PARAGRAPH 487-ALIZARIN.

AMERICAN COTTON MANUFACTURERS' ASSOCIATION.

[Testimony before the Senate Finance Committee.]

Committee: W. A. Erwin, Durham, N. C.; Ceaser Cone, Greensboro, N. C.; T. H. Rennie, Pell City, Ala.

The CHAIRMAN. I believe you have the gentlemen here?

Senator OVERMAN. Yes; I have with me Mr. Erwin, from my State, and Mr. Cone. Mr. CONE. Gentlemen, I have some samples that I would be glad to show you. The CHAIRMAN. The committee will be very glad to look at them.

Senator OVERMAN. Mr. Erwin will first address you, on behalf of the American Cotton Manufacturers' Association. Mr. Erwin is from West Durham, N. C.

Mr. ERWIN. I will request Mr. Cone to first present the samples, in connection with our presentation of this matter.

STATEMENT OF MR. CEASER CONE, OF GREENSBORO, N. C., REPRESENTING THE AMERICAN COTTON MANUFACTURERS' ASSOCIATION.

Mr. CONE. Mr. Chairman, and gentlemen of the committee: The samples I have here represent fabrics manufactured by mills, the officers of which are practically all members of the American Cotton Manufacturers' Association, which we represent. Senator GALLINGER. Where are the mills located?

Mr. CONE. These samples we are displaying were all made in the South. Some were made in Virginia, some in North Carolina, and some in Alabama. They are all manufactured with dye, either anthracene or indigo. The samples are principally indigo-dyed fabrics.

Senator GALLINGER. What you are interested in, then, is the dye?

Mr. CONE. Yes, sir; the dye that is referred to in the bill H. R. 20182.

Senator GALLINGER. What paragraph is that, if you please?

Mr. CONE. It is on page 10, line 16, being paragraph 38, relating to indigo.
Senator GALLINGER. Yes; I see.

Mr. CONE. The fabrics which I am showing samples of are dyed principally with indigo. Over 50 per cent of the indigo that is brought to this country is used in the dyeing of these fabrics that I am showing you. I have samples of garments also made from these fabrics. All these fabrics are used in manufacturing clothing sold at low prices and used principally, in fact almost altogether, by working people. Senator GALLINGER. What change is proposed to be made in the bill? Mr. CONE. They propose to put 10 per cent duty on indigo.

Senator GALLINGER. What is the present duty?

Mr. CONE. There is none. It is free. There never has been any duty on it since we have been using it in our mill.

Senator SMOOт. There is not a pound of synthetic indigo made in this country.

Mr. CONE. No, sir; there is not a pound of synthetic indigo made in this country. There never has been any produced in this country in my time.

The CHAIRMAN. Would this duty add much to the cost of these articles to the workingmen?

Mr. CONE. To give you an idea, sir, there are two mills in our association that we are representing here to-day that use about a quarter of a million dollars worth of indigo in a year. The present cost of indigo is about 74 per cent of the cost of the cloth. Take the garment

The CHAIRMAN. What does a garment like that [indicating] sell for?

Mr. CONE. Pardon me, sir; the price is on it. That is a garment that the manufacturer sells at $3.75 a dozen. That retails at 50 cents.

The CHAIRMAN. The duty would add another 25 per cent to the cost, would it? Mr. CONE. It would add to the cost of the dyestuff.

The CHAIRMAN. That is what I said.

Mr. CONE. They propose to add 10 per cent to the cost of the dyestuff. The best garment made out of these fabrics retails for $1.

Senator GALLINGER. Approximately what additional cost of the dyestuff would there be, so far as you are concerned?

Mr. CONE. The cost of the dyestuff is about 7 per cent of the cost of the fabric, and it would add 10 per cent to that 7 per cent.

Senator GALLINGER. Yes.

Senator HEYBURN. That is indigo?

Mr. CONE. Yes.

Senator HEYBURN. What substitute can you use for indigo?
Mr. CONE. I have never been able to find any.

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Senator HEYBURN. Then they could not manufacture the goods at all without the indigo?

Mr. CONE. There are substitutes, but they are not satisfactory. The workingmen who wear these garments put them to right hard use, and they have to wash them frequently. Indigo is the only dye we have ever found that was satisfactory for a cheap garment.

Senator HEYBURN. But they do use some substitutes?

Mr. CONE. Oh, yes, sir; there are substitutes used, but they have never been satisfactory.

Senator WILLIAMS. The experiment of trying to raise indigo in this country was tried long ago and abandoned, was it not?

Mr. CONE. That was before my time.

Senator WILLIAMS. They used to raise it in South Carolina and Louisiana.

Mr. CONE. Fifteen years ago, all the indigo we used in this country was a vegetable product, raised on the same principal as sugar cane; and it was manufactured in that

Mr. CONE. Principally in India. Most of the indigo used in this country formerly came from Calcutta. At present, and for the last 12 or 13 years, it has been manufactured synthetically and imported from Germany-practically all of it.

Senator HEYBURN. Explain for the record, that term "synthetically," in order that those who may read the record may have the benefit of it.

Mr. CONE. It is a coal-tar product, manufactured from coal tar.

Senator SMOOт. Ninety per cent of all the indigo used in the United States to-day is synthetic indigo, is it not-or 98 per cent?

Mr. CONE. It is probably more than 90 per cent.

Senator SMOOт. Ninety-eight per cent.

Mr. CONE. I have not the data on that.

Senator HEYBURN. Why do you call that indigo?

Mr. CONE. It has all the properties, so far as we have been able to ascertain, that the vegetable indigo has.

Senator HEYBURN. Still, it is a mineral product as compared with the indigo that we formerly imported.

Mr. CONE. I think so; yes, sir.

Senator GALLINGER. Why can we not manufacture that synthetic indigo in this country?

Mr. CONE. That I am not prepared to answer, sir, except to say this: I was on a trip abroad some years ago and took occasion to visit a factory where they make it, and I do not believe you would be able to find any one in this country who would have the nerve or the money to build and equip a factory to make it; and then, besides, I think the process of manufacture is covered by patents.

Senator SMOOT. That is the reason.

Mr. CONE. I think the people that manufacture it have been experimenting for more than a generation to reach the point of perfection that they have arrived at. Senator HEYBURN. The raw material for the synthetic indigo is in this country? Mr. CONE. That I do not know. I do not know that it would be found in sufficient quantities and at a price that would enable them to manufacture. I am not posted on that, but I imagine not, I would not say. I am not an authority on that.

Senator HEYBURN. You say there is not enough of that by-product of petroleum, coal oil, in this country to form the basis of manufacturing it?

Mr. CONE. I have some doubt about that, sir. I am not posted on that. I can not answer authoritatively because I am not posted.

Senator WILLIAMS. At any rate, if a new industry were to be built up in that way, it would be built up for a time at your expense as a manufacturer?

Mr. CONE. I think so, and I think we would have to put a much heavier duty on it. If the idea of putting on duty is to encourage some one in this country to make it, then we would have to start out with a much heavier duty than 10 per cent. It would be, in my opinion, a tax either on the user of the indigo or the user of the cloth in which it is used.

Senator HEYBURN. What are you in favor of? Are you in favor of maintaining the present duty, increasing it, or diminishing it?

Mr. CONE. There is no duty now. We are in favor of letting it remain just as it is. The indigo constitutes a very large percentage of the cost, as I explained a while ago, of manufacturing these cheap goods. We are making goods to-day that cost, at the present price of cotton, a little less than 20 cents a pound.

Senator HEYBURN. Are you in favor of changing the tariff rate on indigo?
Mr. CONE. We are in favor of letting it stay as it is. There is no duty.

PARAGRAPH 487-ALIZARIN.

Senator HEYBURN. Then you are not in favor of a duty?

Mr. CONE. No, sir.

Senator HEYBURN. Are you in favor of a change in the tariff rates on this coal-tar product that you have talked of?

Mr. CONE. I have not studied the question.

Senator HEYBURN. What is the proposition that involves the cost of this article? Mr. CONE. They propose to add 10 per cent duty on indigo.

Senator HEYBURN. Are you in favor of it?

Mr. CONE. No, sir; I am opposed to it.

Senator HEYBURN. That is what I was trying to get at.

Mr. CONE. As I started to explain, Mr. Chairman and gentlemen, we are manufacturing these goods, and we use indigo in connection with the manufacture. Here is a fabric on which we are paying to-day 11 cents a pound for cotton, and the cost of producing these goods is about 20 cents a pound. The indigo represents very nearly 10 per cent of the cost of the goods.

Senator HEYBURN. What is the weight of that article?

Mr. CONE. A yard of this goods weighs about 8 ounces or half a pound.
Senator HEYBURN. How much does the garment weigh?

Mr. CONE. That garment weighs let me see: There are about 4 yards in that. It takes about 2 pounds of cloth, counting the waste of clippings. There are about 2 pounds of cloth in that garment; at least 74 per cent of that weight was indigo. Senator HEYBURN. How much is the indigo worth that is in that garment? Senator WILLIAMS. You mean 7 per cent of the value is indigo.

Mr. CONE. Well, the cloth in that garment weighs about 2 pounds, the cost of manufacturing, to produce the goods, is about 40 cents; so that would mean 7 per cent of 40 cents, which is about 3 cents, or possibly a little bit more.

Senator HEYBURN. How many people in this country are engaged in making that article and other articles of the same material?

Mr. CONE. Do you refer now to the cloth or the

Senator HEYBURN. How many people are engaged in making it?

Mr. CONE. Do you refer to the cloth or the garment?

Senator HEYBURN. The garment.

Mr. CONE. Do you mean the proprietors or the laboring people?

Senator HEYBURN. I mean the people who are doing the work.

Mr. CONE. They run up into the hundreds of thousands.

Senator HEYBURN. Can you give it approximately? That comes closer to the working people of this country than all the other articles that we deal with, so let us get some real facts about it.

Mr. CONE. There are factories all over the United States.

Senator HEYBURN. How many employees are there engaged in making the garments? Mr. CONE. I would have to make a wild guess at that, sir.

Senator HEYBURN. Is there somebody here who knows?

Mr. CONE. I would have to make a very wild guess, because I have never manufactured any of the clothing; there are factories in every State in the Union

Senator HEYBURN. Yes; we have one in our State.

Mr. CONE. There are some very large factories on the Pacific coast-one of the largest factories in the country. There are factories at Los Angeles. San Francisco, Portland, and Seattle, and then as far east as Portland, Me., and through the intermediate country, the Missouri River country. They run into hundreds of thousands. Senator HEYBURN. How many hundreds of thousands?

Mr. CONE. I should say probably 200,000 or maybe 300,000.

Senator HEYBURN. Is it not a fact that there are nearly half a million people engaged in the making of these garments?

Mr. CONE. I think probably there are, sir.

Senator HEYBURN. How many are engaged in making the cloth?

Mr. CONE. In making the cloth, I suppose there are possibly in the neighborhood

of 60,000 to 75,000 people. Do you refer to this identical cloth [indicating]? Senator HEYBURN. I refer to the character of cloth that is used for overalls for workingmen.

Mr. CONE. I guess there are 75,000 to 100,000 people, possibly.

Senator HEYBURN. Do you think that would cover it?

Mr. CONE. I do not know. There are no statistics at hand.

Senator HEYBURN. We want to know how many people would be put out of employment if these garments and the cloth were made abroad, who are now employed in this country by reason of the opportunity that that affords.

PARAGRAPH 487-ALIZARIN.

Mr. CONE. I think that all over the United States there is not a town of any consequence that does not have an overall factory.

Senator HEYBURN. That is true.

Mr. CONE. It would be very difficult for me, unless I had some information, to speak intelligently of that.

Senator HEYBURN. I would suggest that the interest you represent would do well to bring that information in, because it is the basic information upon which the tariff question should be considered in regard to this class of articles.

Mr. CONE. I can get that information for you, sir. I would be very glad to do it. Senator HEYBURN. The question is, how many people would be put out of employment in this country if this work were done abroad. That is the underlying question. Mr. CONE. I will be glad to get it for the committee.

Senator HEYBURN. We have protective tariffs for the purpose of protecting those who labor here against not only competition but idleness, because of the articles being made abroad.

Mr. CONE. In North Carolina alone, I should say, we have at work on that class of goods probably 12,000 or 15,000 people.

Senator HEYBURN. We save the freight on the transportation of the raw material abroad and on the finished product back again. We save wages to our own American people, whatever their race or nationality may be. We save the money that would be paid abroad for the by-products, you might call them, of the article. So it is very important to know how much is represented by the labor, I would like to know. Mr. CONE. There is one fact that I can give you, sir. I have the figures here. I can give you the cost of labor per pound in manufacturing those goods if that would give you any idea

Senator HEYBURN. When we come to talk to the average citizen he does not want to do the lead-pencil work. He wants to have it done for him; but if you can give the result it would be very appropriate.

Mr. CONE. I am very sorry that I have not those statistics.

Senator WILLIAMS. Have you any idea that a tax of 10 per cent upon indigo would drive the making of these goods abroad?

Mr. CONE. That I do not know, sir. I was in London last year

Senator WILLIAMS. Are many of these goods imported into the United States?
Mr. CONE. None that I know of.

Senator WILLIAMS. Blue jeans?

Mr. CONE. None that I know of.

Senator WILLIAMS. Are they exported from the United States?

Mr. CONE. Some are.

Senator WILLIAMS. A great many are, are they not?

Mr. CONE. I would not say a great many. I do not think the United States exports this character of fabric; I do not suppose they export 21 per cent of their production. Senator WILLIAMS. Do you know what the exports amount?

Mr. CONE. I have not the figures at hand; no, sir. There are a few of these goods exported at times.

Senator WILLIAMS. Give me your judgment, because I have some degree of confidence in it. Of course, I am opposed to putting duties on anything where I can avoid it unless the necessity of the Treasury requires it; but have you any idea, honestly, that putting this duty on indigo would drive the manufacturing of these goods out of the United States?

Mr. CONE. I do not know that it would drive them out.
Senator WILLIAMS. Do you really fear that it would?

Mr. CONE. Well, I do not know that I do, sir. The only fear that we have is in consequence of our experience of the last three years, when the high price of cotton put a great many people out of business. It shut down a great many mills making these goods. It shut down a great many overall factories. We know that.

Senator WILLIAMS. Yes.

Mr. CONE. Anything that tends to raise the price of any article interferes with its consumption.

Senator WILLIAMS. That is undoubtedly true, and to a certain extent it restricts its production because it restricts its sale."

Mr. CONE. We have always found that when prices go up business goes down. That has been our experience, especially in these coarser, heavier goods. It makes some difference to the workingman. There [indicating] is a garment that retails now for 50 cents. The manufacturer of the cloth and the manufacturer of the garment can make a small profit, and the garment can be retailed over the counter at 50 cents.

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Here is the history of it; the manufacturer gets $3.75 a dozen for this. He sells it to the wholesaler, who in turn sells it to the retailer. He goes into the highways and the byways and sells it.

Senator HEYBURN. Who makes that?

Mr. CONE. That is made by a man by the name of Teitz, in New York.

Senator HEYBURN. Is that made by women sewing in their own homes or shops? Mr. CONE. I think this manufacturer has a large place, a loft, and has his workmen all there in his place.

Senator HEYBURN. Is that what is called a sweatshop? Mr. CONE. I do not think it is a sweatshop; no sir. This man's place is on White Street, New York. That garment retails at 50 cents. When the price got up so that it had to go out as a 60-cent garment when the prices were very high last year, the trade broke down. It was as if it were cut with a knife. The trade broke down. They said they would not pay 60 cents for the garment; that if they could not get it for 50 cents, they would not buy it. I simply mention that to show how a little difference in the price influence the consumer. I think that is about all I have to say. Senator WILLIAMS. You are engaged in the business of manufacturing the cloth are you not?

Mr. CONE. Yes.

Senator WILLIAMS. And not in the making of the garments.

Mr. CONE. I am engaged in the manufacture of the cloth.

Senator HEYBURN. Do you manufacture the brown canvas too?

Mr. CONE. No, sir.

Senator HEYBURN. You manufacture just the blue?

Mr. CONE. The blue, that is all. We also manufacture this stripe material [indicating].

Senator HEYBURN. I know. I referred to the brown canvas.

Mr. CONE. No, sir; we do not manufacture that, at least, I do not.

The CHAIRMAN. Is there anything further you wish to say to the committee?

Mr. CONE. Nothing at all. I am very much obliged to you.

STATEMENT OF MR. W. A. ERWIN, OF WEST DURHAM, N. C., REPRESENTING THE AMERICAN COTTON MANUFACTURERS ASSOCIATION.

The CHAIRMAN. Please state your full name to the committee.

Mr. ERWIN. W. A. Erwin.

The CHAIRMAN. Where do you reside?

Mr. ERWIN. I reside at West Durham, N. C.

The CHAIRMAN. Whom do you represent?

Mr. ERWIN. I have the honor of being the vice president of the American Cotton Manufacturers Association, and chairman of this humble committee.

If permitted, I will read in your hearing, gentlemen, a paper that we desire to leave with you, signed by the committee. It will present some facts that I think you gentlemen would like to hear; and I will not detain you very long with further remarks. [Brief was read.]

It

Now, gentlemen, we will not burden you with many further remarks on this subject, but we would like to say that we hardly feel your minds need be refreshed as to the fact that cotton milling, one of the greatest industries in this country, for the past four years, within your own sight and observation, has suffered to an enormous extent. has paralyzed a great industry. It has put out of work and made to suffer not only the men, women, and children actually engaged in operating the cotton mills, but every other class of labor employed in the cutting and manufacture of garments. Senator GALLINGER. Was that largely due to the high price of cotton?

Mr. ERWIN. That was largely due to the high price of cotton, at least we think it was. There are other things, however, that have entered in, and when the high price of cotton came, and when our industry was very much hampered in consequence, we found that the people either could not or did not buy the garments; and the cloth that we manufactured in our mills, which is dyed very largely by indigo and the colors coming from the coal-tar dyes

Senator HEYBURN. You th nk it reduced the profits of the manufacturers considerably, do you?

Mr. ERWIN. Reduced the profits of the manufacturers?

Senator HEYBURN. Yes.

Mr. ERWIN. It has seemed to us that if the burdens put upon the manufacturers during the last four years are to be taken for anything, and we can only judge the future by the past, it would fix us so that we could not run probably at all."