[A3-8-7] Severe crisis in the woolen industries of America in 1874 ff., spite of an enormously high protective tariff. The financial utility of a protective tariff can be scarcely great, because the intention of the tariff to permit as little as possible to be imported, and of the tax to levy as much as possible, are irreconcilable.
[A3-8-8] Frederick II., in 1766, forbade the importation of 490 different commodities which, up to that time, had only paid high duties. (Mirabeau, Monarchie, Pr., II, 168.) In 1835, France still had 58 import and 25 export prohibitions.
They might, by way of exception, become necessary, in case a foreign state should desire to make our protective duties illusory by export premiums. But the exportation of Prussian cotton stuffs, for instance, has increased, with a moderate tariff, much more than the Austrian, with full prohibition. The English silk manufactures were, so long as the prohibition continued, inferior to the French, even in respect to the machinery system. (McCulloch, Statist., I, 681.)
[A3-8-9] In the case of circulating capital this is generally done rapidly. The machines would have worn out, and care is taken not to renew them. Buildings also can, for the most part, serve other purposes. The most difficult thing of all is for the masses of men, gathered together at the principal seats of industry, artificially created, to distribute themselves. Between the two rules: "No leap, but gradual transition," and "cut the dog's tail off at once, not piecemeal," the right mean is struck in the abolition of a prohibitive protection, when, what it is intended to do, is announced long in advance without maintaining vain hopes, and a long space of time is left to enable people to make their arrangements accordingly. This plan was followed in a model manner in reference to the English silk prohibition, under Huskisson. It was announced as early as 1824 that protective duties of 30 per cent. would on the 5th of July, 1826, take the place of the prohibition. The duty on raw silk was immediately reduced from 4 sh. to 3d. per pound, and after a time, even to 1d., which so increased the demand that the number of spindles rapidly increased from 780,000 to 1,180,000. During the 10 years from 1824, the importation of raw and twisted silk amounted to about 1,941,000 pounds, and in the 10 years after, to 4,164,000 pounds. The English exports of silk wares had before 1824 a value of £350,000 to £380,000; in 1830, of over £521,000; in 1854, of almost £1,700,000; in 1863, of £3,147,000. Compare Porter, Progress, I, 255 ff. On the other hand, Austria was over-hasty when it went over from the prohibition of foreign silk stuffs to duties of 180 florins per cwt. (Oest. Weltausstellungsbericht von 1867, IV, 140.)
SECTION IX.
WHAT INDUSTRIES ONLY SHOULD BE FAVORED.
That as a rule only such industries should be favored which, by reason of the natural capacities of the country and of the people, have a good prospect of being able soon to dispense with the favors accorded, would be self-evident were it not for the fact that it has been ignored a thousand times in practice.[A3-9-1] It is especially necessary to take the natural station (Standort)[A3-9-2] as well as the natural succession of the different branches of industry into consideration. Half manufactured articles of foreign raw material should not be protected until the entire manufactured article has completely outgrown protection; which condition manifests itself most clearly by a strong, independent exportation of the article.[A3-9-3] The celebrated tariff controversy between the cotton spinners and the weavers in the Zollverein was probably without any conscious plan, but certainly to the well-being of German industry, settled essentially in accordance with these principles. In such struggles of the different stages of a branch of production with one another, it is necessary not only mechanically to weigh the number of workmen, the amount of capital, etc., on both sides, but also organically the capacity for development and the influence of both sides on the entire national life.[A3-9-4] Half-manufactured articles of a very superior quality should not be kept away, since by promoting commodities of the first quality they have an educational influence on the whole industry. Thus, in the case of the duties on iron, it should not be forgotten, that they enhance the price of all instruments of industry.[A3-9-5] Just as objectionable are protective duties for machines or for intellectual elements of training.[A3-9-6]
[A3-9-1] Torrens calls an industry which can, in the long run, bear no competition: "A parasitical formation, wanting the vital energies while permitted to remain, and yet requiring for its removal a painful operation." (Budget, p. 49.) Especially frequent in the case of luxury—industries in which the court was interested. The oysters which were sent for to Venice under Leopold I., in order to stock the artificial beds in the garden of the president of the Exchequer reached Vienna, dead. (Mailath, Gesch., IV, 384.) As to how Elizabeth, and Catharine II. in Russia, desired to compel the cultivation of silk, and caused the peasantry to be levied like recruits for that purpose; as to how the latter petitioned against it in a thousand ways, and endeavored to destroy the silk worms, mulberry trees, etc., see Pallas, Reise durch das südliche Russland, I, 154 ff. Frederick II.'s silk-protection is characterized mainly by the order for church-inspectors to keep tables (Tabellen) concerning it, and to look after clergymen's and teachers' knowledge of the cultivation of silk. Tragico-comic endeavors of the Shah Nasreddin to establish manufactories in Persia: Pollak, Persien, II, 138 ff. One of the principal effects of the Mexican protective system, since 1827, was the establishing of manufactories on the coast only to cover up smuggling. (Wappäus, Mexiko, 83 ff.)
[A3-9-2] When Holland stunted its bleach-yards by high duties on linen, an industry in which it must always remain behind many other nations, was favored at the expense of another for which it possesses incomparable advantages.
[A3-9-3] Even before Colbert's time, French jewelry was prepared from Italian gold wire, and exported in great quantities. The mere rumor that it was contemplated to impose heavy duties on gold wire, provoked plans for the removal of the industry from Geneva to Avignon. (Farbonnais, F. de Fr., I, 275.) When France protects its raw silk, it makes the purchase of raw material in Italy cheaper to all its competitors.