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About The commoner. (Lincoln, Neb.) 1901-1923 | View Entire Issue (Jan. 7, 1910)
- ,. 2 The Commoner. W-2 M EDUCATIONAL SERIES Free Raw Material n n ii -i Speech of Hon. Thctus W. Sims in the houso of representatives, July 9, 1909, on the rule to send the tariff to conference. Mr. Sims said: Mr. Speaker: I havo so far refrained from making any extended remarks on the pending tariff bill. In this houso we were not permit ted to consider the bill in the usual and proper manner in committee of the whole, where amendments could be offered by any member of the houso, discussed, and voted on, and in that way the exact position of each member of both parties ascertained as to all schedules of tho bill and as to all questions arising thereon. For such a discussion the country has had to depend upon the consideration of the bill in the senate, and I regret to have to "admit that, in what seems to me to bo fundamental doctrines of the democratic party, two-thirds of tho demo cratic members of the house havo voted one way, while nearly two-thirds of tho democratic mem bership of tho senate have voted emphatically In opposition. The question arises, do the majority of tho democrats of the house by their votes truly and correctly represent the actual democratic posi tion on these questions, or do the majority of the democratic senators by their votes truly and correctly reflect tho democratic position? If the majority of the democrats in this house are right, ttien a majority of the democratic senators must ue wrong. And the converse of this proposition must be equally true. I refer to the votes on the questions of free lumber, free coal, free hides, and free iron ore, or, in other words, as to the democratic position regarding crude raw materials whether they shall be admitted free of duty or placed on the dutiable list. I shall consider these propositions, (or, rather, the votesan,' same, somewhat In the .order they wer aa& IxutnV senate, ;beglnnlng with iron ore., "I beg to say that the vote of the eighteen democratic senators' for a duty on iron, ore in Support of an amendment not offered by an in dividual senator, but 'as a committee amend ment, taking iron ore from the free list, where it had been placed by the Payne bill, and plac ing it on the dutiable list, is Tegarded by both republicans and democrats as giving aid and com fort to the enemy, and in its logical effect an approval of the doctrlnq of protection. The American Economist, the official organ of the high protectionisms of the United States, in its issue of June 4 sayi DEMOCRATS ABANDON jHE PLATFORM tt It Is, well, also, to keen before tho people of tho country the facts that, while this small coterie of 'western republicans aro making: a stand for tho '?nJ?fr1?i,po,,,cy of Sections in duties' a ma jority of tho democratic senators have abandoned mnSy.S10 card,nal Principle of democratic faith, namely, "free raw materials," but they have voted SteJIy, '" favor retaining the Dlng?ey law rates of duty on many articles, notwithstondinc the declared policy of the democratic party In favor of reductions in duties throughout. In other words, while there is a slight defection from tho essential principles of tho republican" E H0ro among wstrn senators, there is a com" Pleto abandonment by a majority of the demo cratic senators' of the two most vital features of the democratic platform upon tho -tariff Siv reductions In duties below the Dingley-law ?' ard and tho placing of raw materials Tpon thef?2e list. - I do not regard placing a duty on so-called raw material" as per se and necessarily pro tection and as a violation of democratic doc trine. The words "raw materials" are too in definite to be regarded as absolutely binding as a declaration of party .doctrine. Green coffee is tho "raw material" of the coffee roadter. No one would regard a duty on green coffee as protective. Such a duty would be a revenue duty, whatever the rate. Any raw material which does not have to bo materially advanced in value by processes of manufacture to prepare it for consumption may be classed among dutiable commodities for revenue pur poses without affording more than incidental protection. While this is true, all raw materials which are properly classed as "crude raw materials " which require expensive processes of manufac ture in order to-prepare them for consumption should be absolutely on the free list. No amount of revenue that can be collected by a tax on such "crude raw materials" can possibly com pensate for the advance, in price on tho manu factured article by way of a compensatory duty made necessary by the tax on the crude raw material. Take the case of iron ore as an illustration. The year 1907 was a normal year, and, speaking in round numbers for that year, the production of iron ore in the United States was 52,000,000 tons and total Importations about 1,000,000 tons, more than 50 per cent of the importations com ing from Cuba at a duty of 32 cents a ton, while 40 cents a ton was collected on the importations from all other countries. The revenue received by the government from duties on Iron ore for that year was less than $400,000. If the duty on iron ore only had been added, to the manufactured products made from the iron ore mined in the United States for the year 1907 it would amount, at 40 cents a ton, to $20,800,000. It must be remembered that the manufacturer does not simply add the duty to the price when he manufactures from imported material, but he adds the same to the price of all articles manufactured from domestic ma terials on which he has paid no tariff tax. To go further with this matter of iron ore, can any democrat justify a vote to give the man ufacturers of'iron and steel in the United States or the mine owners a statutory profit of $21, 000,000, speaking in round numbers, on the amount of iron ore mined in the United States for one year in order to get $400,000 or less by way of revenue? Can any man justly claim that added profits to the American manufacturer of $21,000,000 on iron pre for one year, while get ting, by way of revenue to the government only $400,000, is merely incidental protection grow ing out of a purely revenue duty? But the protection in its effects does not stop with .simply , adding this 40 cents per ton to the price iof the manufactured article. This-duty is tdonbled,i.trebled', andrquadrupled hy way of com pensatory duties onmanufacturedrarticles of iron and -steel 'as the processes, of manufacture are advanced. As it takeg two tons and more" of iron ore to make one ton of pig ironv a compen . satory duty of 80 cents a ton must be added to the direct duty on pig iron in order to compen sate the manufacturer of pig iron for the added price to the ore by reason of the duty on the crudest of all raw materials, iron ore. When the ore is converted into pig-, 'the pig is a raw material only one step renioved from the crude, so tho manufacturer of pig Iron says: I must Jiavo a duty equal to tno difference of post at hpmo and abroad, with reasonable profits, to which must bo added tho duty on tho ore of 80 cents per ton, with a manufacturer's profit on tho same, being tho tariff tax on the ore. So, at each additional stage of process of man ufacture these duties are doubled up and added, until the 40 cents a 'ton on iron ore, when it finally reaches the consumer in the highly man ufactured condition necessary to consumption, the added cost to the American consumer mounts up, perhaps, to more than $100,000,000 by reason of this miscalled "revenue duty" on iron ore, that brought to the government less than one-half of $1,000,000. Are such results to be atoned for under the thin disguise of a claim of voting for a revenue duty on raw ma terials? It is exceedingly doubtful if reducing the duty from 40 to 25 cents a ton will bring Qne single dollar mbre to the treasury than the 40 cents does now. The importations will have to be materially increased at 25 cents per ton to make up for, the loss of 15 cents a ton in the rate, but the 25 cents per ton will serve as an excuse for the addition' 'of compensatory .and cumulative . duties on all articles of domestic manufacture, amounting, perhaps, to hundreds of inillions of dollars. , All the, reasons that can be given for placing .lumber on the free list apply with much greatdr force to iron ore. It is impossible for the com pensatory and cumulative duties on lumber to ever burden the consumer like those on iron ore Much rough lumber can bo used without further process of- manufacture, and none of it has to go through as great a number qf processes of manufacture as do the greatest number of ar ticles of iron and- steel before reaching the con sumer. Besides, under existing conditions placing a duty on iron ore was in plain violation of the Denver platform, which says: Articles entoring ' into competition . with trust controlled -products should bo placed on tho froo' 4 -, VOLUME-1; NUMBER 6S Of the 52o6o,tfbQ tons of iron oreprbduced in the United States in 1907, 42,000,000 tons came from the Lake Superior district. Senator Smith of Michigan, on the floor of the senate, in de bate on this same Aldrich amendment, stated that' the United States Steel corporation owned in fee and controlled by way of - leases at least 85 per cent of all the iron ore deposits west of the Allegheny mountains. The trust also owns a large per cent of all iron deposits eafct of tho Alleghenies. Then, I ask, why does not import ed iron ore enter into competition with trust controlled products? The trust does irt fact own so nearly all the best and cheapest mined de posits of iron ore as to make it the all-powerful and dominating factor in fixing the price of do mestic ores. The hearings before the ways and means committee shows that iron ore In the great Mesaba ranges is mined at a less cost than anywhere in the world, except a small part of Sweden, from which no ore is ever shipped to the United States. If the drawback provisions of the house bill are continued, the steel trust can practically use all the Imported ores it is likely ever to need duty free, because nndor the above bill, if any American manufacturer ships and sells abroad any articles of American manufacture within three years from the time be paid the import duties, whether made from tho imported ma terials or ndt, to the amount of the duties paid, he can draw back 99 per cent of import duties paid on the materials. As the trust does now and always will export and sell abroad, in value, many times more in value of Its articles of man ufacture than It will ever import of iron ore, it has under the senate bill, as amended by the help of democratic votes, practically free iron ore for its own use, while being enabled to add the tariff tax to all sales of its goods to American consumers, while the small manufacturer who has no foreign trade will have to1 pay duty on imported ores, if he imports any," or pay -enhanced prices for ores at home, fixed by his all powerful competitor, the steel trust, including the duty provided Ty the Aldrich amendment. I am, therefore unalterably opposed-to a duty lor any purpose on f,crude raw materials," for the reason that it' enables" 'the "American manu facturer to -impose an additional burden by way of compensatory and cumulating duties . on the American consumer out of alj proportion to the amount of revenue benefits. If democrats werd making the whole bill and could put a small revenue duty on raw materials, following if up with a' like duty on the manu factured products, adding nothing in the nature of compensatory duties, such a bill might not be oppressive to the consumer. But' democrats are not making the bill, while many of them, by their votes, are 'furnishing very acceptable reasons to the republicans lor failing to reduce high protective duties on the. necessaries of. life. Senator Aldrich, in his- great speech on June 7, said: Tako tho metal schedule, take tho silk schedule, take every schedule in this bill. Tho intention is to have tho rates progressive from the cr,ude pro ducts, tho raw materials to tho finished product; progressive as to tho amount of difference between the cost of production here and 1n competing coun tries, which means if you put pno duty on iron ore, you must put a higher duty on pig iron, a higher duty still on steel rails, a higher duty still on watch springs, progressive all through tho scale. This was a fair and candid statement by tho senator, and every democrat who voted for a duty on iron ore knew just what effect it would have in making up the metal schedule of the bill. It was the first item in that schedule and became the very foundation upon which the whole superstructure of the metal schedule was to be erected. The tariff bill came from tho house with iron ore on the free list and the whole schedule on metals and manufactures thereof greatly reduced. The first thing that eighteen democratic senators did was to take iron ore from the free list, knowing full well that it would be the grounds for an increase over the house bill on the whole metal schedule. But not satisfied with this indefensible action, some of them voted to raise the duty on scrap and waste iron from the house rate of 50 cents a ton to $2.50 a ton. Scrap iron, wrought and cast, is mere waste material, consisting of broken pieces of old pots, skillets, plows, horseshoes, wagon tires, and all other kinds of waste iron and castings, that require no investment of capi tal no expenditure of labor, no element of cost of production of any kind, Not satisfied with this, after knowing by their votes they had made It impossible to take the protective tariff off any article of metal manufacture, one of them offered an amendment to put sewing machines, type writers, and. printing presses on the free list, and all, or nearly all, of those who voted to ,-. - -A .4lB as, tJUu fttai j &&tftf .&&&&