The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1886-09-18
Correspondence of the Democratic Advocate
How the Tariff Works.

A tariff, as the word is now understood in
this country, is tax or duty payable to the
government on merchandise imported from
foreign counties. Strictly it is schedule or
table of dutiabe goods with the amount of
duty affixed to each article. There was
time in the history of European governments
when not only imports but also exports were
taxed in the same manner. This was often
done on the plea that the expectation of any
kind of goods from country would tend to
impoyerish that country. But the world has
grown wiser than that, and tariff duties are
now generally restricted to imported goods.
In the first instance, of course, the impor-
ter pays the duty on the goods which he i'm
ports and afterwards offers for sale. If a
New York merchant imports cargo of cof-
fee or tea, he pays the duty to the govern
ment. But afterwards he adds the amount
of the tariff to the cost of each pound of cot.
fee OF tea, and charges the same to the retail
dealer, and the latter charges it to the consul
mer. In all cases the burden of the duty i'm
posed falls at last upon the consumer. The
man who really pays the duty is not the
importer, nor the retail dealer, but the man
who drinks the coffee or tea. This is an i'm
portant truth, though in the discussion of the
tariff question it is often forgotten or obscur-
ed Let the reader fix it well in his mind, so
that he may ever hereafter remember it.
Import duties may be imposed for either
one of two purposes, namely, to raise revenue
for the requirements of the government, or to
protect home industries against foreign COM
petition. In the first case we have tariff
for rerenVe; in the second we have a protec-
tire tariff. If the object is to raise revenue,
the tariff must be light, so as not seriously to
affect the amount of foreign goods imported
and consumed in the country. And it should
L l.. ,ohr dc
not generally produced in the country, such
as coffee, tea and similar foreign products.
If the object is protection, the tariff must be
levied upon such classes of goods as are, or
may be, produced at home, and must be suf-
ficiently high to limit or prevent the importa
ton of the same class of goods from foreig
countries. A protective tariff, just in the
proportion that it protects, that is, restricts
or prevents importation of foreign goods,
yields no rerenlue to the government. This is
another truth that should be well borne in
mind A simply Rrotectire tariff would leave
the government without money to carry on
its operations, and would necessitate either a
tariff for revenue besides, ar direct taxation.
But what is the precise mode of operation
of a protective tariff, and how does it affect
prices and wages? In general we may answer
that the imposition of tax upon imported
goods enables the home manufacturer to
charge higher price for his products, COR
responding to the amount of the tax, and then,
if he piU, to pay eorrespondingly higher
wages to his employees. This last point we
shall not discuss Just now. Our object at
present is simply to make plain the natural
effect of the system of protection. Suppose,
for instance, that French cloth can be carried
across the Atlantic Ocean and sold at three
dollars a yard in this country. What now
|. L. g
of two dollars yard on such cloth? Itwould
raise the price to five dollars yard But it
would enable the American manufacturer of
cloth also to advance the prices of his goods,
If he would ADVANCE them two dollars q yard,
then, so far as the market is concerned, he and
his French competitor would still be on q par.
But if he were to advance only dollar and
seventy-fve cents yard, then he would drive
from the field the French manufacturer, who
had already been selling at the lowest possible
figure, and would yet pocket profit of
dollar and seventy-6ye cents on every yard of
his cloth. This is the way protection works.
The foreign competitor is driven from the
field. The home manufacturer has the market
all to himself, and gets dollar and seventy.
five cents more for his goods; and every man
in the country who wants coat, pays just
that much more for every yard of cloth than
he would pay if there were no protective
tariff.
Does the reader understand the case? We
have not yet presented the whole subject, by
any means, but we have presented the princi
pie of protection, and have shown how it
works. One article or item may stand for all.
In place of cloth one may read silk, or mus
lin, or calico, or leather, or iron, or anything
made of iron, from locomotive or thresh
ing machine to pocketknife or horseshoe
nail, and in every case the principle is the
same and the result the same. The consumer
or purchaser of any protected article, whether
it be coat, or hat, or a pair of shoes, or a
pillow, or wagon, or reaper, pays as much
more, or at least very nearly as much more,
than the real value of that article, as the tariff
on. it amounts to and this ercess of price
goes not to the government, but to the manu-
fdcttrer or producer. The effect of protec-
tive tariff is simply to compel the consumer to
pay bonus to the producer of goods which
could be purchased cheaper if the market
were free. We hope our friends referred to
in our first article will read this and ponder
the case, until we shall give them still more
to think Of LUX.