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It will be seen that the differences between the inland rates and the export rates sometimes exceed 100 per cent; for example, on a consignment of 5,000 kilograms the inland rate is 24 francs and the export rate 11.4 francs. This difference will serve to explain in part how foreign goods can, even with the duties to pay, compete successfully in our domestic markets with our own products.

With this advantage added to undervaluations of the goods, which in some lines are common, it is not surprising that foreigners often overcome our duties, even when they are as high as 60 per cent, and enjoy increasing sales in this country.

The Industrial Commission gave a little attention to this subject, having learned that Welsh tin plates were delivered in St. Paul at a lower cost for freight than was charged on tin plates from Pittsburg. Of course our Government has no control over foreign railroads, except what it may exert indirectly, over roads in this country uniting with them in making low through rates. But the commission thought the evil a sufficient menace to home industries so that they made this recommendation to Congress:

"4. That railroad companies be prohibited by law from making lower freight rates upon imports billed to the interior of this country, in connection with ocean transportation or otherwise, than are made on similar articles from the seaboard to the interior, or than are made from one inland point to another when the distance is not greater."

Congress has not yet acted upon the recommendation. Doubtless the subject will be found full of difficulty, but something ought to be done to prevent neutralizing tariff rates by freight rates.

It is known that our railroads are making lower rates on export business than on domestic business. It is this, to a great extent, which enables some of our merchants and manufacturers to sell lower abroad than at home. The Democratic platform attributes the evil to the tariff, but there is no tariff on exports and the duties on imports are hardly sufficient to offset the lower foreign labor cost, therefore low prices abroad are not made because unduly high prices are charged at home, for there is enough foreign competition here to keep prices down.

Every man who is incuned to accept the Democratic idea should ask himself how we can protect our industries against foreign dumping, aided by special export rates on government railroads, and by low wages and in some countries long days of labor, except by a tariff. Shall we allow the productive industries which give employment to our people to be crushed by foreign industries aided by state railroads and subsidized ships? Individuals, or companies, or even combinations of companies, can not compete with governments. Our Government would be supine if it did not shield its people and their industries from foreign aggression.

EXHIBIT B.

(Dispatch from Chicago, dated March 18, 1905.)

During the remainder of this year all the import traffic which moves through the Atlantic and Gulf ports will be carried on cut rates. This fact developed at the joint import conference which was held here yesterday with representatives present from all of the trunk lines, the Central Freight Association lines, and lines between Chicago and the Missouri River and between the Gulf and the river.

When an attempt was made to secure a restoration of import rates it quickly developed that practically all of the import traffic for the current year had been contracted for on reduced rates averaging not more than 50 per cent of the normal tariffs. All effort, therefore, to obtain a restoration of the rates was abandoned.

GERMAN TARIFF AGREEMENT.

HON. J. HAMPTON MOORE, M. C., SUBMITS RESOLUTIONS ADOPTED BY THE NATIONAL ASSOCIATION OF HOSIERY AND UNDERWEAR MANUFACTURERS.

Hon. SERENO E. PAYNE,

WASHINGTON, D. C., December 4, 1908.

Chairman Committee on Ways and Means,

Washington, D. C.

DEAR MR. CHAIRMAN: I inclose herewith resolutions on behalf of the National Association of Hosiery and Underwear Manufac

turers, protesting against the German tariff agreement, all of which is in line with many communications I have received from hosiery manufacturers in the Third Pennsylvania District.

Very truly, yours,

J. HAMPTON MOORE, M. C.

To the President and Members of Congress:

Pursuant to instructions in annual convention assembled at Philadelphia, Pa., May 12, 1908, I have the honor to hand you the accompanying preamble and resolutions adopted by the National Association of Hosiery and Underwear Manufacturers.

C. B. CARTER, Secretary and Treasurer.

Whereas the United States Government has entered into a tariff trade agreement with the German Empire which embodies important customs administrative concessions and important amendments to the customs administrative act:

Resolved, That the National Association of Hosiery and Underwear Manufacturers in annual convention assembled earnestly protests against the provisions of the German tariff agreement, now extended to other countries of the Continent, as contrary to law, contrary to policy of protection, injurious to American labor, unfair to the honest importer, demoralizing to the customs service, and in effect a material and indiscriminate reduction in the tariff which should be made only after hearings granted, and then by the legislative branch of the Government; and

Resolved, That the National Association of Hosiery and Underwear Manufacturers thanks the Congress of the United States for not adopting the recommendations of the administration as to amendments to our customs laws; and

Resolved, That copies of these resolutions be forwarded to the President and to each Member of Congress.

GRADUAL CHANGES.

THE SPENCER IMPORTING AND TRADING COMPANY, NEW YORK CITY, SUGGESTS A GRADUAL INCREASE OR DECREASE IN THE TARIFF RATES WHICH MAY BE ADOPTED.

No. 163 GREENWICH STREET,
New York, December 30, 1908.

COMMITTEE ON WAYS AND MEANS,

House of Representatives, Washington, D. C.

DEAR SIRS: It is easier to swindle the Government under a specific duty than it is when rates are ad valorem, as there is only one man to handle, viz, the weigher on the dock, and it is almost impossible to swindle the Government under an ad valorem tariff, as all articles of import have their market values day by day at their place of production, just the same as wheat, corn, and oats have their values on the exchanges and in the markets of this country. Besides this, the

collector's office, the surveyor's office, the appraiser's department, the United States consuls and consular agents, and all the merchants at home and abroad in any special line of merchandise of any importance constitute a great detective body of men to protect the Government and the trade interests of all the people in that line.

Now, as to changing the tariff, you very well know that tariff agitation not so many years ago between protection and revenue kept the commercial affairs of this country almost constantly stirred up; then came the settlement of the dimension of the financial yard stick, then labor settlement, then prosperity, and then the deluge.

Now the country does not want any more upsets or agitation. Consequently the first duty of the tariff commission is to recommend any changes up or down in the tariff, which should be at the rate of 1 per cent per month the first year, this difference to be settled arbitrarily by the Treasury Department, and at the rate of 10 per cent per month after the first year. This would enable every one to go on with their business, and it would reduce changes to almost an interest basis, and with a year to arrange matters differences would easily stand 10 per cent per month until a minimum or maximum ad valorem rate is reached.

Another feature of importance is for the Treasury or appraiser's department to have authority to fix rates of duty on articles not enumerated, and no article to be free which is the by-product or a constituent part of an article on which a duty is assessed, viz: Why should I pay 6 cents on shelled almonds, and the oil extracted from the almonds come in free, and the almond cake or meal, after expressing the oil, come in at a nominal rate? A clause should be inserted in the tariff with an arbitrary power on the part of the appraisers to equalize tariff in such cases, whether the article is provided for or not in the tariff. All of my propositions would take some figuring, but better to employ a corps of men at figures in the steady development of trade and commerce than to employ a body of experts to figure on naval construction and coast defences, because commerce is a greater peacemaker than either.

Another thing in conclusion, and this is, I advocate the importation of ships by paying a duty, and the same freedom to manage same as the individual manages his fishing boat and his horse and wagon. Why not right the wrong of the past forty years, reclaim the boys of our Atlantic coast, and save that part of our great country from drifting into barbarism?

Very truly, yours,

SPENCER IMPORTING AND TRADING CO.
JAS. H. SPENCER, President.

HON. WILLIAM S. BENNET, M. C., FILES LETTER OF WILLIAM M. CHADBOURNE, OF NEW YORK CITY, RELATIVE TO MAKING GRADUAL CHANGES IN TARIFF.

Hon. SERENO E. PAYNE,

DECEMBER 15, 1908.

House of Representatives, Washington, D. C.

MY DEAR MR. PAYNE: Inclosed please find a letter from a very active Republican lawyer in New York City, which bears evidence of thought and consideration.

Will you please return the letter with any reply you may do me the honor of making?

Very truly, yours,

Hon. WILLIAM S. BENNET, M. C.,

WILLIAM S. BENNET.

49 WALL STREET, New York, December 14, 1908.

Washington, D. C.

MY DEAR CONGRESSMAN: Will you permit me to put in a little more formal shape my suggestion to you over the telephone yesterday? I have been in the last few weeks strongly impressed with the effect which the uncertainties of tariff revision have upon the business interests of this country. I feel, therefore, that the return to normal business activity would be facilitated if an assurance could be given that any change in the tariff would be so gradual that business would have a chance to adjust itself to the change.

Such a gradual change could be accomplished by extending the reduction to be made by the new tariff act over a series of years. Thus, if a reduction of 50 per cent is made in the tariff on steel plates, the reduction could be spread over a series of five years, the tariff being reduced 10 per cent each year. A reduction of 10 per cent in the amount of the tariff would be, in most instances, I think, so slight that the merchants' and manufacturers' allowance for fluctuations from ordinary causes would take care of it.

I have always felt that the reductions in the tariff effected by the Wilson bill were so brutal that, wholly apart from the question of protection and free trade, their effect could be little short of disastrous, and I think these reductions contributed in considerable measure to the depression of 1892 to 1896. Surely we should profit by the example of our political opponents and arrange that any changes which we make should be gradual.

It seems to me that it would be well if some one high in the councils of the party should, if the plan above outlined commends itself, give out a statement to this effect. It is the uncertainty of what changes are to be made which, even more than the actual changes themselves, tends to paralyze business until the worst is known. Such a statement would, I am sure, set many anxious minds at

rest.

. Such a gradual reduction in the tariff finds precedent in the compromise tariff act of 1833. Of this act Taussig, in his authoritative Tariff History of the United States, speaks as follows:

In 1833 the compromise tariff act was passed, and remained in force until 1842. That act, there can be little doubt, was the result of an agreement between Clay and Calhoun, the leaders of the protectionists and free traders, while it secured also the support of the Jackson administration. Clay had been hitherto the most uncompromising of the protectionists; Calhoun had represented the extreme southern demand that duties should be reduced to a horizontal level of 15 or 20 per cent. The compromise provided for the retention of a considerable degree of protection for nearly nine years, and thereafter for a rapid reduction to a uniform 20 per cent rate. The tariff of 1832 was the starting point. All duties which in that tariff exceeded 20 per cent were to have one-tenth of the excess over 20 per cent taken off on January 1, 1834; one-tenth more on January 1, 1836; again one-tenth in 1838; and another in 1840 That is, by 1840, four-tenths of the excess over 20 per cent would be gone. Then, on January 1, 1842, one half the remaining excess was to be taken off; and on July 1, 1842, the other half of the remaining excess was to go. After July 1, 1842, therefore, there would be a uniform rate of 20 per cent on all articles. Obviously, the reduction was very gradual from 1833 till 1842, while in the first six months of 1842 a sharp and sudden reduction was to take place.

Hoping that you will give me the pleasure of your company at dinner when you are next in New York, I am,

Yours, very truly,

WILLIAM M. CHADBOURNE.

GRADUATED REDUCTION OF TARIFF.

SELDEN BACON, NEW YORK CITY, SUGGESTS THAT REDUCTIONS IN PROPOSED BILL BE MADE GRADUALLY.

Hon. SERENO E. PAYNE,

PAYNE,
Auburn, N. Y.

NEW YORK, November 9, 1908.

DEAR SIR: I inclose you copy of a letter I recently sent to Senator J. C. Burrows and of his note in answer to it.

I may add that I have submitted the proposal to a number of business and financial men, who seem all disposed to regard the suggestion as a wise one. I believe something like it was suggested several years ago, but I am not sure that the matter of inserting the clause in the bill, as suggested, with a corresponding relief of tension while the bill is under consideration, was ever distinctly brought forward.

Yours, very respectfully,

Mr. SELDEN BACON,

New York, N. Y.

SELDEN BACON. NOVEMBER 7, 1908.

MY DEAR MR. BACON: I am in receipt of yours of the 4th instant containing suggestions in relation to the proposed revision of the tariff, and I note all you say in relation to the method of procedure. Of course you are aware that the House takes the initiative in the matter of revision, and I would suggest that you communicate with Mr. Payne, of New York, who is chairman of the Committee on Ways and Means, giving him your views in the matter, which I think are worthy of consideration.

Very cordially, yours,

Hon. J. C. BURROWS,

U. S. Senate.

J. C. BURROWS.

NEW YORK CITY, November 4, 1908.

MY DEAR SENATOR BURROWs: The election of Judge Taft has obviously cleared away a great deal of anxiety in the business world. But our great merchants and manufacturers are still disturbed over impending probable changes in the tariff. And their continued uncertainties necessarily deeply affect all the rest of the community. Is it not possible to relieve their anxieties by the adoption of a simple general principle in making any changes? Marked changes in the tariff are especially troublesome, because they come more or less suddenly, and this difficulty expresses itself chiefly in two ways.

The merchant or manufacturer needs to accommodate his business arrangements to the change. This can be relieved in some measure

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