THE TARIFF 
 
 WHAT IT IS AND WHAT IT DOES 
 
 BY 
 
 S. E. MOFFETT 
 
 Washington Correspondent San Francisco Examiner 
 
 JJork 
 CHARLES L. WEBSTER & CO. 
 
 1802 
 
zr 
 
 COPYRIGHT, 1803, BY S. E. MOFFETT. 
 
CONTENTS. 
 
 CHAPTER. PAGE. 
 
 I. What the Tariff Is 5 
 
 II. Can a Nation Tax Itself Rich ?. . . 10 
 
 III. Who Profits by the Tariff ? 15 
 
 IV. The Tariff and Wages 20 
 
 V. The Tariff and California 25 
 
 VJ. The Tariff and Commerce 33 
 
 VII. The Hawaiian Object Lesson 40 
 
 VIII. The Balance of Trade 47 
 
 IX. The Tariff an^Shipping 53 
 
 X. The Tariff and the Foreigner 60 
 
 XI. Local and Tariff Taxes 66 
 
 XII. Wages and Labor Cost 72 
 
 XIII . How Many Are Protected ? 78 
 
 XIV. American Tariff s Part First 83 
 
 XV. American Tariff s Part Second. . . 88 
 
 XVI. American Tariff s Part Third .... 93 
 
 XVII. The McKinley Bill Part First. . . 97 
 
 XVIII. The McKinley Bill Part Second. . 104 
 
PEEFAOE 
 
 These chapters were originally published in 
 serial form in the San Francisco Examiner. 
 This explains their local Californian color, 
 which it has not been thought necessary to 
 change. Headers in other sections can easily 
 supply home illustrations of the workings of 
 the tariff for themselves. 
 
^ 
 
 n trv\ 
 
 THE TARIFF. 
 
 WHAT IT IS AND WHAT IT DOES. 
 
 CHAPTER I. 
 
 WHAT THE TARIFF IS. 
 
 A tariff is a system of taxes levied upon goods 
 brought into a country from abroad. In this 
 country at the present time the tariff is general- 
 ly treated as a device for forcing our people to 
 buy American goods instead of foreign ones. 
 But before considering it in this light it will be 
 well to examine it in its original aspect as a tax. 
 The idea of raising money by import duties is 
 exceedingly ancient. The Athenians levied a 
 tax of two per cent on all foreign merchandise 
 entering their territory. The Romans had im- 
 port and export duties of two and a half per 
 cent. How the modern word tariff commemo- 
 rates the name of that fine old Moorish econo- 
 mist, Tarif ibn Malek, who used to blackmail 
 all the vessels sailing past his stronghold on the 
 Straits of Gibraltar, is too well known to need 
 repetition. The Venetians in the Middle Ages 
 had discriminating duties and navigation laws 
 almost as ingeniously meddlesome as our own. 
 The modern world has refined and extended the 
 mediaeval and ancient examples. 
 
 5 
 
6 THE TARIFF. 
 
 As a tax the tariff has always been a favorite 
 device of governments, especially of such as 
 were not sure of their popularity. It is easily 
 collected, it is indirect and attacks the final 
 payer in disguise. The merchant who first pays 
 it does not object greatly, for he simply makes 
 the price of his goods enough higher to cover 
 the duty and a profit on the capital advanced in 
 meeting it. The retailer passes the tax with 
 another profit on the consumer. When the last 
 victim, unable to shift his burden upon any one 
 else, has paid two or three prices for his goods, 
 he may possibly grumble at the extortion of 
 the merchants, but it does not usually occur to 
 him to blame the Government or to consider 
 his high prices in the light of a tax. From the 
 point of view of the rulers, therefore, a tariff 
 affords an ideal means of raising money. But 
 how is it with the people ? The tariff as a tax 
 is not equal. It is well enough for the rich, but 
 hard on the poor. A direct tax, honestly as- 
 sessed, falls on men in proportion to their 
 wealth. A tax on consumption falls almost as 
 heavily on the poor man as on the rich one. A 
 laborer earning $50 a month may spend $200 a 
 year on clothes for himself and family, and of 
 this at least $80 represents the tariff tax. A 
 rich bachelor with an income of a million dol- 
 lars a year may get along with $500 worth of 
 clothes, of which the tariff duties represent 
 about $200. The laborer's contribution to the 
 tariff may amount to twenty per cent of his total 
 income, the millionaire's may not exceed a 
 quarter of one per cent of his. The tariff may 
 
WHAT THE TARIFF IS. 7 
 
 thus absorb the whole of the poor man's little 
 margin for saving, keep him forever living 
 from hand to mouth, and leave him with no 
 prospect for his old age. The rich man's sur- 
 plus is scarcely touched by such taxation and 
 he can go on adding to his wealth from year to 
 year. 
 
 We may assume, therefore, that a tariff con- 
 sidered merely as a tax is not a good thing. If 
 we were looking at it solely in that light all 
 would agree that it should be kept as low as 
 possible. In other words, if we could not think 
 of any better way of raising money, we should 
 keep the duties strictly within the limits requir- 
 ed to supply "the needs of the Government eco- 
 nomically administered." We should not be 
 looking for ways of spending our superfluous 
 revenues, but when we found a surplus we 
 should promptly reduce the taxes. That there are 
 several million people who favor just the oppo- 
 site course, and who wish to see the taxes raised 
 whether the money be needed or not, is due to 
 another view of the tariff not as a tax, but as 
 a device for compelling people to buy homemade 
 instead of foreign-made goods. It is in this 
 aspect that the tariff is now a political issue in 
 the United States, and it is in this that it will 
 be discussed in these chapters. 
 
 The way in which the duties are supposed to 
 "protect" American industries is by raising 
 the price of foreign merchandise and thereby 
 enabling American producers to charge more 
 for their goods. The early protectionists in this 
 country believed that a few years of this nur- 
 
8 THE TARIFF. 
 
 sing of home industries would be enough. They 
 thought that protection was necessary to enable 
 our manufacturers to get on their feet. They 
 had much to say of " infant industries," and 
 they said that they would welcome free trade 
 as soon as we had accumulated enough capital 
 and skilled labor to enable us to fight on fair 
 terms. But all these ideas have been outgrown. 
 The infant industries have become giant monopo- 
 lies. What we have to consider now is, not 
 whether we shall give protection for a few years 
 to struggling young industries, but whether we 
 shall adopt it as a permanent policy. 
 
 One thing more remains to be mentioned, be- 
 fore completing this chapter of definitions. Pro- 
 tectionists often deny that their object is to 
 increase the price of American goods. They 
 say that they expect, by stimulating home com- 
 petition, to bring prices even below the foreign 
 rates. When they are asked what in that case 
 would be the objection to removing the duties, 
 they say that but for the tariff the foreigner 
 could pour his goods into this country at less 
 than cost until he had closed up all the Ameri- 
 can factories, after which he could make up his 
 losses by charging monopoly prices. But 
 whether that argument ever had any substance 
 or not it has none now. No establishments in 
 the world are better able to carry on a tempo- 
 rary war of rates than our own. Nowhere are 
 there such masses of capital that can be so ruth- 
 lessly handled for such an end. The English 
 steelmaker who should try to freeze out Mr. 
 Carnegie by selling goods at a loss would be an 
 
WHAT THE TARIFF IS. 9 
 
 object of sympathy. He would find that a game 
 that two could play at, and while he was dump- 
 ing his surplus on the American market, the 
 American surplus would be demoralizing the 
 home market of England. Moreover the devel- 
 opment of trusts has taught our manufacturers 
 how to furl their sails in stormy weather and 
 wait till the clouds roll by. Temporary stop- 
 pages of work for the sake of raising prices are 
 every-day incidents of business. Therefore, to 
 make the protectionist assumption true it 
 would not be sufficient for the foreigner to close 
 our factories temporarily. He would have to 
 keep them closed. To do this he would have to 
 sell permanently at a loss, a thing which even a 
 person as malignant as the foreign manufac- 
 turer is popularly supposed to be would hesitate 
 about doing. 
 
 We come back, then, to ordinary business 
 competition. Our protective tariff is based on 
 the theory that foreigners can produce things 
 and sell them more cheaply than Americans 
 can, and it aims to equalize the difference 
 by increasing the cost of foreign goods to the 
 consumer and so enabling the American pro- 
 ducer to get higher prices for his own than he 
 otherwise could. That is the sole object of pro- 
 tection. A duty that does not raise prices is not 
 protective. The ground now being clear, let us 
 see what effect the tariff has on the prosperity 
 and comfort of the American people. 
 
CHAPTER II. 
 
 CAN A NATION TAX ITSELF RICH? 
 
 Those who believe in a tariff for protection 
 say that it improves the condition of the people 
 by giving higher wages to workmen and greater 
 profits to capitalists. Before we consider that 
 point it will be well to see what effect it has on 
 the nation as a whole. If the United States 
 can produce more wealth with a protective tariff 
 than without one, then it will be possible for 
 each citizen to get more in the general division; 
 but if less be produced, there is less to divide, 
 and any person who may get more must do so 
 at the expense of the rest. 
 
 Suppose only one person lived in the United 
 States. If he were left to himself he would 
 engage in the occupation that seemed likely to 
 bring him the greatest returns with the least 
 exertion. Perhaps he would wash out gold in 
 the bed of some California stream. Once a 
 year he would come down to the bay and buy 
 what goods he needed from some passing trader. 
 The United States would be exporting gold 
 and importing commodities a highly danger- 
 ous, if not ruinous, process, according to our 
 domestic school of political economy. But if it 
 were suggested to this sole American citizen 
 that wisdom required him to make everything 
 
 for himself, and that he should prevent himself 
 
 10 
 
CAN A NATION TAX ITSELF RICH? 11 
 
 from buying anything abroad, by artificially rais- 
 ing the price of his imports so that he would have 
 to give more of his gold for the same amount of 
 commodities, he would probably fail to appre. 
 ciate the value of the advice. He would say 
 that he could make more and better clothes, 
 hats, books, guns, powder, shot, fiddles, coffee, 
 tea and sugar by panning out gold and trading 
 it for these things than by trying laboriously to 
 make each article for himself. In other words, 
 the United States could acquire more wealth by 
 letting trade flow in its natural channels than 
 by attempting to confine it to the home market. 
 
 Suppose, now, the population of the Union to 
 be doubled. Another man comes in and settles 
 down by the gold miner. Instead of going to 
 work with a pan it may occur to him that he 
 can accomplish more by putting in crops of grain 
 and vegetables and keeping a cow and some 
 chickens. Part of his produce will give him 
 enough to eat and the rest he can sell to the 
 miner. Both will then have gold to send abroad 
 for such other things as they may need. In 
 other words, the United States will continue to 
 export gold, but it will import more manufac- 
 tured goods and less agricultural produce. 
 
 The course of trade is still perfectly free, and 
 if it were suggested to the newcomer that he 
 suffered by being able to buy foreign goods so 
 cheaply, that he was engaged in a degrading 
 competition with the pauper labor of Europe, 
 and that he could never be prosperous until he 
 and the miner were compelled to cobble up their 
 own guns and shoes and do all their trading 
 
12 THE TARIFF. 
 
 with each other, he would be incredulous. He 
 would say : 
 
 "I can raise enough on my farm in a part of 
 the year to trade for everything I need and I 
 have the rest of the time to myself. If the 
 miner and I were to try to make everything we 
 use, we should have to work all day and every 
 day in putting together rawhide clothes, ham- 
 mering out fishhooks without barbs, and botch- 
 ing up guns that would blow our heads off the 
 first time we tried to fire them, and a good 
 many things we should have to go without 
 altogether." 
 
 It would be hard to convince either inhabitant 
 of the United States that he needed any inter- 
 ference to make him work to the best advant- 
 age, or that he had anything to fear from a 
 possible "flood of cheap foreign goods." 
 
 But now let us imagine the population of the 
 country to be still further increased. A third 
 man joins the farmer and the miner, and looks 
 about him for something to do. He suggests 
 that weaving woolen cloth would suit him very 
 well. But as cloth is woven in large quantities 
 in Europe by cheap labor and improved machin- 
 ery, and as he would have to do his work slowly 
 with a hand loom, he could not undertake to sell 
 at foreign prices. To do that, he might say, 
 would be to bring American wages down to the 
 European standard. 
 
 " Bind yourselves to pay me three times as 
 much for my cloth as you do the foreign trader 
 for his and I will establish this new industry 
 among you, which will diversify American 
 
CAN A NATION TAX ITSELF RICH? 13 
 
 labor, furnish a home market for your products, 
 and keep up the standard of living." 
 
 The farmer and miner would probably reply : 
 
 "Where do we come in? If we are to get 
 only a third as much cloth for the same amount 
 of labor, our wages and standard of living will 
 be reduced. If you take three parts of our pro- 
 duce and return us one part of its value your 
 home market is worth exactly as much to us as 
 that of a tramp who should take two parts and 
 return us nothing at all. The country is open 
 to you just as it was to us. Find something to 
 do that is worth doing." 
 
 Thus admonished, the newcomer might think 
 a little harder and perhaps might see an open- 
 ing for success as a blacksmith, carpenter and 
 general tinker. He could make and mend tools, 
 furniture and the like for the old settlers, and 
 thus save them much valuable time, besides do- 
 ing better work than they could. 
 
 And so the process would go on. Each new 
 arrival would fit into the place where he could 
 work to the best advantage. Industries would 
 gradually become more diversified. When a 
 town of 500 people had grown up there would 
 probably be a mill by the stream, a tannery, a 
 shoemaker, a tailor, a baker, a physician, a 
 teacher, a number of woodcutters, herders and 
 other workers in lines that had to be conducted 
 on the spot. As 1,000, 10,000, 100,000 people 
 came in, the industries would constantly broaden. 
 Many things that it was formerly cheaper to 
 import could now be produced more cheaply at 
 home, and as each new opportunity arose there 
 
14 THE TARIFF. 
 
 would be somebody to take advantage of it. 
 But in the whole time, from the appearance of 
 the first settler to that of the seventy-millionth, 
 it would be impossible to find a single stage at 
 which the national wealth could be increased by 
 interfering with the natural course of trade and 
 compelling citizens to deal with each other when 
 they could deal to better advantage with some- 
 body else. The profit of the whole nation is the 
 sum of the individual profits of the persons who 
 compose it. If each of these persons be trading 
 to advantage the nation is trading to advantage. 
 The absurdity of trying to turn this trade into 
 unnatural channels, which is so palpable when 
 we are dealing with one man or two men or 
 three, is equally flagrant when we are dealing 
 with a million. The nation as a whole cannot 
 be enriched by such methods. 
 
CHAPTER III. 
 
 WHO PROFITS BY THE TARIFF ? 
 
 If the country as a whole does not profit by a 
 protective tariff, who does? This question must 
 be answered by the examination of particular 
 cases. Let us consider the United States. It 
 is clear that the producers of such things as are 
 freely exported and sold in the world's market 
 are not helped by the tariff. In this class are 
 included farmers, millers, cattle-raisers, gold 
 and silver miners and the like. A second un- 
 protected class, equally large, is composed of 
 persons engaged in personal services, in trade 
 and transportation, and in essentially local in- 
 dustries, such as building trades, carpentry, 
 blacksmithing, teaching, roadmaking, tailoring 
 and printing. Considering now the compara- 
 tively few industries directly protected, let us 
 look first at the effect of the tariff on the iron 
 trades. For the cheap production of iron certain 
 conditions must exist together. There must be 
 rich beds of ore easily worked and situated within 
 convenient distance of mines of good smelting 
 coal. These conditions have existed in the past 
 in Scotland and the north of England, although 
 they are now becoming less favorable. They 
 are found to perfection in Alabama and other 
 Southern States. They are found in a less per- 
 fect degree in Pennsylvania and other parts of 
 
 15 
 
16 THE TARIFF. 
 
 America. In California there are no coal or 
 iron mines to speak of, but there is a consider- 
 able manufacture of finished iron products. 
 Situated as he is, on the ocean, with an immense 
 wheat fleet coming to his doors in ballast every 
 year, the Californian manufacturer might have 
 pig and scrap iron brought to him from abroad 
 at a trifling expense. But the tariff prevents. 
 It compels him to buy his materials in Pennsyl- 
 vania and pay high freight charges for carrying 
 them across the continent. The wheat-grower 
 to whom he sells his machinery not only suffers 
 directly from the increased cost, but indirectly 
 through the high freight rates he is obliged to 
 pay on his wheat, owing to the lack of return 
 cargoes for the ships that carry it to foreign 
 markets. Who gets the benefit of all this ? 
 Nobody. The extra cost is absolutely thrown 
 away and lost to the world. It is expended in 
 working against nature instead of with her. It 
 is absorbed in trying to make water flow up hill. 
 Probably the larger part of the cost of the tariff 
 can be accounted for in this way. It is simply 
 a wanton burden laid on industry from which 
 nobody derives any benefit. The wool duties, 
 as will be shown later, are of this description. 
 They cripple the American woolen manufacturer 
 without helping the grower. Of the rest, almost 
 all is absorbed by a few owners of rich natural 
 opportunities. There is only one quicksilver 
 mine of importance, for instance, in the United 
 States. The owners of this mine pay the mar- 
 ket rate of wages to their men and pocket what- 
 ever may be added to the price of quicksilver 
 
WHO PROFITS BY THE TARIFF? 17 
 
 by the tariff. There is only one important nickel 
 mine in the country and that is owned by one 
 man, who has represented, in his sole person, 
 all the benefits of protection to American labor 
 as applied to nickel. If all the iron mines in 
 the country belonged to a single owner he would 
 derive the entire benefit from the duty on iron. 
 As it is, this benefit goes to the proprietors of 
 the richest and most favorably situated mines. 
 There are some deposits which barely pay the 
 cost of working, even at the highest market 
 price. There are others which would pay at 
 lower prices. There are still others that would 
 be profitable in competition with any in the 
 world. Under free trade the first would have 
 to remain closed until prices went up. With 
 prices artificially raised by protection the pro- 
 prietors of these unfavorably situated mines re- 
 ceive simply the ordinary rates of profit on capi- 
 tal, while the owners of the richer deposits, 
 selling their goods at the same figure, are enabled 
 to collect double and triple profits. It is hardly 
 necessary to say that these differences in profits 
 are not matched by any corresponding differences 
 in wages. There is nothing in the tariff laws 
 requiring the subsidized mine-owners to divide 
 their profits with their men, and they do not do 
 it. 
 
 Where domestic competition is unchecked the 
 American manufacturer does not usually gain 
 by the tariff. He is more likely to lose. His 
 profits may be temporarily increased, but as 
 soon as it becomes evident that he is getting 
 more than the usual rates competitors rush in 
 
18 THE TARIFF. 
 
 and the business is overdone. Of late, how- 
 ever, a device has been invented which gives 
 manufacturers some of the advantages pos- 
 sessed by the holders of natural monopolies. 
 This is the trust. When the bulk of the 
 capital in a given industry is combined in one 
 huge mass, it gains the power to shut out new 
 competitors. No single adventurer can enter 
 the field it has pre-empted with any hope of 
 success. The combination can put up the 
 prices of the articles it controls to a point just 
 short of that at which it would be profitable to 
 import them and pay the duties. Should the 
 home market be overstocked, it can limit pro- 
 duction until the demand at the highest possi- 
 ble prices equals the supply. 
 
 The entire benefit of the tariff, then, goes to 
 the people who possess some form of monopoly, 
 either natural or artificial. It cannot possibly 
 go to anybody else. And since protection, by 
 diverting industry from natural to unnatural 
 channels, makes the total product of the na- 
 tion less than it would otherwise be, it follows 
 that if some people get more than they would 
 have under natural conditions, others must 
 have very much less. That this is, in fact, the 
 effect of the tariff, we need only look about us 
 to see. It is doubtful if the whole world com- 
 bined can show as many overgrown millionaires 
 as the United States, and it is certain that in 
 no young and growing country can the working- 
 man save as small a proportion of his wages as 
 here. Great fortunes are piling up from genera- 
 tion to generation, but the worker who con 
 
WHO PROFITS BY THE TARIFF? 
 
 19 
 
 gratulates himself upon his high wages and looks 
 pityingly upon the pauper labor of Europe, 
 finds that it takes every cent of his earnings to 
 pay his living expenses, and when he dies his 
 lodge has to bury him. 
 
CHAPTER IV. 
 
 THE TARIFF AND WAGES. 
 
 Wages are fixed by two considerations what 
 the employer can pay and what he must. The 
 average employer pays his men just as little as 
 they will accept, but he cannot permanently pay 
 them more than the business produces. If the 
 owner of a farm should possess a borax deposit 
 from which an able-bodied man could dig up a 
 dollar's worth of borax a day, he could not afford 
 as a steady business to hire a man to do the 
 work at $2 a day. Neither could he reduce the 
 market rate of wages in that locality from $2 to 
 $1 or 75 cents. He would simply have to wait 
 until the price of borax went up high enough to 
 enable him to attract labor from other occupa- 
 tions. On the other hand, if his deposit were so 
 rich that one man could dig out fifty dollars' 
 worth of borax a day, the owner would not pay 
 $50 in wages. He might be able to afford to 
 pay that much, better than he could have 
 afforded in the former case to pay $2, but he 
 would not do it. He would pay the market rate 
 and pocket the difference. Of course it makes 
 no difference to what cause the higher value of 
 the bed of borax is due. Suppose it to be due to 
 a tariff. Suppose it to be possible to levy duties 
 that would raise the price of the borax one man 
 can dig in a day from $1 to $10. The owner of 
 
 30 
 
THE TARIFF AND WAGES. 21 
 
 the deposit would get the entire benefit. He 
 would pay the standard rate of wages and no 
 more. Just as no laborer would think of work- 
 ing for him when his returns did not permit him 
 to offer the market price, so no one would think 
 of asking for a share in his profits when they 
 went above that rate. The consumers of borax 
 would pay more for what they used, but labor 
 would gain nothing by the change. 
 
 Since wages are paid out of products, the total 
 amount paid in wages in any locality cannot 
 permanently exceed the total amount produced 
 by labor in that locality, and may be as much 
 less as the employers can induce the laborers to 
 take. How much this will be depends upon the 
 number of men seeking employment compared 
 with the opportunities for labor. With trade 
 left free, it is clear that capital would first turn 
 to those enterprises that are naturally most pro- 
 ductive and would then take up other industries 
 in the order of their advantages. The total pro- 
 duction, and consequently the wage-paying 
 capacity, would necessarily be at the highest 
 possible point. Any interference by the Gov- 
 ernment, by diverting industry to less pro- 
 ductive employments, would inevitably reduce 
 the amount available for the payment of wages. 
 Unless, therefore, the workmen could force their 
 employers to give them a larger share of this 
 smaller product, they would have to submit to 
 a reduction in their earnings. Could a tariff 
 furnish any lever that would enable laborers to 
 force such a division? Clearly not. No tariff 
 law says anything about wages. It simply 
 
22 THE TARIFF. 
 
 authorizes people who have goods to sell to 
 charge more for them than they otherwise could. 
 It does not require them to pay any part of this 
 higher price to their workmen. Labor is free, 
 and we import as much of it every two years as 
 is employed in all our protected industries put 
 together. 
 
 Under protection, as under free trade, em- 
 ployers pay just as little to their workmen as 
 they can. But protection gives them opportu- 
 nities for beating their men down which they 
 would not have under free trade. The 
 Pennsylvania coal-mine combination, for in- 
 stance, in order to keep up the price of coal, 
 systematically reduces the output of its mines. 
 If there were no duty on coal the trust would 
 be compelled to keep the market supplied or see 
 it taken by foreigners. Diminished production 
 means the employment of fewer men, and that 
 means more competition for the places that are 
 open, and consequently a depressing effect upon 
 wages. Moreover, the high price of coal tends 
 to cripple manufacturing industries all over the 
 country, and so injures the demand for labor in 
 every direction. 
 
 What we might naturally expect we find by 
 experience to be true. It is a general rule that 
 the protected industries pay the lowest wages. 
 There are a few exceptions, as in the case of 
 glass-blowers and iron-puddlers, but not many. 
 It is the unprotected blacksmith, bricklayer, 
 plasterer, carpenter, longshoreman, painter and 
 engineer that keep up the rate of wages and 
 
THE TARIFF AND WAGES. 23 
 
 the protected spinner, weaver and coal miner 
 that tend to press it down. 
 
 For each article there is a certain price, above 
 which it cannot be sold to advantage. When 
 more is asked people will go without it. It is 
 necessary, therefore, without any regard to 
 foreign competition, that the price should be 
 kept within this figure. To do this the manu- 
 facturer must be able to keep down the cost of 
 his materials or of his labor, or of both. If he 
 pay more for one he must get the other for less. 
 It follows, therefore, that dear materials mean 
 cheap labor, and that to be able to pay well for 
 labor, materials must be had cheaply. The re- 
 cent researches of the Massachusetts Bureau 
 of Labor Statistics show that in many indus- 
 tries of that State the cost of labor is less than 
 one-fifth of the total cost of production. Sup- 
 pose it to be even one-half, it is clear that if 
 the materials which absorb the other half are 
 taxed fifty or one hundred per cent there will 
 have to be either a cut in wages or such an in- 
 crease in the price of the finished product that 
 many people will refuse to buy it, thus causing 
 a restriction in the market which is certain to 
 throw numbers of men out of employment. 
 
 It is evident, therefore, that a tariff could not 
 raise wages, even if it were applied evenly all 
 round and everybody had a fair chance at its 
 alleged benefits. Its depressing effect would 
 not be as marked then as it is now, but it would 
 exist nevertheless. The burden would press 
 more evenly, but it would be a burden still. 
 But, as a matter of fact, there is scarcely a pre- 
 
24 THE TARIFF. 
 
 tense of laying protective taxes evenly. The 
 protected classes include only about one in 
 twenty of the population. The other nineteen 
 pay the cost of protection and receive none of 
 its advantages, such as they are. This is a 
 point that needs to be exhibited in detail, 
 and it will receive fuller treatment in a later 
 chapter. 
 
CHAPTER V. 
 
 THE TARIFF AND CALIFORNIA. 
 
 In every State the bulk of the people are in- 
 jured by tariff taxes, but California is an es- 
 pecial sufferer. This may not seem to fit in 
 very well with the fact that protection is more 
 strongly rooted among Californians than among 
 the people of any other State, unless it be Penn- 
 sylvania, but a little examination will show it to 
 be the truth. 
 
 There are very few products of this State 
 which can be directly protected. When we 
 have mentioned raisins, wine, oranges, lemons, 
 prunes, sugar and wool we have named about 
 all of importance. All of these combined do 
 not equal in value the single item of wheat, 
 which is entirely unprotected, or of gold, which 
 the tariff expressly aims to depress. It may be 
 said that lumber can be and is protected, 
 but California has a monopoly of the world's 
 supply of redwood, and has no competitor to 
 fear from any quarter, while the pine of the 
 Sierras has a local market cut off by high 
 freight charges from the competition of the 
 coast. 
 
 Raisins can be produced in California more 
 cheaply and abundantly than in any other part 
 of the world. Our growers have already 
 proved that they can compete with the Span- 
 
 25 
 
26 THE TARIFF. 
 
 iards in Australia, England and France, and it 
 would not be surprising in time to see them ship 
 raisins to Spain itself. Soil, climate, water and 
 scientific curing and packing not the tariff- 
 are what California has to depend upon in this 
 line. One of the leading dealers in San Fran- 
 cisco says "that the shipments of Spanish 
 raisins are decreasing from year to year, so that 
 the Malaga raisin scarcely enters into competi- 
 tion with the California product." When the 
 vineyards already planted in Fresno County are 
 in full bearing we shall be producing more 
 raisins than are produced in all the world at the 
 present time, and then prices will be determined 
 by the competition of Californians with each 
 other, and not with foreigners. Viticultural 
 Commissioner West asserts that within five 
 years, without any further planting, we shall 
 be raising 7,600,000 boxes of raisins a year, of 
 which, at present prices, we .cannot hope to sell 
 more than 4,000,000 boxes in the United States. 
 The other 3,600,000 or, according to the census 
 estimate, 6,000,000 boxes must be marketed 
 abroad, or else a new American market must be 
 built up among the poor. Tariff duties will not 
 help our growers to do this the only thing 
 that can help them will be the removal of the 
 taxes they are now compelled to pay. 
 
 Our oranges find their only serious competi- 
 tors in Florida. The Mediterranean and Tahiti 
 oranges come into market at a season in which 
 none of our own are to be had. It is an advant- 
 age to Californians themselves to be able to buy 
 cheap fruit at these times. 
 
THE TARIFF AND CALIFORNIA. 27 
 
 As to our wine, the question is not one of 
 price, but of taste. People drink French wine, 
 or at least wine with French labels, because it 
 is fashionable. They pay more for it than they 
 would have to pay for the pure California arti- 
 cle, and the fact that it is more expensive rather 
 recommends it to them. However, it is need- 
 less to consider the effect of a removal of the 
 wine duties, because wine is one of the luxuries 
 which both parties agree should be taxed, and 
 therefore the duties will remain whether we 
 have a tariff for protection or one for revenue. 
 
 Our prunes fill a place of their own, and one 
 that is comparatively little affected by foreign 
 competition. The bulk of our imports in that 
 line consists of cheap Turkish prunes, which are 
 sold at two or three cents a pound and eaten by 
 poor people who cannot afford to pay California 
 prices. The duty of two cents a pound does not 
 begin to bring this class of fruit up within sight 
 of California prunes, and any duty that did 
 would merely deprive the poor of the cheap food 
 to which they are accustomed without helping 
 the California grower. Our prunes stand on 
 their own merits and command the trade of 
 people who can afford to pay for a choice arti- 
 cle. 
 
 Sugar is one of the articles upon which a 
 revenue tariff would have retained a moderate 
 tax, but as the McKinley bill abolished the duty 
 on it it is not likely that it can be restored. If 
 our home production increases to anything like 
 a sufficient extent to supply the home market 
 the bounty S3 r stem will break down of its own 
 
28 THE TARIFF. 
 
 weight. The people will never consent to tax 
 themselves $250,000,000 a year to be paid to 
 private persons in the two items of pensions and 
 sugar. 
 
 The hollowness of the protection afforded by 
 the duties on wool has been pretty well exposed. 
 We send no wool to foreign countries, and con- 
 sequently our growers must find their market at 
 home, if anywhere. That market is furnished 
 solely by the woolen mills. Unless we have a 
 number of flourishing mills we can have no sale 
 for wool. Now the wool tariff has destroyed 
 our woolen mills. A few years ago there were 
 three factories of the kind in San Francisco. 
 Now there is one, and that is run at a loss. 
 During the last Presidential campaign it was 
 announced that if Cleveland were elected the 
 Pioneer Mills would have to shut down. Har- 
 rison was elected and the Pioneer Mills shut 
 down. So did the Santa Rosa mill. The suc- 
 cessful manufacture of woolen goods requires 
 foreign wool to mix with the domestic article. 
 When this can be had on good terms the manu- 
 facturers can afford to pay a good price for 
 domestic wool. When it cannot be obtained 
 they cannot buy the domestic wool at all, except 
 for limited classes of goods. 
 
 The great bulk of Calif ornian industries receive 
 nothing but injury from the tariff. Our wheat 
 crop is worth from $20,000,000 to $50,000,000 a 
 year. The wheat-growing districts are stand- 
 ing still because farming does not pay. If this 
 were the result of natural laws the rancher 
 might bear his fate with resignation ; but it is 
 
THE TARIFF AND CALIFORNIA. 29 
 
 not natural. The Government takes a third of 
 every crop, either for itself or for some favored 
 monopoly. It does more. It demands money 
 from the farmer whether he has a crop or not. 
 He must have clothes, tools, harness, furniture 
 and household goods, even if his failure to raise 
 any grain relieves him from the necessity of 
 buying taxed bags. There is no deduction from 
 the taxes on these things on account of his mis- 
 fortunes. So the farmer has to borrow, and then 
 he worries about the interest and is ready to 
 subscribe to wild schemes for having the Gov- 
 ernment lend him some of the money of which 
 it has robbed him and take a mortgage on his 
 place for security. If he had been allowed to 
 keep what he honestly earned he could have 
 saved enough in good years to tide him over bad 
 ones without going into debt. Taking one year 
 with another, the California wheat-growers 
 probably lose $10,000,000 through the tariff a 
 sum that would easily support 50,000 people. 
 
 The population of the mining counties has 
 been steadily declining for the past thirty years. 
 The production of gold, which was once $65,- 
 000,000 a year, has fallen off to a fifth of that 
 amount, but it is still sufficient to make mining 
 the second industry in importance in the State. 
 The tariff is directly aimed at the miners. Its 
 object is to make prices high that is, to make 
 gold and silver buy less than they otherwise 
 would. High prices for goods mean low prices 
 for gold and silver. We saw what an effect the 
 little flurry that followed the passage of the Sil- 
 ver bill had in opening new mines. If the value 
 
30 THE TARIFF. 
 
 of the precious metals were advanced twenty or 
 twenty-five per cent, as it would be by the re- 
 moval of the taxes that keep it down, we should 
 see the old deserted mining towns of California 
 peopled again. 
 
 Our manufactures will be weak and strug- 
 gling as long as their materials are extrava- 
 gantly taxed. We have hardly any coal or iron 
 of our own, and to have successful manufac- 
 tures we must be allowed to buy such things as 
 cheaply as possible. Otherwise, these indus- 
 tries will be driven to points that do not have 
 to depend upon foreign supplies. 
 
 But the most important thing to California, 
 and especially to San Francisco, is commerce. 
 This is a commercial city. It would not have 
 been built where it is but for its advantages for 
 foreign trade. And California is a commercial 
 State. It is not one of those comfortable, easy- 
 going districts that produce just about enough 
 for their own people where every farmer has a 
 potato patch and a bit of pasture and a wood 
 lot where the miller grinds his neighbors' 
 grist and the village shoemaker keeps his 
 townsmen shod with leather turned out by the 
 tanner up the creek, from the hides of the cattle 
 raised just over the hill and killed by the 
 butcher who peddles meat from a home made 
 wagon. California does things on a large scale. 
 With only 1,200,000 people it produces things 
 enough, of some kinds, for 20,000,000 or more. 
 It would take five million people to consume 
 an average California wheat crop, ten million to 
 consume a prune crop and fifteen million for an 
 
THE TARIFF AND CALIFORNIA, 31 
 
 orange crop. California now produces enough 
 raisins for 50,000,000 people and will soon pro- 
 duce enough for 100,000,000. Her ordinary 
 vintage is equal to the wine-drinking capacity 
 of 30,000,000 Americans, although it would not 
 supply a million Frenchmen. She mines gold 
 enough for the coinage demands of 20,000,000 
 people. 
 
 It is necessary, therefore, to send off the sur- 
 plus and get something in exchange for it. 
 Now, it so happens that California is very con- 
 veniently situated for selling to and buying 
 from foreign countries, but very badly situated 
 for dealing with the Eastern States. When 
 fruit is sent East the profits are almost eaten 
 up by freight charges, even with prices raised 
 so high with the help of duties that the masses 
 of the people cannot buy, and the market is 
 consequently limited to the well-to-do, while 
 wheat cannot be shipped East at all. Our gold 
 would buy more in almost any market of the 
 civilized world than it can in New York or 
 Pennsylvania, and the things it bought could 
 be shipped here with less loss from freight 
 charges. The laws that seek to confine us to 
 the American market cut us both ways on 
 what we sell and on what we buy. Besides, 
 there are some things that we practically can- 
 not sell in the so-called home market at all. 
 The Eastern States do not want our wheat. 
 They raise more than they need themselves. 
 We must ship the bulk of our crop abroad and 
 take our pay in goods. Even if it were pos- 
 sible, as a general rule, for a community to sell 
 
32 THE TARIFF. 
 
 without buying, which it is not, it would not be 
 possible in our case, because gold is one of the 
 commodities we produce and export. We have 
 to sell our surplus, both of gold and of goods, 
 for other goods. But before we can get the 
 benefit of the things we have paid for, Mr. Mc- 
 Kinley makes us give up to the Government 
 over half their value as a fine for not having 
 bought them of Pennsylvanian manufacturers, 
 who do not buy from us and with whom natural 
 obstacles forbid us to make a profitable trade. 
 But we have had the satisfaction for a few 
 years, and may possibly have for a year or two 
 longer, until our new trees and vines are in 
 bearing, of depriving the poor in the East of 
 the privilege of eating raisins, prunes and 
 oranges, in order that the well-to-do might be 
 made to pay a fraction of a cent a pound above 
 the market price to our growers and two or 
 three cents to middlemen. That is all we get 
 in return for the millions of dollars the tariff 
 costs us every year. 
 

 CHAPTER VI. 
 
 THE TARIFF AND COMMERCE. 
 
 In all ages one of the most profitable pursuits 
 in which a nation could engage has been that 
 of foreign trade. The trading countries have 
 always been the richest countries. The Phoe- 
 nicians, Carthaginians and Athenians were the 
 great traders of ancient times and the great 
 gatherers of wealth. Sparta discouraged trade 
 and remained poor. In the Middle Ages, Ven- 
 ice, Genoa and the Hanse towns were built on 
 commerce, and heaped up vast riches. The 
 Netherlands followed, and then England. We 
 ourselves have had a share in the profits of for- 
 eign exchanges. In the first half of the present 
 century the Yankee merchant was the most dar- 
 ing, enterprising and successful trader of the 
 world. 
 
 If we ask how commerce may be encouraged 
 there may be various answers. Some may say 
 that we should pay bounties to ship-owners, or 
 spend money in dredging out harbors and build- 
 ing light-houses. But if we ask how commerce 
 may be discouraged there can be no disagree- 
 ment about the answer. Everybody will say 
 that whatever hampers commerce and makes it 
 harder to carry on is a discouragement to it. 
 Now this is exactly what the tariff is meant to 
 do, and does do. Suppose the Government 
 
34 THE TARIFF. 
 
 should build a wall across New York harbor, so 
 that every ship entering would have to stop in 
 the lower bay and transfer its cargo to another 
 vessel. Or suppose it should pass a law requir- 
 ing every cargo landed to be loaded into wag- 
 ons and hauled three times around the city be- 
 fore being offered for sale. These things would 
 certainly be a hindrance to commerce, and no- 
 body in his senses would propose them; yet they 
 would act precisely as the tariff does, and could 
 be defended by precisely the same arguments. 
 They would make foreign goods cost more, and 
 that is what duties do and are intended to do. 
 They would give employment to American labor, 
 not only in the manufacture of the things that 
 compete with foreign goods, but in the construc- 
 tion and repair of the wall, the loading and un- 
 loading of the ships, and the driving of the wag- 
 ons. In fact, this plan would carry out the idea 
 of protection so much better than the method of 
 duties that every sincere protectionist ought to 
 favor it. 
 
 Now, let us see what the actual amount of 
 tariff obstruction to commerce is. In the year 
 1881 our imports amounted to $642,664,628, and 
 our exports to $902,377,346. In the year 1891 
 our imports were $844,916,196, and our exports 
 $884,480,810. Thus, while our population in- 
 creased from 51,000,000 to 63,000,000, our for- 
 eign trade scarcely increased at all, and what 
 growth there was was entirely in imports. We 
 sold less in 1891 than in 1881. For the last ten 
 years we have been standing still in the matter 
 
THE TARIFF A.ND COMMERCE. 35 
 
 of commerce while other countries have been 
 leaping ahead. 
 
 How is it in England ? While we buy and sell 
 on an average $25 worth of goods per head 
 of our population Great Britain buys and sells 
 $92 worth. With only 39,000,000 inhabitants 
 her foreign trade amounted to $3,616,558,513 
 in 1889 against $1,729,397,006 for our 63,- 
 000,000 people in 1891. Little Holland with 
 4,500,000 inhabitants about as many as are in 
 the States of Missouri and Iowa has a com- 
 merce more than half as great as that of the 
 United States. Her foreign trade amounts to 
 $940,000,000 a year, or $209 per head. New 
 South Wales, with 1,000,000 people, has a 
 foreign trade reaching $225,000,000 a year, or 
 $225 per capita nine times that of the United 
 States. Belgium, with the population of New 
 York and less than the area of Maryland, has 
 imports and exports amounting annually to 
 $582,000,000, or more than a third as much as 
 those of the whole American Union. Austria. 
 Bulgaria, Italy, Portugal, Roumania, Russia, 
 Servia, Spain, and a few Spanish American re- 
 publics are the only civilized countries in the 
 world which do not surpass the United States 
 in the proportion of commerce to population. 
 
 But it may be asked why duties on imports 
 should interfere with exports. If we can pro- 
 duce anything well and cheaply, why should we 
 not be able to send it abroad and sell it for 
 cash, whether we buy anything or not ? '.There 
 are several reasons why we cannot. In the 
 first place the ships which take our goods away 
 
36 THE TARIFF. 
 
 have to come here to get them. If they can 
 bring cargoes that will pay the cost of sailing 
 one way, they need charge only enough freight 
 on the outward cargoes to pay for the outward 
 voyage. If they are obliged to come here 
 empty they must charge enough on the things 
 they carry away to pay their expenses both 
 ways. This would make our goods cost so 
 much when they reached the foreign markets 
 that there would not be much chance of selling 
 them in competition with others that had only 
 ordinary freights to pay. In the next place the 
 duties on imports raise the cost of almost 
 everything we produce. Without them at least 
 a hundred bushels of wheat could be raised for 
 what it takes to raise eighty bushels now. 
 Machinery, canned goods, watches, agricultural 
 implements practically all the things, in fact, 
 that we might offer for sale are burdened at 
 the start with a heavy load of taxation on which 
 interest and profits must be paid. The foreign 
 competitor who is not so burdened has a long 
 start of us in the race for a customer. Lastly, 
 and most important of all, if we refused to buy 
 from the rest of the world we could not sell even 
 if we had no extra freight to pay and if our 
 goods were as cheap in the beginning as those 
 of any other country. The total foreign trade 
 of the world is about $18,000,000,000 a year. 
 The domestic trade is many times greater. To 
 carry on this vast commerce the world makes 
 use of about $7,600,000,000 in gold and silver. 
 It is plain that this would give out in six months 
 if coin had actually to be sent from one country 
 
THE TARIFF AND COMMERCE. 37 
 
 to another to pay for the imports. The entire 
 fabric of modern commerce is built on the fact 
 that, on the whole, things bought are paid for by 
 things sold. Gold and silver are used only for 
 settling the small balances that may be left. 
 The transfer of even so small an amount as 
 $20,000,000 at one time in actual gold or silver 
 from one country to another is thought so seri- 
 ous an event in the commercial world that 
 bank directors meet to consider it and 
 the mercantile journals devote their space to 
 discussing its cause. When gold is flowing 
 from London in unusual quantity the Bank of 
 England raises its rate of discount to check it. 
 Whenever the trade of any country appears 
 one-sided the fact is due to some peculiar cir- 
 cumstance which makes an apparent uneven- 
 ness necessary to preserve a real balance and 
 prevent a flow of coin. Thus the imports of 
 England always greatly exceed the exports. 
 This is due to the fact that almost all the rest 
 of the world is in debt to England for money 
 
 Jent or for freight charges on British ships. 
 
 ^These debts are paid in goods instead of in 
 money. India, on the other hand, always ex- 
 ports vastly more than she imports. This does 
 not mean that she is growing rich, as protec- 
 tionists might claim. It means exactly the re- 
 verse. It means that she is called on every year 
 to send about $70,000,000 to England in the way 
 of official salaries and interest on bonds, and 
 that she sends it in commodities because she 
 could not possibly continue for any length of 
 time to send it in gold or silver. In the United 
 
38 THE TARIFF. 
 
 States, during the war and for some time after, 
 our imports exceeded our exports. That 
 meant that we were borrowing money in 
 Europe, which came over here in the form 
 of goods. Since then our exports have been 
 greater than our imports. That means that 
 we have been paying our debts. The excess of 
 exports is less now than it was a few years ago. 
 That means that the debts are nearly paid and 
 that we are approaching a natural balance of 
 trade. 
 
 Now, if we can imagine it possible to carry 
 out the protectionist idea of selling everything 
 and buying nothing we could produce ourselves, 
 what would be the effect ? If we imported su- 
 gar and tropical products to the value of $300,- 
 000,000 a year and exported manufactures, 
 breadstuffs and provisions to the value of 
 $1,000,000,000, there would be a balance of 
 $700,000,000 coming to us in cash. If this pro- 
 cess could be kept up for six months the whole 
 outside world would be wrecked in the most tre- 
 mendous financial crash known to history. Every 
 country outside of the United States would be 
 drained of money, there would be universal 
 bankruptcy, the bottom would drop out of prices 
 and there would be no market for anything. 
 Meanwhile the United States would have 
 enjoyed a few months of wild speculation, like 
 that which follows an unlimited issue of paper 
 money. Then with the sudden loss of the for- 
 eign markets there would be a glut of products 
 here, our gold would leave us as quickly as it 
 had come, and we should be plunged into a 
 
THE TARIFF AND COMMERCE. 39 
 
 common ruin with the rest of the world. When 
 things finally began to pick up again we should 
 settle down to a modest little trade in which we 
 should sell about enough to pay for our $300,- 
 000,000 worth of sugar, bananas and dye stuffs. 
 Our farmers would have lost their vast foreign 
 market, and our shipping would be even deader 
 than it is now. 
 
 Of course, things could not proceed to such 
 an extremity as this. If the experiment of cut- 
 ting off imports were actually tried, the sensi- 
 tive foreign exchanges would respond before 
 everything had gone to wreck. Our exports 
 would dry up and disappear along with the im- 
 ports, and there would be no sudden surge of 
 the world's supply of money across the Atlantic 
 and back again. Protection, carried to its logi- 
 cal end, would simply wither up commerce and 
 force the men engaged in that industry into 
 other occupations, which is what it is designed 
 to do. 
 
CHAPTER VII. 
 
 THE HAWAIIAN OBJECT LESSON. 
 
 Sixteen years ago our trade with the Ha- 
 waiian Islands was small and sickly. In the 
 fiscal year 1876, the last before the reciprocity 
 treaty went into effect, we sold the Hawaiians 
 goods to the amount of $809,257, which was 
 less than we had sold them three or four years 
 before. The trade of the islands was gradually 
 drifting toward Melbourne and Sydney. We 
 bought Hawaiian goods to the extent of $1,382,- 
 592. Of this trade $1,126,630 worth of imports 
 and $641,743 worth of exports went through 
 San Francisco. Twenty-two American vessels 
 in the Hawaiian trade, of a tonnage of 7,448, 
 entered at this port, and thirty, of 12,123 tons, 
 cleared. The total American tonnage in the 
 foreign trade at the port of San Francisco in 
 that year was 342,318 entered and 430,862 
 cleared, so that Hawaiian commerce gave em- 
 ployment to about one-fortieth of the American 
 ships trading from this port to foreign coun- 
 tries. 
 
 The next year the principal Hawaiian prod- 
 ucts were admitted free into the United States 
 and the principal American products into Ha- 
 waii. Instantly our trade with the islands 
 leaped up. The American exports to the group 
 rose in the first year from $809.257 to $1,460,- 
 
 40 
 
THE HAWAIIAN OBJECT LESSON. 41 
 
 462, and the imports from $1,382,592 to $2,631,- 
 763. San Francisco's share increased from 
 $641,743 of exports to $1,183,556, and from $1,- 
 126,630 of imports to $2,268,003. The Ameri- 
 can tonnage engaged in the trade between this 
 port and Hawaii grew from 19,571 to 27,441. 
 
 From that day to this the island trade has 
 been steadily growing more important to the 
 United States, and to San Francisco in particu- 
 lar. In 1890 our exports to Hawaii amounted 
 to $5,259,154.36 more than six times as much 
 as they had been in 1876 while our imports 
 from the same country were $13,021,907.34, or 
 over nine times their former amount. San 
 Francisco's benefits from this trade increased 
 in still more striking proportion. In 1890 this 
 port sent to Hawaii $4,806,360.13 worth of 
 goods and received from it everything it sold 
 to the United States. One-fifth of the entire 
 foreign commerce of San Francisco was carried 
 on with this little group of islands. 
 
 In 1890, 224 American vessels of 153,098 
 tons cleared from Hawaiian ports. In reality 
 the American tonnage in that trade was much 
 greater than that, for some of the principal 
 vessels of the fleet, American in ownership 
 and management, sailed under the Hawaiian 
 flag, and others sailing under the American 
 flag and taking passengers and mails to Hono- 
 lulu were credited to the Australian Colonies. 
 But even on the face of the returns the tonnage 
 under our flag in the Hawaiian trade, under 
 the effects of the reciprocity treaty, had 
 enormously increased. This, while American 
 
42 THE TARIFF. 
 
 merchant shipping in general had been steadily 
 declining. While free trade with Hawaii has 
 given employment to about ten times as many 
 American vessels in 1890 as the fettered Ha- 
 waiian commerce did in 1876, the total foreign 
 carrying trade in American ships has fallen off 
 two-thirds. 
 
 In 1876 the Hawaiian trade gave employ- 
 ment to only one-fortieth of the American ves- 
 sels sailing out of San Francisco. In 1889, 
 thirteen years later, it employed more than 
 one-seventh. It supported in 1888 a fleet of 174 
 American vessels, of which 54 were built on this 
 Coast. It distributed $4,000,000 a year among 
 our merchants, sailors and workingmen, and 
 kept up such vast industrial establishments in 
 San Francisco as the California and American 
 sugar-refineries. Ninety per cent of the trade 
 of Hawaii is carried on with San Francisco. 
 While the American flag has been so nearly 
 driven out of the general commerce of the 
 United States that it covers only about one- 
 eighth of our shipments to and from all countries, 
 it flies over three-fourths of the total commerce 
 of Hawaii. 
 
 In 1890, 227 American vessels of 150,676 
 tons entered at Hawaiian ports, against 68 
 vessels of 79,444 tons of all other nationalities. 
 Of the 68 craft not on our register, 34 of 42,229 
 tons were nominally Hawaiian, but really 
 American in everything but the flag. In 1889 
 Hawaii sent 99.77 per cent of her total exports 
 to the Pacific ports of the United States and 
 only .23 of 1 per cent to all the rest of the 
 
THE HAWAIIAN OBJECT LESSON. 43 
 
 world. In 1890 the fraction sent to the outside 
 world was too small to figure. In 1889 she 
 bought 72.62 per cent of her total imports 
 from our Pacific ports, 6.55 per cent from our 
 Atlantic ports and 20.83 per cent from the out- 
 side world. In 1890, 75.55 per cent of her im- 
 ports came from the United States and 24.65 
 per cent from other countries. 
 
 It may be said that we are making a bad bar- 
 gain in this trade, because we buy more from 
 the Hawaiians than they buy from us. But the 
 very figures that are supposed to show this 
 prove the immense profit we gain from the 
 trade. Our imports from Hawaii exceed our 
 exports to that country by $7,764,753. As the 
 Hawaiians have practically no trade with any 
 country but the United States, this balance, if 
 it were really against us, would have to be set- 
 tled in coin. But in 1890 our net shipments of 
 coin and bullion to Hawaii were only about 
 $800,000. What became of the other $7,000,000 ? 
 It represented the profits made by Americans out 
 of Haivaiian industries. 
 
 We have an ordinary balanced trade of about 
 $5,000,000 a year with the islands, and over and 
 above this Hawaii sends us every year about 
 $6,000,000 or $7,000,000 worth of goods for 
 which she receives no returns at all. It is 
 exactly the position in which India is in regard 
 to England. England draws $70,000,000 a year 
 from India in the form of official salaries, mer- 
 cantile profits and interest on capital. This trib- 
 ute has to be paid in goods. In the same way 
 the American planters and merchants in Hawaii 
 
44 THE TARIFF. 
 
 ship sugar and rice to this country, where it is 
 sold and the money invested in American enter- 
 prises. The trade is one-sided, but the discrep- 
 ancy is all in our favor. San Francisco profits 
 to the extent of millions of dollars a year by the 
 money poured into circulation here through the 
 constant influx of Hawaiian products. 
 
 Our experience with Hawaii proves several 
 things. It proves, in the first place, that a 50 
 per cent tariff like that under the McKinley bill, 
 a 47 per cent tariff like that of 1883, or even a 
 42 per cent tariff like that proposed by the Mills 
 bill, is not necessary to enable us to hold our 
 home market. We sell the Hawaiians practi- 
 cally everything they buy. They get nothing to 
 speak of from the English, the Germans, the 
 French or anybody else. We ship our things 
 1,800 miles and drive our rivals out of that 
 market. Now how much protection do we have 
 to enable us to do that? 
 
 Ten per cent. 
 
 Our goods are admitted into Hawaii free and 
 those of other countries pay 10 per cent duty. 
 That is all the advantage we have, and it is 
 ample. This is where we have to pay freight 
 both by land and sea, and yet we are told that 
 40 per cent of protection would not be enough 
 to save our manufactures from being driven out 
 of their own country, where all the advantage 
 of freight is on their side. 
 
 In the next place we can get some idea from 
 this experiment of the possibilities of trade in 
 other directions. The Hawaiian Kingdom is 
 smaller than Fresno County, California, and 
 
THE HAWAIIAN OBJECT LESSON. 45 
 
 still supplies one-seventh of the entire foreign 
 commerce of San Francisco. It has fewer 
 people white, Kanaka and Chinese than live 
 in Alameda County. It has only one-fortieth of 
 the population and one-five-hundredth part the 
 area of Australasia, but furnishes a larger part 
 of the commerce of the United States than that 
 whole enormous group of colonies. It buys 
 almost as much from us as the whole of India, 
 and nearly twice as much as the whole of China. 
 It furnishes more trade to the port of San Fran- 
 cisco than the whole of Mexico, Central and 
 South America. Its commerce with the United 
 States is greater than that of the Kussian Em- 
 pire, and more than twice as great as that of 
 the entire continent of Africa. 
 
 Without this trade it is probable that the cen- 
 sus would have shown hardly any increase in 
 population in San Francisco during the past ten 
 years. We have been losing the traffic of the 
 Pacific Coast, outside of northern and central 
 California, and if we had not had the sugar re- 
 fineries with their 1,500 men, the 200 vessels in 
 the Hawaiian fleet, with the men employed in 
 building, sailing, repairing, loading and unload- 
 ing them, and the merchants and their employ- 
 es engaged in handling Hawaiian products, it 
 is doubtful whether we should even have held 
 our own. Moreover, without the profits of the 
 stop at Honolulu it is probable that the Austra- 
 lian line would not have paid expenses, even 
 with the Colonial subsidy, and so we should 
 have lost still another profitable branch of busi- 
 ness. 
 
46 THE TARIFF. 
 
 Almost all of this commerce was literally cre- 
 ated by limited free trade. It was not merely 
 turned in this direction it was absolutely called 
 into existence by the reciprocity treaty. The 
 commerce of Hawaii with countries outside of 
 the United States has not declined since the re- 
 ciprocity treaty went into effect it has simply 
 been dwarfed and overshadowed by the enor- 
 mous American trade that reciprocity has cre- 
 ated out of nothing. 
 
 The same thing can be repeated with Austra- 
 lia, New Zealand, Samoa, Fiji, Java, Japan, 
 Mexico, Central America, South America and 
 British Columbia. There is trade enough in 
 sight in the Pacific to make San Francisco a 
 greater port than New York. All we have to 
 do is to let it come here. 
 
CHAPTER VIII. 
 
 THE BALANCE OF TRADE. 
 
 Up to about a hundred years ago the rulers 
 of all nations acted on what was called the 
 mercantile theory of commerce. Their idea 
 was that the object of trade was to get gold 
 and silver. If a nation sold more than it 
 bought they took it for granted that it was 
 getting gold and silver for the difference, and 
 so they said that it had a " favorable balance 
 of trade." If it bought more than it sold they 
 thought it was losing its gold and silver, and so 
 they said that it had an " unfavorable balance of 
 trade." Statesmen plotted and soldiers fought 
 to keep the balance of trade on their own side. 
 Thence came the notion that commerce was a 
 game in which one side or the other must lose. 
 It was plainly impossible for all countries to be 
 importing gold and silver at once. If some got 
 more than their share, others must get less. 
 Hence there was a constant struggle on the 
 part of each country to be among the winners 
 and keep its neighbors among the losers. This 
 was the prime cause of high tariffs and tariff 
 wars. Each country laid taxes on goods com- 
 ing in from other countries, so that fewer goods 
 might come in and its own exports might be 
 paid for in gold and silver. 
 
 This theory of the balance of trade, which is 
 
 47 
 
48 THE TARIFF. 
 
 quoted in modern books on political economy as 
 a curious specimen of old delusions, like the be- 
 lief in witchcraft, is at the bottom of the pres- 
 ent policy of the United States, and is held by 
 American protectionists as a part of their politi- 
 cal Bible When we sell a great deal more than 
 we buy, they say that we are doing a profitable 
 business. Their chief argument against free 
 trade is that if it were not for the tariff foreign- 
 ers would sell us more than we could sell to 
 them. 
 
 Now to understand fully what this argument 
 is worth we must get a clear view of this fact, 
 that what we buy is the pay we get for what we 
 sell. 
 
 In the light of this principle what is a favor- 
 able balance of trade ? Is it not one in which 
 we sell our goods for as much as possible? 
 Whether we get gold or other goods in ex- 
 change is a minor matter. The main thing is 
 to get the greatest possible value for what we 
 sell. If a farmer can ship 1,000 worth of 
 wheat to England and receive $1 ,200 worth of 
 English products for it he is making a profitable 
 bargain. If a hundred thousand farmers can 
 do the same thing they are all making profitable 
 bargains. But the extra amount which these 
 farmers receive over what they give the very 
 thing that constitutes their profits would be 
 said by protectionists to form an " unfavorable 
 balance of trade" for the country. Our im- 
 ports would be exceeding our exports, and so 
 we should be losing money. 
 
 Suppose an American merchant should send 
 
THE BALANCE OF TRADE. 49 
 
 a shipload of American goods to England and 
 get a shipload of English goods in return. If 
 he made a shrewd deal, so that he brought back 
 a cargo worth more than the one he sent out, 
 he would be contributing toward an "unfavor- 
 able balance of trade." But now suppose the 
 ship sank on her way home with no insurance 
 on the cargo. The merchant would be poorer, 
 and his distress would be felt among his credi- 
 tors, employees, and all with whom he had deal- 
 ings. And yet, on the protectionist principle, 
 the nation would be richer. There would be a 
 favorable instead of an unfavorable balance of 
 trade. The custom-house returns would show a 
 shipload of goods exported with no imports to 
 set against them. 
 
 Take the case of a country that conquers an- 
 other and exacts a huge indemnity, as Germany 
 did with France. The only way in which the 
 conquered country can pay the fine is by export- 
 ing goods for which she gets no return. As a 
 matter of fact, the figures show that up to the 
 war the imports of France, both in her general 
 trade and in that with Germany, exceeded her 
 exports, while when the payment of the indem- 
 nity began the balance turned the other way 
 and France sent out more than she took 
 in. Protectionists would say that before the 
 war France was losing money, and that after it 
 she was prosperous On the same principle 
 Germany, while the savings of the French peas- 
 ants were being poured into her treasury, was 
 being steadily ruined by her excess of imports. 
 The balance of trade between England and this 
 
50 THE TARIFF. 
 
 country is made up partly on this principle. Of 
 course England has not conquered us, but Eng- 
 lishmen own a large part of the United States. 
 The Scully estates in Illinois, the Schenley es- 
 tates in Pittsburg, the Dunraven estates in the 
 far West, and dozens of other valuable tracts of 
 American land are worked for the benefit of the 
 British landlords. The produce of the land is 
 sent to England and sold, the money is kept in 
 London as rent ; nothing is returned to Amer- 
 ica in its place, and we have a " favorable bal- 
 ance of trade" because we send more to Eng- 
 land than she sends to us. 
 
 Of course there are times when an " unfavor- 
 able balance of trade " is dangerous. When the 
 excess of goods imported represents, not profits, 
 but debt, there is trouble ahead. When we 
 were borrowing money from Europe to carry on 
 our war we were getting ready for a pinch when 
 the time came to pay it back. When the peo- 
 ple of the Argentine Eepublic, in the height of 
 the late boom, imported all sorts of useless lux- 
 uries on credit, discounting the future growth 
 of the country, they were laying the train for a 
 financial explosion. But even in these cases 
 there was prosperity so long as the "unfavorable 
 balance" could be kept. There were no com- 
 plaints while the United States and the Argen- 
 tine Republic were being "flooded with foreign 
 goods." Everybody was making money then, 
 and it was only when the time for settlement 
 came and the balance had to turn the other way 
 that the hard times began. 
 
 On the other hand England always has a 
 
THE BALANCE OF TRADE. 51 
 
 heavy balance of trade "against '' her, and she 
 is being steadily enriched by it. In 1890 her 
 imports were greater than her exports by $462,- 
 000,000. This means that the whole world is 
 paying her tribute, and not being able to pay it 
 in money, is paying in goods. About $100,000,- 
 000 of this stands for freights collected by British 
 shipowners. Another $70,000,000 comes from 
 India, in the form of salaries of British officials 
 and interest on bonds. The rest represents the 
 profits on British investments in foreign rail- 
 roads, telegraphs, ranches, mines, government 
 loans and other enterprises all over the world. 
 According to the balance-of -trade theory, Great 
 Britain should have sent out $462,000,000 in 
 cash in 1890 to pay for her excess of imports. 
 But the actual fact was that in addition to send- 
 ing her $462,000,000 worth of goods more than 
 she sent them, foreign nations paid her a bal- 
 ance of $43,900,000 in gold and silver. 
 
 On the other hand let us take a look at 
 Hawaii. There is a country that ought to be 
 piling up gold and silver if there be any truth 
 in the balance-of-trade theory. Last year Ha- 
 waii sold goods to the value of $13,023,304, and 
 bought only $6,962,201 worth. That leaves a 
 balance of $6,061,103 that should have been 
 sent to the islands in coin. But it happens that 
 the net imports of gold and silver into Hawaii 
 for the year amounted to only $815,554.30. 
 What became of the extra $5,245,548.70? It 
 mostly stayed in San Francisco. The owners of 
 a large part of the Hawaiian sugar lived in this 
 city, and when they sold their crops they spent 
 
52 THE TARIFF. 
 
 the money here instead of sending it to the 
 islands. The balance of trade that seemed so 
 favorable to Hawaii was really all in favor of 
 the United States. 
 
 The truth is that it is to the interest of every 
 nation to get just as much as it can for what it 
 has to sell, just as much as it is the interest of 
 every private merchant to do the same. If we 
 can get a ton of English coal for three bushels 
 of American wheat we are making a better 
 trade than we should be if the same amount of 
 coal cost us four bushels of wheat. As long as 
 our imports consist of useful things that come 
 to us without making us mortgage the future 
 we have no reason to be afraid of getting too 
 much of them. The more the better. Of course 
 if we buy luxuries we are unable to pay for we 
 shall suffer for it when the time to settle comes 
 round. 
 
CHAPTER IX. 
 
 THE TARIFF AND SHIPPING. 
 
 It is pretty generally known that our shipping 
 industry is in a bad way. Instead of keeping 
 pace with the progress of the country in other 
 directions, it has been declining for more than 
 thirty years. The following table shows in a 
 graphic form the extent of the decline. It exhib- 
 its the percentage of our foreign trade carried 
 on in American vessels at different times: 
 
 1855 1861 1865 1870 1875 1880 1885 1890 
 
 65.2 
 
 27.7 
 
 35.6 
 
 17.6 
 
 17.2 
 
 12.3 
 
 53 
 
54 THE TARIFF. 
 
 Plainly our merchant marine is rapidly ap- 
 proaching a vanishing point. And yet a gen- 
 eration ago America seemed certain to be the 
 greatest sea power in the world. It was gain- 
 ing on England as rapidly in ships as in rail- 
 roads.. It possessed practically as much ton- 
 nage as Great Britain and more than all the 
 rest of the world put together. When the Brit- 
 ish navigation laws were repealed and ships of 
 all nations were allowed to share the English 
 trade it was predicted in Parliament that the 
 Stars and Stripes would soon drive the Union 
 Jack from the ocean. In 1837 our tonnage in 
 the foreign trade was only 810,000. Twenty 
 years later it had increased to 2,463,000, and in 
 1861 it had reached 2,642,000 more than two 
 and a half times its amount to-day. In 1861 
 the United States owned 5,539,813 tons of ship- 
 ping of all kinds, the entire British Empire 5,895,- 
 369 and all the rest of the world 5,800,767. The 
 American tonnage exceeded that of the United 
 Kingdom, not counting the British colonies. 
 In 1890 we had only 928,062 tons in the foreign 
 trade and 4,424,497.44 tons in all. Not only 
 had our ships trading over seas almost entirely 
 disappeared, but even our tonnage in the coast- 
 ing trade, carefully protected as it was from all 
 foreign competition, remained almost station- 
 ary. At the same time Great Britain, which 
 had thrown even her coasting trade open to the 
 free competition of the world, had leaped ahead 
 at a rate never witnessed before. Her net ton- 
 nage, which was 4,658,687 in 1860, had jumped 
 to 7,759,008 in 1889, and her builders turned 
 
THE TARIFF AND SHIPPING. 55 
 
 out more tons of new shipping in a single year 
 than we have on our whole registry. In 1890 
 the gross tonnage of British vessels of over 100 
 tons each was 10,585,747 for Great Britain, and 
 1,342,877 for the Colonies, or 11,928,624 for the 
 whole empire, against 3,515,552.80 for the 
 United States. In steamers the difference was 
 even more remarkable. There were 6,595 Brit- 
 ish steam vessels, of 8,653,543 gross tons, 
 against 2,766 American vessels of 1,722,481.25 
 tons. 
 
 Now what was the cause of all this ? It was 
 very simple. Up to the year 1855 or there- 
 abouts the commerce of the world was carried 
 on in wooden ships, and the cheapest and best 
 wooden ships in existence were built in the 
 United States, as they still are. To this day 
 our builders can turn out wooden vessels 30 per 
 cent cheaper than those of England can. But 
 about 1855 iron began to force its way into use 
 as a shipbuilding material, and in this direction 
 the English had as great an advantage over us 
 as we had over them in wood. They had great 
 deposits of coal and iron close by each other 
 and close to tide-water, with ample supplies of 
 skilled labor to work them. The result was 
 that they could build iron ships 30 per cent 
 cheaper than we could* Now, an iron vessel is 
 lighter than a wooden one of the same size ; it 
 can carry more freight, it lasts longer and com- 
 mands better rates of insurance. Consequently, 
 it has an advantage that cannot be overcome in 
 competing for business. After the repeal of 
 the British navigation acts in 1849 Englishmen 
 
56 THE TARIFF. 
 
 were allowed to buy the cheap American 
 wooden ships, and so kept themselves from be- 
 ing driven from the sea. but when the condi- 
 tions changed and the English ships became 
 cheaper we were forbidden to profit by their ex- 
 ample. Our merchants were compelled to use 
 American ships or none at all, and as they 
 could not compete with their foreign rivals 
 with American ships they used none. 
 
 If Congress, immediately after the change in 
 the methods of shipbuilding, had admitted all 
 the materials for the construction of iron ships 
 free of duty something might have been done to 
 check the decay of our merchant marine. But 
 it not only did not do this, but piled new bur- 
 dens upon the struggling industry. Between 
 1855 and 1861 our shipping was just trembling 
 in the balance. Sharp eyes could see that it 
 was about to go down, but to the casual observer 
 it seemed as flourishing as ever. Our flag still 
 flew on every sea. But in 1861 and after came 
 a series of stunning blows. The Morrill Tariff 
 cut down cargoes and increased the cost of ma- 
 terials for building and repair. The Confeder- 
 ate cruisers swept our flag from the ocean, and 
 under the thoughtful provisions of our naviga- 
 tion laws an American vessel once transferred 
 to a foreign flag could never again be registered 
 in the American merchant marine. If our ship- 
 building industry had been in a healthy condi- 
 tion these losses would soon have been made 
 up, but as it was, the vessels burned or sold 
 were not replaced. After the war our shipping 
 kept on going steadily down hill, and it has 
 
THE TARIFF AND SHIPPING. 57 
 
 never yet shown signs of recovery. The lowest 
 point it ever reached is indicated in the reports 
 for 1890. 
 
 The palmy days of the American shipping 
 industry were during the low tariff period from 
 1846 to 1861. At that time we not only did 
 three-quarters of our own foreign carrying trade, 
 but we did a large part of the carrying for 
 other nations. We had a greater tonnage of 
 vessels sailing from one foreign port to another 
 and never visiting an American port except for 
 repairs than we have now in our entire foreign 
 trade. We collected enough in freight charges 
 from foreigners to make up for a consider- 
 able excess of imports. At present the balance 
 is on the other side. We pay to British ship- 
 owners more than enough to wipe out the al- 
 leged benefits of our " favorable balance of 
 trade" or rather this so-called favorable bal- 
 ance is caused largely by the necessity of selling 
 more goods than we buy in order to pay these 
 British freight charges. 
 
 The only cure protectionists have to offer for 
 the wretched condition of our shipping industry 
 is subsidies. In other words, after having made 
 the business unprofitable by law they propose to 
 hire people to carry it on in spite of the laws. 
 There is no doubt that we can acquire a mer- 
 chant marine in this way, although no nation 
 has ever done it, if we are willing to pay enough 
 for it. But the best and cheapest way to go 
 about it, if we are determined to tax the people 
 in one direction to overcome the effects of taxes 
 in another, would be to have the Government 
 
58 THE TARIFF. 
 
 build the ships and own them itself. Then it 
 would be sure of getting its money's worth. To 
 support a merchant marine like that of Great 
 Britain, on the plan proposed by the Tonnage 
 Bounty Bill defeated in the last Congress, would 
 cost the Treasury at least $140,000,000 a year. 
 We could match every vessel that England owns 
 for $1,000,000,000. The interest on that would 
 be $30,000,000 a year, and $40,000,000 more 
 would provide a fund to replace the ships when 
 they wore out or ran aground. The Govern- 
 ment could own its own merchant marine, there- 
 fore, for half what it would cost on the bounty 
 plan to encourage private speculators to invest 
 in one. 
 
 But the question is, whether it is a good policy 
 to spend the taxpayers' money in that way. If 
 we are going to adopt socialistic principles 
 throughout there is nothing more to be said. If 
 the Government is to own all the factories and 
 butcher-shops, and farms and grocery stores, 
 there is no reason why it should not own the 
 ships. Certainly it would be better for it to 
 own these things than to hire people to carry on 
 business at a loss. But so long as we stick to 
 the old way of having people earn their own 
 living on their own hook the best thing the Gov- 
 ernment can do for the shipping industry is to 
 keep its hands off. 
 
 In the days when our shipping thrived and 
 grew we paid no subsidies. Our merchants and 
 seamen took care of themselves. Our ships 
 were better, faster and cheaper than those of 
 other nations ; they had better crews and were 
 
THE TARIFF AND SHIPPING. 59 
 
 more smartly sailed; they commanded better 
 rates of freight and insurance, and they took 
 the cream of the business. .At the present day 
 England pays no subsidies, except in very ex- 
 ceptional cases, like the line from Vancouver to 
 China, which is considered a link in the chain 
 that binds the empire together. She spends 
 something less than $3,500,000 a year on her 
 entire foreign mail service, and $210,000 a year 
 to retain certain specially constructed steamers 
 in the naval reserve. This is all the British 
 Government pays toward the support of a mer- 
 chant marine that now includes half the shipping 
 of the globe, and she pays that, not for the bene- 
 fit of the ships, but for certain definite public 
 services. 
 
 We can get all the ships we need just as soon 
 as we are ready to go about it in the right way. 
 As soon as we stop tying up our merchants with 
 all sorts of absurd rules and weighing them 
 down with all sorts of unnecessary fines the 
 ships will come of themselves. But as long as 
 we not only forbid American citizens to buy 
 ships where they can get them on the best 
 terms, but even compel an American-built ves- 
 sel to haul down her flag if the owner of a 
 single fraction of her goes to live abroad for 
 his health we must expect to pay pretty high 
 before we can get the ocean covered with 
 American keels hired at public expense. 
 
CHAPTER X. 
 
 THE TARIFF AND THE FOREIGNER. 
 
 Mr. McKinley claims more for his great bill 
 than the mere protection of American labor. 
 He says that it is making foreigners pay our 
 taxes, so that as far as the duties go we are 
 running our Government at the expense of other 
 countries. This is important, if true. The only 
 drawback is that there is no patent on the in- 
 vention. Almost every nation in the world 
 raises money by a tariff, so that on the McKin- 
 ley theory every nation is helping to support its 
 neighbor's governments instead of its own. If 
 this be true the people of Europe are all on the 
 wrong tack. Instead of complaining of the ex- 
 travagance of their rulers they should be 
 anxious to have their own governments spend 
 as much money and foreign governments as 
 little as possible. But these people have the 
 idea that they pay their own taxes. The Ital- 
 ians are not worrying about the amount of 
 money spent by the French, although on Mr. 
 McKinley's principle they are paying their share 
 of it ; but they grumble all the time at the 
 money spent by their own rulers, although it 
 comes largely from duties, which Mr. McKinley 
 says the foreigners pay. Which is right ? 
 
 Tariff taxes are divided into two parts that 
 paid to the Government and that paid to pro- 
 
THE TARIFF AND THE FOREIGNER. 61 
 
 tected private capitalists. Nobody pretends 
 that foreigners pay the second part, which in 
 this country is about three times as great as the 
 other. When an American woolen manufacturer 
 charges an American buyer a dollar for a yard 
 of cloth which could be bought in England for 
 fifty cents there is no foreigner in the case at 
 all. An American collects the tax and an 
 American pays it. It is estimated that Ameri- 
 can railroads that is to say, American ship- 
 pers and passengers paid, within twelve years, 
 about $180,000,000 more for steel rails than they 
 were worth. The prices of rails have gone 
 down in this country, but at almost any given 
 time they have been higher than the prices in 
 England by nearly the amount of the duties. 
 If the new tin-plate combination can succeed in 
 supplying the American market it will collect 
 about $15,000,000 a year from the American 
 people in taxes above the market value of its 
 goods. 
 
 If any of our taxes are paid by foreigners, 
 therefore, they must be those levied on things 
 we import. Have we anything that throws 
 light on this point ? We have, and fortunately 
 one of the best tests that could be asked has 
 been furnished by Mr. McKinley. In 1890 we 
 bought $87,602,907.72 worth of foreign sugar, 
 and somebody paid the Government $55,166,- 
 703.40 in duties. If that somebody were the 
 foreigner it could make no difference to Ameri- 
 can buyers whether the tax were taken off or 
 left on. But as soon as the duty was removed 
 the price in all the Eastern markets fell by the 
 
62 THE TARIFF. 
 
 full amount that had formerly been collected. 
 Clearly, the duties had come out of American 
 pockets. 
 
 There are plenty of other cases in which it is 
 plain on its face that the foreigner does not and 
 cannot pay the tax. For instance, the lowest 
 tax imposed by the McKinley bill on imported 
 horses is $30 apiece. Now, on the Mexican 
 frontier there is an abundance of mustangs 
 that can be bought at $15 or $20 each. It will 
 hardly be said that when a Mexican sells a horse 
 for $15 to be taken across the line into Texas he 
 pays $30 to our Government for the pleasure of 
 making the trade. The $30 is paid by the Texan 
 buyer, and when he gets his horse home he has 
 a $45 animal. 
 
 Anybody that has ever lived near a frontier 
 knows how such things go without being told. 
 The merchants of San Diego know who pays 
 the Mexican duties on the flour they sell in 
 Lower California. If they had to deduct those 
 duties from the price of the flour the Sheriff 
 would be running their business inside of a 
 week. Merchants in general, if they have any 
 dealings with foreign countries, understand the 
 subject equally well. Whenever one of them 
 buys a bill of goods abroad he pays the market 
 price in the place of sale, and then pays the duty 
 besides. If this were not so there could be no 
 such thing as a market price anywhere. There 
 would be as many different prices as there were 
 tariffs in the world. 
 
 If you pick up an English paper devoted to 
 the iron trade you will find steel rails of a cer- 
 
THE TARIFF AND THE FOREIGNER. 63 
 
 tain grade quoted at a certain figure. You can 
 go to Lancashire and buy them at that rate, 
 and when you have bought them they are yours 
 and you can do what you please with them. 
 You can send them to the United States and pay 
 a duty of $13.44 per ton, or to Hawaii and pay 
 10 per cent, or to Chile and pay 15 per cent, or 
 to Mexico and pay nothing at all. If you saw 
 rails quoted at 4 per ton and told the manu- 
 facturer that you wanted to buy 5,000 tons for 
 the United States, for which you would pay 1 
 6s; 1,000 tons for Hawaii, for which you would 
 give 3 7s 6d ; 2,000 tons for Chile, for which 
 you would give 3 5s, and 2,000 tons for Mexico, 
 for which you would give 4, he would edge off 
 behind a clerk until a policeman could search 
 you for a possible dynamite bomb. Yet you 
 would be doing precisely what protectionists 
 say is always done in such cases. You would 
 be deducting the duties in each country from 
 the foreign price. 
 
 That is not the way business is carried on. 
 When we cannot pay the full market price for 
 English steel rails, add freight, duty and profits, 
 and still sell them as cheap as the American 
 article, we do not buy them. There are many 
 years in which scarcely a ton of foreign rails is 
 sold in the United States. 
 
 The way the tariff works in this respect is to 
 pinch the American buyer when he most feels 
 the squeeze. We put a heavy duty on rails. 
 In ordinary years, when railroad building is 
 slack, there is not enough trade to keep our own 
 mills busy, and no rails are imported. Then 
 
64 THE TARIFF. 
 
 comes a sudden excitement. Railroads race 
 with each other to extend their lines. The 
 American mills cannot fill their orders, prices 
 go up, rails must be had at any figure ; we send 
 abroad for them, and our shippers have to pay 
 the taxes. 
 
 We put a duty of twenty-five cents a bushel 
 on potatoes. It is to "protect the farmer." The 
 farmer has a good crop ; he raises more potatoes 
 than he can sell, and the price goes down in 
 spite of the duty. Then comes a bad year ; 
 the crop is a failure, and the people along the 
 border have to import from Canada or go with- 
 out. Now would be the time for the American 
 farmer to profit by the tax, but he has no pota- 
 toes to sell. The consumer has to pay double 
 prices, and nobody gets any benefit from them. 
 
 The wheat growers of California have a good 
 chance to see who pays the duties by looking 
 at their grain bags. Almost all that are used 
 are imported. The price in San Francisco is the 
 price in Calcutta with freight, duties and other 
 expenses added. Any farmer can buy his bags 
 two cents a pound cheaper by agreeing to pay 
 the duties himself, but he will find that what- 
 ever form of figuring he may adopt the tax 
 comes out of his pocket in the end. The fact 
 was openly avowed by the late Republican Leg- 
 islature, which asked Congress to remove these 
 duties on the ground that the farmers had to 
 pay them while nobody gained any benefit from 
 them. 
 
 If the McKinley idea were correct, it is safe 
 to say that there would not be a tax in the world 
 
THE TARIFF AND THE FOREIGNER. 65 
 
 except tariff taxes. Every nation would be so 
 eager to make its neighbors pay its expenses 
 that it would pile on duties until it had money 
 enough not only to keep its government running, 
 but to divide among its people. The nations 
 with the highest tariffs would be the most pros- 
 perous, for they would be drawing in the most 
 money from abroad. Guatemala, Russia and 
 Italy would be getting rich faster than England, 
 Holland and New South Wales. Until we see 
 a state of things something like this we may as 
 well stick to the old doctrine that the only way 
 one nation can make another foot its bills is to 
 collect its taxes with an army. 
 
CHAPTER XI. 
 
 LOCAL AND TARIFF TAXES. 
 
 One of the worst points in the plan of collect- 
 ing taxes by means of a tariff is the fact that 
 people under such a system do not realize how 
 much they pay and so do not check extrava- 
 gance in their servants. If the taxpayers could 
 measure exactly what the National Government 
 costs them, as they can with State and local 
 governments, the late Congress would never 
 have been allowed to spend a billion dollars. 
 The people were quick enough to make them- 
 selves heard when the California Legislature in 
 1889 appropriated $12,000,000 for two years' ex- 
 penses, because that money could be traced. But 
 the average citizen does not realize that every 
 time he buys a hat, or a suit of clothes, or a 
 cigar, or a codfish, he is paying taxes to the 
 General Government, or to somebody to whom 
 that Government gives the privilege of taxing 
 the community for his private profit. 
 
 Let us compare the amounts which the 
 masses pay on account of tariff and local 
 taxes. Let us take a workingman, with an 
 average family, living in a rented house as- 
 sessed at $1,500. That there may be no dis- 
 pute, we will assume that the landlord adds all 
 the taxes to the rent, which as a general thing 
 he does not and cannot do. The personal prop- 
 
LOCAL AND TARIFF TAXES. 67 
 
 erty of the family may be assessed at $200. 
 We have, then : 
 
 Real estate $1,500 
 
 Personal property 200 
 
 Total $1,700 
 
 On which the State and local taxes, at, say, 
 $1.50 per $100, would amount to $25.50 a year, 
 or not quite 50 cents a week. That is a good 
 deal of money, and worth cutting down as much 
 as possible. But how does it compare with 
 what the same family pays on account of the 
 tariff? To say that a father, mother and five 
 children spend $150 a year for clothes is cer- 
 tainly a low estimate. Some articles can be 
 bought as cheaply, or almost as cheaply, in this 
 country as abroad. Others cost our people 
 twice, and even three times as much as for- 
 eigners pay for things of the same kind. Tak- 
 ing everything together, it is safe to say that 
 but for the tariff the clothes for which our fam- 
 ily now pays $150 would not cost over $100. 
 We have, then, a tax of $50 on that single 
 item. 
 
 For crockery, glassware, cutlery and furni- 
 ture it would be a very careful or a very poor 
 workingman's family that did not spend at 
 least $25 in a year. Of this about $15 would 
 go for the goods and $10 for the tariff taxes. 
 
 Since the removal of the duties on raw sugar 
 the American consumer has been let off more 
 easily in the matter of food than in anything 
 else. His tea and coffee are free, and his sugar 
 
68 THE TARIFF. 
 
 nearly so, and of course his bread and meat are 
 not affected by the tariff, nor his butter, eggs, 
 cheese, milk and vegetables, except in certain 
 localities. On rice he has to pay a tax of 2 cents 
 a pound, on sardines 5 cents per half box, on 
 salted and smoked fish from half a cent to a cent 
 a pound, on macaroni and vermicelli 2 cents a 
 pound, on chocolate and cocoa the same, on salt 
 12 cents per hundred pounds, on mustard 10 
 cents a pound and on spices 4 cents a pound. 
 Taking all the small imported items together the 
 family may get off with a tax of $5 a year. 
 
 The use of tobacco is a bad habit, but still it 
 is one that is quite commonly indulged in. It 
 costs the victims from 40 cents to $5 a pound in 
 bare tariff taxes in addition to the internal reve- 
 nue taxes and the profits of dealers on their 
 advance of the duties. Whether the tobacco be 
 imported or domestic the taxes are paid just the 
 same, the only difference being that in the for- 
 mer case they are paid to the Government and in 
 the latter they are collected by private producers. 
 If our workingman be anything of a tobacco user 
 at all, his contributions to the tariff under that 
 head can hardly be less than 5 cents a day, or 
 say $18 a year. If he have a son old enough to 
 help him smoke, the family expenses for this 
 item will be at least doubled. 
 
 If this family lived in the East it would have 
 to keep two or three coal fires burning all winter 
 for warmth. But as it lives in San Francisco, 
 we will assume that it has no fire except the one 
 in the kitchen stove, which is used for heating 
 the water for washing as well as for cooking. 
 
LOCAL AND TARIFF TAXES. 69 
 
 It will take at least eight tons of coal a year to 
 keep this stove going. Directly and indirectly, 
 taking into account the effect of the tariff in 
 keeping away cargoes and causing coal famines, 
 the tax on coal keeps the San Francisco price on 
 an average fully $5 per ton higher than it ought 
 to be. But we will say nothing about that. We 
 will simply take the direct cost of the tax and 
 the necessary commissions, amounting to about 
 $1 per ton. That makes $8 a year added to one 
 family's coal bill. 
 
 Here we have tariff taxes for one poor family 
 footing up $91 a year. There are all sorts of 
 odds and ends, such as paper, brushes, toys, 
 matches, medicines, pictures, paint, nails, soap, 
 candles, pins, tinware and the like, which would 
 certainly bring the figures up to an even $100. 
 State and local taxes take $25.50 tariff taxes 
 take $100. For the $25.50 the workman has a 
 school for the education of his children, streets 
 such as they are to walk over to his work, 
 sewers of a kind to prevent disease, a park 
 for his family to breathe in, a library of 60,000 
 volumes, courts and policemen to protect him 
 against robbery or violence, hospitals to care for 
 him if he should be sick, and asylums to receive 
 him if he should be stricken with affliction. For 
 the $100 he has Congress, a supply of great 
 buildings at Washington which he can never 
 see, a skeleton army, a sample of a navy, a mil- 
 lion pensioners, a number of Indian agents, 
 some very good geological, topographical and 
 hydrographic maps, and several Andrew Carne- 
 gies worth $20,000,000 apiece. The Post Office 
 
70 THE TARIFF. 
 
 does not count, because it supports itself for the 
 most part out of its sales of stamps. The San 
 Francisco workman pays his $100 without a 
 murmur, or if he grumbles at anybody it is at 
 the storekeeper. But when the State and city 
 call on him for $25. 50 he is hit hard. He talks 
 about the extravagance of local politicians and 
 the burdens of taxation, and he is willing to 
 support any party that will agree to take $2 off 
 of the annual bill. 
 
 And yet when its nature is understood, the 
 tariff tax is more galling, dollar for dollar, than 
 the direct tax. It comes out of a man's private 
 earnings and is measured by his private expen- 
 ses. The local tax, which is based principally 
 upon land, is the price of a special privilege en- 
 joyed by the one who pays for it. That land 
 gains its value from the presence of the com- 
 munity, and it is only fair that the community 
 should get some benefit from it. The tax is not 
 really a tax at all, but rent. Moreover, what- 
 ever is spent in this way is spent for the public 
 benefit, unless it is stolen. But three dollars 
 collected in tariff taxes go into private pockets 
 for every dollar that goes into the public treas- 
 ury. Some things protected by duties are not 
 imported at all, but the prices of the American 
 articles are just as high as those of foreign ar- 
 ticles would be with the duty added. In these 
 cases the Government does not get a cent the 
 whole tax is a dead loss to the people who pay 
 the money. 
 
 Consider what it means to a working family 
 to have $100 or even 50 taken out of its yearly 
 
LOCAL AND TARIFF TAXES. 71 
 
 income without any return and you may have 
 some measure of the hardships of tariff taxa- 
 tion. If this amount of money were taken 
 directly by the tax-gatherer no government 
 could live through the storm that would follow. 
 But until the tariff question began to be dis- 
 cussed a few years ago few people realized that 
 they were being taxed by customs duties at all. 
 They thought it was natural to pay high prices 
 for goods in America, and it never occurred to 
 them that every working family was deprived 
 of from $50 to $100 a year through the fault of 
 the Government. Still less did they realize that 
 three-fourths of this money went, not to support 
 the Government, but to pay for castles in Scot- 
 land and coaching tours through England for 
 rich manufacturers and mine owners. This is 
 why they looked so closely after the trifle of 
 local taxes, which most of them were not called 
 upon to pay at all, and allowed Congress to 
 build up the tariff as if it were making laws for 
 the moon. 
 
CHAPTER XII. 
 
 WAGES AND LABOR COST. 
 
 In the early days of the tariff the principal 
 protectionist argument used to be that we 
 needed duties because European countries had 
 so much more capital than we that they could 
 freeze us out of business if we allowed them to 
 compete with us. Now that the United States 
 has become the richest country in the world 
 this idea has been dropped. It is not American 
 capital, but American labor that is now said to 
 need protection. European manufacturers hire 
 their workmen at low wages, while American 
 manufacturers have to pay high wages. This 
 makes American goods cost more, so that if 
 people were allowed to buy where they pleased 
 they would buy of foreigners. 
 
 At the bottom of this idea, of course, is the 
 belief that everything is made by labor. In a 
 sense this is true, but let us see in what sense. 
 If you go into the Union Iron Works you will 
 see an army of huge machines grinding, plan- 
 ing, polishing and boring the great pieces of 
 metal that are about to be turned into ships and 
 engines. 
 
 A man turns a handle and an immense cast- 
 ing slides into place under a drill. The drill 
 begins to eat into the iron and the man leaves 
 it and feeds another machine. At the proper 
 
WAGES AND LABOR COST. 73 
 
 time he comes back and slides the casting into 
 a new position. 
 
 This man is paid, perhaps, $4 a day. An 
 English workman in his position might get $2 
 a day, and a German workman $1. But the 
 machines which he has attended may do $100 
 worth of work in a day, and one mistaken turn 
 of a lever might do $1,000 worth of damage. It 
 is not muscle work this man is doing, but head- 
 work. The muscle work is done by the power 
 of steam. The slightest difference in the qual- 
 ity of the head work would amount to more than 
 the whole of the man's wages. If the factory 
 were run on the easy-going German plan, by 
 which one man looks after one machine and 
 knocks off half a dozen times a day to fill his 
 pipe and commune with his beer glass, there 
 might be a saving in wages, but the interest on 
 capital would be running on, rents, taxes and 
 insurance would have to be paid, fuel would be 
 burning, machinery would be wearing out and 
 the returns would not be coming in to meet the 
 expenses. 
 
 It is a safe rule that that labor is the cheapest 
 which keeps the plant of a factory worked up 
 to its fullest capacity and makes the fewest 
 mistakes. A weaver who could turn out a lot 
 of cloth without a flaw would be cheap at the 
 highest wages paid in the trade, while one who 
 had to be constantly fined for imperfect work 
 would be dear if he worked for nothing. 
 
 The cheapest wheat in the world is raised in 
 California, where wages are higher than almost 
 anywhere else. It is so for the very reason that 
 
74 THE TAEIFF. 
 
 wages are high, and therefore every care is 
 taken to make labor go as far as possible. It is 
 true that harvest hands are paid $2 or S3 a day 
 in this State, while they can be had in Russia 
 for fifty cents, but in California five men and a 
 dozen horses will harvest thirty acres of grain 
 a day with a header a job that would take the 
 same number of Russian peasants two weeks to 
 get through with their sickles. The California!! 
 farmer can make money raising twenty bushels 
 of wheat to the acre at a dollar a bushel the 
 English farmer loses money when he raises 
 thirty bushels to the acre at $1.50. The differ- 
 ence is principally due to the fact that in Cali- 
 fornia the laborer is not really a laborer at all, 
 but a superintendent of horses and steam en- 
 gines. 
 
 That is what new inventions are tending to 
 make the laborer everywhere. We can easily 
 imagine a time when every bit of actual work 
 in the world will be done by machinery, and 
 men will have nothing to do but to see that the 
 machines work right. When that time comes 
 the fortunate employer will be the one who has 
 the most intelligent and faithful men, not the 
 one who pays the lowest wages. Everybody 
 understands even now that the poorest economy 
 is to hire a cheap manager. The infant insur- 
 ance companies of California do not complain 
 that their great rivals of New York are able to 
 hire Presidents at $15 a week and actuaries at 
 $l.f)0 per day. There are factories in New Eng- 
 land which paid less for common labor in 1880 
 than they had paid in 1860, but their Superin- 
 
WAGES AND LABOR COST. 75 
 
 teiidents were getting three times as much. 
 And the more brains can be mixed in with 
 labor of all kinds the higher wages can employ- 
 ers afford to pay. 
 
 Americans have a peculiar knack of getting 
 the benefit of natural forces, of organizing in- 
 dustry and of doing things on a large scale. 
 Wherever this quality has room to make itself 
 felt Americans can undersell the world, while 
 paying the highest rates of wages. But where 
 there is no chance to bring this genius for man- 
 agement into play Americans have no business 
 to be wasting their time. Our great factories 
 can turn out cheaper watches than can be made 
 anywhere else in the world, because one of them 
 can make ten thousand timepieces while the old- 
 fashioned hand-worker of Europe is pottering 
 over one. But it would not pay us to try to 
 raise tea, because the tedious work of picking 
 the leaves can be done about as well by the 
 cheap labor of China as by the high-grade labor 
 of America. Hitherto we have not made tin 
 plates, because the process of dipping has been 
 too slow and given too poor returns for our style 
 of work. American labor can be used to better 
 purpose in other directions. This is why Welsh- 
 men have been imported to set the industry go- 
 ing here. But if we find that new inventions 
 enable the dipping to be done by machinery, 
 then American workmen will take the lead in 
 this enterprise, as they have in others. 
 
 As a general rule it will be found that when 
 working people of one country are paid more 
 than in another it is because they earn more. 
 
76 THE TARIFF. 
 
 The rule holds good even in so simple a matter 
 as house service. In England servants can be 
 hired for $5 a month, while in California they 
 expect $20 to $25. But one servant in Califor- 
 nia will do all the work of an ordinary family, 
 while an English family in a corresponding 
 position would have to hire one to cook, 
 another to wait on the table, another to an- 
 swer the bell, another to wash the dishes and 
 another to clean up the rooms, and any one of 
 the lot would leave if asked to do anything that 
 belonged to the duties of another. Lord Bras- 
 sey found that in building a railroad a given 
 amount of money could be made to go further 
 in hiring English workmen than in hiring twice 
 the number of Italians at half the wages, and 
 in the same proportion it is cheaper to hire 
 Americans than Englishmen. While railroads 
 on the Pacific Coast are fond of hiring Chinese 
 section-hands on account of the convenience of 
 dealing with them in gangs, everybody who has 
 watched their tender way of handling their 
 shovels knows that, as far as actual work is con- 
 cerned, they are dearer at $1 a day than white 
 men at $2. 
 
 Secretary Blaine once called attention to the 
 fact that while cotton operatives in Massachu- 
 setts were generally paid a few cents more per 
 week than in England they worked up more 
 than twice as much cotton per hand, and turned 
 out fifty per cent greater value of finished goods. 
 Labor Commissioner Carroll D. Wright, in his 
 latest report, shows that while wages are higher 
 in Northern than in Southern iron-works, the 
 
WAGES AND LABOR COST. 77 
 
 actual cost of labor is higher in the South than 
 in the North. 
 
 It is safe to say that in the long run workmen 
 do not receive more pay than they earn. Wages 
 are not a gift from employers they are a share 
 of the products of labor. If they are high it is 
 because much has been produced. When Amer- 
 ican workmen understand that their high wa^es 
 are honestly earned and are independent of any 
 pretended help from politicians at Washington, 
 they will insist upon getting their money's worth 
 for what they spend instead of supporting a 
 tariff system that purports to mean high wages 
 for workers and really means high prices for 
 capitalists. 
 
CHAPTER XIII. 
 
 HOW MANY ARE PROTECTED ? 
 
 The benefits of protection are something like 
 the sea-serpent they are always somewhere 
 else. The average protectionist believes that 
 the tariff raises wages. If you ask him how it 
 raises his wages he will reply that it does so in 
 an indirect way by improving the condition of 
 some other person. Now, there is a widely 
 accepted principle to the effect that the tail can- 
 not wag the dog. If the persons whose wages 
 are directly affected by the tariff very greatly 
 outnumber those who have nothing to do with 
 tariff taxes except to pay them, they may set 
 the standard for the whole community. But if 
 the directly protected classes form an insignifi- 
 cant minority of the total population, it is clear- 
 ly impossible for them to fix the rate of wages 
 for the majority. It is of the first importance, 
 therefore, to know how many people are en- 
 gaged in producing the things that are supposed 
 to be protected by the tariff, as compared to the 
 number of people whom the tariff does not and 
 cannot affect except to their injury. 
 
 Unfortunately, the census returns for 1890 
 have not yet been published with sufficient com- 
 pleteness to enable a calculation to be made for 
 that year. The census of 1880 showed that 
 about one person in twenty might be considered 
 
 78 
 
HOW MANY ARE PROTECTED? 79 
 
 to be protected. The other nineteen, on the 
 McKinley theory, have their wages sustained 
 above the pauper level of Europe solely by the 
 lifting power of the one. This would seem cal- 
 culated to strain any man's strength, even if the 
 wages of the one were higher at the start than 
 those of the nineteen, but when we consider the 
 fact that the protected industries almost inva- 
 riably pay lower wages than the unprotected, 
 the exploit, if it be really accomplished, proves 
 conclusively that Kobert Elsmere was mistaken 
 in denying the existence of miracles. 
 
 Some of the greatest unprotected industries 
 have come into existence since 1880, and others 
 have been developed out of all proportion to the 
 general increase of population. Almost all the 
 vast industries dependent upon electricity, for 
 instance, are the growth of the past few years. 
 No protection is possible here, but the taxes on 
 copper and other necessary materials have con- 
 stantly tended to stunt the expansion of electri- 
 cal enterprises. The single unprotected indus- 
 try of railroad transportation employs about a 
 million men nearly if not quite as many as are 
 engaged in all the directly protected industries 
 combined and the number of railroad em- 
 ployees in the little group of Middle States, com- 
 prising New York, New Jersey, Pennsylvania, 
 Delaware, Maryland and part of West Virginia, 
 in 1889, was almost as great as in the whole 
 United States in 1880. 
 
 If all the manufactures of the country were 
 protected, as they are often assumed to be, only 
 about one person in five would be within the 
 
80 THE TARIFF. 
 
 circle of tariff bounties, even if the employers 
 conscientiously divided the profits of taxation 
 among their workers. But what is not gener- 
 ally understood is the fact that of the manufac- 
 turing industries themselves only a small frac- 
 tion are protected. Although the returns of the 
 last census have not been published for the 
 whole country, we can form an idea of the gen- 
 eral state of things by examining the statistics of 
 a typical manufacturing city, such as St. Louis. 
 The manufacturing establishments of St. 
 Louis in 1890 employed 93,610 hands. Of these 
 55,507 were engaged in industries employing 
 over a thousand hands each. The list of about 
 two hundred minor occupations is too long to 
 be examined here, but the proportions of pro- 
 tected and unprotected workers remain about 
 the same throughout. Of the greater industries 
 the following may be called protected : 
 
 HANDS 
 
 Boots and shoes, factory product 2,592 
 
 Men's clothing 5,003 
 
 Malt liquors 2,870 
 
 Saddlery and harness 1,202 
 
 Tobacco working 4,058 
 
 15,735 
 
 Concerning this table, it may be remarked 
 that there is not one of these industries that 
 would not flourish at least as well if there were 
 no tariff at all. American boots and shoes are 
 sold all over the world, American clothing man- 
 ufacturers would profit more by free wool than 
 
HOW MANY ARE PROTECTED? 81 
 
 they would lose by the abolition of the duties 
 on clothes, the St. Louis breweries are in no 
 danger of being washed away by a freshet of 
 foreign beer, and the cowboy who sends to St. 
 Louis for his riding outfit would not bestride an 
 English saddle for half the money. But waiv- 
 ing all this, we find 15,735 protected workers 
 out of 55,507. There are 8,9:23 other workers 
 engaged in making things of which some are 
 sheltered by the tariff and some are not. These 
 things are : 
 
 HANDS 
 
 Foundry and machine-shop products 6,345 
 
 Furniture factory products 1,563 
 
 Iron work, architectural and ornamental. 1,015 
 
 8,923 
 
 Some of the products of the foundries and 
 furniture factories of St. Louis might conceiv- 
 ably be imported; the rest would have to be 
 made on the spot, whether we had protection or 
 free trade. 
 
 The rest of the great industries of St. Louis, 
 classed by the census as manufacturing, are 
 totally unprotected. Here is the list : 
 
 HANDS 
 
 Bread and other bakery products 1,434 
 
 Brick and tile 1,952 
 
 Carpentering 3,396 
 
 Carriages and wagons 2,283 
 
 Steam railroad cars 1,406 
 
 Men's clothing custom work and repair- 
 ing 2,299 
 
82 THE TARIFF. 
 
 Dressmaking 1,047 
 
 Confectionery 1,242 
 
 Cooperage 1,008 
 
 Planing mill products 1,587 
 
 Masonry 4,606 
 
 Painting and paper-hanging 2,183 
 
 Plumbing and gas-fitting 1,047 
 
 Printing and publishing 5,153 
 
 Tin-smithing, copper-smithing and sheet- 
 iron working 1,166 
 
 30,849 
 
 It thus appears that a large majority of the 
 men employed in the manufacturing industries 
 of a manufacturing city are entirely unprotected. 
 If we should look at the other industries of the 
 same city at the clerks, the day laborers, the 
 drivers, the teachers, the lawyers, the merchants, 
 the bouse servants and all the thousands of per- 
 sons whose occupations cannot possiby be con- 
 nected with foreign imports we should find 
 the proportions enormously increased. But it is 
 when we go into the country, among the farm- 
 ers, that the real insignificance of protection as 
 a factor in promoting prosperity is most appar- 
 ent. There are whole States in which a search 
 warrant would scarcely bring to light a single 
 person gaining any direct advantage from the 
 tariff. And yet in these very States the voters 
 have insisted upon taxing themselves year after 
 year, upon the theory that somebody somewhere 
 else would profit by their sacrifices and give 
 them a share of the returns. 
 
CHAPTER XIV. 
 
 AMERICAN TARIFFS PART FIRST. 
 
 In the early days, before the United States 
 had been heard of, each American colony had 
 its own tariff, not only against foreign countries, 
 but against its neighbor colonies. In some, as 
 in Pennsylvania, the duties were protective 
 in others, as in Massachusetts, they were merely 
 for revenue. In all they were very low com- 
 pared with the present national rates. In 
 Massachusetts the tax was only one quarter of 
 1 per cent on everything. In Virginia it was 1 
 per cent. In Pennsylvania it was assessed 
 somewhat on the plan of our present tariffs so 
 much a pound on some things, so much a yard on 
 others, so much per cent on others but the 
 duties were very much lower than the Pennsyl- 
 vanian mill-owners insist upon having now. 
 They generally amounted to about 7 or 8 per 
 cent. That was all the really "infant" indus- 
 tries were thought to need then, although now 
 that they are full grown they demand ten times 
 as much. 
 
 We did a good deal of manufacturing in those 
 days. We made iron and sold it in England. 
 We spun and wove the home-grown wool for 
 our homemade clothes. But most Americans 
 were farmers. This was not because they could 
 not carry on manufactures, but because they 
 
84 THE TARIFF. 
 
 liked farming better and could make more 
 money at it. There was plenty of land and 
 anybody could be independent. Wages were 
 higher than anywhere else in the world. There 
 was no need for labor unions, for if a man did 
 not like the way his employer treated him he 
 could leave and take up a piece of land of his 
 own. Manufacturers complained loudly of this 
 independence of labor, and insisted that some- 
 thing ought to be done to balance the attrac- 
 tions of the farms. And as all the countries of 
 Europe were trying to protect their manufac- 
 tures by high duties it was easy to make people 
 think that we ought to do the same. The new 
 Federal Government was greatly in need of 
 money and the only way it could raise it was by 
 a tariff. So when the Constitution was formed 
 the States agreed to give up their right to lay 
 duties and turn it over to Congress. The first 
 United States Tariff law was passed in 1789. 
 The duties under it ranged from 5 to 15 per 
 cent, averaging about 8-J. The principal object 
 of the bill was to raise money, but the taxes 
 were so arranged as to put something in the 
 pockets of the manufacturers at the same time. 
 But people were modest in those days. They 
 did not ask for 50, 100 and 200 per cent for 
 their infant industries, as their great-grand- 
 children did a hundred years later. They were 
 satisfied with 7 or 8, and even that was con- 
 sidered so high that there was much discontent. 
 The New England people were especially sore 
 about the tax on molasses. They used to build 
 ships and sail them to the West Indies, bring 
 
AMERICAN TARIFFS PART FIRST. 85 
 
 home cargoes of molasses, turn them into Med- 
 ford rum, carry that to the coast of Africa, trade 
 it for slaves, sell them in the West Indies, buy 
 more molasses, make more rum, and so keep 
 swinging round the circle indefinitely. Their 
 great industries were commerce and fishing, 
 and they objected to any taxes that interfered 
 with them. But Pennsylvania and the other 
 Middle States succeeded in getting their little 
 protective tariff through. In reality, however, 
 the formation of the new government was the 
 greatest advance for free trade that has ever 
 been known in the world. It destroyed all the 
 tariffs that had interfered with trade among 
 Americans and made a constantly growing ter- 
 ritory entirely free. 
 
 But after the modest little 8 per cent tariff of 
 1789 was secured the manufacturers were not 
 satisfied. As the infant industries grew older 
 and stronger they seemed to be in need of more 
 and more nursing. Between 1789 and 1816 
 seventeen tariff acts were passed, most of them 
 increasing the duties. Besides, the duties in- 
 creased themselves in many cases without any 
 change in the law. Manufactured goods gener- 
 ally tend to become cheaper as improved ways 
 of making them are introduced. But when 
 taxes are laid by the pound or the yard, instead 
 of by the dollar's worth, they become higher in 
 proportion as the price falls. For instance, if 
 we could buy steel rails in England at a certain 
 time for $100 a ton, a duty of $28 per ton would 
 have amounted to 28 per cent. But later 
 when the price abroad went down to $50 
 
86 THE TARIFF. 
 
 per ton, the same duty would have amounted to 
 twice as much as before, or 56 per cent. 
 By all these means together our early duties 
 were pushed up until by 1802 they averaged 
 19.45 per cent. The item of hats will do for a 
 sample of the general course of things. In 1789 
 the duty on hats was fixed at 7 per cent. In 
 1792 it was raised to 10, in 1794 to 15, in 
 1804 to 17i, in 1812 to 35, and in 1824 straw hats 
 were taxed at 50 per cent. Boots started in 1789 
 at 50 cents a pair, and in 1816 they were paying 
 $1.50, in spite of the improvement in manufac- 
 ture. Loaf sugar was pushed up from 3 cents 
 a pound in 1789 to 12 cents in 1816. Unwrought 
 steel began at 56 cents per hundred pounds in 
 1789, and climbed up to 75 cents in 1790, $1 
 in 1792 and $1.50 in 1828. 
 
 In 1807 the United States reached that condi- 
 tion which, on protectionist ideas, ought to be 
 the happiest a nation can find. Its foreign com- 
 merce was destroyed. To resent the injuries 
 inflicted on us by England and France our ports 
 were closed, and ships in the foreign trade were 
 forbidden either to come in or to go out. Then 
 home industry should have leaped forward, and 
 the country should have thrilled with prosper- 
 ity. But things turned out differently. The 
 chill of death settled on the nation, and not un- 
 til the embargo was raised did prosperity revive. 
 
 In 1812 the duties were doubled all round. 
 This was done to raise money for the war with 
 England, and was not meant to last, and more- 
 over it was balanced by internal revenue taxes 
 on home manufactures. But between the war 
 
AMERICAN TARIFFS PART FIRST. 87 
 
 and the taxes our foreign trade was so nearly 
 cut off that our people got to making a good 
 many things at home which they had formerly 
 bought abroad. When peace came again in 
 1815 commerce of course revived. Merchant 
 ships were no longer captured, the duties were 
 lowered to the old rates, and we bought and 
 sold as before. This annoyed the manufactur- 
 ers, who had enjoyed a monopoly of the Ameri- 
 can market, and they demanded a new tariff. 
 They got it in 1816. 
 
CHAPTER XV. 
 
 AMERICAN TARIFFS PART SECOND. 
 
 The tariff of 1816 is commonly considered the 
 beginning of our modern protective system, 
 although a mild one. It was supported by 
 Calhoun and other Southern leaders, who after- 
 ward became free traders. They favored it 
 because they wanted a better market for cotton, 
 which was still one of the industrial infants, 
 protected by a duty of 3 cents a pound, and also 
 because they had the idea, very common at that 
 time, that protection was necessary to give a 
 nation commercial independence. 
 
 Soon after the passage of the new Tariff bill 
 times became very hard, but it would be a mis- 
 take to lay this either to the protective system 
 or to the removal of the war taxes. It was 
 caused principally by the trouble in getting 
 down from an inflated paper currency to a coin 
 basis, although the loss of the foreign markets 
 for grain and provisions had much to do with it. 
 
 In 1824 there was another large raise in the 
 duties. The leader in the new protective move- 
 ment was Henry Clay, who christened his scheme 
 the "American System," apparently because 
 there was nothing American about it. Up to this 
 time the trade of the United States had been 
 freer than that of any other great country in the 
 world, and one of Clay's principal arguments 
 
AMERICAN TARIFFS PART SECOND. 89 
 
 was that as England was rich and had a high 
 tariff we ought to follow her example. He still 
 held to the infant industry idea, and said, as 
 Garfield did later, that the kind of protection he 
 wanted was the kind that would lead to free 
 trade. Massachusetts and South Carolina were 
 united in opposing this tariff Massachusetts 
 because she knew it would damage her shipping 
 interest, and South Carolina because the cotton 
 planters had come to see that they were depend- 
 ent upon a foreign market. The bill was passed 
 by the almost solid vote of the manufacturing 
 and grain-growing States, and was opposed by 
 the navigating, fishing, tobacco, cotton and 
 sugar States. The grain-growers were uneasy 
 at that time about their foreign markets, and 
 believed the protectionist promises that a high 
 tariff would enable them to sell everything they 
 raised at home. That was nearly seventy years 
 ago. Two generations of farmers have lived 
 and died since then and we still sell a third of 
 our wheat crop abroad. 
 
 In 1825-26 there was a panic. The hard 
 times bore particularly upon the woolen manu- 
 facturers. Protection is like opium it has to 
 be taken in continually larger doses. The 
 woolen men clamored for more protection. 
 They called a convention, which expanded 
 their demands into a complete new tariff. 
 Owing to the approach of a Presidential elec- 
 tion and the supposed strength of the protec- 
 tionist feeling in the doubtful States, no party 
 liked to go on record as opposing protection, 
 but the Jacksonians in Congress loaded the 
 
90 THE TARIFF. 
 
 proposed new tariff bill with all sorts of absurd 
 provisions, especially disagreeable to New 
 England, in the hope that the members from 
 that section would defeat it. But enough New 
 Englanders voted for the bill, with all its de- 
 formities, to put it through. By this time Web- 
 ster had come round to the support of a high 
 tariff, explaining that it was not because he 
 believed in the principle, but because the 
 former course of the Government had forced 
 Massachusetts to turn her attention from com- 
 merce and shipping to manufactures, and her 
 capital had now been invested in that quarter. 
 Nobody was pleased with the new law, and its 
 oppressive features gave it the name of " Tariff 
 of Abominations." 
 
 This tariff served its political purpose, but it 
 almost plunged the country into civil war. The 
 cotton States, led by South Carolina, angrily 
 protested against it, and although the "abomi- 
 nations" began to be cleared out as early as 
 1830, and were almost entirely removed in 
 1832, the Southerners would not be pacified. 
 South Carolina refused to allow the duties to 
 be collected within her limits, and while Con- 
 gress passed a bill to enforce the laws it saw 
 that the taxes must be still further reduced. 
 So in 1833, Henry Clay introduced a bill provid- 
 ing for a steady reduction of duties until there 
 were none higher than 20 per cent. This point 
 was to be reached in nine years, and Clay said 
 that by that time our manufactures ought to be 
 strong enough to stand alone. 
 
 In 1837 there was a general panic all over 
 
AMERICAN TARIFFS PART SECOND. 91 
 
 the world. It was caused by over-speculation 
 and the abuse of credit. In this country it was 
 made worse by the collection of money through 
 the tariff, greatly in excess of the needs of the 
 Government, and its distribution among the 
 States, by which extravagance and reckless 
 borrowing were promoted the people having 
 the idea that the National Treasury was going 
 to make them all rich. 
 
 In 1842 the duties under the Compromise 
 tariff had reached their lowest point, but two 
 months later Congress raised them again. The 
 tariff of 1842 was the last protective tariff we 
 had before the war and it lasted only four 
 years. Its rates were generally much lower 
 than those of the Mills bill. Wool blankets 
 were taxed at 25 per cent, mohair blankets 15, 
 carpets in general 30, cotton manufactures 30, 
 sheetings 25, and woolen manufactures 40 per 
 cent. Many of the taxes which would seem 
 high now were low then on account of the 
 higher prices of the things on which they were 
 levied. For instance, bar iron was taxed at $25 
 per ton, against from $15.68 to $22.40 in the 
 Mills bill. But when bar iron was selling at 
 $100 a ton a duty of $25 was only 25 per cent, 
 while with iron worth $45 a tax of $20 would 
 be nearly 45 per cent. 
 
 This tariff was the work of the Whig party, 
 the high protectionist party of that day. When 
 the Democrats came into power they lowered 
 it to the rates they thought would bring in 
 most revenue, without regard to protection. 
 For the first time since 1789 raw cotton 
 
92 THE TARIFF. 
 
 was put on the free list, and cotton goods were 
 taxed at from 20 to 30 per cent. No manufac- 
 tures of wool, leather, copper, lead, iron or 
 steel were made to pay more than 30 per cent. 
 
 These duties brought in so much money that 
 the Government was soon richer than it had 
 ever been before. The income from customs 
 steadily rose from $23,747,864.66 in 1847 to 
 $64,224,190.27 in 1854. Trade grew in pro- 
 portion. Our exports tripled in ten years, and 
 our imports almost, but not quite, kept up with 
 them. Times were good and everybody was 
 satisfied. The protectionist sentiment gradu- 
 ally died out, until by 1856 there was practically 
 none of it left. 
 
CHAPTER XVI. 
 
 AMERICAN TARIFFS PART THIRD. 
 
 The first Republican National Convention, 
 held in 1856, did not mention the tariff. The 
 Democratic Convention appealed to our "suc- 
 cessful example" as an argument in favor of 
 "progressive free trade throughout the world." 
 A Pennsylvanian stood on this platform and 
 Pennsylvania gave him her votes. Protec- 
 tion seemed finally dead. The next year, so 
 well had the low duties worked, it seemed time 
 to make them still lower. 
 
 The first House controlled by the Republican 
 party passed the Tariff of 1857, under which 
 the duties were lower than they had ever been 
 before since the beginning of the century. The 
 Republicans were divided on the question. Mas- 
 sachusetts cast her solid vote in favor of this 
 tariff. So did Maine. In the Senate Charles 
 Sumner, Henry Wilson, Hamilton Fish and 
 other Republican Senators voted for it. It was 
 called the "Manufacturers' Tariff," because it 
 was asked for by the cotton and woolen manu- 
 facturers, who had decided that wide markets 
 were better for them than high protection. It 
 reduced the duties on manufactures of iron 
 and steel to 24 per cent, on those of cotton 
 and wool to from 15 to 24 per cent, and 
 on steel ingots to 12 per cent. Under it the 
 
94 THE TARIFF. 
 
 duties on all the goods we imported in 1860 
 averaged 15.67, and on the dutiable goods alone 
 19.67 per cent. 
 
 In the fall of 1857, before the new tariff had 
 begun to produce any effects, there was a sharp 
 financial panic caused by over-speculation, and 
 extending all over the world. It was felt 
 much more severely in Europe than here. In 
 England wages were reduced about 25 per 
 cent, but in America wages and general busi- 
 ness hardly suffered at all. The speculators 
 soon straightened out their books, and in a few 
 months the country was more prosperous than 
 ever. But the Government was in trouble. It 
 had been supposed that when the duties were 
 reduced enough more foreign goods would be 
 bought to keep up the income at the custom- 
 houses. But things did not turn out that way. 
 Our people bought less than ever abroad, and 
 consequently less duties were collected and the 
 Government ran short of money. It seemed 
 necessary to increase the rates, not for protec- 
 tion, but to raise more money, and the resigna- 
 tion of most of the Southern Senators and Rep- 
 resentatives after the secession of their States 
 in the winter of 1860, left Congress under the 
 control of men who took advantage of the oppor- 
 tunity to make the increase on protective lines. 
 The Morrill tariff was passed the first of that 
 long series of war tariffs that has lasted to the 
 present day. 
 
 Although the Morrill tariff is commonly spo- 
 ken of as an example of extreme protection, it 
 was low compared to that under which we are 
 
AMERICAN TARIFFS PART THIRD. 95 
 
 living now. It fixed the duties on raw wool at 
 from 5 per cent to 9 cents a pound, against 
 from 32 per cent to 36 cents a pound in the Mc- 
 Kinley bill. Cheap woolen blankets were taxed 
 at 6 cents per pound and 10 per cent, while the 
 McKinley bill charges them 16| cents a pound 
 and 30 per cent. The duties on manufactures 
 of iron averaged about 25 per cent, against from 
 45 to over 100 per cent at present. 
 
 As the war made constantly new demands for 
 money these taxes were steadily increased. The 
 country had its eyes fixed on the soldiers, and 
 all it cared about the tariff was to have it high 
 enough to bring in all the revenue possible. 
 But the high duties were balanced by internal 
 revenue taxes on American manufactures. It 
 was understood that as soon as the war was 
 over these taxes would be removed and the 
 duties would go down with them. The first 
 part of this promise was kept. The internal rev- 
 enue taxes on manufactures were taken off as 
 soon as the money they brought in was no 
 longer needed, but the manufacturers were 
 able to keep the duties as high as ever. Thus 
 their protection was immensely increased with- 
 out the public generally finding it out. Slight 
 changes were made from time to time, but 
 usually in the direction of taking off revenue 
 duties while leaving those for protection about 
 as high as ever, or higher. From 1864 to 
 1867 the wool duties were greatly increased. 
 In 1872 tea and coffee were put on the free list. 
 In the same year the duties on many manufac- 
 tured articles were reduced by 10 per cent, but 
 
Ub THE TARIFF. 
 
 in 1874 the old rates were restored. In 1882 
 there was a general demand for lower duties, 
 and a Tariff Commission of ardent protectionists 
 was appointed to study the question and report 
 a bill that would satisfy the people without 
 really giving up anything. But when the com- 
 mission had looked into the matter it proposed 
 greater reductions than the Republican Congress 
 had any idea of allowing. So a bill was patched 
 up, making some very slight reductions, and in 
 some cases increasing the taxes. For instance, 
 the duty on works of art was raised from 10 
 to 30 per cent against the protests of all the ar- 
 tists in the country, and a conference commit- 
 tee fixed the tax on iron ore at 75 cents per 
 ton to please Senator Mahone of Virginia, after 
 both Houses had voted to make it 50 cents. 
 
 Nobody was satisfied with this tariff, and the 
 agitation for a real reform continued. Bills 
 bringing the taxes nearer to a peace-footing, 
 although still leaving them higher than the old 
 protectionists, from Hamilton to Clay, would 
 have put them, were proposed by Morrison and 
 Mills, but failed to become laws. At last, in 
 1890, the protectionists took advantage of their 
 control of Congress and the Presidency to pass 
 the highest tariff in American history the Me 
 Kinley bill, which deserves a chapter to itself. 
 
CHAPTER XVII. 
 THE M'KINLEY BILL PART FIRST. 
 
 The McKinley law is the highest form of pro- 
 tection yet tried in this country. It must be 
 carefully studied to be well understood, for it 
 does not carry its full meaning on its face. It 
 is full of little tricks and surprises. One of the 
 tools it finds most useful is the change from 
 "ad valorem" to "specific" duties that is, 
 from duties figured by the dollar's worth to 
 those figured by the pound, yard or barrel. 
 When Congress lays a tax of 40 per cent on 
 any article we know that we must pay 40 cents 
 on the dollar's worth of goods, whether they be 
 dear or cheap. Such a tax is less on the coarse 
 things used by the poor than it is on the fine 
 things used by the rich, and if people learn to 
 make things more cheaply than before, so that 
 the prices go down, the tax goes down too. 
 But when Congress says that a certain kind of 
 cloth shall pay 40 cents per square yard, the 
 tax is the same whether the quality be fine or 
 coarse. On cloth worth a dollar a yard the tax 
 would be 40 per cent, just as in the other case, 
 but if the price abroad went down to 40 cents it 
 would be 100 per cent, while on cloth worth $2 
 it would be only 20 per cent. 
 
 Another favorite trick of the McKinley bill is 
 to leave out certain articles altogether, so that 
 
 97 
 
98 THE TARIFF. 
 
 they will be taxed higher than before under 
 some general heading. Another is to reduce 
 the rates on things of which we buy very little 
 and raise them on things of which we buy 
 a great deal. This was probably borrowed from 
 contractors, who, when they make bids for fur- 
 nishing public supplies, often make the average 
 of their bids seem low by offering mustard and 
 pepper at prices far below the market rates 
 while they charge extra prices for beef and 
 flour. 
 
 The McKinley law contains 472 paragraphs, 
 beside the free list and the general provisions. 
 It raises duties directly in 233 cases and reduces 
 them in 219. In addition it changes the taxes 
 from ad valorem to specific in 186 cases, and the 
 worst impositions of the whole bill are found in 
 these changes, which almost always mean large 
 increases. 
 
 The first schedule deals with chemicals, oils 
 and paints. We find that Mr. McKinley has 
 reduced the taxes on acetic acid, tannic acid, 
 sulphate of copper, refined camphor and various 
 other things of which we hardly import any 
 from one year to another. On almost all the 
 important items he has either left the war 
 duties as they were or has increased them. For 
 instance, he has put a tax of one-fourth of a 
 cent a pound on sulphuric acid, which was free 
 before. This acid is used by thousands of 
 tons in making commercial fertilizers for 
 farmers; it is made very cheaply, and the least 
 increase in its price means a heavy addition to 
 the cost of raising crops by such means. When 
 
THE M'KINLEY BILL PART FIRST. 99 
 
 the importance of this item to farmers was 
 pointed out, Mr. McKinley inserted an amend- 
 ment putting on the free list certain low grades 
 of sulphuric acid, avowedly for use in the manu- 
 facture of fertilizers, but which experts say are 
 of no value at all for that purpose. 
 
 A cent a pound has been added to the duty on 
 commercial boracic acid, for the benefit of the 
 Borax Trust, which is able to sell borax all 
 over the world cheaper than it can be furnished 
 by anybody else. There is a large increase in 
 the tax on linseed oil, by which another trust 
 is helped at the expense of everybody that uses 
 paint or putty. The duties on all lead products 
 are left as high as before, and on one of them 
 orange mineral are increased. All of. these 
 things are controlled by one of the most power- 
 ful trusts in the country. The owner of one of 
 the factories in the Lead Trust said that he 
 could furnish another plant exactly like his for 
 $200,000, In the trust that factory is valued 
 at $1,000,000 and dividends on that amount 
 are paid by increasing the price of the product. 
 
 These are only samples of the chemical 
 duties, almost every one of which conceals a 
 job for the benefit of some firm or combination. 
 The cost of the labor employed in making these 
 articles usually ranges from 8 to 12 per cent. 
 The taxes go from 10 to 1,000 per cent. 
 
 Passing to the next section, e ' earths, earthen- 
 ware and glassware," we find that out of thirty- 
 five changes in the old rates there is only one 
 single reduction. That is a cut in the duty on 
 millstones from 20 to 15 per cent. Anj 
 
100 THE TARIFF. 
 
 who finds the regular use of millstones neces- 
 sary to his comfort may get some benefit from 
 this part of the McKinley bill. The taxes are 
 raised on firebrick, cement, lime, plaster, small 
 glass bottles, pressed and cut glassware, lamp 
 chimneys, porcelain and opal glassware, large 
 window glass, small looking-glass plates, spec- 
 tacles, eyeglasses and almost everything else un- 
 der this heading. Imported Portland cement is 
 often required by architects for the sake of 
 safety. Under the McKinley bill contractors must 
 either pay heavy fines for using it or they must 
 get along with a cheaper and more dangerous 
 article bought at home. The new tax on lime 
 is for the benefit of a trust in Maine that con- 
 trols the entire American supply. On common 
 lamp-chimneys, opal glassware, etc., on which 
 the duties used to be 40 and 45 per cent, Mr. 
 McKinley first fixed taxes of 200 to 400 per 
 cent, but after his bill had been discussed in the 
 Senate for some months he agreed to let them 
 go at 60. But as people who buy foreign glass- 
 ware under the new law get no allowance for 
 things that are broken on the way, the duties 
 really amount to at least 75 per cent. 
 
 One of the leading manufacturers of Pitts- 
 burg, making over a hundred different kinds of 
 glassware, explained that he would not need a 
 particle of protection in his business if he could 
 get his raw materials free. He said that he 
 would be willing to take free trade all around 
 and pay higher wages than before. Labor, he 
 declared, cost him less than European manufac- 
 turers had to pay, because it was so efficient 
 
THE M'KINLEY BILL PART FIRST. 101 
 
 and so well organized. In his mill each branch 
 of the trade was carried on by somebody especi- 
 ally fitted for it. Cheap boys did cheap work, 
 and high-class work was done by highly paid 
 men. In Germany a skilled laborer earning 
 about half as much as an American skilled 
 laborer wastes part of his time in doing boys' 
 work, and so is more expensive to his employer 
 than the American workman. 
 
 The next schedule of the McKinley bill, deal- 
 ing with metals, is very artfully drawn. It 
 makes a number of reductions. For instance, 
 the rate on steel rails is cut down from $17 to 
 $13.44 per ton ; that on heavy forgings for ves- 
 sels and engines from $44.80 to $40.32, and that 
 on iron and steel axles from $56 to $44.80. But 
 these reductions were carefully arranged so as 
 not to cut into the prices of the home manufac- 
 turers. American prices of steel rails usually 
 run about $10 a ton higher than English prices. 
 That almost covers the entire cost of all the 
 labor used in the manufacture, from the time 
 the miners begin to dig out the coal and iron ore 
 until the finished rails are turned out of the roll- 
 ing mill. The difference in cost between Eng- 
 lish and American labor in many establishments 
 is not over 25 cents a ton. The new duty of 
 813.44 a ton allows the manufacturers to charge 
 just as much as they could get without killing 
 their market, even if the tax were doubled. 
 
 These reductions, that count for so little, have 
 been made to cover a number of increases that 
 count for a good deal. One of them is that on 
 tin plates, from 1 cent to 2.2 cents per pound. 
 
102 THE TARIFF. 
 
 We import about 700,000,000 or 800,000,000 
 pounds of tin plate a year, and the tax at the 
 new rate will amount to $15,000,000 or $20,- 
 000,000. If we keep on importing, this money 
 will go into the Treasury, which may not be so 
 very bad. But if the Welsh makers are induced 
 to move their factories over here it will go into 
 their pockets. It is said that if we made all 
 our tin plates in this country 30,000 men would 
 be employed in the work. Twenty million dol- 
 lars a year in new taxes would support more 
 than that number of men in idleness and leave 
 us the money we have formerly spent for our 
 tin plates besides. 
 
 The Southern planter raises cotton and sells 
 it at free-trade prices. There is no duty on it. 
 But the cotton has to be baled with iron ties, 
 and the McKinley bill has about doubled the 
 taxes on those. The duties on cheap pocket- 
 knives have been raised in some cases to 150 
 per cent. Cheap shotguns, such as farmers' 
 boys use to shoot squirrels, have been taxed 
 at about twice or three times the former rates. 
 Aluminium used to be free. Now that cheap 
 methods of producing it are being discovered 
 and it seems likely to come into general use, Mr. 
 McKinley makes it pay a duty of 15 cents a 
 pound. Silver ore is taxed a cent and a half a 
 pound on the lead it contains. This has already 
 ruined a large part of our Mexican trade, built 
 up several large smelters in Mexico and greatly 
 damaged American smelters employing thou- 
 sands of men. 
 
PART FIRST. 103 
 
 The changes in the wood schedule are few 
 and not important. 
 
 When we come to sugar we find the only 
 really great reduction of taxes in the entire bill. 
 Raw sugar is put on the free list and refined 
 sugar is taxed at half a cent a pound. The 
 Sugar Trust buys raw sugar and refines it at a 
 cost about equal to the duty. Thus, even if for- 
 eign refiners did not have to pay a cent for 
 labor, fuel or any other working expenses, the 
 tax would be enough to keep them out of the 
 American market. Under the old tariff we im- 
 ported in 1890 2,606,996,509 pounds of raw 
 sugar and raised 371,378,560 pounds at home. 
 The Government collected over $55,000,000 in 
 duties, and the growers received $6,000,000 or 
 $7,000,000 in increased prices. Thus nine- 
 tenths of all the sugar taxes collected from 
 the people went into the public treasury. The 
 new law cuts off all the Government's income 
 from that source and nearly doubles the amount 
 to be paid to private parties. It provides for 
 a bounty of two cents a pound on all the sugar 
 produced in the country, including maple su- 
 gar, which is made by simply boring holes in 
 trees and boiling down the sap, and this bounty, 
 which amounts to about $10,000,000 this year, 
 must be raised by other taxes. One man in 
 Louisiana has received a check for about $200,- 
 000 of it. If we should raise all the sugar 
 we used the bounty would amount to over 
 $70,000,000 a year. 
 
CHAPTER XVIII. 
 THE M'KINLEY BILL PART SECOND. 
 
 Next, the McKinley bill deals with tobacco. 
 It raises the duties on leaf tobacco suitable for 
 cigar wrappers from 75 cents and $1 to $2 and 
 $2.75 a pound. The reason for this is that there 
 is a peculiar kind of leaf grown in Sumatra so 
 convenient for wrapping cigars that it seems 
 almost to have been created for that purpose. 
 It is thin, tough and flexible and can be handled 
 as easily as paper. When cigar makers, especi- 
 ally in San Francisco, could get this material 
 they had no use for the stuff raised in Connecti- 
 cut ; so Mr. McKinley provided that if they did 
 not patronize the Connecticut growers, and pay 
 the railroads for bringing the inferior wrappers 
 across the continent, they should be fined three 
 times the former rates for buying in Sumatra. 
 Moreover, if a bale of common tobacco, dutiable 
 at 35 to 50 cents a pound, should happen to con- 
 tain a single leaf that might be used for a wrap- 
 per, the entire bale is to be taxed at $2 a pound 
 if unstemmed or $2.75 if stemmed. This was 
 aimed particularly at the Sumatra wrappers, 
 but it hit cigar makers everywhere, especially 
 those of Key West, who live almost within sight 
 of Havana, and who would as soon think of get- 
 ting pineapples from Minnesota as of sending 
 to Connecticut for their tobacco. The injustice 
 
 104 
 
THE M'KINLEY BILL PART SECOND. 105 
 
 of this provision was so glaring that the General 
 Appraisers have taken the responsibility of nul- 
 lifying the law. 
 
 The next schedule, "Agricultural Products 
 and Provisions," was meant to show the farm- 
 ers that there was something in the new tariff 
 for them. The duties on almost all farm prod- 
 ucts are increased. In most cases this has no 
 effect at all, since the things taxed are not im- 
 ported and never have been. But where the 
 new duties are felt the farmers usually suffer 
 by them. For instance, horses and mules, 
 which used to pay 20 per cent, are now taxed 
 30 per cent if they are worth over $150, and 
 $30 per head if they are worth less. The stock- 
 raisers along the Mexican border have found it 
 very convenient in the past to be able to supply 
 themselves with Mexican mustangs costing only 
 $10 or SI 5 apiece. On a $10 horse the old duty 
 would have been only $2. The McKinley tax of 
 $30 is 300 per cent, and it has completely broken 
 up the business of the American farmers and 
 stockmen, who have found it more profitable to 
 use cheap Mexican mustangs than to go to the 
 trouble of raising horses for themselves. Mr. 
 McKinley has also raised the duty on cattle 
 from 20 per cent to $10 per head. This has de- 
 stroyed the trade of the Chicago packers who 
 used to buy Mexican cattle, ship the meat to 
 England and send American goods to Mexico, 
 but it has not helped the American cattle men. 
 The Chicago packers have simply moved to Mex- 
 ico, where the government allows them to im 
 port their supplies free of duty, and they ship 
 
106 THE TARIFF. 
 
 their canned meat from there direct to England 
 where it cuts under the taxed American meat. 
 The duties on wheat, flour, corn, cornmeal, oats 
 and rye have been raised, but as we do not im- 
 port any of those things the prices are not af- 
 fected. Mr. McKinley might just as well have 
 made the rates 1,000 percent if that would have 
 been any satisfaction to the American farmer. 
 Nobody would have had to pay a cent more for 
 wheat or corn in consequence. 
 
 But there is one item in which the new tariff 
 does affect trade, and it is worth while to see 
 how it works. The United States both buys 
 and sells barley, but it is one part of the coun- 
 try that buys and another part that sells. Al- 
 most all the barley we import comes into the 
 State of New York across the Canadian border, 
 and is used in the large brewing and milling 
 establishments in that immediate neighborhood. 
 Almost all we export goes out of the port of San 
 Francisco and is sent to Great Britain. Now, 
 the McKinley bill raises the duty on barley from 
 10 to 30 cents per bushel, and the effect is this : 
 The Canadians have lost the greater part of the 
 local market in New York, and so they must 
 ship to England. There they compete directly 
 with the Californian barley, which has to sail 
 five times as far to get to market. We must 
 either meet them there or we must stop ship- 
 ping to England and send our barley across the 
 continent to Oswego, paying the railroad com- 
 panies enough for freights to eat up all the 
 profits on the sales. The old way was convenient 
 for everybody ; the new way puts all concerned 
 
THE M'KINLEY BILL PART SECOND. 107 
 
 to the greatest possible amount of trouble and 
 loss. 
 
 The duties on spirits and on some kinds of 
 wines are increased by the McKinley bill, and 
 to this of course there can be no objection. 
 
 The taxes on many kinds of cotton manufac- 
 tures are enormously increased in spite of the 
 fact that raw cotton is on the free list and that 
 the manufacturers have been steadily prosper- 
 ous. Ever since the passage of the bill the own- 
 ers of the New England cotton mills have been 
 trying to cut down wages. These wages were 
 already lower in some cases by the hour than in 
 England and very much lower by the piece. On 
 cheap cotton shirts worth $1.50 a dozen the new 
 taxes are $1 a dozen and 35 per cent, or 101.66 
 per cent in all. The women who make these 
 things work in sweaters' shops in New York for 
 a few cents a dozen. 
 
 Mr. McKinley's hemp, jute and flax schedule 
 is a queer mixture of good and bad. It puts 
 raw jute, manila and similar fibers on the free 
 list, but it leaves bags and burlaps highly taxed, 
 so that the farmers get no benefit from the re- 
 moval of the taxes on the raw material. 
 It reduces the duties on cables and cordage, but 
 it raises the rates on most manufactures of 
 hemp and flax from 35 to 50 and 60 per cent, 
 and even more. 
 
 But it is when we come to wool that the new 
 tariff does its best work. The wool schedules 
 show very greatly increased taxes on their face, 
 and they are full of little tricks to make the 
 
108 THE TARIFF. 
 
 rates still higher. For instance, one section of 
 the old tariff ran thus : 
 
 " Class two, combing wools That is to say, 
 Leicester, Cotswold, Lincolnshire, Down comb- 
 ing wools, Canada long wools, or other like 
 combing wools of English blood and usually 
 known by the terms herein used, and also all 
 hair of the alpaca, goat and other like animals." 
 
 It was held that common goats' hair, not fit 
 for combing, did not come in this class, and so 
 it was admitted free. The McKinley bill has 
 changed the section to read thus : 
 
 "Class two, that is to say, Leicester, Cots- 
 wold, Lincolnshire, Down combing wools, Can- 
 ada long wools, or other like combing wools of 
 English blood and usually known by the terms 
 herein used, and also hair of the camel, goat 
 alpaca, and other like animals." 
 
 Nobody noticed anything out of the way in 
 this when it was before Congress, except, of 
 course, that it took camel's hair off the free list, 
 but after the bill had become law it was found 
 that by dropping the general heading "Comb- 
 ing wools," common goats' hair had become 
 subject to a tax amounting to about 300 per 
 cent. 
 
 Another trick is the change in the definitions 
 of " washed" and " scoured" wool, by which 
 some of the duties were quietly doubled. Under 
 the old tariff washed wools were those washed 
 in clear water at about 70 degrees and then 
 rinsed in water of the same kind, while scoured 
 wools were cleaned with soap, alkalies and hot 
 water usually by machinery. Under the Me- 
 
THE M'KINLEY BILL PART SECOND. 109 
 
 Kinley bill washed wools are merely those that 
 have been washed with water on the sheep's 
 back. Wool washed in any other way than on 
 the sheep's back is called scoured wool and 
 taxed a three times as much as wool imported 
 dirty. 
 
 Still another trick is the "sorting clause." 
 The new tariff provides that wool which has 
 been "sorted or increased in value by the rejec- 
 tion of any part of the original fleece" shall be 
 taxed at twice the ordinary rate. This means 
 that if the packer happens to see a burr in a 
 fleece and picks it out, along with a little of the 
 wool, the entire bale in which that fleece is 
 packed shall pay double taxes 22 or 24 cents a 
 pound instead of 11 or 12 cents. 
 
 In spite of all these traps for the importers we 
 have bought more foreign wool since the Mc- 
 Kinley bill was passed than we did before. Our 
 manufacturers must have it to mix in their bet- 
 ter grades of goods, and they have made up for 
 the higher cost by paying less for their Ameri- 
 can wool, which has no other market. They 
 have been able, too, to charge what they pleased 
 for their goods, for the taxes on woolen manu- 
 factures have been piled up, tax on tax, until it 
 is as much as an American citizen's life is worth 
 to buy a suit of clothes abroad, unless he is rich 
 enough to go to Europe and fill his trunks with 
 "personal effects." On a worsted shawl worth 
 41 cents a pound the old duty would have 
 amounted to 32.25 cents a pound, or 78.9 per 
 cent. Under the McKinley bill it has to pay 
 64.5 cents a pound, or 157.31 per cent. The 
 
110 THE TARIFF. 
 
 taxes on ready-made clothing have oeen about 
 doubled. Cheap ingrain carpets pay more than 
 their entire cost at the factory. 
 
 Mr. McKinley has made a general increase in 
 the duties on silk goods, while leaving the raw 
 material free. This might be thought to con- 
 cern nobody but the rich, if it were not that 
 every working girl likes to decorate herself with 
 bits of silk ribbon, and that silk linings for 
 capes, velvet collars and silk dresses for parties 
 are not beyond the ambition of poor men's fam- 
 ilies. The rich can easily pay the extra tax ; 
 the poor must give up their little luxuries if the 
 price rises too high. Besides, the American 
 silk mills were doing very well indeed before 
 the tariff was changed, and had no need for 
 more protection. 
 
 Under the head of pulp, papers and books, 
 there are several little items that help to wor- 
 ry American buyers. Even the babies in this 
 country take photographs now, and everybody 
 that presses the button knows that the best 
 sensitized paper comes from Germany. Un- 
 der the old tariff this paid a duty of 25 per 
 cent. Mr. McKinley tells American photogra- 
 phers that they must pay 35 per cent or use 
 a poorer quality of paper made in this coun- 
 try. The old tariff taxed playing cards at 100 
 per cent. The McKinley tax is fifty cents a 
 pack. This amounts to only 25 or 50 per cent 
 on the fine cards that might be imported by 
 a millionaires' club, but it is about 500 per 
 cent on the cheap pasteboards with which a 
 poor family passes away the winter evening. 
 
THE M'KINLEY BILL PART SECOND. Ill 
 
 Then all the odds and ends of paper goods 
 slate books, music paper, covers for candy 
 boxes, embossed paper, paper bags, lace pa- 
 per, asbestos paper, emery paper, paper filters, 
 solar printing paper, and such things, which 
 used to pay 15 per cent, now pay 25. 
 
 Under "Sundries" the McKinley bill has in- 
 creased a number of taxes and reduced a few. 
 Every sewing woman in the United States 
 feels the raise in the duty on pearl buttons 
 from 25 to 200 or 300 per cent. The cheapest 
 ladies' and children's kid gloves, such as work- 
 ing girls wear, must pay $3.25 per dozen, or 
 over 100 per cent on the foreign wholesale 
 price. Fur hats, which used to be let off with 
 30 per cent, are now taxed at 55 per cent. The 
 duties on works of art are reduced from 30 
 to 15 per cent, and this is one of the few good 
 points of the bill. 
 
 It must not be supposed that Mr. McKinley 
 raises taxes all the time. He may make it 
 harder to buy woolen and cotton clothes, tin- 
 ware, paper and crockery, but he lets us get 
 unstrung glass beads at 10 per cent, instead of 
 50. The duty on cleaned human hair is re- 
 duced from 30 to 20 per cent, and that on col- 
 ored feathers from 25 to 10. 
 
 The free list shows this liberality still more 
 clearly. The McKinley bill removes the taxes 
 from all the following important necessaries 
 of life : Unground acorns, wild animals for 
 exhibition, art educational stops, beeswax, books 
 and pamphlets in foreign languages, books and 
 music for the blind, alizarine, crude opium, 
 
112 THE TARIFF. 
 
 sour orange juice, several salts of potash, dan- 
 delion root, chlorate of soda, unground chicory 
 root, common blue clay, engravers' diamonds, 
 watch jewels, uncleaned human hair, currants, 
 dates, hat material of straw and other vegetable 
 fiber, india rubber scraps, hand-sewing and 
 darning needles, forged shot-gun barrels, straw 
 matting, nut oil, olive oil for mechanical pur- 
 poses, nickel ore, sulphur ore, bulbs and bulb- 
 ous roots not edible, orchids, lily of the valley 
 and other hothouse plants, raw sugar, molasses, 
 coal and wood tar, jute, jute butts, manila, sisal 
 grass, sunn and other grasses, tinsel wire, to- 
 bacco stems, spirits of turpentine, briar root and 
 briar wood cut into blocks. All we have to do 
 to escape taxation is to live on sugar, currants, 
 dates and crude opium, ride on wild animals, 
 confine our reading to foreign languages, build 
 our houses of blue clay and make our clothes of 
 uncleaned human hair. 2 ' 
 
14 DAY USE 
 
 RETURN TO DESK FROM WHICH BORROWED 
 
 LOAN DEPT. 
 
 This book is due on the last date stamped below, or 
 
 on the date to which renewed. 
 Renewed books are subject to immediate recall. 
 
 t2)o'60r>B 
 
 
 
 
 ftec-c. 
 
 Mftp 9 4 2001 
 
 Ju "i3m 
 
 
 I8Mr'63MF 
 
 
 REC'D LD 
 
 
 MAR1819K 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 LD 21A-50m-4,'60 
 (A9562slO)476B 
 
 General Library 
 
 Uuirersity of California 
 
 Berkeley 
 
YC 15379 
 
 THE UNIVERSITY OF CALIFORNIA LIBRARY