With a balance of $6,100,000,000 to our credit in exports, nearly all gained since 1895, shown in my former statement, it is time the people were considered. It is now no longer of any more importance to sell $1,000,000 worth of goods in a foreign market than it is to increase our home sales that amount. Our high tariff should be reduced so our home people will consume the greatest amount possible. Imports and exports of iron and steel from the year 1823 down to and including The above imports and exports of iron and steel, beginning in 1893, were nearly equal; from that year our exports increased, down to The above figures tell their own story. Our exports of all kinds. of iron and steel show what we are making successfully with American labor during a year when prices have been the highest in years. We pay the ocean freights, which must be $2 per ton and upward, and are underselling Europe in their own market; also underselling Germany, which is proof that no tariff is needed and serves only to compel Americans to pay higher prices than our manufacturers sell for in Europe. Our tariff laws are asserted to be in the interests of labor and consumers. These figures show that they are solely in the interests of the trusts and their combinations in the iron and steel productions. The exports of 1907 show exports nearly equal to one-third of the steel trust's total output, and can not be said it is simply to dump. surplus. The exports of 1907, the year with the highest priced production we ever had, we increased our exports of iron and steel over $25,000,000. There can be no stronger proof that no tariff is needed in the United States, as we can manufacture much more cheaply this year than last. It has been constantly asserted and generally believed that the tariff is to protect the American workingman against the lower-paid workman of other countries. The facts herewith presented are posi tive proof that the greater object of the present Dingley tariff is not so much to protect the workingman as it is to compel the American consumer to pay much higher prices than Europeans pay for the same goods, and when the American prices advance to the European price, plus the tariff and ocean freights, that the workman does not share in that advanced price, but really has to pay this advance on much of the goods he consumes here. If the tariff is to be in the interests of the workingmen and consumers, when the American manufacturer can manufacture his goods here and sell freely in the foreign market the tariff should be entirely removed. The Dingley tariff enables the manufacturers to, and the manufacturers do, often advance the market price so they get unreasonable profits, and the prices have been advanced so great that they unsettle the whole business of the country and produce panics and recessions in business. The workingmen and consumers do not get the benefit of the advance in prices, and the workingmen are frequently thrown out of employment, waiting for confidence to be restored. If the tariff was entirely removed on pig iron and the coarser makes of wire for manufacturing and wire for farm uses, the prices and production would be far more normal; labor would be constantly employed at fair wages. Since the large combinations have been formed, like the American Steel and Wire Company, and later the United States Steel trust, they absolutely control production and the prices of what they produce. They meet together monthly, when the situation is extreme, and tell us what a great blessing they have been to the country in maintaining high prices. Such a meeting was very recently held. As Haaman built the gallows on which he afterwards was hung, so the steel trust have supplied us certified statements of assets, production, and sales to show themselves to be the greatest robbers under our tariff of any corporation that exists in the United States that has come into the limelight. They are a public leech on nearly every industry in the land. The greatest of American industries, the railroads, shipbuilding, stove and foundry trades, agricultural works, building trades, and hundreds of others all pay tribute. Scarcely one of these great industries dare appear before your committee and ask for free pig iron or a reduction of tariff on wires for fear of offending this giant corporation, and fear it will interfere with future dealings; they can not go outside and supply their wants. Mr. Collier, president of the National Manufacturing Company, of Worcester, Mass., who also represented three others in the same city who use about 4,500 tons of wire in house-furnishing articles, appeared before your committee to ask for 50 per cent increased duty on strainers in addition to a greatly increased specific duty. When I asked him why he did not ask for free or freer raw material he would not reply. Many other large manufacturers have told me they could not get supplied outside of the trust and dare not offend them, and told me I could give the facts, but must not give their names; and some said if they could have a prohibitive duty on the goods they make they would use tariff-protected raw material. This might in some cases answer for the manufacturers, but where do the great public come in? From their own statement, the United States Steel Corporation show an apparent overcapitalization of $1,000,000,000. Their first annual statement, December 31, 1902, with which they were to commence doing business January 1, 1903, showed assets of Their fifth annual statement, December 31, 1906, upon which they would do 1907 business, was-- Showing an apparent increase of assets of_____. Gross sales and earnings for year to December 31, 1907, were___ Increase sales in 1907 over 1902. Increase in assets in 1906 over 1902---- $1,546, 544, 234 1,681, 309, 769 134, 765, 535 757, 014, 767 560, 510, 479 196, 504, 288 134, 765, 535 196, 504, 288 If the steel trust have made a correct statement of assets, as above quoted, and they produced $196,504,288 worth of goods in 1907, with additional assets of $134,765,767, they should produce their output of 1907, $757,014,767, with capital assets of $518,555,000. Assets of December 31, 1907, were__. Amount of capital required to produce output of 1907 would be only Showing an apparent overcapitalization of---. American Iron and Steel Association. [Kegs of 100 pounds.] $1,681, 309, 769 518, 555, 000 1, 162, 654, 769 By referring to prices of wire and cut nails you will see that soon after the American Iron and Steel Wire Company absorbed that industry in 1898 they at once advanced the price from $1.27 in December, 1898, to $2.30 in June, 1898, and $3.20 in January, 1900, on a greatly decreased product, which dropped from 11.104,014 kegs of 100 pounds each in 1897 to 8,807,473 kegs of 100 pounds each in 1900, and have not been below $2 per keg but a few times since, and prices were reduced $1 per keg at one stroke, nearly 33 per cent, in May, 1900. This should be sufficient proof that corporations have no souls. If they are going to heaven I do not want to be there. Kindly see that the production of 1907 does not exceed the production of 1897 only about 15 per cent. Seven per cent is a fair profit. I am very glad to be able to call your attention to a very important contract made by Mark A. Hanna & Co., of Cleveland, Ohio, with the Pittsburg Steel Company. M. A. Hanna & Co. contracted to sell to the Pittsburg Steel Company 6,000 tons of pig iron per month on a sliding scale. When the cost was $14 per ton the consumer is to pay 7 per cent above the cost, and for every advance of 50 cents per ton in the cost of making up to $17 the payment to be 1 per cent more, but the maximum to be 12 per cent above actual cost. The contract is to run two and a half years, with the privilege of a renewal for two years longer. This seems to be a very equitable contract. I have always claimed 10 per cent to be an excellent profit on cost of goods by a large concern that can market their product with traveling salesmen. The United States Steel Company on manufacturing and producing cost and operating expenses make a profit of 36 per cent. In 1903 on year's business their profit was 31 per cent; in 1904, 25 per cent; in 1905, 33 per cent; in 1906, 34 per cent; in 1907, 35 per cent; and they increased their assets from $1,325,267,583 in 1902 to $1,758,113,013 at the end of December, 1907. Theirs is a class higher product and should make over 7 per cent. profit. Our tariff laws should not allow them to increase their assets and working capital to this extent. I see that Mr. Schwab is a standpatter and does not think them overcapitalized and their profits none too large. They will take all the law allows them. As per statement of United States Steel Corporation December 31, 1903, they show assets of $1,583,845,298 with which they were to commence doing business January 1, 1904. Their statement of December 31, 1904, shows their gross sales and earnings $444,405,430, and their manufacturing and producing cost and operating expenses were only $353,627,315, showing a balance of $90,778,115. Will anyone who knows anything about manufacturing believe that their real actual assets were as above stated and only produced that amount of goods? By the above statement we show you, copied from their own certified statement, that with $134,000,000 of real added capital they did produce $196,504,000 additional goods. We think, beyond question, that any corporation that is not overcapitalized should produce manufactured goods equal to their capitalization. Our own corporation, the Holt-Lyon Company, was incorporated for $20,000 capital nearly eight years ago; over one-half was supposed to be water or future profits capitalized. The president's and my salary is limited to $1,000 per year; we have added some to our assets, but have never been able to pay a dividend, because we have been robbed on our raw material to the amount of over $1,000 per year; our total assets, not including patents, to-day will not inventory over $12,000, and yet we produce over $36,000 worth of goods per annum, three times our working capital. The Maxwell-Briscoe Motor Company, who manufacture automobiles in my home town, Tarrytown, N. Y., are capitalized for $1,500,000, and their production to-day exceeds $3,000,000 per annum, or fully twice their capital. They believe in the seasons, the seed time and the harvest, and that the rose will bloom again, and also in the Maxwell motor. The season for selling automobiles is over, yet they are running to their fullest capacity making up parts to assemble next spring. They use up their surplus capital, go to their bankers and borrow hundreds of thousands of dollars, and pile up stock and are fully ready for the harvest in the spring. Gentlemen of the committee, sweep from under the steel trust the tariff no longer necessary. Put pig iron and iron ore on the free list, reduce the high tariff to the lowest minimum, and make competition close between this country and Europe, and the United States Steel Corporation will treat their employees right. You will hear no more about 150,000 employees being thrown out of work because of dull times after three years of unprecedented prosperity. They will not be trying to sell their production in times of depression. At panic times they will reduce the cost of production and selling price to manufacturers and consumers, who with reasonable concessions will absorb their surplus production, and will use up their cash surplus of $94,730,490 reported December 31, 1907, in keeping labor employed producing goods which are a sure sale, instead of closing furnaces and rolling mills. What is true of the steel trust is nearly equally true with every other monopolized industry that combines all American producers and dictates the selling price. Gentlemen, the remedy rests with you and Congress soon to assemble. In your bill to be prepared and recommended to Congress take thoroughly into your consideration the great mass of consumers and small manufacturers, the 90 out of the 100; the 10 are able to take care of themselves. With an equitable tariff bill passed, in the preparation of which there are other things to be considered besides just the difference in the price of labor, which the great American consumption can keep, as Mr. Carnegie says rolling mills are, constantly employed without changes; so it will be with every other American industry; then confidence will be restored; prices will no longer go skyrocket high, which recessions in business can only restore. Labor will be constantly employed, and we will have the millennium in business which everyone desires. All of the foregoing of which is Respectfully submitted. NELSON LYON, Secretary and Treasurer Holt Lyon Co., HENRY G. McHARG, OF THE VIRGINIA IRON, COAL, AND COKE COMPANY, NEW YORK CITY, ASKS RETENTION OF PRESENT DUTY ON PIG IRON. Hon. SERENO E. PAYNE, NEW YORK, N. Y., November 30, 1908. Chairman, Washington, D. C. MY DEAR SIR: In the published reports of the newspapers of the proceedings before your committee it has seemed to me steel and iron as affected by the existing duties have for the most part been considered as one subject, whereas, to my mind, the latter is upon a very different basis from the former, and it will be my endeavor in as con |