Democratic Sentinel, Volume 7, Number 5, Rensselaer, Jasper County, 2 March 1883 — THE PROTECTIVE SYSTEM. [ARTICLE]

THE PROTECTIVE SYSTEM.

How the Masses Are Taxed to Death to Enrich a Few Monopolists—The Iniquities of High Protection Made Plain to Every One’s Understanding. [From the Congressional Record.] Mr. Cox, of New York—When the gentleman from Maine [Mr. Reed] was discoursing the other day, after I had made some quotations from Bastiat, the French economist, he said that Bastiat, somehow or other, always looked at Paris and not at larger relations, such as those of France. He epitomized France in Paris. « Now, since he and others have renewed the talk about the robbery of the protective system, I would like to go back once more to my favorite, Bastiat. My friend from Viginia [Mr. Wise]' the other day called me to account because I had said that incidental protection was burglary while open protection was highway robbery. Now when I used that language I did not use it in the sense of being personal to any one. I did not mean that the member from Pennsylvania [Mr. Kelley] is a robber, of that my. friend from Virginia [Mr. Wise] was connected with my friend from Pennsylvania. I meant that there is a robbery, which takes from one and gives to another; and taken by the action and doctrine of one to despoil the other. This is done furtively and without consideration. ' Before I read from Bastiat on that subject, let me quote from Dr. Wayland. This is nearer home. It has a New England tenor. It has its morale. In summing up one his best chapters, he says: The whole effect of this mode of encouragement is to [)ay one man as much more as the bounty amounts to for producing an article than we should pay another man; that is, one man will do for It $5, and we engage another to do It forss, and give him $5 beside, for the sake of economy. , , He might have added that it is taken without the consent of the despoiled. Further:

It might be asked, by what right does society thus Interfere with the property of the Individual? When did the indltddual surrender this right? And how wise would it be for him to surrender it? It is in vain here to urge that society has the right to destroy individual property in cases of extreme necessity; because, in order to render this plea available, it must be shown that this is a case of extreme necessity. And, beside, it society destroy individual property in case of extreme necessity, it is always bound to make good the loss to the Individual. I think that, if the protected interests, were obliged to make good the loss which the system inflicts upon all other interests, the demand for protection would be less unjust than at present, and protection would be considerably less injurious.

2. But secondly: If a man assert that the wealth of a nation is the result of its consumption and not of its production, he must also assert that the hand of the prodigal and not that of the diligent maketh ricn; that industry and frugality are the sources not of wealth but of poverty; that Are and sword, devastation and murder, are national blessings; that we ought to pay other nations, instead of their paying us, for spoliations of property; that incendiaries should be rewarded instead of being hanged; and that the way to render a city rich, happy and prosperous is to reduce it to ashes. If a man really believe this —I do not say if he assert it—his case is beyond the reach of ratiocination, and he must be recommended to the kind attentions of a discreet and judicious medical adviser. Now what says Bastiat, whose logic is as graceful and as keen as the blade of Saladin ? An outburst of frankness often accomplishes more than the politest circumlocution. I made my little outburst the other day. It was about robbery and burglary. I brought thus the question home to members and their business, even in “sporadic” cases: To tell the truth, my good people, they are robbing you. It is harsh, but it is true. The words robbery, to rob, robber, will seem in very bad taste to many people. I say to them as Harpagon did to Elisle: Is it the word or the thing that alarms you? Whoever has fraudulently taken that which does not belong to him is guilty of robbery. (Penal Code, article 379.) To rob: To take furtively, or by force. (Dictionary of the Academy.) Robber: He who takes more than his due. (The same.) So I could find similar definitions in our dictionaries and in our criminalcodes. It is not necessary to go to France to know what robbery is; nor what robbery in the season” means. There are penalties attached to each', and we know which is the worst.

Now, does not the monopolist who, by a law of his own making, obliges me to pay him twenty francs for an article which I can get elsewhere for fifteen, take from me fraudulently five francs which belong to me? Does he not take it furtively or by force? Does he not require of me more than his due? He carries off, he takes, he demands, they will say; but not furtively or by force, which are the characteristics of robbery. When our tax-levy is burdened with five francs for the bounty which this monopolist takes off. carries or demands, what can be more furtive since few of us suspect it? And for those who are deceived, what can be more forced, since at the first refusal to pay, the officer is at our doors? Still, let the monopolists reassure themselves. These robberies by means of bounties or tariffs, even if they do violate equity as much as robbery, do not break the law; on the cofttrary, they are perpetrated through the law. They are all the worse for this, but they have nothing th do with criminal justice. Beside, willy-nilly, we are all robbers and robbed in the business. Though the author of this book cries “Stop thief!" when he buys, others can cry the same after him when he sells. If he differs from many of his countrymen, it is only in this: he knows that he loses more by this than he gains, and they do not; if they did know it the game would soon cease. Nor do I boast of having first given this thing its true name. More than sixty years ago Adam Smith said: "When manufacturers meet it may be expected that a conspiracy will be planned against the pockets of the public." Can we be astonished at this when the public pay no attention to it? An assembly of manufacturers deliberate officially under the name of Industrial League. What goes on there and what is decided upon? I give a very brief summary of the proceedings of one meeting: “A shipbuilder—Our mercantile marine is at the last gasp (warlike digression). It is not surprising. I can not build without iron. lean get it at 10 francs in the world’s market, but through the law the managers of the French forges compel me to pay them 15 francs. Thus they take 5 francs from me. I ask freedom to buy where I please. , . “An iron manufacturer—ln the world’s market I can obtain transportation for 20 francs. The ship-builder through the law requires 30. Thus he takes ten francs from me. He plunders me. I plunder him. It is all for the best. “A public official—The conclusion of the ship-builder’s argument is highly im- ' prudent. Oh, let us cultivate the touching union which makes our strength. If we relax an iota from the theory of protection, good-by to the whole of it ■ “The ship-builder—But, for us, protection is a failure. I repeat that the shipping is nearly gone. “A sailor —Very well, let us raise the discriminating duties against goods imported in foreign bottoms, and let the ship-builder, who now takes 30 francs from the public, hereafter take 40. "A Minister—The Government willpush to its extreme limits the admirable mechanism of these discriminating duties; but I fear that it will not answer the purpose. “A Government employment employe—You seem to be bothered about a very little matter. Is there any safety but in the bounty? If the Consumer is willing the tax-payer Is no less so. Let us pile on the taxes, and let the ship-builder be satisfied. I propose a bounty of 5 francs, to be taken from the public revenues, to be paid to the ship-builder for each quintal of iron that he uses. “Several voices—Seconded, seconded. “A farmer—l want a bounty of 3 francs for each bushel of wheat. "A weaver—And I 2 francs for each yard of cloth. , “The Presiding Officer—That is understood. Our meeting will have originated the system of drawbacks, and it will be its eternal glory. What branch of manufacturing can lose hereafter, when we have two so simple means of turning losses into gains—the tariff and drawbacks? The meeting is adjourned." Some supernatural vision must have shown me in a dream the coming appearance of the bounty (who knows if I did not suggest the thought to M. Dupin’?) when some months ago I wrote the following words: “It seems evident to me that protection, without changing its nature or effects, might take the form of a direct tax levied by the state and distributed in indemnifying bounties to privileged manufacturers. ” And, after having compared protective duties with the bounty: "I frankly avow my preference for the latter system. It seems to me more just, more economical and more truthful. More just, because

it society wishes to give gratuities to some of its members all should contribute; more economical, because it would save much of the expense of collection, and do away with many obstacles; and, finally. more truthful, because the nubile could see the operation plainly, and would know what was done." Since the opportunity is so kindly offered us, let us study this robbery by bounties. What is said of it will also apply to robbery by tariff, and as it is a little better disguised the direct will enenable us to understand indirect cheating. Thus the mind proceeds from the simple to the complex. But is there no simpler variety of robbery? Certainly, there is highway robbery; and all it needs is to be legalized, or, as they say nowadays, organized. I once read the following in somebody’s travels: “When we reached the Kingdom of A we found all industrial pursuits suffering. Agriculture groaned, manufactures complained,commerce murmured, the navy growled, and the Government did not know whom to listen to. - At first it thought of taxing all the discontented, and of dividing among them the proceeds of these taxes, after having taken its share, which would have been like the method of managing lotteries in our dear Spain. There are a thousand of you; the State takes tl from each one, cunningly steals $250, and then divides up $750 in greater or smaller sums among the players. The worthy hidalgo, who has received three-quarters of a dollar, forgetting that he has spent a whole one, is wild with joy, and runs to spend his shillings at the tavern. Something like this once happened in France. Barbarous as the country of A was, however, the Government did not trust the stupidity of the inhabitants enough to make them accept such a singular protection, and hence this was what it devised : “The country was intersected with roads. The Government had them measured exactly, and then said to the farmers; ‘All that you can steal from travelers between these boundaries is yours; let it serve you as a bounty, a protection, and an encouragement.’ It afterward assigned to each manufacturer and each ship-builder a bit of road to work up according to this formula: “Dono tibi et concede, “Vlrtutem et puissantiam, “Robbardi, “Pillageandi, “Stealandi. "Cheatandi, “Et Swindleandi, “Impune per totam istam, “Viam.

“Now, It has come to pass that the natives of the Kingdom of A —- arc so familiarized with this regime, and so accustomed to think only of what they steal and not of what is stolen from them, so habituated to look at pillage but from the pillager’s point of view, that they consider the sum of all these private robberies as a national profit and refuse to give up a system of protection without which, they say, no branch of industry can live." Do you say it is not possible that an entire nation could not see an increase of riches where the Inhabitants plundered one another? Why not? We have this belief in France, and every day we organise and practice reciprocal robbery under the name of bounties and protective tariffs. Let us exaggerate nothing, however; let us concede that, as far as the mode of collection and the collateral circumstances are concerned, the system in the Kingdom of A may be worse than ours; but let us say, also, that as far as principles and necessary results are concerned, there is not an atom of difference between these two kinds of robbery legally organized to eke out the profits of industry. Observe, that if highway robbery presents some difficulties of execution, it has also certain advantages which are not found in the tariff robbery. For instance, an equitable division can be made among all the plunderers. It is not thus with tariffs. They are by nature impotent to protect certain classes of society, such as artisans, merchants, literary men, lawyers, soldiers, etc. It is true that bounty-robbery allows of Infinite subdivisions, and in this respect does not vleld In perfection to highway robbery, but on the other hand it often leads to results which are so odd and foolish that the natives of the Kingdom of A may laugh at it with great reason. That which the party loses in highway robbery is gained by the robber. The article remains, at least, in the country. But under the dominion of bounty-robbery that which the duty takes from the French Is often given to the Chinese, the Hottentots, Caffirs and Algonquins, as follows: A piece of cloth Is worth 100 francs at Bordeaux. It is impossible to sell it below that without loss. It is impossible to seftl It for more than that, for the competition between merchants forbids. Under these circumstances, if a Frenchman desires to buy the cloth he must pay 100 francs or do without it But If an Englishman comes, the Government interferes and says to the merchant: “Sell your cloth, and I will make the tax-payers give you 20 francs (through the operation of the drawback). The merchant who wants, and can get, but 100 francs for his /cloth delivers it to the Englishman for 80 francs. The sum, added to the 20 francs, the product of the bounty robbery, makes up his price. It is then precisely as if the tax-payers had given 20 francs to the Englishman on condition that he would buy French cloth at 20 francs below the cost of manufacture—at 20 francs below what it costs us. Then bounty robbery has this peculiarity, that the robbed are inhabitants of the country which allows it, and the robbers are spread over the face of the globe. It is truly wonderful that they should still persist in holding this very proposition to have been demonstrated. All that the single individual robs from the great mass of people is a general gain. Perpetual motion, the philosopher’s stone, and the squaring of the circle are sunk In oblivion; but the theory of progress by robbery is still held in high honor. A priori, however, one might have supposed that it would be the shortest lived of all these follies. Some say to ns: You are, then, partisans of the let-alone policy; economists of the superannuated school of the Smiths and the Says. You do not desire the organization of labor? Why, gentlemen, organize labor as much as you please, but we will watch to see that you do not organize robbery.

Others say: Bounties, tariffs, all these things may have been overdone. We must use without abusing them. A wise liberty, combined with moderate protection, is what serious and practical men claim. Let us beware of absolute principles. This is exactly what they said in the kingdom of A 1 ——, according to the Spanish traveler. “Highway robbery," said the wise men, "is neither good nor bad in Itself; it depends on circumstances. Perhaps too much freedom of pillage has been given; perhaps not enough. Let us see. Let us examine; let us balance the accounts of each robber. To those who do not make enough we will give a little more road to work up. As for those who make too much, we will reduce their share." Those who spoke thus acquired great fame for moderation, prudencoand wisdom. They never failed to attain the highest offices of the state. As for those who said: “Let ns repress injustice altogether; let us allow neither robbery, nor half -robbery nor quarter-robbery," they passed for theorists, dreamers, bores—always parroting the same thing. The people also found their reasoning too easy to understand. How can that be’true which Is very simple? I might read further to show how this robbery is reciprocal Let the remainder of this intieresting chapter be printed, read and heeded. Does it not show how the shipbuilder and the iron manufacturer and thC public official and the sailor and the Minister and the Government employe all get together, in loving mutuality, pn this tariff business. Being together do they not all go for themselves and at the same time all “go for” the public? ■ The contest, therefore, in the last resort is the public against the monopolist Whereever a man stands up for his special interest against the general interest he is not representative of the whole people, but of a few who seek to be greedy by living off of the public; and the public are beginning to find it out It is no sporadic” case, it is no “local issue,” as some statesman said it was some time ago, unless you localize it everywhere, and it spreads to naught and is coextensive with the country. There is no limitation to locality. When there is no limitation to locality it is as universal as the principles of honest political economy. These principles laid down in Bastiat, Wayland and the best ethical writers, as I said in commencement, are not applicable, as the gentleman from Maine said, to one place—to Paris alone. Do they not belong to the human nature in its various social relations? Are they not based upon maxims that can not be gainsaid, because founded on truth?