Mr. Hurd's free trade resolution online

furthers the interest of producers not only benefits them, but also augments the
common fund from which every consumer derives his income; and, on the other 1
hand, whatever ruins or injures producers ruins or injures the common fund on
which all consumers depend. * * * Reflect, and you will find that the wise and
really gainful policy is not that which prematurely grasps anyhow at cheapness,
but that which develops the producing power of the country. Our fathers, there-
fore, were right and we are wrong. They knew how to grow rich nationally aa
well as individually. "We have seen how their theory has everywhere been justi-
fied by experience in time past here and elsewhere. It is still justified in America,
in France, in Germany, in Russia.

DOES PROTECTION CONTRAVENE THE LAW OF SUPPLY AND DEMAND?

Leaving the gentleman to reconcile the contradictions involved in
his second and fourth propositions, and to reply to the argument of
Sir John Byles, I pass to the fifth proposition of his resolution, which
is as follows :

. A protective tariff disturbs the operation of the primal law of trade which gov-
erns all exchanges by the supply and demand of the articles to be exchanged.

To this assertion I offer a flat denial. It is not true. History contra-
dicts it our own history and that of other nations. England will
not permit an unprotected people to enjoy free trade between them-
selves even in domestic productions, or to manufacture their own
raw materials. Had the Congress of 1812-'14 enacted a tariff ade-
quately protective of the industries which the war was calling into
existence, Parliament would have appealed in vain through Henry
Brougham to the British manufacturers to incur a loss upon the first
exportation and thus by a glut to stifle those industries in the cradle.



23

Such a protective tariff instead of disturbing would have main-
tained the primal laws of trade, and enabled the American people to
proceed in the work of developing the producing forces of their coun-
try, and to thus create a capital with which they might soon under
the law of supply and demand enter freely into the exchanges of the
world. This appeal of Brougham's and the quick and effective re-
sponse made to it by the capitalists of Great Britain, were not excep-
tional facts. This course of enslaving younger and poorer nations,
preventing the development of their resources, destroying the freedom
of their trade, is part of the established policy of British capitalists,
and has at all times had the sanction of that oppressor of mankind,
the British Government. This policy is not only applied to strictly
foreign nations but British colonies, which carry the English language,
laws, and habits to remote points, and build up great communities, are
subjected to it, and, but for protective tariffs, would be its victims as
absolutely as are Ireland, India, Turkey, Egypt, the South American
States, and Japan.

In this connection I commend to the attention of the gentleman
from Ohio a little work now before me, entitled Outlines of an In-
dustrial Science, by David Syme. Mr. Syme is an Englishman who
emigrated many years ago to Australia. Editing a leading journal of
the colony, he has been a frequent and thoughtful contributor to the
periodical literature of England. It was in one of the great magazines
of London that I first met his name. Many of his essays have been
reproduced in this country, and the edition of his book now before
me bears the imprint of Henry Carey Baird & Co., Philadelphia. He
went to Australia a believer in the assumptions upon which free-
traders base their theories, but the necessities of his new country soon
demonstrated to him that the only way to make her trade free was
to protect her producers by an adequate system of duties against the
unfair use of British capital in the strangling of its infant industries
by the production of gluts in Australian markets. I prefer that he
shall answer this proposition of the gentleman to attempting a reply
in language of my own. When discussing the question of competition
as a means of securing freedom of trade, Mr. Syme says :

Even England, notwithstanding her free-trade proclivities, indirectly does all that
she can to prevent any real competition with her on the part of other countries,
and to this end her immense resources are used with crushing effect. At present
she practically enjoys a monopoly of many lucrative branches of manufacture.
"With her natural advantages in coal and iron, with her acquired advantages of
being the first in the field, and of having a numerous body of well-trained artisans,
and, above all, of the immense capital at her disposal, she would be able to main-
tain her manufacturing supremacy as long as the rate of wages is not materially in-
creased. Heronly danger lies in this direction. " Dear labor," says Mr. Brassey,
in Work and Wages, "is the greatest obstacle to the extension of British trade."
Hence the extreme solicitude displayed by the trading classes of England at the



present day on the question of wages ; bonce, also, the growing antagonism which
has sprung up of late years between them and the wages-earning class.

The manner in which English capital is used to maintain England's manufact-
uring supremacy is well understood abroad. In any quarter of the globe where a
competitor shows himself who is likely to interfere with her monopoly, immedi-
ately the capital of her manufacturers is massed in that particular quarter, and
goods are exported in large quantities and sold at such prices that outside compe-
tition is effectually crushed out. English manufacturers have been known to ex-
port goods to a distant market and sell them under cost price for years with a view
to getting the market into their own hands again. The modus operandi is inci-
dentally explained with muchnawete in a report published some years ago by order
of the House of Commons. " The laboring classes generally," says the author of
this report, " in the manufacturing districts of this country, and especially in the
iron and coal districts, are very little aware of the extent to which they are often
indebted for their being employed at all to the immense losses which their em-
ployers voluntarily incur in bad times in order to destroy foreign competition and
to gain and keep possession of foreign markets. Authentic instances are well
known of employers having in such times carried on their works at a loss amount-
ing in the aggregate to three or four hundred thousand pounds in the course of
three or four years. If the efforts of those who encourage the combinations to
restrict the amount of labor and to produce strikes were to be successful for any
length of time, the great accumulations of capital could not then be made which
enable a few of the most wealthy capitalists to ovenohelm all foreign competition in
times of great depression, and thus to clear the way for the whole trade to step iia
when prices revive and to carry on a great business before foreign capital can
again accumulate to such an extent as to be able to establish a competition in prices
with any chance of success. The large capitals of this country are the great in-
struments of warfare (if the expression may be allowed) against the competing-
capital of foreign countries, and are the most essential instruments now remaining
by which our manufacturing supremacy can be maintained."

" This," adds Mr. Syme, " I have no doubt is a very fair, as it is
certainly a very candid statement of the manner in which English
capital is used to crush out foreign competition." The report from
which he made this extract was that of the parliamentary commis-
sion appointed in 1854 to examine into the state of the population of
the mining districts.

Yes, Mr. Chairman, that commission uttered the truth when it de-
clared that the large capitals of England are the great instruments
of warfare by which the competition of foreign countries is crushed
by British monopolists j and the nation which would secure to its peo-
ple 'the right to develop its resources and trade freely among them-
selves can do so only by giving them the benefit of rates of duty
which will in seasons of commercial depression adequately protect
them against the warfare of banded monopolists acting under the
sanction of the British Government.

The Morrill tariff gave this mode of warfare its first real American re-
pulse. Its supplements have driven the conspiring invaders from oor
borders. But these British monopolists do not abandon the hope of de-
stroying their American rivals. They have adopted new methods and



30

now employ the pen and professorial office. They hope to persuade us
to surrender. Under the name of the Cobden Club they have an organ-
ization which embraces in its membership more than two hundred
members of Parliament and twelve of the fourteen members of the
present British Government. This club, composed as it is so largely
of members of the British Government and their parliamentary sup-
porters, has assumed the duty of teaching the American people polit-
ical economy and entered without concealment into our last political
campaign. In a letter prepared by Mr. Augustus Mongredien, which
it circulated in this country at its own cost and under its official stamp,
it appealed to the farmers of the United States to pledge themselves
in advance to unite with the gentleman from Ohio, his party, and the
banded capitalists of England in making war upon the industries of
the United States and the wages of the laborers they employ. Said
this impudent intermeddler in our domestic politics, after attempt-
ing by falsehood and misrepresentation to incense the farmers against
the manufacturers of our country, "every farmer should hold this
language to the candidates for Congress : "

I will only vote for you if you will vote for me, and voting for me means voting
in the House for a reduction of 5 per cent, every successive year on the import
duties until the whole are abolished.

Sir, I am a protectionist because I am an American. I am for
maintaining the independence of niy country and the welfare of my
countrymen against all comers. I would protect them against the
insidious arts of combined capital at the same cost, if need be, that I
would against a foreign army or navy. But happily they may be
defended without cost by the imposition of such duties on foreign
imports as will insure the development of the producing forces of
the country, " the men, the lands, the machinery, and the water
power." This peaceful defense will, if maintained, enrich the nation
and improve the condition of all its people, by giving them the ad-
vantage of " cheapness and accessibility." It is, I reiterate, not true
tha.t a protective tariff disturbs the operation of the primal laws of
trade. Such a tariff is, in view of the enormous capital of England,
and the oppressive manner in which it is combined and used, the only
means of securing to the American people the benefit of the primal
laws of trade.

IMMIGRATION ITS SOURCES AND VALUE.

Before passing from the consideration of this point, let me say that
the leading position in the family of nations which our country has so
suddenly assumed, is due more largely to our adherence to the protect-
ive policy during the last twenty years than to any other single cause.
By enabling us to diversify our industries this policy has offered occu-
pation and wages to skilled men in a thousand employments un-
known to us prior to 1860. By enabling us to offer more liberal wages



31

than any of our competitors, it has invited a stream of immigration
the magnitude of which is alarming the governments of the manu-
facturing nations of the world. Canada invites British immigrants.
The British Government, anxious to build up its American dominion,
promotes British migration to Canada ; but Canada adhered to the
policy of free trade until quite^ recently ; consequently she cannot
offer work and wages to skilled hands. Some two years ago she pro-
fessed to adopt the system of protection, and fashioned a tariff, the
object of which appears to be not so much to develop her resources
as to exclude American productions, when they might compete with
those of the British Islands ; but despite the efforts of her govern-
ment and that of England, she cannot induce skilled workmen to
remain within her limits.

During the last six months of the year just passed we received
more than 278,000 immigrants, aliens who came to make this country
their permanent residence. From Canada came 73,000, not on a
sudden impulse, but as part of a steady flow of immigration thence
to this country. Germany, too, gave us more than 73,000 of her sub-
jects, skilled, many of them, in agriculture, and many of them in the
mechanic arts. From among the farmers and skilled workingmen of
England and Wales came nearly thirty-five thousand, while poor,
down -trodden, and oppressed Ireland, impoverished as her people
are, was able to pay the passage of nearly thirty thousand of her
children. From Scotland came 7,000, while other countries, includ-
ing Austria, Sweden, France, and Switzerland sent us nearly sixty
thousand.

If our protective tariff is an oppressive wrong, why do people come
in such hordes to bear its burdens and endure its wrongs .1 If free
trade be a blessing, why do Englishmen, Welshmen, Scotchmen, and
Irishmen fly by tens of thousands from its blessings to bear the
curse of American protection ? Like the gentleman from Ohio, they
have all heard the teachings of the Cobden Club and other free-trade
organs of England; but unlike him, they have open eyes, they see
the poverty and ignorance to which British free trade dooms her
working people, and contrast their own condition with that of those
of their countrymen who have preceded them as immigrants. These
they learn are well fed, able to eat meat every day in the week and
every week in the year ; are well clothed, living in communities in
which the foreign observer, on Sunday or other holiday, cannot, as was
so often remarked by international visitors during the centennial
year, distinguish between the laboring and the capital class by the
apparel they wear or their bearing in public. " Where are your work.-
ing people ? n was a question pressed by thousands of intelligent ob-
servers during that year. They could not comprehend the fact that
the working classes of a country could live in snoh homes as were



32

indicated as those of the working classes of Philadelphia, or wear such
apparel as did the thousands of workmen they met daily in the great
halls and upon the grounds of the exhibition. This contrast which
my friend from Ohio has not perceived is known in every cabin on
the British Islands and -every hamlet on the continent, and stimulates
the immigration which is adding so vastly to our power and wealth.
But the gentleman may ask, " Does immigration add to our wealth ? "
I will not stop to reason the point with him, but will draw my reply
from a recent number of the Pall Mall Gazette. In the course of an
article under the title " Loss by Immigration," that journal says :

Immigration, no doubt, is a national safety-valve; but to insist that -wholesale
immigration of the population is the sole remedy for Ireland's Ols is not states-
manship, but suicide. It is not empty sentimentalism, but rather the coarsest ma-
terialism, -which justifies the protest against removing discontent by exiling the
population. Every immigrant represents a money value, so many pounds sterling,
which in New York is estimated at 200. Dr. Engel, head of the Prussian statis-
tical bureau, calculated fifteen years ago that it cost Germany over 100 to bring
up a member of the lower classes to the age of fifteen. Dr. Fabri, in his work on
colonization, places the cost at 150, every penny of which is spent before the cit-
izen becomes a producer instead of a consumer of wealth. He estimates the aver-
age net loss to Germany on every immigrant who leaves her shores at 100 ster-
ling, and it is found that the average capital brought over by each German immi-
grant who land s at New York is over 20. It is. therefore, a lo w esti mate to reckon
the net loss to Ireland by every immigrant unnecessarily forced beyond the sea at
100. Why should it be "patriotic " to make the States a present of that sum, and
41 sentimentalism " to employ a smaller sum in converting the peasant into a con-
tented landed proprietor at home ?

WHAT SHIP-BUILDERS SAY.

Is the gentleman's sixth proposition more tenable than any of those
that precede it ? It is as follows :

The present protective tariff has driven the American carrying trade from the
high seas by enhancing the price of materials which enter into the construction of
vessels so that American ship-builders cannot compete with foreigners engaged in



Again, the gentleman is at fault in fact and inference. The ap-
pearance upon the ocean of the British privateers for whose destruc-
tion of our commerce the Geneva convention gave us a judgment,
which the British Government accepted without demur and satisfied,
antedated the protective duties to which the gentleman ascribes the
driving of our carrying trade from the seas. Under the baneful in-
fluence of those privateers our carrying trade had disappeared long
before the war closed, in June, 1865 ; while most of the duties now
imposed by the several supplements to the Morrill bill of which the
gentleman complains have been enacted since the date of that event.
The duties which now foster sheep husbandry (so profitable to farm-
ers) and the manufacture of woolen and worsted goods, Bessemer
steel and rails, and other leading staples, were passed after the de-



33

struction of our carrying trade. I need not, however, elaborate
this point. There is not a builder of iron vessels in the United States
who does not stand ready to refute this proposition of the gentleman.
The extensive yards of William Cramp's Sons are crowded with iron
ships which the firm are building on contract for those who are to
use several of them in foreign trade ; and when, more than nine
years ago, an attempt was made to reduce the duties which gave
protection to the manufacturers of iron, that firm hastened to send
a protest against such reduction, of which the following is a copy :

PHILADELPHIA, PENNSYLVANIA, January 13, 1872.

DEAR SIK : Inasmuch as strenuous efforts are to be made during the present session
of Congress to repeal the duties on ship-building materials, on the plea that it will
aid American ship-builders and assist in building up our mercantile marine, and,
knowing that false impressions are prevalent in regard to this department of in-
dustry, we beg leave to call your attention to a few important facts, and to show
that such action would not be beneficial but detrimental to our interests.

If any benefits could be derived from the repeal of duties on ship-building mate-
rial, it would be chiefly in the construction of wooden ships. But steam is rapidly
and permanently supplanting sails, and this in turn necessitates the change from
wood to iron ; for steamships, to be profitable and safe, must be constructed of
iron.

Few persons are aware of the fact that it is absurd to talk of building iron ships
in this country of imported iron, for this cannot be done. One reason is that
nearly every piece of iron entering into their construction must be made to special
order ; and this fact, together with the necessity of rapid delivery, demands that
the iron mills should be near the ship-yards. And it is plain to every practical
ship-builder that if ships are to be constructed of foreign materials they will be
constructed in foreign lands.

We now have in our own yards five first-class iron steamships in process of con-
struction, with an aggregate tonnage of 13.0CO tons, which will require for their
construction 16,000,000 pounds of iron, and the ships, when completed, will cost
12,500,000 ; and yet the repeal of all the duties would not benefit us to the amount
of $10,000.

While the repeal of the duties would scarcely afford even a temporary gain, it
would, on the contrary, inflict upon us a permanent loss, by probably closing all
the furnaces and mills to which we must look for our supplies.

The efforts of free-traders to secure free materials are evidently only prelimi-
nary to the more dangerous purpose of securing free foreign ships, of which Eng-
land has a surplus of hundreds, of both wood and iron, which she would gladly
eell at any price to get possession of our coasting trade.

The idle ship-yards in this country are those devoted to building wooden ships.
There are six yards for building iron vessels in Philadelphia and vicinity, all of
which are full of work. We think there are in process of construction sixteen iron
steamers, seven of which range from 2,500 to 3,000 tons each.

Having been engaged thirty-five years in the construction of ships of every
class, we feel competent to speak as to our own needs ; and we are sure that we
speak the sentiments of all engaged in ship-building when we ask that Congress
shall not disturb the moderate protection afforded our iron manufacturers, but
rather let well enough alone, and adliere to the policy which, by multiplying fur-
naces and rolling-mills, will furnish us a constant supply of materials, cheap and
abundant.

W. CRAMP & SONS,

Hon. WILLIAM D. KELLEY. Wood and Iron Ship-lndlders.

3 KE



34

The then venerable head of the firm has meanwhile paid the debt
of nature, but his united sons continue the business and adhere to
the opinions expressed in this letter.

John Roach is the largest builder of ships in the United States, and
when recently examined by a sub-committee of the Senate Committee
on Finance, he stated that he carried more tonnage on the seas than
was held by the entire membership of the Chamber of Commerce of
New York. He therefore addressed the committee more as a ship-
owner than as a ship-builder. In the course of his examination he in-
vited the members of the sub-committee to consider a letter he had on
the 1st of January last addressed to each member of the whole commit-
tee. I beg leave to invite the attention of the gentleman to the follow-
ing extract from this letter, which, with that from the Messrs. Cramp,
will, I think, convince him that the ship-builders of this country
regard his labors in their behalf as superserviceable and misdirected.

Mr. Roach had previously sent to the members of the committee a
pamphlet and an address containing a thorough discussion of the whole
subject, to which references are made in the course of the extract,
and of which I have no doubt he would furnish copies to intelligent
investigators of this subject :

I mail you herewith, at the request of your committee, a copy of my pamphlet on
the American Carrying Trade, also a copy of an address delivered by me before
the convention of ship-owning and other commercial bodies for the encouragement
of the ocean commerce of the United States, held at Boston last October, and some
other documents, which I hope you will find of interest.

The chief thing to be borne in mind in considering this question is, that it is a
great national interest, both as a cheap means of defense and of carrying our prod-
ucts. It should be dealt with in the broadest and largest spirit. The policy that is
adopted must not be narrow or sectional, but national, broad, and liberal enough
to cover the whole country and conserve its best interests.

I desire here to call your attention to certain portions of the pamphlet and ad-
dress which I think deserve to be emphasized as worthy your special consideration.

The advocates of free ships claim three things as necessary to revive our ocean
carrying trade : 1. The repeal of the navigation laws. 2. Free material in every-
thing that enters into the construction of a ship. 3. The right to buy ships in the
cheapest market. The lack of this right is set down as one cause of our decline
as carriers.

The first claim you will find treated on pages 9, 24, 25, 29, 31 to 35, inclusive, of the
pamphlet, and on pages 15, 16, 23 of the address. The second claim is discussed on
pages 30 and 31 of the pamphlet, beginning at III. The third claim is discussed
on pages 21, 22, 26, 27, 28, and 63 of the pamphlet, and on pages 3, 4, 9 to 14, inclu-
sive, and 20 of the address.

It is certainly a most significant fact that in the discussion of this question the
free-ship advocates confine themselves so closely to the one point of original cost,