PARAGRAPH 258-HAY.

Mr. DONOVAN. The price stated in the Treasury Department's report merely represents the cost of hay in the foreign country from which it is imported. That has nothing to do with the price here.

Mr. LONGWORTH. It would be the same for both years, then? This is the value of imported hay, in each case.

Mr. HARRISON. How many years have you been connected with the hay and straw business?

Mr. DONOVAN. About 25 years.

Mr. HARRISON. You were in the business at the time the Wilson law was in effect?

Mr. DONOVAN. Yes, sir.

Mr. HARRISON. What was the average price of American hay during the years the Wilson law was in effect and the average price of hay during the three years the Payne law has been in effect?"

Mr. DONOVAN. Well, I have no accurate recollection of just what the difference was in those years. You see, the imports of hay are comparatively small anyway when you come to compare it with the total crop of the United States.

Mr. HARRISON. The value of hay upon the Canadian border is affected by Canadian hay?

Mr. DONOVAN. Yes, sir; but the effect is merely a local matter. Mr. HARRISON. Do you know whether the price of hay has gone up in the past six years as compared with the price during the Wilson law?

Mr. DONOVAN. It has been. There has been a general increase, a tendency to increase, for the past five or six years.

Mr. PAYNE. Like everything else?

Mr. DONOVAN. Well, the price of hay has continued to increase.
Mr. PAYNE. And so has every other commodity, has it not?
Mr. DONOVAN. That is true.

Mr. LONGWORTH. Is it not a fact that the reports of the Treasury Department show the price of hay to have been higher in 1896 than at any time since?

Mr. DONOVAN. I can not answer that question because I have not gone into it. That may have been due to particular conditions existing that year. I can not tell you.

Mr. HARRISON. Will you excuse me for interjecting this statement? Mr. Longworth is entirely correct about the price of hay at the customhouse being higher in 1896 than in 1905 or 1910 or 1911, but it was about the same price, as to unit of value, for 1912. But it seems to me that since only 1 per cent of the hay we consume in the United States is imported it is very improbable that that had very much effect upon the price of hay in our country, except upon the border States in times of stringency.

Mr. DONOVAN. That is the very question I am trying to point out. Mr. HARRISON. It is a curious thing that in 1896 the farmers of this country produced 56,000,000 tons of hay, and in 1911, the year of the crop failure, 47,000,000 tons, and in 1912 70,000,000 tons. Our population is probably a third again as much as in 1896 and they are not using very much more hay. Is that not the reason?

Mr. DONOVAN. I am bringing that point out in my statement.
Mr. HARRISON. I thought the tariff had very little effect upon hay.

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PARAGRAPH 258-HAY.

Mr. FORDNEY. When you get into the hay business I think I can tell you something about it.

Mr. HARRISON. In your border State, Michigan, it did have some effect.

Mr. FORDNEY. Mr. Donovan, you are a merchant, not a producer of hay, aren't you? You are a dealer in hay?

Mr. DONOVAN. I am a buyer and seller of hay, and a dealer in hay. Mr. FORDNEY. Now, you say that with changed conditions, with our surplus hay coming in from Canada, the farmer will be better able to buy hay cheaper, at less cost, to feed on his farm?

Mr. DONOVAN. That is my opinion, from a great many years' expe rience in the hay business.

Mr. FORDNEY. Then, if the farmer lost the market for one of his greatest products to Canada he would be better off?

Mr. DONOVAN. The farmers do not feed much timothy hay now. In fact, we do not have much call for timothy, and very little of it is bought by the Western States.

Mr. FORDNEY. You are mistaken about that. Now, practically all of the hay produced in these United States, outside of New York State and the New England States, is produced in Northern Ohio, northern Indiana, Michigan, Wisconsin, and Minnesota. Those are the only States in the United States where timothy is produced in any appreciable quantity. You spoke about the increased population of the country, and that the production of timothy hay has not kept pace with the increased population. You realize that these States I have mentioned, where timothy hay is grown, are quite thickly populated?

pace

Mr. DONOVAN. Yes.

Mr. FORDNEY. You know that the principal market product of the State of Michigan is hay, don't you?"

Mr. DONOVAN. I know it is one of the largest items of their crop production.

Mr. FORDNEY. Do you know that the difference in freight between Michigan and New York, as compared with hay from Canada, absorbs the tariff? Did you know that?

Mr. DONOVAN. "Well, I can tell you what the freight rates are. The freight rate from Michigan to New York City at the present time is $5.50 a ton.

Mr. FORDNEY. How much a hundred?

Mr. DONOVAN. Twenty-seven and one-half cents a hundred. The freight rate from Chicago to New York is 30 cents per hundred, and the freight rate from Montreal to New York is 18 cents a hundred. Mr. FORDNEY. The Hay Trade Journal is a New York publication, published in New York City, is it not?

Mr. DONOVAN. Yes, sir.

Mr. FORDNEY. When Canadian reciprocity was up for consideration I went exhaustively into the question of the duty on hay. I obtained the price of hay in New York, Brooklyn, Boston, Philadelphia, Pittsburgh, Cleveland, and Buffalo on a certain date, and the price of hay in Montreal, Canada, on the same day. The hay market of New York is Montreal, and the exact difference in the price on those dates. of hay in Montreal, Canada, and in those markets in the United States was the amount of freight. When hay was selling in Boston

PARAGRAPH 258-HAY.

or Buffalo for $18.25 a ton, the price of that hay on that day in Montreal, Canada, was the difference between $18.25 and $8.60 a ton, which was the freight up there.

Mr. HARRISON. So, you want us in New York to pay your freight rates from Michigan through the tariff.

Mr. FORDNEY. You take the Hay Trade Journal, don't you?
Mr. DONOVAN. I see it every week.

Mr. FORDNEY. It is a good authority on hay, isn't it?

Mr. DONOVAN. Oh; not particularly. I would rather take the New York Commercial Bulletin or the New York Journal of Commerce. Mr. FORDNEY. As a man who is interested in the merchant of New York and not the hay raiser, you would rather take it. Of course, I agree with you that that would suit your purpose.

Mr. DONOVAN. I am interested in the trade, not necessarily the New York merchant alone.

The CHAIRMAN. That is all Mr. Donovan.

Mr. FORDNEY. Wait just a minute, please, Mr. Chairman. I will hurry just as fast as I can. You care absolutely nothing about the interests of the producer of hay. You care absolutely nothing about the farmer that is producing the product, if you think you can by getting rid of the duty get hay a little cheaper and make a little more profit out of hay.

Mr. DONOVAN. It has been my experience that the producer is able to take care of himself.

Mr. FORDNEY. It is a question of taking care of yourself?

Mr. DONOVAN. Oh, no.

Mr. FORDNEY. Now, isn't it selfish interest absolutely? You do not care anything about the producer so long as you can make a good big profit.

Mr. DONOVAN. No. I have a much larger interest personally in the hay business conducted in the United States than I have in the hay business conducted in Canada, and if it were not for the present outlook for a steady and dependable supply of timothy hay in the United States I would not advocate the removal of this duty. Now, let me give you one little instance; take the city of Syracuse, and the city of Rochester in the State of New York. Years ago no baled hay was shipped into those cities; hay was furnished all in loose form from the surrounding farms and sold in the public hay market loose, but to-day 75 per cent of the hay consumed in those cities is shipped in bales, and most of it comes from the Western States.

Mr. FORDNEY. It is never shipped loose. Hay is always baled when it is shipped.

Mr. DONOVAN. No; but the hay that is being brought into the State of New York to-day is being brought in from the outside, instead of the surrounding country being able to supply it to the large cities as was formerly done. It is the same way in the West, in large cities such as Detroit, Cleveland, and Chicago. Those cities are consuming vast quantities of hay now, as compared with 10 or 15 years ago.

Mr. FORDNEY. There is a very small amount of hay consumed in the city of Detroit in proportion to the surplus hay that they have in the State. In 1911 they produced nearly $50,000 worth of hay in the State of Michigan.

Mr. DONOVAN. Twenty per cent of it is consumed on the farms.

PARAGRAPH 258-HAY.

Mr. FORDNEY. When the elements are unfavorable to the farmer and the crop is small, the price of hay is high and the duty cuts less figure, but at the present time when we have an extraordinary crop of hay it does cut a very important figure, and hay to-day is a drug on the market in the State of Michigan.

Mr. DONOVAN. No. 1 timothy hay is not a drug on the market. Mr. FORDNEY. Yes it is.

Mr. DONOVAN. I am buying it every day. I bought some yesterday and some the day before.

Mr. FORDNEY. I am right from Michigan and in the business, and I know that hay is a drug on the market right now in every market in the State of Michigan, owing to the exceedingly large crop that was raised this year because the elements were favorable and there was lots of rainfall. Now is the time when we need that duty, and now is the time when the Michigan farmer is clamoring for protection, because now we have very keen competition with Canada hay.

The CHAIRMAN. This is a very interesting agricultural discussion, but we have about 40 other gentlemen who are waiting to be heard. Mr. FORDNEY. Well, this is rather an important matter to the people of the State of Michigan.

Mr. Donovan also filed the following brief:

Payne Tariff Act: Hay, paragraph 258, $4 per ton; straw, paragraph 267, $1.50 per ton. The COMMITTEE ON WAYS AND MEANS,

House of Representatives, Washington, D. C.:

The hay crop of the United States amounts to about 70,000,000 tons according to the last Department of Agriculture figures for the crop of 1912. The 1911 crop, a shortcrop year, was about 50,000,000 tons. The previous five years crops had run something over 60,000,000 tons on the average. The larger production shown for 1912 was due in part to a change in the methods of figuring by the Department of Agriculture. The increase in production of merchantable timothy and clover hay was not as great as these figures for 1912 would indicate.

Of this production about 20 per cent only ever leaves the farm. The New England, Middle Atlantic, and Southern States do not produce any surplus hay, but have to draw on the States of Ohio, Michigan, Indiana, Illinois, and Wisconsin, as well as the States west of the Mississippi River, for their supplies.

Until the great increase of population in the Middle West and the development of large urban centers rivaling in their consumption the cities of Atlantic seaboard, this surplus hay was sufficient to take care of the country's needs without causing violent fluctuations in prices, except in rare instances.

The crops of New York and Pennsylvania are almost entirely consumed within these two States, either on the farms or in the cities within the States. Any small surplus goes to New England which enjoys equality of freight rates with New York City.

Under existing conditions the great consuming markets East and South are dependent on hay that has to be hauled by the railroads 500 to 1,200 miles to the markets. The railroads have raised the classification of hay from sixth class to fifth class on account of its great bulk, and there is no prospect of any relief by a reduction in freight rates.

The eastern Provinces of Canada, the only section of the North American Continent outside of the United States where timothy, clover, and alfalfa can be raised, produce something like 10,000,000 tons of hay per year on the average, only about one-sixth to one-seventh of the United States crop. Before the recent great development of the Canadian Provinces, both east and west, there was a large surplus of hay each year for export to the United States and Europe, but that surplus has been reduced by the introduction of extensive dairy farming and the large European demand for dairy products.

However, there is still some surplus hay in these Provinces that could be brought to our eastern and southern markets by rail and water routes and help reduce the

PARAGRAPH 258-HAY.

much higher prices the eastern and southern consumer is paying for forage as compared with his competitor in the Central West. The western Provinces of Canada do not produce any hay for export and probably will not, as their lands are devoted to grain production and cattle raising and will continue along these lines for years to come; in fact, these Provinces are buying hay now in eastern Canada.

The present duty of $4 per ton on hay was levied not as a revenue measure, but purely for protective purposes at a time when hay ruled at prices one-quarter to onethird less than present figures. This duty produces no revenue of consequence, except in years of extreme scarcity and high prices in the United States-a time when the tax is a severe burden on the consuming public. It has been practically a prohibitive duty, as shown by the record of importations during the past five years, depriving one section of the country of a natural source of supply for a commodity almost as essential to its economic existence as bread is to man.

Hay is used in the East and South for feeding dairy cows and dairy horses. The milk supply of our large cities is a most important factor in our daily existence, and anything that increases its cost to the great bulk of our city population is certainly against the public interest. Horses are still used and will continue to be used for many generations in city transportation by contractors of both public and private construction, retail and wholesale trucking, and all the highly competitive retail trades.

The increase in the cost of food for man has also extended to the animals the human race needs for daily service. The horse is no longer a luxury used by the man of leisure but a commercial necessity, especially among the poorer class of trades. The cost of trucking is a large item in our commercial centers and the increased cost of animal food has had much to do with creating the present conditions. The city of New York alone consumes from 1,200 to 1,500 tons of hay per day, and any increase in the cost of feeding horses in this great congested center of population is a most serious proposition. These horses are used almost exclusively in the commerce of the city. Any increase in these transportation costs is a severe handicap to trade and reacts on the entire country.

The State of New York is spending nearly $150,000,000 enlarging its canals to give the producer low rates on his low-priced bulky commodities which can least afford to pay all-rail transportation. This expenditure redounds to the benefit of the entire country. This canal system will connect with the enlarged system of Canadian canals and the free movement of hay from the St. Lawrence Valley, which is close to our northern frontier, should not be handicapped by a prohibitive tax, for if the hay does not move to the United States from this territory the consumer should not be deprived of the benefit of the lower cost of transportation from this territory, which he has taxed himself to secure.

Furthermore, if the advice of agricultural experts is followed by our American farmers the crop of timothy hay in the United States will tend to decrease from year to year. The continued production of this crop tends to exhaust the soil, putting back no nitrogen, while more scientific methods prevent waste. Such conditions will tend eventually to a larger production of leguminous crops, such as clover and alfalfa, and