William D. (William Darrah) Kelley.

Mr. Hurd's free trade resolution online

. (page 5 of 6)
Online LibraryWilliam D. (William Darrah) KelleyMr. Hurd's free trade resolution → online text (page 5 of 6)
Font size
QR-code for this ebook

persistently overlooking all the real obstacles in the way of our becoming again a
ship-building and ship-owning country. These obstacles I have endeavored to make
clear. I claim that we have certain great natural advantages for the construction
of the ship at home. Our natural resources in coal and iron and timber, the mate,
rials of which the ship is built, are superior to those of any other country. AS
to the value and necessity of building our own ships if we hope to own them, I call


youj attention to the pamplet, pages 40, 41 ; address, page 13, (showing the result
upon France of buying free ships, though she had every advantage of cheap cap-
ital and cheap labor to run them.) As to the national and economic reasons why
we should have a powerful merchant marine, see pamphlet, pages 45 to 53, inclu-
sive ; address, 22, 23, and 32.

But perhaps the most important point of all, and one that enters as a vital factor
into this question, is that of protecting American labor and f urnishing it employ-
ment by the fostering and encouragement of American industries. The elevation
of labor is the policy on which our Government was founded. The issues of the
future will be on the labor question. The interests of labor cannot safely be over-
looked or trifled with, and our policy with reference to all great national questions
must be shaped in accordance with the fundamental idea of our Government. The
workmen of this country will demand by their votes the development of our re-
sources by the competition of our own labor and capital. And that brings us to
the original cost of the ship, which the free-ship advocates say is the vital point.
"Why can we not build ships as cheap as England can ? Because 90 per cent, of the
ship is labor, and American labor costs more than English labor. Because our work,
ingmen cannot be ground down as European workingmen are. Two things con-
front us : to reduce the wages of labor to what they are in Europe, (see comparison
on page 67 of the pamphlet,) or to leave our forests and mines with their wealth,
undeveloped and thousands of workmen without employment. Have we not in
our own country most convincing evidences of the effect of such a policy ? Look at
the South, with her forests, her coal and iron beds^ and every advantage ; yet she
refused to adopt a policy of home development such as other sections pursued, and
is only now awakening to the consequences of such a course.

On page 73 and following, you will find some facts on another pressing subject
the opening of new markets for our rapidly increasing surplus products ; also the
instructive history of some efforts made in that direction. See also pages 24 and
following of the address.

In regard to the facts as to oppressive taxation (pages 26, 27, pamphlet, and pages
11 and 12 of the address,) it may be claimed that this is a local tax of New York.
So it is, but it is a tax that affects something like three-fourths of our entire ship-
ping in the foreign trade ; and I believe there are local taxes also at the other principal
ports. This whole matter should be regulated and protected by a national law,
placing our foreign shipping on equal terms in all ports and giving it all the ad-
vantages possessed by foreign ships entering our harbors.

"W hen it is said that we cannot build the ship as cheap, as other nations, I ask
your attention to what we have done with the locomotive, (as shown on pages 18
and 19 of the address.) This proves what we can do with a fair chance and wise
encouragement. And the same thing can be done in the case of the ship as has
been done in the case of the locomotive. For what we have done in iron ship-
building, indeed, against every kind of obstacle, see pages 54 and 55 of the pam-
phlet. We need more ships than any other nation, since we have more surplus
products to carry than any other. We have superior resources, the most skilled
and energetic workmen, the best seamen in the world. Can there be any good
reason why we should not build and own the ships in which our products are
carried ?

In view of the vast freighting business whose profits we may and should secure
to our own people, in view of the great national advantages accruing from both the
building and owning of ships and the extension of our commerce by means of them,
can we afford to be and remain dependent for our ships or carrying upon a foreign
nation ? On this point see pages 6 and 7 of the pamphlet.

As you are doubtless well aware, for fifteen years this subject has been pressed
upon Congress by the free-ship advocates, yet they have never brought forward any


argument but that of first cost, never anything that would not make us dependent
upon a foreign country that country always being England, the only one that can
build iron ships or supply us with the raw material. Why was this ? It could not
be that they were ignorant of the many obstacles which I have pointed out. W a s
it because they did not want to make them known, as that would not serve their
interest ? If buying cheap ships is all we want, why are not France and Germany
great carrying and ship-owning nations ? They have the right to buy ships where
they can buy them the cheapest. On this point, see pamphlet, pages 40, 41 ; address,
page 13.

England has always recognized that only a ship-building nation can be a ship-
owning nation to any extent. In 1840, when she was losing her carrying trade be-
cause we could build the cheapest, fastest clipper-ships, she began to develop the iron
ship that she might supply her own wants. And to develop the iron ship, which cost
her double what she paid us for a wooden ship, she has paid since 1840, call it sub-
sidy or what you will, over two hundred million dollars. "With one hand, by her wise
and generous policy, she paid out this vast sum to her own merchants and people,
while with the other she gathered a thousandfold from our Treasury. So when the
civil war came upon us and gave her an advantage, with her large capital invested,
she was able to drive us from the sea. There is a lesson for us in this policy which
she has pursued with such results. The free-ship advocate will say that part of that
policy was in buying where she could buy ships cheapest ; but she never bought
any iron ships ; her policy was to encourage the building of them at home, until
like ourselves with the locomotive, she could build them cheaper than any other
nation; What was the meaning of the outcry that has been of late months, and
joined in equally by both parties, about the Chinese ? What is the objection to
cheap labor ? Simply that it is cheap, and that its employment must result either
in lowering the wages of American workingmen or taking their work from them.
And no party would be likely to advocate such a course as that. Yet I sincerely
believe that even Chinese labor, bad as it would be for American workmen, would
not be so bad for them and the country as free trade. Since it would at least be
better to have the labor done in our own country and the money kept at home, and
our own resources developed than to buy the products of cheap labor abroad, drain-
ing our Treasury of its gold and sending it to circulate among foreign workingmen,
and pay taxes for the support of a foreign government each year $10,000,000.

We do not want either alternative, and we need not accept it. While it would
undoubtedly be better for us to build ships in our own yards even by Chinese cheap
labor than to buy them, in China or England, or any other foreign market, we do
not want to do either. If there is any principle at all in this labor problem, if there
be any justice in this outcry against the Chinese, there certainly is as much justice
in claiming protection for that labor which makes up 90 per cent, of the ship's

While free trade would introduce a ruinous competition with American labor, yet
when the European workingman comes to make his home here his labor produces no
such result, and he is welcome to all our advantages. That proves the value and
difference of having the work done in our own country in order that its advantages
may be secured by ourselves. Create a demand for the ship by removing the
obstacles and placing us on equal terms with the shipping of other nations engaged
in the foreign trade by pursuing a wise policy such as England has pursued,
and there will be no trouble about the original cost. It is now only 15 percent.,
though we have but begun the development of our iron ship-building interest, la
a short time we should be able to compete with foreign builders on equal terms.

The point of economic national defense is also an important one. The policy of
our Government has been opposed to a large standing army. Importance has at-
tached, therefore, to the maintenance of an efficient citizen soldiery.


The statesmen who passed the navigation laws recognized the great extentof our
coasts, and framed those laws so that by holding Ainerican-built ships in allegiance
to our flag we might have a militia on the sea, ready and equipped at all times to
be called into Government service, yet costing the nation nothing in time of peace.
And I may say that the one hundred iron steamships built in this country since
1870, manned as they are by as able officers, engineers, and sailors as any in the
world, would be worth more to the Government in the event of a war than our Xavy.
Should we destroy the power that creates all this ? Repeal our navigation laws, if
you will, but mark the consequence. In case you get into a foreign war, this fleet
can hoist a foreign flag, leave you, go where it can earn the most money, free itself
from American taxation, and then return when the war is over.

What a merchant marine this would be in such an exigency. The whole ques-
tion resolves itself into this, whether this country, with more goods to carry, with
more need of ships, with more raw material to use, with better natural advantages,
with more skilled labor and better energy, and with more coast to defend than any
other, shall be independent and build its own ships, thus encouraging all its indus-
tries and protecting its own labor on which the foundations of this Government
were laid, or shall it become dependent entirely upon a foreign nation for ships, and
let its own workingmen shift for themselves when the bread has been taken from
their mouths? To do the latter would be to refuse the ad vantages God has given us.

Make this issue, and when the people come to understand it there will be no ques-
tion as to how they will decide. Remember, too, in dealing with this subject, that
all the nations of the world, except England, are interested in having more than
one country that can build ships.


While the gentleman is ruminating upon the ingratitude of Ameri-
can ship-builders generally, and of the Messrs. Cramp and John Roach
specially, let me proceed to consider his seventh proposition, which is :

A protective tariff increases the possibility of the crime of smuggling.

The indent of the gentleman is not very clearly expressed. If he
means the possibility of increased profits to the successful smuggler,
I admit the proposition. The larger the duty the greater must be the
gain by its evasion. If, on the other hand, he intended to assert
that a high tariff increases the tendency to smuggle, I deny the asser-
tion, and refer, in support of my position, to the fact that the neces-
sity of repealing the duty on diamonds, the lowest duty known to our
tariff, is often urged because, low as it is, it invites smuggling to such
an extent as to damage honest importers. y

As the gentleman seems to have confined his study of economic
questions to theoretic writers, he is probably not aware that more
than thirty years ago a committee appointed by this House to con-
sider and report on the commercial relations of the United States
with all foreign nations embodied in its report part of a memorial
presented by the class of commerce of the Society for the Promotion
of Commerce and Industry in Geneva, in which manufacturers of
watches upon which when imported into this country there was a
duty of but 10 per cent, prayed that it should be reduced to 5 per
cent., in order to induce Swiss manufacturers less conscientious than


themselves to abandon the practice of accompanying their exports
with false and fraudulent invoices. From this appeal, as I find it
in the report of the committee of the House, I submit the following
extract :

If, in casting the eye over "Western Switzerland, we should inquire what articles
form the basis of our exchange with the United States, we would find that the
variety is exceedingly limited, though in value they are quite important. First,
watches, which pay an import duty of 10 per cent, in the ports of the United
States. The opinion is general among the watch manufacturers of Geneva that
this duty is moderate, and they would ribt think of asking a reduction unless, in-
deed, they should be actuated in doing so by considerations of morality and jus-
tice, resulting from a belief that if the duty were reduced by o per cent, it would
remove every inducement on the part of the manufacturers to make false declara-
tions, and would thus protect the honest and conscientious dealer from the disad-
vantages under whicl} he is placed by declarations of value below the real cost of
the merchandise ; hence a reduction of this duty by one-half would seem to be de-
manded by expediency, as it would unquestionably regulate and extend the trade.

When the gentleman remembers that the object of trade is profit,
he will see that any rate of duty holds out inducements not only to
the smuggler to ply his trade, but also to the consignor, who may in-
voice his goods at lower prices than those at which he sells, and thereby
defraud the government to whose country he exports of the duties to
which it is entitled.

While the human heart remains as desperately wicked as it is, and
while ambition and avarice prompt men to lawless deeds, any rate of
duty will offer possibilities for the crime of smuggling. If the gentle-
man would put an end to that criminal practice, he must accept the
dogma propounded to the American people by the Cobden Club, that
free trade requires the abolition of all American custom-houses and
the maintenance of our Government by internal taxation alone.



The eighth proposition of the gentleman is :

A protective tariff shuts out the American manufacturer from the markets of
the world

To this proposition he appends the following argument :

Mexico and South America are supplied with their manufactured goods by Eng-
land. Our best interests demand that the protective barrier our legislation has
erected shall be broken down, that American skill and enteiprise may have an op-
portunity to compete with foreign manufactures everywhere. Our manufactures
need more an increase of market, by which foreign capital can be brought into
this country, than protective legislation, which takes money from one American
pocket to put it into another.

To answer all this I refer the gentleman to my rejoinder to his first
proposition, and say to him that whatever article we produce in ex-
cess of the demands of the home market is exported and finds ready
sale in foreign countries. They are comparatively few, and are com-


mended to foreign consumers by the excellence of their quality.
They embrace among other things every variety of saws, sewiug-ma-
chines, the better class of watches, surgical instruments, locomo-
tives, passenger cars, especially street cars, butter, cheese, and. lard.
Our protective legislation has erected no barrier against the export
of the productions of American skill and enterprise. On the con-
trary, by increasing our production ib constantly adds to our power
to export. The protective system by building up centers of industry
in every part of the country has* created a home demand for 90 per
cent, of our cereals, 'provisions, and other farm products. The sur-
plus we export. We also export petroleum, cotton, and tobacco, be-
cause we produce each year more than the home market can consume.
For the same reason China and Japan export raw silk and tea ; India,
raw jute, dye stuffs, and crude drugs ; Brazil, coffee ; France, wines
and manufactured silks; and England, manufactures in general.
When by the persistent maintenance of an adequately protective sys-
tem the capacity of our factories shall exceed the home demand, our
export of manufactured goods will make itself felt in the markets of
the world.

If, as the gentleman asserts, it be true that our protective tariff is
a barrier to exports or a restriction upon international trade, how
will he explain the immense progress which characterizes our for-
eign trade, both in the matter of exports and imports. The year

1879 showed an excess of both over that of any preceding year, and
the following paragraph, taken from a leading mercantile journal of
free-trade proclivities, will show how much those of I860 exceeded
those of 1879 :

The value of the imports of merchandise into the United States during the cal-
endar year of 1880 was $696,803,433, an increase of $183,200,637 over the imports of
1879. The specie value of exports during the same period was $889,649,840, an in-
crease of $124,490,015 over 1879. Excess of exports over imports in 1880, $192,846, 407.
The value of exports of merchandise during the month of December last 'yas
$98,856,632. being larger than during any previous month in the history of the coun-
try. The excess of imports of gold and silver coin and bullion during the year

1880 was $69,229,822, against $67,375,960 in 1879.

Damaging to the gentleman's theories as are the facts presented by
this paragraph, he may take refuge in the suggestion that I have
chosen an exceptional period and drawn a general conclusion from an
individual instance. In this he would however be mistaken. I am
happily able to present a table of our annual exports and imports for
a period of twenty years, which shows that our foreign trade during
nineteen years of protection expanded from a total of $479,555,941 to
a total of $1,480,305,239. Appended to the admirable reply of Dr. John
L. Hayes, of Boston, to the impudent letter of Augustus Mongredien,
to which I have referred, I find the following note, which shows how


gradual yet how rapid has been the growth of our foreign trade
under a protective tariff :

That protection increases foreign commerce, both imports and exports, is most
remarkably shown by twenty years' experience under the Merrill tariff, with its
complements and improvements, as shown in the following table, compiled from
the reports of the Bureau of Statistics, giving the total of all the imports and ex-
ports of merchandise by the United States in each fiscal year, from 1861 to 1880 :

Fiscal years ending June 30

Merchandise Gold value.

Net imports.

Domestic ex-
port *.

Total foreign


|274, 656, 325
178, 330, 200
225, 375, 280
301, 113, 322
209, 656, 525
423, 470, 646
381, 041, 764
344, 873, 441
406, 555, 379
505, 802, 414
610, 904, 622
624, 689, 727
550, 556, 723
518, 846, 825
445, 938, 766
438, 518, 130
423, 895, 034
433, 679, 124

$204, 899, 616
179, 644, 024
186, 003, 912
143, 504, 027
136, 940, 248
337, 518, 102
279, 786, h09
269, 389, 900
275, 166, 097
376, 616, 473
428, 398, 908
428, 487, 131
505, 033, 439
569, 433, 421
499, 284. 100
525, 582, 247
589, 670, 224
680, 709, 268
698, 340, 790
824, 106, 799

$479, 555, 941
357, 974, 224
411, 379, 192
444, 617, 349
346, 596, 773
760, J?88, 748
660, 828, 573
614, 263, 341
681, 722, 076
796, 419, 586
934, 201, 322
1, 039, 391, 753
1, 129, 723, 166
1, 119, 990, 144
1, 018, 130, 9-25
971, 521, 013
1, 028, 188, 354
1, 103, 604, 302
1, 132. 019, 914
1, 480; 305, 239












1873 *.



1876 .





The gentleman, when speaking in support of his resolution, referred
to the state of our trade in 1860, when the rate of duty was, he said,
but about 18 per cent. This was an unfoittmate reference. We
were then under the lowest tariff, that of 1857, which has prevailed
since the peace of 1815. What was the condition of the people and
the Government in 1860 ? The people were without employment and
want pervaded every section of the country. So utterly had the
credit of the Government disappeared that when it invited all the
world to bid for a loan of $5,000,000 which Congress had authorized,
it received bids for but $2,500,000 at annual rates of interest ranging
from 8 to 32 per cent. What our exports and imports were for that
year I cannot atthismoment say, but the foregoing table enables me to
speak of 1861, the trade of which year was conducted under the law of
1857. In that year we imported $274,656,325, and our total trade, ex-
ports and imports, amounted to $479,555,941. Since then we have had
nineteen consecutive years of the highest ranges of duties ever known
to the American people. The trade of 1880 having been under the rate
of 46f per cent., if the gentleman's theory were correct we should have
imported less than in 1860, and exported less, because, he tells us, that if


we do not take commodities from foreign nations they cannot take our
goods that trade is mere exchange of commodities. Now, it happens
that in 1880 we imported $656,198,440 and exported $824,106,799. In
what did we receive the larger part of the difference between our im-
ports of merchandise and our exports ? Gold, sir; gold. Whether we
buy from them or not, nations take from us those things which they
must have and of which we produce a surplus, and pay for them if need
be with gold. Thus we who, but a short time since, could not maintain
specie payments, are now said to have the largest and most rapidly
increasing sto6k of ^old of any of the commercial nations of the world.

Let us look at this thing from another point of view. Our total
commerce, including imports and exports, in 1861, under a purely
revenue tariff, was $479,000,000, while in 1880, under our highly pro-
tective duties, more than $1,000,000,000 had been added to this amount,
for our foreign trade last year amounted to more than $1,480,000,000.
The gentleman should have given some consideration to the actual
condition of the industries and trade of his country before commit-
ting himself anew to propositions which were impressed upon his
youthful mind by indolent professors who found it easier to accept
sophisms, which had been collated and illustrated in British text-
books, than to give practical study to the questions involved in a
true social science.

The suggestion that a protective tariff restricts external trade is
not original with the gentleman. Sir John Byles discussed it with
the free-traders of England in the first edition of his Sophisms. In
chapter 10, under the caption, Protection would destroy External
Trade, he says :

One answer to this assertion is an appeal to facts. Ko nation has adopted the
theory and practice of protection to the same extent as England ; no nation has at
the same time enjoyed so extensive and lucrative a foreign trade. For centuries
the protective policy has been unquestioned and triumphant ; for centuries our for-
eign trade has been steadily augmenting. The strictest protection in, the world
has coincided with the greatest foreign trade in the world.

In truth, the domestic activity, industry, and prosperity, fostered by the pro-
tective system, is the surest basis of a permanent and extensive and mutual for-
eign trade.

In the first place, with protection and a certain home market have arisen the
means of purchase. Under a strict and jealous system of protection we have seen
the rise of Manchester, Birmingham, Sheffield, Merthyr, Leeds, Glasgow, Hudders-
field, Bradford, Nottingham, Coventry, Leicester. We have seen skill and ma-
chinery brought to perfection. Protection has not blunted the invention or super-
seded the ingenuity of our countrymen. On the contrary, our cottons, and woolens,
and hardware were the best in the world. "What England would have been wit^ut
protection from foreign manufactures, we know not. She might have been what
Ireland now is without protection from British manufactures. But it is certain
that with protection the means of purchase have been created and multiplied in a

1 2 3 5

Online LibraryWilliam D. (William Darrah) KelleyMr. Hurd's free trade resolution → online text (page 5 of 6)