THE PRESIDENTIAL ELECTION.

King Country Chronicle, Volume VI, Issue 500, 14 September 1912, Page 3

THE PRESIDENTIAL ELECTION.

EFFECT ON THE TARIFF.

PROSPECTS OF WOOL TRADE

(Dalgety'g Review.)

The President of tha United States is elected every four years the next presidential election being fixed for sth November, 1912, and cabled advices have already enabled us to realise the bitterness of the campaign on the present occasion. This year's election more directly concerns Australasia tnan any of recent timse, for the simple reason that the fight between the Republicans, or high tariff party, and the Democrats, as low tariff party, is bsing waged over Schedule K of the American tariff, the most important item of which concerns wool duties. The Republican Convention recently held disclosed a serious split in the Republican ranks, President Taft and ex-Pre-sident Roosevelt waging such bitter battle for the Republic nomination that there is talk of a compromise candidate. Unless the Republicans pull together there is every possibility of a Democratic victory. The Democratic Convention recently held in Baltimore ha 3 chosen as its candidate, after many votings, Governor Woodrow Wilson, of Mew Jersey. Tariff views as latley expressed by the leading candidates are given int he World's Work, May, 1912, as j follows:—

PRESIDENT TAFT.

"Mr Taft's latest utterance on the tariff was delivered at the Union League Cluo, Chicago, on March, 1912. 'We ought to have,' he said, 'some means of knowing from facts ascertained by impartial tribunals what we are doing when we are changing the tariff law. Nothing interferes so much w.ith business as changing the tariff upon, which all business rests, without knowing what the facts are.' This statement is in keeping with the veto messages of President Taft when he refused to approve the different tariff Bills sent to him during the special session of Congress of 1911. The President was an earnest advocate of a Tariff Commission, and although the Tariff Board was not all he wanted in that direction, he set it at work gathering facts and statistics on different tariff schedules and sent the results to Congress when completed, recommending that the tariff to be revised in accordance with the finding of the Tariff Board. President Taft has always declared for the princiole of protection, the rates- of duty to be measured by the difference in cost of production at home and abroad. He has often commended the present tariff law as the best that has ever been enacted, both as a revenue producer and a measure of protection, and though never asserting that it was perfect, has insinuated that it should not be amended without adequate information after impartial investigation."

THEODORE ROOSEVELT. "Mr Roosevelt liaß consistently advocated a Tariff Commission of experts in accordance with whose findings the tariff should be revised, schedule by schedule, each revision being determined with absolute jus-

tice on its own merits. Mr Taft is now sound on this principle, but he took no pains whatever, he made no effort whatever, to have it introduced into Congress while he had the power. Moreover, he does not show the slightest understanding of the point which Mr Roosevelta insists upon as fundamental, namely the point that the tairff shall be continued primarily in the interest of the wage worker and the farmer. Mr Roosevelt has recently written to the North-Western Agriculturist, stating, anent reciprocity with Canada, that, in any future agreement to revise the tariff in any way whatever, the revision must be made in such a way that the farmer does not bear the whole burden, that, on the contrary, he simply pays his fair share and gets fair share in return. In his speech at Sioux Palls, September 3rd, 1910, Mr Roosevelt said: 'lt should be the duty ot some Government Department or bureau to investigate the condition in the various protected industries and see that the labourers really are getting the benefit of the tariff supposed to be enacted in their interests, and if from any investigation of a certain industry it appear that the - tariff supposed to b« imposed for the 'benefit of the wage worker result in such shape that the benefit does not reach him, the tariff on that industry should be taken off."

WOODROW WILSON, In an address at Nashville on February 24th, 1912, Governor Wilson said: — "In field after field of our economic exchanges competition has ceased to determine prices. Monnopoly in one form or another has taken the place of competition, and now, without competition, these gentlemen who lie so snugly behind the high wall of protection, are determining arbitrarily what the price of everything from foodstuffs are to be." In an address before the National Democratic Club in New York on January 3rd, 1912, Governor Wilson said:—

'"All the lifeblood of the country is being drained from the farms into the factories. A great many of the morbid conditions of our society are due to this same excessive fostering of one °tage of national life at the expense of .the other and now we have stimulated it so much that we have not a largo enough market for the means of disposing of the surplus product. "We talk about American labourers competing with the pauper labour of Europe. Haven't you known a machine that cost £IOO to compete successfully with a machine that cost 50dol. that would do so much more and better work? "The most beautiful theory of all is the theory of the cost of production.

portion rate of duty on the difference in the cost of production between the foreign manufacturer and the domestic manufacturer. Which foreign manufacturer jind which domestic manufacturer? Where is your standard in the difference in cost of production?

"The theory of the Republican Party has been, if you make the great captains of industry rich, they will make the country rich. It is not so.

"Now what are wo going to do? I wish I might hope that our grandchildren could indulge in free trade, but I am afraid that even they cannot, because it is likely that for an indefinite period we shall have to pay our national bills by duties collected at the ports. Therefore we are to act upon the fundamental principal of the Democratic Party, not free trade, but tariff revenue, and we have got to approach that by such stages, and at such a pace as will be consistent with the stability and safety of the business of the country." THE PRESENT DUTIES.

The duties at present imposed upon wool imported into the United States are as follows:

Class 1. Fine wool, which embraces the bulk of the Australasian imported, in the grease 5Jd per lb, washed lid par lb, scoured 16Jd per lb.

Glass 2. —British breeds, mohair, etc., cold water washed and unwashed 6d per lb, scoured 18d per lb. Class 3. —Carpdt wools, very low class, as imported from Russia, China, and such countries, the duty is but lid to 2£d per lb, but this does not now interest Australasian growers. President Taft is credited with saving the wool and woollen industry by vetoing the Underwood-La Folette Compromise Bill, which was presented to him in August, 1911, by an Anti-. Protection majority of th 3 Senate. On August 14, 1911, the Bill, which was for a 29 per cent, duty on raw wool for clothing purposes and 49 per cent for clothes, dress good, etc., passed the House of Representatives by 206 votes, to 90, and. on the following day the Senate by 38 votes to 28. President Taft returned the Bill on August 17th, without his approval, and on the following day an effort in the House to pass the Bill over the veto, which required a two-thirds majority, failed, the voting being 227 to 129.

• THE TARIFF COMMISSION. President Taft appointed a Tariff Commission, and after careful and thorough investigation in various countries their findings in relation to Schedule K. are as foilow:— "The result of the raw woul investigation establishes the fauts that it costs more to grow wool in the United States than in any other country; that the merino wools required in such volume by our mills are the most expensive of ail wools produced that the highest cost of production of such wool in the world is- in., the State of Ohio and contiguous territory; and that the lowest averago cost on similar woo! is in Australia.

"That, after crediting the flock with receipts from all sources other than wool, the latter product, in the case of the finer wools of the United States, is going .to market with an average charge against it of not less than 6d per lb, not including interest on investment; that the fine wools of the Ohio region are sold bearing an average charge for production of 9£d per lb that if account is taken of the entire wool production of the United States, including both fine and coarse wools, the average charge against the clip is about 4gd per lb.

"That in New Zealand and on the favourably situated runs of Australia it seems clear that the present range of values for stock, the receipts from other sources than wool are carrying the total flock expense, so c that, taking Australasia as a whole, that a charge of a very few cents per pound lies against the great clip of that region in the aggregate. While the board cannot, therefore, undertake to name an exact figure in that case, it is certain that the Australasian costs at large fall materially below the South American.

(Note. —The Tariff Board seem to have been altogether too hasty in even expressing an idea as to the cost of wool production in Australia and New Zealand. Taking into consideration the capital value of freehold lands and the heavy taxation levied on woolgrowers, also the marketing charges and the scarcity and dearness of labour, tne cost of producing wool in Australia is probably not less than 6d per lb. That is the estimate of people best qualified to judge. On many freeholds the Federal land tax alone works out at Is 9d per head of sheep, or, say 2d to 2£d per lb of wool). "The Board finds that the present method of levying the duties upon raw wool is defective, in that it operates, by reason of the varying shrinkage of the different kinds of woo], to prevent the importation of many heavy conditioned sorts, which, if imported, would add substantially to the stock of sound staple available for the manufacture of woollen fabrics. That there is no valid reason for the discrimination that nuw exists as between the wools of Class 1 (merino and cross-bred) and Class 2 (English medium and lustres) and that these two classes should, properly, be consolidated.

"That the present duty of 33 cents on scoured wool is prohibitive, preventing effectually the importation of clean, low-priced foreign wouls of the lower grades that would be exceedingly ueful in the manufacture of woollens in this country, and if so used might displace in a large measure the cheap substitutes now so frequently employed in that industry. The fact that such cheap wool of such heavy shrinkage that they cannot be imported in an unscoured state emphasises all the more the prohibitive character of the present scoured pound duty. "That ad valorem rate is open to grave difficulties from point of

modity like wool, produced in many remote regions, and finding it way to markets through so many various channel of trade. "That, furthermore, an ad valorem rate would give a high duty per pound when prices are high, that is, when

he consumer most needs relief and the

producer is moat able to bear competition. With u low price of wool the duty per pound would be low, that is, at the time when the consumer has less need of competing wools, and the producer is lees able to bear competition. From actual examinaion of domestic mill records it is found that the average shrinkage of the fine merino wools now being imported into the United States from Australia and South America is about 48 per cent. "That the U.S.A. average shrink-

age would fall between 55 per cent, and 60 per cent.; that the South American crossbred wouls now being importted shrink an average of about 33 per cent, and the Australian crossbred about 30 per cent."

PROBABLE REVISION OP DUTIES It is considered almost certain that even if a Republican President is elected there will be a revision of wool duties immediately after the inauguration on March 4th next, and that whatever happens there is almost sure to be some adjustment and lower ing of the duty. In the event of united Democracy defeating the disunited Republican Party, which seems extremely likely very much lower duties upon wool will follow, and tue general opinion amongst wool men is that there will be a revision, and that a 5 cent, duty instead of 11 cent, on greasy wool would be most satisfactory to all concerned but it is regarded as essential for U.S.A. interests that the tariff on manufactured goods should be maintained. Most wool men say that an ad valorem duty based on clean washed yield would be impracticable.

Irespective ol tariff protection, the woolgrower must give way. to agriculturists in the State 7/here irrigation can transform the soil and make it suitable for farming. The woolgrower has a strong voting power in the central-western States, and their representatives are on the same footing wtih thoße of the thickly populated eastern States. It is, therefore, apparent that the interests of the limited number of woolgrowers have been conserved at the expense of the big majority of the population who pay for clothes.

Lower wool duties in U..S.A. would be of enormous value to Australasia, the United States, as previously shown, being the largest woolconsuming nation in the world, and instead of American buyers being forced to continue their attention to super wools of light shrinkage, as has been the case under existing duties, the scops of the demand would be widened and a very much larger proportion of our staple product would be taken.

POSITION OF AMERICAN WOOL GROWERS.

Whatever duty is placed upon foreign wool imported -into the United States of America, it seems safe to Hay that there can be no increase in wool production in the United States, for the annual slaughterings now amount to from 14.000,000 to 15,000.000 head, which is equal to the lamb crop of the year. Under the existing tariff the margin of profit to woolgrowers in America is small; a lowering of the duties will undoubtedly result in many going out of the business and in a heavy decline in sheep numbers and wool production.

The Gorman-Wilson Law of 18941897 made raw wool free of duty, and during that short period sheep numbers decreased by over 10,000,000 in the States, and the local production of wool by over SS,OOO,OOOIb. Free wool, or a greatly reduced tariff, Wuuld not only result in a greatly expanding demand for Australasian wool, but would, before long," open up an important market for our meat. The importance of the coming Presidential election in America therefore can hardly be overestimated; hence this rather long digresssion. The only other civilised nation to levy import duties upon raw wool is Russia, and as the duty is at so much per lb, irrespective of conditions, that country naturally buys coured wool only.