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under high protection no less than nineteen companies engaged in the manufacture of binders, the duty on these machines being 35 per cent ad valorem, while scores of Canadian plants made other implements. The keen competition among Canadian manufacturers which resulted from this situation was a very great benefit to Canadian farmers, although few of the companies made money. Such local competition of the strongest character not only was effective in keeping prices low but it also worked toward efficiency and the utmost effort to decrease cost of production. It resulted in the development of export trade for several of the companies, and, indeed, the only Canadian agricultural implement concerns which have made money during the last thirty-five years have been those which have combined considerable export business with their domestic trade. It also produced several advantageous consolidations of the more successful concerns.

Many of the companies which could not stand the competition gradually were forced to discontinue operations, while only the fittest survived. The intense competition of domestic producers more than offset any disadvantages of tariff protection and, indeed, it has produced such a strong industry that it has permitted a gradual stepping down of customs duties, until today the agricultural implement schedules in general are the lowest in the Canadian tariff. In the case of binders, mowers and reapers the duty is now only 12 1-2 per cent, which is equivalent to a net protection of between 7 and 10 per cent, inasmuch as a drawback is payable of 99 per cent

of the duties on imported materials entering into the construction of these implements.

A recent comparison shows that at the present time the Canadian farmers are able to buy their implements at prices which on the average are as low as, if not lower than, those at which comparable implements are available to agriculturists correspondingly located in the United States. The cost of production in the Dominion undoubtedly is somewhat higher than in the United States, but this is offset by a smaller "spread" between manufacturer and consumer, because the Canadian implements are handled entirely through commission agents and the prices are controlled by the manufacturers. Nearly 50 per cent of the output of Canadian farm implement companies are for the export trade, and such foreign buiness accounts for approximately 70 per cent of the entire profits of the manufacturers. Sales abroad in competition with the American producers are made possible largely by a drawback of duty on raw materials entering into implements for export and partly by the preference extended to Canadian manufacturers in New Zealand and South Africa.

STILL NEEDS PROTECTION.

Some protection is still needed by the industry. In the first place a considerable proportion of machinery has to be imported and a duty of 35 per cent paid upon it. In addition, Canadian manufacturers have to import a considerable part of their raw material because Canadian industries in many lines are not sufficiently developed to meet the demand.

The significant features about the

history of the Canadian agricultural implement industry are these:

I. A high tariff developed local competition to such an extent as to keep down prices in the domestic market and to promote development of the most efficient Canadian companies, without subjecting them immediately to disastrous competition from great foreign producing or ganizations. The Canadian agricultural implement industry today represents an investment of $80,000,000, giving employment to 20,ooo persons, with an annual salaries, wages and commission bill of at least $20,000,000, and an annual value of product of $50,000,000. Moreover, the implement industry provides a direct market for the products of other industries-to a considerable extent Canadian products-of over $20,000,000.

2. A substantial but gradual reduction of duty was made possible, until today the farm implement schedules are the lowest in the Canadian tariff. The Canadian companies, indeed, would be able to compete with American producers on an equal basis at the present time under free trade if they were able to secure raw materials, fuel, etc., at as low prices as do the American plants.

3. Canadian farmers have been saved from the higher prices which undoubtedly they would have been. forced to pay had the domestic industry not been developed. The Canadian manufacturers have been making a larger margin of profit on cream separators, which are and always have been free of import duty, than on any other farm implement made in this country, even though some implements carry a duty up to 17 1-2 per cent.

DEVELOPMENT OF CANADIAN WOOL MANUFACTURES.

the preferential treatment to imports from the United Kingdom all but strangled the Canadian woolen industry. In 1897 the British preferential duties were inaugurated as a part of the Canadian tariff, at 25 per cent below the general rates. Up to this time the woolen manufacturing industry in the Dominion had been flourishing and a very considerable part of domestic requirements was supplied by the Canadian factories. Many of the mills were barely able to continue in operation under the reduced protection of the preferential rates, but when the British preference was increased in 1900 and the British manufacturer was able to send woolens into

this country under duties one-third lower than the general rates, a large number of the Canadian mills were forced out of business. It is said that 75 per cent of the Canadian woolen mills were obliged to close their doors and nail up the shutters as a result of this policy.

In the 1907 tariff the preferential rates were made a separate schedule, independent of the general rates, and the preference to British producers of woolens was reduced. In this tariff the

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British preferential duty woolen and worsted fabrics, finished dress goods and ready-made clothing was 30 per cent, as compared with a general rate of 35 per cent, but the industry did not rapidly recover. Up to the beginning of the war, profits generally were small and the Canadian wool manufacturers were limited largely to specialties, although some of the mills appear to have been doing fairly well on the low-grade fabrics,

The reduction in tariff duties under consisting largely of shoddy and cot

ton, with a relatively small percentage of new wool, to which they turned their efforts. The proportion of Canadian made woolens sold in Canada had declined to about 15 per cent of the total consumption. There were still a fair number of mills in Canada but only a very few of them attempted to make high-grade fabrics, and those few were engaged almost entirely in the production of specialties with no substantial output of standard cloths. Such was the situation in 1914. Canada's woolen industry was exceedingly weak and supplied only a pitifully small proportion of the clothing of the Canadian people.

WAR HELPED CANADIAN INDUSTRY.

The war brought important changes. British imports were largely cut off, while substantial orders were placed with the Canadian mills by the Dominion Government, and also from abroad. In so far as the home market was concerned, war conditions operated in much the same way as would a high tariff, and the industry made truly remarkable progress. When war orders were curtailed in 1918, some of the mills turned their attention to the production of higher grade suitings and today are producing desirable cloths which represent better value than can be obtained immediately elsewhere. Canadian-made

woolens are sold today at lower prices than those which must, of necessity, be charged for imported products. This fact has been admitted by experts before the Canadian Board of Commerce at recent hearings. But there has been complaint that the Canadian plants are not able to meet the demand; indeed, Canadian factor

ies today probably are not supplying much more than 25, or at the outside 30, per cent of domestic requirements of woolens of all kinds, as compared with about 15 per cent immediately before the war. In the case of overcoatings, for which Canadian wool is especially suitable, Canadian factories provide a large proportion of the total Canadian consumption. But only a small proportion of men's suitings is made in Canada and practically no dress goods.

The reductions in 1897 and 1900 of the protective tariff against British imports to a level below the minimum requirements for the development of the Canadian industry, resulting in the closing of many factories, the crippling of others, and inability to attract capital because under such conditions the woolen industry was not profitable, is the direct cause of the present limitations of the Canadian woolen mills.

It is true that the Canadian industry has been shipping considerable quantities of woolens abroad, particularly to Rumania and Greece. Such foreign business is probably only a transient outgrowth of war conditions; the Canadian woolen industry has no important export interests normally, except to a minor extent in the case of knitted goods. A very large proportion of the fabrics supplied to Rumania and elsewhere are more or less coarse products which would not be acceptable to the civilian trade in this country.

Indeed, the crippling of the industry in the later nineties resulted to a large degree in a loss to the industry and to the Dominion of its skilled woolen workers. Such loss is one

that is not easily made good and several of the mills which have been endeavoring recently to establish a civilian trade in better class men's suitings and other high grade civilian fabrics have found it necessary to engage British or United States experts. A considerable proportion of the mills, however, are still incapable of producing civilian fabrics which warrant any large claim to style or finish.

For the almost negligible manufacture in the Dominion of woolen dress goods inadequate protection is responsible. Under the tariff of 1907, such fabrics not exceeding in weight six ounces to the square yard, when imported from Great Britain in the gray or unfinished state for the purpose of being dyed or finished in Canada, are subject to a duty of only 15 per cent. Capital has been shy of undertaking the manufacture of wool dress goods in the Dominion with such small protection against British imports.

Under pre-war conditions Canada's import trade in woolen goods was almost entirely from the United Kingdom, only a very limited range of "style" goods being brought in from the United States. Indeed, American fabrics were in the main of lighter weight than those demanded by Canadian consumers during the war.

During the last three or four years the Canadian trade has been obliged to import considerable quantities of woolens and mixed fabrics from the United States, but the future of such business is exceedingly doubtful. The highest duty imposed on woolen goods under the Canadian tariff is 35 per cent of the aggregate value of manufactured woolen goods imported. The British preferential rates on woolens

in the Canadian tariff are slightly lower than the present American rates, despite the tremendously greater manufacturing organizations in the United States with the advantages which they entail in the way of qual ity, production, standardization, etc. Moreover, it should be noted that the average duty of about 30 per cent on woolens imported into Canada is far from being the net production. There are important offsets including the duty on fuel and many other supplies, and at the present time exchange, which gives to the British manufac turer an advantage of more than ten per cent in selling in this country.

BRITISH IMPORTS INCREASING. British woolens are again being imported on a substantial scale, and American woolens are also brought in to meet demands which cannot be supplied from the United Kingdom. At the present time the Canadian mills have absolutely no difficulty in selling their total output at profitable prices, and, in fact, the few domestic producers of high grade woolen fabrics are sold for many months ahead. Efforts have been made by the plants to increase production, but it is not easy to do so under present conditions, although the equipment and organization which were expanded during the war are being utilized to the greatest possible extent. No additional skilled workers are available and female help of all kinds is scarce. Machinery cannot be obtained without months' delay.

Indeed, Canada today is having an object lesson of the truth that an efficient, large-scale domestic woolen industry, adequate to the requirements' of this country, cannot be built up in

a day. It is quite as impossible as is the realization if that fond dream of Mr. William Jennings Bryan - an army of a million men mobilized overnight to repel any threatened violation of American territory.

Recently there have been indications of a tendency towards amalganation and the formation of larger manufacturing units in an effort to neet British post-war competition. The whole industry is hopeful. Just what measure of tariff protection will be needed in the future cannot safely be estimated at the present time.

Certain it is that the war has only partly made up for the grievous hurt which was done to the Canadian

woolen industry by the British preferential rates, and Canadian consumers are now paying for the limitations of the domestic industry in the very much higher prices which they are forced to pay for imported woolen goods. They are buying agricultural implements more cheaply than the people of any other country in the world—with the possible exception of the United States-because adequate protection was extended to permit development of that industry. At the same time they are paying through the nose for woolens, because they failed to maintain adequate protection for the woolen industry when such protection was needed.-S. R. W.

A PRODUCTIVE TARIFF THE BASIS OF PROSPERITY.

By Edgar J. Dwyer.

A hundred years ago the Democratic party under the leadership of John Randolph openly oppossed >rotection on the ground that it would develop manufacturing and ncrease wages in the United States, and they claimed that the country vould be more prosperous by renaining an agricultural country, de>ending on Europe for its industrial upplies.

To show how fully those free rade Democrats realized that proection increased production, look in he Annals of Congress for 1820821; page 1507 states that the coton planters of the South protested o Congress against the injustice of ncreasing the value of labor by proective tariff laws, which they de

clared was equivalent to demanding a bounty from them equal to the difference in the wage scale.

There can be no increase in the value of labor without an increase in the demand for labor, and there can be no increase in the demand for labor without increased production.

The question arises, why has the Democratic party changed its opposition from an honest interlocution of the facts as they actually exist, to false, illogical, arbitrary assertions, relating to imaginary conditions. that create envy, malice, discontent, and class hatred?

The answer is obvious. If they made an honest stand against protection as the basis of American

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