The protectionist.

This is a digital copy of a book that was preserved for generations on library shelves before it was carefully scanned by Google as part of a project to make the world's books discoverable online. It has survived long enough for the copyright to expire and the book to enter the public domain. A public domain book is one that was never subject to copyright or whose legal copyright term has expired. Whether a book is in the public domain may vary country to country. Public domain books are our gateways to the past, representing a wealth of history, culture and knowledge that's often difficult to discover. Marks, notations and other marginalia present in the original volume will appear in this file - a reminder of this book's long journey from the publisher to a library and finally to you. Usage guidelines Google is proud to partner with libraries to digitize public domain materials and make them widely accessible. Public domain books belong to the public and we are merely their custodians. Nevertheless, this work is expensive, so in order to keep providing this resource, we have taken steps to prevent abuse by commercial parties, including placing technical restrictions on automated querying. We also ask that you: + Make non-commercial use of the files We designed Google Book Search for use by individuals, and we request that you use these files for personal, non-commercial purposes. + Refrain from automated querying Do not send automated queries of any sort to Google's system: If you are conducting research on machine translation, optical character recognition or other areas where access to a large amount of text is helpful, please contact us. We encourage the use of public domain materials for these purposes and may be able to help. + Maintain attribution The Google "watermark" you see on each file is essential for informing people about this project and helping them find additional materials through Google Book Search. Please do not remove it. + Keep it legal Whatever your use, remember that you are responsible for ensuring that what you are doing is legal. Do not assume that just because we believe a book is in the public domain for users in the United States, that the work is also in the public domain for users in other countries. Whether a book is still in copyright varies from country to country, and we can't offer guidance on whether any specific use of any specific book is allowed. Please do not assume that a book's appearance in Google Book Search means it can be used in any manner anywhere in the world. Copyright infringement liability can be quite severe. 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/| Eic.onPp.aJ- l^arbarD College l^itiirars .J.,JuL.hlaynji-M%cL^iAjL^J!^^ Digitized by QiOO^<<: Digitized by Google Digitized by Google Digitized by Google Digitized by Google THE PROTECTIONIST Devoted to Political Economy Published Monthly — $i.oo a Year VOLUME XXIV May, 1912 to April, 1913, inclusive BOSTON: Published by the Homb Market Club, 77 Summer Street. Digitized by Google / £:conp2.B.7 BOUND MAY t 1913 Digitized by Google Digitized by Google Digitized by Google Digitized by Google THE PROTECTIONIST protection, American-made goods are given an advantage in the Amer- ican market. In the one case, Amer- ican products are subjected to for- eign competition; in the other case they are protected from it. It was a protective tariff, not an equalizing tariff, which built up the cotton in- dustry in the United States, brought about the investment of $822,000,- 000 in cotton mills, and divided $132,000,000 in annual wages among 387,000 wage earners. It was not an equalizing tariff which gave to Massachusetts 158 cotton mills, and led to the investment of eighty-two millions of dollars in cot- ton manufacturing in Fall River, fifty millions in New Bedford, and twenty-four millions in Lowell. Under an equalizing tariff the cot- ton manufacturers of England would control the American market today as they did before protection en- abled American manufacturing to become established. There is a vast difference between a tariff which equalizes the prices of foreign and domestic goods and a tariff which restricts foreign importations in the interest of domestic production; and the New England States will be the first to learn this lesson if a tariff based upon the mere difference in the cost of production should be- come a law. If the President's recommenda- tion that reduction be made on the protective tariff principle is adopted, some other measure of rates than the cost of production must be con- sidered. For example, in this report figures are presented showing the relative costs of completing and equipping spinning and weaving plants in England and the United States. The figures show that the cost of erecting a building is about 40 per cent, greater in this country than in England, the cost of equip- ment for a spinning mill about 70 per cent, higher and the cost for a weaving plant about 50 per cent, higher. Where a mill is equipped with automatic looms, as is more frequently the case in this country, the cost of the looms is at least two and one-half times as much as in a mill equipped with plain looms, as is customary in England. A largely increased capitalization is necessary in this country, and a duty based merely upon the cost of production leaves out of consideration the addi- tional cost of building and equip- ment, on which reasonable dividends must be earned. Manufacturers Absolved The report completely absolves the cotton manufacturers from blame for the high prices of cotton goods, for it shows that in a ma- jority of cases the American prices for plain goods at the mills are somewhat lower than in England Many standard fabrics of simple construction are sold by American manufacturers at a price as low as or lower than that of English manu- facturers. One of the most interesting re- sults of the investigation relates to the different methods of distribution in the two countries. A greater margin exists in this country than in England between the price at which the manufacturer sells his goods and the price at which the consumer buys them. The costs of distribu- tion are greater here and the profits added by jobbers and retailers are larger. The significant fact is re- vealed by this report that it is the jobber and the retailer, not the man- Digitized by Google THE PROTECTIONIST tafacturer, who have benefited most by enhanced profits in the handling and sale of cotton goods. An Erroneous Idea. Tariff changes which will increase the importation of foreign made goods will not bring lower prices to the consumer unless the jobber and retailer reduce their margin of profit and the cost of distribution. To divide the American market with the foreign producer, as would result from any considerable reduc- tion in tariff rates, would mean a great increase in the importation of foreign made cotton goods, now amounting to almost $70,000,000 worth annually, equivalent on a duty paid basis to more than the total production of the 61 cotton mills of New Bedford and Fall River for the year 1909. It is easy to see that this would mean less sale for American- made goods, less work for American operatives, less wages for those who do find employment and the com- plete shutting down of many mills. Is this what the country wants? For this is what the abandonment of the protective policy means. THE ULTIMATE CRITERION OF TARIFF RATES. Bp Joteph Wofifcer, Former Speaker ef the Mm- eaehmeetu Homee of BepreeeittaUvee, The difference in the cost of pro- duction at home and abroad is not practical or sound as the sole cri- terion by which to fix tariff rates. The cost of production is difficult, if not impossible, to ascertain with ac- curacy; it varies in different coun- tries, in different establishments in the same country, and in the same establishment at different times. The reports of the tariff board, al- ready made, have proved, however, that the difference in cost of produc- tion at home and abroad can be as- certained with sufficient accuracy to throw much valuable light on the subject. The chief value in the reports of a competent non-partisan scientific board is that such reports command the confidence of the general public. Therefore, such reports serve as a firm basis for arguments to show the need of protection. They stand as a bulwark against arbitrary and exces- sive reductions in tariff rates. The ultimate criterion of tariff rates is the adequate protection of the home market, nothing more and nothing less. Protectionists would stand for this, but they should not stand, and they should convince the country that they do not stand, for more protection than is necessary. Whatever we may believe to be the economic effect of excessive rates, it weakens our position to prevent the abolition of rates which can be shown to be excessive or unneces- sary. If we act with political wisdom and good judgment in this matter, the protective policy cannot be suc- cessfully assailed. When we come down to the hard facts of the situa- tion, we find that there are few Dem- ocrats who do not wish adequate protection for the industries in which they are directly interested. The policy of protection in this country is perfectly safe. The difference in the cost of pro- duction, as shown by the reports of the tariff board, should be used not as the ultimate and only criterion of tariff rates, but merely as throwing Digitized by Google THE PROTECTIONIST light upon the subject. Other facts may properly be considered — espe- cially the record of imports under any particular rate. Tariff rates must be fixed by Congress in the light of all the facts. Reasonable rates made in the light of all the facts and based upon them are more likely to command the confidence of the country, and so to stand, than the rates made merely as a com- promise between Congressmen rep- resenting various districts. I realize the necessity of reasonable com- promise in legislation, designed to harmonize conflicting interests, and there is a vast difference between reasonable compromise and pure- logging. Now, then, what should be the at- titude of the Republican party at this time? I believe that the Republican platform should announce in no un- certain terms: ist That the party stands for the adequate protection of home indus- tries. 2nd That the party does not stand for any rate which, after proper in- vestigation, is shown to be excessive or unnecessary. 3rd That each rate should stand on its own merit and no rate should be changed until after investigation and report by the tariff board. 4th That the party stand for a per- manent, non-partisan scientific tariff board. THE ABERRATIONS OF A FREE TRADE GOV- ERNMENT. The "Socialist Labor Party" is the first in the field with nominations for President and Vice-President. The nominee for President is Arthur Reiner, a tailor, of Boston, and for Vice-President August Gilhaus, a stationary engineer, of New York. A Study in Psychology. By a Bttidrnt of BngUih PoUtic$, Among the problems daily forcing themselves upon the distracted Brit- ish voter none is more interesting than the apparently guileless query: "What is Free Trade?" Be it re- membered that the implied state of doubt does not rest solely with that overworked newspaper entity, the man in the street, for, if acts count for anything in the way of evidence, highly salaried cabinet ministers are equally in the dark on a subject as- sumed to partake largely of elemen- tary simplicity. What, for instance, is to be made of the circumstance that one of the first legislative performances of the present "Free Trade" ministry was to exempt, by a special statute, labor unions from all financial responsi- bility for their acts ? The Trade Dis- putes Act of 1906 places these or- ganizations in the unique and pro- tected position of being absolved from the pains and penalties under the laws aimed at unlawful con- spiracy; it thus endows them with a free hand, careless of the risks otherwise attaching to their accumu- lated funds, in fomenting and financ- ing industrial warfare. The ques- tion arises: Is this Free Trade? Again, the Patents Act (1907) of this same "Free Trade" government provides for the cancellation of for- eign-owned British patents unless it can be shown that the articles cov- ered by patents are being made in that unprotected territory known as Digitized by Google THB PROTECTIONIST the British Isles — ^where tariffs are anathema and whose Prime Min- ister, blissfully ignorant of the im- pending fate of the Taft-Bryce- Laurier Treaty, took upon himself to celebrate "the obsequies of Free Trade" on the floor of the House of Commons. "A rose by any other name would smell as sweet" — an adage probably gratefully remem- bered by Mr. Asquith when faced by the fact that this legislation has re- sulted in the erection of British fac- tories, with a corresponding weekly pay-roll of British workers, for the production of articles which, but for it, would have continued to flood the country, from abroad, with entire indifference to non-existing Customs duties. Is this Free Trade? Encouraged by such success, this "Free Trade" cabinet found itself impelled — ^the word is used without malice — to higher flights by the re- cent coal strike. If any principle of the Cobden fetish worship might have been regarded as immune from assault at the hands of these idola- tors it was surely the doctrine that labor, in common with every other commodity, should be subject to un- fettered sale and purchase in the open market. Nor was this cher- ished idea of immunity based upon academic beliefs alone; only a few weeks ago, a spokesman of this self- same government opposed as impos- sible a Laborite motion in favor of a minimum wage. Alas! all this has had to go by the board under the exigencies of the situation created by this disastrous strike. Here, as in the case of the Trade Disputes Act, the presence of a large Laborite contingent in the House of Com- mons was doubtless a weighty factor, but does this condone such a decided aberration from Cobdenism or justify the government's reten- tion of a "Free Trade" title? The question will not down: What is Free Trade? And now comes the Irish Home Rule Bill, with its provision that the proposed Dublin Parliament may in- crease the Customs duties by lo per cent, over those prevailing in the rest of the United (?) Kingdom. That this is a purely protectionist provision is shown by the fact that the Irish exchequer will receive no benefit from the added duties, the entire yield of taxation going, under one of the amazing proposals of a fantastic bill, to the Imperial treas- ury, as at present, Ireland to receive a fixed sum (not a proportion) named in the bill. The late Mr. Gladstone was credited, by friends and enemies alike, with a phenom- enal capacity for making himself be- lieve anything that fitted in with the political needs of the hour. Can it be that, in this respect at least, Mr. Asquith has out-Heroded Herod? To repeat the text of this article : What is Free Trade? In a little brochure entitled 'The Tools of Civilization," by Elbert Hub- bard, published by John L. Whiting-J. J. Adams Company, Boston, the growth of the world's tools is compactly stated and economic truths explained. Here are two of them: "If the pen is mightier than the sword, then the brush has the cannon skun a mile," — and "All the guns in the world might be melted up and no more made, but brushes we must have," — and there are others. The good quali- ties of Whiting's and Adams' brushes are not forgotten. This book and others will be sent on request. Digitized by Google - THE PROTECTIONIST TARIFF WORK AT THE CAPITOL. Democratic Senators Move Slowly— Underwood Looking for Delegates— Raw Material Dutiable; Finished Products Free— What Manufacturers Say. Washington, April 25. Neither party is showing any great interest in pushing forward tariflf bills at this time. The Demo- crats in the House waited for weeks for copies from the printing office of the Tariflf Board's report on the cot- ton industry, apparently for the rea- son that they did not want the re- port. Mr. Underwood gave notice that he did not intend to draft a bill on the subject at this session, saying that he was content with the one passed at the last session, and which failed to become a law. He pushed through the old wool bill, and ap- peared satisfied with his attempt at this session to ruin that textile in- dustry, both in the production of raw material and in its manufacture. He is looking for delegates to nominate him for President, hence is not anx- ious now to commit himself further on the tariflf question. The Demo- cratic Senators are apparently indif- ferent as to .whether or not an op- portunity is oflfered in the Senate to pass any of the House tariflf bills. The Democrats of the Finance Com- mittee waited for ten days after the Republicans made their adverse re- port on the metal bill, before calling a meeting to consider a minority re- port. Then Bailey and Martin, the two Democratic leaders, were ab- sent, and a report drawn up by Mr. Williams of Mississippi approving the Underwood bill was adopted. But no one has appeared anxious to call the bill up for consideration in the Senate. Finance Committee Hearings. The Finance Committee goes on industriously giving hearings, first on the metal bill, then on that relat- ing to chemicals, and then the sugar bill, and lastly the woolen measure. Thousands of pages of interesting testimony has been taken, while hundreds of pages are filled with the more or less irritating cross-exami- nation of manufacturers and others by Democratic Senators. Never be- fore has the door been opened so widely to all who want to be heard. A German in the employ of the manufacturers of that country, who could not even speak the English language, was heard with an inter- preter in behalf of low duties for the benefit of his employers. A number of foreign manufacturers and of im- porters have had their say, so that the Democrats can make no com- plaint on that score. No one ex- pects any tariflf bill to become a law at this session, which accounts for the apparent indiflference as to their consideration by the Senate. Raw Materials Dutiable; Finished Products Free. One of the most extraordinary provisions of the Underwood metal bill is that placing raw materials on the dutiable list, and admitting the finished products free of duty, as in the case of machine tools, typewrit- uigitizea Dy vrrOOQ IC THE PROTECTIONIST ers, printing presses, etc., products which require the most highly paid skilled labor to manufacture, the labor cost averaging from 80 to 90 per cent of Ae total cost in many cases. There is no dispute as to the fact that American skilled labor is paid two and three times as much as similar labor in Europe and else- where. The British Government furnished the proof of that fact in the reports of the men whom it sent to this country to investigate the sit- uation. Senator Williams, of Mississippi, who was for years the leading Dem- ocratic member of the Ways and Means Committee of the House, stated at a meeting of the Senate Finance Committee that "whenever any bill puts a man's product on the free list and makes him pay the duty on the things that he has to buy in order to make his product, it is not fair; it is unjust.'' But the Senator goes right on voting for and advo- cating Underwood bills that do that very thing, and drew up the report approving the House metal bill. Stagnati<m Due to Tariff Ai^tation. Some of the manufacturers who have appeared before the Senate Fi- nance Committee have given that body some information that is ap- propriate, if not pleasing to some of the members. Mr. Metcalf, of the Braebum Steel Company of Penn- sylvania, complained of the de- pressed condition of the iron and steel industry. He was asked what was the principal item in which there is a stagnation business, and he re- plied: "The building of cars and railroad equipments. We furnish the fine steel from which the tools are made that are used in producing such arti- cles. The plants are not operated to the extent that some of the news- papers assert. There is stagnation in other lines, such as the mining in- dustry for which we supply a large volume of steel for the making of drills and other equipments. The quarrymg industry has fallen oflf. We made no profits at all last year; and there was nothing set aside for a sinking fund. Ever since the sum- mer of 1910 we have seen very clearly a decided decline in business every time something was started in Washington in the line of an inves- tigation. The proposed revision of the tariflf has had a disastrous eflfect If this bill (the Underwood bill) should by any possibility become a law, I should have to go into court and ask for a receiver for our com- pany; and I should immediately do it, to protect the creditors and stock- holders." Foreign Steel Sold in New England. Mr. Metcalf testified that until the tariflf provided for the manufacture of high-speed steel in this country, it was largely imported; but is now made here, though some of that con- sumed is still imported. The labor is skilled and must be kept together, and if the tariflf were cut, as is pro- posed by the Democrats, that could not be done. He agreed with Mr. Schwab and others as to the disas- trous result that would follow such a reduction. Speaking of steel and foreign products in this country, Mr. Metcalf stated: "The foreign manufacturer of tool-steel sells in this country be- cause he was here first. There is a brand of English steel that is sold today all through New England, which is one of the best tool-steel consuming districts of the country, Digitized by Google 8 THE PROTECTIONIST — brand that was popular and sold there from 25 to 30 years ago, be- fore the American product was es- tablished. That British steel is sell- ing on its reputation. They have kept up the quality, and the men have become accustomed to using it. The question of price will not alone bring the business. We offered to sell in New England the equivalent of that steel at two cents a pound less. I was met with the reply from a manufacturer that he had been using that steel for 24 years, and that he made tools out of it and sold those tools all over the world. He stated that my steel might be just as good or better, but he knew what the steel was that he had been using, and his men knew how to work it, and he had a national reputation for his product and could not take a chance by substituting some other steel. That is the kind of competi- tion that the American producers have to meet. The same thing ap- plies in other parts of the country. The American steel is becoming more firmly established in this coun- try every day. By reason of having been protected by the tariff, the American manufacturers are making a better steel than the English are making, and are gradually getting the trade of this country. But the reduction of the tariff, as proposed by the Underwood bill, would de- stroy the business of the American manufacturer." Watch Manufacturers Protest— Cobden a Poor Prophet The watch manufacturers are nat- urally very much concerned over the proposed change in the duties on their products by the Underwood bill as it passed the House. While there is no danger apparently of this bill becoming a law at this time, be- cause of the practical certainty that the President would veto it, yet it represents the aim, of the Demo- cratic party, and if they should carry the next election, such legislation would go into effect. It is not the worst feature of the matter because all of the Democratic leaders assert that they are not imposing as low duties as they hold to be necessary, for the reason that they have not the full power to put their ideas into effect. If they should elect a Presi- dent, and control both branches of Congress, much more sweeping leg- islation in the way of free trade might be expected. Speaker Clark and Representative Underwood both assert that they do not believe in any protective duty; Mr. Clark says that he has not changed his convictions as expressed in a speech in the last Congress when he favored sweeping away every vestige of a custom house in this country. Even Secretary Mac- Veagh, the present head of the Treasury Department, in a recent speech in New York, not only de- clared his belief in free trade, but asserted that this country was grad- ually reaching the point where free trade would be carried into effect. He holds that this will be the case the world over. In this respect he seems to be a disciple of Richard Cobden, who when he was advocat- ing free trade in England over a half a century ago, declared that every other country would soon fol- low the course of Great Britain in that respect. That seemed to be the belief in England at that time, and Cobden declared that not only would Digitized by Google THE PROTECTIONIST other countries adopt free trade, but that it would greatly promote agri- culture in the United Kingdom as well as the growth of manufacturing industries. MacVeagfa's Mistake in Following Cobden. But instead of other coimtries adopting the British free trade sys- tem, there is not now another im- portant nation on earth that has that system. As to the development of agriculture in the United Kingdom, millions of acres of land under culti- vation when free trade was adopted have ceased to be cultivated, and are now devoted to pasture or to waste land. But notwithstanding that ex- perience of the British nation, Sec- retary MacVeagh follows Q>bden in advocating free trade and expressing his belief that it will be universally carried into effect. It is this tend- ency on the part of the administra- tion that is greatly disturbing busi- ness and encouraging the Demo- crats. Many persons who are be- lievers in the protective tariff feel resentful over such speech as that of Secretary MacVeagh, and a some- what similar one delivered recently in Chicago by Secretary Stimson. These persons do not expect to hurt protection by voting a Democratic ticket, yet they feel resentful toward such men as hold important offices from their own party, but do not stand up for the protective tariff. It is this feeling growing out of the ad- ministration's advocacy of the so- called reciprocity agreement with Canada that has caused so much dis- affection in the Dakotas and in Illi- nois and Pennsylvania and in other Republican states. A very promi- nent member of Congress, a very able man, expressed the belief that if the administration had not advo- cated reciprocity of a kind that would benefit only Canada, and was not continuously attacking the tar- iff, the President would be invincible both for the nomination and the election this year. As it is this Sen- ator supports the President, but like many others feels that he is not en- tirely in accord with him on the tar- iff question, which he regards as the most important subject now before the American people. Complaint of the Watch Industry. The manufacturers of watches as- sert that their industry is suffering from the tariff agitation. They are not producing to their full capacity and they are threatened with a tariff reduction which would be very dis- astrous to them. Mr. Spring, of the Waltham Watch Company, says that there are now imported watches running in value from $1,000,000 a year in good times, to somewhat lower figures in bad times, but never below $600,000 or $700,000 a year. He said: "We are running on just as low a basis of profit as we can and maintain the wages we are not paying. If the tariff is lowered, as proposed by the Underwood bill, we have the choice of either materially lowering the wages and preventing our employes from living as they have lived, and do live, or go out of business. We earnestly believe that there is no other alternative. If the tariff is lowered it will cut down our domes- tic production and flood this country with foreign watches, and the result is as certain to follow as that two Digitized by Google lO THE PROTECTIONIST and two make four. We do not want ad valorem duties as proposed by the Underwood bill; we want spe- cific duties as ^ under the existing law. We have in the past few years been able to earn, after makhig a small allowance for wear, tear and depreciation, only 3.3 per cent, on our net tangible assets. This is not taking into account at all tiie value of good will. The average wages of men in our factories is $348 per day, and the average of women, $1.62. We do not have any children in our factory. The Swiss manufac- ture exceedingly cheap. They make watches in their own homes, and then they bring them together and assemble them. Practically all of the employes of the Waltham Watch Company are native bom Ameri- cans, and about 60 per cent, are wo- men. There never has been a strike or any labor trouble in the factory since its organization in 1854. The daily averages wages of a man in the industry in Switzerland is one-third as much as in the United States, and the Swiss watches are the chief for- eign competitors of the American watches. Owing to the decrease in the trade in the domestic market, liie percentage of exports has increased. This foreign market is held strictly on the merits of the watches, and is sought by the company for the pur- pose of rendering it less vulnerable to the periodic depressions which occur in the domestic market. It is essential that we keep our trained, skilled employes together, and for this reason must have a regular sale for our product either at home or abroad. The tariflf rates under the existing law are specific and ad valorem combined. The Underwood bill makes an ad valorem rate with the reduction of 41 per cent, from the tariff collected in 1911. The percentage of the cost of labor en- tering into the manufacture of the watches is from 84 to 87 per cent. That accounts for the larger impor- tations of foreign watches. Should the tariff be lowered, as proposed, it is doubtful if the industry could sur- vive. Prices of watches have been gradually reduced in this country under Ae protective tariff." Imports of Watches Largely Increased. Imports of watches increased 429 per cent, under the Dingley law, and the proposed rate of the Underwood bill is nearly 50 per cent, lower. What the result would be is patent to any sane iman. In 191 1 the im- portation of watch materials, cases and parts, was in value $809,000, and of completed watch movements, $828,734. This is largely the result of importing watches in a "knocked down" condition to evade duties. The different parts are imported and then assembled after importation. Legislation is needed to stop this evasion of the law, but it is not pro- vided in the Underwood bill, while the foundations of the industry as it now exists are undermined. The American manufacturers import a large proportion of the jewels, main- springs, hairsprings and hands, and some of them import dials, and pay duties ranging from 10 to 40 per cent. Without adequate protection on the finished product, the industry cannot survive. The average pay for women in this business in Switzerland, and it requires skilled help, is 80 cents, and for men $1 a day. In Italy, where many watch jewels are made, the pay is considerably less than in Swit- zerland. Adjusters receive the high- Digitized by Google THE PROTECTIONIST II «st pay of any sworkmen in the indus- try. They get as high as $6 a day in the United States, while in Switzer- land the maximum is $2. The ad- vantage wliich Americans formerly had in the use of madiinery has dis- appeared, as foreigners now use the same machinery. The export busi- ness in one year in Switzerland alone amounts to more than twice the value of the entire business of American manufacturers for the same time. Many of the Swiss man- ufacturers have agents in New York to whom they send their goods, making undervaluations compara- tively easy. Then the importation of watciies in "knocked down" condi- tion allows evasion of the stamping provisions of the law of 1909. This enables the dealers to sell foreign made watches as of American manu- facture, and accounts for the increase in 1911 of nearly $300,000 in the im- ports of "materials." The depressed condition of the trade of manufactur- ers in this country is partly due to such practices, and the Underwood bill provides no remedy but makes matters ten times worse. THE FREE SUGAR AND EXCISE TAX BILLS. Robert Ellis Thompson in the Irish World. Sugar is a substance with which even Democratic congresses have dealt tenderly. Partly this was due to the situation of our cane-sugar plantations on the soil of Louisiana, but still more to the fact that Sugar is so little produced in America as to almost entitle it to be regarded as one of those objects of a revenue tax, of which the Free Traders would like to make up our Tariflf. Tea and CoflFee, Spices and tropical produce generally, would be added to the list, until not a duty in the Tariflf would aid any American pro- ducer to hold his own against his foreign competitors. But since 1894, when the Demo- crats last had to deal with the prob- lem, the protective duty on Sugar has led to the development of a Beet Sugar industry in the Middle and Far West, which puts this com- modity oflf the list of substances, on which a tax would yield revenue, and do nothing for American producers. Great sums of capital have been in- vested; costly apparatus has been in- stalled; by-products have been found useful in odier directions. So Sugar is a proper object of Free Trade pro- scription; and Mr. Underwood puts it on the Free List. It would disappear from the list of revenue-yielding articles to the grave disadvantage of the Treasury. Even the Cleveland administration advo- cated its retention on the dutiable list for that reason; but as the TariflF of 1894 changed the duty from specific to ad valorem; and Sugar fell in price, the revenue also fell heavily. The present specific duty makes its importation profitable to the revenue to the extent of between fifty and sixty millions a year. No European Digitized by Google 12 THE PROTECTIONIST statesman and least of all an English premier would venture to throw away so much income, unless he were very certain to have something to take its place. Mr. Underwood and his Commit- tee think they will secure this by an excise tax upon earned incomes ex- ceeding $5,000 in annual amount. He is not sure — ^nobody can be sure — that this will balance what he is throwing away. He is not sure — no- body can be sure — ^that the Supreme Court will tolerate this doing by in- direction what it has already de- clared cannot be done in a straight- forward fashion. But then Mr. Un- derwood is in a happier position than a British Chancellor of the Ex- chequer. He has not to carry on the government and make both ends meet in the national accounts. He has only to define the taxes and let the Secretary of the Treasury make the best of what he gets. The proposed income tax is as un- just as it is absurd. It is to be paid by those who are earning incomes, doing the work of the country and bearing its burdens. But the man who draws an income from real es- tate, and spends it in luxurious clubs and yachts, is to pay nothing. "The Idlers of the Gold Coast" are to be favored in this way, at the expense of those who are taking risks, spending their strength and serving the coun- try, either in the professions or in manufactures, in transportation or trading. It is a tax on the workers to the exclusion of the idle. Would even England, at its Tory worst, have endured such a tax as this? In fact the British law lays the heaviest tax on the very class of in- comes that Mr. Underwood exempts from his "excise tax." What is an excise tax? Hitherto it has been defined as a tax on the manufacture, or growth, or con- sumption, or use of some article. In what sense can this be called an "ex- cise tax?" If the recipient of an in- come neither uses nor consumes his income, but puts it into a bank, or invests it in insurance stock, is he then exempt from the tax? In American legislation excise taxes have been levied upon whiskey, to- bacco, luxuries and articles com- monly possessed only by wealthy persons. But an excise tax on in- comes is a novelty to both America and Europe. It savors more of a country lawyer making out a brief in a doubtful case, where there are no facts in his favor, than a grave statesman dealing with the problems of national revenue. Nor can it be said that in this case Congress is obliged to adopt this evasive method of surmounting an obstacle to a proper form of taxa- tion, which has been placed in the way by a decision of the Supreme Court. The amendment to make an income tax constitutional has passed a majority of the State legislatures, and lacks but a few additional ratifi- cations to give it force of funda- mental law. Why was it judged im- possible to wait until those addi- tional ratifications were obtained, and a reasonable and just tax on in- comes made possible, instead of hurrying through this unjust and ab- surd tax on those incomes which are drawn from earnings, to the exemp- tion of those which are got by sitting still? Digitized by Google THE PROTECTIONIST 13 The only excuse for Mr. Under- wood is that he has not the least hope of this and his Free Sugar bill becoming laws, and that be is "play- ing for position" in the coming po- litical campaign. He knows that even if the House should carry such a bill over the veto, the Senate will not do so. So to enable the Demo- cratic party to "point with pride" to its congressional record, as proving it unfriendly to the protected "inter- ests," he plays at legislation, and wastes the time for which the Nation pays its representatives to do its work. Even for that purpose the two laws are inexpedient They are a very poor pretense at an eflfort to re- duce that "increased cost of living," on ^ich the Democrats won their last political victories. Sugar, it is true, is an article of universal con- sumption; but its cost is not so great as to make an appreciable difference in the budgets of the people. If it were, it would be easy to diminish its use in any home. It is vastly cheaper than in times most of us can recall, when we paid almost twice as much for brown sugar — that is for Sugar and dirt — as we now pay for pure Sugar in its whitest varieties. But not another article of food has been touched by this legislative gam- ing. The Democratic party goes again before the people without a single step taken to fulfil its prom- ises to reduce the cost of living to what It was a decade ago, unless it be its support of Mr. Taft's Agree- ment for Reciprocity with the Do- minion of Canada. And, if we mis- take not, some of them will find it un[deasant to explain to their farmer constituents why our wheat-growers were to be swamped by Canadian wheat, in hopes that the newspapers might get wood pulp chtBptr than it now is. What sundry RepubHcans of the House mean by voting for these two bills, I find it hard to see, unless they are also playing a game of pretended legislation with reference to the elec- tions of last November. Np doubt some of them feel free to vote for Democratic bills, in the confidence that the President will veto them, and with the purpose of taking wind out of the Democratic sails when the people come to voting. Some of them probably have no principle in the matter, and no intelligent attach- ment to the principles of their own party. These are the most respec- table voters for such un-Republican measures; and they would be still more so if they would but make their way into the party to which they at heart belong. But as for the other "waiters upon Providence," we regard them as fol- lowing a course which leads to po- litical suicide. The American people have small respect for a man who has not the grit to vote in the minority when his principles require him. They like a man who knows where he belong^, and who makes the world see that. They feel as did the London mob, which, while pelt- ing liberal turn-coats, gave Lord Eldon, the hated Tory Chancellor, three cheers because "He never ratted." The best news from Washington is that, with the possible exception of the iniquitous metal bill, there is a slim prospect for tariff legislation at this session; and it is hoped and expected that the President will veto the metal bill if it is put up to him. Digitized by Google 14 THE PROTECTIONIST WORKING AND LIVING CONDITIONS AMONG NORTHERN AND SOUTHERN TEXTILE OPERATIVES. An Investigation Showing in Detail Family Economy Among Cotton Mill Workers. The results of a general investiga- tion of the working and living condi- tions of employes in the cotton man- ufacturing industry in the United States, which was made in the year 1907-8, have been published. The investigation included both Southern and New England cotton mill dis- tricts, 198 mills being investigated, employing in all 81,335 operatives. The investigation furnished much in- formation in regard to the conditions and standards of living of the cotton mill operatives as an industrial group, and a study showing in greater detail the family economy of cotton mill operatives was conducted. Because of the short time which could be devoted to it, it was limited in New England to Fall River and in the South, to Atlanta, Ga., Greens- boro, N. C, and Burlington, N. C. Fourteen families were studied in Fall River and twenty-one in the Southern cities named. Difficulty was experienced in satisfactorily studying particular families that rep- resented the lowest standards among cotton operatives as many of the latter are constantly moving from place to place. This floating popu- lation forms no small part erf the cotton mill workers, especially in the South, and such families nearly al- ways live in poverty. It was impos- sible to obtain information from them in regard to wages and ex- penditures for more than a brief period. This investigation draws attention to the vastly differing conditions in the Northern and Southern mill dis- tricts. In the North, ^ere is no large element of the native popula- tion which furnishes applicants for the lower paid positions in the mills, and to fill these positions the North- em managers are dependent almost wholly upon the immigrants. In the mountain regions of the Southern states, however, is a considerable population, to whom the ready money afforded to them by the wages in the mills, is sufficient in- ducement to lead them to seek this work. So the lure of the mills, reg- ular wages and town life attract the mountaineers of Virginia, North Carolina and Georgia to the mill dis- tricts and they get many things which they never had before, such as ready money, amusements, social contact and comparatively comfort- able shelter. But they and their chil- dren are subject to hours of regular toil under conditions such as they and their ancestors never knew in the freedom and idleness of the open country. The less energetic Southern moun- taineer occupies a cabin hardly better than his pioneer ancestors built two Digitized by Google THE PROTECTIONIST IS hundred years ago, is the testimony of E. N. Vallandingham, who is thoroughly posted on conditions throughout the South. He says that any kind of makeshift serves for furniture, and the family lives on "hog and hominy," with com bread, and game shot by the fathers and boys. The thrifty have chickens, eggfs, niilfc and vegetables. Such as these are physically poor only in that they have little or no ready money. Much of their trade is in barter. Some of the mountaineers still make a warm dark red cloth woven from the wool of their own sheep. Money is what the back country folk of the South have never had. The possible earnings of a man, wife and children seem princely to a people who see no ready cash from year to year. "To the moun- taineer, however, whose ancestors used pehries instead of money, a pos- sible $20 per week as the joint earn- mgs of the family seems a glittering prize and many a father is ready to violate the laws of the state as to the age limit of employment, and cast his boys and girls of ten, twelve and fourteen years into the maelstrom of the mills. To a family accustomed to a two-room log cabin almost bare of furniture, a 'gourd' dipper at the well sweep or the spring and a diet largely of pork, corn meal and hom- iny and molasses, the regularly car- pentered house of the mill town, with bedsteads, tables and chairs, chro- mos, and a daily paper to read, seem nothing less than magnificent. The best of the mountaineers that yield to the oflFer of the mills improve their standard of living, and save money. The worst live upon the earnings of their neglected children and their wives, and waste the family income upon whiskey and the gaming table." This transfer of the motmtaineer to the mill towns introduces an element in our industrial development which has no exact parallel in New Eng- land. Therefore a comparison be- tween the Northern and the South- em mill districts would show many contrasts in wages and conditions of living. The statements following will show how conditions differ in the Northern and Southem cotton manu- facttmng districts: SOUTHERN MILLS. Rent The question of a minimum rent for cotton mill workers is easily disposed of. The mill builds houses for its em- ployes and they are obliged to pay the rent charged, which is always less than they would have to pay if they did not live in a mill house. In some places the rent charged is 75 cents per month per room; in others $1. The 4-room house is the commonest type, so that the families are limited in the number of rooms that they may have as well as in the rent they must pay. The average rent paid by the 1,364 families visited in the general investiga- tion was $44.81 per year. This amount has been adopted as the minimum standard, except in the case of those particular families studied where the actual amounts charged by the mill com- panies was known. Sundries. The term "sundries" in this report is not a vague one to cover incidental ex- penditure. It is limited to soap, starch, bluing, washing powder, brooms and scrubbing brushes. The families spend- ing the smallest amounts on these arti- cles spent between $5 and $6. In addi- tion to the sundries there are a few other miscellaneous articles, such as thread, pins, lamp chimneys, burners and wicks that must be included in a mini- mum standard. A complete account for one family of average size for six months shows an expenditure for these articles of $1.50, or $3 per year. It is believed that no family could get along Digitized by Google i6 THE PROTECTIONIST with less than that. This makes the ex- penditure for sundries and miscellaneous expenses fall between $8 and $9. The sum of $8.50 is adopted. Cost of Pood and Clothing for One Year for Members of a Typical Normal Family^— Minimum Standard. Member of family Food CloChins Total Father l74-^ I18.75 $^-^3 Mother 50.90 9.S5 69.15 Girl 10 years 44.9s 14*83 59*75 Boy 6 years 37.44 10.00 47.44 Boy 4 years 29.97 5.85 35.82 ToUl I247.XI 158.68 $305.79 The Pair Standard of Living— Determi- nation of Pair Standard. The minimum standard is a standard of living so low that one would expect few families to live on it. It will be conceded that a standard of living upon which people are to live must include many things that are not allowed by the minimum standard. It must be a stand- ard that provides not only for physical efficiency but allows for the development and satisfaction of human attributes. Just what is to be included in such a standard depends upon the people to whom it is applicable. Manifestly, a standard that would be considered fair by a laboring man would not appear fair to a financier. Those possessing differ- ent degrees of wealth have come to look upon different things as essential to their manner of life. The cotton mill workers of the South are a distinct laboring class, so distinct that a standard of living applicable to them may not be applicable to other laborers even. These people have come to regard certain things as essential to their every day life. A fair standard to be applicable to them must take these things into consideration. The aim has been throughout not to impose a standard upon the people that is beyond their reach or beyond their ideals. Nothing is included in the fair standard other than what some families have already attained, and all families are striving to attain. Incomes and Their Relation to Standard of Living— Normal Family in Cot- ton Mill Communities. The incomes of cotton-mill families are composite; that is, they are made up of the wages of several workers. The so-called normal family — father, with wife and children dependent upon him for support — is not a normal cotton-mill family. Indeed, this type of family is rare, because it is almost impossible for it to exist. At one mill studied there were only five individuals whose daily wage amounted to $1.25 or more per day. The wages of these individuals were $2, $1.50, $1.28, $1.25 and $1.25. This means that in that community it would have been possible for one man only to sup- port a wife and three young children ac- cording to the fair standard of living, and this would have been impossible un- less he worked 300 days in the year. There was only one other individual whose earnings were sufficient to sup- port a