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THE



TARIFF POLICY



OF



ENGLAND AND OF THE UNITED STATES
CONTRASTED.



BY

ERASTUS B. BIGELOW.



UNIVERSITY

OF



BOSTON:
LITTLE, BROWN, AND COMPANY.

1877.



Cambridge :
Press of John Wilson and Son.



GENERAL



NOTE.



SOME of the tables of statistics, and some of the argu-
ments in this pamphlet, are taken from the author's work
entitled, " The Tariff Question Considered in Regard to the
Policy of England and the Interests of the United States,"
published in 1862.

Other statistical statements and numerical comparisons,
giving results of more recent date, were compiled expressly
for the pamphlet. In all cases, the statistical facts are

derived from official sources.

E. B. B.

BOSTON, September, 1877.



1 n.i?i



CONTENTS.



INTRODUCTION 7

THE TARIFF POLICY OF ENGLAND 8

THE FREE-TRADE ACTS OF ENGLAND AND THEIR EFFECTS . . 12
THE TARIFF POLICY OF THE UNITED STATES, AND ITS RELA-
TION TO THAT OF ENGLAND 18

OUR EXPORTS OE MANUFACTURES 38

EFFORTS OF ENGLAND TO INFLUENCE THE TARIFF POLICY OF

OTHER COUNTRIES 44

CONCLUSION 53

APPENDIX . . 57




THE TAKIFF POLICY



OF



ENGLAND AND THE UNITED STATES.



is a prevailing expectation that our customs
-* tariff will be revised by the next Congress. As such
legislation will have a direct bearing on the prosperity of the
country, it is important that the probable effects of proposed
changes should be clearly understood. Theoretical and par-
tisan discussion of the subject will do but little towards
that end. Nor will the experience of other nations be a
safe guide for us. The conditions of production are so
various in different countries that the customs tariff of
every nation should be determined by its own interests and
needs.

There is no ultimate principle of universal application,
involved either in free trade or protection. They are ques-
tions of policy. Free trade in England, and protection in the
United States, have been so much discussed on theoretical
grounds, in disregard of facts and the peculiar condition and
requirements of the respective countries, that a popular
misapprehension prevails in regard to their real character
and effect.

It is my purpose to discuss these questions, in their practi-
cal relations to national interests. The free-trade maxims
and example of England are so often and so zealously com-
mended to our adoption and imitation, not only by English-
men, but by many among ourselves, that it is especially
important at this time, that we should rightly understand



8 THE TARIFF POLICY OF

her tariff policy, the exigencies which from time to time
determined its character, and the interest she has in urging
other nations to follow her lead. These topics I will endeavor
to present as they appear in the light of unquestionable
facts.



THE TARIFF POLICY OF ENGLAND.

Great Britain derives her national strength mainly from
her commerce ; and her manufactures almost entirely sustain
that commerce. This she well understands, and to protect,
encourage, and extend her manufactures has been the wise
and uniform policy of her statesmen for more than a century ;
and the result is seen in a manufacturing prosperity that is
without a parallel. Although national advancement may be
the constant object of a nation, the methods of its accom-
plishment must necessarily conform to the ever-changing
conditions incident to general progress. The changes which
England's tariff-policy has undergone, from time to time,
exemplif}^ this great truth. What those changes have been,
and their relation to the exigencies which determined them,
I will now briefly consider. They will be best understood
by dividing the time of their occurrence into three epochs.

The first epoch covers the period in which manufacturing
was mainly carried on by handicraft methods. During this
period, the English possessed no superiority as a manu-
facturing people. Lower wages, cheaper living, and greater
aptitude for handicraft in the inhabitants of several other
countries, enabled their manufacturers to undersell the manu-
facturers of England. To sustain the latter under this
unequal competition, bounties were offered, high duties were
imposed; and, in some instances, prohibition was enforced
under severe penalties.

" By the 8th of Elizabeth, ch. 3, the exporter of sheep
or rams was, for the first offence, to forfeit all his goods
for ever, to suffer a year's imprisonment, and then have
his left hand cut off, in a market-town, upon a market-day,



ENGLAND AND THE UNITED STATES. 9

to be there nailed up ; and, for the second offence, to be
adjudged, a felon, and to suffer death accordingly."

" By the 13th and 14th of Charles II., ch. 18, the exporta-
tion of wool was made felony, and the exporter subjected to
the same penalties and forfeitures as a felon." 1

In 1700, an act was passed, prohibiting the importation of
India calicoes, chintzes, and muslins under a penalty, upon
the seller and buyer, of 200. In 1720, it was enacted that
no person could wear a printed calico without the payment
of 5 for the privilege, while the seller of the article was
mulcted to the extent of 20. Sixteen } T ears later, the Act
of 1720 was so far modified as to legalize the use of mixed
prints, while the prohibition against using calicoes made
wholly of cotton remained in full force. This state of things
lasted nearly forty years longer. In 1774, a little more than
a century ago, Parliament passed an act sanctioning the
manufacture of cotton, and making it lawful to use or wear
any new fabric made wholly of that material.

The second epoch embraces the period so remarkable for
the invention and adoption of labor-saving machine^, and
the inauguration and development of the " factory system "
in Great Britain. It covers nearly all the great mechanical
improvements which began with the inventions of Watt,
Arkwright, Hargraves, Crompton, and Cartwright. The
steam-engine, the spinning-jenny, the spinning-frame, the
carding-machine, and the power-loom ushered in a new era
in manufacture, and laid the foundation of those great
industries which constitute the basis of England's pros-
perity, and control as well as characterize her social and
political organizations. Perceiving early the great value and
importance of these inventions and improvements, England
sought to confine their use to her own people, and to that
end enacted laws prohibiting, under heavy penalties, the
exportation of machinery, and the emigration of skilled arti-
sans. On machinery for the manufacture of flax, the export
prohibition remained in force as late as 1842.

l Smith's " Wealth of Nations," vol. ii. p. 121.



10 THE TARIFF POLICY OF

I come now to the third epoch, which begins with the
tariff-reform movement in England, and comes down to the
present time. It is memorable as the period in which England
reversed her tariff-policy. Up to the beginning of this epoch,
it is certain that, in order to establish and develop her manu-
factures, she refused no form of aid and protection which it
was in the power of government to grant. When foreign
productions encroached on the home market, they were
excluded by actual prohibition, or by exorbitant duties of
equivalent effect. Whenever an article of English manu-
facture (subject, however, to internal taxes) was struggling
to get a foothold in a foreign market, drawbacks were
allowed ; while, in cases of special need, an export bounty
was paid. To prevent rival nations from sharing in the great
advantages which she derived from improved processes and
labor-saving machinery, t she guarded with jealous care every
invention and discovery.

Under this rigid and discriminating system of protection,
England so increased her productive power, as, at length, to
surpass all other countries, both in the quantity and' in the
cheapness of her manufactures, excepting those of silk. This
object accomplished, it is very evident that her interests and
her relations were materially changed. But why, just at
this crisis in her career, did the nation, which had so long
been a conspicuous adherent of the protective policy, become
all at once the advocate of free trade ? The answer to this
interrogatory is to be found, not in any feeling of confidence \
England's statesmen had in the free-trade theory, as it
shall show in another part of this discussion, but in the'
exigencies of her situation.

Her population had attained a density fur beyond the

capacity of her soil to sustain. Mr. Villiers, urging, in

1844, the repeal of the corn laws, said : " For twenty years

past, we have been constantly and largely dependent on

.other countries for our supplies of corn." 1 Pressing the



1 Corn, in England, comprehends all the cereal grains ; but means espe-
cially wheat, rye, oats, and barley.



ENGLAND AND THE UNITED STATES. 11

same topic a year later, he declared : " The time is come
when every individual soul born in Great Britain, must look
to manufactures, or at least to something else than agri-
culture, for the means of living." * Said Mr. Cobden, in
debate on the corn laws : u The unskilled laboring classes
are in a condition which is permanently disagreeable to the
government. Look at Ireland, where five millions of people
never touch wheaten bread, where three-fourths of the
people live on roots. In the Scotch Highlands, and in the
midland counties of England, there are similar evidences of
want." 2

Concurrent with this growing dependence of England on
other countries for bread, the growth of manufactures else-
where was endangering the expansion of her commerce.
Rival nations had adopted the machinery and the factory
system which she had vainly attempted to monopolize, and
were not only largely supplying their own people with manu-
factures, but were nearly abreast with her in foreign mar-
kets. To maintain her superiority as a manufacturing nation,
and thereby extend her commerce, some great change, which
should reduce the cost of her manufactures, and enlarge the
area for their distribution, was an evident and imperious
necessity.

Absolute protection had done its work. The duties on her
principal manufactures excepting those of silk had be-
come virtually inoperative, as shown by the fact that, at that
time, her command of the home market was such that, for
several years after they were admitted free of duty, her im-
ports of manufactures other than those of silk did not
materially increase. 3 The only course open to her, so far



1 Hansard, vol. Ixxxi., 3d series, p. 13G3. 2 Ibid. 353.

3 The total value of England's imports of iron, and of manufactures of cot-
ton, wool, and flax, in 1856, ten years after the duties on them were repealed, was
respectively as follows :

Iron 775,908

Manufactures of cotton 664,001

wool 1,444,162

flax 97,541



12 THE TARIFF POLICY OF

as we can see, was to admit raw materials free ; to di-
minish the cost of living by the free admission of corn
(breads tuffs), and thereby render the continuance of low
wages compatible with subsistence ; and to induce other
nations, if she could, to open their markets to the sale of
her productions. This constituted the sum and substance
of England's free-trade programme. I will now show how
this programme has been carried out, and the results it has
accomplished.



THE FREE- TRADE ACTS OF ENGLAND AND THEIR
EFFECTS.

The several tariff acts which comprise the principal free-
trade measures of England are as follows, viz. : The acts of
Sir Robert Peel in 1842 and 1845, his great act repealing the
corn laws in 1846, and the act of Mr. Gladstone in 1853.
The bearing which these acts severally had on the revenue,
and, inferentially, on the commerce of Great Britain, is
clearly shown by table A, which was compiled from her cus-
tom-house records. It gives the gross amount of customs
duties derived from each of the principal articles imported,
distinguishing the annual receipts in each of the years in
which the free-trade measures were respectively enacted, and
the mean, annual receipts in a series of years before and after
each enactment. This record begins four years before the
first important measure of reform, and comes down six years
this side of its last important act. It shows that, from 1838
to 1859 inclusive, England derived over ninety per cent of
her customs revenue from sixteen articles, and that the
amount received from all other articles subject to duty was
less than nine per cent. The near approach to uniformity in
the sources, and the annual amount of revenue raised during
those twenty-two years, under the several free-trade acts, is
very remarkable.



ENGLAND AND THE UNITED STATES.



13



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14 THE TARIFF POLICY OF

In 1845, "by command of Her Majesty," an expository
statement 1 was prepared and presented to Parliament, show-
ing the effect of Peel's tariff act of 1842 on the imports of
Great Britain, the imports being classified according to their
relation to the questions of free trade and protection. The
classification is as follows :

ARTICLES IN A RAW STATE TO BE USED IN MANUFACTURE.
ARTICLES PARTIALLY MANUFACTURED.
ARTICLES WHOLLY MANUFACTURED.

ARTICLES FOR FOOD, INCLUDING CONDIMENTS AND STIMULANTS.
ARTICLES NOT PROPERLY BELONGING TO ANY OF THE FOREGO-
ING HEADS.

A summary of the Expository Statement is given in

TABLE B.



CLASSES OF IMPORTS.


Mean Annual
Amount of
Duties collected

in the Two

Years before, the
Ta rift' of 1842.


Mean Annual
Amount of
Duties col lect'd
in the Two
Years after the
Tariff of 1842.


Excess col-
lected in the
Two Years
before the
Tariff of
1842.


Excess col-
lected in the
Two Years
after the
Tariff of
1842.


Articles in a Raw State to be
used in Manufactures .


Dollars.

10,975,400


Dollars.
7,074,205


Dollars.
3,901,195


Dollars.


Articles partially manufact'd


5 9 56 145


3 57 440


1,998 705




Articles wholly manufactured
Articles for Food, &c. .


2,397,850
93 438 085


2,377,0-25
100 384 10


20,225


6 946 15


Articles not properly belong-
ing to any of the foregoing
heads .


1,119 990


510 950


609 040














Total


113 187 470


113 604 430


6 529 165


6 946 15













By an examination of this table, it will be seen that the
principal effect of the free-trade act of 1842, was to increase
the total amount of duties collected, nearly half a million
dollars, and to take about six millions of dollars from raw
materials and articles partially manufactured, and add a sim-
ilar amount to articles for food.



1 Accounts and Papers of the British Parliament for the year 1845, vol.
xlvi. pp. 100-287.



ENGLAND AND THE UNITED STATES.



15



To show the bearing which the several free-trade acts
viz., the acts of 1842, 1845,1846, and 1853 had collectively
on the same classes of imports, I present table C, which gives
the amount of duties collected on each class respectively, in
the ye-ar 1839, and in the year 1859.

TABLE C.



CLASSES OP IMPORTS.


Net Amount of
Duty collected
in tlie Year
ending
Jan. 5, 1839.


Net Amount of
Duty collected
in the Year
ending
Dec. 31, 1859.


Excess in
1839.


Excess in
1859.


Articles in a Raw State to be
used in Manufactures .


Dollars.
10,519,115


Dollars.
1,528,395


Dollars.
8,990,720


Dollars.


Articles partially inanufact'd


5, '220, 795


2,076,495


3,144,300




Articles wholly manufactured


2 39(5,260


3,032,575




636 315


Articles for Food, &c. .


91,518,705


116,746,050




25 227 955


Articles not properly belong-
ing to any of the foregoing
heads


949 795


139 120


810 675














Total ....


110 604 760


103 509 635


1 945 695


95 863 570













From this table it appears that the combined effect of all
these free-trade acts up to 1859, was to increase the total annual
amount of duties collected, twelve millions of dollars; to in-
crease the amount collected on articles wholly manufactured,
six hundred thousand dollars, 1 and on articles for food, twenty-
jive millions of dollars ; and to diminish the amount collected
on raw materials, nearly nine millions of dollars; and on
articles partially manufactured three millions of dollars.

The modifications which have been made in the British
tariff, since 1859, do not materially change its character, as
they relate mainly to the duties on the sixteen articles speci-
fied in Table A.

The greatest benefit which England has derived from her
tariff-reform measures, does not appear in the annual amount



1 The duties on iron, and on manufactures of cotton, wool, and flax, were
repealed in 1846 ; but on manufactures of silk, paper, and leather, and on sundry
minor articles of manufacture, duties were retained till after 1859.



16 THE TARIFF POLICY OF

of her customs revenue, for that, as already shown, has been
remarkably uniform. This benefit was largely prospective,
and is to be seen in its relation to her imports of raw mate-
rials and of breadstuff's.

The amount of duties collected on raw materials to be
used in manufacture, in 1839, was over ten millions of dollars. 1

The rates of duties that then prevailed, applied to the
amount of raw materials now consumed in her vast manu-
facture, would amount annually to a very large sum. On
cotton alone, it would amount to eight millions of dollars.
Great Britain produces only forty per cent of the wheat and
wheat-meal which she consumes. 2 In 1815, she imported
corn (breadstuffs) to the value of two hundred and sixty-five
millions of dollars? Had the "sliding scale" of duties been
continued, with corn at the prices which prevailed three
years prior to its repeal, her bread-tax that year would have
amounted to fifty-three millions of dollars.

But to understand fully the nature and necessity of the\
reform of Peel and Gladstone, we must take into view the ]
fact that the details and provisions of the British tariff had /
become exceedingly numerous, complicated, and inconsistent.
It contained many actual prohibitions, and many duties so
high as to be, in fact, prohibitory. In the progress of manu-
factures and trade, not a few of its imposts had become
entirety inoperative. It had grown up, as it were, by chance,
to meet from time to time the exigencies of war and the
demands of finance, until it had become a vast agglomeration
of unintelligible impositions. Says Mr. Tooke : " The whole
commercial system was incumbered, disfigured, and shackled
by innumerable, vexatious, obstructive, and impolitic restric-
tions." To eliminate from such a mass what was positively
injurious, or absolutely useless, and to simplify and to classify
the whole, was a work of necessity and mercy, which, by

1 See Table B, p. 14.

2 See Twentieth Report of the Commissioners of Her Majesty's Customs,
p. 10.

3 See Twenty-third number, Statistical Abstract for the United Kingdom,
p. 33.



ENGLAND AND THE UNITED STATES. 17

relieving the custom-house, gave needed facilities to com-
merce. The common-sense act which erased from the statute-
book so many petty and annoying details, made no little
show of reform. Yet, so far as those details were concerned,
it had really no bearing on the great questions of free trade
and protection ; more than nine-tenths of the entire customs
receipts having been derived, as already shown, from sixteen
articles.

The facts I have adduced, show, I think, that in economic
and fiscal discussions, during the past thirty years, a greater
prominence has been given to the free-trade measures of
England than their results will justify. The influence of
these measures in extending British commerce has, also, been
much overestimated. It is true that, of late years, the
increase of British trade has been rapid and striking. But
causes of general application, which are to be found outside
of tariff laws, have contributed largely to this result. Promi-
nent among those causes, are the influence of improved
machinery and of the applied sciences, and the greatly
increased supply of gold.

This is pre-eminently an age of progress. Useful inven-
tions in the mechanic arts, and important discoveries in
science, are of almost daily occurrence. Countless improve-
ments in existing machines, and in the methods and processes
of production, are continually enlarging the ability to pro-
duce, multiplying articles of consumption, and thus, of
necessity, swelling the great currents of trade.

The annual produce of gold, which, prior to 1848, was
fifty millions of dollars, has, since 1853, amounted in some
years to one hundred and fifty millions of dollars. " The
effect of this triple supply of gold," says Mr. Tooke, " has
been to set in motion and sustain a vast and increasing num-
ber of causes, all conducing to augment the real wealth and
resources of the world, by stimulating trade, enterprise, dis-
covery, and production." That the late increase of Great
Britain's trade is not due, in a controlling degree, to her
free-trade measures, is conclusively shown by the fact that
she is not alone in the enjoyment of an increasing commerce.



18



THE TARIFF POLICY OF



The foreign trade of Russia and of the United States
increased, during the past ten years, under the policy of
protection, in a greater ratio than that of Great Britain
under the policy of free-trade ; and, also, in a greater ratio
than that of France, which the English claim as a free-trade
ally.

The following comparative Table, D, shows the percentage
of increase (in round numbers) in the imports and the exports
of merchandise of each of the countries just mentioned,
during the ten years ending 1875 ; the mean amount of trade
in 1866 and 1867, and the mean amount of trade in 1874
and 1875, being taken as the basis of computation.

TABLE D.



COUNTRIES COMPARED.


Increase in Imports.


Increase in Exports.




104 per cent.


81 per cent.


United States 2 . .


33


72


Great Britain * ...


30 ,


25


France 1


13


16









Those who are accustomed so inconsiderately and flip-
pantly to denounce our tariff as prohibitory and destructive
of commerce would do well to ponder these facts.



THE TARIFF POLICY OF THE UNITED STATES, AND ITS
RELATION TO THAT OF ENGLAND.

As the fitness of our tariff policy depends very much on
the physical condition of the country, a glance at our indige-
nous resources, and at what we have done in the way of their
development, may not be out of place.

1 See third number of England's Statistical Abstract, for the principal for-
eign countries, pp. 32-36.

2 See Quarterly Report (No. 1) of the Chief of the Bureau of Statistics,
p. 101. Our exceptionally large exports in 1874 and 1875, probably raised our
percentage of increase above its normal rate.



ENGLAND AND THE UNITED STATES. 19

Spanning the continent, with the Atlantic Ocean on one
side and the almost boundless Pacific on the other, our Union
spreads, and stretches its magnificent zone of more than twenty
degrees in latitude and nearly three thousand miles in length.
In extent of coast, whether of sea, lake, or gulf ; in the num-
ber and value of harbors ; and in the means of inland naviga-
tion, whether of sound, lake, or river, what portion of the


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