legislation you had in mind the actual provisions of the bill that was before us. Mr. COBB. As to that, I look toward the whole question as a question of public sentiment. I have found that in our Boston Chamber of Commerce and other chambers of commerce men do not stand up against the sentiment of their associates. On the average we average to be pretty right-minded, and when sentiment is in favor of a certain thing it always has an effect. The greatest trouble is the system on which our tariff legislation has been conducted. It is not the trouble with the men. If they see that the sentiment of the country is in favor of it, that tariff revisions are to be based on investigations made by a tariff commission, there will be no trouble. Mr. FORDNEY. Let me ask you one question. Mr. COBB. Certainly. Mr. FORDNEY. In the Good bill, page 4, section 4, this language is used: That said commission shall tabulate the results of its investigations and submit the same to Congress, together with any explanatory report of the facts so ascertained, at such time or times as Congress, or either branch thereof, shall designate. Is not that an invitation to the tariff commission, if such an one were created, to constantly recommend changes and keep the business interests of the country in a turmoil each and every day in the year for all time to come? Mr. CоBB. In answer to that Mr. FORDNEY. Pardon me. Let me conclude. Which would be, in strong terms, constant damnation to the business interests of the country-tariff agitation. Mr. COBB. In answer to that I would like to read section 6 of Mr. Lenroot's bill, which was changed this morning as we were sitting here Mr. Good, Mr. Lenroot, and myself and which, I think, would cover that point and would be satisfactory to all around: That said commission shall make annual reports to Congress of its investigations and such special reports as may be called for by the President or either House of Congress. Said reports shall be printed as public documents. The annual report shall be published and ready for distribution Mr. GAINES. What are you reading from? Mr. Cовв. Page 8 of the Lenroot bill. Mr. GAINES. Is it a proposed amendment? Mr. COBB. It is a changed form that was discussed this morning. Mr. GAINES. I beg your pardon; I did not mean to interrupt you. Mr. COBB (reading): The annual report shall be published and ready for distribution on the first Monday of December of each year. Upon demand of the President or of either House of Congress, the commission shall make a report of all testimony and information upon which its reports are based. I do not speak for Mr. Lenroot, but as I understood in the discussion he intends to make that change. Mr. LONGWORTH. Then it would follow that that part of Mr. Lenroot's bill would be stricken out which provides for the annual report to Congress under given circumstances, would it not? on. Mr. COBB. It would be? Mr. LONGWORTH. Yes. Mr. COBB. That is a question that there is not a definite agreement There are many people who believe the commission should go on reporting that is to say, there might be a number of years when there would be no report called for. Still, the commission, many people believe, should be doing its work and presenting such tabulations of facts as it produced-that is, to report the information and definite facts that they had acquired during the year to Congress and the President, but not with recommendations. Mr. LONGWORTH. Do you believe that yourself? Mr. CоBB. Unfortunately, Mr. Longworth, I am not myself. I will state that I do not like to express personal opinions. I will simply say that there is wide and strong feeling that there should be an annual report made. I do not think it is vital, and I do not think that we would oppose a bill that did not have it in. I merely say that the form of this which we talked over this morning would cover all the different things. Mr. LONGWORTH. Will you read that first sentence again? That said commission shall make annual reports to Congress of its investigations and such special reports as may be called for by the President or either House of Congress. Mr. LONGWORTH. That is, you strike out "it may deem advisable ?" Mr. COBB. Yes; that is to say, strike out the power of the board of using its own judgment, which is a vital difference. Mr. GAINES. Will you permit me to ask you a question or two, Mr. Cobb? Mr. COBB. Certainly. Mr. GAINES. The bill provides that- No person who is a member of Congress, and no person who is in any manner pecuniarly interested in the production or importation of any article or articles enumerated in the customs and tariff law shall be eligible to hold such office. Would that bar a farmer? He is pecuniarily interested in matters that are protected, if he is producing grain, hogs, sheep, cattle, or horses. Mr. COBB. I understood this morning when that point was raised that Mr. Good was entirely of the opinion that that might wisely be changed, and I should say it would be unwise to bar a man who had any interest in production. That would practically bar every one, if it were technically and absolutely construed-that is to say, as was said this morning, there is hardly a man in the United States who is not interested in producing something. Mr. GAINES. So, then, the provision with reference to the interests of the members of the commission, as being manufacturers, farmers, producers, or importers, would have to go out? Mr. COBB. I think there might be some general provision put in there. I do not think that our organization feels that defining the experience of commissioners is of importance, and yet there is no objection, provided it is general enough so that it does not cramp the power to get the right sort of men. Mr. HILL. Do you not think it is better to leave out all those restrictions and leave the personnel of the commission subject to the appointment of the President? Mr. COBB. I think the result of that would probably be as good as the other. Mr. GAINES. The bill provides that it shall be the duty of the commission to ascertain the cost of production in this country and the cost of production abroad; and in order to enable them to accomplish that it gives them power to summon witnesses, the production of papers, etc. They could not, of course, compel a foreigner to testify. They could not reach him. Mr. COBB. No, sir. Mr. GAINES. So then, a tariff commission proceeding under the provisions of either one of the bills, as I understand them, would have power to exact facts with reference to trade and manufacture from the Americans, and spread such facts in public documents, which they could not compel foreigners to disclose. Is that true? Mr. CoBB. Yes, sir. Mr. FORDNEY. Then the whole provision would fail. Mr. GAINES. Then the provision would be effective in so far as it compels testimony and disclosures of information on the part of Americans, but it really would fail in so far as it gave any power to exact information from foreigners. Is not that correct? Mr. CoBB. Stated in that way, yes; but I think that Mr. Emery's speech in Chicago is very enlightening on that point. That is to say, the drastic power to extort testimony is not the power that is going to bring the results. There is a point which you have got to consider. In any complicated manufacturing plant the costs of different articles have got to be more or less subject to questions of judgment. That is to say, if a man is making ten things in one plant, the distribution of certain items of cost has got to be a question of judgment. Mr. GAINES. The matter of cost is a matter of accounting, and that is not an exact science by any means, is it? Mr. COBB. Yes, sir; accounting is an exact science. Mr. GAINES. Is it possible? Do you not mean bookkeeping rather than accounting? Do you mean to say that accounting is an exact science? Mr. CoBB. I mean to say this. In any complicated manufacturing industry a man under compulsion could probably truthfully answer questions without really giving much information. Mr. GAINES. Yes. That is as to the skill, and the willingness of the witness to disclose. But is it possible to tell, for instance in railroading, just how much it costs to move a ton of material a certain distance; or to tell what proportion of charges, taxes, and overhead charges are to be apportioned to a given part of the business? I have always thought that that was one of the most difficult and one of the most debated propositions in the country. Mr. CoBB. I think the question of transportation is a very complicated one more complicated than most manufacturing questions; but I do think that the work in railroad accounting has made wonderful strides in the last few years in arriving at costs. Mr. GAINES. But that shows that it is not an exact science, does it not? Mr. COBB. It does. Mr. GAINES. Now, you say that transportation is a thing that is peculiarly complicated. Take a farm. Suppose one has 50 acres of farm land, and he has 20 acres in corn, and he has 5 acres in garden, and the rest, we will say, in timber-woodland. Now, can he tell exactly what it costs him to raise a bushel of corn? Can he tell what proportion of his own labor or that of his hired men is expended upon the timber, or what part ought to be charged to the corn and what to potatoes? I do not believe that the difficulty is in the transportation. The point of the question is this: I believe that the difficulty is that accounting is not an exact science; not that transportation and some one or two other lines of industry are peculiarly complicated. Mr. COBB. I will answer that in this way. To go to one farmer and take his figures probably would not be a reliable basis, but if you go to 100 farmers or to 200 farmers and take their figures, and analyze and average them, as an expert economist trained for such work is enabled to do, the result would be very exact and very reliable. Mr. GAINES. You were at one time a manufacturer of woolen goods and of cotton goods, I believe? Mr. COBB. Yes, sir. Mr. GAINES. In order to test the certainty of accounting, will you tell me what your average profit was upon woolen goods? Mr. COBB. Why, it has been a good many years Mr. GAINES. I mean per yard. Mr. COBB. It has been a good many years since I had active participation in it, and the goods that were made in the mill that I was connected with varied all the way from 12 cents a yard to 60. Mr. FORDNEY. Profit? Mr. COBB. No; the prices at which they were sold. Mr. GAINES. The average profit per yard, I mean. Did not your concern know that? Mr. COBB. We certainly knew the cost of our goods as we made them. Mr. GAINES. Then did you not know proportionately what they sold for? Mr. COBB. Yes, sir. Mr. GAINES. That was the simplest end of your difficulty. You also knew, Mr. Cobb, the average profit you were making per yard of your output? Mr. COBB. Yes, sir. Mr. GAINES. Can you give me what that was? Mr. COBB. It varied very much. There were certain years when there was a profit and other years when there was a loss. In a general way I would say that that particular mill averaged to pay during that time, I think, 10 per cent dividends, and that was the profit in the business. Mr. GAINES. What is about the average profit on a yard of woolen goods, Mr. Hill? Mr. HILL. Five cents. Mr. GAINES. How would you find the cost of producing in foreign factories, assuming you could get Mr. HILL. Permit me to qualify my statement. I do not mean heavy overcoating-but the ordinary men's suitings would probably average 5 cents a yard. Mr. GAINES. How would you secure similar information from the foreigner? Mr. COBB. That is a question that I could make an answer to; but you gentlemen have at your command the Tariff Board, who have gone into these things, and who can answer these questions much more intelligently and with much more experience than I can; and, while I will attempt to answer it Mr. GAINES. Certainly; if you prefer not Mr. GAINES. I see your point exactly. Mr. COBB. I really do not feel that the answer that I could make would be nearly as good an answer as those men could make. They have been at work on this thing for the last year. Mr. GAINES. You spoke of the Tariff Board, and you said something about the investigation of the cost of the production of wood pulp. Are they investigating that question now, do you understand? Mr. COBB. Did I say wood pulp? Pulp paper, I think I said. I Mr. Cовв. I did not mean to state, absolutely, those figures. merely met Mr. Emery the other day, and in talking about the subject he made a statement which I tried to repeat. I do not recall whether the article was wood pulp or pulp paper. It was merely the fact that in answer to a certain question that he had put to the manufacturers in a certain line over 90 per cent of the producers had come forward and willingly joined to help him in getting at results. That was the fact. It was not a question of wood pulp. Mr. GAINES. My line of inquiry is with reference to the difficulty of securing similar information abroad to that which could be procured here, and with reference to the wide divergence of opinion which is possible in estimating the costs or in the manner of accounting. The whole tendency of my question is this: Do you not believe after all that it would come back to the inherent fundamental difference of thought between people on this subject, as to whether the manager for Jones & Brown told the truth, intending to do it, undoubtedly, or whether representatives of some importers of structural steel told the truth, also intending to do it, about the interests here and abroad? Mr. COBB. I will answer that question as I did a little different question by saying that if any five of you gentlemen devoted your lives to this problem you could get results that would be of enormous value to this country on this proposition. Mr. GAINES. I do not believe you know how hard some of us have been studying, and how little good some people think our studies have done us. Mr. Cовв. No one knows better than I how you have studied; but after 10 years devoted to this one problem I think that you would have acquired more information than you have to-day. Mr. LONGWORTH. Is not this about the situation, so far as finding out the foreign cost is concerned: That it would be absolutely impossible for any body of men in America to go abroad and find out the exact cost of producing a given article at any one factory, but that during the course of years those same men investigating all kinds of questions over there would finally come to a pretty fair determination of about what those goods were selling for, and generally whether these various factories were making a very large profit or a reasonable profit? They could certainly find out what the wages were, and within a few years they would come to a pretty accurate knowledge, without having recourse to their books and papers or compelling them to testify, of about what it was costing to produce that article. Mr. COBB. I think with care and a little time, for all practical purposes, the information could be secured; and I will say, in addition to 70470-10-3 |