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of selling us their goods cheap, should give them to us. What would be the consequence? Why, our utter ruin, for if it is injurious to buy cheap, of course it would be utter ruin to get for nothing. Such is the logical conclusion to which this argument necessarily tends—a consequence so absurd I shall not dwell longer upon it.
Now for the third. In order that these manufacturers may succeed, they require you to make the consumers of the country purchase from them at a price enhanced to the extent of the duty on the foreign article. What justice is there in that? Why is it that one portion of the people should be compelled to buy from another portion, and a smaller portion, at a higher price than they could buy elsewhere? Why should the great body of the American people be required to pay in the enhanced price an indirect tax to the manufacturers ? justice in it? If you ask what are the profits of the manufacturers, the reply is, “they do not make more than six or seven per cent.” After the honorable gentleman from Rhode Island [Mr. Durfee] made his speech two weeks ago upon the subject of free wool I asked him what were the profits of the woolen manufacturers ? He said that the woolen manufacturers were losing money, but that the cotton manufacturers said they were making six per cent. What is the result, then! Why, the great mass of the people have been made poorer to assist these men in making average profits. As the indirect tribute levied from the consumers by the manufacturers only raises their profits to the average profits of the country, it follows, then, that this indirect tribute is a total loss to the productive energies of the country, and the effect is the same thing to the country as if, under a free trade policy, this amount had been thrown into the sea.
I have thus gone through with the three propositions involved in the demand for protection; as they are all fallacies, it follows that the system resting upon them is also a fallacy.
I look to free trade and direct taxation as our ultimate and inevitable policy. By taking one approximating step afterwards we will be in a condition to attain the great point of free trade without any sudden convulsion.
If I could have modified the tariff exactly to my ideas I should have put the duties on articles of necessity below twenty per cent., at the lowest possible revenue standard, and luxuries I should have put at thirty per cent. In this way I would have sought to carry out, as far as possible, under an indirect system of taxation, the idea of relieving the industry of the country from taxation, and of throwing it upon property.
There is one further modification I should be willing to make in the tariff if it were reduced in good faith strictly to the revenue standard—that is, to put wool and other raw material in the free list. The effect of taxing the raw materials is that the consumer is compelled to refund the tax with interest to the manufacturer who has advanced it.
I am through; it is for the committee to say what shall be done.
Those representing the manufacturers would, I think, act wisely to consent to a reduction of duties, for the longer reduction is deferred the larger will be the surplus, and the more sweeping the reform. Besides revenue duties with the raw material free put manufactures on as good a basis as they could desire, and this point could, I think, be carried. Further, the manufacturers would find an increased demand arising from the general prosperity of the country following upon low duties. Besides, too, our manufacturers should look to the great and valuable markets of the world where gold is to be had for the gathering
To those representing the agricultural interests I would ask what possible motive can you have to maintain the protective policy, as your interest clearly demands freedom of exchanges, and the markets of the world?
To those representing commerce I would ask : what is commerce but exchanges ? To reduce duties and free exchanges is therefore to bid commerce “live and move and have its being.” You gentlemen who represent the imperial city of New York should be clamorous on this subject. New York City is commerce personified. Free exchanges, and you magnify and aggrandize New York beyond the power of language to describe.
To the Democratic party I would appeal to emblazon the great ideas of free trade and low taxes on their historical banner. Cease to vex the ear of the country with infinite repetitions of the occult meanings of past measures. Seize a living, vital, actual, practical truth, and enforce it as your creed. “Free trade, anti-monopoly, equality" are the watch words for you. They appeal to the self-interest of every individual, and they fill the imagination with magnificent ideas of the future grandeur of the Republic.
Take up the great ideas of free trade, for under that sign you shall surely conquer.
HORIZONTAL REDUCTION VS. DISCRIMINATING PROTECTIVE
SENATE, FEBRUARY 26, 1857 When the bill came to the Senate Robert M. T. Hunter (Va.], on February 26, moved as a substitute a general horizontal reduction of duties on the ad valorem principle.
If it be true, and I hold it to be so, that there is pressing necessity for reducing the revenue, and that it can be done with little injury even to those interests that are called the protected interests, the question arises, in what way is it to be done! It is obvious that, in the short period of the session which is left to us, there is no mode in which it can be effected except to take some established idea in the public mind and modify that. It seems by general consent to have been thought, and in that I concur, that the only plan of molding a measure which may pass would be to take the tariff of 1846 and modify its schedules. It is our duty so to proceed in modifying it as to protect from sudden injury the interests which have grown up under it.
The proper system to which we should endeavor to come is a system of duties laid for revenue alone, and laid according to the true principles of taxation. If we desired to raise all the money that the imports would furnish according to this system, we should find that duty which would make each article yield the greatest revenue. Having ascertained those dutiesif we did not desire to obtain all that it furnished—we should modify the duties ratably, so as to give us what we wanted, but at the same time we do this we must do it according to the true principles of taxation, which require that we should lay the tax, not on production, but on consumption. That is a principle adopted in all countries in which there is a wise system of legislation; and it is adopted because, if you lay the tax upon production, the people have to pay a great deal more than ever goes into the treasury; and because, when you lay it in that mode, you run the danger of disturbing the equilibrium of the great industrial pursuits of the country, and turning some which are naturally profitable out of their usual and accustomed channels; whereas, when you lay the duty on the article when ready for consumption, the Government gets all the duty minus the expenses of collection.
It follows, as a result of that principle, that, in regard to all those articles for which there would be no demand except such as was made by the manufacturers themselves, there should be no duty, and those should be free. Upon all articles on which you lay a duty for revenue it should be laid only for revenue purposes. Articles for which there is no demand except that which the manufacturers themselves create should be free, because we should thus cheapen the price to the consumer, and because, too, it would enable us to avoid the risk of disturbing, through our revenue system, the natural equilibrium of the various branches of productive industry.
But in proceeding to that great end I desire to go gradually. I desire to act upon a principle which is just alike to the consumer and the manufacturer; which, in short, enables the consumer to buy more cheaply both at home and abroad, because it not only diminishes the duty upon imports, but also lessens the cost of production to the domestic manufacturer. To diminish the cost of production by reducing taxation is, after all, the most legitimate protection which a Government can give to its home industry. While, then, I reduce the duties on those articles which the mass consume, I will reduce pari passu the duties on those chemicals, dyestuffs, etc., which the manufacturer uses, so that by proceeding on this process of reduction, when we come to the point where we have none but revenue duties on those articles consumed by the masses, we shall have the raw material, for which there is no demand save that produced by the manufacturer himself, free. Widely different is this in principle from a free list which includes articles of general consumption and fit subjects for taxation, for to make them free is to throw the whole weight of taxation upon those articles which come into competition with domestic manufactures, and to prevent those duties from ever falling to the revenue standard.
The modification which I offer will be an improvement on the act of 1846. I propose to reduce the one hundred per cent. schedule to a thirty per cent.; to reduce the forty per cent., the thirty per cent., the twenty-five per cent., and the twenty per cent. schedules one-fourth, or nearly one-fourth-that is to say, the forty per cent. to thirty, the thirty to twenty-three, the twenty-five to nineteen, and the twenty to fifteen. The lower schedules which are comparatively unimportant I propose to reduce one-fifth.
But it was not my purpose, nor do I think it would be right, to give to the manufacturer all that he desires to have free, while you tax the consumer upon a long list of articles with duties above the revenue standard. I think the two ought to go together, and I believe the substitute which I offer will accomplish that in a great degree. But how is it to operate on the great protected interests of the country? All those which have been heretofore considered as among the protected interests are in the twenty-three per cent. schedule. There you find iron, sugar, hemp, the manufactures of wool, and the finer manufactures of cotton.
Now, I ask which of these interests is it that need be afraid of foreign competition with such a protection as this? Surely not the wool interest. The woolen manufacturer gets his dyestuffs either free or at a reduced rate of duty. That is worth something to him, so that he stands in a better position than he did under the tariff of 1846. Who else, then, is there to whom I shall appeal? Is it the grower of the raw material of wool who is reduced from thirty to eight per cent. ? It is manifest that if the wool-grower demands protection he admits that he cannot sell abroad. If he cannot sell abroad he cannot sell at home unless there be a home market—that is, unless the manufacturers of wool can succeed. He depends on them for that market, where he has advantages in supplying it. Now, it is known that with the thirty per cent. on the raw material the finer broadcloth factories have gone down, and that this rate of duty on the raw material has crippled and restrained the progress of the woolen manufacturer. There is reason to believe that, by diminishing this duty and allowing the manufactures to go on, you will produce a still greater demand for domestic wool. The reason is that, in order to use for certain purposes the qualities of wool which we mostly produce, we have to import finer wool to mix with them. We find it profitable, too, to import the wools of South America, which enable our own to receive the dyes better than they would without the admixture. But it is obvious that the wools which we raise for the most part stand in no danger of foreign competition. Thus the raiser of raw wool, so far from being injured, will be benefited by the change I propose.
Sir, I believe that the effect of such a change as that which I propose, a general reduction of something like one-fourth in the taxes laid on the people, will be to remove the heavy weight which now lies on the spring of productive industry, and to send forward all our great industrial pursuits as with a bound. The navigator will launch more ships on the ocean, the cotton planter will put out a larger breadth of his crop, the