-tffe
The Commoner.
fUIiT IS. 1909
5
B-v-
i
export were also regularly sold at lower prices
than materials to go into goods for home con
cumption. These extracts from his testimony
lire especially interesting:
"Q. Will you take up the question for a
moment of the relation between export prices
and the prices in this country? You have, per
haps, heard some of the discussion.
"A. I heard some of the discussion of the
gentleman who just preceded me. I do not
quite agree with him, of course. It is quite
true, as he says, that export prices are made at
a very much lower rate than those here; but
there is no one who has been a manufacturer
for any length of time who will not tell you
that the reason ho sold, even at a loss, was to
run his works full and steady. That has been
the chief thing regarding all these companies
in their export business. I think you may safely
say this, that where large export business is
done, for example, in the line of iron and steel,
nearly all the people from whom supplies are
bought for that purpose give you a good price
for the materials that go into export. Railroads
will in most instances carry them a' little cheaper
for you, and so on all down the line. But
labor, within my knowledge, at least, has never
been asked to work for a lower price for export
material, so that labor benefits more by it than
almost any other interest."
(The fallacy in this statement is exposed by a
notorious illustration. It was not very long
after this testimony was given that the tin plate
branch of the United State Steel corporation
coerced its workmen into an agreement to accept
about twenty per cent lower wages upon the
plate made for export. The company asserted
that it was only by such a reduction of wages
that it could obtain orders from the Standard
Oil company. Heretofore that company has
used imported tin plate from which to make the
cans for exported oil, obtaining a. drawback from
the government of ninety-nine per cent of the
duty paid on the imported plate.)
"Q. Is it a fact generally true of all export
ers in this country that they do sell . at lower
prices In foreign markets than they do In the
home market?
"A. That is true, perfectly true. I just want '
to interrupt you and say that American Bteel
has been sold in the American market at as low
prices in times of extreme depression as it has
been in foreign markets, but it has been sold
without profit. You know we do run for a
space of time at a loss.
"Q. Would you say that when business is
in a normal condition the export prices are reg
ularly somewhat lower than home prices?
"A. Oh, yes; always.
"Q. (By Mr. Jenks) I should like to go back
a moment to the question of export prices. You
said that during last year the export price was
considerably lower than the price in the United
States. Would you mind giving us definite
figures?
"A. I have not them at hand, 'but it would
vary with each article.
"Q. Suppose you take the case of steel rails.
Could you give us about the difference between
the export and domestic price?
"A. I would have to make a guess; I do
not know definitely. The export price was
about $23 a ton.
ttr Ami tTia rirlno ViArft?
V. XV"U vno ..wv, "-
Was $26 and $28.
At the same time?
At the same time.
Tn makimr these export prices, are the
export prices at all uniform or do they vary?
"A. They vary with the competition we may
have."
Mr. John W. Gates, then head of the Ameri
can Steel and Wire company, told the industrial
commission on November 14, 1899, that barb
wire and wire goods were sold cheaper to for
eigners because lower prices were necessary in
order "to hold outside trade," He said they
were exporting 700 tons of wire a day and that
they furnished England with 60 per cent of her
supply of wire.
The Industrial Commission's Investigation
The industrial commission made what was
called an investigation of export prices. It sent
schedules of inquiry to 2,000 of the 600,000
manufacturing establishments in this country at
that time. It received 416 replies. In these
replies seventy-five manufacturers admitted that
they were discriminating in favor of foreign cus
tomers, and that their exports were valued at
about $4,000,000.
On the supposition that these seventy-five
manufacturers were tne only ones in .this entire
country who were' selling goods for export at
reduced prices, many leading republicans have
A
"A.
"Q.
asserted at times that out of the total prdduct
of manufactured goods, valued at that tlmo at
$13,000,000,000, and of our total exports of
manufactured goods, valued at over $450,000,
000, only $4,000,000 worth of goods wore being
sold abroad at reduced prices. Absurd as they
were, these statements were repeated in many
forms in tho republican campaign book of 1904
and in the speeches of Secretary Shaw, Speaker
Cannon and others.
That tho investigation of this subject made by
the industrial commission was most inadequate
is evident to all who know how it was conducted, '
and was, indeed, substantially admitted by tho
commission in their report.
Replies were received from only about ono
out of every five manufacturing establishments
to which schedules of inquiry were sent. As it
was optional with tho manufacturers whether or
not they should fill out and return the inquiry
blanks, it may bo presumed that tho realty guilty
ones did not volunteer information which would
endanger their protection. Many manufacturers
made ridiculous answers, perhaps with a view
to providing campaign material for the party
of protection.
Thus, many asserted that their domestic prices
were substantially below their export prices.
This is absurd. Not only is there no reason
why export should exceed domestic prices, but
it is next to impossible for them to do so. As
a very largo percentage of all goods exported
are sold through export commission houses,
which buy of manufacturers and sell to foreign
customers, it is absurd -to suppose that they
would pay manufacturers much moro for goods
than these goods were selling for in tho domestic
market. Tho exporters would, of course, fill
their foreign orders by buying goods where they
could obtain them cheapest. Hence it would
be impossible for the export to exceed the do
mestic prices, under similar conditions of sale.
Under tho circumstances of the Industrial com
mission's work It was remarkable that even
seventy-five manufacturers frankly admitted that
they were selling goods cheaper to foreigners
than to Americans.
Evidence From tho Industrial Commission's
Report
In spite of the unfavorable conditions under
which the Industrial commission's investigation
was made, considerable valuable information
was obtained from the admissions of the seventy
five manufacturers and from the conclusions
of tho commission. The commission was a
strongly republican and partisan body, but In
its report, Issued in 1901, in summing up their
conclusions as to export prices, this body said:
"In about twenty per cent of the cases covered
by tho commission's returns the export prices
'have ruled lower than those charged to home
consumers. The practice Is quite common
in all countries, and on tho part of separate
establishments as well as combinations."
In view of "the practice by some exporters
of making lower prices abroad than at home,
and of the desirability of protecting the con
sumer as well as the producer," the commission
recommended that, "without waiting other legis
lation, the congress provide for a commission
to investigate and study the subject, and ,to
report as soon as possible what concessions in
duties may be made without endangering wages
or employment at home; what advantages
abroad may be obtained therefrom, and also to
suggest measures best suited to gain tho ends
desired."
This was a substantial admission that. the In
vestigation was not thorough, and that tariff
duties were, in part, at least, responsible for
the difference between export and homo prices.
No attention whatever was paid to this recom
mendation by congress.
One of tho commission, Mr. Thomas W. Phil
lips, did not sign the majority report. In a
supplementary statement he said:
"There are a large number of industries in
which it is in evidence that the domestic price
is much higher than the export price. I do not
agree that the answers to Inquiries addressed by
the commission to exporters indicate that the
trusts are not chargeable with this practice to
any serious extent. Out of 2,000 schedules of
Inquiries sent out there were received only 416
replies, and only a very few of these replies
came from corporations known popularly as
trusts (Vol. XIII, p. 726). The fact that about
seventy-five answers indicated lower prices
abroad than at home Is significant when it is
noted that more than four-fifths of those ad
dressed failed to answer, and that naturally
those who are chargeable with such discrimina
tion would bo tho ones who would decllno to
reply.
"Several witnesses boforo tho commission on
behalf of tho trusts admitted that their ox
port prices woro lowor than their domestic prices
but they contended that this was necessary in
ordor to work off their surplus and to kcop
their establishments running full tlmo, and that
all manufacturers in all countries do tho same.
This argument overlooks tho fact that their
surplus products could also bo worked off by
lower prices at homo, and that it Is tho tariff
which encourages thorn to causo domostlc sur
plus by restricting domestic consumption
through high prices."
Icad, Leather, Steel
On April 2, 1902, Mr. John M. Potors testified
boforo tho ways and means commltteo that lead
was. being exported and sold for put Httlo moro
than half of the homo price. On tho samo day
Mr. A. G. Wobster, president of the New Eng
land Shoo Association, testified that leathor
was sold for oxport at flvo to ten per cent below
domestic prices. In 1904 Mr. James J. Hill,.
of tho Great Northern railroad, testified boforo
tho congressional merchant marine commission
that competing roads In Canada woro obtaining
American rails at $10 a ton less than ho had
to pay for them. Many other reliable witnesses
testified beforo tho samo commission to similar
differences between tho domestic and export
prices of ship plates and other shipbuilding ma
terial, and leading trade papers in that year
published reports of similar transactions. In a
speech in tho senato on April 25, 1904, Senator
Augustus O. Bacon, of Georgia, producod evi
dence from well known railroad officials of a
number of sales of rails for forolgn countries
at lower prices than for tho domestic markot.
(To bo Continued)
Practical Tariff Talks
Nothing worth while escaped tho boosting
process in the sonate's consideration of tho tariff
bill. There Is the zinc schedule. Zinc has been
on tho free list for a good many years. Tho
senato has adopted this tariff; Zinc bearing
ores containing less than ten per cont of zinc,
shall be admitted free; containing moro than
ten and less than twenty per cent, the duty is
one-quarter of a cent a pound on tho zinc con
tained therein; containing twenty per cont and
less than twenty-five per cent tho duty is one
half of one cent a pound and moro than twenty-,
five per cent, one cent a pound, an ad valorem
duty of eighty-four per cent. Parenthetically
It may be remarked that the zinc oro worth Im
porting contains moro than twenty-five per cent
of the metal. Sixteen per cent of tho zinc man
ufactured in this country goes Into brass-making,
slxty-fivo per cent Is utilized for galvaniz
ing iron and steel and the remainder into zinc
sheets which have many familiar uses. Not
enough zinc is produced in this country to sup
ply the demand, and there is a large importation.
There is not tho slightest reason for putting
a duty on zinc ore. The industry, instead of
languishing, is very prosperous. In 1894 tho
ore sold at the Joplin mines for $13.60 a ton.
In 1900 it was selling for $26.50 and in 1907
the average price on the maTket was $44.36 a
ton. The real reason why the tariff was put on
was to Increase the value of the holdings of the
mine owners, who how exact royalties of from
twenty to twenty-five per cent for the working
of their ground. The manufacturers, or those
who use zinc In their business, all protested
against the increase because it means, they
assert, an increase of about $25 a ton in spelter,
which is pig zinc. Tho real facts about the zinc
schedule is this: It will .Increase the value of
a ton of zinc ore containing sixty per cent of
metal $12 a ton to the man who owns the mine.
It will add from $4 to $5 a ton on galvanized
iron sheets and from $6 to $9 a ton on gal
vanized ware, such as palls, tubs and similar
household articles, thus bearing directly upon
tbe consumer. The argument advanced was
that the duty was needed to keep out Mexican
ores. Joplin ore contains about sixty per cent
of pure zinc, Mexican ore from thirty to thirty
five. This means that it costs twice as much
to smelt the Mexican product, after a freight
rate of $6 '50 a ton has been paid to bring It; to
the smelters. That disposes of the only argu
ment advanced In its behalf. C. Q. D.
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