prevent the reduction of profits through increasing competition, the
first thing done is to diminish the production, thus turning employes
out of employment. Wages are diminished or stopped until times are flush
again. With the time estimated in which the laborers are not at work,
the average rate of wages for the ten years preceding 1880 did not equal
the wages in similar industries for the ten years preceding 1860 under a
revenue tariff. Indeed, in many branches the wages have not been so high
as those received by the pauper labor, so-called, in Europe. But it is
manifest that the wages in these industries cannot for any long period
be higher than the average rate in the community, for, if the wages be
higher, labor will crowd into the employments thus favored until the
rate is brought down to the general level. So true is this, that it
is admitted by many protectionists that wages are not higher in the
protected industries than in others.

Thirdly, the effect of protection is disastrous to most of the protected
industries themselves. We have seen that many of them have in recent
years been compelled to diminish production. The cause of this is
manifest. Production confines them to the American market. The high
prices they are compelled to pay for protected materials which enter
into the manufacture of their products disable them from going into the
foreign market. The profits which they make under the first impulse of
protection invite others into the same business. As a result, therefore,
more goods are made than the American market can consume. Prices go down
to some extent through the competition, but rarely under the cost
of production, increased, as we have seen, by the enhanced price of
material required. The losses threatened by such competition are sought
to be averted by the diminution of production. Combinations of those
interested are formed to stop work or reduce it until the stock on hand
has been consumed. Production then begins again and continues until