THE DALLAS TARIFF AND ITS METHODS.

367

increase of duties in a conciliatory spirit. The tariff of 1842, one of the best and most protective ever enacted, was adopted, and no more threats of secession were heard. The prosperity that free trade was to bring to the South had not been achieved, and the preservation and extension of slavery now absorbed the attention of that section. The new policy bore the old fruits; lanquishing industries were quickened into life; with the growth of the power to purchase, foreign commerce revived; government reaped a large revenue, and the finances of the country were again in a satisfactory state. The home production of great staples was multiplied, and the prices of many of them fell. A better and more trustworthy currency came into circulation.

Then, in 1846, the policy was changed once more, and that of military aggression upon weaker neighbors at home succeeded that of industrial resistance to more powerful nations abroad. England, after some five centuries of rigid protection, had adopted the policy of free trade, and was preaching it with all her eloquence to the rest of the world. Mr. Robert J. Walker, secretary of the U. S. treasury, was one of her disciples. "Let them alone," he told Congress, "is all that is required of man; let all international exchanges of products move as freely in their orbits as the heavenly bodies in their spheres, and their order and harmony will be as perfect, and their results as beneficial, as in every movement under the laws of nature when undisturbed by the errors and interference of man." But even a Democratic Congress had not quite forgotten the past, nor broken so far with the Democratic precedents of 1824-1828. Dallas tariff of 1846 was still protective. It adopted, indeed, the vicious method of imposing ad valorem duties, while those of 1842 had been specific; and it taxed a host of articles that better tariffs, before and since, put into the free list. But it still imposed duties of from 40 to 20 per cent. upon the great staples of manufacture. Had these rates been calculated on the average price of the several articles, and then made specific at that figure, the effect would have been far better. For ad valorem duties make the home market far more dependent

The

upon the fluctuations of the foreign market, and in the long run bring it under the power of the trader and the foreign producer. Thus during the years 1846-9 English iron was cheap, selling in New York at $40 a ton, and largely driving the home producer out of the market. One-third of the furnaces and iron-mills of Pennsylvania ceased operations soon after the tariff was enacted, many being sold out by the sheriff; the rest were sorely crippled, and the amount of their production greatly diminished. The iron men met, and in a memorial, prepared by Stephen Colwell, expostulated with Congress, showing that the ruin, which was impending over their industry, would be a costly injury to the whole country. They predicted that if home competition were out of the way, the nation would soon learn that the price of British iron was fixed, not by the cost of production but by the demand made upon that market, and the dependent condition of their customers. Their remonstrances were unheeded; the work of destroying a great industry went on, and its traces may be seen in the old furnaces of the Allegheny ridges. In 1851-4, when home competition was virtually out of the way, iron sold for $80 a ton, whereas native iron had been furnished for $60. When English iron was cheap, the duty was also low, and the native producer was driven from the home market. When it rose in price, the duty rose also, and enhanced its value to a degree that greatly checked its consumption. But this rise gave no security to the home producer to increase his turn-out, or to the capitalist to begin iron-works. Neither could tell how soon a real or an artificial cheapness might destroy his market again. There was no security for the home producer, while the home consumer was fleeced to the uttermost.

The Dallas tariff lasted till 1857, and inflicted injuries upon nearly all our industries, preventing the influx of capital in that direction. To compensate for this we were to have an unlimited foreign market for breadstuffs since England had repealed the corn laws. The more we bought of her, the more we must sell her, as "commodities are paid for with commodities." The commodity with which we chiefly paid was gold. The tariff

THE SLAVE-HOLDERS' POLICY.

369

increased the dependence of the country upon both the buyer and the seller of foreign markets. Its bad effects were alleviated by the discoveries of gold in California, which gave an impulse. to all kinds of business. Its reconsideration was prevented by the all-absorbing interest of the slavery controversy. It was the settled policy of the slave-holding interest and their friends to "prevent the increase of manufactures, force the surplus labor into agriculture, promote the cultivation of unimproved western. lands, until provisions are so multiplied and reduced in price that the slave can be fed so cheaply as to enable the South to grow sugar at three cents a pound. . . The Western farmer, the Southern planter, and the English manufacturer became united in a common bond of interest, the whole giving their support to the doctrine of free trade (Eliot's Cotton is King, Augusta, Ga., 1860). A Congress controlled by this interest reduced the duties twenty-five per cent. in 1857. This was not a sudden change of policy, but the crowning of the edifice that had been building for eleven years past. It at once intensified all the unwholesome tendencies in our commercial and industrial life; turned capital once more from production to speculation, and led to a large and varying increase of importations. Another great panic followed through the collapse of unsound enterprises, and carried with it many that were sound. Every one had been buying at any price; every one made haste to sell, and found no customers. Lands in what was then the far West, by whose purchase fortunes were confidently expected, were sold by the county to pay the taxes. The treasury was again depleted, and years came in which it must borrow the means to carry on the government.

In 1860 the Republican party, composed very largely of the old Protectionist party, won its first national victory, and broke, for the third time in sixty years, the Democratic succession of Presidents. In 1861 the war for the Union began, and the Morrill tariff was enacted, and up to the present writing that policy has been persisted in by the nation. Not that that tariff,

either in its original form or as subsequently modified, is satis

factory in its application of general principles. It has been made more satisfactory, indeed, by fairer protection to the woollen industry, and by the removal of duties that had been laid upon articles that cannot be produced at home. But in some other directions-notably in the reduction of duties upon ironchanges have not been for the better. Another great defect in our financial system was the heavy internal revenue duties levied until after the war,—duties that took away with one hand nearly all that was given with the other.

When the war began American industry was unable to furnish all the materials to arm and equip the national forces. Steel and cloth, and blankets, had to be got from England; and fortunately the seas were open. Long before it closed all these elements of the national defence were produced at home, of as good quality and in quantities large enough to meet any demand. But from the very start to the close of the struggle the North reaped the advantage of the possession of that diversified industry which had perpetuated itself in the face of so many discouragements, and now sprang into vigorous life;-while the merely agricultural South was continually hampered through the absence of manufactures, of the middle class who sustain them, and of the industrial habits which they cultivate.

The result of the persistence in the nationalist policy was summed up in 1869 by Mr. David A. Wells, U. S. Commissioner of Internal Revenue: "Within the last five years more cotton spindles have been put in operation, more iron furnaces erected, more bars rolled, more steel made, more coal and copper mined, more lumber sawed and hewn, more houses and shops constructed, more manufactories of various kinds started, and more petroleum collected, than during any equal period in the history of the country. And this increase has been greater both as regards quality and quantity, and greater than the legitimate increase to be expected from the normal increase of wealth and population."

Again, in 1869, he says in his report that "to review the main features of our national experience in relation to capital and industry for the past year is but to chronicle and affirm

MR. WELLS PRO AND CON.

371 anew the apparent continuance of that same wonderful ratio of progress and development which, with the exception of a period of war, has especially characterized the annual history of the nation for the last quarter of a century." (The form of this statement shows that the impression produced on Mr. Wells by the prosperity of the nation under a protective policy was so brilliant as to efface all recollection of the wretched and disastrous experiences of 1847 and 1857, and of the dead-alive decade that intervened between them.) He estimates the value of the nation's property in 1860 at 14,183 millions of dollars; and the increase in the nine years that followed, 9217 millions of dollars; and calls attention to the fact that the former sum represents the accumulations of nearly a quarter of a millennium; the latter of a single decade, four years of which were occupied by a wasteful war. The products of all our industries were worth $3804 millions in 1860; but $6825 millions in 1869.

Mr. Wells has changed his mind as to the benefits of a protective tariff since he wrote this. He bases his dissent (1) On the (supposed) fact that much as wages have advanced under protection, they have advanced still more in Europe if measured by their purchasing power. The comparison is unfair because every leading nation in Europe, with the partial exception of England, is a protectionist nation. England and most of the others would have a varied industry under any system, while only under protection would we have it to such an extent as to produce equilibrium of the industries. And "the proof of the pudding is the eating." Skilled labor emigrated from England to America-flying from Free Trade to Protection-since 1861 as never before. If wages rose in England, it was to keep labor at home. (Mr. Wells bases his conclusion that "while the rich are growing richer the poor are growing poorer" upon a series of tables, which have been so carefully prepared from a large generalization of observed facts, that they show that a man with five or six children lives more cheaply and earns less than a man with four; but that if he be so unlucky as to have seven his family expenses are at once double what they were when he had six!) (2) On the decline of American shipping. When sailing-vessels, built of wood, were the chief means of ocean transport, the United States and the British American Colonies had great advantages in their construction, and largely monopolized the business. Since 1855 American ship-building has declined on both sides of the border, because steamships built of iron have taken their place, and for the construction of these the Clyde, the Mersey and Belfast have exceptional advantages. We have had for years complete free trade in all the materi