,T'
'j.
r
2
m
w
p
c'
K
Wr
4
1
'
it?v
KtV
5!.
:
'A 1
!'IJ
'
1"1
HI
U
Jtf
l'J
I'll
'MM
Hi
M
H
por yard to manufacture a cloth which can bo
manufactured abroad for a 'dollar, he asks 'it
upon the theory that the consumer pays the
tariff. If ft tariff of fifty per cont is given for
his protection, and the foreigner pays the tariff
in order to sell in this market, the foreign
cloth can be bought in this country for a dollar,
plus the carriage just as before. How could
the domestic producer expect to compoto with
him under such conditions? If, on the contrary,
the importer buys the foreign cloth at one dollar
and then pays the fifty cents duty, he must sell
the foreign article for a dollar and fifty centSi .
and the domestic producer can then charge a
dollar and fifty cents for his product. That the
consumer pays tho tax ought to bo. accepted as
anaxioni, and it is assumed to be true by pro
tectionists themselves whenever they defend re
bates or attempt to prove that the tariff is a
benefit to the farmer.
' Leslie M. Shaw, late secretary of the treas
ury, in a recent speech, used an illustration in
which he admitted that the burden of the tariff
falls upon the consumer. He was endeavoring to
explain why our manufacturers sometimes sell
abroad cheaper than at home, and, in the course
of his argument said:
. "Perhaps I can make .this drawback prin
ciple clearer by means of an illustration. The
American producer of steel billets has a protec
tion of six dollars and seventy-two cents per
ton r The producer of spikes and bolts has a
protection of thirteen dollars and forty-four
cent's and thirty-three dollars and sixty cents,
respectively. The American Iron and Steel Man
ufacturing company of Lebanon, Pennsylvania,
was paid last year, in round numbers, ten thou
ean,d dojlars drawback on the exportation of
seventy-five thousand dollars' worth of railway
gpikes'and bolts produced from imported steel
billets. This drawback enabled this con
cern to sell seventy-five thousand dollars' worth
of spikes and bolts abroad for sixty-five thousand
dollars and make the same profit as if it sold
at home for seventy-five thousand dollars, it
b'eing impossible to protect the American1 pro
ducer of spikes and bolts in the foreign market
thfclaw authorizes this refund to him on proof
of exportation, with manifest intent that he
shall sell his product abroad that much below
the American market price."
Here Mr. Shaw assumes that the duty on
raw material was paid by the Lebanon corpora
tion, for on no other theory would it be entitled
td-tlie drawback. Not only in this case, but in
the case of all raw material does the champion
of protection regard a tariff duty as a tax upon
the American consumer, for those who draw a
law1 for -the benefit of the manufacturer always
tfcke it-'for granted that he must iay the tariff
tifUmported raw material, and they, therefore,
' give him a compensatory duty on the manufac
tured article. "Why this difference between raw
material and the finished' product? Why do
protectionists confess that a tariff on raw ma
terial is a burden to the manufacturer, and
then, in the same breath, contend t,hat a tariff,
upon the manufactured product is not. a burden?'
There is but one answer to these questions,
lz.i that the protectionist looks at the question
from the standpoint of the manufacturer and is
trying to placate the consumer. This one-sided
view of the subjoct leads the protectionist into
many amusing contradictions. Almost every de
fense of a high tariff presented to a farmer
audience contains two propositions, namely, that
a tariff on farm products increases the selling
price of those products, and that a tariff on
manufactured products decreases tho selling
price of those products. These opposing state
ments are not usually found side by side, but
they are an indispensable part of every exposi
tion of the advantages of protection intended
for the agricultural districts, I have heard emi
nent men assert that the wool-grower received
for his wool the foreign price of wool plus the
tariff on wool, and have heard them contend in
the same speech that the system which com
pelled the manufacturer of woolen goods to pay
more for his raw material resulted in a'reduc
tion of the price of the finished product. Of
course, this would look good, to the farmer, for
ho would first secure a higher price for what
he raised, and then his income would go farther
when h came to buy; but what of tho foor
manufacturer? According to that reasoning
ho would be compelled to pay moro for his wool
and then suffer an additional loss in the sale
of his goods, and yet strange unselfishness
The Commoner.
the manufacturer contributes liberally to tho
campaign fund to force this double disadvan
tage upon himself , while the farmer has to be
entreated each campaign to accept the two-fold
blessing!
When the protectionist appeals to tho
farmer he assumes, as a matter of course, that
the consumer of the farmer's product not only
pays the tariff upon the imported article which
enters into competition with that product, but
that when he buys the farmer's product he pays
the foreign price plus the tariff. This is con
sistent as a theory, .and if it were true in fact
the farmer might feel thftf his pecuniary inter
est would be advanced by the tariff, but as a
matter of fact this argument is deceptive when
applied to the farmer The staple products of
agriculture are exported, and the price of the
part sold in this country is fixed by the price at
which the surplus is sold abroad. There may
be exceptional cases in which a tariff on farm
products may for a short time help the people
in a limited' district, but, generally speaking, the
farmers of the United States are not in a posi
tion to take advantage of the tariff. If they
could combine and raise the price of the home
product to a point equal to the foreign price,
plus the tariff, they might share in the benefits
of the present protective system, but,, as they are
too numerous to combine, the tariff on farm
products is a mockery. If it could be shown
that in some cases an import duty on farm prod
ucts gives a little aid. to a few farmers, the total
benefit received by them would be insignificant
compared with the enormous tax all farmers
must bear because of the tax placed upon the
manufactured products which they buy.
The manufacturers, on the other hand, are
able to add the tariff to the price of their goods,
and they can not make an argument in favor
of a tariff without admitting that they do so
and that they thus compel the consumer to, pay
the tax, whether he buys at home or abroad.
If he insists that he' can not manufacture as
cheaply as the foreigner, arid asks for a tariff
just equal to the difference in the cost of pro
duction, here and abroad, how can. he produce,
under the tariff, ahy better than he 'could with
out the tariff, unless he adds the tariff to the
price of his goods?
As we import manufactured goods, the man
ufacturer occupies a position just the reverse
of that occupied by the iarmer. The farmer
finds his competitor in a foreign market; the
manufacturer finds his competitor in the home
market. As tho importer must pay the duty on
the foreign article, his interest leads him to buy
the home article if it is offered him at a price
no greater than the- foreign i price, with the tariff
added.
If the home product is equal in amount to
the imported, product, and the domestic manu
facturer collects all that the tariff enables him
to collect, then the American consumer pays on
account of the tariff twice as much as the gov
ernment collects. If it is a new industry, and
we import ten times as much as we produce at
home, then nine-tenths of the tax goes into the
treasury under such circumstances; if we pro
duce at home ten times as much as we import,
and the tariff is added to the price of the domes
tic article, then the people .pay ten times as
much as the treasury receipts from that article
show.
The friends of the protective system, contend
that competition at home will reduce prices to
a point where the manufacturer will appropriate
only so much of the tariff as is necessary to
support his industry, and that 'the competition
created by the hew industries -will fead to im
provements ' in method which will reduce the
cost of production, and thus compensate those
who have tertiporarily borne the burden of pro
tection. This was the- argument of Henry Clay.
In his speech of 1832 ho speaks of thfc decline
in the price of various articles under a protec
tive tariff, and concludes: "Such is the wonder
ful effects of jVrotection, competition and im
provement in skill combined." After quoting
other instances of reduction hg says: "This
brings me to consider what I apprehend to have
been the most efficient of all the causes in the
reduction of the prices of manufactured articles
and that is competition." '
At present, competition is to a considerable
extent stifled by the trusts, and yet,' even with
this regulator competition disabled, there is
no disposition among the "friends of the tariff"
to inaugurate or consent to a reduction. In
VOLUME 7, NUMBER S
many instances the manufacturers sell abroirt
at a low price in competition with the world and
sell at home at a high price because the tariff
wall enables them to do so.
XXX
"DOORS" THAT OPEN
The Sioux City (la.) Journal was visited
recently by a disastrous firei Other newspaper
publishers rushed to the aid of their distressed
neighbor and their plants were offered in order
that the Journal might appear regularly. Every
where the keenest sympathy was shown and
everybody -friend and foe tried to lend a
hand.
That is an American characteristic and
thank God for it in time of trouble.
In concluding an editorial relating to the
fire Mr. Perkins, the veteran editor of the
Journal says: "If the editor of the Journal
may be excused he will indulge in a more per
sonal word. He is now in the thirty-ninth year
of his Sioux City life and work. All these years
have been passed in the. company of the Journal.
The retrospect is filled with,the faces of friends
many present and many gone. Ho has many
times had occasion to acknowledge his debt to
these friends, and he gladly renews acknowledg
ment now. The -fire dipped into things ma
terial and it lit up things which are as the stars
in heaven. If the time shall come when a neighbor-
is in' like stress he knows he would throw
open his doors as the doors of these neighbors
have bden opened to him. With this assurance he
tlianks them each and all those who have
buildings and plants, and those who have only
the doors' of their hearts. There is nothing so
bad as it might be, and'' it is wondrous good
that compensation comes quickly to the place
of trouble. It is a delight to affirm this in the
midst of water-Soaked stuff and a roofless
home." "J
That is a large contribution to the music
of the world. To be in duty bound to say it,
and tobe able to say it, and, to feel it and
for the' world to hear it' and appreciate it is
worth, almost, several fires.
Energy and enterprise "in the midst of
water-soaked stuff and a roofless home" is an
American characteristic and to this fact is due,
in part, the great progress our "country has
made. But the ready opening of doors by
"those who have buildings and plants and those
who have only the doors of their hearts" tha'
in the hour of a neighbor's tribulation is also
an Anierican characteristic.
' "Faith, hope and love!" And the last that
mighty power that throws open the doors of
men's hearts the last is' by no means the
least; '
oooo
; STOP THE GAMBLING
There seems to be no doubt that Wall
Street speculation is the cause of the present
financial panic, and this speculation is made
possible by the fact thata large amount of ficti
tious and watered stock is issued. The small
bankers throughout the country claim that their
institutions are perfectly solvent, that their as
sets are good and that their only embarrass
ment is that they can not collect the money
which they have deposited in eastern banks
in the reserve cities. In suspending payments
the bankers have done what they think is neces
sary for the protection of themselves and their
depositors, and it is not fair to criticise them
unless one has a better knowledge of the situ
ation than they have; but somebody is to blame,
and from the evidence at hand it would seem
that the blame rests, first with the speculators
of New York who, in their desire to make money
rapidly, have disregarded the interests of tho
rest of the cduntry; second with the New York
banks and trust companies which have loaned
money for speculation; and third, with the re
publican party whose leaders have linked our
whole financial system to Wall Street so that
the people throughout the country are forced
to suffer for the sins of the masters of high
finance. It requires an object lesson to make
people consider remedial legislation; abuses ar
never remedied until there is, suffering, and tho
present panic ought to result in legislation which
will give to the public a, needed protection.
Gambling is one of the curses of the present
day not merely the small gambling which is
carried on in back alleys and obscure places,
but the gambling which goes on in the chambers
of commerce, the boards of trade and the stocK
exchanges. Purchases and sales of commodities
and stocks when the sellers have nothing to sou
and the "purchasers have no intention of receiv-
i