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who favors protecting interests here which are not "legitimate." That is, nobody is for fostering industries by legislation whose products, owing to the permanent conditions under which they must ever be produced here, cannot be produced without much greater expenditure of human labor than is required in other countries. For illustration, nobody is for what was rendered famous by the epigram of an English statesman, "Making protected wine out of grapes raised in hothouses in Scotland."

Third. So, on the other hand, no Republican fails to insist that any law which really does have the effect of here creating or augmenting a great and legitimate industry does by necessity bring to every member of the nation other benefits than the revenues it may yield to our treasury, benefits precisely as real and compensatory, as clearly within the cognizance of just legislation, and just as much to be counted in estimating the wisdom of a revenue law or tariff law as is the item of what revenue it gives the treasury.

Among these benefits claimed for a law which really has this effect of creating or augmenting in our country a great industry or industries may be named these: that by adding a home to a foreign competition you secure an ultimate reduction of prices; that the presence in our country of these industries. creates a home market for some of the productions of the consuming class, which, owing to their weight, or perishable qualities, or the state or distance of transportation, or the state of foreign custom laws, or the like, he could get no market for abroad. Or the benefit the consumer gets may be in the fact that his lands are enhanced, or his business or profession or trade, by having this country built or filled up with these industries.

Every civilized government in the world, every practical and eminent ruler in our own history, every modern code of commercial law enforced by enlightened states, unite with our own entire and wondrous history in pronouncing it the first duty of government to "protect" as well the industries as the lives and properties of their people.

CHAPTER X

A TARIFF FOR REVENUE ONLY

[PROPOSED WOOD BILL OF 1878]

Fernando Wood [N. Y.] Introduces a Bill in the House for a Revision (Downward) of the Tariff-Debate: in Favor, Mr. Wood, John R. Tucker [Va.]; Opposed, William McKinley [O.], William D. Kelley [Pa.], Gen. James A. Garfield [O.]-Bill Fails to Come to a VoteGeneral Winfield S. Hancock on the Tariff.

ON

N March 26, 1878, Fernando Wood [N. Y.] reported in the House, from the Committee on Ways and Means, a bill reducing customs duties and reforming the entire system of the tariff. It came up for discussion on April 9.

REFORM AND REDUCTION OF THE TARIFF

HOUSE OF REPRESENTATIVES, APRIL 9-JUNE 4, 1878

MR. WOOD. It will be remembered that taxation simply consists in imposing exactions for the support of the Government. It was not designed that any other considerations should enter into the discharge of this trust. The burden, whether great or small, was to be borne by the whole people upon principles of equity and equality.

The United States has never had a permanently established system by which to procure revenue and to regulate its commerce with other nations. Nor is this singular in view of the fact that we have been undergoing remarkable changes since our national birth. Within the century of our existence the policy that was desirable at one time would have been very unfortunate at another, and at no time have we been so circumstanced until now that we could adopt political economies purely American. That period has arrived. For the first fourth of our century of life we were emerging from a colonial chaotic.

condition, struggling to cement fraternity among ourselves and to furnish mutual protection against others. The next quarter of the century was devoted to the ascertainment of our resources, and an assertion of our independence upon the seas. The third quarter was distinguished by the expansion of our territory, the acquisition of mineral resources of incalculable value, and a gradual growth of the nation toward becoming a great maritime power. While the last fourth of the century has marked the most extraordinary epoch in our history-distinguished for its extinction of slavery-the greatest civil war of any time, and its consequent demoralizing and stimulating effects upon values, and the vicious legislation which of necessity followed. The nation, in consequence, lies weakened and prostrated, and sick almost unto death.

We are now brought face to face with the solemn consideration of the present, and the great duties of the future. Doubtless those who shall write the history of this century hereafter will not fail to discover that in this latter period to which I have referred, comprehending the present time, could be traced the germ of the subsequent national grandeur, wealth, and power, which I now see clearly are, with wisdom in our legislation, susceptible of accomplishment. There is now no pending question which is within itself of sufficient importance to the people to make it worthy of a moment's consideration as compared with that of establishing a policy of international commercial intercourse, connected with a policy of taxation, which shall be wise in its inception, permanent in its character, less onerous in its exactions, and have for its prime objects a fuller development of our material resources, and a more profitable disposition of the fruits of labor, the results of enterprise, and the security and profits of capital.

These objects are to be secured by the application of principles in legislation which shall take from labor and capital the minimum of taxation with a maximum of advantage in return, by economy in administration, and the fullest possible development of the resources of the country, from which both production and commerce shall derive an equal, honest, and legitimate advantage in the prosecution of their industries.

The fundamental basis upon which our legislation to promote these objects should rest is that production and commerce are twin sisters, and should go hand in hand-that one is indispensable to the other. There can be no antagonism between them. While it may be true that the present cost of internal transit in this country has imposed and does impose an undue

burden upon production, arising altogether from a monopoly of the power of transmission, yet this will not be the case either upon the land or the ocean if in our new departure we shall adopt enlightened principles.

The levying the duties upon foreign goods and direct taxes upon domestic goods and interests may be considered not only as questions of revenue, but also as susceptible of being made the methods by which all interests can be subserved and the national resources more fully utilized. If the authority to impose taxes can be used to advantage one class, is it not well for us to consider whether it cannot be used as well for all? not only to promote the home industries, but to advance the prosperity of all sections and every enterprise, whether commercial, agricultural, mechanical, or manufacturing.

While unquestionably the power to tax if confined to its legitimate object is restricted to that duty alone, yet if it can be made an instrument so as to combine other objects not inconsistent with just and equal taxation, by which the whole nation, as well the people as individuals, shall be alike advantaged, then is it not our duty to adopt it? To this end we should connect with our system a more enlarged and comprehensive scheme than that which now exists.

With a larger seaboard than any other nation, and with material resources in excess of our capacity of consumption, we must encourage and promote the adoption of such relations with other nations as will open up the markets of the world, and make the whole universe contribute to our prosperity.

But the further development of our material resources will avail us little if commerce does not stand by to utilize the results. The large surplus yield of our agriculture would be of trifling value if it could not be carried to other consumers than those who produce it. The same principle applies to manufactures and minerals. We should therefore adopt a policy which shall create facilities purely American for the transmission of the excess over our own consumption to foreign buyers and consumers. Nor will this be the only advantage of such a policy. It will lead to a larger interchange of commodities between other nations and ourselves, in which we will be the gainers. We shall take from them the articles which our soil or climate will not enable us to produce, and return them back in manufactured form, thus deriving profit from our superior capacity, energy, or ingenuity.

Before proceeding to consider how best to avail ourselves of these advantages by legislation, it may be well to look at the

laws as they now exist and to see in what regard the present tariff operates as an obstruction to the enlargement of our foreign trade. I approach the subject with a full appreciation of the difficulties attending any change, however desirable it might be.

The laws as they now exist are mainly the creation of the last fifteen years. Within the period from 1861 to 1876 were passed one hundred and eight laws relating to the tariff and the collection of duties. Nearly every one of these acts was the creation of some special domestic interest or to subserve some partisan purpose.

The evils of the present tariff laws are so outrageous that it is difficult to speak of them with patience. They are the results of a series of assaults through legislation upon the pockets and labor of the people. They are immoral in theory, utterly indefensible in practice, and without any merits upon which their most ingenious and well-paid beneficiaries can maintain their defence. And yet we do not propose to deal with them as their demerits deserve. I recognize an implied moral right to a little longer continuation of the favor which they afford to the manufacturing interests. The bill reported affects them, so far as the rates of duties are concerned, but little. Its reductions are trifling as compared to what they should be, and in my opinion they could well afford to bear. If I had the power to commence de novo I should reduce the duties 50 per cent. instead of less than 15 per cent. upon an average, as now proposed.

The committee has not undertaken to reform all the abuses of the present tariff. Though fully conscious of the necessity of effecting many radical changes sooner or later, we were content with a simplification of methods of assessing the duties, changing the phraseology, so as to avoid ambiguity and doubt as to the proper duty to be levied, a large curtailment in the number of articles to be assessed for duty, and ingrafting upon the law important provisions looking to a more liberal commercial intercourse with foreign nations.

The changes proposed are designed to be the foundation for a permanent measure, comprehending new principles and a lopping off of the complications and contradictions now existing in the present laws.

The bill reported has but one list so called, and that is the dutiable one. It has no compound rates, the duties being either ad valorem or specific, and the latter as far as practicable. It has no free list as such; all articles not enumerated and specifi

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