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The Commoner.
VOLUME 9, NUMBER 27
4
-" v
EDUCATIONAL SERIES
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The Commoner,
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Address all communications to
THE COMMONER, Lincoln, Nob.
havo been on their feet as ono man in opposi
tion if they had known that such a plank was
In tho proposed platform; yet there was no
opposition. Jt wob not known to any of tho
delegation that such plank was in the platform.
Also delegates from Lake, Cook, Itaska, Aitkin,
Millo Lac, Crow Wing, Beltrami, Becker and
other counties would certainly have objected.
Vory secretly, indeed, must this plank havo
boon adopted. Personally I had been so stren
uously engaged in an endeavor to secure an
instructed delegation to Denver for you that I
was persona non grata to the other element and
was not in tho convention at all. But I know
that the delegates who were there from St. Louis
County would havo raised the roof before they
would havo, knowingly, allowed such a plank
to havo boon adopted. A plank so adopted is
binding on no ono unless on the one who secret
ly put it in. Certainly, if I were in office as a
democrat in Minnesota I would not consider
myself bound by it.
As to the veto. Govornor Johnson is entitled
to all praise for his veto of this bill embodying
this vicious and unjust method of taxation. On
tho ground of its discrimination between tho
sections, of the state the governor was justified
in vetoing it. It would have proved to be a
veritable apple of sectional discord and ill feel
ing. I look upon tho act of the governor in
votoing this bill as patriotic, clear-headed, cour
ageous and statesmanlike. You know how many
of us hero are your friends. You know how
loyal your Duluth friends have always been.
All of those friends of yours here stand as one
man back of tho governor's veto and in opposi-
tion to this tonnage tax bill. In response to
your Invitation, I have said what I think of
tho tonnage tax bill and its veto.
ALFRED JAQUES. "
HERE IS THE RECORD
Democratic Platform Wo favor an lncomo
m tax as part of our revenue system, and we urge
tho submission of a constitutional amendment
specifically authorizing congress to levy and col
lect tax upon individual and corporate incomes,
to the end that wealth may bear its proportion
' ato share of tho burdens of the federal govern
ment. Republican Platform Silent.
Mr. Taft Criticised democratic plank and
said: "In my judgment an amendment to the
constitution for an income tax is not necessary."
Mr. Bryan Fought for it since ho has been
in public life.
"jln 1909 the United States penate Adopts In
SpnVe tax araendAieut by u.rianlijiQus'vjOte.- TJie
hpusp 'adopted by 317 yeas' tql4J rio ;;.
Beginning of tho Practice of Selling Cheaper
Abroad
It has been very well known for a number
of years, that tho "protected" American manu
facturers have been selling their products at
much lower prices to foreigners than to their
fellow-citizens. Just when this practice began
it is not easy to say. Instances of it began to
appear in the eighties. Since 1890 it has grown
with the growth of our export trade in manufac
tured products. It has Increased in extent and
degree with the increase in tariff rates, and un
der the McKinley and Dingley tariffs it has come
to be the recognized practice of American man
ufacturers 0 sell for export at one set of prices
necessarily low enough to get the trade in for-,
eign markets, and in the home market at another
set of prices, kept as high as the tariff, with the
combinations and agreements fostered by it, will
permit or the traffic will bear.
First Knowledge of Lower Export Prices
The knowledge of this discrimination in favor
of the foreign consumers was long a common
place among manufacturers and business men
before it became known among the general pub
lic. The first knowledge of it came to the public
with the shock of a rudo surprise. The system
of "protection" had been widely and loudly de
fended by the claim that It really would, ulti
mately, benefit the consumer by fostering in
dustries which, when firmly established, would
be able to and would make the prices of their
products as low as the foreign prices and even
lower. For tho sake of this great consumma
tion the tariff was to be maintained at a good
high rate, and the millions of American con
sumers were to be patient in continuing to pay
very high prices for their materials of life and
labor. For the promised consummation the peo
ple have been waiting long and anxiously. It
has been maddening to them to see the tariff
favored Industries becoming steadily ever great
er and more dominant, and then not reduced
prices for the American people, who have paid
untold millions to make extravagant profits for
the favored ones, but reduced prices for the for
eigners, who have been supposed to be our
dreaded industrial rivals, and the same and still
higher monopoly prices for the good arid kind
home folks who have borne the cost of the
scheme.
Tho Tariff Reform Committee's Pamphlet
of 1890
Probably the first comprehensive demonstra
tion of the systematic price discriminations by
American manufacturers to the advantago of
foreign buyers, was made by the tariff reform
committee in 1890 by the publication of an
illustrated pamphlet entitled "Protection's Home
Market," wnich contained a great many facts
as to the exact differences between export and
domestic prices of manufactured goods, obtained
from manufacturers and export agencies and
publications. It also quoted statements about
the extent of the practice from such authorita
tive trade journals as The American Machinist,
and the Engineering and Mining Journal. This
pamphlet was widely circulated and proved very
effective in enlightening the public as to what
was going on. It was met by a general denial
from the leading republicans that lower prices
were made for export in other than rare and
exceptional circumstances.
Denial, Then Admission and Warning
This denial by the republicans was kept up
until about 1900. At that time trusts were
being formed on every hand and domestic prices
were rapidly rising, while more and more goods
were being sold abroad at lower prices. Presi
dent McKinley and others of his administration
apparently feared an attack by the domestic
consumers upon the protective system, arising
from these conditions, and in August, 1900, an
official report appeared which contained a re
markable admission of the facts and a distinct
warning to iron and Bteel manufacturers. This
was the "Report of tho Bureau of Statistics on
Commerce and Finance." Among others, it
made this plain statement:
"The progress of work on shipbuilding in tho
United States has likewise been retarded, be
cause makers of steel materials required a high
er price from the American consumers than they
did from the foreign consumers for substantially
similar products. Of course, American export
ers have to get foreign contracts in competition
with foreign plato makers, who are excluded
from our domestic market. In. addition to this,
American export plate makers are interested in
preventing the establishment of plate manufac
turing in their customer nations abroad, and to
that end bid low enough to discourage foreign
nations from entering the field for ( producing
their own plate at home. The progress of do
mestic manufactures of iron and steel goods
may likewise be handicapped by the sale of iron
and steel in their manufactured state at so much
lower a price to foreigners than to domestic
consumers as to keep the American competitor
out of foreign markets generally. The natural
limit to such a policy of maintaining a higher
level of prices for these materials at home than
abroad is found in the restriction of domestic
consumption and the import duty. If restric
tion of consumption at home does not operate
to prevent the short-sighted policy of discrimina
tion against domestic development of manufac
turing industries, the other contingency is more
or less sure to arise, namely, the demand for
the reduction of- the tariff on unfinished iron
and steel, In order to equalize the opportunity
of makers of finished products in foreign
markets."
And the same report also said:
"Of the two policies open to iron and steel
makers, the far-sighted one of keeping the do
mestic and foreign markets as near-as possible
on a par in the price of these materials of man
ufacture seems by far the wiser one to follow,
both in the interest of a steadier course of
prices, which means steadier consumption, and
on account of the competition of manufacturers
of finished goods with foreign manufacturers in
the neutral markets of tho world.
"The other policy of maintaining prices to
manufacturers at the highest level at home
leaves little margin for experiment in seeking
new markets and restricts J;he application of
iron and steel to additional uses at home. The
depressing effects of an agitation for tariff re
vision to remedy this inequality are sure to
cause a far greater business loss, not only to the
country as a whole, but to the producers of iron
and steel themselves, than is to be gained by
selling at low prices abroad, which, they can
not help, and at high prices at home, which they
can help.
"Nor can the home market price be sustained
beyond certain limits by export sales. Certain
American manufacturers of steel materials tried
this policy up to April, 1900. It resulted in a
very positive shrinkage In domestic consumption
at the then high rates. Farmers had ceased to
purchase barbed wire for wire fences. Retail
hardware dealers had complained for months
of diminished business in nails and wire. Job
bers had gotten in the way of doing a hand-to-mouth
business on prices that had advanced
from $1.35 to $3.20 in the course of a year.
Hence the reduction of $1 in April, 1900, be
came a' necessity in order to keep the mills in
operation.
"If steel rails, for example, sell at Pittsburg
for $35" per ton for months in succession for
homo consumption, while the foreign consumer
is purchasing them for $22 to $24 per ton, the
domestic market is sure to order no more than
It is obliged to have for the time being."
Charles M. Schwab's Candid Admission
But these statements had no practical effect
upon the Iron and steel manufacturers. Forth
with there was organized the greatest of all tho
trusts, the United States Steel corporation. Its
first president, Charles M. Schwab, in testify
ing before the industrial commission on May 11,
1901, candidly stated that iron arid. steel pro
ducts were .regularly sold at lower prices for
export than for homo consumption., and (t!nat
materials to go into the making of goods'tfor
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