THE PROTECTIVE BENEFIT OF THE DINGLEY BILL.

Seventh. The Dingley bill gives 60 per cent of the protection to the woolgrowers, which under the McKinley law was equal to 18 cents per pound on XX Ohio washed, over 10 cents per pound on XX Ohio unwashed, and nearly 9 cents per pound on Texas, Montana, Oregon, and other fine Territory wool. That is to say, the price received by the American woolgrower under the McKinley period averaged that much more than received under free wool, and, as the Dingley bill proposes to restore 60 per cent of the McKinley duties, it is fair to assume if this bill is passed before the country is glutted with wool the improvement in price will be 60 per cent of that of the McKinley law.26

26 To this it may be said:

(1) The error of this has been demonstrated in footnotes 11, 12, 16 to Chapter I of this Document, to which attention is specially invited, and in the chapter which gives the rates of duty asked for by woolgrowers, see, post.

(2) Theodore Justice, in a letter to William Lawrence, November 16, 1896, said: "Even if you are right that the Dingley bill is equal only to 24 cents per pound, which may be right as regards very dirty [unwashed] wools shrinking 70 per cent, [yet] 2 cents duty is better than nothing."

Even this is erroneous as to the amount of protective benefit to wools shrinking 70 per cent-it will not be quite 2 cents.

(3) In proof of this, the following is submitted:

"S. N. D. NORTH, Esq., Boston:

NEW YORK, July 24, 1893.

"DEAR SIR: Your favor of the 21st instant is received, inclosing proof slip of the letter and tables prepared by us a year ago for the Senate Finance Committee, with the request to make the calculations with which said letter concludes, based upon the prices of Ohio fine washed fleeces and Port Philip good average grease, as these prices stood on July 1, 1893. viz:

"Continuing that same basis of calculation, we reach the following result, "Ohio fine-washed fleece costing 24 cents July 1, 1893, and shrinking 55 per cent, costs 53 cents per scoured pound.

"Port Philip good average grease, costing in London, July 1, 1893, 18 cents, and also shrinking 55 per cent, costs in the United States, duty and charges paid, 67 cents per scoured pound, as follows:

"Cost in London, 40 cents per scoured pound.

"The difference between 53 cents and 40 cents, or 134 cents, is the amount by which the price of Ohio fine scoured wool is enhanced because of the duty and charges. This, on fine Ohio, shrinking 55 per cent, is equivalent to 6 cents in the washed condition.

"If we assume the duty of 11 cents per pound removed, and take the prices of Ohio and Port Philip that ruled July 1, 1893, as the basis of another calculation, viz:

"Ohio fine-washed fleece costing 24 cents and shrinking 55 per cent gives clean cost 53 cents, and

Port Phillip, good average, costing in London...
Freight and charges added..

Making cost landed in the United States....

$0.18

.0150

0. 1950

which, shrinking 55 per cent, gives clean cost of 43 cents, we still find Ohio fine washed costing more than Port Philip on this calculation, 10 cents per scoured pound more; but it would really be greater, inasmuch as Ohio fine-washed fleece is not skirted, and its cost is thereby increased over that of Port Philip, at least 3 cents per scoured pound, in our opinion. The difference of, say, 13 cents per scoured pound is, on fine Ohio, shrinking 55 per cent, equivalent to about 6 cents per pound in the washed condition.

"We reach the conclusion, therefore, that the inquiry 'Whether it is true that

5. THE GOLD PREMIUM.

Eighth. The failure to give prompt protection to woolgrowers in the States of California, Oregon, North Dakota, Indiana, Kentucky, and West Virginia, where the free-silver sentiment is strong, may change the political complexion of those States, for a change of only 25,000 votes from McKinley to Bryan would have carried those States and the country for Bryan, even if all the rest of the States which gave McKinley their electoral vote had done so unanimously. If woolgrowers are disappointed, they may change from custom-house protection to such protection as they can get by a premium on gold, which would be the result of the free coinage of silver. Many woolgrowers who held these free-silver views were disgusted with the action of the silver Senators in defeating the Dingley bill last winter and voted for McKinley because of this action, and also because of Bryan's speeches and vote in favor of the Wilson bill, which not only destroyed a large part of the woolgrowing industry,

the great decline in the price of domestic wool has actually resulted in bringing it temporarily down to a free-wool basis' is easily answered in the negative. "It may be assumed that, upon the removal of the duty of 11 cents per pound, the price of Port Philip good average wool would advance somewhat in the London market.

"What this advance might be, or how permanent it would be, no one can predict. Besides, there is another feature in the case which may properly be considered in this connection; i. e., that there are some Australian wools which, because of their heavy shrink, have not been bought for the United States. Such wools are relatively cheaper to the foreign manufacturer than the wools usually imported to this country.

"In the event of 'free wool' the advance would be more likely to take place on these heavy shrink wools rather than on those hitherto brought here under the duty of 11 cents per pound.

"Yours truly,

MAUGER & AVERY."

Now, if the McKinley Act of 1890 only gave a protective benefit of 6 cents per pound on Ohio WASHED merino, shrinking 55 per cent in scouring, the Dingley bill would give only 3.6 cents on Ohio WASHED, and this would give only about 2 cents on wool shrinking 70 per cent. This is shown by the following, taken from the Senate Doc. No. 17, Fifty-fourth Congress, first session, p. 52:

THE RESULT IS, that under the act of 1890 a duty of 11 cents per pound on unwashed Australasian "skirted" merino wools, of the same quality of American unwashed fleece merino, gave to the woolgrowers of the United States a measure of protective benefit, as follows:

The freight rates from some parts of the far west, especially California, are less than 2 cents per pound, but the charges for carriage from ranches to railroad stations constitute an item of expense, and these wools are subject to commissions in reaching the manufacturers.

Thus the net benefit would be, on far west wools, under the Dingley bill, only 60 per cent of 2 cents, or 1.5 cents.

The advantages which Australasian merino has over our American merino are shown in footnotes 12 and 16 of Chapter I of this document, to which reference is especially made to save the space of repeating.

These advantages just by so much reduce the protective benefit of the tariff.

but closed half of the woolen mills, thereby losing to woolgrowers the only market for their wool they ever had.27

PROTECTIVE BENEFIT TO WOOL MANUFACTURERS.

Ninth. The Dingley bill gives the woolen manufacturer no advantage whatever, except that which he receives through the duties upon wool. It recognizes to the same degree but no more, as did the McKinley law, the compensatory feature. This is necessary because of the fact that it takes four pounds of American Merino wool unwashed to make one pound of finished cloth, and the Custom House duty upon the latter is four times the duty upon one pound of unwashed wool. The only advantage to the manufacturer in the Dingley bill is through the fact that the compensatory duties upon manufactures of wool, which the Dingley bill restores, are specific duties which can not be avoided by dishonest importers, as they are at present under the ad valorem feature of the Wilson law. This is the main reason why at the present moment, even with the alleged advantages of free wool, less than half of the woolen mills of the United States are employed. 28

XIV. WILLIAM B. THORNTON ON THE DINGLEY BILL.

WARNS WOOL MEN.-WILLIAM B. THORNTON, AN EMINENT WOOL MERCHANT OF CHICAGO, SEES DANGER IN PENDING LEGISLATION.MENACE TO BIG INTERESTS.-MEASURE BEFORE THE SENATE HE THINKS IS DEFECTIVE.-DEALERS AND PRODUCERS ARE CALLED UPON TO RALLY AGAINST THE MEASURE.

[From the Daily Chicago Inter Ocean, January 13, 1896.]

CHICAGO, ILL., January 10, 1896. To the Editor: In the interest of the great wool industry of the United States, I believe the time has arrived for both merchants who deal in wool and the producers of wool to unite their forces against the measure which has already passed the House of Representatives, and is now before the Senate of the United States. This bill, which found its origin in the hands of the Ways and Means Committee, of which Nelson Dingley is chairman, is an act which would be eventually, should it unfortunately become a law, detrimental to every woolgrower in the land.

II. DEFECTS IN THE ACT OF 1890.

It is a well-known fact that the wool tariff bill passed on October 1, 1890, of which William McKinley, of Ohio, was the author, and which at that time was intended to protect fully the wool and woolen interests of the United States, although right in principle, proved unjust to the

27 The subject of the gold premium is discussed in footnote 9 of Chapter I of this document quod ride. Also in Chapter III of this document. The Republican woolgrowers in the States above referred to voted for McKinley for President, notwithstanding their leanings toward free silver, and Democratic woolgrowers did the same because the Republican national platform promised for wool "THE MOST AMPLE PROTECTION.”

The Dingley bill gives no fair protection at all. The report of the Committee on Ways and Means says they "have not undertaken a general revision of the tariff on protection lines."

If the Dingley bill shall be passed unamended, with its provision for a continuance until "August 1, 1898," then indeed there is strong ground to believe that woolgrowers thus disappointed-who saved the election of McKinley-"may change from custom-house protection to such protection as they can get by a premium on gold, which would be the result of free coinage."

25 But the Dingley bill gives wool manufacturers more protective benefit than it gives to woolgrowers. This has been demonstrated in the foregoing open letter to Hon. Thomas H. Carter.

The bill does not give manufacturers enough duty.

S. Doc. 17———5

grower.

The bill was filled with loopholes whereby the manufacturers could derive colossal benefits, while the woolgrower, who expected to receive full protection, in reality realized about one-half.

II.-REAL EFFECT OF THE DINGLEY BILL.

This emergency Dingley bill, which passed through the House so quickly, without any scrutiny into the act of 1890, instead of protecting the growers 60 per cent of that act really, by the substitutes of wool, only protects them about 30 per cent. The protection only 3.6 cents. In other words, instead of the Treasury receiving a revenue of 6.6 cents per pound on wools of the first class, under this measure it would not obtain but 3.3 cents per pound. Many who are not posted and have not given to it that careful study which a tariff on wool at this time demands wonder why it does not give the desired protection. For the benefit of those individuals, as well as the entire wool producing interest of this country, I will make the iniquity of the act so patent that everybody may readily understand.

DEFECTS IN THE ACT OF 1890.

The McKinley law was made up, as all are well aware, of three classes of wool. The first class, which was composed of all wools of merino blood, or any part thereof, paid a duty of 11 cents per pound in the unwashed state, double the duty if washed, and three times the duty if scoured. Instead of the duty as given protecting unwashed wools in the original condition, as shorn from the sheep, it simply gave an opportunity to foreign manipulators to skirt and sort these wools, robbing them of the skirts, the neck, and breeches, and any portion of the fleece that was not perfect wool.

By this process of manipulating they so far improved wools in their unwashed state that this substitute, so perfected in condition, quality, and general merit competed with our wools raised in the Middle States, instead of unwashed fleeces which the act was intended to cover.

Here was a class of stock admitted under a duty of 11 cents per pound that drove out of competition all unwashed wools of merino blood, and also from its superior condition reduced the price of American wools under this class while the McKinley act was in force. Many attributed it at the time, not knowing the true facts, to the low prices of wool on the continent, when in reality it was the scheming foreigner, through his emissaries here, who outgeneraled our tariff makers.

ONLY HALF THE DUTY WAS PAID.

Paragraph No. 383 of the McKinley act of 1890 reads as follows:

Any foreign substance or what has been sorted or increased in value by the rejection of any part of the original fleece shall be twice the duty to which it would otherwise be subject: "Provided, that skirted wools as now imported are hereby accepted."

This latter clause exempting wools from a double duty made all sorted stock simply null and void, because the foreign manipulator so systematically skirted wools that were imported that millions of pounds were brought in under a duty of 11 cents per pound, which should have paid a duty of 22 cents per pound.

This lowered the price of all unwashed, domestic, and territory wools as well as all washed fleeces raised in the Middle States, and virtually robbed the United States Treasury of revenue and the grower of the protection that was intended for wools of the first class.

2. AS TO SECOND-CLASS WOOLS.

Again, on second-class wools a tariff was placed of 12 cents per pound, whether washed or unwashed. The consequence was a number of million pounds were imported under the McKinley act that were used by clothing manufacturers (although down combing wools) in the production of various woolen fabrics. This was strictly an infringement on wools of the first class, because washed wools in this class paid a double duty, while in the second class they came in under the same duty as unwashed wools.

Worsted manufacturers to-day can use all kinds of wool, consequently the act creating the second class on worsted wools made a big loophole for fraud. All who have watched the importation of different classes of stock can readily understand how this feature in the act defeated proper protection.

3. AS TO THIRD-CLASS WOOLS.

On wools of the third class two duties were placed, as follows: All wool costing 13 cents per pound and under paid a duty of 32 per cent ad valorem, while wools costing over 13 cents per pound paid a duty of 50 per ad valorem.

This class has probably covered more than either of the two above mentioned. In 1893, under the McKinley measure, 125,611,283 pounds were admitted, which only paid a duty of 32 per cent ad valorem, while only 3,041,337 pounds paid a duty of 50 per cent ad valorem.

Large quantities of the wools admitted under the lower duty were used by the woolen and worsted interest of the United States in the manufacture of all classes of goods, which was not intended by the framer of the act.

4. FURTHER DEFECTS CITED.

Donskoi wools are well known to be washed after they leave the sheep's back, which consequently makes them a scoured product instead of a washed one, and should have paid a treble duty, or 94 per cent ad valorem, instead of the low duty of 32 per cent. The same iniquities in false values were found in Bagdads, Smyrnas, and other similar stock that was not used strictly in the manufacture of carpets, but took the place of our medium and low medium wools, such as are raised in the Middle States.

Now, is it reasonable to suppose that the great wool interest of the United States will support a measure so lacking in equity and riddled with loopholes that permit fraud?

5. THE DINGLEY BILL.

An emergency bill that is framed on such a false foundation would give no lasting benefits of justice to the grower.

What the wool interest desires is a bill so carefully framed that it will fully protect, no matter how small the protection agreed upon by Washington legislators.

A clause should be placed in the tariff bill on wool so plain that all substitutes would be obliged to pay a double duty in the class wherein they belong-whether unwashed, washed, or scoured wools.