Republican tariff principles are being accepted at home and abroad. bearing witness to Republican wisdom. German industrial selfreliance is the sequence of her adoption of a Republican protective tariff, and England's manifest conversion to this fostering plan will magnify the prophetic wisdom of Republican protectionists. Even the Democratic party is penitent now and makes confession in action if not in words. . . Difficulty of ascertaining the effect of the tariff upon na tional prosperity. The protective policy. Our prosperity not due to continued protection, but to 174. Relation of the tariff to national prosperity 1 From the two foregoing selections it would appear that the Democratic party believes the well-being of the country to depend rather largely upon the maintenance of a relatively low tariff, while the Republicans believe that relatively high protection has been an important cause of our national prosperity. The large number of factors in industrial history, and the impossibility of measuring many influences in our economic life, render it impossible to say just what is the relation of the tariff to national prosperity. Nevertheless, it is interesting to note that a leading authority on the tariff, Professor Taussig, believes that there is no definite relation between the tariff and national prosperity. He says: In the United States a severely protective tariff was maintained for half a century after the Civil War. The financial exigencies of the war caused high duties to be levied, and in subsequent years these were retained. A rigid and all-inclusive system of protection grew up, and persisted without serious modification (barring a brief reaction in 1894-97) until 1913, when a considerable general reduction was made. The economic effects of this system it is impossible to follow empirically. We have seen that its effects on the terms of international exchange are so interwoven with those of other factors that no unraveling is possible. Even more baffling is the task of following or measuring its effects on general prosperity. The protectionists, on this subject as on the rate of wages, have preached and protested that all good things come from their tariff. Such talk results naturally from the exigencies of partisan conflict and the need of simple argu 1 From Frank William Taussig, Principles of Economics. The Macmillan Company, New York, 1921. Vol. 1; pp. 538-540. ments for the mass of voters. So loud and persistent has been the talk that for many persons, even for many who are not unintelligent or uneducated, it has become an article of faith that the prosperity of this country rests on the protective tariff. Yet there is no greater delusion. A multitude of factors explain a multitude of other our general welfare - vast resources, a far-spread division of labor factors. within the country, a free, active, and intelligent population. Has not this North American region been for centuries, under all sorts of economic and political conditions, the envy of the world? But to trace in detail the part played by any one factor in promoting or retarding the enviable outcome is well-nigh impossible. Certain it is that, so far as the tariff is concerned, we must rely on general reasoning. The first and obvious effect of protection is to turn industry into less advantageous channels; and there is, in my judgment, no good case to rebut this general conclusion and to establish a balance of gain, from such a tariff system as the United States has had since the Civil War. . . . The extent to which manufacturing industry in the United States is dependent on the tariff system is vastly exaggerated by the protectionists. One would suppose, from their doleful predictions, that not a chimney would smoke but for the tariff. In fact, the United States is certain to be a great manufacturing country under any conditions. So much is assured by its wonderful resources of coal and minerals and by the ingenuity and enterprise of its people. . . . But this same consideration indicates that the free traders went too far in ascribing ill effects to all the parts of the protective system. It did not change the course of industry as far as their charges implied. The country would be prosperous, and would have greatly diversified industries, without a high tariff as certainly as with it. The extent to which manufacturing depends upon the tariff is exaggerated by both protection ists and free traders. Questions on the foregoing Readings 1. Upon what instinct does international trade depend? 3. Upon what differences is permanent trade based? 4. Illustrate the effect upon international trade of these differences. 5. Why will a country often import a commodity which it can pro duce at home? 6. What would happen if there were no artificial hindrances to the exchange of products between countries? 7. Give two reasons for the regulation of international trade. 8. What does the Constitution say as to export taxes? 9. Illustrate the difference between duties for revenue, and duties for purposes of protection. 10. Show how a revenue tariff may afford some protection. II. Show how a protective tariff may yield some revenue. 12. Why was a Tariff Commission created in 1916? 13. What is the general purpose of this Commission? 14. What are the duties of the Commission with respect to the customs administrative laws? 15. Why does the Commission make a study of foreign tariffs? 16. What is the third and in some respects the most important of all the duties of the Commission? 17. Give some of the steps in the survey of commodities, as conducted by the Tariff Commission. 18. Why is it possible somewhat to predict the effects upon the tariff of a change in administration? 19. What type of tariff is declared by the Democratic party to be unconstitutional? 20. What is the attitude of the Democratic party toward the Republican tariff policy? 21. What, according to the Democrats, is the relation between protection and the cost of living? 22. Summarize the tariff principles of the Republican party as expressed in 1920. 23. Outline the position of Senator Harding in 1920 with respect to the tariff. 24. How did Senator Harding reply to the statement that the Democratic party desires to lighten the burden of the consumer? 25. Why is it difficult to ascertain the effect of the tariff upon national prosperity? 26. Explain the conclusions of Professor Taussig on this point. CHAPTER XXX CONSERVATION 175. Why conservation of natural resources is necessary 1 vation movement made little until Presi- In the earlier decades of our national history, the abundance of The conserland, minerals, forests and other natural resources was so great that they were used generously and even lavishly. To a considerable extent such use was economically justified; nevertheless the shortage of these resources has recently called attention to the need of conserving them. The conservation movement began toward the close of the last century, but until after 1900 made relatively little headway. Realizing the urgency of the problem, President Roosevelt in 1958 called a Conference of Governors of the states and territories of the United States to consider this important question. On May 13, 1908, the President opened the Conference with an address to the governors and other guests, speaking, in part, as follows: I welcome you to this Conference at the White House. You have come hither at my request, so that we may join together to consider the question of the conservation and use of the great fundamental sources of wealth of this nation. . . . President Roosevelt welcomes the delegates. of conservation. This Conference on the conservation of natural resources is in Importance effect a meeting of the representatives of all the people of the United States called to consider the weightiest problem now before the nation; and the occasion for the meeting lies in the fact that the natural resources of our country are in danger of exhaustion if we permit the old wasteful methods of exploiting them longer to continue. In Washington's time anthracite coal was known only as a useless black stone; and the great fields of bituminous coal were undis 1 From the Conference of Governors in the White House, Washington, D. C., May 13-15, 1908. Proceedings. Washington, 1909; pp. 3, 5-8. The situation in Washington's day. Significance development of the United States. covered. As steam was unknown, the use of coal for power production was undreamed of. Water was practically the only source of power, save the labor of men and animals; and this power was used only in the most primitive fashion. But a few small iron deposits had been found in this country, and the use of iron by our countrymen was very small. Wood was practically the only fuel, while the forests were regarded chiefly as obstructions to settlement and cultivation. The man who cut down a tree was held to have conferred a service upon his fellows. Since then our knowledge and use of the resources of the present of the rapid territory of the United States have increased a hundredfold. Indeed, the growth of this nation by leaps and bounds makes one of the most striking and important chapters in the history of the world. Its growth has been due to the rapid development, and alas, that it should be said! to the rapid destruction, of our natural resources. Nature has supplied to us in the United States, and still supplies to us, more kinds of resources in a more lavish degree than has ever been the case at any other time or with any other people. Our position in the world has been attained by the extent and thoroughness of the control we have achieved over Nature; but we are more, and not less, dependent upon what she furnishes than at any previous time of history since the days of primitive man. The great material question of to-day. Rapid exhaustion of resources. The wise use of all of our natural resources, which are our national resources as well, is the great material question of to-day. I have asked you to come together now because the enormous consumption of these resources, and the threat of imminent exhaustion of some of them, due to reckless and wasteful use. . . calls for common effort, common action. . . . This nation began with the belief that its landed possessions were illimitable and capable of supporting all the people who might care to make our country their home; but already the limit of unsettled land is in sight, and indeed but little land fitted for agriculture now remains unoccupied, save what can be reclaimed by irrigation and drainage - a subject with which this Conference is partly to deal. We began with an unapproached heritage of forests; more than half of the timber is gone. We began with coal fields more extensive than those of any other nation and with iron ores regarded - |