The New York herald., 1921-12-06
American Valuation.
Effect of the Fordney Tariff o.
Prices of Imported Goods.

To THE NEW YORK HERALD tried to
make It clear in the letter which Robert
J. Hearne declares should not be allowed
to go unchallenged that the American
valuation basis for levying ad valorem
duties has nothing whatever to do with
rates. Nevertheless he goes merrily on
with the declaration that under the
American valuation plan he finds that
the net result Is a very, very great
increase in the total amount of duty
paid" but he produces no figures except
in H., pothctical case whereby he estab-
fishes nothing.
However, ! shall try again TO make
the matter clear. But to clear his mind
of irrelevance he must forget the Demo-
cratic tariff of 1918, under which all In
dustries save agriculture are now work
ing-if / may be pardoned the word
with the finest record of unemployment
we have had since early in 1914.
Only agricultural products and wool
manufactures are protected by the cmer-
gency tariff and the latter Industry only
because temporarily the iuties on raw
wool have not yet fully become effective.
Therefore wool manufacture is normally
at work with but little unemployment
Obviously the niger in the woodpile
of Mr.. Hearnes complaint is in the
protective rates in the Forduey bill as
il passed the House and not against the
method of applying those rates.
The Fordney tariff rates are intended
to cover the difference In the cost OF
production here and abroad on the basis
OF the par of exchange. and ,f 60 per
cent. of the foreign value or price rep
resents that difference. then, to use Mr.
Hearne's illustration. IL the foreign price
be 81. the American price or valuation
would be 81 plus 60 cents. or $3.50, and
not So. which Mr.. Hearne gets from
heaven knows where. and the rate OF
duty on the American value would not
be so per cent. of the imaginary SO but
37h per cent. OF s1.60. or GO cents,
which. added to the foreign price OF 81.
makes the total duty paid cost s1.6o and
not s2.2o.
But before giving us this example OF
how It would not work Mr.. Hearne goes
on an arithmetical debauch; for he
charges the Forciney bill with doubling
the Underwood tariff rates and then he
redoubles and when he goes game he
has four times as much in his jeans as
he started with.
Commenting on my statement that
"the landed cost of an imported article
will be Identical whether American or
foreign valuation be the basis OF apply
ing the duty" he asks the questions. "rf
this Is so why should anybody object to
American valuation and why should
anybody favor II as against the present
method? If IT. makes no change In the
result why go to all the trouble?"
Well. nobody objects who understands
II and everybody favors Il who does be-
cause I. il Is n terror for preventing
undervaluations Of imports. 2. II is
more easily administered when the value
Is determined in one country having
Jurisdiction as against more than 100
foreign countries where we have none.
3 II will put more money into the
United States Treasury. a. II plays no
favorites, because IL collects the same
amount OF duty on an identical commod-
ity regardless OF what country IL comes
from. 5. Instead OF Congress fixing the
rate and the foreigner or importer the
value. Congress determines both the rate
and the value. GEORGE c. HErzEL.
CHESTER, Pa. December s.