New-York tribune., 1908-12-16
SCHWAB ON THE TARIFF
FATORS PRESENT DUTIES.
Says DOzcn7Cdrd RerisiOn on Steel
Schedules Would Do Harm.
IFrom me tribune Bureau. J

Washington Dec 15.-The testimony OF Charles
NJ Schwab president Of the Bethlehem Steel Com
pany and ex-president of the United States Steel
Corporati ton, before the Ways and Means Commit
tee to-day, was considered by most of those who
heard his answers and observed his ability 10 give
figures which seemed to stand a rigid cross-eNaIl-
nation as decidedly effective Mr.. Schwab said
that he came voluntarily. but that his appearance
was not without some coercion by the committee
was evidenced by the fact that he had no formal
statement TO make when he took the stand, ou;
contentcd himself with answering questions After
he had submitted to four hours examination all
Of which was conducted in the best possible splrlt
MI Schwab announced that he favored a continu-
nnce OF the present duties on steel and iron. and
that he was afraid a radical downward revision
would result in great damage to the business IN
terests of this country.
While Mr. Schwab practically admitted that the
conditions which existed nine years would have
permitted reduction in the steel schedule at that
time he said that the cost of every item entering
into the manufacture Of steel rails had increased
10 such an extent that the present conditions must
be changed to permit of tariff reduction
In five years there will not be a Bessemer steel
converting works left in the United States, MT
Schwab predicted. ''Bessemer steel will be OF no
use The same is true of structural steel as we'll
as rails They will all be made by the open
hearth process Of manufacture. Costly changes
IN the construction of the plants viii be necessary
to make the improvements in the method OF man
ufacture."
Mr Schwab also declared that within ten years
the open hearth" process would be superseded by
the electric system of manufacture which was BE-
ing developed in Germany,
These changes in the process of manufacture in
crease the quality OF the STEEL he continued. but
they also slightly increase the cost of production
Mr.. Schwab said he was not in favor or any
change in the tariff steel and steel products A
moderate change would not make q material dlner-
ence'' he said but a radical change might do
considerable harm
Chairman Payne at the outset asked Mr.. Schwab
about letter which had been referred TO by a
previous witness. This letter written by Mr..
schwab to Henry c. Frck on May l6 1899. and
said that rails being made FOR less than sl2 4
ton or nearly 81 than the cost in England In
the letter Mr.. Schwab predicted that the Carnegie
Steel Company of which he was then president,
would be able to increase its net earnings to 500
OO0 a month and said II could sell all of its surplus
production abroad ut profit nearly equal to the
profit on domestic sales The steel said that
the letter in regard to which he being ques-
toned had been prepared at Mr. Frcks solicitation
and was written in an optimistic vein
Mr. Schwab gave a detailed statement OF the cost
of making pig iron and steel rails. which indicated
that the present cost of manufacturing pig iron
was S14 a ton. compared with IS a ton in 1899.
while the of steel rails to-day S2l 50 ton,
as compared with $12 nine years ago.
Mr. schwab said that he not aware Of any
understanding among the United States Steel Cor
pCratfon. the German steel syndicate and the Eng
Ish steel rail syndicate. He said that there was
not as much competition among the domestic
steel manufacturers in the home market tn the
foreign market.
Mr.. Schwab said that the price of steel rails was
fixed by most Of the American manufacturers at
S2S I'm 1898 1896 that in 1928. during the steel
war" this price not maintained, but thar fol-
lowing the war IL was again agreed 10 maintain
that price. Since then no manufacturer had at
tempted. he said TO lower this price for fear o,
pIeciptating another conflict.
Mr.. Schwab declared that the average manu-
facturer was entitled 10 profit OF from Is to %
per cent. and that the most successful manufact-
urers should have % per cent net pront lie said
that the railroads were not I'm favor OF reduction
in the price Of steel rails. tie also said that the
small consumers well the large ones were IA
favor Of maintaining a uniform price on structural
steel. lie testified that the United States Steel
Corporation manufactured from 40 ITO Is per cent
Of the steel produced la this country.