American Eloquence, Volume IV. (of 4) by Various

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The protectionist, relying upon the propositions I have thus hurriedly
discussed, urges many specious reasons for his system, to a few of which
only do I intend to call attention to-day.

In the first place, it is urged that protection will develop the
resources of a country, which without it would remain undeveloped.
Of course this, to be of advantage to a country, must be a general
aggregate increase of development, for if it be an increase of some
resources as a result of diminution in others, the people as a whole can
be no better off after protection than before. But the general resources
cannot be increased by a tariff. There can only be such an increase by
an addition to the disposable capital of the country to be applied to
the development of resources. But legislation cannot make this. If it
could it would only be necessary to enact laws indefinitely to increase
capital indefinitely. But, if any legislation could accomplish this,
it would not be protective legislation. As already shown, the theory
of protection is to make prices higher, in order to make business
profitable. This necessarily increases the expense of production, which
keeps foreign capital away, because it can be employed in the protected
industries more profit-ably elsewhere. The domestic capital, therefore,
must be relied upon for the proposed development. As legislation cannot
increase that capital, if it be tempted by the higher prices to the
business protected, it must be taken from some other business or
investment. If there are more workers in factories there will be
fewer artisans. If there are more workers in shops there will be fewer
farmers. If there are more in the towns there will be fewer in the
country. The only effect of protection, therefore, in this point
of view, can be to take capital from some employment to put it into
another, that the aggregate disposable capital cannot be increased, nor
the aggregate development of the resources of a country be greater with
a tariff than without.

But, secondly, it is said that protection increases the number of
industries, thereby diversifying labor and making a variety in the
occupations of a people who otherwise might be confined to a single
branch of employment. This argument proceeds upon the assumption that
there would be no diversification of labor without protection. In other
words, it is assumed that but for protection our people would devote
themselves to agriculture. This, however, is not true. Even if a
community were purely agricultural, the necessities of the situation
would make diversification of industry. There must be blacksmiths,
and shoemakers, and millers, and merchants, and carpenters, and other
artisans. To each one of these employments, as population increases,
more and more will devote themselves, and with each year new demands
will spring up, which will create new industries to supply them. I was
born in the midst of a splendid farming country. The business of nine
tenths of the people of my native county was farming. My intelligent
boyhood was spent there from 1850 to 1860, when there was no tariff for
protection. There were thriving towns for the general trading. There
were woollen mills and operatives. There were flouring mills and
millers. There were iron founders and their employes. There were
artisans of every description. There were grocers and merchants, with
every variety of goods and wares for sale; there were banks and
bankers; there was all the diversification of industry that a thriving,
industrious, and intelligent community required; not established by
protection nor by government aid, but growing naturally out of the
wants and necessities of the people. Such a diversification is always
healthful, because it is natural, and will continue so long as the
people are industrious and thrifty. The diversification which protection
makes is forced and artificial. Suppose protection had come to my native
county to further diversify industries. It would have begun by giving
higher prices to some industry already established, or profits greater
than the average rate to some new industry which it would have started.
This would have disturbed the natural order. It would necessarily have
embarrassed some interests to help the protected ones. The loss in the
most favorable view would have been equal to the gain, and besides trade
would inevitably have been annoyed by the obstruction of its natural
channels.

The worst feature of this kind of diversified industry is that the
protected ones never willingly give up the government aid. They scare at
competition as a child at a ghost. As soon as the markets seem against
them, they rush to Congress for further help. They are never content
with the protection they have; they are always eager for more. In this
dependence upon the government bounty the persons protected learn to
distrust themselves; and protection therefore inevitably destroys that
manly, sturdy spirit of individuality and independence which should
characterize the successful American business man.

Thirdly, it is said that protection gives increased employment to labor
and enhances the wages of workingmen. For a long time no position was
more strenuously insisted upon by the advocates of the protective system
than that the wages of labor would be increased under it. At this point
in the discussion I shall only undertake to show that it is impossible
that protection should produce this result. What determines the amount
of wages paid? Some maintain that it is the amount of the wage fund
existing at the time that the labor is done. Under this theory it is
claimed that, at any given time, there is a certain amount of capital to
be applied to the payment of wages, as certain and fixed as though its
amount had been determined in advance. Others maintain that the amount
of wages is fixed by what the laborer makes, or, in other words, by the
product of his work, and that, therefore, his wage is determined by the
efficiency of his labor alone. Both these views are partly true. The
wages of the laborer are undoubtedly determined by the efficiency of his
work, but the aggregate amount paid for labor cannot exceed the
amount properly chargeable to the wage fund without in a little time
diminishing the profits of production and ultimately the quantity of
labor employed.'

But, whichever theory be true, it is clear that protection can add
nothing to the amount of wages. It cannot increase the amount of capital
applicable to the payment of wages, unless it can be shown that the
aggregate capital of a country can be increased by legislation; nor
can it add to the efficiency of labor, for that depends upon individual
effort exclusively. A man who makes little in a day now may in a year
make much more in the same time; his labor has become more efficient.
Whether this shalt be done depends on the taste, temperament,
application, aptitude, and skill of the individual. No one will pretend
that protection can increase the aggregate of these qualities in
the labor of the country. The result is that it is impossible for
protection, either by adding to the wage fund or by increasing the
efficiency of labor, to enhance the wages of laboring men, a theory
which I shall shortly show is incontrovertibly established by the facts.

I will now, Mr. Chairman, briefly present a few of the principal
objections to a tariff for protection. As has been shown, the basis of
protection is an increase in the price of the protected products. Who
pays this increased price? I shall not stop now to consider the argument
often urged that it is paid by the foreign producer, because it can be
easily shown to the contrary by every one's experience. I shall for
this argument assume it as demonstrated that the increase of price which
protection makes is paid by the consumer. This suggests the first great
objection to protection, that it compels the consumer to pay more for
goods than they are really worth, ostensibly to help the business of a
producer. Now consumers constitute the vast majority of the people. The
producers of protected articles are few in comparison with them. It is
true that most men are both producers and consumers. But, for the great
majority, there is little or no protection for what they produce, but
large protection for what they consume. The tariff is principally levied
upon woollen goods, lumber, furniture, stoves and other manufactured
articles of iron, and upon sugar and salt. The necessities of life are
weighted with the burden. It is out of the necessities of the people,
therefore, that the money is realized to support the protective system.
I say, Mr. Chairman, that it is beyond the sphere of true governmental
power to tax one man to help the business of another. It is, by power,
taking money from one to give it to another. This is robbery, nothing
more nor less. When a man earns a dollar it is his own; and no power of
reasoning can justify the legislative power in taking it from him except
for the uses of the government.

Yet, Mr. Chairman, the present tariff takes hundreds of millions of
dollars every year from the farmer, the laborer, and other consumers,
under the claim of enriching the manufacturer. It may not be much for
each one to contribute, yet in the aggregate it is an enormous sum. For
many, too, it is very much. The statistics will show that every head of
a family who receives four hundred dollars a year in wages pays at least
one hundred dollars on account of protection. Put such a tax on all
incomes and the country would be in a ferment of excitement until it was
removed. But it is upon the poor and lowly that the tax is placed,
and their voices are not often heard in shaping the policies of tariff
legislation. I repeat, the product of one's labor is his own. It is his
highest right, subject only to the necessities of the government, to do
with it as he pleases. Protection invades, destroys that right. It ought
to be destroyed, until every American freeman can spend his money where
it will be of the most service to him.

To illustrate the cost of protection to the consumer, consider its
operation in increasing the price of two or three of the leading
articles protected. Take paper for example. The duty on that commodity
is twenty per cent. ad valorem. Most of the articles which enter
into its manufacture or are required in the process of making it are
increased in price by protection. The result is that the price of paper
to the consumer is increased nearly fifteen per cent.; that is, if the
tariff were taken off paper and the articles used in its manufacture,
paper would be fifteen per cent. cheaper to the buyer. The paper-mills
for five years have produced nearly one hundred millions of dollars'
worth of paper a year. The consumers have been compelled to pay fifteen
millions a year to the manufacturer more than the paper could have
been bought for without the tariff. In five years this has amounted to
$75,000,000, an immense sum paid to protection. It is a tax upon books
and newspapers; it is a tax upon intelligence; it is a premium upon
ignorance. So heavy had the burden of this tax become that every
newspaper man in the district I have the honor to represent has appealed
to Congress to take the duty off. The government has derived little
revenue from the paper duty. It has gone almost entirely to the
manufacturer, who himself has not been benefited as anticipated, as will
presently be seen. These burdens have been imposed to protect the paper
manufacturer against the foreigner, in face of the confident prediction
made by one of the most experienced paper men in the country, that
if all protection were taken off paper and the material used in its
manufacture, the manufacturer would be able to successfully compete with
the foreigner in nearly every desirable market in the world.

Take blankets also for example. The tariff on coarse blankets is nearly
one hundred per cent. ad valorem. They can be bought in most of the
markets of the world for two dollars a pair. Yet our poor, who use the
most of that grade of blankets, are compelled to pay about four
dollars a pair. The government derives little revenue from it, as the
importation of these blankets for years has been trifling. This tax
has been a heavy burden upon the poor during this severe winter, a tax
running into the millions to support protection. Heaven save a country
from a system which begrudges to the shivering poor the blankets to make
them comfortable in the winter and the cold!

Secondly, protection has diminished the income of the laborer from his
wages. The first factor in the ascertainment of the value of wages is
their purchasing power, or how much can be bought with them. If in one
country the wages are five dollars a day and in another only one dollar,
if the laborer can in the one country with the one dollar, purchase more
of the necessary articles required in daily consumption, he, in fact,
is better paid than the former in the other who gets five dollars a day.
Admit for a moment that protection raises the wages of the laborer, it
also raises the price of nearly all the necessaries of life, and what he
makes in wages he more than loses in the increase of prices of what he
is obliged to buy. As already stated, a head of a family who earns $400
per year is compelled to pay $100 more for what he needs, on account of
protection. What difference is it to him whether the $100 are taken out
of his wages before they are paid, or taken from him afterward in the
increased price of articles he cannot get along without? In both cases
he really receives only $300 for his year's labor. The statistics show
that the average increased cost of twelve articles most required in
daily consumption in 1874 over 1860 was ninety-two per cent., while the
average increase of wages of eight artisans, cabinet-makers, coopers,
carpenters, painters, shoemakers, tail-ors, tanners, and tinsmiths, was
only sixty per cent., demonstrating that the purchasing power of labor
had under protection in thirteen years depreciated 19.5 per cent.
But protection has not even raised the nominal wages in most of the
unprotected industries. I find that the wages of the farm hand, the day
laborer, and the ordinary artisan are in most places now no higher than
they were in 1860.

But it is confidently asserted that the wages of laborers in the
protected industries are higher because of protection. Admit it. I have
not the figures for 1880, but in 1870 there were not 500,000 of them;
but of the laborers in other industries there were 12,000,000, exclusive
of those in agriculture, who were 6,000,000 more. Why should the wages
of the half million be increased beyond their natural rate, while
those of the others remain unchanged? More--why should the wages of
the 18,000,000 be diminished that those of the half million may be
increased? For an increase cannot be made in the wage rate of one class
without a proportionate decrease in that of others. But the wages
of labor in protected industries are not permanently increased by
protection. Another very important factor in ascertaining the value
of wages is the continuance or the steadiness of the employment. Two
dollars a day for half the year is no more than a dollar a day for the
whole year. Employment in most protected industries is spasmodic. In the
leading industries for the past ten years employment has not averaged
more than three fourths of the time, and not at very high wages. Within
the last year manufacturers of silk, carpets, nails and many other
articles of iron, of various kinds of glassware and furniture, and coal
producers have shut down their works for a part of the time, or reduced
the hours of labor. Production has been too great. To stop this and
prevent the reduction of profits through increasing competition, the
first thing done is to diminish the production, thus turning employes
out of employment. Wages are diminished or stopped until times are flush
again. With the time estimated in which the laborers are not at work,
the average rate of wages for the ten years preceding 1880 did not equal
the wages in similar industries for the ten years preceding 1860 under a
revenue tariff. Indeed, in many branches the wages have not been so high
as those received by the pauper labor, so-called, in Europe. But it is
manifest that the wages in these industries cannot for any long period
be higher than the average rate in the community, for, if the wages be
higher, labor will crowd into the employments thus favored until the
rate is brought down to the general level. So true is this, that it
is admitted by many protectionists that wages are not higher in the
protected industries than in others.

Thirdly, the effect of protection is disastrous to most of the protected
industries themselves. We have seen that many of them have in recent
years been compelled to diminish production. The cause of this is
manifest. Production confines them to the American market. The high
prices they are compelled to pay for protected materials which enter
into the manufacture of their products disable them from going into the
foreign market. The profits which they make under the first impulse of
protection invite others into the same business. As a result, therefore,
more goods are made than the American market can consume. Prices go down
to some extent through the competition, but rarely under the cost
of production, increased, as we have seen, by the enhanced price of
material required. The losses threatened by such competition are sought
to be averted by the diminution of production. Combinations of those
interested are formed to stop work or reduce it until the stock on hand
has been consumed. Production then begins again and continues until
the same necessity calls again for the same remedy. But this remedy is
arbitrary, capricious, and unsatisfactory. Some will not enter into the
combination at all. Others will secretly violate the agreement from the
beginning. Others still, when their surplus stock has been sold, and
before the general price has risen, will begin to manufacture again.
There is no power to enforce any bargain they have made, and they find
the plan only imperfectly curing the difficulty. They remain uncertain
what to do, embarrassed and doubtful as to the future. They have through
protection violated the natural laws of supply and demand, and human
regulations are powerless to relieve them from the penalty.

Take, as an illustration of the operation of the system, the article of
paper. One of the first effects of the general tariff was to increase
the price of nearly every thing the manufacturer required to make the
paper. Fifteen mil-lions of dollars a year through the protection are
taken from the consumer. The manufacturer himself is able to retain
but a small part of it, as he is obliged to pay to some other protected
industry for its products, they in turn to some others who furnished
them with protected articles for their use, and so on to the end. The
result is that nominal prices are raised all around; the consumers pay
the fifteen millions, while nobody receives any substantial benefit,
because what one makes in the increased price of his product he loses
in the increased price he is obliged to pay for the required products
of others. The consumer is the loser, and though competition may
occasionally reduce prices for him to a reasonable rate, it never to any
appreciable extent compensates him for the losses he sustains through
the enhanced price which the protective system inevitably causes.

It is not to be disputed that many of the protected manufacturers have
grown rich. In very many cases I think it can be demonstrated that their
wealth has resulted from some patent which has given them a monopoly in
particular branches of manufacturing, or from some other advantage which
they have employed exclusively in their business. In such cases they
would have prospered without protection as with it. I think there are
few, except in the very inception of a manufacturing enterprise, or in
abnormal cases growing out of war or destruction of property, or the
combinations of large amounts of capital, where protection alone has
enriched men. The result is the robbery of the consumer with no ultimate
good to most of the protective industries.

At a meeting of the textile manufacturers in Philadelphia the other
day, one of the leading men in that interest said: "The fact is that the
textile manufacturers of Philadelphia, the centre of the American trade,
are fast approaching a crisis, and realize that something must be done,
and that soon. Cotton and woollen mills are fast springing up over the
South and West, and the prospects are that we will soon lose much of
our trade in the coarse fabrics by reason of cheap competition. The
only thing we can do, therefore, is to turn our attention to the higher
plane, and endeavor to make goods equal to those imported. We cannot do
this now, because we have not a sufficient supply either of the culture
which begets designs, or of the skill which manipulates the fibres."

What a commentary this upon protection, which has brought to such
a crisis one of the chief industries protected, and which is here
confessed to have failed, after twenty years, to enable it to compete
even in our own markets with foreign goods of the finer quality! What
is true of textile manufacturing is also true of many other industries.
What remedy, then, will afford the American manufacturer relief? Not
the one here suggested of increasing the manufacture of goods of finer
quality, for, aside from the impracticability of the plan, this will
only aggravate the difficulty by adding to the aggregate stock in the
home market. * * * The American demand cannot consume what they produce.
They must therefore enlarge their market or stop production. To adopt
the latter course is to invite ruin. The market cannot be increased in
this country. It must be found in other countries. Foreign markets must
be sought. But these cannot be opened as long as we close our markets
to their products, with which alone, in most instances, they can buy; in
other words, as long as we continue the protective system.

I say, therefore, to the American manufacturer, sooner or later you
must choose between the alternatives of ruin or the abandonment of
protection. Why hesitate in the decision? Are not Canada and South
America and Mexico your natural markets? England now supplies them with
almost all the foreign goods they buy. Why should not you? Your coal
and iron lie together in the mountain side, and can almost be dropped
without carriage into your furnaces; while in England the miners must
go thousands of feet under the earth for those products. * * * The
situation is yours. Break down your protective barrier. All the world
will soon do the same. Their walls will disappear when ours fall. Open
every market of the world to your products; give steady employment to
your laborers. In a little while you will have the reward which nature
always gives to those who obey her laws, and will escape the ruin
which many of your most intelligent opera-tors see impending over your
industries.

I have not time to-day to more than refer to the ruinous effect of
protection upon our carrying trade. In 1856, seventy-five per cent.
of the total value of our imports and exports was carried in American
vessels; while in 1879 but seventeen per cent. was carried in such
vessels, and in 1880 the proportion was still less. In 1855, 381 ships
and barks were built in the United States, while in 1879 there were
only 37. It is a question of very few years at this rate until American
vessels and the American flag will disappear from the high seas.
Protection has more than all else to do with the prostration of this
trade. It accomplishes this result (1) by enhancing the price of the
materials which enter into the construction of vessels, so that our
ship-builders cannot compete with foreigners engaged in the same
business; (2) by increasing the cost of domestic production so that
American manufactured goods cannot profitably be exported; and (3) by
disabling our merchants from bringing back on their return trips foreign
cargoes in exchange for our products.

Nor will I say any thing as to the increase of the crime of smuggling
under protection, a crime which has done incalculable harm to honest
dealers, particularly on the border, and a crime out of which some of
the largest fortunes in the country have been made.

There are many who will admit the abstract justice of much that I have
said who profess to believe that it will not do to disturb the
tariff now. But for the protectionist that time never comes. When the
depression in business was universal, they said you must not disturb
the tariff now, because the times are so hard and there is so much
suffering. Now, when business has improved, they say you must not
interfere with the tariff, because times are good and you may bring
suffering again. When the present tariff was first levied it was
defended as a temporary expedient only, required as a necessity by war.
Now that a quarter of a century nearly has passed by and peace has
been restored for fifteen years, the advocates for protection are as
determined to hold on to the government bounty as ever. If they are to
be consulted upon the subject as to when the people shall have relief,
the system will be perpetual.

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