Mr. SHERMAN. I am glad of that because a good deal of complaint has been made on this point. I was about to say that Mr. Randalfs statement, or book, was written in 1863, and was based upon calculations made prior to January, 1862, and prior to any increase on the price growing out of the war. The computation made by him was literally true, that at 42 and 8 10ths cents per pound for wool, the average rate, the business of sheep growing would be a remunerative one. The aper as printed here, would indicate that Mr. Randall said in September, 1866, that was a remunerative price; but I am glad to hear that it was a typographical error; it ought to be corrected. If the wool grower now had 42 and 8 10ths cents per pound in gold for his wool—and that was what Mr. Randall was talking about—it would be all he wants, all he could ask. But now this same report goes on and says: “The present prices of NewEngland, NewYork, and Ohio unwashed wools(NewYork Price Current, November 3, 1866)range from 30 to 46 cents per pound, and at these rates it is claimed that the business of wool growing, particularly in the States of NewYork, Pennsylvania, and Ohio, is very far from remunerative.” This report, with the correction of date, shows that while the price of wool for a period of years before 1862 was 42 and 8 10ths cents in gold, now in currency the average price of that same wool is less than it was in gold a few years ago. Is it possible that the wool growers can continue their indus. try upon this basis? Does it not appear from the very facts here stated that all the increased price of that wool and the labor that goes into its consumption, and the elements which form its cost, half of them have been increased by a paper currency and your system of internal taxation, while the product of their industry has not gone up any? Can you suppose the men thus engaged in an industry which yields one jmillion pounds of wool, or at the old rates $42,000,000, can carry on that industrial }.without some protection? The manu acturer on the NewEngland or Atlantic coast anywhere starting his mills can send to South America, and buy his wool cheaper than he can h Ohio. The cost of freight from Ohio is fully as great as the cost from South America — the precise rates I cannot tell, water transportation is so much cheaper. Is it possible or the wool grower thus to compete? Unless you give him a protection equivalent to the advance of your paper money, the advance of E.since we have substituted paper money or gold, can you expect him to be satisfied? The wool growers of this country, as a general rule, are among the small farmers of the country.. The great body of sheep are owned in small flocks of from 100 to 200. Very few, comparatively, have large flocks. They are the common farmers of the country, and when they see that their product, upon which they rely to help to pay your internal taxes, has not advanced in price one cent beyond what it was at the beginning of the war, and that they are now with insufficient protection called upon to compete with South America and all the cheap wool producing countries, can you expect them to be satisfied? In Canada the duty on Canadian wool is 3 cents a pound. The average duty, as shown by the tables here paid on South American wool, is a little over 4 and a half cents a pound. Gertain wools are brought in at 3 cents; certain wools at 6 cents; certain wools at 12 cents. The average as shown by the tables is 4 and a half cents. The gold value of the wool, according to this statement, before the war was 42 and 8 10ths cents; so that the actual protection which the farmer now gets to compen sate for all the derangement of the currency, for all his share of internal taxes, is only one 10th of what the cost of every pound of his wool was in 1862. Under these circumstances you must expect him to be dissatisfied. When these 2 rival interests met together in a convention called by the manufacturers themselves, and the whole matter was there discussed, it was agreed between them after full and ample discussion that the rates of duty reported by the Senate bill should be given them, and they were satisfied with them, and have never called them in question. The manufacturers then made the claim that if the duty was put on wool they ought to have a corresponding duty on the cloth. That was freely yielded. The principle is proper; that is, if a duty is levied upon the raw article, an equiva lent amount should be added to the duty on the product in order to enable the American producer who convert that wool into cloth to compete with the foreign producer. That was freely yielded. I trust, . that on this subject of wool which has given rise to a great deal of debate on the present tariff, and which probably is under a more depressed condition at this moment than any other industrial interest of the U.S., the arrangements between the wool growers and the wool manufacturers will be carried out. I would prefer myself to take it in the very words they have given us, so that if they are not satisfied here after they cannot complain of the proper committees of Congress for any mistake. I would take them at their word. I think their demand is a reasonable one, and I would be willing to give it to them as they ask it, so that if there is anything wrong in the practical working of their scheme they themselves may have the responsibility of it. It is said, I know, that there was a very important class of our people not consulted when this arrangement was made. That is true: the consumers were not consulted, and the consumers have to pay the increased cost; but all other branches of industry in which these same consumers are interested are sufficiently protected by the duties imposed by this bill. The duties on wool and the duties on all agricultural prod ucts provided for in this bill are less%. advalorem than the duties on manufactures. This is properly so, because they are so bulky that they protect themselves in great measure, and because on account of the cheapness of our land we have the advantage over foreigners and have less need for protection. Here, in order to save me from addressing the Senate again, I may say that there is another agricultural interest in which the people of Indiana and Ohio are very largely interested, and that is flaxseed. By the present tariff, with which they are very much dissatisfied, the duty on flaxseed is a little less than 11 cents a bushel. There is a nominal duty of 16 cents, but a reduction is made from that duty of the drawback on the cake made from imported seed, which reduces the duty in favor of the farmer to about ten and a half cents. The effect of that drawback is that American cake or cake made from American seed in the city of NewYork, of the same quality and the same kind, lying side by side with the cake made from the imported seed, is not worth so much by 5 cents a bushel as the foreign cake. That discrimination is made against our own industry. The duty then is really less than 11 cents a bushel, and at present prices it is only about 5%. advalorem, while on the other hand on flax seed oil, which is nothing but the expressed juice of the flaxseed imported from India, there is a duty of 23 cents a gallon, or what is equivalent to a duty of about 51 cents on a bushel of seed, so that the discrimination made against the agriculturist is about 40 cents a bushel. There is great complaint of this. That the crusher ought to have some protection there is no doubt, though I think myself the crushing of the India seed is one of those forced unnatural trades that can only be sustained by a very high rate of taxa.tion, but as it is in existence I am willing to give it a fair protection. That is one point of ifference between the House and Senate bill, and as I do not intend to enter into the discus.sion of the question hereafter I will simply say that the House had the subject before them a long time, and after much controversy settled it I think on a proper basis by giving 30 cents duty on the seed and 30 cents a gallon on the oil which is equivalent to a protection of 37 and a half cents per bushel to the crusher of imported seed. If the oil is imported in the seed it will pay a duty of 30 cents a bushel, which will produce 2 and a quarter gallons of oil or 14 cents a gal: lon. If imported as oil it will pay a duty of 30 cents a gallon, giving to the crusher a protection of 16 cents a gallon for the simplest form of mechanical labor. Surely this is enough. Mr. President, there is only one part of this bill to which I wish now to call the attention of the Senate, and that but for a few moments. The SecyTreasury in his annual report states that the extent of the underval. uations and fraudulent importation of foreign goods amounts to about 20% of the whole. That this is true is known to every one in the trade. In certain articles, which are solely manufactured for the American market, the invoice prices are merely nominal, and as most of the duties are advalorem they pay merely nominal amounts. The loss from this source and from smuggling according to the report of the Treasury, is $35,000,000 a year. It is manifest that this ought to be corrected, and that all classes, especially the Americanim porter, who is usually honest, ought to seek to remedy it. It is said that on account of this sys. tem of undervaluation many branches of our foreign trade have got into the hands of unprincipled men. Merchants who have their chief office abroad invoice their goods and consign them to an agent here, so that we have no re: sponsible person to punish for a violation of our laws. The present remedy is to seize the foand go through a long litigation about it. n account of the prevalence of advalorem duties and the difficulty of ascertaining the real value of the goods at the place of exportation frauds that are manifest on the face cannot be detected because there is really no value to the goods in the market at the place from whence they are exported. This has been a subject of much inquiry in England and France, and it appears that in England they have adopted a system by which they dispense with customhouse oaths, but by inspection ascertain the true valuation of the goods. If in the opinion of the proper appraisers the goods are undervalued the government simply says to the importers, “I will take these goods at your price, and allow you a reasonable profit on them, ” and they are sold for public use. The result has been in England, I am told, to break up all systems of undervaluation. The same principle has been introduced into the treaty between‘ and Italy, a copy of which I have before me, so that if goods are imported from Italy to France, or vice versa, and when received at the customhouse, if, by inspection it is ascertained that they are undervalued to the extent of 5%., they seize them for the Government, and they are sold for public use. The im’ porter receives his own valuation for the goods together with a profit of 5%. If he complains he is sufficiently answered by saying, “We took your goods at your own price, at your own valuation; if there is an error You made it yourself.” The result has been that undervaluation is too dangerous to be practiced. I do not learn of anybody who ever got the advantage of these Governments except in one case. One of our adventure us Yankee countrymen imported a cargo of clocks into England. They are made here for less than any where else. When they reached the customhouse the proper officers, not being accustomed to Yankee clocks, thought they were under valued and seized the whole cargo and sold them, paying the importer his own price and allowing him ten%, profit. This was so rapid and favorable a sale of an American product that another cargo was sent at the same valuation. The officers seized them, too, but the market was already supplied with Yankee clocks, and as they were not really undervalued the 2nd cargo was released and no one was harmed: This device has been applied in many cases both in England and France with great advan tage. The ComFinance have therefore introduced into the bill a provision some what similar to the English regulation, except that the English law, where the goods sell for more than ten%. in addition to the val uation, allows the customhouse officers 1/2 of the excess. The ComFinance: thought it best not to insert that feature, for the present at least, until the system was tried. he section contained in this bill authorizes the customhouse officers, in the case of undervaluation to the extent of ten%., to seize the goods as the property of the U.S and sell them. If the importer complains about it he is paid at his own value, and ten%. allowed him for profits and for expenses of importation and sale. With these general observations I leave this bill. Although some portions of it do not meet my views, and I jo.vote for modifications; yet I believe the bill as a whole will be beneficial. The bill of the House, in my ‘judgment, was defective in several important particulars. In the 1st place, it reduced the duties on some articles more than we can bear by throwing off half the duty on tea and coffee. Another objection to the House bill was that in many cases the rates of duty were made so high as absolutely to prohibit importation, and consequently to utterly destroy the revenue from certain branches of industry. The present bill, founded upon Mr. Wells's bill, but very materially modified by the ComFinance, will give every industry of the country a fair and reasonable protection. It will not reduce the aggregate revenue from manufactured goods, but it will secure a reasonable competition between the foreign and the do mestic producer. From the statements made to us I believe that under it every industrial: o interest of our country can be prosecuted with reasonable success under favorable circumstances, and yet at the same time there will be such a competition between the foreign and domestic producer as to yield us a fair revenue on imported goods. Nor am I alarmed by the statement made by my friendfrom NewJersey yesterday, that the amount of goods imported into this country was the enormous sum of $305,000,000. We have got to import goods in order to get revenue, and when I reflect that $305,000,000 is only 5%. of the magnificent production he shows we have annually made in this country I do not think we need be frightened at the amount of imported goods. We cannot entirely break up the importation of goods without surrendering our revenue. We dare not do that. The necessity, rests upon us of raising $140,000,000 of gold revenue. We must not, therefore, materially affect the trade between foreign countries and our own. All that our own people can ask is, that such reasonable protection shall be given to them that the effect of our currency laws and our system of internal taxation shall not operate injuriously to their interests, but that they may have countervailing protection against the operation of our own laws. [END of SHERMAN SPEECH insert.]