The News-Herald. [volume] (Hillsboro, Highland Co., Ohio) 1886-1973, 1891-07-16
WHO PAYS THE DUTY?
1T DEPENDS ON THE NATURE cF
THE TARIFF.

"When foreign manufactures seN'ss
into our markets, does he or do we pay
the duty?'
Sometimes we pay it, sometimes hs
pays it; generally it is divided between
us. While sugar bore duty we ;lliI il
1t was revenue duty. SO of the preScIt
revenue duty on tin plates. They ARA
not manufactured here, and we aro tipe
Welsh tin plate makers regular AID al
most only customers In such cases ygs
always pay the duty.
When the duty is high enough TO hs
protective, however, the case is altered
This already appears very clearly in the
case of tin plates American mills are
getting ready to produce them on largo
scale. Suppose they supply one-half 0s1
consumption. The Welsh makers nstxr-
ket will be contracted almost proportion
ally. Must not the result be lower
prices? Their capacity to manufaeture
will remain as great as ever, while the
demand will fall off, say, third. The
simple law of supply and demand will
reduce prices. The Welsh mills win fJad
themselves glutted and will offer plates
at whatever price may be necessary IN
get over the tariff and successfully corn
pete with the domestic product In other
words, they will subtract the tariff from
their selling price-that is, pay it them
selves. This is not mere theory. Tina
tin plate men today before the new duty
has become operative, have anticipated
its effect, and are looking for orders 20
be filled after July under the new tariff
rate at prices reduced from present
prices by just about the amount OF the
increase in duty. When the new mills
start up and begin to multiply there can
be no doubt that the anxiety of the FOR
eign mill owner to sell will increase. In
deed, he will be willing to sell ut alu2ost
any price, and will no doubt cut wages
and economize on all corners in Crllgr 90
save at least a part of his old profits In
some way or other he will manage 20
subtract the tariff, or at least IL p,.rs uf
it, from the selling price.
In the case of industries well estl.h-
lished and developed SO far as to supply
for the most part the domestic marizes,
there can be little doubt that the foreiyx,-
er pays the tariff when he enters C1r
market This does not mean that slle
duty is not added to the price paid in the
foreign market. 1t does mean, howeTar.
that the consumer, if the tariff We're nt,nl-
ished, would have to pay an equal, per-
haps a greater, price than he now pays
for the domestic protected article. We
have seen how, in the case of tin plate,
the duty, by cutting off and narrowing
the foreign manufacturers market, rs-
duces his prices. So with the removal Of
the duty we should witness the reverse
process. Imagine the tariff ON woc1eu
goods abolished tomorrow. Foreign
woolen mills would find for their outygrt
new market wider and richer than al
their other foreign markets combined.
The capacity for producing would remain
the same, while the demand would :,e
largely increased. Under such copdi-
tions must not prices rise? That is to say,
if the tariff were abolished, we could not
buy in the foreign market at present
prices under existent tariff conditiora
That countless American products are
cheaper now than foreign products would
be under Free-trade will hardly admit of
a doubt. In these cases the foreigner
pays all the tariff.
There are many kinds of imported
! goods, too, the tariff on which is borne
partly by the foreigner, partly by The
consumer. Take for example fine cloths
for mems clothing. The high tariff on
these certainly has the effect of contract-
! ing the foreigners market, and henoe re-
ducing his prices below what they would
! be under Free-trade. Yet it is doubt
less true also that much of the import
trade in these goods is due to the demarld
for them among certain persons w,to
would think themselves degraded if they
wore an American suit of clothes T7sey
! would get the imported article no maxi
ter how high the price. So of many
other special classes of goods. Preju(Gca
and not price creates the demand for
thern and their purchasers divide Nth
the foreigner the tariff burden. They
are generally of class which can vaA
afford to pay for the privilege of buying
abroad.
There is another important point which
should not be overlooked in this oozpes-
| tion. In cases where the tariff has been
increased on some product, as Oh tin
plate, with view to developing its pro
duction in this country, even if the effect
is to temporarily enhance the price of
the product, the advance is rarely bsrne
| by the consumer. For in retail trade
merchants are very reluctant and find it
very difficult to mark up goods which
their customers have been accustomed
to buy at lower prices. It is more to tho
advantage of the retailer to subtract tho
advance demanded by the importer from
his profits than to risk losing the trade
of a good customer by demanding tho
increase from him. This theory also
has practical illustration in actual
present conditions. Notwithstanding the
increase in the price of tin plates, tin
ware is actually selling in the hardware
stores cheaper, as rule, than before tho
increase.
Therefore we conclude that, while
denying in toto that the tariff ON iln-
ported goods is a tax on doanessle