received by the mines was $23,195,319, the difference of $17,760,855 being the cost of smelting, transportation, and marketing. Of the latter amount, $501,078 represents the smelting loss on silver, leaving the cost of marketing the lead $17,259,777. The cost of production at the mines amounted to $16,249,846. Adding this to the cost of marketing, we have a total cost of producing and marketing the lead amounting to $33,509,623, equal to 4.767 cents per pound. The price received was, as stated, 4.401 cents per pound, showing a deficit of 0.366 cents per pound, or a total deficit on the lead in the three years under consideration of $2,575,019. It is clear that the lead, considered by itself, can not be produced at the prices which have prevailed, even under the present tariff. The production is possible only by reason of the fact that these ores carry silver. It takes all of the lead value and part of the silver value to cover the cost of producing and marketing the lead. The profit is dependent entirely on the by-product. The total surplus earnings for the three years amounted to $6,945,473, or $2,315,158 per annum, or about 8 per cent on the capital invested. If the total value of the silver by-product be credited on the cost of production and this surplus be considered as profit on the lead, it will be seen that the cost of producing and marketing a pound of lead was 3.413 cents and the profit was 0.988 cent per pound, with an average selling price of 4.401 cents. This is without any charge for amortization of the capital invested, for which a proper allowance would be one-half cent per pound. Deducting this, the actual profit was only 0.488 cent per pound and the total profit $1,143,621 per annum, which is less than 5 per cent on the capital invested. With the prospect of a lower duty, the price of lead has already declined to 4.25 cents per pound.

The foregoing statement of the cost of production in the Coeur d'Alene district is verified by the investigations of W. R. Ingalls, from whose work on Lead and Zinc in the United States the following is quoted:

"In Chapter I it was estimated that the cost of producing lead in the Coeur d'Alene in 1907 was in the neighborhood of 3.3 to 3.5 cents per pound, basis New York delivery; i. e., if the price of lead should be 3.5 cents per pound and the price of silver 50 cents per ounce at New York, some of the Coeur d'Alene large producers would realize no profit, even after disregarding allowances for amortization. It would be highly difficult to generalize the capital account in this district, but probably it would not be far out of the way to say that the total cost of producing lead in the Coeur d'Alene is in the neighborhood of 4 cents per pound when silver is worth only 50 cents per ounce. "There is no question that lead can be produced more cheaply in Mexico, Europe, and Australia than in the United States, inasmuch as the price at London for long periods has been lower then 3 cents per pound and the output of the mines is maintained. The superior advantage of the foreign countries is partly in cheaper labor, partly higher grades of ore, which more frequently than in America yield two valuable products, e. g., zinc and lead, as in Australia, and partly to shorter railway hauls. The cost of smelting and refining is as low in the United States as anywhere in the world; the freights on the whole are higher-not per ton-mile, but in the aggregate of miles; the cost of mining per ton of concentrated product is doubtless higher on the whole, which is attributable to the higher rates of wages."

The present duty on pig lead is 2 cents per pound, and on lead in ores it is 1 cents per pound. The rate provided in the bill introduced in the last session of Congress was 25 per cent ad valorem on both classes. The average price of pig lead in London for a period of 32 years, from 1880 to 1911, inclusive, was equal to 2.85 cents per pound. With freight added, the cost laid down in New York would not exceed 3.1 cents, and the proposed duty of 25 per cent ad valorem would amount to 0.78 cent, making the price at New York, duty paid, 3.88 cents per pound. As a matter of fact, very little of the foreign lead that is imported comes in the form of pig lead. It is nearly all in ores and bullion imported from Mexico, to be smelted in bond. Whenever conditions are favorable for importation for consumption it is this lead that is retained in the country, and the charge for freight from Europe has not to be considered.

This duty of 0.78 cent, compared with the present duty of 24 cents, shows a reduction of 63.3 per cent. In the case of lead in ores the reduction will be still greater. Take, for example, a Mexican ore containing 40 per cent lead. What would be the value of the lead in such an ore at the port of entry, say El Paso, Tex.? The cost of smelting and refining, and the freight to New York, which would be $12 per ton of ore, or 14 cents per pound on the lead, must be deducted from the New York price. If the latter be 3.88 cents, we have then a value of 2.38 cents per pound for the lead contained in the ore after the payment of duty. That would give a value of 1.9 cents per pound of lead, and the duty of 25 per cent would be only 0.48 cent, as against 14 cents at present. In that case the reduction would be 68 per cent.

Lower grade lead ores, carrying high silver values, might come in free. If we take, for instance, an ore containing 15 per cent lead, but of such a character that the cost

of freight, smelting, and refining would still be $12 per ton, or 4 cents per pound on the lead contained, the latter would have no value at the port of entry and no duty could be assessed upon it. Undoubtedly large quantities of such ores would be sent into this country; and silver ores, carrying no lead, would be mixed with lead ores for the purpose of reducing the grade of the latter and so avoiding the payment of duty. This would simply swell the profits of the foreign mine owners. It would produce no revenue for this Government, and would destroy an important established industry, employing many thousands of men. We should be throwing open our market to the world and forcing American labor to compete with the labor of Mexico and Spain, where wages average only 80 cents per day.

Besides their cheap labor, the Mexican producers have a great advantage in the matter of transportation. From the principal mines to the Mexican smelters the freight on ore is $3 per ton, and as the ore contains about 50 per cent lead, the freight is equal to $6 per ton of pig lead. From the smelter to New York the freight on pig lead is $4 per ton, making the total cost of transportation from the mines to New York $10 per ton of pig lead. The total cost of transportation from the Coeur d'Alene mines amounts to $23 per ton of pig lead. The Mexican mines have therefore an advantage of $13 per ton of pig lead, or 0.65 cent per pound.

It is to be presumed that the reduction of the duty is proposed in the interest of the consumer. But experience shows that the consumer is not likely to derive any substantial benefit from the reduction of duty and that practically the entire benefit will accrue to a few manufacturers. The largest consumption of lead is in the form of white lead pigment. But the price of the latter bears no fixed ratio to the price of pig lead, as will be seen by reference to the table attached hereto, showing the prices of the two commodities for a period of 17 years. Taking the period of three years, 1895 to 1897, during which the duty was one-half of the present duty, and comparing it with the subsequent period, we find that the prices averaged as follows:

Showing that, although in the earlier period the price of pig lead was 1.229 cents per pound lower than in the later period, the price of white lead was only 0.490 cent lower. In the fall of 1907 the price of pig lead fell 24 cents per pound, but the price of white lead fell only three-quarters of a cent per pound.

In the 14 years from 1898 to 1911, during which the present tariff has been in effect, the duties collected on imports of lead have averaged $596,733 per annum. Under the tariff which was proposed, to produce the same revenue, approximately three times as much lead must be imported, which would amount to about 50,000 tons per annum. To pay for this we must send out of the country each year more than $3.000,000, which ought to be paid as wages to 3,000 American miners.

Attention is called to the annexed table, showing the effect of an ad valorem duty applied to the market conditions of the last 10 years. From this table it appears that at all times within the 10 years, under a duty of 25 per cent ad valorem, foreign pig lead could have been laid down at New York at prices much below those which prevailed under the existing duty of 23 cents per pound. The average London price during the 10-year period was 3 cents per pound, on which the ad valorem duty would be 0.75 cent per pound, making the cost, duty paid, 3.75 cents. The average New York price for the same period was 4.57 cents, a difference of 0 82 cent per pound. If the Coeur d'Alene mines had been obliged to face the price of 3.75 cents, some of the largest producers would have been unable to meet the competition, and would have been forced to close. It has been shown that for the three years, 1909, 1910, and 1911, the gross profit earned by these mines averaged 0.988 cent per pound of lead produced; or, after allowing 0.5 cent for amortization, the net profit was only 0.488 cent per pound. For these three years the average difference shown by the table is 0.78 cent per pound, the price of foreign lead, duty paid, averaging 3.6 cents. Had the Coeur d'Alene mines met this price their average gross profit would have been only 0.208 cent per pound, and with the allowance for amortization there would have been an average loss of 0.292 cent per pound.

The New York and London prices run substantially parallel. When the price is low here it is usually corresponding low there. Consequently, under an ad valorem

tariff, the duty on foreign lead would be least at the time when our own mines most need protection. When natural business conditions had lowered the price, the market would be further weakened by the larger importations made possible by the lower duty. The duty, whatever it may be, should be specific; and it has been shown that the rates now in effect are absolutely necessary for the continuation of the lead industry in the Coeur d'Alene district.

Respectfully submitted.

FREDERICK Burbidge,

For the Lead Producers of Coeur d'Alene District, Idaho.

Cost of producing lead, Coeur d'Alene district, Idaho, 1909–1911.

Of which metallurgical loss of silver was.

Leaving the cost of marketing the lead.

Shipped 351,461 tons lead, at 4.401 cents per pound...........
Shipped 19,102,555 ounces silver, at 52.462 cents per ounce.

Total gross value.....

Net amount received by the mines.

Difference, being the cost of marketing (includes freight, smelting, metal

lurgical losses, carrying and selling charges)..

$30, 934, 604

10, 021, 570

40, 956, 174

23, 195, 319

17, 760, 855 501, 078

17, 259, 777

Mining and milling expenses were..

16, 249, 846

Making the total cost of producing and marketing the lead, per Cents. pound.

4.767..

33, 509, 623

Received for the lead, per pound.

4.401..

30, 934, 604

Cost exceeded value...

.366..

2,575, 019

Crediting the net value of the silver on the cost of the lead, per pound..

World's production of pig lead (metric tons).

[From statistics compiled by Metallgesellschaft, Frankfort, Germany.]

Comparison of wages paid in Coeur d'Alene mining district and in Mexican mines.

Importations of lead in ore and furnace products to be smelted and refined in bond.

1895.

1896.

1897.

1898.

1899.

1900.

1901.

1902.

1903.

Average prices of pig lead and dry white lead, 1895 to 1911, inclusive.

Tons of 2,000 pounds.

9,277

2,759

3,576

3,485

2,632

Dry

white

lead.

Table showing effect of an ad valorem duty of 25 per cent on pig lead, applied to market conditions of 10 years, 1902 to 1911, inclusive.

The CHAIRMAN. Mr. Otto Ruhl is our next witness.

Mr. KING. Mr. Chairman, Mr. George Riter is also to make a statement in regard to this subject.

The CHAIRMAN. Mr. King, with all these witnesses here we can not allow but one witness for each concern represented. We would never get through.

Mr. KING. I understood that half an hour was to be allowed.

The CHAIRMAN. We could not do that. I would like very much to do so, but you see there is a large number of gentlemen here, and we must try to give them all a show.

Mr. KING. Then I would ask that you have the record show that Mr. Riter is representing the Utah mines, instead of assigning him to the Coeur D'Alene district with the former speaker.

The CHAIRMAN. Does he not represent the same concern?