The tariff made plain; seven short conversations that bring out both sides, proofs cited and academic and popular errors corrected. By Albert Clarke.

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About Google Book Search Google's mission is to organize the world's information and to make it universally accessible and useful. Google Book Search helps readers discover the world's books while helping authors and publishers reach new audiences. You can search through the full text of this book on the web at |http : //books . google . com/ ;'?- V. .THE TARIFF MADE PLAIN. SEVEN SHORT CONVERSATIONS THAT BRING OUT BOTH SIDES PROOFS CITED AND ACADEMIC AND POPULAR ERRORS CORRECTED BY il ALBERT CLARKE, A. M., A'^^^\ Secretary for seventeen years of the Home Market Club, and Chairman of the U, 5. Industrial Commission of i8g8 to igo2. •> > - ^ THIRTY-FIFTH THOUSAND BOSTON, 1906 PUBLISHED BY THE HOME MARKET CLUB ^t^ 1.^ s-7v5r I NDEX. PAGB Blaine, James G. 35 ^ Canada against reciprocity 30 Chamberlain policy 29 — Continued protection why necessary 12, 30 - "^ — Consumers benefited by protection 26 • Cost of living 19 Dingley duties not made high to be reduced by reciprocity . . . •30 Duties, specific, ad valorem and compound . . . . ^ . . 10 ^ —Duties, why high sometimes necessary 21, 31 X>uties, 100 per cent harmless 30 ~-X>uties, w)iy early were low . 22 -^Free Trade makes abnormal prices _ 21* Frye, Wm. P^ . . ' 43 Imports, our large competing • . 20, 64 Industries, interdependence of iS, 19 Infant Industries 6 Labor Abroad 13, 14, 15, 42, 75 Materials, free raw 19 McCleary, James T 76 Ocean freights affecting protection 22 -^ Paradise, working-people's 20, 64 Poem, a Tariff Reformer's Waterloo 69 Prices, how reduced by protection 7> 32 '^ Prices, -^hy lower abroad 23, 31, 32 Protection and revenue only 10 Protection natural S ^ Protection not a temporary expedient 24 Reciprocity defined 25 -^ Reciprocity like special R. R. rates 28 Reciprocity systems in Europe 75 Reciprocity with Brazil 26 Reciprocity with Canada 25. Reciprocity with Germany 26, 27 Revenue only and Protection lO''^ Sales abroad 23, 31, 32 Savings deposits 19, 20 Schwab's ;|(i 2 rail statement explained 31 Steel rails, British and American prices 31 Steel rails, why lower in Canada 32 Sugar, product and prices 27 "^Tariffs defined 9 ^ Tariff revision, sectional demand 32 Tariff, Single or Dual— which 76 Trusts and the tariff 23, 70 Wages in stores and factories . i7» iS Wages, increases of 19 >^ Williams College, false teaching of la Working-people's paradise 20, 64 INTRODUCTION. Beginning in April, 1906, the Bright and Strong Papers were issued in a series of seven numbers and printed in nine languages — English, French, Ger- man, Italian, Portuguese, Polish, Swedish, Hebrew and Armenian — and mailed to addresses chiefly of new citizens in Massachusetts.' Although, as the almanac-makers say, they were ** calculated for the lati- tude** of Massachusetts, they were soon found to be of equal interest in other states, because they deal wholly with a national question, and the only local bearing is by way of illustration. In the course of the months in which they were read as separate papers a very interesting and promising discovery was. made, and that was that the citi- zens of foreign birth had been so rapidly learning the language of their new country that the papers in English which accompanied the leaflets were read and studied, though sometimes with the aid of wife or child who had been edu- cated in our schools. This discovery made it seem expedient, when the demand arose for a consolidation of the papers, to print them in English only, and here they are, reproduced from the original plates. The papers make no pretensions to literary merit or the dignity of a book. The aim was to be simple, agreeable, instructive, and frankly to meet every question and objection. It is this feature which makes the papers so valuable to young men and other new voters. They feel that they have before them both sides of the question, candidly treated. Abraham Lincoln said, " the tariff question will be with us so long as the government stands." The reason for this is that the Constitution provides that all revenue bills shall originate in the House of Representatives and that a new House shall be elected every two years. This makes it and will keep it a politi- cal as well as an economic question. Every voter, therefore, should understand it and he should begin by realizing that it is an American question and not a theory to be squared with British or French text books. The late Professor Bowen of Harvard was right in saying that every important country must have a political economy of its own. The American system is now the policy of every nation except Great Britain and at the recent general election in that country, something like it was favored by 45 per cent of the voters. The subject is too great to be covered briefly, but the short readings here presented give the fundamental distinctions and supply the key by which all its phases can be opened and understood. The Author. or MR. BRIGHT AND MR. STRONG. AND HOW THEY MADE A JOURNEY SHORT BY TALKING ABOUT AN IMPORTANT PUBLIC QUESTION. |AN a train between Boston and Pittsfield, on the 29th day of ^^ November, 1905, two men got into an earnest conversation ' which soon attracted the attention of others. It began by one re- marking to the other : " The train is very full. I suppose most of us are on the way to Thanksgiving." "Yes," replied the younger, "people think they are prosperous." " Well, are they not prosperous ? " asked the other man, who looked like one of those highly intelligent mechanics whom you see all over Massachusetts, who work and think during the day and read or de- bate during the evening, and are often better informed on some sub- jects than even members of Congress. " Isn't the prosperity real and isn't it general throughout the country ? " " It seems so," replied the younger, whom we will call Mr. Bright, " but it is more or less a hot-house growth of Protectionism and therefore artificial." " O-ho ! " exclaimed the other, who gave his name as Mr. Strong, "so you think Protection is unnatural, do you? What is the first thing that any living being does ? Isn't it to seek food and shelter ; isn't it to defend itself against the dangers that beset it on every hand ? The means of protection may be artificial, like houses and clothing, and tariffs, and armies and navies, but the desire and need for pro- tection is the most natural thing in the world." Mr. Bright. — " They may be all right for young things — infant industries — but what did I take Athletics in college for if it wasn't to become self -poised, independent and able to defend myself? Now here is a country with the greatest natural resources in the world, growing crops worth six billions this year, with more than 200,000 miles of railroad, and with industries which are giants — 5 isn't it almost humiliating to think that such a country has to raise a Chinese wall against the weaker nations of the world ? " By this time people began leaving their seats in the car and gathering around the talkers and showing the keenest interest in what was said. Mr. Strong. — " No, not at all; on the contrary, I am proud of a country which shows such achievements and whose people have known enough to adopt and preserve a policy that gives every man an incentive to do his level best. If our infant industries have grown to giants, so have those of other countries. My right arm has wielded a hammer until it is as good as any other man's, but it can produce only about so much in a day. Across the water there are other men who can turn oflf just about as much as I can, and their pay is only about one half as much as mine — sometimes more than that, but often less. Now two of those men can put out more than I can. This enables their employer to undersell my employer unless their's is required to pay for the privilege of selling in our market. He is required to, and that is my protection. Without it, I wouldn't always have work ; my wages wouldn't be much above the European level, and in some lines they would have to come down to the Japanese level ; I couldn't live in a home of my own — in a house with a cellar, and wooden floors, and running water, painted and blinded, with a little lawn and a little garden, with books, and musi- cal instruments ; and without that protection I couldn't spare my wife from the mill to keep that house and to keep the children neatly clothed for school and church. O, I have read all about conditions in other countries and I don't want them introduced here. We wouldn't have had half as many miles of railroad, nor raised half of these great crops, nor seen half of these great factories, if we hadn't kept our natural opportunity for our own people." Mr. Strong spoke like a man in earnest, but he was not excited. He had the calm confidence of one who knows he is right. But Mr. Bright was also a man of intellectual resource, and he returned to the attack with what he considered a knock-down argument. Mr. Bright. — " Are these great crops yours ? Do you get them cheaply ? Aren't you paying a dollar a bushel for potatoes and 47 cents a dozen for eggs ? Isn't the very coat on your back tariff- taxed for the enrichment of the woolen trust and the great range shepherds of Montana and Wyoming and New Mexico ? And have 6 you ever thought that your wages are not real wages, that is, meas- ured by what they will buy ? " " I have thought all about it," said Mr. Strong, " and I have ex^ amined no end of authorities, and if I had time I could prove to you that after I have paid Protection prices for all that my family and I need, I have more money left for the savings bank than any work- man of my class in any other country. And what is true of me is equally true of others. Whether we have protection or free trade, I guess things get pretty well equalized between the classes. I don't believe that either the manufacturers or the farmers get more than their share — that is, as a general thing : there are always some ex- ceptions. But speaking about prices, don't you know that they are governed by the rule of supply and demand ? " " Yes," said Mr. Bright, " that is good free-trade doctrine, but protection makes prices artificial." "Now, hold on a minute," said Mr. Strong. "Protection stimu- lates production, increases the world's supply, and that tends to re- duoe ^rice s. You may look at any of the authentic tables and you will find that goods of all kinds are cheaper than they were twenty- five and fifty years ago. Of course, if you want panic prices, when the bottom drops out of everything, you can get them by introducing free trade, or greatly cutting down duties, for that always paralyzes industry. But when that happens, earnings fall oflf and we haven't much to buy with. And as for the coat on my back, I never owned so good a one before for so little money." Mr. Bright. — "I heard Mr. William Lloyd Garrison say re- cently that he got a suit made in London for less than half the money that a Boston tailor would charge." "Very likely," returned Mr. Strong. "1 am not talking about tailor-made garments, but about goods manufactured for the million. For such, this country beats the world, not only in quality and fit, but also in low prices. Tailor-made suits are exceptional, but the main reason for that is that cutters, journe3anen, stitchers and seam- stresses are all paid in this country twice as much as they are in England." Mr. Bright. — " I am not disposed to dispute that, and it is what makes it hard for refined people of moderate means to live here. The manufacturers, the artisans and the producers of food have got us by the throat." 7 Mr. Strong. — " Do you really think the classes you name are in a great conspiracy to rob their fellow-countrymen ? Most of our Congressmen are what you call ' refined people ' ; why did they make a law to rob themselves ? When you reflect a moment you will see the absurdity of your remark. Most people who are not producing are doing something else — engaged in trade, or banking, or trans- portation, or teaching, or practising the professions. Are not their incomes even higher, as a rule, than those of producers ? The only reason why producers and not others are protected by the tariff is because they alone are exposed to foreign competition." Mr. Bright. — " Mr. Edward Atkinson says, and he proves it by census figures, that only a very small percentage of the people are engaged in pursuits that would even be in danger of suffering from foreign competition. I think he puts it at 9 per cent. So it looks to me as though all the rest are taxed for their benefit." Mr. Strong. — " Mr. Atkinson was mistaken, for he did not in- clude farmers in the list of the protected ; he confined the list to mill owners and their operatives. And he missed the point entirely, for when protection is applied to the exposed places, it is applied to all. It fixes the scale of wages and living for the whole country. When Mr. Atkinson advanced this small percentage theory in a speech before the Twentieth Century Club, a protection speaker answered him by saying, * The tall buildings in Boston are but a small percentage of the whole, but they would be good targets. If a foreign fleet should bombard them, how much business do you suppose would be done in the rest of the city ? * " At this, one of the bystanders said : " I don't want to * butt in,' but I haven't looked into the question at all, and I wish one of you would explain to me what a tariff is and how it is applied." Both said they gladly would, but they were nearing Pittsfield and there wasn't time. By a little further talk, however, they learned that all were going to return the same day, and so they arranged to take the same train, and several others said they also would take it, so as to hear the discussion. They didn't notice that a young man who sat behind them had made notes of what they said, but he concluded to return with them, and that is how it happens that the discussion gets into print. The next installment will follow sooa MR. BRIGHT AND MR. STRONG. THE RETURN JOURNEY — AN INTERESTED GROUP OF PASSEN- GERS LEARNS A PRIMARY LESSON ABOUT TARIFFS AND HOW THEY ARE APPLIED. According to appointment, Mr. Bright and Mr. Strong and the other Thanksgiving visitors met at the station in Pittsfield and took the Berkshire Express train for Boston. "Let us see," said Mr. Bright, "for the information of our young friend here we were to take up in this conversation the question of what a tariff is and how it is applied. If agreeable I will proceed to answer and then, possibly, Mr. Strong will explain the difference be- tween a revenue tariff and a protective tariff, and we will watch each other to see that our definitions are correct." Mr. Strong. — " All right, go ahead, and be sure that I don't get the joke on you that President McKinley got on W. B. Plunkett. I heard it at Adams yesterday and I may as well tell it now, for I expect your description will be so good that I shall have no chance to tell it after you get through." After all had craned their necks to see the beautiful village of Dalton, which they were^ passing, they came back to a listening atti- tude. Mr. Strong. — " The story isn't a tariff story, though the inci- dent occurred between two great tariff men. When the President and members of the Cabinet were Mr. Plunkett's guests, one day they had roast turkey for dinner. Just as Mr. Plunkett had lopped off one wing he was called to the telephone and when he came back he saw that the President had slipped into his place and finished the carving. *You made a good job of that, Mr. President,' said he. *Yes,* replied McKinley, *it is not bad, considering how it was botched in the beginning.' " ( Laughter ) Mr. Bright. — " That is a good story and I am glad you told it before I make a botch of telling what the tariff is. All civilized countries need revenue and they raise a part of it by placing taxes called duties or customs on goods brought into the country from outside. The law for raising this revenue is called a tariff. At each important port and at places where railroads cross from one coun- 9 try to another, there are customs houses, officered by a collector, an appraiser, and such assistants as they need — in fact usually by more than they need — and these officials are required to be familiar with the law, so as to know what duties to collect. The merchant wfio brings the goods into the country is called an importer, and one who sends goods out of the country is called an exporter." Mr. Young — ( for this was learned to be the name of the man who had asked to have the tariffs defined ) — "Is it possible that a tariff can name all the articles dealt in between countries and fix a duty upon each ?" Mr. Bright. — " No, but the principal articles are named and are grouped in lists called schedules, and thus we have the agricultural schedule, the chemical schedule, the iron and steel schedule, and so on, and then the tariff provides that duties shall be placed on ar- ticles not mentioned as near in amount as possible to those on similar goods that are mentioned. Necessarily something has to be left to the judgment and honesty of customs officials." Mr. Young. — "I understand that, now I wish you would explain why some duties are called specific and some ad valorem." Mr. Bright. — " With pleasure. A specific duty is a certain sum per yard, or per pound, regardless of the value of the goods. That is always an easy duty to collect and does not permit of frauds. Near- ly all the duties in European tariffs are specific. Ad valorem means according to the value. If the duty is 20 per centum, that means one fifth of the value of the goods, because twenty is one fifth of one hundred. Therefore, if the appraiser decides that the goods are worth $100, the collector will exact $20 before he will permit the goods to enter the country." Here another gentleman, who said his name was Gray, remarked that he wished Mr. Bright would also explain compound duties. Mr. Bright. — " Again with pleasure. A compound duty is when both specific and ad valorem duties are applied to the same article. For example, 50 cents a yard ( specific ) and 30 per cent, ad valor- em in addition. This is a device of Protectionism and it looks to me like giving the screw another turn." Mr. Strong. — " Now you have stopped teaching and gone to preaching." Mr. Bright. — "I did it on purpose to stir you up, for I had cov- ered the ground assigned to me and now it is your turn to show the difference between a tariff for protection and a tariff for revenue only." Mr, Strong. — "Thanks, and I will try to be as plain and accurate and polite as you have been. A good many people think that high 10 duties mean protection and that low duties are for revenue qnly, but this is not the chief difference. The main distinction between the free trade tariff of Great Britain and the protective tariff of the United States is in the articles that are taxed. The British have customs houses the same as we have and they collect substantially as much revenue on imports according to their population as we collect, but their duties do not protect any home industry, while ours are designed to protect all home industries. " Mr. Young. — "This is puzzling. I can't understand it unless you name the goods." Mr. Strong. — "That is just what I was coming to. Great Brit- ain puts duties mainly on such goods as are not produced in the country and which the people are obliged to import if they would have them. Our policy is exactly the reverse. When we cannot produce goods of a particular kind in commercial quantities, we ad- mit them free of duty, so that our people may get them as cheaply as possible. Neither Great Britain nor the United States grows tea and coffee, but large quantities of both are consumed. Great Brit- ain puts heavy duties upon them, and thus taxes the breakfast tables of the poor just as much as of the rich." Mr. Gray. — " Great Britain also puts a duty on spirits, and yet is a large producer of spirits. Isn't such a duty protective to the British distillers?" Mr. Strong. — "It would be, but to prevent that effect, an excise or internal revenue tax is placed upon the domestic product, large enough to offset the duty on the import, and thus more revenue is raised and, as Mr. Bright said about compound duties, that looks like giving the screw another turn." (Laughter) Mr. Young. — "Do those examples illustrate the whole difference as to other articles?" Mr. Strong. — "They do. Both Britain and America are large manufacturers of cotton and woolen cloths, iron and steel goods, and hundreds of other articles very much alike. Britain puts no duty on them and thus becomes the dumping ground for the sur- pluses of other countries. We put a duty on them so as to raise rev- enue and protect home production. That duty compels the foreign manufacturer to pay into the United States Treasury what he has saved by not paying his work people so much as we pay ours, be- fore he can be permitted to enter our market and sell goods which we can make for ourselves. I think it is right. " Mr. Gray. — "And we protect agriculture and mining in the same way." Mr. Strong. — "Certainly, and thus, as McKinley said, *We have become the first nation in agriculture, the first nation in mining and the first nation in manufacturing.*" Mr. Bright. — "And having become such, have we not accom- plished the object of protection, and can we not now stand up with- out a prop?" Mr. Strong. — " Some of us can and some cannot. I said to you on the way over that while I can produce as much as one man in some other country, I cannot produce so much as two, whose joint wages oftentimes do not equal mine. Thus, without a duty their product could come here and undersell mine and drive me out of employment. To my mind this makes protection just as neces- sary as it ever was. " Mr. Bright. — "In a given case that may be so, but as a whole we beat the world." Mr. Strong. — "Yes, with protection. But if we had not enjoyed protection we would not have beaten the world. In your private business would you throw away an implement which has done you good service and which is now as good as it ever was?" Mr. Bright. — " Perhaps not, but I would keep up with improve- ments. Didn't Gen. Garfield once say that he favored the protec- tion which leads to free trade?" Mr. Strong. — "Possibly he did; he was educated at Williams College, which has been noted for free trade professors; but an Al- lopath might as well say that he favors the practice which leads to Homeopathy. The two systems don't mix. Protection has pre- vented this country from being deluged with foreign goods, and thus we have produced for ourselves. It has cured us whenever tariff reform has made us sick. Here is a speech by the late James G. Blaine, which gives the tariff history of this country, and it proves what I tell you." Mr. Bright. — "I will read it with pleasure. But I think you are mistaken about labor being cheaper abroad than here, considering how much more it accomplishes here." Mr. Strong. — "I would prove what I say if we had time. But here we are, near Boston. Can't we meet again?" At this all clapped their hands, and it was soon arranged to meet at the Wells Memorial one week from that night, and to consider the labor question. Note. — For Mr. Blame's short tariff history, see Appendix A MR. BRIGHT AND MR. STRONG. HOW THE TARIFF PROTECTS LABOR — PRESENT WAGES IN ITALY AND JAPAN — THE CASE OF CLERKS AND SALESMEN. At the Wells Memorial Institute, 985 Washington Street, Boston, which is a place of assembly for various working people's societies, Mr. Bright and Mr. Strong and an augmented number of men who wished to learn more about the tariff, found a suitable room on the appointed evening and their conversation proceeded as follows: Mr. Strong. — "When we separated last week I was going to prove to you that the labor cost of production is not lower here than it is in other countries and on the contrary is much higher. Here is a pamphlet entitled Labor Abroad, which contains a great deal of authentic information on the subject, and, if each of you will read it, he must become convinced that we cannot safely risk our jobs by letting down the tariff bars." Mr. Bright. — "Very likely these statements about wages are substantially correct, but we have three great advantages in pro- duction : ( I ) more fuel and raw materials brought cheaply to our mills, (2) superior organization in working forces and machinery without extra handling, and (3) greater alertness, life, vigor, intelli- gence and ambition on the part of operatives. These combined, in my opinion, make the cost of production lower here than in the coun- tries which compete with us." Mr. Strong. — " As for fuel and raw material, what you say may be true of our Southern States and of some of our Western States, but it is not true of New England. What you say of organization is true of New England, although foreign establishments are rapidly copying our methods and our new machinery, and what you say of our labor is to some extent true, but the English workmen who con- stituted what was called * the Moseley Commission ' and who came over here in 1903 to study our methods, reported that skilled British labor is quite as productive as any that they saw here. I grant that in nervous energy and ambition our workers are ahead of most others, but this is because they live better, drink less, and see a chance to improve their condition. The higher wages, due in part to Note. — The " Labor Abroad " pamphlet is in Appendix B. 13 protection, largely account for this superiority. But if the tariff is so reduced that more foreign goods come in, our employers cannot pay these wages, and then, with employment diminished and hope gone, we shall soon sink to foreign standards. Do any of us want to take the risk ? " Mr. Bright. — " I see that some of the statements in this * Labor Abroad' pamphlet were gathered several years ago. There has been a wonderful improvement in foreign countries since then." Mr. Strong. — " Recent consular reports and other trustworthy data show very little gain in wages, but marked improvement in methods. There is quite a boom in manufacturing in Italy, but a report to our State Department by U. S. Consul Dunning, written at Milan, and speaking of wages in Lombardy, says that, in the dan- gerous work of making matches, < An average wage of eleven cents a day is the pay of girls under fifteen, in factories employing twenty operatives or less ; in large factories of from one hundred to five hundred hands of whom 24 per cent are girls under fifteen, the average girl's wage is only twelve cents a day. The highest earnings of mature factory-women are paid, it seems, in the cotton mills, where work is supplied 265 days of the year, and the pay is but twenty-nine to thirty-nine cents a day. Women tobacco workers in Lombardy work about three hundred days a year, at an average wage of not much over thirty-five cents a day; 12.2 per cent of the women workers as a whole earn fifteen cents a day ; 30.4 per cent from fifteen to twenty cents ; 43.7 per cent earn from twenty to thirty cents and 10.5 earn from thirty to forty cents daily. Only 3.2 percentage of the women earn more than forty cents a day.' These are pitiful wages. Is it any wonder that the willing work- ers of Italy are coming over here in throngs ? " Mr. Bright. — " No, it isn't any wonder. But where does your boasted protection come in ? You keep out the Italian goods by duties ranging from 30 to 85 per cent, and try to make our working people believe that thus they are protected, and then you admit the Italians themselves free, to get away your jobs after they arrive." Mr. Strong. — "After coming here they do not work under Ital- ian conditions, but under American conditions; and they do not get away any job that any man wishes to hold if he is competent to hold it. Besides, when they work here they buy what others produce here. President Lincoln once wisely said: 'Wh^Duyou. import, you _getjlie.gppds, but_.your money goes abroad to pay for them ; when you produce them, you have both the goods and the money. ' More- over, the coming of good healthy immigrants to a vast new country that is full of opportunities is a great benefit Andrew Carnegie, who is a philosopher as well as a philanthropist, estimates that, 14 ^ OF THE UNIVERSITY CF even if they bring no money they are worth to the country $1500 each. So we don't need to protect against them but against the hard conditions that they leave behind." Mr. Young. — " I think I am becoming a protectionist. Besides the low wages in Italy, there are those in Japan. I have just been reading an article in the Boston Commercial Bulletin, of which Governor Guild is the editor. He thinks the real 'yellow peril' is Japanese competition with our manufactures, and to prove it he gives this table of Japanese daily wages : Spinning operatives, men, . $ .i6i Day laborers, . . . . $ .26 Spinning operatives, women, .10 Brick makers, 34^ Weaving operatives, men, . .18 Carriage builders, ... .30 Weaving operatives, women, .11 Paper hangers, 43 Carpenters, 40 Door makers, 40^ Sawyers, 39!^ Wooden clogmakers, . . .23 Matmakers, 43^ Lacquerers, 35^ The editor does not doubt but that American labor is better than that of Japan, but as it costs more than four times as much, after the little soldiers who drove Russia out of Manchuria have got at work in factories, they can send enough cotton goods and shoes here to close every factory in Massachusetts unless we maintain duties high enough to keep them out" Mr. Bright. — " I haven't any fears of Japan or any other country. There is country enough in the Orient to engage all their attention." Mr. Strong. — " For the present, yes ; but their progress in manu- factures in the last fifteen years has equaled their progress in mili- tary science and achievement. Doubtless it is true that the first overflow of their manufactures will be into other oriental countries, mainly into Korea and China; but they will get the trade which we now have there, and when our Southern mills and our Maine and New Hampshire mills lose their China trade, they will have just that much more product to imload upon the markets of New York and Boston and Chicago, and the result will be sharper competition with our New England mills. There is no use in being blind to these great new facts in the world. We have got to compete with that tremendous volume of cheap and efficient labor somewhere, and as the only market which we can surely control is our own, what folly it would be to throw away the only means by which we can control it" Mr. Bright. — " I wish to introduce my friend Mr. Thomas, who has given much study to these questions, and whose views I think you will all be glad to hear". Mr. Thomas was received with ap- plause. He wore glasses and looked like a professor, but he said he was a salesman. IS Mr. Thomas. — " I have listened to this discussion with great in- terest, and I have not failed to notice that you all discuss the ques- tion from the standpoint of labor employed in mills. I agree with the remark made by Mr. Bright on your way over to Berkshire, that you artisans and operatives, with your employers, have got the rest of us by the throat, and are bound to keep us from enjoying the products of foreign cheap labor. Here we salespeople are, a great army, numbering a million or more, working on fixed incomes, com- pelled to pay living expenses which have been greatly increased by your exclusion policy, and by the further exactions of the trades unions, and somehow the more the country prospers the poorer we seem to get." Several in the company applauded this sharp arraignment, but it was not allowed to go unchallenged. Mr. Gray. — "Isn't it easier for you to sell goods when the mills are all busy and labor is well employed ? " Mr. Thomas, — " Yes, but few of us get any more for it, and yout high tariff, coupled with the great demand for everything, has raised prices so that it is harder for us to live. I think protection is a great humbug and we are all being buncoed." Mr. Gray. — " Do you think there would be as much demand for salesmen if labor were not well employed and trade were dull ? " Mr. Thomas. — " I think if we had free trade there would be a greater demand, because then everybody could get what he wants at the lowest possible price, and every merchant would realize that his success depends upon his salesmen. He wouldn't have any cinch ; he must just hustle." Mr. Gray. — " I have no doubt you are a smart salesman, but even you can't sell goods unless there are buyers, and if people are not well employed they cannot be great buyers." Mr. Strong. — "It all comes to this, as the illustrious Thomas B. Reed said in the last article he ever wrote, the ideal condition of society is when everybody is employed. We cannot all be em- ployed if we allow foreigners to make our goods. If we do not earn we cannot buy, and if we cannot buy there is poor business for the merchant and the salesman. The industries of a country depend a great deal upon each other." Mr, Bright. " I should like to go further into this matter of wages and prices. Let us meet here two weeks from to-night and let each bring any facts which he may have." And so they agreed and adjourned. i6 MR. BRIGHT AND MR. STRONG. RELATIVE WAGES OF SALESPEOPLE AND FACTORY OPER- ATIVES—GREAT INCREASE IN WAGES AND IN SAVINGS. Pursuant to adjournment the tariff talkers met, several of them having brought new friends, and the first thing they did was to adopt a rule that it would not be in order merely to denounce a policy, as one had done in the last conversation, but to give facts or reasons, for and against, so that the truth might be learned, for nothing but the truth can stand. Mr. Thomas. — "I accept this rule and will supply what I omitted before. We were talking about salespeople and other unprotected classes." Mr. Strong. — "I do not agree that there are any unprotected classes. You share the general economic condition of the country. Your salaries or commissions or both are higher than salespeople get in any foreign country, generally twice as high. There are, to be sure, many young salesmen who accept small pay while learning the business, and many saleswomen who work for less than factory wages or the wages of domestics, only because they think the work is more genteel, or affords more hope of promotion, but when we had the last Democratic tariff, from 1894 to 1897, many of these people were thrown out of employment, and a charity workshop had to be opened for them and other working women at the corner of Bedford and Kingston streets. This shows that unless the mills prosper the stores cannot, and thus salespeople are protected through the mills." Mr. Thomas. — "But the point I was trying to make is that pro- tectionism and trusts have made the rich richer and created a more luxurious style of living, which the great middle class feel compelled to follow more or less closely, and have raised the prices of necessa- ries, and made a good many things necessary which were hot nec- essary before, and our incomes have not been correspondingly in- creased." Mr. Gray. — " Being a small merchant myself, I wish to answer 17 that It is true that there is always more extravagance in good times than in bad, but we people of moderate means are not obliged to ape the rich. It is true, too, that a great demand raises prices, but the rise in necessaries has been much less than many suppose. Dun's index number shows that for 20 years prior to 1890 the wholesale cost of a year's necessaries for each person averaged $130.55, while during the last seven years, all of them under the Dingley tariff, the average has been only J99. 69. This, to be sure, is a little higher than under the Wilson tariff, (1894-1897), but that was a time of such general prostration that buyers were few and prices were sacrificed. Now as to the compensation of clerks and salespeople, it is higher in the upper grades than the wages of skilled labor in factories. I have seen a table of such wages in 1904, prepared by Chief Pidgin of the Massachusetts Bureau of Labor Statistics, which shows that in stores about 14 in 100 of the employes receive Jio but under ;Ji2 a week, while in factories fewer than 13 in 100 get that much. Of those getting j;i2 but under j;i5, the proportions are 20 in 100 in stores and 13 in 100 in factories. Of those paid j;i5 but under j;2o, the proportions are 13 in 100 in stores and 10 in 100 in factories, while those paid Ji2o and over number 5 in 100 in stores and 3 in 100 in factories. Thus those who handle the goods are paid a little more than those who produce the goods, as perhaps they should be on account of the need of keeping up a little more style. Moreover, most of them have had their wages increased from 20 to 30 per cent in the last six or seven years." Mr. Thomas. — "Mine have not been increased." Mr. Gray. — "I am sorry for that, but you may inquire at any of the leading stores in Boston and you will find my statement borne out." Mr. Strong. — "I for one thank Mr. Gray for his very informing statement. And I would call attention to the obvious lesson of it and that is that all our industries, whether protected directly or indirectly by the tariff, are about equally protected, because they sustain such close relations to each other that you cannot hurt one without hurting the others. Let me give you just one illustration of this. The last Democratic tariff put wool on the free list and heavily reduced the duties on woolen goods. But it made the duties on cotten goods fairly protective. This was because the South had begun to manufacture cottons on a large scale and the South was the controlling portion of the Democratic party. The woolen in- dustry became prostrated, but did the cotton industry prosper ? No, not because the tariff was not favorable to that particular indus- 18 try, but because it could not prosper unless other industries could prosper. There must be general employment and general thrift to enable any industry to sell its product" Mr. Young. — "Is that why you oppose free raw materials?" Mr. Strong. — " That is exactly it. The farmer and the miner are just as much entitled to protection as we are. What is our raw material is their finished product. It often costs them as much labor as our product costs us. Justice requires that it should be protected. Moreover, common prudence on our part requires that they be treated fairly, because they are more numerous than we are and can outvote us as lo to 7." Mr. Thomas. — "I call you back to the question of wages and living. I claim that wages have not advanced as much as the cost of living has." Mr. Strong. — " There again you are mistaken. Bulletin 5 1 of the United States Bureau of Labor for 1903 contains a great array of figures which show it. One table I more particularly recall be- cause it covers my trade. In 13 occupations, — most of them being what you call unprotected — including blacksmiths, painters, machinists and laborers, wages from 1896, under the Democratic tariff, to 1903 under the Republican tariff, increased from 8.5 per cent for boilermakers to 31.2 per cent for carpenters, and there was a similar increase in most other occupations. This was three years ago. Since then the mill owners and the operatives at Fall River have arranged a sliding scale of wages, based upon the market price of raw cotton, which is an advance for all classes over the former wages. Last January the American Woolen Company granted a 10 per cent advance to its 30,000 employes and this was soon fol- lowed by 29 other woolen companies, the total increase being ^1,500,000 a year. The Massachusetts Census, taken in 1905, shows that the number of persons employed in manufactures in this state had increased 11.45 per cent and their wages had advanced 19 per cent in the last five years. Did you ever hear of anything like it? I am amazed that anybody should complain in this state and seek to change a policy that produces such wonderful results, and I appeal to all my fellow workmen to vote for the candidates of the Republi- can party which gave us this beneficent tariff law." Mr. Thomas. — " But this inflation that you call prosperity makes people extravagant and they cannot save as they could in more nor- mal times." Mr. Gray. — " They could if they would, and most of them do. The number of depositors in savings banks in this country has in- 19 creased from 5,201,132 in 1897, the year the present tariff was enacted, to 7,696,229 last year. The amount of the deposits has increased in the same time from $1,983,413,564 to $3,093,077,357 I Is it not wonderful ? Why, Brother Thomas, as the man in the play said, * you ain't nowhere ' ! But, gentlemen, I brought with me a friend, Mr. Welch, who would like to say something just here." Mr. Welch was received with applause and he said : Mr. Welch. — "I thank you gentlemen, and I am pleased to have a chance to take part in this conversation. I came from Wales and I take my old home paper, The Western Mail, of Cardiff. I have here a little vest pocket pamphlet made up of extracts from letters written by its editor when he visited this country. They show how much better off the working people and the middle classes are here than over there and I think you will take pleasure in reading it." Mr. Gray. — "I have read that little pamphlet and it amused me to see how the editor squirmed over his life-long belief in free trade. If free trade were right, he could not understand how people were so much more prosperous under protection. By the way, the dis- tinguished Thomas B. Reed quoted that pamphlet in a speech in Congress. Here is another little pamphlet about Foreigners in Massachusetts. Why have they come here? Because, as that Wales editor wrote, it is a working-people's paradise. It wouldn't be a paradise very long if Congress were to reduce duties, as our Democrats are now demanding. In this same envelope there is an article about the vast quantities of foreign goods that are still admitted, which shows that our tariff is liberal enough now, many think too liberal. The reports of the Government show that last year the imports for consumption were larger in proportion to the population than they had been before for a quarter of a cen- tury, and that the average rate of duty upon them was less than 24 per cent. Why don't the people who clamor for tariff reduction find out these important facts ? " Mr. Bright. — " The tariff has a big free list and it makes the average duty on all imports fairly low, I admit, but some of the du- ties are outrageously high and Trusts take advantage of them to rob the people." Mr. Strong. — "I will try to show at our next meeting that the harm of such duties is more imaginary than real." Note, — The papers referred to above are in Appendix C. MR. BRIGHT AND MR. STRONG. WHY DUTIES NEED TO BE HIGHER NOW THAN ONE HUNDRED YEARS AGO — THE TRUST QUESTION AND CUT PRICES ABROAD. It was some time after the last conversation when the tariff talk- ers met to resume their discussion, and so many brought friends that a larger room had to be secured. The knowledge of their friendly debates had spread into many cities and towns and men were talking about them in all the shops and clubs. Mr. Strong. — " When we were obliged to separate we had touched upon the subject of high duties and Trusts, and I promised to show that they are not so hurtful as many suppose. High and low are relative terms. When only a small quantity of foreign goods comes to our markets, low duties afford sufficient protection ; but when foreign markets are glutted and the owners of goods feel the need of money, imports increase and higher duties are necessary. But tariffs cannot be changed every few months to meet varying condi- tions of tiside, hence the duties should be high enough all the time to protect against dumping at cut prices some of the time." Mr. Bright. — " Now if we only had free trade, prices would find a natural level, like water." Mr. Strong. — " That is a plausible error. They would find the artificial level that might be created for them by foreign bankrupt- cies and hardships of any kind, or by the determination of foreign manufacturers to gain our market and hold it at whatever cost until* they had killed off home production of similar goods." (Applause.) Mr. Bright. — " But in such cases we would get the goods and that would be a great benefit to our people." Mr. sStrong. — " Bankrupt sales and slave labor are not benefits. Suppose such competition should close our mills : could those who had been employed in them buy these foreign goods, however cheap ? You remind me of the man that a homely poet wrote about. As the verses bring out a good answer, I will hand them to you and leave that branch of the subject." Mr. Bright. — "I wish you would explain if you can why it is Note. — The poem referred to by Mr. Strong is in Appendix D. 21 necessary to have so much higher duties now than in the early days of the government. Then the plea was that protection was for * infant industries ' ; now the industries are giants, with full beards, and yet the duties have been more than doubled. If that isn't rob- bery for the benefit of trusts, what is it ? " Mr. Strong. — " I am glad you have made that point. Our first tariff (1789), and later tariffs up to 181 2, were enacted for revenue rather more than protection, although both objects were mentioned. The people were poor then and could not bear much internal revenue taxation. This is one reason why moderate duties were placed on impdrts ; the more imports the more revenue. Another reason was that the wages of labor had not then advanced in this country much beyond wages in Great Britain, France and Spain, therefore high duties were not needed for the protection of labor. Another reason was that ocean freights then afforded a large measure of protection. Alexander Hamilton, the first Secretary of the Treasury, reported to Congress that freights from Europe usually amounted to from 15 to 25 per cent of the cost of the goods. Now they are hardly ^ever more than three or four per cent, and on goods of high value and light weight they are often less than one half of one per cent. In those early days there were no steam ships, and a voyage from Europe took three or four weeks. Now the great ocean greyhounds come over in a week and every cargo is several times the. cargo of an old sailing vessel. In fact, a German ship, called the *Amerika' now lands a cargo at New York which will load ten miles of freight cars. As wages in Germany are less than one half the wages in this coun- try, and as they have modern machinery, ample capital and great mercantile enterprise in that country, how long do you suppose our wages could be maintained in face of such competition unless our duties were higher than those one hundred years ago ?" Mr. Bright. — " Don't we have the same advantage in exporting that they have ? Do not the ' Amerika ' and other foreign vessels carry return cargoes ? And do not our great combinations of c