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schedule or anything of that kind. It is purely a public matter with

me.

Mr. CARNEGIE. I have been here all day long, and when the gentleman makes his speech I suppose it will be printed?

The CHAIRMAN. It will be printed.

Mr. CARNEGIE. And I will have the pleasure of reading it.

Mr. CROZIER. If it will be a pleasure

The CHAIRMAN. The clerk will send you a copy of it, Mr. Carnegie.

Mr. CROZIER. I thought perhaps you would desire to correct some of my statements if you thought they were improper.

Mr. CARNEGIE. No; I will beg to be excused.

The CHAIRMAN. The clerk will send you a copy of Mr. Crozier's speech and you can reply in writing if you desire it, and send to the clerk what you have to say, and it will not be necessary for you to stay if you do not desire to.

Mr. CARNEGIE. I have been here all day and I am somewhat tired and I will read your criticism later, and then I will say, maybe, if it is against me, "What a pity that man does not know better," and if it is in favor of me I will say "What a wise young fellow that was." [Laughter.]

Mr. CROZIER. Mr. Carnegie, I have no doubt that you will say the former, that it is a pity that I am not better informed.

Mr. CARNEGIE. I do not want to have the pain of saying that to such a nice fellow, and it is well that he should remain for several days in the delusion that he is quite well up on the tariff question. Mr. CROZIER. Possibly the delusion will be mutual. Anyway, I am glad to excuse you if you prefer to go.

Mr. CARNEGIE. Yes; because I can not reply to-night. I have been here all day. I did not want to treat anybody with discourtesy. I have tried the best I could to give you my opinions on this subject. I inay be wrong, I may be right.

Mr. CROZIER. We will be friends anyway.

Mr. Chairman, I will try to get to the point and not detain you over twenty or thirty minutes at the most.

In a recent magazine article Andrew Carnegie dealt a severe blow to the entire protective tariff system. He has moved public opinion appreciably. He has kindled wide doubt as to the wisdom, necessity, and value of protection. His experience and knowledge of the subject and claim that he is a protectionist enabled him to do this. But he is no longer a protectionist in the American sense, for he says: "A tariff for protection, which was the issue forty years ago, should now give place to a tariff for revenue." He says the infant should be weaned from tariff milk and fed upon free competition.

Unfortunately, his article has created another impression among many. Mr. Carnegie invoked and obtained the Government's protective arm to hold back foreign competition during the whole time he was, with his genius, building up his industry from nothing to where he sold it for some $300,000,000. He took his pay largely in first mortgage bonds of the United States Steel Corporation. He is said to be the largest owner of that trust, deriving there from some $15,000,000 annually. Many believe now he is again invoking the Government's strong arm for his financial benefit or security. That he wants it to now tear down the tariff wall and admit foreign com

petition to help his trust ruin and destroy its weaker competitors and to frighten capital so that it will not start new industries to compete with the trust. This would leave his corporation forever in undisputed possession of the American field. This may not be his intention or desire, but it would be the effect. His proposition doubtless was innocent and philanthropic, but many think it looks thrifty.

It would seem that he used the Federal Government to wet nurse his weakling infant until it has become the greatest of all industrial giants, and instead of weaning it from the Government he now asks for a law that would kill off all of the other infants, big and little, so that his giant may have all the profit milk the monopolistic leech can suck, both from the producers and consumers of America. He would encourage race suicide, for his plan would automatically suffocate all industrial infants of the iron and steel variety as soon as they are born.

Judge Gary told you frankly and on oath that free trade would not injure the steel trust; that it could take care of itself. Its splendid organization, huge size, vast power, due to railroad, financial, and political alliances, make its position impregnable against every foe but one. Only by an endless-chain absorption or by enormous loss of profits through fierce competition and cutting of prices can it protect itself against the constant menace of new industries that are induced to spring up by the attraction of rich profits from the high range of prices the trust must maintain to pay dividends on its vast capitalization. This is so, unless Mr. Carnegie's plan of destroying the tariff can be used to frighten capital and prevent the starting of such plants, for no one would risk his money if he had to fight a big trust and also the duty-free products of cheap foreign labor.

If foreign competition became annoying, the trust could effectively retaliate abroad and ultimately bring about an international trust that could evade regulating and restraining laws and combine, for mutual defense and profit, the iron and steel producers of the world. It would then be practicable and possible for the daring genius of high finance to reach its final goal a universal monopoly of a human necessity that could, with high prices, extort excessive profits continuously and automatically from all mankind for the sole benefit of the few and gradually draining and weakening all peoples to a state tending toward final and helpless servitude. Wise statesmanship diverts at their source such evil currents.

Are antitrust laws justifiable? Is competition, such as contemplated by the common law for hundreds of years, wise? Is private monopoly abhorrent? Is it against public welfare to have control of all industry pass into the hands of a few men and ultimately come under the mastery of one human individual, crushing out all independent operators and forcing the entire citizenship into the hired service of one incorporated, soulless power? We are not drifting that way, but madly galloping.

If this be true, then there never was a time when the establishment of infant industries was more imperatively needed for the common good-not to develop the country, but to compete with the trusts, keep their prices down, and ward off the evil day of the annihilation of all competition, the establishment of complete monopoly, and perhaps a revolution started by the people in some desperate effort to

free themselves from the powerful, concentrating, strangling incorporated clutch.

It is as important to the young man of to-day just starting in business life with courage, but without wealth, to have his little infant industry protected as it was for Mr. Carnegie when he was similarly situated. More so, for Mr. Carnegie was menaced only by the danger from abroad, as there were then no powerful trusts to fight him in the market here at home with all the effective means at their command, such as cheaper raw materials, better transportation accommodations and rates, lower interest charges, indirect duress upon purchasers, and the like.

Only the protective tariff can give him any chance and insure the starting of new plants to compete with the trusts and retain in the hands of the Government any effective power of regulation or control of combinations in restraint of trade. Destroy protection and thereafter our economic policies will not be controlled by our Government or its citizens, but largely by conditions abroad, over which we can have no effective control.

Perhaps I should have explained that I have no hostility toward corporations or wealth, no interest in any trust, no personal concern over any tariff schedule. My interest in this matter is only as an humble member of that large body of citizens who desire a good government that will perpetuate itself in the confidence and affections of all the people by adopting and executing policies that will insure to all, rich and poor alike, impartial equality before the law, industrial opportunity, and enjoyment of life, liberty, and the pursuit of happiness.

The tariff should be revised honestly, thoroughly, fearlessly, unselfishly. The people were promised and expect it. But they do not expect you to dump them out of the frying pan into the fire. They want readjustment with due regard to all the ultimate consequences to the welfare of the nation as a whole. It is a difficult task, but the people have confidence in your wisdom, caution, independence, impartiality, and patriotism.

Mr. Carnegie's enumeration of the objects of protection strangely omits the one great purpose of the policy, in fact, the one object which justified its adoption and won the popular support necessary to its continuance, namely, the welfare of American labor and agri

culture.

If the protective tariff is abolished and the steel trust, for instance, becomes an international trust, its workmen will be at its mercy absolutely and always. And there is no certainty that its management will always be as wise respecting labor as it now is. If its employees here strike to prevent wage reduction or longer hours, the mills can be closed and the American market supplied from its mills abroad until its American workmen, their wives, and children are starved into submission. It will be comparatively easy to form kindred industries in different countries into international trusts, for capital and investment readily migrate anywhere in the world to the point of greatest profits consistent with safety. But it is not practicable to organize labor internationally.

The ultimate tendency of the policy of internationally consolidating industry, which removal of the tariff would hasten, will be to

bring the wages paid to labor in all countries approximately to one common level. With the power of labor to protect itself by effective organization gone, and with human nature as it is, American wages would go down to the foreign level instead of foreign wages being advanced to the American standard.. The trust would install American' superintendents and improved machinery in its foreign mills. It doubtless would produce abroad with its cheaper labor exclusively if it could do so more cheaply, for the freight rate by water from Europe to the United States is less than it is by rail from Pittsburg to the seaboard. Inevitably wages here would ultimately be lowered or American mills closed altogether.

Marquis Ito, the distinguished Japanese economist, says the Chinese coolies can quickly be trained into the most docile and effective of skilled workmen in almost any kind of industry. There are tens of millions of these coolies ready to work for 10 cents a day. Capital is alive to its opportunity always, and China and Japan in time will rival this country in the number and size of its industries, largely owned by capitalists of this and other countries. There are hundreds of thousands of skilled workmen in Japan anxious to work for 30 cents a day. What is the use of laws excluding Asiatics for the protection of our labor if the tariff is to be removed and our trusts allowed to build great factories in Asia, managed by Americans, but employing cheap oriental labor, the products being shipped here duty free and sold at prices that will force American factories to close or reduce wages?

Already trusts producing oil, steel and iron, powder, tobacco, thread, and other products have taken steps looking toward worldwide control of prices-the first step toward the inevitable international trust.

It has been said that the protective tariff is the mother of trusts. Many good men believe this, but it is not true. However, it is the mother of industry, of that huge family of prosperous and growing industries that employ millions of American workmen, our citizens, at the highest average wages of all human history; and we are proud of her for that reason. But she did not give birth to the great monopolistic monstrosities called trusts. She has mothered agriculture also, and helped create the best home market in all the world. Excessive and ruinous competition during the years following the panic of 1893 supplied the incentive and industrial bargains that led to the formation of most American trusts. But the real mother of trusts was Wall street. Few would have ever been formed but for its machinations and exigencies. Clever promoters, who since the success of their schemes are called great financiers and bankers, obtained options on different plants in a given industry. Then they formed a huge corporation with almost an endless amount of stock, but relatively no money. They caused the board of dummy directors, consisting of their office boys and irresponsible clerks, to "buy" such options, paying therefor the entire capital stock of the company. All this was valueless unless they could find some way to sell it for real money.

First, they tried, and usually succeeded, to pay for the plants under option by issuing to the original owners a comparatively small portion of the stock of the new company. This was genius, of its kind; the promoters thereby acquiring control and management and a good

portion of the title to a lot of going concerns. All this for nothing, by simply promising the owners that Wall street, with its canny powers and machinery for public deception, would hypnotize the public into believing that the plants were worth several times more than the original owners ever dreamed of, so the people would take their savings from the banks and buy the stocks of the new trust to an extent that would enable the original owners and the promoters to unload at fictitious prices and make a clean-up. The scheme worked, thanks to the wizard ways of Wall street. The stock exchange was the wholesale agency and the screen that hid the perpetrators from the despoiled people. This was the way the overnight multimillionaires were made. This was the way trusts were born. The tariff had nothing to do with it.

If it is true, as reported, that Mr. Carnegie was willing to sell for one hundred millions what he afterwards sold to the trust for about $300,000,000, he can not be blamed for driving a good bargain with the promoters even if the people must now pay for it. But it serves to illustrate the basis on which cost of production is now figured, and gives a glimpse inside at the vastness of the volume of trust securities on which the public are expected to supply the money to pay dividends by paying high prices for trust products. The trusts must maintain these high prices or default on interest or dividends. To do this they must have a substantial monopoly. This can be had only by buying up competing plants as fast as they get troublesome, or by crushing them with competition, unless the plan to abolish the tariff can be made to destroy their weaker competitors for them.

One of the prime objects of the promoters of the trusts is said to have been the furnishing of several billions of securities that could be listed and artificially manipulated daily by the insiders as chips on Wall street's great gaming table, where by means that would not be used by the most hardened of professional gamblers the people of the entire country are enticed and daily fleeced out of their earnings and their properties. The legislature refused to act, so Governor Hughes has appointed a private committee to investigate Wall street. Their work will be more thorough and successful if the entire wronged country will promptly rise up and demand the abolition of margin gambling and usurious rates on call loans, the former exceeding in volume the value of all farm and manufactured products, the latter, with rates that often go up to 200 per cent, being the great magnet with which the money of the entire country is enticed. away from legitimate business and into gambling uses.

In two years prices of stocks have fluctuated 40 to 150 per cent. An average drop of but 10 per cent on the entire market means a loss equal to all the money in circulation. Yet this is done continuously and artificially by the pools comprised of the same few men who have seized control of the big banks, insurance companies, railroads, trusts, and public currency, who create conditions that ruin the country with panics while they gamble away the prosperity of the nation. This situation is more important than the tariff question. It is dangerous to the public welfare. There is to be a finish fight between the masters of Wall street and the Government and the people of the United States.

Mr. UNDERWOOD. You understand that the jurisdiction of this com

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