The Senate in the First Congress sat with closed doors, and was thus

more open than the House to the influence of interested petitions

which soon began to pour in upon it, asking for amendments to the

House bill in the line of protectionism; and through such amendments

the Massachusetts and Pennsylvania members, with a few other members

similarly inclined, partially carried their points into the first

Tariff. The tax on molasses was fixed at 2-1/2 cents a gallon, and on

Jamaica rum at ten cents a gallon; nails were taxed one cent per pound

imported; and an accepted Senate amendment classed Hemp and Cotton

together as two products of the soil worth "encouraging," hemp at 3/5

of a cent per pound and cotton at three cents a pound; yet hemp

constantly "encouraged" to this day at the cost of ship building and

other industries has never risen to the rank of a staple. Coal was

also taxed protectionistly, at the instance of Virginia, then the

coal-producing State. Note the three universal features of

Protectionism in the original application of it to the United States;

(1) the purely selfish call to tax one's neighbor in order to lift the

price of one's own wares (nails), (2) the equally selfish resistance

to such a tax as falls on one's raw materials (molasses), and (3) the

final log-rolling among those legally privileged at different points

(Massachusetts and Pennsylvania and Virginia).

Take a second instance of the same general point from our second

Tariff, passed in 1816. Two Massachusetts young men, Lowell and

Jackson, brothers-in-law, had started a modern cotton-mill in Waltham,

near Boston, in 1813, and constructed in it, with the help of an

ingenious mechanic named Moody, a power-loom; as soon as the war with

England was over, and Congress in consequence began to talk about a

new Tariff, Lowell went to Washington, and by personal influence with

Mr. Calhoun, then the leading man in the House, with Mr. Lowndes his

colleague from South Carolina, who afterwards reported the new bill,

and with other members of Congress, contributed largely to the

introduction into this Tariff of protectionist features towards

_cottons_. Lowell struck strong at the start. He represented

(doubtless with entire honesty) to Calhoun and Lowndes, both from a

cotton-planting State, that a domestic market for raw cotton _in

addition_ to the foreign market would raise the price of that

agricultural staple. Both were easily convinced that such would be the

case, although both found ample reasons afterwards for altering their

opinion in that regard. Lowell, the "cotton city" on the Merrimack,

founded in 1821, was named from the successful lobbyist of 1816.

Lowndes reported a tax on cottons of 33-1/3% _advalorem_, with a

proviso _that all cottons should be assumed at the custom-house to

have cost at least 25 cents to the square yard_. This was the famous

principle of the "_minimum_," a device to increase the protectionism

without _seeming_ to do so.

The debate on this feature of the bill was a marvel in many ways. The

penetrating reader will not be at a loss for the reason of this. John

Randolph moved to strike out from the bill the proviso for the cotton

_minimum_, and argued at some length "_against the propriety of

promoting the manufacturing establishments to the extent and in the

manner proposed by the bill, and against laying up 8000 tons of

shipping now employed in the East India trade, and levying an immense

tax on one portion of the community to put money into the pockets of

another_." Calhoun rejoined: "_Until the debate assumed this new form,

he had determined to be silent; participating, as he largely did, in

that general anxiety which is felt, after so long and laborious a

session, to return to the bosom of our families. It has been objected

to that bill, that it will injure our marine, and consequently impair

our naval strength. How far it is fairly liable to this charge, he was

not prepared to say. He hoped and believed it would not, at least to

any alarming extent, have that effect immediately; and he firmly

believed that its lasting operation would be highly beneficial to our

commerce. The trade to the East Indies would certainly be much

affected; but it was stated in debate that the whole of that trade

employed but six hundred sailors. The cotton and woollen manufactures

are not to be introduced: they are already introduced to a great

extent; freeing us entirely from the hazards, and in a great measure,

the sacrifices experienced in giving the capital of the country a new

direction. The restrictive measures and the war, though not intended

for that purpose, have by the necessary operation of things turned a

large amount of capital to these new branches of industry. But it will

no doubt be said, if they are so far established, and if the situation

of the country be so favorable to their growth, where is the necessity

of affording them protection? It is to put them beyond the reach of

contingency._"

Thus Calhoun goes on, making the greatest mistake of his life which he

regretted to his dying day, to give plausible reasons for his

insistence and his vote, but he does not even touch upon the _real

reason_. If he had detailed his conversations with Lowell, it would

have been far more to the point. His motive, like that of every other

man in Congress who has urged protectionist schemes, was the special

benefit of some of his constituents at the more or less concealed

expense of their countrymen. But, as always happens when men really

act from unavowed motives, he was suspected of having them; and he

guarded himself: "_He was no manufacturer; he was not from that

portion of the country supposed to be peculiarly interested. Coming as

he did from the South, and having in common with his immediate

constituents, no interest but in the cultivation of the soil, in

selling its products high, and buying cheap the wants and conveniences

of life, no motives could be attributed to him but such as were

disinterested._" But Randolph still charged, that the discussion

showed "_a strange and mysterious connection_" between this measure

and the National Bank bill which had just passed. This was a loophole

of escape for Calhoun: "_he wished merely to reply to the insinuation

of a mysterious connection between this bill and that to establish the

Bank. He denied any improper or unfair understanding, and could

challenge the House to support the charge._"

A beautiful instance of the _confession_, which all protectionists

make in action when it comes to the pinch, that a rise of price is at

once the object and the result of protectionist tariff-taxes, is found

in the awkward attempt of Congress to relieve indirectly the burnt-out

citizens of Chicago in 1871. The great fire occurred in October of

that year. In the winter following a bit of legislation took place in

Congress in consequence, which is too instructive to be passed by

without notice, because in all the parts of it taken together we have

in epitome the motives and the processes and the prompt confessions of

Protectionism. Contributions were taken up all over the country, and

even in Europe, for the relief of the people of Chicago. As Whittier

puts it:

"From East, from West, from South and North,

The messages of love shot forth,

And, underneath the severing wave,

The world, full-handed, reached to save."

But cannot Congress do something to help rebuild the ruined city?

April 5, 1872, President Grant set his signature to a congressional

bill enacted to last one year only, and for the express benefit of

Chicago alone, _to exempt all building materials except lumber from

the operation of tariff-taxes_. As a public and emphatic confession on

the part of Congress, that tariff-taxes raise the prices of

protectionist goods, and that the remission of such taxes lowers the

prices of such goods and becomes a boon to the buyers, all this is

refreshing and satisfactory; but why was _lumber_, by much the most

important of the building materials needed, _excepted_ from the bounty

of the legislators to the unfortunates of Chicago? The bill applied to

Chicago only, and was to last but one year at best! The bill as drawn

and debated included _all_ building materials. Why was lumber

excepted? Because, while the bill was still pending, a special car

filled with the lumber-lords of Michigan and Wisconsin was rolled to

Washington in haste, and the potent influence of these men was

sufficient to cause the express exemption of their product from the

intended cheapening (for one year) of the building materials for

desolated Chicago. The brief official record of this curious

transaction will be found in U.S. Statutes for 1872, page 33. It needs

no comment but the obvious one, that here is the whole matter of

protectionism in a nutshell;--the motive, the open confession, the

greedy lobby determined to thrive on their neighbors' misfortunes, the

inhumanity, the spirit of monopoly, the infernalism,--a game of grab

from beginning to end!

Shameless as the protectionist debates in Congress have been from the

start, in letting it be plainly seen, that the sole motive of their

efforts is an artificial rise of price in certain goods which their

fellow-citizens would be compelled under the law to pay, the debate in

the House of Representatives in the spring of 1883 was by far the most

shameless and avowed in this respect of any that ever transpired

there. In the last days of that debate all pretence of any action for

the good of the country at large dropped utterly out of the discourse:

the old fallacies and disguises and subterfuges of "home markets" and

"higher wages" and "commercial independence" were no longer put

forward even in word under the clash of selfish interests, and in the

eagerness to secure for their wares a factitious price to be paid by

their countrymen; proposed reductions in tariff-taxes were fought off

by these men, and in many instances still higher taxes were urged on,

under their unabashed avowal that, unless home prices were thus

stiffened and uplifted, they could not make and sell their wares at a

profit; one honorable member from New Jersey brought his pottery wares

upon the floor of the House, and tried to demonstrate to his

fellow-members that, unless these very goods were hoisted in price, by

taxes on his foreign competitors, he could no longer tread his clay

and work his wheels with profit to himself: in other words, he and

others like-circumstanced, by lobbying and log-rolling, persuaded

Congress to pass so-called laws to compel their countrymen _to hire

them to carry on what they publicly alleged were unprofitable branches

of business_. By their own confession, the only trouble with their

goods was, that they were inferior in quality and superior in price to

otherwise similar goods in the open market of the world.

One more, and the latest instance, out of hundreds equally accessible

and equally conclusive, will suffice for a demonstration of the point

in hand. In the early summer of 1890, a Massachusetts member of the

House of Representatives, an avowed protectionist from an alleged

protectionist district of that State, waxed so warm in arguing against

a protectionist tax upon a certain raw material useful in tanning

leather, that he took off his coat and proceeded in his shirt-sleeves!

One would suppose, both from his zeal and the tenor of his speech,

that he was a veritable free-trader! But no! He had argued a hundred

times that protectionist taxes (to be paid by other people) were a

good thing for the payers, and enriched the whole country; but lo! it

turned out in this case that he himself was a buyer of this particular

material, and lo! he did not relish the tax-lifted prices caused by

the tariff. They were all wrong. They must be fought off at all

hazards, even in the hottest weather! This is a very respectable

gentleman, well thought of by his neighbors in Worcester County, but

his protectionism is _not_ respectable. It is chameleon-colored. It is

one thing in one light, and an opposite thing in another light.

Indeed, the protectionist congressman has never yet been discovered in

this country, who was fond of paying protectionist taxes himself, or

willing that his immediate and powerful constituents should pay them!

It has been proven many times over, that the very strongest friends of

a Free List in this broad land have been certain so-called

protectionist Senators and Representatives.

From these few sample-examples, the reader of penetration will

perceive, that there is no element of logical coherence or moral

decency or even outward respectability in Protectionism. There is no

_principle_ in it or of it. It does not hang together. It walks in

darkness and not in light. It is full of deceit. It is fond of

disguises. It is contrary to common sense. It offends justice.

Morality frowns at it. It has no basis in any Science, least of all in

the Science of Buying and Selling, whose best impulses it feebly tries

to deny, and whose largest and most innocent gains it fain would

destroy.

Next in order we will examine, in the third place, a few of the chief

FALLACIES AND FALSEHOODS, by which Protectionism has striven to give

itself a standing in the commercial world. In our day at least, these

are, without exception, afterthoughts and subterfuges. We have just

seen under the last head the real impulses, plain as a mountain peak,

which put on and keep on and pile up these taxes on the masses of the

people; but these real motives will not bear inspection and public

criticism, and so plausible reasons must be found or at least

propounded, which shall do the double duty of covering the real

reasons, and of seeming to convince while they only perplex the

victims of the scheme. These plausibilities we propose now to analyze

and to expose. The test of any alleged truth is its harmony with

acknowledged truths: the test of any propounded error is its

incongruity with and contradiction of acknowledged truths. On a

logical comparison, therefore, of any false proposition with any known

truth, the latter will be sure to fling out its flat contradiction and

floor the falsehood forever. Protectionism contradicts economic truths

at practically innumerable points, but we will now watch the

collisions at the principal points only.

Fallacy A: _that a nation may still sell to foreign nations while

prohibiting the buying from them_. Protectionism is multiplied

prohibitions on the buying of goods from foreigners. Between four and

five thousand of such prohibitions deface our national Statute-book at

the present moment. All the while, however, the assumption underlies

this policy, and the express proposition is often heard in different

forms along the lines, that our citizens may still sell their products

to foreigners, nevertheless. England has _got to buy_ our cotton or

starve: the Continent _is compelled_ to take our pork products, for

they are the cheapest food in the world: how can China or India _help_

taking the silver from our mines? Softly. Buying and selling from the

very nature of it is never compulsory, but always voluntary. A

commercial service is never rendered but in plain view of a

return-service to be received. The mental estimation of each buyer is

couched in the very terms of what is offered in return by each seller.

Buying and selling from its inmost nature is always one act of two

persons acting conjointly and inseparably to the advantage of each.

How, then, can the individuals of one country _sell_ anything to

individuals of another country without at the same instant _buying_ of

these in return? The act of selling is just as much buying as it is

selling, and the act of buying is just as much selling as it is

buying. As we have abundantly seen already, the introduction of Money

as a _medium_ in the transaction makes no difference in the _nature_

of the exchange of commodities internationally. The postulate,

therefore, that the people of one country can continue to sell

products to the people of another while refusing to take their

products of some kind in return, is an _absurdity_ in the nature of

things and an _impossibility_ in the world of facts. _A market for

products is products in market._

All known facts confirm this irrefragable reasoning, and discredit

utterly the fallacy in hand. When France and Germany a few years ago

gave back to our protectionists a dose of their own medicine, and

prohibited American pork-products, ostensibly because they feared the

trichinæ but really to cajole their own farmers under the plea of

protectionism, their brethren in the faith have made up all sorts of

faces ever since, have wound up the respective diplomatic clocks to

strike twelve against the too presumptuous countries which ventured to

restrict American products in their ports, have protested and

proclaimed. What is the matter? Is not sauce for the goose sauce for

the gander also? Have not American protectionists shut out French and

German products 100:1 under the same plea now used on the Continent?

"_But we cannot sell our products abroad_," cry the angered Western

farmers. Of course they cannot, because restrictions on buying _are_

restrictions on selling; and additional restrictions of the same kind

put on French and German buying are of course still further

restrictions on American selling. And the farmers are, as usual, the

victims both ways.

To hear an ordinary American protectionist talk, one would think that

Great Britain is the enemy of mankind for admitting into her ports

practically without let or hindrance the goods of all the world. _Free

Trade England!_ Let us look a moment. England has to pay for all these

goods received from all quarters. In what does she pay? In her own

goods, of course. What is her market? The whole world. Is that market

ever slack on the whole? Never. Is she ever flooded with cheap goods?

The more she buys the more she sells of necessity. How much does she

sell _per capita_ of her people? More than twice as much as the United

States sells _per capita_. How can she sell so much of her own stuff?

Because she buys freely other stuff from all the world. What are the

limits to her capacity to sell her own goods to foreigners? Precisely

the limits of her willingness to take in pay other goods from

foreigners. Cannot these limits be overpassed in either direction? By

no possibility: when people can no longer pay for what they buy, the

buying ceases; and when they are not permitted to take their pay for

what they sell, the selling ceases. Is this free trade profitable to

Great Britain? Immensely so in every way. Whither has it carried up

her ocean-marine? To the topmost notch. Is capital abundant in England

in bulk, and are its loanable rates low? England is the richest

country in the world, and all nations resort thither to buy. What is

the source of this vast volume of Capital? The only source of Capital

is savings from the natural gains of Buying and Selling.

Is Great Britain willing to take in goods from the United States?

Certainly, under the universal conditions of taking in foreign goods

at all. Is the United States willing to take in British goods in pay

for her own goods exported thither? She is not, except over

protectionist barriers averaging 47%. Is it a good thing for the

United States, that Great Britain takes in her goods freely? We should

suppose so! Does the former already sell to the latter and through the

latter more goods than to all the world besides? Much more. Could this

profitable trade be easily increased? It could be quadrupled in a very

short time. How? By simply according to our citizens a decent liberty,

which is their inalienable right. Would the United States like it to

be commercially treated by Britain exactly as the former treats the

latter? It would bankrupt the United States in six months. Would our

protectionists like it? It would make them howl. Is it the commercial

salvation of the United States that Britain is immovably for free

trade with her and the rest of the world? Nothing else saves her from

commercial ruin. Can the ghost of a reason be given, commercial or

other, why the United States should continue to fling double fists

into the face of British goods seeking a market and so making one? Not

a shadow of a shade of a good reason was ever given for such folly, or

ever can be.

It is more than a pleasure to acknowledge at this point the great

service done by James G. Blaine, Secretary of State, during the summer

of 1890, to Country and Commerce, by his courageous avowal contrary to

his own personal record and to the vehement behest of his party, that

the economic principle just enunciated is sound, and should be at once

applied by the United States in connection with all the countries of

Latin America. In a letter to the Senate on the results of the recent

Pan-American Conference, he said: "_The Conference believed that while

great profit would come to all the countries, if reciprocity treaties

could be adopted, the United States would be by far the greatest

gainer._" The principle of reciprocity is the principle of free trade

applied by both parties to the trade. It is the sound principle, that

goods buy goods and pay for goods at the same instant to a mutual

profit. Manifold reiterations of this principle came from the

Secretary that summer, especially in vigorous protestations against

the McKinley tariff-bill then pending, alleging with truth that

"_there is not a line or a section in the bill which opens a market

for another bushel of wheat or another barrel of pork_." The

unequivocal statements of a favorite statesman have roused the

somewhat indifference of thousands of citizens, and make certain the

speedy prevalence in the United States of the unassailable doctrine,

that any People must buy freely if they would sell broadly.

Fallacy B: _that tariff-taxes are needful in order to start infant

industries_. There is no analogy whatever between Child-bearing and

Child-growing and any form of Buying and Selling at any time, but the

deceit in the wretched simile has cost the world billions of dollars

of pure loss. To bring up infants from birth to maturity is indeed a

good deal of a task for the parents, but it is not in any sense an

economical task: the parents neither ask for nor receive a

return-service in kind: the transaction is wholly moral in its

character, and not economical at all: there is no party of the second

part in the premises: there is a free giving, and that is all. Buying

and Selling, on the contrary, has no infancy, and no maturity and no

old age. This particular Minerva springs at once full-grown and

full-armed from the brain of Jove. The conditions of Trading are

forever the same; with no reference to the age of the parties, the

antiquity of the industry, or any other such irrelevant thing. If any

person anywhere (old or young) has got something to sell, and finds

(directly or indirectly) any other person anywhere who wants his

wares and can pay for them,--all the conditions of mutual profit are

present, and everything else is an impertinence.

Much more than this. Tariff-taxes have to be paid by somebody. Their

payment is inexorable at the custom-house, and interest and other

charges are added before the sum reaches the ultimate payer. But the

ultimate sum however made up is exactly so much _out_ of the

commercial gains of the payer. The sign is every time _minus_ and

_not_ plus. When egregiously high tariff-taxes are multiplied in

number, and all the additions are made to them, they become an

incalculably large sum, every cent of which _has to be paid_ out of

the gains of current Industry. Now, what a queer way that is to foster

industries! What a queer way to help start them! It takes Capital to

start new industries, and to carry on old ones; but tariff-taxes (with

all their accretions) take just so much _out_ from what would

otherwise naturally become Capital. That is to say, all Capital is

savings from the gains of Exchanges; and these gains are _reduced_ by

every tariff-tax that touches them directly or indirectly. Taxes from

their very nature can help nobody. They hurt everybody. What a device

this is to start new industries with, namely, to pick the pockets of

the very men, who are to start the industries, if they ever are to

start at all! Lower your reservoir to begin with, in order to give

head and force to your faucet flow!

But this is not half of it. On what industries do the protectionist

taxes fall at first to weaken and discourage them? Of course on the

natural and profitable ones, which only ask to be let alone in order

to maintain a healthful life and growth. If, under natural conditions,

any industry is in existence, one may be perfectly sure it is

profitable, since Profit is the only thing in the world that can

start and build up an industry: when the profit ceases, the trade

ceases of necessity: the motive to it is _gone_. In behalf of what

sort of industries are these taxes ostensibly and plausibly levied?

Only, if we are to believe the protectionists, the weak and presently

unprofitable ones. _It is the infant industries that need the

nursing-bottle!_ That is to say, tax down and perhaps destroy the

_profitable_ industries, the industries that _pay_, that can paddle

their own canoe and no thanks to anybody, in order to bring forward

certain other industries, which by confession and open proclamation

are _unprofitable_, and can only _start_ by taxing their neighbors! Of

course, there is a cat in this meal, and we shall let her out of the

bag in plain sight presently; but we are taking now our friends, the

protectionists, at their own word, and exhibiting their marvellous

wisdom under the terms of their own choosing. What a blessed way for a

nation to grow rich, to smite down with high taxes the active and

enterprising and independent and therefore profitable industries with

one hand, and grope around with the other to find some poor and

inactive and unfrugal and naturally unprofitable industries, in order

to fetch forward these by means of the plunder filched from the

others!

To go back for historical illustration to Washington's first

administration, when the first (extremely mild) protectionist taxes

were levied in this country, we have the highest authority for knowing

that many of the leading branches of manufactures were prosperous and

profitable. They had no artificial help in order to start, but on the

contrary had had continual discouragement for a century under the

miserable protectionist policy of the mother country. Washington

himself was inaugurated in a dark brown suit of woollen cloth of

American manufacture: so was John Adams inaugurated first

Vice-President of the United States about the same time in a garb of

wholly native manufacture.[11] This was in April, 1789. In November of

the same year, Washington returned to New York from his first tour in

New England "_astonished both at the marvellous growth of commerce and

manufactures in New England and the general contentment of its

inhabitants with the new government_" (Schouler, p. 117). Alexander

Hamilton, the first Secretary of the Treasury, in his famous Report to

Congress on Manufactures, in 1791, enumerated seventeen branches as

then thriving so as to fairly supply the home market, and settle into

regular trades. These were, skins and leather, flax and hemp, iron and

steel, brick and pottery, starch, brass and copper, tinware,

carriages, painter's colors, refined sugars, oils, soaps, candles,

hats, gunpowder, chocolate, snuff and chewing tobacco. It is plain

enough from the debates of the time as well as from the nature of the

case, that the protectionist taxes in our first two Tariffs, already

considered here in detail, although they were comparatively slight in

number and amount, fell in the way of discouragement on these

incipient yet independent manufactures as well as upon all the farmers

of the land. There can be but little rational question, that the

woollen industry was sounder at the core in 1789, when Washington was

inaugurated in native woollens, than in 1889, when Harrison was

inaugurated in the same, the ostentatious gift of a firm of

protectionist woollen manufacturers shortly afterwards adjudged to be

bankrupt and fraudulently so.

The best point, after all, to make against this hollow fallacy, is the

practical one, that no industry whatever, whether "infant" or other,

has ever come in this country into an acknowledged self-sustaining

position under a whole century's tariff-taxes. Salt, hemp, coal,

cottons, woollens, nails, and iron and steel products generally, were

the chief articles protectionized at first, and have been

protectionized ever since, but no one of them all has ever come into a

condition of self-support according to the view of the privileged

beneficiaries. Each one of them was an old industry, and a relatively

rich industry, when it was taken under the "fostering care" of the

tariff-taxes, levied for their further enrichment on the masses of the

people; and it was only greedy and secret combinations among these for

that purpose, which put them at first and has kept them ever since in

the rank of public beneficiaries. The simple truth is, that diversity

of employments is rooted in human nature and in the circumstances amid

which God has placed men, and so far is it from being true that taxes

and restrictions are needful in order to foster manufactures, taxes

and prohibitions cannot prevent them from springing into life! They

are just as natural to men and to colonies as agriculture is. Indeed,

agriculture can scarcely take a step without them. The farmer must

have ploughs and carts and other implements; and, depend upon it,

there are some natural mechanics in that colony. Clothes are as

needful as food, and spinning and weaving in some form will begin at

once, and prohibitions will be powerless to stop them.

Deadly to the fallacy in hand is the word of unquestionable History.

Any one may read in Palfrey and Bancroft and Hildreth such facts as

these, scattered all along through the noble volumes. The manufacture

of linen and woollen and cotton cloth was begun in Massachusetts in

1638, in Rowley, by some families from Yorkshire; and became so

remunerative in a couple of years that some acts of the General Court

designed to stimulate it were repealed. Brick-making and glass-works

and the manufacture of salt were all begun in Massachusetts before

1640. In 1643, the younger Winthrop established iron-works in

Braintree and Lynn, which after some losses were successfully

prosecuted. Within less than twenty years thereafter, tannery and

shoemaking had made such strides, that boots and shoes became articles

of export. That these were no fancy beginnings in manufactures, we may

strikingly learn from an Act of Parliament passed in 1698. Notice the

date. This law is a sample of many more:--"_After the first day of

December, 1699, no wool, or manufacture made or mixed with wool, being

the produce or manufacture of any of the English plantations in

America, shall be loaden in any ship or vessel, upon any pretence

whatsoever,--nor loaden upon any horse, cart, or other carriage,--to

be carried out of the English plantations to any other of the said

plantations, or to any other place whatsoever._" Thus the fabrics of

Massachusetts were forbidden to find a market in Connecticut, or to be

carried to Albany to traffic with the Five Nations. "That the country

which was the home of the beaver might not manufacture its own hats,

no man in the colonies could be a hatter or a journeyman at that

trade, unless he had served an apprenticeship of seven years. No

hatter might employ more than two apprentices. No American hat might

be sent from one plantation to another." In 1701 the three charter

colonies are reproached by the lords of trade "_with promoting and

propagating woollen and other manufactures proper to England_." In

1721 New England alone had six furnaces and nineteen forges, and there

were many others in Pennsylvania and Virginia. Parliament enacted in

1750 that no more mills should be erected in America for slitting or

rolling iron, or forges for hammering it, or furnaces for making

steel; and in certain cases, agents of the crown were authorized to

tear down such establishments as "_nuisances_." How far all the arts

of navigation had been carried in the Colonies before the Revolution,

every one may read in Burke's famous speech on Conciliation with

America. How far the products of the loom, the forge, and the anvil,

were already being exported, in spite of British legislation, to other

countries, any one may see in Lord North's last proposals and

concessions to ward off Independence.

Protectionism having once fed its petted beneficiaries from the public

crib, that is to say, from taxes wrenched from the many to enrich the

few, invariably clamors for more and more rations for its pets from

the same public source. Not only does no industry become

self-supporting by its bite and its sup, but each becomes according to

its own facile representations and representatives, more and more

helpless in itself, more and more shameless in its demands, more and

more _entitled_ to public charity, and less and less inclined to

surrender one iota of past or present privilege. The daughters of the

horse-leech cry continually, Give! Give! The following schedule

relates to woollens mainly, but it is a fair sample of many other

protectionized classes of goods under the successive tariffs in this

country, in point of increased taxes on the people in their behoof.

While these lines are being written, the McKinley tariff-bill,

so-called, having passed the House, is pending in the Senate. It is

significant, that this piece of legislation, whether it be finally

enacted or not, proposes to open the second century of the United

States Protectionism by largely hoisting the tariff-taxes along the

main line. Infant industries indeed!

======================+===============================================

| RATE OF DUTIES UNDER THE TARIFF OF

ARTICLES. +-----+-----+--------+--------+--------+--------

|1791.|1859.| 1861. | 1864. | 1883. | 1890.

----------------------+-----+-----+--------+--------+--------+--------

| Per | Per | | | |

|cent.|cent.| | | |

Dress goods of cotton | 5 | 19 | 30 per | 55 per | 68 per | 88 per

and worsted, | | | cent.| cent.| cent.| cent.

costing 15 cts. | | | | | |

the sq. yd. | | | | | |

| | | | | |

Same, costing 20 | 5 | 19 | 30 " | 50 " | 60 " | 90 "

cents sq. yd. | | | | | |

| | | | | |

Same, all wool or | 5 | 24 | 30 " | 47 " | 77 " |100 "

of mixed materials, | | | | | |

costing 24 cents | | | | | |

sq. yd. | | | | | |

| | | | | |

Same, costing 30 | 5 | 24 | 30 " | 55 " | 70 " | 90 "

cents sq. yd. | | | | | |

| | | | | |

Same, costing 60 | 5 | 24 | 30 " | 45 " | 55 " | 70 "

cents sq. yd. | | | | | |

| | | | | |

Same, weighing over | 5 | 24 |25% and |40% and |40% and |50% and

4 oz. sq. yd. | | | 12 cts.| 24 cts.| 23 cts.| 44 cts.

| | | per lb.| per lb.| per lb.| per lb.

| | | | | |

Ready-made clothing |7-1/2| 24 |25% and |40% and |35% and |60% and

| | | 12 cts.| 24 cts.| 40 cts.| 50 cts.

| | | per lb.| per lb.| per lb.| per lb.

| | | | | |

Tapestry Brussels |7-1/2| 24 |30 cts. |50 cts. |20 cts. |28 cts.

carpets | | | sq. yd.| sq. yd.| sq. yd.| sq. yd.

| | | | | and 30%| and 30%

| | | | | |

Tapestry velvet |7-1/2| 24 |50 cts. |80 cts. |25 cts. |40 cts.

carpets | | | sq. yd.| sq. yd.| sq. yd.| sq. yd.

| | | | | and 30%| and 30%

| | | | | |

Brussels carpets |7-1/2| 24 |40 cts. |70 cts. |30 cts. |40 cts.

| | | sq. yd.| sq. yd.| sq. yd.| sq. yd.

| | | | | and 30%| and 30%

| | | | | |

Druggets and bockings | 5 | 24 |20 cts. |25 cts. |15 cts. |20 cts.

| | | sq. yd.| sq. yd.| sq. yd.| sq. yd.

| | | | | and 30%| and 30%

| | | | | |

Silk goods, including |7-1/2| 19 | 30 per | 60 per | 50 per |Average

velvets and plushes | | | cent.| cent.| cent.|probably

| | | | | | 90%

| | | | | |

Woollen hosiery and | | | | | |

underwear: | | | | | |

Costing 32 cents | 5 | 24 | 30 " | 90 " | 77 " |214 per

per lb. | | | | | | cent.

Costing 42 cents | 5 | 24 | 30 " | 79 " | 79 " |175 "

per lb. | | | | | |

Costing 62 cents | 5 | 24 | 30 " | 62 " | 74 " |135 "

per lb. | | | | | |

Costing 82 cents | 5 | 24 | 30 " | 54 " | 82 " |120 "

per lb. | | | | | |

| | | | | |

Linen goods | 5 | 15 | 30 " |Average | 35 " | 50 "

| | | |37-1/2% | |

Cotton hosiery: | | | | | |

Costing 62-1/2 cents|7-1/2| 24 | 30 " | 35 per | 40 " |110 "

per doz. | | | | cent.| |

Costing 2.10 cents |7-1/2| 24 | 30 " | 35 " | 40 " | 76 "

per doz. | | | | | |

Costing 4.10 cents |7-1/2| 24 | 30 " | 35 " | 40 " | 64 "

per doz. | | | | | |

======================+=====+=====+========+========+========+========

It is also significant in this connection to read an extract from the

Report of Mr. William Whitman, President of the National Association

of Wool Manufacturers, dated March 29, 1890, to the Stockholders of

the Arlington Mills, Massachusetts. "_I have been your Treasurer for a

consecutive period of twenty years. During this period the average

earnings have been_ 20-8/10 _per centum upon the capital. The earnings

of the last year were nearly three and a half times those of the year

previous, and there is every indication that the current year will be

the most profitable one in the company's history._"

Fallacy C: _that a home market is better and broader than a foreign

market_. Professor Thompson of Pennsylvania has publicly and

repeatedly stated, that, by a persistent policy of Protectionism a

"home market" would be created for all the bread-stuffs that this

great country produces; and John Roach, the shipbuilder, expatiated at

length before the Tariff Commission of 1882 on the advantages the

farmer derives from the better "home market" already created by

Protectionism. To come nearer home in place and further down in time,

there was organized in Eastern Massachusetts with headquarters at

Boston in some connection with the national election of 1888, a

so-called "Home Market Club" of large proportions. It is generally

understood in the State, that a large minority, if not a majority, of

the members, are displeased with the McKinley Bill of 1890, declaring

that the mustard is carried to fanaticism in this bill, that neither

the "home market" nor any other can profit by such a series of

prohibitions.

However this last may be, it is plain, that a ridiculous and most

harmful fallacy underlies all references to a "home market" in any

connection with foreign trade. It is simple Gospel charity to believe,

that Thompson and Roach and the founders of the Home Market Club and

all others, who repeat this wretched stuff, never stopped in their

thoughts long enough to inquire what a "market" really is, never

analyzed into its simple elements that composite thing called a

"market," but each and all in turn have taken up a catch-word

carelessly which seems on the surface to have some significance though

in reality it has none.

All will agree, if they will stop to think, that a "market" is always

made up of _buyers_ with return-services in their hands. A bigger home

market than before consists only in more domestic buyers than before,

all ready with acceptable pay in all their hands. More persons than

before, more services-in-return than before. Now, if Protectionism

_can enlarge the home market_, it must be (1) either by increasing the

number of births or diminishing the number of deaths in a given time

in a given country. Precisely how big bundles of big taxes, which the

whole population must pay in one form or another and over and over

again, may be made to stimulate births or prolong lives, no reasonable

man can see, and it is not unreasonable to deny that a protectionist

can see it. But conceding that he can see and show this, his task is

then but half done, for he must proceed to see and show how these same

onerous taxes are able (2) to multiply the return-services in the

hands of this increased population!

If he think at all, the protectionist is compelled to remember, that

his system is always and everywhere a series of prohibitions on

profitable trade. A profitable trade always gives birth to gains. It

always gives birth to Capital. It always gives birth to Plenty. That

is the nature of it, and the Divinely ordained blessing on it. But

when the greater part of these gains are artificially cut off, when

the possible capital is reduced in volume, when the scarcity comes in

which is the primary _purpose_ of Protectionism to create, it shall

go hard if there be even as many return-services as when the process

began. Not a better "home market," but a more meagre one, is the

inevitable issue of restrictions and prohibitions.

If our protectionist try to get out of this snug place, in which he

now finds himself, provided he is able to feel the force of any logic

whatever, by claiming that his broader "home market" is to be made by

new immigrants with old-world values in their hands to buy with, he

certainly cannot escape by this route, because (1) he must in order to

do this see and show what there is in big taxes enormously multiplied

to invite immigrants here at all; and (2) our typical protectionist is

scared to death by the _handiwork_ of foreign "pauper labor" wherever

exposed for sale, and of course he is not prepared to welcome the

pauper laborers themselves, of which class as described by him the

immigrants would mostly consist; and besides, the tariff would not

admit to our shores the old-world values, which would be the

immigrants' sole _return-services_ to help make up the new market!

Within a week of the present writing, Senator Morrill of Vermont has

broached from his place the idea in debate, that the industries of the

United States can be so stimulated by protectionism as to cause the

consumption of all the agricultural products of the United States.

Well, when? The stimulus has been applied now just thirty years under

Mr. Morrill's own eye, and by a tariff called by Mr. Morrill's own

name, increasing its rates every little while, even in 1883, when the

public pretence was to diminish them; and agricultural products of all

kinds, including lard and pork and wool, have never been so "deadly

dull" as in this interval of high protectionism. Scores of thousands

of bushels of well-ripened Indian corn were burned for fuel in the

more western States and Territories the very last winter, because the

market for it was too poor to pay for its transportation to Chicago

over protectionized rails, and in cars built of tariff-cursed lumber,

every nail and bolt and screw in which doubled in price from the same

general causes. If Mr. Morrill were not in his dotage, or if in his

prime he had ever closely analyzed a single case of trade, foreign or

domestic, he would see that the abandoned farms of his own State

reckoned to be about one-third of the cultivated land on the eastern

slope of the Green Mountains to the Connecticut River,--Mr. Morrill's

own native region and residence,--abandoned farms for two years past

assiduously sought by State officials to be filled in if possible by

immigrants from Sweden virtually giving them the lands and

farm-buildings,--fling out their flat contradictions to this

senatorial drivel; that the constant decline for a quarter of a

century of the farming population in every State in New England gives

the lie to this miserable proposition; and that the constantly

increasing area of mortgaged farms in every agricultural State in this

Union is an overwhelming proof that the "home market" for farm staples

has been growing constantly worse for years under this boasted

protectionism.

The year 1890 is likely to prove the pivotal point of time in the

swing of this whole proposition of Deceit, for two reasons, namely,

(1) it is the year of the decennial Census, in which at least a

half-hearted attempt is being made to bring out the aggregate area in

each State of the mortgaged farming lands, and nothing can prevent the

appearance in which of the lessening volumes of population in the

purely agricultural communities; and (2) the year has already been

marked by the political revolt from the party of protectionism of the

masses of the farmers in the Mississippi Valley, and their

organization into "Farmers' Alliances," naturally and demonstrably

hostile to all Restrictions on the sale of farmers' produce.

Fallacy D: _that protectionism tends to raise the wages of general

laborers_. In our third chapter, the whole doctrine of Wages was

clearly and carefully laid down, and it is only needful now to remind

the reader of two or three of those fundamental principles. The

Labor-giver and the Labor-taker only touch each other at the old

points of reciprocal Desires and Renderings. There are two persons

standing in that relation each to each. A rate of Wages is always a

result of a Comparison. If the Labor-takers, whoever they may be, more

strongly desire the services of the Labor-givers, whoever they may be,

other things remaining as before, there will be a rise in the rates of

Wages, because Effects always follow the operation of Causes in

Economics, as in all other scientific spheres; and if the

Labor-takers, for any reason, desire less than before the services of

Laborers, other things being equal, the general rates of Wages will

decline of necessity.

Now, what is the necessary effect of Protectionism upon the general

Demand for Laborers? How is the whole class of Labor-takers affected

by prohibitory tariff-taxes? Note every time, that it is the presently

and independently _profitable_ industries, the industries that ask for

nothing except to be let alone, that are struck and restrained by

these tariff-taxes; the fact that any industry is successfully going

forward under its own motives is sufficient proof of its own

profitableness; these are the industries, in every case, which are

curtailed by restrictive tariff-taxes, their former gains are lessened

of course and by design, and their _motives_ consequently to hire

Laborers to carry on these branches of business now taxed and

tormented are _lessened_; less Desire for Labor-givers gives laborers

less every time round; the so-called argument of Protectionists is, to

introduce alleged _unprofitable_ industries by means of taxing down

_profitable_ ones; and pray, what effect must that have upon the

general Desire to employ Labor-givers, and consequently what effect

upon general rates of Wages?

Take one look further along this same line. Tariff-taxes of this

character are designed to keep out, and do keep out, foreign wares,

which are the natural and profitable market for domestic wares: how

will this forced exclusion affect the Demand for laborers to make or

grow the domestic wares whose market is now lost? And what is the

influence on the Wages of those whose services are now in lessened

Desire along the whole line? Causes produce their Effects everywhere

and every time.

Dissatisfaction among, and actual disaster to, Labor-givers as a

class, have always followed the imposition of protectionist

tariff-taxes in this country, as a matter of plain observation and

record; have followed increasingly and more disastrously increased

restrictions and prohibitions on profitable trade; "Strikes" on the

one hand to resist a lowering or secure a lifting of Wages, "Lockouts"

on the other to bring laborers to terms, "Shut-downs" for pretended

repairs in order to gain time to tide over the gluts that always

accompany artificially restricted markets, semi-hostile relations

between Employers and Employed, interruptions to travel and

transportation, timidities of Capital fatal to new and enlarged

enterprises, have never characterized this country so strikingly as

during the quarter-century of Protectionism culminating in 1890.

The following table accurately compiled by Editor Philpott of Iowa,

from the National Census, shows in remarkable figures the relatively

slow rate of progress of the Nation in thirteen essential items of

growth under the Morrill Tariff, as compared with the rapid rates of

progress in the leading lines under the Walker Tariff. _The comparison

lies in the per centum of increase over the previous decade of the

period_ 1850-60 _relatively to each of the two periods_ 1860-70 _and

_1870-80_: the average of the last two periods is taken for the sake of

an easier comparison of the progress of the one decade (Walker) with

the average of the two later ones (Morrill)._

+----------------------------------+------------+-------------------+

| Lines of Progress. | 1850-1860. | Average each Ten |

| | | years--1860-1880. |

+----------------------------------+------------+-------------------+

| Population | 35.5 | 26.2 |

| Wealth | 126.6 | 61.0 |

| Foreign commerce, aggregate | 131.0 | 45.6 |

| Foreign commerce, per capita | 70.3 | 15.2 |

| Railroads, aggregate | 240.0 | 69.0 |

| Railroads, per capita | 150.0 | 34.0 |

| Capital in manufactures | 90.0 | 66.0 |

| Wages in manufactures, aggregate | 60.3 | 58.2 |

| Wages in manufactures, per hand | 17.3 | 9.4 |

| Products | 85.0 | 69.6 |

| Value of farms | 103.0 | 23.6 |

| Farm tools and machinery | 62.0 | 27.7 |

| Live stock on farms | 100.0 | 17.3 |

+----------------------------------+------------+-------------------+

The State of Massachusetts has been diligently and scientifically

taking the Statistics of everything relating to Laborers as such for

many years; and we take now by way of confirmation of what has just

been written a few statements of fact from the official Reports.

_One-third of Massachusetts wage-earners were out of work one-third of

the time under the benign influence of Protectionism [1887]. Wages

went down in Massachusetts on the whole average 5 per centum 1872-83,

while in the same interval of time they went up 9 per centum in Great

Britain [1885]. Wages in Massachusetts advanced in 1830-60 (Walker) 52

per centum and in 1860-83 only 28 per centum (Morrill). What is called

the needful cost of living increased in Massachusetts between 1860 and

1878 (Morrill) 14-1/2 per centum in spite of immense cheapenings in

costs of production and transportation [1885]._

The U. S. Government has been gathering for a long time important

Statistics relating to Laborers and their Wages and their Costs of

Living, not only in the decennial Censuses but also in Consular

Reports and in the Reports of a national Commission established for

that purpose. We excerpt a few relevant statements from these almost

at random. _Wages in free-trade England are from 50 to 100 per centum

higher than they are in any protectionized country on the Continent of

Europe. The aggregate Values of this country increased 1850-60

(Walker) 126 per centum, and in 1870-80 (Morrill) only 80 per centum,

after reducing the census values of 1870 to a gold basis. Vessels

American-owned and American-built controlled three-fourths of our

foreign carrying trade in 1856, and less than one-sixth of it in

1886._

The Census of 1880 gives the total number of persons employed in the

great subdivisions of industry in the United States as follows:--

Trade and transportation 1,810,256

Manufactures, mechanical and mining 3,837,112

Professional and personal services 4,074,238

Agriculture 7,670,493

The following table compiled from the censuses of the last four

decades will be found to yield food for thought in the light of the

present paragraphs. _It relates solely to manufactured goods at the

four successive epochs._

+-----------+--------------+--------------+--------------+--------------+

| | 1850. | 1860. | 1870. | 1880. |

+-----------+--------------+--------------+--------------+--------------+

|Value of | | | | |

| products |$1,019,109,616|$1,885,861,676|$4,232,325,442|$5,369,579,191|

|Value of | | | | |

| materials | 555,174,320| 1,031,605,092| 2,488,427,242| 3,395,823,547|

|Wages paid | | | | |

| out | 236,759,464| 378,878,966| 775,584,343| 947,953,795|

|Materials | | | | |

| to | | | | |

| products, | | | | |

| per cent | 54| 54| 58| 63|

|Wages to | | | | |

| products, | | | | |

| per cent | 22| 21| 18| 17|

|Average | | | | |

| wages | | | | |

| earned | $247| $289| $377| $346|

|Capital to | | | | |

| products, | | | | |

| per cent | 52| 53| 50| 50|

|Number of | | | | |

| establish-| | | | |

| ments | 123,029| 140,433| 252,148| 253,852|

|Average | | | | |

| hands | | | | |

| each | 7.79| 9.34| 8.16| 10.79|

+-----------+--------------+--------------+--------------+--------------+

Our manufactures were put down in the Census of 1880 as in value

$5,369,579,191. But this sum contains $1,670,000,000 that does not

strictly belong to manufactures, such as flouring, lumbering,

blacksmithing, sugar-refining, coffee-roasting, slaughtering, and a

few others. This sum being taken out, there is left in round numbers

but $3,700,000,000. This is not a great amount for 50,000,000 of

people, and for a land with such natural advantages for manufacturing

as our own.

Fallacy E: _that the costs of Wages to employers and of Materials to

manufacturers somehow justify Protectionism_. The harmful confusion is

constantly made here between Rates of Wages and Costs of Labor--two

very diverse matters. Rates of Wages depend on a very different set of

circumstances from Costs of Labor. Failure to draw this distinction,

and a desperate desire to clutch even at a straw with which to bolster

up absurd Restrictions, have made a hotch-potch and a caricature of

attempted argument at this point. Rates of Wages have always been

relatively high in this country as compared with the countries of

Europe for two general reasons: (1) the country is new, with enormous

natural advantages of every sort, with comparatively few laborers

competing steadily with each other for work, large numbers of persons

passing constantly out of the employed into the employing classes; and

(2) there has almost always been from the first, and there is likely to

be again in the immediate future even if there be not at the present

moment, a Money in this country depreciated below the gold standards of

Europe, in which the rates of current wages are always reckoned, and

which makes them _seem_ to be higher than they actually are in

purchasing-power. On the other hand, Costs of Labor have always been,

and are now, low in this country as compared with Europe, for two

general reasons also: (1) all classes of laborers are more efficient

and skilled in this country than in Europe, working with more energy

more hours in the week, under less cost of superintendence, being as a

rule more temperate and healthful and educated persons, so that

employers _get more for what they give_ than do employers abroad; and

(2) the cost of that to the employers in which the laborers are paid,

whether money or other valuables, is always less here than abroad,

because the money usually is depreciated money which costs less in

commodities, and even if it be not, the current prices of general

commodities are higher here than there, so that the cost of wages paid

directly or indirectly in commodities is less here to employers.

A second and distinct and wholly convincing proof, that the Cost of

Labor to employers has been less here than abroad during the first

century of our national existence, has been the unquestioned fact,

that the Rate of Profits has been higher. A constant stream of foreign

Capital has come hither for investment, drawn solely by the higher

rates of Profit. But if the rates of Profit have proven to be higher,

the costs of Labor must have been lower, because laborers and

capitalists divide the whole returns between them. Nobody else has any

claim upon the conjoint proceeds. _Profits are the Leavings of the

Costs of Labor._ If, therefore, these Leavings are larger in one

country than another, then of necessity the Costs of Labor are lower

in the first country.

Now, Protectionists have had the effrontery (largely the result of

ignorance) to contend, that they are at a disadvantage as employers of

laborers on account of the rates of Wages they are obliged to pay to

them! _Exactly the reverse is the truth._ Instead of being at any

disadvantage at this point, it is a matter of absolute demonstration,

that American employers pay the smallest costs of Labor in the world!

Employers as such have no interest in the rates of Wages as such, but

only in the costs of Labor to themselves as capitalists. High rates of

Wages not only usually accompany low costs of Labor, but also are a

proof of them! The patient (not to say stupid) American People have

consented for thirty years past to be abominably taxed for the

exclusive benefit of a set of brazen mendicants, on the ostensible

ground, that the said public beggars were unfortunately placed in

comparison with European competitors, when the simple truth has been,

that they had a constant advantage in the best, and cheapest (in cost

to themselves), and steadiest and most intelligent (on the whole),

laborers in the world.

What is the truth about raw materials in this country? Especially raw

materials in those branches of industry, which have been most steadily

protectionized from the first, like iron and copper, and cottons and

woollens? Can any reason be found for legislatively excluding foreign

products of these classes on the ground of any disadvantage of our

producers on the score of raw materials? Look at iron ore, for

example, now protectionized to the extent of 75 cents per ton. No

country in the world possesses such deposits in quantity and quality

and accessibility of iron ore as the United States of America. Vast

beds of the best ore in the world, especially in wide regions along

the whole course of the Tennessee River, lie directly upon the surface

of the ground; and the so-called "Iron Mountain" in Missouri is said

to have ore enough above the general surface of the country round to

supply the wants of the entire United States for two centuries! Yet

every ton of this ore is artificially lifted in price to the very

People to whom God gave it in exceeding abundance. The average cost of

mining, washing, screening, and loading upon steam freight-cars for

transportation to market, of brown-hematite ore at one of the Mines

in Tennessee during the summer and autumn of 1890, was 33 cents per

ton, with a constant downward tendency in cost as machinery was

multiplied and methods improved. This included the rent paid to the

owners of the land holding the ore-beds, and every other item of cost

carefully computed by the owner of the capital and manager at the

mines. This statement is made on the authority of the said owner and

manager over his own sign manual, with his consent given that it be

printed as at present in the interest at once of Science and

Righteousness.

It has often been publicly stated by experts, that there is more coal

in deposit in the United States than in all the rest of the world put

together. Nevertheless, bituminous coal has been protectionized since

1874 to the extent of 75 cents per ton, and slack or culm (another

form of coal) 40 and 30 cents per ton. The bounty of God to the people

of this country has been so far forth thwarted by the greed of

mine-owners acting on the subservience of members of Congress to the

few rich combined for that purpose to the impoverishment of the

unorganized masses. Especially has every interest of New England both

popular and manufacturing been sacrificed to the short-sighted

selfishness of the mine-owners, because the British Provinces, just to

the northward, are full of bituminous coal waiting for a market

against New England goods.

Limestone is a second indispensable requisite for the reduction of

iron ores. God has put the ore and the coal and the lime in unfailing

quantities in close proximity with each other throughout the entire

valley of the Tennessee. So small is the natural cost of making iron

in that favored region, that it has been transported this summer to

Savannah by rail (freights heightened by tariff-taxes on steel rails

and lumber), and then exported 3000 miles to Liverpool with good

profits to the makers by their own confession.

Steel rails are protectionized at present to the extent of $17 per

ton, formerly $28 per ton. Fortunately, we have at present a competent

National Labor-Commissioner, heretofore in the service of

Massachusetts in the same capacity, Carroll D. Wright, who has just

made a Report to Congress on the comparative cost of producing steel

rails here and abroad. The following table is national and official

and indisputable. It shows the Element of Cost in one ton of steel

rails in Eleven distinct establishments, the first Two being located

in the United States, the next Seven in countries on the Continent of

Europe, and the last Two in Great Britain. The first column gives the

Cost of the Material in the several districts, the second the Cost of

Labor, and the third the total cost of the rails.

+-----------------+-------------+-------------+-------------+

| Distinct | Materials. | Labor. | Total Cost. |

| Establishments. | | | |

+-----------------+-------------+-------------+-------------+

| 1 | $21.10 | $1.54 | $24.79 |

| 2 | 25.11 | 1.38 | 27.68 |

| 3 | 17.67 | 1.04 | 19.57 |

| 4 | 18.06 | 2.51 | 22.18 |

| 5 | 18.06 | 4.64 | 25.65 |

| 6 | 18.23 | 2.58 | 23.12 |

| 7 | 18.10 | 2.68 | 23.19 |

| 8 | 18.66 | 2.97 | 23.74 |

| 9 | 23.42 | 2.01 | 27.02 |

| 10 | 18.05 | 2.54 | 21.90 |

| 11 | 16.39 | 1.36 | 18.58 |

+-----------------+-------------+-------------+-------------+

The reader who knows how to read between the lines will observe the

strong confirmation of this table to the point already made in these

pages, namely, that the "pauper labor of Europe" costs much more at a

given point than the more highly paid labor of England and the United

States. Thus: the average Cost of Labor in a ton of rails in the two

latter countries is $1.70; the average in the seven Continental

countries is $2.63. The average total cost per ton in the nine foreign

countries is $22.77; the average in the two establishments here is

$26.23. It must be remembered, that the cost of the material and of

all the processes of manufacture here is greatly enhanced by the

device of the tariff-taxes: still the difference in cost is even then

only $3.46 per ton greater than the foreigners' cost: considering that

these foreign rails must be carried 3000 miles over sea, how comes it

that a tariff-tax of $28 or $17 per ton is needful in order to foster

rail-making in this country? Take off all the tariff-taxes the

rail-makers and transporters have _to pay out_, and could they not

well forego the additional taxes they now impose on their

fellow-citizens? Is there anything anywhere in the natural costs of

Materials and Labor here to put American manufacturers at any

disadvantage in their natural lines of business as compared with

foreigners in _their_ natural lines of industry?

Fallacy F: _that artificial tariff-burdens placed at one point may

become a compensation for other such burdens placed at another point of

the same general line_. This fallacy has been luridly illustrated in

this country since 1867, when in the Wool and Woollens Tariff of that

year additional protectionism was accorded to Woollens ostensibly to

compensate the manufacturers for protectionism then first accorded to

raw wools. For a number of years the woollen manufacturers had succeeded

in persuading the wool-growers not to demand of Congress tariff-taxes on

raw wools, thus publicly confessing that such taxes raise the prices of

materials to the manufacturers thereof. But the wool-raisers argued

naturally, if protectionism be good for woollens, it must also be good

for wools; the truth was, it was equally baneful to both, and to every

other beneficiary of it in the long run; but the wool-workers had no

answer to the simple logic of the wool-growers,--they gave their case

away when they alleged that _they_ could not live without government

aid,--and so they were obliged to surrender to their already angered

brethren of the fleeces in 1867, and higher tariff-taxes were put on the

woollens in order to compensate the manufacturers for the anticipated

rise in the price of wools. Of course it was supposed that the patient

people would bear the now doubled burdens put upon them by _two_

privileged sets of their fellow-citizens. If protectionist taxes made

the manufacturers rich, why should they not also enrich the rural

herdsmen? In short, why may not such taxes make everybody rich?

There were those at the time, and the present writer was one of them,

who foresaw and foretold just what has actually happened, namely, that

both allies in this scheme of popular plunder were going in to their

own death as well as in to the impoverishment of their countrymen. How

would any level-headed man, capable of seeing beyond the point of his

nose, have prognosticated in the premises? Something like this: it

takes many kinds of wools mixed, say six or eight, to make the best

woollen cloths, and several kinds to make good cloths at all; the

United States could only furnish two or three kinds, and these in

quite limited quantities; the tariff-taxes would raise the price of

the foreign wools by just so much, to the detriment of the

manufacturers, who could no longer buy the foreign wools, needful for

good cloths, and must consequently drop down to inferior cloths in

their mills, using shoddy and cotton and what not: how will that

affect the market for native wools, especially the fine Ohio and

Vermont wools? Only as the manufacturers are prosperous in making good

cloths that find a quick and wide market at home, can the growers find

a good market for their wool; from these heavy taxes on their material

and machinery and lumber and dye-stuffs and so on, the manufacture

will surely droop, and employ itself on poor goods from cheap

materials, and the market for native fleeces will droop in

consequence, and the prices of home-wools will go down and down and

down of necessity.

Precisely this has happened. The gold prices of wool were never before

so low in this country as since the unholy alliance of 1867, and as a

rule they have gone down lower and lower and lower. Why? Because the

manufacturers _could_ not, under the tax-laws of their country which

they themselves had egged on, make the cloths demanding the native

fine wools. Sheep-raising became unprofitable. Millions of

fine-woolled sheep were slaughtered in a few years for their pelts and

mutton in Ohio alone. The following official table from the Department

of Agriculture exhibits the relative number of sheep in thirteen

States of the Union, at the two epochs 22 years apart:--

+--------------+------------+------------+

| States. | Feb. 1867. | Feb. 1889. |

+--------------+------------+------------+

| Maine | 895,884 | 547,725 |

| Vermont | 1,335,980 | 365,770 |

| New York | 5,373,005 | 1,548,426 |

| Pennsylvania | 3,456,568 | 935,646 |

| Kentucky | 933,193 | 805,978 |

| Virginia | 700,666 | 435,846 |

| Missouri | 1,005,509 | 1,109,444 |

| Illinois | 2,764,072 | 773,468 |

| Indiana | 3,033,870 | 1,420,000 |

| Ohio | 7,159,177 | 4,065,556 |

| Michigan | 4,028,767 | 2,134,134 |

| Wisconsin | 1,664,388 | 793,146 |

| Iowa | 2,399,425 | 540,700 |

| +------------+------------+

| | 34,750,504 | 15,475,839 |

+--------------+------------+------------+

The effect of the tariff-taxes on wools, accordingly, even during a

period when the population of the country increased 65 _per centum_,

has been _to diminish the number of sheep in the hands of the farmers

by more than one-half_. The wool clip in the entire country has indeed

increased since 1867, but it has been in Texas and on the free ranges

of the extreme boundaries of civilization in the West, where about one

pound in three of the gross fleece is clean wool, and the most

favorable estimate of the present clip would only suffice to clothe

about one-half of the people of the country. Does this look like

becoming "_independent_" of the rest of the world in the matter of

woollen clothing for our great People? Will our folks never learn that

there is nothing "_dependent_" in Buying and Selling, that the more

any individual or nation Buys and Sells the more _independent_ they

become of course, and that the hermit in his poverty-stricken cell is

the best image of Protectionism?

The extra barriers heaped up in 1867 against foreign woollens not only

did not lessen their importation, but in connection with the

discouragements thrown upon the domestic manufacture as just explained

increased the importations; so that, in 1877, imports of woollen goods

stood at $25,000,000; and in 1882 had increased to $42,000,000, the

latter being an increase in one year, from 1881, of 34 _per centum_.

The people must be clothed at some rate, and many people will have

good cloth at any cost; and the whole result of this imbecile policy

of Prohibitions on wool and woollens has been demonstrated right

before our eyes, (1) to kill off the sheep, (2) to compel the

manufacture of poor goods, (3) to multiply foreign woollens in

domestic use, and (4) to double in general the cost of clothing the

American People. It is difficult to say whether the grangers as a

class, or the manufacturers as a class, or the consumers of woollens,

are more put out by this state of things. They are all in the slough

together, and have only themselves to thank for their condition. And

it is growing worse and worse. As a mere and small example, less than

one-half the amount of woollen machinery is now in operation in

Berkshire County, Massachusetts, that was running here 15 years ago;

and three-fourths of all the woollen manufacturers doing business in

the County have failed in the 20 years just now past. In one word, _it

is no compensation to one industry for artificial burdens piled upon

it, to pile corresponding burdens upon other industries affiliated

with it_. ALL LEGITIMATE INDUSTRIES EVERYWHERE ARE INTIMATELY

AFFILIATED WITH EACH OTHER.

Fallacy G: _that because some kinds of prosperity sometimes accompany

and follow after Protectionism, therefore they are caused by it_. This

is at once the commonest and the hollowest of the forms of false

argumentation employed in this country to bolster up a monstrously

unjust Privilege. The rapid growth of Chicago, for example, in the ten

years following the first imposition of the Morrill tariff-taxes, was

often referred to, as if the Taxes caused the Growth. Admitting for

argument's sake, what would be the height of folly to admit in

reality, that these Taxes were _among_ the causes of that Growth, how

absurd to refer to one antecedent the result of one hundred or one

thousand antecedents! So of the growth of national population in the

twenty years following the Wool and Woollens Tariff of 1867:

population increased about 65 _per centum_ in that interval:

tariff-taxes on most of the necessaries of life increased in the same

interval just about in the same proportion: was there any tie of Cause

and Effect as between the rise of taxes and the rising tide of

population? Any _tendency_ in the one to bring the other? Because one

thing _follows_ another in point of time, is that any proof that the

second is the _result_ of the other in point of cause?

In the old classification of Logical Fallacies this particular one was

called by the Romans "_post hoc ergo propter hoc_," that is, _after

something therefore on account of that thing_. The thoughts and the

speech of civilized men have always been full of some form of this

incongruity of inference; but it is the stock in trade, the staple and

body of protectionist argumentation. But it is utterly devoid of any

significance whatever. Unless some natural tie of connection can be

shown, as between precedent and consequent, unless it can be probably

shown that _nothing but_ the precedent could cause the consequent,

unless taxes are adapted in their very nature to increase riches,

unless repeated subtractions can be shown to be the same thing as

multiplied additions, then all this sickening talk of cheapening

prices and intensified activities and diffused popular blessings under

an odious scheme of subtle taxes that only _take_ and can never

_give_, is to be treated with a silent and pitying contempt, whether

used by the duped or the duping. A good instance of this empty form of

reasoning,--much better because more uniform than any one ever sought

to be applied in the realm of Trade,--would be this: the Day has

uniformly followed after the Night ever since the dawn of Time, and

therefore the Night is the cause of the Day!

It has been indeed hard work to destroy the commerce utterly of a

great People by legal restraints however multiplied and by

mountain-barriers however piled up, and some prosperity has pushed

itself into prominence after all these and in spite of all these.

Behold! cry the logical protectionists, behold in such prosperity the

_effects_ of our beautiful legislation! Immeasurable areas of fertile

land to be had by all Immigrants for the asking; endless deposits on

every hand of coal and of all the useful and precious metals; primeval

forests and streams leaping with power from their mountain springs to

mill-wheel and intervale; commodious land-locked ocean harbors on

every side but one, and vast chains of inland "unsalted seas"; a

salubrious climate, and an ingenious, well-trained people;

self-organized and liberal governments, guaranteeing all rational

liberties to the people--but one; all these antecedents and

accompaniments go, as it were, for nothing in the minds and on the

tongues of some of our citizens, as causes of accruing prosperity, in

comparison with (as a cause) the commercial bondage at the one point

possible under our liberal and blessed institutions.

These are seven of the fundamental Falsities of Protectionism. They

might easily be made seven times seven, and even seventy times seven.

But not one of them is to be forgiven. They are unpardonable sins

against Science and Liberty and Progress. Any radical and

comprehensive Falsehood, like Protectionism, practically contradicts

the Truth at innumerable points. The test of any proposed truth is its

harmony with other and acknowledged truths: the test of any suspected

error is its contradiction to such truths. Enough has now been said to

settle the place of any pretended right of a part of the people

commercially to enslave the other part, and ultimately themselves

also.

It only remains in this chapter, in the fourth place, to indicate

briefly at a few points the course of OPINIONS in relation to

commercial Restrictions and Prohibitions in general, such as exist at

present in their most exaggerated forms within the United States, on

the part of those best entitled by study and intellect and opportunity

to form and formulate a candid judgment in such matters.

In respect to the personal motive and circumstances of those combining

to frame such legal interferences with the natural liberty of their

contemporaries, and the inevitable results of them, we will quote

first from Sir Thomas More, a man of men, in his Utopia, written in

1516. "_The rich are ever striving to pare away something further from

the daily wages of the poor by private fraud, and even by public laws;

so that the wrong already existing, for it is a wrong that those from

whom the State derives most benefit should receive least reward, is

made yet greater by means of the law of the State. It is nothing but a

conspiracy of the rich against the poor. The rich devise every means

by which they may in the first place secure to themselves what they

have amassed by wrong, and then take to their own use and profit at

the lowest possible price the work and labor of the poor. And so soon

as the rich decide on adopting these devices in the name of the

public, then they become law. The life of the labor-class becomes so

wretched in consequence that even a beast's life seems enviable._"

The utter folly of supposing that a Parliament or a Congress or a

Committee of either is fit to determine, or to have any voice in

deciding, what shall or what shall not be manufactured or grown, what

shall or what shall not be exported and imported, was never more

happily exposed than by Adam Smith in his Wealth of Nations, published

in 1776. "_The statesman who should attempt to direct private people

in what manner they ought to employ their capitals, would not only

load himself with a most unnecessary attention, but would assume an

authority which could be safely trusted not only to no single person,

but to no council or senate whatever, and which would nowhere be so

dangerous as in the hands of a man who had folly and presumption

enough to fancy himself fit to exercise it._"

Alexander Hamilton, our first Secretary of the Treasury, and in some

respects the most brilliant of all our statesmen, has often been

claimed and referred to as a protectionist by those unfamiliar with

his writings; but the paragraph of those writings, or the phrase of

any authenticated conversation of his, has never been quoted and never

can be, because they do not exist, which proves him to have been a

"protectionist" in the modern, or any other proper, sense of that

word. On the contrary, his deliberate and well-founded opinion in the

premises is given at length in number XXXV of the Federalist, this

number printed early in 1788: "_Exorbitant duties on imported articles

serve to beget a general spirit of smuggling; which is always

prejudicial to the fair trader, and eventually to the revenue itself:

they tend to render other classes of the community tributary, in an

improper degree, to the manufacturing classes, to whom they give a

premature monopoly of the markets: they sometimes force industry out

of its most natural channels into which it flows with less advantage;

and in the last place, they oppress the merchant, who is often obliged

to pay them himself without any retribution from the consumer. When

the Demand is equal to the quantity of goods at market, the consumer

generally pays the duty; but when the markets happen to be

overstocked, the great proportion falls upon the merchant, and

sometimes not only exhausts his profits, but breaks in upon his

capital. I am apt to think, that a division of the duty between the

seller and the buyer more often happens than is commonly imagined.

There is no part of the administration of the Government that requires

extensive information, and a thorough knowledge of the principles of

Political Economy, so much as the business of taxation. The man who

understands those principles best, will be least likely to resort to

oppressive expedients, or to sacrifice any particular class of

citizens to the procurement of revenue. It might be demonstrated that

the most productive system of finance will always be the least

burdensome._"[12]

Shrewd old Benjamin Franklin, impersonation of common sense and common

honesty, ridicules in his sly way the whole wretched business in the

columns of the "Pennsylvania Gazette" in 1789. "_I am a manufacturer,

and was a petitioner for the act to encourage and protect the

manufacturers of Pennsylvania. I was very happy when the act was

obtained, and I immediately added to the price of my manufacture as

much as it would bear, so as to be a little cheaper than the same

article imported and paying the duty. By this addition I hoped to grow

richer. But as every other manufacturer, whose wares are under the

protection of the act, has done the same, I begin to doubt whether,

considering the whole year's expenses of my family, with all these

separate additions which I pay to other manufacturers, I am at all the

gainer. And I confess, I cannot but wish that, except the protecting

duty on my own manufacture, all duties of the kind were taken off and

abolished._"

In the first congressional debate on the Tariff after the new

Government went into operation, that is, in 1789, Fisher Ames of

Massachusetts, who had just before made the strongest plea against the

Molasses Tax, the raw material of New England rum, became also the

strongest stickler there for the protectionist view, that artificial

manufactures may properly enough fasten and fatten upon Agriculture,

like shell-fish upon ship-bottoms, and went to the root of the whole

matter of that inevitable antagonism in a few frank and radical words,

the best because the most truthful words that can be found upon that

side in the century that has followed. "_From the different situation

of the manufacturers in Europe and America, encouragement is

necessary. In Europe, the artisan is driven to labor for his bread.

Stern necessity, with her iron rod, compels his exertion. In America,

invitation and encouragement are needed. Without them, the infant

manufacture droops, and those who might be employed in it seek with

success a competency from our cheap and fertile soil._"

Gouverneur Morris, one of the youngest and among the most gifted of

the Revolutionary statesmen, had a clear insight into Economic

realities. "_Whatever saves Labor rewards Labor._" "_Those who will

give the most for money, in other words, those who will sell cheapest,

will have the most money._" "_Taxes can be raised only from revenue:

push the matter further, and their nature is changed: it is no longer

taxation, it is confiscation._"

FOOTNOTES:

[9] See an excellent Essay on Mexican Finance by M. L. Scudder, Jr.

[10] Public Statement of Professor Taussig of Harvard College.

[11] See James Schouler's United States, p. 77 of Vol. I.

[12] There were two other authors of some of the papers of the

Federalist, Madison and Jay; but Hamilton's authorship of number XXXV

was never questioned by anybody; he himself claimed it expressly with

his other numbers a few days before he was shot.