William D. (William Darrah) Kelley.

Mr. Hurd's free trade resolution online

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direct grant to foreign producers of that article of whatever sum the
Government might have collected as duty upon it. The price of qui-
nine is higher in our markets to-day than it was when the duty was
repealed, or had averaged while our manufacturers were, under a pro-
tective duty, employing workmen in its production.


Is the gentleman's second proposition more tenable than the one
we have just considered ? It is that " a tariff for protection, so
called, does not in most cases protect the interest it pretends to fos-
ter." If, as the gentleman asserts in his fourth proposition, the ob-


ject of a tariff is to build up cue citizen at the expense of another,
I admit the truth of this proposition, and that our protective tariffs
have been costly devices for enriching producers at the expense of
consumers. But I affirm that such is not the object or effect of a
protective tariff. The purpose and effect of such a tariff is to pro-
tect American citizens in the fair and reasonable enjoyment of the
home market, and by doing this to develop the material resources
of the country and the genius, tact, and industry of the people. The
action of such a law being general, it cannot promote monopolies,
but does invite free competition in the protected industry. When
recapitulating the gentleman's propositions I failed to state as I
should have done that he had appended to each of them a short
" stump speech." I refer to the fact now, because I propose to refute
the proposition under consideration by quoting part of the speech
thereto appended. Here the gentleman says :

While at first it may bring large profits to those engaged in the manufacturing
which is assumed to be protected, it soon, by these very profits, invites many persons
into the business.

To this statement I assent. A protective tariff always promotes
domestic competition, and thereby cheapens protected goods. But
the gentleman does not stop here. He proceeds to say :

From which result overproduction, overstocking of the market, low prices, re-
duction of the hours of labor, shutting down, at least temporarily, of the work-
shops, embarrassment to the proprietor, and, in many instances, final bankruptcy,
in which the large profits made at first are swallowed up, and the large wages at first
paid workmen, if saved up at all, are consumed in waiting for a business revival,
which, if it does come, will inevitably be attended by the same consequences.

In these suggestions the gentleman confounds causes which are
absolutely independent of each other. He ascribes to the action of
protective tariffs effects which were due to the unwise and unpatriotic
legislation which repealed those laws after manufactures had been
created and prosperous communities of industrious families been
congregated about there. The terrible consequences he portrays are
not due to protection but to the vacillation which characterized our
legislation prior to 1861. No preceding decade of our industrial
history was as free from such crises as he refers to as have been the
twenty years since the passage of the Morrill tariff bill.

Were it the object or effect of a protective tariff to confer benefits
on one class of citizens at the expense of another class, I would op-
pose such legislation with all my power ; but, as the gentleman has
declared, the effect of protective duties is to create new branches of
domestic industry, which, if found to be profitable, soon invite others
to engage in them and to give them permanence. Thus, as I have
shown, it has been with cast-steel, silk, and Bessemer rails, and these
are but illustrative cases of which hundreds might be presented. Per-


haps the most striking in the world's history is that of beet-root sugar,
which Bonaparte created by imposing duties on foreign sugar that
made its importation almost impossible, and offering enormous boun-
ties to those who should produce the most beets from an acre of
French land, or the most sugar from a ton of French beets.

That industry is now a cardinal source of revenue to France, Ger-
many, and other continental nations. It yields 50 per cent, of the
world's supply of sweets ; and had it not been created by the foster-
ing care of the French Government no man can imagine the price
sugar would now command, or the proportion of the people of Chris-
tendom who would have to forego the use of so expensive a luxury as
it would be. In this connection is it not pertinent to inquire what
would be the price of cast-steel, of silk goods, of Bessemer rails, were
the world deprived of the supply created by American labor, and
which could not have been created but for the beneficent influence
of the protective tariffs which have prevailed during the last twenty
years ?

I have said that the gentleman in attempting to portray the effects
of protection confounded causes, and ascribed to the protective sys-
tem the ruinous consequences of the frequent alternations between
protection and free trade which have been inflicted upon the people
by democratic theorists. To assume that if those who under assur-
ance of protection organized a new industry found it profitable their
success would cause an " overstocking of the market, low prices,
reduction of the hours of labor, shutting down, at least temporarily,
of the workshops, embarrassment to the proprietor, and in many in-
stances final bankruptcy," &c., ia to assume that the enterprising
men of America are wanting in common sense and common prudence ;
and that on a more show of a chance for profits, they will without
investigating the markets or knowing the action of others in the
same direction, risk their capital and character in rash experiments.
Such incidents as the gentleman enumerates, in which the capital of
discreet men has been swallowed up and their laboring people ruined,
have occurred and will again occur whenever the legislation of the
United States shall be confided, as it has too often been, to a Congress
that will act upon the theories propounded by the gentleman. They
can never be produced by a protective tariff. On this point I appeal
confidently to American history.


The war of 1812 and the embargo laid by Britain's " orders in
council," called into existence many workshops and small factories ;
but when the war closed there was no tariff for the protection of the
capital embarked in these shops or the wages of the laborers they em-
ployed. Free trade and sailors' rights was the war-cry. During our
colonial days the British Government had, by a succession of statutory


provisions, prohibited to the colonists almost every form of manu-
facture, and now she saw her chance to reduce to commercial de-
pendence the people of the States whose political independence she
had been compelled to acknowledge. The treaty of peace was signed
on the 24th of December, 1814, but it was not ratified until 1815, in
which year Mr. Henry Brougham, afterward Lord Brougham, in the
course of a speech in the House of Commons, appealed to the manu-
facturers of England to make the pecuniary sacrifice required to
suppress the manufactures called into existence in the United States
by the recent war. These were his words :

The peace of America has produced somewhat of the same effect, though I am
very far from placing the vast exports which it occasioned upon the same footing
with those to the European market the year before, Loth because ultimately the
Americans will pay, which the exhausted state of the continent renders very un-
likely, and because it was well worth while to incur a loss upon the first exportation
in order by the glut to stifle in the cradle those rising manufactures in the United
States, which the war has forced into existence contrary to the natural course of

The wealthy manufacturers of England were prompt to act on
Brougham's suggestion, and in 1816 began a period of suffering and
depression for the American people such as they had never experi-
enced. Workshops were closed, and working people without employ-
ment were reduced to pauperism. The capital that had been invested
in workshops and factories was lost, and enterprise saw no field in
which it might profitably engage. From year to year things grew
worse, and Cobbett, in his preface to Gouge on Banking, records the
fact that in 1821 the best properties in Philadelphia, in which city
he then lived, which were subject to mortgage or ground-rent, passed
without additional consideration to the holder of the mortgage or
ground-rent, the tenant in fee being glad to escape the costs of suit
and a judgment for arrears of interest or rent which might cloud his
future life.

It was this long period of suffering that compelled Congress to give
the American people the protective tariff of 1824, the effect of which
on their social condition was little less than magical. Capital, as-
sured by a protective tariff, of the local market, opened mines, re-
lighted the fires in forge and furnace, set looms and spindles to work,
and constructed factories larger than had ever existed in the coun-
try. So palpable were the beneficent effects of the tariff of 1824 that
its rates were increased by the law of 1828 and its provisions extended
to branches of industry which had come into existence during the in-
tervening four years. The impulse given to production by this reas-
surance and extension of protection gave a new impulse to manu-

Immigration increased ; capital accumulated and was quickly re-
invested in manufactures. The country was prosperous and the reve-


nues of the Government abundant." There was no " overstocking of
the market ; " prices did not fall so low as to force a " reduction of
the hours of labor " or lead to " embarrassment to the proprietor ; "
nor were the wages of workingmen " consumed in waiting for a busi-
ness revival." It was an era of unprecedented prosperity to the Amer-
ican people, in which workmen came to be employers and workshops
expanded to the dimension of factories. The future was full of prom-
ise. The American system, as Mr. Clay had been pleased to call the
protective policy, promised to secure commercial and financial inde-
pendence to the country ; but alas for that country ! Calhoun and
others, who then believed in the truth of the propositions propounded
by my friend from Ohio, threatened nullification and disunion as the
consequence of an attempt on the part of the Government to longer
maintain and enforce its tariff laws. What followed we all know.
To avert the possibility of war, Mr. Clay introduced his fatal com-
promise bill, by which duties were to be reduced 10 per cent, each
year until they should reach what the free-trade party of the country
were willing to recognize as a revenue standard.

Now came the consequences portrayed by the gentleman. Free
trade did what he charges upon protection. Our markets were
promptly flooded with foreign goods by British monopolists who were
willing to make the sacrifice needed to secure the destruction of our
prosperous and expanding industries ; prices fell, factories were run
for short hours, wages were reduced, factories were closed, bank-
ruptcy overtook their proprietors, workmen were idle, prosperous in-
dustrial centers were converted into the abodes of idleness and aggre-
gations of want, our specie was drawn from us in payment for foreign
goods, our banks failed, and the credit of the Government was destroyed.
The administration of Mr. Tyler sent an agent, General William Rob-
inson, of Pennsylvania, to England to negotiate certain credits which
Congress had authorized, but returning disheartened he reported to
the Government that he had been unable to find a banker who was
willing to take the responsibility of putting on the market an Amer-
ican loan for even so small a sum as $2,500,000. I need not moralize
on these facts.

How were the Government and people rescued from their deplora-
ble condition ? A bankrupt law relieved enterprise from the debts
which overwhelmed it, and the protective tariff of 1842 rekindled the
fires in forge and furnace, and cheered the spinner and weaver with
the music of the spindle and the loom. The same happy effects re-
sulted from the protective tariff of 1842 which had been produced by
those of 1824 and 1828. It unhappily lasted but four years. The
election of 1844 restored the democratic party to power, and though it
had carried the States of Pennsylvania and New Jersey by the cry of
" Polk, Dallas, and the tariff of 1842," its first great congressional


work was to supplant the protective tariff of 1842 by Robert J.
Walker's revenue tariff, now known as the tariff of 1846, which went
into effect in 1847.

The decade which followed that year was a memorable one. It
gave us the gold of California, of which, in less than ten years, we
mined $1,100,000,000. It was during that decade that we gave Europe
the first intimation of our ability to supply whatever deficiency in
food might occur throughout the world. The potato rot decimated
Ireland, affected the other British Islands, and spread to the Conti-
nent of Europe, and we exported in one year the then unprecedented
amount of sixty-eight million dollars' worth of grain. The gold of
California and the famine which prostrated the Irish people swelled
the tide, of immigration to unwonted numbers, and yet our people
were not prosperous. We imported and consumed immense quanti-
ties of foreign goods, and as the quantity of these increased the
demand for the labor of American workmen diminished. We imported
coal for use in manufactories and the propulsion of locomotives.
We imported rails to lay over our coal-fields and iron-beds. Wages
fell to rates as low as they had been in 1820 and 1821, or in 1840 and
1841. The $1,100,000,000 of California gold had fled from us as from
a pestilence. We had nothing to show for our unusual exports of
grain and provisions.

The resources of the Government were shrinking monthly, and its
credit was again destroyed ; and in a little less than ten years from the
going into effect of the re venue tariff of 1846 the en tire banking system
of the country collapsed, the first great institution to fail having
been the Ohio Life and Trust Company, and the second the Phila-
delphi a, Pennsylvania Bank. The application of the principles enun-
ciated in the gentleman's resolution to the industries of a country
of abounding prosperity had worked its inevitable result. The people
were prostrated, idle, and discontented. The political and sectional
agitation of the country was aggravated by the depressed condition
of the people ; and when the South determined to better its condition
by war, their fellow-citizens of the North, to whom no field of enter-
prise or industry was open, said, " Be it so," and the war began.

I come now to my last illustration of the fact that it is not protec-
tion but free trade that works the direful influences portrayed by the
gentleman. We have had twenty years of protection, during which
we have grown in national importance as no nation ever grew ; dur-
ing which more has been done by art, science, and industry, to add
to the dignity of our country and exalt it in the esteem of the world,
to cement together its widely separated sections, and to secure pros-
perity alike to the individual citizen and the communities they con-
stitute, than has been done in any other epoch of our history. It is
true we had one period of depression during these twenty years. Jt


began in 1873. But, sir, it did not result from protection.- The tariff
laws that prevailed during that dark period had prevailed for years.
Under those laws, too, came the revival of business, and under them
we are en joying the boundless prosperity of to-day. And I may add
that the stagnation was more intense and protracted in free-trade
England than in protective America. We must, therefore, look outside
of the protective policy for the cause of that world- wide commercial
and industrial depression. As gentlemen on this floor all know, I find
its cause in the combined action of Germany and the United States in
an attempt to demonetize silver, and in the persistent effort that was
made to reduce the volume of American legal-tender paper money
then in use to $300,000,000. In proof of the correctness of this con-
clusion, I cite the fact that from the time we restored the silver dol-
lar to the list of our coins, Germany abandoned her sales of silver,
and we prohibited the Treasury from canceling any more of the
legal- tender Treasury notes, the downward tendency in commercial
circles ceased, and a now era of prosperity set in.

The tenor of the gentleman's resolution would lead one to sup-
pose that he regards the question of free trade and protection as in-
volving the whole of eocialscience, and yet he once alludes to the effect
of a change in the value of money ; it is thus shown that he has a
perception of the fact that the power to expand or contract the vol-
ume of money to which the business of a nation or the world has
adjusted itself has a relation to wages, to productive industry, and
to commerce. The protective policy has been a potent factor in the
promotion of the greatness of England, France, Germany, and the
United States ; but it has occurred in the history of all these nations,
save France, whose monetary policy is the wisest and most stable of
those of modern nations, that alternating contraction and inflation
of the currency has not only influenced but absolutely controlled their
productive power. An expanding currency had brought prices to the
figures of 1872-73. A contracting currency, resulting from the action
of Germany on the silver question and our concurrent legislation,
produced the world- wide commercial crisis of 1873, and was respon-
sible for the depression that increased in severity until we repealed
our unfortunate legislation and Germany abandoned her sales of sil-

But if the gentleman will have it that the question of protection
and free trade is the controlling factor in industrial science, I beg
him to compare the prosperity of the past twenty years, including
the years of depression, with the condition of our people under the
revenue tariff of Robert J. Walker. Here was one decade of free trade,
and the two decades which succeeded it in which the protective system
prevailed. A careful study of these two periods will show the gen-
tleman that I have referred him to a brief chapter of his country's
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history which will relieve him of all doubt as to the correctness of
the aphorism that history is philosophy teaching by example.


The third proposition of the Hurd resolution is that a protective
tariff does not increase the wages of workingmen. If this proposi-
tion be not an absurdity, there is no truth in the doctrine asserted,
correctly, as I think, by all free- traders, that the price of commodities
is controlled by the law of demand and supply. If a protective tariff
leads to the increase and diversification of employment, it must in-
crease the demand for and diminish the supply of labor. Not only do
protective duties do this, but they often open the means of honorable
subsistence to those who, having aptitude for delicate handicrafts, have
not the physical strength and endurance required for the rough labor
of the field or the workshop. The introduction of a new industry in-
evitably furnishes work and wages to men, women, or children thereby
employed in extracting hitherto unused raw materials from the earth
or gathering them from swamp or forest and converting them into
things of use or beauty. To this extent it increases the demand for
labor. Thus is the laborer strengthened in his demand for increase
of wages.

My apology for detaining the committee by referring to these palp-
able truisms is that the gentleman's resolution is predicated on the
assumption that they are false. Why are the laborers of the North
generally so much more intelligent than those of the South I Why
are they so much more comfortably housed, appareled, and fed ? How
account for that superior degree of self-respect and personal bearing
which characterizes them? Sir, I affirm, without fear of intelligent
contradiction, that the answer to all these questions is " because
twenty consecutive years of the protective policy have so diversified
the industries of the North that whatever special gift with which any
may have been endowed finds ready employment, and commands
wages according to its degree of value." How may the wages of
labor be increased if it be not by increasing and diversifying the
demand for it ? Without a protective tariff the almost exclusive
business of the American people would be the production of raw
materials for exportation to foreign countries for fabrication.

Again, sir, diversified industries furnish employment for every day
in the year, while persons engaged exclusively in agricultural pur-
suits cannot be continuously employed. To them the long winter, ex-
cept as to the brief hours required to feed stock, is a waste. There is
a season for planting, the seasons for tilling, and the harvest season.
During these periods the farmer's duties are exacting, and his labor
exhausting. But though he is necessarily idle much of the time
while his fields are frozen, and during long spells of wet weather,


there is nothing in his vocation to call forth any special gift with
which Providence may have endowed him. Contrast the monot-
onous life of an agricultural laborer with that of a keen artisan
in a manufacturing town, where each person is in daily contact with
others, and where emulation, whether it be in the pursuit of higher
position in the factory, or aspiration to the ownership of a home or
shop, or of distinction or profit as an inventor or operative more
skilled than his fellows, gives zest to each day's life.

I affirm that the great industries alluded to, the production of steel,
silk, and Bessemer rails, are the legitimate offspring of the protective
system ; and will the gentleman assert that the wages of the American
laborer or mechanic would be better if these industries had not been
developed in our midst ? Will he look at the great iron and steel works
in and around Terre Haute, Indiana, and say that the wages of labor
or the value of farm land and farm products in Clay and the adjoin-
ing counties of that State would have been as high as they are had
not the tariff protection of the last twenty years enabled, the owners
of the carboniferous deposits of those counties to find a near market
for their, until then, unrecognized mineral treasures ? Will he say
that the wages of labor in Indiana, Michigan, and Missouri would be
greater than they now are had not a protective tariff created such a
demand for American iron and steel as to justify the carrying of the
rich ores of the Marquette and Escanaba regions of Michigan and
the Iron Mountain of Missouri to the coal-fields of Indiana for smelt-
ing and conversion into rails and a thousand other useful forms ?

Has the employment of the thousands of men engaged in mining
this ore and the coal and limestone with which to fuse it tended to
the reduction of the wages of labor in what we of Philadelphia know
as the Western States? Does the gentleman know that the long
trains of heavily freighted cars that carry ore to Indiana to be smelted
near her coal-fields return freighted with fuel from that region to
the furnaces and forges of the iron regions of Michigan and Missouri,
or will he assert that the construction of the railroads by which these
raw materials are concentrated at the several points of conversion
has tended to dimmish wages ? Sir, who will say that the absorption
of an army of men by the railroad service haa not enlarged the de-
mand for, diminished the relative supply of, and thus enhanced the
price of labor?

Again let me recommend the gentleman to hold a little free conver-
sation with those gentlemen upon the floor of this House who repre-
sent the iron regions of Alabama and Georgia and learn from them
whether every Bessemer rail mill in the Northern States is not a cus-
tomer of those of his constituents who own what is believed to be the
richest deposit of spiegeleisen-ore in the world. Here again the col-
lateral value of established and diversified industries is shown in


the demand they create for increased means of transportation, and
the proprietors of the railroads connecting the district of my friend

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Online LibraryWilliam D. (William Darrah) KelleyMr. Hurd's free trade resolution → online text (page 2 of 6)