HJ 9" U58 ,910 1 TARIFF COMMISSION HEARINGS BEFORE THE COMMITTEE ON WAYS AND MEANS OF THE HOUSE OF REPRESENTATIVES 61st congress, 3d SESSION ON H. B. 26232 and H. R. 28433 DECEMBER 13, 1910 / '< , %, WASHINGTON ' - f^'., <\^ GOVERNMENT FEINTING OFFICE ''',, A*? com;mittb3E! on ^^^^-x■s a-nt) MiKiVisrs, HOUSE OF REPRESENTATIVES, SiXTY-FlEST CONOEESS, THIED SESSION. SEEENO E. PAYNE, Chaieman. JOHN DALZELL, JOHN W. DWIGHT, SAMUEL W. McCALL, WILLIAM R. ELLIS, EBENEZEE J. HILL, CHAMP CLARK, HENRY S. BOUTELL, OSCAR W. UNDERWOOD, JAMES C. NEEDHAM, EDWARD W. POU, WILLIAM A. CALDERHEAD, CHOICE B. RANDELL, JOSEPH W. FOEDNEY, ROBERT F. BEOUSSARD, JOSEPH H. GAINES, FEANCIS BURTON HAREISON, NICHOLAS LONGWOETH, WILLIAM G. BEANTLEY. ARTHUR E. Blauvelt, Clerk. CONTENTS. Bills under consideration (H. R. 26232; H. R. 28433) 54, 56 Statement of: Campion, Richard 52 Cobb, John Candler 16,22 Good, Hon. James W 5 Lenroot, Hon. Irvine L 40 3 Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924007832268 TARIFF COMMISSION. Committee on Wats and Means, House of Representatives, Tuesday, Decemier IS, 1910. The committee met at 10.30 o'clock a. m., Hon. Sereno E. Payne in the chair. Present; The chairman, and Messrs. Dalzell, Hill,Boutell, Needham, Calderhead, Fordney, Gaines, Longworth, Elhs, Clark, Underwood, Pou, and Harrison. (The committee thereupon proceeded to the consideration of the bill H. R. 26232, "to create a tariff commission" ; and the bill H. R. 28433, "to create a tariff commission and defining its powers and duties.") The Chairman. The hearing this morning, gentlemen, is at the request of Mr. Good, of Iowa, in reference to bills creating a tariff commission, etc. The hearing will not be restricted to any one bill, but any gentleman who desires to be heard on the general subject will be heard. I think Mr. Good desired to — Mr. Good, you maj' state your own desire. STATEMENT OF HON. JAMES W. GOOD, A REPRESENTATIVE FROM IOWA. Mr. Good. Mr. Chairman and gentlemen of the committee, I have attempted in the bill which I have introduced, H. R. 26232, to work out in detail a tariff commission. I have fashioned the bill some- what after the interstate-commerce law, but I may say at the outset that I have no pride of opinion or authorship or of opinion with regard to the various details of the bill. It has occurred to me, and I beheve it has occurred to a number of the members of your committee, that there ought to be such a commission. It ought to be permanent. It ought to have power to act. With a permanent commission, with power to act, there certainly would be no occasion for remarks from either the floor of the House or from the Senate such as were made by members of this committee on the floor of the House and by Senator Root on the floor of the Senate at the special session of the Sixty- second Congress. I have before me the speech that was delivered by Mr. Hill, of Connecticut, with regard to the manner in which the last tariff bill was made. He speaks with regard to the preliminary work of the committee, the compiliug of the publication "Imports and duties," and then he says: It did not and could not include the difference in the cost of production at home and abroad. 5 6 TABIIT COMMISSION. Then he speaks of that other most valuable pubhcation that was compiled under the direction of your chairman entitled "Tariff notes;" and of it Mr. Hill says: But in this work, as in the others, there was no basis upon which the difference of cost of production at home and abroad could be ascertained. He further says that there was some effort made to ascertain, through the different departments, these facts, but says : So far as my knowledge is concerned, this attempt to secure information from for- eign sources was a complete and total failure. This same testimony is found in the record of the proceedings in the Senate, wherein Senator Root said : We have been here for over three months considering and discussing and voting upon the measure of protection that it is necessary to give in order to keep alive and prosperous the business of tens of thousands of corporations engaged in manufacture and trades affected by the protective tariff. Upon one hand we have garbled statements; upon the other equally garbled and partial statements; and no means of distinguishing the truth. We are under the necessity of proceeding by guesswork, by conjecture, always with dissatisfaction, because we recognize the chance that we have guessed wrong about whose statements come nearest to the truth. The bill that I have introudced is comparatively short, and as I said at the outset it provides for two principal things: First, a per- manent tariff commission, and, secondly, a commission that has power to investigate the facts and report those facts to Congress. It seems to me that some such plan is absolutely necessary. By reason of our complex commercial and industrial conditions our knowledge as to the cost of production must be very limited. We can not possibly know all the facts that it is necessary we should know in order to make a tariff bill that will do justice to both the laboring and industrial forces of our country. Past experience has shown us that it is almost impossible to revise the tariff without doing injury to some one, unless we have some commission, some permanent body, with power to investigate cost of production and the changes that are taking place every day regarding such costs and report those changes to this body as a basis for its action. Mr. Underwood. Have you provided in your bill that they shall give full publicity to their investigations 1 Mr. Good. I provide in the bill that they shall report to Congress, or either branch of Congress, whenever requested so to do; but that, as they are maldng their investigations, the subjects under investiga- tion shall not be given to the pubhc. Mr. Underwood. Here is a question that I would like to ask. Does your bill propose for them to report findings of their conclusions to Congress, or findings of fact ? Mr. Good. Findings of fact, without any recommendation as to the proper course for Congress to pursue. Mr. BouTELL. You have not discovered, have you, any w&j of pre- venting these parties, that Mr. Root refers to, making the same garbled statements to the new tariff board ? Mr. Good. No; they could make those same statements, but that commission being a permanent tariff commission, with power to investigate, could go out into the different sections of the country, and could go to foreign countries, and investigate those garbled state- ments, and find out wherein they were garbled and who was telling TAEIPF COMMISSION. 7 the truth and report the fact. That, it seems to me, is the essential part of the duty of a permanent tariff commission ; and that is the reason why it should be a permanent commission instead of a com- mission with a fixed tenure. Mr. Underwood. May I ask you another question ? Mr. Good. Certainly. Mr. Underwood. Do you provide in j^our bill that they shall con- duct their investigations under the direction of either the Ways and Means Committee of the House or the Finance Committee of the Senate or of the executive branch of the Government ? Is the inves- tigation provided to be directed from the legislative branch or the executive branch of the Government ? Mr. Good. The bill provides that their investigation shall be an independent investigation, but that when the Ways and Means Com- mittee desires they shall sit with that committee and furnish the information. They shall sit with the Finance Committee of the Sen- ate when it so desires, and furnish that committee with information; and they shall furnish the President such information as he may desire in the administration of the tariff laws. Mr. Underwood. Here is what I want to find out. Suppose the Ways and Means Committee had concluded to investigate, say, the woolen schedule, and this Commission v/as investigating the cotton schedule. Is there anything in the bill that would authorize the Ways and Means Committee to call on them and direct them to inves- tigate the subject that the Ways and Means Committee itself desired to take up ? Mr. Good. There is nothing in the bill that would give any com- mittee, or the Chief Executive, power to authorize them to do any one thing. They work on their own initiative. Mr. Underwood. Do you not think if the bill is passed along this line at all that the Ways and Means Committee, or the House — for the Ways and Means Committee is only an agent of the House — - should have power to direct along what line they should make their investigations ? Mr. Good. I certainly should have no objection to that. I believe that this commission, when constituted, should hare the power to investigate all of the facts, and it should be the servant to the securing of this information for the committee. I would see no objection to a detail of that kind. Mr. Harrison. Do you think the House ought to have the exclu- sive right to direct these investigations, or that the President ought to share in that right ? Mr. Good. I should say that the House should not have exclusive right, any more than the Senate Mr. Harrison. I mean the legislative branch, of course. Do you think they ought to have the exclusive right, or that the Executive ought to share that right ? Mr. Good. That is a detail to which I have not given consideration. It is a mere detail, and I think it does not make much difference about that. The principal thing, it seems to me, after all, is the creation of a commission with power to act and report to Congress. Mr. Pou. There is one question I would like to hear you address yourself to. The object of the bill seems to be to ascertain the dif- ference in the cost of production here and abroad. Suppose your 8 TARIFI* COMMISSION. commission was abroad and the manufacturers over there should refuse to give the information that you are seeking to get; by what process would you proceed to get that information s Mr. Good. If they should refuse to give information, I do not think it could be secured by any process from that source. It would have to be obtained from other sources. Mr. PoTJ. So that, I understand, all the information you could pos- sibly get on the other side would have to be purely voluntary ? Mr. Good. It would have to be purely voluntary or from published reports and matters of general information in those countries. Of course, I see no way in \mich such a commission could subpoena wit- nesses abroad who did not care to respond to subpoena. Mr. Harrison. If the gentleman from Iowa will permit me to get a httle further information, he seems to regard it as more or less of a detail whether this tariff commission he proposes to create is to be in operation under the direction of Congress or of the Executive. He will remember that in the debate in the House last year that question was a very essential one. Which, in the opinion of the gentleman from Iowa, is the branch of the Government that ought to have the direction of the investigation of this commission ? Mr. Good. I think it is more important that the legislative branch should have direction than that the President should have it. Mr. Harrison. Does he not think it ought to be an exclusive right ? Mr. Good. An exclusive right in the legislative branch ? Mr. Harrison. An exclusive right in the legislative branch. Mr. Good. I do not think so. I think that if the Executive desired information along some line to aid him in the administration of the tariff laws, that that commission ought to furnish such information. The Chairman. The bUl provides for that in section 5. Mr. Harrison. Suppose there were a Republican President and a Democratic House of Representatives, or vice versa, and the House of Representatives wanted to investigate the woolen schedule and the President wanted to investigate the cotton schedule. What have you to say about the conflict of authority in that case ? Would not the right have to be executive or legislative — one or the other ? Mr. Good. I do not believe that state would ever come about or that conditions would be such that they could not investigate both in due course of time. Mr. Harrison. The gentleman knows how long it takes to revise the tariff, and how searching the investigation must be, and he can see what a conflict would arise. I consider that of a good deal of importance. _ Mr. Good. In section 5 of the bill I have provided for the informa- tion that the commission should furnish to the President with regard to the different lines of investigations that it should pursue. Mr. Hill. And in section 4 you have provided for the informa- tion Mr. Good. I have provided there for the report to Congress. Mr. Hill. So that apparently sections 4 and 5 cover precisely the ground asked by Mr. Harrison, do they not ? Mr. Good. Except that I think Mr. Harrison's question implied the suggestion that there should be a mandatory provision. Mr. Hill. Is not that contained in both of the sections, under the language of section 4 so far as the House and Senate committees are TABIFF COMMISSION. 9 concerned, and under section 5 so far as the President is concerned ? Is it not mandatory ? Mr. Good. Well, I think perhaps it is broad enough to include any information that either the President or Congress might desire with regard to this question. I intended to take up the bill and go through the different sections, but I believe that by a casual examination of the bill you will see the plan on which it is drawn. The president of the National Tariff Commission Association is here for the purpose of being heard. I know your time is limited, and I will therefore not take any more of it. Mr. BouTELL. I would like to ask you one more question before you leave that matter, and to make one suggestion along the Hne of Mr. Underwood's question, which I think goes right to the root of one branch of this matter — as to whether the House of Representa- tives (which under the Constitution, of course, is made responsible for originating revenue leigslation), is going to have control of the tariff board as you have it in mind under this bill, so as to be able to call upon them directly instead of doing it through the Executive. Let me give you a concrete illustration. Suppose you wer4 sitting on the Ways and Means Committee and were interested in a certain schedule of a new tariff — we will say a duty on what are called St. Gall laces— and all those who appeared before the committee opposed, ostensibly as importers, the duty on St. Gall laces. Suppose you were quite reliably informed, though not by what would be in the line of proof, that all those importers were, as a matter of fact, for- eign ntianufacturers and exporters — in other words, in exactly the reverse position to that in which they ostensibly appeared before the committee. I give that as a concrete illustration. Does your bill provide for a tariff board upon which the Ways and Means Com- mittee could call for that information ? Mr. Good. It does. Mr. BouTELL. To make that investigation ? Mr. Good. It does. Mr. BouTELL. Or would the Ways and Means Committee have to make a request of the executive department and be turned down by the executive department if the executive department did not want to have that information furnished ? Mr. Good. I think the bill is broad enough to cover just such con- tingencies as that — and have the commission furnish that very infor- mation that the Congress would want from time to time in order to write a tariff bill free from bias and prejudice and garbled statements, such as Mr. Root mentioned in his speech. The Chairman. Mr. Good, you have provided that members of this board should be selected from certain persons, in certain occupations. I got a letter yesterday from a farmer who said that he beheved that one of these commissioners should be a farmer, and while he did not suggest it, we all know that the farmers' interest is one of the great- est — the greatest — interests in this country. Ought there to be such a restriction as to what class they should be selected from ? Ought not the farmers' class to be considered ? Mr. Good. If the number of the board is made large enough, I would say there is no objection to that; but the number beiog lim- ited to five, the chairman can well see that every particular industry could not be represented on the board. 10 TARIFF COMMISSION. The Chairman. No; but I was asking whether you did not con- sider it of importance that a farmer should be on it ? That is one of the most important classes that you have intended to represent in your bill. Mr. Good. I had felt, Mr. Chairman, that while that is a la.rge industry, yet by training and experience the men with the qualifi- cations such as I have mentioned in the bill would be better qualified to deal fairly with every industry than to take a person, for instance, who had given his whole fife and study to a single employment or industry. The Chairman. I do not expect that we shall ever be able to get any tariff board the members of which are either disinterested or nonpartisan. I do not take any stock in the idea of taking the tariff out of poHtics. I think it will be in poHtics as long as I live, and a good deal longer. We can not get any nonpartisan member of a board whose opinion is of any value ; and that being the case, and as you designate certain classes, my inquiry is whether you might not also include in that class, perhaps in preference to any that you have designated, the farming class of the community. Mr. Good. For the reasons I have stated, Mr. Chairman, I think I would not insert that class in the bill. The (■hairman. I want to make one further suggestion in con- nection with your remarks. It is a popular fallacy that the produc- ing classes only are heard in the formation of a tariff' bill, and that the consumer does not appear and is not represented. There is no greater fallacy in this country than that. The consumer is always represented. He is represented by the importer whose interest is with the consumer in so far as the importation of articles is concerned. The cheaper he can get the articles m, the lower the cost, the lower the tariff, the better of course it is for his business; and he is informed as no other class in this country is informed. He is always on hand, he always appears, he always makes his statement, and" it receives the same consideration as the statement of the producer. So that the committees of Congress can not hide behind any excuse that only one class appeared before them, and that the consumer does not appear and is not represented. Of course, the Tariff" Board will run up against this proposition — that the parties who do appear are interested on one side or on the other. There is no man who has ever had any large practice as a lawyer who does not know that his witnesses are generally partisan. Their word can not be taken without a full grain of allowance. He must always look into their motives, always cross-examine and endeavor to get at the truth. Take this recent investigation of this tariff'. I think no fair-minded, intelligent man will say, who has read through the 10,000 pages of evidence that was produced before this committee, that each man who appeared was not subjected to a fair and thorough cross-examination in order to get at the truth. I have had several men, e'ditors, who had written a great deal of stuff' before they attained the knowledge, who said they were surprised when they came to study those pages the thoroughness with which those wit- nesses were cross-examined. If there is any way in which a tariff board would fairly go into this matter and bring out the truth, I want the light turned on this tariff question, in every possible direction, to bring out the truth. I TABIFF COMMISSION. 11 would not like to see the investigation that is already provided for by- law turned aside unless it is provided for in some other way. For instance, one of the most valuable pieces of information before this committee last year was the report made by the Bureau of Manufac- tures in the Department of Commerce and Labor, where the steel manufacturers of the country, making some 93 to 95 per cent of all of the manufactures of iron and steel, had reported for a number of years and had thrown open their books to the examination of this bureau. The bureau had made its report, which was not made public until these hearings began ; and I think my associates will agree with me that the facts that were obtained by the Bureau of Corporations in the Department of Commerce and Labor on the question of the sub- ject of steel threw a great deal of light upon the subject, and enabled the committee, when the witnesses appeared before them, to get at facts that they would not have gotten if it had not been for this report. I would like to see, in the same way, that investigation go on all the time in reference to these industries. It would help any future Committee on Ways and Means that might be framing a tariff bill to get at these facts. The Constitution committed to the House of Representatives the origination of tariff legislation, of all revenue legislation, and conferred upon the Senate only the question of amendment. Ihave always thought that by " amendment "the framers of the Constitution intended only the amendment which was germane to the bill actually presented to the Senate, and not an amendment to a bill providing only for revenue upon one item, which amendment should cover the whole range of revenue legislation. I believe that that was the intention of the framers of the Constitution, that "amendment" there meant what we term now a germane amendment by way of distinguishing it, and that if that policy had been pursued in all our revenue legislation the object of the framers of the Con- stitution would have been attained by revenue bills originating among the Representatives elected every two years by the people of the United States. I only throw that in by way of comment on what you have said. Mr. Good. I agree with the premises laid down by the chaiijiian. I can only add in conclusion that it is not the purpose of the bill to take the question of the tariff out of politics, nor do I believe it will weaken the policy of protection. I only claim for it that it will lijive this committee and Congress power to act upon information that is obtained by an impartial tribunal, and then they can act upon those facts. One of the things, I believe, that ha.s hampered this com- mittee, and has hampered Congress, is the lack of adequate and reliable information. I do not say that in disparagement of the great work of this committee. I believe no committee in Congress has worked more diligently or has put in as many hours at hard work as has this committee, for by the very nature of the things it was incumbent upon it to investigate a great many subjects it did not have the time nor the machinery to better investigate. The Chaieman. I see that your bill does, not suii^^est a report by this commission as to rates. I think that is a matter peculiarly to be fixed by Congress. Mr. Good. It does not. The Chairman. And it can not be delegated and should not be delegated in ariy way to any tariff boni'd. Mr. Good. No. 12 TAEIFF COMMISSION. The Chairman. And I think further than that that whatever tariff board is appointed, and however thorough their report, that no committee of Congress having this matter in charge will ever blindly accept their fiidings. In other words, they will examme into it; and the report must be made good before the corninittee having this matter in charge. They want to investigate originally before they are prepared to act on the subject. Mr. Good. I thank the committee. Mr. Clark. Let me ask you a question. You provide for a non- partisan board, do you not ? Mr. Good. I provide for a board the members of which shall be selected without regard to their political affiliations. Mr. Clark. Do you think there is anybody in the United States that is fit to investigate the tariff question that has not already some theory about the tariff ? Mr. Good. Well, I assume that a man who has strength of character enough and intellect enough to sit on a board or a commission of this kind would have some views on such questions. Mr. Clark. How are you going to get a nonpartisan board, then ? Mr. Good. I did not say that this bill provided for a nonpartisan board. Mr. Clark. What kind of a board is it that you provide for ? Mr. Good. A board to be selected by the President without regard to their political affiliations; and I would not object to a provision in the bill providing that not more than a certain given number should be members of any political party. Mr. Clark. Why not appoint a board of one man, then ? If you leave a majority of one on your board you have as much a partisan board as if the board was made up of one man. Mr. Good. I would not appoint a board of one man, because one man could not do the work any more than this committee is able to do the work. Mr. Clark. When you come down to specify who would be on the board, you say: "Two members having special knowledge of the pro- ducing interests of the United States." What do you understand by "producing interests?" Mr. Good. That they should have special knowledge with regard to the various producing interests, such as manufactures. Referring to the idea that your chairman has suggested — that of agriculture — if it was thought wise to put a representative of that interest on the commission, that might be done. I mean by "producing interests" any of the interests that are producing, that are generally known as producers. Mr. Clark. But that is exactly what I am trying to get at. You are the daddy of this bill. What do you mean by "producing inter- ests?" Mr. Good. Persons having general knowledge with regard to pro- duction by manufacture, agriculture, or by any other method. Mr. Clark. You hear in later years a kind of jargon that has grown up that the industrial States or producing States are simply the manufacturing States. Has not "producing," in the lingo of the tariff talkers, come to mean practically the same as "manufactur- ing?" Mv. Good. I think that is possibly true. TARIFF COMMISSION. 13 Mr. Clark. Do you not think that if you are going to rig up this scheme here at all you had better put it in in so many words that one of them ought to be a farmer ? That is the greatest producing interest in the United States. Mr. Good. I do not care so much with regard to the details of this bill. This is a very small detail, as to who shall be members of the commission. Mr. Clark. No; that is the very essence of it. Mr. Good. I think the essence of the bill is to have a commission that is permanent, with power to act; and I am perfectly willing to leave to the President the power to appoint high-minded men to be members of the commission. Mr. Clark. Now, I can pick out three men that I know, and maybe more if I were to hunt around, highly respectable men in the United States, of fine mental endowments, that believe that this tariff ought to be raised all along the line; and then I can pick out some other men, just as good as they are intellectually, and as patriotic and all that, that believe that it ought to be cut strictly to a revenue basis. Between those two extremes there is every kind of tariff view that mortal man can have. Would not the complexion of the board at last depend on the state of mind the President was in on the tariff question himself ? Mr. Good. Possibly, if the law provided that the commission should have power to. recommend measures and rates. Mr. Clark. What are they up to, if they do not recfommend ? Mr. Good. They are simply to ascertain the fact. It seems to me if a man is an honest man and will perform his duty it makes little difference, when it comes to investigating a fact and reportirtg on the cost of producing a given article, whether he is a Republican or a Democrat. Mr. Clark. But would not every fellow start out with a precon- ceived theory and endeavor to bolster it up, just like a fellow goes into the Bible to extract quotations from it to bolster up his theory of infant baptism, immersion, or anything of that sort ? Mr. Good. If infant baptism or immersion were a fact instead of a theory, that might be true, but the commission, as the bill has been drawn, will only report facts and not theories, and in the report- ing of those facts it seems to me that no man is big enough to sit on that commission who will not report the fact, even though that fact does not fit into his political theory. Mr. Clark. Did you ever read an editorial published here last summer in the American Economist and other papers somewhat widely circulated, translated from a paper that was published at Chemnitz, Germany, in which they jumped on the United States Government in general and its tariff board in particular, and one Mr. Reynolds with especial force, and said that the whole thing was impertinent and an insult to all the nations of the earth, and that they came over there browsing around and trying to induce manufacturers to give up their trade secrets and all that kind of stuff', and intimated that the whole tribe ought to be drummed out of the country ? Mr. Good. I do not believe I saw it. Mr. Clark. You read the American Economist, do you not ? Mr. Good. Yes, sir. 14 TAMFF COMMISSION. Mr. Clark. That is the highest authority we have. Mr. LoNGWOBTH. Do you regard it as essential that there should be any description of the qualifications of the members ? Mr. Good. No; I think that is a detail; and I say that with regard to practically eveiy thing in the bill except the naked essentials; that it should be a permanent tariff commission with power to act. The number of commissioners, their qualifications, and matters or that kind are mere matters of detail; but it seems to me with a per- manent commission with power to act, its findings would have weight not only with Congress but with the President. Mr. Clark. How would it strike you to change the bill so that the tariff commission should be elected by the House of Representatives and made amenable to the House of Representatives, that is charged under the Constitution with originating tariff bills ? Mr. Good. I am afraid such a measure would hardly pass the Senate, in the first place. Mr. LoNGwoRTH. It would hardly be a permanent board. [Laughter.] Mr. Clark. Why not ? It seems to me, from a hasty reading of this bill, that the chief end of it is to advise the President and execu- tive officers how to enforce a tariff bill. Is that so, or not ? Mr. Good. Not at all. The chief end of the bill is to give Congress the facts that it ought to have upon which it would bottom any revenue or tariff measure. Mr. Clark. What is the Department of Commerce for ? Mr. Good. Well, I do not know. I noticed that this committee did not call upon it very generously for information. '^Ir. Clark. That is exactly where we got the information about steel and iron. Mr. Underwood says that the report of that de- partment is the most valuable document we have around here, and tie knows more about iron and steel than most of us. Ml'. Good. I understand that you got some information there. Ml'. Clark. How are you going to get Congress to accept the deductions and conclusions of this commission? Mr. Good. That is a matter for Congress to act upon, of course. Mr. Clark. Did you know that Gen. Arthur, under a resolu- tion or bill, appointed a tariff commission that went out and roamed around over the country for two or three years and came back and reported — nearly every one of them Texans, too — that there ought to be a general reduction of 20 per cent; and Congress immediately proceeded to make a raise of 10 per cent? [Laughter.] Mr. Good. I know this bill is bottomed altogether on a different principle from that under which that commission was appointed. This commission will have no power of recommendation at all. Mr. Harrison. How would you meet the situation in case the House of Representatives or the Ways and Means Committee wanted to revise the woolen schedule, and called upon this tariff commission of yours for information like that, and they replied that under the direction of the President they were engaged in investigating the chemical schedule, and could not give any facts as yet about the woolen schedule ? Mr. Good. If I thought that was as serious as you seem to regard it, I would insist on a provision going into this bill providing that the first duty of the committee should be to furnish information to the Con- gress of the United States. TARIFF COMMISSION. 15 Mr. Harrison. There is no such provision in the bill as it reads now, is there? Mr. Good. No ; there is no such provision in it, but if that is regarded as a necessary part of the bill, I would have no objection to that going into the bill. Mr. Clark. Do you know anything about how far this tariff board has gotten that we have had on hand for some time? Has it any information in stock ? Mr. Good. I know nothing about the information that that board has collected except the published speech of one of its members. Mr. Clark. You did not get much information out of that, did you ? Mr. Good. That is all the information I have. Mr. Clark. There is a good deal of general statement in that speech and precious little information. Mr. Pou. The papers say that their money is about all out, too. Mr. Clark. That is a pity. Mr FoRDNEY. The bill provides on page 3 : No person who is a Member of Congress, and no person who is in any manner pecu- niarily interested in the production or importation of any article or articles enumerated in the customs and tariff law, shall be eligible to hold such office. What kind of a fellow do you think that would be? Did you ever know a man who had ajiy ability who was not engaged in pro- ducing something, if it was nothing more than chickens ? Mr. Good. Oh, yes. Mr. FoRDNEY. I never did in my life. I have failed to find that fellow yet. Mr. Good. If the Interstate Commerce Commission had been filled with men who were presidents of railroads, the findings of such a commission on the question of the fixing of rates would not have any standing in the country and very little in the courts. If this commission could be manned by men who were neither importers nor persons engaged in manufacture, the findings of such a commission would be better regarded than if it were composed of men who were interested either as importers or as large manufacturers. That is my only thought, and that, again, is simply a detail of the bill. Mr. FoRDNEY. You will agree with me that that commission ought to be made up of the most able men in the country, will j'ou not ? Mr. Good. It ought to be made up of a class of men who have a particular power of investigation, and of ascertaining facts. I do not know that it would require eloquent men, or anything of that kind; but it ought to require men who are experts in the examina- tion of testimom^, and in ascertaining what the real facts are in a given case. Mr. FoRDNEY. Eloquence would cut no figure as to the fitness of the men there. Mr. Good. No. Mr. Fordney. But on the other hand, to go about this country and all foreign countries and compare the cost of production here with the cost of production abroad, and then make an intelligent report to Congress so that it could act upon it, certainly would take men of some marked abihty — to make an intelligent and efficient report. Can you find such men in the country who do not produce anything? 16 TARIFF COMMISSION. Mr. Good. I will say to the gentleman that if that clause would mean the putting of weak men upon the commission, then it should be stricken out. Mr. FoRDNEY. I would, too. Mr. Good. There is no question about that. I did not think at the time I drew the bill that it would produce any such effect, but if, in the judgment of the committee, it would produce such an effect, it should be stricken out. The Chairman. Mr. Fordney, have you any objection to allowing Mr. Good to suspend now, and to have him go on later ? Mr. Cobb is here. Mr. Fordney. I would be pleased to do that; but I would like to ask some questions a little later. The Chairman. Then, Mr. Good, we will ask you to suspend for the present, and we will hear Mr. Cobb. STATEMENT OF MR. JOHN CANDLER COBB, PRESIDENT OF THE NATIONAL TARIFF COMMISSION ASSOCIATION. Mr. Cobb. Mr. Chairman and gentlemen, I appear here as the E resident of the National Tariff Commission Association, and I have ere a list of our organizations and delegates, which is very complete, although there are a few which are not printed on this list. This shows about 100 boards of trade and chambers of commerce through- out the United States. The organization of the body is that each one of these organizations appoints a delegate. I, for instance, am the vice president of the Boston Chamber of Commerce, and am appointed by the Boston Chamber of Commerce to represent it in this matter. We met together and elected our board of directors, and that board of directors elected a president, which happened to fall on me. Now, I want to say a word as to this organization and what it means, because I think it is of fundamental importance in the con- sideration of this question. The boards of trade and chambers of commerce in this country have been, during the past few years, developing along very important lines. That is to say, we have been going, more than was ever done before, into questions of great public interest. We have been forced to this by the fact that organization and consolidation seems to be the tendency of the times, and it is rather necessary, if we wish to maintain our strength and position in the world — and when I say strength I mean the strength of the rank and file of the business men — that we should get together and consolidate more or less. This has been growing to an extent that has made it a strong organization throughout the country. We exchange views and consider things. We consider questions of this sort. What I am getting at is this. Our boards of trade throughout this country have made a study of this tariff question, such as never was made before by any body of men, I think, outside of Congress. That is to say, when the last tariff bill was passed our board of directors decided that one member should be here at all times during the con- sideration of the bill, simply and solely for the purpose of watching and studying, and seeing what was being done and how it was being done; what improvements could be made, and what it was wise to do. Not that it was any of our business, except to see and help, because TARIFF COMMISSION. 17 the tariff affects more directly tlie business interests of the country than anything else. The result of that investigation by us was communicated to our hundred boards of trade through our secretary, by correspondence,. in a quiet way; that is, there was no blare of trumpets in the news- papers, or interviews, but it was communicated throughout this whole country, so that our information became a matter of common knowl- edge throughout the business community. Now, we decided — and this, I think, may be putting the matter very plainly — that what Congress most needed was to be protected, against us. Members of our boards of trade were coming down here by thousands, literally, and hounding their Members of Con- gress, and looking after their special interests, nagging men and making all sorts of statements. I will not say that they made false statements, because they are honest men, and they are men, as a rule, who are good business men, but I do sa}^ that a great many very exaggerated statements were made. We do not intend to have that done, and we do not want it done, and the control and force of public opinion, the force of our boards of trade, is going to be, in my opinion, the important element to make this thing accepted. That is to say, it does not make any difference, in my opinion, within reasonable limitations what the terms of this bill are. It is the auestion of getting a body of men whom the business men of the Tnited States feel represent them; so that Mr. So-and-so from Illi- nois can go there and feel, "These men are here to represent us and look after us." Now, to give you an exact sample: I, as I say, represent the Boston Chamber of Commerce, with 4,000 members, and a third of those or more are protected manufacturers. I was appointed to take charge of the tariff question, and took up the tariff-commission cause, and at first was met by a general feeling expressed about as follows: "Oh, John Cobb, you are a millennium hunter. That is not the way the thing is done." My theory has been that if the business men of this country decide that this tariff problem is to be worked out fairly and nobody is going to get any special benefit, every one will be satisfied and the intem- perate discussion stopped, and there will be no horde of men coming down here. I say again that the greatest thing this commission can do is to pro- tect you gentlemen against that very thing. Wlien a man comes to you and says, "My heavens, if my duty is not increased 25 per cent, I will have to discharge 1,000 laborers, and your chance of reelection will be ruined," you can say to that man, "My dear friend, that is too bad; you of course know what your conditions are; you of course are right in it and can prove these statements; you just step over to the tariff board and get them to vise your figures, and then come back to me with the report that those figures are right and correct and I will stand up in Congress and hold out for you ' until the cows come home.'" And that is the point. Get those men away from this thing. I am talking about the men I represent, and those are the men that should be made to feel that they are going to have fair treatment without the necessity of personal pressure. 70470—10 2 18 TARIFF COMMISSION. It is not a cjuestion of protection. It is not a question of tariff for revenue. This tariflF commission is just as much needed on the basis •of a tariff for revenue. There is no worse example of the need of a tariff commission in the whole history of tariff than the WUson bill, passed on a platform calling for tariff for revenue. We needed the tariff commission far more then than for the last bill. That is to :say, the question of the tariff is a question which should be decided Jby the country as a whole, by the different parties placing in their .platforms the tariff principle which they beheve in. And the country •decides by the election of one party or the other what should be the policy of the country. If we decide in favor of a tariff for revenue, we want it. We do not want the Wilson bill. If we decide in favor •of a tariff for a moderate and reasonable and fair protection, we want it. I do not want to criticize in the presence of you gentlemen the last bill, because you made it very largely. Mr. Clakk. Goon; criticize it. [Laughter.] Mr. Cobb. But I do say The Chairman. Do not hesitate, so far as this side of the House is concerned. [Laughter.] Mr. Cobb. But I do say that The Chairman. In fact, we would like to hear a little honest ■criticism. Mr. Cobb. I do say that there are in the bill different schedules liaving different measures of protection — that is to say, the hide and leather schedule is not based on the same economic basis that the woolen schedule is — the measure and extent and basis of protection differs. Now, these things should be harmonized and adjusted. I think you see what I mean. In other words, if every man in this •country can feel that when the country decides on a principle it is going to be adopted, and he is going to be treated just as fairly as •every other man is, you are not going to have the troubles you nave had. Now, gentlemen, I want to call your attention to what you are doing when you pass a tariff bill. This question of protection was never considered in the Constitution. Revenue is raised under the E revisions of the Constitution. Tariff is raised for revenue purposes ; ut the protective principle which arose afterwards has been declared constitutional by the Supreme Court and is the law of the land. The Chairman. I would suggest that you read the title of the first tariff bill that was passed after the ad.option of the Constitution. Some of the members that helped to frame the Constitution were in •Congress at that time. Mr. Cobb. Well, I do not see any evidence in the Constitution The Chairman. I am simply speaking of the first tariff bill that -was passed. Mr. Underwood. That was a 5 per cent tariff bill. Mr. Cobb. If there was a distinct acknowledgment of the protec- tive principle by the first Congress, Mr. Payne, lam at fault. The Chairman. Read thatl)ill and see whether you discover any- thing of that kind in the title itself. Mr. Clark. The chairman does not distinguish between a revenue ^jariff and a protective tariff, I understand ? The Chairman. I want to find out what my friend does stand for. TARIFF COMMISSION. 19 Mr. Cobb. That was not the point I was making, Mr. Chairman. The point I was making was that this power of protective tariff is a power of such tremendous and vital importance that it can make or ruin individuals, industries, or communities, very quickly and very directly. That is is the exercise of tremendous power. Mr. Clark. Mr. Cobb, you can not rig up any scheme to keep these people that are interested in the tariff from using their influence or arguments, or whatever you please to call thein, with anybody that is charged with making a tariff bill, can you ? Mt. Cobb. Certainly not. But we can decrease, their, number and nullify their influence. 'Mr. Clark. Would it not resolve itself into the fact that that large horde of gentlemen who, come down here, according to your own state- ment, by thousands would simply turn their attention to this Tariff Board instead of to the Ways and Means Committee ? Mr. Cobb, This Tariff Board, if our idea prevails, is not going to be a board to consider what the duties ought to be. They are simply to collect the facts on which tariff consideration is based. There is a line of demarcation which is very important. The purpose is to have this board sitting here permanently. And I want to draw a distinction between a commission created in the excitement of tariff revision for the purpose of going out and investigating and a coriti- mission which sits here all the time steadily and establishes itself in public confidence. If it sits here quietly and permanently and establishes itself in public confidence and gets the data when there is no excitement, when men are at peace, ithe work can go along and will establish itself, with the support of the country back of it; for instance, our organization of business men, and I may add the National Grange, which, while not a member of our organization, have their president as one of our members, and their action has been along exactly the same line as ours. We are working in harmony Mr. Clark. Let me ask you another question. How do you figure out that the people of Massachusetts, Illinois, or any other State can feel that they are any more represented by a member on this Tariff Board than they are by a Member of, Congress on the Ways, and Means Committee ? Mr. Cobb. We feel that we might be too much represented by a Member on the vVays and Means Committee. Mr. Clark. \Vhat is the diiference ? Mr. Cobb. Do you mean whether Mr. Clark. What is the difference between the nature of these commissioners and the nature of members of the Ways and Means Committee ? How are their mental processes going to be any different from each other if they have the same amount of sense 1 Mr. Cobb. A man who is a trained investigator, or who is put at a certain job, and who feels that he is there permanently, and that that is the place to make his record, has the same feeling that you have seen and I have seen a thousand times, when we have seen some lawyer who has been a violent advocate in the courts appointed to the bench. In one month he is a different man. Mr. LoNGWORTH. Is not the distinction this: That members of the Ways and Means Committee are not only charged with the duty of finding facts but of basing a conclusion upon the facts ? Mr. Cobb. Exactly. 20 TARIFF COMMISSION. Mr. LoNGWOKTH. And this commission only has the duty of finding the facts ? Mr. Cobb. That is exactly it. Mr. FoEDNEY. There are 392 Members of the House of Kepresenta- tives, coming from every hill and corner of the United States. They ought to know something about the industries of their respective dis- tricts, and they do. I claim to know something about the industries in my district. Mr. LoNGWORTH. How about lumber ? Mr. FoRDNEY. The lumber schedule has a lower rate of tariff than anything in the bill except fish. How could the Tariff Conmiission go to my district and get any better information than I could get, or than any other member of this committee could get ? What would you suggest as to how they could get the information ? Mr. Cobb. I would answer that question in this way: I do not know that it is a direct answer. In fact, I would say that probably the needs of your district you probably know as well as any man that could go there. Mr. FoEDNEY. I ought to. I canvassed it very thoroughly for twelve years. Mr. Cobb. I am not speaking personally, but I will say that in our opinion a majority of the Members of Congress approached action on the Payne bill from the viewpoint of their own districts. Mr. FoKDNEY. Oh, no; I beg to differ with you. The men on the Ways and Means Committee Mr. Cobb. I am not talking about this committee. I am talking about the rank and file of the Members in the House. Mr. Harrison. Do you not think that a Member of the House who has to go before the people for reelection every two years is a safer custodian of this great power than men appointed for six years by the President? Mr. Cobb. Absolutely. I would not give the commission any power whatever. There is no power contemplated. Mr. Underwood. As I understand, what you are contending for, representing your association, is that Congress should appoint a board of statisticians to assemble and gather facts for the benefit of this committee? Mr. Cobb. Absolutely. Mr. Underwood. And that is as far as you want to go ? Mr. Cobb. Yes. Well, gentlemen Mr. Underwood. Would that be satisfactory to the people you represent, if we were to go that far and no farther ? Mr. Cobb. Well, now, do you mean Mr. Underwood. To assemble and gather facts and statistics re- lating to the (questions that come before this committee, but not to indulge in advice or conclusions ? Mr. Cobb. Absolutely; not to indulge in advice or recommenda- tions. Mr. Fordney. We have such a commission. Mr. Underwood. I would Uke to ask one other question. Does your association stand for the control of the reports and the work of this board by the executive branch of the Government, or by that Eortion of the legislative branch of the Government in which power as been vested by the Constitution ? TABIFF COMMISSION. 21 Mr. Cobb. Absolutely, the leo;islative branch. A board created as the present Tariff Board is will not, in our opinion, accomplish the results required. That is to say, it must be a board that is responsi- ble to Congress, and in touch with Congress. Mr. Underwood. I agree with you thoroughly in that. Mr. Cobb. And outside of the control of any administration, in so far as its work is concerned. Mr. Underwood. I want to ask you this: If we have a board that is to gather facts — and I do not think this committee can have too many facts ii they are properly assembled and represent the truth, or too much information — and they are to be under the control of the legislative branch of the Government, I want to ask you whether you think it wiser to appoint that board by the executive or by the legis- lative branch of the Government ? Mr. Cobb. I think that it is far wiser to have the appointing power in the executive. I think that ordinarily the appointments made by a single responsible executive are more successful, on the whole, than any other system. Well, take for instance the appointment of judges. I think it is, as a rule, better to have the judges appointed than to have them elected, and I think the same would apply to this. Mr. LoNGWORTH. How would it be possible to appoint a perma- nent board, if that power were given to Congress ? The board could only last two years. That is the limit. Mr. Cobb. That is, the power of Congress would not extend beyond that time ? Mr. LoNGWORTH. Certainl}^ not. If you want to have a permanent board you must give the power to the President. Mr. Cobb. Permanence is the important part of it. Mr. Clark. Suppose you were to get a lot of fellows in who did not perform to satisfy Congress. How are you going to get rid of them if the President appoints them ? Mr. Cobb. We have worked and we have fought for the Civil Service Commission. It is not perfect, but, Heavens, how it has improved conditions. We have worked for the Interstate Commerce Commission. We criticise their acts oftentimes, and do not approve of everything they do, but the work that the Interstate Commerce Commission on the whole has accomplished has been, in our opinion, of ver}^, very great value to the United States. We think the Tariff Commission is largely analogous. Mr. FoRDNEY. We have a tariff board at the present time. The Chairman. One moment. It is almost 12 o'clock. I was going to suggest that the committee might come together at half past 1 to ask further questions. Mr. FoRDNEY. I will come at any time. I would be pleased to ask some questions and to get some information on this question. The Chairman. I suppose there are other gentlemen — I do not know — who desire to be heard on this bill at some future time. We have another hearing before this committee to-morrow, and we could adjourn this hearing until Thursday morning at half past 10 o'clock and go on with it then. Then, without objection, we will suspend here with that understanding and take a recess until half past 1 o'clock. If the business of the House is in such shape that we can do so, and if any gentlemen will appear here, perhaps they can be heard this afternoon. 22 TARIFF COMMISSION. Mr. Cobb. I would like to say that in order to save time it has been decided by my associates that no one except myself would appear on our behalf, in order to make it as brief as possible, and because our testimony would be cumulative. . The Chairman. Some other gentlemen have bills that they wish to be heard upon. (The committee thereupon took a recess until 1.30 o'clock p. m.) AFTER RECESS. At the expiration of the recess the committee resumed its session. The Chairman. The committee will be m order. Mr. Cobb, Mt. Fordney was about to ask you some questions when we took our recess. STATEMENT OF MR. JOHN CANDLER COBB— Continued. Mr. FoRDNEY. Mr. Cobb, I did not want to interrupt you until you had finished your statement that you wanted to make. Had you finished your statement? Mr. Cobb. I think I had finished, I may say, the general state- ment, sir, but I had not taken up the question of our belief as to the formation of the commission; and I also had not taken up any con- sideration of the details of the bill. That was what I desired to do this afternoon; but I will be glad to adopt any course that you gentle- men wish with regard to the matter. Mr. FoRDNEY. I just wanted to ask this, Mr. Cobb. We have a tariff board at the present time, authorized and empowered to obtain information as to the cost of production of any article in this country, and the cost of such Hke article produced abroad. That was the purpose of the creation of the tariff board, when it was created — to give information to the President so that he might make recommenda- tions to Congress where he found inequalities in the different items in the tariff law. Now, if it is not proposed to give any power to the tariff commission to recommend to Congress or to fix laws, what would be the difference between the estabhshment of a tariff commis- sion and the present tariff board, in your opinion ? Mr. Cobb. The difference is just this: The powers of the tariff board are formed by a provision in the sundry civil bill, empowering the President to appoint "such persons." I think I am correct in stating that there is no legislative recognition of the existence of a tariff board. Mr. LoNGWORTH. There is, in the Payne law. Mr. Cobb. Excuse me ; not in the sense Mr. LoNGWORTH. There is no definite provision for it, but there is an authorization. Mr. Cobb. An authorization for the President to employ "such persons." Mr. LoNGwoBTH. That is a legislative authorization, though. Mr. Cobb. That is a legislative authorization; but it is purely a presidential matter. That iis to say, it becomes a part of the per- sonal work of the administration and has nothing to do with Con- gress, which is the power that makes tariffs and must make tar^ TAEli-P COMMISSION-. 2S bills. Now, the fact is that I personally, and our organization gen- erally — every one of us who has looked into this matter — thoroughly approves of the work that has been done by the present tariff board. We think they have made a splendid start, and we think the President has been very earnest to produce the best results in every way. We make no criticism whatever of the present situation. But that is, as I understand it, entirely subject to the question of an appropriation by Congress from year to year, and the Tariff Board' is a part of the executive department of the Government, and it has no direct authorization or association with Congress, which has the duty of levying tariff. Mr. FoRDNET. The information obtained by the Tariff Board is at the disposal of Congress at any time Congress calls for it. There is nothing in the public records belonging to the Government but what Congress can obtain if it calls for it. ifi. Cobb. Certainly. Mr. FoRDNEY. But during your remarks a while ago you said that out of several thousand — I have forgotten how many members there are of your organization — one-third of them were protectionists. Mr. Cobb. Oh, no. I did not say that. I said the membership of the Boston Chamber of Commerce was 4,.300 members, one-third of whom were protected manufacturers. Mr. FoRDNET. You are right. That is the way you put it. How- many of them are importers ? Mr. Cobb. I should say perhaps a quarter. No; not over 20 per cent. Mr. FoRDNBY. Is it not true, Mr. Cobb, that the average importer is a free trader, and that the manufacturer in this country is a pro- tectionist, as a rule ? Mr. Cobb. Of course, that is the tendency of the business of each man. Mr. FoRDNEY. In the appointment of a board of this kind, in the creation of it, do you think it would be advisable to have a nonparti- san board appointed. Mr. Cobb. I certainly do. Mr. FoRDNEY. Do you think men could be found who woukl have no fixed views upon the tariff. Mr. Cobb. I certainly do. Mr. FoRDNEY. I never met one yet that did not have an opinion on the tariff. Mr. Cobb. I would answer that in this way. I think that the chairman of the present board — I do not know what his political party is — but I guess he is what we used to call a mugwump in New England. I know what his training is Mr. FoRDNEY. What is his training ? Mr. Cobb. As an economic professor at Yale College. I do not think that his judgment in investigating the facts would be in the slifrhtest degree affected by his opinions. Mr. Calderhead. You refer to Mr. Emery I Mr. Cobb. Mr. Emery. Mr. FoRDNEY. Do you believe that more correct, better, and more rehable information could be obtained by a tariff board tlian can he- obtained by Members of Congress themselves ? 24 TARIFF COMMISSION. Mr. GoBB. Not if you set five Members of Congress to work on that proposition. Mr. FoEDNEY. How about 19 Members? Mr. Cobb (continuing). With the belief that it was their hfe work, and with the provision that they should engage in no other business, and do nothing else, and keep them at it from now until the end of their lives, I believe that the chances are that any five members of this committee would make a perfectly satisfactory tariff board. Mr. FoEDNEY. That is not possible for Congress to do — to create a board and appoint men as life members. Mr. Cobb. That is the reason we do not think it is practical to produce the results by a committee of Congress. Mr. FoEDNEY. I say, you can not create a tariff commission and give them a hfe tenure. Nothing can be done by this Congress that can not be undone by the next Congress. Mr. Cobb. When I say "life tenure" I mean a tenure of years. What is the provision with regard to our courts? Certainlj^ the judges of the Supreme Court, or of our circuit courts are appointed for life. Mr. FoEDNEY. They are provided for by the Constitution. Mr. Cobb. The question whether it is for life or for a long tenure is not important, in my opinion, provided the tenure is long enough so that a majority of the members of that commission are at all times removed from the question of reappointment. That is to say, so that the question of reappointment is so far removed as not to be a factor in the situation. If you put a man at a piece of work, and he feels that that is his life work, he is in a different position and the same man is a different man from what he is if he takes it up for three months. Mr. FoEDNEY. But Congress is not given the power to do that, Mr. Cobb — to create a board to exist for a long time. Mr. Cobb. What is the basis of the Interstate Commerce Com- mission, for instance ? Mr. FoEDNEY. I do not know enough about it to state intelligently. Mr. Dalzell. They are appointed for a term ? Mr. Cobb. They are appointed for a term of years, and for a long period. Mr. Hill. And the terms do not expire at the same time. Mr. LoNGWOETH. It is almost the same provision as that carried by the Good bill, is it not ? Mr. Dalzell. This bill provides for a term of six vears. Mr. Cobb. Yes. Mr. Hill. I would like to ask you a question. Have you ever been engaged in manufacture ? Mr. Cobb. Yes. Mr. Hill. In what line ? Mr. Cobb. I have been engaged in woolen and in cotton. Mr. Hill. Do you think there would be Mr. Cobb. I am not engaged now, but I have been. Mr. Hill. Do you think there would be any difficulty in a tariff board getting complete and accurate information from the manu- facturers of, say, Massachusetts, for instance — as you come from Massachusetts — and do you think there would be any objection on their part to throwing open their books fully and completely to the investigation of the tariff board ? TARIFF COMMISSION. 25 Mr. Cobb. Absolutely none; and I believe to-day that the senti- ment has been already created to an extent that has led the manu- facturers of this country to believe that this is the way to get the best results. I believe that they are to-day willing, and I believe that as time goes on they will be more and more willing. For instance, I was talking with Prof. Emery the other day about some work he has been doing — I think it was in connection with the pulp schedule — and he told me that the producers of over 90 per cent of the pulp paper produced in the country had cordially received their requests for information and had taken it up with them in a perfectly friendly and absolutely open way, and that the neglect and refusals to come forward in that way had amounted to much less than 10 per cent. As I have said in my opening, I believe the success of this thing is purely a question of the sentiment back of it, and that the business men of this country think that the general sentiment would absolutely control the securing of satisfactory results. Mr. Hill. I understand, in a general way, your idea is this: That the policy of this country is a political question, as to whether it shall be protective or revenue or free trade, and that the administration of it and that the gathering of statistics in regard to it can be made a purely nonpolitical matter ? Mr. Cobb. That is my belief, absolutely ; that that information, pro- duced and made a matter of general knowledge by a tariff commission, will tend to place the tariff question in such a situation that the country can pass on the main fundamental question with confidence that its verdict will be carried out as the mandate of the country. Mr. FoRDNEY. Do you not think the present tariff board could get that information ? Mr. Cobb. I think they are getting it. Mr. FoRDNEY. I do. Then why change it and put a tariff commis- sion in ? Mr. Cobb. Because in perfecting the present Tariff Board into a permanent tariff commission our idea is that we are building to-day a permanent tariff-making system, and it is my belief that it is going to take time to get the system perfected. It can not be done in a day. Take, for instance, in the present heated condition of feeling in the country, it probably will be very difficult for that Tariff Board to do to-day the work which we hope in time it will do. If the system gets to working in proper sliape in five years, it will be as soon as we can possibly expect. For instance, the agitation of the tariff ques- tion is to-day in rather an acute state. Until that acute situation is eliminated the real permanent work of this tarifl' commission can not be fully felt, and the greatest advantages derived from it. That is to say," we are looking not for to-daj^, not for to-morrow, not merely for changes and adjustments of the present bill, but for the creation of a lasting and a permanent system of applying a power which we feel is of the utmost importance and of the most vital importance to the business interests and welfare of the whole country, so that it shall be continuously worked out. Mr. FoRDNEY. Did you follow the testimony that was given before this committee two years ago in their preparation of their tariff bill; and if so, do you not believe that they got quite valuable information ? Mr. Cobb. Very. 26 T.4KIFP COHMISSIOHr. Mr. FoRDNBY. Just as. valuable as it was possiMe to obtain amy- VPfkere? Mr. Cobb. I do not think it was as valuable as it was possible to obtain.. I think that much, more valuable' testifEaony can be acqxiired if it is done under this systemi than under the system which was fol- lowed then. Mr. FoRDNEY. Mr. Cobb, from my reeolljection the men who favored free trade or lower tariff came here and advocated that very thing and the protectionists otherwise. Do you not think that that will continue just as long as tinie lasts ? Mr. Cobb. Do you mean that they advocated a tariff commission ? Mr. FoRDNEY. No; that they advocated the revision of the tariff. The free traders came and wanted lower rates, and the protectionists came and did not want lower ratesi Mr. Cobb. You understand that we do not stand for lower rates, for higher rates, or for any question of rates. Let that be decided by the country. It is merely a question of policy. Mr. FoE©NEY. The country did decide it. Me. Cobb. We assume to-day that the Republican party stands for a fair and reasonable tariff, with no execssive duties and no special privileges. Mr. FoRDNEY. Thart is their platform. Mr. Cobb. If that is the platform, and if the bill passed measures up to that platform, this tariff commission will be a vindication Mr. FoRDNEY. Do you not think the Payne tariff bUl does measure up to that condition ? Mr. Cobb. Not perfectly. Mr. FoRDNEY. In what schedule, in what respect does it not ? Mr. Cobb. I would prefer not to answer that question, because you see, gentlemen, I represent 100 different boards of trade with every degree of feeling on the tariff question and of both political parties. Now, my position is such that it is not proper for me to discuss the question of schedules. I did say this morning that I thought the woolen schedule was made on a different measure of protection, a different economic theory from the leather schedule, but without suggestion as to which was the better or which- was the wiser. I think there are differences of that sort in the Payne bill. Mr. LoNGwoRTH. Why should it make any difference whether a member of this proposed commission favored the Payne law or was opposed to it, so far as concerns his ability to find out facts which njight be of use to future Congresses, either in the revision of all the schedules or of one separate schedule? Mr. Cobb. It should make absolutely no difference. There is no reason why it should. Mr. LoNGWORTH. In other words, the mental bias of any member of the commission does not make any difference as to his final ascer- tainment of the facts. It is not a question of his drawing a conclusion from those facts ? Mr. Cobb. No, sir; none whatever. It is his duty to merely ascertain the facts, Mr. FoRDNEY. It has been stated, antl I am' not sure by whom, that if thi& comroission is created, it was not proposed to have them make recommendations, but to submit information without recom- mendations. Mr. Cobb. Yes, sir. TABIFF COMMISSION. 27 Mr. FoRDNEY. Now, as an illustration, if you put my beloved friend, Hon. Cham© Clark, on that commission, and any Member on this side of the House on that commission, they are men of de- cided opposite views on the tariff question, yet they will both obtain reliable information and submit facts that will not dili'er. But if you ask an opinion, you will get opposite opinions from the two men. Is not that true? Mr. Cobb. Yes, sir. Mr. FoKDNEY. So that if you create a tariff commission and giv© it any more authority or power than the present Tariff Board has to-day (which would fee to recommend), you are bound to have a. partisan board, are you not ? Mr. Cobb. We are opposed to a board which has the power to recommend. Mr. FoEDNEY. Then you do not propose, if a commission' is created, to give them- any further power than the present Tariff Board has now. They have all tne power and authority and the money back of them to obtain all the information obtainable in the country, and submit it to the President without recommendation to Congress; and if you do not empower the commission to make recommendiations, they could absolutely do nothing more than the present board has power to do now. Is not that right ? Mr. Cobb. That is true to-day. What will be the condition to-morrow ? Mr. FoEDNEY. You can only do that by changing your Constitu- tion, and giving them power to make a tariff law. Mj. Cobb. No, sir. I say the statement that the. tariff board has to-day substantially the powers and is doing substantially all the work that we want done by a tariff commission is a true statement. Mr. Hill. They have no powers to compel testimony, have they ? Mr. Cobb. They have no power to compel testimony; and that is a point that I want to speak of in going into the question of the powers of which I have a memorandum of here. But the point is, who knows what the position of our next President will be ?' Mr. FoRDNEY. Nobody does Icnow, and no one can control by legis- lation or otherwise the actions of our future Presidents or the actions of future Congi-esses. This Congress has no power to control th& power of the next Congress — absolutely none. If they did', they would put the Democrats out and put a majority of Repubhcans in. Mr. Cobb. That is not the point. The point is most clearly shown in the difference betw^een the Interstate Commerce Commission and the present tariff board. Mr. FoEDNtEY. If you want to make a court of your tariff com- mission, then you can give them all kinds of power; but if you can not give them all kind's of power they can do no more, in my opinion,, than the present tariff board can do. Mt. Cobb. Our request is that the present Tariff Board be made per- manent, be indepenaent of the Executive, and have its powers some- what broadened. Those are practically the suggestions'. Mr. BouTELL. Have you finished, Mr. Fordney ? Mr. FoRDNEY. Yes. 5Ir. BoTJTELL. YVere you through, Mr. Hill? Mr. Hill. Yes, sir. 28 TARIFF COMMISSION. Mr. BouTELL. Right in that connection, Mr. Cobb, section 3 of the bill we have under consideration vests in the commission quite full power. Beginning on page 3, it reads: ■ That it shall be the duty of said commission to investigate the cost of production of all articles covered by the tariff with special reference to the prices paid for foreign labor, etc. — Continuing on the fourth page, seventh line : Together with all other facts which, in the judgment of said commission, will be helpful to Congress in providing equitable rates of duties on any article. Of course those words in the eighth line, "in the judgment of said commission," have no place in a bill of this sort. There should be no discretion left with the commission as to what they should withhold from Congress, should there, in your opinion ? Mr. Cobb. No, sir. Mr. BouTELL. The powers and Huties in that section 3 are quite full and complete. Reading that in connection with the power vested in them at the bottom of page 6, it seems to me that you are a little mite sanguine about the support which this bill would have, bearing in mind the powers and the duties. At the bottom of page 6, it reads: Said commission in pursuing its investigations, as above provided, shall have the power to subpcEna witnesses, take testimony, administer oaths, and require the pro- duction of books and papers for the purpose of the accurate ascertainment of the facts which it shall be the duty of said commission to investigate and report to Congress, as hereinbefore provided. I have a sort of an idea that some of the men that we were trying to get information out of here two years ago concerning the difference between what it actually cost them to obtain the materials abroad and their final retail price might not be tumbling over themselves in support of these provisions. We had great difficulty, Mr. Cobb, in finding out what I should hope, if we ever have a commission, we could find the connection between the price of certain large lines of staple imports, particularly manufactured goods at St. Gall and Chemnitz, and the retail price asked by the importers of the same article in this country. Do you think they are in favor of those provisions ? Mr. CocBB. , You mean those particular men ? Mr. BouTELL. That the importers at large will favor such drastic provisions. Mr. Cobb. I can simply say that I think the provision which is contained in the Lenroot bill, which I think is also before you, is a provision which would satisfy more generally and be fully as effective as the provision in the Good bill — that is the provision giving power to summon witnesses and making the penalty that the commission in case of failure shall report to Congress the name of the person so failing. That is to say, setting them up before the country as having refused to give information. That provision, I think, would be ■entirely adequate and would meet the objection of a great many men who would oppose it in the form of the Good bill. Mr. BouTELL. You understand, so far as I am concerned personally, that we can not make those provisions any too sweeping or the penal- ties any too strong, but I was wondering whether, when you made the statement, that all the. people you represented were in" favor of this TAEIFF COMMISSION. 29 legislation you had in mind the actual provisions of the bill that was before us. Mr. Cobb. As to that, I look toward the whole question as a ques- tion of public sentiment. I have found that in our Boston Chamber of Commerce and other chambers of commerce men do not stand up against the sentiment of their associates. On the average we average to be pretty right-minded, and when sentiment is in favor of a certain thing it always has an effect. The greatest trouble is the system on which our tariff legislation has been conducted. It is not the trouble with the men. If they see that the sentiment of the country is in favor of it, that tariff revisions are to be based on investigations made by a tariff commission, there will be no trouble. Mr. FoRDNBY. Let me ask you one question. Mr. Cobb. Certainly. Mr. FoRDNEY. In the Good bill, page 4, section 4, this language is used: That said commission shall tabulate the results of its investigations and submit the same to Congress, together with any explanatory report of the facts so ascertained, at such time or times as Congress, or either branch thereof, shall designate. Is not that an invitation to the tariff commission, if such an one were created, to constantly recommend changes and keep the business interests of the country in a turmoil each and every day in the year for all time to come ? Mr. Cobb. In answer to that Mr. FoRDNEY. Pardon me. Let me conclude. Which would be, in strong terms, constant damnation to the business interests of the country — tariff agitation. Mr. Cobb. In answer to that I would like to read section 6 of Mr. Lenroot's bill, which was changed this morning as we were sitting here — Mr. Good, Mr. Lenroot, and myself — and which, I think, would cover that point and would be satisfactory to all around: That said commission shall make annual reports to Congress of its investigations and such special reports as may be called for by the President or either House of Congress. Said reports shall be printed as public documents. The annual report shall be published and ready for distribution Mr. Gaines. Wliat are you reading from? Mr. Cobb. Page 8 of the Lenroot bill. Mr. Gaines. Is it a proposed amendment ? Mr. Cobb. It is a changed form that was discussed this morning. Mr. Gaines. I beg your pardon; I did not mean to interrupt you. Mr. Cobb (reading) : The annual report shall be published and ready for distribution on the first Monday of December of each year. Upon demand of the President or of either House of Congress, the commission shall make a report of all testimony and information upon which its reports are based. I do not speak for Mr. Lenroot, but as I understood in the discus- sion he intends to make that change. Mr. LoNGWORTH. Then it would follow that that part of Mr, Lenroot's bill would be stricken out which provides for the annual report to Congress under given circumstances, would it not ? Mr. Cobb. It would be 1 Mr. LoNGWORTH. Yes. Mr. Cobb. That is a question that there is not a definite agreement on. There are many people who beheve the commission should go 3§ TAEIFF COMMISSION. On Ffepprting — )ihat is to say, there might 'be a number of years when there would be no report called for. Still, the commission, many people believe, should -be doing its work and presenting sudh tabula- tions of facts as it prodiiced— that is, to report the information and n at home and abroad. I want all the light I can get. Democratic newspapers stated some three or four months ago that we wanted light that in any way might prove the justice of the present tariff law, and that we tried to justify it by sajnng that it was for the pur- pose of changing the present tariff law. I am inclined to agree witla my friend Mr. Harrison that his party does not want information. Mr. Harrison. We do not want information of that kind. The ('hairman. And I think a tariff for revenue only bill can be very easily framed without information. You can put a duty on sugar; you can put a duty on tea; you can put a duty on coffee, because we must have them, and they do not come into competition ; but it does not make any particular difference excepting as it may add to the cost of high living in this country, or something of that kind. But I agree that our party can not frame a revenue law without any information of the subject; and it is now desired to go a little further than that and get it down below the protection line, so that the importation will come from abroad, of the articles our people may use. We will get a higher revenue, perliaps, if you do not get it too low; and all the information you seek on that subject is presented in the book on imports and duties, which has already been compiled by this committee, and which, of course, is open to you. So that I agree with you; you don't need information. Mr. Leneoot. I think that that is entirely correct, as to what they can do, but in the light of the Wilson bill, it is hardly fair to assume that they would. [Laughter.] ' 48 TARIFF COMMISSION. Mr. Dalzell. I would like to ask another question along the line of what I asked before, as to the way in which the information gotten by this tariff board can be made what we might call morally effective. In other words, to get Congress to act. Suppose the tariff board should report, as of course it would, that there was no difiference in the cost of production in the great majority of agri- cultural products — I spoke of barley because that is the most con- spicuous one — without making recommendations, but simply report- ing that we could raise farm products here cheaper than anywhere else in the world. Have you any idea that Congress would put agricultural products on the free list ? Mr. Lenroot. I do not know that it would. I do not think that is an important proposition here. You would have the information then, and you ought to have the information. Mr. Hill. And we ought to have the courage to act on it. Mr. Lenkoot. Yes. Mr. Dalzell. That is the point — whether we are going to have the courage to act on it. Mr. Lenroot. As to whether or not we do act on it, it seems to me, is not the point at this time. We ought to have the information. Mr. Dalzell. A great many of the arguments made in favor of the tariff which came in a vague and academic way from Members was based upon the theory that as soon as we got a tariff board it would be what you state it would not be, a cure-all. My mind works In such a way that I do not see just how that is going to be done. Human nature will be left just as it is, just as selfish, just as grasping, with or without a tariff board, and there will be just as much politics in Congress; whereas I tried as hard as I could, and would try again, to see that inequalities in the agricultural schedule were wiped out. I feel that it would be absolutely futile and that poor old barley would still stand at 30 cents even if the commission should report that there was not 5 cents difference in the cost of production. Mr. Lenroot. It may be; but even then you would not claim that your Committee on Ways and Means, when the tariff bill is next revised, should not make an effort to ascertain the difference in the cost of production at home and abroad. That is all the tariff com- mission will do. It will not take the place of this committee in any way. It will be an aid to the committee. And more than that, it will be an aid to every Member of Congress with reference to the discussion and voting upon each of these items. And this information will be in such form that it will be readily available to Members of Congress. While the reports of your Committee on Ways and Means were there at our disposal, yet I venture to say that there was a very large percentage of Members who did not undertake to go through all that testimony. Mr. FoRDNEY. The question whether that tariff commission if created, would displace this committee or any other committee', is not one of importance to a fair-minded man; but what seems to me to be of the greatest importance is that when we create a board or a commission of that kind and permit them to constantly agitate the question of the tariff, we are never going to have these conditions settled, as we have not had for the past four years. Notwithstanding the fact that I believe we have one of the best tariff bills that ever was enacted into law, we have had so much agitation before and after the TABIF¥ COMMISSION. 49 enactment of this law, that business conditions in the country are in a chaotic condition in some parts of the countrj right now. There is no question about that. Agitation has done it all, and nothing else. It is not the rates of duty. The agitation has done that. _Mr. Lenkoot. On the contrary, I have the view that a tariff com- mission will safeguard business interests rather than disturb them; for if you have a tariff commission, so long as the Republican Party is in power and we have the protective system we know that that tariff conamission will ascertain the facts, and that no Republican majority in Congress is going below, in applying tariff rates, the facts ascertained by that commission. It is a security for business inter- ests. On the other hand, if the Democratic Party is in power, and you have the theory of tariff for revenue only, that tariff commission is just as necessary for that party, and those facts are just as neces- sary for you, if you are going to intelligently apply them to the tariff for revenue only; Mr. LoNGWORTH. It seems to me Mr. Fordney's criticism would be justified if the commission was to have any powers of recommen- dation. Mr. Lenroot. Yes; I might agree with him then. Mr. LoNGWORTH. But so long as it does not have those powers I do not see how it can interfere with business. Mr. FoRDNEY. I will say this as an illustration of my opinion. I may be wrong. Right now we have a Tariff Board. Right now we have the magazines and newspapers of the country full of riffraff about the woolen schedule. The magazines and the press have been full of riffraff and misstatements of facts; and because of the Presi- dent's speech at Winona, Minn., last fall in which he said that he was not fully satisfied with the woolen schedule, the woolgrower and the wool manufacturer are in holy terror right now that that board is going to recommend (and that the President will send in that recommendation) the revision of the woolen schedule, which will paralyze the industry. That industry is partially paralyzed to-day on account of it. Mr. LoNGWORTH. The board can not recommend. Mr. FoEDNEY. Certainly it will to the President and the President will recommend it. Mr. LoNGWORTH. The board has no power to recommend. Mr. FoRDNET. 'Wliat it will recommend to the President perhaps you and I will never know. Mr. Lenroot. Of course, there is a wide difference of opinion as to the justice of the present wool schedule. Mr. Hill. As to the effect or extent of the tariff commission, you are aware of the fact that there has been a tariff commission in France for years ? Mr. Lenroot. Yes. Mr. Hill. Have you heard of any destruction of business because of the advisory character of that commission ? Mr. Lenroot. No, sir; and the same in Germany. Mr. Hill. I do not think anybody else has. They are revising the tariff all the time there by single items. The Chairman. I do not agree with Mr. Lenroot or with the other gentleman that a tariff commission is going to get rid of this agitation. I do not know whether it will have any tendency in that direction 70470—10 4 50 TARIFF COMMISSION. "(vhatever; but I believe if we can adopt between the two Houses a rule by which whenever there is an amendment to the tariff it shall be eonj&ned to a single schedule or paragraph that that will stop the gen- eral agitation. Mr. Lenroot. I think so. The Chairman. I think that is a desirable thing to maintain. This other business I am not enthusiastic for. I am perfectly willing to have it and to throw all the light on that subject that I can; but the other matter I would like to see brought about. I have had hope ever since the last meeting of the conference committee on the tariff that that thing would be done and that a rule would be adopted. I have been personally in favor of it for a good many years. It is not any new question. It was agitated in 1872. There was a very elaborate report against it at that time in the Senate, but I have always iseheved, as I said this morning, that only germane amendments in the Senate were intended by the framers of the Constitution of the United States. That is what saves panics in France. They do not go into a general revision of the tariff. They take up a few items at a time and decide upon them, and that does not interfere with industries generally. If we can adopt that in the United States, if we can have a practice between the two Houses governed by rules, that will stop this eternal smashing of things when we have a tariff agitation and the general revision of it. Mr. Lenroot. The only agitation, then, I think, will be on the question, so far eui the country is concerned, whether we are to have protective tariff or tariff for revenue only. Mr. Underwood. I do not think the United States Senate could be expected to yield its powers to amend our bill as they have done; but I want to ask you this : If we adopt a rule in the House — in the House alone — that limits amendmends to the schedule reported by this com- mittee, so that noother amendments could beeffected, do you not think it would have the effect, if the House had the nerve to stand up for its own bill, of accomplishing the desired result, even if we do not get a joint rule with the Senate? Mr. Lenroot. If we could not get a joint rule, I would like to see the House alone adopt it; but I would like to see a joint rule. Mr. Underwood. I do not suppose you expect that, do you ? Mr. Lenroot. Well, I understand that a very eminent gentleman at the other end of the Capitol said in a speech this afternoon that he was in favor of that very proposition. Mr. Underwood. Your bill, as I understand it, does not create a commission in the sense of an advisory board ? Mr. Lenroot. Not at all. Mr. Underwood. But merely a board of experts to obtain infor- mation ? Mr. Lenroot. Yes, sir. Mr. Underwood. I do not think the Ways and Means Committee of the House can get too much information, if it is honest informa- tion, on these questions. Mr. Calderhead. I suppose the real work of the commission will be to ascertain whether the profits of the manufacturers are excessive or not. Mr. Lenroot. No; they will form no conclusion as to that. They will get the cost of production. TARIFF COMMISSION. 51 Mr. Underwood. The other question that I wantfed to ask you was this : Your bill makes this board report directly to the House of Rep- resentatives ? Mr. Lenroot. As originally introduced, yes. I do think that the President should have the same right — it is not found in the bill at present — to call upon this board for information. I do think Con- gress should have the prior right of controlling this commission, with reference to the reports and the investigation of schedules, over the Executive. It is the business of Congress to deal with this question primarily. Mr. Underwood. Does your bill provide for the appointment of this commission by the President ? Mr. Lenroot. Yes; and I discussed that scjmewhat, Mr. Under- wood, while you were absent. I feel very strongly that we can not possibly expect 391 Members of the House, or, if there is joint action, of the House and Senate, in selecting the men for this tariff board to give us men of the same qualifications (or make the qualifications the sole consideration) that we would expect at the hands of the President. The Chairman. Are there any further questions i Is there any- thing further you wish to say, Mr. Lenroot ? Mr. Lenroot. I want to say one word with reference to the matter of the annual report that has been discussed somewhat. I do feel very strongly that whatever bill may be reported by the committee it should provide for an annual report. I think very much of the benefit of a tariff commission will be in publicity and in the confidence of the country in the unbiased information that is obtained; and I think there would be a tendency, from public sentiment working upon Con- gress, so far as those facts can not be shown to be false, to bring about the enactment of legislation in accordance witli the facts found or based upon the facts found. So that I believe these reports ought to be made annually, and that they should be public documents. My bill does not provide for reporting the testimony, but it protects the manufacturers, I think, completely, with reference to the disclosure of information that may injure their business. There is one section I want to speak of. Mr. Cobb spoke of it in this bill. It is made the duty of the commission to make investiga- tions concerning the control of prices by a monopoly of any article that is the subject of a tariff rate. I would not insist upon this, but I do think where Congress has information of a given article that is the subject of a tariff rate, being controlled by a monopoly, a more rigid rule should be applied with reference to the tariff rate upon that article than where there is full and free competition. I think that this great agitation that has come up during the last ten years has been because the prices in many lines of industry have been -con- trolled — or at least the people think they are being controlled — by monopoly. Mr. Fordney. They think so ? Mr. Lenroot. Put it either way. Of course, where we do have full and free competition, it makes little or no difference whether our rates are higher than necessary to afford proper protection, because the competition will keep those prices down to a reasonable level; but in the absence of competition it does become a very vital question as to what the tariff rate should be, because the tariff rate 52 TAEIBT COMMISSION. then is the only thing that can keep the prices down to a reasonable level. Mr. LoNGWORTH. Let me ask you one question on that point. When you speak of an article that is subject to a duty, does that niean an article which now bears duty or which by any possibility might do so? Mr. Lenroot. Might, by any possibility. It is broad enough to cover any article that is subject to a duty. Mr. Hill. I would suggest that you three gentlemen who have ap- peared should consult together and agree on some measure. Harmon- ize your views, and get up a biU that you all three will agree on. Mr. Lenroot. I think we could easily do that. I should certainly be glad to do that. STATEMENT OF MR. EICHARD CAMPION, OF PHILADELPHIA, PA. Mr. Campion. Mr. Chairman and gentlemen, I will not detain you five minutes. I want to say that I am engaged in the woolen manu- facture, and have been for many years. I am associated now with it, although I am not running the machinery. In behalf of the men with whom I am associated I want to say that the consensus of opinion is that no further tariff commission legislation is desirable. Many of us — I for one^ — -have been opposed to any sort of a tariff com- mission or board, because I have believed that the constitutional provision that the House of Representatives should formulate tariff measures was a proper one, and that you have investigated' and do investigate as thoroughly as any body of men can investigate. But the one point I want to make is that we beheve yovi have now a perfectly competent board of investigation empowered to ascertaia the cost of production at home and abroad as nearly as it is possible for any men to ascertain it, and that to enlarge that board or to appoint a new board under the title of a tariff commission is entirely imadvisable at this time, and would tend to further cause agitation and disturbance, and that, above aU other things, the industries of this country need a period of rest and quiet. From the standpoint of the RepubHcan Party, which you gentlemen in the majority represent, it is due from you to the great business industries of this country that you yourselves take no further step until this board which you have arranged for shall have had a fair trial. Mr. FoRDNET. And an opportunity to report. Mr. Campion. Yes, sir. Mr. Hill. You say you speak on behalf of the men with whom you are associated. ^Vho are they? Mr. Campion. Manufacturers of Philadelphia, and to some extent manufacturers throughout the country. But I am speaking only for some of the larger manufacturers in the city of Philadelphia. Mr. Hill. You do not speak for anybody outside of Philadelphia ? Mr. Campion. No, sir. Mr. Hill. Do you speak for the carded-wool interests in Phila- delphia ? Mr. Campion. No; I would not say that. Mr. Hill. Have you any authority to speak for anyone but yourself ? TARIFF COMMISSION. 53 Mr. Campion. Probably yes, and probably no; but I will limit, it, Mr. Hill, to myself. Mr. Hill. I was wondering whether you had any authority to speak for the carded woolen men in Philadelphia. Mr. Campion. No, sir; I do not speak for them — if you separate the carded woolen men from the worsted manufacturers in any way. I came down here because I was told there was to be a hearing to-day on this subject, which I was glad to attend for the purpose of listening and learning; and I had no thought of saying anything. Mr. FoRDNEY. But you are prepared to speak from a knowledge of the business gained by long experience, are you not ? Mr. Campion. Yes, sir. Mr. Hill. Of course you have a perfect right to appear and speak for yourself; only if you had authority to speak for anybody else I wanted to know who it was. Are you engaged in the woolen business now? Mr. Campion. No, sir. I am connected with it. I am selling agent for two worsted-yarn mills. I have been engaged in the worsted industry for about 40 years. Mr. PIiLL. I have not any question about that; only I was wondering who it was you were authorized to speak for. You said you were speaking for yourself and the men associated with you. Mr. Campion. Yes. That would comprehend several. Mr. Gaines. Since you are here, Mr. Campion, I will ask you a question. What is the average profit per yard on worsted cloth? Mr. Campion. To answer that question, I would say that I can get one, two, three, or more of the best mills in my neighborhood who will contract for five or ten years for their total output at 5 cents a yard. Mr. Gaines. So that the profit, then, seems to be about the same in the worsted as in the woolen business per yard ? Mr. Campion. Yes, sir. Mr. Gaines. That is all. Mr. FoRDNEY. About how much wool in weight is there in the average yard of cloth ? Mr. Campion. That is according as the customer may require. Mr. FoRDNEY. The average, I say, of all the goods produced in those mills over there. Mr. Campion. For summer suitings, 1 1 ounces ; and for winter suit- ings — I do not like to give figures in the presence of Mr. HUl for fear he will check me up — for ordinary suitings for winter, from 15 to 18 ounces. Mr. FoRDNEY. In the neighborhood of a pound. Mr. Campion. In the neighborhood of a pound. Mr. Fordney. Then your profit on a pound of wool taken from the sheep's back and put through all of the processes of manufacture would be 5 cents ? Mr. Campion. Yes, sir. Mr. Fordney. That is the point I wanted to bring out. Mr. Campion. And as confirmation of the correctness of that, take the figures of the octopus, Mr. HiU, the so-caUed trust, the American Woolen Company. You can easily get that. Take their total output and their profit, and divide their output by their profit, and you will see how much they have made. 54 TABIFP COMMISSION. Mr. FoRDNEY. The consumption of wool in the United States last year was about how much ? Five hundred mUUon pounds ? Mr. Campion. No ; I do not think it would come anywhere near that. The woolen industry in the last 12 months has not been running at the rate of 50 per cent, surely. Mr. FoRDNEY. When the conditions are normal how much wool is consumed in this country? , Mr. Campion. The normal consumption in all branches of the industry is about 600,000,000 pounds. Mr. t ORDNEY. The total value of the woolen industry, practically, is about $500,000,000 then, is it not ? Mr. Campion. No, sir. Mr. FoRDNEY. Of the woolen industry of the United States, or $1 per pound ? Mr. Campion. No; $400,000,000. Mr. FoRDNEY. Then j^our profit of 5 cents per yard is about 5 per cent of its total selling value, is it ? Mr. Campion. Yes; I think so. But you can not get a profit. If your cloth is worth $3 you will not be apt to get 15 cents a yard Erofit, as Mr. Hill knows very well. These gentlemen do not seem to e harmonized on what they want. While they have eliminated the power to recommend from their various bills they speak of "findings," "their findings," and "report their findings," and "with power to act." Is it not in their mmds that they want a tariff commission, as they have expressed it, with power like unto that of the Interstate Commerce Commission, with power to recommend, even if not to change rates from day to day ? ^Vould not that bring about this dis- turbance that you and Mr. Fordney and I so much deprecate ? Mr. LoNGWORTH. It would if it was in the biU, but I do not see it in the bill. Mr. Fordney. I think it is in the bill in every line. [Laughter.] The Chairman. This concludes the hearings, so far as I know. If anything comes up hereafter the committee .will be called together on the subject. There will be a hearing to-morrow morning on the sub- ject of the internal-revenue tax on opium and the manufactures thereof, at 10 o'clock. Without objection, the committee will stand adjourned until 10 o'clock to-morrow morning. (The committee thereupon adjourned.) [H. E. 26232, 61st Cong., 2d sess.] A BILL To create atarlff commission. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That to secure, compile, and furnish Congress accurate and reliable information that may be available in future changes of the customs and tariff laws, and to aid the President of the United States and other officers of the Govern- ment in the administration of all such laws, there is hereby created a commission to be known as the "Tariff Commission." Sec. 2. That said commission shall consist of five commissioners appointed by the President of the United States, by^ and with the consent of the Senate. The com- missioners first appointed under this act shall continue in office for the terms of two three, four, five, and six years, respectively, from and after the first day of January' anno Domini nineteen hundred and eleven, the term of each to be designated by the President; but theii' successors shall be appointed for terms of six years, except that any person chosen to fill a vacancy shall be appointed only for the unexpired term TARIFF COMMISSION. 55 of the commissioner whom he shall succeed. The commissioner first named shall be ine cnairman of the commiasion, and upon the expiration of the term of office of the commissioner holding the position of chairman, or upon the death, resignation, or h 11 "!? • commissioner holding such office, the President of the United States snail aesignate a member of said commission to be the chairman thereof. The mem- Ders 01 said commission shall be appointed solely with a view to their qualifications specihed in this act and without regard to political affiliations. So far as possible the composition of said commission shall be as follows: Two members having special Knowledge of the producing interests of the United States; one member a lawver who nas made a special study of the customs and tariff laws of the United States, and who nas nad special experience in connection with the administration thereof; one mem- ber who 18 familiar with the industrial and commercial conditions, and the customs and tariff laws of such foreign countries, the products of which enter largely into com- petition with the products of the United States; one member an economist and etatia- tician who has given special attention to the subject of the prices and the cost of pro- duction both in this country and in foreign countries, on articles affected by the cus- toms and tariff laws. No person who is a Member of Congress, and no person who is in any manner pecuniarily interested in the production or importation of any article or articles enumerated in the customs and tariff law shall be eligible to hold such office. Said commissioners shall not engage in any other business, vocation, or employment. Any commissioner may be removed by the President of the United States for inef- ficiency, neglect of duty, or malfeasance in oflice. Each commissioner shall receive an annual salary of seven thousand five hundred dollars. The commission shall appoint a secretary, who shall receive an annual salary of three thousand dollars, and the commission shall have the power to fix the compensation of such other employees as it may find necessary for the proper performance f its duties. Sec. 3. That it shall be the duty of said commission to investigate the cost of pro- duction of all articles covered by the tariff with special reference to the prices paid foreign labor, and the prices paid for raw materials, whether domestic or imported, entering into manufactured articles, the condition of domestic and foreign markets effecting American products, including detailed information of the cost, and of every element thereof, of producing at the place of production and at the place of consump- tion of all articles specified in the tariff law, both in this country and the country from which such articles are imported, so that the cost of all such articles produced abroad may be compared with the cost of like articles produced in this country, together with all other facts which, in the judgment of said commission, will be helpful to Congress in providing equitable rate of duties on any article; and in general to thor- oughly investigate all the various questions relating to the agricultural, manufactur- ing, commercial, and mining interests of the United States so far as the same may be necessary or helpful to Congress in the enactment of customs tariff laws, and in aiding the President and other officers of the Government in the administration of such laws. Sec. 4. That said commission shall tabulate the results of its investigations and submit the same to Congress, together with any explanatory report of the facts so as- certained, at such time or times as Congress, or either branch thereof, shall desig- nate; and said tabulation of said facts and the report in explanation thereof shall be laid before Congress at the earliest possible moment for its use, information, and fuidance; and at the request of the Ways and Means Committee of the House and the 'inance Committee of the Senate said commission shall sit with the above-named committees of the House and of the Senate during the sessions of said committees when said committees are drafting or considering any bill affecting the customs and tariff laws of the United States. Sec. 5. That to enable the President to secure information as to the effect of tariff rates or other .restrictions, exactions, or any regulations imposed at any time by any foreign country on the importation into, or sale in, any such foreign country of any agricultural, manufactured, or other product of the United States and to assist the President and other offlters of the Government in the administration of the customs laws, as required by law, the said commission shall furnish the President a,ny tabula- tions or reports or other information in the possession of the said commission, and shall from time to time advise the President as to the state of the commerce of the United States with foreign countries to the end that the President shall take such steps in the application of the maximum and minimum tariffs and other adminis- tration provisions of the tariff laws as in his opinion will best protect the interests of the United States. Sec. 6. That it shall be the duty of the said commission to study and mvestigate all rulings and classifications of the Treasury Department by which new articles not specifically provided for in the customs tariff law, are not included in the operation 56 TAKIFF COMMISSION. of aaid law; and also make a study of the claBsifications used in the administration of customs tariff laws of the leading commercial nations of the world, and to submit to Congress the result of said investigations, together with a draft for a scheme for the scientific classification of tariff schedules. Sec. 7. That the said commission shall have the power to sit and hold hearings m any part of the country, and it shall be the duty of the said commission, through one or more members thereof, to personally visit the various producing sections of the country and personally investigate the conditions of each section with reference to the tariff; it shall also have the power to visit, through one or more of its members or employees, such foreign countries as may be found necessary in the prosecution of its work; it shall have the power to call upon any of the existing Government depart- ments or bureaus for information on file in such departments or bureaus which it may require in connection with the work it is authorized to do by this act. Said commis- sion in pursuing its investigations, as above provided, shall have the power to sub- poena witnesses, to take testimony, administer oaths, and require the production of books and papers for the purpose of the accurate ascertainment of the facts which it shall be the duty of said commission to investigate and report to Congress, as herein- before provided. Sec 8. That the principal office of the said commission shall be in the city of Wash- ington, and said commission may hire suitable offices for its use and procure all neces- sary office supplies. Should said commission require the attendance of any witness, either in Washington or any place not the home of said witness, said witness shall be paid the same fees and mileage that are paid witnesses by the courts of the United States. Sec. 9. That said commission shall promulgate rules and regulations for the safe keeping of all papers, correspondence, tabulations, reports, explanations, and other information gathered by it, and, except on the order of the President of the United States, or of Congress, or of either branch thereof, no information of any kind obtained by said commission shall be made public. Sec 10. That all of the expenses of the commission, including all necessary expenses for transportation incurred by the commissioners, or by their employees under their orders, in making any investigations, or upon official business in any other places than in Washington, shall be paid on the presentation of itemized vouchers approved by the chairman of the commission. The sum of two hundred and fifty thousand dollars is hereby appropriated for the salaries and expense of the commission authorized by this act. [H. R. 28433, 61st Cong., 3d sess.] A BILL To create a Tariff Commission and defining its powers and duties. Be it enacted by the Senate and House of Representatives of the United States oj America in Congress assembled, That a commission is hereby created and shall be known as the Tariff Commission, which shall be composed of five commissioners, who shall be appointed by the President, by and with the advice and consent of the Senate. Tne commissioners first appointed under this act shall continue in office from the date of qualification and for the terms of two, four, six, eight, and ten years respectively, from the first day of July, anno Domini nineteen hundred and eleven, the term of each to be designated by the President; but their successors shall be appointed for terms of ten years, except that any person chosen to fill a vacancy shall be appointed only for the unexpired term of the commissioner whom he shall succeed. Any commissioner may, after due hearing, be removed by the President for inefficiency, neglect of duty, or malfeasance in office. No person shall be eligible to appointment as a commissioner under this act who is a Senator or Representative of the United States or is a Senator or Representative elect of the United States at the time of his appointment. Not more than three of said commis- sioners shall be members of the same political party. Said commissioners shall not engage in any other business, vocation, or employment. One of said commissioners shall have a practical knowledge of the manufacturing industry; one of said commis- sioners shall be a representative of labor; one of said commissioners shall be a lawyer who has made a special study of the tariff laws and customs practice in the United States; one of said commissioners shall have expert knowledge of costs of production and accounting; one of said commissioners shall be an economist who has made a special study of wages and cost of living. No vacancy in the commission shall impair the right of the remaining commissioners to exercise all the powers of the commission Each commissioner shall receive a salary of ten thousand dollars per year The President shall designate a member of the commission to be the chairman thereof during the term for which he is appointed. The commission shall appoint a secretarv and such other employees as it may find necessary to the proper performance of ite duties and fix the salary or compensation of each. " TARIFF COMMISSION. 57 tn^"^*^' "■ '^^?:^ *® principal office of the commission shall be in the city of Washing- whA ?,^"^'?'^le offices which shall be furnished by the Secretary of the Treasury, wno, likewise, shall furnish the commission with all necessary supplies. The com- mission. However, shall have full authority, as a body, by one or more of its members pithp • tK tt''™^''"^''®®' '° conduct investigations at any other place or places, e mer m the United States or foreign countries, as the commission may determine, oaia commission shall promulgate rules and regulations for the safe-keeping of all papers, correspondence, tabulations, reports, explanations, and other information garnered by it. All of the expenses of the commission, including all necessary expenses lor transportation incurred by the commissioners, or by employees under their orders, in making any investigation in any other place than in the city of Washington, shall De allowed and paid on the presentation of itemized vouchers therefor approved by the chairman of the commission. Sec. 3. That the commission hereby created shall have authority, and it is hereby directed, to ascertain the difference in the cost of producing articles of the same, or substantially the same, quality and kind in this country and in competing foreign countries. J.he commission in such investigation shall ascertain, in so far as practi- cable m connection with the several articles covered by its reports in the United btates and m competing foreign countries, the wages, hours of service, and the effi- ciency of labor employed, and the standards of living of such laborers. The commis- sion shall hkewise ascertain the cost of raw material, the cost of labor, the fixed charges, depreciation upon the true value of the capital invested, and all other items necessary to determine the true cost of the finished product. Said commission shall ascertain the market conditions and the prices at which protected products of the United States are sold in foreign countries as compared with the prices of products t^old in the United States. The commission shall investigate the effect of transportation rates upon the markets and prices of dutiable products, the relation between Go\ ernment revenues and tariff schedules, and shall, pursuant to the purposes of this act, in so far as practicable, make an investigation of all questions and conditions relating to the agricultural, manufacturing, mining, commercial, and labor interests with reference to^ the tariff schedules and classifications of the United States and of foreign coun- tries. The commission shall have the power to call upon any of the existing depart- ments or bureaus of the Government for information on file in such departments or bureaus which it may require in connection with the work it is authorized to do by this act, and it shall be the duty of every such department or bureau of the Gov- ernment to furnish such information on request from the commission. It shall be the duty of said commission to hold from time to time hearings at such places as it may designate to determine industrial, commercial, and labor conditions in rela- tion to the tariff. Such hearings shall be public, except as otherwise provided herein. The. commission shall, whenever practicable, give at least ten days' public notice of any and all such hearings, and at any such hearing any person may appear before said commission and be heard, or may be represented by attorney, and may file any written statement or documentary evidence bearing upon any matter it may have under investigation: Provided, That said commission in any investigation may, upon the request of any witness examined, take such evidence at a secret session: Provided further, That the testimony of any witness in regard to any secret process used in the production of any article shall not be reduced to writing, but that all other testimony shall be reduced to writing for the guidance of the said commission in arriving at conclusions and making reports to Congress. A majority of the com- mission shall constitute a quorum for the transaction of business. Said commission may from time to time make or amend such general rules or orders as may be requisite for the orderly regulation of proceedings before it, including form of notices and the service thereof. Every vote and official act of the commission shall be entered of record. Any of the members of the commission or its secretary may administer oaths and affirmations and sign notices. Sec. 4. That for the purposes of this act, in the case of articles on the dutiable list and such other articles as the commission may decide to investigate, the said com- mission is authorized to require of any person, firm, copartnership, corporation, or asso- ciation producing any such article or articles the production of all books, papers, contracts, agreements, invoices, inventories, bills, and documents of any such person, firm, copartnership, corporation, or association, and make every inquiry necessary to a determination of the value of such property. Said commission is authorized to require by notice the attendance and testimony of witneseesand the production of all books, papers, contracts, agreements, inventories, invoices, bills, and documents relating to any matter pertaining to such investigation. Such attendance of witnesses and the production of such documentary evidence may be required from any place in the United States at any designated place of hearing, and witnesses shall receive 58 TARIFF COMMISSION. the same fees as are paid in the Federal courts. In case of failure to comply with such a notice, or in case any person, firm, copartnership, corporation, or association shall fail to comply with any of the requirements of this act the said commission shall make a report to Congress of such failure, specifying the names of each person, the individual names of such firm or copartnership, and the names of the officers and directors of each such corporation or association guilty of such failure, and such report shall specify each particular in which such person, firm, copartnership, corporation, or association has failed to comply with such requirements, and shall also specify the article or articles on the dutiable list produced by such person, firm, copartnership, corporation, or association and the tariff schedule which applies to each such article. The information as to costs of production secured under the provisions of this section from any person, firm, copartnership, corporation, or association shall not be disclosed to any business competitor or rival of such person, firm, copartnership, corporation, or association. Sec. 5. That the commission shall ascertain whether any persons, firms, copartner- ships, corporations, or associations engaged in the production or sale of any dutiable article cooperate by agreement or arrangement of any kind to control production, prices, or wages in the United States, or to control prices in any foreign market. The commission shall also ascertain whether any person, firm, copartnership, corporation, or association owns or controls such a proportion of any dutiable product as to enable such person, firm, copartnership, corporation, or association to control production, prices, or wages in the United States or to control the price of such product in any foreign market. In making such investigations the commission shall give notice thereof in writing to such person, firm, copartnership, corporation, or association and afford an opportunity for the parties to present testimony and to be heard in person or by counsel. Sec. 6. That said commission shall make annual reports to Congress of its investi- gations and recommendations and such special reports as it may deem advisable. Said reports shall be printed as public documents. The annual report shall be pub- lished and ready for distribution on the first Monday of December of each year. Upon demand of either House of Congress, the commission shall make a report of all testi- mony and information upon which its reports are based. Sec. 7. That there is hereby appropriated for the fiscal year ending June thirtieth, nineteen hundred and twelve, for the purposes of this act, from any moneys in the Treasury not otherwise appropriated, three hundred thousand dollars: Provided, That so much thereof as may be necessary shall become immediately available upon quali- fication by members of the commission. Sec. 8. That all acts or parts of acts in conflict with the provisions of this act are hereby repealed. o Cornell University Library HJ 9.A5U58 1910 Tariff Commission.Hearings before the Co 3 1924 007 832 268 "hw^ym^