artificially raise the cost of materials and are unable to control the price of the product into which these materials enter, then it often happens that we must keep the wages down in corresponding measure, or else give up the undertaking; and, again, a yet more subtle difficulty: if we can not make a profit over and above the cost of materials, the wages, and the general expenses, then no capital will be invested in that branch of industry, and no wages can be paid, for lack of profit.
Now, observe how subtle this matter is. Any conspicuous or important branch of industry which will pay ten per cent profit will attract capital and will be established; but if the tax on the crude material is even ten per cent upon the finished product, and this tax can not be paid without doing away with the profit, then that art stops, and the other ninety per cent which would be distributed among the workmen is lost to them, merely because there is a disadvantage of ten per cent in the cost of the material as compared to some other places.
Now, then, any one who is conversant with the complexity of all modern manufactures can not fail to be aware that the revenue which the Government derives of $50,000,000 on the crude or partly manufactured materials which we do import and which we do use in the processes of our domestic industry, may so much restrict that industry by increasing our own cost of production as to limit our home market both for domestic and foreign traffic, and may prevent the establishment of arts in which ten times as much, or $500,000,000, might be distributed among those who would do the work if these articles were free from taxation.
This is the consequence of the higher price of domestic products in this country or the lower price which prevails abroad for lack of competition.
The very worst effect of a duty on. crude materials ensues when, according to its advocates, it is most successful. They hold that if, by our tax, the price is put down in a foreign country, then the foreigner pays the tax. There are no words suitable to apply to such folly. By that very depression in the price of pig iron and wool we have built up the manufactures and machineshops of Europe, and have failed more and more to hold our home market even for the specific products of the loom and the forge.
Moreover, the price of some of the most necessary articles of our domestic products which enter into our domestic industry, notably iron and steel, are maintained far above what the price would be except for this system of taxation, although not, perhaps, to the full measure of the rate of duty which is assessed. Hence it follows that, owing to this higher price on the most necessary articles of consumption in the manufacturing and me-