quoted below for apartments described above is the result of a careful investigation made during the present year. For the purpose of illustrating how the cost of housing accommodations in this district is increased by the tariff, we beg to submit the following figures obtained from a reliable builder: A house 37 feet 6 inches by 88 feet, five stories high and arranged for four families on a floor, and which would be built in compliance with the conditions of the present law would cost, exclusive of the land, about $28,000. Of this amount the materials would cost, approximately, $18,000. A very conservative estimate of the duty on $18,000 of building material, if purchased abroad would be $3,000; or we may say that if $18,000 of domestic material were used, its price would be $1,500 less if no duties were imposed on foreign goods. Thus, the result of the tariff is to increase the cost of the house $1,500, on which $1,500 rental must be collected from the tenants. It also compels the payment annually of a city tax of $27.45, which at the present tax rate in this city is the rate on $1,500. This increased cost of $1,500 must be insured, both of which charges are finally paid by the tenant. If building materials were on the free list, not only would the original $1,500 be saved, but also the amount of the taxes and insurance on this increased cost, which must be paid as long as the building lasts. THE BUREAU OF LABOR OF THE DEPARTMENT OF COMMERCE AND LABOR. In Bulletin No. 108 (H. Doc. No. 925, 62d Cong., 2d sess.) of the Bureau of Labor of the Department of Commerce and Labor, page 14, is a table showing the relative prices of 15 articles of food. This table shows an increase in prices since 1890 of 51 per cent, and that 13 per cent of this increase has taken place from January, 1911. to August, 1912. When it is borne in mind that persons of limited means are compelled to purchase their household supplies in very small quantities, and are therefore, compelled to pay much higher prices than when larger purchases are made, it is self-evident that the great increase in price that has taken place bears with very great severity on wage earners and all people of limited means. We therefore respectfully ask that all foodstuffs and all materials that enter into the construction of houses be placed upon the free list in order that the working people and those dependent on them be relieved of the unnecessary burdens which the present tariff imposes upon them. OSCAR LUSTGARTEN, We beg to annex hereto a printed copy of an address on "The tariff tax on homes," made by Fred Cyrus Leubuscher, in 1905, at the thirteenth annual meeting of the United States League of Local Building and Loan Associations. This paper was subsequently incorporated in a speech of Hon. John Sharp Williams, and appears in full in the Congressional Record. While the figures are predicated on the Dingley tariff, still the arguments are as cogent to-day as they were in 1905: THE TARIFF TAX ON HOMES. "You are quite presumptuous," wrote a famous political economist to whom I had applied for data, "to suppose that, in the compass of a short paper, you can fully cover such a subject as the tariff tax on homes. He was correct in his criticismfrom his standpoint; for he assumed that I meant to discuss not only the house but all of its contents-food, clothing, furniture, and bric-a-brac, as well as lumber, brick, stone, and iron. It would not only be presumptuous but it would be impertinent as well for me, as a building association man in a convention of the United States League of Building Associations, to attempt to treat, save incidentally, of anything except the building itself and the materials which enter into the making of it. It would also be impolitic, if I expect to make any impression, for me to arouse political prejudices, as I surely would do if I introduced a discussion of the questions of protection and free trade that are involved in the tariff on food, clothing, and furniture. I distinctly disavow any such intention in this paper. I claim that a discussion of the question of free raw materials that enter so largely into the construction of houses should not shock the most hidebound protectionist, and that he should join with the free trader in the demand for untaxed lumber, untaxed brick, untaxed iron and steel, untaxed cement, untaxed window glass, etc. The expense of housing is, next to that of food, the principal item entering into the cost of living. The July, 1904, report of the Bureau of Labor, based upon new estimates for 2,567 families, gives the per cent of expenditures for the principal items entering into the cost of living as follows: Food. Per cent. Per cent. 0.31 3.42 1.09 1.60 1.62 1.42 2.67 5.87 .100.00 If we lump the per cents of rent, interest on mortgages and taxes, which legitimately belong together, we have a total of 15.28, making it the second largest item in the cost of living. Rent and building materials should be considered together, because the tariff tax on rent is due to the tariff tax on building materials, which greatly increases the cost of building and repairing houses. Those who buy materials and build their own homes pay their tariff tribute on building materials direct to the scores of protected trusts that "guard our homes as a pack of wolves guards a flock of sheep." Those who rent homes pay their tariff tribute through the landlords, who add enough to the rent bills to cover the tariff cost of constructing the rented homes. The population of this country probably increased in the year which ended July 1 by over 2,000,000 souls, half of them immigrants, the latter being adults in greater proportion than the native-born population. In order merely to supply shelter for this addition to the population, assigning 5 persons to a group or family, 400,000 dwellings would be required. At an average of only $1,000 for the cost of a dwelling place of 5 persons, the housing of the increased population would require 400,000 dwelling places at $1,000 each, or an expenditure of $400,000,000. In order to meet this demand on the men that must be occupied in cutting timber, on the men in the sawmills, in the carpenters' shops, in the brickyards, in the stone quarries, in the nail factories, etc., and on the men engaged in assembling and putting up the dwellings, 800,000 men must be occupied for one year merely to house the increase of population of a single year. Half this number at least would be employed in the building trades-carpenters, masons, painters, plumbers, and the like. Notwithstanding these stupendous figures the manufacture of homes finds no place in the United States census and there are no data by which the annual cost can be accurately computed. We must therefore get at our figures in another way. Excluding the lumbermen, the men in the sawmills, in the brickyards, and in the stone quarries, and including only carpenters, masons, painters, plasterers, and plumbers occupied in the building trades, the number in 1900 exceeded 1,200,000— the largest single body occupied in one art outside of agriculture. It is estimated that the average earnings of these classes is $2 a day for 300 days in the year, or $600 a year. Wages are higher in the cities and lower in the country; but taking a general average of $2 a day for 1,200,000 men their earnings are over $700,000,000 annually. As the cost of labor in putting up buildings may be computed in a rough and ready way at 30 per cent of the final cost, the annual value of manufactured buildings in the United States must exceed two thousand million dollars. The manufacture of dwellings in ratio to the population is diminishing. The population of cities is becoming more and more congested. There is greater and greater difficulty in housing the increasing number. The cost of dwellings, and the 78959-VOL 6-13-24 consequent increase of rent, presses harder and harder every year upon persons of moderate and small incomes. There are several reasons for this, and one reason will be found in the taxation of building materials imposed under the present tariff. Nearly every article that enters into the construction of the dwelling house is heavily taxed, at the expense of those who pay rent or who build their own dwellings, for the sole benefit and profit of a very small number belonging to the privileged class who own the timberlands, stone quarries, marble quarries, and deposits of clay, and of the Steel Trust, Window Glass Trust, Plate Glass Trust, and other members of the privileged class who have perverted the power of public taxation to purposes of private gain. In the matter of timber we are deprived of the abundance of Canada while we are denuding our own hills, thus not only taxing the dwellings but destroying the protection of the water supplies of the country. Bricks and stone which we might derive in abundance from the neighboring Dominion are heavily taxed. Marble is heavily taxed, one of the recipients of the bounty being a Senator of the United States. The makers of every kind of household hardware are taxed on their steel, on their tin plates, on their copper, on their zinc, on their lead. The makers of paint are taxed on the materials which form component parts; and so on throughout the list. It would be almost beyond possibility to trace out the evil of these influences or to compute the increase of cost on each dwelling place. It can not be less than 20 per cent on the cost of every dwelling house, and is more likely to be in excess of 25 per cent than any other figure. In this way the poor are crowded or unhoused. Persons of small incomes are taxed more heavily than any other class in proportion to their income. The whole community is burdened by taxes from which the Government receives little or no revenue, but of which nearly all the proceeds are conveyed into the pockets of the privileged class at whose instance the power of public taxation is perverted to purposes of private gain. From the most high protectionist standpoint the tariff tax is unnecessary on the mass of building materials. In the United States duties are levied for two ostensible purposes: First, to raise revenue; second, to protect our manufacturers and wage workers against the lower prices of foreign countries which would otherwise undersell them and thus tend to drive them out of business. Are these two purposes subserved by levying the present tariff on building materials? Let us see. The 1900 census values the principal products that enter into the building of houses as follows: Brick and tile.. Carpentering.. Gas and lamp fixtures.. Gas machines and meters.. Glass... Iron and steel nails and spikes. Iron and steel pipe......... Iron work-architectural, etc.. Lead, bar, pipe, and sheet.. Lime and cement... Lumber, planing-mill products.. Marble and stone work... Masonry, brick and stone.. Painting and paper hanging. Paper hangings. Plumbers' supplies.... Plumbing, gas, etc., fittings. Pumps, not steam.. Roofing and roofing materials.. Steam fittings and heating apparatus. Tin and terne plate... Tinsmithing, sheet iron working, etc.. Wood, turned and carved.. Total...... $51, 270, 476 316, 101, 758 12, 577, 806 4,392, 730 56, 539, 712 14, 777, 299 21, 292, 043 53, 508, 179 7,477, 824 28, 689, 135 168, 343, 003 1, 153, 540 85, 101, 591 203, 593, 634 27, 184, 331 88,396, 852 50,874,995 10, 663, 209 14, 771, 185 131, 852, 567 1,341, 713 29,916, 592 22,084, 860 31, 892, 011 100, 310, 720 18, 687, 240 14, 338, 503 1,567, 133, 508 These figures were obtained from factories and of course are wholesale prices. I think it is fair to state that at least one-third more is paid by the final consumer after the products have passed through the hands of various middlemen. This brings the figures up to about $2,100,000,000. Mr. Byron W. Holt, the well-known economist, has made careful estimates which show that to these figures should be added at least $200,000,000 for lumber other than planing-mill products, and $200,000,000 more as the cost of foundry, machine-shop, and blacksmithing products and of structural iron and steel. He also computes the cost of all other materials at $117,000,000. This makes a grand total of about $2,600,000,000 as the annual expense bill of the people of the United States for erecting and repairing buildings. Probably from 20 per cent to 30 per cent of this sum is expended on business and public buildings, churches, etc.; making a liberal deduction for these, we find that Uncle Sam's nephews and nieces expend every year almost $2,000,000,000 (or the wealth of two Rockefellers) with which to protect themselves from wind and weather. The cost of building materials is now fullt 50 per cent higher than it was eight years ago when the Dingley tariff bill became a law. This is only in slight measure due to higher wages; and it is estimated that the tariff is responsible for most of this increase. According to Moody's Manual most of the trusts have been formed since 1898; and it is only since that date that the lumber and other trusts have fully realized how the tariff enables them to raise prices. There can be no doubt that if the tariff on building material were abolished the prices of lumber, paint, varnish, glass, tin plate, pipe, cement, nails, screws, lead, etc., would be lower than in 1897. If the tariff increases the cost of houses only one-fourth, it adds more than 10 per cent to rent, for the value of houses is on an average probably twice that of the lots on which they stand. Rents in cheap flat houses average annually about 10 per cent of the value of the house and lot. If a man pays $9 a month rent for an apartment, his part of the house is probably worth $800 and of the lot on which it stands, $300; total, $1,100. Without a tariff, he would pay rent on property worth only $900 ($600 for his part of the house and $300 for his part of the lot) instead of $1,100, and his rent would not average more than $8 a month. The low cost of building materials is largely responsible for the very low rents in England. A large proportion of the rent for homes goes to cover the cost of repairs. These consist largely of lumber, paint, glass, cement, nails, screws, and roofing materials, the cost of nearly all of which is increased 40 or 50 per cent, or more, by the tariff. If the materials for repairs on the average house cost $15 a year the tariff is responsible for about $4 or $5 of this amount. I have, therefore, estimated the tariff cost of those who own and of those who rent homes together. In either case it is the occupants of homes who pay the so-called protective tariff tax of constructing and repairing the homes of this country-unprotected from the protected tariff trusts. It requires a great deal of calculation to arrive at the average rate of duty under the tariff act of 1897. On some products the duty is imposed according to weight or quantity, on others according to the value, and on still others according to both quantity or weight and value. On Portland cement, for instance, the rate is 8 cents per 100 pounds, and on other cement 20 per cent ad valorem. I have, however, taken the report of the Bureau of Statistics of the Department of Commerce and Labor, and carefully calculated the ratio between the imports for the year ending June 30, 1904, and the duties collected thereon, and I find that the average percentage of duty on the principal materials entering into buildings is as follows: Now, what justification is there for thus handicapping the poor man in his struggle for a home? Is it revenue? In 1903 less than $12,000,000 was collected in the customhouses from duties on building materials, and in making up the list, in order to be perfectly fair, I included materials that are not used in the average building, such as asphaltum, coal tar, oxide of cobalt, iron beams and girders, marble and onyx. So that less than 2 per cent of the Federal revenue is derived from this source-surely not enough to warrant the Government in discouraging the building of homes. Take the item of cement. I venture to prophesy that the exterior of the humble home of the future will consist of stucco or cement-that is, if the price is cheapened. Buildings constructed of this material not only present a pleasing appearance but are practically indestructible. During the past 10 years the manufacture of cement has increased at the rate of about 25 per cent per annum. The tariff on the various kinds of cement averages 25 per cent ad valorem, and it is evident that, were it not for this extra charge of one-fourth added to the price, the sales would be largely increased. According to the census bulletin, the United States in 1901 manufactured 20,068,000 barrels of cement, valued at $15,786,000, or at the rate of 75 cents a barrel. During the same year we imported only 939,330 barrels, valued at $704,000. The duty paid on this was only about $175,000. Will 80,000,000 Americans continue to limit their supply of this most necessary building material for the sake of a beggarly $175,000 of revenue? The hard-headedness of the average Yankee will soon impel him to answer an emphatic "No!" to that question. Even the most hidebound protectionist must now admit that unless the apologists for a tariff tax on building materials can show that it tends not only to keep men employed who without it would be obliged to seek another livelihood, but also to increase their wages, it should be repealed by the next Congress. Remember that we are not now considering manufactured articles, such as cotton goods, shoes, etc., but what are practically raw materials, for all things used for the building of a house are, in relation to it, raw materials. If the tariff on these were necessary in order to keep men employed at living wages, the majority of the American people would bear it patiently, for they seem wedded to the protectionist idea. The prices they pay, however, should be greater than the European prices for similar goods only in the proportion as American wages are greater than the European. As a matter of fact, the prices charged their fellow countrymen by the trusts which control the principal building materials are many times greater than the difference in wages. Besides that, if the tariff is necessary in order to maintain what the trusts call the American standard of wages in competition with the pauper wages of Europe, why is it that these same trusts are able to export to those poverty stricken countries, and at a profit, too? Window glass is heavily taxed, and the Census Bulletin of July 3, 1902, states (at p. 42) that exports of this most necessary building material are "steadily increasing." The most important item in the building of homes is the lumber. The tariff tax on lumber makes it practically prohibitory to import anything in this line except mahogany and other woods which are not grown here. The Census Bulletin of June 24, 1902, gives the value of the annual exports of lumber as $34,340,119, and states that "". more than half consisted of boards, deals, planks, joists, scantlings, and shingles." After seeing these official figures, what possible justification can the apologist for the tariff on lumber plead for its retention? I have thus far shown that the only two reasons that justify a tariff, viz, revenue and protection, do not apply to building materials. The hypocritical pretenses of the building material trusts have been proven, I will now show that they have taken advantage of the situation by not only getting all they can out of their fellow countrymen, but are actually enabled to undersell foreigners on their own territory. They export large quantities of their products and sell them abroad at competitive free-trade prices. This is the fact with the Tin Plate Trust and the Lead Trust, but is more strikingly illustrated with the Steel Trust than with the others. Most kinds of iron and steel sell here for from 50 to 100 per cent above foreign prices. Careful estimates of the tariff profits of the United States Steel Corporation indicate that they amount to $162,000,000 for the years 1902 and 1903, the total net profits being $242,000,000. These estimates were based mainly on the difference between the export and home prices of steel products and goods, the difference being multiplied by the quantity of each kind of product sold, as given in the annual report of this company for the year ending December 31, 1903. This $162,000,000 is clear tariff profit. That is, had there been no duties on these steel products, and had they been sold here at the same prices for which they were sold abroad, they would have cost our consumers $162,000,000 less than they did. As nearly all of these are unfinished products, it is evident that American manufacturers, to whom steel is a raw material, have to pay nearly $80,000,000 a year more for these materials to the United States Steel Co. than is paid by their foreign competitors, even though they buy steel of our Steel Trust. The United States Steel Co. manufactures only two-thirds of our steel; therefore, adding the tariff tax charged by the manufacturers of the other third, we find that Americans are annually charged for American steel $120,000,000 more than are Englishmen, Germans, Frenchmen, and Russians. This in itself is a great handicap upon our manufacturers, especially when attempting to sell goods in foreign markets. It is this discrimination in favor of foreign manufacturers, making it much cheaper to produce outside of than inside of our tariff wall, that is mainly responsible for the exodus of American capital into foreign countries. Scores of "branch" mills and factories, operated by Americans have, during the past few years, been located |