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IN THE long history of tariff legislation in the United States, that of the winter of 1929-30 should become classic because of the undisguised revelation of the crass selfishness and rottenness of the whole tariff-making business, and the absolute demonstration that both the Republican and Democratic parties are now exactly alike in their yielding to special privilege. The cancer of tariff bargaining and the bestowing of special governmental favors upon protected industries has eaten as deeply into one as the other. There was a time when tariff bargaining was at least done behind closed doors with some decent respect for appearances. Now they have thrown off all concealment. When ten United States Senators … vote against an increased sugar tariff on one occasion and defeat it, and a few weeks later swing round and vote for it, the public has a right to ask whether they were paid and by whom. The payment, of course, is not cash. The explanation is simply a swapping of votes by one man in exchange for the votes of another man in favor of the commodities which the first desires to have protected. …

No longer is there the slightest consideration of any economic principle. There is no pretense that there is anything scientific about it. The Democrats have cast overboard once and for all the principle upon which Grover Cleveland fought in two elections - that there should be a tariff not for protective purposes, but for revenue only. The Republicans have discarded one of their old arguments after the other. They no longer talk about the need of protecting infant industries. They have forgotten their previous assertions that the Tariff is necessary to maintain an American standard of living. They have agreed with President Coolidge that Americans do pay the tariff taxes, whereas the older Republican statesmen for generations contended that "the foreigner pays the tax". We have even come to witness a situation in which some of the newest American industries, like the automobile industry, desire little or no protection, whereas some of the oldest and best established and most profitable ones are demanding more and more government aid.

What a Protective Tariff Really Is

Whenever Congress votes a protective tariff: it puts the government into partnership; with the producers in that industry, whether they are manufacturers in Connecticut, or wool-growers in Wyoming. When the government, through Congress, fixed a tariff for a business it regulates the profits of that industry, thus becoming a partner in the industry, and a most influential partner, since it guarantees the profits. Under our system of tariff-making, it guarantees profits to industries whether they are weak or strong, old or new, honest or corrupt in their management, efficient or inefficient, necessary or unnecessary. The manufacturers and the agricultural producers thus favored often frankly admit there is absolutely no economic justification for certain of the enterprises for which they ask government support. …When they go to Washington seeking help their attitude is that the government owes them a living to the extent of putting on a protective tariff, which will admittedly raise the cost … to every man, and women, and child in the Unites States.

As a matter of fact these producers were not asked by the United States Government to invest capital in … growing. They put their money in at their own risk and they are ethically no more entitled to governmental aid than the owners of a railroad which is not paying, or of a newspaper, or any other American enterprise which is not making money. The difference is that the manufacturers, through organization, and through a misunderstanding on the part of the American people of the role that the tariff plays in their lives, are enabled year after year to win great favors from Congress by the political influence that they wield, and by the belief that in some way or other a protective tariff means the employment of a large number of workers who would otherwise be without jobs. This whole presumption is false because the keeping alive of an economically unsound institution is a wrong to the entire economic life of the country. No industry which cannot stand on its own feet should be kept alive; not even the excuse that a country must be self-contained in war-time is valid when one considers the comparatively brief periods of our wars and the long years of peace during which unnecessary or unsound business enterprises are maintained at the expense of the entire tax-paying body.

Here is where the crux of the thing lies. Whether he knows it or not, every American who buys a lump of sugar contributes to the maintenance of the beet-sugar growers. In their case it must be pointed out that profits have been very great. …It is the height of economic injustice to favor these people when there are other useful industries that struggle along without governmental aid. It is political and social, as well as economic injustice, that the bulk of the American people should be taxed to support a privileged few, and insure them vast profits. It is a fact that most of the great American fortunes have been created by the protected industries, from the profits of the mills, the steel and iron plants; while all the rest of the profits from our great enterprises are divided to but a small extent, if any, with the working people, and go to the stockholders of the several concerns.

For a great nation to lay down the principle that men investing their capital in certain enterprises shall have government aid in swelling their profits, in exempting them from the risks of competition under what is declared to be a system of "rugged individualism" and competitive enterprise, is as inconsistent as it is immoral. It makes nonsensical the pretence that Americans are equal in the face of their laws and their government. It is a direct incentive to the use of political influence to obtain private favors. It has reduced the legislature of the United States to a machine for doling out enormous financial privileges to the influential, and especially to those who make large campaign contributions to the Republican and Democratic parties without, as has already been pointed out, paying the slightest regard to the condition of the favored industry. …Any tariff-favored business may be grossly inefficient, as crooked as a ram's horn, as wasteful as any newly-rich plunger, as extravagant as a multimillionaire who cannot hope to spend the whole of his income - none the less, if influential enough and in the manufacturing business, it can obtain the government's aid to fix its profits. The corruption of this protective system has corroded the moral fiber of the entire country, besides demoralizing the two great political parties.

Rich Man, Beggar Man

The … growers already cited are not the only representatives of a prosperous industry asking for tariff favors. …Our poor downtrodden steel business again asked for aid, although since the last revision of the tariff in 1922 the profits of the United States Steel Corporation have [soared]. …

A Treasury report declares that our chemical industry is now "the most prosperous" of all the large American businesses. Yet on account of its infancy and its weaknesses it secured in the new bill, as it came from the House of Representatives, more than ninety increases in the tariff, some as high as 700%, while only fifty decreases in chemical tariffs were made, all of them of no special importance. …These are the poor starving concerns which have gone limping down to Washington, out at heel and in rags, begging for more aid from Uncle Sam lest they be utterly ruined by this devastating foreign competition which has only allowed the DuPonts to increase their profits five-fold in six years. What a dreadful picture of the harm that foreign competition is doing to us!

It is an extraordinary spectacle, this one of manufacturers who denounce anyone who suggests that the government dabble further in private business, rushing to Washington with demands that the government enter their private business. These tariff barons are among the first to declare that competition is the life of industry, and in the same breath they demand that Congress for their benefit shall choke off international competition; for them the principle of free competition is a sound economic one which stops, however, with each boundary of our country, North, South, East, or West. So is truth limited and principle restricted by the American flag!

As for the cotton tariff, one of the greatest experts in the business declares "its cost to the public is not less than eight hundred millions a year in the higher retail prices which the American public must pay over the price paid by the people of other countries of comparable standing. The schedule is fraught with camouflage and tricks. Yet the average wage paid in the best textile State in the Union is but $15.49 per week." This is what an American laborer is supposed to support a family of five persons on… What becomes of the historic tariff shibboleth that the tariff creates higher wages?

That any radical decrease of tariffs in the textile and other industries would mean temporarily grave difficulties for the laborers is beyond question. Fortunately, there are numerous ways to readjusting workers to new conditions - incidentally that does not take place when a new invention like the automobile wipes out half-a-dozen established industries. Thus, there are available unemployment insurance, free public employment agencies, public works, vocational guidance, outright aids, other measures to carry over displaced workers all of which are favored by such liberal organizations as the League for Independent Political Action. Not even the most zealous Free Trader believes that the system could be introduced except gradually and over a term of years.

The Tariff and the Farmer

The greatest of our contemporary humbugs is undoubtedly the effort being made in Washington to convince the farmer that if he can only be drawn within the charmed circle of protection all will be well with him. The truth is that yon cannot increase agricultural prices by putting tariffs on foodstuffs without economically injuring everybody, including the farmer, except in those rare cases where the fanner raises everything that he eats. More than that, it is not foreign competition which in any degree keeps down the prices that our farmer gets for his products, but his own overproduction, the fact that he has a surplus beyond what he can sell to his fellow-Americans.

Again, his trouble lies in faulty and costly marketing methods, domestic competition, and his inability to organize, as manufacturers can and do organize, for the control of domestic markets. How foolish, therefore, the theory that if the tariff on agricultural products is put up the rest of America will be cut off from buying an occasional egg from China, or a few bushels of corn from the Argentine, and that in some mysterious way everything the farmer sells will be paid for at a higher rate fixed by the tariffs on foodstuffs! As for the farmers' exportable surplus, that is, the amount he produces beyond the needs of his fellow-citizens, the instant our tariff goes up it becomes that much harder for the foreigner to export goods to America, and therefore he will be able to buy fewer American goods in exchange. Thus, bringing the farmer within the charmed tariff circle means that he will pay more himself, and that it will be harder than ever for him to sell his goods in the world markets.

What the farmer needs is not that illusive and impossible thing, parity in tariff obstruction, but a reduction of the existing duties. When he gets up in the morning he gets out of cotton sheets and woolen blankets upon which there is a high tariff, and puts on woolen underwear and a woolen suit, the tariff on which, if imported, will be [so many cents] a pound. The hat which his wife wears is slated to be protected …, her hose…, her underwear if cotton, …She drinks coffee for breakfast out of an aluminum pot taxed … in order that Mr. Andrew Mellon, Secretary of the Treasury and the owner of the aluminum trust, may still further increase his enormous fortune. Her coffee, crockery, table cloths, glasses, and cutlery are all highly protected, and so is practically every single item which goes into the construction of a house, barn, or silo.

Finally, we have expert testimony on this question of the tariff and the farmer from Mr. Edward P. Costigan and Mr. David J. Lewis, former members of the Tariff Commission, who have declared that it is not inclusion in the tariff, but tariff reduction all along the line which will alone help the farmer, aside from improvements in cooperative selling and marketing. Every time you reduce or remove the tariff on some article that the farmer uses you give him a substantial lift. Every time you put a tariff on any single article that he uses in his home or in his field, you attach another chain and ball to his legs.

The clearest instance of this is what happened in 1922 when Congress raised the aluminum duty for Mr. Mellon… The trust immediately raised the price of the metal to every American consumer by [the same amount]. …This is what takes place in every case where the tariff is raised|. The manufacturer says that he must have the increase in order to keep out foreign goods, but the minute the tariff is put on he takes advantage of it to gouge his American customers out of the difference between his old prices and the additional percentage of the new tariff. In most cases it is not the desire to keep out foreign competition which actuates the manufacturer to increase his charges to the American public.

Effect of the Tariff Upon the Political Parties

The worst effect of the tariff upon the Republican and Democratic parties today is that it has made of Congressmen and Senators petty pilferers of the Treasury in behalf of their local interests. Democrats and Republicans alike have made of the tariff the parochial issue which General Hancock, when a candidate for the Presidency in 1880, said it was, by frankly voting on tariff issues with an eye single to the alleged interests of their own industries.

Naturally men such as these are debarred from attacking the rotten tariff system when they consent to stand of its iniquities. So there is obviously no salvation to be hoped for from either of the great parties. What the country needs today is a new party, whether it be a third party or a fourth party, which shall take a clear stand against special privilege of all kinds, and especially the corrupting special privilege of the tariff.

We need a new party for this issue alone, one that will start free and clear from tariff entanglements; one whose representatives will be pledged to regard themselves as spokesmen of the interests of the entire people and not as the mouthpieces of the patron saint of some local interest, as opposed to the welfare of every citizen of the country. With the abandonment of the tariff-reform issue by Governor Smith in his campaign for the Presidency, and the acceptance of the protective principle in the Democratic national platform in 1928, it is obvious that Democrats and Republicans now stand upon exactly the same tariff plank. The only hope of freeing the American people from this form of privilege and extortion lies in the creation of a new political organization.

The Tariff and Foreign Relations

There remains to be considered one more phase of this whole tariff swindle, and that is the international aspect of it. Nothing causes more friction than hostile tariffs except huge armaments. Many years ago Richard Cobden, the great English freetrader, wrote thus: "Free trade, what is it? Why, breaking down the barriers of separate nations; those barriers behind which nestle the feelings of pride, revenge, hatred and jealousy, which every now and then break their bounds and deluge whole countries with blood." He advocated free trade because he was certain that it would "unite mankind in the bonds of peace." Precisely so did it unite the various States of Germany within the boundaries of the old German Empire. Precisely so has it united the people of the forty- eight American States.

But look at Washington today and what do you see? Why, during the winter of 1929-30 twenty-six foreign nations protested against the new American tariff, protested officially and with vigor. In Canada and the Argentine there have been vigorous measures on foot for reprisals the minute the new tariff bill becomes a law. The protectionist says that that is no business of theirs; that our tariffs are our concern alone, and nobody else's. It is the foreigners' business. Every time that a market is closed to them it makes living harder for their people, particularly during this after-war reconstruction period in Europe. Every time that a tariff is raised in the United States it is made the excuse for the decreasing of wages and the degrading of standards of life in foreign countries by the employers who plausibly say that they must still further decrease their costs in order to surmount the latest American tariff barrier.

Until the final draft of each new tariff bill is published dozens of industries in France and England, in Italy and Germany, in the Argentine, Japan, and elsewhere, will not know what the future has in store for them. In the case of our former allies and Germany, it is as stupid a policy as it is cruel and monstrous, because we are compelling them to pay us reparations or return to us the great sums we loaned to them during the War. How can they pay us if we put the tariff up further? We insist that they shall pay us and they can only pay in goods - for nations do not and cannot pay their debts in cold cash and it would hurt us gravely if they did by unsettling our own commerce and finance. And then we make their paying us what they owe us just as hard for them as we can by putting up still higher walls against their exports.

To be concrete, the Vancouver Sun has been urging a tariff wall against the United States saying, "Mackenzie King will be unworthy of the leadership of 10,000,000 Canadians if he allows this challenge to go unanswered." The Politiken of Copenhagen declares that all Europe is behind the French fight against the American tariff. The Argentine is openly threatening to put up its tariffs… It is our tariff as much as anything else which has suggested to the Foreign Minister of France, M. Briand, that there ought to be a European tariff union to lead the way to a United States of Europe.

Three years ago the leading bankers of the world, including our own J. P. Morgan and five other Americans, signed a manifesto demanding that the building of tariff walls cease. Yet our doctrine continues to be "to the devil with your neighbor". So you have the spectacle of each country going counter to fundamental economic law, and building a huge barricade against the free movement of trade. With every tariff wall there is built up a wall of hatred, ill-will, and distrust. In this ignoble competition the great American land of liberty, with freedom of trade within its borders, takes the lead so far as the rest of the world is concerned. Nearly ninety years after the British people won the battle to take tariffs off food, which had reduced the masses nearly to starvation, we are putting tariffs on food with the absurd idea that in some way or another this will place the farmer on an equality with the protected manufacturers.

How long will the American consumer continue to be exploited in order to enrich the American manufacturer who quadrennially frightens his employees into voting for the Republican party by the threat that they will be without work if there is tariff reform? There can be no doubt that if the American people were given the opportunity to pass upon this question in a political campaign in which it was the controlling issue they would vote to put an end to the greatest conspiracy against democracy, one of the greatest sources of special privilege and political corruption that we have under our flag. The hour calls for a new party to give them the chance.