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Some Aspects of the Tariff Question; Taussig, Frank William
10 paragraphs found.
Part I, Chapter III, The Principle of Comparative Advantage
I.III.34

For an indefinite time, however, differences in general industrial effectiveness will remain. They will obviously remain, so far as they rest upon natural causes,—differences in soil, in mineral wealth, in climate. They will remain also in many manufacturing industries in which physical causes are not decisive. Some countries,—the United States among them, we may hope and expect,—will use machinery better, will apply labor-saving appliances more freely. The people of the United States will direct their labor with greatest advantage to those industries in which their abilities tell to the utmost. The development of the different industries will unquestionably continue to be affected by the accidents of invention and of progress, by dominant personalities in this country and in that, by the historical development of aptitudes and tastes, by some causes of variations in industrial leadership that seem inscrutable. But a general trend is likely to persist; in the United States labor-saving devices will be adopted more quickly and more widely. It will be shown in the following pages how this tendency has appeared in the great development that has taken place since the civil war, and how the effects of tariff legislation have been themselves influenced by the general tendency. In the industries where machinery can be used to most effect, this country will continue to have a comparative advantage.

Part III, Chapter IX, A Survey of Growth
III.IX.18

The history of the American iron trade after 1870 thus came to be in no small part a history of transportation. The cheap carriage of the ore and coal was the indispensable condition of the smelting of the one by the other. *11 Clearly, this factor was not peculiar to the iron industry. The perfecting of transportation has been almost the most remarkable of the mechanical triumphs of the United States. Great as have been the evils of our railway methods, disheartening as have been some of the results of unfettered competition, the efficiency of the railways has been brought to a point not approached elsewhere, largely in consequence of that very competition whose ill effects have been so often and so justly dwelt on. In the carriage of iron ore and of coal the methods of railway transportation which had been developed under the stress of eager competition were utilized to the utmost; and the same was true of the transfer from rail to ship and from ship to rail again, of the carriage in the ship itself, and of the handling of accumulated piles of the two materials. The ore is loaded on cars at the mines by mechanical appliances. At the Mesabi mines the very steam-shovel that digs the ore from the ground deposits it in the adjacent car. At the lake, high ore-docks protrude hundreds of yards into the water. On top of them run the trains, the ore dropping by gravity from openings in the car-bottoms into the pockets of the docks. Thence it drops again through long ducts into the waiting vessels, ranged below alongside the dock. At every step direct manual labor is avoided, and machines and machine-like devices enable huge quantities of ore to be moved at a cost astonishingly low. *12 The vessels themselves, constructed for the service, carry the maximum of cargo for the minimum of expense; while the machinery for rapid loading and unloading reduces to the shortest the non-earning time of lying at the docks. At the other end of the water carriage, especially on Lake Erie, similar highly developed mechanical appliances transfer from boat to railway car again, or, at will, to the piles where stocks are accumulated for the winter months of closed navigation. At either end the railway has been raised to the maximum of efficiency for the rapid and economical carriage of bulky freight. What has been done for grain, for cotton, for lumber, for all the great staples, has been done here also, and here perhaps more effectively than anywhere else: the plant has been made larger and stronger, the paying weight increased in proportion to the dead weight, the ton-mile expense lessened by heavier rails, larger engines, longer trains, and easier grades, the mechanism for loading, unloading, transhipping perfected to the last degree, or to what seems the last degree until yet another stage towards perfection is invented. And evidently here, as elsewhere, the process has been powerfully promoted by unhampered trade over a vast territory, and the consequent certainty that costly apparatus for lengthened transportation will never be shorn of its effectiveness by a restriction in the distant market.

Part III, Chapter X, How Far Growth was Due to Protection
III.X.17

Yet it must be admitted that other causes also had their effect, such as improvements at the nines and at the furnaces and iron works. At the mines, whether deep-worked or open-cut, the organization, the engineering, the machinery became better and better. The ores were systematically sampled and analyzed, their chemical and physical constitution ascertained, and the various kinds carefully assorted for different uses or mixed in the most advantageous combinations. At the iron and steel works the discoveries of applied science were before long systematically turned to account. Forty years ago the blast furnaces and iron works of the United States were behind those of Great Britain in their technology. Matters went much by rule of thumb. The ore and coal and flux were dumped into the furnace, and the product marketed as it chanced to turn out. *22 As time went on, the American works were no longer backward in the application of the best scientific processes. The economies from production on a large scale,—these being partly from the better organization of labor, partly from better technical appliances,—probably were secured more fully in the American establishments than in European. These were improvements in the iron industry itself, such as might be with some reason ascribed to the stimulus given by protective legislation.

Part III, Chapter XII, Protection and Combinations. Steel Rails, Tin Plate
III.XII.32

It would seem beyond question that some considerable improvements were made by the American tin plate makers. Welsh implements and methods, though copied slavishly at the outset, were not long retained without change. Gradually the tin plate mills were made more efficient. For example, the rolls were increased in size (width) from 18 inches to 28 inches. Overhead cranes operated by electric power were introduced for handling the material. Machine pots (for tinning), with some automatic appliances, took the place of hand pots; though the plates, it is said, still continued to be fed through singly by hand. In charging the annealing furnaces, however, the hand method was superseded by charging machinery. Certain of these changes were in time copied by the Welsh makers; sometimes doubtless with the same labor-saving results as in the United States, but in other cases (and these perhaps typical) with less success than in the originating country.

Note:
Thus in 1901, a writer in the (English) Iron and Coal Trades Review, May 2, 1901, speaks of "labor-saving appliances thoroughly exploited in America.... There is not a single point about the Welsh tin plate trade that can be said to compare favorably with the American." It should be said, however, that an unmistakable bias against the trade unions runs through this paper. A correspondent of the London Economist (January 29, 1910) remarks that "the English manufacturers sullenly clung to their old methods" for a considerable period, but "eventually scrapped their worst mills" and regained prosperity. The Iron and Coal Trades Review for March 28, 1913, printed an extended paper, read before the South Wales Institute of Engineers, by Mr. H. Spence Thomas, in which the Welsh industry is described and some comparison made with the American. "American practice gives 1,500 to 2,000 boxes per mill per week, whilst the English average is only half of this quantity." "In America all the pots are handled by overhead cranes,... by these mechanical means America is a great way ahead of the generality of our English works." In the discussion on this paper (p. 488) there was reference by several speakers to the difficulty of introducing improvements in face of the workmen's opposition. One referred to an episode in his own experience: "he put up an electric crane to do work for annealers that had hitherto been done by themselves; yet not one penny had been got off the annealers' wage bill" [the annealers were paid by the piece]. Still another said that "they were handicapped by the disinclination of the workmen as a whole to cooperate. If this could be secured, he felt they could do as well in the matter of output and economy as was now done in America."

On the restriction of output by the men (to 36 boxes per eight-hour shift), see Jones, The Tin Plate Industry, pp. 182 seq. This limit, easily within their powers, was slowly and reluctantly given up, in 1900-02. On opposition to labor-saving devices, ibid., p. 185; and on American improvements, p. 132.

Part IV, Chapter XVI, The Silk Manufacture--Some Conclusions
IV.XVI.1

The Silk Manufacture—Some Conclusions

Part IV, Chapter XVI

Summarizing the results of the preceding chapters, we may say that an industry quite new has been brought into being by protection. Imports of great classes of articles have been supplanted almost wholly by domestic products. Not only this; the domestic industry has progressed in technical effectiveness as well. Great advances have been made in its appliances and organization. The further question may now be taken up: has the progress been such as to justify the protectionist policy, not merely on the vulgar mercantilist grounds, but on the more tenable ground that a young industry has been successfully nurtured?

IV.XVI.6

As regards technical progress, one fact of significance is the source of supply for the machinery. Is it made within the country, or is it imported? Any industry which steadily imports its machinery from other countries makes thereby a confession of the lack of a comparative advantage. Its appliances are ipso facto no better than those of its competitors. Not only this, but the appliances are likely to be less effectively utilized. Though machinery imported from elsewhere may be operated as skilfully as in the country of origin, the probability is the other way. The same ingenuity and watchfulness that cause it to be devised in one country cause it also to be worked to best advantage there. On the other hand any industry which in this regard has got quite beyond foreign tutelage,—for which the machinery is of domestic design and make,—can claim at the least full equality. And if the machinery is not only made within the country, but is sought for elsewhere, being exported to other countries or copied there, the claim may be for more than equality: there is evidence of superiority. Every student of economic history knows that such a position of superiority was held by England through the greater part of the nineteenth century. Then foreign manufacturers, and especially those of the Continent, secured their machinery from England, or copied English models. Yet they were very slow to get the full results from the British machines; and as fast as they did, the British had progressed a stage further, invented or improved still more, and retained their superiority indefinitely. A similar position of sustained excellence is now held by the Americans in the machine tool trades, *40 and in wood working apparatus. How is it with the machinery used in the silk manufacture?

IV.XVI.11

On the whole, the conclusion seems warranted that there has been at least some approach to a successful application of protection to young industries. How near the approach is to complete success, how good the prospects for such success, would be difficult to say. But it seems beyond question that great advances have been made in the domestic industry, and that both in its technical appliances and in the adaptation of its products to the demands of the domestic market the characteristic American excellencies have been shown. The peculiarities of the raw material and the long-standing traditions of the industry interposed at the outset obstacles which would almost certainly have prevented ventures into this new field but for the stimulus from protection. Competition among the domestic producers stimulated invention, lowered prices, displaced the foreigners in the most important classes of goods, made the burden of the duties (so far as a burden remained at all) much less than the nominal rates indicated. *51

Part IV, Chapter XVIII, The Cotton Manufacture, continued. Contrasts with Other Countries, the Influence of the Tariff
IV.XVIII.8

A different obstacle, the force of which is not easy to estimate, but which beyond question is strong in England, is the attitude of the labor organizations. A well-informed observer has written to me in so many words that "in England the cotton weavers are thoroughly organized, and the union will not permit the English weavers to operate more than four looms each, and will not permit the use of the automatic looms." *88 This perhaps is put too strongly; but it has a large basis of truth. Even for ordinary looms the English weavers oppose rearrangements and reductions in piece rates when improvements make it possible for a weaver to operate with the same effort and attention a larger number of looms. Hence, as was noted a moment ago, the effectiveness of labor is less in England even where power looms of the same general type as in the United States are used. This difficulty is accentuated in the attitude of the English weavers toward the automatic loom. The weavers are afraid of the new device; it threatens to make employment less. They are not disposed to work the looms to their maximum output; they are loth to accept reduced piece-work rates, even though they can earn as much, even more. It is the familiar and almost inevitable disposition to "make work," the hostility to labor-saving appliances. It may not take the form of overt and unqualified refusal (as was stated in the letter just quoted), but it leads to a silent, stolid opposition. Against this the employer cannot make headway without friction and loss, expecially when his power of discharge and his ability to insist on the full productivity of machinery are hampered by a strong labor union. The same situation has already been considered with reference to the iron industry, and the same perplexities must be admitted. *89 The labor union movement has it good sides and its bad sides. Indispensable as it doubtless is for securing to the workmen a "fair" share in the gains from material progress, the dispassionate observer must face the fact that it leads them often to put checks on that very progress. For all the exaggeration in the statements that English unionism has sounded the death-knell to English industrial leadership, it remains true that the absence of firmly entrenched unions in the cotton and iron manufactures has facilitated the march of improvement in the United States.

Part IV, Chapter XXI, The Woolen Manufacture, continued. Characteristics of the American Industry
IV.XXI.22

The worsted industry, on the other hand, exhibits in all countries the more dominant characteristics of modern industry,—highly-developed and quasi-automatic machinery, standardized material, large plant, a dominance of organization, and (in comparison with the older branch) a lack of individuality. These characteristics appear most sharply in the manufacture of the staple grades of fabrics, turned out in large quantities and at prices low enough to make possible their sale to multitudes of purchasers. It is in accord with the general trend of American industry that our manufacturers should have turned chiefly to goods of this sort, while those calling for more detailed care, more variety, more individual finish continued to be imported even in face of the extremely high duties levied so long. It is in accord, too, with the general international division of labor that the more highly-finished goods should be produced in France more than in Germany, and in Germany more than in England. Thus it would seem that the manufacture of staple worsteds was the most promising part of the industry for the Americans, giving favorable opportunities for the methods and appliances which they have learned to apply better than others. And yet, to repeat, the evidence points little to progress. The record on the whole is one of imitation, not of independent advance, still less of leadership. While the carded woolen branch may be said to have been left behind by the American industrial current, the worsted branch simply kept up with the general European movement, and showed little sign of keeping pace with that in the United States. *157