will be made to make it still more prohibitive.  But one lesson of our tariff history is that such an act should be given a period of fair trial before extensive changes are made in it.  Even further reductions should be cautiously undertaken and put into effect gradually.  If the attempt is made through temporary rates to reduce the shock of the trade adjustments, of the “dumping” after the war, then the devising and administration of such measures should be delegated to an expert, disinterested, permanent tariff board.  The task is to prevent temporary “unfair competition” and sudden changes, rather than to raise permanent barriers to fair trade.[14]

[Footnote 1:  It is evident that it is only through ad valorem rates that it is possible to compare the average rate of duty for one tariff act, with that for another.  As, however, every tariff act is made up of both specific and ad valorem duties, it is only at the end of the year that an average ad valorem rate can be estimated by comparing the total of duties collected with the total estimated value of the goods imported.  Average ad valorem rates are estimated in this way both on the dutiable goods alone, and on all goods, free and dutiable combined.  There may be an element of error, even of misrepresentation, in such estimates.  They do not give the simple test of the relative height of duties, or of the degree of “protection” that we might at first suppose.  Just to the extent that a new and higher rate really operates to exclude imports (and thus is protective in its effect) the goods subject to that rate cease to form part of the total imports.  For example, if the average rate of duty were 25 per cent, and a 50 per cent rate on an article were increased to 75 per cent, it is possible that this rate would prove to be absolutely prohibitive.  This raise of rate, therefore, would tend to reduce the average rates collected on all dutiable articles.  Changes in general conditions of industry from causes quite apart from the tariff may result in shifting the proportions of imports that are dutiable so that the average rates go either up or down while the tariff law has remained unchanged on the statute book.  A failure to consider these and related facts leads to much confusion in popular and political discussion of the tariff.]

[Footnote 2:  Usually given as 20 per cent.  However a good many rates under the full operation of the act worked out as 21-1/2 or 23 per cent, and a few at 26 and at 29 per cent.  Besides there were numerous specific rates, the ad valorem force of which cannot be determined.]

[Footnote 3:  The political argument that the small tariff reduction of 1857 caused the crisis of 1857 will not bear serious examination.  See below, sec. 13.]

[Footnote 4:  See ch. 14, sec. 2.]

[Footnote 5:  See above, sec. 2, note 1.]

[Footnote 6:  Internal revenue receipts in 1866 had been $309,000,000; in 1872 they had fallen to $131,000,000, yet the government’s surplus for the three years 1870-1872 was little less than $100,000,000 a year.  This was almost half of the total receipts from customs, which were $216,000,000.]