3. It is in proportion to the increased amount of labor involved that imports of steels increase and exports decrease.-While, as has been shown, the total value of crucible or fine steels is only 2 per cent of the whole steel business, yet there has been imported both under the tariff act of 1909 and 1913 three or four times as much steel in value, of the kind represented by our industry, as was imported in the grades of steel produced in the heavy steel lines of industry, which represent over 98 per cent of the total value of the country. The portion of imports affecting the crucible or fine steel industry has paid from 70 to 75 per cent of the total duties collected. It is apparent, therefore, that European makers can not compete successfully with our abundant natural resources but can and do compete injuriously with our labor in this handcraft industry.

As regards exports, we know that these have averaged over $1,000,000 per day in tonnage lines over fairly long periods of time, while the exports of crucible and fine steels are not over one-half million dollars per year.

There has been much adverse comment on the subject of selling abroad cheaper than at home. With tonnage steels this is possible. With crucible steels it is impossible, unless they were sold below cost. Such fine steels as are exported are specialties and in general bring as much abroad as they do at home. "Dumping" of crucible steels abroad is impossible and in time of decreased domestic markets we have no outlet abroad, but rather a more intensive competition at home.

Under these adverse conditions the Amer can crucible steel industry has been almost at a standstill for 15 years, during which time the open-hearth tonnage of the country has increased some 600 per cent. The classification of steel products under the tariff acts of 1909 and 1913 is not as well done as it was in the Dingley Act of 1897, and the rates of duty have declined at each tariff revision since the act of 1897. This decline is possibly justified in the case of products not involving excessive investment and labor costs. Excluding the period of the war, exports of tonnage steels exceeded the imports by more than 10 to 1, while imports of crucible and fine steel exceeded the exports by nearly the same ratio. The reason is apparent from the above explanation of fundamental differences between the tonnage steel business and the quality steel business, yet these differences have been given scant consideration in the construction of our tariff laws.

An equitable degree of protection for the labor and capital in this industry would be secured by a scale of duties ascending with the import valuation. The higher the import value the higher should be the rate of duty, because almost without exception the increased valuation of steel is due to the additional proportion of labor represented in its production.

Assuming that no changes will be made in the rates of duty under paragraph 102, reading "Chrome or chromium metal, ferrochrome," etc., and after more thorough investigation that tungsten ore, chrome ore, graphite, and magnesite, etc., are allowed to remain upon the "free list," we propose the following changes in the wording of certain paragraphs in the tar.ff act of October 3, 1913:

"PAR. 105. Boiler or other plate iron or steel, and strips of iron or steel, not specially provided for in this section: sheets of iron or steel, common or black, of whatever dimensions, whether plain, corrugated, or crimped, and skelp iron or steel, whether sheared or rolled in grooves, or otherwise, 12 per cent ad valorem; plate steel and saw plates or sheets, cut or sheared to shape or otherwise, or unsheared, made by the crucible or electric process, or by whatever process made, containing more than six-tenths of 1 per cent of carbon, or allows such as nickel, cobalt, vanadium, chromium, tungsten, molybdenum, and similar alloys (excepting, however, that manganese and silicon shall not be considered alloys unless present in the steel in excess of 1 per cent), 35 per cent ad valorem.

“PAR. 106. Iron or steel anchors or parts thereof; forgings of iron or steel, or of combined iron and steel, but not machined, tooled, or otherwise advanced in condition by any process or operation subsequent to the forging process. not specially provided for in this section, 12 per cent ad valorem; the foregoing when made by the crucible or electric process, or by whatever process made, containing more than six-tenths of 1 per cent of carbon, or alloys such as nickel, cobalt, vanadium, chromium, tungsten, molybdenum, and similar alloys (excepting, however, that manganese and silicon shall not be considered alloys unless present in the steel in excess of 1 per cent), 30 per cent ad valorem; antifriction balls, ball bearings, and roller bearings, of iron or steel or other metal, finished or unfinished, and parts thereof, 35 per cent ad valorem.

"PAR. 108. All iron or steel sheets, plates, or strips, and all hoop, band, or scroll iron or steel, when galvanized or coated with zinc, spelter, or other metals, or any alloy of those metals; sheets or plates composed of iron, steel, copper, nickel, or other metal with layers of other metal or metals imposed thereon by forging, hammering, rolling, or welding; sheets or plates of iron or steel, or tagger's iron or steel, coated with tin or lead, or with a mixture of which these metals, or either of them, is a component part, by the dipping or any other process, and commercially known as tin plates, terne plates, and tagger's tin, and tin plates coated with metal, and metal sheets decorated in colors or coated with nickel or other metals by dipping, printing, stenciling, or other process, 15 per cent ad valorem; sheets of iron or steel, polished, planished, or glanced, by whatever name designated, including such as have been pickled or cleaned by acid, or by any other material or process, or which are cold rolled, smoothed only, not polished, and such as are cold hammered, blued, brightened, tempered, or polished by any process to such perfected surface finish or polish better than the grade of cold rolled, smoothed only, all the foregoing when made by the crucible or electric process, or by whatever process made, containing more than six-tenths of 1 per cent of carbon, or alloys such as nickel, cobalt, vanadium, chromium, tungsten, molybdenum, and similar alloys (excepting, however, that manganese and silicon shall not be considered alloys unless present in the steel in excess of 1 per cent), 35 per cent ad valorem.

"PAR. 110. Steel bars and tapered or beveled bars; mill shafting; pressed, sheared, or stamped shapes, not advanced in value or condition by any process or operation subsequent to the process of stamping; hammer molds or swaged steel; gun-barrel molds not in bars; all descriptions and shapes of dry sand, loam, or iron-molded steel castings, sheets, and plates; all the foregoing, if made by the Bessemer, Siemens-Martin, open-hearth, or similar processes, not containing alloys, such as nickel, cobalt, vanadium, chromium, tungsten, molybdenum, and similar alloys, 8 per cent ad valorem."

We suggest a new paragraph, for convenience designated here as

"PAR. 110. Steel ingots, and all descriptions and shapes of dry sand, loam, or iron-molded steel castings, sheets, and plates, when made by the crucible or electric process, or by whatever process made, containing more than six-tenths of 1 per ment of carbon, or alloys such as nickel, cobalt, vanadium, chromium, tungsten, molybdenum, and similar alloys (excepting, however, that manganese and silicon shall not be considered alloys unless present in the steel in excess of 1 per cent), 15 per cent ad valorem; cogged ingots, blooms, billets, and slabs, die blocks or blanks, made by the crucible or electric process, or by whatever process made, containing more than six-tenths of 1 per cent of carbon, or alloys such as nickel, cobalt, vanadium, chromium, tungsten, colybdenum, and similar alloys (excepting, however, that manganese and silicon shall not be considered alloys unless present in the steel in excess of 1 per cent), 25 per cent ad valorem ; bars and tapered or beveled bars; pressed, sheared, or stamped shapes not advanced in value or condition by any process or operation subsequent to the process of stamping; hammer molds or swaged steel; gun-barrel molds not in bars; alloys used as substitutes for steel in the manufacture of tools; rolled wire rods, round, flat, or in any other shape, in coils or bars not smaller than twenty one-hundredths of 1 inch in thickness, and steel not specially provided for in this section, all the foregoing when made by the crucible, electric, or cementation process, either with or without alloys, finished by rolling, hammering, or otherwise, and all steels by whatever process made, containing more than six-tenths of 1 per cent of carbon, or alloys such as nickel, cobalt, vanadium, chromium, tungsten, molybdenum, and similar alloys (excepting, however, that manganese and silicon shall not be considered alloys unless present in the steel in excess of 1 per cent), 35 per cent ad valorem.

"PAR. 113. Rivet, screw, fence, nail, and other iron or steel wire rods, whether round. flat, or square, or in any other shape, and flat rods up to 6 inches in width ready to be drawn or rolled into wire or strips, all the foregoing in coils or otherwise, including wire rods and iron or steel bars, cold rolled, cold drawn, cold hammered, or polished in any way in addition to the ordinary process of hot rolling or hammering, not specially provided for in this section, 10 per cent ad valorem; all the foregoing when made by the crucible or electric process, or by whatever process made, containing more than six-tenths of 1 per cent of carbon, or alloys such as nickel, cobalt, vanadium, chromium, tungsten, molybdenum, and similar alloys (excepting, however, that manganese and silicon shall not be considered alloys unless present in the steel in excess of 1 per cent), 45 per cent ad valorem: Provided, That all round iron

or steel rods smaller than twenty one-hundredths of an inch in diameter shall be classed and dutiable as wire.

"PAR. 114. Round iron or steel wire; wire composed of iron, steel, or other metal, except gold or silver, covered with cotton, silk, or other material; corset clasps, corset steels, dress steels, and all flat wires and steel in strips not thicker than No. 15 wire gauge and not exceeding 5 inches in width, whether in long or short lengths, in coils or otherwise; and whether rolled or drawn through dies or rolls, or otherwise produced; telegraph, telephone, and other wires and cables composed of metal and rubber, or of metal, rubber, and other materials; iron and steel wire coated by dipping, galvanizing, or similar process with zinc, tin, or other metal; all other wire not specially provided for in this section and articles manufactured wholly or in chief value of any wire or wires provided for in this section; all the foregoing 15 per cent ad valorem; all of the above when made by the crucible or electric process, or by whatever process made, containing more than six-tenths of 1 per cent of carbon, or alloys such as nickel, cobalt, vanadium, chromium, tungsten, molybdenum, and similar alloys (excepting, however, that manganese and silicon shall not be considered alloys unless present in the steel in excess of 1 per cent); wire heddles and healds, and wire rope, 50 per cent ad valorem,

"PAR. 117. All metal produced from iron or its ores, which is cast and malleable, of whatever description or form, without regard to the percentage of carbon contained therein, whether produced by cementation, or converted, cast, or made from iron or its ores, by the crucible, electric, Bessemer, ClappGriffith, pneumatic, Thomas-Gilchrist, basic, Siemens-Martin, or open-hearth process, or by the equivalent of either, or by a combination of two or more of the processes, or their equivalents, or by any fusion or other process which produces from iron or its ores a metal either granular or fibrous in structure, which is cast and malleable, excepting what is known as malleable-iron castings, shall be classed and denominated as steel.

“ PAR.121. Axles, or parts thereof, axle bars, axle blanks, or forgings for axles, whether of iron or steel, without reference to the stage or state of manufacture, not otherwise provided for in this section, 10 per cent ad valorem; the foregoing when made by the crucible or electric process, or by whatever process made, containing alloys such as nickel, cobalt, vanadium, chromium, tungsten, molybdenum, and similar alloys (excepting, however, that manganese and silicon shall not be considered alloys unless present in the steel in excess of 1 per cent), 35 per cent advalorem: Provided, That when iron or steel axles are imported fitted in wheels, or parts of wheels, of iron or steel, they shall be dutiable at the same rate as the wheels in which they are fitted.

"PAR. 127. Lap-welded, butt-welded, seamed, or jointed iron or steel tubes, pipes, flues or stays; cylindrical or tubular tanks or vessels for holding gas, liquids, or other material, whether full or empty; flexible metal tubing or hose, not specially provided for in this section, whether covered with wire or other material, or otherwise, including any appliances or attachments affixed thereto; welded cylindrical furnaces, tubes or flues made from plate metal, and corrugated, ribbed, or otherwise reinforced against collapsing pressure, and all other iron or steel tubes, finished, not specially provided for in this section, 20 per cent ad valorem; seamless steel tubing and hollow bars for manufacture of hollow drills, made by the crucible or electric process, or by whatever process made, containing more than six-tenths of 1 per cent of carbon, or alloys such as nickel, cobalt, vanadium, chromium, tungsten, molybdenum, and similar alloys (excepting, however, that manganese and silicon shall not be considered alloys unless present in the steel in excess of 1 per cent), 35 per cent ad valorem."

J. A. MATHEWs, President.

THE VANADIUM-ALLOYS STEEL Co.,
Latrobe, Pa., January 24, 1921.

1. Dr. John A. Matthews in presenting brief of the Crucible Steel Co. of America proposing changes in the tariff act of October 3, 1913, stated orally that the brief was prepared after conference with other representatives of the toolsteel industry, mentioning the writer as one. In presenting the brief it was necessary to assume that no changes will be made in rates of duty under paragraph 102, reading "chrome, or chromium metal, ferro-chrome," etc.

2. Our company believes that after a more thorough investigation fair reasonable protection will be given to commodities under paragraph 102, and in

such case additional compensatory duty must be provided for on articles manufactured therefrom.

3. The writer has no information to qualify him as an adviser on other minerals, but he has been interested in tungsten mining, and knows that the request of the tungsten producers for a duty of $9 a unit on tungsten ore is justified. With a duty on tungsten-bearing ores sufficient to limit the importation of oriental tungsten-bearing ores, and a duty which will also give the American producers confidence to invest sufficient money to develop low-grade ore bodies known to exist in the States of California, Nevada, New Mexico, and Arizona, our country can produce a major portion of our requirements. I so testified before your committee on behalf of the Timberlake bill (H. R. 4437), and have no reason since to change my opinion.

4. Assuming that a duty of $9 a unit is levied on tungsten-bearing ores, a duty of $1 per pound of tungsten content should be provided for on metallic tungsten and ferrotungsten. Assuming a duty of $9 a unit is levied on tungsten-bearing ores, and that a duty of $1 per pound of tungsten content, the minimum that can be given consideration, is levied on tungsten content in ferrotungsten and metallic tungsten, then in addition to revision suggested by Dr. Matthews on behalf of the Crucible Steel Co. of America, a compensatory duty of either 25 cents per pound on high-speed steels containing 12 per cent or over of tungsten must be provided, or a duty of 14 cents per pound of steel per cent or fraction thereof of tungsten content.

5. We strongly recommend the first mentioned, and in such case a compensatory duty of 15 cents per pound should be provided for steels containing from 4 to 12 per cent tungsten content, and a duty of 5 cents per pound should be provided on steels containing tungsten above one-fourth of 1 per cent and below 4 per cent.

ROY C. MCKENNA, President.

BRIEF OF THE HESS STEEL CORPORATION, BALTIMORE, MD.

The manufacturers of electric and crucible steel in the United States must have the protection of a reasonable and proportionate tariff on imports of steels of this class.

As said by Dr. John A. Mathews, president of the Crucible Steel Co. of America, in his statement to your committee last week:

"Crucible or fine steel industry is essentially a handcraft industry. "From 60 to 90 per cent of the cost of fine steel goes to labor.

"European makers * * * compete injuriously with our labor in this handcraft industry."

As a receiver of the above corporation and because of my experience in connection therewith, the truth of the situation in the United States with respect to crucible and fine steel manufacturing as stated by Dr. Mathews is forcibly brought home to me.

I urge that you and your committee give full consideration to Dr. Mathews's very lucid statement and to his recommendation that "an equitable degree of protection for the labor and capital in this industry would be secured by a scale of duties ascending with the import valuation. The higher the import value, the higher should be the rate of duty, because almost without exception the increased valuation of steel is due to the additional proportion of labor represented in its production."

FERRO-ALLOYS.
[Paragraph 102.]

C. C. PUSEY.

PAUL J. KRUESI, REPRESENTING SOUTHERN FERRO-ALLOYS CO., CHATTANOOGA, TENN.

Mr. KRUESI. The ferrosilicon industry is one which was born in the United States about 20 years ago. The material being unprotected by the tariff bill then in effect suffered from foreign competition, the products of which came in as "metals, unwrought" at a duty of only $4 per ton. The result was a transfer of the industry to 31700-21-PT II- -2

Europe for lack of adequate protection of the American product, which could not be made as cheaply as that of Europe.

About 1906-7 the industry "came back" or was revived in this country because during the interval when American competition had been killed, the German syndicates (or "skindicates," as I call them), controlling the sale of the foreign-made product in the United States. had begun to charge such high prices as made the manufacture of ferrosilicon seem attractive to Americans again.

Effort was, therefore, made to revive the industry in this country, and two plants were started, one of which managed to hold out for about 10 years against the German syndicate.

The Germans thereupon again reduced the price at which they sold their product in this country, lowering it to $60 per ton, which was well known to be below the American cost of production.

Under the Payne-Aldrich tariff bill a duty of 20 per cent was placed on ferrosilicon, whereupon the Germans reduced the price on their sales in this country to $52 per ton, in a plain effort to block or kill American competition.

Later, on the outbreak of the European war. ferro-alloys were in such great demand that it was necessary to build plants to produce them, as steel was the "key" industry of the war, and the steel industry in turn was entirely dependent on the home production of ferro-alloys. The tonnages needed suddenly and continuously were enormous and steady and reliable sources of supply were vital. Hence, under the stimulus of war demand and Government encouragement numerous plants were built, which not only fully met the demand in this country but also that of the countries with which we were allied in the war.

These plants are well scattered geographically, being located in the States of Oregon, Colorado, California, Tennessee, Alabama, Maryland, Maine, and New York, although practically all of them are now idle for lack of business, which is partly due to lack of protection against the more cheaply made foreign alloys.

The question was asked several times as to whether foreign goods were coming into this country now or whether we manufacturers were merely fearing that they were going to come in. In our case it is not a question of something we are afraid might happen, but of something that has already happened and is occurring every day. It is a question of whether or not the Government wants to see the destruction of an industry which is vital to its independence and selfsufficiency-if it does not, we shall have to be given relief now.

Take the question of Canadian competition. for example. One ferrosilicon plant within sight of the American border has a production of 42.000 tons per year, and this added to the production of other Canadian plants makes an annual capacity of 70.000 tons, which is fully equal to the entire American consumption of 50 per cent ferrosilicon. Canada, on the other hand. is not a large manufacturer of steel, and can consume less than 4,000 tons per annum or, say, 5 or 6 per cent of its production. In consequence, the ferrosilicon or ferroalloy plants in Canada regard the good old U. S. A. as their happy hunting ground, and use this country as their dumping ground for material which they can not possibly consume at home.

In 1919, according to our Government statistics, there were imported from Canada 10,395 tons of ferrosilicon, valued at only $60.20