FREE TRADE AND PROTECTION 249

of this particular industry. Before giving more detailed
attention to these possibilities, we proceed to consider a
fourth method of giving support, at the expense of the
community at large, to particular industries, namely, by means
of taxes or bounties on import or export. We must first
examine some special features of these methods of protection.
It is especially to the device of import duties that the
title “ protection” is commonly applied, and the protection
referred to is protection against competition on equal terms
between imported and domestic products. If the foreign
producer must add, to his expenses of production, not only
the cost of transportation from the foreign place of production,
but also an import duty as the price of admission to the
domestic market, it is clear that the profit to be made out of
the sale of the goods will be less than if no duty existed, unless
the price can be raised. The reduction of profit must reduce,
and may destroy, the inducement to offer the foreign goods
on the protected market. An elevation of price insufficient
to fully offset the duty, and therefore insufficient to induce as
large a supply of the foreign goods as would be forthcoming
in the absence of a duty, may suffice to make the domestic
industry a profitable one.
The question of whether or not an import duty is
necessarily an influence tending to raise the price of the
taxed goods, is one which has been a good deal debated.
Consider the effect of imposing a new duty on some commodity.
 If it do not affect prices at all, the foreign producer
or the merchant must bear the whole burden, and have by
so much the less with which to meet expenses. This reduction
 would, in the great majority of cases, if not in all, lead
to a reduction in their production of the commodity, or to its
being pushed in any other markets where a less concession
will enable sales to be increased. It would be an exceptional
case where some extension of sales in other markets could
not be secured by reduction of price, and a reduction of
smaller amount than the duty under consideration would, so
far as it went, permit the maintenance of the output without
so great a loss as the amount of the full duty on the whole
of what ordinarily went to the protected market under