On the theory that all wool in this country is enhanced in price to the extent of the duty,--a theory, by the way, which every protectionist stoutly combats when discussing the effect of the tariff on domestic prices,--the manufacturer of cloth is allowed not only a protective duty of from fifty to fifty-five per cent. of the value of the imported cloth, but, in addition to that, a “compensatory” duty on account of the duty on raw wool. This compensatory duty is fixed at forty-four cents per pound of cloth on most of the cloths imported into this country.
It is based on the assumption that it takes four pounds of raw wool to make one pound of cloth. This compensatory duty adds to the discrimination against the woolen manufacturer in favor of the worsted manufacturer in several ways.
In the first place, as already explained, the wool used by the worsted manufacturer does not shrink as much as that which goes into the cloth produced by the woolen manufacturer. Yet the compensatory duty is fixed at a uniform rate for both cloths, which is equivalent to giving to the worsted manufacturer about twice as much “compensation” as to his less fortunate rival, and giving him, in most cases, compensation for a greater loss than he actually sustains.
In the second place, the law takes no account of the admixture of materials other than wool of which the cloth is made. A cotton worsted may contain cotton to the extent of one half or more of its total weight, yet the worsted manufacturer is allowed forty-four cents a pound “compensation” on the entire weight of the cloth. Mr. Dale, editor of “The Textile World Record,” quotes a typical instance of a cotton worsted. In turning out 8750 pounds of this cloth, 3125 pounds of raw wool were used, the remainder being cotton. Assuming that the price of the wool in this country was enhanced to the extent of the duty of eleven cents a pound, the manufacturer would be entitled to a compensatory duty of 3125 times eleven, or $343.75. But the law, on the four-to-one theory, allows a compensatory duty of forty-four cents per pound of cloth, or 8750 times forty-four, which is equal to $3850. The manufacturer is thus granted an extra protection of more than three and one half thousand dollars in the guise of compensation for the duty on wool which never entered the cloth.