Mr. UNDERWOOD. What is the cost of glass laid down in New York Harbor, imported glass, with the duty added, the same glass that you make in America?

Mr. CLAUSE. That is a general question that can not be answered that way. I think I can give you information which is more in the line with what you want by stating that it costs about 14 cents a foot to produce glass in Belgium. Now, the rates of duty, of course, vary according to the size, and it costs just as much to make 1 foot of glass there as another.

Mr. UNDERWOOD. Do you mean that that includes polishing?
Mr. CLAUSE. Yes, sir.

Mr. UNDERWOOD. Does that include all the charges for depreciation, the office charges, capital, and so forth?

Mr. CLAUSE. Yes, sir. That does not include any interest on the capital. Neither did the figure that I gave you include that.

Mr. UNDERWOOD. What is the cost of labor in your factory per foot of glass?

Mr. CLAUSE. I could not state, but I can state that in a general way we pay something over three times the rate of wages paid in Belgium. Mr. UNDERWOOD. You state that from your information or from hearsay?

Mr. CLAUSE. From my own information.

Mr. UNDERWOOD. Have you examined the wage scales of Belgium? Mr. CLAUSE. Yes, sir.

Mr. UNDERWOOD. And you know what they are here?

Mr. CLAUSE. Yes, sir. We have a works in Belgium; therefore we know.

Mr. UNDERWOOD. On that information you state that the difference in the wage scales is about one to three?

Mr. CLAUSE. Something over three to one.

Mr. UNDERWOOD. In a foot of glass in your mill, which costs 32 cents, how much of that is wages; how much is charged against that foot of glass for interest, or for betterments, machinery, improvements, and office charges? In other words, how much of it is wage and other charges?

Mr. CLAUSE. This is going very much more into detail than I could give you from such records as I have with me; in fact, some of the records are not kept; that is, our total cost does not show what part of that cost is represented by labor, although in a general way labor represents close to 50 per cent of cost. But we make no statement which shows exactly the kind of analysis that you are mentioning.

Mr. UNDERWOOD. So far as you can have the information before you, you would state that 50 per cent of the cost represented labor? Mr. CLAUSE. That is the current analysis that is made.

Mr. UNDERWOOD. How much of the cost of your Belgium factory, the 14 cents in the Belgium factory, represents labor?

Mr. CLAUSE. That I can not tell; that is, I have never looked at the Belgian problem from that standpoint; I have never analyzed the Belgian cost sheet from that standpoint. But the total cost is as I state to you and the rate of wages as I have stated.

Mr. UNDERWOOD. You can not make a statement in regard to the productivity of the American workmen as compared with the Belgian workmen?

Mr. CLAUSE. No. They have better labor there than we have here for the reason that the industry has been located there almost from the beginning. I think that it originated in France, and from there was transplanted to Belgium. The labor has been employed there for many years, and we have been most seriously embarrassed in this country within the last ten years by the fact that we have had to take on Italian and Slav labor largely, men who can not speak English, and who were unfamiliar with the business. For this reason it is very hard to keep down the losses from breakage in the works, because those men are not as familiar with this kind of manufacture as the men who are employed in the Belgian works.

Mr. UNDERWOOD. How many feet of glass run to a ton?

Mr. CLAUSE. Plate glass weighs about 3 pounds per square foot, and when boxed it runs from a fraction over 4 pounds to 5 pounds per square foot, the case adding that additional weight.

Mr. UNDERWOOD. Do you use the long or the short ton in your calculations?

Mr. CLAUSE. The short ton. But we do not figure per ton at all. Mr. UNDERWOOD. I was getting at the freight rate.

Mr. CLAUSE. It is always per hundred, not per ton.

Mr. UNDERWOOD. A hundred pounds would have about 20 square feet?

Mr. CLAUSE. Yes, sir.

Mr. UNDERWOOD. What is the freight rate on a hundred pounds from Antwerp to New York?

Mr. CLAUSE. I do not know. One of the gentlemen who is going to follow me will give you some freight rates; but my recollection is that the rates on freight, during the times that the railroads were making decided discriminations, from Antwerp to Chicago were 35 cents, whereas the rate of freight from Pittsburg to Chicago was 39 cents.

Mr. UNDERWOOD. Is that continued now?

Mr. CLAUSE. No; that has been very recently withdrawn. They are now quoting higher rates, but there is nothing to prevent them from getting back to the other rate at any time that their movement of empty equipment to inland points again makes that advisable. There is a great deal more freight moving to the seaboard than is coming back, and the railroads have a very large empty equipment going back from the seaboard most of the time, though at the present time it is not so large; and the defense they made was that this equipment was going back empty, that it did not produce any revenue, and whatever they could get out of this foreign business in hauling back the empty equipment was just so much gain. They overlooked the fact that if the plate-glass works had been placed at New Orleans, or up on the eastern seaboard at Newport News, or at New York, that the full rates would have been charged on that domestic glass.

Mr. UNDERWOOD. I am aware of that fact myself, in some other things.

Mr. CLAUSE. But it is a fact that had the works been located at Antwerp-I will say they are located a short distance from there, but I could not make a comparison beyond that. We did make full comparison of the rates from Antwerp to all points of consumption in the United States, and the rates from Pittsburg to similar points

and the average of the foreign rates was lower than the average of the domestic rates of freight.

Mr. LONGWORTH. When was that?

Mr. CLAUSE. That has been true up to within a very few months ago.

Mr. LONGWORTH. When was it that you first called the attention of the Interstate Commerce Commission to it?

Mr. CLAUSE. We have done that repeatedly. The final decision rendered by the Interstate Commerce Commission was rendered, I think, last year.

Mr. DALZELL. It has been before the Supreme Court of the United States and decided.

Mr. UNDERWOOD. The Supreme Court decision has been rendered affirming the rate or rejecting the foreign duty?

Mr. DALZELL. Denying the jurisdiction of the Interstate Commerce Commission to remove it.

Mr. UNDERWOOD. I asked you to give the rate from Antwerp to New York. I wanted to ascertain the cost of laying down that class of glass in New York Harbor, if I could. If you haven't got it, of course I will call upon somebody else for the information.

Mr. CLAUSE. I do not know it, neither do I know whether they charge the same ocean rates when they haul it to New York that they do when they haul it inland. The division of the two rates is frequently different.

Mr. UNDERWOOD. Let me ask about your business. How much capital have you got invested in the Pittsburg Plate Glass Company? Mr. CLAUSE. Our capital is $17,500,000.

Mr. UNDERWOOD. Does that represent money actually invested, originally invested, or does it represent money and water, or profits reinvested and stock issued upon that?

Mr. CLAUSE. The original capital was $10,000,000 without water. There was no water then, and there has never been any water in the stock of the Pittsburg Plate Glass Company. At the time the consolidation took place, or prior to that time, there were several efforts made to consolidate, but always with the idea of injecting water. There were certain gentlemen connected with the enterprise, Mr. John Pitcairn being the most prominent among them, who positively declined to have anything to do with the enterprise if it contemplated the injection of water; and it was consolidated without water. Since that time we have made two increases of capital in cash actually paid in, the first being two millions and a half and the second five mil lions of dollars. Practically all of it is represented by other interests of the company outside of the manufacture of plate glass.

Mr. UNDERWOOD. It was not made out of improvements made by profits and issuing stock?

Mr. CLAUSE. No; the seven and one-half million dollars was paid in; every dollar.

Mr. UNDERWOOD. When was the organization of the Pittsburg Glass Company?

Mr. CLAUSE. The original organization was made in 1895.

Mr. UNDERWOOD. Since that time have you any bonds outstanding? Mr. CLAUSE. No, sir.

Mr. UNDERWOOD. No preferred stock?

Mr. CLAUSE. A little preferred stock that dates away back in the original organization of the company; $150,000 of preferred stock. Mr. UNDERWOOD. Which bears what rate of interest?

Mr. CLAUSE. That bears 12 per cent. You see, it only takes $18,000 a year to pay that.

Mr. UNDERWOOD. What rate of interest have you paid on the $17,000.000 of stock?

Mr. CLAUSE. Taking the history of the company from its organization in 1895, the total dividends paid during the entire time are equivalent to just a fraction under 43 per cent. We have accumulated a surplus in the meantime which is equivalent to about 3 per cent more, so that the total for that period has been 8 per cent; but the greater part of that money has not been made-very little-in the actual manufacture of plate glass.

The company has a very large and profitable business. It has fortunately been very successful, but it has been a question more or less of good management. We have other advantages; we have fine coal and gas properties. We have the branch-house system, which has been a revenue contributor, and our Belgian works have been much more profitable than those operated in the United States. We secure revenue from auxiliary sources.

Mr. UNDERWOOD. Have these auxiliary sources sometimes met with losses?

Mr. CLAUSE. Yes, sir; some things that one undertakes do not prove successful, and at other times they do. There are always losses in any business.

Mr. UNDERWOOD. Eliminating the auxiliaries from your glass business, you say they have been successful since 1895.

Mr. CLAUSE. If we had to be content with all we have made out of the manufacture of glassware since 1895 I would not be in business to-day.

Mr. UNDERWOOD. Do you not think that that has made a difference?

Mr. CLAUSE. Very little.

Mr. UNDERWOOD. Is yours a representative plant? Do your comFetitors contend that it is better or worse than others?

Mr. CLAUSE. Some say it is worse. I do not know how many have done better. Quite a number may have done worse.

Mr. COCKRAN. I understood you to say that the labor cost of this product was about half of the total cost."

Mr. CLAUSE. Yes, sir; in this country.

Mr. COCKRAN. You have fixed the cost of production at 32 cents? Mr. CLAUSE. Yes, sir; but I want to say in that connection that I understand that some gentlemen, and perhaps all, feel that a larger charge for interest on investment and a reasonable charge for surplus could properly be made. Those figures have not been included. With those figures included it would be higher.

Mr. COCKRAN. Don't you think that discrepancy or difference should be made up by improving your own skill rather than by taxation?

Mr. CLAUSE. Those figures are not included.

Mr. COCKRAN. I understand you to say that 50 per cent of 32 cents per foot would be the labor cost.

Mr. CLAUSE. I suppose that is the way to figure it. I have not, however, the actual figures. It has always been considered in the plate-glass works as approximately 50 per cent.

Mr. COCKRAN. You say that the cost of labor in this country compares to the cost of labor abroad in the proportion of 1 to 3.

Mr. CLAUSE. What I mean to say is that the rates of wages that we pay are more than three times the rates that they pay.

Mr. COCKRAN. That would be about a proportion of 1 to 3.

Mr. CLAUSE. No; that does not follow.

Mr. COCKRAN. Let me see if I understand you correctly. You stated that the wages paid

The CHAIRMAN. The rate of wages.

Mr. COCKRAN. Would be at the rate of 1 to 3.

Mr. CLAUSE. I think I must have misunderstood your question. Mr. COCKRAN. Am I correct in assuming that you stated the cost of wages here and abroad was in the proportion of 1 to 3?

Mr. CLAUSE. I take it that you intend your question to be as to whether 16 cents a foot is the cost and whether it would not be onethird of that?

Mr. COCKRAN. Yes.

Mr. CLAUSE. I should say that that would not be far from the truth.

Mr. COCKRAN. There is a difference of 8 cents between the rate of wages there and the rate here.

Mr. CLAUSE. No, sir; I think your arithmetic is a little at fault. One-third of 16 would be 53.

Mr. COCKRAN. Yes; and a third from 16 would leave 10.

Mr. CLAUSE. Yes, sir.

Mr. COCKRAN. The difference in the labor cost, then, is the difference between 5 cents and 16-that is to say, 103; yet you want a duty of 22 cents.

Mr. CLAUSE. Yes, sir.

Mr. COCKRAN. You want the duty to be over 200 per cent of the difference in the rate of wages?

Mr. CLAUSE. In the labor cost.

Mr. COCKRAN. That is your idea. That would be the actual protection.

Mr. CLAUSE. We would not want to base it entirely on the question of labor. We must be put on a basis to protect us against the foreigner. The foreigners are now bringing it in at twenty-two and one-half and paying the duty.

Mr. COCKRAN. You would not want to penalize superior skill. I understand that the object of a duty is to equalize the rate of wages. Mr. CLAUSE. There are other products and other factors. Mr. COCKRAN. Oh, I did not know that. What are they?

Mr. CLAUSE. Well, it is a difference in cost. Wages is not the sole measure of cost.

Mr. COCKRAN. The difference in cost which the tariff is intended to equalize has always been explained to us as being the difference in the rate of wages.

Mr. CLAUSE. Not altogether.

Mr. COCKRAN. It is not?

Mr. CLAUSE. No, sir.