tariff that are the raw materials of manufactures are prevented by high duties from coming into the country. They are not prevented entirely, but their cost is very much increased to the manufacturer. If those taxes were removed, so that manufacturers could get their raw material at less cost, they could sell their produce in the markets of the world at lower prices and could compete with other countries; compete with England for example. I do not say that we can compete on equal terms in all respects with England; but this is a wide world, and there must be a great many places where we can sell goods at 90 cents, but where we cannot now afford to sell them at less than a dollar.

The CHAIRMAN. Assuming that that was done and that we commenced this export trade to other countries, would we not be met in the markets of the world with the goods already supplied by Great Britain and other countries, and would we not have to compete with them for those markets?

Mr. WHITE. We would have to compete with them, undoubtedly

The CHAIRMAN. Would not the supply in those markets increase and the prices fall correspondingly?

Mr. WHITE. Yes, in some cases.

The CHAIRMAN. And would it not come back to exactly the same state of things? Mr. WHITE. In some cases probably it would and in some it would not. We cannot tell till we try.

The CHAIRMAN. Must not consumption be stimulated in advance of the increase of supply, and in order to induce the increase of supply? If we send more supply than there is consumption for, does it do good to anybody, except to the consumer, by putting down prices?

Mr. WHITE. But you' cannot stimulate consumption unless you offer to supply cheaper.

The CHAIRMAN. There is a certain price for any article you like in the market, say 10 cents a yard for cotton. The market is now supplied by Great Britain. We take off all duties interfering with the production of cotton goods, and we proceed to that market with our cotton goods in competition with Great Britain. As a matter of course, the supply being increased, the price will fall to 9 cents or to 8 cents a yard. If we are to keep our ground in that market, we must be able to supply it at 8 or 9 cents a yard; and, in order to do that, we must reduce the cost of our manufactures. Now, where will the reduction come and on whom will it fall?

You

Mr. WHITE. There are a great many things in which the reduction may come. can improve the processes of production (and that this country has certainly done). We make better goods than England-perhaps not at the same money-but the cotton goods that are made in this country are a better article than those made in England. Now, if we make a better article for the same money, we have the advantage in the market.

The CHAIRMAN. But how soon will the people of Great Britain catch up with us, as they do catch up with us in everything where we get ahead of them? It is a race all the time. How long will that superiority last?

Mr. WHITE. That is competition. That is what we understand as competition. Mr. CHAIRMAN. Where do the ultimate results of that competition fall? Must you not get down the wages of labor in this country to the rate of wages in England, as one of the elements of cost? Is there any other way to do it? Has not that been the history of all industries-that competition reduces the wages of labor?

Mr. WHITE. I do not think it has. I think that the wages of labor have increased within the last two hundred years.

The CHAIRMAN. Yes; the purchasing power of wages has increased.

Mr. WHITE. And the money-wages too. What do you mean by the use of the word "purchasing power"?

The CHAIRMAN. I mean that a day's labor will buy more of the necessaries of life now than it did two hundred years ago.

Mr. WHITE. Yes. That is all that there is in the problem, anyhow.

The CHAIRMAN. I suppose that the condition of the laboring man has been greatly improved within the last two hundred years.

Mr. WHITE. Yes; not only of laboring men, but of all other men. I was reading the other day Rogers' History of Agriculture and Prices in England, and I came across an inventory of the furniture in the house of an English nobleman of the thirteenth century, which it was said was an average inventory, too. It did not contain as many conveniences and luxuries as the house of an ordinary laboring man in Great Britain does to-day; nothing like so many.

The CHAIRMAN. That undoubtedly is due to the productive power of machinery. Mr. WHITE. Yes, sir.

The CHAIRMAN. Therefore machinery is a blessing to the laboring men and not an injury? Mr. WHITE. Take it altogether it has been a blessing. There have been a great many individual instances of hardship resulting from the introduction of machinery.

The CHAIRMAN. The competition between countries and people reduces the wages of labor; but there is another force at work increasing the production, and so rapidly, that notwithstanding the competition the laborer is steadily gaining in comforts of every kind.

Mr. WHITE. Yes; I have no doubt of that whatever.

The CHAIRMAN. Now, in regard to the tariff, do you recommend the abolition of all duties on raw materials as far as possible?

Mr. WHITE. Yes.

The CHAIRMAN. Would you go so far as to recommend the imposition of duties on what are known as luxuries-tea, coffee, and sugar-which would be practically a tax upon production, not upon consumption?

Mr. WHITE. I should. Those taxes yield a maximum of revenue at a minimum of cost.

The CHAIRMAN. You are in favor, then, of taking off all protective duties on all the staple articles of industry?

Mr. WHITE. I would not recommend a sweeping reduction of protective duties. I think it should be gradual and even very gradual. I do not believe in striking down large industries that have been established on the faith of existing laws; but I think that they ought to receive notice that there was to be a gradual reduction of duties. The CHAIRMAN. Granted that any change shall be gradual, how would they be stricken down? If we had as much advantage for the production of iron in this country as Great Britain has, why would not my iron business go on? If I can make my iron with as little physical labor as the English can, why should not my business go on?

Mr. WHITE. It would go on.

The CHAIRMAN. Unless the laborer here gets more pay for his day's labor than the laborer in Great Britain gets.

Mr. WHITE. Unless he gets enough more to counterbalance the cost of transportation. The CHAIRMAN. Would not the inevitable effect of this system be the equalization of wages between this country and England?

Mr. WHITE. There will be always the cost of carriage to make up for a difference in wages.

The CHAIRMAN. I suppose you are aware that iron is brought over in ballast sometimes as low as two and sixpence a ton, which is less than I can have it carried in this country for ten miles, so that the item of transportation from England is merely nominal.

Mr. WHITE. But I think we have cheaper coal here than they have.

The CHAIRMAN. Not at the iron-works, I fancy.

Mr. WHITE. I think so.

The CHAIRMAN. At the present time?

Mr. WHITE. Yes; I looked into that four months ago.

The CHAIRMAN. I have been looking into it every week. I know of no iron-works in this country where they can get coal any cheaper than it can be got at Newcastle, in the great iron region of England.

Mr. WHITE. Do you not think that we get it cheaper at Scranton ↑

The CHAIRMAN. Yes.

Mr. WHITE. And at Pittsburg?

The CHAIRMAN. Yes; but there iron ores are dearer.

Mr. WHITE. Do you not think they get it cheaper in Eastern Tennessee?

The CHAIRMAN. Yes; they get it cheaper in Eastern Tennessee, because there the coal and the ore are together; but Eastern Tennessee is far away from the market. The cheapest place in the world for coal and ore, where there is transportation, is the Middleborough region in England, and to-day pig-iron is sold there for $8 a ton without loss to the manufacturer, while there is no region in the United States where pigiron can be produced for less than $10 a ton. Now, no more days' labor enters into the American cost of pig-iron than into the English cost; and the reduction, therefore, will come by the equalization of wages in the two countries. I see nothing impossible in it; but the logical consequence is that the rates of labor must be equal in the two countries, and I see further that, without any extraordinary legislation, they are being equalized.

Mr. WHITE. All that tends to show that there are other elements besides wages which are to be taken into the account.

The CHAIRMAN. Is not that one form in which the reduction must come ?
Mr. WHITE. Yes.

The CHAIRMAN. On the other hand, you hold that the purchasing power of wages will be fully equal to what it now is?

Mr. WHITE. I cannot say that it will be exactly the same. I cannot speak to a nicety on that question. I should think that the purchasing power of wages would increase

with the reduction of general prices. I know that a dollar buys a good deal more now than it did in 1870.

The CHAIRMAN. How about 1860? Will a dollar now buy as much for a workingman as it did in 1860?

Mr. WHITE. I think so.

The CHAIRMAN. Have you examined the question?

Mr. WHITE. I have not examined it closely enough. I have not gone into the details sufficiently to make an exact statement, but I have casually examined the question.

The CHAIRMAN. The committee has made an arrangement to have testimony on that subject; but I wish to say here that it was stated in evidence in the first week of the examination that the laboring men are not getting their supplies from the grocers at as low a rate now as they did in 1860. The fact was testified to by workingmen that while the wholesale prices are down, the retail prices have not come down to a corresponding figure.

Mr. WHITE. I have not gone into the retail prices at all. I have only looked at the wholesale prices.

The CHAIRMAN. How far, in your judgment, is the disturbance which exists due to a large class of middlemen who have to live out of the profits of labor? Do you think that that class is excessive?

Mr. WHITE. Yes; I think that the proof of it is that thirty-seven thousand of them have gone out of business during the last five years.

The CHAIRMAN. Driven out by what?

Mr. WHITE. By bankruptcy. That means that there have been thirty-seven thousand men in the business more than could make a living out of it, and I think there are a great many more who have to go yet.

The CHAIRMAN. Ought we to attempt by legislation to interfere with such a natural process, by which the unnecessary middlemen might be driven out of the business? Mr. WHITE. You could not do it if you tried, and I should think it most unwise to make the attempt, and unjust. Who is to select what man is to go out of the business and to go into something else?

The CHAIRMAN. Yet the complaint is that this is a great evil, that many meritorious and worthy people are ruined by the course of the government in shrinking up the currency; and that that has produced the result that these people were earning a good living prior to the contraction of the currency; and that they are being now driven off by the policy of the government in resuming specie payment. Is it possible to avoid coming to specie payment in a country that undertakes to do a large business in the markets of the world?

Mr. WHITE. The assumption that the fall in the price of gold, or the decline in prices generally, has been brought about by the government is one that I entirely object to. It is not true.

The CHAIRMAN. You think that the government has not done it?

Mr. WHITE. The government has had nothing to do with it.

The CHAIRMAN. It has been the result of something else?

Mr. WHITE. Nothing that the government has done has had anything to do with it. The CHAIRMAN. That something else has been the state of things which enabled us to export more than we imported?

Mr. WHITE. Yes; bringing more gold on the market; and the surplus of the currency has retreated to bank-vaults. It has contracted itself.

The CHAIRMAN. Has there been too much money for the last two or three years? Mr. WHITE. I do not know that there has been.

The CHAIRMAN. You say that the currency retreated to the bank-vaults. What does. that mean?

Mr. WHITE. If there was a surplus of currency (I think there was, but I am not wise enough to affirm it) during a period of speculation, that surplus has retreated to bankvaults and is now unemployed. It has contracted itself. If there has been any contraction, it has contracted itself.

The CHAIRMAN. What is the evidence that the currency has retreated to bank-vaults? Mr. WHITE. The extremely low rate of interest.

The CHAIRMAN. If you found the amount of unemployed reserves in the banks to be out of proportion to the requirements of the law, would that be evidence of it?

Mr. WHITE. Yes; I should consider that that would be an important piece of evidence; and another important piece would be the amount of loans and discounts now, as compared with that of the speculative era.

The CHAIRMAN. Have the loans and discounts been falling off?

Mr. WHITE. I have not looked to see. I know that they increased vastly from 1868 to 1873.

The CHAIRMAN. It is alleged here that these loans and discounts have been purposely diminished for the purpose of producing a shrinkage in order that the capitalists might buy up the property of debtors for a mere song.

Mr. WHITE. That assumes that a man who has $1,000 which he can lend at a fair rate of interest-that will bring him an income-will go deliberately and put that $1,000 in a safe-deposit vault, where he will get nothing for it. I do not believe it at all.

The CHAIRMAN. What do banks loan as a rule-their own capital, or the capital of the community?

Mr. WHITE. The bulk of it is the capital of the community.

The CHAIRMAN. Do individuals have money deposited with banks in moderate sums or in large sums?

Mr. WHITE. Usually in small sums.

The CHAIRMAN. Then the money loaned out is the money of the community, payable on call?

Mr. WHITE. Yes.

The CHAIRMAN. Can there be, in the nature of things, a combination among the people at large to restrict discounts, and thus to produce a fall in values whereby somebody might buy up the property of the community?

Mr. WHITE. It is a perfect chimera; there is no such thing possible.

The CHAIRMAN. Is there anything further in regard to the tariff which you wish to state to the committee ?

Mr. WHITE. No, sir.

The CHAIRMAN. You think that that subject has been fully discussed?

Mr. WHITE. I do not know; but I have said all that I wish to.

Mr. RICE. Did I understand you to say that you think that business is depressed by, or that there is any injurious effect upon it growing out of, the protective tariff? Mr. WHITE. Yes, I do think so.

Mr. RICE. Do you think that it would grow out of any protective tariff whatever! Mr. WHITE. I think so.

Mr. RICE. Do you believe that any protective tariff would have an injurious effect on business?

Mr. WHITE. Yes, I think so.

Mr. RICE. Did I understand you to say that it was because a protective system abnormally stimulates manufactures?

Mr. WHITE. It does if it accomplishes the object for which it is laid. That is the objeet of a protective tariff.

Mr. RICE. Do you think that a protective tariff on manufactures would stimulate the manufacturing business of the country?

Mr. WHITE. I think it would if it accomplished its object. I say that the influence of a protective tariff is to draw capital from a more profitable employment into a less profitable employment. I do not know any other object ever assigned to it.

Mr. RICE. Are you opposed to stimulation generally, where it can be applied, and where it produces greater activity?

Mr. WHITE. Yes, I think it tends to produce commercial crises.

Mr. RICE. Would you be opposed to using fertilizers on a soil where fertilizers increase the production of the soil?

Mr. WHITE. No, not at all.

Mr. RICE. That is stimulating the soil, is it not?

Mr. WHITE. Yes.

Mr. RICE. In Massachusetts we cannot raise corn and other products of the soil as well as you can at the West; would you not allow us to use fertilizers ?

Mr. WHITE. Yes, certainly.

Mr. RICE. If we in the United States cannot carry on manufactures in competition with some other country that is older and richer, and that has established its manufacturing system more thoroughly than we, more strongly than we, would you not allow us to stimulate the manufactures here just as we stimulate the soil?

Mr. WHITE. No.

Mr. RICE. Why not?

Mr. WHITE. Because in the one case you withdraw capital from some place where it is productively employed, and you invest it in another place where, according to your hypothesis, it is unproductively employed.

Mr. RICE. Do you think that there is ample scope and use for all the capital that can be accumulated in those pursuits that do not require stimulants?

Mr. WHITE. There has been, up to a recent period. I think that the case now is somewhat different. I think that the accumulation of capital in this country has arrived at a point where there is more than can be profitably employed, and that it must go into the outside world to find employment.

Mr. RICE. Do you think that we have got our country so nearly finished, so full of everything that is needed, that we do not want to spend our surplus capital here any longer, but that we ought to spend it abroad? Is that your idea?

Mr. WHITE. I did not say that we had got the country so nearly finished. I said that we had more capital in the country to-day than could be profitably employed.

Everybody admits that. To say that the country is nearly finished is a different thing.

Mr. RICE. If business were helped and stimulated into greater activity, would not that employ this surplus capital?

Mr. WHITE. Your use of that word "stimulate" is something I do not understand. If you can create a market for more goods than are produced now, that is a stimulation which I can understand, but any other stimulation I cannot understand.

Mr. RICE. We can create a market for twenty-five million dollars' worth of linen goods by putting a high tariff on linen goods from abroad and keeping them out, and would not that enlarge the market for our home manufacture of linen?

Mr. WHITE. There would be a market in the world for just the same amount of linen goods that there was before. There would be no more linen goods consumed on the whole than there were before. But I admit that you can, by putting on a sufficiently high duty, compel the people here to buy their linen goods at a higher price than they are now paying for them, and in that way you can have the manufacture of linen goods in this country and have an investment for capital which capital does not now possess, at the expense of the consumers.

Mr. RICE. And you thereby employ unemployed capital?

Mr. WHITE. No; not that.

The CHAIRMAN. That would tax the whole community that consumes linen goods in order to employ laborers and give encouragement to capital in that business?

Mr. WHITE. Yes. It is identically the same, in effect, as if the money were taken out of the Treasury. Suppose there is a profit of 10 per cent. on the twenty-five million dollars' worth of linen goods to be manufactured and sold in this country, then you tax the people two millions and a half and pay it over to the persons who employ labor in that business.

The CHAIRMAN. Do you think that things could be improved in this country by any limitation of the hours of labor? One of the allegations here is that some people work a great many more hours than they ought to, and that that leaves other people unemployed, and it is said that if the hours of labor were to be limited that would permit the employment of the unemployed labor of the country. Do you think that a feasible plan for legislation?

Mr. WHITE. No; I do not. That is an infringement upon liberty which I think would. not be tolerated.

The CHAIRMAN. Are you not willing to be restricted in the kind of labor you perform? Mr. WHITE. No, sir.

The CHAIRMAN. Are you willing to be compelled to labor?

Mr. WHITE. I am willing to be compelled to labor when the necessities of my family require it.

The CHAIRMAN. Then you are compelled by natural causes?

Mr. WHITE. Yes.

The CHAIRMAN. You think that it is no part of the functions of government to interfere with the right of individuals to labor?

Mr. WHITE. I think that it is in direct contradiction of the functions of government— a most plain and palpable contradiction of them. The functions of government are chiefly to protect life, liberty, and property.

The CHAIRMAN. But these people say that that is the protection of life; that they are perishing from starvation because some people are doing all the work and leaving others without any work at all; and they ask to be protected by this legislation. Mr. WHITE. By the infringement of somebody else's liberty.

The CHAIRMAN. But is it not part of the business of government (is not that at least the object of society) that the members of society shall be preserved in life, and that measures shall be taken to insure their necessary support? Is not that the main object of society?

Mr. WHITE. The main object of government is to see that people shall be preserved from being maltreated, robbed, or put to death by violence, &c.; but I do not conceive that it is the duty of government to see that anybody has work to do, or rather, has the particular work which he would like to do and the particular rate of wages that he would like to receive. That is what it results in. As Professor Sumner said yesterday, what people want is, not work but wages. If the government has an inexhaustible store of wages to distribute, I have no objection to the distribution; but there is no such store. I will find work for all the unemployed if somebody else will find the wages.

The CHAIRMAN. People come to me every day and ask me to get them on public work. I have scores of applications daily. My house is almost uninhabitable by reason of them. I see that many of them are very respectable and worthy people. What is to be done in such a case?

Mr. WHITE. Do the best you can.

The CHAIRMAN. But they say to me, "There is work here that will support us all,