Can it be doubted that there is a distinct connection between these Tariff wars and the huge armaments which are now maintained by every European state? The connection is, in fact, very close. Tariff wars engender the belief that wars carried on by shot and shell may not improbably follow. They thus encourage, and even necessitate, the costly preparations for war which weigh so heavily, not only on the industries, but also on the moral and intellectual progress of the world.
Mr. Oliver, in his interesting biography of Alexander Hamilton, gives a very remarkable instance of the menace to peace arising, even amongst a wholly homogeneous community, from the creation of hostile tariffs. The first step which the thirteen States of America took after they had acquired their independence was "to indulge themselves in the costly luxury of an internecine tariff war.... Pennsylvania attacked Delaware. Connecticut was oppressed by Rhode Island and New York.... It was a dangerous game, ruinous in itself, and, behind the Custom-House officers, men were beginning to furbish up the locks of their muskets.... At one time war between Vermont, New Hampshire, and New York seemed all but inevitable."
To sum up all I have to say on this subject--I do not for a moment suppose that Universal Free Trade--even if the adoption of such a policy were conceivable--would inaugurate an era of universal and permanent peace. Whatever fiscal policy be adopted by the great commercial nations of the world, it is wholly illusory to suppose that the risk of war can be altogether avoided in the future, any more than has been the case in the past. But I am equally certain that, whereas exclusive trade tends to exacerbate international relations, Free Trade, by mutually enlisting a number of influential material interests in the cause of peace, tends to ameliorate those relations and thus, _pro tanto_, to diminish the probability of war. No nation has, of course, the least right to dictate the fiscal policy of its neighbours, neither has it any legitimate cause to complain when its neighbours exercise their unquestionable right to make whatever fiscal arrangements they consider conducive to their own interests. But the real and ostensible causes of war are not always identical. When once irritation begins to rankle, and rival interests clash to an excessive degree, the guns are apt to go off by themselves, and an adroit diplomacy may confidently be trusted to discover some plausible pretext for their explosion.