The Online Library of Liberty

A project of Liberty Fund, Inc.

• Introduction.
• Taxation and Work.
• Chapter I.: Occupations. Distribution of Products.
• Chapter II.: Taxation Measured By Work.
• Chapter III.: Taxation Measured In Money.
• Chapter IV.: Principal Sources of Revenue.
• Chapter V.: How the Tariff Should Be Reformed.
• Chapter VI.: Taxation Which the Government Does Not Receive.
• Chapter VII.: British Tariff Reform.
• Chapter VIII.: Beggarly Compensation of United States Officials.
• Chapter IX.: What Is Protection?
• Chapter X.: Occupations That Cannot Be Protected By Duties On Imports.
• Chapter XI.: Method of Tariff Reform.
• Chapter XII.: Protection By Exemption From Taxation.
• Chapter XIII.: Free Trade the Objective Point.
• Chapter XIV.: Attempted Definition of the Principle of Protection By Senators Sherman, Hoar, and Aldrich.
• Chapter XV.: Hamilton’s Policy.
• Chapter XVI.: Tariff Protection Does Not Raise Wages.
• Chapter XVII.: Protection Promotes War; Free Trade Promotes Peace.
• Chapter XVIII.: Does Tariff Protection Promote Liberty?
• Chapter XIX.: Progressive Reduction of Duties.
• Chapter XX.: Cost of a High Tariff.
• Chapter XXI.: Development By Free Commerce.
• Chapter XXII.: High Wages and Low Cost.
• Chapter XXIII.: The Use of Machinery By Nations.
• Chapter XXIV.: The Waste of Armies.
• Chapter XXV.: Senator Morrill’s Report On Canada Received. Food and Wages.
• Chapter XXVI.: In the Matter of Silver, Bi-metallism, and Free Coinage.
• Chapter XXVII.: Volume of Trade.
• Chapter XXVIII.: Taxation By Bad Money.
• Chapter XXIX.: How to Maintain Silver Equal to Gold.
• Chapter XXX.: The Issue Joined.
• Chapter XXXI.: Personal Observations—conclusion.

CHAPTER XI.

Method of Tariff Reform.

In dealing with the remedy for the evils of taxation under which we now suffer and which inflict privation under the pretext of Protection I shall be obliged to recur to some of the views which have been presented in earlier numbers and to repeat in some slight measure some of my previous statements.

Thus far the people of this country have been able to bear the vagaries of a system of taxation imposed under acts which have been devised without order, method, or any really scientific consideration of any definite policy of any kind. The tariff has of late been treated as the mere football of politics: the McKinley bill supported as a party measure by those who considered its provisions wholly unfit to be adopted, without any just consideration of the true interests of consumers. In spite of these constant variations and uncertainties, such have been the effects of science and invention applied in the field, the forest, and the factory that the progress of this country in material welfare during the last twenty-five years has been greater than anything ever known here or elsewhere.

Viewed from a scientific standpoint, however, the very ability of this country to bear the perversion of taxation has been almost a misfortune. But the end has come. The people have long listened with patience to every shallow and sophistical argument that could be put before them, without giving time or attention to the matter, but the necessary end has at length been reached in a very singular way, to wit: through the very excess of our abundance. We are now “smothered in our own grease”; we are burdened with our own excess of products as compared to our own consumption. Under these conditions people have at last become tired, and in the vernacular they are now crying out: “Give us a rest.” From every side and from every department of industry comes up the word: “We have asked you for bread, and you have given us a stone. You promised us greater activity; we are subject to depression. You held out the expectation of better prices for our farm products, especially for our wool and our cotton, and you have brought about conditions in which we are being forced to take less for many products that we have to sell and to pay more for much that we have to buy. We will not submit to these quack methods of legislation any longer. Only a partial famine in Europe has for the time saved us.”

This change in public opinion is coming about without any distinct process of reasoning, but rather through a gradual development of common-sense and conviction on the part of the great mass of the people that a paternal policy may no longer be tolerated, of which the logical outcome is the perversion of public taxation to private benefit, accompanied by a corresponding organization of labor with the declared purpose of defending itself against capital, as if capital were its enemy. Another outcome of this “paternalism” has been the demand of the Farmers’ Alliance for the aid and support of the government in speculating in grain and cotton by the lending of fiat money at two per cent. per annum.

These fallacies, of course, affect and mislead only a small fraction of discontented persons. The solid common-sense of the people pronounces them to be fallacious, and by instinct rather than reason traces these fallacies to their source in the undertaking of Congress to regulate prices and wages and to control enterprises by constant interference with the freely chosen pursuits of the people.

The McKinley tariff, so-called, is being rapidly condemned, not because the evils which are affecting the community can be directly traced to its provisions, but because of an utter distrust of the whole method on which it has been framed, which distrust has been derived from its general effect. With this change of opinion in regard to the measure itself has also come a conclusion in regard to the leaders who sustained it, whose sincerity is only justified in inverse proportion to the estimate put upon their intellectual capacity. This statement is not made in a controversial way. Is it not a fact that such is the aspect to which the slow, sure, but solid common-sense of the mass of the people has been brought? Is not this a true view of the present status?

If such is the fact, then there may now be very great danger of injudicious methods in changing the policy of the country. Unless a plain and intelligent direction can be given to the reform of our revenue system by the concurrent action of reasonable men without distinction of parties, the reform may be worked by methods which may cause injury in proportion to the want of intelligence with which the new measures are framed, and for lack of right discrimination and true protection to our own people.

I have already stated that it would be as injudicious to destroy capital and to break up branches of industry which have been almost forced by a high tariff to take the direction in which they are found, as it was in the beginning to force them into such artificial conditions. In order that the necessary changes in taxation may be rightly directed, two measures will have become a positive necessity; first, a careful estimate of the annual expenditure for pensions, of the duration of that obligation, and of its progressive reduction until the last dollar shall have been paid; second, a judicious selection of subjects of taxation by well devised measures, which shall be computed so as to meet this obligation without yielding any undue excess of revenue. That will be the most difficult part of the undertaking, and this work ought to be entered upon without regard to party politics.