No part of our tariff has been more scathingly denounced in Congress
and by the press than what is known as “Schedule K.” No schedule that
has received half the attention bestowed on Schedule K has managed
to withstand the fierce onslaughts of the united tariff reformers of
both political parties so successfully as the schedule covering wool
and its manufactures. Repeatedly raised during the Civil War, when
the urgent need of additional revenue was the sole motive of frequent
tariff revision, slightly reduced in 1872 and 1883, scaled down still
more in the Democratic Wilson act of 1894, it managed in the intervals
between these acts to recover lost ground and, since 1897, to eclipse
all previous records for high-tariff climbing.
The secret of this exceptional record in our tariff history is not far
to seek. It lies in the peculiar interlacing of interests between the
sheep-grower of the West and the manufacturer of the East, which has
no parallel in other industries. Most of the farm products are either
left on the free list, like cotton, or, if protected by a duty, are
not affected by it. Thus we have duties on corn, wheat, oats, rye,
and meat, but no one familiar with the situation has ever seriously
maintained that the duty has been more than a convenient embellishment
of our tariff for the use of campaign spellbinders in farm districts.
As long as we produce more cereals, meats, and other farm products than
we consume, and send the surplus to the world’s markets, the prices of
these products, under free competition at home, will be regulated by
conditions of world supply and demand, leaving the duties a dead letter
on the statute-books. Wool is a conspicuous exception in the list of
American farm products. After half a century of exceptionally high
protection, fixed by the beneficiaries of the tariff themselves, the
American wool-grower still falls short in his output to the extent of
more than one third of the domestic demand. The deficit must be covered
by importation from foreign countries, the price of imported wool being
enhanced by the amount of the duty. Under these conditions the duty
on raw wool acts as a powerful lever in increasing the price of the
domestic wool furnishing the remaining two thirds of our consumption.
No wonder that the wool-grower has always been an enthusiastic advocate
of a duty on raw wool.
On the other hand, the New England manufacturer, himself a believer
in high duties on woolen goods, has been rather skeptical as to the
merits of a duty on a raw material of which we have never been able
to produce enough, and are producing an ever diminishing share. Hence
the New England woolen manufacturer has been as enthusiastic for free
wool as the New England shoe manufacturer is for free hides, without
losing at the same time his faith in high duties on woolen goods.
However, the manufacturers discovered at an early stage in the game
that unless they were willing to acquiesce in a duty on their raw
material, the representatives from the wool-growing States in Congress
could not see any advantage in high duties on woolens. This is what led
to the powerful combination of these two great interests to which the
late Senator Dolliver, in his memorable speech in the Senate in the
extra session of Congress in 1909, referred as “that ceremony when the
shepherd’s crook and the weaver’s distaff were joined together in the
joyous wedlock which no man has been able to put asunder.” At that
joint meeting of the representatives of wool-growers and woolen-cloth
manufacturers held at Syracuse in December, 1865, when it was supposed
that, with the disappearance of the need for extraordinary revenue, the
war duties would be reduced, “it was agreed between them,” in the words
of the late John Sherman, who had a great deal to do with the shaping
of the tariff, “after full discussion, that the rates of duty reported
by the Senate bill should be given them, and they were satisfied with
them, and have never called them in question.”
It remained for a long-suffering public finally to call those rates
in question. And when a Republican President called Congress in
extraordinary session in March, 1909, to fulfil the pledges of his
party for a downward revision, he found, to use his own words, uttered
in the now famous Winona speech, that “Mr. Payne, in the House,
and Mr. Aldrich, in the Senate, although both favored reduction in
the schedule, found that in the Republican party the interests of
the wool-growers of the far West and the interests of the woolen
manufacturers in the East and in other States, reflected through their
representatives in Congress, was sufficiently strong to defeat any
attempt to change the woolen tariff, and that, had it been attempted,
it would have beaten the bill reported from either committee.”
However, the President thought that Schedule K should receive the
attention of Congress after the newly created Tariff Board had made a
thorough investigation of the woolen industry. Taking the President
at his word, the country waited two years more with great impatience
for the result of the findings of his board. But once more was the
country baffled by the united beneficiaries of Schedule K in its
efforts looking to the lowering of the rates. When a majority in
Congress composed of Democrats and Republican insurgents laid aside
party differences in a common effort to reduce the woolen duties, the
same leaders of whose tactics President Taft had complained were able
to persuade him that the revised schedule was so much at variance
with the findings of the Tariff Board as to justify his veto. Thus
the country is facing the new situation in the extraordinary session
of the Sixty-third Congress, with Schedule K still proudly holding
the fort on the pinnacle of the American tariff wall. The present is,
therefore, just the time for an analysis of the situation in which the
claims of the conflicting interests may be reviewed in the light of now
well-established facts.