The Economic History of Steelmaking, 1867-1939: A Study in Competition

By Duncan Burn | Go to book overview

Chapter VI
THE TARIFF-REFORM ANALYSIS

The view which Chamberlain sponsored, thereby bringing the controversy concerning the state of iron and steelmaking into the centre of the most passionate political conflict of the time, gave a seductively simple explanation of the accelerating relative decline of the English industry. Though many tributaries swelled its influence, the main source of English discomfiture, according to this view, was to be found in the disparity between the English tariff system and those which sheltered rival producers. The protective duties of Germany and the States had first allowed the indigenous producers to gain their home market at the expense of British imports, and later allowed them to challenge the British maker in neutral markets and finally in his home market. For protection allowed them the continuous exercise of a two-price policy--high prices at home, low prices for export--while the unprotected English maker could only adopt such a policy as an exceptional expedient. This ability of rivals in fixing prices always to discriminate favourably for foreign buyers constituted, it was suggested, the main and sufficient explanation of the recent trends of trade: the position could be at once rectified if English statesmen returned to the protectionist fold.

The kernel of the Tariff Reformers' case--which was expounded with authority though without grace or polish in the Reports of the Tariff Commission, a body of Chamberlain's supporters who, at his request, examined his fiscal plans1--lay in the demonstration that in some circumstances it would be an advantage for protected producers to sell for long periods in the export market at prices fixed "irrespective of cost"; that such a

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1
The first Report of the Commission, published in July 1904, dealt with the Iron and Steel Trades. This report is referred to in the notes as Rep. Tariff Comm. The main treatment of dumping is contained in §§ 62-75.

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