CHAPTER XII.

THE ARGUMENTS FOR PROTECTION.

Many Easily Refuted. Most of the common arguments for protection a reader can refute for himself by application of the principles explained in the last two chapters. These arguments seem convincing to an audience not prepared to question, but give way quickly to critical examination. Often a speaker will talk at length on our first duties being toward our family, city, state, and nation—on the wisdom of looking out for ourselves—as if somebody were in danger of making trades to help the other party. People will not fail to be selfish enough, without being urged, especially toward foreigners.1

'Buying Things Out of Town.-The complaint against persons who send away from their home town to buy things is not reasonable if they are thereby better suited. Not many will take the trouble and expense to do so without cause. The fullness of value a dealer offers is doubtful when he talks much against those who do not willingly buy of him. They make him a free gift of a part they pay when they put up with what he offers, in a case where the same price would get elsewhere what they would rather have. As products of some kind are shipped away from a town, its business is only natural when other goods are shipped in. The buyer and the town gain to the extent that the goods shipped in are better values than those offered at home. As explained in Chapter VII., society wants only the number of dealers that will supply its needs best. To support more wastes the public benefit of their labor and capital. A business that customers must lose money to help is not good for the town. This business as itself a customer, to be held and kept on its feet with patronage given it mainly for that purpose, other dealers had better do without who themselves offer good values. Making a man's living for him in order to sell to him is usually trying too hard to get trade. It is well to buy at home,

Buying Cheapest and Selling Dearest. It is said that this is not the practice in every-day life; that a person so directs his buying as to enable and induce his sellers to buy of him.1 This is sometimes true. It is the practice under the crop lien system of the South, by which farmers are kept fed and clothed by the local merchant, in order that they may raise a crop of cotton and pay him with it when gathered. It is simply barter, and that with a vengeance; the merchant having to raise his price about a quarter to balance his risk and trouble, and the farmer, seldom seeing a dollar, and without credit elsewhere, having to take what this one merchant offers. In small towns in any state many people know what it is to "pay in trade."

Value in Cash is the Only Value. Who tolerates such business that can well avoid it, or how under it is progress possible? Where industry is developed, and in all but a minute fraction of the nation's business, a price always means cash. Ready money products are the only ones people handle. That the money is forthbut not when a free gift must be made, which is a loss to the giver, and weakens a dealer's effort to deserve the custom he asks.

Free Trade Gives the World's Best Values.-One reason why the crowded industry of England has long continued so healthy is that free trade gives the people the best values offered in the world, promoting consumption much more liberal than in protected Germany. They buy German and Austrian sugar for less than the cost of producing it, bounties balancing the loss to the grower. The $1,351 each gained last year by buying locomotives in Pittsburgh for Calcutta was worth more to the British stockholders and their nation than giving the order to the Glasgow bidders could have been. Such bargains in imports can be secured so long as home industries can make other things to export.

1"The market is most desirable for you in which you can dispose of your commodities. You must buy in the same market in which you sell. . . . You can better pay ten dollars in potatoes or shoes, for these you have, than half that sum in gold, which you do not possess." (Roberts.)

coming is sufficient for each seller.

Where the buyer

gets it is his concern; the seller has troubles of his own. The best way he can help the buyer and society, aside from proper charity, which is seldom involved, is to devote all his attention to giving full value. Where all pay money,, all who do anything have money. It is then as easy to buy as if everybody would take trade without overcharging against it. Excepting such retail trade as that of relatives and friends, and that held by reason of debt to the buyer, or of social custom, each competent business man, knowing the markets and not lacking credit or capital, saves every dollar he can, both in buying and selling. In buying a large quantity of materials, or in selling a large order of finished products, a difference of a fraction of a cent per pound will take the business. All this is as it ought to be. Only by getting and giving each possible increment of value can society enjoy the full benefits of competition. It is to keep trade from fol

lowing the lowest price that protection exists.

But Buying Abroad is Said to be Different, because our taking of fifty-eight millions of coffee and rubber from Brazil in 1900 enabled us to sell our products there to the amount of only twelve millions.' How does this differ from the case of the tinsmith, repairing the grocer's furnace in a year to the amount of two dollars, yet buying of him family supplies to the amount of a hundred dollars? Should the grocer have his furnace shifted around to permit the tinsmith to work up an equal bill? Each is glad to be able to buy what he needs, and his effort to return favors he does not carry so far as to spend much money for less value than other sellers will give. Our people did not reduce their allowance of coffee by 1 Roberts, 239.

three-quarters because the Brazilians saved money by buying their manufactures in Europe. Coffee and manufactures have certain cash prices which determine the trade in them in the markets of the world, just the same as tinsmithing and groceries have such cash prices in the market of the town. The effect of each person's following that occupation in which demand seems to give him best reward, is to provide each with the money and the goods his labor or capital will bring. Whether he sells much or little to this or that man is a minor matter, so long as in the aggregate he finds his demand and his goods. Tariffs are only an obstruction, similar to difficulty of transportation, which likewise protects the local producer by narrowing the consumer's field of choice.

How it is That Importing Enables Us to Export.-Repeating somewhat from Chapter XI., it is the total of our buying abroad that eventually determines how much foreigners can buy of us, without regard to whether we sell most or buy most of this or that country. Drafts against us for all our foreign buying are sold promptly to New York and London bankers, who buy also our own drafts to collect for our sales in other lands. If at any time the difference of the two totals is a large gold balance to be shipped us, the countries losing that gold feel a money scarcity, and check their buying of imports, which action soon cuts down our sales abroad. Our buying then of more foreign goods, by causing this gold to flow back where needed, eventually increases our exports again, but perhaps not for some time, until business has revived in the countries that had lost the gold, or in other lands. When the home producer needs a tariff to hold the home market, there is something wrong with his prices or qualities. And by depriving his cus

tomers of the better values from abroad, the tariff also narrows the market and lowers the price of such of their products as foreigners demand. It is for his own gain that a person buys abroad, not to induce foreigners to buy of us. Their own gain soon leads them to do that.

Could We Have the Rails and the Money Too? - The argument that we ought to have made steel rails instead of buying them, because we should then have had the money and the rails too, would then have applied to sugar, and to many other things we might have contrived to produce; and could be carried further, if not to show that there should be a shoemaker and a tailor in each large family, at least to show that each town or state should have every industry that could find a market in its borders and force out an existence. But could we have had both the money and the rails? Not unless our capital and labor that made the rails were previously idle. To make the rails they would have had to stop making other things, perhaps those traded with foreigners for the money (exchange) that paid for the rails. One cannot eat his cake and keep it toouse his resources to make other things and still have them free to make rails.1

1 Does Buying at Home Encourage Home Industry ?—Simple arithmetic, Roberts confidently says (p. 244), shows that a person buying foreign goods gives for them an equivalent amount of his own product, and thus adds only the amount of his own product to home wealth; whereas, when he buys home goods he adds to his country's wealth not only his own product, but also the product of the home people who made the goods, and of those who made the component materials. By this view home buying is at least thrice as beneficial. The fact overlooked is that this home buying does not start anybody at work. All had to be busy before to make a living, and at industries not supported by a tariff tax on the public. Buying abroad, strange as it seems, encourages home industry most. Exchange of a less for a greater amount of goods or money value