45 2 THE POPULAR SCIENCE MONTHLY. 



artificially raise the cost of materials and are unable to control 

 the price of the product into which these materials enter, then it 

 often happens that we must keep the wages down in correspond- 

 ing measure, or else give up the undertaking ; and, again, a yet 

 more subtle difficulty : if we can not make a profit over and above 

 the cost of materials, the wages, and the general expenses, then 

 no capital will be invested in that branch of industry, and no 

 wages can be paid, for lack of profit. 



Now, observe how subtle this matter is. Any conspicuous or 

 important branch of industry which will pay ten per cent profit 

 will attract capital and will be established ; but if the tax on the 

 crude material is even ten per cent upon the finished product, and 

 this tax can not be paid without doing away with the profit, then 

 that art stops, and the other ninety per cent which would be dis- 

 tributed among the workmen is lost to them, merely because there 

 is a disadvantage of ten per cent in the cost of the material as 

 compared to some other places. 



Now, then, any one who is conversant with the complexity of 

 all modern manufactures can not fail to be aware that the reve- 

 nue which the Government derives of $50,000,000 on the crude or 

 partly manufactured materials which we do import and which we 

 do use in the processes of our domestic industry, may so much 

 restrict that industry by increasing our own cost of production 

 as to limit our home market both for domestic and foreign traffic, 

 and may prevent the establishment of arts in which ten times as 

 much, or $500,000,000, might be distributed among those who 

 would do the work if these articles were free from taxation. 



This is the consequence of the higher price of domestic prod- 

 ucts in this country or the lower price which prevails abroad for 

 lack of competition. 



The very worst effect of a duty on . crude materials ensues 

 when, according to its advocates, it is most successful. They hold 

 that if, by our tax, the price is put down in a foreign country, 

 then the foreigner pays the tax. There are no words suitable to 

 apply to such folly. By that very depression in the price of pig 

 iron and wool we have built up the manufactures and machine- 

 shops of Europe, and have failed more and more to hold our 

 home market even for the specific products of the loom and the 

 forge. 



Moreover, the price of some of the most necessary articles of 

 our domestic products which enter into our domestic industry, 

 notably iron and steel, are maintained far above what the price 

 would be except for this system of taxation, although not, per- 

 haps, to the full measure of the rate of duty which is assessed. 

 Hence it follows that, owing to this higher price on the most 

 necessary articles of consumption in the manufacturing and me- 



