PROTECTION OF AGRICULTURE AND LABOR 405 



Thus, in his two great reports, his Report on the Coinage, and his 

 Report on Manufacturers, both made in 1791, he seems to have 

 decided the two issues involved (Bimetallism, Protection) on the 

 basis of what was actually the practice of the moment in Europe, 

 rather than on the basis of his own logic. For instance, there is 

 no better statement of Gresham's Law anywhere than in his 

 report on the Coinage, for he clearly shows the impossibility of 

 maintaining a double standard of value. But his conclusions are 

 in favor of bimetallism, largely, it would seem, because no Euro- 

 pean country had yet adopted the single standard, and England 

 was several years off from the status. It took a great many years 

 for the country to correct this error. And so with his tariff policy. 

 He was faced with the actual condition of protection in various 

 forms in use by foreign governments. His words on this point are : 



"But the greatest obstacle of all to the successful prosecution of a new 

 branch of industry, in a country in which it was before unknown, consists, 

 as far as the instances apply, in the bounties, premiums, and other aids which 

 are granted in a variety of cases by the nations in which the establishments to 

 be imitated are previously introduced. It is well known that nations grant 

 bounties on the exportation of particular commodities to enable their own 

 workmen to undersell and supplant all competitors in the countries to which 

 those commodities are sent. Hence the undertakers of a new manufacture 

 have to contend not only with the natural disadvantages of a new undertaking, 

 but with the gratuities and remunerations which other governments bestow. 

 To be enabled to contend with success it is evident that the interference and 

 aid of their own governments are indispensable." 



The Corn Laws of England furnish the outstanding example 

 of government " protection" to one interest, in this case, the 

 growers of wheat. Since the whole evil system of Corn Laws has 

 long since been swept into England's large rubbish heap entitled 

 " Reforms," even the champions of protection in England would 

 not defend this unhappy venture in ".protection." In becoming 

 the first gold-standard country and the first free-trade country, 

 England, Hamilton's chief example, showed that the great Secre- 

 tary's two errors came from confusing the practice of the moment 

 with the established policies of the future. 



Present Theory of Protection of Agriculture and Labor. 

 "Wages are high because of the tariff," is now a familiar saying, 

 on the part of some very respectable politicians, about election 

 time in the United States. This is a strange confusing of cause 

 and effect. First, a tariff was asked because wages were high. 

 Natural resources then (and now) were the chief cause of high 

 wages. A protective tariff does not keep out foreign labor; indeed, 

 in the factories enjoying the most protection are found the most 



