New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-09-22
Making Tariff Rates Uncertain

The American valuation plan, as
provided for in the Fordney tariff
bill, finds rising against it formula
BILE opposition. Business men, now
that they understand what the plan
means, realize they cannot afford to
be inactive or indifferent.
Under all previous tariffs, when
ad vulorem duties were to be collect
ed, it has been the practice to use
the foreign selling price as the basis
Of duty computation. 1t is proposed
to make a revolutionary change and
to compute upon the wholesale SELL
ing price" at which similar domestic
merchandise is sold in the principal
markets Of the United States, or,
when no similar goods are made
here, upon the wholesale selling
price Of articles with which it can
be compared.
This seems innocent enough. Why
not take the American price, which
measures the competition the Amer
lean producer has to meet, as the,
duty basis? The proposal is highly
plausible, and, like many others,
The Tribune has spoken of the plan
with some friendliness-at least, has
not been active in opposition.
But, though the theory is attrac-
tive, close examination shows that,
like many theories, it would not
work at all, or would work viciously.
Good reasons, it appears, have been
behind past reflections of the Ameri-
can valuation plan-reasons which
to-day are stronger than ever before.
What most Americans would have
is tariff high enough to offset the
difference between foreign and
American labor costs, yet low
enough to permit foreign goods to
flow in should any coterie of manu-
facturers attempt to exact monopoly
prices from American consumers.
Valuation on this side would open
the door to removal of this protec-
ton to consumers. Should some in
stitute or other price-fixing organi-
zation enhance American wholesale
prices by fiat the enhancement would
automatically raise the duty. There
would be no limit but the sky to
price increases. The foreigner could
never compete.
So much for the interest Of every
man as he is consumer. But there
is a special additional reason why
business men are alarmed. AS is we'll
known, it is now the practice in in
ternational trade to give advance or
ders. The American manufacturer or
trader makes a contract and knows
what he is to pay when the goods are
received. With American valuation
this, of course, would be impossible,
for no one knows or can know six
months or year ahead what prices
will then be. The effects of the I'M
certainty would be paralyzing.
Injurious to the public, through the
encouragement of monopoly prices,
and to importers, who would not
know what duties they were to pay,
there would be corresponding injury
to our foreign friends. If we couldn't
buy, they, of course, couldn't sell.
The rehabilitation of Europe, in
which we are so vitality interested
both as humanitarians and because
America is now great creditor ma
ton, would be further delayed.
1t is not necessary to point out
that the valuation issue does not
bear on the tariff question proper.
What is involved is the matter of
letting it be known what duties are
to be laid. The business interests of
America are surely entitled to this
knowledge-to freedom from an un-
certainty that would throttle bust
ness and in the end lay heavy bur-
den on the public.
The Blue Wilsonites
Bad faith. bad Judgment. nolitical