PROTECTION 



4844 



PROTECTION 



In vain the girl begged for release, and at 

 length gave up hope of returning to the upper 

 world and the light of the sun. 



Meanwhile, Ceres had sought everywhere for 

 her beloved daughter, and when she at last 

 discovered her whereabouts she obtained from 

 Jupiter and the Fates a promise that Proser- 

 pina might return if no food had passed her 

 lips while she was in Pluto's realm. When 

 Mercury went to bring her back to earth, 

 however, he found that she had eaten six pome- 

 granate seeds, and in consequence of this she 

 was obliged to spend half of her time each 

 year with her gloomy husband underground. 

 During each six months that she was per- 

 mitted to be above ground, vegetation flour- 

 ished, but during the rest of the year winter 

 reigned. This is one of the old myths which 

 accounts for the change in seasons. 



PROTECTION, pro tck'shun, in economics 

 and government, is the policy of giving assist- 

 ance to home industries, either by offering 

 a bounty on domestic production or by placing 

 a high tariff on foreign production. The pay- 

 ment of bounties is direct and convincing as- 

 sistance, but it requires a costly and complex 

 administrative machinery. The easiest way of 

 securing protection is through high customs 

 duties on imported articles. 



The Theory of Protection. In theory, a pro- 

 tective tariff is intended to equalize the dif- 

 ference in cost of production of an article in 

 two countries which are trade competitors. 

 In Holland, for example, where wages are low, 

 an article may be made and shipped to America 

 at a cost of fifteen cents; under the higher 

 wage system existing in America the cost of 

 manufacture, not including shipping charges, 

 may be twenty cents. If competition be based 

 upon existing conditions the American factory 

 owner would have to cease the manufacture 

 of the article which can be produced more 

 cheaply abroad. However, by the imposition 

 of a tariff upon the product of the Dutch fac- 

 tory, that article, laid down in America, costs 

 a sum more nearly equal to the manufacturing 

 price in the United States. The proper theory 

 of a protective tariff, then, is an import 

 duty upon each competitive article of such an 

 amount as represents the difference in the cost 

 of production. In the concrete case above 

 noted a duty of thirty-three and one-third per 

 cent upon the Dutch article would make it 

 cost twenty cents when laid down in America, 

 and thus the American manufacturer could 

 meet its competition on even terms. 



Arguments of Its Defenders. In the United 

 States a protective tariff as early as 1816 was 

 defended rather on the ground of protecting 

 industries already established than of encour- 

 aging new industries. This has been called the 

 "vested interests" argument, that an industry 

 built under protection would fail if protection 

 were removed. A new argument was soon to 

 find its chief exponent in Henry Clay; this 

 was the "home market" theory, designed to 

 reconcile the interests of the manufacturing 

 and commercial North with the agricultural 

 S6uth and West. It is to the interests of both 

 the farmer and the manufacturer, said Clay, to 

 build up a system by which the farmer can 

 find a home market for his products. The 

 foreign markets, it was said, are more unstable ; 

 aside from that, the different sections of the 

 country should be bound together by a system 

 which furthers the general interest. 



The next development in the theory of pro- 

 tection came during the War of Secession. 

 The government, to raise funds, levied large 

 and numerous internal revenue duties ; to offset 

 these a high protective tariff was necessary. 

 There was, further, a considerable anti foreign 

 sentiment caused by the almost universal sym- 

 pathy in Europe for the Confederacy to 

 support a high tariff. After the war the in- 

 ternal revenue taxes were gradually removed, 

 but the import duties being practically un- 

 changed, the tariff became increasingly pro- 

 tective. A new argument was subsequently 

 marshaled to its defense the "wages" theory. 

 It was argued that a high tariff created and 

 maintained high wages, and that the removal 

 of protection would lower wages and reduce 

 the American workman to the level of his 

 European brother. 



Summary. The arguments of protectionists 

 and free traders may be summarized briefly as 

 follows: The protectionist declares that high 

 tariff promotes nationalism, or a closer union 

 of a country's internal interests, builds up di- 

 versified industries, encourages attempts to de- 

 velop natural resources, enables a nation to be 

 self-dependent in times of war, promotes a 

 home market, which is always surer and 

 steadier than a foreign market, saves the farmer 

 the cost of transportation to distant markets, 

 and assures higher wages. 



The free trader declares protective rates a 

 violation of a man's natural rights to buy and 

 sell wherever he will, and equivalent to pater- 

 nalism, a term meaning the tendency of a 

 government to control too closely the activi- 



