MR. TAFT ON HOW TO MAKE A TARIFF. T HE last
number of the American Outlook contains a report of "an authorized interview" with President Taft on the methods of tariff-making. Mr. Taft is, of course, a convinced Protectionist, and the United States is the home of the " scientific " tariff. It is therefore very interesting to have the opinion on tariffs of the Head of a country which is so much admired and envied by foreign Protectionists, themselves obliged still to wander in the wilderness of Free Trade. It will be remembered that Mr. Taft pledged himself in 1908 to reduce the tariff. The Payne Tariff which was subsequently passed has caused perhaps more discontent than any previous tariff, and Mr. Taft was informed pretty plainly by popular feel- ing that his pledge was regarded as yet to be redeemed. Be then established in August 1909 the Tariff Board, arguing that it was useless to modify the Payne Tariff till they all knew what they were at. So far he considered that they did not know ; the shouts of rival factions, all with personal interests at stake, were very confusing ; let them wait for the impartial information which would be supplied by the experts of the Tariff Board, The Tariff Board, in due course, issued a report on the cost of produc- tion in various foreign and American industries, and in accordance with it Mr. Taft has suggested some changes in the Payne Tariff. What he wants to do now is to justify the work of the Tariff Board, to advise that it should be permanently retained as an official institution, and to convince his countrymen that no tariff can conceiv- ably be framed fairly and intelligently without such a board. His argument to prove all this is one of the most instructive things we have ever read by a Protectionist. Let us see, with the help of several quotations, what he says.
Our first quotation contains the argument that American manufacturers do not know enough about their own busi- ness and require the help of independent outside investigators to set them right. In Free Trade countries the Protectionists say, "Don't pay too much attention to theorists. Trust the producer. It stands to reason that he knows more about his job than any one else." How curious, then, to find the Head of a Protectionist country exactly reversing the argument ! Mr. Taft was asked. how the producers themselves regarded the work of the Board.
"They seem highly pleased with it," ho said. "You see many of our American manufacturers have grown up in the business and are accustomed to old ways of keeping their accounts. They have been too busy running their mills and drumming up trade to pay very much attention to the sort of details which in these extremely modern times have :come to take the place of first im- portance. Then, too, they have learnt most that they know from their individual experience ; but the Tariff Board, by collecting data concerning the whole of a trade, enables every member of that trade to compare what he is doing with what his _contem- poraries are doing in the same field."
Mr. Taft has no better opinion of the ability of producers to tell exactly how they stand financially :— "Although they may be dimly conscious that something is askew in their figures they could not tell you positively whether they are making money, or losing, or only holding their own. Several such men have expressed their gratitude for what they have learned from the experts the Board has sent into their esta- blishments to examine their books. . . . That is the best possible test whether the Board's work has been practical in a strict busi- ness sense or only theoretical, as some of our outside friends would like to make it appear."
Mr. Taft's argument in favour of the Tariff Board amounts to this, that as it would publish its figures regu- larly manufacturers would he able to tell approximately in advance what sort of modifications would be required in the tariff. There would not be the staggering changes in the tariff as they have been introduced hitherto by a fresh party in power. Of such changes Mr. Taft says :— "Such overhaulings are always accompanied by a more or less violent convulsion of business, followed by a state of stagnation protracted through the whole period while the outcome continues at all in doubt. . • • At the committee hearings ex parts statements are presented by men pecuniarily interested in the several trades and industries which are liable to be affected by the proposed legislation. Everybody with an axe to grind either brings it to Congress himself or trios to influence that body through an agent on the ground. In every instance the length of time which has elapsed since the last revision and the changes of conditions in various lines of production and commerce in the interval rouse a general dread lees there be heavy increases of duty in one quarter or deep outs in another; and, unhappily, a feeling has widely prevailed that the decision where to make such increases and cuts would be reached, not by a calm consideration of the merits of each case, but by a log-rolling or back-scratching process. Such unsystematic ways of patching a tariff together open wide the avenues for perjury and other fraud, for special pleading, for appeals to the most sordid political motives, for the exercise of gross favouritism and the wreaking of petty revenges, and have given rise even to charges of bribery and investigations shadow- ing the good repute of men high in the councils of the nation. Is it a pleasant reflection that such an atmosphere is liable to continue surrounding our tariff legislation indefinitely P Free Traders have long contended that this log-rolling and back-scratching is inseparable from tariff-making. We do not think we have ourselves ever made the case out to be worse than Mr. Taft declares it to be. But he evidently thinks that all the log-rolling, back-scratching, axe- grinding, and all the opening wide of avenues to perjury and fraud can be brought to an end by the labours of his Tariff Board. How does he think this will come to pass ? We are absolutely at a loss to understand. He describes the Board as "a non-partisan bureau of information." Our own Board of Trade issues statistics on the conditions of trade throughout the world. The American Tariff Board could not do more. It would never be a legislative body. Does any one suppose for an instant that if a tariff had suddenly to be drawn up in a Free Trade country- the existence of a Government department supplying information as to the state of trade—or for the matter of that the existence of chambers of commerce and of private research bodies, like the Tariff Reform League here—would by some magical process save the legislators who had to frame the tariff from all the evil influences and causes of eiTor which now exist in America ? Mr. Taft is a man of happy temperament. He evidently and sincerely believes that this magical process would be performed. He thinks that the air would no longer be rent, as it was after the intro- duction of the Payne Tariff, "by accusations and recrimi- nations for thirty months continuously." He looks forward to "an orderly procedure "—all owing to the publication of the researches of the Tariff Board. These researches would "lead up to the passage and promulgation of the Act, and then either a general popular acquiescence in the result, or an opposition based on facts which could be proved from original sources if challenged." But who would not undertake when challenged to prove anything from trade statistics ? One would think that all these years Protectionists and Free Traders had not been proving precisely contradictory propositions with the help of the same figures ! If the Tariff Board continues its career in America it will have no more power than the writer of these lines to persuade the axe-grinders to put away their axes or the log-rollers to cease rolling their logs. Mr. Taft's interviewer became a trifle restless at last, as we gather, and asked, "Then you would condemn every tariff the country has had since the protective system was devised P" And Mr. Taft replied, "If we take for our standard of judgment the method of its construction—yes. We never have had one based on well-ascertained cost of production either here or abroad; every one has b3en put together hit-or-miss."
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