stop that foreign glass coming in, because this is the natural place for them to put their surplus stuff. Mr. CLARK. Why is it any more natural for them to put their surplus stuff into the United States than it is to put it into England or some other country? Mr. KANN. I am glad of the opportunity of answering that question. There is no other country in the world that takes that kind of stuff except the United States. Mr. CLARK. Do they not use plate glass in England? Mr. KANN. They do; but this great increase you hear about, which is shown by the government statistics, is in the one-to-three bracket, covered as it is by the 10 cent duty and the 8 cent and the 224 cent. What they put into England is of a different class-it is larger pieces. They use it there more for glazing. It is not so high grade. Mr. CLARK. To get right down to the facts of the case: Do they not make as many mirrors and things of that kind out of plate glass in England as in the United States? Mr. KANN. Not by any means. Mr. CLARK. England is the greatest manufacturing country on earth. Do they not buy as much plate glass and make as many of those things out of plate glass as they do in this country? They buy the raw material and manufacture it, and compete with the very fellow that sold them the raw material. Mr. KANN. They use a great deal of plate glass there for mirrors, but nothing at all by comparison. Mr. CLARK. Antwerp could dump its extra stock in Australia as cheap as in this country? Mr. KANN. Yes; and get as cheap ocean rates. But what are they going to do with the glass there? Mr. GRIGGS. Are there no women in Australia? Mr. KANN. They are a little scarce; there are not as many as there are in the United States. Mr. COCKRAN. Do you agree with your predecessor on the stand as to the labor cost of this product? Mr. KANN. Practically so; yes, sir. Mr. COCKRAN. And you agree also with him, I understand, in view of your answer to Mr. Boutell, that this raise is not in the interest of the laborer, but in the interest of the stockholder-it is not sought in the interest of the laborer, but in the interest of the stockholder? Mr. KANN. I do not want to be committed to an answer that I could not give to that question without an explanation. Mr. COCKRAN. I would not mind the explanation if I could get at the meat of the matter. Mr. KANN. I will give it to you. The laborer will, in the first place, be given employment. That is to his benefit. Mr. COCKRAN. Yes. Mr. KANN. He has been given the advance largely ahead of the manufacturer. Mr. COCKRAN. This is recouping the manufacturer for benefits already given? Mr. KANN. No, sir; that is an irretrievable loss. If he has not charged it off, it is time he did do it. Mr. COCKRAN. But this would be giving him a profit. Mr. KANN. He has been making no profit. Mr. COCKRAN. I thought you said he made 1 per cent. Mr. KANN. I said there were three concerns that paid only 1 per cent dividends after being in business seven years. Mr. COCKRAN. Surely you would not have us believe that those companies have been running at a loss? Mr. KANN. I want you to understand that absolutely as my proposition, and I would not be here answering you and other people that way if I was not convinced of the fact. Mr. COCKRAN. You say that these eleven companies have been running at a loss for seven years? Mr. KANN. No, sir; not eleven companies. Mr. COCKRAN. How many? Mr. KANN. I said of the eleven companies seven of them had never paid a dividend. Mr. COCKRAN. I know; but the nonpayment of a dividend is not by any means conclusive proof that they have not been earning money. Mr. KANN. I do not see how managers or boards of directors or officers of a company could hold their jobs and get salaries from the stockholders if they were earning money and did not declare a dividend; but outside of that fact, they did not earn dividends. Mr. COCKRAN. Do you mean to say that they have been running at a loss? Mr. KANN. Yes. Mr. COCKRAN. From what was that made good? Mr. KANN. It has not been made good. Mr. COCKRAN. Either the companies must be bankrupt or the losses must have been made good. Mr. KANN. Fortunately or unfortunately for the people of the United States, the people who have become stockholders in the plateglass companies have been easy marks and have kept putting up money. Mr. COCKRAN. Now we understand; the losses have been made good from capital. Mr. KANN. Yes. Mr. COCKRAN. In what way was the capital contributed to make good the loss? Mr. KANN. I can not answer for the other companies outside of mine. Mr. COCKRAN. Just take yours? Mr. KANN. Yes. Mr. COCKRAN. As I understand it from you, there has been a steady loss every year? Mr. KANN. No; I did not say that anywhere in my statement. I say that a number of the companies have never paid any dividend, and as to those companies I would say that they have never made a profit, but a steady loss. Mr. COCKRAN. You are not connected with them, are you? Mr. KANN. No, sir. Mr. COCKRAN. Your evidence is not good on that. Mr. KANN. No, sir; that is the reason Mr. COCKRAN. Let us confine ourselves to your company, about which you know everything. Mr. KANN. Yes. 61318-SCHED B-09- -33 Mr. COCKRAN. Has that company been conducted at a loss for the last ten years? Mr. KANN. No, sir. Mr. COCKRAN. It has made a profit? Mr. KANN. Some years. Mr. COCKRAN. It has made a profit, so that it has not had to make up a deficit by reason of losses in operation? Mr. KANN. We have spent a large amount of money for rehabiliment and replacement of our plant. Mr. COCKRAN. Is that represented by stock? Mr. KANN. No, sir; it is represented by a debt that must be refunded into new money if we do not get to making profits on our plant pretty soon. Mr. COCKRAN. Your business has been run at a loss for ten years, and that has resulted in what is called a "floating debt;" am I right in that? Mr. KANN. Yes, sir. Mr. COCKRAN. What is the amount of that? Mr. KANN. I do not want to be discourteous, but I do not think that answers any purpose here. Mr. COCKRAN. But it does. I do not insist on the answer if it embarrasses you. Mr. KANN. I can not see Mr. COCKRAN. Let me finish and tell you why it does. You can see if your floating debt was a matter that amounted to 10 per cent even now on your capital, it would represent an annual loss of 1 per cent, and that would be one thing. On the other hand, if it was a mere negligible one, it would be another. That is the reason I propounded the question. Mr. KANN. I do not think it would serve this body in any respect to know the details of that. In a broad, general way our company has been in existence twenty-five years, and I have been identified with it ever since its inception, and have had more or less to do with its manipulation ever since it has been in business. We made money for four or five years, when there was practically less competition, from the fact that the glass was not so plentiful as it is now. In the later years, in the last four or five years, we have made no money. We have been put to the necessity of spending money for the purpose of making goods in some portions of our plant, trying to economize and reduce the cost, which meant an expenditure of new money and high cost while we were making these improvements. That is our case. Mr. COCKRAN. Let me ask you this: This will not go into any of the secrets of your business. Your stock is not on the market at all? Mr. KANN. No, sir; it is a close corporation. Mr. COCKRAN. It is not for sale? Mr. KANN. Yes; I would be glad to have you identified with the company by selling you some of my stock. Mr. COCKRAN. It is not on the market? Mr. KANN. No, sir. Mr. COCKRAN. You are not in the hands of a receiver? Mr. KANN. No, sir. Mr. COCKRAN. You have done business for fourteen years? Mr. KANN. Yes, Mr. COCKRAN. And you are not broke? Mr. KANN. I do not want to admit it here in public at any rate. I have not paid my hotel bill here yet. Mr. COCKRAN. And you have made no new issues of stock in those fourteen years, have you? Mr. KANN. No, sir. Mr. COCKRAN. Or of bonds? These are all matters of record, so that I am not asking you to disclose anything of a private character. You have made no issues of bonds? Mr. KANN. Yes; we have made an issue of bonds. Mr. COCKRAN. Was that to make good a deficit, or to extend your operations? Mr. KANN. To increase our operations and try to reduce our cost. Mr. COCKRAN. And strengthen your competitive position in the market? Mr. KANN. Yes. Mr. COCKRAN. I understand you have testified that the railway rates are excessive. Is that what you said that the railway rates imposed on you here are very excessive in comparison with the rates on goods imported from the Atlantic seaboard to Pittsburg; that the rates from Pittsburg west are, in your judgment, excessive? Mr. KANN. No; I did not say that they were excessive, but I say that the foreign manufacturer gets a very much lower rate by comparison. Mr. COCKRAN. That is it. Mr. KANN. It may be all right, but we do not get the benefit of it. Mr. COCKRAN. I mean, by comparison, your rates are too high? Mr. KANN. By comparison the foreign manufacturer gets a very much lesser rate, if that is what you mean. Mr. COCKRAN. I mean are the rates charged to you from Pittsburg west high by comparison with the rates charged from the Atlantic coast to Pittsburg? Did I understand you correctly to say that they were? Mr. KANN. The rate from the export point on the other sidefrom Antwerp-is about the same or less; that is, it has been up to a very short time ago less than the rate was at that time from Pittsburg or the Pittsburg district to Chicago. In other words, they got an ocean rate for nothing and a portion of the inland rate for nothing. Mr. COCKRAN. And you got no portion of the inland rate for nothing? Mr. KANN. No, sir; that is right. Mr. COCKRAN. Therefore by comparison it was quite excessive? Mr. KANN. Yes, sir. Mr. COCKRAN. Do you not think that your remedy for that is to be obtained before the body charged with the equalizing of rates and not by compelling us to perpetrate another wrong, or at least to impose another exaction on the community, because you have suffered one at the hands of the railroad? Mr. KANN. I think it would be our duty as manufacturers to get redress from them if we could. Mr. COCKRAN. Yes. Mr. KANN. We have been before the Interstate Commerce Commission. Mr. COCKRAN. You have been before them? Mr. KANN. Yes; and you heard Mr. Clause, the president of that company, tell about that. They brought suit against several of the railroads on that very point, and fought it out very ardently, and consistently, and persistently. Mr. COCKRAN. Now, without accepting Mr. Boutell's view, but on the other hand dissenting from it strongly, that protection has benefited both the consumer and laborer, because I believe it has benefited neither but plundered both, I want to ask this question, based on your statement. I am quoting from your statement that under this proposed rate a wholesome importation would still be continued. Mr. KANN. Yes. Mr. COCKRAN. Might I ask you to define what you mean by "wholesome importation," from your point of view? Mr. KANN. I had in mind, when I used that language, that there would be a great many plates coming over here of a specific size which it would be difficult at any time for this country to furnish, irrespective of the price, and which the foreign manufacturer probably would just as gladly furnish as any other size. Mr. COCKRAN. I see. Mr. KANN. They have (as has been told you here, I suppose) very much more careful operators, and they get better and more positive results; and there has been a standard established here of several sizes, one of them being 18 by 40, or 24 by 30, square inches, making 5 square feet. They are used as a standard in the furniture and in the pier-mirror business, and in frame goods. I do not believe that in this country they will ever be able, even if they could take it per foot, at a profit based upon what it would cost them, to take the quantities of that stuff that will be offered here. They could not do it to-day; and I think that business is going to keep on increasing to such an extent that there will always be a very large importation of just those few sizes alone. Mr. COCKRAN. But your idea of wholesome importation would be one that excluded altogether the importation of these smaller plates? Mr. KANN. Oh, no; no, sir. I do not think it will do anything of the kind. I do not believe that this duty, if it is imposed, will at all result in the excluding of the small glass. I think it will result in dividing it. Mr. COCKRAN. Do you mean to say that the glass which pays now 8 cents could come in under a 221-cent duty? Mr. KANN. Yes, sir. Mr. COCKRAN. Then what good will it do to put on this 221-cent duty? Mr. KANN. It will allow us to meet that competition. Mr. KANN. Oh, no. Mr. COCKRAN. How will you meet it except by keeping it out?. Mr. KANN. When we are meeting it to-day by meeting the import price, we are getting less for our glass than it costs us to manufacture it. If there is added onto the duty this increased rate on small glass, it is going to make that glass cost them more money landed here. Now, I believe they will cut into that duty. I do not believe it will deter the Belgian manufacturer from cutting into that price, because they have all these other markets of the world to make good from, which we have not; and while this will give us some protection |
