The last man to be heard from in the making of the Dingley Bill, as indeed of its predecessors, was the man who was to buy the goods. In 1896, when the tariff hearings were going on, Mr. Louis Brandeis of Boston, at that time unknown outside of his own professional circle, appeared “for the consumers” as he told the Committee. He was laughed at for his pains. “What’s the use?” was Mr. Dalzell’s protest; “Oh, let him run down,” his sneer, when Mr. Brandeis insisted that it was his right to say what he thought about duties which made his necessaries dearer. A recurring note in the hearings held in Washington, before the Payne-Aldrich Bill, was contempt for the suggestion that this or that duty made an article cost a cent or two more at retail. What was a cent to a consumer! This was particularly noticeable in the argument of the wool interests. What if the tariff did make the cloth for a suit of clothes a few cents dearer a yard—it did not add a large amount to the price of the cheap suit. It was not worth considering.

What is a cent to a consumer? Are there a considerable number of people in this country living on incomes so small that a rise of a cent or two in the price of necessary articles of food and clothing can make a material difference to them? To most Americans “the poor” in the United States are a negligible quantity. We think of them as the frayed and falling fringe on our great fabric of “comfortable off” population—largely what they are by their own indolence or inefficiency. But is this true? Is it not true, on the contrary, that the great majority of the inhabitants of the country, the great mass of hard-working, industrious men and women are poor? The statistics of the distribution of wealth should be often set before those hopeful souls, who, prosperous themselves, love to insist that, in this country at least, “all is for the best in the best possible of worlds.”

We have 92,000,000 people in the United States. Perhaps there are a few thousand millionnaires among us, perhaps a few hundred thousand having an income of ten thousand dollars or more. But in contrast to them there are millions of individuals whose wage is under a thousand. Look over the average yearly wages in our best-paid industries. Take the one which boasts of paying the highest wage—the United States Steel Trust. According to its last report the average wage of its 195,500 employees, including its foremen and clerks and managers, whose salaries in some cases are $10,000 even $25,000 a year, was but $775. In 1905 the average yearly earnings of the men in the cotton industry was but $416. In 1907 the mule spinners in the Massachusetts woollen factories averaged $13.16 a week, the dyers averaged $8.58, the weavers $11.60. There are probably several millions of white families in the United States whose average wage is not over $500 a year. When one comes to examine industries generally, the surprise is not how much, but how little the great body of wage-earners receive. People must live on small earnings in this country, as everywhere. In order to accumulate enough to provide against sickness and old age they are obliged to practise a thrift which frequently is hateful, it is so cruel. Moreover, genuine thrift requires so much training, intelligence, and self-denial that comparatively few are prepared to practise it, even with the best of intentions. This is the hard fact, and yet the Congress of the United States for fifty years has fixed taxes on the food and clothing and shelter of these people with no apparent consciousness of their condition. They were the “ultimate consumers”—terms in a problem—not suffering, struggling men and women.

If one would know with something like scientific precision what it means for a family to live on $500 or less a year in a city like New York, for instance, if he would realize the relation of a rise of even a cent in the cost of a necessity to the comfort of the multitude of working girls in this country on $6.00 and $8.00 a week, he should study the various investigations recently made into the budgets of these two classes. They demonstrate that if one is to take care of a family of five persons in New York City on $500 a year, or of himself on a wage of $6.00 or $8.00 a week, he must think before he buys a penny newspaper, and he must save and plan for months to get a yearly holiday for the family at Coney Island; that there is practically no possibility of a nest egg or of schooling for the children beyond fourteen years of age, that sickness means debt or charity, and that the accumulation of those things which make for comfort and beauty in a home is out of the question. To these families an increase of a cent in the price of a quart of milk is something like a catastrophe. To these girls, every penny added to the cost of food, of coal, of common articles of clothing, means simply less food, less warmth, less covering, when at the best they never can have enough of any one of these necessaries. These budgets are a powerful demonstration that the rapid rise in the cost of living under the Dingley Bill was to a vast number of people of this country nothing less than a tragedy, for what is true in New York City is equally true in Chicago, in Pittsburg, and in many factory towns. The statistics, which show the rise in prices from 1897 onward, are as sensational as those which show the increase in national wealth. For instance, take what the bulletin of the Labor Bureau calls the “annual per capita cost of the necessaries of daily consumption.” It rose from $74.31 in 1896 to $107.26 in 1906. Coal which cost $3.50 a ton in 1896 cost $4.50 in 1906. Manufactured commodities were 32 per cent higher in 1906 than ten years before, raw commodities, 50 per cent higher. “All commodities” averaged 35.4 per cent higher. Rents soared everywhere. That wages increased largely in many industries in this decade is equally true, but that they increased correspondingly in any but the most favored industries—those where either the Unions exercised compelling power or those where the managers were unusually enlightened—is doubtful. A government investigation of the wages in about 4000 establishments, employing 334,000 persons, engaged in manufacturing and mechanical industries, the kind of establishments where, of course, the forces which raise wages act most freely and successfully, shows that in 1906 the weekly wages of the 334,000 were 19.1 per cent higher than in 1896, while, as said, the cost of all commodities was 35 per cent higher. Wages increased 3.9 per cent in 1906 over 1905, while the cost of the commodities increased 5.9 per cent. Now what does this mean? Why, simply this, that at a time when wealth was rolling up as never before (this country increased its wealth between 1900 and 1904 by about twenty billions of dollars), a vast number of hard-working people in this country were really having a more difficult time making ends meet than they have ever had before. It also means that in a great number of other hard-working families the increase in wages had been so little in excess of the increase in the cost of living that it may be almost said to have been a discouragement instead of a comfort, by intensifying the common conviction of the working-man that no matter how much he earns he will still have to spend it all in the same hard struggle to get on, that there is no such thing for him as getting ahead.

There is no escaping the seriousness of such a situation. The only chance of peace and of permanency in this country lies in securing for the laboring classes an increasing share of increasing wealth. It is not enough that the wages of men keep up with their forced expenditures,—they must go beyond. There must be a growing margin between the two—a margin wide enough for the laborer to see it, and to be able to draw hope and encouragement from it. When the margin has shrunk or not visibly increased, unrest and discouragement must follow. There is no doubt that a great number of employers in this country recognize this principle, and thousands of them are struggling to meet it by increasing wages. But there is another duty for us, and that is to keep down the cost of living. And it is this duty which the makers of tariff bills have always refused to face squarely and, as far as the tariff had any relation to it, honestly to discharge. That the Dingley Bill had not been the only cause of the increasing burden which the consumer bore is true, but it was a real cause, and in the case of certain essential common articles, almost the only cause. Take for illustration the case of the tariff and spool cotton. Spool cotton is as necessary an article of daily consumption in the household as fuel or cloth. Many women with families, on $500 a year, many shop and factory girls on $6.00 or $8.00 a week, make their own clothes. Not infrequently these women in their work are obliged, when not protected by a Union, to furnish their own thread. For many years the price of the ordinary 200–yard spool cotton was 5 cents, twelve spools for 50 cents, when suddenly in 1900 it was advanced to 6 cents, about double the price it was selling for in England. The cause of the advance offers one of the nicest studies we have of the beneficent effects on prices of a tariff combined with a trust.

The leading brand of thread which was sold in 1900 at 6 cents in New York and about half that in England, is made by J. & P. Coats, Limited, of Paisley, Scotland, and by the Coats thread combination in this country. The Coats House is the oldest and most progressive thread house in the world. It early saw the advantage of establishing a factory in the United States and competing for the American trade under the protection of the tariff. Other English firms also saw the advantage, chief among them the Clarke Mile End Spool Cotton Company of Newark, New Jersey. A few years ago the Coatses realized that a combination of the English concerns doing business here would be profitable, and one was brought about, the products of the amalgamation being handled by the Spool Cotton Company of New York City. In 1897 some sixteen of the English competitors of the Coats’s concern combined in a $10,000,000 trust, called the English Sewing Cotton Trust. The J. & P. Coats Company took $1,000,000 of the stock, and at least once since has helped the organization out of trouble by lending it $2,000,000. Thus the two concerns are working together. The next year, after the English combination was formed—1898—an American Thread Trust Company was formed. It was made up of the thirteen leading American concerns,—all, indeed, but one of the large domestic companies went into it. No sooner was this done than the English Trust bought the majority of the American Trust’s stock. Here, then, was an English Trust owning and controlling the American Trust and dictating its policy from the other side of the water. And this British Trust was affiliated and partly owned by the still larger concern, the J. & P. Coats Company. It comes down to this, that the $48,000,000 Coats concern controls practically the thread business of England and America. No sooner was the English control complete here than the price of thread was advanced.

Mr. Archibald Coats, the head of the Paisley concern, when twitted with using his monopoly to put up the price of thread, insisted that the advance was due entirely to the higher costs of materials. Moreover, he said, the concern was not a monopoly, that there were in the world 180 thread concerns outside of those in which he was interested. Mr. Coats’s materials were higher—cotton, fuel, spool-wood, had advanced, but on the other hand, Mr. Coats himself called attention to the savings he and his colleagues effected by their combination, both in manufacturing and in selling. These economies the representatives of the American end of the Trust told the Industrial Commission in 1900 were “immense,” “tremendous.” Mr. Coats stated in his report of 1906 that the profits of his concern in the second five years of the combination—that is, after the price of thread went up, and also after the price of materials had gone up—were nearly a third greater than in the first five years. They certainly were highly satisfactory,—a profit of $12,636,000 a year on a capital of $48,600,000 is doing well! The fact seems to be that through a monopoly in this country which it was possible to perfect only because of the high tariff on spool cotton which had cut off all competition from the 180 concerns which in free-trade England might affect him somewhat, Mr. Coats was able to sell his thread here at a higher price than he did in England and to increase his profits in five years by some 33½ per cent, and this in a time when his materials had largely advanced. That is, Mr. Coats and his friends had been able to make the millions of this and other lands bear all the fluctuations and vicissitudes of the thread trade. Whatever happens, he could protect himself and his favored workmen from sharing any of the losses of his business; he could even increase his profits.

One of the necessary articles which steadily advanced in price after the Dingley Bill passed, was shoes. It was an advance which was particularly hard on the poor, for shoes are one of the heaviest expenses in clothing a family. One of the budgets reported in a recent investigation of living expenses in New York City was that of a family of four persons, respectable, hard-working, and anxious to get ahead. Their total income was $600. These four persons kept themselves “neat and clean” on $40.00 a year. Out of this $40.00, $11.81, or over one-fourth of the total, went for shoes and mending shoes. In another budget of a larger amount ($895) $61.90 was spent for clothing in a family of eight persons, and out of this $8.00 went for shoes for the father, $1.25 for the mother, $8.33 for the six children, or $17.58 of the entire appropriation for clothes and shoes. In the budget of a shop girl there is perhaps no one item which costs more anxiety than that of shoes, none more important. She must have them. They should be strong and weather-proof, for she must go and come in pouring rains and drifting snows. They should be well fitting, for she must often stand in them all day. The amounts spent in keeping themselves shod vary greatly, of course, according to the care of the girls, the distance they walk, the quality of the article bought; but when compared with the total allowance for clothes, the result is something appalling. Among the budgets of a recent investigation, was one of a woman forty years old, who had worked sixteen years at $6.00 a week in a well-managed New York factory. She sat at her work. She could have earned $8.00 a week by taking a place at the counter, but argued that the better clothes required and the wear and tear of standing would be really more expensive, so kept the $6.00 place. By limiting food she could save $1.00 a week. This gave her $53.00 a year for doctor, dentist, amusements, clothing, and “extras.” She spent $22.05 for clothes the year her budget was examined, and of this $7.16 went for shoes and rubbers. This woman was an especially careful person. Usually the sum credited to shoes is larger. They range from this one of $7.16 up to $26.60 spent by a girl who said she could not keep her feet dry on less than a pair of $2 shoes per month—$24.00 a year—with one pair for dress at $2.60; $26 for shoes on an income of $9.00 a week, cut down the year of the investigation to an average of $7.50 by illness!

It was hard enough for the poor to buy shoes before the Dingley tariff, but with every year since it has been harder. In woman’s ordinary shoes there was an increase of something like 25 per cent in the years from 1890 to 1899. There was a corresponding increase in all varieties of boots and shoes. Say that it has been 20 per cent and see what that means to your family of four which can spend but $40.00 a year on clothes and must put $11.81 of it on shoes.

But why should the price of shoes have increased? Under the extraordinary advance in shoe machinery, it should have decreased. The shoe was pinched by a combination of tariffs and trusts which can hardly be matched in any other industry in the country. First, there was the tariff laid on hides in 1897. For twenty-five years hides had been free and cheap, for South America sent us large quantities. The shoe dealers were taking all both markets offered. But the cattle-growers of the West raised a cry that they should have more money for their hides, that Congress should pass a law which would compel the people to give it to them. In 1890 a strong appeal was made to Mr. McKinley for such a duty and it is probable that he would have granted it, so great was his reverence for the doctrine, had not Mr. Blaine interfered. The duty was not granted in 1890, but in 1897 it was given. The effect was immediately to raise the price of sole leather. In June, 1906, W. L. Douglas, ex-Governor of Massachusetts, a shoe manufacturer, said in a public speech that since 1897 the increase to his company in the price of sole leather in a single pair of shoes had amounted to 17½ cents. Mr. Douglas figured that the tariff on hides and soles caused the people of this country to pay $30,000,000 a year more for shoes than they otherwise would. They paid this tax that perhaps 85,000 stock-raisers, herders, and drovers might get more for their cattle. It was argued that with the duty they could monopolize the domestic trade and cut off the South American trader, but that gentleman sent us more hides in 1906 than in any year since the duty was imposed! Moreover, it was not the cattle raiser who was chiefly or proportionately profited by the higher price. It was the Beef Trust, as Mr. Blaine said it would be. The cattleman received no such increase in the price of his steers as the beef men did in the price of hides. In November, 1907, the Hide and Leather Journal, commenting on the good thing the Trust had always made out of this particular duty, declared it was paying stock-raisers $12.50 apiece for cows, and selling the hides alone for $9.00 apiece!

But it takes something besides leather to make shoes. For one thing it takes thread—and thread, linen thread particularly, so advanced in price that it added perceptibly to the cost of making a pair of shoes. But why had thread advanced? It is a pretty study of combined tariff and trust manipulation. To begin with, we do not and never have raised in this country any flax suitable for making linen thread. In spite of this fact the Dingley Bill put a duty of $22.40 a ton on flax not dressed, and of $67.20 per ton on that which had been dressed. These were the rates of the McKinley Bill. Of course the avowed purpose of this duty was to protect the “infant industry” of raising flax for use in manufacturing. We have a good flax acreage in this country—though it has decreased by over 1,000,000 acres since 1902. But this flax is grown not for the fibre, but for the seed, being used for making linseed oil. It is the custom not to harvest it until the seeds are fully ripe, and when that time comes the straw is too old for fibre. It is true that in the Northwest a few tons of flax are used annually for making twine, upholstering tow, and insulating boards, but practically none of this is fit for making thread,—that is, in spite of the fact that we have been steadily paying from $20.00 to $22.00 a ton on undressed flax for many years, we have scarcely ever produced a ton fit for thread.

Of course the thread itself is protected, and this protection has worked in the linen thread industry very much as that on cotton thread. Seeing the tariff trend here, the great linen thread manufacturers of Great Britain followed the example of the Coats’s and Clarke’s cotton thread makers, and came here many years ago to produce under the protection of the tariff the thread they had been exporting. This went on until the Barbours of Lisburn, Ireland, had a branch at Paterson, New Jersey; the Finlaysons of Johnstone, Scotland, at Grafton, Massachusetts; the Dunbar Co. of Gilford, Ireland, at Greenwich, New York; the Marshals of Leeds, England, at Newark, New Jersey—all of the great British companies were here to preserve the market for themselves. Most efficient masters of their business—the Barbours were a century-old house—they grew rapidly under the high protection they enjoyed. The logic of their privilege was of course what it has been in all our highly protected industries—a trust. This came about a few years ago—the Linen Thread Company of which the president is Mr. William Barbour, and the vice-president A. R. Turner. The formation of the trust did wonders for the linen thread business. They were able to make large economies. Instead of separate mills making all the products each mill was assigned to do the work it could best do. At the same time the marketing expenses were reduced. In one of the communications to the tariff hearings of 1908–1909, a writer familiar with the industry says of these economies:

“One mill which, while independent, used to make $400,000 worth of thread per annum now makes $600,000, and another which made $250,000 now makes $400,000, an increased turnoff of about fifty per cent, and this without hiring an additional hand. This, of course, lessens the cost of manufacturing considerably. When the four mills were selling independently on this side, each of them carried stock in New York, Boston, Chicago, St. Louis, and San Francisco, and each had travelling men going over the territory. But with the advent of the combination all the stores in the various cities were turned into one, and a much smaller force is used to sell the products of the various mills.”

Now of course if the theory of the trust is sound, we should get some benefit from this combination on shoe thread, the only one of its products which we consider here. But what happened to shoe thread? In the last few years every variety has advanced rapidly. Increase in cost of materials—increase in rents—rapacious dealers—the trust people tell you. But the facts are these according to an expert authority: the linen thread trust were selling their shoe threads in 1909 for at least 50 per cent more on an average than they cost them, and they were able to do this almost entirely because of the duty which protected them from foreign competition. The cost of producing in Ireland a shoe thread known in the trade as No. 1 is 40 cents a pound. In the United States it is 47 cents. The duty on this thread was 19¾ cents a pound—12¾ cents more than was necessary to cover difference in cost—and the trust sold the thread 71 cents net a pound! No. 4 shoe thread cost 53 cents to make in Ireland. It cost 64 cents here. There was a duty of 25 cents a pound on it, and it sold at $1.20 a pound, nearly twice what it cost! In two years (1907–1908) its price jumped three times.

And what is the attitude of the Linen Thread Trust toward the protective tariff? Its members signed a petition to the Ways and Means Committee in 1909 in which they prayed that the duty be kept on flax. They wished to “encourage the fibre-producing industry,” they said—although they knew, nobody better, that no flax fibre for thread has ever been grown here, in spite of more than thirty years of tax-paying. Of course they asked that the duty on thread be untouched!

But a high protection tariff and a trust agreement are not the only advantages the Linen Thread Company enjoys. It has an alliance which gives it a commanding strategic position in the business, and that is with the organization popularly known as the “shoe-machinery trust.” This company began its life twelve years ago in New Jersey like so many of its kind. At that time, 1899, it was capitalized at $25,000,000, divided into preferred and common stock, the first at six per cent, the second at eight per cent. Six years after its organization the company underwent a reorganization. This reorganization seems to have been a way of getting rid of its extra earnings, for it presented its stockholders with comfortable extra cash dividends as well as a fifty per cent common stock dividend. According to the last report to which the writer has had access, 1907–1908, the capital of the company had in eight years increased from $17,250,000 to nearly $32,000,000, its surplus from $1,355,914 to over $13,500,000, and the net earnings from $1,770,110 to over $4,500,000.

One may fairly ask how they did it. It is clear enough when one looks at what they have had to go on. In the first place, the shoes of this country are now made almost entirely by machines. The first practical machine invented was the famous McKay sewing machine. It was followed rapidly by others: machines for welting, lasting, heeling, pegging, more than a score for performing the many complicated operations by which the modern “ready-made” shoe is built up. Up to 1899 these various machines were handled by different companies. But in that year the twelve most important concerns were combined into the trust named above, officially the United Shoe Machinery Company. Now there prevails and has since the days of McKay—who, by the way, was not the inventor but the promoter of the first shoe machine—a system of handling its output peculiar in manufacturing industries. It never sells, it always rents its machines. That is, a maker of shoes cannot buy for his factory the machines to do his work, as the ship-builder, the miller, the woollen manufacturer, can. He rents the machines for a term of years, paying a royalty on each shoe made. When the shoe machinery company was formed in 1899, it inherited this curious method. It took hold of its various acquisitions with rare energy and ability, its aim being to produce what it calls a system of shoe manufacturing. To accomplish this it proposed to “tie” together the machines it controls in such a way as to give a practical continuity of service. That is, each machine was to be so adjusted to the others that the shoe could be passed from one to another without loss of time or waste of effort. To do this effectually meant improving the old machines as well as adding new ones. The results of the combination of machines and of the improvement are extraordinary. It is a practically continuous service enabling the manufacturer to increase his product, and the laborer, who in the shoe industry is paid by the piece, to increase his earnings.

The management of the new organization proposed at the start not to raise the royalties paid at the time the combination was formed for the use of the various machines, and it has never done so. It proposed also to take off what had been a custom in the business—the initial charges for installing machines. Indeed, the company claims that while before the combination the initial charge for fitting out a factory was $12,000, it now is but $1700. In the case of many of the metallic machines, as they are called, the practice was to charge no rent, but to require the manufacturer to take from the companies certain findings, like tacks, wire nails, and eyelets; the company charged its own price, not the current one, and in this way got its pay. These prices probably were always high, but the company claims it has never raised them. That is, the new organization proposed to make no changes in what the manufacturer had been paying, but to increase its profits through the greater continuity and perfection of the service of its system.

But this of course meant that the manufacturer should use all the machines in its system; that is, all those that it had tied together. And to make sure that he did this, the company prepared a remarkable lease, requiring that all the machines it made pertaining to the bottoming of shoes beginning with the lasting of the uppers should be kept together; that is, that no outside machines for any of these processes could be used, and if an attempt was made to introduce one, the company had the right to take out the remaining machines of the system.

In addition to the regular bottoming and lasting machinery the company handled a large number of general machines, and it was specifically provided in the leases of each of these that it should not be used on shoes that had been lasted and welt-stitched, or turn-stitched on other machines than those put out by the company. The penalty for using the leased machine with outside machines was the forfeiture of all leases in all departments—also the breach made the lessees liable to an action for damages.

The New England Shoe and Leather Association considered certain features of the leases for the metallic fastening machines so objectionable that a long series of conferences was held in 1901 with the company, and certain modifications were obtained. Thus an alternative was secured for the ironclad lease covering the metallic fasteners by which the shoe manufacturer could use them with foreign machines by paying ten per cent more for his materials. (The rent of these machines, it will be remembered, was included in the price charged for the materials.) The penalty for disobedience was also lightened, and other concessions were obtained. Thus it is possible now to buy the general machines outright. The committee said quite frankly in its report that it was clear that the company intended to make such contracts as would give it a monopoly of the manufacture and renting of all shoe machinery, but it added it was patent that to do this it must continue to serve the shoe manufacturers better than they could be served elsewhere.

The monopoly the committee foresaw was of course inevitable. To-day the United Shoe Machinery Company owns more than ninety per cent of the shoe machinery of the country. Its profits are enormous, as the expansion noted above shows. The royalty on a pair of woman’s shoes is about three cents. On a pair of man’s shoes it is from four to five cents. In a factory turning out a thousand pairs a day of the former there is a royalty of $30.00 a day. The writer has talked with one shoe manufacturer who claimed he had paid $165,000 a year in royalties to the trust and upward of $100,000 for materials. Many would-be independent manufacturers claim they could reduce the cost of manufacture two cents a pair if allowed to own their machines. It is a common assertion among them that the royalties for the first year pay a reasonable price for the machines; that as the life of a machine is ten years, there are nine years of “unholy profits to the trust!” While discontent at the “benevolent despotism” which rules the business breaks out all over the country in spots, and a few energetic attempts are working to build up independent systems, the shoe manufacturers as a body have accepted the combination. Certainly they are getting from it such a service as they never had before, whatever the oppression. The shoe manufacturer can by the use of the “system” increase his product and the piece-paid laborer his wages. At the same time without raising royalties the company profits enormously. The person who gets no advantage is the man who buys the shoes. The royalty paid on each pair is just what it was when the trust was formed.

And what has the United Shoe Machinery Company to do with the Linen Thread Company? The president and the vice-president of the latter, Mr. William Barbour and Mr. A. R. Turner, are both directors in the former. Mr. Barbour, who is reputed to be the largest owner of the linen thread stock, is also a large individual stock-holder of United Shoe Machinery. Can any one doubt that such a relation has not been of importance to the Linen Thread Company in securing the 80 per cent of the linen thread business which it controls? Or would it be surprising, the power, the protection, and the surpluses of the two being given, if there soon was nobody outside of their fold making either linen thread or shoe machinery?

Moreover, is not the logical and almost inevitable result of the practical monopoly of these two interwoven concerns the rapid absorption of the shoe manufacturers themselves? Why, when they own and control all machinery and linen thread, and furnish a rapidly increasing list of the findings, should they stop there? Does not the strategy of the situation, do not the same arguments, the same laws which have led to the monopoly of each and the alliance of the two, force them into shoe manufacturing? This is no new alarm. In 1901, when the New England Shoe and Leather Association made the report referred to above, it said:

“The fear has been expressed that should one company control all the machinery in use in the production of shoes it would be quite easy and enormously profitable to create a trust which would be a monopoly in the shoe manufacturing business. The committee has not discovered the remotest indication of such intention. The present managers of the United Shoe Machinery Company are unusually able, experienced men, and they know that their profits are to come from coÖperation with shoe manufacturers rather than competition with them.”

That was true of the profits then; it is true now, but with recalcitrant manufacturers refusing to coÖperate—wanting to work out their own salvation—and with funds piling up for expansion, the “good of the shoe business,” which led to the first monopoly, will probably some day point strongly to a second.

There is but one force to hinder the final absorption of the shoe business by the combinations we have been considering, and it must be admitted that this is a powerful one—there is a rival trust with as rapacious a maw and as brutal a strength as any the country has produced on the trail of the shoe—that is the Beef Trust.

Twenty years ago when the amiable Mr. McKinley was disposed to give the duty on hides, Mr. Blaine wrote him, “It will yield a profit to the butcher (Beef Trust) only, the last man that needs it.” Mr. Blaine prevented the duty then—but Mr. Dingley gave it, and certainly the Beef Trust has profited as much as the shoe has suffered.

But while the cost of the leather steadily increased under the duty on hides, there was going on in the Beef Trust the inevitable combination which special privileges breed. Buying practically all the cattle on the hoof, the packers owned all the hides. Hides go to tanners to be prepared for sole leather. It has always been a prosperous and widely spread business in the country. But the dream of the Beef Trust is to allow nobody to do anything directly or indirectly connected with the steer which it can do. It owned the hides; why should it not tan them? And promptly it began to “acquire” tanneries. There is no space here to go into the history of the steady absorption by the packers of this great American industry which has been going on in the last few years. All that is essential here is the fact that to-day the united packers, Armour, Swift, and Morris control fully thirty of the largest tanneries in the country. And the next step? Signs of what it will be are already abroad. Repeated rumors have come that the Armours were going into the shoe business. In the reports of the tariff hearings of 1908–1909, is a letter from the president of the Wholesale Saddlery Association of the United States protesting against the duty on hides. In this letter he writes:

“The statement that follows may appear to you very far fetched, but it is my confident personal opinion that if the condition which confronts leather manufacturers and the manufacturers of leather articles continues and advances with the same strides during the next ten years that it has during the past five, not only will the beef packers control the manufacture of the leather, but they will likewise control by ownership the shoe, harness, belting, and other leather industries.” And this is only one of the several such intimations to be found in the reports. There is nothing surprising in it. That the packers should absorb the manufacturing from leather is quite as logical as that they should make leather. It was these facts and possibilities that forced the duty off hides in the Payne-Aldrich Bill, but it was only accomplished after a fight of the most unusual character.

The duty on thread was lowered in 1909, but there is no rational interpretation of the doctrine of protection which can defend that which it still carries. All that the suppliants pretend to ask is enough to cover the difference in wage cost here and abroad—enough to defend Mr. Barbour in the United States from Mr. Barbour in Ireland! According to the calculations of a practical independent thread man doing business in both countries, the actual difference in 1909 in the cost of production in Ireland and the United States in well-managed factories was not over six cents a pound. But the Payne Bill fixes the protection of the three linen threads most used in shoe-making at 15½ cents, 18¾ cents, and 20 cents. It is doubtful that this reduction is sufficient, now that the linen thread maker gets his raw material free, to produce any effect at all on the price to the trade. The duty is still grotesquely prohibitive.

When one goes over less important but still essential articles of the household, he finds numbers of them where the price advanced in the first decade after the Dingley Bill through a tariff-supported trust. Take the item of starch. From whatever product made it carried under the bill of 1897 a duty of 1½ cents a pound. Starch and its related products made from corn are now largely controlled by the Glucose Trust, as it is called—the Corn Products Company. The Glucose Trust is popularly known as a Standard Oil concern. That company has, to be sure, issued “A Protest and a Warning” against the association of the name of the two concerns. But so long as the headquarters of the Corn Products Company are 26 Broadway, its president a director of the Standard Oil Company and four of its directors on the Board of Directors of the Standard Oil Company, the protest and warning will have little influence on a cynical public. In a statement presented at the recent tariff hearings a complainant said that since the formation of the Glucose Trust in 1902, in spite of many improvements, chemical and mechanical, corn starch which for years had sold at $1.00 to $1.50 per 100 pounds in New York sold in car-load lots at $2.65 per 100 pounds! Without the tariff, this combination could not last a day for both England and Germany could compete with them. Not only compete in price, but outstrip them in quality, for naturally enough concerns like the Glucose Trust controlling a market are indifferent to quality. Quality is a thing which men are driven to by the fear of a rival taking their market. Take this fear away and you get inferior goods—that is, the poor are not only obliged under the protective tariff to pay more, but to buy more. Our potato starch factories also do not pretend to compete in quality with the German concerns in spite of the higher prices they get. They are not obliged to make the best goods. Their market is secure without it.

Tin plate is another household necessity of which the price was sharply advanced after the Dingley Bill and the formation of the tin plate trust. Domestic tin plate which was sold for $3.43 per 100 pounds in 1896, sold in 1900, under the Dingley tariff, for $4.67. While in 1906 we were paying $3.86 for our tin plate in New York, the Englishman was getting his about a dollar cheaper. The Englishman and the Standard Oil Company! The Standard Oil Company has been, for many years, probably the largest single consumer of tin plate in the country—practically all of the oil it sends to the Orient being put into tin cans which it manufactures itself from imported plate. One of the many curious features of our tariff laws is the system of drawbacks by which the duty on imported materials made into goods for export is rebated. These rebates or drawbacks are paid on many things, but the amount is insignificant excepting in two or three cases. Out of drawbacks aggregating something like five and a quarter millions in 1900 and five and three-quarters in 1906 by far the largest item was tin plate—$1,848,792 in the former year, $2,252,381.82 in the latter. That is, the man who in 1906 manufactured tin cans to sell to his countrymen paid about 20 per cent more for his material than the Standard Oil Company paid for what it manufactured to sell to the foreigner. Of course the home consumer of tin pails and milk pans paid the higher cost. As a result of taxing ourselves we have a tin plate industry in the United States. In 1900, as a result of the high prices of the decade preceding, 57 tin plate establishments had grown up where ten years before there were none. These 57 establishments employed about 4000 people and turned out nearly $32,000,000 worth of goods. In 1905 the industry had grown to a product of something over $35,000,000, and employed about 5000 people. In order to build up this industry, secure this product, provide places for these workmen, it has been estimated that we taxed ourselves between 1890 and 1900 fully $90,000,000. Taxed ourselves $90,000,000 and let off our largest single consumer scot free. We also have been selling abroad the tin plate we manufacture here at considerably less price than at home. And now observe how in the case of tin plate the protected American manufacturer gets even on this lower price to the foreigner. He takes it out of the laborer—that is the wages of tin plate workers are reduced 25 per cent on tin plate made for export. The Standard Oil trust gets its duties rebated on export work and the tin plate workers get their wages cut!

The contrast in results to the consumer between putting on and taking off a duty are strikingly illustrated by a comparison of the tin plate experiment with the quinine experiment. In 1879 the duty of 40 per cent on this favorite American medicine was removed by a special act of Congress. The extortion practised under the duty had been outrageous, quinine selling in 1878 as high as $4.75 an ounce. Five years after the quinine bill passed the price had fallen to $1.23 an ounce, ten years after to 35 cents, and in 1906 to 16½ cents! Far from destroying the quinine industry in this country as the manufacturer tearfully declared it would, the business goes on prosperously. Whether gains or losses come to the manufacturer the people share with him. He cannot gobble the lion’s share of the one or shift the lion’s share of the other as the thread and starch and tin plate and dozens of other manufacturers can.

Where prices increase faster than incomes, as they did with the great majority in the period we have under consideration, one of two things must happen,—the amount and quality of necessaries are cut, or substitutes are found. Both have happened in a rather startling way in the last twenty years in one of the materials most essential to human health and comfort, woollens. Wool, the world over, has always been accepted as the poor man’s special friend. It protects against cold and damp. It wears well; it looks well. The tradition of woollen garments as a lasting household possession, one of the things which belongs to the outfit of even the humblest, is very strong in every country. “All wool” is the housewife’s boast of her blankets and shawl, the young girl of her winter coat and gown, the laborer of his shirt. It is the assurance on which salesmen depend for winning customers. It is a standard material of clothing as general and as necessary in our climate as wheat is an article of food. But for twenty years this valuable standard material has been every day receding farther from the reach of the great mass of Americans. Many housewives the country over have ceased buying woollen blankets, substituting the cotton-filled puff or “comfort.” Settlement workers and district nurses say that they rarely see a woollen blanket in the houses they visit. Knit cotton undergarments and heavy knit cotton stockings are generally substituted for wool. Many thousands know they cannot think of wool, and dismiss the idea. But so strong is the tradition of wool among the people of cool climates, among Russians, Germans, etc., that a salesman in the shops of the tenement house district declares his slimsiest imitations “all wool.”

A curious person can easily satisfy himself as to the quality of these “all wool” garments by boiling them in caustic alkali. The experiment is very simple and quite conclusive of the amount of wool in the article. If it is “all wool” the alkali makes short work of it, no residue is left after the boiling. Silk will also disappear. Cotton is untouched. Take a baby’s shirt for which you pay 50 cents with the solemn assurance that it is “every stitch wool.” It is well-shaped, finished with a neat shell edge apparently of silk, a ribbon down the front for the buttons, three rows of “silk” stitching around the sleeves. Cut the garment into two pieces and boil one for twenty minutes in a strong solution of alkali. The pieces treated compare now very favorably, fleecy lining shell edge and all, with the piece untouched. The ribbon alone has disappeared. There is not a thread of wool in it.

Try another experiment with a girl’s sleeveless vest for wearing over the gown under the coat. This garment will cost $1.25 in an East Side shop. It feels like wool and is sold for wool, but it comes out of the pot intact, a strong, durable cotton yarn vest which could have had but a small fraction of wool in it in the first place if, indeed, it had any. Its real worth is not over 25 cents.

This same experiment will show similar adulteration in many of the blankets and much of the dress goods and suitings sold to the unknowing as all wool. Vast quantities of so-called “cotton worsteds” are manufactured annually. The amount of wool in these goods has been steadily decreasing in the last few years, falling from 50 per cent to 25 per cent, and from there to practically all cotton, immense quantities of the last being manufactured for boys’ and men’s wear. It is from cotton worsteds and cheap shoddies that the $8.00 and $10.00 suits for women, the $10.00 and $12.00 suits for men, are generally made. The goods may be sold by the manufacturer for what they are, but at the counter the purchaser receives the express or implied assurance that they are all wool. To such lengths has the adulteration gone that it may be laid down as a fact that people on small incomes to-day rarely if ever wear anything but cotton and shoddy mixtures.

Now, that things have changed is not proof that they are worse. Because a great number of us in the United States cannot get the woollen blankets, shawls, and clothes which we once had and which are still accessible at low prices to the European laborer and peasant is not proof that we have not a better substitute. May it not be that woollen garments, blankets, and suits are a superstition? Are we not just as well off clothed in cotton substitutes?

There is no doubt cotton knit goods are admirably cheap underclothing, most of them are well fitting, and some of them are durable. Where light clothing is sufficient—and with the general heating of houses, factories, and shops and cars, there is no longer the same need, for many people, of heavy clothing as in the old days—they are adequate. There is no doubt the young girl’s cotton worsted gown looks well at the start. The cotton warp “all wool” suit of the laboring man has a correct finish, color, and style, better perhaps than of old, for finish and cut are demanded by the poorest and are achieved remarkably by the cheapest clothiers. But in two particulars the cotton substitute fails. It has not the warmth, and it does not keep its appearance. True, if a man puts on enough cotton garments he can get the same warmth. But he cannot get from cotton the same protection against storm and wet, the same safeguard where his labor subjects him to excessive perspiration. He cannot get the same comfort at night. Moreover, his garment becomes shabby, loses its shape, in much shorter time. Women can no longer make over with satisfaction the gowns they once wore a series of winters. The man’s suit is no longer respectable as “long as it holds together.” Those of us who must buy cheap clothes can find them at the long established popular prices, but we no longer get the warmth or the satisfaction from them.

During the discussion of the Payne-Aldrich tariff bill, evidence enough of this was laid before Congress. Mr. Nicholas Longworth, for instance, read to the Committee on Ways and Means a letter from a clothier in his congressional bailiwick in which the man declared: “I never handled cloth of so inferior a quality as I do now. Laborers, mechanics, and farmers who use ready-made clothing are receiving practically no value for their money.” The National Association of Clothiers were strong in their protest to Congress. “Standard winter worsteds,” their committee said, “which twelve years ago ranged from twenty-one to twenty-four ounces in weight per yard, have gradually been decreased in weight, so that they now range from fourteen to sixteen ounces per yard; standard spring worsteds which ranged from fourteen to sixteen ounces in weight per yard have gradually been decreased, so that they now range from nine to twelve ounces per yard. In consequence, a deterioration of fully thirty-three and one-third per cent in weight has taken place, in addition to the establishment of a much higher range of prices for the same qualities of goods. The clothing manufacturer, therefore, through the inability of the cloth to stand ordinary wear, is largely deprived of the opportunity to produce garments upon which a good reputation can be based.”

But why should the materials which are used in our cheap clothing be unsatisfactory—why can we not get durable cheap goods, as it is certain we once could? The answer is not contained in a word. There is always more than one reason for sweeping changes in standard articles like woollen goods. However, the chief reason, the one which is more powerful than all the rest, is to be found in the complicated wool schedule which has been in operation in this country since 1867, the three years of the Wilson tariff excepted. This schedule rests upon two arbitrary and utterly unjust duties. The first of these is that on wool “in the grease,” as wool is called when it is sheared from the sheep. To prepare this wool for manufacturing it is first scoured until clean, an operation which causes a shrinkage of from twenty to eighty per cent in the weight of the wool. In turning this clean wool into cloth there is a still further shrinkage. Indeed, the total shrinkage from wool to cloth is such that it sometimes requires as much as five or six pounds to make a pound of cloth; and again it requires as little as two pounds. Of course the value of the wool varies according to the shrinkage, i.e. according to the amount of cloth a manufacturer can get from a given lot. It also varies according to the kind of cloth the wool will make, i.e. whether it will make a fine or coarse cloth. Now all imported “grease wool,” suited for clothing regardless of its value, of the amount of dirt and grease there is in it, the amount it shrinks, the amount and quality of cloth you can get from it, has to pay a duty of eleven or twelve cents a pound. If the American wool-growers who secured this duty, to begin with, on the supposition that they would soon be able to produce enough wool to supply the home demand had been able to keep their promises, it would not have been necessary to import wool, and competition might have kept the home prices down. But the wool-growers have not for many years, if ever, produced even half of what we use. It is customary to figure the amount as much larger. “Seventy per cent of the wool we use is produced at home,” the wool boomers cry, but they do their figuring on grease wool and omit altogether the wool which comes in manufactured! There is only one fair way to estimate the amount we grow, and that is to find out what we get from it after it is cleaned of grease and dirt and compare it with the clean wool, raw and manufactured, we import. Do this and we find that we really produce nearer 40 per cent than 70 per cent of what we use. In 1890—in 1895—in 1900—this was the approximate proportion. One of the leading wool authorities of the country makes the relative proportion the same in 1906, i.e. 40 per cent domestic to 60 per cent foreign. For 1909, he figured it 37 per cent domestic to 63 per cent foreign.

Now, as said above, all of the wool imported must pay a duty of eleven or twelve cents a pound when it is “in the grease.” The American wool-grower in normal and prosperous times can charge more for his wool because of this duty. He may not be able to add the full amount to his price—in fact, it is probable that he rarely does, but he certainly gets considerably more than he could if he were not protected.

The way the duty works is clearly illustrated by a personal experience in wool-buying related by Robert Bleakie, of Boston, a manufacturer who has been making woollen goods in this country continuously since 1848. Mr. Bleakie’s account is of a purchase of wool he made in 1897 just before the Dingley Bill went into effect, that is, when we had free wool. He had bought in Africa 223,684 pounds of wool at 99
10 cents a pound. By the time he got it to Boston it cost him 132
10 cents a pound ($29,565.83 for the lot). Now, let us suppose Mr. Bleakie’s wool had not reached Boston until after the Dingley Bill had gone into effect, that is, until after the eleven cents a pound had been placed on grease wool. To get his wool out of the custom-house Mr. Bleakie would have had to pay the tidy sum of $24,605.22; i.e. eleven cents on each pound. This would have made the wool cost him, instead of twenty-nine thousand dollars, over fifty-four thousand dollars. But it was fine wool, shrinking heavily in cleaning. As a matter of fact, he got out of the 223,684 pounds he imported only 85,000 pounds which he could use. But note that he would have had to pay duty on the entire lot, that is, to pay it on 138,684 pounds of grease and dirt as well as on the 85,000 pounds of clean wool! Of course the duty simply shut him off from importing heavy-shrinking wool, and at the same time made domestic wool of this kind too dear to buy.

Now, there are two classes of wool manufacturers, known as carded woollen and worsted. The former, to which class Mr. Bleakie belongs, finds a large proportion of the wool they need to be heavy-shrinking—the latter use mainly the light-shrinking wool. It is the carded woollen manufacturer who makes our heavy woollen clothes—flannels and blankets, the warm and durable “all wool” goods of the poor man. Mr. Bleakie’s experience just quoted shows what the eleven-cent duty on grease wool does to his business. It takes the raw material away from it—“starves” it, as the manufacturers say. At the same time it gives his competitor—the worsted maker—a decisive advantage, for he uses mainly light-shrinking wool. It is obvious that if two manufacturers each import one hundred pounds of wool in the grease, and each pay $11.00 duty on his lot, the one which gets the larger number of pounds of clean wool will have the other at a disadvantage. Yet each will pay the same duty, $11.00 on a hundred-pound lot.

What this discrimination against those who use the heavy-shrinking wool amounts to is making wool too dear to be put into the common grades of flannels, blankets, and clothing materials. The manufacturer is forced to find substitutes. Forty-four years ago, when the duties on the coarse grades of wool were first made prohibitive, and the manufacturers were forced to find substitutes in order to make clothes that the average man could afford to buy, wool rags, wool waste, and carpet wools were resorted to. They were wool, at least, and warm. Between 1867 and 1890 the annual importation of shoddy rose from about 500,000 to 9,000,000 pounds. Then the cry went up that it was displacing wool. Prohibitive duties were placed upon all kinds of wool substitutes. By 1890 duties so high were put on all the wool substitutes that they could not be imported; that is, after taxing wool off our backs—the wool substitutes were taken away. Deprived of the advantages which the inventions for using waste gave, there was nothing left but cotton for the bulk of the substitutes used in inexpensive goods, and cotton it has been ever since. The rapid absorption by cotton of the wool field has indeed been one of the most significant changes in American industry since the McKinley Bill of 1890. The tables of 1905 show that while from 1890 to 1905 cotton increased in the manufacturing of clothing materials about 100 per cent, wool increased only about 25 per cent. One whole department of manufacturing formerly classed under wool, is now placed with cotton hosiery and knit underwear. The decrease in the per capita consumption of wool shows still more strikingly the passing of wool. In 1890 we were consuming 8.75 pounds apiece; in 1904, 6.22 pounds,—less than we used in 1860!

This astonishing change in the relative use of the two materials is not all due to the tariff on raw wool. Cotton is gaining the world over. The general tendency to lighter clothing, the demand for a larger number of garments, and so cheaper prices, the failure of the world’s wool production to increase and consequently its higher price—all have encouraged the change, but it is certain that the great determining factor in the United States had been this duty combined with a second mischief-maker—the ratio used in estimating the compensatory duty on all products of wool imported.

If the maker of woollens had a sufficient supply of free wool—that is, if the price of his raw material was not raised by a duty—all the protection he could rightfully ask against his foreign rival would be the difference in the cost of production here and abroad. But his wool costs him more than his foreign rival’s. If he is to meet him on a level, he must be protected against wool as well as production; that is, there must be two duties on cloth which is imported—one a duty to make up for the higher price he has had to pay for his raw material, the other for the higher price of manufacturing.

These two duties vary with different grades of woollens. The schedule is highly complex—a matter for experts only. Its results, however, are simple—and hard—enough, for what they amount to is that the cheaper the blanket or the dress goods, the HIGHER the duty! On many materials and articles suitable for the slender purse these duties are so high that none of the goods can be imported. On cloth, for instance, worth not more than forty cents a pound, the duty averages over 140 per cent; on cloth worth more than seventy cents a pound, it averages about 95 per cent.

We shall notice here but one item of the taxes which bring about this unjust discrimination, and that is the duty allowed to make up for the higher cost of the raw wool. This duty is reckoned on the number of pounds of wool in the grease supposed to be used in making a pound of cloth. Where the goods are worth less than forty cents a pound three pounds are allowed; where they are worth more, four pounds. As the duty on this wool is eleven cents, the compensatory duty on a pound of cloth is thirty-three or forty-four cents. Take the latter as an illustration, it applying to the only grades imported in any quantity. This is an out and out swindle, for the simple reason that few of them contain this amount of grease wool.

When the discussion of the wool schedule was going on in Congress in 1909, the Textile World Record, a remarkably able, and fair-minded Boston trade journal, published the result of a series of analyses of cloth which its editor, Samuel S. Dale, had made personally, in order to discover the actual protection each was getting under the Dingley law. The estimate in each case was based on a large quantity, 10,000 yards. Here are samples of the results. The first fabric was a worsted serge, weighing 11,500 pounds. Mr. Dale found that 21,941 pounds of grease wool had been used in this piece of cloth. Now, according to a rational and honest application of the protective principle, one would expect the compensatory duty, in case such a piece of cloth was presented for import, to be eleven cents on each 21,941 pounds, or $2413.51; but as a matter of fact, it would be $5060! That is, forty-four cents would be charged on each pound of cloth; as if four pounds of wool had been required to make it, while as a matter of fact, less than two pounds had gone into it.

A cotton-warp dress goods was analyzed in which but a trifle over one pound of grease wool had been used for each pound of cloth. Mr. Dale calculated the compensatory duty on the 10,000 yards should be $496.65. But that cloth actually receives $2595.63! In the case of a piece of cotton warp casket cloth made of cotton, wool, and shoddy, the compensatory duty under the law is reckoned at $4262.72, while actually it should be $2238.15, and so it went. But two of the eleven fabrics contained over half of the four pounds on which the duty would be reckoned.

In addition to the compensatory duty of forty-four cents is the duty to protect from difference in the cost of production, which is 50 or 55 per cent of the value of the cloth. There is probably no doubt but this duty is all out of proportion to the actual difference. Forty-four years ago, when practically the same duties now in force on wool were wrested from an unwilling Congress by a combination of wool-growers and woollen manufacturers, all that the latter asked was 25 per cent to cover difference in the cost of production. American labor has advanced, but so has European labor—and still more has machinery increased the output.

Of course these high duties make imported cloth very expensive, and enable American manufacturers to hold up their prices. As a matter of fact, the duty makes the American consumer of woollen goods pay just about double what his English cousin pays. In 1908 I was shown by a gentleman who has for years been at the head of one of the best of the wholesale cloth houses of New York, a bundle of matched samples of woollen goods—American and English—with carefully worked out statements of cost here and abroad. The goods had been matched by one of the leading woollen experts of England. I was unable to detect any difference in quality, and only the slightest in finish. There was practically no choice, so slight was the difference. But note the price. For an American serge costing $1.37½ a yard the price of the matched English goods in Bradford was 67 cents. The English equivalent of an American fabric costing $1.50 was 78.05 cents. Beautiful blue light-weight serges, such as are used for men’s summer suits, cost in America $1.80, in Bradford 81.2 cents. The mohair which is used so much in this country for women’s summer travelling suits can be bought in Bradford for 27¼ cents; here it is wholesaled at 70 cents and costs at retail $1.00. This was the showing over a large range of goods. It amounted to this, that the English price was only about half the American.

An example of the difference in cost of woollen goods was given in 1909 in Boston, where the cost of living was being investigated. Mr. Dale, of the Textile World Record, was being questioned on the comparative costs of American and European goods. “You can make comparisons in two ways,” Mr. Dale answered; “first, by comparing prices at which the same grades are sold, and, second, by comparing the grades that are sold at the same price. For example, here are two fabrics, one made and sold in this country, and the other made and sold in England. The English fabric is sold at 3s. 6d. (84 cents) a yard, 55 inches wide. The American cloth is sold for 77½ cents per yard, 55 inches wide. So that the two are sold at approximately the same price. The difference is represented by the difference in the two fabrics. The English cloth is a fine worsted weighing 10¼ ounces per yard, 55 inches wide; the American fabric is made with a cotton warp and a mixed cotton and wool filling. The cloth consists of 30 per cent wool, 70 per cent cotton. It weighs 9.6 ounces per yard, 55 inches wide.”

In addition to this increase in prices, a most exasperating practice developed after the passage of the Dingley Bill in many protected industries—selling goods abroad at prices from 10 to 70 per cent lower than they were sold at home. The Dingley Bill had not been long in operation before the administration itself warned the iron and steel people officially that they were in danger of giving the game away if they continued to sell steel rails, for months together, to foreigners for $22.00 a ton, while they charged their compatriots $35.00. But the warning seems to have had little effect. Frank manufacturers like Mr. Schwab said, Of course we sell cheaper to foreigners; not only that, but we sell materials to our fellow manufacturers cheaper when they are to be turned into goods for foreigners than we do when they are to be turned into goods for our own people! Mr. McKinley’s Industrial Commission of 1900 found considerable evidence of discriminating export prices. The contention of the corporations which admitted the practice was that it was necessary to work off surplus, and to keep factories going on full time. Mr. Thomas W. Phillips of the Commission, in commenting on this explanation in a minority report, said, “This argument overlooks the fact that their surplus product could also be worked off by lower prices at home, and that it is the tariff which encourages them to create a domestic surplus by restricting domestic consumption through high prices.”

The best detailed evidence of the difference between home and foreign prices which we have, comes in the price lists which are prepared for foreign trade-lists, which are not circulated in this country, of course. In 1906 the Tariff Reform Committee of New York City issued a pamphlet made up from discount sheets by Byron W. Holt. It is a beautiful study in gratitude! Mr. Holt names over 250 different articles on which at that date discounts of from 10 to 66 per cent lower were quoted to foreign than to home buyers! An American dealer paid $5.50 for potato hoes which a foreigner could get for $4.75. All farm tools, indeed, were sold abroad far lower than at home, thanks to the Farm Tools Trust. He paid $16.00 a dozen for wooden wheelbarrows for which the foreigner paid $14.50. He paid $20.00 for the incubator which to the dealer over the border was quoted at $15.00. He paid $30.24 per gross for soap which the foreign dealer bought for $20.48, and so one might go on with scores of articles of daily use in farming, in housekeeping, in all sorts of trades. In 1909 the same committee published a similar exhibit showing that equal advantages were still regularly offered on a great variety of articles. It sometimes seems as if the great American system for making the foreigner pay the duty had resulted in presenting it to the foreigner. He buys our goods cheaper than we can buy them, and, like Mr. Coats, establishes his factory here, and, protected from world competition, drives our own manufacturers into his combination, runs the business from the other side of the waters, and charges us twice as much as he can his countrymen!

The protected manufacturer does not always export at a discount. Very often he follows Mr. Coats’s lead and establishes himself abroad. He finds it more advantageous to do this because in most civilized lands the materials of industry are free. Many years ago the duty on nickel drove the Meriden Britannia Company to build in Canada and there they still manufacture for export. In 1906 Mr. James J. Hill, commenting on the rapid multiplication of American industrial plants in Canada, said: “A few years ago there was not a smelter on Canadian soil west of the Rocky Mountains. To-day there are six in British Columbia and these are largely occupied with the reduction of American ores. Commerce will go her own way even though she must walk in leg irons.” Curious and unnatural alliances have already begun to arise from this effort of industry to escape her leg irons. Take the case of the International Harvester Company, which has been much abused, and unjustly, for selling abroad at prices lower than at home. Whatever may have been its practice in earlier years, it has been well established by the recent investigation of a government agent that the prices of its machines are lower in this country than they are abroad. The reason seems to be a rather nice little combination of tariffs and price fixing. For instance, the binder which in the United States sells for $125.00 at retail sells in France for $173.70. The reapers, mowers, and rakes are proportionately dearer. There are two reasons for this: In the first place France has been applying her maximum tariff to our exports, by way of meeting our high duties on her products. But after the harvesting machines get into the country, they meet another hindrance to a natural price; the importers of agricultural machines in France are organized into a general syndicate, which consists of French, German, Canadian, and American firms. These gentlemen have combined to prevent price cutting. Judging by the comparative prices of the machines here and in France, they have succeeded admirably. The Americans, in spite of the large advance they get on their goods, have not been satisfied, and the International Harvester Company has erected factories at Croix. If the reciprocity agreement with France negotiated in 1898 had been put into effect, the company claims that it would not have taken this slice of its capital and product out of this country.

Again, it is the tariff which has induced this same company to construct factories in Canada, Sweden, Germany, and Russia. In Germany, the binders which they sell here for $125.00 are selling, according to consular reports, for $203.00. The German tariff on a binder of this kind is about $12.00. It would seem that the company ought to be able to manufacture in the United States, pay this duty, and still make good profits on the $125.00 binder. If tariffs did not have the tendency to increase rather than decrease, this might be so. Experience seems to prove that where tariff exists the manufacturer is safer on the inside of the wall, even though it may be that it costs him as much or more to manufacture there than it does at home. The Harvester claims that in spite of the difference of wages, it has no hope of being able to manufacture more cheaply abroad than at home. This is no doubt due to a factor which protectionists unite in ignoring,—the greater productivity of the American workman.

The whole situation is an excellent example of the unnatural and uncertain relations into which tariffs thrust industry. Moreover, it is an illustration of the way tariffs in the long run defeat their own purpose. The International Harvester Company did a business of $90,000,000 in 1910, over one-third of which was outside of the United States. Its future depends largely on the development of this outside market, and tariff conditions are such, thanks mainly to our own policy, that they find it advantageous to establish factories in the very countries which are our best customers!

With each year that passed after the Dingley Bill became a law, the burden of increased prices became heavier, the restraint on commerce more unendurable. There were other causes at work besides prohibitive duties, but in certain cases these very causes could be weakened by revising the tariff. It was an obvious way of easing a bad situation, though by no means a cure-all. Through the whole citizen mass irritation at the reluctance of politicians to touch the subject, existed, and with time found varied expression. Unfortunately the leader of neither party had ever really sensed the enormity of the protective system, and consequently he could not sense the strength of the revolt which had begun. Neither Mr. Bryan nor Mr. Roosevelt had ever found in the tariff a sufficient cause of the evils they attacked so valiantly to arouse their indignation. Neither of them had ever been genuinely stirred by the unsoundness of the doctrine or by the vicious practices for which it was responsible, or by the heavy burdens it laid “where every penny counts.” By all the signs Theodore Roosevelt should have been the Richard Cobden of our tariff reform, but he did not see it as a dragon worthy of his steel.

But the issue was there deep in men’s minds; something oppressive, puzzling, and complicated, but not to be avoided for that reason. So strong and genuine was this popular conviction that the Republican party was forced in 1908 to declare for a downward revision of the tariff, and because of that declaration chiefly, it was able to elect its candidate for the presidency, William H. Taft.