The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1925-10-07
An Editorial By a
Banker

by Benjamin M. Anderson Jr., Economist for
the Chase National Bank, New York City,
- protective tariff is effective only to the
u extent that it reduces supplies in the do
nestle market. Commodities which we pro-
duce in excess of our domestic requirements
as wheat and cotton cannot be raised in price
by the tariff. A protective tariff can build up
an industry which would not otherwise be de-
veloped in a country because the country's ap-
titudes in other lines are greater. It does this
however, only at the expense of other indus
tries, by drawing labor and supplies away from
them. and imposing burdens upon them
tariff on a commodity which is used as raw
material, a sem-fnished material in some
other industry is injurious to the other indus
try quite as much as it is beneficial to the frst
industry.
The one is pulled down as the other is
built up. There is no magic in the protective
tariff. An act of Congress cannot create
wealth In the United States we
have relative abundance of land, a relative
abundance of capital and relative scarcity
of labor. We succeed best in those industries
where land and capital can be employed law
V.
IN mass production where multitude of iden-
teal articles can be produced from a single
model
There is no mystery about the high wage
scales in America These high wage scales are
not begotten by the tariff are they depend
ent upon the tariff. They grow out of the high
efficiency of labor per individual. This high
efficiency is due (a) to the widespread educa-
~tion and good native qualities of the labor and
OBJ to the comparative abundance of land and
capital with which our labor may work Our
farmers, by and large, are injured by the tariff,
both through having their costs raised and
through having their foreign markets reduced.
Copper production stands on the same footing
Various other raw material interests are in the
same position.
Another large body of occupations injured
by the tariff and in no way benefited by the
tariff consists of those who have almost exclu-
sively domestic market which is not subject
to foreign competition. These are hurt as pro-
ducers by any increase in their prices growing
out of the tariff. A very large, highly impor-
tant and very miscellaneous group of occupa-
tions belongs to this class
Some of the more important of these ill.,
clude the railroads. the building trades, whole
salers, retailers and other distributors, public
utilities such as light power and telephone
newspapers, hotels, public employees, including
the Army and Navy; all educational institu-
tions, and professional men generally.
Finally, everybody is hurt by the tariff
as a consumer. Everybody in the United
States pays more for many commodities than
it would be necessary to pay if it were not for
tariffs on these commodities. This extra pay
ment by the consumers constitutes the price
which the country pays for maintaining in
present volume certain industries for which the
country is not so well adapted comparatively
as it is for other industries. 1t constitutes the
subsidy which the country supplies to certain
industries to enable them to bid away labor
and capital from other industries which could
use the labor and capital better if there were
no tariffs.