20 per cent., and thcte for public exhibition were left on the free list.
THE FUEE LIST.
The free list which passed the House has been agreed to in conference
with very slight changes. Bolting cloths and some of the essential oils have
been added to the list. The provision of the House relating to the bringing
in of wearing apparel and personal effects by tourists was agreed to. This
provision is inserted to break up the abuses arising from the practice of
tourists returning from Europe bringing with them wearing apparel in large
quantities, clothing, and other articles of personal property which are duti-
able under our laws.
This abuse has grown to such an extent that a recent investigation by
the Treasury. Department disclosed the fact that about $40,000,000 of dutiable
goods, classified as wearing apparel and personal effects, escaped duty during
the past year under the operation of existing statutes. It is estimated by
Treasury officials that this will add at least $10,000,000 to. the revenues of
the Government, and will be just to dealers in this country, who pay duties
on the articles they import for sale to our own people.
Mr. CUMMINGS. Will the gentleman from Maine allow me to ask him
ft question? What was done with the duty on precious stones? I refer par-
ticularly to diamonds.
Mr. DINGLEY. The duty is placed at 10 per cent. I should have been
very glad, for myself, to have put even a very much heavier duty on articles
of that kind; but it was the unanimous opinion of all the present administra-
tive officers, as it was the opinion of the administrative officers under the
last Administration, that whenever the duty on diamonds is placed above
10 per cent, ad valorem, then they are smuggled, and instead of obtaining
revenue from them we fail to obtain revenue. The officers presented statis-
tics clearly establishing the fact that the largest revenue from diamonds had
been obtained when the duty was placed at 10 per cent.; that this was not
the smuggling point; but that when it went above that, then smuggling went
on by wholesale.
RECIPROCITY.
I am reminded, Mr. Speaker, that I have omitted to give a statement of
the reciprocity features of the bill as agreed to, which I had intended. In
substance, the agreement of the conferees combines the reciprocity clause of
the House and that incorporated in the bill by the Senate, with certain
amendments, which substantially unite the two plans, so that both may be
made available if desired. One of the amendments which has been adopted
ta vital in its effect.
The Senate provided that the President might enter into commercial
treaties with foreign countries, and when ratified by the Senate they should
become binding on the country. The House conferees insisted upon an
amendment that they should not become binding until ratified by Congress.
In other words, the House conferees maintained that the House should
approve as well as the Senate before any such commercial treaties should
take effect, and the Senate conferees conceded the point. (Applause.) Other-
wise, in general, the Senate as well as the House plans have been adopted
with certain modifications, so that both plans if desirable may be used in
securing acceptable commercial arrangements.
10
Mr. OVERSTREET. How does this compare -with the provision of the
law of 1890?
RECIPROCITY FEATURES EXPLAINED.
Mr. DINGLEY. The provision of the law of 1890 covered sugar and
hides, which have been omitted because they have been made dutiable. We
have added to coffee and tea, tonka beans and vanilla beans, which are on
the free list, as articles to be used by the President under the provision of
the act of 1890, and we have included certain dutiable articles that may be
used. Under the Senate provision there would be the delay of obtaining the
two-thirds vote of the Senate after the President had made the arrangement,
and then the delay in securing the approval of the House of Representa-
tives; and it was thought desirable that the House provision, which put in
the President's hands the important powers of using certain articles without
going to Congress, should also be adopted. The conferees of both the House
and Senate have unanimously agreed on the joint plans, which combine all
that appears to be practicable in both provisions.
Mr. OVERSTREET. Is it regarded as a broader measure than that of
1890?
Mr. DINGLEY. Oh, very much broader.
INTERNAL REVENUE PROVISIONS.
Mr. Speaker, I come now to the internal revenue features of the bill
which the Senate has added. The Senate increased the internal revenue tax
on cigarettes, and this has been agreed to by the House with an amendment
covering cigarettes wrapped in tobacco, and amendments to facilitate the
collection of the tax. The Senate provisions changing the law so as to
allow no rebate on the tax on beer has been agreed to. Under the present
law, as gentlemen know, a rebate of over 7 cents is permitted, so that the
tax of $1 provided by law amounts only to about 92 cents. The amendment
fixes the tax at a full dollar, and will add about $2,000,000 to the revenue of
the Government from this source.
The Senate provision for a stamp tax upon the issue and transfer of s
certificates, bonds, etc., is omitted from the bill, for the reason that on careful
investigation it has been found that the class of persons whom it was origi-
nally supposed we should be able to reach cannot be reached, and therefore
whatever small amount of revenue might be received as the result of this tax
would be collected from men who are doing legitimate business upon a small
scale. It was found that it would be almost impossible to execute the Jaw
so far as it endeavored to reach such persons. Then, again, it was found
not only that it would be very difficult of enforcement, but that the amount
of revenue to be obtained from it would be exceedingly small, and it was
thought, at least in the present tariff bill, without opportunity to examine
thoroughly in reference to legislation of that character, that it would b&
unwise to hastily enter upon it without careful investigation under all the
circumstances. There was also some question as to the constitutionality of
certain provisions in the scheme.
The administrative sections which were added to the bill by the Senate,
and which have been agreed to with certain amendments by the House con-
ferees, are almost exactly the same as two sections that were in 'the adminis-
11
trative bill passed by the House in the Fifty-fourth Congress, which the
House therefore had previously accepted.
THE RETROSPECTIVE CLAUSE.
Mr. TERRY. What became of the retroactive clause of the bill?
Mr. DINGLEY. I regret to say that the Senate declined to concur In
that, and made this decision known within a few weeks after the bill passed
the House in March. I think it was exceedingly unfortunate that the action
of the House with reference to that retrospective clause was not concurred in;
or at least, if not concurred in finally, that it was not left to stand until the
present time. If that had been done, it would have saved more than $25,000,-
000 of revenue to the country.
The wisdom of the action of the House in that matter seems to me to have
been clearly established by subsequent events. Since the 1st of March there
have been imported into this country, in anticipation of an Increase of duty
on articles on which we have raised revenue, goods which, if they had been
imported as required for consumption during the fiscal year upon which we
have just entered, would have yielded not far from $40,000,000 of revenue. Of
course there are no means of avoiding these difficulties, unless by some such
retroactive provision as was contained in the bill as it passed the House.
Mr. OLMSTED. I would like to ask, with reference to the action of
conferees on the bill with regard to rails made wholly or in part frcm im-
ported iron, whether any provision is made for a drawback?
Mr. DINGLEY. The old provision with reference to drawback continues
In force. There is no modification. In other words, the administrative officers
cannot see a method of determining whether the exported article is made of
an imported product or not except under existing regulations, and a draw-
back provision of the character desired by some is, in the opinion of these
officers, susceptible of very great fraud. I may state to the gentleman from
Pennsylvania, however, that this matter was not in conference at all.
TWO HUNDRED AND TWENTY-FIVE MILLIONS REVENUE.
Setting aside the effect of the anticipatory importations, there is no doubt
that the bill as agreed to by the conferees will yield not less than two hun-
dred and twenty-five millions per annum, an increase of at least $75,000,000-
above the present law. The present law in the fiscal year 1896 yielded $160,-
000,000 of revenue, but that revenue was increased abnormally by large im-
portations of manufactures of wool. In the previous year the present tariff
had yielded a revenue of about $144,000,000. In the last fiscal year, ended
the 30th of June, if it had not been for the fact that a new tariff, imposing
to a certain extent higher duties, was under consideration, the revenue under
the present law would not have exceeded $140,000,0000.
As it is, the revenue from customs under the present law in the last
fiscal year was about $174,000,000. But $32,000,000 of that at least was caused
by anticipatory importations and withdrawals from bond; for if the revenue
from customs had continued for the last four months of the last fiscal year
as it had continued during the eight months previous, the revenue would not
have exceeded $140,000,000. This makes the average annual revenue-pro-
ducing quality of the present Wilson tariff about $150,000,000.
12
LOSS BY ANTICIPATORY IMPORTATIONS.
As I have already stated, it is probable that the Treasury has lost by
anticipatory importations of wool, sugar, manufactures of wool, and certain
other articles on which the duty has been increased, at least $40,000,000.
Now, this $40,000,000 must be deducted from this $225,000,000 which this bill
will yield. That leaves $185,000,000. So that this bill, including the inter-
nal revenue provision, notwithstanding the loss of $40,000,000 by anticipatory
importations, is estimated by the members of the Senate Finance Committee
as likely to yield $185,000,000 during the current fiscal year. The Treasury
officials, however, put the revenue from the proposed tariff for the present
year at one hundred and seventy-seven millions eight millions less. It
must be borne in mind also that thirty-two millions paid into the Treasury
In the last four months on anticipatory importations and withdrawals, and
credited to the last fiscal year, really belong to the revenue for the present
fiscal year.
Now, it is estimated that the revenue from all other sources ordinary
Internal revenue tax and miscellaneous sources outside of postal revenue
will be in the neighborhood of $180,000,000, probably $185,000,000. Now, these
two estimates give us a revenue in the neighborhood of $370,000,000, or, ac-
cepting the Treasury estimate, $362,000,000. The expenditures of the Govern-
ment during the last fiscal year, aside from the postal expenditures paid by
postal revenues, were $365,000,000. But there were undoubtedly some ex-
penditures paid after the 1st of July that belong to the last fiscal year. So
that the expenditures may be placed at $370,000,000 per annum.
ENOUGH REVENUE INSURED.
Now, if the Senate Finance Committee have correctly estimated the an-
ticipatory importations at $40,000,000 loss only, then there would be enough
revenue, notwithstanding the loss of $40,000,000 during the current fiscal year,
to meet the expenditures. But if from any cause the effect of these antici-
patory importations shall prove to be greater than estimated, then unques-
tionably there can be taken with safety from the cash in the Treasury, ob-
tained by the issue of bonds under the last Administration, at least $30,000,-
000; so that, with the cash in the Treasury and with the revenue that will
come from this bill, there is no doubt that the expenditures of the Govern-
ment for the current fiscal year will be fully met. And after this fiscal year,
when this bill shall have become law, the revenue will be increased to that
point where every expenditure will be met, and there will be a surplus left
(applause on the Republican side) with which can be resumed the reduc-
tion of the principal of the public debt. (Loud applause on the Republi-
can side.)
LOW GRADE SUGARS.
Mr. LACEY. I should like to ask the gentleman a question in refer-
ence to sugar. I notice the compromise increases the rate on low grades
of sugar.
Mr. DINGLEY. The lowest grades are less than in the original House
bill up to 84 degrees. Eighty-five-degree sugar is the same, and from that
point the new rates are more at 96 degrees, five and a half hundredth*
13
more; and at 100 degrees, seven and a half hundredths more; and on refined
sugar, seven and a balf hundredths more.
Mr. LACEY. What quantity how many millions of pounds or how
many tons have been imported?
Mr. DINGLBY. If you refer to low grades of sugar, below 84 degrees,
then there is scarcely 2 per cent, of such sugar imported into this country;
certainly not over 4 per cent, under 84 degrees test.
Mr. LACEY. Then this change does not give any premium to those who
have imported this kind of sugar pending the contest between the two
Houses?
Mr. DINGLEY. Not at all. As a matter of fact, these low grades of
sugar cannot be used in making hard sugars, and the importations of them
are veiy small.
THE NET RESULT AS TO SUGAR.
Mr. COOPER, of Wisconsin. I should like to ask the gentleman what the
ret result is as to sugar. Does the rate agreed upon by the conferees lessen
or increase the rate of protection, the amount of protection given to the sugar
trust by the original House b'ill?
Mr. DINGLEY. The differential as between raw and refined sugars is
precisely the same in this bill on 100-degree sugar as when it passed the
House. Under the bill as it passed the House a duty of 1 cent was placed
upon sugar polarizing 75 degrees, and an increase in duty of three one-hun-
dredths of a cent for each degree running up to 100. Now, that left a duty
of 1.75 dn raw sugar of full purity
Mr. COOPER, of Wisconsin. What do you mean by that 100 degrees?
Mr. DINGLEY. One hundred degrees is full purity, which is, of course,
what refined sugar is. That left a duty on raw sugars of full purity, of 100
degrees, of one and seventy-five one-hundreclths of a cent.
Mr. JOHNSON, of Indiana. But the duty on raw sugar in this confer-
ence report is higher than in the bill as it left the House?
Mr. DINGLEY. Certainly. It has been raised from 84 degrees up, so that
the increase at 100 degrees amounts to seven and one-half one-hundredths
of 1 cent per pound in order to give that additional encouragement to beet-
sugar production.
REFINED SUGAR UNDER THE DINGLEY BILL.
Mr. JOHNSON, of Indiana. What is the duty placed upon refined sugar
in this bill as compared with the existing rate?
Mr. DINGLEY. The duty on refined sugar is 40 per cent on both raw
and refined, with one-eighth of 1 cent additional on refined in the present
Wilson tariff, which amounts to 1.113 cents per hundred pounds, and the
duty on raw sugar of 100 degrees purity is 89.48, leaving a differential of
4.82. And in this bill the duty is 1.95 on refined sugar and 1.82% on raw
?urar of 100 degrees test, .making a differential of 12% cents per hundred
at that point, with a slight increase as the polariscopic test goes down to
cover the increased cost of refining and the loss.
Mr. JOHNSON, of Indiana. Therefore there is a marked reduction in
duty on refined sugars.
Mr. DINGLEY. Certainly; an average of 40 per cent.
14
Mr. SIMPSON, of Kansas. T desire to ask the gentleman a question.
While this conference agreement does not increase the duty on refined sugar,
does it not have the effect of decreasing the duty on low grade raw sugars,
thus giving the manufacturers cheaper raw material?
Mr. DINGLEY. Not at all. Hard sugar, that is, granulated sugar, ca^-
not be made from those low grade sugars. In fact, I may say with reference
to that question that careful investigation has shown clearly that the rate
we fix, making a slight reduction on these few lower grades, gives an almost
exact equivalent ad valorem duty to that placed on the higher grades.
FORTY PER CSNT. LESS THAN WILSON RATES.
In general, it may be said that the differential on refined sugar under
the schedule which has been presented, which is but a slight modification
of the original House schedule, except that it increases the duty on raw
sugars, is exactly the same at the 100-degree point in the schedule here pro-
posed as in the bill passed by the House. THERE IS A SMALL INCREASE
AS THE POLARISCOPIC TEST GOES DOWN FOR THE REASONS I HAVE
STATED; BUT IT IS ABOUT 40 PER CENT. LESS THAN THE DIFFER-
ENTIAL UNDER THE EXISTING LAW AT ALL POINTS.
Mr. DOCKERY. The statement is made that the bounty to the sugar
trust has been reduced by this bill; and I sincerely hope that is an accurate
statement.
Mr. DINGLEY. The differential on refined sugar is considerably less
than under the present Wilson tariff.
Mr. DOCKERY. Then, as I understand, you claim that the bounty car-
ried in this bill is less than under existing law?
Mr. DINGLEY. Certainly. The gentleman means the differential I sup-
pose?
Mr. DOCKERY. Yes, sir.
Mr. DINGLEY. The differential, as the gentleman knows, is the dif-
ference between the duty imposed on such a quantity of raw sugar as will
make a pound of refined sugar and the duty imposed upon the refined sugar
when imported.
NO BOUNTY TO THE SUGAR TRUST.
Mr. DOCKERY. BUT DISCARDING ALL TECHNICAL TERMS AND
COMING RIGHT DOWN TO "BED ROCK," THIS BILL GIVES TO THE
SUGAR TRUST A CERTAIN BOUNTY
Mr. DINGLEY. IT GIVES TO NO SUGAR TRUST ANY BOUNTY.
Mr. DOCKERY. WELL, IT GIVES THEM A CERTAIN MEASURE OF
" PROTECTION."
Mr. DINGLEY. IT GIVES TO THE REFINING INDUS'! it Y OF THIS
COUNTRY A PROTECTION THAT IS 40 PER CENT. LESS THAN THAT
GIVEN BY THE WILSON BILL OF 1894. (Applause on the Republican
side.)
Mr. MOODY. I wish to ask the gentleman from Maine what has become
of Senate amendment 850, on page 225. providing for an additional duty whore
an export bounty is paid by a foreign country?
Mr. DINGLEY. A general provision at the close of the bill covers that
r ;:, tor.
Mr. MOODY. There is nothing in the bill, so far as I can see, which
indicates whether that provision has been retained or not.
Mr. DINGLEY. It was struck out in the Senate and a general countei'-
vail ing-duty provision put in at the close of the bill, obviating the necessity
for the other provision.
Mr. MOODY. But nothing in this printed bill indicates whether that
general provision of the Senate has been retained or not.
Mr. DINGLEY. The way to ascertain that is to find the pro/vision as
agreed to in conference in the reciprocity section of the bill.
Mr. MOODY. There is nothing to indicate what action has been taken
by the conference.
Mr. DINGLEY. If the gentleman will look at the beginning of the bill,
he will notice the explanation of these various marks; and when he comes
to examine further, I think he will see that the House recedes from its dis-
agreement to that provision and agrees to the general provision of the Senate
relating to countervailing duties where there, is a bounty on exportation,
thus practically accomplishing what was accomplished by the House amend-
ment.
THE INCREASE IN DUTIES.
Mr. Speaker, I desire to call attention to the nature and extent of the in-
crease in the rates of duty in the proposed tariff. The largest increase has
been made in the duty on sugar, partly for revenue and partly for the pur-
pose of encouraging the production of our own sugar. It is this increase
which raises the average equivalent ad valorem apparently above that of
the tariff of 1890, in which sugar was free. The changes which have been
rcade in the bill in conference reduce the average equivalent ad valorem,
estimated on the basis of the values of 1893, to about 50 per cent., including
the duty on sugar. Excluding sugar, the average equivalent ad valorem, on
the basis of the values of 1893, does not exceed 48 per cent, against 49 ^o
per cent, under the tariff of 1890 and 40 per cent, under the tariff of 1894. But
the difference between the 40 per cent, of the present tariff and the 48 per
cent, (excluding sugar) proposed, properly distributed on protective lines, is
the difference between life and death.
We have heard much reckless denunciation of the proposed tariff as "the
highest ever known, "but, as a matter of fact, the average ad valorem of the
tariff of 1824 was 50% per cent., and 61% per cent, in 1830, 48% per cent, in
18G7, and this, too, before undervaluation became a science.
PROTECTIVE DUTIES AND REVENUE.
Mr. Speaker, before considering the second object had in view in fram-
ing the proposed tariff measure that of encouragement to our domestic in-
dustries I desire to correct an impression which exists in some minds that
a tariff constructed on protective lines is antagonistic to ff vpnue.
It would be a sufficient answer to such a content p^int to the r a <.!.
that all our revenue tariffs since 1861 had been grea,- .evenue prodiu-ers
than any tariffs for revenue only ever put into law in this country. Ti e
tariff of 1890, notwithstanding it surrendeied from fifty to sixty millions of
16
revenue by placing sugar on the free list, yielded nearly one hundred and
seventy-seven and one-half millions of revenue from customs in the fiscal
year beginning July 1, 1891; two hundred and three and one-third millions
in the fiscal year beginning July 1, 1892, and would have undoubtedly yielded
two hundred and twenty millions revenue in the fiscal year beginning July 1,
1893, if it had not been for the result of the November elections of 1892,
which proclaimed the overthrow of our protective policy and disarranged our
industries and impaired the consuming power of our people, and thus cut
down revenue, while the present tariff, heralded as a revenue tariff, with 40
per cent., duty on sugar, yielded only one hundred and fifty-two millions in
the fiscal year ended June 30, 1895, and would not have yielded in the fiscal
year just ended over one hundred and forty millions if it had not been for
anticipatory importations to avoid the new duties.
THEORIES vs. EXPERIENCE.
To one who regards theories more conclusive than experience, it might
seem as if duties on imports which can be produced or made here without
la.uial disadvantage equal to the difference of cost of production or manu-
factuie heie and abroad, with the necessary result of encouraging production
here of such articles because of the fact that such duties give our own people
an equitable chance to compete for our own markets, would cause a falling
off of revenue.
But this conclusion omits to take note of results which flow from such
encouragement of production and manufacture here, and of certain habits
of a portion of our people: First, the increased purchasing power and higher
standard of living of the masses of our people, in consequence of which they
buy and consume more imported luxuries, or articles in the nature of luxuries,
than ever before, and, second, the presence of a large number of well-to-do
citizens who regard it as "the thing" to use imported articles of foreign
rnf'.ke, especially wearing apparel, and who are willing to pay high duties
on them.
A striking illustration of the influence of these two facts is to be found
in a comparison of the revenue-producing qualities of the wool and woolens
schedule of the tariff of 1890, framed on protective lines, and the same sched-
ule of the tariff of 1894, framed on non-protective or supposed revenue lines.
Tnis schedule of the former tariff yielded under protection in the fiscal year
1893 a revenue of about $44,500,000 on an importation of 40,000,000 pounds of
clothing wool and the usual quantity of carpet wool, together with $36,000,-
000 worth of woolen goods, mainly fine goods, consumed by the well-to-do,
and in the f seal year 1896, under a tariff for revenue, yielded only $23,000,-
000 revenue nder an increased importation of 127,000.000 pounds of clothing
wool and tht usual quantity of carpet wool, together with nearly $60,000,000
of woolen goods.
ANTI-PROTECTIVE SCHEDULES DIMINISH REVENUES.