MCNARY-HAUGEN MOVEMENT 375 



Except for wool and sugar, it would have been difficult to find better 

 proof of the failure of the customary tariff duties to serve as a check on 

 declining prices. Despite the import duty of thirty cents on a bushel of 

 wheat, the United States, during the fiscal year ending June 30, 1923, im- 

 ported some 18,050,000 bushels of high-protein Canadian wheat. Again, 

 over a nine-month period from July, 1923, to March, 1924, inclusive, the 

 United States imported 23,498,000 bushels from Canada. Because of this, 

 and also the growing clamor of the McNary-Haugenites, President Cool- 

 idge was prompted to raise the wheat duty from thirty to forty-two cents a 

 bushel, effective April 7, I924. 8 



The course that wheat prices took following this last pronouncement 

 confirmed the utter futility of such measures. The President issued his 

 proclamation on March 7; the day before that, May futures closed on the 

 Chicago market at Si.ii 1 /^ a bushel and July futures at Si.u 1 /^. On March 

 26, May and July futures sold at $i.oo ! /2 and $1.02 respectively. Here was 

 a drop of about ten cents in less than thirty days. True enough, wheat 

 prices eventually did come back to the March 6 level, but this was due 

 largely to the unfavorable crop reports that came in from Canada and 

 other nations of the northern hemisphere. If anything, wheat prices should 

 not have dropped as they did in March. The South American crop had 

 already been harvested and marketed; American farmers had been re- 

 ducing their acreage; winter wheat conditions were none too good; and 

 the wheels of American industry had been moving into higher speed. 



Obviously, in so far as the majority of the farm products were con- 

 cerned, the traditional tariff was ineffective as a device to protect exports. 

 The test of tariff effectiveness, according to the drafter of the first McNary- 

 Haugen measure, was the ability of the domestic producers to determine 

 prices behind tariff walls. Unless the price could be determined in this 

 fashion, the American producers would have to content themselves with 

 depressed world prices for their exports, as they had in past years. 9 



The event that drove farm leaders to search for more effective protec- 

 tive weapons was the fact that farm prices dropped faster and to lower 

 levels than did the prices of the commodities and services that the farm- 



8. Charles J. Brand, "The Price Balance Between Agriculture and Industry," 

 Proceedings of the Academy of Political Science, XI (January, 1925), p. 168. 



9. Ibid., pp. 169-70. 



