facturers, and sharper conduct of the industry by the former. A more incisive reduction of the duty on woolens, bringing it much below the 35 per cent rate, might indeed lead to far-reaching changes; but nothing of the kind has been done, and is not in prospect for the visible future.

On cotton goods the reductions are not dissimilar in character and in effect from those in the ad valorem rates on woolens. The change on the statute book is great; the figures go down sharply. But in this case also the consequences in trade and industry are much less considerable than in the figures.

The rate on the lowest counts of cotton yarns is but 5 per cent. On the cheapest grade of unprinted and unbleached cotton cloths, it is 7 per cent. For finer grades, the rates rise progressively, the highest on yarns being 25 per cent, and on plain cloths 27 per cent. An additional duty of 21 per cent is imposed in all cases on cloths which are bleached, dyed, printed, or mercerized. The maximum duty on cloths is thus 30 per cent. On ordinary hosiery, the rate is 20 per cent; but on hosiery that is fashioned and shaped comparatively high duties are retained, 30 per cent if the value is 70 cents per dozen or less, 40 per cent if the value is between 70 cents and $1.20, 50 per cent if the value exceeds $1.20. This is one of the comparatively few cases in which the fence system (abrupt steps in the rate of duty, when goods get beyond a given value point) is retained. Cotton knit goods, in general, are dutiable at 30 per cent, and the dragnet clause (manufactures of cotton not otherwise provided for) has 30 per cent. Cotton gloves, which had been affected by one of the jokers of 1909, are dutiable at 35 per cent.

These figures, to repeat, make very radical changes from those previously on the statute book. But, to repeat once more, on most of the goods the reduction will be nominal. The cheaper grades of cottons are produced in the United States as cheaply as in any country. Barring occasional specialties, no such goods are imported. They are exported from the United States, not imported. Goods of medium grade, tho not exported, would hardly be imported in considerable quantities even under complete free trade; and the ad valorem duties now imposed will continue to keep the domestic market securely in the hands of the American manufacturers. It is the finer grades of goods that are most likely to be affected. The importation of these had continued even in face of the previous high duties, and is likely to be stimulated by the lower rates. It is these also which had been most affected by the specific duties of the earlier tariff acts. The adjustment of the specific duties had been undertaken at the behest of the domestic manufacturers, or at all events at their suggestion, and had been so devised as to impede most effectively the competition of the foreign manufacturers. No doubt in most of these cases the duties were needlessly high. They were prohibitory, as they were in the case of woolen goods; and the continuing importations consisted largely of specialities which held their own in the market notwithstanding prices much enhanced by the duties. In the case of the finer cotton goods, as in that of the finer woolen goods, there will be some displacement of domestic products by foreign. It must remain to be seen how great that displacement will be.

All the duties on cotton goods are now assessed by value. Except for the retention of a remnant of the fence system in the hoisery duties, not a specific rate

appears in the entire schedule. This radical change was made the occasion for severe criticism, on the familiar ground that ad valorem duties tempt to undervaluation and fraud. The criticism is not without basis; and yet the adoption of the ad valorem system was almost inevitable. It is in no small part the result of abuses in the previous adjustment of the specific duties. The cotton schedule had been a highly intricate one, with duties varying according to the count of threads per square inch, the number of yards to the pound, the bleaching, coloring, and staining, and finally with a most elaborate fence system of value points. Just what the whole intricate array signified could be known only to persons conversant with every detail of the industry; that is, chiefly to the manufacturers themselves. It was more than suspected that the manufacturers, in their suggestions to the friendly legislators of former days, had manipulated the rates in such manner as to secure not only high protection, but higher protection than would have been granted if the significance of the rates had been fully understood. Charges of this sort, tho doubtless exaggerated, were not without foundation. In the act of 1909 itself, which had professed to reduce duties, some changes had been made, and more had been attempted, for increasing the intricate specific duties in a fashion not straightforward. In view of this familiar situation, it was to be expected that the Democrats should cut loose once for all from the specific system, and substitute ad valorem duties, which tell their tale on their face. Moreover, the temptation to undervaluation is not likely to be considerable under duties as moderate as

1 See an article by S. M. Evans in the Journal of Political Economy, for December, 1910, on "The Making of a Tariff Law ;" and a note by M. T. Copeland in this Journal, February, 1910, p. 422.

most of those in the new cotton schedule. This temptation becomes progressively greater as duties become higher, and is least when duties are low. Altho no hard and fast rule can be laid down, it is probable that duties of 30 per cent ad valorem can be collected on goods of a standard sort as honestly and efficiently as elaborate specific duties. The danger point in these matters seems to be reached with duties as high as 40 per cent, certainly with duties as high as 50 per cent. It is naturally greatest for goods not of a standard character, whose current market prices are difficult to check. It happens that cottons precisely of this kind had been subject to ad valorem duties in the tariff acts of former years. As regards these, the difficulties are made less rather than greater, since the ad valorem rate is lowered; while on the goods formerly subject to specific duties, neither the rate nor the character of the goods is such as to make the system unworkable.1

The duties on silks are readjusted on the same principle as those on cottons. Ad valorem duties are substituted throughout for specific. The general rate on silk fabrics is made 45 per cent; on velvets and plushes, it is 50 per cent. In the Senate, amendments were inserted retaining (tho with some reductions) the previous system of rates by the pound. But the House refused to concur in these amendments and the act as finally passed swept away almost every specific duty in the silk schedule.

In this case also the abolition of specific duties is to be ascribed to a feeling of suspicion concerning their intent and real effect. The highly complex

1 Cf. what is said below (p. 26) on the administrative sections of the act and the collection of ad valorem duties.

system adopted in 1897 and retained in 1909 had been devised nominally by the custom officials, but at the least with the advice and concurrence of the manufacturers. The plea which was advanced for the change from ad valorem to specific rates was that thus only could undervaluation and fraud be prevented. Beyond doubt undervaluation had been common and sometimes flagrant. Beyond doubt, also, it was lessened after 1897; tho by no means entirely prevented, since under the dragnet clause a considerable part of the imports still remained subject to an ad valorem duty. On the other hand, so intricate was the classification, so fine and minute were the lines of gradation in the specific duties, so troublesome was it to check inaccurate and even fraudulent statements, so difficult to find competent supervisors at the meager salaries offered by the government, that the working of the new system seems to have proved in practice not greatly superior to that of the old. But these administrative difficulties were not decisive in bringing about the complete return to the old ad valorem plan. It was tolerably certain that the elaborate specific duties contained some jokers"; and any readjustment of them, calling of necessity for advice from the same persons that had planned them at the outset, was likely still to retain jokers. The certain method of getting rid of this wretched adjunct of the tariff legislation of the past was to maintain ad valorem duties throughout. These have at least the advantage of telling their own tale plainly. The rates on silk fabrics are left comparatively high, on most goods, 45 per cent. The reductions

1 All silks on which the specific duties did not amount to much as 45% or 50% (the rate varied on different goods) had been left dutiable at these ad valorem rates as minima.