The last man to be heard from in the making of the Dingley Bill, as indeed of its predecessors, was the man who was to buy the goods. In 1896, when the tariff hearings were going on, Mr. Louis Brandeis of Boston, at that time unknown outside of his own professional circle, appeared “for the consumers” as he told the Committee. He was laughed at for his pains. “What’s the use?” was Mr. Dalzell’s protest; “Oh, let him run down,” his sneer, when Mr. Brandeis insisted that it was his right to say what he thought about duties which made his necessaries dearer. A recurring note in the hearings held in Washington, before the Payne-Aldrich Bill, was contempt for the suggestion that this or that duty made an article cost a cent or two more at retail. What was a cent to a consumer! This was particularly noticeable in the argument of the wool interests. What if the tariff did make the cloth for a suit of clothes a few cents dearer a yard—it did not add a large amount to the price of the cheap suit. It was not worth considering. What is a cent to a consumer? Are there a considerable number of people in this country living on incomes so small that a rise of a cent or two in the price of necessary articles of food and clothing can make a material difference to them? To most Americans “the poor” in the United States are a negligible quantity. We think of them as the frayed and falling fringe on our great fabric of “comfortable off” population—largely 259what they are by their own indolence or inefficiency. But is this true? Is it not true, on the contrary, that the great majority of the inhabitants of the country, the great mass of hard-working, industrious men and women are poor? The statistics of the distribution of wealth should be often set before those hopeful souls, who, prosperous themselves, love to insist that, in this country at least, “all is for the best in the best possible of worlds.”
We have 92,000,000 people in the United States. Perhaps there are a few thousand millionnaires among us, perhaps a few hundred thousand having an income of ten thousand dollars or more. But in contrast to them there are millions of individuals whose wage is under a thousand. Look over the average yearly wages in our best-paid industries. Take the one which boasts of paying the highest wage—the United States Steel Trust. According to its last report the average wage of its 195,500 employees, including its foremen and clerks and managers, whose salaries in some cases are $10,000 even $25,000 a year, was but $775. In 1905 the average yearly earnings of the men in the cotton industry was but $416. In 1907 the mule spinners in the Massachusetts woollen factories averaged $13.16 a week, the dyers averaged $8.58, the weavers $11.60. There are probably several millions of white families in the United States whose average wage is not over $500 a year. When one comes to examine industries generally, the surprise is not how much, but how little the great body of wage-earners receive. People must live on small earnings in this country, as everywhere. In order to accumulate enough to provide against sickness and old age they are obliged to practise a thrift which frequently is hateful, it is so cruel. Moreover, genuine thrift requires so much training, intelligence, and self-denial that comparatively few are prepared to practise it, even with the best of intentions. This is the hard fact, 260and yet the Congress of the United States for fifty years has fixed taxes on the food and clothing and shelter of these people with no apparent consciousness of their condition. They were the “ultimate consumers”—terms in a problem—not suffering, struggling men and women.
If one would know with something like scientific precision what it means for a family to live on $500 or less a year in a city like New York, for instance, if he would realize the relation of a rise of even a cent in the cost of a necessity to the comfort of the multitude of working girls in this country on $6.00 and $8.00 a week, he should study the various investigations recently made into the budgets of these two classes. They demonstrate that if one is to take care of a family of five persons in New York City on $500 a year, or of himself on a wage of $6.00 or $8.00 a week, he must think before he buys a penny newspaper, and he must save and plan for months to get a yearly holiday for the family at Coney Island; that there is practically no possibility of a nest egg or of schooling for the children beyond fourteen years of age, that sickness means debt or charity, and that the accumulation of those things which make for comfort and beauty in a home is out of the question. To these families an increase of a cent in the price of a quart of milk is something like a catastrophe. To these girls, every penny added to the cost of food, of coal, of common articles of clothing, means simply less food, less warmth, less covering, when at the best they never can have enough of any one of these necessaries. These budgets are a powerful demonstration that the rapid rise in the cost of living under the Dingley Bill was to a vast number of people of this country nothing less than a tragedy, for what is true in New York City is equally true in Chicago, in Pittsburg, and in many factory towns. The statistics, which show the rise in prices from 1897 onward, are as sensational as those which 261show the increase in national wealth. For instance, take what the bulletin of the Labor Bureau calls the “annual per capita cost of the necessaries of daily consumption.” It rose from $74.31 in 1896 to $107.26 in 1906. Coal which cost $3.50 a ton in 1896 cost $4.50 in 1906. Manufactured commodities were 32 per cent higher in 1906 than ten years before, raw commodities, 50 per cent higher. “All commodities” averaged 35.4 per cent higher. Rents soared everywhere. That wages increased largely in many industries in this decade is equally true, but that they increased correspondingly in any but the most favored industries—those where either the unions exercised compelling power or those where the managers were unusually enlightened—is doubtful. A government investigation of the wages in about 4000 establishments, employing 334,000 persons, engaged in manufacturing and mechanical industries, the kind of establishments where, of course, the forces which raise wages act most freely and successfully, shows that in 1906 the weekly wages of the 334,000 were 19.1 per cent higher than in 1896, while, as said, the cost of all commodities was 35 per cent higher. Wages increased 3.9 per cent in 1906 over 1905, while the cost of the commodities increased 5.9 per cent. Now what does this mean? Why, simply this, that at a time when wealth was rolling up as never before (this country increased its wealth between 1900 and 1904 by about twenty billions of dollars), a vast number of hard-working people in this country were really having a more difficult time making ends meet than they have ever had before. It also means that in a great number of other hard-working families the increase in wages had been so little in excess of the increase in the cost of living that it may be almost said to have been a discouragement instead of a comfort, by intensifying the common conviction of the working-man that no matter how 262much he earns he will still have to spend it all in the same hard struggle to get on, that there is no such thing for him as getting ahead.
There is no escaping the seriousness of such a situation. The only chance of peace and of permanency in this country lies in securing for the laboring classes an increasing share of increasing wealth. It is not enough that the wages of men keep up with their forced expenditures,—they must go beyond. There must be a growing margin between the two—a margin wide enough for the laborer to see it, and to be able to draw hope and encouragement from it. When the margin has shrunk or not visibly increased, unrest and discouragement must follow. There is no doubt that a great number of employers in this country recognize this principle, and thousands of them are struggling to meet it by increasing wages. But there is another duty for us, and that is to keep down the cost of living. And it is this duty which the makers of tariff bills have always refused to face squarely and, as far as the tariff had any relation to it, honestly to discharge. That the Dingley Bill had not been the only cause of the increasing burden which the consumer bore is true, but it was a real cause, and in the case of certain essential common articles, almost the only cause. Take for illustration the case of the tariff and spool cotton. Spool cotton is as necessary an article of daily consumption in the household as fuel or cloth. Many women with families, on $500 a year, many shop and factory girls on $6.00 or $8.00 a week, make their own clothes. Not infrequently these women in their work are obliged, when not protected by a union, to furnish their own thread. For many years the price of the ordinary 200–yard spool cotton was 5 cents, twelve spools for 50 cents, when suddenly in 1900 it was advanced to 6 cents, about double the price it was selling for in England. The cause of the advance offers one 263of the nicest studies we have of the beneficent effects on prices of a tariff combined with a trust.
The leading brand of thread which was sold in 1900 at 6 cents in New York and about half that in England, is made by J. & P. Coats, Limited, of Paisley, Scotland, and by the Coats thread combination in this country. The Coats House is the oldest and most progressive thread house in the world. It early saw the advantage of establishing a factory in the United States and competing for the American trade under the protection of the tariff. Other English firms also saw the advantage, chief among them the Clarke Mile End Spool Cotton Company of Newark, New Jersey. A few years ago the Coatses realized that a combination of the English concerns doing business here would be profitable, and one was brought about, the products of the amalgamation being handled by the Spool Cotton Company of New York City. In 1897 some sixteen of the English competitors of the Coats’s concern combined in a $10,000,000 trust, called the English Sewing Cotton Trust. The J. & P. Coats Company took $1,000,000 of the stock, and at least once since has helped the organization out of trouble by lending it $2,000,000. Thus the two concerns are working together. The next year, after the English combination was formed—1898—an American Thread Trust Company was formed. It was made up of the thirteen leading American concerns,—all, indeed, but one of the large domestic companies went into it. No sooner was this done than the English Trust bought the majority of the American Trust’s stock. Here, then, was an English Trust owning and controlling the American Trust and dictating its policy from the other side of the water. And this British Trust was affiliated and partly owned by the still larger concern, the J. & P. Coats Company. It comes down to this, that the $48,000,000 Coats concern controls practically the 264thread business of England and America. No sooner was the English control complete here than the price of thread was advanced.
Mr. Archibald Coats, the head of the Paisley concern, when twitted with using his monopoly to put up the price of thread, insisted that the advance was due entirely to the higher costs of materials. Moreover, he said, the concern was not a monopoly, that there were in the world 180 thread concerns outside of those in which he was interested. Mr. Coats’s materials were higher—cotton, fuel, spool-wood, had advanced, but on the other hand, Mr. Coats himself called attention to the savings he and his colleagues effected by their combination, both in manufacturing and in selling. These economies the representatives of the American end of the Trust told the Industrial Commission in 1900 were “immense,” “tremendous.” Mr. Coats stated in his report of 1906 that the profits of his concern in the second five years of the combination—that is, after the price of thread went up, and also after the price of materials had gone up—were nearly a third greater than in the first five years. They certainly were highly satisfactory,—a profit of $12,636,000 a year on a capital of $48,600,000 is doing well! The fact seems to be that through a monopoly in this country which it was possible to perfect only because of the high tariff on spool cotton which had cut off all competition from the 180 concerns which in free-trade England might affect him somewhat, Mr. Coats was able to sell his thread here at a higher price than he did in England and to increase his profits in five years by some 33? per cent, and this in a time when his materials had largely advanced. That is, Mr. Coats and his friends had been able to make the millions of this and other lands bear all the fluctuations and vicissitudes of the thread trade. Whatever happens, he could protect himself and his favored 265workmen from sharing any of the losses of his business; he could even increase his profits.
One of the necessary articles which steadily advanced in price after the Dingley Bill passed, was shoes. It was an advance which was particularly hard on the poor, for shoes are one of the heaviest expenses in clothing a family. One of the budgets reported in a recent investigation of living expenses in New York City was that of a family of four persons, respectable, hard-working, and anxious to get ahead. Their total income was $600. These four persons kept themselves “neat and clean” on $40.00 a year. Out of this $40.00, $11.81, or over one-fourth of the total, went for shoes and mending shoes. In another budget of a larger amount ($895) $61.90 was spent for clothing in a family of eight persons, and out of this $8.00 went for shoes for the father, $1.25 for the mother, $8.33 for the six children, or $17.58 of the entire appropriation for clothes and shoes. In the budget of a shop girl there is perhaps no one item which costs more anxiety than that of shoes, none more important. She must have them. They should be strong and weather-proof, for she must go and come in pouring rains and drifting snows. They should be well fitting, for she must often stand in them all day. The amounts spent in keeping themselves shod vary greatly, of course, according to the care of the girls, the distance they walk, the quality of the article bought; but when compared with the total allowance for clothes, the result is something appalling. Among the budgets of a recent investigation, was one of a woman forty years old, who had worked sixteen years at $6.00 a week in a well-managed New York factory. She sat at her work. She could have earned $8.00 a week by taking a place at the counter, but argued that the better clothes required and the wear and tear of standing would be really more expensive, so kept the $6.00 place. By limiting food she could save $1.00 a 266week. This gave her $53.00 a year for doctor, dentist, amusements, clothing, and “extras.” She spent $22.05 for clothes the year her budget was examined, and of this $7.16 went for shoes and rubbers. This woman was an especially careful person. Usually the sum credited to shoes is larger. They range from this one of $7.16 up to $26.60 spent by a girl who said she could not keep her feet dry on less than a pair of $2 shoes per month—$24.00 a year—with one pair for dress at $2.60; $26 for shoes on an income of $9.00 a week, cut down the year of the investigation to an average of $7.50 by illness!
It was hard enough for the poor to buy shoes before the Dingley tariff, but with every year since it has been harder. In woman’s ordinary shoes there was an increase of something like 25 per cent in the years from 1890 to 1899. There was a corresponding increase in all varieties of boots and shoes. Say that it has been 20 per cent and see what that means to your family of four which can spend but $40.00 a year on clothes and must put $11.81 of it on shoes.
But why should the price of shoes have increased? Under the extraordinary advance in shoe machinery, it should have decreased. The shoe was pinched by a combination of tariffs and trusts which can hardly be matched in any other industry in the country. First, there was the tariff laid on hides in 1897. For twenty-five years hides had been free and cheap, for South America sent us large quantities. The shoe dealers were taking all both markets offered. But the cattle-growers of the West raised a cry that they should have more money for their hides, that Congress should pass a law which would compel the people to give it to them. In 1890 a strong appeal was made to Mr. McKinley for such a duty and it is probable that he would have granted it, so great was his reverence for the doctrine, had not Mr. Blaine interfered. The duty was not granted in 1890, but in 1897 it was given. The effect was 267immediately to raise the price of sole leather. In June, 1906, W. L. Douglas, ex-Governor of Massachusetts, a shoe manufacturer, said in a public speech that since 1897 the increase to his company in the price of sole leather in a single pair of shoes had amounted to 17? cents. Mr. Douglas figured that the tariff on hides and soles caused the people of this country to pay $30,000,000 a year more for shoes than they otherwise would. They paid this tax that perhaps 85,000 stock-raisers, herders, and drovers might get more for their cattle. It was argued that with the duty they could monopolize the domestic trade and cut off the South American trader, but that gentleman sent us more hides in 1906 than in any year since the duty was imposed! Moreover, it was not the cattle raiser who was chiefly or proportionately profited by the higher price. It was the Beef Trust, as Mr. Blaine said it would be. The cattleman received no such increase in the price of his steers as the beef men did in the price of hides. In November, 1907, the Hide and Leather Journal, commenting on the good thing the Trust had always made out of this particular duty, declared it was paying stock-raisers $12.50 apiece for cows, and selling the hides alone for $9.00 apiece!
But it takes something besides leather to make shoes. For one thing it takes thread—and thread, linen thread particularly, so advanced in price that it added perceptibly to the cost of making a pair of shoes. But why had thread advanced? It is a pretty study of combined tariff and trust manipulation. To begin with, we do not and never have raised in this country any flax suitable for making linen thread. In spite of this fact the Dingley Bill put a duty of $22.40 a ton on flax not dressed, and of $67.20 per ton on that which had been dressed. These were the rates of the McKinley Bill. Of course the avowed purpose of this duty was to protect the “infant industry” of raising flax for use in 268manufacturing. We have a good flax acreage in this country—though it has decreased by over 1,000,000 acres since 1902. But this flax is grown not for the fibre, but for the seed, being used for making linseed oil. It is the custom not to harvest it until the seeds are fully ripe, and when that time comes the straw is too old for fibre. It is true that in the Northwest a few tons of flax are used annually for making twine, upholstering tow, and insulating boards, but practically none of this is fit for making thread,—that is, in spite of the fact that we have been steadily paying from $20.00 to $22.00 a ton on undressed flax for many years, we have scarcely ever produced a ton fit for thread.
Of course the thread itself is protected, and this protection has worked in the linen thread industry very much as that on cotton thread. Seeing the tariff trend here, the great linen thread manufacturers of Great Britain followed the example of the Coats’s and Clarke’s cotton thread makers, and came here many years ago to produce under the protection of the tariff the thread they had been exporting. This went on until the Barbours of Lisburn, Ireland, had a branch at Paterson, New Jersey; the Finlaysons of Johnstone, Scotland, at Grafton, Massachusetts; the Dunbar Co. of Gilford, Ireland, at Greenwich, New York; the Marshals of Leeds, England, at Newark, New Jersey—all of the great British companies were here to preserve the market for themselves. Most efficient masters of their business—the Barbours were a century-old house—they grew rapidly under the high protection they enjoyed. The logic of their privilege was of course what it has been in all our highly protected industries—a trust. This came about a few years ago—the Linen Thread Company of which the president is Mr. William Barbour, and the vice-president A. R. Turner. The formation of the trust did wonders for the linen thread business. 269They were able to make large economies. Instead of separate mills making all the products each mill was assigned to do the work it could best do. At the same time the marketing expenses were reduced. In one of the communications to the tariff hearings of 1908–1909, a writer familiar with the industry says of these economies:
“One mill which, while independent, used to make $400,000 worth of thread per annum now makes $600,000, and another which made $250,000 now makes $400,000, an increased turnoff of about fifty per cent, and this without hiring an additional hand. This, of course, lessens the cost of manufacturing considerably. When the four mills were selling independently on this side, each of them carried stock in New York, Boston, Chicago, St. Louis, and San Francisco, and each had travelling men going over the territory. But with the advent of the combination all the stores in the various cities were turned into one, and a much smaller force is used to sell the products of the various mills.”
Now of course if the theory of the trust is sound, we should get some benefit from this combination on shoe thread, the only one of its products which we consider here. But what happened to shoe thread? In the last few years every variety has advanced rapidly. Increase in cost of materials—increase in rents—rapacious dealers—the trust people tell you. But the facts are these according to an expert authority: the linen thread trust were selling their shoe threads in 1909 for at least 50 per cent more on an average than they cost them, and they were able to do this almost entirely because of the duty which protected them from foreign competition. The cost of producing in Ireland a shoe thread known in the trade as No. 1 is 40 cents a pound. In the United States it is 47 cents. The duty on this thread was 19? cents a pound—12? cents more than was necessary to cover difference in cost—and 270the trust sold the thread 71 cents net a pound! No. 4 shoe thread cost 53 cents to make in Ireland. It cost 64 cents here. There was a duty of 25 cents a pound on it, and it sold at $1.20 a pound, nearly twice what it cost! In two years (1907–1908) its price jumped three times.
And what is the attitude of the Linen Thread Trust toward the protective tariff? Its members signed a petition to the Ways and Means Committee in 1909 in which they prayed that the duty be kept on flax. They wished to “encourage the fibre-producing industry,” they said—although they knew, nobody better, that no flax fibre for thread has ever been grown here, in spite of more than thirty years of tax-paying. Of course they asked that the duty on thread be untouched!
But a high protection tariff and a trust agreement are not the only advantages the Linen Thread Company enjoys. It has an alliance which gives it a commanding strategic position in the business, and that is with the organization popularly known as the “shoe-machinery trust.” This company began its life twelve years ago in New Jersey like so many of its kind. At that time, 1899, it was capitalized at $25,000,000, divided into preferred and common stock, the first at six per cent, the second at eight per cent. Six years after its organization the company underwent a reorganization. This reorganization seems to have been a way of getting rid of its extra earnings, for it presented its stockholders with comfortable extra cash dividends as well as a fifty per cent common stock dividend. According to the last report to which the writer has had access, 1907–1908, the capital of the company had in eight years increased from $17,250,000 to nearly $32,000,000, its surplus from $1,355,914 to over $13,500,000, and the net earnings from $1,770,110 to over $4,500,000.
One may fairly ask how they did it. It is clear enough 271when one looks at what they have had to go on. In the first place, the shoes of this country are now made almost entirely by machines. The first practical machine invented was the famous McKay sewing machine. It was followed rapidly by others: machines for welting, lasting, heeling, pegging, more than a score for performing the many complicated operations by which the modern “ready-made” shoe is built up. Up to 1899 these various machines were handled by different companies. But in that year the twelve most important concerns were combined into the trust named above, officially the United Shoe Machinery Company. Now there prevails and has since the days of McKay—who, by the way, was not the inventor but the promoter of the first shoe machine—a system of handling its output peculiar in manufacturing industries. It never sells, it always rents its machines. That is, a maker of shoes cannot buy for his factory the machines to do his work, as the ship-builder, the miller, the woollen manufacturer, can. He rents the machines for a term of years, paying a royalty on each shoe made. When the shoe machinery company was formed in 1899, it inherited this curious method. It took hold of its various acquisitions with rare energy and ability, its aim being to produce what it calls a system of shoe manufacturing. To accomplish this it proposed to “tie” together the machines it controls in such a way as to give a practical continuity of service. That is, each machine was to be so adjusted to the others that the shoe could be passed from one to another without loss of time or waste of effort. To do this effectually meant improving the old machines as well as adding new ones. The results of the combination of machines and of the improvement are extraordinary. It is a practically continuous service enabling the manufacturer to increase his product, and the laborer, who in the shoe industry is paid by the piece, to increase his earnings.
272The management of the new organization proposed at the start not to raise the royalties paid at the time the combination was formed for the use of the various machines, and it has never done so. It proposed also to take off what had been a custom in the business—the initial charges for installing machines. Indeed, the company claims that while before the combination the initial charge for fitting out a factory was $12,000, it now is but $1700. In the case of many of the metallic machines, as they are called, the practice was to charge no rent, but to require the manufacturer to take from the companies certain findings, like tacks, wire nails, and eyelets; the company charged its own price, not the current one, and in this way got its pay. These prices probably were always high, but the company claims it has never raised them. That is, the new organization proposed to make no changes in what the manufacturer had been paying, but to increase its profits through the greater continuity and perfection of the service of its system.
But this of course meant that the manufacturer should use all the machines in its system; that is, all those that it had tied together. And to make sure that he did this, the company prepared a remarkable lease, requiring that all the machines it made pertaining to the bottoming of shoes beginning with the lasting of the uppers should be kept together; that is, that no outside machines for any of these processes could be used, and if an attempt was made to introduce one, the company had the right to take out the remaining machines of the system.
In addition to the regular bottoming and lasting machinery the company handled a large number of general machines, and it was specifically provided in the leases of each of these that it should not be used on shoes that had been lasted and welt-stitched, or turn-stitched on other machines than those 273put out by the company. The penalty for using the leased machine with outside machines was the forfeiture of all leases in all departments—also the breach made the lessees liable to an action for damages.
The New England Shoe and Leather Association considered certain features of the leases for the metallic fastening machines so objectionable that a long series of conferences was held in 1901 with the company, and certain modifications were obtained. Thus an alternative was secured for the ironclad lease covering the metallic fasteners by which the shoe manufacturer could use them with foreign machines by paying ten per cent more for his materials. (The rent of these machines, it will be remembered, was included in the price charged for the materials.) The penalty for disobedience was also lightened, and other concessions were obtained. Thus it is possible now to buy the general machines outright. The committee said quite frankly in its report that it was clear that the company intended to make such contracts as would give it a monopoly of the manufacture and renting of all shoe machinery, but it added it was patent that to do this it must continue to serve the shoe manufacturers better than they could be served elsewhere.
The monopoly the committee foresaw was of course inevitable. To-day the United Shoe Machinery Company owns more than ninety per cent of the shoe machinery of the country. Its profits are enormous, as the expansion noted above shows. The royalty on a pair of woman’s shoes is about three cents. On a pair of man’s shoes it is from four to five cents. In a factory turning out a thousand pairs a day of the former there is a royalty of $30.00 a day. The writer has talked with one shoe manufacturer who claimed he had paid $165,000 a year in royalties to the trust and upward of $100,000 for materials. Many would-be independent manufacturers 274claim they could reduce the cost of manufacture two cents a pair if allowed to own their machines. It is a common assertion among them that the royalties for the first year pay a reasonable price for the machines; that as the life of a machine is ten years, there are nine years of “unholy profits to the trust!” While discontent at the “benevolent despotism” which rules the business breaks out all over the country in spots, and a few energetic attempts are working to build up independent systems, the shoe manufacturers as a body have accepted the combination. Certainly they are getting from it such a service as they never had before, whatever the oppression. The shoe manufacturer can by the use of the “system” increase his product and the piece-paid laborer his wages. At the same time without raising royalties the company profits enormously. The person who gets no advantage is the man who buys the shoes. The royalty paid on each pair is just what it was when the trust was formed.
And what has the United Shoe Machinery Company to do with the Linen Thread Company? The president and the vice-president of the latter, Mr. William Barbour and Mr. A. R. Turner, are both directors in the former. Mr. Barbour, who is reputed to be the largest owner of the linen thread stock, is also a large individual stock-holder of United Shoe Machinery. Can any one doubt that such a relation has not been of importance to the Linen Thread Company in securing the 80 per cent of the linen thread business which it controls? Or would it be surprising, the power, the protection, and the surpluses of the two being given, if there soon was nobody outside of their fold making either linen thread or shoe machinery?
Moreover, is not the logical and almost inevitable result of the practical monopoly of these two interwoven concerns the rapid absorption of the shoe manufacturers themselves? 275Why, when they own and control all machinery and linen thread, and furnish a rapidly increasing list of the findings, should they stop there? Does not the strategy of the situation, do not the same arguments, the same laws which have led to the monopoly of each and the alliance of the two, force them into shoe manufacturing? This is no new alarm. In 1901, when the New England Shoe and Leather Association made the report referred to above, it said:
“The fear has been expressed that should one company control all the machinery in use in the production of shoes it would be quite easy and enormously profitable to create a trust which would be a monopoly in the shoe manufacturing business. The committee has not discovered the remotest indication of such intention. The present managers of the United Shoe Machinery Company are unusually able, experienced men, and they know that their profits are to come from co?peration with shoe manufacturers rather than competition with them.”
That was true of the profits then; it is true now, but with recalcitrant manufacturers refusing to co?perate—wanting to work out their own salvation—and with funds piling up for expansion, the “good of the shoe business,” which led to the first monopoly, will probably some day point strongly to a second.
There is but one force to hinder the final absorption of the shoe business by the combinations we have been considering, and it must be admitted that this is a powerful one—there is a rival trust with as rapacious a maw and as brutal a strength as any the country has produced on the trail of the shoe—that is the Beef Trust.
Twenty years ago when the amiable Mr. McKinley was disposed to give the duty on hides, Mr. Blaine wrote him, “It will yield a profit to the butcher (Beef Trust) only, the last 276man that needs it.” Mr. Blaine prevented the duty then—but Mr. Dingley gave it, and certainly the Beef Trust has profited as much as the shoe has suffered.
But while the cost of the leather steadily increased under the duty on hides, there was going on in the Beef Trust the inevitable combination which special privileges breed. Buying practically all the cattle on the hoof, the packers owned all the hides. Hides go to tanners to be prepared for sole leather. It has always been a prosperous and widely spread business in the country. But the dream of the Beef Trust is to allow nobody to do anything directly or indirectly connected with the steer which it can do. It owned the hides; why should it not tan them? And promptly it began to “acquire” tanneries. There is no space here to go into the history of the steady absorption by the packers of this great American industry which has been going on in the last few years. All that is essential here is the fact that to-day the united packers, Armour, Swift, and Morris control fully thirty of the largest tanneries in the country. And the next step? Signs of what it will be are already abroad. Repeated rumors have come that the Armours were going into the shoe business. In the reports of the tariff hearings of 1908–1909, is a letter from the president of the Wholesale Saddlery Association of the United States protesting against the duty on hides. In this letter he writes:
“The statement that follows may appear to you very far fetched, but it is my confident personal opinion that if the condition which confronts leather manufacturers and the manufacturers of leather articles continues and advances with the same strides during the next ten years that it has during the past five, not only will the beef packers control the manufacture of the leather, but they will likewise control by ownership the shoe, harness, belting, and other leather industries.” 277And this is only one of the several such intimations to be found in the reports. There is nothing surprising in it. That the packers should absorb the manufacturing from leather is quite as logical as that they should make leather. It was these facts and possibilities that forced the duty off hides in the Payne-Aldrich Bill, but it was only accomplished after a fight of the most unusual character.
The duty on thread was lowered in 1909, but there is no rational interpretation of the doctrine of protection which can defend that which it still carries. All that the suppliants pretend to ask is enough to cover the difference in wage cost here and abroad—enough to defend Mr. Barbour in the United States from M............