The passing of the tariff

Front matter

THE LIBRARY

OF

THE UNIVERSITY

Contents

CHAP. PAGE.

I. The Passing of the Tariff . . 1 II. The New Takiff Era . . .14

III. The Campaign Against Privilege 34

Chapter I The Passing Of The Tariff

Every few years a rebellion against the tariff breaks out among the people of the United States. It is sharp, determined and based upon principles strengthened by self-interest. It fails, and then the tariff men proceed to raise the duties still higher. Even such a success of the rebels at the polls as the sweeping victory of 1892, which put Grover Cleveland intojthe presidential chair for the second time, amounted to nothing in practical results, with few exceptions for a short time, because the high tariff men, through the aid of those singular persons known as protection democrats, succeeded in destroying the merit of the tariff reform legislation so thoroughly that President Cleveland refused to identify himself with the perversion of the victory which the tariff reformers ought to have enjoyed, and he permitted the bill to become law without his signature. Afterward, when the tariff men returned to power, the Dingley act raised the high duties of the McKinley tariff to a higher level, and today the country carries on commerce under the heaviest restrictions ever put by our laws upon international trade.

Cycles of rising prices, which are the natural consequence of distributing the alleged benefits 1 of the tariff through the community until all people have their just proportion of the advance, result periodically in popular unrest under the conviction that prices are too high to be endured (though this cause is only one with others and not the most potent) and then rebellion against the supposed cause of the prosperity breaks out again. This rebellious attitude spread through the country for several years before the presidential campaign of 1908, as the tariff continued its evident effects of raising the fortunes of the few and of increasing the burdens of the many, until political leaders realized that open outbreak could not be restrained much longer. It is a vital question for the people of the United States whether the purposed rebellion shall result, as every previous one has resulted, in utter defeat for the rebels and in the imposition of still higher tariff duties, or shall bring a permanent victory which shall never suffer a complete reaction in the sentiment of the nation, no matter what financial calamities occur in consequence of violations of the obscure and complicated laws of trade and of the production and distribution of goods.

Our country does business today under circumstances very different from those which existed when the first tariff was enacted. Conditions have changed greatly even since the civil war. From the outbreak of the last tariff rebellion in 1892 to the present there has been a constant growth of elements which have a vital bearing upon the tariff policy. Forces are at work which tend to bring the world more and more closely together. The good old days of the " home market " theory are receding into the oblivion of distance, and ideas are finding acceptance which will put the tariff permanently on the shelf as a relic of barbarism, with slavery and polygamy. Obstruction to trade, such as the tariff presents, cannot exist permanently in the light of the ideas which are becoming predominant in the business world. Trade between the nations will flow as freely as it does between our sovereign states and there are bright indications that the tariff is passing away forever. Discouraged tariff reformers are skeptical, but there is plenty of light for their gloom.

Self-interest, it must be admitted with regret, plays a far larger part in the tariff agitation than pure principle. Unselfish devotion to the public welfare apart from personal and local considerations is by no means the most powerful force in the conflict. When the Home Market Club made its brilliant dinner demonstration, with speakers including the president of the United States, members of his cabinet and distinguished men of other circles, it mustered from 1500 to 1800 finely appearing beneficiaries of the tariff who represented, in their own persons and in their own fortunes, the advantage which a few, at least, derive from the general obstruction of trade. But when the American Free Trade League musters its largest host they are barely one in twenty compared with the Home Market men, and no president or cabinet officer puts his legs under their table, but only college professors, or men whose fortunes have been hurt by the tariff, or (and for the most part) those who insist that principle stands higher than personal benefit, and that the welfare of the whole is of more consequence than the aggrandizement of the few. In the year ending November 1, 1908, the Home Market Club spent $15,902 for its cause. Such a sum for the American Free Trade League would be to its secretary the eighth wonder of the world.

But self-interest has entered upon a new era. This is not because of the tariff, but in spite of it. Business all over the world is becoming more and more independent. Cables under all oceans bring all continents together so that the deeps are no longer obstacles to communication, but only to transportation. All countries are put under tribute for the supplies of our own, more than ever, and we are learning the lesson that we cannot sell unless we buy. The self-interest which has fostered the tariff is finding its salvation in discarding its theory of limiting itself by the boundaries of our country and is recognizing that no limits short of those of the world itself are reasonable in its efforts to find wider markets for its home productions. The Free

Trade League is about to find itself distanced in the race by the men who have been the supporters of the Home Market Club. This operation of self-interest alone will decide the issue, and the commercial world will work out its salvation on commercial lines.

But there are other considerations to prove that the power of the tariff is waning, and they are as much higher than the commercial as justice to all is higher than selfishness grasping all it can for self, regardless of justice.

Our people, bom with personal liberty, can with difficulty realize the deep and expansive meaning of their unspeakable right so freely exercised. Nor can we, accustomed to the enjoyment of its fruits every day, adequately understand how much of them we owe to its stimulus. Our very circumstances stir us to do our best. Our exceptional opportunities are largely those of our own making. It is the theory of our laws, which we realize in practice with increasing fulness as the laws become more eff'ective in operation, that every worker shall receive the equivalent of his work. Fortunes rise under the inspiration of seeing, in one's own hand, the equivalent of the toil of the hand, directed by all the ability of the brain.

But in other countries where personal liberty is far less, where government is despotic, where property rights are insecure, where officials plunder the people and where robbery, theft and fraud are not restrained by the inefficient governments, are incalculable millions of hands relatively unproductive, of brains stupefied by tyranny, and thus of possible opportunities unimproved. Body, mind and soul rest under burdens which such human liberty as we enjoy would remove. After such removal, in every such locality, wealth would increase rapidly. Peoples now impoverished would become our customers in abundance. Lands now able to send us but little would fill our returning steamships with overflowing cargoes. Human liberty alone would work such a transfomiation, in conjunction with the other forces now operative all over the world. Now the overthrow of the barriers of trade on our part would tend to the dissemination of our ideals of liberty, even more than at present, in every part of the world. If we have a mission higher than to make dollars out of our fellow men, especially out of those with whom we trade and with whom we are in constant friendly contact, it is to give them the stimulus of the same ideals as have made us free and strong. The direct, speedy and inevitable consequences of our throwing down our trade barriers would be to advance the cause of human liberty in other parts of the world as knowledge of our country and familiarity with its practical accomplishments should become familiar to other peoples, and we should add much to the progress of the world toward the highest fonn of political institutions.

Ideas spread quickly whci*c the mind is receptive, and the desperate struggles of millions in different parts of the world, even in these modem years, for a small portion of liberty such as we enjoy proves how quickly a response would follow the outside stimulus and how the world would leap forward in the race.

But there is a still higher and stronger reason why the tariff obstruction should be removed. Tariff men will doubtless deny it, but it is true, and it is a truth greater as truth than any man is as man. Let it be said here, as it is said elsewhere, that truth is one, harmonious and indivisible. We separate truth into truths only because of our intellectual littleness. We classify science under the heads of different sciences only because our minds are not broad enough to comprehend science as a whole. Financial, commercial and religious truths are equally parts of one stupendous whole — if the use of the words " parts " and " whole " in relation to infinity be permitted, for they are the best words in the English language to symbolize the idea. If the tariff is right financially, industrially and commercially, then it is Christian. If it is wrong in these respects, then it is un-Christian and it is worthy of the persistent, determined and effective opposition of all who would work for the spread and triumph of Christianity.

Affirmation is made here that the tariff is wrong financially, industrially and commercially and therefore that it is inconsistent with true rehgion — using the word in a sense broad enough to include all moral and religious truth, no matter with what system of religion it is identified. Being irreligious, therefore, it must be wrong in every other aspect, must be destructive of rights and property and is to be opposed as long as a vestige remains.

Passing over the Avell known fact that the tariff owes its existence to the scramble of selfish interests at Washington and that if it were left to the unmanipulated judgment of the nation while those interests did not lift a finger it would be abolished as soon as the bill could be pushed through both branches of Congress and carried to the White House, let it be assumed here that every tariff man is acting from motives of the highest patriotism, that he desires to see only the welfare of his country as a whole, and that if that welfare demands the removal of the tariff he will consent as readily as he now insists that the tariff must be retained. Only such a degree of patriotism can be accepted by a nation of patriots in considering the tariff policy for the whole nation, and any citizen who acts for selfish interests primarily puts himself beyond consideration.

Now, as to the religious standard of action. The Master himself said : " Thou shalt love thy neighbor as thyself." The chief apostle wrote: *' For the whole lavr id fulfilled in one word, even in this, Thou shalt love thy neighbor as thyself." The Golden Rule says : " Do unto others as ye would that others do unto you." The Master did not say : " Thou shalt love others better than thyself." An even balance between self and others is to be held, and both are to be given equal justice. But every tariff man who professes to act from love of country as superior to self-interest knows and realizes, that it would be profitable to the foreigners If our markets were thrown wide open to them. There is not the slightest doubt upon that proposition in the mind of either a tariff obstructionist or a free trader. The tariff man would view with horror the consequences to this country, but he has no misgivings regarding the profit to accrue to the men who could deliver their goods free of duty at our wharves. As a patriot, he would save all the profit to our country and not permit foreigners to share it. He regards our markets as our property, to which only our own people have title, and the foreigner who would break into them stands in the same light to him as a burglar who should break into his house.

But this claim of exclusive property rights in our own markets is unsound. It violates the very fundamental truth in the creation of mankind of one blood.

The question goes deeper than the claim of one people to exclusive possession of the territory they occupy. There is a oneness of mankind which overrides the claims to national exclusiveness. European nations and the United States are acting upon that truth, blindly, to be sure, in their policy toward China in breaking down the Chinese wall of exclusiveness. It is a true principle that nations have no right to shut other nations out, or to shut themselves in, or to shut individuals out or in who are law-abiding. Not only is such a course folly, but it flies in the face of that sovereignty of all mankind which is a fact, but an ignored fact yet to be established as the fundamental truth in the relations of nations. No nation has a right to exclusive possession of its own markets, and each has the right, as a member of the human family, to insist upon its own admission to the markets of others as freely as it throws open its own.

Love and justice to the neighbor, both, demand, as a religious principle of action, that equal opportunity be afforded to trade from whatever source it comes. The tariff violates the fundamental principle of religion in the relations of men. It deliberately refuses to hold an even scale of justice between the home citizen and the foreigner. Judged by the standard which the ruling people of this country profess, the tariff is irreligious, immoral and destructive of justice. Therefore, in a world where the right wins, those who support such a proposition in the light of religious truth and in opposition to the forces which make for justice to the weak as well as to the strong, might as well fight against the stars in their courses. Inevitable defeat awaits them. As rapidly as true religion makes its way in the world, in the full force of its genuine spirit, — not in the clouded comprehension of men still under the spell of national all-sufficiency — so surely is the tariff passing away. That spirit of self-sacrifice which impels men and women to consecrate property and life for the spread of the good news also impels them to exert all their influence for the overthrow of the unjust, divisive and destructive obstruction to the welfare of the nations which is appropriately named " tariff " from " Tarifa," a nest of robbers.

It is true that the tariff policy seems more strongly intrenched today in the policy of the nation than ever, judged by the relative amount of the duties levied upon imports. It is true that in England there seems to be less general acceptance of the free trade truth than a generation ago. It is true that the other great nations of the world hold tenaciously to the theory that their own welfare is to be promoted by putting obstacles in the way of the free exchange of products put upon the market under the most favorable conditions.

But it is further and emphatically true that the nations are entering upon a new era in their relations with each other, and that even a hundred years are but few in the onward sweep of the human race. Forces which the nations obey as completel}' as the ocean currents obey the mighty cosmic impulses which drive them long distances are urging the nations forward into a community of self-interests as permanent and as evident as the unity and self-interests of the states of the United States. International conferences at The Hague mean the political unity of mankind, and with that will come commercial unity and financial unity, just as surely as such unity has already been attained by our own sovereign states whereby no obstruction to trade is permitted between them and where friendly intercourse overpowers all causes of antagonism and smothers all beginnings of hostility.

Protection has reached its climax. Its giant strength is already enmeshed in the subtle and strong web of forces which will bind its hands and feet, which will overmaster its struggles, which will put an end to its selfish and unwise activity, and will finally strangle its life out altogether. Its doom is inevitable as certain as there is progress among men. Slavery in the United States was at its zenith when it fell to its utter destruction. It dominated the politics of the country. It stifled men's consciences, as far as political majorities were concerned, even in such a pioneer antislavery state as Massachusetts. It paralyzed their courage and it made even its opponents, except the leaders, accept compromises rather than stand up and fight. The dollar was supreme over the bodies and souls of black men. What has happened once may happen again. It would not be strange if the next rebellion against the obstruction of trade, against the promoter of monopoly and against the imposer of unjust taxes should be successful.

Chapter II The New Tariff Era

Never have the customs duties of the United States been raised to a higher average than now. From the tiny beginning of five per cent, in revolutionary days, the protected interests nave gradually been able to increase the barrier against imports from other countries until the average is more than ten times as high as was thought satisfactory by the early legislators for the protection of infant industries.

This wall seems now to be as high as it can possibly reach. Already it seems toppling from top-heaviness, and it Is a fair question whether it would not be stronger If some of the top courses were removed. Popular opinion has sustained It thus far, judging from the election returns ; but popular opinion is gathering tremendous strength against enormous aggregations of wealth, and it seems quite probable that this opinion will be directed against the tariff within a few years. No obser^Tr, however, can question today the complete success of the high protective policy, judged by what it has been able to put upon the statute book. There the law is, all free trade argument to the contrary notwithstanding.

Simultaneously with this crowning vlctor^'^ of the highest tariff known to our history must be recorded the lowest depth of defeat for the school of political economy which has opposed it. No weight in the popular mind seems to attach to the doctrines which were taught, a generation ago, by the colleges and universities as the solid foundations of truth in the economic world. Laissez-faire, which was the shibboleth then, is now practically discarded. If it was a sound and successful doctrine for an era of free competition of producers in the markets of the world, yet its propounders had no conception of the present conditions, when competition has run its legitimate course and ended in monopoly so absolute that it holds nations in its grip and strangles every one who struggles to set himself free.

In those days that was held to be the best government which governed least. It was taught that the function of government was to give fair play to competition and to keep its hands off the competitors. Laissez-faire was fitted for days of competition ; and when competition was stifled b}'^ monopoly the people instinctively felt that to say " laissez-faire " to monopoly meant commercial and industrial slavery to them, as it surely did. Hence it was inevitable that the old school of free trade should cease to convince the thoughtful, and it was equally inevitable that it should be rejected by the average voter of the country when he came to vote for a policy to be put in operation by the government.

A staggering blow was delivered to the old school by the panic which followed the presidential election of 1892. Democratic victory, meaning a reduction of the tariff, in November of that year, followed by the inauguration of President Cleveland for the second time on March 4, 1893, and the commercial crash of May, 1893, a precursor of hard times which did not end for a long period — hard times attended by city soup kitchens in many places and by clamorous armies of the unemployed — fixed indelibly in the minds of many thousands Avho voted the Democratic ticket the belief that the Democratic victory was the cause of the hard times. Though well-informed men know that the same catastrophe would have occurred if President Harrison had been reelected; though Republican leaders doubtless know that their party would have suffered equally if it had been successful ; yet some of those leaders have never since then failed to assert that the hard times were a direct consequence of Democratic victory, and to this day there is no stronger argument against tariff reform in many minds than mention of the panic of 1893. Since then, among the mass of voters, free trade as a political policy has been beyond mention. That election marked the end of the era of the laissez-faire theory as a force to be reckoned with in politics.

Since then, there has been no logical coherence in the campaign argument against high protection, except the self-interest of those who think they see opportunity to make more money by, lowering the tariff. As a party of opposition, the Democrats have opposed the high-tariff Repubhcans, but the tariff was not heard of as a genuine issue in the presidential campaigns of 1896 and 1900. Every muscle was strained over the currency — the question whether Bryan and silver should win. Theoretical free trade was no more concerned than the theory of the northwest passage. The old force was dead, and it is impossible for it to revive.

Revival of the old theory is impossible, further, because the men who held it entertained the same inadequate idea of the functions of government which is today entertained by the business men who control the high-tariff wing of the Republican party and dominate the legislation of the countr3\ Old-time free traders held that government should be reduced to the lowest possible terms. Today the high protectionists want the government to keep hands off and let them alone, after they have secured the highest tariff the country has even known. Business men generally dislike interference with business conditions on the part of the people. They desire strongly that Congress and the state legislatures should meet as infrequently as possible, and do as little as possible. They fail as utterly as the laissez-faire men failed in their time to comprehend the function of the government as a means of service of the people by the people ; they cannot understand that it is far more and far higher than a poHce force to preserve order, in the sunhght of which the business men are to accumulate their fortunes in peace and to exercise their full faculties for the exploitation of their fellow men. These two classes are at one in their desire that the government keep its hands off the business communit}', and henceforth it is hopeless to look for a revival of the old theory of free trade.

If the let-alone theory were sound, then every head of a family must be his own bacteriologist, miscroscopist and sanitation expert ; he must be the schoolmaster to educate liis children ; he must contract with private corporations to carry his letters across the continent and around the world. If it is an unsound policy for the people, through official servants, to protect themselves against disease and ignorance, but should leave it to their self-interest to sharpen their wits and to save them from the blind destruction of nature and the cunning heartlessness of their fellow men, then all our progress of recent years has been in the wrong direction. But if it is a sound policy to educate the children at public expense, to carry letters b}"^ public servants, to have sanitary rules for the salvation of rich and poor alike from the devastations of pestilence, then it is also a sound policy to protect the public from fraud and loss by supervision of insurance companies, savings banks, trust companies, national banks and publie service corporations of every sort. It is with many limitations that whatever truth there is in the let-alone theory is to be applied. Our nation is growing away from it and the government is wisely putting its hand more and more upon the business conduct of great aggregations of capital.

Opposition to protection is rising powerfully, and it is evident that a new era in the contest has opened. The nation has learned the lesson, even if the laissez-faire men have not. This is not because the nation is the more intelligent; but inevitably the very force of circumstances has compelled favorable action upon measures of the highest importance to the welfare of the nation. Without apparent intelligent action upon the true proposition regarding the nature of the government, as contrasted with the hands-ofF theory, the necessary steps have been taken. Popular demands for governmental control, for restraint in one direction, for supervision in another, for the use of the taxing power for the benefit of localities, and so on in a thousand ways, have made it clear that that is not the best government which governs least, which keeps its hands off and permits the people to become the victims of sharpers or take the consequences, but that which watches for the welfare of the people. Former objectors, some of whom survive to the present, use the term " paternalism " in so JHE PASSING OF THE TARIFF

describing this function of the government. But epithets do not scare a nation which knows what it wants.

In truth, this action of tlie government is not patemaHsm at all, in the opprobrious sense. Rather, it is self-service of the people. It is the line along which all modem governments are de^ veloping. It seems to be established already as the true and necessary line of advance, whether the government be representative, democratic, or monarchical, that there shall be an equipment of the political body with organs which were not needed and were not known in the days when the laissez-faire school was strong, and when its opponents were young. In modern times there has been developed the system of national and state boards and commissions for the control of public-service activities of the body politic and for the service of the people, which establish to the observing mind the truth that government is certain to become a far more highly complex organism than at present; that these organs are legitimate for the proper ser^acc of the people, and that justice and prosperity are to be secured only as they are found in active operation, when modem conditions are present as they exist in the most advanced countries.

Again, in recent years there has been a phenomenal development in the popular mind of the doctrine of governmental ownership, or, at least, governmental regulation of natural monopolies and of public-service corporations. The business community does not accept this theory. The laissez-faire school is opposed to it on principle. But, whether or not the theory is sound, the country is practicing it and is evidently determined to practice it far more extensively. To-day ideas are deemed conservative in this field which were radical ten years ago. The president of the United States has been apparently leading the entire mass of the people, with the exception of the business men whose personal interests make them oppose him, in a movement for governmental regulation of the railroads. Corporations must come under the control of the government. In many ways the idea is making advances from point to point. Having a secure foundation in the postoffice department, strengthened by the general practice of municipal water supplies, by public highways, by successful government of railroads and electric roads in other countries, and by other practicable propositions which have been demonstrated, the idea marches on, making converts, and establishing with apparently invincible strength, a theory of governmental function which is totally contrary to the old order of things. Hence, again, a new era in the tariff contest has begun.

Other considerations tend to show how distinct is the new era of tariff discussion from that which seems to have closed. People's minds are becoming familiar with the idea that it is sound policy for the government to do things which are opposed by the old theory of free competition. This very circumstance, in the nature of the argument, tends plausibly toward the governmental support of industries. If it is for the government to engage in business enterprises for the service of the people, it would not be wise to condemn the new policy as a failure — so the argument runs — until it has had a fair chance to vindicate itself. For a time, therefore, the industry under the management of the government is an infant industry. Hence it is that the tendency of the times toward governmental regulation or ownership has been a powerful reinforcement of the argument for the protection of infant industries. It is doubtless not the fact that the high protectionists are in favor of governmental regulation or ownership of public-service utilities. They are not that class of men ; they belong positively to the class who oppose any such function on the part of the government. But the development of our institutions has put into their hands an argument most powerful with the mass of the voters, in defense of the proposition that it is sound doctrine and a paying policy for the government to give pecuniary aid to business enterprises which are trying to establish themselves. All the prodigious popular prejudice against corporation control and in favor of governmental management or ownership, is thrown upon the protectionist side by forces to