Mr. MILES. Yes, Senator. These tables show that the United States was helped rather than hurt industrially by the war. It is by far the greatest manufacturing nation in the world, showing in 1919 a total production of manufactures of $62,000,000,000 as reported in the census, but only about one-third of that, or $20,000,000,000, when allowance is made for duplications.

This allowance, by the way, is important.

It is erroneous to state our exports of highly finished manufactured products in percentages of this $62,000,000,000. In this gross total, for instance, hides are counted and then recounted as leather, which is again counted in shoes and handbags. So pig iron is counted, and then recounted as castings, which are again counted in machinery. In comparing exports of highly finished products with this census total either this total must be divided by three or the highly finished exports multiplied by three. We then see that we are getting on better than usually reported; with this further advantage that these exports carry a minimum of raw materials, which we should conserve, and a maximum of wages and intelligence, which we want to expend.

Our most highly protected industries are now exporting great totals, showing less need of highly protective duties than heretofore; among these industries being cottons, glassware, cutlery, furs, automobiles, chinaware, and hosiery. Our imports of highly finished products, prewar and postwar, have been so small a percentage of domestic production, often only from 2 to 8 per cent, that it seems foolish to wish to restrict them and further lessen our enjoyment of articles of taste and convenience.

In the 29 highly finished industries shown in our table exports increased from $137,619,000 in 1914 to $941,609,000 in 1920, or 700 per cent, while imports increased only from $190,437,000 to $293,258.000, or 50 per cent.

The most remarkable fact concerning imports is not indicated by figures. Our imports of highly finished products are three-fourths noncompetitive, in that they differ in quality or design from domestic products, and are of a kind that domestic manufacturers are generally indisposed to produce. Our genius and the nature of the domestic market impels us to "quantity" production. Three weeks' inquiry in New York City failed to find a piece of cotton cloth made abroad and retailing here at less than 40 cents per yard against the same cloth of domestic manufacture. Scarcely a yard of silk is imported of the kind commonly used, except only the thin, Japanese silk used for linings, which only one domestic manufacturer seems disposed to make. So of woolens, hosiery, glassware, chinaware, collars and cuffs, furs, and other highly finished products. Strictly competing products are virtually embargoed, not, presumably, always by the tariff, for some rates are low, but in the latter case by the genius and energy of our manufacturers and wage earners. tariff wall now is so high on most highly finished products from abroad that they retail here at three times the foreign manufacturers' sales price, or 50 per cent more than the same goods retail abroad. These high tariff rates invite domestic manufacturers to agree upon and enforce such prices as they want up to the top of the tariff wall. Any such increases as the Fordney bill with its American valuation clause proposes would so advance prices of imports of this kind as to virtually stop the revenues of the Government from

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such imports and to cause them to be bought only by such few rich people as are careless about prices. It is much that way now.

The present tariff rates, which were generally low when made, now give nearly twice the protection, measured in dollars, that the exces sive Payne rates gave in 1914. The Senate is urged to reenact the Payne rates. Pages 5408-5411, column 11, show the incomprehensible total that this might cost when prosperity returns if the manufacturers get it and pass it on to the public with the usual increase in prices.

The National Employment Conference declares that high prices are at the bottom of much of our difficulties. The Fordney bill would add billions to prices the American consumer would have to pay. The United States still needs protection, but of a moderate sort. Our factories will be continuously from a fourth to a third idle unless we have great foreign markets.

There are only four great manufacturing nations in the world— Great Britain, France, Germany, and the United States. There seems to be much fear of a revitalized Germany; fear that she will be able to manufacture all kinds of goods so cheaply that she can undersell us here and in the markets of the world. An essential factor in meeting this competition is to deflate the tariff and thereby reduce the cost of production. This deflation will save consumers about $4,000,000,000 annually, and then will follow deflation of prices and of costs of production. Congress objects to high prices, and yet it is the chief offender, because it makes the first price advances in superprotective tariff rates upon which pyramiding acts to the limit. Congress, by deflating the tariff, can cease furthering Germany's advantage from high living and production costs in the United States against low costs in Germany. We can keep German products out of the United States, but we can not keep them out of the neutral markets of the world; and if the factories of the United States are to be kept busy, they must go more and more after foreign markets. This means tariff deflation.

I dislike to mention undervaluations, because to me the dishonesty concerning undervaluations is in those who are willfully making the public believe that there are over 5,000 known cases of dishonest valuations annually, when there are so few as not easily to be estimated. Undervaluation cases mostly concern honest entries at actual purchase prices, believed, however, by the appraisers to be below the general market prices in the country of purchase at the time of exportation, which latter prices are required by the law.

For instance, John Wanamaker, in our early days of golf, employed a Scotch expert who secured the control in America of the famous Silver King golf ball by an enormous purchase contract at 15 per cent below current prices in England, the country of manufacture and sale. Unfamiliar with our law, this expert entered several shipments at his cost price and was amazed when heavily penalized for not entering at the higher current English price. Such errors of judgment constitute over 90 per cent of so-called undervaluations. The penalties are too severe to be risked by importers desirous of staying in the business. You can make them heavier if you wish. As you doubtless know, experts now say, after recent exhaustive consideration, that with 25 more valuation experts abroad there will be no fraudulent undervaluations of consequence..

America's first tariff: This has a lesson for us. It was framed by Alexander Hamilton and passed on July 4, 1789, being the first act of Congress under our present Constitution. It was plainly written, so that each Member of Congress knew what he was voting for and the people knew what they were to pay for.

In this first tariff only saltpeter, crude metals, wool, cotton, dyes, and furs were free. The minimum rate for all else was 5 per cent. The purpose of the act is stated in section 1: "It is necessary for the support of this Government, for the discharge of the debts of the United States, and the protection of manufacturers."

The protective rates on highly-manufactured articles were in the language of the law [part of the first American tariff, referred to, is as follows]:

On all looking-glasses, window and other glass (except black quart bottle); all china, stone, and earthenware; gunpowder; all paints ground in oil; shoe and knee buckles; gold and silver lace, and gold and silver leaf, 10 per cent ad valorem. On all blank books; all writing, printing, or wrapping paper, paper hangings and pasteboard; all cabinet wares; all buttons; all saddles; all gloves of leather; all hats of beaver, fur, wool, or mixture of either; all millinery ready made; all castings of iron and upon split and rolled iron; all leather tanned or tawed, and all manufacture of leather except such as shall be otherwise rated; canes, walking sticks, and whips; clothing, ready made; all brushes; gold, silver, and plated ware, and on jewelry and paste work; anchors, and on all wrought, tin, and pewter ware, 7 per cent ad valorem ; playing cards, per pack, 10 cents; carriages, 15 per cent.

The section here quoted is in length about one-fifth of the whole tariff. Manufactures were 7 to 10 per cent. Only carriages were higher.

American craftsmen were already unusually capable in several fields. Their tendency to take the American market from competitors in the mother country and England's retaliatory legislation being one of the provocatives of the Revolution. Contrast these rates for truly infant industries with the present rates of three to five times these amounts to the most successful industries in the world.

This first tariff occupies three pages of large type in the Treasury volume on American tariffs, each page being about the size of the Fordney bill. Half the space is given to specific duties on foods and a few manufactures, one page to drawbacks on reexports. The remainder is quoted above. Contrast these three pages with the 338 pages required by the Fordney bill for its circumlocutions, for the bewilderment and deception both of Members of Congress, not 15 of whom knew what they were voting for, and of the public that could never know what it was paying for. The jockeying silk schedule in the House bill is longer than the whole tariff that fairminded Alexander Hamilton wrote. It is easier to write a clear and just protective tariff than the sort we have had for 40 years. An obscure law invokes suspicion, if not offhand condemnation. All recent tariffs contain dozens of provisions purposely made obscure by interested persons, misusing the good will of Congress and costing untold millions of dollars, and with no more relation to protection than pocket-picking to hard labor. This is commonly known among the industrial interests. These provisions were injected in the name of labor and American institutions.

It is unpleasant to speak of the fundamental difficulty in our tariff situation for a generation, its dishonesty.