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Sunday, November 6, 2011

IS THERE A MANUFACTURING CANIDATE?

Mitt Rommey-- kicked of his campagin at the very symbol of American manufacturing-- Greenfield Village
he is the first true manufacturing canidate since William McKinley

As President, he pushed for reciprocity arrangements through treaties in the 1897 Dingley tariff. Debated at the time, reciprocity gave protectionist America a perception of fairness. Many conservatives were concerned that McKinley’s reciprocity arrangements would lead to an erosion of protectionism, but McKinley believed it was necessary for the future. American surplus was becoming an issue, and McKinley wanted to allow for a boom in exports. In his last speech at Buffalo, McKinley defined his vision: “A system which provides a mutual exchange of commodities is manifestly essential to continued and healthful growth of our export trade. . . Reciprocity is the natural outgrowth of our wonderful industrial development under the domestic policy now firmly established . . . The expansion of our trade and commerce is a pressing problem. Commercial wars are unprofitable. A policy of good will and friendly trade relations will prevent reprisals. Reciprocity treaties are in harmony with the spirit of the times; measures of retaliation are not.”
Statistics for the 1890 to 1900 decade support the conclusion of McKinley’s success that prices came down, profits rose, capital investment went up, and wages held or slightly increased (real wages clearly rose). Average annual manufacturing income went from $425.00 a year and $1.44 a day in 1890 to $432.00 a year and $1.50 a day in 1900. The average day in manufacturing remained around 10 hours a day. Heavily protected industries such as steel fared slightly better with wages. The cost of living index fell during the decade from 91 to 84 or about 8 percent. The clothing cost of living dropped even more from 134 to 108 or 19 percent. Food stayed about the same but the cost of protected sugar dropped around 25 percent. The bottom line is that real wage (adjusted for cost of living) index rose from $1.58 a day to $1.77 a day in 1900 or about a 12 percent increase. Invention flowered during the period as companies invested in research and development to meet congressional oversight of profits. The success of this period of managed trade depended on government oversight, business cooperation, and labor support. The list of companies that built their foundation and expanded included Libbey Glass, United States Steel, Standard Oil, ALCOA, H. J. Heinz (there was a 40 percent tariff on pickles) and Bethlehem Steel to name a few.
http://www.amazon.com/William-McKinley-Apostle-Protectionism-Quentin/dp/0875865771/ref=sr_1_17?ie=UTF8&qid=1320587757&sr=8-17