average ad-valorem rate which it imposes upon dutiable articles. It is the distribution and relation of rates, and not the average rate imposed on all articles, which determine the character of a tariff. For instance, the average ad-valorem rate imposed upon all dutiable articles by the British tariff in 1887 was 70.07 per cent., and yet it will hardly be claimed that the British tariff is protective in its character.

If all of the articles in our tariff schedules upon which protective duties are levied should be placed upon the free list and all our protected industries destroyed, and duties should be maintained at present rates upon tobacco, silks, wines, and liquors, and sugar, the average ad valorem rate imposed upon dutiable importations would be 71.92 per cent. instead of 47.10, and by this wonderful mathematical process of ascertaining the extent of protection by the average ad valorem rate, we should find that the nearer we approached to free trade the greater would be the degree of protection afforded our industries. The assurance that after all a high average ad valorem rate was preserved would afford no compensation to the manufacturers or workingmen whose industries were destroyed by the removal of duties. The average rate upon all the schedules, excluding silks, wines, liquors, tobacco, and sugar in 1887, was 37.65 per cent.

The effect of placing articles on the free list which bear lower rates of duty than the average is obviously to increase the average rates on the remaining dutiable articles. The high average ad valorem rate resulting from our present tariff is owing to the unexampled low prices current for a number of years, and to the high rates of duties levied on tobacco, silks, wines, liquors, and sugar.

The tariff of 1846 is constantly referred to by tariff reformers as a model enactment, and yet if the articles in the four schedules named had been dutiable at the same rates in 1887 which were imposed upon them in 1846 (wines, 40 per cent.; sugar, 30 per cent.; tobacco, 40 per cent.; silks, 30 per cent.), the average ad valorem rates upon all imported merchandise in 1887 would have been 23.69 per cent., or a less rate than was imposed upon all imported merchandise under the act of 1846.

FREE TRADE.

In consequence of the extreme sensitiveness manifested by the authors and supporters of the bill under consideration to the suggestion that they are free-traders, or that the measure which they have proposed looks in the direction of free trade, it may be well to consider what is understood by free trade when the term is used to describe the economic policy of a nation.

It is true, there is but one country to which we can look for an illus tration, as, with the conspicuous exception of Great Britain, all other commercial nations have rejected the teachings of that school of political economists who dream of universal serenity and prosperity to be accomplished through the adoption of free-trade theories. Free

trade, then, judged by the example of Great Britain, does not mean the abolition of custom-houses nor the collection of all revenues by direct taxation. There is annually paid by the people of Great Britain under the provisions of the British tariff an equal sum per capita for duties on imports to that which would be paid by the people of the United States under the provisions of the House bill or of the substitute proposed by your committee.

A free-trade country may be properly described as one which does not impose protective duties upon importations. Lord Salisbury lately defined a free-trader as one who is opposed to protection. Mr. David A. Wells recently said, "Free trade, as an economic principle or politicocommercial system, is the direct opposite to the so-called principle or system of protection." If these definitions are correct the promoters of this bill are self-confessed free-traders, and the denial that they are engaged in a "crusade of free trade" comes too late, for the American people are not likely to forget the lessons of 1844 and the political rally. ing cry of "Polk, Dallas, and the tariff of '42."

American free-traders or revenue reformers, as they now choose to call themselves, are hopelessly divided in opinion as to the proper manner of raising the revenue necessary for the support of the Government: many of the more conspicuous are in favor of a single tax upon land; others prefer the direct tax contemplated by our Constitution; some favor the collection of revenue by customs duties upon articles not produced in this country, after the manner of the British ta iff; much the larger number, however, are in favor of a general tariff for revenue only, but all oppose with equal ardor the imposition of protective duties, which they declare to be "vicious" and "iniquitous," resulting in "spoliation" and "robbery."

These gentlemen have also differed at times as to the best method of securing the abolition of protective duties and the destruction of the system. They are, however, in substantial agreement that the long line of our industrial defenses can only be carried by concentrating their forces upon that which seems from time to time to be the weakest point. After each repulse or defeat some new point has been selected for the assault. The warfare has usually been directed against the manufacturers of the country, who were declared to be odious monopolists, whose exactions wrung from an unwilling people by the machinery of a protective tariff could be no longer tolerated. The present movement is disguised under the pretense of a purpose to assist and emancipate our overburdened manufacturers.

Great ingenuity has been shown in the construction of the varied and various reform measures which have been introduced in Congress from year to year, but in all, the common purpose of destroying the protective system has never been lost sight of. The free-trade programme embodied in the bill now under consideration was adopted in 1885, after the defeat of the so-called Morrison horizontal reduction bill of 1884.

In November, 1885, the free-traders and revenue reformers of the country met in national conference at Chicago, under the auspices of the American Free Trade League, to decide upon a plan for renewing the attack upon the common enemy. This important conference, after prolonged discussion, determined to urge upon their friends in Congress the adoption of the policy outlined in the following resolutions:

We therefore urge upon Congress for action at the ensuing session

(1) That, under no pretense, shall any countenance be given to attempts to increase protective duties.

(2) That articles which are at the foundation of great industries should, in the interest of labor and commerce, be freed from duty, whether they be crude materials (as lumber, salt, coal, cre, wool, etc.) or partly manufactured (as chemicals, dye-stuffs, tin-plate, wood-pulp, etc.).

(3) That on products from such articles duties should be at least correspondingly reduced, so that protection, real or nominal, to manufacturers shall not be increased and that the consumer shall have the immediate benefit of the reduction.

We urge that any steps in tariff reform should simplify the present complicated classification, and should do away with mixed duties, replacing them by ad valorem rates, instead of specific duties which are most burdensome on low-priced goods consumed by the great body of the people.

These resolutions were prefaced by a long preamble declaring, among other things, that "every protective feature must at the earliest day be eradicated from our revenue system."

A careful comparison of the provisions of the House bill now under consideration with the detailed suggestions contained in the resolutions will show with what fidelity the programme of the free-trade conference has been followed in every essential particular.

At the conference a suggestion was made that it might be advisable. to memorialize the President on this subject, but the presiding officer, Mr. David A. Wells, responded:

We can trust the President of the United States.

This confident and significant assertion was publicly made a year before the President sent the annual message to Congress in which he enunciated the policy of the administration and of his party upon the lines laid down by the-free trade conference, and in which he sought to enforce the soundness of the position they had taken by the use of arguments which had become familiar through constant reiteration for half a century by free-traders on both sides of the Atlantic.

The controversy, however, between the opponents and the friends of the bill under consideration is not one over names or phrases; it is a contest between those who support and those who oppose the American system of defensive duties; and this conflict is as irrepressible as that which was waged between the respective friends of freedom and slavery. There is, moreover, the same irreconcilable antagonism between a protective tariff and a tariff for revenue as that which exists between protection and absolute free trade. The definition of revenue duties given by Secretary Walker, their most distinguished advocate,

and one which has been generally accepted by his followers, carefully and effectually excludes all idea of protection.

A duty whether high or low which does not equal the difference in cost of production, in this and in any competing country, of the article upon which it is levied, is not protective.

If a duty is protective it matters not to the labor employed in an industry whether it is so accidently, incidentally, or whether it is levied with full knowledge and intent of the result which is to follow. If the rate is below the protective line it has no defensive virtue, and confers no benefits upon domestic manufacturers. The debate is between those who believe that protective duties may be levied in pursuance of a wise public policy and those who believe that all protective duties are indefensible; and in this discussion the advocates of the House bill neces sarily take their places among the opponents of the protective system.

LABOR COST OF PRODUCTION.

It is asserted that the rates of duty retained by the House bill must be suficiently protective to the labor employed in our various manufacturing industries, as these rates on all manufactured articles are greater than the entire sum paid in each case for labor in producing the article. For illustration, it is claimed that, as the average rate proposed by the bill on manufactures of cotton is 39.07 per cent., and as the assumed average labor cost in these manufactures is but 21.06 per cent., it may be said (even though competing nations should reduce the wages of labor in this industry to the lowest possible minimum) that the duties retained would much more than equalize the larger sum paid by the American producer for labor. The census of 1880 and the first annual report of the Commissioner of Labor are quoted in corroboration of these and similar statements in regard to other industries. The labor cost of producing a ton of pig-iron in various parts of the United States is assumed to be from 8.55 to 16.71 per cent. of the total cost of production, and as the rate of duty proposed by the bill on pig-iron is $6 a ton, or nearly 55 cent. of the foreign price, it is therefore said to be evident that this duty could be still further reduced more than one-half and yet be amply protective of the labor employed in this industry. The extravagance of these statements and the falsity of the deduction made from them are apparent when we consider that the percent. age of labor cost in each case is based upon the amount paid for labor at a single stage of the long process of manufacture.

In the ultimate analysis, the cost of production of manufactured articles is the cost of the labor or services of man. The cost of the origi nal elements in their natural state, before they are advanced in value by labor, is insignificant. If, in computing the cost of production, we should exclude the sums paid for taxes, insurance, interest, and retained for accruing profits, a large portion of which represent pay

ments for labor and services, and which together would rarely amount to 10 per cent. of the entire cost, we should then find the labor cost in all cases to be at least 90 per cent. of the total expenditure.

Mr. Edward Atkinson, in a carefully prepared statement, published in April, 1887, demonstates that of the total cost of producing medium shirtings, worth 64 cents a yard, the proportion paid for labor at various stages (on the plantation, in transportation, in factories, etc.) was 92.12 per cent., the remaining portion, 7.88 per cent., being absorbed in interest, insurance, profits, etc. This estimate is confirmed in a striking manner by the following statement of Hon. A. S. Hewitt, made at a hearing before the Committee of Ways and Means of the House of Representatives, February 21, 1884, the subject under discussion being the percentage of labor cost in the manufacture of iron:

Mr. Hewitt said:

The percentage of labor involved in the production of any given article depends upon where you begin to estimate the percentage. If you begin with a steel-rail mill, which uses pig-iron, the labor will be from 25 to 30 per cent. The actual wages paid by a wire-mill will amount to about 29 per cent. of the cost. If you include labor in the blast-furnace that would make it 60 per cent. But if you go on back to the ore bed, and put in everything which was paid out from the ore bed, the percentage of labor would have been about 90 per cent. I say this because the gentleman (Mr. Thos. G. Shearman, of Brooklyn, N. Y.) proposes to overthrow facts within my knowledge, and for which I pay. I say the amount which I pay out for labor, when I inelude every particle of raw material beginning at the ground—and I am a miner both of ore and coal-I have never, with all my anxiety to get it down, got it below 90 per cent. on the value of the finished product.

Mr. MILLS. What is the finished product?

Mr. HEWITT. Any finished product. I make bar-iron.

Mr. MILLS. Is pig-iron a finished product?

Mr. HEWITT. The labor in pig-iron will be 90 per cent. of the cost. It actually takes 90 per cent. of the cost of the article for labor when you include everything, from the beginning to the end.

That which is shown to be true by the intelligent testimony of these two eminent tariff reformers in regard to the manufactures of cotton and iron is equally true in regard to every other manufactured product. The adequacy of a rate of duty for defensive purposes can not properly be determined by ascertaining the sum paid for labor in any one of the many operations necessary to transform natural elements into fully manufactured products. The larger earnings and greater cost of labor at every stage and in all contributory occupations should be taken into consideration, and the rates should always be equal to the resulting increased cost of production. As all of our people engaged in every occupation contribute to and share in the benefits of profitable production, so all are alike vitally interested in the maintenance of a policy which secures and enlarges the area of national industrial success.

The futility of attempting to adjust rates of duty, levied to equalize foreign and American prices, on the basis of the mathematical relation which these rates bear to that small portion of the labor cost of pro