Nathaniel Hillyer. Egleston.

The North American review (Volume 139) online

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its bonds longer, not anticipating its ability to pay its debt
so soon, and the holders of these bonds will not surrender
them except at a large premium. What a grand position
this is for a government to be in, when a few years ago its
credit was so poor. But what is this wonderful surplus in the
treasury that these reformers are talking about ? One hundred
millions a year. And they are talking of the robbery imposed
on the poor man by these taxes to create this surplus. The
population of the United States is about fifty-five millions, there
fore it would be about one dollar and sixty cents a head per
annum. Is not this a terrible grinding tax to complain of?
But on what is this tax collected ? On foreign goods. How is
it divided among the population? How much of it does the
commonest laborer, who gets only a dollar and a half a day, pay
on the imported goods that he buys ? How much does the me
chanic pay who gets three dollars a day ? These two classes of
men produce these things, and the goods are dearer because our
workmen are better paid than foreign labor where the goods
are produced ; therefore the protection on the goods is for
their labor. How many of these imported articles does the man
buy who has an income of from $5000 to $25,000 a year, but
labors not with his hands ? Free trade would be good for
him, for with free trade he could buy cheaper. But the tariff-
reformer is all the time crying out how the poor man is ground
down by this law, which taxes a man $1.60 a year and places this
surplus in the treasury. But deduct the share of taxes the rich
man pays, and he is the largest purchaser of these imported
goods, and how much of the dollar and sixty cents does the
poor man pay ?

The taxes paid by the people of the United States for the
support of this government, and the sources of those taxes, are
as follows :

Total Internal Eevenue collected in 1883, from all sources. .$145,158,922

On spirits $74,368,775

" Tobacco 42,104,250

" Fermented liquors 16,900,616

" Banks and banking 3,748,995

From sale of adhesive stamps 7,658,000

From all other sources 378,286



Internal taxes collected in 1865 $211,129,529

" " " 1866 310,906,984

" " " 1867 265,920,475


Internal taxes collected in 1881 $135,779,365

" " " 1882 147,093,383

" " " 1883 145,158,922


Our principal sources are from customs duties, which,
amounted last year to $214,706,496, and from internal revenue
tax, $145,158,922 ; from which are paid all the expenses of the
government, including interest on the public debt ; the balance
being turned into the treasury to meet liabilities as they become
due, and to form a sinking fund for the ultimate payment of
the nation's debt. So that, while our population has nearly
doubled, and our wealth also, our internal taxation has de
creased nearly one-half. As the principal part of this taxation
is on liquors and tobacco, it is very plain that a man's tax is
nearly proportioned to the amount of those luxuries that he

But it is asserted that our protective tariff is ever making the
rich richer and the poor poorer, by constituting monopolies and
by adding to the cost of the necessaries of life. No doubt there
are larger fortunes in America to-day ; but how little a sum is
the wealth of all the millionaires in comparison with the wealth
of the whole people, invested in improved farms, bank deposits,
workmen's homes, manufacturing establishments, public high
ways, institutions of learning, common schools, churches, etc.
There was, in 1883, according to the report of the savings-bank
examiners, $500,000,000 on deposit in New York State alone.
To whom does this belong ? Besides this, there was last year
over five millions of dollars sent out of this country by the
immigrant population to aid their needy kinsfolk in their old
homes. Have the farmers been robbed in the interest of
"monopoly," as the tariff -reformers are all the while crying
out? Certainly they seem to enjoy a far higher degree of
comfort now than they did twenty or thirty years ago ; the
earnings of farmers are more than twice as much now as they
were in 1860. The census shows that in 1859 the aggregate
value of the products of agriculture was $1,675,724,972; in
1879 it was $3,726,331,422. And it is a very significant fact,


observed by Mr. J. A. Dodge, statistician of the Department of
Agriculture, that there is " in every State, without exception, a
higher average value of farm land in that portion of each State
which makes the largest value of the products of manufacturing
industry." The prices of the leading agricultural products, in
I860, 1880, and 1882, respectively, were as f ollows :

Products. 1860. 1880. 1882.

Wheat, per bushel $0.72.0 $0.95.1 $0.88.2

Corn, per bushel 43.0 .39.6 .48.4

Oats, per bushel 25.0 .36.0 .37.5

Eye, per bushel 52.0 .75.6 .61.5

Buckwheat, per bushel 58.0 .59.4 .72.9

Barley, per bushel 55.0 .66.6 .62.8

Potatoes, per bushel 40.0 .48.3 .55.7

Tobacco, per pound 05.0 .08.2 .08.4

Cotton, per pound , 09.3 .09.8 .09.9

Hay, per ton 8.00.0 11.65.0 9.70.0

All other farm products have advanced in price in about the
same proportion. The average production for each farmer, too,
was much greater in 1880 than twenty years before. In 1860
the value of each farmer's production was $638 ; in 1880 it was
$852. The condition of the farm laborer has also been im
proved, Twenty-five years ago his .wages amounted to about
$14 a month, with board ; in 1882 it was $18.58 ; an increase
of fully twenty-five per cent. Have the farmers been compelled
to pay more for the articles used on their farms? Mowers,
reapers, and threshing-machines can be purchased for twenty-
five per cent, less now than in 1860. Cotton and woolen goods,
boots and shoes, and all kinds of clothing are cheaper, as every
farmer and his wife well know.

As for the complaint that "monopoly" has grasped all the
means of acquiring wealth, it is sufficient answer that neither
law nor custom nor caste exists here to prevent any man, black
or white, native or foreign, from entering any honest field of
industry that he may elect. If any monopoly exists, the free
traders themselves are surely to blame, for they have in their
own hands the means of effectually abolishing it. Many of
them are men of wealth. Let a company of free-traders go to
Alabama, where they can get cotton without tax, and where
they will find coal and iron as favorably situated for exploitation
as anywhere in the world. Let them start a cotton-factory,


paying the same rate of wages that is paid in the rest of the
country, and the same interest on capital 5 let them also start
a furnace and a rolling-mill ; and then let them sell all the
manufactured products as cheap as they are sold in England.
By this simple experiment they will do more to establish the
doctrine of free trade in this country than they may ever hope
to do by all the public meetings ever held and all the pamphlets
ever published.

One of the principal arguments urged in favor of a twenty
per cent. " horizontal reduction n of the tariff, is the necessity of
reducing the surplus in the treasury j but such horizontal
reduction will probably increase the surplus, instead of dimin
ishing it. At present, our imports amount to about $700,-
000,000. Under our present tariff, why were these goods
imported ? Because they could be sold, after paying the duty,
cheaper than we could make them ourselves, unless we both
lowered the wages of labor and could get capital at a lower rate
of interest. Our own manufactures for the year ending June
30, 1883, are estimated at upward of $7,800,000,000, and under a
twenty per cent, horizontal reduction of the tariff doubtless fifty
per cent, of these goods would be imported from abroad. Add
the present importation of $700,000,000 to this fifty per cent.,
and our total importation would amount to $4,650,000,000, less
the difference in price between foreign and American manufact
ured goods. On this sum levy eighty per cent, of the existing
tariff, and the result would be a revenue six or seven times as
large as that which now goes into the treasury, and the problem
of the surplus would become more troublesome than ever. The
cry then would be to reduce the tariff further and further, till
we had become a community devoted exclusively to the most
elementary industries, and so poor that we could not import;
then the surplus would be reduced by our inability to buy
foreign goods. This, according to the political economists of
England, should be the aim of America. Says A. J. Wilson, in
his " Resources of Foreign Countries " :

" There is no use in denying the plain fact that the States have succeeded,
by their high-tariff policy, in diverting a considerable part of the industrial
energies of the community from the pursuits natural to, and most profitable
in, a new country, to the highly artificial and, for America, mostly very
expensive industries of long-settled and civilized nations. Were the shelter
ing tariff swept away, it is very questionable if any, save a few special


manufactures of certain kinds of tools, machinery, railway cars, and fancy
goods, and a few of the cruder manufactures, could maintain their ground."

I ask the advocates of a tariff for revenue, or the free-trade
opponents of the sheltering tariff that Mr. Wilson refers to,
if that is the condition of things they would like to see existing
in America. What would become of the 5,000,000 workmen and
8,000,000 wives and children who depend on them for support,
if Mr. Wilson's views were to take effect ? Send them from the
workshop to the cotton and corn fields, and effect an over
production in that industry, that we might break down our
own market, and glut the English market with our cheap cotton
and corn ? Says the " Liverpool Cotton Circular n :

" This country has suffered very severely of late years from the increasing
stringency of foreign tariffs. There has been a growing tendency evinced in
most countries to protect their own industries, and in every such case we are
the chief sufferers, for we live, as already said, "by exchanging our manufact
ures for the necessaries of life. The United States was at one time a large
customer for our iron-ware and textile fabrics ; but the hostile tariff she has
enforced since the civil war has nearly driven us out of her markets, and has
built up a vast system of manufactures which completely supplies her own
wants, and leaves something to spare for competition with us in foreign
markets. The free-traders of this country console themselves by thinking
that she is the chief sufferer ; but whether this be so or not (which is very
doubtful), the fact remains that her markets are almost lost to us, and we, on
the other hand, are constantly more dependent upon her for food and raw
material. For this we have no means of paying, except by money or bonds,
or indirectly by our credits with China, Brazil, and other countries, from
which America imports tea, sugar, etc. Our colonies all follow in the wake
of the United States, and do their best to stimulate their own manufactures
by closing their markets against ours."

And the London correspondent of an American journal
writes :

" The announcement of the introduction of bills in the House of Bepre-
sentatives at Washington, proposing the reduction of iron duties, rouses the
liveliest hopes among British manufacturers. Leading journals in the iron
districts hail the prospect of once more arresting the present development in
American iron and steel manufacture. The ' Newcastle Chronicle ' declares
it has reason to entertain great hopes of the success of these measures, it
considers the free admission of iron ore as intended to secure a Canadian
supply, but it would result in increasing the ore imports from England and
Spain. If free ore were secured, free coal would necessarily follow, with a
general increase in English exports. The ' Chronicle ' declares these measures
to be the most important news cabled for a long time. The 'Economist'


says the effect upon the English iron trade would be enormous. It fears lest
the proposals may "be too favorable to English trade to have any chance of

I have given the opinions of English authorities upon the
advantages to England derivable from the " reform " of our
tariff. I now quote the late Confederate General Richard Tay
lor, giving another " outside " view of our tariff policy. The
Englishmen and the Confederate soldier very clearly see where
they are both hurt by our tariff. It ought not to require much
argument to prove to Americans that what hurts these friends
of the United States is very likely to benefit this country. Says

General Taylor :


'* We made two great mistakes. Had we avoided them, we should have
conquered you. The first was, that we did not substantially destroy the pro
tective features of the tariff in the winter session of 1857 and 1858, by an
act which provided a rapid sliding-scale to free trade. . . . We could
have passed such a law, and held it tight on you till it closed the furnaces,
workshops, woolen and cotton mills, and steel and bar-iron works of the
whole North and West, and scattered your workmen over the prairies and
territories. When the war was ready for you, you would not have been ready
for the war. You could not have armed and equipped and put in the field a
large army, nor built a navy. You would have been without supplies,
machinery, and workmen, and you would have been without money and

What is the difference between the contention of our free
traders to-day and the policy that, according to General Taylor,
a sagacious statesmanship should have suggested to the Southern
leaders when they meditated secession ? There is no difference
in principle between the two; the only difference is in the
motives that actuate them. I am far from impfuting to American
free-traders a purpose to cripple the Union, so that we may be
defenseless in war; nevertheless, that would be the inevitable
result, should the people of the United States suffer themselves
to be overpersuaded by the specious arguments of the tariff
reformers. Are not our American free-traders' views in strict
harmony with the free-traders of England that I have quoted,
who are working in the interest of England against the United

Of course a people who have not at home the resources
necessary to provide food, clothing, raw material of manufactures,


etc., must import these things from abroad ; and for a country
so circumstanced, free trade may be an absolute necessity. It is
a necessity for England, at least under its present social condi
tions ; possessing great stores of iron and coal and a vast and
highly developed manufacturing system, but not capable of pro
ducing food, wool, or cotton sufficient to meet the demands of its
population ; and having besides a vast commercial marine, which
can find profitable employment only in effecting the exchange of
its manufactures for the food products and the raw materials of
other lands. England is for free trade in wheat, etc., for she
cannot by any legislation increase her product ; also in lumber,
as she cannot increase that product ; and cotton, which she
cannot grow herself. She is for free trade in coal and iron, for
she can produce these cheaper than any other country in the
world, on account of her cheap labor, and the short distance
that she has to haul them. She is for free trade in ships, because
she can build them cheaper than any other nation ; but in
running them she is the most radical protectionist in the
world, for, in order to break up the shipping of other nations, she
has paid over $260,000,000 in the past thirty years five times
as much as any other nation in the form of subsidies to break
down her competitors on the seas. But the United States are
very differently circumstanced, having practically inexhaustible
mineral wealth, and a :boundless area for agriculture. Why
should we turn our backs upon this bountiful provision of
mineral wealth, these many fields of enterprise opened to us, or
be content with exercising our energies in a few fields of industry,
as agriculture, stock-raising, and petroleum-exploitation, leaving
our natural resources undeveloped, and our capacity for diversi
fied industrial pursuits unexercised ? Must we not rather pro
vide here a career for every talent, and work out the problem of
the highest civilization obtainable by man f An American
should not have a word to say for free trade till he has
thoroughly studied the resources of his own country. It were
a disgrace were we to leave undeveloped, like the red Indians,
the vast resources of America ; and, while we possess the gifts
of nature in greater abundance than any other nation on earth,
go abroad for that which by industry we may produce at home.



OUR country has had a larger experience in the matter of
fiscal policies than any other. Nine times in less than a century
it has shifted from protection to free trade, or some compromise
between the two, and back again.* Now, after a longer persist
ence in the protective policy than in any policy previously, it is
asked to abandon it, in the face of evidence that it is the road to
national wealth, industrial independence, and a closer union of
the nation. The Democratic National Convention calls for
" taxation for public purposes exclusively," at once aspersing
the protective policy in terms familiar to free-traders, and
demanding its abolition.

The fundamental difference between the protectionist and
the free-trader is, that the former believes in legislation that
shall give direction to the nation's industrial growth, while
the latter holds that that direction may and must be left to
the intelligence of individuals acting for their private inter
ests. Protectionists claim that the nation has the intelligence
and the authority to effect a coordinate development of its
industries by law, and that the general interest will be served
by its use of these. The present discussion is confined to this
last point.

That a diversified industry is necessary to the national well-
being, has been conceded by free-trade authorities from Adam
Smith's time till our own. We may take it for granted, there
fore, that no class of Americans would be content to see our
people employed, as they were a hundred years ago, in agricult
ure and the ruder mechanic arts exclusively. If any proof is
needed of the misery of a country in that condition, it will be
found in the history of the decade of 1780-1790. The fathers of
the Republic, in their efforts to raise its people from the poverty,
discontent, and turbulence into which the country was sinking,
created a national government empowered to extend to the
industries of the country that protection for want of which they
were expiring. They gave Congress " power to lay and collect
taxes, duties, imposts, and excises, to pay the debts, and provide

* In ninety-five years the country has had sixty-three of protection and
thirty-two of free trade, or a compromise. The former came in the years
1789-1801, 1812-1816, 1824-1835, 1840-1847, 1860-1884.


for the common defense and general welfare of the United
States." The first Congress, consisting largely of the authors of
the Constitution, passed a law to levy duties on imports "for
the payment of the debts of the United States, and for the
encouragement of American manufactures." The author of that
bill was James Madison, the expounder of the Constitution.
The free-trade theory was urged on the Constitutional Conven
tion by a club of gentlemen who had imbibed the ideas of the
French physiocrats at whose feet Adam Smith studied, but it
met with no support.

That a country situated as was America could have made
its beginning as a manufacturing nation without the collective
action of its people through their government, is a supposition
contradicted by uniform experience. At that time the state
of the markets was such that England and France stood ready
to supply us with everything except the rudest articles, at a
price with which our own producers could not compete. Buy
ing in the cheapest market as a fixed policy might have resulted
in keeping America on the industrial level of Ireland, Turkey,
and India, to the neglect of the natural resources for manufact
ures in the products of our country and in the genius of our
people. The situation of 1780-1790 differs from that of to-day
only in degree and in detail ; every return to the policy of that
unhappy decade has resulted in a return to something of its

That the fivefold increase of American manufactures in two
decades has been due to our persistence in the tariff policy, is a
proposition that hardly admits of question. This growth is the
more remarkable, since the policy of the nation in the matter of
land-sales has been such as to offer a high premium upon the
increase of agriculture, and to impart to that industry a stimulus
far more powerful than any tariff could give to manufactures.
The offer of a homestead to every bona fide settler on the public
domain amounts to giving the farmer the site of his industry,
and the most important of his raw materials, at a nominal figure.
The offer has drawn settlers by millions ; and nothing but the
compensations of the protective tariff has prevented such an
exclusive direction of capital to farming as would have made
our situation most difficult. That the quality of our manufact
uring has been good, is affirmed by our rivals. Dr. Playfair,


in an article critical of our tariff, has expressed his admiration
for the honesty and thoroughness of our work, finding in this a
survival of the old Puritan spirit. Professor Rouleaux, in his
letters on the Centennial Exhibition, bears the same testimony,
but ascribes it to our tariff policy, which he says has kept us
from accepting the ideal of cheapness taught by English free
traders to Germany and other countries.

That protection has discouraged commerce, is asserted by
some who use that word in the narrow sense of international
interchanges only. If commerce mean " the exchange of services
and commodities between persons of different industrial func
tion/ 7 then the protective policy has been a powerful promoter
of commerce. It has diversified functions within the nation,
lifting our people above the uniformity in which no man needs
or helps his neighbor, into a state of mutual interdependence
that is modifying our political as well as our industrial life. At
the opening of the late war, Mr. Henry C. Carey showed Presi
dent Lincoln a railroad map of the country, and pointed to the
long lines that stretched across the land, always to the sea-coast,
while few or none ran north and south to bind the sections in
one Our railroad system took its first shape under the tariff of
1847; under that of 1860 the lines begin to run southward,
adding the warp to the woof.

As to our foreign commerce, its amount has increased five
hundred per cent, in the same time that England's has increased
three hundred and fifty per cent. If we export too much food
and raw materials, and too few manufactured goods, this may
be traced to two causes. We have neglected the development of
our carrying trade on the ocean, leaving our shipping entirely
outside the protective system, with the result that protectionists
would have expected. As a consequence, the manufacturers of
the country have not enjoyed facilities for getting their wares
before the world, and we have sold only those things that the
countries rich in shipping must take of us. This kind of com
merce has also been stimulated by our land policy.

To agriculture, the protective policy has secured a home
market for its products more constant and remunerative than it
could get without. The foreign consumer of our wheat, etc.,
seeks in all quarters for a producer that will sell more cheaply
than we. In India the ryot's income averages thirty shillings a


year, and consequently wheat can be raised more cheaply there
than in Minnesota. But the American artisan has no choice ;
he eats an American loaf. Under a free-trade policy we should

Online LibraryNathaniel Hillyer. EglestonThe North American review (Volume 139) → online text (page 38 of 60)