ll 2 per cent; in the two years from 1904 to
1906 the average rates on dutiable fell 4 per cent, and on all goods
fell 2 per cent.]

[Footnote 11: This "competitive principle" is essentially the same as
the so-called "true principle" of equalizing the cost of production
(see above, sec. 11). It is essentially a prohibitive, not a free
trade, principle. Strictly applied it would cause complete exclusion
of imports. But as applied to selected articles which it is desired
to exclude in order to "protect" the domestic producer, this principle
would simply prevent the rate being placed appreciably higher than
was needed to exclude them. Anything beyond that point but offers
temptation and opportunity for the formation of a monopoly by domestic
producers. Then, too, the rate may intentionally be fixed so as to
make just possible the survival of the most favorably located or most
efficiently operated establishments, while compelling the abandonment
of other establishments. See ch. 14, sec. 3.]

[Footnote 12: Such changes are logically related to the subject of
financial crises rather than to that of the tariff. See note at end of
the next section.]

[Footnote 13: See Vol. I, e.g., pp. 228, 431, 445ff, 466, 490, 506ff.]

[Footnote 14: #Tariff legislation and business depressions.# The
relation between new tariff legislation and the business conditions
following it has been the subject of much debate in political
campaigns. In the few cases where a relationship has been most often
asserted to exist, it is more probable that the tariff change was the
_result_ of business conditions preceding it, than that it was the
cause of the conditions following it. For usually a tariff has been
revised downward because a few years of prosperity with large imports
had so increased customs duties that the government has had surplus
revenues. Just when the tariff was reduced, the conditions were ripe
for a crisis. This happened in 1857 (already in 1856 there had been a
preliminary halt of business), again in 1872, and on a small scale in
1883. But the main reduction resulting from the compromise act of 1833
did not occur until after the crisis of 1837-39; the Walker act of
1846 was passed just as business was starting upward on a long wave
of prosperity; and the act of 1894 was passed a full year after the
severe crisis of 1893, when business had already entered upon a period
of depression. In none of these cases does it seem reasonable to