Speech 14
TARIFF REFORM AND BUSINESS STABILITY

FROM    AN    ADDRESS    DELIVERED    IN    LOGANSPORT, INDIANA,   SEPTEMBER   23,   1902

I AM going to ask you to take what I say at its exact face value, as I like whatever I say to be taken.  It is suggested by coming to this great Western State and speaking to one of its thriving cities.  We believe that the American business man is of a peculiar type; and probably the qualities of energy, daring and resourcefulness which have given him his prominence in the international industrial world find their highest development here in the West.  It is the merest truism to say that in the modern world industrialism is the great factor in the growth of nations.  Material prosperity is the foundation upon which every mighty national structure must be built.  Of course there must be more than this.  There must be a high moral purpose, a life of the spirit which finds its expression in many different ways; but unless material prosperity exists also there is scant room in which to develop the higher life.  The productive activity of our vast army of workers, of those who work with head or hands, is the prime cause of the giant growth of this nation.  We have great natural resources, but such resources are never more than opportunities, and they count for nothing if the men in possession have not the power to take advantage of them.  You have built up in the West these cities of the Mississippi Valley and the Great Lakes; as all the region round about them has been built up — that is, because you had the qualities of heart and brain, the qualities of moral and physical fibre, which enabled you to use to the utmost advantage whatever you found ready to your hands.  You win, not by shirking difficulties, but by facing and overcoming them.

In such development laws play a certain part, but individual characteristics a still greater part.  A great and successful commonwealth like ours in the long run works under good laws, because a people endowed with honest and practical common sense ultimately demands good laws.  But no law can create industrial well being, although it may foster and safe guard it, and although a bad law may destroy it.  The prime factor in securing industrial well being is the high average of citizenship found in the community.  The best laws that the wit of man can devise would not make a community of thriftless and idle men prosperous.  No scheme of legislation or of social reform will ever work good to the community unless it recognizes as fundamental the fact that each man's own individual qualities must be the prime factors in his success.  Work in combination may help and the State can do a good deal in its own sphere, but in the long run each man must rise or fall on his own merits; each man must owe his success in life to whatever of hardihood, of resolution, of common sense and of capacity for lofty endeavor he has within his own soul.  It is a good thing to act in combination for the common good, but it is a very unhealthy thing to let ourselves think for one moment that anything can ever supply the want of our own individual watchfulness and exertion.

Yet given this high average of individual ability and invention, we must ever keep in mind that it may be nullified by bad legislation, and that it can be given a chance to develop under the most favorable conditions by good legislation.  Probably the most important aid which can be contributed by the National Government to the material well being of the country is to ensure its financial stability.  An honest currency is the strongest symbol and expression of honest business life.  The business world must exist largely on credit, and to credit confidence is essential.  Any tampering with the currency, no matter with what purpose, if fraught with the suspicion of dishonesty, in result is fatal in its effects on business prosperity.  Very ignorant and primitive communities are continually obliged to learn the elementary truth that the repudiation of debts is in the end ruinous to the debtors as a class; and when communities have moved somewhat higher in the scale of civilization they also learn that anything in the nature of a debased currency works similar damage.  A financial system of assured honesty is the first essential.

Another essential for any community is perseverance in the economic policy which for a course of years is found best fitted to its peculiar needs.  The question of combining such fixedness of economic policy as regards the tariff, while at the same time allowing for a necessary and proper readjustment of duties in particular schedules, as such readjustment becomes a matter of pressing importance, is not an easy one.  It is perhaps too much to expect that from the discussion of such a question it would be possible wholly to eliminate political partisanship.  Yet those who believe, as we all must when we think seriously of the subject, that the proper aim of the party system is after all simply to subserve the public good, can not but hope that where such partisanship on a matter of this kind conflicts with the public good it shall at least be minimized.  It is all right and inevitable that we should divide on party lines, but woe to us if we are not Americans first, and party men second.  What we really need in this country is to treat the tariff as a business proposition from the standpoint of the interests of the country as a whole, and not from the standpoint of the temporary needs of any political party.  It surely ought not to be necessary to dwell upon the extreme unwisdom, from a business standpoint, from the standpoint of national prosperity, of violent and radical changes amounting to the direct upsetting of tariff policies at intervals of every few years.  A nation like ours can adjust its business after a fashion to any kind of tariff.  But neither our nation nor any other can stand the ruinous policy of readjusting its business to radical changes in the tariff at short intervals.  This is more true now than ever it was before, for owing to the immense extent and variety of our products, the tariff schedules of today carry rates of duty on more than four thousand articles.  Continual sweeping changes in such a tariff, touching so intimately the commercial interests of the nation which stands as one of the two or three greatest in the whole industrial world, can not but be disastrous.  Yet on the other hand where the industrial needs of the nation shift as rapidly as they do with us, it is a matter of prime importance that we should be able to readjust our economic policy as rapidly as possible and with as little friction as possible to these needs.

We need a scheme which will enable us to provide a reapplication of the principle to the changed conditions.  The problem therefore is to devise some method by which these shifting needs can be recognized and the necessary readjustments of duties provided without forcing the entire business community, and therefore the entire nation, to submit to a violent surgical operation, the mere threat of which, and still more the accomplished fact of which, would probably paralyze for a considerable time all the industries of the country.  Such radical action might very readily reproduce the conditions from which we suffered nine years ago, in 1893.  It is on every account most earnestly to be hoped that this problem can be solved in some manner into which partisanship shall enter as a purely secondary consideration, if at all; that is, in some manner which shall provide for an earnest effort by non-partisan inquiry and action to secure any changes the need of which is indicated by the effect found to proceed from a given rate of duty on a given article; its effect, if any, as regards the creation of a substantial monopoly; its effect upon domestic prices, upon the revenue of the government, upon importations from abroad, upon home productions, and upon consumption.  In other words, we need to devise some machinery by which, while persevering in the policy of a protective tariff, in which I think the nation as a whole has now generally acquiesced, we would be able to correct the irregularities and remove the incongruities produced by changing conditions, without destroying the whole structure.  Such machinery would permit us to continue our definitely settled tariff policy, while providing for the changes in duties upon particular schedules which must inevitably and necessarily take place from time to time as matters of legislative and administrative detail.  This would secure the needed stability of economic policy which is a prime factor in our industrial success, while doing away with any tendency to fossilization.  It would recognize the fact that, as our needs shift, it may be found advisable to alter rates and schedules, adapting them to the changed conditions and necessities of the whole people; and this would be in no wise incompatible with preserving the principle of protection, for belief in the wisdom of a protective tariff is in no way inconsistent with frankly admitting the desirability of changing a set of schedules, when from any cause such change is in the interests of the nation as a whole — and our tariff policy is designed to favor the interests of the nation as a whole and not those of any particular set of individuals save as an incident to this building up of national well being.  There are two or three different methods by which it will be possible to provide such readjustment without any shock to the business world.  My personal preference would be for action which should be taken only after preliminary inquiry by and upon the findings of a body of experts of such high character and ability that they could be trusted to deal with the subject purely from the standpoint of our business and industrial needs; but, of course.  Congress would have to determine for itself the exact method to be followed.  The Executive has at its command the means for gathering most of the necessary data, and can act whenever it is the desire of Congress that it should act.  That the machinery for carrying out the policy above outlined can be provided I am very certain, if only our people will make up their minds that the health of the community will be subserved by treating the whole question primarily from the standpoint of the business interests of the entire country, rather than from the standpoint of the fancied interests of any group of politicians.

Of course in making any changes we should have to proceed in accordance with certain fixed and definite principles, and the most important of these is an avowed determination to protect the interests of the American producer, be he business man, wage worker, or farmer.  The one consideration which must never be omitted in a tariff change is the imperative need of preserving the American standard of living for the American workingman.  The tariff rate must never fall below that which will protect the American workingman by allowing for the difference between the general labor cost here and abroad, so as at least to equalize the conditions arising from the difference in the standard of labor here and abroad — a difference which it should be our aim to foster in so far as it represents the needs of better educated, better paid, better fed, and better clothed workingmen of a higher type than any to be found in a foreign country.  At all hazards, and no matter what else is sought for or accomplished by changes of the tariff, the American workingman must be protected in his standard of wages, that is, in his standard of living, and must be secured the fullest opportunity of employment.  Our laws should in no event afford advantage to foreign industries over American industries.  They should in no event do less than equalize the difference in conditions at home and abroad.  The general tariff policy to which, without regard to changes in detail, I believe this country to be irrevocably committed, is fundamentally based upon ample recognition of the difference in labor cost here and abroad; in other words, the recognition of the need for full development of the intelligence, the comfort, the high standard of civilized living and the inventive genius of the American workingman as compared to the workingman of any other country in the world.