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52 so that an American employer says: "I am at a disadvantage compared with my foreign competitor, because he pays less wages than I" — then, by the same token, the American laborer will say: "I am at an advantage, compared with my foreign comrade, for I get better wages than he." If the law interferes with the state of things so that the employer is enabled to say: "I am now at less disadvantage in competition with my foreign rival, because I do not now have to pay as much more wages than he as formerly" — then, by the same token, the American laborer must say: "I am not now as much better off than my foreign comrade as formerly, for I do not now gain as much more than he as I did — there is not now as much advantage in emigrating to this country as formerly." Therefore, whenever the taxes just offset the difference in wages, they just take away from the American laborer all his superiority over the foreigner, and take away all reason for caring to come to this country. So much for the laborer. But the employer, if he has arrested immigration, has cut off one source of the supply of labor, tending to raise wages, and is at war with himself again (§ 47).

66. It has been said that two nations cannot trade if the rate of interest in the two differs by two per cent. The rate of interest in the Atlantic States and in the Mississippi Valley has always differed by two per cent, yet they have traded together under absolute free trade, and the Mississippi Valley has had to begin a wilderness and grow up to the highest standard of civilization in spite of that state of things.

67. It has been said that we ought to trade only with inferior nations. The United States does not trade with any other nation, save when it buys territory. A in the United States trades with B in some foreign country. If I want caoutchouc I want to trade with a savage in the forests of South America. If I want mahogany I want to