Fallacies of Free Trade.
How a Protective Tariff Benefits Farmers. Importance of the Farming Industry.
Agriculture is the largest and most important industry in this country. More people are engaged in it than in any other one occupation, and nearly twice as many as are engaged in manufacturing and mining. Although these latter interests are of vast importance to the prosperity of the country, and their products almost absolutely essential to the comfort and happiness of the people, yet, if entirely deprived of all manufactured articles life could be far better sustained than it could be without the products of the farm, the orchard, and the garden. The farmers, therefore, are the main pillars upon which society rests. They are the backbone of the Government, both physically and financially, for they not only provide the necessaries of life, but they pay a large portion of the taxes. Upon the intelligence, morality, and industry of the farmers largely depend not only the development of all other enterprises, but the future progress and even the permanency of the Republic. When the farmers are prosperous, manufacturers are prosperous also, but when the farmers get poor crops or low prices, manufacturing industries inevitably suffer. Hence the farming interests should be guarded and protected by the Government and by the people, and nothing should be done in the way of legislation that would in any respect be detrimental to these interests.
Number of People Engaged in Agriculture.
The population of the United States is now estimated at about 60,000,000. According to the statistics of the last census, about one-third of the entire population (or 20,000,000) are engaged in some gainful occupation, and one-seventh (or nearly 8,800,000) are employed in agricultural pursuits. About one-twelfth (or nearly 5,000,000) are engaged in manufacturing, mechanical operations, and mining; a somewhat larger number in professional and personal services; and about one twenty-fifth in trade and transportation. Each person engaged in active labor has, it seems, on an average about two others to support and those engaged in agriculture raise the grain, provisions, etc., to feed the entire population.
Is it not apparent, then, that the fewer people there are engaged in farming, and the more there are engaged in manufacturing and other occupations, the greater will be the demand for farm products, and the larger the profits which the farmer will be likely to secure? On the other hand, the more people there are engaged in farming, and the fewer in manufacturing and other occupations, the greater the quantity of farm products raised, and the cheaper they will be sold.
The total number of farms, as by the last census report, was 4,008,907; the number of acres in these farms was 536,081,835, and their value
3was estimated at $10,197,096,176. The value of farm, products was $2,113,402,564, of live-stock $2,000,000,000, and of farm implements $100,000,000. A vast number of farms have been located, within the last seven years, in Kansas, Nebraska, Colorado, Montana, Dakota, Washington, and other Western States and Territories. Allowing the ratio of increase since 1880 to have been as great as that of previous years, we now have over 4,500,000 farms, their value being about $11,000,000,000, and the value of farm products would be about $3,000,000,000, of live-stock over $2,500,000,000, and of implements $600,000,000; and the value of the fences, improvements, etc., would exceed $150,000,000. The census reports, doubtless, far under-estimate the value of farm products, for there is a large amount consumed by farmers and their families that is not properly considered or estimated when taking the census.
Extent and Importance of Our Manufacturing Industries.
Large and important as are our agricultural industries, our manufacturing industries are second only to them in importance, and even out-rank them in value of products. Allowing the same ratio of increase for our manufacturing industries that had taken place for a few years previous to the last census, there are now in this country about 300,000 factories, employing nearly 4,500,000 people, with about $4,000,000,000 of capital invested; and the value of our manufactured products amounts annually to nearly $8,000,000,000; an excess, it is said, ever those of Great Britain of more than $1,000,000,000 annually. How important to all, then, that our manufacturing industries also be encouraged and fostered by the Government, equally and side by side with our agricultural industries!
Relative Value of Our Agricultural and Manufacturing Industries.
By comparing the value of our agricultural with our manufactured products, we find that although there are nearly twice as many people employed in agriculture as in manufacturing, yet the value of manufactured products is estimated at nearly double those of agriculture. This is accounted for in a great measure by the extensive use of steam, water-power and machinery employed in manufacturing. According to statistics, the application of steam-power to machinery in this country, has added a force equal to 2,183,488 horse-power, and the added force of water-power is equal to 1,225,339 horse-power; making the increased force of steam and water combined equal to 3,408,827 horse-power. If we estimate one horse-power as equal to the labor of six men, these two forces have added a productive power equal to 20,452,962 men. The steam-power alone used in driving factories is equal to 15,110,928 men. It is said that the productive force derived from the steam engines and water and air of Great Britain, including her navy, is equivalent to the labor of 75,000,000 men.
The immense gain of power by the use of steam, water, and machinery is daily illustrated in our factories, where girls of fifteen are attending machines which in one day spin a thread 2100 miles in length — long enough to reach from New York to California. Fifty years ago nearly all the spinning in this country was done by the common household spinning-wheel. An active woman working ten hours a day could spin a thread only 3 8/10 miles in length, walking more than five miles in doing it.
Mr. Thomas R. Hazard, one of the earliest woollen manufacturers in this country, says:
"In 1816 I used to employ scores of women to spin at their homes at four cents a skein, by which they earned twelve cents a day at most. Inferior cotton shirtings sold then at fifty
4cents a yard, thus requiring four days' work of the woman to pay for one yard of cotton cloth, she boarding herself. The wool was carded into rolls at Peacedale and transported to and fro, on the backs of horses. Some time ago I stood in a manufactory in the same village, and took note of a stripling who tended two highly improved jennies, from which he was turning off daily as much yarn as six or seven hundred women formerly spun on wheels in the same time. In the mean time the introduction of labor-saving machinery and perfected skill had so reduced the cost of goods that a superior article of cotton cloth was then sold in the village stores for fifteen cents a yard, which formerly cost fifty cents a yard. So that had this boy spinner been paid the same price per skein that was formerly paid to a woman for an equal amount of work, he would have received as much material as could formerly have been earned by about two thousand hand-spinners in the same time."
Before the invention of the cotton-gin a man could clean only four pounds of cotton in a day. Now, by the use of machinery, he can clean 4000 pounds in the same time. A single boot and shoe factory in Massachusetts, employing 1000 men, will turn out nearly as many boots and shoes in a year, by the aid of steam and machinery as 30,000 French shoemakers. Some of our American factories will take the raw leather, and cut and make in twenty minutes, a pair of ladies' shoes ready for wear. It is true that farmers have also a great addition to their working forces in the machinery which is worked by horses, mules, and oxen, and lately by a modicum of steam-power also; but steam-power, as a productive force in manufacturing, is far greater than all these. As a force to add to our national wealth and to promote the prosperity of the people, manufacturing, if possible, out-ranks all other industries.
Steam-power and machinery add more than one billion of dollars to our productive force in manufacturing every year independent of human exertion. Foreign countries gain this wealth when they do our manufacturing for us.
The force employed in trade and transportation is not a productive force to any great extent, it being engaged simply in the exchange of articles already produced by those engaged in agriculture, manufacturing, and mining.
Agriculture and manufacturing, then, are the great forces at work to develop the resources of this country — one providing food and material for clothing, and the other producing the clothing and other necessaries and luxuries of life, for the whole people. They are industries that go hand in hand, and neither can prosper long without the other. Now let us see how these most important industries are affected by the tariff.
Importance of the Tariff Question.
The tariff question is one of far greater importance to the nation, as well as to farmers, than most people, or even the farmers themselves, are aware. It is a governmental policy that affects every industry in the country either favorably or unfavorably, and upon no industry does it exert a greater influence than upon agriculture. It is a question not well understood, for the reason that far too many have received their information upon the subject from books, pamphlets, and literature furnished by the Cobden Club of England, and its ally, the Free-Trade Club of New York. These documents, issued in the interest of foreign capital and foreign manufacturers, have placed before our people falsehood disguised in the garb of truth; and it is for the purpose of stripping off the mask from their false theories and presenting to the people, especially to the farmers, facts and figures that will give them correct ideas and a better understanding of the influence of a protective tariff upon their prosperity, that this pamphlet is issued. If a high tariff is a benefit to farmers, they should understand why it is so, and exert every influence to maintain it. If it is an injury to farmers, they ought to know it, and it should be abolished.
Why Protection Will Best Promote the Prosperity of Farmers.
It will readily be admitted that the most essential requisites to prosperity among farmers are, first, good health; second, good crops; third, good prices for what they have to sell; fourth, reasonable prices for what they have to buy; fifth, cheap and convenient transportation.
Most people would assert that neither a protective tariff nor free trade could have any special influence in securing either good health or good crops; but a careful consideration of the subject will show that they do exert an important influence on both.
Prosperity in business is conducive to good health among all classes. When business is dull and people are losing money, the effect upon health is decidedly injurious. Thousands of business men lose their health and go into early graves through losses and failures in business. Hundreds of thousands of farmers have borrowed money either to purchase farms, or to erect buildings and make improvements, giving mortgages at high rates of interest, with the expectation of being able to pay off those mortgages when they became due, but in consequence of poor crops or low prices many thousands have had their farms taken from them by foreclosure, and have lost not only their health and property but even their life by such misfortunes.
That a protective tariff tends to promote manufacturing industries is admitted (as we shall show), even by some of the most prominent free traders of the country, and it is self-evident that the building up of manufacturing industries promotes general prosperity, and that general prosperity increases the value of farms, and the demand for farm products. This increased demand necessarily gives the farmer better prices, which is not only conducive to good health, but also to good crops; for good prices make him cheerful and contented, which tends to keep him in good health, and they also give him MORE MONEY with which to purchase fertilizers and thus enrich the soil, upon which good crops so largely depend.
The prices farmers get for their products, as well as the prices of the manufactured articles they buy, are mainly dependent upon the law of supply and demand. Anything which increases the demand for farm products tends to give the farmers better prices. Anything which increases the supply of manufactured products tends to make those products cheaper. A high tariff induces capitalists to construct factories and establish manufacturing industries which create an increased demand for laborers, and give them better wages. This draws laborers from agricultural into manufacturing industries and makes them consumers instead of producers of farm products. This directly benefits farmers not only by creating a greater demand for their products, but it gives them a home market which insures better returns, and at the same time home factories increase the supply of manufactured articles which the farmer has to buy, and thus lessen the price of those articles.
A careful examination of the census reports of our industries from 1850 to 1870 will furnish valuable information as to the effect of a high tariff upon our manufacturing industries. From 1850 to 1860 was a period of low tariff, while from 1860 to 1870 was one of high tariff. Between 1850 and 1860 the number of factories in this country increased only 17,130, while between 1860 and 1870, the increase was 110,122, or more than six times as great as in the previous ten years.
The increase of capital invested in manufacturing enterprises from 1850 to 1860 was $471,070,868, while the increase from 1860 to 1870 was $1 01,592,733, or nearly two and one-half times the gain of the low-tariff period.
The increase in the number of hands employed in the low-tariff period was only 350,388, while in the protective period it was 738,916, or more than double the former increase.
Again, the increase in wages paid the working classes between 1850 and 1860 was $140,742,080, while the increase during the period from 1860 to 1870 was $394,828,478, or more than double the gain.
The increase in the value of raw material used during the ten years of low tariff was $464,091,034, while that during the ten years of high tariff was $1,450,202,181, or more than three times as much.
Lastly, the increase in the value of manufactured products between 1850 and 1860 was $861,014,249, while the gain during the ten years of high tariff between 1860 and 1870 was $2,334,784,414, or nearly three times that of the low-tariff period.
Now when we take into consideration the fact that during this period of high tariff the Government was carrying on one of the most gigantic wars ever known in history; that the labor of nearly 2,000,000 of our people was diverted from the creative industries of times of peace to the destructive operations of war; that throughout nearly one-half of the entire country our manufacturing industries were almost entirely suspended, and that the people were taxed to the utmost in every way to provide material to subdue the rebellion and pay the war debts — this growth in our manufacturing industries, during such trying times, was simply marvellous; and that this marvellous growth did not continue through the next decade is due to the fact that changes were being made in our currency (in restoring a specie basis) which resulted in the panic of 1873 and the subsequent hard times, and also that the tariff was at the same time being reduced.
These facts alone ought to satisfy every one, and more especially every farmer, that a high tariff is just what is essential to the promotion of the general welfare and prosperity.
Statements of Prominent Free-Traders Admitting That a High Tariff Stimulates Manufacturing Industries.
The fact that a high tariff does promote manufacturing enterprises is freely admitted by even such prominent free-traders and low-tariff advocates as Hon. A. S. Hewitt, David A. Wells, Senator Bayard, the Tammany Hall Society, many of our free-trade members of Congress, and correspondents of some of our leading papers.
The Hon. A. S. Hewitt, in a speech which he delivered in Congress on the subject of "The Emancipation of Labor," makes the following statements:
"1. Protective duties stimulate industry, we are told; and they do so until the market is fully supplied. Business rapidly increases where there is a monopoly of the market.
"2. I say that protection creates over-production; that over-production is the logical and unavoidable result of protection. Then when you have over-production, what is the consequence? You have a limited market; it is walled in by the tariff; there is no access to the outside world.
"3. Under the beneficent laws of God, production is a blessing. Good harvests mean comfort and happiness to the people. A large crop of pig-iron if I may use the phrase, means the progress of great industrial enterprises.
"4. To-day the farmer cannot produce wheat at the prevailing prices and pay his expenses. The only chance that is left for him is that manufactures shall be established in his neighborhood and give him thereby a market for his produce, saving the cost of transportation. But manufactures cannot grow in a market already overstocked."
In a letter to the Albany Argus, Mr. Hewitt said:
"The cause of the present depression of the iron industry is to be found in the fact that the capacity for producing iron is in excess of its actual consumption. When the supply exceeds the demand prices fall. We are suffering from unnatural stimulation, which aggravated the excitement when the public interest required that it should be allayed, and now aggravates the depression by the excessive capacity for production which it engendered."
Again, in a letter to the Tammany Hall Free-Trade meeting, Mr. Hewitt said:
"In a recent hearing before the Committee of Ways and Means, it was conceded that the capacity to produce manufactured goods in this country largely exceeds the demand of the
7home market, and that no relief could be expected until the demand should increase either at home or by opening foreign markets now closed to our products." And further, "When it becomes apparent by the fact that manufactured goods are regularly sold below the price at which they can be imported with the duties added, that protective duties have lost their efficacy, then a reduction of duties will be assented to even by the manufacturers themselves."
Mr. David A. Wells, a member of the Cobden Club and a special champion of free-trade, in a speech at Cooper Institute, said:
"In respect to our so-called manufacturing industries, it is only necessary to refer to the general complaint that business, though large, is, through excessive competition, conducted with little profit; that a very large percentage of that small part of our manufactures which can be subjected to foreign competition, and which has been stimulated by high protection has either suspended wholly, like many of the iron furnaces and rolling-mills, or has in a measure curtailed production without avoiding heavy losses, like those of cotton, wool, and silk; that manufacturers in certain lines of the two last-named articles especially have only been able to dispose of their surplus stocks by forced sales at auction, and at prices less than the cost of production."
In a speech at a Delmonico Free-Trade dinner, Mr. Wells said:
"We have carried our capacity for production far in excess of our capacity for consumption, and have in every department a store of goods that cannot be sold at a profit, or even at cost. The result is, stagnation of our industries, limited employment, and reduction of wages."
Senator Bayard, in a letter to a Tammany Hall meeting, said:
"With a producing power of manufactures and supply equal to double the demand of home consumption, what can ensue but a glutted home market? This state of things is the logical and necessary result of the tariff system based upon excessive and indiscriminate taxation upon all the products of foreign nations which enter into our consumption either for manufactures or otherwise."
A plank in the Tammany Hall platform says:
"The excessive tariff stimulates the industries which it protects into disastrous over-production."
A prominent free-trader, writing to the Elmira Husbandman, says:
"The stimulus of high protection leads to excessive production. The market is overstocked, prices are temporarily depressed below the cost of the foreign articles, and importation ceases."
These statements of prominent free-traders clearly admit the truth of one of the legitimately beneficial results of protection. The advocates of a protective tariff claim that it stimulates manufacturing enterprises until competition between our own manufacturers increases the supply of goods to the point where the cost to the consumer is reduced as low and even lower than would be reached under free-trade.
These free-traders, however, make the above statements for the purpose of showing the injurious effects of a high tariff upon business. They say that "protection leads to over-production and stagnation;" "it walls in our own products;" but on these points we have facts and figures to show that they are wrong. While a high tariff has stimulated manufacturing, the country has not suffered from over-production of home products, as they claim; and the positive proof of this is found in the fact that during the past ten years, according to official reports, there have been brought into this country and sold to our people foreign products amounting to $5,973,253,453, and during the last three years to $1,880,661,158, and during the last year to $635,430,136. Is it not evident, therefore, that if there has been over-production, it is of imported goods, and not of those which have been manufactured in our own country; and that, instead of a protective tariff being the cause of over-production by "walling in" American products, the tariff "wall" has not been high enough to keep out this enormous influx of foreign manufactured articles?
As we have before stated, the price which the farmer receives for his products, and the price which he has to pay for manufactured products, depends upon the law of supply and demand; and, as a high tariff, by building up factories, by giving employment to millions of laborers, tends to increase the demand for what the farmer has to sell, and also increases the supply of those products he buys, do not these facts furnish positive proof to the farmer that a protective tariff is an advantage to him?
Free-traders point to the low price of manufactured articles in foreign countries, and tell the farmers if it were not for the tariff they could buy these goods at foreign prices with freight added; but they never intimate to them that the reason prices are so low abroad is because of the enormous increase of supply caused by home production in this country under protection, and that if it had not been for our high tariff these goods would be dearer in foreign countries than they are here.
High Tariff Develops Cheap Transportation.
That a protective tariff has a tendency to give the farmers cheaper transportation, there is abundant proof. In the first place, if the farmer has a market for his produce near his own door, and if the manufactured articles which he buys are made in his own town, county, state, or country, the cost of transportation is evidently far less than it would be if he sells and buys in a foreign market. The nearer the producer and consumer can be brought together the less is paid for transportation, and the less the profits of production are absorbed by middlemen. Every farm located near a great manufacturing city or community is, on this account, worth far more than farms located farther away, where the cost of transportation is greater.
Again, a high tariff stimulates the construction of cheap transportation routes. By making all kinds of business prosperous a demand is created for a greater number of railroads and increased facilities for moving freight. The more railroads we have, and the more water and other means of transportation, the less the cost of transporting farmers' products, as well as manufactured goods. There is no country in the world where there are so many railroads as in this, and no country where the freight rates are so low. The increase in the mileage of our railroads since the high tariff of 1861 and 1862 has been enormous, almost 100,000 miles having been built since that time: there were nearly 30,000 miles of railroads built from 1880 to 1882.
In 1865 the average charge per ton per mile for moving merchandise over the New York Central and Hudson River Railroad was $3.27 in gold. In the year 1885 the average charge per ton per mile on the same road was 68 cents, a decrease since 1865 of $2.59 per ton in gold.
The United States also builds more ships than any other nation in the world except Great Britain. Our vessels, however, are nearly all used along our coast and on our inland waters for transportation in our domestic commerce.
A Protective Tariff Increases the Value of Farm Lands.
That our manufacturing industries, which a protective tariff has developed, tend to increase the value of farm lands, raise the price of farmers' products, and increase the annual income of farmers, is very clearly shown by the census report of 1880. Mr. J. R. Dodge, Statistician of Agriculture, in his report for 1883, says:
"The farmer feeds all; but when all are farmers he can only feed himself, which is a necessary operation, but not a lucrative business. This would seem to be a self-evident truth, but extensive districts fail to appreciate it, and cherish the pernicious fancy that home markets are unnecessary, or that distant markets, thousands of miles away, are as good as those near at hand.
"Miners, mechanics, and especially artizans and operatives engaged in productive occupations, are of vast benefit to agriculture for two reasons:
"1. They augment the numbers to be fed, and increase agricultural values.
"2. They make something themselves which farmers need, and reduce price of commodities hitherto brought from a distance at unnecessary cost."
On pages 28 and 29 of Report IV., New Series of our Agricultural Reports, Mr. Dodge divides the United States and Territories into four groups, the first including those States wherein 30 per cent. of the people
9are engaged in agriculture, and 70 per cent. in manufacturing and other occupations; second, those having more than 30 and less than 50 per cent. engaged in agriculture; third, those having 50 and less than 70 per cent; fourth, those having 70 per cent. and over — these latter being almost exclusively agricultural States.
An examination of these tables shows that in the first group, of seven States, where the greatest amount of manufacturing is done, the average value of land per acre is $47.34; in the second group, of seven States, land is worth $33.71 per acre; in the third group, of four States, $19.70 per acre; in the fourth group, of nineteen States, it was only $9.01 per acre. Mr. Dodge's tables also show that in New Jersey, situated between the great cities of New York and Philadelphia, the largest manufacturing centres in the United States, the average valuation of all the land is $65.16 per acre; while in those States where there is the least manufacturing, farm lands are worth less than one-fifth as much.
Mr. Dodge also shows that if the counties in the different groups of States are placed in two groups, one containing those with the largest number of factories, and the other those having the least, the price of land is nearly twice as high in counties where the most manufacturing is done as in those where there is the least. In those counties in New Jersey where the greatest number of factories are located, the price of land averages $96.46 per acre, while in those having the least, it averages $60.65. In Pennsylvania, in counties having the most, it averages $57.87 and the least, $34.55. In the first group of States the average value of land in the counties with the most factories is $71.85, while in those counties with the least, it is only $40.33; in the second group it is $43.54 with the most, and $32.03 with the least; in the third group, $32.90 with the most, and $17.14 with the least; in the fourth group, $21.95 in counties with the most, and only $8.27 with the least.
How a High Tariff Increases the Farmers' Income.
The agricultural reports also show very clearly that the average annual income of farmers is much greater in those States where the most people are engaged in manufacturing and other occupations, and the fewest engaged in farming.
In the first of the four groups of States before mentioned, where the greatest amount of manufacturing is done, the average annual income of farmers is about $457; in the second group it is $394; in the third, $261, and in the fourth, $160. These are facts worthy the careful consideration of every farmer. If a high tariff is necessary to promote manufacturing industries, and manufacturing industries double or triple the annual income of the farmer, is not a high tariff just what the farmer requires to promote his prosperity?
Again, the agricultural laborers, or "hired men," in the States where the largest amount of manufacturing is done, secure higher wages, for, as the farmer has a larger income, he can afford to pay more. The following are the average wages per month paid to agricultural laborers in each group of States: In the first group, the average wages arc $24.14 per month; in the second, $23.51; in the third, $19.51; and in the fourth, $13.67. The wages of employees in the manufacturing industries, and in other occupations, is also increased in those States where the most manufacturing is done. The beneficial influence of manufacturing enterprises upon the farmers is very clearly stated by the Commissioner of Agriculture. On pages 296 and 297 of his report he says:
"The industries thrive together; it is next to impossible to touch one without affecting the others. While agriculture is a foundation interest on which others are based, and by which the others are supported in the sense of furnishing the alimentation on which their labor is performed to reach its highest estate in the midst of varied industries.
"More than half the people of Virginia are farmers, while only one in five of the Pennsylvanians are engaged in agriculture. Does the greater number in the former State make a greater demand for land and a higher price by reason of the competition? No; the competition is between one farmer and another in the sale of produce for which there is no near market; and the cheapening of products also cheapens the acres on which they have grown. Hence, while farm lands in Virginia are valued at $10.89 per acre, those in Pennsylvania command $49.30; so says the census of 1880. It also says that the average farm-worker of Virginia produces crops worth $180, while the Pennsylvania farmer gets $431. Why is this? Because of the other four mouths seeking to be filled and competing for the supply. Besides, high prices are a stimulus to large production, and fertilizers are more abundant in a district full of towns and villages. We see similar causes producing like effects in other States, and in other countries throughout the working world. It is the result of a natural law which may be formulated thus: Values in agriculture are enhanced by increase of non-agricultural population."
The American farmers should consider the question as to whether they want the value of their farms and their annual incomes cut down to a level with those in the States and counties that have less manufacturing than their own, before they cast their votes for Members of Congress who are in favor either of free trade or any reduction of duties on foreign imports; for a reduction of duties will inevitably bring about this result.
Advantages of a Home Market Over a Foreign.
A home market for farm products is far more profitable than a foreign market, for the following important reasons:
First. It furnishes a market for those perishable products, such as milk, butter, eggs, poultry, garden vegetables, berries, and many fruits, which cannot be sent to distant markets.
Second. A home market saves the cost of transportation. It is estimated that it costs every third cargo to send corn to England, and every fourth cargo, to send wheat.
Third. It saves the commissions of middlemen, giving the profits of both sides of the trade to our own people, and thus keeps the money at home. This is an item of great importance to the agricultural population, and of still greater to the whole nation.
Our domestic trade is, and always has been, of far more importance than our foreign. While our foreign trade amounts to only about $1,500,000,000 a year, our domestic trade is over $40,000,000,000. The value of our domestic trade is very clearly stated in a recent number of the Bankers' Magazine, as follows:
"The domestic trade of the Mississippi Valley, although only half the domestic trade of the United States, is twelve times the foreign trade of the whole country, and is larger than the entire international trade of the world. When we consider that our domestic trade, of which we get the profits on both sides, would be, if merely equal in amount, worth double our foreign trade, of which we get the profits of only one side, it is obvious that our foreign trade is of comparatively insignificant importance, and that it is the height of absurdity to magnify it as the greatest object of American statemanship. We should be better off if four fifths of the foreign trade we now have were changed into domestic trade — this is especially true of our trade with Europe. We buy very little there which cannot as well be produced at home. If the articles which we do buy there were, in fact, produced at home, the laborers employed in producing them would furnish more profitable consumers for the food we raise than the laborers now producing them abroad. The great extent, wide range of climate, and diversified resources of the United States, combine to indicate that the development of its domestic trade with a substantial indifference to foreign trade is its true national policy."
It has been ascertained that about 92 per cent. of the products of this country are consumed at home, and only 8 per cent. sent abroad. As before indicated, the closer the producer and the consumer are brought together, the more the profit to the producer, the less the cost to the consumer, and the less the profit to the middleman. If the farmer's products are sold in a foreign market, the purchaser here makes a profit, the purchaser on the other side makes a profit, and to this must be added the freight; whereas, if he takes his products directly to the consumer, near his own home, these two profits as well as the freight, are saved, and the money which otherwise would be made by transporters and dealers on the other side is kept in this country to be spent within our own borders.
We have shown that high duties foster manufacturing industries, which, wherever located, supply a home market. We have also shown that a home market increases the value of farms, increases the farmers' annual income and the wages of farm laborers, and, as it brings the producer and consumer closer to each other, thus saving immense sums in transportation, is it not evident that it is for the interest of every farmer in this country to encourage high duties and home manufactures?
Farmers, and others as well, should also purchase goods of American manufacturers in preference to foreign, when they can be obtained at as reasonable rates, for by so doing they increase the demand for manufactured products here, and this demand calls for an increased supply, which eventually reduces the cost to the consumer both at home and abroad. There is still another benefit to farmers in patronizing home manufactures: our own products add greatly to the national wealth, while foreign products do not. To illustrate: If we raise in this country $100,000,000 worth of agricultural products which seek a foreign market, and we receive in exchange $100,000,000 of foreign manufactured products, we have only added $100,000,000 to the national wealth; whereas, if we produce $100,000,000 of agricultural products and exchange them for $100,000,000 of manufactured products made in this country, we have added $200,000,000 to the national wealth; in other words, we grow rich twice as fast as a nation, if we produce our own manufactured goods, as we do when we buy them of foreigners; and whatever adds to the national wealth, adds to the value of farms and farm products, and hence materially benefits the farmers themselves.
The advantages of manufacturing, to farmers, are clearly recognized by those owning farms located near some factory employing say 500 men, each earning $10 per week. These 500 men have on an average two persons besides themselves to support, making 1500 mouths to feed by the products of the farmers in that vicinity.
The wages of 500 men at $10 per week amounts to $5000 per week, or $260,000 a year. This money is spent mainly among the farmers and trades-people of the town. Now let that factory from any cause be closed and these people forced to leave the place, or go into farming, and see what a difference it would make in the activity of the town, in the amount of products the farmers would be able to sell, in the prices they would get, and in the amount of money spent in the place. The value of every farm and the income of every farmer is increased when the factory is running, and the price of farms and the income of the farmers is diminished when it is closed.
New York City is supposed to be the largest and best market in the country. It has about 260,000 employees in factories, who, with their families, constitute nearly two thirds of its entire population. Its manufactured products in 1880 amounted to $472,926,437, which was $8,326,220 more than those of all the New England States. Shut up the factories in New York City and it would soon lose its prestige as one of the greatest manufacturing depots in the world, and as the best market. Free trade would shut up a large portion of these factories, and drive the employees into agriculture, making them competitors in producing, instead of consumers of farm products.
A Protective Tariff Lessens the Cost of Manufactured Articles.
Free-traders assert that American consumers, owing to our high tariff, have to pay for manufactured products the price of the foreign article with the amount of freight and duty added. The advocates of protection, on the contrary, can show that although the tariff may temporarily increase the cost of manufactured goods, yet by establishing
12factories here, the competition between our own manufacturers enables the consumer to buy his goods just as cheap, if not cheaper, under a high tariff than under free trade. As we have before stated, the cost of articles to the consumer depends mainly upon the supply and demand. We have already shown, and have also given the statements of some of the leading free traders of the country to the same effect, that a protective tariff stimulates the manufacturing industries of the country, and by so doing, very largely increases the supply of manufactured articles; and that competition between American manufacturers has reduced the cost to the consumer in many instances below the cost at which the foreign article is sold. Every factory started in this country has a tendency to increase the supply, and thus lessen the cost of the articles produced, not only to American consumers, but also the price of the same article in foreign markets.
The following table contains a list of a few articles in common use, and shows the retail price here as compared with that in England:
|ARTICLES.||Price in England.||Price in U. S.|
|Common hand-saws, per doz||$6.00||$5.00|
|Jack planes, "||15.00||10.00|
|Brass cocks, "||6.00||5.25|
|Brass butts, "||1.48||.72|
|Cast butts, "||1.24||1.00|
|Strap hinges, "||1.48||1.00|
|Wrought iron hasps and staples, per doz.||.72||.65|
|Currycombs, per doz||2.48||.90|
|Brick trowels, per doz.||8.24||7.50|
|Fry pans, iron, tinned, per doz||4.48||4.25|
|Cast-steel Shears, "||6.00||4.20|
|Door Knobs, mineral, "||2.48||1.00|
|Carriage bolts, per gross||2.12||1.57|
|Coffee mills, box, square, each||.84||.67|
|Enamelled kettles, 4 qts. each||.66||.50|
All kinds of cotton, and the common grade of woollen goods are sold as cheap here as in England.
How a High Tariff Encouraged Production and Lessened the Cost of Steel Rails.
The influence of a protective tariff in reducing the cost to consumers is very clearly shown in the establishment of the steel-rail industry in this country. Steel rails were first made here in 1867; the following table shows the number of tons manufactured each year, the average price per ton from 1867 to 1885, and the rate of duties that has been paid on them at different periods.
From this table it will be seen that in the year 1867 there were only 2277 tons of steel rails made in this country. The price per ton at that time was $166, the duty 45 per cent. ad valorem, or $74.70 per ton. Under this high tariff the production of steel rails rapidly increased, so that in 1870 there were 30,357 tons made, and the price had gradually gone down to $106.75 per ton. Congress then reduced the duties from 45 per cent. ad valorem to $28 per ton, a reduction of $46.70 per ton from that of 1867. Under this reduced tariff, which was still protective, the production increased so that in the year 1872 we produced 83,991 tons, yet the price, instead of going down after the reduction of duties, went up to $112 per ton. In 1872 Congress again reduced the duties to $25.20 per ton, and the following year the price went up to $120.50, an advance of $8.50 per
|YEAR.||Product in gross tons.||Price in currency.||Duty.|
|1867||2,277||$166.00||45 per cent. ad valorem|
|1871||34,152||102.50||$28 per ton to Aug. 1, 1872|
|1873||115,192||120.50||$25.20 per ton to March 3, 1875|
|1884||996, 983||30.75||$17 per ton from July, 1883.|
ton, and there were 115,192 tons made. The tariff of $25.20 per ton remained in force until March, 1875. It was still protective, and the production increased to 259,699 tons, but owing to the panic of 1873 railroad building was greatly depressed, and hence, under the great competition, the price of steel rails rapidly went down to $68.75 per ton. In 1875 Congress raised the duties to $28 per ton, which duties remained in force until July 1, 1883; that year, instead of increase in price, we produced 1,148,709 tons, and the price was reduced to $37.75 per ton. Owing to the general stagnation in business and decrease in demand for steel rails, in 1885 the price went down as low as $27 per ton, and some were sold even at $25 per ton; this shows a reduction in the price of steel rails since the increase of tariff of March, 1875, of more than $40 per ton. Three years ago, Congress again reduced the duties from $28 to $17 per ton, and we find that since this reduction of duties, the price, although fluctuating, has again gore up to $38 per ton in 1886. Under a reduction of duties amounting to $11 per ton, prices have advanced from $27 to $38 per ton, an increase of $11 per ton, just equal to the amount of duties taken off; and what is more, in the year 1882 there were made in this country 1,284,067 tons of steel rails, but under this reduction the production has decreased to 959,471 tons, a falling off of 324,596 tons a year.
The production of steel rails under protection has grown so enormously that we now manufacture more than any other country in the world. Competition has been so sharp that prices have declined from $166.70 per ton to $38. The importation of steel rails has also declined from 182,135 net tons in 1882, to 2395 tons in 1885. Importations under the rise in prices are now increasing again. It is estimated that more than $1,800,000,000 worth of steel rails have been made in this country, and the money which this vast production has cost has been kept at home to build up our own towns and cities; other important industries have also been developed by means of it, which give increased employment and higher wages to American laborers, and these laborers have furnished a market for vast amounts of agricultural and manufactured products. Do not these facts and figures show that a protective tariff has been an advantage not only to the manufacturers of steel rails, but to the employees in the factories where they are made? And has it not also benefited farming and all other industries as well?
The average price of pig-iron also, has been lower under the high tariff of 1861, and later, than it was for many years previous to that time. During the thirty-five years from 1824 to 1859, most of which time we
14were under a low tariff, the average lowest price was $33.45 per ton, while the average lowest price for twenty-three years from 1860 to 1882, inclusive, a high tariff period, has been only $29.52 per ton. In the year 1850 we manufactured 564,755 tons of pig-iron, while in 1883 we made 5,146,972 tons net, and in the latter year we also imported 490,875 tons. Since the reduction of duties in 1883, the production of pig-iron has fallen off, in 1885. 1,133,595 tons. Such an enormous production as we had in 1883, and the depression of business consequent upon the reduction of duties, must, of course, materially affect prices, because the demand did not keep pace with the supply; hence the decline.
In 1886 we surpassed Great Britain both in production of steel and consumption of iron.
An Increase of Duties Needed on Many Articles.
Many articles consumed in this country are sold at high prices, solely because they are not manufactured here. The reason we do not manufacture them is, it requires so much labor to produce them that the duties are not sufficient to enable our manufacturers to compete with foreigners who can secure labor at much less rates than can be done in this country. If the duties on these articles were higher, capital would be invested in manufacturing them, and the competition between our own manufacturers would soon increase the supply to such an extent as to reduce the price and enable our people to buy them cheaper than now, and this would also, as before shown, reduce the price in foreign countries.
Tin plate is not made in this country, and cannot be unless higher duties are placed upon it. A few years ago, the price was $9 per box. Manufacturers in Demmler, Penn., thought the price was such that it could be made here at a profit, notwithstanding the low tariff, and several factories were started for that purpose. European manufacturers saw that their trade was likely to be interfered with, and at once reduced the price to $7 per box, but as this was not low enough to close our factories, it was soon sold at $5 per box, and our manufacturers were compelled to suspend operations; the price has since advanced to about $6 or $7 per box, and we are entirely dependent upon foreign manufacturers for our supply of tin plate. We import about 4,241,040 boxes a year, which, after it is delivered here, is worth about $21,450 000. If a tariff of 2Ë cents per pound was placed upon tin plate, the industry would soon be built up in this country, so that we should manufacture nearly all that we consume, and the twenty one millions of dollars now sent out of the country to build up foreign cities and towns, and improve the value of farms in foreign countries, would be kept at home to improve the industries here, which would, as we have shown, raise the value of farm lands by giving employment to a large number of workmen and making them consumers of farm products instead of producers.
Our farmers have been made to believe that because articles sell cheaper in England than here, they would sell as cheap here if we had free trade, but they would not; it is our high tariff which, by stimulating increased production and increased supply in this country, has reduced the price in foreign countries as well as here. Reduce the tariff and English manufacturers will sell their goods here for a time at cost, or even less for the purpose of breaking up our manufacturing industries, and securing for themselves a monopoly of our market. This being accomplished, they would then raise the price and make us pay even more than we are now paying. As an independent people we cannot afford to be dependent upon foreign countries for our supply of the necessaries of life. In case of war or of any difficulties with foreign countries, or any interference with our commerce, we are at the mercy of foreigners, unless we have industries of our own. The true policy for Americans is to be independent
15of foreigners in everything, and this can only be done by placing high duties on foreign products, so as to foster and promote our home industries. But even if we had to pay more for manufactured articles under a high tariff than under a low, it would be far better for the American people to encourage home production. We have shown how factories improve the price of farm lands, and increase the income of the farmers and the wages paid to laborers in manufacturing districts; and this, of itself, would enable farmers to pay more for what they had to buy; but the truth is, farmers can buy cheaper, under protective duties than under a low tariff, as the following figures will go to prove:
Prices Under a Low and Under a High Tariff.
The following table compares the prices of certain articles in 1860 under a low tariff with the prices in 1886 under a high tariff:
|Pair Middlesex bed blankets, net, wholesale||$2.7500||$2.5500|
|Norway plain all-wool bed blankets, wholesale||4.0000||3.7500|
|Made-up horse-blanket, burlap lined, wholesale||2.0000||1.2000|
|Samples fancy cassimeres, 27 in. wide, wholesale||.6500||.5000|
|N. Y. Mills blenched shirtings||.1550||.1000|
|Cocheco and Mernmack prints||.0931||.0543|
|64x64 print cloth||.0544||.0350|
|4-4 heavy brown sheeting||.0850||.0750|
|4-4 bleached sheeting||.1250||.1000|
|4-4 common bleached sheeting||.0950||.0650|
|Lining, colored cambrics||.0650||.0500|
|Good twilled flannels (wool)||.3600||.3600|
|Good Kentucky jeans||.2750||.2750|
|Men's rubber boots .... per pair||3.6000||3.000|
|Boys' rubber boots .... "||2.4000||2.1800|
|Women's rubber boots .... "||1.7500||1.5600|
|Men's overshoes .... "||.8000||.5500|
|Women's overshoes .... "||.6000||.3800|
|Men's best calf machine-sewed boots .... "||4.0000||3.0000|
|Men's best calf pegged boots .... "||3.0000||2.7500|
|Men's good common calf pegged boots .... "||2.5000||2.1700|
|Men's best calf machine-sewed Congress and Balmoral .... "||3.5000||3.0000|
|Men's good common pegged Congress and Balmoral .... "||1.6000||1.0000|
|Men's good common low cut shoes .... "||1.1700||1.0000|
|Men's carpet slippers .... "||.5000||.3750|
|Women's best kid and goat boots .... "||2.0000||1.7500|
|Women's best serge Congress .... "||1.2500||1.0500|
|Women's grain pegged Polish boots .... "||.8730||0.8500|
|Women's serge slippers .... "||.5000||.3750|
|Boys' good kip brogans .... "||.8000||.7500|
|Misses' best kid or goat polish .... "||1.5000||1.2500|
|Misses' good common button .... "||.7500||.7500|
|Children's cheap shoes .... "||.2500||.2000|
|Fitchburg all-wool cassimeres, 27 in. wide, wholesale .... per yard||1.0500||.9200|
|Hall & Frost cassimeres, 27 in. wide, average, wholesale .... "||.5100||.4200|
|Fancy cassimeres, 27 in. wide, wholesale .... "||.6500||.5000|
We could increase this list of articles largely, thus snowing that the cost of very many goods has been reduced under a high tariff. The last report of Foreign Commerce and Navigation states that the present average rate of duties is only 30.29 per cent, which is scarcely half as high as at some periods of the country's history. From 1819 to 1824 the average was 36.34. The Tariff Act of 1824 placed it at 50.21. In 1829 it was 54.18; and in 1830, 61.69.
Protection Benefits American Wool-Growers.
Since the adoption of the high tariff of 1861 and 1862 a large majority of the American farmers have engaged mare or less extensively in wool-growing. The tariff of 1867 especially favored our wool-growing industry,
16and it has increased enormously under it. The census reports show that there were in 1840, 19,311,374 sheep, which produced 42,802,114 lbs. of wool. In 1860 there were 22,471,275 sheep, and 72,571,343 lbs. of wool, an increase in twenty years under a low tariff of only 3,159,901 sheep and 29,769,229 lbs. of wool. In 1880, however, the census shows 42,192,074 sheep and 240,861,757 lbs. of wool., an increase over 1860 of 19,720,799 sheep and 168,290,414 lbs. of wool. It will thus be seen that during twenty years of high tariff we gained 16,570,898 sheep and 138,521,185 lbs. of wool, more than we gained under twenty years of low tariff. The number of sheep in 1885 was estimated at 50,360,343, and the wool clip at about 320,000,000 lbs.
The wool industry in this country represents the value of over $150,000,000 in sheep, $80,000,000 in wool, and $40,000,000 in mutton. There has been, during this period, a very great improvement in the breeds of sheep and the weights of fleeces. While in 1840 the census gave the average weight of fleeces at 1.85 lbs., in 1880 it was placed at 4.79 lbs.
Nearly every pound of wool produced here is consumed in our factories, and still our wool-growers cannot supply the demand, about one-fifth of the wool we use being still imported. The price of wool, notwithstanding the enormous increase in production, ranged very much higher during the period of twenty years of high tariff than the twenty years of low tariff. The average price of wool of medium grade for the low tariff period was 40Ë cents per pound, while for the same grade during the high tariff period it has been 55Ë cents. When we consider the great increase in the weight of each fleece, and an increase in price of nearly fifteen cents per pound, together with the enormous increase in the number of sheep and pounds of wool, the farmers must see that a high tariff is of immense benefit to the wool-growers of this country.
The reduction in tariff that took place in 1883 was a material injury to our wool industry. It unsettled and disarranged the market, so that prices of wool in some sections fell off more than twenty-five cents per pound, and sheep more than a dollar per head. The average price of sheep in 1883 was $2.53, while in 1885 it was only $2.14. The amount of wool produced in 1886 was 11,713,345 lbs. less than in 1884, and this falling off is mainly in the older States, where the finest and most valuable quality of combing-wool is produced. As the production of wool has fallen off, the importation has greatly increased. In 1885 the importations were 70,596,170 lbs., valued at $8,879,923; while in 1886 we imported 129,086,958 lbs., valued at $16,746,081. The value of manufactured woollen goods imported in 1886 was $35,766,559; if our own factories had made these goods, it would have caused a demand for upwards of 50,000,000 lbs, of wool more than was produced here, which would have greatly increased the price of wool, and would have required the fleeces of more than 10,000,000 more sheep. The wool-growers must see that the success of their industry depends largely upon a high tariff, not only upon wool but upon woollen cloths, for every yard of woollen cloth imported and sold in this country tends to lessen the price which American farmers get for their wool, and to increase the price which Australian and South American wool-growers get for theirs.
Mr. W. G. Markham, a leading wool-grower, says:
"The importation of manufactured wool is more detrimental to the wool-growers than the same amount imported in the raw state, for the operatives here engaged in manufacturing are at the same time consumers and increase the demand for wool."
When Western farmers buy foreign woollen goods they bring Australian and South American wool directly in competition with their own, and they degrade their own market while up-building the market for foreign wool-growers. In 1860 our manufacturers used 80,386,772 pounds of
17wool, nearly one-half of which was imported. Now they require more than four times as much, four fifths of which is produced by American farmers. Give American farmers a higher tariff on wool and woollen goods, and it will not only increase the profits of wool-growers in this country, but it will increase the demand for all farm products, enhance the value of every acre of farm land, and at the same time give them a supply of woollen goods at cheaper, rates than now. Take the tariff off, and while, for a time, the immense importation would lessen prices, it would also destroy our industries and reduce the income of farmers and the wages of workingmen to a minimum, until they would have little with which to purchase even the lower-priced goods. Then, too, as before stated, just as soon as our industries were destroyed, prices would be raised and we should be compelled to pay even more than under a reign of competition between our own manufacturers. How reckless of their own best interests, then, are those farmers who favor a reduction of duties on wool or woollen fabrics?
At a recent convention of the wool-growers of Ohio, the following resolution was passed:
"Resolved, That with feelings of the deepest concern we again call the attention of the people of this State and of the whole country to the rapid decline, under the Tariff Act of 1883, of the great industry in which we are engaged, and which has added to the wealth of the country in prosperous times not less than $150,000.000 annually. Official statistics show an actual decrease in the number of sheep in this State, since the act of 1883, of over 850,000 head, and a falling off in the wool product of over 4,000,000 pounds this year as compared with the year 1883. From extensive correspondence and the best official information to be obtained, there has been a corresponding loss in the whole country of not less than 5,000,000 head and 30,000,000 pounds of wool, which is an annual and an increasing loss. While our own product is thus decreasing, the importation of foreign wool is rapidly increasing. The value of the increased importation during the last year, ending June 30th, 1886, is a fraction over 88 per cent above the importation of the preceding year, and this increase is chiefly in clothing and combing-wool. We believe the industry doomed — unfortunate as that would be, not alone in diminishing the wealth production but also in taking from our control one of the means of successful warfare, offensive and defensive — unless relief can be speedily extended. In providing for the common defence, we regard the ability to produce a sufficient quantity of wool for our own consumption in time of war as more important than the building of fortifications and the manufacture of arms and ammunition, because these could be supplied during the progress of war, while it takes long years to build up an industry like this. We deny the right of Congress to strike down and destroy a great and growing industry by its legislation, as was done in the act of 1883, and we insist that our industry be placed upon the same footing it occupied under the act of 1867 and the amendments thereto. When practical wool-growers, men engaged in the business, have heretofore presented to Congress their views showing the dangerous tendency of legislation to this industry, they have been laughed at by theorists in public life, and their fears pronounced groundless. What will they say now when confronted with these hard facts, showing a large increase in the revenue to an overflowing treasury, and the decay of one of the largest single industries in the United States?"
If legislators will simply leave the tariff on wool as it is, and stop agitation with regard to it, our wool-growers would soon find that the industry is sufficiently protected to give them all the benefit they require.
The Worsted Industry.
The production of worsted goods in this country has been developed since the high tariff of 1867. We now have about 5000 looms, which, with the machinery for weaving and spinning, give employment to 75,000 persons, and employ capital to the amount of $20,000,000. It is estimated that these 5000 looms produce 15,000,000 yards of worsted goods per year, requiring 54,000,000 pounds of unwashed wool.
The use of merino combing-wool, which is of the very best quality, has been brought about by the introduction of the manufacture of worsted cloths. It is generally admitted that our worsted cloths are equal in all respects if not superior to the foreign, and our large production of these goods has had a tendency to reduce the cost of the foreign article almost to one half its former price. The reduced tariff of 1883, however, and the recent rulings of the Treasury Department in regard to worsted goods, excluding them from the list of woollen goods, has had a very depressing
18effect upon the industry, a large number of our factories having been closed. As a consequence, the importation of worsted goods has increased very largely during the last three years. In 1883 we imported only $430,354 worth; in 1885, $2,083,472 worth. It is estimated that during the years 1884 and 1885, 10,495,209 pounds of wool have been imported in worsted goods, which, had it not been for the reduction of the tariff, would have been raised by our own wool-growers and the cloth been produced by our own manufacturers.
Mr. John L. Hayes, Secretary of the National Wool Manufacturers' Association, says:
"If the mills made idle by foreign competition had been employed, there would have been made, in the six months ending July, 1886, 40,000 pieces of cloth, averaging 40 yards to the piece, and in weight 50 lbs. per piece, making 2,000,000 pounds of finished cloth which would have required over 6,000,000 pounds of unwashed wool."
Every wool-grower in the United States must see the difference to the wool-growing industry of keeping a high tariff on wool, as well as on all kinds of worsted and woollen goods.
American Flax-Growers Need More Protection.
This country produces more flax than any other country in the world, but it is raised almost exclusively for the seed, which is made into linseed oil. A small portion of the flax is converted into a cheap tow used by upholsterers, which hardly pays for the handling; it has also a small value as feed for cattle, but the greater portion of the flax raised here goes to waste. Although the American people are the largest consumers of linen goods in the world, they buy nearly all they use of foreign manufacturers, at high rates, while "their own good flax, the best in the world, remains unused and their own laborers are unemployed." In 1885 we bought of foreigners $32,686,297 worth of goods manufactured from flax, hemp, and jute; more than one third of this goes to pay for the raw material of which these goods are made, and this amount might go into the pockets of the American farmers every year if we only had factories in this country to use our raw material. There is so much labor required in the manufacture of linens that, with the present tariff, together with the present wages of labor here and the cheap labor in foreign countries, we cannot compete with foreigners in their production. The duties on linens are now from 30 to 40 per cent. If they were from 50 to 70 per cent. it would be but a few years before we should produce nearly all the linen goods we consume, and this would give employment to a large number of workmen, would increase the demand for food which the farmers raise, and would insure to the farmers good prices for their flax.
The building up of this new industry would increase the value of every American farm and the annual income of the farmers, and in a very few years the prices of all kinds of linen goods would be less in our market than they are now. Flax is said to be one of the most exhausting of crops to the soil, hence farmers should favor higher duties on linen goods, so as to make the flax industry more profitable and provide more means for fertilizing and strengthening the soil on which it is raised. It is estimated that we raise more than 1,000,000 acres of flax and that the value of the seed exceeds $11,000,000; the flax, however, would be worth even more than the seed if we had factories to make it into linen. American farmers who buy linen goods made in foreign countries are paying annually a bounty to foreign flax-raisers while they destroy their own flax raised at home.
Higher Duties on Sugar Needed.
Sugar is used by almost every family in the United States; the duty on it varies from 1.4 to 3.5 cents per lb. There is a good deal of discussion in the public press in regard to removing the duties on sugar. The Report on Foreign Commerce and Navigation for 1886 contains a table of prices for some of our staple commodities from 1855 to 1886, which shows that sugar is less per pound now than it has been any time during that period. Last year granulated sugar sold for 6.4 cents per pound. In 1855 it was 7.4 cents per pound, the cheapest of any period up to the time the war tariff was adopted.
Starch is also much cheaper now than any time during this period. Last year it was 4 cents per pound, while in 1864 it was 9.1 cents per pound.
If the tariff were taken off from sugar, foreign countries would do as Brazil did when we placed coffee on the free list, — put an export duty on it which about equalled our import duty, so that consumers paid as much for their coffee as before.
On July 5, 1872, coffee was placed on the free list. At that time the price for Rio coffee was from 18 to 19Åº cents per pound. The same grades of coffee were selling January 1st. 1887, at from 15 to 16 1/8 cents — a decline in price of only 3 1/8 cents per pound, or about twenty per cent. The average decline of coffee since it was free has been 16 per cent. At the time coffee was made free, sugar was selling at from 8Å¾ to 14Åº cents per pound according to grade. The same quality of sugar sold on the 1st of January, 1887, at from 4Åº to 6 5/8 cents per pound — a reduction since 1872 of exactly fifty per cent. In a list of fifty-nine articles, including dry-goods, groceries, hardware, etc., the average decline in price between 1873 and 1887 has been 59 3/10 per cent., the smallest decline in the whole list being upon coffee, which was on the free list.
The sugar industry is being rapidly developed not only in Louisiana and other Southern States, but by the beet and sorghum industry which is becoming quite extensive at the North and West; and if the tariff is left alone, it will be but a few years before all kinds of sugar will be cheaper than ever before. In 1816 France placed a duty upon sugar of from five to eight cents per pound. The present duty there is from three to five cents, and the Government gives the producer a bounty of 2Ë cents per pound. Under this combined influence of protection and reward, the production of sugar in France has more than doubled every ten years, until the beet-sugar industry has developed enormously. It rose from 3000 tons in 1820 to 300,000 tons in 1870.
Germany has a tariff of three cents per pound on sugar, and also a bounty, and her sugar industries are double those of Cuba. Germany exported last year $5,000,000 worth of sugar made mainly from beets. In 1884 Europe made 2,500,000 tons. The beet-sugar industry of this country has not yet been fairly developed ; if, however, the United States government would pay even one half the bounty for home-made sugar that France, Germany, Belgium, or Norway and Sweden have paid, we would in a few years make all the sugar we consume. This industry would be worth hundreds of millions of dollars to our farmers. In 1886 we imported $76,746,461 worth of sugar, molasses, etc. During the last ten years we have paid to foreigners about $600,000,000 for sugar. If our people had been encouraged, either by tariff or a bounty, to engage in the sugar industry, this money could have been kept mostly in our own country, and a large portion of it would now be in the pockets of our farmers.
Opinions of Eminent Statesmen as to the Effect of a High Tariff Upon Prices.
The principles laid down in the foregoing pages — that the cost of manufactured articles is, in the end, lessened by a protective tariff — have been fully endorsed by some of the most eminent of American statesmen.
Alexander Hamilton said:
"When a domestic manufacture has attained perfection and has engaged in the prosecution of it a competent number of persons, it invariably becomes cheaper. Being free from the heavy charges which attend the importation of foreign commodities, it can be afforded cheaper, and accordingly seldom or never fails to be sold cheaper in process of time than the foreign article for which it is a substitute. The internal competition which takes place soon does away with everything like monopoly, and, by degrees, reduces the price of the article to the minimum of a reasonable profit on the capital employed. This accords with the reason of the thing, and with experience."
Henry Clay said:
"I plant myself upon this fact of cheapness and superiority as upon impregnable ground, The protection given to flannels in 1828 was fully adequate. It enabled the American manufacturer to obtain complete possession of the American market, and now let us look at the effect. I have before me a statement from a highly respectable mercantile house, showing the price of four descriptions of flannel during six years. The average price of them in 1826 was 38Å¾ cents: in 1827, 38 cents ; in 1828 (the year of the tariff), 46 cents ; in 1830 (notwithstanding the advance in the price of wool), 32 cents, and in 1831, 32Åº cents. These facts require no comment, "Brown sugar, during ten years, from 1792 to 1802, with a duty of 1Ë cents per pound, averaged 14 cents per pound. The same article, during ten years, from 1820 to 1830, with a duty of 3 cents, averaged only 8 cents per pound. Under our present high tariff it sells for 4 cents. Nails, with a duty of 5 cents per pound, are selling at 3 cents. Window glass, 8 by 10, prior to the tariff of 1824, sold at $12 or $13 dollars per hundred feet; it now sells for $3.75."
Senator John Holmes, of Maine, said:
"If any one rule more than another is to be relied on it is this, that as soon as protection begins to operate, and in proportion to its operation, the tax is reflected back from the consumer to the producer. Thus, while the duty has been constantly increasing, the price of the article taxed has been constantly diminishing. The reason is as manifest as the fact is true — the domestic article has been increasing in quantity. Take the article of nails, the duty 5 cents per pound, and the nails, duty and all, but 5Ë cents, while the raw material of which they are made is 4Ë cents. Cheese, duty 9 cents per pound, and the best cheese may be had for 8 cents."
Senator George M. Dallas, of Pennsylvania, said:
"The effect of our protective policy on iron has been strikingly evinced, first, in augmenting the number of its factories and its quantity ; secondly, in reducing the price of its manufactures. The reduction of the prices was a necessary consequence of the domestic competition created and excited by the policy."
Daniel Webster, in 1843, said:
"A tariff does not necessarily increase prices. One year after the present tariff was established many articles embraced in its provisions were considerably lower than they had before been. And I ask any one if there is now any complaint of undue high prices in any article of which the tariff extends?"
President Fillmore, in his message in 1852, said:
"The destruction of our manufactures by the tariff of 1846 leaves the foreigner without competition in our market, and he consequently raises the price of the articles sent here for sale, as is now seen in the increased cost of iron imported from England."
It was the favorite expression of our lamented philanthropist, Peter Cooper, one of the strongest and most uncompromising advocates of protection our country has ever known, that "WE CAN BUY NOTHING CHEAP OF FOREIGN COUNTRIES THAT MUST BE BOUGHT AT THE EXPENSE OF LEAVING OUR OWN GOOD RAW MATERIAL UNUSED AND OUR OWN LABORERS UNEMPLOYED."
Senator Blaine, in his new book, "Twenty Years in Congress," says:
"The American protectionist does not seek to evade the legitimate results of his theory. He starts with the proposition that whatever is manufactured at home gives work and wages to our own people, and that if the duty is even put so high as to prohibit the import of the
21foreign article, the competition of home producers will, according to the doctrine of Mr. Hamilton, rapidly reduce the price to the consumer."
Frederic List, a German, who visited this country many years ago, says:
"It is not true, then, as has been pretended, that protection enhances the prices of domestic products by the amount of the protective duty. Duties may cause a temporary increase of prices, but in any country prepared for manufacturing, home competition soon reduces the prices below the rates at which they would have remained under the operation of free trade. It is notorious that under the influence of manufacturing industry, property in land has increased from 50 to 100 per cent; that the wages of labor have so advanced; that many routes of transportation and travel are perfected, or in course of construction, throughout the territories."
Canadian statesmen say:
"The duties on coal, wood, barley, and lumber, which we export are paid by Canadians."
The tariff of 1828 is said to be the highest in history, the rates of duty averaging 50 per cent. These high duties, instead of being inconsistent with the public interests, conduced greatly to the public prosperity.
The revered statesman Henry Clay said of the period when this high tariff was in force
"If the term of seven years were to be selected of the greatest prosperity this people have enjoyed since the establishment of their Constitution, it would be exactly that period of seven years which immediately followed the passage of the high tariff of 1824."
We can give numerous illustrations of articles which, under the influence of home competition, have fallen in price below the point at which the foreign article was furnished when there was no protection. This has notably been the result with respect to steel rails, the production of which in America has reached a magnitude surpassing that of England. Meanwhile, rails have largely fallen in price to the consumer; the home manufacturer has disbursed countless millions of money among American laborers, and has added largely to our industrial independence and to the wealth of the country.
Effect of a Protective Tariff Upon Our Foreign Trade.
One of the most frequent assertions of the advocates of free trade is that a high tariff restricts the American market, that it interferes with our foreign trade, that it prevents the farmers from buying in the cheapest market and selling in the dearest. A comparison of our exports and imports during high and low tariff periods indicates that these assertions are not true.
In the last ten years of low tariff, from 1850 to 1860, our total exports were $2,141,487,892, and our total imports $2,506,360,935; the excess of imports over exports $364,873,043. During the last ten years of high tariff our exports have been $6,847,486,125; our imports $5,501,814,265; excess of exports over imports $1,345,671,860 (paid partly by a return of our bonds and stocks and partly in gold and silver).
In 1883, the year the tariff was reduced, our imports and exports amounted to $1,547,020,316, while in 1886 they were but $1,314,960,966, a falling off of $232,059.350. Since the defeat of the Morrison Tariff bill in the summer of 1886, however, our foreign trade has been rapidly increasing, and as nearly 75 per cent of our exports are farm products, farmers will see clearly that our foreign trade in these products is very much greater under a high than under a low tariff. During the ten years of low tariff referred to, there was but one year when our exports exceeded our imports: while, during the last eleven years, of high tariff, there has not been a single year when our imports were greater than our exports. Our foreign trade, instead of being $364,873,043 against us, as it was under the ten years of low tariff, has been $1,345,671,860 in our favor in the ten years of high tariff, making a difference of $1,710,544,903 in favor of the high tariff.
The statement is often made that if we make our markets free, foreign
22countries will buy more from us; but facts do not prove this statement to be true. We buy and sell more with foreign countries under a high, than under a low tariff, for the reason that a high tariff stimulates manufacturing industries, gives more constant employment to the working classes and gives them better wages; they make more money and are more prosperous, and they consume more of both foreign and domestic products as a result.
Again, by manufacturing a large portion of the goods we consume, we keep the money which it costs to produce these goods at home, which adds greatly not only to the wealth of our people individually, but to the wealth of the nation, for, as before stated, we grow rich nearly twice as fast when we make all we consume as we do when we buy half of foreigners.
Protection to Farm Products.
The American-farmer is directly benefited by the tariff on farm products. The following is a list of the duties on some of them.
|Wheat .... per bushel,||20 cents.|
|Corn, oats, and cornmeal .... "||10 cents.|
|Potatoes .... "||15 cents.|
|Hay .... per ton,||$2 00|
|Oatmeal and rye flour .... per pound||Ë cent.|
|Butter and cheese .... "||4 cents.|
|Pork .... "||1 cent.|
|Ham .... "||2 cents.|
|Tobacco .... "||40 cents to 75 cents.|
|Wool according to grade .... "||2Ë cents to 35 per cent.|
|Wheat flour||20 per cent.|
|Turnips, cabbage and other vegetables||20 per cent.|
|Live animals (except for breeding purposes, which are free)||20 per cent.|
The free-traders argue that these duties are of no benefit whatever to the American farmer, because he can raise these articles so much cheaper than can farmers in other countries; and yet, were no duties placed upon them, Canadians, who are in such close proximity to the American market, would send in large quantities of wheat, corn, and oats, which would tend to lessen the price of our farm products. As the duties now are, the Canadian farmer, in order to sell these goods in our markets, has to help pay our taxes.
A United States Consul in Canada says:
"The moment the tariff is taken off, that moment hop-poles go up in price just the amount of the present duty. It is so with all exportations. Butter pays a duty of four cents per pound; it is 5Ë to 6 cents less in price here than in American towns on the frontier. Potatoes pay 15 cents per bushel duty; they are 18 to 22 cents per bushel lower here than on the frontier across the St. Lawrence."
Remove the tariff of 20 cents per bushel from wheat, and it would be but a short time before wheat from India would be sent to New York and other seaport cities and undersell that raised by Western farmers. Cabbages, potatoes, and many other garden vegetables from Germany, Scotland, and other foreign countries, are now sold in New York markets, even under present duties. A tariff on farm products is of the greatest benefit to our farmers. The agricultural industries of Great Britain have been nearly ruined by free trade, America has undersold her in her own markets.
False Figures of Free-Traders.
The advocates of free trade claim that the American consumer pay the price of the foreign article with the tariff percentage added, not only on all goods imported, but also on all that are manufactured and consumed in this country.
Augustus Mongredien, a member of the Cobden Club of London, in
23a pamphlet addressed to American farmers, claims that the annual tax on these farmers, as a result of our protective tariff, is $425,000,000. Hon. Frank Hurd, the free-trade champion of Ohio, figures it at $450,000,000. Congressman Springer, of Illinois, says it is $550,000,000; Hon. O. Well-born, of Texas, $1,073,915,738. Hon. W. R. Morrison, of Illinois, makes it about $2,000,000,000. A late free-trade writer in Justice reckons it at $2,312,000,000, while Oscar Turner, of Kentucky, puts it at $3,000,000,000. Would it not be well for these free traders to come to some agreement among themselves as to the amount of taxes the American consumer has to pay as a result of the protective tariff, before they attempt to instruct others? And, too, how can their figures be correct, or even approximately so, when we have shown that a large proportion of the common articles consumed are sold in this market as cheaply as in foreign markets, and some of them cheaper even than the tariff duties upon them?
Their inconsistencies are well illustrated by a story told by Congressman N. W. Eaton, of Conn,, in a speech. He said:
"There was a certain professor in my county, a theorist of the first water, a man who does not know any more about the practical tariff than I know about the Hebrew that he is well acquainted with. This professor came up into a large manufacturing village in my county to make a theoretical speech, such an one as my friend (urd) from Ohio delights in. There was a farmer standing by a post in the lecture-room, and the professor thought he might be a good subject to operate upon; so he said to him: ‘My friend, you are a farmer?’ ‘Yes!’ ‘You live here?’ ‘Yes!’ ‘Do you know these manufacturers in this village are robbing you?’ ‘Why, no, I do not know it! How can they rob me? I came here ten years ago with $500; I bought a farm, running in debt $2500 for my farm and stock. I went to work raising truck for this village. I paid my debts and have got money in the savings bank, and do not owe any man a dollar. How have they robbed me?’ The professor said, ‘Well, it appears you have been a hard-working man and have lived it through. But you pay six cents a yard duty for the very cloth your shirt is made of!’ ‘Well, Professor,’ replied the farmer, ‘you may think so, but you cannot prove it unless by Äsop's Fables, for five cents a yard was all I gave for the cloth!’ "
Now there is a duty of 20 cents a bushel on wheat and we produced 457,218,000 bushels in 1886. If a tariff increases the price to consumers and on all consumed in the country, the people of this country were taxed last year $91,443,600 more than they should have paid for their wheat. We raised 1,665,441,000 bushels of corn, which has a duty of ten cents a bushel. Our people then must have been taxed $166,544,100 more for corn than they need to have been. According to our free traders we paid $257,987,700 too much on wheat and corn, to say nothing of the extra amount paid on oats, meal, flour, potatoes, hay, cattle, and every other product of the farm. Would our farmers like to have taken that much less than they got for their crops?
Tariff for Revenue Only.
The advocates of tariff reform may be divided into three classes:
1st. The protectionists.
2d. Those who advocate a tariff for revenue only.
3d. The advocates of free-trade.
The protectionists are those who advocate a tariff that would provide a revenue ample for paying all expenses of the Government, thus saving the people from taxation, and so adjusted as to foster and encourage American industries, both manufacturing and agricultural.
The tariff-for-revenue-only reformers would have duties so arranged as to provide revenue barely sufficient to pay the current expenses of the general Government, without any regard whatever to its effects upon our manufacturing industries or the general welfare.
The free-traders would abolish all duties on foreign imports and allow foreigners to send their products into our market on precisely the same terms as our own citizens. They would have all the necessary funds to carry on the Government raised by direct taxes levied upon the people.
Henry George, the great Free-Trade Champion of the workingmen, would not only abolish all duties on foreign imports, but he would deprive the farmers of all right of private ownership in the farms they cultivate, and would also have all taxes paid, in the form of rent, by those who occupy the land, exempting all other property from taxation.
The revenue tariff advocates would give no encouragement to American industries. It is a matter of indifference to them as to whether or not manufacturing is carried on in this country. The free-traders not only would not encourage manufacturing industries here, but they would lay increased burdens on the people by a direct tax for funds to support the Government. A tariff for revenue only might be so adjusted as to answer all the purposes of a protective tariff, providing a revenue was raised sufficient to relieve the people entirely from taxation. But these revenue-tariff advocates want only a revenue sufficient to pay the expenses of the General Government. Why have a revenue sufficient to pay the expenses of the General Government any more than to pay the expenses of the State or Municipal governments? Why not levy duties sufficient to relieve the people entirely from all taxes? It is estimated that the entire amount required to meet the expense of our National, State, and Municipal governments, is about $700,000,000 per annum. By placing a tariff on all manufactured articles sufficient to equalize the difference in the rate of wages paid the laborers in foreign countries and in this, we can raise a revenue which would go far towards meeting the entire expenses of all our home governments. This, with the tax now laid upon whiskey and tobacco, might be made sufficient to relieve the people from all taxation. A revenue tariff of this kind would satisfy even the most ardent protectionist.
The truth is, instead of the tariff being a tax on the American consumer, as is alleged by free-traders, it is the only public measure that events the consumer from being taxed to support the General Government.
The United States Government now has a revenue amounting to about $100,000,000 more than enough to pay its current expenses and the interest on the bonded debt. The free-traders are raising a great cry against this surplus which is now being used for the cancellation of the public debt. They talk as though a large surplus revenue was the greatest misfortune that could befall a nation. A large revenue of a nation, like a large revenue for a private individual, is always an evidence of prosperity. To cut down that revenue by cutting off the source from which it is derived, is as unwise as cutting down the revenue of an individual by destroying his business.
This is not the first time that a similar cry has been raised in regard to our surplus revenue. In 1835 the Government had so large a surplus that it was divided among the States. The revenue that year was $34,163,634, and the expenses $17,514,950, leaving a surplus of $16,648,684. The public debt in 1824 was $90,269,777, which, under the protective tariff of that year and of 1828, was practically wiped out previous to 1833. In 1834 the debt was only $37,513. Under the cry of surplus revenue, etc., the tariff was reduced in 1833. In 1843, under the low-tariff policy, the debt had increased to $32,742,922. Under the protective tariff of 1842 the public debt was again reduced until it was only $15,550,202 in 1846, when a reduction of tariff again took place.
The debt in 1861, at the time the war tariff was instituted, had grown to $90,580,873.52, and the Government was paying 12 per cent. for the use of money. In 1865, in consequence of the war, the debt had increased to $2,680,647,869. Under the high tariff it has now been reduced to $1,690,171,728,
25upon $550,000,000 of which there is no interest, and the Government can borrow all the money it wants at 3 per cent.
A nation can hardly be in possession of a legitimate surplus revenue when it has a large public debt due and matured which should be paid. Then, too, we need several millions of dollars to rebuild our navy and our foreign shipping. There are also public improvements needed which demand the attention of the Government, and some of this surplus revenue might profitably be used for these purposes. What madness, then, to cut down the revenue, especially when it is to be done to the destruction of our chief industries, manufacturing and agricultural! To destroy the industries of the country for the sake of getting rid of the surplus revenue would be the height of folly, and would reduce the income of the people individually, as well as that of the Government.
Low Tariff Drains the Country of Coin.
One of the most damaging results of a low tariff is the continual draining of this country of its coin, thus interfering with its currency. Under a low tariff the imports almost always exceed the exports, and the duties received by the Government are small compared with the amount of coin required to pay for the goods imported.
Every panic (excepting that of 1873, which was due to a change in our currency) has been preceded by a reduction of duties, and by large importations of foreign goods, with comparatively small exports.
During the year of the panic of 1816 our imports were $147,103,000, and in 1815 they were $113,041,274, while our exports during these two years were but $110,756,299, the balance against us being $149,387,975. The panic of 1837 was preceded by three years of enormous importations of foreign merchandise, and of small exports. Our imports for 1835, 1836, and 1837 were $443,816,252, while our total exports during those years were only $301,311,318, leaving a balance against us of $142,504,934. The panic of 1857 was likewise preceded by large imports of merchandise and comparatively small exports. Our imports for 1855, 1856, and 1857 amounted to $916,669,360, while our exports during those years were but $738,095,899, leaving a balance against us of $178,573,461.
Our imports of merchandise from 1848 to 1861, inclusive, a low tariff period, were $3,390,516,691, and our exports $2,924,543,721, leaving a balance against us of $465,972,970, about $320,000,000 of which was paid in coin.
From 1862 to 1872, covering the war period, we imported $4,006,928,710 and exported $3,041,456,231, the balance against us being $965,472,479, which was paid in coin and bonds; but this balance against us during a high-tariff period was, as before stated, due to the war.
From 1873 to 1883, inclusive, our exports were $7,482,768,824, and our imports $6,305,881,473, leaving a balance of trade in our favor of $1,176,887,351.
The total amount of gold and silver dug from our mines from 1845 to June 30, 1886, was $2,382,336,769. We increased this in 1883 by nearly 100,000,000. The estimates of the total amount of gold and silver in circulation July 1, 1886, was $857,104,254, the larger portion of the balance ($1,525,132,515) having been exported to pay the balance against us for foreign imports.
Previous to 1861, at which time we adopted the high tariff, nearly all the gold and silver we produced was exported to pay the balance of trade; since then, with the exception of a few years during and after the war (when our Government bonds were being largely purchased abroad), we have not only kept our gold and silver at home, but have received from foreign countries more than we have sent them, the balance of
26trade being in our favor, and hence we have a larger volume of coin in the country at the present time than ever before.
When the people understand the importance to business prosperity of a uniform volume of currency, they will better appreciate the value of a high tariff as a means of securing it. Under a low tariff we stimulate foreign industries by letting foreign manufacturers supply us with goods and we rob our country of its coin to pay for their goods, thus bringing on panics, bankrupting those in debt, and causing periods of business depression; while, under a high tariff, we stimulate home industries, let our own manufacturers supply us with goods, keep our money at home, and allow the gold and silver from our mines gradually to increase our volume of currency as the population and business increase. This is a matter of the most vital importance to the prosperity of the country. During the low-tariff period, from the time gold was discovered in California in 1848, to 1861, foreign importers, as stated above, took from this country $319,994,947 in coin and bullion more than the amount of our exports. During the last eleven years we have sold abroad $2,126,504,992 of American products more than we have bought of foreign goods, have kept all our coin at home, paid off over $2,000,000,000 of foreign debt, and drawn from foreign countries $29,740,237 in coin and bullion.
It is true, during the war, coin was largely taken out of the country, notwithstanding our high tariff; but had it not been for the high duties, this Government would have been as hopelessly bankrupt as Egypt and Turkey are to-day.
As a result of the reduction of duties in 1883 the coin has again been leaving the country. The reports of the Director of the Mint for 1886 show that for the fiscal year ending June 30, 1886, we exported of gold and silver coin and bullion $33,869,754 more than we imported. But since the Morrison Tariff bill was defeated the coin is steadily coming back. In 1865 there was only about $160,000,000 of gold and silver coin and bullion in this country; the war had driven it all out to pay for supplies; but the last report of the Director of the Mint shows that we now have $857,104,254 of coin and bullion, thanks to a high tariff.
The Cobden Club.
The free-trade movement has its head in the Cobden Club, of England, and the head of the Cobden Club is the British Government. This Cobden Club is an organization gotten up for the benefit of Englishmen and not for the benefit of Americans. Its members are made up of some of the most distinguished names to be found in any association either in Europe or America. Among them are twelve English Cabinet Ministers — leaving only four who are not members — the Prime Minister of England, the Lord Chancellor, Lord President of the Council, Chancellor of the Exchequer, the five great Secretaries of State, Colonies, Home, and Foreign Affairs, and the Postmaster-General, together with about two hundred members of Parliament. The whole power and wealth of the English Government is back of this club. The members are all men of vast wealth, great capacity, and boundless enterprise. Nearly all of the leading millionaires and manufacturers, cotton-lords, and landlords of England, are members. They all regard the prosperity and wealth of England as inseparable from their own, and the protective system of America is, with them, the one grand obstacle to be removed.
This club was organized for the express purpose of publishing and distributing documents, and providing money and men to induce the United States to adopt free trade or reduce its tariff. It has secured as an ally in this country the Free-Trade Club of New York, composed mostly of New York importers and the professors in many of our colleges, and
27they have offered premiums to the students of those colleges for prize essays on free trade. It has also secured the services of some of our most prominent clergymen and editors, and has several paid public lecturers who go about the country talking up the subject of free trade.
Millions of copies of the pamphlet before referred to, by Augustus Mongredien, a member of the Cobden Club, have been circulated among the farmers of the West with a view of influencing them to vote for members of Congress, who are in favor of free trade or a reduction of tariff. Hon. Frank Hurd, of Ohio, circulated 100,000 copies in his Congressional District. Documents of various kinds are being distributed among the farmers, working classes, and business men of this country, with a view of controlling public opinion in favor of free trade. It is no wonder that Englishmen want this, for such a policy would give England the opportunity to flood our market with her surplus products, and to supply the American people with nearly all kinds of manufactured goods.
What England wants is cheap food and a market for the products of her cheap laborers. The question for us to consider is, do we want the policy of this Government dictated by Englishmen for the benefit of England, or by Americans for the benefit of America? The free traders are working for England and the English people, while the protectionists are working for America and the American people. When you find an American citizen vigorously shouting for free trade or a reduction of duties, you will most likely discover a man who is either ignorant of the principles of protection, or a foreign importer, or a person in the employ of the Cobden Club.
Effect of a Seduction of Tariff of Our Manufacturing Industries.
The advocates of protection and a large proportion of our manufacturers claim that if Congress makes any important reduction of duties it will result in closing a large number of our manufacturing establishments. It would enable English manufacturers to come more directly in competition with American, and with many important circumstances in their favor. England's manufacturing industries were in operation for many years before our Government was organized. They have all of the most perfected machinery and the best skilled labor there is in any country, and cheaper laborers than the American manufacturers can obtain. The inflation of currency and general increase in prices that took place during the war, raised the wages of the working classes here far above those of foreign countries. In 1877 the Department of State at Washington addressed a circular to nearly all the United States Consuls in Europe, requesting them to ascertain the rate of wages usually paid to laborers in different industries, the cost of living, and the state of trade in the countries where they were located. Their testimony was, in brief, as follows:
"First. — The rate of wages in the United States is more than twice that of Belgium, three times that of Denmark, France, and Germany, one and a half times that of England and Scotland, and more than three times that of Italy and Spain.
"Second. — The prices of the necessaries of life are lower in the United States than in foreign countries; that is, the laboring people of Europe cannot purchase the necessaries of life, common to the American people, as low as the same can be purchased in the United States — or vice versa, if the working people of the United States lived on the same quality of food, and exercised the same frugality as the working people of Europe, they could live as cheaply."
Mr. Carroll D. Wright, Chief of the Bureau of Labor Statistics at Washington, in his history of wages and prices from 1852 to 1883, says:
"From 1860 to 1883 the general average wages of employees, in the industries considered, was 77 per cent. higher in Massachusetts than in Great Britain."
These statements of United States Consuls and of Mr. Wright have been verified by other statistics and by the testimony of travellers. Now with this difference in wages in favor of European manufacturers, it is apparent that any important reduction of duties on imports must result either in a reduction of wages here or the destruction of American manufacturing. The reduction of duties made by the Congress of 1883 closed thousands of our manufacturing establishments. Out of 683 blast furnaces for the production of pig-iron, 376 were out of blast, and nearly half of our steel-rail mills were closed.
Mr. Henry S. Eckert, President of the Eastern Iron Association, says:
"In regard to the 20 per cent. reduction required by the Morrison bill, so far as I can understand, its effects would be to destroy every American manufacturer who goes into competition with foreign manufacturers. The mere agitation of the subject has already put a stop to enterprise. Pig-iron has fallen 20 per cent. since the taking of the testimony by the Tariff Commission. Comparatively few of the furnaces now in blast are working at a profit, and many are running at a serious loss. The chief incentive to continued operation is to prevent the want which would be inflicted on the workingmen and their families by a total suspension. Remove the hope of expected improvement, by a further reduction of duties, or continue the agitation, and most of the furnaces still in blast will be forced to put out their fires and stop their mines and quarries."
More than one thousand manufacturers of iron and steel sent a protest to the Committee of Ways and Means at Washington against the reduction demanded by the Morrison bill. They say:
"The iron and steel business to-day yields little or no profit on the capital invested. If duties are reduced the selling price of our products must be reduced to compete with foreign importers. To accomplish this the cost of production must be reduced accordingly, and SUCH REDUCTION MUST COMB OUT OF LABOR."
Mr. E. H. Ammidown, who is at the head of one of the largest woollen manufactories in the country, says:
"The importance of the wool and woollen industries in this country is too great to permit of their destruction without a determined effort to prevent it. The wool-growing and the woollen-manufacturing industries of this country cannot be separated. They are interdependent and the ruin of one involves that of the other. The wool clip of the United States has increased from 60,000,000 pounds and $20,000,000 in 1860 to 350,000,000 pounds and $110,000,000 in 1883. Only 4 per cent. of this amount represents the quantity of clothing and combing-wool imported.
"The home manufacture of woollens, including the goods made from foreign wool, amounts to about $275,000,000 per annum, and is widely extended from Maine to California. It distributes direct wages for operatives $70,000,000 annually, besides other direct and indirect contributions made to auxiliary industries and their employment of labor. Almost the entire 20 per cent. reduction demanded by the Morrison Tariff bill would be taken from the wages of the working classes. Would the operatives stand such a reduction? Those who have observed the difficulty of reducing wages even 10 per cent. will affirm that no such reduction can be effected. The mills would, of necessity, close their doors until starvation compelled the operatives to take work at any price, or until Congress had abandoned its efforts to promote free trade."
The late John Roach, who was one of the largest ship-builders and manufacturers of iron and steel in the world, said:
"The bill known as the Morrison bill, before your committee, if it passes, will close every furnace in the land, and completely break up the iron business, except in a few instances — where a reduction of labor might keep it going."
It is said, as before stated, that "the steam power of Great Britain alone is equivalent to the labor of 75,000,000 men. With this enormous power added to her perfected machinery and cheap labor, the inevitable result must be that our manufactories would, many of them, be closed, should the duties be reduced."
The method resorted to by the English to close factories in this country, in case of any important reduction of duties, would be to throw their surplus products on our market and sell them at cost, or even less than cost. And when that was done they would raise the price of their goods and compel us to pay as high for them as we did before the reduction of duties was made. In establishing every kind of manufacturing, there is, of course, a certain amount of expense, such as interest on capital, machinery, superintendents, and other items, that consumes a large share of the profits of the establishment. When these expenses are paid, the
29manufacturer can then produce his goods at one third less expense than before these demands are met. The English manufacturers have a broader market than the American, and can sell their goods at profit enough to meet these expenses. They would then push production to the utmost for surplus products to be sent to this country. Will our people be so short-sighted as to favor a general reduction of duties on imports, thus giving England the opportunity of ruining the industries of this country? There is not a factory in the United States that would not be injured by a reduction of our present tariff.
The laboring classes are so well organized that a reduction of wages can take place only after strikes, riots, and starvation, and when the police and military have disorganized and forced them into submission.
Depression of Business Caused by a Reduction of Duties.
During the years 1884, 1885, and part of 1886 there was a general depression of business throughout the United States. Some of the most prominent advocates of free trade, whose testimony we have published in preceding pages, claim that this depression has been due to over-production, brought on by excessive stimulation of our industries through the agency of a high tariff. That their statements are not true has already been shown by the enormous importations of foreign goods which have been consumed in this country during these three years. There cannot be over-production of the goods made in our own factories when we have imported $1,880,661,158 worth of foreign products during that time. The depression of business has been brought on, not by having a tariff that was too high, but by the reduction of duties that took place in 1883. By the taking off of duties from foreign imports the prices of all kinds of goods were unsettled, manufacturers closed up their establishments, or reduced the wages of their employees, or put them, perhaps, on half-time; and when laborers are thrown out of employment, consumption as well as production is lessened.
The market in this country has been overstocked by foreign, not by domestic goods. We should have but little need for a market in foreign countries if we had entire control of our own market at home. It is admitted by all that the American market is the best in the world. How, then, can American producers be benefited by surrendering a good home market to obtain a poorer foreign market? The remedy that our free traders prescribe for the depression of business is to place raw material on the free list. The object of this, it is claimed, is to enable our manufacturers to make goods cheaper, so as to sell in foreign countries; but in so doing, many industries which are indispensable to the manufacturers in this country are arrested or destroyed. Free raw material means free wool, free pig-iron, free coal, etc., and the effect of placing these articles on the free list would be to destroy the industries in this country now devoted to their production. When this was accomplished, the price of raw material would at once be greatly advanced. The depressing effect of the reduction of duties in 1883 has been recognized by every man engaged in the production of wool in this country. If wool were now placed on the free list its production would be so unprofitable that the amount produced would be reduced one half or two thirds, as most of the people engaged in the business would be driven out of it. The country never is more prosperous than when we have a high tariff, and the reason is because it gives our people active employment in manufacturing and other industries, and this gives them plenty of money with which to buy the comforts of life, both foreign and domestic; it gives farmers good prices, and thus enables them to buy freely of manufactured products; it furnishes business for transportation routes, and adds in every way to the wealth and prosperity of the nation.
Hon. Abram S. Hewitt, in his pamphlet on "Emancipation of Labor," says:
"To abolish protective duties at once would ruin me; it would ruin the manufacturers; it would dislocate the labor of this country now engaged in the protected industries."
Increase of National Wealth Under a Protective Tariff.
The wealth of a nation is the product of labor, and any policy that keeps the people actively employed adds to the national wealth. A high tariff does this. It encourages capitalists to build factories and employ laborers. The increase of wealth in the United States during the last twenty-four years, under a high tariff, clearly indicates the beneficial effects of the protective policy. In 1860 the total wealth of the United States was estimated at $16,150,000,000. Mr. Chas. S. Hill, Statistician of the U. S. Department of State, places the national wealth in 1880 at $55,000,000,000. It is probably now fully $60,000,000,000. It is said that David A. Wells, a prominent free trader, estimates it at over $64,000,000,000. This would show that we have quadrupled our national wealth during the last twenty-four years.
Mr. Mulhall, of the Royal Society of London, in his "Balance Sheet of the World," says:
"It would be impossible to find in history a parallel to the progress of the United States in the last ten years. Every day that the sun rises upon the American people it sees an addition of two and a half million dollars to the accumulation of wealth in the Republic, which is equal to one-third of the daily accumulation of all mankind outside of the United States."
He estimates the entire wealth of Great Britain in 1882 at $40,640,000,000. If this estimate is approximately correct, the increase of national wealth in this country during the high-tariff period has been $3,840,000,000 more than the entire wealth of Great Britain. In other words, we have gained more in national wealth in twenty-four years of protection, than Great Britain has during 1400 years of home rule under free trade. During the period, however, under which this enormous growth in national wealth has taken place, we have had four years of war, in which we incurred debts amounting to nearly $8,000,000,000, three fourths of which we have already paid. We have added over 25,000,000 to our population, which now stands at about 60,000,000.
The debt of the United States at its highest point, in 1865, was $84 per head. It is now less than $23; and, including all State debts, less than $27 per head. The average Government debt of the commercial and manufacturing states of Europe is $84 per head.
The earning power of $100 in gold coin invested in United States bonds of the best class was, at the highest point of paper money inflation, in 1864, 16 66/100 per cent. per year. At the preasent time the earning power of $100 in gold coin, invested in 4Ë per cent. United States bonds, is only 2 20/100 per cent. per year.
The property of the working people is largely represented by the deposits in savings banks; the aggregate amount of deposits and interest in the savings banks of New York previous to 1860, covering a period of nearly fifty years, was $280,269,279, while the aggregate amount from 1860 to 1885, being an era of twenty-five years of protection, was $3,185,979,035, which is twelve times the amount during the first period. The amount of interest credited to depositors from 1860 to 1885 was $275,006,261, a sum nearly as great as the entire principal and interest previous to 1860.
The increase of deposits in New York State savings banks from 1860 to 1885 was $378,929,341, while that of all the savings banks of Great Britain was but $235,309,499.
The products of our manufacturing establishments have increased from $1,876,893,377 in 1860 to over $7,000,000,000 in 1886. The number of our
31farms has increased from 2,044,077 to 4,500,000, and the value of these farms from $6,645,045,007 to $11,000,000,000. Our total production of cereals in 1864 was only 916,427,263 bushels, while in 1886 it was 1,470,957,200. The amount of cotton has increased from 1,000,000,000 pounds to more than 3,000,000,000 per year; and wool from 42,802,114 pounds in 1860 to 320,000,000 in 1885. Tobacco has steadily increased from 185,000,000 pounds in 1865 to 541,504,000 in 1884. The coal product from 15,000,000 tons in 1860 to nearly 110,000,000 in 1886. The production of iron ore has increased from 900,000 tons in 1860 to over 10,000,000 in 1886; pig-iron from 1,305,000 tons in 1867 to nearly 5,000,000 the last year, and steel rails from 2277 tons to 1,500,000. In 1860 we had 30,000 miles of railroad, and in 1886 we had 127,000. Almost every industry in the land has been greatly stimulated during this protective period, and many new industries have been started which never had a foothold in this country before. Nothing can be done which would retard this rapid progress and depreciate the value of property more than reducing the tariff or making any approach to free trade.
A careful and honest examination of the facts, figures, and arguments herein presented ought to convince every reader that a protective tariff is of immense benefit to American farmers. It increases the value of their lands, increases the prices of their products, increases their annual income, and gives them a home market — furnishing, in fact, the only market for their numerous perishable products; it saves the cost of transportation, saves the profits of middlemen, and keeps the profits on both sides of trade in this country; it enables farmers to provide fertilizers to enrich their lands and thereby increases the yield of crops; it encourages manufacturing industries near their homes; it builds up villages and cities; it takes men from farms and puts them into factories, changing them from producers to consumers of farm products; it increases the production of manufactured articles and cheapens their price; it keeps at home, to circulate among our own people, the money which must be paid for manufactured goods; it prevents our coin from leaving the country; it increases our trade with foreign countries; it keeps the balance of trade in our favor; it increases the comforts and happiness of our working people, by giving them plenty of work at good wages; it saves the farmers from being taxed to support the General Government, and makes the foreigner pay a large portion of these taxes: it makes the whole country prosperous; it invites immigration; it draws capital from foreign countries to this, and by making money more plenty here, it lessens the rate of interest and provides an income to pay off our public debt, to build up our navy and our merchant marine, and for needed public works; it provides for the "common defence," promotes the general welfare, and enormously increases the wealth of the nation and the prosperity and happiness of the whole people.
In view of all these important advantages resulting from a protective tariff it is difficult for true Americans to understand how any intelligent citizen can favor any party or candidate that advocates either free trade or a reduction of duties.