tures and 14 per cent of our production of iron and steel. This was chiefly machinery, and demonstrates how eagerly our competitors are equipping themselves for competition with us in the markets of the world, both in manufacturing and agriculture. Some 40 per cent of our iron and steel manufactures were taken by Canada and Mexico alone. Copper formed the second largest item of our exported manufactures, although practically in the form of raw material. We exported 56 per cent of our entire production of mineral oils, 11 per cent of our cotton manufactures, the raw material of which was on the free list, and only one-half of one per cent of our woolen goods, weighted down as they were with duties. approximating 50 per cent on raw wool.

We produce three-fourths of the world's cotton and send 63 per cent of it abroad. We sell abroad only one-tenth as much cotton goods as Great Britain, while her exports of cotton manufactures alone exceed by a billion yards the total production of the mills of the United States for the domestic and export trade combined. The products of German cotton mills to-day are sold eighteen months ahead, while Italy, raising not more than 10,000 bales of cotton and importing 500,000 bales from us has developed in twenty years a cotton manufacture which gives employment to 300,000 persons, or more than the total population of Fall River, New Bedford and Lowell combined. Italy exported more than $15,000,000 worth of cotton goods in 1906, yet she is paying thirteen dollars a ton for her coal. This is not intended to be an exhaustive presentation, but it is sufficient to show that the chief service rendered by our export trade, so far, is to feed the remainder of the world and to equip it with the tools with which to supply the individual wants of all mankind outside the United States.

To turn for a moment to the import side of the situation, of our total imports of $1,226,000,000 in 1906, no less than $635,000,000, or 52 per cent, exclusive of foodstuffs like sugar, fruits and wines, were of raw or partly manufactured materials for further use in manufacturing, an increase of more than $300,000,000 in fifteen years. Of these, some $237,000,000, or about 35 per cent, were dutiable at rates ranging from 10 per cent to more than 50 per cent ad valorem. The full extent of the handicap to industry by these burdens laid upon their basic raw material is only outlined in the statistics of import, for in many instances importation

is prohibited by these tariff taxes, while in others the price for the domestic article is needlessly increased by the tariff.

That the situation is of distinct disadvantage to all labor and capital employed in manufacturing is clear, while the attempt of manufacturers to uphold themselves by their boot straps, as it were, by means of high compensatory duties, is uneconomic, to say nothing of the moral question involved with relation to the consumer. The duties on raw materials are justified by some distinguished high protectionists on the ground that the producer of raw materials is entitled to protection equally with the manufacturer. His rights certainly are equal to those of any other producer, but he does not get true protection by making it difficult to conduct profitably the mill or factory which is buying his goods. Prices are and always must be determined by the laws of supply and demand. When artificial they are unstable and likely to fall disastrously at any time. When the price of a raw material is artificially raised above the actual value of that commodity as an element of manufacture, the producer is getting something to which he is not entitled by any law of justice or reason, whatever the law as written in the tariff schedules may be.

Artificial prices are bound to curtail production and encourage substitutes and adulteration. Business to-day, prosperous as it is, is only a fraction of what it might be but for the artificial prices of coal, iron, lumber, hides and wool. In my own vicinity, for example, hundreds of acres of choice land are lying vacant upon which capital would be glad to build if a reign of inflated prices did not restrict construction to the most pressing necessities. The most serious consequence of this condition is that the people are compelled to live in inferior houses-"three-deckers" and flats instead of single homes of their own.

Considerations like the foregoing, it seems to me, indicate clearly why the United States has not yet come into its own as a manufacturing nation. I cannot agree that the home market is indefinitely to be preferred to the world market; but whether or not, the world market must prove the ultimate salvation of American manufacturers, and now is the time to prepare for sharing it. The iron and steel trade has demonstrated with what success the foreign field may be entered. Our boots and shoes are now sold abroad in quantities equal to England's. The experiment with Southern

cotton goods has demonstrated that in some lines of cotton manufacture, at least, notwithstanding all handicaps American cottons. may supply a profitable share of the enormous demand for cottons in the Orient and elsewhere. In no other country unless India, would Great Britain have a more promising field for a permanent cotton trade than China, yet many of our Southern cotton mills are manufacturing exclusively for the Chinese market. Of $36,000,000 worth of uncolored cottons sold abroad in 1906, nearly $30,000,000 went to China. In the past four years our exports of cotton goods have increased faster than in the ten years previous. To China we sent in 1892, $3,881,000 worth of manufactured cottons. In 1906, $29,377,000 worth.

Cotton manufacture is only in its infancy in this country. Nor need it depend on child labor, cruel hours and high tariffs to hold. the domestic or compete successfully in any foreign market. Thẹ long period of high tariffs on everything entering into the construction and operation of a mill, with the heavy duties on imports and higher cost to the American consumer than would be tolerated anywhere else in the world, must give way to an era in which artificial handicaps to production must be removed. The path to economical manufacturing must be cleared, and then American made textiles will stand with American iron and steel in the markets of the world, and the labor which produces them will be equally well paid.

Surveying the field broadly, our present prosperity is feverish and apprehensive, ever trying to discount in advance the hour when some disaster or failure of crops may bring a sudden recession of business from which we cannot quickly recover. The greatest safeguard against such an emergency is a stable foreign trade, acquired by slow and patient methods perhaps, but with a world-wide basis and a corresponding solidity. One by one the great industries of the country are seeking foreign outlets, and they that succeed will best stand the strain when the inevitable period of business depression comes. Said Mr. Gladstone, in 1881, speaking to Englishmen of the commercial supremacy of Great Britain: "Nothing in the world can wrest it from you while America continues to fetter her own strong hands and arms, and with these fettered arms is content to compete with you who are free in neutral markets."

THE TARIFF AND THE PRICE OF AGRICULTURAL

MACHINES

BY CHARLES Deering,

International Harvester Co., Chicago.

The tariff restrictions of the United States play an important part in the marketing of our surplus products. We have not grasped the old axiom, "Do unto others as you would have others do unto you." We build a tariff wall and ask European countries to take their walls down. Manifestly there is little justice in our demands. We have demonstrated to the world that protection of home industry is a good thing. If good for us, why not good for them? As a consequence, we find many European markets closing against our manufactured products. Germany, which, up to the present time, has only imposed a nominal tariff, proposes to put into effect a tariff which will be practically prohibitive. The result is readily apparent -either the American manufacturers must stand the increased cost of marketing our products, or make the consumer pay for it. If the burden falls upon our manufacturers, they will be handicapped by the increased cost of marketing the goods-they must do business without any profit or at a loss. If the consumer stands the increased cost, we shall not be able to compete with the local manufacturers and foreign manufacturers who do not have a tariff wall raised against the admission of their products. This leaves us only this alternative-either quit the foreign field, or invest American capital in manufacturing plants on foreign soil.

The new tariff restrictions which Germany proposes to establish are but an indication of the general trend of foreign policy in this particular. Let us consider the effect of our present tariff system upon our export trade in agricultural implements. Under the present schedule the German tariff on binders is $11.23, reapers $5.12, mowers $3.26, rakes $3.76. When the new German tariffs go into effect, on July 1st, American goods will be handicapped to a still greater extent than at present. Germany will enforce against us the maximum rate of her tariff, due to our unwillingness to make any concessions from our present Dingley tariff. From that time

on, unless some modification of the rule can be secured before the date mentioned, the rate per 100 kilos (220.46 pounds) on agricultural implements, such as hand plows, cultivators, grubbers, potato planters, harrows, hand and horse rakes; weighing three kilograms (6.6 pounds) or over will be $1.90; weighing less than 6.6 pounds $2.86; the present tariff on these goods varies from seventy-one cents to two dollars and thirty-eight cents. On all heavy agricultural implements this new rate will be so high as to practically shut off all competition from the countries against which this duty is enforced.

The new tariff therefore represents an increase from 71 cents to $1.90 per 100 kilos on the lighter machines and from $2.38 to $2.86 on the heavier grades. If such an increase does not destroy our German trade in agricultural implements, it will be sufficient at least to seriously cripple its development. To conserve this trade, now experiencing a marked increase, is to keep for American labor a market which will disappear in exact proportion as the sale of our goods abroad is interfered with. Our trade with Germany in agricultural implements is a growing one. In the eleven months ending November, 1906, we exported to that country $1,816,885 worth of agricultural implements, as compared with $1,262,377 worth for the corresponding period of 1905. A foreign market such as this, experiencing a marked growth, and with great possibilities of future development, is one that should not lightly be disregarded. The German market for agricultural implements is growing more rapidly at present than that in any other European country. It should not be allowed to languish because of any mistaken tariff policy, but we should be willing to meet our European neighbors half way instead of trying to reap all the advantages while undergoing none of the sacrifices-which is our policy under our present tariff. If by following our present policy we exclude ourselves from the German market, we must expect to see the German adverse tariff offered as an inducement for capital to invest in that country for the manufacture of goods of a character similar to those now produced by us. Thus both the capital and the market for labor which we might have retained in the United States will go. abroad.

Canada imposes a 171⁄2 per cent ad valorem duty on mowing machines, harvesters and reapers, and a 20 per cent duty on cultiva