The United States Tariff

There is little use attempting to persuade ourselves that the new United States tariff bill, which has recently come into effect, and which takes the place of the Emergency Tariff, will not have an injurious effect on the trade of this country. There is nothing to be gained by minimizing its effect on our commercial activities and on prices, but, at the same time, we should not be guilty of the mistake of magnifying the harm it will do us. It may be, as a good many people say, that the United States is the natural outlet for our surplus farm products, but the fact remains that for years past Great Britain has been the mainstay of our export trade, and will probably continue to be for many years to come. The agriculture of this country has been built up with the understanding that the Mother Country would consume the bulk of our surplus food products. This being the case, the new tariff - the Fordney-McCumber Tariff, as it is called - will affect us less than the pessimists would have us believe. In certain lines the tariff will hit us hard, but there is little question that tariff or no tariff this country agriculturally will make steady progress. We have had a sample of what this new tariff means through the operation of the Emergency Tariff, which came into effect in May 1921. We have been able to carry on fairly well with this tariff in force, and there is no doubt of our ability to make progress under the new law.

It is difficult to understand how the United States Government could put through such an iniquitous piece of legislation. The Harding Administration contains men of recognized ability, and it is hard to perceive how they could have allowed a measure of this kind to be forced on the people in the United States and those they do business with in Canada and other countries. The probable explanation is that right from the start, right from the time the last presidential election took place, the Republican party has been guided more by political expediency than by the dictates of wise statesmanship.

In order to capture the reins of government from the Democrats, the Republicans played up to the German-American and Irish-American vote, and catered as much as possible to the Anti-British sentiment in the United States. They refused to join the League of Nations or to take a hand in straightening out affairs in Europe. They had to make some sort of show, however, of trying to prevent future wars, and so called a Disarmament Conference, after which they took considerable credit to themselves for having induced Great Britain, Japan and other countries to scrap some of their big battleships. The truth of the matter, however, is that these battleships would have been scrapped in any case, because they were out-of-date and too costly to maintain. Next, seeing that their own country, the doctor politician, instead of telling the patient that the only cure for war sickness was hard work and lots of it, gave him dope in the form of the Emergency Tariff, and now have repeated the dose by passing the Fordney-McCumber tariff.

This measure is supposed to be of special benefit to farmers in the United States, but, according to Wallaces’ Farmer, if they are to get any advantage from it they must curtail production. Wallaces’ Farmer, in a recent issue, says that unless there is a wholesale cancellation of war debts Europe must send to the United States at least half a billion dollars’ worth more goods annually than it sends to Europe. It points out that last year the United States exported to Europe over two hundred million bushels of wheat, nearly one hundred million bushels of corn, and over one billion pounds of pork products, and then says:

“As long as the American farmer is selling his wheat, corn and hog products on a basis which returns him a wage with far less than the pre-war normal purchasing power, we see no reason for producing a surplus of food for export. It would seem that we should cut down our corn and wheat acreage, with the idea of producing in a normal year about six hundred million bushels of wheat and about two billion seven hundred million bushels of corn. We should produce perhaps five million fewer hogs than we are now producing annually. Under such a situation, we would have only small amounts for export, and the European competition for this small amount would perhaps be such as to set a price high enough to equal cost of production for the large quantities consumed at home by the American people. There would be no danger of importations from Argentina, Canada and other surplus food counties to destroy the market in the United States, because we now have a really effective protective tariff on farm products.”

Canadian farmers will not object to a policy of curtailment of production on the part of farmers in the United States. Indeed, they will welcome it. In this country we are in a position where for many years to come we will have a large surplus of farm products which must be marketed abroad, and if competition in the markets of Europe is lessened through decreased production in the United States, it will tend to make prices that much better for our products.

As is indicated by the article by James E. Poole on page three of this issue, there is a growing resentment among farmers in the United States against patent medicines of the tariff variety. The corn belt is the richest and most powerful section agriculturally in the United States, and farmers there are finding that tariff duties on cattle act as a boomerang and injure them quite as much as they injure cattle breeders in Canada.

Under the new tariff there is a duty of eight cents per pound on butter and five cents per pound on cheese, but the Research Department of the American Farm Bureau reports that these duties will have little effect on the prices farmers receive for their cream or milk. Moreover, there are big increases in duties on manufactured good. These range from thirty-four to fifty-four per cent. on cotton goods, from fifty-one to seventy-four per cent. on clothing, and from twenty to forty per cent. on hardware. When farmers across the line realize what this means to them, they won’t be so keen for protection as they seem to be now. Finally, when the increase in the cost of living forces consumers to realize that they and not the foreigner pay the duties levied by the new tariff, there is going to be a reckoning which will not be altogether to the liking of the politicians who are at present in power.

It is unfortunate, both for the United States itself and other countries, including ourselves, that the people generally do not see as clearly as Wallaces’ Farmer apparently sees that they cannot eat their cake and have it. The United States, Canada and the countries of Europe would get back to pre-war prosperity much more quickly if people in the United States were not so anxious to push the burden and the obligations they assumed when they entered the world war on the shoulders of the other nations. Wallaces’ Farmer is unquestionably right when it intimates that for the United States the only alternative to the cancellation of war debts, which was proposed some time ago by the British Government, is decreased production. We doubt very much, however, whether the people of the United States will be willing to accept this alternative, because both agriculture and the manufacturing industries have been built to carry on an extensive foreign trade, and if through the foreign policy of the United States Government and through the new tariff bill this alternative is forced on them, there is going to be considerable hardship until things get adjusted.

If the United States Government would play the game instead of playing politic, cancel the war debts and tear up its tariff absurdities, the people in the United States, as well as the people in other countries, would benefit, and the politicians of the Republican party two years from now will feel a great deal easier than they will otherwise.