, either that she is placing 
 other peoples under obligation to her or that she is repaying 
 obligations already incurred. 
 
 There is no doubt that the latter is the case. The evi- 
 dence is overwhelming that we are heavily indebted to for- 
 eigners, especially to Englishmen. The extent of our obliga- 
 tions cannot be definitely determined, but the aggregate is 
 vast. But the United States is not the only debtor country. 
 If it were it would be impossible for Great Britain to con- 
 tinue year after year importing hundreds of millions of 
 dollars worth more of merchandise than she exports. The 
 fact that in a single year the adverse balance of trade against 
 the United Kingdom exceeded $650,000,000 is conclusive 
 evidence, not that English trade is in a healthy condition but 
 that some time in the past she loaned money or goods from 
 which loans she is now receiving returns in the shape of 
 interest paid in merchandise, or that the principal is being 
 repaid. 
 
 Conversely, the excess of American exports over imports 
 shows that trade is in a healthy condition and that we are 
 paying our interest and perhaps part of the principal of what 
 we owe and refusing to incur further obligations. In short, 
 instead of the trade conditions of the United States furnish- 
 ing a refutation of the theory of the mercantilists that an 
 adverse balance is something to be avoided, it confirms its 
 soundness by establishing the fact that the nation which 
 attempts to disregard the maxim that more must be produced 
 than is consumed in order to create wealth will certainly 
 come to grief. 
 
 The assaults on the mercantilists have not been confined 
 to misrepresentations of their views concerning the balance 
 of trade. There has also been a consistent attempt to create 
 the impression that their object was to cut off all external 
 trade, the implication being that they were foolish enough 
 to imagine that benefit would result from such a course.
 
 BALANCE OF TRADE 55 
 
 Even so fair a writer as Cunningham, in his effort to state 
 in a concise form the opinions held by the predecessors of 
 Cobden, helps to add to this false impression when he tells 
 us that "the mercantilists, like the bullionists, aimed at in- 
 creasing the treasure in the country, but they adopted en- 
 tirely different measures to this end. Instead of trying to 
 legislate directly for the precious metals, they held that, by 
 legislating for the trade in commodities, they could induce 
 conditions in which the precious metals would naturally flow 
 into this country (Great Britain). If we sold a large quan- 
 tity of goods to other lands, and bought very few of their 
 products, they would be bound to pay us a balance in bullion. 
 Hence it appears that by using expedients to limit the quan- 
 tity and value of our imports, and to increase the value and 
 quantity of our exports, there would be a balance of trade 
 which could only be defrayed by payments in bullion from 
 abroad. And thus recast, the effort to procure treasure 
 ramified out in many directions, but it should not be forgot- 
 ten that the fundamental reason for desiring bullion was the 
 political one of acquiring treasure. Those who were most 
 decided about the advantage of procuring treasure were 
 equally clear that gold and silver were only valuable by con- 
 vention and not in their own nature ; and in so far as mere 
 economics were concerned, there was no tendency to regard 
 bullion as a specially important form of riches or wealth."* 
 
 Here we have a frank statement that the mercantilists 
 were, not possessed by the vulgar notion that money is the 
 most desirable form of wealth, and a qualified admission 
 that they were not entirely wrong in assuming that it was 
 good policy for a nation to obtain a store of treasure, but 
 Cunningham was manifestly in error in asserting that the 
 mercantilists aimed at restricting all kinds of imports in 
 order to bring about such a result. 
 
 As the exponents of the theory criticised by Cunning- 
 
 *Cunningham, Outlines of English Industrial History, p. 128.
 
 56 PROTECTION AND PROGRESS 
 
 ham and other free traders were as capable of expressing 
 their views in good EngHsh as their critics, it may be best 
 to see what they have to say for themselves. Resorting again 
 to the pages of Mun's treatise, we find him discussing the 
 question of imports and exports in this fashion : "The com- 
 monwealth shall decHne and grow poor by a disorder in the 
 people when, through pride and other excesses, they do con- 
 sume more foreign wares in value than the wealth of the 
 Kingdom can satisfy and pay by the exportation of our own 
 commodities, which is the very quality of an unthrift who 
 spends beyond his means."* 
 
 The modern Cobdenite, misled by the fact that the British 
 now import more than they export, may find a flaw in this 
 philosophical observation, but it is reasonably certain that if 
 England had not proceeded along the lines indicated by Mun 
 her subsequent commercial experience would not have ex- 
 cited the jealousy of the rest of the world. 
 
 It was well for the English that they accepted the guid- 
 ance of men who spoke in this strain : "Lastly in all things 
 we must endeavor to make the most we can of our own 
 whether it be natural or artificial. And forsomuch as the 
 people who live by the arts are far more in number than 
 they who are masters of the fruits, we ought the more care- 
 fully to maintain those endeavors of the multitude, in whom 
 doth consist the greatest strength and riches both of King 
 and Kingdom ; for where the people are many, and the arts 
 good, there the traffic must be great and the country rich. 
 The Italians employ a greater number of people and get 
 more money by their industry and manufactures of the raw 
 silks of the Kingdom of Cicilia than the King of Spain and 
 his subjects have by the revenue of this rich commodity." f 
 
 Assume for a moment that the views of the mercantilists 
 had not prevailed and that Englishmen of the seventeenth 
 
 *Mun, Treasure by Foreign Trade, p. 37. 
 flbld, p. 17.
 
 BALANCE OF TRADE 57 
 
 and eighteenth centuries had imitated the example of Spain 
 — -which country imported to excess with disastrous results 
 — does anyone fancy in that event that the British would 
 have been prepared toward the close of the first half of the 
 nineteenth century to do commercial battle with the rest of 
 the world? 
 
 What ground is there for believing that the English, who 
 were a phenomenally backward people until they imported 
 foreign artisans to instruct and pioneer the way for them 
 in manufacturing, would have developed an industry of 
 their own without artificial stimulus? Is there not every 
 reason for assuming that if Edward and his successors had 
 decided that as the Flemings could make cloth cheaper than 
 the British it would be wiser for their subjects to wear im- 
 ported woolens, that they would still be dependent upon 
 strangers for such articles? What foundation is there for 
 the assumption that the English could have achieved 
 supremacy on the sea if the navigation act had not been 
 resorted to? Is there a single instance recorded in history of 
 a nation, after having obtained such a position as that 
 reached by the Dutch, being dislodged except by such 
 methods as those adopted by England? 
 
 These are the questions which suggest themselves to 
 every candid investigator of this subject, and when an 
 answer is found, as it may be in the pages of history, it 
 discloses that the ancestors of the Cobdenites were not fools, 
 although the Manchester school of economists have diligently 
 striven to make them appear as such. Their teachings, their 
 acts, and, above all, the result, show that those ancestors 
 were shrewd men who instinctively adopted the only method 
 by which they could advance their country commercially. 
 
 It is not meant by this that the mercantilists committed 
 no errors — doubtless many blunders can be charged to them 
 — but that their policy, on the whole, was conducive to 
 national progress seems indisputable. No matter what pres- 
 ent conditions may appear to suggest, it is obvious that
 
 58 PROTECTION AND PROGRESS 
 
 nations, like men, have their periods of infancy, adolescence 
 and maturity, and perhaps final decrepitude and death, 
 although modern optimism has suggested that the resources 
 of commerce are such that this fate may be averted by intel- 
 ligent peoples. 
 
 If the British, in the infantile stage of their growth, had 
 wedded themselves to such a theory as that urged by the 
 economists of the Manchester school, how could they have 
 emerged from the comparative barbarism in which they were 
 plunged ? Had a mediaeval Cobden dissuaded Edward from 
 his attempt to create a woolen industry Britain might have 
 remained a pastoral country. If the British had been 
 thoroughly inoculated with the absurd idea that it is an 
 economic sin to artificially stimulate a manufacturing in- 
 dustry they might have held a position similar to that which 
 Spain occupies today. It was protection that saved the 
 English from this fate, and which for a time has enabled their 
 country to play the leading role in the commercial affairs 
 of the world.
 
 CHAPTER III. 
 
 FREE TRADE IN ENGLAND. 
 
 CAUSES THAT LED TO THE ABROGATION OF THE BRITISH 
 CORN LAWS. 
 
 The corn law agitation — The British not dissatisfied with the 
 results of protection — Movement due to a widespread depres- 
 sion caused by overproduction — Appearance of Cobden on the 
 scene — Arguments to remove the objections of the English 
 agricultural classes — Free traders convinced that English farm- 
 ers had ample natural protection — High prices promised as a 
 result of permanent prosperity — The warning of the Duke of 
 Wellington — The consequence of improved communication not 
 foreseen by Cobden and his followers — Free traders carry 
 water on both shoulders — A cheap loaf for the workingman 
 and high prices for the farmer's wheat are promised by them 
 — The world's markets glutted with English manufacturers on 
 the eve of the repeal of the corn laws — Effect of the scarcity 
 of the precious metals — No claim made during the '40s that 
 protection repressed production — McCulloch's assertion that 
 the English were superior in skill to all other peoples and that 
 none could hope to rival them — The attempt of the Cobdenites 
 to misrepresent the facts of history — The Manchester school 
 responsible for the propagation of the theory that wages and 
 cost of living are intimately connected — Why the English manu- 
 facturer aimed at securing cheap food supplies — The part 
 played by the potato famine and successive bad crops in creat- 
 ing converts to Cobdenism — Free trade not a logical develop- 
 ment, but the result of adventitious circumstances — What might 
 have happened had gold been discovered in California a few 
 years earlier. 
 
 In the preceding chapter it was shown that the charges 
 made against the mercantilists by the Cobdenites are ground-
 
 6o PROTECTION AND PROGRESS 
 
 less and that instead of being obnoxious to the imputation 
 of commercial imbecility the Englishmen of the generations 
 and centuries prior to the abrogation of the corn laws were 
 a discerning people who had adopted the only policy which 
 could be depended upon to give them a place in the race for 
 commercial supremacy. In the pages immediately following 
 proof will be furnished that the accusations to which refer- 
 ence is made w-ere an afterthought and that at the time of 
 the change of the incidence of taxation, which resulted in 
 the shifting of the burden to agriculture, under the pretense 
 that the nation would be generally benefited by such a 
 course, Englishmen in every grade of life were so well satis- 
 fied W'ith the outcome of the policy of protection that they 
 assumed airs of superiority and entertained beliefs which, 
 in the sequel, will be proved erroneous. 
 
 In order to obtain a just view of the motives which 
 prompted the abrogation of the corn laws we must turn 
 to the earlier writings and admissions of the followers of 
 the Manchester school. If these are minutely examined it 
 will be seen that in its inception the so-called free trade 
 movement was not so much an assault on the principle of 
 protection as a recognition of the fact that the English manu- 
 facturing industry had attained such a position that further 
 extension would be impossible unless other peoples who had 
 shown latent capacities of the same kind as the English 
 could be persuaded that their best interests would be served 
 by accepting the role of producers of food and raw material 
 for the British. 
 
 When the proposition to repeal the corn laws was first 
 mooted England was in the throes of a depression which 
 was mainly attributed to over-production, but which suc- 
 ceeding events demonstrated was the result of under-con- 
 sumption. Sir Robert Peel, the Prime Minister of England 
 at the time, who in the early stages of the discussion was on 
 the side of the agricultural interest, had attempted to account 
 for the existing troubles by showing that improved ma-
 
 FREE TRADE IN ENGLAND. 6i 
 
 chinery was creating goods faster than the world could 
 absorb them. 
 
 This view was combated by Richard Cobden in the 
 House of Commons. On the 8th of July, 1842, the state of 
 the country being under consideration, Cobden, in a speech, 
 "censured Mr. Peel for affecting to believe that the pre- 
 vailing distress was due to the introduction of machinery. 
 He said machinery does not throw people out of work if the 
 perfection and introduction to practical use are gradual. 
 He called upon Sir Robert Peel not to treat the subject with 
 quibbles about machinery, nor as a mere Manchester ques- 
 tion, but to look at it in connection with the whole condition 
 of the country."* 
 
 From this and similar early utterances of Cobden the 
 writer who made the above condensation of the free trader's 
 speech has assumed that the apparently broad and liberal 
 view^s of the later adherents of the Manchester school were 
 openly promulgated in England when the anti-corn law 
 agitation was in progress. An examination of the arguments 
 resorted to by Cobden and his associates and followers dis- 
 closes that an entirely different campaign was made, and 
 absolutely forbids the assumption that the people clearly 
 understood the question. The idea that British agriculture 
 would be imperiled by lowering or entirely removing the 
 duties from corn was scouted and those who raised a warn- 
 ing voice were derided. 
 
 Two years later than the date of the delivery of the 
 speech from which the above quotation is taken Mr. Cobden 
 made another address, which Trumbull also condenses in 
 this fashion : "Cobden then went on to show that every 
 prediction about corn had formerly been uttered about wool, 
 'but,' he inquired, 'is there any lack of mutton ? Are all the 
 sheep dogs dead, and all the shepherds in the poorhouse? 
 So far from it that when wool was at the highest price the 
 
 *Trumbull, Free Trade Struggle in England, p. 86.
 
 62 PROTECTION AND PROGRESS 
 
 largest quantity had been imported ; when at the lowest price 
 the smallest quantity.' This apparent paradox he explained 
 by showing that ability to buy is an important agent in fix- 
 ing prices. He condensed his explanation into the following 
 sentence : 'A high price from prosperity may be permanent ; 
 a high price from scarcity must always be precarious.' This 
 was new learning to the House of Commons and many of the 
 members were startled by the doctrine. Peel himself became 
 very thoughtful under the lesson, and afterward acknowl- 
 edged that the lesson was very new to him."* 
 
 This is not the place to inquire whether Cobden's trite 
 sentence fitted the condition of affairs existing when his 
 speech was made. The object in reproducing the quotation 
 here is merely to show that Cobden and others had deceived 
 themselves regarding the possible consequences that might 
 result to agriculture from the changes proposed and that it 
 would have been absolutely impossible to have persuaded the 
 people of England to throw down the barriers of protection 
 if they could have foreseen that free trade, so-called, would 
 make the Kingdom dependent upon the outside world for its 
 supplies of food. 
 
 It was absolutely necessary for Cobden and his adherents 
 in order to win success to completely remove the apprehen- 
 sions of that class whose fears were voiced by the Duke of 
 Wellington in a speech delivered in the House of Lords in 
 1842 in which "he earnestly recommended their lordships 
 not to lend themselves to the destruction of our native culti- 
 vation. Its encouragement," he said, "was of the utmost 
 and deepest importance to all classes, and he earnestly 
 begged of them not to consent to any measure which would 
 injure the cultivation of their own soil." f 
 
 Later on it will be shown that the Duke, whose fears were 
 ridiculed by the new economists, had a deeper insight into 
 
 ♦Trumbull, Free Trade Struggle in England, p. 159. 
 flbid, p. 54.
 
 FREE TRADE IN ENGLAND. 63 
 
 the future than his ghb critics, but the masses were easily 
 persuaded to consider them groundless. This is not sur- 
 prising when the then existing opinion regarding the effi- 
 cacy of natural protection is considered. Adam Smith had 
 taught the Cobdenites to believe, or, at least, they adopted 
 without challenge the view expressed by him sixty-five years 
 earlier, that "even the free importation of foreign corn could 
 very little affect the interests of the farmers of Great 
 Britain."* He thought that "if the free importation of 
 foreign manufactures were permitted several of the home 
 manufactures would probably suffer, and some of them per- 
 haps go to ruin altogether, and that a considerable part of 
 the stock and industry employed in them would be forced 
 to find some other employment. But the freest importation 
 of the rude products of the soil could have no such effect 
 upon the agriculture of the country." f 
 
 There is no doubt that in the '40s this view appealed 
 to most Englishmen who gave the subject attention. It was 
 freely expressed by all the anti-corn laws agitators, and Mill, 
 in his carefully thought out system of political economy, gave 
 the reasons in detail for the existing belief. "In the first 
 place," he said, "the foreign regions from which corn can 
 be imported do not comprise the whole globe, but those 
 parts of it almost alone which are in the immediate neighbor- 
 hood of coasts and navigable rivers. * * * To obtain aux- 
 iliary supplies of corn from the interior in any abundance 
 would in the existing state of communications be hopeless. 
 By improved roads, and often by canals and railways, the ob- 
 stacles will be so reduced as not to be insuperable ; but this 
 is slow progress ; in all the food-exporting countries except 
 America, a very slow progress ; and one which cannot keep 
 pace with population, unless the increase of the last is very 
 effectually restrained."! 
 
 ♦Smith, Wealth of Nations, Book IV, Chap. I. 
 
 flbid. 
 
 JMill, Principles of Political Economy, Book I, Chap. XIII.
 
 64 PROTECTION AND PROGRESS 
 
 In another place the same author says : "There is every 
 reason to expect that under the virtually free importation 
 of agricultural produce * * * the price of food, if pop- 
 ulation goes on increasing, will gradually but steadily rise ; 
 though this effect may for a time be postponed by the strong 
 current which in this country has set in toward the improve- 
 ment of agricultural science and its increased application to 
 practice."* 
 
 Such arguments as these disarmed the opposition of the 
 landed interest. Its members and sympathizers were finally 
 convinced that they had nothing to fear from foreign com- 
 petition, and they fondly imagined that the creation of a 
 great working class by increasing the number of consumers 
 would strengthen rather than weaken the monopoly they 
 enjoyed. This assumption seems inconsistent with the 
 promise of the cheap loaf held out to the workingmen in the 
 towns, but it was not a time when arguments could be made 
 symmetrical ; that was reserved for the economists of a later 
 period. It was the business of Cobden and those working 
 with him to get votes, and it did not matter much to them if 
 the assertions made by them did not harmonize, or perhaps it 
 would be fairer to assume that they believed all they said, 
 no matter how irreconcilable some of their statements may 
 appear to us at this day. 
 
 That they honestly deceived themselves may be inferred 
 from an opinion expressed by J. Thorold Rogers a quarter 
 of a century after the great triumph of Cobden had been 
 achieved. He declared that in England : "Since the repeal of 
 the corn laws the price of agricultural land has steadily risen ; 
 for though the average price of wheat has fallen, that of 
 other kinds of grain, as is found by the tithe averages, has 
 risen, while meat and dairy products have more than doubled 
 in value since the period referred to," and in the same con- 
 nection he remarked : "It is probable that, on the whole, suc- 
 
 *Mill, Principles of Political Economy, Book V, Chap. IV.
 
 FREE TRADE IN ENGLAND. 65 
 
 cessftil agriculture, that is, the production of the largest 
 quantity in value from the soil at least cost, has made more 
 progress in the United Kingdom than in any other country."* 
 
 Here again comment on the errors made by the writer 
 must be deferred, the present object being merely to indicate 
 the strength and prevalence of the belief that English agri- 
 culture was thoroughly entrenched, from which the infer- 
 ence may be fairly drawn that had a contrary opinion pre- 
 vailed the so-called free trade experiment would never have 
 been made. 
 
 Having outlined the processes by which hostile opinion 
 was disarmed it now becomes necessary to examine more 
 minutely the expectations of the Manchester school. As 
 a preliminary to an investigation of this kind it may be well 
 to briefly sketch the conditions existing in England when the 
 agitation against the corn laws began. It appears from the 
 Parliamentary reports and the statements of historians that 
 in 1842 there was a widespread depression which affected 
 every branch of industry in Great Britain. On the loth of 
 March of that year, "Mr. Cobden brought on his motion for a 
 select committee to inquire into the course of agricultural 
 distress," contending "that the corn laws were an injury in- 
 stead of a benefit to the farmers and farm laborers" and 
 offering to demonstrate the soundness of his view if they 
 wOuld grant him a committee. -j- 
 
 From Green we learn that after the peace which closed 
 the Napoleonic wars a rapid development of English in- 
 dustry occurred which "for a time ran ahead of the world's 
 demands ; the markets at home and abroad were glutted with 
 unsalable goods and mills and manufactures were brought to 
 a standstill." J 
 
 This condition was not materially improved during the 
 
 ♦Rogers, Article "Free Trade," Ency. Brit. 
 j-Trumbull, Free Trade Struggle in England, p. 196. 
 I Green, History of English People, Vol. IV, p. 1829. 
 
 a
 
 66 PROTECTION AND PROGRESS 
 
 following years. The English continued to add to their 
 facilities for manufacturing, and as they had long out- 
 stripped the home demand the necessity of securing addi- 
 tional markets and of holding those already obtained became 
 very pressing. As may be inferred from Green's remark, 
 British manufacturers had already become possessed of the 
 idea that in some way they were peculiarly fitted to fashion 
 the rude products of the earth into finished articles, but they 
 were embarrassed by the disposition manifested by some 
 foreigners, notably Americans, to provide themselves with 
 a home manufacturing industry, protective tariffs being 
 resorted to for the furtherance of that object. 
 
 These efforts were looked upon with contempt by the 
 English of all classes, who were firmly convinced that it 
 would be impossible for their feeble rivals to seriously com- 
 pete with the firmly established industries of Great Britain 
 without resorting to tariffs which would prove absolutely 
 prohibitory, and the result in a measure seemed to justify 
 this opinion. 
 
 Owing to lack of firmness opportunities were afforded 
 the English to effectually discourage manufacturing in the 
 United States and other countries, and at the time of the 
 corn law agitation England was in such a position that she 
 could undersell rivals even when the latter were accorded 
 what seems at this time a fair degree of protection. 
 
 But in spite of her admitted superiority in the industrial 
 field England in the early '40s was suffering from the 
 effects of an extreme depression, which, as we have seen, 
 was attributed by such men as Sir Robert Peel to the rapid 
 improvement of machinery and consequent overproduction 
 of manufactured articles. There was, however, another and 
 much more potent cause operating which seems to have 
 attracted little attention at the time, and as yet is but im- 
 perfectly understood, although there is a growing disposi- 
 tion to recognize the fact that it was the removal of this
 
 FREE TRADE IN ENGLAND. 67 
 
 cause which contributed to the subsequent rapid expansion 
 of EngHsh industry. 
 
 From the budget speeches of EngHsh Ministers of the 
 time and other sources the fact may be gathered that the 
 scarcity of the precious metals was becoming embarrassing. 
 Mr. Gladstone is quoted by a writer who seeks to make a 
 point against the mercantile system as bewailing the drain of 
 gold and sorrowfully announcing to the House of Commons 
 in 1842 that since the beginning of the year three millions 
 sterling had been sent to America in payment for the prod- 
 ucts of that country. 
 
 Mr. Gladstone may have been the victim of "an ancient 
 superstition" when he referred to the drain of gold in a 
 fashion suggesting that he thought it an evil, but whatever 
 views he entertained regarding the effects of such a move- 
 ment one thing is obvious, namely, that specie was becoming 
 scarce in England or he would not have expressed apprehen- 
 sion. That such was the case we have plenty of testimony 
 independent of budget statements. 
 
 According to Soetbeer the annual production of the 
 precious metals, which averaged about $52,000,000 at the 
 opening of the nineteenth century, had declined to $32,500,- 
 000 per annum in 1846. This diminution occurred concur- 
 rently with a great expansion of manufactures and commerce 
 due to the improvements in machinery which followed the 
 employment of steam energy. Consequently, in addition to 
 the evil results entailed by an appreciating currency, which 
 are manifested in the falling prices of the period, the Eng- 
 lish had also to contend with the difficulty which Smith and 
 other writers had pointed out must occur if the supplies of 
 the money metals are not adequate to the wants of a grow- 
 ing trade. 
 
 Although the wealth of the nation had increased enor- 
 mously and the annual produce of its labor was growing 
 greater year by year, instead of the greater quantity of money
 
 68 PROTECTION AND PROGRESS 
 
 metals which the author of the "Wealth of Nations" said 
 would be required to circulate a greater quantity of com- 
 modities* the supply was daily becoming smaller. Under 
 the circumstances it is not surprising that at the opening of 
 the '40s the congested state of afifairs described by free 
 trade writers should have existed and that the manufac- 
 turers, who were confronted with a constantly declining as 
 well as contracting market, should have cast about for a 
 remedy for their troubles. 
 
 We are told by a free trade author who has sketched 
 the events immediately preceding and following the repeal 
 of the corn law^s that "the business depression and the 
 poverty of the people were potent arguments in the speeches 
 of the leaders of the anti-corn law league, and that during 
 the winter of 1842-43 the league and its literature were 
 everywhere, and men who could not read were compelled to 
 listen. "-j- But this literature may be searched in vain for 
 traces of the theory subsequently advanced that restraint 
 of trade had a tendency to repress production. 
 
 It would have been extraordinary indeed if the anti-corn 
 law agitators had told their hearers, who were complaining 
 of overproduction, that the efifect of protection had been to 
 repress British industry. No sucH pretense was made. On 
 the contrary, the fact was dwelt upon that England was in 
 a position which gave her a decided advantage over the rest 
 of the world. There was no talk of removing restraints so 
 that Englishmen might expand their manufactures ; the argu- 
 ment was entirely directed to the question of finding relief 
 for an overexpansion. 
 
 The situation and opinions of the English at this time 
 are accurately sketched by McCulloch, who wrote as fol- 
 lows : "The natural capabilities we possess for carrying on 
 the business of manufacturing are, all things considered, 
 
 *Smith, Wealth of Nations, Book I, Chap. XI. 
 fTrumbull, Free Trade Struggle in England, p. 145.
 
 FREE TRADE IN ENGLAND. 69 
 
 decidedly superior to those of any other people. But the 
 superiority to which we have already arrived is, perhaps, 
 the greatest advantage in our favor. Our Western manu- 
 facturers, engineers and artisans, are more intelligent, skillful 
 and enterprising than those of any other country ; and the 
 extraordinary inventions they have already made, and their 
 familiarity with all the principles and details of business, 
 will not only enable them to perfect the processes already in 
 use, but can hardly fail to lead to the discovery of others. 
 Our establishments for spinning, weaving, printing, bleach- 
 ing, etc., are infinitely more complete and perfect than any 
 that exist elsewhere ; the division of labor in them is carried 
 to an incomparably greater extent ; the workmen are trained 
 from infancy to industrious habits and have attained that 
 peculiar dexterity and sleight of hand in the performance of 
 their separate tasks that can only be acquired by long and un- 
 remitting application to the same employment. Why, then, 
 having all these advantages on our side, should we not keep 
 the start we have already gained ? Every other people that 
 attempt to set up manufactures must obviously labor under 
 the greatest difficulties as compared with us. Their estab- 
 lishments cannot at first be sufficiently large to enable the 
 division of employments to be carried to any considerable 
 extent, at the same time that expertness in manipulation, 
 and in the details of the various processes, can only be 
 obtained by slow degrees. It appears, therefore, remarkable 
 to conclude that such new beginners, having to withstand 
 the competition of those who have already arrived at a very 
 high degree of perfection in the art, must be immediately 
 driven out of every market equally accessible to both parties ; 
 and that nothing but the aid derived from restrictive regula- 
 tions and prohibitions will be effectual to prevent the total 
 destruction of their establishment in the countries where they 
 are set up."* 
 
 *McCulloch, Commercial Dictionary, p. 462.
 
 70 PROTECTION AND PROGRESS 
 
 Every line of this excerpt contradicts the assumption 
 that protection was a hindrance to the development of Eng- 
 lisii industry and testifies to the fact that by its aid Great 
 Britain had built up a system of manufactures which the 
 most competent critics of the time claimed was superior to 
 that of any other nation. It shows also that McCulloch, who 
 wrote in 1847, clearly recognized that it would be impossible 
 for a nation unprovided with a thoroughly developed manu- 
 facturing industry to compete with England unless the 
 methods resorted to by that country were imitated. When 
 he asserted that only by restrictive regulations and prohibi- 
 tions could a country without manufacturing establishments 
 hope to escape the destructive effects of British competition, 
 he must have had in mind the fierce struggles of England 
 to gain a foothold among the commercial nations of the 
 world, struggles which she never shrunk from in the pursuit 
 of her purpose, although they had often involved her in 
 bloody and costly wars. 
 
 The marvelous feature of the whole discussion is that 
 the adherents of the Manchester school have vainly imagined 
 that they could conceal or obscure these admissions and oblit- 
 erate the truth of history. The only thing that saves the 
 attempt from ridicule is the fact that it nearly succeeded. It 
 cannot be gainsaid that for many years after the abrogation 
 of the corn laws large numbers of persons living in other 
 countries believed, or affected to believe, that in some ways 
 the teachings of experience would be refuted, and that peo- 
 ples without manufacturing systems would be able, in the 
 face of all the advantages enjoyed by nations with established 
 industries, to create home industries for themselves without 
 resorting to protection. 
 
 There were some, however, who insisted upon accepting 
 as sound the assumption of McCulloch and other Cobdenites 
 that Great Britain possessed an overwhelming advantage 
 and that it would be hopeless to contend with her on even 
 terms. These reasoning persons proposed to disregard the
 
 FREE TRADE IN ENGLAND. 71 
 
 allurements of present cheapness, and by making temporary 
 sacrifices to secure for their own countries future benefits. 
 Their arguments in favor of such a course were rational. 
 They pointed out that the toil and expense which attended 
 the creation of such facilities as roads were often heavy 
 burdens, but that those who bore them were recompensed by 
 the conveniences provided and the subsequent lessening of 
 the labor involved in locomotion and in moving products 
 from one point to another. They argued that only the 
 untutored savage insisted upon taking from natural streams 
 the water he required for drinking or other purposes, and 
 that civilized man did not shrink from the expenditure of 
 time and labor necessary to dig wells or construct conduits 
 to bring the supplies he required to his door or into his house. 
 
 From such examples they drew the inference that a 
 resort to art means progress, and boldly planted themselves 
 upon the proposition that a manufacturing industry would 
 not develop itself naturally and that such a system must be 
 artificially produced. If obstacles were placed in the way 
 of artificial development then they must be met and over- 
 come. 
 
 To meet such arguments the Manchester school devoted 
 itself to systematizing the free trade idea. Many of the 
 theories made familiar through its instrumentality after 1846 
 were unheard of, or, at least, not widely exploited in England 
 prior to that date. It would have been absurd for Cobden 
 and his associates to tell the British that they had made a 
 mistake in resorting to artificial means to promote their 
 manufacturing industry, or that the resort to artificiality 
 had been a failure, for the facts would have promptly refuted 
 such assertions. 
 
 Every Englishman of average intelligence knew that pro- 
 tection had been in vogue in England for centuries and that 
 it had resulted in the building up of an unrivaled manufac- 
 turing system and had given his country command of the 
 seas. There was very little discussion of abstractions ; it was
 
 ^2 PROTECTION AND PROGRESS 
 
 the condition that confronted them to which Cobdenites 
 devoted their attention. They recognized that under the 
 then existing circumstances there could be little hope of a 
 further expansion of English manufactures unless matters 
 could be so adjusted that Great Britain would be enabled 
 to produce so cheaply that the nations showing a disposition 
 to create industries of their own would be discouraged and 
 perhaps induced to believe that their best interests would be 
 subserved by depending upon the British for their supplies 
 of manufactured articles. 
 
 Accordingly all of the resources of argument were di- 
 rected to convincing Englishmen that they would incur no 
 sacrifice by abrogating the corn laws. The drift of the 
 discussion is plainly seen in this comment on the attitude of 
 Sir Robert Peel on the eve of abrogation. Says the writer : 
 "He was yielding to the force of argument and more en- 
 larged experience. He had closely watched the operation 
 of protective duties during the past four or five years and 
 was now convinced that the arguments in favor of their 
 maintenance were no longer tenable. He was convinced 
 that low wages were not the result of low prices of food. 
 Sir Robert supported this last statement by facts that could 
 not be denied, the rate of wages and the rate of prices that 
 had preceded during the past six years. He said : 'For three 
 years preceding those last past, prices were high, while 
 wages were low, while during the past three years prices 
 were low while wages were high.' This was a very uncom- 
 fortable statement for those political economists who had 
 been trading on the fallacy that the protective tarifif was nec- 
 essary in order to secure high wages for the workingmen, 
 and that cheap bread and meat and clothes meant low 
 wages. * 
 
 It requires considerable audacity to assert that the so- 
 called fallacy of assuming that wages are governed in part 
 
 *Trumbull, Free Trade Struggle in England, p. 225.
 
 FREE TRADE IN ENGLAND. yi 
 
 by the cost of subsistence was advanced by protectionists, 
 but this is a quaHty which is never found lacking in adherents 
 of the Manchester school. We need but turn to the pages of 
 Smith to discover that he carefully developed this idea, 
 which is frequently denounced as an economic heresy by 
 Cobdenites, Smith tells us plainly that "as the wages of 
 labor are everywhere regulated partly by the demand for it 
 and partly by the average price of the necessary articles of 
 subsistence, whatever raises this average price must neces- 
 sarily raise those wages, so that the laborer may still be able 
 to purchase that quantity of these necessary articles which 
 the state of the demand for labor, whether increasing, sta- 
 tionary or declining, requires that he should have."* 
 
 If the wages of labor and subsistence were believed to 
 be intimately associated by the economists of the period 
 immediately preceding the corn law agitation the belief will 
 explain the attitude of the British manufacturers. It had 
 been pointed out to them by various writers, and their own 
 observations confirmed what they were told, that the effect 
 of the expansion of the world's commerce and the increase 
 of wealth was to raise wages. Smith had noted the tend- 
 ency, saying: "Since the time of Henry VIII the wealth 
 and revenue of the country have been continually advancing, 
 and in the course of their progress their pace seems rather 
 to have been gradually accelerated than retarded. They seem 
 not only to have been going on, but to have been going on 
 faster and faster. The wages of labor have been continually 
 increasing during the same period." f 
 
 This phenomenon, noted toward the end of the eighteenth 
 century, manifested itself in a more decided manner after 
 the opening of the nineteenth century. We know from the 
 evidence of Green, Cunningham and others that there was 
 a period of expansion which resulted in the overproduction 
 
 *Smith, Wealth of Nations, Book V, Chap. II. 
 flbid, Book I, Chap. IX.
 
 74 PROTECTION AND PROGRESS 
 
 already referred to, concurrently with which there was a 
 great increase of wealth. In this increase the English 
 worker participated. Wages continued to improve during 
 the nineteenth century, and the condition of the workingmen 
 of England was decidedly better forty years after its opening 
 than at the time when Smith wrote. 
 
 Then came the period of sharp contraction, due undoubt- 
 edly to the diminution of the supply of precious metals. 
 The first to feel the effects were the manufacturers, who 
 found the demand for their products shrinking, or, what 
 amounts to the same thing, they discovered the inability of 
 the world to keep abreast of their facilities for production. 
 They began to cast about for remedies, and naturally devoted 
 their attention to the question of wages. They soon discov- 
 ered that the obstacles to peremptory reductions were almost 
 insuperable, for while the law which Smith had observed 
 undoubtedly operates, it is slow in its operation, for what 
 advances the workingman has gained through progress he 
 never surrenders except under the compulsion of necessity. 
 
 It was to hasten this consummation that the British man- 
 ufacturers forced the issue of a cheap loaf. They under- 
 stood perfectly that it would be impossible for them to 
 maintain their position unless they could secure cheap food 
 in abundance for their operators and free raw materials 
 for their machinery to operate upon. It is probable that 
 they believed that throwing down the barriers of protection 
 would involve no sacrifice, for, as we have already shown, 
 the impression was general in England that British agricul- 
 ture was firmly entrenched against foreign rivalry, and 
 many were convinced that the further development of the 
 manufacturing industry which the free trade policy contem- 
 plated would so enlarge the home market that the farmer 
 would enjoy better prices than he did under the protective 
 system. 
 
 But it is evident that many of those who were strongly 
 imbued with the idea of British manufacturing superiority
 
 FREE TRADE IN ENGLAND. 75 
 
 were willing to see the industry in which they were specially 
 interested prosper at the expense of agriculture. The germs 
 of some of the theories which were so carefully elaborated 
 later had already begun to develop, and the idea of making 
 a vast workshop of England, which subsequently took hold 
 of the popular imagination and greatly impressed observers 
 in other countries, sometimes found expression in the corn 
 law debates. Those who gave voice to it cautiously sug- 
 gested that the injury to the farmer would be more than 
 compensated by the benefits to the growing urban popula- 
 tions. From this we may infer that the addresses to the 
 workingmen in the towns and the farmers in the country 
 lacked congruousness, but the orators relied upon the fact 
 that the two classes of audiences they were called upon to 
 address were not in close contact, and they also perceived 
 that the extremity in which the people found themselves, 
 owing to the depression, had destroyed the sense of discrim- 
 ination and inclined them to regard any change as a remedy. 
 It is commonly assumed that the free trade policy devel- 
 oped itself logically in England, but it requires no wide 
 acquaintance with the history of the movement to perceive 
 that the legislative success of the manufacturers was achieved 
 by the aid of adventitious circumstances. Green tells us 
 that although Robert Peel entered office pledged to protec- 
 tion measures, his own mind was slowly veering around to 
 a conviction of their inexpediency, but he destroys the force 
 of this comment by saying that "in 1846 the failure of the 
 potato crop in Ireland and of the harvest in England forced 
 Peel to introduce a bill for the repeal of the corn laws."* 
 Another writer, with better claims to economic authority 
 than Green, tells us that protection owed its overthrow to 
 the potato famine.f and this view is now generally accepted 
 by most investigators. This does not imply that commenta- 
 
 *Green, History of English People, Vol. IV, p. 1843. 
 
 f Nicholson, Principles of Political Economy, Vol. II, p. 163.
 
 76 PROTECTION AND PROGRESS 
 
 tors had any doubts that the idea would have been adopted 
 if the circumstances had been different ; they merely recog- 
 nize that a combination of disasters assisted the manufac- 
 turers and enabled them to carry through a measure of vital 
 importance to them, even if it did threaten the, at the time, 
 leading industry of the country. 
 
 It requires but little reflection to direct the attention to 
 contingencies which might have completely changed the 
 current of English thought. Had the concurrent failure 
 of the potato crop and the harvest in England not occurred 
 the struggle over protection might have been protracted 
 until the influence of the gold discoveries in California and 
 Australia had begun to make themselves felt. 
 
 Had matters so turned out it is not unreasonable to sup- 
 pose that attention would have been diverted from the 
 subject by the substitution of business activity for the exist- 
 ing depression. In that event the progress made in every 
 branch of industry and the subsequent rapid acquisition of 
 wealth by the British, which has been attributed by the Cob- 
 denites to the operations of free trade, would have been 
 assigned to some other cause. Perhaps the true reason for 
 the expansion would have been comprehended, and the 
 future trouble which England must experience from the 
 adoption of an erroneous, because it is an unnatural, eco- 
 nomic system might have been averted. 
 
 Had gold been discovered a few years earlier in Califor- 
 nia and Australia the whole course of history would have 
 been changed. In that event there would have been no 
 Cobdenism. The story the future historian will have to 
 tell in consequence will be vastly different from what it 
 might have been had the supply of the precious metals been 
 abundant during the first half of the century. Because of 
 their scarcity during this period history will exhibit the 
 British in the light of a people grasping at universal domin- 
 ion and seeking to obtain it by the expenditure of pounds, 
 shillings and pence. It will also show that the blundering
 
 FREE TRADE IN ENGLAND. ^j 
 
 misconceptions of English economists were responsible for 
 the illusory hope, which was almost wholly based on the 
 groundless belief that British skill and ingenuity would 
 always insure the supremacy of the nation in thcv fields of 
 industry, that England would become and remain the mis- 
 tress of the world.
 
 CHAPTER IV. 
 
 FOUNDATION OF ENGLISH SUPREMACY. 
 
 GREAT BRITAIN READY TO TAKE ADVANTAGE OF THE GOLD 
 DISCOVERIES. 
 
 England's manufacturing industry in 1841 — Able to supply the 
 needs of the world — British commerce before the repeal of the 
 corn laws — Rival nations have developed manufactures at a 
 greater rate than the United Kingdom — Great Britain's relative 
 position as a manufacturer of textiles not so good as formerly 
 — Once supreme as a producer of iron, Great Britain now holds 
 second rank — Agriculture progressive before the repeal of the 
 corn laws, retrogressive since that event — The increase of 
 wealth as rapid before the free trade era as it has been since — 
 Population increased more rapidly prior to 1846 than after- 
 ward — Great Britain gained the lion's share of the advantages 
 resulting from the gold discoveries — Assumption that British 
 workers were more skilled than those of other countries — Be- 
 ginning of England's career as a great creditor nation — Improve- 
 ment of British trade not due to repeal of corn laws — Heavy 
 declines of exports during 1847 and 1848 — Improvement sets in 
 when fresh supplies of the metals are given to the world — 
 Great profits made by the British before other nations became 
 competitors — Inability of British writers to comprehend the 
 true cause of the rapid development of the United Kingdom. 
 
 Before proceeding to the examination of the blunders 
 made by the Manchester school, to which reference was 
 made in the preceding chapter, it is advisable to produce 
 the evidence which will effectually corroborate the assump- 
 tion of McCulloch and others that at the time of the abolition 
 of the corn laws England was in a better position commer- 
 cially than any other nation, and that the idea entertained 
 
 by this school of thinkers that if other countries would 
 
 78
 
 ENGLISH SUPREMACY 79 
 
 consent to the project of making Great Britain the workshop 
 of the world the English might permanently maintain their 
 industrial supremacy was not entirely visionary. 
 
 This proof will be largely statistical in character, and it 
 will be so presented that it will be impossible to avoid draw- 
 ing the inference that the Cobdenites have grossly exagger- 
 ated the importance of the commercial growth of England 
 since 1846 in order to carry the impression that the protective 
 system in vogue prior to that date had greatly restricted 
 industry in that country and that expansion would have 
 been impossible if the views of Cobden and his followers had 
 not prevailed. 
 
 In order that no question may arise respecting the authen- 
 ticity of the figures quoted, the latest publication of Michael 
 Mulhall has been relied upon, because it is regarded as 
 authoritative in England."* Turning to its pages, we find 
 that the occupation of the inhabitants of the United Kingdom 
 in the year 1841 was as follows: In agriculture there were 
 employed 3,401,000 persons; in manufacturing, 3,137,000; 
 in trade, 684,000 ; in the professions, 223,000, and as domes- 
 tics, 1,556,000. According to these figures there were 9,001,- 
 000 British employed in gainful occupations in the year 
 named in a population of 26,855,000. The ratio of those 
 employed in manufacturing industries was 34.8 of the total 
 engaged in gainful occupations, as against 37.8 in agri- 
 culture. 
 
 It is apparent from this presentation that as early as 
 1841 the development of British manufacturing was abnor- 
 mal. The industry had long ceased to merely suffice for 
 the requirements of the British people, and its further 
 expansion at that time was dependent on the growth of pop- 
 ulation and the ability to sell to other peoples. 
 
 In 1 841 British exports were valued at i6 4s per capita. 
 They consisted chiefly of manufactured articles, which were 
 carried in British ships to all parts of the world. No country 
 
 ♦Mulhall, Industries and Wealth of Nations, 1896 Ed.
 
 8o PROTECTION AND PROGRESS 
 
 at this time approached England's vohime of trade. Her 
 proportion of the commerce of the globe was as great in 
 that year as it has ever been since. In 1840 the total exter- 
 nal trade, exports and imports, of all nations was estimated 
 at £574,000,000. Of this amount £114,000,000, almost one- 
 fifth, was credited to Great Britain. In 1894 the world's 
 foreign trade was figured at £3,305,000,000 and England's 
 share of it at £682,000,000, a trifle more than one-fifth of 
 the whole. 
 
 If no other facts could be cited to support the contention 
 that the development of British trade subsequent to the 
 repeal of the corn laws was not .owing to that particular 
 change of fiscal policy, these figures would be sufficient to 
 discredit the claim of the Cobdenites that England's present 
 commercial position is due to free trade. To establish their 
 position the adherents of the Manchester school should be 
 able to show that other nations which refused to adopt the 
 English economic policy had been unsuccessful in expanding 
 foreign trade, but they cannot do so. The tables of exports 
 and imports demonstrate conclusively that protectionist 
 countries have advanced more rapidly since 1850 than Great 
 Britain. 
 
 It has always seemed to the writer that the tendency of 
 the free trader to attach an undue importance to foreign 
 trade has resulted in clouding his judgment and rendering 
 him unable to discern the true causes of certain economic 
 phenomena. There is no doubt that the proclivity referred 
 to has made him incapable of perceiving that the adverse 
 balance which British exports and imports has shown for a 
 long period is not due to the workings of the economic sys- 
 tem resorted to by Great Britain, but is chiefly, if not wholly, 
 the result of British investments in other countries ; and that 
 ultimately what is now looked upon as an indication of 
 prosperity will be recognized as a menace to the welfare 
 of the producing masses of England. In another place this 
 view will be more thoroughly developed ; reference is made
 
 ENGLISH SUPREMACY 8i 
 
 to it here merely to call attention to the significant circum- 
 stance that while Great Britain has thus far maintained an 
 important position as a trading nation she has lost ground 
 as a producer. 
 
 In 1840 Mulhall estimates that the value of the output of 
 the world's manufactories was £i,8io^ooo,0(X). Great Brit- 
 ain's share of this amount was £246,000,000, or a little more 
 than one-seventh of the whole. In 1894 the world's output 
 had increased to £5,676,000,000, but Great Britain's propor- 
 tion was considerably less than one-seventh, her production 
 being valued at £826,000,000. 
 
 But a better insight into the changes wrought during this 
 period may be gained by examining the relative conditions of 
 the industries in which Great Britain was once assumed to be 
 supreme. Take the case of textile fabrics. In 1840 the value 
 of textile fibers consumed in the United Kingdom was 
 £92,000,000, or nearly one-third of the world's product, 
 which was estimated at £246,000,000. In 1894 England's 
 consumption of textile fibers was considerably less than one- 
 fourth, her share being £191,000,000 of the world's total of 
 £826,000,000. In 1840 England was credited with more than 
 one-half of the world's product of iron ; in 1894 her propor- 
 tion was less than one-fourth. In the first named year the 
 value of the hardware manufactured by the United Kingdom, 
 under which term are included all goods in which iron, steel, 
 copper or other metals are the chief components, was 
 £30,000,000, the whole world being credited with a produc- 
 tion valued at £90,000,000. Fifty-four years later the 
 product of the world was valued at £603,000,000 and the 
 share of the United Kingdom at £142,000,000. In 1840 Eng- 
 land's proportion of the whole hardware product was one- 
 third ; in 1894 it was less than one-fifth. 
 
 Turning to the figures of mineral production, we find 
 
 that as early as 1830 the output of British coal was 16,100,000 
 
 tons, and that twenty years later it was 49,000,000 tons. 
 
 This shows a degree of progress which has not been sur- 
 
 e
 
 S2 rM^OTFXTION AND PROGRESS 
 
 passed since 1850, the figures of production in 1895 iK-ing 
 189,000,000 tons, less than a fourfold increase during a 
 period of forty-five years, whereas during the twenty years 
 preceding 1850 the increase was over threefold. 
 
 The statistics tell a similar story of the production of 
 other minerals. In 1830 the British output of minerals 
 other than coal was 1,980,000 tons; this quantity had in- 
 creased to 5,800,000 tons in 1850, or almost threefold; 
 between 1850 and 1870 the increase of the output was less 
 than threefold, and during the twenty-five years between 
 1870 and 1895 there was a diminution in the rate of pro- 
 duction. 
 
 Between 1827 and 1846 British agriculture was progres- 
 sive. In the first mentioned year there were 19,140,000 
 acres under crops ; in the year of the repeal of the corn laws 
 this acreage had increased to 21,930,000. Between 1840 and 
 1895 there was a decline to 20,050,000 acres under grain. 
 
 This rapid glance at the condition of industry in Great 
 Britain prior to the repeal of the corn laws may be con- 
 cluded with the statement that British wealth increased 
 as rapidly during the years anterior to 1846 as subsequently. 
 The tables furnished by Mr. Mulhall do not permit us to 
 give the statistics for the periods with the exactness that 
 might be desired, but he shows that between 1812 and 1836 
 the wealth of the United Kingdom increased from £404.- 
 000,000 to £600,000,000, and that between 1836 and 1870 the 
 increase was to £938,000,000. It is noteworthy in this con- 
 nection that the population increased from 18,500,000 in 
 1 81 2 to 25,000,000 in 1836, and that twenty-four years 
 later, in i860, it Avas only 29,000,000. The addition during 
 twenty-four years of protection was 6,500.000; during the 
 latter twenty-four years, fourteen of which fell within the 
 free trade period, it was only 4.000,000. 
 
 These statistics show conclusively that no matter what 
 may have been the condition of Great Britain during the 
 years of the corn law agitation it cannot be truthfully
 
 ENGLISH SUPREMACY 83 
 
 alleged that protection had prior to that time acted as a 
 restriction on production or trade in the United Kingdom. 
 Indicating, as these figures do, that there was as rapid a 
 degree of progress in every industry before the change of 
 policy as that attained in later years, it is manifestly absurd 
 to claim that Great Britain has flourished because she 
 changed her tariff. There is no evidence whatever to sup- 
 port such a theory ; on the contrary, the facts point to an 
 entirely different cause of the expansion of the commerce 
 and trade of the United Kingdom, an expansion which 
 she experienced in common with the rest of the world. 
 
 If the period between 1850 and 1895 is taken as a whole 
 it will be seen that the relative position of Great Britain 
 did not improve, but there is no doubt that in the years 
 immediately following the gold discoveries in California 
 and Australia the British secured the lion's share of the 
 advantages. Why Great Britain was able to do so is dis- 
 closed by a more detailed examination of the statistics already 
 drawn upon so freely. These show that there was no nation 
 in the running with Great Britain at the close of the '40s. 
 
 In 1840 the international or foreign trade of Great Brit- 
 tain was nearly double that of France, more than double 
 that of Germany and twice and a half as great as that of 
 the United States. At that time the balance of trade was 
 in favor of the British, the exports exceeding imports very 
 largely. It is useless to give the official figures in this con- 
 nection, for they are extremely misleading, creating the 
 impression of a stagnant trade, because they take no note 
 of the continuous decline in values of produce between the 
 opening of the century and the year 1850, but, erroneous 
 as they are, they show a constant expansion of exports, 
 especially of manufactured articles. 
 
 When we begin to institute comparisons we soon light 
 upon the reason for this steady increase. It was solely 
 due to the artificially acquired superiority of the British, 
 and not to any natural advantages enjoyed by them over
 
 84 PROTECTION AND PROGRESS 
 
 competitors, as has been persistently assumed by free trade 
 writers. 
 
 In 1840 the British produced 1,390,000 tons of iron, or 
 more than one-half of the world's product in that year, 
 which was reckoned at 2,680,000 tons. The ten years fol- 
 lowing witnessed an increase of British product to 1,970,000 
 tons without a corresponding increase in the output of other 
 nations. The false inference drawn from English expan- 
 sion and the relative backwardness of other countries in 
 this industry was that the skill of the workers and the 
 quality and extent of the deposits of the mineral in the 
 United Kingdom were such that it possessed a decided 
 advantage over all competitors. 
 
 Perhaps such deductions were reasonable at the time, for 
 the disparity in production seemed to indicate the posses- 
 sion by the British of advantages not enjoyed by their 
 rivals. In 1840, while Great Britain was producing 1,390,- 
 000 tons of pig iron, the United States could only show 
 an output of 290,000 and Germany of 170,000 tons. In 
 1850 the conditions remained substantially the same; con- 
 sequently it was not surprising that English writers and 
 politicians should have made the blunder of assuming when 
 this country began increasing its demands for British iron 
 and steel, and articles manufactured therefrom, that we had 
 found out that we could supply ourselves more cheaply by 
 resorting to England, and that we would always continue 
 to depend upon that country for such goods. The free 
 trade literature of the years between 1850 and 1875 is filled 
 with assumptions of this kind; since the latter date the 
 idea has been abandoned. 
 
 It was not only in the iron industry that Great Britain en- 
 joyed pre-eminence at the time of the repeal of the corn 
 laws. In 1840 she had distanced all competitors in the 
 manufacture of textile fabrics. Mulhall has made a cal- 
 culation of the value of the fibers consumed by the nations 
 of the world in that year and states that it aggregated
 
 ENGLISH SUPREMACY 85 
 
 i246,000,000, on the basis of £170 per ton. The consump- 
 tion of the United Kingdom was £92,000,000, while that of 
 France was £52,000,000, Germany and the United States 
 being credited with £22,000,000 and £15,000,000 respectively. 
 
 These figures scarcely reveal the full extent of the lead 
 of Great Britain. That can only be appreciated by keeping 
 in mind that the United Kingdom had for many years been 
 an exporter of textiles, while her most important rivals 
 were unable to supply their home demands. This was par- 
 ticularly the case in the United States, where, as we have 
 seen, the iron and steel and the textile industries were at a 
 low stage during the whole of the decade preceding the 
 gold discoveries. And what is stated of the particular in- 
 dustries mentioned was equally true of every other indus- 
 try in the United States at the time. 
 
 From this presentation the reader will readily compre- 
 hend that when the injection of large quantities of the pre- 
 cious metals into the stagnant waters of business began 
 to stir them and set the waves of prosperity in motion, Great 
 Britain was in a position to take advantage of the changed 
 circumstances. Her factories, which had for years been 
 producing in excess of the needs of Englishmen and of 
 the ability of foreigners to buy, were suddenly relieved of 
 their surplus stocks, which were exchanged for the virgin 
 gold of California and Australia. 
 
 The supplies of the precious metals thus obtained not 
 only revivified the home trade of England ; they were em- 
 ployed with equal effectiveness in promoting that roundabout 
 trade with foreign countries which Adam Smith so fre- 
 quently dwelt upon. During the years following the gold 
 discoveries England largely increased her investments in 
 the United States and other countries, and thus made possi- 
 ble the apparent anomaly subsequently witnessed of a peo- 
 ple being able to buy hundreds of millions more annually 
 than they sell and to remain prosperous during the process.
 
 86 PROTECTION AND PROGRESS 
 
 That the era of prosperity enjoyed by England subse- 
 quent to 1849 should have been attributed by later writers 
 to the operations of free trade is somewhat remarkable 
 when all the facts are considered. That the repeal of the 
 corn laws failed to benefit trade is shown by the tables of 
 exports of manufactured articles. In 1844 the value of 
 woolen and worsted manufactures exported by Great Bri- 
 tain was, according to a computation from the sessional 
 papers of the British Parliament, $45,815,265. In 1843 
 they declined to $43,800,215; in 1846 a still further decline 
 to $36,216,865 was noted. In the following year they in- 
 creased to $39,487,010, but in 1848 they had dropped back 
 to $32,554,015.* In 1849 s" increase of over ten million 
 dollars is noted, and in 1850 the exports of woolens and 
 worsteds from the United Kingdom were over eighteen 
 millions more than they were two years after the repeal 
 of the corn laws, when, if the theories of the Cobdenites 
 had not miscarried, the good effects of a cheap loaf should 
 have already made themselves felt. 
 
 The story of the exports of British linen products does 
 not differ. In 1845 the declared value of the exports of 
 this class of manufactured articles was $20,484,684; in 
 1848 the amount exported had dwindled to $16,481,190. 
 After 1849 there was a rapid increase, the exportations 
 in 1850 reaching $24,143,465, and in 1856 they were nearly 
 twice as large as in 1848. The record of silk exports is 
 the same, the year 1848 presenting a sharp line of demar- 
 cation, the dwindling shipments of the previous years chang- 
 ing to steadily increasing exports of silken fabrics. But 
 the most striking evidence is that furnished by the tables 
 showing the value of the exports of the British metal manu- 
 factures. In 1846 these had attained a value of $50,968,895 ; 
 in 1848 they had fallen to $48,797,845. In 1849 they in- 
 
 *Bigelovv, Sessional Paper British Parliament, pp. 96-100.
 
 ENGLISH SUPREMACY 87 
 
 creased to $55,772,520, and in 1853 they were double those 
 of the year 1848, being valued at $104,025,775.* 
 
 There is no trace of the effect of the "cheap loaf" in 
 these surprising advances, for the price lists of the time 
 show that the cost of bread did not decline after the repeal 
 of the corn laws. "The market prices of wheat as given in 
 the abstracts, and the contract prices of the four-pound loaf 
 supplied to the Seaman's Hospital at Greenwich, England, 
 averaged between 1841 and 1850 50 shillings 3 pence per 
 quarter for wheat and 6:]- pence for the four-pound loaf; 
 between 185 1 and i860 wheat averaged 54 shillings 7 
 pence and the four-pound loaf 7 pence. "f As man does 
 not live by bread alone it is well to note also that the prices 
 of other farm produce advanced greatly after 1850, and 
 that at the height of English manufacturing prosperity meat 
 of all kinds and dairy products were much dearer than 
 during the years while the corn law agitation was in prog- 
 ress. 
 
 Obviously, then, it is an error to attribute to the repeal 
 of the corn laws the great strides made by the British dur- 
 ing the '50s and later. The evidence shows distinctly 
 that the workmen in the cities were not benefited in the 
 manner expected, for they had to pay more for their bread 
 and meat than formerly, but fortunately for them they were 
 enabled to meet the increased demands upon their purses 
 because they had plenty of work. 
 
 When we inquire into the reason for this remarkable 
 change information is elicited which suggests the idea that 
 while the wealth of Great Britain was enormously increased 
 during this period of expansion British workingmen were 
 discounting their future. We are told by a competent ob- 
 server that "no nation, not even the American, ever made 
 such progress or accumulated such wealth upon products 
 
 *Bigelow, Sessional Paper British Parliament, pp. 96-100. 
 fWilliamson, Blackwood's Mazagine, 1887.
 
 88 PROTECTION AND PROGRESS 
 
 manufactured as Britain did in this stage of her history. 
 The prospectus of the Barrow Steel Company stated that 
 profits had been 30 and 40 per cent, per annum, and in one 
 year they had reached the incredible rate of 60 per cent, 
 upon the entire capital."* The writer says this was "only 
 a straw showing the unheard of returns made by the manu- 
 facturers of Britain when the world was at its feet and 
 before strenuous competition had reduced and in many 
 cases banished profits." 
 
 There is no necessity for adding to this evidence, it is 
 so amply corroborated by the statistics showing the enor- 
 mous increase of British wealth during the years while 
 the manufacturers of that country were supreme ; it would 
 be a work of supererogation to go into details, although 
 in another chapter the subject will be reopened to demon- 
 strate that when Britain was to all intents and purposes 
 the workshop of the world she plainly showed that she 
 was disposed to use her superiority with harshness and 
 that she was always ready to exact the last farthing from 
 those dependent upon her for supplies of manufactured 
 goods, a propensity which went far to destroy the force 
 of the argument of the Manchester school that mankind gen- 
 erally would profit by the successful establishment of the 
 system its adherents advocated. 
 
 Here we need only note that while these tremendous 
 profits were being wrung from the people whose industries 
 were in a backward or entirely undeveloped state the manu- 
 facturers and others who shared with them were invest- 
 ing their surplus wealth in the new countries, and were thus 
 laying the foundation for the future undoing of their nation. 
 It was during the thirty years following the repeal of the 
 corn laws that the greatest part of the many billions which 
 the British now own in the shape of foreign securities was 
 
 ♦Carnegie, The Manchester School and To-day, Nineteenth Cen- 
 tury, February, 1898.
 
 ENGLISH SUPREMACY 89 
 
 earned, and the dividends or earnings on these investments 
 are now beginning to be paid, not in raw and food prod- 
 ucts as the Cobdenites hoped they always would be, but in 
 finished articles, which are slowly but surely displacing 
 the productions of British workingmen and increasing the 
 army of paupers and unemployed in the United Kingdom. 
 
 At some future time economists will clearly perceive the 
 special application to Great Britain of many of the theories 
 framed by them to fit the imaginary results of a protective 
 policy. When they study with the attention it deserves 
 the period under review in this chapter they will recognize 
 that the inevitable tendency of the policy advocated by the 
 Cobdenites was to over-people the British Isles. It was im- 
 possible that any other result could have ensued. 
 
 Instead of permitting the dispersion of mankind over 
 the whole face of the earth and the multiplication of civili- 
 zations, the Cobdenites proposed to concentrate all the en- 
 lightenment and wealth of the world in the narrow precincts 
 of two or three insignificant islands. While they glibly 
 discussed the laws of nature their minds were impervious 
 to the fact that it is more natural for peoples to establish 
 themselves at the bases of supplies of food and raw prod- 
 ucts than to transport the latter to distant points to be 
 manufactured and then to be returned to the original pro- 
 ducers. But their most serious blunder was in assuming 
 that the industrial superiority which the British had un- 
 doubtedly reached was due to natural causes, when, in fact, 
 it was owing solely to a process of integration which could 
 not have taken place except under the stimulus of artificiality. 
 
 One of the melancholy features of the Cobdenistic prop- 
 aganda is the glamour it threw over the minds of cultured 
 Englishmen. Some day it will be seen that much of the 
 teaching of England's foremost philosophers has been viti- 
 ated by a too ready acceptance of statements made by ii^ter-j 
 ested persons and the disposition to elevate a priori methods 
 above the plain evidence of facts.
 
 90 PROTECTION AND PROGRESS 
 
 In the following chapter this phase of the subject will 
 be discussed and testimony will be adduced to show how 
 profoundly eminent Englishmen deceived themselves regard- 
 ing the capacity of their own countrymen and the capabilities 
 of foreigners. If the writer succeeds in his aim he will con- 
 clusively demonstrate tliat the vagaries into which Spencer 
 and a host of other writers were led in discussing the ques- 
 tion of the efficiency of labor were wholly due to their appar- 
 ent inability to recognize the true cause of the rapid progress 
 of the United Kingdom after the abolition of the corn laws.
 
 CHAPTER V. 
 "ENGLAND THE WORLD'S WORKSHOP." 
 
 THE THEORY OF NATURAL DEVELOPMENT AND THE RESULTS 
 OF INTERDEPENDENCE. 
 
 Independent evolution advocated by free traders — Effects of con- 
 centration of capital — An artificial advantage mistaken for a 
 natural one — Why Cobdenites believed that England could be 
 made the world's workshop — British resort to artificial methods 
 to crush out the rivalry of the United States — The assumption 
 that attention to manufactures meant a diversion of capital 
 from more profitable pursuits not accepted by early Americans — 
 The question of labor efficiency — German progress under the 
 protective system — The encouragement of infant industries a 
 a necessity — The producers of rude products make slow ad- 
 vances toward a complex civilization and its attendant benefits — 
 Agricultural retrogression after the overthrow of the Roman 
 empire — The approach toward heterogenity must proceed at a 
 snail-like pace in countries where the development of resources 
 is one-sided — The principle of subdivision of labor may be 
 carried too far — The effect of the adoption of a protective 
 policy is to advance the cause of civilization. 
 
 In one of his latest works Herbert Spencer is pleased to 
 severely arraign those who refuse to accept without quali- 
 fication his theory of natural development. He says that 
 ''blind to the significance of the innumerable facts surround- 
 ing them, multitudes of men assert the need for the 'organ- 
 ization of labor.' Actually they suppose that at present 
 labor is unorganized. All these marvelous specializations 
 and these endlessly ramifying connections which have age 
 by age grown up since the time when the members of sav- 
 age tribes carried on each for himself the same occupations 
 
 91
 
 92 PROTECTION AND PROGRESS 
 
 are non-existent for them ; or if they recognize a few of 
 them, they do not perceive that these form an infinitesimal 
 illustration of the whole. A fly seated on the surface of 
 the body has about as good a conception of its internal 
 structure as one of these schemers has of the social organ- 
 ization in which he is imbedded."* 
 
 The reader who accepts without cavil all the assumptions 
 of the evolutionists may acquiesce in a sweeping generaliza- 
 tion such as that contained in the above quotation. He may 
 recognize that as the ages have rolled on results have been 
 produced which resemble organization. Men have changed 
 their attitude of habitual antagonism for one which out- 
 wardly has the appearance of friendliness and a disposition to 
 co-operate, but it would be difficult to establish that the 
 change has come naturally and has not been assisted by 
 the conscious eflforts of those interested in bringing it about. 
 On the contrary, the evidence is overwhelming that legisla- 
 tion, the constant object of the animadversions of Spencer, 
 has modified and altered and arrested natural development 
 to such a degree that except in the broadest sense it is im- 
 possible to accept the theory of a natural social evolution. 
 
 Mr. Spencer, who lays such stress on the operations of 
 natural integration, asks us in another place to note these 
 important facts: "See, then," he says, "how great has be- 
 come the interdependence. Different kinds of production 
 aid one another. Distribution, while depending for its roads 
 and vehicles on various kinds of production, makes produc- 
 tion more abundant and varied ; while a developed and 
 differential currency furthers production and raises the rate 
 of distribution. Thus, by their mutual influences, the struc- 
 tures carrying on these processes become more and more 
 integrated. *'t 
 
 Following this description of a highly developed social 
 
 ♦Spencer, Principles of Sociology, II — III, p. 411. 
 fTbid, p. 405.
 
 'THE WORLD'S WORKSHOP" 93 
 
 organism is a review of some of the special manifestations of 
 integration. "First among these may be set down the co- 
 operation of separate processes and appHances in wider and 
 more varied ways. Some man observing how a housemaid 
 trundhng a mop dispersed the vv-ater saw that by the aid 
 of centrifugal force various things might be dried and others 
 separated. Among results of his thought here are some. 
 Masses of wet sugar placed in a rotating drum with a per- 
 forated periphery are thus freed from the adherent syrup 
 and left dry. Wet clothes put into such a drum are made 
 by its rotation to part with nearly all their water and come 
 out merely damp. And now, by the same method, the more 
 liquid part of milk is separated from the less liquid part — 
 the cream."* 
 
 These and numerous other instances of the effect of inter- 
 dependence cited by the author are relied upon by protec- 
 tionists to support their contention that progress is not in- 
 dependent of but is owing to the conscious efforts of men 
 to better their condition. The teachings of experience all 
 negative the idea that mankind would be benefited by com- 
 pelling each nation to work out its industrial salvation by a 
 process of independent evolution. Protectionists have always 
 clearly recognized that the earlier stages of progress are 
 painfully slow and that it would be folly for a people to pass 
 through them if any means presented itself of reaching the 
 goal of a higher stage of development by easier and quicker 
 methods. 
 
 Borrowing the illustration of Spencer, they say that a 
 people with intelligence enough to appreciate and use cen- 
 trifugal machinery for the manufacture of sugar would be 
 foolish to neglect to avail themselves of its benefits. They 
 do not believe that it would be the part of wisdom to evolve 
 a system of their own, a course which would require centu- 
 ries, but urge that the true method for the people of a nation 
 
 *Spencer, Principles of Sociology.
 
 94 PROTECTION AND PROGRESS 
 
 is to begin at the point reached by others and apply their 
 ingenuity to still further perfecting the instrumentalities 
 already in use. 
 
 It is obvious, however, that a people without capital, no 
 matter how great their natural resources might be, would 
 find it impossible, or at least very slow and laborious work, 
 to develop them in competition with peoples who had reached 
 the stage where the use of perfected machinery was common. 
 
 Let it be assumed for purposes of illustration that a coun- 
 try abounding in cane had by a process of evolution devel- 
 oped a system of centrifugal manufacture which reduced 
 the cost of the production of sugar to so low a figure that 
 it would be impossible for countries with ruder appliances 
 to compete. In such case, no matter how bountiful nature 
 might be, the artificial advantage enjoyed by the country 
 with the capital necessary to maintain the developed ma- 
 chinery would retain its lead permanently and deter the 
 opening of new fields of sugar supply. The result would 
 be dearer sugar to the consumer than if the area of pro- 
 duction had been enlarged, for experience teaches that con- 
 centration of capital within limited areas always tends to 
 the creation of monopolies which are as harmful in their 
 operation as those granted by the kings and governments 
 of other days. 
 
 The Cobdenites appear to have overlooked the benefits to 
 be derived from the opening of fresh fields of competition, 
 and their failure to do so is responsible for the blunder 
 made by them in assuming that the United Kingdom could 
 be made the permanent workshop of the world. Having 
 before their eyes the results of the high industrial develop- 
 ment of their own country, they deliberately banished from 
 their minds the memory of the methods by which it was 
 brought about, and made themselves believe that Great 
 Britain was especially fitted by nature for the work of con- 
 verting the rude products of the earth into finished articles. 
 This finally led to the assumption that the resources of Brit-
 
 "THE WORLD'S WORKSHOP" 95 
 
 ain in the matter of coal and iron were greater than those 
 of any other country and to the still more erroneous belief 
 that the British were superior in skill and intelligence to 
 all other peoples. 
 
 When we turn to the early literary productions of the 
 Manchester school for corroboration of this assertion we 
 find remarkable statements designed to show the efficiency 
 of English labor. Had such utterances been confined to the 
 pages of Cobdenite political economists pure and simple it 
 might be assumed that they were merely a part of the propa- 
 ganda which had for its object the promotion of the national 
 wealth of Great Britain, but when we find authors of the 
 standing of Spencer asserting without reservation that their 
 countrymen surpassed all others in those qualifications which 
 go to make up a great industrial people, we recognize that 
 the error was not one confined to the vulgar, but that it was 
 shared by all classes of Britons. 
 
 The existence of this belief was no doubt responsible for 
 the evolution of the theory which subsequently became the 
 corner-stone of Cobdenism, namely, that "each country has 
 some natural or acquired capabilities which enable it to 
 carry on certain branches of industry more advantageously 
 than anyone else." These words were quoted by Spencer 
 from McCulloch, who used them to illustrate the idea that 
 Great Britain and other colonizing countries followed a 
 mistaken course in compelling their dependencies to trade 
 exclusively with the mother country, because, as he asserted, 
 it resulted in "engaging a portion of the capital and labor 
 of the country in a less advantageous channel than that one 
 into which it would naturally have flowed." Spencer ac- 
 cepted the conclusion of McCulloch, and added: "If to the 
 injury we do ourselves by manufacturing goods which we 
 could more economically buy is added the injury we suffer 
 in pacifying the colonists by purchasing from them commod- 
 ities obtainable on better terms elsewhere, we have before
 
 96 PROTECTION AND PROGRESS 
 
 us the twofold loss which these much coveted monopolies 
 entail."* 
 
 If we follow the development of the theory here outlined 
 we shall see that the Cobdenites elaborated it so that later 
 it was interpreted to mean that the capabilities of all countries 
 were well defined in the middle of the nineteenth century 
 and that a people who at that time, or later, resorted to 
 artificial methods to accelerate the development of an indus- 
 try were disregarding natural laws, and therefore must 
 ultimately fai' 
 
 Andrew Carnegie, in discussing this subject, quotes a 
 passage from an author of the Manchester school which 
 illustrates the Cobden view out of which so many fallacies 
 subsequently grew. This writer said : "Nature has decreed, 
 and wisely so, that all nations of the earth shall be inter- 
 dependent, each with a mission. To one is given fertile soil, 
 to another rich mines, to a third great forests ; to one sun- 
 shine and heat, to another a temperate zone and to another 
 colder clime ; one nation shall perform this service, another 
 that, and a third shall do something else ; all co-operating, 
 each furnishing its natural product, forming one grand har- 
 monious whole. "t 
 
 There was no excuse for such an assumption at the time 
 this was written, for it was as well known then as now that 
 no such sharp distinction in the capabilities of countries ex- 
 isted. The resources of rivals were as well understood by 
 observant men prior to 1850 as they are to-day. When 
 McCulloch enumerated the advantages enjoyed by Great 
 Britain, in the passage quoted in another chapter, wherein 
 he attributed British manufacturing superiority to long ex- 
 perience, accumulated capital and preparedness, he did not 
 pretend that nature was on the side of his countrymen. He 
 
 ♦Spencer, Social Statics, p. 193- 
 
 fCarnegie, The Manchester School and To-day, Nineteenth Cen- 
 tury, February, 1898.
 
 "THE WORLD'S WORKSHOP" 97 
 
 clearly recognized the artificial character of the advantages 
 of Great Britain, and his argument was solely directed to 
 the consideration of the question of preventing other people 
 securing similar advantages. 
 
 In the same fashion did Lord Brougham argue thirty-five 
 years earlier when he urged the policy of flooding the Amer- 
 ican markets with wares made by Britons. There is no hint 
 in Lord Brougham's utterances that he thought this country 
 was deficient in natural resources or that its people lacked 
 the capacity to develop them. On the contrary, he acknowl- 
 edged what free traders subsequently endeavored to conceal, 
 namely, that America gave great promise of becoming a 
 manufacturing country, and for that reason was to be 
 dreaded. He said : "It is well worth while to incur loss 
 upon the first exportation in order by the glut to stifle in 
 the cradle those rising manufacturers in the United States 
 which the war had forced into existence contrary to the 
 natural course of things." 
 
 The phrase "natural course of things" employed by 
 Brougham was not used by him to express the idea that the 
 United States was unfitted by nature to engage in manufac- 
 tures ; what he meant to imply was that this country had 
 been permitted during the period of the Napoleonic wars to 
 develop its industries in a fashion which he assumed would 
 have been impossible if the British had not had their atten- 
 tion engaged elsewhere. His suggested remedy, and his 
 accompanying statement of the fact that immense quantities 
 of manufactured goods were shipped to the United States 
 with the distinct purpose of so reducing prices that the 
 Americans would be discouraged, show his clear conception 
 of the fact that whatever advantage Great Britain enjoyed 
 at that time was purely artificial and that in his judgment 
 it was essential to the continuance of British prosperity to 
 prevent this country creating for itself similar advantages 
 by a resort to art. 
 
 The curious doctrine that there is a natural division of 
 7
 
 98 PROTECTION AND PROGRESS 
 
 the countries of the world into producers of rude and fin- 
 ished products did not emerge until the whirl of business 
 prosperity began to confuse the minds of English scholars. 
 Not until then did they discover that some peoples were 
 adapted to the production of rude products and that others 
 were fitted by nature to fashion them into finished articles. 
 It was not until the United States and Australia began 
 pouring into England their gold in exchange for manufac- 
 tured products that the Cobdenites took up the idea. Then, 
 impressed by the magnitude of British industrial operations, 
 they fancied they saw in their rapid expansion manifesta- 
 tions of a provident nature. 
 
 It was about this time that the Manchester school began 
 to assert "that to our beloved land, Great Britain, has been 
 assigned the high mission of manufacturing for her sister 
 nations. Our kin beyond the sea shall send to us in our ships . 
 their cotton from the Mississippi valley ; India shall con- 
 tribute its jute ; Russia its hemp and its flax ; Australia its 
 finer wools ; and we, with our supplies of coal and ironstone 
 for our factories and workshops, our skilled mechanics and 
 artificers, and our vast capital, shall invent and construct the 
 necessary machinery, and weave these materials into fine 
 cloth for the nations ; all shall be fashioned by us and made 
 fit for the use of men. Our ships which reach us laden with 
 raw materials shall return to all parts of the earth laden 
 with these our higher products made from the crude. The 
 exchange of raw for finished products under the decrees 
 of nature makes each nation the servant of the other and 
 proclaims the brotherhood of man. Peace and good will 
 shall reign upon the earth; one nation after another must 
 follow our example, and free exchange of commodities shall 
 everywhere prevail. Their ports shall open wide for the 
 reception of our finished products, as ours are open for their 
 raw materials."* 
 
 *Carnegie, The Manchester School and To-Day, Nineteenth Cen- 
 tury, February, 1898.
 
 "THE WORLD'S WORKSHOP" 99 
 
 It is surprising that those wiio developed this extraordi- 
 nary idea should have ignored the remarkable results 
 achieved by Great Britain by pursuing a course which indi- 
 cated that fortune attended only those peoples who diversi- 
 fied their industries, or that they should have chosen to 
 disregard the experience of the United States, which demon- 
 strated conclusively that no nation could increase in wealth 
 and importance by devoting itself solely to agriculture, no 
 matter how naturally adapted the country seemed to such a 
 pursuit. But above all things it is amazing that writers 
 who professed to regard Adam Smith as their teacher and 
 guide should have believed it possible for practical men to 
 read his book without profiting by the hints and warnings 
 contained in its pages. 
 
 The American colonists were familiar with Smith's 
 "Wealth of Nations," and it is quite evident that it made a 
 profound impression upon them. There is abundant evi- 
 dence in the economic writings and acts of the founders of 
 the United States that they regarded the commercial success 
 achieved by England as due to the practice of a policy such 
 as that outlined by the Scotch economist in the passages in 
 which he describes the result of a manufacturing country 
 exchanging "a small part of its manufactured produce" for 
 "a great part of the rude produce of other countries." And 
 they were equally convinced that "a. country without trade 
 and manufactures is generally obliged to purchase at the 
 expense of a great part of its rude produce a very small part 
 of the manufactured produce of other countries."* 
 
 The writers of history usually manage to obscure the 
 motives of those who inspire great movements, and in the 
 case of the American revolution they achieved more than 
 the ordinary degree of success. The opinion commonly held 
 that the struggle was merely over a question of taxation is 
 not tenable. The underlying cause of colonial discontent was 
 
 ♦Smith, Wealth of Nations, Book IV, Chap. IX.
 
 100 PROTECTION AND PROGRESS 
 
 the perception of the fact that the colonies were being ex- 
 ploited for the benefit of the mother country, and that in 
 pursuance of this purpose every possible obstacle was placed 
 in the way of the development of a domestic manufacturing 
 industry. 
 
 All of the reflecting colonists accepted without cavil 
 Smith's assertion that the growth of towns is beneficial to 
 an agricultural people. The argument that the proximity 
 of city and town is highly advantageous to farmers appealed 
 to the latter with great force.* On this account they were 
 eager to have manufactures established in their midst. They 
 were anxious to give a practical application to Smith's state- 
 ment that "the corn which grows within a mile of the town 
 sells there for the same price with that which comes from 
 twenty miles' distance." 
 
 The rational view that workship and farm could profitably 
 be brought together, to which Smith gave so much promi- 
 nence, was the one which had the most attraction for the 
 agricultural class. They were thoroughly convinced that the 
 price of their products would "be increased by what had 
 usually been the expense of transporting them to distant 
 countries," ;|; if they brought farm and factory together, and 
 they were not deterred by Smith's contradictory assertions 
 regarding the scarcity of capital, and his deprecation of any 
 other than a natural development, from attempts to arti- 
 ficially stimulate manufactures. 
 
 Being sensible men, the colonists regarded with distrust 
 Smith's assurance that "perfect freedom of trade would be 
 the most eflFectual expedient for supplying them, in due 
 time, with all the artificers, manufacturers and merchants 
 whom they wanted at home, and for filling up in the proper- 
 est and most advantageous manner that very important void 
 
 ♦Smith, Wealth of Nations, Book III, Chap. I. 
 
 flbid. 
 
 ^:Ibid, Book I, Chap. XI.
 
 "THE WORLD'S WORKSHOP' loi 
 
 which they felt."* They attached the same importance to 
 the promise that reasoning persons do to those passages in 
 Holy Writ in which the faithful are assured that prayer will 
 be rewarded by material benefits. The colonists were willing 
 to believe that all the things promised might be secured 
 some day, but they asked themselves when that day would 
 arrive. "Due time" was too vague a date to suit them, be- 
 cause they felt that it might not arrive for centuries, and 
 some even believed it would never come. 
 
 The colonists, and afterwards the revolters, had no con- 
 fidence in Smith's assumption that "no regulation of com- 
 merce can increase the quantity of industry in any society 
 beyond what its capital can maintain. "f Xn rejecting the 
 theory they showed a nice discrimination, because they 
 found in another part of his work distinct assurances that 
 it was not necessary for each society to create its own cap- 
 ital. He had told them elsewhere that "the mercantile capital 
 of Holland is so great that it is continually overflowing, 
 sometimes into the funds of foreign countries, sometimes 
 into loans to private traders and adventurers of foreign 
 countries," and that "the capital of Holland necessarily 
 flows towards the most distant employments."! But they 
 scarcely required the information, for even at this early day 
 Dutch money was seeking profit by promoting manufacturing 
 on this side of the Atlantic. 
 
 Despite the testimony of Smith and the experience of this 
 and other countries, the theory that in order to successfully 
 build up a manufacturing industry the people of a new 
 country must precede such attempts by accumulating a 
 domestic capital still prevails. The Cobdenites, in the face 
 of a plethora which has forced interest rates to a minimum 
 and which is responsible for colossal swindling speculative 
 undertakings, still insist that attempts to create a manu- 
 
 *Smith, Wealth of Nations, Book IV, Chap. IX. 
 flbid. Book IV, Chap. I. 
 flbid. Book IV, Chap. VII.
 
 W,. : -.H^Ori-CI^ION -AND PROGRESS 
 
 facturing industry in a country like the United States is bad 
 economy because it diverts capital from more profitable pur- 
 suits. 
 
 Even in the time of Smith there was no foundation for 
 the assumption that the promotion of manufacturing enter- 
 prises in the colonies would have been at the expense of 
 agriculture. The latter industry never lacked capital ; on 
 the contrary, its striking peculiarity was the rapidity of its 
 expansion and consequent injury to the producer, who suf- 
 fered from the results of overproduction. This feature 
 has been the dominating one in American agriculture since 
 colonial days. In the vernacular, "farming has always been 
 overdone in the United States." Therefore the industry 
 could not have suffered from having capital diverted from 
 it. On the contrary, those engaged in the pursuit of agri- 
 culture must have been benefited rather than injured by the 
 introduction of a manufacturing industry, no matter from 
 whence the capital for its creation was derived. 
 
 This extended reference to the experience of the United 
 States may appear to the reader to be a digression from the 
 discussion of the question whether nature designed some 
 countries to be producers of raw and food products while 
 it set aside others for the profitable occupation of converting 
 raw materials into finished products, but the illustration was 
 required to expose the fallacy of the Cobdenistic theory 
 under review, which was more directly applied to this than 
 any other country. 
 
 Those who have failed to follow the wanderings of free 
 trade theorizers may hesitate to accept the quotation here 
 commented upon as indicative of the real opinion of the 
 Manchester school of economists. Its effusiveness may raise 
 the suspicion that it was a sentimental view rather than a 
 practical discussion of the matter in question. But the 
 reader may easily be assured that it accurately represents 
 the opinion entertained by a vast number of sober, reflecting 
 Britons. Skepticism on this point will be removed by a
 
 "THE WORLD'S WORKSHOP" 103 
 
 resort to the pages of Spencer's voluminous works, which are 
 filled with proof that the belief was almost universal in Eng- 
 land that that country was fitted by nature to be the world's 
 workshop. 
 
 In developing his extreme views of individualism Spencer 
 furnished illustrations and drew inferences from them which 
 clearly establish that he was as much the victim of this par- 
 ticular hallucination as the most extreme adherent of the 
 Manchester school. By unequivocally endorsing McCul- 
 loch's assertion that "each country has some acquired or 
 natural capabilities that enable it to carry on certain branches 
 of industry more advantageously than any one else," Spencer 
 committed himself to the theory that some time about the 
 middle of the nineteenth century the conditions of industry 
 had become fixed. And when he advised his fellow country- 
 men that they would injure themselves by refusing to buy 
 manufactured goods from foreigners when they could do 
 so economically, he virtually assumed that it would be un- 
 wise to attempt to meet the conditions that the superior 
 skill or greater experience of a rival people had created. In 
 short, Mr. Spencer's attitude on this subject is that of a 
 man who believes that present gain is of more consequence 
 than improvement.* 
 
 This is a singular line of reasoning for an evolutionist to 
 have followed, discrediting, as it does, the main postulate 
 of the philosophy that man is constantly improving. If a 
 nation has acquired capabilities by which its people are en- 
 abled to manufacture certain articles more cheaply than the 
 people of any other nation, obviously because the latter are 
 deficient in those capabilities, then Mr. Spencer urges that 
 it would be folly for the present incapables to refuse to buy 
 cheaper articles. This is tantamount to advising the aban- 
 donment of all effort on the part of deficient peoples. No 
 matter what latent abilities they may have, no attempt must 
 be made to develop them, because, forsooth, a portion of them 
 
 *Spencer, Social Statics, Pps. 216 — 218.
 
 104 PROTECTION AND PROGRESS 
 
 would" temporarily suffer by being deprived of the oppor- 
 tunity to buy commodities on better terms elsewhere. 
 
 Such a conclusion could only be reached by a man whose 
 devotion to an idea had become a mania. A less gifted per- 
 son would have easily recognized that had such a theory 
 prevailed several centuries ago the boasted progress of the 
 British would not have been matter for contemporary histor- 
 ians to record, 
 
 Mr. Spencer's views regarding the efficacy of individual 
 effort have caused him to miss the significance of many of 
 the facts he has recorded and to confuse results proceeding 
 from different causes. In the case here instanced he has 
 virtually assumed that the cheapness due to natural advan- 
 tages and that resulting from acquired abilities do not differ, 
 and that it would be vain for the people of an undeveloped 
 country to attempt to fit themselves to contend against rivals 
 who had gained skill by practice and experience. 
 
 No reasonable person, however, will insist that natural 
 advantages and acquired capabilities can be properly coupled 
 in this fashion. It is easy to comprehend that all things else 
 being equal a people with superior natural advantages must 
 prevail over competitors not so well favored, but it is im- 
 possible to conceive of a people with superior natural ad- 
 vantages, and the capacity and disposition to develop them, 
 lagging in the industrial race unless some artificial obstacle 
 is imposed. 
 
 That such obstacles have constantly been interposed to 
 prevent the advancement of undeveloped peoples we know. 
 History abounds with illustrations of the fact and some 
 of them have been adduced by Mr. Spencer, but he has with 
 a singular pertinacity chosen to regard every acquired ad- 
 vantage as a natural one and has assumed that every deficien- 
 cy or backwardness in undeveloped peoples, brought about by 
 the aggressiveness of nations in an advanced stage of indus- 
 trial development, is due solely to natural causes. 
 
 That this assertion does not misstate Mr. Spencer's views
 
 "THE WORLD'S WORKSHOP" 105 
 
 the following extract from a discussion of the subject of 
 "Sanitary Supervision" will show. The quotation will also 
 exhibit the grossly erroneous estimate of the capacity of 
 foreigners made by Mr. Spencer, as well as the defects in his 
 extreme views of laissea faire. After arguing at some length 
 that even precautions against disease may be more safely 
 left by society to individual effort than to governments act- 
 ing in a co-operative capacity, he says : 
 
 "Should proof of this be asked, it may be found in the 
 contrast between English energy and continental helpless- 
 ness. English engineers established the first gas works in 
 Paris, after the failure of a French company ; and many of 
 the gas works throughout Europe have been constructed by 
 Englishmen. An English engineer introduced steam navi- 
 gation on the Rhone ; another English engineer succeeded in 
 ascending the Danube by steam, after the French and Ger- 
 mans had failed. The first steamboats on the Loire were 
 built by Englishmen ; the great suspension bridge at Pesth 
 has been built by an Englishman ; and an Englishman is 
 now building a still greater suspension bridge across the 
 Dnieper. Many continental railways have had Englishmen 
 as consulting engineers ; and in spite of the celebrated min- 
 ing college at Freyburg, several of the mineral fields along 
 the Rhine have been opened up by English capital employing 
 English skill. 
 
 "Now, why is this? Why were our coaches so superior 
 to the diligences and cihvagen of our neighbors ? Why did 
 our railway system develop so much faster? Why are our 
 towns better drained, better paved and better supplied with 
 water? There was originally no greater mechanical apti- 
 tude, and no greater desire to progress, in us than in the 
 nations of northern Europe. If anything, we were com- 
 paratively deficient in these respects. Early improvements 
 in the arts of life were imported. The germs of our silk and 
 woolen manufactures came from abroad. The first water
 
 io6 PROTECTION AND PROGRESS 
 
 works in London were erected by a Dutchman. How hap- 
 pens it, then, that we have now reversed the relationship '' 
 
 "Manifestly the change is due to difference of discipline. 
 Having been left in a greater degree than others to manage 
 their own affairs, the English people have become self- 
 helping and have acquired great practical ability. While, 
 conversely, that comparative helplessness of the paternally 
 governed nations of Europe, illustrated in the above facts, 
 and commented upon by Laing in his 'Notes of a Traveler' 
 and by other observers, is a natural result of the State super- 
 intendence policy — is the reaction attendant on the action 
 of official mechanisms — is the atrophy corresponding to some 
 artificial hypertrophy." 
 
 This passage was published originally in 1850, but the 
 work in which it appeared was abridged and revised in 1892, 
 and its author apparently had observed nothing in the mean- 
 time to induce him to change his views, for he permitted 
 the paragraphs to stand without correction. Yet the world 
 has been afforded conclusive evidence that the nations of 
 northern Europe have not suffered from atrophy, and none 
 are better informed on that point at present than Mr. 
 Spencer's own countrymen, who have been driven to various 
 expedients to protect their industries from the encroachments 
 of their "helpless Continental neighbors." The citation of 
 the statistics of the industrial growth of Germany since 1872, 
 when protection was adopted by that country, will be suffi- 
 cient to tumble all of the English philosopher's assumptions 
 to the ground, for they show indisputably that under a 
 policy of State superintendency and encouragement Germany 
 has made a relatively greater progress in manufactures, and 
 in the other arts indicating an advancing civilization, than 
 Great Britain did before or after the repeal of the corn laws. 
 
 Such a demonstration, however, is reserved for another 
 chapter ; in this place the desire is to concentrate attention 
 on the fact that Mr. Spencer disingenuously conceals the fact 
 that the British reached the condition of superiority which
 
 "THE WORLD'S WORKSHOP" 107 
 
 he described, and which they undoubtedly held when he 
 wrote in 1850, by the very methods which he assumed re- 
 sulted in keeping northern Europe in a state of helplessness. 
 Had the English been infected with the ideas of the Cobden- 
 ites as early as the time of Edward HI. they would not have 
 imported Flemish weavers to teach them the art of manu- 
 facturing cloth ; they would have continued to import such 
 fabrics from Flanders because the Flemings could make 
 them more cheaply, and would consequently have remained 
 a pastoral people, contentedly assuming that nature had 
 destined them to raise sheep so that the Dutch might have 
 abundant supplies of cheap wool. 
 
 Had not successive English sovereigns and their advisers 
 devoted themselves to promoting manufactures on British 
 soil, accomplishing their purpose by shutting out the cheap 
 fabrics and articles of continental neighbors, Great Britain 
 would never have acquired the capital which enabled her 
 enterprising people at a subsequent period to open the min- 
 eral fields near Freyburg and in other countries. Had there 
 been a victorious school of Manchester economists in the 
 fourteenth century the British would never have acquired 
 the mechanical skill which Spencer so glowingly describes, 
 and which, according to his and other accounts, gave the 
 British an enormous advantage in all the fields of industry 
 throughout the world. 
 
 It is singular that Spencer, who, as we have seen, lays so 
 much stress on the results of interdependence, should over- 
 look the fact that the results of a successful Cobdenism 
 would have been to promote a one-sided and therefore in- 
 complete development of the world. If the nations of north- 
 ern Europe, whose helplessness was so marked in 1850, had 
 remained content to accept the, at that time, immeasurably 
 cheaper manufactured products of the British, how many 
 important inventions would have been lost to the world? 
 Does any one imagine that the United States would have 
 attained its present high degree of mechanical skill if the
 
 io8 PROTECTION AND PROGRESS 
 
 suggestions of the Cobdenites had been accepted ? Would it 
 have been possible for this country to have established a 
 manufacturing industry if England had been permitted to 
 follow out the programme outlined by Brougham and so 
 fully described by McCulloch when he elaborated his theory 
 that nature fitted some countries for manufacturing pur- 
 poses and others to be the producers of the rude products 
 of the earth? 
 
 It has been the fashion in the past to deride what has 
 been called the "infant industry" theory, but the efifects of 
 judicious protection are too pronounced and the examples 
 of its success are too numerous to permit sane persons to 
 indulge in further derision. It is now admitted by the most 
 careful writers that the tendency of capital to localize itself 
 within a country, unless interfered with, would manifest 
 itself continually in a more pronounced fashion if the whole 
 world were devoted to free trade. Nicholson notes that 
 under certain conditions capital and labor would not move at 
 all or only with great difficulty ; that is to say, that under 
 those conditions there would be no mobility or only imper- 
 fect mobility.* 
 
 The truth of this observation becomes manifest v^hen we 
 consider the tendencies of capital and labor within the nar- 
 row sphere of a single country. When we inquire into the 
 origins of the industries we find that many of them were 
 established in the places where they now flourish owing to 
 the existence at the time of their establishment of fancied 
 or real natural advantages. Once strongly rooted, however, 
 they are continued, even though the advantages primarily 
 enjoyed may have entirely disappeared and in their stead 
 positive drawbacks may have arisen. 
 
 This is certainly the case of Manchester, the original seat 
 of the factory cotton spinning and weaving industry of 
 Great Britain. During the years while the United Kingdom 
 enjoyed superior advantages in the prosecution of this line 
 
 *Nicholson, Principles of Political Economy, Vol. II, p. 295.
 
 "THE WORLD'S WORKSHOP" 109 
 
 of manufacturing, enormous plants were created. These 
 prospered greatly until rivals who had refused to accept the 
 theory that the cheapness due to acquired ability should 
 give a permanent advantage over people with natural re- 
 sources, began to compete. Then Manchester was compelled 
 to resort to artificial devices to preserve the industry she 
 had created from the encroachment of those who were nearer 
 to the source of supply of raw material. 
 
 At the cost of a great bonded indebtedness a canal was 
 constructed connecting Manchester with the sea, which was 
 opened in 1894. During the first year after the construction 
 of this artificial waterway 1,280 sea-going vessels and 1,660 
 boats for coast traffic passed up to Manchester, and for the 
 nine months ending September, 1896, the traffic was 1,300,- 
 000 tons, an increase of 350,000 tons over the corresponding 
 period of the year before. "This development within three 
 years," remarks a writer who has given especial study to 
 the effects of ship canals, "of a trade approaching that of 
 Amsterdam in volume, is not without significance, and with 
 a continued increase Manchester may become an important 
 shipping point," even though the canal may from the in- 
 vestor's point of view be a source of discouragement owing 
 to the heavy cost of construction, which was almost equal 
 to that of the Suez canal.* 
 
 This success is indeed significant, and in many other ways 
 than the one which the writer had principally in mind. It 
 emphasizes the fact that capital can in the face of vigorous 
 competition reverse the operations of natural laws for such 
 long periods that they deserve to be considered by people 
 who live in the present as practically permanent. What, 
 then, would have been the result if the world had acquiesced 
 in the theory that an acquired industrial ability should be 
 recognized as a natural advantage ? Let the reflecting reader 
 
 ♦Fairlie, Economic Effects of Ship Canal, Pub. Am. Ass'n of Pol. 
 and Social Science, April, 1898.
 
 no PROTECTION AND PROGRESS 
 
 ask himself what mankind would have gained had Americans 
 and others accepted the advice given by Mr. Spencer in 1850, 
 and instead of attempting to manufacture cotton cloth for 
 themselves had sent their raw product to Manchester to be 
 converted into fabrics? Would it not have resulted in the 
 creation of an enormous monopoly, the effect of which would 
 have been to prevent the growth of the use of cotton tex- 
 tiles? And would not the concentration of the industry in 
 one quarter of the globe have militated against the working 
 out of that system of integration which the author of evolu- 
 tion extols and which he assures us is the distinctive mark 
 of an advancing civilizat'on ? 
 
 If the tendency of capital is as here described it is clear 
 that a resort to artificial means of dispersion of industry is 
 necessary if the world is to be saved from a sharp division 
 into superior and inferior nations. Without such a disper- 
 sion a few countries would enjoy ail the profits of a highly 
 developed civilization, with its great cities, universities, 
 museums and the other accessories which contribute to the 
 broadening of the minds of men and minister to their grati- 
 fication, while the others would remain producers of raw 
 materials and food products, whose inhabitants would be as 
 "hewers of wood an.d drawers of water" for the more favored 
 peoples. 
 
 Had Americans accepted the role marked out for them 
 by the Manchester school there would have been no advance 
 from the homogeneous to the heterogenous in the United 
 States. Simple conditions would have prevailed indefinitely. 
 The producers of rude products, unless influenced by envi- 
 ronment, advance but slowly. The conditions which prevail 
 in a purely agricultural country are repeated century after 
 century, and there is reason to believe that when such peo- 
 ples are left to their own devices they will retrograde. 
 
 There is abundant evidence that the Gauls before the 
 advent of the Romans had made much progress in the manu- 
 facture of agricultural implements. Pliny tells us "there
 
 "THE WORLD'S WORKSHOP" in 
 
 has been invented at a comparatively recent period in that 
 part of Gaul known as Rhaetia a plow with the addition of 
 two small wheels and known by the name of plaumorati, the 
 extremity of the share of which has the form of a spade, and 
 which is only used in cultivated fields and upon soils which 
 are nearly fallow."* The same author also tells us that "in 
 the vast domain of Gaul, a large hollow frame armed with 
 teeth and supported on two wheels is driven through the 
 standing corn, the beasts being yoked behind it, the result 
 being that the ears are torn off and fall within the frame. "f 
 
 These devices for cultivating and harvesting were so 
 incomparably superior to those employed by the Romans 
 that the idea at once occurs that those who used them must 
 have been in contact with a people who had developed con- 
 siderable mechanical ingenuity. When we inquire into the 
 matter we find that in sections of Gaul greater progress had 
 been made in the manufacture of iron and other metals than 
 the Romans had achieved. Pliny and Strabo testify to this, 
 and a modern historian who gave attention to this phase of 
 Gallic development admits that the evidence is clear on this 
 point. He tells us that "their copper implements were not 
 infrequently of excellent workmanship ; that the carefully 
 adjusted gold couns of the Auvernians were striking wit- 
 nesses of the ability of the Celtic workers ; that the Romans 
 learned the art of tinnmg from the Bituirges and that of 
 silvering from the Alesini."| 
 
 It is impossible to avoid linking these facts together, and 
 consideration of them forces the conviction that the progress 
 made by the Gauls in agriculture was largely owing to the 
 synchronous development of other industries. In later 
 times, when disorder and other causes contributed to the 
 destruction of manufacturing ability in Gaul, agriculture 
 
 ♦Pliny, Natural History, Book XVIII, Chap. XLVIII. 
 
 flbid, Book XVIII, Chap. LXXII. 
 
 jMommsen, History of Rome, Book V, Chap. VII.
 
 112 PROTECTION AND PROGRESS 
 
 shared in the decadence. The improved implements above 
 described, whose characteristics strongly resemble certain 
 nineteenth century inventions, fell into disuse, and finally, 
 during the period when the country once known as Gaul 
 became purely agricultural, the farmer reverted to the 
 wooden plow and employed the rudest imaginable devices 
 for cultivating the soil and harvesting his crops. 
 
 In Italy during the Empire agriculture and market gar- 
 dening particularly had attained a high degree of perfec- 
 tion. Under the stimulus of the demand of a great town 
 population the poulterer had developed artificial incubation 
 to such an extent that the Romans were chiefly supplied with 
 machine-produced poultry.* When the Roman power de- 
 cayed and Italy reverted to agriculture this art was lost and 
 not revived until the demands of great commercial nations 
 made its practice profitable. 
 
 These instances might be supplemented with hundreds of 
 others all pointing to the snail-like pace made by peoples in 
 their progress towards heterogenity whenever there is a 
 failure to bring about that complete interdependence which 
 lesults from the calling into play of the inventive faculties 
 of man by diversifying industries. Many modern econo- 
 mists, misled by the apparent advantages of the subdivision 
 of labor, have failed to recognize that the principle may be 
 carried too far. They have assumed that because subdivision 
 works well within limitations the principle cannot be carried 
 to excess, but it is obvious that if the effect of completely 
 developing along such lines would be to make one country 
 the manufacturer of finished articles and all the rest of the 
 world a producer of raw products, mankind, as a whole, 
 would not be a gainer. The outcome of such a development 
 would be one overmastering nation, with all the advantages 
 which wealth and knowledge confer, and various feeble 
 peoples with wants and aspirations little beyond those of 
 yokels, and entirely dependent upon the superior people. 
 
 *Pliny, Natural History, Book X, Chap. LXXVI.
 
 "THE WORLD'S WORKSHOP" 113 
 
 That many Cobdenites hoped that their poUcy would 
 achieve such a result is undeniable, and that others who at- 
 tempted to elaborate theories designed to show that mankind 
 would be benefited by accepting the assumption that Great 
 Britain was peculiarly fitted to be the world's workshop 
 were working toward the same end seems equally certain. 
 Had they succeeded there can be no doubt that the spread 
 of civiHzation would have been greatly retarded. Had the 
 United States and other nations which have deemed it pru- 
 dent to secure for themselves home manufacturing industries 
 by making temporary sacrifices been diverted from their pur- 
 pose by the arguments in favor of cheapness the result would 
 have been an universal arrest of development. 
 
 To have accepted as sound the conclusion that a superior- 
 ity in the matter of production which was the result of the 
 acquired ability of a certain people is the equivalent of a 
 natural advantage would have been fatal to progress. It 
 must have inevitably resulted in the atrophy of the peoples 
 assenting to the idea that they would serve themselves best 
 by refusing to develop all the resources at their command, 
 and it would have entailed upon the nation enjoying the 
 monopoly of manufacturing all the evils which flow from 
 excessive power, not the least of which would be the neces- 
 sity of keeping in subjection the envious barbarians which 
 such a system must have called into existence.
 
 CHAPTER VI. 
 
 INTERNATIONAL FRICTION. 
 
 THE FALLACY OF THE COBDENIST IDEA THAT FREE TRADE 
 MAKES FOR PEACE, 
 
 Why Cobdenism fails to promote peace — The prevalence of the 
 national idea — Objects of protectionists misrepresented — A de- 
 sire to injure others could never operate as a successful stimu- 
 lant of trade — No industry promoted except by a desire for 
 gain — Protection necessary to equalize taxation — Burdens volun- 
 tarily assumed by Americans to carry out their views of gov- 
 ernment — International friction due to the aggressive attitude 
 of nations desiring to export their surplus products — Free trade 
 responsible for numerous wars waged to advance trade — Con- 
 tinuous aggression and carnage the record of Great Britain 
 since the repeal of the corn laws — England's unhealthy commer- 
 cial development responsible for most modern wars — What must 
 happen to Great Britain when the opportunities for expansion 
 cease — The non-scientific character of the present system of 
 international trade — It must give way to a rational exchange of 
 non-competing products — Absurdities of roundabout foreign 
 trade — Example of Brazil. 
 
 In the course of the examination of the view held by the 
 early Cobdenites that the countries of the world were 
 divided by nature in such a manner as to make some of 
 them fit only to be producers of raw materials and food 
 products, while others were adapted to manufacturing, it 
 was seen that Britain's greatest thinkers had permitted them- 
 selves to confuse natural and acquired abilities. Some of 
 the possibilities that would have ensued had this theory 
 been generally accepted were glanced at, and others were 
 
 reserved for further and more ample treatment. In this 
 
 114
 
 INTERNATIONAL FRICTION 115 
 
 chapter an inquiry will be instituted to ascertain the prob- 
 able effect upon international relations had Cobdenism been 
 accepted without reserve by the whole world. 
 
 At one time it was assumed by the adherents of the Man- 
 chester school that free trade, so called, would bring peace 
 and good will to the whole earth.. Writers with percep- 
 tion enough to distinguish that the springs which have 
 moved men in all times and all countries were oftener of a 
 commercial than a political nature rashly concluded that 
 the substitution of unrestrained competition for the crude 
 devices resorted to in ancient and modern times to promote 
 naional industries would remove from rural peoples the 
 incentive to make war on each other. A brief experience 
 has demonstrated the fallacy of this view, which never 
 would have found adherents had not the theory of the divis- 
 ion of the earth into nations with varying capacities and 
 resources been elaborated. 
 
 Had there been any foundation for the assumption that 
 Great Britain was destined by nature to be the world's 
 workshop ; had it been demonstrable that the British enjoyed 
 advantages as manufacturers which no other people could 
 hope to equal; had there been any truth in the assertion 
 that Britons were endowed with abilities which would always 
 make them more skillful than other men, there might have 
 been a ready acquiescence in the idea that mankind gen- 
 erally would profit if the industrial status of the nations 
 as established in 1850 should be considered final. 
 
 But none of these claims was sound. It was instinctively 
 perceived by the people of all the western nations that Eng- 
 land's superiority was merely the result of acquired ability, 
 and the processes by which British skill was promoted were 
 perfectly familiar to all readers of history. Under the cir- 
 cumstances, it would have been amazing had practical states- 
 men acepted any of the more pronounced views of the Man- 
 chester school. 
 
 Closet thinkers, accustomed to accomplishing the marvel-
 
 Ii6 PROTECTION AND PROGRESS 
 
 ous feat of creating, in their minds, a perfectly homogen- 
 eous world, with peoples having identical interests, found 
 no difficulty in assenting to propositions which assumed the 
 possibility of obliterating by economic processes national 
 distinctions, race prejudices and all the results of thousands 
 of years of differentiation. But practical men, outside of 
 Great Britain, unless blinded by self-interest, universally re- 
 jected the professed benefits of Cobdenism and elected to 
 work out their own industrial problems without the assis- 
 tance of British advice, relying upon the teachings of Brit- 
 ish experience rather than upon the guidance of visionaries. 
 
 The refusal to regard theories with more reverence than 
 the teachings of experience has subjected protectionists to 
 much misrepresentation. Their objects have never been fairly 
 stated by Cobdenites, who have not hesitated to attribute 
 to them motives and purposes of which they are entirely 
 innocent. Such a course was forced upon the Manchester 
 school, whose adherents found it necessary to provide a 
 foil to bring into relief the virtues claimed for their system. 
 
 As an illustration of this system of perversion we may 
 quote the following assertion of Professor Rogers: "As 
 the origin of protective enactments was a desire that a 
 nation should profit by the loss of another nation, and as 
 the extension of this feeling is the primary motive of war, 
 so a permanent or persistent division of international inter- 
 ests, with the objects of sustaining or promoting municipal 
 or rather particular interests, is a fruitful source of inter- 
 national difficulties. It is, in fact, what Thucydides calls, 
 speaking of the caution with which commercial intercourse 
 was carried on in the days which preceded the great Pelopon- 
 nesian war, an unproclaimed war."* 
 
 Now, there is absolutely no foundation for the assump- 
 tion that protection was inspired by any such desire as 
 that referred to. Unless the authorities already quoted 
 
 *Rogers, Article "Free Trade," Ency. Brit.
 
 INTERNATIONAL FRICTION 117 
 
 are unreliable we must assume, in the case of the English 
 protectionists at least, that the prime purpose of those who 
 advocated restrictions upon the importation of foreign goods, 
 or the exportation of domestic products, was to promote 
 home industry or in some other way to subserve the interests 
 of Englishmen. 
 
 Simon de Montfort, Edward III and his councilors, and 
 Elizabeth and her advisers were all animated by the com- 
 mon purpose of providing work for the British people, and 
 of otherwise improving their condition, when they attempted 
 by restrictive measures, directed against foreigners, to stim- 
 ulate manufacturing within the kingdom. And Mun, whose 
 contemporary statement of the motives of eighteenth cen- 
 tury English protectionists is more reliable than the impu- 
 tations of a nineteenth century free trader who had a point 
 to make, has assured us in the most explicit terms that the 
 object of those who agreed with him was "to make the most 
 they could of their own." 
 
 This has been the consistent aim of protectionists in all 
 times, and it is the only one which rational men can be 
 expected to pursue. That the pursuit of such a policy does 
 often work an injury to a rival may be admitted, but it 
 is absurd to assume that it is the purpose of those who 
 are trying to advance their own interests by developing 
 near at hand resources to inflict injuries upon others by 
 pursuing such a course. As well might the charge be made 
 that it is the object of every tradesman who starts a new 
 store in opposition to those already established to injure 
 those who had previously occupied the field. That may 
 be the result of the new venture, which may cut down the 
 trade of those who were earlier on the ground, but the 
 fresh competitor must be assumed to have entered the com- 
 petition for personal gain and not to gratify a desire to 
 injure others. 
 
 This latter motive could never be sufficiently strong to 
 promote a genuine rivalry in trade, and it may be asserted
 
 ii8 PROTECTION AND PROGRESS 
 
 with positiveness that it does not operate in the case of 
 nations any more than with individuals. Had the free 
 traders not misled themselves on this point they might 
 have escaped the blunder of assuming that the framers of 
 protective measures could never achieve their object of build- 
 ing up a profitable business. 
 
 It was natural enough, however, for men who had delib- 
 erately adopted the idea that protection was based on a 
 desire to do injury to others to conclude that such a policy 
 could never succeed. Had they studied human nature more 
 closely they would have perceived that only a desire for 
 gain could be at the bottom of a long-continued effort to 
 develop a national industry, and that motives of the sort 
 described by Rogers and others would be absolutely ineffec- 
 tive in the face of even a pronounced suspicion that the 
 policy of revenge was unprofitable. 
 
 The facts of history and the suggestions of common sense 
 unite in refuting the Cobdenite idea that the object of protec- 
 tionists is to injure their neighbors, but it may be worth 
 while to inquire whether the adoption of a protective pol- 
 icy — which simply means, according to the modern definition 
 of the term, a resort to such methods of taxation as will 
 favor the home as against the foreign producer — is calculated 
 to cause friction among nations, and, if so, whether it should 
 be avoided on that account ; and, on the other hand, it may 
 be well to investigate the claim that free trade would bring 
 peace to the whole world, as was assumed by Cobden, 
 Bright and others. 
 
 Touching the first branch of the subject, it may be freely 
 admitted that when a country undertakes to develop its 
 own resources it immediately excites the jealousy of for- 
 eigners who have hitherto supplied the articles which under 
 the changed conditions will be produced at home, but exam- 
 ples of wars waged on such an account are extremely rare, 
 and none is likely to occur in the future. At least, if 
 they do the fact that they result from such a cause will
 
 INTERNATIONAL FRICTION 119 
 
 be carefully obscured, for no modern statesman dare openly 
 advocate the doctrine that a nation has not the right to 
 absolutely regulate its own system of trade and taxation. 
 
 Nothing short of the adoption of an universally homo- 
 geneous system of commerce and fiscal management would 
 warrant a surrender of the sovereign right of regulating 
 trade by a nation, and as such a union of the nations is 
 inconceivable; all theories based on assumptions of what 
 might occur if the question of nationality were eliminated 
 may be dismissed as valueless. 
 
 As long, therefore, as nations maintain different systems 
 of government and are animated by varying political ideas 
 and sociotogical considerations there can be no such thing 
 as perfect equality of taxation. The United States has 
 elected to reward the survivors and the dependents of those 
 who fought for the Union in the Civil War by paying pen- 
 sions which amount to as large a sum annually as that 
 paid to maintain the greatest military establishment in the 
 world ; the various states composing the federal union have 
 imposed upon themselves an annual burden for educational 
 purposes vastly exceeding that borne by the people of any 
 other country to promote a similar object. In many respects 
 the views of Americans regarding the administration of gov- 
 ernments, national, state and municipal, differ radically 
 from those of other peoples, and the carrying out of these 
 views entails upon the citizens of this country taxation for 
 purposes to which the foreigner is a stranger. 
 
 The American people bear these burdens cheerfully, be- 
 cause they are voluntarily assumed, but they would not 
 continue doing so if they were compelled to witness the 
 spectacle of the foreigner enjoying an advantage over them 
 in their own markets. 
 
 That such an advantage would be afforded if American 
 ports were freely opened to the importation of competing 
 foreign goods is undeniable. If the English manufacturer 
 of articles of iron and steel is permitted to sell his prod-
 
 120 PROTECTION AND PROGRESS 
 
 ucts in the United States without paying an equaUzing tax 
 in the shape of a customs duty, he enjoys a positive advan- 
 tage over the American manufacturer, who has been called 
 upon to contribute to the creation of the pension fund, who 
 assists in maintaining our costly system of common school 
 education and who helps bear the other burdens of taxation 
 peculiar to the nation, state or municipality in which he lives 
 and works. 
 
 It is no answer to this assertion that a protective tax is 
 equitable to say that the manufacturers of other nations 
 are also taxed, perhaps more heavily than those of the United 
 States. That may be true, but the taxation of the foreigner 
 may be levied to accomplish aims entirely different from 
 those of the protective country. He may even impose taxes 
 for the purpose of destroying the trade of rivals. 
 
 As an illustration. Great Britain maintains an enormously 
 expensive navy, ostensibly for defensive purposes, but really 
 to further the main object of her fiscal system — the exten- 
 sion cf her external commerce. The assumption is that 
 the British manufacturer assists in supporting this estab- 
 lishment and that he does so out of the profits of his indus- 
 try. This being the case, the foreigner who affords the 
 Briton free access to his markets occupies the anomalous 
 position of indirectly contributing to the resources employed 
 to maintain a navy whose chief function is to keep open 
 the avenues of British trade. 
 
 No sophistries or alluring presentation of the benefits 
 of cheapness can disguise this fact. It is plainly perceived 
 by practical men who do not allow their minds to become 
 clouded by partial statements of a case, but who insist upon 
 examining it in all its bearings. The result of such scru- 
 tiny is the practical rejection of the free trade theory by all 
 peoples possessing the progressive instinct. 
 
 It being indisputable that there are different national aspi- 
 rations and methods of government which result in inequali- 
 ties of taxation, and, further, that there is absolutely no
 
 INTERNATIONAL FRICTION 121 
 
 prospect of the elimination of these differences, the most 
 sanguine free trader expressing no such hope, it is unde- 
 niable that nations have a moral right to adopt such meas- 
 ures as will enable them to pursue the course which the 
 genius of their institutions prompts them to follow. 
 
 If Americans persist in the desire to broaden the national 
 intelligence, and to that end go on increasing their costly 
 common school system, it does not lie in the mouth of Ger- 
 mans, who expend great sums on their military establish- 
 ment, or of the British, who appropriate vast amounts for 
 their navy and the maintenance of paupers, to say that we 
 may not so adjust our system of taxation that the burdens 
 of the home producer will be equalized in the event of the 
 admission of foreign competing products to the markets of 
 the United States. 
 
 Nor is it good logic or fair reasoning for authors of stand- 
 ing to assume that a people who practice an economic policy 
 based upon the recognition that it equitably adjusts the dif- 
 ferences, artificial or natural, which may exist between na- 
 tions should be held responsible for friction that may grow 
 out of their refusal to be exploited at the expense of for- 
 eigners. It would be as reasonable to charge an inoffensive 
 citizen who was attacked by a vicious bulldog while walking 
 a public street with being the aggressor as it is for free 
 traders to assert that collisions between nations which are 
 clearly traceable to the persistent efforts of peoples with 
 established industries to force their wares on those who do 
 not want them are due to protection. 
 
 In any aspect of the case it is impossible to make it appear 
 that the exercise by a nation of the right of regulating taxa- 
 tion so as to give its own producers an equal show in the 
 home market affords a reasonable pretext for making war, 
 and, as has already been observed, there are few, if any, 
 instances of war resulting directly from the exercise of this 
 right. 
 
 It may be safely affirmed that there is absolutely no in-
 
 122 PROTECTION AND PROGRESS 
 
 stance of a protective nation having created a difficulty seri- 
 ous enough to justify a rival proceeding to extreme meas- 
 ures. But that much cannot be said for free trade England. 
 Instead of setting an example of peace since the repeal of 
 the corn laws Great Britain has been constantly making 
 war, and for no other purpose than the extension of trade. 
 A pretense is sometimes made that these conflicts were 
 forced upon her, but the excuse commands no more respect 
 than that offered by the wolf when it descended the stream 
 to kill the lamb for roiling the water. 
 
 During the progress of the recent jubilee an English 
 writer took occasion to enumerate these aggressive wars. 
 He said : "The Victorian Age has been one of peace, but 
 on examination it will be found that Great Britain has not 
 been long without fighting somewhere. Scarcely a twelve- 
 month has passed without finding our country at war in 
 some part of the world. The following is a list of these 
 wars: Afghan war, 1838-40; first China war, 1841 ; Sikh 
 war, 1845-46; Kaffir war, 1846; second war with China, 
 second Afghan war, 1849 ; Burmese war, 1850 ; second Kaffir 
 war, 1851-52; second Burmese war, 1852-53; Crimea, 1854; 
 third war with China, 1856-58; Indian mutiny, 1857; Maori 
 war, 1860-61 ; more wars with China, 1860-62; second Maori 
 war, 1863-66; Ashantee war, 1864; war in Bhotan, 1864; 
 Abyssinian war, 1867-68; war with the Bazatees, 1868; 
 third Maori war, 1868-69; war with Looshias, 1871 ; second 
 Ashantee war, 1873-74; third Kaffir war, 1877; Zulu war, 
 1878-79; third Afghan war, 1878-80; war in Basutoland, 
 1879-81 ; Transvaal war, 1879-81 ; Egyptian war, 1882 ; Sou- 
 dan, 1884-85-89; third Burma war, 1885-92; Zanzibar, 1890; 
 India, 1890; Matabele war, 1894-96; Chitral campaign, 1895 ; 
 third Ashantee campaign, 1896; second Soudan campaign, 
 1896."* 
 
 When this bloody record of free trade Great Britain is 
 
 *North China Daily News, November, 1896.
 
 INTERNATIONAL FRICTION 123 
 
 compared with the annals of a protective country such as 
 the United States it seems amazing that any writer should 
 have the hardihood to assert that the tendencies of Cobdenism 
 are peaceful and those of protection the opposite. During the 
 period embraced in the Victorian era the United States waged 
 but two external wars — those with Mexico and Spain. The 
 first was inspired by men with Cobdenite proclivities, their 
 object being to develop the country along the lines which 
 the adherents of the Manchester school taught were the 
 only ones that could contribute to the prosperity of the 
 American people. That with Spain in its inception was a 
 war for the sake of relieving a distressed people. During 
 the rest of the time, with the exception of the years of our 
 own Civil War — precipitated by free traders who were 
 largely impelled to their course by British Cobdenites — 
 Americans were busily employed developing their home 
 resources, at peace with the world and giving no neighbor 
 cause for offense unless it may be charged that the mani- 
 festation of the intention to render the nation as little de- 
 pendent upon foreigners as possible was offensive. 
 
 No such claim can be made for Great Britain and Brit- 
 ish free traders. When the causes of the above list of wars 
 are inquired into it is found that every one of them was 
 directly or indirectly brought about by the necessity of ex- 
 tending the markets of the manufacturers of the United 
 Kingdom or to collect the debts incurred by improvident 
 peoples who were incapable of realizing that whenever the 
 Briton bears abroad the torch of civilization, by introduc- 
 ing English habits and wares, he follows up his philanthropic 
 movement with a big bill which must be paid. 
 
 No juggling with words can alter or conceal this fact. 
 All the fantastic talk about the benefits of commercial inter- 
 course will not suffice to obscure the predatory character 
 of British warfare and its impelling cause, and it may be 
 said that no such attempt is seriously made by English writ- 
 ers. The singers of jubilee odes and the scribblers of eco-
 
 124 PROTECTION AND PROGRESS 
 
 nomic theories made to fit the necessities of British trade 
 occasionally indulge in laudation of the beauties of the mod- 
 ern intercourse promoted by Great Britain, but there are 
 plenty of honest Englishmen who freely admit that the 
 methods resorted to by the English of today to extend and 
 preserve their foreign trade are as ruthless and cruel as 
 those practiced by the Spaniards in their search for gold in 
 America three or four centuries ago. 
 
 Cobdenism could not easily result otherwise. The un- 
 healthy impulse given to the development of British resources 
 by the ism has made such a course necessary. The pres- 
 sure of population and the inequalities of wealth compel 
 a constant search for means of relief. The industrial con- 
 dition of the United Kingdom today resembles more than 
 anything else that of a person inflicted with an inflamed 
 and angry tumor, the supperation of which must be assisted 
 to save the patient's life. England today must be assisted 
 by the Government in order to relieve the humors and to 
 save the body politic. The commercial wars constantly 
 waged by the British are the equivalent of the relief afforded 
 by the discharge of pus. When success refuses to further 
 attend such efforts, when there are no more markets to 
 open, the patient must succumb. 
 
 That free trade is responsible for this condition is indis- 
 putable. It is impossible to deny that the British have laid 
 up extraordinary stores of wealth since the inauguration 
 of the policy of maintaining open markets, but that does 
 not affect the question at issue, which is, Can the United 
 Kingdom permanently maintain its inordinately large popu- 
 lation in the face of the growing competition of other na- 
 tions rapidly achieving industrial independence and which 
 are apparently determined to contest with Great Britain 
 for the trade of the few peoples without capacity or ambi- 
 tion enough to provide for themselves? If this is answered 
 in the negative, as it must be, then free trade, or Cobden-
 
 INTERNATIONAL FRICTION 125 
 
 ism, will stand forth as a confessed failure, because it has 
 created a condition which cannot be maintained. 
 
 When true economy is practiced throughout the civilized 
 world, when the workshop and the producer are brought 
 closer together, then Great Britain will shrink to her proper 
 proportions. It will be impossible then for the secondary 
 work of roundabout trading to retain its present import- 
 ance, for the future economist will teach and the sensible 
 man will act on the theory that unnecessary transportation 
 is a source of waste and must be eliminated as nearly as 
 possible from perfected industrial systems. 
 
 When the soundness of this theory is clearly perceived a 
 rational external trade will take the place of that now in 
 vogue. Men will cease to commit the absurdity of buying 
 at a distance of thousands of miles and importing at great 
 cost articles which they can have manufactured as cheaply 
 at their own doors. When this high stage of industrial 
 and commercial development aimed at by protectionists is 
 attained, exchanges between nations will be confined to 
 non-competing products. In this term are included all those 
 things which cannot be produced as cheaply by one people 
 as another, not because of acquired abilities, for protec- 
 tion assumes that most enlightened people can reach the 
 same plane of industrial ability if they make the effort and 
 persevere in it long enough, but on account of some natural 
 drawback, such as climate or lack of a particular raw 
 material. 
 
 When such a trade supplants the wasteful and unscien- 
 tific system of industrial exchange now prevalent friction 
 between nations will be reduced to a minimum. It is incon- 
 ceivable that the people of a country incapable of growing 
 coflFee should view with disfavor the importation of that 
 commodity if it was procured by exchanging for it articles 
 manufactured from iron or steel produced by those intend- 
 ing to consume the berry ; but the importation of manufac- 
 tured articles by nations with the capacity to produce similar
 
 126 PROTECTION AND PROGRESS 
 
 articles must always prove a source of irritation. The first 
 named system of exchange is an excellent exemplar of a 
 rational foreign trade; the latter furnishes a concrete illus- 
 tration of the folly of wastefulness, and is no more com- 
 mendable or worthy of imitation than the swapping of 
 jackknives for the mere love of barter. 
 
 Still more productive of bad feeling is the trade which 
 Adam Smith designates as the roundabout trade of foreign 
 consumption. Applying the coffee illustration to this sys- 
 tem of foreign trading brings into relief all of its exas- 
 perating features. Taking the three-sided relations of Bra- 
 zil, the United States and Great Britain in the conduct of 
 this particular sort of trade into consideration we find these 
 absurdities : The United States imports from Brazil in 
 a single year $78,831,476 worth of produce, chiefly coffee, 
 and that country takes American products to the value of 
 $13,827,914 in exchange; Great Britain, a relatively small 
 consumer of Brazil's leading product, in the same year im- 
 ported various kinds of produce from that country to the 
 value of $19,700,345, and exported merchandise, principally 
 manufactured articles, to the value of $37,629,830. The 
 balance adverse to the United States was $65,003,562, while 
 Great Britain's favorable balance was $17,929,485. 
 
 It only needs to be added to this that the English exports 
 to Brazil were composed chiefly of manufactures of cotton, 
 of iron, wrought and un wrought, manufactures of wool, 
 coal and machinery, to show the incredible wastefulness of 
 the roundabout system of foreign trade, for the statement 
 calls attention to the fact that the people of the United States, 
 instead of directly receiving their coffee from Brazil and 
 paying for it with their own products, actually import 
 coffee in British ships which sail from Brazil to ports in 
 the United Kingdom and from thence to this country ; and 
 we are also reminded that the $65,003,562 which represents 
 our adverse trade balance with Brazil is not paid to the 
 people of that country, but by a circuitous system of ex-
 
 INTERNATIONAL FRICTION 127 
 
 change goes to Europe to pay for products which had their 
 origin, so far as the raw material and the food which sup- 
 pHed the energy to manufacture them are concerned, in this 
 country. 
 
 Such a trade as this is economically indefensible. No 
 matter what tributes may be paid to the middleman and 
 the part he plays in the industrial world, it can never be 
 made to appear that a useless service performed by him 
 confers a benefit. The porter directed to carry a pack- 
 age to the house of a customer who lives in the next block, 
 if he proceeds directly to his destination, may be regarded 
 as a valuable assistant to the trader, but if he unnecessarily 
 makes a detour which consumes his time and energy it 
 will hardly be claimed that he has added to his value as 
 a carrier by doing so. 
 
 Nearly all roundabout foreign trade closely resembles 
 the circuitous operation of the porter suggested in the above 
 similie ; some of it may be performed with profit to man- 
 kind generally, but the most of it has no other recommenda- 
 tion than its tendency to multiply the parasites of industry. 
 
 Few people realize the extent of this parasitic growth 
 and those who do are afflicted with the singular hallucina- 
 tion that it is a benefit rather than an evil. This miscon- 
 ception is largely responsible for the undue importance at- 
 tached to external trade by the Cobdenites, and it has led 
 them into many blunders, not the least of which is the curi- 
 ous one that a nation only profits by the extension of its 
 foreign commerce. 
 
 This, and the corelating free trade error that it is impos- 
 sible for a protective country to greatly extend its trade, 
 will be examined in the next chaper, in which pertinent 
 facts and illustrations will be furnished to buttress the claim 
 made by advanced protectionists that the really desirable for- 
 eign trade is that which contemplates the exchange of non- 
 competing products, and that the only sound national sys- 
 tem of economy is the one which promotes a trade of this 
 description.
 
 CHAPTER VII. 
 
 WASTE OF ENERGY. 
 
 THE DISASTROUS EFFECTS OF UNNECESSARY EXTERNAL TRADE. 
 
 The whole world should be a workshop — Protection does not re- 
 sult in the promotion of exotic industries — Protection eliminates 
 the element of wastefulness from external trade — No account 
 taken by economists of the tremendous waste of energy involved 
 in unnecessary transportation — Free trade violates the fundamen- 
 tal concept of economics that energy should not be unnecessarily 
 dissipated — The "waste involved in the unnecessary shipping of 
 coal — The part played in the carrying trade by coal — Great 
 quantities of coal shipped to countries having undeveloped coal 
 measures — The exhaustion of the world's coal supply a greater 
 evil than the destruction of forests — The waste of fuel the 
 inevitable result of divorcing field and factory — Protection, by 
 bringing factory and field together, reduces the waste of fuel to 
 a minimum — The external trade of the future will give advan- 
 tages to countries which have not wasted their stores of fuel — 
 Protection calculated to promote external trade when a certain 
 stage of progress has been reached — Advantages of holding the 
 home market well in hand — American exports constantly in- 
 creasing, while those of Great Britain remain stationary — Eng- 
 land's excessive imports. 
 
 A recent contributor to a prominent British review, in an 
 article filled with the old-time optimistic views of the Cob- 
 denites, remarked : "Moreover, if free trade conquers — and 
 its triumph is possibly nearer than we think — the artificial 
 rivalries between nations resulting from the maintenance of 
 exotic industries will give place to a system of universal 
 co-operation ; the world will become one great workshop, 
 each place making and exporting what it is best fitted by
 
 • WASTE OF ENERGY 129 
 
 nature to produce, and finding its account in the prosperity 
 not in the crushing out of the industries of other countries."* 
 
 The observant reader will note in this expression a de- 
 cided shifting of the point of view of the earlier adherents 
 of the Manchester school. These latter, writing in 1850, 
 fancied that they clearly perceived that Great Britain was 
 destined to be the world's workshop, but Mr. Law, from 
 whom the quotation is taken, after studying the experiences 
 of a half a century, reaches the conclusion that "the world 
 will become one great workshop." 
 
 The soundness of this conclusion is indisputable, but there 
 is ground for viewing with suspicion the further assump- 
 tion, which is more in the nature of an implication than a 
 direct assertion, that the world will be equally benefited by 
 a readjustment on the lines indicated by the writer. The 
 phrase "artificial rivalries between nations resulting from 
 the maintenance of exotic industries" suggests that Mr. 
 Law's mind is still clouded v/ith the idea that acquired ability 
 is the exact equivalent of natural advantage. Undoubtedly 
 he still fancies that nature has fitted Great Britain to be a 
 better producer of textile fabrics than any other country, and 
 that the present lead of the United Kingdom in that partic- 
 ular industry is more due to that cause than to the skill 
 acquired by centuries of practice. 
 
 In the final analysis Mr. Law will see his mistake and 
 find that inexorable competition will permit no such outcome 
 as he hopes for. When the world becomes one immense 
 workshop, each place making and exporting what it is best 
 fitted by nature to produce, a great revolution will have been 
 accomplished. In the process nations now riding on the crest 
 of the wave of prosperity must disappear, or at least have 
 their relative 'importance changed. It w(^uld 1ic impossi1)le 
 to efifect such a readjustment without greatly disturbing 
 existing conditions. 
 
 *Law, New Pleas for Old Remedies, Westminster, June, 1896. 
 9
 
 130 PROTECTION AND PROGRESS 
 
 Mr. Law's error in assuming- that the change will not 
 result in the crushing out of rival industries is due to the 
 ingrained Cobdenite habit of assuming that everything al- 
 ready established is perfectly natural, and that all attempts 
 on the part of the people of the present day in new or 
 undeveloped countries to imitate the methods by which the 
 existing industrial conditions were brought about must be 
 regarded as efforts to introduce the exotic, and that there- 
 fore they will fail. 
 
 This is a curious delusion which experience should have 
 long since dissipated. It has been weakened somewhat of 
 late years, but it is not Hkely to wholly die out until the 
 decadence of the nation which gave it birth reaches a more 
 advanced stage. 
 
 There is enough evidence existing, and more is rapidly 
 accumulating, to destroy the confidence of those who ad- 
 vance this theory and who have employed it to strengthen 
 the argument that open ports have made England supreme 
 in commercial matters and will enable her to maintain the 
 supremacy she has attained. Some of this testimony will 
 be adduced to show that the relative position of Great Brit- 
 ain has greatly changed since 1850, but in the pages imme- 
 diately following the effort of the writer will be devoted 
 chiefly to the demonstration of the fact that protection in- 
 creases the volume of external trade, and that in the future 
 this trade will change its character so materially that waste- 
 fulness, which is now the most pronounced feature, will be 
 nearly eliminated. 
 
 Prefatory to this demonstration, data will be introduced 
 to show how largely the energy of mankind is dissipated in 
 the performance of the work of unnecessary transportation. 
 Mulhall informs us that "the actual traffic by rail and ship 
 (of the world) is equal to 5,500,000 tons daily, in the trans- 
 portation of which are employed 4,050,000 men ; that is to 
 say, each carrier of these two classes moves i| tons daily. 
 Taking the working year as 310 days, the sum paid daily for
 
 WASTE OF ENERGY 131 
 
 freight, in one or other form, is £3,800,000 by 193,000,000 
 persons engaged in various industries ; thus each worker 
 in the human family of the civiHzed nations of Christendom 
 pays 5 pence a day for freight, or one-tenth of the fruits 
 of his industry. 
 
 "The number of carriers compared to other workers is as 
 4 to 90, and the amount of capital employed in their calling 
 represents 1 1 per cent, of the aggregate wealth of mankind. 
 * * * The capital represented by each hand employed 
 in carrying is nearly £900; the wealth of all the rest of the 
 world divided among the other workers ( 193,000,000 hands) 
 is only £320 each. The earnings of each carrier, as we have 
 seen average £135 a year; those of the other workers of the 
 world only reach £52 each. Hence it appears that the cariy- 
 ing trade shows a very high ratio of capital and earnings to 
 the number of hands employed."* 
 
 When these statements are considered with the attention 
 they deserve several important inferences will be drawn from 
 them, not the least among which is that the importance of 
 transportation as a factor in the human economy has been 
 greatly overrated because of its artificially abnormal de- 
 velopment. It appears, according to the authority just 
 quoted, that the total earnings of carriers in the western 
 world in 1894 amounted to £1,173,000,000. This fabulous 
 sum, which represents a tax of 10 per cent on the industry 
 of other workers, appeals to the imagination to such an 
 extent that many of the facts relating to these earnings are 
 obscured. Economists of the professional stamp and prac- 
 tical every-day men are under the glamour of the mighty 
 result and rarely ask how it is brought about. 
 
 So far as the writer's knowledge goes, no attempt has 
 ever been made to determine what proportion of this hauling 
 to and fro of products, raw and finished, is really necessary. 
 While special instances of unnecessary transportation and 
 
 ♦Mulhall, Industries and Wealth of Nations, 1896.
 
 132 PROTECTION AND PROGRESS 
 
 consequent waste of energy impress a certain class of ob- 
 servers, particularly when their interests are directly affected, 
 there is a general disposition to assume that, as a whole, the 
 carrying facilities of mankind are employed beneficially. 
 
 That this latter conclusion is unwarranted is testified to — 
 unconsciously, of course — by Mulhall, who tells us "that 40 
 per cent of the working power of the world is used for 
 production, 60 per cent for transport or distribution, which 
 latter is exactly the reverse of the ratios of 1840."* 
 
 It may at first be assumed that the enormous change here 
 referred to has been the chief instrument in promoting the 
 immensely greater accumulations of wealth which the world 
 now knows, but a little reflection will soon suggest that other 
 causes must have produced that result, and that transporta- 
 tion can only be credited with a share equal to its real utility. 
 
 It is certainly a mistake to assume that the carrier's labor 
 contributes to the increase of the world's wealth when he 
 takes the raw wool, filled with grease and filth which increase 
 its weight, from the plains of California to a New England 
 town, where it is cleansed and manufactured into woolen 
 goods to be returned again to California to be consumed 
 by the populations in whose midst the flocks from which the 
 original wool was shorn are raised. 
 
 During the year 1897 the imports of iron ore into Great 
 Britain reached 5,968,680 tons, a quantity representing an 
 output of 3,000,000 tons of pig iron, or the annual produce 
 of 100 blast furnaces.f More than 5,000,000 tons of this 
 ore was from Bilboa, in Spain. Turning to the tables showing 
 imports into the latter country v/e find that in 1894 metals 
 and the manufactures thereof to the amount of 24,490,107 
 pesetas were bought abroad, principally in Great Britain, 
 and that the imports into Spain of machinery and vessels 
 in the same year were valued at 31,628,131 pesetas. J Will 
 
 ♦Mulhall, Industries and Wealth of Nations, 1896. 
 fBritish Board of Trade Returns, 1897. 
 ^Statesman's Year Book, 1897.
 
 WASTE OF ENERGY 133 
 
 any reasonable person assert that there was an economic 
 gain in these transactions, or that the shipment of raw cot- 
 ton from the United States to England to be manufactured 
 into cotton cloth and in that shape returned to the former 
 country did not represent a waste of industrial energy? 
 
 It would be impossible to even approximately determine 
 the extent of the waste of energy resulting from the unnec- 
 essary moving of raw materials and finished products, but 
 that it is enormous a glance at some of the leading features 
 of the modern transportation business will disclose. 
 
 The case of Great Britain affords a concrete illustration 
 of the methods and magnitude of this wastefulness. Here 
 we have a nation with a population of nearly forty millions 
 crowded into a territory incapable of supporting more than 
 half that number with the products of its own soil. Every 
 year this country imports from other lands enormous quan- 
 tities of food stuffs. In 1895 it was obHged to draw on 
 foreign lands for 179,927,450 cwt of cereals and flour, 
 3,758,161 cwt of potatoes, 5,431.338 cwt of rice, 5>352,930 
 cwt of bacon and ham, 2,458,860 cwt of fish, 31,157,275 
 cwt of raw and refined sugar, 2,825,682 cwt of butter, 
 940,168 cwt of margarine, 2,133,809 cwt of cheese, 2,410,- 
 532 cwt of beef, 856,255 cwt of preserved meats, 2,610,375 
 cwt of fresh mutton, 1,065,470 sheep and lambs, 415,565 
 head of cattle, 12,722,292 great hundreds of eggs, 8,214,345 
 proof gallons of spirits for consumption and 14,635,568 gal- 
 lons of wine. 
 
 An examination of this list reveals that it consists of 
 articles all of which might have been produced with facility 
 and in profusion in such a country as the United States, and 
 when we inquire more closely we find that it was from this 
 country that Great Britain derived by far the largest pro- 
 portion of the above food supplies. Pursuing our investi- 
 gations a step further, we find that Great Britain gave in 
 exchange for these products, or at least that proportion of 
 them derived from the United States, manufactured articles,
 
 134 PROTECTION AND PROGRESS 
 
 none of which was pccuHar to Great Britain and all of which 
 we are as w^ell able to produce as the British. The list of 
 our imports from the United Kingdom embraces manufac- 
 tures of iron and steel, of copper and other metals; textile 
 fabrics of wool, cotton and flax, and other miscellaneous 
 articles wholly or partly manufactured. There is no doubt 
 that the list comprises many articles which Americans could 
 not under existing conditions manufacture as cheaply as 
 the British, but it would be difficult to name any which at 
 some future time we may not be able to produce on an in- 
 finitely greater scale and thus be able to sell at a much lower 
 price than those who now enjoy the trade. 
 
 If the correctness of these assumptions is admitted, and 
 they doubtless Avill be, for it would be difficult to success- 
 fully dispute them, the only inference that can be drawn 
 from them is that the maintenance on English soil of manu- 
 factories employed in fashioning articles for the American 
 market involves an enormous waste of energy, and therefore 
 violates the fundamental concept of economics that produc- 
 tion should be carried on, so far as practicable, by the least 
 possible expenditure of human brain and muscle. 
 
 In the less complex industrial operations men are careful 
 to avoid the blunder which free trade theorists extol when 
 they lay undue stress on the value of external trade. No 
 competent mining engineer, for instance, would construct his 
 mill for crushing ores at such a distance from the mine from 
 whence they are taken, and from the sources of supply of 
 timber and water, that he would be compelled to haul the 
 two former and conduct the latter at great expense to the 
 scene of his operations. AJl of his ingenuity would be di- 
 rected to bringing raw material, fuel and water as close 
 together as possible, and any violation of the obvious eco- 
 nomic demand that the cost of operation be reduced as near 
 to a minimum as possible, unless the mine were exceptionally 
 rich, would result in disaster, and, under any circumstance, 
 in as much loss as there was waste.
 
 WASTE OF ENERGY 135 
 
 The operations of the whole world are on a vast scale and 
 exceedingly complex, but they present all the essential fea- 
 tures of our illustration. There is no economic reason that 
 can be advanced in favor of transporting raw cotton three 
 thousand miles or more to be manufactured into fabrics, 
 when the same fabrics could be manufactured near the fields 
 in which the cotton is produced. 
 
 At one time it was assumed that nature had particularly 
 fitted Manchester, in England, to be the seat of the cotton 
 manufacturing industry, but no one holds to that view at 
 present, least of all Cobdenites, who have been endeavoring 
 to persuade American protectionists to throw down their 
 tariff barriers by extolling the efficiency of the operatives of 
 this country, the implication of their argument being that 
 American labor need not fear British competition because 
 of its superior character. 
 
 There being no ground for the assumption that the Brit- 
 ish have superior natural or acquired capabilities as spinners 
 or weavers of cotton fabrics, it is impossible to dispute the 
 fact that all of the energy expended in transporting the vast 
 quantities of food to feed the British cotton operatives, and 
 that similarly employed in the carriage of the raw material to 
 Great Britain, and in the reshipping of the finished products 
 to this country for distribution, is absolutely wasted. 
 
 If this immense waste were abated, and that involved in 
 the shipping of coal to countries which have abundant un- 
 developed supplies and to depots where great quantities of 
 fuel are maintained to be consumed by ships in unnecessarily 
 hauling commodities to and fro, there would be a tremendous 
 diminution of the trade known as external. 
 
 Few people appear to be cognizant of the remarkable part 
 played by the transportation of coal in swelling the world's 
 carrying trade. In 1896 the exports of British coal reached 
 44,200,000 tons, constituting 84.7 per cent of the quantitative 
 volume of the export business of Great Britain during the 
 year named. The writer to whom we are indebted for these
 
 136 PROTECTION AND PROGRESS 
 
 figures remarks "that coal enters into practically the whole 
 of our (British) exports, and probably forms the cargo of 
 over 50 per cent of the tonnage cleared from the United 
 Kingdom." 
 
 It would be impossible to determine what proportion of 
 this vast traffic represents wasted energy, but that it is large 
 may be easily determined by consulting the detailed accounts 
 of British exports, which show that great quantities are 
 shipped to countries known to have undeveloped coal meas- 
 ures and to other countries where the product of the United 
 Kingdom for one reason or another can be sold in competi- 
 tion with the product of the lands to which they are shipped. 
 The quantities shipped to depots for the use of steamships in 
 the far ocean trade also frequently represent a great eco- 
 nomic waste, being transported thousands of miles when 
 the coal might be obtained close at hand. 
 
 In considering this phase of the question the fact must 
 be kept in mind that the world's supplies of coal are not 
 inexhaustible and that future generations may be greatly 
 embarrassed by the reckless depletion of coal measures by 
 the people of to-day. There are many writers who deplore 
 the wanton destruction of forests in new countries who might 
 perform an infinitely greater service to mankind by pointing 
 out the unnecessary waste of coal. The evils resulting from 
 the denudation of the earth may be measurably remedied by 
 skillful aforestization, but when the coal measures are once 
 exhausted nothing can replace them. 
 
 This being the case, sound economy demands that the 
 waste of fuel incurred in the unnecessary transportation of 
 raw materials and finished products shall cease, and that 
 the supplies of coal in the various countries of the world be 
 conserved, so far as possible, for purposes of production 
 and warmth. 
 
 The Cobdenite may swell with pride over the expanding 
 figures of British external trade, but the future generations, 
 when they come to consider the fact that the showing was
 
 WASTE OF ENERGY 137 
 
 made at the expense of posterity, will hardly be inclined to 
 applaud the sagacity of those who viewed with equanimity 
 the rapid depletion of the coal measures of the United King- 
 dom. 
 
 Those responsible for the waste will have no excuse to 
 offer for their blindness. English writers have pointed out 
 what must result and have sounded warnings. One of them, 
 in a book which stirred the country, has said : "Every ton 
 of coal extracted from our coal fields implies a permanent 
 loss of wealth to that amount. The coal doesn't grow again. 
 
 * * * When you send it away to the foreigner to feed 
 his factories, which destroy or injure your factories, and 
 take in return from him food stuffs and manufactures 
 
 * * * you are letting your land deteriorate ; your people 
 are forgetting in the gloom of the coal mines how to till the 
 soil and feed themselves, and are not thereby doing much 
 to advance their health and happiness."* 
 
 The writer quoted seems to be chiefly concerned with the 
 effects upon his own country of unduly stimulating an ex- 
 port trade the present profits of which cannot be measured 
 against the future disasters which may result to Great Brit- 
 ain from absolute or relative scarcity of fuel. He sees clearly 
 that so far as the United Kingdom is concerned the coal 
 export trade affords a striking analogy to the improvident 
 act of a mechanic who sells his tools and squanders the pro- 
 ceeds, and by so doing deprives himself of the opportunity to 
 earn a future living. Viewed from this standpoint, external 
 trade in coal presents few features for British complacency, 
 but when we survey the matter in its broader aspects and 
 consider the effects of the wasteful consumption of fuel in 
 unnecessarily transporting commodities to and fro the 
 fatuity of those who see only the present profit of the carry- 
 ing trade seems appalling. 
 
 The practical man who lives in the present, whose every 
 
 •Williams, Trade in Germany.
 
 138 PROTECTION AND PROGRESS 
 
 act expresses the idea "after me the deluge," may be par- 
 doned for extolHng the beauties of external traffic and in- 
 ternal transportation, dwelling only upon their magnitude, 
 but the economist who fails to take into consideration the 
 waste of energy and wealth involved by pursuing a system 
 which separates field and workshop commits a crime, or at 
 least stamps liimself as incapable in perceiving and pointing 
 out in what true economy exists. 
 
 When the extent and consequences of the waste we have 
 described are realized the mind reverts to the proper remedy, 
 and that is to permit the natural growth of populations in 
 those regions of the earth plentifully endowed with resources. 
 This can only be accomplished by overcoming the artificial 
 advantage which capital and acquired skill have given na- 
 tions with established manufacturing industries. The Cob- 
 denistic sophistry that the world, like a checkerboard, is 
 divided into black and white squares, the nations capable of 
 making finished articles representing the white and those 
 fitted to be producers of raw materials representing the 
 black squares, must be dismissed, and the fact that no such 
 sharp division exists must be stared in the face. 
 
 When Britons awake to a thorough realization of the fact 
 that the whole world must in the future be a workshop, and 
 that some day men will have the wisdom to avoid all un- 
 necessary waste of energy, they will understand the force 
 of the protectionist contention that only that external trade 
 which represents the exchange of non-competing products 
 is beneficial to mankind. 
 
 When the world settles down to trading of this rational 
 character it will be found that nations that have resorted to 
 the protective policy have made no mistake. Then the sac- 
 rifices made by protectionists with the view of rendering 
 themselves independent, so far as practicable, will be re- 
 warded by the extension of that character of trade so much 
 extolled by Cobdenites, although it will have eliminated from 
 it the greater part of the wastefulness described above.
 
 WASTE OF ENERGY 139 
 
 It must be obvious that when the period arrives in which 
 workshop, field and mine will be brought into close relation 
 throughout the world generally the countries producing raw 
 materials and food supplies in abundance will be better situ- 
 ated than those deficient in either or both particulars. The 
 United States, for example, must possess a great advantage 
 over England in a competition for the steel and iron trade 
 of those countries which do not produce iron ores or attempt 
 to convert them into finished products. 
 
 Great Britain is now compelled to import iron ores from 
 Spain and is largely dependent on foreign countries for food 
 supplies, while the United States has within its borders 
 illimitable supplies of iron ores, carrying a higher percentage 
 of metal and capable of being converted into pigs and finished 
 products more cheaply than those of England, and at the 
 same time raises the food for the sustenance of her iron 
 workers at the very doors of her factories. 
 
 These differing conditions suggest the inevitable outcome 
 of a competitive contest, pointing, as they do, to the invasion 
 of markets now held by Great Britain by the iron and steel 
 products of this country. 
 
 Fifty years ago anyone venturing to assume such a possi- 
 bility would have been deemed mad by the adherents of 
 the Manchester school, and some of the cult, holding to the 
 belief that it is imposible for a great industry to be developed 
 in a protective country, still survive and obstinately refuse 
 to accept the plainest evidence. Pages might be filled with 
 quotations from recent writings of Cobdenites in which the 
 assertion is made with more or less positiveness that "pro- 
 tection does not protect," and that the industries called into 
 existence through such a policy must necessarily be ephem- 
 eral in character because of their artificiality. Men who 
 argue thus absolutely disregard the fact that the manufacture 
 of iron and steel in the United States has attained greater 
 proportions than in any other nation and that the expan- 
 sion of the industry has resulted in a lowering of prices
 
 I40 PROTECTION AND PROGRESS 
 
 which has not only benefited the consuming population of 
 this country, but that of the whole world as well. 
 
 Those who have satisfied themselves by the a priori 
 method that protection cannot accomplish the results above 
 outlined are inclined to cling tenaciously to the view formu- 
 lated nearly half a century ago that protective countries 
 would always find it impossible to compete in outside markets 
 with a country which freely opens its ports to the commodi- 
 ties of other nations. But the logic of facts is rapidly com- 
 pelling them to abandon their position. 
 
 It is impossible to seriously argue that a thing cannot 
 be done when the whole world is daily witnessing the per- 
 formance of the alleged impossibility. No matter how plaus- 
 ible their theories may seem on paper, Cobdenites, in the 
 face of the constantly expanding foreign trade of the United 
 States, will be obliged to desist from the ridiculous assertion 
 that protection renders external trade impossible. When it 
 can be shown that the exports of competitive articles from 
 this country are increasing much more rapidly than similar 
 exports of Great Britain it is idle to contend that protec- 
 tion has the effect attributed to it by writers of the Man- 
 chester school. 
 
 Cobdenite writers frequently make the blunder of assum- 
 ing that the expansion of British industry has never been 
 rivaled. They are misled by keeping their eyes fixed on the 
 statistics of other days. If they would turn their attention to 
 more recent figures of production in this country and Ger- 
 many they would soon discover that English industrial 
 expansion has been more than matched by that of the 
 Americans and Germans. 
 
 Elsewhere due attention will be devoted to this interest- 
 ing phase of the subject ; here it is only alluded to as bearing 
 on the progress made in external trade by protective coun- 
 tries. Our illustrations for the purpose will be chiefly drawn 
 from the United States, although the showing made by 
 Germany is in some particulars more striking than that of
 
 WASTE OF ENERGY 141 
 
 this country, because Americans liave been compelled to meet 
 the wants of a population increasing with phenomenal rapid- 
 ity owing to natural accretions and an extraordinary immi- 
 gration, and have thus to a degree been prevented from 
 accumulating surpluses for export. 
 
 Turning to a carefully prepared table compiled from 
 official data furnished by the United States Statistical Bureau, 
 we find that the exports of manufactured articles from this 
 to foreign countries have been steadily increasing since 
 1870. In terms of percentage the principal of these increases 
 are stated as follows: Agricultural implements, 391 per 
 cent ; builders' hardware, 258 ; saws and tools, 698 ; electrical 
 supplies, 579; general machinery, 934; jewelry, 1,000; paints 
 and varnish, 776; cycles and parts (increase in two years 
 since the business of exporting them began), 269; locomo- 
 tives, 843 ; paper and manufactures of, 547 ; boots and 
 shoes of leather, 547 ; musical instruments, 379 ; clocks and 
 watches, 3,718, and manufactures of cotton, 482 per cent. 
 Or the statement may be made in this way, that we exported 
 $9,410,088 worth of the articles mentioned in 1870 and to 
 the value of $78,571,930 in 1897.* Our export of manufac- 
 tured articles in the fiscal year 1896-97 aggregated $276,- 
 357,861. This amount was 26.78 per cent of the total 
 exports. In 1870 the proportion of manufactured to all 
 other classes of exports was only 15 per cent of a total 
 export of $455,208,341 of all sorts of domestic productions, 
 manufactured articles forming only $68,279,764 of the whole 
 amount. 
 
 It is hardly necessary to enter further into details. Those 
 already furnished clearly indicate the phenomenal progress 
 made and show unmistakably that there is no obstacle to the 
 extension of foreign trade which may not easily be over- 
 come by a protective country with the resources of the 
 United States. 
 
 *"Foreign Trade," New York, January, 1898.
 
 142 PROTECTION AND PROGRESS 
 
 If what has already been accompHshed in that direction 
 prompts as noted a free trader as the Rt. Hon. James 
 Bryce, M. P., to declare in a speech to his constituents, after 
 pointing out that "steel rails, electrical plants and bicycles 
 were all produced in the United States enormously cheaper 
 than in England," that the latter country had good reason 
 to fear American competition,* what will happen when 
 American manufacturing industries reach that stage of 
 development in which the saturation of the home market 
 with surplus products compels manufacturers to seek an 
 outlet for them in foreign lands? 
 
 The question has in part been answered by free traders 
 who have studied the situation from the practical point of 
 view, ignoring theory entirely. J. Stephen Jeans, writing 
 on the subject of "Supremacy in the Iron Market," declares 
 unequivocally that protection is an advantage rather than 
 an obstacle to the expansion of external trade. He says: 
 "The economic policy of the United States — and which is 
 often supposed to cramp and fetter invention — did not hinder 
 a band of brilliant engineers and metallurgists from exerting 
 themselves to improve upon British methods and appliances 
 until they placed American practice far ahead of anything 
 in Europe."! Having thus cleared the ground by showing 
 that Americans were not hampered by protection in their 
 efforts to create a great iron and steel industry, he proceeds 
 to make clear that protection continues to operate advan- 
 tageously by relieving the country of its surplus production. 
 This is his contention : 
 
 "Another essential difference in the commercial arrange- 
 ments of continental industries as compared with British 
 is founded on the experience on the continent of the system 
 of protection. The customs duties levied on the imports into 
 Germany, for example, protect the German manufacturer 
 
 *Bryce, Speech at Wolmhampton, January lo, i8 
 fjeans, Engineering Magazine, November, 1897.
 
 WASTE OF ENERGY 143 
 
 from competition in his own market, so that he can always 
 depend upon securing within the limits thereby prescribed 
 a satisfactory price from his home customers. 
 
 "This result, as is proved by the recent experience of the 
 United States, would not necessarily follow without a certain 
 amount of organization, but the Germans are adepts in the 
 art of accommodating themselves to circumstances, and they 
 consequently have a whole legion of syndicates designed to 
 regulate production and price in the different branches of 
 trade and industry. The evil of overproduction is thereby 
 kept in check and prices are well under control. The home 
 business, in short, is made so profitable that manufacturers 
 can afford, if necessary, to lose on export orders, which they 
 often do for the double purpose of building up trade and 
 keeping their manufacturing establishments and their work- 
 men fully employed. 
 
 "There is method in this arrangement. With production 
 on a large scale, standing charges are kept down and the 
 cost of manufacture is lessened, while the workmen, having 
 full and regular wages, are not likely to be so difficult to 
 handle as they would be if — as often happens in England — 
 they were employed only to the extent of one-half or two- 
 thirds of the full time. 
 
 "Of course, in so far as Germany, or any other country, 
 sells in neutral markets at less than cost, it is not fair com- 
 petition. It could be effectively met only by the adoption 
 elsewhere of a similar economic system, which, however, 
 cannot be looked for in England, wedded as she is to free 
 trade, whatever consequences that system may involve."* 
 
 In these expressions of the secretary of the British Iron 
 and Steel Association will be found several texts for dis- 
 cussion elsewhere, but here we are merely concerned with 
 his admission that instead of repressing external trade, as 
 has been urged by the Cobdenites, when the conditions 
 
 ♦Jeans, Engineering Magazine, December, 1897.
 
 144 PROTECTION AND PROGRESS 
 
 become ripe for such a result protection actually encourages 
 exports to foreign countries. Mr. Jeans' illustration, quoted 
 above, of course applies equally to the United States, or, 
 rather, will when the manufactures of this country are devel- 
 oped to such an extent that the home demand can be supplied 
 with ease and a surplus produced for export. 
 
 Although these views of Mr. Jeans were expressed several 
 months anterior to the writing of this paragraph, no serious 
 attempt has been made to combat them. There is frequent 
 denunciation of trusts and syndicates, and the grievous injus- 
 tice they do to consumers by resorting to the practices above 
 described is protested against, but the fact is not disputed 
 that protection stimulates exports. 
 
 It is not a question here whether this stimulus is at the 
 expense of the consumer or whether the workings of the 
 system are, on the whole, injurious to the country; Mr. 
 Jeans' testimony is drawn upon merely to emphasize the con- 
 tention that protection does not hamper external trade, and 
 incidentally to refute the assumption of the Cobdenites, 
 voiced by Mr. Bryce in the speech quoted from, that free 
 trade England would have more reason to fear the competi- 
 tion of the United States and other protective countries 
 if they would open their markets to the unrestricted entrance 
 of foreign goods. 
 
 Experience demonstrates that this assumption of Mr. 
 Bryce is absolutely erroneous, and proves the' soundness 
 of Mr. Jeans' views that the country which holds its home 
 market well in hand, all the other conditions being equal, 
 is in better condition to compete in the markets of the world 
 than the country which permits itself to be made a dump- 
 ing ground for the surplus productions of other peoples. 
 
 Passing from the discussion of this phase of the ques- 
 tion to a comparison of the figures showing the development 
 of the external trade of a typical protectionist country and 
 those of the leading free trade nation, we find that the 
 expansion of the export and import trade of the United
 
 WASTE OF ENERGY 145 
 
 States, all things considered, has been more remarkable than 
 that of free trade Great Britain. Referring again to the 
 statistics of Mr. Mulhall, we find that our imports amounted 
 to only i75,(X)0,ooo in i860 and that thirty-six years later, 
 in 1896, they were £161,000,000. Our exports in i860 were 
 valued at £84,000,000 and in 1896 they aggregated £182,- 
 000,000. The total external trade for the former year was 
 £159,000,000 and in the latter year £343,000,000. 
 
 Had Mr. Mulhall taken the measure of our progress 
 a year later he would have been obliged to record a total 
 export and import trade amounting to £368,000,000, of which 
 £220,000,000 in round numbers consisted of exports. 
 
 Our authority's tables are not so arranged as to permit 
 an exact paralleling of these figures with those showing 
 the expansion of British trade, but the data is close enough 
 to show that the progress of the United States in this par- 
 ticular is beyond all comparison greater than that of the 
 United Kingdom. Taking 1850 as our starting point, we 
 find that Great Britain in that year exported to the value of 
 £70,000,000, and that her imports amounted to £99,000,000. 
 Thirty years later her exports had increased to £286,000,000 
 and imports to £411,000,000. This represented a total ex- 
 ternal trade in 1850 of £169,000,000, and of £697,000,000 
 in 1880. 
 
 Had this rate of growth continued the contention of the 
 Cobdenites would have been much stronger than' it is, but 
 when we pursue the subject further we discover that exports 
 which had reached £286,000,000 in 1880, remained station- 
 ary, so far as value is concerned, for a period of fifteen 
 years, the amount being the same in 1895. During the same 
 years the value of imports rose from £411,000,000 to 
 £417,000,000. 
 
 Still adhering to Mulhall's figures, we find that Ameri- 
 can exports, which had reached £171,000,000 in 1880, in- 
 creased to £182,000,000 in 1896, and that imports rose from 
 10
 
 146 PROTECTION AND PROGRESS 
 
 £140,000,000 in the first named year to £161,000,000 in the 
 latter year. 
 
 Here again we may remark that if the EngHsh statisti- 
 cian had made his comparison one year later, after the United 
 States had recovered from a trade depression largely due 
 to interference with the operations of the protective tariff, 
 the evidence favoring the contention that protection does not 
 hinder foreign trade would have been still stronger, for the 
 records of the fiscal year 1896-97 show that the export 
 trade of the United States amounted to nearly £220,000,000 
 an increase of £49,000,000 during the fifteen years in which 
 the value of British exports was nearly stationary. 
 
 There are other points which need to be emphasized 
 to bring into relief the fact that protective America's external 
 trade has developed as rapidly as that of Great Britain in 
 the past and is sure to surpass the record of that country in 
 "this regard in the future. The first of these is that the 
 :great gains of the British were made during the years when 
 they enjoyed a practical monopoly of outside markets be- 
 cause of their preparedness. It was a comparatively easy 
 matter for the manufacturers of Great Britain to expand 
 their operations and find a market for their surplus products 
 when they were almost without competitors. But when 
 under the stimulus of protective tariffs great industries were 
 created in Germany and the United States, which, after fully 
 supplying the home demand of those countries, permitted 
 their surplus products to overflow into outside markets, the 
 situation at once changed, and Great Britain, no longer able 
 to maintain her supremacy, lost ground both relatively and 
 absolutely, a result that might have been expected, for it is 
 an axiom in economics that industrial nations must advance ; 
 a stationary stage is always the precursor of retrogression. 
 
 There is another phase of the question of external trade 
 which may be touched upon here, but will be more fully dis- 
 cussed in the chapter devoted to the development of internal 
 trades. The excessive imports of Great Britain and their
 
 WASTE OF ENERGY 147 
 
 composition is referred to. It has already been shown in 
 another connection that the British are largely dependent 
 upon other peoples for their supplies of raw materials and 
 foodstuffs. Obviously in instituting a comparison between 
 the external trades of the United Kingdom and another 
 country not in a state of dependence it is absurd to extol as 
 an advantage a positive drawback. This, however, is con- 
 stantly done by the Cobdenites. 
 
 As we saw in a preceding chapter. Great Britain draws 
 upon foreigners for food and raw products to such an extent 
 that her imports exceed her exports over $600,000,000 annu- 
 ally. If her situation was changed ; if, like the United States, 
 she were capable of producing all the raw cotton consumed 
 in her factories, and could raise enough food to supply the 
 millions who convert the raw materials into finished fabrics, 
 the tables of external trade would tell a different story. 
 
 Eliminate from the table of English imports the grain 
 and flour, the raw cotton, dead meat, butter and margarine, 
 wood and timber, animals, oils, seeds, fruits, leather, wine, 
 cheese, copper and iron ore, lead, eggs and tobacco — all of 
 which products we produce in excess of our needs — and it 
 shrinks considerably ; to such an extent indeed that the force 
 of the argument based upon it, that external trade is benefi- 
 cial, is seriously impaired, for the elision irresistibly suggests 
 the dependence of Great Britain upon other countries — a 
 source of weakness rather than of strength. 
 
 It also brings into plain relief a fact we have endeavored 
 to make clear: that the divorcing of field and workshop 
 was an economic error which has caused an enormous waste 
 of energy expended in unnecessary transportation. Cob- 
 denism is responsible for the world's persistence in this 
 economic mistake for several years after experience had 
 demonstrated the fallacy of the assumption that one set of 
 people were fitted to be the makers of finished articles while 
 all others were to be hewers of wood and drawers of water 
 for those more highly favored by Providence.
 
 CHAPTER VIII. 
 
 PROTECTION PROMOTES ECONOMY. 
 
 WASTE ELIMINATED BY BRINGING FARM AND FACTORY TO- 
 GETHER. 
 
 Evil results from improvident Yi^aste of energy — Limited character 
 of the world's coal supplies — Energy conserved by bringing man- 
 ufacturer and consumer close together — Effects of creation of 
 American manufacturing industry — Elimination of waste a pro- 
 nounced feature — Drawbacks of dependence on foreigners for 
 supplies of manufactured articles — The penalty paid by the 
 American people — Extortionate prices exacted by English rail 
 manufacturers — Prices doubled in years of active demand — 
 Hundreds of millions lost by American^ — No stability in prices 
 of rails until American production became a factor — The ten- 
 dency of protection to disperse manufactures — It tends to the 
 promotion of new seats of industry — Inestimable benefits con- 
 ferred upon agricultural classes by proximity of manufactories — 
 The remarkable results achieved in the United States by bring- 
 ing farm and factory together. 
 
 In the chapter on external trade stress was laid upon 
 the waste of energy consequent upon the unnecessary mov- 
 ing to and fro of raw products and finished articles. An 
 attempt was made to picture the ill results to future gen- 
 erations which must flow from the unnecessary consumption 
 of the world's supply of coal by the transportation of raw 
 materials from the place of their origin to remote points, 
 there to be fashioned into finished articles and thence 
 shipped to other countries and peoples capable of produc- 
 ing similar articles for themselves, and even back to the 
 peoples who had originally produced the raw materials. 
 
 The assumption that it is an economic error to unneces- 
 
 148
 
 ECONOMY IN PROTECTION 149 
 
 sarily divert from purposes of production a fuel which can 
 never be replaced cannot be successfully disputed. Unless 
 it is contended that the science of political economy should 
 only take cognizance of present conditions and results and 
 leave the future to take care of itself its professors must 
 deprecate waste. The most extreme Cobdenite, while his 
 teachings may tend to create the impression that the gen- 
 erations of today need have no care for those who come 
 after them, will not venture to directly express the opinion 
 that such disregard is either defensible or advisable. In- 
 deed, the exponents of the idea of laisse:^ faire, when con- 
 sidering the subject abstractly, invariably assume that the 
 tendency of a free interchange in commodities must result in 
 permanently advancing the material welfare of mankind. 
 
 It is manifestly the duty of economists to point out the 
 consequences of waste. The faithful performance of this 
 duty requires that emphasis should be laid on the fact that 
 the teachings of the Cobdenites if followed to their logical 
 conclusion will materially abridge the period during which 
 life may be maintained on the planet we inhabit. 
 
 It was recently pointed out by Lord Kelvin, apropos of 
 the earth's store of fuel, that "the danger ahead is not that 
 the coal will give out and leave the world to freeze, but 
 that the oxygen which is destroyed along with the consump- 
 tion of fuel will all be used up and leave that helpless being, 
 man, to a fate no kinder than asphyxiation. Lord Kelvin 
 emphasized, therefore, that the best known system of pro- 
 ducing oxygen, that of cultivating in a broad way vegeta- 
 tion, be adopted to avert the great disaster.""" 
 
 The suggestion and the proposed remedy are characteris- 
 tic specimens of the methods of reasoning adopted by the 
 adherents of the Manchester school. Here an evil is pointed 
 out which a little inquiry would have developed is largely 
 aggravated by a false economic system, yet Lord Kelvin 
 
 *Cassier's Magazine, March 1898.
 
 ISO PROTECTION AND PROGRESS 
 
 fails to ask whether it would not be possible to- at feast 
 postpone the disastrous consequences which he predicts 
 will ensue when the earth's oxygen is destroyed. Instead, 
 of investigating methods of abating the waste he tacitly 
 assumes that there are none, and merely suggests that 
 man in the future, by an extraordinary expenditure of en- 
 ergy and other sacrifices, may avert the results of present 
 improvidence sufficiently to escape the doom of asphyxia- 
 tion. 
 
 Although the peril here outlined has not received the at- 
 tention it deserves, economists rarely bestowing much 
 thought upon it, usually contenting themselves with con- 
 jectures as to the remote probable consequences and the 
 possibility of finding substitutes for coal, the desire which 
 impels peoples to resort to protective tariffs, that of secur- 
 ing present gain and an equality with other nations with 
 developed industries, is doing much to postpone the dis- 
 aster which must overtake the world when its stores of coal 
 are completely exhausted. 
 
 Protection, by bringing field and factory together, is rap- 
 idly eliminating the waste of unnecessary carriage, and in 
 the not very remote future, when the increasing mobility of 
 capital shall cause it to move more freely and in a somewhat 
 different direction from that which it has taken in the past, 
 the saving of fuel and energy will be greatly increased, 
 
 A glance at the condition of manufacturing in the United 
 States will facilitate the study of this phase of the question, 
 illustrating as it does in a most significant manner the truth 
 of the protectionist assumption that true economy consists 
 in bringing producer and consumer as closely together as 
 possible. The facts and figures which will be cited when 
 properly interpreted will show that the tendency of pro- 
 tection is to disperse instead of concentrating manufactures, 
 and they will also reveal that the Cobdenite theory, that 
 it is desirable to concentrate in one place all of the manu- 
 facturing industries of the world, was fallacious, and that
 
 ECONOMY IN PROTECTION 151 
 
 had it been accepted as sound it would have miHtated against 
 real and permanent cheapness. 
 
 That permanent and not immediate cheapness should be 
 the aim of statesmen in framing policies is an idea which 
 no adherent of Cobdenism appears capable of grasping. 
 Rogers, in all of his discussions of the question, overlooks 
 the fact that temporary disadvantages may be removed, 
 and characterizes as an economic blunder attempts to create 
 industries by artificial methods. He says, and his views 
 are generally shared by free traders: "It will be clear 
 that if any particular industry is of such a character as to 
 be conveniently carried out by the inhabitants of a partic- 
 ular community or district, if the producer fears no rival 
 in the home market and still more if he dreads no compe- 
 tition in a foreign market, any protection aflforded to his 
 industry must be superfluous."* 
 
 When we endeavor to ascertain the meaning of such a 
 statement as this what do we find it to be? Obviously that 
 there can be no good purpose subserved by a people, let 
 us say with abundant resources of iron, attempting to estab- 
 lish a new industry in competition with one already estab- 
 lished. 
 
 In the inception of manufacturing enterprises the pro- 
 cesses are always made costly by lack of experience. The 
 beginners may borrow largely from the methods of the 
 countries in which the industry is already planted, but famil- 
 iarity with processes is necessary to develop that high de- 
 gree of skill which ultimately results in cheapness. 
 
 Clearly, then, the circumstances could not naturally arise 
 which would make it convenient — using the word in the 
 sense employed by Rogers — for a new country to start an 
 industry in opposition to those already established in older 
 countries. It would always be inconvenient for one class 
 of the community to pay more for a manufactured article 
 
 *Rogers, Article "Free Trade," Ency. Brit.
 
 152 PROTECTION AND PROGRESS 
 
 to their own countrymen than they would have to pay for 
 a similar article if brought from abroad. But no one con- 
 versant with the effects of the creation of manufacturing 
 industries in new countries will now contend that sacrifices 
 of convenience made during the infancy of an industry are 
 not abundantly rewarded by after results. 
 
 Rogers asserts that if there is no sacrifice of convenience 
 protection afforded to an industry must be superfluous. 
 This implies that he regarded the industrial condition of the 
 world at the time he wrote as fixed. He evidently believed 
 that the acquired capabilities of his own countrymen were 
 natural endowments, and that any effort on the part of 
 other peoples to reach the same degree of skill would prove 
 futile. We thus interpret him, because we can hardly sus- 
 pect him of sharing the views of McCulloch and Lord 
 Brougham concerning the omnipotence of capital and the 
 advantages derived from a good start. 
 
 Brougham and McCulloch were frank and admitted that 
 the object of the policy they advocated was to increase the 
 wealth of Great Britain, but in this place, at least, Rogers 
 endeavors to inculcate the idea that mankind generally would 
 be benefited by remaining dependent upon the British, 
 and that it would be an economic mistake to attempt to 
 create a manufacturing industry in a new country, for, 
 as already shown, it would be impossible to do so without 
 a temporary sacrifice of convenience such as the interpo- 
 sition of the barrier of a protective tariff necessarily involves. 
 
 Let us endeavor to discover by consulting the experience 
 of the United States whether mankind has been benefited 
 or injured by Americans rejecting the advice of the Man- 
 chester school and deliberately electing to submit to the 
 inconvenience of temporarily paying a higher price for arti- 
 cles manufactured at home than they would have been called 
 upon to pay for similar articles if imported from countries 
 in which manufactures were already established and in a 
 more or less flourishing condition.
 
 ECONOMY IN PROTECTION 153 
 
 In making this examination facts will be discovered which 
 bear out the assumption that protection is an enormous con- 
 servator of energy and that it has a constant tendency to 
 reduce fuel waste to a minimum by bringing the producer 
 and consumer closely together. It will also be found that 
 the rejection of the once plausible theories of Cobden by 
 the United States has, by expanding the production of arti- 
 cles of necessity, broken a practical monopoly which mili- 
 tated against the world's progress. 
 
 The history of the manufacture best adapted to illustrate 
 the benefits of the protective policy is that of iron and 
 steel. The reasons for its selection for illustrative pur- 
 poses will be manifest from the context. The early efforts 
 made to establish the industry in this country show that 
 those who engaged in it were compelled to carry on a con- 
 stant struggle against the disadvantages growing out of 
 inexperience and small means, pitted as they were against 
 large capital and the high degree of acquired abilities of 
 foreigners. 
 
 In 1840 the production of hardware in England was 
 already a leading industry. The skill of British artisans 
 was not matched by that of any other people. Superiority 
 was acknowledged on every hand, and in this country the 
 most amazing confessions of inferiority were made by tHe 
 class which later accepted as sound all the doctrines pro- 
 mulgated by the Manchester school. 
 
 It was assumed that we could not cultivate the ability 
 to produce a good quality of steel, and that we should always 
 remain dependent upon the British for supplies of that arti- 
 cle. This pessimistic mental attitude occasionally gave way 
 to a better feeling promoted by adherents of protection, but 
 the progress achieved under the stimulus of the ''American 
 idea" was never enduring in the period preceding the Civil 
 War owing to the opposition of the slave-holding class, 
 who realized that their "institution" could not survive in
 
 154 PROTECTION AND PROGRESS 
 
 the face of the development of a great free manufacturing 
 industry in this country. 
 
 Professor Rogers noted this in his contribution to the 
 Encyclopedia Britannica, in which he laid it down as a 
 general proposition "that most slave-holding countries have 
 been indifferent to protective regulations and even unfriendly 
 to them. This fact," he adds, '*is sufficiently illustrated 
 by the contrast of opinion in the Northern and Southern 
 States of the American Union before the war of secession." 
 
 It was owing to this difference of opinion, to this accep- 
 tance of the view that a present inconvenience, fancied or 
 real, was to be avoided, that the American iron mdustry 
 sible to avoid the conclusion that no matter how abijridant 
 the resources of a country may be there can be no hope of 
 their being developed unless the pioneers are artificially 
 assisted. 
 
 In 1846 the product of pig iron in the United States 
 was 756,000 tons. Between that year and 1850 the out- 
 put, owing to a change in the tariff, decreased to 564,754 
 tons. During the ten years between 1850 and i860, a period 
 when our gold mines were pouring forth their treasures, the 
 industry made no advances whatever, the production in 
 the last named year being 607,000 tons, or nearly 150,000 
 tons less than in the year 1846. 
 
 It is necessary to review facts such as these to thoroughly 
 realize the disadvantages under which the creators of an 
 iron industry in this country labored lest it be erroneously 
 assumed that its growth was a natural one. Such sweeping 
 statements as that made by Mulhall that "the production 
 of iron stone in the United States in 1840 was only 600,000 
 tons, but it rose rapidly with the construction of railways, 
 reaching 13,300,000 tons in 1889"* are apt to prove mislead- 
 ing, suggesting, as they do, an uninterrupted development. 
 
 ♦Mulhall, Industries and Wealth of Nations, 1896.
 
 ECONOMY IN PROTECTION 155 
 
 They also tend to obscure the important fact, which can 
 only be gathered by following the progress of the Ameri- 
 can iron industry year by year, and its effects on prices, 
 that the world is indebted to its creation for the destruc- 
 made no real advances prior to the Civil War. The experi- 
 ence of the United States during the period makes it impos- 
 tion of the practical monopoly enjoyed by the British in 
 this branch of manufacture. This examination can be best 
 prosecuted by noting the changes in the price of iron and 
 steel rails since 1850 and inquiring into the causes produc- 
 ing the violent fluctuations recorded. 
 
 In 1850 the railroad system of the United States was in 
 its infancy. Of the more than 180,000 miles of line in 
 existence in 1896 only a few thousand had been constructed 
 prior to the opening of the second half of the nineteenth 
 century. The discovery of gold in California in 1848, how- 
 ever, gave an impetus to railroad building, and lines were 
 projected in all the older States in the Union. 
 
 Those having the enterprises in charge were evidently in- 
 fluenced by the feeling of the time and concluded that their 
 interests would be best subserved by going abroad for their 
 supplies of rails and other material. Statesmen evidently 
 shared their views, for, as already noted, no serious effort 
 was made during the period intervening between the gold 
 discoveries and the breaking out of the Civil War to pro- 
 mote the development of iron manufacturing on our soil. 
 
 The consequences of this blunder soon made themselves 
 felt, although, singularly enough, they were not recognized 
 by the men responsible for them, who were wont to attrib- 
 ute the resulting financial collapses known as panics to 
 overspeculation rather than to the failure to encourage 
 home industry. Had this course been pursued they would 
 have avoided the mischiefs which flowed from running into 
 debt to the foreigners who dominated the world's money 
 markets and who were never slow to take advantage of the 
 difficulties of their debtors.
 
 156 PROTECTION AND PROGRESS 
 
 The price of iron rails in England in 185 1 was £9 us per 
 ton.* As soon, however, as the railroad building impulse 
 began to make itself felt in the United States the British 
 iron manufacturer, influenced by the American and a con- 
 current demand for his product in Great Britain, at once 
 advanced his prices. In 1853, under the stimulus of the 
 demand which the construction of 2,452 miles of road in 
 this country during the previous year had created, the price 
 of rails was advanced in England to £16 2s per ton. Rail- 
 road building in the United States fell off during the ensu- 
 ing two years and the British manufacturer reduced his price 
 to ii3 2s a ton. 
 
 In 1856 construction went on at an accelerated pace, 
 and the price was advanced to £13 8s. After 1856 there 
 was a period of comparative inactivity in railroad construc- 
 tion in the United States owing to the evil influence of the 
 low tariff, which left American manufacturers at the mercy 
 of their better equipped foreign rivals. It is noteworthy 
 that during this time of declining demand the British prices 
 of rails sympathized. In 1856, when we constructed 3,642 
 miles of road, rails cost £13 8s; in 1857 the construction 
 was only 2,487 miles and rails were £10 8s; in 1858, 1859 
 and i860 the constantly diminishing rate of construction 
 was followed closely by a declining Britsh rail market, the 
 price in the last named year having fallen to £10. 
 
 During the opening and first years of our Civil War rail- 
 road construction almost came to a standstill in the United 
 States. In 1861 only 686 miles were built and in 1862 834 
 miles. Ceasing to be good customers to the British, the lat- 
 ter were compelled to reduce the price of their product 
 to £8 17s in i86t and in 1862 £7 us. 
 
 In 1863, under the stimulus of the war tariff, which 
 
 ♦Mulhall, Dictionary of Statistics ; quotations are those of British 
 Iron and Steel Institute.
 
 ECONOMY IN PROTECTION 157 
 
 acted protectively, industry began to revive in the United 
 Stated. New enterprises were projected, among them sev- 
 eral railroads requiring the construction of 1,050 miles of 
 line. Immediately the price of British rails was advanced to 
 in a ton. 
 
 During 1864 and 1865 railroad activity continued in the 
 United States and the British kept advancing their prices, 
 the average being £13 2s in the latter year. In 1866 the 
 manufacture of rails was begun in the United States, and 
 although railroad construction was on a more extensive 
 scale than in the previous year the British manufacturer 
 deemed it advisable to reduce prices a trifle in order to meet 
 the new competition, the rate being ii2 15s in that year. 
 
 Between 1866 and 1870 the increasing American produc- 
 tion exerted an influence on the British price for rails, pre- 
 venting a further increase, although construction continued 
 on an enlarged scale, the miles built being 2,979 ^" 1867, 
 4,615 in 1868, and 6,078 in 1869. But the inability of our 
 manufacturers to keep pace with the demand created by a 
 construction of 7,379 miles in 1870 sent up the British price 
 in that year from £12 2s to £13, from which point it con- 
 tinued to rise until £15 14s was reached in 1872. 
 
 Before proceeding further it may be well to emphasize 
 the point that so long as the British manufacturer maintained 
 practical control of the market for iron rails he acted strictly 
 on the Cobdenistic theory of selling his wares as dearly as 
 possible. Between 1862 and 1872 the British manufacturer, 
 under the influence chiefly of the American demand for rails, 
 was enabled to more than double his price. In the first 
 named year rails sold at an average of £7 lis a ton in Eng- 
 land, and in 1872 at £15 14s. 
 
 During this interval many improvements were undoubt- 
 edly made in the processes of manufacturing, but the con- 
 sumer derived no benefit from them. On the contrary, owing 
 to the partial acceptance of the Cobden theory that mankind
 
 158 PROTECTION AND PROGRESS 
 
 would profit by making Great Britain the workshop of the 
 world, the consumers of England and the rest of the universe 
 were compelled to pay more than double for their supplies 
 of iron than they would have been called upon to pay had not 
 the aspirations of the early American protectionists been 
 checked. Had the iron manufacturing industry in the United 
 States not been paralyzed by the legislation of the slave- 
 holding class and their sympathizers, who believed that 
 because British manufacturers were at that time able to 
 produce more cheaply than any other people they would 
 always be able to do so, Cobdenism would have received its 
 coup de grace before this time. 
 
 But the illusion regarding cheapness was rapidly dis- 
 sipated after 1872. About that time it was observed that 
 as the output of our rolling mills increased the price of iron 
 and steel rails began to decrease. In 1872, when our imports 
 of rails reached 531,537 tons, the English price was £15 14s 
 a ton; with imports amounting to only 357,631 tons the rate 
 dropped to £13 6s. In 1874, owing to a great decline in rail- 
 road building, imports dwindled to 148,920 tons and the 
 price was in. When we only took 42,082 tons, as in 1875, 
 the British cheerfully accepted £8 13s a ton; and in 1878, 
 when we had practically ceased to import, the price of rails 
 in England was £6 17s. 
 
 It would be absurd to attempt to explain these advances 
 and recessions of prices by assuming that improvements of 
 processes were responsible for them. Such a hypothesis 
 is untenable and is absolutely unsupported by evidence. Nor 
 is it possible to account for them by showing the influence 
 of appreciating or depreciating money on prices. The quo- 
 tations used are all in gold terms, being derived from the 
 tables of the British Iron and Steel Association, so there 
 are no aberrations of particular curren cies to be allowed for. 
 
 The assumption sometimes ventUired that the increase 
 of the general level of prices betweeai 1850 and 1873 may
 
 ECONOMY IN PROTECTION 159 
 
 account for the changes cannot be considered for a moment, 
 as the fluctuations noted thus far were entirely within 
 the period of rising prices. To make such a hypoth- 
 esis tenable rail prices should have shown something like a 
 steady advance toward the maximum and a general corre- 
 spondence to other prices, whereas the relation of rail to other 
 prices during the years under review was abnormal, indi- 
 cating unmistakably the influence of excessive demand and 
 insufficient supply. 
 
 The experience of this country after 1878 still more 
 strikingly enforces the contention that the creation of a 
 great iron and steel industry in the United States brought 
 about the industrial emancipation of the world, and that 
 the American consumer has since been well repaid for his 
 assumed sacrifices during the period while the domestic 
 manufacture was being created and strengthened. We say 
 assumed, for it has yet to be shown that any class of Ameri- 
 cans has been called upon to make a sacrifice to achieve the 
 results we are describing. 
 
 In 1878 the United States, after suffering for several 
 years from the effects of one of the periodic trade depres- 
 sions, which were the direct outcome of the vicious habit 
 of dependence upon foreigners, began to recover, and under 
 the influence of renewed prosperity much new railroad work 
 was projected and executed. In 1877 the number of miles 
 constructed was 2,679; i" 1878 it increased to 4,817; in 1879 
 to 6,712; in 1880 to 9,847, and in 1881 to 11,569. Although 
 our production of rails steadily increased during the years 
 mentioned, rising from 781,818 tons in 1878 to 1,643,167 
 tons in 1881, the quantity turned out was insufficient to meet 
 the demand. As a consequence our imports, which had 
 fallen to 1 1 tons in 1878, were rapidly enlarged. 
 
 In 1879 we again began importing, the quantity being 
 small at first — only 2,611 tons ; but our advent in the English 
 market was the signal for an advance from £6 17s to £8 12s a
 
 i6o PROTECTION AND PROGRESS 
 
 ton. In 1880 we called upon the British for 152,791 tons, 
 and the price was increased to £10 5s. In 1881 our demand 
 was still larger, 302,304 tons being imported, but the influ- 
 ence of American production had now begun to make itself 
 felt and the British manufacturer had to be content in the 
 face of an American output of 1,304,191 tons to accept the 
 prices ruling in 1880. In 1882 our independence was prac- 
 tically achieved and our market was no longer the football 
 for British speculators, for that is what the English manu- 
 facturers of rails had become during the interval in which 
 they were enabled to raise prices whenever we wished to 
 increase our railroad facilities. 
 
 It is not necessary to follow the fl ctuations of the iron 
 and steel rail market after the year 1882. Enough details 
 have been furnished to show conclusively that when the 
 British controlled the situation they made those dependent 
 upon them for supplies of railway material pay all the 
 traffic would bear. The evidence is overwhelming that when 
 Americans were not in the market for rails prices were low 
 and that as soon as their necessities compelled them to buy 
 abroad prices were immediately raised. 
 
 This condition of affairs continued, as we have seen, 
 until the American rolling mills were capable of meeting 
 the American home demand. After that date fluctuations 
 in the price of British rails were still noticeable, but they 
 were due to the exploitation of Argentina and other coun- 
 tries. During the period of railroad building in the South 
 American republic referred to prices of rails were advanced 
 in the English market over £2 a ton, while in the United 
 States the price had a steady downward tendency. 
 
 Now that we have arrived at that stage in the manu- 
 facture of steel rails which indicates a reversal of the con- 
 ditions described when we were compelled to import from 
 Great Britain it is proper to inquire what would have been 
 the result to the United States and the rest of the world if 
 the protectionist policy had not prevailed. The informa-
 
 ECONOMY IN PROTECTION i6i 
 
 tion we require is freely furnished by foreigners. We are 
 told by the secretary of the British Iron and Steel Associa- 
 tion that the American iron and steel works are the largest 
 and best equipped in the world, and that they constitute a 
 menace to the industries of the whole of Europe. Why they 
 occupy this position he makes clear by pointing out that we 
 have unlimited quantities of ores and coal and that we are 
 quick to make use of labor-saving appliances, while the old 
 world adheres to practices which ought to be obsolete, but 
 which manufacturers are unable to get rid of owing to the 
 conservatism of the trades unions. But he lays the most 
 stress on the development of new bodies of ore. Writing 
 in December, 1897, he said : 
 
 "Perhaps, however, the more immediate cause of the in- 
 dustrial movement (in the United States) which has now 
 alarmed Europe so seriously is the recent development of the 
 new ore deposits in the Lake Superior region, which has 
 placed at the disposal of certain manufacturers raw materials 
 of exceptional richness at a price that would not have been 
 deemed possible only five years ago. Although I shall return 
 to this subject, I may here remark that according to the 
 American census of 1880 the average spot value of all the 
 ores mined in the United States in that year was 12 shillings 
 a ton, and the average of Lake Superior ores was 13s y^d 
 per ton. A dollar and a half more, or say 6 shillings per ton, 
 would be required to place these materials alongside furnaces 
 in the Pittsburg district, so that the average cost of a ton 
 of Lake Superior ore at the furnace in Pittsburg would not 
 be less than 19 shillings per ton, and the average cost of the 
 single item of or^s, per ton of iron produced, would be almost 
 as much as the total cost of producing a ton of Bessemer pig 
 iron in the same district, according to the most recent 
 figures. This cost is now considerably under the average 
 of the European, including the British, iron making centers, 
 producing the same description of iron."* 
 
 ♦Jeans, Engineering Magazine, November, 1897, Article, "Su- 
 premacy in Iron Market." 
 11
 
 i62 PROTECTION AND PROGRESS 
 
 Having this explanation before us, we need not be sur- 
 prised at the additional statement of the writer that "Great 
 Britain is now importing American pig iron, American steel 
 rails, American wire, American agricultural machinery, 
 American machine tools and mnay other American prod- 
 ucts."* Nor will anyone capable of reasoning from cause to 
 effect undertake to deny that the changed condition is wholly 
 due to the fact that Americans were willing to accept the 
 consequence of a temporary enhancement of the prices of 
 the products here discussed in order to secure the benefits of 
 future cheapness. ' 
 
 It will not be charged that this result was unexpected 
 by American protectionists, because their writings are filled 
 with predictions that their policy would have such an out- 
 come. Adherents of the Manchester school frequently in- 
 dulge in criticism of the objects of protection and protec- 
 tionists, but when their comments are compared with what 
 protectionists have really said it will be found that they are 
 attacking ideas falsely attributed by them to the advocates of 
 a protective tariff, and not utterances of those who may 
 justly be regarded as true exponents of the system. These 
 latter have always maintained that the multiplication of in- 
 dustries throughout the world would redound to the benefit 
 of mankind, and their chief objection to the policy of Cob- 
 denism was that the prevention of the development of the 
 world's resources would create a practical monopoly which 
 would result in permanent dearness. 
 
 There is no doubt that this theory is sound. The ex- 
 traordinary changes effected by the entrance of great protec- 
 tionist nations into the world's markets clearly establish 
 this. The relatively slow development of the iron industry 
 which marked the period preceding the rejection of Cob- 
 
 * Jeans, Engineering Magazine, November, 1897, Article, "Su- 
 premacy in Iron Market."
 
 ECONOMY IN PROTECTION 163 
 
 denism by the people of the United States must have con- 
 tinued for a long time had this country and Germany 
 neglected to make the best of their resources. It has only 
 been since immense iron and steel plants were created in the 
 United States and Germany that the world's consumption 
 of those metals has shown a marked tendency to increase, 
 and the price lists of the two periods — that during which 
 England held the market and that since competition in pro- 
 tective countries became effective — tell why the promises of 
 cheapness made by the free traders would have to come to 
 naught had Great Britain been able to maintain her suprem- 
 acy in this and other lines of manufacturing industry. 
 
 It will assist us to understand what might have happened 
 if American competition had not been promoted by protection 
 if we note that Great Britain now finds it necessary to import 
 from Spain over 5,000,000 tons of iron ore annually to main- 
 tain her present rate of pig iron production. There is but one 
 construction that can be fairly placed upon this action of 
 resorting to a foreign country for the supply of a raw ma- 
 terial, the abundance of the domestic supply of which in the 
 early decades of the nineteenth century was supposed to 
 assure British supremacy, and that is that the cost of produc- 
 ing ores has become so great in the United Kingdom that 
 many of the mines of that country can no longer be worked 
 as profitably as formerly. 
 
 If the depletion of the British supply has been thus 
 rapid, even in the face of the diminished demand for English 
 iron brought about by the creation of great iron manufac- 
 turing industries in such protectionist countries as the United 
 States and Germany, what would have been the result had 
 the world continued to depend as largely upon Great Britain 
 for its supplies of manufactures of iron as it did during the 
 decade between 1840 and 1850? 
 
 To realize the full import of this inquiry we must turn 
 to the figures showing the relative production of iron in
 
 i64 PROTECTION AND PROGRESS 
 
 1840 of the western nations of the world and compare them 
 with those of a more recent date. For convenience, and in 
 order to adhere to free trade authorities as closely as possi- 
 ble, the statistics of Mulhall are still resorted to. His tables 
 show that the total product of pig iron in 1840 was 2,680,000 
 tons, of which quantity Great Britain produced more than 
 one-half, her output being 1,390,000 tons. In the same year 
 the product of the United States was 290,000 tons, that of 
 Germany 170,000, and the remaining nations are credited 
 with having produced 830,000 tons. 
 
 At this time there was no question about the supremacy of 
 the British in this field of manufacture. No people on the 
 globe could produce iron in competition with Great Britain 
 or fashion articles from that product so cheaply as the 
 English. The disparity in the performances of the people 
 of Great Britain and those of other countries was so great 
 that it gave birth to the belief, since proved fallacious, that 
 nature had endowed the British with such resources of coal 
 and iron and with a skill to work them surpassing that of the 
 workmen of other nations. That belief, as we have already 
 shown, was for many years accepted even by peoples whose 
 interests were subsequently advanced by rejecting it, but 
 who, if the teachings of theorists rather than the promptings 
 of common sense had been followed by them, might still be 
 dependent upon Great Britain for their supplies of iron. 
 
 What the consequences to the world might have been had 
 Americans and others not proved incredulous may be in- 
 ferred from a comparison of the figures of production of iron 
 in 1840 and 1893, fifty-four years after the date when Brit- 
 ish supremacy was universally acknowledged. In 1893 the 
 world's output of iron was reckoned at 26,oio,oootons, or ten- 
 fold the quantity produced in 1840. During the period Great 
 Britain made much progress, but it would be irrational to as- 
 sume that she would have reached the rate of production she 
 has since attained without the stimulus of the rivalry created
 
 ECONOMY IN PROTECTION 165 
 
 by the protection policy. But for purposes of argument we 
 may admit that her rate of production might have been 
 maintained. If we do we shall have to ask what would have 
 been the result if the United Kingdom had increased the 
 output from her mines to such an extent that she would be 
 able to supply a quantity of iron equal to one-half of the 
 world's demand of today as she did in 1840? 
 
 The obvious answer is that the depletion of England's 
 mines at such a rate would have so diminished her stores of 
 ores that they could only have been mined at a constantly 
 increasing cost. If the demand of the rest of the world for 
 British iron amounted to over 13,000,000 tons yearly it 
 could only be met by a sacrifice, which producer and 
 consumer would have to make jointly, the former by bring- 
 ing his country nearer to the verge of dependence upon for- 
 eigners for this absolutely essential raw material and the 
 latter by being compelled to pay a constantly increasing price 
 for such iron as he desired to use. 
 
 Nor would these be the only evils. Had Great Britain 
 been permitted to denude herself of her iron ores for the 
 purpose of supplying the rest of the world with manufac- 
 tures of iron at such a rate as would have been necessary to 
 keep pace with the modern increase of consumption, there 
 would have been an accompanying depletion of her supplies 
 of coal, which would have been encroached upon to smelt 
 the raw material and to provide the power to fashion the 
 same into finished articles. Additional demands would have 
 been made upon her fuel supplies to provide the ships carry- 
 ing the manufactured articles to different parts of the globe, 
 and there would be added to this improvidence the waste of 
 manual energy implied in transporting such products to 
 countries fully competent to provide themselves with iron 
 and articles manufactured therefrom. 
 
 Obviously this process of denudation of the supplies of 
 the raw material iron and of the coal of Great Britain must
 
 i66 PROTECTION AND PROGRESS 
 
 have proceeded until her exhaustion was nearly complete if 
 the world had implicitly accepted the teachings of Cobden- 
 ism, for every added year of experience must have more 
 thoroughly intrenched the British manufacturer and made 
 the task of rivaling him more and more hopeless. Then 
 when the time arrived that the iron ores of the United 
 Kingdom could no longer be worked the British manu- 
 facturer would have resorted to other countries for his 
 supplies of iron and fuel. This would, of course, have 
 accelerated the process of wastefulness, for whereas while 
 Great Britain was well provided with iron ores and coal she 
 merely wasted fuel and energy in shipping finished articles 
 to foreign countries, under the new conditions she would 
 have been compelled to uselessly expend tremendous quan- 
 tities of fuel and energy in bringing to Great Britain the 
 raw materials necessary to continue her iron and steel 
 manufacturing industry. 
 
 It may be argued that sane men would not proceed so 
 irrationally for any great length of time and that true 
 economy would compel the adoption of a remedy long before 
 the disease had become fatal. But there is no ground for 
 such an assumption. That relief might be obtained by 
 abandonment of the system of wastefulness is nowhere 
 suggested in any of the writings of the followers of Cobden. 
 On the contrary, the teachings of the Manchester school all 
 tend to the formation of the opinion that man is in some 
 way benefited by useless work. 
 
 When wasteful politicians, in order to provide followers 
 with employment, project unnecessary enterprises a great 
 clamor arises, but no free trader lifts his voice in deprecation 
 of the superfluous expenditure of energy involved in the 
 deportation of raw materials and food stuffs from countries 
 in which they could be worked up and consumed with as 
 much profit as in the lands to which they are carried. It 
 will be admitted, however, that the consequences of the
 
 ECONOMY IN PROTECTION 167 
 
 first named evil are infinitesimal by comparison with the 
 latter. 
 
 Instead of pointing out the waste resulting from this 
 course and deploring it economists of the Cobden type ad- 
 miringly cite the enormous earnings of the carrying trade 
 and indulge in platitudes about the advantages derived from 
 free intercourse betvi^een nations. It is as though an econo- 
 mist should applaud as a great achievement the trundling 
 back and forth of the same load of bricks, a task which the 
 Philadelphia millionaire Girard is said to have imposed upon 
 an apphcant for charity, a job which the self-respecting 
 pauper refused to perform on the ground that he would be 
 working to no purpose. 
 
 It may be safely concluded that if Cobdenism had flour- 
 ished the blunder of separating field from factory would have 
 continued indefinitely, but the depletion of Great Britain's 
 resources of iron and fuel would not have proceeded at any 
 such rate as that suggested in the foregoing illustration. On 
 the contrary, it may reasonably be assumed that the effect of 
 the system would have been more in the direction of repres- 
 sion of consumption than expansion. The lesson taught by the 
 experience of the United States in railroad building is that 
 while Great Britain retained practical control of the world's 
 iron and steel industry the tendency to meet an increasing de- 
 mand with rising prices was always present, and that its 
 effect was to greatly restrict consumption. The painfully 
 slow growth of consumption in the United States during the 
 years previous to the expansion of the home iron and steel 
 industry furnishes irrefragible proof that this country, at 
 least, was a great sufferer from the evil effects of long 
 distance transportation of things which might have been 
 produced within our own borders. 
 
 When we turn to the records which tell the story of the 
 growth of a general manufacturing industry in the United 
 States we find abundant further confirmation of the doctrine
 
 i68 PROTECTION AND PROGRESS 
 
 that bringing producer and consumer closely together re- 
 sults in great saving. There is no disposition to assert 
 that protection entirely eradicates the economic evil of waste 
 of energy and fuel heretofore dwelt upon, but the proof is 
 overwhelming that it mitigates it enormously. 
 
 There is primarily to be placed to the credit of protec- 
 tion the saving effected by dispensing with the unnecessary 
 carriage of such raw materials as cotton to the other side of 
 the Atlantic to be fashioned into articles for wear in this 
 country, and of the additional food supplies which would be 
 required by foreign operatives if they were permitted to 
 enjoy the monopoly of providing manufactured articles for 
 the inhabitants of new countries. How great an economy 
 this is can only be determined by reckoning what it would 
 have cost the United States for transportation if its growing 
 population had continued dependent upon Europe for sup- 
 plies of manufactured articles. As it is, with an external 
 trade which approximates the rational, millions are unneces-. 
 sarily expended every year and fabulous quantities of coal 
 are uselessly consumed in the unnecessary hauling to and 
 fro of commodities. 
 
 While protection does not completely eliminate waste, 
 its tendencies are always in that direction. It has been 
 noted by Mulhall that "more than three-fourths of the 
 world's steam power is employed for traction purposes on 
 railways and in steamboats," and that in the United States 
 "the average energy is 1,940 foot tons daily per inhabitant, 
 which is more than double the European average."* This 
 undoubtedly embraces an enormous proportion of waste, but 
 the same author, in his analysis of the census of 1890, 
 shows how rapidly the factor of misdirected energy is being 
 diminished. 
 
 On this point he says : "The rapid growth of population 
 
 ♦Mulhall, Industries and Wealth of Nations, 1896.
 
 ECONOMY IN PROTECTION 169 
 
 has caused a shifting of equiHbrium in the occupations of the 
 people (of the United States). Thus in 1850 the Prairie 
 States had only one factory operative to seven farming 
 hands, whereas in 1890 the figures stand relatively as five to 
 eleven. The census returns of manufactures in 1850 and 
 1890 showed thus: 
 
 No. of Operatives. Million dollars. Per operative, Dollar 
 
 Wages. Product. Wages. Product. 
 
 1850 111,000 30 147 270 1324 
 
 1890 1,407,000 672 3161 478 2247 
 
 To this Mulhall adds : "In 1890 the Prairie States pro- 
 duced 34,000,000 tons of coal, chiefly from Illinois and Ohio, 
 and 8,000,000 tons of iron ore, mostly from Michigan," and 
 that the total mining output was valued at $183,000,000.* 
 
 Although our authority emphasizes the statement that 
 "food and lumber constitute the principal manufactures of 
 the Prairie States," and refers to the fact that "the produc- 
 tion of hardware is not quite sufficient for their requirements, 
 and that of textiles so small that they are obtained almost 
 wholly from New England," the fact is not obscured that a 
 great revolution has been effected by the introduction of 
 manufactures into a region a thousand miles or more from 
 the Atlantic seaboard, and of course that much further from 
 what would have been the source of supply for millions of 
 Americans had the Cobden idea of making England the 
 world's workshop prevailed. 
 
 In the center of the region embracing the Prairie States 
 are now situated some of the largest and most completely 
 equipped rolling mills in the world, and at their very doors 
 are illimitable supplies of fuel and mines of iron ores surpass- 
 ing in richness those of any country on the globe. Is it 
 possible to assume that the failure to develop these vast 
 
 *Mulhall, Progress of United States, North American Review, 
 August, 1897.
 
 lyo PROTECTION AND PROGRESS 
 
 industries by the side, or rather in the midst, of the fertile 
 agricultural region comprised in the Prairie States would 
 have inured to the benefit of the American people and 
 the rest of mankind ? No one would now venture to answer 
 this question in the affirmative, but not many years ago the 
 farmers of the Prairie States, who are now benefiting by the 
 proximity of great workshops, were told by Cobdenites that 
 their best interests would be subserved by sending their 
 products four thousand miles to feed workingmen engaged 
 in fashioning articles which are now made at their doors. 
 
 The experience of the Prairie States is by no means 
 unique. The South also affords an illustration of the ten- 
 dency of protection to obviate the waste of fuel and energy 
 due to unnecessary transportation. A great iron industry 
 has recently been created in that region, the productions 
 of which rival those of other sections of the Union. The 
 iron of Alabama is already finding its way in the form of 
 steel rails and other advanced forms to foreign countries, 
 although the major part of it is consumed in the territory 
 adjacent to the rich deposits of ores and coal. 
 
 Contemporaneously with the development of the South- 
 ern iron industry there has been an expansion of the business 
 of cotton spinning and weaving in many of the States which 
 were once wedded to the idea that the true interests of the 
 planter of the South required that the raw cotton should 
 be shipped to England, there to be converted into fabrics 
 suitable for consumption in the cotton growing belt. Now 
 that factories are multiplying throughout the region once 
 noted for the poverty of its resources, industry is becoming 
 diversified and the Southern States are actually becoming 
 self-dependent. 
 
 These developments, which have been made possible 
 through the adoption of a protective system by the United 
 States, might not have taken place for centuries to come, 
 perhaps they never could have occurred, had Cobdenism
 
 ECONOMY IN PROTECTION 171 
 
 prevailed. An English economist who has given the ques- 
 tion of the transference of capital much study and who 
 has pointed out how difficult it is, even within the limits of 
 a nation where the conditions of taxation, mode of living 
 and other things are nearly alike, to move an established in- 
 dustry to a part of the country more favorably situated 
 naturally, expresses the view that infinitely more difficulty 
 attends their transference from one country to another.* He 
 implies that the natural advantages of foreign countries, 
 even when their exploitation is encouraged by bounties and 
 other artificial means, are not nearly so attractive as the 
 immediate benefits derived from an established position in an 
 already developed country. He points out that while "capital 
 and labor may gradually be exported," and an "industry may 
 pine and dwindle away under adverse conditions, the result 
 being that at the end of a certain period there will be 
 within the country less labor and capital, and possibly also 
 less consuming power per unit of population" than formerly, 
 there is a constant struggle against the inevitable which has 
 a tendency to keep alive unprofitable industries long after 
 the hopelessness of the contest is recognized. 
 
 If this is the case, and our experience teaches us that it 
 is, it is only rational to assume that the advantages of accum- 
 ulated capital and acquired abilities in old countries where 
 industries are well established are so great that it would be 
 impossible for a new country to develop its resources in the 
 face of unrestricted competition. Therefore, true economy, 
 that which considers the future as well as the present, de- 
 mands that means be adopted by new countries to nullify 
 the artificial advantages enjoyed by older nations so that 
 there may be something like a uniform development of the 
 world's resources, and not a one-sided one which would 
 
 *Mulhall, Progress of United States, North American Review, 
 August, Nicholson, Principles of Political Economy, Vol. ii, p. 71.
 
 172 PROTECTION AND PROGRESS 
 
 permanently impose upon mankind the present wasteful 
 system which involves the unnecessary carrying to and fro 
 of materials and the speedy destruction of the world's great 
 source of energy and heat.
 
 CHAPTER IX. 
 
 INTERNAL TRADE. 
 
 OVERSHADOWING IMPORTANCE OF DOMESTIC PRODUCTION AND 
 EXCHANGE. 
 
 Protection promotes the filling of the national industrial reservoir — 
 Effects of the creation of domestic industries — The main object 
 of all exertion is the meeting of domestic needs — Internal trade 
 of prime importance — External trade analogous to the waste 
 that escapes from a reservoir — England's home market twice 
 as great as her foreign trade — Why England's imports are 
 larger than those of the United States — Dependent and inde- 
 pendent countries — Free trade policy requires artificial backing 
 — The American home market — Imports of the United States 
 small because we do not need to draw upon foreigners — What 
 would have happened had the colonies taken Adam Smith's 
 advice — Purposes of the British — Mercantile system really the 
 present British commercial system — Effects of colonial depend- 
 ence — Poverty in the days before the United States had a diver- 
 sified industry — The struggle for American liberty a struggle 
 for commercial independence — Rapid filling of the industrial 
 reservoir after i860 — Wealth created in the United States more 
 rapidly than elsewhere. 
 
 In discussing the singular hallucination of the free trade 
 theorists that the greatest material benefit a people can derive 
 is that which is supposed to flow from an expanding external 
 trade, frequent allusions were made to the value of the home 
 market and to the vast economies effected by bringing field 
 and factory together. In this chapter an effort will be made 
 to show that the internal trade of a country, in the nature of 
 things, will always be its most important trade, and that 
 under any rational system of economics external trade must 
 
 173
 
 174 PROTECTION AND PROGRESS 
 
 be relegated to the second place and become, as it were, 
 merely an incident of national progress. 
 
 Although the Cobdenites habitually ignore this truism 
 when dwelling upon the importance of the interdependence 
 of nations and seek to make it appear that only foreign 
 trade is profitable, statisticians, even when they make their 
 home in Great Britain, are betrayed into admitting the fact 
 that what is derisively referred to by free traders as the 
 "home market" is infinitely more important to a people with 
 great resources than the ability to exchange goods with 
 foreigners. 
 
 That a contrary opinion should ever have arisen seems 
 to be solely due to false causation. Observing the fact that 
 countries having large quantities of articles to spare for 
 export were prosperous, it has been assumed that the act 
 of exportation caused the prosperity. It is as though one 
 should say that the surplus flowing over the dam of a 
 reservoir was of more consequence than the main body 
 which supplies the power to run countless machines or 
 furnishes the water for the inhabitants of a large city. The 
 overflow may be utilized in some fashion, but obviously the 
 most important feature of a reservoir is the accomplishment 
 of the primary purpose of filling it so that sufficient water 
 will be provided to carry out certain designs. If the dam 
 achieves more than this result it may be reckoned as addi- 
 tional gain, but such gain will necessarily seem insignificant 
 compared with the returns from the proper utilization of 
 the imprisoned water. That this analogy is not a forced one 
 will be seen when we compare the internal with the external 
 trades of several of the leading nations of the world. 
 
 According to Mulhall "internal trade is the real trade of 
 a country comprising the total value of agricultural, manu- 
 facturing and mining products handled by the people, and 
 the value of imported goods consumed." Accepting this 
 definition, and using Great Britain, a country of com- 
 paratively limited resources, as an illustration, we find that
 
 INTERNAL TRADE 175 
 
 the British home trade vastly exceeds the external trade of 
 the nation. In 1894 the total internal trade of the Unfted 
 Kingdom was reckoned at £1,610,000,000, made up as fol- 
 lows: Agriculture, £230,000,000; manufactures, £876,000,- 
 000; mining, £78,000,000; forestry, etc., £9,000,000, and 
 imports, £417,000,000. In the same year the imports and 
 exports aggregated £703,000,000, the proportion of exports 
 being £286,000,000. 
 
 Here we can see that even in the case of a country con- 
 ditioned as Great Britain is the home trade is more than 
 double the foreign trade. When we resort to comparisons 
 we find that although the United Kingdom has subordinated 
 every other industry to those of manufacturing and mining 
 the home consumption of manufactured and mineral products 
 is enormously in excess of the exports of manufactured 
 articles and minerals. Assuming that the exports of Great 
 Britain in 1894 were wholly composed of manufactured 
 articles and minerals, a comparison will show that the 
 domestic takings were more than three times as large as the 
 total exports. Thus we see that even in England the prime 
 object is to supply the home demand, and that the export 
 trade, as in the case of the reservoir illustration, merely 
 represents the overflow. 
 
 But if we desire a more convincing illustration of the 
 value of the home market we must direct our attention to 
 a country where the conditions as to natural resources are 
 better than those of Great Britain. Such a country should 
 be one whose area is great enough and its soil sufficiently 
 fertile to produce all the food required by a teeming popu- 
 lation, and whose fields, in addition, would be broad enough 
 to produce the fibers and other raw materials to maintain a 
 manufacturing industry ; while beneath the earth would have 
 to be vast mineral resources, including abundant stores of 
 fuel for the creation of energy and to provide warmth. 
 
 There are several countries which meet this description, 
 and pre-eminent among them is the United States. Its
 
 176 PROTECTION AND PROGRESS 
 
 agricultural and mineral resources appear to be boundless. 
 They are so varied in their character and so extensive that 
 the nation might work out its own destiny without drawing 
 upon the outside world. It produces within its borders 
 nearly everything useful to man. The list of its productions 
 embraces a large proportion of those articles in which Great 
 Britain is deficient. An examination of the tables of British 
 imports shows that they are made up in great part of those 
 things which Americans produce in excess of their needs. 
 Cattle, grain and flour, raw cotton, sheep and lambs, dead 
 meat, butter and margarine, wood and timber, oils, seeds, 
 fruits and hops, currants and raisins, wine, cheese, copper 
 ore, lead, eggs and tobacco are among the leading British 
 imports. In our tables of external trade they appear as 
 articles of export. In addition to these, Great Britain also 
 draws upon foreign countries for wool, sugar, flax, hemp 
 and jute, iron ore and zinc, all of which we can and undoubt- 
 edly will produce in sufficiently large quantities in the near 
 future to meet the home demand and perhaps a surplus for 
 export. 
 
 In another place, when the question What constitutes 
 an exotic industry? is discussed, it will be shown thai none 
 of these articles meet with any impediment to their profitable 
 production in the United States, whereas Great Britain is 
 by climatic and other natural obstacles debarred from provid- 
 ing herself with them in large enough quantities to meet the 
 needs of her population without drawing upon the foreigner. 
 Here this peculiarity is referred to merely to emphasize the 
 fact that there is an essential difference in the productive 
 capabilities of Great Britain and the United States. But 
 it is not of that character which the Cobdenites have errone- 
 ously assumed exists, for while it may be true that nature 
 has acted in a one-sided manner with some nations, as in the 
 case of England, which we have seen is deficient in many 
 natural productions, there are other nations where no such 
 deficiency is noticeable, and they must therefore be regarded
 
 INTERNAL TRADE 177 
 
 as having superior natural advantages which, when joined 
 with acquired capabilities, must ultimately result in com- 
 mercial and manufacturing superiority. 
 
 Consciously or unconsciously, the adherents of the Man- 
 chester school have by their teachings obscured this vital 
 fact. A large part of mankind has been induced to believe 
 that it is true economy to transfer to the less favored coun- 
 tries the profits and advantages which the more favored 
 may enjoy if they feel so disposed. Singularly enough, they 
 have succeeded in strengthening this belief by parading 
 * British dependency as an advantage. All free traders habit- 
 ually dwell with pride on the vast proportions of the imports 
 of Great Britain, and many assume that they triumphantly 
 establish the soundness of the theories advanced by the 
 Manchester school. Some there are, however, who are 
 beginning to regard with alarm the ever increasing depend- 
 ence of the United Kingdom and are no longer disposed to 
 regard it as a commercial advantage. 
 
 One of these latter, commenting on the singular halluci- 
 nation that the less a people have to sell in proportion to 
 what they are compelled to buy the more prosperous they are 
 likely to become, says : "Sir Courtenay Boyle is evidently 
 inclined to draw comfort from the fact that when the imports 
 and the exports are calculated for the different countries, 
 per head of population, the United Kingdom stands far 
 ahead of its rivals in trade. * * * This superiority in 
 the value of exports and imports per head does not signify 
 that we are more prosperous than other countries and is 
 rather a misleading return. The United States and Germany 
 both produce a very large proportion of their own food 
 supply, while Germany has for some years practically sup- 
 plied the whole of her home demand for manufactured 
 goods and the United States is following in her footsteps 
 in this respect. The United Kingdom produces a very small 
 proportion of its food requirements * * * and has 
 
 ceased to supply the whole demand for manufactured goods,. 
 12
 
 178 PROTECTION AND PROGRESS 
 
 The value of the imports for the latter country are, therefore, 
 much greater than the corresponding figures for the two for- 
 mer ; and the difference is not a measure of greater commer- 
 cial prosperity, but of our greater dependence upon foreign 
 trade."'-^ 
 
 It is hardly possible to dissent from this view, and even 
 free traders shrink from doing so when the matter is pre- 
 sented in concrete form. When they are confronted with the 
 possibility of a conflict with foreign powers and recognize 
 the straits in which their country may be placed through 
 insufficiency of food supplies or by being deprived of the 
 necessary raw materials for the successful prosecution* of 
 their manufacturing industries, they assent to a policy of 
 extraordinary taxation to avert the consequences of a false 
 economic policy. Their statesmen call expenditures made 
 for this purpose provision for the national defense, but this 
 is juggling with phrases. The money expended to keep open 
 English communication with the outside world so as to avert 
 the possibility of starvation or the interruption of British 
 manufacturing is as unmistakably an artificial help to indus- 
 tries which would otherwise utterly fail as an appropriation 
 made by a protectionist country for the encouragement of 
 beet sugar manufacture, or a tariff levied for protective 
 purposes. 
 
 While free traders can thus easily be persuaded to indi- 
 rectly adopt protective measures for the preservation of 
 their external trade, and justify the enormous expenditures 
 for so-called defensive purposes by pointing to the magnitude 
 of their dealings with foreigners and the profits derived 
 therefrom, they appear utterly incapable of perceiving that 
 a similar policy applied to the promotion of internal trade in 
 the United States has accomplished infinitely greater com- 
 mercial results without incurring the loss of energy and 
 waste of energy and fuel which an unnecessary external 
 
 ♦Kershaw, Future of British Trade, Fortnightly, November, 1897.
 
 INTERNAL TRADE 179 
 
 trade entails. Free traders also shut their eyes to the fact 
 that the creation of a manufacturing industry averts the 
 danger to which a dependent nation is always subject. 
 While it is inconceivable that a country with resources as 
 vast as those of the United States could ever suffer for want 
 of food because of the action of external enemies, it is easy 
 to comprehend that if it had neglected to establish manufac- 
 tures and had assumed the role of a mere producer of food 
 supplies and raw materials mapped out for it by Cobdenites 
 its people would be as greatly hampered in case of foreign 
 aggression for want of manufactured articles as were those 
 of the Confederate States while the Civil War was in 
 progress. 
 
 Let us see whether this assertion can be made good by 
 a resort to the figures showing the growth and extent of the 
 home market of the United States. Still retaining Mulhall 
 for our guide we find that in 1894 the internal trade of the 
 United States amounted to £3,125,000,000 — nearly double 
 that of the United Kingdom in the same year. According 
 to the authority we are following it was made up as follows : 
 Agricultural products, £813,000,000; manufactures, £1,952,- 
 000,000; products of forestry and fisheries, £130,000,000; 
 mineral products, £94,000,000; imports, £136,000,000. 
 
 These figures Mr. Mulhall tells us represent a tenfold in- 
 crease since 1840, the internal trade of that year aggregating 
 only £318,000,000 sterling. The year 1894 was not a favor- 
 able one for comparison, as a widespread depression had 
 prostrated industry throughout the whole country. It is 
 not improbable that the figures of 1900 will show a fifteen- 
 fold increase; those of 1892, had they been employed, would 
 have exhibited at least a twelvefold advance over 1840. But 
 Mulhall's data are sufficiently striking, and protectionists will 
 not object to their use for comparative purposes or for 
 analysis. 
 
 The most conspicuous fact disclosed by Mulhall's com- 
 parison is that the proportion of imports in this enormous
 
 i8o PROTECTION AND PROGRESS 
 
 American home trade is comparatively insignificant, repre- 
 senting only one-twenty-third of the whole, whereas the 
 proportion of British imports to the whole trade of the 
 United Kingdom is more than one-fourth. In the United 
 States the volume of internal trade in 1894 was nearly ten 
 times as great as that of the foreign trade of the country; 
 Great Britain's internal trade in the same year was not much 
 more than twice as large as the volume of her exports and 
 imports. 
 
 As has been suggested in another place, the extent and 
 importance of the British external trade is responsible for 
 the confusion which undoubtedly exists in many minds 
 regarding the respective values of home and foreign trade. 
 It would hardly be just to charge that all free traders speak 
 with contempt of the former, for there are some who recog- 
 nize that the prime object of barter, even in its most highly 
 developed form, is the sustenance of peoples, and that the 
 system which accomplishes this most successfully must be 
 the best. But by far the larger portion of the followers of 
 Cobden share in the vulgar error that only foreign trade is 
 profitable, and that the internal trade of a country is as 
 profitless as the swapping of jackknives by boys. It is a 
 curious attitude for those who have criticised the mercan- 
 tilists to assume, and suggests the applicability to the free 
 trader of the scriptural injunction to remove the mote from 
 his own eye before attempting to extract the beam from his 
 brother's. 
 
 The free trader urges that the increase of the national 
 wealth should be the object of an economic policy, and the 
 protectionist agrees with him, but the former contends 
 that the result can be most easily achieved by what may be 
 termed a system of concentration, while the latter urges that 
 concentration, if carried too far, must result in wastefulness, 
 and that the best economic policy is that of diffusion. The 
 free trade idea is concretely expressed in the declared in- 
 tention of the British followers of Cobden to make Great
 
 INTERNAL TRADE i8i 
 
 Britain the workshop of the world ; the protectionist view is 
 clearly brought out in the assertion that it is the part of 
 wisdom to bring field and factory together. 
 
 Force of circumstances molded British opinion. It is 
 impossible to conceive the philosophers of a country 
 adequately provided with supplies of food and raw material 
 formulating theories resembling those advanced by Cob- 
 den. Had the original seat of British industry been in such 
 a country as Russia or the United States, or were it impos- 
 sible for intellect to assert itself within the confines of a small 
 island, there would have been no false economic doctrines 
 taught. Men would not have urged that unnecessary trans- 
 portation results in saving, or that it is wise to develop the 
 capabilities of one set of people and to hinder the advance- 
 ment of others by depriving them of the benefits flowing from 
 a many-sided development. If the nations of the world 
 were equally favored with resources growth would have 
 proceeded along natural lines, just such lines as those now 
 pursued by the United States. 
 
 Back of the barrier of protection which had to be reared 
 to permit the nation to enter upon its career of prosperity 
 the United States is working out its destiny more economic- 
 ally than Britain, as the presentation of facts concerning 
 existing conditions will show. The sequel will demonstrate 
 the truth of this assertion so impressively that not a single 
 voice will be lifted in advocacy of a system which does vio- 
 lence to the term economic, and which could only have suc- 
 ceeded by retarding the progress of the whole of mankind, 
 including even those who selfishly imagined that they could 
 benefit at the expense of the rest of the world. 
 
 The growth of internal trade of the United States, which 
 keeps pace with the great increase of population, conclusively 
 proves the wisdom of making temporary sacrifices to reach a 
 stage of practical industrial independence. The economic 
 policy adopted by the Americans in some respects resembles 
 that of a pioneer in a country covered with marketable
 
 i82 PROTECTION AND PROGRESS 
 
 timber, who makes the proceeds of his clearing operations 
 maintain him in comfort while he is creating a farm from 
 which to derive a future livelihood. His labors might have 
 proved more profitable temporarily if he had devoted him- 
 self wholly to "lumbering," proceeding from one tract of 
 land to another as rapidly as he had stripped the ground of 
 its more valuable timber, but in the end he would have been 
 poorer, for he would have left behind him a practically 
 valueless country incapable of supporting a man with civil- 
 ized wants. Is there anyone who will claim that the method 
 of the prudent pioneer is not more beneficial to mankind in 
 the long run than that of the timber stripper? The latter 
 may flourish for a time, but the man who has cleared a strip 
 of land and put it into condition for cultivation at the 
 expense of a small sacrifice of energy — and evert this may 
 have been unnecessary if he had an opportunity to judi- 
 ciously dispose of his timber — has created a farm from 
 which he and his descendants may derive a perpetual reve- 
 nue. 
 
 Applying our illustration to the operations of a whole 
 people, such as that which was planted during the colonial 
 period in the regions now comprising the United States, we 
 find that the pursuit of the system advocated by the Cobden- 
 ites would have proved as disastrous to the country as timber 
 stripping. It was the chief aim of those who established 
 plantations in America in the colonial days to derive sup- 
 plies of raw material from them to be worked up into man- 
 ufactured articles in England. At the time of the settlement 
 of Virginia the English were suffering severely from the 
 diminution of their fuel supply, which threatened the 
 destruction of their iron industry. That was before they 
 discovered that coal would prove a desirable substitute for 
 wood to generate heat for smelting ores. Accordingly, the 
 scheme of opening up the Virginian ore deposits was devised. 
 It never proved successful because of the subsequent use 
 of coal in England, but it may readily be inferred what the
 
 INTERNAL TRADE 183 
 
 consequences might have been if the fortunate discovery 
 that coal would serve as well as charcoal for converting 
 the ores into pigs had not been made. Virginia in that event 
 might have enjoyed a temporary prosperity, but the lands in 
 the vicinity of her mines would have been denuded of their 
 timber and the earth would have been robbed of its mineral 
 stores for the benefit of people living in distant lands. 
 
 When iron mining, owing to the circumstances related, 
 proved unprofitable, the industry of the Virginia colonists 
 was forced into a fresh channel which held out no greater 
 hopes of permanent benefit to those desirous of making a 
 home in the new country than the smelting of ores. The 
 attention of the settlers was wholly confined to the cultiva- 
 tion of tobacco. An American historian tells us that the 
 effect of this exclusive devotion to a single product "defeated 
 one of the leading purposes for which the colony was 
 founded ; that is to say, Virginia failed to furnish England 
 with the commodities which she had been importing from 
 Russia, Sweden, Holland, France, Spain, and the East."* 
 
 It is not difficult to perceive why the hopes of the pro- 
 jectors of the colonies and the British people were disap- 
 pointed. The concentration of the energies of the Virginia 
 colonists on the production of a single staple article, no mat- 
 ter how profitable it may have been, was responsible for the 
 failure. Had the colonists been encouraged to diversify the 
 industries of the plantations the hoped-for results might 
 have been attained. But such a policy was undreamed of in 
 that day. The English of the period were as eager as those 
 of the nineteenth century to absorb all the profits of manu- 
 facture. It is sometimes charged that the repressive methods 
 adopted to prevent the growth of manufactures in the colo- 
 nies was due to the jealousy engendered by the teachings of 
 the mercantilists, but a more candid explanation is that which 
 admits that it was inspired by the always present desire of the 
 
 ♦Bruce, Economic History of Virginia in Seventeenth Century, 
 Vol. II, p. 393.
 
 i84 PROTECTION AND PROGRESS 
 
 British to discourage human energy in other lands when it 
 threatens to miHtate against the development of the re- 
 sources of Great Britain. 
 
 A critical examination of the aims of seventeenth and 
 eighteenth century Englishmen discloses that they were 
 nearly the same as those advocated later by the Manchester 
 school. They were, in brief, to induce, if possible, the rest 
 of the world to devote itself to the production of raw ma- 
 terials and of such articles as the British Islands were inca- 
 pable of producing, and leave to the English the congenial 
 and profitable task of manufacturing for the whole of man- 
 kind. The only essential difference between the earlier and 
 later policies was that before the Americans achieved their 
 independence it was possible for the English to forcibly im- 
 pose their views on colonists, whereas afterwards they were 
 obliged to present arguments calculated to convince the 
 people living in undeveloped countries that their most prof- 
 itable course would be to devote themselves to the pursuit 
 of industries which would not bring them into collision with 
 those already established in the United Kingdom. 
 
 There is no question about the purposes and methods of 
 the British in the colonies during the revolutionary period. 
 We have seen that at the very outset the design was to ex- 
 ploit the mineral wealth of a section which is now one of 
 the most densely populated parts of the United States. In" 
 the pursuit of this object the British did not shrink from 
 the destruction of the forests of the new country. In their 
 attempts to secure the supplies of iron necessary to carry 
 on their manufacturing industries they did not hesitate to 
 adopt methods calculated to permanently impair the utility 
 of the country. When they were diverted from this purpose 
 by the discovery that coal would answer better than wood 
 for smelting purposes they turned their attention in the Vir- 
 ginia plantation to the production of an article which might 
 be profitably traded with and discouraged all other forms 
 of industry. The writer already quoted after speaking of the
 
 INTERNAL TRADE 185 
 
 precautions taken to prevent the colonists becoming self- 
 dependent says : 
 
 "For these reasons it appeared to be of vital importance to 
 the English statesmen of the seventeenth century that the 
 planters should not be allowed to take steps looking to the 
 development of manufacturing interests among them, and it 
 cannot be said that their views were entirely untenable. To 
 permit the colonists to export their agricultural products to 
 any foreign country and at the same time to foster manufac- 
 tures in Virginia was to destroy all the ties except those of 
 race uniting England to the population of that territory. 
 * * * The mercantile system bore less heavily on Vir- 
 ginia than on New England. Her soil was capable of pro- 
 ducing a commodity which found a remunerative market in 
 the mother country; whereas New England was thrown 
 back upon her agricultural products, which it was impossible 
 after 1650 to import into England on account of the heavy 
 duties then imposed to protect the English farmer from 
 foreign competition."* 
 
 It is hardly possible to disguise the fact that this attempt 
 to compel the colonists by forcible means to remain in the 
 narrow agricultural groove marked out for them by the 
 people of the mother country was inspired by the same 
 spirit and animated by desires precisely similar to those en- 
 tertained by the Cobdenites. As already pointed out, the 
 early English were able to coerce, while their successors were 
 obliged to resort to persuasive sophistries. It does not 
 matter, however, what means were or are resorted to ; the 
 consequences must be th? same in such cases. If the disposi- 
 tion of a people to diversify their industries is checked either 
 by force or a mistaken opinion that a country can become 
 great or prosperous by remaining in the condition of depend- 
 ence which devotion to agriculture or the production of ra w 
 materials implies, the result must in either event prove dis- 
 astrous. 
 
 * Bruce, Economic History of Virginia in Seventeenth Century. 
 Vol. II, p. 394.
 
 i86 PROTECTION AND PROGRESS 
 
 A vivid picture of the condition to which a people may 
 be reduced by consenting to accept the role of dependents 
 may be found in the pages of an annahst wliose words are 
 epitomized for us by the author of the Economic History of 
 Virginia in the Seventeenth Century. Mr. Bruce says : 
 
 "Beverly, who indulged a spirit of exaggeration to some 
 extent, writing towards the end of the seventeenth century, 
 when the English had been in possession of the country for 
 nearly a hundred years, reproached the inhabitants not only 
 for their slovenly and wasteful system of agriculture and 
 their neglect of many products to which the soil was adapted, 
 but also for their strong indisposition to supply themselves 
 by local manufactures with a larger proportion of those 
 articles which they had from the foundation of the first set- 
 tlement been obtaining by importation from abroad. The 
 Virginians, he said, sheared' their sheep only to cool them. 
 There was little thought of the clothing into which the fleeces 
 could have been converted. The head covering of the Vir- 
 ginians was made of fur which had been sent to England 
 from the colony for working up and then returned in the 
 shape of hats to be sold or bartered at a great advance on 
 the cost of raw material. A large quantity of the hides which 
 were a part of the annual production of every plantation 
 were thrown on the ground to rot or were used to protect 
 goods from the rain dripping through the leaky roofs. Some 
 of the hides, it is true, were manufactured into shoes, but the 
 process was so carelessly and rudely performed that the 
 planters bought English shoes in preference whenever the 
 opportunity presented itself. Although the forests of Vir- 
 ginia furnished varieties of woods which in delicacy of grain 
 and durability of fiber were particularly suitable for the man- 
 ufacture of every kind of woodenware, nevertheless the in- 
 habitants of the colony persisted in obtaining from England 
 their chairs, tables, stools, chests, boxes, cart wheels and 
 even their bowls and birchen brooms."* 
 
 *Bruce, Economic History of Virginia in Seventeenth Centur>. 
 Vol. II, p. 397.
 
 INTERNAL TRADE 187 
 
 It does not detract from this narration to say that the col- 
 onists were constrained ; the result would have been precisely 
 the same if they had been perfectly free agents and had fol- 
 lowed or accepted as sound a theory similar to that promul- 
 gated later by the adherents of the Manchester school, who 
 taught that a country finds its greatest profit in following 
 those pursuits to which it seems most naturally adapted. 
 The production of tobacco in Virginia seemed to be such a 
 pursuit, and other forms of agriculture offered attractions 
 in the neighboring colonies ; therefore, according to the 
 assumption of the Cobdenites, the colonists ought to have 
 been prosperous and happy people. Indeed, relying on the 
 assertions of Adam Smith, they assume that such was the 
 case, but the evidence is overwhelming that the distinguished 
 economist was misled by surface indications and that the 
 American colonial prosperity he speaks of in his "Wealth of 
 Nations" was not general. 
 
 Doubtless the American planters were more or less thriv- 
 ing on the eve of the Revolution, but the masses were not. 
 On that point modern historians speak with no uncertain 
 voice. Years after the conclusion of peace, owing to the 
 backwardness of the colonies in manufacturing, the condi- 
 tion of the people was most deplorable. McMaster gives a 
 glimpse of the life of the average American in this interest- 
 ing passage. After reciting the fact that a workingman who 
 could earn fifteen shillings a week was fortunate, he goes 
 on to say: 
 
 "On such a pittance it was only by the strictest economy 
 that a mechanic kept his children from starvation and himself 
 from jail. In the low and dingy rooms which he called his 
 home were wanting many articles of adornment and use now 
 to be found in the dwellings of the poorest of his class. Sand 
 sprinkled on the flood did duty as a carpet. There was no 
 glass on his table ; there was no china in his cupboard ; 
 there were no prints on his wall. What a stove was he did 
 not know ; coal he had never seen ; matches he had never
 
 i88 PROTECTION AND PROGRESS 
 
 heard of. Over a lire of fragments of boxes and barrels, 
 which he hghted with the sparks struck with a flint or with 
 hve coals brought from a neighbor's hearth, he cooked up 
 a rude meal and served it in pewter dishes. He rarely tasted 
 fresh meat as often as once a week, and paid for it a much 
 higher price than his posterity. Everything, indeed, which 
 ranked as a staple of life was very costly. Corn rtood at 
 three shillings the bushel, wheat at eight shillings and six 
 pence, an assize of bread was four pence, a pound of salt 
 was ten pence. * * * jf the food of an artisan would 
 now be thought coarse, his clothes would be thought abom- 
 inable. A pair of yellow buckskin or leathern breeches, a 
 checked shirt, a red flannel jacket, a rusty felt hat cocked 
 up at the corners, shoes of neatskin set off with huge buckles 
 of brass, and a leathern apron comprised his scanty ward- 
 robe. The leather he smeared with grease to keep it soft and 
 flexible."* 
 
 This picture describes better than volumes of statistics 
 could the arrest of development in the colonies owing to an 
 economic policy which compelled the people to devote them- 
 selves to the production of rude products. It shows conclu- 
 sively that the highly colored statement of Smith that the 
 condition of labor in the colonies was enviable was abso- 
 lutely unreliable and that the fact cited by him that the 
 colonists could "afford to import the more advanced and 
 more refined manufactures" from the mother country was 
 not due to the prosperity of the many, but that such importa- 
 tions were confined to the class who were profiting by slave 
 labor and who extracted with extreme difficulty from the 
 great estates existing in a country where land was so abun- 
 dant incomes which would appear meager compared with 
 those derived from very much smaller properties in a coun- 
 try provided with a manufacturing industry.f 
 
 *McMaster, History of the People of the United States. 
 tSmitk, Wealth of Nations, Book IV, Chap. VII.
 
 INTERNAL TRADE 189 
 
 There can be no doubt whatever that the British poHcy 
 of repressing manufactures in the colonies would have 
 proved permanently successful if there had been any dispo- 
 sition on the part of the colonists to accept teachings re- 
 sembling those of Smith. But they could not be persuaded 
 that the road to prosperity would ever be found while they 
 remained in a state of dependence on the mother country. 
 They rejected the soothing assurance that their best inter- 
 ests would be consulted by importing from Great Britain 
 "all the more refined or more advanced manufactures," be- 
 cause they could be obtained "cheaper than they could make 
 them for themselves." 
 
 The author of "Wealth of Nations" understood the 
 nature of the difficulties in America at the outbreak of the 
 Revolution better than most of his contemporaries. There 
 is a suggestion in his work that he was inclined to regard 
 the future transference of the seat of British power to the 
 new world as a remote possibility, but the major part of his 
 argument compels the belief that he felt certain that so long 
 as the colonies were devoted to agriculture they must remain 
 dependent upon the mother country. 
 
 While Smith felt assured on this point, he could safely de- 
 nounce as a mischievous policy that of attempting to restrain 
 the colonists by legislation from engaging in "more advanced 
 or more refined manufactures." Why pass laws to effect 
 something which would inevitably be accomplished without 
 friction ? If it was impossible for the colonists to manufac- 
 ture as cheaply as in the mother country, and if they were 
 not permitted to adopt protective measures, how could they 
 hope to engage in rivalry with the manufacturers of Great 
 Britain ? Smith saw they could not, and therefore considered 
 the restraints imposed on the colonists superfluous. 
 
 An economist whose writings have attracted worldwide 
 attention has described the limitations under which Smith 
 produced his great book, and pointedly intimates that he 
 found it necessary to indulge in a species of deception which
 
 190 PROTECTION AND PROGRESS 
 
 inclined proprietors of large estates to believe that he shared 
 their contempt for the aspirations of the commercial classes.* 
 A question arises whether this estimate of the Scotch econo- 
 mist does him justice. There is enough of vacillation and 
 uncertainty in his work to account for his alleged sneers at 
 the movement which was gaining force when he wrote with- 
 out attributing it to conscious dishonesty. It is not unrea- 
 sonable to suppose that when he summed up his views of the 
 purposes of the American colonists he saw that commercial 
 independence was aimed at in America, and that the con- 
 troversy was not one over taxation and representation, as has 
 been so generally assumed. So much may be inferred from 
 this language, which contains a sneer and a prediction : 
 "From shopkeepers, attorneys and tradesmen they are be- 
 come statesmen and legislators, and are employed in contriv- 
 ing a new form of government for an extensive empire, 
 which they flatter themselves will become, and which indeed 
 seems very likely to become, one of the greatest and most 
 formidable in the world. "f 
 
 There is no doubt that the shopkeepers and tradesmen 
 referred to by Smith aimed at the creation of a great empire 
 and that they felt that the vastness of the resources of their 
 country would assure the attainment of their aspirations. 
 No matter how much of a purely political nature may be 
 found in the discussions of revolutionary times it is easy to 
 discover a strong undercurrent of the practical. The de- 
 mand for liberty cannot, therefore, be construed into a mere 
 desire for representation ; it was more likely an expression 
 of the determination of the colonists to develop their ma- 
 terial resources without interference from the mother coun- 
 try. 
 
 This fact is often obscured by misconception of the mo- 
 tives of those who advocated freedom of trade with Great 
 
 *George, The Science of Political Economy, p. 167, etc. 
 t Smith, Wealth of Nations, Book IV, Chap. VII.
 
 INTERNAL TRADE IQI 
 
 Britain after the declaration of peace. Such demands did 
 not imply adhesion on the part of those preferring them to 
 the idea that the United States would derive a greater advan- 
 tage by purchasing the cheap manufactured articles of Eng- 
 land than from developing their own resources. On the 
 contrary, there was unmistakably a preponderance of opinion 
 in favor of promoting home industries, and many of those 
 who appear to have recorded themselves as favoring freedom 
 of trade were advocates of a protective tariff. 
 
 The explanation of the apparent contradiction consists 
 in the different interpretations placed by men on the term 
 "freedom of trade." Investigation will disclose that the 
 founders of the republic did not deem that protective laws 
 were to be placed in the category of obstacles to freedom 
 of trade. They looked upon some of the excesses of the 
 Navigation Act of Great Britain and the methods of the 
 Mediterranean piratical rulers as hindrances to commerce, 
 but they could not be induced to believe that steps taken 
 to encourage home industries were objectionable. 
 
 But whatever may have been the views of the time con- 
 cerning a question which is still the subject of contention. 
 it is quite certain that the majority of the revolting colonists 
 were in favor of taxing imports in order to encourage home 
 industries.* This purpose, which found expression in the 
 Federal Constitution, was more or less persistently adhered to 
 until the slave-holding oligarchy of the South became domi- 
 nant. There has never been a time since the formation of 
 the Government when there has not been a great party in 
 this country whose members were profoundly convinced that 
 genuine prosperity could only be assured by planting on our 
 soil a strong manufacturing industry. 
 
 Recurring to the illustration employed at the beginning 
 of this chapter, it may be said that the masses of the Ameri- 
 can people have always been firm believers in the policy of 
 
 *Constitution of the United States.
 
 192 PROTECTION AND PROGRESS 
 
 filling the national commercial reservoir and that they were 
 ready to undergo a present dearness if the apparent sacrifice 
 promised to bring future cheapness, and plenty of employ- 
 ment for the people while this latter result was being 
 achieved. Even when the slave owners were in full control 
 at Washington and openly proclaimed that the interests of 
 their "peculiar institution" required free imports of cheap 
 British manufactured goods so that raw cotton could be 
 produced in greater abundance and on more favorable terms, 
 the free white people of the North never lost heart, and were 
 always ready to seize the opportunity to advance the real 
 prosperity of the country by encouraging domestic produc- 
 tion in every line of industry. 
 
 The opportunity presented by the necessities created by 
 the Civil War was promptly seized by the advocates of pro- 
 tection, and since the passage of the Morrill Tariff Act there 
 has been a steady adherence to the policy of filling the na- 
 tional industrial reservoir. Even the tentative efforts of 
 Cleveland to bring about a recrudescence of the ideas of the 
 Manchester school were defended on the ground that the 
 proposed changes in the tariff would still leave the duties so 
 high that incidental protection would be afforded. Assur- 
 ances of this kind were absolutely necessary, for, as has 
 been judiciously observed by an English advocate of what is 
 called "Fair Trade," such a thing as an absolute free trader, 
 outside of a narrow clique of doctrinaires, is almost unknown 
 in the United States. 
 
 The effects of the steadfast devotion of Americans to the 
 sensible economic course of home development may be in- 
 ferred from the statistics of Mulhall, who shows in the most 
 convincing fashion that the efforts to fill the national com- 
 mercial reservoir have not been unavailing, and that from 
 being a dependent nation we have in a comparatively brief 
 space of time nearly effected our industrial emancipation. 
 
 The figures of internal trade derived from Mulhall to 
 which we are about to call attention display the vast extent
 
 INTERNAL TRADE 193 
 
 of the industrial reservoir of the United States and the 
 great measure of success that has attended the efforts of 
 the protectionists to fill it. They will show also, when com- 
 pared with the statistics exhibiting the degree of success 
 achieved by other nations, that the United States stands 
 pre-eminent among the progressive peoples of the earth. 
 
 Taking as our starting point i860 and the year 1894 as a 
 date for measuring the advances made, we find that in the 
 beginning of the period the internal trade in agricultural 
 products in the United States was £420,000,000 ; thirty-four 
 years later it was £813,000,000; trade in manufactured 
 products amounted to £392,000,000 in i860; in 1894 it had 
 expanded to £1,952,000,000; our forests and fisheries fur- 
 nished an internal exchange aggregating only £35,000,000 
 in i860; the volume of this trade reached £130,000,000 in 
 1894 ; the value of minerals represented in our mineral trade 
 was £30,000,000 in the first named and £94,000,000 in the last 
 year of the period. While our imports which may be re- 
 garded as an index of the state of the country's dependence 
 on foreigners only increased from £75,000,000 in i860 to 
 £136,000,000 in 1894, the aggregates of these diflFerent 
 headings show that our internal trade amounted to £952,000,- 
 000 in i860 and to £3,125,000,000 in 1894.* 
 
 The striking feature of the foregoing presentation is the 
 enormous development of manufactures, which represents 
 a fivefold increase, and of the threefold expansion of the 
 mineral industry; while imports scarcely doubled during 
 the period. It is quite obvious from these comparisons that 
 the object of the protectionists has been steadily persevered 
 in and that it is in a fair way to be accomplished. The work 
 of filling the domestic industrial reservoir has gone on un- 
 interruptedly, and during its progress the growing popula- 
 tion of the country has made constantly increasing demands 
 upon it without impairing the supply, which, as the rela- 
 
 ♦Mulhall, Industries and Wealth of Nations, 1896. 
 13
 
 194 PROTECTION AND PROGRESS 
 
 tively decreasing imports show, is rapidly becoming great 
 enough to meet the wants of a nation whose consumptive 
 ability far surpasses that of any other on the globe. 
 
 This tremendous result has been accomplished without 
 making an appreciable sacrifice. It is true that the level of 
 prices in the United States has been higher than that in some 
 other countries, but as the standard of comfort of the masses 
 is admittedly much higher in this than any country in 
 the world it is idle to argue that the cost of living places 
 Americans at a disadvantage. The range of prices is much 
 higher in England than on the continent, but no one pre- 
 tends on that account to assume that continental peoples are 
 better off than the British. On the contrary, it is conceded 
 that the reverse is the case. 
 
 This is a condition that is likely to prevail in the United 
 Kingdom so long as its people maintain their ability to cre- 
 ate wealth on a large scale. When Great Britain ceases to 
 do this and becomes a mere nation of consumers the situation 
 will be greatly altered. This is a fact which British econo- 
 mists should have found no difficulty in grasping, for they 
 have always taught that the condition of the people must 
 depend upon the augmentation of the national wealth by pro- 
 duction. That they were incapable of perceiving that the 
 United States was pursuing a policy which had for its object 
 the accomplishment of a result which their teachings pro- 
 claimed as desirable can only be explained by assuming that 
 political economists are prone to overlook the fact that there 
 may be more than one practicable mode of reaching a de-. 
 sirable goal. Thus it may be the natural method, it certainly 
 is the most primitive one, for a man who purposes visiting 
 a distant city to walk ; but the person who takes that highly 
 artificial development, the modern express train, is likely 
 to reach his destination first. The resort to the artificial con- 
 trivance may seem the more expensive, but in the long run it 
 will be found the cheapest. 
 
 Adam Smith and a long line of British free traders who
 
 INTERNAL TRADE 195 
 
 have followed him have persistently urged that the most 
 profitable plan for a people to adopt is the natural one. They 
 have not hesitated to recommend that new countries should 
 imitate the example of the weary plodder and leave to older 
 nations the use of express trains. Fortunately there has 
 always been a suspicion in the United States, except within 
 the walls of certain colleges, that advice of this kind is not 
 entirely disinterested. Had the case been otherwise the 
 census records might have made an entirely different show- 
 ing and Mr. Mulhall would not have been called upon to 
 note that the wealth of the United States had increased dur- 
 ing the protective period at a rate which makes British ex- 
 pansion seem insignificant. According to our English 
 authority, in i860 the wealth, urban and agricultural, of 
 the United States amounted to £3,366,000,000; in 1895 it had 
 increased to £16,350,000,000. During the same period Brit- 
 ish wealth increased from £7,206,000,000 to £11,806,000,- 
 000.* 
 
 In thirty-five years American wealth increased fivefold, 
 while that of Great Britain fell far short of doubling itself. 
 Whatever else this may demonstrate, it certainly shows 
 that the American effort to fill the home reservoir was suc- 
 cessful. 
 
 ^Mulhall, Industries and Wealth of Nations, 1896.
 
 CHAPTER X. 
 
 AGRICULTURE AND ECONOMICS. 
 
 FARMING AIDED BY PROTECTION AND HINDERED BY FREE TRADE. 
 
 Agriculture in the United States — It has not been retarded by the 
 diversion of capital to manufacturing — Troubles of American 
 farmers due to overproduction — Relief afforded by the growth 
 of a great urban population — Adam Smith's erroneous assump- 
 tion concerning the difficulty of creating capital — The mobility 
 of capital causes it to be transferred to points where it can be 
 most profitably employed — The artificial stimulus of manufac- 
 tures has directly contributed to the development of American 
 agriculture — The United States the leading agricultural nation — 
 Protection responsible for improved processes of production — 
 The part played by machinery in American farming — Why agri- 
 culture makes no progress in some countries — Value of Ameri- 
 can farm products — Comparisons of American and British 
 growth — The repression of farming in England due to free 
 trade — The safety of the British nation imperiled — Heavy 
 taxes imposed upon the British to maintain food supplies — The 
 creation of a great pauper class — Resemblance to conditions in 
 ancient Rome. 
 
 The Cobdenite who has laboriously inculcated the idea 
 that the aim of statesmen should be to promote the national 
 wealth when confronted with such evidence as that pre- 
 sented in the foregoing chapter is, as a rule inclined 
 to fall back on the assumption that still greater 
 results would have been achieved had protectionist 
 United States devoted itself to the development of its "true 
 natural resources." This term, when employed by a follower 
 of the Manchester school, applies to agriculture or the pro- 
 duction of raw materials, it being assumed that it is an 
 
 unnatural thing for the people of a new country to develop 
 
 196
 
 AGRICULTURE 197 
 
 its resources beyond the food and raw product stage, because 
 the peoples of older countries with accumulated capitals and 
 acquired capabilities are able for a time to produce manu- 
 factured articles more cheaply than the former. 
 
 The attempt of the Cobdenites to fortify this argument 
 has led to some extraordinary assumptions and not a little 
 misrepresentation. It has been asserted without any attempt 
 whattever to justify the charge that the protective system of 
 the United States tended to retard its agricultural develop- 
 ment and that American farmers have been made the vic- 
 tims of a system designed to promote one branch of industry 
 at the expense of another. This latter propensity is assumed 
 to be one of the most pronounced characteristics of protec- 
 tion. 
 
 The reader of a Cobden treatise who happened to be un- 
 provided with other facts to set him right might easily 
 infer that the efifect of protection in the United States had 
 been to stunt agriculture, and that conversely the British 
 free trade policy was one which had operated so beneficently 
 in Great Britain that all industries had flourished alike. In 
 the following pages these assumptions will be examined and 
 proof will be furnished that every Cobdenite prediction has 
 been falsified by the event and that every statement that 
 protection has stimulated manufactures at the expense of 
 the agricultural class in the United States is absolutely 
 without foundation ; while, on the other hand, incontestable 
 evidence will be produced to affirm the protectionist charge 
 that the British free trade policy has ruined English agri- 
 culture. 
 
 The evidence regarding the. progress of American agri- 
 culture is so abundant it is extraordinary that attempts are 
 made to create the impression that it has been retarded by the 
 operations of a protective tariff. It is true that the farmers 
 of the United States have had occasion during recent years 
 to complain that their rewards were not as satisfactory as 
 formerly, but an investigation of their complaints develops
 
 198 PROTECTION AND PROGRESS 
 
 Lhe fact that such evils as they have experienced would have 
 been greatly accentuated had American statesmen made the 
 fatal blunder of neglecting the encouragement of manufac- 
 tures. There can be no doubt on this point, for the evidence 
 is overwhelming that the farmers of the United States have 
 been suffering from the combined effects of an appreciating 
 money and overproduction, which together have caused 
 a tremendous fall in the prices of American farm products. 
 
 The Cobdenites have frankly avowed that the success of 
 their system depended upon the stimulation of the produc- 
 tion of raw materials and food supplies by other countries 
 so that the British working classes could obtain them in 
 abundant quantities and cheaply. It may, therefore, be 
 difficult to convince them that whatever evils are at present 
 experienced by agriculturists in this and other protection- 
 ist countries would have been intensified had the entire 
 energies of protectionist peoples been devoted to the produc- 
 tion of the rude products of the soil. But the sufferer from 
 overproduction is more amenable to argument. If. under 
 the present system, which the Cobdenites assert is repressive 
 in its character, the farmers of this and other countries pro- 
 duce in such abundance that their chief concern is to find 
 a profitable market, what would have been the result had the 
 millions now forming the urban population of the United 
 States, and whose immediate dependence for a livelihood is 
 upon manufacturing industries, turned their attention to 
 the cultivation of the soil ? 
 
 The Cobdenite has airily assumed that the agriculturalist 
 in such case would have found his compensation in a greatly 
 reduced cost of the manufactured products consumed by him, 
 but the evidence advanced in a preceding chapter, that so 
 long as Great Britain enjoyed a practical monopoly of the 
 trade in manufactured articles there was no disposition to 
 share her prosperity with other peoples, forbids the assump- 
 tion that any such result would have followed. There is no 
 fact better attested tlian that the aim of the Cobdenites was
 
 AGRICULTURE 199 
 
 narrowly selfish. The British believed that the true com- 
 mercial policy of their nation was to buy in the cheapest 
 and sell in the dearest market, and it was their purpose to 
 make their manufactured products as dear as possible to 
 outsiders by preserving as close a monopoly as practicable, 
 while at the same time they aimed to secure their supplies 
 of food stuffs and raw materials cheaply by pitting nations 
 with agricultural capabilities against each other. 
 
 The economists of a country are apt to take on the color 
 of their surroundings. It is not surprising, therefore, that 
 in the first flush of the discovery by Britons that it would be 
 conducive to the national prosperity if Great Britain could 
 be made the workshop of the world to find ingenious men 
 framing subtle arguments designed to convince backward 
 peoples that their true interests would be forwarded by 
 remaining in a state of dependence. Such arguments fre- 
 quently took the form of demonstrations that agriculture 
 must of necessity be retarded in new countries if capital was 
 diverted from what those who formulated them declared 
 must be its most profitable employment, namely, in aiding 
 the production of food and raw materials, to manufacturing, 
 which they emphatically asserted could never be successfully 
 and profitably pursued unless it developed itself naturally. 
 
 This fundamental error of the Manchester school is due 
 to a slavish adherence to the teachings of Adam Smith, 
 whose mind was permeated with the idea that capitals are 
 created with infinite difficulty and who sometimes spoke as 
 though he imagined that the limit of their creation had been 
 reached' at the time he wrote. It is clear that Smith did; 
 not foresee that what was once esteemed so difficult would, a 
 few years after his death, be achieved with ease. Had he 
 dreamed of the tremendous expansion of capital that has oc- 
 curred since the middle of the present century and of the 
 great mobility that would be imparted to it by improved 
 methods of transportation and communication he would not 
 have ventured to assert that "no regulation of commerce can
 
 200 PROTECTION AND PROGRESS 
 
 increase the quantity of industry in any society beyond what 
 its capital can maintain. It can only divert a part of it in a 
 direction into which it might otherwise not have gone, and 
 it is by no means certain that this artificial direction is likely 
 to be more advantageous to the society than that into which 
 it would have gone on its own account."* 
 
 There was hardly any excuse for this assumption that 
 capital was so scarce that its employment in a stimulated 
 industry must necessarily have been regarded as a diversion 
 even in the time when Smith wrote. In another connection 
 he informs us that : "The mercantile capital of Holland is 
 so great that it is continually overflowing, sometimes into 
 the funds of foreign countries, sometimes into loans to pri- 
 vate traders and adventurers of foreign countries, some- 
 times into the most roundabout foreign trades of consump- 
 tion and sometimes into the carrying trade. All near em- 
 ployments being filled up, all the capital which can b'j placed 
 in them with any tolerable profit being already placed in 
 them, the capital of Holland necessarily flows towards the 
 most distant employments."t 
 
 A moment's reflection will convince any one that if the 
 condition here described existed Holland might have invested 
 a portion of its surplus capital in a new country. It is quite 
 certain that the Dutch would not have been deterred from 
 engaging in a venture in the colonies which promised profit 
 no matter to what it may have owed its origin ; and it is 
 equally certain that had they done so the employment of 
 their capital in promoting a stimulated enterprise would 
 not have constituted a diversion, for Smith expressly states 
 that the Hollanders were compelled to seek new fields for 
 investment. Under the circumstances, it is easy to conceive 
 of the development of a manufacturing industry in a new 
 country with insufficient capital of its own without in the 
 
 ♦Smith, Wealth of Nations, Book IV, Chap. I. 
 tibid, Book IV, Chap. VII.
 
 AGRICULTURE 201 
 
 least retarding its agricultural development by diverting 
 from it the capital necessary for its expansion. 
 
 That agriculture has never suffered from the diversion 
 of capital to other pursuits in this country is easily estab- 
 lished. Indeed, it would not be difficult to demonstrate that 
 the creation of a manufacturing industry by a resort to pro- 
 tection, insead of depriving the people of the country of 
 the opportunity of developing the capabilities of the soil, 
 has actually promoted that result. There can hardly be 
 any question that the extension of the American railway 
 system, which has done so much to open up vast regions of 
 great fertility, is in large part due to the prosperity of the 
 manufacturing industry, the surplus earnings of wdiich have 
 found their way into transportation enterprises. Had a 
 manufacturing industry not been created, had the American 
 people chosen to remain mere producers of rude products, the 
 railway system of the United States could not have attained 
 its present proportions. No strictly agricultural country 
 could support such a system. It required that interdepend- 
 ence which results from the proximity of field and factory 
 to bring about that constant tendency to extend the railroad 
 facilities of the country which has done so much to make 
 the United States the leading agricultural nation of the 
 world. 
 
 This is no idle claim. It rests on figures of production 
 which admit of no other deduction. Mulhall asserts in the 
 most positive manner that no nation begins to approach the 
 United States in the magnitude of its agricultural produc- 
 tions, and, what is of more consequence to this discussion, 
 he concedes that this country has beyond all others made the 
 best use of its opportunities. Speaking of the period be- 
 tween the repeal of the corn laws and 1895, he says: "The 
 growth of American agriculture in half a century has been 
 unparalleled in any age or nation."* 
 
 ♦Mulhall, Industries and Wealth of Nations, 1896.
 
 202 PROTECTION AND PROGRESS 
 
 It is evident from this testimony that the agricultural 
 development of the United States was not interfered with 
 by the simultaneous development of a manufacturing indus- 
 try on American soil. On the contrary, it implies that the 
 diversification of industries proved a stimulus to farming 
 and that the protective system was chiefly responsible for 
 the enormous expansion in the different fields of agricultural 
 production to be noted later on. 
 
 Protection also affords an explanation of the fact re- 
 marked by Mulhall that "there has been such an improve- 
 ment of agricultural machinery of late years in the United 
 States that the area of cultivation per farming hand rose 
 from thirty-two acres in 1870 to thirty-seven in 1880." This 
 advance was directly due to the development of the mechan- 
 ical faculty among the American people. Had the United 
 States devoted itself exclusively to agriculture the backward 
 condition observable throughout the Southern States before 
 the recent manufacturing awakening in that section must 
 have prevailed generally throughout the Union. 
 
 If we turn to the statistics of the Patent Office of the 
 United States we find that the proportion of inventions 
 credited to the South during the ante-bellum period was 
 very small, and a detailed examination of the matter would 
 show that the inventive faculty was almost dormant in those 
 sections of the country which devoted themselves wholly 
 to agricultural pursuits. 
 
 In an interesting sketch of the development of Agricul- 
 tural Machinery and Implements in the United States, by 
 Eldridge M. Fowler* we find abundant evidence of the bene- 
 ficial effects of the proximity of a manufacturing industry 
 to American fields. No one can read the article referred to 
 without being impressed with the fact that the advance of 
 the agricultural interest in the United States owes more to 
 the intelligent assistance rendered by men with the mechan- 
 
 *One Hundred Years of American Commerce, Vol. II, p. 35^-
 
 AGRICULTURE . 203 
 
 ical turn of mind who had their training in the machine 
 shops and factories of the country than to the efforts of 
 the farmers themselves. The figures showing the enormous 
 extent of the branch of manufacturing devoted to the pro- 
 duction of agricultural machinery and implements are in 
 themselves sufficient to establish the claim that in the United 
 States the machine shop is the strong right arm of the 
 farmer. In 1890 there were 910 establishments specified in 
 the Government Bulletin as reporting themselves as wholly 
 devoted to the manufacture of agricultural machinery and 
 implements. These concerns reported an aggregate capital 
 of $145,313,997, employed 39,380 hands and paid wages in 
 the census year to the amount of $17,652,162, the value of 
 the product of their industry being $81,271,651. 
 
 In the year to which these figures relate the number of 
 farms in the United States was 4,564,641, with an acreage of 
 623,218,619, valued at $13,279,252,649. The farmers tilling 
 this vast area were the possessors of agricultural machinery 
 valued at $494,247,647, this amount representing an increase 
 of 21 per cent, in such holdings in ten years. 
 
 A study of these statistics helps us to understand the 
 enormous impulse given to agriculture during the past half 
 century in the United States and enables us to realize why 
 "the grain crop of 1895 (in this country) was equal to eight 
 tons per hand employed in farming, compared with an aver- 
 age of only two tons per hand in Europe." Mulhall, who 
 makes this statement, says distinctly that "the superiority of 
 the American agriculturist is due to improved machinery," 
 and his view is concurred in by Fowler, who remarks that 
 "by the aid of the wonderful implements designed for his 
 use the American farmer has within the last half century 
 been enabled to increase the effective force of labor fully 
 20 per cent., which means an annual net gain to the agricul- 
 tural community of probably not less than $200,000,000."* 
 
 ♦One Hundred Years of American Commerce, Vol. II, p. 356.
 
 204 PROTECTION AND PROGRESS 
 
 It would not be difficult to establish to the satisfaction 
 of reasonable persons that these remarkable achievements 
 of American agriculture could not have been accomplished 
 had the people of the United States been satisfied to depend 
 upon foreigners for their supplies of manufactured articles. 
 It is inconceivable that the numerous valuable machines now 
 in use on every American farm would have been called into 
 existence had not the needs of the American farmer been 
 studied at close range by American mechanics. The curious 
 who care to inquire into such matters will speedily discover 
 that nearly every important agricultural machine invented 
 in this country owes its existence to the promptings of the 
 mechanical mind and the disposition of those inclined to in- 
 vention to study out methods of profiting by the faculty, 
 and not to any demand or suggestion made by the agricul- 
 tural classes. There is, therefore, no ground for the belief 
 that the condition of agriculture in the United States would 
 have been more advanced than in Europe had Cobdenism 
 prevailed. 
 
 Mulhall says : "If the economy of labor was as well un- 
 derstood in all countries as in the United States, where each 
 hand cultivates twenty-one acres, the tilled area of Europe 
 would be two and one-half times as great as it is."* The 
 compliment conveyed in this remark is appreciated by Amer- 
 icans, but it would be an exhibition of egotism and vanity 
 to assume that the fact cited indicates the superiority of 
 the agricultural class in this country over that of similar 
 classes in Europe. There is not the slightest .doubt as to the 
 real cause, and it is the one already referred to. 
 
 Had tlie American people remained in a state of depend- 
 ency such as the devotion to agricultural would have in- 
 volved, they would probably be farming on lines not more 
 advanced tlian those marking European cultivation. There 
 is every reason to believe that if we were a purely agricul- 
 
 ♦Mulhall, Industries and Wealth of Nations, 1896.
 
 AGRICULTURE 205 
 
 tural community the British manufacturer at long range 
 would study the needs of the country precisely as he does 
 those of the agricultural people of Central and South Amer- 
 ica. The extent of this study is to determine as nearly as 
 possible what the prejudices of a people are and to meet the 
 demand for their continuance. It is a notorious fact that 
 this is the method pursued by Germany and Great Britain 
 in catering for the trade referred to. If a people are accus- 
 tomed to carrying on their occupations with cumbersome 
 tools which might easily be replaced with lighter and better 
 implements no attempt is made to bring about the latter 
 result. On the contrary, all the boasted ingenuity of the for- 
 eign artisan is devoted to supplying just such tools as the 
 people have been using, thus assisting in the perpetuation of 
 habits calculated to produce a minimum of beneficial results 
 to mankind. If anyone doubts this let him study the con- 
 sular reports of the British and observe how much stress is 
 laid upon the necessity of catering to the prejudices of for- 
 eigners and of not attempting to force on them tools and 
 machinery to which they are unaccustomed. 
 
 It is only because the farm in the United States has been 
 encroached upon by the factory that a different result is 
 noticeable. The manufacturer has not permitted the farmer 
 to remain in a groove. Self-interest has impelled him to 
 offer his services to the tiller of the soil who would have 
 indefinitely pursued the methods of his ancestors. The His- 
 tory of invention will show that the occasions are extremely 
 rare in which the quality asserts itself among strictly agri- 
 cultural peoples. It required communities in which mechan- 
 ical ingenuity and skill are highly developed, situated in the 
 midst of great fertile areas, to help produce such results as 
 have been achieved in the United States by American farm- 
 ers. 
 
 Had these manufacturing communities not been called 
 into existence by a protective tariff American agriculture 
 would be as plodding and unprogressive as it is in other parts
 
 2o6 PROTECTION AND PROGRESS 
 
 of the world. That mterdependence which Spencer has told 
 us accomphshes so much for mankind has been the great fac- 
 tor in our agricultural progress, and the attempt to diversify 
 our industries by artificially aiding them is responsible for 
 its growth in this country. Had there been no resort to 
 protection the American people might have remained homo- 
 genous and unenterprising, and instead of enjoying the ad- 
 vantages which flow from that complexity of civilization 
 which is the distinguishing feature of interdependence the 
 United States might be as dependent as Turkey or a Central 
 American State. 
 
 Recurring now to the argument of the Cobdenite that the 
 inevitable tendency of protection is to impede the growth 
 of that particular industry for which a country is best 
 fitted by nature, let us see whether the alleged economic 
 blunder of protection has operated disastrously to agricul- 
 ture in the typical protectionist country — the United States. 
 It has always been held by the writers of the Manchester 
 school that the interests of the United States would have 
 been best subserved by a strict devotion to the production of 
 food products and raw materials. As distinguished an ex- 
 ponent of free trade as Mr. Gladstone, in a discussion with 
 James G. Blaine carried on in the pages of an American 
 review, actually took the ground that a resort to protection 
 conclusively demonstrated that our manufacturing indus- 
 tries were exotics, and painted a glowing picture of what 
 we might have accomplished if we had devoted ourselves 
 exclusively to pursuits for which Americans and their coun- 
 try were better fitted. 
 
 Acute as the intellect of this remarkable Englishman un- 
 doubtedly was, his mind had been so warped by the teachings 
 of Cobdenism that he committed the absurd blunder of 
 likening the American attempt to encourage home manufac- 
 tures to the effort to raise pineapples under glass in compe- 
 tition with the producers of the tropics. It is true that when 
 Mr. Gladstone used the illustration to which we refer he
 
 AGRICULTURE 207 
 
 admitted that he was carrying the argument to extremes, 
 but he clearly showed that he believed that the attempt to 
 create an iron industry in competition with that of Great 
 Britain was as absurd as it would be for Englishmen to try 
 to raise pineapples in hothouses. "A pineapple," he said, 
 "is now sold in London for eight shillings and six pence 
 which before we imported that majestic fruit would have 
 sold for two pounds. Why not protect the grower of pine- 
 apples at two pounds by a duty of 400 per cent? Do not 
 tell me," he added, "that this is ridiculous. It is ridiculous 
 upon my principles; but upon your principles it is allow- 
 able ; it is wise, it is obligatory — as wise, shall I say ? as to 
 protect cotton fabrics by a duty of 50 per cent. No ; noj: as 
 wise only, but even more wise, and therefore, even more 
 obligatory. Because according to this argument we ought 
 to aim at the production within our own limits of those com- 
 modities which require the largest expenditure of capital 
 and labor to rear them in proportion to the quantity pro- 
 duced ; and no commodity could more amply fulfill this con- 
 dition."* 
 
 These views were expressed by Mr. Gladstone in the first 
 month of the year 1890 and were directed at the United 
 States, and were supposed to fortify his contention that pro- 
 tection resulted in diverting capital from more profitable 
 pursuits. He said in a paragraph closely following the 
 above : "I shall boldly contend that the whole of this doc- 
 trine — that capital should be tempted into an area of dear 
 production for the sake or under the notion of keeping it 
 at home — is a delusion from top to bottom," and in another 
 place, in the same connection, he remarked : "Protection says 
 to a producer. Grow this or manufacture that at a greater 
 necessary outlay, though we might obtain it more cheaply 
 from abroad, where it can be produced at a smaller necessary 
 outlay." 
 
 ♦Gladstone, North American Review, Article, "Free Trade," Janu- 
 ary, 1890.
 
 2o8 PROTECTION AND PROGRESS 
 
 It is a harsh assertion to make, but there can be no doubt 
 whatever that in these and the foregoing passages Mr. Glad- 
 stone deHberately misrepresented the purposes and practices 
 of protectionists. He was perfectly familiar with American 
 tariff schedules and he must have known that they embraced 
 a large number of articles on the free list, and these exempted 
 things he knew were not taxed because our lawmakers rec- 
 ognized that a tax imposed on an article we are incapable 
 of producing must necessarily fall on the consumer and that 
 home industry would not be encouraged by such an imposi- 
 tion. He must also have been familiar with the fact that 
 protection is only accorded to such things as there is a 
 rational ground for believing we can eventually produce as 
 cheaply as similar articles can be produced in other countries. 
 
 If Gladstone did not know this his ignorance was unpar- 
 donable, for the debates in Congress over the various tariff 
 schedules invariably revolved around the question whether 
 the article seeking protection was of such a nature that its 
 production on a sufficient scale to meet the demands of the 
 home market was assured. In the Congress following the 
 appearance of Mr. Gladstone's article in the North American 
 Review the duty was removed from sugar at the instance 
 of protectionists, who had become convinced that it could 
 or would not be produced on a sufficient scale to warrant 
 making it the object of a protective duty. It w-as only after 
 the conviction was reached as the result of experiments in 
 offering bounties to beet sugar producers that there would 
 be no difficulty about the United States, with a proper degree 
 of encouragement, producing all the sugar it needed that the 
 country consented to a restoration of a duty which, under 
 other circumstances, would have been as obnoxious to the 
 protectionist idea as the imposition of a tariff on tea or 
 coffee, both of which go untaxed because no American be- 
 lieves that they can be profitably produced in the Un'ted 
 States.* 
 
 *A duty was imposed on tea as a war measure in 1898.
 
 AGRICULTURE 209 
 
 Later on additional evidence will be furnished to prove 
 that Mr. Gladstone was short sighted and narrow minded 
 when he assumed that protection would result in the infliction 
 of permanent dearness upon a country of great resources ; 
 here the purpose is merely to exhibit as conclusively as, pos- 
 sible that there was no diversion of capital from the agri- 
 cultural industry in the United States during the period since 
 protection has had full sway, but that it would have been 
 a pecuniary gain to the country if such a diversion as he 
 assumes did occur had really taken place. This demonstra- 
 tion will be by means of figures which show that the increase 
 of production in the United States has never been paralleled 
 in ancient or modern times, and that it has resulted in a 
 disastrous overproduction which might have been averted 
 had the policy of protection not halted in the years anterior 
 to the Civil War. In other words, had manufacturing not 
 been discouraged by the slave-holding oligarchy in the 40's 
 and 50's, the non-agricultural population of the United 
 States would have increased at such a rate that the products 
 of our farms would have been easily absorbed by people 
 living on our own soil and we should not have had a surplus 
 to embarrass the farmer by reducing the prices of the com- 
 modities he has to sell. 
 
 Let us now glance at some of the achievements in that 
 industry which Mr. Gladstone assumes was injured by a 
 diversion of capital, and incidentally compare what has been 
 accomplished in this country with what has been effected 
 by Europeans. In 1840 the United States produced 2,100,- 
 000 tons of wheat; in 1895 the quantity had increased to 
 11,700,000 tons; of maize we raised 9,500,000 tons in 1840 
 and 53,800,000 in 1895. The yield of oats in 1840 was 
 3,800,000 tons, in 1895 it had reached 23,900,000 tons. In 
 1850 we had 34,200,000 acres devoted to grain ; in 1895 the 
 cultivating grain area was 149,950,000. In 1850 there were 
 6,100,000 acres under cotton ; in 1895 there were 23,740,000. 
 Our meadows increased from 11,050,000 acres in 1850 to 
 
 14
 
 210 PROTECTION AND PROGRESS 
 
 51,800,000 in 1895. The increase of our flocks and herds 
 is equally great. We had 17,800,000 cattle, 21,700,000 sheep, 
 30,400,000 pigs and 4,900,000 horses in 1850, and in 1894 
 these vast numbers had expanded to 53,100,000 cattle, 45,- 
 000*000 sheep, 45,200,000 pigs and 18,400,000 horses. 
 
 A survey of these figures impels Mulhall, from whose 
 work they are derived, to remark : "But for the great de- 
 velopment of tillage and pastoral industry in the United 
 States some European countries, especially England, would 
 come short of grain and meat," and to this statement he adds 
 that "at present the United States raises one-third of the food 
 produced in the world," the comparative production stated 
 in terms of tons being as follows : 
 
 United States. Europe. Other countries. 
 
 Grain 89,400,000 141,500,000 23,300,000 
 
 Wheat 4,830,000 9,380,000 1,290,000 
 
 It is certainly impossible to infer from this showing that 
 agriculture has been repressed in the United States. Tht 
 development has been phenomenal, the production during 
 the whole protective period being vastly in excess of the 
 home requirements. According to Mulhall "about one-sixth 
 of the agricultural products of the United States are ex- 
 ported, as shown by the customs resturns, from which fact 
 it may be asserted that 1,800,000 persons are exclusively 
 occupied (in the United States) in producing food for ex- 
 portation to Europe." He then furnishes the following 
 table, which shows in an unmistakable manner that the ag- 
 ricultural production of the United States has more than 
 kept pace with the growth of population and that the Ameri- 
 can farmer has constantly experienced the drawbacks result- 
 ing from overproduction : 
 
 Million £ s ; 
 
 1840. i860. 1880. 1886. 1893. 
 
 Exported 19 53 143 loi 128 
 
 Home use 161 367 556 674 685 
 
 Totals 180 420 699 775 813
 
 AGRICULTURE 211 
 
 In the face of a development such as that exhibited by 
 these figures it is almost grotesque to speak of a diversion 
 of capital from agricultural pursuits. The truth of the 
 matter is that the United States has handicapped itself by 
 developing its agricultural resources too rapidly. If there 
 were any doubts on this point they would be prom.ptly dis- 
 pelled by an attentive consideration of the recommendations 
 of the trade journals that the production in the cotton grow- 
 ing region should be curtailed, or that the farmers engaged 
 in this, that or the other branch of agriculture would be 
 wise to diversify or change their crops. Observation of 
 the fact that the constant expansion of agricultural opera- 
 tions has the effect of depressing prices might also lead to 
 the conclusion that if there is unwisdom in this connection 
 it is not of the kind mentioned by Mr, Gladstone, but some- 
 thing entirely different. 
 
 Agriculture in the United States has not been impeded ; 
 it has been overdone. It appears, however, that the econo- 
 mists of the Manchester school who profess to see in pro- 
 tection the cause for the overproduction of manufactured 
 articles, and who regard such overproduction as a great evil, 
 do not look upon agriculture from the same point of view. 
 On the contrary, they extol as a blessing the cheapening of 
 food which results from the excessive competition of farmers 
 and calmly assume that the question whether the tiller of 
 the soil is to be properly rewarded for his exertions is one 
 scarcely worth paying attention to. Indeed, in England the 
 interests of the agricultural producer have been entirely 
 disregarded, and in the effort to intrench the manufacturing 
 industry of the country British statesmen have proceeded 
 to such extremes that critics, not unfriendly to the free trade 
 theory, have questioned whether in their anxietv to main- 
 tain the supremacy attained by adventitious circumstances 
 they are not imperiling the existence of the nation. 
 
 It is but recently that this phase of the economic question 
 has received attention in Great Britain, and it is approached
 
 212 PROTECTION AND PROGRESS 
 
 with reluctance by the men who teach the youth of the coun- 
 try. The latter are still influenced by the apprehension that 
 they may be convicted of economic heresy if they tell the 
 truth. But the practical men at the head of the British 
 trade journals do not hesitate to point out the difficulties 
 created by the one-sided development of industry in the 
 United Kingdom and say plainly that a condition of affairs 
 exists which in certain contingencies may prove destructive 
 to the national welfare. In an elaborate article discussing the 
 sources of British food supplies, a leading London journal 
 has pointed out some of the drawbacks resulting from an 
 economic system which has obliged Great Britain to depend 
 upon foreigners for 73.5 per cent, of the breadstuffs con- 
 sumed in that country.* 
 
 1. It imposes heavy taxes on the people of the United 
 Kingdom for the maintenance of extra cruisers for the pro- 
 tection of cargoes. 
 
 2. It renders possible a coalition of the principal foreign 
 states supplying us with wheat, who, by withholding their 
 exports, could render even the largest fleet useless and dic- 
 tate their terms to us after a short period of starvation in 
 England, the supplies in stock being only sufficient to meet 
 our wants for a few weeks. 
 
 3. It deprives the home manufacturer of a valuable mar- 
 ket for his production close at hand- 
 
 4. It destroys the best recruiting ground and the dis- 
 tricts best calculated to maintain the physique of our defen- 
 sive forces. 
 
 5. It destroys a class of the population from which the 
 best town folk has been largely drawn ; it takes from the 
 middle classes the source from which their servants were 
 obtained ; it practically abolishes the class of most value as 
 emigrants to British colonies, who have now to be drawn 
 from the continent. 
 
 *"The British Bread Basket," British Trade Journal, March, 1898.
 
 AGRICULTURE 213 
 
 These are formidable charges to bring against a system 
 whose advocates are constantly proclaiming that protection 
 results in impeding the natural growth of a country, and 
 who, by implication, assume that open ports must neces- 
 sarily prevent any industry being placed at a disadvantage 
 because the completest freedom is permitted to all industries. 
 It does not, however, require much penetration to discover 
 that there are more modes of artific'ally stimulating the 
 manufacturing industry of a country than those resorted 
 to by protectionists. The critic quoted from above, points 
 out the British method when he speaks of the heavy taxes 
 imposed on the people of the United Kingdom for the main- 
 tenance of extra cruisers for the protection of cargoes of 
 food stuffs in transit to Great Britain. He might have fairly 
 included in his arraignment the cost of maintaining the 
 major part of the British fleet which during the past fifty 
 years, ever since the acceptance of the peace producing sys- 
 tem of Cobden, had been sailing around the world com- 
 pelling people at the cannon's mouth to freely (?) trade 
 with the merchants of England. 
 
 It is amazing that writers living in a country whose eco- 
 nomic system has brought about the condition above de- 
 scribed should have the temerity to intimate that the pro- 
 tective system of the United States has acted injuriously to 
 the agricultural interest, but it is a characteristic of the 
 followers of the Manchester school that they pursue their 
 theories to their logical conclusions and never take the 
 trouble to ask themselves whether, when the result in practice 
 fails to harmonize with the one which their theory calls for, 
 they may not have been arguing from false premises. Hav- 
 ing assumed that artificial aid rendered to a manufacturing 
 industry in a new country necessarily implies the diversion 
 of capital from agriculture, they insist that the results of 
 protection must be disastrous to the agricultural industry. 
 The idea that the capital employed in the aided industry may 
 be drawn from some other source than the country which
 
 2i4 PROTECTION AND PROGRESS 
 
 resorts to the artificial method never occurs to them ; nor 
 do the most acute among the school of thinkers referred to 
 realize that in a country of vast resources the creation of 
 capital is a rapid process, and that in comparatively young 
 communities there is more frequently a plethora than a 
 scarcity of the means to promote production. Or, to put it 
 in another way, the development of agriculture in a new 
 country is apt to proceed more rapidly than the capacity of 
 people to effectively consume its products. 
 
 While there is absolutely no proof to support the conten- 
 tion that protection represses agriculture, the fact that Cob- 
 denism has had a tendency to impede the development of 
 British agriculture is undeniable. According to the best 
 available statistics there were 21,930,000 acres under crops 
 in 1846 in the United Kingdom against 20,050,000 in 1895. 
 In the former year the production of British grain was con- 
 siderably greater than at present, there being 11,600,000 
 acres cultivated in cereals in 1846 as against 8,870,000 in 
 1895. During the same period there was a slight increase in 
 the acreage devoted to green crops, from 10,330,000 to 11,- 
 180,000 acres, and of pasturage from 22,940,000 to 27,830,- 
 000 acres, but this advance is insignificant when the enor- 
 mous expansion of population during the interval is con- 
 sidered. In the opening year of the free trade era Great 
 Britain was no longer self-dependent. But after that date 
 she was obliged to increase her imports of food stufifs enor- 
 mously. Her annual takings of foreign breadstuffs 
 amounted in 1895 to £52,732,697; of meat products, £24,- 
 750,000; of butter and margarine, £17,842,508; of live an- 
 imals, £10,438,000; cheese, £4,900,000 ; eggs, £4,184,567. 
 
 The Cobdenite contention that it is an economic gain to 
 buy the articles procured by the vast expenditures described 
 above in the cheapest market would command more respect 
 if there were no other considerations involved than those 
 which they obtrusively put in the foreground; but if there 
 is any foundation for the fears betrayed in the above recapit-
 
 AGRICULTURE 215 
 
 ulation of the drawbacks of depending upon foreigners for 
 food supplies it will be admitted that the accomplishment 
 of Cobdenism somewhat resembles that of the monkey whose 
 greediness would not permit him to release a part of the 
 fruit he had grabbed so that he might extricate his paw from 
 the narrow necked bottle and escape his pursuer. If the 
 isolation of Great Britain continues she will eventually find 
 that she has thrust her hand into a very narrow necked 
 bottle indeed, one that may imprison the member so tightly 
 that she will be unable to withdraw it to fight for existence. 
 
 As may be inferred from various sources, the best Eng- 
 lish thought no longer views with equanimity the conversion 
 of the kingdom into a vast workshop. There is no longer a 
 disposition to exult over the unhealthy expansion of manu- 
 facturing. It is now seen that the existence of nearly ten 
 millions of workers in factories, who find their means of 
 subsistence dependent upon conditions utterly beyond their 
 control, is a very precarious one. Not only are they menaced 
 by the possibility of having their food supply cut ofif by 
 outside interference, but the increasing ability of peoples 
 hitherto dependent upon the British for their supplies of 
 manufactured articles threatens to deprive British men and 
 women of the opportunity to earn a livelihood no matter how 
 willing they may be to work. 
 
 The results of national policies are far reaching and their 
 effects cannot be fully judged until after the lapse of long 
 periods. At the height of Roman grandeur there was an 
 economic canker worm at work whose appearance was 
 hardly suspected by the most philosophic writers of the time. 
 The agriculture of Italy was steadily sapped by the competi- 
 tion of foreigners, but the outward evidences of prosperity 
 were such that few suspected the extent of the evil. There 
 was grumbling and discontent, but the rich were growing 
 richer and all seemed serene. Doubtless the condition of 
 the proletariat was a source of solicitude, but the trend of 
 economic thought was similar to that met with in England
 
 2i6 PROTECTION AND PROGRESS 
 
 today. Cheap food was the desideratum. It was provided 
 for the people at the cost of the native producer. A vast 
 pauper class was maintained, not as great as that of the 
 England of today, but sufficiently large to affect the imag- 
 ination of British historians to such an extent as to induce 
 them to assign the destruction of the Roman Empire to its 
 existence. The flocking to the capital city of ancient Rome 
 of the farming classes, driven from their employment by 
 one cause and another, has been regarded as a portentous 
 evil by all thoughtful writers, but the modern Cobdenite 
 sees nothing to deplore in the reduction of 3,401,000 persons 
 employed in British agriculture in 1841 to 2,527,000 in 1891. 
 The glamour of the vast accumulations of British wealth is 
 over him, and he fancies that it cannot crumble away. The 
 ancient Romans also regarded their condition with com- 
 placency. Pliny, in describing his native country, said : 
 
 "Italy is the land which is at once the foster child and 
 the parent of all lands ; chosen by the providence of the 
 gods to render even heaven itself more glorious, to unite the 
 scattered empires of the earth, to bestow a polish upon men's 
 manners, to unite the descendent and uncouth dialects of so 
 many different nations by the powerful ties of a common lan- 
 guage, to confer the enjoyments of discourse and civiliza- 
 tion upon mankind, to become, in short, the mother country 
 of all nations of the earth."* 
 
 Just such a destiny had the Cobdenites marked out for 
 Great Britain when they planned to make it the workshop 
 of the world. The ambition of the ancient and modern em- 
 pires run in parallel grooves, and the causes that wrecked 
 the one will contribute to the downfall of the other, and not 
 the least of these is the subordination of agriculture to other 
 pursuits. When Pliny delivered himself of the vainglorious 
 utterance above quoted Rome was rotten at the core. Her 
 
 *Pliny, Natural History, Book III, Chap. VI.
 
 AGRICULTURE 217 
 
 heart was being slowly eaten out by the destruction of the 
 farming class, and when cheap imports and other causes had 
 utterly destroyed the yeomanry of Italy the fair rind col- 
 lapsed and exposed the hollow and rotten interior.
 
 CHAPTER XL 
 
 INDUSTRIAL DEVELOPMENT. 
 
 UNSUCCESSFUL EFFORTS OF FREE TRADERS TO PROMOTE EXOTIC 
 INDUSTRIES. 
 
 Pursuits which Britons have been forced to abandon — The manufac- 
 ture of cotton textiles constantly menaced — Effects of the Ameri- 
 can civil war on the English cotton industry — The British navy 
 maintained so that exotic industi-ies may be pursued in Great 
 Britain — Free trade an obstacle to a people accurately gauging 
 their true powers — England's list of decaying industries — Beet 
 sugar industry — Establishment of iron and steel plants in the 
 United States — The erroneous assumption that the dearness due 
 ■ to protection is permanent — The growth of British imports and 
 what they signify — Foreign manufactured articles supplanting 
 those of British manufacturers in the home market of Great 
 Britain — The decline of British exports — The interests of the 
 strictly consuming classes and the producer not identical — 
 Debtor countries will pay English creditors with products of 
 their factories — The tendency of production to outstrip the 
 ability to effectively consume. 
 
 The preceding chapter was largely devoted to the discus- 
 sion of the Cobdenite fallacy that when artificial aid is 
 extended to assist the creation of an industry in a new coun- 
 try it necessarily follows that capital has been diverted from 
 some employment in which it might have been more profit- 
 ably used. It was shown that the assumption was erroneous, 
 evidence being produced to establish the fact that there is 
 a plethora of capital in the world and that the surplus of 
 one country finds its way to other countries where there 
 is a deficiency, thus overcoming the drawback which free 
 traders assume must ensue whenever it is found necessary 
 
 2I»
 
 DEVELOPMENT 219 
 
 to protect an industry from the encroachment of established 
 rivals. In addition, overwhelming testimony was presented 
 to prove that in one protective country at least the attempt 
 to artificially establish manufactories had been successfully 
 accomplished without impeding the growth of the industry 
 which the followers of the Manchester school affirmed was 
 the one which could most profitably be pursued because it 
 was the one which did not require government assistance 
 to prevent foreign encroachments. 
 
 In the course of this demonstration a passage was quoted 
 from a review article written by the Rt. Hon. W. E. Glad- 
 stone, in which he broadly implied that all protected indus- 
 tries were exotic in character. In this article he used the 
 well-worn illustration of the attempt to grow pineapples 
 under glass in competition with the fruit naturally grown 
 in the tropics and asserted, almost v/ithout reservation, that 
 the nominal dearness which marks the early stage of an effort 
 to promote the production of an article is something to which 
 the consumers of protectionist countries must be perma- 
 nently subject. That Mr. Gladstone and other free traders 
 held such a view is due to the error already dwelt upon of 
 assuming that some countries are naturally fitted to be pro- 
 ducers of raw materials and food stuffs, while others are 
 endowed by Providence with the ability to fashion the rude 
 products of the earth into finished articles. Their tenacious 
 adherence to this view blinds them to the fact that the ability 
 of their countrymen was acquired, and prevents their seeing 
 that other peoples, with a proper degree of encouragement 
 and sufficient protection, may also attain the skill requisite to 
 take a position in manufacturing. 
 
 But the entertainment of the erroneous idea that Provi- 
 dence had specially fitted the British to be the manufacturers 
 for the rest of the world is responsible for a still more serious 
 blunder than that of underestimating the capabilities of 
 other peoples ; it has had the evil effect also of inducing the 
 British to overestimate their own capabilities and has led
 
 220 PROTECTION AND PROGRESS 
 
 them to engage in pursuits for which they were unfitted, as 
 the sequel has already shown. The list of once flourishing 
 but now decadent British industries is by no means a short 
 one, as will be seen later on, but it is not nearly so porten- 
 tous as the fact that the branch of manufacturing in which 
 Britons are still pre-eminent is subject to vicissitudes which 
 may at any time impose want and misery upon the hundreds 
 of thousands who derive a living from its pursuit. The 
 conditions surrounding this particular industry in Great 
 Britain are such it is amazing that economists, real or al- 
 leged, should assume that its domestication in England was 
 natural. 
 
 It will be a source of wonder for future generations that 
 a country situated as Great Britain is should have aspired 
 to produce textile fabrics for the people of the whole world, 
 but it will not seem half so curious as the failure of the Brit- 
 ish economists to recognize that while condemning the at- 
 tempts of other peoples to develop their own resources as 
 blundering efforts to defy the laws of nature, the system they 
 extolled was responsible for the promotion in the United 
 Kingdom of exotic industries which could not be perma- 
 nently maintained in competition with other peoples. 
 
 That the cotton manufacturing industry as pursued in 
 Great Britain is a true exotic will be recognized by any one 
 taking into consideration the fact that it is absolutely de- 
 pendent upon remote countries for its supplies of raw ma- 
 terials. The superiority enjoyed by the British for a time 
 in this industry was due to the temporary advantage of 
 liaving a greater fund of experience and larger amounts of 
 capital than was possessed by rivals with abundant supplies 
 of raw material at their doors. But these strictly artificial 
 advantages did not serve to avert a calamity which brought 
 starvation and ruin in its train. During the Civil War in 
 the United States, which occurred while the superiority of 
 the English as cotton manufacturers was at its zenith, the 
 operatives employed in the mills of Manchester were re-
 
 DEVELOPMENT 221 
 
 duced to pauperism and became a public charge because raw 
 materials could not be obtained for them to fashion into 
 finished articles. 
 
 An English writer, discussing the effects of the cotton 
 famine caused by the blockade of the ports of the Southern 
 Confederacy by the United States, tells us that : "The dis- 
 advantage of a concentrated source of supply over sea in 
 any important raw material or essential food was never more 
 terribly brought home to the British than by the Manchester 
 cotton famine during the American Civil War. By 1863 the 
 weekly loss of wages was calculated at i 168,000, pauperism 
 in the cotton districts increased by 140 per cent., and some 
 500,000 persons were in receipt of regular relief. No less 
 a sum than £4,000,000 was spent in simply provid- 
 ing for working classes, and nearly £3,000,000 was sub- 
 scribed by private charity. At the time the United Kingdom 
 was favored by exceptionally good harvests and the linen 
 and woolen trades were in a flourishing condition. It was, 
 therefore, simply the cutting off of a single commodity which 
 produced all the distress."* 
 
 It is not necessary to follow the argument of the writer or 
 to dwell on the difficulties which he asserts will confront 
 the British people because of their dependence upon other 
 countries for supplies of food stuff and raw materials in 
 case they become involved with another power. His bare 
 recital shows conclusively that the undue expansion of the 
 cotton textile industry in England is an extreme violation 
 of an economic law which the Cobdenites say cannot be ig- 
 nored with impunity. When the circumstances are consid- 
 ered it is surprising that statesmen should devote their 
 energies to the creation of a condition which must be a con- 
 stant menace to the national welfare. In overcrowding the 
 United Kingdom with a population so largely dependent 
 
 ♦Bellairs, Manchester Cotton Famine and England's Food Supply, 
 ia Hongkong, China, Mail.
 
 222 PROTECTION AND PROGRESS 
 
 upon the outside world for subsistence the British are con- 
 stantly inviting disasters of the kind described, perhaps still 
 worse ones. 
 
 Economists of the Manchester school may shut their eyes 
 to facts like these, but by doing so and by applauding meth- 
 ods which lead to such results they stultify themselves and 
 virtually place the stamp of approval upon attempts to create 
 exotic industries. When they assent to heavy expenditures 
 for an immense navy, the principal object of whose main- 
 tenance is the keeping open of British ports so that the arti- 
 ficial industries of the United Kingdom may not be choked by 
 foreign interference, they are as truly protectionists as those 
 who advocate high duties for the purpose of encouraging 
 home industries. But they are not so rational as the latter, 
 who aim, by making their country self-dependent, to guard 
 against disasters of the kind to which a nation attempting to 
 maintain industries without adequate supplies of raw ma- 
 terials must always be subject. 
 
 The cotton industry of Great Britain is 'not the only one 
 subject to the drawbacks here outlined. It may be sweep- 
 ingly asserted that any country which forces the growth 
 of a population greater than its agricultural resources can 
 maintain is adopting a perilous course which can only be 
 safely pursued by resorting to aggression, and, under such 
 circumstances, only for a limited period. English writers 
 proclaim that Britain is carrying the torch of civilization 
 throughout the world and endeavor to convey the impression 
 that the object of the enormous territorial expansion of the 
 British Empire is to bring law and enlightenment to barba- 
 rian peoples, but no one is deluded by such professions. The 
 most sordid motives lie at the bottom of every external 
 movement of Great Britain and every benefit conferred by 
 that country upon another is paid for in pounds, shillings 
 and pence or their equivalents. 
 
 "It matters not," remarked a recent English review writer, 
 to discuss the academic question of whether the negro is
 
 DEVELOPMENT 223 
 
 happier dancing stark naked under the moon or eating pump- 
 kin under the sun, as Carlyle described him. We want him 
 clpthed because our looms will clothe him ; we want him 
 housed and ornamented because our Sheffield firms will sup- 
 ply the wherewithal. We want his fields to double their 
 produce, and that produce to be of marketable quality, be- 
 cause it is needed by our manufacturers here in England. 
 We deal today witht the commercial side of the question ; 
 the philanthropic dividends we will put aside for the moment. 
 They are concomitants."* In another place the same 
 writer flatly asserts that British philanthropy is generally 
 mixed with rum and gin and gives an account of an African 
 bishop who complained that there was nothing in the fac- 
 tories of his neighborhood to exchange for the products of 
 the natives but the spirituous liquors mentioned. 
 
 Surely a commerce which can only be maintained by 
 resorting to such extremities can hardly be termed natural, 
 nor does it lie in the mouths of those who defend the 
 abnormalities to which reference has been made to criticise 
 the methods of protectionists. A just comparison of the 
 two systems will clearly establish that the results of Cobden- 
 ism have all been in the direction of a distortion of nature, 
 while the protective policy, whenever it has been intelligently 
 pursued, has always tended to a development along natural 
 lines. And this explains why protection has made such head- 
 way. Had it been, as Mr. Gladstone and other free traders 
 have assumed, the policy of protectionists to stimulate exotic 
 industries their efforts must inevitably have failed. 
 
 It has been asserted by eminent free trade writers that 
 the great virtue of the system advocated by them consists in 
 its tendency to safeguard a people against the blunder of 
 engaging in unprofitable industry. Professor Rogers says: 
 "Our contention is that our free trade policy enables us to 
 
 ♦Lugard, New British Markets, Nineteenth Century, September, 
 1895-
 
 224 PROTECTION AND PROGRESS 
 
 arrive at the most accurate estimate of our powers. We do 
 not plant olive or orange groves or vineyards in our climate, 
 for we know that they will not thrive or will not live. No 
 doubt they might be grown in greenhouses. But we are 
 not so foolish as to put such a duty on the foreign produce 
 of olives, oranges and grapes as to encourage native industry 
 in growing them under these adverse and costly conditions, 
 as a consistent protectionist and fair trader would have to 
 do. For it is only a matter of degree between the most 
 plausible protection and the most grotesque illustration of the 
 practice."* 
 
 It is not necessary to again point out that the Cobdenite 
 contention that protection aims at the establishment of exotic 
 industries is in the nature of a setting up of "a. straw man," 
 for nothing has been more conclusively demonstrated by 
 practice than the fact that the very oppositie result is the one 
 which advocates of a protective tariff aim at achieving. No 
 sane protectionist in the United States favors the imposition 
 of a protective tariff unless the encouragement thus extended 
 promises to promote a profitable industry. But it may not 
 be amiss to show that Professor Rogers was in error when he 
 asserted tJiat "the free trade policy of England had enabled 
 the British to arrive at the most accurate estimate of their 
 own powers." 
 
 To substantiate an assertion of this kind it would be 
 necessary to show that the course of British industry has 
 been so well determined that its pursuit is unattended by any 
 other drawbacks than those which ordinarily wait upon the 
 conduct of established occupations. To claim that a people 
 have accurately measured their own powers while constantly 
 losing advantages once gained in industrial fields, and who 
 are under an overpowering dread of the possible outcome of 
 competition with rival nations, is absurd. If the powers of 
 
 ♦Rogers, Industrial and Commercial History of England, p. 408.
 
 DEVELOPMENT 225 
 
 Great Britain had been accurately determined by free trade 
 that country would not have a long record of decayed or 
 decaying industries. 
 
 According to Mulhall the silk industry was in a flourish- 
 ing condition in 1857, ^^e consumption of raw material in 
 that year reaching 10,750,000 pounds and the value of the 
 manufactured fabrics being £21,500,060. Forty-four years 
 earlier, in 1823, the consumption of raw silk was only 
 2,470,000 pounds and the value of the finished product 
 i6,200,ooo. The interval between 1823 and 1857 was marked 
 by a steady advance in the manufacture of silk textiles, and 
 no British industry appeared to have a more promising out- 
 look. The economic literature of the early '50's is filled 
 with references to the prosperity of the manufacturers of 
 British silk, but in 1895 the consumption of raw silk had 
 fallen to 3,900,000 pounds and the value of the textiles 
 produced was £200,000 less than in 1823. 
 
 In 1850 the linen industry of Great Britain consumed 
 21,000 tons of native and 89,000 tons of imported flax. In 
 1895 the quantity of native flax used in the linen factories of 
 the United Kingdom was 12,000 tons and 100,000 tons were 
 imported. The increased consumption of the fiber in forty- 
 five years was only 2,000 tons. Commenting on these facts, 
 Mulhall says : "Of late years the linen trade has been declin- 
 ing, especially as regards home consumption, which averaged 
 eight yards per inhabitant in 1840 and is now less than five 
 yards." The decline here noted is not due to the use of linen 
 falling into disfavor, for the production of other countries, 
 notably Germany, has greatly increased. 
 
 At the beginning of the free trade era in Great Britain 
 there was apparently no more firmly established industry 
 than that of refining raw sugar. Enormous plants erected 
 for this purpose were conspicuous features of Greenwich 
 and other ports. The industry was exceedingly profitable 
 and the consensus of free trade opinion up to a certain period 
 was that it was firmly intrenched. The person who would 
 
 15
 
 226 PROTECTION AND PROGRESS 
 
 have ventured to predict the decadence of sugar refining 
 in the United Kingdom in i860 would have been deemed 
 mad. Yet a few years later a royal commission was ap- 
 pointed to inquire into the causes of the extinction of the cane 
 sugar industries in the British colonies and incidentally to 
 ascertain whether a remedy could be devised which would 
 prevent the total extirpation of the refineries of the United 
 Kingdom. Concurrently, a strong sentiment was created 
 against the policy of foreign countries promoting exports of 
 beet sugar by the payment of bounties, and although the 
 effect was to greatly cheapen the sugar used by the British 
 consumer diplomatic efforts were made by V^ictoria's gov- 
 ernment to induce the beet sugar countries to abandon the 
 payment of bounties. The most recent development in this 
 interesting contradiction of the principles of Cobdenism 
 was a proposal made by Joseph Chamberlain to indemnify 
 the sugar producers in the British colonies against loss, the 
 object being to overcome the obvious advantages enjoyed 
 by the producers of beet sugar. 
 
 These illustrations clearly show that Professor Rogers 
 was seriously in error when he assumed that the system he 
 advocates has assisted the British to accurately determine 
 their powers. On the contrary, by creating the fallacious 
 opinion that the markets of the world are illimitable, and 
 that Providence intended that the British should be the 
 principal if not the only purveyors for them, Britons have 
 been tempted into all sorts of industrial enterprises, in most 
 of which they cannot hope to maintain a permanent footing. 
 They have been encouraged to do this by the teachings of 
 extremists who have, like Rogers, always assumed that 
 temporary dearness in a new country trying to promote man- 
 ufactures meant permanent dearness. They have accepted 
 without question the statement of Mill that a duty on an 
 article which may be more cheaply imported from abroad 
 than it can be manufactured for at home must result in
 
 DEVELOPMENT :i2.^ 
 
 useless labor, and that the extra capital expended in such 
 production is wasted.* 
 
 If nations survived only for a day economy of the kind 
 advocated by Cobden might be deemed rational, but as the 
 possibility of their enduring for centuries is well established 
 statesmen may reasonably take measures for the future of 
 the countries whose destinies they control even at the risk 
 of temporary inconvenience. If the creation of an iron and 
 steel industry is regarded as practicable there is as much 
 warrant for calling it into existence by artificial means as 
 there is for a man sinking a well in an accessible place rather 
 than subjecting his household to the necessity of going a 
 long distance to a brook where the water flows freely and 
 may be had for the taking. It may be the natural method 
 to procure water in the simplest manner and primitive peo- 
 ples still do so, but those recognizing the importance of 
 economizing energy almost instinctively resort to artificial 
 methods of securing supplies of water. That they profit 
 by so doing is self-evident, or the practice would not be 
 continued and refined as the years roll on. 
 
 The artful concealment of the true purposes of pro- 
 tectionists is responsible for many blunders into which prac- 
 tical Englishmen have fallen. The persistency with which 
 Cobdenites have asserted that high tariffs cause dearness 
 has obscured the aim of protectionists, whose object is to 
 promote ultimate and permanent cheapness. It has also 
 tended to create the impression that the existence of a well 
 established industry determines that it came into being 
 naturally. False teachings of this kind have prevented 
 otherwise acute Britons seeing that most of their man- 
 ufactories are purely artificial creations, and that the in- 
 dustrial success of the British is more largely due to their 
 promptitude in availing themselves of the benefits of modern 
 discoveries than to natural causes or superior resources. 
 
 *Mill, Principles of Political Economy, Vol. II, p. 449.
 
 228 PROTECTION AND PROGRESS 
 
 A concrete illustration of the error underlying the 
 assumption that present clearness means permanent clearness 
 is furnished by the growth of the iron and steel industry 
 in the United States. According to Mr, Mill, whose views 
 appear to be shared by all free traders, the Americans made 
 an economic blunder in imposing a high duty upon imports 
 of these commodities. In the passage above quoted and in 
 many others the idea is distinctly conveyed that "all customs 
 duties which operate as an encouragement to the home pro- 
 duction of the taxed article are an eminently wasteful mode of 
 raising a revenue," the reason assigned for this wastefulness 
 being that "an extra cjuantity of labor and capital is expended 
 without any extra result." This, Mr. Mill says, is equivalent 
 to paying people for laboriously doing nothing. 
 
 Such an opinion could only be based on a supposition that 
 the hindrances to cheapness which manifest themselves in an 
 infant industry are incapable of being removed, and that 
 the advantages enjoyed by others in a well established in- 
 dustry cannot be acquired by a resort to artificial methods. 
 Reference to the views expressed by Gladstone, quoted in 
 another part of this chapter, and to those of Rogers, clearly 
 indicate that they believed that industrial conditions were 
 immutably fixed and that all efllorts of new countries to rival 
 old ones by a resort to tariffs must inevitably prove fruitless, 
 because they result in making the conditions of life more 
 difficult by depriving people of the opportunity to buy 
 cheaply. Rogers was so firmly convinced that such a result 
 must ensue from protection that in one of his lectures, after 
 telling the listening students that the tariffs of foreign na- 
 tions had a tendency to hinder British manufacture and 
 trade, he assured them that such hindrance could never be 
 serious, because in protective countries "the law allows the 
 subject of it (protection) to buy one pair of boots where he 
 might buy two pairs, and stints him in many ways."* 
 
 *Rogers, Industrial and Commercial History of England, p. 410.
 
 DEVELOPMENT 229 
 
 The illustration employed was a very unhappy one, and 
 shows the unpractical character of this celebrated author. 
 About the time he made the remarks quoted there was a 
 violent upheaval in the boot and shoe trade in England, the 
 British workers complaining that the imported American 
 product was driving their wares out of the home market. 
 The papers of the English capital contained numerous allu- 
 sions to the trouble, and no rational person could have failed, 
 had he followed the discussion intelligently, to note that the 
 protected boot and shoemakers of America were for some 
 reason or other producing more cheaply than their British 
 rivals. What these reasons were will be made clear in an- 
 other place ; here it is only intended to show the persistence of 
 the free trade belief that protection means absolute and per- 
 manent dearness, and that it seems to survive in spite of the 
 practical demonstration that boots and shoes and other arti- 
 cles whose cost of production was once much higher than in 
 England can now be made more cheaply in the United States 
 than in Great Britain, for, as we have shown, Rogers, in the 
 face of the fact that Americans were the best shod people on 
 the globe at the time he spoke, did not hesitate to intimate 
 that the people of this country lacked shoes. 
 
 In the same way it is still urged that the effect of protec- 
 tion is to make the iron and steel consumed in protective 
 countries dearer than it would have been under free trade 
 conditions, although the market reports conclusively establish 
 the fact that those commodities are cheaper in the United 
 States at present than in Great Britain. An English financial 
 publication, in discussing the future of British trade, summed 
 up the situation so far as this branch of industry is con- 
 cerned when it said : "There is quite a large probability that 
 we may have to fall back upon America at no distant future 
 time to make good our deficient supply of pig iron — on 
 America, once our largest buyer of both pig and finished ma- 
 terials."* 
 
 ♦London Statist, March g, 1898.
 
 230 PROTECTION AND PROGRESS 
 
 Obviously, if Great Britain is obliged to resort to this 
 country for supplies of pig iron it must be because we are 
 able to produce it more cheaply than it is produced elsewhere. 
 Thus, the whole Cobdenite contention that protection m.eans 
 permanent dearness is effectually disposed of. No wonder 
 the editor of the journal quoted from delivered himself of 
 the observation which concludes his sentence. Educated to 
 believe that the results of protection were to hamper industry 
 and to keep the countries resorting to it in a condition which 
 would not permit them to compete with nations practicing 
 free trade, he must naturally have felt surprised when he 
 contemplated the evidence furnished by tables of prices and 
 imports, which proved conclusively that the United States 
 was able to undersell Great Britain in her own iron market. 
 
 The facts here related, and numerous others which might 
 be cited to show that the British home market is being stead- 
 ily encroached upon by manufacturers operating in protec- 
 tive countries, such as the United States and Germany, raise 
 the question whether an industrial invasion of this kind 
 amounts to a demonstration that the British in all those lines 
 in which they now find themselves unable to compete with 
 foreigners had made the blunder of attempting to domesti- 
 cate exotic industries. 
 
 The confident assertion of Rogers that the practice of 
 free trade enables a people to determine with exactness the 
 extent of their industrial powers indicates the presence of a 
 belief in his mind at the time he wrote that the then flour- 
 ishing industries of Great Britain were so firmly established 
 that they could not be successfully competed with by for- 
 eigners, least of all by such as resorted to protective tariffs, 
 which he assumed must permanently increase the cost of 
 production. His illustrations were designed to show this, 
 and his argument, if followed to its logical conclusion, im- 
 plied that Great Britain had only won success when she pur- 
 sued those industries which could be maintained in perma- 
 nent profitable rivalry with those of other nations. All indus-
 
 DEVELOPMENT 231 
 
 tries incapable of meeting competition he placed in the cate- 
 gory of exotics, and they were, therefore, to be shunned. 
 
 If Professor Rogers had foreseen the consequences which 
 must ensue to the British people from adhering to the idea 
 that industries requiring protection do not deserve to exist 
 he would certainly have modified his views. No matter how 
 much prosperity may be figured out for a nation by the a 
 priori method, it is, after all, the practical result which must 
 determine whether a system has been successful. The Cob- 
 denites may succeed in deceiving themselves into believing 
 that Great Britain is in a flourishing condition, because she 
 is able and does constantly buy an enormously greater quan- 
 tity of products from foreigners than she gives in return, but 
 sensible men recognize that the growth of imports and the 
 relative decline of exports is a menace to the future prosper- 
 ity of the United Kingdom. When friendly critics thus diag- 
 nose the industrial condition of Great Britain the people of 
 that country may well take warning: "For a time," says a 
 writer in an English review, "England, no doubt, prospered 
 pecuniarily and great fortunes were made ; but now, with im- 
 ports almost double the exports, v/ith the imports steadily 
 increasing and the exports steadily diminishing, the nation is 
 not even gaining in her manufactures, but is losing to other 
 nations every day."* 
 
 The same writer says : "The present temporary pros- 
 perity in England, which is not based upon a solid or perma- 
 nent foundation, unfortunately tends still more to create the 
 belief in the public mind that the state of affairs in England is 
 satisfactory." Reference is here made to the delusion that 
 the constant draft made upon foreigners for their products is 
 a sign of present national prosperity, whereas it merely 
 represents the returns upon the profitable results of a previ- 
 ous era of prosperity. Sir Howard Vincent, in a letter to 
 
 *Denison, The Present Situation of England, Nineteenth Century, 
 December, 1897.
 
 232 PROTECTION AND PROGRESS 
 
 the London Times published toward the close of the year 
 1896, indicated the unsatisfactory character of the Cobdenite 
 claim that excessive imports were an evidence of prosperity 
 by pointing out that £80,504,991 worth of foreign manufac- 
 tures were imported into the United Kingdom in a single 
 year and that these importations represented at least £40,- 
 000,000 paid to foreign workers which might have been 
 earned by Britons. 
 
 That the money paid out for this vast quantity of man- 
 ufactured articles imported into Great Britain represents "in 
 part the interest upon millions sent to foreign countries to 
 enable them to compete with the British" is undoubtedly true, 
 but it is questionable whether the indirect suggestion that 
 Sir Howard makes, that a period should be put to the folly 
 of depriving British workingmen of an opportunity to earn a 
 living by making the importation of manufactured articles 
 into the United Kingdom more difficult, can be acted upon. 
 A consideration of all the circumstances shows that Great 
 Britain has entered an industrial cul de sac, from which re- 
 treat is impossible except by the method indicated by Mallock 
 ■ — 'the drastic one of depopulation.* This frank controver- 
 sialist does not hesitate to say that if the conditions arise 
 which prevent the maintenance of a greater population than 
 15,000,000 in the British Isles the surplus must betake them- 
 selves to other countries or perish from starvation. It is a 
 forbidding future to contemplate, but the evidence is accu- 
 mulating that it is a condition the British must face, and the 
 strongest link in the chain is the growth of imports of man- 
 ufactured articles. 
 
 Consider what this expansion means. Primarily, it 
 amounts to a refutation of the Cobdenite asumption that 
 Providence designed the United Kingdom to be the work- 
 shop of the world, for the growing list of articles manufac- 
 tured in foreign countries which now find a ready sale in 
 
 *Mallock, Altruism in Economics, Forum, August, 1896.
 
 DEVELOPMENT 233 
 
 Great Britain embraces many things which the British once 
 imagined they were specially fitted to produce. The fact 
 that adherents of the Manchester school cheerfully proclaim 
 that it is wise to buy manufactured articles from foreigners 
 if they can produce them more cheaply than the British may 
 serve for a while to disguise the actual condition, but ulti- 
 mately the sound sense of the nation will pierce the deception 
 which surrounds the doctrine that the consumer is the chief 
 person to consider and discover the fallacy underlying the 
 free trade assumption that the interests of producing and 
 non-producing consumers of a country are identical. As the 
 tendency to increase imports grows the British people will 
 more readily be able to perceive that the excess of imports 
 over exports represents the fruits of past prosperity in which 
 the present and coming generations of workers can and will 
 have but little share. 
 
 The growth of imports of manufactured articles into the 
 United Kingdom will also dissipate the optimistic idea 
 inculcated by the Cobdenites that masses of trained workers 
 can easily adapt themselves to changed conditions. There 
 is abundant proof furnished by the experience already ac- 
 quired that even when the conditions are propitious the 
 changes forced upon a people by improved processes of 
 manufacture are effected with great difificulty. If this is the 
 case when a nation's progress in trade and manufacturing is 
 both relatively and absolutely great what may we not expect 
 when the conditions are reversed? 
 
 It has recently been pointed out by a competent British 
 authority that the United Kingdom, in order to maintain, 
 not its relative position, but merely its footing in the corri- 
 merce of the world, must, "under the present conditions of 
 population and manufacture," increase its exports by at 
 least £2,600,000 annually.* As already shown, British 
 exports exhibit no such increase ; on the contrary, they 
 
 ♦Kershaw, Future of British Trade, Fortnightly, November, 1897.
 
 234 PROTECTION AND PROGRESS 
 
 show an absolute decline, although of late years they have 
 embraced large quantities of machinery shipped to foreign 
 countries to be used in making goods to be sold in direct 
 rivalry with British manufacturers or to supply peoples 
 formerly dependent upon Great Britain for manufactured 
 articles. And, as another writer has significantly pointed 
 out, a very large proportion of British exports of the present 
 day is made up of coal sent to other countries where they 
 are used to provide the power to move the machinery which 
 manufactures goods in competition with the manufacturing 
 plants in the United Kingdom. The fact must also be 
 noted that no inconsiderable part of the British value of 
 exported articles is represented by ships, many of which 
 are employed by the nations buying them in competition with 
 the carriers of Great Britain. 
 
 No writer taking into consideration all the facts here 
 presented can avoid drawing the inference that at some 
 future day Great Britain will have to pay a heavy penalty 
 for the unnatural expansion which her economists have 
 endeavored to convince themselves has been entirely unarti- 
 ficial. The tremendous investments made by the British in 
 foreign countries during the period when their state of 
 preparedness gave them an overwhelming advantage over 
 rivals will for a while inure to the benefit of the non-pro- 
 ducing income class of Great Britain because the obliga- 
 tions of the debtor peoples of manufacturing countries will 
 be repaid by shipments of manufactured articles which must 
 of necessity be produced more cheaply in those lands with 
 great resources of raw materials and inexhaustible supplies 
 of food than they can be in an admittedly dependent country 
 such as the United Kingdom. 
 
 But while the income classes are enjoying the cheaply 
 manufactured articles of foreign countries the producers of 
 the United Kingdom must sufifer. Many of their present 
 avenues of employment will be closed and the population
 
 DEVELOPMENT 235 
 
 will gradually dwindle away. The "cheap loaf" will avail 
 nothing because it will be relatively dear. 
 
 The cheapening due to the development of agriculture 
 has not been wholly enjoyed by the workers in English fac- 
 tories ; they have experienced some of the advantages which 
 flow from accessibility to supplies of cheap food products 
 and raw materials, but the greatest benefits by far have 
 been, and must in the future be, experienced by the people 
 of the countries where the workers in factory and field have 
 been brought into close proximity. As manufacturing de- 
 velops in the United States the demand for the products of 
 American farms will increase until ultimately we shall con- 
 sume the whole of the domestic supply. We shall be able 
 to do this because we can afiford to pay more for food and 
 raw material than peoples living at a great distance from the 
 source of supply, and when we do so we shall perforce be 
 compelled to pay our debts with our cheapest products, 
 which, under the changed circumstances, must be manufac- 
 tured articles. 
 
 The optimistic free trader has assumed that such a 
 condition of affairs could never arise. He has convinced 
 himself that the marl^ets of the world are illimitable and 
 that some nations would always remain in a contented state 
 of dependence upon more energetic and better equipped 
 peoples. But such conclusions are vitiated by present experi- 
 ence, which shows that there is a constant st'-uggle going on 
 between the countries with established manufacturing indus- 
 tries for the comparatively insignificant trade of the peoples 
 who now occupy a lower plane of civilization than that which 
 distinguishes the advanced western industrial nations. It 
 is impossible that the outlet which the needs of unprogres- 
 sive peoples supply will be greatly increased in the near 
 future. The consumptive ability of this class increases with 
 incredible slowness and their demands are always for those 
 goods which can be provided in great abundance by a large
 
 236 PROTECTION AND PROGRESS 
 
 number of competitors, requiring, as they do, but a very 
 low degree of skill in their production. 
 
 There is another fact which those who have contended 
 that the world's markets are illimitable have not sufficiently 
 considered, namely, the enormous improvements in the art 
 of manufacturing which have seemingly outstripped the 
 power to effectively consume. It is possible that at some 
 future day better modes of distribution may relieve the situa- 
 tion produced by this tendency, but the immediate effect 
 is overproduction. There is no doubt whatever in the minds 
 of competent observers that Great Britain could without 
 difficulty increase her plants for the manufacture of textile 
 fabrics sufficiently to supply all the markets of the world 
 with cotton cloth on the basis of present requirements. 
 The same may be said of Germany and the United States, 
 and if the proper incentive is furnished the near future will 
 exhibit other countries in an equally forward condition. 
 This being the case, it is inevitable that the struggle for the 
 trade of "barbarians" must be severe, and it is not unlikely 
 that it will be intensified by many at present dependent 
 Eastern peoples imitating the methods of Western industrial 
 nations. No doubt such efforts would be accompanied by 
 a greatly enlarged consumption of the peoples adopting the 
 habits of modern industrial nations, but their ability to 
 provide for their own needs is likely to keep pace with such 
 development, and it is not at all probable that any change 
 in the present habits of Orientals would favorably affect 
 the fortunes of countries illy supplied with raw materials 
 and food products. 
 
 In the industrial readjustment that is now taking place 
 the tendency to eliminate the waste of energy and fuel 
 involved in the unnecessary transportation to and fro of 
 raw materials, food supplies and finished articles will be 
 constantly accelerated. One of the effects of this elimination 
 will be the relative diminution of foreign exchanges. For- 
 eign trade, which has increased hitherto in a greater ratio
 
 DEVELOPMENT 237 
 
 than population, is likely in the near future to hardly keep 
 pace with the growth of nations. The propensity of peoples 
 to produce all they can at home will grow stronger as the 
 fallacy of the idea that one nation is better fitted than another 
 for mechanical pursuits is more clearly recognized. 
 
 That this perception will one day become general there 
 can be no doubt. There is a rapidly accumulating body of 
 information tending to show that there is a flaw in the com- 
 monly accepted economic theory that some people are natu- 
 rally better fitted for manufacturing purposes than others, 
 and it is now seen that the greater efficiency displayed by 
 certain peoples is entirely due to acquired abilities and not 
 at all to superior natural endowments. Further experience 
 will certainly confirm the unsoundness of the opinion that a 
 nation can securely depend upon the superior skill of its 
 artisans to maintain its commercial position, and it will also 
 demonstrate, as people all over the globe acquire capabilities 
 which have hitherto been regarded as impossible of attain- 
 ment by themselves or those who had hoped to see 
 them remain in a state of perpetual dependence, 
 that the really exotic industries of the world are 
 those which have been created and are perpetuated 
 in countries where manufacturing can only be carried on 
 by incurring the waste of unnecessarily moving raw materials 
 and food supplies from points where they might be effectually 
 and economically utilized.
 
 CHAPTER XII. 
 
 LABOR EFFICIENCY. 
 
 INDUSTRIAL CAPABILITY AN ACQUIRED, NOT A NATURAL, 
 
 FACULTY. 
 
 The argument that some nations are naturally more capable than 
 others — Mill's tribute to American labor — Political boundaries 
 do not determine the skill of a people — A transplanted Irishman 
 becomes a capable worker in the United States — Capacity of 
 uncivilized peoples to acquire manufacturing ability — The part 
 played by specialization in promoting labor efficiency — The 
 habit of dependence fatal to advancement — The woes of the 
 early Virginians brought about by devotion to the most profit- 
 able industry — Illustrations derived from ancient history — The 
 fall of ancient civilization the result of industrial antagonisms — 
 What Greece borrowed from the civilizations of an earlier pe- 
 riod — Division of labor in Ancient Rome — Manufacturing gen- 
 erally practiced throughout the Roman Empire — The dissemi- 
 nation of industrial knowledge by Greeks and Romans — Ra- 
 pidity with which Greek colonists established industries in their 
 new homes — Gibbon's mistaken estimate of Russian capacity — 
 Statistics showing that foreigners form the bulk of the operatives 
 in American cotton factories. 
 
 Very early in the free trade discussion it was perceived 
 by some of the ablest of the advocates of the theory that 
 Providence had destined Great Britain to be the workshop 
 of the world that an answer would have to be made to those 
 who argued that an economic waste resulted from the un- 
 necessary movement of raw and finished articles. Accord- 
 ingly the efficiency of labor idea was advanced and the claim 
 was boldly made that British workingmen were naturally 
 more skillful than those of other countries, and that there- 
 fore it would be true economy to entrust to them the 
 
 238
 
 LABOR EFFICIENCY. 239 
 
 lucrative business of converting raw products into finished 
 articles. 
 
 Curiously enough this theory, which in its inception was 
 designed to fortify the British contention that the world 
 would profit by availing itself of the natural superiority of 
 the manufacturing classes of Great Britain, is now made to 
 do duty in explaining away the damaging fact that in many 
 lines of industry Americans, in spite of the high protective 
 tariff which it was confidently asserted would prevent any 
 such result, are enabled to produce more cheaply than the 
 British. Whenever it is shown that the United States can 
 manufacture an article more cheaply than it can be man- 
 ufactured in England the free traders hasten to explain that 
 it is due to the greater efficiency of American labor. 
 
 That the people of a country may become more efficient 
 as producers of this, that or the other article is doubtless true, 
 but that such efficiency is, as implied, due to superior natural 
 ability there is no reason to believe. It would perhaps be 
 a mistake to assert that all peoples who have shown the 
 capacity to reach the civilized stage of existence are equally 
 capable of developing their industrial qualities to the highest 
 point, but there can be no doubt that a large part of those 
 now considered incapable, if the artificial obstacles to their 
 advancement were removed, could attain a position, by the 
 exercise of proper efforts, which would make them formid- 
 able rivals of those who now enjoy supremacy in the manu- 
 facturing field. 
 
 In order to thoroughly comprehend the nature of the 
 misconceptions underlying the theory of the efficiency of 
 labor it will be well to examine some of the earlier opinions 
 of the Cobdenites and to show how closely they resembled 
 those of the ancients, who also appear to have been con- 
 vinced that a political boundary in some inscrutable manner 
 made those living within it more skillful and apt than 
 those who had the misfortune to be born on the other side of 
 the border. It is noteworthy that those who accepted this
 
 240 PROTECTION AND PROGRESS 
 
 idea in antiquity and those who have attempted in the 
 nineteenth century to convert the term "efficiency of labor" 
 into an economic formula were alike unmindful of the fact 
 that a national boundary does not establish that all those 
 who live within it are of one race. When Pliny or Athenaeus 
 many centuries ago spoke of the skill of the inhabitants 
 of a particular country they made no distinction between 
 the various races subject to the sovereign under whom 
 they lived. The products of Egypt were attributed to 
 Egyptian skill, although they may have been due to the 
 cunning of the large infusion of foreigners who made that 
 fertile land their home. In the same way Mr. Mill credits 
 to P)ritish skill all the productions of Great Britain, and 
 similarly to American skill any superiority displayed by the 
 workers who make their home in the United States. 
 
 In his chapter on "Profits" Mill said: "Labor, though 
 cheap, may be inefficient. In no European country are 
 wages so low as they are (or, at least, were) in Ireland, 
 the remuneration of an agricultural laborer in the west of 
 Ireland not being more than half the wages of even the 
 lowest paid Englishman, the Dorsetshire laborer. But if 
 from inferior skill and industry two days' labor of an Irish- 
 man accomplished no more work than an English laborer 
 performed in one, the Irishman's labor cost as much as the 
 Englishman's though it brought in so much less to himself." 
 In the following paragraph he says, contrasting the con- 
 dition of the wage earner in a country with an abundance 
 of land and his state where the land is overpeopled: "The 
 opposite case is exemplified in the United States of America. 
 The laborer there enjoys a greater abundance of comforts 
 than in any other country of the world, except some of the 
 newest colonies ; but owing to the cheap price at which these 
 comforts can be obtained (combined with the great efficiency 
 of labor) the cost of labor to the capitalist is considerably 
 lower than in Europe."* 
 
 *Mill, Principles of Political Economy, Book II, Chap. XV.
 
 LABOR EFFICIENCY. 241 
 
 The complicated discussion in which these references 
 to efficiency are imbedded may divert the attention of the 
 general reader from the fact that Mill undoubtedly assumed 
 that the inferiority of Irish laborers was due to a race 
 defect, while the superiority of the American was attributed 
 by him to some natural cause. His high endorsement of the 
 statement of Lord Brassey, which has become an economic 
 classic, that the British navvies taken by contractors to 
 foreign countries to v/ork on railroads were infinitely more 
 efficient than the natives who worked by their side, indicates 
 that he also believed that Britons were in some way naturally 
 better fitted for such occupations. There is no reason to 
 discredit Lord Brassey 's statement that one British navvy 
 performed as much work as three Orientals, but the accept- 
 ance by Mill of the implied assumption that the ability of 
 the navvy was due to his being a Briton was hasty and ill 
 considered. 
 
 That the navvy's ability is wholly an acquired one and 
 that under changed conditions the Oriental may become 
 equally efficient as a railroad or canal builder must be evi- 
 dent to anyone who has given the subject attention. "Dr. 
 Franckland, in his "Comparative Value of Foods," cites a 
 report received from J. Talmage Wyckoff, an American 
 stationed at Bastah, at the head of the Persian Gulf, who 
 states that there are no finer specimens of human physique 
 to be found than are characteristic of a tribe in the vicinity 
 of ancient Nineveh. Many of them earn a livelihood as 
 laborers on the light draft steamers plying on the river 
 Tigris from Bagdad to Bastah. They carry the heaviest 
 burdens from boat to shore, bales of Manchester cotton 
 weighing from 500 to 1,000 pounds being an ordinary load.* 
 Is there any reason to believe that laborers capable of such 
 performances could not with a little training equal the 
 exploits of the British navvy, who, by the way, may have 
 
 ♦Talmage, Article "Rice," One Hundred Years of American Com- 
 merce. IQ
 
 242 PROTECTION AND PROGRESS 
 
 been an Irishman transplanted from his own soil, where the 
 condtions were fatal to efficiency of labor, to some place 
 else where the opportunity was afforded him to test and 
 exercise his capabilities. 
 
 It has been wittily remarked that "a man is not a horse 
 because he is born in a stable." It may not be so witty 
 to call attention to the fact that every man who finds 
 employment in this country is not an American. Yet the 
 economists, when the efficiency of labor question is being 
 discussed, invariably assume that such is the case. As an 
 illustration of this general tendency we may take this passage 
 from Mill : "In America wages are much higher than in 
 England, if we mean by wages the daily earnings of a 
 laborer ; but the productive power of American labor is so 
 great — its efficiency, combined with the favorable circum- 
 stances in which it is exerted, makes it worth so much to 
 the purchaser that the cost of labor is lower in America 
 than in England, as is proved by the fact that the general 
 rate of profits and of interest is very much higher."* 
 
 Anyone at all familiar with labor conditions in the 
 United States is perfectly aware that there is no foundation 
 for the assumption that the greater productiveness of a 
 cotton factory in this country is due to the superior ability 
 of American operatives, for it is notorious that our weaving 
 and spinning mills are filled with foreign-born operatives 
 who attend as many looms or machines as the natives work- 
 ing by their side. In New England a large proportion of the 
 workers in mills are French Canadians, and so far as we 
 are aware nO' distinction is made between them and the 
 American employes. If the latter have displayed any greater 
 ability such writers as Jacob Schoenhoff who have attempted 
 to elaborate the efficiency of labor theory have not mentioned 
 the fact. They simply enlarge on the output and show that 
 in the United States a given number of operatives produce 
 
 *Mill, Principles of Political Economy, Book III, Chap. XXV.
 
 LABOR EFFICIENCY. 243 
 
 more cloth than a similar number in Great Britain or any 
 other country, and from that fact deduced that American 
 labor is more efficient, hence more cheap than that of other 
 countries. 
 
 There is no more reason for this assumption than there 
 was for that of Mill regarding Irish labor. Transplanted 
 to this country, the Irishman has by some means become 
 efficient. As a farm hand he displays as much industry 
 and performs the tasks assigned to him with the same facility 
 as other workers. When Mulhall pointed out that "if the 
 economy of labor was as well understood in all countries as 
 in the United States, where each farm hand cultivates twenty- 
 one acres, the tilled area of Europe would be two and one- 
 half times as great as it is," he was paying a tribute to the 
 capacity of vast numbers of Irishmen, driven from their 
 own homes by the hard conditions imposed upon them by 
 their English conquerors to this country, where they figure 
 as Americans. The Irishman of the west of Ireland who, 
 according to the statement of Mill, "did not bring more 
 than half the wages of even the lowest paid Englishman," 
 when he put his foot on our shore suddenly became endowed 
 with such capabilities that his labor was regarded as more 
 efficient than that of the best paid English farm hand. 
 
 There is undoubtedly an error in these contradictory 
 assertions. The Irishman who was so incapable in his own 
 land as to not deserve half the wages paid to the most 
 poorly compensated farm laborer of England could hardly 
 have been converted by the simple process of crossing the 
 ocean into a more efficient laborer than the best England 
 could boast. There must be some other explanation of the 
 fact that laborers are better paid in the United States than 
 in England and that those of England receive a greater 
 compensation than their fellows gain on the Continent than 
 that afforded by the dubious term "efficiency of labor," 
 which always carries with it the implication that the greater 
 or less efficiency exhibited is due to racial causes. The
 
 244 PROTECTION AND PROGRESS 
 
 errors for which the misuse of the term is responsible are 
 so numerous and so serious it becomes the duty of the 
 economist to thoroughly examine them. This duty is made 
 all the more imperative because erroneous assumptions of 
 this kind have a tendency to retard universal progress by 
 crystallizing the belief that obstacles which are easily re- 
 moved by patient application are natural defects. It is well, 
 therefore, to attempt to dispel an error the acceptance of 
 which would deter capable peoples from putting forth their 
 best endeavors to acquire and practice all the known arts. 
 
 Reflection will satisfy the candid inquirer that the accept- 
 ance of the theory of labor efficiency as interpreted by the 
 Cobdenites would prove a fatal barrier to the acquisition 
 of manufacturing skill by a backward people. If the assump- 
 tion that the Americans or the English are the possessors 
 of a natural quality which other peoples could never hope 
 to artificially acquire was sound, and the doctrine that true 
 economy demands that a people who cannot manu- 
 facture as cheaply as those who are supposed to 
 enjoy the natural superiority was unconditionally accepted, 
 the possessors of the assumed natural advantage would enjoy 
 a perpetual monopoly. But there is absolutely no foundation 
 for the belief that one set of people may perpetually enjoy 
 an advantage over others in manufacturing because of 
 natural superiority ; the evidence is entirely one-sided on this 
 point, and it shows conclusively that the most skillful peoples 
 are those who practice arts inherited from remote ancestors 
 who acquired their skill with infinite toil and pains, and that 
 their heirs are constantly adding to their knowledge. The 
 testimony is equally conclusive that all the races which have 
 reached the stage we regard as civilized are capable of 
 advancement, and that some peoples still in a state of 
 barbarism bordering on savagery, and others in an entirely 
 savage condition, may speedily be converted into skilled 
 artisans. The instances of African negro slaves acquiring 
 civilized arts are not rare, and where the individuals show
 
 LABOR EFFICIENCY. 245 
 
 a capacity to acquire, the inference is fair that the whole race 
 may lift itself up. 
 
 Professor Taussig, in a recent discussion, uses an illus- 
 tration which suggests why certain peoples advance and 
 others remain stationary. "A set of porters," he says, 
 "making a profession of carrying packs develop their muscles 
 and wind to an extraordinary degree and become capable 
 of carrying those heavy burdens which astonish travelers 
 in backward countries. Yet their achievements are as noth- 
 ing compared with those of the successive divisions of labor. 
 When one set of men attend to the making of roads, another 
 to the rearing of horses, another to the procuring of iron 
 and timber, others to wheels, wagons, harness — we get in 
 the end, through transportation by wheeled vehicles, an 
 enormous diminution in the labor required for a given 
 result."* 
 
 If we pursue the subject further we shall find that the 
 nations containing the men capable of carrying great burdens 
 on their backs and who make no effort to change the system 
 of transportation are tacitly accepting the doctrines of Cob- 
 denism. The countries in which they flourish are exclu- 
 sively those which consciously or unconsciously act on the 
 assumption that it would be impossible for them to compete 
 with nations having established industries. No people im- 
 bued with the idea of self-dependence could fail to evolve 
 those divisions of labor which are essential to the production 
 of a vehicle to take the place of the pack; and it may be 
 added that the desire and the determination to overcome the 
 drawbacks of packing must be present in order to effect a 
 transition to the easier and more serviceable mode of trans- 
 portation. 
 
 That this desire is not always present in peoples belong- 
 ing to advanced nations, or that it may easily be repressed by 
 habits of dependence, is shown by the experience of the 
 
 'Taussig, Capital and Labor, p.
 
 246 PROTECTION AND PROGRESS 
 
 Virginian colonists already cited. "It would be inferred," 
 says a modern historian, "from the inventories of that period 
 that there was no vehicle in Virginia in the seventeenth 
 century resembling a carriage, but from other sources it is 
 learned that this means of locomotion was not unknown 
 to the colony. Such a vehicle seems to have been in the 
 possession of a few very wealthy persons."* Here we have 
 the spectacle of a colony composed of men from one of the 
 most advanced of European states, transplanted to a country 
 abounding in all the requirements which Taussig indicates 
 are necessary to the growth of the more convenient sort of 
 transportation — the best of timber, iron in abundance, skins 
 and hides which might be employed in harness making — 
 neglecting them to such an extent that carriages were a 
 rarity a century or more after the planting of the colony. 
 
 Not only were the means of transportation deficient in 
 this colony, but the people, through their habit of depend- 
 ence, actually lost the knowledge of the simplest manufac- 
 turing arts. They were so wholly devoted to the production 
 of a single crop — thus strictly conforming to the advice of 
 the modern economists, for it was certainly more profitable 
 at the time to produce tobacco in Virginia than to engage in 
 other pursuits — that they were compelled to import from 
 abroad the commonest articles of household use. They ate 
 from wooden trenchers made in England from timber im- 
 ported from the colonies and re-exported in the form of fin- 
 ished articles, and actually, though surrounded with forests, 
 swept tiieir floors with British-made birchen brooms. So 
 destructive to all manufacturing progress was the habit of 
 dependence that as late as the eighteenth century the colonists 
 of Virginia were unable to produce the commonest woolen 
 cloths. What little cloth was woven was inferior, and it was 
 never made except under the spur of necessity. The people 
 were so disinclined to manufacturing and made so little effort 
 
 ♦Bruce, Economic History of Virginia, Vol. II, p. 238.
 
 LABOR EFFICIENCY. 247 
 
 to acquire skill that even when suffering from the effects of 
 the overproduction of their single staple — tobacco — it did 
 not occur to them that their hard condition might be relieved 
 by turning their attention to other industries. 
 
 In this case of retrogression we have an illustration which 
 abundantly confirms the theory that a people, no matter what 
 their origin or how far advanced they may be, if they wisb 
 to attain wealth and power must encourage an industrial 
 system which promotes local, state or national independ- 
 ence. Dependence upon one or a few resources is fatal to 
 progress ; complete integration is the goal a nation should 
 aim at. That it can be reached by every people capable of 
 conceiving a desire for industrial independence, and who at 
 the same time are provided with essentive natural resources, 
 there can be no doubt. 
 
 History, ancient and modern, if taken in its broader 
 aspect, is one continuous recital of the efforts of peoples to 
 achieve industrial independence and of other nations to check 
 the effort to bring about such a result. In the very dawn of 
 Roman national life we discover traces of commercial strug- 
 gles of this kind. The first treaty of peace consummated be- 
 tween Carthage and Rome has the impress of a commercial 
 settlement. By it the Romans "obtained the privilege of 
 freely trading like other nations in Sicily, so far as it was 
 Carthaginian ; and in Africa and Sardinia they obtained at 
 least the right to dispose of their merchandise at a price fixed 
 with the concurrence of the Carthaginian community." and 
 "the privilege of free trading seems to have been granted 
 to the Carthaginians at least in Rome, and perhaps in all 
 Latium."* 
 
 Mommsen, commenting on the fall of civilizations ante- 
 rior to that of Rome, says their fate "was but the fulfillment 
 of an unchangeable and therefore endurable destiny." Per- 
 haps he was right in this assumption, but it is doubtful 
 
 ♦Mommsen, History of Rome, Book II, Chap. VII.
 
 248 PROTECTION AND PROGRESS 
 
 whether the reader of his learned liisory will draw the con- 
 clusion without having pointed out to him that the fate which 
 overtook the ancient civilizations was in almost every in- 
 stance the result of trade antagonisms, and not due to a mere 
 lust for conquest, as is generally assumed. No acute stu- 
 dent can fail to discover that it was the pressure of popula- 
 tion which converted the Romans into an aggressive and 
 conquering nation, nor, if he examines closely, can he escape 
 the inference that it was the tendency of the people who arc 
 mostly thought of as a nation of warriors to absorb all the 
 profits of industry in the ancient world. No more egregious 
 error exists than that contained in the assumption that the 
 Roman object was the military conquest of foreign peoples 
 for the purpose of stripping and taxing the conquered peo- 
 ples. Doubtless the demands of the government upon the 
 provinces were often excessive, but the evidence is over- 
 whelming that the chief purpose of the conquerors was the 
 extension of Roman trade. 
 
 It would require too much space to fully demonstrate the 
 commercial character of the Romans and to show how com- 
 pletely their military operations were dominated by the neces- 
 sity of affording opportunities to a growing population for 
 industrial expansion. The discussion would be an inter- 
 esting one, but the relation of the story, while it might 
 strengthen the argument that the history of the world is 
 merely a narration of the industrial evolution of nations, is 
 not absolutely essential. We may accept the views generally 
 expressed by historians and still find abundant evidence 
 that since the dawn of history there has been an 
 unceasing effort on the part of peoples devoid of skill to 
 acquire the arts which they clearly perceived made rivals who 
 possessed them more wealthy and powerful. No one can 
 read the account of the growth of great states from feeble 
 beginnings without realizing that the advances in most cases 
 were the result of industrial imitation. The story disclosed 
 to us by the discoveries in the Mycenaean and Trojan ruins
 
 LABOR EFFICIENCY. 249 
 
 is a narrative of the transference of the arts of the Orient to 
 the West, a trifle obscure at present, but on the whole suf- 
 ficiently distinct to enable us to comprehend that much of 
 the Greek many-sidedness of a later period was inherited and 
 not indigenous. 
 
 "As long as we had evidence," says Professor Manatt, 
 who made a special study of Mycenaean civilzation, "only in 
 Schliemann's city, strong and opulent indeed, but insignifi- 
 cant in size, and with everything to show an infinitely earlier 
 stage of culture — it required truly eclectic fancy to set the 
 Epic antagonists face to face. Today, however, that Burnt 
 City is important mainly as a witness that perhaps a thousand 
 years before Mycenae was built the Hissarlik hill was already 
 a seat of ancient power, so that the larger, stronger Troy we 
 now know was at once the heir of the hoary East, and flour- 
 ishing at the very moment when we find Mycenae in her 
 golden prime."* 
 
 Mycenae, according to Arthur J. Evans, played a part in 
 molding European arts which it would be difficult to exag- 
 gerate ; or, as we prefer to put it, the different peoples of the 
 world with whom the Mycenaeans came into contact worked 
 out their destinies by appropriating the ideas and imi- 
 tating the achievements of the Mycenaeans. Evans says : 
 "Beyond the limits of its original seats primitive Greece and 
 its islands and the colonial plantations thrown out by it to 
 the west coast of Asia Minor, to Cyprus and in all probability 
 to Egypt and Syria, we can trace the direct diffusion of M)^- 
 cenaean products, notably ceramic wares, across the Danube 
 to Transylvania and Moldavia. The Mycenaean impress is 
 very strong in southern Italy and Sicily. More isolated 
 Mycenaean relics have been found still further afield in Spain 
 and even the Auvergne, where Dr. Montelius has recognized 
 an old trade connection between the Rhone valley and the 
 Eastern Mediterranean in two bronze double axes of the 
 Aegean form." 
 
 *^anatt, Mycenean Age, p. 360.
 
 250 PROTECTION AND PROGRESS 
 
 We do noL need to inquire too closely whether the bronze 
 double axes referred to by Montelius were passed into the 
 valley of the Rhone directly by the Mycenaeans or whether 
 they reached the people of that region by the roundabout 
 course of trade. The Phoenicians who carried the wares of 
 their own and those of other countries afar by sea may have 
 passed these evidences of early Aegean skill to a port on the 
 Mediterranean from whence they may have found their way 
 to the interior. The only point sought to be made is that 
 the Auvernians, whom the Romans were pleased to designate 
 as barbarians, were not slow to borrow and practice the arts 
 brought to them by strangers. 
 
 Caesar commented upon the peculiar skill displayed by the 
 Celts in imitating any model or executing any instruction 
 issued by him,* and Mommsen tells us that "the Auvernians 
 had attained to extraordinary wealth, and that they had a 
 comparatively high standard of civilzation" before the Ro- 
 man occupation of their territory. f 
 
 It is evident that the German scholar, who doubtless at- 
 tempted to do the Celts justice, underrated their achieve- 
 ments. But his investigations and conclusions are far reach- 
 ing enough to establish the fact that Gaul had advanced suf- 
 ficiently before her absorption into the Roman Empire to 
 work out her industrial destiny, and that the country 
 owed less to the conqueror than is generally supposed by 
 those who accept the vague and glittering phrase that the 
 Roman arms carried civilization to barbarous peoples. When 
 Mommsen tells us that the Romans "reaped the benefit of 
 the respectable beginnings of Hellenic civilization in Gaul," 
 and that "trade and commerce paved the way for conquest,"! 
 we have a right to assume that these respectable beginnings 
 — it is absurd to speak of them as beginnings — would have 
 
 *Csesar's Commentaries. 
 
 ■j- Mommsen, History of Rome, Book IV, Chap. V. 
 
 {Ibid, Book V, Chap. VII.
 
 LABOR EFFICIENCY. 251 
 
 led to a development as useful as that of the conqueror if 
 they had not been interfered with. 
 
 We are confirmed in this impression when we turn to an- 
 cient writings. The works of Strabo abound in references 
 to the industrial achievements of peoples we are too apt to 
 consider as being little better than savages at the time Rome 
 subjected them to her power. In assuming that Rome car- 
 ried the arts and civilization to Gaul and Spain we overlook 
 the fact that Pliny describes his countrymen as "a people 
 which has never shown itself slow to adopt all useful arts."* 
 All is a very comprehensive word and appears to have been 
 used understandingly by Pliny, who does not permit us to 
 retain the impression that Rome borrowed solely from Greece 
 and Egypt. He makes numerous allusions to the Gallic and 
 Spanish proficiency in agriculture and in manufacturing. 
 In places Pliny manifests a propensity to dwell upon the real 
 or fancied superiority of certain localities in the prosecution 
 of a particular art, but it is clear that he thoroughly under- 
 stood that the advantages he described were in almost every 
 case artificial, and, as they were not due to racial qualities, 
 could be easily imitated. 
 
 It has been remarked that the ancients developed no 
 science of political economy. The observation is measura- 
 bly true, but there is a vast body of writing that has come 
 down to us from antiquity which if carefully studied may 
 yield as good results as though the writers had attempted to 
 formulate axioms which every day practice shows are not to 
 be depended upon as accurate. Pliny's "Natural History" 
 is notably full of information wdiich exhibits clearly why 
 nations in ancient times were enabled to maintain a monopoly 
 in certain lines of manufacture. The chief cause was un- 
 doubtedly the resort to division of labor. Although the an- 
 cient economists did not, like Adam Smith, develop the idea 
 
 *Pliny, Natural History, Book XXIX, Chap. V. 
 fGeorge, Science of Political Economy, p. 133.
 
 252 PROTECTION AND PROGRESS 
 
 that division of labor adds enormously to its efficiency, there 
 is no doubt that its value was thoroughly understood and 
 that it was practiced in ancient Rome. 
 
 Pliny tells us that "Aegina was particularly famous for 
 the manufacture of sockets only for lamp stands, as Taren- 
 tum was of that for branches; (and that) the most complete 
 articles were therefore produced by the union of the two."* 
 Here we have as pronounced a case of minute subdivision of 
 labor as the assembling in modern times of bicycle parts im- 
 plies. Tarentum and Aegina were cities far apart ; the for- 
 mer was in southern Italy and the latter was an emporium in 
 one of the islands of the Grecian archipelago. They were 
 both celebrated as manufacturing centers long before the 
 beginning of the Christian era. Aegina, six centuries before 
 the days in which Pliny flourished, had commenced her ca- 
 reer, and Tarentum, the leading city of Magna Graecia, with 
 wealth and power enough to be a thorn in the side of Rome 
 in the first Punic war, had a continuous commercial develop- 
 ment during the eight centuries which followed its coloni- 
 zation. 
 
 It is not surprising that these two manufacturing centers 
 should have carried out in practice the ideas which Smith 
 has illustrated in his passage on the division of labor. Their 
 inhabitants were ingenious and great capitals had been ac- 
 cumulated by some of them, who saw that profit would be 
 derived from specialization. Accordingly, we find the 
 Acgeans and the Tarentines devoting themselves to the man- 
 ufacture of parts of lamps, which were shipped to all the 
 provinces of the Roman Empire just as the parts of bicycles 
 are shipped from this country to England, France and other 
 countries to be assembled, the process in the one case being a 
 cheaper lamp and in the later instance a cheaper and better 
 wheel than could be turned out if it were wholly constructed 
 in one factory. 
 
 *Pliny, Natural History, Book XXXIV, Chap. VI.
 
 LABOR EFFICIENCY. 253 
 
 The practice of the people of Aegina and Tarentum was 
 not pecuhar to them. There is unmistakable evidence in the 
 scores of allusions found in the writers of antiquity to the 
 skillfulness of particular populations in certain industries. 
 It is unnecessary to pile up quotations to demonstrate this, or 
 to deduce from them that the skill was the result of acquired 
 ability and not of natural advantages. When we inquire 
 why the Phoenicians became so proficient in the art of dyeing 
 we may at first incline to the belief that the proximity of 
 Tyre to supplies of the shellfish from which the matter for 
 the famed purple was extracted explains their long main- 
 tained superiority. But further investigation soon discovers 
 that comparatively early the Phoenicians were compelled to 
 go far afield for their supply of murex. The shores of nu- 
 merous islands and the coasts of Italy abounded in them, and 
 for a long time these shells formed the return cargoes of 
 Tyrian vessels. No doubt the tenacity with which trade 
 secrets were guarded in antiquity helped the Phoenicians to 
 retain their monopoly for some time, but they could not pre- 
 serve their advantage when the Romans and their other 
 rivals began to perceive that they too might share the profits 
 arising from the lucrative business of coloring cloths. 
 
 We so constantly think of the Romans of antiquity as a 
 military people that we are inclined to underrate their enter- 
 prise, and are apt to suppose that they always remained de- 
 pendent upon foreigners for their suppHes of manufactured 
 articles. But evidence such as the following ought to con- 
 vey an entirely different impression and will help establish 
 the correctness of the contention that the true explanation of 
 the greater efficiency of labor in certain localities is not owing 
 to race characteristics, but is due to entirely different causes, 
 most of them wholly artificial. Speaking of the caprices of 
 fashion, Pliny says : "It was not sufficient to have borrowed 
 from a precious stone the name of amethyst for a dye, but 
 when we have obtained this color we must drench it over 
 again with Tyrian tints, so that we may have an upstart
 
 254 PROTECTION AND PROGRESS 
 
 name compounded of both and at the same time a twofold 
 display of luxury ; for as soon as ever people have succeeded 
 in obtaining the conchyliated color they inmiediately think it 
 will do better as a state of transition to the Tyrian hues. 
 There can be little doubt that this invention was due to 
 some artist who happened to change his mind and alter a 
 tint with which he was not pleased; hence a system has 
 taken its rise, and spirits ever on the rack for creating won- 
 ders have transformed what was originally a blunder into 
 something quite desirable."* 
 
 We are not concerned about the speculation of Pliny re- 
 garding the origin of the system of multiplying shades of 
 color. It may have been accidental, as he suggests, but it is 
 far more probable that it was the result of deliberate investi- 
 gation of the properties of substances capable of being em- 
 ployed as dyes. The great number of mineral, vegetable and 
 animal dyes and paints known to the Romans of Pliny's time, 
 and the ingenuity displayed in their use, shows that what is 
 alluded to as a system bears a remarkable resemblance to the 
 modern scientific processes of chemists who make dyes a 
 specialty. It is noteworthy in this connection that Pliny ex- 
 plains his reason for making copious references to the art 
 of dyeing by saying that he should not have omitted to en- 
 large upon the matter, even though he had "found that dye- 
 ing had been looked upon as forming one of our liberal 
 arts."t From this statement and other allusions we infer 
 that the Romans not only imitated the Phoenician art of dye- 
 ing, but that they greatly developed it and finally eclipsed 
 their teachers. In short, having adopted the idea that they 
 were as capable of coloring fabrics as the assumed origi- 
 nators of the famous purple dye of antiquity, the Romans, 
 in a comparatively short period, succeeded in destroying the 
 Tyrian monopoly, a work in which they were assisted by 
 other energetic peoples of the period. 
 
 *Pliny, Natural History, Book IX, Chap. LXIV. 
 fPliny, Natural History, Book XXH, Chap, III.
 
 LABOR EFFICIENCY. 255 
 
 It may be asserted with confidence that the success 
 achieved by the Romans in the art of dyeing- was matched by 
 their achievements in other fields of industry. The enor- 
 mous expansion of the territorial area of the empire caused 
 something hke a uniform development of manufacturing 
 throughout its length and breadth. Turning again to Pliny 
 we find this assumption supported in an extended description 
 of the linen industry. "The Cadurci, the Caleti, the Ruteni, 
 the Bitureges and the Morini * * * the whole of the 
 Gallic provinces, in fact," he says, "are in the habit of weav- 
 ing sail cloth ; and at the present day our enemies even who 
 dwell beyond the Rhenus have learned to do the same. In- 
 deed, there is no tissue that is more beautiful in the eyes of the 
 female than linen. I am here reminded of the fact * * * 
 that in Germany it is in caves deep under ground that 
 the linen weavers ply their work, and the same, too, is the 
 case in the Allan territory in Italy, between the rivers Padus 
 and Ticinus, the linen of which holds the third rank among 
 the kinds manufactured in Europe, that of Saetabis (Spain) 
 claiming the first, and those of Retorium and of Tarentia in 
 the vicinit}^ of Alia on the Aemilian way the second place in 
 general estimation. The linens of Faventia are preferred for 
 whiteness to those of Alia, which are always unbleached ; 
 those of Retorium are remarkable for their extreme fineness, 
 combined with substance, and are quite equal to the linens of 
 Faventia in whiteness, but they have none of that fine downy 
 nap upon them which is so highly esteemed by some per- 
 sons, though equally disliked by others. * * * g^^i- i|- 
 is the province of nearer Spain that produces linen of the 
 greatest luster, an advantage which is owing to a stream 
 which washes the city of Tarraco there. The fineness of this 
 linen, too, is quite marvelous, and here it is that the fi'^st man- 
 ufacture of cambric was established. From the same prov- 
 ince, too, of Spain, the flax of Zoela has of late been intro- 
 duced into Italy and has been found extremely serviceable 
 for the manufncturc of huntinsf nets. Before now we have
 
 256 PROTECTION AND PROGRESS 
 
 seen some of these toils of a fineness so remarkable as to al- 
 low of being passed through a man's ring, running ropes 
 and all, a single individual being able to carry enough nets 
 to environ a whole forest. This, however, is not very sur- 
 prising, but it is really quite wonderful that each of the cords 
 was comprised of not less than 150 threads."* 
 
 No one can read this passage without concluding that 
 throughout the vast extent of the Roman Empire the art of 
 manufacturing linen was generally understood and practiced. 
 There are suggestions that certain towns or localities ex- 
 celled in particular branches, but the only inference to be 
 drawn from them is that the art had in those places been 
 carried to a higher degree of perfection by specialization 
 resulting from long experience, and that the investment of 
 capital had intrenched the business. There is only one allu- 
 sion to a natural advantage, that said to have been enjoyed 
 by Tarraco, whose river water was supposed to possess valua- 
 ble properties, but it is obvious that it was not the superior 
 water which gave that center its lead ; it was the fact that 
 the Tarracans had great experience, an assumption borne 
 out by the statement that Tarraco was credited with being the 
 originator of cambric. 
 
 If we investigate the condition of other industries of 
 antiquity we find records of a similar state of diffusion. Not 
 only in the Roman provinces mentioned, but in all others, 
 manufacturing seemed to flourish. This being so, we have a 
 right to assume that all of the peoples in the vast dominions 
 of Rome, and those with whom the Romans had relations, 
 had, before Pliny's time, shown themselves capable of creat- 
 ing a domestic manufacturing industry, and that the habit of 
 industrial dependence was not a feature of antiquity. If this 
 idea is firmly grasped many of the difficulties which his- 
 torians have created for themselves will disappear. We need 
 only extend it a trifle to permit the belief that the term bar- 
 
 *Pliny, Natural History, Boox XIX, Chap. II.
 
 LABOR EFFICIENCY. 257 
 
 barian applied to the Goths was not a synonym of "sav- 
 agery," and that they were barbarians only in the sense that 
 they were foreigners to Rome. After reading the harrow- 
 ing accounts of the cruelties to which the Romans were sub- 
 jected by the Gothic invader we are confused to learn that 
 "in less than seven years the vestiges of the Gothic invasion 
 were almost obliterated, and the city (Rome) appeared to 
 assume its former splendor and tranquillity."* The Romans 
 must have possessed extraordinary recuperative powers to 
 have accomplished the feat of completely restoring their city 
 in so brief a period, or the injuries perpetrated by the Goths 
 must have been grossly exaggerated. 
 
 That the latter was tlie case is doubtless true. The vic- 
 torious Goths exacted a heavy indemnity, but probably not so 
 great as that recently extorted from France by Germany. 
 The ravages of the Goths were, perhaps, not more extensive 
 than those committed by modern soldiers after the reduction 
 of a wealthy capital. To form an estimate of the qualities 
 and the capacities of a people by their acts in war, as many 
 historians have done, is absurd. If that were the rule a for- 
 midable indictment could be framed against the British and 
 French. The story of tlie looting of Pekin does not differ 
 essentially from that of the sacking of Rome by the Goths. 
 The soldiers representing the two most enlightened nations 
 of modern times when they sacked the palaces of the Chinese 
 did not go about their work after the fashion of art connois- 
 seurs. They thought more of the gold and silver which en- 
 tered into or adorned an object secured by them as plunder 
 than of the genius which created it, and so did the Goths. 
 
 At any rate, these people, whether savages or not. are, a 
 little later, found creating an art of their own. They appear 
 in Spain and are welcomed by the natives, who regard their 
 advent as a desirable change from the oppressions of their 
 Roman rulers, which would be singular if they were merely 
 
 ♦Gibbon, Hiistorv of Rome ■p.ohn, Chap. XXXI, Vol. Til. p. 458. 
 17
 
 258 PROTECTION AND PROGRESS 
 
 savages come to ravage the land.* Three centuries after the 
 invasion of the Spanish province "the Goths," we are told, 
 "were no longer the victorious barbarians who had humbled 
 the pride of Rome, despoiled the Queen of Nations and pen- 
 etrated from the Danube to the Atlantic ocean. Secluded 
 from the world by the Pyrennean mountains, the successors 
 of Alaric had slumbered in a long peace ; the walls of the 
 cities were moldered into dust; the youth had abandoned 
 the exercise of arms ; and the presumption of their ancient 
 renown would expose them in a field of battle to the first 
 assault of the invaders. "f Remarkable savages these. The 
 progress made by them in three hundred years is marvelous 
 enough to deserve the study of evolutionists who believe that 
 the process of converting a savage into a civilized people is 
 the work of ages, and is not accomplished in the brief period 
 here implied. 
 
 When we turn our attention to the Vandals we find that 
 their record on the pages of history is somewhat similar to 
 that of the Goths. Like the latter, after their acquisition of 
 a Roman province, the conquest of which, according to the 
 annalists, was accompanied by the most extraordinary atroci- 
 ties and economic follies, w^e at length find them fleeing be- 
 fore the armies of Belisarius, their cowardice being attributed 
 to the sloth and eflfeminacy contracted during the period of 
 their ascendency. While they maintained their power in 
 Africa we are told the Vandals frequently made descents on 
 the coasts of Spain, Liguria, Tuscany, Campania, Dalmatia, 
 Epirus, Greece and Sicily, and were stigmatized as pirates 
 for so doing, but the appellation seems undeserved, as such 
 manifestations of vigor appear to have been common in an- 
 cient times. We may justly suspect that all the Vandals 
 were not thus employed, for while their warriors, with "their 
 arms spread desolation and terror from the columns of Her- 
 
 *Gibbon, History of Rome, Bohn, Chap. XXXI, Vol. Ill, p. 468. 
 flbid, Chap. LI, Vol. VI, p. 89.
 
 LABOR EFFICIENCY 259 
 
 cules to the mouth of the Nile," it seems that a contingent 
 remained at home engaged in the arts of peace, developing 
 and making the best of the resources of the country they 
 had occupied. It is commonly assumed that the Vandals 
 were all warriors, but this must be an error. In the train 
 of their victorious armies followed the usual horde of non- 
 combatants, and these we may suppose were merged with 
 the subject population and assisted them in the product of the 
 vast wealth which characterized the rehabilitated Carthage. 
 
 Toward the middle of the sixth century Procopius vis- 
 ited Africa and recorded his "admiration of the populousness 
 of the cities and country, strenuously exercised in the labors 
 of commerce and agriculture." When Justinian's great Gen- 
 eral, Belisarius, reconquered the province the Vandalic war- 
 riors had become too enervated to successfully resist. "In 
 three generations prosperity and a warm climate," says Gib- 
 bon, "had dissolved the hardy virtue of the Vandals, who 
 had insensibly become the most luxurious of mankind. In 
 their villas and gardens, which might deserve the Persian 
 name of Paradise, they enjoyed a cool and elegant repose ; 
 and after the early use of the bath the barbarians were seated 
 at the table profusely spread with the delicacies of the land 
 and sea. Their silken robes, loosely flowing after the fash- 
 ion of the Medes, were embroidered with gold ; love and 
 hunting were the labors of their life, and their vacant hours 
 were amused by pantomimes, chariot races and the music 
 and dances of the theater."* 
 
 These are all symptoms of an advanced civilization, and 
 although our authority cites them to show the declining vir- 
 tue of the Vandals, they may be more properly regarded as 
 indicative of the love of peace and repose which all prosper- 
 ous industrial peoples experience. It would be an error to 
 assume that the undoubted prosperity of the conquerors of 
 Africa was solely due to the industry of the subject races, 
 
 *Gibbon, History of Rome, Bohn, Chap. XLI, Vol. IV, p. 372.
 
 26o PROTECTION AND PROGRESS 
 
 and that the Vandal occupants of the soil lived in idleness at 
 the expense of their conquered subjects. The resources of 
 Africa were great, but they were not abundant enough to 
 maintain in sumptuousness one liundred and sixty thousand 
 idle warriors, the number to which the original fifty thousand 
 Vandalic warriors had increased during the three generations 
 succeeding their conquest. 
 
 Had not the arms of Belisarius proved victorious a difiFer- 
 ent tale might have been told, and the word "vandal" would 
 not have stood as a synonym of savagery. We are told that 
 after their defeat "the bravest of the Vandal youth were dis- 
 tributed into five squadrons of cavalry which adopted the 
 name of their benefactor and supported in the Persian wars 
 the glory of their ancestors. But these rare exceptions, the 
 reward of birth or valor, are insufficient to explain the fate 
 of a nation whose numbers before a short and bloodless war 
 amounted to six hundred thousand persons. After the exile 
 of their King and nobles, the servile crowd might purchase 
 their safety by abjuring their character, religion and lan- 
 guage, and their degenerate posterity would be insensibly 
 mingled with the common herd of African subjects. Yet 
 even in the present age, and in the heart of the Moorish 
 tribes, a curious traveler has discovered the white complexion 
 and long flaxen hair of a northern race, and it was formerly 
 believed that the boldest of the Vandals fled beyond the 
 power or even the knowledge of the Romans, to enjoy their 
 solitary freedom on the shores of the Atlantic ocean."* 
 
 The conjecture referred to may have had some founda- 
 tion, but it seems as entirely fanciful as was the attempt of 
 Gibbon to trace in the people of modern Lusatia vestiges of 
 the ancient spirit of the Vandals. The great historian's 
 theory of the perpetuity of racial qualities is contradicted by 
 the experience of his own country, which shows how com- 
 pletely the original propensities of peoples may be eliminated 
 
 ♦Gibbon, History of Rome, Bohn, Chap. XLI, Vol. IV, p. 388.
 
 LABOR EFFICIENCY. 261 
 
 by assimilation, and that a general type is evolved whenever 
 industry and commerce have moderately free play. Such 
 abnormalities as the Basques prove nothing. Even they 
 could not have retained their characteristics had not Spain 
 been so weak that she was virtually compelled to make 
 treaties with them, thus practically recognizing their inde- 
 pendence.* This, combined with their isolation, has enabled 
 them to maintain their ancient usages. Had the Basques 
 been subordinated to British rule they would have been 
 molded into Englishmen as effectually as the Scotch, who are 
 gradually losing their distinguishing characteristics. 
 
 An English writer has remarked "that savages did not 
 formerly waste away before the classical nations as they 
 now do before modern civilized nations. Had they done so," 
 he says, "the old moralists would have mused over the event, 
 but there is no lament in any writer of that period over the 
 perishing barbarians. "j- This observation emphasizes the 
 fact we are endeavoring to establish, that all peoples are 
 capable of advancement, and that if they turn their atten- 
 tion to industry, unless extirpated by war, they must in the 
 
 fullness of time, as they grow in numbers, develop a civiliza- 
 tion of some sort. The ancient moralists did not mourn over 
 the disappearances of peoples because nothing of the kind 
 happened. The myths of the ancients and their more serious 
 writings clearly indicate that they were familiar with the 
 process of amalgamation and that they had more than an 
 inkling of the idea of industrial evolution. "I am of opinion," 
 says Lucretius, "that the world is of comparatively modern 
 date and recent in its origin * * * from which cause 
 some arts are but now being refined, and are even at the pres- 
 ent on the increase."! And in another place he says : "The 
 earth which produced all creatures, for it was not, as T con- 
 
 ♦Latimer, Spain in the Nineteenth Century, p. 202. 
 
 fBogehat, Physics and Politics, Fortnightly Review, April, 1868, 
 
 P- 455- 
 
 'Lucretius, Book V (v. 312-331).
 
 262 PROTECTION AND PROGRESS 
 
 ceive, a golden chain from above that let down the tribes of 
 mortals from heaven into the fields, nor did the sea or the 
 waves that beat the rocks produce them ; but the same earth 
 which now nourishes them from their own substance gen- 
 erated them at first."* People capable of formulating con- 
 ceptions of this kind might easily be induced to act upon the 
 principle of the survival of the fittest, but they would never 
 make the blunder of assuming that the number of peoples 
 fitted to survive was limited, and that only those who were 
 born on Latin or Greek soil could reach the enlightened stage. 
 The Roman polity was a flat contradiction of such an 
 idea. Whether designedly or otherwise, the Romans carried 
 their art and civilization wherever they went, and in con- 
 quered territory tolerated all the arts of indigenous growth. 
 Theoretically the Roman considered his countrymen superior 
 to all other peoples, but in practice he recognized that the 
 ability to advance was not confined to one nation. So, too, 
 the Greeks. They emigrated and planted colonies wherever 
 the conditions seemed to invite, but there is no trace whatever 
 in history that the emigrants or colonists imagined that they 
 were incapable of accomplishing as much as the stock from 
 which they had sprung. The Greeks of Syracuse and a score 
 of other places along the coasts of Italy and Spain were to all 
 appearances as advanced industrially as any of the more 
 ancient Greek settlements in Asia Minor or on the Peninsula. 
 It never entered the Grecian mind that Greece should be re- 
 garded as the workshop of the world ; on the contrary, wher- 
 ever he planted himself the Greek began to develop the sur- 
 rounding resources. As a result powerful communities grew 
 up which soon ceased to sympathize with the political aspira- 
 tions of those left behind them. The transplanted Greeks 
 retained the feelings inherited from their forefathers, but the 
 bonds of sympathy were weakened by industrialism, and in 
 comparatively brief periods they ceased to be Greeks except 
 
 *Lucretius, Book II (v. 1155).
 
 LABOR EFFICIENCY. 263 
 
 in language. The story of Syracuse, with a modern setting, 
 would not differ materially from that of the United States. 
 
 These are facts which must be taken into consideration if 
 a correct efficiency of labor theory is to be formulated. It 
 is as idle for modern economists to assume that a political 
 boundary determines the industrial character of a people as 
 it would have been for the ancients to look upon the Syracus- 
 ans and the Massiliots as incapables because they no longer 
 breathed the sacred air of Greece. If the Syracusans 
 achieved great industrial successes in their new home, it 
 was not because they were born on the island of Syracuse 
 and were descended from Greeks, but rather because they 
 had the wit to make use of the resources of the country in 
 which they lived. 
 
 Had there been a successful Cobden in antiquity the great 
 manufacturing centers on the Mediterranean would never 
 have been established. Colonies would have been planted, 
 no doubt, but the colonists would have depended upon the 
 mother country for their supplies of manufactured products, 
 which would have been dealt out to them sparingly and on the 
 lines suggested by Adam Smith — that is, a great quantity of 
 the rude products of the soil would have been taken in ex- 
 change for a very small quantity of finished articles. Had 
 there been any marked tendency of this kind in antiquity the 
 whole course of history would have been changed. Had the 
 Greeks in Syracuse contented themselves with producing 
 those agricultural commodities for which their island was 
 celebrated a great and wealthy city, which dared to contest 
 with the mother country for supremacy, would not have 
 grown up. Had the Phoenician colonists planted at Carthage 
 respected the desires, of the Tyrians and simply devoted 
 themselves to developing the agricultural resources of 
 northern Africa, Tyre might still be in existence. Or per- 
 haps, to carry the idea still further back, had the Tyrians 
 devoted themselves to water carriage instead of turning their 
 attention to purple dyes and manufacturing, the port might
 
 264 PROTECTION AND PROGRESS 
 
 have filled a smaller place in the annals of mankind, for its 
 maritime inhabitants, if they had kept strictly to their natural 
 vocation, would have obtained their supplies of finished 
 articles from still older civilizations, whose economists might 
 have urged that it would be more profitable for Tyre to 
 stick to the carrying trade and leave to the countries with 
 established manufactures the work of supplying sailors and 
 agriculturalists with their products. 
 
 Fortunately for the world, the Cobdenistic idea of the 
 efficiency of labor never prevailed. Mankind has always 
 refused to accept the doctrine of racial inferiority. Even 
 the savage who wages unrelenting war against his neighbors 
 is inspired by a better principle than that underlying the 
 free trade theory that some peoples are destined by Provi- 
 dence to play an inferior role. The bloody Sioux who 
 triumphs by adding to the number of scalp locks in his 
 possession is animated by the feeling that he would be de- 
 graded if he did not show himself superior, or at least 
 equal, in prowess to his rivals. The scalp lock is the Sioux's 
 symbol for power and greatness. The progress made in 
 the industrial arts are the signs by which we recognize a 
 nation's advance, and while the feeling may remain dormant 
 in the breasts of some peoples for a time, it is sure to be 
 awakened at last. A little over a century ago the historian 
 Gibbon sweepingly characterized the Russians as a race 
 of barbarians with little prospect of emerging from their 
 inferior condition (169). Today the people he so scornfully 
 alluded to are members of a mighty empire, steadily accom- 
 plishing the work of developing a territory of unrivaled re- 
 sources, and incidentally exerting a greater civilizing influ- 
 ence than any other nation in ancient or modern times. 
 
 If we patiently read the pages of history and sensibly 
 interpret them we shall be forced to conclude that no people 
 has a monopoly of skill, and that no nation is destined by 
 nature to be the world's workshop. Our investigations may 
 disclose that some nations enjoy advantages over others, but
 
 LABOR EFFICIENCY. 265 
 
 they are not of the kind which the Cobdenites would have 
 us beheve exist. No doubt some countries wall always be 
 found producing more cheaply than others, but the ability 
 to do so will be an acquired and not a natural one. We have 
 operatives in our factories who attend more cotton looms 
 than their fellows abroad, but they are not all Americans ; 
 sometimes these operatives are mere sojourners in our 
 midst. According to a recent official publication there were 
 15,823 persons of foreign birth out of a total of 22,398 who 
 found work in the Fall River, Mass., mills in 1895, and in 
 the same year 7,047 persons of foreign birth found employ- 
 ment in the mills of New Bedford, while only 1,183 natives 
 were employed. In the Fall River mills there were 6,056 
 French Canadians and 6,073 English ; only 6,575 o"t of 
 22,398 employed in this great American manufacturing cen- 
 ter were born on our soil. 
 
 Under the circumstances, it is folly to assume that any 
 superiority displayed in American mills is due to the nativity 
 of the operatives. If the cotton mills of the United States 
 are operated at a smaller labor cost than those of Europe 
 some other explanation of the fact exists. Better manage- 
 ment ; more efficient plants ; higher wages, may account for 
 such a result, but not the superior skill of the American peo- 
 ple. It is idle to claim that such is the case when the fact 
 is apparent that our factories are filled with operatives of all 
 nationalities, who, so far as our information goes, acquit 
 themselves well or ill, not because they are Americans, or 
 French, or English, but because of some individual superior- 
 ity or defect. If it could be shown from a payroll of a Fall 
 River cotton mill that the average American-born operative 
 attended more machines than the average foreigner who 
 works by his side the efficiency of labor theory which as- 
 sumes race superiority would command respect. But in the 
 absence of such testimony sensible men will conclude that, 
 all other things being equal, the natives of one country will 
 work as efficiently as those of another.
 
 CHAPTER XIII. 
 LABOR-SAVING DEVICES. 
 
 EFFECTS OF THE USE OF IMPROVED MACHINERY ON MODERN 
 
 SOCIETY. 
 
 Schoenhoflf's explanation of lower labor cost in America — The cot- 
 ton spinning industry in the United States — Wages reduced in 
 Massachusetts to withstand the encroachments of the Southern 
 factories — A rapid equalization of artificial advantages — Changes 
 in centers of distribution — The movement of the center of indus- 
 try steadily westward — Effects of the use of labor-saving ma- 
 chinery — The nail-making industry in England — Why labor- 
 saving machines are slowly introduced in Great Britain — Con- 
 stant increase of the social wreckage — Attitude of British trades 
 unions on the subject of labor-saving devices — British opposi- 
 tion to the use of automatic machinery — The free use of auto- 
 matic machinery in the United States — The workingman's share 
 of the gain to society from the use of labor-saving machinery 
 is infinitesimal — Production increased twenty-fold by machines 
 and wages scarcely doubled — No hope of better wages held out 
 for increased exertions. 
 
 Although there is no fotindation for the belief that the 
 natural abilities of only a few peoples make it possible for 
 them to develop a high degree of mechanical skill, it is un- 
 doubtedly true that a great difference in the cost of labor is 
 met with in different countries. There seems also to be 
 abundant evidence that this labor cost may be lower in coun- 
 tries where wages are nominally high than in rival countries 
 where the compensation of the workingman is much smaller. 
 The observation of this fact has lent color to the assumption 
 that some races are better fitted by nature to engage in man- 
 ufacturing than others. When it can be demonstrated that 
 
 266
 
 LABOR-SAVING DEVICES. 267 
 
 one hundred operatives in an English cotton mill turn out 
 twice as many yards of cloth as a similar number of opera- 
 tives in a German establishment the inference seems reason- 
 able that the better results attained in England are due to 
 the superior skill of the people employed in the British mills. 
 
 It is possible, however, that the better results achieved 
 are not due to the employment of more skillful people in 
 England than on the continent. Too many of the writers 
 who have discussed this subject have ignored the disposition 
 which manifests itself in some countries to prevent working- 
 men exerting their full powers. Some of them have recog- 
 nized this factor, but in a manner calculated to minimize its 
 importance. Jacob Schoenhoff , who has devoted much atten- 
 tion to the subject of labor efficiency, in a review article tells 
 us that "the improved and high speed machinery in America 
 requires a class of workmen superior to that employed in 
 low-wage countries. That the superior results which show 
 themselves so prominently in the exporting of the products 
 of our mills require great exertion," he says, "is self-evident. 
 That this can be maintained only by a correspondingly high 
 standard of living on the part of the worker — i. e., high 
 wages — is equally self-evident. The higher wages which our 
 workmen receive, however, do not materially aflfect the price 
 of our goods in industrial competition ; for adverse condi- 
 tions are more than equalized by our greater output."* 
 
 The ink used in printing the article by Schoenhoff had 
 scarcely dried before a bulletin was issued from the press of 
 the Statistical Bureau of the Commonwealth of Massachu- 
 setts devoted to the discussion of the subject of the cotton 
 manufacturing industry of the Bay State, a large part of 
 which was surrendered to an inquiry into the efifects of the 
 competition of the cheaper labor employed in Georgia and 
 other Southern States. The conclusions of the compiler of 
 the document are interesting and seem to effectually dispose 
 
 ♦Schoenhoff, Exports and Wages, Forum, January, 1898.
 
 268 PROTECTION AND PROGRESS 
 
 of Mr. Schoenhoff's theory that high wages arc not a dis- 
 advantage in a competition with producers who pay lower 
 wages. 
 
 The writer says : "That there are certain advantages 
 wliich the mills in Massachusetts and in the South respec- 
 tively enjoy, as against each other, is plain. The principal 
 advantage in the South lies in long hours and low wages. 
 Just how much of an advantage this is, upon the whole, is 
 an open question, or, at least, a question about which there 
 is much difference of opinion. The disparity in nominal 
 wages is already shown by the figures herein presented (in 
 the bulletin), and probably amounts, to put it in a general 
 statement, to at least 30 per cent, in favor of the South. But 
 nominal wages from the manufacturer's standpoint do not 
 show labor cost, and as far as the industry as a whole is 
 concerned the labor cost when computed per spindle does 
 not show nearly so wide a variation ; while if the total cost 
 of labor and stock be computed as a percentage upon the 
 output the differences between the States are still less. This 
 statement is based, of course, upon the only existing official 
 figures and applies to the industry as a zvhole and not to par- 
 ticular mills, or particular kinds of goods. 
 
 "Nor from the standpoint of the operatives do nominal 
 wages or money earnings show what is actually obtained. 
 This depends upon the cost of living, which, under present 
 standards, is probably less in the South, taking everything 
 into consideration, than in Massachusetts. Taxes are lower 
 in the South, but interest charges are higher. There appears 
 to be a slight advantage in cost of power in some of the 
 Southern States, due partly to the greater use of water 
 power, but so far as shown by the figures obtainable by us, 
 when the aggregate cost of fuel is computed as a percentage 
 upon output for the industry, the advantage seems to be very 
 slight. The proximity of the Southern mills to the cotton 
 fields is largely offset by higher freight rates and other fac- 
 tors, so that no difference is to be seen in the price of cotton
 
 LABOR-SAVING DEVICES. 269 
 
 at the mill, while the Southern mills are at a greater distance 
 from the centers of distribution of the product, and they are 
 also further away from the sources where machinery and 
 supplies must be obtained."* 
 
 This long excerpt might have been dispensed with, as 
 Mr. Schoenhoff 's contention could have been disposed of by 
 simply stating the fact that the Massachusetts mills in the 
 early part of 1898 were compelled to make a reduction of 
 wages to meet the cheaper labor of the South, but the views 
 of the writer of the bulletin are presented because they in- 
 telligently discuss the fallacies underlying the efficiency of 
 labor theory. For nearly the same reason it is expedient to 
 reproduce the comments of the Boston Textile World, which, 
 in December, 1897, predicted that employers would be com- 
 pelled to resort to such a course, saying : "One of two things 
 will have to be done : either the hours of labor in Massachu- 
 setts will have to be extended or the wages of operatives will 
 have to be reduced. The latter is the more likely. Southern 
 competition with Massachusetts mills is more detrimental 
 than any foreign competition on the lower grade of goods." 
 A keen Southern critic, noting the admission in this con- 
 cluding sentence, remarked : "This observation is significant, 
 and while it applies to competition only on lower grades of 
 goods, it nevertheless shows that what is true of these grades 
 may in time become true of other grades. "f 
 
 When we attempt to analyze the conclusions reached by 
 the compiler of the Massachusetts Labor Bulletin we find 
 admissions which fully justify the claim of the Southerners 
 that they are deriving an advantage from the presence of 
 large bodies of negroes willing to work more cheaply than 
 the operatives in the cotton mills of New England. The 
 bulletin states that while the difference is not as great as 
 the lower nominal wages of the South imply, there is still 
 
 *Labor Bulletin of Massachusetts, No. 5. January, if 
 f Atlanta Constitution, December, 1897.
 
 270 PROTECTION AND PROGRESS 
 
 a difference in favor of the latter section. But the writer 
 or compiler virtually admits that his comparison is not 
 wholly trustworthy by calling attention to the fact that his 
 statement applies to the cotton "industry as a whole and not 
 to particular mills or particular kinds of goods." Had he 
 confined his comparison of the progress made in the two 
 sections to the lower grades of goods he would not have con- 
 veyed the impression which he to a certain extent does that 
 Massachusetts has nothing to fear from Southern competi- 
 tion. 
 
 A table presented by the Atlanta Constitution, which 
 shows that the number of mills in the South had increased 
 from 254 in 1890 to 483 in 1897, and the spindles during 
 the same period from 1,712,930 to 4,105,667, indicates the 
 state of affairs more truly than the figures of the Massachu- 
 setts bulletin, which really have no immediate bearing on 
 the matter. It is easily conceivable that the cotton manu- 
 facturing industry as a whole may continue to expand in 
 Massachusetts in the face of Southern rivalry, but the causes 
 for such expansion when inquired into closely will be found 
 to be different from those assumed by the advocates of the 
 labor efficiency theory. 
 
 The Massachusetts Labor Bulletin hints at some of the 
 reasons why the cotton manufacturing industry in New Eng- 
 land may continue for some time to come to pay higher 
 wages than are paid in the South. It states that while taxes 
 are lower in the South interest charges are higher. This 
 latter condition is not likely to exist very long. If the South- 
 ern factories make as much progress in the coming seven 
 years as they have in the past capital will flow to that section 
 in abundance ; perhaps some of that now employed in Massa- 
 chusetts will be diverted to the newer and more profitable 
 field. And the higher freight rates which the Southern fac- 
 tories are now compelled to pay in order to bring their sup- 
 plies of raw material from the comparatively near-at-hand
 
 LABOR-SAVING DEVICES. 271 
 
 cotton fields will be reduced in the near future, thus remov- 
 ing another of the new competitor's disadvantages. 
 
 One of the noteworthy features of recent railroad build- 
 ing in this country is that a large part of the newly projected 
 lines and extensions are in the South. This means increased 
 facilities and competition which may be relied upon to lower 
 freight rates between field and factory in that section, and 
 the result will be a decided advantage to the Southern mills, 
 making their proximity to cotton supplies a telling factor 
 in cost of production. That the present advantage of being 
 near to the centers of distribution, which the bulletin says 
 the Massachusetts mills now enjoy, will soon disappear must 
 be evident to any one who will take the trouble to note that 
 the center of population in this country is steadily moving 
 westward. In 1790 Baltimore occupied the position; a cen- 
 tury later it was at a point about thirty miles west of Cin- 
 cinnati.* At the same rate of progression, Atlanta, the 
 principal seat of the cotton industry in Georgia, will in less 
 than fifty years be more accessible to a greater number of 
 people than the mills of New England are at present. 
 
 Concurrently with this increase of population and shift- 
 ing of the center, there will go on a development of the 
 general manufacturing industry of the country which will 
 bring the South fully as near to "the sources from whence 
 machinery and supplies" must be obtained as Massachusetts. 
 Indeed, there is no reason why the South itself should not 
 be one of the sources of supply. No one thus far has been 
 able to show that a general manufacturing industry may not 
 spring up in the vicinity of the great iron deposits of Ala- 
 bama. On the contrary, it is now very generally maintained 
 that such will be the case. In any event, the great develop- 
 ment of manufactures in the tier of Western States imme- 
 diately north of the region where the cotton manufacturing 
 and cotton planting industry of the South is most flourishing 
 
 ♦Gannett, The Building of a Nation, p. 73.
 
 272 PROTECTION AND PROGRESS 
 
 promises lo give the Atlanta and other Southern factories as 
 cheap a hase of suppHes as that now enjoyed by New Eng- 
 land. 
 
 We are so apt to think of the people of the central region 
 of the Union as great agricultural producers that we quite 
 overlook the phenomenal manufacturing development of 
 their section. "In 1850 the Prairie States had only one 
 factory operative to seven farming hands, where in 1890 the 
 figures stood relatively as five to eleven. In 1850 the number 
 of operatives in factories was 111,000; in 1890 it was 1,407,- 
 000. The value of manufactured products in the latter year 
 was $3,161,000,000, of which $2,259,000,000 was of sundries, 
 less than one-third of the total being flour, meat and lum- 
 ber." The authority furnishing these figures says that "food 
 and lumber constitute the principal manufactures," but bis 
 own tables convict him nf a blunder. The m.anufacturing 
 industry of Illinois, Indiana, Ohio and other Western States 
 is becoming as thoroughly diversified as that of New Eng- 
 land. On this point the chief of the Bureau of Statistics of 
 the United States says : "Following upon the rapid advance 
 in the population of the Western States, large and diversified 
 manufacturing enterprises have been established, and the 
 center of the manufacturing industries of the country has 
 moved slowly toward the West. In 1890 the center was 
 about eight and one-half miles south of Canton, Ohio, while 
 in 1850 it was near Mifflintown, Pa."* 
 
 In the face of evidence such as this it will be very diffi- 
 cult for Mr. Schoenhoff, and those who agree with him, to 
 maintain their contention that the greater efficiency of the 
 labor of New England will make that section the permanent 
 seat of the cotton maimfncliu-ing industry of the Union. 
 We have seen that while the manufacturers of New England 
 have been compelled to reduce the wages of their operatives 
 in order to meet the lower wages paid by the Southern man- 
 
 *Mulhall, Progress of the United States, .North American Review, 
 August, 1897.
 
 LABOR-SAVING DEVICES. 273 
 
 ufacturer, they still possess advantages which should ma- 
 terially help them in a competitive contest, but, as has been 
 pointed out, they are of a temporary character and cannot 
 long be monopolized. Interest will be lowered in the South, 
 freight rates will be reduced, thus equalizing the cost of dis- 
 tribution, which is now against the latter section, and sup- 
 plies of machinery and other things will be as easily and as 
 cheaply obtained by the Southerners as by the manufac- 
 turers of New England. 
 
 No fancied superiqrity of labor will avail to avert the 
 inevitable result of the creation of a great cotton industry 
 in the South. It will be impossible for the New Englanders 
 to permanently retain the advantages derived from their 
 high organization which effects savings as yet unpracticed by 
 the new competitors. These advantages, however, will all 
 be acquired in time by the Southerners, whose experience 
 will ultimately demonstrate that "superior labor efficiency" 
 is a broken reed to lean upon. Whether the natural ad- 
 vantages of proximity to the cotton fields and to the great 
 mass of the consuming population of the United States will 
 ultimately entirely overcome the present artificial advantages 
 enjoyed by New England is something for the future to de- 
 cide. It is not improbable that Massachusetts, whose eco- 
 nomic writers now tell us of the superior efficiency of the 
 labor employed in the cotton factories of that State, may 
 be compelled to resort to the purely artificial device of 
 lowering wages until the cost of production is reduced suffi- 
 ciently to offset the benefits which the Southern mills enjoy 
 in the shape of lower price of raw material and cheap labor. 
 
 It must not be inferred from this presentation of facts 
 that the writer has lost sight of the tendency of wages to 
 increase in those countries where manufacturing industries 
 secure a foothold. The accuracy of an observation made by 
 David F. Schloss, who advances the argument that "dear 
 labor is cheap," is admitted. He tells us that "in Germany 
 wages are every day higher ; and with the increase in its 
 
 18
 
 274 PROTECTION AND PROGRESS 
 
 remuneration the productivity of German labor is by slow but 
 steady steps concurrently advancing." He also says that 
 "even the wide gulf which separates the English from the 
 Indian cotton spinner is being rapidly narrowed. Not long 
 ago it was shown that it took six of the Bombay native mill 
 hands to do as much work as one Lancashire operative. But 
 within the last few years the remuneration of the Indian 
 operative has risen from 30 to 40 per cent., while his indus- 
 trial efficiency has nearly doubled itself."* The truth of 
 these statements can no doubt be easily substantiated, but we 
 question whether Mr. Schloss' deduction from them is sound. 
 He says : "Under these circumstances, it must be clear that 
 the true line of deliverance for our English industries, hard 
 pressed as these industries unquestionably are by foreign 
 competition, is to be found in the augmentation rather than 
 the diminution of the wages of English labor." 
 
 No one will contend for a moment that a diminution of 
 the wages of the English operative may result injuriously to 
 the worker by lessening his productive ability, but it must not 
 be forgotten that there is a surplus of workers and that in the 
 present crude state of distribution the ability to produce in 
 excess of the effective demand plays an important part. Let 
 us take an instance cited by Mr. Schloss and study it care- 
 fully in order to ascertain its real significance. The evidence 
 taken by the British sweating committee in 1889, he tells us, 
 ''showed that a man and his wife can only earn between 
 them from 10 shillings to 17 shillings in a busy week at nail 
 making in the Midlands, The average is much less, for in 
 some weeks they get no work at all. Much of the work 
 is done in wretched hovels, often under most unsanitary 
 conditions, and many of the women injure themselves in a 
 grave manner by the use of the heavy 'oliver' employed in 
 cutting the cold iron — a clumsy spring-tilt hammer — trying 
 the strength of the worker to the utmost extent. But in 
 America, as Mr. Schoenhofif proves, the manufacturers, avail- 
 
 *Wright, Industrial Evolution of the United States, p. 161.
 
 LABOR-SAVING DEVICES. 275 
 
 ing themselves of the best metliods and the most improved 
 machinery, are able to turn out nails at one-half the labor 
 cost incurred in England, and that although the American 
 workman receives wages fully ten times as high as those of 
 our Dudley nail makers."* 
 
 It is not necessary to raise the question here whether the 
 improved nail-making machinery in use in the United States 
 is a blessing or the reverse. Doubtless its employment has 
 cheapened the cost of production and lowered the price of 
 nails, thus stimulating consumption ; and, as the writer ob- 
 serves, the American nail maker receives wages fully ten 
 times as high as those paid to the English nail makers. This 
 we know is the case, but it may be asked whether the substi- 
 tution by the British of the improved processes in vogue in 
 this country for those now pursued in England would be 
 followed by a similar result. In other words, if the Mid- 
 lands nail makers were supplanted by machines would those 
 who attend the machines receive ten times as much wages 
 as English nail makers now receive? Obviously not. The 
 reason why is clear. Contrary to the opinion of the Schoen- 
 hoff school, which assumes that the ability to skillfully ma- 
 nipulate machinery is confined to a few peoples and is 
 acquired slowly and with great difficulty, the reverse is the 
 case. We have only to bring to mind the fact that modern 
 processes of manufacture are little more than a century old 
 to understand with what facility civilized people acquire a 
 knowledge of the industrial arts. The nail makers of the 
 English midland counties may seem dull, but there is no 
 doubt whatever that the ability which they have displayed in 
 fashioning nails by hand could be developed along other 
 lines, and that the brightest of them could speedily learn to 
 attend nail making machines with as much success as the 
 most expert American nail makers. 
 
 But before asking what the result of the abandonment of 
 
 *Schloss, Dearness of Cheap Labor, Fortnightly, January, 1893.
 
 276 PROTECTION AND PROGRESS 
 
 nail making by hand would be we ought to inquire why the 
 English method has prevailed so long in the face of Ameri- 
 can experience. The success of the improved American 
 nail making machinery has not been a secret to Englishmen. 
 They knew that a single workingman in the United States 
 could turn out an immensely greater quantity of nails with 
 the aid of a machine than could a score of British workers 
 following the old method. Why, then, has nail making by 
 machinery not been generally adopted in Great Britain? 
 The only answer that suggests itself is that capital fears that 
 a resort to it may bring about something like a revolution. 
 The use of labor-saving machinery is creating for itself in 
 England an industrial imposse. Successive inventions have 
 narrowed the field of employment in that country, relatively 
 if not absolutely. The result is that there is now in England 
 an enormous population which causes concern to statesmen, 
 to economists and to intelligent workingmen, who are trying 
 to avert the evil consequences of undue stimulus by a resort 
 to tactics which destroy the bond of union between employer 
 and employed, and make them, despite all the pretense to 
 the contrary, as much enemies to each other as though they 
 were inhabitants of different and hostile countries. 
 
 Sir Robert Giffen, who has always made it a point to 
 treat the difficulties of the modern industrial system opti- 
 mistically, writing on the subject of the "Gross and Net Gain 
 of Rising Wages," expresses the belief that "the whole struc- 
 ture of modern society is such as to require greater and 
 greater knowledge, greater and greater energy and moral 
 power, greater and greater capacity of every kind, so as to 
 make sure that machines and inventions are maintained and 
 improved, and that artistic capacities and the arts of living 
 are developed to correspond." And he declares that this 
 "continuous improvement implies a continuous improvement 
 on the average of the human being who really belongs to the 
 new society."* 
 
 *Schloss, Dearness of Cheap Labor, Fortnightly, January, 1893.
 
 LABOR-SAVING DEVICES. 2^] 
 
 While Sir Robert has no doubt that the demand for con- 
 tinuous improvement will be met, and that the quality of 
 such workingmen as are needed to attend the rapidly increas- 
 ing number of labor-saving machines will keep up to the 
 requirements of inventive ingenuity, he cannot escape the 
 conclusion that the effect will be to create two societies. 
 "The one doubtful sign, it appears to me," he says, "as re- 
 gards the future, is pointed at by the qualification implied in 
 the words, the human being who really belongs to the new 
 society. It may possibly happen that there will be an in- 
 crease, or at least a non-diminution, of what may be called 
 the social wreckage. A class may continue to exist and even 
 increase in the midst of our civilization, possibly not a large 
 class in proportion, but still a considerable class, who are 
 out of the improvement altogether, who are capable of noth- 
 ing but the rudest labor, and who have neither the mental 
 or the moral qualities fitted for the strain of the work of 
 modern society."* 
 
 This was written in 1889, and it shows clearly that Sir 
 Robert Giffen, in common with other English economists 
 and some Americans of their way of thinking, underrate a 
 growing evil, but what is more pertinent to this discussion, 
 they overlook the fact that the benefits which workingmen 
 in the existing condition of affairs derive from the invention 
 of labor-saving machinery are necessarily of a transitory 
 character. There is no doubt that for a period after the 
 introduction of machinery which greatly reduces the labor 
 involved in the production of a certain article the wages of 
 those employed in the manipulation of the machines will be 
 much higher than those received by the hand workers for- 
 merly engaged in the. production of the same article. But 
 v/hen the number of people .capable of working the machines 
 is multiplied, and the social wreckage referred to by Sir 
 Robert Giffen is increased, wages will diminish. 
 
 ♦Giffen, Gross and Net Gain of Rising Wages, Contemporary, De- 
 cember, 1889.
 
 278 PROTECTION AND PROGRESS 
 
 Recurring to the illustration of nail making machinery, 
 can any one doubt that the effects of the substitution of 
 machine for hand work in their manufacture in England will 
 add to the social wreckage of that country? The cost of 
 the production of nails may be reduced to a figure which 
 will enable the British to successfully compete with the well 
 established nail making industry of the United States, and 
 the wages of the men who run the machines will for a time 
 be higher. But unless the English people make up their 
 minds to support the whole of the social wreckage of the 
 nation at the public expense, a steady if undirected pressure 
 will be exerted which ultimately will bring down the wages 
 of the machine worker to a lower level than that which 
 marked the employment of hand workers. 
 
 This being the case, it must be admitted that the sug- 
 gested remedy might prove worse than the malady. The 
 comparatively few workers retained would for a time enjoy 
 increased wages, but the majority would become social 
 wrecks. Schloss, commenting upon the answer of certain 
 "sweaters" to the Royal Commission appointed by the Brit- 
 ish Government to examine into the affairs of the sweated 
 industries, expresses a contrary view and says : "But if the 
 manufacturers, who ask us to believe that the retention of the 
 'sweating' system is an economic necessity, would only mus- 
 ter up sufficient energy to erect proper factories provided 
 with improved machinery run by steam power, then, with 
 suitable organization, they would find it perfectly feasible 
 to sell their goods as cheap as ever, and yet to pay decent 
 wages to their work people."* But to how many of them 
 That is the question. When a machine is introduced which 
 at one stroke cuts through twenty or more thicknesses of 
 cloth a great number of cutters are dispensed with, not be- 
 cause they are incapable — for the man skilled enough t(.> cut 
 
 *Giffen, Gross and Net Gain of Rising Wages, Contemporary, De- 
 cember, 1889.
 
 LABOR-SAVING DEVICES. 279 
 
 after a pattern ought to be more than capable of attending 
 a cutting machine — but because they are not required. 
 
 But even though the displaced workmen may be relegated 
 to the "social wreckage" described by Gififen, they still re- 
 main a factor in the industrial problem. Their constant 
 efforts to escape complete submergence make the unem- 
 ployed ready to underbid their fellows who have been suc- 
 cessful in entering the new society. The result of this is 
 to lower the wages of machine operators, and the secondary 
 effect is to make it increasingly difficult in countries where 
 manufacturing industries have been long established to in- 
 troduce labor-saving machinery. The swelling of the ranks 
 of the "sweated" and of the illy paid classes such as those 
 Schloss describes as working in the Midland nail industry 
 is not the cause of an evil : it is merely a manifestation of its 
 existence. 
 
 In spite of the airy assumptions of the economists it is 
 impossible in practice to easily displace large bodies of hand 
 operatives such as those working in the Midland nail works. 
 They cannot be turned over to the cold charities of the world 
 as they would have to be if machine nail making were ab- 
 ruptly introduced as Mr. Schloss suggests. The manufac- 
 turers understand this perfectly. They would cheerfully 
 introduce the labor-saving machines if they felt that they 
 dared do so. But they recognize the increased difficulty of 
 dealing with large bodies of men suddenly deprived of em- 
 ployment, and fear for the safety of life and property pro- 
 motes caution. 
 
 That this latter motive has a powerful influence no one 
 will question who is at all familiar with the history of the 
 Welsh tin industr>% in which the introduction oi improved 
 methods of manufacture was steadily resisted by the work- 
 ers, even when threatened with loss of employment throno-h 
 American competition. Whether Wales could liave pre- 
 served her monopoly of the manufacture of tinned plates in 
 the face of the determination of the people of the United
 
 28o PROTECTION AND PROGRESS 
 
 States to create a tinned plate industry in their own country 
 if the mill owners had promptly resorted to the use of 
 labor-saving machinery will not be discussed here. But it 
 may be remarked that the effect of reducing the number of 
 workingmen employed in the making of tin plates in the 
 Welsh mills has not conferred a benefit on those who man- 
 aged to retain their positions, for it has been found that the 
 manipulation of machines requires in many cases less skill 
 than was needed to make plates by hand. 
 
 Mr. Schloss, disregarding experiences of this kind, as- 
 serts that the substitution of machine for hand labor always 
 results in a permanent bettering of the condition of the 
 workers fortunate enough to obtain employment under the 
 changed conditions. His views, however, are not shared by 
 members of trades unions, who have an intimate knowledge 
 of the practical workings of such changes and know that the 
 result is as a rule disastrous to large numbers of their class, 
 who are forced by their operation to become part of the 
 social wreckage. 
 
 The attitude of the members of the British unions on 
 the question is instructive. A fair knowledge of it may be 
 obtained from the statement of Alfred F. Yarrow, of the 
 great English shipbuilding firm, made to a reporter of a New 
 York paper in January, 1889, who questioned him regarding 
 an offer which he had made through the London Times to 
 the striking engineers of Great Britain. Mr. Yarrow had 
 informed the strikers that if they would select a committee 
 of three or four men to visit America, inspect the manufac- 
 turing plants here and make a report to their associates at 
 home he would gladly defray the expenses of their trip. To 
 the reporter Mr. Yarrow explained his purpose by saying: 
 "American iron and steel workers are better paid than the 
 English, but they do far more than proportionately better 
 work. It seems to be the rule for each man (in America) to 
 do as much as he can, while at home every one is afraid 
 of injuring his fellow workman and does no more than he
 
 LABOR-SAVING DEVICES. 281 
 
 has to. One noticeable thing in connection with this is the 
 tending of automatic machines. I have seen one man in 
 charge of several machines here, while at home it is against 
 the rules of the union for a man to tend more than one. 
 Consequently he is idle a considerable part of the time."* 
 
 There is no hint in this statement that Mr. Yarrow re- 
 garded the American workingman as naturally superior to 
 the British. On the contrary, his offer to pay the expenses 
 of a visiting committee of British engineers implies that he 
 believed that it would only be necessary for such a body to 
 report to their fellows at home that Americans were gaining 
 an advantage because they worked more industriously, and 
 were tolerant of labor-saving machines to bring about an 
 instant disposition on the part of the striking engineers to 
 accept the terms of their employers, which embodied the 
 demand that the latter should be permitted to manage their 
 own afifairs without interference from the union so far as 
 the regulation of machine tasks and piece work was con- 
 cerned. 
 
 Mr. Yarrow is an extremely successful shipbuilder, but 
 it is quite evident that he was mistaken when he thought 
 that the arguments which appealed so forcibly to him as an 
 employer would strike the engineers in the same fashion. He 
 was generous enough, however, in his statement to assign the 
 true cause of the British workingman's opposition to the 
 employment of one man to attend several automatic ma- 
 chines, and did not, as too many do, rashly assume that it is 
 prompted by the desire to escape work. He says plainly that 
 the English engineers are afraid of injuring their fellow 
 workingmen, meaning by this that they clearly recognize that 
 the introduction of labor-saving machinery, while it ought 
 to be a gain to society generally, really results in swelling 
 the army to which Sir Robert Giffen referred when he spoke 
 of the "social wreckage" created by the march of modern 
 improvement. 
 
 *Schloss, The Dearness of Cheap Labor, Fortnightly, January, 1893.
 
 282 PROTECTION AND PROGRESS 
 
 It must not be inferred from Mr. Yarrow's testimony 
 that the workingman's motives are wholly unselfish. The 
 trades union system has promoted a marvelous solidarity, 
 and toilers under its stimulus are ready to make sacrifices 
 for each other which have the hall mark of true heroism. 
 But underlying the sentimental devotion to their cause is a 
 keen appreciation of the fact that their contest is one for 
 existence. The war of the workers against automatic ma- 
 chines — for that is what the refusal to permit them to be 
 worked to their full capacity amounts to — and the struggle 
 for a shorter day's work is due to their perception of the 
 fact that a greatly diminished demand for workingmen op- 
 erates to increase the social wreckage, and that the pressure 
 of the latter in turn results in reducing the wages of those 
 who attend machines. 
 
 The defect in the reasoning of those who assume that 
 the British workingmen are irrational in opposing labor- 
 saving devices is their failure to attach due importance to 
 the possibilities which may flow from their general use. 
 They concentrate their attention upon the success achieved 
 in the United States and disregard the fact that the condi- 
 tions which made this success possible are disappearing. 
 The signs are constantly multiplying that the facilities for 
 the production of manufactured articles in this country are 
 rapidly outstripping effective consumption. The fierce labor 
 wars witnessed at short intervals, tiie growing strength of 
 the unions and the recurring periods of depression in the 
 United States indicate that we are making startling progress 
 in the direction of a state of affairs which will, if tiiere is no 
 improvement in the distributive system, compel American 
 workingmen to adopt the same attitude toward their em- 
 ployers as that assumed by the British workingmen. 
 
 If the theory of the economists who preach the doctrine 
 of the greater efficiency of labor were sound we might hope 
 to escape the difficiflties which confrotit ns. 1'ut there is no 
 foundation for the assumption that American workers differ
 
 LABOR-SAVING DEVICES 283 
 
 essentially from those of other countries. That they are 
 now willing to exert themselves to the utmost is probably clue 
 to the circumstance pointed out by an acute English observer 
 that the United States is still a country of possibilities. This 
 writer remarks: "Life here (in the United States) has a 
 vigor about it wholly unknown in Europe. The contrast be- 
 tween the slow dalliance of the British, French or German 
 laborer starting for a day's work with the impetuosity and 
 absolute disregard for personal safety in the rush which 
 characterizes the competing classes here is very striking."'' 
 This state of affairs is due to t4ie belief of the bread winner 
 in America that he may hope to better his condition. It is 
 the opinion of this foreign critic that it is this hope that 
 induces workers in America to accept heavier tasks than 
 common abroad. "Europeans," she says, "soon discover that 
 there are very few, if any, stereotyped positions as there arc 
 in older countries." But the "elastic possibilities which 
 foster effort and ambition and make success an honorable 
 thing worth striving for and valuable when attained"! stim- 
 ulate the American worker to accept the new and to some 
 extent harder conditions, and to feel that he is not imposed 
 upon in doing so. 
 
 How long this feeling can survive in the United States i ■ 
 a question worth considering by those who entertain the view 
 that the beneficent results attending the introduction of 
 labor-saving machinery must outweigh the admitted evils 
 which follow the displacement of large bodies of workers. 
 and by those economists who hold to the opinion that this 
 country enjoys a marked advantage over others in the pos- 
 session of a population of workers capable and willing to 
 exert themselves to the utmost. If there is ground for the 
 belief that the development of the facilities of jiroduction 
 have outstripped effective consumption we should not shrink 
 
 ♦Yarrow, Alfred F., Interview with in New York Herald, Jan. 9, 
 
 3. 
 
 fRuntz, Rees, Wage Values in America, Westminster, July, 1890.
 
 284 PROTECTION AND PROGRESS 
 
 from contemplating the possibilities or attempt to lull our- 
 selves into a feeling of false security by accepting theories 
 as untenable as those embodied in the "efficiency of labor 
 idea." It would certainly be a mistake to assume that any 
 of the feats accomplished by American vvorkingmen cannot 
 be imitated by Englishmen or their continental brethren. 
 The virtues pointed out by Mr. Yarrow as giving the Ameri- 
 can shipbuilder an advantage over his British competitor 
 may be easily adopted. The trades unionists of Great Britain 
 are not entirely unamenable to reason. They are doing all 
 in their power to prevent the increase of "social wreckage," 
 but they are not uninfluenced by the argument that their 
 resistance to the innovations they dread may result in worse 
 disaster to them than the pauperization of a part of their 
 number, and they show a disposition to yield. It was the 
 apprehension created by the obvious encroachments upon 
 various branches of the British machine manufacturing in- 
 dustry by Americans and Germans which in 1898 forced the 
 striking engineers of England to submit, and the same fear 
 will doubtless have the effect of compelling further conces- 
 sions from the unions. 
 
 But in making these concessions the workingmen do not 
 deceive themselves. They foresee the result far better than 
 Messrs. Schoenhoff, Schloss, Giffen and others, who persist- 
 ently refuse to give due consideration to the probable re- 
 actionary effect of the constant increase of the submerged 
 class, from which the army of the sweated is recruited. 
 As previously pointed out, the existence of an excessive 
 population in England ready to accept the exacting condi- 
 tions imposed on the nail makers is a constant menace to 
 what some erroneotisly term the higher forms of labor. 
 Experience has abundantly demonstrated in England that 
 the competition for employment in factories where machinery 
 is used is excessive, and that in spite of the efforts of trades 
 unions to secure for their members as large a share of the 
 fruits of their industry as possible the advance in wages bears
 
 LA,BOR-SAVING DEVICES 285 
 
 no proportion to the enormous increase of production result- 
 ing from the substitution of machine for hand labor. 
 
 Sir Robert Giffen, although he makes a strong argument 
 to support his contention that society generally has been 
 the gainer by the introduction of labor-saving machinery, 
 admits that "workmen in particular employments do not 
 get a reward at all in proportion to the increase of production 
 in those employments." He cites the familiar cotton mill 
 in which "a single attendant on a number of machines will 
 'produce' as much in an hour as formerly in a year or two, 
 but his wages are only double — or perhaps not quite double — 
 what they were when the production was so much less. A 
 great steamship supplies another illustration. The ship does 
 many times the work which could have been performed by 
 the sailing ship it has displaced and with much fewer men in 
 proportion to the tonnage conveyed. But the wages of the 
 average member of the crew are again only double, or not 
 quite double, what they were when the conveyance done was 
 so much less. In these and similar cases who gets the benefit 
 of all the increase of production? The workmen in the 
 particular employments concerned receiving only a fraction 
 of the gain may be excused for suspecting that there is some- 
 thing inexplicable in these social and economic arrangements 
 by which the benefit is spirited away from them."* 
 
 Avoiding all reference to the effects on society in gen- 
 eral and confining the discussion to the question whether the 
 workingman, reasoning from past experience, can look for- 
 ward to the further use of labor-saving machinery to improve 
 his condition, it must be admitted that the prospect for him 
 is by no means so encouraging as the optimistic originators 
 of the efficiency of labor theory would have us believe. If 
 the effect of the additions to the world's facilities for dis- 
 pensing with human handiwork have been as described, what 
 reason is there to suppose that the further enlargement which 
 
 *Runtz, Rees, Wage Values in America, Westminster, July, 1890.
 
 286 PROTECTION AND PROGRESS 
 
 is going on in an almost geometrical ratio will benefit the 
 toiler? 
 
 As yet the disposition to employ evtry conceivable labor- 
 saving device without regard to consequences has only man- 
 ifested itself in the United States. What will happen when 
 the methods are generally adopted which have been tolerated 
 in this country, largely because up to the present time, in 
 spite of the rapid development of manufactures, it has been 
 found impossible to meet the demand of an entrenched mar- 
 ket except by a resort to the most rapid means of produc- 
 tion ? There is no ground for assuming that the introduction 
 of nail making machinery into England would not be fol- 
 lowed by the adoption of similar or even more improved 
 processes in Belgium, Germany, Russia and the Orient. The 
 result would be an enormously enlarged output without a 
 corresponding enlargement of the world's consumptive abil- 
 ity. The displaced handworkers would join the rapidly 
 increasing army of the submerged, while the number of 
 human beings who belong to "the new society" pictured by 
 Sir Robert Giffen would relatively diminish. The active 
 contingent in "the new society" would inevitably be subjected 
 to a competition infinitely more severe than any hitherto 
 experienced by the working classes, for, as experience 
 teaches, difficulties of this nature are cunmlative, not only as 
 to the multiplication of their number, but in intensity. 
 
 Whatever the increased resort to labor-saving machinery 
 may accomplish, it does not hold out the hope to working 
 people generally that their condition will be bettered ; nor, 
 as already pointed out, is there a reasonable certainty that 
 the survivals, those fortunaic enough to escape the fate of 
 being cast among "the social wreckage," will derive a per- 
 manent advantage unless there is a readjustment of the 
 benefits flowing from improved processes which will give 
 the actual worker a greater share than is implied in a doub- 
 ling of wages as the result of a twcntyfold increase of out- 
 put. And this doubling which Sir Robert Giflfen says has
 
 LABOR-SAVING DEVICES. 287 
 
 occurred can only be regarded as temporary, for, in spite 
 of all the attempts to demonstrate that the workingman who 
 escapes submergence is bettered by modern improvements, 
 there is a growing mass of testimony that there is a steady 
 tendency of wages, both nominal and real, to decline under 
 the stress of the competition of the increasing number fitted 
 to meet the exacting conditions of modern industry, but who 
 are unable to find work. 
 
 There is an unwarranted assumption that the "social 
 wreckage" described by Sir Robert Giffen represents in- 
 capacity. Sir Robert himself says that "a class may con- 
 tinue to exist and even increase in the midst of our civiliza- 
 tion, possibly not a large class in proportion, but still a con- 
 siderable class, who are out of the improvement altogether, 
 who are capable of nothing but the rudest labor, and who 
 have neither the moral nor the mental qualities fitted for 
 the strain of the work of modern society." How did Sir 
 Robert obtain the information which enables him to pass so 
 harsh a judgment on the "social wreckage" of modern in- 
 dustrialism? How does he know that there is a lack of 
 capacity? How can any one affirm that men are incapable 
 when the conditions are such that it is impossible for them 
 to obtain an opportunity to demonstrate their capacity? 
 
 No doubt the army of the submerged contains a large 
 number of inefficients, but how many of them have been 
 made so by circumstances ? There is no more erroneous idea 
 prevalent than that which credits workingmen who have 
 been fortunate enough to retain jobs while their comrades 
 were relegated to the social wreckage with being exponents 
 of the truthfulness of the theory of the survival of the fit- 
 test. A personal experience of the writer convinced him of 
 the fallacy of this too common assumption, and it may be 
 related as being typical of the process and the results which 
 follow the introduction of the labor-saving machines. In 
 the year 1895 the proprietor of the newspaper under the 
 supervision of the writer concluded to introduce the linotype
 
 288 PROTECTION AND PROGRESS 
 
 machine into his composition room. Being desirous of 
 retaining as many as possible of the printers in his employ 
 at the time of the innovation he concluded to bear the burden 
 of educating the force necessary to manipulate the machines. 
 No experts were employed, but the old hands, under the tui- 
 tion of one or two moderately expert men already working 
 for the paper, learned to run the machines. There were 
 seventeen machines introduced, and they were capable of 
 performing the work of at least fifty compositors. It there- 
 fore became necessary to make a selection from the force. 
 It was soon discovered that the man who had been a dexter- 
 ous typesetter would experience no great difficulty in manip- 
 ulating the keyboard of the linotype ; or, to put it in another 
 form, the whole corps of printers, had they been afforded 
 an opportunity, could have achieved a greater or less degree 
 of success as linotype operators. The matter finally resolved 
 itself into a question of selecting those who had been longest 
 in the service of the paper or who had in some manner or 
 other shown devotion to its interests. The men displaced 
 by the machines, had they been fortunate enough to secure 
 a job, would doubtless have shown as much efficiency as 
 those retained, but they were compelled to seek new fields 
 for their labor, or, failing in that, to join the social wreckage. 
 It is not venturing much to say that the illustration fur- 
 nishes a complete disproof of the theory that the members 
 of the social wreck owe their misfortunes to their own in- 
 capacity. The linotype is a complicated machine requiring a 
 high degree of skill in its manipulation ; yet it was found 
 that an average body of men, accustomed all their days to 
 the performance of an essentially different character of 
 manual work, could speedily adapt themselves to the new 
 requirement Had it been a mere substitution of machine 
 for hand labor not requiring a reduction of the force of 
 workers there is no doubt that every one of the printers 
 referred to could have fitted himself for the change. This 
 negatives the idea of survival of the fittest and shows con-
 
 LABOR-SAVING DEVICES. 289 
 
 clusively, in this case at least, that the matter resolves itself 
 into one of elimination. The machines enabled the employer 
 to dispense with a certain number of men and he availed 
 himself of the opportunity. The economists assume that the 
 displaced find new grooves to fill, but the testimony is over- 
 whelming that a constantly increasing number are entirely 
 excluded from the "new society" and forced to become part 
 of the "social wreckage," not, however, without struggling 
 against the hard fate imposed upon them. The struggles of 
 the excluded take the form of securing employment at any 
 price, and their vain efforts to save themselves from com- 
 plete submergence have the effect of reducing the wages of 
 those fortunate enough to retain employment. 
 
 It is the perception of this fact, that the "social wreck- 
 age" is a constant menace to the workingman, that makes 
 trades unionism so strong in Great Britain and is respon- 
 sible for that attitude of hostility to automatic and other 
 labor-saving machines which does not manifest itself in open 
 violence, but takes the form of an attempt to minimize the 
 value of the improved machinery by preventing its thorough 
 utilization. The workingmen of Great Britain are con- 
 vinced that the effect, so far as they are concerned, of the 
 use of the ingenious machines which do the work of five 
 men is to diminish the number of workers and to intensify 
 the struggles for the positions that are left. They do not 
 accept the optimistic view of the Schoenhoffs and the 
 Schlosses that their class will benefit in proportion as pro- 
 ductivity is increased. They have the evidence of a twenty- 
 fold increase of output and a wage scarcely doubled con- 
 fronting them, and they cannot be induced to shut their eyes 
 to the fact that the army of the unemployed is being daily 
 reinforced, nor can the individual worker get rid of the fear 
 that he too may any day be forced to join its ranks. 
 
 This fear is not likely to be diminished by the success of 
 the employers in the recent strike of the British enq;ineers. 
 The triumph referred to will have the practical effect of 
 
 19
 
 290 PROTECTION AND PROGRESS 
 
 suspending' for a time tlie efforts of llie unions to interfere 
 with the introduction and more extended use of labor-saving 
 machines, but the advocate of the efficiency of labor theory 
 will hardly point to it as corroboration of the soundness of 
 his views, for the submission of the engineers was only se- 
 cured when the fact was made clear to them that unless 
 they submitted to the conditions which they deemed onerous 
 the Germans, Belgians and Americans would take away 
 British trade and thus leave them without an opportunity to 
 earn a living on any terms. It was a case of the acceptance 
 of half a loaf rather than do without any bread at all, and 
 is in no sense to be regarded as a recognition of the sound- 
 ness of the contention that the freer use of labor-saving 
 machinery is beneficial to the working classes. And it may 
 be added that no sensible observer of the struggle now in 
 progress believes that those who retain their places after 
 the process of elimination which must follow the compulsory 
 attendance by British worlvcrs of more machines than for- 
 merly will be benefited by an increase of the wage scale. 
 
 There was no pretense throughout the long and bitter 
 fight that such would be the result. On the contrary, it 
 was distinctly stated on behalf of the employers that they 
 were forced to the course they took by the pressure of com- 
 petition. They were compelled, they said, to meet the lower 
 wages, longer hours and better methods of foreigners by 
 what amounted to a practical reduction of the wages of 
 British workers. This being the case, it is idle to hold out 
 the hope that the increased productiveness due to the still 
 larger employment of automatic machinery will result in a 
 higher wage scale. Experience shows that even those for- 
 tunate enough to secure an increase cannot look upon their 
 gain as permanent ; the ever increasing competition forbids 
 any such thought. It points rather to increased difficulty 
 in retaining work and diminished compensation to the 
 worker. 
 
 This is how the American worker is beginning to look
 
 LABOR-SAVING DEVICES 291 
 
 at the matter. It is possible tliat for some time to come he 
 may feel the spur of "possibility" and respond to it, but as 
 the chances of bettering himself decrease the stimulus to 
 exertion will disappear and he will become more and more 
 like his fellow in Great Britain, His pace in that direction 
 will be accelerated if the barriers of protection are thrown 
 down and he is forced to meet the whole world on even terms. 
 By diminishing the area of competition the American worker 
 is relieved of part of the pressure and the rewards for his 
 toil are larger. The non-productive consumer, who, under 
 the law of universal competition, benefits without contrib- 
 uting to the increase of productivity, is forced by the pro- 
 tective tariff of the United States to assist in stimulating 
 the worker to increased exertion by being compelled to pay 
 higher prices than he would be obliged to if there was any- 
 thing like an approach to uniform development of manufac- 
 turing throughout the civilized world. Withdraw this stim- 
 ulus and allow manufactured croods to come in freely from 
 all countries and the result would be an equalization of the 
 conditions of the workers. And it would not be, as the 
 efficiency of labor theorists assume, in the direction of a 
 general lifting up; on the contrary, the working people of 
 the nations willing to accept the least remuneration would 
 set the pace for all others.
 
 CHAPTER XIV. 
 PRODUCTION AND CONSUMPTION. 
 
 THE GROWING TENDENCY TO OVERPRODUCE AND ITS CONSE- 
 QUENCES. 
 
 Rapid development of industrialism — The menace of a general glut 
 — Overproduction the subject of a British inquiry — Competition 
 results in depriving producers of a fair profit — Excessive pro- 
 duction in the United States — The ability to produce enor- 
 mously exceeds the effective consumptive demand — Develop- 
 ment of manufactures likely to proceed more rapidly in the 
 future than in the past — Growth of the world's iron industry 
 in thirty-six years — Overproduction compels the unloading of 
 surpluses on foreigners to preserve the home market — Free 
 trade does not establish equal conditions — Problems called into 
 existence by a general determination to promote industrial de- 
 velopment — Labor-saving machinery that produces enough in a 
 few days to supply the effective demand for a year — The hope 
 that the Orient would afiford a dumping ground for the surplus 
 of Western manufacturing nations gradually declining — Atti- 
 tude of protectionists towards competition — The doctrines of 
 Malthus and their relation to modern economics — The middle- 
 man a sufferer from excessive competition — The markets of 
 the world and overproduction. 
 
 In the two preceding chapters it was shown that mod- 
 ern political economists in an effort to bolster the teachings 
 of Cobdenism deluded themselves and their followers into 
 believing that the ability to develop a high form of indus- 
 trial organization was confined to a few nations. The 
 error of the assumption that the advanages enjoyed by 
 certain nations today is due to racial superiority was ex- 
 posed by citing facts from history which show that the 
 
 world is in a constant state of industrial evolution, and 
 
 292
 
 CONSUMPTION 293 
 
 that the backward peoples of one period are in the van of 
 progress in the next. An examination was also made of 
 the causes which contribute to the ability of the people of 
 some countries in the present day to produce more cheaply 
 than others, and it was disclosed that any superiority dis- 
 played was not due to natural capacity, but was the result 
 of acquired skill or a willingness on the part of the suc- 
 cessful to put forth greater exertions than rivals. It was 
 also shown that the stimulating effect of the introduction 
 of labor-saving machinery soon loses its force and that 
 workingmen speedily assume a hostile attitude towards 
 innovations. When the toiler discovers that the benefits 
 of the improved labor-saving devices are almost wholly 
 engrossed by those who do not toil there arises a tendency 
 on his part to hinder rather than promote the efficient work- 
 ing of automatic and other devices for dispensing with 
 the use of hand labor. 
 
 In this chapter an effort will be made to show that this 
 tendency to interfere with the use of labor-saving devices 
 must be greatly increased unless some means can be dis- 
 covered by which the benefits resulting from the saving 
 ■effected may be more evenly distributed. The purpose 
 of the inquiry is not to exploit socialistic theories, but to 
 expose as fully as possible the fallacy which underlies the 
 idea that the workingman can hope for relief from the dan- 
 ger of non-employment which constantly confronts him by 
 intensifying competition. 
 
 We have seen from the quotations submitted in discus- 
 sing the question of the ability of men of average intelli- 
 gence adapting themselves to the manipulation of labor- 
 saving machinery that certain economists hold the view 
 that the adoption of the most highly developed forms of sav- 
 ing energy by the manufacturers of a nation is all that is 
 necessary to insure the prosperity of its working people, 
 the theory being that the ability to produce on the same or 
 better terms than rivals is all that is required to bring about
 
 294 PROTECTION AND PROGRESS 
 
 such a result. But this theory takes no account of the fact 
 that if the nations, which are merely aggregates of units, 
 exert themselves to the utmost they must intensify the evil 
 of overproduction. If individuals competing with each 
 other in a few countries with highly developed industries 
 can bring about the result noted by Sir Robert Giffen, of 
 relegating a large proportion of their fellow creatures to 
 a condition described as "social wreckage," what will fol- 
 low when all the nations now animated by the desire to 
 join the march of improvement have succeeded in establish- 
 ing manufacturing plants capable of supplying their own 
 wants and a surplus for export? 
 
 That many nations now dependent for supplies of man- 
 ufactured articles upon the countries foremost in the mod- 
 ern industrial development are capable of reaching the 
 stage of self-dependence in a comparatively brief period 
 no competent observer doubts. Even those who have leaned 
 to the idea that the remarkable superiority in manufacturing 
 industries displayed by Western peoples is evidence of their 
 special fitness for such pursuits are occasionally betrayed 
 into admissions fatal to the assumption that a competitive 
 contest, in which the whole world may take part, will prove 
 beneficial to mankind. Indeed, if the views of the free 
 traders are narrowly examined it will be seen that the hope 
 of the Western world remaining supreme industrially is 
 based on the expectation that some nations will always con- 
 tinue in a state of dependence. 
 
 There has until recently been a firm belief that there 
 would always be an increasing external market ready to 
 absorb the surplus of those countries capable of produc- 
 ing in excess of their own needs. The foremost exponent 
 of the free trade idea in the United States in 1892*, and the 
 author of a bill designed to give this country a tariff sys- 
 tem resembling that of Great Britain, in a speech advocating 
 his measure expressed the conviction that any sacrifice 
 *MiIls, chairman House Committee on Ways and Means.
 
 CONSUMPTION 295 
 
 of the home market which might resuh from the operations 
 of his revenue scheme, if it were carried into effect, would 
 be more than compensated by the gain of foreign markets. 
 His contention was not that we should be enabled to increase 
 our exports of agricultural and similar products and thus 
 offset the loss which would follow the surrender of part 
 of our home market to the foreign manufacturer, but he 
 urged that the effect of striking down the protective bar- 
 riers would be to put us in a position to compete with other 
 countries for the trade of those peoples who were supposed 
 to be incapable of developing a manufacturing industry 
 of their own. 
 
 In another place the extent of the markets of coun- 
 tries showing no disposition to manufacture for them- 
 selves will be discussed and the possibility of any very con- 
 siderable enlargement of them will be investigated, but 
 our inquiry here will be confined more particularly to the 
 ascertainment of the capabilities of what may be termed 
 the surplus nations. The results have in a measure been 
 foreshadowed in the chapters in which the fact was made 
 apparent that when a people is once inspired Ijy the desire 
 to achieve industrial independence there are no obstacles in 
 the way of their doing so, provided the natural resources 
 exist. The lack of capital and skill may be overcome with 
 comparative ease. The experience of the United States 
 proves this, and Russia is to-day furnishing an illustra- 
 tion of what can be accomplished when the determination 
 is reached to develop latent resources. In the passages 
 devoted to describing the effects of the introduction of 
 labor-saving machinery we also had a glimpse of the pos- 
 sibilities. It was shown that the ability to manipulate com- 
 plicated machines could easily be acquired by working- 
 men of ordinary capacity, and the natural inference to be 
 drawn from this is that there are absolutely no bounds 
 to the productivity of such machinery except the inability 
 of the world to effectively consume.
 
 296 PROTECTION AND PROGRESS 
 
 This is a phase of the question which has not received 
 the attention it deserves. The professional economist has- 
 assumed, in spite of the constant practical denials of his 
 theory, that such a thing as overproduction is impossible. 
 It may be admitted that there is something incongruous 
 in the statement that there is an almost constant overpro- 
 duction of manufactured articles concurrent with a cry- 
 ing demand for them which is never satisfied. But with 
 this unsatisfied demand we have nothing to do at present, 
 and so far as can be seen the practical economist will not 
 have much to do with it until the competitive system is 
 completely overturned. We are now dealing solely with 
 the phenomenon which Professor Rogers considered in a 
 lecture nearly ten years ago, when he said: "Supply may 
 be in excess of demand, and prices may fall below what is 
 remunerative. Such a state of things, if we can believe the 
 complaints which have been made, and were loud and per- 
 sistent enough to secure a hearing from a Royal Commis- 
 sion, was characteristic of British production and trade 
 pretty universally up to about a year ago (1888) and 
 induced many persons to seriously doubt whether the spec- 
 ulative economists were, after all, in the right when they 
 repudiated the possibility of a general glut. * * * It 
 seems that the beneficent operation of competition is at 
 an end, and that if the existing body of producers is to 
 exist some other expedient is to be adopted by which a 
 fair profit can be gained by a national industry."* 
 
 Since these words were uttered by Professor Rogers 
 there has been no improvement in the situation. The ten- 
 dency which he noted in Great Britain has manifested itself 
 in a country which has scarcely more than entered on its 
 career of manufacturing industry and which has possibili- 
 ties in the form of undeveloped resources immeasurably 
 
 ♦Rogers, Industrial and Commercial History of England, p. 377.
 
 CONSUMPTION 29; 
 
 surpassing those of the hitherto most successful commercial 
 nation of modern times. During the years between 1892 
 and 1897 the United States suffered as severely from the 
 effects of production in excess of the ability of its people 
 to effectively consume as Great Britain. There was no 
 increase of production during these years ; on the con- 
 trary, there was a striking diminution. The output of pig 
 iron, which had reached 9,157,000 tons in 1892, fell to 
 6,657,388 tons in 1894 and in 1896 was only 8,623,127. The 
 iron industry fairly reflected the condition of American 
 manufactures during the period in question. They all 
 showed a marked reduction of output due to a declining 
 demand. 
 
 To examine the theories put forth in explanation of 
 the diminished consumption would cause a digression which 
 would divert attention from the point which the writer 
 seeks to emphasize — that under existing conditions of dis- 
 tribution the facilities for manufacturing are enormously 
 in excess of prospective effective consumption, and that 
 these facilities are constantly being added to without any 
 corresponding effort to enlarge the effective demand. Re- 
 curring to our illustration, we find that the production of 
 pig iron, which dropped to 6,657,388 tons in 1894, in 1897 
 rose to 9,652,680 tons, and it is confidently believed at 
 the time of this writing that the output of the United States 
 in 1898 will reach and perhaps exceed 12,000,000 tons. 
 The only inference to be drawn from this sudden expan- 
 sion is that the ability of the United States to supply the 
 demand of its people for iron has reached the surplus stage, 
 and when we examine the table of exports we find the infer- 
 ence supported by figures showing that this country has iron 
 to spare in abundance. 
 
 But the United States is not the only country posses- 
 sing abundant mineral resources and a disposition to develop 
 them. An English writer, in a recent discussion of the 
 subject of industrial supremacy, answering a question pro-
 
 298 PROTECTION AND PROGRESS 
 
 pounded by himself, said: "Is it probable that the United 
 States are possessed of natural resources so exceptional 
 * * * that they are not likely to be seriously threatened 
 by the competition of other and newer countries in the 
 not distant future? My own investigations lead me to the 
 conclusions that no single country has thus been endowed 
 by nature and that the mineral wealth of the world is 
 distributed over so wide an area that no single country 
 can hope to enjoy supremacy in so widely diffused an in- 
 dustry as that of the manufacture of iron and steel for a 
 long period — long, that is, as periods go in the history 
 of the world. It may be that to-day the industrial situa- 
 tion of the United States, or of the United Kingdom, looks 
 impregnable, but it is always much less so than it appears 
 to be. 
 
 "It is not many years since I was confronted with fig- 
 ures which appeared to prove with convincing relevancy 
 that the cost of the production of iron in Nova Scotia would 
 be less than on any other part of the American continent. 
 I enjoy a fairly considerable acquaintance with the mineral 
 resources of New South Wales "* * * and it would not 
 surprise me to learn that, with the iron ore resources of 
 Carlo's Gap, Picton and other parts of the colony, and the 
 large coal fields near at hand, iron could be manufactured 
 in that distant colony as cheaply as in any part of the 
 world. Then, again, everyone is looking forward to the 
 possibility of a considerable development in the not dis- 
 tant future of the mineral resources of British India, of 
 China, of Siberia and of Japan. So far as India is con- 
 cerned, I have examined a number of volumes of memoirs 
 of the geological survey of the empire and cannot fail 
 to be struck with the evidence which they afiford of vast 
 m.ineral wealth, alike in coal and in iron ores, scattered 
 with bountiful profusion over very wide areas. The de- 
 mand for metals is not yet large enough in India to justify 
 a large metallurgical industry, nor is it by any means cer-
 
 CONSUMPTION 299 
 
 tain that such a demand will speedily come about ; but that 
 under suitable conditions India could manufacture iron 
 and steel cheaply scarcely admits of a doubt. Of China 
 and Japan but little need be said, because, while both coun- 
 tries are at the present time engaged in building iron and 
 steel works, no export trade from either is likely to be 
 developed for many years. 
 
 "Matters, however, are much more likely to ripen into 
 a competitive trade in some European countries, and notably 
 in Spain and Russia. * * * I had the pleasure of 
 going over a number of Spanish iron and steel works 
 only eighteen months ago, and I confess to having been 
 surprised at their mechanical and economic circumstances. 
 If Spanish coke of good quality can be delivered at either 
 Bilbao, Aries or Rinaldes at sixteen shillings per ton I 
 can conceive of no good reason why pig iron, both hema- 
 tite and basic, should not be made for twenty-eight shilHngs 
 a ton^ at which rate it would be the cheapest pig iron in 
 Europe, except that produced, on a comparatively small 
 scale, under very exceptional circumstances, by the Peine 
 Iron Company near Hanover, Germany. 
 
 "So far as Russia is concerned, it seems almost absurd 
 to speak of an empire that is now importing about three- 
 quarters of a million tons of iron and steel annually from 
 other countries as likely to enter the ranks of competing 
 countries within a period of time worth taking account of. 
 As a matter of fact, however. Russia may be much nearer 
 to the attainment of this position than is commonly sup- 
 posed. One can onlv q"uess at some of the geographical 
 and economic results that are likely to follow upon the 
 opening of the trans-Siberian railway. It is well known 
 that Siberia is a country rich in minerals of every kind, 
 and although the present population is almost ridiculously 
 small for such a country * * * still the advent of rail- 
 way facilities must mal-e a momentous change in the rela- 
 tions of Orient and ( )rcident. Leaving this for the mo-
 
 300 PROTECTION AND PROGRESS 
 
 mcnt, however, I happen to be aware of a project now on 
 the tapis for erecting large iron and steel works between 
 the Caspian and Black seas, which are intended to supply 
 the requirements of a large part of Turkey and Persia, 
 as well as of a certain area in Russian territory now insuf- 
 ficiently provided for; and in one or two other centers ag- 
 gressive ideas begin to be entertained."* 
 
 These observations, proceeding, as they do, from one 
 of the best modern authorities, a man of large practical 
 experience and a free trader, convey the impression that 
 the future development of the iron and steel industry may 
 be expected to surpass that of the past. In summing up, 
 Mr. Jeans says this will undoubtedly be the case. He adds : 
 "The present annual output of pig iron throughout the 
 world is about 32,000,000 tons; in 1880 it was only about 
 18,000,000 tons; in 1870 only 12,000,000 tons, and in 1850 
 less than 5,000,000 tons. If the same rate of increase is 
 ma-'ntained in the future, our annual consumption of pig 
 iron in 191 6 will be 46,000,000 tons and in 1934 — a date 
 within the probable existence of most of the young engi- 
 neers and metallurgists now living — it will be more than 
 60,000,000." t 
 
 It is well to proceed with caution in expressing an 
 opinion of the possibilities of the future, but it is not un- 
 reasonable to assume that the consumptive demand of the 
 world will not increase in any such ratio as that suggested 
 by Jeans. While iron and steel are not entirely imperish- 
 able, their durability is sufficiently great to warrant our 
 supposing that when the world is measurably well sup- 
 plied with railroads and with structures largely composed 
 of iron and steel the demand for these metals will to some 
 extent be abated. In the United States the requirements 
 
 *Jeans, The Shifting Site of National Industrial Supremacy, En- 
 gineering Magazine, April, 1898. 
 t Ibid.
 
 CONSUMPTION 301 
 
 of the railroads have been as high as 2,271,471 tons of 
 steel rails in a single year, but this demand was largely 
 due to new track-laying. In subsequent years, although 
 construction was not entirely suspended, the demand for 
 rails fell off greatly. In 1893, although nearly two thou- 
 sand miles of new tracks were laid, the consumption of rails 
 was only 1,119,813 tons. It is very probable that many 
 thousand miles of additional road will be added to the 
 existing railway system of the United States between now 
 and 1934, but it is inconceivable that the additions will be 
 as large as those made during the thirty-six years preceding 
 1898. In 1862 the railroad mileage in the United States 
 was less than 28,000 miles ; at the end of 1895 it was 179,162 
 miles. Does anyone fancy that the future will witness 
 an average construction in this country of nearly 5,000 
 miles annually? Hardly. If one-half that much track is 
 added during the coming thirty-six years we shall com- 
 mit the blunder of providing ourselves with unnecessary 
 facilities, which will add to the difficulties of an already 
 serious problem and greatly increase the cost of transpor- 
 tation. 
 
 When we inquire regarding the possible demands for 
 iron and steel for structural purposes the idea that it can- 
 not increase in the progressive fashion Mr. Jeans suggests 
 is forced upon us. At present the requirement for tall 
 buildings is tremendous, but there is already noticeable a 
 tendency to discuss the question of. Where are all the 
 tenants to come from to fill the "sky scrapers" added each 
 year in our large cities? In New York and Chicago the 
 completion of a new tall building with slightly better ac- 
 commodations than those already in existence is the sig- 
 nal for tenants to desert the less modern structure. The 
 competition has become so great that in spite of the lim- 
 ited area of New York City there is no increase in ofifice 
 rents and capitalists are complaining that they are not 
 receiving adequate returns on their investments in prop-
 
 302 PROTECTION AND PROGRESS 
 
 erty of this character. So, on the whole, we may con- 
 clude that while many tall structures will be added to 
 those already in existence the addition will not be great 
 enough to help swell the consumptive demand for iron 
 and steel to such figures as would be required to bring our 
 proportion of the increase of the world's consumption up 
 to the mark indicated by Jeans. As in the case of rail- 
 roads, in which the demand for rails diminishes as the coun- 
 try is supplied with roads, so must the demand for steel 
 structural purposes grow less when the cities of the coun- 
 try are well provided with large structures fot office and 
 other purposes, for the fact must not be lost sight of 
 that a well constucted edifice with a steel frame is likely 
 to endure a hundred years or more ; perhaps the longevity 
 of such buildings may rival that of the best structural sur- 
 vivals from the Middle Ages. 
 
 There are other directions in which the use of steel and 
 iron may be increased, notably in the construction of bridges 
 and in the manufacture of pipes for conveying gas and 
 water and oil and in shipbuilding. That the demand from 
 these sources will be considerably enlarged in the United 
 States and in other countries in the future cannot be 
 doubted, but it is certainly questionable whether the increase 
 in this particular will reach the colossal proportions it 
 would have to in order to help create an annual consump- 
 tion of 60,000,000 tons of iron and steel. A modern steel 
 bridge, if properly constructed, will endure for many years ; 
 so, too, will pipe lines ; therefore, when the needs of a coun- 
 try are once fairly supplied in these particulars the demand 
 for material for new construction must abate. In the case 
 of steel ships there is no probability of any extraordinary 
 expansion of demand. The signs all plainly point to a 
 redistribution of the ocean carrying trade of the world 
 rather than to simultaneous development of the shipping 
 industry in every country. It is clearly apparent that the 
 business of shipbuilding is now overdone. That is shown
 
 CONSUMPTION 303 
 
 by the fact that the carrying industry, while its aggregate 
 earnings are enormous, is not a very profitable one. In 
 some countries it can only be kept alive by extending boun- 
 ties to shipowners for maintaining and running vessels which 
 could easily be dispensed with. In order that the demand 
 for ships should be greatly enlarged it would be necessary 
 to still further extend the wasteful system of unnecessary 
 hauling now in vogue, but there is no probability that that 
 will be done. The system of protection, as it becomes bet- 
 ter understood and is more generally practiced, will reduce 
 this waste to a minimum. Mr. Jeans' observations on the 
 wide diffusion of the metals pertinently suggests what may 
 happen when the owners of some of these at present unde- 
 veloped resources conclude to develop them for themselves 
 rather than remain dependent on foreigners for supplies 
 which they might obtain at home. In the face of such devel- 
 opment there may be an increase of external commerce, but 
 it is inconceivable that it should be relatively as great as 
 that hitherto noted which has been largely due to a prac- 
 tice analogous to "hauling coals to Newcastle." A rational 
 exchange of non-competing products will demand fewer 
 ships than are now used in the unnecessary transportation 
 to and fro of raw materials and finished articles and for 
 the moving of the vast quantities of coal now required to 
 supply vessels engaged in an entirely superfluous trade. 
 
 But, apart from these assumptions, which may prove 
 erroneous because too much dependence is placed upon 
 the belief that the disposition to eliminate wastefulness in 
 transportation will take a practical form when its evils 
 are clearly apprehended, it may be argued that even should 
 there be such a developm.ent of demand for the products of 
 iron as the production annually of 60,000,000 tons implies, 
 the world will, for a time at least, be abundantly able to 
 provide such a quantity, and the indications are that the 
 ability to supply will in the future, as in the past, constantly 
 exceed the effective consumptive demand. Such a prospect
 
 304 PROTECTION AND PROGRESS 
 
 is not calculated to fill with hope those who realize that 
 the modern system of production is conducive to the cre- 
 ation of a vast social wreckage, and it will encourage those 
 who hold the opinion that unrestrained competition is an 
 evil to persevere in their determination to restrict its area, 
 and thus in a measure abate it. 
 
 Those who adhere to the^ view that the world is not 
 benefited by absolute free trade will hardly abandon it 
 when they realize what may happen from the extension 
 of a system which has been introduced into Germany and 
 which meets with great favor in this country. It is not 
 novel, for, as we have already seen, the method was advo- 
 cated and practiced with marked success by Great Britain 
 during the first half of the present century. Reference is 
 made to the practice of unloading upon rivals the surplus 
 products of manufactures at a lower price than that which 
 rules in the home market. A double purpose is accom- 
 plished when this is done. The ruinous effects of exces- 
 sive internal competition are avoided, and the rival for- 
 eign manufacturer is obliged to produce at a loss or retire 
 from the contest unless the artificial barrier of protection 
 is interposed. A successful resort to this plan by the 
 British early in the present century forced the Americans, 
 who were also inclined by the desire to promote the devel- 
 opment of their own resources to impose high tariffs. The 
 stimulus afforded by a protection which was afterward 
 maintained with more or less effectiveness has called into 
 existence vast manufacturing plants whose productive ca- 
 pacity now exceeds the effective demand. A similar con- 
 dition of affairs exists in Germany and it has been brought 
 about in nearly the same fashion. Both countries are now 
 producing in many lines considerably in excess of their 
 needs and they are imitating the example set by Great 
 Britain when its manufacturers imagined that they could 
 retain the control of the trade of the world. 
 
 Mr. Jeans has described what is being done along these
 
 CONSUMPTION 305 
 
 lines and taunts his countrymen witli their inability to re- 
 sort to the same course. His language has been quoted 
 in another place, but it will bear repetition here, as it empha- 
 sizes the point which protectionists always keep in mind 
 — that the tendency of the world under present conditions 
 is to overproduce, and that the national welfare demands 
 that steps be taken to guard working people against the 
 encroachments of an unfair competition. Mr. Jeans says: 
 "The customs duties levied on the imports into Germany, 
 for example, protect the German manufacturer from compe- 
 tition in his own market, so that he can always depend upon 
 securing within the limits thereby prescribed a satisfactory 
 price from his home customers. * * * fhe home busi- 
 ness, in short, is made so profitable that manufacturers can 
 afford, if necessary, to lose on export orders, which they 
 often do, for the double purpose of building up trade and 
 keeping their manufacturing establishments and their work- 
 men fully employed. * * * Qf course, in so far as 
 Germany, or any other country, sells in neutral markets 
 at less than cost it is not fair competition. It could be 
 effectively met only by the adoption elsewhere of a simi- 
 lar economic system, which, however, cannot be looked 
 for in England, wedded as she is to free trade, whatever 
 consequences that system may involve."* 
 
 Mr. Jeans treats this movement of the manufacturers 
 of Germany and the United States as a novel and unfair 
 mode of competition, but we have seen that as early as 
 1816 Lord Brougham said: "It is well worth while to 
 incur loss upon the first importation in order, by the glut, 
 to stifle in the cradle those rising manufactures in the United 
 States which the war had forced into existence, contrary 
 to the natural course of things. Eighteen millions' worth 
 of goods, I believe, were exported in one year, and for 
 a considerable part of this no returns have been received; 
 
 *Jeans, Supremacy in the Iron Market. Engineering Magazine, 
 December, 1807. 
 20
 
 o 
 
 06 PROTECTION AND PROGRESS 
 
 while still more of it must have been selling at a very 
 scanty profit."* 
 
 There is no essential difference in the plan pursued by 
 the German and American manufacturers of to-day and that 
 adopted by the British manufacturer in the early part of 
 the present century to stifle the growing industries of the 
 United States. When Lord Brougham delivered his speech 
 the factories of Great Britain were turning out more goods 
 than the British people could profitably consume, therefore 
 they resorted to the expedient of unloading their surplus 
 upon foreigners, the object being to keep up prices in the 
 home market and, at the same time, by underselling would- 
 be rivals, make it impossible for them to compete. 
 
 Mr. Jeans characterizes this unloading of surplus stocks 
 as unfair, and so it is ; but it would puzzle him to give many 
 instances of fairness in commercial competition. There is 
 no attempt, so far as we can see, to conduct industrial 
 contests fairly, and it is misleading to discuss the matter 
 as though such a spirit prevailed. When we speak of a 
 fair race between men or horses we have in mind equal 
 conditions. If equality does not exist primarily pains are 
 taken to bring it about. No one would say that a race 
 between two men in which one had several hundred yards 
 the start of the other was a fair one, or that a contest be- 
 between a rider on a bicycle and a man afoot displayed the 
 abilities of the contestants. But there are writers, and Mr. 
 Jeans appears to be one of them, who do not hesitate in 
 treating the subject of industrial competition to assume 
 that laisses faire makes everything even. If there is no 
 government interference, say these economists, then all is 
 fair. If there is free trade that settles the matter. Then, 
 acording to their theory, everyone has a show, and those 
 who lag in the race have only themselves to blame. They 
 disregard the advantages which the possession of capital and 
 
 *Brougham, Speech on the Signing of the Treaty of Peace, 1815.
 
 CONSUMPTION 307 
 
 acquired skill confer and assume that those who have neither 
 the one nor the other deserve to be relegated to the limbo 
 of eternal dependence. Their motto is "To him that hath 
 shall be given," and they resent all attempts on the part 
 of those who seek to emancipate themselves from depend- 
 ence as violations of natural laws, as though the economy 
 of nature contemplated the monopoly by the few of all 
 the good things of the earth. 
 
 Such puerile views could not be acepted by people with 
 a capacity for improvement, and as this capacity exists 
 throughout the whole world, even among the nations in 
 which a temporary arrest of development has ocurred, the 
 narrow and selfish policy of Cobdenism has made no head- 
 way. Instead, it is antagonized by a more enlightened 
 kind of selfishness which teaches that it is the first duty 
 of a people to develop their faculties and resources, and 
 that it is worth while to make great sacrifices to attain a 
 position of commercial and manufacturing independence. 
 Adherence to a policy of this kind has resulted in the de- 
 struction of the Cobdenistic idea that one nation could be 
 the workshop of the world, and is rapidly converting the 
 world into one vast workshop. 
 
 The outcome must prove beneficial to mankind, but it 
 will bring new problems for solution. If one or two na- 
 tions with a practical manufacturing monopoly found them- 
 selves capable of producing in excess of the needs of the 
 world what will happen when many peoples, with infinitely 
 greater resources, attain a high state of industrial efficiency? 
 If Great Britain found it difficult during the period when 
 she controlled the iron markets of the world to secure enough 
 customers to consume her products what will result when 
 Germany, Russia, the United States and other countries 
 whose possibilities have been outlined by Mr. Jeans pro- 
 duce surpluses as great as those of the British and begin 
 seeking customers for them? Some signs of the trouble 
 likely to be experienced are already perceived, and they
 
 3o8 PROTECTION AND PROGRESS 
 
 do not encourage the hope that the consumptive ability 
 of mankind will keep pace with increased powers of pro- 
 duction. On the contrary, there is overwhelming evidence 
 in the shape of falling prices and carry-over stocks that the 
 evil of overproduction will be greatly intensified, and that 
 in the eager struggle more and more people will be drawn 
 into the vortex described by Giffen as the social wreckage 
 of the world. 
 
 We have taken the expansion of the iron and steel indus- 
 try for our text because the progress made in its develop- 
 ment conveys an unexaggerated idea of the possibilities 
 which may follow the general dififusion of mechanical skill. 
 In sketching the advances made in this particular branch 
 of manufacture during the past thirty-six years, and in 
 endeavoring to estimate the consequences of an equal devel- 
 opment (luring the coming thirty-six years, we have by 
 no means emphasized as fully as we might what must hap- 
 pen in the not very remote future if the capacity of man 
 to produce is developed to its fullest extent without finding 
 some better method of adjusting consumption to produc- 
 tion than that which competition is supposed to effect. To 
 bring all the possibilities into plain relief we must call 
 attention to the fact that with the assistance of improved 
 machinery sufficiently large supplies of some articles are 
 now produced in a few days to meet the world's demands 
 for a year or even for a longer period. 
 
 In 1895 a writer discussing the wage question asserted 
 that "Pennsylvania had capacity enough in her glass works 
 to supply the total needs of the United States." The sig- 
 nificance of the statement is heightened when it is added 
 that the glass industry of the United States is by no means 
 confined to Pennsylvania, but that there are other centers 
 of production which, uniting with those of the Keystone 
 State, could probably in three months provide all the glass 
 that could be profitably used in this country in a year. 
 In a description of the growth of the electrical manufac-
 
 CONSUMPTION 309 
 
 turing industry in the United States we find it stated that 
 "within the past fifteen years (1880-1895) some seventy- 
 five factories have been started to supply the annual con- 
 sumption of 200,000,000 carbon points, and that their 
 capacity has already reached three times that figure. There 
 are to-day (1895) twenty factories in the world with a 
 capacity of 350,000,000 per annum."* 
 
 This rapid expansion would undoubtedly have been 
 greatly exceeded were it not for the fact that the patent 
 laws operate as a hindrance. There were about 10,000 
 spindles employed in the cordage industry in the United 
 States in 1895, two-thirds of which were ample to supply 
 the wants of the country. In i860 a machine was invented 
 in the United States for sewing soles on shoes ; with its aid 
 a single operator can sew 500 or 600 soles a day. In 1894 
 there were 4,000 of these machines at work and their prod- 
 uct was 120,000,000 pairs. The machine is patented and its 
 use is comparatively restricted. What will happen when it 
 is freely used? 
 
 The Textile Mercury, the official organ of the English 
 cotton employers, in an article dealing with the wage ques- 
 tion in the cotton industry (November, 1897) called atten- 
 tion to the grave position of the trade and asked the oper- 
 atives to consider facts such as these : "While the cotton 
 industry throughout the world is extending rapidly, the 
 British section of it has commenced to decline, although 
 the population dependent upon it is increasing. The ex- 
 ports of machinery have been steadily increasing for years. 
 This machinery is mainly going to India, China and Japan, 
 where women work for 6d or yd per day and men at 9d 
 to Tod per day. They can also work much longer hours, 
 and in many cases the mills are working night and day 
 with relays. Attention is also drawn to the fact that in 
 addition to the machinery going abroad the most intelli- 
 
 *Martin, Article, Electrical Manufacturing Interest in One Hundred 
 Years of American Commerce.
 
 3IO PROTECTION AND PROGRESS 
 
 gent Lancashire operatives are now going out to Eastern 
 countries, India, China and Japan, to teach the natives 
 the new industry and to manage the mills. The operatives, 
 with these facts before them, are asked 'to look present 
 facts in the face, bravely encounter them, cease to harass 
 the trade by absurd regulations and impositions, accept the 
 reduction of wages which the circumstances demand, and 
 thus retard the inevitable surrender of the industry to for- 
 eign competition sufficiently long to give the capitalist time 
 to work out his investments and develop something new."* 
 From another authority we derive the information that the 
 cotton textile machinery of Great Britain, if worked to its 
 full capacity, would be able to supply the whole world. 
 We know that the production in this country of similar fab- 
 rics is so much in excess of the demand that the mills peri- 
 odically shut down in order to relieve the glutted market, 
 and the case is not much better in Germany or France. 
 
 Wherever we turn we find that overproduction soon fol- 
 lows the development of manufacturing industries. In all 
 the countries where the modern system of manufacturing is 
 established the people have acquired the ability to supply 
 their own needs and are obliged to turn to other lands for 
 an outlet for their surplus products, but the prospects of 
 relief are not bright. A very few years ago, when the 
 Orient was forcibly opened to trade with the Western world, 
 it was imagined that a new and illimitable market had been 
 found, but recent events have greatly modified this opin- 
 ion, and the prospects of any considerable extension of 
 the Oriental consumption of the products of Western fac- 
 tories are not now regarded as very assuring. 
 
 In the face of evidence of this kind the people of pro- 
 tective countries cannot help regarding with suspicion the 
 attempts of economists who seek to convey the idea that 
 production is satisfactorily adjusting itself to the ability 
 
 *Bradstreet's, The English Cotton Trade, November 15, 1897.
 
 CONSUMPTION 311 
 
 to consume. A recent writer tells us that "the recurrent 
 exercise of the choice of the capitahst" is, on the whole, 
 beneficial, and that "changes in the direction of greater or 
 less expenditure, or greater or less (usually greater) ac- 
 cumulations, come slowly and gradually. The motive power 
 which thus drives and controls the apparatus of capitalistic 
 production works in the main so steadily that we forget 
 that it consists of the collected volition of hosts of individ- 
 uals, each and all of whom are free to do as they will 
 with their own."* This reads smoothly, but we know that 
 it is not true. There is no more ground for the assumption 
 that the business of production goes on steadily than there 
 is for the writer's statement "that the machinery of pro- 
 duction at any given time is arranged for the supply of 
 the habitual and anticipated wants of the community," or 
 that "the pig iron maker has a reasonable faith that his 
 iron will be bought by the maker of machinery, and he 
 again that his machinery will be bought by the person who 
 means to use it in making one product or another."t 
 
 These assumptions are not borne out by experience, and 
 there is no profit to be derived from the acceptance of such 
 theories. We know that there are periods of so-called 
 depression in which the producer is harassed with fears 
 of the consequences of excessive production, and that they 
 recur so frequently that attempts are made to formulate 
 theories to explain them. Within the past quarter of a 
 century the years of overproduction have exceeded those in 
 which the effective demand for products even remotely 
 approached the ability to produce. To urge that because 
 at the end of a long period the world's wealth and produc- 
 tive and consumptive capacity are greater than at the be- 
 ginning an economic system has proved satisfactory, even 
 though during the interval many depressions have occurred 
 which have caused great distress and increased the social 
 
 ♦Taussig, Wages and Capital, p. 62. 
 flbid, p. 59.
 
 312 PROTFXTTON AND PROGRESS 
 
 wreckage, is as unreasonable as it would be to say that 
 an engine which operates the pumps used for the purpose 
 of lifting water for the use of a town is working satis- 
 factorily even though it is subject to frequent breakdowns 
 which result in depriving the people of their accustomed 
 supply of water. 
 
 The advocates of protection have discovered the defects 
 in the system of unrestrained competition here referred to 
 and seek to guard against them as much as possible. They 
 freely admit that when the conditions are equal, or nearly 
 so, the stimulus of competition may prove advantageous, 
 but they will not consent to the proposition that it is bene- 
 ficial under all circumstances. They are not disposed to 
 accept the doctrine that the ability to manufacture cheaply 
 indicates the superiority of a people. They recognize that 
 races in many respects more backward than those to which 
 they belong may, by the aid of machinery and the prac- 
 tice of economies to which they are unaccustomed, suc- 
 ceed in reducing the cost of production to an infinitely lower 
 point than Western peoples have dreamed of, and they 
 also realize that, in spite of the contention to the contrary, 
 the effect of competition between nations with established 
 industries tends to increase the "social wreckage" and to 
 make the condition of the worker more and more precarious. 
 
 Montesquieu quotes a Chinese saying that "an Emperor 
 of the Tangs held it as a maxim that if there was a man 
 who did not work, or a woman that was idle, somebody 
 must suffer cold or hunger in the empire." Acting "on this 
 principle, the Emperor ordered a vast number of the mon- 
 asteries of the Bonzes to be destroyed."* Modern civiliza- 
 tion has changed the conditions the observation of whicfi 
 called forth from the Chinese Emperor the philosophic re- 
 flection quoted. We are no longer confronted with the 
 necessity of all mankind constantly toiling to avert the dan- 
 ger of starvation. Improved machinery has effected a 
 
 ♦Montesquieu, Spirit of the Laws, Book VII, Chap. VI,
 
 CONSUMPTION 313 
 
 revolution which has staggered belief in the soundness of a 
 doctrine which has for its basis a mathematical truism. We 
 have come to regard with contempt the effort of Malthus 
 to demonstrate that the population of the world may out- 
 grow its means of subsistence. The astounding results 
 achieved in the field of agriculture have given rise to the 
 contrary opinion that the capability of the earth to produce 
 can never be exceeded by the demands of man. A writer 
 whose teachings have captivated all those who feel that 
 they are the victims of an unjust distribution says: T 
 go to the heart of the matter in saying that there is no war- 
 rant, either in experience or analogy, for the assumption 
 that there is any tendency in population to increase faster 
 than subsistence. The facts cited (by Malthus and his 
 adherents) simply show that where, owing to the sparse- 
 ness of population, as in new countries, or where, owing 
 to the unequal distribution of wealth, as among the poorer 
 classes in the old countries, human life is occupied with 
 the physical necessities of existence, the tendency to over- 
 produce is at a rate which would, were it to go unchecked, 
 some time exceed subsistence. But it is not a legitimate 
 inference from this that the tendency to reproduce would 
 show itself in the same force where population was suffi- 
 ciently dense and wealth distributed with sufficient even- 
 ness to lift a whole community above the necessity of de- 
 voting their energies to a struggle for mere existence."* 
 
 It is not necessary to determine whether Malthus was 
 right or wrong. No practical system of economics needs 
 to take into consideration a contingency which improving 
 methods of production show may be averted for centuries. 
 The application of the remedies proposed by those who have 
 been alarmed by the possibility of the world becoming over- 
 crowded may be safely left to the future. It will be time 
 enough for resorts to repression of population when the 
 
 ♦George, Progress and Poverty, Book 11, Chap. 11.
 
 314 PROTECTION AND PROGRESS 
 
 world gives signs of its inability to provide sustenance for 
 those inhabiting it. If the pessimists of the Malthusian 
 school based their advocacy of repressive systems upon 
 the theory that there is an excess of population which is 
 consuming and wasting the heritage of future generations 
 their recommendations might be entitled to respectful con- 
 sideration. But their fears are not inspired by observa- 
 tions of this character. They are simply the result of a 
 mathematical demonstration that at some future time there 
 will be more people than food to feed them. If the dem- 
 onstration is correct the universe will have to bear its fate, 
 but in the meantime it will be wiser to study the oppor- 
 tunities the world offers to subsist immense populations 
 than to devise plans to avoid drawing upon these resources. 
 It is idle to brood over the danger of insufficiency when 
 the industrial world is complaining that overproduction in 
 every field is constantly bringing depression and disaster. 
 "There is no more common explanation of a general 
 depression of trade," says a recent economic writer, "than 
 that of general overproduction. The fallacy — if it be a 
 fallacy — has been supported by distinguished economists. 
 Dr. Chalmers indicates as a remedy for the supposed evil 
 moral restraint in the pursuit of gain, and Sismondi goes 
 so far as to deprecate the extensive adoption of machinery 
 and inventions."* This is the pass to which we have been 
 brought by unrestrained competition. Instead of recog- 
 nizing the true cause of our troubles we are becoming more 
 and more inclined to the acceptance of the theory that 
 man would be benefited by restricting production. The 
 views advanced by Dr. Chalmers are shared by many who 
 are unable to comprehend that the successful working of 
 competition demands that there should be no restraint placed 
 upon the desire for gain, and that the penalty for impos- 
 ing such restraint would be industrial stagnation. But 
 
 *Nicholson, Principles of Political Economy, Vol. II, p. 83.
 
 CONSUMPTION 315 
 
 the opinion of Sismondi, as we have seen, is given " practi- 
 cal effect by the world's toilers, who, through their trades 
 unions, are doing all in their power to limit the use of auto- 
 matic machinery in order to prevent the displacement of 
 workingmen. 
 
 The men who write books on political economy cannot 
 hope to conceal these facts- by sophistries or elaborate 
 calculations showing that the condition of the workingman 
 is improving-. The latter has constantly before his mind 
 the "social wreckage" which Sir Robert Giffen has pic- 
 tured, and its existence is a constant menace to him. He 
 does not know how soon he may be improved out of his 
 job, and thus forced out of the "new society" by some 
 piece of improved machinery or by the competition of 
 other workingmen who, in their eager struggle for exist- 
 ence, are ready to work for less than rivals. But above 
 all things he dreads the possible consequences of the intro- 
 duction of labor-saving machinery into the swarming coun- 
 tries which are now to some extent dependent upon the 
 Western world for supplies of manufactured articles. 
 
 Experience and observation have taught the workingman 
 that it is a fallacy to assume that Orientals cannot learn 
 to operate machinery. He has seen them, in one American 
 city at least, successfully invade several industries in which 
 machinery is almost wholly employed. He knows that 
 the Chinese manufacturers of shoes and undergarments 
 in San Francisco could easily monopolize the trade in those 
 articles if the barrier of prejudice did not exist, and that 
 in spite of it they successfully compete, adding to their 
 skillfulness day by day. Possessed of this knowledge, it 
 is not remarkable that the workingman should regard with 
 apprehension the growing exports of textile and other ma- 
 chinery to Oriental countries. He understands the full 
 significance of such a movement, and all the talk about 
 race superiority will fail to convince him that Americans 
 and other Westerns can meet this new competition without
 
 3i6 PROTECTION AND PROGRESS 
 
 descending to the social level of the new competitors. The 
 workingman, educated by experience, refuses to be misled 
 into believing that the effect of unrestrained competition 
 is uplifting. He understands that the gains the working- 
 men of certain parts of the Western world have made dur- 
 ing the past fifty years were due to adventitious circum- 
 stances which are rapidly disappearing and will wholly 
 vanish when many peoples now in a state of dependency 
 develop their manufacturing capabilities and enter the com- 
 petitive struggle. 
 
 This knowledge is responsible for the growth of pro- 
 tectionism among workingmen, not only in countries where 
 it has been adopted as a national policy, but in free trade 
 England as well, where it has assumed the extreme form 
 of trades unionism. And the sentiment is growing rapidly 
 among a class the workingmen have hitherto held respon- 
 sible for many of their woes. The middleman, under the 
 stress of excessive competition, has lost his sense of secur- 
 ity. "It is estimated," says a writer in a financial maga- 
 zine, "that in our large cities 97 per cent, of busi- 
 ness men fail." He adds: "The present limited oppor- 
 tunities of men with small capital are in striking contrast 
 with their opportunities thirty or forty years ago. Pow- 
 erful trusts now monopolize some lines of business, great 
 corporations have absorbed others, and large department 
 stores have destroyed great numbers of small mercantile 
 establishments."* There is but a step from the perception 
 of this fact to the recognition of that other important fact 
 which protectionists keep constantly in mind, namely, that 
 the possession of capital by national aggregates operates 
 in precisely the same fashion that it does between the indi- 
 viduals of a nation, and that it would be as hopeless for 
 a country with an inadequate capital to compete on equal 
 
 *Justi, Hard Times and Their Cause, Bankers' Magazine (London), 
 September, 1896.
 
 CONSUMPTION 317 
 
 terms with a people with a plethora as it would for the 
 small trader to compete with the large department stores, 
 or an individual with a small plant to rival a great corpora- 
 tion engaged in the same line of manufacturing as himself. 
 
 In this country we have found that attempts to regu- 
 late trusts are nullified by the general recognition of the 
 fact that it is impossible to draw the line at the place where 
 competition ceases to be beneficial, but no such diffi- 
 culty confronts us in determining the question whether we 
 should or should not invoke the aid of a protective tariff 
 to offset the advantage which large accumulations of capi- 
 tal and the lower compensation of labor give to foreigners. 
 By limiting the area of competition the intensity of the 
 evils sketched in this chapter is lessened and an opportunity 
 is afforded to apply a remedy the application of which would 
 be impossible if the country surrendered itself to the idea 
 that mankind can benefit by relegating the producer to the 
 condition of a toiler hopeless of advancement. This would 
 be his fate if he were doomed to enter a struggle with 
 the whole world, and thus subject himself to the neces- 
 sity of competing with peoples who have through ages of 
 privation learned to accommodate themselves to conditions 
 which would be unendurable to men whose aspirations for 
 something better have been aroused by education and 
 example. 
 
 The Cobdenite responds to these natural objections by 
 asserting that the fierceness of the competition he advocates 
 will create wants which will increase the opportunities of 
 the workingman and better his condition, and to support 
 this contention he presents misleading figures and facts 
 bearing on the commercial development of Great Britain, 
 and by their aid endeavors to convey the impression that 
 an experience almost wholly due to the enjoyment of a 
 practical monopoly can be repeated when the whole world 
 is contending for the opportunity to share in the profits 
 of manufacturing.
 
 3i8 PROTECTION AND PROGRESS 
 
 The phrase "the markets of the world" has taken on a 
 new significance since the days of Cobden. When it was 
 first used by Enghshmen it meant that there were numer- 
 ous peoples who had reached a high state of development 
 in certain directions but who had neglected manufacturing 
 and were ready to become customers of a more enterpris- 
 ing nation. The opportunity to supply these backward 
 peoples was a source of great profit so long as they re- 
 mained in a state of dependence upon Englishmen, but when 
 they formed the determination to create manufacturing in- 
 dustries of their own a radical change was brought about. 
 First it manifested itself in a lessening demand for the 
 manufactured products of Great l^ritain by the particular 
 countries developing the new industries. For a time this 
 decrease of demand in one quarter was offset by the gain 
 of customers in previously unexpected sections of the world, 
 but very soon the countries once dependent upon Great Bri- 
 tain not only ceased to draw their supplies of manufactured 
 articles from her, but actually began to compete in the mar- 
 kets of the world in order to secure an outlet for the sur- 
 plus products of their newly created industries. 
 
 The result has produced a condition which completely 
 negatives the theories of Cobden and is forcing the accep- 
 tance of a more rational system of political economy, one 
 which proceeds on the assumption that it is the part of 
 wisdom for every nation to develop its own resources, and 
 that external trade can only prove beneficial to mankind 
 when it is devoted to the exchange of non-competing articles. 
 The complete refutation of the idea that the markets of the 
 world are illimitable is working m.iracles in the way of con- 
 viction. It is impossible for a foolish theory to survive 
 very long after it is practically disproved. When it is 
 once fully recognized that there are bounds to the ability 
 to dispose of surplus products the argument that the mar- 
 kets of the world are better than the home market will 
 cease to be employed. It will be the aim of the writer
 
 CONSUMPTION 319 
 
 in the next chapter to demonstrate that an expansion of 
 the world's markets during the next half century similar 
 to that witnessed since 1850 cannot be hoped for, and abun- 
 dant evidence will be presented which will prove that the 
 stage has nearly been reached when the successful entrance 
 of a new competitor in these so-called markets of the world 
 will mean the exclusion of those who already occupy the 
 field.
 
 CHAPTER XV. 
 
 EXTERNAL TRADE. 
 
 LIMITED CAPACITY OF THE MARKETS OF NON-MANUFACTUR- 
 ING PEOPLES. 
 
 Expansion of British imports and contraction of her exports— The 
 increased imports largely composed of manufactured articles — 
 The prospects of an intense struggle for existence — Effects of 
 the development of American industry — American experience 
 not likely to prove unique — Rapid expansion of industry in Ger- 
 many — Promise of a speedy growth of manufacturing industry 
 in Russia — The factor of Oriental competition — The industrial 
 feature of the future will be the promotion of domestic pro- 
 ductivity and the relegation of trading to the second place — 
 Trade can only be obtained at the expense of an already estab- 
 lished rival — Obstacles to the extension of British trade offered 
 by trades unionism — Threats of a European coalition to pre- 
 vent disaster to industry from the encroachments of "Monroe- 
 ism" — The assault on the integrity of Oriental nations inspired 
 by the desire to monopolize the markets of Asia — Burden borne 
 by the British taxpayer to acquire and hold African markets — 
 Three-fifths of the British revenue expended for the purpose 
 of maintaining and extending external trade — The true cause 
 of the rise and decline of nations — Probable results of the intro- 
 duction of modern methods to the notice of Orientals. 
 
 Not long since an American writer attempted to show 
 that New York was destined to he the future metropolis of 
 the world. The arguments used hy him in support of his 
 helief resemble those advanced by the Cobdenites in two or 
 three important particulars, and are therefore worth noting. 
 He said : "Two thousand years ago the civilized world was 
 grouped about the Mediterranean. Knowing that, a geog- 
 rapher could have told that about where Rome was, or 
 
 320
 
 External TRADE 321 
 
 opposite her, where Carthage had risen, must be the world's 
 metropohs; that there could be but one, and that the one 
 that had Europe behind it must one day outstrip the other, 
 behind which the Libyan desert stretched. But the world 
 then? Who knew what realms beyond Athos might out- 
 rival those washed by the tideless ocean where Roman and 
 Carthaginian galleys crashed together in fights? To-day 
 there are no new worlds to find. So long as the continents 
 maintain their relative position the North Atlantic ocean 
 must be the center of the world's civilization ; so long as 
 the great rivers that now drain them rise in the same high- 
 lands and reach the ocean through the same valleys as now, 
 there is one spot — the port of New York — about which must 
 grow the world's metropolis. So fast, indeed, do events 
 move that the children of to-day will as surely see New 
 York the world's center as, when most of us were children, 
 London was such. The glory of London is that of conditions 
 which have gone forever ; that of New York the sunrise of 
 an endless day."* 
 
 Only making casual reference to the fact that the center 
 of exchange in the world, as it was known before the dis- 
 covery of America by Columbus, shifted from Rome to Con- 
 stantinople, t and subsequently to the Italian commercial 
 cities,! we proceed to call attention to the singular assump- 
 tion that it is the destiny of New York to become the 
 metropolis of the world, not for a period, but for all time. 
 Such an idea could only have taken form in the brain of a 
 man imbued with the belief that the world's economic meth- 
 ods are unchangeable and that mankind must continue eter- 
 nally in its course of wasteful exchange. No one with the 
 dimmest foreshadowing of the possible changes that may be 
 
 ♦Warner, Matters That Suggest Themselves, "Municipal Affairs," 
 March, 1898. 
 
 •|- Adams, Law of Civilization and Decay, p. 20. 
 J Ibid, p. 97. 
 21
 
 ^±2 PROTECTION AND PROGRESS 
 
 worked by a general diffusion of mechanical skill would 
 have ventured to assume that contiguity to the ocean would 
 insure primacy for a city ; least of all would he have claimed 
 that the city built upon the shores of the Atlantic by reason 
 of its position must always remain the metropolis of the 
 world. 
 
 If any foundation existed for the belief in the illimita- 
 bility of the world's markets the theory that New York is 
 destined to become and remain the world's center might 
 deserve respectful consideration. The idea that the Cobden- 
 ites once entertained, that those parts of the world having 
 no manufacturing industries would always remain in a 
 state of dependence upon nations that had already developed 
 a high degree of industrial ability, made it seem reasonable 
 that the Western world would always retain its commercial 
 supremacy, and that the entrepots of to-day would continue 
 to grow in importance. But recent manifestations in the 
 Orient have ^ensibly modified this optimistic view and raised 
 the question whether the future may not witness an awaken- 
 ing of the slumbering peoples of the East. 
 
 But, apart from this consideration, there are other indi- 
 cations which point conclusively to the inability of peoples 
 destitute of a highly developed civilization to greatly in- 
 crease their consumption of manufactured articles. The 
 relatively slow growth of trade with backward peoples and 
 the phenomenal increase of output in countries with estab- 
 lished manufacturing industries has already created a condi- 
 tion which confutes the predictions of the Cobdenites and 
 makes reference to the profits to be made in expanding 
 foreign markets seem like a mockery. 
 
 Great Britain has long been regarded as the typical 
 commercial state of the world and her career has been cited 
 by economists to illustrate the advantages flowing from dis- 
 regarding a contracted home market in order to secure the 
 profits arising from unrestrained trade with peoples in every 
 part of the globe. In another place it was shown that much
 
 EXTERNAL TRADE 323 
 
 of the prosperity erroneously attributed to the operations 
 of unrestrained commercial intercourse was really due to the 
 fact that Great Britain was in a condition of readiness to 
 take advantage of the enormous changes wrought by the 
 discovery of gold in California and Australia, and that in 
 all probability her expansion would have been as rapid under 
 the system of taxation in vogue before the repeal of the 
 corn laws as under so-called free trade. The people who 
 bought manufactured articles from Great Britain after 1848 
 did not patronize that country because it offered a freer 
 market than formerly for agricultural products; they did 
 so because the injection of a large quantity of the precious 
 metals into the money system of the world acted as a great 
 stimulus to industry and created wants which could only be 
 satisfied by a resort to the stocks of the manufacturers of 
 England. 
 
 As soon as the practical monopoly enjoyed by Great 
 Britain disappeared her commercial attractiveness began to 
 wane. In spite of her enormous purchases from foreigners, 
 which the earnings from capital invested in foreign countries 
 enabled her to increase from year to year, she has not suc- 
 ceeded in effecting a relative expansion of her exports. On 
 the contrary, there is a constantly increasing volume of im- 
 ports and a relative — in some years it has been absolute — 
 decline of exports. 
 
 The features of this decline of the British export trade, 
 dwelt upon in another chapter, if attentively studied will 
 convince any one that the theory advanced by the Cobden- 
 ites that a nation which freely opens its ports places other 
 nations at a disadvantage in trading is unsound. It is pos- 
 sible that circumstances may sometimes render the sacrifice 
 of a minor industry advisable ; it may even be admitted 
 that Great Britain in abandoning her farmers to the mercies 
 of an unrestrained competition acted wisely, but it will 
 hardly be contended that a policy which has resulted in ex- 
 posing to assault the peculiar industries supposed to have
 
 324 PROTECTION AND PROGRESS 
 
 been called into existence and fostered by free trade is a 
 wise one. That the manufacturing industry of Great Britain 
 is now subject to the inroads of foreigners is shown by the 
 constantly increasing volume of imports of articles manufac- 
 tured in foreign countries. The annual excess of imported 
 over exported articles, which reaches over six hundred mil- 
 lion dollars, is chiefly represented by manufactures ready for 
 consumption. In 1895 the value of the imports into Great 
 Britain of manufactured articles in that classification was 
 £75,625,242, and in addition to this amount several millions 
 of partially manufactured goods, such as dye stuffs and 
 metals on which labor had been expended, were also brought 
 into the country. These imports have admittedly displaced 
 British labor and have contributed to the increase of the 
 social wreckage. The record shows that once flourishing 
 British industries have succumbed to unrestrained compe- 
 tition, and it is feared that others will meet the same fate. 
 
 It has hitherto been claimed by the Cobdenites that the 
 losses thus sustained are fully compensated by the extension 
 of British markets in other countries, but there is no foun- 
 dation for this assumption. It is true that the exports of 
 British produce and manufactures show a small absolute 
 increase, but a relative comparison shows that the progress 
 is not commensurate with the growth of population. It has 
 been pointed out that "if the United Kingdom is to main- 
 tain even its present level of prosperity under the present 
 conditions of population and of manufacture, it is abso- 
 lutely necessary that its export trade should increase in value 
 by about £2,600,000 annually."* The writer who makes 
 this observation after a careful survey expresses the opinion 
 that the conditions are such that Great Britain cannot hope 
 to largely extend her export trade without making grave 
 sacrifices. He rejects the theory so persistently adhered 
 
 * Kershaw, The Future of British Trade, Fortnightly, November, 
 1897.
 
 EXTERNAL TRADE ^25 
 
 to by some writers that English workingmen enjoy a natural 
 superiority over foreigners, and expresses the belief that 
 the better conditions of labor hitherto prevailing in England 
 only served to increase the cost of production and to handi- 
 cap the British in competing with the foreign made goods 
 in the home or neutral markets of the world. Most signifi- 
 cant of all, however, is his admission that the British have 
 entered on another path of industrial development, which 
 he says must lead to "an international industrial warfare of 
 the most savage intensity. This warfare," he adds, "if it be 
 permitted to proceed to its logical issue, can have but one 
 result — the reduction of the standard of life and comfort 
 in all countries to the lowest level at which human beings in 
 any part of the world are willing to exist."* 
 
 The consequences of such a warfare may be discussed 
 elsewhere ; here we have merely to deal with the question 
 whether the sacrifice of the home industry can be made good 
 by a resort to other markets. If the international struggle 
 referred to is already on it must be obvious that the markets 
 of the world are now saturated and do not promise to in- 
 crease their receptivity in the near future. In short, an 
 international struggle for trade means that the productive 
 capacity of the manufacturing nations exceeds the con- 
 sumptive ability of the world. This condition will become 
 more intense with every improvement of machinery, and as 
 the determination of backward peoples to shake oflF the yoke 
 of dependence finds expression in action. Its special distin- 
 guishing mark will be the tendency of nations to cease im- 
 porting those things which they may easily produce for 
 themselves, and substitute for the wholly wasteful and irra- 
 tional system of external trade now in vogue a sensible 
 exchange of non-competing products. 
 
 Necessarily such a change must bring about a relative 
 contraction of foreign trade. If there is any foundation 
 
 *Kershaw, The Future of British Trade. Fortnightly, November, 
 1897.
 
 326 PROTECTION AND PROGRESS 
 
 for the belief that all civilized peoples can acquire manu- 
 facturing skill, and if there is truth in the statement that 
 such raw materials as iron and coal are to be found in 
 abundance throughout the world, we may look forward to a 
 steady promotion of domestic production and a correspond- 
 ing shrinkage of external trade. 
 
 We have seen that the development of the iron industry 
 in the United States has rendered this country independent 
 of foreign sources of supply, and while we may not assume 
 that our annual production of i2,ooo,ocfO tons — the output 
 for the year 1898 — represents a diminution of the world's 
 markets as great as these figures indicate, it is at least 
 permissible to look upon it as an enormous curtailment of 
 an export trade which Great Britain might have enjoyed had 
 we refrained from attempting to supply our own wants. 
 It is inconceivable, of course, that we should have been 
 able to consume any such quantity of pig iron as an annual 
 production of twelve millions implies, if we had been com- 
 pelled to buy from foreigners, but even as a purely agri- 
 cultural country — the destiny marked out for the United 
 States by the Cobdenitcs — we should have required two or 
 three million tons annually if we had maintained the rate of 
 consumption which obtains in countries emancipated from 
 the wooden plow and similar badges of backwardness. 
 
 Instead, however, of drawing upon the foreigner for 
 supplies of iron and steel we are now exporting from our 
 surplus of those products. Imports of those articles still 
 figure in the custom house returns, but they are balanced 
 by exports. In 1896 the value of all forms of iron and steel 
 and manufactures therefrom imported into the United States 
 was $25,338,103, and in the same year our exports of the 
 same footed up $41,160,877.* It is impossible to study the 
 relation of these statistics to those of Great Britain and 
 escape the conviction that the advance of this country was 
 
 *Statistical Abstract of the United States, 1896.
 
 EXTERNAL TRADE 327 
 
 at the expense of the British manufacturer, for while the 
 progress made in the United States in this particular in- 
 dustry during recent years has been phenomenal, production 
 in the land which once was supreme in the iron market of the 
 world has practically remained at a standstill. 
 
 Germany has had an experience somewhat similar to 
 that of the United States and has materially interfered with 
 the extension of British trade. For a long period the Ger- 
 mans remained in a partial state of dependence upon the 
 English for their supplies of manufactured articles of iron 
 and steel, but during the regime of Bismarck the commercial 
 policy of the country was changed and every effort was made 
 to develop the manufacturing abilities of the German people. 
 In another place the fact has been cited that Herbert Spencer 
 and other adherents of the laissez faire policy had so de- 
 ceived themselves regarding the capacity of the Germans 
 that during the '50s they were accustomed to speak with 
 contempt of the backwardness of the nation, attributing it 
 to the operations of bureaucracy, which, they asserted, had 
 stunted the intellect and cramped the energies of the people. 
 In a few years after the inauguration of a protective system, 
 which has been maintained side by side with a constantly 
 increasing degree of state supervision, external and internal, 
 the Germans have built up a tremendous manufacturing 
 industry, which, like that created by the Americans with the 
 aid of the same machinery, is producing a constantly growing 
 surplus that seeks the same markets hitherto held by Great 
 Britain, and is in many cases successfully ousting British 
 products from them. The signs are multiplying that the 
 Russians— an undreamed of industrial factor a quarter of a 
 century ago — are traveling along the same road as Germany 
 and the United States, and the prospects are that, long before 
 the first quarter of the new century has been completed, that 
 hitherto backward nation will have taken first rank among 
 the industrial nations of the world, and instead of being a 
 consumer of the rnanufactured products of the countries
 
 328 PROTECTION AND PROGRESS 
 
 with established industries, hke them she will be seeking 
 an outlet for surplus production. 
 
 If we extend our point of view and make it embrace 
 India, China and Japan, and include in it Mexico, which has 
 of late exhibited a remarkable manufacturing progress, and 
 Canada, whose efforts to achieve industrial independence 
 are rewarded with a fair degree of success, and other British 
 colonies where the manufacturing instinct is temporarily 
 suppressed, we see rising before us possibilities which ut- 
 terly negative the free trade assumption that the chief indus- 
 trial feature of the future will be the extension of external 
 trading, and that the world will continue as heretofore to 
 waste a large proportion of energy and of fuel, its most 
 valuable auxiliary in the creation of energy, in the wasteful 
 work of transporting products to and fro. 
 
 With the disappearance of this belief will vanish the 
 overconfident assumption quoted in the beginning of this 
 chapter, that New York is destined to be the permanent 
 metropolis of the world. That destiny may yet fall to some 
 inland city, and the future may witness a repetition of 
 the polity of the Oriental empires of antiquity which set no 
 particular value on the coast line of their vast territories.* 
 It may not be as visionary as some seem to imagine for the 
 people of Chicago to look forward to a day when their city 
 shall exceed in populousness, wealth and importance any 
 city on the American seaboard, and it is not entirely out of 
 the question that in the rearrangement which must follow 
 that awakening of the Orient, so confidently predicted by 
 many keen observers, a metropolis may arise on the Pacific 
 whose position with reference to Asia may make it take 
 precedence of New York and London. That is the future 
 which James Anthony Froude predicted for San Francisco, 
 his prophecy being impelled by the conviction that the enor- 
 mous natural resources of California and the other States of 
 
 *Holm, History of Greece, Vol. I, Chap. XXIII, p. 319.
 
 EXTERNAL TRADE 329 
 
 the Pacific coast and the needs of the Orientals and of the 
 inhabitants of antipodean regions would promote a trade of 
 undreamed of proportions. 
 
 But whatever changes the future may bring, the evidence 
 is overwhelming that they will be effected by a more rational 
 system of trading than that now pursued. It is impossible to 
 believe that the lack of economy now so manifest will endure 
 for any great length of time. As the years roll on the diffi- 
 culties now complained of by manufacturers in the countries 
 of estabhshed industries will become more acute. The 
 trouble they are now experiencing in finding an outlet for 
 their surplus production will become more and more aggra- 
 vated as manufacturing skill spreads throughout the world. 
 Unless the peoples who are now in a state of dependence 
 can be taught to greatly increase their productivity their 
 consumptive ability will not keep pace with the manufactur- 
 ing facilities of the present ; their present condition cer- 
 tainly does not hold out the hope that consumption can, un- 
 der any circumstances, be developed to such an extent as 
 to profitably absorb the surpluses of all the nations eagerly 
 seeking customers in the markets of the world. 
 
 The property of expansion so freely attributed to these 
 markets of the world by Cobdenites is entirely mythical. 
 If there was any ground for the assumption that there is 
 room to spare in them we would not be constantly witnessing 
 alarms bordering on panics in the countries with established 
 industries whenever fresh competitors make their appear- 
 ance. If the markets of the world were illimitable such ex- 
 pressions as those made by the president of the British Board 
 of Trade would not be heard. That official, in an address 
 to the Chamber of Commerce of Croydon, England, re- 
 marked : "We all know an American firm obtained the con- 
 tract for the Central Underground Railway of London, as 
 its bid was lower than those of the English concerns and it 
 could deliver the supplies three months ahead of the British 
 tenders. Many important continental orders have also gone
 
 330 PROTECTION AND PROGRESS 
 
 to America, and the same is to be said of Egypt and Japan, 
 where the Americans are doing work that EngHshmen should 
 have done." From this concluding sentence we must not 
 infer that the speaker was advancing the idea that steps 
 should be taken to hold the trade for Englishmen by a resort 
 to anything in the nature of protection. Nothing was further 
 from his mind, as will be seen from his explanation : "Amer- 
 ica's successful competition," he said, "is due to her enter- 
 prise in embarking capital, but it is yet more due to the 
 freedom her manufacturers enjoy of employing the best 
 machinery and working it in the most economical manner, 
 untrammeled by the restrictions which have hampered man- 
 ufacturers here (in Great Britain)."* 
 
 There is no hint here of obtaining relief from the evils 
 of which this Briton complained by resorting to unexploited 
 markets. On the contrary, he presents the issue clearly and 
 truthfully and leaves no doubt in the mind of his hearer that 
 there is a struggle for customers and that the success of one 
 competitor means the failure of another. He does not, like 
 the American Cobdenite, Mills of Texas, assure his hearers 
 that the loss of the home customer makes no difference be- 
 cause the markets of the world are illimitable, but he plainly 
 says that the English workingmen are committing a fatal 
 error in not permitting labor-saving machinery to be used to 
 its fullest extent and in otherwise refusing to accede to the 
 demands of employers. In short, his contention is that there 
 is a certain demand to supply and that the privilege of sup- 
 plying it must fall to the people able to do so most cheaply ; 
 therefore the alternative presented to the British working- 
 man is not the quest of other markets, for they do not exist, 
 but whether they will consent to work for less wages or 
 starve. As it is often rudely put, it is "a case of half a loaf 
 or none." 
 
 If the trouble confronting the people of Great Britain 
 
 ♦Richie, president of London Board of Trade, speech before Cham- 
 ber of Commerce of Croydon, Nov. 23, 1897.
 
 EXTERNAL TRADE. 331 
 
 were confined to that country it might be assumed that there 
 are conditions existing there which make it impossible for 
 the British to compete on favorable terms with the manu- 
 facturers of other nations. Indeed, the official just quoted 
 expressly charges that recent British commercial backsets 
 are due to the propensity of workingmen to demand more 
 than the employer can afford to pay and retain his trade. 
 The employers' argument is that the workingmen of Great 
 Britain must accommodate themselves to the conditions 
 of labor which obtain in other countries, cease contending 
 against the reduction of wages and abate their demands for 
 shorter hours of work. They must, in brief, do what the 
 Germans do — work long hours and accept lower compensa- 
 tion — if British manufacturers are to hold their own. If 
 the latter cannot do so, then the workingman must become 
 part of the social wreckage, for employers will not consent 
 to manufacture at a loss. 
 
 But when we turn our attention to Germany, where 
 the conditions which Englishmen refer to as inferior exist, 
 we find that the same fierce struggle is in progress, and 
 that, if anything, the apprehension concerning the future 
 is more pronounced than in Great Britain. Take this 
 expression of opinion of one of the political leaders of 
 Germany in a debate in the Reichstag over the Government's 
 naval bill. The speaker, Herr Hammacher, said: "Pan- 
 Americanism is for Germany more momentous than Mon- 
 roeism. The United States are not to be considered on the 
 same footing as a single European state, but rather entirely 
 as a new continent with regard to producing, and my 
 opinion, which is shared by eminent statesmen and has 
 also been expressed recently by Count Goluchowski, is that 
 European states will in the coming century be obliged to 
 co-operate in order to support each other in this struggle 
 for existence with America."* 
 
 ♦Hammacher, speech in German Reichstag, Dec. 9, 1897.
 
 332 PROTECTION AND PROGRESS 
 
 Interpreted into plain English, this means that in the 
 speaker's judgment it may become necessary during the 
 coming century for the nations of Continental Europe to 
 combine in order to save themselves from the consequences 
 of their overproduction. In other words, he thinks it will 
 be necessary for Europe to unite to prevent America's 
 shaking ofif the yoke of foreign dependence ; or, if a more 
 contracted view of his meaning is taken, self-preservation 
 will require Europeans to band together to prevent the 
 United States from absorbing the trade of this continent, 
 as it is feared she will when her resources are fully developed 
 and her facilities for internal distribution are commensurate 
 with her productivity. 
 
 Such an alliance, could it be effected, would present 
 some features of resemblance to that of the French and 
 English which had for its object the opening of Oriental 
 countries to Western trade. The mainspring in each in- 
 stance is precisely the same — the necessity of securing an 
 outlet for surplus products — and the methods of bringing 
 about the result would differ in no essential particular. The 
 trade doors of China and Japan were opened by force, and 
 the Americans, according to the idea outlined by Herr Ham- 
 macher and Count Goluchowski, are to be prevented by force 
 from attaining their fullest development lest it interfere with 
 the extension or preservation of European trade. 
 
 That an understanding of the kind suggested by Count 
 Goluchowski will ever be reached is improbable. No doubt 
 the dread of American competition may inspire such a 
 desire, but European rivalry would prevent Its gratification. 
 Recent disputes over the division of trade and territory in 
 China indicate the impossibility of agreement. In the 
 English House of Commons in the early part of 1898 Mr. 
 Curzon, Parliamentary Secretary of the Foreign Oflfice, 
 replying to a question put by Sir Ellis Ashmead-Bartlett, 
 said that "British interests in China were paramount, but 
 not exclusive. The British nation," he contended, "would
 
 EXTERNAL TRADE 333 
 
 not be justified in regarding legitimate competition with 
 " jealousy, but ought rather to use all efforts to keep in an 
 age of competition what was won in an age of monopoly," 
 He added it was "Great Britain's policy to prevent disrup- 
 tion and oppose the alienation of Chinese territory," and 
 it was therefore unlikely that she would regard with satis- 
 faction the attempts of others in the direction of such 
 disruption.* 
 
 Despite this official threat, Russia and Germany per- 
 severed in their plans, the former seizing and holding 
 Port Arthur and the Germans Kiaochau, and in the fullness 
 of time their possessions will be extended. What may 
 result in future from this movement it would be impossible 
 to tell. The British assumption is that whenever their 
 rivals establish themselves their first step will be to raise 
 trade barriers. That this is likely no one will question, but 
 it is noteworthy that no English writer ventures to assert 
 that the occupied countries will suffer because of such 
 interposition. In a feeble way it is intimated that general 
 competition would be more beneficial to the Orientals, but 
 most of the discussions leave the latter out of consideration. 
 The question is merely : Who shall enjoy the trade which 
 may be created by opening up the parts of China hitherto 
 rigorously closed to the Western world? 
 
 When the matter is stated in this fashion it is at once 
 seen that the squabble is one over markets, and that there 
 is no thought of bearing "the torch of civilization" to a 
 people now in commercial darkness. But while nothing 
 of the kind is contemplated, we may be sure that the torch 
 will illumine the darkness and perhaps kindle such a 
 conflagration of rivalry that the Western world may regret 
 having introduced it. The significant allusion of Mr. Curzon 
 above quoted to the gains made by the English in an age of 
 monopoly will suggest that the progress of China under the 
 
 ♦March i, 1898.
 
 334 PROTECTION AND PROGRESS 
 
 new conditions may be more rapid than during the period 
 when the British sought to keep the Chinese in a state of 
 dependency on the manufacturers in England. The pohcy 
 of the Continental powers may be shaped to the same end, 
 but there are circumstances which may effect a substantial 
 change in the development of the until recently moribund 
 empire. There are signs' that in their eagerness to avail 
 themselves of the varied resources of China Russia and 
 Germany may take steps to promote their development, and 
 by so doing create a home industry which in the very act of 
 creation will cultivate the mechanical faculty to such an 
 extent that the teeming millions will be converted into 
 rivals, who, instead of being exploited for the benefit of 
 Westerns, will, in turn, endeavor to compete with those 
 upon whom they were formerly dependent. The possibili- 
 ties of such competition will be referred to at greater length 
 hereafter ; here they are only suggested to emphasize the 
 assertion that the Cobdenistic idea that the markets of the 
 world are illimitable is an absurd fallacy, and that those 
 who count upon Asia as a future absorbent of the surplus 
 manufactured products of the West are more likely to see 
 the Orientals develop into manufacturing competitors than 
 to remain dependent upon the countries with established 
 industries. 
 
 In Africa the outlook is not more encouraging. Although 
 a disposition has been manifested by Western nations to 
 shed blood and waste treasure in order to extend mar- 
 kets on that continent, the result thus far has not been prom- 
 ising. A writer who has devoted much attention to the 
 matter tells us that the British in the West African country 
 are pursuing a course something like that which marks the 
 dealing of unscrupulous whites with Indians on our own 
 frontiers. Describing the valuable resources of the country, 
 he says : "Hitherto, with the notable exception of the Ni- 
 ger Company, our mode of developing this most valuable 
 trade has been by importing millions of gallons of noxious
 
 EXTERNAL TRADE 335 
 
 spirits, to the demoralization of the native races under our 
 protection/' and he adds : "Apart from the moral turpi- 
 tude attached to such a system of trade, apart from the fact 
 that some of the races thus demoralized are exceptionally 
 fine and are capable of reaching a much higher plane of 
 civilization, instead of being debased to a lower one — apart, 
 in brief, from the moral or philanthropic aspect of the ques- 
 tion, it is obvious that this system of trade is short sighted 
 and rotten. Industry, which it should be our object to stim- 
 ulate, is limited to the production of just so much produce 
 as will purchase the requisite amount of spirit, and is fur- 
 ther enfeebled by the very object of purchase. The require- 
 ments of the natives, instead of increasing with their 
 progress in civilization and comfort, remain stationary. 
 Legitimate trade is strangled and progress is arrested. More- 
 over, instead of exporting to these great markets the prod- 
 uce of Manchester and Sheffield and Birmingham, and stim- 
 ulating thereby our home industries, we are content to ship 
 the spirits made in Hamburg, while crying out that trade 
 is depressed at home. Nor is the native even given a choice, 
 as it would seem in some cases, for an African Bishop re- 
 ports at Ilaro that 'there was nothing else in the factories 
 to exchange for all the produce but rum and gin.' These 
 markets are old — old as the days when the export consisted 
 of slaves shipped by Liverpool traders to America, but if 
 once this suicidal import of cheap continental gin is abol- 
 ished and these countries are thrown open to the produce 
 of our manufacturing towns they will be new markets to 
 Great Britain."* 
 
 It would seem that so keen an observer as the writer 
 should have been able to perceive that there is somthing 
 incongruous in his suggestion that it should be the object 
 of the British to stimulate industry among the African 
 races in order to place them on a higher plane of civiliza- 
 
 *Lugard, New British Markets, Nineteenth Centurv, September, 
 1895.
 
 336 PROTECTION AND PROGRESS 
 
 tion and his assumption that when quahties of this kind 
 are once taken on by a people they will consent to remain 
 in a state of dependence. If, as Captain Lugard seems to 
 think, industrial education could be confined to a narrow 
 groove and the natives would meekly accept the doctrine that 
 their destiny is to laboriously produce the oil of the Guinea 
 palm and of the vegetable products for which the region is 
 celebrated, to exchange for the products of Birmingham, 
 Manchester and other cities of England engaged in manu- 
 facturing, his views might receive the substantial support 
 of the British trading classes. But the latter have been 
 taught by experience that the acquisition of industrial habits 
 by the people of a new country is perilous to the export 
 trade by which they profit. They have seen men of their 
 own race in the United States, to whom industry had come 
 with the mother's milk, refuse to believe that it is wise to 
 confine their operations to the production of raw materials, 
 although the teachers used the sugar coated pill of cheapness 
 to make the dose palatable, and they have noted that the 
 despised Orientals, the East Indians for instance, when the 
 industrial habit is introduced soon develop a tendency to 
 apply it to the production of things which, according to the 
 Cobden theory, ought to be made in the world's workshop, 
 England. Seeing these things and appreciating their bear- 
 ing, the British trading classes in their dealings with Afri- 
 cans deliberately adopt the policy which the writer says is 
 "shortsighted and rotten." It may be all that, but the keen 
 trader is willing to take the present benefits rather than 
 trust to the prospective gains which might result from a 
 policy of systematically encouraging industry among races 
 which critics pronounce "exceptionally fine" and "capable 
 of reaching a much higher plane of civilization." 
 
 The existence of this feeling of caution is no doubt 
 responsible for the fact that although the West African 
 trade dates back "to the days when the exports from that 
 country consisted of slaves shipped by Liverpool traders to
 
 EXTERNAL TRADE 337 
 
 America," the British produce exported to Africa in 1896 
 amounted in vakie to only £819,355, while in the same year 
 the English received thence products to the amount of 
 £1,558,804.* It is conceivable that a policy having for 
 its object the promotion of A.frican industry might have 
 produced results which would have made a more imposing 
 showing in the tables of statistics, but it must be admitted 
 that, viewed strictly from the standpoint of the man who 
 makes profit by exporting Hamburg gin to West Africa 
 in British bottoms, it presents less alluring features than his 
 own, which aims at the retention of such trade as has 
 already been secured, and is decidedly adverse to any 
 plan which even remotely encourages competition. Captain 
 Lugard in his zeal has overlooked the fact that the promo- 
 tion of the industrial habit and the development of the germ 
 of intelligence is fatal to monopoly, but the British trader 
 would never lose sight of the possibility of an industrious 
 people making their own gin, and that the conversion of 
 savages into civilized workers might lessen the taste for 
 the senseless gimcracks and tawdry "Brummagen" ware 
 which constitutes the chief part of the remainder of the 
 shipments from British ports to Africa. 
 
 The writer quoted thinks that it is well worth the while 
 of the British to resort to artificial methods for the exten- 
 sion of African trade and quotes approvingly from a speech 
 by the Rt. Hon. Joseph Chamberlain in which he said : "I 
 regard many of our colonies as being in the condition of 
 undeveloped estates which can never be developed without 
 imperial assistance. * * * j shall be prepared to con- 
 sider very carefully myself, and then if I am satisfied, to 
 confidently submit to the House, any case which may occur 
 in which by the judicious investment of British money those 
 estates which belong to the British crown may be developed 
 for the benefit of their population and for the benefit of 
 
 ♦Statesman's Year Book, 1897.
 
 338 I'ROTECTION AND PROGRESS 
 
 the greater population which is outside."* It is not neces- 
 sary here to point out that the pohcy outhned by Cham- 
 berlain and applauded by Captain Lugard is a wide departure 
 from the principles advocated by Cobden. It may be true, 
 as the Captain remarks, that "he who acquires an estate 
 does not suppose that his cattle, his grain, his timber or 
 his garden produce will come to market without capital 
 outlay in stock, in buildings, in roads and in supervizing 
 establishments," but Mr. Cobden, and a long line of free 
 traders following him, have denounced as false economy 
 the extension of artificial aid to trade, which, they assert, 
 should develop itself simply and naturally, because other- 
 wise it cannot prove profitable. Captain Lugard says that 
 "the acquisition of new markets in Africa means * * * 
 an initial outlay, an initial burden (so small, however, as 
 to be almost inappreciable) on the British taxpayer," but 
 no matter how small the burden may be its imposition is as 
 wide a deviation from the teachings of Cobden as the laying 
 of a protective tariff, which, it is urged, promotes the injus- 
 tice of imposing a tax on one portion of the community to ad- 
 vance the interests of the other. The farmer, say the free 
 traders, is called upon to pay a tax to help the manufacturer 
 in protectionist countries, but Captain Lugard and Mr. Cham- 
 berlain do not hesitate to admit that the British markets in 
 Africa can only be extended by compelling the British 
 employer, whether a farmer, a shopkeeper or a man living 
 on his income, to contribute to the bringing about of a 
 result in which he has no direct interest. 
 
 It is doubtful, however, whether the burden imposed 
 on the taxpayers of England for this purpose is as light a 
 one as Captain Lugard and other students of the problem of 
 the extension of British trade assume. Mallock has a 
 clearer apprehension of the matter, for he tells us that 
 "the processes of production and commerce are the central 
 processes of every nation's life," and that "government 
 
 ♦Debate on Colonial Office, Aug. 22, 1895.
 
 EXTERNAL TRADE 339 
 
 exists to foster them, and changes its form as these processes 
 develop, while fleets and armies exist mainly for their pro- 
 tection, and more and more depend on the progress that 
 takes place in them."* There can be no doubt about the 
 correctness of this observation. In loose conversation, or 
 military treatises, or even in addressing constituencies, it 
 may be permissible to speak of maintaining armies and navies 
 for defense, but the rational economist, who recognizes the 
 aggressive character of commercial peoples, knows that they 
 are cheerfully supported because they are believed to be 
 essential to the continuance of that progress which must be 
 kept up if national decay is to be averted. 
 
 Mill pointed out nearly fifty years ago that the profits 
 of capital in E«igland were tending to a minimum and 
 that "all the savings which take place (beyond what im- 
 provements tending lo the cheapening of necessaries make 
 room for) are either sent abroad for investment or period- 
 ically swept away."t He also directed attention to the 
 condition of Holland, where the earnings of capita' had 
 fallen so low that those who owned it had the greater part 
 of their fortunes invested in loans and joint stock specula- 
 tions of other countries, and explained that they were 
 compelled to this course by the heavy taxation in Holland, 
 "which had been in some measure forced on her by the 
 circumstances of her position and history." t 
 
 There is no doubt that the British people perceive the 
 truth of these teachings and recognize the oppositeness of 
 the illustration furnished by Mill. Therefore they cheer- 
 fully bear an economic burden which increases vear by year. 
 During the twelve months ending March 31, 1896, the cost 
 of the British army was £18460,000 and that of the navy 
 £19,724,000. The budget for the ensuing fiscal year in- 
 creased the latter appropriation to £21,823,000. In addition 
 
 ♦Mallock, Aristocracy and Evolution, p. 156. 
 
 fMill, Principles of Political Economy, Book V, Chap. IV. 
 
 J Ibid, Book V, Chap. VII.
 
 340 PROTECTION AND PROGRESS 
 
 to this enormous expenditure there is the charge for the 
 national debt, mainly created for the purpose of protecting 
 and extending trade which amounts to £25,000,000. This 
 makes a total of nearly £65,000,000 expended for the pro- 
 tection and promotion of what Mallock terms the "central 
 processes of a nation's life," that is, the processes of pro- 
 duction and commerce.* 
 
 Captain Lugard speaks of this investment, or rather 
 burden, of the British taxpayer as a slight one, but as it 
 represents an expenditure of over three-fifths of the national 
 revenue derived from taxation it may be fairly urged that 
 he misstates the case. But while it may be interesting to 
 expose his error in order to exhibit the inconsistency of 
 those who claim that British "free trade" requires no 
 artificial stimulus, we are mainly concerned here to inquire 
 whether this enormous expenditure made for the purpose of 
 extending British markets and preserving British trade 
 after it has been secured will prove profitable in the long 
 run. An inquiry of this kind cannot be limited to the 
 operations of a few years or a century, or of two or three 
 centuries. If the study of political economy is to prove of 
 any use to mankind it must not be fettered, or its teachings 
 rendered valueless by the introduction of illustrations which 
 are incomplete and therefore misleading. The student must 
 not deceive himself by regarding the phenomenon of the 
 wonderful acquisition of wealth by the inhabitants of a 
 couple of islands of contracted area and assume that it 
 represents the operations of the principle of laissez faire. 
 The accumulations of Great Britain are the direct outcome 
 of a protective system which while in operation called into 
 existence an enormous manufacturing industry and created 
 a capital of such magnitude that for a time rival nations were 
 placed at a disadvantage by its employment. This was 
 especially the case while the expansion due to the gold 
 
 *Statesman's Year Book, 1897.
 
 EXTERNAL TRADE 341 
 
 discoveries made about the middle of the century was in 
 progress. What was then gained is now being preserved 
 with difficulty by an expenditure of three-fifths of the 
 annual revenue of the state. 
 
 The question to consider, then, is whether a continuance 
 of these expenditures will serve to maintain British com- 
 mercial supremacy or whether its final result will not be 
 to place Great Britain in the position of Holland. Mill 
 distinctly tells us that heavy taxation forced on that country 
 by the circumstances of her position and history has driven 
 the owners of Dutch capital to make investments in foreign 
 bonds rather than their own. It is not improbable that 
 the unnatural effort of the British to open new markets 
 and retain them will ultimately bring about a similar con- 
 dition of afifairs in Great Britain to that which prevails in 
 Holland. At present the people of the United Kingdom 
 bear the burden of taxation with apparent ease, but who can 
 tell what would follow should another great war be waged 
 for the purpose of extending or preserving trade? The 
 signs of such a conflict are multiplying. Quite recently 
 assertions were officially made that Great Britain would 
 not tolerate the partition of China and a warning was given 
 that the occupation of Port Arthur by the Russians would 
 not be permitted. It is true that the failure of Russia to 
 heed the warning did not provoke action, but it would be 
 unwise to assume on that account that Great Britain will 
 always shrink from making good her threats. At any day 
 the pressure of her commercial classes and the necessity 
 of redeeming herself from the charge of pusillanimity so 
 freely brought by her own writers, may force her to throw 
 down the gage of battle, or she may be obliged to accept 
 it from the nations which, like her, are eagerly struggling 
 for the markets of the world. 
 
 The outcome of such a conflict would certainly prove 
 disastrous to Great Britain. It is inconceivable that she 
 could engage in a struggle with the continental powers
 
 34^ PROTECTION AND PROGRESS 
 
 with the hope of such a termination as that which signalized 
 the war between Germany and France. Great Britain might 
 be able to hold her own in such a war, and with the assistance 
 of a powerful ally or allies might win an effective victory, 
 but she could not secure indemnity for her expenditures 
 and the loss of her commerce. Under the most favorable 
 circumstances she might escape the loss of territory, but 
 that is doubtful. The net result of such a collision might 
 easily be an addition to the national debt which would 
 double the annual interest charge, and, unless the very 
 unlikely contingency of a general disarmament occurred, 
 the years following the conclusion of peace might demand 
 much larger expenditures for military and naval purposes 
 than were required during the period preceding war. 
 
 While some people entertain the foolish idea that a national 
 debt is a national blessing, and short-sighted men professing 
 a knowledge of statesmanship have held that so long as 
 a debt is owned by the people of the nation contracting it 
 no economic loss results, there are others who plainly per- 
 ceive that the effect of piling up indebtedness is to make 
 it more and more difficult for an industrial nation to com- 
 pete with rivals more favorably situated so far as accessi- 
 bility to raw materials and exemption from heavy taxation 
 are concerned. Especially must this be true of a country 
 situated as Great Britain is. The limited area of the 
 islands and the comparative meagerness of resources makes 
 her case present a close analogy to that of Holland. Already 
 we have significant signs in Great Britain of the tendency 
 commented upon by Mill as being manifested by the Dutch. 
 Vast quantities of the capital of the British have been 
 invested in foreign lands, and the obvious reason why its 
 owners resort to strange fields to place their accumulations 
 is that they cannot secure satisfactory profits at home. 
 
 At one time the outside investments of the British may 
 have represented a desire for a greater degree of profit than 
 could be obtained at home, but this is no longer the case.
 
 EXTERNAL TRADE 343 
 
 It is now clearly apparent that much British capital seeks 
 investment abroad because it cannot find domestic employ- 
 ment. This is not owing to the too rapid expansion of cap- 
 ital, but is directly traceable to the failure of British industry 
 to develop as steadily as it must in order to preserve the 
 commercial standing of the nation. Or, ro put it in the 
 more significant fashion of an English review writer, it 
 is ceasing to be profitable to employ capital in what were 
 once the leading British industries because a combination 
 of circumstances makes it possible for rivals to manufatcure 
 more cheaply, or, at least, enables them to hold their own 
 territory against the entrance of the manufactures of Great 
 Britain. As an instance in point he cited that the population 
 of Lancashire was increasing at the rate of 2| per cent, per 
 annum, and that the operatives employed in the cotton 
 mills of the district during a period of twelve years ending 
 in 1895 had only increased 44 per cent. "Therefore," he 
 added, "the population of Lancashire has been increased 
 five times as rapidly as the chance of employment in the 
 main industry of the country," and, with equal force, he 
 might have added that the opportunities for investment of 
 British capital in the great cotton textile industry have 
 been abridged in a ratio corresponding to its almost stagnant 
 condition in the greatest British cotton spinning and weaving 
 center.* 
 
 That this evil will become more intense as the years move 
 on and other peoples now but indififerently endowed with 
 mechanical ability develop their faculties no sensible person 
 will venture to deny. The experience of the past, although 
 its lessons have been somewhat obscured by extraneous 
 circumstances, permits no other conclusion. It is not neces- 
 sary in assenting to this view to concede the correctness 
 of the elaborated theory that luxury and corruption tend 
 to enervation and make peoples who have accumulated great 
 
 ♦Hallett, New British Markets. Nineteenth Century, August, 1895.
 
 344 PROTECTION AND PROGRESS 
 
 wealth incapable of competing with newer and more hardy 
 nations. It would not be difficult to institute comparisons 
 which would convey the impression that the condition of 
 modern England presents a surprising resemblance to that 
 of ancient Carthage and Rome in their periods of decadence. 
 All the symptoms which learned writers say indicated the 
 mortal disease of those ancient bodies politic may be dis- 
 cerned in Great Britain to-day ; yet a careful writer would 
 hesitate to admit, even though he felt assured that the 
 British will share the fate of other empires that have 
 preceded it, that the cause of its undoing will be due to its 
 departure from the paths of virtue, using the word in its 
 broader Aristotilean as well as in its more contracted ethical 
 sense. Confronted by the possibility of a people hitherto 
 regarded as barbarians creating an industrial empire which 
 may by the mere force of competition and superior resources 
 overwhelm the hitherto prosperous British with disaster, 
 it would be little less than absurd to attribute the result 
 to the moral decay of Englishmen or the superior virtue of 
 their Russian rivals. 
 
 All the evidence we have shows that the people of Russia 
 are marching steadily toward the goal of industrial per- 
 fection. It is not necessary in this place to mass the testi- 
 mony foreshadowing such a result. Much has been saicl 
 elsewhere in these pages which will convince the most 
 incredulous that the Russian empire is making enormous 
 strides, and that its present polity, although the mailed hand 
 is used in carrying it out, is to advance the material inter- 
 ests of the people by extending their operations in the fields 
 of agriculture, manufacture and commerce. If, as seems 
 more than likely, the effect of these efforts will be to close 
 the markets in Russia and the Orient hitherto enjoyed by the 
 manufacturers of Great Britain who will say the success 
 achieved was due to superior Russian morality, intelligence 
 and greater devotion to liberty? Will some future Gibbon, 
 if the British islands cease to maintain a great population — •
 
 EXTERNAL TRADE 345 
 
 a possibility freely conceded by Mallock and others — assert 
 that the diminution of the number of inhabitants was due 
 to their failure to appreciate the blessings of freedom, and 
 glorify the rise and progress of the Muscovite as a triumph 
 of the principles of free government? 
 
 We may safely answer, No ! A more rational interpreta- 
 tion of the causes which contribute to the growth and decline 
 of nations will forbid the most limited intelligence to accept 
 so erroneous a view. In the future, after this mighty change 
 has occurred, it will be clearly perceived that the temporary 
 greatness of Britain was chiefly due to the failure of other 
 peoples to employ the faculties with which they were 
 endowed, and that a period was put to the power and 
 prosperity of the empire as soon as rivals discovered their 
 latent possibilities. A discovery of that character, associ- 
 ated with the desire to make the most of their previously 
 unexploited resources, will account more satisfactorily to 
 the historian of the future for the forward movement of 
 certain nations than theories of the effects of freedom and 
 the practice of morality. If the anticipated expansion of 
 the Russian Empire foreshadowed by its present industrial 
 progress occurs it will be impossible to attribute the devel- 
 opment to any such fanciful causes as the historians of the 
 old school advance to explain the decay of nations. We 
 know that freedom is not a conspicuous possession of the 
 Russians, and few Anglo-Saxons will concede that the 
 standard of morals is higher in the dominions of the Czar 
 than in the Western nations which have hitherto been in 
 the van of civilization. There may be much exaggeration 
 in the widespread statements regarding corruption in official 
 and private life in Russia, but there is enough basis of truth 
 in them to account for the consensus of opinion that many 
 reforms will have to be made before the Russian people 
 can be placed on the same plane as those now pleased to look 
 upon them as barbarians. 
 
 This being the case, historian and economist alike, when
 
 346 PROTECTION AND PROGRESS 
 
 they study the phenomenon of the decadence of the leading 
 commercial empire of to-day, will find no difficulty in 
 arriving at a correct conclusion respecting the cause. They 
 will not hesitate to attribute it to the inability of a people, 
 no matter how much their intelligence may have been devel- 
 oped, to contend indefinitely with superior resources. They 
 will see the vanity of the attempt to maintain an adventi- 
 tious position by piling up taxation. The schoolboy of the 
 future will look back with derision on the efifort — and the 
 system of political economy which instigated it — of a people 
 to convince other peoples that it is wise to expend the greater 
 part of the energy of mankind in the wasteful work of 
 unnecessary hauling. One day the fact that nations could 
 be persuaded that they would be benefited by neglecting to 
 develop their resources will seem as strange as it now seems 
 to us that the ancients should have approached so near to 
 the discovery of the great scientific truths which have revo- 
 lutionized the modern world without actually grasping them. 
 To those taking the backward view it will seem extraordinary 
 that the idea should have been seriously entertained that the 
 hiandicap of excessive taxation could assist in a race for 
 commercial supremacy, and the fatuity of those who imagine 
 that the piling up of billions of debt in commercial wars 
 could prove more than a temporary advantage in a rivalry 
 of the whole world will be a source of wonderment. 
 
 P»y students of the future the belief in illimitable foreign 
 markets will be regarded as an extraordinary delusion. 
 They will clearly see what some now perceive — that the 
 demands of consumers are democratic and always in re- 
 sponse to the desires of the masses. If the masses in any 
 country remain in a state of dependence the standard of life 
 v.ill be low and the volume of consumption small. Mr. 
 Mallock states the case accurately when he says : "Not every 
 member of the community demands the same commodities, 
 but v.hatever commodities are demanded are demanded in 
 each case in accordance with the spontaneous wishes of indi-
 
 EXTERNAL TRADE 347 
 
 viduals, and that the total force of the demand is the cumula- 
 tive result of a number of actions and desires which happen 
 to be spontaneously similar. The commodities supplied to 
 them have, in other words, to be accommodated to a gen- 
 uinely democratic order ; and if the consuming democracy 
 does not cosider them suitable, it virtually, by refusing to buy 
 them, condemns them to be destroyed."* 
 
 This being indisputable, it must be apparent that so long 
 as peoples are in a state of dependence their demand, except 
 for the simplest products, must remain at a minimum. It 
 is hopeless to expect Africans to increase their appreciation 
 for the many articles which most civilized peoples regard 
 as indispensable to a comfortable existence so long as they 
 consent to receive from "Brummangen" traders gin, glass 
 beads and coarse cotton cloths. Until they are taught the 
 arts of industry and are stimulated to desire a large number 
 of useful as well as unessential things their taste will remain 
 at the glass-bead level and the demand for general products 
 will be low. 
 
 As has already been suggested, the broadening of tastes 
 of people in a backward state is attended with the menace 
 of a curtailment of a certain kind of markets ; therefore 
 it is not encouraged. But in spite of this the impulse even 
 in "barbarian" countries is toward an enlargement of wants. 
 and it is always accompanied by an effort to meet them by 
 home industry. It is inconceivable that a community could 
 have as highly developed tastes as those exhibited by 
 Frenchmen, Americans, Germans and Englishmen without a 
 domestic industry responding to them. Therefore, we may 
 look forward to a period when all peoples with a capacity 
 for self-improvement will struggle to diversify their indus- 
 tries. It is in the highest degree probable that the introduc- 
 tion to the notice of the Orientals of railroads, factories 
 and modern methods of extracting minerals will be followed 
 
 ♦Mallock, Aristocracy and Evolution, p. 241.
 
 348 PROTECTION AND PROGRESS 
 
 by a reawakening of the nations of the East, and the final 
 result will be to completely alter the character of the ex- 
 changes between that part of the world and the West. 
 
 In the next chapter an attempt will be made to determine 
 the imminence and possible extent of the change which may 
 be produced by such an Oriental awakening. It will be 
 seen from the nature of the evidence to be presented that 
 the Western world must abandon the hope of greatly extend- 
 ing markets for manufactured products in that direction 
 and that there is a menace of near at hand rivalry which 
 may dispute with the West for the comparatively insignifi- 
 cant markets that will be afforded by uncivilized Africans 
 and others who have thus far failed to develop industrial 
 tendencies.
 
 CHAPTER XVI. 
 
 INDUSTRIALISM IN ASIA. 
 
 MANUFACTURING CAPABILITY OF ORIENTAL PEOPLES CON- 
 SIDERED. 
 
 Why some economists disregard the dangers of Asiatic competition 
 — A comfortable theory which would divest economics of all 
 problematical features — Any considerable output of cotton fab- 
 rics by Japan will injure the Western cotton industry — The de- 
 struction of established industries by fresh competitors — Com- 
 petition which results in destroying established industries im- 
 pairs the ability to consume — The promotion of superfluous in- 
 dustrial enterprises — Excessive competition leads to the dissipa- 
 tion of capital — Adam Smith's prediction that industrial joint 
 stock enterprises would not work successfully — The forerun- 
 ners of the modern trust in Ancient Rome — Automatic accu- 
 mulation of capital — The part accumulated capital may play in 
 promoting Oriental industry — The blackmailing propensity of 
 accumulated capital — Excessive thrift an obstacle to modern 
 progress — The imitator in an industrial contest often reaps the 
 fruits — The inventive faculty likely to be developed in Oriental 
 countries — Cheap labor in abundance may result in industrial 
 retrogression — An awakening that may prove more speedy than 
 that which followed the crusades — The effects of the transfer- 
 ence of Western capital to the Orient . 
 
 In concluding the chapter devoted to showing the fal- 
 lacy underlying the Cobdenistic theory that the markets 
 of the world are capable of indefinite expansion reference 
 was made to the probable effect that the introduction of 
 Western methods among Oriental peoples would have upon 
 the future of industry. The theoretical economists have 
 hitherto been disposed to regard with contempt the fears 
 
 349
 
 350 PROTECTION AND PROGRESS 
 
 of those who look forward to the time when the teeming 
 milHons of India, China and Japan will attempt to rival 
 Western peoples in the arts which the latter are now en- 
 gaged in teaching the former. An American writer of 
 large practical experience, whose ideas scarcely harmonize 
 with the results of his observations, has put into concrete 
 form in a magazine article the view of the class who think 
 that there is no ground for the apprehension of trouble 
 from this source. He assumed that any progress which 
 may be made in the direction of the acquirement of the 
 knowledge and arts of the West by Orientals would be 
 accompanied by a corresponding increase in the desires 
 of the newly awakened peoples which would display itself 
 in a greatly increased consumptive ability. 
 
 Speaking of the Japanese, he said: "In their individual 
 aspect human wants came into existence with the capacity 
 •for gratifying them. That the cost of living increases to 
 each individual as his fortune rises is a fact within the 
 observation and experience of every man. This could not 
 be otherwise. Men strive for the possession of material 
 things only because they desire to possess them, and that 
 desire for possession is founded upon an inherent desire 
 to expand, exalt and embellish individual life. The sole 
 object for which men produce an article of commerce is 
 for the purpose of exchanging it for other articles adapted 
 for their wants. They produce that they may sell and 
 they buy because they consume. At the basis of all indus- 
 try lies the individual want of man. As the desires of his 
 mind expand his effort expands correspondingly. Thus 
 the energy of the individual rises proportionately to the di- 
 versity of the want. In fact, the want his mind perceives 
 is the actual parent of his productive capacity. To assume 
 that a race of men will become producers of wealth on a 
 very large scale without becoming consumers on a cor- 
 respondingly increased scale is to attribute to them the stol- 
 idity of a purpose to become rich without any correspond-
 
 INDUSTRIALISM IN ASIA 351 
 
 ing personal benefit to themselves. If contact with the 
 nations possessing higher civilized efficiency is to have no 
 other effect upon Japan than to increase its productive 
 capacity without enriching or diversifying the civilized want 
 of that people, then the Japanese must be regarded as the 
 most stolid, unimaginative and stupid of all the races of 
 men."* 
 
 The writer foresaw that this view might be attacked 
 as a generalization, but he contended that it had a substan- 
 tial basis in fact and in the experience of each individual, 
 and that it is consistent with the philosophy of human 
 life, human aspiration and human desire. It is open, how- 
 ever, to the objection that it ignores the fundamental fact 
 that as society is now constituted there is a constant ten- 
 dency to overproduction, and that the result of this tendency 
 is to create fierce commercial rivalry, the too frequent out- 
 come of which is to arrest, and in many instances totally 
 impair, the ability of localities or peoples to maintain their 
 customary rate of progress, and that it often eventuates 
 in the complete submergence of once prosperous communi- 
 ties. 
 
 If it were true, as Mr. Mills assumes, that the ability 
 to create wealth is matched by the ability to effectively con- 
 sume there would be no problem for modern economists 
 to consider. Such an assumption implies the existence of 
 a continuous commercial prosperity, whereas the reverse 
 is the case. Instead of it being true that increased pow- 
 ers of productivity bring about an equilibrium between 
 demand and supply, we find that the latter is constantly 
 outstripping the former, and that as the decades roll on 
 the so-called periods of depression follow each other more 
 closely, last longer and grow more acute. 
 
 If this were not the case we might view with equanimity 
 the creation of new industries in Japan. If the assumption 
 
 ♦Mills, Japanese Industries, Overland Monthly, June, 1896.
 
 J52 PROTECTION AND PROGRESS 
 
 that "a race of men, when tliey become producers on a 
 large scale, at once become consumers on a correspondingly 
 increased scale" were perfectly sound and we could be 
 assured that there would be no serious dislocation of the 
 existing machinery of production there would be no ground 
 for apprehension. But the least informed person is aware 
 that this is not the case. Take a concrete example fur- 
 nished by the Japanese. It will be impossible for Japan, 
 in the present condition of the cotton manufacturing industry 
 in the Western world, to greatly increase her output of 
 textile fabrics without seriously injuring the plants already 
 in existence in Europe and America. 
 
 The Cobdenistic idea that new outlets for manufactured 
 goods can easily be found is no longer tenable. It has 
 been absolutely abandoned by thoughtful English writers, 
 who, while still maintaining that the free trade system is 
 adapted to the needs of Great Britain, are too frank to 
 conceal the fact that at present there is no hope of adjust- 
 ing the machinery of production so that it will always run 
 as smoothly as the theorists assume it does. A prominent 
 member of this new and more rational school of British 
 economists remarks: "It is at any rate conceivable that 
 Japan might undersell England in the East, and Germany 
 undersell it in the West, and that the present depression 
 in agriculture might extend to manufactures. The gen- 
 eral assumption that if trade is driven from one market it 
 can flee to another is only partially true in practice, and 
 an industry may be destroyed before the labor and capital 
 can find another outlet."* He also says in the same con- 
 nection that "a country with a large carrying trade may 
 l)e injured by the development of foreign shipping or by 
 the conversion of roundabout into direct trade," an obser- 
 vation no American who has witnessed the absorption by 
 Great Britain of the ocean carrying trade of the United 
 States will care to dispute. 
 
 ♦Nicholson, Principles of Political Economy, Vol. II, p. 326.
 
 INDUSTRIALISM IN ASIA 353 
 
 In the discussion of a practical question of this kind 
 the sophistries of the school of economists who attempt 
 to convey the impression that the welfare of the whole of 
 mankind is to be considered should be totally ignored. No 
 good result can flow from the practice of shutting our eyes 
 to the fact that there are national boundaries and that the 
 national feeling is increasing rather than diminishing. No 
 sane American will assent to the proposition that because 
 the aggregate wealth of the world is likely to be increased 
 by the productivity of the Orientals he is certain to be 
 benefited. There are too many chances that in the shak- 
 ing up of the atoms he may be the loser. 
 
 It is too late to teach the exploded doctrine that it makes 
 no difference to a people whether they do or do not pro- 
 duce the manufactured articles which they consume, pro- 
 vided they are easily and cheaply obtained. Experience has 
 taught us that consumption on a large scale only takes 
 place in those countries where industries are well diversi- 
 fied, and the inference is obvious that if the existence of 
 those we have created should be jeopardized by the compe- 
 tition of peoples whose habits of thrift, the result of cen- 
 turies of enforced abstinence, Vk'ould enable them to manu- 
 facture more cheaply than we can, the ability of the Ameri- 
 can people to effectively consume would speedily decline. 
 
 But the theory under criticism is not alone defective in 
 assuming that the evil of overproduction is non-existent. 
 It halts very seriously in another particular. Mr. Mills 
 is certainly in error when he asserts that "the sole object 
 for which men produce any article of commerce is for the 
 purpose of exchanging it for other articles adapted to their 
 wants. They produce that they may sell," he says, "and 
 they buy because they consume. At the basis of all indus- 
 try lies the individual want of man." 
 
 As a broad generalization this statement seems sound 
 enough, but analysis will speedily disclose that it does not 
 fairly describe the mainspring of the greater part of the 
 
 23
 
 354 PROTECTION AND PROGRESS 
 
 energy displayed in carrying out our extremely complex 
 industrial system. Unquestionably the moving impulse to 
 work with the majority of men is want. If the fruits of 
 the earth were so distributed that men could gather them 
 without effort it is conceivable that the industrial instinct 
 would entirely disappear. But it will hardly be asserted 
 that because the masses are compelled to labor in order 
 to keep the wolf of poverty from the door the multi-mil- 
 lionaire is impelled to add to his millions by a similar im- 
 pulse. Somewhere or other the statement has been attrib- 
 uted to C. P. Huntington that his great wealth gave him 
 no advantage over a person of moderate means. In sub- 
 stance, he said : "I can eat no more bread, meat and other 
 food, and I can wear no more clothes than the average 
 man; therefore, if I go on accumulating I am doing it 
 for the benefit of others, as I take care to keep my accumu- 
 lations productively employed." 
 
 Few persons will be found to dispute Mr. Huntington's 
 claim that he does not benefit by his continued exertions 
 and that when he plans a new enterprise he is not impelled 
 to do so by want. No doubt if he were disposed to inac- 
 tion he could get as much comfort out of tvvfo or three hun- 
 dred thousand dollars as he can out of a score of millions. 
 But he need not be credited with altruistic motives because 
 he goes on piling up wealth nor are we obliged to assume 
 that his persistent exertions must necessarily inure to the 
 benefit of his fellow creatures. 
 
 We cannot lose sight of the fact that the unscientific 
 character of modern competition results in the creation of 
 many entirely unnecessary and unsuccessful industrial works. 
 To say that the promotion of enterprises of this character 
 is beneficial would be as unreasonable as to claim that the 
 millionaire Girard conferred a public benefit when he em- 
 ployed an applicant for charity in piling and repiling bricks 
 on the same spots. It is true that he transferred part 
 of his wealth, which he did not need, to some one who
 
 INDUSTRIALISM IN ASIA 355 
 
 sadly needed the money earned in this fanciful manner, but 
 the carrying to and fro of the bricks was a mere waste 
 of energy, for it is more than probable that the recipient 
 of the charity thus whimsically conferred did not need exer- 
 cise. 
 
 In the same way Mr. Huntington's energies may have 
 been expended in the creation of unnecessary railroads. 
 If, as the result of his enterprise, two roads were called 
 into existence where one could easily have performed the 
 required work, the world at large was not advantaged. 
 The construction of the unnecessary road may have given 
 employment to men who needed it and its subsequent opera- 
 tion doubtless contributed to the alleviation of the suffer- 
 ing caused by the constant competition for an opportunity 
 to earn a living, but unless it can be successfully demon- 
 strated that the dispersal of capital is a desideratum, no 
 one will say that the creation of unnecessary transportation 
 facilities is economical or wise. 
 
 It is not desirable here to enlarge upon the evils flow- 
 ing from the promotion of excessive competition in the busi- 
 ness of transporting products to and fro. Indeed, it would 
 be a mistake to single out this particular industry for ani- 
 madversion while the same blunder is being committed in 
 every other calling where the competitive system has an 
 opportunity to operate. It is no worse a mistake to parallel 
 lines of railroads than it is to multiply stores indefinitely. 
 Two trains of cars running side by side through a country 
 which can scarcely furnish enough business for one may 
 afford a more striking illustration of the evil we speak of, 
 but a score of shoe shops in sight of each other on a single 
 street in a city, all employing clerks whose occupation a 
 large part of the time is waiting for customers who do not 
 come, is as pronounced a case of wasted energy as that 
 which the parallel railroads offer. 
 
 The point we are seeking to make is that the creation 
 of wealth under existing conditions is not always followed
 
 356 PROTECTION AND PROGRESS 
 
 by the ability to consume, and that while the highly unsci- 
 entific method of promoting productivity by competition 
 obtains it is positively necessary for nations, as it is for 
 indivduals, to take steps to prevent being crowded out of 
 the race. Therefore it behooves the people of the Western 
 world to narrowly watch the doings of possible new com- 
 petitors. A state has as much reason to feel apprehension 
 over the advent of a new manufacturing nation as the shop- 
 keeper has to dread the opening of a new establishment 
 by his side. The first comer may be able to hold his own 
 if the progress of the place in which he is located can sup- 
 port an additional dealer, but if it cannot he must divide 
 his profits with the interloper or go to the wall. 
 
 That this is the fate of a large proportion of those who 
 engage in business the records of failure in every coun- 
 try testify. Indeed, when this part of the evidence is 
 closely studied, the conclusion is forced upon the candid 
 inquirer that under the present system, in which accumula- 
 tions of capital play so important a part, it is becoming 
 more and more difficult to achieve success by the exercise 
 of skill and industry. If such a deduction may be regarded 
 as sound and is accepted it will be fatal to the assumption 
 that all attempts to increase the world's productivity must 
 result beneficially. In this view of the case only well directed 
 efforts which eliminate the factor of waste and respond to 
 ascertained wants, immediate or prospective, can confer a 
 benefit on mankind generally. 
 
 The writer we are criticising, like many others, employs 
 the argument advanced by Adam Smith when he assumed 
 that the mainspring of commercial energy is direct self- 
 interest. The fact is often lost sight of that when Adam 
 Smith wrote the belief was prevalent that no business enter- 
 prise could succeed unless the personal attention of those 
 directly interested in its profits was given to it. So con- 
 vinced was the learned doctor of the soundness of this 
 view that he unhesitatingly declared that joint stock com-
 
 INDUSTRIALISM IN ASIA 357 
 
 panics, except for the conduct of the banking and insur- 
 ance business, could not prove successful. "The only trades 
 which it seems possible for a joint stock company to carry 
 on successfully, without an exclusive privilege," he asserted, 
 "are those of which all the operations are capable of being 
 reduced to what is called a routine, or to such a uniformity 
 of method as admits of little or no variation."* In another 
 place he says: "The joint companies which are established 
 for the public spirited purpose of promoting some particular 
 manufacture, over and above managing their own affairs ill, 
 to the diminution of the general stock of the society, can in 
 other respects scarce ever fail to do more harm than good."t 
 And there was no doubt whatever in his mind "that a joint 
 stock company would be unable to carry on successfully any 
 branch of foreign trade, when private adventurers can come 
 into any sort of open and fair competition with them." J 
 
 These conclusions, as has already been observed, were 
 based on the erroneous assumption that the managers of 
 other people's money cannot be expected to watch over 
 it with the same vigilance with which the partners in pri- 
 vate copartnery watch over their own. "Like the stewards 
 of a rich man," says Doctor Smith, "they are apt to con- 
 sider attention to small matters as not for their master's 
 honor, and very easily give themselves a dispensation from 
 having it. Negligence and profusion, therefore, must always 
 prevail, more or less, in the management of the affairs of 
 such a company. It is upon this account that joint stock 
 companies for foreign trade have seldom been able to main- 
 tain the competition against private adventurers." 
 
 These views undoubtedly mirrored the manners, morals 
 and spirit of the time of Adam Smith, but they are not ap- 
 plicable to the conditions existing today, nor do they betray 
 
 *STnith, Wealth of Nations, Book V, Chap. I. 
 
 tibid. 
 
 J Ibid. 
 
 gibid.
 
 3S8 PROTFXTION AND PROGRESS 
 
 that large acquaintance with the inckistrial history of the 
 ancients with which the admirers of the Doctor credit him. 
 The researches of the modern critical school have established 
 the fact with sufficient clearness to enable us to assert that 
 joint stock enterprises were familiar to the people of ancient 
 Rome, and that some of the greatest achievements of antiqui- 
 ty were due to them. Mommsen is our authority for the state- 
 ment that "indications are found of the occurrence among 
 the Romans of that feature so characteristic of the system of 
 association — a coalition of rival companies in order to jointly 
 establish monopoly prices."* The same writer tells us that 
 one of the phenomena of the sixth century of Rome was that 
 "the transference of the charge of the larger monetary 
 transactions from the individual capitalists to the mediating 
 banker, who receives and makes payments for his customers, 
 invests and borrows money, and conducts their money deal- 
 ings at home and abroad — which is the mark of the develop- 
 ment of a monetary economy — was already completely car- 
 ried out in the time of Cato. The bankers, however, were 
 not only the cashiers of the rich in Rome, but everywhere 
 insinuated themselves into minor branches of business and 
 settled in ever increasing numbers in the provinces and de- 
 pendent states. "t 
 
 No other inference can be drawn from the statements 
 from which this deduction of Mommsen is drawn than that 
 joint stock operations were a common feature of the period 
 to which he refers. When we examine the original authori- 
 ties we find ample corroboration in the relation of circum- 
 stances which can only be explained by assuming the 
 existence of such enterprises. We find a significant refer- 
 ence to a system of joint underwriting by Cato, and there 
 are numerous allusions by other writers which suggest that 
 the great mines of Gaul and Iberia were worked with asso- 
 ciated capital. The curious and otherwise inexplicable fact 
 
 ♦Mommsen, History of Rome, Book III, Chap. XII. 
 flbid.
 
 INDUSTRIALISM IN ASIA 359 
 
 that such men as Caesar, Marc Antony and Catiline became 
 indebted for fabulously large sums to money lenders, who 
 apparently were furnished no security for the amounts bor- 
 rowed, may be explained by the existence of a system similar 
 to that which recently permitted the son of a Chicago million- 
 aire to involve himself to an extent that his obligation 
 rivaled the national debt of some small countries. Unless it 
 can be shown that human nature has greatly changed during 
 the eighteen centuries of our era it is unreasonable to as- 
 sume, as most historians have done, that the usurers of the 
 closing days of the Roman Republic, and of the period im- 
 mediately anterior, were in the habit of staking politicians of 
 more or less doubtful reputation in the hope of being reim- 
 bursed by a turn in the wheel of their political fortunes. 
 
 But whether this latter conjecture is sound or faulty, the 
 evidence is overwhelming that during the times refe— -ed to 
 there were opportunities in plenty for the owner of capital 
 to employ the same without the exercise of personal super- 
 vision. Indeed, it was a characteristic of the society of the 
 period that the very rich made open profession of scorn for 
 those who derived their livelihood from commerce, but did 
 not disdain to share the profits of the ventures planned and 
 carried out by the despised trading class. We are told that 
 the fortune of Crassus, the richest man in his day, was ac- 
 quired by speculation and that he disdained no branch of 
 gain ; that he entered into partnership with his freemen in 
 the most varied undertakings, and acted as banker, both in 
 and out of Rome, in person or by his agents, and advanced 
 money to his colleagues in the Senate. 
 
 The picture which Mommsen furnishes of this remark- 
 able figure of antiquity, wnth all of its lights and shades, 
 would serve excellently to portray the operations of several 
 of the richest men in the United States, and it is impossible 
 to study it without reaching the conclusion that the declining 
 days of republicanism in Rome were marked by economic
 
 36o PROTECTION AND PROGRESS 
 
 phenomena very similar to those through which the people i)t 
 the nineteenth century are passing. 
 
 A close investigator of the relations of corporations to 
 political science, in a recent discussion of this subject, ex- 
 pressed the view that "it is not only conceivable that private 
 corporations may become dangerous to sovereignty, but it is 
 a fact that something like private corporations did much to 
 produce the anarchy of the Middle Ages."* In citing this 
 passage there is no disposition to convey the impression that 
 the existence of private corporations is a menace to the sov- 
 ereignty of the people. This may be the case, but we prefer 
 here to accept the view of the writer quoted that "a private 
 business corporation is, from the view of political science, a 
 group of human beings usually belonging to the best class of 
 citizens, associated for the prosecution of some great enter- 
 prise and endowed with certain privileges and obligations." 
 By so doing we shall be able to clearly establish the fact that 
 modern enterprises are not suggested by the needs of those 
 promoting them, but in most cases they are the outcome of 
 the desire of those who are already possessed of more than 
 their share of the means of obtaining the comforts of the 
 world to add still further to their possessions. 
 
 A little reflection will convince any person that under- 
 takings engaged in for the purpose of earning dividends for 
 the owners of capital cannot possibly result in the same fash- 
 ion as individual efforts put forth to satisfy genuine wants. 
 It is inconceivable that any number of persons acting in a co- 
 operative capacity would deliberately build two roadways, 
 side by side, through fields in which they had planted crops. 
 The folly of such a course would be too apparent. The least 
 gifted member of the community would be able to perceive 
 the waste involved in the creation of two things where one 
 would serve the same purpose. The most obtuse yokel would 
 be able to grasp the fact that the energy wasted in building 
 
 ♦Burgess, Political Science Quarterly, June, 1898. Article, "Corpo- 
 rations and Political Science."
 
 INDUSTRIALISM IN ASIA 361 
 
 the unnecessary road might have been more profitably di- 
 rected elsewhere, or that it would have been more sensible to 
 employ the time consumed in useless toil in restful leisure. 
 But the promoters of joint stock enterprises, having no other 
 object in view than the earning of dividends and not acting 
 in response to real wants, are uninfluenced by considerations 
 of this kind. 
 
 A corporation that earns dividends by driving a rival into 
 bankruptcy is as much a monument to the sagacity of its 
 projector as though it had accomplished what Mr. Mills as- 
 sumes all efforts to create wealth accomplish. If all the ef- 
 forts of individuals and corporations were well directed — 
 that is to say, responsive to wants already existent, or de- 
 signed to meet those likely to arise — there would be some 
 justification for that species of optimism which finds expres- 
 sion in the confident opinion that the result of the entrance 
 of Oriental peoples into the modern industrial arena is sure 
 to be beneficial. But while the largest share of the enterprise 
 of to-day is promoted by a system whose driving wheel is 
 speculation, and the most marked result is overproduction, 
 it is idle to contend that the threatened competition is not a 
 menace to the existing order of society. Had there been any 
 foundation for Adam Smith's assumption that joint stock 
 enterprises for the conduct of manufacturing industries could 
 not succeed, the progress of Oriental rivalry would neces- 
 sarily have been slow. If it were necessary for the Japan- 
 ese to depend upon their own uncombined efforts to create a 
 cotton industry it is more than probable that its expansion 
 would not proceed more rapidly than the demand for home 
 consumption justified. There is no doubt that Smith was 
 right in assuming that men acting on their own behalf are 
 naturally more cautious than those who are engaged to per- 
 form a service for others, but he entirely mistook the nature 
 of the conflict. Like the writer in the Overland Monthly, 
 he supposed that the efforts of men engaging in industrial 
 enterprises would be directed to the satisfaction of well
 
 362 PROTECTION AND PROGRESS 
 
 ascertained wants, or to meeting those which might be cre- 
 ated. He failed to see that a plethora of capital would bring 
 about a condition of affairs in the industrial world in which 
 the energies of the enterprising would be devoted to the ex- 
 tirpation of rivals, and that in the effort to accomplish this 
 object the primary purpose of producing — to satisfy wants 
 — would be wholly lost sight of. 
 
 For carrying on such a conflict a combination of capital- 
 ists, like the entity called a State, can always secure willing 
 and able servants. Just as the government of a wealthy and 
 powerful nation obtains the services of its most gifted citi- 
 zens by offers of rewards, so does the corporation of modern 
 times. No one will challenge the assertion that there are 
 now in the employ of the stock companies of the great indus- 
 trial nations men as able, honest and loyal as those in the 
 service of the governments ; nor will anyone deny that these 
 hired servants of capital work as zealously and intelligently 
 to further the interests of the corporations with which they 
 are identified as they would if they were carrying on their 
 ovv^n concerns. To maintain a contrary assumption it would 
 be necessary to ignore the generally conceded fact that cor- 
 porations are constantly absorbing the best organizers and 
 the most capable men of every community. The rewards 
 offered to servants by corporations are higher than most per- 
 sons can hope to achieve through their own exertions ; conse- 
 quently volunteers of ability eagerly offer their services, 
 which are accepted and employed by capital to carry out the 
 programme of crushing individual effort, a course rendered 
 imperatively necessary to satisfy the desire of those who 
 already have more than they need to add to their accumula- 
 tions. 
 
 No sophistry can disguise these facts. It may be freely 
 admitted that the effect of combination of capital is to reduce 
 the cost of production, and thus make it possible for the con- 
 sumers who have the money wherewith to buy to obtain their 
 supplies more cheaply, and still the charge that the inter-
 
 INPUSTRIALISM IN ASIA 363 
 
 position of the joint stock company renders it possible for 
 organized capital to shift fields of industry and utterly de- 
 stroy whole communities and even nations remains uncon- 
 futed. 
 
 The phenomenon of foreign capital seeking the United 
 States as a field of investment is a familiar one. It has here- 
 tofore been regarded mainly from the standpoint of the 
 theorist who sees nothing but universal benefit in the devel- 
 opment of fresh resources, but the signs are multiplying that 
 the English people are coming to look upon the conscious 
 and unconscious efforts of British capitalists to promote 
 rival industries on this side of the water as a mistake. They 
 certainly cannot view with equanimity the creation of enor- 
 mous iron and steel plants in the United States, whose very 
 magnitude make the competition of the works of smaller 
 countries impossible. The reduction in the price of iron and 
 steel due to the superior facilities of the large American 
 establishments will hardly compensate the British for the 
 inevitable crowding out of the products of their own works, 
 with all the evils that such a result may — nay, must — bring 
 in its train. 
 
 The historian or economist who surveys the effects of 
 this movement of capital, say a 'thousand years hence, may 
 conclude that all was for the best and that it was but natural 
 that the transference of the seat of industry, which seemed 
 to have been firmly established in Western Europe in the 
 nineteenth century, should have taken place, and that less 
 exploited regions should have had their turn at the founts 
 of prosperity, but he will not wonder that every device which 
 ingenuity could suggest was resorted to in order to avert the 
 commercial decay which such a transference necessarily in- 
 volved. Perhaps acquired experience will have taught the 
 economist of the future that the benefits of an easy inter- 
 change of commodities were more fanciful than real, and 
 that it resulted much oftener in repression of productivity 
 than in its promotion.
 
 364 PROTECTION AND PROGRESS 
 
 That such a conchision would be inevitable if the Oriental 
 nations of the world should become active rivals of Western 
 peoples in manufacturing, without acquiring the habits of 
 Westerns, seems indisputable. It is contended, however, 
 that the first named phenomenon could not occur without 
 being closely followed by the other. If this assumption 
 could be established there would be no cause for apprehen- 
 sion, but before it can be accepted as sound numerous ex- 
 periences, all tending to show that the ingrained habits of 
 centuries cannot be changed in the twinkling of an eye, must 
 be explained away. The fact that the Chinese who have 
 found their way to this country have for a long period 
 been in the enjoyment of rates of compensation which would 
 have enabled them to materially raise their standard of com- 
 fort, but that they have refused to do so, is significant and 
 warrants the assumption that the same result would occur in 
 the country from which they come if Western industries 
 were introduced. 
 
 The evidence that the Orientals referred to are not in- 
 duced by example or opportunity to become thriftless is over- 
 whelming. The practice of herding together in large num- 
 bers in close quarters continues in California, although the 
 race has enjoyed half a century of comparative prosperity in 
 the State. There is no disposition whatever exhibited by 
 these Orientals to imitate the individualism of Western peo- 
 ples which leads even the illy compensated laborer to exhibit 
 personal taste in the selection of his dress. Even in the mat- 
 ter of alimentation it has been observed that Chinese domes- 
 tics in the service of Americans of luxurious habits, as a 
 rule, prefer to adhere to a simple diet of rice and common 
 vegetables rather than indulge in the variety which the em- 
 ployer's table affords and of which they are free to partake. 
 As for the Chinese workers in store and clothing factories, 
 it is doubtful whether they ever think of such a thing as a 
 more varied ration than they were accustomed to at home.
 
 INDUSTRIALISM IN ASIA 365 
 
 although their desires may extend so far as to impel them to 
 increase their indulgence in rice and pork. 
 
 No matter how impressively Samuel Smiles may dis- 
 course on the beauties of abstemiousness and the virtues of 
 thrift, it must be admitted that when they are carried to ex- 
 tremes they result disastrously to that expansion which is 
 considered by economists to be essential to progress. We 
 may study the case of an individual who by the practice of 
 self-denial during thirty or forty years has laid aside a suffi- 
 cient sum to maintain himself in comparative comfort during 
 the closing days of his life, and freely admit that it has been 
 a good thing for the person under consideration. But it is 
 quite different when we come to inquire into the effects of 
 abstemiousness upon society and ask ourselves what would 
 be the result if Western men were as a rule thrifty instead of 
 being the reverse. If they were, a condition of affairs anal- 
 ogous to that witnessed in China today, and, on a smaller 
 scale, in the colony of 30,000 Chinese making their 
 home in San Francisco, would inevitably exist. If all Euro- 
 peans compelled to toil for a living should decide to avoid the 
 use of unnecessary food and drink, and carefully refrain from 
 the purchase of articles of clothing or utensils and furniture 
 for household use not absolutely required, and consent to live 
 in cramped quarters until they had saved enough money to 
 indulge their fancies, it is more than probable that the very 
 aim of thrift would be defeated by impairing the opportunity 
 to earn a competency. Writers, such as Smiles, quite over- 
 look the fact that opportunities of obtaining employment, 
 rate of wages and consumptive ability bear a close relation 
 to each other, and that to greatly curtail consumption by the 
 practice of thrift would certainly react on the wage earner. 
 
 The exercise of thrift by the individual undeniably gives 
 him an advantage over the thriftless, but it is an advantage 
 which could not be achieved if the world was made up of 
 people accustomed to the practice of rigorous economy. In- 
 telligently regarded, the self-denial practiced for the purpose
 
 366 PROTECTION AND PROGRESS 
 
 of accumulating capital is at once seen to be intensely selfish, 
 for its ultimate purpose is to profit by the indiscretions of 
 those who are too foolish or weak to undergo temporary dis- 
 comfort for the sake of future advantage. And while there 
 is undoubtedly an essential difference between the thrift 
 practiced by a Western — which almost invariably is con- 
 sciously or unconsciously directed by the desire to accumu- 
 late capital for future use — and that which centuries of habit 
 have forced upon the people of Oriental nations, the result in 
 both cases, if the propensity is carried to extremes, must be 
 nearly the same. 
 
 If it is true, as nearly all economists are ready to concede, 
 that labor is the chief factor in production, then it must be 
 obvious that the country which has the most abundant sup- 
 ply of the cheapest labor, all things else being equal, will suc- 
 ceed in a struggle in which competition is absolutely unre- 
 strained. But the persons who antagonize the idea that the 
 Orientals may become formidable competitors of Western 
 peoples declare that the differences which now exist between 
 Orientals and Westerns, and which give the latter an advan- 
 tage over the former, cannot be removed, and that they will 
 always suffice to counterbalance the cheapness of labor even 
 should the conditions fail to materialize which another set of 
 theorists say must inevitably arise in the event of the general 
 introduction of modern industrial methods into the Orient. 
 
 Those who tenaciously cling to the belief that there can 
 be no formidable competition between peoples of varying 
 grades of intelligence and accomplishment do so in defiance 
 of a mass of testimony which seems to conclusively establish 
 that it may be possible for an imitating nation under a system 
 of unrestrained commercial rivalry to seize the fruits which 
 the originator should have gathered. In a monograph on 
 the subject of Japanese competition a writer has grouped 
 together a great quantity of evidence on this point.* He 
 
 *Young, Competition of Oriental Manufacturers and the Industrial
 
 INDUSTRIALISM IN ASIA 367 
 
 showed that in many lines of industry, notably in the spin- 
 ning and weaving of cotton with improved machinery, this 
 people had made remarkable advances, and that the proba- 
 bility was largely in favor of their continuing to do so. The 
 arguments advanced were assailed in many quarters, and the 
 issues involved were somewhat obscured by the introduction 
 of the question of currencies, but, on the whole, it may be 
 confidently urged that there was a tacit admission on the part 
 of the disputants that there is no obstacle to the building up 
 of a great manufacturing industry in Japan. 
 
 Denial of such a possibility would be useless in the face of 
 the multiplying proofs of the fact. There is therefore no 
 longer any attempt made to do so, but instead the efforts of 
 theorists are directed to demonstrating that the advent of the 
 new rivals will prove beneficial rather than detrimental to 
 Western manufacturers. To support this curious contention 
 they cite the increased exportations of Western countries to 
 Japan and endeavor to convey the impression that the threat- 
 ened mighty dislocation of the world's industries is a figment 
 of the imagination, and that the movement now in progress 
 is merely a readjustment of the manufacturing energies of 
 the world in which the Western peoples will be sure to come 
 out ahead. These optimists carefully close their eyes to the 
 fact that the increased takings of goods from foreigners by 
 the Japanese are ominous of intense future rivalry. They 
 willfully ignore the continuously increasing demand for ma- 
 chinery, or rather they refuse to recognize the fact that its 
 use in Japan is displacing English, German and American 
 labor. 
 
 It may be gratifying to those particularly concerned in 
 the production of cotton spinning and weaving machines to 
 note in the exports of articles of British manufacture that 
 there is a large increase in this line, but the movement will 
 scarcely be regarded with equanimity in Lancashire, where 
 
 Progress of the Orient, U. S. Senate Docket, No. 311, Fifty-fourth 
 Congress, First Session.
 
 368 PROTECTION AND PROGRESS 
 
 the population has long since outgrown its opportunity for 
 employment and capital has ceased to hope for steady re- 
 muneration. The increasing exports of raw cotton to Japan 
 from this country may be considered in some quarters as an 
 unmixed benefit, but the manufacturers and operatives of 
 the New England cotton mills can hardly be persuaded to 
 accept this view of the case while eagerly seeking an outlet 
 for their surplus products, the failure to find which they 
 know will be attended with enforced cessation of operations 
 and reductions of wages. 
 
 The tendency of professional economists to underrate the 
 teachings of experience is unfortunate. If it were not for 
 this habit the fact would be constantly kept in mind that the 
 views respecting the inabilit}'^ of the Japanese and other 
 Orientals to successfully establish manufacturing industries 
 capable of rivaling those of the Western world are merely a 
 repetition of those advanced a half a century ago by all 
 classes of Britons when considering the subject of A.merican 
 competition. Our estimate of the capabilities of the Japanese 
 and Chinese of to-day may be as far removed from accuracy 
 as was that of the British who once freely opined that Amer- 
 icans had not the skill and could not accumulate the capital 
 necessary to engage in successful rivalry with nations having 
 a record of industrial capacity extending back for centuries. 
 
 It would be repetition to introduce in this place the proofs 
 which signally confute the erroneous view referred to, but 
 they may be condensed into the assertion that at the begin- 
 ning of the present century and during the greater part of 
 the first sixty years since its opening, American skill and 
 mechanical capacity were rated far lower than the people of 
 the Occident are now inclined to estimate Japanese ability 
 and ingenuity. It would be difficult to find in English pub- 
 lications of the middle of the century tributes to American 
 skill and taste as emphatic as those quite recently paid by 
 Rein, Edwin Arnold, Henry Norman, Leonowens and others, 
 who, after a careful study of the characteristics and capacity
 
 INDUSTRIALISM IN ASIA 369 
 
 of the Japanese, have united in the expression of the con- 
 viction that in adaptability they excelled most peoples and 
 that skill and taste are the common possession of all classes 
 in Japan. 
 
 A people with such qualifications who have the wit to 
 pursue the course described by a Japanese scholar connected 
 with an American educational institution are not to be de- 
 spised as competitors. "From the time of the bombard- 
 ment," says this witness, "Satsuma and Choshiu began to 
 introduce European machinery and inventions, to employ 
 skilled Europeans to teach them and to send their young men 
 to Europe and America to acquire industrial and other in- 
 formation."* The inevitable results of such a policy are de- 
 scribed at length in the Congressional document above re- 
 ferred to and are being supplemented almost daily with in- 
 formation all tending to show that Japanese and other 
 Oriental competition is a factor that must be reckoned with, 
 and that it would be a fatal error to assume that it will re- 
 quire centuries of training in modern methods to bring these 
 people, whose development has been arrested for ages, to a 
 stage that will make them industrially formidable. 
 
 There is an opinion entertained in some quarters that the 
 Japanese are incapable of developing the inventive faculty, 
 and that this drawback will prove fatal to any hopes they 
 may entertain of surpassing Western peoples who have 
 shown that they have the gift of origination in a remarkable 
 degree, but this assumption is probably without foundation. 
 There is evidence that in due course of time, when the proper 
 stimulus is applied, inventiveness will display itself in Japan 
 and other parts of the Orient. It would be singular if China, 
 which claims, or has, the credit of originating paper, ex- 
 plosives and a score of other great utilities, should have en- 
 tirely lost the power of invention. The probabilities are that 
 
 ♦lyenaga, Constitutional Development of Japan, Johns Hopkins 
 University Political Science Series. 
 24
 
 370 PROTECTION AND PROGRESS 
 
 it is only dormant and that some day the Orientals will be 
 fully abreast of other peoples in this regard. 
 
 But whether this proves to be the case or not is imma- 
 terial to the present contention. Indeed, it is possible that 
 a high development of the imitative faculty may prove more 
 injurious to Western peoples than marked progress in the 
 direction of originality. We have only to consider that the 
 chief wants of the human race are supplied with staple prod- 
 ucts the character of which changes very little in the course 
 of ages to realize how small a part originality plays. The 
 people of the Orient have been using textile fabrics made by 
 hand for centuries, and these products of the peasant's loom 
 have been but slowly displaced by the manufactured goods of 
 the Occident. The caprices of fashion are practically un- 
 known in the East and the desire for change is non-existent. 
 This was quickly perceived by those engaged in catering for 
 Oriental trade, and for a long period the aim of the British 
 has been to supply the markets of China and other parts of 
 Asia with articles that the people are familiar with. The 
 impulse to improve either in design or quality has been ab- 
 sent because necessity has not acted as a stimulus. If 
 economists will take the trouble to peruse the Consular re- 
 ports of the British, or those of our own country, they will 
 gain some valuable information on this point. It will be seen 
 from these documents that great emphasis is placed upon 
 the necessity of consulting the prejudices — we can hardly 
 call them tastes — of the people of lands where there is no de- 
 veloped manufacturing industry. There are instances with- 
 out number in these official suggestions of severe depreca- 
 tion of the mistaken idea that an article superior in quality 
 or appearance can displace one to which a semi-civilized or 
 backward people has become habituated. The Germans and 
 English have long been accustomed to acting on the knowl- 
 edge of this characteristic, and shrewd manufacturers re- 
 frain from attempting innovations. 
 
 In this peculiarity lurks a grave menace. The extraor-
 
 INDUSTRIALISM IN ASIA 371 
 
 dinary tenacity with which the Oriental clings to the habits 
 once formed may prove an offset to all the advantages which 
 inventiveness should confer on its possessors. It is possible 
 that the introduction of machinery into the Orient may result 
 in absolute retrogression in many'industries, or, at least, in an 
 arrest of the tendency to create labor-saving appliances. The 
 suggestion seems revolutionary, but it needs only to be 
 studied closely to discover that cheap labor in overwhelming 
 abundance may serve the purpose of mankind as effectively 
 as automatic machinery which dispenses with the use of 
 human labor and leaves the displaced laborers to shift for 
 themselves. 
 
 If the textile machinery of the West is introduced in its 
 present state of perfection into China, and the natives of 
 that country are taught to manipulate it successfully, it would 
 require improvements of almost inconceivable importance in 
 the direction of labor saving to permit the people of such 
 countries as the United States and England to compete for 
 the Oriental trade or to withstand Oriental competition at 
 home. 
 
 That the Chinese will experience no difficulty in learning 
 to manipulate spinning and weaving machinery no one ac- 
 quainted with the progress made by the Japanese in the cotton 
 textile industry will doubt for a moment. In 1897, in spite 
 of a severe depression due to currency troubles,* Japan in- 
 creased its imports of raw cotton by 31,941 tons. In the year 
 named the consumption of the raw product by Japan was 
 nearly 150,000 tons, and it is highly significant that some of 
 its takings were from countries which were suffering from 
 overproduction of cotton textiles. Of the quantity mentioned 
 British India supplied 180,053,500 pounds, China 65,482 
 pounds, the United States 46,365,097 pounds, f While the 
 
 *Lay, Report of Assistant Japanese Secretary to Her Majesty's 
 Legation at Tokio. 
 
 fGiflFen, Letter to London Times, May 18, 1898.
 
 372 PROTECTION AND PROGRESS 
 
 Japanese were drawing on us for raw cotton our mills were 
 shutting down to afford an opportunity to work off surplus 
 slocks of cotton textiles, and incidentally to bring American 
 operatives to a realization of the fact that this country, in 
 order to hold its own, will be compelled to conform to the 
 labor conditions of other parts of the world. 
 
 What has been accomplished in Japan will be more than 
 matched by the future achievements of her near neighbor, 
 China. No matter what may be the present condition of 
 the people of that country, it will speedily be transformed 
 when Western methods are once introduced. There are 
 many who are disposed to take the fatally erroneous view 
 that there can be no awakening in a nation which has been 
 steeped for centuries in ignorance, and in which conserva- 
 tism has been pushed to such extremes as to be indistin- 
 guishable from lethargy. But those who know anything of 
 the industrial history of the foremost nations of Europe are 
 aware that their peoples passed through an experience not 
 essentially different from that which is regarded as a fatal 
 barrier to future progress in China. We are told by the 
 closest student of English industry in the Middle Ages that 
 "there is no part of the Western World in which so little 
 change was induced on the fortunes, on the life, and on the 
 habits of the people as in rural England from the peaceful 
 reign of Henry III to the earlier years of George III,"* and 
 the same writer reminds us that for centuries the use of 
 iron in agriculture was so restricted in England that wooden 
 pegs were used for harrow teeth and that the plow was 
 merely a wooden frame with an iron point, f When we 
 call to mind that the use of iron and steel must have been 
 common in the days of the Roman occupation of Britain, 
 and that in many provinces of the great empire of antiquity 
 agricultural machinery resembling or at least foreshadow- 
 ing the great labor-saving appliances of modern times was 
 used, the recurrence to primitive methods seems marvelous. 
 
 ♦R'l^pers. Six Centuries of Work and Wages, p. 86. 
 flbid, p. 88.
 
 INDUSTRIALISM IN ASIA 373 
 
 The British and other peoples subject to Rome must have 
 been acquainted with these aids to agricuhure. We are 
 therefore compelled to conclude that their abandonment indi- 
 cates a condition of affairs in all parts of Europe, for a 
 long period after the collapse of Rome, which presents a 
 close analogy to that now witnessed in China. 
 
 Who will be so bold as to predict that the experience of 
 Europe will not be repeated in China, and who so short 
 sighted as to be unable to see that there are forces now at 
 work which' will cause the awakening to be abrupt and 
 not a drowsy and slow return to industrial consciousness and 
 activity? When Europe lost the arts and sciences and was 
 plunged in the darkness of the Middle Ages a religious im- 
 pulse moved her people to invade countries equally steeped 
 in lethargy, but in which the survivals of great industrial 
 accomplishments were more numerous. When the Crusad- 
 ers returned to their homes they brought with them sugges- 
 tions and ideas as fresh and marvelous in their way as those 
 which Columbus and his fellow explorers returned with 
 from the newly discovered Western Hemisphere. It was 
 from these ideas brought from Saracen countries that 
 much of the cunning and skill of modern Europe was subse- 
 quently evolved. It was a slow and painful process, and 
 many centuries were occupied in bringing the flower of 
 Western industry to its present perfection. 
 
 But there is no likelihood that there will be a repetition 
 in the Orient of laborious efforts to recover lost knovyledge 
 and to gain that which is new. We need but watch the 
 career of Japan during the past forty years to have borne 
 in our minds the fact that there are forces at work which 
 were undreamed of during the centuries preceding this, 
 and which make the dissemination of the wisdom and skill of 
 ages a matter of generations and not of cycles. 
 
 In another place the mobile feature of capital has been 
 dwelt upon at length ; it is, therefore, unnecessary to repeat 
 the evidence which conclusively proves that under the mod-
 
 374 PROTECTION AND PROGRESS 
 
 em competitive system it can be obtained in sufficient quan- 
 tities to call forth all the dormant energies and abilities of 
 Oriental peoples. That those who own the capital which 
 may be employed for this purpose will not shrink from the 
 consequences which the extension of aid to the Orientals 
 may entail it is hardly necessary to state. Those who invest 
 their money in the bonds or shares of joint stock enterprises 
 seldom if ever concern themselves further than to ascertain 
 whether their investment is likely to prove safe and whether 
 there is a reasonable ground for expecting an adequate re- 
 turn in the shape of dividends or interest. There is not one 
 shareholder in a million who would be deterred by senti- 
 mental considerations from receiving profits earned by a 
 company that had driven another into bankrutpcy ; that is 
 part of the game. 
 
 This being the case, we may assume that the tendency to 
 invest in Oriental enterprises, which began to manifest itself 
 some years ago, will increase, and as the opportunities to em- 
 ploy capital in the Far East are extended more and more of 
 it will be attracted to that quarter of the globe. In the be- 
 ginning the nations with established industries will exper- 
 ience no evil results from these investments. Their hurtful 
 character will be disguised by figures showing expanding ex- 
 ports. For some time to come the persons dissenting from 
 the proposition that Oriental competition has menacing ele- 
 ments will continue to expatiate on enlarged exports of ma- 
 chinery and such raw products as cotton, but when the day 
 arrives in which the Chinese and Japanese shall have mas- 
 tered the use of modern contrivances and are able to not only 
 supply their own needs but will create a surplus which their 
 cheaper labor will enable them to sell at prices which the 
 Western cannot compete with, a revulsion of feeling will take 
 place, and the fase economic theory that the interest of the 
 consumer is of paramount importance will be abandoned, and 
 in its place will be substituted the more rational economic 
 idea that the producer is of more consequence than he "who 
 toils not nor spins."
 
 CHAPTER XVII. 
 FORMATION OF TRUSTS. 
 
 WHY THEY EXIST AND HOW THEY MAY BE RESTRAINED. 
 
 Causes that lead to the formation of trusts or combinations — The 
 vice of commercial wrecking directly promoted by competition — 
 Mr. Mallock's "great man" theory and its defects — Labor today 
 responds to the spur of necessity just as the builders of the pyr- 
 amids did to the slave driver's lash — The great men who pro- 
 vide work are not always public benefactors — A system which 
 compels the consumer to pay for unnecessary facilities — The 
 captains of modern industry harder taskmasters than the Pha- 
 raohs — The supply of brains at the command of capital becoming 
 larger and the compensation smaller — Rogers' prediction that 
 disregards of the rights of labor may result in revolution — Au- 
 tomatic increase of the value of capital — The growth of protec- 
 tion due to recognition of the dangers of unrestrained competi- 
 tion — Competition under restraint and capital under regulation 
 may avert the danger of socialism — The delusive benefits con- 
 ferred by trusts — Trusts not confined to protectionist countries 
 — Growth of international trusts — The remedy for trusts must be 
 a national one. 
 
 In the concluding paragraph of the discussion of the 
 probabihty of the Orientals engaging in a manufacturing 
 competition with Western nations the opinion was expressed 
 that in the near future the world would be compelled to 
 recognize the necessity of considering .he claims of the 
 producer as superior to those of the mere consumer. This 
 view is based on the belief that it will soon be perceived 
 that the relegation of the producer to a secondary place has 
 brought disaster to mankind. In all countries and in all 
 ages where the consumer has been esteemed of more conse-
 
 376 PROTECTION AND PROGRESS 
 
 quence than the producer a condition akin to slavery has 
 existed. The principle that the needs of the consumer 
 are of paramount importance is the corner stone of slav- 
 ery, and the Cobdenites boldly appropriated it and worked 
 it into the economic edifice they sought to erect. 
 
 This is not an extravagant or far fetched comparison. 
 The most limited intellect can grasp the fact that the insti- 
 tution of slavery, whenever and wherever it has existed, has 
 always been maintained for the purpose of permitting one 
 class of the community to live in comfort and idleness at the 
 expense of the other. The ancient Romans, who, in the 
 management of their slaves, had developed a degree of fero- 
 city which tinged their laws and communicated its brutal- 
 izing influence to every class of society ; the gentle Sir 
 Thomas More, who, in his "Utopia." pictured a future in 
 which the path of life would be strewed with roses, and the 
 modern free trader are at one on this point. They are all 
 perfectly agreed that the consumer is the first to be consid- 
 ered. 
 
 There is no essential difference between a society in 
 which necessity compels some men to do all the menial work 
 and that in which a man is made a chattel by the fortunes of 
 war or process of law. In "Utopia" all the uneasy and sor- 
 did services about the halls were performed by the slaves of 
 the Utopians* ; in a modern industrial nation similar services 
 are performed by the slaves of necessity who masquerade 
 as freemen. The term slave is an opprobrious one, but some 
 of those who wore it in ancient times looked down upon 
 freemen who were the real slaves. In the days of the Ro- 
 man Empire, when the toiling masses were taxed to contrib- 
 ute to the luxuries of the rich, which were enjoyed as much 
 by the favored slave as by his owner, the chattel, if his mind 
 had a philosophic bent, would naturally regard the wretch 
 who toiled to contribute to his comfort as the real slave. 
 Liberty is a precious boon, but when it brings no other bless- 
 ing in its train than the right to toil early and late for a 
 
 *More, Utopia, p. 95.
 
 FORMATION OF TRUSTS 377 
 
 meager subsistence, or, worse still, merely confers on its 
 wretched possessor the privilege of starving to death or of 
 being rescued from such a fate by taking refuge in an alms- 
 house, if he cannot obtain employment, it ceases to be re- 
 garded with excessive admiration. 
 
 That the elevation of the consumer to the first place in 
 an economic system must inevitably result in the conversion 
 of men nominally free into actual slaves is practically ad- 
 mitted by such men as Sir Robert Giffen, who point to the 
 increase of social wreckage and do not hesitate to attribute 
 it to the relentless workings of a system which, on the 
 whole, they profess to admire, and which they try to defend 
 by citing facts tending to create the impression that the 
 general condition of mankind is being improved at the 
 expense of the comparatively few. 
 
 It may be conceded that the general improvement which 
 Giffen and others claim has taken place in recent years has 
 really been effected, but that it has been brought about by 
 the practice of an irrational and unscientific system of 
 trading is preposterous. What gains have been made can 
 easily be traced to other causes than the cheapening of prod- 
 ucts by excessive competition. The evils which the latter 
 constantly brings in its train are incomparably greater than 
 the benefits, as we are learning to our sorrow. 
 
 Unless the world rejects the theory that the consumer's 
 interest must be the first consideration of statesmen and 
 economists the inevitable outcome will be state socialism 
 and communism in its most extreme form. If we continue 
 to act on the assumption that we need not regard "the low- 
 est class or residium of modern populations" so long as "the 
 ablest employers secure by their struggle with rivals" a vast 
 increase of wealth, a small proportion of which they share 
 with the population generally, we shall surely drift upon 
 the rock which the antagonists of socialism are endeavoring 
 to steer clear of. 
 
 The author from whom the immediately preceding quo- 
 tations are extracted thinks that workers are as much inter-
 
 378 PROTECTION AND PROGRESS 
 
 ested in the maintenance of the competitive system as any- 
 body, and rebukes the socialists, "who propose to aboHsh 
 the competition by which the workers benefit, because they 
 confuse it with competition by which the workers suffer."* 
 But the question arises : how can the competition which may 
 be beneficial be distinguished from that which is pernicious, 
 or may ultimately prove so ? 
 
 One of the features of modem industrialism is the con- 
 solidation of small establishments into one great concern, 
 combinations which are known in this country as trusts. In 
 the earlier stage of their existence these subsequently con- 
 solidated industrial establishments by their rivalry stimulate 
 consumption. But as soon as competition becomes exces- 
 sive and profits are reduced to a minimum, or operations are 
 carried on at a loss, some one with a capacity for organizing 
 suggests a combination for the purpose of diminishing pro- 
 duction, the object being to arrest the fall of prices brought 
 about by rivalry, and to thus restore profits. It is obvious 
 that when a process of this kind is in progress no one can 
 determine whether competition will prove beneficial or the 
 reverse. It is impossible under such circumstances to tell 
 whether rivalry is natural — that is, responsive to supposed 
 demands of consumers — or merely something promoted for 
 the purpose of compelling entrance into a trust in process of 
 formation or into one already formed. 
 
 Much of the competition of modern times partakes of 
 this latter character. It is inspired by speculators, who 
 make no pretense of ascertaining the wants of existing or 
 prospective markets ; their only purpose is to make money 
 at the expense of the industry and sagacity of others. They 
 occupy a position in modern industrialism similar to that 
 held by the robber barons of the Middle Ages ; the only 
 difference is that the latter maintained their power over the 
 trading and working classes of the period by force of arms, 
 while the depredator of to-day uses the more potent weapons 
 which custom and law sanction. 
 
 Mallock, Aristocracy and Evolution, p. 170.
 
 FORMATION OF TRUSTS 379 
 
 Not only do men practice blackmail under the guise of 
 rivalry in these days, but as Ernest von Halle, who has made 
 a careful study of the working of trusts in this country, says : 
 "The organizers of some trusts have no other purpose than 
 the creation of a marketable, of an enlarged opportunity for 
 speculation, of which they abundantly avail themselves" ;* 
 and he tells us that these same speculators who unduly stim- 
 ulate rivalry for the purpose of creating marketable paper 
 occasionally wreck their creations "in order to give a chance 
 to the spoliation of reorganizers." 
 
 In the face of such experiences the defenders of excessive 
 competition find it difficult to justify a policy of laissez faire 
 except in the manner quoted. They insist that interference 
 of any kind must prove injurious to trade and blind them- 
 selves to the fact that enormously greater evils may flow 
 from non-resistance. Mr. Mallock, who tells us there is a 
 competition by which workers benefit as well as one by which 
 they suffer, does not propose to hinder the growth of the 
 latter kind of rivalry, but, instead, treats his readers to a de- 
 scription of a purely imaginary class of aristocrats to whom 
 the destinies of the world are to be committed because they 
 have the capacity to find work for idle hands to do. In order 
 that this aristocratic class may work successfully there must 
 be an absence of all restraint ; the policy of let alone must be 
 complete. 
 
 Mr. Mallock, in the development of his "great man" 
 theory, tells us that "a large number of the great works of 
 antiquity were due to labor successfully stimulated by the 
 whip. But," he adds, "it is only a man's commonest faculties 
 that can be called into action thus ; and they can be called 
 into action thus only for this reason — that those who coerce 
 him know that these faculties are possessed by him, and they 
 also know the task which they wish to make him accomplish. 
 But in the case of the great man both these conditions are 
 
 *Von Halle, Trusts and Industrial Combinations in the United 
 States, p. 137.
 
 38o PROTECTION AND PROGRESS 
 
 wanting. It is impossible to tell that he possesses any ex- 
 ceptional faculties till he himself chooses to show them ; and 
 until circumstances supply him with some motive for exercis- 
 ing them he will probably be hardly aware that he possesses 
 such faculties himself. Moreover, even if he gives the world 
 some reason to suspect their existence, the world will still 
 not know what he can do with them, and will consequently 
 not be able to impose on him any task until he himself 
 chooses to show of what he is capable."* 
 
 It is to give the great man thus described an opportunity 
 that Mr. Mallock justifies unrestrained competition and 
 deprecates all advances in the direction of socialism. We 
 may agree with him to the extent that the withdrawal of 
 stimulus to exertion in the shape of reward would prove a 
 fatal obstacle to progress, but in doing so we find it impos- 
 sible to assent to his assumption that the superior minority 
 to whom all progress is due is composed of that class which 
 finds work for human hands to do. Mr. Mallock tells us 
 that "great men do not come into the world ready made. 
 * * * The philosopher, the soldier, the inventor, the states- 
 man, the great merchant or manufacturer, achieve success 
 only by prolonged and intense effort, by study, by concen- 
 trated thought, by action, by rude experience. Genius," he 
 adds, "has been defined as an infinite capacity for taking 
 trouble ; and the definition, though very incomplete, is, so far 
 as it goes, true."* 
 
 Now, if all the great men were of the kind here described, 
 it might be conceded that the system which makes the mod- 
 ern workingmen as serviceable in their hands as were the 
 toilers who produced the great works of antiquity under the 
 stimulus of the whip should be allowed to operate without 
 restraint. But as it can be easily shown that many if not all 
 the great modern industrial enterprises are called into exist- 
 
 ♦Mallock, Aristocracy and Evolution, p. zjj. 
 *Ibid, p. 152.
 
 FORMATION OF TRUSTS 381 
 
 ence by the selfish instinct which prompts men to continually 
 add to their acquisitions, and that in most cases the genius 
 required to carry them out, even the inspiring suggestion, 
 comes from men who are under the spur of necessity and are 
 as inexorably driven to exertion by circumstances as the 
 toilers of antiquity were by the whip, it is at once seen that 
 the circumstances which operated in the days of the Phar- 
 aohs are at work in full vigor to-day, their form only being 
 changed. And when we add that the most conspicuous 
 works of the Pharaohs were of as much utility to their build- 
 ers as many of those called into existence by the aristocrats 
 of modern industry, the men who promote undertakings for 
 the sole purpose of earning dividends for stockholders and 
 who do not ask themselves whether their efforts will benefit 
 or harm their fellow creatures, we are making a statement 
 which can easily be proved. 
 
 The pyramids of Egypt may have had a more important 
 use that the sepulture of the bodies of their creators, but the 
 proba'bility is strong that they owe their existence to the 
 promptings of human vanity and superstition. They have 
 been the wonder of mankind for ages, and as monuments of 
 what man can achieve they may have justified their construc- 
 tion. But as objects of utility their value can be expressed 
 by zero. It would be a mistake, however, to suppose that 
 the folly, or whatever it may be called, which impelled the 
 rulers of ancient Egypt to force armies of men to rear these 
 enormous piles is not matched in our own days. When the 
 story of the stupendous waste incurred in carrying out en- 
 tirely fruitless undertakings in modern times is told it will be 
 seen that the Pharaohs were not able to achieve more with 
 the aid of slavery and the accompanying lash than modern 
 speculators have accomplished, and are constantly accom- 
 plishing, with the assistance of legions of toilers who respond 
 to the touch of the spur of necessity. 
 
 It is not necessary to multiply instances to substantiate this 
 charge. One case will illustrate the whole, but who is it that
 
 382 PROTECTION AND PROGRESS 
 
 cannot from the leaves of his own experience supply facts 
 which tend to show that in modern times the incessant and 
 overpowering stimulus of the desire for money-making leads 
 to undertakings in no sense responsive to real needs? Who 
 has not at some time or other seen idle mills, rendered use- 
 less by the arrival on the scene of a fresh competitor with 
 more capital ? Who that has lived in a city has failed to note 
 the multiplication of warehouses and storerooms when the 
 existing condition of affairs unmistakably indicated that the 
 supply was already largely in excess of the demand ; and who 
 does not know of the construction of parallel lines of railroad 
 through countries which co«ld illy support a single company, 
 the object of the builders of the latest highway being to com- 
 pel the companies first on the ground to share their profits or 
 buy them out? 
 
 Measured by Mallock's standard, the projectors of all 
 the useless as well as the genuinely productive enterprises 
 must be regarded as "great men," the aristocracy of industry, 
 because they have set the multitude at work. It is true that 
 Mr. Mallock speaks of "productive faculties of the highest 
 order which not only minister to progress, but initiate it, 
 and which make, as if by a conjuring trick, the hands of the 
 average laborer produce new commodities of which he never 
 would have dreamed himself" ;* but his remarks on the oper- 
 ation of private capitalism clearly indicate that his definition 
 of a "great man" embraces all that class who succeed in 
 setting on foot enterprises which furnish some men with an 
 opportunity to earn their subsistence, and that he does not 
 exclude from it those who diminish the opportunity to earn 
 a living and help to swell the social wreckage by so doing. 
 He tells us that under the regime of private capital "the 
 fitness or efificiency of each great man in according to the 
 acceptability to the public of the goods or services which 
 he offers them," and he adds: "If the public are not 
 pleased with these goods or services they do not buy or 
 
 ♦Mallock, Aristocracy and Evolution, p. 333.
 
 FORMATION OF TRUSTS 3^3 
 
 demand them ; and the capital of the man by whom they are 
 offered, not being renewed by any money received, melts 
 in his hands, and with it his control over other men's 
 labor."* 
 
 Let us take a modern instance and see who the great 
 men would be under this definition. Nothing could more 
 pertinently illustrate the subject than to epitomize the his- 
 tory of an unnecessary parallel railroad. The most of these 
 roads in this country have been called into existence by men 
 who saw an opportunity to make money by promoting a 
 new enterprise, but many of them have been started for 
 the deliberate purpose of compelling an already established 
 line to buy off the blackmailing projectors. But various 
 motives combine to prevent the nipping in the bud of these 
 uncalled for transportation facilities and some of them are 
 carried to completion. Then ensue rate wars in which the 
 consumer for a time enjoys a fancied advantage, but which 
 are soon composed through the instrumentality of pools or 
 analogous devices. Subsequently a combination is effected 
 and the affairs of the amalgamated lines are so adjusted that 
 the capital invested in the superfluous line is made to pay 
 equally with that invested in the road really needed. 
 
 Let us take the evidence offered on behalf of the great 
 men of industry engaged in the railroad business by a com- 
 petent authority and see whether the effect of promoting 
 enterprises which give work to men are always beneficial. 
 Speaking of pools, which are rendered necessary by the 
 character of the competition referred to above, Appleton 
 Morgan says : "These pools are the legitimate and neces- 
 sary results of the rechartering over and over again of the 
 railway companies to transact business between the same 
 points by paralleling each other. So long as the people in 
 their legislatures will thus charter parallel lines serving 
 identical points — thus dividing territory they once granted 
 entire — it is not exactly clear how they can complain if the 
 
 *Mallock, Aristocracy and Evolution, p. 167.
 
 384 PROTECTION AND PROGRESS 
 
 lines built (by money invested, if not on the good faith of 
 the people, at least in reliance upon an undivided business) 
 combine to save themselves from bankruptcy. * * * 
 Against the inequality of their own rates and the hardship 
 of the long and short haul (in other words, against the dis- 
 crimination of nature and of physical laws) no less than 
 against the peril of bankruptcy and the consequent specula- 
 tive tendency of their stocks (after which may come the 
 wrecking, the watering and the vast individual fortunes), 
 the railways of this republic have endeavored by establish- 
 ment of pool commissions to defend both the public and 
 themselves."* 
 
 It is not necessary for the writer to point out that he 
 does not share the belief entertained by Appleton Morgan, 
 who holds the theory that the state should assist the railroad 
 first on the ground to maintain its monopolistic position. 
 The passage quoted is merely introduced to show that the 
 ultimate result of unrestrained competition in railroading is 
 combination, and that the advantage of excessive competi- 
 tion to the consumer is illusory and not real ; and to further 
 emphasize this fact an extended extract from another publi- 
 cation is introduced which will show the process by which 
 independent lines are merged into a harmoniously working 
 system, and the bad and unnecessary investments are made 
 to pay equally with those responsive to real needs : 
 
 "Take the case of the New York Central and Hudson 
 River Railroad companies, which consolidated in 1869 with 
 a capital of $103,110,137.31. The former of these roads 
 was organized in 1853 by the consolidation of ten smaller 
 roads connecting the cities of Albany and Bufifalo. The 
 capital stock of these companies amounted to $20,799,800, 
 of which $16,852,870 was claimed to have been paid in. 
 Their funded debt was $2,497,526. It is impossible at this 
 day to ascertain the original cost of these roads, but it is 
 certain that the above sums represent about three times the 
 amount actually expended for their construction. 
 
 ♦Morgan, The People and the Railways, pamphlet, 188S.
 
 FORMATION OF TRUSTS 385 
 
 "One of the roads entering into the consoHdation was 
 the Utica and Schenectady. It was seventy-eight miles 
 long and formed about one-fourth of the consolidated line. 
 It had the heaviest grading and rock cutting, was the best 
 equipped and undoubtedl}' the most expensive, in proportion 
 to its extent, of the ten roads out of which the New York 
 Central was created. The original cost of this line Vv'as 
 $2,000,000. Bonds were never issued by the company. The 
 line was profitable from the very beginning, paid regularly 
 10 per cent dividends — the limit to which railroad companies 
 were then restricted — and had a large surplus, which it 
 expended mainly for improvements. No assessment was 
 ever made on the stock beyond the $1,500,000 which was 
 originally paid in by the shareholders and upon which they 
 had drawn regular and liberal dividends. Taking the orig- 
 inal cost of this line as a basis, it is fair to presume that the 
 entire line from Albany to Buffalo, covering a distance of 
 297 miles, did not cost to exceed $6,000,000. These roads, 
 however, entered into the consolidation with a capital stock 
 of $15,274,800 and a bonded indebtedness of $1,696,326. 
 
 "Estimating the cost of the branches on the same basis 
 upon which we have estimated that of the main line, we shall 
 find that the total original cost of the consolidated lines can- 
 not have exceeded $8,000,000. The Mohawk Valley road 
 was put in at $2,000,000, and the Syracuse and Utica direct 
 at $600,000, though the roads existed only on paper and did 
 not represent any value whatever. The Schenectady and 
 Troy road, which went into the consolidation with $650,000 
 in stock and $90,000 bonds, had been bought for less than 
 $100,000 two months previous to the consolidation. 
 
 "It will thus be seen that already nearly one-third of 
 the stocks and bonds of the consolidated companies was 
 water. The consolidation agreement fixed the capital stock 
 of the New York Central at $23,085,600 and its funded debt 
 at $11,564,033.62, increasing the stock over $2,000,000 and 
 the bonded debt over $9,000,000. The latter was more than 
 quadrupled, and $8,000,000 worth of bonds was, under the 
 
 25
 
 386 PROTECliOi\ AND PROGRESS 
 
 same consolidation certificates, given as a present to the 
 stockholder of the new road. * * * 
 
 "At the time of the consolidation of the Hudson River 
 and New York Central Railroads the capital stock of the 
 two roads had grown to $44,800,000. Under the consolida- 
 tion agreement it was fixed at $45,000,000. The new com- 
 pany also assumed all the bonded and other indebtedness of 
 both roads. If the consolidation manipulators had paused 
 here the capital of the new company would have been some- 
 what less than $60,000,000, or more than three times the 
 cost of the property. But the road was, under existing 
 rates, capable of earning dividends on a much larger capital, 
 and this emergency was met by the issuance of consolidation 
 certificates to the amount of $45,000,000. The total capital 
 of the road was increased to and made to pay dividends on 
 over $103,000,000, while the total cost of the road and its 
 equipments, as claimed by the company in 1870, was less 
 than $60,000,000, their estimates being based on assumed 
 consolidation values and the expenditures made from sur- 
 plus earnings. During the same year the gross earnings of 
 the company were $22,363,320 and their net earnings 
 $8,295,240. In 1880 the gross earnings had increased to 
 $33,175,913 and the net earnings to $15,326,019. The com- 
 pany was able to declare in that year 11. 81 per cent, 
 dividend on iis $89,500,000 of fictitious stock. In 1890 its 
 gross earnings were $37,008,403, or $26,050 per mile, while 
 its total aet earnings were $12,516,273. The gross earn- 
 ings have largely increased during the years 1891 and 1892. 
 It is safe to say that $2,000,000 per annum would pay very 
 liberal interest and dividends upon the amount of money 
 expended upon the construction of the New York Central 
 and Hudson River Railroad from the proceeds of its bonds 
 and stocks. By the creation of fictitious values the managers 
 of the company have atempted to impose an exorbitant tax 
 upon the commerce and travel of the country for all time 
 to come. 
 
 "The case of the New York Central and Hudson River 
 Railroad Company is only one of the innumerable instances
 
 FORMATION OF TRUSTS 387 
 
 of stock watering in the history of American railroads," says 
 the writer from whose work this extended description of the 
 method of manipulation is taken.* 
 
 The writer from whom the information is derived fur- 
 nishes other illustrations equally striking and pertinent of 
 the facility with which enterprises, ostensibly for the public 
 good, but really having as their chief object the procuring of 
 returns to investors, are promoted in the United States. 
 Had he brought his work down to 1898 the author might 
 have cited the purchase by a syndicate, under foreclosure 
 proceedings instituted by the United States Government, of 
 a railroad which could have been replaced for perhaps half 
 the money paid for it by the purchasers, who were willing to 
 expend millions because they were fully assured that under 
 the remarkable system which prevails in this and some other 
 countries they could easily compel the patrons of the line 
 operated by them to pay them handsome returns upon their 
 investment. 
 
 Now, if Mr. Mallock was called upon to reduce his ab- 
 stractions to concrete propositions with illustrations drawn 
 from the practices of every day life he might probably point 
 to the creators of the great Vanderbilt system of railroads as 
 shining examples of his "great man" theory. A superficial 
 view of the matter certainly would suggest that the Vander- 
 bilts and their associates are entitled to be considered "aris- 
 tocrats of industry." The lines operated by them employ 
 thousands of men and they serve millions of people, but a 
 close analysis of the statement made by Larrabee shows con- 
 clusively that under the guise of public benefactors the pro- 
 jectors of the New York Central, and other roads that have 
 been similarly manipulated, have usurped the functions of the 
 taxgatherer and have laid their plans for taking toll from the 
 people until the end of time. 
 
 The Pharaohs of ancient Egypt, when they constructed 
 
 ♦Larrabee, The Railroad Question, pp. 165-168.
 
 388 PROTECTION AND PROGRESS 
 
 works of public utility, such as the mighty irrigation lakes 
 and the enormous granaries with which the valley of the 
 Nile was supplied, idiliough they were hard taskmasters and 
 applied the lash unsparingly, were at least sufficiently mindful 
 of the obligations incurred to suppy the people out of the 
 common slock of the product of the land. "The agricultural 
 population in Egypt," says Sinicox, "habitually produced by 
 their labor more food than they consumed. It was the rule 
 for them to produce enough for their own maintenance and 
 something to spare for the privileged few ; this surplus was 
 withdrawn from the producers year by year, so that they 
 themselves had no opportunities for accumulating wealth, 
 and it was spent, so far as its titular owners were concerned, 
 in unproductive works. Considering the industrial organi- 
 zation of the country, it could not, however, have been laid 
 out more to the advantage of the laborers. The hoards of 
 the wealthy served virtually as grain banks, upon which a 
 proportidn of the cultivators could draw for wages when 
 their services were not required to keep up the food supplies 
 for current necessities. Egyptian corn was not sent ovd of 
 the country to buy foreign luxuries or articles of ostentation 
 for which the demand could be indefinitely increased so as to 
 swallow up all the accumulations of the rich ; neither was 
 the demand for laborers limited by the power of the capital- 
 ist to drive a remunerative trade in the produce of their work. 
 Practically the whole of the hoarded food was spent in main- 
 taining the 'eaters of rations,' and as in no case did they 
 expect or receive more than maintenance they submitted 
 without any sense of injury to the regime which caused the 
 spare labor of the community (i. e., their own) to be spent in 
 erecting royal monuments, private tombs, temples of the 
 gods, and in maintaining officers, prelates and sacred ani- 
 mals, instead of in raising the general standard of comfort 
 or luxury. 
 
 "On the other hand, as monuments could only be built if 
 there were workers to hew and drag the stones, and food to
 
 FORMATION OF TRUSTS 3^9 
 
 feed them withal, if the peasant's share of the food supply 
 fell short of his needs, it was taken for granted that those 
 to whom his labor was habitually useful should keep him 
 alive, irrespective of any present demand for his services ; 
 and in practice, no doubt, the masses were fed in bad years 
 by free distribution of grain the equivalent of which in labor 
 must have been given as a rule, before or after, not during 
 the year of exceptional scarcity. * * * The relations be- 
 tween all sections of the community were conceived as con- 
 tinuous, or lifelong, and their character w^as not altered by 
 temporary changes in the circumstances of one or another."* 
 A careful thinker will not hastily assent to the proposi- 
 tion that the condition of affairs resulting from this sys- 
 tem was superior to that produced in the present day by 
 competition, but he will be amply justified in refusing to 
 subscribe to the theory advanced by Mallock that men who 
 have the ingenuity to bring about combinations of capital 
 for the creation of great works of public utility, which, 
 after being called into existence, are used as engines to 
 extort from the people for the benefit of investors an 
 undue share of the earth's products, must be regarded as 
 benefactors. If they are, then the captains of industry 
 in antiquity were incomparably greater benefactors, for 
 they not only made the opportunity for the laborer to toil, 
 but they recognized their obligations to maintain him at 
 all times. The modern promoter of enterprises refuses to 
 recognize any obligation. He merely accumulates for his 
 own aggrandizement. He takes advantage of the necessity 
 which forces men to work to carry out his plans, and when 
 he has paid the wages, which are often regulated by the 
 limit of subsistence, he assumes that he has done all that 
 is required of him. Whether the bellies of the masses are 
 full or empty is no concern of his ; all he asks is regular 
 returns on his investments, real or fictitious, so thaf he 
 
 *Simcox, Primitive Civilizations, Vol. I, pp. 69, 70.
 
 390 PROTECTION AND PROGRESS 
 
 may enjoy all the fruits of the earth and the power which 
 the ownership of wealth commands. 
 
 But Mr. Mallock goes even further than this comment 
 implies. He embraces in his list of great men those who 
 have no more direct influence in promoting an industrial 
 project than to furnish the capital for carrying it on. In 
 the scheme of modern industrialism the ownership of capi- 
 tal is of infinitely more importance than the possession of 
 brains ; therefore Mr. Mallock may be justified in accord- 
 ing to the infant in arms, who is represented by a guardian 
 in a meeting of directors and shareholders, as much credit 
 for keeping the machinery of the universe in motion as 
 he does to the men of brains, who invent or project enter- 
 prises. Mr. Mallock would probably resent the imputa- 
 tion that he places the two on the same plane, but there is 
 no escape from the conclusion that his argument really 
 amounts to such an assertion. 
 
 In another place Mallock tells us that "civilization, even 
 in its most material sense, does not consist of contrivances 
 and inventions only," and "that the industrial eflficiency 
 of a community does not depend solely on the muscles 
 of the manual workers being given a right direction so 
 that they shall shape material objects in such and such a 
 wa}^ but it depends also on the movements which are pre- 
 scribed to the men best fitted to perform them, and being 
 prescribed to them in such order that when each movement 
 has to be made the men told off to make it shall be ready 
 to make it at the moment. Here we see," says he, "part 
 of the secret of the success of the great contractor."* 
 
 There is no doubt of this, but there is good ground for 
 refusing to believe, as Mr. Mallock evidently does, that 
 the great rewards offered Ijy successful industry/ fall to the 
 men who work thus capably. He tells us by way of illus- 
 tration that "a mechanic could with ten minutes' atten- 
 
 *Mallock, Aristocracy and Evolution, p. 6i.
 
 FORMATION OF TRUSTS 391 
 
 tion comprehend the principle involved in a cantilever bridge, 
 but to design and construct a bridge such as that which now 
 spans the Forth, with its spans of six hundred yards and 
 its altitudes of aerial steel, implies an assimilation of our 
 multitudinous existing knowledge such as is hardly to be 
 found in a score of engineers in Europe."* 
 
 Mr. Mallock's estimate of the number of engineers in 
 Europe competent to design a bridge of the style and mag- 
 nitude of that over the Forth is a surprisingly low one and 
 seems to be negatived by the experience of Americans in 
 bridge building. We think that those competent to speak 
 will say that whenever the money is forthcoming for such 
 an enterprise the engineering skill to design and carry it 
 out successfully will be found in abundance in this coimtry 
 and in Europe. But that is not the point. The real ques- 
 tion is : Do the capable men who suggest and carry out 
 the great modern industrial undertakings receive their share 
 of the rewards of industry as assumed by Mallock? Is it 
 not true, on the contrary, that they do not, and that the 
 lion's portion is absorbed by the owners of capital who, as 
 individuals, play a smaller part in the industrial economy 
 than the laborers, who at least provide the brawn and 
 muscle with which undertakings are carried out? 
 
 No one familiar with the workings of modern industry 
 will presume to deny that the ingenious and suggestive 
 man can as readily be hired in these days as the man who 
 merely has strength and acquired skill to offer. It is notor- 
 ious that in the great industrial establishments men with 
 the inventive faculty are employed for a salary on the con- 
 dition that the fruits of their ingenuity shall become the 
 property of their employers. In the same way men of 
 capacity are maintained by corporations who earn the wages 
 paid them by making suggestions which are carried into 
 effect for the benefit of shareholders. It is a mistake to 
 
 ♦Mallock, Aristocrary and Evolution, p. 8i,
 
 392 PROTECTION AND PROGRESS 
 
 assume that men of this caliber are scarce. The supply is 
 nearly always equal to the demand and is continually in- 
 creasing, because capable men without recognize the impos- 
 sibility of competing with men who have capital, and who 
 experience no difficulty whatever in hiring all the brains 
 they need to carry out the most difficult undertakings. 
 
 It has been urged by some writers who have had this 
 fact forced upon their attention that, after all, the really 
 great captains of industry are those who show proficiency 
 as organizers and achieve success by carrying out large 
 schemes in which high organization is an essential factor. 
 If anything this is a falser pretense than that contained in 
 the assumption of Mallock that it is the capable men who 
 receive the great rewards of industry. The organizing 
 faculty is not a rare one, as anyone may infer who will 
 take the trouble to observe the facility with which com- 
 binations are effected. When the design of creating a trust 
 is formed it is easily carried into execution. If the rewards 
 offered to those invited to join it seem adequate the process 
 is almost as simple as that of causing the scattered globules 
 of a mass of quicksilver to coalesce by slightly inclining 
 the surface on which they rest. 
 
 When A is seized by the notion that he would like to 
 monopolize the trade hitherto done by his neighbors, B, 
 C, D, E and F, if he has sufficient capital all he needs do 
 is to put his enterprise in motion by hiring men of brains 
 to carry out details, so called, which he could not himself 
 execute, but a knowledge of which is absolutely requisite 
 to success. The project, with the trained assistance spoken 
 of, is then carried out with ease, provided the amount of 
 capital is adequate. It is impossible, as everyone knows, 
 under the modern system for the feeble competitor — that 
 is, one who is illy supplied with capital — to withstand the 
 encroachments of the owner of a large capital who can avail 
 himself of every resource for cheapening production, in- 
 cluding the purchase of brains.
 
 FORMATION OF TRUSTS 393 
 
 We need only refer to the unquestioned fact that the 
 men of brains whose services are so easily secured by capi- 
 tal could, if the capital was their own, carry out under- 
 takings of the greatest magnitude without assistance. This 
 capacity it seems should, according to the ideas advanced 
 by Mallock, at least receive all the industrial honors if not 
 the principal rewards ; but we know that in practice this 
 is not the case. The owner of capital not only takes the 
 lion's share of the earnings of industry, but false economic 
 teachers have persuaded the world to believe that he is the 
 real fulcrum for the lever which moves the universe. A, 
 who provides the hundred thousand dollars to purchase and 
 operate the machinery, invariably receives the credit, while 
 B, who suggested its use and manages it successfully after 
 it is installed, must be content with a modest salary, which 
 is regulated by the circumstance that there are plenty of 
 men, equally competent, who would cheerfully take his job. 
 
 It is not desirable in this place to discuss the question 
 whether capital deserves to obtain all the rewards it so 
 easily secures. There are obvious flaws in the theories of 
 the economists that, in the main, capital is the fruit of 
 self-denial, and that, therefore, its possessors are entitled 
 to all the advantages that may be derived from its owner- 
 ship, and it may yet be demonstrated that the machinery 
 of the universe can be made to work smoothly by some 
 other means than that of rapacity and greed. But such 
 a discussion would lead too far from the practical ques- 
 tions the world is now confronted with : Whether no re- 
 strictions whatever should be placed upon capital? and 
 whether its owners should be allowed to freely combine? 
 ■ to make it desirable to enter upon it in this connection. 
 What we are concerned to learn now is whether the con- 
 tention of ATallock and others that the unrestrained com- 
 petition of capital which results in the formation of com- 
 binations and trusts is really beneficial to mankind. 
 
 It has been held by eminent free traders that the effect
 
 394 PROTECTION AND PROGRESS 
 
 of unrestrained competition is to prevent trusts. J. Tiiorold 
 Rogers tells us that "attempts to secure prices to producers 
 against competitors have constantly been made and have 
 constantly failed. The most profitable process hitherto 
 known and employed is for strong men, or a combination 
 of strong men, to ruin weak ones by low or unremunerative 
 prices, and, having secured a monopoly, to commence a 
 legal pillage of the public. But though the expedient may 
 enrich individuals it is essentially transitory. Sooner or 
 later competition reappears and extraordinary profits are 
 arrested."* 
 
 We may justly suspect that this opinion, which was 
 expessed in one of a series of lectures, the principal theme 
 of which was free trade, does not correctly convey the 
 author's views, for in another connection, when making a 
 special study of the subject, he arrived at a wholly differ- 
 ent conclusion. He asserted : "We leave manufacturers 
 to charge what they please for the process of transforming 
 raw material into consumable articles with the conviction 
 that competition will be a greater check to excessive rates 
 than market regulations could be. But in the Middle Ages 
 such a notion would have been repudiated, and justly so. 
 Even now it is doubtful whether competition is of universal 
 efficacy and whether it is not more correct to say that where 
 combination is possible competition is inoperative."! 
 
 When a leading exponent of the principle of laisses 
 fairc is betrayed into making such an admission as that 
 quoted and significantly suggests, as he does in another 
 part of his work sketching the career of the English laborer, 
 that the outcome of excessive competition may be a repeti- 
 tion of the social disorders witnessed in England four or 
 five centuries ago, judicious statesmen will be pardoned 
 for casting about for a remedy which may mitigate if it 
 
 ♦Rogers, Industrial an3 Commercial History of England, p. 178, 
 j- Rogers, Six Centuries of Work and Wages, p. 139.
 
 FORMATION OF TRUSTS 395 
 
 cannot entirely eliminate the evil. Our writer tells us 
 that the conviction entertained in some quarters that the 
 rights of labor may be safely disregarded leads to dangerous 
 consequences. He says, speaking of the agriculturalist, that 
 "it is true that in the rudest agricultural, and even in the 
 rudest pastoral age, the labor of the individual always pro- 
 duces more than is requisite for himself and his famfiy. 
 He can, therefore, be made to maintain others on his labor. 
 Some of these consumers will benefit him by increasing his 
 comforts, by allowing him to devote his undivided attention 
 to his own industry or calling, and by furnishing him with 
 economies in the conduct of his business. Some will quar- 
 ter themselves as a right or by force on his labors and their 
 produce and will color their usurpation by alleging that he 
 owes them allegiance or duty. These claims are always 
 most insolent and incessant when society is barbarous. As 
 it becomes civilized, people reiterate, with apparent rea- 
 son, that only the criminal and the utterly destitute are bur- 
 dens on society, and that they who provide the pageantry, 
 or are recognized as the ornaments of civil life, represent 
 the highest utilities. It is to be hoped that labor and pov- 
 erty are satisfied with this assurance and are convinced 
 that these pretensions are founded on a solid basis of facts. 
 It will be found in the course of English social history that 
 the assurance has been occasionally disputed and the pre- 
 tensions severely criticised. It is possible that the temper 
 which disputes or criticises may occur in force hereafter 
 when it is not anticipated or expected."* 
 
 It is evident from the general tenor of the writings of 
 Professor Rogers that he did not have capitalists particularly 
 in mind when he penned the foregoing sentences, but there 
 is no doubt that the aggressions of this class are as great, 
 and in modern times the workings of the system which 
 produces them are fully as bad, as any of those more par- 
 
 *Rogers, Six Centuries of Work and Wages, p. 159.
 
 396 PROTECTION AND PROGRESS 
 
 ticularly referred to by him in his diatribe against the classes 
 that fortune or other circumstances have in past periods 
 quartered on the toilers of the world. Rogers, although 
 his works are brimful of sympathy for the laborer, was 
 constained by the economic theory he had adopted to. give 
 an almost unqualified support to the idea that it would be 
 a crime against progress to interfere with the tendency to 
 heap up large capitals. He shared the view of those pro- 
 fessional economists who believe that the universe would 
 be brought to a standstill if the privileges of capital were 
 abated. Like them, he seems to have lost sight of the fact 
 that the creation of capital must go on unceasingly and 
 that it does not require extraordinary efforts to create it 
 or coddling to keep it alive. If all that now in existence 
 were wiped out it would be renewed in a comparatively 
 brief period. We have the authority of John Stuart Mill 
 for the statement that "capital is kept in existence from 
 age to age not by preservation, but by perpetual reproduc- 
 tion : Every part of it is used and destroyed generally very 
 soon after it is produced, but those who consume it mean- 
 while are employed in producing more."* 
 
 If we carefully consider that there is no such thing as 
 "old capital" and then observe how in practice the pleasures 
 and powers derived from the possession of capital may be 
 indefinitely perpetuated we can form an ipipression of thQ 
 injury that may result from the adoption of a false economic 
 notion such as that involved in the assumption that capi- 
 tal needs special protection and encouragement. An illus- 
 tration derived from the actual working of the capitalistic 
 system will demonstrate the accuracy of Mill's observa- 
 tion that capital is extremely destructable, and it will also 
 show that its possession does not imply that the own^r 
 who enjoys an income from capital is always receiving 
 the deserved reward of abstention. Let us suppose that 
 
 ♦Mill, Principles of Political Economy, Vol. I, p. io8.
 
 FORMATION OF TRUSTS 397 
 
 A, some two hundred years ago, by the exercise of economy, 
 was able to set aside ten thousand dollars, which he suc- 
 cessfully invested, receiving as returns profits amounting 
 to ten per cent, annually — not an excessive estimate. If 
 he and his successors managed during the whole interven- 
 ing period to receive half of that amount, and at the end 
 of it they still maintained the capital unimpaired, they 
 would have been repaid tenfold. But this is only part of 
 the gains. The nominal amount of the capital may have 
 remained unchanged, but owing to the appreciation of the 
 value of money and to improvements in machinery, trans- 
 portation and to other causes it may have doubled its earn- 
 ing power during the interval. Thus we see that in spite 
 of the destructability of real capital, a fiction of convention 
 not only makes it indestructable, but actually increases the 
 value of the representative of the thing destroyed. 
 
 If to this automatic feature of adding to its bulk and 
 potentiality which capital possesses, we add the possibilities 
 resulting from its manipulation during the course of two 
 hundred years we may find the original capital swelled 
 to millions. That this is no exaggerated presentation of 
 the workings of the capitalistic system is shown by the 
 experience of the Vanderbilts. It was the original small 
 earnings of the Commodore, derived from his ferryboat, 
 which were expanded into the colossal fortunes now owned 
 by his descendants. The method by which this expansion 
 was eflfected is accurately outlined in the sketch of the 
 creation of the great Vanderbilt system of railroads which 
 forms part of this chapter. 
 
 It is the recognition of facts such as these that makes 
 it impossible for the thinking part of the masses to assent 
 to the proposition that the earnings of capital are merely 
 the fair rewards which society offers those who are willing 
 to practice self-denial in order to lay by something for a 
 future rainy day. It is clearly seen by the least discr-min- 
 ating that the abuses which the system brings in its train
 
 398 PROTECTION AND PROGRESS 
 
 exceed the benefits it confers, and the perception of this 
 arouses animosity against the promoters of combinations 
 and the accumulators of great fortunes. It does not need 
 the admission of men like Mill to convince the people that 
 a method superior to that which is now employed to keep 
 the machinery of production in motion may be devised, 
 and the demand for this improvement is sure to continue 
 until it is effected. Rogers, extreme as he was in his advo- 
 cacy of the "let alone" policy, saw this clearly, and so 
 did the writer of "Aristocracy and Evolution," for his essay 
 from beginning to end is a vain effort to bulwark privi- 
 lege against the future torrential demand for a better order- 
 ing of things, one in which the good of society and the 
 rights of man will be elevated above vested rights founded 
 on centuries of legalized robbery. 
 
 The adherents of protection in this country instinctively 
 recognized the abuses to which mankind are subjected by 
 unrestrained competition. They saw the potentiality of 
 capital and attempted to abridge the powers of its owners 
 by limiting the area of competition. They realized that 
 if no effort were made to diversify production in their own 
 country its people must necessarily occupy the position of 
 hewers of wood and drawers of water for the inhabitants 
 of countries where large capitals had already been accumu- 
 lated. They did not look upon capital as something inher-- 
 ently harmful, but they knew that its possessors were armed 
 with the power to do harm and would not shrink from doing 
 it, provided their own interests were enhanced thereby. 
 Their policy was to stimulate the creation of a domestic 
 capital, an aim which could not be carried out if they de- 
 voted themselves to the production of those rude products 
 of which Adam Smith said great quantities are perforce 
 exchanged for small quantities of manufactured articles. 
 Therefore they resorted to the plan of repulsing the aggres- 
 sions of foreign capitalists, with the result described else-
 
 FORMATION OF TRUSTS 399 
 
 where of creating an enormous home capital and a tremen- 
 dous domestic manufacturing industry. 
 
 The problem now is to curtail the power of the owners 
 of the domestic capital thus called into existence. It is 
 one that modern protectionists will not shrink from meet- 
 ing. Those who adhere to the idea that a restriction of 
 the area of competition is beneficial will not be restrained 
 by the predictions of the theorists who contend that inter- 
 ference with the free play of capital must always prove 
 disastrous. The warnings of the men who urged that pro- 
 tection would be an obstacle to the creation of a great 
 manufacturing industry and fatal to external trade will 
 not deter protectionists from carrying their reforms fur- 
 ther. While they perceive all the dangers resulting from 
 enormous aggregations of capital they are not disposed to 
 become pessimistic and surrender the belief they entertain 
 that a policy which recognizes the employment of private 
 capital under proper restraint is wise, and that competi- 
 tion within reasonable limitations will do more for the 
 world than a resort to socialism. 
 
 It has not escaped the attention of modern economists 
 that the advanced thinkers of the socialistic school look 
 with pleasure on the tendency to combine and that they 
 regard with disfavor all attempts to restrain the formation 
 of trusts. The fact is not without significance that social- 
 ists and communists are, as a rule, opponents of protection. 
 Henry George, with his iconoclastic proposition to overthrow 
 the principle of private ownership in land, was an extreme 
 advocate of laissez faire. All these apostles of the new 
 dispensation are firmly convinced that nothing can more 
 speedily bring about a realization of their desire than to 
 permit the free adoption of the modern trust system. They 
 argue that if a combination of a score of railroads un3er 
 one management can be eflfected, and that if fifteen or 
 twenty thousand miles of roads can be more sucessfully con- 
 ducted by one manager than under a score of managers
 
 400 PROTECTION AND PROGRESS 
 
 the demonstration will at length impress the people and 
 they will ask themselves why the whole of society should not 
 undertake to perform what a section of it accomplishes 
 with such apparent ease. They rely upon this conclusion 
 being speedily reached when there is no longer any ques- 
 tion regarding the chief beneficiaries of this effective organi- 
 zation. 
 
 When it becomes perfectly clear that the inevitable ten- 
 dency of unrestrained combination is to make the ricli 
 richer and the poor poorer the socialists think there will 
 be no trouble in carrying out their purpose of overturning 
 the existing social organization and substituting in its stead 
 some form of state socialism. Many, indeed, go further 
 and hope to dispense with all forms of control and pro- 
 fess to believe that anarchy will do more to elevate the 
 condition of man than order. These latter have evidently 
 modeled their ideas upon those of the most advanced free 
 traders, who have systematically taught that absolute free- 
 dom in trade and the manipulation of markets is essential 
 to progress. It is not a far away cry from tliat of free- 
 dom to adulterate, or the right to take advantage of the 
 necessitous, or to crush out the opportunities of rivals to 
 earn a living, or to commit any of the enormities sanctioned 
 by the doctrine of unrestrained competition, to that which 
 the anarchists raise when they say that man would be bel- 
 ter in every way if he were left free to do as he pleases, 
 unret-trained by convention or law. 
 
 There can be no doubt that the pushing of the doctrine 
 of laisses faire to extremes would ultimately bring the 
 world to socialism or anarchism. The gloomy forebodings 
 of Rogers and other free traders show that they fear such 
 a result. The sagacious Bismarck divined the danger and 
 urged a policy of modified state socialism, which was adopted 
 and has been adhered to by Germany for many years, but it 
 has not succeeded in stemming the tide. Great Britain, a 
 country whose leading philosophers at one time thought it
 
 FORMATION OF TRUSTS 401 
 
 would be impossible to draw into the socialistic maelstrom, 
 is inundated with "isms" which threaten some day to make 
 short work of private ownership in land, and has had im- 
 posed on it a counter system of combination in the form 
 of trades unionism, which, in its efforts to overcome the 
 effects of excessive competition, is constantly paralyzing 
 industry. 
 
 Surely the possibility of such a fate as that which is 
 ever present in the imagination of the opponents of social- 
 ism should make them study methods of averting what they 
 conceive to be an evil which would arrest the progress of 
 the world. If they are convinced that competition is essen- 
 tial to human advancement they should endeavor to mini- 
 mize the abuses which it brings in its train. If there is 
 any foundation for the assumption that combinations have 
 it in their power to nullify competition — and upon this 
 point there can be no doubt — they should be made impossi- 
 ble. No pretense that the high organization effected by 
 combinations which results in economies in management 
 and the use of processes that inure to the benefit of the 
 consumer should influence those who make our laws. In 
 most instances analysis will disclose that the economies of 
 combines do not result in benefits to consumers. It is true 
 that the price of a service performed by a trust will often 
 show a great decline as compared with the period before 
 the combination was effected, but it must not be overlooked 
 that the commodities produced by individual exertion have 
 also declined in value. It is the boast of the managers of 
 the great systems of railroads in this country that they 
 have enormously reduced the cost of carriage, and they 
 point to this fact to sustain their claim that consolidation 
 has benefited the public, but they ignore, what is easily 
 susceptible of proof, that the value of the commodities they 
 haul has declined more heavily than railroad freight rates. 
 It is a very telling argum.cnt to emphasize the fact that 
 the average charge for hauling a ton of goods one mile 
 
 26
 
 402 PROTECTION AND PROGRESS 
 
 has declined from 1.925 cents in 1867 to .806 in 1896,* 
 but it does not seem so striking when we consult a table 
 of prices and learn that corn was worth $1.17 a bushel in 
 1867 and 44 cents in 1896; or wheat $1.34 a bushel in the 
 first named year and 67 cents in the latter. Or that oats 
 fell from $1.16 to 49 cents during the same period.f 
 
 A careful consideration of this phase of the subject 
 will lead to the conclusion that combinations are not made 
 for the purpose of reducing prices or for the benefit of the 
 public, but that their sole object is to stifle competition. 
 Whatever savings may be effected by economies in man- 
 agement or production are enjoyed by the shareholders of 
 trusts and not by the community in which they are oper- 
 ated. As a result, owners of capital are enabled to swell 
 their possessions enormously, and concurrently they increase 
 their ability to maintain control in their chosen fields of 
 operation. Frequently they go further and form trusts 
 that are virtually all embracing. Combinations of this kind 
 are successfully carried on in this and other countries. 
 The tendency to reach out in every direction is so well 
 understood that in many States of the American Union 
 the laws forbid corporations doing any other kind of busi- 
 ness than that for which they are incorporated. But pro- 
 visions of this kind prove unavailing, for their spirit is 
 easily evaded by the formation of numerous apparently 
 separate bodies which are practically one, as may be seen 
 from the fact that their officers are the same, their posi- 
 tions only being slightly varied. In some cases even this 
 pretense is not kept up. 
 
 What has been written here in relation to combinations 
 does not describe a state of affairs peculiar to this country. 
 It is often assumed by the Cobdenites that trusts are the 
 product of protection, but there is absolutely no ground 
 
 *"Changes in the Rates of Charge for Railway and Transportation 
 Services," Publication of U. S. Dept. of Agriculture, 1898, p. 12. 
 flbid, p. 78.
 
 FORMAT,! ON OF TRUSTS 403 
 
 for the assumption. Combines flourish in free trade Eng- 
 land as luxuriantly as in this country. Rogers and other 
 free trade writers testify to this fact, and long lists of 
 successful British syndicates could easily be supplied if 
 necessary to substantiate their testimony. But no such 
 proof is required. The causes that produce trusts are 
 too easily perceived and understood to permit any mistake 
 on this point. They are due, as has been shown, to the 
 facility with which capital can be drawn, under the mod- 
 ern joint stock company system, into undertakings which 
 promise profit; therefore they are certain to flourish wher- 
 ever the laws encourage the formation of corporations and 
 extend to them a degree of protection which the isolated 
 individual is unable to obtain. 
 
 Obviously, then, the remedy for the disease must be a 
 rational one, and it must be sought for in the direction 
 of restraint. It is manifestly absurd to assume that the 
 evil can be abated by intensifying the causes which have 
 brought it about. There is nothing so clear as the fact 
 that excessive competition promotes combinations. If com- 
 petition is severe enough in a country of seventy million in- 
 habitants to call great trusts into existence what would hap- 
 pen if competition were absolutely unrestrained through- 
 out the whole world ? The fluidity of capital is well recog- 
 nized in these days, and the facility with which it can be 
 induced to lend itself to employment in enterprises of 
 the most cosmopolitan character is understood by those 
 who make it a business to manipulate financial affairs. If 
 the tariff barrier set up by this country did not exist Amer- 
 ican trusts would be international trusts. As it is, there 
 are already monstrosities of this character, and they will 
 undoubtedly be multiplied in the future unless the laws in 
 restraint of combinations in this country are made more 
 effective. 
 
 That they may be no one doubts who has given the mat- 
 ter intelligent study. That the problem presents some grave
 
 404 PROTECTION AND PROGRESS 
 
 difficulties is true, but they are not insurmountable. It 
 may be admitted once for all that the legislation thus far 
 enacted does not hold out much hope. So long as our 
 legislators proceed on the assumption that it is possible to 
 single out those corporations which aim at the stifling of 
 competition from those formed for the purpose of conduct- 
 ing business under a fair — that is to say, a moderate — sys- 
 tem of competition, there will be no abatement of the evil. 
 The law can hardly distinguish between corporations 
 of this kind. In its eyes size does not figure. If 
 modest corporations are recognized as benefits the co-opera- 
 tion they imply when effected on larger scale will not be 
 regarded by the lawmaker as an evil. Therefore attempts 
 to prevent the formation of trusts by laws are not likely 
 to succeed in countries where the advantages of the co-oper- 
 ation made possible by incorporation are recognized. 
 
 But while such laws are likely to prove negligible quan- 
 tities there is a way of reaching combinations, and that 
 is by a resort to the taxing power. If the people are con- 
 vinced that there is no foundation for the claim that the 
 consolidation of vast amounts of capital inures to their bene- 
 fit they may by a graduated system of taxation successfully 
 prevent the creation of overshadowing trusts. Such a course 
 is possible in a country which refuses to assent to the 
 proposition that the government has no right to interfere 
 with the operations of trade, but it could never be followed 
 in lands where the Cobdenite idea of unrestricted compe- 
 tition prevails, for that only contemplates conserving the 
 interests of the consumer. That is the corner stone of the 
 structure of Cobdenism, and if it is destroyed the whole 
 edifice must tumble. 
 
 A consistent Cobdenite, although he may indulge in 
 contradictions such as we have pointed out in the case of 
 Professor Rogers, will, on the whole, contend that trusts 
 are beneficial because they result in competition on a mag- 
 nified scale; but the protectionist, who insists that the first
 
 FORMATION OF TRUSTS 405 
 
 consideration of statesmen should be the interests of the 
 producer, is bound to antagonize the tendency to combine 
 because be clearly sees that its effect, no matter what may 
 be the apparent benefits in the shape of economies in man- 
 agement and production, is to constantly enlarge the volume 
 of the unemployed and increase the social wreckage which 
 free traders appear to think should not be taken into account. 
 In short, protectionists believe that no economic scheme 
 which does not elevate the producer to the first place can 
 succeed ; those who differ from them and advocate giving 
 all the advantage to the consumer, under the specious pre- 
 tense that there is no substantial' difference between the 
 producing consumer and the consumer who does not pro- 
 duce, are conscious or unconscious breeders of revolution 
 and destroyers of empire.
 
 CHAPTER XVIII. 
 TWO KINDS OF CONSUMERS. 
 
 INTERESTS OF THE NON-PRODUCER AND THE PRODUCER NOT 
 
 IDENTICAL. 
 
 The distinction between non-productive and productive consumers — 
 Power enjoyed by the owners of capital — Capital not always 
 the fruit of self-denial — The result of automatic saving— Exces- 
 sive saving leads to diminished consumption and to congestion 
 of capital and lack of employment — The problems which over- 
 production force on tKe economist — The land tax theory of 
 Henry George — Free land does not necessarily promote the 
 progress of a nation — The earth yields its best results when 
 private owners control its service — Every man's land is no man's 
 land — Rogers' advocacy of restraint of middlemen — Trusts the 
 natural outcome of unrestrained competition — Possible effects 
 of the disturbance of the system of superfluous middlemen — The 
 non-producing classes in the United States — Admitted dangers 
 of disturbing the existing wasteful system. 
 
 Of all the specious arguments advanced by the Cobden- 
 ites in favor of unrestricted competition none is more decep- 
 tive than that which attempts to defend the cheapening of 
 products on the ground that the consumer is benefited. 
 Its misleading character is instantly perceived by those who 
 take the trouble to inquire whether all consumers stand on 
 the same plane. Such investigators at once discover that 
 there are two classes of consumers, and that their interests 
 are diametrically opposed. 
 
 The necessity that all men labor under of being com- 
 pelled to consume the products of the soil and the work- 
 shop in a greater or less degree has been taken advantage of 
 
 by the Cobdenites, who, by ingeniously suppressing the 
 
 406
 
 CONSUMERS 407 
 
 fact that a large proportion of mankind does not exert it- 
 self in any manner to increase the general store of wealth, 
 endeavor to create the impression that all consumers have 
 an equal interest in reducing the cost of production. The fal- 
 lacy of the assumption is easily detected by those who do not 
 wish to be deceived. Such persons need only ask them- 
 selves what are the relations to each other of the two en- 
 tirely distinct classes in every community — the producers 
 and non-producers. 
 
 It is true that both are consumers, but it is obvious that 
 the producing consumer and the non-producing consumer 
 are differently afifected by the reduction of the cost of prod- 
 ucts. If we take for illustration the case of a primitive com- 
 munity in which the art of living at the expense of others 
 has not been developed, and in which barter is the sole 
 method of effecting exchanges, every improvement in 
 the method of production, and every transfer of property, 
 no matter under what conditions, inures to the general ben- 
 efit. But in such a society, all being workers, all share in 
 the gains, whether they are the result of nature's bounty or 
 of increased skill. If the country is pastoral we may be 
 reasonably certain that when ten sheep are exchanged for 
 one cow, where formerly the exchange was five for one, the 
 later transaction was a fair one to both participants. In 
 the case of the owner of the sheep the increase in his flocks 
 would in all probability have been due to the care with 
 which he tended them, or, at least, to the propitiousness of 
 the seasons ; therefore he would have no cause for com- 
 plaint because his relative abundance compelled the altera- 
 tion of the ratio of exchange ; and the owner of kine who 
 received twice as many sheep would have no fault to find. 
 If the proportions should be changed still more materially, 
 and one cow was rated as worth twenty sheep, the barter 
 would still be fair unless the condition which induced the 
 owner of the sheep to increase his offerings was produced by 
 a monopoly. So long as the barter remained natural and
 
 4o8 PROTECTION AND PROGRESS 
 
 merely represented an exchange of things not desired for 
 those which were no serious trouble could arise. 
 
 The failure to recognize the changes wrought by the 
 advance from a simple to a complex system of trading has 
 carried many economists far from the path of correct rea- 
 soning. The obvious necessity of exchange, and the fair- 
 ness attending transactions in which the moving consid- 
 eration of the actors was desire on the part of each to obtain 
 something possessed by the other, has blinded many to the 
 fact that a third factor of vast importance has been intro- 
 duced — namely, the employment of a medium of exchange. 
 The far-reaching consequences of the introduction of this 
 intermediary have been seen by some economists, but most 
 of them have minimized its effects when discussing its rela- 
 tions to the subject under consideration. 
 
 This is said in the full consciousness that the definitions 
 of money are numerous and some of them exact, and that 
 many of them lay stress on its important function of stor- 
 ing values. But an analysis of the work of the most con- 
 sistent writers invariably reveals the existence of a confu- 
 sion of mind due to the tendency to underrate the injurious 
 effects of what has been called automatic saving; or, to 
 put it in another way, the value of capital has been empha- 
 sized to such an extent that nearly all writers on economic 
 questions have ceased to perceive that it may be employed 
 as an instrument of oppression, and that when its owners 
 are permitted to use it as their interests dictate they may 
 wiekl a power as great as that exercised by the most des- 
 potic rulers. 
 
 In a passage from Rogers, quoted in the preceding 
 chapter, we find a just comment on the aggressions to which 
 the producer is subjected by a class which assumes a pre- 
 scriptive right to live at the expense of the exertions of 
 others. Speaking of the agriculturist, he says: "However 
 scanty may be his share in the distribution of wealth, except 
 he abide in the ship none can be safe. In the rudest agri-
 
 CONSUMERS 409 
 
 cultural and even in the rudest pastoral age the labor of 
 the individual always produces more than is requisite for 
 himself and his family. He can, therefore, be made to main- 
 tain others on his labor. Some of these consumers will ben- 
 efit him by increasing his comforts, by allowing him to 
 devote his undivided attention to his own industry or call- 
 ing, and by furnishing him with economies in the conduct of 
 his business. Some of them will quarter themselves as a 
 right or by force on his labors and their produce, and will 
 color their usurpation by alleging that he owes allegiance 
 or duty."* 
 
 These claims, our author tells us, are most insolent 
 and incessant when society is barbarous, but there is some 
 doubt about this latter conclusion. That those who lived 
 by the exertion of others were more insolent in asserting 
 their right to do so in barbarous times is true; that they 
 who now set up a similar claim are less insistent than their 
 predecessors, who exerted force to compel the producer 
 to yield the major part of his products to them for the 
 gratification of their taste for luxury, is false. 
 
 In another place, referring to the iniquitous system of 
 entail still maintained in Great Britain, Rogers says: "It 
 perpetuated the poverty of the younger son and the system 
 of quartering him on the public purse. It was the origin 
 of the principle of vested interests, perhaps the most anti- 
 social and dangerous doctrine which has pretended to justify 
 the robbery of all labor, and will justify the antagonism 
 of all labor to privilege." f 
 
 It is this principle of vested interests which Rogers de- 
 nounces in a fashion that might convey the impression that 
 he was a dangerous agitator if we did not know that he was 
 one of the most conservative of modern writers that gives 
 to the non-producer the tremendous advantage he enjoys. 
 
 ♦Rogers, Six Centuries of Work and Wages, p. 159. 
 flbid, p. 295.
 
 4IO PROTECTION AND PROGRESS 
 
 Under its cloak he conceals the iniquitous methods by which 
 for services performed centuries ago he still exacts toll. 
 Vested interests is the powerful weapon with which the 
 modern capitalist asserts his perpetual right to enjoyment 
 of the fruits of robbery. 
 
 The learned Professor Rogers tells us of the infamous 
 methods by which the landed class in England succeeded in 
 diverting from the common use the soil of the Kingdom, but 
 he would not have the descendants of the robbers disturbed 
 because they have vested rights. The brilliant Macaulay 
 describes the atrocities of John Churchill, his betrayal of 
 James, his acceptance of bribes from the French King, the 
 terms on which his services were bought by William, the 
 whole being an unbroken record of treachery unmatched 
 in the annals of man, yet the Marlboroughs are permitted 
 to enjoy the fruits of these rascalities through centuries, 
 and will continue to do so as long as vested interests are 
 considered more sacred than human rights. The very 
 writer who tells us that the maintenance of the principle 
 justifies the antagonism of all labor to privilege has been 
 the foremost champion of this system which permits one 
 part of the community to quarter itself on the other and 
 live without toil at the expense of the producer. 
 
 In their labored eulogies of the beauties of competition 
 in its extreme form Rogers and other free traders have felt 
 it necessary to preach the doctrine of the sacredness of cap- 
 ital and have constructed ingenious defenses of a system 
 which, when allowed to operate unrestrainedly, inevitably 
 tends to the impoverishment of the producing masses. In 
 order to create respect and reverence for this power and to 
 disarm opposition to its exercise books have been written 
 to produce the impression that capital is the fruit of ab- 
 stention and therefore deserves all the rewards it receives. 
 That some capital is created by the practice of self-denial 
 no one will dispute. Instances of the kind are common 
 enough to make this plausible half truth seem entirely true,
 
 CONSUMERS 4" 
 
 but a patient inquiry into the methods by which fortunes 
 are made will reveal the fact that where one dollar is set 
 aside which represents a genuine deprivation or a real act of 
 self-denial hundreds and thousands are accumulated by 
 fraudulent practices and by the process of adding to the 
 acquisitions of those who find it difficult to expend the whole 
 of their incomes, and therefore save them automatically. 
 
 As instances of accumulations of capital created fraud- 
 ulently, the major part of the great railroad fortunes of 
 this and other countries may be cited. How much self- 
 denial have the Vanderbilts practiced to add to their mil- 
 lions? What is the degree of abstention displayed by the 
 merchant prince whose scale of domestic expenditure rivals 
 that of the class from which he derives his nickname? 
 Have the Astors made such sacrifices that they really de- 
 serve to be rewarded with incomes which would maintain 
 in comfort a hundred thousand people? Is the Duke of 
 Westminster simply enjoying a deserved reward when gath- 
 ering millions annually from the tenants of his estates in 
 the city of London? The income tax returns of Great 
 Britain in 1868 showed that "one per cent, of the population 
 of the United Kingdom received one-quarter of the na- 
 tion's income, while about 10 per cent, received only as 
 much as the remaining 90 per cent."* Will any one venture 
 to assert that this condition was brought about by the in- 
 dustry and frugality of the people thus monopolizing the 
 greater part of the products of the labor of a nation of 
 thirty-nine millions, or by the thrift and self-denial of their 
 ancestors ? 
 
 It may be asserted without fear of successful contradic- 
 tion that only an infinitesimal part of the vast aggregates 
 of wealth and credits which bring returns to their owners 
 is entitled to be treated with the consideration which most 
 economists urge should be shown to capital because it rep- 
 
 ♦Baxter, Taxation of the United Kingdom, p. 64.
 
 412 PROTECTION AND PROGRESS 
 
 resents a self-denial which enables the world to continue 
 the process of production. The great mass of accumula- 
 tions, whether they are in the form of real wealth or 
 potential credits, which, under the system we are treating 
 of, command labor and its fruits as readily as wealth itself, 
 is merely the sum total of extortions, excessive profits and 
 the result of the savings of persons whose wants are always 
 filled to the point of satiety. 
 
 This being the case, it is worse than a blunder to arg^ie 
 that all consumers are on the same plane and that reduc- 
 tions in the prices of articles inure to the general benefit, 
 because it ignores the patent fact that all the potential 
 capital of the world is affected by the reductions and that 
 its owners profit more by the appreciation of the value of 
 its earnings than they lose by the fall in the rate of interest 
 which in some cases accompanies a diminution of returns 
 to producers. 
 
 We are sometimes reminded that a John Jacob Astor, a 
 William Vanderbilt or a Duke of Westminster can only con- 
 sume so much flour and meat, and we are asked to believe 
 that because this is true the owners of vast fortunes receive 
 no more benefit from the fall of prices than other consum- 
 ers. But the fatal flaw in this argument is the fact that a 
 diminishing cost of production constantly tends to increase 
 the wealth of those who already possess more than enough 
 to satisfy their wants, and concurrently curtails the oppor- 
 tunity of those who are compelled to toil in order to obtain 
 enough to keep body and soul together. 
 
 In an article on "The Economic Cause of Unemploy- 
 ment" by J. A. Hobson, published in the Contemporary 
 Review of May, 1895, the writer discusses at some length 
 the subject of automatic saving, which he claims "upsets 
 the balance between consumption and producing power." 
 The eflFect, he declares, is overcapitalization, which results 
 in the displacing of capital already in existence and its prac- 
 tical destruction. He describes the process in this manner:
 
 CONSUMERS 413 
 
 "A large part of the power to consume is in the hands 
 of those who have not the desire to consume. What, then, 
 do these men desire to do? They desire to save. But 
 saving, if we look behind the operation of putting money 
 in a bank, means paying labor to set up plants, machinery 
 and other material forms of capital. But does not this give 
 as much employment to capital and labor as the same power 
 used to demand consumables? Quite true, the 'saving' 
 which employs labor to build a factory and stock it with 
 machinery will cause as much employment as the same 
 amount of spending, though not more employment, as J. S. 
 Mill sought to maintain. Moreover, in the one case when 
 the money is 'spent' there is nothing to show for it ; in the 
 other case there is a factory and machinery. 
 
 "But when our theoretic friend goes on to assume that 
 the factory can be profitably worked, and that the work 
 it affords signifies a net increase of both labor and capital, 
 he jumps to a conclusion which is quite unwarranted. It 
 can only be profitably worked on one of two supposi- 
 tions. It may by successful competition obtain the orders 
 which would have gone to another factory, ousting from 
 employment the capital and labor there engaged. In this 
 case it is clear no net increase of employment has taken 
 place. An individual has made good his 'saving,' but has 
 done so by negativing the previous saving of some one else ; 
 the productive power of the community is increased, but 
 no more actual production than before is brought about. 
 The other supposition is that the demand for the class of 
 commodities which the factory makes will be greater in 
 the future, and that therefore more capital and labor can 
 be employed in the trade. 
 
 "So far as this supposition in valuable, the 'saving' is 
 socially useful, and, indeed, necessary; but it should be 
 plainly recognized that the dependence of capital and labor 
 for employment on a rising standard of consumption places 
 an absolute limit upon socially useful saving. An individual
 
 414 PROTECTION AND PROGRliSS 
 
 may save atiy proportion of his income, provided lie can 
 induce others to spend their income and give him Hens upon 
 their present property or future production. But the pro- 
 portion of a community's income which it can save and 
 usefully store up in plant, machinery and other forms of 
 capital is strictly limited by the rate of current or pros- 
 pective consumption. Only a very small proportion of 
 'saving' can profitably be invested in forms of capital that 
 fructify in the distant future; the currently or immediately 
 prospective rate of consumption determine pretty closely 
 the proportion of current income which can be usefully 
 saved. 
 
 "Our saving class are therefore not necessarily causing 
 an increase of 'employment' by paying workers to put up 
 more factories instead of using their moneys to demand 
 consumables. So long as the 'saving' is actually in progress 
 — i. e., so long as the factory and machinery are being 
 made — the net employment of the community is just as 
 large as if the money were spent to demand commodities ; 
 more labor is engaged in making factories, less in working 
 them. But after the new factories are made they can only 
 be worked on condition that there is an increase of con- 
 sumption correspondent to the increase of producing 
 power — i. e., on condition that a sufficient number of per- 
 sons are actuated by motives different from those which 
 animated the 'saving' class, and will consent to give validity 
 to their saving by 'spending' on commodities an increased 
 proportion of their incomes. Where no such expectation is 
 realized an attempt to operate the new factories does not 
 give any net increase of employment ; it only gluts the mar- 
 kets, drives down prices, closes the weaker factories, im- 
 parts irregularity to work and generally disorganizes trade. 
 
 "The frequent recurrence of these phenomena in most 
 departments of trade is the strongest presumptive evidence 
 of an attempt of the capitalist classes to place and operate 
 more capital than is required to maintain the current flow
 
 CONSUMERS 415 
 
 of consumption. An individual may be a rich miser; a 
 community cannot. To the average reasonable man it is a 
 self-evident fact that a community cannot advantageously 
 save more than a certain proportion of its annual income 
 unless for the express purpose of consuming a larger pro- 
 portion at some distant date. The economist is, however, 
 too often blinded by the acceptance of a strange sophism 
 to the effect that 'saving' implies no reduction in current 
 consumption, a wild notion which is due to a failure to 
 analyze the process of saving. * * * 
 
 "This simple truth that real saving implies diminished 
 consumption is the kernel of a true understanding of the 
 unemployed question. If we find labor and capital unem- 
 ployed in our manufactures, if we find them wastefully em- 
 ployed in our distributing industry, it can only mean an 
 undue diminution of consumption, or, in other words, an 
 attempt to establish as 'savings' a larger number of forms of 
 capital than are economically required to assist in main- 
 taining current or prospective consumption."* 
 
 The writer of the above explains that he does not plead 
 for conservatism in industry or for the rejection of new 
 and improved forms of machinery and method, but that he 
 merely protests "against the waste of the wrecking policy 
 in modern commerce, by which old businesses are ruined by 
 the speculative operation of new competitors who bring 
 with them no intrinsic superiority of production sufficient 
 to compensate the destruction of capital value and the dis- 
 turbance of employment which they cause." 
 
 His remedy for the evil which he describes at such 
 length, and the existence of which will not be seriously 
 questioned by any competent writer or thinker, is progres- 
 sive taxation. Such a suggestion naturally la}s him open 
 to the charge of socialistic tendencies, but that is something 
 
 ♦Hobson, Economic Causes of Unemployment, Contemporary, May, 
 1895.
 
 4i6 PROTECTION AND PROGRESS 
 
 to which the most extreme advocates of laisse:: faire are also 
 obnoxious. The writings of J. S. Mill, Herbert Spencer, 
 J. Thorold Rogers and other economists of standing whose 
 names will suggest themselves to all students of economics 
 abound in matter which may easily lead to the inference 
 that they favor state regulation, although they advocate 
 unrestrained competition. 
 
 It is quite evident that the theories of political economists 
 will never be received with respect by the masses if they 
 shrink from honestly stating their conclusions either 
 through fear of adverse criticism or because they cannot 
 determine what the consequences might be if other methods 
 than those now in vogue were resorted to by those who 
 control the destinies of nations. There is no doubt that 
 the latter consideration is the restraining one with mo.>t 
 writers. I am disposed to admit its influence and to confess 
 that it may be wiser to bear the ills we have than to fly to 
 those we know not of, but I do not believe that any doubts 
 of this kind which I may feel should restrain me from stat- 
 ing facts, and am profoundly convinced that it would be in 
 the nature of a crime to attempt to demonstrate that a 
 system which is undoubtedly working illy is the best one 
 attainable. 
 
 That this is the conscious or unconscious aim of all 
 adherents of laisses faire is obvious. Their effort to prove 
 that the producer and the non-producer are affected alike 
 by the phenomena they discuss is a confession of weakness, 
 for attempts to place all consumers on the same plane in- 
 evitably disclose that the assumed resemblance does not 
 exist, and that in reality the interests of the two classes 
 are diametrically opposed. The sooner this is recognized 
 the better for mankind, for while the world is taught to 
 believe that all consumers are equally benefited by the oper- 
 ations of unrestrained competition no serious disposition 
 to correct the excesses of the capitalistic system will arise. 
 
 Until economists cease to teach that the producer who
 
 CONSUMERS 417 
 
 is compelled to work at a loss is a gainer by the sacrifices 
 he makes, because other producers are also forced to do 
 without profit, there will be a tacit consent to the practice of 
 all kinds of villainy which masquerade under the name of 
 trade operations. There can never be a healthy readjust- 
 ment of the relations between employer and employed so 
 long as the idea prevails that no evil results can flow from 
 overproduction resulting from the attempt to employ fresh 
 capital when that already engaged more than suffices to 
 meet requirements. 
 
 The writer appreciates the difficulties that suggest them- 
 selves when the question is asked : What can be done to 
 prevent overproduction? At once a host of other questions 
 arise and demand an answer. If an attempt is made to 
 limit production what assurance have we that it will not 
 result in depriving us of the benefits of inventiveness ? Are 
 we to do away with automatic machinery because it pro- 
 duces so rapidly that its output is in excess of the effective 
 demand? Must we maintain the plants of machinery al- 
 ready in existence if ingenious inventors devise new ma- 
 chines which do the work more effectively? Should we 
 forbid the construction of rival railroads if there is ground 
 for the belief that those already in existence are capable of 
 doing the work required of them? Ought we to prohibit 
 forestalling and close up all the exchanges that deal in 
 "futures"? Ought we to arrest the growing tendency to 
 eliminate the middleman which the creation of great de- 
 partment stores exhibits? Shall we deliberately say to 
 those who propose to effect great economies in production 
 by manufacturing on an enormous scale that they must not 
 do so, because the result of their efforts, if successful, will 
 be to drive out of business a large number of small pro- 
 ducers ? 
 
 These and a score of other equally pertinent and diffi- 
 cult questions demand an answer. The socialists prefer to 
 find nothing troublesome in such queries. They have
 
 4i8 PROTECTION AND PROGRESS 
 
 sweepingly answered all of them in the affirmative. They 
 declare that competition is necessarily subject to the abuses 
 complained of and refuse to recognize that it can be regu- 
 lated advantageously. The advocates of laissez [aire, on 
 the other hand, unvveariedly devote themselves to attempts 
 to square their theory that the effects of unrestrained com- 
 petition must necessarily be beneficial v^ith the practical 
 working of the existing system, which is attended with so 
 many drawbacks that conservative writers of their own 
 school contemplating them speak of the possibilities of a 
 social revolution. 
 
 Between such extreme views a middle ground ought to 
 be found. It cannot be possible that competition has no 
 merits. Even the socialists who sweepingly condemn the 
 abuses to which the system has been subjected are com- 
 pelled, whenever they attempt to be constructive, to suggest 
 some method to stimulate exertion and prevent inertia. If 
 the men wh'o are devoting themselves to the work of invent- 
 ing fantastic plans to regenerate society would employ their 
 abilities in teaching the people that in a country with demo- 
 cratic institutions most of the abuses of which they com- 
 plain are capable of being remedied by ordinary processes, 
 instead of preaching a crusade against all existing social 
 conditions, they might accomplish their purpose without 
 plunging the vvorld into turmoil. 
 
 It will be admitted, however, that very little progress 
 in the direction of a better understanding of these matters 
 can be reached so long as the doctors differ so radically 
 respecting the cause of the trouble and the remedies to 
 be applied. We are told by one set of would-be reformers — 
 the followers of Kenry George — that all the evils of modern 
 society are due to the private ownership of land, and that 
 the remedy is the virtual extinction of all private titles to 
 land by a process of taxation. It will be conceded by all 
 who have given attention to the subject that land monopoly 
 is an evil, but there are many who are ready to admit this
 
 CONSUMERS 419 
 
 much who contend that the holding of land in common 
 would prove an insuperable barrier to progress, and that 
 no tenure, no matter how secure, would serve to keep the 
 world's agricultural land from wearing out, or bring in- 
 ferior soil under cultivation, but that which guarantees to 
 man a title in perpetuity. 
 
 That there is some foundation for this latter assump- 
 tion will be readily inferred from a consideration of the 
 experience of the ancient Egyptians, who, although nom- 
 inal owners of the land, were subjected to such conditions 
 that the state practically controlled the output. The result 
 was the "full belly" which has been previously referred 
 to, because the state recognized its obligation to the working 
 masses and took care to guard them against the forestaller. 
 But how far the system was responsible for that curious 
 attitude of opposition to foreigners which took the extreme 
 form of refusing to trade with them it would be difficult 
 to state. 
 
 We are told that "Egyptian corn was not sent out of 
 the country to buy foreign luxuries or articles of ostenta- 
 tion for which the demand could be indefinitely increased 
 so as to swallow up the accumulations of the rich ; neither 
 was th^ demand for laborers limited by the power of the 
 capitalist to drive a remunerative trade in the produce of 
 their work. Practically the whole of the hoarded food was 
 spent in maintaining the 'eater of rations,' and as in no 
 case did they expect or receive more than a maintenance 
 they submitted without any sense of injury to the regime 
 which caused the spare labor of the community (i. e., their 
 own) to be spent in erecting royal monuments, private 
 tombs, temples of the gods, and in maintaining officers. 
 priests and sacred animals, instead of raising the general 
 standard of luxury."* 
 
 Henry George and other extreme opponents of the pri- 
 
 *Simcox, Primitive Civilizations. Vol. I. p. 70.
 
 420 TROTECTION AND PROGRESS 
 
 vatc ownership of land have strongly inveighed against tlie 
 protection policy on the ground that it would have a tend- 
 ency to rear a barrier about the country resorting to it 
 which would retard its progress, but there is grave reason 
 for believing that the adoption of the plan of taxation which 
 he advocates would certainly accomplish this undesirable 
 result. It is hardly necessary to controvert George's error 
 by reproducing the evidence which conclusively establishes 
 the error of free trade contention that protection results 
 in cutting off intercourse between nations. The tremen- 
 dous increase of the external trade of such protective na- 
 tions as the United States, Germany and France shows 
 that the policy of encouraging home industry has no such 
 effect, but, on the contrary, by greatly enlarging the re- 
 sources of the protected people their surplus of wealth is 
 increased and they have more to offer in exchange for 
 articles which they cannot themselves produce. This has 
 certainly been the experience of the United States and Ger- 
 many, and it is likely that it will be repeated by Russia, 
 which country, as has been shown, under the influence of 
 laws calculated to promote domestic manufactures and in- 
 dustry of all kinds, is making rapid advances and concur- 
 rently developing a great external trade. 
 
 But we may well ask what might be the case if the 
 mooted proposition to nationalize the land should be carried 
 into execution in this country? We are aware that Henry 
 George's disciples deny that the effect of the single tax 
 would do more than cause the transference of the unearned 
 increment of land to the state, but it seems logical to con- 
 clude that any system which could be devised to take the 
 place of private ownership would involve the corrollary of 
 state aid to those who were unable to secure a sufficient 
 quantity of land to maintain them, or who failed to earn a 
 livelihood by the practice of other than agricultural call- 
 ings. 
 
 It is contended by the advocates of the single tax that
 
 CONSUMERS 421 
 
 the inevitable result of the destruction of private ownership 
 would mend affairs so thoroughly that neither of the con- 
 tingencies mentioned could occur and that there would 
 always be land in plenty for all who desired it, and that 
 those who did not desire land would have no difficulty in 
 finding work suited to their hands and capacity which would 
 earn their subsistence and maintain them in comfort. But 
 there is reason to distrust the soundness of this view. If 
 it were true that the ability to acquire land with ease were 
 a perfect barrier against penury and want we would not be 
 confronted with scores of instances in the history of our 
 own country of the people being plunged in poverty and 
 wretchedness when millions of unused acres were freely 
 accessible to them. It is a delusion shared alike by the fol- 
 lowers of Henry George and the free trader that material 
 prosperity is a necessary resultant of the ability of the peo- 
 ple to easily acquire unoccupied land. But the severest busi- 
 ness depressions in the United States, with their accompa- 
 nying soup houses and increased pauperism, were 
 experienced during periods when the best of land could 
 be had for the taking. There is no doubt that without land, 
 or the ability to command its products, there can be no 
 material prosperity, but it is equally certain that free land 
 may exist in abundance, as it still does in many countries, 
 without giving an impulse to progress. 
 
 That man could not exist without land is so apparent 
 that it seems strange that writers should take the trouble 
 to adduce arguments to support the contention that there 
 could be no progress without it. It does not follow, how- 
 ever, that because there is free land in abundance there 
 must be prosperity; nor is there any foundation for the 
 assumption that free access to land would bring about a 
 better condition of affairs than we find existing in progres- 
 sive countries to-day unless some means should be adopted 
 to prevent the absorption of the unearned increment from 
 other sources than land.
 
 422 PROTECTION AND PROGRESS 
 
 If we turn to the annals of a country where the monopo- 
 lization of the soil by a few individuals has been carried 
 to a greater extent than in any other we find that during 
 the period when much of the land was common there was 
 comparatively little progress. In Rogers' justly esteemed 
 review of English work and wages during six centuries we 
 find abundant proof that England was at a standstill when 
 the opportunity to procure land was easiest. It is true 
 that the author was convinced that "the grinding, hopeless 
 poverty under which existence may be just continued, but 
 when nothing is won beyond bare existence, did not char- 
 acterize or even belong to (English) mediaeval life,"''' but 
 he is compelled to make plain the fact that the exemption 
 to which he refers was due in large part to an agency closely 
 resembling that of the state. The religious institutions, 
 whose absorption of the land during the period in question 
 was its most characteristic feature, no matter what abuses 
 may have accompanied their administration, systematically 
 extended a helping hand to the poor. As in ancient Egypt, 
 they recognized the obligation of the land owner to inter- 
 vene between the people and starvation, and the records in- 
 dicate that they were frequently called upon to exercise the 
 function of ration provider, although most of the time the 
 price of provisions, as shown by contemporary documents 
 still extant, was so low it seems incredible that want could 
 have existed unless as the result of extreme improvidence. 
 
 That improvidence was induced by the abundance of 
 free land during the Middle Ages there seems no doubt. 
 Rogers tells us that "at an early period it was recognized 
 that land held in severalty was worth 25 per cent, more 
 than land of equal quality held in the lammas field ; and 
 that when such distributions and assignments were made 
 the land was found to be far more serviceable." t The only 
 
 * Rogers, Six Centuries of Work and Wages, p. 415. 
 ■j-Ibid, p. 444.
 
 CONSUMERS 423 
 
 inference that can be fairly drawn from this is that the 
 individual cultivator of lammas land, no matter how care- 
 fully guarded his rights may have been, could not be in- 
 duced to give it the care calculated to produce the same 
 results that he would have made it yield had he owned it 
 absolutely. The fact that after lammas tide the land became 
 common for pasturage operated as a bar to improvement. 
 
 This probably explains the backwardness of English 
 agriculture until the seventeenth century, when the Holland- 
 ers taught the British farmer how to use his land and obtain 
 adequate results from it. Rogers says : "We owe the im- 
 provements in English agriculture to Holland. From that 
 country we borrowed at the beginning of the seventeenth 
 century the cultivation of winter roots, and at that of the 
 eighteenth century the artificial grasses. The Dutch had 
 practiced agriculture with the patient and minute industry 
 of market gardeners. They had tried successfully to culti- 
 vate everything to the uttermost which could be used for 
 human food, or could give innocent gratification to a refined 
 taste. They taught agriculture and they taught gardening. 
 They were the first people to surround their homesteads 
 with flower beds, with groves, with trim parterres, with the 
 finest turf, to improve fruit trees, to seek out and perfect 
 edible roots and herbs, at once for man and cattle. We owe 
 to the Dutch that scurvy and leprosy have been banished 
 from England, that continuous crops have taken the place 
 of barren fallows, that the true relation of crops has been 
 discovered and perfected, that the population of these islands 
 has been increased and that the cattle and sheep are ten 
 times what they were in number and three times what they 
 were in size and quality."* 
 
 When we inquire why the Dutch happened to be so 
 far in advance of the English we learn several important 
 facts, all of which greatly militate against the theory that 
 
 ♦Rogers. Six Centuries of Work and Wages, p 453.
 
 424 PROTECTION AND PROGRESS 
 
 common ownership of land is either advisable or necessary 
 to secure good results for mankind. Foremost we find that 
 the Roman idea of property right in land existed in Hol- 
 land when the British isles were inhabited by a people little 
 better than savages. "In Holland," says an American 
 writer, "all property, both real and personal, of persons 
 dying intestate, except land held by feudal tenure, was 
 equally divided among the children by an act passed by the 
 states in 1580. This act also contained a further enlight- 
 ened provision, copied from Rome and since adopted in 
 other continental countries, which prohibited parents from 
 disinheriting their children except for certain specified of- 
 fenses. Under this system it became customary for parents 
 to divide their property by will equally among their chil- 
 dren, just as the custom of leaving all the property to th'? 
 eldest son grew up under the laws of England."* 
 
 Here we have one secret of Dutch agricultural progress : 
 The complete recognition of land as property having essen- 
 tially the same characteristics as other property, and when 
 we investigate further we discover that every effort was 
 made to cause the transference of land to be made as easy 
 as that of its products. The machinery of transfer was 
 simplified and alienations of real estate were facilitated. A 
 comprehensive system of recording was adopted which be- 
 came general throughout the Netherlands and which was 
 afterwards extended by the States, or legislature of Holland, 
 so as to cover all instruments affecting land, requiring them 
 to be registered in order to give them validity. 
 
 Although the British were quick to imitate the Hol- 
 landers in other particulars they refused to borrow this 
 important device, because the land owners, the aristocratic 
 classes, plainly foresaw that to make the alienation of land 
 easy might prove destructive to their importance as landed 
 
 ♦Campbell, The Puritan in Holland, England and America, Vol. II, 
 p. 452.
 
 CONSUMERS 425 
 
 proprietors. Hence the possession of land came to be re- 
 garded by Englishmen as a badge of consequence and the 
 aim was to secure as much of it as possible, not alone for the 
 purpose of increasing the revenues of the proprietors, but 
 to enhance their social or political condition. The conse- 
 quence was that ignorance and stupidity prevailed in agri- 
 cultural matters in England, while intellect and ingenuity 
 were developing the art of farming in Holland to such an 
 extent that the practices of the Dutch were being imitated 
 in all countries where enough enterprise existed to prompt 
 attempts at improvement. 
 
 Had the system which was perfected in Holland by 
 Charles V. prevailed in England it would not have been 
 necessary for Rogers to have made the acknowledgment of 
 British indebtedness to the Dutch noted above. It is im- 
 possible to believe that the development of the manufactur- 
 ing industry which began as early as the reign of Edward 
 in. would not have stimulated agricultural improvement 
 if the laws of the country had assisted small owners to se- 
 cure tracts of land without difficulty. The absence of such 
 facilities was fatal to progress. There was no inducement 
 for small occupiers to improve the lammas land, and the 
 large proprietors, who held under a more secure tenure, 
 were too much absorbed in working out their schemes of 
 political and social advancement to think of such sordid 
 matters as the creation of new foods. 
 
 When English agriculture began to make progress it 
 became the fad for gentlemen proprietors to improve their 
 estates, and no doubt their efforts, although in many in- 
 stances misdirected and unprofitable, contributed largely 
 to the advances which marked British farming during the 
 seventeenth century. But this progress, as noted by Rogers, 
 "was accompanied by a marked depression in the laborer's 
 condition," and he attributes it, by indirection at least, to 
 the fact that there was too much land in cultivation and too 
 little capital to cultivate it with. This latter drawback
 
 426 PROTECTION AND PROGRESS 
 
 reduced the tenant farmer to the necessity of squeezing his 
 employes in order to make ends meet; the main trouble, 
 however, was due to the fact that the landlord demanded 
 more than the lion's share and did all he could to repress 
 improvement by his extortions. 
 
 In spite of this tendency to squeeze it was noted that 
 the abandonment of the communal system tended to im- 
 provement. A writer quoted by Rogers says "an acre of 
 enclosed land is better than four acres in common," and his 
 comments show that the result of enclosing was to promote 
 improvements which enormously increased production. He 
 says : "A load of pigeon dung exchanged for a load of coals 
 and carried sixteen miles, though it would have done harm 
 where it came from, would confer a double value on the 
 land where it was put. I have seen," he said, "a hundred 
 Toads of earth sold at Hampstead at one shilling a load and 
 carried three or four miles to higher ground, and with great 
 advantage. I have known meadow land so improved by 
 irrigation that though it was worth only ten shillings a year 
 it has grown £io worth of hay in a dry season, and I have 
 seen land near London on which irrigation at the cost of a 
 shilling has raised the value by a pound." This astute ob- 
 server inferred that all the land must have once been sea and 
 that all valleys have at some time been channeled by water.* 
 
 Testimony such as this carries conviction that some 
 stronger incentive than the mere desire for subsistence is 
 necessary to . induce men to compel the earth to yield its 
 best results. The history of English agriculture seems to 
 demonstrate conclusively that land in abundance will not 
 promote prosperity if it is no man's land, and it also raises 
 a doubt whether the assumption that it is always a natural 
 boon is not a far fetched one. There are regions where 
 man needs but scatter the seeds in the soil to get returns, but 
 
 ♦Platte'.s Gabriel, 1638; quoted by Rogers in Six Centuries of Work 
 and Wages, p. 458.
 
 CONSUMERS 427 
 
 there are other places where as much preparation of the land 
 is required for agricultural purposes as though it did not 
 exist. Indeed, the Hollanders, from whom the English 
 have copied so liberally, wrested much of their best land 
 from the sea, and in England there exist to-day millions of 
 acres which would be worthless for purposes of cultivation 
 if they had not been recovered from niggard nature by such 
 means as those described above. 
 
 In 1649 another author on husbandry quoted by Rogers 
 wrote : "If a tenant be at ever so great pains or cost for 
 the improvement of his land he doth thereby but occasion 
 a great rack upon himself, or else invests his landlord with 
 his cost and labor gratis, or, at best, lies at his landlord's 
 mercy for requital, which occasions a neglect of good hus- 
 bandry to his own, the land, the landlord and the Kingdom's 
 suffering. Now this I humbly conceive may be removed if 
 there were a law enacted whereby every landlord should be 
 obliged either to give him reasonable allowance for his 
 clear improvement or else suffer him or his to enjoy it so 
 much longer as till he hath had a proportionate requital."* 
 
 The English are a slow moving people, and it took then^. 
 nearly two centuries and a half to act on this suggestion, 
 and then they only did so in that part of the United King- 
 dom threatened with insurrection. It is obvious, however, 
 that the remedy is only a partial one, and that nothing 
 short of the adoption of a system which will tend to the 
 dispersion of large holdings of land will suffice to call into 
 play that individual desire for gain which has done so 
 much to promote the progress of the arts and sciences. 
 
 It is not contended here that private ownership of land 
 when the ability to monopolize it exists can prove beneficial, 
 but that its division into moderate parcels, owned by men 
 who will absolutely enjoy all the fruits of the improvements 
 they make, must necessarily be so. Experience demon- 
 
 ♦Rogers. Six Centuries of Work and Wages, p. 458.
 
 428 PROTECTION AND PROGRESS 
 
 strates that this is the case just as surely as it has been 
 demonstrated in all times and in all countries that every 
 man's land is no man's land. 
 
 It is true that the author whose pages we have so freely 
 drawn upon may be differently interpreted. He tells us 
 that the agricultural laborer was better conditioned several 
 centuries ago in England than he was at the beginning of 
 the nineteenth century, but his elaborate efforts to show 
 this by quoting prices and wages are discredited by other 
 circumstances to which he directs attention. He says for 
 example that "during the seventeenth century the popula- 
 tion of England had doubled. It could not have been more 
 than two and a half millions at the conclusion of Elizabeth's 
 reign ; it was nearly five and a half at the accession of 
 Anne."* Elsewhere he remarks : "From another point of 
 view, and that by far the most accurate and exact, the rela- 
 tive position of the workman was one of far more hope and 
 far more plenty in the days of the Plantagenets than it has 
 been in those of the house of Hanover; that wages were, 
 relative to their purchasing power, far higher, and the en- 
 joyable income over necessary expenditure was in conse- 
 quence far wider."t 
 
 These two statements seem opposed to each other. The 
 conclusion reached is certainly at variance with the com- 
 monly accepted belief that a stationary population is not 
 an indication of great material prosperity. During the two 
 centuries and a half (1154 to 1399) embraced in the reigns 
 of the Plantagenets population did not increase and there 
 was plenty of discontent, facts which do not harmonize with 
 the theory that the people of England were enjoying an 
 abundance of the fruits of the land. 
 
 It is not difficult to assent to the idea advanced by 
 Rogers in another connection that material prosperity is 
 
 * Rogers, Six Centuries of Work and Wages, p. 463. 
 ■(■Ibid, p. 490-
 
 CONSUMERS 429 
 
 frequently the mainspring of political dissatisfaction and 
 that it has a tendency to promote religious reformation, but 
 no one will be inclined to regard the outbreak in England in 
 1381 as the result of overflowing granaries and low prices. 
 Rogers tells us that "the years which preceded the Peasants' 
 War in England were times of high wages and low prices." 
 That "the means of life were abundant, the earnings of the 
 laborer exceptionally great," and that "the teachings of the 
 poor priests were addressed to men whose prospects were 
 far higher than those of their fathers, whose opportunities 
 were greater and more immediate than those of their remote 
 descendants."* 
 
 We suspect that this view is as fallacious as many more 
 to which the distinguished author has readily subscribed 
 and that there is absolutely no foundation for his oft re- 
 peated opinion that the English laborer in the Middle Ages 
 was a comparatively happy creature, whose nom^inal wages, 
 though low, had an extraordinary purchasing power which 
 gave him a greater command over the necessaries of life 
 than that enjoyed by his toiling successors. 
 
 There was no one more prone than Rogers to unspar- 
 ingly condemn the practice of drawing far-fetched infer- 
 ences from statistics, but there is not extant a more glaring 
 instance of this propensity than is furnished by him in his 
 attempt to make it appear that the cheapness of the Middle 
 Ages was an unmixed blessing. His citations from the 
 rolls of bailiflfs, which show relatively high wages and phe- 
 nomenally low prices, he presents as conclusive evidence of 
 the conditions he describes, but he spoils his picture by the 
 admission of the historical fact that the classes he describes 
 as happy were in a constant state of opposition to their 
 employers and were conspiring to overturn the existing 
 society in order to establish a communal method of govern- 
 ment It is difficult to reconcile the conclusion that the 
 
 ♦Rogers, Six Centuries of Work and Wages, p. 271,
 
 430 PROTECTION AND PROGRESS 
 
 laborers and artisans of the Plantagenet period had reason 
 to be satisfied with their lot with the statement that com- 
 binations were formed by the peasants to protect themselves 
 against the aggressions of the landlords which took the 
 form of regulating wages by law. 
 
 We may discern in this effort to demonstrate that the 
 worker in the Middle Ages was happy a vain attempt to 
 bolster the theory that "wages have always increased abso- 
 lutely, i. e., in their money amount, and relatively, i. e., in 
 their purchasing power, when prices were low."* The 
 purpose is to convince the laboring classes of to-day that 
 their truest interest would be forwarded by adhering to 
 the policy which elevates the consumer to the first place in 
 economics, without asking whether he contributes anything 
 to the general stock of wealth or is entitled for any reason 
 whatever to share in the advantages which flow from the 
 adoption of labor-saving appliances and other improved 
 methods of production. 
 
 If the reader of these pages who happens to be familiar 
 with the writings of Rogers thinks that I quote him too 
 freely or go to extremes in pointing out the contradictions 
 in which he has involved himself in his endeavor to defend 
 the theories of the Cobdenites, I beg him to remember 
 that I have stated that Rogers, as the foremost champion of 
 free trade, is the proper target of a protectionist, and that 
 his writings have been freely used because his habit of ex- 
 nressing himself dogmatically makes it easy for an oppo- 
 nent, by quoting him, to show the inconsistencies of the 
 followers of the Manchester school. 
 
 Although an extreme advocate of laisses faire, Rogers 
 did not hesitate to say that "employers will get labor cheap 
 if they can ; it is the business of the state," he declares, 
 "to prevent them getting it so cheaply that they imperil 
 the future of the race by the process ; and it is the business 
 
 *Rogers, Six Centuries of Work and Wages, p. 527.
 
 CONSUMERS. 431 
 
 of particular crafts of workmen to sell their labor at as 
 good a price as they can."* Now, this is most excellent 
 protectionist doctrine and is lived up to in all countries 
 where the tariff is adjusted with the sole view of equalizing 
 labor conditions in different countries. But it is impossible 
 to reconcile this advice to the laboring man to combine 
 in order to raise wages, and incidentally prices, with Cob- 
 denite theories, and the attitude Rogers here assumes to- 
 wards the middleman seems to be as hostile to the teachings 
 of the Manchester school extremists as it is fatal to the 
 assumption that scarcity of land is the source of modern 
 economic troubles. 
 
 Speaking of the now generally recognized vice of the 
 multiplication of middlemen, Rogers says : "There is a 
 superstition among old-fashioned economists that all parties 
 are the better for the middleman. Experience is gradually 
 proving that the abstract theory is incorrect. Hence, under 
 competition producers are getting rid of the middleman, and 
 the modern economist who studies the facts instead of spin- 
 ning theories and dilating on tendencies is beginning to 
 prove that he is generally a nuisance. Now that a man who 
 wins more food from the earth is more useful than one who 
 wins more food from somebody else's labor without offering 
 anything solidly desirable for his function needs no proof. 
 If you can entirely get rid of the middleman, all the better ; 
 if you cannot, it is an economy, which even he can hardly 
 dispute, to narrow his functions and curtail his profits."! 
 
 The reader will not have overlooked the fact that in 
 another connection Rogers gave expression to the view that 
 the vice he complains of might be eradicated by the tendency 
 towards combination, which, in defiance of laisse:: faire 
 ideas, he thought would be desirable because of its pro- 
 pensity to eliminate the middleman. In discussing the 
 
 ♦Rogers, Six Centuries of Work and Wages, p. 528. 
 flbid, p. 475.
 
 432 PROTECTION AND PROGRESS 
 
 Middle Age attempt to regulate prices he remarked : "Even 
 now it is doubtful whether competition is of universal effi- 
 cacy, and whether it is not more correct to say that where 
 combination is possible competition is inoperative. Hence, 
 we subject some callings to regulated prices, and it may be 
 doubted whether the progress of opinion will not hereafter 
 enlarge the area of regulated prices. Still the inclination 
 of people is as yet to let prices find their level by competition 
 in every case where distinct proof is not given that such a 
 concession would be unsafe or unfair."* 
 
 Here is a clear case of indecision, which is pardonable, 
 for the subject is one which cannot be decided out of hand, 
 and one which may call for much more experience before 
 we can fairly make up our minds. But there is no ground 
 for Rogers' assumption that it is "the inclination of people 
 to let prices find their level by competition where distinct 
 proof is not given that such a concession would be unsafe 
 or unfair." Unless the free trade champion assumes that 
 the only people to be considered in the discussion of eco- 
 nomic questions are those of Great Britain it will be ad- 
 mitted that the tendency is the reverse and that there is no 
 universal disposition to permit unrestrained competition. 
 The people of the United States and of the whole continent 
 of Europe are well agreed that unrestrained competition 
 would be injurious to national development and they have 
 rejected the policy of Cobden ; and it may be added that in 
 this country a pronounced disposition exists to regulate the 
 growing tendency to combine, which may be regarded as the 
 natural development of the competitive process. 
 
 Rogers recognizes the economic possibilities of com- 
 binations, and even assumes that they may be beneficial, but 
 he has been careful to formulate a theory that the main- 
 tenance of a pernicious trust for any considerable period is 
 impossible. He argues that the attempt to elevate prices 
 
 *Rogers, Six Centuries of Work and Wages, p. 139.
 
 CONSUMERS. 433 
 
 above the level which they would have if competition were 
 permitted free play must fail, because it would be the signal 
 for fresh capital to enter the lists and seek to divide the 
 profits, and thus compel the restoration of normal condi- 
 tions. But experience in this country has demonstated 
 that this is not true. The history of the iron and steel 
 trust shows that so long as prosperity reigned in the United 
 States the trust was able to maintain prices by the simple 
 device of absorbing all would-be competitors, and that dis- 
 solution only followed when consumption had fallen off to 
 such an extent that the members of the pool could not agree 
 as to the shares of business to which they were respectively 
 entitled. As soon as the consumptive ability of the Ameri- 
 can people reasserted itself the members of the temporarily 
 disbanded combine began to approach each other, and at the 
 present time of writing (August, 1898) the signs of a 
 complete agreement and a restoration of the old monopoly 
 are multiplying.* 
 
 It was because Rogers recognized that combinations 
 are enabled by effective organization and improved proc- 
 esses of production to greatly cheapen products that he 
 was so easily induced to overlook the numerous evils they 
 must certainly bring in their train. The Cobdenite habit of 
 regarding cheapness as the great economic end warped his 
 judgment and prevented his seeing that, while trusts may 
 prove effective as an eliminator of a large class of middle- 
 men whose uselessness to society may be conceded, their 
 erection necessarily has the effect of multiplying the mem- 
 bers of another class who would find it as difficult to estab- 
 lish a claim to be maintained as the middleman whose 
 usefulness is open to question. But the subject has per- 
 plexities for others than the author of "Work and Wages." 
 We can all perceive the inutility of maintaining rows of 
 
 *The steel combination, which was broken by the depres-sion of 
 1893-97, was freshly entered into in 1S98, when prosperity set in and 
 prices, owing to a rapidly expanding consumption, were increasing. 
 28
 
 434 PROTECTION AND PROGRESS 
 
 stores on the same street devoted to the sale of the same 
 class of goods and may agree with Rogers that they might 
 be dispensed with, but when we ask who would be the 
 gainers by the change the answer does not come swiftly. 
 As matters stand at present there is doubt whether society 
 at large or merely an insignificant part of it would be bene- 
 fited by wiping out the superfluous middleman. 
 
 No one will dispute the force of a showing such as that 
 derived from the pages of "Work and Wages" in which the 
 low cost of building, the method of the builder and the ex- 
 cellence of his work in the Middle Ages is described and 
 attributed to the absence of the middleman. "I have already 
 stated," says Rogers, "that in the past which I have been 
 contrasting with the present the relation of employer and 
 employed was exceedingly direct ; nor do I doubt that it 
 was to this directness that the high remuneration of the 
 citizen was due. A church or a mansion was to be built, a 
 new wing or new offices to be added to a conventual house 
 or college. Perhaps the owner supplied the plans. If not, 
 the master mason knew how *to draw his plot,' and the 
 master carpenter his. Tlie employer bought all the raw 
 materials direct from the manufacturers and put them ready 
 for use on the spot. He could calculate within a very mod- 
 erate margin what the whole would cost and what would 
 be the charge of labor. 
 
 "In the building to which I have referred (Tower of 
 Rochester Castle) the cost of materials, on much of which 
 labor is expended, was £54 los 3^d ; of labor £73 os ^d ; 
 and the extras connected with the structure, but not im- 
 mediately associated with the labor and materials, £14 9s ^d. 
 Thus, in the aggregate charge, the cost of materials is 38.3 
 per cent.; that of labor 51.4 per cent; and of extras 10.3 
 per cent. The multiple of twelve would put this structure 
 at a cost of ;£ 1,703 12s 6d, from which should be deducted 
 the sale of certain cranes, worth, on the same estimate, £73 
 I2S, and therefore leaving i 1,630.
 
 CONSUMERS. 435 
 
 "Now I make no doubt that at the present day the tower 
 would cost from ^4,000 to £5,000, and I infer that the 
 additional cost would be entirely due to the charge of con- 
 tractors' profit, architect's commissions and middlemen's 
 advantages. It is upon the saving of this enormous waste 
 that the energies of the intelligent employer are directed, 
 and the advocates of increased wages for workmen should 
 be. When the economy is effected it will be found, con- 
 currently with another reduction of charge alluded to al- 
 ready, that workmen may get better wages and may be more 
 cheaply housed. It is assuredly from the stint of wages 
 that the profits of middlemen have been derived."* 
 
 We fancy that no one who is at all familiar with the 
 processes of modern trade will be greatly surprised by an 
 exposition such as this, which shows that the toll takers 
 from production in modern times make building cost fully 
 threefold what it did in the Middle Ages. An inquiry 
 into the actual working of the system of unlimited compe- 
 tition will develop that the influence of the middleman on 
 the cost of building does not stand as an isolated phenom- 
 enon. On the contrary, it can be easily shown that in nearly 
 every line of production the cost of the article produced is 
 enormously increased to the consumer by the exactions of 
 the middleman. But the free trader, whose eagerness for 
 cheapness makes him an advocate of unlimited and unre- 
 strained competition, tries to close his eyes to its drawbacks 
 and refuses to see that it aggravates the evil referred to. 
 
 The practice of overcapitalizing resorted to by pro- 
 moters of transportation companies and industrial enter- 
 prises is merely another form of this system of toll taking, 
 for it serves to enhance the cost of things consumed aS 
 effectually as the multiplication of middlemen. The process 
 is simply disguised by substituting the bond or stock holder 
 for the eliminated middleman. When, to illustrate, a rail- 
 
 *Rogers, Six Centuries of Work and Wages, p. 544.
 
 43^' PROTECTION AND PROGRESS 
 
 road is made to pay interest and dividends on a capitaliza- 
 tion three or four times as large as the real investment, the 
 excessive charges imposed on the consumer are as severely 
 felt as though they were drawn from them by middlemen. 
 
 If those who agree with Rogers that the middlemen are 
 taking the lion's share of the profits of modern production, 
 and that while they do so it must be impossible for the 
 workingman to greatly better his condition, would examine 
 the matter carefully they would speedily discover that com- 
 binations must intensify rather than abate the troubles of 
 the industrial classes. It does not require extraordinary 
 penetration to discover that the elimination of unnecessary 
 middlemen cannot be an economic gain if their places are 
 filled by owners of capital, who, by combining, can make 
 their investments yield greater returns than when they are 
 arrayed against each other. And it must be obvious that 
 the workers who are deprived of a chance to earn a liveli- 
 hood by the practice of economics inuring entirely to the 
 benefit of bond or stock holders would suffer greatly. The 
 wage earner who succeeded in retaining employment might 
 for a time receive better compensation ; but how about the 
 vast number that would necessarily be added to the sub- 
 merged class by the process of combination? Would they 
 be benefited by the change? Would the diminished cost of 
 production help them ? They would still be consumers, 
 those who did not starve, but cheap food and cheap articles 
 are dear to those who have not the wherewithal to buy them. 
 
 When we examine the figures which bear on the possible 
 consequences of the elimination of the mere toll gatherer 
 from production we are appalled at their significance. The 
 unnecessary middlemen are so numerous that to deprive 
 them of the opportunity to prey upon the producer might 
 force a revolution. Should they be compelled by means of 
 combinations to join the ranks of the submerged, driven 
 from employment by improved and automatic machinery, a 
 resort to state socialism would be the inevitable outcome.
 
 CONSUMERS. 437 
 
 A much quoted American writer has made an inquiry 
 into the possible results of dispensing with the superfluous 
 middleman by compiling the facts bearing on production 
 and distribution in the United States that are contained in 
 the census of 1880. He prefaces his introduction of the 
 figures with some remarks pertinent to the subject. "There 
 are," he says, "certain ethical problems which may come 
 into view to him who seeks to justify his own greater share 
 in the comforts of life. One question which a man may put 
 to himself might be : Does the occupation in which I am 
 engaged add to the mass of products which are needed in 
 general consumption more than is taken away by my own 
 consumption or by those among whom I spend my earn- 
 ings? Or even a deeper problem may sometimes arise of 
 an ethical nature. Does the work which each man performs 
 come within the line of useful service? Does it add to the 
 stock of useful products, or does it fall within the line of 
 baneful service and add to the stock of harmful products? 
 Is the demand for which this man provides the supply of 
 a kind which adds to the comfort of the community as a 
 whole, or is it one which tends toward want rather than 
 welfare? By the answer to these questions each man may 
 hereafter be judged in the court which supplements the 
 treatment of economic questions by the study of ethics."* 
 
 Having laid this foundation, he proceeds to an analysis 
 of the disclosures of the census and finds that the following 
 were the proportions of those employed in gainful occupa- 
 tions in the census year, the number so engaged being about 
 one-third of the whole population : 
 
 Occupied in agriculture 7,670,493 
 
 Occupied in professions and personal service 4,074,258 
 
 Occupied in manufactures, mechanics, arts and mining.... 3,837,112 
 
 Occupied in trade and transportation 1,810,256 
 
 17.392,099 
 
 *Atkinson, The Industrial Progress of the Nation, p. 204.
 
 438 PROTECTION AND PROGRESS 
 
 A further compilation is made by the author we are 
 quoting under seven titles, as follows : 
 
 Mental Work. — Clergymen, 64,968; lawyers, 64,137; 
 pliysicians and surgeons, 85,671 ; teachers and literary, 227,- 
 710; journalists, 12,308; scientists and engineers, 8,126; 
 musicians, 30,477 ; officers of corporations, banks, railroads, 
 insurance, etc., 202,423. Total, 696,000. 
 
 Mental and Manual. — Merchants and traders, 481,- 
 450; hotel keepers, 32,543; clerks, salesmen, commercial 
 travelers, brokers and all others engaged in the purchase 
 and sale of goods, 521,898. Total, 1,044,000. 
 
 Automatic Machinery. — Collective factory work, tex- 
 tiles, printing and bleaching, 500,000; metals and machin- 
 ery, 300,000; clothing 450,000; boots and shoes and hats, 
 210,000; all others, 280,000. Total, 1,740,000. 
 
 Mechanical. — Hand and machine tools : mechanical 
 and collective : carpenters and other workers in wood, 500,- 
 000; blacksmiths, 172,726; painters, 128,556; masons, 
 102,473; all others, 958,045. Total, 1,861,800. 
 
 Manual. — Service: express, railroad, telegraph em- 
 ployes (not laborers), 300,000; domestic servants, 1,075,- 
 655; laundry, 123,000; waiters, 200,000; draymen, hack- 
 men, etc., 180,000; all others, 391,345. Total, 2,279,400. 
 
 Horse and Hand Tools. — Farmers, herdsmen, stock 
 breeders and the like, 4,350,000. 
 
 Chiefly Manual. — Laborers on farms, 3,323,876; 
 laborers not specified, probably in part on farms, 1,857,023; 
 miners, 240,000. Total, 5,420,899. 
 
 It would be idle for any one to attempt to determine 
 exactly what proportion of the above categories should be 
 characterized as unnecessary middlemen or toll gatherers 
 from production. A very cursory examination of the details 
 will, however, tend to convince any candid student that it 
 is large. Let us take the first subdivision — that relating to 
 mental work — and ask the question : How many of those 
 included in the total of 696,000 add to the stock of useful
 
 CONSUMERS. 439 
 
 products or minister to the wants of those who do? How 
 many of the 64,968 clergymen are devoted to advancing the 
 reHgious welfare of workers? Of the 85,671 physicians do 
 not by far the largest number devote themselves to curing 
 the ailments of the well-to-do non-producer? Of those en- 
 gaged in teaching and literature, over 227,000, how many 
 are concerned in improving the mental condition of the 
 working and producing classes? The number of scientists 
 and engineers is set down as 8,126; are they all employed 
 in useful work? The 30,477 musicians enumerated, did 
 they employ their art to lighten the labors of the producer 
 or to dissipate the ennui of those without occupation ? How 
 many of the 202,423 officers of corporations, banks, rail- 
 roads, insurance companies were figure-heads permitted to 
 draw large salaries for the management of concerns in 
 which they invested capital? 
 
 Of the nearly 700,000 above enumerated perhaps one- 
 half may have been parasites of the kind described by Rog- 
 ers. When we turn to the second classification, "Mental 
 and Manual," and apply the same questioning process we 
 are forced to conclude that it embraces many whose occu- 
 pation is chiefly that of dissipating or wasting the wealth 
 of the producer. How many merchants and traders were 
 there in the 481,450 whose services might not have been 
 dispensed with without the communities in which they oper- 
 ated feeling a sense of loss? What proportion of the 32,543 
 hotel keepers maintained hostelries merely for the accom- 
 modation of the well-to-do, and how many of the 521,898 
 salesmen, commercial travelers, brokers, etc., would really 
 be needed by society if the unscientific system of competition 
 were displaced by a highly organized method of distribution 
 such as that which combination secures? 
 
 The remaining categories of these titles would convey 
 the impression that they included none but those employed 
 in really useful, gainful occupations, but if we ask ourselves 
 how many of the 500,000 engaged in manufacturing textiles
 
 440 PROTECTION AND PROGRESS 
 
 are working for the classes which never produce we are 
 disturbed by the answer. We all know that while a large, 
 indeed, the major part of those so engaged are producing 
 staples, the number who are devoted to the production of 
 mere luxuries, destined for the consumption of those who 
 do not work, is very great. Those employed in the me- 
 chanic artS' — carpenters, masons, painters, blacksmiths and 
 others — are also in large part devoted to the service of the 
 non-producer. If the facts could be arrived at it would 
 probably be seen that the major part of the wages earned 
 by the classes of labor last mentioned are derived from min- 
 istering to the pleasures of the rich. It costs more to build 
 a handsome residence for a merchant prince or a successful 
 contractor or railroad exploiter than it does to built six 
 blocks of houses for deserving workmen. Three thousand 
 people are huddled into a tenement in Vienna, which, im- 
 posing as it is in appearance and a decided advance in point 
 of comfort over similar housing facilities of the working 
 classes, perhaps did not cost half as much to construct as 
 many private mansions in the same city. 
 
 And so we might go through the list without shaking 
 the conviction that an immense proportion of the whole 
 17,392,099 said to be employed in gainful occupations are 
 not assisting in the work of production. We certainly 
 would find as the result of such an examination that the 
 greater part of the 1,075,655 domestic servants, the 200,000 
 waiters, the 180,000 draymen and hackmen, and the dubious 
 category which includes 4,350,000 farmers, herdsmen, stock 
 breeders and the like, was made up of toll gatherers who 
 might be eliminated without materially reducing the volume 
 of useful production. 
 
 But who will be rash enough to advocate such elimina- 
 tion ? Not the attentive student of the work of Rogers, for. 
 although he assumes in some parts of his writings that the 
 extinction of the useless middleman would inure to the 
 benefit of the wage earner, in other places he significantly
 
 CONSUMERS. 441 
 
 warns against the dangers which would follow a radical 
 disturbance of the existing order. He tells us "it is one of 
 the commonplaces of ignorant optimism to allege that the 
 remedy is supplied by taking away the cause of the disease ; 
 but the maxim that the effect ceases when the cause ceases 
 is true in organic nature only, and not always true there. 
 The present condition of English society, its violent con- 
 trasts of opulence and penury, of profligacy protected by 
 law, and misery neglected by law, is the outcome of causes 
 which have a longer pedigree than the recorded generations 
 of any family. The people of Great Britain," he adds, 
 "have become what they are by reason of events and acts 
 which it is the duty of the genuine economist to discover, 
 as contrasted with the economist who constructs a system 
 out of a few axioms and a multitude of postulates."* 
 
 Rogers, whose contradictory conclusions are an evi- 
 dence of the sincerity of his work, thought that he at least 
 would not be obnoxious to the criticism that he tried to 
 construct a system "out of a few axioms." But he is in- 
 finitely narrower than the economists he condemns, for the 
 work of his life has been to demonstrate that cheapness is 
 the greatest boon that man can enjoy, and, while he has tried 
 to exhibit a rare sympathy for the workingman, he has per- 
 sistently advised a course of action which must inevitably 
 tend to degrade the worker. Even his panacea — that of 
 eliminating superfluous middlemen, while retaining the cap- 
 italistic parasite — is open to the objection that it would still 
 further swell the number of those obliged to maintain them- 
 selves by useful work, and, by pitting them against each 
 other, would make it impossible for them to emerge from a 
 condition of dependence. 
 
 But the parasites of industry cannot be eliminated so 
 long as the competitive system prevails ; therefore we should 
 study how to minimize the advantages they enjoy and hot 
 
 ♦Rogers, Six Centuries of Work and Wages, p. 435.
 
 442 PROTECTION AND PROGRESS 
 
 assist in increasing them. That the cheapening of prod- 
 ucts at the expense of the producer contributes materially 
 to widening the breach between those who have in abund- 
 ance and they who seek an opportunity to earn a living can 
 easily be demonstrated. If the rich man who employs a 
 retinue of servants can succeed in cutting down the cost of 
 production of wheat he not only benefits from the reduced 
 price of what he personally consumes ; he is also a benefi- 
 ciary by the amount he saves in the reduced cost of the main- 
 tenance of all those who are dependent upon him or who 
 minister to his luxury. In short, as in the case of the rain 
 which falls alike on the just and the unjust, the blessings 
 of cheapness extend to those who have no share in bringing 
 them about, and, to continue the simile further, it fre- 
 quently happens that those who least deserve to benefit, like 
 the greedy appropriators of water in an arid country, who, 
 in defiance of natural rights, by virtue of riparian privileges, 
 manage to secure the lion's share of an element as essential 
 to productivity as the land itself, are the greatest, often 
 the sole, beneficiaries. 
 
 When we gather the full import of the figures quoted by 
 Mr. Atkinson, or investigate the extent of that part of the 
 population of Great Britain which under any construction 
 must be regarded as unproductive, we are forced to con- 
 clude that all consumers do not stand on the same-plane, and 
 that no one sincerely desirous of promoting the welfare of 
 the classes actually producing will contend that all are 
 alike benefited by low prices no matter how they are brought 
 about. Such a claim could only be fairly made if all the 
 people were engaged in the work of production, and not 
 even then if the machinery of distribution was not carefully 
 adjusted so as to secure to every member of society his 
 just proportion of the reduction. It is absurd to contend 
 that a lessening of the cost of manufacturing inures equally 
 to the benefit of all consumers. As may readily be shown, 
 the reduction may be entirely absorbed by intermediaries.
 
 CONSUMERS. 443 
 
 The cost of raising coal to the dumps may be reduced 30 
 cents a ton by cutting down the wages of the miners, but 
 the poor wretch who buys it by the bucket is not hkely to 
 learn the fact. The farmer may be compelled by the com- 
 petition of the Indian ryot to sell his wheat at a price which 
 will scarcely remunerate him for his toil, but the cost of the 
 loaf to the British or American workingman is not always 
 reduced in unison. Retail prices never move up and down 
 in strict harmony with those of the wholesaler. They are 
 quick enough to respond to the upward push, but their fall 
 is never rapid. 
 
 But after all that is said and written on this subject by 
 economists, practical experience and the judgment of the 
 masses will be accepted as better testimony than statistical 
 tables showing relative prices and wages. A consensus of 
 this sort of opinion would certainly be that the really dear 
 countries are those in which the workingman thrives least. 
 It will be the object of the writer in the next chapter to de- 
 velop the fact that this opinion, though the vulgar one, is 
 sound, and to tell why it is so.
 
 CHAPTER XIX. 
 
 WORKINGMEN AND WAGES. 
 
 TRADES UNIONISM IN GREAT BRITAIN AND THE UNITED STATES. 
 
 The benefits of a cheap loaf — The chief beneficiary of the cheap loaf 
 is the middleman — The Orient as a land of cheapness — Object 
 of a protective tariff is to assist the productive consumer to 
 maintain himself against the non-producing consumer — High 
 duties on competing products paid by the well-to-do classes — 
 The cost of the great staples no longer affected by duties — A 
 dear country for the rich and a cheap country for the toiler — 
 The part played by the standard of living in determining the 
 rate of wages — Taxation of necessaries cannot touch the worker 
 — Inconsistency of the policy of unrestricted free trade and 
 labor combination — Ineffectual effort to promote international 
 trades unionism — Trades unionists moving towards socialism 
 in England — Extent of the importation of manufactured goods 
 into Great Britain — The desirability of competition recognized 
 by protectionists, but regulation assumed to be necessary — Ad- 
 vantages enjoyed by trades unionists in the United States — Pro- 
 tection a safety valve for social discontent — Higher standard of 
 living of American workers not due to abundance of land. 
 
 There must have been moments when Professor Rogers 
 felt uncertain about the correctness of his theory that the 
 best interests of mankind are subserved by a poHcy of 
 cheapening regardless of its effects on producers, for we 
 find him saying in one of his lectures that "the best eco- 
 nomic condition is not that in which the greatest amount of 
 produce is obtained at the cheapest rate, the greatest amount 
 of capitalists pick up the greatest amount of profits ; but 
 one in which the greatest amount of workmen can live in 
 the greatest possible comfort and security."* 
 
 *Rogers, History of Commerce and Industry in England, p. 343. 
 
 444
 
 WORKINGMEN AND WAGES 445 
 
 It is doubtful whether the writer meant to say exactly 
 what he expressed in this instance, for his voluminous work 
 on wages and prices indicates that he had constantly in 
 mind the general good and that he instinctively rejected 
 the hideous idea that a sound economic condition could 
 exist in a society in which there was a large and constantly 
 increasing submerged class. But his testy denunciation 
 of those who suggested "fair trade" as a remedy for the 
 undoubted agricultural distress which existed in England 
 when he wrote "Work and Wages," will lead many to the 
 conclusion that Rogers, in common with Sir Robert Giffen 
 and other extreme exponents of the Manchester idea, shared 
 the opinion that it did not matter much if pauperism vastly 
 increased throughout the United Kingdom provided sta- 
 tistics could be formulated which would show that the num- 
 ber of persons with an increased income was greater than 
 it was at the beginning of the Cobden era. 
 
 Although we find the professor referring to those who 
 differed from him regarding the causes of the ruin which 
 was gradually overtaking the British farmer as "muddle 
 headed and selfish protectionists," and hotly denying that 
 the farmer's distress was due to lower prices, his writings 
 invariably tend to create the impression that he had been 
 led astray by false analogies and that had he lived to ob- 
 serve the workings of the system he condemned he would 
 have modified his views and made them conform to the 
 idea expressed in the passage quoted in this chapter in 
 which he elevates the worker to the first place in a sound 
 system of economy. 
 
 If Rogers had lived until the present time he would 
 no doubt be ready to admit that the conclusion he reached 
 in 1883 respecting the cause of English agricultural dis- 
 tress was erroneous. He declared then that "while it was 
 patent to everyone that a vast amount of English land was 
 going out of tillage * * * the mischief could not 
 have come from lower prices," because they were incon-
 
 44^^ PROTECTION AND PROGRESS 
 
 testibly higher than they were ten years earHer.* In 1883 
 a student of prices, especially one accustomed to embrac- 
 ing in his view whole eras, as Rogers did in "Six Centuries 
 of Work and Wages," might easily have concluded that 
 the declines witnessed between 1873 and 1883 — the latter 
 being a year of high prices and exceptional prosperity — 
 were abnormal, and, therefore, should not be taken into 
 consideration. But no one surveying the trend of agri- 
 cultural prices during the period subsequent to 1883, and 
 the effect of the fall in still further changing the charac- 
 ter of British tillage, would have ventured to affirm that 
 the sole cause of the troubles of the English farmer was ex- 
 cessive rent. Such an opinion became absolutely untenable 
 when a large proportion of the land which was once a source 
 of profit to the British landlord and tenant could no longer 
 be worked because of the competition with cheap cereals 
 from all parts of the world that flooded the markets of 
 Great Britain. 
 
 If Rogers were still alive he might perhaps view the 
 "cheap loaf" with the same distrust that many of his coun- 
 trymen who were once ardent Cobdenites now do. Profes- 
 sor Lecky, speaking of this tenet of the Manchester faith, 
 tells us that "even this last article (cheap food) is not gen- 
 erally held without qualification. Cheap food, it is begin- 
 ning to be said, does not necessarily mean the very cheap- 
 est, and a system under which the greatest and most im- 
 portant of all national industries is almost hopelessly para- 
 lyzed, under which land is fast falling out of cultivation, 
 and the agricultural population flocking more and more to 
 the congested towns, cannot be really good for the nation. "-}- 
 
 There are too many who corroborate this estimate of 
 changed sentiment in England to permit it to be disputed. 
 It would be easy to fill volumes with quotations from Brit- 
 
 ♦Rogers, Six Centuries of Work and Wages, p. 519- 
 Ibid, p. 518.
 
 WORKINGMEN AND WAGES 44; 
 
 ish writers containing admissions that the struggle for the 
 cheap loaf has brought in its train evils which threaten 
 the national existence. Some of these drawbacks have 
 been discussed elsewhere, but here we are concerned par- 
 ticularly with that phase of the question which may be 
 regarded as purely economic, i. e., whether English work- 
 ingmen, as a whole, have been benefited by a process of 
 cheapening which has practically arrested the development 
 of British agriculture and forced large numbers of toilers 
 who might have earned a living by tilling the soil into 
 the towns to compete in the already congested manufactur- 
 ing districts for a chance to earn a livelihood. 
 
 In the preceding chapter admissions of Rogers were 
 adduced to show that the middleman, whom he character- 
 izes as an evil and whose elimination by means of trusts 
 he inconsistently advocated, was the real beneficiary of 
 the cheapening process because he made no sacrifice to 
 bring about the result. This is a view shared by the author 
 of "Democracy and Liberty," who remarks : "To those, 
 indeed, who observe how large a proportion of the advantage 
 of the extreme cheapness of articles goes simply to the 
 middleman, and not to the consumer, it will appear very 
 doubtful whether a low corn duty would have any per- 
 ceptible effect on bread."* In another place Lecky tells 
 us that "the horrible grinding of the poor that takes place 
 under the name of sweating is not for the benefit of tlie 
 rich man. He buys his clothes or shirts at a price which 
 should amply allow for the proper payment of labor. It 
 is in the struggle to provide clothes of extreme cheapness 
 for the very poor that these evils chiefly arise." f 
 
 The striking similarity of these observations to those 
 made by Carlyle during the heat of the corn law discussion 
 will not escape the attentive reader. "Brothers, we will 
 
 *Lecky, Democracy and Liberty, Vol. II, p. 465. 
 flbid, Vol. II, p. 419-
 
 448 PROTECTION AND PROGRESS 
 
 cease to undersell them," said the cynic ; "we will be con- 
 tent to equal sell them ; to be happy selling equally with 
 them ! I do not see the use of underselling them. Cot- 
 ton cloth is already two pence a yard lower; and yet bare 
 backs were never more numerous among us."* Thus the 
 "sage of Chelsea" brushed aside the sophistries and refine- 
 ments of the economists : "Were the corn laws ended 
 tomorrow," he said, "there is nothing yet ended ; there 
 is only room made for all manner of things beginning. The 
 corn laws gone and trade made free, it is as good as cer- 
 tain this paralysis of industry will pass away. * * * 
 In this of itself is no salvation. If our trade in twenty 
 years, flourishing as never trade flourished, could double it- 
 self, yet then also, by the old hisses faire method, our pop- 
 ulation is doubled to."t 
 
 Carlyle was not a professed economist. He had a hearty 
 contempt for those who preached "the mammon gospel of 
 supply and demand, competition, laissea faire, and devil 
 take the hindmost," which he characterized as "the shab- 
 biest of gospels ever preached," but he had a way of get- 
 ting at the kernel of things which was very uncomfortable 
 for those who tried to convince themselves and those who 
 would listen to them that the cheapening of production was 
 to be the great panacea for all woes. "You have produced," 
 said Carlyle ; "he that seeks your indictment, let him look 
 around. Millions of shirts and empty pairs of breeches 
 hang there in judgment against you. We accuse you of 
 overproducing; you are criminally guilty of producing 
 shirts, breeches, hats, shoes and commodities in a frightful 
 overabundance. And now there is a glut and your opera- 
 tives cannot be fed." J 
 
 A half a century has rolled around since Carlyle thus 
 
 ♦Carlyle, Past and Present, p. 219. 
 ■f-Ibid, p. 221. 
 JIbid, p. 204.
 
 WORKINGMEN AND WAGES. 449 
 
 expressed himself; were he alive today he might point 
 to his prophecy and repeat his question: "What is the 
 use of your spun shirts? They hang there by the million 
 unsalable; and here by the million are diligent bare backs 
 that can get no hold of them. Shirts are useful for cov- 
 ering human backs ; useless otherwise, and unbearable mock- 
 ery otherwise."* 
 
 And yet during this period how vastly more cheap have 
 things become than when Carlyle wrote. But what has 
 the world gained on the whole? Giffen tells us that sta- 
 tistics prove that more people than formerly are able to 
 get shirts, but he does not conceal the fact that the num- 
 ber of bare backs is on the increase. Indeed, the growth 
 of the shirtless element has impressed him so strongly that 
 he has ingeniously constructed a new society out of its mem- 
 bers which he suggests must be kept without the pale of 
 that section which is lucky enough to get shirts. 
 
 Why the preachers of the shabby gospel of Cobdenism 
 should have imagined that cheapness could better the con- 
 dition of mankind passes comprehension. A knowledge of 
 the results of an incomparably greater cheapness in the 
 Orient than Western peoples are capable of conceiving 
 must have warned them that squalor and want may easily 
 be its accompaniment. The experience of India and China 
 was theirs to draw upon. They could also look across 
 the English channel and see the wretched condition of the 
 working people in countries where the cost of living was 
 infinitely lower than in England ; yet they refused to heed 
 these examples and rashly assumed that they could over- 
 come the evil effects of a system which, followed to its 
 logical conclusion, inevitably tends to the degradation of 
 the workingman. They would not see that attempts to ben- 
 efit the producing consumer by reducing the profits of the 
 producer and the wages of those who assist him in produc- 
 ing is as senseless a proceeding, regarded as a remedy 
 
 ♦Carlyle, Past and Present, p. 25. 
 29
 
 450 PROTECTION AND PROGRESS 
 
 for economic distress, as it would be for a starving man to 
 try to sustain himself by devouring his own flesh. 
 
 "It must never be forgotten," says a modern free trader, 
 "that the mass of producers form also the mass of con- 
 sumers, and to benefit producers generally at the expense 
 of consumers generally is like transferring money from one 
 pocket to another and dropping some of it in the process. 
 The best illustration of this growth of monopoly by imi- 
 tation is afforded by protective duties. One duty leads 
 to another until all industries are protected, with the result 
 that the real productive powers of the society are lessened."* 
 
 It is by means of such generalizations as these that 
 men who aim at the truth manage to deceive themselves. 
 We have already seen from the testimony of Rogers and 
 others that the unnecessary middleman, and the capitalist 
 who lives on his unearned increment, constitute as import- 
 ant a part of society as the true producer. The author 
 quoted also dwells upon the unnecessary multiplication of 
 middlemen and the existence of a large class who "neither 
 toil nor spin," but when he begins to generalize he for- 
 gets them and teaches that the producer and his working- 
 men are robbing themselves when they succeed in increasing 
 their profits and wages at the expense of the non-producing 
 consumer. It is by means of this process of self-decep- 
 tion that English Cobdenites render themselves unfit to 
 pronounce upon the workings of a properly constructed 
 protective tariff, and fail to see that it operates almost 
 wholly in the interest of the classes who are compelled to 
 toil productively to earn a livelihood. 
 
 It is possible that at some time a free trader has seen 
 and admitted the fact that the protective tariff of the United 
 States is laid on a large number of articles which are strictly 
 in the category of luxuries ; if so, the admission has never 
 come under the observation of the writer. On the con- 
 
 *Nicholson's Principles of Political Economy, Vol. II, p. 71.
 
 WORKINGMEN AND WAGES. 451 
 
 trary, he has discovered that Cobdenites invariably assume 
 that the effect of protection is to raise the cost of the articles 
 produced within the area of a protected country to the work- 
 ing consumer. That there is no ground for such an assump- 
 tion a moderate familiarity with the operation of the Amer- 
 ican tariff will permit anyone to assert with positiveness. 
 Its schedules are filled with duties on articles rarely con- 
 sumed by the working classes. Among them may be enu- 
 merated the finer grades of woolen goods, silks, satins, vel- 
 vets, fine tobaccos, perfumes, brie a brae, laces and em- 
 broideries, fine wines and liquors, plate glass, costly mir- 
 rors, fine clothing, high grade crockery, fine leathers and 
 leather goods, gloves, and hundreds of other things with 
 which the worker has no more acquaintance than that de- 
 rived from seeing them exhibited in the show windows of 
 5hops. 
 
 Now it is obvious that the imposition of these duties 
 results in what Professor Nicholson describes as "a trans- 
 ference of money from one pocket to another," but the 
 pockets are not, as he assumes, in the clothes of the same 
 
 person. If the duty on gloves makes the cost of those 
 articles two dollars a pair, the workingman whose family 
 never wear high grade gloves is not affected by the high 
 price. The imposition of a heavy tariff on champagne does 
 not concern any other class of consumers than the rich 
 able to afford such luxuries. So, too, with high grade 
 woolen goods ; it cannot matter to the workingman whether 
 the wearer of clothes made from them pays twenty dollars 
 a suit or sixty dollars. The productive worker in the 
 United States who sits down to his abundant meal, served 
 on modest stoneware which figures as semi-porcelain, would 
 be surprised if you attempted to tell him that he was injured 
 by a tariff imposed on so-called art china which helps to 
 make a single plate of a dinner service cost more than all 
 the crockery consumed by his household. He would be 
 amazed if a sensible man were to seriously inform him'
 
 452 PROTECTION AND PROGRESS 
 
 that he was a sufferer because the cost to the consumer 
 of the infinite variety of articles of bijoutry, which are never 
 seen in the homes of the best paid workingmen, was en- 
 hanced by the tariff. More than this ; if he were an in- 
 teUigent American workingman he would probably retort 
 that instead of being injured by the duty he was benefited, 
 for its imposition called into existence manufactories which, 
 by increasing the opportunities for employment, helped 
 to maintain the scale of wages he was enjoying and gave 
 him some assurance that when his growing family reached 
 the age when its members would also require work there 
 would be a chance to get it which would not exist if the 
 country he lived in refrained from attempts at the diversi- 
 fication of industry. 
 
 It would be impossible to actually determine what pro- 
 portion of protected articles in the United States come in 
 the category of luxuries, but it is the major part. What- 
 ever may have been the case in the past, it is impossible 
 now for anyone to assert that the cost to American con- 
 sumers of the great staples is affected by the operation of 
 the tariff. It would be manifestly absurd to assume that 
 the cost of iron in this country is increased by the tariff 
 in the face of the fact that the price level is lower here 
 than in Great Britain. Equally idle would it be to say 
 that the commoner classes of cotton goods, such as sheet- 
 ings, drillings and calicoes, are made dearer on account of 
 the duties ; the factory price lists and growing exports 
 to other countries, despite sharp competition, show that 
 this is impossible and that Americans are actually enjoy- 
 ing lower prices for commodities of this kind than most 
 other peoples. The same thing is true of the class of woolen 
 goods worn by the majority of the American people. The 
 effect of the tariff has not been, as Cobdenites assumed it 
 would be, to make the products of the American mills work- 
 ing up the wool from our vast flocks as much dearer as the 
 added duty. On the contrary, the internal production and
 
 WORKINGMEN AND WAGES 453 
 
 competition have been important factors in regulating prices, 
 and they have resulted in giving Americans of the work- 
 ing classes relatively cheaper clothes than foreigners in the 
 same condition of life enjoy, else how can the fact be ex- 
 plained that the masses in Europe are arrayed in garments 
 which most American workers would refuse to wear because 
 their poor quality and lack of finish and poor workmanship 
 would not meet their requirements? 
 
 There is no intention on the part of the writer to con- 
 vey the impression that the United States is a cheap coun- 
 try, for it is not. In pointing out that the great staples 
 consumed by the masses are cheap we have no other object 
 than to make clear the fact that it is possible for the Amer- 
 ican workingman, if he cares to subject himself to the same 
 rule of conduct which obtains among his fellows in Europe, 
 to live much more cheaply than they do. The distinction 
 we desire to make is one which forcibly struck Matthew 
 Arnold in discussing "Civilization in America," namely, 
 that the United States is a dear country for the rich and 
 a cheap country for the toilers. In an article widely pub- 
 lished Professor Arnold, taking certain strictures of Sir 
 Lepel Griffin for his text, after presenting a picture of the 
 conveniences which an Englishman could command much 
 more cheaply than Americans, went on to say: 
 
 "Probably Sir Lepel Griffin had this notion of the com- 
 forts and conveniences of life much in his thought when 
 he reproached American civilization with its shortcomings. 
 For men of this kind and for all that large number of men 
 so prominent in this country, and who make their voices 
 so much heard, men who have been at the public schools 
 and universities, men of the professional and official class, 
 men who do the most part of our literature and journalism, 
 America is not a comfortable place to abide. A man of this 
 sort has in England everything in his favor; society ap- 
 pears organized especially for his advantage. A Roth- 
 schild or a Vanderbilt can buy his way anywhere and can
 
 454 PROTECTION AND PROGRESS 
 
 have what comforts or luxuries he likes whether in Amer- 
 ica or England. But it is in England than an income of 
 from three or four to fourteen or fifteen hundred a year 
 does so much for its possessor, enables him to live with so 
 many of the conveniences of far richer people. For his 
 benefit alone all clubs are organized and hansom cabs ply; 
 service is abundant, porters stand waiting at the railway 
 stations. In America all luxuries are dear except oyster 
 and ice; service is, in general, scarce and bad; a club is 
 a most expensive luxury; the cab rates are prohibitive — 
 more than half of the people who in England would use caljs 
 must in America use the horse cars, the tram. The charges 
 ©f tailors and mercers are about one-third higher than they 
 are with us. I mention only a few striking points as to 
 which there can be no dispute and in which a man of Sir 
 Lepel Griffin's class would feel the great difference between 
 England and the United States." 
 
 Having thus pointed out who were the real beneficiaries 
 of cheapness in England, Professor Arnold proceeded to 
 institute a comparison between the conditions of the work- 
 ers in this country and in England in which he eulogized 
 the sturdy independence of the American worker who held 
 up his heaH and felt that he was a man among men, con- 
 trasting him with the English toiler, whose lot was infi- 
 nitely harder and whose mode of life was sordid compared 
 with that of the man who earned his livelihood in the United 
 States. Professor Rogers, who preached the gospel of 
 cheapness almost unceasingly, also bore testimony to the 
 truth of Arnold's assertion in a lecture in which he dis- 
 cussed the subject of emigration to the United States, say- 
 ing: "You never see a servile American and rarely meet 
 one who is insolent."* It is true the distinguished Cob- 
 denite had a theory to account for this remarkable differ- 
 ence between the toilers of the two countries, but his infer- 
 ence was absolutely unsupported by facts, as we shall see 
 
 *Rogers, Economic Interpretation of History, p. 282.
 
 WORKINGMEN AND WAGES 455 
 
 later on when we inquire what effect on the material pros- 
 perity of the American workingman was produced by the 
 abundance of land in the United States. We are simply 
 dealing here with his admission that the workingmen in 
 a country of high protection, in which nominal dearness 
 prevailed, were so well contented with their position in 
 life that they could deport themselves in a fashion calcu- 
 lated to favorably impress itself on the mind o fan observ- 
 ing man who lived in a country of free institutions where 
 the toiler as a rule carries himself either servilely or inso- 
 lently. 
 
 . Arnold and Rogers voiced their opinions on this phase 
 of the subject twelve or fifteen years ago. A prominent 
 Englishman, Professor Lecky, who delivered himself more 
 recently, has found little change since they wrote. He says : 
 "Although America has experienced many periods of acute 
 commercial crisis and depression, the general level of her 
 well being has been unusually high. Property from the 
 first has been very widely diffused. Her lower levels in 
 their standard of comfort more nearly resemble the middle 
 than the lowest class in European countries."* 
 
 Now what is the cause of this striking feature in Amer- 
 ican life which these three competent critics single out and 
 dwell upon? Rogers satisfied himself that it is due to 
 the ability of the American workingmen to relieve the press- 
 ure of competition by going onto vacant land, an opinion 
 which was shared by both Arnold and Lecky, although the 
 latter had a glimmering of the true reason, as we will infer 
 from this paragraph from "Democracy and Liberty": 
 "There is undoubtedly some truth in the doctrine which is 
 now much taught that a rise in the habitual standard of 
 comfort among the working classes is not only the conse- 
 quence, but also in some degree a cause of higher wages. 
 This is especially the case when it is gradual, normal and 
 general."! 
 
 *Lecky, Democracy and Liberty, Vol. I, p. 68. 
 flbid, Vol. II, p. 435.
 
 456 PROTECTION AND PROGRESS 
 
 Professor Lecky is wrong in assuming, as he evidently 
 does, that the doctrine he speaks of is a new one. If he 
 will read Smith's "Wealth of nations" attentively he will 
 see that it was tolerably well defined by the learned Doc- 
 tor, who taught in the most unmistakable fashion that the 
 laborer was constantly being pressed to the subsistence level. 
 The whole theory of free trade revolves around this idea. 
 If any one doubts it let him study the import of this emd 
 similar passages from Smith: "The advanced price (caused 
 by taxation) of such manufactures as are real necessaries 
 of life, and are destined for the consumption of the poor, 
 of coarse woolens, for example, must be compensated to 
 the poor by a further advancement of their wages. The 
 middling and superior ranks of people, if they understood 
 their own interest, ought always to oppose all taxes on 
 the necessaries of life, as well as all direct taxes upon 
 wages of labor. The final payment of both one and the 
 other falls altogether upon themselves, and always with a 
 considerable overcharge."* In the same connection Smith 
 further says: "Taxes upon luxuries have no tendency to 
 raise the price of any other commodities except that of 
 the commodities taxed." 
 
 Here we have the economic idea of the laissez faire 
 school put into the space of a nutshell. No matter what 
 irrelevant stufif may be written about the benfits of cheap- 
 ness it cannot conceal this cardinal belief that free com- 
 petition among the working classes must necessarily bring 
 all the competitors down to the level of brutes, where the 
 struggle is merely one for existence. No other meaning 
 can be attached to Smith's language, and to his utterly 
 heartless suggestion that "the middling and superior ranks 
 of people" should always take care to avoid taxing the 
 necessaries of the working classes, but should instead single 
 out their luxuries. This has been the steadfast purpose of 
 
 ♦Smith, Wealth of Nations, Bk. s. Chap. II.
 
 WORKINGMEN AND WAGES 457 
 
 the Cobdenites. The history of English taxation, and its 
 incidence since 1848, shows that they have not missed the 
 hint, for the masses, who in Great Britain enjoy less than 
 a tenth of the total revenues from trade and all other sources, 
 are called upon to pay over one-half of the taxes for the 
 support of the general government. Adam Smith tells us 
 that the effect of competition has been to make men nar- 
 row and selfish, and refers to the destruction of the spirit 
 of hospitality which it has brought in its train. He might 
 have completed his indictment by charging that it taught 
 men to be inhuman, for certainly no more cunning scheme 
 of keeping men in perpetual slavery could be devised than 
 the one which deliberately seeks to throw the burden of 
 taxation on those least able to bear it. 
 
 That the attempt to completely enslave the masses proved 
 unsuccessful in England is wholly due to the fact that the 
 workers banded in self-defense, and, by means of unions, 
 completely nullified the law which Smith saw would keep 
 the toiler in subjection if it were permitted to work unre- 
 strainedly. The original free traders were thoroughly im- 
 bued with the ideas of Smith, and, therefore, consistently 
 opposed the efforts of labor to organize. John Morley, in 
 his biography, quotes Cobden as saying: "Depend upon it, 
 nothing can be got by fraternizing with trades unions. 
 They are founded on principles of brutal tyranny and mo- 
 nopoly. I would rather live under a Dey of Algiers than 
 a trades committee."* John Bright, who saw danger in 
 the attempt to rescue children from the horrors of the fac- 
 tory system and unweariedly opposed the English factories 
 acts, as late as 1888, writing to an American, said : "Whilst 
 your tariff is in force you need not expect your workmen 
 to be wise. Protection, which means robbing somebody, 
 will not content itself with enriching manufacturers, but 
 will be called in to give higher wages and shorter hours 
 of labor to your workmen."* Later free traders, conspicuous 
 
 *Morley, Life of Cobden.
 
 458 PROTECTION AND PROGRESS 
 
 among them J. Thorold Rogers, have accepted the situation 
 and have ceased to struggle against the inevitable. 
 
 But the recognition of the fact that such arguments as 
 John Bright employed are not tenable in a country where 
 the workingmen enjoy the franchise has not prevented free 
 traders making themselves ridiculous by advancing theories 
 and giving advice wholly inconsistent with the doctrine of 
 laisses faire. Rogers says: "The evidence of the pres- 
 ent and the example of the past appear to prove that labor 
 partnerships are the remedy for low wages" ;* but to the 
 last moment of his life he advocated the utmost freedom 
 of trade. Now, it should have been clear to any reflecting 
 man that a combination for the purpose of maintaining a 
 wage rate could only be effective so long as competition 
 was restrained within the area in which the agreement oper- 
 ated. If the English silk spinners and weavers agreed 
 among themselves to keep up their scale of wages only 
 one result could follow their action if manufacturers in 
 France or other countries where labor could be obtained 
 on cheaper terms were permitted to freely introduce their 
 products into England. That result would necessarily be 
 the closing up of the English silk spinning and weaving 
 factories, for those who conducted them would not do so 
 indefinitely at a loss. 
 
 In the heydey of Cobdenism the advocates of latssez 
 faire jauntily declared that this was as it should be. "If," 
 they said, "the English workingman cannot produce a cer- 
 tain article as cheaply as his French competitor he should 
 retire from the contest." For awhile this view appeared 
 to meet with universal favor throughout Great Britain. 
 Those entertaining it were deluded by the economists, who 
 loosely taught that the extinction of a single industry was 
 of no consequence and should not be taken into consider- 
 ation if in its place other industries were created for which 
 the people were better fitted and which would enlarge the 
 
 ♦Bright, John, Letter to L. M. Reavis, of St. Louis, Mo,, Feb. 6. 
 1888.
 
 WORKINGMEN AND WAGES 459 
 
 avenues of employment while increasing the national wealth. 
 But the vital error of this method of teaching was that it 
 ignored the fact that there were no industries practiced 
 by Englishmen which they were better fitted to pursue than 
 other peoples. The failure to perceive this blinded many 
 who accepted the doctrines of the Manchester school to 
 the danger that the loss of industries might finally become 
 so great as to imperil the national welfare. 
 
 We have seen that the investigators of the repeal of 
 the corn laws at first entertained the belief that English 
 agriculture was impregnable. Later, when they discovered 
 that the natural protection upon which they had relied was 
 broken down by the vast improvement in transportation 
 facilities, they shifted their position and declared that while 
 the individual landlord and his tenant farmer and many 
 farm laborers had been injured, the gain of national wealth 
 was so great that it would be irrational to count the losses 
 of a class as a sacrifice. In the same way, when it was 
 pointed out that the silk spinners and weavers of England 
 were being driven to the wall by continental rivals, the answer 
 came promptly that the sufferings of the displaced employes 
 were regrettable, but that they were more than balanced 
 by the opportunities to obtain employment which the ex- 
 pansion of British industry in other directions afforded. 
 
 But there has been a decided revision of opinion on this 
 point in England in recent years. The optimistic view 
 predicated upon the fact that English wages were higher 
 because the British worker was superior to his rivals has 
 largely disappeared, and it is now beginning to be seen 
 that this was due, not to the cause assigned, but, as has 
 been shown at length elsewhere in these pages, to the en- 
 joyment of a practical monopoly of production in many 
 lines by the British, whose rivals were not enterprising 
 enough to enter the manufacturing lists with them. So 
 long as the lethargy of the countries now actively compet- 
 ing with the British lasted the manufacturers of Great Brit-
 
 46o PROTECTION AND PROGRESS 
 
 ain made enormous profits, and these they were, through 
 the instrumentality of the labor organizations, compelled 
 to share to a greater or less extent with their operatives. 
 
 As soon, however, as rivalry began to have full play 
 the conditions changed. When Belgium, Germany and 
 other countries began to excel in the fields in which the 
 English once thought themselves pre-eminent the British 
 worker woke up to the fact that there was a law affecting 
 wages as unfailing in its operation as that which makes 
 water find its level. They soon discovered that there was 
 some connection existing between the cheapness of Bel- 
 gian and German products and the low wages and long 
 hours of labor in that country. It was not long after this 
 discovery that practical Englishmen cast to the winds as 
 idle tales those statements which made out the French, the 
 German and the Belgian workmen to be fellows whom 
 no British toiler need fear. The fine spun deductions from 
 Brassey's estimate of the relative superiority of the Eng- 
 lish navvy, who was oftener an Irishman than an English- 
 man, were dismissed, and instead the view that no rival 
 in the field of industry was to be despised has taken its 
 place. Spencer and other theorists who built up an airy 
 fabric of British labor efficiency are now out of fashion, . 
 and it is the custom for the visiting delegations and commis- 
 sions, after their return to England from other countries, 
 to tell their countrymen that they are backward and that 
 they must, in order to win in the industrial race, put them- 
 selves abreast of the more progressive peoples. 
 
 These latter recommendations are often obscured by 
 the assumption that the cause of the relative stagnation 
 of British manufacturing industry is due to the lack of 
 enterprise of the owners of' plants, who are unwilling to 
 adapt themselves to changing conditions by promptly adopt- 
 ing improved machinery, but the trades unionists stead- 
 fastly refuse to accept this view except under compulsion. 
 Their opinion is that the English workingman is at a dis-
 
 WORKINGMEN AND WAGES 461 
 
 advantage with his foreign competitor because the latter, 
 either from force of circumstances or choice, works longer 
 hours and for less wages. 
 
 Hence the movement for internationalism in trades union- 
 ism. Committees are now sent to the continent by the 
 English trades unions to impress on their fellow workers 
 in other countries the necessity of abridging their hours of 
 labor and of compelling their employers to pay higher wages. 
 But missionary work of this kind has little or no effect, be- 
 cause the people to whom the argument is addressed see 
 that the whole matter under present conditions resolves 
 itself into a struggle for existence and are naturally reluc- 
 tant to adopt a course which, according to the belief of the 
 men who are endeavoring to persuade them, would result 
 in making competition with England more difficult, or, to 
 put it in another way, the continental workmen fear that 
 the attempt to put themselves on the same plane as the 
 British would result in depriving them of the opportunity 
 to earn anything at all. In short, they are imbued with 
 the idea that a half a loaf is better than no loaf at all, and 
 they are not likely to surrender it so long as they are con- 
 fronted with the spectacle of nations quarreling over oppor- 
 tunities to extend their trade, a state of affairs which 
 makes the Cobdenistic theory of the illimitability of the 
 world's markets appear too ridiculous for sensible men to 
 give it much further thought. 
 
 The English appear to be unconscious of the real trend 
 of trades unionism, or they would not fall into so many 
 contradictions in discussing it ; nor would they entertain the 
 hope, as Rogers did, that it will finally satisfactorily work 
 out the true economic problem of giving the producer a 
 fair share in the game of life. That it never can bring 
 about such a result while unrestrained competition prevails 
 has long since been perceived by many of the brighter minds 
 who are shaping the destinies of the order to which they 
 belong. The Parliamentary Committee of the .Trades Union
 
 462 PROTECTION AND PROGRESS 
 
 Congress which met in England in 1888 voiced the sentiment 
 which is becoming more and more general in that country 
 when it declared that : "The demon of cheapness has per- 
 meated our whole social system, and while the cheapness of 
 goods has been a matter for wonder, purchasers seldom or 
 never give a thought to the human blood and muscle that 
 have been ground up in the production of the article." 
 
 That men who entertain and promulgate sentiments of 
 this character can be permanently attached to the laissez 
 faire policy by the bait of the cheap loaf seems incredible; 
 that they still adhere to it is, however, a fact. How long 
 they will continue to do so is problematical. The manufac- 
 turers and the trades unionists of England have just passed 
 through a conflict which threw into plain relief some of the 
 difficulties that confront employer and employed in that 
 country. On the one side it was contended that the struggle 
 was for a living wage ; on the other it was plainly asserted 
 that the question resolved itself down to this simple propo- 
 sition : Unless labor makes concessions the English manufac- 
 turer will be compelled to abandon competition and sur- 
 render to foreign rivals. Reduced to its lowest terms, the 
 contest was, therefore, one between a living wage and an 
 offer of a half loaf, the tender of the latter being accompanied 
 by the significant intimation that "half a loaf is better than 
 no loaf at all." 
 
 That this condition of affairs has been brought about 
 by unrestrained competition no one can very well deny 
 without contradicting all the evidence of history. Had not 
 England unduly stimulated the development of her resources 
 she would not today be in the position of an overpopulated 
 land. Had she, instead of pursuing the wasteful policy of 
 bringing raw materials from her remote colonies to fashion 
 them into articles for consumption at home, encouraged the 
 establishment of manufactories throughout her entire empire 
 there would be a different story to tell to-day. Had the 
 draft upon the resources of the British Isles been merely
 
 WORKINGMEN AND WAGES 463 
 
 normal her scientists and practical men would not be dis- 
 cussing the question of the exhaustion of her fuel supplies 
 in the near future. In short, had it been the policy oi 
 England to not only permit but to actively encourage the 
 uniform development of the territory of the peoples she 
 dominated, instead of seeking to divert the stream of wealth 
 into one little island, there might have been a really great 
 British Empire to-day, and not the precarious political fiction 
 which that name now stands for. 
 
 Professor Rogers, whose devotion to laissez faire ought 
 to be beyond suspicion, tells us that "it is a matter of great 
 gravity whether we (the English) should welcome or even 
 permit the perpetual immigration of a foreign element into 
 the country," and he adds : " Workingmen, who understand 
 the interest of their order, are alive to the risk which their 
 organizations run from the competition of foreign immi- 
 grants, and, with characteristic public spirit, have suggested 
 to foreign labor that it should seek to raise itself, not at the 
 expense of other laborers, but in concert with other 
 laborers."* The suggestion referred to may have been 
 spirited, but it was nevertheless foolish, because men pursued 
 by want and hunger are not amenable to advice of this 
 character. Crediting the English workingman with the 
 average share of disinterestedness, or rather lack of it, we 
 have a right to assume that when the British trades unionists 
 told the foreigners that they had better stay in their own 
 countries and try to lift themselves up they were more 
 actuated by selfish fear of near at hand competition than by 
 any hope or desire to see their rivals profit by their advice. 
 
 At any rate, it was grotesquely out of place for English- 
 men who advocate the doctrine of unlimited competition 
 to suggest that possible rivals should practice self-abnega- 
 tion and refuse to compete with them; moreover, it was 
 foolish, for, as Mr. Broadhurst, the labor agitator, remarked 
 
 ♦Rogers, Six Centuries of Work and Wages, p. $66.
 
 464 PROTECTION AND PROGRESS 
 
 at the Paris conference in 1883: "You cannot escape, try 
 whatever you can, from the influence of competition any 
 more than from the survival of the fittest." Rogers, who, 
 as a free trader, advocated competition, shrinks from this 
 naked presentation of its effects and says "it is possible 
 that the struggle for existence, unless controlled and elevated, 
 may be the degradation of all." True enough, but it is 
 extraordinary that so profound a student failed to see that 
 his doctrine of cheapness demands universal degradation. 
 
 The feeble expedient of the English to relieve the con- 
 sequences of overpopulation, which takes the form of pro- 
 moting emigration, must prove unavailing so long as the 
 doors are left open for the introduction of the products of 
 the cheaper labor of other countries. What can it avail the 
 English worker if the foreign pauper immigrant is excluded, 
 and the products of foreign pauper labor are freely intro- 
 duced into England to compete with and drive out the 
 products of British workers? What gain can result to the 
 English worker from the exclusion of foreigners while they 
 permit the owners of capital to transfer it to the countries 
 in which cheap labor abounds for the purpose of utilizing it 
 in the manufacture of goods to be freely imported into the 
 United Kingdom for British consumption? 
 
 The extent to which this practice has already been 
 carried ought long since to have warned the English work- 
 ingman that attempts to prohibit pauper immigration into 
 England and to promote pauper emigration to other coun- 
 tries — for it is one of the inconsistencies of free traders of 
 the Rogers school that they condemn other people for seek- 
 ing their country while they encourage the poverty stricken 
 of their own land to flee to other parts of the world — must 
 prove ineffective remedies for their grievances. Proposi- 
 tions to restrict immigration and promote emigration are 
 not made in the interest of the British working classes. 
 They are advocated on behalf of the non-producing classes, 
 who wish to preserve for themselves the doubtful boon of
 
 WORKINGMEN AND WAGES 465 
 
 cheapness. The sentiments of these are echoed by the gov- 
 erning class, who see that the abnormal growth of population 
 in the British Isles constitutes a menace recognized by all 
 military critics as one that may prove destructive to the 
 perpetuity of the empire. 
 
 No matter in what aspect we consider the fortunes of 
 English workingmen we are forced to conclude that the 
 outlook is not favorable for them. The remedy for their 
 ills which Rogers recommends, trades unionism, is more 
 likely to convert them into socialists and advocates of state 
 intervention than to benefit them by helping them to main- 
 tain the standard of comfort reached by them during the 
 period when British industry, by reason of its practical 
 monopoly of the manufacturing field, was highly prosperous. 
 English toilers will find that so long as foreign competition 
 is unrestrained the tendency to bring all competitors to a 
 common level of degradation must prove irresistible. 
 
 It is to be feared that this discovery may be made too 
 late and that when the attempt is made to rectify the evil 
 it will lead to a revolution — in all probability a bloodless 
 one — in which the existing order will be overturned and a 
 system of state control substituted in its stead. There 
 are Englishmen who dread this outcome and who do not 
 hesitate to express their fears, but their proposed panaceas 
 and advice are unheeded. They could not prove otherwise 
 than valueless, because they are compounded into a mixture 
 which has unrestrained competition — the cause of all the 
 trouble — as its principal ingredient. 
 
 Turning from the condition of the English to that of 
 the American worker, we find some analogies which may 
 strike the superficial as presenting difficulties as grave as 
 those confronting the British. But there is this substantial 
 difference in the situation : our evils are recognized and 
 may be cured ; those of the English system, though plainly 
 seen, must be endured if free trade is to be retained. Briefly, 
 it may be said that protection, by confining competition to 
 
 30
 
 466 PROTECTION AND PROGRESS 
 
 an area in which all the conditions are equal, or can be made 
 equal, may be made to work advantageously, provided the 
 remedies for abuses of its workings which may be easily 
 applied are not disregarded. 
 
 Let us see whether this claim cannot be maintained. 
 To begin properly it is essential to show that there is no 
 foundation for the assumption of the Cobdenites that the 
 eflFect of protection is to stifle competition. It is true that 
 its purpose is to shut out, as far as practicable, the foreigner 
 from the domestic markets for those articles which can 
 readily be produced at home, but within the protected area 
 competition has free play. That the operation of competi- 
 tion within a protected area may be as conducive to cheapness 
 as world wide competition has already been shown by indis- 
 putable testimony. We have the evidence of English 
 specialists that the iron and steel industry of the United 
 States is now on a footing which makes it an object of dread 
 to British manufacturers, who see the profits of our rolling 
 mills and machine shops driving their own wares out of 
 markets which they have hitherto monopolized. The same 
 concession is made regarding our cotton textiles, many 
 grades of which are successfully sold in the Orient in sharp 
 competition with the products of British and German looms. 
 The tale told by the price lists of the different countries 
 of the world amply corroborates the admissions of the 
 specialists and English trade journals. Our growing exports 
 of manufactured articles confirm the statement that the 
 cheapening of production during the thirty-five years since 
 the close of the American civil war has been as great in the 
 United States as in any country on the globe, and it may be 
 added that during this period, owing to the tremendous 
 stimulus given to production by protective tariflfs in this 
 and other countries, the process of making manufactured 
 articles more accessible to the mass of consumers has gone 
 on more rapidly than at any other time in the history of the 
 world.
 
 WORKINGMEN AND WAGES 467 
 
 That a cheapening- of production should have marked 
 the development of the manufacturing industry in the 
 United States under the protective system is not marvelous, 
 although the Cobdenites have sought to make such a result 
 appear impossible. Their chief mistake was due, as has 
 already been shown, to the erroneous idea that capital for 
 the conduct of manufacturing enterprises would be difficult 
 to acquire and to the notion that manufacturing skill was not 
 widely diffused. These were fundamental errors. Experi- 
 ence has shown that Smith, Mill and all the other economists 
 vastly overrated the difficulties attending the creation of a 
 capital sufficient to carry on manufacturing enterprises, 
 and the prevalent opinion of the Manchester school that 
 the people inhabiting a country of great agricultural re- 
 sources must necessarily be absorbed in the tilling of the soil 
 to such an extent as to unfit them for the cunning and 
 skillful work of the machine shop or factory has been 
 dissipated by an example of manufacturing growth which 
 has amazed the world. 
 
 The horizon of the Cobdenites was entirely too narrow. 
 It was cribbed and confined by the shores of the little 
 island in which the "ism" had its birth. Those adhering 
 to the doctrines of laisses faire were so much impressed 
 by the great strides made by the English in manufacturing 
 that they really imagined that it would be fatal to the rest 
 of mankind to refuse to avail themselves of the comparatively 
 marvelous cheapness resulting from British skill and inge- 
 nuity. It was this belief which gave birth to the confident 
 declaration of the English free traders that protection could 
 not protect and made them predict disaster to those countries 
 resorting to it. Even now the contention that protection 
 is an obstacle to production is not wholly abandoned. We 
 still find professors working in the seclusion of university 
 cells proclaiming that protection represses production and 
 that no country practicing it can hope to build up a great 
 external trade. For writers of this kind the fact that the
 
 468 PROTECTION AND PROGRESS 
 
 exports of domestic products from the United States in the 
 fiscal year 1897-98 were greater than the exports of EnglisTi 
 products in the same year has no special significance, nor 
 are they impressed by the assertions of such competent 
 observers as J. Stephen Jeans, who distinctly proclaim that 
 protection gives a decided advantage to a manufacturing 
 country, because back of the barriers reared by the system 
 the manufacturer may conduct his operations with the assur- 
 ance of good prices that a secure home market gives and 
 relieve himself of his surplus products by dumping them on 
 foreign markets where the aberration of prices can affect him 
 very slightly. 
 
 This declaration of Jeans has been enlarged upon in 
 another connection, but it is necessary to recur to it here 
 because it contains an observation which has a direct bearing 
 on the subject of the well being of the workingman in a 
 protective country. The passage need not be quoted in 
 its entirety, as it is reproduced very fully in another chapter.* 
 After recapitulating the advantages enjoyed by the protected 
 manufacturers of Germany and the United States, Mr. Jeans 
 proceeds thus: "There is method in this arrangement. 
 With production on a large scale standing charges are 
 kept down and the cost of manufacture is lessened, while 
 the workmen, having full and regular wages, are not likely 
 to be so difficult to handle as they would be if — as often 
 happens in England — they were employed only to the extent 
 of one-half or two-thirds of the full time." 
 
 This testimony is invaluable, because it is that of a free 
 trader and a competent critic, Mr. Jeans being secretary of 
 the British Iron and Steel Association at the time he ex- 
 pressed the view quoted. It is well, therefore, to endeavor 
 to grasp the full significance of what he tells us, and also 
 to inquire whether what he has noted may not have other 
 and more far-reaching consequences than he supposes. It 
 is true Mr. Jeans refers to the position of Great Britain 
 
 *Chapter VII, pp. 142, 143.
 
 WORKINGMEN AND WAGES 469 
 
 and intimates that her adherence to free trade will prove a 
 hindrance to her adopting a policy which could success- 
 fully meet such tactics as those described, but he evidently 
 did not fully consider the importance of the question to the 
 workingmen of England. He speaks of the advantage 
 the manufacturer in the protected country may derive from 
 his ability to satisfy his workingmen by giving them full 
 and regular wages, but he does not point out the cause of the 
 disadvantages under which English workingmen must labor 
 so long as Great Britain is subjected to what may be called 
 the process of dumping surpluses on her markets. He says 
 this dumping process can be "effectively met only by the 
 adoption of a similar economic system, which, however, 
 cannot be looked for in England, wedded as she is to free 
 trade, whatever consequences that system may involve." 
 
 Although Mr. Jeans clearly intimates that the result 
 may be disastrous to his countrymen, he shrinks from de- 
 scribing it. He is still under the glamour of the Manchester 
 school and hesitates to unreservedly lay before his readers 
 the fact that England is permitting herself to be deluged 
 with the surplus goods of other countries because her 
 economists are trying to preserve the keystone of the arch 
 of Cobdenism — cheapness, no matter what the cost. But 
 the keystone is rotten and endangers the whole edifice. Mr. 
 Jeans, were he to speak frankly, would be compelled to admit 
 that Great Britain, by the action of the manufacturers of 
 surpluses in the United States and other countries, is menaced 
 by the same danger to which the incipient industries of a 
 protected country are subjected by well established rivals 
 when they make a temporary sacrifice of profits in order to 
 effect the permanent gain of crushing a possible or probable 
 competitor. 
 
 That was the policy, as we have shown elsewhere, of 
 the British in dealing with competitors during the period 
 preceding and following the abrogation of the corn laws, 
 and it proved successful until it was met by the imposition
 
 470 PROTECTION AND PROGRESS 
 
 of high tariffs in the countries threatened with an inundation 
 of British goods. The fact that the rivals Great Britain 
 had to deal with were deficient in capital, while under the 
 reversed conditions she has an abundance, does not materially 
 alter the case. No matter how great may be the accumula- 
 tions of the English it is not likely that they will go on 
 indefinitely dissipating them in unprofitable manufacturing 
 adventures. If the practice described by Jeans is continued 
 and Great Britain consents to receive all the goods offered 
 to her at a less cost than her manufacturers can produce 
 them, the inevitable result must be the extinction of her 
 chief industries. 
 
 This is not likely to be accomplished in a day. The 
 process of constriction will be a slow one and capitalists 
 and workingmen alike will be called upon to endure a great 
 deal while it is in progress. The latter will be powerless to 
 help themselves by means of their trades unions. For a while 
 they may win' victories and by their solidarity succeed in 
 forcing the employer to surrender more and more of his 
 profits. They may even, before the struggle is terminated, 
 succeed in compelling the employer to pay a living wage 
 long after the latter has ceased to make profit, and it is a 
 characteristic of established industry to persist in the face 
 of loss, the hope of something better turning up preventing 
 the owners of capital abandoning their investments until 
 they are absolutely forced to do so. But in the end there 
 must be a surrender, because no manufacturing or other 
 industry can be permanently carried on without hope of 
 profit. 
 
 The abnormal conditions produced in Great Britain by 
 the undue expansion of the manufacturing industry induces 
 many who perceive the drift of the argument of Jeans to 
 believe that it would be impossible for the British to adopt 
 a policy which would afford a reasonable protection to the 
 English producer. They assume that the cheap loaf is essen- 
 tial to the maintenance of the present commercial position of
 
 WORKINGMEN AND WAGES. 471 
 
 the islands and they keep before the v/orkingman a picture 
 of the consequences that might ensue if they were called upon 
 to pay a trifle more for their flour and bacon, but they 
 refrain from discussing the results that might flow from the 
 imposition of protective duties on manufactured goods im- 
 ported into England. It is true the subject is not entirely 
 ignored, but the toiling class'es are never permitted to see 
 that the real beneficiaries of the cheapness resulting from 
 the free admission of foreign manufactures are, as a rule, 
 the members of the well-to-do class. 
 
 In 1896 the imports of manufactured goods into the 
 United Kingdom were valued at £81,250,453. If the English 
 worllcer would examine the items making this total he would 
 see that they almost wholly represent articles which his 
 class never consumes. Silks and other luxuries embrace a 
 large proportion of the whole. As all free traders, from 
 Adam Smith down, are perfectly agreed that the tax on 
 luxuries must be borne by the consumer it can easily be 
 seen that British workingmen are the victims of a deception 
 practiced by the well-to-do classes, who, through their 
 mouthpieces, teach that the people generally are benefited 
 by the cheapening of such products, or, to put it in another 
 way, that the workers would be injured by raising the prices 
 of such luxuries to consumers. 
 
 It ought to be plain that the enhancement of the cost 
 of kid gloves to the class wearing them could not prove 
 injurious to the working people who never see such articles 
 except in the shop windows or on the hands of those who 
 do not toil for a living, and it ought to be equally clear that 
 if, by the imposition of a protective tariflf, a glove industry 
 could be created and maintained in England which would 
 give employment at remunerative wages to a large number 
 of people the working class would be benefited even though 
 the consumers of gloves were obliged to pay more for the 
 domestic production. 
 
 The English once maintained a profitable silk spinning
 
 472 PROTECTION AND PROGRESS 
 
 and weaving industry that finally succumbed to the encroach- 
 ments of cheaper foreign labor, because the silk products 
 of other countries were freely admitted into the United 
 Kingdom. In 1896 the value of the manufactured silks 
 imported into the British Isles was £16,707^103. What 
 proportion of this amount of imported silks was consumed 
 by the well-to-do classes no one can state with exactness, 
 but there is reason to believe that fifteen-sixteenths of the 
 entire quantity of foreign silk goods brought into England 
 is purchased by the rich non-producer, only an infinitesimal 
 part being used by the workers in the shape of cheap ribbons, 
 etc. Will anyone seriously assert that the working people 
 of England would have been injured if a tariff on silks suffi- 
 cient to protect the manufacturer had been maintained, thus 
 preventing the extinction of a profitable industry? If so, 
 they are referred to the experience of the United States, 
 in which country, under a high protective tariff, an enormous 
 silk spinning and weaving industry, surpassing in magnitude 
 that of any other nation, has been built up. And concurrently 
 with its upbuilding, it may be added, there has grown a taste 
 among the American working people for silk fabrics, accom- 
 panied by the ability to gratify it, a phenomenon witnessed 
 in no country where living is cheap and wages are low. 
 
 It is not necessary to go through the whole list of 
 English imports to establish the fact that free trade inures 
 more largely to the advantage of the non-producing classes 
 than to the workers. Even in the matter of food products 
 it is seen that a large proportion consists of articles chiefly 
 consumed by the well-to-do. How many of the 13,244,893 
 great hundreds of eggs imported into England in 1896 were 
 consumed by the working classes ? Some, no doubt ; but the 
 major part were eaten by people who could easily have paid 
 a slight advance in the price which a protective duty might 
 have caused, and the sacrifice demanded of them could not 
 have affected the masses, because the consumer of luxuries 
 cannot shift the tax. How much of the 3,037,947 cwt.
 
 WORKINGMEN AND WAGES. 473 
 
 of imported butter was consumed by English workingmen, 
 and what quantity of the fine wines and spirits, the duties 
 upon which are carefully countervailed by a domestic excise, 
 falls to his lot ? Is it not a mockery to say that the cheapness 
 of these things benefits the British workingmen, especially 
 when it can be so easily demonstrated that their free en- 
 trance is compelling the domestic producer to sell his prod- 
 ucts at a loss or go out of the business entirely ? 
 
 Instead of Great Britain being a poor field for the 
 operation of the protective system it is really one in which 
 it might be made to work admirably. Unless it is assumed 
 that the higher cost of such competing articles as are now 
 imported into England duty free would have the effect of 
 driving the well-to-do classes who absorb nine-tenths of 
 the British revenues from trade, commerce and other sources 
 to other lands, it must be admitted that working people 
 would be the gainers by a resort to a policy which had for 
 its object the shifting of the incidence of taxation so that 
 the chief burden would fall upon those best able to bear it, 
 and not upon workingmen whose wages are, by the pressure 
 of competition, pressed to the subsistence limit. 
 
 Such a change of system would undoubtedly make 
 England a dearer country for the well-to-do to live in, but 
 it would make it a better country for the workingman, as it 
 would permit the successful operation of the principle of 
 labor organization within the area of the United Kingdom. 
 That trades unionism cannot achieve its object unless there 
 is a definite area in which it can enforce its rules without 
 risk of outside interference ought to be apparent to the 
 least critical. What profit can the workingmen of England 
 derive from standing together if the rest of the world's 
 workers are banded against them? If the unions of the 
 United Kingdom combine to keep up the wages of labor and 
 the result of their combination is to invite the foreign 
 producer to send his wares to fill the demand which arises 
 during the period while he is waging the conflict with his
 
 474 PROTECTION AND PROGRESS 
 
 employers, and if the foothold thus gained is permanently 
 maintained, the English workingman must be a loser and not 
 a gainer 
 
 This is an experience through which English workingmen 
 have recently passed. It is admitted on every hand that the 
 net result of the "engineers' " strike of 1897 was a positive 
 loss to British industry inasmuch as there are decided indi- 
 cations that during the period while it was in progress 
 foreign producers of machinery managed to successfully 
 introduce their wares into the English home market, and 
 in many instances succeeded in supplanting British machin- 
 ery in markets where it formerly met with little or no rivalry. 
 The London Standard, speaking of the results of the strike 
 referred to, adduced evidence showing a considerable loss 
 of the export trade o'f machinery, the Germans having taken 
 advantage of the strike to invade markets once held by the 
 English, and the editor incidentally remarked that "experi- 
 ence teaches that where German traders once gain a footing 
 they never relinquish it." The Pottery Gazette, an English 
 publication, discussing the effects of strikes on the British 
 glass industry, declared that it had been ruined by the action 
 of unions. "If it had not been for the blind policy of the 
 men's societies," remarked the Gazette, "the pressed glass 
 trade of the north of England would have found work for 
 hundreds where it now employs units. When our pressed 
 glass workers quarreled with their bread and cheese, orders 
 for pressed goods went to Belgium and France, and they 
 have gone there ever since." To this was added an inquiry 
 which had the air of a prediction. "We have," said the 
 writer, "had instances of great national industries being lost 
 to us by the attitude of the workers in them. Is the glass 
 trade to be added to them?" 
 
 The deduction that the Pottery Gazette drew from these 
 circumstances and actions was that it is absurd for the 
 English workingmen to involve themselves in contests which 
 result in the destruction of the industry from which they
 
 WORKINGMEN AND WAGES. 475 
 
 derive their livelihood. No matter what may be the bias 
 of the writer, his judgment in this instance is unimpeachable. 
 There can be no doubt whatever that English trades union- 
 ism will be powerless to prevent the impairment of the 
 standard of comfort attained by the workers of Great Britain 
 while the trade doors of the country are permitted to stand 
 wide open. It is worse than folly for the unionists to resist 
 reductions of wages made necessary by the competition of 
 foreigners when the inevitable outcome of success would 
 be the destruction of the industry in which they are engaged. 
 As already remarked, labor organizations have the power to 
 compel employers to surrender a larger proportion of their 
 profits to the wage earner, but they cannot force capital 
 to conduct enterprises at a loss. Therefore, when a strike 
 is inaugurated in a free trade country which has for its 
 object the preservation of the existing scale of wages it must 
 prove unsuccessful if the strikers are engaged in the manu- 
 facture of an article which, owing to cheaper labor, can be 
 produced more cheaply in other countries. In such cases 
 the suspension of work by the strikers is the signal for the 
 invasion of the country by the foreigner with his cheaper 
 goods, and if the strikers are unyielding the result is perma- 
 nent occupancy of the home market by the foreigner and the 
 displacement of the native product. 
 
 It has been the dream of some trades unionists that 
 an international combination of workingmen might be 
 effected, but no sane person believes that this can be accom- 
 plished. The conditions vary so greatly in different nations 
 it is inconceivable that a common agreement as to hours 
 of labor and rates of wages could be reached. Moreover, 
 there is an obstacle in the way of a desire for such agreement 
 which is almost insuperable, namely, the feeling on the part 
 of those who are backward in the race that is is only by 
 greater exertion that they can keep up with the march of 
 progress. Perhaps the sentiment is not as well defined 
 as this language would imply, but that the disposition to put
 
 476 PROTECTION AND PROGRESS 
 
 forth greater exertions exists in some countries where the 
 quality of labor is rated lower than in England is notorious, 
 and there is good reason to believe that it cannot easily 
 be changed. It certainly will not be by such appeals as the 
 English trades unionists send forth, which often take the 
 form of an assurance to the competing foreign workingman 
 that if he would fight fairly by asking as high wages and by 
 insisting on working as few hours as the British workman 
 the latter would deprive him of all opportunity to earn a 
 living. 
 
 Lecky tells us that "the idea of an international regula- 
 tion of labor has of late years spread widely. It has been 
 proposed in several workingmen's congresses and in 1881 
 and again in 1889 the Swiss Federal Council invited the 
 leading powers of Europe to join in a conference on the 
 subject. The invitation was not warmly received, but in 
 1890 the Emperor of Germany took up the subject, and at 
 his invitation the representatives of fourteen states assembled 
 in Berlin. They soon decided that they could do no more 
 than submit some very platonic recommendations to the 
 public, without attempting in any way to enforce their deci- 
 sion or even bind the governments they represent." The 
 conception of such an idea indicates the lengths to which 
 men will go in the direction of making themselves absurd in 
 their efforts to escape the consequences of methods which 
 the world has tacitly agreed to accept and continue as the 
 best that can be adopted to insure the progress of the human 
 race. The desire to retain the competitive system, and the 
 apprehension that state socialism might prove disastrous, 
 caused men who can think clearly enough when other sub- 
 jects are under consideration to imagine that an almost 
 ineradicable sentiment could be overcome — that of nation- 
 ality — and that peoples animated by different political aspira- 
 tions and with totally different ideals of life could agree 
 upon a proposition which involved the necessity of their
 
 WORKINGMEN AND WAGES. 477 
 
 refraining from making sacrifices which might put them on 
 a level with or give them a superiority over rivals. 
 
 In antiquity and in the days of chivalry the opposing 
 combatants sometimes stepped forth from the ranks to do 
 battle for their respective sides, both armies agreeing to 
 abide by the result. Those days and manners have passed. 
 Now when nations engage with each other, while the strug- 
 gle rarely carries the combatants to the last ditch, it is 
 usually maintained until one of them feels that he can gain 
 no further advantage. So, too, in commercial warfare. 
 The fight is always for advantage; and while it may be 
 admitted that exchanges freely made represent a gratification 
 of desire on both sides, there can be no doubt that each 
 party to a trade seeks to make as much profit as he can out 
 of the transaction. 
 
 In a large sense nations are animated by the same motive. 
 The sentiment which we designate as patriotism is always 
 strongest in those countries in which the national wealth 
 is the symbol of power. This is natural. The land which 
 affords the masses an opportunity to earn a living is worth 
 struggling for. That which merely permits existence can 
 never inspire the same feeling. The recognition of this 
 fact is at the bottom of all intelligent struggles for national 
 advantage. The free trader who endeavors to inculcate 
 the belief that unrestrained commercial intercourse tends to 
 the preservation of peace also teaches that it will increase 
 the national wealth. It is impossible to believe that the 
 policy he advocates would have many adherents if he failed 
 to do so. The imagination cannot be fired by pointing out 
 that the whole world will be equally benefited by pursuing 
 a certain course. It is noteworthy that Cobden and his fol- 
 lowers, while teaching that all mankind would profit by free 
 trade, were careful to point out that Great Britain would 
 be an enormous gainer and that her already swollen coffers 
 would be filled to overflowing if other nations could be per-
 
 478 PROTECTION AND PROGRESS 
 
 suaded that their interests would be advanced by making 
 England the world's workshop. 
 
 There is no escape from the logic of these facts ; there- 
 fore, if mankind is indisposed to abandon the incentive to 
 progress which competition is universally recognized to be, 
 steps must be taken to regulate it. The chafing against the 
 existing order, if carefully investigated, will be found to 
 be largely due to a perception of the fact that the terms 
 of the race are not fairly arranged. The element of fairness 
 is never considered. The major part of those who enter 
 the competition are heavily handicapped with disadvantages. 
 These must be removed before discontent can be appeased. 
 A lesson will have to be taken by statesmen from the race- 
 course, where the owner of a horse of acknowledged supe- 
 riority is only permitted to enter his animal on condition that 
 he conforms to certain regulations designed to remove the 
 disparities of contestants. 
 
 At bottom, this is the theory of the English trades 
 unionists, but it does not work well in practice, because the 
 field of contest chosen by Great Britain is the whole world, 
 which refuses to be bound by the regulations that the 
 British seek to prescribe. But the conditions are different 
 in a protectionist country such as the United States. Be- 
 hind the barrier of a protective tariff it is possible to so 
 arrange matters that the competitive contest will be con- 
 ducted on reasonably fair terms. If the trades organiza- 
 tions succeed in effecting combinations they are not men- 
 aced by the apprehension of the foreign competitor when 
 they seek to carry their designs into execution. It would 
 hardly be possible for the employers of a country with a 
 high protective tariff to stand out against the just demands 
 of workingmen. It is only the pressure of competition 
 that forces employers to proceed to extremes, and when 
 that from foreign countries is removed the incentive is 
 reduced to a minimum. John Bright, in the letter quoted 
 from in the beginning of this chapter, warned the Amer-
 
 WORKINGMEN AND WAGES 479 
 
 ican manufacturers that they would have trouble on this 
 score. He told them plainly that "protection would not 
 content itself with enriching manufacturers, but will be 
 called in to give higher wages and shorter hours of labor 
 to your (American) workmen." 
 
 So it has, and strange to say, although Mr. Bright chose 
 to ignore the fact, it is on that ground that the American 
 people support the protective policy. They doubtless recog- 
 nize that manufacturers sometimes become rich, but they do 
 not lose sight of the necessity of permitting his employes 
 to earn a living wage, and to that end they encourage legis- 
 lation which directly aims at the preservation of the free- 
 dom of labor. The alien contract labor laws were framed 
 for the purpose of diminishing the fierceness of the struggle 
 for work by depriving employers of the privilege of import- 
 ing help from other lands at lower wages. The laws passed 
 to prevent Chinese laborers entering the United States had 
 the same motive and were enacted in response to the 
 demand to exclude from competition with American labor 
 a class of workers who are notoriously disinclined to raise 
 their standard of living or to adopt customs which would 
 put them on the same plane of expenditure as the worker 
 in this country. And consistent with these regulations are 
 those which practically exclude from the country, by com- 
 pelling them to pay a high tariff for the privilege of enter- 
 ing our markets all goods produced by the classes who are 
 shut out by the operation of our immigration laws. 
 
 The admitted effect of these laws and regulations is to 
 keep up the real wages of American labor, and while pro- 
 tection is the national policy it will always be possible 
 to confine competition within bounds which will make it 
 fair to those obliged to compete. It is not contended here 
 that the system has always worked perfectly in practice in 
 the United States, but it is asserted that under it the work- 
 ingman enjoys opportunities which free trade denies him. 
 In short, the combinations of trades unions may be made
 
 48o PROTECTION AND PROGRESS 
 
 thoroughly effective in a protective country, but cannot 
 possibly be made so where there is absolute freedom of 
 intercourse between nations. If workingmen in the United 
 States fail to reap the advantages described, deficient organ- 
 ization and not lack of opportunity must be held respon- 
 sible. Protection in a country where the workingmen may 
 be the chief factor in the making and administration of the 
 laws is the means by which trades unionists can achieve 
 their purpose of securing a fair share of the wealth pro- 
 duced by the laboring classes ; such organizations in free 
 trade countries are powerless to combat the logical results 
 of unrestrained competition, which are to degrade all com- 
 peting workers to a common level. 
 
 That the labor unions of the United States work im- 
 measurably more effectively for the workingmen com- 
 posing them than similar organizations in England, despite 
 the better government and regulation of those of the latter 
 country, is proved by a variety of circumstances. Lecky 
 observes that "extraordinary development of labor-saving 
 inventions in the United States is probably largely due to 
 the great cost of American labor."* In a country where 
 wages are low the incentive to resort to labor-saving de- 
 vices is never very strong and their use is always resisted, 
 passively or actively, by the workers in low standard coun- 
 tries. It is a significant fact that in free trade England 
 during recent years improvements in production by means 
 of automatic machinery have been antagonized by the 
 trades unions, while in the United States workingmen rarely 
 oppose the introduction of labor-saving machinery. It is 
 noteworthy that the feeling so prevalent in Europe that 
 the tendency to improve methods of production more 
 rapidly than effective distribution can be promoted is in- 
 jurious to the workingmen is not widely diffused in this 
 country — although the development of the resources of 
 
 *Lecky, Democracy and Liberty, Vol. II, p. 459.
 
 WORKINGMEN AND WAGES 481 
 
 the United States is proceeding at a pace which makes that 
 of rival nations seem slow. 
 
 There can only be one explanation of this comparative 
 apathy regarding automatic machinery, and that is that 
 there is a feeling that in this country the masses have a 
 chance of sharing in the benefits flowing from the rapid 
 increase in the production of wealth. They realize that 
 the protective system acts as a barrier against the encroach- 
 ments of foreign labor, and they are confident that so long 
 as they can restrict competition to an area in which all the 
 competitors are on a common footing they can hold their 
 own against the tendency to drive wages to the limit of 
 subsistence. This sense of security accounts for the com- 
 parative weakness of the socialistic propaganda in the 
 United States, a circumstance that has attracted the atten- 
 tion of observant foreign critics of American institutions. 
 One of these recently remarked : "Certainly the plague of 
 idleness and suffering exists even in America, but there is 
 not to be found there that canny proletariat which the 
 sociologists of this end of the nineteenth century declare to 
 be one of the most marked characteristics of the period in 
 the old world."* 
 
 It is reasonably certain that the American workingmen, 
 who, as this writer observes, are ready enough on occasion 
 to enter upon the most obstinate of strikes, would not show 
 the freedom from chronic discontent generally witnessed in 
 the old world, in England as well as on the continent, if 
 they did not feel assured that they were secured against 
 the degrading eflfects of unrestrained competition. There 
 must be some foundation for the assumption of Emil Levas- 
 seur, who, in his book on the American artisan, brings out 
 the fact that "it is the workman who has gained most by the 
 improvement of machinery" in the United States. On the 
 
 *Fiamingo, "Social Conditions in America," translated for Living 
 Age from Nuova, Antologia, Rome, Italy. 
 81
 
 482 PROTECTION AND PROGRESS 
 
 other hand numerous EngHsh writers admit that the share 
 of the British workers in the benefits flowing from labor- 
 saving machinery is small compared with that enjoyed by 
 those who really played no part in calling it into existence. 
 There must be some explanation of this striking difference 
 in results, and the only one suggested which seems at all 
 satisfactory is that now advanced, that the protective system 
 so intrenches the American workingman that through the 
 instrumentality of trades unions he can compel the employer 
 to recognize his right to a share in the profits derived from 
 the use of labor-saving machinery and appliances. 
 
 It has often been urged by economists that the admit- 
 tedly superior condition of the American workingman is 
 due to the abundance of land in the United States. This 
 view, however, is not tenable. The history of labor in this 
 country demonstrates conclusively that it was most wretch- 
 edly remunerated when land was most easily obtained. In 
 other places in this volume it has been shown that the pov- 
 erty among the early settlers of Virginia and the other 
 colonies was often extreme. That was the condition of 
 affairs in the early part of the present century when mil- 
 lions of acres of the most fertile land under the sun could be 
 had for the taking. During the administration which wit- 
 nessed the outbreak of the American Civil War the then 
 President sent a message to Congress in which he deplored 
 the fact that trade and manufacturing industry were pros- 
 trated and that men were out of work and in great misery 
 in the midst of great agricultural prosperity.* 
 
 In the face of evidence of this kind it is idle to assert 
 that the American workingman owes his ability to maintain 
 a higher standard of comfort than the toilers of any other 
 part of the globe ever succeeded in reaching to the abund- 
 ance of free land. It is not denied that the facility with 
 which transfers of land may be effected in the United 
 
 ♦Message of President James Buchanan.
 
 WORKINGMEN AND WAGES 4»3 
 
 States has tended to destroy the advantage which the ac- 
 cumulation of the land in the hands of a few affords, and 
 thus prevented a condition of affairs such as that exist- 
 ing in England, where the greater part of the soil is mo- 
 nopolized by the few. But it is contended by protectionists 
 that this dispersal of the land among the vast numbers of 
 separate owners — there were 4,097,907 different proprietors 
 of farming land in the United States in 1880, and the num- 
 ber increased to 4,564,641 in 1890 — was only made possible 
 by the protective system. Had free trade been adopted in 
 this country there can hardly be any question but that it 
 would have resulted in the creation of enormous farming 
 estates upon which the opportunities for employment would 
 have been reduced to a minimum. The separate ownership 
 of millions of small farms in the United States is almost 
 wholly due to the fact that the proximity of manufacturing 
 centers has permitted their owners to earn more than a bare 
 living. 
 
 Had we permitted foreign countries to supply our de- 
 mand for manufactured articles the condition of the greater 
 part of the country would have resembled that of those por- 
 tions of the South wholly dependent upon the profits of cot- 
 ton culture. Excessive competition has made this pursuit 
 so unprofitable that the usual fate of the planter is to be in 
 perpetual bondage. Is it at all likely that the grower of 
 cereals would have been in much better case if the manu- 
 facturing industry of the United States had not been called 
 into existence ? Is it not plain to everyone that the enormous 
 agricultural advances of the United States are due to the 
 diversification of the pursuit compelled by the development 
 of innumerable centers of manufacturing industry? And, 
 therefore, is not agriculture the beneficiary of the protective 
 system rather than manufactures? To say that the abund- 
 ance of land is the cause of the prosperous condition of the 
 American workingman is as idle as it would be to assert 
 that the existence of a reclaimable desert is a blessing to
 
 484 PROTECTION AND PROGRESS 
 
 the country owning it. There are plenty of nations con- 
 taining such possessions, but the ownership of them has not 
 elevated the condition of the workers. 
 
 The United States contains large areas which are rapidly 
 being brought under cultivation that were once regarded 
 as desert. The application of water to these at one time 
 unfertile regions is making them "blossom as the rose." 
 The redemption which is being effected by the agency of 
 water in these hitherto desert regions presents a close an- 
 alogy to the result produced by protection in calling into 
 use all of the available portions of our vast possessions. 
 There are oases in all deserts and their soil may be made to 
 produce liberally, but it requires water to redeem the dry 
 parts. In the same way there might have been a sporadic 
 development of the soil and resources of the United States 
 had a policy repressive of manufacturing been encouraged, 
 but it required the mighty stimulus of an enormous manu- 
 facturing industry to promote the cultivation of the whole 
 of our immense national domain.
 
 CHAPTER XX. 
 
 EQUALIZATION OF CONDITIONS. 
 
 THE IMPORTANT FUNCTION PERFORMED BY PROTECTIVE TAR- 
 IFFS. 
 
 Two kinds of dearness — The high prices resulting from scarcity and 
 those due to a higher standard of living — Cheapness responsible 
 for trade depression in England — Smith's recommendation that 
 the luxuries of the poor should be taxed — The incidence of Brit- 
 ish taxation — A protective tariff does not permanently raise the 
 cost of the protected article to the consumer — American con- 
 sumers enjoying low prices in the face of high duties — Effects 
 of the protective tariff in compelling improvements in produc- 
 tion — Consumption increases more rapidly in protective than 
 in free trade countries — The free trade idea that protectionists 
 aim to permanently increase prices — Trusts can only be ef- 
 fectually curbed under a protective system — A protective tariff 
 necessary to prevent the transfer of industries to cheap labor 
 countries — What the bounty system has done for Germany and 
 the consumer of sugar — Protection as a regulator of produc- 
 tion — The necessity of equalizing the conditions produced by 
 the exemption of industries from taxation — The cost to the 
 British taxpayer of forcing external trade — Enormous increase 
 of naval expenditure with no corresponding increase of British 
 trade — The income tax unjust and impolitic — The moot question 
 whether the tariff is a tax. 
 
 In the preceding chapter evidence was adduced to show 
 that there is no foundation for the assumption that the 
 cheapening of commodities specially benefits the producing 
 classes. It was also shown that in countries of relative 
 dearness, such as the United States, the lot of the working- 
 man is immeasurably better than it is in lands where cheap- 
 ness prevails. In the further discussion of this subject it 
 
 48s
 
 486 PROTECTION AND PROGRESS 
 
 will be well to emphasize the fact that clearness may be due 
 to two different causes, or, to put it more plainly, there 
 may be a dearness that results from scarcity or one due to 
 the higher plane of living of the masses. 
 
 In countries where famine sometimes prevails the spec- 
 tacle of starving multitudes may be witnessed, and yet a 
 resort to the ordinary methods by which the general level 
 of prices is ascertained will disclose a marvelous cheapness 
 of all products except such as constitute the food of the 
 masses. During the recent famine in India the price of 
 most commodities and of personal service remained sub- 
 stantially the same. A comparison of the cost of living in 
 India during the famine period with that in the United 
 States would show that although millions were dying of 
 hunger in the former country a man with a fixed income 
 could purchase more of the necessaries of life than he could 
 with a similar revenue in this country. In the United States 
 it has been shown that great distress has at times existed in 
 the midst of agricultural plenty and while the prices of food 
 and other products were excessively low ; and, on the other 
 hand, general prosperity has been witnessed during eras 
 of high prices for commodities and personal services. It 
 may also be noted with profit that the condition of the Eng- 
 lish masses was much better during the period when the 
 average of prices was higher than it is now. These facts 
 make a serious breach in the cheap loaf argument and they 
 have attracted much attention recently, and are causing 
 thinking Englishmen to ask whether a blunder was not 
 made in removing the duty from corn. 
 
 Lecky on this point remarks that "tTie political evil of 
 narrowing the basis of taxation is a real one, and even in its 
 purely economical aspects the reaction against the abuses 
 of the old fiscal system seems to have been carried too far. 
 It is not probable," he says, "that a single loaf of bread 
 was made cheaper by the abolition in 1869 of the shilling 
 registration duty on corn." In the same connection, speak-
 
 EQUALIZATION 487 
 
 ing of the abolition of the small duty on coal abolished by 
 the London County Council, he tells us "there is no reason 
 to believe that any human being except a few rich coal 
 owners and middlemen derived any benefit from its aboli- 
 tion."* 
 
 The question of the incidence of taxation here raised 
 will be considered later. In this place attention is merely 
 directed to the admission that the removal of a duty by no 
 means always inures to the benefit of the productive con- 
 sumer, but may be wholly absorbed by the middleman. 
 That this result followed the abandonment of the protective 
 policy in England can easily be demonstrated. Reference 
 to the index numbers of Augustus Sauerbeck shows that 
 the number for the period from 1843-52 was eighty-two, 
 while that for the years 1864-72 was 102. Since 1872 there 
 has been a steady decline, the number for 1885-94 being 
 sixty-nine and that for the year 1894 sixty-three. 
 
 By general consent the period between 1850 and 1873 
 is regarded as the most prosperous in the history of British 
 industry. Yet, according to the unimpeachable testimony 
 of Sauerbeck, during the twenty-three years mentioned 
 prices were constantly rising, the advance over those ruling 
 in the final years of protection in England being nearly 20 
 per cent. During the progress of this upward movement 
 there is no recorded protest or complaint of English work- 
 ers. If the enhanced prices of the commodities he con- 
 sumed affected him injuriously he was evidently uncon- 
 scious of the fact. But, singularly enough, as soon as prices 
 of commodities began to decline the toilers lifted up their 
 voices. The loaf was certainly growing cheaper, but it 
 was becoming more and more difficult to obtain the pennies 
 with which to buy it. 
 
 About the middle of the decade 1880 the industrial 
 trouble became so acute in England that a Royal Commis- 
 
 *Lecky, Democracy and Liberty, Vol. I, p. 159.
 
 488 PROTECTION AND PROGRESS 
 
 sion was appointed to ascertain the causes of the existing 
 depression. It sat several years, gathered a vast quantity 
 of evidence and made a report which may be dealt with 
 elsewhere, but does not concern us here further than to 
 observe that the dissidents on the main question, which was 
 one affecting the standards of money, were agreed upon one 
 thing, namely, that in some inscrutable fashion low prices of 
 commodities were the cause of the depression. There was 
 a marked difference of opinion as to what caused the low 
 prices, but no member of the commission undertook to 
 demonstrate that the British workingman was better off be- 
 cause he was able to buy such articles as he consumed at 
 an average cost of twenty per cent less than he could dur- 
 ing the decade beginning in 1870.* 
 
 It is remarkable that most writers whose opinions con- 
 form to those of the Manchester school have deliberately 
 ignored the lesson taught by this advance and recession of 
 prices and the attendant circumstances. It is the more puz- 
 zling because the apostles whose theories they profess to 
 reverence had plainly indicated that some such result as that 
 told by the story of the index numbers and the researches 
 of the Royal Commission must logically follow the adoption 
 of a system of unrestrained competition and a resort to the 
 fiscal methods advocated by Adam Smith, the avowed pur- 
 pose of which was to make the toiler bear as large a part of 
 the burden of taxation as could be safely imposed upon him. 
 The evasion can only be explained by assuming that the 
 brutal frankness which marked the discussion of economics 
 in Smith's book could not be ventured upon in these days ; 
 therefore, writers influenced by the nineteenth century spirit 
 which has, in discussion at least, compelled recognition of 
 the rights of the worker, have deliberately avoided refer- 
 ence to the showing made before the Royal Commission, and 
 have instead, endeavored to make the eighteenth century 
 
 ♦"Bimetallism or Monometallism," Young.
 
 EQUALIZATION 489 
 
 views of Doctor Smith harmonize with nineteenth century 
 conditions. Had they honestly analyzed the evidence pre- 
 sented before the commission they would have seen how 
 completely at variance recent experience is with teachings 
 they are vainly seeking to symmetrize. 
 
 It is sheer hypocrisy to attempt to make the modern 
 workingman believe that the man who is credited with the 
 origination of the free trade idea was inspired by the desire 
 to elevate the condition of, the masses. Adam Smith lived 
 in a period when the toiler was regarded as little better than 
 a slave, and his economic ideas ran in a groove which pre- 
 vented his looking forward to a better future for the free 
 workingman than that of a perpetual bondsman. That this 
 does not misrepresent Smith's attitude every careful student 
 of the Scotchman's work will admit. Commenting on an 
 opinion expressed by another cold-blooded theorist who 
 thought that a workingman ought at least to be permitted 
 to earn enough wages to bring up two children in order to 
 propagate the species, Smith says: "The labor of an able- 
 bodied slave, the same author adds, is computed to be worth 
 double his maintenance; and that of the meanest laborer, 
 he thinks, cannot be worth less than that of an able-bodied 
 slave. Thus far at least it seems certain that in order to 
 bring up a family the labor of the husband and wife to- 
 gether must, even in the lowest species of common labor, 
 be able to earn something more than what is precisely neces- 
 sary for their own maintenance; but in what proportion, 
 whether in that above mentioned, or in any other, I shall 
 not take upon me to determine."* 
 
 The careless student of Smith may think that this re- 
 fusal to determine whether the reward of a free worker in 
 an industrial society should be greater than that of a slave 
 is merely the result of inability to decide whether under any 
 economic system it would be possible to elevate the condi- 
 
 *Smith, Wealth of Nations, Book I, Chap. VIII.
 
 490 PROTECTION AND PROGRESS 
 
 tion of the masses, but there are too many other passages 
 showing the actual workings of the learned doctor's mind to 
 permit anyone to labor long under the impression that he 
 thought there should be other beneficiaries of the increase 
 of the national wealth than the class to which he belonged. 
 His strictures on the subject of trade combinations show 
 the trend of his thought. "People of the same trade," he says, 
 "seldom meet together even for merriment and diversion, 
 but the conversation ends in a conspiracy against the public 
 or in some contrivance to raise prices. It is impossible, in- 
 deed, to prevent such meetings by any law which could be 
 executed or would be consistent with liberty and justice. 
 But though the law cannot hinder people of the same trade 
 from sometimes assembling together, it ought to do nothing 
 to facilitate such assemblages, much less to render them 
 necessary."* 
 
 This was the view of trades unions accepted by the 
 early Cobdenites. Bright and Cobden looked upon them 
 just as Smith did. All attempts to resist the inevitable 
 presure of the workingman to the limit of subsistence which 
 attends unrestrained competition was regarded as a con- 
 spiracy against the public welfare. Labor combination in- 
 terfered with the operation of a law calculated to keep 
 workingmen in a state of subjection ; therefore the manufac- 
 turer in free trade England was heartily opposed to trades 
 unions. It is sometimes assumed that this opposition was 
 not purely selfish, but was due to the belief that only by the 
 laboring classes consenting to fiercely compete with each 
 other for the opportunity to earn a living could production 
 be sufficiently stimulated to meet the growing wants of the 
 human race. But this assumption is not borne out by the 
 facts. A little research will show that the motives which 
 induced the peace-loving Cobden and Bright to bitterly 
 antagonize legislation preventing young children being 
 
 ♦Smith, Wealth of Nations, Book I, Chap. X.
 
 EQUALIZATION 491 
 
 worked to death in factories or to improve the sanitary con- 
 dition of workshops were precisely the same as those which 
 operated when England finally elected to adopt the system 
 of taxation recommended by Adam Smith. 
 
 Let us gather from Smith's pages his views on the sub- 
 ject of taxation and his recommendations regarding its in- 
 cidence. First let us consider his declaration that "the 
 advanced price of such manufactures as are real neces- 
 saries of life, and are destined for the consumption of the 
 poor, of coarse woolens, for example, must be compensated 
 to the poor by a further advancement of their wages. The 
 middling and superior ranks of people, if they understand 
 their own interest, ought always to oppose all taxes upon 
 the necessaries of life, as well as all direct taxes upon the 
 wages of labor. The final payment of both one and the 
 others falls altogether upon themselves, and always with a 
 considerable overcharge."* 
 
 Does this advice convey any other impression than the 
 one we assert it does? Is it not addressed to the class to 
 which Smith belonged, and does it not distinctly show that 
 he was convinced that the effects of unrestrained competi- 
 tion would be to reduce the wages of labor to the limit of 
 subsistence? On what other theory can his assertion that 
 a tax on the workingman's necessaries must be borne by the 
 superior class be explained? The argument designed to 
 show that the workingman has some luxuries which can be 
 reached by the tax gatherer does not impair the force of 
 Smith's conclusion, for he makes it clear that the luxuries of 
 the workingman which he has in mind are mainly what we 
 would today call necessaries. "By necessities I under- 
 stand," says Smith, "not only the commodities which are 
 indispensably necessary for the support of life, but whatever 
 the custom of the country renders it indecent for creditable 
 people, even of the lowest order, to be without."t 
 
 *Smith, Wealth of Nations, Book V, Chap. II. 
 tibid, Book V, Chap. II.
 
 492 PROTECTION AND PROGRESS 
 
 Therefore, if in the eager struggle for life in England 
 the workingnian consents to a reduction of wages which 
 will compel his class to abandon the use of any of the things 
 he now considers indispensable to a comfortable existence 
 the things abandoned or unattainable cease to be necessaries. 
 If we conceive of the British workingman, under the pres- 
 sure of foreign competition, foregoing the use of shoes 
 made of leather Smith's definition would oblige us to regard 
 leather shoes as a luxury. If the pressure were great enough 
 to largely increase the number of bare backs to which refer- 
 ence is made by Carlyle shirts would have to be put in the 
 same category, for general disuse of such articles of raiment 
 would render it decent for people to live without them. 
 Finally, it may be assumed that if no resistance were offered 
 by the workingman his condition would become the same 
 as that of the slave who enjoys no luxury except by permis- 
 sion of his master or by theft. 
 
 When these facts are considered we are appalled by 
 the selfishness of the suggestion that it is a duty which 
 the superior and middling classes owe to themselves to take 
 care to attack by taxation what little a workingman may, by 
 fortuitous circumstances, gain beyond his mere subsistence. 
 This is what Smith deliberately does. "It must always be 
 remembered," he says, "that it is the luxurious and not the 
 necessary expense of the inferior ranks of people that ought 
 ever to be taxed. The final payment of any tax upon their 
 necessary expense would fall altogether upon the superior 
 ranks of people, upon the smaller portion of the annual 
 produce and not the greater. Such a tax must in all cases 
 either raise the wages of labor or lessen the demand for 
 it."* 
 
 The superior and middling ranks in England since 1848 
 have consistently followed this advice. It took nearly three- 
 quarters of a century for the beneficiaries of the system 
 
 ♦Smith, Wealth of Nations, Book V, Chap. II.
 
 EQUALIZATION 493 
 
 to convince the masses that the poHcy of excusing the rich 
 consumer from taxation was to their interest, but the diffi- 
 cult task was finally accomplished by dangling the cheap 
 loaf before the eyes of the workingman. Since that time 
 things consumed by the poorer classes which Smith's elastic 
 definitions make luxuries are made to bear half of the 
 burden of English taxation, and as he tells us positively that 
 "taxes upon such consumable goods as are articles of luxury 
 are all finally paid by the consumer," we have presented to 
 us the extraordinary spectacle of that ninety per cent of 
 the population, which enjoys only ten per cent of all the 
 revenues of the United Kingdom, paying a greater propor- 
 tion of the taxes than the one-tenth who manage to secure 
 nine-tenths of all the revenues. 
 
 The injustice of such a system is not only disguised by 
 the free trader, but, singularly enough, by disregarding the 
 teachings of the apostle he professes to reverence he has 
 managed to make the weak of intellect believe that a tax on 
 the necessaries of life can be extracted from the working 
 classes. One of the most widely employed arguments of 
 the free trader in the United States is that the tariff 
 on the commoner articles consumed by the working 
 classes inflicts a peculiar hardship on them. No free trader, 
 however, seems to be conscious of the fact that in making 
 a contention of this kind he is flying in the face of Smith's 
 axiom that "whatever raises the prices of necessary articles 
 of subsistence must necessarily raise wages." And rarely do 
 we find one with sufficient perception to discover the cause 
 of the admittedly superior condition of the American work- 
 ingman in the fact that the tariff system of the United States 
 is so constructed that the burden falls upon those classes 
 best able to bear it. 
 
 Before the repeal of the English corn laws the duties in 
 Great Britain were so regulated that the rich man was com- 
 pelled to pay for the privilege of using foreign luxuries. 
 Smith tells us that in his day "the duties upon foreign lux-
 
 494 PROTECTION AND PROGRESS 
 
 uries imported for home consumption, though they some- 
 times fell upon the poor, fell principally upon people of 
 middling or more than middling fortune."* This continued 
 to be the case in England until some years after the British 
 had become indoctrinated with the idea that free trade was 
 the source of all their prosperity, when advantage was taken 
 of the erroneous impression to remove the duty from the ma- 
 jor part of the articles which might fairly be characterized as 
 the luxuries of the rich and shifted to those things which 
 were mainly consumed by the poor and could only be re- 
 garded as luxuries under a strained definition, such as that 
 furnished by Smith, which excludes from the list of neces- 
 saries everything that is not absolutely indispensable to the 
 propagation of the species. 
 
 The evil effects of the change were not at first noticed 
 by the British masses. They permitted themselves to share 
 the common belief that the great prosperity of the United 
 Kingdom was due to the removal of the corn duties, when, 
 in fact, it was owing, as is now clearly recognized by many 
 economists and publicists, to the practical monopoly of man- 
 ufactures which Great Britain enjoyed for several years 
 after the free trade innovation. As soon, however, as this 
 advantage was neutralized by the adoption of protective 
 tariffs by foreign countries it began to be noted that while 
 the national wealth of Great Britain had enormously in- 
 creased there was no diminution of the number of unem- 
 ployed, and that the ranks of the submerged class were con- 
 tinually being recruited by displaced workingmen and by 
 toilers who, after eking out a precarious existence, har- 
 assed during the most of their lives by the fear of being 
 unable to obtain work, were at last compelled to take refuge 
 in the workhouse or accept what the British euphemistically 
 term outdoor relief. 
 
 It is a feature of economics that while an evil may be 
 plainly recognized by many, and its existence is generally 
 
 ♦Smith, Wealth of Nations, Book I, Chap. VIII.
 
 EQUALIZATION 495 
 
 felt, it is nearly impossible for those suffering most to arrive 
 at an agreement respecting the cause. This difficulty has 
 been intensified in England by the propensity of the school 
 writers who are attempting to perpetuate the views of 
 Cobden to substitute theory for fact. With glittering 
 phrases they confuse the vulgar mind and then in turn 
 become confused themselves. They tell the English work- 
 ingman of the benefits of the cheap loaf, and when the toiler 
 points to a country where the loaf is nominally high but the 
 laborer is infinitely more prosperous they tell him that the 
 prosperity he sees is due to the abundance of land. Incon- 
 sistently enough, after having demonstrated to their owjn 
 satisfaction that the superior condition of the American 
 workingman is assignable to that cause, they proceed to show 
 that the admitted prosperity does not actually exist and 
 that the high wages of American workingmen are merely 
 nominal ; that owing to the operation of the high protective 
 tariff the lower paid labor of England and other foreign 
 countries is really better rewarded than that of the United 
 States. 
 
 It would seem impossible for rational writers to argue 
 that the workingmen of the United States are infinitely 
 more prosperous than those of any other country and at the 
 same time assert that they are worse off than the English 
 and other foreign workers because prices are higher in 
 America than in Europe, but the exigencies of the discus- 
 sion demand that they should do so. Adam Smith wrote 
 "that every tax is to the person who pays it a badge not of 
 slavery, but of liberty,"* because it denotes that the person 
 paying it is, although a subject to government, as he has 
 some property he cannot be the property of a master. Dis- 
 regarding this truism, Cobdenites diligently seek to make 
 all taxation odious. Instead of teaching that in a country 
 where the Government exists by the voluntary consent of 
 the governed taxation is merely a device by which funds are 
 
 *Smith, Wealth of Nations, Book I, Chap. VIII.
 
 496 PROTECTION AND PROGRESS 
 
 raised for keeping in motion the machinery of society, they 
 invent shibboleths which are designed to confuse the minds 
 of the thoughtless and divert attention from the incidence of 
 taxation. 
 
 In the United States the phrase "the tariff is a tax" has 
 been cunningly employed by free traders to obscure the 
 vital question, which is : Upon whom does the tax fall ? 
 Utterly disregarding the teachings of the economists of 
 their own school, they have sought to create the impression 
 in the mind of the workingman that the imposition of a 
 tariff on the articles of necessity consumed by him is a 
 grievous burden. We have seen that Smith teaches that 
 "whatever raises the average price of necessaries must nec- 
 essarily raise wages." This ought to conclusively dispose 
 of the contention that the American workingman could be 
 injured if the effect of a tariff on the necessaries consumed 
 by him was to really raise the price of the articles consumed, 
 but, as a matter of fact, a protective tariff does not operate, 
 except temporarily, in the manner indicated by the free 
 trader. 
 
 The question whether a high rate of duty is beneficial 
 or otherwise to the workingman can only be determined by 
 ascertaining whether the money derived from its imposi- 
 tion is properly applied, how much of it he is called upon to 
 pay, and his ability to bear his part of the burden without 
 being forced to the limit of subsistence. To the working- 
 man who takes these things into consideration the shibbo- 
 leth "the tariff is a tax" has no terrors. If he asks, and is 
 answered in the affirmative, that the money raised by the 
 tariff tax is to be applied to securing a proper administration 
 of the Government he will conclude that a system which does 
 not bring him in personal contact with the taxgatherer is, 
 on the whole, more desirable than any other. If he pursues 
 his investigations further and discovers, as he will undoubt- 
 edly, if he examines the details of the imports under an 
 American tariff, that by far the largest part of the articles
 
 EQUALIZATION 497 
 
 brought into the country from foreign lands upon which a 
 protective duty is laid are consumed by the rich, he will 
 conclude, following the idea of Adam Smith, that as "taxes 
 upon such consumable goods as are articles of luxury are all 
 finally paid by the consumer," the adjustment of the burden 
 is a fair one. Finally he will determine that a protective 
 tariff does not really touch him closely because under no 
 circumstances does it have the effect described by the free 
 trader of permanently raising the price of goods to the con- 
 sumer. 
 
 That in the initial stages of the protection of any par- 
 ticular article or class of articles the effect must be to raise 
 the price goes without saying. If the conditions were such 
 that the thing protected could be as cheaply produced as 
 in the country it was imported from there would be no 
 demand for protection. The failure to recognize the fact 
 that the condition which existed when the protective duty 
 was first imposed may be completely changed by the act of 
 protection is responsible for the grotesque blunder into 
 which most free traders have fallen of assuming that the 
 existence of a paragraph in a tariff schedule must neces- 
 sarily affect the price of such articles in the protected coun- 
 try. That the imposition of a duty may raise the price of 
 the imported article in the country in which it is consumed 
 is not denied. That it almost invariably does so in the be- 
 ginning is freely admitted. That it ceases to do more than 
 guard against the breaking down of the home market, in 
 the manner described by Jeans, after an industry has been 
 thoroughly developed in a country of great resources, such 
 as the United States, is easily demonstrable, and the evi- 
 dence to support the demonstration may be wholly drawn 
 from British sources. 
 
 Let us take the history of the iron industry in the United 
 States and see what light it throws on this phase of the 
 discussion. It is not necessary to sketch in detail the ups 
 and downs which attended its development; here we only 
 
 32
 
 498 PROTECTION AND PROGRESS 
 
 need refer to the fact that when a really effective tariff was 
 first imposed on iron and steel its result was undoubtedly 
 to increase the price of those articles to the American con- 
 sumer, although this admission must be modified by a ref- 
 erence to the figures of production, consumption and prices 
 presented elsewhere, which show conclusively that when 
 Great Britain enjoyed a practical monopoly of this partic- 
 ular industry an increased demand from the United States 
 was always a signal for an advance in prices, such advances 
 amounting to over lOO per cent in brisk years as compared 
 with dull ones.* 
 
 But disregarding this testimony and confining ourselves 
 to such a showing as a comparison of the price lists of Eng- 
 land and the United States affords, we find that for several 
 years the range of prices was higher in the protected than 
 in the free trade country. But this significant fact must be 
 noted, that the difference in the price after the American 
 industry was once firmly established ceased to be as great 
 as the rate of the protective duty, and that it kept dimin- 
 ishing in something like the same ratio as the progress of 
 iron manufacture, until finally, in the case of many articles, 
 notably pigiron and rails, there ceased to be any margin of 
 enhancement of price which could be attributed to the duty. 
 
 This statement is indisputable, because it is supported 
 by an overwhelming array of admissions from English 
 authorities and by price lists and comments of the trades 
 journals of Great Britain and the United States. From the 
 former a few excerpts will show how great is the change 
 in conditions between the time when duties were imposed 
 to call the iron industry into existence and to-day, when they 
 are maintained merely to assure to American manufactur- 
 ers the retention of the home market by making impossible 
 the inroads of foreign syndicates desirous of dumping their 
 surplus products on us so as to relieve their own market 
 
 *See Chap. VIII.
 
 EQUALIZATION 499 
 
 from the effects of the disturbance caused by overproduc- 
 tion. 
 
 A paragraph from a recent number of the London Iron 
 cDtid Coal Trades Review epitomizes the situation in the 
 American iron industry admirably. The writer says: "It 
 is, perhaps, only natural that in view of the much higher 
 wages that they have to pay their workmen the American 
 iron and steel manufacturers should desire to have a cer- 
 tain measure of protection against an invasion of the prod- 
 ucts of countries which, like Germany, cost little more than 
 one-third of the amount expended in the item of labor. But 
 even this is not the full extent of the difference, for Mr. 
 Stirling also informed the Tariff Committee that at the 
 Joliet Steel Works — one of the chief works carried on by 
 the Illinois Steel Company — it requires 4I tons of raw 
 material to produce a ton of steel rails, and these raw 
 materials had to be hauled an average of 412 miles, at an 
 average rate of 8s 4^6. per ton for freight, or, taking the 
 freight of the whole quantity, it amounted to 39s 8d per 
 ton of steel rails. And yet the American works are now, 
 or were quite recently, selling steel rails at about £4 los per 
 ton. English steel manufacturers are entitled to ask how it 
 is done. Will some American manufacturer kindly supply 
 the needed light?"* In another issue the journal quoted 
 from above said : "Pittsburg iron and steel makers do not 
 enjoy much advantage over our own so far as the cost of 
 iron ores is concerned owing to the greater distance over 
 which the ores have to be transported. Speaking generally, 
 the cost of producing a ton of Bessemer or hematite iron 
 today will only amount to about 37s 6d at Pittsburg, against 
 49s 6d in Great Britain (in the Cleveland district — on the 
 west coast the cost will be several shillings more), 52s 3d 
 in Westphalia, 53s in Belgium, and 57s 9d in France." 
 
 To this evidence we may add some extracts from a 
 
 *Iron and Coal Trades Review, London, June, 1898.
 
 500 PROTECTION AND PROGRESS 
 
 resume of the condition of the iron and steel industry in the 
 United States in 1897, based on statements made in an inter- 
 view with a veteran manufacturer, who briefly reviewed the 
 progress of the past few years in this particular field. "Steel 
 rails," said the speaker, "were first turned out in this country 
 in 1867 and brought $160 a ton. In less than six years the 
 cost was scaled down to $90 a ton, one mill producing 30,000 
 tons a year. The producing capacity was further augmented 
 until 50,000 tons had been reached in one year, which figure 
 at the time was considered marvelous. At the present time 
 there are mills that can roll more rails in a month than any 
 one mill in this country could produce in a year a quarter of 
 a century ago, and that, too, with the aid of much less help. 
 Less than one-third of the number of workmen are now re- 
 quired for a given output of rails than were needed twenty 
 years ago." These figures are supplemented by others which 
 show that in 1871 the duty on steel rails amounted to $28 a 
 ton and the average price per ton was $102.50. "When it is 
 stated that steel rails sold for export last year (1897) at $16 
 per ton the extent of the transition is at once obvious." The 
 commentator then goes on to explain that "a number of 
 factors have combined to bring about these changes. Chief 
 among them may be mentioned the cheapened rates of trans- 
 portation, low priced ore and improved methods of produc- 
 tion in the form of mechanical devices which have replaced 
 hand labor."* 
 
 Before proceeding to answer the question which this con- 
 dition of affairs has induced the free trader to ask it may be 
 well to revert to a statement made by Rogers in the hey-dey 
 of British manufacturing prosperity: "Protection," he 
 said, "suppresses all kinds of improvements, and, indeed, 
 it does not appear that the phenomenon of sudden vast and 
 permanent progress has ever been witnessed in economic 
 history except during the latter half of the eighteenth cen- 
 
 ♦Bradstreet's, February 26, 1898.
 
 EQUALIZATION 501 
 
 tury in England."* With the latter part of the statement we 
 shall not deal here, but a writer advocating an economic sys- 
 tem whose underlying purpose is the elimination of waste in 
 processes of production cannot avoid calling attention to 
 Professor Rogers' absurd misapprehension of the workings 
 of a policy which other thinkers have acknowledged virtually 
 compels improvement. The history of the iron and steel 
 industry in the United States demonstrates that protection 
 stimulates improvement in every possible direction, in the 
 creation of labor-saving devices, in the bettering of methods 
 of transportation and in other ways too numerous to mention 
 here, but the effects of which are so obvious that the shifty- 
 free trader, forgetting his original prediction that a high tar- 
 iff would necessarily result in preventing improvement and 
 repressing development, has gone to the other extreme and 
 urges that the undue stimulus of high tariffs is responsible 
 for overproduction. 
 
 It would be a waste of words to dwell at length on the 
 inconsistency involved in these opposing contentions, but it 
 may not be amiss to call attention to the fact that it is now 
 recognized that production can be more effectually regulated 
 within the restricted area of a country with a protective tariff 
 than in one dependent upon the whole world for a market. 
 The secretary of the British Iron and Steel Institute has 
 freely admitted this to be the case,t but if he had not done 
 so there is abundant evidence showing that England at a 
 time when the world's consumption of iron was much less 
 than it is at present was frequently overstocked with that 
 article to such an extent as to break the market. It was de- 
 veloped during an inquiry made by a British Royal Commis- 
 sion into the causes of depression in England that in 1884 
 the carryover stock of pig iron was 1,809,947 tons, an in- 
 
 ♦Rogers, Article "Free Trade," Ency. Brit. 
 
 fjeans, Supremacy in the Iron Market, Engineering Magazine, 
 December, 1897.
 
 502 PROTECTION AND PROGRESS 
 
 crease of nearly eighty per cent over the surplus of 1879.* 
 The writer calling attention to this fact also dwelt on the ex- 
 cessive overproduction of ships, saying that the consequences 
 were "seen in the laying up of vessels for want of cargoes ; 
 in the heavy fall of dividends on shipping shares and cessa- 
 tion in some cases ; in excessively low freights ; in the dis- 
 tress of our shipping ports, where 59,200 persons were at 
 work last year (1885) instead of 94,700 as in 1883; and in 
 the want of employment for our immense riverside popula- 
 tion in the metropolis generally." 
 
 It would be idle in the face of such evidence to attribute 
 to the free trade system a virtue it does not possess or to 
 assume that unrestricted trade intercourse must necessarily 
 have the effect of increasing the consumptive ability of the 
 world to such an extent that overproduction would be im- 
 possible. There is no fact better assured than that consump- 
 tion is on a much more restricted scale in countries where no 
 attempt is made to levy protective duties than in those where 
 the policy of protection prevails; therefore, it is absurd to 
 claim that there would have been a larger demand for iron 
 and other commodities if free trade had prevailed, and that 
 consequently there would always have been an effective 
 demand for all the iron and other articles that could be manu- 
 factured under that system. 
 
 As has been fully demonstrated elsewhere, overproduc- 
 tion is chiefly due to the rapid improvement of processes of 
 manufacture, tillage and transportation and the failure of 
 the existing methods of distribution to adjust themselves to 
 the changed circumstances. The working classes have not 
 been permitted to enjoy their full share of the advantages 
 derived from new inventions, and, therefore, cannot furnish 
 sufficient patronage to effectively consume the increased pro- 
 duction. If the man in the enjoyment of an income of a 
 
 *Goodby, prize essay on the Causes of Depression, London, 1885. 
 Pears.
 
 EQUALIZATION 503 
 
 hundred thousand dollars annually could be supplanted by a 
 hundred men earning a thousand dollars each there would be 
 a remarkable change in this particular. There might be a 
 diminution of the demand for certain very costly luxuries, 
 but the necessities of a hundred persons with an annual in- 
 come of a thousand dollars each would increase the demand 
 for staple commodities a hundredfold, or very nearly in that 
 proportion. 
 
 Until such a change in distribution is effected a necessity 
 for the intervention of a protective tariff will exist. Mr. 
 Jeans, who has furnished an admirable reason for the reten- 
 tion of the protective policy by pointing out that manufac- 
 turers invariably seek to avert the consequences of overpro- 
 duction by dumping their surplus upon foreign countries in 
 order to preserve prices in the home market, ignores his own 
 argument when he, parrot like, repeats the stale contention 
 of the Cobdenites that "protection does not protect." He 
 tells his readers that "American practice has confounded the 
 wisdom of those who have hitherto argued that nominally 
 cheap labor is needed to secure an absolutely cheap product," 
 and that "it has equally upset the old-fashioned ideas about 
 the effect of protection favoring the producer at the expense 
 of the consumer. No doubt," he says, "under ordinary cir- 
 cumstances and in the infancy of an industry this result hap- 
 pens. It may also happen, and remain, after an industry has 
 been fully developed when the conditions are not favorable to 
 cheap production as a result of internecine competition. It 
 has happened, also, and will probably happen again as the 
 result of artificial interference with the free play of competi- 
 tion between the works established in the country whose 
 industries are supposed to be protected. But over a wide 
 range of industrial operations protection does not protect, 
 and this paradox was never more clearly apparent than in the 
 existing condition of the American industry. For that indus- 
 try at least the United States require the shackles of protec-
 
 504 PROTECTION AND PROGRESS 
 
 tion no longer. I am disposed to doubt," he adds, "whether 
 the same remark is equally true of European countries."* 
 
 An analysis of this expression of opinion discloses how 
 differently the policy -of protection is regarded by English 
 free trade writers and American protectionists. The latter 
 assume that if the effects of the system are such as those 
 described by Jeans ; if protection results in creating a great 
 industry and does not favor the producer at the expense of 
 the consumer, it has performed all that may be reasonably 
 expected of it. But Mr. Jeans approaches the subject from 
 another standpoint. He accepts as true the absurd charge 
 that the protective tariff in the United States is wholly due 
 to the machinations of manufacturers and that its sole pur- 
 pose is to raise the price of goods so that they may benefit, 
 and when, after investigation, he discovers that domestic 
 competition has operated to reduce prices to a lower level 
 than those of free trade England he remarks "over a wide 
 range of industrial operations protection does not protect."" 
 
 But, as we have pointed out, elsewhere in this article he 
 distinctly proves that protection does protect even under the 
 circumstances he indicates, for the tariff enables the Amer- 
 ican manufacturer to hold the home market and thus permits 
 him to give his employes better wages and more regular em- 
 ployment than is possible in countries like England, where 
 the territory of the iron workers may be invaded at any time 
 by the producers of other countries when they wish to relieve 
 themselves of a surplus without affecting prices in their own 
 markets. 
 
 Mr. Jeans, clever as he is, is not exempt from the com- 
 mon blunder of the Manchester school. He attributes ob- 
 jects and motives to protectionists of which they are wholly 
 innocent. Doubtless the purpose of the manufacturer who 
 appears before a Congressional Committee and makes repre- 
 
 ♦Jeans, Supremacy in the Iron Market, Engineering Magazine, De- 
 cember, 1897.
 
 EQUALIZATION 505 
 
 sentations to influence the placing of a J)rotective duty on 
 some particular article is to enable him to produce and sell 
 the thing protected at a price which will permit him to make 
 a profit. But that the country deliberately proposed at any 
 time to make products dear so as to benefit the manufacturer 
 at the expense of the consumer is an absurdity that could 
 only suggest itself to a mind saturated with the errors of 
 Cobdenism. 
 
 There is nothing clearer than the fact that intelligent 
 American protectionists always looked forward to the result 
 to which Mr. Jeans refers. They foresaw that internal com- 
 petition would effectually reduce the prices of all staple com- 
 modities. They had no doubt about the extent of the re- 
 sources of the country and its future growth. It is a matter 
 of record that many able protectionists predicted what has 
 since come to pass, that one day the United States, as a result 
 of the stimulus to home industries, would produce and con- 
 sume more of the great staples than the whole world did at 
 the time they made their prophecies. There were some who 
 were even rash enough to predict that the United States 
 would, if all her resources were called into play, surpass in 
 the magnitude of her manufacturing enterprises the nation 
 which, at the time the predictions were made, was unques- 
 tionably supreme in industry. How well these prophecies 
 were fulfilled may be inferred from the fact that in 1840 the 
 products of manufactures of the whole world were valued at 
 only £1,215,000,000, while in 1894 the values of the manufac- 
 tured products of the United States alone aggregated 
 £1,952,000,000.* 
 
 If with a production of this magnitude the consumers of 
 the United States are compelled to pay high prices the fact 
 cannot be attributed to the operation of the protective tariff, 
 but rather to the tendency of capital to combine and to abuse 
 the advantages derived from combination. There is not the 
 
 ♦Mulhall, Industries and Wealth of Nations, 1896.
 
 5o6 PROTECTION AND PROGRESS 
 
 slightest reason to believe that this tendency would be abated 
 if our ports were thrown wide open to foreigners. Exper- 
 ience has demonstrated that combinations for the purpose of 
 controlling the industries of several countries can be formed 
 as easily as within a restricted area. On the very day this 
 paragraph was written a dispatch was published in the Amer- 
 ican papers which contained an item from the St. James Ga- 
 zette of London detailing the formation of an Anglo-Amer- 
 ican needle trust. "It is reported on the Stock Exchange," 
 said the dispatch, "that an Anglo-American trust to control 
 the output and sale of sewing machine, knitting machine and 
 all other kinds of needles is being formed. Several American 
 and Midland firms are reported to have sold their business 
 to the combination. The capital, it is further announced, 
 will be $7,500,000."* 
 
 No one familiar with the subject will doubt the feasibil-* 
 ity of the project, and it is not probable that anyone will ven- 
 ture to assert that there is anything in the principle of laissez 
 faire opposed to such combinations. On the contrary, Rogers 
 and other free traders distinctly affirm that they are beneficial 
 inasmuch as they reduce the cost of producing by saving un- 
 necessary expenditures in various ways, and that any at- 
 tempts on the part of the promoters to take advantage of the 
 situation produced by an agreement to combine would result 
 in calling into existence fresh rivals. 
 
 The fallacy of this argument has been exposed in the 
 chapter on trusts ; here the purpose is to direct attention to 
 the fact that protectionists have in their hands a weapon 
 which may be employed against combinations whenever 
 they menace the public welfare. Their adherence to the be- 
 lief that it is wise to prevent unrestricted competition makes 
 the advocates of protection ready to resort to the remedy of 
 control. The method of most effectually accomplishing this 
 result has not yet been hit upon, but that it will be found no 
 
 ♦Associated Press Cable Dispatch to American Press, Aug. 30, 1898.
 
 EQUALIZATION 507 
 
 one who knows that the underlying motive of American pro- 
 tectionists is to defend the working producer from the ag- 
 gressions of capital, whether foreign or domestic, will for a 
 moment doubt. It is possible that more stringent regulations 
 of immigration may be necessary so as to prevent the im- 
 portation of contract laborers ; or the course adopted by Can- 
 ada of denying protection to any article the manufacture of 
 which is monopolized by a combination may be imitated ; or 
 some scheme of graduated taxation may be devised to effect 
 this object, but that the evil will finally be effectually con- 
 trolled is certain. 
 
 It was the conviction that it would be impossible for a 
 people with an insufficient capital to successfully compete 
 with the established manufacturing industries of wealthy 
 countries and not hostility to the principle of competition 
 that led Americans to adopt the protective policy. In order 
 to create a domestic manufacturing industry the American 
 people cheerfully made sacrifices. They willingly paid the 
 higher prices demanded for the home product because they 
 believed that ultimately the enlargement of the sphere of 
 operations and other" causes would make the cost of produc- 
 tion as low in this as in other countries. A people with 
 enough foresight to anticipate such an outcome can be de- 
 pended upon to discover a way out of the difficulties raised 
 by the combination of capital: 
 
 That a remedy against the encroachment of trusts can 
 only be worked out within the lines of the protective sys- 
 tem seems plain to all those ready to concede that there is a 
 foundation for Rogers' assumption that unrestricted com- 
 petition may degenerate into combination which will ulti- 
 mately stifle true competition. If there is an increase of the 
 tendency of capital to seek investment where it can most 
 profitably be employed, which has exhibited itself so signifi- 
 cantly in England, western nations will be compelled to raise 
 the barriers of protection to save themselves from the dis- 
 asters which must follow.
 
 5o8 PROTECTION AND PROGRESS 
 
 Instances of the transfer of British industries to con- 
 tinental countries where labor can be more cheaply obtained 
 are numerous. The successful results of such operations 
 have not passed unnoted by the eager promoter, who sees in 
 the Orient a still better field for the employment of surplus 
 capital. A few years ago an American Minister to Japan, 
 in a widely published interview, the purpose of which seemed 
 to be the setting at rest of American fears of Oriental com- 
 petition, pointed out that the cheap labor of Japan offered a 
 field for the employment of the surplus capital of the United 
 States, and he semi-officially suggested the advisability of 
 looking over the ground to see whether manufactories might 
 not be profitably established in the island empire which 
 would eventually furnish cheaper manufactured articles 
 than could be supplied by the more expensively conducted 
 establishments of this country.* 
 
 It hardly needed such a suggestion, for capital is alert 
 to take advantage of opportunities as rapidly as they present 
 themselves. It scarcely requires an assurance of success ; 
 a promise often serves equally well, as the experience of 
 England in dealing with Argentina and other countries am- 
 ply demonstrates. The formation of joint stock companies 
 is so easy a matter in modern times it would be phenomenal 
 if promoters did not take advantage of the circumstance to 
 float concerns to exploit the cheap labor of the Orient. 
 Imagine the glittering prospectuses the ingenious promoter 
 may put before people disposed to invest in what are known 
 as "industrials" by drawing on the official reports of direc- 
 tors of cotton spinning and weaving factories in Japan 
 which show that dividends as high as twenty-eight per cent, 
 and none lower than eight per cent, are declared by Japan- 
 ese joint stock companies.f 
 
 Evidence that a crusade of this kind has already begun 
 
 ♦Dun, appointed by Grover Cleveland. 
 
 fBritish Consular Report on Trade at Hiogo, 1896. 
 
 I
 
 EQUALIZATION 509 
 
 is multiplying. Intimations of the intentions of the shrev.-. 
 Japanese to enter the foreign loan markets are frequent. 
 The Yokohama Yorosu, in August, 1898, stated that "two 
 schemes for the introduction of foreign capital were about 
 to be inaugurated. One involving an amount of 10,000,000 
 yen to be borrowed by the Nippon Yusen Kaisha ; the other 
 aims at securing 10,000,000 yen in Germany with the idea 
 of distributing it to various railway and commercial and 
 industrial companies. * * * The Japanese Government 
 is said to be behind both schemes."* 
 
 There is no doubt these appeals will meet with success, 
 nor that they will be supplemented by projects looking to 
 the creation of rhanufacturing and other industries in China, 
 where, in the near future, the opportunities for the estab- 
 lishment of such enterprises will be much more numerous 
 and promise greater profits. That manufacturing indus- 
 tries of all kinds can be successfully carried on in China as 
 in Japan every one familiar with the subject testifies. The 
 Chinese are apt, industrious and work for fabulously low 
 wages. If skilfully managed, it is believed by English, 
 American, German, and other consular agents who have 
 carefully studied the situation that Chinese textile factories 
 can be operated at a cost which will make competition with 
 their products absolutely impossible.! 
 
 That the successful prosecution of the manufacture un- 
 der modern conditions of textile fabrics and other articles 
 by Oriental workers will force the wages of the western 
 operative to the Chinese level in all countries where no 
 restraint is placed on importations is believed by all compe- 
 tent observers. It is sometimes urged that the contingency 
 is too remote to be contemplated, because of the assumed 
 necessity of meeting the Oriental home demand, which 
 
 ^Vancouver, B. C, dispatch to American Press, August 31, 1898. 
 f See evidence grouped in U. S. Senate docket, No. 31, Fifty-fourth 
 Congress, First Session.
 
 510 PROTECTION AND PROGRESS 
 
 would be enormous if the per capita consumption of manu- 
 factured articles were on the same scale as in Western 
 countries. But this method of reasoning is fallacious, as 
 it ignores the possibility of an industry being carried on 
 solely or largely for export purposes. It is a well-known 
 fact that wheat is grown in many parts of Russia where the 
 producers live wholly on black bread ; in Germany and other 
 continental countries the production of beet sugar has been 
 carried on chiefly for export purposes, the domestic con- 
 sumption being comparatively small and not increasing in 
 proportion to the output ; even England furnishes abundant 
 instances of the tendency to manufacture to meet the wants 
 of other peoples in entire disregard of the domestic demand, 
 or rather the lack of it. 
 
 Under the circumstances, it is carrying optimism to 
 excess to assume that the danger is remote and that we need 
 not fear evil results from Oriental competition until the 
 400,000,000 Chinese and the other millions in Asia are able 
 to manufacture on a sufficiently large scale to supply their 
 own wants. Long before that time, unless steps are taken 
 to prevent such a calamity, the surplus capital of Europe and 
 the United States will be exploiting these fields of cheap 
 labor and forcing their products on those nations which 
 have not the sagacity to defend their own people from a 
 competition which must inevitably, if persevered in, reduce 
 all those who take part in it to a common level. 
 
 The tariff on competitive articles would require no other 
 justification for its permanent continuance than the neces- 
 sity of warding of? this contingency, but additional and 
 stronger reasons may be cited for its retention. The chief 
 of these is that the phenomenal development of manufactur- 
 ing throughout the world, and the extraordinary efi^orts 
 made by different nations to increase production and extend 
 their trade, has made a system designed to remove inequal- 
 ities imperatively necessary. The Cobdenites vainly com- 
 plain of the effects of the undue stimulus given to pro-
 
 EQUALIZATION 511 
 
 duction by bounties and objects to the methods adopted by 
 rival countries to create transportation facihties, but the 
 nations resorting to such devices are not Hkely to be swerved 
 from their course by a consideration of elaborate theories 
 which cannot be made to harmonize with the results of 
 every day practice, or by the pleading of Governments who 
 see their dependencies suffering from the artificially pro- 
 moted competition, but are unwilling to make a change in 
 their own polity to cure the evil. 
 
 It is in the highest degree improbable that the Germans 
 will ever be induced by English representations or entreat- 
 ies to remove the export bounty on sugar. So long as its 
 effect is to stimulate German production that country will 
 pay no attention to outside sentiment. "When the last at- 
 tempt was made to get rid of foreign sugar bounties nearly 
 every trades union in Great Britain petitioned in favor of 
 the bill for ratifying the convention."* Emperor William 
 and his advisers were doubtless much affected by this dis- 
 play of unselfishness by men whose shibboleth for years has 
 been "cheapness" objecting to cheap sugar, but they would 
 hardly on that account abandon a system that has the effect 
 of increasing production and consumption and which inci- 
 dentally permits the owners of agricultural land in Germany 
 to diversify their occupation, and, above all things, enlarges 
 the opportunities of the German worker to obtain profitable 
 employment. 
 
 It is possible that Germany may some day remove the 
 export bounty from sugar, but she will never do so be- 
 cause the system has proved injurious. The evidence all 
 points to a contrary effect. According to Mulhall "the 
 average consumption of sugar in Germany in 1888-90 was 
 eighteen pounds yearly per inhabitant, and is at present 
 (1898) thirty pounds, which is evidence that the people are 
 better fed than they were seven years ago. At the same 
 
 ♦Williams, "My Critics," New Review, November, 1896.
 
 512 PROTECTION AND PROGRESS 
 
 time," he adds, "the industry is so thriving- that the bounty 
 on exportation has been reduced from $45 to $5 per ton. 
 Germany now produces forty per cent of the beet sugar 
 made in Europe, as compared with thirty per cent in 1876."* 
 
 Surely there is nothing in this testimony to suggest that 
 the bounty system operates injuriously in the country in 
 which it is practiced. Other countries that have resorted to 
 the system have met with an experience similar to Germany. 
 We are informed that "Sweden in a few years has almost 
 ceased to import sugar, raw or refined, although five years 
 ago her population depended upon foreign supplies. By 
 imposing a high customs duty on foreign sugars a domestic 
 beet sugar industry has been built up sufficient to supply 
 the home market, and it is believed will soon be sufficient 
 for export."-|- 
 
 Whatever may be the result to the rest of the world it 
 cannot be said that Sweden will suffer from her efforts to 
 add to the productiveness of her territory by promoting the 
 culture of beet sugar. It is sometimes rashly assumed that 
 the countries resorting to bounties would profit more by ab- 
 stention from such efforts, the theory being that capital and 
 energy are diverted from more profitable pursuits. But this 
 has been shown to be an entirely baseless assumption grow- 
 ing out of the fundamental error of economists who have 
 taught that the supply of capital available for the develop- 
 ment of resources is so limited that the devotion of a portion 
 of it to the artificial promotion of an industry necessarily 
 means the diversion from natural pursuits of a proportionate 
 amount and a consequent injury. But it can hardly be said 
 that the capital required to expand the German beet sugar 
 industry from a production of 360,000 tons in 1876 to 1,620,- 
 000 tons in 1896 was at the expense of the pursuits which 
 might have proved more profitable, for there is no fact better 
 
 ♦Mulhall, Industrial Advances in Germany, North American Re- 
 view, January, 1898. 
 
 tFord, Commercial Superiority of the United States, North Ameri- 
 can Review, January, 1898.
 
 EQUALIZA.TION ' 513 
 
 established than that during the entire period of this phe- 
 nomenal expansion of the beet sugar industry in Germany 
 there was a plethora of German capital which offered itself 
 to any industry that promised a profit. 
 
 It is not astonishing that these modern experiments in the 
 direction of promoting productivity should have been 
 inaugurated, for Great Britain set the example which other 
 nations are now imitating with profit. Singularly enough, 
 while free traders attempt to create the impression that boun- 
 ties and subventions are pernicious, the father of political 
 economy eulogizes the sagacity of his countrymen in resort- 
 ing to a policy which resulted in making England mistress of 
 the seas. Adam Smith says : "It is not impossible that some 
 of the regulations of this famous (Navigation) Act may 
 have proceeded from national animosity. They are as wise, 
 however, as if they had all been detected by the most delib- 
 erate wisdom."* It has been attempted to minimize the force 
 of this declaration by pointing out that Smith had the na- 
 tional defense in mind. His assertion that "the defense of 
 Great Britain depends very much upon the number of its 
 sailors and shipping. The act of navigation, therefore, very 
 properly, endeavors to give the sailors and shipping of Great 
 Britain a monopoly of the trade of their own country, in 
 some cases of absolute prohibitions, and in others by heavy 
 burdens upon the shipping of foreign countries,"! is quoted 
 to support this view, and an additional saying, "as defense is 
 of more importance than opulence the act of navigation is, 
 perhaps, the wisest of all commercial regulations of Eng- 
 land," is relied upon to clinch it. But there are too many 
 other admissions in the pages of "The Wealth of Nations" to 
 admit of a doubt that Adam Smith did not regard a bounty 
 as objectionable if its result was to stimulate production and 
 thus lower prices. 
 
 *Smith, Wealth of Nations, Book IV, Chap. I. 
 tlbid.33
 
 514 PROTECTION AND PROGRESS 
 
 That any expressions of opposition to the payment of 
 bounties which may be found in Smith's writings are due to 
 a beHef that a resort to the system would result in dearness 
 rather than cheapness is shown in many passages. In one 
 place he tells us that "in many parts of Scotland, during cer- 
 tain seasons of the year, herrings make no inconsiderable 
 part of the food of the common people. A bounty which 
 tended to lower their price in the home market might con- 
 tribute a good deal to the relief of a great number of our fel- 
 low subjects whose circumstances are by no means af- 
 fluent."* In the same connection he says: ''If any partic- 
 ular manufacture was necessary for the defense of the so- 
 ciety it might not always be prudent to depend upon our 
 neighbors for the supply ; and if such manufacture could not 
 otherwise be supported at home it might not be unreasonable 
 that all other branches of industry should be taxed in order 
 to support it."t 
 
 From expressions such as these we may readily infer that 
 Smith did not regard bounties with the horror which his fol- 
 lowers aflFect. And when we find him saying "the plentiful 
 supply of the home market was not the direct object of 
 these statutes (bounty) ; but under the pretense of encour- 
 aging agriculture, to raise the money price of corn as high as 
 possible, and thereby to occasion, as much as possible, a 
 constant dearth in the home market," we have a right to 
 assume that if he had been able to foresee the tremendous in- 
 crease of production which has followed the artificial stim- 
 ulus of industry by bounties and other forms of protection 
 he would have indorsed them without hesitation. Had he 
 dreamed of the possibility of a beet sugar industry being 
 called into existence by artificial means which would make 
 sugar so plentiful that its cheapness would promote a con- 
 
 *Smith, Wealth of Nations, Chap. V, Book IV. 
 
 flbid. 
 
 tibid.
 
 EQUALIZATION 515 
 
 sumption rivaling that of the cereals he would have extolled 
 the wisdom of the framers of bounty laws as unequivocally 
 as he did that of the authors of the English Navigation Act. 
 But he could not anticipate the development of an industry he 
 had never heard of, nor could he suppose that in a little more 
 than a century the thirteen colonies of England on the Atlan- 
 tic seaboard of America would grow into a nation able to 
 consume 2,012,729 tons of sugar in a single year (1894), 
 chiefly because, through the stimulus given by the bounty 
 system, prices of the commodity fell so low that it is now 
 regarded as a necessary by all classes and is used as ex- 
 tensively in the homes of the working classes as in the houses 
 of the rich. 
 
 But while there can be no question regarding the bene- 
 fits to mankind from the practice of artificially stimulating 
 industry, the system has raised new problems, most of them 
 the direct result of a condition which the free trader cannot 
 consistently deprecate, as they are conducive to cheapness. 
 There is no doubt that appreciation of the fact and the dis- 
 position to act upon the discovery that the ability to produce 
 is not confined to a single country are responsible in part for 
 the aggravation of the phenomenon of overproduction wit- 
 nessed in modern times. It would have been extraordinary 
 if, without a change in methods of distribution, an evil which 
 England complained of when she enjoyed a practical mo- 
 nopoly of manufacturing industry, with the whole world for 
 her market, was not intensified by the entrance into the in- 
 dustrial field of rivals who now dispute with her for suprem- 
 acy. If in 1820, when the production of coal was only 
 17,200,000 tons, its energy when devoted to manufacturing 
 sufficed to clog markets, why should we be surprised that a 
 production of 531,000,000 tons in 1894 should produce a 
 similar result? In 1840 the world's production of iron ore 
 was only 6,400,000 tons, yet England, the principal producer 
 in that year, was filled with complaints because the world 
 would not absorb the products of her mines and factories. Is
 
 5i6 PROTECTION AND PROGRESS 
 
 it at all strange then that the situation should have pre- 
 sented some difficulties in 1894, when the quantity of iron 
 stone mined was 53,000,000 tons?* 
 
 These questions almost answer themselves. Any occa- 
 sion there may be for complaint must be due to faulty dis- 
 tribution, and not to the tendency, alleged by the free trader, 
 of protection to repress production. Instead, therefore, of 
 studying methods of repressing universal production it should 
 be the aim of economists to reconcile the obvious disposition 
 of the people of all progressive nations to share in the profits 
 of the higher branches of industry. It ought to be clearly 
 apparent by this time that the keynote of political economy 
 must be the preservation of the national existence. To recur 
 to a phrase of Adam Smith's, it should be recognized that 
 "the defense of the society" ought to be the first considera- 
 tion, because in the modern struggle for existence it is not 
 "prudent to depend upon our neighbors for the supply" of 
 any manufactured article or product which we can produce 
 for ourselves. Our experience as purchasers of iron while 
 dependent upon Great Britain, cited elsewhere, conclusively 
 demonstrates the correctness of the doctor's deduction, and 
 an examination of the results of our dependence in other 
 directions will disclose similar results. It is only by stead- 
 fastly adhering to the determination of being as self sufficing 
 as possible that a nation can work out a glorious destiny for 
 itself. 
 
 It is often urged by free traders, in moments when they 
 forget their assertions that "protection cannot protect," that 
 the Americans having built up a great manufacturing indus- 
 try, the necessity for a protective tariff no longer exists in 
 the United States. But the fallacy of such an assumption 
 may be easily exposed. No matter what the primary opinion 
 of the protectionist may have been or how strenuously he 
 may have insisted on the propriety of extending aid to infant 
 
 *Mulhall, Industries and Wealth of Nations, 1896.
 
 EQUALIZATION 517 
 
 industries, it is now seen that protection has a still more im- 
 portant function to perform — that of equalizing international 
 conditions. Without its aid countries would be reduced to 
 the state of impotency which now exists in England, where 
 the rulers are confronted with trade problems which they 
 dare not handle as wisdom dictates for fear of violating an 
 "ism." That country is now assailed by a proposition from 
 its West Indian dependencies to either provide a remedy 
 against the disastrous effects of the competition of bounty 
 promoted sugar or to permit the distressed people to seek 
 annexation with the United States. What step will finally be 
 taken remains to be seen; at present a resort is had to a 
 species of aid which smacks very much of the English sys- 
 tem of outdoor relief and which must make its recipients feel 
 like paupers. 
 
 Perhaps the evils of unrestricted competition are seen in 
 a more exaggerated form in the British West Indies than 
 elsewhere, but the effects are more or less the same in every 
 country. In the United States, notwithstanding its immense 
 resources and measurably well diversified industries, the evil 
 results of attempting to dispense with a protective tariff were 
 witnessed when the authors of the Wilson-Gorman bill re- 
 duced duties and in many cases struck down protection en- 
 tirely. The country was at once flooded with foreign goods 
 and large numbers of people were driven out of employment. 
 That no benefits followed this enforced cheapness is clearly 
 proved by the fact that the consumption of many of the great 
 staples diminished during the period while the low tariff pre- 
 vailed, notably iron, the production of which fell off nearly 
 thirty-three per cent. Some persons in this country were 
 led astray by the sudden expansion of exports of manufac- 
 tured articles during this period and drew the inference that 
 circumstances were changing for the better through the re- 
 duction of duties, but investigation disclosed that our in- 
 creased shipments of many articles were due to the sudden 
 diminution of the consumptive ability of American virorking-
 
 5i8 PROTECTION AND PROGRESS 
 
 men. Foreign critics were not deceived and consoled them- 
 selves with the reflection that a recrudescence of prosperity 
 by raising prices would remove the incentive to find a market 
 abroad, which is only another way of saying that Americans 
 are better off when their home markets absorb all that the 
 manufacturers of the United States can produce, even though 
 the cost to the consumer is increased during the time of ex- 
 panding consumption. 
 
 There are so many different conditions that must be 
 equalized before there can be anything like a fair competi- 
 tion between nations it would be impossible to enumerate 
 them all here. Some of the more important have already 
 been alluded to. The undesirability of attempting to compete 
 with races in whom the habit of thrift has become so in- 
 grained by centuries of necessity that it resembles parsimony 
 has been dwelt upon. Reference has also been made to the 
 varying ideas of peoples respecting the value of education, 
 and it is suggested that the statesmen of a nation which pro- 
 vides schools for all classes and proceeds on the theory that 
 it is the duty of the state to give every citizen an opportunity 
 to fit himself for the obligations of citizenship cannot afford 
 to neglect the adoption of means to prevent other countries 
 from profiting by their failure to similarly equip their own 
 working people. We have seen also that the English work- 
 ingman, despite the fact that he rejected the advice of Bright 
 and Cobden to submit to the evils of unrestrained competi- 
 tion, is, nevertheless, vainly struggling with the aid of his 
 unions, to avert the consequences of the law which Smith 
 has demonstrated is ceaselessly at work pressing the toiler 
 to the limit of subsistence. All the solidarity of the English 
 trades unions is rendered ineffective through the failure of 
 the workingmen of Germany, Belgium and other workers on 
 the continent to accommodate themselves to the British 
 standard of work and living. Obviously, some form of pro- 
 tection must be found to resist the encroachments spoken of 
 or the British workingman must succumb. His trades
 
 EQUALIZATION 519 
 
 unions will be powerless to benefit him when the struggle 
 between the manufacturing nations becomes more intense, as 
 it must when skill is more generally diffused and overpro- 
 duction stimulates the tendency to dump surplus products on 
 foreign markets. 
 
 There is still another cause than those enumerated which 
 must be considered when the question of equalizing the con- 
 ditions of nations receives the attention of statesmen. The 
 effects of a bounty designed to stimulate production and ex- 
 port are clearly seen and have been dwelt upon in this chap- 
 ter, but there is an indirect method of accomplishing the de- 
 sired result which does not attract much attention, but which 
 may be made to operate as effectively as a direct subvention. 
 If a particular industry is excused from the burden of taxa- 
 tion to all intents and purposes it is aided as effectually as 
 though a direct gift of money were bestowed. The results of 
 such a course may be seen in our own country, where the 
 minor political subdivisions occasionally resort to the device 
 of exempting manufacturing plants from taxation for the 
 purpose of attracting investors and often with the object of 
 drawing industries from places where they had long been 
 established, but in which they were subjected to the same 
 rule of taxation as that to which all property owners of the 
 locality are obliged to conform. It is no answer to this 
 statement to say that it is the part of wisdom for all com- 
 munities to avoid taxing productive industry and thus escape 
 being discriminated against, because in practice it is found 
 impossible to excuse the property of one class of producers 
 while taxing that of another. The experiments of England 
 in this direction have proved ruinous to agriculture, which 
 has been made to bear so great a part of the national burden 
 that land, in spite of the increasing population of the United 
 Kingdom, is becoming less valuable year by year. 
 
 Somewhat similar in its operation to the exemption of 
 manufacturing plants from taxation is the promotion of 
 aritficial facilities for the carrying on of an industry in places
 
 520 PROTECTION AND PROGRESS 
 
 like Manchester, England. That industrial center has re- 
 cently expended a large sum of money in order to create a 
 port which will enable the cotton manufacturers of the dis- 
 trict to bring the raw product to their doors more cheaply 
 than under natural conditions. The obvious purpose of the 
 construction of the Manchester Ship Canal is to neutralize 
 the advantage enjoyed by Americans through their proxim- 
 ity to the cotton fields which produce the major part of the 
 raw materials worked up in the Lancashire district. To 
 assume that the nation possessing supplies of raw materials 
 should refrain from taking measures to counteract the effects 
 of such attempts to prevent the development of a cotton man- 
 ufacturing industry near the source of supply would be pre- 
 posterous, and as there is no possible mode by which the 
 owners of spare capital can be prevented from spending it in 
 creating artificial advantages to offset natural ones, nothing 
 is left to the statesmen of the country possessing the raw ma- 
 terial but to withstand the encroachment by the imposition of 
 an equalizing duty. 
 
 The author of "Made in Germany" and other writers have 
 recently been emphasizing the evils resulting from the ten- 
 dency of transportation corporations to carry goods brought 
 from a long distance for a lesser rate than they charge for 
 making short hauls. Williams tells us that "some British 
 steamers commencing to load for South America at Bremen 
 and finishing at Liverpool charge 8s per ton at Bremen, but 
 when they come to Liverpool I2s 6d and ten per cent, with 
 five per cent returnable, being Ss i^d in favor of the for- 
 eigner. * * * This prejudicing of trade has been ac- 
 counted for by the existence of a shipping ring, but (as Mr. 
 Jeremiah Head has pointed out) the better explanation lies 
 in the competition from the continent of the subsidized lines. 
 These lines have a minimum rate of interest guaranteed by 
 the state, and, whether empty or laden, their steamers are 
 bound to run."* 
 
 ♦Williams, Trade in Germany, p. 148.
 
 EQUALIZATION 521 
 
 The same writer also calls attention to the lowness of 
 German railway charges, which have their origin in state 
 aid. The results of this artificial promotion of trade is to 
 cause products to be hauled great distances from the interior 
 of Germany to points in England for a less charge than the 
 English producer has imposed upon him by the British rail- 
 roads. In the same way the eagerness of the American rail- 
 ways co-operating with the Atlantic liners to force traffic re- 
 sults in products from the United States being landed- in the 
 cities of Great Britain more cheaply than they can be hauled 
 from English farms to the local markets. The tremendous 
 waste involved by pursuing such methods has been dwelt 
 upon in the chapter showing that the tendency of free trade 
 is to promote unnecessary hauling. The remedy for the 
 trouble is pointed out by the writer quoted above, who says : 
 "The German Government would soon tire of letting Silesian 
 coal owners send their coal at ruinously low rates to Baltic 
 ports for shipment to England when it found that England 
 calculated the amount it gave and added an equal sum to the 
 cost of the coal on landing in England."* 
 
 The Cobdenite who has these facts presented to his con- 
 sideration refuses to recognize their significance and persists 
 in believing that it will be possible to induce nations to act 
 dififerently from individuals in trade matters. He assumes 
 that a country may be persuaded to stop extending bounties 
 to beet sugar growers, but he would ridicule the suggestion 
 that an individual should refrain from resorting to the giving 
 of bonuses to workingmen to stimulate them to greater ef- 
 fort ; he complains because Germany and other countries call 
 transportation lines into existence by offering subventions, 
 but he would be amazed if he were told that consistency 
 ought to make him demand that merchants and others who 
 maintain porters and wagons for the free delivery of the 
 wares sold by them should be prevented from doing so; he 
 
 ♦Williams, Trade in Germany,, p. i68.
 
 522 PROTECTION AND PROGRESS 
 
 professes to regard as a grievous burden on the consumer 
 the imposition of a tariff duty because, as he alleges, it is a 
 tax on one industry at the expense of other industries, yet he 
 deliberately shuts his eyes to the fact that the irrational ef- 
 fort of Great Britain to maintain trade supremacy is piling 
 up a mountain load of taxation which will ultimately crush 
 the life out of British industry. 
 
 An English writer has recently pointed out the length to 
 which his countrymen seem disposed to go in their attempt 
 to force external trade at the expense of the general tax- 
 payer. He shows that the cost of British armament, which 
 was £24,065,876 in 1873, increased to £33,265,683 in 1893, 
 and to £41,238,802 in 1897. In the meantime the export 
 trade, to maintain which these enormous expenditures are 
 incurred, only increased from £682,292,127 to £745,422,363 
 in 1897. "It is difficult," says the writer who collates these 
 figures, "for a business man to escape the interpretation they 
 suggest," and he quotes approvingly the comment of Mr. A. 
 J. Wilson, who remarks : "If the insurance premium on our 
 commerce abroad represented by the cost of our navy has 
 risen 100 per cent in twenty-five years, while the value of the 
 commerce, import and export together, has not risen fifteen 
 per cent, what inference can be drawn except either that the 
 outlay is a gross and cruel imposition upon the country or 
 that our conduct toward foreign nations has become so exas- 
 perating of late years as to have enormously increased the 
 risk of war with powerful enemies, either alone or in com- 
 bination against us ?"* 
 
 In another place an attempt was made to show that these 
 vast expenditures are the direct result of the unnatural effort 
 of the British to monopolize the world's manufacturing in- 
 dustry ; here they are merely referred to in order to demon- 
 strate that free trade requires as much artificial bolstering as 
 the attempt to raise pineapples under glass would in a tem- 
 
 *Hobson, Free Trade and Foreign Policy, Contemporary, August,
 
 EQUALIZATION 523 
 
 perate climate. There is no one in authority in free trade 
 England who holds to the view advanced by the writer just 
 quoted that these expenditures are unnecessary and that 
 British trade would flourish without them. On the contrary, 
 there is a profound conviction that the increased armament is 
 absolutely necessary and that the taxation for its support, no 
 matter how galling, must be endured if Great Britain is to be 
 saved from sinking to the secondary position which her area 
 and natural resources would entitle her to hold. 
 
 In whatever aspect the protective tariff is viewed, whether 
 as a promoter of industries or as an equalizer of conditions 
 existing in different nations, or as a method of taxation by 
 which the incidence is distributed so that the luxuries of the 
 rich are made to bear a larger proportion of the burden than 
 those of the working classes, or as a refuge from the system 
 of taxing incomes which an eminent free trader has declared 
 is both unjust and impolitic, it commends itself to sensible 
 men. 
 
 John Stuart Mill says : "The income tax, on whatever 
 principles of equality it may be imposed, is in practice un- 
 equal in one of the worst ways, falling heaviest on the most 
 conscientious." To this he adds : ''This would leave us to 
 concur in the opinion which until of late has usually pre- 
 vailed — that direct taxes on income should be reserved as an. 
 extraordinary resource for great national emergencies, in 
 which the necessity of a large additional revenue overrules 
 all objections."* This is the course adopted by protection- 
 ists in the United States, who have recognized the inequitable 
 features of a tax which, as Mill says, falls heaviest on the 
 conscientious and virtually puts a premium on dishonesty. In 
 this and in other directions the protectionists of America have 
 shown their sagacity, and the result has been the upbuilding 
 of an enormous manufacturing and agricultural industry, 
 which has created a greater amount of national wealth than 
 
 ♦Mill, Principles of Political Economy, Vol. II, p. 427-
 
 524 PROTECTION AND PROGRESS 
 
 any country has hitherto boasted, the acquisition of which 
 has been attended with so little hardship to the taxpayer that 
 the question whether the tariff is a tax is still a moot one, but 
 is answered by millions in such a way as to show that they 
 believe that in most instances it falls on the foreigner, a state 
 of mind which makes the conclusion irresistible that upon 
 whomsoever it may fall the tax is not severely felt by the peo- 
 ple of the protected country.
 
 CHAPTER XXI. 
 
 COBDENISM A FAILURE 
 
 FREE TRADE THEORIES CONFUTED BY THE SUCCESS OF PRO- 
 TECTION. 
 
 Sir Robert Giffen's claim that free trade is increasing — Purpose of 
 protection is to promote production within the national boun- 
 dary — The first American protective tariff — Washington's rec- 
 ommendation that home industries should be encouraged by 
 protective duties — His sentiments shared by the early states- 
 men of the republic — The object of economic policies is to in- 
 crease the national wealth — Giffen's assumption that protection 
 will be abandoned by the United States — Protection a sound 
 economic policy because it reduces waste to a minimum — Grow- 
 ing evidence of dissatisfaction over the results of the free trade 
 system — The cheapening of food products has not given England 
 a special advantage — Advances in skill made by rivals of Great 
 Britain — The intense competition created by driving the Eng- 
 lish agricultural laborer from the soil — Proposals to forcibly 
 deport pauper children — Rapid growth of socialistic tendencies 
 in England — The pauper system of England — The proposal to 
 establish public granaries in England — Probable effects of the 
 exhaustion of British coal measures — The maintenance of sea 
 power and the coal supply — The necessity of the United States 
 finding an outlet for surplus coal will create a great ocean- 
 carrying trade — The dissipation of English coal resources will 
 ultimately prove destructive to British maritime power — The 
 question of subsidizing ocean-going ships — Our cheap iron and 
 cheap coal may render such a resort unnecessary. 
 
 Sir Robert Giffen, to whom frequent reference has been 
 made in these pages, in an address delivered by him before 
 the North Staffordshire Chamber of Commerce on Decem- 
 ber 15, 1897, gave expression to certain views which seem to 
 
 525
 
 526 PROTECTION AND PROGRESS 
 
 demonstrate the incapacity of a Cobdenite, no matter how 
 gifted, to perceive the drift of current economic thought or 
 to reaHze that the principles of Cobdenism have been ut- 
 terly abandoned even in England. Instead of recognizing 
 facts as they exist, he asserts "that the substantial successes 
 in matters commercial have been for a long time past and 
 still are on the side of free trade and not on the side of pro- 
 tection. Not only," he says, "is there far more free trade in 
 the world than people sometimes think, but much of it is of 
 very recent growth."* 
 
 This extraordinary conclusion, and also that which im- 
 plies that the enormous expansion of internal trade of pro- 
 tectionist countries is a triumph for free trade, is reached by 
 totally ignoring the fact that while protection is a national 
 policy it never contemplated, as all Cobdenites falsely as- 
 sume, the restriction of trade. Its purpose has always been 
 plainly stated by its advocates to be the promotion of indus- 
 try within the national borders, and it has for its basis the 
 rational concept of Adam Smith that "it is of more conse- 
 quence that the capital of a manufacturer should reside within 
 the country," as "it necessarily puts into motion a greater 
 quantity of productive labor and adds a greater value to the 
 produce of the land and labor of the society/'f Protection- 
 ists endowed with reasoning powers could not help seeing 
 the force of Smith's observation that "the greater the num- 
 ber and revenue and inhabitants of the town the more ex- 
 tensive is the market which it aflfords to those of the coun- 
 try; and the more extensive that market it is always more 
 advantageous to a great number. The corn which grows 
 within a mile of the town sells there for the same price with 
 that which comes from twenty miles' distance." J They also 
 recognized the homely truth in this saying: "A small quan- 
 
 ♦Giffen, The Success of Free Trade, New England Free Trade 
 Bulletin, No. 2, of 1898. 
 
 fSmith, Wealth of Nations, Book II, Chap. V. 
 Jlbid, Book III, Chap. I.
 
 COBDENISM A FAILURE 527 
 
 tity of manufactured produce purchases a great quantity of 
 rude produce. A trading and manufacturing country, there- 
 fore, naturally purchases with a small part of its manufac- 
 tured produce a great part of the rude produce of other 
 countries ; while, on the contrary, a country without trade and 
 manufactures is generally obliged to purchase at the expense 
 of a great part of its rude produce a very small part of the 
 manufactured produce of other countries."* 
 
 These ideas were strongly impressed on the minds of the 
 men who took a leading part in the formation of the Amer- 
 ican Union. The First Congress of the United States, in 
 the preamble to the first revenue law adopted, declared : "It 
 is necessary for the support of the Government, the discharge 
 of the debts of the United States and the encouragement and 
 protection of manufactures that duties be laid on goods, 
 wares and merchandise imported." f In Washington's first 
 annual message to Congress he said : "The advancement of 
 agriculture, commerce and manufactures by all proper means 
 will not, I trust, need recommendation ; but I cannot forbear 
 intimating to you the expediency of giving effectual encour- 
 agement as well to the introducer of new and useful inven- 
 tions from abroad as to exertions of skill in producing them 
 at home.'J Madison expressed similar views, declaring 
 himself in favor of a policy "calculated to encourage the pro- 
 ductions of our country and protect our infant industries" 
 when presenting an amendment to the first revenue law, and 
 Hamilton elaborately defended the protective policy thus 
 early inaugurated, giving as a leading reason why it should 
 be retained that it would, by promoting manufactures, create 
 "a new demand in some instances and a steady one in all 
 cases for the products of the soil." 
 
 Washington, seeing with a prescient eye the dangers of 
 
 *Smtth, Wealth of Nations, Book IV, Chap. IX. 
 f Act approved July 4, 1789, by George Washington. 
 |First annual address of George Washington. January 8, 1790; Mes- 
 sages and Papers of the Presidents, Vol. I, p. 65.
 
 528 PROTECTION AND PROGRESS 
 
 dependence, urged his countrymen in his Farewell Address 
 to build up home industries. "Congress," he said, "has re- 
 peatedly and not without success directed their attention to 
 the encouragement of manufactures. The object is of too 
 much consequence not to insure a continuation of their ef- 
 forts in every way which shall appear eligible. *=(=** 
 Ought our country," he asks, "to remain dependent on for- 
 eign supply precarious because able to be interrupted? If 
 the necessary article should in this mode cost more in time 
 of peace will not the security and independence thence arising 
 form an ample consideration?" 
 
 In the face of this testimony, which conclusively proves 
 that the national welfare was the paramount idea of the early 
 protectionists and all their followers, and of the further fact 
 that concurrently with the adoption of the system provisions 
 were inserted in the Constitution providing for absolute 
 freedom of trade between the people of the different States 
 of the Union,* Mr. Giffen seriously refers to this free inter- 
 course as though it were a new development, forced on the 
 nation by the example of Cobdenism. He says : "Thus in 
 spite of all that protectionist policy may do, even the most 
 protectionist country nozvadays conducts the greater part of 
 its business under free trade conditions," and in another pas- 
 sage he asserts : "Protectionists, however, notwithstanding 
 all their boasting, have not the courage of their convictions. 
 They will not set up customs lines with protective tariffs in- 
 side a particular political area, however large, although the 
 economic conditions are present which they plead as excusing 
 such tariffs."! 
 
 Such a statement as this can only be characterized as 
 bungling disingenuousness. Sir Robert, as a student of eco- 
 nomic subjects, must know that the protective policy is wholly 
 founded on considerations of national welfare, and that, 
 
 ♦Constitution of the United States, Article I, Sections 8 and 9. 
 fGiffen, The Success of Free Trade, New England Trade Bulletin, 
 No. 2, 1898.
 
 COBDENISM A FAILURE 529 
 
 therefore, to have attempted to set up any other rule than 
 that formulated in the Constitution providing for the freest 
 possible trade intercourse between the people of the several 
 States would have been inconsistent and would have violated 
 the conviction expressed by Washington, and shared by all 
 protectionists, that in order to guard against dependence 
 upon other nations it would be wise for the people of the 
 United States to make such sacrifices as would be necessary 
 to create and maintain a home manufacturing industry. 
 
 Puerile is too feeble a term to employ in characterizing 
 comment of the kind which thus ineffectually seeks to dis- 
 guise the real purposes of economic policies. Sir Robert 
 Giffen knows perfectly that the object of protection in this 
 country is the development of the national resources and that 
 the ultimate aim of those who advocate it is to increase the 
 national wealth. This, too, we infer from the statements and 
 admissions of followers of the Manchester school is the object 
 of free trade, the underlying assumption being that the crea- 
 tion of wealth must result in bettering the condition of the 
 people within the borders of the country in which the wealth 
 is accumulated. If this is not the purpose of the Cobdenites 
 Sir Robert Giffen has wasted much time in the preparation 
 of his voluminous essays and his statistical tables in which 
 he laboriously strives to show that the English people have 
 had their comforts increased during the past half century and 
 that the inequalities of condition are gradually being re- 
 moved.* 
 
 It is idle, therefore, to undertake to show, as Sir Robert 
 Giffen does, that because there is transacted within the bor- 
 ders of the United States a trade which rivals in volume the 
 combined external trades of all the nations of the world a 
 great victory has been gained for free trade. It is easy, how; 
 ever, to show, on the other hand, that had protection been 
 neglected the development of the national resources would 
 
 *Giflfen, "The Growth of Capital" and "Essays in Finance." 
 34
 
 530 PROTECTION AND PROGRESS 
 
 have languished and that the wealth of the United States 
 might not have increased at all. That appears to be the fate 
 of all countries whose peoples have not energy enough to 
 adopt a course designed to promote the national welfare, or 
 whose statesmen lack the wisdom to perceive the force of 
 Smith's assertion that the nations which confine themselves 
 to the ruder forms of production are merely working for the 
 affgrandizement of the nations sagacious enough to diversify 
 their industries. 
 
 And it may be asserted with equal positiveness that Sir 
 Robert is also at fault when he declares that "the United 
 States, nolens volens, must very soon become a country of 
 international free trade," if he means thereby that the states- 
 men of this country will in the future disregard the necessity 
 of adopting some method by which international conditions 
 may be equalized. In venturing this assumption he has dis- 
 regarded the tendencies displayed in free trade England, 
 where a Government has, under popular pressure, been com- 
 pelled to resort to the expedient of extending aid to the 
 planters of the British West Indies, whose business has been 
 destroyed by the competition of the beet sugar growers, and 
 that there is now under British consideration a project to 
 maintain national granaries in order to ward off the danger 
 which the overpopulation and the unprofitableness of agricul- 
 ture in the British Isles has brought about. In the face of 
 movements such as these, and the rapidly growing sentiment 
 that Great Britain is at a commercial disadvantage in dealing 
 with other nations, it is something in the nature of a diversion 
 for an advocate of free trade to pretend that protection has 
 defeated its own objects and that we will be forced to throw 
 open our ports to competing goods without exacting that 
 they shall, before being privileged to enter our markets, pay 
 a tax which will equalize any differences in conditions that 
 may exist between this country and the country from which 
 the imports come. 
 
 Before the abandonment of protection takes place it will
 
 COBDENISM A FAILURE 531 
 
 have to be demonstrated that international competition under 
 existing conditions would not be conducive to wastefulness, 
 and it would have to be made clear to American statesmen 
 that the adoption of the Cobden idea would not result in a 
 competition in which victory would crown the efforts of 
 capital rather than deserving competitors. That the contest 
 and its result would be of the nature described may be in- 
 ferred from these remarks made by the representative of the 
 Boston Chamber of Commerce before the Quebec conference 
 which attempted the adjustment of tariff and other differ- 
 ences between the United States and Canada. The gentle- 
 man alluded to said: "What we desire is a chance to sell 
 our manufactured goods in the Canadian markets. We be- 
 lieve in asking this of the Quebec conference, we are speak- 
 ing the sentiments of 280,000 workingmen along the Cana- 
 dian border of the United States. In Massachusetts alone we 
 manufacture $900,000,000 of goods each year, and we want a 
 market for these goods. We do not fear competition, for 
 we have the greater wealth and facilities on our side."* 
 
 There is no hint here of the fact that there is no substan- 
 tial difference between the natural conditions of Canada and 
 New England which would make the latter better fitted to 
 manufacture than the former ; there is simply a confident ex- 
 pression of the belief that the greater wealth and existing 
 facilities of the New England States would, in what is 
 euphemistically termed a fair contest, enable the Americans 
 to beat the Canadians in their own markets. The ideas of the 
 speaker differ in no essential particular from those expressed 
 by Englishmen during the period when Americans, under 
 the influence of the slave oligarchy, were wavering in their 
 devotion to protection and were showing signs of disregard- 
 ing the warning of Washington to avoid remaining in a state 
 of dependence upon foreigners. Had the United States been 
 misled by such arguments the representative of the New 
 
 *Howes, address of to Quebec Conference, August 31, 1898.
 
 532 PROTECTION AND PROGRESS 
 
 England Chamber of Commerce would not have been able to 
 make his proud boast, for the manufacturing industry of that 
 section would have been unable to withstand the assaults of 
 the English, and the wealth and superior facilities he speaks 
 of as existing in Massachusetts would not have been called 
 into existence. 
 
 It is possible that the Canadians, disregarding the lessons 
 of experience, may conclude that present cheapness and per- 
 petual dependence are more alluring than a temporary sacri- 
 fice and permanent prosperity, but that would offer no reason 
 why we should incur the risks which Jeans and other British 
 economists and the statistics of English trade show that open 
 ports invite. Sound economy demands that the process of 
 manufacturing be carried on as near as practicable to the 
 sources from whence the supplies of raw material and the 
 food to feed the people who work it up into finished articles 
 are derived. All the sophistries that may be suggested by 
 the most ingenious dialecticians cannot disguise the fact that 
 it is wasteful to haul raw material three thousand miles to 
 be fashioned into goods to be returned to the country in 
 which the raw materials originated ; nor can any argument 
 be framed which will convince reasonable men that it is wise 
 for a country to deliberately cheapen its peculiar products so 
 that other countries may be enabled to compete on more 
 favorable terms in supplying those articles the production of 
 which brings wealth and prosperity to the producers. 
 
 The most profitable policy for the United States and the 
 world at large is that of protection. It may prove injurious 
 to Great Britain, but that is because she has attempted more 
 than her resources justify, but it cannot operate otherwise 
 than beneficially in countries of great resources, capable of 
 sustaining immense populations, such as the United States 
 and Russia. In the United States the effect of protection 
 has been to call into existence a vast manufacturing industry, 
 which, in turn, has, in the manner described by Adam 
 Smith, created a great market for farm products and per-
 
 COBDENISM A FAILURE 533 
 
 mitted an expansion which could never have taken place 
 had the nation elected to act as a hewer of wood and drawer 
 of water for those nations which had established manufac- 
 tures long before the United States entered the industrial 
 race. Now that great manufacturing industries have been 
 called into existence it would be criminal to imperil them 
 in a struggle the outcome of which would depend almost 
 wholly upon the willingness of the owners of capital and 
 workers in the old world to regain by temporary sacrifices 
 the advantages they have lost by the people of the United 
 States holding their home markets. 
 
 The intensity of such a contest can hardly be exagger- 
 ated. We have some foreshadowings of the probable con- 
 sequences in the strikes of Great Britain, which frequently 
 endure for months. No reasonable person will assume that 
 these manifestations of the discontent of workingmen and 
 the tenacious opposition to their demands made by employ- 
 ers are frivolous. The history of English industry indicates 
 that the British employer is quick enough to yield to the 
 demands of his working people when he thinks the state of 
 trade will justify him in pursuing such a course ; we must 
 assume, therefore, that when he holds out for months against 
 the demands of the trades unions he means what he says 
 when he declares that he is maintaining his position with 
 difficulty and that concessions would prove injurious ; and, 
 on the other hand, we may feel assured that the worker who 
 pinches himself to the point of starvation to win in the 
 struggle with his employer is convinced that the issue is to 
 him the vital one of whether a fair day's work is worth a 
 living wage. 
 
 These ever recurring strikes in free trade England and 
 a hundred other circumstances all indicate that Sir Robert 
 Giflfen is in error in assuming that Cobdenism is destined 
 to prevail throughout the world. J. Torold Rogers may 
 have been excusable for assuming as he did a quarter of a 
 century ago "that in England at least the question of pro-
 
 534 PROTECTION AND PROGRESS 
 
 tection of manufactures is finally settled," but it is hazard- 
 ous to make such a statement when a condition of affairs 
 exists such as that described by numerous English writers, 
 all of whom are entitled to as much consideration as Giffen, 
 who, living in the past, refuses to note what is going on 
 about him. When a Merchandise Marks Act is passed, the 
 professed object of which is to induce Englishmen to patron- 
 ize home products to the exclusion of those imported, the 
 existence of a strong protective bias is indicated. The fact 
 that a book whose plainly declared purpose is to warn Brit- 
 ons against the dangers of foreign competition can make a 
 furore in England and win applause from a large section of 
 the public shows that the security which the teachings of 
 the Manchester school once inspired has vanished and that 
 confidence in the future has been displaced by dread. When 
 Englishmen freely acknowledge the accuracy of such state- 
 ments as those we find in an economic monograph which has 
 had a larger circulation in Great Britain than any other 
 publication of a similar character in recent years, and in 
 which the writer declares that "the industrial glory of Eng- 
 land is departing and England does not know it,"* and who 
 assigns as a reason for this decadence a lack of protection, 
 which places English workingmen at a disadvantage with 
 the poorer paid workingmen of the continent, we are com- 
 pelled to distrust Sir Robert's assurances of the triumph 
 of free trade. 
 
 We are assured by an English writer that "if the United 
 Kingdom is to maintain even its present level of prosperity 
 under the present conditions of population and of manu- 
 facture, it is absolutely necessary that its export trade should 
 increase in value by about £2,600,000 annually."! The 
 indications are that under the existing system it will be 
 
 * Williams, Trade in Germany, p. i. 
 
 f Kershaw, The Future of British Trade, Fortnightly, November, 
 1897.
 
 COBDENISM A FAILURE 535 
 
 impossible for Great Britain to hold what trade she has. 
 Instead of increasing her exports, they are declining in vol- 
 ume and value.* Therefore, the question arises whether 
 that country has not more reason than those which resort to 
 protection for dreading the consequences suggested by the 
 writer just quoted, who asserts that "the second path of 
 industrial development is that upon which we are at present 
 traveling. It leads, to an international industrial warfare 
 of the most savage intensity. This warfare, if it be per- 
 mitted to proceed to its logical issue, can have but one re- 
 sult — the reduction of the standard of life and comfort in 
 all countries to the lowest level at which human beings in 
 any part of the world are willing to exist."t 
 
 As the major part of the world has refused to accept 
 the theories of Cobden the application of the above is not 
 universal. If the United States refuses to engage in a savage 
 contest of the nature described it cannot be assumed that 
 her working people will be reduced to the common level of 
 degradation which must be the outcome of the attempts of 
 great masses of capital to find employment. | But while 
 the United States and other countries decline to subject 
 their toilers to the risks which unrestrained competition 
 involves they still perform a part in the international strug- 
 gle, and one calculated to place the unprotected worker of 
 other countries at a disadvantage. Mr. Jeans has shown 
 how protective nations may preserve their home market by 
 dumping their surplus products upon those countries ready 
 to receive them. These surpluses are constantly growing in 
 volume and they are seeking a market in Great Britain and 
 in countries hitherto dependent upon British manufacturers 
 
 *Warren, The United States Export Trade, Westminster, January, 
 1899. 
 
 j- Kershaw, The Future of British Trade, Fortnightly, November, 
 1897. 
 
 jConart, The Economic Basis ef Imperialism, North American Re- 
 view, September, 1898.
 
 536 PROTECTION AND PROGRESS 
 
 for their supplies of finished articles. The magnitude of 
 this dumping movement is attested by the swelling figures 
 of English imports and the crippling of British industries. 
 Its rapid growth is a just cause for alarm and accounts for 
 the appearance of such publications as "Made in Germany" 
 and that almost revolutionary production of Robert Blatch- 
 ford, "Merrie England," which, in its various forms, has 
 had a reputed circulation of millions of copies in the United 
 Kingdom. 
 
 Sir Robert Giflen would doubtless sneer at the sugges- 
 tion that emanations such as these are taken more account 
 oi in England than his elaborate statistics and his far-fetched 
 assumption that free trade is gaining ground throughout 
 the world, but the facts are against him. It was some time 
 in 1894 that Blatchford wrote: "Suppose we go to war with 
 America! What happens? Do you remember the cotton 
 famine ? That was bad, but a mere trifle to what an Anglo- 
 American war would be. We should, in fact, be beaten 
 without firing a shot. America need only close her ports 
 to corn and cotton and we should be starved into surrender 
 and acceptance of her terms."* Since the appearance of 
 this screed the papers and reviews of England have been 
 filled with articles dwelling on the evils of dependence, and 
 the agitation will probably culminate in the creation of na- 
 tional granaries, with all the attendant dangers which such 
 a system is calculated to bring in its train. 
 
 It is doubtful, however, whether such artificial devices 
 will relieve Great Britain from the consequences of her pol- 
 icy of undue expansion in one direction. The great wealth 
 accumulated auring the period while she was profiting at 
 the expense of improvident or undeveloped countries has 
 brought about a condition of affairs which must impede 
 attempts to preserve the home market for English workers. 
 The enormous holdings of the obligations of foreigiiers, 
 
 ♦Blatchford, Merry England, Chap. IV.
 
 COBDENISM A FAILURE 537 
 
 which, while the countries indebted were in a state of de- 
 pendence upon British manufacturers, were a source of tre- 
 mendous profit, are certain to become a plague rather tlian 
 a blessing to the English workingman in the near future, 
 for it must be clear to the dullest comprehension that some 
 day such countries as the United States will be better able 
 to spare their surplus of manufactured articles than the food 
 stuffs required to maintain the people engaged in their fab- 
 rication. 
 
 The Cobdenite school of economists made an attempt to 
 perpetuate English manufacturing supremacy by inculcating 
 the idea that nations with agricultural capabilities would 
 find their greatest profit in devoting themselves to the pro- 
 duction of raw materials and food supplies and exchanging 
 them for British manufactured products. But the sophistry 
 of the argument was easily detected, and most western peo- 
 ples, as has elsewhere been shown, elected to follow the 
 more rational plan of concurrently developing agriculture 
 and manufactures. The United States in particular refused 
 to commit the blunder of confining her energies to the pro- 
 duction of those things which the English asserted she was 
 best fitted to produce. A consequence of this refusal has 
 been the development of agriculture on a more stupendous 
 scale than would have been possible had the farm and the 
 factory been divorced. 
 
 In the chapter devoted to showing the stimulating effects 
 of protection on the agricultural industry of this country 
 facts are cited which force the conclusion that the rapid 
 opening of the fertile lands of the United States was wholly 
 due to the policy of creating a domestic manufacturing in- 
 dustry. In various ways this policy operated to rapidly 
 bring under cultivation tracts which would have lain idle 
 for centuries under other conditions. This speedy develop- 
 ment largely contributed to the great cheapening of the 
 price of bread stuffs, which is one of the most striking feat- 
 ures in modern economics, and it has been more instru-
 
 538 PROTECTION AND PROGRESS 
 
 mental than any other cause in giving the old world an 
 abundant supply of meat products at prices which have made 
 that class of food less of a luxury than at any other time 
 since the Middle Ages. 
 
 But despite this remarkable cheapening of products used 
 by the toiler in maintaining existence no such result as was 
 anticipated by the Manchester school has occurred. The 
 English millhand can today obtain bread and meat more 
 cheaply than the most sanguine Cobdenite ever dreamed 
 he would, but the English manufacturer is not able on that 
 account to enlarge his export trade. So striking has been 
 the refutation of this free trade assumption it is forced on 
 the attention of men who are not directly concerned with 
 the discussion of economics, and who only refer to the sub- 
 ject because it touches a matter in which they have a spyecial 
 interest. 
 
 Among writers of this class is the author of "The Iron- 
 clad in Action." In a review of the growth of the world's 
 armaments which appeared in 1898 he presented several 
 diagrams showing the increase of national expenditure for 
 warlike purposes and the ability of the various nations to 
 support armies and navies, which he assumed would be best 
 indicated by the capacity to produce a surplus for export 
 trade. In one of these diagrams the progress of Great 
 Britain and other countries in external trade was exhibited. 
 It showed that Great Britain in the year 1868 had "a special 
 export trade" — the phrase as employed bv the v-iter mean- 
 ing natural and manufactured products of the United King- 
 dom — of i 1 80,000,00, which in 1897 had only increased 
 to £230,000,000, having, however, in the meantime, in 1890, 
 exceeded £260,000,000. The United States, on the other 
 hand, with an export trade of only £54,000,000 in 1868, had 
 in 1897 reached £190,000,000. In explanation the writer 
 remarked : "Last in the scale of general diagrams are the 
 special exports. It will be noted that Germany is steadily 
 gaining on England, while the advance of the United States
 
 COBDENISM A FAILURE 539 
 
 is simply phenomenal. * * * It is difficult," he adds, 
 "to reconcile this diagram with Cobden's prophecy. That 
 protectionist states are overhauling us fast can no longer be 
 denied, it looks as though before the end of the present 
 century the special exports of Germany and of the United 
 States will be greater than our own."* 
 
 The writer's conjecture that the exports of the United 
 States would exceed those of England before the close of the 
 century was fully justified, for the statistics of exports of 
 this country for the year 1898 show that their value con- 
 siderably exceeded those of Great Britain for the same 
 period, and nearly touched the highest point reached by 
 the United Kingdom in 1890, when the value of the special 
 exports of that country amounted to i26o,ooo,ooo.| That 
 there should be such an increase in the external trade of a 
 protectionist country concurrently with a decline in Brit- 
 ish export trade certainly warrants the assertion that Cob- 
 den's prophecy has been refuted, for there was no opinion 
 more positively expressed by Cobden and his early followers 
 than that the effects of securing abundant supplies of cheap 
 food and raw materials would enormously stimulate the ex- 
 port of manufactured articles from Great Britain. 
 
 As late as 1892, in a revised edition of an American work 
 eulogizing the British free trade system, the author, Trum- 
 bull, remarked : "It is impossible to open the national gates 
 to imports and keep exports from escaping through the gap." 
 This was designed to be satirical, as the added information 
 furnished by the writer shows: "Sir Robert Peel's experi- 
 ment made in 1842, timid as it was," he says, "proved this; 
 but neither Peel, nor Cobden, nor the most sanguine free 
 trader, could have anticipated that within forty-five years, 
 
 ♦Wilson, The Growth of the World's Armaments, Nineteenth 
 Century, May, 1898. 
 
 Warren, The United States Export Trade, Westminster, January 
 1899. The exports of the United States for the calendar year 1898 were : 
 Merchandise, $1,254,925,000; silver bullion, $53.797.ooo. The latter 
 should be considered merchandise.
 
 540 PROTECTION AND PROGRESS 
 
 under the stimulus given by free imports, the exports of 
 merchandise from Great Britain and Ireland would amount 
 in value to £248,000,000."* If another edition of the book 
 in question is called for and its author brings his informa- 
 tion down to date he will have to record a diminishing ex- 
 port, and if he conscientiously analyzes the cause he will 
 discover that the dwindling is due to the fact that "it is 
 impossible to open the national gates to imports" in the 
 manner that England does and at the same time maintain 
 national prosperity. 
 
 This free trade writer when he reviews the situation will 
 discover that his facetious allusion "to exports escaping 
 through the gap" made by imports does not fit the existing 
 condition. If he studies modern methods he will learn that 
 exports are made under high pressure, and that the nations 
 most jealously guarding against the free entrance of com- 
 peting products are those which are now most successful in 
 forcing upon the rest of the world their surpluses of manu- 
 factures and products of the soil. The cheap loaf which 
 Cobden and the other free traders set so much store by has 
 not served to maintain the commercial supremacy of Eng- 
 land, because that country has not been able to preserve 
 the advantage once undoubtedly possessed by her in the 
 superior labor efficiency of her working population. 
 
 In one of his speeches, which has been described as the 
 most eflfective ever made by Cobden, he declared: "The 
 English workman produced three times as much for a dollar 
 as the continental workman did for half a dollar. "f Had 
 this condition remained unchanged there is no doubt what- 
 ever that the English manufacturer would have permanently 
 maintained his lead, but the competing Germans and Bel- 
 gians improved their processes so rapidly that whatever 
 differences may have existed when Cobden spoke, in later 
 
 ♦Trumbull, The Free Trade Struggle in England, p. 227. 
 tibid.p. 74.
 
 COBDEx\TISM A FAILURE 541 
 
 years it has disappeared, and now the despised continentals 
 are held up as examples for the British workingmen to 
 emulate. English statesmen are now solemnly warned 
 that they must provide as good technical schools as those 
 found in Germany and other places on the continent of 
 Europe if they wish to produce manufactured articles which 
 will compare artistically with those sent out by their com- 
 petitors;* and visiting delegations of British workingmen 
 return to England and report to their fellows that "it would 
 be absolutely impossible to produce sheets (iron) in such 
 quantity and of such an appearance with the appliances we 
 (the British) have at our disposal."-}- This testimony is 
 striking, but still more surprising is the statement that "it 
 was found by the delegates of 'British Iron' that for loading 
 plates German mechanics are paid at the rate of a franc per 
 ton, whereas the Middlesborough man gets only 5^ pence to 
 7 pence. An Englishman," continues this interesting re- 
 port, "employed at a certain iron works in Germany, who 
 had once been at Darlington and Middlesborough and was 
 therefore fitted to compare, discoursed the delegates thus : 
 'Undoubtedly our men are better off than in England. We 
 pay, generally speaking, higher wages. You have some few 
 men who get higher wages than any men in our works ; but 
 over the whole of the men we get higher wages than you 
 pay.'" J 
 
 Commenting on this report, the author of "Made in 
 Germany" says: "The official statistics of wages in Ger- 
 many may be cited in confirmation. These show — not only 
 that the German worker's income averages very fairly with 
 the English dittos but — that the German's wages are on a 
 pretty steady upward grade ; which explains the signs of a 
 higher standard of living now noticeable among the German 
 
 *Wiliianis, Trade in Germany, pp. 3-I53- 
 f Ibid, p. 43. 
 :^Ibid, p. 41.
 
 542 PROTECTION AND PROGRESS 
 
 people." These facts are singularly impressive, because 
 they testify to an improvement of the standard of living in 
 Germany under a protective system concurrently with a 
 struggle in England on the part of workingmen for what is 
 called "a living wage." If there is any lesson to be drawn 
 from such a state of affairs it is that in a protective country 
 the workingman has an opportunity to share in the benefits 
 of modern improvements by raising his standard of living, 
 while in a free trade nation where a surplus of manufactured 
 products for which an outlet must be had is the usual feat- 
 ure, the employer, in order to produce as cheaply as his 
 rivals, must constantly drive his workers to the limit of 
 subsistence. This deduction is fully sustained by the cir- 
 cumstance that the recent great strikes in England have 
 raised the question whether the extremities of competition 
 will justify the worker in demanding what he calls a "living 
 wage," which may be interpreted as meaning the mainte- 
 nance of the standard of living to which the British work- 
 ingman became accustomed during the period of manufac- 
 turing prosperity in England. 
 
 The facts presented, and the additional one that all man- 
 ufacturing countries are sharing the real and fancied bene- 
 fits of the cheap loaf, make it clear that Great Britain is 
 deriving no commercial advantage from the extraordinary 
 cheapening of agricultural products of all kinds, although 
 the non-producing classes possessing incomes are profiting 
 by the fall. Not only does England fail to reap a special 
 benefit, but she has suffered immeasurably by the arrested 
 development of an industry which might have been ex- 
 panded sufficiently, had a reasonable degree of protection 
 been afforded, to preserve the country from the apprehen- 
 sion of being starved to death. And incidentally the encour- 
 agement to agriculture would have mitigated the evils of 
 the intense competition for a chance to earn a livelihood 
 caused by driving men from the tillage of the soil to English 
 cities.
 
 COBDENISM A FAILURE 543 
 
 That the competition between workers thus brought 
 about is greater than some economists suppose will be ap- 
 parent to any one who will take the trouble to examine the 
 workings of trades unionism in England. A very super- 
 ficial acquaintance with the literature of labor organization 
 will suggest the conclusion that the leaders and members 
 of the unions are acting under the pressure of apprehension. 
 The stubborn opposition to the effective use of automatic 
 and other labor-saving machinery so much complained of 
 by English employers is almost wholly inspired by the recog- 
 nition of the fact by workers that it is absolutely necessary 
 to make their combinations embrace every possible competi- 
 tor. That implies that there will always be an effort on 
 the part of such organizations to make a job go as far as it 
 can be made to in order that work may be provided for the 
 constantly increasing number who demand a chance to earn 
 a living. 
 
 Had tlie agricultural industry not been subordinated to 
 that of manufacturing the pressure of population would 
 have been less severely felt in England than it is at present 
 and is likely to be in the future. . Those who have followed 
 the writings of economists who discuss the remedies for the 
 wretchedness resulting from the overcrowding of England 
 are apt to ask themselves, when they see included among 
 them such panaceas as emigration: Is free trade really as 
 great a blessing as the Cobdenites would have us believe 
 it is ? When such a condition of affairs is produced by an 
 industrial system that philanthropists advocate the forcible 
 removal from the home country, to colonies or other lands, 
 of pauper children, it is hard to think well of it. "In the 
 case of pauper children I hold," says Rogers, "that they who 
 have put upon others the charge of their maintenance have 
 morally forfeited the right to determine their career. It is 
 the interest of honest and industrious workmen," he adds, 
 "that pauperism should be diminished as much as possible in 
 the present and obviated in the future and that crime should
 
 544 PROTECTION AND PROGRESS 
 
 be isolated and watched. Everything which increases the 
 cost of administering human societies, and still more every- 
 thing which involves the waste of wealth, diminishes the 
 resources available for the employment of industry."* 
 
 It is related of wolves that when members of the pack 
 become injured or enfeebled to such an extent that they are 
 unable to care for themselves the remainder fall upon and 
 rend them. Perhaps it may be carrying the simile too far 
 to say that the suggestion made by Rogers puts the duty 
 of society on the same plane as the practice of wolves, but 
 when we reflect that the wretched paupers whose descend- 
 ants are to be expatriated for the good of society are often 
 the victims of an industrial system which works so illy that 
 people go naked and are starved because too much clothing 
 and food is produced it is permissible to use it. It is the 
 proud boast of many free traders that the system they advo- 
 cate has added immensely to the national wealth and that 
 the population of the United Kingdom has been greatly 
 increased through its agency. But if the result of this in- 
 crease is to give the questions raised by Malthus an undue 
 interest and to make such men as John Stuart Mill seriously 
 discuss the propriety of passing laws to keep the birth rate 
 within limits it is hardly a matter to be referred to with 
 pride.f 
 
 "In all old countries — all countries in which the increase 
 of population is in any degree checked by the difficulty of ob- 
 taining subsistence — the habitual money price of labor," says 
 Mill, "is that which will just enable the laborers, one with 
 another, to purchase the commodities without which they 
 either cannot or will not keep up the population at the cus- 
 tomary rate of increase." J That the difficulty here referred 
 to is becoming more intense day by day in Great Britain 
 
 ♦Rogers, Six Centuries of Work and Wages, p. s6x. 
 fMill, Principles of Political Economy, Vol. II, p. 432. 
 Jlbid, Vol. II, p. 261.
 
 COBDENISM A FAILURE 545 
 
 is manifest from the increasing number of publications in 
 which the doctrines of Mahhus are respectfully referred to 
 and by the undoubted spread of socialism in the United 
 Kingdom and the extraordinary means resorted to in order 
 to relieve the pressure of population. 
 
 The English seem to be unconscious of the fact that 
 they are rapidly marching along the highway which Spencer 
 and others once fancied the people of Great Britain would 
 never tread. In addition to the colossal pauper system 
 of indoor and outdoor relief, we now see the state and its 
 political subdivisions supplying the masses with those util- 
 ities which in protectionist countries are left to individual 
 effort. Herbert Spencer at one time, under the influence 
 of the spell of Cobdenism, declared that all interference of 
 this kind on the part of the state was pernicious. He went 
 so far as to deprecate sanitation at the public charge,* 
 taught that it was a mistake to educate the people at the 
 expense of the community ,t and warned his readers to not 
 make the mistake of thinking "that the apparently gratui- 
 tous instruction for his offspring would be of no weight 
 with the workingman deliberating on the propriety of tak- 
 ing a wife,"| and really seemed to believe that "the judg- 
 ment of the consumer" would be a sufficient safeguard to 
 protect him against the evils of adulteration and to prevent 
 his being imposed upon by predatory druggists whose con- 
 science would permit them to sell inferior or poisonous 
 drugs. II The attempt of the state to interfere in any of 
 these matters Spencer thought would lead to slavery. § 
 
 From these grotesque views of the advocates of laissez 
 faire, which may easily be traced to the mistaken opinion 
 that it was the abandonment of the corn laws which led 
 
 *Spencer, Social Statics, p. 315. 
 
 fibid, pp. 166-171. 
 
 JIbid, p. 177. 
 
 ||Ibid, p. 203. 
 
 gibid, Man vs. the State, p. 331. 
 35
 
 546 PROTECTION AND PROGRESS 
 
 iii the flood of wealth which has pouted into Great Britain 
 since their abrogation, it is interesting to turn to the testi- 
 mony of recent writers on municipal affairs in England. 
 From them we may discover how rapidly, under the pressure 
 of an increasing indigent population, the state in England 
 is assuming functions which could doubtless be more cheaply 
 performed by individuals, but which the people demand 
 shall be carried on by the agents they select to act for them 
 in their collective capacity. The professed purpose of the 
 movement is to deprive individuals of the opportunity of 
 earnmg profit at the expense of the community, although 
 the motive is somewhat disguised by the assumption that 
 the object is to prevent corruption in the administration of 
 public affairs. According to Albert Shaw, there are lodging 
 houses in Great Britain maintained by municipalities which 
 entertain hundreds of thousands of guests annually; public 
 hospitals are provided in Glasgow and other cities ; san- 
 itary officers now invade the houses of individuals and in- 
 sist that staircases and courts be kept clean ; water and gas 
 are now generally supplied to householders in English cities 
 by the municipality, and in some cities transportation facil- 
 ities are provided by the same agency; the state also com- 
 pels the companies operating steam roads to run working- 
 men's trains, and the movement to provide better tenements 
 at the public expense by tearing down rookeries and widen- 
 ing streets in congested districts is growing rapidly in the 
 larger towns of the United Kingdom.* 
 
 It may be urged that these tendencies are also manifest 
 in the United States, but whenever they show themselves 
 in this country they are responsive to a different motive 
 from that which impels intelligent Englishmen to assent 
 to the setting aside of the doctrines of laissez faire. In this 
 country any steps that may be taken in the direction of the 
 
 ♦The American consul at Birmingham, Eng., recently made a 
 report in which he declared that the tendency towards socialism in 
 Great Britain was very marked.
 
 COBDENISM A FAILURE 547 
 
 regulation of competition will not do violence to the theory 
 of protection, for that is based on the assumption that the 
 general welfare may be promoted by wise restraint. But 
 free trade proceeds on the contrary idea that good must 
 necessarily result from excessive competition, as its effect 
 is to lower the price of commodities, thus presumably bene- 
 fiting the consumer. Therefore when we see the state in 
 Great Britain gradually usurping all those functions which 
 Spencer and other philosophers of the laissez faire school 
 insist can best be carried on by individual exertion we must 
 assume that the disregard of their teachings is due to the 
 fear of the consequences of the working of the British in- 
 dustrial system rather than to the belief that a modified 
 form of state socialism, which may lead to something more 
 far reaching, will result in an economic gain. 
 
 It is an ingrained habit of English historical writers to 
 attribute the decadence of the Roman Empire to the growth 
 of a proletariat supported at the expense of the state. 
 Without undertaking to examine in detail all the evidence 
 which seems to point to a condition of affairs in Ancient 
 Rome somewhat different from that usually assumed by 
 writers, it may be confidently asserted that it strikingly 
 resembles that of the England of the present day. The 
 popular impression that the masses in Rome were supported 
 at the public expense is certainly erroneous. That there 
 was a large pauper element is not questioned, but that it 
 was relatively larger than that of Great Britain today there 
 is no reason to believe. Nor is there any ground for the 
 assumption that the distributions of corn and oil were made 
 for the purpose of keeping the populace from becoming 
 dissatisfied over the usurpations of the Emperors. There 
 is nothing so well established as the antiquity of the system 
 of gratuitous distribution. "Corn was distributed to the 
 poor of Rome from very early times in the temple of Ceres, 
 under the superintendence of the Aediles Cereales, whose 
 office appears to have been almost similar to that of the
 
 548 PROTECTION AND PROGRESS 
 
 British poor law commissioners."* In later times, when, 
 as the result of conquests, Rome was deluged with corn, 
 the Tribunes of the people fixed the price at which it should 
 be sold from the public granaries to the commonalty at a 
 sum equal to about one-half penny a peck. This, we are 
 told, "was only one-fourth the current price," a bit of in- 
 formation which forces the conclusion that only a limited 
 number of the commonalty, perhaps the very poor, were 
 permitted to buy on the terms indicated, for if the masses 
 could have obtained grain at the price named a current rate 
 four times as great could not have been maintained. Still 
 later, we find accounts of corn distributions which will not 
 permit the assumption that they were as general as has been 
 claimed. 
 
 Gibbon relates that "Severus considered the Roman Em- 
 pire as his property" and that "in the administration of jus- 
 tice the judgments of the Emperor were characterized by 
 attention, discernment and impartiality, and whenever he 
 deviated from the strict line of equity it was generally in 
 favor of the poor and oppressed ; not so much, indeed, from 
 any sense of humanity as from the natural propensity of a 
 despot to humble the pride of greatness and to sink all his 
 subjects to the same common level of absolute dependence. 
 His expensive taste for building magnificent shows, and, 
 above all, a constant and liberal distribution of corn and 
 provisions, were the surest means of captivating the affec- 
 tions of the Roman people. The misfortunes of civil discord 
 were obliterated. The calm of peace and prosperity was 
 once more experienced in the provinces ; and many cities, 
 restored by the munificence of Severus, assumed the title 
 of his colonies and attested by public monuments their grati- 
 tude and felicity."! 
 
 This view of Gibbon may be regarded as the one ordi- 
 
 *Gibbon, History of Rome, foot-note Bohn edition, Vol. II, p. 193. 
 tibid, Vol. I, p. 156, Chap. V.
 
 COBDENISM A FAILURE 549 
 
 narily accepted, but it will hardly bear analysis. It would 
 not be difficult to believe that an absolute monarch might 
 attempt to maintain his popularity in the capital by shower- 
 ing favors on the subjects in his immediate vicinity, thus 
 preventing seditious uprisings, but no reasonable person will 
 accept the conclusion that Septimus Severus could have 
 stripped the provinces for the benefit of the proletariat of 
 the city of Rome and at the same time secure the gratitude 
 and promote the felicity of the provincials. If, concurrently 
 with the assumed gratuitous feeding of the masses in the 
 capital city, there had been trouble and want in the provinces 
 we might accept the conclusion that it was Roman policy to 
 support men in idleness, but the assertion that calm and 
 prosperity reigned outside of the city forbids such an as- 
 sumption. 
 
 No doubt a more correct view of the corn and other 
 distributions is that they were rendered necessary by the 
 ill workings of an economic system which differs less from 
 that of modern times than is commonly supposed. Although 
 it is assumed by many writers that Rome was a vast hive of 
 drones, there is abundant evidence that it was really a great 
 industrial center and that its poverty was as much enforced 
 as that of the submerged of London. If this was the case 
 we can readily perceive that what is regarded by some as 
 the result of despotism was really the outcome of a policy 
 analogous to that which prompts England to take care of her 
 vast pauper population at the public expense and causes her 
 to contemplate the erection of public granaries. Speaking 
 of the later empire Gibbon says: "Whenever the seasons 
 were less propitious the doubtful expedient of forming 
 magazines of corn, fixing the price and prohibiting the ex- 
 portation attested at least the benevolence of the state."* 
 It is possible, however, that benevolence was a secondary 
 motive and that the primary one was the safety of the state. 
 
 **Gibbon, History of Rome, foot-note Bohn edition, Vol. IV, p. 271, 
 Chap. 39.
 
 550 PROTECTION AND PROGRESS 
 
 In short, the granaries were a mihtary necessity, and their 
 erection led to the practice of the fixing of prices which 
 descended from very remote times. It is not at all improh- 
 able that the Romans might have escaped the injurious 
 effects of Government interference with the operations of 
 the markets if the huge military operations of the empire 
 had not necessitated the adoption of extraordinary precau- 
 tions to insure steady supplies of food for the armies and 
 for the people whose industries were liable to be interrupted 
 at any time by warlike troubles. 
 
 Whether Great Britain's proposed experiment of estab- 
 lishing granaries for supplying the people with breadstuffs 
 in case of an emergency will lead to such results as those 
 described is something the future alone can determine, but 
 that the outcome may prove disastrous to the principle of 
 competition can hardly be doubted. A nation that now 
 gratuitously feeds in public establishments nearly a million 
 paupers may easily take the step of selling at cost or under 
 cost to a distressed people. There is nothing more likely 
 than the adoption of some such plan if the granary idea is 
 resorted to. In that event, should there be an artificial 
 scarcity due to blockade or any other cause, the Government 
 would hardly be able to sell at a profit. Public opinion 
 would not permit such a course. The demand would be for 
 cheapness, and the Government would have to respond to 
 it. The practice once inaugurated, its continuance would 
 be insisted upon, and under the pretense of insuring the 
 people a steady supply of corn the state would become the 
 regulator of prices. 
 
 But expedients of this kind will be powerless to avert 
 the effects of the congested condition brought about by the 
 undue stimulus of manufacturing in England. Ancient 
 Rome, in her last gasps, had cheaper corn than the British 
 may hope to obtain, but cheap as food was the Romans were 
 unable to buy it. It has been suggested that where the con- 
 ditions of a high industrial development exist, as they do
 
 COBDENISM A FAILURE 551 
 
 in England, decay is impossible; that a branch here and 
 there may wither, but that the tree will put forth fresh 
 shoots and grow more vigorously than ever. No doubt Sir 
 Robert Gift'en holds to this view, as do many other free 
 traders who treat with contemptuous indifference allusions 
 to the injury which English agriculture has suffered, and 
 who answer, when their attention is called to the decline of 
 the British manufacture of silk and linen and the disappear- 
 ance of sugar rejfineries from the United Kingdom, that they 
 would not have met their adverse fate unless they de- 
 served it. 
 
 Doubtless this method of disposing of the matter seems 
 the proper one to those who still retain the belief that under 
 any and all circumstances the vast quantity of capital accu- 
 mulated by the British will be used in the promotion of 
 some form or other of English industry, and that the growth 
 of the population of the world, and the development of its 
 vast and varied resources, will always give profitable em- 
 ployment to ingenious Britons. That this view is not sound 
 is suspected by some and will finally be recognized by all 
 Englishmen. 
 
 Those who have assumed that the circumstances will 
 always be such that the British will be able to find profitable 
 employment at home for their capital overlook the possi- 
 bilities that have suggested themselves to Mallock, who, in 
 his discussion of socialistic problems, has admitted that 
 the extinction of England's coal measures would necessarily 
 be followed by a diminution of population. Mr. Mallock 
 speaks of exhaustion, but the practical effect so far as 
 commercial supremacy is concerned will be the same when 
 it is no longer possible for the British to mine coal in com- 
 petition with other peoples. In that event the result fore- 
 shadowed must take place. When England can no longer 
 secure abundant supplies of cheap fuel her trade must de- 
 cline and "the more energetic of the superfluous inhabitants 
 will emigrate of their own accord," while the propriety of
 
 SS2 PROTECTION AND PROGRESS 
 
 somehow deporting "the less energetic" will have to be con- 
 sidered.* 
 
 The imminence of this state of affairs has an important 
 bearing on Sir Robert Giffen's assumption that free trade 
 is gaining ground throughout the world. It is incredible 
 that in the face of a condition such as that suggested by 
 observation of the fact that the British coal mines are being 
 worked at a constantly increasing cost the statesmen of other 
 countries should relax their efforts to provide themselves 
 with cheaper supplies of the source of energy. This means 
 that the policy of developing domestic resources by the 
 aid of protection must be continued so that the dearer coal 
 may not, by the adventitious aid of capital, be imposed on 
 countries which have an abundance of undeveloped fuel 
 inviting exploitation and offering profit to those who accept 
 the invitation. 
 
 In a recent English review article on the coal supplies 
 of the world the writer, reviewing the progress made in 
 mining by the different nations and the trade in coals, re- 
 marked: "As yet the United States have not done much 
 in the way of exporting coal — only two or three million tons 
 per annum, chiefly to Canada and the West Indies ; but 
 that is because the increase in production has only kept 
 pace with the domestic consumption. Yet the development 
 has been extremely rapid — from 99,000,000 tons in 1885 to 
 178,000,000 tons in 1897 — an increase of 75 per cent in a 
 dozen years. To put it otherwise, the output of the United 
 Kingdom in 1885 was 159,351,000 tons and in 1897 202,- 
 129,932 tons — an increase of 42,778,931 tons. The output 
 of the United States in 1885 was 99,069,000 tons and in 
 1897 178,000,000 tons — an increase of 78,931,000 tons, or 
 nearly double ours. At this rate of progression there is little 
 room for doubt that the United States will soon take our 
 place as the largest coal producer in the world. And then 
 
 *Mallock, Altruism in Economics, Forum, August, 1896.
 
 COBDENISM A FAILURE 553 
 
 America will become our most formidable competitor in the 
 Atlantic, and possibly even in the Mediterranean, coal trade ; 
 for it will be as easy to replenish many of the coaling stations 
 and some of the continental ports from Newport News as 
 from Cardiff."* 
 
 In addition to this information the writer supplies many 
 facts tending to show the general diffusion of coal through- 
 out the world, his purpose being to determine as nearly as 
 possible the extent and nature of the competition which 
 Great Britain must in future expect in the industry of fur- 
 nishing coal to foreign peoples. Among other things, he 
 found that of the world's coal supply of 574,000,000 tons in 
 1897 the British Empire furnished 217,000,000 tons, or, say, 
 38 per cent. "Our only close competitor," he adds, "is the 
 United States, and, putting aside that country as one with 
 whom, as Mr. Chamberlain says, we ought to combine in 
 bonds of permanent amity, we still have more coal than all 
 the other powers put together. As coal gives sea power our 
 future in the Pacific and in the East depends on the re- 
 sources of British India, British Columbia and Australasia, 
 and on our relations to the unplumbed depths of the Chinese 
 coal seams, not on the whims and vagaries of Welsh and 
 English colliers. "t 
 
 The effect of the waste of energy caused by the ex- 
 ploitation of coal measures for the purpose of stimulating 
 manufactures for export has been described elsewhere in 
 these pages, but the probable result of the competition to 
 which Taylor alludes may be referred to here with advan- 
 tage. The careful reader of this article will not fail to note 
 that his discussion merely goes to the matter of future sea 
 power and that he fails to consider the question : What will 
 happen when the United Kingdom no longer finds it profit- 
 
 *Taylor, The Coal Supplies of the World, Nineteenth Century, 
 July, 1898. 
 •j-Ibid.
 
 554 PROTECTION AND PROGRESS 
 
 able to ship coals to those regions which are now the prin- 
 cipal customers for the British coals exported? 
 
 If Mr. Arthur Peel, secretary of the British Embassy 
 at Washington, does not exaggerate when he says : "On 
 the one hand, the almost unlimited resources of the coal 
 fields of the United States, the excellence of the quality of 
 coal, the possibilities of greater economy in the system of 
 mining and greater reduction in the cost of freight; and, 
 on the other hand, the immense amount of coal consumed 
 within the United Kingdom, the recent increase in the 
 average of value at the pit's mouth * * * are consider- 
 ations which tend possibly in the direction of trade relations 
 of such a nature abroad as may result in a great development 
 of the export of coal from the United States,"* the changes 
 in the coal industry which Mr. Taylor recognizes and de- 
 scribes may operate in a fashion which he does not foresee. 
 These changes will not only greatly interfere with the ex- 
 tension or maintenance of British sea power, but they will 
 make its maintenance unnecessary. 
 
 In 1896 the coal shipments of Great Britain constituted 
 84.7 per cent of the entire volume of British exports. Ac- 
 cording to trustworthy calculations, these exports formed 
 "over 50 per cent of the tonnage cleared from the United 
 Kingdom."! If the 44,200,000 tons of coal shipped in the 
 year named gave employment to half of the tonnage flying 
 the British flag, and if, as further asserted by an authority 
 previously quoted, a transitory gain of exports in 1896 was 
 almost wholly due to increased shipments of coal, the ques- 
 tion naturally arises : What will happen to the maritime 
 industry of England when that country finds it impossible 
 to successfully compete with the United States and other 
 nations in the production of coal? It is a question which 
 answers itself. When that time arrives there will be an 
 
 ♦Taylor, The Coal Supplies of the World, Nineteenth Century, July, 
 1898. 
 
 Bellairs, China Mail, Hongkong, September 18, 1897,
 
 COBDENISM A FAILURE 555 
 
 enormous shrinkage of British tonnage. Nothing is clearer 
 than the fact that the immense production of British coal 
 and its distribution has called into existence a vast fleet 
 of vessels, the necessity for which will disappear when 
 American or other coal supplants the product of Great Brit- 
 ain in the markets to which the latter country is now carry- 
 ing her surplus fuel. 
 
 It must be obvious that when the United States reaches 
 that point in coal production which will make it expedient 
 to ship large quantities to foreigners the shipments will 
 be made in vessels built and owned in this country. What- 
 ever may have once been thought of our supposed inability 
 to construct vessels as cheaply as England, all doubts on 
 that score have now disappeared. The fact that we are 
 shipping steel plates to Glasgow, and the testimony of Yar- 
 row, quoted elsewhere, to the effect that the efficiency of 
 American labor and the use of automatic machinery more 
 than compensates for any advantage which the British ship- 
 builder may appear to have because the wages of his work- 
 ingmen are nominally lower, have completely destroyed the 
 argument in favor of free ships. It is now seen that when 
 the conditions of shipping become so adjusted as to create 
 an enlarged demand for American-built vessels the numer- 
 ous shipyards in this country, with their constantly expand- 
 ing plants and growing efficiency, will be able to supplj 
 tonnage more cheaply than those of any other country. 
 
 The necessity of finding an outlet for the coal which is 
 certain to be produced in excess of the country's needs will 
 bring about the trade adjustment spoken of. When Argen- 
 tina, to illustrate, finds it more profitable to take the bulk of 
 her coal from the United States than from England she 
 will cease to ship her wool to the latter country. It will 
 pay her better to give the American vessels bringing coal 
 return cargoes. The change thus effected will lead to others. 
 The British vessels carrying the 44,000,000 tons of coal 
 exported to foreign countries in 1896 also carried other
 
 556 PROTECTION AND PROGRESS 
 
 merchandise; when the coal shipments diminish or cease 
 it will be impossible to ship miscellaneous goods on the same 
 favorable terms as at present, and as a consequence Great 
 Britain will have to surrender a large part of that round- 
 about trade which has been so profitable to her and so very 
 unprofitable to those nations who, by competition of this 
 kind, have been deprived of the benefits of direct intercourse 
 with other peoples. 
 
 There is one thing which may prove an obstacle to the 
 development of a great ocean carrying trade by a country 
 in which protection has raised the plane of wages. It is 
 referred to by J. Stephen Jeans in his book on the Indus- 
 trial Supremacy of England, a work rarely referred to by 
 the writer or any one else in these days. Mr. Jeans assumed 
 that the infinitely higher range of seamen's wages paid by 
 Americans would be an effectual barrier to successful com- 
 petition with foreigners in the oversea carrying trade, but 
 it is quite possible that fhe same methods adopted to over- 
 come the disparities in wages paid workers in the iron 
 and steel industry of this country may have an equally suc- 
 cessful result when applied to ocean commerce. 
 
 One of the anomalies of the American protective system 
 is its failure to apply to the shipping industry of the United 
 States the policy which has proved so efficacious in building 
 up a great manufacturing industry. The failure is the 
 more striking because all careful observers regard the neu- 
 tralization of the practice of foreign Governments of en- 
 couraging the extension of ocean commerce by means of 
 direct and indirect subsidies as a condition precedent to 
 the creation of a great American ocean carrying business. 
 
 It is possible that this latter assumption may be incor- 
 rect, and that we have in our enormous deposits of coal 
 and iron and our facilities for working them on a greater 
 scale and consequently more cheaply than other people, just 
 such an advantage as that which has given the English 
 supremacy for many years. If Great Britain, by reason of
 
 COBDENISM A FAILURE 557 
 
 these superior advantages, has been able to whiten the seas 
 with her sails and to darken the sky with the smoke from 
 her coal-burning steamers, what may we not expect to do 
 when our growing capital exerts itself to find an outlet for 
 a productivity which must result from the development of 
 our infinitely greater resources ? With iron ores of a higher 
 percentage of purity than those found in any other compet- 
 ing country, taken from deposits of almost inexhaustible 
 extent and extracted at a cost so low as to amaze rivals; 
 with coal supplies so abundant, and the means of getting 
 them to the consumer so well developed that English trade 
 journals admit that "the lowest average of cost of produc- 
 tion in the United Kingdom, that of Durham and Scotland, 
 is more than 30 per cent higher than the average of Penn- 
 sylvania,"* and with rolling mills and other appliances for 
 working up iron and steel on a scale hitherto undreamed of, 
 we may succeed in offsetting the lower wages and the arti- 
 ficial aid rendered by foreigners to transportation lines called 
 into existence to assist in finding markets for the surplus 
 products of manufacture of the countries resorting to this 
 policy. 
 
 But whatever drawbacks may arise from the failure to 
 meet the subvention policy of foreigners, they will not be 
 attributed by reasonable men to the operation of protection, 
 but rather to neglect of its principles. It is possible that 
 the considerations above advanced may have the effect of 
 inducing this country to persevere in the policy of abstaining 
 from direct efforts to promote the American ocean carrying 
 trade, but it will ultimately be recognized as a mistaken one. 
 The facts set forth in the chapters devoted to exhibiting 
 the economic wastefulness of the system of promoting for- 
 eign trade at the expense of the development of the resources 
 of the different countries of the world ought to convince 
 the most obtuse advocate of the theory that the mere ex- 
 
 *Iron and Coal Trades Review, London, April, 1898.
 
 558 PROTECTION AND PROGRESS 
 
 change of articles is of more consequence than then" pro- 
 duction that the best interests of mankind would be sub- 
 served by a rigorous adherence on the part of the United 
 States to the policy of protection in the matter of ocean 
 shipping. If the efforts of such a policy would be a blessing 
 to future generations of Britons by saving them from the 
 consequences which their scientific advisers say will follow 
 the exhaustion of the coal supplies of the United Kingdom, 
 we ought, as a humane people, to interfere in their behalf. 
 We can best do this by preventing the shipment of vast 
 quantities of British coal to foreign countries, and by caus- 
 ing a diminution of the quantity consumed by English 
 steamers, which can be affected by substituting American 
 for British carriers. 
 
 There is no disposition to be facetious in making this 
 suggestion. It is simply thrown out because Sir Robert 
 Giffen and other free traders seem unable to comprehend 
 that by advocating the further extension of British trade 
 they are inducing their countrymen to incur great future 
 inconveniences for a present gain. Their course suggests 
 a paraphrase of the parable of the ten virgins. The day 
 must come when Great Britain will say : "Give us of your 
 coal, for our mines are exhausted," but the competitor may 
 refuse to comply on any other conditions than such as must 
 of necessity bring about the result suggested by Mallock 
 when he declared that if England could not maintain her 
 population of 40,000,000 she would have to deport the sur- 
 plus and get along with 12,000,000. 
 
 These reflections are, of course, incompatible with the 
 ideas advanced by Giffen, but that they are far more reason- 
 able and more accurately foreshadow the trend of future 
 events than his remarks, in which he claimed that Cobden- 
 ism had triumphed and that the future would witness a 
 general acceptance of the doctrine of the Manchester school, 
 many of his countrymen orally or by action do not hesitate 
 to admit. That they will all be forced one day to recognize
 
 COBDENISM A FAILURE 559 
 
 the indestructible truth that there can be no true gain to 
 mankind through waste is inevitable, and no more convinc- 
 ing object lessen illustrating this observation will ever be 
 furnished than the marvelous development of the resources 
 of the United States under the protective system, an effort 
 to describe which will be made in the next and concluding 
 chapter.
 
 CHAPTER XXII. 
 
 TRIUMPH OF PROTECTION. 
 
 THE REMARKABLE INDUSTRIAL RESULTS ACHIEVED BY PRO- 
 TECTIVE COUNTRIES. 
 
 Accumulations of the British likely to prove detrimental to the work- 
 ingman — Facility with which the British have raised up rivals 
 for themselves by investing abroad — The process of cheapening 
 liable to prove of greater benefit to the rivals of Great Britain 
 than to Englishmen — Change in the character of American ex- 
 ports — The United States as a competitor in the British home 
 market — The effects of a protective tariff on consumption — 
 Enormous increase of the use of iron in the United States — In- 
 creased production of manufactured articles since 1840 in protec- 
 tive countries — The addition to the American volume of pro- 
 duction between i860 and 1894 five times as much as that of Great 
 Britain during the same years — The creation of great manufac- 
 turing plants results in enormously stimulatnig consumption — 
 The internal trade of the United States compared with the ex- 
 ternal trades of the world — The wholesome effects of self-de- 
 pendence — Present condition of Great Britain — Uninterrupted 
 supplies of raw materials a condition of national existence — 
 Practical invulnerability of a protectionist country with well 
 developed resources — The development of manufacturing did 
 not impede but promoted the expansion of American agricul- 
 ture — A comparison of the growth of wealth in the United 
 States and in Great Britain — The people of the United States 
 possess one-fourth of all the wealth of the world — Effects of 
 protection on the future of Russia — The true purpose of pro- 
 tectionists — Protection is the economic policy that must endure 
 because it is an eliminator of waste. 
 
 No more fitting method of concluding- a work which has 
 been largely devoted to the exposure of the fallacies of 
 the Manchester school could be adopted than to show, chiefly 
 
 560
 
 TRIUMPH OF PROTECTION 561 
 
 by means of British evidence, that in spite of the vaunted 
 advantages of free trade and the assumed disadvantages of 
 protection the countries which have adopted the latter eco- 
 nomic poHcy have made greater material advances than 
 England, the solitary exemplar, on a scale worthy of compar- 
 ison, of the doctrine that the exchange of things produced 
 is of more consequence than the production of things ex- 
 changed. 
 
 In the preceding chapter testimony was presented show- 
 ing that there is a growing opinion in England that it will 
 be impossible for that country to maintain a population 
 as large as that now inhabiting the British Isles when their 
 coal measures, which have heretofore been the great source 
 of prosperity, are exhausted, or reduced to such a condition 
 that it will be unprofitable to work them in competition 
 with those of other countries whose deposits of fuel have 
 thus far remained practically untouched. While the con- 
 tingency referred to and its consequences are foreseen and 
 commented upon by Englishmen who are not blinded to 
 facts by an ism, few or none of them, so far as we have 
 observed, have been impressed by the possibility that the 
 phenomenal prosperity of the United Kingdom, which en- 
 abled her citizens to accumulate great capitals while other 
 peoples were laboriously building up competing manufac- 
 turing industries, will immensely accelerate the industrial 
 decadence of Great Britain. 
 
 In another connection testimony was introduced which 
 exhibited the fact that much of this accumulation has been 
 employed to assist in the development of the resources of 
 other and competing countries, and that the earnings of 
 the capital thus invested are often paid in the produce of 
 the country where the investment is made, which produce 
 is shipped to the United Kingdom there to be consumed by 
 British workingmen and the non-producing classes. While 
 the conditions were such as to make it more profitable to 
 import raw materials and food staples of a kind designed 
 
 36
 
 562 PROTECTION AND PROGRESS 
 
 for the consumption of the working classes, this process 
 necessarily redounded to the advantage of British industry. 
 But when the imports into Great Britain ceased to be mostly 
 of that character, and instead of raw materials finished 
 products manufactured in other countries began to be im- 
 ported in larger and larger quantities, the British working- 
 man suffered. 
 
 In the chapter in which the decadent industries of Great 
 Britain were discussed it was shown that the annual im- 
 portations of manufactured goods, which for a long time 
 have exceeded a hundred millions sterling annually, was 
 responsible for the shutting down of many English factories, 
 and that the outlook for additional closures was such as to 
 cause many competent critics to regard the situation as 
 threatening. This tendency to supplant imports of raw 
 materials and staple food stuffs with finished articles of 
 all kinds and food luxuries for the tables of the well-to-do 
 must rapidly increase in the future. 
 
 It may seem to Englishmen that the opening of a fresh 
 continent to trade and the exploitation of the Orientals will 
 arrest the tendency, but a little reflection will convince any 
 thoughtful person that whatever advantages might have ac- 
 crued from these new or increasing fields of trade are more 
 than offset by the enormous increase of manufacturing 
 productivity in other and competing countries. An impar- 
 tial consideration of all the existing circumstances, not omit- 
 ting those deemed to be encouraging, leads irresistibly to the 
 conclusion that the future will witness in England a con- 
 tinuous enlargement of the demands of the well-to-do Brit- 
 ish consumer for foreign goods which will involve a disre- 
 gard of the needs of the toiling producer. This process 
 will continue until the accumulations of a period of pros- 
 perity have been dissipated, and then the United Kingdom 
 will share the fate of other world empires the controllers 
 of whose destinies were unable to overcome the tendency 
 of their dependent subjects to emancipate themselves from a
 
 TRIUMPH OF PROTECTION 563 
 
 state of commercial or political bondage. In short, when 
 Great Britain ceases to be commercially supreme she will 
 be unable to hold her possessions. 
 
 In these concluding paragraphs the attentive reader will 
 more than once be reminded by the significant facts and 
 figures which will be produced that Great Britain has been 
 impelled by the force of economic circumstances to pursue 
 a course that suggests an indiscretion analogous to that of 
 a country supplying with arms of precision the people of a 
 state she purposes to make war upon. Comparisons of this 
 kind, we know, are distasteful to free traders, who seek in 
 defiance of the teachings of history and existing circum- 
 stances to maintain that commerce implies peace and good 
 will, but their objections will not detract from the truthful- 
 ness of the assertion that the freedom with which the British 
 have loaned their capital to foreigners for the purpose of 
 promoting rival industries is certain to prove as destructive 
 to British commercial supremacy as the act of the Spanish 
 conquistadores might have proved to their rule in Mexico 
 and Peru had they supplied the natives of those countries 
 with firearms and taught them their use. 
 
 The impulse to employ capital is irresistible, and as 
 profitable results may follow its employment by a rival 
 who borrows it as when it is used by its possessor. The 
 English have invaded this country with their accumulations 
 and have thereby been largely instrumental in promoting 
 the development of its resources. They have assisted in 
 making waste places fertile, and we have repaid them by 
 making agriculture an unprofitable pursuit in England. It 
 is true that the flood of cheap products with which we have 
 deluged Great Britain has given the workingman cheap 
 bread and cheap meat, but it has also intensified the severity 
 of the struggle which has for a long period marked the get- 
 ting of food and raiment by the English masses by releasing 
 from the soil a large contingent of toilers who have pressed 
 into the towns as their only refuge from starvation. The
 
 564 PROTECTION AND PROGRESS 
 
 English have also assisted us to create our great manufac- 
 turing plants, and now we are about to pay the interest on 
 the capital loaned to us, and after awhile the principal, not 
 with raw materials and food products, but with manufac- 
 tures of iron and steel, with textile fabrics and with finished 
 articles of all kinds. 
 
 We shall do this because in the near future we shall be 
 better able to spare finished products of manufacture than 
 our raw materials, which we will find it more profitable to 
 work up than to ship, or our food stuffs, which we will need 
 to feed our constantly increasing army of workingmen. 
 In the development of the cheap loaf theory the Cobdenite 
 lost sight of the fact that in the last analysis bread must be 
 cheaper near the wheat field than it can possibly be in a 
 country that derives its supplies from fields three thousand 
 or more miles distant from the consumer. So intent were 
 the followers of the Manchester school upon promoting 
 cheapness that they ignored the possibility of the condition 
 inuring more to the benefit of the foreigner than to English- 
 men. That this was not the object of the Cobdenites we 
 may be assured, for after all that is said and written on the 
 subject we are forced to believe that the true aim — and nat- 
 ural enough it was that it should have been so — of intelligent 
 British free traders was to promote the interests of the 
 United Kingdom. Britons were to be the chief beneficiaries 
 of the policy ; others would share in the benefits, they said, 
 and many of them no doubt believed this, but outsiders, 
 in most English minds, were merely to be hangers-on to the 
 fringe of British prosperity. 
 
 The failure of the rest of the world to accept a secondary 
 role has destroyed all the calculations of the Cobdenites. 
 The tenacious adherence of Americans to the idea that it is 
 the part of wisdom to develop all the resources of their 
 country, by calling into existence a vast manufacturing 
 industry, has raised up an enormous and constantly increas- 
 ing mass of consumers, who are rapidly reaching a stage
 
 TRIUMPH OF PROTECTION 565 
 
 when they will outbid foreigners and make it impossible 
 for the latter to buy the products of American soil. This 
 is merely another way of stating the economic probability 
 that in the near future the American consumption of raw 
 and food products of the United States will be abreast of 
 production. The prediction has been frequently made re- 
 cently that in a very few years the population of the United 
 States would be sufficiently great to absorb the wheat crop 
 of the country, and it deserves respectful attention, because 
 it is based on careful calculations which take into consid- 
 eration all the possibilities of increased tillage and improved 
 methods of culture.* 
 
 When the time arrives to which Davis and others who 
 have studied this phase of economics look forward, the em- 
 barrassments under which Great Britain labors as a manu- 
 facturing country will be increased to such an extent that 
 competition and the preservation of the British home trade 
 will be entirely out of the question. It will then be more 
 profitable for the British owners of capital to receive what 
 is due them from Americans in the form of manufactured 
 goods rather than rude products, because it will no longer be 
 possible for England to manufacture in competition with 
 the country which has raw materials and food supplies at 
 its doors. Then the cheaper loaf and the cheaper raw ma- 
 terials of the United States will play their part in giving 
 to this country commercial precedence over England. 
 
 That the conditions which will bring about this change 
 have been operating for some time will be inferred from 
 facts which have been adduced elsewhere, but as yet a mere 
 beginning has been effected. Up to this time the United 
 States has been able to produce immense quantities of food 
 stuffs which hdr people have been unable to consume, and 
 
 ♦Davis, New York Sun, May 6, 1894; same author, Forum, Octo- 
 ber, 1897; also address of Professor "Crookes, opening of the British 
 Association; Warren in Westminster, January, 1899, article, '"The 
 United States Export Trade."
 
 566 PROTECTION AND PROGRESS 
 
 her manufacturing requirements have made no serious 
 draft upon the domestically produced raw material of the 
 most widely used textile of modern times. But, as is now 
 clearly seen, there will be a rapid change in the near future 
 which will result in the absorption of our food supplied by 
 domestic consumers, and our raw cotton will be worked up 
 in American factories. Concurrently with the development 
 of the latter industry we may reasonably expect to witness 
 the expansion of the manufacture of what may be termed 
 fine machinery and tools and instruments of precision, which 
 has already gained considerable importance, as the tables 
 of American exports show. 
 
 In 1897 there were shipped to foreign countries type- 
 writing machines to the value of $1,902,153; bicycles, 
 $6,846,529; sewing machines, $3,136,364, and scientific and 
 electrical instruments to the amount of $2,770,803.* When 
 these figures are supplemented with the statement that nearly 
 one-thiird of the $14,655,849 which the above items aggre- 
 gate was shipped to Great Britain the significance of the 
 trend will be apprehended. 
 
 That this is not a temporary manifestation of energy 
 on the part of Americans which British manufacturers may 
 hope to see abated, or the outlet foir it diverted in some 
 other direction, is recognized by competent English trade 
 critics, who frankly admit the difficulties which confront their 
 countrymen and no longer attempt to delude themselves 
 with the worn-out Cobdenite sophistry that protectionist 
 countries must find it impossible to compete with a free 
 trade nation like England because of the assumed dear con- 
 dition which the protection policy is supposed to bring about. 
 The true situation is now perceived and leading journals 
 devoted to special and general trade interests in England 
 openly admit that the competition of protective America is 
 to be dreaded.* The Hardware Record (London) said 
 
 ♦Report of Bureau of Statistics, Treasury Department, 1898.
 
 TRIUMPH OF PROTECTION 
 
 567 
 
 in 1898: "Great Britain will have to make up its mind to 
 see a good deal more of the American in our markets than 
 has been the case hitherto. Trade is so good in the States 
 at present that all the available productive power is required 
 for home demands, but several manufacturer friends who 
 have just returned from the States, where they have been on 
 business tell our Sheffield correspondent that manufacturers 
 there are so largely increasing their output that they will 
 promptly overtake home requirements and enter vigorously 
 upon European markets. 'You will soon have us over 
 amongst you,' said one large producer to a Sheffield manu- 
 facturer, 'and I will show you several of the lines in which 
 we intend to do business.' These lines included bright 
 drawn steel and all the cheaper grades of steel, brass rods, 
 files, small malleable iron castings, automatic machinery for 
 all purposes, steam (India rubber) hose piping and other 
 goods. These were invariably from 25 to 50 per cent cheaper 
 than the prices quoted in this country. It will not do to 
 say that the quality is inferior, for at two establishments 
 in Sheffield where American articles are being used in in- 
 creasingly large quantities the workmen prefer both the 
 raw steel and brass suitable for working automatic ma- 
 chines, and also the files and the malleable iron castings. It 
 is quite clear that American competition is going to be far 
 more severe than it is at present."' 
 
 ♦united states imports and exports of manufactured 
 
 ARTICLES. 
 
 Year. Imports. 
 
 Exports. 1 1 
 
 Year. Imports. 
 
 Exports. 
 
 1880 
 
 • • .$268,333,432 
 
 $102,856,015 II 
 
 1890. 
 
 . .$346,638,654 
 
 $151,102,376 
 
 1881 
 
 . . . 284,763,615 
 
 114,233,219 II 
 
 1891. 
 
 . . 368,225,181 
 
 168,927,315 
 
 1882 
 
 . . . 322,036,663 
 
 134,794.346 II 
 
 1892. 
 
 . . 316,092,469 
 
 158.510,937 
 
 1883 
 
 ... 337,264.528 
 
 134,228,083 II 
 
 1893. 
 
 . . 356,866,396 
 
 158,023,118 
 
 1884 
 
 • • • 304.352,393 
 
 136,372,887 II 
 
 1894. 
 
 • • 234,139,173 
 
 183,728,808 
 
 1885 
 
 • • • 265,704.352 
 
 147,187,527 II 
 
 1895- 
 
 • • 317,257,176 
 
 183,595,748 
 
 1886 
 
 . . . 285,050,564 
 
 136,541.978 II 
 
 1896. 
 
 • • 328,937,528 
 
 288,571,178 
 
 1887 
 
 . . . 306,030,440 
 
 136,735,105 il 
 
 1897. 
 
 . . 327,324,920 
 
 277.285,391 
 
 1888 
 
 . . . 324,823,601 
 
 130.300,087 II 
 
 1898. 
 
 . . 226,212,635 
 
 291,208,358 
 
 1889 
 
 . . . 328,629,989 
 
 138,675,507 11 
 
 

 
 568 PROTECTION AND PROGRESS 
 
 The testimony of this journal respecting the esteem in 
 which American manufactured articles is held by British 
 workingmen may be supplemented from a hundred other 
 sources and is abundantly corroborated by the statistics of 
 exports of American edged and other tools to England, 
 where they are rapidly superseding the more cumbrous 
 articles produced in British factories, their handiness and 
 cheapness causing the demand for them to continually in- 
 crease. The growing export trade in such intricate ma- 
 chines as locomotives is strong testimony to our ability to 
 manufacture and sell more cheaply than any of our compet- 
 itors. A writer who recently discussed the favor accorded 
 American machinery by foreigners says "the principal de- 
 mand for American locomotives for export lies in the rela- 
 tive cheapness of our engines and their adaptation to the 
 conditions of the roads on which they are to be used. An 
 American firm not long ago," he adds, "submitted figures 
 on a locomotive the specifications for which were prepared 
 in England, and it was found that they could turn out for 
 $10,000 work which in England would cost $14,000. This 
 improvement is brought about partly by improvements in 
 factory methods and partly by degrees of finish. * * * 
 As against nine or twelve months required by English oir 
 German shops to turn out a finished engine, American works 
 rarely require more than two months, and large engines 
 complete in every detail have been turned out in four weeks 
 on rush orders."* 
 
 Details such as these might be multiplied indefinitely, 
 but enough have been supplied to clearly establish the fact 
 that the invasion of foreign countries, and particularly of 
 Great Britain, by our manufacturers is proceeding rapidly, 
 and that the process is likely to be accelerated rather than 
 retarded in the future. Not only has the unprotected Brit- 
 ish toiler to dread the competition from this side of the 
 
 ♦Commercial Advertiser, New York, January, 1898.
 
 TRIUMPH OF PROTECTION 569 
 
 water — the effectiveness of which, for the present at least, 
 depends almost wholly upon accessibility to cheap and abun- 
 dant supplies of raw materials, the control of an enormous 
 home market, and a remarkable adaptability on the part of 
 American workingmen which make the use of automatic and 
 other labor-saving devices come easy — he has also to reckon 
 with the near-at-hand continental populations and their 
 lower wages based on a lower standard of living, which will 
 probably not be materially raised without correspondingly 
 lowering that of the English workingmen. 
 
 What the result will be when the English workingman 
 (realizes the cause of the pinch to which he is subjected will 
 soon be disclosed. Mr. Mallock, by indirection at least, 
 assumes that the solution of the difficulty will be a volun- 
 tary emigration or enforced deportation of the surplus 
 population, the- implication being that the free emigrants 
 would be people who found themselves unable to earn a 
 living on British soil, but who still possessed enough means 
 to remove themselves to another and less congested country. 
 But there is a contingency which Mallock and others who 
 have studied the subject from the free trade point of view 
 have overlooked, but which does not seem improbable when 
 all the circumstances are taken into consideration. It is not 
 unreasonable to suppose that the sentiment which finds ex- 
 pression in such a book as "Made in Germany" may grow to 
 such an extent that the English masses may insist upon the 
 imposition of a protective tariff which will have the effect 
 of restraining the large and growing imports of manufac- 
 tured goods into Great Britain. 
 
 Such a demand, if once urged in earnest by English 
 workingmen, cannot well be met by stale arguments in favor 
 of the cheap loaf. Such appeals may be replied to by a 
 demand for the retention of the free loaf, accompanied by 
 insistance upon the necessity of highly taxing those things 
 which are more largely consumed by the well-to-do classes.
 
 570 PROTECTION AND PROGRESS 
 
 If their manufacture is to be continued in England this 
 course must be pursued. 
 
 There will be no lack of evidence to prove the imminence 
 and the extent of the danger, but it will be difficult to adjust 
 so delicate a matter as that involved in deciding the ques- 
 tion whether the manufacturing industries of Great Britain 
 shall be allowed to perish or whether it will be advisable 
 to place a prohibitory tax on the returns from investments 
 made by Englishmen in foreign lands. 
 
 This is the problem which will confront Great Britain, 
 and it has some features that make it seem unique, although 
 there are facts related by classical writers suggesting that 
 Ancient Rome suffered a similar experience. But whether 
 it is an entirely novel situation or not, it must be evident 
 to any one who will give the subject the attention it deserves 
 that in the near future this and some other countries will 
 find it more profitable to pay their obligations to English- 
 men in finished manufactured products than with raw ma- 
 terials or supplies of food. 
 
 This proposition seems an elementary one when the 
 data showing the enormous development of manufacturing 
 countries which may be counted as rivals of Great Britain 
 are considered. They exhibit a progress so much beyond 
 that made by the United Kingdom in recent years that it 
 is impossible to escape the conclusion that the future will 
 show a still greater development, which, combined with the 
 causes that must compel retrogression in England, will 
 make that country take a position commensurate with her 
 area and present resources. These data will also show what 
 we have sought to make clear in these pages — that the ex- 
 traordinary efiforts resorted to by protective nations to share 
 the prosperity enjoyed by Great Britain, which resulted from 
 the advanced condition of her manufacturing industry at a 
 time when the world felt the reviving influence of the 
 gold discoveries in California and Australia, have ma- 
 terially benefited mankind by widely diffusing the advan-
 
 TRIUMPH OF PROTECTION 571 
 
 tages of accessibility to the workshop, thus stimulating the 
 consumption of articles the use of which would have been 
 greatly restricted had the people of the world remained 
 dependent upon the British for their supplies of manufac- 
 tured goods. 
 
 The student of economics, keeping in mind the axiomatic 
 statement of Smith that a great quantity of rude products 
 is always exchanged for a very small quantity of manu- 
 factured articles, will without difficulty apprehend the force 
 of the figures which show that in 1840 the ^otal value of 
 minerals mined throughout the world was £31,500,000, and 
 that in 1894 it had increased to £302,000,000, while the 
 number of tons of minerals raised had increased during the 
 period from 56,200,000 in the first named to 746,000,000 
 in the last named year. It would be superfluous to enter 
 into elaborate calculations to determine the increase in per 
 capita consumption during this interval, because the average 
 would not truly represent the changed conditions, as so many 
 nations have utterly neglected the development of their 
 resources. But it is necessary, in order to correctly convey 
 what this tremendous increase signifies to the people who 
 assisted in promoting it, to show that since 1840 nations 
 whose people were insignificant consumers of iron in that 
 year have brought their consumption abreast of that of 
 Great Britain. The United States is perhaps the most 
 conspicuous example of this remarkable change. In 1830, 
 according to the best available statistics, the consumption 
 of iron in this country was 35 pounds ; in 1850 it was 56 
 pounds ; in 1870 it had increased to 100 pounds ; in 1898 it 
 will nearly reach 350 pounds. 
 
 The statistician Michael Mulhall, upon whom we chiefly 
 depend in this resume because he will not be suspected of 
 protectionist bias, his work being authoritative in free trade 
 England, tells us that: "The production of iron in the 
 United States multiplied exactly fiftyfold between 1830 
 and 1890, amounting in the latter year to 9,200,000 tons,
 
 572 PROTECTION AND PROGRESS 
 
 a quantity far in excess of the production of any other 
 country."* But this does not bring into reHef the fact we 
 wish to emphasize half so strongly as his additional state- 
 ment that the production of iron ore, which amounted to only 
 6,400,000 tons in 1840, in 1894 had reached 53,000,000 
 tons, the gains of the different nations being as follows : 
 
 Tons, 1840. Tons, 1894. 
 
 Great Britain 3,500,000 12,400,000 
 
 United States 500,000 17,000,000 
 
 Germany 400,000 12,400,000 
 
 Other states 2,000,000 1 1,200,000 
 
 Total 6,400,000 53,000,000 
 
 The reader who will recall the circumstances related 
 in another chapter, that whenever an extraordinary demand 
 for iron asserted itself during the period when the United 
 States and other countries were wholly dependent upon 
 England for their supplies of that metal the manufacturers 
 of the latter country immediately advanced prices to an 
 almost prohibitory point, will at once perceive that the 
 enormous consumption now noted is chiefly due to the 
 growth of the iron industry in countries that resorted to 
 protection. It is possible that England, in the event of the 
 failure of these new rivals to develop a home manufacture, 
 might have increased her output of iron to a greater extent 
 than she has since being subjected to the rivalry spoken of, 
 but it is apparent that the increase of the world's product 
 would have been comparatively slow without the assistance 
 of the United States and Germany. 
 
 As has been shown elsewhere, even at her present rate 
 of pigiron production England is compelled to depend largely 
 upon Spain and Sweden for ores, a necessity which would 
 have hampered the extension of the industry, not to speak 
 of the waste that would have been incurred in hauling the 
 raw material to points where the natural facilities are not 
 
 ♦Mulhall, Industries and Wealth of Nations, 1896.
 
 TRIUMPH OF PROTECTION 573 
 
 much better for the manufacture of iron than in the countries 
 from which the ores are obtained.* 
 
 While the progress of the rivals of Great Britain has 
 not been uniform in all branches of manufacturing industry, 
 it has been sufficiently pronounced in every field to demon- 
 strate beyond the possibility of doubt that it will be impossi- 
 ble for the British under any circumstances to retain a 
 monopoly in any line. In 1840, according to Mulhall, the 
 value of the world's output of manufactures was ii,8io,- 
 000,000; in 1894 this value was increased to £5,518,000,000. 
 These totals are not nearly so striking, however, as the 
 details, which show that while the United Kingdom increased 
 her output in the latter over the former year by £489,000,000, 
 her rivals advanced from a production of £1,432,000,000 
 in 1849 to £4,642,000,000 in 1894, an increase of £3,219,- 
 000,000, or nearly sevenfold as much as the British increase 
 of output during the same period. In 1840 the manufactured 
 products of the United States were only valued at £96,000,- 
 000; in 1894 they reached the astonishing value of £1,952,- 
 000,000, an output twice as great as that of the United 
 Kingdom. 
 
 A specially significant feature of these changes is the 
 fact that Great Britain showed an expansion of output 
 t)etween 1840 and i860 amounting to £190,000,000, against 
 an increase of only £105,000,000 in Germany during the 
 same period. Between i860 and 1894, however, while the 
 British increase was £299,000,000, that of Germany was 
 nearly as great, the addition of output for the latter being 
 £280,000,000. In the first period Great Britain gained 
 £85,000,000 more than Germany; in the second period her 
 gain exceeded that of Germany only £19,000,000. The gain 
 of the United States between 1840 and i860 was £296,000,- 
 000 — less than double the British gain; but in 1894 the 
 
 *J. Stephen Jeans has recently stated that the severe competition 
 in the iron trade may induce capital to consider the propriety of estab- 
 lishing rolling mills, etc., in the vicinity of the Spanish deposits of ores.
 
 574 PROTECTION AND PROGRESS 
 
 United States exhibited an increase over i860 of £1,562,000,- 
 000, or five times as large an addition to her production 
 as England had made during the same twenty-four years. 
 
 It seems a work of supererogation to point out that this 
 phenomenal diffusion of industries between the years 1840 
 and 1894 must have effected a great change in the habits 
 of life of the people most directly affected by it. The 
 curious inquirer, if he examines into the matter, will find 
 during the earlier years of the fifty-four under review that 
 the consumption of manufactured articles in Great Britain 
 was enormously in excess of that of any other country. 
 Observers of the fact have explained it by assuming that 
 the greater wealth of the English enabled them to consume 
 more abundantly than others, but they have avoided dwell- 
 ing on the causes which promoted accumulation and per- 
 mitted a concurrent high expenditure. These causes have 
 been explained at length elsewhere; therefore it is only 
 necessary to make passing allusion to them here and to 
 state that when Americans were unprovided with an iron and 
 steel industry commensurate with their needs their consump- 
 tion of those metals was insignificant by comparison with 
 the quantity consumed in Great Britain. As late as 1870 
 the average per capita consumption of iron in the United 
 States was 100 pounds ; in the same year it was estimated to 
 be 300 in Great Britain. Since that date the per capita 
 consumption of metallic products in the United States has 
 been increased to a figure higher than that of the United 
 Kingdom. That result was accomplished by stimulating the 
 development of our resources and by creating manufactur- 
 ing plants surpassing in magnitude and in productive 
 effectiveness those of Great Britain. 
 
 It would be a grave omission to fail to dwell on the 
 significant circumstance that when the American consump- 
 tion of manufactured articles was lightest we were pursuing 
 the course which all free traders united in assuring us 
 would be conducive to our greatest prosperity. In 1850,
 
 TRIUMPH OF PROTECTION 575 
 
 when our consumption of pigiron was only 56 pounds per 
 capita per annum, against a nearly fivefold greater con- 
 sumption in England, the United States was famous 
 throughout the world for its marvelous agricultural progress. 
 Although the accomplishments of the years preceding 1850 
 have since been greatly surpassed, there was no question 
 raised during the earlier period which suggested that Amer- 
 icans were not making the best possible use of their soil. 
 They were bringing it under cultivation with such rapidity 
 that tributes to the energv^ of the American farmer were 
 common in the old world. 
 
 If any particular period of our agricultural history was 
 to be designated by the economist as the golden one he 
 would probably single out that embraced in the years between 
 1848 and 1857. But there are facts which make against 
 the accuracy of such an assumption. Among them are those 
 which show that while Americans during the years named 
 enjoyed a rude plenty — an enjoyment which was frequently 
 interrupted, as we have pointed out in other parts of this 
 work — they lacked many of the comforts which had become 
 so common in England, which country was at that time 
 the highest type of an advanced manufacturing community. 
 
 The slow progress in the rate of general consumption 
 during these so-called years of agricultural prosperity forci- 
 bly illustrates the effects of the law emphasized by Smith 
 that a great quantity of the rude products of the soil or 
 the mines must be exchanged for a very small quantity 
 of manufactured articles. It also warrants the conclusion 
 that an adherence to the policy recommended to us by the 
 Manchester school would have resulted in a permanently low 
 rate of manufactured articles in the United States. Any 
 advantage that might have resulted from the exclusive 
 devotion of Americans to agriculture must have been reaped 
 by the manufacturing countries of the old world. 
 
 No careful student, in the face of the figures of the 
 world's progress in manufacturing since i860, and espe-
 
 576 PROTECTION AND PROGRESS 
 
 cially those illustrating the advance of the United States, 
 will venture to assert that the condition which Mulhall 
 says existed in 1888, when the value of textile fabrics con- 
 sumed in Europe was $5.95 per capita per annum, as against 
 $11.40 per capita per annum in the United States, could have 
 been brought about had this country restricted its energies 
 to the development of agriculture. Nor would he care to 
 express the belief that if Great Britain had retained her 
 overwhelming preponderance in the cotton manufacturing 
 industry the 60,000,000 people living in the United States 
 in the year mentioned would have been able to consume more 
 cotton fabrics than the 120,000,000 inhabitants of the United 
 Kingdom, France and Germany.* 
 
 In whatever aspect we view the enormous changes in 
 rates of consumption we are compelled to recognize that 
 they are chiefly due to the artificial stimulus given to pro- 
 duction by nations which, according to the theories of the 
 Cobdenites, would have been more profitably employed in 
 promoting the development of their agricultural resources. 
 Doubtless there have been inventions which have contributed 
 to the result, but the fact must not be lost sight of that 
 the most far reaching of all the devices tending to increase 
 the ability of man to produce antedate the abrogation of the 
 corn laws, and that a great number of the most valuable 
 labor-saving contrivances owe their existence wholly to the 
 high rate of compensation demanded by workingmen in 
 protective countries, which has compelled employers to avail 
 themselves of every possible opportunity to substitute auto- 
 matic machinery in the place of human energy. If we 
 compare the progress made in manufacturing during the 
 seventy-five years preceding the repeal of the corn laws 
 with that made since 1846 we will discover that although 
 some of the most revolutionary inventions fall within the 
 first period the advances made were feeble compared with 
 
 *Mulhall, Dictionary of Statistics.
 
 TRIUMPH OF PROTECTION 577 
 
 the vigorous forward strides of the last quarter of a century 
 during which protection has had its greatest development. 
 
 It is sometimes contended by the free trader that the 
 extraordinary increase of consumption which has been so 
 marked a feature of recent years is more particularly due to 
 the extension of external transportation facilities than to 
 any other cause. That the result we are discussing was 
 contributed to by enlarging the opportunities of intercourse 
 between nations no one will deny, but that it played as 
 prominent a part as those claim who assume that the only 
 valuable trade is that which is purely external in character 
 is a fallacy. This will be recognized by anyone who will 
 note that in the year 1894, when Mulhall credits the United 
 States with a domestic production of manufactures valued 
 at £1,952,000,000, the whole of the vast output was practi- 
 cally consumed within the borders of this country, our 
 exports of wholly manufactured articles in the year named 
 being valued at less than £40,000,000. Our imports of 
 manufactured products in 1894 exceeded the volume of 
 exports of manufactures, but during the year 1898 American 
 exports of manufactured articles exceeded its imports of 
 manufactured articles. 
 
 The reasonable inference from this showing is that the 
 great increase of consumption of manufactured articles 
 which this country has witnessed during recent years is 
 due to the bringing together of workshop and farm. The 
 proximity of the two proved conducive to the expansion of 
 demand. The facilities for purchasing, so greatly multiplied 
 in the cities, induce people to buy who would not do so if 
 the wares were not easily obtainable. In the same way the 
 presence in a country of iron and steel works or of textile 
 factories promotes the consumption of their products. 
 
 The influence of the factor of proximity can hardly be 
 
 overestimated. In an interesting discussion of the causes 
 
 which conspired for a long time to keep the American 
 
 consumption of sugar at a very low per capita average, the 
 37
 
 578 PROTECTION AND PROGRESS 
 
 writer for an English trade circular pointed out that it was 
 chiefly due to the inaccessibility, of supplies. He was led 
 to this conclusion by the observation of the fact that in 
 recent years, since the more complete penetration of all parts 
 of the country by transportation lines, the consumption 
 had increased with great rapidity.* The force of his argu- 
 ments cannot be minimized by reference to the recent great 
 cheapening in the price of the commodity mentioned, for 
 he produces abundant evidence to show that the movement 
 in the direction of increased per capita consumption was 
 more marked before the removal of the American duty on 
 sugar than afterward. And his observation is corroborated 
 by the fact, which he noted later, that the consumption of 
 sugar in the United States fell from 2,012,729 tons in 1894 
 to 1,945,406 tons in 1895, although the latter year showed a 
 lower range of price than the former.+ 
 
 That the cheapness of a commodity affects its consump- 
 tion no one will deny, but that there are other factors which 
 operate powerfully must also be admitted. We have the 
 authority of an American free trade paper of great promi- 
 nence for the statement that the American people do not 
 object to high prices when industry is flourishing. The 
 writer said : "The records of the rise in wheat make pleasant 
 reading. High wheat makes high flour, and that makes 
 dear bread, but none seems to be thinking of that. The 
 all but universal sentiment is satisfaction in any legitimate 
 condition of the markets that will help the farmers."! There 
 is no necessity for inquiring into what prompted this ad- 
 mission. That it expressed the sentiment of the American 
 people at the time the paragraph was written is indisputable. 
 It reflects the feeling entertained at all times in this country 
 that nominal prices cut no figure in the determination of 
 the standard of living of the working classes. Americans 
 
 ♦Willett's and Gray's Statistical Review, London, 1894. 
 
 flbid, 1896. 
 
 t Harper's Weekly, December 11, 1896.
 
 TRIUMPH OF PROTECTION 579 
 
 are agreed that things are only cheap when the toiler can 
 obtain them and that they are dear when they are out of 
 his reach, no matter how apparently abundant they may be 
 or how low the price mark oil them is. 
 
 That the condition of accessibility has been produced 
 by the protective policy in this country and that the system 
 has operated to bring about a similar result in Germany, 
 on a less pronounced scale perhaps, has been amply demon- 
 strated in these pages. That it will be more largely devel- 
 oped as the wasteful tendencies of external trade are 
 diminished by the force of circumstances there is every 
 reason to believe. If the rate of progress toward self 
 dependence which the past quarter of a century has witnessed 
 is maintained, it is obvious that in the near future there 
 will be a material abridgment of the unnecessary hauling 
 to and fro which has heretofore characterized what is known 
 as foreign trade, and a consequent saving of human energy 
 and of the energy-producing fuels. That mankind will be 
 a gainer from such a change our own ample experience 
 abundantly illustrates. 
 
 That in the readjustment of relations, or of commercial 
 relativity, peoples that have prospered under the wasteful 
 system heretofore in vogue will suffer there is no doubt. 
 But the history of the world teems with stories of the ups 
 and downs of nations, the most of them traceable to commer- 
 cial vicissitudes. No one will, however, assume on that 
 account that the changes were not for the best. Looking 
 down the vista of the past we note the rise and decay of the 
 Phoenician cities ; then the disappearance of the mighty 
 empire of Rome, whose downfall was as much due to com- 
 mercial rivalry as to any other cause, attracts our attention ; 
 still later we see the Italian commercial cities flourish and go 
 to seed, while the seat of exchange is transferred from 
 the East to the West. The whole panorama suggests the 
 blossoming burgeoning, fruition and decay of nations. 
 
 The marvelous results that followed upon the finding
 
 58o PROTECTION AND PROGRESS 
 
 of a new route to the Orient and the discovery of America 
 have been so well described by other authors it would be 
 superfluous to recapitulate them here. But astounding as 
 they are when viewed from the standpoint of the economist, 
 who attributes them almost wholly to the interchange of 
 commodities between nations, the achievements of the past 
 may easily be dwarfed into insignificance if the awakening, 
 so confidently predicted by many observers, takes place in 
 the far East and the disposition so pronounced in recent 
 years of nations aiming at self dependence is accelerated. 
 
 That there will be no abatement of this latter predilec- 
 tion we may rest assured. As people grow in intelligence 
 their fear of phrases is lessened. There was a time when 
 the Cobdenite could divert sensible men from the practical 
 purpose of developing the resources of this and other coun- 
 tries by talking about ''Chinese walls," but now the fact 
 is recognized clearly that the interposition of a tariff barrier 
 has not the effect described, but, on the contrary, has a 
 tendency to promote a really profitable external intercourse 
 — that which results from the exchange of articles of a non- 
 competing character. But, more important than all, pro- 
 tection develops the faculty which is the greatest factor 
 in human progress — self help. A protective policy, by arbi- 
 trarily depriving the people of a country of the privilege of 
 depending on the people of another country for those things 
 which may as well be produced at home, performs a function 
 analogous to that of the careful parent who inoculates 
 habits of self reliance in his children and who teaches them 
 to avoid eflfeminacy by compelling them to acquire the ability 
 to do for themselves. A nation with undeveloped industries 
 that accepts the doctrines of the free traders and inculcates 
 the idea of dependence on foreigners is sure to fill no better 
 place in the world's commercial economy than that singular 
 product of an effete civilization known as a "dude" occupies 
 among verile men. 
 
 It is assumed by historical critics that the misfortunes
 
 TRIUMPH OF PROTECTION 581 
 
 of many of the commonwealths of antiquity may be traced 
 to the pusillanimity of the rich, but a careful consideration 
 of the causes which led to the undoing of some of the most 
 conspicuous examples suggests that it was the vulnerability 
 of the wealth, and not its mere possession, that was respons- 
 ible for the disaster which overtook so many great nations. 
 A statesmanlike fear of the consequences of an unstatesman- 
 like economic policy may easily be mistaken for the cowardice 
 of wealth. The undoubted aversion of most Britons for war 
 is frequently characterized as an instance of the till of the 
 shopkeeper dictating the policy of the nation, but a country 
 whose population demands a vastly greater quantity of food 
 than its agriculturists can supply, and whose manufacturers 
 are dependent upon foreigners for raw materials, must ever 
 be the victim of apprehensions of this kind. Empty ware- 
 houses and granaries in such a country are not merely a 
 menace to wealth; they threaten the national existence. A 
 country like Great Britain must have grain and other food 
 to eat, but above all things her people must be permitted 
 to work. If their supplies of grain are interrupted they must 
 suffer, and if they have no raw materials to work up, want, 
 misery and starvation will be the fate of many. 
 
 No such misfortune can hinder the career of a nation 
 which steadfastly adheres to a policy of self sufficiency. 
 The development of a protectionist country with manifold 
 resources results in the accumulation of vastly greater 
 stores of wealth than could possibly be gathered in a 
 dependent country, and, when created, the wealth of a pro- 
 tectionist nation is practically invulnerable. The great man- 
 ufacturing plants of a country of the magnitude of the United 
 States are subject to certain economic vicissitudes, but they 
 can never be brought to a standstill by a blockade. The 
 iron and steel mills, the textile factories and all the great 
 staple industries of this country would flourish if the seas 
 were alive with the craft of enemies. No fear of empty 
 granaries or apprehension of a cotton famine would conspire
 
 582 PROTECTION AND PROGRESS 
 
 to prevent the assertion of national dignity. And while no 
 American statesman would court a war with a foreign nation 
 or nations which would interrupt external commerce, there 
 is none who would feel it incumbent to submit to national 
 insult to save the whole of our ocean borne commerce. 
 
 This security has been obtained by following the precepts 
 of Washington, whose views respecting the development of 
 the national resources were shared by all thoughtful men 
 of his day. By adhering to the principle of self sufficiency 
 the United States has made itself the wealthiest nation 
 on the globe. Undeterred by the assertions of the closest 
 economists, who taught that the attempt to create a manu- 
 facturing industry by artificial means in a country of great 
 natural fertility would result in diverting from agriculture 
 the capital needed for its development, thus impeding 
 progress in one direction and missing it in the other, Amer- 
 ican statesmen have worked steadily toward the goal of 
 national commercial independence. 
 
 We have shown elsewhere that the prediction that it 
 would be impossible by artificial means to call into existence 
 a profitable manufacturing industry has been falsified, as 
 the result of the protective policy has been to give us in 
 many respects the most efficient manufacturing plant in the 
 world. Mulhall emphasizes this statement when he says that 
 "the value of American manufactures is equal to the value 
 conjointly of British and French manufactures," and that 
 "American manufactures have multiplied just twentyfold 
 since 1840, while those of Europe have only doubled."* 
 
 While this great manufacturing industry was in process 
 of creation instead of diverting capital from the development 
 of agriculture there is a consensus of opinion that the arti- 
 ficial system of promoting manufactures contributed more 
 to the rapid opening up of the fertile lands of the United 
 States than any other cause. While British agriculture has 
 
 ♦Mulhall, Industries and Wealth of Nations, 1896.
 
 TRIUMPH OF PROTECTION 583 
 
 been prostrated, owing to the policy of promoting one indus- 
 try at the expense of others, in the United States the 
 symmetrical application of the protective tariff has so enor- 
 mously increased the output of food and raw products as to 
 practically revolutionize the condition of the masses of 
 workers throughout the world and has incidentally con- 
 vinced the major part of mankind that the methods of 
 antiquity, which might have been pursued to the end of all 
 time, could profitably be changed. By bringing field and 
 factory together the farmer has been taught that agriculture 
 need not be a stationary art. "If the economy of labor was 
 as well understood in all countries as in the United States," 
 says Mulhall, "where each hand cultivates twenty-one acres, 
 the tilled area of Europe would be two and one-half times 
 as great as it is."* 
 
 In the face of such a tribute as this and of the testimony 
 that the value of American farm products has increased 
 from ii8o,ooo,ooo in 1840 to £813,000,000 in 1893, the 
 latter amount representing "one-third of the food product 
 of the world/'t no one will venture to say that the artificial 
 encouragement of manufactures in the United States has 
 retarded the expansion of agriculture. While we were 
 building up a manufacturing industry surpassing in magni- 
 tude that of all other competitors "the growth of agriculture 
 was so great as to be without parallel in any age or nation." 
 In 1840 our production of the cereals — wheat, maize and 
 oats — reached 15,400,000 tons; in 1895 the product was 
 89,400,000 tons. "The grain crop of 1895," says Mulhall, 
 "was equal to eight tons per hand employed in farming, 
 the average in Europe being two tons ; the superiority of the 
 American agriculturist being due to improved machinery."! 
 
 It would have been extraordinary if the industrial achieve- 
 
 *Mulhall, Industries and Wealth of Nations, 1896. 
 
 flbid. 
 
 fibid.
 
 584 PROTECTION AND PROGRESS 
 
 ments above recorded had not enormously increased the 
 national wealth of the protected country. The authority we 
 have drawn upon permits us to make a resume of the growth 
 of wealth in the United States which is both interesting and 
 instructive. He thus presents the stages: 
 
 Per 
 Year. Population. Amount. capita. 
 
 1850 23,200,000 i 1,486,000,000 £ 64 
 
 1870 38,600,000 5,010,000,000 130 
 
 1890 62,600,000 13,550,000,000 216 
 
 189s 69,700,000 16,350,000,000 234 
 
 The figures showing the expansion of British wealth 
 presented by Mr. Mulhall do not permit the paralleling of 
 this table, but he tells us that in i860 the wealth of Great 
 Britain was £7,206,000,000 and that in 1895 it had increased 
 to £1 1,806,000,000. This shows an increase of £4,600,000,000 
 in thirty-five years, whereas the increase in the United States 
 during the twenty-five years ending with 1895 amounted 
 to £11,340,000,000, the addition being nearly as much as the 
 total wealth of Great Britain in the last year of the period."* 
 
 According to the same authority the total wealth of the 
 world in 1894 was £69,769,000,000, and the United States 
 stands credited with nearly one-fourth of the whole amount. 
 This country may therefore be regarded as the most extraor- 
 dinary exemplar of the magnificent results of self depend- 
 ence, but it would be a mistake to assume that other protec- 
 tionist states have not greatly increased their stores by the 
 same methods as those pursued in America. In 1894 France 
 was credited with wealth to the amount of £9,690,000,000; 
 Germany with £8,052,000,000 and Russia with £6,452,000,- 
 000. The latter country has recently embarked on a career 
 which, if not arrested by an unfortunate war, must soon 
 place her in the foremost rank of nations. Her illimitable 
 resources are being systematically developed and her prod- 
 
 *Mulhall, Industries and Wealth of Nations, 1896.
 
 TRIUMPH OF PROTECTION 585 
 
 ucts are steadily increasing in volume and value. The effects 
 of material prosperity are visible on every hand, and the 
 creation of a great manufacturing industry promises to do 
 more for the political salvation of the empire than centuries 
 of revolution and nihilism could accomplish. By diffusing 
 the industrial arts throughout Russia the Government is 
 paving the way for a more liberal system, which will ulti- 
 mately give the masses a voice in its councils. Thus the 
 protective system will have had the effect of increasing 
 the material prosperity of a people and of securing their 
 political advancement. 
 
 The facts presented in the foregoing pages must, if prop- 
 erly interpreted, lead to the conclusion that the policy of 
 artificially stimulating industries is beneficial to mankind, 
 and that none of the injurious effects which Cobdenites 
 say its adoption entails have been felt, simply because there 
 is no foundation for the assumption that practical men in any 
 country would for any considerable period attempt to carry 
 on an industry at a loss. The free traders have erroneously 
 assumed that protectionists advocate acting in defiance of 
 nature, and have deliberately refused to recognize that the 
 eminently sensible object of protection is not to impede pro- 
 duction, but to cause those things which may as readily 
 be manufactured or raised at home as abroad to be produced 
 within the national boundaries. The long history of tariff 
 legislation in the United States may afford some instances 
 of attempts to encourage industries incapable of being profit- 
 ably domesticated, but where one mistake may be cited a 
 score of successes can be set to the credit of the system. 
 It may be added that when a mistake is discovered by pro- 
 tectionists it is not persevered in. 
 
 Judicious protection — and by that we mean well consid- 
 ered efforts to promote and maintain domestic industries 
 in countries with abundant resources — must necessarily work 
 as described in these pages. It cannot help calling into 
 existence manufacturing industries and assist in maintaining
 
 586 PROTECTION AND PROGRESS 
 
 them after they are created. By so doing it affords oppor- 
 tunities to the people of a country to find profitable employ- 
 ment and to accumulate wealth. But above all things it is 
 the great minimizer of waste energy. By bringing field and 
 factory together it tends to the elimination of all superfluous 
 hauling to and fro, and thus cheapens products and makes 
 them more accessible to the masses than they could possibly 
 be under a system which practically elevates trade above 
 production. Cobdenism has this inherent defect that it con- 
 siders the exchange of commodities as more important 
 than their production. The aim of protection is to promote 
 production and to avoid waste, therefore it is the economic 
 policy that must endure.
 
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