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from an agricultural region and also familiar with the sheep-raising districts farther west, I might make some further suggestions that would throw some light on the situation. You are probably aware that in the latter part of the nineties, that is, of the preceding century, and all along through this century, there has been a very rapid rise in the prices of ordinary agricultural products, particularly food products?

Mr. MARVIN. Yes, sir.

Mr. GREEN. Could you inform me as to whether there was a corresponding rise in the price of wool during that period?

Mr. MARVIN. No, sir; there was not.

Mr. GREEN. That is what I was well aware of. Consequently it became very much more profitable for farmers to raise food products than to produce wool.

Mr. MARVIN. Yes, sir.

Mr. GREEN. And I do not know whether you are aware of the fact or not that during this same period, on account of the increasing price of food products, gradually what had been known as grazing land, and possibly in many instances thought only fit for grazing land, in the West was largely taken up and used for the purpose of raising food products, therefore diminishing the area upon which sheep could be grazed; that is a fact, is it not?

Mr. MARVIN. Yes, sir.

Mr. GREEN. And that is what largely caused the reduction in the number of sheep. Now, turning to another subject, Mr. Longworth asked you with reference to a duty upon tea and coffee. Have you any views to express at this time as to the propriety of levying a duty on food products during this war?

Mr. MARVIN. I would rather not be drawn into the details of a revenue measure of that kind. I do not think I could add anything to the enlightenment of the committee along that line. They involve too many considerations and ought not to be dealt with offhand, it seems to me.

Mr. RAINEY. Mr. Marvin, I understood you to say that in normal times a protective tariff yields ample revenue?

Mr. MARVIN. Yes, sir.

Mr. RAINEY. Did I understand you correctly in that?

Mr. MARVIN. That is the general statement I made; yes, sir.

Mr. RAINEY. You refer to the Payne-Aldrich tariff duty?

Mr. MARVIN. I referred to the period since the Civil War, when for the most part we were under a protective tariff system, in many of the years of which we developed a large surplus.

Mr. RAINEY. Do you know how much money we got during the peak year of the Payne-Aldrich system, which was the highest tariff we ever had?

Mr. MARVIN. The revenue?

Mr. RAINEY. Yes.

Mr. MARVIN. In 1912 the revenue derived from customs duties was $326,000,000.

Mr. RAINEY. Was that the highest?

Mr. MARVIN. I imagine it was pretty near the highest. I think it went $350,000,000 or $360,000.000, perhaps.

Mr. RAINEY. When?

Mr. MARVIN. I have not those facts here, and, of course, I do not keep them in my mind, but there is the fact that in 1912 the revenue from customs under the Payne-Aldrich law was $326,000,000, and for the present year, under your present tariff law, the estimate is it will be about $168,000,000, with greatly increased importations. Mr. RAINEY. And under present war conditions?

Mr. MARVIN. Yes.

Mr. RAINEY. Do you think the amount yielded in the peak year of the Payne-Aldrich tariff bill, which was the biggest we ever got from tariffs, would be sufficient in normal times which are to follow this war?

Mr. MARVIN. Whether that amount of revenue will be sufficient in normal times?

Mr. RAINEY. Whether it will be sufficient in amount when we have a restoration to normal times and when the war is over?

Mr. MARVIN. Sufficient for what?

That

Mr. RAINEY. Sufficient for revenue purposes. You say a protective tariff has always in normal times yielded ample revenue. was your exact language.

Mr. MARVIN. Yes.

Mr. RAINEY. After the war is over, do you think a return to the Payne-Aldrich tariff rates would yield ample revenue?

Mr. MARVIN. After the war is over the expenses of the Government will be greatly increased, of course, and we can not for many years to come hope to-

Mr. RAINEY. After the war is over, if we retire any bonds we will have an annual expense of $5,000,000,000.

Mr. MARVIN. And we can not hope, of course, to raise from customs duties any such proportion of our total revenue as we raised before the war.

Mr. RAINEY. No; of course not.

Mr. MARVIN. But that is not any reason why we should not raise all we can fairly and justly and reasonably.

Mr. RAINEY. We are framing now simply a war-tax bill which will end with the war. What articles besides wool do you think need protection during this war period?

Mr. MARVIN. I think the war itself is the highest form of protection we have had. During the war I have not heard anyone ask for an increase of protective duties.

Mr. RAINEY. And if the war conditions continue indefinitely we will have an ideal tariff from the standpoint of the New England protectionists.

Mr. MARVIN. What do you mean by war conditions"? No man in New England wants this war to last a second longer than necessary to vindicate American rights.

Mr. RAINEY. I said if it does continue, you will have the highest type of protection, as you have just indicated, from the standpoint of your organization. You said that war conditions furnish all the protection anybody needs, did you not?

Mr. MARVIN, Yes, sir.

Mr. MOORE. In order that the gentleman's statements will not be left in that condition, you do not advocate the continuation of the war for the purpose of continuing a protective policy, do you?

Mr. MARVIN. Absolutely not.

Mr. MOORE. On the other hand, you prefer to have the war cease at once in order that we may have an intelligent and efficient tariff policy: is not that the idea?

Mr. MARVIN. The only thing that I know that is worse than free trade, is war.

Mr. RAINEY. My question did not imply that anybody was in favor of the continuation of this war.

Mr. DICKINSON. Mr. Marvin, I would like to ask you a question. The taxation of cotton has been suggested. I did not understand you to say that you favored a direct tax on cotton for the purpose of raising revenue: but if they should put a direct tax on cotton, would you also favor a direct tax on wool?

Mr. MARVIN. I think if you are going to enter into a system of that kind it should be evenly and wisely distributed, and not just a few items picked out. I am not in favor of a tax on cotton or a direct tax on wool unless the necessities of the Government require the distribution of a similar form of taxation on as many similar products as possible.

Mr. DICKINSON. Formerly, under the Payne bill, there was a customs duty or tax on wool; but to levy a tax on cotton would be a different kind of a tax, because the cotton is raised in this country.

Mr. MARVIN. Yes: the gentleman's question referred to a direct tax, an internal tax and not a customs tax, as I understood it.

Mr. DICKINSON. I did not understand you to say you favored a tax

on cotton.

Mr. MARVIN. A customs tax on cotton?

Mr. DICKINSON. No: a direct tax.

Mr. MARVIN. No, sir; not unless the necessities of the Government require a tax of that kind laid on all commodities.

Mr. DICKINSON. But you favor a customs tax on wool?

Mr. MARVIN. Yes, sir.

Mr. DICKINSON. Do you know whether there is now a customs tax on foreign cotton, or Egyptian cotton, or whether that has been taken off?

Mr. MARVIN. In this country?

Mr. DICKINSON. Yes.

Mr. MARVIN. No, sir.

Mr. DICKINSON. There is not one now, but there used to be.

Mr. MARVIN. I do not think there has been.

Mr. GARNER. Yes; there was; on Egyptian cotton.

The CHAIRMAN. Mr. Marvin, there is one matter I want to call your attention to. I am not going into a discussion of the theory of a Democratic tariff or a Republican tariff, because that is something that is not going to enter into the question of our raising revenue. In the framing of the last big revenue bill there was no partisanship involved, and at no time did the Democrats vote one way and the Republicans another. Of course, when we get to talking about protective tariff and tariff for revenue the boys are a little "touchious" and will have little disputes; but there is one matter I want to call your attention to. I understood you to say that with the same rate under the Payne-Aldrich Act we would raise, with the importations now coming in, about $600,000,000.

Mr. MARVIN. That calculation is not based on the rates of the Payne-Aldrich Act, Mr. Kitchin, but on the average rate that prevailed during the Gorman-Wilson Act.

The CHAIRMAN. You said that it was $600,000,000 under the Wilson Act and a little less than that under the Payne-Aldrich Act? Mr. MARVIN. Yes.

The CHAIRMAN. Have you given consideration to the fact that the bulk of the importations or the great increase of importations, as statistics show, are articles that were upon the free list, both under the Underwood Act, the Dingley Act, and the Payne-Aldrich Act; and if you were to take the rates, as I have done, of the PayneAldrich Act, the specific and ad valorem rates, and apply them to the specific articles that come in, you will find you would not get $300,000,000, because there was $1,850,000,000 of imports on the free list, and practically all of those imports, except wool, were on the free list under the Payne-Aldrich Act and the Underwood Act, and only about $850,000,000 of dutiable goods came in. So when you apply the specific ad valorem rate of either the Wilson or especially the Payne-Aldrich Act you will find it would be very difficult to get $300,000,000.

Mr. MARVIN. That shows that the Payne-Aldrich rates were rather low, then, Mr. Kitchin, does it not?

The CHAIRMAN. Yes; they are bound to be low on silk and rubber and tea and coffee and hides, because they were on the free list under the Payne-Aldrich and the Underwood Acts, and a large part of the importations that come in are articles that were on the free list under both acts. I have heard that statement made so often that I have looked into it, and I have found that they have just taken the average rate under each one of the acts and applied that average rate to the total amount of importations, without differentiating between the great increase of importation of articles on the free list and those on the dutiable list remaining practically the same.

Mr. MARVIN. I tried to make it clear that it was the line of my argument that the Gorman-Wilson rate, an average of, say, 21 per cent, was considered at the time very low rate, and probably the country would be willing to concede to-day that an average rate of 21 per cent was a low rate. With such an average rate applied to present importations, necessarily the income derived would be a great deal larger than it is with a rate of only 6 per cent, about. The CHAIRMAN. But you should not take the average rate.

Mr. MARVIN. And I thought we had gone too far in reducing the

rate.

The CHAIRMAN. Both under the Dingley bill, and the Wilson bill, and the Payne-Aldrich bill the free importations and dutiable importations are just about the same. The importations of articles on the free list both under the Payne-Aldrich Act and the Underwood Act are just about double. Now, of course, that applies to either one of the theories and I just wanted to call your attention to that with reference to the basis of making your average.

Mr. MARVIN. Of course, the application of my argument would involve the application of duties to many articles now on the free list and to extending the dutiable list as well as raising the rate.

Mr. GARNER. Mr. Marvin, I would like to call your attention to one thing. In making up the last revenue bill the House of Repre

sentatives placed a 10 per cent ad valorem on all imports. The bill went over to the Senate and the Senators from New England insisted it go out of the bill. Was that the viewpoint of your organization?

Mr. MARVIN. The viewpoint of our organization was that the application of a flat rate was not a just way of getting at the question. Some items might well have stood a 10 per cent increase, but it would have applied all along the line and would have brought about very serious disarrangement in certain lines of manufacture, and it would not have borne equitably on the product.

Mr. DICKINSON. Mr. Marvin, you referred to the comparatively small amount collected in customs duties this last year, I believe, $168,000,000.

Mr. MARVIN. That is the estimate for the current fiscal year. Last year it was $206,000,000.

Mr. DICKINSON. Now, that reduced amount or lower amount collected is due largely to the war having cut off our trade relations with some of the countries, is it not? For instance, we used to collect a larger amount of duties or taxes from German goods that came in, and from other countries, and naturally the amount would be much larger than that if the war was not on; is not that true?

Mr. MARVIN. The total imports, you know, have greatly increased. The importations are $1,000,000,000 larger than they were at any period with which I have compared in getting up these figures. For revenue purposes we have larger importations to-day than we have ever had in our history.

Mr. DICKINSON. Do you mean of those things that would bear duties?

Mr. MARVIN. Well, it depends upon what the duties are placed, because to-day we have an exceedingly large free list. Seventy-three per cent of the importations are absolutely free of duty.

Mr. GREENE. Mr. Marvin, with reference to this increase of 10 per cent ad valorem in the rate which was placed in the last revenue bill by the House and afterwards taken out by the Senate, I might say that while that provision, as everybody confessed. was unscientific, yet it was a singular fact, and one I think most of the members of the committee will agree with me upon, that there was less objection to it in the House, and less personal objection, so far as I heard, from anybody that was affected by it, than almost any other provision in the bill. Do you think that was because it did not strike anyone very hard, or can you give any reason why there was no more protest against it?

Mr. MARVIN. I heard a great many favorable comments in New England about the suggestion, not because the details of it were approved but because it showed a tendency toward an increase of tariff duties. They liked the manifestation it gave of looking toward a higher rate of customs duties. It seemed to appeal to New England particularly, so far as I was in touch with the men there, as an indication that we were probably in for a period of what they consider wiser and more reasonable tariff rates; not that they approved the suggestion itself, because, as you say, it was not scientifically arranged and did not take into consideration different conditions.

The CHAIRMAN. We are very much obliged to you, Mr. Marvin.

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