Finally, there is the nationalist argument for protection. To be strong and independent a country ought to have an all-around economic development. Its people ought not to devote their entire energies to agriculture alone. All branches of economic life ought to be fostered together. A country should aim to provide, so far as possible, for all its own needs; it should not be dependent on other countries for its food supply, its manufactured goods, or its shipping. It is difficult for a country to reach this condition of affairs in any case, and even a near approach to it can only be achieved by the artificial nurture of the weaker economic activities, which is what the protective tariff endeavors to supply.
The case against protection:
The Argument for Free Trade.—Although the foregoing arguments for protection have carried great weight in the United States during the past fifty years there are many Americans who believe that trade with foreign countries ought to be free from all tariff duties, or, at any rate, free from all duties except such as may be needed to provide a revenue. |1. It creates artificial economic conditions.| Those who believe in “free trade”, or in a “tariff for revenue only” make the point that every country ought to devote itself to those industries which it can carry on most advantageously and should not try to produce for itself the things which can more cheaply be imported from other countries. Protection, they claim, merely diverts capital and labor into industries for which a country is not naturally adapted, and thus makes production expensive. |2. It keeps prices up.| It keeps wages up by keeping prices up, and thus deprives the workman of the advantage which high wages are supposed to bring. |3. It fosters industrial monopolies.| The policy of protection is also criticised on the ground that it fosters the creation of great industrial combinations, leads to the establishment of monopolies, and encourages corruption in politics by giving particular industries a financial interest in governmental action. The free traders believe that there is no more reason for protective duties upon trade between different nations than there is for similar duties upon trade among the several states of the Union.
Why foreign trade is important.
The Encouragement of Foreign Commerce.—The work of the national government is not confined to the regulation and restriction of commerce; it is concerned with the encouragement and promotion of trade as well. This promotion of foreign trade is an important branch of the government’s work because the prosperity of the United States depends to a considerable extent upon its commerce with other countries. America produces a large surplus of grain, meat, cotton, and other merchandise which must be marketed abroad. On the other hand there are many commodities, such as sugar, tea, coffee, rubber, and silk which cannot be produced in sufficient quantities here and hence must be imported. The aim of the government is to help our exporters find the best foreign markets for their goods and to facilitate the acquisition of such foreign products as the country requires. This help is rendered in various ways, by making commercial treaties with foreign countries, by maintaining a consular service, by giving encouragement to American shipping, and by the creation of a Department of Commerce in the national administration.[[166]]
Commercial Treaties.—From time to time the United States has established, by treaty, commercial relations with other countries. These treaties are made for the mutual advantage of both parties. They usually provide that citizens of each country may carry on trade with one another subject to the established tariffs, and that there shall be no governmental discrimination against such trade.[[167]] They allow each country to maintain consuls in the territory of the other. On a few occasions the United States has concluded reciprocity treaties providing for reciprocal free trade, in whole or in part, with other countries. An arrangement of this sort was made with Canada in 1854 but was brought to an end twelve years later.
The Consular Service.—Commerce with foreign countries is assisted and facilitated by the consular service. The United States maintains consuls in all important foreign countries and these countries, in turn, send their consuls here. There are several classes of officials in the consular service; the more important are consuls-general, consuls, and consular agents. Consuls-general are stationed at the larger foreign ports and exercise a general supervision over consuls in their respective districts. Consuls and consular agents are maintained in less important foreign centers of trade. |How consuls are appointed.| All members of the American consular service are appointed by the President, but since 1906 the selections have been made by competitive examinations for the lower grades and by promotion for the higher.
Their duties.
Members of the consular service gather information concerning trade opportunities and send this information to Washington where it is printed and distributed to American merchants and manufacturers. Consuls verify the invoices of goods shipped to the United States so as to avoid delay at the custom house. They assist American citizens who may be traveling abroad, particularly those who go abroad to buy merchandise. In a word they are the sentinels of American foreign commerce.
Until 1906 the American consular service was not highly efficient because the appointment of consuls was usually made on political grounds. Men who had rendered service in party politics were often given important consular positions although possessed of no real qualifications for the work which they were expected to do. Moreover, whenever a change of administration took place in Washington many consuls were removed from office and new ones appointed. This injured the service by preventing the development of experienced officials. Since 1906 the situation has greatly improved because appointments and promotions have been made upon a basis of merit alone.