“SCHEDULE K”
THE EFFECT OF THE TARIFF
ON THE WOOL-GROWER, THE
MANUFACTURER, THE WORKMAN,
AND THE CONSUMER
BY N. I. STONE
Formerly Chief Statistician of the Tariff Board
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.”