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portant, the development of commercial relations and community of interest between different lands."
"MOST FaVORED NATION" CLAUSE.
Very often the parties to commercial treaties stipulate that each of them shall enjoy all the advantages that may come to, or be secured by, the other through a reduction of duties between it and still other countries. This has come to be known in diplomacy as "the most favored nation clause" a. term which grows more familiar each year. It stands thus: —England agrees to abolish, or reduce to a minimum, her duties on French silks, as a concession to France for so reducing, or abolishing, her duties on English cottons. But at the same time England says to France, and it is agreed, that if you succeed in getting similar terms with any other country by reason of a desire for your silks, we expect our cottons to follow in the wake of your silks. The favors your silks secure for you must extend to our cottons. So France says to England, and it is agreed, that if you succeed in getting similar terms with any other country by reason of a desire for your cottons, we expect our silks to follow in the wake of your cottons. The favors your cottons secure for you must extend to our silks. Thus " the most favored nation clause" may suffice to carry the favorite product of a highly industrial and ingenious nation, with commercial facilities, into every mart of the world.
This extension of, and refinement on, the principle of reciprocity as established by commercial treaties, is only an enlargement of the spirit of advantage between nations. Clearly, nothing is given without something, and the like, is expected. As nations do not trade for pure love of the thing, something more is expected than is given, if not directly, at least indirectly. But this is protection, says the protectionist, for each nation seeks to advantage itself, and it matters not whether it proceeds on the principle of denial or concession. Not so, says the free-trader; it is free-trade, for the moment you concede the principle of concession you repudiate that of denial, or, in other words, discrimination by duties. And so economists bandy theories, and prove to the world that their science is weightier in words than worth.
But while commercial treaties have been the usual, almost the sole, means of establishing reciprocity, or reciprocal trade, between commercial nations, they have been slow and cumbrous of formation and operation, and always costly of negotiation. They have proved of doubtful construction and uncertain worth, except where the inducement to make them was very great, and the power to enforce them reposed in the contracting parties. New and weak countries were placed at a disadvantage by them, even if the inducement to make them existed, and, indeed, no such inducement could exist till a country was sufficiently advanced to have something substantial to offer for what it desired to receive.
POSITION OF THE UNITED STATES.
As long as the United States was going through its early experiments with free-trade and protection, there was hardly a thought of reciprocity or reciprocal trade as we have come to understand it. In all the early arguments respecting the advantages of protection by means of duties on foreign imports, the central thought was that protection was necessary in order to foster infant industries. There was hardly any diversity of opinion about this. Statesmen of all parties and economic schools joined in the thought and sought by speech and vote to establish the principle. Politics did not seriously tinge a tariff debate as long as the idea was dominant that the infancy of industry required the protective hand of the Government. In this the most pronounced free-traders had the sanction and support of the English economic writers, who, almost without exception, admitted the doctrine that in order to establish and foster infant industries, protection was right in law and morals. England had universally and persistently applied the principle, till she had grown rich, powerful and independent by means of it.
It was not until 1824, when the old arguments respecting the uses of protection began to be tinged by partyism, that attention began to be turned seriously to the advantages of reciprocal trade. The country was then sufficiently advanced to make it a question in the minds of statesmen. Free-traders, the very ones who had all along favored protection as a means of fostering infant industries, now turned their arguments against protection in general. The peculiar condition of the country, divided into a strictly planting class, with unpaid labor at its command, and a manufacturing, commercial and more diversified industrial class, with only paid labor at its command, contributed to the change of sentiment and the tone of argument. The planting class, with its unpaid labor, saw a menace in the growth of manufactures and commerce, with their paid labor. The system of free, paid labor was a harsh contrast with, and a standing threat upon, the system of slave, unpaid labor. Established manufactories and profitable commerce were proving a source of wealth, population, importance and comfort, which might in the end overshadow the planting class and its geographic section, even if it did not endanger the slave institution.
Therefore the free-traders injected into their opposition to protection the argument that protection had already done its legitimate work in grounding and fostering dy. young industries of the country, and was no longer necessary. They said it was a stretch of power any how on the part of the government, and was no longer justified. They said that inasmuch as it could be of no earthly use to the planting sections, it was unfair for the nation to legislate in the interest of the manufacturing and commercial sections. They attacked the constitutionality of tariff legislation. As time went on, and the issue of slavery became more a matter of question, the tariff debates brought out in stronger lines the above arguments. The doctrine of free-trade took passionate and almost sectional turn. It came nearer than ever to cleaving and dividing politics. Calhoun did not hesitate to declare that the further fostering of industries by means of protection would destroy the planting class and the institution of slavery; that the object of free-trade, as he advocated it, was to strike a blow at paid labor and the prosperity of the manufacturing classes; that the tariff system was so unfair, so unconstitutional, such an infliction on the States of his section, as to warrant nullification of tariff laws, and if this did not provide an escape from their operation, then secession would be justified.
THE NEW PROTECTIVE IDEA.
These arguments were so ably maintained, and the situation became so serious, as to force the protectionists on to new ground. It is no disparagement to their numbers or ability to say that they could no longer maintain themselves on the plea of protection to infant industries—the common ground of all statesmen in the beginning. They were compelled, or perhaps the time had arrived for it, to broaden their ground, and to make it more secure by a new declaration of protective principles by, one may say, a new departure in political economy. This became the dawn of those doctrines which, elaborated by time and modified by circumstances, comprise American protection as enunciated by modern statesmen, and as they seek to embody them in protective legislation.
The gist of these doctrines is, that as labor constitutes a very large per cent. of the cost of an article, the true measure of protection is a duty which will cover that element of cost, and thus save our labor from competition with the lowpriced labor of foreign countries. Along with this goes the doctrine that the free-list may safely embrace only those articles which are impossible of production with us by reason of our soil, climate and natural advantages.
POLICY OF SUBSIDY.
Abreast of this doctrine is another, daily growing more momentous, and one which has been enforced by the fact that our genius and facilities tend to overcrowding in our own markets; it is, that the very best protection that can be afforded in such case is the establishment of steamship lines to carry our surplus products to those who need them most, or to those of whom we buy most and to whom we have to pay most. This has been a favorite and universal means of protection with all commercial countries, and it has been employed at great outlay on the part of those countries in the way of pay, or subsidy, to said lines, first in order to start them, and second in order to maintain them. But this means of protection has not yet been reached in this country. Subsidy is a word our people cannot yet abide. No theory of protection that embodies the word directly has ever yet been framed in this country that could withstand the assaults of its opponents. The reason is that it appeals too directly to the capitalistic or monopolistic spirit and