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Mr. Chairman, it is our duty to legislate for all, and not for a part; to encourage all if we can, and to injure none if we can avoid it. Such a course will develop every industry of the country, do justice to all its people, and demonstrate to the world the wisdom and beneficence of the free institutions under which we live. We have now an opportunity to enter upon such a course, and we ought not to let it pass away from us. [Great applause.)

On March 30, Abram S. Hewitt [N. Y.] opposed the bill.

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I take my first proposition, directly antagonizing the gentleman from Iowa. I assert that legislation cannot create value nor can it determine the rate of wages. The issue is fairly made up. There is no source of wealth in any country except that which is derived from the soil by the application of labor, machinery, and capital.

It is not possible by any human contrivance, by any amount of abstract thought, by any schemes of legislation, to add to the natural resources of any country. Whatever there may be is in the soil, and in the rain and sunshine that fructify it. Capital can only support the labor which is necessary to bring about the annual harvest, and machinery can only be used to economize the amount of labor bestowed. With labor and skill sufficient for the cultivation of the soil, the economy of production will be proportioned to the amount of capital and machinery employed in its cultivation. There is no royal road to wealththere is no patent process by which the resources of nature can be augmented. Can a man by taking thought add a cubit to

his stature?" In the absence of any legislation the work of production will proceed in a natural channel, and all that legislation can by any possibility do will be to divert labor and capital from the direction which they would have taken under natural laws. I feel it necessary to make this statement, because many persons who have not given much reflection to this subject seem to think that there is some potency in legislation which can add value to the forces of nature. This fallacy underlies a great many of the propositions which are made in regard to money as well as industry. It is the key to the fiatmoney delusion, and it is the explanation of the mistake which is made by those who advocate protection for the sake of protection. When it is once realized that value cannot be created by legislative action, and is the offspring only of hard and

honest labor aided by actual capital—that is, by the possession of accumulated wealth either in the form of money, structures, materials, or machinery—most of the difficulties in the way of intelligent legislation and of placing our industry upon a secure basis will disappear.

But, if legislation cannot create value, it can prevent the growth of wealth by misdirecting industry into unprofitable channels, and by depriving us of the profit which is realized when we exchange the products of our labor, properly applied, for commodities which can be produced in other countries with less expenditure of labor than is necessary to produce these commodities at home. In other words the profits of legitimate commerce may be altogether or partially destroyed by artificial obstructions to the free natural interchange of commodities. These obstructions constitute a deduction from the amount which our producers would otherwise receive for their labor and skill, and are therefore to be avoided, and not created by the action of government.

From this simple statement it will be apparent that I do not believe in the efficacy of taxation in any form as an aid to the development of industry. If we could dispense with taxation altogether it must be evident that the producers of this country would have more to spend and the consumers would get more for the money which they have to expend. The only possible effect of taxes imposed upon foreign commodities must be to alter the direction or distribution of human effort. To understand the bearing of this proposition we must go back to the origin of the Government. In order to secure sufficient revenue, duties were placed upon imports, and those imports were selected upon which the duty could be most readily collected. The duty imposed added to the price of the article, and hence, as this article was raised artificially in price, labor directed to its production would be better rewarded than labor devoted to the production of the untaxed article—assuming always that the labor and capital in each case were not misapplied. In such cases the revenue duty necessarily becomes protective, the labor devoted to the production of the protected article being thus better paid. Thus there is a diversion from the unprotected channels of business into the protected channels, until an equilibrium is produced between the wages paid in both divisions of production.

The exchanges made between these divisions very soon adjust themselves upon a common standard of wages, so that labor and capital are equally rewarded, whether employed in

the protected or the unprotected branches of business. This proposition is true of a country which has no surplus products to export, and in such a country the tax levied upon foreign imports distributes itself equally among the whole mass of the consumers. But whenever there is a great surplus of natural products to be exported the price of these products is not made at home, but in the foreign markets where they are sold, and the wages which can be paid to the laborer engaged in the production of these articles are therefore and thenceforth fixed and determined by what they produce in money, not at home, but in the foreign markets where they are sold. When the time comes that these products constitute the great bulk of the industry of the country, then it is clear that the wages which can be paid for labor are fixed abroad, and not at home; in other words, by free trade and not by protection.

Wages in this country are therefore not regulated by the tariff, because whatever wages can be earned by men engaged in the production of agricultural products, the price of which is fixed abroad, must be the rate of wages which will be paid substantially in every other branch of business. If other branches pay better, labor will quit agriculture and take to manufacture; and, vice versa, if agriculture pays better, manufactures will decline and agriculture will progress.

Wages, like water, seek a level. Thus we dispose of the first great fallacy of the protective system, which declares that a high tariff produces high wages. The wages of labor at any given time depend upon demand and supply. They will be high when our products are all wanted; they will be low when there is a surplus which the world will not take. Our great products are agriculture. In years of famine the world will take all we have to spare; in years of plenty there will be a surplus for which there is no foreign outlet. And, in the absence of markets for our manufactured products, we are reduced to the unnatural position of basing our prosperity upon the misfortunes of mankind; when in fact the happiness and comfort of the human race ought to be proportioned to the abundance and not the scarcity of the necessities of life.

Now, by our protective system interests of a vast and complicated nature have been created, intertwining and interlacing with each other, so that any injury to one immediately reacts upon all the others. Reforms must therefore be so made as not to cripple or interfere with any considerable existing interest. The object must be not to cripple but rather to remove obstructions which interfere with the natural and healthy growth of business. We must proceed slowly so as not to interfero with the occupations of people, and not to dislocate industry to such an extent that men are compelled to seek new occupations by a sudden stoppage of those in which they are engaged. This has happened in Germany, where the new revenue system of a highly protective nature has positively destroyed many branches of business and reduced whole towns to a condition of destitution.

But, on the other hand, if reforms are not introduced we come upon another condition of affairs which is even worse than the one which we have described and desire to avoid. That condition of affairs springs from what is mistaken overproduction—that is, from the production of articles which the world wants but from whose markets we are excluded by an unnatural revenue system, shutting us up as if we were bounded by an impassable stone wall. This is the condition in which we shall find ourselves whenever by good harvests abroad we shall no longer have a foreign market for the surplus products of our farms and our plantations. In the ordinary course of nature this condition cannot be far distant, and it is for that reason that I fear the delay which will be inevitable if action upon the tariff is to be postponed until we get the report of any commission, no matter how constituted.

Although the French commissions of inquiry on the tariff simply delayed legislation for five years, and then bore no valuable fruits, against commissions I have no prejudice. In the English system of jurisprudence they do most excellent work, and they can be introduced with great advantage into many branches of our own administration, where we are suffering from the lack of a comprehensive knowledge of the facts necessary to secure reform. But now the time for a commission has passed by. The country cannot afford to wait for the results of its investigations.

This brings me to my second proposition, which is, that access to the open markets of the world for our manufactured products is essential to the continuance of our prosperity.

If we could consume our surplus food in the production of manufactured articles which could find an outlet in the open markets of the world, which we could sell in competition with other nations, who are not impeded by charges upon raw materials, we could at least, if no longer able to draw into our coffers the accumulations of gold and silver with which our industry has been fructified—we could at least find occupation for our working population, and gradually establish our indus


tries upon so broad a basis that failure or superabundance of a single harvest would not affect their general stability. It is true that we cannot hope to provide remedial measures which will produce immediate results, but any improvement in the conditions for production by which our markets may be widened will moderate the impending calamity and shorten its duration.

In reforming the tariff I would select first the raw materials of industry and waste products as proper subjects to be transferred to the free list. This change will lead at once to the extension of many branches of business and the establishment of many new avenues for labor. No injury will be done to any existing interest, because on these raw products the freight is always sufficient to compensate for the difference of the rate of wages prevailing in this country and in the countries from which these products are imported. Many of these raw materials are needed for mixing with our own materials, and indeed many branches of industry cannot be successfully conducted without such admixture. Every pound of foreign material thus imported will enable an additional quantity of our own materials to be used, and in this way the market for these materials and the area for the employment of labor will be greatly and steadily enlarged. The abolition of the duty on raw materials will then enable us to make a corresponding reduction in the duties imposed on the manufactured products of which they are a component part. This reduction of duty on the manufactured product will lead to lower prices, which in their turn will produce a larger consumption, whereby the area of employment will again be enlarged. Notably in this class of reduction will be placed the manufactures of cotton, wool, iron, steel, and many chemical products. This will relieve us from the necessity for raising duties in any case, as was proposed in what is known as the McKinley bill. In the rearrangement of the tariff upon this basis, I shall be able to produce the testimony of the most intelligent manufacturers engaged in these great branches of industry that the result will be beneficial and not injurious.

The principles I have laid down can be applied without the aid of any commission. The information is already in the possession of the Committee on Ways and Means, or within the knowledge of members of this House. If the committee is disinclined to undertake the task of applying these principles, then let the Representatives in Congress assembled undertake it and constitute special committees for the work. There is no leading branch of business which is not represented in this

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