THE CHICAGO
Founded in 1898
Volume xxvii	CHICAGO, SEPTEMBER 4, 1909	Number io
Horace White’s Open Letter on the Tariff
navigation, mining, and fisheries were born, like Minerva, full grown. There was nothing infantile in the shearing of sheep, and it required no long training to tend those patient animals and wash them once a year. Yet the wool growers presently perceived the fallacy of the infant industry argument—or, rather, they saw an opportunity to grab something for themselves, and they seized it. If there was a real need for a protective duty on woolen cloth sixty years ago, or ever (which I take leave to doubt), then the demand of the wool growers for a duty on the raw material thereof, the production of which was not claimed to be an infant industury, was sheer blackmail. It was. obtained under a threat and without a blush, and has been continued to this day, with one or two brief intervals. What is true of wool is true of all other raw materials, including coal, lumber, ores, and all agricultural and horticultural products. The duties on those things were and still are levied in defiance and flat contradiction of the basic argument for protection. When men in congress talk about a fair deal between raw material and finished product they unconsciously demolish the whole argument on. which protectionism rests, and proclaim that the system is a game of grab.
The infant industry argument was, however, publicly renounced, by Henry Clay more than half a century ago as no. longer applicable to American conditions, and its obsequies, too long deferred, were pronounced by Andrew Carnegie before the committee of ways and means last April. I remark, in passing, that if there was good reason for repealing the duty on hides, the reasons for repealing those on wool are three or four times as strong, whether we look at the percentage of the tax or at the needs of the consumers. The duty on hides, which was so laboriously cast off, was 15 per cent. That on wool was and remains upward of 50 per cent. Hides are the raw materials of footwear ; wool that of whole body wear.
The infant industry argument has become a laughing stock. The spectacle of our steel corporation competing with foreigners and underselling them in their own markets, charging higher prices at home than .abroad, turning water into gold, half a billion at one job (which casts the miracle of Cana of Galilee far into the shade)—such infants are too much for the ris-ibles of the present generation.
Next in order came the argument that low tariffs always bring on financial panics and hard times, and this was widely believed until the panic of 1907 came. Nobody could deny that we were then enjoying the highest tariff within the memory of men still living. There was a sudden hush of the talk about commercial crises being the invariable consequence of low tariffs. And then there was a general opening of ears to the real facts about panics in the past; for example, that of 1873, which likewise came in a high tariff epoch, and that of 1893, which came during the operation of the McKinley tariff, sixteen months before the Wilson tariff took effect, if the latter could be called a low tariff. President Cleveland did not consider it such.
There was a panic in 1884 of sufficient severity to cause the New York banks to suspend cash payments for a short time. This panic came under the high tariff of 1883. I call this a high tariff because the tariff commission of 1882, appointed by President Arthur and consisting of the most eminent teachers of the protectionist faith,
The former Editor of the N. Y. Evenin¿ Post ¿ives his estimate of the importance of the Aldrich production. Bankers will welcome this reappearance of
the famous retired financial editor
with Aldrich as long as there is a stick of timber uncut, platform or no platform.
Notwithstanding the small immediate result gained by Mr. Taft with his refractory material, the attempt itself is the most significant fact in our politics since the downfall of slavery. We have now, for the first time, a republican president who has dared to grapple with the power intrenched behind the tariff. President Roosevelt shrank from that problem. More courage was required than to attack the Northern Securities Company or the Standard Oil Company. Public opinion had been rising and surging against corporate monopolies for more than a decade. It had compelled congress to pass the Sherman anti-trust act, and it had emboldened Senator Sherman himself to say in 1890 that every tariff duty that protected a trust ought to be repealed. Therefore it did not require courage on the part of President Roosevelt to put the machinery of the anti-trust law in motion. While giving him all honor for attacking the trusts, I observe that he never attacked them tariffwise, but rather discouraged others from doing so. By holding the small producer up to public sympathy he actually shielded the giants.
Next in importance to the stand taken by President Taft is the attitude of the republican insurgents of the Middle West. These men represent the more robust and self-reliant wing of the party. They have the ardor of youth, the confidence of a righteous cause, and the ability to defend it, and they believe rightly that the future belongs to them. If the republican party is to live it cannot exist without them. If it is to die they will be at the head of whatever takes its place. The truth is that both parties are split on the tariff question, and the democratic party the worse of the two, because it is split disgracefully. Tariff reform is possible now because of this desirable duplicate rift. Herculean efforts will be made to bring together the disjecta membra on both sides, but patching will no longer avail. The interests which clashed in the recent session are too antagonistic to admit of a fresh compromise. Moreover, the light thrown upon dark places in the recent debate will not be extinguished.
The fact that tariff making is a game of private grab has been shown every time that a protective tariff bill has been passed in this country or in any other, but on no former occasion, perhaps, has it been so brazenly proclaimed. All pretenses to the contrary have been cast aside. Formerly the doctrine of protection was sustained by arguments which were shifted like lantern slides from time to time, but now they seem to have been abandoned altogether. At first the argument was that the nation ought to develop its own resources, so that it need not be dependent upon other nations in time of war. This was the argument in Hamilton’s time, and it had some force then. Hamilton thought that duties of S to to per cent would be justified for this purpose.
Next came the infant industry argument. This was in Henry Clay’s time. It applied only to manufactures, because agriculture, forestry,
It was a conjecture of Plato that perhaps the Ruler of the Universe could not have made a better world than ours on account of the refractoriness of his materials. However that might have been, it is certain that President Taft’s failure to get the kind of tariff revision that he intended was due to the toughness of the material that he had to work with. It was generally understood that he set out for free hides, lumber, coal, and iron ore, and a corresponding reduction in other necessaries. Of the things here enumerated he got one out of four, and of the other necessaries the result was a small net advance over the Dingley rates instead of a reduction.
Although the country was lately echoing with the notes of President Roosevelt’s conference on the conservation of the national resources, the whole power of the executive could not obtain from congress the free admission of one pine board, one ounce of paper or paper pulp, one ton of coal, or of any kind of ore. To a person listening to the speeches made by the governors and scientists at the conference or reading the gigantic volume which tells of their doings and sayings, the action of congress on the practical question of conserving is grotesque in the extreme. The conference told us that our standing timber is rapidly vanishing, yet congress resisted with something like frenzy any change in the tariff which might increase our supply from abroad. It voted to “protect” wood chopping by hastening the total disappearance of our forests. Yet this was not so illogical as its action on coal and iron ore. Timber can be replaced. Every tree cut down leaves space for a new one, but no art or industry can reproduce coal or iron. Once gone they are gone forever.
Are we to infer that either congress or the conference was composed chiefly of fools? Hardly. There is another possible explanation of the contrariety between the two bodies. The conference came together to express the opinions of its members. The congress assembled for quite another purpose. It came together, as it always does, and as all congresses and parliaments do, in order to get itself re-elected. If the men who are exploiting our vanishing national resources and their allies, the protected manufacturers, are more influential than any other class in controlling nominations and elections, the congressmen will vote for their interests, however contrary they may be to the public interests, and President Taft will not be able to move them the other way. The hardness of the material that he has to contend against lies not in Aldrich or his following in the senate, but in the people back of them. Mr. Aldrich was placed in the senate a quarter of a century or more ago by the Rhode Island manufacturers (chiefly of cotton), to look after their tariff interests. If he had not done so his first term would have been his last, and if he should fail to do so now his present term would be his last. If you ask him why he casts his vote contrary to that of the wise men who came to the Roosevelt conference he will tell you (if he is entirely frank) that the wise governors and scientists did not elect him senator and that they cannot re-elect him. The southern senators who helped to defeat free lumber are explainable the same way. It is idle to point out to them that they are voting squarely against their own party platform. If the lumber men are strong enough to control the legislatures of their states, and if other people take no interest in the tariff question, those senators will vote