gloves made by cheap German labor; it may even be thought that. their martial spirit would be enfeebled. For myself, I am able to face the possibility without a shock to my feelings of patriotism. But it seems tolerably clear that the moving force in bringing about the new duty was not the semi-military consideration, but pressure from the interested Mr. If changes in duty such as this are to be made, should they not be deliberately reported and publicly considered 25

The third case is that of nippers and pliers. These also had formerly been subject to a drag-net duty, as manufactures of iron and steel, at 45 per cent. The bill, as it came from the House Committee on Ways and Means and as passed by the House, made no change. As submitted to the Senate by the Senate Finance Committee, it still proposed no change. But in the course of action by the Senate itself a considerable rearrangement was made. Again there was substituted a compound duty, partly specific and partly ad valorem. Nippers and pliers were to be subject to a duty of ten cents per pound plus 40 per cent. In the act as passed the duty became eight cents per pound plus 40 per cent.

Once more I made inquiries of persons in the trade, and was informed that the duty was put in at the request of a Utica manufacturing concern. That concern had presented a statement to the House committee, which was duly printed in the Hearings; but its request for an increase of duty was not granted in the House bill. In the Senate a well-known official, not a senator, but high in the administrative hierarchy, stood sponsor for the change. The persons who protested at the last minute against the increase of duty were informed that it really was of little consequence what they might say or present. So long as this statesman was insistent in requesting the increased duty, it would remain. And remain it did. I was shown copies of some typewritten statements presented by the Utica concern to the Senate Finance Committee. They were obviously of the sort that are prepared pro forma; a medley of crude figures about cost of production, exaggerated statements about the dreadful low wages

The amendment for the increase in this duty was offered at an evening session, as coming from the Finance Committee, and it was accepted after a very few words of debate. Congressional Record, June 7, 1909, pp. 2914-2915.

'Hearings, III, 2782.

in Germany, and the like, which would not stand a moment's searching analysis; such stuff as is familiar in statements made before tariff committees. All this obviously was, to repeat, pro forma. The moving impulse towards the higher duty was the influence of the friendly statesman, and figures and arguments for the duty had as little real influence as figures and arguments against.

Now, as to the effect. Like all the compound duties, partly specific and partly ad valorem, it bears most heavily on the cheaper classes of goods. On small nippers and pliers, light in weight, the specific duty of eight cents per pound is insignificant; these continue to be imported. The larger sizes, used for wire fencing and the like, are subject to a much higher duty, and the importation of these has declined. The domestic manufacturers have taken a larger proportion of the business. My chief informant states, however, that the Utica concern, although originally the party mainly interested, has now found competition from other manufacturers, and that the business has been distributed among various domestic producers." He writes also:

"The Utica concern is very progressive and aggressive and I believe that even if no change had been made in the schedule they would nevertheless have continued to get more and more of the trade in pliers and nippers, thereby reducing the sale of imported goods ·· The increase in the duty has of course helped them very materially, but my opinion is that in the long run they would have accomplished the same purpose, although possibly with less profit."

Of a somewhat different sort is the razor episode. Here there was public presentation of petitions to the House committee; and some advances of duty were proposed in the House bill. In the Senate a still further increase of duty was proposed, and the Senate rates in the main were enacted. The course of events is indicated in the following tabulated statement, which also indicates how complex is the system of rates. As in many other of the schedules that have reached very high rates, there is a double complication. Goods are classed according to value, the duty shifting abruptly as a given point of value (say $1.50 a dozen for razors) is reached. Further, the duty is a compound one-so much per dozen and in addition an ad valorem rate. It will be observed

In the statement submitted by the Utica Company to the House Committee, it is said (Hearings, 2782): "We are the only plant in the country making no other product except nippers and pliers." A list is given of other firms "who make pliers as a side line".

that the Senate changed the House figures in such manner as to disguise somewhat the increase of duty. The specific rate on the cheapest razors had been in the House bill 50c. per dozen. The Senate made it 6c. each, or 72c. a dozen. On the medium grade razors the House specific rate had been $1.00 a dozen; the Senate made it 10c. each, or $1.20 a dozen. On the highest class of razors the House specific rate had been $1.75 a dozen; the act finally made it 15c. each or $1.80 a dozen. In the act as passed the Senate rates were in the main retained, but with the ad valorem duty fixed in all cases at 35 per cent. The reader will see for himself how the specific duties were rearranged in the various stages of the bill. The net outcome was a very substantial increase.

In this case there was not a little discussion. As already mentioned, the request for a higher duty was presented to the House committee and duly recorded. In the Senate there was active debate. It was to be expected, and gives no occasion for special criticism, that those who advocated an increase should put the case on the unqualified protectionist grounds. But there were some curious misstatements and misconceptions. The reader who searches in the columns of the Congressional Record for items regarding the economic development of the United States will find here accounts of astounding industrial reverses. It would appear *Hearings, 2161.

9

The debate is recorded in the Congressional Record, Senate Proceedings, May 15, 17, 18, 1909.

that a decade ago there were sixty or seventy razor factories in the United States, and that this flourishing industry had been virtually wiped out by foreign competition; the number of factories had been reduced to five! But I learn from private sources that the cataclysm has not really been so violent. Some of the domestic manufacturers, in conversation with a senator active in the debate on this subject, had informed him that a decade ago there were "six or seven" razor factories in the United States, and that the number had fallen to five! The distinguished senator had understood them to say "sixty-seven”, and had so stated on the floor of the Senate.10 Having made the statement in public, he did not wish to modify it in so sweeping a way as would have been necessary to reduce sixty-seven to six or seven. Accordingly the statement remained, was repeated by other senators, and is permanently recorded in the files of the Congressional Record. It may happen that in coming centuries some research student of economic history will turn to these pages as "original" sources of information (not secondary sources, Heaven forbid!) and will find here unmistakable contemporary testimony of the extraordinary mutations of industry in the United States at the beginning of the twentieth century.

In its strictly economic aspect, the razor situation is in many respects curious. Some sorts of razors we export-the worldknown safeties. It is obvious that, in order to export we must be able to produce them more cheaply than can foreigners. Other sorts of razors, especially the finer grade of "old-style" razors, we import in the face of high duties. Evidently the old style razors are produced more cheaply in foreign countries. They came formerly chiefly from England, but now come from Germany. It was the dreadful Germans and their deadly cheap wages which were chiefly referred to in the Senate debates.

These cross-currents in the importations and exportations of razors are in line with similar cross-currents as to other sorts of hardware. In general, we export rather than import finished iron and steel goods. We export builders' hardware, such as hinges, locks, door knobs, machinery and machine tools, locomotives, agricultural implements, and the like. On the other hand, we import many pocket-knives (though in recent years more and more pocket-knives, especially of medium grades, have been manufactured in this country), and a miscellaneous assortment of » Congressional Record, 2165, 2180, 2221.

anchors, chains, tools, machines. The explanation which I am disposed to apply to these apparently anomalous juxtapositions of imports and exports, is that things made by machinery are likely to be made in this country and even to be exported, whereas those made by artisan labor are likely to be imported. When it comes to turning out by machinery, on a large scale, great quantities of goods of a standard pattern, we need not fear foreign rivals. For this sort of thing, we have, in the language of the economists, a comparative advantage. Notwithstanding dearer labor, we can turn out the product as cheaply as the European rival, even more cheaply. But when it comes to articles made by hand labor, the European who gets his labor at a cheaper rate can undersell

us.

This sort of reasoning had seemed applicable in explanation of the continued importation of old-style razors. I still believe that in general the explanation is a good one. It accounts in the main for these peculiarities in our international trade; it explains why some articles are imported, and others, apparently like them, are not imported, and even are exported. But on inquiry of persons engaged both in the importation and in the manufacture of razors, I find that the facts do not fit into the reasoning, so far as this particular article is concerned. It appears that in former times razors came chiefly from England. There they were made by skilful artisans, and in the main by hand labor. The Sheffield grinder put the edge on each individual blade by hand, on varying sizes of small stones. But of late razors have come more and more from Germany, and my informant writes as follows:

In this particular industry the Germans have decidedly taken a leaf out of our book. While we have been struggling along, trying to make razors under the old English methods (with a few-but very few-modern appliances), they have gone ahead and comparatively revolutionized the methods; introduced new ways for forging the blades, and above all things, invented and put into satisfactory operation grinding machines which have enabled them not only to manufacture razors at a very low cost of production, but to produce a quality and uniformity of goods with which we simply cannot compete. It would seem that the Americans for once have been backward. Apparently what the domestic producers of razors really need is not higher duties but greater enterprise and skill. A demand for extreme duties is always suspicious. In this case, as in so many