THE STATE OF THE AMERICAN WOOL INDUSTRY
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.