-fi V '"
JANUART 20, 1911
-.-'
5
ti
s.
fe
The Tariff-
Free
Speech of Hon. William R. Smith of Texas,
in tho House of Representatives, Tuesday, De
cember 13, 1910.
The house being. In committee of the whoo
house on the state of the union for considera
tion of the bill (H. R. 29157) making appro
priations for the payment of invalid and other
pensions of the United States for the fiscal year
ending June 30,, 1912, and for other purposes
Mr. Smith of Texas said:
Mr. Chairman: The republican party met in
national convention in June, 1908, and, in obe
dience to an almost universal demand of the
American people, declared "for a revision of
the tariff by a special session of. congress imme
diately following the inauguration" of the .presi
dent then to be elected. During the campaign
which ensued the republican leaders, including
their .nominee for tho presidency, asserted over
and over again that the revision which their
platform declared for meant a revision down
ward, and that if the republican party was again
Intrusted with power such- revision would bo
made.
Relying upon these promises the people again
placed the republican party in power, giving it
the presidency and both houses of congress by
unusually large majorities.
Immediately after tho new president was in
augurated he called the congress together in
special session. But this was as far as the
party went in carrying out its promises to the
people. Congres revised the tariff, but not in
accordance with republican promises. The re
vision was so slight that experts differ as to
whether it was an upward or a downward revi
sion. But whether upward or downward, it was
not substantial. All agree it did not fulfill the
promises of the party or meet the demands or
expectations of the people.
It completely fulfilled tho propliecy of the
democratic party, announced in its platform,,
that the people could not safely trust so Impor
tant a work as a Revision of the tariff "to a
paTty which Is so deeply : Vbllgat'ed t3J the highly,
protected interests as is the reptibltcaa party1
And in consequence, at the election recently
held the people gave expression to their disap
pointment and displeasure by administering to
the republican party such an overwhelming de
feat as it has not had for many years.
The revision of the tariff now having been
intrusted to a democratic house of representa
tives, it Is not out of place to begin the discus
sion of some of the mbre important questions
which are sure to arise when that work is taken
up in detail. A tariff only for revenue is the
time-honored democratic position, and I have
the right to assume that when the country com
missions a democratic house of representatives
to revise the tariff we are expected to reduce it
to a revenue basis.
But whether we should make such reduction
at once or only gradually, or whether it shall
be done by a general revision. or by the revision
of one schedule at a time it is not my purpose
to discuss on this occasion. My remarks now
shall be directed especially to the question as
to how the duties must be laid under a revenue
tariff system, so. as not to handicap or injure
any of the industries of the country.
I shall undertake to show that this can be
done only by placing tho raw materials of man
ufacture on the free list. I shall undertake to
show that without the Importation of such raw
material free of duty a tariff only for revenue
as contra-distinguished from a tariff for pro
tection is impossible without disaster to many
of our industries, from which it will follow that
the free raw material doctrine is the true demo
cratic doctrine.
I Bhall also, undertake to show that the dem
ocratic party has never taken a position against
this doctrine either before or since the Cleve
land era, as has been charged in some quarters,
but, on the contrary, that party and its leaders
have on many occasions emphatically declared
for that doctrine.
-First, let us see -what is meant by Taw ma
terial as it Is used in the discussion of tariff
legislation. David B. Hill defined it to be "a
production which is in Its lowest and crudest
form when it enters into commerce," And as
examples he mentions, coal, iron pre, and lead
ore. Of course we all know that' raw material
is largely a relative term, for often one man's
raw material is another's finished product. But
The Commoner.
Raw Material
in tariff discussion raw material is understood
to bo those great crude materials, such as coal,
iron ore, lumber, and so forth, which enter into
and are tho very bases of manufacture generally.
. Mr. Chairman, thoro is an imperative reason
why raw material should bo admitted into tho
country free of duty If only a revenue duty is
to be levied upon manufactured products, and
that' is because practically all other manufactur
ing countries admit raw material duty free.
If wo levy a tariff upon raw material, wo
would, to tho extent of tho tariff, increase the
cost of the manufacturers' products Into which
such raw material is made, and wo would there
by handicap the home manufacturer in his con
test with the foreign manufacturer in foreign
-fnarkets. Indeed, the tendency and effect of a
tax upon raw material would be to greatly im
pair and in a great measure destroy tho export
trade of our home manufacturers.
Moreover, it would give the foreign manu
facturer an advantage over the home manu
facturer in our own home markets unless" a
compensatory duty should be levied In favor
of the home manufacturer, and if such compen
satory duty were levied the cost to the con
sumer would be increased to that extent.
Other very disastrous consequences would
follow the curtailment of our export trade. The
demand for our raw material would thereby bo
correspondingly curtailed and the demand for
labor greatly diminished. Every duty levied
. upon the raw. material of manufacture operates
as so much protection In favor of foreign man
ufacturers against our manufacturers both at
home and abroad.
On the other hand, the advantages to be de
rived from free raw material are many. If our
manufacturers were not burdened by a tax upon
their raw material, they would need no protec
tion, and the duty upon their products could
v be reduced to a revenue basis. They could go
into foreign markets and meet tho competition
of the world. They could expand their export
tradet and, thereby enlarge, tho demand for raw
material at home, thus giving the . producer of
raw material a steady market for his product.
They would be enabled to sell to tho con-
. sumers, of this country more cheaply, and under
the reduced tariff would be compelled to do so,
Some of the advantages of free raw material
were well expressed by Senator Richard Coko
in a speech, in the senate of the United States
on April 12, 1888, when he said:
"Give us free, untaxed machinery and free
raw material, such as coal, ore, wool, jute, and
other textile products, these being the . bases
of all manufacture, a tariff devoted solely to
raising revenue for the support of the govern
ment will doubly protect the American working
man's wages and send our cheapened goods
without handicap into foreign markets to meet
and defy the competition of the world. All the
reasons for placing raw materials on the free
list apply with twenty-fold power to the ma
chinery 'which manufactures it. fc
"Not one pound of machinery engaged In the
manufacture of any article on the dutiable list,
nor of raw material entering Into any such ar
ticle, should pay a single penny of tariff tax.
All Incumbrances, every hindrance, every ounce
of weight that can be removed from our pro
ducts, should, be taken away And American en
ergy, resources, invention, skill, and genius given
a. fair opportunity of winning primacy in the
commerce of the world. When this grand con
summation shall occur, as It must sooner or
later, and the sooner the better, the products
of the workingman's labor, no longer coffflned
to the home market as now, with Its fitful sea
sons of high demand and glut, nor to the manip
ulations of 'combines' and trusts, will find steady
sale in all the markets of the world and thus
will be insured steady .employment to the labor
which It creates."
But, Mr. Chairman, notwithstanding the evil
consequences which, as I have pointed out, would
result from a tax upon raw material under a
tariff levied solely for revenue, and notwith
standing the great advantages to be derived from
placing raw material on the free list, there are
to be found a few democrats, some of them
prominent, who insist this raw material shall
be taxed so long as a duty is levied upon the
manufactured article into which it Is made.
This 'tariff dogma Is evidently of very recent
origin, for we do not find it laid down in any
of the tariff literature of the country. And it
seoras also to bo purely arbitrary an no ono han
over boon able to give a satisfactory reason
for It.
. Why should wo arbitrarily say wo will novor
agree to tako tho duty off raw material as long
as a duty remains upon tho finished product?
Tako coal, for instance, which is used in almost
every manufacture Could anything bo mpro
absurd than to say that as long as any duty
remains upon any manufactured article that
coal Is used in making wo will insist on main
taining a duty on coal? Tho same may bo said
of iron oro, lurabor, and other raw materials,
which aro used gonorally in manufactures.
Tho advocates of this now doctrino might as
well tell us they aro not in favor of putting"
theso raw materials on tho free list undaf'any
circumstances whatovor, as a repeal of tho -duty
on all tho manufactured articles into which thoy
enter would bo a repeal of practically our.qntlro
system of tariff laws, which is Impossible as
long as we must raise a largo part of our rev
enues by tariff taxation.
Thoy toll us that putting raw materials on
tho free list is only ono of tho methods of afford
ing protection to the manufacturers, and is
therefore a republican doctrino. They utterly,
fair to draw the distinction between an afllrma
tlvo'act, on the part of congress to protect a man
ufacturer from foreign competition, and a re
fusal by congress to handicap a manufacturer
in his efforts to meet foreign competition, which
is wholly a different thing. One is to give tho
homo manufacturer an advantage by putting a
handicap on tho foreign manufacturer; whilo
tho othor is to handicap neither, but to give them
an equal chance. When two men enter a race
It is no protection to ono of them to refuso to
put a burden uppniilm. It Is only a slmplo'
act of fairness and justice.
It is true Alexander Hamilton, In his report
on manufactures, recommended tho exemption
of tho materials for manufacturers from duty
as ono of the means of encouraging and build
ing up manufactures in this country, but In do
ing this he only pointed out the obvious fa'ct
that our manufacturers would stand a better
show of success against foreign competition .If
no handicap were, placed upon them by legisla
tion which would add to tho cost of their raw
material and thereby increase the cost of their
manufactures. He was not recommending any
advantage over the foreign manufacturer in
favor of tho home manufacturer. His Idea as
only to secure qqual opportunity for tho home
manufacturer. Howevor, if free raw material
could be properly called protection to American
manufacturers, such protection would bo Infinite
ly better than protection in favor of foreign
manufacturers against our own manufacturers
as a tariff upon raw material would bo.
, Another reason they say they aro opposed to
free raw material is because it gives manufac-.
turcrs free trade In what they buy while leav-"
lrig thom protection on what they sell.
Certainly thoy ought hot to complain If our
manufacturers should have the good fortune to
have free trade In what thoy buy. Their com
plaint, then, is necessarily against tho policy of
leaving manufacturers protection on what they
sell. If that is what is proposed, their objec
tion -would meet my hoarty approval. 'But such
is not the case. The democratic proposal Is to
put- raw material on the free list, and at the
same time reduce all protective duties to a rev
enue basis, which means a competitive basis.
Then, under such a system, the manufacturer
would not only bo able to buy In a competitive
market, but he would be required to sell in a
competitive market. Those who oppose free raw
material seem to overlook the great difference
between a competitive market and a protected
market, and this seeing, to result in a great deal
of confusion in their own minds,
I am not discussing the republican protective
tariff system. The main purpose of that sys
tem is to shield the industries of this country
from competition from abroad. This is effected
by imposing duties so high upon imports that
the foreigner cannot pay the duty and compete
with our industries. This enables those en
gaged in home Industries to advance prices on
their products against our own people and thus
make their own business more profitable. It Is
a taxation of the many for tho benefit of the
few. It is an exercise o"f the taxing power of
the government for the benefit of private en
terprise. Such a system of taxation is called protection,
and the democratic party rightly denounces it
as robbery. (Applause on the democratic side.)
Viewing protection from a republican stand
point, of course every fair minded man, it seems
to me; would Insist that If its benefits are to be
:5-'
j.