Freight rates in classes, December 7, 1908-Continued.

Above are the class rates applying on plate glass from Ottawa, Ill., to points shown.

Freight rates in classes, December 1, 1908.

Above are class rates applying on plate glass from Saginaw, Mich.,

to points shown.

THE PITTSBURG PLATE GLASS COMPANY FILES SUPPLEMENTAL BRIEF REPLYING TO H. E. MILES.

Hon. SERENO E. PAYNE,

PITTSBURG, PA., December 17, 1908.

Chairman Committee on Ways and Means,

Washington, D. C.

HONORED SIR: We ask permission to file this additional brief in reply to the statements made by Mr. H. E. Miles before your committee on December 8.

Mr. Miles states:

I beg to pay my compliments to him (the president of the Pittsburg Plate Glass Company) by informing you that the plate-glass schedule is extremely unfair and that it must be corrected, unless the wretched opportunity is continued to the plate-glass trust to rob the people.

In reply to this, we wish to say that we fully agree with Mr. Miles that the present schedule is unfair, and we have always so maintained since the organization of the present company, for the reasons fully set forth in our previous brief. The duty on large glass is too high and the duty on small glass is too low; but as to the charge of robbing the people, we simply wish to again set forth the fact that during the entire history of the present company, since 1895, we have paid our stockholders dividends which average for the period a trifle less than 4 per cent per annum, and have built up a surplus averaging about 31 per cent per annum for the same period, and that these earnings have come largely from auxiliary sources. In order to make the meager earnings above shown we have not taken any cognizance of our several million dollars of surplus, upon which we had no returnnot even simple interest. Our profits on the manufacture of plate glass, divorced from these auxiliary sources, have for the last seven years averaged barely 1 per cent per annum. There is no inflation (water) in our stock, so there has been no attempt to pay dividends on water. On the contrary, our stockholders have paid in $7,500,000 additional capital in cash since 1902 in order to carry on our business successfully.

Our most important auxiliary sources of revenue embrace the best coal and gas properties in western Pennsylvania; our branch warehouse system; our interest in the Patton Paint Company, which has always made much larger earnings than the Pittsburg Plate Glass Company; our Belgian plate-glass plant, which has been very profitable, and various other investments.

In this connection we wish also to state that we have always charged glass to our warehouses at as nearly the average prices current by other manufacturers to the jobbing trade as could be determined, with the purpose that our branch warehouse system should stand entirely upon its own merits; and also with the purpose of determining whether the policy of distributing our own product should be continued or abandoned. In fact, it has always been the policy of the company that all its auxiliary interests should and must stand upon their own merit.

Mr. Miles says, in comparing European with American labor, that the latter "labor is 50 to 70 per cent higher." The truth is that we actually pay fully 300 per cent higher wages in this country than we do at our Belgian works.

He says:

They added 100 per cent to their selling prices in two years' time, giving onesixth of the advance to their laborers and five-sixths to their stockholders.

The truth is, that our labor has always received full American standard of wages. The wages paid by this company have followed the general wage conditions and not the market fluctuations of our product. As against this, our manufacturing department has barely earned 1 per cent per annum on actual capital invested in plants. It it not difficult to perceive what results would have followed a more liberal division to labor.

He states that

With a cost of production not far from that in Europe, the difference in wage cost, which is very considerable, being offset by saving in fuel and materials, they made the American consumer pay nearly two dollars for every dollar's worth of glass he bought.

The truth is, that taking the last seven years, 1901 to 1907, both inclusive (I select these years because they cover the period in which the large increase in imports has taken place), our cost of manufacturing glass was .3265 per square foot, whereas the cost in Belgium for the same period, based upon the cost at our own works, which we have owned for a part of that time, and from the best information we can obtain from our Belgian superintendent, who has been connected with other concerns as well as our own, and from other sources, is about 14 per square foot. We note that Mr. Goertner, representing the foreign importers, who testified before you, stated that the foreign cost was .16. We do not think he is in position to get accurate information about it, but, in any event, his statement does not differ materially from ours.

With the above facts as to cost of production and the actual earnings that have been made, you can easily arrive at the proper conclusion as to how correct Mr. Miles is in his statement that we have forced the consumer to pay $2 for every dollar's worth of glass he has bought. Or, to reverse the statement, you can easily see what would have happened to the American plate-glass industry if we had sold our product at one-half the prices that have prevailed during our history.

He says:

They raised their prices so high that importers were able to pay the excessive tariff and bring plate glass in to advantage.

We suppose he means that you should infer from this that that accounts for the enormous imports that have come in under the Dingley bill. The truth of the matter is that these imports are made up principally of sizes under 5 square feet (under 24 by 30 inches), upon which the duty is so low that the foreigners have not only been able to sell this enormous quantity of glass, but force us to sell all that we have sold, which has been even a larger quantity, at a heavy loss to ourselves.

So far as the above quotation might refer to large glass, the present form of tariff naturally compels the American manufacturer, in some measure, to attempt to do this very thing, i. e., to ask a high price on glass over 10 square feet to make good the loss he is constantly sustaining on small glass. The flat-rate tariff that we propose would remove not only this necessity but the opportunity for so doing.

He says further:

Whereupon the plate-glass trust showed a new phase of trust management in writing importers that they must not bring in glass or they would be cut off from home supply upon such sizes as could not be imported to advantage, and the importers had to discontinue their effort to save the home consumer and advantage themselves, and leave that consumer wholly at the mercy of the trust upon an increase of price of 100 per cent.

The size of the imports and the enormous increase that has taken place show conclusively as to whether importers have been forced to discontinue their importations. During all the years when these imports have been increasing so largely, it would have been ruinous to the American manufacturers to stop them. Our efforts to make ends meet have been carried to the farthest extreme-the extreme of doing our business substantially without profit. To have carried these efforts far enough to have displaced imported glass completely would have meant ruin to every concern engaged in such an effort, because of the low prices on small glass. The plate-glass business is peculiar in this, that it is much less profitable to furnish 1,000 plates of one size than to furnish 1,000 plates of 1,000 different sizes. In almost every enterprise just the opposite condition obtains. You can furnish one plate of a given size at little or no waste, because you can always select from your stock or from your factory product something that so nearly approaches it that the loss is inconsiderable; but inasmuch as the glass coming from the factory into the warehouse may contain. defects of a hundred different kinds, which determine how the glass must be cut, any order calling for 1,000 plates of one size of necessity involves a much larger waste in cutting than does a miscellaneous order embracing all sorts of sizes. Here, again, is another instance in which the present tariff has worked great hardship upon the American producer, for the reason that the importer and the consumer, in his endeavor to get the largest possible piece of glass at the minimum rate of duty, has established the custom of consuming the largest quantities of glass in the maximum sizes that can be brought in under each bracket, with the result that the consumption of 24 by 30 and 18 by 40, both of which contain exactly 5 feet and come in at 10 cents per foot duty, has grown out of proportion to the use and imports of other sizes. To make this a little plainer, the duty on a 24 by 32, which is only 2 inches larger than a 24 by 30, is 224 cents per square foot, as against 10 cents per square foot on a 24 by 30. Hence, of course, everybody prefers to use 24 by 30. This has grown to such an extraordinary extent that these and other bracket sizes have become a large part of the consumption of glass used in furniture manufacture, and for the reasons above stated has become a great hardship upon the American manufacturer, who has only this market in which to sell his product, because the waste in cutting is enormously increased thereby. To the European manufacturer who sells these sizes in this market, it is not nearly so important, because he has all the other markets of the world, in which these conditions do not exist; so that this particular difficulty exists only with reference to a part of his business whereas it exists with regard to all of ours. With this explanation, I trust you will be able to understand that the effort we made years ago to have something to say with regard to what those who buy from us should import was an effort to secure from them a fair distribution of the sizes embraced in their order.

Of course the foreign manufacturer prefers orders that are as miscellaneous as possible, and he would make a more favorable price on the miscellaneous sizes than he would on the bracket sizes. Many years ago we did for a brief time endeavor to compel parties who not only bought from us but also imported to give us a fair distribution of their business. In other words, that they should not give the foreigner all the cream, upon which he could get a special price, and give us the skimmed milk. We did not want to furnish bracket sizes exclusively, with a large attendant waste in cutting, and allow them to give the orders for more desirable sizes to the foreigner. Evidently Mr. Miles thinks it was perfectly fair to the importer to take "advantage" of us, but very wicked for us to try to protect ourselves against unfair discrimination. The elimination of the several brackets by the adoption of a flat rate of duty will, of course, eliminate all questions of this character. But with the large increase in cost that has taken place, through increased cost of labor and materials, beginning shortly after the passage of the Dingley Act, we have been in a constantly less favorable position and have been driven further and further out of business, so far as competition with the foreigners on small glass is concerned.

To give you further evidence on his repeated charge of " an increase of price of 100 per cent," we herewith show a schedule setting forth the prices that have existed in the United States in five-year periods for the past thirty years, and also for the current year.

The following table shows the prices for glazing glass at periods of five years from 1875 and to date:

These prices are the retail prices to the consumer for glazing glass and show the average prices that have prevailed in each of the years stated, which shows conclusively the unreliability of Mr. Miles's statement. These figures, when taken in connection with our earnings, show conclusively that the American consumer has not been robbed; and, furthermore, that inasmuch as about two-thirds of the glass consumed is under 10 square feet in area (24 by 60 inches), that the consumer has actually been supplied a large part at a loss to the producer.

Mr. Miles further says that

About five months ago the plate-glass people got into a little quarrel among themselves and cut their prices 35 per cent. The factories have been running full time at this lower rate.

The truth of the matter is that of the 18 factories in this country only 1 or 2 have run continuously this year; the remainder have been shut down varying periods, from a month up to five or six months out of the year, due to the general stagnation of business. With this condition in existence, fierce competition resulted early in the year