e form of a direct tax,
raised by the State, and distributed as a premium to privileged
industry.
Let us admit that foreign iron could be sold in our market at $16, but
not lower; and American iron at not lower than $24.
In this hypothesis there are two ways in which the State can secure
the national market to the home producer.
The first, is to put upon foreign iron a duty of $10. This, it is
evident, would exclude it, because it could no longer be sold at less
than $26; $16 for the indemnifying price, $10 for the tax; and at this
price it must be driven from the market by American iron, which we
have supposed to cost $24. In this case the buyer, the consumer, will
have paid all the expenses of the protection given.
The second means would be to lay upon the public an Internal Revenue
tax of $10, and to give it as a premium to the iron manufacturer. The
effect would in either case be equally a protective measure. Foreign
iron would, according to both systems, be alike excluded; for our iron
manufacturer could sell at $14, what, with the $10 premium, would thus
bring him in $24. While the price of sale being $14, foreign iron
could not obtain a market at $16.
In these two systems the principle is the same; the effect is the
same. There is but this single difference; in the first case the
expense of protection is paid by a part, in the second by the whole
of the community. I frankly confess my preference for the second
system, which I regard as more just, more economical, and more legal.
More just, because, if society wishes to give bounties to some of its
members, the whole community ought to contribute; more economical,
because it would banish many difficulties, and save the expenses of
collection; more legal, because the public would see clearly into the
operation, and know what was required of it.
But if the protective system had taken this form, would it not have
been laughable enough to hear it said: "We pay heavy taxes for the
army, the navy, the judiciary, the public works, the debt, &c. These
amount to more than 200 millions. It would therefore be desirable that
the State should take another 200 millions to relieve the poor iron
manufacturers."
This, it must certainly be perceived, by an attentive investigation,
is the result of the Sophism in question. In vain, gentlemen, are all
your efforts; you cannot give money to one without taking it from
another. If you are absolutely determined to exhaust
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