BIBLIOGRAPHY. _The World's Work_ (March, 1912); _Harper's Weekly_ (June 1, 1912); _North American Review_ (June, 1912).
[Delivered before the Southern Society of New York City (December 16, 1911)]
The kaleidoscope of political issues must and will continually change with the changing conditions of our Republic but there is one question that was with us in the beginning and will be in the end, and that is the most effective, efficient and fairest way of equalizing the burdens of taxation that are levied by the National Government. Of all the great powers that were yielded to the Federal Government by the States when they adopted the Constitution of our country, the one indispensable to the administration of public affairs is the right to levy and collect taxes. Without the exercise of that power we could not maintain an army and navy; we could not establish the courts of the land; the government would fail to perform its function if the power to tax were taken away from it. The power to tax carries with it the power to destroy, and it is, therefore, a most dangerous governmental power as well as a most necessary one.
There is a very clear and marked distinction between the position of the two great political parties of America as to how power to tax should be exercised in the levying of revenue at the custom houses.
The Republican party has maintained the doctrine that taxes should not only be levied for the purpose of revenue, but also for the purpose of protecting the home manufacturer from foreign competition. Of necessity protection from competition carries with it a guarantee of profits. In the last Republican platform this position of the party was distinctly recognized when they declared that they were not only in favor of the protection of the difference in cost at home and abroad but also a reasonable profit to American industries.
The Democratic party favors the policy of raising its taxes at the custom house by a tariff that is levied for revenue only, which clearly excludes the idea of protecting the manufacturer's profits. In my opinion, the dividing line between the positions of the two great parties on this question is very clear and easily ascertained in theory. Where the tariff rates balance the difference in cost at home and abroad, including an allowance for the difference in freight rates, the tariff must be competitive, and from that point downward to the lowest tariff that can be levied it will continue to be competitive to a greater or less extent. Where competition is not interfered with by levying the tax above the highest competitive point, the profits of the manufacturer are not protected. On the other hand, when the duties levied at the custom house equalizes the difference in cost at home and abroad and in addition thereto they are high enough to allow the American manufacturer to make a profit before his competitor can enter the field, we have invaded the domain of the protection of profits. Some men assert that the protection of reasonable profits to the home manufacturer should be commended instead of being condemned, but in my judgment, the protection of any profit must of necessity have a tendency to destroy competition and create monopoly, whether the profit protected is reasonable or unreasonable.