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the　home　country　is　capable。　They　guarantee　a　reward　to　the　man　of



enterprise　and　to　the　workman　for　acquiring　new　knowledge　and



skill；　and　offer　to　the　inland　and　foreign　capitalist　means　for



investing　his　capital　for　a　definite　and　certain　time　in　a



specially　remunerative　manner。







Chapter　26







Customs　Duties　as　a　Chief　Means　of　Establishing　and　Protecting　the



internal　Manufacturing　Power







　　　　It　is　not　part　of　our　plan　to　treat　of　those　means　of　promoting



internal　industry　whose　efficacy　and　applicability　are　nowhere



called　in　question。　To　these　belong　e。g。　educational　establishments



（especially　technical　schools）；　industrial　exhibitions；　offers　of



prizes；　transport　improvements；　patent　laws；　&c。；　in　short；　all



those　laws　and　institutions　by　means　of　which　industry　is



furthered；　and　internal　and　external　commerce　facilitated　and



regulated。　We　have　here　merely　to　speak　of　the　institution　of



customs　duties　as　a　means　for　the　development　of　industry。



　　　　According　to　our　system；　prohibitions　of；　or　duties　on；　exports



can　only　be　thought　of　as　exceptional　things；　the　imports　of



natural　products　must　everywhere　be　subject　to　revenue　duties　only；



and　never　to　duties　intended　to　protect　native　agricultural



production。　In　manufacturing　states；　articles　of　luxury　from　warm



climates　are　chiefly　subject　to　duties　for　revenue；　but　not　the



common　necessaries　of　life；　as　e。g。　corn　or　fat　cattle；　but　the



countries　of　warmer　climate　or　countries　of　smaller　population　or



limited　territory；　or　countries　not　yet　sufficiently　populous；　or



such　as　are　still　far　behind　in　civilisation　and　in　their　social



and　political　institutions；　are　those　which　should　only　impose　mere



revenue　duties　on　manufactured　goods。



　　　　Revenue　duties　of　every　kind；　however；　should　everywhere　be　so



moderate　as　not　essentially　to　restrict　importation　and



consumption；　because；　otherwise；　not　only　would　the　internal



productive　power　be　weakened；　but　the　object　of　raising　revenue　be



defeated。



　　　　Measures　of　protection　are　justifiable　only　for　the　purpose　of



furthering　and　protecting　the　internal　manufacturing　power；　and



only　in　the　case　of　nations　which　through　an　extensive　and　compact



territory；　large　population；　possession　of　natural　resources；　far



advanced　agriculture；　a　high　degree　of　civilisation　and　political



development；　are　qualified　to　maintain　an　equal　rank　with　the



principal　agricultural　manufacturing　commercial　nations；　with　the



greatest　naval　and　military　powers。



　　　　Protection　can　be　afforded；　either　by　the　prohibition　of



certain　manufactured　articles；　or　by　rates　of　duty　which　amount



wholly；　or　at　least　partly；　to　prohibition；　or　by　moderate　import



duties。　None　of　these　kinds　of　protection　are　invariably　beneficial



or　invariably　objectionable；　and　it　depends　on　the　special



circumstances　of　the　nation　and　on　the　condition　of　its　industry



which　of　these　is　the　right　one　to　be　applied　to　it。



　　　　War　exercises　a　great　influence　on　the　selection　of　the　precise



system　of　protection；　inasmuch　as　it　effects　a　compulsory



prohibitive　system。　In　time　of　war；　exchange　between　the



belligerent　parties　ceases；　and　every　nation　must　endeavour；



without　regard　to　its　economical　conditions；　to　be　sufficient　to



itself。　Hence；　on　the　one　hand；　in　the　less　advanced　manufacturing



nations　commercial　industry；　on　the　other　hand；　in　the　most



advanced　manufacturing　nation　agricultural　production；　becomes



stimulated　in　an　extraordinary　manner；　indeed　to　such　a　degree　that



it　appears　advisable　to　the　less　advanced　manufacturing　nation



（especially　if　war　has　continued　for　several　years）　to　allow　the



exclusion　which　war　has　occasioned　of　those　manufactured　articles



in　which　it　cannot　yet　freely　compete　with　the　most　advanced



manufacturing　nation；　to　continue　for　some　time　during　peace。



　　　　France　and　Germany　were　in　this　condition　after　the　general



peace。　If　in　1815　France　had　allowed　English　competition；　as



Germany；　Russia；　and　North　America　did；　she　would　also　have



experienced　the　same　fate；　the　greatest　part　of　her　manufactories



which　had　sprung　up　during　the　war　would　have　come　to　grief；　the



progress　which　has　since　been　made　in　all　branches　of　manufacture；



in　improving　the　internal　means　of　transport；　in　foreign　commerce；



in　steam　river　and　sea　navigation；　in　the　increase　in　the　value　of



land　（which；　by　the　way；　has　doubled　in　value　during　this　time　in



France）；　in　the　augmentation　of　population　and　of　the　State's



revenues；　could　not　have　been　hoped　for。　The　manufactories　of



France　at　that　time　were　still　in　their　childhood；　the　country



possessed　but　few　canals；　the　mines　had　been　but　little　worked；



political　convulsions　and　wars　had　not　yet　permitted　considerable



capital　to　accumulate；　sufficient　technical　cultivation　to　exist；



a　sufficient　number　of　really　qualified　workmen　or　an　industrial



and　enterprising　spirit　to　have　been　called　into　existence；　the



mind　of　the　nation　was　still　turned　more　towards　war　than　towards



the　arts　of　peace；　the　small　capital　which　a　state　of　war　permitted



to　accumulate；　still　flowed　principally　into　agriculture；　which　had



declined　very　much　indeed。　Then；　for　the　first　time；　could　France



perceive　what　progress　England　had　made　during　the　war；　then；　for



the　first　time；　was　it　possible　for　France　to　import　from　England



machinery；　artificers；　workmen；　capital；　and　the　spirit　of



enterprise；　then；　to　secure　the　home　market　exclusively　for　the



benefit　of　home　industry；　demanded　the　exertion　of　her　best　powers；



and　the　utilisation　of　all　her　natural　resources。　The　effects　of



this　protective　policy　are　very　evident；　nothing　but　blind



cosmopolitanism　can　ignore　them；　or　maintain　that　France　would



have；　under　a　policy　of　free　competition　with　other　nations；　made



greater　progress。　Does　not　the　experience　of　Germany；　the　United



States　of　America；　and　Russia；　conclusively　prove　the　contrary？



　　　　If　we　maintain　that　the　prohibitive　system　has　been　useful　to



France　since　1815；　we　do　not　by　that　contention　wish　to　defend



either　her　mistakes　or　her　excess　of　protection；　nor　the　utility　or



necessity　of　her　continued　maintenance　of　that　excessive　protective



policy。　It　was　an　error　for　France　to　restrict　the　importation　of



raw　materials　and　agricultural　products　（pig…iron；　coal；　wool；



corn；　cattle）　by　import　duties；　it　would　be　a　further　error　if



France；　after　her　manufacturing　power　has　become　sufficiently



strong　and　established；　were　not　willing　to　revert　gradually　to　a



moderate　system　of　protection；　and　by　permitting　a　limited　amount



of　competition　incite　her　manufacturers　to　emulation。



　　　　In　regard　to　protective　duties　it　is　especially　important　to



discriminate　between　the　case　of　a　nation　which　contemplates



passing　from　a　policy　of　free　competition　to　one　of　protection；　and



that　of　a　nation　which　proposes　to　exchange　a　policy　of　prohibition



for　one　of　moderate　protection；　in　the　former　case　the　duties



imposed　at　first　must　be　low；　and　be　gradually　increased；　in　the



latter　they　must　be　high　at　first　and　be　gradually　diminished。



　　　　A　nation　which　has　been　formerly　insufficiently　protected　by



customs　duties；　but　which　feels　itself　called　upon　to　make　greater



progress　in　manufactures；　must　first　of　all　endeavour　to　develop



those　manufactures　which　produce　articles　of　general　consumption。



In　the　first　place　the　total　value　of　such　industrial　products　is



incomparably　greater　than　the　total　value　of　the　much　more



expensive　fabrics　of　luxury。　The　former　class　of　manufactures；



therefore；　brings　into　motion　large　masses　of　natural；　mental；　and



personal　productive　powers；　and　gives　　by　the　fact　that　it



requires　large　capital　　inducements　for　considerable　saving　of



capital；　and　for　bringing　over　to　its　aid　foreign　capital　and



powers　of　all　kinds。　The　development　of　these　branches　of



manufacture　thus　tends　powerfully　to　promote　the　increase　of



population；　the　prosperity　of　home　agriculture；　and　also　especially



the　increase　of　the　trade　with　foreign　countries；　inasmuch　as　less



cultivated　countries　chiefly　require　manufactured　goods　of　common



use；　and　the　countries　of　temperate　climates　are　principally



enabled　by　the　production　of　these　articles　to　carry　on　direct



interchange　with　the　countries　of　tropical　climates。　A　country　e。g。



which　trade　has　to　import　cotton　yarns　and　cotton　goods　cannot



carry　on　direct　with　Egypt；　Louisiana；　or　Brazil；　because　it　canno