The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1894-01-13
Who Pays Tariff Taxes--Foreigners
or Americans?

The robust audacity of the Hon. Thomas
B. Reed, of Maine, has never been more
strikingly displayed than in the second SEN
tence OF the minority report on the Wilson
tariff bill. In it the Maine statesman, who
is in one sense a comrade and another a rival
of the illnsrious Mckinley, declares that ''by
this bill the larger part of the burden OF taxa
ton is transferred from foreigners and brought
to our own citizens"
This is a new phrasing of the old and favor
tie fallacy of the high protectionists that the
tariff duties are not paid by the American peo-
pie who buy the imported goods on which
they are levied. but by the foreign manuiac-
turers who export them. Some $500, 100000
IA year, more or less, is collected yearly at our
custom houses Mr.. Reed says, US Mr.. Me
kinley has has said so often before, that the
Foreigners pay il, and not the American peo-
pie.
Let us frankly concede that there is in this
claim Just shadow oil truth. There is just
one condition under which foreigners pay the
tariff taxes II is the exception which proves
the rule. When the supply of a foreign arti-
Gle is a foreign monopoly, then the foreign
monopoly practically pays the duty. For the
monopoly regulates the price to suit Itself.
Tea, for example, was not cheapened to the
consumer when the tariff tax on 1t was abol,
ished. But that was because the supply oil
lea is virtually a monopoly, controlled by
few men in China, and closely supervised by
the Chinese government.
With this comparatively unimportant eX'
ception, it is self evident that a duty on i'm
ported goods must raise the price OF those
goods by the full amount OF the duty. An
American manufacturer, for example, needs
wool to be used rs Il raw material IN his mill
He BUYS it through his agent in London, per
ppunu Ihp Quty. we
will say, is rs per cent. or 30 cents per pound
The importer must. of course. add this 30
cents TO the first cost in calculating the inll
cost to him. He must get enough Tor his
cloth TO cover the extra cost OF the wool, by
reason of the tariff tax. If it takes three
pounds of nnwashed wool TO make yard OF
cloth, he must get 80 cents yard for 1t more
than he would have TO get il there were no
tax on the wool. The 'Jobber' who hrst
buys the cloth must pay this 80 cents; he, IN
turn, must collect it from the smaller dealer
that dealer must get it from the tailor, and the
tailor must charge it to the man who wears
the clothes This is the way all tariff taxes,
with:the single exception noted, finally fasten
themselves on the consumer, that Is, upon
every man. woman and child who ever buys
anything that has been imported.
But this is not the most serious cost OF the
tariff taxes. What costs the most ESTIMATED
at 81 zoo. coo, 600 year, is the protection
that certain manufacturers get from IT,
Every part of the tariff which is protective
moi only adds 10 the cost of imported goods
from abroad, but adds also to the prices OF
similar goods that are made in this country.
When duty is put upon any article it newt
ably operates as check upon the importa
lion of that article, which cannot then be I'm
norted except at AN increased cost. II the
original cost was $40 aud the government
steps in and levies a duty OF 20, then the
price will have to go up to Sl5, and the con
sumer will lose the difference. But the Amer
lean manufacturer, who was formerly selling
at the market rate of $40, is no longer con
tented to do so. He has now no foreign com,
petition. He is protected" He can put
up his prices to $l4.5D without any fear that
the ''pauper goods Of other lands can com
pete with his. :.
The net result of this sort Of protection
40 the American manufacturer is $500 extra
proGt. The ne: result to the American con
sumner is 81 so loss if he buys the American
article. or S. loss if he buys the imported
article. These proportions may not be just
right. but this example shows the way the
tariff takes from the customer and gives TO
the manufacturer This is protection. In
the aggregate it cannot cost the consumers
sauch less than 81 600, 100000 year, ana
what it takes from the consumers 1t gives 10
the manufacturers.
The claim made by Mr.. Reed in his minor,
ity report that the foreign manufacturer, and
not the American consumer, pays the cost OF
protection is false one. The pretense that
high protection does not raise prices OF goods
made in this country is absurd. The BOUNCE
in the prices of everything when the Mchin.
ley bill passed is too fresh in the memory OF
lis millions of victims for that notion to pre-
ynii A tariff that does not permit such IN
crease of prices is non-protective. In that
case the great manufacturing monopohes ana
trusts you'd not care one cent whether the
tariff was reduced or nos. And there rs plenty
Of evidence that they do care great deal
more than that about it.