The Evening Star MONDAY, JULY 31, 1922. AMERICAN WOOL TARIFF.

Evening Star, Issue 18034, 31 July 1922, Page 6

The Evening Star MONDAY, JULY 31, 1922. AMERICAN WOOL TARIFF.

The battle in the United States Senate over the duties on wool is evidently causing intense feeling in America, is arousing a good! deal of interest in Australia and Now Zealand, and should attract the attention of those interested in politics and economics everywhere. Americans are proud of their Constitution, and are prone to speak of their country under it as more free than any other in the world. In the opinion of quito a number of outside observers this boast is very far from the truth. Rather caustically they contend that the nominal rulers are not the real rulers, and that tho dictates of the dollar have usurped tho functions of the Constitution. It is the man with tho most money who directs the policy of tho nation. Where other countries are under monarchical rule, bureaucratic rule, aristocratic rule, or agrarian rule, America is under business trust rule, and it is the most soulless of all. Nearly all the big world monopolies have had their origin in America. Efforts have been made there to curtail their power, even to break them up. But they have their roots deep, and the tendency is for them to spread. The wool duties are a case in point. In monopoly building a tariff is often a convenient instrument, and very strong and unblushing efforts are being made, so far with success/ to make use of it in this commodity. In fiscal policy America is perhaps the most rabidly protectionist country in the world. In common with other countries she has had to go through tho post-armis-tice trade depression, with this difference : that ehe is now a great creditor nation, and they are debtor nations. Before the war America was a debtor nation, and for that reason the harmful effects of tho exclusion:; of' foreign. goods by' a . prohibitive tariff barrier -were limited. The amount of money that had to bo sent out of the country in interest was not swelled by big amounts for imported goods. But there is not now the same consideration to apply. American economists have repeatedly pointed out that the enactment of such an extrema protectionist measure as the Fordnoy-M’Oumber tariff would be a step backward in the establishment of normal industrial conditions, and that measures of this character can only produce results which, in the end, will prove uneconomic and unsound', and will not reach the fundamental cause of the present unfortunate plight in which the farmer in the States finds himself. Prices of farm products fell faster than those of other commodities, and this put him in a bad financial position, with unsold products on his hands into the bargain. From the latest reports of the Senate debate it appears that the American manufacturers generally desire to entrench themselves more strongly behind a protectionist bander against competition of the goods which other countries could send to America as tho only moans of liquidating or reduting their debts to her. To enlist the help of tho big farming community in increasing protection all round, they appear to have made a compact to work for higher duties on wool. Tho distressed fanner naturally takes the short-sighted view that higher duties on agricultural produce would help him, and ho walks into tho trap. K very small proportion of tire farmers are woolgrowers—less than 1 percent, of the population is in that industry. The majority will not benefit by higher duties on wool, while they will probably pay higher for every purchase they make, not only of clothing, but for any commodity, because of the use which manufacturers will make of the increased tariff.

Roughly speaking, America produces only half the wool she uses in her immense textile industry. She grows chiefly fine wool, and has to import practically all the coarse wools. These are moat plentiful an such countries as Australia and New Zealand, but it is precisely these on which the American tariff bears so cruahingly. This is because of the system of assessing the duty on the specific scoured content. Senator Walsh declared that a 33 cents per lb duty on this basis would cost the United States consumers 200,000,000 dollars a year, and it -is tho poor man chiefly who would pay this, for his clothing is made from tho more dur able and less expensive coarse wools. Experts in the wool trade estimate that under this system the duty on good New Zealand cross-bred wool amounts to 165 per cent, ad valorem, while on Australian merino it amounts only to 29 per cent. A section of Republican Senators lias broken away from party rule, and pressed hard for duties on the ad valorem principle. They are waging a losing fight, but they appear to have justice and common sense on then’ side. Their arguments may thus he summarised i “How can you justify a duty which runs up to Iff. per cent, on one of our basic raw materials because there is a loud cry for it from the woolgi'ower, who is not 1 per cent, of our population ? How can you justify a high tariff on the wool we do not grow and a much lower duty on the wool wo do grow? How can you justify a high tariff on the . poor man’s wool, and a relatively low duty on the rich man’s wool? ” America’s fiscal policy appears in every way to run contrary to the principles of common sense. The reasonable assumption is that selfish and unseen influences are at work to saorifioo the interests of the community for those pf the griTdeged

few. Among tho interest's affected are those of New Zealand, for any limitation of competition lor pur cross-bred wools must react unfavorably on the prices which rule for them.