GREED FOR TARIFFS MAKES WORLD BURDEN

...Such an investigation was finally ordered by the Senate, has been in progress for more than a year, and will doubtless be reported upon by the Senate Committee early in the coming session of Congress...

...These statutory provisions, permitting increases and decreases in the tariff rates by the President, ¦with the aid of the Tariff Commission, are generally known as the "flexible tariff...

...Similarly the tariff tends to be ineffective where world prices determine the American price and the United States is an exporter of particular articles...

...If our Government in the face of the increasingly complex and technical problems confronting it,' can not work out some system of expert impartial Federal control and administration, there is little reason to hope that the courts of the United States, which also deal with vast property concerns, can permanently continue to be the bulwark of the property interests—not to mention the Constitutional liberties—of this country...

...THREE YEARS AGO at the Convention of the National League of Women Voters, at Buffalo, I ventured to urge the importance of close scrutiny of our tariff problems by all citizens, whether there problems be viewed in the liglft of efficiency in government and the high cost of living, or with reference to the economic causes which often underlie and produce modern wars...

...and was attorney for the defendants in murder trials growing out of the strike, securing in the last case tried, acquittals before a jury of all the defendants in 191fi...

...For example, in 1910, during the discussion of the tariffs, based on differences in costs of production at home and abroad, President Taft made the following public, and presumably orthodox, statement with respect to tariffs which exceed suchcost differences: "The truth is," President Taft said, "that under the old protective idea the only purpose was to make the tariff high enough to protect the home industry...

...It is, of course, not appropriate to attempt to forecast the findings of that Committee...

...Proposed Duties on Hides, Ecots, Shoes IT MAY further be noted that, while there is no present tariff on boots or shoes manufactured in the United States, because America leads the world in cheap production of such articles, and js on an export basis, or on hides from which such boots and shoes are wholly or in part manufactured, the Tariff Commission in 1919 was called upon to estimate the increased cost to consumers which would follow the imposition of a duty of approximately 2 cents a pound on green hides, with the consequent necessary duty to be placed on boots and shoes to compensate manufacturers of those commodities for increased prices on raw materials which they must pay by reason of such a tariff duty if levied by Congress...

...Taking the number of shoes manufactured at that time in the United States, the Tariff Commission estimated that the proposed duty of 2 cents a pound on green hides would result in an increase of 25 cents a pair for shoes made chiefly of cow hide, and 15 cents a pair on shoes made in chief value of leather other than cow hide, and that the total increased annual cost growing out of the 2 cent duty to consumers of shoes in the Untied States would be $59 047,612...

...or (3) the reorganization of the Commission, with new powers...

...On the basis of those reports, the President was empowered within limits to raise or lower the tariff rates which Congress, after long consideration of competitive conditions, enacted in the tariff law of 1922...

...has increased tariff rates, in some instances to a starting extent, on some sixteen relatively important items, and has taken no action in some ten other eases, a number of which are of far-reaching commercial significance...

...In most countries those who impose protective duties usually aim to raise prices to such a moderate extent that domestic consumers will not too vehemently protest against resulting high prices...

...While the Commission has been under fire...

...The startlifig contrast between the way in which the tariff is increasing living costs and industrial profits and the failure of the tariff to promote equal agricultural prosperity has also attracted the attention of the whole country...

...The seriousness of the accusations concerning the abuse of an important governmental agency by private business interests and high officials of the Governmnet has thrown a heavy burden of responsibility for legislative recommendations on the Senate Committee...

...In the case of raw wool the same effect of the tariff on domestic prices is customary...

...The grave issues involved in the Tariff Commission's experiment, and the report to be maoe on that experiment by the Senate Investigating Committee are, therefore, of deep concern to every citizen of the United States...

...In 1!>22...

...He has fought steadfastly to preserve its judicial character and to make it serve its scientific mission...

...Shortly thereafter with great unanimity public opinion, led by the most independent, powerful business interests of this country, undertook to create in the Tariff Commission an impartial governmental agency, which could be depended upon to serve any and all parties equally and to aid in putting into effect, with-6ut fear or favor, any tariff policy which Congress in response to the popular will might en-net...

...Apart from such understandable exceptions, including instances where, owing to disturbed market conditions, tariff duties are for a time only partially effective, it may be affirmed that in the long run tariffs tend to produce the following results: (1) where goods are imported from abroad, revenues accrue to the Government...

...For these and other reasons, it is not difficult to believe that noteworthy changes in American industrial and commercial policies will not be indefinitely postponed...

...As a result of those thirty reports, in which the Commission has at times been seriously divided over the facts found, and the principles to be applied under the law, the President has lowered the duties on four relatively insignificant items in the tariff law...

...Republican leaders in Congress, who had purposely put tariff duties high because of the well-known choatic commercial conditions which followed the World War, predicted that the flexible tariff provision would be chiefly uBed by the Tariff Commission and the President to lower, rather than increase, tariff rates...

...In the five years in which the law has been in effect, the Tariff Commission has made some thirty reports to the President, following extensive investigations of production costs in the United States and abroad...

...Discussion of the subject may, however, be prefaced with the confident statement that the unplumbed wealth of our natural resources, and the organizing talents and general business ability in the United States are so abundant that we need not fear that probable changes, if reasonably inaugurated, will lessen American prosperity...

...In a recent publication on "The Tariff on Wool," by the Institute of Economics in Washington, approximately the same conclusion is reached with respect to the 31 cent rate fixed in the- present law, though it is pointed out that certain clothing manufacturers insist that, compared with free wool, the present tariff increases the consumer'3 clothing bill from $4.00 on such summer suit to $7.50 on each heavy winter overcoat...

...For five years, acting as a purely investigational agency, the Tariff Commission performed its duties faithfully, acceptably, and harmoniously...

...This estimate would, of course, be increased with any increased consumption of shoes in this country...

...If our experiment with a scientific determination of tariff rates is to be converted into sharp practices, by an important agency of the government, our people cannot long hope for credit and a good name, either at home or abroad...

...Proceeding on these lines, a Tariff Commission, for the most part of extraordinarily able membership, with Dr...

...National Tariffs SUCH indications of the far-reaching consequences to consumers of relatively minor tariff duties long ago led to the reasonable demand that tariff duties should be levied for national as distinguished from any merely private-profit point of view...

...Cases of this sort exist where tariff duties are imposed on articles not imported into the United States...

...An Uncontrolled Commission Important THE issue of a scientific versus a,eontrolled Tariff Commission is of significance for every citizen of this country...

...The Flexible Tariff WHEN THE flexible section became law, there was little difference of opinion in Washington as to the manner in which it would operate...

...History Of Tariff Commission AMONG THESE was the almost universal demand some fifteen .years ago that the age old controversial tariff question be taken out of politics through the creation of a nonpartisan, essentially judicial, Tariff ^Commis-sion...

...the Tariff Commission informally reported to Congress that the approximate increase due to a duty of S3 cents a pound in the cost of men's suits of clothes and overcoats, after making a moderate allowance for wlrat is termed the "pyramiding" of costs through the returns exacted by manufacturers and middlemen, would vary from about $2.03 for a summer suit to $5.70 on each heavy winter overcoat...

...Inefficient government is fundamentally wasteful and it is unnecessary to state that war represents the most cosily of all the reckless and destructive adventures of mankind...

...If in a given case the protective tariff tax does not in fact so result, it is to be remembered that the tariff law, to that extent, for whatever reason, has failed in its industrial purpose...

...Taussig, America's leading authority on the subject, at its head was organized in the spring of 1917...

...The evil of excessive tariff rates, however, showed itself in the temptation of manufacturers to combine and suppress competition, and then to maintain the prices so as to take advantage of the excess of the tariff rate over the difference between the cost of production abroad and here...

...Tariff on Sugar and Raw Wool SUGAR and wool may be cited as illustrations...

...It is no longer doubted by thinking men and women that jockeying with tariff policies may and often does result in deplorable governmental extravagance...

...and (3) where a substantial part of domestic consumption is in the form of imported goods, not only are the prices of'the imported goods increased but usually also the prices of the competing domestic articles...

...In other words, the failure of governmental administration in one direction—any breach, in fact, in the national wall of law enforcement—endangers all governmental administration...

...Instances, of course, occur where increased prices do not follow the imposition of tariff duties...

...and should be, so far as practicable, impartially determined so that, in the competitive field, no more so-called "protection" should be given to an industry than the theory of Congress as to the controlling standard in tariff legislation justified...

...This referred to the fact that President Coolidge's interference with the work of the Commission was ondeTmining its usefulness...

...2) the prices of imported articles ara increased by the duty...

...It is, however, reasonable to expect-one of tho following recommendations: (1) The abolition of the Commission...

...Raw wool used to manufacture medium and high-priced clothes pays a duty under the present law of 31 cents a pound of clean content, and the additional cost to manufacturers of woolen cloth due to the duty is approximately 45 cents a pound...

...In each of those cases the Tariff Commission has found itself called upon to indicate the...

...Business statesmanship and popular common sense should combine to avert such consequences...

...A discussion by this foremost authority of the vital aspects of the tariff is an unusual feature which our readers will appreciate...

...It may also occur that domestic competition will occasionallv reduce prices mare than the tariff increases thorn, although such a result is increasingly less likely in a country where price-fixing has become as generally practiced as it is in the United States at the present time...

...The Issue of Honest Government THE ISSUE raised over the Tariff Commission promises to project itself unmistakably into the presidential campaign of 1928, unless agreement is speedily reached and put into effect by Congress safeguarding an independent and essentially judicial Tariff Commission...

...Not since the classic Hayne-andWebster days in our national Senate, and then on a much less striking scale, has the tariff been so dramatized as since 1922 under the present tariff law...

...In 1922, however, with the enactment of the Fordney-McCumber tariff law, the powers of the Commission were greatly enlarged, and it was authorized to make reports to the President on the tariff duties found necessary to equalize production costs in the United^States and in the principal foreign competing countries...

...Tariff Dramatized by Farm Distress THERE is another reason why the tariff is at this time of peculiarly absorbing interest...

...The intimate relation between the American Revolution and the Navigation I.aws of Great Britain is now generally accepted by modern historians, and there can be little'question that the rivalry for markets, rather than the appropriation of land or other expressions of imperialistic ambition, have laid the vast burdens of the World War on the backs of the consumers and taxpayers of many nations...

...Editor's Note...

...The present-day animosity in Europe to the United States—at this hour emphasized by oar tariff correspondence and controversy with France—forcibly illustrates this dangerous tendency...

...In a public address made a year ago, Mr...

...Senate Investigation of Commission THESE DEVELOPMENTS in tariff commission history followed material changes in the membership of the Commission, and in part coincided with extraordinary pressure, brought from time to time by public officials and private business interests on the Tariff Commission, to make its findings less independent, scientific, and judicial, than those who created the Tariff Commission designed it to be...

...It is equally true that war is at times the more or less skillfully camouflaged outcome of international hostility kindled by discriminatory tariffs and other incidental commercial policies...

...It is difficult to exaggerate the significance of the issues under a government which continually stresses the importance of law and order...

...Judge Costigan has been the outstanding figure of the investigation...

...By EDWARD P. COSTIGAN (Member of United States Tariff Commission) Edward P, Costigan, writer of the very able and timely article which follows, has a national reputation as an eminent lawyer, economist and publicist Judge Costigan, who is a Virginian by birth, after graduating from Harvard, began the practice of his profession in Denver, Colorado, in 1900...

...If the people of the United Sates, during a period in which this country has become the creditor nation of the world, have failed to convince debtor nations of this country's sympathetic wisdom and generous understanding of the after-war problems of stricken foreign countries, it should be evident that America is preparing the way for an unhappy harvest...

...The estimate of the Tariff Commission at that time, based on the number of million pairs of boots and shoes then being sold in the United States, was that a duty of 2 cents per pound on green hides would require a compensatory duty of 12 cents a pair of shoes, because it takes about 6 pounds of hide to produce one pair of shoes...

...that the grave charges which led to that investigation have been fully substantiated in the sworn statements of the witnesses who appeared before the committee...

...In consequence, an irresistible demand was made two years ago by leading American economists that the work of the Tariff Commission be investigated by Congress...

...It is closely related to permanence in our commercial policies, confidence of the people in their government, business prosperity, and our reputation in foreign countries for good faith and fair dealing...

...In the international field, the present acute controversy over tariff policies between this country and France should serve as a reminder of the signal importance of a consistent, friendly, and scientific spirit in tariff legislation...

...In 1924 in the sugar investigation the Tariff Commission made clear that the American price of sugar per pound was the world price plus the tariff collected on sugar imported from Cuba, this country's principal competitor...

...Costigan said, "A Congressional investigation of the Tariff Commission under the flexible provisions would appear to be an indispensable forerunner of any legislative correction of the present little understood and regrettable situation...

...The excess of the tariff over the differences in the cost of production here and abroad was not regarded as objectionable, because it was supposed that competition between those who enjoyed high protection would keep the price for the consumer down to what'was reasonable for the manufacturer...

...The Tariff and Prices VIEWING the tariff primarily as a factor in living costs, it is to be borne in mind that, whatever the ultimate governmental object may be, the immediate purpose of so-called "protective" tariff duties, as distinguished from those which are puraly for revenue, is to raise prices so that domestic producers may secure a larger financial return for the products of their respective industries...

...For many years he has championed the cause of progress and reform in state and nation...

...His broad comprehension of the subject, both as to principles and practical operation, his power of succinct statement, his unquestioned integrity and judicial attitude, have made his testimony of great significance...

...The Commission further reported in that year, while recommending a reduction in the duty of approximately 1/2 cent per pound under the flexible tariff provisions of the present law, that the American price of all consumed sugar was the Cuban price plus the tariff, and the result of such a reduction of 1/2 cent per pound in the effective duty of about 13/4 cent per pound, on the basis of curernt consumption, would have been diminished revenues collected at our ports to the extent of about $75,000,000 a year—$35,000,000 of which accrued to the Treasury of the United States, and the other $40,000,000, some three and one-third million dollars per month, would have been directly saved by consumers...

...Wbon the United States Tariff Commission was organized in 1917 as an "impartial and non-partisan agency," Judge Costi-gan became a member of the Commission by appointment of President Wilson...

...There are many indications that the after-war relations between America and Europe, due in part to the reversal of creditor and debtor relations between the United States and foreign countries, and the deplorable plight of American farmers, are destined to usher in an era of substantially modified tariff policies...

...He was attorney for tbe United Mine Workers of America at the time of the Congressional investigation of the Colorado coal strike in 1914...

...Similar differences in computations might easily be multiplied, for the result largely depends upon certain assumptions made in any estimate with respect to the precise charges which will be exacted in the movement of the wool through successive stages from its raw to its final manufactured form...

...The subject of living costs is sufficiently broad to cover each specified relation...

...2) the repeal of the flexible tariff provisions, enacted in 1922 as part of the general tariff law of that year...

...Yet the definite purpose of such taxation is to raise prices for the benefit of, and as an indirect subsidy to, domestic producers...

...extent to which the tariff has affected or is likely to affect prices...

...This is often true of machine-made articles, turned out by mass production, in the unit cheapness of which this country leads the world...

...Events were destined to prove the contrary...

...Around this conception of accurately adjusted tariffs many fateful consequences have gathered...

...I do not hesitate to state mv own view...

...It is usually the case, except for certain specialties, with respect to the great agricultural staples, for example, cotton, wheat, and corn...

...The distinctions thus drawn were unnecessary...

...The Commission was created for the purpose of taking the tariff out of politics...

...Much discontent has arisen from time to time in the United States over the extension to industries of so-called "concealed protection," as a result of which industries are not only enabled to meet severe competition from abroad, but also to charge domestic prices which greatly increase the profits realized by private business...