THE 
 
 TRUE DOCTRINE 
 
 OP THE 
 
 TARIFF. 
 
 By C. C. BONNEY. 
 
 CHICAGO: 
 
 THE CHICAGO LEGAL NEWS COMPANY. 
 
 1881. 
 
^ubltsljet's announcement 
 
 The recent revival of discussion relating to the tariff, 
 has prompted the publication, at this time, of Mr. Bon- 
 ney’s “True Doctrine of the Tariff,” as expressed in his 
 Springfield speech of last year, on that subject. 
 
 (2) 
 
THE TRUE DOCTRINE 
 
 OP THE 
 
 TARIFF. 
 
 By C. C. Bonnet. 
 
 FROM A SPEECH DELIVERED IN THE HALL OF REPRESEN¬ 
 TATIVES, AT SPRINGFIELD, ILLINOIS, OCT. 23 , 1880 . 
 
 The growing power of business in politics, is one 
 of the most auspicious signs of the times. Business 
 prosperity is the foundation on which civilized so¬ 
 ciety rests. Peaceful homes, flourishing schools, 
 thriving institutions of art, charity, and religion, and 
 the whole range of material improvements — all depend 
 for sustenance on the success of active business. 
 They all languish in times of pecuniary depression, 
 and perish like their founders if starvation become 
 their lot. Hence, the first duty of the statesman is to 
 secure the pecuniary welfare of the people as the basis 
 of the higher achievements to which he would see 
 them advance. I know that the hardships of adver- 
 
 ( 3 ) 
 
4 
 
 THE TRUE DOCTRINE 
 
 sity are often landed as a cure for the excesses of pros¬ 
 perity, and such they are; but true business prosperity 
 is the result of perfect health in the body politic; and 
 it is only when excess engenders disease that the 
 medicine of affliction is required. The sterner vir¬ 
 tues of the human soul do indeed manifest them¬ 
 selves in heroic efforts to resist impending disaster, 
 but all strength has its limits, and will sooner or 
 later be overcome, unless sustained by fresh supplies. 
 
 The true object of free government is to secure the 
 highest good of each in the common good of all, or, 
 what may be considered as the same thing, “the 
 greatest good of the greatest number,” though this 
 latter phrase is liable to misconstruction. It does not 
 mean that in free government the interests of the mi¬ 
 nority are subject to the despotic caprice of the ma¬ 
 jority, but that in the practical affairs of government 
 there should be the least possible injury to the great¬ 
 est possible number of the people. Finding it im¬ 
 possible to banish misfortune and suffering from hu¬ 
 man society, the statesman strives to regulate and 
 control them, as a wise physician does the diseases of 
 the natural body, and to effect a cure where that is 
 possible, and if it be not, to mitigate the evil as far 
 as may lie in his power. Thus statesmanship is a 
 practical art, and requires even a higher degree of 
 ability,, preparation, skill, and experience, than is de- 
 
OF THE TARIFF. 
 
 5 
 
 manded by any other calling. The conduct of the 
 statesman will affect the welfare of the entire commu¬ 
 nity. It may extend to the interests of millions of 
 people. It may bring sorrow to thousands of homes; 
 it may, on the other hand, fill the land with hymns 
 of thanksgiving. The statesman should therefore 
 understand the circumstances and the needs of all 
 classes, and be prepared to deal with them intelligent¬ 
 ly and firmly. Neither the workingman, nor the 
 manufacturer, nor the consumer, ought to follow a 
 political leader who is unable to protect and advance 
 his just business interests. 
 
 The growing intelligence of the people requires a 
 corresponding advance in the treatment of public ques¬ 
 tions. The day of glittering generalities has gone by. 
 Pol^ical doctrines must be defined. Platform phrases 
 must be explained. Party purposes must be illus¬ 
 trated by practical results. Party ties are weakened. 
 Personal independence has increased. And, strange 
 as it may appear, the present great political contest 
 seems to depend upon the conclusions to which the 
 American people shall come respecting the manner in 
 which the respective political parties would, in case of 
 success, deal with certain business interests. 
 
 The great subject of the tariff has suddenly sprung 
 into a startling prominence. After a long period of 
 repose, it advances again to the front of political con- 
 
6 
 
 THE TRUE DOCTRINE 
 
 troversy. And it must be met. All classes are inter¬ 
 ested in it. The laborer asks how it will affect his 
 wages; the manufacturer how it will affect his profits; 
 the consumer how it will affect the prices he will have 
 to pay. The reason of this extraordinary interest is 
 to be found in the fact that American manufactures 
 have so largely increased during the last few years, 
 and promise to go on increasing with an accelerated 
 speed. The great West is being filled with manufac- 
 uring establishments. They will soon be found in all 
 parts of the fertile South. Men talk of Chicago as the 
 future metropolis of American manufactures. Our 
 agriculture and commerce have long been wonders of 
 the world, and now it seems that an equally gigantic 
 manufacture is advancing to meet them in this garden 
 of the continent, the valley of the Mississippi. • 
 
 In the consideration of this subject, the first step is 
 to define the terms which express its most important 
 aspects. 
 
 What is a tariff for revenue? What is a tariff for 
 protection ? What is a tariff for revenue only ? What 
 is a tariff with incidental protection? What is free 
 trade under our system of revenue? 
 
 A tariff is a tax on goods imported from foreign 
 countries, or exported to them. 
 
 A revenue tariff is such a tax, for the purpose of 
 
OF THE TARIFF. 
 
 7 
 
 raising the funds required to defray the expenses of 
 the government. 
 
 A protective tariff is such a tax, levied for the pur¬ 
 pose of protecting parties interested against the com¬ 
 petitions of international trade. 
 
 A tariff on imports protects the home manufactu¬ 
 rers by adding the amount of the tax to the cost of the 
 foreign product. 
 
 A tariff on exports protects the home consumer by 
 checking the exportation, increasing the home sup¬ 
 ply, and reducing the price. 
 
 A tariff for revenue only is one which limits the 
 amount of the aggregate tax to the sum required to 
 meet the necessities of the government. 
 
 Incidental protection is that which is given by dis¬ 
 criminations in the distribution of the tax among the 
 various articles on which the tariff is levied. 
 
 Nominal free trade is the exchange of products be¬ 
 tween two countries, without any tax on exports or on 
 imports. Genuine free trade is an exchange of pro¬ 
 ducts between different countries, with such tariff reg¬ 
 ulations as fairly equalize artificial conditions, and 
 give the natural laws of trade the fullest scope. 
 
 It is manifestly the interest of the people to have 
 every branch of business carried on in their midst that 
 can be made profitable. It is obviously better, other 
 things being equal, to buy of a neighbor who may 
 
8 
 
 THE TRUE DOCTRINE 
 
 purchase something from you in turn, than to send 
 your money to a foreign place, from which you are not 
 likely to receive any reciprocal benefit. But this doc¬ 
 trine is subject to the self-evident condition that there 
 must be conformity to the laws of nature. It would 
 be mere insanity to raise oranges in hot-houses, at a 
 dollar apiece, when they can be brought from a foreign 
 country and sold at fifty cents a dozen. It would be 
 equal folly to support a manufactory of any kind by a 
 mere government subsidy, at a point where natural 
 conditions forbid that it should ever become self-sus¬ 
 taining. Temporary conditions may be aided and ar¬ 
 tificial impediments overcome by wise discriminations, 
 but the laws of climate, and the distribution of natu¬ 
 ral products, cannot be controlled by the operations 
 of civil government. Hence it may be seen that the 
 tariff is a subject for the exercise of wise, practical 
 statesmanship, and that there are no school-boy rules 
 by which it can be mastered and managed. It de¬ 
 mands for its* mastery that supreme endowment of 
 the people, common sense. 
 
 Let us turn now to the pages of the past, and draw 
 a lesson from its events. The whig party, to which 
 the present republican party succeeded, advocated a 
 protective tariff. The policy of that party was to 
 build up home manufactures at whatever cost to the 
 consumer. But the democrats showed that a purely 
 
OF THE TARIFF. 
 
 9 
 
 protective tariff would prohibit importations ; prevent 
 the accumulation of the necessary revenue; subject 
 home consumers to extortionate prices; and support 
 unprofitable, manufactures as mere pensioners, main¬ 
 tained by the bounty of the government. Of course 
 the whig policy failed. The public mind revolted at 
 consequences so unjust, unreasonable and oppressive. 
 But in every plausible error there are said to be some 
 grains of truth, and thus the error is enabled to ac¬ 
 complish some good before it passes away. The dem¬ 
 ocratic party seemed to stand on the doctrine of unre¬ 
 stricted international intercourse. But the arguments 
 of the great whig orators aroused the thoughts of the 
 peojfie, and led to a modification of the democratic 
 doctrine, under which it became “ a tariff for revenue 
 with discriminations in favor of American industry. 
 
 This was the grand equilibrium in which the 
 country found repose after the close of the long war 
 waged between the whigs and the democrats over the 
 tariff. The democratic doctrine, tried and purified in 
 the furnace of political conflict, modified to meet the 
 public necessities and artificial conditions of produc¬ 
 tion and trade, finally triumphed, and became one of 
 the arch-stones in the temple of free government 
 which the American people are building day by day, 
 and shall continue to perfect and adorn while the 
 ages march by. 
 
10 
 
 THE TRUE DOCTRINE 
 
 The limits of the tariff are the needs of the gov¬ 
 ernment; that is, of the people. No tariff merely to 
 put money into the pocket of any pauper, who can 
 not or will not take the risks of active business for 
 himself, and make his own struggle for success, as his 
 neighbors are compelled to do. No favored class sup¬ 
 ported in luxury, and protected against the common 
 hazards of life by the bounty of the government. No 
 accumulation of money in the national treasury for 
 which there is no need, and which greedy and unscru¬ 
 pulous politicians may pervert to their own purposes. 
 But, within the limits of necessary revenue, the lar¬ 
 gest measure of discrimination in favor of the business 
 interests of our own country. Not a tariff to prevent 
 importations and cut off the revenue, without which 
 the government can not pay its current expenses and 
 its debts, but a tariff so laid that foreign products 
 will come in on equalized terms and conditions, to 
 supply an excessive demand and protect the people 
 against extortionate prices and imperfect products; 
 a tariff so levied as at the same time, to protect the 
 workman and the manufacturer against ruinous com¬ 
 petition from foreign pauper labor or other unnatural 
 conditions. 
 
 Nothing is more important to the American peo¬ 
 ple, to those who patronize monetary or manufactur¬ 
 ing institutions, or to those who are employed in 
 
OF THE TARIFF. 
 
 11 
 
 them and depend on them for support, than that they 
 should be strong enough to withstand the storms of 
 adversity. The people want no fairweather banks 
 that fail as soon as “hard times” come; no feeble 
 manufactories that mnst close their doors and turn 
 their operatives into the street as soon as prosperity 
 begins to decline. 
 
 Nor, on the other hand, do the people want, nor 
 will they tolerate, a despotism of monopolies, inde¬ 
 pendent of public favor, and robbing alike the work¬ 
 man by undue reduction of his wages, and the purchas¬ 
 er by the exaction of excessive profits. 
 
 This doctrine, applied in actual practice, secures 
 equal protection and advantage to all classes, work¬ 
 man, manufacturer, and consumer. The great pur¬ 
 pose of free government is to protect the people in all 
 their rights of person and property; to prevent pau¬ 
 perism and crime; and to secure a continual progress 
 to higher and better conditions, material, intellectual 
 and moral. Hence the question of wages is of the 
 very highest importance, and is the first element to 
 be considered in the adjustment of the tariff. The 
 freeman must have a freeman’s reward for his labors. 
 The government must not say how much or how little 
 he may receive; its sole duty is so to protect him by 
 just enactments, that the law of legitimate demand 
 and supply will give him what his services are really 
 
12 
 
 THE TRUE DOCTRINE 
 
 worth. The first thing to be done, is to determine the 
 fair average cost of the home product. Fair wages 
 constitute the primary element of such cost. The 
 expense of materials is the second. The use of 
 necessary capital is the third. These make the ag¬ 
 gregate cost of manufacture. The cost of the 
 competing foreign product, is then computed. To 
 that cost is then added such a tax as will approxi¬ 
 mately equalize the selling price of the article with 
 that of home manufacture. What are the effects? 
 The artisan is protected in the fair wages of a free¬ 
 man against what is called foreign pauper labor. The 
 manufacturer is protected in a fair profit against de¬ 
 structive competition. The consumer is at the same 
 time protected in a fair purchase price against extor¬ 
 tionate demands from either the home or the foreign 
 producer. Thus the conditions of trade are equalized 
 by wise practical statesmanship, and trade becomes 
 truly free to follow the natural law of demand and 
 supply. 
 
 If the home producer cannot supply the demand, 
 or if he put an extortionate price on his goods, the 
 foreign product flows in and meets the requirement 
 of the time. The home producer is all the time im¬ 
 pelled to produce better goods, at lower prices, lest 
 the foreign competitor should be able to do so and 
 share the benefits of the market. The home manu- 
 
OF THE TARIFF. 
 
 13 
 
 facturer has no such monopoly as will secure him in 
 the control of a market he does not deserve. If he 
 attempt the robbery of his customers, they can find 
 another source of supply. This doctrine stimulates 
 inventive genius, and constantly impels the manufac¬ 
 turer to advance in wealth and power, not by govern¬ 
 ment bounty, but by superior economy, fidelity, and 
 skill. 
 
 This is the true doctrine of the tariff, which is at 
 the same time the true doctrine of free trade. The 
 government must have revenues to support it, and 
 the needed funds can be so distributed in a tax on 
 imports as to neutralize artificial and oppressive con¬ 
 ditions, and realize the doctrine of the courts of jus¬ 
 tice, that equality is equity. This is not a new article 
 of political faith, invented for the occasion; but the 
 substantial fruit of victory in many a hard-fought 
 campaign between the democrats and the whigs. 
 With so large a national debt, it must be many years 
 before the question of tariff repeal can become a 
 practical one in American politics. The revenue 
 that must be raised is far greater than is needed for 
 any incidental protection the business interests ot the 
 country can require. 
 
 Tariff revision is another and a different matter. 
 The crudities and the injustice of the present tariff 
 are well-nigh innumerable. There should be a thor¬ 
 ough, systematic, and efficient reform of the whole 
 
14 
 
 THE TRUE DOCTRINE 
 
 list, to conform it to the principles of justice and 
 sound policy. It is not within the scope of my pres¬ 
 ent purpose to consider particular instances of injus¬ 
 tice in the levy of the tariff, but to confine my 
 remarks to the discussion of general principles, that 
 time may remain for reference to other matters of 
 greater present importance. 
 
 In the future, when law reform shall have emerged 
 from the realm of dreams into the world of realities, 
 we shall doubtless have a law declaring the principles 
 by which, and the limits within which, the tariff shall 
 be levied, and committing the details of the work to 
 some conservative agency. An inflexible tariff is 
 hardly apace with the civilization of our time. For 
 the safety and permanence of business, the rules of 
 law should be plain and certain, and the results of 
 their application sure. But with fixed rules estab¬ 
 lished by law, the revenue authorities might be 
 required to modify the rates of tax from time to 
 time after reasonable notice, to conform the results 
 to the requirements of the law. 
 
 Having made all needful “discriminations in favor 
 of American industry,” the residue if any of the tariff 
 to raise the revenue required by the Government should 
 be levied, so far as practicable, on articles of luxury: 
 and only in case of absolute necessity should any 
 part of the tax be extended to necessaries of life not 
 produced in this country. 
 
OF THE TARIFF. 
 
 15 
 
 A tariff of a given amount on any article may be 
 just enough to fairly equalize the conditions of pro¬ 
 duction at onetime ; but the same amount may at an¬ 
 other time be inadequate to prevent a destructive com¬ 
 petition, and at still another may be so high as to 
 amount to a prohibition of the foreign product. The 
 adjustment of the tariff from time to time to meet 
 these varying conditions, belongs, not to the legisla¬ 
 tive, but to the administrative department of the gov¬ 
 ernment. The treasury department, or a department 
 of commerce can better perform that work, than the 
 Congress. The treasury has for many years exercised 
 other powers quite as extensive, to the general accept¬ 
 ance of the people. In such cases a responsible one 
 is safer than an irresponsible many. Under such a 
 system, and governed by such principles,—■ 
 
 A JUST TARIFF WILL SECURE THE FREEST TRADE.