Mr. KING. I believe that you ought to raise it on luxuries; put

more on.

Mr. UNDERWOOD. You believe that we should put a prohibitive duty on iron and steel, and things of that kind, and raise the revenue on coffee and tea?

Mr. KING. They are not luxuries, they are necessities.

Mr. UNDERWOOD. What are luxuries?

Mr. KING. I would say silks, jewelry, diamonds, wines, tobaccos— anything in the line of luxuries that a man could get along without; that he does not need.

Mr. UNDERWOOD. As a matter of fact, of course, on those items that you have named we are receiving practically all of the duty that we can. We can not raise the price on tobacco, but on silks we might raise more revenue by reducing the duty some, but the silk men say that they ought to have a prohibitive tariff there, too. But as a matter of fact it looks as if we had to either lower some of these duties to raise enough revenue to support the Government or else take in some new items like coffee and tea that have never been taxed before. Now, as a business proposition-and you come before this committee to advise us, and we are glad to have your advice-I would like to know whether or not the people in the iron and steel business are not willing under the circumstances, when the Government is needing money, to make a reasonable reduction as long as they have a fair chance to control the market?

Mr. KING. I say that we are able, under an intelligent and protective tariff, to pay our men such wages as I would like to pay them. I do not believe that they would object to a tax on coffee and tea and sugar and what not; that they could afford it.

Mr. BOUTELL. You say: "Intelligent and protective tariff." Those terms are synonymous, are they not?

Mr. KING. With me.

Mr. COCKRAN. Undoubtedly. [Laughter.]

Mr. COCKRAN. You have several other schedules to discuss, have you not?

Mr. KING. Quite a number; yes, sir.

Mr. COCKRAN. Is there any other one, I would like to ask, on which you propose an increase in the existing rate excepting the one on steel bars?

Mr. KING. I think not. I think they are all in line of reductions or else retaining the present tariff.

Mr. COCKRAN. Upon this particular schedule you wish to leave the rates as they are?

Mr. KING. Yes; on beams, girders, and plates.

Mr. COCKRAN. What is called structural steel?

Mr. KING. Yes. There are two schedules, paragraphs 125 and 126, one being for structural materials and the other plates. I have grouped them together, and the duty is the same on both.

Mr. COCKRAN. Are there any others upon which you wish a reduction?

Mr. KING. That is all I desire to talk about.

Mr. COCKRAN. And upon the balance of the schedules, you go into reductions?

Mr. KING. Others are coming to represent them. I am only speaking for the material that we manufacture. There are a great many

other lines that we do not go into. Those gentlemen are here and ready to be heard.

Mr. COCKRAN. I thought we were going to get the benefit of your views upon the reductions?

Mr. KING. NO; I do not think we ought to speak of that if we do not manufacture them.

Mr. COCKRAN. That is, you do not want any reductions on anything that you produce?

Mr. KING. No, sir. I ask for an advance of one-tenth of a cent on bars, and that the present schedule on plates and structural materials should remain as it is.

Mr. COCKRAN. Oh, I see. When you were talking about your embarrassment at the beginning, you were referring to the order of presentation and not to the subject of presentation.

Mr. KING. I felt embarrassment that I should start off before this committee by asking an advance.

Mr. COCKRAN. Now, as to the condition of this industry. At present you can produce steel as cheap as anywhere in the world?

Mr. KING. At the present time we can?

Mr. COCKRAN. Yes.

Mr. KING. No, sir; that is not a fact.

Mr. COCKRAN. Where can they produce it cheaper than you?
Mr. KING. I would say in England, Belgium, and Germany.

Mr. COCKRAN. What particular articles of steel are there that can be produced cheaper, and what is the difference in the rates?

Mr. KING. I speak more particularly of what we come in competition with-bars, plates, and structural material.

Mr. COCKRAN. Well, take the steel bars. You are selling them at what rate?

Mr. KING. To-day, at the market price, between $1.35 and $1.40 per hundred pounds.

Mr. COCKRAN. How much per ton?

Mr. KING. At $1.40 per hundred would be $28 a net ton, and $1.35 a hundred would be $27 a net ton; that is, $27 and $28.

Mr. COCKRAN. What is their cost of production?

Mr. KING. The way we are running now, I believe it is costing all we get for them, Mr. Cockran.

Mr. COCKRAN. Then it costs $27 to $28 a ton to produce.

Mr. KING. That is what I believe to-day, and running under the conditions that we are.

Mr. COCKRAN. At what rate did you sell this production of yours. in Canada?

Mr. KING. At practically the same price.

Mr. COCKRAN. What did it cost you to produce?

Mr. KING. Just as much as the domestic product.

Mr. COCKRAN. How are you able to lay those down in Canada and sell them, and pay duty, when the cost of production at home is $28? Mr. KING. We do not pay the duty. The consumer over there pays it.

Mr. COCKRAN. At what rate were those sold in Canada?

Mr. KING. They were sold within something like a dollar a ton of the domestic price.

Mr. COCKRAN. And the duty was much higher; the duty was how much, in Canada?

Mr. KING. I really do not know the rate of duty, excepting that we paid more duty than England. I know that England has a preferential duty.

Mr. COCKRAN. What was the return to you for that proportion of your product that you sold in Canada?

Mr. KING. Practically as much as we sold it for in this country. Mr. COCKRAN. Then, at that rate, it must have sold in Canada for $33 or $34 a ton?

Mr. KING. Certainly; higher there on account of the duty they have to pay.

Mr. COCKRAN. Was English steel selling at that rate also?

Mr. KING. We can not sell unless we sell in competition with them. Mr. COCKRAN. So that the English steel was selling in Canada at the rate of $34 a ton to compete with you?

Mr. KING. We sell practically at the same price. Unless we meet the conditions over there we can not sell.

Mr. COCKRAN. And you can do that. If you can compete with them in Canada under a disadvantage, why can you not compete with them here, where you have the advantage of transportation, even at less than the present rates of duty?

Mr. KING. Well, they bring that a great distance, and, as I said before, there are some disadvantages in buying abroad on account of the fact of having to pay in advance and taking the risk on quality. They would rather pay us a little more money and have recourse on us if it is not right.

Mr. COCKRAN. But, Mr. King, surely you must see that in selling in Canada you have to pay the cost of transportation to Canada, and you have to pay the duty.

Mr. KING. Understand, we do not have to pay the duty; the buyer pays that.

Mr. COCKRAN. The duty is levied upon that product?

Mr. KING. Yes.

Mr. COCKRAN. And that duty is higher than the duty levied upon a similar product coming from England?

Mr. KING. Yes, sir.

Mr. COCKRAN. It is 33 per cent higher, is it not?

Mr. KING. Yes, sir.

Mr. COCKRAN. And yet, with those disadvantages, you are able to maintain successful competition in Canada?

Mr. KING. Not at all times we can not, Mr. Cockran.

Mr. COCKRAN. Of course there are exceptions, but you can, generally speaking?

Mr. KING. Yes, sir.

Mr. COCKRAN. If you maintain competition with a foreign producer in Canada under those disadvantageous conditions, why can you not maintain competition near at home where you have the advantage in transportation to the market, and where there is no differential duty levied against you as there is in Canada?

Mr. KING. The duty in Canada is about as high as ours in this country that is, the American duty.

Mr. COCKRAN. I understand that, and that is precisely what gives the point to my questions. You are able to maintain competition in Canada under the disadvantages of a differential tariff, a discriminating tariff that discriminates against you, amounting to one-third

of the total amount of tax that is levied there, and I ask why you can not maintain competition in this country where there is no discrimination against you, and where you have the advantage of being relieved from the cost of transportation altogether?

Mr. KING. Well, Mr. Cockran, it is a fact that we do sell cheaper in Canada, and I think all over the world, as a rule, than we do at home, for the purpose of keeping our mills going. There are times when it is an advantage to keep our mills going and our workingmen employed.

Mr. COCKRAN. Did you not say a moment ago that you got exactly the same rates?

Mr. KING. Not exactly, but practically.

Mr. COCKRAN. Yes; the difference is between "practically" and exactly." Would you just define that? What do you mean by "practically the same" and "exactly the same," if the meaning is not identical?

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Mr. KING. I mean that they have in Canada what is called a dumping clause" to prevent material being sold in there. We can not declare below 5 per cent below the prices current in this country; in other words, they take our domestic price, and we can not declare for a duty there at less than 5 per cent, or else the customer is subject to a large penalty for dumping. That 5 per cent, I think, would represent about the difference-I am trying to get at practically what I told you; that is, as to what I meant by practical "—that would represent the difference between the Canadian price and ours. Mr. COCKRAN. That 5 per cent would not even equalize the discrimination in the tariff, would it?

Mr. KING. To that extent, it would.

Mr. COCKRAN. It would only reduce it, it would not extinguish it. Now, to return to my question. In Canada you are able to meet competition successfully under conditions which impose upon you a discriminating tariff. In this country, where you have no such disadvantage, and where you are not required to transport or bring your goods across the sea, why can you not maintain competition equally well, and even better?

Mr. KING. Well, we can not do it.

Mr. COCKRAN. You mean to say that you do not want to do it, do you not?

Mr. KING. We can not do it. I would like to say to the committee that in my opinion it would never be possible in the United States to manufacture as cheaply as those foreign countries do for two reasons, one being the great distance and the great cost of transporting materials to the mill from the largely scattered places that we have to bring it; for instance, we bring our ore 1,100 miles. I do not believe that it would ever be possible for that reason, for the large freight cost in assembling those materials, to compete against the English and the Belgians, who have the material right around them. They have the coal, the ore, and the limestone right within a stone's throw, and they are relieved of that heavy freight. I have gone to the trouble to bring here the cost of freight per ton in Pittsburg on the materials necessary to make a ton of finished material. Mr. UNDERWOOD. Assembling the raw material?

Mr. KING. Yes.

Mr. UNDERWOOD. How much does it amount to?

Mr. KING. It amounts to $3.65.

Mr. COCKRAN. In spite of all these disadvantages you actually have sold it and do sell it in competition with England and Canada. If you are able to do it there, I ask you why you can not do it here? Mr. KING. We can not, because the amount sold there is so small. Mr. COCKRAN. But that would increase the difficulty in selling it over there.

Mr. KING. I do not think it would.

Mr. COCKRAN. Do you mean to tell us that it is easier to dispose of a large amount than a smaller amount?

Mr. KING. I mean if you sell a small volume at a lower price it does not affect you so much as if you had sold a larger volume at a small price.

Mr. COCKRAN. You have stated that you sold practically all at the same price. The difference was simply 5 per cent, and that is your explanation. Surely it is not difficult to see that is your position, unless you can make a further explanation.

Mr. KING. I can not add anything different.

Mr. COCKRAN. Then you can give us no reason beyond that why competition could not be maintained in this country against foreign producers as successfully as it has been in Canada.

Mr. KING. I would not want it to be put down just that way.

Mr. COCKRAN. We do not want it to be put down unless it is the fact. Will you give us an additional explanation?

Mr. KING. I come here after a long experience in the steel business, and I want to state that I believe in a protective duty for America, principally on account of the fact that it increases the wages of the workmen of America. I know that we can not successfully compete with them on account of the handicap of high wages, large freight cost, etc. We can not compete with the world in this home market unless we are protected.

Mr. COCKRAN. You are not testifying as to your experience. You are testifying as to your belief. We are trying to get at the facts on which you base your belief. This act must be framed and passed by Congress, and what the committee wants is the facts and not the belief of a witness.

Mr. KING. Yes, sir.

Mr. COCKRAN. For that reason I ask if you can recall any facts in relation to the production of steel beyond what you have told us to explain why competition can not be maintained by producers in this country of an article which you say you market successfully in Canada under the present tariff.

Mr. KING. We sell very little in Canada.

Mr. COCKRAN. I understand that you say what you have sold was at a profit, and if you have sold that much at a profit you could sell twice as much and also sell it at a profit. So far as your testimony goes you think there is no reason outside of your belief why that is not practicable?

Mr. KING. No.

Mr. COCKRAN. You can give us no reason why competition can not be maintained here against all comers as well as in Canada in the production and sale of this article?

Mr. KING. I do not know that I have anything more to say in addition to what I have already said.