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of Texas and Arkansas who have opposed the enactment of a standard child-labor law in those States, though the industry is comparatively insignificant. And when I went to the Oklahoma Legislature to write its child-labor law, the only opponent to childlabor legislation was the proprietor of the single cotton mill which Oklahoma possessed. These facts are all matters of record, and while some of the able and astute manufacturers between sessions of the legislature are fond of congratulating themselves upon their advanced position in the matter of child-labor reform, and even pass beautiful resolutions at their annual conventions, they are reformers until the legislature meets and there is a prospect for a little better protection for the working children.

LET THEM COME WITH CLEAN HANDS.

Perhaps the manufacturers of cotton goods, North and South, before they will dare come again before the representatives of the American people asking for practically prohibitive tariff schedules on their infant industry, will have to come with clean hands to justify their claim to so great a benefit; will, in New England, agree to an eight-hour day for children under 16, such as is already prescribed by law in such great manufacturing States as New York, Ohio, and Illinois; and with the proper standard of legislation, will see to it that the laws are better enforced. The cotton manufacturers of the Southern States, whose lobbyists ever crowd the doors of every Southern legislature where restriction of the child-labor evil, so far as it concerns the cotton mills, is being debated, will have to cease their opposition and agree to the 14-year age limit, the short working day for children, the abolition of night work, and the enforcement of the law, else the representatives of the American people may withhold protection from those who deny it to the children.

So far as the establishment of a standard child-labor law, uniform in its requirements, is concerned, it is not too much to say that except for the position of the cotton-mill interests this would be a matter of speedy accomplishment. If in New England, Pennsylvania, and the southern cotton manufacturing States, the principles of this standard child-labor law could be agreed to, it would be a matter of little trouble and short time to secure similar legislation everywhere else. So we can properly hold accountable the cotton-mill industry not only for its direct oppression of childhood, but for holding back the Nation itself in the proper protection of the working children. And it seems to me that if there were a spark of the old southern patriotism left in the hearts of these men, if they could feel any shame at the peculiar position in which they have put the South and hold the South in the matter of child labor, they would at once see that this reproach is removed. The individual loss would be small in any instance, even if the contention can not be proved that the employment of children itself is a costly error to the business concerned. But when the manufacturers combine in their various industrial associations, and stand together against any legislative protection for the children, they not only keep enslaved the children of the cotton-mill industry, numbered by tens of thousands, but children of other industries, which would make no trouble over the enactment of a restrictive law. And through the backward position of the cotton-mill States, these manufacturers are really in a wholesale conspiracy against the toiling children of the Nation.

I have called the title of this paper, "The Herod Among Industries." If the employment of immature children tends to their bodily, mental, and spiritual degeneracy, an industry so founded upon the basis of child labor, as is this one, can be indicted for child murder, for the slaughter of the innocents. The Herods have not been popular among the rulers of history. And if this great industry, engaged in the beneficent business of giving cheap clothing to the world is nevertheless guilty under the indictment, so far as its existence on American soil is concerned, it may well look forward to one of two alternatives, the reform of its child-labor conditions or its destruction through economic law or legislative enactment. Already there are cries of distress being heard, pitiful pleas are being made against legislative restriction or child labor on the ground that the industry in the South is in a perilous state. Japan, building 108 new cotton mills in one year, has already taken possession of the Eastern market. It may very well turn out to be true that with the ever-increasing foreign competition which the cotton-mill industry in America will have to face, it will become an industry with too low a wage scale to flourish on American soil. And if refusing to be reformed, holding on, to the last gasp, to its child-labor system, with its long hours and low wages and the defenseless condition of its workers, it is destroyed at last, on its crumbling smokestacks, which now proudly flaunt their banners of industry against the sky, men will write the obituary of the ancient Herods:

"They are dead that sought the young child's life."

A REVISION PROPOSAL, BY EVERETT P. WHEELER.

In considering the question of tariff reform now so vividly before the people and so insistently demanding answer, heed should be taken of certain lines of proven fact and established principles.

The primal requirement is that the American people should become absolutely convinced that the prosperity of this country is the outgrowth, not of high protective tariffs, but of causes whose potency may be seen and understood without elaborate or abstruse reasoning.

1. The unrivaled natural resources of the country. These vary in different States. 2. The condition of free trade between these States which the Constitution has guaranteed-under which condition each State has the benefit of the productive capacity of the others, there being no obstructive taxes to prevent or hamper the free exchange of products. The prosperity of one State has been, therefore, the prosperity

of all.

3. Our free institutions, which give to every citizen an opportunity to improve his condition, as far as the law can insure such equality of opportunity. This is the very genius of the American system, and is absolutely opposed to the high-tariff schemes which have, in recent years especially, been fastened upon the people under the guise of "protection." The underlying object of these schemes has not been to insure equality of opportunity, but to give to every person who has become the proprietor of a mine, or a forest, an artificial bonus, which will enable him to make out of this natural advantage twice the profit that under ordinary circumstances he would have been able to achieve.

Having in view the mass of facts thus indicated, let us consider some of the points brought prominently forward in the discussion as to the revision of the existing tariff. There is a great deal of talk about the difficulty of ascertaining the cost of production. This talk is absolutely deceptive. It overlooks the fact that in 1905 a census of American manufactures was taken by the United States Government. It was taken impartially, with no view to the tariff, but for the sole purpose of getting at the actual facts. The general results of this census, stated in thousands of dollars, is as follows:

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In round numbers: Product, fourteen billions and a half; wages, two billions and a half; salaries, half a billion; net earnings, three billions.

The report of the United States Steel Corporation for the same year supplies us with corroboration of the accuracy of these figures. The gross product of that great corporation, in thousands of dollars, was $444,405. To obtain this result there was expended for salaries and wages $99,778, or 224 per cent.

The United States official returns of the textile industry for the same year, in thousands of dollars, corroborate the conclusion drawn from the returns from all industries:

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The Census tables for 1905 do not give the miscellaneous expenses. After paying these out of earnings the balance is profit.

From these figures it appears that the net earnings of capital invested in manufactures during the census year were about equal to the entire amount expended for. salaries and wages. Taking the industries of the country as a whole, they were larger; taking the textile industry, they were somewhat less; but in both cases very nearly the same.

It appears distinctly, then, that the entire wage cost of the product of the manufactures of this country did not, in 1905, exceed 20 per cent of the value of the product. These figures are officially authentic. What objection, then, can honestly be made to the immediate enactment of a law that no article shall pay a higher rate of duty than 50 per cent ad valorem? This is two and a half times the proportion of the labor cost of our manufactured articles. Certainly it is more than sufficient to cover the difference in the cost of production.

From this general provision there should be excepted the duties on wine, spirits, and tobacco. On all of these internal-revenue taxes are laid, and the tariff on the imported article should be sufficient to countervail the internal-revenue tax.

An amendment similar to that here suggested was proposed by Senator Gray in the Senate of the United States when the McKinley tariff bill was under consideration. A somewhat similar provision was afterwards proposed by John Sharp Williams in the House of Representatives. In both Houses a high-tariff majority voted the proposition down. And yet in the Philippine tariff of 1909 it was provided that "No article shall pay a higher rate of duty than 100 per cent ad valorem" except, etc. The propriety of fixing a limit to the upward scaling of the tariff was distinctly recognized. The exceptions, however, were curious and distinctly instructive. The Sugar Trust was sufficiently powerful to have the 100 per cent limit withdrawn as to sugar. The manufacturers of matches obtained similar favor. Can anyone justify such excep tions? And what a lurid light special legislation of this sort throws on the tariff arguments which have heretofore prevailed in congressional tariff committees.

The tariff reformer may say that the proposed limit of 50 per cent is too high, allowing an excess over any possible difference in the cost of production between America and Europe. Probably it is; but the existing tariff, in many cases, amounts to 100 per cent ad valorem. A cut to 50 per cent will give the consumer relief and will not be so radical as to cause commercial distress.

When the McKinley bill was before the Senate, Senator Gray proposed an amendment limiting the amount of the duty upon any imported article to the entire wage cost involved in producing the like article in America. Was that a sufficient concession to the high-tariff pleas respecting the advantage held by the foreign manufacturer in the low rate of wages obtaining abroad? It would seem so. Yet the proposition was voted down.

Among the objections made to any cut in our tariff rates is this: That the American manufacturer is at a disadvantage in competing with foreign manufacturers because of the duties now imposed upon raw material. The best answer to this is to put raw materials on the free list. This would directly decrease the selling price of the finished product. The cost of material is more than half the value of the finished product and amounts to two-thirds of the cost of production. The duties which we levy on these materials increase directly this cost of production. Strike off these duties. Give our manufacturers free raw material. Immediately, without diminishing the fair profits of industry, you would diminish the selling price. You would, furthermore, work a practical increase in wages by giving the workman the necessaries of life cheaper than he can now buy them. Not only so, but by diminishing the cost of the finished product, and consequently, the price of it you would enlarge the market for it. The demand would be increased, and with the increased demand wages would advance. Thus, by simply taking off the burdens that the present law imposes upon American industry, employer and workmen would alike be benefited.

The question of tariff reform presents many phases, and these lines are offered rather as suggestion than scientific analysis. Clouds of dust are being beaten up. But through all would it not be at once simple and sensible to stick close to the question as to whether or not there is to be a limit to the rates of duty claimed in the name of "protection." Is it or is it not a fair proposition that no duty should exceed 50 per cent of the value of the article upon which it is imposed? The proposition would seem to be reasonable; and if this be so, we have here at least one clear rule for the achievement of a rational revision of the tariff-revision downward.

THE ELEVENTH ANNUAL REPORT OF THE AMERICAN WOOLEN CO. FOR THE FISCAL YEAR ENDING DECEMBER 31, 1909.

The year 1909 will pass into history as a favorable one to our industry. The anticipation of your directors made in our last report was amply verified.

Although the orders for goods were unprecedented in the months of January and February and were immediately put into the machinery (a great portion of which was still idle, recovering from the effects of the 1907 panic) it was not until well into March that the goods began to come from the looms for market. This lapse of time is reflected in the sales, which, but for that interruption, would undoubtedly have been the greatest in its history. As it was, the company's sales and income amounted to approximately $48,000,000, against $29,000,000 the previous year.

The year 1910 opened with prospects which appeared nearly as bright as those of the previous year, but at this writing the outlook is somewhat obscure because of the uncertainty of the effect of the expected decisions of the United States Supreme Court in the two pending cases under the Sherman Antitrust Act.

There has already been a faltering in orders for goods caused by the conservative action of the merchants of the country in placing their orders, but notwithstanding this we have every reason to expect a good volume of business and have prepared ourselves to handle it. The advance sales of cloth have been provided for by engagements of wool in anticipation of our wants.

This company depends upon a large volume of business for its success; the margin of profit is small, and while an endeavor has been made to create an impression reflecting upon the greed of the woolen and worsted manufacturers, the fact remains that the average profit for the last five years upon the cloth made by this company that enters into a suit of clothes will average less than 40 cents per suit of clothes. Certainly, considering the risks involved, the large amount of capital necessary for the conduct of the business, fluctuations in the raw materials, and the necessity of a large volume of business to employ all its machinery, any fair-minded person can not consider this profit unreasonable. If the price of clothing appears high, one must look elsewhere for the cause.

THE COMPANY'S POPULARITY WITH THE Trade.

In the 10 years' existence of your company we have passed through several years of depression and panic, but such periods have only served to cement the friendly relationship now existing with the trade in general, for in such times many a customer has found the American Woolen Co. not a grasping monopoly but a bulwark of strength, ready to extend a helping hand.

When the American Woolen Co. was formed 10 years ago, there were many prophecies of failure, but our organization has been of great assistance in elevating the woolen business from a chaotic state to a firm position among the greatest of American industries, and the steady growth in the volume of our business attests the loyalty and good will of the trade in general.

WOOL.

The price advance in wool, our main raw material, for this season's goods has been about 25 per cent over wools provided for the corresponding season's goods of a year ago.

RETURN TO POPULARITY OF WOOLEN GOODS.

While woolen goods have been out of favor for several years, the present year shows a return to popularity of woolen goods, with a less demand, perhaps, for cotton-adulterated goods, which are being superseded by all-woolen fabrics. As to worsteds, our faith in the demand for these fabrics is unabated, and we look for a substantial and continued growth in the line of manufacture of these desirable fabrics. In other words, we anticipate a return to the days when both fabrics will be wanted, and both our woolen and worsted machinery will be fully occupied.

THE WOOD WORSTED MILLS AND THE AYER MILLS.

The Wood worsted and Ayer mills have a separate corporate existence, but their entire capital stock, excepting one share to each director as required by law, is owned by the American Woolen Co. The business of the Wood worsted mills is not included in the American Woolen Co.'s report. The Ayer mills are now in process of construction, and the management anticipate having them in operation by July 1, 1910. It is planned to keep the business of both the Wood worsted and Ayer mills separate, until the earnings of each of the mills have been sufficient to liquidate the indebted

ness represented by the outstanding coupon notes. After this is accomplished, the earnings of these two mills will be included in the earnings of the American Woolen Co. In the meantime each mill will be allowed to work out its own financing, and in the case of the Wood worsted mills this financial policy is being successfully demonstrated.

A TEN-YEAR RECORD.

The report here presented is the tenth full annual report of the company; the first report, that of 1899, covering only nine and one-half months' operations. The company has, during the period of its existence covering 10 years, done an aggregate business of $424,536,030.08; has earned, as shown by reports, $37,107,559.57; has paid out in dividends on its preferred shares, quarterly, without an interruption, $18,800,000; has charged to depreciation, $7,986,374.82; has created a surplus of $10,514,808.23, and has increased the wages of its employees, without any interval of decrease in wages, some 25 per cent.

The growth of the company's business from $20,000,000 in 1899 to $51,000,000 in 1906, has been most gratifying. This increase has of necessity required a largely increased working capital, and this has been accomplished by an increase in the preferred stock from $20,000,000 to $40,000,000.

All of the plants of the American Woolen Co. are free from leases, mortgages, and bonded indebtedness.

The company carries full insurance on all its properties, materials, and fabrics. In addition to the fire insurance the company is protected by insurance against costs or damages arising from injuries to its employees and others.

The physical condition of the property was never better. Improvements have been made in all the plants of the company, and in many mills modern, up-to-date equipment has been substituted for all of the original machinery.

The improvements installed and the new mills built have brought the capacity of the company up to a high state of efficiency.

The operations for the fiscal year are shown in the treasurer's report which is appended.

WM. M. WOOD, President.

TREASURER'S STATEMENT.

Cash..

American Woolen Co. balance sheet. Dec. 31, 1909.

Inventories: Wool and fabrics, raw, wrought and in process, and coal

Accounts receivable, net.

and supplies.....

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Accrued dividends on preferred stock to Dec. 31, 1909 (payable Jan

15, 1910)

Capital stock (common).

Capital stock (preferred).

Surplus.......

$29, 501. 100. 00
40, 000, 000. 00

$2, 202, 572. 67

19, 074, 684. 23

18,938, 435. 37

40, 215, 692. 27 42, 183, 568. 93

99, 300.00 3, 499, 400.00

85, 997, 961. 20

4,585, 350.00 813, 369. 64

5, 398, 719. 64

583, 333. 33

69, 501, 100.00 10, 514, 808. 23

85,997,961. 20

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