the smaller concerns are located near the Atlantic sea coastthe Pennsylvania Steel Company at Sparrows Point; and perhaps this company is at more disadvantage than some of the others who are manufacturing iron and steel goods. If they can get their iron ore a little cheaper on account of the taking off of this duty, it would strengthen them and help them to keep on in the uneven race which they have with the great concern, the United States Steel Company.

MR. RANDELL.-But, Mr. Chairman, how can that happen when the tariff is taken off ore that belongs to the steel trust? MR. PAYNE.-Well, if I have not made it plain to the gentleman, I despair, and will have to give it up.

Mr. Payne at this point postponed the conclusion of his speech until the morrow.

Champ Clark [Mo.] filed the report of the Committee on Ways and Means.

MINORITY REPORT

There are many changes-for the most part minor changes -of the Dingley rates, some up and some down. Most of the changes in a downward direction are reductions more apparent than real, the Payne rates being as prohibitive in their results in many cases as the Dingley rates.

The treatment of the farmer by this bill is along the same lines as have characterized Republican methods in the past. He gets practically no relief, and the laborer and producer have greater burdens imposed upon them. The cost of living for the average man is increased; the advantage of wealth and power is also increased.

As to the maximum and minimum tariff plan of the Payne bill, it is an open challenge to a trade war with every other nation on earth.

In this connection it may be well to ponder our relations with Cuba. Does any sane man suppose for one moment that the great commercial nations, our competitors for the world's trade, will concede that Cuba is one of our "dependencies"? It is a thing incredible. To ask that question is to answer it.

The bill is in many respects crude, indefinite, sectional, and prohibitive. It seems to us from our examination, which was necessarily hasty, that on the whole it increases the cost of living. Many increases of the sort might be mentioned. In numerous instances the protection exceeds the entire labor cost of

production. This can not be defended on any ground whatsoever, even by a standpatter. In all, the reductions, both apparent and real, fall far short of the substantial relief which the people were led to expect.

We do not desire to delay the passage of the tariff bill, and do not propose to waste an hour; but, having had no opportunity whatsoever to modify or amend it before it was reported, we will insist on having full opportunity to amend and debate it paragraph by paragraph under the five-minute rule, as is right and proper. That much we demand. We will be satisfied with nothing less.

Mr. Payne continued his analysis of the bill on March 23. In explaining the action of the committee in putting hides on the free list he said:

People do not raise animals for hides. They raise them for their meat, and the meat is the principal item when they come to sell the cattle. Not only that, but it is the foundation for half a dozen industries; and every time you put a duty on what is called sometimes the "raw material"-and, as far as hides are concerned, they are raw material-you have got to go all up along the line of goods made from that raw material and increase the duty. That is well recognized. There is no use in keeping hides out of this country in order to sell the domestic hides. If you have got to send domestic hides abroad to be tanned, to be made into shoes, to be made into harness, to be made into carriage leather, you want a duty on the manufactured goods, you gentlemen who are clamoring for a duty on hides.

The removal of the duty will not hurt anyone in the United States except the middlemen and the packers. The latter have gone into the tanning business and are tanning their own hides.

Mr. Chairman, I come now to the miscellaneous sections of the bill. Section 5 provides for free trade between the Philippine Islands and the United States on all articles except sugar and tobacco, and on sugar up to an importation of 300,000 tons in one year and on tobacco up to 300,000 pounds of wrapper and 3,000,000 pounds of filler and 150,000,000 cigars, beyond which the usual rates will apply.

I trust that this long-delayed measure of justice to the Philippine Islands will no longer be delayed, and under the beneficent provisions of this bill they will be allowed to enter our markets up to the extent of the limit. As far as the limits are

concerned, I would not have put them on, but a majority of the committee favored it.

It was a sort of compromise between the friends of the islands and the friends of the sugar beet and other outlying industries, and this section was adopted in the shape it is presented to the committee, and I hope it will meet with the approval of the House.

Section 6 provides that no part of this act shall abrogate or impair in any way the Cuban treaty for reciprocal trade, and the gentlemen of the minority are very much disturbed about this a continuation of the Cuban treaty.

Now, the question is asked in the minority report whether any sane man supposed that the commercial countries of the world would stand for it to have us admit Cuban goods here at a discount of 20 per cent. of our duty and still allow us a minimum rate. If the gentlemen who asked that question had thought back for the last four or five years of the existence of the Cuban treaty, they would have found that nearly every nation of the earth did give us better trade relations and the same rate of duty that they gave to the most favored nations, although we were carrying out the Cuban treaty in full and to the letter, because these nations recognized what the minority of the committee do not, that when we give that concession to Cuba we get a concession from them of a reduction of 20 per cent. of her duty; and then the nations of the earth also recognize the relation which we have to Cuba as the guardian of her interests and of her people and our effort to uphold her government and try to make her an independent nation, that she may not have to come in under our flag.

Now I come to the inheritance tax, a proposition that has created a great deal of discussion throughout the country, as it did in the committee. We want some more revenue. We want about $20,000,000 worth of it in order to be sure to make ends meet under this bill. And the committee cast about for a proper subject for taxation. I think they considered everything in sight. Some suggestion was made about a tax on the net earnings of corporations. Now, no man will deny but that the corporations of the United States, during the last two years at least, have been in a pretty precarious condition in a great many instances. They pay taxes; they pay State taxes, municipal taxes, and all kinds of taxes; and, although we put a pretty good tax on their net revenue, we still would not get our $20,000,000; so the committee did not think it was best to put that tax on.

Then the question of the income tax was presented to the committee. Well, I have pretty strong convictions about the constitutionality of an income tax.

MR. CLARK.-The income tax that was incorporated in the Wilson bill was only declared unconstitutional as to the income arising from land or rents of lands, was it not?

MR. PAYNE.-Also the income from municipal bonds. JAMES R. MANN [Ill.].-And also the income from personal property.

MR. CLARK.-Is it not true the President of the United States has intimated very broadly that an income tax can be drawn that the Supreme Court as now constituted would declare constitutional?

MR. PAYNE.-Whether he did or not, I have a right to my opinion about the constitutional law as well as has the President of the United States, and I want to say to the gentleman that that Wilson income-tax law has never been repealed in a single line or letter, and, if there is a court now that will hold that it is constitutional, why, it will be the law of the land.

MR. CLARK.-My idea of the Attorney-General is that one of his duties is to supervise the enforcement of all the laws that are on the statute books.

MR. PAYNE.-Whether they are constitutional or not?
MR. CLARK.-Certainly.

MR. PAYNE.-And after the Supreme Court has decided that they are not constitutional?

MR. CLARK.-I know that the Supreme Court never decided, except in certain features of it, that the Wilson income act was unconstitutional.

MR. PAYNE.-I can never sign a recommendation of the gentleman from Missouri for Attorney-General.

Now, Mr. Chairman, to proceed with the discussion. Even if an income tax was constitutional, I would greatly prefer an inheritance tax. There is no denying that an income tax occasions perjury and fraud unlimited. The knowledge of a man's income is within his own breast largely and he can cheat and defraud, and if he is one of that class of beings that do not stop at perjury he can cover up a large portion of his income. There is a great incentive in the minds of some men to do that thing. The objection that I have raised to an income tax on account of the perjury and fraud which it breeds can not apply to an inheritance tax, because every time an estate passes by the death of either a testator or an intestate the estate goes to the probate court in the State. Everything is done publicly.

There is a hearing in the probate court. Witnesses are sworn, affidavits are filed, inventories of the estate are filed, valuations of the estate are made. Everything is done in readiness for the collection of this tax, and there is no question of perjury and fraud to be raised. In that case and for that reason it is infinitely to be preferred to an income tax.

The objection is made that most of the States already have an inheritance tax, and that is true. I think 33 out of the 45 States are collecting such a tax. In some States the tax is almost as great as that imposed in this bill, and in some fully as great, and in some greater.

We have provided in this bill 1 per cent. from $10,000 up to $100,000, 2 per cent. from $100,000 to $500,000, and after that 3 per cent. That is, where it is a direct descent, but in case of collaterals in this bill we provide a tax of 5 per cent. on all legacies and inheritances exceeding $500.

I think that if these people have to pay both the State and the national tax they are not overburdened with taxation if this bill should become a law. What easier tax to pay than this? A man gets a legacy, a stranger perhaps to the testator, a clear gain to him; why should not he pay a part of that to the support of the Government?

It is a fair tax; it is a tax easily collected; and it is a tax that this class of people ought not to hesitate to contribute for the support of the Government and the protection of the law.

Gentlemen say that it interferes with the State. Well, the States have a wider range of taxation than the Federal Government; they can tax all property in the State.

MR. CLARK.-Let me ask the gentleman this: Suppose there are no minor heirs to an estate and the estate is settled out of court, does not come into the probate court at all, is there not just as much premium upon perjury in that case in this inheritance tax matter as there would be in the case of an income tax?

MR. PAYNE.-Well, not quite, because the estate is more visible than the income is, but there would be a chance for perjury and fraud in that case. But I want to call the attention of the gentleman to the fact that a very small percentage of estates are settled in that way, at least that is so in my own locality.

Now, Mr. Chairman, I am anxious to get at the consideration of this bill and pass it through the House. The country is waiting for the action of Congress. Trade is waiting. The wheels of industry are silent until our action upon this bill.

I believe it will open the ports of other countries. I believe