"true principle
of protection."

Sec. 13. #The Underwood tariff, 1913#. After President Wilson was
inaugurated, March 4, 1913, the tariff was at once taken up by
Congress. The general features of the act that was passed were as
follows:

(a) Considerable additions to the free list of raw materials.

(b) Abolition of compensatory duties corresponding with the old rates
on raw materials.

(c) Replacement of specific by _ad valorem_ rates in many cases.

(d) Taxation of plain kinds of goods less than fancy kinds--luxuries
higher than necessities.

(e) Reduction of rates generally (most of the few increases being to
correct some evident error in the old law).

(f) Application of the so-called competitive principle to rates
intended to be protective, viz., to leave the rate just barely high
enough to keep out foreign products.[11]

Articles placed on the free list were raw wool (which had borne a rate
equivalent to about 44 per cent), metals, agricultural implements, raw
sugar (the lower rate to go into effect gradually), coal, lumber, many
agricultural products including live cattle, meats, wheat, corn,
flax, tea, and hemp, and numerous manufactures including boots, shoes,
gunpowder, wood pulp, and print paper.

Moderate reductions were made in the schedules for chemicals, earths,
cotton goods, and sundries, while rates on various luxuries were
either unchanged or raised. Left almost unchanged were the schedules
for tobacco, for spirits and wines, and for silks (already very high).

This act was signed October 3, 1913, and had been in operation about
nine months when the great war broke out in August, 1914. What its
effects would have been under normal conditions we can judge little
from the actual experience. The first eight months that the act was in
operation, the _ad valorem_ rate on dutiable goods proved to be 36 per
cent (about 4 per cent less than in the preceding year) and the rate
on free and dutiable together about 14 per cent (over 3 per cent less
than the preceding year). The first complete fiscal year (that of
1915) under the act, the average rate on dutiable goods was 33.5 per
cent and that on all imports was 12.5 per cent. Evidently this is far
from a "free trade tariff." The reduction in the average _ad valorem_
rate is less than was expected. Many of the reductions had little
effect, the former rate having been much higher than was needed to
exclude the goods. In other cases the old rates were