to efficiency and economic conditions which no tariff maker can disregard; but the use of it removes the task of rate making from the field of mathematics to that of personal judgment. Rate making becomes, then, no longer the work of a statistician, but the work of those with authority to say what the policy of the country is to be regarding a particular industry. An example may make this point clear.

The woolgrowing industry in the United States presents to the legislator a very complex problem-the problem of what parts of the industry should be preserved and what parts, if any, should be eliminated by foreign competition. Three distinct divisions of the woolgrowing industry exist in the United States: (1) The fine-wooled merino sheep, chiefly in Ohio and the neighboring States, which can not exist unless at least the present tariff rates are maintained; (2) the crossbred flocks which would exist even under free wool; and (3) the flocks of the ranch States of the far West, the amount of protection required for them being a matter of debate. These facts present a problem of what is economically desirable, and the conclusions reached by study of them will depend primarily upon the student's economic assumptions.

Those with a leaning toward free trade, who approach and study the part of the Tariff Board report treating of woolgrowing, can with ease construct an argument in favor of free wool. This conclusion is reached by studying the efficiency of woolgrowing in the United States as compared with that in Australia and England. Cost figures are not ignored; they are accepted as the cost of producing wool in the United States under the existing conditions. Such students advocate changing these conditions and thereby reducing the costs.

In pursuing their argument they consider, in the first place, the sheep in the Eastern States. They claim that the high cost of production of fine merino wool, as shown by the Tariff Board, proves, not that high protection is needed, but that it is economically unprofitable to maintain in the United States the fine-wooled merino sheep; that the crossbred flocks, which produce wool at a negligible cost, are peculiarly adapted to the farming conditions of our Eastern States; and that if the tariff on wool were removed, the owners of the fine-wooled flocks would be forced to cross their ewes with the mutton breeds, and by this means the woolgrowing industry of the

East would gradually become a profitable supplement to general farming, as it is in Great Britain, and not a highly specialized industry, as it is to-day in parts of Ohio and Michigan.

Continuing their argument these advocates of free wool turn to the great flocks of our western ranges and they contrast the breeding, pasturing, and management of the flockmasters of Australia, New Zealand, and Argentina with the conditions in our West. They claim that if the methods of the former were adopted in this country, the costs of producing wool would be reduced so that our flockmasters could compete successfully with all the world without the tariff. They admit that free wool would force a readjustment in the West as well as in the East, but they say it would place the industry on a much sounder economic foundation.

On the contrary, the advocates of high protection can argue from the part of the Tariff Board's report treating of woolgrowing that the rate on merino wool should be even higher than 11 cents per pound. It is said that very fine merino wools are becoming more and more scarce each year with the inroads which the mutton sheep are making upon the merino flocks of the world; that unless the source of supply of these wools is maintained certain phases of wool manufactures can not continue; and that this source of supply can not be preserved unless a high level of protection is maintained. Very plausible arguments can also be made in favor of the existing status of the woolgrowing industry because a lowering of the duties would inevitably cause suffering both among the sheep owners and those employed in the industry.

The legislator who conscientiously endeavors to consider impartially the arguments of the free trader and the protectionist has hard questions to answer. Shall Congress, for the sake of preserving a comparatively small number of fine merino sheep, burden the manufacturer directly and the consumer indirectly with a duty adequate to protect the grower with the highest costs? Or shall Congress say that, since the cost of producing cross-bred wool is negligible, it would be better to force all woolgrowers in the United States to produce this kind of wool by having free wool, as the United Kingdom has with her 31,000,000 sheep? Or shall Congress take a middle course and preserve such parts of the industry as are consistent with

a moderate duty? Any of these questions might be answered affirmatively from the report of the Tariff Board; but, whatever may be the correct attitude to assume toward this great industry, all will surely agree that no board, however wise, should determine the answer to the question. This question involves the problem of the Nation's policy toward its industries; and, as long as there are political questions, the question of the preservation or destruction of industries will be, and most men would say ought to be, one of them. The subject is discussed somewhat at length here in order to show the nature of the efficiency problem. It must be clear that statistics are of little value in tariff making unless accompanied by sound judgment. "Without judgment," Mr. Emery says, 4" statistics are useless; without statistics, judgment is unreliable."

Having pointed out what would seem to be both political and economic obstacles to delegating to an executive board general power to recommend rates, a partial solution will be suggested.

If it be admitted that a board be desirable, one of its powers would, of course, be the accumulation of information on all phases of the tariff controversy. On the basis of this information Congress, having first laid down the political and economic premises on which the board was to proceed, might request it to submit a set of rates based on the premises laid down. Such questions as these might be submitted to the board for answer: (a) What would be the immediate and ultimate effect of free wool upon the domestic industry; upon the consumer? (b) What rate of duty on raw sugar would eliminate the canegrowing industry of the South and still preserve the beetsugar industry? (c) Assuming the theory of tariff for revenue only to be desirable, what set of rates on wool and wool manufactures would most equitably raise $50,000,000 per annum? (d) Assuming that the tariff should equal the difference in cost of production between the United States and foreign countries and that the status quo of the woolgrowing and wool-manufacturing industries is to remain substantially unchanged, what should the rates in Schedule K be? There seems to be no reason why a board could not give answers to these and similar hypothetical questions. This plan would leave to the legislative branch of the Government not only the 4 H. C. Emery, "The Tariff Board and its Work." Speech delivered at Chicago, Dec. 3, 1910, p. 11.

power of fixing the premises upon which the board was to proceed, but also the privilege of finally accepting or rejecting the recommendations of the board; and still it would leave a very useful field of work for an executive board or bureau.

For the purposes of this article it is assumed that Congress desires an answer to the last of the questions asked above and that the facts to be used are those found in the Tariff Board's

report on Schedule K. This question takes for granted two facts: (1) That such protective duties should be levied "as will equal the difference between the cost of production at home and abroad," and (2) that the status quo of the woolgrowing and wool-manufacturing industries should remain substantially unchanged - that is, the question of efficiency is to be practically disregarded. Both of these premises are debatable, and the writer, by propounding them, in no way commits himself either to their support or opposition. Plausible arguments can be made for or against both propositions. It is necessary, however, before the discussion can proceed, to assume some of the varying factors in the tariff problem to be constant, and there are some reasons why the premises chosen are the most desirable in studying the report of the Tariff Board.

The most important reason is the nature of the Tariff Board. The board was a by-product of a protective tariff bill, the pet of a President committed to protection; and it was requested to apply the rule of protection contained in the Republican platform of 1908. Its founders undoubtedly expected it to consider the protective system beyond controversy. It began work with a presumption, therefore, against its nonpartisan attitude. If it had been composed of political opportunists, it might easily have become a mere tool of the protective interests; or if it had started out like the so-called tariff commission of 1882 to hold hearings, the personal would have overshadowed the scientific element and the board would have been little more than a poor substitute for the Ways and Means Committee; but the members of the board3 realized that

5 At the time of the publication of the report on Schedule K the members of the Tariff Board were: Henry C. Emery, professor at Yale; Alvin H. Sanders, editor of the Breeders' Gazette, Chicago; James B. Reynolds, formerly Assistant Secretary of the Treasury; William M. Howard, formerly congressman from

legislators needed, not more comments and figures compiled by interested parties, but a careful scientific investigation of each schedule of the tariff, and this they began carefully to make. While considering the cost of production one of the phases of the problem deserving study, they did not limit their study to it, and in the report many other phases of the question are carefully considered which have been obscured by the political significance attached to the cost of production. The work of the Tariff Board, lamentably brief as it was, laid the foundation for a scientific investigation of the tariff; it broke the grip on legislation which a few interested parties, by their knowledge of the tariff and by personal influence, had maintained, and it proved conclusively that the Almighty did not lodge all wisdom in the committee rooms of Congress.

It remains true, nevertheless, that in the public mind the work of the Tariff Board and the cost-of-production theory of the Republican platform of 1908 are inseparable and for that reason this theory is given prominence in this article.

A subject which can only be touched upon in this article is the relative value of ad valorem and specific duties. In this country, as a rule, the advocates of revenue tariffs have favored the former; the advocates of protection, the latter. The Tariff Board made some very pertinent observations on this subject and stated that

from the point of view of protecting the domestic manufacturer by equalizing the difference in cost of production at home and abroad by means of tariff duties, the system of specific duties is the natural and logical method.

It has been said that a flat specific rate bears unequally upon those who buy wool, because it does not adjust itself to a wide range of prices. This is true. But it is equally true that a flat ad valorem rate gives very unequal protection; 30 per cent on 20-cent wool is much less protection than 30 per cent on 40-cent wool and still it may be that 20-cent wool requires as much protection as 40-cent wool. This of course is only another case of the necessity of determining your premises

Georgia; and Thomas W. Page, professor at University of Virginia.

6 Report of the Tariff Board on Schedule K, 62d Cong., 2d sess.; H Doc. No. 342, p. 709.