Manganese & Diamonds

The work-roughened hand of the steelmaker joined figuratively last week with the delicate hand of the jeweler in a dance of delight. The Senate Finance Committee recommended tariff changes on items of vital concern to each.

Manganese. Hard and tough as the jaws of a rock breaker is steel containing manganese. Great U. S. steel companies search the world over for manganese ore, use some 675,000 tons of it per year. Free-listed in the tariff acts of 1909 and 1913, manganese ore was taxed 1 cent per lb. by the 1922 law to protect domestic production in 30 states.

U. S. steelmongers prefer foreign manganese ore. The domestic ore has a low metal content. Of the U. S. consumption, 95% is imported despite higher foreign prices. Last year the U. S. collected $8,065,155 in manganese ore tariffs.

What used to be the steel trust appeared last winter before the House Ways & Means Committee, declared that the 1922 tariff act had caused the steel industry to pay $45,000,000 in manganese duties without domestic production being benefited or improved. The House was asked to free-list this ore. The House refused.

Chairman of the metals subcommittee of the Senate Finance Committee is Senator David Aiken Reed of Pennsylvania, onetime attorney for U. S. Steel Corp. Well he knew what the steelman wanted. Also on the job was Pennsylvania's Joseph R Grundy, arch-lobbyist for manufacturers The sequence of recent events: 1) The Finance Committee by a vote of 7-to-4 first rearranged the manganese ore tariff on metal content, in effect increasing the duty above the 1 cent per Ib. level. 2) From Moscow came the announcement that U. S. Steel Corp. had signed a five-year contract with the Soviet for from 80,000 to 150,000 tons of Georgian manganese ore per annum. 3) Reconsidering, the Finance Committee reversed itself, voted 5-to-6 to free-list manganese ore, with a saving of between $5,000,000 and $6,000,000 in duties for U. S. Steel Corp., on its Russian contract alone.

Painful to hear were the protests U. S. manganese producers who charged that the Senate Republicans were favoring great Eastern corporations potent in politics. Connecticut's Senator Hiram Bingham was one of the two Republicans whose vote change caused the manganese rate change. His explanation: "The White House wanted it." Even high-tariff Chairman Reed Smoot, incensed at his committee's inconsistency, ironically observed that the market value of U. S. Steel stock had increased "only a hundred million dollars" after the last fortnight's slump precipitated by an increase of the Federal Reserve's rediscount rate.

Diamonds. Tormented are many U. S. customsmen and all legitimate jewelers by the smuggling of small, easily hidden precious stones. Honest diamond dealers, undersold by the smuggled article, have banded together into the American Jewelers Protective Association of which Meyer Rothschild of Manhattan is president. This organization, touchy and suspicious, cooperates with U. S. agents to prevent diamond smuggling, receives tips on smugglers, collects U. S. rewards for incentive to smuggle.

Last week Mr. Rothschild was in Europe investigating smugglers when the Finance Committee decided there was no U S. diamond industry to protect and taking Mr. Rothschild's advice in part, free-listed uncut diamonds, reduced the duty on cut stones from 20% to 10%.