THE CHAMPLAIN SILK MILLS, WHITEHALL, N. Y., SUBMITS A TENTATIVE SCHEDULE FOR SPUN SILK. WHITEHALL, N. Y., February 2, 1909. COMMITTEE ON WAYS AND MEANS, Washington, D. C. GENTLEMEN: A serious attempt having been made to lower the duties now fixed on spun silk imported from abroad, we desire to call your attention to causes underlying this request, and the reason why it should not be granted. On the 1st of December last there was submitted by Sidney Blumenthal, at the hearing conducted by you for the consideration of silk schedules, a memorandum signed by himself and others, requesting a change in the tariff schedules covering spun silk, but it may be noted at once that these gentlemen recommended "the retention of the present rates on velvets, plushes, and other pile fabrics," articles in the manufacture of which spun silk is used. The reason assigned for requesting the change in the tariff on spun silk was that specific duties would be more agreeable than the present form, which might be called a compound or mixed form, partly ad valorem and partly specific. Carefully reading the report of the proceedings had before you on that day, we can not find anywhere a frank statement on the part of the then petitioners that they desired a lesser duty on spun silk, but we do find proposed duties on a purely specific basis that are decidedly lower than what now prevail. The questions asked of Mr. Blumenthal by members of your committee would indicate that at that time you were not aware that the parties appearing before you and presenting to you a proposed schedule of tariffs on spun silk were not spun-silk manufacturers. Your attempt to obtain information from Mr. Blumenthal by questioning disclosed the fact that he had no intimate knowledge of the industry. Of course, the truth of the matter, as no doubt you are aware at present, is that the signers of the petition filed with you on December 1, presented by Mr. Blumenthal, were each and every one importers and users of spun silk, but not manufacturers. They desired as low a duty as they could obtain on spun silk. They were quite willing to retain their present duties on plushes and velvets, but their reason for presenting the schedule was that they prefer specific duties on spun silk. The schedule prepared by them, called "Schedule by comparison." does not correctly set forth the real protection afforded, nor the real duties collectable on spun silk yarns manufactured in this country, this because the lower or cheaper grades of spun silk yarns are the ones that have been imported, while the higher or better grade yarns are the ones that have been manufactured in this country. The partly ad valorem duties under the present law are sufficient to give the American spinner protection on the higher grade of goods, and are insufficient to protect him on the lower grade of goods; hence it has been the lower grade of goods that has been imported in major part, and per pound duty collected would necessarily be lower than what it would be if the higher grade of yarn, such as is manufactured in America, had been equally imported. To accept the per pound duty collected under the present law as a proper basis of specific duty would be to take a figure that has been too low to protect the American spinner on the cheaper yarns and would certainly be too low to protect him on the higher grade yarns. The net result of such a method of fixing a new duty would be to deprive the American spinner of all protection. In the report of your proceedings this statement is found, made by Mr. Blumenthal and others: "The spun-silk manufacturer in this country confines himself to making purely spun silk, producing no schappe at all." It may be startling to your committee to be informed in the face of such a statement that there is absolutely no difference between schappe and spun silk, that the two things are identicalthat they are interchangeable terms and exist only in the difference in language of the countries that produce the goods. Not to burden you with too lengthy an argument, we will sum up this phase of the matter by saying that this question was judicially passed upon by the Board of Appraisers of the port of New York, in which instance it was decided that spun silk and schappe are the same thing. (F. Vietor & Achiles v. United States, No. 3959.) There is a slight variation in the early processes of making spun silk (or schappe) in various countries. The European continental spinner and the English spinner differ in this regard. In America both processes are being used. As the industry in this country is younger than either in England or Europe, it has adapted methods from both regions. Based on this misleading idea of a difference between schappe and spun silk, a request was made of you to remove the duty from the combings of schappe, and this was done on the plea that it would assist the industry for spinning silk yarns in this country. We would explain to you that the combings are the result of about the fourth or fifth operation in the production of spun silk, operations which at least require as much skill (in fact they require more skill) as subsequent operations, and for the performance of which a great deal of labor and machinery is required. Without doubt the European spinner can produce his combings cheaper than the American spinner, because he can perform every process in the manufacture of spun silk cheaper, and to allow the combings to come in free of duty would be simply to deprive the American spinner of just that much protection. It would make practically valueless a large investment in equipment, consisting of buildings and machinery, and would throw out of employment a large proportion of those engaged in the spun silk industry. The men performing these operations, particularly the combing, or dressing, as it is sometimes called, are specially trained for this work, just as a machinist or carpenter is trained for his particular work, and to deprive the comber or dresser of his field of employment would be to change him from a skilled mechanic to a common laborer. In fact, there would be as much justification for bringing in silk yarn in the unfinished state, but further along in process, let us say before it was doubled and twisted, or gassed. Undoubtedly the European spinner could land it in this country at a price much cheaper than the American could produce it (were the tariff to be removed on the article so unfinished), and a very small amount of labor would then be used to finish the article. If the argument were to be carried along sufficiently, we would reach the absurd conclusion that bringing the yarn in all but bundled would be still more desirable. The amount of labor employed in bundling the yarn, however, would hardly justify any protective tariff what ever. WHY A COMPARATIVELY LARGER AMOUNT OF SPUN SILK USED IS NOT PRODUCED IN THIS COUNTRY. Some criticism has been directed against the American spinner because he does not produce a larger proportion of the yarn used in this country. The fact is pointed to that there is an importation of about 2,500,000 pounds, two-thirds of the entire consumption. If there were no tariff at all, we assure you, gentlemen of the committee, that there would be no spun silk made in the United States; if the protection were not larger, but differently specified, we believe that practically all of the spun silk used in this country would be manufactured here. There is no theoretical or practical reason that would prevent this. Every form or grade of spun silk can be made in this country, but the American spinner has been confined to the higher grades, especially of late years. It is interesting to note how this occurred. When the tariff was originally placed upon spun silk, a certain percentage was fixed on the value of goods imported. Spun silk at that time was considerably higher in price per pound than to-day, because the raw material from which spun silk is made was then much higher than it is to-day. The per pound duty which Congress originally intended spun silk to have, on account of fixing the duty on an ad valorem basis, was never realized, excepting for a very short time. As soon as the price of raw material dropped, the price of spun silk dropped and the per pound duty dropped. The American spinner found himself deprived of a large portion of the protection that Congress had intended he should have. Fortunately, on the higher grade of goods there was still enough duty to cover the difference in cost of labor in Europe and America, and the American spinner continued making the higher grades in competition with the foreigner, and as the country's business has expanded so has the spun silk industry of America, but only in the narrow field indicated. On the cheaper yarns he has always been outstripped by the European; on the better grades there has always been a steady growth of the industry, but because of its being confined to so narrow a field and because of the narrow margin of protection, the spun silk industry of the United States has not expanded as have other textile industries that have been afforded a much greater protection. There are instances of spun silk manufacturers in this country who have found the field for the woven article much more inviting and have expanded as weavers to a far greater extent than they have as silk spinners, these weavers purchasing a large portion of the yarns they use from Europe. Had the protection been sufficient, these parties would have expanded their spun silk business just as rapidly as their weaving departments, and have given employment to thousands of individuals in this country instead of Europe. This would not only have had an effect on the labor of the spun silk industry direct, but all those lines which are a source of supply, machinery, etc., for the spun silk industry. If Congress would establish the per pound duty originally intended on spun silk and would protect the American spinner on the cheap grades as well as the better grades, the American spinner would produce all the yarn that is needed in this country, the same as the velvet manufacturers produce practically all the velvet that is required in America. A new and grave danger has arisen in the last few years to the Axerican spinner of silk yarns. Backed by enormous capital, abundant supply of cheap labor, proximity to the great source of supply of the raw material, the Japanese and other orientals threaten to drive the American manufacturer out of existence. Nothing but sufficient protection can preserve our American industry against oriental competition. We are not opposed to a specific duty that will sufficiently cover the difference of labor now existing between this country and others on all grades. As shown above, had we had a specific duty from the beginning, we would now be further advanced. What we object to is the attempt of users to lower the protection afforded us, which is absolutely necessary for our existence, on the theory that it would cheapen their product. Of course, the removal of tariffs on any industry in this country not as well developed and well fortified in the way of labor and otherwise as the same industry in other countries would cheapen the product and all articles manufactured therefrom. No doubt, plushes and velvets, and other woven articles might be cheaper if there were no duty on spun silk, but equally possibly, dresses might be cheaper if there were no duty on the fabrics, and so on down the line. Each manufacturer might ask that the material which he uses be unprotected; thus down the line until we undermine the whole theory of tariff protection. We deem it unnecessary to argue this question as to whether there should be tariff protection or not, as the members of this committee, and Congress will attend to that particular subject, having apparently, without question, received their instructions from the people at the polls at quite a number of elections in the past. Frankly advocating the protective system as being the foundation for the wonderful growth and prosperity of our country, we ask of you to afford us the same protection, comparatively, as is afforded to other industries, thus enabling our industry to grow to its proper proportions, and give employment to a properly large amount of capital and a same large number of people, the number reaching into the thousands. The spun silk manufacturers of America, we may suggest in all modesty, are possessed of the same average business acumen and intelligence as are possessed by the average manufacturer in other lines. They have no obstacle to their growth, excepting the difference in labor between this country and other countries, and if this difference be removed by a sufficient protection, their industry will become as important a factor as that of any other branch of textile manufacturing. We submit herewith a schedule and a comparison of the duties heretofore paid and collectible under the present tariff law. We have asked for a specific duty, which would amount to an increase on the lower grades, thus enabling us to manufacture the same; on the higher grades, we are asking for the same, or less, than we have always received. While it has not made us immensely wealthy, it has allowed us to manufacture and make a reasonable profit. We assure your committee that the difference in cost of labor in Europe for The following schedule gives data for four years, 1904, 1905, 1906, Schedule showing importation of silk into the United States during the years |