The advantages of a protective tariff to the labor and industries of the United States / by Crawford D. Hening.

Digitized by the Internet Archive in 2007 with funding from IVIicrosoft Corporation http://www.archive.org/details/advantagesofprotOOhenirich o ^JLK'*-^'^^ U^s o^ U HP 1713 h / Number 13. jfirst pvlic jessa?, 1887. THE ADVANTAGES OF A PROTECTIVE TARIFF TO THE LABOR AND INDUSTRIES OF THE UNITED STATES. BY CRAWFORD D. HENING OF THE UNIVERSITY OF PENNSYLVANIA, CLASS OF '87. The American Protective Tariff League 23 West Twenty-third Street NEW YORK PROPOSAL FOR 1887. New York, December, 1886. The American Protective Tariff League offers to the Stu- dents of Senior Classes of Colleges and Universities in the United States, a series of prizes for approved Essays on The Advantages of a Protective Tariff to the Labor and Industries of the United States. Competing Essays not to exceed ten thousand words, signed by some other than the writer's name, and to be sent to the office of The League, No. 23 West Twenty-third Street, New York City, on or before May i, 1887, accompanied by the name and address of the writer, and of the College to which he belongs, in a separate sealed envelope (not to be opened until the successful Essays have been determined), marked by a word or symbol corresponding with the signature to the Essay. Awards will be made June 15, 1887, as follows : For the Best Essay - - - Two Hundred and Fifty Dollars. For the Second Best - One Hundred Dollars. For the Third Best - - - Fifty Dollars. And for other Essays deemed especially meritorious. Silver Medals, of original and approved design, will be awarded, with honorable mention of the authors in a public notice of the awards. The League reserves the right to publish, at its own expense, any of the Essays for which prizes are awarded, and will print the Essay receiv- ing the first prize among its annual publications. The following gentlemen have consented to serve as Judges : Ex-Gov. HENRY M. HOYT, Pennsylvania. Hon. GEORGE H. ELY, Ohio. Prof. VAN BUREN DENSLOW, New York. ROBERT P. PORTER, District of Columbia. A. M. GARLAND, Illinois. If any further information is desired, please address, Yours respectfully, EDWARD H. AMMIDOWN, President. THE ADVANTAGES OF A PROTECTIVE TARIFF TO THE LABOR AND INDUSTRIES OF THE UNITED STATES. The American Protective System may be advocated on divers grounds — economic, political, ethical. The subject of this Essay, however, refers especially to economic considerations, calling for a defense of the Protective Tariff on the ground of its J, «. v/» ctvijivu TruiKiucu, ine comparatively high rates of interest and wages — so formidable that finally they became insuperable. With her organized industrial system she was ever ready to swamp our young manufactures with floods of cheaper goods, as she did in i784t and in 1815. J In 1784 all Americans were practically camprised in two great classes— farmers and merchants or sailors.§ So unduly was agriculture developed that in 1820, notwithstanding the protection to manufactures accorded by two wars, there were five persons engaged in agriculture to one in manufactures.! [The tariff has changed that ratio until it is now only two to one.\] There was, thus, a century ago, no prospect of a symmetrical development of our industries, and our future industrial history seemed likely to be that of an agricul- tural nation. Such being the trend of our industrial development, what would be the effect on the wealth of the nation ? The answer is manifest. The exclusive prosecution of agriculture and commerce— the development of two groups of industries instead of three — will be profitable so long as, and no longer than, all that large agricultural sur- plus produced by the application of all the labor and capital to the land will exchange * Bolles' Industrial History of the United States, p. 195. + D. H. Mason's Short Tariff History of the United States, chap, i., t Matthew Carey's New Olive Branch, 1821. § Bancroft's History of the Constitution, vol. i., p. 439. H Fourth Census in McGregor's Commercial Statistics, vol. iii., p. 31 1 Compendium of the Tenth Census, pp. 1368 and 1372. PROPOSAL FOR 1887. New York, December, 1886. The American Protective Tariff League offers to the Stu- dents of Senior Classes of Colleges and Universities in the United States, a series of prizes for approved Essays on The Advantages of a Protective Tariff to the Labor and Industries of the United States. Competing Essays not to exceed ten thousand words, signed by some other than the writer's name, and to be sent to the office of The League, No. 23 West Twenty-third Street, New York City, on or before May i, 1887, accompanied by the name and address of the writer, and of the With Compliments of The American Protective Tariff League, 23 West 23d Street, New York. L EDWARD H. AMMlDOW^ A. M. GARLAND, A. G. Sec'y. ^^^ 1 JrlC. iji^AOUU- icscivca Lut- ii^i the Essays for which prizes are awarded, and will print the Essay receiv- ing the first prize among its annual publications. The following gentlemen have consented to serve as Judges : Ex-Gov. HENRY M. HOYT, Pennsylvania. Hon. GEORGE H. ELY, Ohio. Prof. VAN BUREN DENSLOW, New York. ROBERT P. PORTER, District of Columbia. A. M. GARLAND, Illinois. If any further information is desired, please address, Yours respectfully, EDWARD H. AMMIDOWN, /'resii/e/iL THE ADVANTAGES OF A PROTECTIVE TARIFF TO THE LABOR AND INDUSTRIES OF THE UNITED STATES. The American Protective System may be advocated on divers grounds — economic, political, ethical. The subject of this Essay, however, refers especially to economic considerations, calling for a defense of the Protective Tariff on the ground of its advantages to the Labor and Industries of the United States. I purpose, therefore, to show, first, how by a Protective Tariff the three great groups of industries— agricultural, manufacturing and commercial — have been developed in due proportion and stimulated to yield a greater product of wealth ; secondly, how this increased product of industry has been distributed justly and to the advantage of the labor which our industries employ; and, lastly, how the prosperity of both the labor and the industries is bound up in the continuance of this industrial system. To appreciate the advantages of the Tariff to our industries, we must recall those industries a century ago. Our early industrial history is the history of a British plantation. Agriculture and commerce were alone developed. Manufactures were neglected. This disproportionate development of industry resulted, on the one hand, from England's policy of suppressing colonial manufactures and of putting bounties on agricultural exports,* and, on the other hand, from the cheapness of land and the desire of the colonists to appropriate it. After political independence was achieved, industrial dependence continued. England strove to keep this country still her "truck-farm" by the "tyrannous power of capital." By her notorious industrial policy, she rendered those natural obstacles to the development of manufactures — I mean the lack of machinery, the lack of skilled workmen, the comparatively high rates of interest and wages — so formidable that finally they became insuperable. With her organized industrial system she was ever ready to swamp our young manufactures with floods of cheaper goods, as she did in i784t and in 1815.$ In 1784 all Americans were practically camprised in two great classes — farmers and merchants or sailors. § So unduly was agriculture developed that in 1820, notwithstanding the protection to manufactures accorded by two wars, there were five persons engaged in agriculture to one in manufactures.il [The tariff has changed that ratio until it is now only two to one.\] There was, thus, a century ago, no prospect of a symmetrical development of our industries, and our future industrial history seemed likely to be that of an agricul- tural nation. Such being the trend of our industrial development, what would be the effect on the wealth of the nation ? The answer is manifest. The exclusive prosecution of agriculture and commerce — the development of two groups of industries instead of three — will be profitable so long as, and no longer than, all that large agricultural sur- plus produced by the application of all the labor and capital to the land will exchange * Bolles' Industrial History of the United States, p. 195. t D. H. Mason's Short Tariff History of the United States, chap. 1., passim. X Matthew Carey's New Olive Branch, 1821. § Bancroft's History of the Constitution, vol. i., p. 439. II Fourth Census in McGregor's Commercial Statistics, vol. 111., p. 31. ^ Compendium of the Tenth Census, pp. 1368 and 1372. in European markets for the products of manufacturing industries. While this power to exchange lasts, buying manufactures would be cheaper than making them ; the manufactories could just as well be abroad, and the maximum of wealth could be pro- duced by devoting all the labor and capital to only two of the three great groups of industries or sources of wealth. The advantage of that marked tendency that characterized our early industrial history depends, therefore, on a simple question of fact. Is there a foreign market for the surplus product of American agriculture when all the labor and capital is exerted on the land ? Now, how stands that fact ? Never in the history of this country has there been a market for the surplus product of American agriculture when all the labor and capital is exerted on the land. As Colonies we had no acceptable produce to offer England for all the manufactures that we needed.* Every year the balance of trade went heavily against us. The difference was paid by mortgages on plantations.* The opening of the ports in 1784 was followed by an inundation of cheap manufactures. Agri- cultural produce rotted on the hands of the farmers, and was as valuable as stones.t English factors and agents collected the debts by sheriffs' sales.$ In 1791 Hamilton, in his "Report on Manufactures," declared the foreign market altogether inadequate. While " the wars of the French Revolution opened to this country profitable markets for agricultural products "§ there was no surplus wasted. But on the opening of the ports in 1815 the experience of 1784 was repeated.! After the Napoleonic wars Euro- pean nations could feed themselves.1^ " That agricultural produce is too abundant in the United States for the markets at home and abroad, is a fact that cannot be disputed for a moment," said Matthew Carey in 1821.** In 1824 Andrew Jackson asked: " Where has the American farmer a market for his surplus products ? " ++ A little consideration of the nature of foreign trade will explain the reason for this limit to the foreign market. The value of our agricultural surplus depended entirely on the foreign demand. When that demand ceases the surplus is worthless. The exchange between Europe and America was one of food and raw materials for finished goods— an exchange of agricultural commodities for manufactured commodi- ties. America could certainly import from England no greater value of manufactured commodities than she made a return for in agricultural commodities. Commodity for commodity is the only permanent basis for a foreign exchange. Reciprocity is the ultimate law. Gold and silver bullion have but little importance in foreign trade. Trade is carried on by bills of exchange to purchase commodities ; and, when a nation begins to export bullion largely, trade will soon stop. In a trade, then, between Europe and America the value of all the manufactures that could be obtained from Europe was limited by the value of all the agricultural products that could be sent there. How large, then, can that foreign market be ? As far as the export of food- stuffs is concerned, the market is limited by the number of foreign consumers. This is its utmost limit ; but it will be far less than this because foreign countries have other sources of supply. In the same manner the demand for raw materials will be regu- lated. The value of the American agricultural surplus, it thus appears, will depend as much on the nature of the products as on their quantity. From Europe America can buy commodities only to the value that she gives in return acceptable commodities. America may have many commodities that Europe does not want. These considerations explain the reason why in our early industrial history all the agricultural surplus was not salable. We find that the same limit to the foreign ♦ Gee on Trade. See Thompson's Political Economy, p. 342. t Mason's Tariff History, chap, i.; McMaster's History of the People of the United States, vol. i., p. 255. X McMaster, vol. i.j p. 255 ; also Mason, chap. i. § Taussig's Protection to Voung Industries, p. 18. II M. Carey's New Olive Branch, passim. *j[ Young's National Economy, p. 79. ♦* .M. Carey's Address to the Farmers of the United States, 1821. ++ Coleman l,etter. market exists to-day.* Agriculture furnishes seventy-three per cent, of all our exports. Agricultural commodities are, therefore, our chief purchase-money. But to what amount can we export them ? Statistics show only to about the amount of $500,000,000 — the value of our agricultural exports for 1886. Nor can we hope to have a much larger market. For, in 1881, our most advantageous year, we exported only about two hundred millions more.t The reason for this limit to the foreign market is obvious. Europe is supplied by other fields than those of the United Stales. American wheat must now compete in Mark Lane with the wheat of Russia, India, Australia and South America. The Chief of the Bureau of Statistics, in his last report, calls particular attention to. this increasing foreign competition. $ With such a competition is it at all unnatural that the foreign market should be greatly limited ? I have now, I con- ceive, effectually banished the delusion of a boundless foreign market ; and I have shown that there never can be a market for all our agricultural surplus if all the labor and capital are exerted on the land. Let us now re-examine our early industrial state. The existence of a glut in agricultural produce manifestly proves that too much labor and capital are engaged in agriculture. Unless, then, the growing population was diverted from the soil a continually increasing glut would be the result. Immi- gration and the growth of population would cause not more wealth but more waste. If, then, all the capital and labor were to be employed most productively, they must engage in other industries. It is perfectly true that if population would not multiply, and if immigrants would not come, there might result no overproduction. But the first of these suppositions is, of course, absurd, and the second is impossible ; for wealth was not the sole object that brought men to America, and the first settlers of this country were not "economic" men. Unfoitunately, emigrants came here from Europe without first ascertaining whether they were needed in America to supply Europe with food. It is also perfectly true that the American supply of agricultural produce might be prevented from exceeding the European demand, if the labor and capital were to be put on " half-time," or if only a part were to be employed. But, then, all the labor and capital would not be fully employed, unless, indeed, there were no other industries. We had, then, this state of things under free foreign trade. Of the three great groups of industries — agricultural, commercial and manufacturing — only two were being developed. Agriculture, furthermore, engaged more labor and capital than it could profitably employ. If, then, the manufacturing industries could enlist the energies of the surplus cap- ital and labor, then, unless those industries were speedily developed, the capital and labor of the nation would not be employed most productively ; the exclusive development of only two groups of industries would no longer yield the maximum of wealth. That this labor and capital so rapidly multiplying could have found employment in commerce will appear impossible on consideration of the fact that the commercial industries having been always free to all, and not having been suppressed by England, must have attracted all the capital and labor that they were able to employ. The existence of the agricultural glut shows that there were yet a surplus of capital and labor. It, therefore, follows that if all the capital and labor were to be employed most productively, they must engage in manufacturing industries. I shall now show at some length why under free trade manufacturing industries could not have been developed ; and then by showing that the Tariff has developed those industries at the expense of neither the agricultural nor the commercial, I shall prove that the Tariff has increased the gross product of industry. It is certain that manufactures could always have profitably employed the capital and labor not needed in agriculture. That manufactures could become a source of wealth to the nation has certainly been proved by our subsequent industrial history. •Of course manufactures would prove unprofitable, if at the start they were required to * These figures are all taken from the Report of Bureau of Statistics, + Report of Bureau of Statistics, 1882, p. 13. t Report of Bureau of Statistics, 1886, p. 58. endure the fierce competition of foreign industries ; because under free trade, as I shall soon show, they never could have been developed. But, granted the possibility of their continued development, would not the capital and labor engaged in them produce wealth ? " The requisites of production," says Mill, "are two — labor and appropriate natural objects." America had both of these requisites in abundance. The existence of the first requisite is proven by the agricultural glut : the existence of the second, by the most hasty inventory of the nation's resources. There would be no lack of food for laborers ; because under free trade there was always a plethora. There would be no lack of raw materials, because a whole continent could be devoted to their produc- tion. There were bottomless mines and boundless forests. There were measureless coal-beds and countless streams. The forces of nature were ready to co-operate with man. If, now, it be contended that the surplus labor and capital, finding agriculture unprofitable, would have withdrawn from it " naturally ; " that a continued glut of agri- cultural produce would have been an impossibility ; that this labor and capital would have "naturally" engaged in manufacturing industries; that these industries would thus have sprung up spontaneously : I reply, in the first place, that, as a matter of history, while free trade lasted, the glut lasted, and that this was no more than a natural result ; in the second place, that, as a matter of history, while free trade lasted,, there were no manufacturing industries, and that this, too, was no more than a natural result. I shall now develop these points somewhat in detail, and ascertain, first,, whether capital and labor would have withdrawn voluntarily from agriculture ; secondly,, whether if capital and labor had engaged in manufactures under free trade, those in- dustries could ever have been developed. The glut in agricultural produce was, of course, attended by a fall in price. But, it cannot be conceded that on this account the American farmer would have lessened his production. It is perfectly true that the price of produce in Europe must be high enough to repay the American farmer for bringing land into cultivation ; but, when produce fell below that price, he would not necessarily lessen his production. For it is one thing to prepare land for cultivation, and another thing to cultivate it. To bring land into cultivation requires the investment of capital to clear the land and prepare it for tillage. This capital thus becomes fixed and cannot be withdrawn. But, to culti- vate land requires the investment of capital in tools, which cannot last long, and in labor, which can easily be dismissed. This capital is thus circulating and can be withdrawn readily. Now, take the case of an American farmer. If three thousand dollars must be expended by him to prepare land for cultivation, and if two thousand dollars and the labor of two men are required to cultivate it, then he would not bring land into cultivation until the price of wheat was sufficient in Europe to pay the in- terest on five thousand dollars and the wages of two men. But when his land is once un- der cultivation, he will not withdraw it so long as the price of wheat is sufficient to pay the interest on two thousand dollars and the wages of two men. The export price of wheat, in consequence of overproduction, might fall twenty-five cents on the bushel, as it has done in the last five years*, and yet the farmer will not lessen his production. He w^ill continue to produce until the price falls so low that it no longer yields the interest on two thousand dollars and the wages of two laborers. From this, it appears that the capital invested in land could not have been easily extricated, although American farming became quite unprofitable, and that a very considerable fall in price would have been necessary before capital and labor would have withdrawn " naturally " from agriculture. But, suppose that the price of produce had fallen so low that it no longer replaced even circulating capital, or suppose that the increasing capital and labor had avoided agriculture and sought to engage in manufactures, could these industries have been developed under free trade ? I answer, no. That without the Tariff we would have had some manufactures cannot, indeed, be denied ; but that under free trade, we would ever have approached our present industrial eminence cannot be pretended for an instant. ♦ Bureau of Statistics, 1886, p. 50. In the first place, this theory of the spontaneity of manufactures is, in the words of Henry Clay, " refuted by all experience, ancient and modern, in all countries." There is not, on the face of the earth, a manufactory that has not in some way been directly encouraged by government. Here, free trade should certainly take up the burden of proof, because it maintains that that which has never happened in any country, before or since, would have happened in the case of the United States. But, it is easy to show why, without a Tariff, we never would have developed our manufac- turing industries. Suppose that, under free trade, we had bought foreign manufactures to the value of our acceptable products, and then the surplus capital and labor had undertaken to manufacture the rest of the desired commodities under American con- •ditions. The manufactures of Europe and the manufactures of America would then be sold in the same market. Now, such a system of direct and indirect production of manufactures would be manifestly impossible in the case of similar commodities. The difficulty would arise from the difference of price necessitated by the different cost of production. That difference consists chiefly in the one element of wages. The wages of manufacturing industries, It is generally agreed, were determined, at first, by the profit in farming. Until a man could earn more by entering a factory, he pre- ferred to take a farm. Now, the profit in farming depends on two elements : the efforts of the farmer, and the fertility of the soil. So great in America was this latter element, that a very slight effort brought a bountiful return. In America, therefore, the cost of production in agriculture was small, from the standpoint of the farmer's exertion, and ■wages were thus high. In Europe, however, where land was scare and less fruitful, after centuries of cultivation, wages were low. The European laborer must either take the proffered wages or starve. The American laborer may become a land owner. The American manufacturer, now, starts his factory to produce the rest of the commodities necessary for the home consumption. He will, then, compete with the European manufacturer, in the production of similar goods. To attract laborers from farming, the American manufacturer must offer higher rewards than can be obtained on the farm, and to do this he must advance the price of his goods. To him, the cost of production, measured in wages, is high. But his European rival has no such wages to pay. He does not employ men, but " hands." To him, the cost of production, measured in •wages, is low. The price of his goods is, therefore, far less. The American laborer, for his part, refuses to work for such terms as the European laborer. He prefers living at ease, owning his own land, to toiling as an industrial slave. If, then, the American ^oods are to be made at all, they must be sold at a higher price. The American article and the European article, with different prices, are now in the same market. But " there cannot be, for the same article, two prices in the same market." The American manufacturer is, therefore, forced either not to sell at all or to sell at great loss. American capital and labor are, in either case, ruined. Under free trade, the history of American manufactures is one continual history of industrial disasters. Whenever an attempt was made, by Americans, to establish competing manufac- tures, the European Chiefs of Industry, with their half-fed hordes, rushed in " to recon- ■quer the American market." Not able to satisfy the whole of the American demand for manufactures, England, by selling large quantities at a loss, prevented America from satisfying the rest of that demand. England has ever dreaded the day when American manufactories, supplying the whole of the home market, would " lessen the dependence " of America. Had there been no laws for the protection and encourage- ment of manufactures, the history of those manufactures would have been one oft- recurring cycle of effort, struggle and relapse. Our present industrial structure would be an industrial ruin. An utter apathy would yet hang like a pall over the mountains of Pennsylvania and tl^e streams of Connecticut. A nation of farmers, reaping and gathering into barns, would yet be dozing in its Sleepy Hollows. There would have been no great industrial class which continually toils and spins. It would have remained for generations yet unborn to see Pittsburgh, and Johnstown, and Lowell, and Willimantic, with their " tall chimneys smoking." But, the great men who stood at the beginning of our history comprehended most thoroughly our industrial problem. They determined to secure for this country the maximum of wealth by the full employment of all the capital and of all the labor. Such was their purpose, and to achieve it they saw but one means — " the protection and encouragement of manufactures." They were the great American economists, for they studied to increase the opulence of the nation. They believed that it was the duty of government " to promote the general welfare " But of that new Evangel — " the Gospel of Mammon," whose leading text is Laissez- Fair e, loudly proclaimed by the English apostles, and devoutly believed by the American disciples, those statesmen had not heard. Yet they had no idea of remaining idle, when they had the means to produce and the capacity to consume. They had no idea of postponing manufacturing until interest and wages had fallen to the European level. They determined to rebel against the industrial tyranny as they rebelled against the political. And on the 4th of July, 1789, they declared their industrial independence by enacting the first Tariff law. The advantages of the Tariff to our manufacturing industries are certainly ines- timable, for to the Tariff those industries now owe their existence. The Tariff first sheltered American manufactures from the attacks of British capital, and thus gave the productive power of the nation an opportunity to display itself. The skill that was essential to the establishment of manufactures could be acquired only after years of experience. The industries required protection during the period of tuition. When once those industries were developed there would result a greater and a cheaper pro- duction. Protection was granted, and the industries immediately prospered. Space permits no attempt to trace that splendid industrial progress from the days of Slater and Whitney and Lowell to the days of Baldwin and Corliss and Edison. But the results are indeed marvelous. Were Alexander Hamilton, the prophet of Protec- tion, to appear among us to-day, and make a second report on American Manufactures, he would behold a development of which he never dreamed. He would see the seven- teen branches of manufactures that struggled for existence in his day increased in less than a century to more than three hundred ; he would see the vast laboratories of nature explored and the elements turned to the service of man ; he would see on all our rivers those grand palaces of the arts which fill the air with the hum of myriad wheels. Astounded, he would survey those busy hives of industry — now the rivals, and soon to be the victors, of their European prototypes — Paterson, the American Lyons ; Trenton, the American Burslem ; Waltham, the American Geneva ; and Phila- delphia, the American Manchester. A few figures from the census of 1880 will show how rapid has been the develop- ment of the manufacturing industries. In the course of only thirty years, from 1850 to 1880, there was a gain in the gross value of the manufactured products of over 426 per cent.; a gain in the capital invested of over 423 per cent.; a gain in the wages paid of over 300 per cent., and a gain in the number of hands employed of over 185 per cent. Thus the Tariff, by developing the manufacturing industries, has solved the great industrial problem— How can the labor and capital of the nation produce the maximum of wealth ? I shall now illustrate by a few statistics how by a Tariff we obtain the maxi- mum of wealth to-day.* Our total exports for 1886 amounted to $665,964,529. Of this sum seventy-three per cent., or about §500,000,000, consisted of agricultural products. With these commodities, therefore, we obtain the desired foreign commodities, and our imports, furthermore, are limited by these exports, because we cannot buy more than we can pay for. We dispose of our exports in the following manner : Food-stuffs to the value of §238,990,434 are sent to Great Britain and the Continent to exchange for manu- factured goods. Beyond this amount Europe will take no food-stuffs from us, because she has other sources of supply. With Europe the balance of trade is in our favor. She takes all the food that she wants, and is ready to give us an equal return in manu- factured goods. But, we cannot import manufactures from Europe to the value of ' These figures are from the Bureau of .Statistics, 1886. $238,99o>434> because with the rest of the world we have an unfavorable balance of trade ; for outside of Europe we can sell no agricultural produce. Our trade outside of Europe is in great part one for luxuries, and this adverse balance must be settled with cash. By bills of exchange on European bankers we pay this adverse balance with the favorable European balance. When this unfavorable balance is paid, what- ever is yet due from Europe may be paid by exports to this country of manufactured goods. Now, in return for our $238,990,434 worth of food-stuffs, we obtain, after pay- ing the adverse balance, manufactures of wool, silk, cotton, iron and steel, wood and leather, to the value of only $155,270,448. These goods all compete with the products of our protected industries. This sum of $155,000,000, therefore, represents what amount of manufactures we could obtain under free trade. More than this we could not obtain, because Great Britain and Europe want no more of our commodities. Now, suppose we had free trade ; suppose we had no protective industries to manufac- ture commodities of wool, silk, cotton, iron and steel, wood and leather ; suppose we had only $155,000,000 worth of those commodities, how much less then would be the wealth of the nation ? How much less would our industries yield ? How much less a value of necessary commodities would we have for the satisfaction of our desires ? The gross product of all our manufactures is about $5,500,000,000. The census of 1880 put it at $5,369,579,191.* Now, it is generally considered that the product of the protected or competing industries is about $2,500,000,000. Under free trade, therefore, we would be without this wealth. For we are in the horns of a dilemma. We must either go without these commodities or else make them ; since to have the commodities we must have the industries. Under Protection we obtain manufactures indirectly by exchange to the value of $155,000,000, and by producing manufactures directly to the value of $2,500,000,000. Our total consumption of the products of competing manufactures is, therefore, to-day $2,655,000,000. If, then, under free trade we could not produce the $2,500,000,000 worth of manufactures, because they are the products of protected industries, how could we obtain what we annually need for consumption — commodities to the value of $2,655,000,000 ? Will Great Britain and Europe sell us manufactured goods to the value of $2,655,000,000 for agricultural produce to the value of only $500,000,000 ? Such a proposition is preposterous ; but free trade must maintain it or admit that we would have less wealth. Of the goods demanded for the American con- sumption but a very small fraction, less than one-eighth, can, therefore, be obtained from abroad. Under free trade we would have only this fraction, and go without the remaining seven-eighths. Under Protection we can have the whole amount desired. If, under free trade, an attempt were made to buy from abroad, and then to produce the remainder at home, there would be two prices for the same article in the same market, which would be an impossibility. The price of the whole supply, both domestic and foreign, will be fixed by the price of that portion raised at the greatest expense. If the American manufacturer cannot get this price he will not produce the manufactures, and we go without the wealth. If the American producer gets this price under free trade, because the foreign manufacturer raises his price, then the Tariff most certainly does not tax the consumer. A Protective Tariff simply increases the price of the foreign article to the amount of the increased cost of production of the domestic article. The Tariff thus compels the foreign and domestic article to be sold at the same price, thereby rendering prices stable for the home producer, and furnishing the whole amount desired to the home consumer. The advantages of the Tariff to the manufacturing industry are, indeed, evident. But, have manufactures been developed at the expense of other industries ? I shall now show that manufactures are by no means parasitical, but that the Tariff, while it has developed the manufacturing industries, has, at the same time, stimulated both agriculture and commerce. The advantages of the Tariff to American agriculture proceed from this — that it * Census of Manufactures, p. 10. has substituted a domestic for a foreign marlcet. As a result of the Tariff the factory competes with the farm for laborers, and so attracts numbers from the soil. The factory- removes those superfluous farmers whose labor causes a glut and results, not in wealth, but in waste. Thus the rivals of the farmer in production become his consumers. The factory, furthermore, has attracted labor from abroad, thus increasing the home market. Of immigrants the factory has received fifty per cent, more than the farm.* But this is not all. Under Protection the farmer exchanges his produce with the domestic instead of the foreign mechanic. This is manifestly to the farmer's advan- tage ; for the domestic mechanic consumes the manufactures of other domestic me- chanics, who in their turn consume the farmer's produce and thus increase the home market. But the foreign mechanic consumes foreign manufactures, and that con- fers no additional benefit on the farmer. Thus has Protection substituted for the two boasted markets of free trade — one of which is too small and the other too fluctuating — one market at home, which is more than twice as large as the foreign market,+ and absolutely certain. A home market benefits the agricultural industries in most impor- tant particulars. In the first place, it enables the land of this country to be used in its most productive manner. This free trade would prevent. When an agricultural country exchanges with a manufacturing country it must sow its lands to those staples which that country demands. Thus, we export to England to-day only three vegetable staples — cotton, wheat and tobacco. Now, so long as the demand of a manufacturing country is confined to a few articles, the productive power of the agricultural country must be diminished. The numerous varieties of soil and climate which characterize this country are capable of producing numerous varieties of crops. Every soil is more productive when sown to one crop than to another. But, under free trade these advantages are all lost. The soils, whatever may be their appropriate crops, must be diverted from their best use to raise those crops for which alone there is demand. Is not productive power thus lost ? To diminish cost of transportation those crops are exported whose density of value is greatest. Land will be diverted from the production of the more bulky yet more abundant corn to that of the more compact yet scarcer wheat. Then, too, there is no demand for the perishable vegetables and fruits, and from their production the suitable lands must be diverted. Above all, the continuous demand for the same few products prevents any system of rotation of crops, and the absence of a certain and near market prevents any careful tillage and leads to extensive instead of intensive cultivation. Had America adhered to free trade this misappropriation of the soils must have inevitably resulted. One fact will show how wasteful American agriculture might have been. In 1770 nearly one-half of the value of all our exports consisted of tobacco. $ And, had free trade continued, we would now be striving to monopolize the European markets, diverting all our land to the production of wheat, cotton and tobacco. We would never have developed those fourteen " principal vegetable productions" and those " orchard products " that we have to-day. § These advantages to agriculture could only proceed from the creation of a home market. On account of the physical properties of the soil there is still another reason why the home market is more advantageous than the foreign. When agricultural products are consumed near the farm nitrogenous refuse may be returned to the soil. But when those products are shipped to foreign markets, there can be no such return. The soil is practically transported, and lands lose their fertility. The Tariff has prevented this " earth-butchery " in the United States. The advantages to agriculture of a market for the surplus is strongly affirmed by Mr. Mill. " A country," he says, " will seldom have a productive agriculture unless it has a large town popu- lation, or the only available substitute, a large export trade in agricultural produce." | ♦Tenth Census, Manufactures, p. 26. Compendium, pp. 1368 and 1372. + Bureau of Statistics Report for 1880. Census of At^nculture, 1880, p. 27. ± Macpherson's Annals of Commerce, vol. 111., p. 572. 8 Compendium of the Tenth Census, vol. i., p. 738. I Political Economy, book i., chap. viii. It has, I believe, been thoroughly established that such a and does not now exist abroad. By a Protective Tariff we have cf at home. " The arrival of manufacturers," to use Mill's expression, has enriched the farmers by the value of the food that would not have been produced had those manufacturers not been here to consume it, or which would have been produced only to rot in granaries. Nay, more, the factory has stimulated the farm to still greater ■efforts to supply the constantly increasing demand for food. An incalculable advan- tage of the Tariff to agriculture has resulted from the establishment in this country of the mechanical arts. The methods of agriculture have been vastly improved since the days when farmers plowed their lands with wooden " bull-plows," sowed their grain broad- cast, cut it with a scythe, and thrashed it with a flail.* Had we not fostered the mechanical arts by a Protective Tariff, would the agricultural implements of Auburn and Chicago be now acknowledged the finest in the world ?t Would American agriculture have undergone that great revolution produced by American steam-plows and stone- cutters, and reapers and binders ? In less than a century would the product per man have increased fivefold ?$ The history of American agriculture negatives such conclusions. Colonial agriculture was rude and exhausting ; for the fertilization of the soil and the rotation of the crops were never practised. § A period of awakening followed the Revolution, and as agriculture under the tariffs became more profitable, it gradually came to be studied as a science. With the invention of McCormick that science began its extraordinary development, continually furthered by agricultural chemistry and agricultural machinery. The advantages of the Tariff to the agricultural industries may, therefore, be summed up in the two words of Mr. Mill — a " market " and " tools." The Tariff has, therefore, stimulated those industries and enabled them to yield a greater product of wealth. Nor has a Protective Tariff less stimulated the development of the third great group of industries — the commercial. Even if commerce meant no more than exchange between different nations, the Tariff could not be charged with checking it to-day. For I have shown that our exports are limited by the foreign demand, and that imports in the long run must balance exports. A Tariff does not stop commerce. Our commerce would be but little increased were the Tariff now removed. There would be, it is true, under free foreign trade a great demand in this country for foreign manufactures : but there would be no supply at the only terms we could offer. Where could we, with only agricultural products, purchase by exchange in foreign commerce manufactures to the value of $2,655,000,000 ? But commerce does mean more than mere foreign trade. Commerce includes the home trade as well. Adam Smith, the free-trade patriarch, declared the home trade to be far more profitable than the foreign. He says that if a given amount of capital purchases and interchanges goods within the same country, that country will gain twice as much advantage from that capital as if it had purchased and interchanged an equal value of goods with another country. For, in the first case, this capital encourages only one native industry ; in the second, two. Moreover, in the home trade capital circulates more swiftly. When, therefore, an equal amount of capi- tal is employed in the home and in the foreign trade, the first capital will be far more ■efficient and profitable than the second ; because it can effect in the same time, and with less cost for insurance, many more exchanges than the second. The Tariff has ■created for the United States such a domestic or internal commerce. The Tariff has stimulated commerce, because it has enabled the surplus product of the farm to find a market at the adjacent factory. Our railroads and canals are the commercial indus- tries. Since this exchange of products between farm and factory has become possible our internal commerce has attained mammoth proportions. The capital invested in railroads is now one-fifth of the nation's wealth. The mileage is now equal to that of * McMaster's History of the People of tfie United States, vol. 1., p. 18. + Bolles' Industrial History of the United States, p. 41. X Tenth Census, Agriculture : History of American Agriculture. § Bolles' Industrial History of the United States, p. 14. lO all the rest of the world. In 1880 our domestic commerce, measured in the tonnage of the railroads alone, was more than twenty times as great as the foreign commerce.* To conclude the discussion of the advantages of the Tariff to the industries of the United States, let me summarize my argument. Beginning with that incontestable fact, an unsalable agricultural surplus, I have shown that if our labor and capital were to be fully employed, that if we were to obtain the maximum of wealth, there must be devel- oped in this country the manufacturing industries. I have shown that under free trade their development was impossible. I have shown that under Protection they have been developed, and that at the same time the agricultural and commercial industries have been stimulated. I have, therefore, proved that the Tariff has increased the gross product of our industries. Under free ti-ade our production of wealth was in great part an indirect production. We produced the desired manufactured commodities by exchanging others for them. England balked us in all attempts at a direct produc- tion. Our production was therefore limited by the extent of the foreign market for our agricultural surplus. That the people of this country desired to consume, and had the labor and capital requisite to produce a far greater amount of wealth than they could produce indirectly, in no wise enabled them to do so. It is true that under free trade a small effort would produce a greater amount of wealth than a like effort could at first produce under Protection. But that effort under free trade could never be enough to satisfy the nation's desires. Under free trade we could obtain a small supply of manufactures at a somewhat cheaper price ; but beyond that supply we could obtain nothing. Under Protection we obtain all that we desire at a rapidly cheapening price. Under Protection production can have no limit but the energies of the people and the resources of the continent. I pass now to the advantages of a Protective Tariff to the labor of the United States. To appreciate the advantages of the Tariff to the workingman we must recall his condition a century ago. During the early industrial period, until the introduc- tion of the factory system in 18 15, there was, properly speaking, no great laboring class. Laborers were then engaged either in farming, or in occupations like that of the carpenter, blacksmith and mason, who render a kind of personal service and must therefore be near the person for whom they work. There was no class that was engaged in manufacturing, for the manufactures consumed in America were produced by foreign laborers. The establishment in this country of the manufacturing indus- tries, therefore, required the creation of a great industrial class. Of the state of the laborer in the early industrial period we have authentic accounts. So miserable was his condition that we can hardly understand how in less than a century his condition could have been so ameliorated. In the first place, the general rate of wages was lower by one-half than at present. t This is true, notwithstanding the great depreciation of money. Colonel Wright, the eminent statistician, has traced the history of wages from 1752 to 1860.$ The following table compiled from his work will show how great has been the rise in wages : 1786. i860. Blacksmiths, . . . . $ .667 $1.25 Carpenters, .... .538 1.25 Common unskilled labor, .311 i.oo But we cannot understand how much lower wages really were a century ago until we learn that a working day lasted invariably from sunrise to sunset.§ It was not until 1824 that the subject of shorter hours was agitated, and no reduction at all was made in the hours of work until 1840. II Nor can we understand what was the real position of the laborer until we see how little his wages could procure. A century ago the American laborer had but few of those comforts that he regards as necessaries ♦ Census : Transportation, p. 10. Bureau of Statistics, 1880, p. 38. + McMaster's History of the People of the United States, vol. i., p. q6. X Historical Review of Wages and Prices, 1752-1860. § McMaster's History, vol. 11., p. 617. II Wright's History of Wages and Prices, p. 10. II to-day. The houses of laborers were " meaner, their food was coarser, their clothing was of commoner stuff." * The houses were especially comfortless. The floors were covered with sand for carpet. There was no glass upon the table, no china in the cupboard, no prints upon the wall, no stove, no coal, no matches. t The food was correspondingly poor. " The artisan's food was simple, often coarse, and, in fact, confined to the bare necessities of life.":^ The laborer had but few of the vegetables that are now most common, and enjoyed fresh meat only once a week.§ Nor was the clothing of the laborer better than his food. " The clothes of the artisan," says Mr. McMaster, " would now be thought abominable. A pair of yellow buckskin or leathern breeches, a checked shirt, a red flannel jacket, a rusty felt hat cocked up at the comers, shoes of neat's skin set off with huge buckles of brass, and a leathern apron, comprised his scanty wardrobe." || Such was the condition of the American vvorkingman a century ago. How great has been the improvement in his condition may be learned from observation, from the reports of the State Labor Bureaus, which publish workingmen's budgets ; or from volumes of incontestable statistics that show the present high rate of wages in America. The question now is : What has conferred these advantages upon the labor of the United States ? In discussing the advantages of the Tariff to the industries I have indicated