used when the most favorable tariff is granted the United States on machine tools by foreign countries. Yours, respectfully, Edward M. Woodward, President Woodward & Powell Planer Com- It is signed by practically all of the machine-tool makers of Fitchburg and Worcester. In your judgment, would the adoption of such legislation as that tend to increase the trade of foreign machine-tool builders in this country? Colonel CLARKE. I think it would increase it. Mr. HILL. Would it be any detriment to the home trade? Colonel CLARKE. I think it would. Mr. HILL. You think it would be a detriment to the home trade? Mr. HILL. Would your judgment commend such legislation? Mr. LONGWORTH. I might say that I have had a number of such communications on exactly the same line. Mr. CALDERHEAD. Why not? Colonel CLARKE. We have a very large manufacture of machine tools in this country, and the competition between these many producers is very keen. It has reduced the price to the consumer as low as it can safely be reduced and maintain our present American system of living and American wages. To introduce more easily the foreign-made machine tools, which, of course, are the products of countries with much lower labor cost than prevails here, would by just so far dislocate the American industry and displace American goods which have given employment to American labor. The CHAIRMAN. Do we not sell machine tools abroad? Mr. LONGWORTH. Cincinnati is one of the largest machine-tool districts in this country. I am told that more than 40 per cent of their trade is export trade. The CHAIRMAN. I think you are mistaken about that, Colonel. I have read constant references to it. I think you are mistaken about that. I understand that we beat the world in making machine tools, in the fineness and quality of the tools. Colonel CLARKE. That may be so, Mr. Chairman, but I have been told by machine-tool builders that the foreigners copy the American patterns within a year after they obtain a pattern; and we have not the advantage of the lower cost of labor and the lower cost of everything that enters into their manufacture. The CHAIRMAN. The statement was that because of their excellence they were sold at even a higher price than the tools of domestic manufacture there. I am sure I saw that statement about machine tools in the consular reports. Colonel CLARKE. It may be true of certain special instances, Mr. Chairman, but I can not believe that it is true as a whole. The machine-tool industry, of course, is a very large industry. There is a great variety of machine tools, and naturally some would be exported, and we naturally import some. The CHAIRMAN. Is there any portion of the present law where you think it would be possible to reduce the rate? Colonel CLARKE. I think it may be possible, if you adopt home valuation. The CHAIRMAN. If you adopt what? Colonel CLARKE. Home valuation, where ad valorem duties apply. The CHAIRMAN. I am speaking of a reduction. If we adopted home valuation, the rate might well be the same as now, if we could get an honest valuation. For instance, if we adopted home valuation on crockery, the rate would be 22 per cent, and would run fully as high as it is now at 60 per cent on foreign valuations. That figures out to a certainty. But I mean aside from that, is there any schedule or any paragraph where you think the rate might be reduced with. safety? Colonel CLARKE. I think probably there are a number of instances. The CHAIRMAN. But you have not been able to specify any. Colonel CLARKE. I have tried for the last three years to get somebody to name those articles, and with very, very limited results. I have heard more in these hearings here on that subject than I have been able to ascertain in three years from talking with individuals and reading their magazine and newspaper articles. The CHAIRMAN. How about the duty on hides? Colonel CLARKE. The duty on hides; the hides of cattle? Colonel CLARKE. Of course that can be taken off probably with some small advantage to the shoe industry and the harness industry of the country, unless they thereby have to sacrifice their price. The CHAIRMAN. Did you hear the shoe men the other day when they said they were willing to have the duty all taken off of shoes if they had free hides? Colonel CLARKE. I did. I heard the telegram from a Lynn firm. The CHAIRMAN. You think they are mistaken about that? Colonel CLARKE. I do, and I know there is a large number of shoe manufacturers in Massachusetts who do not agree with them. Mr. RANDELL. They are manufacturing for export, though, are they not, and they get a drawback on the hides that they import; they get their hides free, and are manufacturing for foreign markets? Colonel CLARKE. If they are able to identify the leather. Mr. RANDELL. Is that the case or not? Colonel CLARKE. If they are able to identify the leather made from imported hide which enters into a shoe, they can get the drawback. Otherwise not. The CHAIRMAN. That seems to be a little difficult, because they buy uppers and soles already cut. Colonel CLARKE. Certainly. The manufacturer of sole leather has no difficulty at all in getting the drawback, except in this respect: The foreign producer of that leather knows very well that the American exporter is entitled to that drawback, and so in driving his bargain he insists on having that drawback, or a part of it. Mr. BONYNGE. Do you agree with those witnesses who appeared before us in favor of free hides, who contended that the packers got all the benefit of the 15 per cent on hides? Colonel CLARKE. I do not. Mr. BONYNGE. And that the cattlemen and ranchmen of the West got none of it? Colonel CLARKE. I do not agree with their statement about that. The CHAIRMAN. If the whole duty were added to the price of the hides, still the amount of that duty would not affect the price of shoes to exceed 2 per cent; it would be nearer 1 per cent on the price of a pair of shoes. Say it is 2 per cent. The duty on shoes is 20 per cent, I think. Now, if their statement is correct, without any reduction in the duty on hides they could reduce the duty on shoes 15 per cent and not be hurt, and that would leave them 5 per cent. If I am not right about the duty being 20 per cent, and it is 15 per cent, they could reduce the duty 10 per cent and leave it at 5 per cent. If these gentlemen know their business, and know what they are talking about, they can stand a reduction to 5 per cent and have ample protection, according to their notion. Colonel CLARKE. The duty on shoes is 25 per cent. Possibly it could be reduced a little. Mr. William B. Rice is one of the largest shoe manufacturers in Massachusetts. He is a free trader in theory and a member of the Democratic party, and when the subject of taking the duty off shoes in consideration of taking it off hides was brought up three or four years ago he said the shoe manufacturers could not afford to take it all off, because other things besides hides went into shoes. There is the cotton cloth used for lining, and there are some metallic goods used for eyelets, and so forth, and they are dutiable. He said that it would place the shoe manufacturer at a disadvantage. The other day this Mr. Jones who testified so ably before this committee told me in conversation that the Germans and Austrians are now manufacturing what is called an "American shoe " on machinery sent over to them and leased to them by the United Shoe Machinery Company, which they operate under the skilled guidance of a man or men sent over by the United Shoe Machinery Company, and those shoes are in great favor in the foreign markets. He says an expert can hardly tell the difference between them and an American shoe of the same style. He looked upon it as setting the limit to the exportation of American shoes to European markets, and he said, "We shall be very fortunate if it does not result in an invasion of the home market by those same shoes." The CHAIRMAN. You say Mr. Jones who appeared during the hearing? Colonel CLARKE. Yes, sir. The CHAIRMAN. Why did he not come out in the open and express his views? Colonel CLARKE. I do not know. I had this conversation with him. Mr. GAINES. He is speaking of Mr. Jones, who testified here so ably before this committee on this subject, or at least so skillfully. Colonel Clarke, I have been told to-day by a gentleman from Massachusetts that the persons who were here the other day represent the very large manufacturers of shoes, who, by reason of their great output, can manufacture more cheaply than the great bulk of shoe manu 61318-MISC-09-11 facturers, and also men whose product has, to a certain extent, now a monopoly because they manufacture shoes of superior fit and fashion, but that the great bulk of Massachusetts shoe manufacturers will say that upon cheaper grades of shoes, such as can be manufactured abroad, the shoemakers of this country can not stand free trade, and that the gentlemen who were testifying here the other day did not represent the majority in number or even the bulk in output of the shoe trade. The CHAIRMAN. Why do they not appear and give the information to the committee? Mr. GAINES. I understand they want to appear, and will appear. I wanted to ask Colonel Clarke whether, in his opinion, those gentlemen who expressed themselves in favor of free shoes do or do not represent the sentiment of the Massachusetts shoe manufacturers. Colonel CLARKE. I think they represent the majority of that senti ment. Mr. GAINES. You do? Colonel CLARKE. I do; and I will tell you why. Three or four years ago the Boston Commercial Bulletin, owned and edited by Governor Guild, made a canvass of the shoe manufacturers of New England, and 65 per cent of them declared in favor of free hides and declared their willingness to sacrifice a part of the protection on shoes if they could get free hides. Mr. BONYNGE. A part of the protection only? Colonel CLARKE. Part of the protection. Mr. GAINES. But these gentlemen said they were willing to do away with all of the protection, if I understood them correctly. Colonel CLARKE. I do not believe that a majority, or even a large minority, of the shoe manufacturers of Massachusetts would consent to taking off all of the duty. The CHAIRMAN. They not only stated that, but they have asserted it to me repeatedly in the last three or four years; and I have asked them if they had all the duty taken off on shoes if they would not be back here asking us to put it on again, and if they were aware of the fact that if it was done under a general revision of the tariff it would be years before the tariff would be changed again; and they said yes, they were aware of that, and they were willing to have it taken off. That is what these gentlemen told me, some of these same gentlemen. Mr. CALDERHEAD. There is no tariff upon any hides that come in of any kind except the heavy hides, the sole-leather hides? Colonel CLARKE. That is all; hides weighing 26 pounds, I think. Mr. CALDERHEAD. What percentage of the importation of hides is of that character? Colonel CLARKE. It is a comparatively small percentage, but still it is an important factor in the business. Mr. CALDERHEAD. If there were six or seven millions altogether, the importations of heavy hides would be about one million? Colonel CLARKE. I would not undertake to give the percentages without looking them up. Mr. CALDERHEAD. I wish you would. Colonel CLARKE. I will look them up and furnish the information to the committee. Mr. CALDERHEAD. I wish you would. Where do the heavy hides come from? Colonel CLARKE. From South America, very largely. Mr. CALDERHEAD. Any from India? Colonel CLARKE. I doubt if any heavy hides come from India. We import a great many light skins, goatskins. Of course they come in free. Mr. CALDERHEAD. Yes. There is no tariff of any kind except upon heavy hides? Colonel CLARKE. That is all. Mr. CALDERHEAD. The heavy hides of 3 and 4 year old cattle? Mr. LONGWORTH. Do you agree with the statement of Mr. Jones that the price of hides has nothing whatever to do with the price of cattle? Colonel CLARKE. I do not. Mr. LONGWORTH. I did not understand whether you did or not. Colonel CLARKE. I think the growers of cattle know what the duty is, and they are generally keen-scented for what they are entitled to. I think they exact a little higher price for the steer than they would but for that duty. Mr. LONGWORTH. Mr. Jones had some figures which he read to show that when the price of hides was highest the price of cattle was lowest, and vice versa. Colonel CLARKE. I do not recall those figures, but that might happen as a coincidence. There might be other factors entering into the problem at different times which would make prices high or low. Mr. CALDERHEAD. What would the packer who buys cattle say to the shipper who sells cattle if the tariff was taken off of heavy hides? Colonel CLARKE. Well, I am not much acquainted with the packers. I do not know what they would say. Mr. GAINES. You mean whether he would not use that as an argument to force down prices when the cattle were offered for sale? Mr. CALDERHEAD. Yes; when the cattleman offers his cattle he offers them with the hides on. The price is $6 a hundred at this time, and he pays that much with the hide on, and he pays for the hide as well as the other part of the animal. Now, the hide of a 3 or 4 year old steer weighs from 100 to 115 pounds. If the tariff amounts to 3 cents a pound, will the packer say to the shipper, "The tariff has been taken off and I can not pay quite so much for this steer?" Colonel CLARKE. I think he is very likely to say that; but there is a very large proportion of the hides of cattle which are not sold by the packers. The output of small slaughterhouses all over the country amounts probably to about one-half of all the hide-producing industries. Mr. BONYNGE. What do they do with the hides? Colonel CLARKE. They sell them in their city markets at the prevailing prices, always getting all they can. Mr. CALDERHEAD. Those are all hides of young cattle, usually? Colonel CLARKE. No; they are very often the hides of cows, and sometimes, in some States, of oxen. I was in a town in Maine four years ago, where I was told that every farmer keeps one yoke of oxen, and some farmers more. They are returning to the use of oxen more and more in some parts of New England. Of course those hides get into the market sooner or later. They are heavy hides. Mr. LONGWORTH. Do you believe, Colonel, if the duty on hides was increased that the cattle industry would be stimulated? |