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they can not shift, and they are braced so that they can not be thrown off, because we want these shipments to go through without break, and they do go through without break. Where you ship by water you have to break shipments and transfer, and that is dangerous, always.
Mr. CLARK. What proportion of the entire plate-glass output would have the tariff raised by your proposition, and what proportion would have it lowered! I am talking about money values now.
Mr. CLAUSE. That is pretty difficult to answer, and I will tell you why.
Nr. CLARK. I do not expect you to give it accurately, of course.
Mr. CLAUSE. No. I will tell you why it is difficult to answer. I said this morning that about 25 per cent of the product naturally developed into glass under 10 square feet. The better grades of glass are nearly all cut out of large sizes. It is one of the incidents of the business that you get a better finish—and the finish on the surface is the important thing with regard to a mirror-on the larger sizes than on the small pieces, invariably. The plaster that is in the joints has this effect. This glass all has to be embedded in plaster such as they were talking about this morning, to be held on the grinding table, and that plaster drags out some on the glass and sometimes interferes with the character of the polish. The smaller the size you have—in other words, the more joints through which the plaster can come outthe more your trouble is with regard to finish, and the best finish is almost invariably in the large glass. So the small sizes of fine quality are almost invariably cut out of large sizes, and you have to cut it out wherever the defects will permit you to cut it out. You cut out the defects in cutting the glass. In doing that you make a lot of other small sizes, invariably, and the tendency that way all the time is the reason why you are getting so much of that. All of your tendency is to get so much of it that the competition to sell it keeps the price down, and that is why we are not to-day availing ourselves of the present duty on those small sizes—some of them. Now, this is to explain why nobody could foretell just how this problem is going to work out as to how much of an advance we would get, or what percentage of our product it will cover, because that is a practical problem that will vary from day to day right in the warehouse of a factory, according to the character of the glass that is coming in.
Mr. CLARK. I want to preface this question with one statement of my own, and that is that I do not care how much money a man makes provided he makes it honestly and is entitled to it. That is the statement. Now the question is: You state that your profits in the glass industry are in the neighborhood of 4 per cent.
Mr. Clause. No; I did not state that the profits in the plate-glass industry were 4 per cent. I stated that the dividends paid during the years since 1895 had averaged, for the whole period, 4.) per cent, or just a fraction under. I did not state that that was made out of the manufacture of plate glass. I did state that the greater part of all our profit had come from auxiliary sources. Mr. CLARK. I know, but the auxiliary sources only brought it up
to 4.1 per cent.
Nr. CLAUSE. That is right, so far as the payment of dividends were concerned. Now, we had a slight profit beyond that.
Mr. CLARK. You earned 8 per cent?
Mr. CLAUSE. Yes.
Mr. Clark. The question I want to ask you is this: We have been cross-examining witnesses l?ere and hearing them testify for two weeks now on every kind of conceivable manufacturing industry in America, and it has been with the extremest difficulty in the world that we have found more than three industries that pay more than 5 or 6 per cent. If that is true, I want to know how the manufacturers in the United States, so many of them, amass large fortunes ? That is a fair question, too.
Mr. CLAUSE. I will tell you one thing, Mr. Clark. The people who come down here are the people that need relief, for the most part.
Mr. CLARK. To hear them tell it, they all need it.
Mr. CLARK. If I believed that, I would send out a search warrant for some of them. That is all.
Mr. CLAUSE. A moment ago I was speaking about the polishing operation on glass. That reminds me of one of the statements made by a gentleman here this morning. You would have inferred from the statement he made that glass was inspected before it was polished to know whether it was worth polishing or not. As a matter of fact, you can not see defects in glass at all before it is polished. The glass is taken in what is termed the “rough” originally, which is double the thickness of the finished product, and it has to be ground on both sides, and that obscures the glass so that you can not see through it. You know what ground glass is like. That is what the glass looks like then, and it is impossible to inspect it.
The CHAIRMAN. When it is polished, then, it takes just as much labor to make a defective sheet of glass of a given sort as a perfect one?
Mr. CLAUSE. Yes, exactly; we do not know whether it is defective or not until we get it polished.
Mr. Pou. I would like to know the comparative difference in the profits of your Belgian glass factory and your factories in America?
Mr. CLAUSE. We bought that Belgian works five years ago, and it has paid for itself.
Mr. Pou. Twenty per cent a year?
Mr. CLAUSE. All over Europe, in China and Japan, and in the Mediterranean ports. Some of it goes to South America and some of it to England.
Mr. Pou. Do you import any of it into the United States?
Mr. CLAUSE. It is rather a small proportion, and of course all of it is small plates.
Mr. Pou. Do you ship any of your manufactured products from your factories inside the United States abroad? Do you export any of it?
Mr. CLAUSE. No, sir.
Mr. Clause. No, sir; practically none. I think one or two small shipments may go to Cuba now and then, possibly because the steamer is going and they want it quick. I could not say that never a foot had been exported, but that is practically the case. We are debarred from any foreign trade.
Mr. Pou. Is your factory in Belgium a separate corporation ?
Mr. CLAUSE. I have forgotten how many thousand francs. I believe it is 1,500,000 francs.
Mr. Pou. What is the market value of your stock in that company?
Mr. CLAUSE. It is selling in the neighborhood of 110 now. It was considerably below par for a portion of this year, and was about at par until a matter of two or three weeks ago, when it made somewhat of an advance.
Mr. Pou. Are you asking for an increase of duty ?
Mr. CLAUSE. On some sizes, yes, sir; but a large decrease on a great many oher sizes.
Mr. Pou. You do not think you could stand any cut under the duties that now protect you?
Mr. CLAUSE. We are losing money on all the small glass we are selling now; that is, on practically all of it. Mr. Pou. That is all I care to ask.
Mr. Griggs. You are asking an increase of duty on the smaller sizes?
Mr. CLAUSE. Yes.
Mr. Griggs. And they are the sizes most commonly used by the common people of the country?
Mr. CLAUSE. There are more used of the smaller sheets than of the larger.
Nir. Griggs. You make a great deal of glass for these small stores in small towns ?
Mr. Clause. We are accepting a large reduction in the duty on them.
Mr. Griggs. Ten feet square?
Mr. CLAUSE. All the glass 10 feet and over, under this proposition, is largely reduced, and practically all the glass used in store fronts is over 10 feet in area.
Mr. Griggs. Not in the small towns.
Mr. Clause. Ten feet is only 24 by 60 inches; 2 feet wide and 5 feet long.
Mr. Griggs. Oh, you mean just 10 square feet?
Mr. Griggs. I beg your pardon. Now, you have spoken several times this morning of the difficulty of making this glass. Do you experience any more difficulty here than you do in Belgium?
Mr. CLAUSE. In making glass?
Mr. GRIGgs. What is the reason for that?
Mr. CLAUSE. Because the labor there is skilled in that line of manufacture. They have been at it for generations. Here at the present time in the Pittsburg district, 60 to 70 per cent of the men we employ are foreigners of a certain class.
Mr. Griggs. You employ day labor ?
Mr. CLAUSE. Yes; and we pay over three times the rate of wages we pay abroad.
Mr. Griggs. You pay better here?
Mr. CLAUSE. Yes; we get better labor over there. I would like to complete the statement that I was making. I was saying that 60 to 70 per cent of the labor in our Pittsburg district are Italians and Slavs, and a large proportion of them can not speak English.
Mr. Griggs. Why do you not bring over some Belgians?
Mr. Griggs. You bring over Italians and Slavs, and you spoke of so many that could not speak English. I thought, perhaps, you might in some way get some Belgians.
Mr. Clause. Ten or twelve years ago nearly all the labor employed in our works could speak English; they were Belgians, French, and German, but yet they could speak English. They had been here quite a time, and they were men who had grown up in the industry on the other side. But latterly we have been compelled to take Italians and Slavs principally. They have kept coming into the works until 60 or 70 per cent of the men now employed are of those nationalities, and very few of them can speak English.
Mr. Griggs. You would say, then, that the plate-glass industry in America is languishing?.
Mr. Clause. It is languishing. I can not say that it is in a condition of collapse, but it has gotten along with very meager returns.
Mr. Griggs. The condition is one to create apprehension?
Mr. CLAUSE. If there should be any reduction of the duty, it would be one to create apprehension.
The CHAIRMAN. What portion of your output does not exceed 5 square feet in area, of plate glass?
Mr. CLAUSE. Of the actual output as it naturally comes from the works there would not be over
The CHAIRMAN. I mean as you sell it.
Mr. CLAUSE. It runs all the way from 55 per cent-you mean under 5 feet?
The CHAIRMAN. Yes; under 5 feet.
Mr. Pou. How does the selling price of your glass turned out by your Belgian factory compare with the selling price of the product of your American factories?
Mr. Clause. We get a much more profitable price for the Belgian product than we do for this.
Mr. Pou. Can you indicate any per cent of difference upon the output as a whole?
Mr. Clause. It would be quite a considerable difference; probably 20 to 25 per cent, I should say, at the present very low American selling price. Prices there are very profitable. They are good prices. We are getting a high price in Belgium. And here there is another thing we have to bear in mind—this should have been brought out this morning. I refer to the question of competition with the Belgian works that Mr. Cockran was trying to get at, and that is that our competition with foreign glass is largely in the small sizes, which they, like ourselves, frequently sell at less than their cost. This question of selling the small glass at a loss is as old as the industry. It is easy enough to break big glass up and make small sizes of it, but if you have small glass on hand you can not make it any bigger, and it must be sold in that condition, and they frequently sell small glass irrespective of the cost price, and that is the glass we are competing with largely here.
Mr. Pou. Is the difference in favor of the cost of production in your Belgian factory the difference you have to pay in the price of labor?
Mr. CLAUSE. That is the important thing. Here is another thing which is very important. The works there cost only half of what they cost here to put up, originally; so that we have to get considerable more returns in order to make the same kind of a profit, and the cost of replacement enters very largely into it. A plate-glass factory is peculiar in this, that it does not lend itself readily to the installation of different apparatus. The tendency in the manufacture, in this as well as in any other line of manufacture, naturally drifts in a certain channel which seems to favor a reduction in the cost. Those changes which have come about have been of a character that could not be introduced without a much larger expenditure than is incident to many lines of business. To be more definite, you take a factory where they employ small machines that stand on the floor, perhaps without foundation, or even where they have foundations; something is gotten up that is new and perhaps better, and it is a simple matter to take out the old machine and put in the new one. It involves no change in the general structure of the plant, and it is very easily brought about, and at a minimum loss for that which is displaced. The tendency in the manufacture of plate glass for the last fifteen years particularly has been of such a character that it could not be carried out at all without the actual demolishing of what you had. The type and the structure of the buildings has changed, and the dimensions of the buildings have changed and the character of foundations has changed-they are going very much deeper-and it is just about the same as rebuilding a plant; so that the question of replacement in plate-glass manufacture is a very large item. That, of course, again is double here what it is abroad, and all those things go to make up a very different situation.
Mr. Pou. From the standpoint of profits, it would have paid your company to have invested all its money in Belgium?
Mr. ČLAUSE. Yes; very decidedly.