Belmont chronicle. [volume] (St. Clairsville, Ohio) 1855-1973, 1890-04-24
IS THE TARIFF A TAX?
EVERY FREE-TRADER WOULD HAVE
US BELIEVE THAT 1T IS.
The Duty Is Not Added to the Foreign
Price-Protection Reduces Prices of Ev-
cry Commodity-No Relation Between
Protsction and Trusts.

Price-Protection Reduces Prices of Ev-
cry Commodity-No Relation Between
Protsction and Trusts.
From authorities high and low we are
constantly regaled with the familiar
statement that the tariff is tax. So
often and so vehemp1tly is this pro-
claimed that busy men often accept it,
not understandingly, but rather from
sheer mental exhaustion, as one of the
many unexplained things which they
daily meet and have not the time or
strength to examine. Others accept it
from q sort of intellectual duress, be-
cause men whom they are accustomed
to look upon as authority, and to whom
they are wont to consign the labor of
doing their thinking, give it their fiat.
A somewhat famous English satirist
once followed man, in Imagination, from
his taxed cradle, through taxed world,
to his taxed coffin; and the biennial crop
of political reformers, paraphrasing his
words, have proclaimed the ubiquity and
enormity Of taxation, loudly asserting
that the duties levied by the American
government upon imported commodities
are paid by the consumers in the form Of
enhanced prices, and that in addition to
this the price of like articles produced at
home, as well as the price of the foreign
article, is enhanced by the amount Of the
duty levied.
Although the fact that imported COM
modities bear an average duty of AZ per
cent. might seem upon superficial con-
sideration to warrant the statement that
the price Of imported goods, and of like
American produced goods, is increased
by that amount, and to justify the earn
est denunciations of Free-traders, still a
candid and sober consideration demands
that an inquiry be made whether the
statement be true. Denunciations are not
evidence, nor are bare assertions proof.
1t seems that there are three clearly de-
fined classes of commodities upon which
the tariff operates differently. They may
be said to consist, first, of commodities
which we do not produce, but import
whatever we consume: second, of COM
modities which we produce and do not
import, whether restricted or not; and
third, of commodities which We produce
and also import.
All commodities may be arranged I'M
der some one of these heads, perhaps
somewhat loosely, but definitely enough
for our present purpose.
Concerning the frst two groups moth
ing need be said. They are not ordi-
narily those commodities with which
Protectionist, as Protectionist, concerns
himself, for duty levied upon such
commodities protects no American in
dustry.
The third class of commodities will be
found to involve complicated considera-
tions. This class includes articles pro-
duced alike in the United States and in
foreign countries, and consequently those
in which there is competition between
home and foreign producers. This is
the class of commodities concerning
which there is the real dispute between
the two systems Of Free-trade and Pro-
tection. For the purpose of considering
this class of commodities cotton goods af-
ford as good an illustration as any other.
Suppose that cotton goods were now
paying no duty and were selling in the
United States at five cents per yard, be-
ing partly of foreign and partly of home
manufacture.
Would the levying Of duty Of 20 per
cent. increase the price Of such cottons
by one-fifth, or, in other words, would
cottons sell at six cents per yard? Under
free competition they would not. Why
should they? American producers prior
to the levying of the duty Of 90 per cent.
could manufacture cottons at five cents
per yard. The cost of production is no
greater now, but another factor In the
problem Of price has been introduced.
The foreign supply at five cents per yard
within our ports is now diminished, un-
less we suppose that the English produ-
Ger prefers to reduce his profits rather
than curtail his market, in which case
the effect upon prices Of the duty levied
would be nothing.
II, however, the English manufacturer
could not or would not continue to sell
cottons at the former price Of five cents
a somewhat different result must follow.
Either the American consumer must buy
the cottons which he must have in ex-
cess Of the former American product at
the rates at which foreign producers can
place them within our ports, and per-
haps submit to a somewhat increased
price for the home made article, or he
must look to a stimulated production
among American manufacturers.
This latter result rapidly follows when
capital is so eager of investment as at
present, and when every avenue of prof
table employment of wealth and busi-
ness capacity is quickly occupied and
pre-empted. In either case the result
would be an increase at first, the price
fluctuating between five and six cents,
according to varying conditions of pro-
duction; but in the latter the increase
would tend to be temporary and the price
would approximate toward the five cents
previously demanded, or under come
conditions even to a lower price, and this
result would come about on account of
the competition among American pro-
ducers and the resultant new and i'm
proved processes of manufacture and
better methods of management and con-
troll
This Is an effect too often lost sight of
in measuring the relative advantages and
disadvantages Of the two policies of Pro
lection and Free-trade. 1t is well known
that labor and capital hesitate to embark
in new enterprises when the rewards
offered are only ordinary or uncertain
and distant, and the possibility of loss
great; yet when once engaged in the in
dustry, when the capital has been fairly
fixed in the plant, and wher labor and
executive ability have been attracted to
it, they are ready to enter into competi-
ton so incessant and so eager as to insure
prices which measure the cost of labor
and interest, and only q moderate amount
Of profits.
1t is one Of the stock arguments of
Free-traders that duty levied upon for
sign made goods enables home producers
Of such articles to raise the price of their
own wares by an amount equal to the
import duty, and that such a tariff is the
efficient cause Of the many trusts and
combines that under present industrial
organization find free scope for activity.