OUR TARIFF POLICY.--DOES PROTECTION PROTECT?
A diversity of opinion exists throughout the country upon the question
of tariff. Politicians, statesmen, and the people generally, differ as
to the policy the government should adopt respecting it. It is generally
admitted that the revenue for the support of the government should be
derived from duties levied upon imports. The real point upon which a
difference exists is, whether the government should levy a tariff for
revenue alone, or whether it should be levied for the purpose of
affording what is termed a protection to American manufactures and
interests. This question is no nearer a solution now than it was forty
years ago. Those who favor protection appeal to our national pride; the
necessity of encouraging home manufactures, and of competing with the
cheap labor of Europe. A tariff for protection has been urged and
adopted as the only means of fostering home productions for so long a
time that it is deemed one of the necessities of the country by its
advocates. They look upon it as a chief means of affording a home market
for the farm produce of the country, as well as affording a market for
all manufactured articles. While, on the other hand, those who are
opposed to a tariff save for revenue, claim that what is termed
protection, is, in fact, oppression; that it cripples commerce, taxes
the people oppressively and unjustly, and, instead of benefiting the
producer by affording him a market, deprives him of it. They insist that
the agriculturalists of this country need, and must have, the advantage
of foreign market in order to make farm pursuits remunerative.
We have been combating monopolies, and shall attempt to show that what
is termed a protection tariff affords no protection to the people at
large, or to the operatives and laborers in factories and shops, but
only to the capitalists of the country. An equitable tax for revenue is
one that is levied upon articles of foreign growth or production, that
enter into general consumption; and not one that is levied upon articles
the main portion of which are of home manufacture. It is only the
imported article that pays a duty to the government. The home
manufacturer does not sell his fabrics for less price than is paid for
the imported articles of like character and value; hence when only a
part of any commodity is imported and pays a duty, and the other part is
supplied from home manufactures, while the government derives revenue
from the imported articles, the manufacturer puts into his own pocket
the same per cent that is paid to the government in shape of import
duty. To make it plainer: If a tariff of forty per cent is paid upon the
imported article, when it is sold, the purchaser must re-pay this per
cent to the importer, but the manufacturer can advance the price of his
goods so as to realize forty per cent, or the amount of the tariff over
his former prices, and still compete with the importer. The tariff
protects him at the rate of forty per cent, which must be eventually
paid by the consumer. No tariff is paid on home manufactures, and yet,
in all cases, the manufacturer adds to the cost of production the amount
of the tariff placed on like articles, and collects it from the
purchaser or consumer. A tariff for protection gives to the
manufacturers a monopoly, in some cases so complete as to drive the
foreign article from our ports. In such cases the government receives no
revenue, but the manufacturer makes a clean profit of the per cent fixed
by the tariff, all of which is eventually paid by the consumer, and for
which he receives no consideration. To illustrate this, let us take the
duties on blankets for the year 1871, and the quantity imported. The
duties on the four classes of blankets were 87, 88, 100, and 109 per
cent, respectively. The whole imports for that year amounted to $19,355,
and the tariff duties amounted to $17,316. All of the residue of
blankets purchased during that year were home productions. The
manufacturer has only to mark up his price to realize about one hundred
per cent over the price at which they would have been sold but for the
protection tariff. Take boots and shoes as another illustration: We
imported none in 1871, and of course no revenue was received on these
articles in that year; yet the manufacturers had the benefit of a tariff
of thirty-five per cent on each pair sold. If a pair of boots was sold
at $8.00, the protection the wearer paid the manufacturer was $2.80. The
law compels the farmer and laborer to pay that sum as a bounty to the
manufacturer. On cotton goods, the consumer pays a duty of from
thirty-five to sixty-three per cent. For almost every article of
clothing worn by man, woman, and child, a duty must be paid. The average
is about forty-five per cent on the value. Prices are nearly uniform for
the same classes of goods, whether of foreign or domestic manufacture.
On imported articles the tariff is paid to the government; on domestic
manufactures the duty is paid to the manufacturer. This system compels
the poor man to contribute more than his fair proportion to protect the
already rich manufacturer. To illustrate this, let us suppose that A is
worth $500,000, and has a family of four to clothe, while B, who has
nothing but his industry, and perhaps a small homestead, has a family of
eight dependent upon him (as a general rule, the poor man has the larger
family). Both families must be clothed and fed; each must contribute to
the manufacturer the same rate of protection. The man with his half
million in property and family of four will probably purchase as much
for his family as the poor man will for his family of eight; each
expends for his family during the year, for clothing, say four hundred
dollars. If the duty on the purchases average forty per cent, each pays
for the support of the government and to protect home manufactures the
sum of $160.00. The sweat and toil of the poor man contributes just as
much as the rich man's half-million. Or, suppose A is a man without
family, and has great wealth, and B is dependent upon the product of a
small farm for the support of himself and family. A spends for clothing
$200.00, while B is obliged to expend $400.00 for clothing his family.
Here the labor of the poor man pays twice as much as the capital of the
rich man to protect home industry and support the government.
The above illustrations will serve for all articles of general
consumption. Let us look at the effect of the tariff upon other
articles, taking railroad iron as an illustration. Under a revenue
tariff railroad iron was sold for less than two-thirds of its present
cost. Manufacturers amassed princely fortunes; laborers were better paid
than they are now; the iron interests seemed to be in a prosperous
condition; the demand was growing and increasing, and has continued to
increase, until the supply is insufficient; and both foreign and
domestic markets are depleted, and at times exhausted. With this
increasing demand and scant supply there seems to be no good reason for
government protection to home manufactures, yet a protective duty of
about one-fourth its value is allowed on railroad iron. While the
companies constructing the roads pay this duty, the producing classes
also pay it in the end, in the shape of appreciated charges for
transportation. The protection afforded to manufacturers does not extend
to the laborers and operatives. The slight increase on the amount paid
them does not meet the increased cost of living resulting from the
protection tariff. They must pay more for what they consume, as well as
receive the pay for their labor in depreciated currency. The effect of
protecting the iron interests is to strengthen a monopoly that is now so
rich and powerful that it controls some of the largest states in the
Union. For this protection it returns no equivalent. The effect is the
same in other manufacturing states. The owners of the factories make
large profits, but the laborers and operatives, while their wages have
advanced, really do not receive as much, over and above the increased
cost of what they consume, as they received prior to 1860 under a
revenue tariff.
The purchasing power of a dollar before 1860 was as great as that of one
and a half dollars now, for the reason that then it was the value of a
coin dollar, while at the present time it is the value of an
irredeemable paper dollar, at no time worth a dollar in coin, and for
the further reason that the present tariff compels labor to pay for its
purchases from thirty to eighty per cent for protection to the
manufacturer. Thus, while the actual increase of wages is, as shown by
reports made after investigation, but twelve per cent, the cost of
living has increased fifty per cent. Under the plea of encouraging home
manufactures, the operative and laborer is compelled to work at
starvation prices, and it is not strange that they are organizing mutual
aid societies.
Another argument in favor of protection, which is often urged, is, that
we should protect our people from the competing effects of the pauper
labor of Europe. If this object were accomplished by a protective
tariff, one good purpose would be achieved. But what are the facts? The
manufacturers avail themselves of the higher prices warranted under the
tariff, and then import their laborers and operatives from Europe, and,
instead of finding, as formerly, American factories, furnaces, and
machine shops, operated by Americans, they are worked mainly by imported
laborers and operatives, and those who were to be protected and receive
living wages are compelled to seek employment in other pursuits. Instead
of protecting our own laborers from the competition of foreign pauper
labor, the foreign laborers are imported, and supersede those who were
promised protection.
Another argument in favor of a protective tariff is, that it will afford
a home market for the agricultural products of the country. Is this
true? The vast agricultural resources of the great west and south demand
the markets of the world. Illinois and Iowa can produce enough to supply
a manufacturing population who, in turn, could supply all the fabrics
and manufactured articles demanded by the entire population of the whole
country. If we are to have the balance nicely drawn, so as to have a
manufacturing population sufficient to consume the agricultural products
of the country, then we could furnish the manufactured articles at rates
that will allow us to export to other countries and compete with them in
their own markets, or else the supply will so far exceed the demand that
only a limited number could continue manufacturing pursuits, and a
protective tariff, no matter how high, could not furnish a market beyond
the demand. Let us refer to the returns made to the state department for
an illustration of one point: In 1860 the exports of manufactured
articles to foreign countries, under a revenue tariff, amounted to
$21,351,562. The total amount of like exports in 1871, under the present
protective tariff, amounted to $13,038,753, in coin. The exports in 1860
were in excess of those of 1871, under the highest tariff ever known in
this country, $8,282,811, showing that under a low or revenue tariff our
manufacturers could, and did, sell in foreign markets more than under
the present system of high duties. Again, if we look at the exports of
meat and breadstuffs for the years 1860 and 1871, we will find the
amount exported in 1860 exceeded that exported in 1871 $2,000,000. We
have not the figures before us, but believe they will show a still
greater falling off in 1872. Now let us look at the imports during the
same period. In 1860, we imported manufactured articles to the amount of
$146,177,136, and in 1871 to the amount of $165,463,679, being an excess
of the amount for the year 1860 in the sum of $19,286,543. If we add to
this the falling off in exports ($2,000,000), the balance of trade
against us, on manufactured articles, as between us and other nations,
is $21,286,543. The imports for 1872 far exceed those of 1871, and the
balance of trade against us for that year was but little less than
$40,000,000. But if we take our entire commerce with other nations in
account, the balance against us in 1871 was over $100,000,000! In 1872
it was over $140,000,000, and, if we add the amount of interest paid
annually on bonds held in other countries, payable by railroads and
other corporations, and the general government, the balance against us
in 1872 was not less than $250,000,000. This balance must be paid with
the products of our country, or in money. We have not coin with which to
pay, and under our _protection_ system we cannot pay with our products.
A protective tariff makes the farmers, the laborers, and all consumers,
insurers of a certain profit to the already powerful combination of
manufacturers. While the mechanic must depend upon the demand there is
for his skill and labor, the laborer must also take his chances in the
same way, and be content to accept such wages as his services will
command, and the farmer must depend upon the demand and supply for the
sale of his farm product, and not unfrequently will sell at ruinous
prices, while the manufacturers have a monopoly in their line--they can
always sell at a profit; all they need to do is to sell about as cheaply
as the same article can be furnished for from a foreign market, plus the
"protection" of the duty. The duty paid on the foreign article is the
amount of _royalty_ the manufacturer charges for his goods. All other
industries are compelled to divide their labor and products with him.
The laborer who receives $20.00 per month and buys cloth of domestic
manufacture for a suit of clothes, for which he pays $20.00, contributes
about $7.35 of that amount to "protect" the manufacturer. The farmer who
sells one hundred bushels of wheat for $100.00 and expends the amount in
clothing for himself and family, donates about $38.00 to protect the
manufacturer. The same is true of all other classes of consumers. Each
one pays from thirty to eighty per cent on his purchases to protect the
owners of factories, furnaces, etc.
The protective tariff has destroyed our ocean commerce. It would not be
profitable to spend time in reviewing the duty levied upon the materials
and in the construction of vessels for ocean commerce. The fact is well
known that our carrying has passed into the hands of other nations. That
vessels can be built more cheaply in foreign ports is well known, as
also that American ship owners build or purchase their ships in Europe,
sail under English colors, and use English papers, assigning as a reason
therefor their inability to pay the duty upon the materials used in ship
building. So oppressive is this duty, and so damaging has it become to
our commerce, that congress is being urged to grant subsidies to ship
owners. As a necessary result of this system of protective tariff, the
American built ships cannot carry freight as cheaply as those built in
foreign countries, and the producer must be content to have his produce,
already taxed to a half or two-thirds its value for inland
transportation, taxed beyond the amounts charged by the vessels of other
nations for ocean transportation, or allow the ocean trade to remain as
it now is, in the hands of England. American seamen must abandon the
ocean, or sail under foreign flags. Protection has destroyed our
mercantile navy, and compelled our seamen to seek employment elsewhere,
and in other occupations. With our vast agricultural wealth demanding
the markets of the world, the protective policy of the government
effectually closes our ports to other nations, while the farmer is
obliged to accept for his grain the low price that a home market,
already glutted, will afford him. The protective tariff is draining the
country of coin, and making it impossible to resume specie payment.
Taking it in connection with the combination of corporations, and Wall
street brokers, the prospect of having coin as a circulating medium is
but faint, if it is ever possible.
The products of our mines for the year 1872 were about $62,000,000, and
for the last four years have been nearly $200,000,000. The value of
petroleum produced in the United States for the year 1872 was not less
than $60,000,000, a large portion of which was shipped to and sold in
foreign countries, and to that extent should be reckoned as money in our
dealing with foreign nations. In 1862 the balance of trade was against
us to the amount of about $250,000,000. After absorbing the produce of
our mines, and our petroleum, the net balance against us was not less
than $120,000,000. This balance had to be paid in coin or in the issue
of new bonds. At no time since the enactment of the present tariff has
the balance of trade been in our favor. Thus, notwithstanding the high
duty paid, and the protection afforded by the tariff, our demands for
foreign manufactures increase to such an extent as to threaten the
nation with bankruptcy. According to official reports, the amount of
coin in the country in 1868 was $350,000,000. The products of the mines
since that date amount to $200,000,000. The amount of coin now in the
country is reported less than $250,000,000, and most likely will not
amount to $200,000,000. Protection to a small band of monopolists has
caused an annual decrease in the amount of coin in the country equal to
the excess of imports over exports. A few owners of factories and
furnaces are being benefited and enriched by protection; the prices of
manufactured articles have increased on an average about fifty per cent.
The wages of operatives and laborers have increased but twelve per cent;
the exports of manufactured articles have decreased; the value of
imports has increased; the ocean commerce of the nation has been
destroyed; the prices of the agricultural products of the country are
reduced to a point that has blasted the prospects of the farmer, and
made it difficult for him to live; the country is being drained of its
precious metals, and an irredeemable currency has become the only
circulating medium; values are unsettled, and the country is threatened
with financial ruin--all to afford protection to home manufacturers and
corporations. Protection is but another name for the systematic plunder
of the farmer, laborer, and all the industrial interests of the country,
by a class of monopolists that should be classed with corporations,
stock jobbers, and Wall street brokers, and who are, in part at least,
composed of the same men who control the corporate interests of the
country.