only) cannot be better expressed than in Stanwood's own words (p. 231), "The theory which he and his party associates held, that the tariff must be reduced in the interest of the great body of the people, and with no other tenderness for the so-called rights of manufacturers than was necessary to avoid a too abrupt and injurious change.

MEANING OF A TARIFF FOR REVENUE WITH INCIDENTAL PROTECTION

A tariff for revenue with incidental protection is one based upon the supposition that, by arranging a scale of duties so moderate as only to restrict and not to prevent importation, it is possible to secure revenue for the government and to stimulate domestic manufactures at the same time by thus raising the price of competitive foreign goods. This double object is undoubtedly possible, but it is one of the most costly of all the methods of raising revenue. For, while revenue to the government accrues only from the duties levied and paid on what is imported, another and a much greater tax is paid by all the consumers of the country on the domestic products thus "protected," sold, and consumed in place of the foreign products thus kept out of the country. It is attended by the further disadvantage that as imports are thus kept out of the country exports of our own products are kept in the country; for commerce or

trade between the merchants of different countries consists in the exchange of goods, products, etc. There cannot be exports unless there are imports; there cannot be imports unless there are exports. We cannot become great exporters unless we become great importers. When we shut out foreign products we shut in home products. The same Chinese wall, the tariff, that keeps out foreign goods keeps in home goods. A tariff for revenue so adjusted as to afford incidental protection is, therefore, a system that requires all consumers-that is, the whole people—to pay much in order that the government may receive a little. The difference is an extra profit pocketed by the manufacturers or the protected interests, or it is so much less loss than the inefficient among them would otherwise suffer if their business be of such a nature that it could not be carried on profitably without protection except through high efficiency. Again I repeat the term "free trade" is used in two different senses. It may mean absolute freedom of trade (and the closing of all custom houses) or it may mean the opposite of protection, i. e., customs duties, properly levied, for revenue only. I repeat this because protectionists will persist in using the term sometimes in one sense, sometimes in the other sense, and sometimes, when unusually perverse, they use it in both senses at the same time.

This tendency of protectionists to use the term

"free trade" with a wrong meaning is illustrated by what Representative Fairchild of New York said in a speech in Congress, February 14, 1911, "Scratch the skin of the average 'tariff for revenue only' Democrat and you will find the blood of a free trader." Here we see the sophist confounding the real meaning of the words he uses, probably purposely, in order to arrive at a result that he must know is false. If he does not know it, he ought to. The tariff for revenue man is a free trader, be he a Republican or be he a Democrat; the free trader is a tariff for revenue man, be he a Democrat or be he a Republican.

In a speech in 1882 Senator Frye of Maine said:

I am a protectionist from principle. If there were no public debt, no interest to pay, no pension list, no army and no navy to support, I still should oppose free trade and its twin sister, tariff for revenue only, and favor protective duties.

One may excuse a good deal as the mere exuberance of unpremeditated oratory, but one does not expect to meet such ignorance in an educated United States Senator.

Let it not be forgotten that revenue through customs duties is received only as foreign goods are let in, while protection operates only in so far as foreign goods are kept out. The two are antagonistic, not part of one whole.

MEANING OF A TARIFF FOR REVENUE ONLY

A tariff for revenue only is a tariff so framed that the government shall receive all the duties paid by the people and that no money in the form of increased prices because of the tariff, shall be paid by consumers to producers. If duties are high enough to stop imports, no revenue is received by the government, yet consumers pay nearly the same high prices for all the home products they buy as if they were all imported and paid the duties. So the consumers pay nearly the same sum as the duties (besides the real cost of the goods), but to the producers and not to the government. All duties on imports should now gradually be so fixed as to yield the greatest revenue to the government. It frequently happens that a reduction in a duty brings about an increase in revenue, the larger amount imported in consequence of the reduction, more than making up for the loss through the lower rate. The problem of the American statesman today is to keep on gradually reducing the duty so long as the revenue therefrom increases in amount. When duties gradually reduced bring less revenue, then the rates are too low (if the object be to produce the largest revenue possible). When there is a surplus, duties may be so far diminished as to stop any increase of surplus.

Professor Taussig says that the claim that any

duty whatever is inconsistent with the principles of free trade (meaning by free trade a tariff for revenue only) is erroneous, for it is only the duty that causes the substitution of a domestic product for an imported product that conflicts with the principles of free trade.

Profesor Perry thus defines free trade:

Free trade is the opposite of protection so called, and not of customs duties properly levied for revenue, and is completely realized in any country whenever any tariff tax is laid solely for the sake of the revenue to be derived from it. When used in its legitimate sense, the word "protection " is an honest and needful word: when used in reference to tariff taxes it is full of deceit.

Professor Sumner calls free trade "a mode of liberty."

Of course, where the principle here contended for is consistently followed, a duty at the custom house on an article must be accompanied by an excise or internal revenue tax of the same amount on the domestic product. The two systems of taxation operate only to bring in revenue to the government, without interference with the laws of trade or influence upon the development of industries within the country, and everyone is left free to buy either the domestic or the foreign product, according to his taste or his purse.