The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1913-04-18
Tariff and Cost of Living.

Thousands of people believe today
that the reduction of the tariff dutie:
on the market-basket products, which
are found in the new Democratic tariff
bill, will bring about a reduction in the
cost OF living. They naively conclude
for example, that a reduction OF so per
cent in the duty on wooden cloth will
be reflected by corresponding decline
in the retail price of that product, or,
10 take another example, that. if sugar
is made free, they will be able to buy
sugar at the corner grocery for ap-
proximately cents less per pound
than they do now Ii is undoubtedly
true that tariff rates affect prices, but
it is not the only force affecting prices.
In the complexity of our economic life
the intcraction of forces are battling
and no simple solution of high prices
can be accurate.
While the question is in dispute, it
may be laid down that the underlying
and fundamental cause of high prices is
the great increase in the gold supply
which has taken place during the last
decade The monetary floor upon
which we stand is unstable. The dol
lar has declined in purchasing power
The effect has been somewhat the same
as it would have been if the govern
men. Iod ro,,,,,,apded f1,a, pacl, dollar
be cut in half and each half be hence
forth called dollar. When prices are
rising from this cause. salaries and
professional fees respond less quickly
to the changed conditions than do
prices of foodstuffs, and we have COM
plants of the high cost of living.
Among the other causes of the high
cost of living are combinations of CAPT
tai, combinations of labor. combinations
of distributors. rise in the standard of
living among Americans, the increase
of urban. and decline of rural popula-
ton and the tariff
In the Underwood bill the rates of
llS d. llC-NiuilSH Dlll dlc IdulSdllg lc-
duced. Among the food articles placed
on the free list are meats, -four. fish,
milk. and potatoes. and among the food
articles upon which the duty was re-
duced care sugar. cattle, wheat. sheep,
lemons. pineappleS. rice, macaroni, but
ter, cheese, beans. eggs. vegetables, and
a number of other products. Boots
and shoes are also put on the free list,
and cotton and wooden fabrics are to be
admitted TO the country at a very
much reduced rate.
If the consumer will not get all the
benefit of these reductions it is fair
to ask: WHO WILL" in the first place,
many of the reductions are nominal
The importations of some of the ar
ticles are negligible now, and will not
be materially increased by the reduction
in duties. lmportations in such cases
will not have sufficient effect on the
forces now fixing the price in the
American market to reduce it appre-
Gladly. In the second place, the benefit !
OF the reduction in many cases will be |
absorbed by the middleman before the |
product reaches the consumer. Take, |
for example, fancy Bingham, the
Jobbers price of which is US cents, |
and which the retailer sells at Is cents. |
AS is well known in the trade there
are certain fixed retail prices for cotton |
goods, and variation of the jobber's |
price as much as ? cents, either tip or
down, will not affect the price at which |
the retailer sells. Under such a condi- |
ton tariff change which would af- |
feet the jobber's price cents would
never be reflected in the consumers |
price. This is only one illustration of |
principle found in the distribution of /
many products, and which makes many
predictions of the direct effect of re-
duced duties false.
Reductions in certain duties will have
immediate effect upon prices in certain
sections of the country Sugar. if made
free. would be cheaper. as it was un-
der the Mckinley bill Free meats
would encourage the importation of
frozen meats from Argentina and else
where, and at least IN our seaboard
cities there would be decline in price.
Free fish probably would affect the
price Immediately. Free dairy products
will, no doubt. affect the price of but
ter and eggs in the Northeastern cities
near Canada, and this might be true of
vegetables. The direct effect of tariff
reduction, however, as has been said, is
comparatively limited.
A reduction of the tariff may have
the ultimate effect of reducing prices,
which will not be Immediately affect
ed. Foreign production will be STINT
lated by the prospect of selling in the