a
point at which it is just as natural to make things for which we
formerly bartered wheat as it is to produce the grain itself. The
decline in the fertility of agricultural lands and the increase in the
productive power of labor devoted to making steel appear to have made
the manufacturer of the latter article as independent as is the raiser
of cereals. Originally it was necessary to protect iron and steel
industries from competition in order to secure the establishment of
them at an early day. Now it is apparently not necessary to continue
the protection. Labor in making steel will give us as many tons of it
in a year as the same labor would give us if spent in the raising of
wheat to be exchanged for foreign steel. The duty on steel, if this is
the case, has become inoperative, in the sense that it no longer acts
to save from destruction the steel-making industry. It is perniciously
operative in another direction, for it is an essential protector of a
quasi-monopoly in the industry; and this illustrates what often
happens in cases in which the infant industry argument proves to be
well grounded. The argument predicts for the newly established
industry a great future development and a time of ultimate
independence. Protection undertakes to nurse it through its period of
helplessness and dependence into a time when it can stand on its own
feet and maintain itself against rivals. If that period comes,--and
the history of the United States shows that in many cases it has
come,--you can throw off the entire duty, if you will, and, unless the
price of the article has been artificially sustained by something
besides the duty, our manufacturers will not lose possession of their
market.

An essential condition of realizing the happy predictions of the
protectionists is that competition among American producers should be
unimpeded. If that were so, goods would, as they said, be sold, in the
end, at prices fixed by the costs of production, including the normal
rate of interest on the capital employed. Manufacturers may originally
get large profits, as an offset for such risks as they take in doing
pioneer work; but afterward they will get interest on their capital
and a good personal return for directing their business, but nothing
more. If they sell goods at prices which yield only such returns as
this, they will, when the industry is on its feet, sell them as
cheaply as the foreigner would do. The high duty, if it still
co