beef, lumber, wool, and vegetables of the British provinces, consequent upon the termination of the reciprocity treaty, have injured and not benefited the American agriculturist. Canadian lumber we must have, and have taken it as before, paying ourselves the duty of twenty per cent., and some percentage additional. The exclusion of Canadian "combing wools" has rendered unproductive capital and machinery invested in the worsted manufacture to the extent of some eight million of dollars, depriving the American wool-grower, on the one hand, of a market for a certain proportion of his product of "clothing wool" to be mixed with the Canada worsted wools, and the American grain-grower, on the other hand, of a market for the agricultural produce required to feed the operatives of the now idle and silent worsted factories. The oats of Prince Edward's island, which formerly found a market in New England and New York, and were paid for in domestic manufactures produced by operatives who consumed western agricultural produce, are now exported to England, and are paid for in British manufactures, produced by operatives who consume British or continental produce. No less beef and pork are now produced, or will be produced, in the British provinces by reason of their exclusion from American markets, but every barrel thus excluded will tend to supplant an equal quantity of the American product in a foreign market, and at the same time deprive the American shipowner of any profit that may be likely to accrue to him from the possession of the carrying trade. And, finally, if any benefit can be imparted to any agricultural interest by the imposition of a duty of ten cents per bushel on Indian corn, (as provided for in House bill No. 718,) when the United States, in the year 1866, exported to Canada a million and sixty-two thousand bushels, and imported less than four thousand bushels-mainly from western France and the Sandwich Islands*-the commissioner is entirely unable to perceive it. As a further illustration of the principle which we have laid down, that the true and only protection of the American agriculturist is to be found in the existence and extension of American manufactures, we present the following statements: The wheat crop of the United States for 1865, according to the estimates of the agricultural bureau, was 148,522,827 bushels, and the corn crop 704,427,853 bushels. Of this quantity there were exported to Great Britain and entered for British consumption 1,183,689 cwt. (2,209,552 bushels), as compared with 19,905,451 cwt. (37,156,842 bushels) imported into Great Britain from all other countries; while of 3,932,788 cwt. of wheat flour imported into Great Britain, only 262,876 cwt. were received from the United States. On the other hand, New England and New York alone, in 1860, required twenty-six millions of bushels of wheat, in addition to their own production, to make up their consumption; while of the value of the whole agricultural products of the country, for the same year, including hay, butter, wine, potatoes, tobacco, hemp and wool, as well as grain, but excluding cotton, rice, and sugar, only two and threefourths per cent. was estimated to have been exported, leaving ninety-seven and one-fourth per cent. for the home market and consumption. The great want of the western agriculturist is a remunerative and certain *Statement showing the quantity and value of Indian corn imported into the United States during the fiscal year ending June 30, 1866, and the countries from which imported: market for his surplus products; and this want is likely to increase rather than diminish. Experience has shown that this surplus cannot, in its crude condition, find any sufficient outlet in foreign markets. With the exception of Great Britain, nearly all of the states of Europe are now food exporters rather than food importers; and were Great Britain to draw the entire amount necessary to make up her annual food deficit from the United States, the American surplus would, in a few years, be as large as ever. Were, however, the American manufacturer placed in a condition in which he could compete in foreign markets for the sale of even a moderate percentage of his products, the exportation of agricultural produce transmuted from its crude condition by the labor of American operatives would be practically unlimited. The securing of similar results constitutes a leading feature in the commercial policy of most of the European states, and in their annual financial exhibits the extent of exports of manufactured articles is regarded as one of the most unerring indications of current financial prosperity. In the United States, on the contrary, the public in general regard this matter with feelings akin to indifference, while legislation, made most frequently in accordance with the persistent demands of special interests, tends not only to the destruction of the foreign, but also of the home market. Two illustrations on this point are most significant. Ten years ago the American manufacturer supplied, to a considerable extent, fur hats to the Mexican, Cuban, and South American markets; to-day he supplies comparatively none. Why? Because the duty on foreign fur, the raw material of his manufacture, has prevented the American from competing with the foreign producer. Thirty years ago the manufacture of broadcloth constituted from fifty to sixty per cent. of the whole woollen business of the United States; now, it is not probably in excess of five per cent. Why? Because American legislaion has not permitted the importation of broadcloth wools, and the American agriculturists have produced nothing to take their place, and never will until the successful establishment of the broadcloth industry in the United States has created a constant home demand for “broadcloth" wools. The enforcement of the so-called Monroe doctrine is regarded as a cardinal feature of American policy. Is it not time to inquire whether this policy cannot be effectively strengthened by legislation looking to the extension of American trade, as well as by diplomatic negotiation or a menace of force ? INCREASE OF THE TARIFF CONSIDERED AS A REMEDIAL MEASURE. Let us now consider how far the proposed increase of the tariff, so very generally demanded and given by the House bill No. 718, will prove effective in relieving the industry and stimulating the development of the country. The evils which now affect the trade, industry, and commerce of the country, are mainly due, as has already been demonstrated, to an extraordinary and abnormal advance in the price of all labor and commodities as compared with the prices which prevailed in the United States prior to the war, or which now prevail in foreign countries with which the United States maintains commercial intercourse. The evil is a radical one; confined to no one section and to no one interest; the remedy must, therefore, be also radical. In considering the question of the extent to which an increase of the tariff is likely to prove remedial, this fact in the outset should be clearly borne in mind, viz: that all taxes are in the nature of an assessment upon the annual production of the nation, whether such taxes are levied in the form of a duty upon foreign imports for which domestic products have been exchanged, or in the form of an internal tax upon domestic products in their crude or manufactured forms. Now, an increase of the tariff, or, to express the same thing in more exact language, an increase of taxation on imports, especially an increase as extensive as that given in the House Bill No. 718, is clearly legislation in the direction of higher prices. If this result does not in general follow, then the end sought for by those who ask for the increase in question will not be attained. Let us, however, consider the immediate and ultimate effect upon the producer and consumer of such an increase in the case of a leading article especially affected by the tariff. The agriculturists of certain sections of the country complain that, owing to the high cost of labor and commodities, they are unable, as heretofore, to raise wool at remunerative prices. They accordingly ask for an additional duty of four cents per pound specific and ten per cent, ad valorem on all importations of unwashed wool; while the manufacturer necessarily follows with a demand for a corresponding increase in the rates of duty upon the importations of all manufactures of wool. Both parties expect to obtain, and doubtless will obtain, an immediate increase of price for their respective commodities corresponding to the increase of duties imposed; which increase of prices, as will be shown hereafter, will tax the domestic consumer, supposing the consumption of wool and woollens in the future to be equivalent to that of the last fiscal year, to the extent of thirty-tico millions per annum over and above what he now pays-a sum equal to more than one-fourth of the present annual interest on the national debt. No principle in the economy of taxation is, however, better recognized at the present day, than that a tax, in an essentially free community, upon one of the necessaries of life, is in fact a tax upon all, and, like the pressure applied to the surface of water, distributes itself rapidly and with great uniformity.* It therefore follows, that a tax on the consumer, like that resulting from the increased cost of wool and woollens under consideration, both absolute necessaries. will soon distribute itself throughout the whole community, and will eventually manifest itself and reappear in the shape of an increased price for all other forms of labor and commodities; thus aggravating the very evil which in the outset it was intended to remedy, and necessitating a further increase in the volume of currency in order to facilitate exchanges at a higher level of prices. If now the representatives of the other producing interests come forward and demand, as in equity they certainly have a right to do, that in consideration of the increased cost of their products-arising from the additional taxation of thirty-five millions leveid for the benefit of wool-growers and wool-manufacturers-increased duties be also levied for their benefit, it is evident that a compliance with this demand would leave prices relatively as before, with the exception that they would be brought to a still higher level and be rendered even more unstable and abnormal. Again, let us, apart from all other considerations, next inquire whether an increase of prices, or, to state the question more fairly, whether" an opportunity, artificially created, to immediately increase production," will give to the manufacturer the advantage he expects to obtain through an increase of the tariff? We think not, and for the following reasons : "The manner in which a tax diffuses itself is thus: to the extent that any individual or class can transfer the onus of a tax to others by including it in the price of his commodities or services, such individual or class invariably does so, but nevertheless each individual or class does so in the face of a constantly decreasing number of those left to sustain the tax. This transfer of liability occurs again and again, till having reached to the farthermost, it finds its way back, like the answering ripples of a pond or the responsive echoes of a valley, to the point whence it starts, but somewhat modified in its intensity, every intermediate individual or class having had to suffer in the increased prices of the products or services of those immediately beyond them, a portion of the liability. These ripples and answering ripples of trausferred liability, after repeatedly flowing back and forth into one another, at length come to a comparative state of rest; and thus all members of the community become eventually equally burdened." As already shown, there is an acknowledged scarcity of "skilled," and, to a certain extent, of unskilled labor in the country. An increased production, therefore, necessitates an increased demand for labor, which, in accordance with the universal law of supply and demand, must be followed by an increase of wages, even if the advance of prices on which the increased production is based did not itself compel the workman to this course. A general advance in the tariff, as a measure of relief to the manufacturer, must. from the very necessity of the case, therefore, in a short time neutralize itself and leave the producing interests in a condition no better than before. That such was the result following the great advance of the tariff of 1864 is almost the universal testimony received by the commissioner from all parts of the country, and is indirectly substantiated by the fact, that notwithstanding the advance then given was regarded as highly protective, the representatives of the producing interests of the country, although the taxes have since 1864 been to a considerable extent decreased, and an additional supply of labor through the disbanding of the army been rendered available, are now more urgent than ever before for a further increase in the rates of duty. The following table illustrates the extent of the advance of the tariffs of 1864 and 1865, as compared with the tariff of March 2, 1861, on some of the principal articles of importation: AVERAGE RATES OF DUTY UNDER EXISTING TARIFF. The commissioner would next ask attention to the average rate of duty imposed by the present tariff (in gold) on the invoiced value in gold of the dutiable goods imported into the United States during the fiscal year ending June 30, 1866. This will appear from an examination of the following table to have been 48.58 per cent. : $179, 046, 630 Total dutiable goods Amount of duties received..... Percentage of duties to dutiable imports 48.58* per cent. On many of the articles of ordinary consumption the rate of duty imposed is considerably in excess of the general average, as above given. The following table shows the relation of the rates at present levied and collected on a variety of leading importations to the invoiced values: Silks, and various manufactures of silk.. Gum copal, equivalent to.. Files, Iron, pig, "bar, (common,) equivalent to. small, round and square, equivalent to. 46 hoop, 66 66 60 per cent. 64-74 per cent. over 100 per cent .52 52 to 581 66 66 sheet, No. 11 to 20 wire gauge, equivalent to.. Steel, extra cast, equivalent to.. To these rates, freight, insurance, commission, &c., must be added, thus to some extent increasing the duties above the rates here given. In view of this statement, it would seem obvious that an increase of duties, carrying up the rates, average and special, to a greater degree than those now As a matter of interest in this connection, the following table, showing the average rates of duty on dutiable importations under the various tariffs from 1821 to 1861, inclusive, together with the gross revenue derived therefrom, is presented: These estimates are based on gold prices on board ship at Liverpool, October, 1866. exchange being reckoned at ten per cent. premium. |