There were woollen mills and operatives.  There were flouring mills and millers.  There were iron founders and their employes.  There were artisans of every description.  There were grocers and merchants, with every variety of goods and wares for sale; there were banks and bankers; there was all the diversification of industry that a thriving, industrious, and intelligent community required; not established by protection nor by government aid, but growing naturally out of the wants and necessities of the people.  Such a diversification is always healthful, because it is natural, and will continue so long as the people are industrious and thrifty.  The diversification which protection makes is forced and artificial.  Suppose protection had come to my native county to further diversify industries.  It would have begun by giving higher prices to some industry already established, or profits greater than the average rate to some new industry which it would have started.  This would have disturbed the natural order.  It would necessarily have embarrassed some interests to help the protected ones.  The loss in the most favorable view would have been equal to the gain, and besides trade would inevitably have been annoyed by the obstruction of its natural channels.

The worst feature of this kind of diversified industry is that the protected ones never willingly give up the government aid.  They scare at competition as a child at a ghost.  As soon as the markets seem against them, they rush to Congress for further help.  They are never content with the protection they have; they are always eager for more.  In this dependence upon the government bounty the persons protected learn to distrust themselves; and protection therefore inevitably destroys that manly, sturdy spirit of individuality and independence which should characterize the successful American business man.

Thirdly, it is said that protection gives increased employment to labor and enhances the wages of workingmen.  For a long time no position was more strenuously insisted upon by the advocates of the protective system than that the wages of labor would be increased under it.  At this point in the discussion I shall only undertake to show that it is impossible that protection should produce this result.  What determines the amount of wages paid?  Some maintain that it is the amount of the wage fund existing at the time that the labor is done.  Under this theory it is claimed that, at any given time, there is a certain amount of capital to be applied to the payment of wages, as certain and fixed as though its amount had been determined in advance.  Others maintain that the amount of wages is fixed by what the laborer makes, or, in other words, by the product of his work, and that, therefore, his wage is determined by the efficiency of his labor alone.  Both these views are partly true.  The wages of the laborer are undoubtedly determined by the efficiency of his work, but the aggregate amount paid for labor cannot exceed the amount properly chargeable to the wage fund without in a little time diminishing the profits of production and ultimately the quantity of labor employed.’