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.
MILL EFFICIENCY
THE same general considerations which apply to raw wool hold good as to its manufactures. There is no such thing as an average cost of production of woolen cloth in the United States. The enormous variety of cloths produced in the same mill proved an insuperable obstacle to the Tariff Board, which gave up the attempt to ascertain the actual cost of production. Instead, it undertook to obtain estimates from manufacturers of the cost of producing cloths, samples of which were furnished to them by the board. Assuming that all the estimates were made in good faith and that the agents of the board were all competent and equal to the task of checking them with the meager means at their command, the average costs even by the board represent widely differing conditions of industrial efficiency.
Industrial efficiency depends on a great many conditions an adequate discussion of which would take in far afield. One fact, however, stands out preëminently, and must be emphasized until it is seared into the consciousness and conscience of the American citizen, and that is that industrial efficiency, which is synonymous with low-labor cost, does not mean, or depend upon, low wages. Yet the lower wages in Europe constitute the stock argument in every plea for protection that is dinned into the ears of Congress.
Not being in a position to make a comprehensive inquiry into the efficiency of American mills in the woolen industry, the Tariff Board made a study of labor efficiency in the various process of wool manufacture in connection with output and wages paid. Almost invariably the mill paying higher wages per hour showed lower costs than its competitor with lower wages.
Thus, in wool scouring the lowest average wages paid to machine-operatives in the thirty mills examined was found to be 12.16 cents per hour, and the highest 17.79. Yet the low-wage mill showed a labor cost of twenty-one cents per hundred pounds of wool, while the high-wage mill had a cost of only fifteen cents. One of the reasons for this puzzling situation was that the low-wage mill paid nine cents per hundred pounds for supervisory labor, such as foremen, etc., while the high-wage mill paid only six cents. Apparently well-paid labor needs less driving and supervising than low-paid labor.
In the carding department of seventeen worsted mills the mill paying its machine-operatives an average wage of 13.18 cents per hour had a machine labor cost of four cents per hundred pounds, while the mill paying its machine-operatives only 11.86 cents per hour had a cost of twenty-five cents per hundred pounds. This was due largely to the fact that the lower-cost-high-wage mill had machinery enabling every operator to turn out more than 326 pounds per hour, while the high-cost-low-wage mill it turning out less than forty-eight pounds per hour.