MU. WELLS’S REPORT. S P E E C H OF HON. WILLIA DELIVERED ! IN THE HOUSE OF REPRESENTATIVES, JANUARY 11, 1870. WASHINGTON: F. & J. RIVES & GEO. A. BAILEY, REPORTERS AND PRINTERS OF THE DEBATES OF CONGRESS. 1870. \ «*• A Digitized tey the Internet Archive in 2019 with funding from University of Illinois Urbana-Champaign > https://archive.org/details/mrwellsreportOOkell MR. WELLS’S REPORT. The House being in the Committee of the Whole on the state of the Union— Mr. KELLEY said: Mr. Chairman : I have more than once endeavored to impress upon Congress the fact that fire is the material force or nervous power, and iron and steel the muscles of our more modern civilization. The trip-hammer, with its wonderful power and more wonderful pre¬ cision and delicacy of stroke, has supplanted the sledge-hammer, and circular and gang- saws do in a day the work at which the hand¬ saw labored for months. Machine tools, such as lathes, drills, planers, and shaping machines, impelled like the trip-hammer and the saws of which I have spoken by the unwearying steam engine, itself a mere embodiment of coal and iron ore, increase the perfection and amount of the artisan’s product and relieve him of the exhausting toil which shortened the life of his father and made him prematurely old. Nations, too, are subject to these new con¬ ditions. However free their institutions may be, a ,people who cannot supply thei# own demand for iron and steel, but purchase it from foreigners beyond seas, are not independent; nor is their dependence merely commercial; they are politically dependent; and if the nation on which they depend for these essential ele¬ ments of modern warfare be arrogant and treacherous, as England proved herself during our late civil war, they must endure contumely and outrage with unresisting humility. Com¬ merce and war both demand iron ships; we tell the weight of our guns, whether of steel or iron, by the ton, and that of our steel-pointed shot by the hundred weight; and while we depend upon her for the material of which to construct ships, guns, and shot, the statesmen of England know they can trifle with and post¬ pone the settlement of the Alabama claims. Able as we were to crush with irresistible power a gigantic rebellion, they know that until we shall have furnaces, forges, rolling-mills, ma-. chine-shops, and skilled artisans enough to produce and fashion a supply of iron and steel sufficient for our wants in peace and war, we cannot engage in war with England because we depend on her for these primary essentials to successful modern warfare. I am impelled to renew these suggestions by the report of David A. Wells, esq., Special Commissioner of Revenue, which abounds in propositions inimical to the best interests of the country, and which if adopted by Congress will compel us to occupy a subordinate position among nations, though our population may equal that of all Europe, as our territory already does that of the whole family of European Powers. As I read page after page of this ex¬ traordinary paper I became more earnestly anxious to detect the full force of its sugges¬ tions, and, if possible, to divine the motive or spirit that prompted them. As an expression of the opinions of Mr. Wells this paper can do but little harm, but its circulation in Europe under the sanction of Congress will impair our credit and arrest the tide of emigration now flowing in upon us in unprecedented volume. It is in the nature of a notice to the capitalists of Europe that as a people, notwithstanding the amazing expansion of our country, we are tending toward bankruptcy; and to the op¬ pressed laborers of other lands, that our work¬ ing people are becoming not only relatively but absolutely poorer from year to year, and that this is therefore not the country to which poor but aspiring men should emigrate. It demonstrates to the satisfaction of Mr. Wells’s admirers and clients that though our wealth increased during the last decade one hundred and twentysix per cent., its utmost increase during this decade can be but sixty-five and eight hundredths percent.; and that instead of the census of 1870 showing, as it is universally conceded it will, largely over forty-three thou¬ sand million dollars, that the grand total can by no possibility be over $ 23 , 400 , 000 , 000 . Time will not permit me to point out.the fallacies in this portion of his report, as I would gladly do; and I proceed at once to invite the attention of the committee to points which seem to require more special animadversion. But, before turning to these, let me request gentle¬ men from Massachusetts, Ohio, Indiana, and New York, if they have not already done so, to turn to pages 24 et seq., and learn how rap¬ idly their respective States are sinking into poverty, and how much poorer their people are per capita than they were in 1860. The sug¬ gestion will doubtless surprise them ; yet so cun¬ ningly does Mr. Wells present it that foreigners who are not familiar with the truth so patent to every observer will be deceived by it and feel they had better— “Bear those ills they have, Than fly to others that they know not of.” One of the processes by which Mr. Wells sustains his theory, though not wanting in ingenuity, is very simple. It is to assume that everything is now worth from thirty-five to thirty-nine per cent, less than it was at the time with which he proposes his comparison. We know that wheat and flour and every variety of cotton and woolen goods are cheaper now than they were in 1860. But Mr. Wells’s theory is, that as there is a difference in the market value of gold and greenbacks, commodi¬ ties of domestic production ought to be dearer; and applying this theory to such facts as he sees fit to present, he assumes that they are, and so establishes the melancholy warning to all persons proposing to emigrate that this is not the country to which they should come. No demonstration of the falsity of his theory or of its absurdity induces him to halt, but in spite of these he presses onward and applies it in every case. When examining his last annual report I confronted him with the large accu¬ mulation of deposits in the savings-banks as evidence that the workingmen of the country were not then, as he asserted, “growing poorer, while the rich were growing richer,” and, after a year’s reflection, he answers my array of facts in this wise : “Again, the returns of savings-banks are often re¬ ferred to as showing a highly prosperous condition of the masses. Properly considered, however, they indicate a very different state of things. Thus, the first and almost the only fact which attracts the at¬ tention of a mere superficial observer in examining these statistics is a large apparent increase in depos¬ its from 1860 to 1868 or 1869. But an intelligent ex¬ amination will at once show that a very great part of the apparent accumulation referred to is mere inflation. For example, let us take the case of Mas¬ sachusetts, where the conditions for increase would seem to be most favorable : In 1860 the savings-banks deposits in this State wore, in round numbers. $45,000,000 In January, 1869, in currency, $95,000,000, or in gold,at 133. 71,000,000 Increase in eight years. $26,000,000 or $6,000,000 less than the aggregate deposits of 1860 would ha,ye amounted to in the same time at a com¬ pound interest of seven per cent.; or in other words, the deposits of 1860 were not made good in 1869, with¬ out reference to the increase of population, even if we reckon only their natural increase at compound interest. It is evident, therefore, that .some cause has eaten into the accumulation which existed eight years previously, and has occasioned the withdrawal of a portion of that accumulation.” If tins statement be fair the deposits in the savings-banks of the country fluctuated fearfully on the 24th of September last, when gold ranged from 123 to 165 in an hour, and such of the depositors as were in that end of the New York gold-room where it was selling at 135 were vastly richer than those who were at the same moment in the other end at which Albert Spires was buying it for 160. A story told in connec¬ tion with Mr. Spires’s operations on that occa¬ sion seems to me to illustrate the value of Mr. Well’s theory. It is said that a young man without capital who had found his way to mem¬ bership of the gold exchange, but had been bankrupted even of credit by the operations of the preceding day or two, stood near Mr. Spires, and as that gentleman cried “ One sixty for one million,” tapped him on the shoulder and said, “Taken.” “Same price for two millions more,” cried Spires. “ Taken,” said the young bankrupt; and so until Spires had bid, and he taken his bids for $13,000,000. They then separated, and the young bankrupt drawing aside, with a pencil upon the back of a letter calculated his profits, and turning to a friend triumphantly exclaimed, “I have just made$750,000outofold Spires.” “Why,” said a by-stander, “you do not expect to get any of it, do you?” “ No ; certainly not,” said he, “but, blast him, I thought I would give him gold enough.” This operation between a luna¬ tic and a bankrupt, neither of whom owned a dollar of gold, and by which neither forfeited a cent, had about as much relation to their fortunes as the market price of gold has upon the price of domestic commodities, or deposits in the banks to which Mr. Wells applies it. In farther proof of its absurdity I invite at¬ tention to the fact that if his theory be correct the depositors in the savings-banks of Massa¬ chusetts have since the preparation of his re¬ port, by no effort of their own, without increase of industry or unusual economy on their part, but .by his magic power, acquired more than $9,000,000, as gold is now not at 133 but at 120; and that they will, if they do not make haste and withdraw their deposits, and we go on as we have gone for the last two or three montrfe under the financial management of Grant and Boutwell, soon make $15,000,000 more in the same easy, and, I fear, unhallowed way; for when gold comes to par even Mr. Wells, with all his ingenious effrontery, will not deny that having been able to maintain a deposit of but $45,000,000 in 1860, they have in eight years become able to maintain one of $95,000- 000, which amount they will be able to draw in gold or redeemable currency, though they deposited greenbacks when gold was at more than 200. Before parting with this subject I beg leave to inform the committee and Com¬ missioner Wells that at the close of 1869 the aggregate deposits at rest in the savings-banks of Massachusetts were notas he states $95,000- 000, but $112,000,000, showing that the labor¬ ing people of that State, who he says are eating up their former savings so rapidly, have added $17,000,000 to their interest bearing invest¬ ment in the last year. The prominent characteristics of Mr. Wells’s report are audacity and advocacy of the interests of England and her American colonies. That 5 it is ingenious and plausible cannot be denied ; but that it is so does not in my judgment fur¬ nish proof of the Commissioner’s ability or evidence of his possession of well-grounded convictions on industrial questions. Indeed, the fact that many of the suggestions which are most earnestly pressed contravene those em¬ bodied in his former reports, and his avowal that in offering them “ he has placed himself in antagonism to many with whom he was formerly in close agreement,” afford ample ground for doubt on both points. “ Remember, gentlemen,” said the expe¬ rienced merchant who now so ably fills the office of collector of the port of New York; when conferring with the Committee of Ways and Means, “ that the legal ability of England and the continent is constantly retained by foreign manufacturers to indicate the means by which your tariffs may be evaded.” Mr. Wells visited our transatlantic rivals in his official capacity, and while among them doubtless availed him¬ self of the ability of their large array of able and well-paid counsel. Whether he also was retained is for the present the subject of conjecture. But that he enforces as “opinions and recommend¬ ations which have been forced upon him by conviction’ ’ the wishes of the English manufac¬ turers there is abundant evidence in the report, as I propose to show. The most audacious of Mr. Wells’s assertions, and one that pervades the whole report, is that customs duties are always a tax on the con sumer, increasing the price of the imported article on which they are levied and enabling the home producer to realize undue profits by keeping production steadily below the current demand for the commodity he produces. Were Mr. Wells a tyro, and this report his first pub¬ lication, charity would deem this a blunder and ascribe it to ignorance ; but he is a man of large experience, and has written much, and reference to any of the publications which led to his appointment to the eommissionership, or to his preceding reports, will convict him of basing this official paper on a principle the fal¬ sity of which he has time and again abundantly established. His bad faith in this is proven, I think, by a single extract from his report made December, 1867, in which, speaking of the higher duties he then advised Congress,to put on steel, he said: “On steel much higher rates of duty than those recommended upon iron are submitted. Although these rates seem much higher, and are protested against by not a few American consumers of steel, yet the evidence presented to the Commissioner tends to establish the fact that if any less are granted the de¬ velopment of a most important and desirable branch of domestic industry will, owing to the present cur¬ rency derangement and the high price and scarcity of skilled labor, be arrested, if not entirely prostrated. This is claimed to be more especially true in regard to steel of the higher grades or qualities. It is also represented to the Commissioner that since the intro¬ duction of the manufacture of these grades of steel in the United States, or since 1859, the price of foreign steel of similar qualities has been very considerably reduced through the effect of the American compe¬ tition, and that the whole country in this way has gained more than sufficient to counterbalance the tax levied as a protection for the American steel man¬ ufacture, which has grown up under its influence.” Mr. .Wells can dispute none of the facts asserted in the foregoing extract, which prove that prior to the close of 1867 highly protect¬ ive duties on steel had not been a tax on but aboon to the consumer; so great a boon,indeed, that by enlarging the supply and increasing competition they had so far reduced the price of steel that, to quote his words again, “the whole country in this way has gained more than sufficient to counterbalance the tax levied as a protection for the American steel manu¬ facture, which has grown up under its influ¬ ence.” You, Mr. Chairman, and many of our cola¬ borers on this floor, are interested in the exten¬ sion and improvement of our magnificent rail¬ road system, and I propose to illustrate the treachery of the Commissioner by briefly refer¬ ring to the effect of high productive duties on Bessemer steel rails. In 1864 there was no establishment in the United States for the manufacture of such rails. The lowest price at which an American company could buy them in England was $150 per ton cash, gold, including freight to New York or Philadel¬ phia. No English maker would sell them at less. Agents of the Pennsylvania Central, and Philadelphia, Wilmington, and Baltimore roads went abroad and canvassed the market, and having been assured that such rails could not be produced and sold at a living profit for a lower price than this, purchased a small quantity for each company. The duty was then, as now, an ad valorem duty of forty-five per cent., which at that price was equivalent to about three cents per pound. Gold was then above 200, and each ton of rails had cost when on the wharf in Philadelphia $390, currency. Our country abounds in the materials from which to make not only Bessemer rails, but every quality of steel, and the wages paid to American workmen are high enough to tempt skilled workmen from England and Germany. In view of these facts several enterprising railroad men determined to establish Bessemer rail works. This was not to be done in a day. It required the selection of a judicious site, the erection of extensive buildings, the construc¬ tion of a large amount of machinery, which con¬ sumed considerably more than a year. During all this time the price of English rails remained at $150 cash, gold, per ton delivered on the wharf in America. But at length the Freedom Works, at Harrisburg, Pennsylvania, so called in commemoration of our partial enfranchise¬ ment from the grasp of foreign monopolists, were ready to take orders, and another estab¬ lishment for their production was erecting at Troy, New York, when lo ! the same English manufacturers, who had been unable to sell at less than $150 per ton, canvassed our market to firfd buyers at $130. What wrought this great change ? Had the Commissioner’s English friends been making profits off-our railroad companies greater than he ascribes to our producers of salt, pig-iron, lumber, and other things essential to national independence; or were they willing to sacrifice the profit on a small part of their annual product in order to 6 / crush an infant rival whose development they feared? Be this as it may, in less than four years competition has brought the price of Bes¬ semer rails down so rapidly that orders are now taken in England at eleven pounds sterling, or about fifty-five dollars, deliverable at Liverpool or Hull. Meanwhile the mills ‘for their pro¬ duction at Troy, New York, and others at Chester, Pennsylvania, Cleveland, Ohio, and Detroit, Michigan, have been completed ; and the plans have been adopted for others at Mott Haven, New York; Pittsburg, Johnstown, and Bethlehem, Pennsylvania; Baltimore, Cincin¬ nati, and St. Louis; but their construction awaits and is dependent on the action of Con¬ gress on the tariff. These facts are known to Mr. Wells, yet he endeavors to persuade the country that a protective duty is always a tax on the consumer, and labors to induce Con¬ gress to reduce a duty which was at the rate of three cents to one and a half c.ent per pound; a change which he well knows would close all our Bessemer rail works and restore to his English friends the monopoly of our market. What can have brought him to such a conclusion? What is to be his reward for such a consumma¬ tion? If gentlemen will turn to page 125 of the report they will find a schedule presenting a classification of steel, and proposed rates of duty on each class. It purports to be Mr. Wells’s own suggestion, and is submitted with all the emphasis that the abundant resort to italics can give. I hope gentlemen will examine it, for I think that with its private history it furnishes a clew to his change of views on the question as to whether a protective duty that develops a great industry is a tax, and his Saul-like con¬ version on the steel question. For nearly a quar¬ ter of a century our duties on cast-steel have been assessed upon the value of the commodity, or ad valorem; and recent investigations by an agent of the Government has shown that throughout the whole of the period the steel-makers of Sheffield, by refusing to sell directly to Ameri¬ can purchasers and consigning their goods to their agents in this country for sale, by which cunning arrangement they could successfully practice a system of undervaluation, have been defrauding the Government of a large portion of its dues. The Sheffield steel-makers are men of wealth and social position, and this discovery of their long-continued and systematic fraud upon our Government has not been a pleasant thing for them. The charge is distasteful to them. A combination to cheat and defraud has an ugly sound. They squirm under it and admit that steel has been invoiced to the United States at lower rates than those at which they sell in England or to the people of the Continent, but assert that, low as the invoice prices are, they are the prices at which they sell in this country. Good, kind-hearted, benevolent people! How they do love the Yankees! To be willing to sell them their wares cheaper than they will to their own countrymen or to any of the people of Europe! Have they any reason for doing so, or do they pretend to have any ? Yes ; they are not without a show of reason. They say—and their letters are oq file in the Treasury Depart¬ ment, and their agent3 have appeared there to enforce the statement—that our market is essential to the maintenance of their works, and that such is the competition they encoun¬ ter from our steel-makers that they are forced to sell to us at lower rates than they do to the English or any other people. In a letter to our consul at that city, dated July 10,1869,Thomas Firth & Son, of Sheffield, say: “We have a very large steel trade in America, amounting to a large proportion of our whole busi¬ ness, and in that market there is from various circum¬ stances much competition; and these two causes— large trade and competition combined—have induced us to be satisfied with a smaller average profit there than we have realized on the average in our other markets.” Mr. Wells has seen the report of Mr. Far- well, the Treasury agent referred to, and has examined, or ought to have examined, all the papers in this controversy, and might have cited them as proof of his assertion that the reduction in the price of steel has more than compensated the American people for all the duty paid on that article since the establish¬ ment of our first successful steel w r orks in 1859. But I have been led into a digression. I had said that the discovery of their sys¬ tematic frauds was not a pleasant thing to the English steel-makers, and was proceeding to say that foreseeing it would probably lead to the abandonment of ad valorem and the levy¬ ing of specific duties on steel they have over¬ whelmed the Secretary of the Treasury and other official personages with unsolicited, and, of course, disinterested advice. That we should not suffer for want of their experience, the draft of a bill providing a scale of duties on steel was prepared, as I am informed and verily believe, by or in consultation with a member of one of the leading firms of steel-makers of Sheffield, and sent over to a gentleman specially connected with legislation on financial subjects. I have examined the original draft as it came from Sheffield, and have a copy of it before me. It is a proposition by the vulture to protect the dove. It is plausible in its minute classi¬ fication. It would, had it been honestly named, have been entitled a bill to prohibit the manufacture of steel in the United States. It is, however, entitled “ A bill to amend an act entitled ‘ An act to increase duties on im¬ ports, and for otherpurposes,’ ” approved June 80,1864.” Itfurnished Mr.Wells his schedule; and that gentlemen may see how completely he has adopted it, how entirely his views on this important subject are in accord with those of the steel monopolists of England, whose interest it is to hold us in commercial and maritime dependence, I will ask the reporters to put the two schedules in parallel columns. It is> perhaps, due to Mr. Wells, in this con¬ nection, that I should mention the fact that he so far exercised his own judgment in making this recommendation as to modify two or three unimportant rates and to change the order from that in which the items stand in the bill; and that to make the comparison easy for the read- 7 ers of the Globe, I have arranged them in the order chosen by Mr. Wells : Wells’8 schedule. Sheffield bill. On scrap steel, £ cent On scrap steel, £ cent per pound. per pound. On blister steel in bars On blister steel in bars broken up for melting, 1£ broken up for melting, 1£ cents per pound. cents per pound. On German steel in On German steel in bars, 2 cents per pound. bars, 2 cents per pound. On shear steel in bars, On shear steel in bars, 2h cents per pound. 2} cents per pound. On cast-steel ingots and On cast-steel ingots, 1 on all rough and unfin- cent per pound, ished castings in steel, 1 cent per pound. On castings in steel. On castings in steel with drilled, bored, or ham- holes drilled or bored, mered cold, 1£ cents per hammered or turned or pound. planed in parts, but in no case hammered or roorked hot, 1£ cents per pound. On cast-steel in bars, 2s On cast-steel in bars, 2£ cents per pound. cents per pound. On cast or German steel On castor German steel in plates to 16 wire gauge, in sheets or plates to No. inclusive, 2 cents per 23 wire gauge, 2s cents pound; from 17 to 24, 2£ per pound, cents per pound; above 24, 3 cents per pound. On cast or German steel On cast or German steel in form of wire and sheets in form of wire or strips which aredrawn orrolled which are drawn or rolled cold to 16 wire gauge, 3 cold to 16 wire gauge, 3 cents per pound. cents per pound. Thinner than 16 wire When drawn or rolled gauge, 3? cents per pound, smaller than 16 wire gauge,31 cents per pound. On cast-steel tires for On cast-steel tires for rolling-stock for rail- rolling-stock for rail¬ roads, 2 cents per pound, roads, 2 cents per pound. On cast-steel straight On cast-steel straight- axles, shafts, piston-rods, axles, piston, connect- and general forgings to ing and coupling - rods, pattern, 1 cent per pound, crank - pins, slicle-bars, and general forgings to pattern only, 1£ cents per pound. Do. do. rough-turned, If forged to shape and 1£ cents per pound. rough-turned or planed, 1? cents per pound. Do. do. finished ready If finished ready for for use, 2cents per pound, use, 2 cents per pound. On cast-steel crank On cast-steel crank- axles forged to shape, shafts, if forged to shape only 1£ cents per pound, only, 1£ cents per pound. On cast-steel crank On cast-steel crank axles, forged to shape, shafts, if forged to shape, rough - turned, planed, rough - turned, planed, and slotted, 1J- cents per and slotted, 1£ cents per pound. pound. Do. do. finished ready On cast-steel crank for use, 2 cents per pound, shafts, if forged to shape, finished ready for use, 2s cents per pound. On cast-steel rails, 1£ On cast-steel rails, 1 cents per pound. 4 cent per pound. On steel not otherwise On steel or manufac- provided for, 2 cents per tures of steel, not other- pound. wise provided for, 21 cents per pound. It will be observed that the foregoing sched¬ ules are, as I intimated, not absolutely iden¬ tical, but they are so nearly so as to prevent Mr. Wells from denying that they sprang from the same brain and pleading the possibility of coincidence—I do not say'the probability, but the possibility of coincidence—on so many points of rate and general and technical phraseology. And it will be further noticed that where the slightest departure in rate occurs in any one item, as is the case in two or three unimportant instances, it is immediately com¬ pensated for in the next item by a correspond¬ ing change the other way. Thus, Mr. Wells is more generous to his countrymen in the matter of Bessemer rails than their Sheffield rival would be. He proposes to kill them instantly by putting the rate at one cent a pound ; while Mr. Wells is willing to give them breathing time in which to put their houses in order by letting them die slowly at one and a half cent. And in the next item the Englishman proves the more generous ; for he proposes two and a half cents on all steel and manufactures of steel not provided for, and Mr. Wells would crush his countrymen instantly by making the duty on those articles but two cents. I cannot leave this branch of the subject without saying that I believe gentlemen gen¬ erally who compare these schedules will agree with me in thinking that Mr. Wells’s Sheffield employers have treated him badly, scurvily. Having induced him to father their project, so prejudicial to his country and so destructive to the business of many of his countrymen, they violated faith with him when they made their paternity of the scheme known by sending a copy of the bill to official quarters in this coun¬ try in advance of the publication of his report. . PIG-IRON. With all the zeal of a new convert or coun¬ sel laboring to secure a contingent fee, Mr. Wells applies his assumption that a protective duty is necessarily a tax on the consumer to pig-iron, and by the plausibility of his argu¬ ment would make innocent and inexperienced people believe that he really hoped to secure cheap pig-iron by reducing the duty on that article from nine dollars a ton to three dollars. Could he close our steel works, as the accept¬ ance of the Sheffield schedule recommended by him would do in three months, and arrest the progress we are making in the increased pro¬ duction of pig-iron, he would do more to retard the progress of his country toward commercial prosperity and national supremacy than Davis, Lee, and all the heads of the rebellion accom¬ plished. I cannot conceive the single cause that would do more to depress and impoverish our people and retard the growth of our coun¬ try than the sudden prostration of these great interests at a time when the English or con¬ tinental manufacturer will purchase none of our grain for which he has to pay a penny in advance of the price for which he can buy from the peasants of Austria and Russia. But this recommendation with reference to pig-iron is consistent with the rest of the report, throughout which the desire is manifest to make the United States as commercially dependent on and tributary to England as though they were still part of her North American colonies. He cites pig-iron, coal, salt, and lumber as illustrations of a class of cases where excessive and unnecessary duties have been imposed and maintained 11 with a view of enhancing the cost of articles indispensable to many other branches of production” and elsewhere says that the only reply offered to his assaults upon this great and essential interest u is that a continuance of the present duty on pig-iron is necessary to insure employment to American labor.” I pause to notice his assertion, that Con- 8 gress in the midst of a great war imposed un¬ necessary exactions in order to increase the cost of an article so essential as iron to the life of the nation, simply to remark that such an intimation is worthy the man who can sap and mine the great interests of his country as Commissioner Wells is doing. The present duty on pig-iron was imposed for two pur¬ poses, both of which were patriotic. The first was to raise additional revenue, and the other to stimulate the conversion of ore, coal, and limestone, of which in almost every part of the country we have inexhaustible supplies, into a material the increased production of which was a prerequisite to the general extension of our industries and the maintenance of the dignity and rights of the nation, which were then being violated by the armed cruisers of the country to which we looked for a supply of png-iron and Bessemer rails. And, sir, I am happy in being able to show that it has accomplished both these objects, and that if permitted to stand for five years it will, while contributinglargely to thereduction of our debt, insure us not only a home supply of pig-iron, but such ample means of producing it as will enable us to enter the markets of the world in competition with England. What has it done as a revenue measure? During the year that ended on the 30th of-June, 1868, we derived from this duty $1,011,109 96 ; in the succeding year, closing on the 30th of June, 1869, $1,199,762 55; and in the current fiscal year will give us a still larger income, with¬ out in the slightest degree impairing the revenue derived from our consumption of foreign iron in more advanced condition. This is shown by the following statement of the quantities of the various kinds of iron and steel exported from Great Britain to the United States during the ten months ending October 31, of the years 1868-69, in tons of 2,000 pounds: 1868. 1869. Iron, pig and puddled. 84,564 132,491 Iron, bar, angle, bolt, and rod. 38,200 51,738 Iron, railroad, of all sorts.255,462 294,368 Iron castings. 1,213 1,677 Iron hoops, sheets, andboiler plates, 15,999 31,292 Iron, wrought, of all sorts. 4,020 7,364 Total.399,45S 518,930 Steel, unwrought. 14,847 15,612 Has not the duty of nine dollars per ton on pig-iron been eminently successful as a revenue measure ? I think it has; but its most abundant success has been in its power to increase the supply, improve the quality, and lessen the cost of domestic pig-iron. The Commissioner raises no question as to the relative quality of British and American iron, and does not, as I remember, state the quantity of our annual production, except that in one of his hypo¬ thetical calculations of the values realized from different departments of industry, to state which he was required to assume some quan¬ tity, he places the annual product for 1869 at 1,725,000tons, or just about 175,000tonsbelow the ascertained production of that year. That the average quality of American pig, bar, and railroad iron is superior to the average of the same descriptions of English iron is an almost universally-conceded fact; but to blazon this to the world would not serve the interest of the Commissioner’s British friends, and he is there¬ fore silent upon this aspect of the question also. He tells us with much elaboration what he has been told has been the cost of production per ton at several points in this country,* and the mhrket price per ton during the year in Eng¬ land and here. But though his report abounds in hypotheses and calculations based on estimates and sup¬ positions, he nowhere tells or attempts to tell us what we would have been made to pay the British iron master for his inferior pig, bar, sheet, and rails if the American production of pig-iron had not been more than doubled since the establishment of this duty, and if the man- , ufacture of cast-steel and Bessemer rails had not also been established at so many points within our limits. He is not ignorant of the fact that in little more than a year past sixty- five new blast furnaces have been erected, and that they are to employ a portion of the people of fifteen States. Six of them are in New York, one in New Jersey, nineteen in Pennsylvania, one in Maryland, four in Vir¬ ginia, six in Ohio, five in Indiana, three in Illinois, five in Michigan, two in Wisconsin, six in Missouri, three in Kentucky, one in Georgia, two in Alabama, and one in Ten¬ nessee. These furnaces have increased our productive power to nearly two million five hundred thousand tons per annum. Arrange¬ ments are also making for the erection of more fThis portion of the Commissioner’s report has elicited the following memorial: To the Senate and House of Representatives of the United States in Congress assembled: In the late report of lion. David A. Wells, Special Commissioner of the Revenue, the following para¬ graph appears: “ In the valley of the Cumberland and in the an¬ thracite district of Pennsylvania, and at Scranton, the Commissioner is informed by those conversant with the business that the average cost of manufac¬ ture in the case of furnaces favorably situated, under good management and with coal at ordinary prices, is not in excess of from twenty-four to twenty-six dollars per ton, and in some instances is much less than this figure. These estimates, furthermore, it should be observed, include a liberal interest on the capital invested, Avhich is turned on an average from two to three times per annum.” Your memorialists, representing thirty-seven fur¬ naces in the Lehigh, Schuylkill, and Susquehanna regions, producing annually in the aggregate over 270,000 tons of pig-iron, respectfully express their be¬ lief, based upon personal knowledge, that the above statement of the Commissioner will be found upon a critical examination erroneous, and if accepted by Congress a most dangerousguide to legislation. Upon the authority of ourpcrsonal knowledge we beg leave to state that the average cost per ton at the furnaces we represent, exclusive of any interest on capital and the expenses of moving product from the fur¬ naces, in theyear 1868 was $29 16f, and in the first six months of 1869, $29 63; while we believe the cost for the last six months will not materially vary there¬ from, these prices being the average cost of the product, embracing the' three qualities of iron, namely, Nos. 1, 2, and 3. We respectfully express the conviction that the foregoing average cost of the product of the furnaces we represent is below the average cost of the product of American furnaces collectively; it being our belief 9 than fifty other furnaces during the year upon which we have just entered, many of which have been commenced. The estimated prod¬ uct of pig-iron for this year is two million two hundred and twenty-five thousand tons, or about fifty per cent, of the annual average produc¬ tion of Great Britain. These facts are, I repeat, known to the Com¬ missioner; and he knows also that by a law as inevitable as that of gravitation domestic com¬ petition increasing in such a ratio must at an early day bring down the price of iron as it has that of wheat and flour, and of knit and other cotton and woolen goods, to a point beyond danger from foreign competition ; and by thus relieving us from dependence on England for the first essential in a great war, will aiso make us her competitor in the markets of the world in a field her supremacy in which has hitherto made her the commercial mistress of the world. I will not offer an estimate of what would have been the price of pig-iron had not the necessities of the Government compelled it to impose a duty that was protective and which justified men of enterprise in opening coal mines and ore-beds and erecting furnaces ; but to enable gentlemen to judge for themselves, I submit the following. On page 85 of the report I am considering the Commissioner says : “How great the demand of the future ia likely to prove may bo inferred from the circumstance that while the per capita consumption of Great Britain and Belgium, after allowing for exportation, has reached one hundred and eighty-nine pounds per annum, the present annual consumption of the Uni- that we represent interests having important eco¬ nomic advantages. In view of the foregoing statements we respect¬ fully ask as an act of justice to the Commissioner, to the producer of American pig iron, to the public and to its Representatives in Congress, that you will make a special and searching inquiry for the data on which the Commissioner has based his statements, and into the accuracy of our statements as above, that the truth may be made public and error, however strongly indorsed, be effectually confuted. LEHIGH CRANE IRON COMPANY, Catasauqua, Leliigh county, Pennsylvania. ALLENTOWN IRON COMPANY, Allentown, Lehigh county, Pennsylvania. SAUCON IRON COMPANY, Hellertown, Lehiali county, Pennsylvania. ANDOVER IRON COMPANY, Phillipsburg, New Jersey. MONTGOMERY IRON COMPANY, Montgomery county, Pennsylvania. J. B. MOORHEAD & CO., Montgomery county, Pennsylvania. ROBERTS IRON COMPANY, Allentown, Lehigh county, Pennsylvania. REPPLIER, LANIGAN & CO., Montgomery county, Pennsylv ania. CHESTNUT HILL IRON ORE COMPANY, Columbia, Jjancaster county, Pennsylvania. E. IIALDEMAN & CO., Chickies Station, Lancaster county, Pennsylvania. C. B. GRUBB & SON, Columbia, Lancaster county, Pennsylvania. C. S. KAUFFMAN, Columbia, Lancaster county, Pennsylvania. ATKINS BROTHERS, Pottsville, Montgomery county, Pennsylvania. CARBON IRON COMPANY, Parryville, Carbon county, Pennsylvania. HENRY S. ECKERT, Reading, Pennsylvania. G. DAWSON COLEMAN. Lebanon, Pennsylvania. ted States is not in excess of one hundred pounds per capita. No nation, furthermore, at the present time, with the exception of Great Britain, is pro¬ ducing pig-iron in sufficient excess of its needs to allow of a surplus for exportation; and in Great Britain the prospect of any future increase is entirely dependentupon the uncertain condition of her being able to supply coal on a scale of consumption that is already in excess of one hundred and four million tons per annum.” On page 3 of his report made January, 1809, Mr. Wells tells us that— “In France the annual product of pig-iron was in 1866 1,253,100 tons, and in 18671,112,800 tons, showing a decline of 110,300 tons. “In Austria the official returns of the iron trade show a diminution of forty-two per cent, in 1866 as compared with 1860, and of sixty per cent, as com¬ pared with 1862.” And in that valuable paper, the report of A. S. Hewett, esq., United States commis¬ sioner to the Paris Exposition, we learn that ours is almost the only country in the world that can largely expand its production of iron. Mr. Hewett agrees with Mr. Wells that it is problematical as to whether England can for the present increase her production mate¬ rially. He thinks she may maintain her present position among other continental producers; but beyond this he does not think she can go, by reason of the depth of her mines and the “intrinsic difficulties of producing the re¬ quired supply of materials and labor, without an enormous increase of cost.” The iron production of the world for 1866, as stated by Mr. Hewett, was as follows: .. ..* n Countries. Pig-iron. Wrought iron. t Tons. Tons. England. 4,530,051 3,500,000 France. 1,200,320 844,734 Belgium. 500,000 400,000 Prussia. 800,000 400,000 Austria. 312,000 200,000 Sweden. 226,676 148,292 Russia. 408,000 350,000 Spain.. 75,000 50,000 Italy . 30,000 20,000 Switzerland. 15,000 10,000 Zollverein. 250,000 200,000 United States. 1,175,900 882,000 Total. 9,322,047 7,205,026 Thus it appears that with a production of less than ten million tons for the world’s supply no o