The Glenwood post., 1922-05-11

vided that the tax should be levied
according to the value of the goods
when offered for sale in the United
States.
"The senate committee on finance
d;dn't think this plan is practical for
the reason that the importer of for
eign goods would have to add the i'm
port tax to the price he pays in a for
eign country and then figure tax on
the tax and add that to his original
cost before determining the price at
which he must sell the goods in this
country.
"You see, it is like this: If an ar
ticle costs $40 in Europe and the
freight is 10 cents and the importer
must make profit of 10 cents, that
would be $1.2O, without figuring any
import tax. Then if the import tax is
25 per cent, that would be 25 cents,
if figured on the value in Europe, but
it would be 25 per cent of the price
at which it is to be sold in this country
if figured under the American valua-
tion plan. Now, you see the difficulty
with the importer is to know what
price he must charge in order to get
enough to cover both the original cost
and the duty. If he sells the goods
in this country for $500, the 25 per
cent tax on the American valuation
plan would be so cents and this added
to the $1.20 would make the goods
cost him total Of $1.70. You see
from this that the import tax must be
figured as part of the value of the
goods to America, or, in effect, tax
on the tax.
"The senate finance committee
thought this was too complicated to be
practical in conducting business 80
they reported in favor of retaining the
old system of figuring the tax on the
value of the goods in the country
where produced, but giving the presi-
dent large amount Of power in chang
ing rates Of duty whenever facts are
proven to show that the import tax is
not sufficient to protect the American
producer from destructive competition
from abroad. This is a very compli-
Gated subject. When I was in Wash
ington heard Senator Smoot, of Utah,
deliver a long address in the senate in
which he explained it fully. Senator
Smoot said that few people understand
this difference between the American
valuation and foreign valuation and,
in talking with number of people on
the train on my way home, I found
that that is true.
u have tried to tell you in a few
words the difference as it was ex-
planned by Senator Smoot. If you
were old enough to be taking an active
interest in politics l would advise you
to sent to Senator Smoot and get
copy of his speech. I think it is worth
while for you to know in n general
way the principal question which is
being discussed in connection with the
bill which is now occupying the atten-
ton of congress. The Republicans are
trying to pass bill which will make
importers of foreign goods pay more
taxes for the privilege of selling their
foods in the United tSates. They are
doing this in order to keep the Amer
lean market for the producers of goods
in this country. They want to provide
more work and more wages for work
ing people in the United States. The
democrats are opposing that bill, be-
licving that it is best to buy goods
wherever you can buy cheapest, even
if American factories are closed.
"Now, I am tired after my long
ride on the train so You run off to
bed and perhaps I will tell you more
about my visit in Washington some
other time"