404 TAXATION PROBLEMS 



sistible. As this power is exercised from time to time, we find it resisted by 

 combinations among the working classes, by turning out for higher wages, 

 or for shorter time; by trades-union; and in some countries, unfortunately, by 

 violence and bloodshed. But the government, by protective duties, arrays 

 itself on the side of the manufacturing system, and by thus augmenting its 

 wealth and power, soon terminates in its favor the struggle between man and 

 money between capital and labor. When the tariff of 1842 was enacted^ 

 the maximum duty was 20 per cent. By that act the average of duties on 

 the protected article was more than doubled. But the wages of labor did not 

 increase in a corresponding ratio, or in any ratio whatever. On the contrary, 

 whilst wages in some cases have diminished, the prices of many articles used 

 by the working classes have greatly appreciated. 



Profits. -A protective tariff is a question regarding the enhancement of 

 the profit of capital. That is the object, and not to augment the wages of 

 labor, which would reduce those profits. It is a question of percentages, and 

 is to decide whether money vested in our manufactures shall, by special 

 legislation, yield a profit of 10, 20 or 30 per cent, or whether it shall remain 

 satisfied with a dividend equal to that accruing from the same capital invested 

 in agriculture, commerce, or navigation. 



"No prejudice is felt by the Secretary of the Treasury against manufac- 

 turers. His opposition is to the protective system, and not to classes or 

 individuals. He doubts not that the manufacturers are sincerely persuaded 

 that the system which is a source of so much profit to them is beneficial also 

 to the country. He entertains a contrary opinion, and claims for the oppo- 

 nents of the system a settled conviction of its injurious effects. 



Free Trade Principle. Soil, climate, and other causes vary very much, in 

 different countries, the pursuits which are most profitable in each; and the 



Erosperity of all of them will be best promoted by leaving them unrestricted 

 y legislation, to exchange with each other those fabrics and products which 

 they severally raise most cheaply. This is clearly illustrated by the perfect 

 free trade which exists among all the States of the Union, and by the acknowl- 

 edged fact that any one of these States would be injured by imposing duties 

 upon the products of the others. It is generally conceded that reciprocal 

 trade among nations would best advance the interests of all." 



Secretary Walker also discussed the "home market" argument 

 the favorite argument used by the manufacturers to convince 

 farmers that prosperity was being "passed around," and to secure 

 the support of farmers for a taxing system which took money from 

 the pocket of the farmer and transferred it to the pocket of the 

 manufacturer. We have, reasoned Walker, a surplus of agricul- 

 tural products; therefore we must have a foreign market; the real 

 question is then, not the home market, but how. best develop a 

 foreign market? Walker's answer was free trade. 



Hamilton's Errors. As the first Secretary of the Treasury, 

 Hamilton, a young man of thirty-two, was confronted with gigantic 

 national problems of credit, of money and banking, and of revenues, 

 and with few precedents to guide him. The wonderful genius he 

 displayed in successfully and rapidly solving his major problems 

 has given him a rank in history as the second greatest man pro- 

 duced by the Revolution. He had never seen Europe, but he was 

 greatly influenced in his decisions of policy by European practices. 



