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of the world protection is also gaining steadily. The principal British colonies-Canada, South Africa, Australia, and New Zealand-have adopted protective tariff systems. India has recently increased her tariff rates. Japan a couple of years ago adopted a new tariff which increased and in some cases doubled the rates of duty, especially those on manufactured articles.

BRITISH REVOLT AGAINST FREE TRADE:

In the United Kingdom, which has been pointed out by free traders as a marked example of the success of their system, leading statesmen are now urging the abandonment of that system and a return to protection, and are supporting their proposition by statements showing that the export trade of the protected countries has grown much more rapidly than that of free-trade England, and that in the absence of protection against those countries English manufacturers and workingmen are being deprived of their home markets through large importation of manufactures from other countries. The official reports of the British Government show that the imports of manufactured goods into the United Kingdom increased 71 per cent between 1880 and 1901, while into the protected country of Germany the increase was only 36 per cent, into France 28 per cent, and into the United States 20 per cent in the same period. In exports of manufactured goods the British official figures show that the United Kingdom increased only 12 per cent from 1880 to 1901; France, 22 per cent; Germany, 73 per cent, and the United States 300 per cent in the same period. It is because of stubborn facts such as these that the United Kingdom, which has stood out in favor of free trade while all the rest of the world is abandoning it, is now proposing to adopt protection. For British tariff see page 70.

Tariffs of the United States.

The question of raising revenues was one of the chief motives in the formation of the national constitution. The different states or colonies under the confederation were levying duties either for revenue or for the protection of their manufactures in competition with other colonies or states, and thus conflicts arose and it seemed necessary to have uniformity and also provide a certain and effective way for raising revenue to carry on the operations of the general government. There was a prejudice against levying taxes upon property in the colonies for this purpose, therefore it was in the minds of those who framed the constitution that the principal source of revenue would be found in the levying of duties upon foreign imports, so that one of the compromises of the constitution provided that direct taxes should be levied upon the basis of population, and not upon the basis of property. It was also then generally believed that the imposition of duties upon imports would gradually stimulate and develop manufacturing industries in our own country. So that under the constitution the power given to Congress to levy duties on imports was a plenary one, and not subject to limitation either as to rates of duty or as to the articles upon which duties should be levied. It was expected that the revenue for national purposes would be chiefly derived from tariff duties, and although there was a difference of opinion as to the rates of duty, the general purpose of a tariff law was distinctly stated in the first tariff act under the constitution in 1789, which purpose was declared as follows: "Whereas, it is necessary for the support of government, for the discharge of the debts of the United States and the encouragement and protection of manufactures that duties be levied on goods, wares, and merchandise imported, etc., etc.," thus showing in the beginning the general view as respects this subject. This view was the generally accepted one for a considerable time, but later, owing to a diversity of interests as between the several states and to the partial localization of manufactures and the rapid development of the growth of cotton, it was urged that the impositions of such a tariff worked injury to one part of the country for the benefit of another, therefore, the question was raised whether a tariff should be raised solely for the purpose of raising revenue or should also be so adjusted as to protect domestic industries from undue foreign competition. The agitation of this question was stimulated by the agitation of free trade in Great Britain, having for its chief purpose the repeal of the corn laws.

Thus from the beginning the obtaining of revenue and the encouragement and protection of manufactures were united as motives for levying duties on articles imported. This mode at that time generally prevailed in foreign countries, and received general acquiescence here, and thereby in levying a tax upon merchandise entering a community or state, persons from abroad trading in that community or state were required to bear their proper share in the expenditures of such community or state.

THE PROTECTIVE THEORY IN EARLY TARIFFS.

1

The protective theory was recognized in the first tariff of the United States, which declared in its opening words that"Whereas it is necessary for the support of government, for the discharge of the debts of the United States, and the encouragement and protection of manufactures that duties be levied on goods, wares, and merchandise imported," etc. That tariff imposed duties upon about 75 articles, the rates of duty ranging from 7% to 15 per cent on those articles upon which an ad valorem duty was imposed, though on more than half of the articles named the rates of duty were specific. One year later an additional number of articles were placed upon the dutiable list, still others in 1792, and again in 1794, the average rates on dutiable articles by that time reaching 13 per cent. In the year 1812 the war tariff doubled the rates of duty, making an average rate of 32.7 per cent, and under that tariff, coupled with the stimulus 'given by the war, occurred great activity in manufacturing.

In 1816 the Lowndes-Calhoun bill went into effect, giving an average rate of about 26 per cent, which, however, was too low to prevent vast importations from England which were sent at less than cost prices with the distinct purpose of crushing out of existence the infant industries which had been developed during preceding years, and especially during the short protective period from 1812 to 1816.

TARIFF OF 1824.

In 1824 a higher protective tariff was enacted, giving an average rate on all imports of 37 per cent, and in 1828 this was increased to bring the average up to about 48 per cent, and continued in operation until 1834. During that time great prosperity came to the people of the United States, both to the manufacturing industries and to those supplying the food and materials consumed by persons engaged in those industries. Henry Clay, commenting on conditions of that period, said: "If the term of seven years of the greatest prosperity which its people have enjoyed since the establishment of their present Constitution were to be selected it would be exactly that period of seven-years which immediately followed the passage of the tariff act of 1824." Major McKinley, commenting later upon conditions of that period, said: "The entire country, under that tariff, moved on to higher triumphs in industrial progress, and to a higher and better destiny for all of its people." President Jackson, in a message to Congress in 1834, the year prior to the repeal of this protective tariff law, said: "Our country presents on every side markets, prosperity, and happiness unequaled perhaps in any other portion of the world."

LOW TARIFF AND THE CRASH OF 1837.

In 1833, however, under pressure of the low tariff supporters the Clay compromise tariff act was passed, reducing the rates of duty and providing for a further gradual reduction during a term of years to bring the average rate on all imports down to about 17 per cent. This was followed by a decline in trade and industry, by an inundation of foreign goods, by financial depression, assignments and bankruptcies, until the culmination came in the financial crash of 1837, one of the most appalling and disastrous financial revulsions ever known, the revenue so falling off that the Government was obliged to borrow money at high rates of interest to pay current expenses, while workingmen were idle, the farmers without markets, and their products sold by sheriff to pay debts.

In 1842 a protective tariff was enacted which was followed by general prosperity during the short period of four years in which

it was in operation. So prosperous was the country under this that President Polk, in his message of December, 1846, said: "Labor in all its branches is receiving an ample reward, and the progress of our country in her career of greatness, not only in extension of territorial limits and in the rapid increase of her population but in resources and wealth and the happy condition of her people, is without an example in the history of nations."

THE WALKER TARIFF.

At that very date (December, 1846), however, the celebrated Walker tariff went into effect, making a general and great reduction in duties, being a thoroughly free-trade measure in its principles. The war with Mexico, the discovery of gold in California, and the unusual demand abroad for agricultural products maintained prosperity in the United States during the earlier years of this Walker tariff, but much of the gold was drawn abroad in payment for the foreign goods imported and within a few years came a great depression, the closing of manufacturing establishments, lack of employment for labor and lack of home markets for the farmer. In 1850, Mr. Samuel Bowles, editor of the Springfield Republican, and other representative citizens of Massachusetts sent a petition to Congress entreating it to revise the tariff of 1846 in the interest of protection, and saying: "Previous to the passage of that law the manufacturing and mechanical interests of this community were in a flourishing condition. Since that time the condition of things has entirely changed, and it is fully believed that much of the stagnation of business will be traced to the operation of that law. Manufacturing languishes, mechanics are thrown out of employment, business of all kinds is dull, and unless protection can be afforded to our laboring classes poverty will overtake them." In 1854 Hunts's Merchant Magazine, a wellknown free trade journal of that period, said: "Confidence is shaken everywhere and all classes are made to realize the insecurity of worldly possessions. The causes which led to this have been a long time at work. Goods which had accumulated abroad when the demand had almost ceased were crowded upon our shores at whatever advance could be obtained, thus aggravating the evil." The answer of Congress to these appeals, however, was a further reduction of duties made in 1857, and this was followed by a panic and commercial ruin, and such conditions that the Government was compelled to pay as high as 12 per cent and 13 per cent for money borrowed to pay the running expenses of the Government. Of this condition President Buchanan, the last Democratic President before Grover Cleveland, said in his message of 1860: "With unsurpassed plenty in all the productions and all the elements of natural wealth, our manufacturers have suspended, our public works are retarded, our private enterprises of different kinds are abandoned, and thousands of useful laborers are thrown out of employment and reduced to want. We have possessed all the elements of material wealth in rich abundance, and yet, notwithstanding all these advantages, our country in its monetary interests is in a deplorable condition."

TARIFFS AND CONDITIONS SINCE 1861.

In the 36th Congress a majority of the House of Representa-~ tives, being Republican, favored the substitution of a protective tariff for the amended tariff of 1846, and under the leadership of the then Chairman of the Committee on Ways and Means, Mr. Morrill, of Vermont, the House of Representatives during the long session of 1859-60 passed a protective tariff measure, which, during the short session of 1860-61, after the abdication of many Southern Senators, received a majority in the Senate, and was signed by President Buchanan before he vacated his office in March, 1861. Thus with the advent of the Republican party to control came the adoption of the protective system, and this became permanently a part of the policy of the Government until 1894, when the Wilson-Gorman low tariff act was passed. The prosperity which developed during that period is so well known that it need scarcely be alluded to. The value of farms and farm property increased from a little less than 8 billions of dollars in 1860 to over 18 billions in 1890, as shown by the United States census. The value of farm animals increased from one billion dollars in 1860 to 21⁄2

billions in 1890, The value of manufactures increased from less than 2 billion dollars in 1860 to 9 billions in 1890; the wages and salaries paid to persons employed by the manufacturing industries increased from 379 million dollars in 1860 to 2,283 millions in 1890. The deposits in savings banks grew from 150 million dollars in 1860 to 1,712 millions in 1892, or about 12 times as much in 1892 as in 1860. Meantime the national debt, incurred by the war, had been reduced from 2,636 million dollars in 1866 to 841 millions in 1892; the per capita indebtedness from $77 in 1865 to $13 in 1892, and the annual interest charge per capita from $3.98 in 1865 to 35c cents in 1892. Imports during that long period of protection increased from 353 million dollars in 1860 to 827 millions in 1892, and exports increased from 333 millions in 1860 to over one billion dollars in 1892. The share which manufacturers' raw materials formed in the imports increased from 17 per cent in 1860 to 24 per cent in 1892, and the share which manufactured articles ready for consumption formed in the imports fell from 35 per cent in 1860 to 17 per cent in 1892. The manufacturers of the country not only supplied the home markets which had been heretofore supplied from abroad, but increased their exportation of manufactures from 40 million dollars in 1863 to 160 millions in 1892; and the farmers not only supplied the greatly increased demand of the home market but increased their exportation of agricultural products from 256 millions in 1860 to 798 millions in 1892. As a result of this unexampled activity and prosperity the money in circulation in the country grew from 435 million dollars in 1860 to 1,601 millions in 1892, and the amount per capita increased from $13.85 in 1860 to $24.56 in 1892. Wealth meantime increased from 16 billions of dollars in 1860 to 65 billions in 1890, and the per capita wealth from $514 in 1860 to $1,038 in 1890.

THE WILSON-GORMAN TARIFF.

Then followed the Wilson-Gorman low-tariff law. True, it was not enacted until 1894, but the election in 1892 of a Democratic President and Congress notified the people of the United States that a change in the tariff might be expected, and from that moment business began to decline. The certainty of a tariff reduction, coupled with the uncertainty as to how great its extent might be upon each individual article, caused the manufacturers to immediately curtail their production, and the reduction of employment which followed reacted upon all classes in a reduction of the demand for their products and a reduction of price for that which found a market. As a result the bank clearings, that great barometer of business conditions, fell from 61 billions of dollars in 1892 to 52 billions in 1896, the year of the election of McKinley, whose very name was a promise of protective tariff. Money in circulation fell from 1,601 million dollars in 1892 to 1,506 millions in 1896, and the per capita from $24.56 in 1892 to $21.41 in 1896. Exports fell from 1,015 million dollars in 1892 to 863 millions in 1896; those of agricultural products alone falling from 798 mil-` lions in 1892 to 570 millions in 1896, while imports of manufactured articles ready for consumption increased from 142 millions in 1892 to 160 millions in 1896. The revenue of the Government fell off and loans became necessary to meet the current expenditures, and as a result the national indebtedness increased from 841 million dollars in 1892 to 955 millions in 1896-all during a time of profound peace. The effect upon all industries was strongly marked. The value of animals on farms fell from 2,461 million dollars in 1892 to 1,728 millions in 1896; the production of wool, under free trade in that article, fell from 294 million pounds in 1892 to 272 millions in 1896 and its value from 59 million dollars in 1892 to 33 millions in 1896; and the value of sheep on farms from 45 million dollars in 1892 to 38 millions in 1896. Pig-iron production fell from over 9 million tons in 1892 to 62 millions in 1894. Rates of wages were reduced in all lines of industry; millions of men were out of employment, and as a result prices of farm products were greatly reduced. Railroad building, which had been proceeding at the rate of from four to five thousand miles per annum, fell to 1,700 miles in 1896. Over 25,000 miles of raflway, or one-third of the total of the country, went into the hands of receivers, and the wages of their employes were greatly

reduced. As a result of these conditions the commercial failures increased from 10,344 in number in 1892 to 15,244 in 1893 and 15,088 in 1896, and the amount of liabilities from 114 million dollars in 1892 to 346 millions in 1893 and 226 millions in 1896.

THE PRESENT TARIFF.

Following the election of William McKinley and a Congress Republican in both branches a special session was held as soon as possible after McKinley's inauguration, and a protective tariff— that now upon the statute books-enacted. Under it has come prosperity to every branch of industry and prosperity to the Government as well as to its people. The interest-bearing debt, necessarily increased by reason of the war with Spain, has been reduced from 1,046 million dollars in 1899 to 895 millions in 1904; the per capita indebtedness from $15.55 in 1899 to $11 at the present time, and the annual interest payments from 40 million dollars in 1899 to 25 millions at the present time. The money in circulation has increased from 1,506 million dollars in 1896, the year of McKinley's election, to 2,503 millions on March 1, 1904; the per capita money in circulation from $21.41 in 1896 to $30.75 on March 1, 1904; the bank clearings from 51 billion dollars in 1896 to 114 billions in 1903 (having thus more than doubled), and the total bank deposits from 4,916 millions in 1896 to 9,673 millions in 1903. Farm animals increased in value from 1,728 millions in 1896 to 3,102 millions in 1903; pig-iron production from 81⁄2 million tons in 1896 to 18 millions in 1903; steel production from 54 million tons in 1896 to 15 millions in 1903; coal production from 171 million tons in 1896 to 270 millions in 1902; the value of minerals produced from 623 million dollars in 1896 to 1,260 millions in 1902. Exports of agricultural products grew from 570 million dollars in 1896 to 873 millions in 1903, and exports of manufactures from 228 millions in 1896 to 407 millions in 1903, while manufacturers' raw materials, which formed but 261⁄2 per cent of the imports in 1896, formed 38 per cent in 1903. As a result of all these things came increased wages, increased employment, and increased savings by the workingmen, as is shown by the fact that the money deposited in the savings banks increased from 1,907 million dollars in 1896 to 2,935 millions in 1903, and the number of depositors from 5,065,000 in 1896 to 7,305,000 in 1903. Railroads passed out of the hands of receivers; railroad building has resumed, the mileage of railroads increasing from 182,776 in 1896 to 205,000 in 1903, and the number of tons of freight carried by the railroads increasing from 773 millions in 1896 to 1,192 millions in 1902. With this great activity and prosperity has come an increase in national wealth from 77 billions of dollars in 1895 to 100 billions at the present time, placing the United States at the head of the list of the world's nations, and with a national wealth actually 50 per cent. greater than that of the United Kingdom, and as great as that of France and Germany combined.

As to Further Tariff Revision.

Much has been said during the past year as to the importance of a revision of the present tariff. To this it is only necessary to say in reply, that the Republican party has adjusted, revised, increased, or reduced the tariff whenever such adjustment, increase, or decrease seemed necessary during all of the 40 years since it assumed government in 1861. In that period of 40 years there have been more than 20 different tariff changes. A considerable number of these have been changes of a broad, general character, many of them increases or decreases all along the line, while others were of less importance and relating to certain classes of merchandise only, but any of them sufficient to show the willingness of the Republican party at any period of its control to make any necessary changes, revisions, or reductions which in view of new conditions may be demanded by public opinion. No body of men is more sensitive to public opinion or public demand than a Congress formed in the manner in which that of the United States is chosen and whose members are directly dependent upon popular approval for a continuation of their services. No body of men is more accessible to the public than a body to which each citizen of the United States is guaranteed by the Constitution the right of petition. An examination