take a keener interest in tariff making because of the changes which have occurred in the latter-day world. These changes include:

(1) The development of newer countries and cheaper lands producing export surpluses which must find a market irrespective of price.

(2) Realization of discrimination against agriculture in former tariff bills. This discrimination has never been as severe as many advocates would have the public believe. For if one will examine the various tariff acts he will find that a consistent policy has been pursued of putting on the free list many of the important articles which farmers buy. There have been deviations from this policy, but in the main it has been pursued consistently by both parties.

(3) The realization by farmers of the unique position of America as an exporting nation of both raw and manufactured products. This situation complicates the problems of both farmers and manufacturers. It is a relatively simple matter for a country like England, where industry is the dominant source of revenue, to adopt trade policies that will benefit the nation as a whole. England can well afford to purchase the raw products of the colonies and of the Orient when there is a chance of selling back her manufactured articles. But the farmers of the United States are competing with the farmers of the newer countries where manufacturing has not yet developed. At the same time American manufacturers are competing with European manufacturers. In consequence our trade position is isolated and there is bound to ensue a struggle between American farmers and American exporters on any question where international trade possibilities are involved. This finds expression in conflicts over tariff legislation.

The farmer has good reason to be

lieve that the future will witness this urban versus rural conflict grow into an even fiercer struggle. The relative increase of urban population over rural population will make it more difficult as time goes on for farmers to secure their tariff demands. A tariff on agricultural products is an integral part of a national policy for the perpetuating of a self-sufficing farm population.

(4) The ability of science to substitute one article for another in the manufacture of products. This has produced a new form of competition which is best illustrated in the case of the fat supply. American farmers produce certain vegetable oil materials, the most important of which are cottonseed, flaxseed, peanut and soya bean. They are also producers of all of the animal fats. American fishermen are producers of important fish oils such as the menhaden and the cod liver oils, and some fishermen bring in whale oil.

Another illustration may be serviceable. In Europe soya bean oil is frequently used in the making of margarine. In this country soya bean oil competes primarily with cottonseed oil in the manufacture of lard substitutes. Soya bean oil also can enter into paint up to 30 per cent of the oil in the mix and thus competes with linseed oil. Soya bean oil competes with cottonseed oil as an important ingredient in the making of oleomargarine, but of late years imported coconut oil has become the most important vegetable fat used in this industry. Coconut oil also directly competes with butter in the confectionery and baking trades. Palm kernel oil bids fare to become the great competitor of coconut oil since it can be used for anything for which coconut oil is now used. Peanut oil, cottonseed

Most of these competitive vegetable oils come from the tropics of Asia and Africa with great possibilities of production in Australia and South America. In 1920, over ten billion pounds of vegetable oil materials went into international export trade. The potential supply of these oils is unlimited. On the other hand, the animal oil supply is relatively limited and the fish oil supply varies with the catch. The European program with respect to fats is fairly definite. England, France, Holland, Germany and Denmark are the chief manufacturers and the tendency of the Europeans is to bring to their plants the raw materials direct from these countries. Such a program gives them employment for their labor, manufacturers' conversion profits and the cattle feeds which are by-products of most

oil seeds. Japan is a large converter of oils; but the large Japanese firms which operate in these fats can easily shift their programs to exporting all raw materials should converting the oils prove to be less profitable than the other trade. This is made possible by their far-flung networks of trading organizations which collect the raw materials and bring them to ports.

Certain American manufacturers of fats would like to have the privilege of purchasing vegetable oil materials and oils duty free. That would enable them to displace large quantities of American produced oils, which in turn would be forced upon the European markets in competition with additional quantities of Orient oils already going there. The interest, therefore, of the American farmer in a tariff on oils lies in protecting his domestic market on oil seeds which has been threatened by the former huge imports from the Orient. It would be easy to trace the direct relationship of the price of cottonseed to the market price of cottonseed oil, and the relationship of the market price of cottonseed oil to the other major oils. Likewise it can be shown that there is a direct connection between the market price of coconut oil and the market price of butter and margarine.

Out of this situation we find the need of tariff protection to the producer of some commodities which already are exported in large quantities and whose prices are determined by international forces.

THE FORDNEY TARIFF BILL

The growing need for farm representation in tariff-making was reflected in the activities of certain farm organizations while the Fordney-McCumber Tariff Act of September, 1922, was in the making. By that time many farm groups were agreed upon the need of

duties being placed upon imported oils and fats. The dairy farmers had worked out a well-defined program with regard to dairy products. The wool producers and the egg and poultry men, the citrus and deciduous fruit growers had arrived at the duties they desired and the growers of cereal crops had given expressions. This made it possible for the permanent and temporary representatives of farm groups who were stationed in Washington to form a working committee among themselves and to make agreements. Those agreements were reflected in combinations which took place within the Congress. Most of the agricultural activity occurred after the House had passed the Fordney Tariff Bill. Grave inequalities in the bill caused the farm representatives to ask the Senate Committee on Finance to make needed changes. Very little difficulty was experienced in securing these changes with the exception of the paragraphs relating to vegetable oils. Here was staged a bitter contest with the Senate Finance Committee in the main being against the farmers and the Senate as a committee of the whole sustaining the position of its Finance Committee. When the matter came to final passage, however, the duties requested by the farm organizations on vegetable oils went through with the exception of the duty on copra, which largely neutralized the effectiveness of the duty on its derivative, coconut oil. This battle had many sensational features. While it was going on the oil markets of the United States reflected in a speculative way the varying fortunes of the contestants.

This tariff act gave more prominence to farm duties than any other act. It gave higher protective rates to organized industry than any other act. It also has produced more Federal revenue than any other act. Much criti

cism has been made of the act on the grounds that the protection given agriculture is outweighed by the protection given other industries. Intricate calculations have been made to sustain such criticisms. The writer does not purpose to deal with this phase of the subject beyond pointing out that most of these calculations have been theoretical and without enough fact basis to make them trustworthy. The important thing for farmers to remember in connection with this act is that they made great headway in establishing the principle of protection for agricultural products and secured a greater equalization of benefits than came from any previous tariff act.

FATAL "FLEXIBLE TARIFF PROVISION"

But there was a "fly in the ointment." The Tariff Act of 1922 contained a section which was destined to sow discord and perpetuate strife. It was Section 315, popularly known as the "flexible tariff provision." Within five months after the passage of the act, certain industrial interests were invoking this provision in efforts to take away from farmers some of the benefits the latter had wrung out of Congress. And so the scene of conflict has shifted from the halls of Congress to the home of the U. S. Tariff Commission; and the conflict itself has become continuous, expensive and wasteful.

To understand this provision it may be well to recall the object of a tariff. The government has one viewpoint. The industry concerned has its own viewpoint. The government lays a tariff to secure revenue and bring about national economic sufficiency; but in doing so it must always consider the effect of such tariffs upon its friendly relations with other countries. The special industry seeks a tariff, usually, (1) to equalize costs of production plus a fair profit for most of the American

producers, (2) to secure domestic price stabilization by preventing seasonal dumping, and (3) sometimes to obtain exorbitant profits at the expense of the consuming public. Other reasons may govern either the government or the industry, but the problem of determining a rate is usually the result of a compromise between these views; and the compromise represents the judgment of common sense. The basic reason for one rate may be to protect against trade discrimination, another may be to develop needed industries, a third may be to prevent dumping, but no single reason can underlie the making of all of the tariff rates. It would therefore follow that no single rule can be workable in making changes in the rates which were fixed by Congress.

In making a tariff, Congress also recognizes a relationship which certain commodities have to each other and the rates on these commodities are scaled. Consequently, to change the rate on one commodity without taking into consideration its relation to some others can have very serious effects upon an industry. Notwithstanding this wellknown principle in tariff making, Congress made a notable departure in the Act of 1922 by including Section 315. This departure was in part a compromise with critics who demanded that the tariff be taken out of politics. In part it was a compromise with enthusiasts who desired to have the duties laid on the basis of their wholesale market value in America instead of in the country where they were produced.

The flexible tariff provision gives the President the right to make changes in the tariff to the extent of either raising or lowering the duties by 50 per cent. It provides that the necessary facts governing a change in the duties shall be ascertained by the U. S. Tariff Commission and the President shall make his decision only after the Commission