Harper's/Food for Reflection

by Carl Schurz

FOOD FOR REFLECTION.

The policy of high protection is at present on trial in more senses than one, and various verdicts have already been pronounced by its own friends. The amendments made by the Finance Committee of the Senate to the Dingley bill, and the speech with which Senator Aldrich, the ablest leader in Congress of the protectionists, opened the discussion on the amended bill, have rudely dispelled some of the delusions which formerly were assiduously nursed by the advocates of the protective system.

It will be remembered that the calling of a special session of Congress and an increase in the tariff duties were urged on the specific ground that the government was in dire need of more revenue. The Dingley bill was rushed through the House of Representatives under the whip and spur, accompanied by a somewhat enigmatical averment by its sponsor that it would provide the necessary income. But no sooner did that bill fall into the hands of the Finance Committee of the Senate than the confession was frankly made that high protection and large revenue from tariff duties were two incompatible things; that if high protection was insisted upon, it must be kept up for its own sake and in its own name, but not under the guise of a revenue measure; and that if revenue was to be raised it must be by taxation other than high protective duties. The Finance Committee of the Senate accordingly constructed a bill virtually divided into two distinct parts: one devoted to the protection of industrial interests, and the other devoted to the object which, confessedly, the protective part did not serve — the raising of revenue. This may be considered as a clear and conclusive verdict, deliberately rendered by the protectionists themselves, that high protection as a revenue policy is a decided failure.

We had also been taught that, although protection was a good thing in itself, and the more we had of it the better, yet only if a reasonable stability in tariff rates could be assured for a sufficiently long period, everything would be right and the prosperity of the country would unfailingly flourish. But now Senator Aldrich, the leader and spokesman of the protectionists, has discovered that the country will not favor “extreme” tariff rates, such, for instance, as those of the McKinley act; that such rates would be apt to provoke reactions which would express themselves at the polls, and that then the stability in the tariff policy, which is so necessary to prosperous business developments, would be rendered impossible. What Senator Aldrich said upon this point is a truth well recognized for a long time by thinking observers, if not by the protectionists themselves. There are, in fact, two things which constantly disturb the desired stability. It is not only the natural repugnance with which the great mass of consumers will regard everything that artificially increases the cost of living, but it is also the fact that a protective policy incessantly excites among the weaker class of its beneficiaries a desire for more and more protection, and that this constant pressure upwards brings about endless unrest. The records of our tariff legislation with its rapid succession of changes in rates furnish ample proof of this. There has been only one period of comparative stability in our history, and that was after the low tariff of 1846, when everybody was so well satisfied that for a series of years the subject of the tariff actually disappeared from our party platforms, the business community having made up its mind that it would prosper best without high protection. And not at last the foremost official champion of protection himself has confessed that high tariff rates and that stability which is required for a prosperous development of the country's business will not go together.

But neither of these confessions, nor both combined, equal in instructive meaning the singular coincidence of facts and circumstances which occurred in the national capital not many days ago. A stock-broker from New York was sent to jail for having refused to answer certain questions put to him by a Senate committee concerning certain alleged speculations of Senators in the shares of the Sugar Trust carried on a few years ago, while a tariff bill was before the Senate, and the action of Senators could affect one way or the other the value of that stock. And the principal men of the Sugar Trust were put on trial in a court at Washington on the charge of having refused to testify before the same Senate Committee as to certain contributions alleged to have been made by the Sugar Trust to the campaign chest of a political party. And while that broker was sitting in jail, and those chiefs of the Sugar Trust were being tried, at that same time another tariff bill was up for discussion in the Senate Chamber, of which tariff bill the protective duties on the article produced by the Sugar Trust again form one of the most important parts. That discussion is now going on; and again the same rumors are flying about of legislators speculating in stocks the value of which may be put up or down by their official action, and of the ruling party being under such pecuniary obligations to the Sugar Trust, as well as to other industrial interests benefited by the protective tariff, that it will have to do their bidding even against its own judgment as to what will best serve the public good.

While no fair-minded man will take the refusal of the stock-broker and of the two chiefs of the Sugar Trust to answer certain questions as positive proof that Senators, while fixing the tariff duties on sugar, have been speculating in the stock of the Sugar Trust, or that the Sugar Trust had purchased the controlling interest in a political party, the coincidence here mentioned certainly does serve to recall very vividly to our minds the cynical frankness with which, not long ago, the pecuniary relations between the beneficiaries of the protective tariff and the party championing the protective policy were publicly avowed. The Republican campaign manager has, whenever an important election approached, claimed the right to “fry the fat” out of the protected manufacturer with the same cool assurance with which a merchant claims the price of his goods in an ordinary business transaction. And on the other hand, the manufacturer has, in consideration of his contribution to the Republican campaign fund, felt himself fairly entitled to such favors in the shape of protective tariff duties as it was within the power of the Republican party to bestow; and hence very high tariff rates on many articles for which no other intelligible reason could be given than that they had been asked for. Nor can it be denied that many otherwise right-thinking persons, blind to ulterior consequences, justify such relations by finding it perfectly natural that those who are profited by the tariff should contribute money for the success of the high-tariff party, and that in return this party should then do the best it can for the benefit of its supporters. Those who reason thus forget that such transactions involve the sale of legislation; that the sale of legislation may, as it certainly often does, involve the sale of public interests; and that such a joint partnership between a political party and a great money power must inevitably result in a regular system of corruption on the grandest scale.

The admission by the protectionists themselves that a high protective tariff is a failure as a means of raising sufficient revenue, and that it will not produce that stability of conditions which is necessary for the development of solid business prosperity, will greatly aid the popular mind in rightly gauging the economic merits of the protective policy. But those economic merits are of far less importance in the long-run than the effects which the protective system is producing upon our political morals. While economic blunders may temporarily vex and harm us, they can be remedied and the damage repaired. But it is time for us earnestly to consider how long a people living under democratic institutions can, without irreparable injury to their character, as well as to the working of their free institutions, maintain a policy inducing a great money power to subsidize for its own enrichment one or the other of the political parties, and putting up a stake of untold millions in the general elections, to be won by that money power through the victory of the political party allied with it.

Carl Schurz.