The times. (Owosso, Mich.) 1882-1897, 1890-07-04

How THEY WOULD AFFECT OUR
MANUFACTURING INDUSTRIES.

The Whole Question One OF Labor and
Wages.
The objection most urgently advanced
against Protection to raw materials OF
manufacture is that, entering as they dc
into so many different processes of manu-
facture, the price of the finished article
is increased to such an extent that we
cannot successfully compete with foreign
producers of like articles. In BRIEF it is
argued that if we had access to free raw
wool we might compete in our finished
wooden fabrics with England and the con-
tinent If we had free iron ore, our fin
ished products, which contain large
amounts of iron, could compete with like
foreign made commodities. If all our
raw materials were free, our manufac-
tured articles would find an extended
market, while our own people would be
benefited through receiving cheaper man.
ufactures. These arguments SO plausi-
bly, urged, depend, however, upon two
assumptions. The first is that if the duty
on raw materials was removed the price
of such raw materials would be perma-
nently reduced by the amount of duty
levied.
The second assumption is that, with
raw materials of the same value as those
of foreign manufacturing countries, we
could compete with them in the markets
of the world. These two assumptions
we will examine in the order given. BY
way of illustration we may cite the wool
growing industry. The tariff on raw
wool prevents the foreign producer from
destroying our wool growing industry.
If this duty were taken off, the foreign
producer could send his wool into our
ports at prices which would destroy the
American industry. After the Ameri-
can industry was destroyed that part of
the demand before supplied by the
American producer would be transferred
to the foreign producer. With this in
creased demand for raw wool its price
would naturally and inevitably rise.
The same fact of production is clearly
shown in the case of the mining industries
of Great Britain, which, in some instances,
have been carried on at positive loss to
their owners, in order to enable them to
destroy American competition. In re-
port of the commissioner appointed to in
quire into the condition of the mining
districts of Great Britain, in 1854, we
find the following language used:
II believe that the laboring classes
generally in the manufacturing districs
of this country, and especially in the
iron and coal districts, are very little
aware of the extent to which they are
often indebted for their being employed
at all to the immense losses which their
employers voluntarily incur in bad times,
in order to destroy foreign competition,
and to gain and keep possession of for
eign markets. Authentic instances are
well known of employers having in such
times carried on their works at a loss
amounting in the aggregate to three or
four hundred thousand pounds in the
course of few years."
After this competition has been de-
stroyed, the English capitalist not only
resumes his usual profits, but recoups
himself for losses sustained in destroy.
ing his American rival. Reverting to
the illustration of wool, another feature
of this same assumption is shown. Tho
American wool grower, encouraged by
reasonable Protection, introduces inn
proved breeds of sheep, and thus in
creases the average clip per head. AS
this clip is so increased there results a
greater and more valuable product. This
increase must go to somebody. Either
the wool grower will retain it permanent
ly in greater profits, or competition en-
tering will lower the prices to an average
return for labor and capital expended.
1t is law of production which Free
trader and Protectionist. must alike recog-
nize that, when capital is as mobile as
now, TIE profits in any protected indus
try will not permanently remain above
the profits gained in other industries,
whether protected or not, which require
substantially equal capital, labor, skill
and other essentials of production. AS
a result of this law the increased facili-
ties for production of wool would cause
lowering of price, while at the same
time the grower would be receiving aver
age profits.
Let us now examine the assumption
that with raw materials at the same price
which other nations pay we could sue
oessfully compete with them in the mar
kets of the world. Evidently there is but
one way in which we could do this, and
that is by selling the same article for the
same or less price. The cost of raw
materials is not the only item that enters
into the cost of production of a finished
commodity. There is the amount paid
as wages, the interest and risk on capital
sunk in the plant, its deterioration in
value and the cost of administration, all
of which must be accounted in determin-
ing the cost of production. The mate
rails which in their raw state represent
the value of dollar become worth many
times that amount when they have un-
dergone number of processes of manu-
facture, and this increase in value is due
to the factors of production just enumer-
ated.
According to The london Artisan
dollars worth Of lead when made into
printing type is worth $50. An amount
of iron of like value when made into or
namental work is worth $4s; into scis-
sors, $3.50; into penifnife blades, $3.50.
and into sword handles, $3.50. Even
hemp, which does no, undergo very ex-