The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1912-10-17
MEANING OF TARIFF FOR
REVENUE.

A subscriber asks the difference in
principle between protection and al
III for revenue, and why the latter is
termed free trade. These questions
are both rather elementary but none
the less important in understanding
the tariff.
the query as to why tariff for revenue
Is termed free trade, is that the gov
eminent must raise money in some
name to pay the operating expenses.
This can he done either by direct tax
ntion as is done by states. counties
and municipalities. or by indirect tax
alton through a duty on imports. The
impossibility of equalizing the proper
~ basis in the nation makes the d.
rect method impracticable. Hence, the
money must be raised by duties-or
a tariff. If the duty is levied to pro-
duce revenue it will have no reference
10 anything except raising that mon
cy. That is one purpose Of the tar
IN. The other purpose is to so ad-
Just the schedules that in addition to
producing the necessary revenue to
run the government. the industries
nf the nation shall be protected
against cheaper production Of the
ZANE industries in a foreign country.
Tho latter is termed a protective tar
:!., while the other. not having the
protective principle is termed free
;"ade. In a word. the term free trade
and protection apply to the principle
specified above Of giving protection,
md not to the principle of revenue
production. Consequently a tariff for
revenue is a tariff without any pro-
tective element. and so far as the
protective application of the tariff is
concerned, free trade.
The best illustration Of the free
trade principle can be drawn from
coffee. This nation does not Produce
tective theory. 1t coes not enter into
tective theory. it Is not entering into
competition with any home product.
and is. admitted free. The tariff for
revenue. or democratic idea, is that in
asmuch Is We must import all we use,
n duty should be placed on 1t. so that
the enforced importations would pro-
duce revenue. On the other hand we
grow wheat and the same product is
produced in other portions Of the
world. Because Of cheaper labor.
cheaper land and poorer methods Of
living other countries can produce
wheat chaper than we can. Now. Il
thc:e were no protective tariff on
wheat the foreign product being more
Chez ply produced. would crowd tho
American product aside and take our
market. But II the protective prin-
ciple is applied the tariff will be 80
nxed that when the foreigner pays
It and Offers the product in our mar
ket. he is Oh a cost equality with the
American producer. That strictly
speaking. is a protective tariff. But
II the tariff is raised 50 high that
when the foreigner pays it. 1t makes
the cost Of his product in this coun-
try higher than the cost of the home
product. that condition, in the past
has been termed a high protective
tariff. Free trade on wheat would be
placing on 1t a tariff 70 low that the
importation of it into this country
would be profitable to the foreigner,
thus giving the American market to
the people Of some other nation in
stead Of to the wheat producers of
Dill own. This illustration will serve
for every commodity grown or manu-
featured in this country which enters
into competition with the foreikn pro.
duction.