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States. In 1850 there were 872 banks; in 1860, 1562; while banking capital increased from $227,500,000 to $422,000,000. Vast sums were expended in railroad building during the decade—21,613 miles being built, as against 904 miles between 1842 and 1846.

Protective duties on wool depress the price of domestic wool and injure wool-growers. The reason is that when the supply of wool-growing countries is shut out of our market, it floods Europe at so low a figure as to enable European manufacturers to make the finer class of goods and sell them to us, duty paid, at a lower figure than we can afford to make them. The price of American wool has not risen with higher tariffs.

By the time Protection pays the penalty of over-production, it makes it too costly as an experiment. James Buchanan said in 1846:—"Our Domestic Manufactures have been saved by the election of James K. Polk from being overwhelmed by the immense capital which would have rushed into them for investment, and from an expansion of the currency which would have nullified any protection short of prohibition."

So Hon. James Lloyd, of Massachusetts, said in the Senate in 1820:—"I am interested in manufactures. I own stock in one of the cotton-mills running in my State. It regularly pays good dividends and is likely to do so continually if the tariff is let alone. But if you pass the bill, hundreds of such factories will be erected, till the market is glutted with their fabrics, when prices must fall and our concern very possibly be broken down."

Of the year 1860, the end of the free-trade era, General J;^mes A. Garfield said :—" I suppose it will be admitted on all hands that 1860 was a year of unusual business prosperity in the United States. It was at a time when the bounties of Providence were scattered with a liberal hand over the face of the Republic; it was at a time when all classes of our community were well and profitably employed; it was a time of peace, the apprehension of our great war had not yet seized the minds of our people; great crops, north and south—great general prosperity—marked the era."

Hon. Caleb B. Smith, President Lincoln's Secretary of the Interior, says in his report:—" Without any special stimulus to growth—depressed indeed, during the years 1857 and 1858, in common with other public interests by the general embarrassments of those years, and with a powerful competition in the amazing growth of manufactures in Great Britain and nearly every other nation in Europe—the manufactories of the United States had nevertheless augmented, diversified and perfected in nearly every branch and uniformly throughout the Union. Domestic materials, whether animal, vegetable or mineral, found ready sales at remunerative prices and were increased in amount with the demand, while commerce and internal trade were invigorated by the distribution of both raw and manufactured products. Invention was stimulated and rewarded. Labor and capital found ample and profitable employment, and new and unexpected fields were opened to each. Agriculture furnished food and materialsat moderate cost,and the skill of out artisans cheapened and multiplied all artificial instruments of comfort and happiness for the people. Even the more purely agricultural States of the South were rapidly creating manufactories for the improvement of their great staples and their abundant natural resources. The nation seemed speedily approaching a period of complete independence in respect to the products of skilled labor, and national security and happiness seemed about to be insured by the harmonious development of all the great interests of the people."

The principle of free trade has never been applied absolutely in the United States. No politcal party has been brave enough to dare the trial. Yet the arguments in favor of free trade are all invoked when the protective system is attacked, and even when the design is to lay down tariff laws embodying only the doctrine of tariff for revenue. This has been strikingly exemplified in the history of tariff discussion subsequent to 1887, which was the date of Mr. Cleveland's celebrated message announcing the necessity for "Tariff Reform." His main argument was an elaboration of the idea that tariffs were a source of burdensome and unnecessary taxes, bearing as directly on the people as any other taxes, and so to be gotten rid of as speedily as possible.

So also, in these later discussions over tariff reform, the free trade doctrine that tariffs fostered trusts was given unusual importance. Perhaps this argument was never used so effectively before, for it was given strength by the fact that trusts had grown in number and extentout of all proportion to the legitimate needs of corporate or partnership enterprise. Whether free trade, or even tariff reform, would prove a panacea for the evil of trusts, was not argued in an historic or even economic sense, for it was taken foi granted that since their presence in a time of protection was due to protection, therefore absence of protection would work their destruction.

Again, the argument that free trade meant for this and all countries an open and, therefore, more profitable market, was given especial significance in that economic revolution which came about through*the passage of the Wilson tariff bill. It will be remembered that that bill as originally drafted went as far as its supporters dare go in the application of free trade principles, without trenching on the revenues of the government. It might be mentioned that, as the sequel proved, they went further than they intended to go, for in its practical workings the Wilson act failed to produce its share of public revenue. But the point in this connection was that it was to open the markets of this country to other countries, and, by parity of reasoning, the markets of other countries to this one. As this argument never before had such opportunity for direct and able support and for full and free application,economists as well as the interests affected will await with anxiety its practical results. And this anxiety will be intensified, and economic study greatly advanced, by coupling with those results the fact that in the application of the argument of open markets to the Wilson tariff bill, a part of the aim, and an aim wholly accomplished, was the destruction of the principle of reciprocity as found incorporated in the McKinley Act of 1890. This principle, at the time of its incorporation into the above act, was said to be a step in the direction of free trade. The arguments in its favor were certainly analagous for a certain distance, to those used by free traders in favor of ope:i markets, and in principle the two aims to be accomplished are nearly identical.

PRINCIPLES OF PROTECTION.

The doctrine of protection starts without a doubt as to nomenclature. As a principle, it admits of no exception in the first chapters of the history of every commercial nation.

The commercial nation never existed that did not, at first, protect itself. So astute, refined and far-reaching has commerce become, that no nation which refuses to protect itself can ever hope to test its fitness for commercial supremacy, or independence, much less obtain it.

The same is true of industrial and manufacturing independence, both of which imply commercial independence, the moment transit is acknowledged as a subject of protection.

Nature supplemented by art made American transit supreme, or nearly so, when ships were of wood. Art combined with nature made English ships supreme, when ships came to be of iron. But nature is still on our side as to iron. Add the art of England to American nature, and transit will have its old supremacy. Art is protection and protection art.

A protective tariff provides revenue for the government in a better way than any other kind of a tariff. England levies duties for revenue only. They fall on two classes of articles; first, luxuries; second, on articles that cannot be raised or produced profitably at home and cannot come into competition with home productions. It so happens that the latter class of articles embraces tea, coffee and many things which rank as necessities among the common people.

Protection omits duties, when not required for simple n6

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