Vol. XXII.

No. 253

Hereafter Republican platforms should not lay down any dogmatic rule as to the measure of duties.

The true measure will depend upon conditions of production and trade, which vary from time to time, and the duty should be sufficient to allow for them, so as to avoid the necessity of frequent changes. Otherwise industrial stability is impossible. There were two grave errors in the last Republican national platform: (1) Demanding revision and putting it in such a way as to create an impression that reduction was promised, before any testimony had been taken; (2) declaring that the difference between foreign and domestic costs of production should be the measure of duties, with a reasonable profit to the domestic producer in addition.

What has a tariff or the government to do with profits? Law can and should create a general condition, but it cannot and should not guarantee a profit to anybody.

As to costs of production, what particular foreign costs were or are or can be meant? They are one thing in England, another in Italy, another in Japan-all countries which compete with ours.

Moreover, as the Bulletin of the American Iron and Steel Association well says:

The cost of production is not a fixed quantity but a shifting quantity-the cost of producing any given commodity today differing materially from the cost a year or two ago and from what may be the cost a year or two hence. Of how much value therefore would be the cost sheets to be ascertained this year by the President's Tariff Board when the time would come to examine them in connection with another tariff revision? Industrial conditions both at home and abroad might greatly change in the meantime and would be certain to change at home or abroad after the tariff has been revised. Surely Congress must see the absurdity of this cost of production proposition which has been so much harped upon. And, then, what would be the protective rate of duty on a commodity if the cost of production abroad is the same as it is at home? According to the Republican platform and Mr. Taft it would come in free. In all cases, the question of revenue aside, one object of tariff legislation should be the protection of our markets against the unloading of foreign products at cut, or dumping, prices.

We have many times invited the attention of Congress and the public to the discriminating freight rates, both foreign and domestic, in favor of imports. They affect competition equally with differences in costs of production. Unless our duties offset

such favoritism, some of our industries are liable to be crushed.

Now if Congress is to continue the Tariff Board (which is so far from being a board of experts that others have been called in to settle the Canadian controversy and it is not settled yet), it should clearly define its powers-for they are not definite when such able protectionist statesmen as Senators Aldrich and Hale differ about the meaning of the present law-and the whole business of foreign competition, and not merely one feature of it, should be inquired into.

The President will probably see the force of this and enlarge his recommendation accordingly. If this is not done Congress is in danger of creating by inadvertence a Tariff Commission to which it is opposed, and of making it practically useless to the country.

"CHEAP LIVING" IN CANADA.

From the Cleveland Leader.

In the effort to show that the Tariff is the cause of high prices and the increasing cost of living, enemies of the system of Protection, with which the Republican party has been identified for half a century, sometimes point to the difference between this country and Canada in the market values which affect the average household. They have no difficulty in proving that it costs less. to buy family supplies in Windsor, for instance, than it does to purchase the same staples, or their equivalent, in Detroit, half a mile away, across the international boundary.

It is very effective, this use of Canadian towns as object lessons, unless the reader happens to be inquisitive enough to inquire whether

Detroit is more or less prosperous than Windsor, whether more Canadians go to Detroit to earn a living and better their condition than the few Americans who for any purpose take up their residence in Windsor. When these questions are asked the comparison is at once forced upon the broad and conclusive difference. between Canada, with its low prices, and the United States, with its higher figures, as a place to live in with comfort and seek for material welfare.

Then the result is disastrous to the foes of Protection. It is found that the number of Canadians by birth who live in Detroit is twice as great as the entire population of Windsor. It is ascertained that the growth of Detroit in one year is about equal to the whole number of people living in its principal Canadian suburb. It is learned that hardly any Americans move to Canada, except in the new grain belt of the Northwest, where cheap land is the lure, while the older provinces of Canada are suffering heavy losses, all the time, through the migration of their young men and women to this country.

In the light of such facts, how can it be argued that Canadian low prices are an offset to Tariff-made economic conditions in the United States? Of what avail is the lower cost of living if the average family is plainly better off, after paying higher prices, in this country than the same household could be in Canada? The Detroit-Windsor argument is one of the most complete boomerangs which could be imagined, if it is subjected to a little scrutiny instead of being accepted at its surface value.

Probably the most influential organization on the Pacific coast is the Commercial Club of California, composed, as it is, of the principal men in every department of business in that State. And probably the one man most fit to deal with a sectional or a national trade policy, who is in their midst, is the studious and statesmanlike editor of the leading journal of that coast-Mr. John P. Young of the San Francisco Chronicle.

The following address, which he recently delivered to the Club, is longer than the Protectionist would copy on a less important subject or from a less distinguished man. Although Mr. Young, by reason of addressing a local organization in regard to their local interest, necessarily took up sectional considerations, he showed that they harmonize with national policy, hence he rendered a valuable service to the country at large.

There are some merchants and manufacturers on the Atlantic coast particularly in the chief commercial cities, who are prone to underestimate the value of the home market and who are constantly looking abroad for expansion, and are therefore opposed to the protective policy. Mr. Young's address should open their eyes to the fact that our own country is better for them than all other countries, and that so far from a conservation of the home market's preventing foreign trade, it has been

A discussion of the possibilities which would be opened to California by the abandonment of the protective policy of the United States might be made very interesting, but I assume that if we desire to derive practical benefit from the inquiries we are making we must keep that policy constantly in mind, so that we may be able to conform our recommendations to its requirements, and not commit the blunder of framing resolutions which would have no real value because they cannot be complied with.

It is not alone necessary to recognize that protection is the settled policy of the American people. If we wish to satisfactorily determine in which direction our energies should be exerted in order to enlarge our trade with people beyond the borders of our State we must carefully study the conditions produced by the protective tariff.

We take it for granted that the members of this club are not disposed to make a fetish of foreign commerce, and that none of us would be foolish enough to advocate measures which would increase exchanges with the peoples of other countries at the expense of domestic trade. There are some persons who labor under the hallucination that only that trade is valuable which results in the interchange of the products of

alien peoples, but Californians who have seen the Hawaiian islands become an increasing source of profit to the American people by bringing them under the flag of the United States make no such mistake.

Therefore, in order to satisfy ourselves that foreign trade is desirable, we must ascertain whether it can be extended without impairing energies which might be more profitably devoted to the extension of domestic trade. An inquiry along these lines will, perhaps, disclose facts which will conclusively demonstrate that so far as the Nation at large is concerned it has accomplished marvels, and that by building up an enormous manufacturing industry and systematically developing the resources of the country it has laid the foundation for an export trade whose magnitude will only be measured by the abilities of foreigners to buy.

National Policy the Best Local Policy.

It is not improbable that a careful study of the processes which have created the national condition will make clear to us what steps we need to take in order to reach the degree of preparedness attained by other sections of the Union. California today is very much in the same position that the region on the other side of the Rocky mountains was thirty or forty years ago. Its manufacturing industries are inadequate to meet its own requirements, and it lacks a sufficiently large consuming population to enable it to produce on a scale which would make competition possible with communities where the consumer exists in such numbers that during much of the time the problem is to satisfy the demand rather than to find an outlet for surplus products.

We may also learn from such an inquiry how utterly baseless is the assumption that the effect of the protective tariff was "to erect a barrier about our territory," for it will establish conclusively that the importations of the United States were increased rather than diminished by high tariffs, the stimulus given to domestic production by the latter invariably resulting in enabling the American people to buy more

largely from foreigners than they could have done had they neglected to develop their resources.

If we wish to impartially study the relative development of the external trade of the leading nations of the world we must take into consideration a variety of facts and conditions which many who attach an undue importance to foreign commerce are disposed to overlook. When these are carefully examined it is at once perceived that the problem with which the United States has had to deal, and is still wrestling with, is so wholly different from that of other nations that a comparison is almost impossible.

In.

Ever since the inauguration of the protective policy by the United States there has been imposed on the country the necessity of caring, not only for the natural accretions of population, but for additions from abroad numbering millions. The census of 1870 gave the number of inhabitants in the country at 39,555,000. The British enumeration of the United Kingdom made a year later showed a population of 31,845,388. 1880 the population of the United States had increased to 50,155,783, the addition of the decade being nearly equal to the total number added by the United Kingdom between 1871 and 1908. Or to put it more strongly, the population of the United States increased 47,634,000 during the 38 years under consideration, while that of the United Kingdom has only augmented by 12,693,300 during the same period.

A Broad Starting Point for Comparison.

The year 1870 is selected as a point of departure because about that time what had previously been resorted to as a revenue measure was accepted as the settled policy of the country. There were occasional aberrations of the public mind, but they were not sufficiently pronounced to interrupt the steady pursuit of the purpose of developing the resources of the country to such an tent that the nation would become independent of the foreigner in the matter of supplying the American people with manufactured articles.

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