After enjoying for nearly half a century a protection averaging
forty-five per cent. and amounting to from one hundred to five hundred
and fifty per cent. on the cheaper grades of wool, the American
wool-grower is not able to satisfy as great a part of the national
demand for his product as he was at the time of the Civil War. During
the sixties we had to depend upon imports to the extent of little over
one fourth (26.8 per cent.) of our total consumption of wool. To-day
nearly one half of our needs have to be covered by foreign wools (about
forty-five per cent. in 1910). When wool was placed on the free list
under the Wilson Bill in 1894, it was charged that the abolition of the
duty was responsible for the increase in our imports. But our growing
dependence on imported wool despite the restoration of the duty under
the Dingley Act, in 1897, goes to show that the tariff is no remedy for
the shortage.
The wool-grower argues, however, that wool can be produced so much
cheaper in Argentina and Australia that, if admitted free of duty
to the United States, it would bring about the total disappearance
of the American wool industry. The latest available figures given
in the report of the Tariff Board show a world production of about
2,500,000,000 pounds of wool, of which the United States produces
about one eighth. The world supply would furnish less than a pound of
clean wool per head of population, not enough to give each of us more
than one suit in three years. Of course the latter estimates are only
approximate, but they are not far from the truth. If it were not for
the plentiful admixture of cotton and shoddy to the annual stock of new
wool, there would not be enough wool to clothe the people of the earth.
Under these conditions, there is no danger of the world failing to make
use of American wool. Any considerable curtailment in the production
of American wool would have the tendency of raising the world’s price
of wool to such an extent as to offer renewed encouragement to the
American wool-grower. So much for that. But is it true that it costs so
much to raise wool in the United States?
The Tariff Board reported that the average cost of production of wool
in this country is about three times as high as in Australia and
about double that in South America. On that basis our present duty is
ridiculously low, and it is a wonder that our wool industry has not
long gone out of existence. What is the secret of its miraculous escape
from total extinction?
The Tariff Board average represents widely different conditions
of production. A large part of the wool grown in this country--no
less than eleven per cent. of the wool covered by the board’s
investigation--is raised without any cost whatever to the wool-grower;
in fact, he gets “a net credit,” to quote the board, or a premium,
with each pound of wool coming from his sheep’s back. This is true of
sheep-growers who are employing up-to-date methods in their business
and have substituted the cross-bred merino sheep for the old-type pure
merino. The cross-bred sheep is raised primarily to meet the enormous
and rapidly growing demand for mutton. The price realized from the sale
of mutton is sufficient not only to cover the entire expense of raising
the sheep, but leaves the farmer a net profit, before he has sold a
pound of his wool, which has become a by-product with him, and the
proceeds from which represent a clear gain. It will be easily seen that
the up-to-date mutton-sheep breeder can do very well without any duty
on wool.
The mutton-sheep has come to stay, because we are fast getting to be
a mutton-eating people. Despite the enormous increase in population,
fewer cattle and hogs are being slaughtered to-day than twenty years
ago, while the number of sheep killed has more than doubled in the
same period. In 1880, for every sheep slaughtered at the Chicago
stock-yards, four heads of cattle and twenty-one hogs were killed. In
1900 the number of sheep received at the stock-yards exceeded that of
cattle, and in 1911, for every sheep slaughtered, there was only one
half of a beef carcass and one and one quarter of a hog. The rapid
increase in the demand for and supply of sheep out of all proportion
to other animals is in itself the best refutation of the cry that
sheep-growing is unprofitable. In his recent book on “Sheep Breeding
in America,” Mr. Wing, one of the foremost authorities on the subject
in this country, who investigated the sheep-breeding industry for the
Tariff Board in every part of the country where it is carried on, as
well as abroad, says that sheep-breeding is profitable despite the
woefully neglectful manner in which it is conducted in the United
States. Unlike some United States senators who have grown rich in the
business of raising sheep, Mr. Wing remains cheerful at the prospect
of a reduction of wool duties, and even their total abolition has
no terrors for him. His attitude is very significant, when it is
considered that he is a practical sheep-grower, still engaged in that
business, in addition to writing on the subject, and that all his
interests, both business and literary, are intimately wound up with the
sheep industry.
Not all growers, it is true, have adopted modern methods. The report
of the board shows five additional groups of farmers whose cost of
production of wool varies from less than five cents a pound to more
than twenty. Accepting these figures at their face-value, although they
are only approximate, and assuming that a raw material like wool of
which we cannot produce enough to satisfy our needs is a proper object
of protection, the question still remains whether the tariff is to be
high enough to afford protection to every man in the business, even
when the results obtained by his neighbors show that he has his own
inefficiency or backwardness to blame for his high costs, or whether
the duty is to measure the difference between the cost of production
of our efficient producers and that of their foreign competitors. If
the former be taken as a standard, then the present duty on raw wool is
not sufficiently high, and should be greatly increased; if the latter
be accepted as a basis in tariff-making, then, there being no cost
in raising wool on up-to-date American ranches, there seems to be no
valid reason for any duty, except possibly one of a transitory nature,
to allow sufficient time to the sheep-growers who need it to adjust
themselves to modern conditions of business.