properly studied and are clearly understood. Further changes should follow from time to time, as the conditions, either here or abroad, affecting this or that item in the schedules, change to an extent which either justifies or necessitates corresponding changes in the tariff. The final result of such successive changes in detail would be, for the tariff as a whole, substantial fixity and permanence, with freedom from all need or apprehension of sweeping revisions at uncertain intervals, but, as to individual items, facility for correction and change whenever and to whatever extent changing commercial and industrial conditions might, in the judgment of Congress, guided by the information furnished by the Tariff Commission or Bureau, seem to be expedient or necessary. The whole tendency under such a plan would be steadily toward a closer, more scientific, and fairer adjustment of the schedules to the "Neutral Line," and, coincidentally, a steadily diminishing need or occasion for tariff changes except to meet new conditions. Is it not clear that the United States has outgrown its old method of studying and framing tariff legislation, and that a new and better method is needed? If this be granted, is it not equally clear that the logical and scientific method is to create a permanent technical Tariff Commission or Bureau to undertake the work above set forth, and, under the direction of Congress, to assist the latter in ascertaining the "Neutral Line," to detect departures from it, and to frame legislation which will best conserve all interests and tend to remove all inequalities and injustice? With such a Commission or Bureau, so organized, so directed, and so controlled, we would thus have a tribunal for (a) The Consumer, the people, to appeal to. (b) The Producer, who seeks relief. ކ (c) The Congress, to obtain facts, advice, and assistance. The Commission would thus become, as it were, a court of first instance, while Congress would remain a court of review 52 and final jurisdiction. The latter would largely be relieved from detail, confusion, and the clash of selfish interests, and instead would have placed before it, for orderly review, consideration and constructive legislation, reliable facts, intelligently and impartially presented and clear, well defined issues. Can we better solve our present problems, in this most vitally important part of our national government and finances, than by fairly trying the Commission or Bureau plan? If we find it good, we can then retain it; if we find it defective, we can seek to amend it; if finally we find it bad, we can abandon it. Whatever the outcome, is it not certain that the experience will prove helpful and enlightening, and that the experiment, if not permanently satisfactory, will at least point the way to a better solution? THE TARIFF FRAMING. HE tariff, being primarily a revenue measure, presumably consideration should first be given to determining the amount of revenue which it will produce. In some cases this question may admit of easy solution, but in many others the problem is complex and its solution difficult. A duty may be so high as to curtail or even prohibit imports. In the latter case it ceases to be a source of revenue, and becomes a subsidy to the protected interest. Before a subsidy is enacted into law, a clear understanding should be had as to its nature, as to the interests which would be benefited, and as to the interests which would suffer. The effort should be to find the "Neutral Line," and for this a complete and impartial knowledge of the technical facts involved is essential. In framing a protective tariff which includes both taxes and subsidies, the effort should be to find, as to each item, the "Neutral Line" intermediate between conflicting and opposing in· terests, Between the interests of the producer and those of the con sumer, Between the one who pays the tax and the one who benefits by it, Between the weight and importance of admitted benefit and profit, on the one hand, and of unavoidable injury and cost on the other. For all of the purposes thus implied the proposed permanent Commission or Bureau would become a most helpful instrumentality and adjunct to Congress. THE INTEREST OF LABOR. IN all discussions of the tariff the plea is made that a chief purpose in view is "protection to American labor." Are we not liable to be misled by this plea? Does labor actually share, and, if so, to what extent, in the proceeds of the tax resulting from a protective duty? Is it not a fact, known to all employers of labor, that, in fixing any individual rate of wages, no thought whatever is given to the tariff; that in every case the employer takes account solely of the value or efficiency of the workman, and of the current rate of wages in the trade to which he belongs; that the workman is guided solely by his knowledge as to this current rate, and by his needs; and that each makes the best bargain he can? Is it not true, further, that the rate of wages, in every trade, depends in large part upon the cost of living, and that a high tariff, by enhancing the prices of the products which it affects, tends to increase this cost? Finally, is it not true that the real measure of a wage-rate is its purchasing/ power, and that needlessly high tariff rates tend to diminish the purchasing power of wages? Granting the arguments thus implied, it follows that in fixing rates of duty at least equal effort and care should be devoted to investigating the incidence of the tax, and the burden it will impose on those on whom it will fall, as is devoted to considering the benefits which it may yield to those whom it is intended to protect. Here, again, we should seek to find the "Neutral Line." Has not the present system failed to do this, and would not the proposed Commission or Bureau of Tariff Research afford a partial, if not a complete, remedy by tracing and forecasting the effect of proposed duties on American labor? 54 THE OUR EXPORT TRADE. HE United States is the great exemplar of free trade. Nowhere else, at any time in the world's history, have trade and commerce been so absolutely free and untrammeled as they are to-day in this great country, and among its eighty millions of people. But students of economics predict that before long we will need, if we do not to-day, a larger market in which to dispose of the rapidly increasing output of our soil, mines, farms, and factories; that, great as is the consuming power of our own people, it will soon be exceeded by the producing capacity of our manifold industries; and that, unless we soon take adequate measures to provide for the broadening of our foreign markets, there will develop an increasing pressure to sell in the home market, which, if not relieved, will tend to glut the latter, and which, by the increasing intensity of domestic competition, will operate inevitably to depress all prices in the domestic market. If this forecast of coming industrial and commercial events is ,sound, should we not promptly, in the adjustment of our tariff, seek to find that "Neutral Line" which, without serious or lasting injury to our domestic trade, will serve most effectively to open new and larger outlets for the export of our surplus products? We are still chiefly producers of raw materials, and the greater part of our exports still consists of simple products which other industrial nations buy from us to convert into more highly finished goods, a large part of which latter they resell to us. For example, about 74% of all cotton is grown in the United States, but of this only one-third is converted here into finished goods, the other two-thirds being sold abroad as raw cotton, there to be converted into the finished product and sold in the markets of the world, which we are seeking to enter, and much of it resold to us. Of the cotton textiles sold in 1907 in South America, $47,000,000 were bought in England, and only $3,700,000 in the United States. Should not our tariff policy aim to promote the larger conversion of our raw materials into finished products at home, thereby giving increased employment to American labor? To accomplish this we need to find the "Neutral Line," which, while promoting the growth of our manufactures, will yet safeguard the interests of our producers of raw materials. For the study of the new and complex questions involved in this problem would not the proposed Commission or Bureau be invaluable to the nation and to its representatives in Congress? In the case of India rubber we admit the crude article free, presumably for the reason that it cannot be produced in the United States, while a duty, ranging from 30% to 60%, is imposed on the manufactures of rubber. Under this condition the rubber industry of the country has attained vast proportions, and many of its products are largely exported. May it not be possible advantageously to extend the policy thus implied into other lines of industry, and more largely than heretofore, by finding more accurately and scientifically that "Neutral Line" of tariff adjustment which, while fairly respecting and protecting those industries which yield the cruder products, those forming the raw materials of manufacturing, will so operate as to secure for our manufacturers opportunity to purchase their materials on favorable terms, and thus, by increasing their ability to compete in foreign markets, increase the field of employment for American labor, both in its lower and higher forms? In this connection it should be kept in mind that the finished product of one industry, especially of those which are closest to the natural article, becomes the raw material of the industry next higher in the scale of manufacture. Thus cotton passes successively from the field to the bale, into yarn, into cotton cloth, and finally into print goods and still higher products, each of these stages constituting a distinct industry, and all forming a progressive chain. Except so far as profits and royalties are added to cost at each of these progressive stages, the entire cost of almost every finished article consists of labor, applied successively and cumulatively throughout the progressive series of operations. Whatever tends, by lowering the purchasing power of money, to enhance the wages rate, operates directly and proportionately to enhance the final cost of the product, without compensating benefit to the wage-earner, and to the disadvantage of the manufacturer who seeks to find an outlet for his surplus |