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 man 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.” And 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 Mr. Barbour in Ireland! According to the calculations of a practical independent thread man doing business in both countries, the actual difference in 1909 in the cost of production in Ireland and the United States in well-managed factories was not over six cents a pound. But the Payne Bill fixes the protection of the three linen threads most used in shoe-making at 15½ cents, 18¾ cents, and 20 cents. It is doubtful that this reduction is sufficient, now that the linen thread maker gets his raw material free, to produce any effect at all on the price to the trade. The duty is still grotesquely prohibitive.
When one goes over less important but still essential articles of the household, he finds numbers of them where the price advanced in the first decade after the Dingley Bill through a tariff-supported trust. Take the item of starch. From whatever product made it carried under the bill of 1897 a duty of 1½ cents a pound. Starch and its related products made from corn are now largely controlled by the Glucose Trust, as it is called—the Corn Products Company. The Glucose Trust is popularly known as a Standard Oil concern. That company has, to be sure, issued “A Protest and a Warning” against the association of the name of the two concerns. But so long as the headquarters of the Corn Products Company are 26 Broadway, its president a director of the Standard Oil Company and four of its directors on the Board of Directors of the Standard Oil Company, the protest and warning will have little influence on a cynical public. In a statement presented at the recent tariff hearings a complainant said that since the formation of the Glucose Trust in 1902, in spite of many improvements, chemical and mechanical, corn starch which for years had sold at $1.00 to $1.50 per 100 pounds in New York sold in car-load lots at $2.65 per 100 pounds! Without the tariff, this combination could not last a day for both England and Germany could compete with them. Not only compete in price, but outstrip them in quality, for naturally enough concerns like the Glucose Trust controlling a market are indifferent to quality. Quality is a thing which men are driven to by the fear of a rival taking their market. Take this fear away and you get inferior goods—that is, the poor are not only obliged under the protective tariff to pay more, but to buy more. Our potato starch factories also do not pretend to compete in quality with the German concerns in spite of the higher prices they get. They are not obliged to make the best goods. Their market is secure without it.
Tin plate is another household necessity of which the price was sharply advanced after the Dingley Bill and the formation of the tin plate trust. Domestic tin plate which was sold for $3.43 per 100 pounds in 1896, sold in 1900, under the Dingley tariff, for $4.67. While in 1906 we were paying $3.86 for our tin plate in New York, the Englishman was getting his about a dollar cheaper. The Englishman and the Standard Oil Company! The Standard Oil Company has been, for many years, probably the largest single consumer of tin plate in the country—practically all of the oil it sends to the Orient being put into tin cans which it manufactures itself from imported plate. One of the many curious features of our tariff laws is the system of drawbacks by which the duty on imported materials made into goods for export is rebated. These rebates or drawbacks are paid on many things, but the amount is insignificant excepting in two or three cases. Out of drawbacks aggregating something like five and a quarter millions in 1900 and five and three-quarters in 1906 by far the largest item was tin plate—$1,848,792 in the former year, $2,252,381.82 in the latter. That is, the man who in 1906 manufactured tin cans to sell to his countrymen paid about 20 per cent more for his material than the Standard Oil Company paid for what it manufactured to sell to the foreigner. Of course the home consumer of tin pails and milk pans paid the higher cost. As a result of taxing ourselves we have a tin plate industry in the United States. In 1900, as a result of the high prices of the decade preceding, 57 tin plate establishments had grown up where ten years before there were none. These 57 establishments employed about 4000 people and turned out nearly $32,000,000 worth of goods. In 1905 the industry had grown to a product of something over $35,000,000, and employed about 5000 people. In order to build up this industry, secure this product, provide places for these workmen, it has been estimated that we taxed ourselves between 1890 and 1900 fully $90,000,000. Taxed ourselves $90,000,000 and let off our largest single consumer scot free. We also have been selling abroad the tin plate we manufacture here at considerably less price than at home. And now observe how in the case of tin plate the protected American manufacturer gets even on this lower price to the foreigner. He takes it out of the laborer—that is the wages of tin plate workers are reduced 25 per cent on tin plate made for export. The Standard Oil trust gets its duties rebated on export work and the tin plate workers get their wages cut!
The contrast in results to the consumer between putting on and taking off a duty are strikingly illustrated by a comparison of the tin plate experiment with the quinine experiment. In 1879 the duty of 40 per cent on this favorite American medicine was removed by a special act of Congress. The extortion practised under the duty had been outrageous, quinine selling in 1878 as high as $4.75 an ounce. Five years after the quinine bill passed the price had fallen to $1.23 an ounce, ten years after to 35 cents, and in 1906 to 16½ cents! Far from destroying the quinine industry in this country as the manufacturer tearfully declared it would, the business goes on prosperously. Whether gains or losses come to the manufacturer the people share with him. He cannot gobble the lion’s share of the one or shift the lion’s share of the other as the thread and starch and tin plate and dozens of other manufacturers can.
Where prices increase faster than incomes, as they did with the great majority in the period we have under consideration, one of two things must happen,—the amount and quality of necessaries are cut, or substitutes are found. Both have happened in a rather startling way in the last twenty years in one of the materials most essential to human health and comfort, woollens. Wool, the world over, has always been accepted as the poor man’s special friend. It protects against cold and damp. It wears well; it looks well. The tradition of woollen garments as a lasting household possession, one of the things which belongs to the outfit of even the humblest, is very strong in every country. “All wool” is the housewife’s boast of her blankets and shawl, the young girl of her winter coat and gown, the laborer of his shirt. It is the assurance on which salesmen depend for winning customers. It is a standard material of clothing as general and as necessary in our climate as wheat is an article of food. But for twenty years this valuable standard material has been every day receding farther from the reach of the great mass of Americans. Many housewives the country over have ceased buying woollen blankets, substituting the cotton-filled puff or “comfort.” Settlement workers and district nurses say that they rarely see a woollen blanket in the houses they visit. Knit cotton undergarments and heavy knit cotton stockings are generally substituted for wool. Many thousands know they cannot think of wool, and dismiss the idea. But so strong is the tradition of wool among the people of cool climates, among Russians, Germans, etc., that a salesman in the shops of the tenement house district declares his slimsiest imitations “all wool.”
A curious person can easily satisfy himself as to the quality of these “all wool” garments by boiling them in caustic alkali. The experiment is very simple and quite conclusive of the amount of wool in the article. If it is “all wool” the alkali makes short work of it, no residue is left after the boiling. Silk will also disappear. Cotton is untouched. Take a baby’s shirt for which you pay 50 cents with the solemn assurance that it is “every stitch wool.” It is well-shaped, finished with a neat shell edge apparently of silk, a ribbon down the front for the buttons, three rows of “silk” stitching around the sleeves. Cut the garment into two pieces and boil one for twenty minutes in a strong solution of alkali. The pieces treated compare now very favorably, fleecy lining shell edge and all, with the piece untouched. The ribbon alone has disappeared. There is not a thread of wool in it.