Evening star. [volume] (Washington, D.C.) 1854-1972, 1912-03-27
AGAIN THE WOOL BILL
Measure Vetoed by President
Reintr0duced in House.
CARRIES AID VALOREM DUTY
Statement by Chairman Underwood
of Ways and Means Committee.
Theory of Applying Protection Ac-
cording to Differences of Cost
Production Declared Erroneous,

That the tariff board in its report to
congress on the wool schedule proceeded
upon an entirely erroneous theory and
that its report was "untenable' is the
conclusion of the democratic members of
'he ways and means committee of the
fouse, as set forth in a report prepar red
Dy Representative Underwood. chairman
OF the committee. in connection with the
relntroduction of the wool bill placing a
-o per cent ad valorem duty on raw wool
Ihs bill, after slight revision in con-
ference last summer, was vetoed by Pres
ldent Taft. who gave then as his principal
reason for exercise of the veto power
that the tariff board had made no report
on the subject. Last December the board
reported and the democratic members of
the ways and means committee, after an
analysis of this report, reintroduced the
old bill. claiming that there was nothing
IN that report to justify any change.
Chairman Underwood's Summary.
Summarizing the conclusion of the COM
mittee. Chairman Underwood says:
"A careful and painstaking analysis of
the wool report of the tariff board die
tates conclusions as follows:
The theory of applying tariff duties
according to the difference in the cost of
production in this and in foreign coun-
tries, upon which the board has projected
and prepared its report, is entirely erro-
neous and untenable. Furthermore, if
this theory could have been systematic
ally and carefully applied it would not
nave afforded trustworthy results for
guidance in preparing tariff legislation.
80 far as conclusions can be drawn
from the boards report, it furnishes
N il1Cf rIn
rates proposed in the present bill.
I'm making the computations from
which have resulted the rates as justified
by the tariff boards data, the most ex-
pensive and difficult conditions indicated
by the data as attending production have
been employed with view t0 being
more than just in the conclusioi IS The
necessity Of protection to equalize the
difference in the cost of production be-
yOnd the rates carried by this bill eX-
lists in but few instances, and these are
In all probability the result of high costs,
which have been presented by the board
and ufed in the computations.
In preparing the bill Of last session
and H. r. 22195 of this session no inten-
t1onal provision was made for protection,
the endeavor being to reduce and adjust
rates with a view to producing thelarg-
est amount of revenue consistent w.tC the
Is believed that the rates of this bill APP
proach very closely, at least. to the best
revenue producing points, and that these
rates should, if enacted into Jaw, permit
such quantities of imports as will effec-
lively regulate domestic prices.
Quotes Report on Original Bill.
After reviewing the democratic attempt
of last year to secure revision Of the wool
schedule and the Presidents veto, the
committee quoted the report on the origi-
nal wool bill to the effect that cit would
be trif1ing with the people to give FUR
ther consideration to republican couc-
sells of more delay in this matter
Notwithstanding this CONVECTION" the
report continues 1.-The democratic ma
Jority of the House of Representatives
impatient to respond to the demands of
the people for the speedy revision of a
schedule of indefens BILE rates, was forced
to delay further effort to respond to the
protests of the American people
The message of the President submit
ting the report of the tariff board and MS
recommendations that the board findings
rates is then quoted, and the committee
comments:
THE committee has made a careful an
alysis Of the report of the tariff board in
order to interpret the findings and to dis
cover in what particulars the commit
tees bill of the last session was defec-
tive. failed to adjust the duties in an
equitable and proper manner. This anal
quires a single change i'm the rates fixed
in the committees bill, and the commit
tee is constrained to present again the
results of its Investigations of last sum-
mer, as embodied in the bill presented to
the House at that time.
Boards Report Analysed.
GAS shown in the analysis. the data Of
the report OF the tariff board have been
found to be diffuse and unsystematic, to
present Insignificant findings and, as stat
ed. to afford the committee no valid rea-
son for any change in it's recommended
tons of last session with regard to the
rates of Schedule K.''
The report of the committee further
states that the tariff boards report large
ly consisted of study of what Is called
comparative cost of production of woods
and manufactures of woods in various
countries" and of this the committee
says:
THE view. that the proper basis for
tariff duties is found by comparing money
costs of production, rests upon the opin-
ion that money costs represent the rela-
tive degrees of sacrifice involved in turn
jig out commodities of given kind in
various countries For instance, If IL be
assumed that If given unit OF a certain
commodity can be produced in England at
81, the equivalent of that sum,
while in the United States the money ex-
penses Of production at s1.25. it is neces-
sary TO have a tariff duty equal to the
difference in these money expenses of
production, or certainly to the difference
in money expenses minus the allowance
for variations in freight rates. in order to
place the producers in the two countries
upon an equal market footing. If this is
not DONE IL will be possible for the pro-
ducer in the country where money ex-
penses are lowest to drive out of busi-
ness the producer in the country where
money expenses are highest. This as
| sumption is based upon an erroneous view
of international trade, and finds no war
rant whatever in economic reasoning"
The democratic report discusses this
matter at great length, and points out
that in every country there Is a great
range of difference in cost.
Discusses Remaining Problem.
Even II it be granted. however, that
an ascertainment of differences in money
cost of production-whether highest, av-
erage or lowest-would furnish a guide