The perpetual conflict: How the American tariff system transforms protection into patronage

“ The title of the Tariff Act of 1922 (42 Stat. 858) , of which section 315 is a part, is 'An act to provide revenue, to regulate commerce with foreign countries, to encourage the industries of the United States, and for other purposes.' Whatever we may think of the wisdom of a protection policy, we cannot hold it unconstitutional.
So long as the motive of Congress and the effect of its legislative action are to secure revenue for the benefit of the general government, the existence of other motives in the selection of the subjects of taxes cannot invalidate congressional action. ”

“ If associated, as is usually the case, with the raising of government revenues, the adjustment becomes more difficult, and requires the judgment of experts in commerce as well as in statistical knowledge of industries and government necessities. While in any country the existing tariff is presumed to have been established to meet public need, the fact that there is necessarily a restriction upon freedom of exchange makes it always open to question. The tariff laws, like [pg 214] all laws restricting freedom of action, must always have evident reason for existing. ”

“ A protective tariff so called, is a system of duties levied by the government of a country on certain commodities produced in other countries to prevent their coming into unequal competition with similar commodities of domestic production in such a way as to cripple or destroy the industries implied in the latter.
Free trade is opposed to all those duties, the design of which is to afford any advantage to domestic industry. ”

“ The present phenomenal prosperity has been won under a tariff which was made in accordance with certain fixed and definite principles, the most important of which is an avowed determination to protect the interests of the American producer, business man, wage-worker, and farmer alike. ”

“ The question of regulation of the trusts stands apart from the question of tariff revision.
Stability of economic policy must always be the prime economic need of this country. This stability should not be fossilization. The country has acquiesced in the wisdom of the protective-tariff principle. It is exceedingly undesirable that this system should be destroyed or that there should be violent and radical changes therein. Our past experience shows that great prosperity in this country has always come under a protective tariff ”

“ We have come to recognize in the tariff as it is now constructed, not a system of protection, but a system of favoritism, of privilege, too often granted secretly and by subterfuge, instead of openly and frankly and legitimately, and we have determined to put an end to the whole bad business, not by hasty and drastic changes, but by the adoption of an entirely new principle,—by the reformation of the whole purpose of legislation of that kind. We mean that our tariff legislation henceforth shall have as its object, not private profit, but the general public development and benefit. ”

“ We have seen tariff legislation wander very far afield in our day—very far indeed from the field in which our prosperity might have had a normal growth and stimulation. No one who looks the facts squarely in the face or knows anything that lies beneath the surface of action can fail to perceive the principles upon which recent tariff legislation has been based. We long ago passed beyond the modest notion of "protecting" the industries of the country and moved boldly forward to the idea that they were entitled to the direct patronage of the Government. ”

“ We shall make our fiscal laws, not like those who dole out favors, but like those who serve a nation. We are going to begin with those particular items where we find special privilege intrenched. We know what those items are; these gentlemen have been kind enough to point them out themselves. What we are interested in first of all with regard to the tariff is getting the grip of special interests off the throat of Congress. We do not propose that special interests shall any longer camp in the rooms of the Committee on Ways and Means of the House and the Finance Committee of the Senate. ”

“ I believe that when protection becomes, not a principle, but a privilege and a preference—or, rather, a jumble of privileges and preferences—then the American people disapprove of it. Now, to correct the trouble, it is necessary, in the first place, to get in mind clearly what we want, and, in the next place, to get in mind clearly the method by which we hope to obtain what we want. What we want is a square deal in the tariff as in everything else; a square deal for the wage-earner; a square deal for the employer; and a square deal for the general public. ”

“ What the people now propose is a very practical thing indeed: They propose to unearth these special privileges and to cut them out of the tariff. They propose not to leave a single concealed private advantage in the statutes concerning the duties that can possibly be eradicated without affecting the part of the business that is sound and legitimate and which we all wish to see promoted.
Some men talk as if the tariff-reformers, as if the Democrats, weren't part of the United States. ”

“ It is interesting to observe that Taylor brands the protective tariff as one of the evils of Marshall's Nationalist philosophy. "It destroys the division of powers between federal and state governments, ... it violates the principles of representation, ... it recognizes a sovereign power over property, ... it destroys the freedom of labour, ... it taxes the great mass of capital and labour, to enrich the few; ... it increases the burden upon the people ... increases the mass of poverty; ... it impoverishes workmen and enriches employers; ... it increases the expenses of government, ... ”

“ There is not in the works of a watch which will sell for fifteen dollars, raw material of the value of one-half cent. All the rest is labor. A ship, a man-of-war that costs one million dollars— the raw material in the earth is not worth, in my judgment, one thousand dollars. All the rest is labor. If there is any way to protect American labor, I am in favor of it. If the present tariff does not do it, then I am in favor of changing to one that will. If the Democratic party takes a stand for free trade or anything like it, they will need protection; they will need protection at the polls ”

“ The chief obstruction in the way of a revenue tariff are the wages paid American workingmen, and any return to that policy involves a reduction of the cost of labor. We cannot afford to have cheap labor in the United States. Cheap labor means cheap men and dear money. I would rather elevate and improve the condition of my fellow-citizens than increase the value of money and the power of “money-bags.” This is a republic 3282of free and equal citizenship. The government is in the hands of the masses, and not of the few. ”

“ Free trade, or a revenue tariff, will, of necessity, shut them out. It has no respect for labor. It holds it as the mere machinery of capital. It would have cheap men that it might have cheap merchandise. With all of its boasted love for the struggling millions, it is infinitely more interested in cutting down the wages of labor than in saving twenty-five cents on a blanket; more intent in reducing the purchasing power of a man’s labor than the cost of his coat. Things are not always dearest when their price is nominally the highest. ”

“ At all hazards, and no matter what else is sought for or accomplished by changes of the tariff, the American workingman must be protected in his standard of wages, that is, in his standard of living, and must be secured the fullest opportunity of employment. Our laws should in no event afford advantage to foreign industries over American industries. ”

“ What we desire in a tariff is such measure of protection as will equalize the cost of production here and abroad; and as the cost of production is mainly labor cost, this means primarily a tariff sufficient to make up for the difference 113in labor cost here and abroad. The American public wants the American laboring man put on an equality with other citizens, so that he shall have the ability to achieve the American standard of living and the capacity to enjoy it ”

“ But the infant-industry argument appeals strongly to the enterprise and the speculative spirit of Americans, who like to do all things rapidly and on a large scale. Every village aspires to be a great industrial center. Americans are impatient of the suggestion that things "will come in time"; they like things to come at once.
The "home-market" argument as to freights
3. The tariff develops a home market for the products of agriculture. It has been especially hard to reconcile the farmers in America to the tariff. ”

“ Let it be remembered that twenty-two per cent. of all the laboring people of this country are artisans engaged in manufactures. Their culture has been fostered by our tariff laws. It is their pursuits and the skill which they have developed that produced the glory of our centennial exhibition. To them the country owes the splendor of the position it holds before the world more than to any other equal number of our citizens. If this bill becomes a law, it strikes down their occupation and throws into the keenest distress the brightest and best elements of our population. ”

“ Our fifty million people buy and sell among themselves to supply each other’s wants, and consume a much larger proportion of their domestic products per capita for their own comfort than do the English, French, or Germans. The effects of the tariff in building up American manufactures are shown in the above table, and in the table below are indicated some of the effects on mining, agriculture, and the carrying trade:
Comparatively few of our manufactures are exported, because our agriculture, mining, manufacturing, commercial, and professional classes consume them at home. ”

“ We will select those taxes that bear most heavily upon the people, especially internal taxes, and repeal those. We will maintain the policy of protection by tariff duties just as long as it is necessary to give our people the benefit of a home market, and diversified productions a fair chance in the trade and commerce of our country, but we will not invite into our country foreign importations to compete with and break down our home industries. ”

“ We have enacted a tariff law under which during the past few years the country has attained a height of material well-being never before reached. Wages are higher than ever before. That whenever the need arises there should be a readjustment of the tariff schedules is undoubted; but such changes can with safety be made only by those whose devotion to the principle of a protective tariff is beyond question ”

“ It may be argued that our condition would be better if tariff legislation were upon a free-trade basis; but it can not be denied that all the conditions of prosperity and of general contentment are present in a larger degree than ever before in our history, and that, too, just when it was prophesied they would be in the worst state. ”

“ Capital, freed from the menace of visionary and experimental policies in revenue and finance, emerges from its hiding place and seeks investment in legitimate fields of profitable pursuits; an increasing demand for labor sets in, and uncertain employment and still less certain wages are succeeded by steady employment and gradually increasing wages. Capital and labor shares alike the advantages flowing from a wise and beneficent tariff system, while the nation at large moves on to that proud eminence from which it caught the admiring gaze of an astonished world. ”

“ In all tariff legislation the true principle of protection is best maintained by the imposition of such duties as will equal the difference between the cost of production at home and abroad, together with a reasonable profit to American industries. We favor the establishment of maximum and minimum rates to be administered by the President under limitations to be fixed in the law, the maximum to be available to meet discriminations by foreign countries against American goods entering their markets, and the minimum to represent the normal measure of protection at home. ”

“ I believe in a protective tariff, but I believe in it as a principle, approached from the standpoint of the interests of the whole people, and not as a bundle of preferences to be given to favored individuals. In my opinion, the American people favor the principle of a protective tariff, but they desire such a tariff to be established primarily in the interests of the wage-worker and the consumer. The chief opposition to our tariff at the present moment comes from the general conviction that certain interests have been improperly favored by over-protection. ”

“ The real difficulty in our tariff laws is to avoid unequal and unjust discrimination in the objects of protection, made with a view to favor the productions of one state or section at the cost of another state or section. The dogma of some manufacturers, that raw materials should be admitted free of duty, is far more dangerous to the protective policy than the opposition of free traders. ”

“ In one of them I find it resolved, that “the tariff of 1828, and every other tariff designed to promote one branch of industry at the expense of others, is contrary to the meaning and intention of the Federal compact; and such a dangerous, palpable, and deliberate usurpation of power, by a determined majority, wielding the general government beyond the limits of its delegated powers, as calls upon the States which compose the suffering minority, in their sovereign capacity, to exercise the powers which, as sovereigns, necessarily devolve upon them, when their compact is violated.” ”

“ Now, it will strike you that in these forty years of protective policy, while times of prosperity alternated with times of depression, one thing was constant,—the pressure of the protected interests for higher tariff duties; the ever-increasing demand for more, more; the rapid growth of appetite on eating; four great tariff acts, not counting the war measure, during a time covering one man's active business life, each one thought sufficient at the time, each one found too low after a little while ”

“ There are, in fact, two things which constantly disturb the desired stability. It is not only the natural repugnance with which the great mass of consumers will regard everything that artificially increases the cost of living, but it is also the fact that a protective policy incessantly excites among the weaker class of its beneficiaries a desire for more and more protection, and that this constant pressure upwards brings about endless unrest. The records of our tariff legislation with its rapid succession of changes in rates furnish ample proof of this. ”

“ I have long believed, and I still believe, that the worst evil which has afflicted the interests of the American artisans and manufacturers has been the tendency to extremes in our tariff legislation. Our history for the last fifty years has been a repetition of the same mistake. One party comes into power, and believing that a protective tariff is a good thing establishes a fair rate of duty. Not content with that, they say: ‘This works well, let us have more of it,’ and they raise the rates still higher, and perhaps go beyond the limits of national interest. ”

“ The free trader has in reply to show that a protective tariff is a stranglehold upon all industry. Because, for instance, it renders the capitalist producer immune from foreign competition, it reduces the necessity on his part to improve methods of production; and in so much as his care is for his profits rather than the real development of industry for the good of the social whole, he will tend to remain content with obsolete and antiquated methods of production so long as improvement is not essential to the maintenance of profits. ”

“ The policy of freeing the country from the restrictive tariff will so variegate and multiply the undertakings in the country that there will be a wider market and a greater competition for labor; it will let the sun shine through the clouds again as once it shone on the free, independent, unpatronized intelligence and energy of a great people.
One of the counts of the indictment against the so-called "protective" tariff is that it has robbed Americans of their independence, resourcefulness, and self-reliance. Our industry has grown invertebrate, cowardly, dependent on government aid. ”

“ On this point I read an article in a New York Protectionist paper intended as an answer to the Free Trade argument, that Protection increased the price of goods. The article stated that this was not so: and to prove its position said that the tendency of Protection was to induce people to go into manufacturing who know little or nothing of the processes they were undertaking, but who fancy that with the tariff of from 40 per cent. to 80 per cent. upon foreign goods, there must necessarily be a sufficient margin to compensate for mistakes caused by their inexperience. ”

“ When the margin has shrunk or not visibly increased, unrest and discouragement must follow. There is no doubt that a great number of employers in this country recognize this principle, and thousands of them are struggling to meet it by increasing wages. But there is another duty for us, and that is to keep down the cost of living. And it is this duty which the makers of tariff bills have always refused to face squarely and, as far as the tariff had any relation to it, honestly to discharge. ”

“ But, for the great majority, there is little or no protection for what they produce, but large protection for what they consume. The tariff is principally levied upon woollen goods, lumber, furniture, stoves and other manufactured articles of iron, and upon sugar and salt. The necessities of life are weighted with the burden. It is out of the necessities of the people, therefore, that the money is realized to support the protective system. I say, Mr. Chairman, that it is beyond the sphere of true governmental power to tax one man to help the business of another. ”

“ Is it not evident that the interest of commerce is made secondary to the interest of society generally? Remark that the tariff, in itself good or evil in the financial point of view, engages little of our attention. But, as soon as it acts intentionally with a view to Protection, that is to say, as soon as it develops the principle of spoliation, and ignores, in fact, the right of property, we combat it, not as a tariff, but as a system. ”

“ But, say the newspapers and campaign orators of the “Grand Old Party,” it is the workingman as well as his boss who is “protected”; if it were not for the tariff, our wage scales would be dragged down to the levels of Europe; the labor-sweating foreigner would “dump” his goods on us! Well, Judd, for the workingman to try to improve his condition by a tariff, is as if a man should make himself rich by taking money out of his right-hand pocket and putting it into his left-hand pocket. If you look only at the left side of this man, you will think he is enjoying “prosperity” ”

“ In a time like the present, when a campaign of education on the tariff question is in progress, and when not only the great mass of the people, but many of the supposed beneficiaries of the tariff, are awakening to the fact that prosperity by taxation is not quite what it is represented to be, a book like the present one is a very welcome addition to the current literature of the subject. The protected classes have succeeded in maintaining themselves in the enjoyment of their present gratuities by their appeals to the workingmen to support protection as the sole guarantor of high wages. ”

“ Though we oppose the theory that tariff laws may be passed having for their object the granting of discriminating and unfair governmental aid to private ventures, we wage no exterminating war against any American interests. We believe a readjustment can be accomplished, in accordance with the principles we profess, without disaster or demolition. We believe that the advantages of freer raw material should be accorded to our manufacturers, and we contemplate a fair and careful distribution of necessary tariff burdens rather than the precipitation of free trade. ”

“ If we exact from unwilling minds acquiescence in the theory of an honest distribution of the fund of the governmental beneficence treasured up for all, we but insist upon a principle which underlies our free institutions. When we tear aside the delusions and misconceptions which have blinded our countrymen to their condition under vicious tariff laws, we but show them how far they have been led away from the paths of contentment and prosperity. ”