either in order to sell silver for more than it is worth or in order to pay debts for less than the amount agreed. For example, in order that the silver bullion in the silver dollar of the present standard shall be equal in value to what it purports to be in the dollar, the market price of fine silver must be one dollar and twenty-nine cents per ounce. In other words, in order that the silver dollar may be worth as much after it is melted as it purports to be worth in the coin, the fine silver in it must sell at a fraction over one dollar and twenty-nine cents per ounce.

We will assume that on a given day after the enactment of the law under which the Secretary of the Treasury is to determine what the rate of the tax will be for a given period, the value of the silver bullion free from tax is eighty-nine cents per ounce. The difference between that and a valuation which keeps it at a parity with gold, to wit, one dollar and twenty-nine cents, is forty cents per ounce. Divide eighty-nine into forty, and we have the true ratio of the tax, namely, forty-five per cent.; 89 cents +45 per cent. $1.29 per ounce.

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We will assume that the coinage is free, and that any owner of a silver mine may bring bullion to be coined; we do not ask him what it may have cost him; he is offered free coinage into dollars with which he can pay his debts and his wages subject to the true rate of taxation. The bullion worth eighty-nine cents per ounce is subjected to a tax of forty-five per cent., which he pays; that is to say, forty-five per cent. of eighty-nine cents is forty cents; this tax forms a part of the cost of silver dollars, as all taxes are customarily added to the price. The addition of the tax carries the price or valuation of the bullion up to one dollar and twenty-nine cents per ounce. That is exactly

where it should be in order to maintain the parity of the silver dollar with the gold dollar.

No injustice is done to any one; the government gets a revenue, coinage is free, the unit of value is maintained, and if silver is to be exported, it is exported under a drawback, which will enable the owners to secure its full bullion value in all other markets without bringing disaster or disorder into the monetary system of his own country.

This suggestion may perhaps be rightly acted upon while the subject of the free coinage of silver is pending, even in the present Congress.

CHAPTER XXX.

THE ISSUE JOINED.

SINCE the last chapter upon Taxation and Work was written, the nominating convention of the Democratic party has been held.. The division upon the silver question is not a party division. The advocates of the free coinage of silver without the concurrent action of foreign nations are only a small faction in each party, and their day of temporary influence has gone from them. The purchase of silver bullion under present acts will doubtless be stopped in the second session of the present Congress by the repeal or amendment of what is known as the Sherman bill. This purchase of bullion is not sustained by Senator Sherman himself or by many of his associates on the Republican side, nor will it be sustained by the Democrats.

The main issue in the ensuing election is the tariff question. The logic of events has compelled the nominating convention of each party to take a position upon this question which it is not probable that any large number of the members of either party would have taken had a free choice been left to them.

The enactment of the McKinley Tariff bill committed the Republican party to the policy of "Protection with incidental revenue against the judgment of its bestinformed members. This act was framed under the direction of its sponsor, Mr. Wm. McKinley, Jr., consist

ently with his theory of the purpose of a tariff, which is to secure "Protection with incidental revenue." When the Republican party first subjected itself to the demands of the representatives of special branches of industry for the enactment of special schedules framed for the purpose of excluding foreign fabrics of the kinds made by themselves, by putting constantly increasing duties upon them without regard to revenue, the party placed itself under the necessity of continuing upon that line of policy to the end. It deprived itself of free choice, because to yield at any point would be to give up the fundamental idea upon which the McKinley act is based. The framers of the Republican platform had no choice in the matter, although this dogma of prohibition of imports for the benefit of certain classes is offensive to the largest and most intelligent portion of the members of the party. The declaration in the Republican platform is as follows: "We maintain that the prosperous condition of our country is largely due to the wise revenue legislation of the Republican Congress. We believe that all articles that cannot be produced in the United States, except luxuries, should be admitted free of duty, and that on all imports coming into competition with the products of American labor there should be levied duties equal to the difference between wages abroad and at home."

It will be observed that the question of revenue is wholly ignored in this declaration. Articles which in the judgment of Congress cannot be produced to advantage in this country, except luxuries, are to be admitted free of duty. Articles which in the judgment of Congress can be produced to advantage in this country are to be subjected to such high rates of duty as to stop the import. Articles like sugar, which could be produced in this country, but which Congress has chosen to make

free of duty, are to be made the subjects of a bounty at the cost of the tax-payers.

The enforcement of this policy would lead to the necessity of direct taxation or to the imposition of an income tax, in order to secure the necessary revenue which may not be derived from the excise taxes on liquors and tobacco.

I have shown that if the policy advocated in these terms were actually applied to the framing of a tariff measure, that measure would bring about a greater reduction in the rates of duties that are imposed now under the McKinley act than has yet been proposed by any Democrat, because, in point of fact, there is not a duty imposed under the McKinley act on any article of any considerable importance which is not very much greater than the difference between wages at home and abroad, even if the cost of labor corresponded to that difference in the rate of wages, which it does not. The very form of this resolution proves conclusively that the McKinley version of the protective policy is intellectually dead. No person of ordinary intelligence who possesses even a superficial knowledge of the facts governing the production of the goods which are imported in the crude or partly manufactured condition, or of the useful fabrics which constitute the larger part of the finished manufactures, would have ventured to frame a resolution which can be so completely turned against the intention of those who framed it. Nine-tenths or more of all the articles consumed in this country are made at less cost for labor than in any other country, whatever the rates of wages may be. A very large portion of the imports from other countries come from countries which possess advantages in other respects than the cost of labor; hence although their rates of wages may be lower and their labor cost