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It is estimated from the import and census statistics, that under the proposed lower duties the imports for the first 12 months of all the articles provided for in paragraph 13 of the bill H. R. 12812, including the articles enumerated which are transferred from Schedule J, would amount to about $1,914,000, on which duties at the proposed rates would be $386,900. On the basis of the imports of 1910 the duties collected under the lower rates would amount to $164,153.
COTTON TABLE DAMASK.
Paragraph 14 of the bill H. R. 12812 provides for cotton table damask and manufactures thereof. This paragraph follows exactly the phraseology of the corresponding paragraph (331) of the act of 1909, and provides that the articles in question shall be dutiable at 25 per cent instead of at 40 per cent, as at present, the proposed reduction being over one-third of the present rate. It is estimated that under the lower rate imports of the articles will be increased and that the duties collected therefrom at the lower rate will amount to about $195,600, or only about $30,000 less than the amount collected on the same imports in 1910. On the basis of the imports of 1910, the duties collected at the lower rate would amount to $140,987.
TOWELS, DOILIES, BLANKETS, SHEETS, ETC. Paragraph 15 of the bill H. R. 12812 is new and provides that "on towels, doilies, bath mats, quilts, blankets, polishing cloths, mop cloths, wash rags, sheets, and batting, any of the foregoing made of cotton or of which cotton is the component material of chief value," the duty shalı be 25 per cent ad valorem. The articles enumerated are apparently the most important of the large group of miscellaneous articles now being imported under articles of cotton cloth and manufactures of cotton not specially provided for. In the fiscal year 1909 the imports of this group of miscellaneous articles not otherwise provided for amounted in value to $1,204,557.63. In the fiscal year 1910 the imports of these articles not otherwise provided for amounted to $1,813,433.70. These articles were dutiable at 45 per cent under the provisions of paragraph 332 of the act of 1909, while under the bill H. R. 12812 articles not otherwise provided for will be dutiable at 30 per cent. However, it is desired to have the towels, doilies, bath mats, etc., as enumerated in paragraph 15, specially enumerated and dutiable at a slightly lower ratë than as provided in paragraph 16. As all of the articles enumerated in paragraph 15 are necessities in every home, the rate of 25 per cent is a reduction from 45 per cent, or over one-third. It is estimated that for the first year under the lower rate the imports would amount to $751,000 and the duties collected therefrom to about $187,800. It is not practicable to segregate these articles from the imports of 1910, but it is estimated, from a comparison of the imports before and after their inclusion in the provisions of paragraph 332 of the act of 1909, that about $500,000 worth were imported. On this basis the duties collected at the lower rate would amount to about $125,000.
ARTICLES NOT OTHERWISE PROVIDED FOR.
Paragraph 16 of the bill H. R. 12812 is exactly the same as the corresponding paragraph (332) of the act of 1909, except that the rate is made 30 per cent ad valorem instead of 45 per cent as at present. It is estimated that this reduction of over one-third of the existing rate will result in increased imports of the wide assortment of miscellaneous articles dutiable under the paragraph. As has been stated, a number of articles now being imported under the corresponding paragraph of the act of 1909 are specially provided for in paragraph 15 of the bill H. R. 12812. The imports of these articles will then no longer be included in the imports reported under paragraph 16. As the articles provided for in paragraph 16 can not be identitied, it is not possible to estimate the present or probable future percentage of imports to domestic consumption. However, from a study of the import statistics, it is estimated that the value of the imports of the articles left dutiable under paragraph 16 would amount to about $1,752,600, and yield duties of about $525,800. On the basis of the imports of 1910, the duties collected at the lower rate would amount to $394,030.
THE BURDEN OF DUTIES ON COTTON GOODS
It is important to consider how much the American people may be paying annually, through their consumption of cotton goods, on account of the existing tariff rates. This is a matter of much interest in comparison with the revenue received by the Government from the duties. A statement compiled from the census statistics of 1910 shows that in that year the total domestic consumption of cotton manufactures (under that classif cation in the census), was in value $658,936,932. This was made up of domestic production (at mill values) with imports added and exports deducted. The domestic consumption of hosiery and knit goods (under that classification in the census) in 1910, similarly computed, was $206,118,313. It is estimated that 87 per cent of these were cotton goods, as 87 per cent of the material entering into their manufacture was raw cotton and cotton yarn, according to the census statistics. With the addition of this proportion of hosiery and knit goods, the entire domestic consumption of all manufactures of cotton in 1910 was, apparently, $839,241,675 in value (mill, import, and export values). This includes the articles provided for in Schedule I of the tariff law as well as laces, lace window curtains, nettings, embroideries, etc., of cotton in Schedule J.
On the imports of 1910 of all manufactures of cotton the average ad valorem equivalent of the duties collected was 56.04 per cent; in 1909 it was 53.41 per cent. If it is assumed that only about onehalf of the rate of duty is actually effective, that is, increases domestic prices, and, of course, the duty is only protective in proportion as it really does raise domestic prices, then it may be estimated that the domestic consumption is increased in price to the people by about 25 per cent. Of course, the values on which the tariff rates act are wholesale selling values, which are higher than mill values. Nevertheless, taking the figures of domestic consumption based on mill
for 1910. This would indicate that the American people pay annually about $200,000,000 more for their cotton goods by reason of the present tariff rates. The total amount of duties collected on all these manufactures imported in 1910 was $38,077,844; in 1909, $33,060,401. Hence, it would appear that the people pay from $5 to $6 for every $1 paid into the Treasury in duties on cotton manufactures.
SCHEDULE I AND THE REVENUE.
From the viewpoint of revenue Schedule I is not one of the most important schedules of the tariff. In 1910 it produced only 4.17 per cent of the total tariff revenue of that year. Only four schedules produced a smaller percentage of the total. These were Schedule B (earths, earthenware, and glassware), producing 3.82 per cent; Schedule A (chemicals, oils, and paints), producing 3.39 per cent; Schedule M (pulp, papers, and books), producing 1.62 per cent; and Schedule D (wood and manufactures of wood), producing ninetyeight one-hundredths of 1 per cent. Schedule I has produced a slightly larger percentage of the total tariff revenue in prior years, the percentages being 5.96 in 1895 and 5.93 in 1896 under the rates of the act of 1894. In 1894 it produced 5.75 per cent under the McKinley rates and in 1908 4.91 per cent under the Dingley rates. Our domestic consumption of cotton goods is large and increasing. Our domestic consumption of cotton manufactures increased from $4.61 in 1900 to $7.16 per capita in 1910; and of hosiery and knit goods (of which about 87 per cent are now made of cotton) from $1.33 in 1900 to $2.24 per capita in 1910. The percentage of imports to domestic consumption, however, is comparatively small. It is estimated that in 1910 the imports of all manufactures of cotton were only about 8 per cent of the domestic consumption. Our manufacturers are well equipped to supply the domestic market, and should gradually become better equipped to supply foreign markets.
Under these circumstances the most important feature to be kept in mind in revising Schedule I in the interest of the welfare of the general public is that the rates be made truly competitive as far as possible; that is, that they be made low enough to permit potential competition from imports for the sake of natural and proper regulation of domestic prices. Such competition, even if actual imports are not materially increased, will be an important service to the people, affect domestic market prices, and encourage increased consumption and production by making more normal the conditions of demand and supply. It is believed that the rates provided for in the bill H. R. 12812 are more fairly competitive than have been enacted or proposed in any other tariff bill, and that these rates, if enacted, would effect a substantial economy in the cost of living of all the people, in comparison with which the small apparent loss in revenue would be a matter of minor importance.
The total of the estimates of imports and revenue from all the articles provided for in the bill indicates probable imports, in the first year of its operation, to the amount of about $39,163,800 and duties therefrom to the amount of about $10,599,000. This is to be compared with $28,417,441.39 in imports for 1910, and $13,673,801.20 in duties. The total of the estimated revenue from the bill H. R. 12312 falls below the revenue received in 1910 from imports of the same articles by about $3,000,000.
THE FORM AND PHRASEOLOGY OF THE BILL.
In frarning the bill H. R. 12812 the purpose of the committee has been to conform as closely as possible to the phraseology of the act of 1909, and to change the wording and classifications of Schedule I only where actually necessary to eliminate unsatisfactory provisions and unnecessary complexities. The bill is a special tarifi bil. and, if enacted, will be an independent art. It leaves undisturbed the administrative provisions of the act of 1909. The warehouse provision (sec. 2) conforms to the corresponding provision of the act of 1909 (sec. 29), except that the provision for lerying duties based on weight at the time of the entry of the merchandise is omitted since the bill H. R. 12812 provides for no duties based on weight. Under this warehouse provision, as in the present act, articles in warehouse when the bil H. R. 12812 shall take effect, on which duties have not been paid, shall be subjected to duty when withdrawn as if they had been imported after the date of effectiveness of the act; but articles in warehou je on which duties have been paid and a periit of delivery issued shall be subject to the duties in force prior to the enactment of the new bill.
OSCAR W. UNDERWOOD, Chairman,