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The Tariff.

Since that 4th of July, 1789, when George Washington signed our first tariff law, a tariff "for the support of the Government, for the discharge of the debts of the United States, and for the protection and encouragement of manufactures," we have enacted between forty and fifty tariff laws culminating in what has been known as the Dingley law, approved July 24, 1897, and under which we have been operating to the present time.

During a large portion of our history the tariff has been made a political issue. It is the only issue by which the Democratic Party has been completely victorious in the nation in the single instance when it gained the Presidency and both Senate and House since the inauguration of Abraham Lincoln in 1861. The victory of the Democratic Party in 1892, like the victory of the same party in 1844, was due to questionable methods of presenting certain phases of our industrial situation to the voters of the country. Up to that time we had never been so prosperous as we were during the year 1892, at the close of which a free-trade President and Congress were elected. The people were deceived during that campaign as they were deceived during the campaign of 1844, which resulted in the election of Polk and Dallas and a free-trade Congress. It will be well, then, for the voters of 1906 to study carefully, first, the effect of our tariff laws in general, and to study in particular the comparison between the operation of the so-called Wilson-Gorman law, which was in effect from 1894 to 1897, and the Dingley law, which has been in effect since.

Tables showing the various phases of our industrial and commercial life will be presented on the following pages in which these comparisons can be seen. Even Free-Traders do not and cannot deny that the Dingley law has been the most successful tariff law that we have ever had. They do not and cannot deny the wonderful strides of progress and prosperity that we have made and the advancement that has come year after year under the operation of our present tariff. Protectionists are content to let the present law stand without change or amendment so long as present conditions prevail. When there is a substantial surplus of revenue; when there is a balance of trade exceeding over $500,000,000; when every man and woman in the country who wants work and is worthy of it can find employment at high wages; when we are able to absorb a million immigrants a year without displacing any home labor; when our annual output of manufactures, even reaching the enormous values that have been attained during recent years, are insufficient to meet the demands of our prosperous people; when our consumption of the necessaries of life are not only greater in the aggregate and per capita than is known elsewhere on earth, but greater than at any previous time in our own history; when our savings and investments and enjoyments of luxuries in addition to the necessaries of life reach, year after year, record-breaking figures; when our bank clearings exceed annually $150,000,000,000, three times the amount attained in 1896 under the Wilson-Gorman tariff, then it is that Protectionists say: "Let well enough alone and leave revision till

such a time as the conditions of our finances, commerce and industry demand." On the other hand, our free-traders or, as they prefer to call themselves, reformers and revisionists, maintain that the time has come when our industries no longer need protection and that the tariff is simply a method of robbery and a condition which enables our manufacturers to form monopolies and control prices. It will be well, therefore, to study this question most carefully, both in the light of past history and with an investigation of more recent and present figures and conditions. For that purpose it seems best, on the following pages, to present the various phases of this question in order that we may reach an honest conclusion as to whether it is advisable, under present circumstances, to think of changing our tariff in the least degree. The fact that we are importing $500,000,000 or $600,000,000 worth of manufactures yearly shows that even with the protection which we now enjoy we are not able to keep out the wares of foreign competitors. A slight reduction in many of our schedules would result in the dumping into our market of perhaps a billion dollars' worth of manufactures annually more than we now import. That would mean a resort to one of two things: We would have to close our mills or reduce wages. There is possibly no other alternative.

Protectionists do not claim that schedules are sacred and never to be altered. They do claim, however, that the so-called American system of protection as exemplified by the operation of the Dingley law for nine years is sacred and must be maintained. We do not have to theorize in the least degree on this subject; we do not have to resort to guesswork; we do not have to base our conclusions upon supposition. We have tried and tried thoroughly both high and low tariffs and we have experience as an example to guide us in reaching the truth.

We need go back no further in our history than a decade to learn that a low tariff means insufficient revenue, means a closing of our manufactories, means idleness for millions of our laborers and low wages for other millions and unprofitable prices for our farmers. Three years was quite sufficient time, for instance, to test the value of free wool. It did not help our manufacturers, but it came near ruining the industry because of the inability of the people to pay profitable prices for woolens. When it is understood that a considerable more than half of the value of our products in manufacturing is made up of the value of socalled raw material, and that fully two men are employed upon the preparation of that raw material where one man works in turning it into the finished product, it will be seen what a delusion is the free-trade cry for free raw material or even cheap raw material. We have free cotton, and yet we buy $50,000,000 worth of cotton goods from abroad. England has free raw material and cheap labor and yet we have passed her in the possession of foreign markets. There is no example in all history where free or cheap raw material and cheap labor has any advantage whatever over our own system of Protection to all our labor and all our industries. In every section of the country, fortunately for our people, the predominant party to-day is harmonious and united upon the central idea of maintaining a protective tariff. A mere handful, however, of the Republican Party have been asking that the duty be removed or reduced upon certain materials entering into the products of their own locality. It is believed that this demand has been made more for political

than economical results. We have heard perhaps more of free hides than of anything else, though some have asked for free lumber, free wood pulp and free coal. It is not claimed by those who asked for free hides that consumers would get their boots and shoes for a single cent less in price. It is not promised that the laborers in that industry would get a cent more in wages. There is but one inference, then, and that is that if any one gained any advantage it would go wholly into the pockets of the manufacturers, and yet it can readily be shown that even that could not be true, for the demand for their wares would fall off from the consumers, who would lose the benefit of the moderate tariff now imposed upon the material which they sell.

It is designed to present every phase of the tariff question in the following pages, through the tables presented and the various extracts from speeches, documents and other data which is given. It is the purpose of the editor of this work to present the subject simply as it exists to-day without any idea whatever of presenting any extreme view, or anything but a rational and absolutely fair picture of present-day conditions added to historical facts and experience.

Protection and Free-Trade.

As it has been agreed by our economists that a tariff for revenue only is also practical free-trade, it may be well to define and explain clearly just what is meant by the terms Protection and Free-trade. There is probably no better definition of the term Protection than that given by Senator George F. Hoar, as follows:

Protection, as used in our political and economic discussions, is the imposing of such duties on the importation of foreign products as will prevent a domestic producer of the same article from having his business destroyed by the competition of the foreign import, while he establishes it; or will enable him to maintain the production, without its being destroyed or rendered unprofitable by the competition of the foreign article after it is established, when he could not otherwise so establish or maintain it or the enabling him to pay larger wages in such production than he could pay if he were subject to the foreign competition.

The term Free-Trade has never had a better explanation than that given by its foremost apostle and advocate in this country, Professor W. G. Sumner:

Free-Trade: The term "Free-Trade," although much discussed, is seldom rightly defined. It does not mean the abolition of custom houses, nor does it mean the substitution of direct for indirect taxation, as a few American disciples of the school have supposed. It means such an adjustment of taxes on imports as will cause no diversion of capital from any channel into which it would otherwise flow, into any channel opened or favored by the legislation which enacts the customs. A country may collect its entire revenue by duties on imports and yet be an entirely Free-Trade country, so long as it does not lay those duties in such a way as to lead any one to undertake any employment or make any investment he would avoid in the absence of such duties; thus the customs duties levied by England, with a very few exceptions, are not inconsistent with her profession of being a country which believes in Free-Trade. They either are duties on articles not produced in England, or they are exactly equivalent to the excise duties levied on the same articles if made at home. They do not lead any one to put his money into the home production of an article, because they do not discriminate in favor of the home producer.

It therefore follows that duties which are not Protective, in other words duties which are not fully equal to the difference in the cost of labor in the United States and the cost of the same or similar labor on the same article abroad, are Free-Trade duties, in fact, and in effect, just as much as if there were no duties whatever upon the commodity so far as affects our ability to produce that commodity at a prevailing labor cost. If, for instance, a duty of thirty cents is necessary upon a yard of cloth to keep out a yard of similar foreign-made material, and the duty is then lowparts ered to twenty-five cents a yard, abling the foreign

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producer to pay the duty and enter our markets at the same or a lower price than is quoted on our own production, then the duty of twenty-five cents results in Free-Trade in that commodity. When, therefore, Free-traders are shy of using the term and resort to the terms of Tariff Reform, Tariff Reduction, Tariff Revision, etc., they are begging the question and deceiving both themselves and their followers. Our duties must be either Protective duties or Free-Trade duties, and the moment they cease to be Protective they result in Free-Trade. The terms Protection and Free-Trade will, therefore, be used, and used honestly and fairly throughout this work.

History of Our Tariffs and Various Revisions.

From the time of the landing of the Pilgrims in 1620 to the formation of our Government under a constitution in 1789 there were in this country no general duties upon imports; in short, we were living under Free-Trade, and foreign nations were able to place in our market without restraint every article which we were liable to buy. After we had secured independence and were united as a confederacy during the years from 1783 to 1789, when we existed as a union of colonies, this Free-Trade was accompanied by most disastrous results. The wares of foreign countries, and particularly of Great Britain, were dumped upon our shores, for which our money went abroad until we were drained of all our specie and had not even a dollar left as a circulating medium. Because of the goods which came from abroad our own laborers were idle, and nothing but debt and ruin stared us in the face.

This state of affairs was one of the principal causes which led to the adoption of a Constitution and a uniform Government throughout the States in 1789. It is not surprising, then, that the first law placed upon our statute books affecting the peoɲle was a Tariff law intended not only as a means of revenue, but for the encouragement and Protection of manufactures. The effect was at once seen in the industrial progress which we made in both agriculture and manufactures, in spite of the attempts of the mother country to crush our every industry in the States.

No material and complete revision of our first tariff of 1789 was made until 1812, when it was enacted:

“That an additional duty of 100 per cent. upon the permanent duties now imposed by law upon goods, wares, and merchandise imported into the United States shall be levied and collected upon all goods, wares, and merchandise which shall, from and after the passing of this act, be imported into the United States from any foreign port or place.”

And it was further enacted:

"That this act shall continue in force so long as the United States shall be engaged in war with Great Britain and until the expiration of one year after the conclusion of peace, and no longer: Provided, however, That the additional duties laid by this act shall be collected on all such goods, wares, and merchandise as shall have been previously imported."

This was the only complete revision of the tariff that has taken place in our history on account of war. The increase in tariff rates, coupled with the prohibitions of non-intercourse, threw us on our resources and resulted in the establishment of many new industries, which, in spite of the ravages of war, brought immense increase of national wealth and business activity. In a special message to Congress, February 20, 1815, President Madison asked:

"Deliberate consideration of the means to preserve and promote the manufactures which have sprung into existence and attained an unparalleled maturity throughout the United States during the period of the European wars.”

Tariff Act of 1812.

The tariff act of 1812 provided for its own termination, which uld have come w ny legislation on February 17, 1816,

one year after the treaty of Ghent was ratified. It was feared that the duties existing before the war would not afford sufficient protection to our newly established industries, and it was pretty well agreed on all sides that those duties should be increased. First, the act of 1812 was continued until June 30, 1816.

It was undoubtedly the purpose of the Members of the Fourteenth Congress to give us in the law of 1816 a thoroughly protective tariff, and yet it proved a failure, not because the principle upon which it was based was not protective in character, but because the spirit of industrialism which then prevailed in the mother country was such as to overcome with an inundation of goods the effects of protection which were not protective, simply because duties were not made high enough. In other words, moderate protection was no protection at all, and when England resolved to flood our country with her great accumulation of goods of all kinds, our tariff did not prove a sufficient barrier.

Our present revisionists would do well to study with great care the conditions and the results of that period of our history. For eight years we suffered as only a nation can suffer when she buys her goods from abroad and her own artisans are idle and unproductive. It was during this period that the tariff question as a great national policy came to the front in our politics and was most thoroughly debated, not only in both Houses of Congress but by the press and on the platform and through numberless pamphlets and speeches made throughout the country.

The result was a new tariff in 1824, which was intended to be, and which proved to be, thoroughly protective in character, and in the words of President McKinley: "The nation was quickened into new life, and the entire country under the tariff moved on to higher triumphs in industrial progress, and to a higher and better destiny for all of its people."

Revision in 1828.

So satisfactory was this tariff that it was still further revised in 1828, and higher duties substituted to such a degree that by its enemies it was called the "tariff of abominations," and its enactment marked the beginning of the secession spirit at the South, which led to nullification in 1832 and rebellion in 1861. In fact, it was the tariff of 1828 which brought about a sectional division which has not since been eradicated. Daniel Webster, the freetrader of the early part of the century, seeing the benefits which accrued from the protective tariff in 1824, became himself one of the stanchest advocates of protection, because he saw that it was a benefit to the whole country, while John C. Calhoun, who had been a protectionist while Webster was a free-trader, now believing that free trade would be better for his State and section, and jealous of the growing power of the North because of protection, became an ardent free-trader.

The time spent in revising the tariff into the law of 1816 was thirty-nine days of actual consideration by both Houses of Congress and the President.

A considerable portion of the Sixteenth Congress, which began in December, 1819, was given up to a tariff controversy, but without legislation. The discussion was, however, productive of good.

Failure to Revise Upward.

As the country was now aroused to the necessity of a tariff which would put an end to foreign competition, the failure to revise the tariff in 1820 was a most severe disappointment to the protectionists throughout the country. Mr. Niles cites the case of a paper in Kentucky, the Lexington Public Inquirer, which at the failure of the bill came out with a black border and column rules, saying:

"Mourn, O ye sons and daughters of Kentucky! O ye inhabitants of the United States, put on sackcloth and ashes, for the great enemy of your independence has prevailed. You must still remain prostrate. Your agricultural productions must lie and

rot on your hands."

Meetings were now held in various parts of the country, and

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