Elasticity

PRESIDENT

President Harding took an important step when he settled a little dispute which had grown up among the members of the Tariff Commission. Great political as well as economic results may follow the President's decision.

The Question. The Fordney-McCumber Tariff Act contained for the first time in national history a provision for a flexible or elastic tariff to be applied entirely at the discretion of the Chief Executive. On recommendation of the Tariff Commission he may raise or lower duties (not more than 50% of the amount fixed by law). The question which arose in the Tariff Commission was whether it had the power to investigate and recommend changes in the tariff on its own initiative, or whether it must confine its consideration to specific tariff rates against which complaints were made. The Republican members of the Commission, with the exception of Vice Chairman William S. Culbertson, were in favor of the latter narrower interpretation of the act. The Democrats, who are eager for a revision of the Fordney-McCumber Tariff, were naturally in favor of the more liberal interpretation. It was agreed that Mr. Harding should decide.

The Decision. After a two-hour conference at the White House a decision was given out. It was nominally a compromise, but actually a triumph for the liberal interpretation of the law. In cases where complaints are made the commission may " limit the inquiry or broaden it to include related subjects." Where no complaints are filed, after preliminary inquiry and conference with the President, such formal investigations may be authorized " as the facts may warrant and public interest require."

The Significance. Mr. Harding's interpretation of the law is important because it gives the Chief Executive wider power over the tariff than was intended when the law was drawn. Only half an hour before President Harding met the Tariff Commission, Senator Smoot, who was responsible for the elastic provision of the Tariff Act, called at the White House and told the President that Congress had no intention of giving the Tariff Commission general permission to rewrite the tariff.

To be sure, even if the Commission should completely rewrite the tariff (which is extremely problematic) the President alone can make actual changes in rates, and might disregard the Commission's recommendations. But the fact remains that he has greatly enlarged his powers, however he may choose to exercise them. He may make changes to remedy only the obvious defects of the law as they develop in practice. His friends say this is his intention. But he, or some later President, out of sympathy with the law, might choose to take the making of the tariff entirely into the hands of the Executive.