MANUFACTURES, TARIFFS AND TAXATION.

Time fails to bring relief to our manufacturing industries. The depression which, for a time, was confined to one or two branches is now becoming general, aud some anxiety is felt as to the result of the ordeal through which manufacturers are passing. We have repeatedly urged the importance of a limitation of production as the best means of bringing down the prices of labor and raw materials, and thereby enabling producers to meet the demand for goods at lower rates; but manufacturers appear to have regulated their production by the capacity of their works rather than by the capability of consumers; and the result has been that the supply of goods has been so far in advance of the demand as to place the determination of prices in the hands of buyers, causing upon many descriptions of goods very heavy losses. The cur rent high prices of agricultural products, and the comparatively low prices of manufactures, suggests the conclusion that the war has left us with an undue proportion of the capital and labor of the country employed in manufactures, and an inadequate proportion engaged in the culture of the soil. Breadstuffs and animal food are essential to subsistence; and, though scarce and dear, they have had to be bought in about the usual quantity; but under such circumstances a large portion of the community are compelled to forego the supplying of other wants which contribute rather to comfort, luxury or adornment. This condition of things ought to have had its due weight with manufacturers, inducing them to produce with a moderation corresponding to the ability of consumers. They had, however, profited largely through a special demand for war purposes, and, without making due allowance for the cessation of this special consumption, have regarded the past consumption as the measure for the present.

This condition of things manufacturers have thought could be remedied by the adoption of a tariff largely excluding foreign manufactures from our markets. Repeatedly, the tariff has been changed to suit these views; but, in the face of duties intended to be prohibitory, the imports have largely increased and the value of domestic manufactures has steadily fallen. Yet notwithstanding the demonstrated futility of this expedient for keeping up the prices of goods, the manufacturers appear to have the same confidence in it as ever; for it is again proposed to apply to Congress for an increase of the duties on imports. At a recent meeting of the Manufacturers' Association of Detroit, the following resolution was adopted, and measures were taken for securing the cooperation of other kindred societies in holding a national convention of manufacturers at Cleveland, in December next :

Resolved, That the tariff on importations of foreign manufactures should be revised so as to well protect home industry against the unequal competition of the cheap capital and cheaper labor of foreign countries.

It is much to be regretted that it should be in contemplation to make any further demand of this character. With nothing to show in the way of beneficial results from repeated acts of protective legislation within the last five years, it is somewhat bold to ask Congress to repeat this fruit

less experimenting again. Changes in tariffs are always embarrassing to business; and, in the present deranged condition of trade generally, some care should be taken not to add unnecessarily to the prevailing embarrassments. While the utmost possible consideration should be shown for such an important branch of our national interests, it must be remembered that measures cannot be adopted which must be detrimental to all others. Consumers generally and the non-protected interests have the same right to be protected against high prices as the manufacturers have to ask protection against foreign producers. Already, the duties on imports are very high; and there is no saying to what extent this may be carried if this periodical pressure upon Congress is to be in every case yielded to. Should an increase of customs duties again be awarded and the change prove as unavailing as other additions to the tariff within the last five years, what reason is there for supposing that Congress would not be asked to grant a still further increase of duties? We think, it is a fair representation of public sentiment on this question to affirm that the people have become tired of these perpetual petitions for relief and desire that the manufac turers should be left to feel that in future they must depend more upon their own prudent management and less upon Congressional aid. The result of a further increase of the tariff would be to encourage an increased production, tending to keep up high wages, and to prevent a due decline in raw materials, the radical error in management which has contributed very largely to the present depression of this interest.

There is, however, a relief which it is within the province of Congress to afford, and which may be granted upon the soundest principles and with advantage to the community at large. The taxes upon domestic manufactures are a serious burthen to our industries, and ought to be substituted by other and less embarrassing imposts. The duties amount to a heavy percentage upon the cost of the goods; and, by the charging of profit upon the consequent increased price, by each dealer through whose hands they may pass, involve a material increase of cost to the consumer. On some products, made from materials already taxed, the duty is exceedingly oppressive; and in not a few instances the assessing of the duties is accompanied with much inconvenience to the manufactu rer, arising from disputes and delays; while, in all cases, the increase in the price of the goods tends to limit their consumption. There are large classes of goods which are consumed chiefly by the poorer classes, who have no choice but to reduce their purchases in proportion to the enhanced cost. In the production of some articles foreign materials have to be employed subject to a heavy import duty; and in such cases the taxation is duplicated, rendering it the more difficult for the manufacturer to compete with like foreign products. The duties on manufactures when first imposed, were only adopted as a ready measure for meeting the pressing exigencies of the war. They were defended. upon the ground of necessity; but what was done upon reasons of temporary expediency has been allowed to pass without repeal, and can now be abrogated only by strong pressure. The country would support the manufacturers in an effort to secure the removal of this class of imposts, for the very practical reason that the result would be to cheapen goods, an argument just as important to the manufacturer as to the public

at large. On the contrary, no sympathy can be expected from the people in an attempt to gain a further advance in the tariff, for the reason that the professed object of such a measure is to enhance prices. A movement for the removal of the internal duties on manufactures has this great recommendation, that it coincides with the reactionary tendency of affairs toward lower prices, and that by cheapening products it so far facilitates that reduction in wages which is at present the great desideratum of our industries.

ON THE TARIFF AND THE PRINCIPLE OF TAXATION.

BY CHARLES H. CARROLL.

There is an argument against a tariff on imports that appears to have escaped the notice of thinkers and writers on public economy. It is that, regardless of the tariff or taxes of any sort, general prices conform to the volume of currency: so much currency makes or measures so much aggregate price for all the property and service seeking to be exchanged. Hence if one commodity employs, by reason of a tariff, more of the currency than it would employ without the tariff, some other commodity of equivalent natural value must employ so much the less, and yield in price accordingly; the low price of the unprotected article underpaying, as much as the high price of the protected article overpays, its producer in relation to its natural value.

Thus suppose the normal value, as determined by cost and supply and demand, free of taxation, be the same for 1,000,000 bushels of corn and 1,000,000 yards of cloth, the price being $1 per bushel for corn and $1 per yard for the cloth, and the Government then imposes an import duty of 25 per cent. on cloth. The effect will be to raise the price of the whole 1,000,000 yards of cloth, embracing both the foreign and domestic article, to $1 25 per yard. Therefore, of the aggregate measure of $2,000,000 for both commodities, the cloth presents a demand for $1,250,000, and employs so much of the currency, leaving but $750,000 for the corn, so that the corn falls to 75 cents per bushel, and the farmer as compared with the manufacturer is one fourth underpaid.

For the sake of simplicity I waive all consideration of the profit on the cloth duty to the jobber and retailer, which is so much additional tax paid by the consumer. By the "protection," whatever it amount to, the farmer is wronged, and doubly wronged; once in the abstraction of currency that should go to the price of his product, and again in the abnormal price that, as a consumer, he must pay for the cloth.

This distribution of the currency is an unavoidable result of the law of value in relation to money; for whatever may be the character or amount of the currency it can make only the same exchanges as a like sum of money, and it must, as the commou instrument of exchange, follow the same channel of local circulation that would be occupied by a like volume of monev—i. e., gold and silver.

The money of the world distributes itself among the nations according to the desirableness which constitutes the value of their respective pro

Juctions as objects of exchange, with no regard whatever to local taxation. It is attracted by low prices and repelled by high prices; anything tending to high prices drives it away.

A nation or a community cannot therefore increase its money by increasing its taxes or its expenses; it can do this only by increasing its capital, of which money forms a part, and it cannot permanently maintain a volume of mixed currency greater than its capital naturally demands of pure money for its instrument of circulation. Since, therefore, provision cannot be made for an increase of a nation's taxes by an increase of its money, or currency, the only way in which the currency can be provided to pay the additional price of an article unequally taxed is to take it from the price of some other article, and thus rob Peter to pay Paul. Were money capable of increase by tariff, or other taxation, industry and enterprise would lose their significance, and the accumulation of national wealth would be a mere matter of legislation, an idea that carries its refutation along with it.

It may not be possible to know the precise equivalents that are disturbed in their relations by a tariff, or by any other unequal tax. Of course there are many more bushels of corn than yards of cloth circulated and consumed in this country, and any reasonable estimate of the relative value of the corn and cloth that change hands in commerce is perhaps impossible. If 10,000,000 bushels of corn are equivalent in exchange value to 1,000,000 yards of cloth, then corn would lose but 2 cents per buskel of its normal price by a tariff of 25 cents per yard on cloth. All that I propose to show by the foregoing example is that equivalents in circulating capital are perturbed, and thrown out of their natural and mutually advantageous relations, precisely to the extent that the tax upon them is unequal, ad valorem. To that extent the abnormal is cherished and rewarded at the cost of the normal produce-to that extent a tax levied to favor the production of an article that would not be produced without it must be paid out of the proceeds of some other article not so favored, the production of which is natural to the soil and industry of the country.

The amount of duties on imports gives no sort of indication of the pressure of a protective tariff on the industry and earnings of the unprctected classes. The whole of the annual imports does not probably exceed one-twentieth part of the money value of the annual productions of the United States, leaving out of view the immaterial value or services that leave no enduring product capable of being exchanged, which are, equally with the material values, subjects of indirect taxation through duties on imports for the benefit of the privileged classes. Thus the pay of the clergyman, the teacher, the lawyer, the physician, the actor, &c., is so much the less by reason of the abstraction of currency to provide extra pay for the producer of that which could be imported for less than the cost of the home product. Hence the burden of taxation on imports is by no means confined to the consumers of the imports taxed, and of the special commodities protected. Were it possible for a consumer to avoid the use of every article the price of which is augmented by the tariff, be could not escape the insidious tax levied upon his industry by the abstraction of currency from his use to force a production against the natural law of value.

There are then two separate burdens imposed on consumers by a tariff on imports-first, the price added to both the taxed and the protected commodities, the latter being many times greater than the former, which sum is paid affirmatively by the consumers of the products immediately affected thereby; and second, the sum of currency abstracted from the normal remuneration of all other industries but those protected by the tariff, which sum is paid negatively but not less certainly by the unprotected classes.

There can be no objection to low and natural general prices, because, with a normal currency, they must be the consequence of activity of production, an increase of wealth, and abundance of capital in relation to currency-in other words, a high value of money, which increases the exports of merchandise: but there is an insurmountable objection to low and unnatural special prices, made so by abstracting currency from the use of one producer to give it to another through legislation, for this is but a form of robbery.

It is my opinion that the noticeable general disinclination to agricultural labor in this country is largely owing to the fact that it is the great unprotected branch of industry here. It is underpaid that other industries may be overpaid. Notwithstanding the co-operation of natural forces, working for nothing here with greater power than anywhere else on the globe, the farmer finds relatively small pay for hard work, and men are enticed away from this invigorating and naturally profitable em ployment, to seek ventures in crowded cities, and unwholesome work in manufacturing towns, to which the intermeddling of Government gives an unnatural incentive and reward at the cost of agriculture. The result is the production of commodities that could be produced cheaper in money value, and with more public advantage in the spread of population, in the more extensive cultivation of the soil, the greater vigor, the better health, and the more general intelligence and happiness of the people, by a normal application of their industry, on the land and on the water, through the exchanges of an unshackled commerce.

It is no argument against this to say that the nation thrives. However it may check its thriving the task would be difficult for Government to prevent it. Such are the vast resources of the country in cheap and rich lands and inexhaustible mines-as the London Economist says, "the best things on the earth and under the earth"-accessible by many thousand miles of free navigation of rivers and lakes, a varie climate, favoring the production of almost everything that agriculture can furnish desirable to man, with ship timber, naval stores, forests of exportable lumber for housebuilding, numerous and secure harbors on an extended ocean coast; in short, all the most beneficent powers and capabilities of nature attracting immigration and co-operating with a high degree of intelligence, industry, and enterprise, among the laboring classes, what but madness on the part of the Government can prevent the advance of the nation in material prosperity! Yet nature triumphs over an adverse legislation at a vast and needless cost to individuals of wealth and peace of mind. Nowhere else under the sun is bankruptcy in trade so general, success in life so various and uncertain, and anxiety in families, aud unhappiness in society on the whole, so great. We prosper in spite of the Government, which