fare. Justice and fairness should be the basis, for in the long run the welfare of the laborer and the welfare of society are inseparable.

The question of the tariff is said to be always with us. Shall the tariff be a protective one or one for revenue only?

A complete and logical tariff based on protection would, of course, produce no revenue, and the protection idea is not usually carried to such an extreme, except in the case of a few commodities. Most tariffs, therefore, are based on the idea of protection and the raising of revenue, or, frankly, are imposed for revenue only. The first of these ideas has ruled for the most part in the tariff history of the United States during the past sixty years, while the second one finds illustration in the tariff policy of Great Britain during the same period. The answers given as to tariff policy, however, may well vary according to economic conditions. A reasonable argument is that a tariff for the protection of infant industries is needed in a new industrial country or for the establishment of a new industry in an older one. The consumers in such a country pay a higher price for protected commodities, but finally, when the industry is firmly established, the tariff duty may be removed, and prices to consumers reduced.

But when does an infant industry reach the

point where it can stand alone? As well ask, When does a boy become a man, except when he is thrown on his own resources? Mr. Havermeyer, of sugar-trust fame, testified before the Industrial Commission that the tariff had been the occasion for the formation of most of the large combinations prior to 1900. It is an obvious truth that whenever a tariff wall is built, the control of prices is made easier and combination is invited.

Another argument in regard to a tariff is that the foreigner pays the tax; but just how he does it is not always made clear. Mr. Dooley on "The Tariff" gives a sufficient answer:

"Well," says Mr. Hennessy, "what difference does it make? Th' foreigner pays th' tax, anyhow.".

"He does," said Mr. Dooley, "if he ain't turned back at Ellis Island."

The social results of a highly protective tariff on the one hand and unrestricted immigration on the other are becoming apparent. Moreover, the tariff is an indirect tax, because the one who pays first, shifts it, likewise the second one in his turn, and so on, until it reaches the final consumer. The social result is that much of the tariff tax is paid by those having little to say in regard to its imposition.

Another result is that a tariff may yield con

siderable revenue and thus invite extravagance in appropriations; and also, unlike an income tax, the tariff tax is paid in driblets instead of in a fixed annual lump sum.

The development of American foreign commerce is bringing home to our citizens the fact that foreign trade, like domestic trade, is in essence an exchange of commodities, and that no country will permanently trade with another except on this basis. A three-cornered trade may, of course, arise. The United States before the recent war bought large amounts of coffee from Brazil but sold her only a few commodities. Was this trade settled for in money? No. The United States sent exports to England and Europe, especially food stuffs, while Brazil bought many commodities from England. Then by bills of exchange drawn on London, the debts and credits of the three countries would almost cancel one another without the exchange of specie to any great

amount.

The United States was formerly an exporter of agricultural products; today it is an exporter of manufactured goods. During the year ending June 30, 1923, the imports of agricultural products exceeded the exports for the first time, according to a report of the Department of Agriculture. While this may be due to special conditions, it is a fact

that exports of manufactured products have become larger relatively than agricultural products during the last forty years. The situation is now apparent and many American manufacturers realize that a high tariff is of little avail under present conditions.

Competition, we are told, is the life of trade; but cut-throat competition leads to combination and finally to monopoly and higher prices. Mr. Carnegie declared that a steel manufacturer was either a prince or a pauper, going from one extreme to the other. The United States Steel Corporation during the last twenty years has been an important factor in stabilizing prices. These questions arise: Should combination in trade be allowed? Are there good trusts and bad trusts? Should trusts be regulated or should they be abolished? The Supreme Court, in interpreting the Sherman Act (Federal Anti-trust Law) in the Standard Oil and Tobacco Company cases, ruled that unreasonable restraint of trade was unlawful. The fact of monopoly is, of course, of vital social interest.

In recent years, public utilities commissions have been established in various states to regulate industries affected with a public interest. Such industries as railroads, including both steam and electric roads, gas, electric lighting, telephone, and steam heating are included. But why not rely on

competition to bring about reasonable prices? The answer is that these industries are, in the nature of the business done, monopolies. A street railway or telephone company is granted a franchise to use the public streets, and certain other privileges are granted. But suppose for the sake of argument, a second company is allowed to do a telephone business. The rate is made say $25 a year by the new company; the old company continues its charge of $40 a year. Some patronize the new company, but many are compelled to use the services of both companies. A rate war ensues; rates are lowered; but finally the weaker company goes to the wall and the stronger one has the field to itself again. Rates, of course, are raised at once, but that is not the whole story. The capital invested in the new but now bankrupt company has been wasted and society is so much the poorer.

In 1883, the West Shore Railroad, paralleling the New York Central from New York to Buffalo, was completed, and immediately a rate war ensued. At the end of two years the West Shore was absorbed by the New York Central under a long term lease. The lamb and the lion lie down together, but the lamb is inside the lion.

An entirely different story appears under regulation. Recently a competing line from Albany to Buffalo was proposed, but permission to build such