WASHINGTON (Reuters) - It was the anecdote that politically seemed too good to be true. And it was. Treasury Secretary John Snow was set to say on Friday that "frivolous lawsuits" had caused the U.S. ladder industry to fold.

"There is not a single company left in the United States that makes ladders. The lawsuits got to be too much for the ladder industry," read comments Snow prepared for a conference sponsored by the Small Business Administration.

But when the department discovered there were some 11 producers selling $850 million worth of ladders in the United States, those words were left unspoken and deleted from a speech text posted later on the department's Web site.

A Treasury official said the statement was in error.

"The buck stops with me," said Treasury spokesman Rob Nichols on Monday. "That is my error. That is a factual inaccuracy that I missed during the fact-checking process."

The Bush administration has been urging Congress to pass measure to curb lawsuits against businesses. Tort reform is part of President Bush's pre-election economic plan.

Federal agencies often provide advance copies of carefully vetted speeches to reporters, to help get their message across in stories.

"I'm really disappointed," said Ron Pietrzak, executive director of the Chicago-based American Ladder Institute, which includes 11 domestic ladder makers and has a Web site at: www.americanladderinstitute.org

The group said the U.S. ladder industry generates sales of more than $850 million annually.

Pietrzak said liability issues are a concern for manufacturers. "People do stupid things," he said.

But Pietrzak said his group is also worried about competition from Chinese ladder makers.