THE EFFECTS OF PROTECTION. 



15 



quently makes combination easier. It might be practicable to 

 get up a combination to control production and prices in the 

 United States, and yet be impracticable to form one to cover the 

 entire world. Of the enormous sums beyond a reasonable profit 

 which these concerns have taken from the people we have no 

 accurate knowledge, but the amount even in single cases, such as 

 the sugar trust, is simply vast. It is not argued here that these 

 combinations are criminal. But will it, on the other hand, be 

 argued that we are bound to " protect " them ? Are they to com- 

 bine to force high prices from the people, and are the people to 

 meekly assist in the process ? 



The central idea of the protective system is to compel our peo- 

 ple to buy at home, while allowing them to sell abroad — thus 

 retaining our money at home and adding to it. This is the old 

 mercantile theory so popular during the middle ages. It needs 

 but little reflection to see that such a programme can not be in- 

 definitely carried on. If hundreds of millions of gold are brought 

 into this country, gold becomes cheap, while abroad it becomes 

 dear. There soon comes a time, therefore, when the gold will seek 

 purchases abroad in consequence of its high value there. If we 

 " corraled " all the gold in the world, the only thing we could do 

 with it would be to send it abroad and buy with it. This process 

 has already begun ; for, during the year 1887, and much more the 

 year ending June 30, 1888, the balance of international trade was 

 against us. Some protection organs, failing to see the meaning 

 of this, called for still higher tariffs. But that gold is only valu- 

 able as it enables our people to buy with it would seem to be axio- 

 matic, however much it is forgotten. 



It might be inferred from the above, as it is certainly demon- 

 strated by experience and well understood by economists, that in 

 the long run imports and exports must balance each other, except 

 where, as in the case of England, imports are made to balance in- 

 comes derived from foreign investments. But if this be true, then 

 a tariff on imports is also a restriction on exports. Have we found 

 this to be true ? Not to rely on such general principles as that all 

 international trade is essentially barter — an exchange of product 

 for product — because payment in gold instead of bills of exchange 

 is too expensive ; because freights without return freights are too 

 high ; and because, as experience everywhere shows, people learn 

 to buy wherever they sell ; not to rely on abstract propositions, 

 let us appeal to the statistics of American and English exports 

 and imports : 



Great Britain 



United States 



Exports.- 



£245,000,000 

 74,000,000 



-Average, 1861-18S0. 



£321,000,000 

 74,000,000 



