THIRTY-EIGHTH CONGRESS, 2D SESSION.

Europe, but actually discriminate against them to an amount equal to interest on their investments. This is an injustice so manifest as, when stated, to meet at once the dissent of every just man.

But it is said that the duty on the imported article is paid in gold. That is true. Three per cent. in gold is equivalent to six per cent. in paper money on the same valuation; but it must be remembered that the three per cent. in gold is levied upon the foreign valuation and not upon the home valuation, and that makes all the difference in the world. The foreign valuation of printing paper is $160 a ton, instead of $400 a ton, the home valuation. The price of paper in Belgium is about eight cents a pound, according to the statement furnished us from the Treasury Department, or $160 a ton, according to the foreign valuation, and the rate of duty on imported goods is levied on the foreign valuation. Consequently the three per cent. on $170 a ton-I compute it at $170 to cover commissions-is $5 10 in coin, or, at the present rate, equal to about $10 20 in paper money; 80 that if the House resolution should pass we would by our internal taxation levy a duty of $40 63 on a ton of paper manufactured at home and only $10 20 in paper money upon a ton of paper imported into this country. Such a discrimination as this would be manifestly unjust and improper.

A great deal has been said in the newspapers about this paper duty; a great deal of complaint has been made on the subject; but it is very certain that the editors and proprietors of those papers can scarcely expect us by our legislation to impose a lighter duty on the imported article than on the home manufactured article. That would not be just, and would soon leave them to the mercy of foreign paper-makers.

It is said that the high price of paper is caused by the high rate of duty on imported paper. This is strange when we consider that the present rate of duty is lower than it has been for forty years. Under the tariff of 1846, it was thirty per cent.; under the free-trade tariff of 1857, it was twentyfour per cent.; under that of August 5, 1861, it was thirty per cent.; under that of July 14, 1862, it was thirty-five per cent.; under the present tariff, it is twenty per cent. The true reason for the high price of paper is to be found in the condition of the country, the same causes that produce the advance in gold, iron, and all the materials and commodities of industry and manufacture. Paper has steadily advanced or fallen with the price of gold. In counteracting so far as we can this inevitable effect of paper money, we must take care not to destroy our home industry. If we yield to one interest to-day, we may be compelled to yield to another to-morrow. We cannot make cheap prices by legislation while we are compelled to levy enormous taxes.

WEDNESDAY, FEBRUARY 15, 1865.

tion of our common schools, and the number of volumes now published annually is greater than the aggregate of all the public libraries in the United States. Tract and various religious and charitable societies consume a vast amount of paper. The Government of the United States is itself a vast consumer of paper. The printing establishment in this city, under the charge of Mr. Defrees, conducts a printing business far greater than any publishing house on this continent; and in the printing of revenue blanks, stamps, dies, &c., in the Currency Bureau, the United States becomes the great purchaser of paper, exhausting the market supply, and thus largely contributing to the high price of paper. Under these circumstances the paper mills that formerly could supply the demand for printing paper have not always been able to do so, and it would seem to be the part of wisdom to invite a healthy competition from foreign labor. But in doing so we dare not yield to an interested clamor and surrender any portion of our revenue, or destroy a branch of American industry.

These views have convinced me that the best rate of duty is ten per cent., a rate about equivalent to the aggregate of internal taxes. The manufacturer of printing paper needs no protection. His product is heavy, and expensive to transport. This is an advantage you cannot deprive him of when competing with foreigners. The present rate of duty is shown, by experience, to be prohibitive. No printing paper has been imported during the last year. The effect of the reduction will probably induce some competition, but, in my opinion, the home producer will be able to sell all he can make at a fair, remunerative rate; and in case the supply is deficient, the duty will not be so high as to give him a monopoly.

It is urged in favor of retaining the present duty that all changes in the tariff laws destroy confidence; that our citizens engaged in business have a right to demand stability in legislation affecting their business interests; and it is urged that if lower duties are yielded to the printers they will be yielded to other interests, and thus destroy our revenue system and impair faith in the payment of the public debt. This argument loses its force when it is shown that the proposed change does not reduce the revenue, and does not materially affect any interest, but only tends to supply the demand for an article the consumption of which is enormously increased by the war.

I can say for the Committee on Finance that it has fully considered all the arguments urged upon us. We have heard delegations from both the paper makers and the publishers, and as the result of a compromise between the opposing views I have mentioned, we have recommended fifteen per cent. as a proper rate of duty. I shall feel at liberty to vote for the lower rate of ten, but a less rate will, I am sure, result in a loss of revenue and a serious injury to the paper makers. We must remember that while the newspaper, press may appeal to us daily, that their interest must no more be considered than the seven hundred paper mills and the very large capital employed in them. The interests of both must be held subordinate to the paramount interest of the Government, and that is that paper makers and printers and readers must all contribute their fair share in the support of the Government.

NEW SERIES.....No. 49.

wire-cloth is not made in this country. That is the screen on which the paper is dipped, and it makes fine paper according to the fineness of the screen, or otherwise. It is the screen which covers the wheel where paper is made by machinery, through which the water oozes and on which the pulp collects. The wire-cloth is imported from abroad. Now, it is proposed to reduce the duty on imported paper and still leave the duties on all these articles which enter into the manufacture of paper here.

Mr. SHERMAN. If the Senator will allow me I will state to him that in the statement furnished to me by the paper manufacturers, and which I have verified at the Treasury Department, the duty on the acids and other articles is reduced to paper money at the market rate of gold, so that the whole aggregate in paper money is what I have stated. It includes the felting, the wirecloth, the alum, the sulphuric acid, bleaching powders, soda ash, coal, and the whole amount to $40 63 in currency per ton.

Mr. COLLAMER. The duties on all the imported articles which the manufacturer must have are left unreduced, so that our manufacturers must buy these articles to carry on their work, pay all the duties levied on them, and then the paper which is brought in to compete with the paper they manufacture is to come in with a reduction of duty. I believe that the persons actually engaged at present in the manufacture of paper amount to about fifty thousand; and I have understood that the amount of capital invested in the business was considerably larger than the gen

tleman has stated.

Mr. JOHNSON. It is between eighty and one hundred million dollars, I think.

Mr. COLLAMER. One reason given for the reduction of the duty on printing paper is that it has become an article of necessity. Grant it. Is not the cloth for a man's coat a necessity too? I should think it was. You say poor people want to use it. Does not the poor man want a coat? You now impose a tax of five per cent, on all manufactures of every description of cloth in this country, however necessary the articles may be to life. Our condition requires it; we need the money, and we must have it. Then the fact that a thing is a necessary of life constitutes no reason for letting in the foreign manufacture and destroying the American production, when by destroying the American production we fail to get the duty and raise the money we otherwise should get.

I am not satisfied as yet that this duty ought to be reduced in any degree. Last year, or the year before that, as a compromise, the duty on the importation of paper was reduced from thirty to twenty per cent., and it stands at twenty per cent. now. That was the result of a compromise then understood to be in some degree satisfactory and permanent, but now it is to be disturbed again, I do not mean to say that it is so disturbed by the committees of either House, for they have not disturbed it as I understand. It seems to me that having settled it at twenty per cent., and settled it as a matter of compromise and arrangement with the other arrangements in the general bill, we ought not now to disturb it. The mere fact that American paper has grown dear is the only ground for it. Why is that? Is it true that the American manufactured paper has increased in price any more than other articles of American manufacture, or that it has increased any more than the materials out of which it is made have increased? Not at all. The Senator from Ohio says it fluctuates with the rise and fall of gold. Undoubtedly that is true of paper as of everything else. It goes up or down according to the variations in the depreciation of our currency. That is not peculiar to the article of paper, nor, as I before remarked, can the fact that paper is a necessary justify this movement.

Again, it is said the duty ought to be reduced because the Government is a large consumer and user of paper. Is it not also a large consumer of clothes and of all materials for the Army service? and yet we keep our duty on those articles.

My idea is, that by adopting this measure and doing nothing for the relief of our manufacturers of paper, the effect will be to wind up the business, to close the mills, to leave our manufacturers to pay the same duties as before on the materials which they import, and which go into the manufacture of paper, while reducing the duty on the imported article even to fifteen per cent. will almost entirely cripple them.

I think upon the whole, and in the long run, we shall do better to let this manufacture stand, like all other manufactures of the country, and pay duties on their home production, by having such duties on imported articles as will enable them to compete with the foreign producer; otherwise, they never can pay us much internal reve

nue.

Again, the Senator from Ohio said that there are about seven hundred paper mills scattered all over the country. I think he is about right as to the number. You have them out in Iowa and Illinois, and all through the country. Mills are now being established in the far-off States for the purpose of using straw, wood, husks of corn, and other materials for making paper, using comparatively a small proportion of rags. I think we had better promote that, increase it, improve it, encourage it. If we adopt the system now proposed, that will be ended; no more will be built, no more investments will be made, no more improvements in that direction will be instituted. On the whole, I am not satisfied that there should be any reduction at all.

Mr. WADE. Mr. President, on this subject of the reduction of the duty on printing paper, my colleague and myself are instructed by the Legislature of Ohio to vote for the reduction, and if it were not for that instruction I should probably give a silent vote on this measure. On almost any question about which I entertain the least doubt, my respect for the Legislature of Ohio would cause me to solve that doubt in favor of the opinions which they have expressed. I have never believed that the Legislatures of our States have a right to instruct Senators so that we are bound, under all circumstances, to obey those instructions; but, on the other hand, there is no question but that the opinion of the Legislature is entitled to the gravest consideration, and should not be departed from, unless where one is fully persuaded that the instructions that he has received are not in accordance with the best interests of the country. That, I must say, is my position now. Since receiving these instructions I have taken some pains to look into this question, and my colleague has explained the facts just as I find them to be, and I therefore need not repeat what he has said. I was unable, however, in this case, to find anything which particularly affects this article of paper that should induce us to discriminate between it and a great many other articles that are protected by a higher duty than that imposed on paper.

I know very well, as has been said, that almost every commodity we make use of has increased very much in price, and seems to fluctuate with the rate of gold from day to day. It is so with paper, just as it is with everything else; and I see no reason why, if we vote now for the reduction of the duty on paper, we should not, on the same principle, be compelled to vote for the reduction of the duty on almost every article that I know anything about. It is an article in the production of which in this country a great deal of capital is invested. It is an article which can be manufactured as well in this country as anywhere else. We have all or nearly all the materials necessary for the manufacture. There are some of the elements that enter into it of foreign production which it is not proposed to disturb in regard to their protection, for they are left precisely as they were. But these things are not of such consequence perhaps us to confine our action to this one article. This of itself would not make any very great difference to the country; but it is an important question in view of the proper provision to be made for the vast accumulated debt of this nation. That is a subject on which I have reflected a great deal, and which has troubled me much more than the war which is on our hands, because I have always believed that the war could only be determined in one way sooner or later.

I have always felt assured that when the immense power and resources of the free States in

war were brought in collision with the seceded States, notwithstanding all our blunders, if we make any, notwithstanding all the bad policy we may adopt, if we adopt any, we cannot so err but that in the end we must overcome our comparatively feeble enemy. But this vast debt that we are accumulating is a thing of paramount consideration, and we cannot begin to look it straight in the face too early. According to my philosophy, if we are to successfully grapple with this great burden of debt, we must provide for paying it off by the labor of man. There is nothing else that I know of which is of any value for the purpose. I know of nothing that we esteem valuable which is not the product of human labor; and if we are to pay off this debt we have got to work it out, and it must be worked out by our own people, and not by foreigners. Our people have to earn the money. The people of the United States by their own labor, and by their wise application of that labor, are to grapple with and discharge the debt, and I agree that they are perfectly able to do it. The debt does not perplex me provided we make a wise disposition of the vast resources we have in hand, for if we shape our policy so that whatever commodities are necessary for our people shall be the product of our own labor, we overcome any debt you can

conceive of.

Why, sir, look at the results of labor and compare them with the debt. I believe, according to the census of 1860, it was shown that the products of manufactures in the United States at that time were about two thousand million dollars per year. Reflect upon that, sir. One year's work of all those engaged in manufactures, if it could be all applied to the payment of your debt, would sweep it out and pay it off. What is that compared with the products of labor applied in other departments, in agriculture, in your mines, in all the various branches of labor? I do not know the figures, for I have not summed them up, but I suppose the products of the labor of the people of the United States now cannot fall much short of five thousand million dollars per annum.

It is vast, it is almost inconceivable; and if we shape our policy so as to perform our own labor, no man need be frightened at the amount of debt we have to meet; but if we so shape our policy that we are to go abroad for our labor, and undertake to pay for it by depriving our own people of the right to do this labor and to perform this necessary service, we shall fail. I know that in that event we shall fail. I am not going to enter into the argument of the tariff question; but just at the threshold, when for the first time it is proposed that with all this burden upon our back we shall put it into the hands of foreigners to do our labor, I think it becomes every statesman to pause and consider. How are we to pay this debt if we deprive our own people of the right to do our labor, as will be the case if you discriminate in favor of foreigners?

Nay, sir, I go further. When we consider the vast capital and means in the hands of foreign manufacturers to underbid us in the market and to overcome our manufacturers and thereby destroy our labor, it seems to me to be a wise and a necessary policy to protect our own labor, and to see that the nation so shapes its policy that its own necessities shall be supplied by the labor of its own people. I am told that we shall destroy the labor of our own people to the amount of a hundred million dollars by reducing the duty on imported paper as now proposed. Open that branch of business to foreign competition and foreigners will do the work, but you have got to pay them for it; and you have got to pay them in the proceeds of your mines, for they will not takeyour paper. You have to send abroad the products of the mines of California and Nevada to pay for this labor that ought to be done by our own people. I am opposed to it. I regret that the Legislature of Ohio was so easily led into the adoption of the instructions to which I have referred. I have endeavored to find what arguments were made use of to induce the conclusion at which they arrived, but I have seen nothing of them. I fear that it was the result of but very little reflection; I fear they did not take into consideration the present condition of this great nation, and reflect that the only means on God's earth by which we can meet the burdens now upon us is by so shaping our policy as to support

and encourage our own labor in every department of industry. If we do that, I fear not the debt; it will vanish before the advancing interests of the nation like the frost before the sun.

With a population doubling as ours does, almost, from decade to decade, with the products of our labor increasing in a ratio infinitely greater than the population, any debt which we may have will be but a light burden on us, and that but for a short time, if we adopt a wise policy; but if, on the other hand, we adopt a policy that compels us to go abroad for the products of foreign labor, if we discourage the employment of labor in our own country, we must be a poor, insignificant nation. I know that abroad there is a great deal of talk aimed at this country about free trade. Great Britain will pay millions to authors who write about free trade, and to papers that preach free trade, and to orators who go forth on the stump and proclaim the glories of free trade. But look at their own practice; take up their tariff, see the vast amount they have collected from customs, and compare it with ours. We are branded with being protectionists, with imposing restrictions upon trade, and yet, if you look at the customs you will find that the British Government collects from customs three times more in the year than we do, although they prate so much of free trade. Whether free trade is wise or not depends on the relation that one nation bears to another. What nation ever protected their commerce and their labor with higher restrictions than has Great Britain since up to within a very recent period? No nation in the world, until they had built up their manufacturing interest, their commerce, and became the manufacturers of the world by reason of their restrictions in favor of their own labor. All England is a perfect beehive of industry. Why? Because the statesmen of England have always had a realizing sense of the necessity of encouraging their labor, until they have built up such wealth and so perfected themselves in all branches of manufacture that there is hardly a nation in the world, and no young nation commencing its career, that can compete with them for an hour. Then they say, "Throw down the bars; now we are powerful enough to put down all competition; our wealth is such that we may by any kind of sacrifice undersell you, break down your manufactures, and we can very soon, after that is done, indemnify ourselves again." Yes, sir, when they have broken down your competition, undersold you until they have destroyed your ability to compete with them, they will turn around, and you will have to pay dearly for all that they threw off in order to attain to that position.

But, sir, I do not wish to enlarge. I say now, and I warn the Senate, and I warn the people of this Union, that with this vast accumulated debt upon our shoulders we must encourage our own labor. If we fail here we fail throughout, and your bonds are comparatively worthless. Iproclaim it upon this floor, if the American people make a mistake here, as I fear they will, in my judgment your vast accumulated debt is good for nothing; you are a bankrupt nation; you throw away that predominance that the Almighty has given to the American people over every other portion of the world. It is in our power to be the great predominant nation of the earth, and this burden of debt upon us is nothing if we only trust our own laborers to work it out. But, sir, if we fail here, I fear that we shall fail throughout, and we shall bring down this nation from the height to which it ought to aspire to be secondary, and merely a dependence upon the European

nations.

Mr. HALE. I was struck by the remark made by the Senator from Vermont, and it is certainly true, that so far as the newspapers are concerned, they have an advocate in every paper. A great deal has been said about this subject, but I take this simple view of it: I have looked at these papers, and have thought upon the subject somewhat, and according to the best information I can get the duty which these manufacturers pay upon the articles that enter into the composition of their paper is now over thirty per cent. It is difficult to get it accurately, but I apprehend by the best average it will be found, and I understand the chairman of the Committee on Finance agrees to that, to be thirty per cent. Then, sir, if you leave that so, every reduction of the duty

receive $24 per ton duty in gold, and that reduced to currency, with gold at 225, would be $54, which the Government would receive on a ton of paper imported at fifteen per cent. That, I agree, is a larger sum than is paid to the Government from the manufacture of a ton of paper here, and so there would seem to be a gain to the Government. But let us see whether there would be. Of course, if we fix the duty at fifteen per cent., and mean to act honestly and fairly, we must give the manufacturer the benefit of fifteen per cent. upon his manufacture; otherwise our law is a delusion and a snare. In order that he may have the benefit of this fifteen per cent. protection, the several articles which he now imports from abroad to make his paper, and on which he pays a heavy duty, ought to come free; and he ought to make his paper out of free materials as it is made abroad, he being called upon to enter into competition with paper manufactured abroad.

Now, sir, during the year ending June 30, 1864, the amount of these several commodities imported into the country was as follows: we imported 75,879,706 pounds of soda ash, which was worth $1,303,805. We imported of bleaching powders 14,932,688 pounds, worth $309,904; and of alum we imported 1,503,088 pounds, worth $26,015. We received for duties on these several articles at the custom-house $433,214; nearly half a million of dollars duties on these chemicals

which go into the manufacture of paper. I agree that these chemicals are used for other purposes besides the manufacture of paper; but if they are to be admitted duty free, this is the amount of duty which is lost to the custom-house, and which, as I stated, amounted last year to $433,214. Mr. FARWELL. In gold.

Mr. FOSTER. Yes, sir, in gold. I thank the honorable Senator for the suggestion. In currency it would be $974,731, with gold at 225. We received last year from the three per cent. tax on paper manufactured $895,528; and this with the duties on the chemicals last named, in gold, make up the amount of $1,328,742-two items only of the amount to be made up by duties on imported paper.

sum,

Then the value of the paper and manufactures of paper produced in this country during the last fiscal year, to wit, the year ending June 30, 1864, was $29,850,933, as shown by returns at the Treasury. The profits on that business are said to be enormous; but I propose to take a very moderate figure; no more than what even those who attack the paper manufacturers agree is a fair profit; take ten per cent.; and that, on this amount of paper manufactured, shows a profit of $2,985,093, and on that profit the five per cent. Mcome tax is $149,254 65. That, added to the former sums, makes, in three items, $1,577,996; and that is very much below the amount which the Treasury now receives from the manufacture of paper with the duty as it now stands. Between two and three million dollars unquestionably now come into the Treasury from the paper made in the country; perhaps more than the larger sum.

1 propose to take these figures, and if we stop the manufacture here at home, we have got of course to provide by an importation from abroad such an amount as will raise this sum in revenue, or else the Treasury will be a loser. Now, to raise this sum of $1,577,996, which we now receive, we must import 29,222 tons of paper at fifteen per cent. in order to make up the sum, which I have shown to be less than the amount which the Government now receives. That number of tons costs $4,675,520; so that to import paper enough, with the duty at fifteen per cent., to raise the amount which we now receive, we must export $4,675,520 in gold. We should, it is true, get back about $700,000 of that in duties at the custom-house; and taking those two transactions together, we should send away nearly $5,000,000 in gold for the sake of getting back $700,000; not a very wise speculation.

Mr. President, with the country in the condition it now is, with our exchanges as they now are, with gold at the price it now is, can we with safety send abroad $5,000,000 in gold to buy our paper? Would not the picture which the Senator from Ohio [Mr. WADE] suggested of national bankruptcy be staring us in the face, and that speedily? Why, sir, it would be utterly imposBible for the country to maintain its eredit any

considerable length of time if we follow such a course of policy as that.

The whole amount of our domestic products exported last year was $320,394,796, and of foreign products $20,373,409, making an aggregate of $340,768,205; and our imports the same year were $328,514,559. We exported in gold the past year $105,228,375. Of that the domestic production was $100,228,375, and of foreign coin and bullion $4,905,685. We imported $13,155,706; || and the excess of our exports of gold over the imports was $92,072,669. We see what the condition of our country is as it regards the price of gold and our foreign exchanges, with an export of gold in excess of imports the past year of this sum of $92,072,669.

abroad, and we should be a nation of idiers paying for the articles we consumed, not in the products of our own labor, not producing the articles necessary for our consumption, whether these articles were articles of luxury and elegance or articles of common convenience and necessity. Everything would be purchased abroad and paid for in raw materials, or the precious metals. The career of such a nation would be exceedingly short to national bankruptcy. Surely that would be the epitaph of this country at an early day if such a policy shall be adopted.

I know it is said that it is necessary to have a healthy competition, and that we must reduce the duty in order that our manufacturers should be brought in healthy competition with the manufac turers of paper abroad. Is this principle applied to any other article of domestic manufacture? Are not the duties on all these articles to which allusion has been made as nearly prohibitory at the present time as the duty on paper? The honthere had been imported not a pound for years. He is slightly mistaken. It is true the importation is small-the importation of printing paper last year amounted to something less than ten thousand dollars-a small sum, I agree; but still there was some importation.

Why, sir, the export of four or five millions more of gold, if it affected the gold market but for a week to raise it five to ten per cent., causing, as it would, the same rise of every commodity in the country for that space of time, would make ten times the loss to the country which could be gained by anything in the way of reduction of the price of paper for years. There is and can be no doubt but that any increase in the export of gold would affect public credit and cause the price to rise, and of course the price of everything else to rise; and that all for the purpose of getting paper a few cents in the pound cheaper! It would be a most ruinous experiment.

Sir, until our country is in a condition again to export rice, cotton, tobacco, and naval stores, we cannot hope greatly to increase the present amount of our exports. There is no reason, there are no grounds, for such an expectation. Whatever we buy, then, from abroad more than we now buy, we have got to pay for, not in the products of our country, but in gold, and that would be a downward, dangerous, ruinous policy.

It is said we must import to some extent in order to get gold to pay the interest on our goldbearing bonds. Sir, if we manufactured all the commodities at home which we now purchase from abroad, and stopped this ruinous exportation of gold, how long would it be before our paper currency would be at par with gold? Let it once be understood that we produce here at home what we are now purchasing abroad, let us buy no more from abroad than we pay for in the products of our own industry, and keep the precious metals at home, and I say the day would be very near when the difference between our paper currency and the gold standard of the world would not be worth calculating.

There is then, Mr. President, no need of any legislation on the subject of the duty on paper, either as it regards its price, or as a question of revenue, or as a question of public policy. As a question of public policy it is interwoven with the great system of home industry, and there is no reason why the manufacturer of paper should be taken out of the catalogue of other great manufacturers and brought at once to a duty that shall be ruinous to the home production and cause our paper to be manufactured abroad.

The same policy, as the honorable Senator from Vermont suggests, should be applied, certainly, to all the necessaries of life. Clothing, all cotton and woolen fabrics, every species of manufacture that is now protected in this country and made in this country, would, by this system, be made

Mr. JOHNSON. Of foreign paper? Mr. FOSTER. Of foreign printing paper. Mr. SHERMAN. When I said not a dollar, I meant that practically there were no importa

tions.

Mr. FOSTER. I thought the Senator meant so. I agree this sum is no substantial correction. Mr. JOHNSON. Have you got the number of tons?

Mr. FOSTER. I had the memorandum before me a moment since.

Mr. SHERMAN. The amount manufactured was $107,000,000, and the amount imported, I think, ten or twelve thousand dollars; and therefore I said there had not been a dollar's worth imported.

Mr. FOSTER. In 1863-64 the amount was twenty-eight hundred and thirty reams of printing paper, valued at $7,962; of writing paper, $116,463; other manufactures of paper, $272,638; making a total of $389,101. That was the importation during the fiscal year 1863-64.

Now, Mr. President, I say the application of the principle of competition should be made in all other branches of manufacture as well as in this, and for the same reason; and I do not believe that we can at this time go into that competition without shutting up our mills. That there is any monopoly in the price of paper in this country by a combination among manufacturers I look upon as one of the idle fancies of the hour. Why, sir, there are between seven and eight hundred mills in the country, owned by as many men, scattered all over the country from the Atlantic to the Pacific. The idea that these persons are to combine and fix the price of paper above its real value and compel the people to buy it, is simply ridiculous. There is no such thing, and there can be no such thing. If paper making is a profitable business, the capitalists of this country are shrewd, discerning men, and they will go into the manufacture of paper; and if the price is too high it will be brought down, and brought down to a reasonable rate; and there is no danger and no possibility of a monopoly of a manufacture of this description. In order to make an article cheap, there must be a competition in the sale; and that is just what these various paper manufacturers are doing. They are goin about the country and competing with each other in the sale of their product; and that is what always makes an article cheap--competition in sale. If this policy should be inaugurated of reducing the duty on paper to three per cent., imposing in effect a penalty on the manufacture of paper here, our manufacturers could go abroad and manufacture cheaper than they could here. The effect of that policy would be to diminish all competition as regards sales, and make a competition only in the matter of purchase; and that is what raises the price of an article-competition in the purchase. Competition in the sale is what makes it cheap. Why do we not hear of a combination among the cotton manufacturers, or the woolen manufacturers, the iron manufacturers, or any other manufacturers, as well as a combination among the paper manufacturers?

Mr. JOHNSON. They were charged with it originally when the factories first started, but it was soon found to be unfounded.

Mr. FOSTER. So I apprehend will it be found in regard to this, for it is impossible in the nature of things that it should continue. The amount manufactured at different points and in different States is too wide-spread, the interests of the pco. ple who are engaged in the manufacture are too diverse to enable them thus to unite and monopolize an article of this sort. I have already stated that the amount produced in the country during the last year was almost thirty million dollars; and it is scattered over every State. I have returns from twenty-three States now before me, that paid taxes to this Government on the paper manufactured within them the last year. The idea that the manufacturers extended over twenty-three States are going to combine to make a monopoly is, as I have said, perfectly ridiculous. This is a great interest, and it is not to be struck at with impunity. I do not mean with impunity as regards the power of the manufacturers; they are in our hands no doubt; but I mean with regard to the interests of the country. We shall strike a blow at public prosperity when we strike a blow at so important a branch of industry as this.

I have spoken of the amount produced in the State of Ohio. The little State of Delaware produced last year the amount of $675,033. The great State of New York produced $8,014,900; the State of Massachusetts $7,555,933; the State of Connecticut, a small State, contributed her quota in the sum of $2,792,066.

Mr. JOHNSON. Have you Maryland there? Mr. FOSTER. No, sir, I have not; at least I do not put my eye upon it now. I say that these interests are too important and too large to be trifled with, and that any attempt to reduce the present duty is a blow at their prosperity.

Mr. President, I am quite free to avow myself a disciple in the school of Henry Clay of glorious memory in regard to the protection of domestic industry. I know that that doctrine found strong opposers and was jeered at and derided by the southern and southwestern States during all the life, or most of the life, of that great man; but unless I am greatly mistaken the experience of the last four years has taught the southern and southwestern States the wisdom and the sagacity of the policy taught and advocated by that ardent Kentuckian, but more ardent American, Henry Clay. The States in rebellion, if they had but adopted the system advocated so strongly by him, would have been in a condition to make a vastly better fight against us than they have done; and if the northern States had not to a considerable extent adopted that policy, we should have been beaten and driven ignominiously from the field long ago. Our Government would have been overthrown-prostrated. Unless I am greatly mistaken the day is not distant when our country, united again as it was, again having all the States represented here, no star fallen, the policy of domestic industry which was advocated as I have said by our great departed statesman, will have its strongest advocates and friends from the South and Southwest. The stern school of necessity, experience, has made converts in that region that reason and argument failed to make. This will be a tribute to the wisdom of the policy all the more valuable because it will come from most reluctant sources.

Mr. President, in order to raise the great amounts of money which we are now called upon to raise, we must develop our internal resources and cherish our home industry. The Senator from Ohio [Mr. WADE] is entirely right. We must open our mines (and they are inexhaustible) of coal and iron and lead and copper and silver and gold, not forgetting the ever-flowing fountains of oil. We must put into tillage and under cultivation our broad fields and vast prairies until they wave with golden grain, and echo with the song of the reaper. Then, sir, as the Senator from Ohio says, our debt, mighty as it is now in name, will never be felt as a burden. Our country will be united, happy, prosperous, glorious, and free, the joy of the whole earth. But if we adopt the contrary policy, if instead of employing our people at home and manufacturing the articles which we need as well as the articles of luxury and elegance which we now import from abroad, we purchase every

thing abroad because we can there buy cheaper, the course of the country will be rapidly downward; between us and national bankruptcy, repudiation, and ruin, there will be but a few steps. I hope we shall not take the initial one to-day by repealing this duty on paper, or indeed by meddling with it at all. Sound policy and wise statesmanship require us to leave it where it is.

The PRESIDING OFFICER, (Mr.POMEROY in the chair.) The question before the Senate is on the motion of the Senator from New Hampshire [Mr. HALE] to postpone the further consideration of this bill indefinitely.

Mr. SHERMAN. I hope the Senate will not postpone this matter, but meet it fairly by vote. There has been a great deal of discussion in the public prints and through the country and in the State Legislatures on the subject of the duty on paper, and I much prefer to decide it than to postpone it. In my own State the feeling is almost universally in favor of a reduction of the duty on paper. So strong was the feeling that when the subject was presented to the Ohio Legislature, the resolutions referred to by my colleague were passed by an almost unanimous vote, perhaps without a division. Occupying the position I did as chairman of the Committee on Finance, and not agreeing entirely with the opinion of the Legislature, I reëxamined the whole question with the sincere desire to comply with their request. I do not regard their resolutions as controlling my vote, but only as an opinion entitled to great weight and conclusive on questions about which I have doubts. The preamble and resolution is as follows:

"Whereas the duty on imported paper amounts to prohibition, and produces no revenue, but costs the Government an amount estimated at $500,000 per annum; and whereas said duty is an unprofitable tax upon the people, and a needless limitation upon the freedom of the press: Therefore,

"Resolved by the General Assembly of the State of Ohio, That our Senators and Representatives are hereby requested to exert their influence for the removal or diminution of said duty."

We are requested to remove or diminish the duty on paper. To remove the duty entirely, without removing the excise on domestic paper, could not have been contemplated by the Legislature, as its gross injustice is apparent. I am willing to diminish it, but not to the extent desired. If the question was presented to the members of the Legislature, for whom I have high respect, as it has been to me, I do not believe five members of either branch would vote in favor of a reduction of the duty to the rate of three per cent. They desired no doubt to see a reduction in the price of paper, because under the operation of the high price of paper many of the local country papers have been driven out of existence. I have received letters from editors and publishers in different parts of my State demanding and urging the repeal of the duty on paper. They say to me that the local papers are being driven out of existence, but this is by competition with the large papers in the cities of Cleveland, Columbus, and Cincinnati, and with the papers in New York, and not by the high price of paper. Without looking to the cause of this increased price, they naturally suppose that it is caused by the tariff laws.

I observed also further, by a comparison of the price of paper and gold, that it only followed that invariable standard of value. At the commencement of the war, paper was ten cents per pound. When gold advanced to 280, it was twenty-eight cents; when it fell to 200 it was twenty cents per pound, and so on, governed by the invariable standard. I was satisfied under these circumstances, that the duty on imported paper did not create this large price. It was the price of gold; it was the price of the commodities that enter into the manufacture of paper; it was the price of labor; it was the price of iron and all the materials which enter into and formed a part of the expenses of the laboring man of the country. All these had advanced in proportion, and the duty had but little to do with it. When reduced from thirty-five to twenty per cent. paper still advanced with gold.

Then, again, when I came to examine the fact that we levied upon our own manufacturers ten per cent., and this could be demonstrated in figures so plain that every school-boy could see it, the proposition to levy only three per cent. on the foreign manufacturer was abhorrent to my sense of justice. The Legislature of Ohio has not, and would not, if here, vote for that proposition; a proposition to make a discrimination in favor of the Canada manufacturers, on the opposite side of our lakes, of at least seven per cent.; a proposition to make a discrimination in favor of the manufacturers in Belgium, where labor is cheap, of seven per cent. It was not only a departure from the principles advocated by the great body of the Legislative Assembly of Ohio, but it was a departure from any principle ever advocated by the free-trade men.

Mr. FOSTER. Except imposing a penalty for making paper in this country.

Mr. SHERMAN. What was the principle of the free-trade men of the country? All of them said that American industry ought to be placed on the same footing and with the same competition with foreign industry, so that if any occupation of life proved to be unprofitable by fair competition the people might go to some other employment. But, sir, the proposed tax of three per cent. on foreign paper was absolute discrimination against the home manufacturer.

I will take a case put by the figures. We manufacture now $80,000,000 worth of paper as shown by the statistics. The amount now paid to the Government as internal revenue and as customs on that is about $7,000,000; I mean including the duties on chemicals. There is, first, three per cent. on all manufactured paper. Then there is the duty of five per cent. for the income tax. Then there are all these chemicals, all the materials that enter into the manufacture. Taking these together, it is proven very plainly that on the average the duty is ten per cent. on the aggregate value of the paper; so that in one form or another the internal duty on paper in its various formsbooks, newspapers, &c.—is at least $8,000,000. If we were to import that amount of paper into the country, instead of manufacturing it in our own country, what would be the effect? We would get three per cent. on $40,000,000 in gold. Reduced to the foreign valuation that $80,000,000 would be about $40,000,000 in gold, and a duty of three per cent. on $40,000,000 would be $1,200,000 in gold, or, reduced to our standard of value, would be $2,400,000 in the place of $8,000,000; so that by this proposition, passed by the House of Representatives without much debate, the Government of the United States would lose in revenue five or six million dollars.

Who would be benefited by it? Would the newspapers be benefited? Not at all. They would destroy home competition, because under this discrimination against home industry no paper manufactory could be carried on here. They would destroy our mills at home, and then we would be at the mercy of the paper manufacturers abroad; and not only that, we would have to export $40,000,000 in gold to pay for that which formerly was made at home, giving employment to our own people. Such a proposition as that, if submitted to the Legislature of Ohio, after full discussion, I venture to say would not have been approved by three members of that body. And, sir, my own been misrepresented at

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