Democratic Sentinel, Volume 7, Number 6, Rensselaer, Jasper County, 9 March 1883 — REVENUE REFORM. [ARTICLE]

REVENUE REFORM.

What Tariff Tax Reform Did for Workingmen in Great Britain—Protect ion the Gospel of Plunder and the Enemy of American Industry—Speech Delivered by Henry Watterson Before the Members of the Legislature of Tennessee, at Nashville. Senators and Representatives : Upon the southernmost coast of Spain, not far from Gibraltar, there is a little island connected with the mainland by a causeway, and upon this island stands an old town called Tarif a. It once belonged to the Moors, who made it, when they were a power in the world, a port of entry to the Mediterranean sea. They knew nothing about Custom Houses and schedules, and cared less about home industries and International exchanges A few junks and flintlocks sufficed to collect the tribute they exacted from the “pauper labor of Europa’’ Hence the origin of the word “tariff. ” Ido not find, however, in any history that they levied bounties upon their own people. They were rude and honest pirates, who did their pillaging in the oldfashioned way, having enjoyed none of the advantages of that modem economy which has discovered a gentler method of scuttling ships and cutting throats Doubtless, however, the natives of Tarifa thought they were doing a good thing for their country in exacting tribute of the stranger. They were subjects of an empire -whose splendor and whose squalor existed side by side.

The Moors have gone. Their temples and their palaces are a mass of decaying stuff. The little town of Tarifa scarcely appears upon the map. It is the vantage ground no longer of protection nor the home of monopoly except in shrimps and anchoviea But the system which it originated and the name it gave to that system survive to-day, and “tariff,” the science of plunder, is making its last stand for tenure and privilege in the United Statea The object of protection, which is, in the end, repressive and depressive, is to consolidate enterprise and wealth. It is a Federalist in origin and a centralizer in practice. Its effect is not to enlarge the happiness and open a vista of opportunity to the many, but to build up the fortunes of a few. •» • * * * * The truth is, under the protection system, which shuts us out from the markets of the world and turits us loose upon one another, the manufacturing interest and the agricultural interest are arrayed in direct antagonism. It is not alone that the agriculturist is taxed to support the manufacturer. It is that but for the extent of our arable lands and a natural preference in man for the freedom and sweetness of agricultural pursuits, the cheap labor of the unprotected farm hand—whom the protectionist would turn over perpetually to the tender mercies of the pauper labor of Europe annually pouring in—would be found to-day snatching bread from operatives who are lucky if they earn a dollar a day. This brings us to the fallacy that high tariffs make high wages. The exact reverse is true. Labor depends on supply and demand, just as prices are regulated by the foreign market, which enters our home market and takes what excess of production we have to offer it. A high tariff increases the profits of the privileged, ' or protected capitalist, who adds to the cost of production the rate of duty and the cost of transportation, and then a little private tax of his own as a sort of fee to his patriotism, and gets of the home buyer, who has no option, the maximum price demanded. But this same high tariff ,by limiting production to home consumption, takes from the operative what he might get through the excess of his work if the world were open to him. I cite a passage fiom Fawcett, a leading writer on political economy, which is very clear on this point. The eminent political economist says: “In any given case the more that is taken in form of profits, the less will be given in wages. If wages take a larger share of the produce, profits must take a smaller share. Suppose, however, that industry, by the introduction of new machinery, is rendered mere productive there will then be agreater quantity of produce to be distributed and more may be apportioned to profits without the slightest reduction in wages.” This is based upon the Taw that wages are labor’s share of the production, and it is fully sustained by experience. The example of England, which has tested the efficacy of free trade to the fullest, cannot be disregarded by any one who would thoroughly investigate and fully comprehend the doctrine of international exchangea In 1849 England let loose her grip upon the old feudal idea of commercial restriction and adopted the policy of freedom of trade. The statesmen who"led the movement had literally to take a leap in the dark. There were no precedents to guide them. But they were sure they were right, and they went ahead. They said, in effect: “Production, if left to Itself, will seek its levelCommerce is a simple interchange of com. modifies. England is afraid of nobody in the line of her own handicraft We will go Into the market of the world with our wares, and we will sell them for what we can get for them, and we will buy the products of other countries which we need with the proceeds, and we will trust the result to make us a profit We will put an end to protection which stimulates artificial enterprises, which lures men by the hope of privilege into paths wot mapped out for Goa and nature, and wfe will at one and the same time extinguish subsidies and force our whole people into fruitful pursuits by withdrawing from them Governmental support and compelling them to rely upon their own exertions applied tb resources better suited to them than those to which the state invited them by its mistaken bounty. ” This was the idea on which the Peels, "the Cobdens, and the Brights founded a new school of political economy. They were met by precisely the same outcry which at this present moment rallies to the side of monopoly in this country. But they kept on undaunted, and what was the results It reads like a fairy tale. I know that the protectionists contend that the cases are different betwixt England and us; but there, as everywhere else, as I shall presently show, they are at fault To give some idea of the wonders worked by the free-trade experiment in England, ! beg your permission to run over a few facts which stand out in bold relief. The statistics to which I wish to draw Sour attention were collected by Ernest [ongredien, whose authority will not be gainsaid by the most captious protectionist They institute a comparison oetween the state of the country in 1840, nine years before the new policy was adopted, and 1878, twenty-nine years after it went into effect In 1840 the foreign trade of England was a little of $800,000,000 of our currency. In 1878 it was nearly four thousand millions. In 1840, under a high protective tariff the public revenue was about two hundred and sixty millions. In 1878, upon a customs list embracing fifteen articles, and yielding only $100,000,000 on import duties, the entire revenue aggregated nearly five hundred. millions, which pressed less "hardly upon the people than did the former sum. In 1840 the tonnage of the registered vessels of England was 2,571,000 tons. In 1878 it was 6,236,000 tona In the improvement in the condition of the poorer classes the figures are equally startling. In 140 the de-‘ posits in the savings banks, which are Government institutions organized to receive small sums, amounted to $75,000,000 of our currency. In 1878 they were nearly four hundred millions. In 1840 the convictions for criminal offenses of all kinds in England were 34,000, with a population of 26,000,000. In 1878 they were 17,000, with a population of 33,000,(XX). In 1840 about 200 (M)0 paupers were supported by charities, public and private. In 1878 less than 100,(MX). These figures show a remarkable improvement of conditions—a revolution, in fact, for the better—and I cannot more fitly close it than by quoting a table prepared by Mr. Mongredien to show the consumption per head of the English people during the years named of certain articles of living. This table is conclusive as showing the Immense advance of the working classes in comforts and luxuries, for the wealthy and middle classes must have consumed as much sugar, tea, etc., in 1840 as they do now, leaving the largely-increased consumption to the poor, to whom the purchasing power of wages has been steadily increasing. Here is the table: 1840—lbs. 1878-lbs. Tea 1.22 4 66 Sugarls.2o 48.56 Coffee 1.08 0.97 Rice 0.90 7.50 Currants and raisins 1.45 4.49 Tobacco 0.86 '7.45 During the same period the consumption of flour increased from one barrel per annum to one and a half barrels for each laborer and his family, while the consumption of beef, pork, mutton, poultry, butter, cheese and eggs more tnan doubled per head. These figures tell a story of their own, though it is not half the story that might be told, of how the emancipation of the people at large, and of the working classes m particular, from the semi-barbarous system

which flourished in England prior to 1849, widened the areas of trade, broadened the opportunities of men and diffused the blessings of an enlightened commercial freedom throughout those parts of the British i eidm included in its operations. Already the noble words of Sir Robert Peel, who did not live to see the fulfillment of the policy which he had made such sacrifices of power to confer upon his country, have come true. He said: “I shall surrender power severely censured, I fear, by many honorable men who, from no interested motives, have adhered to the principles of protection because they looked upon them as important to the interests and welfare of the country. I shall leave a name, execrated, I know, by every monopolist who would maintain protection for his own personal benefit. But it may be that I shall leave a name sometimes remembered with the expressions of good-will in the abodes of those whose lot it is to labor and to earn their daily bread by the sweat of their brow when they shall recruit their exhausted strength with abundant and untaxed food, the sweeter because it is no longer leavened by a sense of injustice. r So much for the example of England. Now can any man explain why it is that, with our vast resources and our peculiar aptitude for special pursuits, our inventive genius, and our enterprise, we may not repeat the experience of the mother country)* England is able to undersell all other nations, because, though she pays high wages, she gets skilled labor and has the world for a market We are unable to compete with her because we have taxed our machinery, surrounded ourselves by a Chinese wall, seduhed capital by excessive bounty into unprofitable channels, and Increased the price of everything. We have only to stop this short-sighted policy and devote 'our energies to the natural resources of our soil and climate, unaided by Government—in other words, to fling away the crutches of protection and step bravely into competition with England—to vie with her, yea, and to beat her in every neutral market in the world. It is not, as I have shown, the pauper labor of Europe that we have to contend with, but the high-waged labor of England, which is able to underbid us because the cost of production in England has been reduced to its minimum by cheap machinery and cheap raw material

There has never been a high tariff in this country that did not curtail, nor a low tariff that did not increase our exportation of fabrics. The more protection we give the manufacturer the more he wants, and the more he gets the poorer his employes grow. Before the present era of extreme protection, now twenty years old labor strikes were unknown in the UnJ ted States. The war tariff and the tramp came in together, and they have been playing a game of blind man’s buff with each other ever since. The reason is not fax a-field. American manufactories have been so stimulated by bounties that they are able to produce more than the home market can consume. Unless a foreign market can be obtained for the excess of production the mills must stop A foreign market can only be got by reducing the cost of production, and this can only be done by cheaper machinery and raw material, or cheaper labor. The tariff steps in and forbids the cheaper machinery and raw material, so nothing is left the manufacturer but to cut wages, which he proceeds to do whenever it suits his purpose. A very moderate duty would cover the difference between wages in England and wages here. But as Mr. J. 8. Moore, the Parsee merchant, shows in his admirable paper read before the Tariff Commission, “protection begets protection. ” Every article entering into manufactures being taxed, competition with England becomes impossible, and either a glut of the home market or the stoppage of work inevitable. This is the spectacle which we see at the present moment; mills closing; wages lowered; and a lobby at Washington clamoring for “more protection.” This after twenty years of trial Tfiis after many years of unexampled general prosperity contributed by agriculture to enrich the protected classes. It will continue as long as protection continues. There is a dreary monotony in the history of all high tariffs; first, an excess of manufacturing enterprises, then the swallowing of the little fish by the big fish, then depression, starvation, ruin, and cries upon the Government for help. Think of a system which, in a free and healthy country, depends for its success, not upon God’s bounty and man’s labor, but upon an act of Congress! Such is protection, which, pretending ,to be the poor man’s friend, is slowly out surely starving him to death. The time has come when this freedom of trade which, restricted to the States of the Union, has been as sunshine to the industries of the United States, should be enlarged. Those industries are as able now to stand alone as ever they will be. The longer they are protected the more they will need protection. And I stop a moment to ask why, if protection is to be such a good thing, the protectionists do not advocate it between the States so that cotton fabric's in Georgia may be protected from the cotton mills in New England, and the coal and iron of Tennessee from the ore beds and furnaces of Pennsylvania? That would be logical, at least, though it is not what we want We want the open.markets of the world. We want more consumers to take our surplus products. We want more partnerships and fewer corporations. We want cheaper production; and, to get it without cutting wages, we want cheaper machinery ana cheaper raw material. It is never high-priced labor that seeks protection against low-priced labor. It is exactly the reverse. No man can study tbe question, even in the light of the arguments advanced by the protectionists, without seeing that they answer and defeat themselves It is the only question I have ever encountered in which the greater the research the more extreme ana positive the opinion. Usually inquiry begets moderation. But it is impossible to be tranquil and patient in the presence of enormities that lurk l>eneath and rally about this system of gigantic rapine and wrong.