Volume IV Part 8 (2/2)
Thirdly, that the American system is beneficial to all parts of the Union, and absolutely necessary to much the larger portion.
Fourthly, that the price of the great staple of cotton, and of all our chief productions of agriculture, has been sustained and upheld, and a decline averted, by the protective system.
Fifthly, that if the foreign demand for cotton has been at all diminished, the diminution has been more than compensated in the additional demand created at home.
Sixthly, that the constant tendency of the system, by creating compet.i.tion among ourselves, and between American and European industry, reciprocally acting upon each other, is to reduce prices of manufactured objects.
Seventhly, that, in point of fact, objects within the scope of the policy of protection have greatly fallen in price.
Eighthly, that if, in a season of peace, these benefits are experienced, in a season of war, when the foreign supply might be cut off, they would be much more extensively felt.
Ninthly, and finally, that the subst.i.tution of the British colonial system for the American system, without benefiting any section of the Union, by subjecting us to a foreign legislation, regulated by foreign interests, would lead to the prostration of our manufactories, general impoverishment, and ultimate ruin. * * * The danger of our Union does not lie on the side of persistence in the American system, but on that of its abandonment. If, as I have supposed and believe, the inhabitants of all north and east of James River, and all west of the mountains, including Louisiana, are deeply interested in the preservation of that system, would they be reconciled to its overthrow? Can it be expected that two thirds, if not three fourths, of the people of the United States would consent to the destruction of a policy, believed to be indispensably necessary to their prosperity? When, too, the sacrifice is made at the instance of a single interest, which they verily believe will not be promoted by it? In estimating the degree of peril which may be incident to two opposite courses of human policy, the statesman would be short-sighted who should content himself with viewing only the evils, real or imaginary, which belong to that course which is in practical operation. He should lift himself up to the contemplation of those greater and more certain dangers which might inevitably attend the adoption of the alternative course. What would be the condition of this Union, if Pennsylvania and New York, those mammoth members of our Confederacy, were firmly persuaded that their industry was paralyzed, and their prosperity blighted, by the enforcement of the British colonial system, under the delusive name of free trade? They are now tranquil and happy and contented, conscious of their welfare, and feeling a salutary and rapid circulation of the products of home manufactures and home industry, throughout all their great arteries.
But let that be checked, let them feel that a foreign system is to predominate, and the sources of their subsistence and comfort dried up; let New England and the West, and the Middle States, all feel that they too are the victims of a mistaken policy, and let these vast portions of our country despair of any favorable change, and then indeed might we tremble for the continuance and safety of this Union!
And need I remind you, sir, that this dereliction of the duty of protecting our domestic industry, and abandonment of it to the fate of foreign legislation, would be directly at war with leading considerations which prompted the adoption of the present Const.i.tution?
The States respectively surrendered to the general government the whole power of laying imposts on foreign goods. They stripped themselves of all power to protect their own manufactures by the most efficacious means of encouragement--the imposition of duties on rival foreign fabrics. Did they create that great trust, did they voluntarily subject themselves to this self-restriction, that the power should remain in the Federal government inactive, unexecuted, and lifeless? Mr. Madison, at the commencement of the government, told you otherwise. In discussing at that early period this very subject, he declared that a failure to exercise this power would be a ”fraud” upon the Northern States, to which may now be added the Middle and Western States.
[Governor Miller asked to what expression of Mr. Madison's opinion Mr.
Clay referred; and Mr. Clay replied, his opinion, expressed in the House of Representatives in 1789, as reported in Lloyd's Congressional Debates.]
Gentlemen are greatly deceived as to the hold which this system has in the affections of the people of the United States. They represent that it is the policy of New England, and that she is most benefited by it.
If there be any part of this Union which has been most steady, most unanimous, and most determined in its support, it is Pennsylvania. Why is not that powerful State attacked? Why pa.s.s her over, and aim the blow at New England? New England came reluctantly into the policy. In 1824, a majority of her delegation was opposed to it. From the largest State of New England there was but a solitary vote in favor of the bill. That interesting people can readily accommodate their industry to any policy, provided it be settled. They supposed this was fixed, and they submitted to the decrees of government. And the progress of public opinion has kept pace with the developments of the benefits of the system. Now, all New England, at least in this House (with the exception of one small still voice), is in favor of the system. In 1824, all Maryland was against it; now the majority is for it. Then, Louisiana, with one exception, was opposed to it; now, without any exception, she is in favor of it. The march of public sentiment is to the South. Virginia will be the next convert; and in less than seven years, if there be no obstacles from political causes, or prejudices industriously instilled, the majority of Eastern Virginia will be, as the majority of Western Virginia now is, in favor of the American system. North Carolina will follow later, but not less certainly. Eastern Tennessee is now in favor of the system. And, finally, its doctrines will pervade the whole Union, and the wonder will be, that they ever should have been opposed.
FRANK H. HURD,
OF OHIO. (BORN 1841, DIED 1896.)
A TARIFF FOR REVENUE ONLY;
HOUSE OF REPRESENTATIVES, FEBRUARY 18, 1881.
MR. CHAIRMAN:
At the very threshold it is proper to define the terms I shall use and state the exact propositions I purpose to maintain. A tariff is a tax upon imported goods. Like other taxes which are levied, it should be imposed only to raise revenue for the government. It is true that incidental protection to some industries will occur when the duty is placed upon articles which may enter into compet.i.tion with those of domestic manufacture. I do not propose to discuss now how this incidental protection shall be distributed. This will be a subsequent consideration when the preliminary question has been settled as to what shall be the nature of the tariff itself. The present tariff imposes duties upon nearly four thousand articles, and was levied and is defended upon the ground that American industries should be protected.
Thus protection has been made the object; revenue the incident. Indeed, in many cases the duty is so high that no revenue whatever is raised for the government, and in nearly all so high that much less revenue is collected than might be realized. So true is this that, if the present tariff were changed so as to make it thereby a revenue tariff, one fifth at least could be added to the receipts of the Treasury from imports.
Whenever I use the phrase free trade or free trader, I mean either a tariff for revenue only or one who advocates it.
So far as a tariff for revenue is concerned, I do not oppose it, even though it may contain some objectionable incidental protection. The necessities of the government require large revenues, and it is not proposed to interfere with a tariff so long as it is levied to produce them; but, to a tariff levied for protection in itself and for its own sake, I do object. I therefore oppose the present tariff, and the whole doctrine by which it is attempted to be justified. I make war against all its protective features, and insist that the laws which contain them shall be amended, so that out of the importations upon which the duty is levied the greatest possible revenue for the government may be obtained.
What, then, is the theory of protection? It is based upon the idea that foreign produce imported into this country will enter into compet.i.tion with domestic products and undersell them in the home market, thus crippling if not destroying domestic production. To prevent this, the price of the foreign goods in the home market is increased so as to keep them out of the country altogether, or to place the foreigner, in the cost of production, upon the same footing as the American producer. This is proposed to be done by levying a duty upon the foreign importation.
If it be so high that the importer cannot pay it and sell the goods at a profit, the facilities of production between this and other countries are said to be equalized, and the American producer is said to be protected. It will be seen, therefore, that protection means the increase of price. Without it the fabric has no foundation on which to rest. If the foreign goods are still imported, the importer adds the duty paid to the selling price. If he cannot import with profit, the American producer raises his price to a point always below that at which the foreign goods could be profitably brought into the country, and controls the market. In either event, there is an increase of price of the products sought to be protected. The bald proposition therefore is that American industries can and ought to be protected by increasing the prices of the products of such industries.
There are three popular opinions, industriously cultivated and strengthened by adroit advocates, upon which the whole system rests, and to which appeals are ever confidently made. These opinions are erroneous, and lead to false conclusions, and should be first considered in every discussion of this question.
The first is, that the balance of trade is in our favor when our exportations exceed our importations. Upon this theory it is argued that it cannot be unwise to put restrictions upon importations, for they say that at one and the same time you give protection to our industries and keep the balance of trade in our favor. But the slightest investigation will show that this proposition cannot be maintained. A single ill.u.s.tration, often repeated, but never old in this discussion, will demonstrate it. Let a s.h.i.+p set sail from Portland, Maine, with a cargo of staves registered at the port of departure as worth $5,000. They are carried to the West India Islands, where staves are in demand, and exchanged for sugar or mola.s.ses. The s.h.i.+p returns, and after duty paid the owner sells his sugar and mola.s.ses at a profit of $5,000. Here more has been imported than exported. Upon this transaction the protectionist would say that the balance of trade was against us $5,000; the free trader says that the sum represents the profit to the s.h.i.+pper upon his traffic, and the true balance in our favor.
Suppose that after it has set sail the vessel with its cargo had been lost. In such case five thousand dollars' worth of goods would have been exported, with no importation against it. The exportation has exceeded the importation that sum. Is not the balance of trade, according to the protection theory, to that amount in our favor? Then let the protectionist turn pirate and scuttle and sink all the vessels laden with our exports, and soon the balance of trade in our favor will be large enough to satisfy even most advocates of the American protective system. The true theory is that in commerce the overplus of the importation above the exportation represents the profit accruing to the country. This overplus, deducting the expenses, is real wealth added to the land. Push the two theories to their last position and the true one will be clearly seen. Export every thing, import nothing, though the balance of trade may be said to be overwhelmingly in our favor, there is poverty, scarcity, death. Import every thing, export nothing, we then will have in addition to our own all the wealth of the world in our possession.
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