The Farmington times. (Farmington, St. Francois County, Mo.) 1905-1926, 1922-07-28
Senator Pomerene Shows Up Ameri-
can Valuation Plan.


One of the most valuable contribu-
lions to the Tariff discussion is a let
ter written by Senator Atlee Pomer-
enc dem, Ohio) to a large manu-
facturer, which the Senator had insert
ed in the Congressional Record in lieu
Of speech. 1t deals with the Ameri-
can valuation plan, which the pending
tariff bill authorizes the President to
substitute for foreign valuations I'M
der certain conditions. The Senator
FIRST disproves the suggestion of his
correspondent that it is easier to de-
termine American values than foreign
values by stating that we have consul
lar officers and treasury agents in
every part of the world and that their
reports are available to custom of
ficials, and further that custom Off
Gals have the right to call witnesses
and books and papers and inquire into
foreign values of the importers, the
same as under the American valua-
ton plan.
One great value of Senator Pome-
rcne's letter to the average reader is
in the concrete illustration of how
the American valuation plan would
work. His letter says:
ITO sustain your contention that
the American valuation plan would
not aid the American producer in adj
vancing prices you say, IF an article
is valued at 81 in Germany and SIM
liar article has valuation in the
United States of So, then to equalize
tba J;fForoooo ,,nJar tLn AY,or;oo,, vol
uation a so per cent tariff should be
set. That would mean a tariff on the
article in question of 50. Add that 81
to the 81 German valuation and the
result is So, thus equalizing the Amer
lean valuation of similar article
"You further say, IT then the
American manufacturers try to raise
the price, let US see what would hap
pen. Supposing they boost the price
to $40, then the tariff would be so per
cent of $40, or So. Add that S. tariff
to the 81 German valuation, and the
German selling price to the United
States would be SO. The result plain
ly shows that the American manufac-
turers could not boost the price; other
wise the Germans could take all the
business
"Given your hypothetical illustra-
ton with your hypothetical prices and
circumstances, you perhaps have prov
en- your case to your entire satisfac-
ton. You make the mistake, however,
of assuming all the while that the
change in valuation can only apply to
the American market. Your exam
pie overlooks the changing of prices
in the other countries. The debates in
the Senate show that very substan-
tial advances in the price Of products
as well as of labor are being made in
Germany, and particularly was this
true during the months of January and
February.
"Now, let us take your illustration
with the price of the article So and
with so per cent ad valorem tariff
duty of 81, Then assume that the
price in Germany advances from 81 to
Sc. If this article was to enter the
United States, the importer would
have to pay the German price Sc, plus
the advalorem duty of 81, or $40; so
it would be utterly impossible for the
German article to enter the United
States, with the effect that there
would be no competition at all between
domestic and foreign articles, and the
producer in the United States could
advance his price from So to just be-
low $40. The further result would
follow that the tariff duty which sup
posedly was intended as a source of
revenue to the government of the
United States would yield no revenue
whatsoever. Effects will differ with