Some Aspects of the Tariff Question
By Frank William Taussig
The main purpose of the present volume is to consider and illustrate some questions of principle in the controversy on free trade and protection. The three chapters which constitute Part I state these questions and summarize the main conclusions. The succeeding Parts give illustrations and verifications drawn from the history of several industries,—sugar, iron and steel, and textiles. Something is thereby done, I trust, to make more precise and complete the theory of the subject, and to vivify it through illustrations from experience; and some contribution is offered also on the general economic history of the United States. [From the Preface]
First Pub. Date
Cambridge, MA: Harvard University Press
The text of this edition is in the public domain.
- Part I, Chapter I, Duties, Imports, Prices
- Part I, Chapter II, Protection to Young Industries
- Part I, Chapter III, The Principle of Comparative Advantage
- Part II, Chapter IV, Introductory--Louisiana
- Part II, Chapter V, Hawaii
- Part II, Chapter VI, Porto Rico, The Phillipines, Cuba
- Part II, Chapter VII, Beet Sugar
- Part II, Chapter VIII, Refined Sugar and the Sugar Trust
- Part III, Chapter IX, A Survey of Growth
- Part III, Chapter X, How Far Growth was Due to Protection
- Part III, Chapter XI, Copper
- Part III, Chapter XII, Protection and Combinations. Steel Rails, Tin Plate
- Part III, Chapter XIII, Imports and Exports--Dumping
- Part IV, Chapter XIV, The Growth of the American Silk Manufacture
- Part IV, Chapter XV, The Silk Manufacture, continued. European and American Conditions, Imports and Domestic Production
- Part IV, Chapter XVI, The Silk Manufacture--Some Conclusions
- Part IV, Chapter XVII, The Cotton Manufacture. Progress of the Domestic Industry
- Part IV, Chapter XVIII, The Cotton Manufacture, continued. Contrasts with Other Countries, the Influence of the Tariff
- Part IV, Chapter XIX, Wool
- Part IV, Chapter XX, The Woolen Manufacture. The Compensating System, Woolens and Worsteds
- Part IV, Chapter XXI, The Woolen Manufacture, continued. Characteristics of the American Industry
The Silk Manufacture, continued. European and American Conditions; Imports and Domestic Production
Part IV, Chapter XV
The principle of which so much has been made in the preceding chapter,—that of comparative advantage,—calls for a consideration not of the American silk industry only, but of that in competing countries as well. And the change from handicraft to machinery did not take place in the United States alone. A belated industrial revolution set in, affecting all the producing countries. But it affected them in different degrees, and with different results for the various branches of the industry. It is instructive to compare the course of development in the several countries.
A general indication of the situation is got by comparing the use of hand looms and power looms. The following figures are given for the year 1900 by a competent authority.
|Power Looms||Hand Looms|
It appears that in each of those countries a large number of hand looms were still in use as late as 1900. The proportion in Germany, or at least in the Crefeld district, was less than in France, Switzerland, Italy; but everywhere hand looms persisted. The contrast is striking with the complete disappearance of hand looms in the United States.
In the Crefeld district of Germany, the most important and highly organized silk center of that country, the transition from household industry to the factory system set in during the last quarter of the nineteenth century. The power loom came into use in the decade 1880-90, and was increasingly used after 1890. It seems to have been perfected earliest for velvet ribbons. An invention of 1887 gave a great impetus to the velvet ribbon industry of the district, and by the beginning of the present century hand looms for these ribbons had almost entirely disappeared. For silks also the power loom made its way rapidly after 1885. Yet hand looms continued to be used for silks, both broad and narrow. Some specialties and goods of unusual pattern, of which but a small quantity of any one kind can be marketed, are still made to most advantage on hand looms. Heavy silks, such as wear long and well, are also so made. But the lighter, less durable fabrics, often made with an admixture of cotton or artificial silk, have come within the domain of the power-driven machine. These differences, as will presently be explained, are of no little significance for the problems of international trade and for the rivalry between the Continent and the United States.
Somewhat similar to Germany is Switzerland, where Basel and Zurich are important silk manufacturing centers. That part of the German industry which is near the Swiss border, toward the south, belongs in reality to the latter country, being mainly conducted by enterprising Switzers who have transferred their establishments across the border because of the German tariff. Basel is a center chiefly for ribbons, Zurich for broad goods. It is in the latter that the machine seems to have conquered most decisively. In general, it is the Swiss and Germans who are the machine-using people of the Continent; and accordingly the power loom and all that goes with it have been introduced furthest in those two countries. But in Switzerland, as in Germany, household production maintains a place. In Basel the ribbon “manufacturers” are largely contractors, who supply material to scattered household weavers and buy from them the ribbons or other woven fabrics. The Swiss peasants, and especially the peasant women, continue to ply the loom during the long winters. This domestic industry holds its own tenaciously. As late as 1905 the number of power looms in Switzerland exceeded but little the number of hand looms.
In France, which had so long been the leading silk manufacturing country, the industry clings even more to the old ways. The number of hand looms is about double the number of power looms; the domestic weaver holds his place. French silks, especially those made for the export trade, are of high quality. They depend for their sustained superiority on excellence of pattern and perfection of make. The cheap everyday silks, turned out in great quantities of one pattern, are characteristic of the machine industry of other countries, especially of the United States. Limited patterns and sterling quality, catering to the well-to-do and the rich, are the typical products of the French industry; and these are precisely the traditional characteristics of the silk manufacture as it was before the machine began to invade it.
An interesting phase of the domestic industry in all the countries of the Continent is the application of electric power to the household loom; or rather, the introduction into domestic industry of a new type of loom driven by electric power. The possibility of dividing and transmitting the electric current makes it feasible to secure, in some degree at least, the advantages of power without the concentration and the large-scale operation which are the inevitable concomitants of the direct use of steam. Electricity has been parcelled out to small users in various branches of industry,—cutlery and other metal trades, and various branches of the textile industries. In silk weaving it has been thus utilized in Switzerland, in Germany, in France. The water power of Switzerland and her winter-bound yet industrious peasantry have led to an extended use of electric household looms, the wires transmitting the water-generated power to the deepest recesses of the mountain valleys.
*26 Observers differ on the potentialities of this movement. To some it seems to promise the salvation of the domestic industry, and its maintenance for an indefinite time,—nay, even a reaction against the factory. By others it is thought but a temporary phase, only delaying for a time the inevitable universalization of concentrated large-scale production. Doubtless the factory will prevail eventually in most industries; but in the silk manufacture the nature of the raw material and the peculiarities of the market seem to give unusual opportunities to household industry fortified by this utilization of electric power.
A peculiar situation has developed in England. The old silk industry has disappeared; but a new one has arisen in its place. Both the disappearance of the old and the emergence of the new are instructive.
The silk manufacture was introduced into England in the sixteenth and seventeenth centuries by Flemish and Huguenot refugees. Carried on as a typical “domestic” industry,
*27 it was especially favored by the protective legislation of the succeeding period. Even after the decisive blow had been dealt the protective system through the abolition of the corn laws in 1846, a considerable protecting duty was retained on silks. Not until the Franco-British commercial treaty of 1860 were they admitted free into Great Britain; this being the very last step in carrying into effect the policy of free trade.
The British silk manufacture, as it stood in 1860 succumbed under the new régime. It had been conducted by the same methods as when first introduced from France. It was a handicraft industry, and could not hold its own against the competition of the continental products of the same industrial type. An almost romantic part of it was carried on in the Spitalfields district of London, where the Huguenots had first gathered and where the industry had long been carried on by them and their descendants. The Spitalfields industry was decadent even before 1860; it had been handicapped by the soot and clouds of London and weakened by the drifting of its workpeople to other industries. After that fatal date, only a few hand loom weavers remained; and these still produce a few specialties for West End retailers,—a contrast to the 50,000 persons once employed in the district.
*28 Other places,—Coventry, Macclesfield, Manchester,—also had carried on a considerable silk industry; since 1860 it has shrunk or disappeared. Silk throwing, formerly a trade of importance, has been entirely given up. Most of the hand looms, once thousands in number, have gone. Macclesfield in the old days had 6,000 or 8,000 hand looms; perhaps a 1,000 such remain.
*29 In other silk centers of former days, a small industry, in odds and ends for local sales, continues to hold a place.
*30 But the remnant is of no considerable industrial importance, and it is dwindling.
A silk industry, however, still remains in England, or rather a congeries of industries. Some are adaptations or growths from the old. Certain specialties continue to be made, more or less after the old methods: rich brocades, heavy damasks for furniture and decorative purposes. Large hand looms, run by skilled men, continue to be used for these goods. Irish poplins also (made of silk and wool mixed) are made on hand looms, and hold their own.
*31 But far more important is an industry quite new: the manufacture of spun silk yarns and fabrics. While the making of thrown silk has disappeared from England,—whatever thrown silk the English still use is imported,—that of spun silks flourishes. As has already been explained, spun silk is made from “waste” silk. As Americans in general do best in weaving, so the English do best in spinning; their special aptitude for this in all textile industries
*32 being due in part to climatic advantages, but in large part to causes less easy of discernment. The success of the English in spinning silk is in striking contrast with their abandonment of silk throwing. New machinery has been devised; a great industry has grown up. And not only does the spinning industry hold its own within the country, but exports of silk yarns take place to the Continent and the United States. The case is one among those, puzzling at first, where the same commodity moves two ways, being both imported and exported. The explanation clearly is that the goods which pass in these cross-currents are of different grades and qualities. It is the finest counts of silk yarns that are exported from England, just as are the finest counts of cotton yarns. Thrown silk meanwhile is imported into England. A few woven goods, especially goods of mixed materials, are again exported; so that, while the imports of silk goods into England have greatly increased, the exports of silks have on the whole held their own.
From the protectionist point of view, the decline of the older silk manufacture in England is a clear national misfortune. An industry has gone; so much employment has been lost. In the evidence gathered by the Chamberlain Tariff Commission, this loss was pointed to as a convincing illustration of the harm caused by the free trade policy. The real question, however, is whether anything was lost which it would have been worth while to retain. England long occupied, in relation to the countries of the Continent, a position similar to that which the United States has occupied in relation to all Europe. She was the country of advanced industry and of general economic effectiveness, and therefore the country of higher wages. Her superiority is not so marked now as it was half a century ago. In comparison with some countries, notably Germany, it seems to be in process of ceasing; but certainly it persisted through the greater part of the period here under review. Silk throwing and silk weaving under the old methods were not industries in which the English excelled; they did excel in other industries; and labor and capital turned to the others, when no longer kept by legislative stimulus in those less adapted to the country’s genius. Even before 1860 the older branches of silk manufacturing were declining. Under free trade, they went by the board. Part of the labor formerly occupied in them was turned to the new industry which has sprung up, notably that in spun silk yarns,—an industry based on the traditional excellencies of the British: specialization, effective use of good machinery, sterling quality in the product. But probably the greater part went not to those remaining specialties of the same industry, but to other industries. Thus Coventry, formerly a center for silks and expecially for silk ribbons, is now one for motors and bicycles, and is more prosperous than it was under the old régime. There has been not the net loss which the protectionist bemoans, but an adjustment to new conditions which the free trader may reasonably claim to be advantageous.
Turning now to a comparison between the European and the American silk industries, we find striking resemblances and yet differences equally striking: in some respects a similar course of development, in others a very different one.
An instructive situation is to be found in the manufacture of sewing silk. This is the one branch which is really old in the United States. It goes back to the first half of the nineteenth century. The transition from household industry to machine and factory production here began as early as 1829. Successive improvements in machinery were made from time to time; a great impetus came in the middle of the century from the invention of the sewing machine and the consequent demand for “machine twist,”
i.e., strands adapted for use on the sewing machine. By 1850 and 1860 the industry had reached dimensions large for those days. It continued to grow steadily in the modern period, mainly in the same localities and even in the same establishments as before the war.
The exceptional position of sewing silk almost tells its own tale. Here is a machine product, peculiarly adapted to American methods of production and also to American needs. The machinery for turning it out is of the automatic type; the minimum of direct labor is required; mechanical ingenuity triumphs. This sort of thing the American can do better than any one else, and he goes ahead indifferent to tariff support. And for the same reasons, the English also have here some comparative advantage. Sewing silks have not disappeared from England under the free trade régime. Like spun silk, they hold their own easily against continental competition.
But as regards reeled silks,—which remain the most important of the silk products,—the resemblance between English and American conditions ceases. They are made in very great quantities in the United States; they are very little made in England. They have been protected in the United States, and left quite without tariff support in England. The march of invention and the conquests of the machine have been noteworthy in the United States, and in Germany also; no such advances in this branch of the industry have appeared in England. We have here somewhat different questions regarding the influence of protection or free trade, and the causes of the geographical distribution of the industry.
The branch of the silk manufacture which seems to have undergone the greatest changes and shows the greatest contrasts is that of ribbon making. Vast quantities of ribbons, both silk and velvet,—are made from start to finish by the power-driven machine; turned out in mass production by the factories of Crefeld and Paterson, the two great seats of the industry in Germany and the United States. They are standardized goods, made for a very wide public; often composed in part of other materials (especially cotton); not articles of luxury, except so far as anything used for adornment may be so regarded. In Great Britain, on the other hand, the ribbon manufacture, which played a considerable part in Coventry and elsewhere before the French treaty, is virtually extinct. Barring a few specialties, silk ribbons, like broad silks, are secured chiefly by importation.
In the United States, again, the domestic manufacture of ribbons has almost complete command of the market. It is true that imports continue; but they are highly specialized imports. A few expensive goods of unusual patterns are alone procured from abroad. They come in partly for sale to the rich and fastidious, partly in order to serve as models for American manufacturers, who still take their cue from the French in matters of fashion. The household loom (hand or electric power), or a slow-moving power loom, can hold its own in making such goods, of which only a small supply can be marketed. Machinery can never be applied to advantage unless large quantities of one particular sort of article are to be produced. But the great mass of standardized ribbons,—by no means necessarily cheap goods, but goods not choice,—are made in the United States for domestic sale. Here the household industry has no place whatever; and such of its special products as continue to be in demand are procured by importation.
A position midway between that of France and that of the United States is held by Germany and Switzerland. Crefeld is the seat of a well-developed machine industry. Yet in the environs of Crefeld, and in Elberfeld, still more in southern Germany, there is much household weaving of silk ribbons. So, in Switzerland, the great ribbon industry of Basel is partly factory, partly household.
*36 In these two countries, both household and factory industry thus exist side by side. In part, they compete; the victory of the machine is not so assured as in the United States. But in part they tend to turn to the kinds of product to which they are severally adapted. Specialized ribbons, elaborated patterns, expensive grades, tend to be made on the smaller scale, and remain within the domain of household and handicraft production. Fabrics for wide markets and mass consumption are made in the factory.
Velvet ribbons tell a similar tale, though perhaps with a difference of degree in favor of the machine. The older methods of making velvets and pile fabrics were largely displaced in the decade 1880-90, by inventions which seem to have revolutionized this branch of the industry with great rapidity. Here again Crefeld is the seat of a highly developed industry, using much cotton in admixture with silk, and turning out cheaper grades of goods for sale to the masses. It is significant that spun silk (“Schappe”) is largely used, both in the United States and in Germany, in the manufacture of these so-called “popular” fabrics. The machinery was early transferred to the United States, and there seems to have been remodelled and improved. In both countries the steady march of invention has enabled a wider range of goods to be turned out by machine processes than was at first thought possible,—figured goods, more varied patterns. Yet in both it is the standardized articles which are chiefly turned out by the machines. In the United States, velvet ribbons, like silk ribbons, are imported only when of special quality or design.
Essentially the same situation appears with broad silks; but here apparently with less decisive conquest by the machine, and with somewhat greater persistence of methods and products of the handicraft type. The silks of half-a-century ago, made from hand thrown tram or organzine on hand looms, had a character and quality of their own, which the machine made article cannot fully rival. For various kinds of textiles,—woolens and linens, as well as silks,—fabrics of a certain solidity and durability do not seem within the competence of rapidly-driven machinery. The “home-spun” goods may lack the sheen and the even finish of the factory article, but their very uneven quality gives them a certain charm. And they “wear like iron.” Such were the silks of older days, when a woman kept her best black dress for life. A piece of silk such as is woven on a hand loom in France, or for that matter a Chinese mandarin’s similarly woven coat, is an extraordinary product. No wet or wear harms it; it holds its sober gloss year after year, even decade after decade. Such stuffs, too, have a certain touch and appearance never to be found in the factory article. The new types of factory-made broad silks fit in many ways into the whims of the modern woman and into the fast-changing social conditions. If they are cheap, they are dressy. If they wear out in a brief season, so do the current fashions of color and design. Being made in quantities and at comparatively low cost, they can be purveyed to a large constituency. In all the advanced countries, and especially in the United States, the steady democratization of society has caused dress silks as well as silk ribbons to be in wide and growing demand,—a circumstance which in itself tends to give victory to the machine made product.
Imports of broad silks into the United States continue; but, as in the case of ribbons, for specialized fabrics only. France still maintains her place as the country of excellent and expensive silks. Fabrics of high quality or of unusual design, such as are not made in large quantities for any single piece, still come from the looms of Lyons. The circumstance that dress silks give more scope for individuality and variety than ribbons enables the foreigner, and especially the French manufacturer, to hold his own, notwithstanding high duties, in supplying the American women of expensive tastes (no small constituency) with ornate or “distinctive” fabrics. It would seem, too, that broad silks are less successfully handled by the machine than the narrower goods. One reason is that they need more minute inspection, more careful finishing; and these ancillary operations always involve hand labor and minute attention, even where the more essential work has been relegated to the machine. So far as the American output and the continuing imports are concerned, the situation is again the same: the market is mainly supplied by the machine made domestic article, and only special qualities are imported, usually of the kind still made by handicraft or quasi-handicraft methods.
The continuance of imports for still other kinds of silks and the different relation between importation and domestic production
*38 for these other goods are explicable on the same principle. Silk laces, for example, are chiefly imported. The situation is the reverse of that just described for ribbons and broad silks: the domestic production is comparatively small. This, too, notwithstanding the fact that the duty on articles of this class was long kept unusually high; it remained 60 per cent even when the
ad valorem duty on most silks was reduced (in 1909) to 50 per cent. Silk laces, embroideries, insertions and the like are made by hand, or on hand machines. Some simple patterns are indeed made within the country under the stimulus of the duty; but the tariff, high as it is, has no effect in securing the domestic production of most goods of this class. The comparative disadvantage is too great. A similar case is that of silk trimmings. Dress and cloak trimmings are mainly imported. They are usually made in small quantities and of patterns much varied; consequently it proves not worth while to make them in the United States. And it is characteristic, again, that certain other kinds of silk trimmings, used for upholstery purposes and the like, are made at home, not imported. These are more uniform in pattern, are more in the nature of standardized articles, give an opportunity for machinery and for operations on something approaching large scale: they afford some scope for the American industrial excellencies.
Silk Industry of the World, p. 41. The figures for Germany are not for the whole of that country, but only for the district of Crefeld, the chief manufacturing center.
Der Uebergang von der Handweberei zum Fabrikbetrieb, Schmoller’s
Forschungen (1906), pp. 33-37, 44. Cf. Bötzkes,
Seidenwarenproduktion and Seidenwarenhandel (1909), p. 28.
|In household use||4,057 looms|
|In factories||1,750 “|
Three-quarters of the household weaving was done by women; and agriculture was the main occupation of those engaged in weaving. See Thürkauf,
Die Basler Seidenindustrie, pp. ix, 77, 181. For Switzerland as a whole I find these figures for 1905 (Bötzkes, p. 25):—
“Until 1875 the looms of Lyons were exclusively worked by hand. At present there are yet about 15,000 jacquard hand looms in Lyons and surrounding villages, making special kinds of goods, mostly high-class brocades. In more recent years, especially the last two decades, a number of manufacturers have built large mills in order to weave larger quantities of pile fabrics, but the majority of manufacturers are still placing orders outside ‘à façon.’…
“How long Lyons will retain her present supremacy over her formidable competitors is a hard thing to guess. Silk manufacturing is growing in such enormous proportions in the United States, Germany, and Switzerland, that perhaps they may manage eventually to put the French out of business through cheaper workmanship and larger output. The economists say that the silk business in Lyons has not progressed during the last decade, but they still recognize that it is in Lyons alone that can be found the highest grades of silks and the most beautiful designs (one has only to pay a visit to the Lyons Art Museum to be convinced of this assertion). The royalties and courts of all nations, for their pageants, cannot find elsewhere silks sold at hundreds of francs per yard and worth it.”—L. Duran,
Raw Silk, pp. 75, 77.
Histoire économique de la soie, p. 245, gives the following figures for the Lyons region:
|Hand looms||Power looms|
Die Basler Seidenindustrie; Cf. p. 211. See also, on the general possibilities, Brauns,
loc. cit., p. 130, and Wilbrandt,
Die Weber in der Gegenwart (1906), pp. 95, 109.
Zwei Bücher zur sozialen Geschichte Englands, p. 560. On the continuance of the “cottage factories” through the middle of the nineteenth century, see the
Report of the (Chamberlain)
Tariff Commission, “Evidence on the Silk Industry,” paragraph 3390. A former silk manufacturer of Coventry remarked, “The cottage factories were generally built to hold two or three looms, and generally the husband, wife, or eldest son or daughter used to attend the two or three looms…. I have seen the High Street in front of our warehouse crowded with carriers’ carts [bringing silk goods from the neighboring villages] for several hundred yards up the street.” This Tariff Commission, organized under the leadership of Joseph Chamberlain as part of the “tariff reform,”
i.e., protectionist movement, is not to be confounded with official commissions.
Life and Labour in London, vol. iv, ch. viii (edition of 1897); and an excellent paper by Mr. F. Warner, a silk manufacturer, in the
Journal of the Society of Arts, 1903-04, pp. 124, 131. Mr. Warner remarks, “In the Spitalfields the weavers, draughtsmen, jacquard machinists, loom builders, card cutters, and other mechanics, possessing a knowledge which had for generations been handed down from father to son… were competent and skilful.” But he adds that the “manufacturers” were inefficient, and had “no taste, natural or acquired.”
Report of the (Chamberlain)
Tariff Commission, “Evidence on the Silk industry,” paragraph 3260. The whole of the evidence in this publication is instructive.
Report of the Tariff Commission, paragraph 3275.
Report of the Tariff Commission, paragraphs, 3377, 3378 3396, 3398; Warner’s paper, cited above, p. 128.
Tariff Commission Report, paragraph 3319.—The head of the firm, Lister, also took a leading part in the development of the British worsted manufacture; see below, p. 339.
Very few fabrics are made entirely of spun silk. The yarns are used mainly as cotton is used in silk manufacturing,—for admixture. They supply the pile for cotton-back pile fabrics; and they are used as warp or as weft (filling) with reeled silk.
Silk Manufacture in the United States (1883), pp. 32
seq. See also the book of 1844 on
Silk Culture in the United States (noted above, p. 223) at p. 9. The invention of the first machines began as early as 1828. The Census of 1850 reported sewing silk made to the value of $1,209,000; that of 1860, to the value of $3,600,000. In the Census of 1860,
(Report on Manufactures, p. xciv), it is said that the chief seat of the industry is Connecticut, “where sewing silk was first made by machinery upwards of twenty-five years ago.” An acquaintance whose memory goes back to ante-bellum days has told me of the highly-developed quasi-automatic machinery which he then saw in operation in the sewing silk mills.
Tariff Commission Report (Chamberlain) on the Silk Industry, there are many complaints of the extinction of the Coventry ribbon industry; see paragraphs 3239, 3392, 3511. “Previous to the French treaty there were about seventy rich manufacturers in the ribbon trade; now (1905) there are six very poor ones” (paragraph 3511). “Ribbons and silks are practically all foreign-made now” (paragraph 3471).
Tariff History, p. 269); one of the provisions in the McKinley tariff which is said to have been a return for heavy contributions by manufacturers to Republican campaign funds. A considerable industry developed in the United States, yet imports continued on a large scale. Rapid changes in fashion here introduce a peculiarly complicating factor. In Europe, the English have the lead in manufacturing plushes, the Germans and French in velvets. In both classes, and especially in velvets, the more expensive qualities tend to be imported into the United States. I have been told by well informed and apparently unbiased observers that the Americans made distinct improvements in the machinery for pile fabrics. What stage in the rivalry between domestic and foreign producers has been reached in this industry it is not easy to make out. Nor is it easy to find indications on the problem more particularly considered in the next following chapter,—the prospects of an eventual surpassing of the foreigners by the developing American industry.
|Value of Product