Message to the House of Representatives Returning Without Approval H.R. 15275, an Act Imposing Temporary Duties Upon Certain Agricultural Products to Meet Present Emergencies, to Provide Revenue and for Other Purposes

The White House, March 3, 1921.

To the House of Representatives:

I return herewith without my approval H.R. 15,275, an act imposing temporary duties upon certain agricultural products to meet present emergencies, to provide revenue and for other purposes.

The title of this measure indicates that it has several purposes. The report of the Committee on Ways and Means reveals that its principal object is to furnish relief to certain producers in the nation who have been unable to discover satisfactory markets in foreign countries for their products and whose prices have fallen.

Very little reflection would lead any one to conclude that the measure would not furnish in any substantial degree the relief sought by the producers of most of the staple commodities which it covers. This nation has been for very many years a large exporter of agricultural products. For nearly a generation before it entered the European war its exports exceeded its imports of agricultural commodities by from approximately $200,000,000 to more than $500,000,000. In recent years this excess has greatly increased, and in 1919 reached the huge total of $1,904,292,000. The excess of exports of staple products is especially marked. In 1913 the nation imported 783,481 bushels of wheat, valued at $670,931 and in 1920, 35,848,648 bushels, worth $75,398,834,while it exported in 1913, 99,508,968 bushels, worth $95,098,838 and in 1920, 218,280,231 bushels, valued at $596,957,796.

In the year 1913 it imported 85,183 barrels of wheat flour valued at $347,877, and in 1920, 800,788 barrels valued at $8,669,300, while it exported in the first year 12,278,206 barrels valued at $56,865,444, and in 1920, 19,853,952 barrels valued at $224,472,448. In 1913 it imported $3,888,604 worth of corn, and in 1920, $9,257,377 worth, while its exports in the first year were valued at $26,515,146 and in 1920 at $26,453,681. Of unmanufactured cotton in 1920 it imported approximately 300,000,000 pounds valued at $138,743,000, while it exported more than 3,179,000,000 pounds, worth over $1,136,000,000. Of preserved milk, in the same year, it imported $3,331,812 worth and exported $65,239,020 worth. Its imports in the same year of sugar and wool of course greatly exceeded its exports.

It is obvious that for the commodities, except sugar and wool, mentioned in the measure, which make up the greater part of our agricultural international trade, the imports can have little or no effect on the prices of the domestic products. This is strikingly true of such commodities as wheat and com. The imports of wheat have come mainly from Canada and Argentina and have not competed with the domestic crop. Rather they have supplemented it. The domestic demand has been for specific classes and qualities of foreign wheat to meet particular milling and planting needs. They are a small fraction of our total production and of our wheat exports. The price of wheat is a world price; and it is a matter of little moment whether the Canadian wheat goes directly into the markets of the other countries of the world or indirectly through this country. The relatively small quantity of com imported into this country has a specialized use and does not come into competition with the domestic commodity.

The situation in which many of the farmers of the country find themselves cannot be remedied by a measure of this sort. This is doubtless generally understood. There is no short way out of existing conditions, and measures of this sort can only have the effect of deceiving the farmers and of raising false hopes among them. Actual relief can come only from the adoption of constructive measures of a broader scope, from the restoration of peace everywhere in the world, the resumption of normal industrial pursuits, the recovery particularly of Europe, and the discovery there of additional credit foundations on the basis of which her people may arrange to take from farmers and other producers of this nation a greater part of their surplus production.

One does not pay a compliment to the American farmer who attempts to alarm him by dangers from foreign competition. The American farmers are the most effective agricultural producers in the world. Their production is several times as great for each worker as that of their principal foreign rivals. This grows out of the intelligence of the American farmer, the nature of his agricultural practices and economy and the fact that he has the assistance of scientific and practical agencies which, in respect to variety of activity, of personnel and of financial support, exceed those of any other two or three nations in the world combined. There is little doubt that the farmers of this nation will not only continue mainly to supply the home demand, but will be increasingly called upon to supply a large part of the needs of the rest of the world.

What the farmer now needs is not only a better system of domestic marketing and credit, but especially larger foreign markets for his surplus products.

Clearly, measures of this sort will not conduce to an expansion of the foreign market. It is not a little singular that a measure which strikes a blow at our foreign trade should follow so closely upon the action of Congress directing the resumption of certain activities of the War Finance Corporation, especially at the urgent insistence of representatives of the farming interests, who believed that its resumption would improve foreign marketing. Indeed, when one surveys recent activities in the foreign field, and measures enacted affecting the foreign trade, one cannot fail to be impressed with the fact that there is consistency only in their contradictions and inconsistencies.

We have been vigorously building up a great merchant marine and providing for improvement of marketing in foreign countries by the passage of an export trade law and of measures for the promotion of banking agencies in foreign countries. Now it appears that we propose to render these measures abortive in whole or in part.

I imagine there is little doubt that while this measure is temporary, it is intended as a foundation for action of a similar nature of a very general and permanent character. It would seem to be designed to pave the way for such action. If there ever was a time when America had anything to fear from foreign competition, that time has passed. I cannot believe that American producers, who in most respects are the most effective in the world, can have any dread of competition when they view the fact that their country has come through the great struggle of the last few years, relatively speaking, untouched, while their principal competitors are in varying degrees sadly stricken and laboring under adverse conditions from which they will not recover for many years.

Changes of a very radical character have taken place. The United States has become a great creditor nation. She has lent certain Governments of Europe more than $9,000,000,000, and as a result of the enormous excess of our exports there is an additional commercial indebtedness of foreign nations to our own of perhaps not less than $4,000,000,000. There are only three ways in which Europe can meet her part of her indebtedness, namely, by the establishment of private credits, by the shipment of gold, or of commodities. It is difficult for Europe to discover the requisite securities as a basis for the necessary credits. Europe is not in a position at the present time to send us the amount of gold which would be needed and we could not view further large imports of gold into this country without concern. The result, to say the least, would be a larger disarrangement of international exchange and disturbance of international trade.

If we wish to have Europe settle her debts, Governmental or commercial, we must be prepared to buy from her, and if we wish to assist Europe and ourselves by the export either of food, of raw materials, or finished products, we must be prepared to welcome commodities which we need and which Europe will be prepared, with no little pain, to send us.

Clearly, this is no time for the erection here of high trade barriers. It would strike a blow at the large and successful efforts which have been made by many of our great industries to place themselves on an export basis. It would stand in the way of the normal readjustment of business conditions throughout the world, which is as vital to the welfare of this country as to that of all the other nations. The United States has a duty to itself as well as to the world, and it can discharge this duty by widening, not by contracting, its world markets.

This measure has only slight interest so far as its prospective revenue yields are concerned. It is estimated that the aggregate addition to the nation's income from its operation for ten months would be less than $72,000,000, and of this more than half would arise from the proposed duty on sugar. Obviously this and much more can be secured in ways known to the Congress, which would be vastly less burdensome to the American consumer and American industry.

The rates, however, have a peculiar interest. In practically every case they either equal or exceed those established under the Payne-Aldrich Act, in which the principle of protection reached its high water mark, and the enactment of which was followed by an effective exhibition of protest on the part of the majority of the American people. I do not believe that the sober judgment of the masses of the people of the nation, or even of the special class whose interests are immediately affected by this measure, will sanction a return, especially in view of conditions which lend even less justification for such action, to a policy of legislation for selfish interests which will foster monopoly and increase the disposition to look upon the Government as an instrument for private gain instead of an instrument for the promotion of the general well-being

Such a policy is antagonistic to the fundamental principle of equal and exact justice to all, and can only serve to revive the feeling of irritation on the part of the great masses of the people and of the lack of confidence in the motives of rulers and the results of government.

WOODROW WILSON.