Benson John Lossing.

Harper's encyclopdia of United States history from 458 A.D. to 1905 (Volume 3) online

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talist will find the demand of the world per cent, by protection, then the capital

unexhausted, however he may increase the required by every wholesale and every

supply. Why, then, is he to carry his retail distributer must be increased in

capital abroad when there is profitable the same proportion. The distributer is

employment for it at home? If protec- not, and cannot be, in his auxiliary and

tion is necessary to keep American capital essentially domestic worV, protected by

at home, why is not the vast capital now an import duty, any more than can the

sustaining your domestic agriculture, and scavenger or the chimney-sweep. The im-

raising commodities for sale at free- port duty adds to the price he pays, and,

trade prices, exported to other countries? consequently, to the circulating capital

Or, conversely, since vast capitals find an which he requires in order to carry on

unlimited field for employment in cheap his traffic; but it adds nothing to the

domestic production without protection, rate of profit which he receiver, and

it is demonstrated that protection is not nothing whatever to the employment

required in order to keep your capital which he gives. This forced increment of

at home. cipital sets in motion no labor, and is

No adversary will, I think, venture compelled to work in the uncovered field
upon answering this by saying that the of open trade. It has not the prima facie
profits are larger in protected than in un- apology (such as that apology may be)
protected industries. First, because the which the iron-maker or the mill-owner
best opinions seem to testify that in your may make, that he is employing Ameri-
protected trades profits are hard pressed can labor which would not otherwise be
by wages a state of things very likely employed. If the waste under a pro-
to occur, because protection, resting upon tective duty of 50 per cent, be a waste
artificial stimulants, tends to disturb and of 50 per cent., the waste of the extra
banish all natural adjustment. But, sec- capital required in distribution is a
ondly, there can hardly be any votary of waste of 100 per cent, on the cost of the
protection sufficiently quixotic to contend operation; for it accomplishes absolutely
that waste ought to be encouraged in nothing on behalf of the community
economical processes, and the entire com- which would not be accomplished equally
munity taxed without fiscal necessity, in if the commodity were 50 per cent, less
order to secure to a particular order of in price; just as the postman distribut-
capitalists profits higher than those reaped ing letters at l.s. performs no better
by another order the public claim (such or other service than the postman dis-
you hold it) of both resting upon exactly tributing letters at Id. But of dis-
the same basis namely, this, that they tributers the name is legion; they con-
keep their capitals at home. stitute the vast army of the wholesale

There is yet another point which I can- and retail tradesmen of a country, wfth
not pass without notice. I have not ad- all the wants appertaining to them. As
rnitted that protection keeps at home any consumers, they are taxed on all pro-
capital which would otherwise go abroad, tected commodities; as the allies of pro-
But I now, for the moment, accept and ducers in the business of distributing,
III. 2 F 449



FREE TRADE

they are forced to do with more capital in a limited way, impossible. If it be
what could be done as well with less. true, the steps in the process are, I con-

Admitting that we see in the United ceive, as follows: America absolutely re-
States a coexistence of high wages with quires for her own use a certain number
protection, but denying the relation of and tonnage of vessels. Congress lays
cause and effect between them, I may be such duties upon foreign ships and ma-
asked whether I am prepared to broaden terials that they shall not be obtained
that denial into a universal proposi- from abroad at less than double the price
tion, and contend that in no case can at which they are sold in the open
wages be raised by a system of protection, market. Therefore the American ship-
My answer is this: A country cannot builder can force his countrymen to pay
possibly raise its aggregate wage fund him any sum, not exceeding two prices,
by protection, but must inevitably reduce for his commodity. The remaining point
it. It is a contrivance for producing dear is the division of the amount between the
and for selling dear, under cover of a capitalist and the workman. That is gov-
wall or fence which shuts out the cheaper erned by the general state of the labor
foreign article, or handicaps it on ad- market in the country. If the labor mar-
mission by the imposition of a heavy fine, ket, although open to the world, is in-
Yet I may for the moment allow it to be sufficiently supplied, then the wage-earner
possible that, in some particular trade may possibly, in a given case, come in for
or trades, wages may be raised (at the a share of the monopoly price of ships,
expense of the community) in consequence If the handwork be one requiring a long
of protection. There was a time when apprenticeship (so to call it) , and thereby
America built ships for Great Britain impeding the access of domestic corn-
namely, before the American Revolution, petitors, this will augment his share.
She now imposes heavy duties to prevent Then why not the like, some one will ask,
our Lu Ming ships for her. Even my in all cases? Because the community in
own recol ection goes back to the period, the given case pays the price of the
between sixty and seventy years ago, monopoly that is to say, throws the price
when by far the most, and also the best to waste, and because, while a trader in
part, of the trade between us was car- a multitude of commodities may lose upon
ried in American bottoms. Mr. McKay one of them, and yet may have a good
refers in his letter to a period before the balance-sheet upon the whole, he must not
war when she could compete with British and cannot lose upon them all without
lab^r, but when, as he informs us, your ceasing to be a trader; and a nation, with
shipwright was paid Gs. a day, whereas respect to its aggregate of production, is
now he has 14s. ; which means that, as a single trader.

as the profits of capital are not supposed Without, then, absolutely denying it to
to have declined, the community pays for be possible that in some isolated and ex-
ships more than twice as much as it ceptional cases there may be a relation
used to pay, and your ship-builders do between protection (and all protection, so
a small trade with a large capital, instead far as it goes, is monopoly) and high
of doing (as before) a large trade with a wages, I contend that to refer generally
(relatively) small capital. the high rate of wages in the United

I will not now stop to dilate on my ad- States to this cause would be nothing less
miration for the resources of a com- than preposterous. And on this part of
munity which can bear to indulge in these the case I desire to propound what ap-
impoverishing processes; nor even to ask pears to me to be in the nature of a
whether the shipwright in the small trade dilemma, with some curiosity to know
has the same constancy of wage as he had how the champions of protection would be
in the large one, or whether his large disposed to meet it. Let me assume, for
receipt is countervailed by his large out- the purpose of trying the issue, that one-
lay on the necessaries and comforts of half of the salable products of the United
life. But I will look simply to the ques- States are agricultural and one-half manu-
tion whether protection in this case raises factured, and that the manufactured
wages. I do not undertake to say it is, moiety are covered by protection, while

450



FREE TRADE

the agricultural half, since they are tional advantages which as a country the
articles of large export, bear only such United States enjoy ; which enable them
a price as is assigned to them by foreign to bear the process of depletion that,
competition in the markets where they are through the system of protection, it is
sold. I take this rough estimate for the their pleasure to undergo, and which for
sake of simplicity, and in the same view them cause the question to be one not of
1 overlook the fact that the sugar which absolute retrogression, but only of ham-
you grow is still covered, as it used to be pered and retarded progress,
covered, by an operative protection. One- I hold that dear production, even if
half, then, of American labor enjoys pro- compensated to the producer by high
tective \vages; the other half of the prod- price, is a wasteful and exhausting proc-
ucts of the United States is furnished by ess. I may still be asked for a detailed
mere " free-trade toilers." Now, I want answer to the question. " How, then, is it
to ask whether the wages of the agricult- that America, which, as you say, makes
ural half are raised by the existence of enormous waste by protection, neverthe-
protective laws which cover the artisan less outstrips all other countries in the
half. This you cannot possibly affirm, be- rapid accumulation of her wealth?" To
cause it is an elementary fact that (given which my general answer is that the case
the quantity of labor in the market) they is like that of an individual who, with
are governed by the prices of the com- wasteful expenditure, has a vast fortune,
modities they produce, and that those such as to leave him a large excess of re-
prices are free-trade prices. You have ceipts. But for his waste that excess
* free-trade toilers " all over your country, would be larger still.

and by their side you have protected arti- I will, then, proceed to set forth some

sans. I ask, then, next, this question: Is of the causes which, by giving exceptional

the remuneration of the " free-trade toil- energy and exceptional opportunity to the

ers," all thingo taken into account, equiva- work of production in America, seem to

lent to that of the protected artisans? allow (in homely phrase) of her making

If it is not, why do not the agricultural ducks and drakes of a large portion of

men pass over into the provinces of de- what ought to be her accumulations, and

mand for manufacturing and mining yet, by virtue of the remainder of them, to

labor, and, by augmenting the supply, re- astonish the world.

duce and equalize the rate? Which is 1. Let me observe, first, that America
like asking, How comes it that a man is produces an enormous mass of cotton,
content with one loaf when two are offered cereals, meat, oils, and other commodities,
him? The answer would be, He is not which are sold in the unsheltered market
content; whenever he can, he takes the of the world at such prices as it will
two and leaves the one. It follows that yield. The producers are fined for the
in this case there exists no excess of wage benefit of the protected interests, and re-
for him to appropriate. The loaf, mean- ceive nothing in return; but they obtain
ing by the loaf not a mere money rate, but for their country, as well as for the world,
that money rate together \vith all its in- the whole advantage of a vast natural
cidents of all kinds, is equal as between trade that is to say, a trade in which
the protected and the unprotected laborer, production is carried on at a minimum
The proportions of the two kinds of labor cost in capital and labor as compared
are governed in the long run (and perhaps with what the rest of the world can do.
in America more certainly and rapidly 2. America invites arid obtains in a re-
than anywhere else) by the advantages at- markable degree from all the world one
taching to each respectively. In other of the great elements of production, with-
words, the free-trade wages are as good out tax of any kind namely, capital,
as the protected wages; and (apart from 3. While securing to the capitalist pro-
small and exceptional cases) the idea that ducer a monopoly in the protected trades,
protection raises the rate of wages on any she allows all the world to do its best,
large scale or in any open field is an by a free immigration, to prevent or qual-
illusion. ify any corresponding monopoly in the
But I proceed to consider the vast excep- class of workmen.

451



FREE TRADE

4. She draws upon a bank of natural her feet, so that the most timid among
resources so vast that it easily bears us need not now to greatly dread her com-
those deductions of improvidence which petition in the international trade of the
simply prevent the results from being world.

vaster still. Again, the international position of

Let me now mention some at least among America may, in a certain light, be illus-
those elements of the unrivalled national trated by comparing together the economi-
strength of America which explain to us cal conditions under which coal has been
why she is not ruined by the huge waste produced in the different districts of this
of the protective system. And first of island. The royalty upon coal represents
these I place the immense extent and vast- that surplus over and above estimated
ness of her territory, which make her not trading profit from a mine which the
so much a country as in herself a world, lessee can afford to pay the landlord. In
and not a very little world. She carries England, generally, royalties have varied
on the business of domestic exchanges from about 6d. a ton to 9<L in a few cases ;
on a scale such as mankind has never scarcely ever higher. But in Stafford-
seen. Of all the staple products of human shire, owing to the existence of a remark-
industry and care, how few are there able coal-measure, called the 10-yard coal,
which, in one or another of her countless and to the presence of ironstone abun-
regions, the soil of America would refuse dantly interstratified with the coal, the
to yield. No other country has the same royalty has often amounted to no less than
diversity, the same free choice of indus- 3s. This excess has a real analogy to the
trial pursuit, the same option to lay hold surplus bounty of Mother Earth in Amer-
not on the good merely, but on the best. ica. And when I see her abating somewhat
Historically, all international trade has of her vast advantages through the trick
had its broadest basis in the interchange of protection, I am reminded of the curious
between tropical or southern commodities fact that (as it happens) this unusual
and those of the temperate or northern abundance of the mineral made the get-
zone. And even this kind of exchange ting of it in Staffordshire singularly
America possesses on a considerable scale wasteful, and that fractions, and no small
within her own ample borders. fractions, of the 10-yard coal are now ir-

Apart from this wide variety, I sup- recoverably buried in the earth, like the
pose there is no other country of the tribute which America has and has, as it
whole earth in which, if we combine to- seems, contentedly been paying to her
gether the surface and that which is below protected interests.

the surface, Nature has been so bountiful In most of the elements of cheapness,
to man. The mineral resources of our America wholly surpasses us; as, for ex-
own Britannic Isle have, without question, ample, in the natural, indefeasible ad-
principally contributed to its commercial vantages she enjoys through the vastness
pre-eminence. But when we match them not only of the soils which produce, but
with those of America, it is Lilliput of the markets which consume, her pro-
against Brobdingnag. I believe that your ductions. I have lately seen a penny
coal-field, for example, is to ours nearly periodical, published by Messrs. Harper,
in the proportion of thirty-six to one. of New York, which far surpasses all
Now, this vast aggregate superiority of that the enterprise and skill of our pub-
purely natural wealth is simply equiva- lishers have been able to produce. But
lent to the gift, say, of a queen in a game all these plus quantities she works hard to
of chess, or to a start allowed in a race convert into minuses through the devour-
by one boy to another; with this differ- ing agency of protection,
ence: that America could hold her own There are two other particulars which
against all comers without the queen, and I have to notice before quitting this por-
that, like her little Lord Fauntleroy, she tion of the subject. Each of them in-
can, if she likes, run the race, and perhaps volves a compliment the one to us, the
win it, upon equal terms. By protection other to yourselves. As there is an in-
she makes a bad move, which helps us to vidious element in all self-praise, I will
make fight, and ties a heavy clog upon get rid first of what touches us. It is

452



FREE TRADE

this: Trade is, in one respect at least, with one great and crying want, the
like mercy. It cannot be carried on with- scarcity of labor. So they were put upon
out conferring a double benefit. Again, the application of their mental powers
trade cannot be increased without increas- to labor-saving contrivances, and this
ing this benefit, and increasing it (in the want grew as fast as, or faster than, it
long run) on both sides alike. Freedom was supplied. Thus it has come about
has enormously extended our trade with that a race endued with consummate abil-
the countries of the world, and, above all ily for labor, has also become the richest
others, with the United States. It fol- of all races in instruments for dispensing
lows that they have derived immense ben- with labor. The provision of such in-
efit, that their waste has been greatly struments has become with you a stand-
repaired, their accumulations largely aug- ing tradition, and this to such a degree
mented, through British legislation. We that you have taken your place as (prob-
have not on this ground any merit or ably) the most inventive nation in the
any claims whatever. We legislated for world. It is thus obvious enough that
our own advantage, and are satisfied with a remarkable faculty and habit of in-
the benefit we have received. But it is vention, which goes direct to cheapness,
a fact, and a fact of no small dimensions, helps to fill up that gap in your produc-
which, in estimating the material develop- tive results which is created by the waste-
ment of America, cannot be lost sight of. fulness of protection. The leakage in the

My second point touches the circum- national cistern is more than compen-

stances of the national infancy and sated by the efficiency of the pumps that

growth. It would be alike futile and un- supply it.

just, in pointing out the singular ad- America makes no scruple, then, to
vantages over the outer world which cheapen everything in which labor is con-
nature has given to America, not to take cerned, and she gives the capitalist the
notice of those advantages which her command of all inventions on the best
people have earned or created for them- terms she can contrive. Why? Only be-
selves. In no country, I suppose, has cause this is the road to national wealth,
there been so careful a cultivation of the Therefore, she has no mercy upon labor,
inventive faculty. And if America has but displaces it right and left. Yet,
surpassed in industrial discoveries the when we come to the case where capital
race from which her people sprang, we do is most in question, she enables her ship-
not grudge her the honor or the gain, builders, her iron-masters, and her mill-
Americans are economists in inventions owners to charge double or semi-double
and do not let them slip. For example, prices; which, if her practice as to labor-
the reaping-machine of modern times, saving be right, must be the road to na-
I believe, was invented in Forfarshire, but tional poverty. E converse, if she be
did not pass into any general use. Still- right in shutting out foreign ships and
born there, it disappeared; but it was ap- goods to raise the receipts of the Ameri-
preciated and established in America, and can capitalist, why does she not tax
then came back among us as an importa- the reaping-machine and the American
tion from thence, and was at last appreci- " devil " to raise the receipts of the
ated and established here. The scarcity of American laborer ? Not that I recommend
labor has, in truth, supplied the great such consistency. I rejoice in the
republic with an essential element of anomalies and contradictions by virtue of
severe and salutary discipline. which the applications of science every-

The youth of America was, especially where abound through the States for the

in New England, a youth, not of luxury, benefit of their populations, and, with-

but of difficulty. Nature dealt somewhat out doubt, though more circuitously, of

sternly with your ancestors; and to their ours also, and of the world at large,

great advantage. They were reared in I have still to notice one remaining

a mould of masculine character, and were point. It is this: I do not doubt that

made fit to encounter, and turn to ac- production is much cheapened in Amer-

count, all vicissitudes. As Ihe country ica by the absence of all kinds of class

opened, they were confronted everywhere legislation except that which is termed

453



FREE TRADE

protection; an instance alike vicious and porters of the corn law. It is of the
gigantic, but still an instance only. In tendencies of a system that I speak, which
our British legislation, the interest of operate variously, upon most men un-
the individual or the class still rather consciously, upon some men not at all:
largely prevails against that of the pub- and surely that system cannot be good
lie. In America, as I understand the which makes an individual, or a set of
matter, the public obtains full and equal individuals, live on the resources of the
justice. I take for example the case community and causes him relatively to
of the railroads; that vast creation, one diminish that store, which duty to his
of almost universal good to mankind, fellow - citizens and to their equal rights
now approaching to one-tenth or one- should teach him by his contributions to
twelfth of our entire national posses- augment. The habit of mind thus en-
Bions. It is believed that in unnecessary gendered is not such as altogether befits
parliamentary expenditure, and in ab- a free country or harmonizes with an in-
normal prices paid for land, the railways dependent character. And the more the
of this country were taxed to between system of protection is discussed and con-
50,000,000 and 100,000,000 sterling be- tested, the more those whom it favors are
yond the natural cost of their creation, driven to struggle for its maintenance,
Thus does the spirit of protection, only the farther they must insensibly deviate
shifting its form, still go ravening about from the law of equal rights, and, per-
among us. Nothing is so common here haps, even from the tone of genuine per-
as to receive compensation; and we get sonal independence.

it not only for injuries, but for benefits. In speaking thus, we speak greatly
But while the great nation of the Union from our own experience. I have person-
rightly rejoices in her freedom from our ally lived through the varied phases of
superstitions, why should she desire, that experience, since we began that bat-
create, and worship new superstitions of tie between monopoly and freedom which
her own? cos t lls about a quarter of a century of

I am sorry to say that, although I the nation s life. I have seen and known,
have closed the economical argument, I and had the opportunity of comparing,
have not yet done with the counts of the temper and frame of mind engen-
my indictment against protection. I have, dered first by our protectionism, which
indeed, had to ask myself whether I we now look back upon as servitude, and
should be within my right in saying hard then by the commercial freedom and equal-
things, outside the domain of political ity which we have enjoyed for the last
economy, about a system which has com- thirty or forty years. The one tended to
mended itself to the great American state harden into positive selfishness ; the other
and people, although those hard things has done much to foster a more liberal
are, in part at least, strictly consequent tone of mind.

upon what has been said before. Indeed, The economical question which I have
the moral is so closely allied to the been endeavoring to discuss is a very large
economical argument as to be inter- one. Nevertheless, it dwindles, in my
twined with it rather than consequent view, when it is compared with the para-
upon it. Further, I believe the people mount question of the American future



Online LibraryBenson John LossingHarper's encyclopdia of United States history from 458 A.D. to 1905 (Volume 3) → online text (page 70 of 76)