en in
large measure due to political motives. In every petty medieval state
or self-governing city, the aim was to make the economic boundaries
coincide as nearly as possible with the political boundaries. Except
for the trade in a few articles of comparative luxury this aim was
at that time nearly attainable. The peasantry surrounding a fortified
town and enjoying its protection were compelled to trade there. Down
to our own time it has seemed to statesmen expedient to forbid or
discourage trade that might nourish the economic power of future
enemies. Sometimes governments have used embargoes, bounties, or
tariffs as weapons to injure the trade of other nations and to secure
diplomatic or commercial concessions. Often they have sought by
tariffs to encourage the building of ships and the manufacture of
armaments and of all kinds of munitions by private enterprise within
their own borders, even when the immediate cost of these products was
greater than if they were purchased abroad. In such cases it is
always a question whether an outright expenditure would not be better,
whether the government could not build its own arsenals and shipyards
more economically than it can foster private enterprise by means of a
protective tariff. However, the political (or military) argument for
protection recognizes that it is in itself a costly (not a profitable)
policy, and that the cost is only justified on the grounds that
military necessity warrants the outlay.
The military argument as applied to the preparation of ships and
munitions has no application to a tariff on those articles which have
no bearing upon military power. But the most recent application of
science and the mechanical arts to the uses of war has given new
significance to a larger policy of industrial preparedness for
military purposes. The year 1914 doubtless ushered in for the world
a new epoch of protective and discriminatory tariff legislation
determined by political rather than by direct economic considerations.
Sec. 2. #Revenue and protective tariffs.# An important distinction in
principle is to be made between a tariff for revenue and a tariff
for protection. A _revenue tariff_ is a schedule of duties on goods
entering or leaving a country, so arranged that the collection of
taxes causes the least possible disturbance to domestic industry.
Speaking generally, the duties may be on either imports or exports;
but, as export duties are unconstitutional in the
|