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(B) Necessary Conditions of Successful Protective Legislation.

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23. Suppose, however, that it were true that Congress had the power (by some exercise of the taxing function) to influence favorably the industrial development of the country: is it not true that men of sense would demand to be satisfied on three points, as follows?

24. (a) If Congress can do this thing, and is going to try it, ought it not, in order to succeed, to have a distinct idea of what it is aiming at and proposes to do? Who would have confidence in any man who should set out on an enterprise and who did not satisfy this condition? Has Congress ever satisfied it? Never. They have never had any plan or purpose in their tariff legislation. Congress has simply laid itself open to be acted upon by the interested parties, and the product of its tariff legislation has been simply the resultant of the struggles of the interested cliques with each other, and of the log-rolling combinations which they have been forced to make among themselves. In 1882 Congress did pay some deference, real or pretended, to the plain fact that it was bound, if it exercised this mighty power and responsibility, to bring some intelligence to bear on it, and it appointed a Tariff Commission which spent several months in collecting evidence. This Commission was composed, with one exception, of protectionists. It recommended a reduction of twenty-five per cent in the tariff, and said: “Early in its deliberations the Commission became convinced that a substantial reduction of tariff duties is demanded, not by a mere indiscriminate popular clamor, but by the best conservative opinion of the country.” “Excessive duties are positively injurious to the interests which they are supposed to benefit. They encourage the investment of capital in manufacturing enterprises by rash and unskilled speculators, to be followed by disaster to the adventurers and their employees, and a plethora of commodities which deranges the operations of skilled and prudent enterprise.” (§111.) This report was entirely thrown aside, and Congress, ignoring it entirely, began again in exactly the old way. The Act of 1883 was not even framed by or in Congress. It was carried out into the dark, into a conference committee,3 where new and gross abuses were put into the bill under cover of a pretended revision and reduction. When a tariff bill is before Congress, the first draft starts with a certain rate on a certain article, say twenty per cent. It is raised by amendment to fifty, the article is taken into a combination and the rate put up to eighty per cent; the bill is sent to the other house, and the rate on this article cut down again to forty per cent; on conference between the two houses the rate is fixed at sixty per cent. He who believes in the protectionist doctrine must, if he looks on at that proceeding, believe that the prosperity of the country is being kicked around the floor of Congress, at the mercy of the chances which are at last to determine with what per cent of tax these articles will come out. And what is it that determines with what tax any given article will come out? Any intelligent knowledge of industry? Not a word of it. Nothing in the case of a given tax on a given article, but just this: “Who is behind it?” The history of tariff legislation by the Congress of the United States throws a light upon the protective doctrine which is partly grotesque and partly revolting.

25. (b) If Congress can exert the supposed beneficent influence on industry, ought not Congress to understand the force which it proposes to use? Ought it not to have some rules of protective legislation so as to know in what cases, within what limits, under what conditions, the device can be effectively used? Would that not be a reasonable demand to make of any man who should propose a device for any purpose? Congress has never had any knowledge of the way in which the taxes which it passed were to do this beneficent work. It has never had, and has never seemed to think that it needed to get, any knowledge of the mode of operation of protective taxes. It passes taxes, as big as the conflicting interests will allow, and goes home, satisfied that it has saved the country. What a pity that philosophers, economists, sages, and moralists should have spent so much time in elucidating the conditions and laws of human prosperity! Taxes can do it all.

26. (c) If Congress can do what is affirmed and is going to try it, is it not the part of common sense to demand that some tests be applied to the experiment after a few years to see whether it is really doing as was expected? In the campaign of 1880 it was said that if Hancock was elected we should have free trade, wages would fall, factories would be closed, etc. Hancock was not elected, we did not get any reform of the tariff, and yet in 1884 wages were falling, factories were closed, and all the other direful consequences which were threatened had come to pass. Bradstreet’s made investigations in the winter of 1884–1885 which showed that 316,000 workmen, thirteen per cent of the number employed in manufacturing in 1880, were out of work, 17,550 on strike, and that wages had fallen since 1882 from ten to forty per cent, especially in the leading lines of manufacturing which are protected. What did these calamities all prove then? If we had had any revision of the tariff, should we not have had these things alleged again and again as results of it? Did they not, then, in the actual case, prove the folly of protection? Oh, no! that would be attacking the sacred dogma, and the sacred dogma is a matter of faith, so that, as it never had any foundation in fact or evidence, it has just as much after the experiment has failed as before the experiment was made.

27. If, now, it were possible to devise a scheme of legislation which should, according to protectionist ideas, be just the right jacket of taxation to fit this country to-day, how long would it fit? Not a week. Here are certain millions of people on three and a half million square miles of land. Every day new lines of communication are opened, new discoveries made, new inventions produced, new processes applied, and the consequence is that the industrial system is in constant flux and change. How, if a correct system of protective taxes was a practicable thing at any given moment, could Congress keep up with the changes and readaptations which would be required? The notion is preposterous, and it is a monstrous thing, even on the protectionist hypothesis, that we are living under a protective system which was set up in 1864. The weekly tariff decisions by the treasury department may be regarded as the constant attempts that are required to fit that old system to present circumstances, and, as it is not possible that new fabrics, new compounds, and new processes should find a place in schedules which were made twenty years before they were invented, those decisions carry with them the fate of scores of new industries which figure in no census, and are taken into account by no congressman. Therefore, even if we believed that the protective doctrine was sound and that some protective system was beneficial, and that the one which we have was the right one when it was made, we should be driven to the conclusion that one which is twenty years old is sure to be injurious to-day.

28. There is nothing then in the legislative machinery by which the tariff is to be made which is calculated to win the confidence of a man of sense, but everything to the contrary; and the experiments of such legislation which have been made have produced nothing but warnings against the device. Instead of offering any reasonable ground for belief that our errors will be corrected and our productive powers increased, an examination of the tariff as a piece of legislation offers to us nothing but a burden, which must cripple any economic power which we have.

The Forgotten Man, and Other Essays

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