Economics Volume II: Modern Economic ProblemsFetter, Frank A. (Frank Albert)
General
Economics Volume II: Modern Economic Problems
Fetter, Frank A. (Frank Albert)
Economics
The revision of the tariff of 1913, viewed with non-partizan eyes,
appears to have been carried out, to say the least, as consistently
with regard to its professed doctrine, and as little influenced by the
malevolent arts of the old-time Congressional lobby, as any debated
tariff act in our history. It still contains on the whole a large
measure of protection. Under various pretexts such as the danger of a
flood of cheap goods after the close of the great war, attempts will
be made to make it still more prohibitive. But one lesson of our
tariff history is that such an act should be given a period of fair
trial before extensive changes are made in it. Even further reductions
should be cautiously undertaken and put into effect gradually. If the
attempt is made through temporary rates to reduce the shock of the
trade adjustments, of the "dumping" after the war, then the devising
and administration of such measures should be delegated to an
expert, disinterested, permanent tariff board. The task is to prevent
temporary "unfair competition" and sudden changes, rather than to
raise permanent barriers to fair trade.[14]
[Footnote 1: It is evident that it is only through _ad valorem_ rates
that it is possible to compare the average rate of duty for one tariff
act, with that for another. As, however, every tariff act is made up
of both specific and _ad valorem_ duties, it is only at the end of the
year that an average _ad valorem_ rate can be estimated by comparing
the total of duties collected with the total estimated value of the
goods imported. Average _ad valorem_ rates are estimated in this way
both on the dutiable goods alone, and on all goods, free and dutiable
combined. There may be an element of error, even of misrepresentation,
in such estimates. They do not give the simple test of the relative
height of duties, or of the degree of "protection" that we might at
first suppose. Just to the extent that a new and higher rate really
operates to exclude imports (and thus is protective in its effect) the
goods subject to that rate cease to form part of the total imports.
For example, if the average rate of duty were 25 per cent, and a
50 per cent rate on an article were increased to 75 per cent, it is
possible that this rate would prove to be absolutely prohibitive.
This raise of rate, therefore, would tend to reduce the average rates
collected on all dutiable articles. Changes in general conditions
of industry from causes quite apart from the tariff may result in
shifting the proportions of imports that are dutiable so that the
average rates go either up or down while the tariff law has remained
unchanged on the statute book. A failure to consider these and related
facts leads to much confusion in popular and political discussion of
the tariff.]
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