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 Cotton Manufacture, continued. Contrasts with Other Countries; the Influence of the Tariff
Part IV, Chapter XVIII
The consequence of the inventions and improvements described in the preceding chapter was that the cotton goods to which they were applicable came to be produced not only as cheaply in the United States as in Europe, but even more cheaply. The improved devices made their way slowly or not at all in the rival countries; they were adopted promptly and with full effect in this country. It has already been noted that there had not been, even before the war, any inferiority in cost for the American cotton manufacturers, as regards the simplest and cheapest grades of goods. This position of independence was strengthened by the subsequent improvements, and was extended to goods of higher price and quality. The change was greatest in the weaving process. It was here that the comparative advantage of the manufacture as a whole was most securely established; and the special superiority in weaving served to offset any lack of advantage in other processes.
On the general situation, the Report of the Tariff Board, made in 1912, gave invaluable evidence. So far as concerns spinning, it is true, the evidence was not entirely conclusive. The figures secured by the Board indicated that “labor cost,”
i.e., money expense for labor per unit of output, was slightly greater in the United States than in England. The English labor cost on yarns was found to be lower than American cost, but not much lower, 78 to 95 per cent of the American.
*76 In other words, the effectiveness of labor in the United States, especially on the lower counts of yarn, was found to be greater, but not quite so great as to offset the difference in money wages. Taken by themselves, the figures would indicate that the comparative advantage of the American cotton spinning industry almost measured up to the country’s general standard, yet not quite. The data for the two countries, however, were not comparable without qualification. The English figures were for mule spun yarn, the American for ring spun yarn; and though they were for the same counts (fineness) of yarn, they were not necessarily for the same qualities. A comparison made by an unofficial inquirer seemed to show that, for ring spun yarn in the United States compared with ring spun yarn in Europe, the difference in labor cost was virtually
nil,—the effectiveness of American labor was so much greater as quite to offset the difference in money wages.
For weaving, however, and for the manufacturing processes as a whole, the Tariff Board’s conclusions were unimpeachable. The effectiveness of American industry in weaving was so much greater than that in Europe as not only to offset entirely the difference in weavers’ wages, but to leave a margin of superiority which sufficed to offset also various minor items in which there was no marked comparative advantage. The superiority in weaving was due largely to the wide use of the automatic loom; but not solely to this. “In the case of plain looms the English weaver seldom tends more than four looms, while in this country a weaver rarely tends less than six, and more frequently eight, or even twelve, if equipped with ‘warp-stop motions.’… Whereas the output per spinner per hour in England is probably as great or greater than in this country,
*78 the output per weaver per hour is, upon a large class of plain goods, less, and in the case where automatic looms are used in this country and plain looms in England, very much less.” Taking cost of production as a whole, “on many plain fabrics the cost of production [
i.e., the money cost] is not greater than in England”; and the American prices of plain goods were in no case much above the English prices, while in the majority of cases they were lower.
Taken as a whole, the result plainly is that, so far as concerns the plain goods and goods of medium quality which constitute the bulk of the output of the American mills, they have a comparative advantage. They pay higher wages than in England, but the effectiveness of the industry as a whole is such that they can yet turn out these goods at as low a price, if not at a lower price. To use the phrase applied elsewhere to this situation, they measure up to the general American standard of effectiveness. In this case, as in others, it must be borne in mind that the effectiveness of the industry depends not mainly, perhaps not at all, on the skill and vigor of the individual workers; not even on those personal qualities in combination with the tools and machines on which the operatives are put to work; it depends on the whole industrial outfit, in which ability for general organization is the greatest factor. As the Tariff Board stated, with reference to weaving, it is a matter not of individual superiority on the part of the American weaver, but of difference in industrial policy.
It goes without saying that goods of the classes to which these inventions and improvements have been applied were quite unaffected by the high duties maintained until 1913. They would not have been imported even in the absence of duties. So far from being imported, they have been exported steadily in considerable volume,—sure proof of established independence. The exports of cotton goods began before the civil war, and were even then no negligible item in the total product.
*81 The war, with the consequent complete overturn of the industry through a decade or more, put an end to the exports for the time being, and it was not until 1880 that they rose to the volume of the earlier period. They increased rapidly in later years, and in the first decade of the twentieth century ranged from fifty to sixty millions (of dollars). Both unprinted goods and printed figure among the exports. A considerable market is found in the Orient, especially for unbleached heavy fabrics in northern China. The exports show an uneven course, sometimes swelling abruptly and then shrinking as abruptly. They present some curious problems, much debated by those to whom the export trade seems peculiarly precious. For the purposes of the present discussion it suffices to note that the cotton manufacture in its largest branch reached the stage not only of superiority at home, but of aggressiveness abroad.
Still another indication of strength and superiority is found in the conditions of supply for the machinery used. As has been elsewhere stated
*83 the source of the machinery is a significant clue to the position of an industry as a whole. If the machinery is not only made within the country, but made on native models and with native improvements; still more, if it has reached that stage of excellence that it is sought for export abroad,—then we have strong evidence of superiority. Precisely this sort of evidence is found for the cotton manufacture. In both of the dominant departments of the manufacture, spinning and weaving, American machinery, as it has been improved for the manufacture of the cheap and medium goods, has come to be exported. The “Rabbeth” spindle, the most widely used of the American ring spindles, was early sent abroad.
*84 The automatic loom has been sent abroad on a considerable scale, and a foreign market for it systematically cultivated. What is not less significant, it has been copied by foreign makers of machinery, especially in Germany; a form of tribute which naturally is irritating to the American pioneers, but is not the less conclusive evidence of their originality and leadership.
The automatic loom, however, has not come into large use either in England or on the Continent. Various causes have prevented its wide adoption; causes partly technical in the strict sense, partly related to the general industrial environment. Among the technical obstacles is the circumstance that in England, still the most important competitor, the automatic loom does not work to full advantage for goods heavily “sized,”
i.e., much weighted with starch. This heavy weighting, common for the cheap English fabrics made for export to the Orient, has often been condemned as a kind of dishonest adulteration; it seems to be in fact an adaptation of the goods to the preferences and purses of the customers.
*86 But it does bring difficulties in the way of using the mechanism of the automatic loom, and thus impedes the spread of that improvement. Among obstacles from the environment, in all European countries, is the absence of that concentration of work on large orders which characterizes American business and gives scope to the special industrial talents of the Americans. The European manufacturer, in England and even more on the Continent, accepts willingly and habitually small or moderate orders, and prefers a system and an equipment which makes it easy to shift from one order to another and different one. The American aims to turn out large quantities of a single product, reducing to a minimum the readjustments of the labor force, and bringing to a maximum the efficiency of all labor-saving devices. The automatic loom fits into the prevailing American practices; it does not fit into the prevailing European practices.
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.
The endeavors of the American makers of automatic looms and of other machinery to develop an export business and to secure the adoption of their devices in foreign countries, have led to gloomy forebodings. Similar alarm has been expressed under the analogous conditions in the machine tool trade.
*90 What will happen, it is asked, when the foreigners are equipped with our very best machinery, and can still secure operatives at much lower wages to work that very machinery? Will not the American manufacturer, compelled to pay wages at the higher rates of this country, be inevitably forced out of the field? The theoretic aspects of this question have already been considered in the introductory chapters of the present volume.
*91 The history of the automatic loom, its rapid adoption in the United States, its slow progress in England and on the Continent, its prompt ultilization to full capacity here, its halting utilization in the rival countries, the restless and unflagging march of improvement in the originating people,—these circumstances all tend to confirm what was there said. The comparative advantage now possessed in the United States does not seem in danger of being lost at any period about which its people need have present concern. What will happen in the more distant future, it would be rash to predict. The time may come when all the advanced civilized countries will have the same equipment in their major manufacturing industries, and the same organization; the same enterprise, ingenuity, skill, among both the leaders of business, and the rank and file. Then their social and industrial conditions will be equalized, wages will be on the same plane throughout, and trade between them will be restricted to a much narrower volume than now. But that time, if it ever is to come, is at all events long distant. Such differences as the present case illustrates seem likely to persist for a long time; as long a time as a country need wisely consider in shaping its commercial policy. American enterprise and ingenuity will continue to find opportunities in which these qualities tell to the utmost, a comparative advantage will persist in the congenial industries, the international division of labor will be affected by the same forces that have operated in the past and operate in the present.
One further phase of the American development of machinery has been illustrated in the cotton manufacture as well as in the silk manufacture.
*92 I refer to the utilization,—one should hesitate to use the condemnatory term exploitation,—of a great stratum of cheap labor. Not only has the influx of immigrant labor been turned to account in the north, but in the south the supply of cheap native labor. The growth of the cotton manufacture in the south since 1880 has rested chiefly on the discovery of the possibility of using in the mills the ignorant rural whites, previously half-idle. Wages were low at the start and the quality of labor was low; both rose as time went on; yet in neither regard does the northern level seem to have been quite reached. Lamentable as have been some of the concomitants of this development,—long hours, child labor, low wages,—it stands for a stage in progress toward better things; as indeed is the case with the immigrants in the cotton mills of the north. At all events, alike in north and south, the cheap labor was turned to account in those branches of the industry in which machinery had been brought most completely to the automatic stage.
It would not be easy to say which was cause and which effect; whether the character of the labor supply caused the development of machinery adapted to it, or whether the development of the machinery led to the utilization of the labor supply. Probably there was an interaction. The attention of inventors and manufacturers was naturally turned toward adapting the machines to the labor available for this particular industry; at the same time the general industrial trend in the United States was toward automatic labor-saving devices. What would have been the course of invention in the cotton manufacture if the labor supply had been of a different and higher quality must be an open question. In other industries, such as the boot and shoe manufacture and the machine making trades, there has been no lack of advance in machinery adapted to operatives more intelligent and more alert. Given the conditions obtaining in the textile industries, the advances were most striking where profits could be made by utilizing the existing supplies of low-grade labor.
The development of the cotton manufacture, again, illustrates how greatly the effectiveness of industry is influenced by industrial leadership. Repeatedly one hears it stated that the efficiency of labor is no greater in American textile mills than in European; nay, it is said, the European manufacturer has operatives who are more skilful and better trained, not less so. And yet, in such branches of the textile manufacture as have been considered in the preceding pages, the effectiveness of labor as a whole is greater than in Europe. It is greater, not because the operatives are of better quality, but because they are put to work on more highly developed machinery, and are organized and guided better. The cause of superiority is to be found mainly in the inventors and mill managers. Where the machines and tools are the same in the United States as in Europe, there is not necessarily, perhaps not usually, an advantage. When some special sort of artisan’s work is required, there may even be a positive inferiority among the Americans. True, barring these cases of special handicraft skill, there is probably some degree of higher efficiency in the United States, due to the general industrial environment. The pace is faster throughout; exertion is more continuous and more strenuous. The American weaver tends more looms even of the ordinary type than the English; the American girl tends more ring spindles than the German. But this sort of efficiency is itself dependent on the management and the oversight of the leaders. It is dependent on the appropriate arrangement of tools and of plant, and it is almost always supplemented by labor-saving machinery. In common pick and shovel work, no one can see the American apparatus for sewer construction or rough railway work without observing the combination of labor-saving plant with management that drives the labor at full speed.
I need hardly repeat what I have already said on the larger social aspects of this problem. Driving at speed has its evil sides as well as its good. The just mean is not easy to strike between the pace that wears the laborer out at fifty and the slack and irritating gait of the work-making trade-unionist; nor is it easy to say which extreme most kills the intrinsic satisfaction from well-directed activity. The ideal doubtless would be alert and strenuous labor for so long a working day as can be steadily maintained without irrecoverable fatigue or a premature old age. A concomitant of the American practice should be a shortening of the working day, and with it the wise restriction of the labor of women and children. In no country is there more solid ground for welcoming the eight-hour system. Oddly enough, the shortened working day obtains much more in Great Britain, where the pace is slacker. These aspects of the question are not to be overlooked, even though they lie apart from the main subjects of the present inquiry.
Compare now the general situation for ordinary cottons, as described in the preceding pages, with that for the more expensive grades. We find a contrast, accentuated as the goods become finer. Imports of these did not cease during the period from 1883 to 1913, notwithstanding the successive increases of duty made in the tariff acts of 1883, 1890, 1897, and 1909. Foreign supplies of fine goods, though checked by the high duties, continued to come in. The domestic manufacturers insisted that they could not turn out these goods unless aided by high duties; and they urged the “acquisition” of the new industries through greater protection. The reduction of duties in the tariff act of 1913, accepted almost with indifference by the makers of the cheaper grades, was the cause of grave forebodings among those of the finer.
One aspect of the contrast between the different branches of the industry appears in the relation between imported and homemade machinery. In the note
*94 are given figures collected by the Tariff Board, not indeed for the whole cotton manufacture, but for a number of establishments large enough to indicate the general situation. So far as weaving goes, the situation is obviously one of independence; we have seen that it is even more,—one of superiority. Weaving affords a favorable field for American industrial talent. Not only as regards the new automatic looms, but as regards the older and more familiar power looms, the American has nothing to learn from the foreigner, and usually something to teach. All the ring spindles also are domestic built. The carding machinery is again predominantly domestic; and the same is the case with the “jack” spindles. On the other hand, much the larger part of the mule spindles are imported.
Let it be recalled that mule spindles are adapted for the finer counts of yarn, and are the only ones that can be used for the finest counts. The jack spindles, for which figures are given, serve also for fine yarns. That the mule spindles are chiefly foreign built,—which means, British built,—does not necessarily indicate an absolute inferiority in the effectiveness of American industry. It points to the lack of superiority, the lack of a comparative advantage. Using the same machines, and having operatives no more skilful or efficient,—nay, it is stoutly maintained, operatives less skilful,—the American spinners of fine yarns cannot pay higher wages than British competitors and hold their own without tariff support. So far as weaving goes, the makers of fine fabrics would seem at the least to be at no absolute disadvantage. It is true that automatic looms cannot be used for very fine goods; it is true also that even with ordinary looms the weaver cannot take care of so large a number as when coarse goods are made. I judge that, on the whole, there is some superiority in weaving fine goods, though by no means so marked a superiority as in coarse and medium goods.
*95 In spinning, however, if the statements of the manufacturers themselves are to be accepted, there is a distinct inferiority; and even if allowance is made for the habitual exaggerations of protected producers, there remains little indication of any comparative advantage. In the manufacture of the expensive cotton fabrics as a whole the characteristic industrial aptitudes of the Yankee find no favorable field.
It is not easy to give a single general reason why the English maintain their undoubted supremacy as manufacturers of the finest yarns, and on the whole of the finest woven fabrics also. Something was due at the outset to the damp and equable climate of Lancashire. This may still be a factor, though in modern times one of much lessened consequence, since ways have been found of humidifying the mills artificially at slight expense. Special skill among the operatives is often alleged. The class of factory workpeople in Lancashire is stable. Children succeed their parents in the mills; they do not often strive to rise in the industrial scale, as is commonly the case in the United States. Something like handicraft skill is said to be transmitted from generation to generation.
*96 It is probably true that, so far as the spinning staff goes, the American manufacturers are right in maintaining that they have operatives less efficient, not more so. Another factor is the extreme specialization of the cotton industry in Great Britain. Not only are weaving and spinning commonly separated,—to this, as already noted,
*97 the technical characteristics of mule spinning contribute,—but the spinning of the different counts, and the various finishing processes, such as bleaching, dyeing and printing, are carried on in independent establishments. With this more highly elaborated partition of labor between establishments goes a great specialization in fabrics. In the nature of the case, the finer goods cannot be produced in great quantities; no large supplies of any one pattern and grade are called for. An industry concentrated in a small district, split up into multitudes of differentiated establishments, with a trained and mobile labor supply, is adapted to such a product. The case is one (in Professor Marshall’s phrase) of marked external economies. Not improbably, it is also one of adaptation to national bent and talent. At all events, a superiority in the manufacture of the finer goods, and especially of the finer yarns, Great Britain does possess; as is shown not only by the exports to the United States in face of high duties, but by the continued exports to the Continent. To quote a phrase of Adam Smith’s, “whether the advantages which one country has over another be natural or acquired, is in this respect of no consequence. As long as the one country has those advantages, and the other wants them, it will always be more advantageous for the latter, rather to buy of the former than to make.”
*98 The acquired advantage has persisted long in England for this particular industry and bids fair to persist long in the future.
The usual explanation, among manufacturers and technical writers, of the exceptional position of the finer goods, is that the question is simply one of labor. More labor, we are told, is required for the finer goods; the wages bill forms a larger item in the expenses of production, the raw material a smaller one; hence the American producer is handicapped in special degree by the higher scale of wages in the United States. The business men who argue in this way have in mind, as such persons almost always do, the field with which alone they are conversant, and generalize at once from their own experiences. Only in the rarest of instances do they consider the problem as a whole. They do not reflect that in other industries, such as the manufacture of boots and shoes and of machine tools, raw material is no important item in the expenses, direct labor is a great item; yet here the Americans easily hold their own and even export. What remains true throughout is that high wages constitute no insuperable obstacle for the American producer if all the labor is effective,—that applied to the operation of machinery as well as that applied to its construction. It is not the mere use of machines that enables high wages to be paid and a product nevertheless turned out at low cost; it is the fact that the machines are well devised and well run. Wherever there is
no favorable opportunity for introducing labor-saving methods, high wages cannot be paid unless there be high prices for the goods; and with prices high, foreign competitors who pay low wages cannot be met on even terms. Tariff support is then needed.
Precisely in what industries the favorable opportunity exists cannot safely be predicted in advance. In the case of the silk manufacture an unexpected field was found, or at least seems to be in process of finding. In the case of the finer cottons,—and it will be seen that the case of finer woolens is similar,—no such favoring conditions have yet appeared. And the nature of these branches of industry seems to indicate that they are not likely to appear. A considerable standardization is essential for the successful application of machine methods. The mere fact that raw material is a large item in the expenses of production does not make possible such standardization; it may be feasible where raw material plays a large part, as with ordinary cottons, or where it plays a small part, as with machine tools or sewing machines. But a need of individual attention to each product or pattern, or of handicraft skill trained for the particular trade, constitutes an obstacle for the American employer. Under these conditions he works with no superior effectiveness. The obstacles seem to be found insuperably in the finer grades of all the textile fabrics; they explain the striking contrast between the manufacture of the cheap and medium grades of cotton goods and that of the finer grades.
One topic, referred to in the earlier part of this chapter, remains to be considered. The manufacture of all but the finest grades of cottons has had protection even to the point of prohibition. Is there any indication that this extreme of government support had deadened progress?
The tale told in the preceding pages gives an unequivocal answer: no. The cotton manufacture, so far from giving any evidence of a slackened pace, has shown striking advances. Whatever may have been the influence of protection, it has not been enfeebling. The case is clear beyond cavil as regards the staple goods which occupy the bulk of the industry. If in the manufacture of finer goods there has been imitation of foreign exemplars and appearance of backwardness, the explanation is to be found not in any lack of enterprise or vigor among the American producers, but in the fact that the field was unfavorable.
To generalize from this instance would be rash. A case of the opposite kind,—lack of progress under a rigid protective system,—seems to be discernible in some branches of the woolen manufacture;
*99 and beyond question still others could be adduced. But on the whole the evidence is that, in the United States at least, high protection has not been inconsistent with enterprise, invention, forging ahead. There is ground, on the contrary, for saying that it has in some degree contributed to such progress. What has been set forth in the preceding pages of the development of the iron and silk industries points that way. It would be going quite too far to say that the protective system has been the main cause of the advance in organization and in technical equipment which has appeared in so many American industries and in the cotton manufacture among them. The general sweep of the country’s industrial movement,—the vast resources waiting to be exploited by an enterprising people, the keen atmosphere of democracy, the free scope for every talent, the concentration on money making and wealth producing of the enormous influence of social emulation,—here are underlying forces much more powerful. But it is not to be denied that these forces have been directed by protection into some fields which they might not otherwise have touched, and in which they have operated with effects similar to those wrought in American industry at large.
On the other hand, it can hardly be maintained that anything in the nature of protection to young industries has been applied with good effect in the particular case here under consideration,—the cotton manufacture. What has been accomplished for the industry during its stage of trial was accomplished in the first third of the nineteenth century, when the industry was really young. Thereafter, so far as its staple branches were concerned, it grew and prospered without danger from foreign competitors or need of support against them. Even before the civil war, still more after it, whether duties were moderate or were extreme, the development of these branches was affected by the domestic surroundings alone. A field favorable for the talents of the Yankee, a great population ready to purchase staple goods by the million, a labor supply adapted for the utilization of quasi-automatic machines,—here we have the explanation of the progress made in the industry, with no discernible influence either favorable or unfavorable from the tariff system.
Another suggestion has been made: that the manufacture of cotton machinery, both for spinning and weaving, has been promoted by the duties not so much on the goods as on the machinery; with the effects of successful protection to a young industry.
*100 The case seems to me at least doubtful. The manufacture of textile machinery began in the United States as early as the textile industries themselves. Both in spinning and weaving, independent progress was made before the war brought in the régime of extremely high duties. The same general causes which stimulated the invention of labor-saving machinery in other industries brought about their consequences in this field also. The patent system may be adduced among the favoring factors with much more plausibility than the tariff system. The whole spirit of industrial leadership has been toward precisely the sort of mechanical progress which the textile inventions have illustrated. The inventors and business men who ascribe their successes to protection fail to give due credit to themselves.
The general conclusions to be derived from this inquiry on the cotton manufacture have been sufficiently indicated in the preceding pages. In its staple branches the industry possesses advantages; it measures up to the general American standard of effectiveness. It can pay wages higher than those in competitive industries abroad, and yet sell its products as cheaply. It needs no tariff support. But for the finer grades of goods, and for many specialties, the situation is different; here there has not yet been a comparative advantage, nor does there seem to be a prospect of competing with the foreigner on even terms in the future. The staple branches alone seem to offer good opportunities for the characteristic industrial qualities of the American inventor and business man. The course of development in the industry, both in its successes and its failures, serves as an illustration of the principle of comparative effectiveness.
Report, pp. 398
seq. A chart opposite page 416 shows the differences between “labor costs” and “total conversion costs.” The differences become progressively greater as the yarns become finer; they are least on the coarse yarns, greatest on the fine. The phenomenon is in harmony with the general trend in all these comparisons; it is in the finer and more tenuous qualities that the Americans show no special effectiveness. The comparison between mule spun yarns in England and ring spun yarns in the United States was explained by the Board on the ground that mule spinning was the prevalent method in the former country, ring spinning in the latter; but, as noted in the text, it introduces an element of doubt, making the results not absolutely comparable.
i.e., to the comparative advantage; the “labor cost” was virtually the same in all three countries.
in Transactions, American Cotton Manufacturers’ Association, no. 50 (1891), p. 41.
Quarterly Journal of Economics, vol. xxv, p. 747.
Handwörterbuch der Schweizerischen Volkswirtschaft, vol. iii, p. 895.
|PER CENT OF FOREIGN BUILT MACHINERY IN AMERICAN MILLS
Report of Tariff Board on Cotton Manufactures, p. 473. The figures are for “the mills from which such data were obtained”; by no means all of the American mills, but representative of the whole.
Jack spindles (also called “fine roving spindles”) are used where fine yarn is to be spun from sea island and other long fibre cotton; they make the roving (attenuated sliver) fine enough for spinning high counts of yarn. They are roving spindles, not spinning spindles.
(Report, p. 11), after explaining that with plain looms, whether ordinary or automatic, the output per weaver per hour is greater in the United States, remarks: “In the case of other methods of weaving, such as dobby, jacquard, box dobby, box jacquard, lappet, etc., the difference in output is by no means so great. In the case of dobby looms (without automatic attachment) on some classes of fabric, the American weaver will tend eight or more looms against four in England; but with the more complicated weaves the ratio seems to be nearer that of six to four, and in the case of certain fancy fabrics, where the number of looms tended is necessarily four or less, the output per weaver is about the same in both countries.”
Transactions New England Cotton Manufacturers’ Association, no. 50.