FREE TRADE MEANS FREEDOM OF TRADE SUBJECT TO NECESSARY TAXATION

Free traders hold that the welfare of all mankind is best subserved by having each country follow as closely as it can the plan of allowing everyone to trade where he finds he can trade best, subject only to such taxes as may be necessary to carry on the government of the country. In the same way liberty does not mean license, freedom to do whatever each one pleases, but freedom subject to certain necessary limitations.

It must always be remembered that when an excise tax is imposed. corresponding to- that is, of the same amount as—the duty upon imports of the same article, the result is a tariff for revenue only, for none of the higher price, on account of the tax, goes into the pocket of the home producer, while the consumer pays the same price whether he buys the domestic or the imported article.

PROSPERITY UNDER A TARIFF FOR REVENUE

In 1842, under a tariff for revenue, with but little protection, Charles Dickens wrote from Boston, with some of the exaggeration, it must be admitted, we might expect from him, "There is no man in this town or in this State of New England [sic] who has not a blazing fire and a meat dinner every day of his

life. A flaming sword in the air would not attract so much attention as a beggar in the streets."

How is it now? Since we have had high protection the condition of our laboring classes has steadily moved towards that of the laboring classes of Europe. I do not say that protection has done it. That would be to repeat the same error in logic that protectionists make when they claim that high wages are due to protection. The Lawrence strike and the disclosure of the awful condition of the laborers there has awakened the American public to realization of the fact that labor in this country is approaching the conditions of labor in Europe and that protection has not prevented it.

OUR GREATEST PROSPERITY WAS UNDER APPROXIMATE FREE TRADE, FROM 1846 TO 1861

From 1846 to 1857 the average tariff duties were twenty-four per cent. From 1857 to 1861 they were about nineteen per cent. During these fourteen years of low duties imports into the United States increased from 118 millions in 1846 to 354 millions in 1860, or 200 per cent. In the same period our exports increased from 109 millions in 1846 to 333 millions in 1860, or 204 per cent. Increased duties, combined with the war, put an end to this rate of increase, but whether under low tariff or high tariff, exports continued about even with imports. All these details

prove the correctness of the statement that commerce is barter or exchange of commodities, and that the sum of the exports is equal to the sum of the imports. Therefore, if it be desirable to increase our exports, the duties must not be so high as to exclude imports. Franklin Pierce says, "The present annual loss to American exporters, brought about by the protective tariff, is a diminished sale of at least a billion dollars a year."* Not only is this commercial benefit, thus lost to us; it is lost, also, to those with whom we would trade. The loss is mutual. So is the loss of the closer bond between us that this commerce would bring us. Nations seldom go to

war with those in close commercial relation with them. Increased commerce means diminished probability of war.

The census of 1860 shows that the national wealth increased, from 1850 to 1860, 126 per cent, the greatest percentage of increase in any decade in our history. This shows that later periods of increasing prosperity were not due to any protective tariff, and that protection was no longer necessary. According to Carroll D. Wright, who is admitted to be high authority, the capital in the United States employed in manufacturing increased during this period of 1850 to 1860 from 533 millions to 1,009 millions. According to protectionist logic this shows that increased protection lessened our rate of increase. *The Tariff and the Trusts, p. 233.

SENATOR MORRILL ON OUR GROWTH DURING THIS PERIOD

Commenting on this "prodigious growth," Senator Morrill, who is now looked upon as the father of protection in this country, said, in a speech in Congress in 1862, "Such facts should make every man with an American heart in his bosom glow with pride." And again, in a speech in 1867, referring to 1860, he said, "And that was a year of as large production and as much general prosperity as any, perhaps, in our history."

Then why was protection any longer necessary? The fact is, we have prospered under all tariffs, but most of all under a low tariff. We have prospered in spite of protection. Natural laws are more powerful than artificial ones, and in the end will prevail.

CHAPTER VI

FREE TRADE (CONTINUED)

FUTILITY OF THE CLAIM THAT PROSPERITY IS DUE TO PROTECTION

THINK

HINK of our unrivaled country, its immense area, its varied climate, soil, and products, its coal, petroleum, natural gas, iron, copper, gold, silver, forests, prairies, rivers, lakes, great inland seas, harbors, a free people, with the best political system in the world, in spite of its faults, attracting the enterprising and industrious to our shores, all giving to every American and to every European coming here every opportunity to develop and to become whatever his talents fit him for! Think of our free school system, open to all; our free institutions and great business opportunities, the best in the world for the development of economic strength; our absolute free trade between the inhabitants of the states of the Union!

Along comes the protectionist and he tells us that all these are not the cause of our great prosperity. They are all in vain. "I made all this prosperity with my taxes. If it had not been for me and my 'American system' you could not have done all