Page:Forgotten Man and Other Essays.djvu/111

Rh that the consumption of silk, when all was imported, was 100 yards and that the price was $1 per yard. Then the following points are taken for granted, although not stated in the case as it is put: (1) That the state needs $5 revenue; (2) that it has determined to get this out of the consumers of silk; (3) that the advance in price does not diminish the consumption; (4) that the tax forces a reduction of price for the silk in the whole outside market; (5) that the "silk" in question is the same thing after the tax is laid as before. Of these assumptions, 3, 4, and 5 are totally inadmissible, but, if they be admitted in the first instance, and if the doctrine of the case which is put be deduced, it is this: If the part imported multiplied by the tax is equal to the total consumption multiplied by the advance in price, the consumers can pay the latter in protection, for it is equal to the former, and the former, which is paid to the government by the foreigner, is what the consumers of silk must otherwise have paid.

144. Obviously this deduction is arithmetically incorrect, even on the hypothesis. In the first place, the government has not obtained $5 revenue which it needed, but $2.50 (5 cents on 50 yards). In the second place, the foreigner sells at $1.02½ (net 97½) the silk which he used to sell for $1. He therefore gets back from the consumers 2½ cents per yard on 50 yards, or $1.25 out of the $2.50 which he has paid to the government. Also, the domestic silk to compete must be equal to the dollar imported silk which now sells for $1.02½. Hence, the consumers really pay in protection only 2½ cents on 50 yards, i.e. $1.25. This case, then, is, that the foreigner pays $1.25 revenue, and the consumers pay $1.25 revenue and $1.25 protection. Hence the result is not at all what is asserted, and there is no such operation of the contrivance as was expected. But the government needs $2.50 more revenue, the operation of its tax having been interfered with by