V.-PROHIBITORY DUTIES AGAINST SHODDY RAGS, ETC.

(II) If it is to be passed by the Senate, I hope it will be amended: 1. So as to impose the full duties of the McKinley law and even more on shoddy, mungo, rags, noils, wastes, carbonized wool, flocks, and other adulterants used in woolen manufacturers. Such amendment would, among the people, command almost universal assent.18

VI. THE "SKIRTING CLAUSE"-AD VALOREM DUTIES.

1. Other amendments, as it seems to me, should be made as follows: (1) Provided, that so much of Schedule K, of the act of October 1, 1890, as provides, "That skirted wools as now imported are hereby excepted," shall not be operative in this act. (See Senate Doc. No. 17, pp. 46-54, 69-164.)

(2) That unwashed Australasian and similar wools having any admixture of merino blood, by reason of their lighter shrinkage in scouring than similar wools of the western hemisphere and some other countries, shall be dutiable as washed wools.

(3) The ad valorem duties provided for as to wools and camel's hair of the third class in Schedule. K, of the act of October 1, 1890, shall not be operative in this act, but in lieu thereof a specific duty of 4 cents per pound shall be levied and collected on such unwashed wools and camel's hair; double that rate when washed, and treble when scoured. (4) That China and similar wools shall be deemed wools of Class 2.

REASONS WHY.

2. In support of these I have to say:

(1) It it especially to be noticed that they do not propose to increase the rate of duty on wools of the first or second class, but only seek to make the nominal rate of duty the real rate, taking American unwashed merino, shrinking 66 per cent in scouring, as the basis of estimates for wools of class one.

(2) And as to all wools, the proposed amendments are designed to remove the so-called "loopholes" which defeat the real purpose of the law. These "loopholes" are presented in your speech-in fact, they are worse than your speech represents. (See Senate Document No. 17, introduction, and pp. 45-53.) In the circular appended to the able speech of Senator Mitchell, of Oregon, in the Senate December 31, 1895, you will see a reference to these "loopholes." On Montana, Colorado, and similar merino unwashed wools the Dingley protection will be so small as to be almost nominal, as shown in the circular and Senate document.

(3) The proposed amendment to strike out the ad valorem duties on wools of class 3 is manifestly just and necessary. In the last fiscal year the imports of China wools were 26,089,418 pounds at an import price of 5.15 cents per pound. The Dingley duty of 32 per cent on such wools would be 1.648 cents per pound. This wool can be and is used in the manufacture of clothing goods, and hence supplants the use of American merino and the wools of our mutton breeds. By reason of its light shrinkage in scouring, the 26,089,419 pounds of China wools. were equal to nearly 40,000,000 pounds of Montana, Colorado, and similar unwashed merino wool. A duty of 4 cents per pourd on such wool

18 This subject is discussed in footnote 14 in Chapter I of this document.

of such light shrinkage would not exceed 3 cents if estimated on the basis of unwashed merino. The manufacturers have specified duties; why shall not woolgrowers have the same? 19

It is to be observed that the wool duties and protection afforded by the McKinley act were less than those provided in the bill as reported by Mr. McKinley, less than he desired, and less than members of Congress generally understood they would be. The bill as reported gave specific duties on all wool.

The Dingley bill proposes to continue in operation the discrimination of prior legislation, with all the "loopholes" against woolgrowers and even more discrimination.

1. These matters are referred to simply by way of self-defense for the woolgrowers, and because the time has come when it is necessary to insist on "equal and exact justice"-on protection for the woolgrowers equal to that afforded to manufacturers.

2. I am not objecting to any protection given to manufacturers. has been and would continue to be vastly useful.

3. I do believe that in the haste with which the Dingley bill was prepared and put through the House its effect was not fully understood, and that if the woolgrowers could have been heard before the committee the bill would have been changed so as to make its nominal duties be in practice its real duties.

VII.-PROTECT THE WOOL MANUFACTURER.

III. The Dingley bill, I believe, does not give the wool manufacturers all the protection they need and should have. Woolgrowers have been and are willing that manufacturers be permitted to have such reasonable protection as they need, of which they are the best judges.20

1. There is ample wool-manufacturing machinery now in the United States to make all the woolen and worsted manufactures needed for consumption by our people, and our manufacturers have the skill to make goods equal to the best in the world. 21

As to the wool manufacturers, we have reached a point where sound policy requires such protection as will not permit combinations to make extortionate prices, but nevertheless, such ample protection as will exclude all foreign wool fabrics, so long as American prices are fair prices, and thus give $40,000,000 a year to American industry, now being given to foreigners.

VIII. THE DINGLEY BILL GIVES WOOL MANUFACTURERS BETTER PROTECTION THAN THAT FOR WOOL GROWERS.

But it is nevertheless true that the wool duties of the Dingley bill are, or in practice will be, less than half what they nominally profess to be, while the protection therein to the manufacturer is much more than it appears to be.

19 These subjects are discussed in footnotes 7, 12, and 16 of Chapter I of this document; also in the Quarterly Bulletin of the National Wool Growers' Association for July, 1896, Boston, Mass., Hon. Frank P. Bennett, manager, 148 Pearl street.

20 The Bulletin, Philadelphia, November 20, 1896, published for the American Iron and Steel Association, at No. 261 South Fourth street, an earnest advocate for the policy of protection, says the Dingley bill "affords a FAIR degree of PROTECTION to the woolen [manufacturing] industry."

21 So stated in the Bulletin of the National Association of Wool Manufacturers, September, 1896, by Hon. A. N. D. North, secretary, Boston, Mass.

The Dingley bill gives very much better protection to manufacturers than to wool growers. I do think that, although doubtless not so intended, it makes an unfair discrimination in favor of manufacturers and against wool growers.

Like the tariff acts of 1867, 1883, and 1890, the duties of the Dingley bill in favor of manufacturers are generally of two classes.

(1) The "protective duty" and

(2) The "compensatory duty."

The former is given to "equalize conditions"—that is, it is given in view of the difference between the low cost of labor in Europe and the better price in the United States. To equalize these conditions an ad valorem duty is given on imports of woolen and worsted cloths-thus, in paragraph 392 of the McKinley act an ad valorem duty is prescribed of 40 per cent.

1. THE "COMPENSATORY DUTIES" FOR MANUFACTURES MORE THAN THEY SEEM TO BE.

The "compensatory duty" is given to compensate the manufacturer for the duty on imported wool—that is, to place him in as good condition as the foreign manufacturer with free wool. In the paragraph 392 referred to, the “ compensatory duty" on certain classes of woolen and worsted cloths is per pound of cloth "three times the duty imposed on a pound of unwashed wool of the first class," and on certain other classes, the compensatory duty is "three and one-half times the duty imposed on a pound of unwashed wool of the first class," and on another class of cloths "four times the duty imposed * ** * on a pound of unwashed wool of the first class."

Now, these compensatory duties to the manufacturer are much more than they apparently seem to be, and thus become largely protective duties. This is shown as follows:

(1) They are given on the assumption that to make a pound of the respective classes of cloths mentioned, will require, some three, some three and a half, and some four pounds of unwashed wool, in consequence of its shrinkage in scouring and loss in manufacturing. As a matter of fact, such amount of wool will rarely, if ever, be required. Of the light, shrinking skirted unwashed Australian merino, and of some of the long wools, only something over two pounds will be required, yet the "compensatory duty" is generally on a larger amount than is actually used.

(2) Then, again, the "compensatory duty" is given on the assumption that the cloths are made of all new wool, when, in fact, some are made partly of such wool and partly of mungo and other cheap adulterants, properly so to furnish for some purposes very cheap goods.

(3) Then, again, the "compensatory duty" is given on the assumption that the nominal duty of 11 cents per pound on unwashed merino in the McKinley act, or 6.6 cents in the Dingley bill, is in fact the real duty to be compensated for, when in fact the nominal duty of 11 cents on unwashed, unskirted Australian merino gave to Ohio merino washed shrinking 55 per cent a protection benefit of only 6 cents, and for unwashed but little over 4 cents, and under the Dingley bill the protective benefit would be on washed Ohio merino 3.60 cents per pound, and on unwashed less than 3 cents, and still less on Montana, Colorado, and similar wools with their heavy shrinkage.

(4) Then, again, much woolen and worsted cloth is made of third-class wools, with their very low duties, while the compensatory duty is computed on the basis of the higher duties on wools of class 1.

Thus actual protection for manufacturers is in practice much more than the nominal or apparent protection, while the actual protection for woolgrowers is much less than that apparently given.

(5) It is proper to say, however, that a part of the "compensatory duty" was really necessary as a protective duty, because the ad valorem did not fully measure difference between the cost of labor and capital in foreign countries and in this.

2. HOW THE DINGLEY BILL FAVORS MANUFACTURERS MORE THAN WOOLGROWERS.

It may be assumed that woolgrowers were not consulted in the preparation of the Dingley bill; certainly no member of the National Wool Growers' Association, in session in Washington in December, 1895, was, and representatives of the association, like those of other industries, were denied a hearing before the Committee of Ways and Means. Whether manufacturers were consulted I do not know, nor is it material, but it is very certain "that wool and woolen manufacturers do not get share and share alike" in protection under the bill. As already stated on wools of classes 1 and 2, it gives 60 per cent of the nominal duties of the McKinley act of 1890, but in practical operation considerably less than half such duties. (See Senate Document No. 17, introduction, and pp. 45-54.)

But the Dingley bill does not adopt the same rule or rate for woolen or worsted manufactures that it does for wool. It does not say that on "imported articles made of wool a duty equivalent to 60 per cent of that imposed by the act of 1890 shall be levied." Not at all; the "protective duties" of the act of 1890 on cloths and most other woolens and worsteds, except carpets, are the ad valorem duties; the specific duties are the "compensatory duties." It is important to observe this distinction. The Wilson bill rejected the specific duties because it made wool free. The Dingley bill gives to woolen and worsted manufactures generally 60 per cent of the specific "compensatory duties" of the act of 1890, which, in fact, are more than compensatory, but in fixing the "protective duties," it discards the act of 1890 and gives to such manufactures the ad valorem duties of the Wilson act of August 27, 1894, which are very nearly equal to the full "protective duties" of the act of 1890. Thus on woolen and worsted cloths the ad valorem or "protective duties" of the acts of 1890 and 1894 are as follows:

Act of 1894.

Under 50 cents per yard value, 40 per cent ad valorem.

Over 50 cents per yard value, 50 per cent ad valorem.

Act of 1890.

Under 50 cents per yard value, 40 per cent ad valorem.

Over 40 cents per yard value, 50 per ad valorem.

Thus the ad valorem rates-the protective rates-are the same in both laws; but as the ad valorems are on a different valuation, the Dingley bill would reduce the protective benefit somewhat below that of the act of 1890 on many of the imports-perhaps 10 per cent or more. But it would leave the protective benefit much more than 60 per cent of the protective duty of the act of 1890, and to secure this higher rate it adopted the ad valorems of the act of 1894.

3. AS TO YARNS.

On yarns over 40 cents per pound in value the protective ad valorem duty is the same-40 per cent in the acts of 1890 and 1894, and hence

the Dingley bill, on such yarns, gives the manufacturers the full protection of the McKinley act. In the act of 1890 the duty on yarns under 40 cents per pound in value is 35 per cent ad valorem; in the act of 1894 it is 30 per cent. So there are differences as to other manufactures between the acts of 1890 and 1894, but as to all such the Dingley bill gives more than 60 per cent of the protective benefit of the McKinley act.

4. AS TO FLANNELS AND BLANKETS.

The ad valorem duties on flannels and blankets were and are fixed on different values as follows:

In act 1890

In the Dingley bill, as in act 1894.

If the Dingley bill only gave 60 per cent of the act of 1890, the duty wound be

Difference gained to manufacturer by the Dingley bill rule

Per cent.

30, 35, and 40

25, 30, and 35

18, 21, and 24 7, 9, and 11 and other

This is presented simply by way of illustration of these duties, giving to manufacturers more protection than the rule applied to wool.

5. THE DUTY ON TOPS, ROVINGS, ETC.

The act of 1890 prescribed an ad valorem duty of 40 cents per pound and 50 per cent on those valued over 40 cents per pound, and besides these specific duties. These duties were prohibitory on tops.. The act of 1894 reduced the duty to 20 per cent, and tops were largely imported, 1,567,000 pounds in the first six months of 1995. This was ruinous to woolgrowers, but beneficial to manufacturers using tops.

The Dingley bill retains 60 per cent of the specific or compensatory duty, but only retains the very low protective duty of 20 per cent, thus inviting imports, whereas, if the bill had retained 60 per cent of the ad valorem protective duties of the act of 1890, the duties would have been higher, that is, 24 and 30 cents per pound, and hence more effective to exclude tops. This is a gain to manufacturers desiring to use tops, but injurious to woolgrowers desiring to exclude them.22

6. How CARPET MANUFACTURERS ARE PROVIDED FOR.

I have referred to only some paragraphs of the McKinley Act by way of illustration of some of the duties in it, and in the acts of 1867 and 1883.

(1) Other duties in these acts-as, for instance, on carpets were a specific sum per square yard, besides an ad valorem. These duties on many kinds of carpets were so largely protective as to be frequently prohibitory.

(2) And it is not a little remarkable that the Dingley bill gives to "carpets, druggets, bockings, mats, rugs, etc.," the entire full specific square-yard duty," including both its "protective" and "compensatory duty" of the McKinley Act of 1890. The reason for this, of course, would be urged that the bill gives to wools of the third class the duties of that act. But these duties are ad valorem, subject to all the frauds of such, and are so low as to be practically no benefit at all to woolgrowers, or very nearly so, especially as to China wools.

22 The woolgrowers desire "the most ample protection" on tops, rovings, yarns. Their import may aid some manufacturers, but will be ruinous to woolgrowers.