Reporter and farmer. [volume] (Webster, Day County, Dakota [S.D.]) 188?-1946, 1892-07-07
When the tariff Is a tax and when
It Is not!

NV tfo hot"h "o eo~ ~ffS "''S''
tits not!
The "tariff is a tax" even to the
full amount of duty when it is i'm
posed for e only on an arti-
Gle which We do not produce. In
every such case the duty is added
to the foreign price and paid by
the consumer. Pit a duty of ten
cents a pound on tea and, the price
will advance by just the amount of
the duty, because there is no CON-
peting product to influence the
market. The importer pays the
duty to the Government and then
adds 1t 30 the foreign cost, and re-
covers every dollar of it from the
American consumer. Hence, a tar
for revenue is a direct tax upon the
people to the full amount Of the
duty. But when the duty is i'm
posed on an article we do or can
produce, then such a tariff is not
only not a tax to the full amount Of
the duty, but because the means Of
lDwering the price both of the for
eign and domestic article sometimes
eve below the duty lies in the
law or laws imposing it. This result
flows from the universal law of sup
ply and demand: lessen the supply
o: increase the demand for a given
article, and you will advance the
price; increase the supply or lower
the demand and you will lower the
price. 70 establish and maintain
domestic industries which could not
otherwise exist and increased pro-
duetion follows, a lowering of pri.
ces will inevitably result.
Alexander Hamilton recognized
this principle when he said:
"Though 1t were true hat the
immediate and certain effect of u
tariff was an increase of price, il is
universally true Ina. the contrary is
the ultimate effect with every sue
cessful manufacture. When a do
nestle manufacture has attained
perfection and has engaged in the
prosecution of it a competent mum
Der Of persons it a be afforded,
and accordingly seldom, or never,
fails to be sold cheaper in process
Of time than the foreign article for
which 1t is a substitute.
The truth OF this is within the
experience and observation Of every
one. Many domestic articles are
selling even for less than duty. A
striking illustration is afforded in
the case of salt. The duty is II
cents a hundred and salt sells for 10
Will some n who believes the tar
if is a tax, explain how the purchas.
sr of a hundred pounds of salt for
ten cents pays a tax of twelve. In
u hundred different articles Of do.
nestle manufacture, the duty is
more than the article sells for in
the open market, while these same
articles are successfully competing
for places in foreign markets.
We challenge the mention of a
single protected article produced in
this country commensurate with the
home deh.and that ian net be pur.
chased cheaper to-day than under
any period of free trade.
But you answer, of the tariff is
not a tax, how is it that when the
duty on sugar was removed the
price fell by substantially the duty?
This demonstrates that the tariff If
a tax paid by the consumer" Not
so-it establishes on the contrary,
what we have already said, that a
free-trade tariff is a tax;
for it will be remembered that su.
gar is chiefly a foreign production,
the domestic supply being to small
to made u competing factor IN our
market.
But it is said, if this be true, of
what service is the duty? Why not
take it off? Why retain = duty OH
an article when 1t can be bought for
less than the duty? Well, if it
worksssuch a result, why not leave
it ON, what possible harm can it do?
1t would be silly to take 1t of, or
reduce it to a purely revenue basis,
for the ease that the foreign pro
ducers might then seize our market
destroy the competing domestic in
| dustry by flooding our markets with
cheap goods possibly at a temporary
loss, and when all competition was
destroyed, advance the price and
recover all they had lost. You
might as well say to the Hollander
"'Take down your dykes, the sea
has not come in on you for five hum
dred years." but the sturdy and in
telligent Hollander would say
"True, but the reason why is be.
cause the dykes are theret"