The present tariff rates supply the National Treasury with well over
$600,000,000 of annual revenue. Yet, about 65 per cent of our imports come
in duty free. Of the remaining 35 per cent of imports on which duties are
laid about 23 per cent consists of luxuries and agricultural products, and
the balance of about 12 per cent, amounting, to around $560,000,000 is made
up of manufactures and merchandise. As no one is advocating any material
reduction in the rates on agriculture or luxuries, it is only the
comparatively small amount of about $560,000,000 of other imports that are
really considered in any discussion of reducing tariff rates. While this
amount, duty free, would be large enough seriously to depress many lines of
business in our own country, it is of small importance when spread over the
rest of the world.
It is often stated that a reduction of tariff rates on industry would
benefit agriculture. It would be interesting to know to what commodities it
is thought this could be applied. Everything the farmer uses in farming is
already on the free list. Nearly everything he sells is protected. It would
seem to be obvious that it is better for the country to have the farmer
raise food to supply the domestic manufacturer than the foreign
manufacturer. In one case our country would have only the farmer; in the
other it would have the farmer and the manufacturer. Assuming that Europe
would have more money if it sold us larger amounts of merchandise, it is
not certain it would consume more food, or, if it did, that its purchases
would be made in this country. Undoubtedly it would resort to the cheapest
market, which is by no means ours. The largest and best and most profitable
market for the farmer in the world is our own domestic market. Any great
increase in manufactured imports means the closing of our own plants.
Nothing would be worse for agriculture.
Probably no one expects a material reduction in the rates on manufactures
while maintaining the rates on agriculture. A material reduction in either
would be disastrous to the farmer. It would mean a general shrinkage of
values, a deflation of prices, a reduction of wages, a general depression
carrying our people down to the low standard of living in our competing
countries. It is obvious that this would not improve but destroy our market
for imports, which is best served by maintaining our present high
purchasing power under which in the past five years imports have increased
63 per cent.