Democratic Sentinel, Volume 14, Number 39, Rensselaer, Jasper County, 24 October 1890 — TARIFF LETTERS TO FARMER BROWN. [ARTICLE]

TARIFF LETTERS TO FARMER BROWN.

SO. 4. Where the Tarift la a Tax to the Hilt. ‘Dear Farmer Brown: In my last letter I stopped abruptly with the mere mention of «the third class ot commodities, which are either not made here at all or are made in quantities not sufficient for the home demand. On this class the tariff is a tax to the *ull amount of the duty on both the imported and the domestic article. I am in having Major McKinley and his committee in agreement with mo on this point He says in the report on the tariff bill, in speaking of the duty on •sugar, that “it is a tax which is added to the price not only of the imported but of the domestic product. ” He shows that the duties collected on sugar were $55,975,610; and then he makes the following Remarkable statement—remarkable for him: “Add to this the price of •domestic sugar arising from the duty, and it is clear that the duty on sugar and molasses made the cost of the sugar and molasses consumed by the people of this -country at least $64,000,000, or about $1 for each man, woman and child in the United States more than it would Ohave been if no such duties had been levied and the domestic product had remained the same.” In making this statement Maj. McKinley is entirely in the right. The sugar duty, which he has just removed, was $2.22 per hundred pounds on raw -sugar. But 112.5 pounds of raw sugar is inecessary to make 100 pounds of rerfined; the duty therefore, entering into 100 pounds of refined sugar was $2.50. Now, I have before me a table of the iprices of the best granulated sugar in New York and in London during the iflrst nine months of last year; and 'the figures show that this sugar ranged ffrom $2.50 to $3.57 per hundred cheaper dn London than in New York. The price ten days ago was $3.80 per hundred in London for granulated sugar, and $6,625 in Now York, or a difference of $2,825 per hundred, or actually more than the duty. Maj. McKinley did not state the case any too strongly. Maj. McKinley, however, is careful to ipoint out the fact that wo produce only one-eighth of our sugar, and this is claimed by him as the explanation of the fact that the entire duty is added to both our native sugar and the imported article. He takes the trouble to tell us that this “is not true of duties imposed on articles produced or made here substantially to the extent of our wants.” Let us see how this works with lead, Our production last year, as stated beiore the McKinley committee, was 190,*OOO tons, while our imports were stated to be only 1,172 tons. The home market is secured to domestic producers by a duty of 2 cents per pound. And now for the prices: The latest reports give the New York iprice at 5.30 cents a pound; and dispatches from London on the same day give the price there at 3.08 cents. The •difference of 2.22 cents being more than the duty. In view of the higher price here growing out of recent tariff legislation, the importing point has been :reached, and accordingly the New York Commercial Bulletin States, in the same •report from which I have quoted the above prices, that 1,500 tons have recently been imported. This means that the entire duty is added to the domestic lead, and then the foreign articles can begin to come into competition. This •case shows conclusively the error of Maj. McKinley in the assertion jast quoted :from h'm. Another case showing that the entire duty, and even more, maybe added to the domestic article is that of linseed oil. The duty on it was 25 cents a gallon un--der the old tariff that has just passed ■out of date. The New York price of ■ linseed oil, as was testified before McKinley’s committee, was 62 cents a gallon, and the London price was only 32 ■cents, five cents more than the duty being added by our linseed oil trust, which controls nearly the entire manufacture in this country. Notwithstanding the arbitrary manipulating of prices by the trust, Major .McKinley actually raises the duty to 32 ■cents a gallon. Heretofore the trust was not able to put up the price of oil above 63 or 64 cents a gallon, for then imports •would set in; but now that McKinley lias •given seven cents additional protection, we may expect to see the price go higher. Besides these cases hundreds of others -might be mentioned whero the whole -duty is added; but in mavy kinds of • commodities a fair comparison is extremely difficult, owing to the fact that we cannot know whether we are comparing precisely the same article or ■quality. This is particularly the case with all kinds of dry goods, and in inearly all articles of complicated manufacture.

A vast number of Industries went before McKinley to plead for higher duties, showing how they would be injured, 'Or even ruined, if higher protection were not given. It was pointed out by them ■that foreign competition was interfering seriously with their home market. It is clear that all such industries sell at prices equal to that of the foreign article, with the duty added. How ■ could there be competition otherwise? For example, our window-glass manufacturers, who have just formed their trust, pleaded with Maj. McKinley that foreign competition was increasing, and that therefore they needed higher duties—which were given to them. Now the average duty paid on foreign glass last year was 105 per cent.; in other words, on every dollar’s worth of glass there was a duty of $1.05, the dollar’s worth costing thus $2.05, not including commissions to the importers -and other expenses. Now the question •*is, How could that foreign glass compete with American glass unless the American manufacturers should try to sell a •dollar’s worth at $2.05? The fapt is, they wanted to sell the dollar’s worth at ;more than $2.05, and that is why they raised their false cry of distress for .■higher duties; and that is why they formed their trust. They wanted to bag the game that McKinley had started for •them. How many kinds of commodities are •thu3 taxed at higher rates in the McKinJey bill? Their name is legion, and it is needless to try to name them. Let us ’.hold fast to the rule that industries which ask for higher duties by reason •of foreign competition are already charging up to the high-water mark of 4he protective duty.. Having; uow shown that the tariff •duty, where it is protective, is always a tax, I will examine in my next letter the -question who pays the tax, and will deal particularly-with the claim that “the foreigner, pays the tax." Yours truly,

RICHARD KNOX.