The course of the wool market-Continued.

1896.

31. 29. 31. 30.

31.

Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. To30. 31. 31. 30. 31.

day.

JUSTICE v. LAWRENCE.

COMMENTS OF HON. THEODORE JUSTICE, OF PHILADELPHIA, ON ADDRESS DELIVERED BY JUDGE WILLIAM LAWRENCE IN COLUMBUS, OHIO, JANUARY 13, BEFORE OHIO WOOLGROWERS' ASSOCIATION.

JUDGE LAWRENCE.

Gentlemen of the Ohio Woolgrowers' Association:

We have once more assembled in annual convention to consider the condition of sheep husbandry, and what legislation by Congress is needed in its behalf.

In 1893 the number of sheep in the United States was 47,273,553, with an average value of $2.66 per head, or a total of $125,909,264, and a wool product estimated by the Department of Agriculture at 303,151,055, and by J. P. Truít, of Philadelphia, at 348,538,138 pounds, as marketed, generally unwashed, some washed.

The Presidential and Congressional elections of 1892 resulted in the election of Cleveland as President and a Congress in favor of a "tariff for revenue only," with free wool, which even before a free-wool law was enacted, began to produce its effect in reduced prices for wool and the slaughter of flocks. The free-wool bill was passed and became a law August 27, 1894.

Under the free-wool act of August 27, 1894, sheep in the United States declined in numbers until on April 1, 1896, they reached only 36,464,405, of the average value of $1.70, or a total of $61,989,488, with a wool product of only 270,474,708 pounds, of the farm value of only $20,800,000,146. (Senate Doc. No. 17. Fifty-fourth Congress, second session, December, 1896, pp. 143-177, being the memorial of the Farmers' National Congress.)

This was a loss in number of sheep of 10,809,148 since 1893, a loss in value of $63,919,776, a loss in wool clip of 78,063,430 pounds, which under adequate protection would have been of the farm value of $13,010,571.

The farm value of wool in 1892, with a meager tariff protection, was $47,185,283; the farm value in 1896, without protection, was $20,800,000, or a decline in value from 1892 to 1896 of $26,385,283.

Hon. S. N. D. North, secretary of the National Wool Manufacturers' Association, says: "The average farm value did not exceed 8 cents per pound" for the wools of the United States in 1896. Justice, Bateman & Co. show that the farm value of Ohio XX fine unwashed merino was, July 1, 1896, only 9 cents, and the wools of Utah and the Rocky Mountain region only 4 cents.

It has been demonstrated that from 1892 to 1896, inclusive, the woolgrowers of the United States lost by free wool $178,793, 121. The items in detail will be found in Senate Document No. 17, December, 1896, pages 24, 27, 177.

In April, 1891, Ohio had 3,796,695 sheep, of the value assessed for taxation of $10,082,076; in 1896 only 2,293,686 sheep, of the value of only $3,897,710, a decline in number of 1,503,009 and in value of $6,184,366. (Senate Doc. No. 17, December, 1896, p. 168.)

The loss in number both in Ohio and in all the States would have been greater but for two reasons:

1. The hope that in the near future a sufficient protective tariff would soon come, and

2. Because all agricultural industries were so depressed that woolgrowing lived to suffer a common calamity.

We need and, with adequate protection, can soon have in the United States 110,000,000 sheep, producing 650,000,000 pounds of wool-all required of every kind for our annual consumption. This would make an increased demand for pasturage, hay, corn, and oats. With adequate protection for wool since 1883, we would now have that number. With that number, fair prices for corn, oats. and hay would now reward the labors of the farmers of the United States. For want of them, the farm value of corn in Ohio is only 18 cents per bushel, oats 13 cents, fat cattle and hogs only $3 to $3.25 per 100 pounds, and until the shortage of the wheat crop of 1896, wheat in Ohio for two years commanded only 50 cents per bushel. These prices are

ruinously low-a decline of about 35 per cent in the last twenty years, while the conditions of society require new and more expensive modes of living.

In the States west of Ohio even lower prices and more depression and financial embarrassment exist. The farmers encounter bankruptcy and mortgages, and by the interdependence of industries, distress and ruin are invading all productive employments.

Something must be done to relieve existing conditions, or the Republican party will soon go out of power; the protective policy can not be maintained, and a revolution may come in our monetary policy.

The greatest need to begin the revival of all industries is that which was promised by the Republican national platform of 1896, "the most ample protection for wool.” A wool tariff bill, singly and alone, should be the first measure passed at an extra session of Congress, because it is first in importance to begin to restore prosperity, and sheep husbandry has suffered more by hostile legislation than any other industry in our whole national existence.

The National Woolgrowers' Association in December, 1895, agreed upon the draft of a bill asking for a duty of 12 cents per pound on unwashed merino. This is necessary and just.

MR. JUSTICE.

At the time the National Woolgrowers' Association, in December, 1895, agreed upon the tariff asking for a duty of 12 cents per pound upon unwashed merino wool, they did not comprehend, as they do to-day, the necessity for making a tariff law that will be considered so moderate by the whole people that it will endure the test of time. In fixing the rate of 12 cents they considered only what they thought was most ample protection," and gave no thought to the probability of 70,000,000 people concurring.

JUDGE LAWRENCE.

1. This was indorsed by the Farmers' National Congress November, 1896, by the Ohio State Grange December, 1896, again by the National Woolgrower's Association December 4-7, 1896, and again January 4-5, 1897.

2. The wool tariff act of 1867 gave a duty of from about 12 to 15 cents, according to value, when foreign wool prices were much higher than now. With high foreign prices less protection is needed; when they go down, more protection is needed.

MR. JUSTICE.

The wool tariff of 1867 imposed a duty of 12 cents a pound and upward, and under it the flocks of the United States increased more rapidly than the flocks of any other nation of the world, when foreign prices were higher than they are to-day. But the value of everything has been reduced enormously since that time, and the woolgrower can not expect to be favored above other classes.

JUDGE LAWRENCE.

3. The act of 1883 gave from 10 to 12 cents per pound, according to value, when the foreign price was much more than now. But even with that protection, our sheep declined in numbers and value.

MR. JUSTICE.

The decline in the sheep under the tariff law of 1883 was not because the duty of 10 cents per pound was inadequate. It was because (owing to the careless wording of that law) the customer of the American woolgrower was not protected. Our mills were not employed. Foreign goods poured into this country, and our mills were idle, and owing to this

cause there was an indifferent market for wool. Foreign manufacturers - were permitted to monopolize the American market. During the last four years of the law of 1883 the imports of "manufactures of wool" from Great Britain to the United States averaged annually 4,480,250 pounds, about 67 per cent more than was sent here under the average of the McKinley period, and the Continent sent about twice as much as was sent by Great Britain.

Third-class wools were sorted in Europe, and the finer grades were sent here as "carpet wool," but were used for clothing purposes, and highly purified scoured wools which should then have paid 60 cents per pound duty as broken-up tops were admitted as "waste" at only 10 cents per pound. The McKinley law remedied these faults, and flocks increased under the McKinley law, although the duty on unwashed wool of the first class was increased only 1 cent per pound.

JUDGE LAWRENCE.

4. The act of 1890 gave a duty of 11 cents, but under that (a) the prices of wool went down and down. (Senate Doc. No. 17, December, 1896, pp. 25-27.) (b) Sheep in Texas actually declined in numbers. (Senate Doc. No. 17, December, 1895, pp. 181, 209-211.) (c) The increase in the aggregate of numbers was slow and inadequate. (Senate Doc. No. 17, December, 1896, p. 144.)

The fact is, woolgrowers lived on hope rather than any sufficient benefits realized. The act was a failure by reason of defects, the effects of which were not foreseen, and by reason of ad valorem duties on third-class wools.

MR. JUSTICE.

American wool declined after the act of 1890 was passed because of the rapidly increasing supply of wool in the Southern Hemisphere, and while foreign prices fell American prices followed, but the foreign price averaged about 50 per cent below the McKinley price, and the fact that sheep declined in the single locality of Texas proves nothing, because the whole number of sheep in the United States increased rapidly under the law of 1890, and if that law had not been interrupted, on commercial estimates, and a little later on the estimates of the Department of Agriculture, the flocks of the United States would have been sufficient by the year 1905 to produce 650,000,000 pounds of wool, the quantity consumed by the American people, including that contained in all imported woolen goods.

JUDGE LAWRENCE.

5. The world's prices of wools declined from 1891 to 1895, 18 per cent, thus requir➡ ing more protection than in 1890. (Senate Doc. No. 17, December, 1896, p. 31.)

MR. JUSTICE.

The world's prices will continue to decline, and it will be impossible to provide for a graduated schedule that will always increase the duty as foreign prices fall. The cost of clothing to consumers will be gradually lower from year to year in consequence of the inevitable foreign decline, and the American woolgrower must be content if he has a duty upon imported wool that raises the price of the imported competing article 8, 9, 10, 11, or 12 cents per pound, as the case may be. This is the utmost limit of protection that the nation is willing to extend to any one branch of industry. Eleven cents per pound at the present moment

would be 50 per cent protection on the best grade of Port Phillip skirted wool, worth to-day 11 pence or 22 cents in London.

In order to ascertain what is ample protection, we must ascertain—

1. The cost of producing wools in the United States; and

2. The price at which foreign competing wools can be laid down at our principal wool markets-Philadelphia, New York, and Boston.

The principal wools of the United States are merino. The cost of producing these wools east of the Missouri River is (farm value) all of 20 cents per pound for unwashed merino, shrinking 66 per cent in scouring.

The cost in the Rocky Mountain region is all of 16 cents per pound.

This is shown in Senate Document No. 17, Fifty-fourth Congress, first session, memorial of National Woolgrowers' Association, December, 1895, pages 70, 107,

152-153.

The wools east of the Missouri are generally superior in quality to those west, and the farm value of the former unwashed is accordingly about from 3 to 5 cents per pound greater. (Senate Doc. No. 17, December, 1896.)

The Port Phillip Australian merino is more nearly of the quality of the merino grown east of the Missouri River, and is usually called the "competing wool." When unwashed, and even unskirted, the good grades will shrink in scouring only 50 per cent. But all foreign wools of every kind compete with all our American wools.

The merino wools of the Cape of Good Hope and of Argentina are inferior in quality to the Australian, and hence are called "competing wools" for those grown west of the Missouri River, though in fact all foreign wools of every kind compete with them also.

The London Wool Circular of Helmuth, Schwartze & Co., December, 1894, quotes London prices per pound as follows (Senate Doc. No. 17, December, 1896, p. 141):

Buenos Ayres average greasy (36 per cent yield).
Buenos Ayres average greasy (old 30 per cent basis)
This makes the average price in London...

Add freight and charges from London to Boston

Cost in Boston......

d. Cents.

44 9

34=7! 41-81

91

This is an error. Ten and a quarter cents is the price of Buenos Ayres merino wool, which is a kind seldom imported into the United States. Manufacturers will not now have it in spite of its cheapness, even when free of duty. It is very burry and unsuitable for manufacture in the United States, where the question of dear labor comes in. The merino South American wools go to Europe, where the burry wool is manipulated by cheap labor. This wool will not be a severe competitor with American wools, except after it has been manipulated in Europe by the cheap labor there. As they were not imported when free of duty they never will be extensively imported under other conditions of tariff.

This is the competition which the merino wools west of the Missouri must encounter It will cost an average of 3 cents per pound, including commission, etc., to ship these far West wools to Boston, which in competition with the foreign wool at 93 cents will make the ranch price per pound, without tariff benefit, 64 cents.

But a part of the Buenos Ayres wool quoted yields 36 per cent clean wool, which is from 3 to 6 per cent more than much of the wools west of the Missouri. And, first by reason of this, and, second, the fact that the lightest of the foreign wools will be imported, and, third, that some advantage should be given to our wool over the foreign, there should be deducted 14 cents.

This will leave the net ranch price 5 cents.

The correctness of this is shown by the fact that Justice, Bateman & Co. quote the ranch price, July 1, 1896, at 4 cents. A tariff rate of 12 cents per pound will never give a "protective benefit" equal to the tariff rate. But suppose it gives a protective benefit of 10 cents?

This would give the price the Far-West woolgrowers would receive, actual ranch value the price at the nearest local market-per pound only 15 cents.

This computation is on price quotations in 1894, with 1 cent added for freight from London to Boston. But in fact South American wool can be laid down in Boston as cheaply as in London, and this is 1 cent in favor of the foreign wool.

The wool quotations for 1896 bring a similar result.