prices (of these manufactures) is inexact, antiquated, and inapplicable at the present time. Scarcely a single schedule has any honest and direct application at this time to the principle of protection. Under present conditions the tariff is not a protective tariff in any sense. It is a tariff of graft and discrimination, hurtful in a thousand ways. From one-half to two-thirds of the stuff made under this tariff bears to the consumer an unjust and unreasonable price because of the tariff. It is estimated by competent authorities that the graft, overcharge, and wrong done the American public because of the present tariff reaches $3,000,000 in a working-day. We have the facts, schedule by schedule, and are prepared to make the details public, should we receive opposition to our demand for a permanent tariff commission, through the appointment of which a proper adjustment of the tariff can be procured. We are not agitators or reformers. We are mostly Republicans and all protectionists.

In the course of the colloquy that followed Senator Aldrich asked Senator Bacon, "How much does it cost the American people to maintain the protective tariff?" Senator Bacon answered that it is variously estimated by different people, by some as low as five times, and by others as high as ten times, the amount realized from the protective tariff at the custom house. Taking seven as a conservative estimate, the Senator said it would be two billion dollars a year taken out of the pockets of the consumers of

the country in the increased cost of articles, which increased prices go into the coffers of the producers in whose interest the protective tariff is made.

PROTECTION IS AN ARTIFICIAL STIMULUS DRAWING CAPITAL FROM PROFITABLE INTO UNPROFIT

ABLE INDUSTRY

Adam Smith pointed out long ago that it is wasteful for a government to undertake to divert capital from one industry into some other. The industries already existing have the capital employed in them that their wants require; or, if not, more capital will soon flow into them, tempted by the evident profit whenever the demand is greater than the supply. But when, by an artificial stimulus (protection) capital is called for to carry on the protected industry, it must be withdrawn from some industry already established, causing a rise in the rate of interest. Protection is the artificial stimulus that thus draws capital from some established business into another industry, feeding the new industry with pap drawn from the consumers in the higher prices they must henceforth pay to the manufacturer. One of the objects of protectionists, according to its advocates, is the diversion of a part of the capital and labor of the country out of the channels in which they would otherwise flow, with profit, into new industries they would not otherwise flow into, because unprofitable.

This diversion is brought about through the coercive power upon capital of the artificial profit held out by the government to capital to undertake what otherwise it would not undertake.

It is evident, too, that the new, protected industry must offer more profit than the old, unprotected industry, else capital would not be tempted to make the change. As Professor Sumner says:

People would need no coercion to go into a new industry which had a natural origin in new industrial power or opportunity. No coercion is necessary to make men buy dollars at ninety-eight cents apiece. The case of coercion is when it is desirable to make them buy dollars at one hundred and one cents apiece. Here the statesman with his taxing power is needed and can do something. What? He can say: "If you will buy a dollar at one hundred and one cents, I can and will tax John, over there, two cents for your benefit; one to make up your loss, and the other to give you a profit." This is protection, falsely called "The American System."

But the real American system is one giving equal freedom and opportunity to all, without restraint, coercion, favor, subsidy, special privilege, monopoly, prize money, or interference by the government. Protection obliges all consumers-that is, everybody—to pay a premium to the few protected producers (for, compared with the consumers, they are

*Protectionism, p. 44.

few) who are carrying on otherwise unprofitable industries. It is a special privilege conferred by law upon certain producers to enable them to mulct all consumers enough to carry on with profit pauper industries they would not otherwise engage in.

PROTECTED INDUSTRIES ARE A DRAG UPON THE WHOLE COUNTRY

Taking protected industries at their own word, they are carrying on their business at a loss but for protection, for they tell us that without this special privilege of taxing the consumers of their wares they cannot carry on business, but must shut up their shops and mills. That is to say, the reason they do not carry on their business at a loss is because what otherwise would be loss is made up to them by consumers in the extra price government favor (through the tariff) enables them to obtain. In other words, protected industries, like insane asylums, poorhouses, reformatories, and prisons, are maintained by the rest of the community out of the profits they derive from unprotected and unprivileged industries. They are parasites, pauper industries living on the profits of the rest of the country. The more of them there are and the bigger they are, the worse it is for the rest of us. We should all be better off without them. Protection is, therefore, a drag upon the development of the country.

CHAPTER X

PROTECTION (CONTINUED)

PROTECTIONISM CLAIMS IT WOULD INJURE US TO OBTAIN SUGAR CHEAP OR WITHOUT COST

N 1902, ostensibly upon the ground that beet sugar was cheap in Russia because of a bounty, but in reality in the interest of the Sugar Trust, Congress levied what it called a countervailing duty on Russian beet sugar to prevent competition with American labor employed in raising sugar cane and beets and in making sugar. One of the frequent results of protective legislation is that it gives rise to hostile legislation in reply. So in this case the Russian government retaliated by raising her duties on American exports of metals and their wares. One not obsessed by the hallucinations of protection might think it would be a good thing for us Americans if we could buy sugar at a low price. But protectionists know better than that; they know that it is the interests of the sugar producers that must be consulted, not that of the sugar consumers. Therefore, if the heavens should rain sugar, as they are supposed to have rained manna of old, so we could all have