VOL. XXXI.

No. 3

Mr. Chairman and Members of the Committee:

The present hearings before the Committee on Ways and Means to consider legislative measures deemed necessary to preserve industries developed during a time of war, and whose necessity to the nation has been emphasized by wartime experiences, present a situation which is not unique in our history, which is not unprecedented in our experience as a nation.

During the armed conflict between the colonies and the mother country, which resulted in our independence, the importation of foreign products was rendered difficult and almost impossible, and manufactures developed on this side of the ocean to a remarkable extent. The experiences of the Revolutionary War taught our fathers the need of domestic industries and led Thomas Jefferson, the founder of the Democratic party, to exclaim that manufactures are necessary to our comfort, our safety and our independence.

Actuated by the same patriotic purpose the House of Representatives, on January 15, 1790, requested the Secretary of the Treasury "to report on the means of promoting such manufactures as will tend to render the United States independent of foreign nations for military and other essential supplies." In response to this order Alexander Hamilton, under date of December 5, 1791, communicated to the House of Representatives his famous Report on Manufactures. It began with these words:

The expediency of encouraging. manufactures in the United States, which was not long since deemed very questionable, appears at this time to be very generally admitted. The embarrassments which have obstructed the progress of our foreign trade have led to serious reflection on the necessity of enlarging our domestic commerce. "This course would lead," he claimed, to "an accession of resources favorable to national independence and safety."

In the course of his report, Hamilton enumerated various means by

achieved.

The first was protective duties. 2. Prohibition of rival art'cles. 3. Prohibition of the exportation of the materials of manufacture.

4. Pecuniary bounties.

5. Premiums.

6. Exemption of the materials of manufactures from duty, with certain exemptions of raw materials, which we could reasonably expect to produce in sufficient quantities.

7. Drawbacks of the duties imposed on materials of manufactures.

8. Encouragement of inventions and discoveries.

9. Judicious regulations for the inspection of manufactured commodities.

10. Improved banking facilities. 11. Improved transportation.

I refer to these means recommended by Hamilton for the encouragement of domestic industries, to show that the founder of the American protective system did not limit the methods of protection to protective tariff duties; but protective duties were placed first on his list and were the means adopted in our early tariffs.

About thirty years after the close of the Revolution the United States was engaged in another war with England, and it experienced the same increase and expansion of manufacturing enterprises and was impressed anew with the need and importance of domestic industries.

Under the mistaken claim that manufacturing had become thor

vive with lower duties, the tariff was reduced, and disaster overwhelmed many promising enterprises.

In 1824 a tariff bill was prepared to correct the mistake of reducing the duties, and while the bill was pending Dr. L. H. Colman of Virginia, wrote to Andrew Jackson, whose name was being prominently mentioned as a candidate for the Democratic nom nation for the presidency, and asked him if he proposed to support "the protecting duties" of the bill, and threatening him with the withdrawal of his support if this was the case. But "Old Hickory" was not to be bull-dozed or threatened, and bravely declared his belief in protective duties, as all the earlier Presidents had done.

In his reply to Dr. Colman, Jackson said:

"So far as the Tariff before us embraces the design of fostering, protecting and preserving within ourselves the means of national defence and independence, particularly in a state of war, I would advocate it and support it. The experience of the late war ought to teach us a lesson; and one never to be forgotten. If our liberty and our republican form of government, procured for us by our Revolutionary fathers, are worth the blood and treasure at which they were obtained, it surely is our duty to protect and defend them. Can there be an American patriot. . . who would be willing again to hazard the safety of our country, if embroiled, or rest it for defence on the precarious means of national resources to be derived from commerce, in a state of war with a maritime power which might

destroy that commerce to prevent our obtaining the means of defence, and thereby subdue us? Providence has filled our mountains and our plains with minerals, with lead, iron and copper, and given us a climate and a soil for the growing of hemp and wool. These being the grand materials of our national defence, they ought to have extended to them adequate and fair protection that our own manufactories and laborers may be placed on a fair competition with those of Europe; and that we may have within our own country a supply of those leading and important articles, so essential to war. In short, sir," he said, "we have been too long subject to the policy of the British merchants. It is time we should become a little more Americanized."

try; but they were written, Sir, in 1831, and refer to conditions produced by the French revolution and the Napoleonic wars. The words above quoted are found in the report of the committee on chemistry appointed at a convention of the Friends of Domestic Industry, which was held in the city of New York, October 26, 1831. The convention was attended by nearly five hundred delegates from thirteen. different States, and in its memorial to Congress it stated that

Everything goes on prosperously until the war comes to a close. Within a few months after, our markets are inundated with [foreign] goods, cheaper than we can inake

so that it would read:

"We have been too long subject to the domination of the German dyestuff manufacturers,"

and we could rest the argument-if argument were needed-for the protection of the American dye-stuffs industry on these strong and patriotic words of Andrew Jackson.

Mr. Chairman:

"Intimately connected with science and the healing art, and essential to other manufactures, chemistry received very little or no attention from the enterprise and skill of our country, until the late war. That event suddenly cut off the usual supplies from foreign countries. The consequent advance in price was excessive, and the inconvenience sustained by that class of manufacturers who consumed chemicals incalculable."

These words, Mr. Chairman, almost perfectly describe the recent experiences of the chemical indus

manufacturers are, in their turn, involved in one common ruin," and it asked, "Are we to extemporize at the commencement of every war, as we did at that of the last, a set of manufacturers, only to see them all shaken to their foundations by the return of peace?"

It would seem, Mr. Chairman, that we might have learned something by this time from the industrial experiences of the nation, that we might at least have learned the necessity of maintaining industries. essential to national security, and that it might be impossible by this time, at least, that men who have ventured their capital in industries necessary to the preservation of the nation, should appeal in vain to Congress for legislation to preserve those industries in times of peace.

It is inconceivable that any American citizen who has at heart the welfare and the safety of our coun

try, particularly in view of our recent experiences, yes, and of the whole history of our country, should have any doubt or hesitation about the policy to be adopted. The only question there can be is in regard to the method of applying that policy.

As the representative of an organization that has advocated for over thirty years the encouragement and protection of American industries, I appeal for legislation which will, in the words of Andrew Jackson, "foster, protect and preserve within ourselves the means of national defence and independence." I appeal I appeal

for adequate protective duties for the dyestuffs industry; for a stringent and effective anti-dumping clause; for the levying of customs duties on imports of dye stuffs on a fair valuation of similar products in the American market; and in addition thereto, if necessary to secure the full measure of protection which this essential industry requires, such other methods as Congress is empowered to adopt by that provision of the Constitution which grants to you the authority to regulate our commerce with foreign countries.

A measure of this nature which has been recommended and which has, I believe, the sanction of this provision of the Constitution, is a system of import licenses. I am in favor of the system of import licenses only where it can be shown that it is necessary to afford a full measure of protection; only if the license regulations are most carefully safeguarded; only if the li

cense system is employed as a supplement to a protective tariff and not as a substitute for it, and with the proviso that all imports under the license system should pay the regular customs duties of articles of the same class or kind.

It has been demonstrated again and again that the chemical industry is essential to national safety; that there is a close relation between the manufacturer of dye stuffs and explosives, and that there is extreme danger in permitting an alien power to dominate this industry.

In fairness to the men who came to the rescue of the country at a time of dire emergency; in the interest of a self-sustained and independent industrial policy and in behalf of our national safety and security it is essential that adequate measures of protection be taken to safeguard the dyestuff industry and permit it to expand.

RESUME OF CHEMICAL AND DYESTUFFS DUTIES,

1789-1916.

The first tariff act, July 4, 1789, levied a duty on indigo of 16 cents per pound.

Dyeing woods and dyeing drugs first appeared in the tariff act of August 10, 1790, where they were exempted from the 5 per cent duty of the basket clause.

Tariff act of April 27, 1816-a duty of 7 1-2 per cent on all dyeing drugs and materials for composing dyes not subject to other rates of duty. In this act the duty on indigo.