terial when the American manufacturer can be on an equality with him.

WM. QUIGLEY.

Mr. GARLOW. Just one other matter I would like to go into the record and get it before this committee, and that is the question as to its durability. Here is one of the big manufacturers.

The CHAIRMAN. Do not read too much of that if you are going to put it into the record.

Mr. GARLOW. All right; I am very much obliged to you gentlemen. I appreciate your courtesy. I will just hand in this to the reporter. The CHAIRMAN. Are there any further questions? I am going to put into the record a letter from Director North, dated last night, and a reply of the chairman, and also a subsequent letter from Director North.

Mr. UNDERWOOD. On the wool question?

The CHAIRMAN. Yes. If any of the gentlemen of the committee want to read the letters now they can do so. Mr. CLARK. Oh, it will be in the hearings. (The letters referred to are as follows:)

Hon. SERENO E. PAYNE,

BUREAU OF THE CENSUS, Washington, December 3, 1908.

Chairman Ways and Means Committee,

House of Representatives.

DEAR SIR: If the Ways and Means Committee desires, I will be glad to appear before it and state, under oath, all the facts connected with my services with the Senate Finance Committee in 1894 and 1897, so far as I can recall them. I will recount these facts so that you may determine whether you desire to summon me as a witness.

When the Wilson tariff bill of 1894 was about to reach the Senate, Senator Aldrich said to me one evening that he was entirely without expert clerical assistance in connection with the work on the tariff bill, and without any funds to pay for it, and that he urgently desired that I would remain in Washington and assist him while the bill was passing through the Senate. I consulted with the officers of the National Association of Wool Manufacturers, of which I was the secretary, and they consented to Senator Aldrich's request. Accordingly I remained in Washington during the entire period that the Wilson bill was under consideration in the Senate, occupying a desk in Senator Aldrich's rooms in the Maltby Building. My duties were mainly the care of the correspondence, the making of tables, percentages, etc.

When the tariff bill of 1897 reached the Senate Senator Aldrich made the same request of me, and, again, after consulting the officers of the association, I went to Washington. From the date of my arrival until the bill became a law I acted as the clerk, or secretary, of the subcommittee of the Finance Committee. I was in charge of a number of clerks, who were loaned to the committee by the Treasury Department and the General Appraisers in New York. My duties were to handle, acknowledge, brief, and file the correspondence of the committee, which was enormous; sometimes reaching 200

letters a day, and to prepare such tables and computations as the subcommittee desired.

During the time that the subcommittee was going over the House bill, section by section, I sat with it, reading the old and the proposed new rates, paragraph by paragraph. Mr. Arthur B. Shelton, now the clerk of the Senate Finance Committee, alternated with me in this duty. When this was completed the subcommittee went into executive session, and I was no longer present at its sittings, but remained in the rear rooms of the suite which the committee occupied and in which the clerical force was located. I had no knowledge of a single rate on a single article agreed upon by the subcommittee until the night before the bill was reported to the Senate. On that night Senator Aldrich sent for me, and at his dictation, from a copy of the House bill, upon which he had made notes from time to time, and which never passed out of his possession, I wrote out the changes in the bill. When it was completed I took the bill to the Government Printing Office and read the proof of it as fast as it was put into type. It was about 5 o'clock in the morning when the work was finished, and the bill was reported at noon the same day.

I was never in a position to give illicit information to anyone regarding the terms of the bill. As a matter of personal protection, however, I wrote President Whitman, as appears from the published correspondence, that he must not expect any information from me in view of my confidential relations with the committee, and he never received any such information.

I told him also that if it should come to my knowledge that the situation was one that required his attention, I would telegraph him and that he "would doubtless have no difficulty in finding out what is the matter." I so wrote because I had already learned that Senators Aldrich, Allison, Platt, and Wolcott, the members of the subcommittee, talked with the utmost frankness to all the representatives of manufacturing interests, who personally called upon them. They made no secret of their personal views as to what the rates of duty on any article should be, and they talked to hundreds of people.

As to the phraseology of the woolen schedule and the rates of duty to be given woolen goods, I was never consulted by the subcommittee and never communicated with except in writing. My recollection is that on several occasions Mr. Whitman wrote me suggestions regarding this schedule. They were transmitted to the committee with hundreds of similar suggestions. It is my belief that the wool manufacturers would have been in a much more favorable situation if their secretary had been free to advocate their wishes.

One does not know Senator Aldrich if he imagines that he is a man whose judgment on any question connected with tariff rates can be influenced in the slightest degree by the presence or the personality of any person employed to represent a particular industry. I have never known a man who was less susceptible to this sort of influence.

The fact that I was acting as clerk to the subcommittee of the Finance Committee was universally known in Washington at the time, both in and out of Congress, and no criticism ever reached my ears. It was a frequent occurrence for some Member of Congress to say to me that the Finance Committee was fortunate in having been. able to secure my services.

All the correspondence which Mr. Bennett obtained from Mr. Whitman's files, by order of the court, in the libel suit against a Lynn newspaper, was published at the time of the suit, some eight years ago, and commented upon in the newspapers. I do not recall an instance in which it was suggested that it revealed anything which I have any reason to regret or to explain.

And that is the fact. I discharged to the best of my ability the duties of clerk of the Senate subcommittee, which Senator Aldrich urgently asked me to undertake. I kept inviolate, so far as I knew them (which was very little), the secrets of the subcommittee. I had no hand whatever in the drafting of a single phrase or rate in the tariff bill reported by that committee to the Senate. I did a lot of hard work, but I did it honorably, as a duty which I owed to the public, and for which I expected no reward.

Following my return to Boston, after the passage of the tariff bill, the officers of the National Wool Manufacturers' Association informed me that, in recognition of the arduous and responsible work which I had performed for the committee and the serious injury to my health, which had resulted from an assignment entirely apart from my duties as secretary of the association, they believed I had been underpaid, and, accordingly, as an expression of their personal good will and regard, they presented me with the sum of $5,000. Shortly afterwards my salary was increased from $4,000 to $6,000 per annum. Very respectfully,

S. N. D. NORTH. DECEMBER 4, 1908.

Hon. S. N. D. NORTH,

Director of the Census, City.

MY DEAR MR. NORTH: Yours of the 3d instant received last night too late for a reply.

The committee will be in session to-day from 9.30 a. m., also tomorrow and Monday at the same hour. If you desire to come before the committee, they will be glad to see you either to-day or Saturday; on Monday our time is limited. As to your suggestion to be put under oath, the committee now has no authority to swear witnesses. Your letter will be printed with the hearings. As to the statement in the papers that intimations were given yesterday that you would be subpoenaed as a witness, I have heard no such intimation expressed by any member of the committee. So far as I am concerned, I believed you would always be ready to respond without a subpœna whenever the committee desired to call upon you.

Yours, very truly,

SERENO E. PAYNE.

BUREAU OF THE CENSUS, Washington, December 4, 1908.

DEAR MR. PAYNE: I thank you for your kind note in reply to my letter.

In view of the fact that this letter is to appear in the hearings, and that it covers the whole ground, I do not see any reason why I should take up the time of the committee unless for the purpose of

inforcing the statement by repeating it under oath, and if I am to appear I would therefore prefer to wait until the committee has obtained authority to administer oath. However, I will be glad to leave the whole matter to your decision.

Very sincerely,

Hon. SERENO E. PAYNE,

Chairman Committee on Ways and Means,

S. N. D. NORTH.

House of Representatives.

STATEMENT OF MR. FRANK F. HENRY, OF BUFFALO, N. Y., MANAGER OF THE WASHBURN-CROSBY COMPANY.

Mr. UNDERWOOD. What are your paragraphs?

Mr. HENRY. Paragraphs 234 and 235.

The CHAIRMAN. Proceed.

Mr. HENRY. Representing 14 of the principal flour mills of New York State and the seaboard, with a daily capacity of over 30,000 barrels of flour, this appearance is made to call the attention of your committee to the fact that American mills are losing their hold upon a valuable foreign trade through the entry of French and German mills into the markets of Scandinavia, Holland, Belgium, and the United Kingdom. The millers of France and Germany, and more particularly the latter, are favored by their governments with tariff regulations which amount in effect to a bounty, and result in Germany, for instance, being able to import American wheat and export the product there from at a price laid down in the above-mentioned markets with which we are unable to compete. The growth of this competition is evidenced by the increase in importations by Germany of 100,000 bushels of American wheat in 1904 and 1905, and 12,000,000 bushels in 1907 and 1908.

Our mills are located directly on the route of Canadian wheat from northwest Canada to Europe, and the only relief under which we will guarantee to hold our own in European markets is a more liberal tariff act, which will permit us to tap this stream of wheat, grind it in our home mills, export the finished product, and retain upon payment of duty the nonexportable by-products, greatly to the benefit of our farmers. We ask for no remission or reduction of duty. We believe the American farmer is entitled to the protection afforded his wheat by the present tariff, but we wish simply to manufacture in this country and export as a finished product the raw material that is now passing through in bond to be manufactured abroad.

Mr. BONYNGE. What material are you talking about?

Mr. HENRY. Wheat.

Mr. DALZELL. That is another thing altogether.

Mr. HENRY. The Treasury Department has recently ruled that flour may be imported to this country, mixed with our domestic flour, and upon exportation be entitled to drawback of duty paid. This ruling benefits the Canadian miller but creates new competition for the American miller. We understand that our present tariff act does not permit a ruling that would permit us to grind foreign wheat in this country and retain the by-products, which can not be successfully exported, and it would appear that some change in the act conferring this authority is necessary.

We ask for no change in the tariff, but we ask for a change in the act that will permit a ruling that will allow American millers to grind Canadian wheat, either in bond or under the drawback act.

Mr. DALZELL. Is that the same subject that was contained in a bill introduced by Mr. Stevens, of Minnesota?

Mr. HENRY. Partially in Mr. Stevens's bill and another bill introduced by Mr. Lovering. The present law, we think, is perfectly satisfactory to us, provided it can be broadened somewhat so that rulings may permit us to grind this wheat and export the flour and retain the by-products in this country upon payment of the duty, the by-product not being exportable because of its bulky character and its imperfect keeping qualities.

The CHAIRMAN. Are there any questions?

Mr. UNDERWOOD. What is the duty now on the importation of the by-products?

Mr. HENRY. It is 25 per cent ad valorem.

Mr. UNDERWOOD. There is a duty of 25 per cent ad valorem?

Mr. HENRY. Yes, sir.

Mr. UNDERWOOD. In other words, you want the Government to give to the mill the 25 per cent ad valorem?

Mr. HENRY. We do not. We do not ask that. We are willing to pay it.

Mr. BONYNGE. To pay the duty on the by-products?

Mr. HENRY. Yes, sir.

Mr. CLARK. If the Canadians import it, why can you not export it? Mr. HENRY. I presume we could. They do not import it.

Mr. CLARK. Did you not say just a while ago that you could not export it on account of its bulk and lack of keeping qualities?

Mr. HENRY. The Canadian grows the wheat which makes this offal, which he retains in his country, and he ships his flour into this country, and his mills retain the benefit from the manufacture of the flour, and those farmers obtain the benefit.

Mr. CLARK. When you manufacture you retain the offal, so our farmers get the benefit of that?

Mr. HENRY. Yes; and we wish to bring in more.

Mr. CLARK. You want to bring in more?

Mr. HENRY. Yes, sir; we want to bring in more of the offal.

Mr. DALZELL. Have you discussed paragraph 30?

Mr. HENRY. It is covered by the same thing, practically.

Mr. CLARK. You people up there want free trade with Canada, do you not?

Mr. HENRY. We do not object to it; we are not asking for it at all. Mr. CLARK. I know; but you do want it-down in the bottom of your hearts?

Mr. HENRY. No; the miller would like to have free trade on offal, but he thinks the farmer is entitled to protection on his wheat and he is willing to give it to him.

Mr. CLARK. You do not need it?
Mr. HENRY. We do not need it.

ment assistance.

We have never had any govern

Mr. CLARK. Nearly all those who are raising wheat in the northwestern British possessions are Americans who have gone over there, are they not?

Mr. HENRY. A great many of them are; yes, sir.