PROTECTION AND FREE TRADE.

ATURE OF THE SUBJECT.-This chief of living questions in our economy and politics is compound in substance and form. In form its parts take the shape of a case in court between plaintiff and defendant. In substance it covers two distinct branches of economic science, to wit, the relation of labor to capital, and the principle of taxation.

LABOR AND CAPITAL.-Touching these, the question has its broadest significance. There is practically no limit to its range. In this field doctrinaires spin their fondest theories, and practical men pile up their cherished facts and figures. Parties, even, shape their lines on the basis thus afforded, and make the political arena ring with arguments of refutation and pleas for recognition and support.

FREE TRADE.-But let it be understood that Free Trade in the abstract is confined only to bookish theorists. In this, its fullest sense, it means open, unrestricted commerce with all nations. As to ourselves, and within the limitations of our subject, it means the opening of our ports to the free importation of foreign manufactures and direct competition with the richer capital, riper machinery, and cheaper labor of older countries. This is not, as yet, advocated by any political party in this country, though it is contained, as a germ, in most of the anti-protection arguments. Those who pass for Free Traders, and who must be called such since popular speech thus best distinguishes them, in general recognize the right, and propriety, of a duty on imports for the purpose of supplying the government with necessary revenue. Controversially they enter the field of capital and labor, practically they are only within that of taxation.

The fostering of our industries, in other words protection, is an incident of taxation, not an object. How long they can resist the tendency of their arguments and refrain from a final plunge into abstract Free Trade remains to be seen.

PROTECTION.-On the other hand it should be understood that Protection, from its very inception till now, embraced the principles of taxation, and, taking advantage of them as a foundation, built thereon a system designed to encourage the development of home resource. While all agreed that duties on imports were the least burdensome of indirect taxes, and therefore the most cheerfully paid, Protection made them a discrimination against foreign peoples and turned them to the account of our own. It at first vindicated the procedure by the example of other countries and by the desirability of commercial and industrial independence. Now it vindicates its position by reference to what it has achieved in the domain of capital and labor. It is the doctrine of a school, which uses the flag and discipline of a political party, but whose scholars are found in all parties. In fact it has not been inaptly distinguished by the terms "American Idea," and "American System."

TAXATION-The easiest approach to both the history and principles of Protection and Free Trade is through the word "Tariff." It is the Arabic word ta'rif, "information," either because it was the list of goods on which duties were levied, or the name of the town or post, "Tarifa," on the coast of Spain where the Moorish authorities kept watch and gave information of vessels sailing through the Straits of Gibraltar, on whose cargoes they were accustomed to levy taxes. These Moors left their numerals and this word tariff as a legacy to the civilized nations of the world. The refinements of trade have given the word tariff a definite meaning.

All taxes are divided into direct and indirect. Indirect taxes are those levied on goods in passing from hand to hand-say from manufacturer to consumer, or from importer to consignee. It would be better for our purposes to say that all taxes are internal or external. External taxes are those levied on imports from, or exports to, a foreign country. They are what the Con

stitution means by "duties" and "imposts," in the clause, "The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States." They are also covered by the word "Tariff," but since export taxes are exceptional, Tariff has come to signify the taxes on imports alone, and also the law or system under which such taxes are levied. All civilized nations have a tariff of some kind.

TARIFF-This tariff, indirect or external tax, was formerly used by nations as a source of revenue alone, and frequently in a spirit of booty. But as soon as they began to have intelligent notions of trade, and of internal development, it became an economic force. Legitimate trade may be said to have taken its rise in England under the auspices of Elizabeth. Its rapid progress there must be ascribed, in a great measure, to the fostering care of the government, exercised through and by means of tariff regulations. From a different spirit in her institutions, though with superior advantages, France, at a later period and under the endeavors of her ingenious and indefatigable Colbert, laid the foundation of her industry and commerce. The establishment of the woollen industry in a country, where nature seems to have denied the means, has always been alluded to by statesmen as an evidence of what can be effected by patronizing administration and a truly fostering government. The Dutch, who were pre-eminent in industry and trade, ever made them an essential object of State. Their government was paternal in the extreme, and their regulations more numerous than those of any other country. And so with other peoples, after trade became legitimatized, and industry responsive to regulation. The tariff, in one shape or another, was the great regulating lever, and the main source of encouragement. Since unified Germany has come upon the map, she has resorted to special tariff enactments, which involve protective features. Italy has had recourse to higher tariff laws, in order to encourage lagging industries. France, after having for a long time relaxed her earlier regulations, has returned to them as a means of industrial revival.

There are but three countries in all Europe, beside England, that are not protective-Turkey, Switzerland and Norway. Turkey is now insisting on higher rates of duty.

THE ENGLISH POLICY.-The old English system of tonnage and poundage laws, of protective tariffs, and of commercial regulations, was severely in her own favor. It embraced over four hundred Acts of Parliament, and was administered without respect to the rights of any other nation, but solely for her own industrial and commercial welfare. She did not hesitate to make her tariffs prohibitive, nor to directly prohibit the exportation of articles which might teach inferior nations the skill of her own. There is no record of a protective system so selfishly woven and tyrannically administered as hers, if we except the absolutely exclusive and despotic system of China; nor of one so persistently sustained till it gave her the manufacturing and commercial supremacy she courted. This point reached, as to commerce by 1825, and as to manufactures by 1846, she resorted to a change of policy. We shall see hereafter how she turned her American colonial policy to protective account. Let us see how she protected her iron. From 1782 to 1795 the duty on foreign bar iron was over $12 per ton. from 1798 to 1802 over $15; from from 1810 to 1812 over $24; in 1818 over $28. By 1825 the duty was £6 10s. per ton if imported in British ships, and £7 18s. 6d. if imported in foreign ships. Other manufactured iron paid £20 ($90) per ton; and iron not otherwise enumerated paid £50 for every £100 worth imported. All of these rates were then not only protective, but prohibitive, and they serve as an index to the policy which prevailed as to other industries which she designed to foster.

In 1797 it was over $14; 1806 to 1808 over $23;

MODERN ENGLISH POLICY.-The change from protection of the most studied and persistent kind to a policy of free trade came, after the former had given her wealth and a mighty reserve capital, multiplied her industries, fostered inventive skill, carried her fabrics to perfection, and enabled her to dominate the markets of weaker, less skillful, wealthy and independent nations. "Her own markets for her own wares," was

the motto so long as they were in danger of competitive invasion by others. A number of her writers on political economy, for more than half a century prior to 1846, had inclined to the doctrine of free trade. Her statesmen followed in their wake and gradually changed the character of her tariff legislation. By the latter date free trade in manufactures was the accepted dogma. Free trade treaties had been effected with a few of the leading countries-notably France-but these were not, in general, renewed. For a time she hesitated about her commercial supremacy, owing to the cheapness and facility with which Americans built fast sailing ships. But during the transfer from wooden sailers to iron steamers—a transfer which, in America, was unfortunately retarded, or rather whose prosperous beginning was prevented, by the civil war-she took a decided lead. By means of enormous subsidies, covering a period of twenty years, she destroyed the effect of all legitimate competition, and created for herself a monopoly in building and operating a steam iron marine. After this the principle of subsidies, like that of protection to her manufactures, was no longer insisted upon. She became free trade all through, and immediately set up to indoctrinate the world with her newly assumed and thoroughly selfish dogmas. Her Cobden Club, an association of British noblemen, was formed in 1866. Its avowed object is interference with the protective policy of newer, weaker and less favored nations, and their conversion to English free trade notions. Not content with arguments scattered abroad in tracts and books, this club, which counts among its numbers 200 members of Parliament and 12 of the 14 Cabinet ministers, has established agencies in different parts of the United States, for the purpose of operating directly on our politics, especially in congressional districts. In its issue of July 16, 1880, the London Times said: "It is to the New World that the Cobden Club is chiefly looking as the most likely sphere for its vigorous foreign policy. It has done what it can in Europe, and it is now turning its eyes westward and bracing itself for the struggle which is to come. It cannot rest while the United States are unsubdued.".

BRITISH COLONIAL POLICY.-Tariff, in some shape,