was continued in 1909 for most iron and steel products-for iron ore, pig iron, crude steel, steel rails. In the bill as reported by the House committee and as passed by the House, the duty on structural steel had been lowered like the rest. In 1897 it had been 5/10c. per pound; the House bill proposed 3/10c. per pound. In the bill as reported by the Senate committee the proposed duty was 4/10c. per pound. But there was also a change of phraseology. That change is indicated by the qualifying clause italicised below, which was inserted by the Senate com mittee. "Beams, girders, joists, angles, channels, car-truck channels, T T columns and posts or parts of sections of columns and posts, deck and bulb beams, and building forms, together with all other structural shapes of iron or steel, not assembled, or manufactured, or advanced beyond hammering, rolling, or casting.” In the act as passed the duty was finally split, being fixed at 3/10c. per pound on structural steel valued up to 9/10c., and 4/10c. per pound valued at over 9/10c. The important change, however, was not in the figures, but in the insertion of the italicised clause. The effect of the italicised clause does not appear upon the surface. No special provision is made anywhere in the act for structural steel that is "assembled or manufactured or advanced". When the change first came to my attention, I hunted through the measure to find what was to be the duty on fabricated structural steel. (Fabricated is the trade name for structural steel that is assembled or manufactured or advanced.) Finally I came to the conclusion that it would have to come under the drag-net clause "manufactures of iron and steel not otherwise provided for". An inquiry addressed to Treasury officials immediately after the passage of the act brought a somewhat hesitating response, to the effect that it was supposed the fabricated steel would be dutiable under that clause, at 45 per cent ad valorem. This has been the outcome unquestionably had in view when the qualifying clause was inserted. It appears that the duty has not been lowered, but raised. The general policy followed in the act with regard to iron and steel manufactures has in this case been reversed, During the hearings before the House committee no one advocated an increase in the duty on structural steel. manufacturers in their general arguments before the committee The steel expressed themselves, though not with great insistence, against reductions of duty; but they proposed no advance. Only one statement, to be noted presently, was made with specific reference to structural steel, and that was in favor of a reduction. There is not the slightest indication of what happened in the Senate committee, or what reasons were advanced in favor of the substantial increase in duty which was there provided for.1 Having satisfied myself by the inquiry sent to the Treasury officials that the duty had in fact gone up, I endeavored to ascertain what the change meant. But letters addressed to various persons in the trade brought vague and sometimes contradictory answers.2 One gentleman engaged in the manufacture of structural steel informed me that the importation of fabricated shapes was unlikely under any circumstances, except possibly from Canada. The European makers, he said, were not used to our engineering designs, and would not be likely to undertake orders for the United States. But another gentleman, also engaged in the manufacture, informed me that in times past there had been a considerable importation of fabricated steel, and that fabricated shapes alone were likely to be imported. The customs statistics show that in some previous years there have been considerable importations; and, if the second statement is accurate, the shapes imported were in the fabricated class. Still another informant, a building contractor, informed me that fabricated shapes could be made anywhere to design and could be carried to any desired spot, whether New York, Texas, South Africa, or India; they could be put together without difficulty by the engineers on the spot. Still another gentleman informed me that, although there was not in ordinary times much likelihood of importation of either fabricated or unfabricated shapes on our eastern seaboard, yet there was such a possibility at occasional times of unusually heavy demand; and even under normal conditions, cheap ocean freights made possible an importation from Europe to such places as Galveston and Puget Sound. And finally The Senate committee's amendment was accepted in the Senate itself without a word of explanation or debate. Congressional Record, April 22, 1909, p. 1468. 1 *I am not at liberty to give the names of my correspondents. The same is the case with regard to most of those with whom I communicated regarding the other changes of duty mentioned below. But I am able to vouch for the good faith of the persons who have given me information, and am confident that their statements of facts are accurate. one of my acquaintances, much experienced in this sort of business, stated his impression that the re-arranged duty was in some way connected with a "deal" between the United States Steel Corporation and the German Stahlwerksverband, by which a division of the market had been arranged. It is conceivable that the higher duty might clinch such a compact, by preventing the foreigners once for all from trespassing on the Steel Corporation's domestic preserve. It is conceivable also that here is an explanation of the failure of importers to protest against the advance. The change, being proposed in the Senate bill, which was printed and widely distributed, could not fail to come to the notice of persons interested; yet no opposition seems to have been made. I was referred by a trade journal to a New York dealer, who was said to be a representative of the German steel exporters and so to be in a position to throw light on the situation. But an inquiry from this person brought a courteous answer in very vague terms, telling me only of things easily ascertained by anyone conversant with the Custom House statistics, and giving no significant information whatever. This was the end of my inquiries. I have not been able to learn anything definite concerning the origin and the effect of this increase of duty. I suspect that, though in ordinary times there is no likelihood of an importation of fabricated steel, there is a chance of importation during rush times and at outlying districts; that the competition is not welcome to the domestic makers and particularly to the Steel Corporation; and that the change in duty was quietly arranged in order to prevent this sporadic competition. A compact between the Steel Corporation and its foreign potential competitor is entirely within the bounds of possibility. It may be that a little light is shed on the situation by the single statement made on this subject before the House committee and referred to a moment ago. A domestic purchaser of structural steel thus presented the case to the House Commit tee:3 "It is a well-known fact to all in the manufacturing of finished lines of the iron and steel business that outside of the United States Steel Corporation, and perhaps three or four others, there are no makers of the class of materials we use, excepting the item of plates. With but few exceptions all of the makers of this class of raw material do fabricating, i. e., putting it together in the shape of bridges, girders, Hearings before the Committee on Ways and Means, II., 1526. columns, and what is designated generally as fabricated work, although perhaps their aggregate tonnage in the fabricating line itself would not amount to more than one-third of the total fabricating output of the country. At present, however, with the high prices they are enabled. to maintain on the material before it is fabricated, these makers are given undue advantage over those fabricators who are not makers of the material, but to whom they sell, and can make much lower prices on fabricated work, and are doing so to-day and virtually controlling the price on this class of work, the reason being that the tariff, now so excessive, enables them to make a good profit on the material as first rolled into the shapes mentioned above, so that they can afford, if necessary, virtually to throw in the fabricating for little or nothing." 4 The next case is of an article much less important, but again a characteristic case. A change was made in the duty on cotton gloves. Under the Dingley Act (of 1897) these had come in at a duty of 45 per cent-the drag-net clause on manufactures of cotton n. o. p. The House bill had left the duty unchanged. The bill as reported by the Senate committee to the Senate still left the duty unchanged. But in the course of action by the Senate Committee of the Whole, a new clause was inserted; cotton gloves valued between $1.20 were to be dutiable not at the simple ad valorem rate, but at a compound rate, partly specific and partly ad valorem. In the act as passed, the Senate provision was substantially maintained. Gloves having a value of $6.00 or less a dozen pairs, now pay a duty of fifty cents per dozen plus 40 per cent ad valorem. If valued at over $6.00 a dozen, the duty remains ad valorem without any supplement of specific duty, but the rate goes up to 50 per cent. It is obvious that a change made in the course of action by the Senate itself attracts less attention than one made by its Committee on Finance. The bill as prepared by the Committee is printed, and is sent to every senator and indeed to every one interested. Changes there proposed readily attract the attention of the persons concerned. But changes made by the Senate itself are carried out in the wearisome routine of the amendments, with little attention and usually with no debate. Once embodied in the bill as passed by the Senate, they can be changed only in Conference Committee-always a difficult task. On the surface there is nothing to show what will be the effect of a change of this sort. It may or may not be of substantial importance. On cheap gloves, the insertion of the additional "Not otherwise provided for". specific duty brings a great advance. Thus on gloves valued at one dollar a dozen the old rate was 45 per cent, that is, forty-five cents; the new rate is fifty cents plus 40 per cent, or ninety cents in all. The duty is doubled, and becomes 90 per cent on the value. On dearer gloves, the specific duty is proportionally less weighty. In fact, it is the cheaper grade of gloves which prove to be affected. When the change attracted my attention, I wrote to persons conversant with the trade, and found a curious situation. The cheaper gloves are worth at wholesale one dollar a dozen, or thereabouts. They are imported largely from Germany. They are used for the most part by policemen, marines, and militia, for dress occasions; they are bought principally by public officials. The duty was inserted in the Senate through the activity of a person well known in the trade. He had got the ear of a New England senator, a member of the Finance Committee, who had secured for his protégé the increase of duty. An importer writes me as follows: "For years we have bought men's and boys' cheap cotton gloves wholesale from $1.1212 to $1.25, from Germany, but on account of the extra special duty of 50c. per dozen, it has been absolutely impossible to continue buying these goods abroad to place our orders with Mr. We have been obliged He is a member of the firm of who are making a very cheap domestic glove and reaping the direct benefits of the tariff which Mr. placing on these goods. He was in our store last Saturday, soliciting was instrumental in more business and states that he has received some very large contracts from the U. S. Army. One of his orders for this spring was for over 200,000 pairs. So that not only the public but the U. S. government is contributing to his support through the new tariff." One of the details deserves notice. In the bill as passed by the Senate and as sent to the Conference Committee, the new rates had been made applicable to "cotton gloves" in general. But private protests to the Senator in charge did secure a modification. The language was amended, in conference, by the insertion of the words "men's and boys" ". Hence gloves for women in the end came in at the old rate of 45 per cent. able to allow this concession since it did not affect the plans of his protégé. The Senator was Now there may be good grounds of public policy for making sure that men's white cotton gloves are made at home and not imported. It may be thought humiliating for this great country that our soldiers should wear on dress occasions cheap cotton |