164 SECTIONAL ADDRESSES. 
editions of his book since 1882, he has earned our gratitude by putting 
before us, if not all, atany rate most of, the main facts of United States tariff 
history. Moreover, he has been one of the few writers who have illustrated 
from modern experience the Ricardian doctrine of comparative costs, the 
more subtle form of the general doctrine of natural advantages. And now 
let us listen to what he has had recently to say of the iron industry of the 
United States during the forty years preceding 1915.°* I am anxious not 
to involve him an inch beyond the distance he would be willing to travel. 
I will therefore quote a sufficiently long passage, and will add that, to do 
him complete justice, it should be read an situ. 
‘It might be alleged that the iron industry would have advanced 
during the forty years in much the same way, protection or no protection. 
And yet the unbiassed enquirer must hesitate before committing himself 
to such an unqualified statement. Rich natural resources, business skill, 
improvements in transportation, widespread training in applied science, 
abundant and manageable labour supply—these, perhaps, suffice to account 
for the phenomena. But would these forces have turned in this direction 
so strongly and unerringly but for the shelter from foreign competition ? 
Beyond question, the protective system caused high profits to be reaped 
and the stimulus from great gains promoted the unhesitating investment 
of capital on a large scale. . . . Thereafter, the community began to get 
its dividend. Prices fell. . . . The same sort of growth would doubtless 
have taken place eventually, tariff or no tariff ; but not so soon, or on so 
great a scale. 
‘No one can say, with certainty, what would have been ; and the bias 
of the individual observer will have an effect on his estimate of probabilities. 
The free trader . . . will be slow to admit that there are any kernels of truth 
under all this chaff. . . . On the other hand, the firm protectionist will find, 
in the history of the iron trade, conclusive proof of brilliant success. And 
very possibly those economists who, being in principle neither protectiomsts 
nor free traders, seek to be guided only by the outcome in the ascertained 
facts of concrete industry, would render a verdict here not unfavourable 
to the policy of fostering “ national industry.” ’ 
The fact that such a verdict is possible in an outstanding case of this 
magnitude is not likely to impede the remarkable inversion of the old 
‘natural advantages ’ argument which we can see taking place nowadays 
in several directions. There has, of late, been an increase in the number of 
States which have independent control over their fiscal policy. The belief— 
which may or may not be well founded—that these countries are fortunate 
in their climates, or soils, or mineral resources, or water-power, or any 
other of the physical gifts of their geographical situation—and these are 
what the ordinary man means by ‘advantages ’—is now suggesting to 
them that, as with any other estate, it may pay them to expend something 
on development. Tarifis or bounties are, of course, from this point of view, 
simply forms of development expenditure. They would be inclined to echo 
the words of Adam Smith, though with a different application: ‘ What is 
prudence in the conduct of every private family, can scarce be folly in that 
of a great kingdom.’ 5% 
52 Some Aspects of the Tariff Question (1915), p. 150. 
53 Bk, IV., ch. ii. (II., p. 29.) 
