Imágenes de páginas
PDF
EPUB

Are Free-Traders Honest?

The above question is a natural one and frequently asked. The presumption of sincere Protectionists, familiar with their country's history, is that a Free Trader must be either dishonest or ignorant, and, in all charity, the latter is accepted without argument, though not always true.

Free-Trade will be wrong in theory and practice so long as there is a difference in cost of production and so long as a home market is preferable to a foreign market. If then, Free-Trade is wrong in principle and fact, Free-Traders must be wrong. But do they know they are wrong? Did David A. Wells and Prof. W. G. Sumner-who were certainly not ignorant-know they were wrong? Does Prof. Taussig, an acknowledged scholar, know he is wrong? Did Grover Cleveland know he was wrong? Does Woodrow Wilson know he is wrong? As throwing some light on the matter, we present the following statement by the Editor of The American, in its November issue. It is a story told to him by Carl Schurz, as follows:

"In 1884, after Grover Cleveland had been elected President of the United States the first time, he asked me to come and see him. It was late in November or early in December.

"When I called, Cleveland, with characteristic directness, asked me what big question I thought he ought to take up when he got into the White House. I told him I thought he ought to take up the Tariff. I shall never forget what then happened. The man bent forward and buried his face in his hands on the table before him. After two or three minutes he straightened up, and with the same directness said slowly and solemnly: am ashamed to say it; but the truth is: I know nothing at all about the Tariff. Will you help me? Will you tell me how to go about it to learn?'

'I

[blocks in formation]

honesty means justice and fairness and loyalty.

What of Woodrow Wilson? He became President March 4, 1913, and approved the existing Free-Trade law just seven months afterwards. He knew little, if anything, about the practical side of the Tariff when inaugurated. He had no time to give it exhaustive study before October 3. He, too, was wrong, even more so than Cleveland, for Cleveland had become a convert while Wilson was simply a blind partisan.

Now, in order that the writer may not, also, convict himself of partisanship, the instance of another President, this time a Republican and a Professed Protectionist, being wrong because ignorant, should be cited.

The Payne-Aldrich law was enacted at a special session of the 61st Congress and was approved by President Taft August 5, 1909. The Dingley law of 1897 had been most successful and was attended by unprecedented prosperity, but there had been a hue and cry for Tariff revision, and the Payne-Aldrich law was the

response.

was

Still a certain class of so-called "Tariff reformers" was not satisfied and the Wool Schedule (K) was bitterly assailed. Finally President Taft was reported as saying that "Schedule K was indefensible," in which connection subsequently reported the following, which has never been denied to the writer's knowledge. A group of woolen men was assembled at the White House to discuss the subject. The spokesman said to Mr. Taft:

"Mr. President, we should like to present certain data for your consideration, but if your opinion is irrevocable that 'Schedule K is indefensible,' it will be useless to waste your time and ours."

"Ah," answered the genial President, "I really know nothing about it, I heard Congressman the expression and as I thought it pretty pat I repeated it."

use

So President Taft, too, was wrong and not honest because he did not acquaint himself with the facts. Mr. Taft showed further ignorance of his country's best interests when he fathered the Canadian Reciprocity Scheme, which fortunately was not accepted by Canada. It was not a fair proposition that gave a market of 100,000,000 people in exchange for a market of 7,000,000.

The Tariff is not a matter of guesswork. We have the experiences of a century to guide us. We have the experiences of other nations. We have the annual and monthly reports of exports and imports and revenue, and we have the dedetailed record of business failures and industrial progress.

Reference has been made to only three Presidents who were ignorant of the provisions which they approved or accepted. Reference could also be made to Harrison and McKinley, who were honest because they knew, not only the principles, but the practical side, of the Tar

iff. And right here it may be added that our coming President knows the Tariff question from A to Z, and when he approves of the Fordney-Penrose bill he will do so understandingly.

Another phase of the question is that of selfishness. A selfish man or nation is not necessarily dishonest. Protectionists are selfial rather than selfish because they want a Tariff that will protect the labor and industry of their own country, because they want to maintain American wages and our standard of living. If it be right and glorious to fight for one's country, why should it not be just as right and glorious to so legislate?

a

And right here comes the difference between national selfishness and sectional selfishness. Webster was once a FreeTrader and Calhoun Protectionist. There came a time when Webster knew Protection was better for New England and when Calhoun believed Free-Trade would be better for the South, and each changed to the Tariff view of the other.

But conditions have changed, because sectional conditions have become national, and though the Protectionist is now, as always, nationally selfish, the FreeTrader remains sectionally selfish.

For a century all of our Protective Tariffs have been framed for the benefit of the whole country, and all our FreeTrade Tariffs have been framed for the benefit of the South. To be more explicit, the Protective Tariffs of 1824, 1828, 1842, 1861, 1890, 1897 and 1909 were in the interests of all labor, and all industry in all parts of the country; while the Tariffs of 1833, 1846, 1857, 1893 and 1913 were all framed by Southerners in the interests of the South. Slavery, cotton and Free-Trade were an inseparable trio. Since the Civil War we have had two Free-Trade laws, that of 1893 and the existing law. Both were framed by committees and a Congress under the control and domination of the South, and both gave Protection to Southern products and little or no protection to Northern products.

We must conclude, then, that FreeTraders are sometimes ignorant and sometimes not honest.

An official report from the Department of Agriculture at Washington announces that it cost the American taxpayers something over $500,000,000 last year to fight foreign insects. Yet when Candidate Cox announced that the Protective Tariff party was raising a (fictitious) fund of $15,000,000 with which to exterminate the most destructive foreign pest of them all, alien market products admitted under Free-Trade, the party of Free-Trade set up a howl that re-echoed from the sands of Maine to the coast of California. O consistency, they name is not Woodrow nor Cox!

[blocks in formation]

Correspondence AMERICAN ECONOMIST. WASHINGTON, Jan. 11. The first week of the Tariff hearings before the Ways and Means Committee has emphasized the necessity of the speedy passage of interim Tariff legislation. The existing schedules of the Underwood-Simons law long since demonstrated their inadequacy both as revenue producers and as safeguards against foreign dumping. The prospects of genuine Tariff legislation during the coming special session put a decided premium upon heavy imports particularly of the commodities which are most certain to receive the Protection of higher rates. The fact that certain German industries, particularly in the chemical line are now in positon to export in quantities great enough to swamp the American markets also has served to awaken the need of an immediate imposition of a genuine Tariff schedule to cover the interim which must elapse before the intricate details of the new Tariff law can be worked out.

In line with the suggestion of the AMERICAN- ECONOMIST that either the Dingley or the Payne-Aldrich schedules be re-enacted to cover this situation, Representative Crowther of New York has introduced a bill to re-enact the Dingley schedule. Representative Begg of Ohio has already introduced a similar measure to put into operation the Payne-Aldrich schedules.

No action is likely at the present session upon either of these proposals. In fact there are less than 50 legislative days remaining and most of that time will be taken up by appropriations legislation. Chairman Fordney of the House Ways and Means Committee favors this form of interim legislation and there is considerable support for his position among other members of the committee, but so far no definite action has crystalized. Chairman Fordney still expects to discuss this question with President-elect Harding with a view to obtaining from him an opinion as to whether the Dingley schedules or the Payne-Aldrich measure should be used for this purpose.

There has been some talk also of causing one or the other of these bills to cover a definite 18-months period and to postpone the enactment of the final Tariff

revision until 1922, to give the present international economic situation time to clarify.

The Senate Finance Committee also held hearings on the Emergency Tariff legislation. All the evidence brought out emphasized the need for immediate action to safeguard American agriculture. The Committee is expected to increase some of the House rates and to report a bill for favorable action. There is still no likelihood, however, of its final enactment into law. The Free-Trade Democrats are strong enough in the Senate to prevent such legislation-thanks to the shortness of the session-and if they were not, a veto by President Wilson would insure its death.

It is interesting to note that despite this fact no Washington observer has been reckless enough to deny that the grain markets of the country have repeatedly recorded higher prices because of reports that the measure would be passed. Although this reveals the general gullibility of brokers whether they are bulls or bears, it also casts an interesting sidelight on the fact that actual legislation would have in protecting the Amercan farmer. If a rumor that Washington is about to act favorably upon such a bill can, within an hour, add 4 cents to the price of a bushel of wheat on the Chicago Board of Trade, the enactment of a bill would certainly have a far more decisive effect.

The future of the emergency measure, however, will now be determined by politics. There is a general consensus that the measure is doomed and the only question now lies in the method of its execution. Republican leaders of the Senate are now trying to put the measure in such a shape that its death will be certain to be blamed upon the Free-Trade Democrats and the short fight that is left will center upon this strategy. Because Senator Penrose, Chairman of the Senate Finance Committee, had been reported as an avowed opponent of the emergency legislation, he was subjected to vigorous attacks. This brought forth from him a statement declaring that he favored the measure and that he would do all he could to secure its passage. In his statement he said:

"I desire to correct a statement which seems to have gotten abroad concerning the status of the so-called emergency Tariff bill. There is really no difference of opinion among Republicans upon this measure. There have been those who thought that the Tariff question ought to be taken up with general revenue legislation when a new Congress met with a good working majority in all branches. On the other hand, it is strongly and fairly contended that this measure is an emergency one urgently needed by certain industries in the country, chiefly those of livestock and agriculture.

emergency

"As a consistent Protectionist all my life, in season and out, I have advocated adequate Protection for every industry throughout the country, regardless of section. Hence, I would be the last man in the country to hesitate about supporting an measure of this kind, if in the opinion of my colleagues it is urgently required. shall, therefore, support this bill and do what I can to secure its pasage at the present session of Congress. It is my belief that the rates in the pending bill should be modified somewhat and if the Senate takes this

I

view I sincerely hope that the House will consent to these modifications.

"The impression that has been spread before the public that there is any difference or rivalry between the manufacturing East and the more agricultural South and West on this Tariff bill is absolutely without foundation. The Eastern States are as earnestly in favor of adequate Protection for the farming interests as for any other industry in the country. None realize more keenly than I do the importance of agriculture to the prosperity of the country. The conservation of the home market has always been a cardinal doctrine of Protection. As far as I have been personally concerned I represent a State among the foremost in agricultural interests and therefore am fully alive to the needs of agriculture."

Hearings before the House Committee are scheduled to run until the middle of February. The first witnesses to be heard covered the chemical schedule. All of their evidence, except that of a few importers, favored the higher rates. Later schedules are expected to bring out the conflict between producers and consumers. At that time it is likely that there will be greater efforts to induce the Committee to check the upward tendency of the Tariff rates.

American manufacturers who appeared before the Committee in the hearings on the chemical schedule told the Representatives that the dumping of foreign ware upon the American market had already begun and insisted that action must be taken, even before the general revision of the Tariff is possible, to protect domestic production against this deluge of goods. They declared that in many industries goods are being brought into the country at prices below the actual production cost for the purpose of destroying American industries, especially those developed during the war. P. W. Drackett, of Cincinnati, representing the Epsom salts manufacturers of the United States told the Committee that the German Cartel which controls the German production of Epsom salts has already resumed the policy of dumping its surplus in the United States at ruinously low prices. He declared that if the American industry were afforded adequate Protection, we could easily supply the entire needs of the United States. C. McCafferty, of the American Alkali and Acid Co., of Bradford, Pa., said that oxalic acid imports from Germany had already forced the closing of three oxalic acid plants belonging to rival companies, and that his own had also been forced to shut down because of competition.

Representative Henry T. Rainey, of IIlinois, seemed to resent this fear of German industries.

"After we have killed a few million Germans," declared Mr. Rainey, "then you gentlemen come back here more frightened of the Germans than ever."

H. M. May, of the Exchange By-Products Company of Corona, California, argued for higher duties on citric acid, extract of lemon, and oil of lemon, declared that the 1919 schedule had been written before the lemon producers had perfected their efforts to salvage unsaleable fruit and declared that Protection would be necessary to maintain the citric acid industry, particularly against the Italian producers who are backed by Government support. The only witnesses opposing the increased duties were representatives from the Italian Chamber of Commerce in New York, and of the olive oil importers of that city. They declared that California production of olive oil is not large enough to need Protection, and insisted that the costs of olive oil have increased so much that it can not hold its own against American substitutes, such as peanut oil.

The Republican Publicity Association issued a timely warning last week, against the Free-Trade propaganda that is already coming from "international financial interests." The statement said:

"Whenever Tariff legislation is under consideration in Congress the adequate Protection of American industry is made more difficult by the fact that large financial interests in America are directly allied with the foreign interests which desire a free entry into American markets. These interests, antagonistic to American industry, are of two different kinds: first, we have the American importers of foreign goods who desire to secure their commodities at the lowest possible price, and reap the largest possible profit by the sale of those goods to the American consumer. Second, we have American financiers who have made large investments abroad and who desire to make collection of their credits more easy by the shifting of the balance of trade more favorable to foreign countries.

"During the European war American manufacturers, particularly of war materials, made extensive sales to the Allies. These sales were made at war-time prices and largely on credit. The credits were carried largely by the bankers-bankers of the class usually designated as international bankers. These international bankers are finding difficulty in collecting money due them because the balance of trade has been running so heavily against European countries. The debtor wishes to defer payment until the rate of exchange can be brought to a more normal ratio, and this can be accomplished only by an adjustment of foreign trade more favorable to European countries. Larger exports to America and smaller_imports from America are desired by European countries in order that they may pay their debts with goods rather than with money.

"It will readily be observed that the interest of the international banker is practically identical with that of the European producer. But it will also be readily apparent that the interests of the American producer are adverse to those of the European producer. Every yard of cloth manufactured in Europe and sold in America means one yard less of cloth manufactured in American mills by the employment of American labor and the use of American capital. Every foreign commodity of any character sold in America means the displacement in our markets of a similar quantity of the same commodity produced in the United States.

"Manifestly the United States can not go on indefinitely selling to other countries more than it buys from them in goods or in services. There must sometime be a balancing of accounts. Recognizing this, no one asks that there shall be a bar raised against the sale of foreign commodities in the United States. The most ardent Protectionist does not demand the enactment of a prohibitive Tariff law, but there has always been a demand among Republicans, and in recent months among Democrats as well, for the enactment of a Tariff whose schedules shall be based upon the principle of the imposition of an import duty which shall equal the difference in cost of production here and in foreign countries. We are willing that European and Asiatic countries shall ship us some goods. We are not willing that they shall send them at prices with which the American producer can not compete.

"American Protectionists have

no war

to make upon the international banker who has financed sales to European countries. It is desired that he shall collect every dollar that is due him. But, on the other hand. the American people will strenuously oppose the continuance of an economic situation which permits a foreigner to market his products in the United States at prices which are ruinous to the American competing producer. While the international banker is solicitous for the welfare of the foreign producer. the American banker, who has financed American industries, is also anxious that nothing shall be done that will bring ruin to

American factories and consequent unemployment to American labor." OSWALD F. SCHUETTE.

GERMAN ΤΟΥ ΜΕΝΑACE.

American Producers Would Amend Tariff Law to Keep Out Low Priced Goods.

To what extent German toys are competing in the markets against those of American manufacture is a subject being investigated by toy-makers here in the hope of putting through Congress an amendment to the Tariff Law to protect the American manufacturer. The low exchange value of European currency, especially that of Germany, as compared with American currency operates against the American producer. If a German toy costs a mark to make, the duty is not paid on the pre-war value of the mark, which was 23 8/10 cents, but on its depreciated value of 11⁄2 cents. Thus it is readily seen the Tariff levy on German toys, as well as every other product shipped here from Germany, is really very small as compared with the tax collected in the pre-war days.

One American manufacturer of toys reported to the American Protective Tariff League that he would be driven out of business if Washington doesn't act speedily. The German product as good as his-he said was being imported, the duty paid and sold to the retaller for half the price it costs him to turn out his goods. This complaint is general among American toy manufactur

ers.

Foreign toys, like all other merchandise, are being imported at a fraction of their real value in American currency and this, American producers say, is driving domestic importers to patronize foreign instead of doThe effect of this is to mestic producers. add to American imports and diminish exports.

The American Protective Tariff League estimates there are $200,000.000 worth of foreign goods in bonded warehouses here. The American toy-makers, however, declare that unless Congress takes steps to collect duties on foreign toys at their real value in United States currency they will have to junk their businesses. They add that many of the American toys are being made by ex-soldiers whose wounds, incurred in fighting the Germans, have rendered them unfit for more active em

ployment.

The records show that in 1914 Germany sent $7,718,854 worth of toys to the United States. During the war Germany ceased to be the world's greatest toymaking nation. With the war ended, however, Germany resumed the manufacture of toys. Importations of toys by America this year from Germany amount to $3,803,484. This represents a gain of 50 per cent. within two years since the armistice and was made in the face of a prediction that Germany had lost America as a market for toys.

According to official statistics, Japan has Increased her toy sales to the United States from $435,000 in 1914 to $6,075,000 this year. The export of toys by the United States in 1914 was $809.120. Incomplete figures for 1920 indicate exports of about $3,500,000.New York World, 12.26.20.

о

The Under Dog.

Under the Underwood Tariff, now the law, the United States is the under dog, and has no means of preventing the dumping of goods made by the cheap, half-starved labor of Europe, in competition with articles produced by our high-priced workmen. And yet the Democrats tell you the present tariff law has justified itself! The war prevented its operation. Don't be fooled. Here's something for you to think of: If you cannot produce on the same terms as foreign labor, Uncle Sam will patronize the foreigner. Don't you believe it? Ask the bean men of the Delta, and the wool men. They know. Byron (Calif.) Times, 10.29.20.

During the fiscal year to June, 1919, thirteen million dollars' worth of woolen goods were imported by the United States. During the year ending last June the amount was forty-three millions. Many textile mills in the United States are closed today and the wool-growers are pooling their wool because the price is so low and there is no market for it. What is the answer. A higher Tariff, the experts assert. - Wellsboro (Pa.) Agitator, 11.17.20.,

The Tariff and the Demand for Labor.

While the Democratic party and Democratic laws are still guiding the affairs of the nation wages are coming down.

During the war, Mr. Gompers declared that labor would never consent to a reduction of the war-time standards. The Republican Publicity Association assured Mr. Gompers that the Republican party would be glad to cooperate in an effort to maintain high standards for laboring people, and asserted that the most effective method yet devised is the Protective Tariff policy which Protects the American workman from destructive compeMr. Gompers tion with standards abroad. chose to throw what influence he had to the Democratic candidates.

Not even a Protective Tariff could sustain the high scale of wages reached during the war, but only a Protective Tariff will prevent the domination of the American market by foreign products. It may be a year or more before Europe and Asia get into their full stride of production for export, but ultimately the American market will be flooded unless a reasonably high barrier is erected in the form of Protective duties.

Time will demonstrate that the Republican party is the best friend of labor-of all labor, not union labor, merely and that the Protective principle is essential for American industrial prosperity. The war produced an effect equivalent to a prohibitive Tariff, and more. It not only shut off imports but it created a new and unprecedented market for American goods. The Republican party does not advocate a prohibitive Tariff, but merely one that represents at least the difference in cost of production here and abroad, making ample allowance for the higher standards of living we wish American workmen to enjoy.

In the readjustment movement now in progress, not all of the decline is due to the ending of the war. The Democratic Administration fostered inflation and now it is unintelligently forcing deflation. That is one of the chief causes of the slump. Then, again, during the period of inflation, people bought recklessly and created abnormal deCoincident with the demands for goods.

flation process, consumers have gone on a strike and will buy only necessaries, thus causing lack of demand for goods and corresponding decline in demand for labor. If, when the demand for goods returns to normal, we find the demand supplied from Europe and Asia, there will be no return of demand for American labor. As a matter of wise precaution, therefore, an early return to a Protective Tariff system is highly important.- Kitanning (Pa.) Free Press, 11.26.20.

[blocks in formation]

JAN 27 1921

American Economist

DEVOTED TO THE PROTECTION OF AMERICAN LABOR AND INDUSTRIES.

LXVII. No. 3

NEW YORK, JANUARY 21, 1921.

American Economist

Published Weekly by THE AMERICAN PROTECTIVE TARIFF LEAGUE

OFFICERS OF THE LEAGUE.

[blocks in formation]

President

1st Vice-President 2nd Vice-President Treasurer and

Why Repass the Payne-Aldrich Tariff Act?

It is evident to all thinking men that the next few months will be pregnant with danger for our domestic productive industries unless some safeguards be placed around them. The present Tariff would not be Protective, even in normal times. It is less so now. It was not designed as a Protective, but as a Revenue Tariff. That it has failed in both respects is universally recognized.

That it is the intent of the newly elected Congress to pass an up-to-date Protective Tariff measure is well known, but, in the meantime, foreign goods will continue to pour into this country, and domestic production will be correspondingly diminished. There should be some interim

General Secretary legislation to prevent such a calamity.

EXECUTIVE COMMITTEE.

Lyman B. Goff, R. I. William Einstein, N. J.
John H. Eastwood, N. J. W. Warren Barbour, N. Y.

Edward I. Goodrich, N. Y.
General Officers, ex-officio.

BOARD OF MANAGERS.

B. A. Van Winkle, Ind. Arthur J. Draper, N. C.
H. C. Lovis, N. Y. W. B. Maddock, N. J.
Frank H. Metcalf, Mass. F. A. Springer, Conn.
H. Sanborn Smith, Ala. W. Warren Barbour, N.Y.
William Sloane, Va. Frank B. Hopewell, Mass.
A. R. Wilson, New York Karl G. Roebling, N. J.
Lyman B. Goff, R. I. Joseph R. Grundy, Pa.
George R. Meyercord, Ill. A. H. Heisey, Ohio
Henry B. Joy, Michigan Joseph Stroock, N. Y.
Chester A. Braman, N. Y.

[blocks in formation]

a

It has been more than once proposed to make the new Tariff retroactive, but there are many valid objections which may be urged to that. They would not be conclusive but for the fact that better remedy may be applied. At the very best, any new Tariff is unsettling to business for a time. How much more so when the rates of duty imposed may not be the rates which will finally apply. To impose too low a rate of duty, only to call for an increased payment later on, will necessarily create a great deal of dissatisfaction. The goods will by the time of final payment have already gone into consumption at prices based upon the lower rate of duty. On the other hand, the imposition of a higher rate of duty than will be finally imposed is quite as unsatisfactory, although the importer finally receives a refund of the excess duty. A great feeling of uncertainty will necessarily exist for a considerable time after the new law shall have been finally enacted and become effective.

If a manufacturer should buy out the plant of another which had been shut down for a time, but which was in good running order, and should intend to erect a new factory with the latest improved machinery on an unoccupied portion of the ground which he has bought, he would hardly plan to erect a temporary factory and put in temporary machinery, in order to proceed with the manufacture of his line of goods. He would make use of the old factory until the permanent factory should be completed, even though the old factory should not be fully satisfactory. He would figure that the old machinery had been tried and had been proven capable of producing the desired goods.

$2.00 a Year. Single Copy 5 Cents.

There would be no question of readjustment, no question of loss of time and hence of money. He could go to work at once, and still proceed with the erection of the new factory building and with the installation of the new, modern machinery When that should be done, he could move out of the old and into the new without loss of time.

The Payne-Aldrich Tariff is a complete factory, with the machinery for its operation already to go to work when the power is turned on. It must be borne in mind that a new Tariff is hardly capable of producing the best results without a great deal of friction, without a great deal of adjustment, without a great deal of lining up and a great deal of lubrication. In other words, a new Tariff is not complete until its provisions have been judicially interpreted. The new Tariff will be interpreted in conjunction with the rulings made under former Tariffs. It is not possible for the Congress to so word the new law that it shall in all respects be construed in accordance with the intent of its framers. The law itself may seem plain when read alone, but when it is found that it is worded similarly to some former law and that such former law had been given a certain interpretation such intrepretation will govern, in the absence of positive evidence of the intent of the framers of the later law The "precedent" will be followed.

Regulations are necessary in order to make the new law effective, and the regulations under the former law may be wholly inapplicable to the new law. The formulation and promulgation of regulations take time. By the time any temporary Tariff shall have been accompanied by new and appropriate regulations, the Act itself may have expired through the enactment of a permanent Tariff.

Any temporary legislation must of necessity be hastily considered and its effects may be far different from those intended. The Payne-Aldrich Tariff was deliberately drawn; its provisions have been the subject of judicial interpretation; regulations to carry into effect its various provisions have been provided; customs officers are familiar with its provisions and effect, and the same is true of importers of merchandise. It would be as easy to put the Payne-Aldrich Tariff into effect, with certainty as to the results which would follow, as it would to turn on the power in a factory which is in full working order. Like ⚫ the factory, it may not be entirely up to date, but it is in better condition to answer our temporary needs than the one now in

operation, while it will create less confusion than any hastily conceived legislation or any retroactive provisions in the Tariff which shall be finally enacted.

Protection Not Prohibition.

Chairman Fordney of the Ways and Means Committee, in a statement made by him during the course of a hearing before the Committee of which he is chairman, authoritatively announced the position of the party of Protection on the subject of prohibitive rates of duty. He said that the party had never stood for an embargo, but for a rate of duty which, while giving the domestic producer the advantage over foreign producers in the markets of the United States, yet which is not so high as to be prohibitive. These are not his words, but his idea.

as

That has always been our position. We have been for Protection, not for Prohibition of imports. The domestic producer is entitled to the home market, if he can supply the demand. He is entitled to government Protection to that end, just as much he is entitled to Protection against foreign aggression against his life or his liberty. The relations between a government and its citizens are reciprocal. The government may call upon the citizen to take up arms in defense of the country, and the citizen may demand of the government its Protection in the exercise of his rights, in return. The government is supported by the contributions of its citizens and property owners in the way of taxes, and the citizens in turn may of right ask for the Protection for which they have paid. The sole purpose of government is the mutual Protection afforded by organized co-operation.

The Free-Trade press has much to say about the "Robber Tariff Barons," and "Robber Tariffs," but it is mainly nothing but talk, propaganda of the worst kind, because it is based upon misrepresentation. It is not true that many manufacturers have grown immensely rich through their manufactures alone, nor is it true that many farmers have grown very rich through farming operations alone. Especially is it not true that any have grown rich through Tariff Protection alone, not one. We know of farmers who have grown rich because they had the foresight to buy up large tracts of cheap land which had been abandoned by others, but the products of the others were afforded the same amount of Protection that was given to the products of the more successful and persevering.

We know of manufacturers who have grown rich through the monopoly granted to them through our patent laws, but we believe that few people complain of the patent laws, which have been a great encouragement to invention and of immense benefit to the general public. We know of other manufacturers who have had to go outside of their manufacturing plants

and establish selling agencies in order to reap any great measure of prosperity. We know of hundreds of manufacturers who have failed in business, although operating under the same laws and general conditions as did the few who have had any extraordinary measure of success.

It may be true that in some instances the Tariff has been placed so high on some certain commodity that it operated to exclude all importations, but that was not the result of the intent of the legislators who framed the law, but rather the result of inability to judge what the effect of the law would be. Every Congress must have in mind the raising of revenue from the importation of foreign goods and no Congress will place the rates so high as to entirely exclude importations.

It is natural for producers to seek an advantage. That is human nature, and they would be lacking in the ordinary traits of humanity if they did not do so. All that any producer is entitled to in the way of Tariff Protection, however, is a rate of duty sufficiently high to give him an advantage in the home market over the foreign producer. He does not ask to have the foreign products practically embargoed by a prohibitive rate of duty. The buyer has rights in the matter and he should not be prevented from buying the foreign product if he is willing to pay for the privilege.

Free-Traders have been wont to claim that "the Tariff is a tax which is added to the cost which the consumer must pay." That is literally true of imported articles, but it does not necessarily mean, even with them, that the consumer must pay a greater price on account of the Tariff. It often happens that the foreign producer will lower the price to meet the imposition or increase of a Tariff. It is also true that the imposition of a Tariff creates a domestic competition which brings the foreign market value of the article in question down to a lower level, even in the country of production. But it is not true, in any case, that the Tariff is a tax on domestic merchandise, nor, in the long run, that the price of the domestic article is increased because of the Tariff on the imported article. The first effect is usually a raising of the price of the domestic product, but, when the domestic industry becomes fully established, the invariable result is a lowering of the price

[blocks in formation]

That is what they should do, in any event. It is to their interest, from every point of view, that they should do so. We are all producers and all consumers, and our interests are mutual.

The Dye Industry and Others.

The dye industry of any country is an important part of its economic life. At the present time it is more important to the United States than it was before the war, vastly more so, for the reason that we now have a fully established dye industry where before we had a comparatively unimportant one. It is an industry which should have been developed long ago through adequate Tariff Protection, but such Protection was not extended and it owes its present development to the embargo in effect during the war. It does not follow, however, that such an embargo should be continued during times of peace. There are ample reasons why it is necessary for the needs of other industries that they should be permitted to import certain dyes provided they are willing to pay the price.

A writer in the January 7th issue of the New York Journal of Commerce, who is stated in the heading to be "a prominent member of the industry," among other things, has this to say:

"The claims made by the textile manufac turers that the establishment of a Licensing Committee to regulate the importation of dyestuffs would impose an unjust and undue tax upon their costs, becomes futile when it is realized that in an ordinary piece of woolen goods, such as serge, or in an ordinary printed cotton shirting or gingham, the total cost of the dyes used even at the present scale of prices, is less than 1 per cent."

That argument looks to us a great deal like beating the air, or like setting up a man of straw for the purpose of demolishing him. Certainly there are no such "claims made" by textile manufacturers. The reverse is true. Textile manufacturers have, with practical unanimity, professed themselves as willing to have any rates of duty which the dye manufacturers demand imposed upon foreign dyes, so long as the users of such dyes are permitted to exercise their option to import them, notwithstanding the high rates of duty, without the interference of any licensing organization. They prefer to use domestic dyes when they answer the purpose, but they do not wish to be deprived of the privilege of using foreign dyes if the domestic ones do not answer the purposes of the users. Of this, and of the quantities which they may import, they want to be the sole judges, without being subject to the restrictions, not to say the caprice, of any licensing body.

Nor are the textile manufacturers of this country alone in their opposition to the licensing system, or to an embargo. The British textile manufacturers have found from experience that the licensing system has given rise to a great deal of abuse and has deprived them of the use of needed dyes. The abuses of the dye li

« AnteriorContinuar »