PAPERS 
 
 COMMERCE 
 
 AND 
 
 THE TARIFF 
 
 JOHN W. BOOKWALTER. 
 
 NEW YORK: 
 1886. 
 
S-fcN'^Ca'v^ &v\ 
 
AMERICA’S DANGER. 
 
 It is the cherished belief of a large number of the Ameri¬ 
 can people that the United States is absolutely independent 
 of foreign countries, and especially of those of the Eastern 
 hemisphere; that we need not in any way concern ourselves 
 with events which happen in the Old World, but may keep the 
 even tenor of our course, reaping now and then a temporary 
 advantage from war in Europe or famine in Asia, but secure 
 in our destiny and undisturbed in our prospects, whatever 
 aspect affairs may present on that side of the globe. Taken in a 
 purely political sense, this view is substantially correct. In a 
 commercial and industrial sense it is unsupported by fact, and 
 is vitally and perilously false. It is true that with the political 
 and diplomatic relations of European countries, the mainten¬ 
 ance of the balance of power with its intricate and delicate 
 adjustments, or the contention over boundary lines between 
 contiguous nations, the United States has nothing to do. 
 Even the territorial expansion of one or another of the great 
 powers, whether ’ in Asia or Africa, whether by acquisition, 
 occupation or control, if regarded as a political question 
 merely, is of no moment to the people of this country. But 
 when we consider the bearing which the drift of events in 
 that part of the world must have upon our commerce and our 
 most important industries, the case assumes an entirely new 
 aspect. Independence in that sense, whether desirable or not, 
 is evidently impossible. 
 
 Modern facilities of communication have brought all coun¬ 
 tries into closer relations with each other, and produced a 
 state of interdependence which would once have been unat¬ 
 tainable. No differences of race or nationality, and no 
 remoteness of physical separation can enable any people to 
 isolate themselves as formerly from the rest of mankind. 
 The ocean is no longer a barrier to intimate and constant in¬ 
 tercourse and the interchange of commodities. The wonders 
 
4 
 
 AMERICA'S DANGER. 
 
 wrought by steam and electricity have become stale, and the 
 revolution which they have brought about is a theme too 
 trite even for passing comment. But it should be observed 
 that while physical obstacles have been surmounted by them, 
 many prejudices, customs, habits, and traditions have also 
 given way under their influence. The path has thus been 
 cleared for wider and freer commercial expansion. In the 
 Old World especially is this effect to be perceived, for there 
 only does an old order of things oppose by its inertia or by 
 active hostility the establishment of a new system. In our 
 own country the modem commercial spirit found virgin soil, 
 and had no pre-existing social or political conditions to over¬ 
 come. But on the other side of the Atlantic the ancient 
 structure of society has left remains in its laws, usages, super¬ 
 stitions, distinctions of rank and privileges of class, which 
 have been the chief impediments to commercial progress. It 
 would be too much to say that these have disappeared, save in 
 a partial and limited sense, even in the most enlightened of 
 the old countries; but the crumbling of the fabric is unmis¬ 
 takable. In the life of the present generation the giving way 
 of what philosophers define as “ status ” has been marked and 
 rapid throughout all Europe. The reverence in which it was 
 once held diminishes year by year, and its restraining influ¬ 
 ence upon trade and industry and the development of mate¬ 
 rial resources, both near and remote, will soon be wholly lost. 
 
 Thus in Europe and the East have modern inventions changed 
 the face of society, cemented the brotherhood of nations more 
 firmly, and emancipated the forces of production and ex¬ 
 change. To this agency more than to all others combined we 
 may reasonably look hereafter for the maintenance of the 
 peace of the world. Its powerful influence is already seen in 
 the growing disposition to submit international disputes to 
 arbitration. In more than one recent instance, a crisis which 
 would once have spread panic through all the exchanges of 
 Europe has produced no greater effect than a fractional 
 decline in Russian and Turkish securities. And an instruc¬ 
 tive contrast is presented by the fact that, while in the Old 
 World artificial obstacles to commercial activity are being 
 
AMERICA'S DANGER . 
 
 5 
 
 rapidly removed, in our own country, where no such barriers 
 existed, either by nature or by inheritance, we have suffered 
 them to be set up. The monopolies, individual and corporate, 
 which have taken root among us, are scarcely less oppressive 
 than were the shackles of absolutism which Europe is throw¬ 
 ing off. Nor can we reasonably wonder that the example set 
 by our government in its coercive and class legislation should 
 be followed by its citizens, and that the few should seek to 
 thrive by levying tribute upon the many. 
 
 So far from being an exception to the interdependence of 
 nations, the United States is a conspicuous example of that 
 law. Its early settlers and their descendants have worthily 
 maintained the character of the most vigorous and enterpris¬ 
 ing community in the world, but the means by which the 
 country has become populous and rich have largely come to 
 us from abroad. Our development has been in great measure 
 from without. Both in numbers and wealth we have had con¬ 
 stant and for a long time steadily increasing accessions from 
 Europe. Since the year 1820 , when the authentic record 
 begins, 12 , 719,095 immigrants have landed on our shores, and 
 prior to that time it is estimated that 250,000 had arrived 
 since the organization of the Federal government. In all, 
 therefore, about 13 , 000 , 00(3 souls have been added to the pop¬ 
 ulation of this country by foreign immigration. The amount 
 of money which this vast number of people have brought 
 with them cannot, of course, be accurately stated; but on the 
 best attainable data, it is placed at $68 per capita, or an ag¬ 
 gregate sum of about $ 900 , 000 , 000 . This, however, is but a 
 fraction of the wealth which Europe has showered upon 
 America. A far greater amount has come in the shape of for¬ 
 eign capital invested in the United States in the construction 
 of its railways, in working its mines, in manufacturing enter¬ 
 prises, agriculture, and stock-raising, in the purchase of bonds 
 and real estate, and in private loans. Many single instances 
 of such investments made on a large scale will occur to any 
 one conversant with railway and financial affairs. The Erie, 
 the Wabash, the Reading, and the Pacific railways, and 
 many others which might be named, are familiar illustrations. 
 
6 
 
 AMERICA'S DANGER. 
 
 But with these great tributaries, innumerable smaller streams 
 have united to form a vast tide of capital, which has spread 
 throughout our national domain in a fertilizing flood. So 
 great is the aggregate volume that the largest items in its 
 composition are relatively small; and as the nature of nearly 
 all transactions of this kind is such that no official statistics 
 exist regarding them, an approximate estimate only can 
 be made of the amount of foreign capital which has thus been 
 sent from abroad. One such estimate places the sum at not 
 less than three thousand millions of dollars; and it may read¬ 
 ily be believed that, taking into account all classes of invest¬ 
 ments and the whole period of our national history, this figure 
 is rather within than beyond the mark. To put the matter in 
 few words, this country has been for many years a reservoir 
 into which the surplus money and population of Europe have 
 been poured without stint, stimulating every branch of indus¬ 
 try and rendering possible a rapidity of growth which could 
 under no other circumstances have been maintained. 
 
 These have been the direct contributions, so to speak, of 
 the Old World to the development of the New ; but it is not 
 in this way that we have drawn most largely upon the 
 wealth of Europe. It is by the purchase of our products 
 that the European nations, and Great Britain more than any 
 or all others, has helped in the upbuilding of our material in¬ 
 terests. Upon no less comprehensive basis could their struc¬ 
 ture have been raised to the proportions which we now be¬ 
 hold with a just and patriotic pride. To give a complete ex¬ 
 hibit of the extent of our foreign trade in past years would 
 involve a wearisome compilation of figures ; but a glance at 
 some of its salient features will enlighten us in some degree, 
 and may possibly surprise a casual observer who has not 
 paused to investigate the history of our commercial relations. 
 In the last ten years, to go no farther back, the exports of 
 the United States have amounted to more than $7,000,000,- 
 000. Of the single article of wheat, the value sent abroad 
 from this country in the last twenty-four years was up¬ 
 wards of $1,600,000,000 and of flour about $700,000,000. 
 In the nineteen years which have passed since the close 
 
AMERICA'S DANGER. 
 
 1 
 
 of the war, the shipment of cotton from our ports has 
 been more than 55,000,000 bales, valued at more than 
 $3,400,000,000. Our largest total exports in any single 
 year were those of 1881, when the aggregate of domestic 
 products sent abroad, not including specie, reached the colos¬ 
 sal sum of $883,925,947. And it should further be borne in 
 mind, as showing the dominant feature of our commerce, 
 that by far the larger part of our exports has uniformly con¬ 
 sisted of agricultural products. This class of commodities 
 has seldom been less than three-fourths, and has frequently 
 exceeded four-fifths, of the total exports from this country. 
 
 In 1880 the percentage of agricultural products in the total 
 exports was 83.24. For the last five years the average per¬ 
 centage has been 78.42. It may be safely estimated, in gen¬ 
 eral terms, that one-fourth of the product of agricultural labor 
 in the United States for the last quarter of a century has 
 been sent to a foreign market. Of the sustaining power of 
 such a trade, or of its vital importance not only to the farm¬ 
 ing industry, but to every material interest of this country, 
 it is not necessary here to speak in detail. It is a most valu¬ 
 able part of the aggregate trade of the country, but its chief 
 importance is derived from the fact that 26,000,000 of the 
 people of the United States are engaged in agriculture, and 
 that only by this exportation of their surplus product can 
 the price of that which is sold in the home market be fixed 
 and maintained at a paying level. From the industry of 
 this class the great railroad system of our country, with its 
 $7,000,000,000 of invested capital, largely draws its support. 
 The carrying of their products to a foreign market has given 
 in the last decade 80,000,000 tons of freight to be carried 
 eastward by rail and water a distance of more than 1,000 
 miles, and a like amount to ocean transportation, represent¬ 
 ing altogether $800,000,000 worth of business to the carrying 
 companies ; and the domestic carrying trade in the same 
 period has had from this source probably 500,000,000 
 tons of freight for internal distribution. The prosperity 
 of this great class, comprising almost one-half our popula¬ 
 tion, is indispensable to the national welfare. Uo part of 
 
8 
 
 AMERICA'S DANGER. 
 
 the system can permanently thrive if this vital member 
 languishes. 
 
 It has been remarked that the chief among the foreign pur¬ 
 chasers of American products is Great Britain. In how 
 extraordinary a proportion her demands upon our resources, 
 and, therefore, her contribution to our wealth, have exceeded 
 those of any other nation, can only be realized by examining 
 the statistics of our foreign trade. By these it is shown that 
 of the total domestic exports of the United States in the last 
 ten years, amounting, as already stated, to about $7,000,000,- 
 000, a trifle less than four-sevenths, or, to speak with accur¬ 
 acy, $3,933,000,000, have been sent to Great Britain. In the 
 year 1881, the exports from this country to Great Britain 
 were $477,450,619, not including specie or foreign goods 
 brought here and re-exported. Out of 920,000,000 bushels of 
 wheat shipped from American ports in the ten years ending 
 with 1884, 565,000,000 bushels went to Great Britain, being 
 about five-eighths of the whole amount. In the same period, 
 out of 59,000,000 barrels of wheat flour, 31,000,000 were 
 shipped to the English market. Of 640,000,000 bushels of 
 Indian corn exported, 445,000,000 were taken by Great 
 Britain. And of the $2,000,000,000 worth of cotton shipped 
 to foreign ports by the United States in those ten years, more 
 than $1,200,000,000 worth went to the same opulent and 
 steady purchaser. The list of instances might be indefinitely 
 prolonged; but these leading examples not only show the 
 uniform preponderance of England over all our other foreign 
 customers put together, but they do in fact comprise in them¬ 
 selves about one-half of our export trade. 
 
 The causes which have induced or compelled Great Britain 
 to resort to this country for many years past for her supplies of 
 this character may readily be pointed out. Of the older 
 countries of the continent, those which produce a surplus 
 above their own requirements cannot, even in their most 
 fruitful years, fully meet her demands; and hitherto America 
 has been able to count upon the opportunity of making good 
 this deficiency as a merchant counts upon his trade with an 
 old and liberal customer. Even under ordinary conditions 
 
AMERICA'S DANGER. 
 
 9 
 
 this has been a source of large and unfailing profit to our 
 people; but in those years which have been marked by a ser¬ 
 ious falling off in the European harvests, the advantage 
 accruing to this country has been enormous. It was such a 
 failure in the crops of Europe, coinciding wfith a yield of 
 extraordinary profusion on our own soil, and at the same 
 time a cheapening of his supplies to the American farmer, 
 consequent upon a recent financial crisis, that made the years 
 from 1879 to 1882, inclusive, a golden period in the history 
 of American commerce. The balance of trade turned in our 
 favor by $264,000,000 in a single year, and in five years more 
 than $1,000,000,000. A net importation of $167,000,000 of 
 specie, in the years 1881 and 1882, made money abundant in 
 all our financial centers; and the activity of all our industries, 
 agricultural, manufacturing, and mercantile, gave this accu¬ 
 mulating wealth immediate and fruitful employment. There 
 had never been before, there may never be again, so striking 
 a combination of circumstances favorable to the prosperity 
 of our nation. 
 
 The colonies and dependencies of Great Britain, though of 
 vast extent and fertility, have remained up to within a very 
 brief period in what may be called an undeveloped state when 
 compared with their prodigious capabilities. The colonial 
 trade of England has been for many years, it is true, a most 
 important feature of her commerce, especially as regards her 
 East Indian possessions. Her export trade with India alone 
 already exceeds that with the United States. Yet even in 
 India, and still more in other distant parts of her empire, 
 English enterprise, active and pushing though it has been, 
 may be said to have done but little more than break the sod and 
 show the possibilities of boundless wealth which lie beneath. 
 But a new spirit has begun to manifest itself in the dealings 
 of Great Britain with her dependencies, and her policy is to 
 be, now and henceforth, an imperial policy in the most effect¬ 
 ual meaning of the word. The release of the commercial 
 and industrial spirit throughout Europe from the restraint 
 under which it has so long been held, has been alluded to in a 
 former paragraph. And as the forces of progress are 
 
10 
 
 AMERICA'S DANGER. 
 
 nowhere stronger than in Great Britain, while at the same 
 time no other country has carried its dominion so far over 
 land and sea, into such wide areas and diverse channels, 
 so it may truthfully be said that nowhere is the revolution 
 which the advancing tendencies of the age have brought 
 about more marked than in the Eastern policy of England. 
 Her purpose is clearly shown, not only to govern her colonies, 
 but to cultivate and utilize their resources to the fullest 
 extent; to bring them into closer relations with herself; to 
 take their products in exchange for her commodities, instead 
 of resorting to markets where such exchange is refused; and 
 to unify and consolidate them by the acquisition of interme¬ 
 diate territory wherever necessary. It does not matter 
 whether this last mentioned object is accomplished under the 
 forms of occupation and control, as in Egypt, or by direct 
 conquest, as has so recently been the case in Burmah. The 
 intent and practical effect are the same in either case. A 
 consistent and undeviating purpose is manifest throughout, 
 and every feature of a vast and complex policy will be found 
 to lead to the accomplishment of that end. 
 
 India has been for many years a source of wealth to Great 
 Britain, and her expenditures in maintaining her empire and 
 extending her trade in that quarter of the globe have been on 
 a liberal scale. Yet it would almost seem, when we consider 
 the new and broad fields of profitable enterprise which are 
 opening before her in her Indian colonies, that in all that has 
 yet been done she has only scratched the surface of their 
 magnificent resources. In the production of wheat, and cot¬ 
 ton, the rank which India already holds is such as to render it 
 an object of lively interest, not to say of profound uneasiness, 
 to a citizen of the United States. In the year 1884, the ex¬ 
 port of cotton from India was about 1,000,000 bales, valued 
 at $70,000,000. In the cultivation of wheat, it is scarcely ten 
 years since a small beginning was made, with little promise of 
 important results; and already such surprising progress has 
 been shown, that the crop of the present year is equal to that 
 of the United States, and the export about half that from 
 American ports. India, in fact, though but just started in its 
 
AMERICA'S DANGER. 
 
 11 
 
 new career of advancement, has risen even now to the first 
 rank as an agricultural power. Nor will British capital he 
 wanting to maintain and accelerate its growth. For every 
 million of pounds expended there in the past ten millions will 
 be forthcoming in the future, as profitable employment is 
 found for it. The great needs of India are transportation and 
 irrigation; and these needs are fast being supplied. The rail¬ 
 ways already built are more than self-sustaining, and the sys¬ 
 tem, now in its infancy, is yearly spreading to more distant 
 parts of the empire, opening them to British trade. Not only 
 is the soil of India of admirable fertility, but vast tracts are 
 as yet unimproved by any modern methods of culture. It is 
 estimated that 150,000 square miles of territory is thus await¬ 
 ing development by British enterprise; and that the contem¬ 
 plated reconstruction of an old canal in the Punjaub will alone 
 add some 30,000,000 acres to the productive area of the 
 country. The stream of capital which has helped to build the 
 railroads of the United States is turning toward India, where 
 not only there is a prospect of safe investment and substan¬ 
 tial return, but English commodities are gladly taken in ex¬ 
 change for native products. 
 
 In Egypt, though the conditions of occupation are less 
 mature, a like prospect is opening, and it would be difficult 
 to predict from which quarter results of the greater magni¬ 
 tude, commercially speaking, are likely to be realized. The 
 soil of Egypt is of such richness, and the climate so friendly 
 to agriculture, that two crops each year are almost every¬ 
 where raised, and three are attainable. Nearly all the lands 
 are equally adapted to the growth of either wheat or cotton, 
 and of the latter in particular the rate of yield is fully 
 twice that of our Southern plantations, and the quality often 
 superior to our own product. At present the agriculture of 
 the country is mainly confined to lower Egypt, and but 5,000,- 
 000 or 6,000,000 acres are under tillage ; but with the Eng¬ 
 lish occupation come English skill and capital, English 
 methods of reclamation, and implements of labor. The in¬ 
 crease in Egyptian products which may be lqoked for when 
 England is in complete possession of that country—which 
 
12 
 
 AMERICA'S DANGER. 
 
 she will be, to all intents and purposes, at no distant day—is 
 of such extent as may well excite our apprehensions. The 
 prospect thus offered is of no hypothetical or problematical 
 nature. Those who have recently visited Egypt and exam¬ 
 ined into its affairs are well aware that an enterprise has 
 already been organized by an eminent French engineer in 
 conjunction with English engineers and capitalists, which 
 will result in a vast increase of the agricultural resources of 
 that country. Their purpose, which involves an outlay of 
 perhaps $150,000,000, is to construct on the upper Nile a 
 series of dams by which to regulate the flow of that mighty 
 river and utilize it both for irrigating and fertilizing the ad¬ 
 jacent region on either side—at the same time making it 
 navigable to such a distance as to give commercial access to 
 the very heart of Africa. By this enterprise, perhaps the 
 most gigantic engineering project the world has ever seen, 
 and rivaling in its financial scope the operations of the cele¬ 
 brated East India Company of a former day, some 25,000,- 
 000 acres of land in upper Egypt, once cultivated by the an¬ 
 cient Egyptians, will be again brought under the fertilizing 
 influence of the Nile floods. The rich soil of this vast terri¬ 
 tory will thus be made available for the cultivation of wheat 
 and cotton. Still beyond this lie the wide areas of the Sou¬ 
 dan and the regions of the upper Nile, as to which all ex¬ 
 plorers and travelers in that country, among them Sir Samuel 
 Baker, agree that their soil is admirably adapted to the rais¬ 
 ing of cotton and wheat. The project above mentioned 
 waits only for the establishment of British control to be car¬ 
 ried into effect. That its promoters will be followed by 
 other representatives of the energy and capital of England 
 cannot be doubted ; nor will they lack an ample field of oper¬ 
 ations when the pacification and subjection of Egypt by the 
 arms and diplomacy of Europe have been fully achieved. 
 
 The intrinsic worth of such a possession to the country 
 which has the sagacity to perceive and the means to employ 
 its resources is great beyond present measurement. England 
 might well improve the opportunity to grasp so valuable a 
 prize, even were she not in a manner thrust out by an 
 
AMERICAS DANGER. 
 
 13 
 
 unfriendly and exclusive policy from regions to which she has 
 hitherto mainly looked for her imports of breadstuffs and 
 cotton. Being thus unwisely repelled from one source of 
 supply, it may well be expected that she will use her energies 
 promptly in a more inviting direction. Yet it is not the 
 direct value of Egypt as a dependency which gives it its 
 chief importance in the foreign policy of Great Britain. The 
 significant feature, the keynote of British dealing with 
 Egyptian affairs, is the fact that through Egypt lies the road 
 to India—the surest, safest and most permanent road, by 
 which, the Suez Canal being also virtually in her possession, 
 her Indian empire can be reached and maintained. Long ago 
 one of the most brilliant of English authors gave a forecast 
 of the situation which now seems on the point of being real¬ 
 ized, in his prophecy of the day when “ the Englishman, lean¬ 
 ing far over to hold his loved India, will plant a firm foot on 
 the banks of the Nile, and sit in the seats of the faithful.” 
 Every step in the present course of European affairs testifies 
 to the accuracy of that prediction, and it can scarcely be 
 doubted that this generation will witness its complete fulfill¬ 
 ment. 
 
 But the imperial policy of Great Britain reaches still further 
 than this. So broad is ics scope that it contemplates not only 
 reliable means of access to India, but the extension of British 
 trade beyond that country. Between India and China the 
 shortest and most convenient route is through the kingdom 
 of Burmah; and England has resolved that Burmah shall not 
 constitute a barrier to her Chinese trade. It may be doubted 
 whether the British mind, alert as it usually is in regard to all 
 matters affecting the commercial interests of the nation, 
 would so soon have been awakened to the importance of Bur¬ 
 mah as a link in the commercial chain but for the recent 
 utterances on this subject by Mr. Colquhoun, the well-known 
 traveler and journalist, and notably an address delivered by 
 him before the London Chamber of Commerce, in which he 
 pointed out the demands of the situation, and urged the adop¬ 
 tion of decisive measures. Whether in deference to his opin¬ 
 ion or not, his advice was speedily followed. The grounds 
 
14 
 
 AMERICA'S DANGER. 
 
 on which war with Burmah was declared were no doubt gen¬ 
 uine and sufficient; and it is true that King Theebaw and his 
 system of government were on general principles an offense 
 to civilization. But the underlying purpose which the British 
 army in Burmah is marching ta accomplish is, nevertheless, 
 the clearing of a path by which England may reach as nearly 
 as possible a monopoly of the Chinese trade. The stubborn 
 conservatism with which China has long resisted both politi¬ 
 cal and commercial overtures from other nations is fast giv¬ 
 ing way. Modern institutions and practices are being ad¬ 
 mitted. The foundation of a railway system has been laid, 
 which admits of indefinite expansion, and this work, it is ap¬ 
 parent, will be done with British capital under the superinten¬ 
 dence of British engineers. Indeed, even now, an English 
 syndicate headed by the great house of Barings on the one 
 hand, and a German syndicate headed by Herr Krupp on the 
 other, are in active competition for the control of railway 
 construction in China, each seeking the much-coveted conces¬ 
 sion which it is believed the Chinese government is ready to 
 grant. It has been our habit to regard the people of China 
 and the Eastern nations generally as poor, semi-barbarous, 
 and incapable of offering a market for the products of a great 
 manufacturing community like that of England. If they have 
 ever merited this opinion, they are fast outgrowing it. And 
 in the very fact that they are emerging from what we have 
 chosen to regard as a state of imperfect civilization to one of 
 progress and enlightenment lies the secret of their new im¬ 
 portance. They are prepared to employ and consume in mul¬ 
 tiform ways the capital and the commodities of Europe. 
 
 Their wants, which are many and increasing, have yet to be 
 provided for; while those of our own population are not only 
 less in volume by reason of our inferior numbers, but it is 
 evident that they have in many directions been oversupplied. 
 We have reached, so to speak, the point of saturation; while 
 China and other Asiatic communities, if the comparison may 
 be permitted, are lying like a vast sponge, ready to absorb 
 the energies, the products, and the accumulating wealth of 
 Europe. The exchange of commodities with a population of 
 
AMERICA'S DANGER. 
 
 15 
 
 four hundred millions is a commercial opportunity of which 
 England, the greatest trading nation on the globe, will not 
 fail to make profitable use. Nor will she find the gates of 
 China shut against her in retaliation for the wholesale mas¬ 
 sacre of Chinamen within her borders. It is the policy of 
 Great Britain to protect the races whose labor is, or may 
 become, useful in building up her commerce; while it seems 
 to have been reserved for our owm country to set the exam¬ 
 ple of a relentless persecution of an unoffending and indus¬ 
 trious people. 
 
 The alarm with which China regards the advance of Russia 
 on her northern and western frontier and of France on her 
 southern border tends to draw her into friendly relations 
 with England, by whom she is threatened with no such in¬ 
 roads. But the whole aspect of eastern affairs justifies the 
 belief that England and Russia will ultimately arrive at a 
 peaceful, if not a cordial understanding, and that their solu¬ 
 tion of the problem will give to each what it chiefly desires, 
 at the price of conceding what is but of nominal value. 
 Above all things else, England seeks the security of its 
 Indian empire and its Chinese trade, and the control of 
 Egypt as incidental to these. For the sake of thus consoli¬ 
 dating its empire and expanding its trade, it may well consent 
 that Russia shall absorb the decaying remnant of the Otto¬ 
 man power and extend its dominions to the Persian Gulf. 
 With this ambition gratified, it is probable that Russia will 
 not molest the fortifications of Herat, but will relinquish 
 whatever designs she may have entertained upon Indian 
 territory. The time seems not far distant when Asia will 
 be wholly under the dominion of three races—the Muscovite, 
 the Mongolian and the Anglo-Saxon—each possessing a vast 
 portion of its area, and necessarily respectful of its powerful 
 neighbors. Such an alliance, comprising nearly two-thirds of 
 the population of the globe, would dwarf any political 
 arrangement the world has yet seen. The partition of Asia 
 would establish a balance of power whose huge proportions 
 would impart a new significance to the term, ^uid whose 
 weight would be of itself a guarantee of permanence. 
 
16 
 
 AMERICA'S DANCER. 
 
 Of the fact that European capital and European states¬ 
 manship are both tending toward enlarged dominion in the 
 Eastern hemisphere, Russia and England are the most prom¬ 
 inent examples. But they are by no means alone in that re¬ 
 gard. Other continental nations, according to their military 
 resources or financial strength, are seeking to gain new foot¬ 
 holds in Africa and Asia. France in Tonquin, Anam and 
 Madagascar, Belgium on the Congo, Italy on the Red Sea, 
 and even Spain in the islands of Oceanica, are each striving 
 to plant the seeds of wider national expansion, or tightening 
 their grasp on acquisitions already made. Under the stimu¬ 
 lus of this prevailing spirit of enterprise it may almost be said 
 that another New World is rising within the boundaries of 
 the Old. This formidable rival, if it does not take from us 
 the title, bids fair to rob us of the benefits which of right 
 should be ours. Hitherto they have flowed upon us in a co¬ 
 pious stream, and would still be securely enjoyed if the laws 
 of nature and the forces of trade were not perverted by er¬ 
 roneous legislation. It is a false, though a popular idea, that 
 the East is a land of exhausted resources. On the contrary, 
 it has vast and fertile regions waiting to be regenerated by 
 the forces of civilization. The field has in many parts as yet 
 been barely touched, while in others the results already at¬ 
 tained show that no limit can be set to the possibilities of 
 future growth. It is now nearly three years since the writer 
 made the prediction, then regarded as a most incautious one, 
 though based on personal observation, that India would 
 speedily become a dangerous competitor with the United 
 States in the production of wheat. How strikingly that pre¬ 
 diction has been verified the statistics of the grain trade of 
 1885 abundantly prove. The wheat market of Chicago has 
 testified to its accuracy by accumulated stocks and depressed 
 quotations. The fact has been realized, and should always 
 be borne in mind by those who examine this question, that 
 to destroy the profits of the American wheat-grower it is not 
 necessary that India should raise a crop which will meet the 
 whole denfand of Europe. It has but to furnish such a pro¬ 
 portion of the amount as will prevent an advance in the 
 
AMERICA'S DANGER. 
 
 17 
 
 price to a point which will repay the cost of production by 
 our farmers. This it has now done, and will continue to do. 
 And it can scarcely he doubted that the present and future 
 capabilities of India as a wheat-growing country will be 
 emulated by Egypt in the production of both wheat and 
 cotton. How speedily the effect of increased cotton pro¬ 
 duction in Egypt will be felt in this country, we have unfor¬ 
 tunately the most ready means of judging in the parallel 
 case already before us. The cotton crop of that region may 
 not rise at one bound to the dimensions of our own; but 
 what the result will be, should the Egyptian cotton grower 
 throw upon the common market within a few years even one 
 million bales more than he now contributes of his cheaply 
 produced cotton, the American cotton planter may well infer 
 from the influence on the price of wheat which the relatively 
 small annual exportation of thirty millions of bushels from 
 India has already exerted in the common market of Europe. 
 
 He may find himself compelled, like his wheat-growing 
 neighbor in the northwest, to sell his entire crop at the cost 
 of production, or even below that figure. All that has been 
 accomplished in either India or Egypt up to the present 
 time has been done, it should be borne in mind, chiefly by 
 rude native methods and implements. Especially is this 
 true of Egypt; yet even under these imperfect conditions, 
 and with a cultivated area of less than 6,000,000 acres, Egypt 
 has been found capable of exporting $60,000,000 worth of 
 products in a single year. It is estimated that the country 
 has this year produced, notwithstanding its disordered 
 state, 800,000 bales of cotton of 600 lbs. each. The writer 
 saw at an exhibition in Cairo a few months since—conducted 
 under English auspices and being the first ever held—fifteen 
 hundred samples of cotton from different parts of Egypt, 
 extending as far as the region of Kordofan. That the indus¬ 
 try under existing circumstances should show such activity is 
 a strong token of its nascent capabilities. With the area of 
 production increased five-fold by reclamation of lands, with 
 European money and skill applied to its tillage, and with the 
 Yast population of India within ten days’ sail to be drawn 
 
18 
 
 AMERICA'S DANGER. 
 
 upon for the needed labor, the most moderate estimate of the 
 probable results and of their influence upon American indus¬ 
 tries must startle the reflecting observer. If our present policy 
 is not speedily reformed, we may justly fear that the paralysis 
 which has fallen upon our grain trade by the rise of India in 
 the scale of production will be brought upon our cotton-grow¬ 
 ing interest, with even more disastrous results, by the com¬ 
 petition of Egypt. 
 
 Nor is it only in our wheat and cotton industries that we 
 are threatened with loss by a rivalry to which our own folly 
 has given rise. The foreign demand for American fresh 
 meat has been for some years the source of a profitable trade, 
 and here also competition has sprung up, and a British colony 
 again stands in our path. Five years ago a commerce of this 
 kind with Australasia was scarcely dreamed of; but so rapidly 
 has it grown that great fleets of vessels are now employed in 
 conveying the frozen beef and mutton of Australia to the 
 English markets, and it is probable that little short of one mil¬ 
 lion carcasses will be thus shipped during the present year. A 
 trade in the same commodity has been established between 
 England and the Argentine Republic, a country of vast 
 extent and scarcely less favored than our own in variety of 
 climate or fertility of soil. Hardly a decade since it was a 
 purchaser of our agricultural products. No longer a cus¬ 
 tomer, it has become under the stimulus of European capital 
 an active competitor. 
 
 It may be a question whether American interests are most 
 seriously menaced by the direct competition of the multiply¬ 
 ing army of foreign producers, or by the diversion of 
 European capital from investment here to more profitable* 
 because free and untrammeled use in Egypt, India and China. 
 That it is finding such employment in constantly increasing 
 volume is matter of daily observation. The United States 
 has been heretofore an inviting field for foreign investment, 
 and in the last fifty years has absorbed an enormous share 
 of the surplus wealth of Europe. Under normal conditions 
 it would continue to attract the capital of the world by such 
 inducements of cheap and productive land, variety of climate 
 
AMERICA'S DANGER. 
 
 19 
 
 and freedom from political or social impediments as no other 
 country can present. But in spite of this fortunate combina¬ 
 tion, it has at length become manifest that the industries of 
 America have been overdeveloped and that the reservoir 
 which has been so liberally fed will hold no more. The rail¬ 
 ways show it in reduced earnings and uncertain dividends, 
 manufactures in diminished profits, and agriculture in depre¬ 
 ciated prices. The relief which might be found for this con¬ 
 gested state of our industries in direct and unrestricted trade 
 with two hundred and fifty millions of people across the oceau 
 is forbidden by the policy we have chosen to adopt, which 
 instead of welcoming, disdainfully rejects such aid. Turned 
 away from us by this denial of reciprocal relations, the money 
 of Europe seeks other opportunities of investment, and is 
 finding them in abundance. And the loss to which we have 
 thus subjected ourselves is a double one, for the capital which 
 should still be nourishing our industries and quickening our 
 growth is not only withdrawn, but is set at work elsewhere 
 in active opposition to our interests. Every dollar thus 
 transferred is twice subtracted. In ceasing to contribute it 
 begins at once to compete. 
 
 The vast population of Asia, Africa and Australia, toward 
 whom the current of European capital and enterprise is thus 
 strongly tending, are not, as we have been wont to assume, 
 people of few wants, incapable of supporting a large and 
 profitable commerce. On the contrary, their purchasing 
 power is in many instances .shown to be greater than our 
 own. The amount which the people of the United States 
 buy of Great Britain averages $2.50 per capita. In Australia 
 the average for many years has ranged from $35 to $40 ; 
 in the Straits Settlements and Hong Kong it is $45 to $70; 
 In Cape Colony and Natal $30. Taking the British colonies 
 as a whole, the range is from $10 to $50 per capita, exclusive 
 of India. That country stands much lower, lower even than 
 the United States, but it has steadily advanced for the last 
 twenty-five years, and a small figure per capita is not to be 
 lightly regarded when it applies to a population of two hun¬ 
 dred and fifty millions. As a purchaser of British com- 
 
20 
 
 AMERICA'S DANGER. 
 
 modities, India has already risen to the first rank in the total 
 amount of its import of those goods, and Australia, another 
 British dependency, is rapidly pushing its way to the second 
 position, now held by this country. The statistics given are 
 those of Mr. Colquhoun, and the comment which he makes is 
 a just and significant one, namely, that the trade of Great 
 Britain follows her flag. Nor is it only in the Eastern hemis¬ 
 phere that she has established trade relations on the basis of 
 mutual advantage. In South America also she has found 
 profitable, customers. The average purchases of her com¬ 
 modities in Uruguay are $18 per capita; in Chili, $4.50; in 
 the Argentine Republic, $9. And as an example of the fact 
 that where commercial intercourse is unrestrained capital finds 
 safe and profitable investment, the announcement has recent¬ 
 ly been made that $59,000,000 is to be expended by English¬ 
 men in railway and harbor improvements in the Argentine 
 Republic. It is also worthy of note that in the same quarter 
 a wheat-exporting capability is beginning to manifest itself, 
 which adds to the volume of competition the American far¬ 
 mer is hereafter to meet; a competition which had its birth 
 in the unfettered trade relations enjoyed by other countries, 
 and which he might have escaped, and could even now hope¬ 
 fully encounter, were no artificial burden laid upon his 
 shoulders. 
 
 The question of vital interest to America is this : By 
 whom are the vast and growing wants of the European na¬ 
 tions in future to be supplied ? It is well to consider the 
 probable extent of those requirements, in order that we may 
 rightly estimate the gravity of the situation. It may be rea¬ 
 sonably predicted that in the next twenty years Great Britain 
 alone will be compelled to purchase 100,000,000 tons of wheat, 
 and 120,000,000 bales of cotton. Enormous as these aggre¬ 
 gates may seem, the figures are justified by her present rate 
 of demand and a moderate allowance for the growth of her 
 population and expansion of her industries. The value of 
 products of the soil which England and Continental Europe 
 will be compelled to import in the ensuing quarter of a cen¬ 
 tury may be safely computed at forty thousand millions of 
 
AMERICA'S DANGER. 
 
 21 
 
 dollars. To no country on the globe would recourse more 
 naturally be had than to our own for the greater part of these 
 products, were the laws of nature and the advantages of 
 situation alone to determine the choice. Our lands are fertile 
 and cheap. Our variety of soil and climatic conditions pro¬ 
 tects us from the liability of a general failure of our harvests. 
 But no rich endowment of nature, no fortunate geographical 
 position, can prevail against the law of self-interest which 
 governs all human transactions. We shall have no cause to 
 wonder or complain if Europe, under the dictates of that 
 impulse, chooses to trade with eight hundred millions of peo¬ 
 ple in the East who will eagerly take European commodities 
 in exchange for their products, rather than with fifty-five 
 millions in the West, who refuse to deal on a basis of recip¬ 
 rocity. England with all her wealth cannot afford, and as¬ 
 suredly is no longer compelled, to obtain a large share of her 
 supplies from a nation which, like the United States, buys of 
 her people less than one-half as much as it sells to them. 
 
 And as her trade follows her flag, so her capital will take 
 the direction of her trade in every form of investment, in the 
 building of railroads and canals, in the reclamation of lands, 
 and in the development of great territories as virgin to 
 modern industrial methods as Dakota or Montana. With 
 other nations of Europe the same tendency prevails. The 
 confidence which encourages such employment of capital is 
 not lacking. Wanned by the new spirit prevalent in Euro¬ 
 pean affairs, it has grown and taken firmer root; and its 
 fruits are visible in broader and bolder enterprises, in in¬ 
 creased faith in the permanency of values and the mainte¬ 
 nance of national and individual honor. Alike in finance and 
 commerce, in public and private transactions, this sense of 
 security is manifest. Even the recent Egyptian loan, despite 
 the enormous burden of debt resting on that country, and 
 the political chaos in which it was plunged, was taken with 
 such eagerness that the subscriptions covered ten-fold the 
 amount required. So keen was the competition for it, in 
 fact, that great care was required in its apportionment to 
 avoid the creation of jealousy between the leading financial 
 
22 
 
 AMERICA'S DANGER. 
 
 centers ; while at the same time American stocks were being 
 held at a low figure, yet without tempting the capital which 
 sought of its own accord what appears to have been regarded 
 as a more eligible investment. Encouraged by evidences of 
 increased stability, and strong in their reliance upon the fu¬ 
 ture, England and her continental neighbors are turning with 
 one accord to the limitless resources which modern facilities 
 of intercourse have brought within their grasp, and the ex¬ 
 tent of which they have but lately begun to realize. And 
 thus while we have been vaingloriously assuring each other 
 of our commercial independence of Europe, regarding it as 
 bound by its necessities in any event to contribute to our en¬ 
 richment, Europe has been daily drawing toward a position 
 in which it will be, in a sense most injurious to our financial 
 and industrial interests, independent of the United States. 
 
 This is America’s great and imminent danger. The policy 
 of exclusion, the doctrine that a foreign customer, the sup¬ 
 plying of whose wants would be a source of incalculable 
 wealth, should be repelled instead of invited, has already 
 shown its blighting effect upon our commercial prospects. 
 By our tariff laws we shut our gates against mankind. We 
 lay an unequal burden on the American farmer by artificially 
 increasing the cost of his clothing, his tools, his household 
 utensils—of every article, in short, which his land does not 
 produce; while that which he raises he is compelled to sell in 
 competition with the low-priced labor of the Old World. In 
 some important respects, it is to be feared, the mischief which 
 has been accomplished no longer admits of repair. No revi¬ 
 sion of the laws by which American trade is bound can restore 
 American supremacy in the grain markets of the world. The 
 scepter of that dominion has passed from our hands. The 
 American farmer no longer holds, as he once did, the position 
 of dictator in the European market. It is rather the six-cent 
 ryot of India who now takes precedence at that board, and 
 who is able, if not to supply all the wheat which Europe re¬ 
 quires, at least so to load the market with his cheap product 
 as to depress the price below what to the American wheat- 
 grower is a living figure. For the cotton industry of our 
 
AMERICA'S DANGER. 
 
 23 
 
 country there may yet be hope, if wiser counsels than those 
 of the past shall prevail. But a persistent denial of equitable 
 trade relations will inevitably bring the same result in this as 
 in our cereal exports, which have dropped to less than half 
 their former volume. If our laws still make war upon our 
 trade, the time is not far off when the cotton planter of our 
 Southern States will be thrust from his high place, and the 
 despised Egyptian fellah will reign in his stead. Even the 
 cattle breeder of our Western ranges may find a successful 
 rival in the Australian bushman, whose cargoes of frozen 
 meat are daily arriving in the ports of Liverpool and London. 
 Thus the ^world’s markets for food and textile products, 
 which by right we ought well nigh to monopolize, are slip¬ 
 ping from us one by one. No well wisher of his country can 
 see without concern this needless sacrifice of the magnificent 
 opportunities of wealth and growth which Providence has 
 placed at its command. But while this folly has already 
 wrought lasting injury, a timely retracing of our steps may 
 avert some of its worst results. A part, at least, of the splendid 
 heritage which we have flung away may yet be saved. And 
 so long as this is true, no voice should be silent, no influence 
 should be withheld which can aid in awakening and enlight¬ 
 ening the public mind, in establishing sound views of national 
 policy, and in conforming our legislation to those provisions 
 of nature which we have made many futile efforts to repeal, 
 but which, ignore or defy them as we will, must ultimately 
 control our destiny. 
 
 John W. Bookw.alter. 
 
 [Communicated to Bradstreet’s, Dec. 12, 1885.] 
 
THE BURDEN OF PROTECTION AND WHERE 
 IT FALLS. 
 
 To the Editor of Bradstreefs: 
 
 Sir: —The article in your last issue signed “ G.,” and entitled 
 “Foreign Markets and the Tariff,” expresses disagreement 
 with some of the positions taken in my communication of two 
 weeks’ earlier date. Before replying to it, I wish to express my 
 appreciation of the temperate manner in which the writer of the 
 article referred to has dealt with the subject, and which is in 
 strong contrast with the tone of many utterances on that side 
 of the question. It is refreshing, because somewhat unusual, 
 to meet with a controversialist of that writer’s way of think¬ 
 ing who deals with this topic, like him, in a sincere and 
 earnest temper, and instead of indulging in the customary 
 strain of invective, and relying upon such phrases as “ pauper 
 labor ” and “ British gold ” to serve in the place of argument, 
 shows a desire to discuss the matter with candor and accord¬ 
 ing to the dignity of his theme. 
 
 The first point which he makes, namely, that the railroads 
 of this country have been carrying the grain of the Western 
 farmers to the seaboard at a loss is, I regret to say, beyond 
 dispute as a matter of fact. Such loss, and one very heavy in 
 amount, has undoubtedly been incurred. To his question 
 upon whom this loss has fallen, I should reply that a part of 
 it, certainly, has been borne by the American stockholders in 
 those roads. But another portion, if not the larger one, has 
 fallen upon the capitalists of England and continental Europe 
 whose money was invested in the building of the roads, and 
 who have waited patiently, but in vain, for a return from 
 their investment. The history of the Wabash, the Erie, the 
 Denver & Rio Grande, and many other roads is illustrative 
 of this point. And it is a highly natural sequence that Euro¬ 
 pean, and especially English capitalists, should turn from 
 
THE BURDEN OF PROTECTION. 
 
 25 
 
 railroad ventures in America, which yield them very uncer¬ 
 tain returns, if any, to enterprises of like character in India, 
 which they find to be a secure and profitable investment. 
 That such is the case with the East India railroads the statistics 
 of the rapidly developing system of that country will show. 
 
 But let us suppose a state of commercial freedom in which 
 the Western farmer was permitted to realize the full ex¬ 
 changeable value of his grain by having unobstructed access 
 to the markets of the world for the purchase of commodities. 
 He would then no longer produce the grain at a loss, nor 
 would the railroads carry it at a loss. They might then 
 charge him such rates of freight as would be amply remuner¬ 
 ative to themselves, yet would not be felt as a burden by 
 him. Moreover, under such a system of unrestricted ex¬ 
 change, the demand for our grain abroad, and the production 
 on our soil, would be vastly increased, perhaps ultimately two 
 or three fold. There would then, we may well believe, be no 
 further complaint of insufficient employment for our railroads, 
 or of inadequate tolls upon their traffic. The present railroad 
 system of the United States, exaggerated as it is, and costly 
 as it has been, absorbing $7,000,000,000 of capital, would then 
 be found too limited for the business which would be 
 thrown upon it. Even the paralleling of lines, in advance of 
 any requirement of traffic, which has been found so wasteful 
 and fatal a policy, would then be justified by the immense 
 volume of freight to be carried to and from the seaboard, the 
 products of our soil going abroad, and the commodities 
 of Europe coming in return, to be distributed 1,500 miles in¬ 
 land. And the same increase of traffic would be manifest in 
 the ocean carrying trade, with the same result of profit 
 instead of loss, and of thriving activity instead of depression 
 and stagnation. The extinguishment of a few industries 
 which employ but limited capital, which have no natural 
 home among us, and can only be maintained by a heavy tax 
 on our whole community, might well be viewed with equa_ 
 nimity when thus compensated by so vastly increased a devel. 
 opment of our natural resources. 
 
 In the year 1881, the export of wheat from this country 
 
26 
 
 THE BURDEN OF PROTECTION 
 
 was 150,000,000 bushels; of flour, 8,000,000 barrels, and of 
 corn, 90,000,000 bushels—the total of these three classes of 
 breadstuffs amounting to about 8,000,000 tons, which was 
 carried an average of one thousand miles or more upon our 
 railroads. It was this extraordinary volume of the carrying 
 traffic of that and the preceding year which gave so marked 
 an impetus to railroad building in America, and has resulted 
 in the expansion of the system to its present proportions. 
 The conditions which existed from 18V9 to 1882 were the 
 result of a combination of causes which may never occur 
 again, the continued failure of foreign harvests being chief 
 among them; but, practically speaking, those conditions, and 
 the prosperity which flowed from them, might be made per¬ 
 manent in this country if a policy of commercial freedom 
 were adopted. 
 
 It is the habit of protectionists to say, patronizingly, that 
 they have created a home market for the products of Ameri¬ 
 can farmers, leaving it to be inferred that but for protection 
 they would have no market. That this is a fallacy is evident 
 if we consider that by modern inventions and appliances 
 Europe is brought as near this country as two States of our 
 Union were to each other a generation since; and by the laws 
 of trade the same interchange of products would take place 
 between our Western farmers and the European manufac¬ 
 turers as that now carried on between our Western and 
 Eastern States. It would be even more extensive, because an 
 intermediate carrying trade would be created, which would 
 not only employ thousands of men and hundreds of millions 
 of dollars of capital, but would require large supplies for con¬ 
 sumption by its employes. Suppose that under a system of 
 free exchange the export of cereals from this country should 
 be annually 350,000,000 bushels more than now (and this is a 
 very low figure compared with what would be realized), there 
 would be given to the carrying trade 10,000,000 tons addi¬ 
 tional freight to be transported, say one thousand miles by 
 rail—a sufficient amount to lift our whole railway system to 
 a paying level, and to load 2,000 vessels of the largest size 
 now crossing the ocean. Nor, in the event of this free ex- 
 
AND WHERE IT FALLS. 
 
 27 
 
 change of products for commodities, would the cost of living 
 be increased to the manufacturing and other non-agricultural 
 classes. They would obtain their supply of food-products as 
 cheaply as before; while at the same time the value of those 
 products to the farmer would be vastly enhanced. Even at 
 the present low price of grain, falling, perhaps, under exist¬ 
 ing conditions, below the cost of production, the farmer 
 would realize a handsome profit. 
 
 Even as the case now stands, our export of agricultural 
 products is far greater, relatively to our whole production, 
 than your correspondent has represented it to be. His error 
 is remarkable, but doubtless unintentional. Instead of con¬ 
 suming at home “ more than 90 per cent, of all our products 
 of agriculture,” leaving but 10 per cent, for export, as he 
 states, the fact is that we send abroad about one-fourth 
 of all we raise. Of wheat, we have in one year (1880) 
 exported two-fifths of our entire crop; of cotton, over five- 
 sevenths of all that is grown in the United States goes 
 abroad, Great Britain alone taking more than one-half of the 
 entire shipment. The whole annual product of agricultural 
 labor in this country is estimated, as accurately as the data 
 will admit,.at 12,500,000,000, and the annual export is about 
 $600,000,000, constituting three-fourths or, in some years, 
 four-fifths of the whole volume of exports from the United 
 States. And the question whether in this most important of 
 all our industries we ought to compete with the cheap labor 
 of foreign countries is a wholly gratuitous one; for we must 
 and do so compete, whether we will or no. The fact should 
 never be lost sight of, in considering this matter, that the 
 price at which our farmers are obliged to sell their surplus 
 governs that of the whole crop. And this price is not fixed 
 in New York or Chicago, but in Mark Lane, Liverpool and 
 Havre. The export of 120,000,000 bushels of wheat from 
 India in the last five years, while it has formed but a part of 
 the European supply, has been quite sufficient to break 
 the price in that market, and consequently in our own. 
 
 But for this advent of India among wheat-exporting 
 countries, the price of that cereal in Chicago would not 
 
THE BURDEN OF PROTECTION 
 
 have fallen below 90 cents, as we bave now seen it 
 for many months. The close sympathy which exists between 
 our leading grain markets and the far Eastern region 
 with which we have now to compete is illustrated by the im¬ 
 mediate effect of any change in the situation there upon the 
 trade in our own centers. It is not long since a cable tele¬ 
 gram reporting a flood in Bengal, from which disastrous re¬ 
 sults were apprehended in the wheat harvest for the year, 
 caused at once an advance of several points in the Chicago 
 market. And thus is almost daily exemplified the fact 
 which I have stated on d former occasion, showing the cruel 
 injustice which the American farmer suffers from our per¬ 
 verted trade relations, that while the price of that which he 
 buys is determined by the fiat of legislation, tbe price of that 
 which he sells is fixed by the Indian ryot working for six 
 cents a day. And the prospect that what the Indian fanner 
 has done as regards our wheat-growing interest the Egyptian 
 fellah may presently do in relation to our cotton industry is 
 one that I cannot but view with alarm. 
 
 To place at such a disadvantage as this an industry so ex¬ 
 tensive as the agriculture of the United States, is in every 
 point of view unwise and disastrous. In magnitude and im* 
 portance, in the amount of capital invested, and in the number 
 of persons employed, no other interest approaches it. About 
 47 per cent, of the population of this country are engaged 
 in farming, and the value of the farm property is some $12,- 
 000,000,000, or more than four times the entire capital in¬ 
 vested in manufactures. The railroad interest is largely de¬ 
 pendent upon agriculture, receiving probably one-third of its 
 traffic from that source. From the railroad system the coal¬ 
 mining industry derives its support in great measure, and 
 thus in like manner has its ultimate foundation in the farm¬ 
 ing interest. Whether taken by itself or together with its 
 correlated industries, which fire so many that their mere enu¬ 
 meration would exceed the limits of this article, agriculture 
 in the United States is beyond all comparison the chief em¬ 
 ployment and foremost interest of its people, and if any 
 preference in shaping their policy were justifiable, it is here, 
 
AND WHERE IT FALLS. 
 
 29 
 
 beyond all doubt, that favor would be most wisely shown. 
 It is a strange perversion of justice and sound business prin¬ 
 ciples, to say the least, that a discrimination of precisely the 
 opposite character is made, and an unequal burden is imposed 
 where its effect must be most calamitous and far-reaching. 
 
 How great is the loss sustained by the farmers of America 
 by the legislation which forbids them to exchange their pro¬ 
 ducts for the commodities they require in the open market of 
 the world may be estimated from official statistics with a 
 fair degree of accuracy. The yearly product of their labor, 
 as already stated, is valued in round numbers at $2,500,000-, 
 000. The. manufactured goods for which this product is ex¬ 
 changed are enhanced in cost by protective legislation at an 
 average rate of 47£ per cent. This rate, it should be here 
 remarked, is higher than formerly ; first, as a result of the 
 doings of a tariff commission from which an abatement of 
 duties was expected, but which proved instead to be a covert 
 agency for increasing them and was justly regarded by the 
 protectionists as a “ blessing in disguise ; ” and second, by 
 reason of a general decline in the value of manufactured 
 commodities the world over, the effect of which was to make 
 specific duties a larger percentage upon cost, and therefore 
 relatively higher, though not changed in absolute amount. 
 At the average rate of 47£ per cent., it is manifest that the 
 farmer is obliged to give about one-and-a half bushels of 
 wheat for an article which if he enjoyed commercial freedom 
 he could get for one bushel. His crop is therefore deprived 
 of one-third of its exchangeable value, and the loss incurred, 
 on the basis of the agricultural product of 1880, is $800,000,- 
 000. With our present population the figures would doubt¬ 
 less go still higher, and the annual sacrifice which the con¬ 
 sumers of manufactured goods in this country, not engaged 
 in protected industries, are required to make, would reach 
 nearly one thousand millions of dollars. This is a heavy 
 price to pay for the privilege of “diversifying” our in¬ 
 dustries. 
 
 It is very true, as your correspondent remarks, that we 
 have bought of England in five years about $1,000,000,000 
 
30 
 
 THE BURDEN OF PROTECTION 
 
 worth of goods ; and it is also true that from all foreign coun¬ 
 tries in that period, England included, we have bought some 
 $2,000,000,000 worth and have paid for them with our agri¬ 
 cultural products. The unpleasant feature of the case is the 
 reflection that if we could have exchanged those products for 
 goods without restriction or tax, we might have had nearly 
 $3,000,000,000 worth for the same outlay on our part—a 
 clear gain in our foreign trade alone of $1,000,000,000. That 
 we should have made a corresponding gain on the far greater 
 bulk of commodities which we have bought at home is a 
 plain inference from the existing features of the case. It is 
 shown by the fact that so large an amount of goods is manu¬ 
 factured abroad and sold to our people in spite of the inter¬ 
 vening duty ; and it is further demonstrated by the instant 
 alarm of every protected industry at any symptom of a with¬ 
 drawal of the legislative shield. The claims often made that 
 production is as cheap under protective laws as where there 
 is no such interference with the liberty of trade are thus 
 clearly disproved. And the question of comparative cheap¬ 
 ness is one, moreover, which any one who has traveled ex¬ 
 tensively and noted the cost of commodities here and in for¬ 
 eign markets can readily answer from his own experience. 
 
 It is not to be supposed, nor has any one to my knowledge 
 suggested, that England would abandon her colonies in con¬ 
 sequence of any change in our laws in the direction of a 
 more liberal policy. But it is not a sentimental care for her 
 colonial interests, that mainly induces England to purchase 
 her supplies in India and employ her capital in developing 
 that country. There are several excellent reasons which may 
 be given for that growing tendency in her commerce. The 
 Indian wheat-grower will sell his product at a lower price 
 than the American farmer can afford to take; but even this 
 is not the chief ground on which he receives the preference. 
 He willingly takes in exchange for his grain manufactured 
 goods upon which the Englishman has a full profit. And the 
 farmer of India finds no cause of complaint in the low price at 
 which his grain is sold—too low to give the American farmer a 
 living reward for his toil—nor in the fact that he receives com- 
 
AND WHERE IT FALLS. 
 
 31 
 
 modities rather than money for his crop; for he is furnished 
 those commodities at a cost which has not been artificially 
 enhanced, and enjoys, practically speaking, the benefit of 
 unrestricted access to an open market. He obtains for one 
 bushel of wheat or one barrel of flour an article for which 
 the American farmer must give a bushel and a half or a 
 barrel and a half; and the British merchant in turn procures 
 his wheat at a lower cost than from the American farmer, 
 -even if he pays the same nominal price in dollars and cents, 
 because he pays for it in goods on which there is a profit to 
 himself. Or to put the case still more plainly, the situation 
 is practically this: Supposing the nominal quotation of 
 wheat to be 80 cts. per bushel both in Bombay and Kur- 
 rachee and in Chicago and Milwaukee, while the Illinois 
 farmer receives 80 cts. per bushel for his wheat, the farmer of 
 India actually receives about $1.15 or its equivalent in goods 
 at the American valuation; and the English consumer, while 
 paying 80 cts. per bushel to the American farmer, pays to 
 the India farmer, in the primary cost of the goods exchanged, 
 only 70 or 75 cts. Or taking cotton as an example, if the 
 money quotation in New Orleans, Alexandria and Bombay is 
 10 cts. per lb., while our Southern planter gets 10 cts. 
 per lb. for his product, the Indian or Egyptian grower 
 gets for the same quality about 14 cts. in goods at 
 our market price; and to the British purchaser, who has to 
 pay 10 cts. per lb. for the American cotton, the actual prime 
 cost of the Indian or Egyptian cotton is about 9 cts. per lb., 
 since he pays for it in goods on which he has a profit of 10 
 or 15 per cent. It is not strange that under such contrasting 
 conditions as these, the capital of Belgium should go to the 
 Congo, of France to Tonquin, of Germany to the islands of 
 the Pacific, and of Great Britain to Egypt, India, Burmah and 
 China, in the development of trade and internal improvement. 
 
 If India should ever be unwise enough to impose an average 
 tariff of 47£ per cent, on foreign commodities entering her 
 ports, and thus compel her farmers to exchange a bushel and a 
 half of grain for an article which they now get for one bushel, 
 we should very soon be relieved from any further solicitude 
 
32 
 
 THE BURDEN OF PROTECTION. 
 
 about exports of India wheat. On the other hand, but for 
 the erection of such a barrier against trade by our own legis¬ 
 lation, we should not now, instead of sending to Europe the 
 two million tons of wheat which has accumulated in our 
 warehouses, be compelled to ship gold instead to meet our 
 indebtedness there. It is in the establishment of relations of 
 reciprocity and mutual profit between the British manufac¬ 
 turer and the Indian fanner, and the prospect that the same 
 policy will soon be extended to Egypt, China and Australia, 
 that just ground of alarm exists to those who have the pros¬ 
 perity of our nation at heart. This country has in the past 
 absorbed a large proportion of the surplus wealth and popu¬ 
 lation of Europe, and by virtue of its extent and resources it 
 should continue to do so for a hundred years to come. In the 
 fact that it is denied that opportunity by the persistent en¬ 
 forcement of a policy of repulsion toward foreign nations lies 
 the danger which I have endeavored to point out, and which 
 I submit is a matter demanding most serious consideration. 
 
 John W. Boo^kwalter. 
 
 New York, Dec. 28, 1885.