#Sec. 5.  The home-market argument.# The home-market argument seeks to show a more permanent need for a tariff.  At the same time it appeals to the farmers, whom it has been hard to reconcile to a policy which in America[2] has been peculiarly favorable to manufacturers.  The home-market argument extols the advantages of having near to the farms customers for agricultural products, and dwells on the greater steadiness of domestic trade.  War or political changes, it is said, may change the demand for products.  This is true, but no other changes have affected American agriculture so radically as the peaceful development of domestic transportation and the opening of the West.

The main economic claim made in the home-market argument is that the shipping of food to Europe and the importing of manufactures involve a great cost for double freights which could be saved by manufacturing at home.  The farmer is supposed to pay this cost.  The obvious defects in this view are:  first, there is nothing to show that the freight is not partly or entirely paid by the European, either the manufacturer or the food consumer; secondly, home trade “saves the freights” for the farmer only in case he can buy goods under a tariff with less of his own labor and products than under free trade.  The payment of freight charges is true economy when the goods can be bought at a distance on more favorable terms than near home.  The freight argument attempts to prove too much for it condemns every trade within the country, of goods produced a stone’s throw away from the consumer.

The home-market appeal is strongest when addressed not to all farmers, but to one class of farmers, those whose lands are situated nearer the manufacturing cities.  As city population grows, some land is converted from the extensive cultivation of corn and wheat to dairying, fruit-and market-gardening in the neighborhood of cities, and perhaps at length is used for factory sites or as city lots.  There is, thus, a partial validity in the argument as applied to a comparatively small number of farmers, who gain as landlords, not as tillers of the soil.  Even greater gains have sometimes been reaped by the owners of timber lands, ore mines, coal lands, and other natural resources, the values of which have been raised by tariff legislation.  But unless these gains come from truly productive additions due to the tariff, there is no benefit to the community as a whole.

#Sec. 6.  The “two-profits” argument.# Somewhat related to this idea of the saving of two freights is the “two-profits” argument.  It is said that the tariff keeps “two profits” at home, foreign trade gives but one.  The word “profits” is here used in the popular sense of gain from a single transaction.  Both parties are said to profit and both profits are thought to be secured at home when two citizens are forced to trade with each other.  The view that there are “two profits” in a trade is an advance