TARIFF REVISION IN THE UNITED STATES, AND THE AGITATION FOR FREE TRADE.

Globe, Volume IX, Issue 1360, 24 June 1878, Page 3

TARIFF REVISION IN THE UNITED STATES, AND THE AGITATION FOR FREE TRADE.

(“Pall Mall Budget.”) Before Congress adjourned in the autumn a sub-committee was appointed to inquire concerning advisable alterations in the tariff and the internal revenue laws. The subcommittee consists of Messrs Ward (chairman), Gibson, Tucker, Burchard, and Banks. The on dit in New York is that this subcommittee is strongly in favor of reducing to six or seven hundred the present 2200 articles subject to tariff duties, prohibitive or protective. Mr Ward is described as being overwhelmed with masses of letters and petitions: “ 99 per cent, of those communications represent individual interests, and demand protection for the articles which the writers produce, and a free list for the raw materials they consume.” Meanwhile the Free Trade Club of New York have prepared and issued a timely and able petition for presentation at Washington, and are said to be obtaining to it an excellent array of signatures, not only among the general public, but from merchants and manufacturers as well. Here are a few passages: — « Xhe policy of fostering our domestic manufactures by protective duties was begun a hundred years ago, and we are now no nearer the promised goal than we were at the close of the War of the Revolution. The system was introduced under the idea that with a little temporary assistance the industries selected for this favoritism would become strong and independent. But from duties averaging about 84 per cent, in 1789 with the time of protection limited to seven years, the system has advanced to duties of 40, 50, 60, and even 125 per cent., with limit of time entirely removed. The same industries are protected now as wore protected at the beginning ; and, so far from being made strong and independent, they have through all these years compelled the steady increase of duties by their cries for help, and are to-day in a most distressed condition bankruptcies, stoppages, and strikes being the chief incidents of their deplorable history.” This passage is a conclusive comment on the most unfortunate error which Mr J. S, Mill admitted into his “ Principles of Political Economy,” to the effect that in the early years of a State or colony it might be sound policy to extend protection to selected industries for a limited time, in order to give them a chance of becoming “ strong and independent.” The limited time is an impossibility. The selected industries become powerful vested interests ; their trade, from the nature of the case, cannot be strong or independent in any real sense ; and hence the constant “ cries” and the ever-impending rum which not only prevent all removal of the original protection, but intensify it tenfold. It may be laid down ns a maxim of fiscal policy that in no case are protective duties so pernicious and far-reaching in their mischief as when adopted by new countries under the specious plea of being required for only a limited time and as a means of attaining strength and independence.” The petition goes on to give the real reasons which render this strength and independence impossible:— ... . , “ And this is not far to seek. Holding fast to the simple truth to ‘ protect’ one industry is to put a burden on other industries, we find it at once. If you ask, for example, why the great industry of clothing manufacture docs not flourish, we point you to the tariff table for an answer. Clothing wool is protected by a tax of 51 per cent., dyes are protected by 30 per cent., lining silks by 60 per cent., velvet by 60 per cent., and so on. Twisted silk thread is protected by 40 per cent,, spool thread7s per cent., alpaca lining 70 per cent., lining 40, foreign cloth 60 to 80 per cent., and even needles and other implements carry taxes of 25 per cent, and upwards. How can the American makers of clothing prosper under such a load? Supposing even that they can work the home market to its proper extent, how possibly can they compete with foreign makers and export goods ? They cannot, and they do not. England, France, Germany, and Switzerland increase their exports of clothing year by year, and to the very countries and to the markets of which the United States would naturally have the advantage Mexico, Canada,' Brazil, Chili, Peru, the Argentine Republic, Australia, and New As a fitting pendent to this statement ot the petitioners, it may be recorded as a fact that there hayo been numerous cases of persons living in New York finding, on careful calculation, that it was worth while to visit Montreal and bring from Jthenoo an outfit of wearing apparel. The petition then discusses the effect of this very vigorous policy of protection on the working man : “ We heartily agree with those supporters of the present protective tariff who declare that ‘ in this matter the interests of the laboring classes are as much at stake as those of their employers.’ It is only too bitterly true. . , . Pauperism and crime increase daily within our borders; skilled workmen tramp the country over in vain search for the means of living. In England, on the contrary, pauperism and crime have decreased in several of the largest cities, and the tide of emigration has greatly lessened. A day’s labor in England will now purchase from 25 to 30 per cent, more than a day’s labour in the United States. A silk operative in Lyons is far better off in all material comforts than a silk operative at Potsdam. . _. , The truth is that the working man is the man among all others who is most oppressed by the protective system. He does not receive an atom of protection himself, and he has to pay for the protection of every producer who ministers to his necessities. For everything he buys —his food, his clothing, his shelter—he has to pay from 20 to 100 per cent, more than the natural cost, because of protection. This it is which grinds him down. This it is which makes his portion to be privation and suffering in a land of boundless natural wealth. This it is which during the last twelve years has sown the seeds of communism and filled the hearts of hundreds of thousands with blind desires for revenge upon the social order which well or indifferently for the favored few works nothing for the toiler but hardship and suffering.” Then as regards that great and growing interest of agriculture' represented by the rapidly filling States of the West and NorthW>st the States to which the next census of 1880 will give, under the decennial revision ot representative power, a majority in Congress, which, when united, will be supreme — “ It is in no wise surprising that despite the most abundant harvests for several years past our farming countries are scourged by poverty, harassed by debt, and filled with the miseries of forced sales and mortgage foreclosures. . . . Everything t lie American farmer buys is protected, iind overytiiing lio sells is sold in a free market. The limber ioi his barn is taxed 20 per cent.; the paint be puts on it is taxed 40 per cent. ; the iron he uses is taxed 35 per cent., and so on. Railway freights are increased by the protection of all railway materials, ocean freights mount up because of the protective impositions upon foreign freights, and because American shipping has been swept from the seas by the protective navigation laws. Everything the agriculturist has to piy for is protected; but there is r.o protection for the farmer s wheat

or the planter’s cotton. The prices of these products is fixed at Liverpool, where the protective hand of America cannot reach,” Upon the financial part of the case the petitioners are very emphatic, and, considering that the statements they make are by persons exceedingly well informed and that the language they use has about little if any of the usual American exaggeration, it is probable that this portion of the document •will not fail to produce its effect. “ Now the last important consideration is the inevitably disastrous effect upon the national revenues of a revenue system which seeks everything before it seeks income. The expenses of the United States are met with increasing difficulty every year. Nocivilised nation in modern times over submitted to such taxation as has so far been borne by the American people ; but the limit of endurance is nearly reached. Relief means tariff revision. The mere Customs duties are not a fraction of what the American consumer must and docs pay for the privilege of protection. The cost of all home productions is increased, and, with the duties at an average of 40 per cent., it is a moderate reckoning to calculate that the American people have had to pay during the last twelve years2o per cent per annum more for the domestic goods they have consumed than they would have had to pay under the tariff of 1857. Putting the annual home manufactures at no more than 600,000,000 sterling, the tax for protection over 1857, and apart from the Customs duties, must be set down at no less than 120.000. sterling a year—that is to say, the American people in the last twelve years (1855-67) have paid the enormous sum of 1.440.000. sterling three times the National Debt—to foster industries winch are now in a more distressed condition than ever. Not one penny of this vast sum has passed into the United States Treasury. It is a most liberal estimate to credit the protective revenue system with one dollar of revenue out of four dollars of tax. The needs of an overtaxed people and the wants of the Treasury unite in demanding a reform of the tariff.” The petitioners conclude by expressing their willingness “ to aid in any investigation which shall bring out the whole truth, and point the way to the common benefit. As manufacturers, they are convinced that the immediate reforms demanded imply two clear principles: namely, first, the freeing of all raw materials from imposts ; and, secondly, the extension of trade by the encouragement of imports. They believe that “ a free and just inquiry instituted at once ” will establish these two principles beyond all dispute ; and they ask that such an inquiry may be “ prosecuted with rigid fidelity, and with no other purpose or motive than to establish the truth and secure the highest good for the greatest number.” This petition is an historical document arising out of necessities and convictions precisely analogous to those which led to the famous petition for free trade of the merchants of London in 1820 —that is, at a time when the tariff of this country had been moulded by the restrictions of the great war and by the false protectionist doctrines of the mercantile system into a condition not so bad but nearly as bad as the American tariff at present. So far as laws are concerned, this country has derived during the last sixty years the greatest amelioration of its economical condition by the steady and advancing application of free trade doctrines in every part of .its legislation. In a modern State it is more true every year that when political institutions have done their best to secure order and liberty they have done no more than provide a foundation and platform whereupon the freest play may be given to sound economical principles in drawing out the highest industrial and inventive capacities of the people, and by their own natural and spontaneous action when let alone securing the most equitable and speedy distribution of the wealth so produced among all those who produce it. n