First, that no country, with the exception of the United States, which had adopted in a greater or less degree the policy of protection through duties or restrictions on imports, had ever regarded the taxation of the imports of "raw,"[1] or crude, or partly manufactured materials, to be subsequently used for larger manufacturing, as an element of protection in its largest sense to its domestic industry, but rather as antagonistic to, and destructive of, such industry; and that, while such taxation in the United States had undoubtedly built up some industries and enriched their owners, it had been a great restraint on the development of a much larger and higher class of industries, employing a greater number of workmen, and paying much higher average wages. Second, that the countries of Europe in which the average rates of wages were lowest were the most clamorous for protective duties on imports; and that high wages in any country, conjoined with the extensive and skillful use of machinery, instead of being evidence of industrial weakness, were evidence of great industrial strength; inasmuch as no employer can continuously pay high wages unless his product is large, his labor most effective, and his cost of product, measured on the terms of labor, comparatively low.
The announcement of these views, and especially their publication in a report in 1869, created much antagonism among the advocates of the policy of extreme protection in the country; and Horace Greeley and others publicly charged that the commissioner had been induced to change his views through the corrupting agency of British gold. Notwithstanding this, a draft for a complete revision of the tariff of the United States, prepared under his almost sole supervision, and accompanied with a report on the existing revenue resources and industrial and financial condition of the country, was submitted to the Forty-first Congress by Secretary McCulloch, with his indorsement, in December, 1887. This draft, subsequently embodied in the form of a bill, with slight modifications by the Finance Committee of the Senate, came very near enactment into law, the Senate passing it by a vote of twenty-seven to ten. In the House of Representatives it failed in the closing hours of the second session by a very few votes, and not by a direct vote, but on a motion to sus-
- ↑ The definition, or rather determination, of what constituted a "crude" or "raw" material for manufacturing purposes has always been a matter of embarrassment to legislators and economic writers, inasmuch as a confessedly manufactured and often elaborate product may be relatively a raw or crude material for successively higher grades or processes of manufacture. A proposition recently proposed by Mr. Lindley Vinton, of New York, to restrict the application of the above terms in law, commerce, and economics, to the state or condition in which any product first enters into trade or commerce, would seem to be so free from any ambiguity of meaning as to be worthy of consideration.
