MICHIGAN ACADEMY OF SCIENCE. 131 



THE INFLUENCE OF THE TAEIFF AND MONOPOLY UPON THE 



INCREASING COST OF LIVING. 



FRANK TRACY CARLTON. 



It is oiilv statiiiji a Iriiisiii to remark that tlie causes of social and 

 econouiic phenoinena are complex and often hidden rather than simple 

 and readily a])parent. Many potent forces have been acting dnring' the 

 period 189G to 11)10 to raise the price level, and, therefore, to increase 

 the cost of living, — -among such agencies are the increasing supply of 

 gold, the efforts of organized labor, the disappearance of free land, di- 

 minishing fertility of the soil, the depletion of certain natural resources^ 

 wasteful methods of producing and of consuming, and so on thru a list 

 which is not short. These and other influences are afl'ecting the price 

 level. Altho consideration, in this jjaper, must be given almost solely 

 to the influence of the tarift' and of monopoly upon the price level ; it 

 is by no means implied that there are no other agencies of importance. 



While indirectly the protective tarifl" may have played an important 

 role in raising the price level during the last decade and a half; di- 

 rectly it must be assigned to a minor part. Two reasons may be pre- 

 sented in order to substantiate the latter part of the above statement 

 which is diametrically opposed to arguments frequently presented. 

 (1) Attention is directed to the fact that no important change in the 

 tariff has taken place since 1890 ; or, if this be questioned, certainly 

 not since 1807. In the absence of monopoly, or in other words in the 

 presence of competition, prices soon adjust themselves to new tariffs. 

 Important changes in prices due to the imposition of a tariff" follow 

 closely the enforcement of such enactments. The tariff' could not di- 

 rectly cause a gradual or a rapid increase in the cost of living over a 

 period of twelve or thirteen years. The imposition of a new tariff' might 

 cause a sudden upward price movement; but a uniform price level would 

 soon be attained and maintained unless other and disturbing influences 

 intervened. The tariff may cause high prices; but it, acting alone, will 

 not cause prices to gradually rise thruout a period of years. The rapid 

 upward trend of prices during the last few months may possibly be due 

 to the passage of the Payne-AIdrich bill; but if the upward trend con- 

 tinues it must be attributed to the action of other forces or to the 

 indirect effect of the new tariff'. Before this group of students of ec- 

 onomics, it is surely unnecessary to enter into a detailed discussion 

 of this point. 



(2) In these days of full-grown industry in the United States a 

 I'.rotective tariff" \\\wn articles Avhich Americans are manufacturing on 

 a large scale will have little or no efl'ect, except temporarily, upon 

 prices, — providing competition actually exists as a potent force on this-, 

 side of the Atlantic. Of course this statement may not hold true in the^ 

 case of all articles of home manufacture. Other countries may have 

 certain special advantages in the manufacture of certain products. It 

 seems reasonable, however, to assert that without monopoly or consider- 



