PARAGRAPH 650-SURGICAL INSTRUMENTS, ETC. are allowed to import them free of duty there will not be any business left for the American surgical-instrument worker. I am not down on charity; I believe in it, but it is not charity to ruin three or four hundred little dealers. There are little dealers all over this country who have maybe two or three workmen working for them; others have perhaps seventy-five or eighty or a hundred. And it is not true that surgical instruments can not be made in this country if we have as fair a chance as they have abroad. I show you some of our instruments. We can make anything in this country. And talk about cheapness-the hospitals, through competition in this country, can buy almost at wholesale prices. TESTIMONY OF F. H. THOMAS. The witness was duly sworn by the chairman. Mr. THOMAS. Mr. Chairman and gentlemen of the committee, the American Surgical Trade Association, made up of 200 retail dealers of surgical instruments and allied lines, wish to protest against the duty-free entry of surgical instruments, apparatus, etc., by hospitals, for the following reasons: First. There is employed in our industry, invested in plants and merchandise, approximately $4,000,000. There is employed in transactions approximately $10,000,000, involving about 20,000 people as employers and employees. I refer to employers here because our shops, as a rule, are very small and very often a man may be his own employer; that is, there may be only one or two people engaged in a small shop in the smaller towns. The industry which we represent has been built up only under the greatest possible sacrifice on the part of those engaged in this industry and only, in a substantial way, during the past 10 or 15 years. Previous to this time our industry was of slight assistance to the surgeon and physician in constructing the newer devices and assisting in preventive medicine and, although we do not lay great claim to the part that our industry has played in the newer surgical instruments and newer medicines, we do claim that the American doctor and hospital would have been greatly handicapped without the assistance that our industry has rendered. I would like to say that perhaps 333 per cent of our dealers maintain small shops for the manufacture of newer instruments and for orthopedic apparatus which deals largely with chronic cases, which can only be treated on the ground under the direction of the surgeon, with the assistance of the mechanic having the apparatus in charge. The removal of the tariff for these institutions would greatly reduce the efficiency, if not obliterate it, which in turn would act to the disadvantage of the institutions asking for the removal of the duty and particularly to the ninety millions of others, all of whom must, in a measure, be interested in preventive medicine. Second. It has been with great difficulty, even with the protection accorded our industry, that business and considerable efficiency have been attained in this country, as the manufacturing in Germany has been done, for the most part, by the individual family, employing almost all its members, and over long periods of hours each day, PARAGRAPH 650-SURGICAL INSTRUMENTS, ETC. all of which is prohibitive in this enlightened country. The German mechanic receives not more than one-half the daily wage received by American mechanics and the free entry of instruments would certainly be far-reaching in its effects on the general efficiency, not only to the hospitals but to the community at large who buy more and more apparatus pertaining to our industry. Third. We estimate that at least 60 per cent of the surgical instruments and allied articles in our line are at the present time imported, and this small percentage covers only over a short period of years as it is well within the experience of the younger men in our industry that 80 to 90 per cent of our goods have been imported. Fourth. The adoption of the clause permitting hospitals to import duty free is open, in our judgment, to great abuse, as we find upon referring to the census report of 1904 that they list only 4,292 hospitals as being of a charitable or public nature, whereas the recent report of the principal Gazetteer gives the great total as 8,176, making nearly 50 per cent of the hospitals of a private nature, run for profit only. Again, it must be admitted by the petitioners for this clause, that only a small percentage of the service rendered by 4,292 hospitals is free. It must be remembered also that the endowments and subscriptions made to these institutions represented by the petitioners have been given by good Americans, under our American system, and we do not believe that the benefactors of these institutions would seek to have class legislation for institutions that should be wholly democratic. That is to say, if you will glance aside for a moment, it is very hard to compile in some instances, but the revenue from pay patients, I should say, is equal to the expenditures of the hospitals, and probably 50 per cent of their revenue is derived from pay patients. That does not, on the other hand, defeat the claim of the petitioners, perhaps, but it does go to show that a good deal of the hospital work now done is done at a profit, and the hospitals are the ones who clamor for this privilege, and I do not see how any line of demarcation can be drawn. It does not go to show that great abuse would not result from this clause if the bars are let down to all the hospitals that do any charity work. Fifth. It must be of immense importance to the Federal Government to know that the available stock of surgical instruments and allied lines would be greatly jeopardized in case of war should any class legislation permit the weakening of the present American industry in this line. We venture to state that not 50 per cent of the present stocks would be maintained under the duty-free entry to hospitals, as a large percentage of our business is done directly with hospitals. It would also mean, in our judgment, that the German houses would put representatives into our fields calling directly on the hospital trade and that the efficiency now maintained in our industry would be reduced to the minimum and many houses would absolutely close their doors on account of this new proposed arrange ment. Sixth. We are led to believe that the duty on our goods will be reduced from 45 per cent ad valorem to 25 per cent ad valorem, and, PARAGRAPH 650-SURGICAL INSTRUMENTS, ETC. should this be the case, we then think, with this marked reduction of almost 50 per cent, that there is less excuse than there ever has been for class legislation. Seventh. In view of the fact that practically 50 per cent of the hospitals in this country are run for profit (and profit only) all of whom would be eligible, under the proposed change, to import free of duty by the mere maintenance of a single free bed or the subscriptions of a few friends, however small, to the work of any particular private institution, there would be an opportunity for one of the worst problems the customs officials have ever had to deal with. In view of the proposed reduction, which is liberal indeed, and the fact that American institutions are maintained by direct taxation as well as by American contributed money, we do not believe your honorable body will countenance class legislation. And if I have time I should like to cite two or three instances. The CHAIRMAN. Your time is just up, but you may have a few minutes. Mr. THOMAS. The petitioner referred to salvarsan, and the layman should not be ignorant about this. A false modesty has been urged in this matter. This is a specific for syphilis. As a matter of fact probably not 1 per cent of the institutions of this country, of the hospitals, except a few private hospitals, will accept these syphilitic cases for treatment. In Boston I know of only one outside of those of a public nature, and that is really a private hospital, but it can be conceded that we are willing to give every advantage of the doubt in this case. It has not been long ago that a gentleman, now present in this room, told me that an agreement had been made between doctors whereby they would only administer this treatment at a price of $25. If it is a fact that the worst menace this world has can not be treated in the hospitals, as they are at present organized, then there is some excuse, perhaps, for our contention that there would be abuses if they are not open to do the greatest work that hospitals have ever had to do; then we feel there is some reason for contending that perhaps they are not entitled to this great privilege, this class legislation. There is another item, and that is blood-pressure apparatus, which has been absolutely promoted in this country by the dealer, and for that reason doctors have now come to recognize that blood pressure is as important as the clinical thermometer, and the promotion of blood-pressure apparatus has been done absolutely by the dealers. I do not say that the intelligence of the doctors has not approved that, but, as a matter of fact, we would have been 10 years coming to blood pressure, while through the efforts of the dealers we have come there in a matter of 12 or 15 months, and I could repeat endless instances of that sort. We have nothing against charity; we have nothing against the hospital; we believe it is a great institution, and nothing should be done to hamper it, but if the granting of this privilege will hamper the industries built up around it to the extent that it will give inefficiency for the great mass of people who employ us for preventive measures, and also handicap the hospitals themselves, because they can not get the supplies, and 80 per cent, I venture to say, of the hospitals will not be able to import anyhow. They can not antici PARAGRAPH 650-SURGICAL INSTRUMENTS, ETC. pate their needs. It is the rich institutions, like St. Luke's, who can buy $25,000 worth of scientific apparatus, who can avail themselves of this privilege, but the rank and file, even the municipal hospitals, can not, to a great extent, avail themselves of this privilege. TESTIMONY OF DR. GEORGE F. CLOVER, NEW YORK, N. Y. The witness was duly sworn by the chairman. Dr. CLOVER. Mr. Chairman and gentlemen of the committee, I appear in behalf of a subcommittee of the American Hospital Association, a body comprising 1,100 members, representing 600 of the leading hospitals of the country. We petition that section 650 of the tariff act be so amended as to include among the institutions authorized to import instruments and utensils and medical preparations, including Roentgen or X-ray plates, free of duty hospitals rendering medical and surgical aid free of charge. In the list of institutions now permitted to import their instruments free of duty are those established for educational and scientific purposes. I submit, gentlemen, that the hospitals which we represent are educational, are scientific, and are also charitable institutions. They are educational because they maintain training schools for the training of nurses, who are taught to become nurses of the country. These training schools are recognized by the departments of education of their respective States, and are brought under the rules and regulations of those departments. They are educational because they receive medical students from the various medical colleges for educational work, and it is in these hospitals that the medical students receive the practical part of their education. Medical schools of the country are now taking the ground that they will not graduate their medical students unless they have a certain term of service in our hospitals. It is within the walls of our hospitals that physicians and surgeons get their knowledge, their expert knowledge, which make them the prominent physicians and surgeons of the country. Our hospitals are scientific because within the wards of the hospitals observations are made and classified which make up the medical and surgical data and knowledge of the country. They are scientific because within their laboratories diseases are investigated, and the prevention and cure for disease is often found. Our Government has encouraged science, it has encouraged education, it has encouraged art, it has encouraged literature; but to the greatest of these charityis given no such consideration. We ask that instruments be placed on the free list, for the reason. that a great many of the instruments used in hospital surgery are not made at all here. Other instruments are not made so good as those which we get from abroad. Other instruments are of very good quality, those made of the softer metals, which we do use and which we shall continue to use. are not made here at all. are not nearly as perfect. Of the scientific apparatus, a great many PARAGRAPH 650-SURGICAL INSTRUMENTS, ETC. best instruments and the best scientific apparatus where life and death is concerned, refuse to use many of the instruments made in this country. As an evidence of the scientific work of our institution, I submit a volume of surgical and medical reports of the hospital which I represent, in New York-St. Luke's Hospital. Such reports add a great deal to the scientific knowledge of the country. Mr. JAMES. What effect would this have on the revenue? Dr. CLOVER. I think very small, sir. The surgical instruments manufactured in this country are below $1,000,000-somewhat over $500,000. The scientific instruments and the surgical instruments combined, I understand, amount to less than $6,000,000. Mr. JAMES. How would he distinguish between Mr. HILL. Will you, for the benefit of the committee, try and distinguish between the classes of hospitals and educational institutions that now have the privilege of free admission, and those that do not have? Is it not practically down to the point where those doing business for profit do not have the privilege, and those which are purely educational do have it? Dr. CLOVER. I am making my plea sir, here for charity; not for institutions that exist for the purpose of making profit. There are in this country about 6,000 hospitals; 3,000 of that number may be classified as public or semipublic hospitals. The best work done in the country is not done in what we may style public hospitals, but the voluntary hospital sometimes called the private hospital, which is of a very high order of institution. That does the educational and scientific work, and a large proportion of its work is free work. Medicine and surgery could not have reached the state of perfection they have reached without these hospitals, and we could not hope for very much progress in the future if these institutions did not exist and were not encouraged. Our hospitals are becoming more educational and more and more scientific. We make our plea, Mr. Chairman, not in our own interest, or even in the interests of our hospitals, but we make it in the name of charity, for the benefit of the poor people of the country. Mr. HILL. Doesn't St. Luke's now have this free? Dr. CLOVER. No, sir. Mr. HILL. Why shouldn't it? Dr. CLOVER. I think possibly by a subterfuge we could get our implements in free of duty. We receive, for instance, a certain number of students from Columbia University for educational purposes, and I might make the plea that we were attached to Columbia University. We have no corporate connection with Columbia University. I do not believe in subterfuges, and I do not believe most of the hospitals believe in subterfuges. I know of no hospitals except those that are identified with educational institutions, such possibly as Johns Hopkins, at Baltimore, that do get their implements and instruments in free of duty. Mr. JAMES. You want this right for hospitals that make no charge for services? Dr. CLOVER. We make this plea for hospitals that render free care and treatment to the public. Hospitals do-these volunteer hospitals do-make some charge to people who can afford to pay. In New York |