Democratic Sentinel, Volume 14, Number 50, Rensselaer, Jasper County, 2 January 1891 — TARIFF LETTERS TO FARMER BROWN. [ARTICLE]

TARIFF LETTERS TO FARMER BROWN.

NO. 11. Can Protection Increase Wealth? Dear Farmer Brown: You and I are familiar with the claim of the protectionists that protection increases the country’s wealth. We look into their papers and we find reports of the vast increase of production in various industries. One will give us tables showing the growth of iron production—in 1885 we produced 4,044,000 tons of pig iron* in 1890 probably 9,000.000 tons. (lUiers will run through the yearly repoTCs of steel rail production, nail-making, barbed wiremaking, plate and window glass, woolen and cotton goods industries—and everywhere they are able to point to growth, a growth which they claim in ail cases as the result of protection. In every case this claim rests upon that error in reasoning which is usually expressed in the Latin words, post hoc , ergo propter hoc (coming after this, therefore caused by this). The protectionist coolly assumes that since the country prospers under protection, therefore protection is the cause of such prosperity. If you should raise a good crop notwithstanding the drouth, you would not be so simple as to say that the drouth caused your good crop. On the contrary, you are sure you would nave had a still better crop if rain had come as you needed it. Imagine a steamboat beating its way down from Chicago to the northerp end of Lake Michigan in the face of a fierce wind. The vessel certainly makes speed,

but if a certain passengef should claim that the speed was caffsed by this north wind, he would be laughed at as a fool, every intelligent passenger knowing that the vessel was only retarded in its course by the wind. If the passenger should point to the receding fields and groves on the shore to prove that the vessel was going forward, and should still insist the progress was due to the north wind, the passengers would think either that he was crazy, or else that he was some belated Rip Van Winkle who fell as eep in the last century, before the day of steam, and who cannot now take account of anything else than the wind as a propelling force for ships. In the same way the country goes forward, not by reason of protection, but despite protection. As the vessel has within it a force which is able to overcome the external hinderance of wind., so Jhe country has in it native forces of brain and muscle, inventive genius and skill of hand. Nature’s rich resources and man’s courage and industry, which are able to force the industrial ship of state forward in its course, notwithstanding the contrary wind of protection. When the protectionists try to establish their claim that protection enriches "the country, they always examine the matter from the standpoint of the producer, the consumer being rarely taken account of. If they can show, as they doubtless can in many* instances, that the profits of an industry are caused by the protective duty, they at once conclude that protection is a wealth-pro-ducing factor in the nation’s life. Some of them, however, do take account of the consumer, if only to show tbalHElthough protection may make him pay more for his goods, still the money he pays for them remains in the ojuntry, and therefore the country is none thi poorer for his loss. But the true standpoint from which to estimate the cost of a given product to the country is the standpoint of the consumer. The total cost to ail consumers is the measure of cost to the country. If the product in question is put down to the consumers of *t at a higher price by

the domestic manufacturer than It would be If that product was imported, is ttnot clear that we are Buyiug at borne at a loss, and that Joss precisely equal to the difference of price between the domestic article and the simillar foreign article? For why do we labor? Is it for the sake of toil itself? Do we not rather labor for the sake of the things which labor produces, for what we call goqds? But if goods can be had with less labor by an exchange with a foreign people do we not impose unnecessary labor upon ourselves when we undertake to make those goods ourselves? Where a people are Cj let alone by the tarifftnaker they naturally take to those employments which pay best, or, in other words, in which their labor is most productive. If-however, the tariff maker comes aldng and decides that people must produce goods which they have not yet undertaken to produce, is it not clear that must be taken away from profitable empldyment and put to doing what is relatively less profitable? We do not make tin plates. Why not? Because our people find that they can make more money by doing other things. The present high McKinley duty on tin plates will doubtless cause some of our people to undertake the manufacture of them, and it may be done, too, at a profit, but this profit will be possible i ■ only by reason of the higher price caused by the duty of 2 2-10 cents a pound. The makers of tin plates may grow rich, they may give employment to- several thousand laborers, and protectionists will then point to the wealthy c&pltalists in this business, and to the homes of the laborers engaged in it, and tell us that this is an example of wealth created by protection. But I deny beforehand that it wil be anything of the kind —deny it emphatically. The effect pointed to will

be only a new distribution of old wealth. A few cents will be collected from each household which uses tinware, from each housewife who buys canned fruits and vegetables, a few dollars from each man who puts a tin roof on his house, and all these small contributions will flow together and reappear in the form of tinplate mills and houses for tin-plate makers. Wealth has not been created; it has been scattered, and has been gathered up again by others. When the creek washes away your pumpkins your labor is lost, and you have no pumpkins; it is very little comfort to you to be told that your pumpkins lodged ten miles down tlje creek and that a brother farmer’s pigs are five pounds fatter than they were before the freshet. .. 4 Let me call your attention to an actual case. The plate-glass industry of this country, consisting of nine or ten factories, is said to produce 25,060,000 feet of glass every year. Some years ago the price of plate glass was $1.50 per square foot; but it averages now somewhat above 75 cents a foot. Both the industry itself and the reduction of the price are claimed by the protectionists as bright and shining examples to prove the wisdom of the present high tariff system. But let us figure on the problem a little. Our home market plate glass, 25,000,000 feet at 75 cents a foot, costs our people $18,750,000. The duty on plate glass is almost prohibitory; but the small quantity which came in in 1889 was entered at the custom houses, according to the Treasury reports, at 32 4-10 cents. If we had bought our 25,000,000 feet of glass in Europe at this price the total cost would have been $8,100,000, or a saving to the consumers of $10,650,000 in a single year. Now this vast sum is a clean loss to the buyers of plate glass. Mr. Blaine says that “protection is a great distributor of wealth.” Of course it is. Here is distributed $10,650,000 in one year. But protection is also a collector of wealth; the principal p’ate glass concern in this country cleared last year 34% per cent on its capital. The mefct of the wbolA nueation lies tn

this case, and the question Is, Does ft pa> to spend ten million f year In order to have its nine or ten plate glass factories? Is not the country poorer by Just the amount ci $10,650,000 by reason of manufacturing its own plate glass? Would you conduct your business on such principles? Would you insist that it would be true economy to make your own farm wagon, costing you two weeks of labor, when you might buy one with one week of labor put upon your wheat fields? Would you think you had saved anything by having found a new way in which tp employ yourself? But this one case is enough; if J contains all the elements of the . question, “Can protection increase wealth?” What is true of plate glass will be found true of every other protected industry in which the duty is really protective. From one you can judge all. This is a typical case, and one of the greatest standbys of the protectionists. If plate glass is produced at a loss to the country, you may conclude that the whole system of protection is a dead weight upon our progress—not a producer but a destroyer of wealth. Youxs truly,

RICHARD KNOX.