Spencer Heath Archive

Item 2162

Typescript on faded paper of a draft for a debate at National Law School on whether or not protective tariffs should be abolished. Although not signed by Spencer Heath, many pencilings are in his hand, so presumably he was the author. He was president of the debating team for a year and was keen on the subject of free trade from his Georgist connections.

 

 

Honorable Judges, Ladies and Gentlemen:

 

Our country, in wealth, population, commerce, manufacture enterprise and skill, stands acknowledged the greatest of the great nations of the earth.

 

 We are a league of mighty states, almost any one of which could rank well as an independent power. As compared with other nations, our states have had a phenomenal growth. On a great, new continent, under a government which left men more free than any other, this growth was to have been expected. In the new world lay the treasures of mountain, soil and stream, which a free humanity could but shape into the wealth and greatness of a mighty nation.

 

 Other peoples too have dwelt in favored land and fruitful clime, but no greatness came to them like ours. All nature’s gifts before them lay but they had not freedom. What we had they had not, — freedom to produce, exchange and enjoy, freedom to grow into the greatness that ever awaits humanity freed from the shackles of tyranny and turned loose upon the bosom of the earth.

 

 And so it is freedom that is the key to our prosperity. And amid the complex problems which come with greater power and denser population, the highest statesmanship must look to guard and keep that freedom to which our strength is due.

 

 Our liberties have been of many kinds, but the question before us now is a commercial question and a question of commercial freedom.

 

 Our commerce and manufactures have not grown because of tariffs or other restrictions but in spite of them. Notwithstanding all British attempts to suppress our manufactures in colonial times many of our present industries had acquired considerable growth even before the revolution. Virginia had iron furnaces in 1619 and Massachusetts in 1644. After 1725 iron was regularly exported from this country; in 1770 there were 40 paper mills in the three states of Pennsylvania, New Jersey and Delaware, and at that time Pennsylvania had 60 iron furnaces. In 1769 there were 389 vessels built, and before 1789 the metal industries of Pennsylvania and Connecticut were fully established. For a long period after the Revolution our commerce was almost entirely free with all the world. During this time our country experienced the most phenomenal growth ever known. Freed from the taxes on trade, which the then tariff-ridden England had imposed, our industries sprang forth with a normal and spontaneous growth. There was no cry for protection for our industries, and such a movement would no doubt have been opposed as a reversion to the odious restrictions of British protectionism. But it was not alone our free foreign trade that counted for our great prosperity. This has always been small when compared with our domestic trade. At the present time it is estimated at not more than one fortieth of our total trade. The great commerce between the states has been the grandest free trade experiment ever known. The yearly gross tonnage sailing out of one of our Great Lake ports is said to be greater than that of any other port in the world. There can be no doubt that the great free commerce of our states has been the greatest factor in our commercial growth. Our interstate commerce is so highly prized that we have special laws and a permanent commission to prevent any possible interference with this enormous free trade. The commerce between New York and Pennsylvania is rightly esteemed as of greatest benefit to all. How strange that any could regard as evil a like trade between New York and the Province of Ontario.

 

/Note reads: “Begin here for 17 min”/

 

 In 1789 when the first tariff law was enacted, it was but timidly proposed to lay a slight tax upon the people in the way of higher prices in order to encourage a few lines of manufacture whose development was considered slow. No one proposed this as a permanent policy, nor has it been so proposed until quite recent years. Throughout the speeches and writings of all the early protectionists, we find no tariff urged or upheld but as a temporary aid to secure a more symmetrical development of our industries. The opening once made, however, the tendency has grown until now there is scarcely a material which manufacturers must employ, or a commodity which the people must consume, but is rendered higher in price and more difficult to obtain by its burden of tariff taxes. It may be granted or not that this policy in its inception was wise. It is simply adverted to, to show that a permanent tariff policy has had no sanction in the past and is only just now being urged under the slogan of “Stand pat” and “Let well enough alone.”

 

 Now after a long period of protective tariffs, the most conspicuous fact of our industrial development is the great business combinations which are causing universal comment and no little anxiety. Mr. Henry Havemeyer, the sugar magnate, made the following admissions before a committee of the House:

 

 Said he: “The mother of all trusts is the customs tariff bill —

It is the government through its tariff laws which plunders the people, and the trusts, etc., are merely the machinery for doing it.” Whether we accept this statement or not, it will be sufficient to show that the tariff fosters trusts and gives them added power over the once competitive business of the country.

 

 During the recent era of combinations, the increase of which has been so marked under the present tariff, there has been a decided general rise of prices. Many staple commodities, controlled by trusts, have been advanced from 50 to 300 per cent.

 

 The Iron Age for January 4^th, 1901, shows the following increase of prices:

 

          Wire nails                   Barbed wire

Jan 1895  $.95 per keg    Jan 1895  $1.90 per hundred lbs.

Jan 1900  3.53 per keg   Jan 1900   4.13 per hundred lbs.

 

 According to the Department of Labor Bulletin for March, 1902, window glass that in July, 1895, sold for $1.40 per box, sold for $4.80 per box in April, 1901. Plate glass advanced from 36 cents per foot in 1897 to 90 cents in 1900. The price of salt at Buffalo was in 1897 $2.50 per ton. In 1901, $5.70 per ton.

 

 At the same time export prices have remained low or have actually declined. In general, it may be said that the same goods are sold at home for from 1½ to 3 times the price obtained abroad. This difference between export and domestic prices is so great that it is a growing practice for merchants to buy goods for export, ship them abroad, and have them secretly returned, duty free, to sell again at a good profit in this country. Though often much greater, the general difference between home and foreign prices is about equal to the tariff which imported goods must pay, showing clearly that we must pay the tariff to the trusts on the entire home production as well as a tariff to the custom house on all imported from abroad. As an illustration, the great borax beds of the West were no sooner controlled by the Pacific Coast Borax Company than a tariff was placed on borax to protect this infant industry, which now works one deposit only of the ten or twelve under its control. Borax sells here for eight cents per pound; in England, 2½ cents per pound — tariff 5 cents per pound. There are hundreds of industries in which borax is used, all of which are discouraged by a tariff which compels them to pay 3 or 4 prices for borax alone. What is true of borax is true of almost everything else. Our tariff taxes do more to discourage industry than almost anything that could be devised.

 

 Honorable Judges, if a protective tariff could do any of the things that are claimed for it — if it could raise wages, encourage industry, or confer any general benefits whatever, — and if these alleged benefits would not be destroyed as soon as  they were distributed as widely as the taxation which maintains them, — even if there were real benefits in protection, would it not be absurd to say that our great industries, mostly trusts, are in need of a coddling tariff or other paternal device? American commerce and manufacture are probably the most firmly established in the world. The flood of cheap American goods made by our high-priced labor fills the employers of foreign pauper labor with dismay. We have the markets of nearly all the world and the cry of the American invasion echoes from shore to shore. If cheap foreign goods could drive our goods out of our home markets, how is it that our high-priced goods are driving those same cheap foreign goods out of their own home markets?

 

 How can we need a tariff to protect our own home markets from the foreigner when we are able to drive him from his own?

 

 If we can undersell the foreigner abroad, how can he undersell us at home?

 

 Why should we compel ourselves to pay a steady tribute of double or triple prices while the foreign consumer gets the benefit of the competition of the world?

 

 These questions should be answered by the eloquent gentlemen on the other side.

 

 Perhaps it will be said that our great manufacturers, etc., do not now need protection, but that it is the laboring man, the poor laboring man, for whose benefit the tariff is to be maintained. It is the common claim that we must place a tariff on imports which will make their cost of production as great as though they had been produced by the more highly paid labor of the United States.

 

 It is here assumed that low wages mean low cost of production. If this be true, we must need protection against Mexico, India and China, but everyone knows that it is against Canada, England, and the highest wage countries of Europe, that our tariffs are aimed. Our farm laborers get twice the wages paid in Europe, but American grain undersells European grain all over the world. Our wages are the highest in the world and our manufactured goods are invading every low-wage country in the world. Nothing is plainer than that low wages are not an advantage in production. If this were true, why was the slave-holding South most backward in development?

 

 Why do not Mexico, China, and Japan, flood the world with the products of their cheap labor? The obvious truth is that the countries of highest wages produce to the best advantage because their workmen have the highest standard of living, the most intelligence, spirit, and ability, and make and use the most inventions and discoveries. We have nothing to fear from the enterprise and skill of pauper labor. These paupers themselves, in the highly protected countries of Europe, are taught to fear the high-wage products of our own country. If our workingmen have anything to fear, it is not the products of cheap labor, it is the cheap laborer himself. What can be said in defense of the kind of protection to labor that makes goods dear and labor cheap — that keeps out the goods of cheap labor but admits free of duty the cheap laborer himself. Laboring men have not goods to sell. To them cheap goods is a blessing; cheap labor is a curse. If it is labor we wish to protect, better might we tax exports to make goods abundant and cheap, and put a tariff on immigrants to make labor scarce. Our protection to labor is a delusion and a sham. Not only is the American workman brought into direct competition for work against the imported pauper labor, but by forcing production into unnatural and less profitable lines our tariff keeps wages down by preventing the largest returns for work, and then the laborer is taxed to maintain this kind of protection — taxed at the rate of one-hundred dollars per year if his wages are one-thousand dollars, and this on the authority of the eminent Carroll D. Wright.

 

     Honorable Judges, the abolition of our protective tariff taxation would bring a multitude of advantages, and nothing but advantages.

 

     Under the present arrangement we are carrying on many industries which are only tariff sucklings and could not exist without it. With the abolition of protection, all the labor and capital so employed would be freed to enter more advantageous fields in which foreign goods cannot compete, and where an enormous surplus could be produced to be exported in payment for the foreign goods now excluded from our shores.

     With protection abolished our industries would be relieved from the burden of uncertainties and sudden fluctuations of an artificial condition, from the expense of a permanent lobby, attorneys and agents, bribes, moieties, etc., and above all, from the burden of high prices that must now be paid for nearly everything that enters as raw material into our manufactured goods. Idle and dead-rented mills would start up, our great mineral and other resources would be drawn into use, and an enormously increased production in the lines of greatest advantage would give an ample surplus with which to pay for imports in such lines as we cannot produce so well. We would not them produce goods which it were more economical to buy but would freely exchange abroad our easiest and most natural productions for the cheapest and most desirable goods to be obtained.

 

     This sounder policy would increase our foreign trade by enabling desirable goods to be returned in exchange for our exports. It would prevent our trusts from adding the amount of the tariff or more to the prices of everything they control. This would cheapen all our goods and thereby increase the effective demand for them and for the labor that produces them, thus raising wages, and this would still further increase the home demand, and give us a prosperity of high-priced labor and low-priced goods.

 

[May end here.]

 

     Ladies and gentlemen, free trade is no bugbear. Trade is a   labor-saving invention. It creates wealth by so moving and changing things as to add to their value. All the forces of civilization impel men to the fullest and freest commercial relations and impel them with a power which as individuals they cannot and will not voluntarily resist. Our present tariff policy cannot long endure. It is not in the nature of things that such wrongs should last.

 

     Free trade is no siren, and our young giant and hero of a nation is no Ulysses, but our legislative crew have bound us like Ulysses to the mast, and now are loudly warning us against the siren Trade.

 

     Our great ship of trade has sailed a majestic course, but she has gathered barnacles of duties, bounties and drawbacks till her course is threatened and her speed is stayed.

 

     Long-time protectionists are restive under the fruits of their own mistaken policy. Even President McKinley urged that we could not forever export yet hold our country closed against goods in return. Our protective tariff is bound to be repealed, and dissentions among its friends have already marked its doom.

 

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