Chapter IX (2)

The convention which nominated Mr. Lincoln met when the feeling against free-trade was growing, and in many States already deep- rooted. A majority of those who composed that convention had inherited their political creed from the Whig party, and were profound believers in the protective teachings of Mr. Clay. But a strong minority came from the radical school of Democrats, and, in joining the Republican party on the anti-slavery issue, had retained their ancient creed on financial and industrial questions. Care was for that reason necessary in the introduction of new issues and the imposition of new tests of party fellowship. The convention therefore avoided the use of the word "protection," and was contented with the moderate declaration that "sound policy requires such an adjustment of imposts as will encourage the development of the industrial interests of the whole country." A more emphatic declaration might have provoked resistance from a minority of the convention, and the friends of protection acted wisely in accepting what was offered with unanimity, rather than continue the struggle for a stronger creed which would have been morally weakened by party division. They saw also that the mere form of expression was not important, so long as the convention was unanimous on what theologians term the "substance of doctrine." It was noted that the vast crowd which attended the convention cheered the tariff resolution as lustily as that which opposed the spread of slavery into free territory. From that hour the Republican party gravitated steadily and rapidly into the position of avowed advocacy of the doctrine of protection. The national ticket which they presented was composed indeed of an original Whig protectionist and an original Democratic free-trader; but the drift of events, as will be seen, carried both alike into the new movement for a protective system.

A review of the tariff legislation in the period between the war of 1812 and the political revolution of 1860 exhibits some sudden and extraordinary changes on the part of prominent political leaders in their relation to the question. The inconsistency involved is however more apparent than real. Perhaps it would be correct to say that the inconsistency was justifiable in the eyes of those who found it necessary to be inconsistent. Mr. Webster was a persistent advocate of free-trade so long as Massachusetts was a commercial State. But when, by the operation of laws against the enactment of which he had in vain protested, Massachusetts became a manufacturing State, Mr. Webster naturally and inevitably became a protectionist. Mr. Calhoun began as a protectionist when he hoped for the diffusion and growth of manufactures throughout all sections alike. He became a free-trader when he realized that the destiny of the South was to be purely agricultural, devoted to products whose market was not, in his judgment, to be enlarged by the tariff, and whose production was enhanced in cost by its operation. Colonel Benton's change was similar to Mr. Calhoun's, though at a later period, and not so abrupt or so radical. Mr. Van Buren's shifting of position was that of a man eagerly seeking the current of popular opinion, and ready to go with the majority of his party. Of all the great lights, but one burned steadily and clearly. Mr. Clay was always a protectionist, and, unlike Mr. Van Buren, he forced his party to go with him. But as a whole, the record of tariff legislation, from the very origin of the government, is the record of enlightened selfishness; and enlightened selfishness is the basis of much that is wisest in legislation.

It is natural that both sides to the tariff controversy should endeavor to derive support for their principles from the experience of the country. Nor can it be denied that each side can furnish many arguments which apparently sustain its own views and theories. The difficulty in reaching a satisfactory and impartial conclusion arises from the inability or unwillingness of the disputants to agree upon a common basis of fact. If the premises could be candidly stated, there would be not trouble in finding a true conclusion. In the absence of an agreement as to the points established, it is the part of fairness to give a succinct statement of the grounds maintained by the two parties to the prolonged controversy,--grounds which have not essentially changed in a century of legislation and popular contention.

It is maintained by free-traders that under the moderate tariff prevailing from the origin of the government to the war of 1812 the country was prosperous, and manufactures were developing as rapidly as was desirable or healthful. Protectionists on the other hand aver that the duty levied in 1789 was the first of uniform application throughout all the States, and that, regardless of its percentage, its influence and effect were demonstrably protective; that it was the first barrier erected against the absolute commercial supremacy of England, and that it effectually did its work in establishing the foundation of the American system. In the absence of that tariff, they maintain that England, under the influence of actual free-trade, had monopolized our market and controlled our industries. Finally they declare that the free-traders yield the whole case in acknowledging that the first tariff imparted an impetus to manufactures and to commercial independence wholly unknown while the States were under the Articles of Confederation and unable to levy uniform duties on imports.

COMPARISON OF REVENUE SYSTEMS.

The free-traders point to the destructive effect of the war tariff of 1812, which unduly stimulated and then inevitably depressed the country. They assume this to be a pregnant illustration of a truth, otherwise logically deduced by them, as to the re-action sure to follow an artificial stimulus given to any department of trade. The protectionists declining to defend the war duties as applicable to a normal condition, find in the too sudden dropping of war rates the mistake which precipitated the country into financial trouble. Depression, they say, would naturally have come; but it was hastened and increased by the inconsiderate manner in which the duties were lowered in 1816. From that time onward the protectionists claim that the experience of the country has favored their theories of revenue and financial administration. The country did not revive, or prosperity re-appear, until the protective tariff of 1824 was enacted. The awakening of all branches of industry by that Act was further promoted by the tariff of 1828, to which the protectionists point as the perfected wisdom of their school. Mr. Clay publicly asserted that the severest depression he had witnessed in the country was during the seven years preceding the tariff of 1824, and that the highest prosperity was during the seven years following that Act.

The free-traders affirm that the excitement in the South and the sectional resistance to the tariff of 1828 show the impossibility of maintaining high duties. The protectionists reply that such an argument is begging the question, and is simply tantamount to admitting that protection is valuable if it can be upheld. The protectionists point to the fact that their system was not abandoned in 1832 upon a fair consideration of its intrinsic merits, but as a peace-offering to those who were threatening the destruction of the government if the duties were not lowered. Many protectionists believe that if Mr. Clay had been willing to give to General Jackson the glory of an absolute victory over the Nullifiers of South Carolina, the revenue system of the country would have been very different. They think however that the temptation to settle the question by compromise instead of permitting Jackson to settle it by force was perhaps too strong to be resisted by one who had so many reasons for opposing and hating the President.

A more reasonable view held by another school of protectionists is that Mr. Clay did the wisest possible thing in withdrawing the tariff question from a controversy where it was complicated with so many other issues,--some of them bitter and personal. He justly feared that the protective principle might be irretrievably injured in the collision thought to be impending. He believed moreover that the best protective lesson would be taught by permitting the free-traders to enforce their theories for a season, trusting for permanent triumph to the popular re-action certain to follow. There was nothing in the legislation to show that Mr. Clay or his followers had in any degree abandoned or changed their faith in protective duties of their confidence in the ultimate decision of the public judgment. The protectionists aver that the evils which flowed from the free-trade tariff of 1833, thus forced on the country by extraneous considerations, were incalculably great, and negatively established the value of the tariff of 1828 which had been so unfairly destroyed. They maintain that it broke down the manufacturing interest, led to excessive importations, threw the balance of trade heavily against us, drained us of our specie, and directly led to the financial disasters of 1837 and the years ensuing. They further declare that this distressing situation was not relieved until the protective tariff of 1842 was passed, and that thenceforward, for the four years in which that Act was allowed to remain in force, the country enjoyed general prosperity,--a prosperity so marked and wide-spread that the opposing party had not dared to make an issue against the tariff in States where there was large investment in manufacturing.

The free-traders consider the tariff of 1846 to be a conclusive proof the beneficial effect of low duties. They challenge a comparison of the years of its operation, between 1846 and 1857, with any other equal period in the history of the country. Manufacturing, they say, was not forced by a hot-house process to produce high-priced goods for popular consumption, but was gradually encouraged and developed on a healthful and self-sustaining basis, not to be shaken as a reed in the wind by every change in the financial world. Commerce, as they point out, made great advances, and our carrying trade grew so rapidly that in ten years from the day the tariff of 1846 was passed our tonnage exceeded the tonnage of England. The free-traders refer with especial emphasis to what the term the symmetrical development of all the great interests of the country under this liberal tariff. Manufactures were not stimulated at the expense of the commercial interest. Both were developed in harmony, while agriculture, the indispensable basis of all, was never more flourishing. The farmers and planters at no other period of our history were in receipt of such good prices, steadily paid to them in gold coin, for their surplus product, which they could send to the domestic market over our own railways and to the foreign market in our own ships.

COMPARISON OF REVENUE SYSTEMS.

Assertions as to the progress of manufactures in the period under discussion are denied by the protectionists. While admitting the general correctness of the free-trader's statements as to the prosperous condition of the country, they call attention to the fact that directly after the enactment of the tariff of 1846 the great famine occurred in Ireland, followed in the ensuing years by short crops in Europe. The prosperity which came to the American agriculturist was therefore from causes beyond the sea and not at home,--causes which were transient, indeed almost accidental. Moreover an exceptional condition of affairs existed in the United States in consequence of our large acquisition of territory from Mexico at the close of the war and the subsequent and almost immediate discovery of gold in California. A new and extended field of trade was thus opened in which we had the monopoly, and an enormous surplus of money was speedily created from the products of the rich mines on the Pacific coast. At the same time Europe was in convulsion from the revolutions of 1848, and production was materially hindered over a large part of the Continent. This disturbance had scarcely subsided when three leading nations of Europe, England, France, and Russia, engaged in the wasteful and expensive war of the Crimea. This struggle began in 1853 and ended in 1856, and during those years it increased consumption and decreased production abroad, and totally closed the grain-fields of Russia from any competition with the United States.

The protectionists therefore hold that the boasted prosperity of the country under the tariff of 1846 was abnormal in origin and in character. It depended upon a series of events exceptional at home and even more exceptional abroad,--events which by the doctrine of probabilities would not be repeated for centuries. When peace was restored in Europe, when foreign looms and forges were set going with renewed strength, when Russia resumed her export of wheat, and when at home the output of the gold-mines suddenly decreased, the country was thrown into distress, followed by a panic and by long years of depression. The protectionists maintain that from 1846 to 1857 the United States would have enjoyed prosperity under any form of tariff, but that the moment the exceptional conditions in Europe and in America came to an end, the country was plunged headlong into a disaster from which the conservative force of a protective tariff would in large part have saved it. The protectionists claim moreover that in these averments they are not wise after the fact. They show a constant series of arguments and warnings from leading teachers of their economic school, especially from Horace Greeley and Henry C. Carey, accurately foretelling the disastrous results which occurred at the height of what was assumed to be our solid and enduring prosperity as a nation. These able writers were prophets of adversity, and the inheritors of their faith claim that their predictions were startlingly verified.

The free-traders, as an answer to this arraignment of their tariff policy, seek to charge responsibility for the financial disasters to the hasty and inconsiderate changes made in the tariff in 1857, for which both parties were in large degree if not indeed equally answerable. The protectionists will not admit the plea, and insist that the cause was totally inadequate to the effect, considering the few months the new tariff had been in operation. They admit that the low scale of duties in the new tariff perhaps may have added to the distress, by the very rapid increase of importations which it invited; but they declare that its period of operation was entirely too brief to create a result so decided, if all the elements of disaster had not been in existence, and in rapid development, at the time the Act was passed. The tariff of 1846 therefore under which there had been a very high degree of prosperity, was, in the judgment of the protectionists, successfully impeached, and a profound impression in consequence made on the public mind in favor of higher duties.

PROTECTION IN PENNSYLVANIA.

The question of the tariff was of especial significance and influence in Pennsylvania. Important in that State, it became important everywhere. Pennsylvania had been continuously and tenaciously held by the Democratic party. In the old political divisions she had followed Jefferson and opposed Adams. In the new divisions she had followed Jackson and opposed Clay. She was Republican as against the Federalists, she was Democratic as against the Whigs. From the election of Jackson in 1828 to the year 1860,--a period that measured the lifetime of a generation,--she had, with very few exceptions, sustained the Democratic party. Joseph Ritner was elected governor by the Whigs in 1835, in consequence of Democratic divisions. Harrison, in the political convulsion of 1840, triumphed in the State by the slight majority of three hundred. Taylor received her electoral vote, partly in consequence of dissensions between Cass and Van Buren, and partly in consequence of the free- trade opinions of Cass. In 1854 James Pollock was chosen governor by the sudden uprising and astounding development of the Native- American excitement as organized by the _Know-Nothing_ party. The repeal of the Missouri Compromise aided the canvass of Pollock, but that alone would not have loosened the strong moorings of the Pennsylvania Democracy. Mr. Buchanan recovered the State two years afterwards, and would have held it firmly in his grasp but for the financial revulsion and the awakened demand for a protective tariff.

Dissociated from the question of protection, opposition to the extension of slavery was a weak issue in Pennsylvania. This was conclusively shown in the gubernatorial contest of 1857, when David Wilmot, the personal embodiment of Free-soil principles, was the Republican candidate for governor. Besides the general strength of the Territorial issue, Mr. Wilmot had the advantage of all the anti-slavery zeal which was aroused by the announcement of the Dred Scott decision, with the censurable connection therewith of President Buchanan. Thus an angry element was superadded for personal prejudice and effective agitation. Yet Mr. Wilmot was disastrously beaten by the Democratic candidate, Governor Parker, the adverse majority reaching indeed tens of thousands.

The crushing Republican defeat received in the person of Wilmot occurred on the very eve of the financial distress of 1857. The Democratic canvass had been made while there was yet no suspicion of impending panic and revulsion,--made indeed with constant boasts of the general prosperity and with constant ascription of that prosperity to the well-defined and long-continued policy of the Democratic party. From that time the Democratic party became embarrassed in Pennsylvania. With a tariff of their own making, with a President of their own choice, with both branches of Congress and every department of the government under their control, a serious disaster had come upon the country. The promises of Democratic leaders had failed, their predictions had been falsified, and as a consequence their strength was shattered. The Republicans of Pennsylvania, seeing their advantage, pressed it by renewed and urgent demands for a protective tariff. On the other issues of the party they had been hopelessly beaten, but the moment the hostility to slave-labor in the Territories became identified with protected labor in Pennsylvania, the party was inspired with new hopes, received indeed a new life.

It was this condition of public opinion in Pennsylvania which made the recognition of the protective system so essential in the Chicago platform of 1860. It was to that recognition that Mr. Lincoln in the end owed his election. The memorable victory of Andrew G. Curtin, when he was chosen governor by a majority of thirty-two thousand, was largely due to his able and persuasive presentation of the tariff question, and to his effective appeals to the laboring- men in the coal and iron sections of the State. But for this issue there was in fact no reason why Curtin should have been stronger in 1860 than Wilmot was in 1857. Indeed, but for that issue he must have been weaker. The agitation over the repeal of the Missouri Compromise had somewhat subsided with the lapse of years: the free- State victory in Kansas was acknowledged and that angry issue removed; while the Dred Scott decision, failing to arouse popular resentment at the time it was pronounced, could hardly be effective for an aggressive canvass three years later. If Governor Curtin could have presented no other issue to the voters of Pennsylvania, he would undoubtedly have shared the fate which Wilmot met when he had these anti-slavery questions as his only platform. Governor Curtin gave a far greater proportion of his time to the discussion of the tariff and financial issues than to all others combined, and he carried Pennsylvania because a majority of her voters believed that the Democratic party tended to free-trade, and that the Republican party would espouse and maintain the cause of protection.

PENNSYLVANIA'S INFLUENCE IN 1860.

Had the Republicans failed to carry Pennsylvania, there can be no doubt that Mr. Lincoln would have been defeated. An adverse result in Pennsylvania in October would certainly have involved the loss of Indiana in November, besides California and Oregon and the four votes in New Jersey. The crisis of the national campaign was therefore reached in the triumph of Governor Curtin in the State election which preceded by four weeks the direct choice of President. It would be difficult to compute the possible demoralization in the Republican ranks if Pennsylvania had been lost in October. The division among the Democrats was a fruitful source of encouragement and strength to the Republicans, but would probably have disappeared with the positive assurance of success in the national struggle. Whether in the end Douglas or Breckinridge would have been chosen President is matter of speculation, but it is certain that Mr. Lincoln would have been defeated. The October election of Pennsylvania was for so long a period an unerring index to the result of the contest for the Presidency, that a feeling almost akin to superstition was connected with it. Whichever party carried it was sure, in the popular judgment, to elect the President. It foretold the crushing defeat of John Quincy Adams in 1828; it heralded the disaster to Mr. Clay in 1844; it foredoomed General Cass in 1848. The Republicans, having elected their candidate for governor in 1854 by a large majority, confidently expected to carry the State against Mr. Buchanan in 1856. But the Democratic party prevailed in the October election, and the supporters of Fremont at once recognized the hopelessness of their cause. The triumph of Governor Curtin was the sure precursor of Mr. Lincoln's election, and that very fact added immeasurably to his popular strength in the closing month of the prolonged and exciting struggle.

In reviewing the agencies therefore which precipitated the political revolution of 1860, large consideration must be given to the influence of the movement for Protection. To hundreds of thousands of voters who took part in that memorable contest, the tariff was not even mentioned. Indeed this is probably the fact with respect to the majority of those who cast their suffrages for Mr. Lincoln. It is none the less true that these hundreds of thousands of ballots, cast in aid of free territory and as a general defiance to the aggressions of the pro-slavery leaders of the South, would have been utterly ineffectual if the central and critical contest in Pennsylvania had not resulted in a victory for the Republicans in October. The tariff therefore had a controlling influence not only in deciding the contest for political supremacy but in that more momentous struggle which was to involve the fate of the Union. It had obtained a stronger hold on the Republican party than even the leaders of that organization were aware, and it was destined to a larger influence upon popular opinion than the most sagacious could foresee.

In the foregoing summary of legislation upon the tariff, the terms Free-trade and Protection are used in their ordinary acceptation in this country,--not as accurately defining the difference in revenue theories, but as indicating the rival policies which have so long divided political parties. Strictly speaking, there has never been a proposition by any party in the United States for the adoption of free-trade. To be entirely free, trade must encounter no obstruction in the way of tax, either upon export or import. In that sense no nation has ever enjoyed free-trade. As contradistinguished from the theory of protection, England has realized freedom of trade by taxing only that class of imports which meet no competition in home production, thus excluding all pretense of favor or advantage to any of her domestic industries. England came to this policy after having clogged and embarrassed trade for a long period by the most unreasonable and tyrannical restrictions, ruthlessly enforced, without regard to the interests or even the rights of others. She had more than four hundred Acts of Parliament, regulating the tax on imports, under the old designations of "tonnage and poundage," adjusted, as the phrase indicates, to heavy and light commodities. Beyond these, she had a cumbersome system of laws regulating and in many cases prohibiting the exportation of articles which might teach to other nations the skill by which she had herself so marvelously prospered.

When by long experiment and persistent effort England had carried her fabrics to perfection; when by the large accumulation of wealth and the force of reserved capital she could command facilities which poorer nations could not rival; when by the talent of her inventors, developed under the stimulus of large reward, she had surpassed all other countries in the magnitude and effectiveness of her machinery, she proclaimed free-trade and persuasively urged it upon all lands with which she had commercial intercourse. Maintaining the most arbitrary and most complicated system of protection so long as her statesmen considered that policy advantageous, she resorted to free-trade only when she felt able to invade the domestic markets of other countries and undersell the fabrics produced by struggling artisans who were sustained by weaker capital and by less advanced skill. So long as there was danger that her own marts might be invaded, and the products of her looms and forges undersold at home, she rigidly excluded the competing fabric and held her own market for her own wares.

FREE-TRADE POLICY OF ENGLAND.

England was however neither consistent nor candid in her advocacy and establishment of free-trade. She did not apply it to all departments of her enterprise, but only to those in which she felt confident that she could defy competition. Long after the triumph of free-trade in manufactures, as proclaimed in 1846, England continued to violate every principle of her own creed in the protection she extended to her navigation interests. She had nothing to fear from the United States in the domain of manufacturers, and she therefore asked us to give her the unrestricted benefit of our markets in exchange for a similar privilege which she offered to us in her markets. But on the sea we were steadily gaining upon her, and in 1850-55 were nearly equal to her in aggregate tonnage. We could build wooden vessels at less cost than England and our ships excelled hers in speed. When steam began to compete with sail she saw her advantage. She could build engines at less cost than we, and when, soon afterward, her ship-builders began to construct the entire steamer of iron, her advantages became evident to the whole world.

England was not content however with the superiority which these circumstances gave to her. She did not wait for her own theory of Free-trade to work out its legitimate results, but forthwith stimulated the growth of her steam marine by the most enormous bounties ever paid by any nation to any enterprise. To a single line of steamers running alternate weeks from Liverpool to Boston and New York, she paid nine hundred thousand dollars annually, and continued to pay at this extravagant rate for at least twenty years. In all channels of trade where steam could be employed she paid lavish subsidies, and literally destroyed fair competition, and created for herself a practical monopoly in the building of iron steamers, and a superior share in the ocean traffic of the world. But every step she took in the development of her steam marine by the payment of bounty, was in flat contradiction of the creed which she was at the same time advocating in those departments of trade where she could conquer her competitors without bounty.

With her superiority in navigation attained and made secure through the instrumentality of subsidies, England could afford to withdraw them. Her ships no longer needed them. Thereupon, with a promptness which would be amusing if it did not have so serious a side for America, she proceeded to inveigh through all her organs of public opinion against the discarded and condemned policy of granting subsidies to ocean steamers. Her course in effect is an exact repetition of that in regard to protection of manufactures, but as it is exhibited before a new generation, the inconsistency is not so readily apprehended nor so keenly appreciated as it should be on this side of the Atlantic. Even now there is good reason for believing that many lines of English steamers, in their effort to seize the trade to the exclusion of rivals, are paid such extravagant rates for the carrying of letters as practically to amount to a bounty, thus confirming to the present day (1884) the fact that no nation has ever been so persistently and so jealously protective in her policy as England so long as the stimulus of protection is needed to give her the command of trade. What is true of England is true in greater or less degree of all other European nations. They have each in turn regulated the adoption of free-trade by the ratio of their progress towards the point where they could overcome competition. In all those departments of trade where competition could overcome them, they have been quick to interpose protective measures for the benefit of their own people.

The trade policy of the United States at the foundation of the government had features of enlightened liberality which were unknown in any other country of the world. The new government was indeed as far in advance of European nations in the proper conception of liberal commerce as it was on questions relating to the character of the African slave-trade. The colonists had experienced the oppression of the English laws which prohibited export from the mother country of the very articles which might advance their material interest and improve their social condition. They now had the opportunity, as citizens of a free Republic, to show the generous breadth of their statesmanship, and they did so by providing in their Constitution, that Congress should never possess the power to levy "a tax or duty on articles exported from any State."

At the same time trade was left absolutely free between all the States of the Union, no one of them being permitted to levy any tax on exports or imports beyond what might be necessary for its inspection laws. Still further to enforce this needful provision, the power to regulate commerce between the States was given to the General Government. The effect of these provisions was to insure to the United States a freedom of trade beyond that enjoyed by any other nation. Fifty-five millions of American people (in 1884), over an area nearly as large as the entire continent of Europe, carry on their exchanges by ocean, by lake, by river, by rail, without the exactions of the tax-gatherer, without the detention of the custom house, without even the recognition of State lines. In these great channels, the domestic exchanges represent an annual value perhaps twenty-five times as great as the total of exports and imports. It is the enjoyment of free-trade and protection at the same time which has contributed to the unexampled development and marvelous prosperity of the United States.

OPERATION OF PROTECTIVE LAWS.

The essential question which has grown up between political parties in the United States respecting our foreign trade, is whether a duty should be laid upon any import for the direct object of protecting and encouraging the manufacture of the same article at home. The party opposed to this theory does not advocate the admission of the article free, but insists upon such rate of duty as will produce the largest revenue and at the same time afford what is termed "incidental protection." The advocates of actual free-trade according to the policy of England--taxing only those articles which are not produced at home--are few in number, and are principally confined to _doctrinaires_. The instincts of the masses of both parties are against them. But the nominal free- trader finds it very difficult to unite the largest revenue from any article with "incidental protection" to the competing product at home. If the duty be so arranged as to produce the greatest amount of revenue, it must be placed at that point where the foreign article is able to undersell the domestic article and thus command the market to the exclusion of competition. This result goes beyond what the so-called American free-trader intends in practice, but not beyond what he implies in theory.

The American protectionist does not seek to evade the legitimate results of his theory. He starts with the proposition that whatever is manufactured at home gives work and wages to our own people, and that if they duty is even put so high as to prohibit the import of the foreign article, the competition of home producers will, according to the doctrine of Mr. Hamilton, rapidly reduce the price to the consumer. He gives numerous illustrations of articles which under the influence of home competition have fallen in price below the point at which the foreign article was furnished when there was no protection. The free-trader replies that the fall in price has been still greater in the foreign market, and the protectionist rejoins that the reduction was made to compete with the American product, and that the former price would probably have been maintained so long as the importer had the monopoly of our market. Thus our protective tariff reduced the price in both countries. This has notably been the result with respect to steel rails, the production of which in America has reached a magnitude surpassing that of England. Meanwhile rails have largely fallen in price to the consumer, the home manufacture has disbursed countless millions of money among American laborers, and has added largely to our industrial independence and to the wealth of the country.

While many fabrics have fallen to as low a price in the United States as elsewhere, it is not to be denied that articles of clothing and household use, metals and machinery, are on an average higher than in Europe. The difference is due in large degree to the wages paid to labor, and thus the question of reducing the tariff carries with it the very serious problem of a reduction in the pay of the artisan and the operative. This involves so many grave considerations that no party is prepared to advocate it openly. Free-traders do not, and apparently dare not, face the plain truth--which is that the lowest priced fabric means the lowest priced labor. On this point protectionists are more frank than their opponents; they realize that it constitutes indeed the most impregnable defense of their school. Free-traders have at times attempted to deny the truth of the statement; but every impartial investigation thus far has conclusively proved that labor is better paid, and the average condition of the laboring man more comfortable, in the United States than in any European country.

An adjustment of the protective duty to the point which represents the average difference between wages of labor in Europe and in America, will, in the judgment of protectionists, always prove impracticable. The difference cannot be regulated by a scale of averages because it is constantly subject to arbitrary changes. If the duty be adjusted on that basis for any given date, a reduction of wages would at once be enforced abroad, and the American manufacturer would in consequence be driven to the desperate choice of surrendering the home market or reducing the pay of workmen. The theory of protection is not answered, nor can its realization to attained by any such device. Protection, in the perfection of its design as described by Mr. Hamilton, does not invite competition from abroad, but is based on the controlling principle that competition at home will always prevent monopoly on the part of the capitalist, assure good wages to the laborer, and defend the consumer against the evils of extortion.

TENDENCY OF OVER-PRODUCTION.

An argument much relied upon and strongly presented by the advocates of free-trade is the alleged tendency to over-production of protected articles, followed uniformly by seasons of depression and at certain intervals by financial panic and wide-spread distress. These results are unhappily too familiar in the United States, but the protectionists deny that the cause is correctly given. They aver indeed that a glut of manufactured articles is more frequently seen in England than in the United States, thus proving directly the reverse of the conclusion assumed by the free-traders, and establishing the conservative and restraining power of a protective tariff. The protectionists direct attention to the fact that the first three instances in our history in which financial panic and prolonged depression fell upon the country, followed the repeal of protective tariffs and the substitution of mere revenue duties,--the depression of 1819-24, that of 1837-42, and that of 1857-61. They direct further attention to the complementary fact that, in each of these cases, financial prosperity was regained through the agency of a protective tariff, the operation of which was prompt and beneficent.

On the other hand the panic of 1873 and the depression which lasted until 1879 undoubtedly occurred after a protective tariff had been for a long time in operation. Free-traders naturally make much of this circumstance. Protectionists, however, with confidence and with strong array of argument, make answer that the panic of 1873 was due to causes wholly unconnected with revenue systems,--that it was the legitimate and the inevitable outgrowth of an exhausting war, a vitiated and redundant currency, and a long period of reckless speculation directly induced by these conditions. They aver that no system of revenue could have prevented the catastrophe. They maintain however that by the influence of a protective tariff the crisis was long postponed; that under the reign of free-trade it would have promptly followed the return of peace when the country was ill able to endure it. They claim that the influence of protection would have put off the re-action still longer if the rebuilding of Chicago and Boston, after the fires of 1871 and 1872, had not enforced a sudden withdrawal of $250,000,000 of ready money from the ordinary channels of trade to repair the loss which these crushing disasters precipitated.

The assailants of protection apparently overlook the fact that excessive production is due, both in England and in America, to causes beyond the operation of duties either high or low. No cause is more potent than the prodigious capacity of machinery set in motion by the agency of steam. It is asserted by an intelligent economist that, if performed by hand, the work done by machinery in Great Britain would require the labor of seven hundred millions of men,--a far larger number of adults than inhabit the globe. It is not strange that, with this vast enginery, the power to produce has a constant tendency to outrun the power to consume. Protectionists find in this a conclusive argument against surrendering the domestic market of the United States to the control of British capitalists, whose power of production has no apparent limit. When the harmonious adjustment of international trade shall ultimately be established by "the Parliament of man" in "the Federation of the world," the power of production and the power of consumption will properly balance each other; but in traversing the long road and enduring the painful process by which that end shall be reached, the protectionist claims that his theory of revenue preserves the newer nations from being devoured by the older, and offers to human labor a shield against the exactions of capital.