This is the first few paragraphs from "The L.C. Smith Specialty Grade" by James Stubbendieck in The Double Gun Journal, Volume 23, Issue 1, Page 45, 2012. Back issues can be ordered from DGJ.
1912 must have been a tough year for John, James, Thomas, William, Samuel, and Robert Hunter. They owned the Hunter Arms Company in Fulton, New York, and production of L.C. Smith shotguns was steady and remained marginally profitable. However, they were involved in other business ventures that were more speculative and less profitable. They had survived “The Panic of 1907” when the Knickerbocker Trust Company collapsed, the Dow Jones Industrial Average lost 48% of its value, and unemployment rose from less than 3% to 8%. In order to make sales, the Hunter Arms Company and other U.S. companies producing shotguns were forced to lower the price of every grade of double shotgun. The $105 2E in 1898 went for $95 in 1908.
At the same time, the Hunter Brothers were fighting with the New York State Board of Water Engineers over proposed changes to a barge canal between Syracuse and Oswego. These changes would eliminate the Battle Creek Dam and the water power source for their Battle Island Paper & Pulp Company, a conflict they would eventually lose.
The United States Revenue Act of 1913 became law and re-imposed the federal income tax and lowered the basic tariff rates from 40% to 25%, well below that of the Payne-Aldrich Tariff Act of 1909. The 1913 Act established the lowest rates since the Walker Tariff of 1857. Most schedules were put on an ad valorem basis. The duty on woolens went from 56% to 18.5%. The duty on breech loading shotguns was lowered to 15%. Steel rails, raw wool, iron ore, and agricultural implements had zero rates.
Suddenly, foreign shotguns began to flood the American market. What could American firearms manufacturers to do to maintain both market share and cash flow? Make cheaper guns, and spend less money making them.