Our tariff : why levied and why continued

UNIVERSITY OF N.C. AT CHAPEL HILL 00028139425 OUR TARIFF Why Levied and Why Continued AND THE COrJDEN CLUB C&e mbtatj? of m Onfoewtitp of JI3ottb Carolina CEniotoeD ftp Wbt SDialectic ano 337 F32o OUR TARIFF. WHY LEVIED AND WHY CONTINUED. THE REASONS WHY THE AMERICAN PEOPLE WISH TO PAY BETTER WAGES THAN ARE PAID IN EUROPE ; ALSO A SKETCH OF THE COBDEN CLUB. BY r- JACOB HAKPJS PATTON, M.A.; Ph.D., Author of "A Concise History of the American People;'''' "Natural Re- sources of the United States;'''' " The YorTctown Memorial (1781- 1881) " The Democratic Party— Its Political His- tory and Influence" Etc. NEW YORK: The Americax Protective Tariff League, No. 23 West Twenty-third Street. 1887. Copyright, 1887, By JACOB HARRIS PATTON. WILLIAM GREEN, Printer, Electrotyper and Binder, 324, 326 and 328 Pearl Street, NEW YORE. PREFACE. This booklet was written to bring before the minds of in- telligent Americans— whether employers or employed— the reasons why the tariff or tax was imposed upon foreign pro- ducts or property, in order to obtain funds for defraying the expenses of the National Government. That mode of rais- ing this special revenue being less burdensome to the people; and also to show the beneficial influence of such trariff upon our mechanical industries, and through their extension and success, the benefits that accrue to our own workpeople. I. It is shown why our tariff was imposed— because that when we became a nation, it was necessary to bear the expenses of two separate governments. II. That while the term protection may be misinterpreted and so used as to mislead, our tariff of to-day is pre- eminently designed to equalize the cost of production ; that is, to counterbalance the low wages paid work- people in Europe. III. That property in the form of imported merchandise ought to bear a proportionate share of the expenses of government, as well as property in the form of real es- ^ tate, and that a tax levied upon the former, benefits the 4 PREFACE. people of the entire Union— rich and poor; the employer and the employed. IV. That our present tariff has in view two objects equally important : one, to so adjust its rates as to induce capi- talists to invest in manufacturing; the other, to aid our own workpeople by furnishing them employment at re- munerative wages. V. It is shown that from 85 to 90 per cent of the cost of American manufacturing, is paid for the labor of those employed, while in Europe — in consequence of low wages— only about 30 to 35 per cent of such cost goes into the hands of the employes. VI. A brief history is also given of the avowed purpose, and of the efforts made at different times — from 1815 to the Cobden Club of to-day— by British manufacturers and merchants, aided by their American allies, to break down the mechanical industries of the United States. CONTENTS. PAGE Section I. — The Two Governments 7 The Forms of Application, 8— The Three Theories, 8— Effects Produced, 9— The Summary, 10— The Eesult, 11— The Competitors, 11 — Facts Worth Remembering, 12. Section II.— Protection for the Workpeople 14 A Change of Base, 14— Political Equality, 15— The Effects of Common Schools, 15 — An Englishman's View, 16 — In- terest and Duty, 17. Section III. — Advantages to be Transferred 18 The National Policy, 19— The Transfers, 20. Section IV.— England wishes Free Trade... 22 The Comparison, 22 — Raw Material Sometimes Taxed, 23 — Difference in Appreciation, 24 — The Irishman's Revenge, 25— Misrule and Votes, 26. Section V.— The Two Kinds of Capital 28 Capital, Whence Derived, 28 — The Two Investments, 29 — Distribution of Wealth, 30 — Standing Armies, 30 — The Farmer's Grievances, 31— Two Illustrations, 32. Section VI.— The Real Effect of the Tariff of 1846 33 English Views, 33— The Effect of Finding Gold, 34— Tac- tics of Theorists, 35 — Interest and Sympathy, 36 — The Ret- rograde and the Advance, 36. Section VII. — The Philanthropic Theory 38 Reciprocity Treaties, 38— A Tariff Based on Wages, 39 — An Equal Basis of Cost, 40 — A Worthy End to be Secured, 40 — Misleading Statements, 41 — Luxuries, 42. Section VIII.— Wages , 43 The Illustrations, 43— Shipyards, 44— Statements of Ex~ CONTENTS. PAGE perts, 44 — A Further Illustration, 45 — The Virtual Protec- tion, 45 — Report on Wages Paid in Europe, 46 — Efforts not Relaxed, 47. Section IX.— Low Wages, How Caused 48 The Discussion, 49 — Results of Low Wages, 49 — The Cor- rupting Influences, 50 — The Disclaimer, 51 — National Train- ing, 51. Section X. — Wages Seek Their Level 53 Cure of Overproduction, 53 — Higher Wages, 54 — Con- trast in Populations, 55 — Employment of Females, 56— Kind 1 and Unkind Treatment, 56 — The Contrast ; Paisley and Willimantic, 57 — Workpeople's Library and Recreation, 58 — John Bright's Lament, 59. Section XL— Buy Where You can Pay Easiest 61 Workingmen's Views, 62— Higher Wages; Higher Prices, 62— Savings Banks, 63. Section XII. — Successful Industries . Benefit all the Workpeople 64 Mutual Interests, 64 — Home Competition, 65— The Bal- ance of Trade, 66— Effects of Low and High Tariffs, 67. Section XIII. —Development of Our Resources 69 Harmony Needed, 69— The Misleading Term, 70. Section XIV. — English Efforts to Ruin American Man- ufacturers 72 The Unique History, 23— Lord Brougham's Suggestions, 74— The Mode of Operations, 75 — Reasons for Alarm, 75 — Mr. Thorneley's Report, 76— Sympathy for the Rebellion, 76 —An Englishman's Remarks, 77— The Bland Advice, 77— The People Constitute the State, 77— The Retort, 78— Quo- tations from Blackwood, 78. Section XV.— The Cobden Club 80 The Obstruction, 80— The Jubilant Dinner, 81— Medals to American Students, 82 — Benevolence of the Cobden Club, 83— The Animus of the Club, 83— The Singular Advice, 85 —Tactics of the Club, 85— The Conclusion, 86. Our Tariff. l The Two Governments. The present government of the United States took a na- tional form under its constitution when George Washing- ton was inaugurated President in 1789. Immediately questions arose in respect to the manner of conducting the affairs of the young nation thus called into existence ; only one of these we now propose to notice— that in relation to defraying its expenses. There were now, instead of thirteen, two distinct governments to be supported by taxation— the national and that of the separate States — there were, like- wise, two distinct classes of property that could be made subjects of this taxation; the one coming into the Union in the form of importations of merchandise from foreign countries, the other the land or real estate. As the States had conceded the control of foreign affairs to congress alone, it was fitting and in consequence so arranged as to defray the expenses of the national government by means of a tariff or tax levied upon these importations, while the ex- penses of the State governments were to be met by one levied upon the land or real estate. {Hist. American People, pp. 573, 576.) This was the general theory on the subject, the details being left for future adjustment as time and experi- ence dictated. It is strange that this historical fact is so little recognized by the mass of ordinary intelligent men, 8 OUR TARIFF. and indeed of all those who have not sufficiently studied the subject. Great numbers, taking their cue from certain writers and speakers, seem to think that somehow this tariff or tax on foreign goods or merchandise was imposed in the interest of the American manufacturer, rather than to supply funds for defraying the expenses of the National government, and thus benefiting the people at large. The Forms of Application.— This system has supplied am- ple funds for these expenses, except only when untoward causes increased the liabilities of the National government. Then in order to obtain revenue, it became necessary to avail itself of an internal tax, while the States meet a deficiency when it occurs by simply increasing the rate of taxation in proportion to their needs. The latter system having only one object in view— to raise the necessary funds — is com- paratively simple, but the former, having several ends to attain, is in consequence very complex. For illustration: we import manufactured goods, and often of classes we make ourselves, so that it becomes essential to adjust the tax or tariff on these importations in such manner as to raise the desired revenue, and at the same time not in- jure the industries of our own workpeople. It seems the fairest mode of adjusting the difficulty would be in so ar- ranging the rate of this tax — called tariff when applied to imported property — as to equalize the cost of production of the various classes of these manufactured articles when laid in our market. The Three Theories. — In this discussion three theories present themselves : First, " free trade," according to which no duties at all are to be levied on imported foreign mer- chandise or property; the second, " exclusively for public purposes" or "for revenue only;" The latter's primary object being to impose on these importations such rates of duty as to secure the most money for the United States treasury. In addition, the effects produced by these rates of duty upon those industries of the people that come in THE TWO GOVERNMENTS. 9 competition with similar ones of Europe, are deemed only of secondary importance, which idea the advocates of this theory have sometimes expressed by the term ' ' Incidental protection," or more recently by the apologetic phrase, " it is not proposed to injure any domestic industries.' ' These two theories we shall treat as nearly one and the same, since when put in operation they have produced similar results. That they are intimately connected in their in- fluence is well understood by their respective advocates, who are both consistent when they virtually sustain each other in every election that may have a bearing directly on our mechanical industries or indirectly on the financial measures of the government. The third theory, for want of a more correct definition, is briefly called " Protection," but which is more clearly de- fined when designated as a measure to " equalize the cost of production" The application of this theory is designed for articles manufactured in Europe which are similar to those made in the United States— that is, to so levy the tax or duty as to secure the requisite amount of revenue, while at the same time making that feature secondary to the policy of encouraging our mechanical industries, and, what is in- finitely more important, affording employment to the peo- ple who work for wages— estimated by political economists to be three-fourths of our adult population. So many of our farmers owning the land that they cultivate, makes this ratio less in the United States than in Europe. Effects Produced.— It may not be without profit to show concisely the different effects produced by carrying out in practice the theories of free trade and for revenue only. Practically, there is very little difference in relation to the influence of these two systems upon our mechanical indus- tries, as in that respect they both are injurious, but not quite in the same degree. The first, on account of the low wages paid abroad, unless we put ours down to the same level, would effectually prevent competition of any kind in the production of articles of the same class manufactured in 10 QUE TARIFF* both countries. The second, in its application, accomplishes a similar result in crippling most of our mechanical indus- tries, the wages paid our workpeople, meanwhile, becoming very nearly the same as that paid in Europe. The explana- tion of this difference in wages under the two systems is found in the small amount of duty levied — for experiment proves that with us the comparatively low, not the high, tariff on high priced goods produces the most revenue, as the former becomes a temptation to increase importations of common articles, which in turn overwhelm the home productions. In addition, the second theory places the Na- \ tional government in the attitude of a heartless tax-gather- er, in contrast with the third, which places it as the friend of the masses — those who work for wages — in so legislating as to afford them an opportunity of obtaining by means of their own labor a self-respecting and comfortable support. The Summary.— The results of the two systems, "free trade" and for "revenue only" or "exclusively," as found by experiment in the United States, thus sum up. Free Trade: no revenue from imports; the National government supported by funds derived from internal taxation ; wages on a par with those paid in Europe. For revenue only or exclusively : an abundance of revenue, owing to a low tariff but very large importations, mechanical industries crippled if not ruined; the workpeople without remunerative em- ployment, and a large portion of the population bankrupt. Now for the proof of this statement. First, we never en- joyed but once the pure unalloyed blessing of free trade. That was during the six years (1783-1789) immediately pre- ceding the formation and adoption of the U. S. constitution and the inauguration of George Washington as President. Says Bolles in his History of the Finances of the United States (II. p. 487): "From 1783 to 1789 the trade of the thirteen old States was perfectly free to the whole world. The result was that Great Britain filled every section of our country with her manufactures of wool, cotton, linen, leather, iron, glass, and all other articles used here; and in THE TWO GOVEBNMENTS. 11 four years she swept from the country every dollar, and every piece of gold." Again; the only instance when we fairly put in practice the theory for revenue only, was toward the close of the gradually lowering process of the rates of duty in the famous Compromise tariff adopted in Nullification times, 1833, and which reached its netheration in a horizontal tariff of 20 per cent upon every article of im- ported merchandise. This was perhaps the most injudi- cious tariff ever framed, as it entirely ignored the almost innumerable differences that ever exist in the cost of pro- duction of the various manufactured articles ; especially is this the case in the United States. It is in proportion equally absurd to apply the horizontal principle in lowering the rates of an existing tariff. The Result.— Under the influence of this unique com- promise measure (March 3, 1833), began the gradual with- drawal of almost the entire capital invested in the manu- facture of articles that came in competition with those made abroad. The result was that nearly the whole Nation stood idle and went in debt for that class of goods which the people once made for themselves ; meanwhile the principle for " revenue only " was working out legitimate effects. The United States treasury was becoming richer and richer — had forty million dollars surplus — and the people them- selves poorer and poorer, till finally the majority of the latter became bankrupt, the business of the country cul- minating in the financial crash of 1837, all things consid- ered, the most tremendous in our history. The Competitors.— In the case of free trade the American manufacturer enters into competition with the foreigner, the latter having an immense advantage in the low wages he pays; in the case of for " revenue only " or (l exclusive- ly," he and his workpeople enter into a sort of competition with the United States treasury, with the latter sure to win in the accumulation of money drawn from import duties, not because they are high, but because they are low, 12 OUR TARIFF. thus filling the vaults of the treasury to the detriment of the labor and capital of the people themselves, meanwhile making the latter less independent of foreign manufacturers. Strictly speaking, both these theories in this application are in direct opposition to our boasted doctrine, that " the peo- ple constitute the State," and, consistently, the government is only their agent ; but, on the contrary, we have seen the latter in this mode of raising revenue sacrificing the indi- vidual interests of the people. Facts Worth Remembering.— Let it be borne in mind that the funds derived from the tariff are appropriated to de- fray the expenses of the National government, and in that respect every citizen — the employed as well as the employer — is benefited ; and, moreover, this money is obtained from the well-to-do and the rich, the latter being able and willing to purchase the high-priced goods that pay correspondingly high duties. It is therefore a gross and willful misrepre- sentation to say that the tariff is only for the advantage of the manufacturer, when the benefit derived from it accrues to all the people of every class and condition. It has been argued by certain advocates of free trade and for revenue only or exclusively, that our recent overproduction in manufactured articles could be disposed of to other nations if we adopted free trade or nearly so, and thus the whole civilized world would be thrown open as a market for our surplus of mechanical products. At first sight this appears plausible, and indeed might be applicable until we had dis- posed of our present surplus. But what of the future ? Under the influence of a system that did not equalize the cost of production by means of import duties, we could not again create a surplus of manufactured articles, as our in- dustries would be so crippled by the necessarily low rate of wages. Had the latter during the last twenty-five years been nearly as low as that paid in our great free trade rival, England, the result would have been, instead of an over- production of manufactured goods, there would have been a deficiency. The money surplus that the United States THE TWO G0VEBNMENT8. 13 treasury now holds — be it remembered — was derived on principles entirely different from those on which the forty millions previously alluded to were obtained. That of to- day is the outcome of the unprecedented industrial success and general progress of the country for the last twenty -six years, and which enabled those who chose to purchase foreign high-priced goods to pay a correspondingly high duty, which found its way into the common treasury of the Nation, while the income from internal revenue was also in proportion to the vast production of the articles thus taxed. Meanwhile the laboring class had plenty of work and at fair wages, and capital sufficient to carry on our different industries was invested and at a profit. 14 OUR TARIFF. XL Protection for the Workpeople. The political economists of the for-revenue-only school continue to urge there is no necessity for a tariff to protect " infant manufactures," and often exclaim that long ere this they ought to have passed the period of infancy. These gentlemen seem to be unaware that the demand for a tariff to-day is based on different grounds than that of the period to which reference is made. In addition to making a cer- tain class of property pay its share of the National ex- penses, there is also necessity at this time for a tariff to equalize the cost of production, and thus protect our work- people in receiving fair and remunerative wages, in contra- distinction to those familiarly known as starvation in Eu- rope. No one of our mechanical industries that has been developed fully needs on that ground a tariff for its pro- tection ; but, notwithstanding, living wages must be paid or we cannot obtain the workmen, and of course, some such arrangement is necessary, or our industries that com- pete with those of Europe must either cease or our em- ployes receive the same amount for their labor that is paid on the other side of the Atlantic. At the present time the tariff is levied in behalf of our workpeople, and seeks to secure them a comfortable living if they are industrious, economical, and, more than all, temperate in their habits. This policy accomplishes another end in which the whole people are interested and benefited, inasmuch as the $800,- 000,000 of foreign property that annually comes into the country in the form of merchandise pays, by means of a tax or tariff, its share of the expenses of the General government. A Change of Base.— -Thus the ground is shifted; at first PROTECTION FOB THE WORKPEOPLE. 15 the primary object was to encourage our own manufac- turers and train our people to do for ourselves that which we had hitherto employed manufacturers in Europe to do for us, but now we have with but few exceptions acquired the requisite skill ; but another element crops out — we want to stand by our own workpeople, and as a humane and pa- triotic measure advance their interests, and not subject them to the disadvantage of having their wages lowered to the standard paid in Europe. Political Equality.— The Americans in a political sense are on an equality with each other, the vote of the em- ploye being of itself as influential as that of the employer. On this principle we repudiate class legislation. Our states- men are bound by this unwritten law to so legislate as to promote the interests of the greatest number, and, also, not to infringe upon those of the smallest. We h?we seen that about three fourths of our adult population work for wages, and in giving them a living chance, we benefit them as well as the capitalist who invests his money, and also the farmer who owns his own farm and who raises the food that both classes require. This policy recognizes the principle that "the people constitute the State," which notable fact our friends of the for-revenue-only school seem to overlook when they introduce measures that would, lower the wages of much the larger class, and also indirectly injure the in- terests of the other. The Effect of Common Schools.— The most striking con- trast between the advantages the American workmen have, when compared, for instance, with those of the British Isles, is in the former's surroundings and comforts, and in his family, as all his children are freely taught in the public schools. These in the North have been in existence and patronized for generations, and thus the native born adults of that section, under this influence, appreciate an educa- tion that prepares them to perform their duties as citizens. Seldom, perhaps never, do we find persons thus educated 16 OUR TARIFF. willingly become paupers, as is so often the case in England If we wish, therefore, to induce a willingness on the part of our workpeople to become such, we must abolish our public schools and bring wages to the requisite low point. It is worthy of note that owing to this same influence, our natives, those whose parents, and frequently grandparents, have been native Americans, differ in their characterestics from those of other antecedents. They may be poor, but there is no cringing in their natures ; they have self-respect, though they may not be as well off as their neighbors. Observe a group of children of such parentage in our coun- try schools, and while there are many discrepancies in point of wealth between their parents, yet they meet on an equal- ity, and there is scarcely any, if at all, a perceptible feeling of caste among them. The farmers nearly all own their farms and cultivate them by their own labor, and are the more respected because they are industrions and temperate. An Englishman's Yiew.— Owing to these schools our work- people are more than usually intelligent, when compared with the workpeople of Europe. Observant foreigners have commented on this characteristic of the native born Ameri- can mechanic. Says an English writer and manufacturer, the late Mr. Alfred Field, of Birmingham, England, 1 4 the greater intelligence, versatility, and adaptiveness of the American workmen, their freedom from rules of trade, their readiness, not merely to adapt but profusely suggest new ideas, patterns, and improvements, enables them to supplant the products of British manufacture." Again, u It is this superiority of the American workingmen that causes their productions to supersede ours. . . . That just in pro- portion as an article offers an opportunity by altering its shape, lightening it, making it look stylish, or introducing machinery into some of the processes of its manufacture, or by some direct action leaving out unnecessary work, in short by putting brains into it, just in this proportion the American article supersedes the English." The reason that American workmen " put brains into their work" is be- PROTECTION FOR THE WORKPEOPLE. 17 cause they are more self-respecting and independent, better educated, and are taught to think for themselves. Their only prejudices are in favor of the usefulness of the object in hand ; they exercise their reason as well as their hands, hence they become skillful workmen, and are more apt to notice improvements, whi?e suggestions with them soon become subjects of experiment, and, if successful, a perma- nent advantage. This superior excellence is due to their having been taught in our public schools; while the latter are striving more and more to give elementary instruction in mechanics, so that the children, in addition to their ordi- nary book learning, may have as far as possible trained hands and eyes, and thus be better able to fill their sphere in life, whether they work in factories or otherwise. This requiring a certain amount of education among those who work in factories has the tendency to make that class of labor more respectable than it is even at present. Interest and Duty.— It is under all circumstances for the interest as well as the duty of the man who works for a liv- ing to vote intelligently and in such manner as to secure as fair wages as he can; yet it is strange that multitudes of the workingmen of the United States give their suffrage for that political organization which by its crude legislation has been — of course not designedly — an obstacle, to-day as well as previous to the civil war, to the development of the re- sources of the country and our mechanical industries. The latter's great progress was brought about before that period by the energy of the people themselves in spite of this mis- guided interference ; the difficulty seems to have been the lack of comprehensive views of statesmanship on the part of the leaders of that day. 2 I 18 OUR TARIFF* ni. Advantages to be Transferred. With a free and open competition in the markets of their own land and in those of the outside world, the American manufacturer need not fear, if the cost of production could be equalized. It is often urged by the opponents of a tariff thus adjusted that our successful inventions of labor-sav- ing machinery should enable us to have free trade or nearly so, and these gentlemen even argue that our more intelli- gent workmen can thus be able to compete with the low wages paid in Europe. What advantage can the American people gain by this? Let us look at what this statement means when stripped of its plausible humanitarian theory. Here it is assumed that free trade would confer upon the American people a vast benefit. We may in due deference ask in what respect? Is it because the $800,000,000 worth of merchandise, on an average, annually imported is to come into the country without paying duty or tax, and the rev- enue derived from this source be thus sacrificed, while the funds for the current expenses of the National government must be otherwise provided? Why shall not this class of mercantile property pay tax and aid in supporting the government as well as real estate? Meanwhile, instead of aiding to supply their own wants, our skilled mechanics and workpeople generally are to stand idle or work for wages equally low as those paid in Europe. And all this in order to put in practice the theory of certain professors of political economy and self-constituted experts. It is acknowledged that our inventions of machinery or improvements upon that which is foreign, enables us to ac- complish by its means much more than could be done by ADVANTAGES TO BE TRANSFEBBED. 19 hand labor. Here is an advantage legitimately due to our own efforts, but our " exclusively "or " for revenue only " friends demand that we virtually surrender this advantage —and to whom would they have us transfer it? Would it not be to the foreign manufacturer? Certainly not to those whom he employs. Statistics, for illustration, show that not- withstanding the enormous increase of wealth in England for the last quarter of a century, the wages of her work- people have not by any means increased in the same ratio. The Rational Policy.— How much more rational is the policy that would transfer a certain portion of European skilled workmen to our own country, rather than to hand over the advantages of manufacturing to the foreign capi- talist, as would be tho result of our adopting the policy of low wages. This transferrence of skilled workmen to our shores is one of the good effects of the tax or tariff on prop- erty in the form of foreign made articles, that we ourselves could produce. Foreign manufacturers on this account often transfer their machinery and appliances to the United States, and make on our own soil the articles we need and would otherwise have to purchase abroad. They bring with them numbers of skilled workmen, who remain as citizens and teach our native born who may be employed in such factories — the latter also becoming skilled in the art. In three respects these advantages accrue to our own people; the first , in their obtaining employment in the mills thus established ; second, to furnish these workpeople with bread and meat, becomes the province of the western farmer, while the produce merchant and the market gardener in the vicinity supply them with other household provis- ions; and third, the articles thus made are equally good and under the circumstances equally cheap. It is evident that the benefit that accrues to the public of having these essential articles and of common use made on our own soil, and by our own workpeople, far outweighs in importance the advantage that would even accrue to the Nation at large on the supposition, that these articles were made abroad and 20 OUR TARIFF. paid into the United States treasury the usual import duty. This statement, as a general rule, does not apply in the case of high-priced goods, that have required in their production great skill and experience, for in these two requisites in such manufacturing we are as yet lacking. Such classes of mer- chandise are purchased by the comparatively rich few ; the tariff on such articles being judiciously high, the duty de- rived from them furnishes a great proportion of the revenue for the support of the National government. The Transfers.— Of the many instances that might be noticed in which manufacturing establishments have been in part transferred from Europe to this country, we will mention only three, as they happen to be in the same line- that of flax thread and that of cotton thread, the former represented by Barbour Brothers, and the latter by two firms, Clark & Co. and Kerr & Co., the former from Ireland, the latter two from Scotland; the first two are located at Paterson, New Jersey, and the last at East New- ark in the same State. These firms found it to their advan- tage to transfer their spinning and reeling machinery to this side of the Atlantic, and also a portion of their skilled work- men, and to make on our own soil a portion of the thread which they would hereafter supply to the American peo- ple. These firms employ altogether in their mills more than 2,000 persons, not counting those who are employed incidentally. They pay their employes living wages, so that what they would have to pay in the form of tariff, before entering the American market, on their thread, if made abroad and imported, goes to those whom they em- ploy here— our own working people— and thus the cost of thread production is equalized in the United States and in Great Britain. Mr. Ira C. Davis, superintendent of the mills belonging to the last of these firms, Kerr & Co., writes: " We import the yarn from our Paisley (Scotland) mills, and the only process of manufacture we carry on in the United States is the winding of the thread on the 200 yards spools." " If the ADVANTAGES TO BE TBANSFEBBED. 21 tariff is not taken off, we may, perhaps, spin and twist in this country— that is, manufacture our thread in all the processes from the raw Sea-Island cotton." Again: "Of course if 200 yards spool cotton could be imported into the United States free, we could not manufacture here, unless we had factories, machinery, and wages at the same cost as in Paisley. We are paying, as nearly as possible double the wages here that we pay in Paisley." 22 OUR TARIFF. TV. England Wishes Free Trade. England has one reason for adopting free trade with other countries that does not apply to the United States, and that is in relation to her supplies of food for her workpeople. Yet, in her own market, her own food producers, if they had only land enough, could compete with the outside world, because of the low wages paid farm laborers. Her land for cultivation is very limited in extent ; so much of it being taken up in hunting grounds and parks around the castles or homes of the nobility. Under this system the great ma- jority of the working people must engage in mechanical in- dustries. It is different in the United States; their terri- tory being so much more extensive, a greater number in proportion are engaged in agriculture than in any other sin- gle pursuit, and what is still more in contrast, it is esti- mated that nineteen-twentieths of American farmers own the land they cultivate. The Homestead law was designed, among other excellent features, to prevent vast accumula- tions of land in the hands of one person or family as it is in England ; we have no law of primogeniture, nor one prevent- ing the creditor from levying on the land for the liquida- tion of a debt. With us great landed estates do not remain in the same family more than one or two generations — wit- ness the entire breaking up into moderate sized farms of the great Straughn plantation in the State of Illinois, at one time said to have been the largest in the Union. The Comparison.— -In the United States— not including Alaska— there are (1887) about twenty inhabitants to the ENGLAND WISHES FBEE TBADE. 23 square mile, while to the same amount of surface in Great Britian there are about 287— in England proper 476. In con- sequence the land cultivated in the United Kingdom cannot by any means afford sufficient food for the inhabitants, and it is vastly important for the people at large to have food from outside sources and as cheaply as possible. The latter, as raw material, is as essential to sustain the working power among her employes as coal is to melt iron ore or to gen- erate the steam which drives the machinery in her facto- ries. The low wages paid in England has its source in the surplus of work people incident to an overcrowded popula- tion, and not to free trade, as is sometimes assumed; this state of things is taken advantage of by the employers in order to lower the price of labor, thus enabling the former to compete with manufacturers elsewhere in the markets of the world. This feature of low wages the American law- givers, in defence of their own workpeople, must contend against. The rapid and increasing commercial intercourse between the United States and the countries of Europe has a decided tendency to bring wages to the same level on both sides of the Atlantic, and by a law as stringent as that by which water seeks its level. We see this result to-day in the uniform low wages paid workpeople throughout the countries of Europe, and because they lie near each other. It will only require time and the embodiment in law of the usual theories pertaining to the trade held by our free trade friends to equalize, or nearly so, the wages paid in the United States with those paid on the other side of the At- lantic. Kaw Material Sometimes Taxed.— -England raises only a very small portion of the food her people require, and she treats grain as raw material and admits it free of duty. Her own production of food is so limited, she is compelled to supply the deficiency from abroad, and thus ignore the claims of her own farmers for the protection due their agri- cultural interests. The case of England in respect to the provisions she herself can produce from her own soil, and 24 OUR TARIFF. that of the United States in relation to two important items of raw material — wool and iron ores — cannot be adduced as parallel, as the latter have ample means for supplying both these from their own resources. Our farmers have facilities for producing an abundance of wool, while our mountains and their foot hills abound in iron ores. There may be grades of wool that we cannot raise, and there may be for- eign ores that produce an iron having unique and valuable properties. If there is a class of wool that we cannot raise at all, as a general principle let it come in free or at a nom- inal rate, and we can apply the same rule to the ores — but we are not aware that this is the case absolutely, in either instance. But by all means, let the principle be maintained, that no raw material which we ourselves can supply shall be made less valuable by adverse legislation in admitting a similar foreign article as free, or taxed so low, as to interfere with the home production. Iron ores come from other countries, especially from cer- tain portions of Europe, and can be laid down at our wharves very cheaply, because of the low wages paid for mining and placing them on board the ship in which they are trans- ported in ballast, and at a mere nominal f reight rate. Our iron ores are found in the interior, and to freight them to furnaces located at the seaboard would be expensive, while the latter could receive ore from abroad at a much cheaper rate. This would give the iron-makers thus situated a de- cided advantage over their brethern in the interior. The only means by which to remove this inequality is to impose a tariff upon foreign ores, so as to equalize in all our furnaces the cost of making iron. Difference in Appreciation.— The lack of sympathy for one another among the different classes of the English peo- ple strikes the observer with pain. Labor and trade as oc- cupations are not respected in England as they are in the United States. In the former exists a sort of Anglicised caste feeling — orignating among the aristocracy with royalty at its head— which has little regard for the welfare of those who ENGLAND WISHES FREE TRADE. 25 work for wages. This feeling the middle class of English- men, as they are termed, promoted by what Hamerton in his Intellectual Life (page 424) calls "The pathetic spirit of deference and submission to superiors, which characterizes the English people. The wonder is that the great active ma- jority of the nation, the men who by their industry and in- telligence have made England what she is, should ever have been willing to submit to so insolent a rule as the rule of caste, which, instead of honoring industry, honored idleness and attached a stigma to the most useful and important trades." This influence of caste descends to ranks below the aristocracy, and the one higher despises the next lower; hence there is no, or at best but little, sympathy between the employer and the employed. On the other hand the American manufacturer looks upon those whom he employs as his equals in a political sense, and he has for them a feel- ing of which his English brother is not conscious, as the lat- ter is imbued with this ' ' caste" sentiment, so unknown to the native American. This unfortunate feeling of " caste" is likewise cherished in England because of the union of the Church and State, as between Dissenters and Churchmen, while such feeling has no existence among the American people, who in their church relations are on a perfect equal- ity, each denomination voluntarily supporting its own or- ganization, and not in addition unjustly ta^ed to support a State church. The recognition, also, of political equality is one of the strongest elements in influencing the American employers to treat kindly those whom they employ. The Irishman's Revenge.— Justin MacCarthy, in his sketch of the troubles of Ireland, shows in what manner the man- ufacturing interests and other industries in that island were ruined. English policy did it, by depressing them in pretty much the same way that the adoption of free trade or for revenue only would do here, by lowering the profits to such an extent that capitalists would be forced to with- draw their money and live upon it, rather than lose it by engaging in manufacturing. A similar operation could not 26 OUR TARIFF. affect agricultural products in the United States as it did in Ireland, because in the former the farmers nearly all own the land they cultivate, though in respect to our mechani- cal industries the result, in time, would be virtually the same. Yet, astonishing to say, Irishmen— American natu- ralized citizens — with this example before them of the ruined industries of their native island or that of their fathers, have hitherto voted year after year for those polit- ical leaders, who, though professing to be the special friends of the laboring men, have never done otherwise, when they had the opportunity, than to pass laws whose influence was to injure, rather than benefit, the industries of the Union. If these leaders and theorists are not mis- guided, but are truly in favor of promoting the interests of the skilled mechanic and of those who make their living by the simpler forms of manual labor, how can they consist- ently advocate principles that lead to lowering the wages of that class of workmen to a level with that paid for simi- lar service in England, France, Belgium, and other coun- tries in Europe ? Misrule and Totes.— Does the Irishman really reflect on the condition of his native Isle, whose misfortunes he at- tributes to English misrule ? Does he remember that his- tory tells in what manner the industries of Ireland were first crippled and then ruined by English legislation ? If he really wished to avenge Ireland's wrongs, his most effect- ive means would be through the medium of the United States, the chief rival of England in commerce and in man- ufacturing ; that is to say, he would vote to sustain and promote our own mechanical industries in opposition to those of England, while at the same time keeping up the wages of his countrymen, who work for hire, and have cast in their lot with us. But if he votes as he usually does, he thus far aids his old enemy, inasmuch as the English man- ufacturer has the advantage over the American in the low wages he pays his operatives, and the only remedy for the latter is, either to have a tariff sufficiently high to equalize ENGLAND WISHES FREE TRADE. 27 the cost of production or put down the wages of his own workpeople to a level with that paid abroad. Does the Irishman still wish to aid his old enemy, as he terms the English landlord and manufacturer, by voting in such man- ner as to put our industries in the latter's power ? 28 OUR TARIFF. V. The Two Kinds of Capital. In carrying on manufacturing enterprises, especially on a large scale, two classes of capital are brought into requisi- tion— one much concentrated, the other much diffused. The. first is the money invested, which furnishes the build- ings, the machinery and the raw material to be operated upon, and the wages paid those who perform the labor ; the second is the brain, the skill and the muscle of those who do the manual or mechanical part of the work. The em- ployers own the one class of capital and those employed own the other. The one class is as truly property as the other, and each possessor has an absolute right to the con- trol of his own. According to the economy of civilized society, these two classes of property owners, are mutually dependent upon each other in making their respective capi- tal available in producing incomes, which are in reality of the same nature, though custom calls them by different names— the one dividends; the other wages. There is no less merit in acquiring one class of this property than of the other— both in their acquisition demanded labor of body and mind. Capital ; Whence Derived. — The money capital is the re- sult of labor performed by some one, somewhere and at sometime; it may have been by an ancestor in a former generation, or it may have been by the individual himself, be that as it may, he has an absolute right to its use and the endowments derived therefrom; the workingman's cap- ital has also been acquired by hard labor, but by the owner himself, because it is of a nature that cannot be derived THE TWO KINDS OF CAPITAL. 29 from an ancestor or a friend. God has given him brain and strength of muscle, while his own merit consists in his cultivating them both by correct moral habits and labor, making his capital proportionately available and valuable. In one respect he stands upon higher ground than he who merely inherits wealth, as he has acquired his capital by his own exertions. As one class of capital— money— can ac- cumulate from time to time, so can skill by a different pro- cess acquire force from one generation to another, as each succeeding one avails itself of the experience and teaching of the past. This is evident from the fact that mechanical skill, especially among American workmen, increases so rapidly that what seems remarkable for its proficiency in one generation is often deemed crude and almost useless in the next. There is no more interesting subject for our statesmen or political economists to investigate than this progress of the arts of manufacturing, as it pertains not only to our own invention, but also to the acquisition of skill by our individual workmen. The Two Investments.— The parallel may be drawn still further. If the money— one class of capital— is not invested in some way the owner cannot derive from it a dividend ; and if the other's capital — his skill, his brain and his muscle — is not invested; that is, if he does not work, he will re- ceive no wages. The former has this advantage, that if he does not invest his money in business, he can live upon it ; but the latter can invest his capital only by individual ex- ertion or working ; he cannot put it out at interest or live upon it alone. It thus follows that the opportunity afforded the working people for employment is far more important to them than to any other portion of the community. The proprietors of manufacturing establishments, in addition to their capital, give the aid either of their own skill and ex- perience or pay for that of others, in order to develop their money investment. In proportion — if it can be thus rated — to the money value of the workmen's capital, their skill and muscle invested by them, is not the percentage of 30 OUR TARIFF. their dividends equally large if not larger ? In the cost of manufactured goods in the United States, 85 to 90 per cent is due to the high 'price of the labor bestowed upon them, while in Europe owing to the low rate of wages — an average of about one third of what the American capi- talist pays— the labor cost of the manufactured article is only about 25 or 30 per cent. Distribution of Wealth. — In connection with the feature of the subject just mentioned, the following summary may be of interest. According to statistics adduced, it is esti- mated that the wealth of the United States is $50,000,000,000, while that of Great Britain is $40,000,000,000. This would average to each inhabitant of the United States (1884) about $875, and to each one of Great Britain about $1150. The same authority states that of the " wealth of the United States 72 parts go to labor, 23 to capital and 5 to govern- ment, while in Great Britain 41 parts go to labor, 36 to capital and 23 to government." There must be a reason for the difference in this distribution of national wealth ; is it not because of the higher wages paid in the United States that out of every $100 of this wealth 72 accrue to labor, more than three times as much (23) as accrue to capital, while because of comparatively low salaries of officials only 5 per cent goes to the government. On the other hand, in Great Britain, because of low wages, 41 parts go to labor; 36 to capital, because taking advantage of an overcrowded population it demands and enforces low wages, while 23 parts go to government in order to sustain the dignity of royalty and the corresponding heavy expenses. Standing Armies.— Another feature is worthy of mention. In Europe the combined standing armies of all the States under the names of empires, kingdoms, or republics, num- ber about 4,000,000 men. These armies earn nothing, and are supported by the unremitting toil of the laboring mil- lions, and in addition about 10,000,000, are known as a re- serve force, the latter, though now in civil life, having THE TWO KINDS OF CAPITAL. 31 served a number of years in the regular army to the detri- ment of their industrial habits. The United States has an army of nominally 25,000 men, who ordinarily are sup- ported by funds derived from import duties. The armies of Europe are used to maintain the balance of power be- tween the different nations and to watch each other, and keep a few crowned heads on their thrones, and every branch of their families in stations of luxury and idleness. The army of the United States is scattered all over the country in little groups, either doing garrison duty on our seaboard, or on the frontiers watching Indians and keeping them in order. The Farmer's Grievances.— The advocates of the " exclu- sively or for revenue only" theory, ad