United States, our
tariff discussions are concerned only with import duties. The most
completely revenue-yielding tariff is one touching only articles
which, even at the higher prices are not in the least to be produced
profitably in the home country. A _protective tariff_ is a schedule of
import duties so arranged as to give appreciably higher prices to some
domestic enterprises than they could obtain with free trade. It shuts
out some foreign goods which would otherwise enter, an in so far it
"protects" the domestic producer from the foreign competitors who
would sell at lower prices than those at which he can or will sell.
In other words, "protection" means governmental interference with the
freedom of trade.

The distinction between revenue and protective tariffs, thus clear in
principle, is not always easy to make in practice. It does not lie in
the intention of the taxing power, but in the actual effects produced.
Most tariffs combine the characteristics both of revenue and of
protective measures. A tariff that reduces imports but does not
cut them off entirely may be called either a revenue tariff with
incidental protection or a protective tariff with incidental revenue.
The difference is one of degree. But notice particularly that the two
features of protection and of revenue are mutually exclusive. To the
extent that one is present the other is impossible. A tariff rate
that in whole or in part excludes the foreign article to that
extent affords "protection" but does not yield revenue. Whenever the
government collects a cent of tariff taxes, the domestic producer in
so far and as respects that unit of goods is unprotected. Likewise,
whenever any domestic producer enjoys "protection" in respect to any
unit of goods, importation is in so far prohibited and the government
is deprived of any revenue whatever derived from the production and
sale of that unit of goods.

Sec. 3. #Growth of a protective system.# The protective policy developed
at first accidentally, as it were, out of the practice of levying
taxes for revenue only. Tolls, dues (or duties), customs (that is, in
former times the customary dues paid by merchants, now the dues fixed
by law), tariffs (that is, schedules or lists of rates of duties) were
at first intended to raise revenues for the sovereign, the city, or
the state. The unintended, and to some degree inevitable, result of
the taxation of goods in commerce, whether imports or exports, is
t