Aez 
 
 
THE RIGHT HONOURABLE 
 
 SIR LYON PLAYFAIR, K.O.B., M.P., 
 
 ON 71IE 
 
 EFFECT OF PROTECTION 
 
 ON 
 
 WAGES. 
 
 BEING A SPEECH DELIVERED AT LEEDS, 
 December 1st, 1888. 
 
 LONDON: 
 
 THE “LIBERAL & RADICAL” PRINTING AND PUBLISHING C0„ 
 
 83, Earring don Street, E.C. 
 

SIR LYON PLAYFAIR, K.C.B, M.P., 
 
 ON 
 
 THE EFFECT OF PROTECTION 
 ON WAGES. 
 
 Sir Lyon Playfair, in a Speech delivered at Leeds, 
 December 1st, 1888, said:— 
 
 I have lately returned from the United States, where a very important 
 issue has been before the people during the Presidential election. It would be 
 false to call that issue one of Free Trade, because the proposal was whether the 
 high Protectionist tariff, now averaging 47 per cent, on the price of imports, 
 should be reduced to 42 per cent. If a man took forty-seven drinks in the day 
 and reduced them to forty-two, you would not call him a teetotaler; so a 
 small reduction of a high tariff cannot be dignified as one of Free Trade ; but 
 it is the thin end of the wedge, and may bo driven home so as to rend in 
 twain the system - of Protection. The real question before the people was 
 whether Protection is the source of high wages among the working classes. 
 
 THE VALUE OE WAGES. 
 
 You are aware that wages in America are notably higher than they are in 
 this country. This is generally but not invariably true. Nominal wages 
 mean so many dollars or shillings per week ; while real wages are the necessities 
 and comforts which can be bought by them. Let me give you a concrete 
 illustration. I know the case of three men who emigrated from Bradford to 
 America. They earned 32s. in this country, and went under an engagement 
 to receive 50s. in the United States, where they have been for two years. 
 About six weeks since they wrote to their old English master offering to 
 come back at their former wages, because they found that these went further in 
 England than their higher nominal wages did in America. Upon hearing 
 what they had done, their American employer raised their wages to 5Gs., and 
 they remain to see whether this will render their position more favourable. In 
 considering my observations bear in mind the important difference between 
 nominal and real wages. 
 
 What makes nominal wages higher in the United States P The real wages 
 of unskilled labourers are certainly higher in that country, but I am by no 
 means so certain that those of skilled workmen are. There are two great 
 political parties in Amerioa—the Republicans and the Democrats. The former 
 support Protection, and contend that wages are raised by this system and 
 maintained at a high level. The Democrats, in the late contest, have with 
 
4 
 
 some misgivings now ranged themselves in favour of a reform of the tariff, 
 and they deny that Protection influences wages in any sensible degree. Pro¬ 
 tection, say the Republicans, creates industries which would not exist without 
 it, and therefore it gives work to labour. It is not work for itself that the 
 labourer desires ; he wishes to obtain a comfortable living from his work. He 
 does not live to work; he works to live. Good living at the lowest price is 
 the workman’s aim. How can taxes on most of the necessaries and upon all 
 the comforts of life help him to that end ? When taxes, averaging about one- 
 half the value of commodities, are put on foreign imports, home-made goods 
 must rise to the increased selling price, otherwise Protection would neither 
 have meaning nor justification. It is obvious that, under these conditions, 
 each man as a consumer pays a tax to himself as a producer. You work in 
 a woollen mill under this Protection, and are gratified that the tool maker, 
 the shoe maker, and hatter pay taxes for the support of your industry; but 
 they are consoled because you pay taxes to support them in their trades. 
 This is a vicious circle, and you might as well transfer money from your left 
 to your right pocket in the vain hope that you are enriching yourself. If 
 Protection gives to a man more wages, where does the more come from ? It 
 comes from the taxes, which all working men have to pay to support 
 Protection. Experience has certainly proved that Protection is not inconsistent 
 with high wages in a new country like America. This is a very different 
 proposition from the statement that Protection is the cause of high wages. 
 
 A little consideration will convince you that Protection has nothing but a 
 deteriorating influence on the rate of wages. In the first place, the 
 unprotected industries in the United States have higher wages than the 
 protected trades. In a country where all the national expenditure is met by 
 Custom and Excise duties, it is difficult to say that any trade is absolutely free, 
 but some industries are relatively free as compared with manufactures which 
 are protected by excessive duties varying from GO to 100 per cent. The 
 carpenters, who have little protection, make £90 yearly, while the protected 
 cotton spinners and weavers get £49. The unprotected bakers win £84, while 
 the protected makers of men’s clothes get £57. The free printers obtain £118 
 in wages, but the protected machine makers have only £91 wages. The 
 workers in stone and marble have £91 wages; but the closely protected 
 industries of iron and steel average £78. These are the averages which I take 
 from the returns in the census, and they might be largely multiplied. They 
 are conclusive as to the fact that the wages of protected industries are lower 
 than those which have little or no Protection from the tariff. General Liebe, in 
 his recent work on the tariff, gives a table of the wages in twelve staple 
 industries under Protection, and of twelve which were unprotected. Besides 
 being higher, the wages of the unprotected workmen, during the six years 
 ending 1886, have increased from 10 to 35 per cent.; while those of the pro¬ 
 tected labourers fell from 5 to 35 per cent. 
 
 Still, you may think that protection may at least regulate and render 
 
5 
 
 uniform the wages of like industries all over the country. It does nothing 
 of the kind. The variation between the wages of the same industries in 
 different parts of the Union is greater than between it and the United 
 Kingdom. Ohio and Connecticut are States with woollen manufactures, but 
 the wages vary by 70 per cent. New Jersey and North Carolina have cotton 
 mills, and their wages differ by 80 per cent. Now, the alleged difference 
 between the wages of America and England is generally taken at 50 per cent. 
 Observe, then, that Protection neither ensures the highest wages to its 
 industries, nor does it equalise them in the same trades. That wages are not 
 governed by Protection follows from the fact that they are no higher in an 
 industry working under a prohibitive duty of 100 per cent, duty than in one 
 having a more moderate tax of 25 per cent. 
 
 EVILS OF PROTECTION. 
 
 The most serious evil of Protection in America is that it practically restricts 
 tho markets for manufactured goods to the domestic demand of its population 
 of about sixty millions. This, no doubt, is a largo market, but it is not nearly so 
 large as the market of the world. The exclusion of foreign markets produces 
 a frequent glut of commodities, and many mills make in seven or eight months 
 as much as they can sell in twelve ; so they shut up for three or four months 
 in the year. Of all material evils, insecurity in the means of living is tho 
 most disheartening, the most exasperating, and the most demoralising to 
 working men. An enforced idleness for a third or fourth of the year is 
 disastrous to working men. It means seven months’ pay for twelve months’ 
 living. I quote, as an illustration of what is constantly happening, a single 
 paragraph from the Boston Post of 10th November:—“The carpet mills of 
 E. S. Higgins & Co. gave notice of a reduction of 600 men from Monday next. 
 At Reading to-day the ironworks were shut down for an indefinite time, and 
 300 men and boys were thrown out of work. The Boston sugar refinery will 
 be closed to-night for an indefinite period. This refinery reduced the wages 
 of the workmen 7 per cent, on 1st October.” Periodical stagnation of this 
 kind must be hateful to working meD, who like steady and continuous labour. 
 In 1885, out of 816,000 operatives in Massachusetts, 241,000, or 29J per cent., 
 were out of employment in this way for part of the year. Iu the cotton mills, 
 39 per cent, males and 43 per cent, females ; in the woollen factories, 39 per 
 cent, males and 45 per cent, females ; and in the boot and shoe machine shops, 
 67 per cent, males and 71 per cent, females, had these stoppages in their 
 annual work.* The nominal high rate of wages thus suffers a serious reduction. 
 Except in the face of grave depressions of trade, we do not experience this 
 evil in England, because the cheap cost of production enables our goods to be 
 
 * David A. Wells—“ Relation of the Tariff to Wages,” p. 42. Fifty-six other occupa¬ 
 tions were enumerated in this State, of which half the whole number were idle part of the 
 year. 
 
6 
 
 sent to foreign markets, although the domestic market may be glutted by 
 over-production. The autumn steamers bring back to England many of these 
 idle workmen. The steamer Germanic , on its return voyage from New York 
 this week, is to bring over from 600 to 800 working men. They return to 
 England to spend the three months when there is no employment for them at 
 tho mills; because they may get work in this country, and, even if they do 
 not, it is much cheaper to live here during enforced idleness. They return to 
 America in spring to get their high nominal wages when the factories are 
 again open. 
 
 The Republicans assert that Protection is necessary for the employment of 
 native American labour. The real truth is that protected factories now employ 
 few Americans. Ia a large mill in New Hampshire, employing 6,000 hands, 
 only 230 Americans are found among them; the rest consisting chiefly of 
 French Canadians, a good many Irish, with a few Germans and English. You 
 have lately heard a good deal about the fisheries, which are now straining the 
 relations between this country and the United States. These fishing vessels 
 sail from the coasts of New England to fish on those of Canada, and it is 
 contended that they must be protected because they are the chief nursery for 
 American seamen. In these fishing vessels there are only 25 per cent, of 
 American seamen, the remainder of 75 per cent, consisting of Canadians and 
 English sailors from New Brunswick and Nova Scotia. I state this on tho 
 authority of the chairman of a Committee of the House of Representatives, 
 which has been appointed to inquire into the fact that Americans are so 
 rapidly lessening in the protected industries. The causes of this diminution 
 are not far to seek; they are due to the circumstance that native Americans 
 desert protected industries which are constantly lowering wages, owing to the 
 pressure of competition in a limited market, and they pass over to the 
 unprotected labour, which is better paid. 
 
 PROTECTION FAILS TO MAINTAIN GOOD WAGES. 
 
 Allow mo now to give my reasons for the general fact that Protection not 
 only fails to maintain good wages, but that it is a force, aud a strong force, 
 to lower them. Buyers and sellers are correlative. If a man cannot sell his 
 labour for the whole of the year, he cannot buy manufactured products when 
 ho is idle, except by stinting his purchases, and encroaching on his savings to 
 purchase the actual necessaries of life. When mills stop for some months in 
 the year, the workmen become poor and discontented. This leads to tho 
 strikes and depressions which are so painfully frequent in America, and about 
 which I shall have something to say later on. In the mutual dependence of 
 buyer and seller, the American workman sells his labour under conditions of 
 Free Trade, because there is perfect Free Trade in the thirty-eight States and 
 eleven territories of the Union; but he buys his commodities under Protection. 
 The workman as a buyer cannot get any foreign manufactures except at a 
 price fifty to seventy per cent, higher than its cost in Europe, while the homo 
 
7 
 
 manufactures, except when there is a glut of them, are sold at a price which 
 represents the duty of the tariff added to the production. These high-priced 
 goods largely lessen real wages, which, as I havo explained, are the amount 
 which you can get for your money in providing the needs and comforts of life. 
 This lowering of real wages is represented in a concrete form by the higher 
 price of all protected commodities, whether they are imported from abroad or 
 are made at home. Taxes thus laid upon labour come out of the pockets of 
 the people, and have exactly the same effect as if you made a direct deduction 
 from the power of tools, from the fertility of the soil, or the capacities of the 
 climate. You must then see that Protection is a force which cuts down 
 nominal wages, and that the high cost of production caused by them forcos 
 the competing manufacturer either to lower wages or to seek for cheaper 
 labour from the foreign emigrants who flock to America from every other 
 country:— 
 
 Great Empire of the West, 
 
 The deare&t and the beet, 
 
 Made up of all the rest. 
 
 THE REASON WHY. 
 
 I have denied that Protection determines the high rate of wages in America, 
 and I must now explain what causes it. 
 
 Why are wages higher there than in England ? Cobden explained the con¬ 
 dition of wages in a single sentence. * ‘ When two men ask work from one 
 omployer, wages are low ; when two employers are after one man, wages are 
 high.” This is the law of supply and demand, and it rules wages in America 
 as it does in England. In the United States there are only fifteen persons to 
 a square mile, while in England and Wales there are 446. Sir Walter Scott 
 said—“ Whenever a Scotchman gets his head above water he makes for the 
 land.” The very reverse is true as regards America, for whenever the labourers 
 of any nation in Europe get their heads below water, they strike out for the 
 prairies of America. The land of that country now requires eight millions of 
 labourers to cultivate it, while those in other industries amount to about three 
 millions. They are only partly under Protection—the general estimate being 
 that there are from seventeen to twenty unprotected labourers for every one 
 who is working in a protected industry. In order to be on the safe side, let 
 us put the proportion as ten to one. Is it not obvious, when the unprotected 
 industries compete for ten men, and the protected industries for one, that it 
 must be the former and not the latter which determine the rate of wages P 
 Of the unprotected industries, agriculture is much the most important. Out 
 of seventeen and a-half million bread winners in the United States, the laud 
 employs eight millions; so that is necessarily the industry which rules the 
 rate of wages. Protection has absolutely nothing to do with it, except as a 
 force which lowers the rate. Compare wages in the east and west of America. 
 The State of Maine, in the east, is occupied with the lumllbr and other trades, 
 
8 
 
 fully protected, and its average wages are £52 yearly; while California, in 
 the west, with its farms and its orchards, having no Protection, has an average 
 wage of £96. Farming, a perfectly free industry, is the chief competitor for 
 labour, and has to pay more for it. You see exactly the same thing in our 
 new colonies when they possess large tracts of virgin land. Australia is an 
 excellent example, because there, side by side, is a colony with a policy of 
 Protection and another with Free Trade. Victoria enjoys Protection, while 
 New South Wales has adopted the policy of the mother country, although 
 latterly she has shown a retrograde action. What has been the result of the 
 two systems ? Victoria, twenty years ago, had the largest population, and 
 has increased it by 62 per cent. ; while Free Trade New South Wales has 
 grown by 139 per cent., and now pays wages which are even higher than 
 those of the United States. The male wage-winners of Victoria emigrate to 
 the neighbouring Free Trade colony, and the Protectionist colony has now an 
 excess of female labour. The wages of a man in Victoria being £83; if he 
 pass to New South Wales he gets for the same work £100, 
 
 SUGGESTED ANNEXATION OF CANADA. 
 
 Senator Sherman, a politician of mark in the United States, is agitating tho 
 American people to annex Canada, and sever it from England. Vast as is the 
 territory of the United States, and rapid as is the growth of its population, 
 which ought to count between one and two hundred millions in another thirty 
 years, it is not vast enough for a system of Protection relymg on home 
 markets for the disposal of its products. So its politicians want Canada, a 
 country about the same area as the United StateB, now thinly peopled, but 
 with great potentiality of growth. The annexation of Canada, either by 
 negotiation or by force, would wound our national pride; but would it wound 
 our commercial supremacy, as American politicians believe ? Its effect upon 
 the whole continent of North America would be to keep up nominal wages 
 over that vast area for another hundred years, and to exclude it still more 
 effectually than at present from the foreign markets, which buy our manu¬ 
 factured goods. How wise are statesmen in their generation ! 
 
 EMIGRATION. 
 
 Perhaps you are not yet convinced, and wish me to explain why it is that 
 extensive emigration goes to America if Protection does not keep up wages. 
 No doubt Protection stimulates emigration, but not in tho way which its 
 advocates believe. The chief emigration to America is from countries of high 
 Protection, which, by lowering wages, drive out their working men. China is 
 the father of the protective system, and Chinese labourers swarmed to the 
 Pacific coast, until their influx was prohibited by law. The protected countries 
 of Germany and Italy send out a large number of emigrants to America. The 
 country which sends out fewer is Free Trade England. From 1880 to 1887 
 
9 
 
 highly protected Germany sent out 1,235,926 emigrants, or 29 per cent, of the 
 whole number; while this Free Trade country supplied 496,037, or 11J per 
 cent. Ireland, during that time, sent out 534,691 emigrants, or 12J per cent., 
 and you know the causes which make Ireland unhappy and discontented. If 
 Protection is a panacea for high wages, why did protected Germany send out 
 nearly three times as many of her people as Free Trade England.* Few of 
 our skilled labourers emigrate from Great Britain, because for them real wages 
 are not very different on either side of the Atlantic. Unskilled labourers are 
 wise to emigrate, as the demand for them is greater than in this country, and 
 the real wages are higher. It is not Protection which to any considerable 
 extent beckons the labourers from other lands. In the last ten years, exclud¬ 
 ing the women and children, only 2 per cent, of the emigrants went into 
 protected textile and metal industries, and another 2 per cent, into mining. 
 
 As we are dealing with the effect of Protection on wages, let me interpolate 
 an observation in regard to European countries. The low-priced labour of 
 Russia seeks to protect itself by a heavy tariff against the higher wages of 
 Germany. Italy, with its badly paid labour, desires to exclude the Gorman 
 goods. Most of the European countries unite to protect their cheap labour by 
 high tariffs against England, where the average wages are from 80 to 100 per 
 cent, higher than on the Continent. Mistaken as to their means, we still 
 recognise a general purpose, that it is well to protect the weak against the 
 attacks of the strong. But Protection in the United States is the very reverse 
 of this, for there it is a case of the strong trying to protect themselves against 
 the weak, the high wage-earners endeavouring to shut out what their politi¬ 
 cians call “ the pauper labour of Europe.” 
 
 COMPARISON 01' WAGES. 
 
 You ask me to come back to the comparison of American and English wages 
 although I thought I had dealt sufficiently with this question; but I will try 
 to explain myself more fully. It is almost impossible to compare rates of real 
 wages between two countries, as the conditions vary materially. Blaine, the 
 leader of the Republican party, tried to do so when he was Secretary of State, 
 by getting excellent consular reports from different parts of England. I give 
 the conclusion in his own words:—“The hours of labour in the Lancashire 
 mills are fifty-six, in Massachusetts they are sixty per week, and in the other 
 New England States, where the wages are generally lower than in Massa¬ 
 chusetts, they are sixty-six to sixty-nine hours per week. Undoubtedly the 
 inequalities in the wages of English and American workmen are more than 
 equalised by the greater efficiency of the latter and their longer horns of 
 labour.” During the election the Protectionists posted a placard in the chief 
 mills and workshops of New York, giving the average wages of seventeen 
 
 * The total number of immigrants into the United States between 1880-1887 was 
 4,257,262, of whom 1,149,207, or 27 per cent., were from the United Kingdom. 
 
10 
 
 staple industries in various countries. I give you the comparison for 
 what it is worth, as I have no means of testing its accuracy. The 
 wages in Germany are given as 14s., in England at 30s. 8d., and in New 
 York at 49s. 6d. Let us draw our own conclusions from this Protectionist 
 statement. Wages in these seventeen staple industries are 111 per cent, 
 higher in Free Trade England than in protected Germany, though they are 
 61 per cent, higher in America than in England. On the other hand, the 
 latter figure represents the average increase of 50 to 70 per cent, levied by 
 taxation upon manufactures. Wages are not measured by money, but by the 
 worth which can be bought by it. Another estimate of American and English 
 wages has been made by Caroll Wright, the head of the Labour Bureau, and 
 whether he is right or wrong his calculations are painstaking and honest. Ho 
 says that a Massachusetts mechanic with a wife and three children, two of 
 them working, makes in a fully employed year £160; while the English 
 mechanic, under like conditions, makes £103. But it costs the American work¬ 
 man, according to the same authority, £151 to live comfortably, and the 
 English operative spends only £101. If this comparison be true, at the end 
 of the year the American mechanic will have saved £9, and the Englishman 
 oidy £2. Recollect that the latter has less work per week to the extent of four 
 to six hours. I have looked to the savings banks to test this estimate, but 
 they are only one method of ascertaining the thrift of a whole people. Build¬ 
 ing societies, prudential associations, and other agencies for promoting thrift 
 complicate the question. Taking all the people of the United States, their 
 deposits in savings banks are £4 per capita, while in the United Kingdom 
 they are £3. The latter sum has in this country more purchasing power, so 
 that the savings of the working classes in the two countries may be considered 
 equal. It is the custom of American politicians to magnify the efficiency of 
 their working classes as a contrast to the worn-out and effete people iu 
 Europe, especially in “ decrepit old England.” Thus it is said that, while an 
 English operative can only manage three looms, an American undertakes five 
 or six. I think, for the same class of work, American managers get more 
 work out of their men than English do, for the discipline of the workshops is 
 more severe. Usually, however, the comparisons are made upon incom¬ 
 parable conditions. The cotton operative here is usually engaged on a finer 
 class of goods, when his American brother chiefly produces coarser fabrics. Iu 
 England cotton is dear and labour is cheap, so we use more labour and less 
 cotton than they do in America. Besides, an operative in their mills will turn 
 out more product when he works from four to ten extra hours per week. I 
 have told you that native Americans are disappearing from the mills ; so the 
 comparison is not between American and English operatives, but between un¬ 
 trained French Canadians and Irish, who take their places, and the trained 
 English worker in his own country, and how the latter can be inferior to the 
 former passes human comprehension. The real American working man is a 
 most efficient operative ; but that he is better than a good, honest English 
 
II 
 
 artisan I could not find out in my investigations. I must conclude this part 
 of my observations by asking your assent to my conclusions that Protection is 
 a gigantic error when it claims to be the source of high wages. 
 
 Wheresoe’er I turn my view, 
 
 All is strange, yet nothing new; 
 
 Endless labour all along, 
 
 Endless labour to be wrong. 
 
 Recollect that I havo been discussing the effect of Protection not on infant, but 
 on matured industries. I do not here care to contend, though I do not admit 
 tho argument, that protected infant industries, when first initiated, may 
 enhance wages and profits. Even if it were necessary to attach a third horse 
 to pull a load up a hill, it is too costly to continue it when you reach the level. 
 The evils of Protection become more palpably manifest when infant industries 
 have grown into maturity and produce glutted markets by excessivo competi¬ 
 tion, for then a time arrives when the evil of Protection shows itself by low 
 wages, strikes or lock-outs, and periodical stagnation, resulting in the destruc¬ 
 tion of the weak and the survival of the fittest. 
 
 TRADES UNIONS. 
 
 I now direct your attention to the Trades Unions in America. In the acute 
 year of depression, 1S84, the reduction of wages was chiefly in protected indus¬ 
 tries. In cotton and woollen mills it was from 20 to 30 per cent., while there 
 was no lowering in the wages of unprotected house builders, carpenters, stone 
 cutters, and brick makers. In the protected iron industries wages fell from 15 
 to 22 per cent.; but the unprotected butchers, bakers, millers, tanners, and 
 printers did not suffer. Wages in the protected silk mills fell 15 to 25 per 
 cent., though those of labourers on the land were maintained at their old rate. 
 Trades Unions cannot regulate markets, but they are useful in gettiug tho 
 benefit to the labourer when these improve. Even in years of prosperity, 
 strikes—the last resort of workmen—are painfully frequent in America. In 
 1887 there went out on strike 340,854 persons, and of these 112,317, or about 
 one-third, were in Pennsylvania, a State in which the highly protected iron 
 industries are situated. From 1881 to 18S6 no less than 1,323,203 workers 
 were out on strike, and their loss in wages, according to the report of tho 
 Labour Bureau, was 12£ million sterling/ Putting the complete and partial 
 successes to tho credit against the failures, a gain of average wage of one 
 shilling and a halfpenny per day was achieved; but to obtain this tho wholo 
 of the strikers would have to work 99 days before they covered the loss during 
 the strikes. This uneasiness of labour, which has been marked for some 
 years, led to the formation of a gigantic organisation called “ The Knights of 
 Labour.” The bread-winners of the United States number 17£ millions, and 
 
 Report of Commissioner of Labour— 0 Strikes and Lock-outs,” p. 18. 
 
12 
 
 of these this organisation claims that it enrolled from 1J to 2 million members. 
 Its aims were much larger than those of Trades Unions. The latter have been 
 an important educational force in the industrial .life of England, and have 
 raised the level of conduct and political ability of our working men. Even in 
 our past history there have been no doubt instances in which Trades Unions 
 have been wild and irrational in their means and ends ; but as they got experi¬ 
 ence and education the relations of the employers and the employed became 
 more harmonious, while the acts of our unions in asserting fair and just con¬ 
 sideration for the claims of labour became more temperate, steady, and wise. 
 The American Trades Unions have not yet won this experience. They scarcely 
 existed before the war of secession, and they are still noisy and irrational in 
 their ways, which are neither so effective nor cleanly a3 with us. The Knights 
 of Labour arose to make them all-powerful. Many Trades Unions merged 
 themselves in this organisation, and gave up their self-government. It was a 
 huge confederation of labour, and aimed to subordinate all local and special 
 interests in a centralised government. It grew with amazing rapidity, and 
 showed so much political power that, as General Walker, the distinguished 
 American political economist, remarks, “it goes without saying that the 
 politicians grovelled, as only American politicians can grovel, before all who 
 were supposed to exercise influence arnoDg the Knights of Labour.” This 
 organisation asserted its right and power to transfer the whole initiation of 
 production from the employing to the labouring class. No employer could 
 under such conditions enter into contracts or extend his business. The huge 
 force of the new confederation was to be thrown in favour of local strikes, 
 while boycotting and other means of pressure were to be unsparingly used. 
 This tyranny at one time seemed as if it would prove intolerable, and thought¬ 
 ful men looked with alarm to a wholesale destruction of wealth, and to the 
 general prostration of industry. The Knights of Labour have dismally failed. 
 Their one and a half million of members have shrunk to 200,000 in the few 
 years of their existence, and now, even among American politicians, there are 
 none so poor as to do them reverence. The Trades Unions have withdrawn 
 from the confederation and resumed their former autonomy. In condemning 
 some of the ways of Trades Unions in America, such as the outburst of law¬ 
 lessness in the Middle States in July, 1877, we must not forget, in extenua¬ 
 tion, that, iu good times, Protection brings excessive profits to a few capitalists, 
 while, to an undue extent, it throws the burden of bad times upon the wage- 
 earners. 
 
 WAGES AND PRODUCTS. 
 
 All political economists now agree that high-priced labour produces low- 
 priced commodities, while cheap labour means dear goods. This is now 
 understood by most trades, but not by all. In the black country round 
 Wolverhampton the manufacture of nails and chains is still a domestic 
 industry, carried on in the house of a workman, with the most primitive 
 machinery, like a hammer called “ the Oliver,” which is an instrument of home 
 
13 
 
 construction fearfully and wonderfully mado out of old bedposts or other 
 ready contrivances. The wages of the workers are deplorably low, yet the 
 peaceful, orderly population work on with the hope of improved times, although 
 factories, with machinery conducted by labourers highly paid, are destroying 
 the domestic trade. The machine-made nails from America now push hand¬ 
 made nails out of the market. In factories run by machinery the labour cost 
 in the finished product is small, varying from 15 to 21 percent, of its cost. 
 You will readily understand this because there are fewer workmen to the product, 
 though their wages are high. Notwithstanding that the cost of the sum of labour 
 in a machine product is low, its cheapness is compassed through high wages. 
 The skilled English workman has no fear of low-priced inexpert labour, but 
 he does fear high-priced expert work. The high wages in this country are not 
 lowered by the low wages of the European Continent. Yet it is this “ pauper 
 labour of Europe ” that is used in America to stalk as a spectre round the 
 ramparts of protection—a grim sentinel to scare the working men. The 
 employer, as well as the employed, now know that Adam Smith was right 
 when he said that high wages produce more active, diligent, and expeditious 
 work than when they are low. Wages are really a share in the product of 
 industry, and must ultimately be determined by the value of the product in 
 the markets of the world. When a working man in Free Trade England has 
 earned his wages he can spend them on untaxed commodities, with the excep¬ 
 tion of a few necessaries such as tea, or some luxuries like spirits and tobacco, 
 which contribute to the imperial revenue. The working man in America finds 
 himself face to face with taxation in every act of his life. Henry Philpot, a 
 farmer’s boy, describes his own experience as follows:—“When I rise from 
 my humble cot in a log-farm house, throwing off my bed-clothes, taxed 10 to 
 100 per cent., and putting on my clothing, taxed 35 to 100 per cent., I eat my 
 breakfast from dishes, taxed 45 per cent., on a tablecloth, taxed 40 per cent. > 
 and when the Sabbath bell, taxed 35 per cent., sounded its inviting notes, I 
 took my Bible, taxed 25 per cent., and went to the church built of lumber, 
 taxed 20 per cent., and there I sung from my hymn-book, taxed 25 per cent.” 
 It is surely needless to explain more fully than I have done that high nominal 
 wages are not real wages in a protected country.* 
 
 PROTECTION LEADS TO SOCIALISM. 
 
 The last experience which I derived from my study of the effects of 
 Protection may surprise you. It is that Protection leads slowly, but surely, to 
 Socialism, and tends even to Communism. There are certain Socialistic aims that 
 all but the lamez faire politicians approve. The State ought to be empowered by 
 health, factory, mining, and education laws to secure for the people an unmutilated 
 and undeformed manhood, or, in other words, to preserve by public means the 
 conditions for a humane existence in a civilised country. That common and 
 
 Henry Philpot—“ Tariff Chats,” p. 23. 
 
14 
 
 limited Socialistic action of the State is very different from that which unwisely 
 intervenes to save individuals from the labour and struggles of their daily 
 lives, by taxing all of us to compensate for the deficiencies or idleness of some of 
 us. If a State, through protective laws, can say that some of us are to be taxed, 
 not for the security of all of us, but for the exclusive benefit of those who are 
 monopolists or manufacturers, in order that they may obtain steady and large 
 profits, on what principle can the latter object, when the working men, who 
 have the controlling power in politics, turn round upon them and say, “You 
 have taxed us to guarantee your profits and now we propose to get the State 
 to tax you manufacturers to guarantee us our wages.” That is rank 
 Socialism ; but so is Protection. The man who asserts his right to take away 
 some of the earnings of a working man through taxation to support the 
 industry of another, whether he be a manufacturer or an operative, is very 
 near being a Communist, differing very little from the man who denies the 
 right of property altogether. It is not the way in which you are despoiled, 
 but it is the fact that you are despoiled which constitutes the wrong. If it be 
 right that the State should tax you because your neighbour’s ironworks or 
 cloth mills do not pay, it cannot be wrong for workmen to insist that it 
 should provide public workshops, or to insure their lives, or promote any of 
 the various devices which Socialists demand as a means of lessening the 
 struggle for existence among individuals. Within the last few weeks you have 
 seen an instance of this in France. Protection in that country has raised the 
 price of the loaf, and the people have demanded that a maximum 
 price should be put upon bread—a power which French law gives 
 to the Government. This was conceded, and private bakers shut 
 up their shops, whereupon a new cry has arisen for national 
 bakeries. If you think my view is fanciful—that Protection leads to Socialism 
 and tends to Communism—look at the movements in many countries under 
 that fiscal system. Russia is honeycombed by Socialists; so is France; while 
 Germany has passed severe laws for their repression. In the recent Interna¬ 
 tional Trades Union Congress held in London, it was not the British work¬ 
 men who talked Socialism or Communism, but the deputies who came over 
 from the protected countries. In America, Socialistic outbreaks, supported by 
 dynamite, have occurred, and the leaders have been hanged in Chicago. The 
 Knights of Labour, had they been successful, were tending to Socialism in 
 labour. Can you be surprised at it ? Protectionists live on the product of the 
 labour of others. In the United States one protected labourer is supported by 
 a tax on seventeen unprotected. The principle of living on the labour of 
 others is a principle which leads to great expansion. 
 
 WHAT FREE TRADE HAS DONE FOR ENGLAND. 
 
 I need not draw a moral from my sermon. England for forty years has 
 rejoiced in Free Trade. Before that period, when she was under Protection, 
 her working classes had few comforts of life, and were unable to lay by savings 
 
15 
 
 for their old age. Under Protection our industries had become stationary, 
 though the population increased. In 1815 our annual exports amounted to 
 fifty millions, and in 1840 they were exactly the same. Free Trade 
 was gradually introduced, and became complete in 1856. In the next 
 thirty years exports had mounted to 212 millions, and wages rose with the 
 increasing trade. Between 1850 and 1883 the average increase in British 
 wages has been about 39 per cent, while in the same period in America it 
 has been 30 per. cent. In the prolonged period of depression from 1873 to 1883 
 wages rose 10 per cent, in this country; but they fell 5£ per cent, in the New 
 England States under protection. Nominal wages in many cases and real wages 
 in some are higher in America that in England. This difference depends upon 
 the conditions which prevail in a new and undeveloped country, but not upon 
 Protection. American politicians are fond of speaking of “decrepit old 
 England, with its pauper labour.” What are the signs of its decrepitude ? 
 Not commerce, for that largely increases; not diminution of population or 
 increase of pauperism, for the former augments and the latter becomes 
 lower. The best test of the prosperity of a country is the rate of in¬ 
 crease of its population, for that indicates what its industries can support. 
 Between 1851 and 1861, when Free Trade was on its first trial, the increase of 
 population in the United Kingdom was 5‘60 per cent.; in the next decade it 
 was 8’8, and in that ending 1881 it amounted to 10'8, or nearly double the 
 increase of the first period. Yet Senator Fry, of Maine, a State with one- 
 nineteenth of the density of population, and one-fourth the ratio of growth of 
 England and Wales (3£ as against 14*4), has the boldness to assert in the Senate 
 that our country is rapidly declining under Free Trade. There are some States 
 in America, like Ohio, Indiana, and Delaware, which have increased by ratios 
 of from 17 to 19 ; but the old-established States, like New York and Connecticut, 
 have not yet reached an increase of 16 per cent, in the last decade. One pro¬ 
 tectionist State—Vermont—only increased by £ per cent. Test the whole 
 question, in any way you choose, by real wages, by savings, by commercial 
 prosperity, by population, by reduction in pauperism and crime, and you will 
 not find the slighest support from American experience that Free Trade is a 
 delusion, that Protection adds to the remuneration of labour, or that it acts in 
 any other way than as a drag upon the development of nations. 
 
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