PROTECTIVE DUTIES AND PRICES. 



CHAPTER XV. 



PROTECTIVE DUTIES AND PRICES. 



CHICAGO, 111., Feb. n, 1871;. 

 To the Editor of the Inter-Ocean : 



A few days since you published an able article on the duties on tea and coffee, in 

 which you advocated a continuance of those articles on the free list, because that 

 policy would tend to cheapen them. How does this tally with your arguments 

 that Protective duties tend to cheapen prices to the consumer ? Please tell us. 



A BELIEVER IN THE INTER-OCEAN. 



A DUTY levied upon an article not produced, and not likely to 

 be, or which can not be, in this country, can not be Protective 

 in effect, because there is no present nor prospective existence on 

 our soil of the industry involved. Tea and coffee belong to that 

 category; hence duties thereon are not in any sense Protective of 

 domestic labor and capital. Such duties are added to prices and 

 are paid by consumers. As a general proposition, with very few 

 exceptions, when such duties are repealed the prices at once recede 

 by just so much. 



But the case is different where we produce articles like those 

 imported. Various effects follow, according to the character of the 

 surrounding circumstances. If the duty, when diminished, was not 

 sufficiently Protective, the reduction is equivalent to a free gift of 

 the amount to the foreign manufacturer. A notable example of this 

 took place in 1870, when the duty on pig iron was reduced from $9 

 to $7 per ton. The measure was carried through Congress on the 

 plea that Consumers would get their iron cheaper. But while the 

 proposition was pending, and as soon as it had been ascertained that 

 the measure would certainly pass both houses, the British manufac 

 turers held a meeting, at which they resolved to put up the price of 

 pig iron $2 per ton, or exactly the sum proposed to be taken off 



