The commoner. (Lincoln, Neb.) 1901-1923, July 09, 1909, Image 1

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The Commoner
VOL. 9, NO. 26
Lincoln, Nebraska, July 9, 1909
Whole Number 442
Free Raw Material
On another page will be found a letter writ
ten by Senator Bailey, of Texas, to Governor
Beckham of Kentucky. Governor Beckham'
paper contained a criticism of Senator Bailey's
position, and as the senator has taken the
trouble to write a somewhat lengthy defense
of his position It may fairly be accepted as &
basis for discussion. If ho had offered it as an
individual position it would have had only such
weight as one would desire to attach to the sen
ator's individual opinion, but he makes his posi
tion a matter of general discussion when he
says: "My vote against placing Iron ore on the
free list was based upon the ancient creed of
he democratic party, which requires all manu
facturers to pay a duty on their raw material
as long as a duty is levied on the finished
The senator admits that the doctrine of free
raw material was adopted as a part of the dem
ocratic policy on the tariff question from 1892 to
1894, but insists that it was a wide departure
f'from our ancient and well established position."
He also understands that some of his votes have
been contrary to the specific demands of the
last democratic national platfornu
' The senator contends that he has never ut
tered a single sentence, or cast a vote, that
will warrant anyone- in supposing that he has
any toleration for the doctrine of protection,
fend yet in theory1 letter In .which this pxo-i
testation appeysnedr the conclusionrha '
eays: "But I shallrieVer agree' todlscrlminate,
even withta purely revenue duties, against the
lumber inill and in favor of the factory." If
that sentence means anything, it means that
he insists that the lumber mill shall have its
ehare of whatever incidental protection a purely
revenue duty may give.
.' The issue raised by Senator Bailey is an ex
ceedingly important one and the very fact that
it is raised by a man of his ability, makes it
necessary that those who are opposed to it shall
present the arguments on the other side. Sen
ator Bailey would regard It as a political sin
to favor a high tariff on an article produced
in his own state and a low tariff on an article
produced somewhere else but consumed in
his state, but it so happens that
the policy which he now presents as the
"ancient creed" of the party is the only
policy which gives "protection" to industries
of his state. Eastern Texas has a considerable
saw mill industry and he declares that he is
not willing to discriminate against the saw
mill in favor of the factory; in western Texas
there are a number of sheep growers who want
a tariff on wool and a number of cattle raisers
who want a tariff on hidos. Lumber, wool and
hides are three of the Important raw materials.
A tariff on manufactured products can not bo
said to protect Texas because Texas is not to
any great extent a manufacturing state. Tho
position taken by Mr. Balloy enables him to
defend a duty on wool, a duty on hides and
a duty on lumber as a matter of principle rather
than as a matter of favor. In tho case of hides
and lumber the duties are so low as to bo rep
resented as revenue duties, but the tariff on
wool is higher.
The main difficulty with Senator Bailey's
position is that It rests upon tho same fallacy
that all other protective arguments do, namely,
that it overlooks tho fact that tho persons
who PAY a tariff tax must necessarily largely
outnumber those who receive tho benefit of it,
and it also overlooks the fact that a burden
placed upon the manufacturer is always trans
ferred to tho consumer through the operations
of a compensatory duty.
If Senator Bailey was in a position to frame
a tariff law all by himself he would probably
put a revenue duty of, say, ten, fifteen, twenty,
or twenty-five per cent on hides and leather
and then put a similar duty on shoes made
from the leather, and ho would treat wool and
tho manufacture of wool, and lumber and the
manufacture of lumber in the same way. Ho
would defend it as a revenue duty but It would
give incidental protection on hides, wool and
But Senator Bailey must confer with -others
tin the framing of a tariff bljl, and experience
tias shown that the manufacturers are always
abj&tp secure a compensatory duty whenever a
1 duty Is imposed upon tho raw material used in
manufacturing, and it Is not likely that this
condition can be changed soon. As tho tariff
on raw material is transferred to tho consumer,
a vote in favor of a tariff on raw material is,
In effect, a vote to increase tho tax upon tho
consumer and, as comparatively few are bene
fited by the tax on raw material, as compared
with the number burdened by tho tariff on tho
manufactured article, a tariff on raw material
can not be defended on the ground that it is a
benefit to a majority of the people. The only
people benefited by a tariff on raw material
are the people engaged In the production of the
raw material, and tho fact that they happen
to live in the western states is no justification
for the tax, because there Is scarcely a western
state In which a majority of tho people are en
gaged In the production of any raw material
that can be protected by a tariff. If a majority
of the American people were in a position to bo
benefited by a tax on raw material, it might
he argued with more justioe that a' tax on raw
material would, to some extent, off-set the tax
which they have to pay on account of the tariff
on manufactured articles, but as comparatively
few produce a raw material, the prlco of which
can be increased by a tariff, the attempt to help
them by a tax upon raw material results In
Increasing their burdens.
For every farmer benefited by a tariff on
hides or on wool many formers are burdened
because of the tariff on these ' raw materials,
therefore a tariff on these articles can not be
said to benefit the farmers.
As has been shown in former editorials, the
tariff collected on raw material Is but a small
part of the Increased price collected on domestic
raw material by domestic producers through
the operations of tho tariff. From a purely
revenue standpoint, therefore, the argument
falls. It betrays a confusion of Ideas to defend
as a REVENUE tariff a tariff which enables
the protected Interests to collect MANY dollars
for EACH dollar colle'cted by the treasury de
partment. The steel trust, for Instance, will be able
to collect from twenty to thirty times as much
from the people on domestic Iron ore as the
government will collect through tho tariff on
Imported iron ore.
But there is another objection to Senator
Bailey's position which can not be overlooked
by thoso who aro seeking to rollovo the pcopls
from tho Iniquities of a high tariff, namely,
that every attempt to extend tho benefits of
protection oven Incidental protection IN
FEEL A PECUNIARY Interest in tho protective
system. In tho Fifty-second congress an at
tempt was mado to put wool upon tho froo list.
Tho advocates of a high tariff becamo vory
much alarmed and warned tho manufacturers
that if they dared to favor freo wool In the
hope of getting cheaper raw material they
would risk tho overthrow of tho ontiro system
of protection by alienating the wool growers.
Tho warning was a logical one and it was
effective. Tho beneficiaries of protection must
"hang together or they will hang separately."
If there wore no other reason for putting hides,
lumber, wool and other raw material on the
freo liBt, a sufficient reason would bo found In
tho fact that It would decrease the number of
persons who find a pecuniary interest in sup
porting tho policy of protection. Tho sooner
wo can get the wool growers, tho producers of
hides, the producers of lumber, the producers
of Iron oro and other producers of raw material
out from behind tho protection breast-works,
tho sooner wo may hope for effective tariff
Senator Warren, of Wyoming, In discussing
tho duty on hides said recently that tho policy
of freo raw material would, it adopted, bo th
doath knell of the protective system and Ben?"
ator Carter on tho same day warned tho eastern.
. Republicans that tho farmors would not bo wlU?tf
""Mng to buy in a protected, market it they had4
- to sell in a free trade markdt, Surely the dem
ocrats ought to be willing to have tho "death''
knell of protection" sounded; surely they ought '
tp be anxious to have the farmers admitted t'o
tho ranks of tho tariff reformers.
If Senator Bailey, Instead of desiring
reduction, desired to maintain the high
tariff, ho could not possibly find a more
effective way to strengthen the high tariff
system than by lacreasing the number
of those who look to it for benefits, avowed
or Incidental. According to his estimate the'
tariff on lumber will yield a. revenue of some- ,
thing less than one and three quarter millions
a year, and the tariff on iron oro, according to
tho estimate furnished by others, will yield a
revenue of about one quarter of a million loss
than two millions would bo derived from these
two items and yet the democrats who voted
for a tariff on lumber and Iron ore have in
jured the consumers to the extent of many,
many millions, for their votes aro being used
and will be used to offset the criticism of tho
republican leaders. Tho democrats who havo
voted for tariff on lumber, iron ore and other
raw materials havo paralyzed their usefulness,
as tariff reformers. By voting to retain rates
which a number of prominent republicans want
ed to reduce, they have given the republicans
a club which will bo used against our party in
the coming campaign. It Is "sparing at the
spigot and wasting at tho bung-hole" to haggle
over the little revenue derived from tho tariff
on raw material when the attempt to retain
this revenue makes it more difficult, If not Im
possible, to lessen the tariff burdens that tho
people aro bearing-.
Senator Bailey is a great lawyer and ono is
astonished to find that ho attempts to justify
the refusal to put lumber on tho freo list on
the ground that lumber constitutes but
TWENTY PER CENT of the cost of building
a house and that there is a thirty-six per cent
duty on other material used in house building.
Lumber constitutes a larger proportion of the
cost of barns and fences, but it is neither
logical or reasonable to say that we will refuse
a SMALL reduction on lumber merely because
we can not get a reduction on other things.
The proposition, as Mr Bailey states It, is that
if wo can not MAKE the protectionists reduce
PER CENT of the material entering into home
building, we will not ALLOW them to reduce
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