SILK GLOVES.

[Paragraph 390.]

STATEMENT OF JULIUS KAYSER, OF NO. 524 BROADWAY, NEW YORK CITY, RELATIVE TO SILK GLOVES.

TUESDAY, December 1, 1908.

Mr. UNDERWOOD. What paragraph do you propose to speak to?
Mr. KAYSER. Paragraph No. 390, silk gloves.

Mr. GRIGGS. Are you a manufacturer or importer!
Mr. KAYSER. A manufacturer.

The CHAIRMAN. You may proceed, Mr. Kayser.

Mr. KAYSER. I come before you to give you some information as to the magnitude of this business that is a comparatively new one. I want to tell you that last year about 975,000 dozen of silk gloves were manufactured in this country, and probably 125,000 or 150,000 dozen imported. The importations were unusual, and only owing to the fact that the manufacturers in this country could not produce the quantity required.

The CHAIRMAN. How do you designate these goods?

Mr. KAYSER. As silk gloves. I wish to state that this importation that I have just mentioned was a very unusual one. Prior to 1906 I do not believe that there were 5,000 dozen silk gloves imported into this country, and I do not believe that at any time within the last twenty-five years there were 10,000 dozen imported into this country. The CHAIRMAN. These gloves are not mentioned by their name in the tariff?

Mr. KAYSER. Not in any special schedule. They come in under knitted wearing apparel.

Mr. UNDERWOOD. The ordinary importations amount to nothing? Mr. KAYSER. To nothing, and never have.

Mr. DALZELL. Gloves are specifically excepted in paragraph 390, which reads as follows: "That any wearing apparel or other articles provided for in this paragraph except gloves."

Mr. UNDERWOOD. And it reads, "when composed in part of india rubber."

Mr. KAYSER. I understood it was paragraph 370, with a duty of 60 per cent ad valorem.

Mr. DALZELL. Then they must come under knit gloves.

Mr. KAYSER. Yes; knit gloves; they are a knit fabric.
Mr. DALZELL. Very well, proceed.

Mr. KAYSER. I do not ask for any advance in the tariff. I think it would be advisable to have a specific duty and a percentage about the same as it is now in place of the ad valorem. The difference in the labor cost in the two countries on gloves is about four to one. I have the prices paid in Saxony and our average prices paid here, and it shows, by the earnings of the girls who work-the principal part of the work is done by girls with sewing machines, who earn an average wage of $9 per week. The wages in Saxony are not more than 8 or 9 marks a week, with sixty hours of labor, against fifty-five hours of labor here.

Mr. GRIGGS. How long have you been manufacturing gloves?
Mr. KAYSER. Since 1888.

Mr. GRIGGS. Was that the beginning of the glove industry in this country?

Mr. KAYSER. That was the beginning.

Mr. GRIGGS. That was twenty years ago?

Mr. KAYSER. Twenty years.

Mr. GRIGGS. Has the industry pretty nearly grown by this time?

Mr. KAYSER. Yes.

Mr. GRIGGS. But still we have to take care of it.

Mr. KAYSER. No, no; it isn't that.

Mr. GRIGGS. It is not quite 21 years old?

Mr. KAYSER. Not quite 21, and an infant industry comparatively, but I am not afraid of foreign competition so far as that is concerned, excepting the great difference in the cost of labor. The greater part of it is labor; two-thirds of it is labor.

Mr. GRIGGS. Is that what you want the protection for, the difference in the cost of labor?

Mr. KAYSER. That is it.

Mr. GRIGGS. Please show us exactly what it is; that is, put it in your brief.

Mr. KAYSER. I will.

Mr. GRIGGS. Show us the exact difference in the cost of labor here and in Saxony.

Mr. KAYSER. We have a factory there ourselves, so I claim to be thoroughly posted. The gloves that we make there are not silk gloves, however.

Mr. GRIGGS. I should think that you are pretty well off if you manufacture at both ends.

Mr. KAYSER. We make cotton gloves there, not silk.

Mr. GRIGGS. You ought to put a cotton-glove factory in the South, and not in Saxony.

Mr. KAYSER. If you will give us proper working forces there, hands to make them, I would be inclined to do it.

Mr. GRIGGS. You employ cheap labor in Saxony and high labor here?

Mr. KAYSER. Yes.

Mr. GRIGGS. You are not a philanthropist on this question?

Mr. KAYSER. Hardly; we would not want to call ourselves philanthropists. But what we have done, we have given the people of this country a good article which gives satisfaction, as the result showsan increase of 975,000 dozen gloves last year. I doubt whether in any year there has been imported 150,000 dozen silk gloves into this country.

Mr. RANDELL. Do they have a duty on these gloves in Saxony?
Mr. KAYSER. There is a duty on everything in Germany.

Mr. RANDELL. You favor that duty there, do you, for the protection of your industry there?

Mr. KAYSER. No; I do not care at all. We only manufacture those goods for the market here. We do not care for the German market. Mr. RANDELL. You are protected by a protective tariff over there, and you want a protective tariff here; and you manufacture in both places?

Mr. KAYSER. Our manufacture over there has nothing to do with our ideas on the tariff at all. It is simply to give us better facilities for those who handle these goods in this country.

Mr. RANDELL. Suppose the labor cost was more there than here, would you be willing to take off the tariff?

Mr. KAYSER. Yes, certainly; we would want no tariff at all.

Mr. UNDERWOOD. You say that the production of this class of goods in the United States is 975,000 dozen?

Mr. KAYSER. Of course, that is an estimate of the production of my competitors. Our production alone was 480,000 dozen last year. Mr. UNDERWOOD. And that the importations in a normal year will amount to about 10,000 dozen?

Mr. KAYSER. Less than that; that has been exceptional. Long gloves are now worn in enormous quantity. The manufacturers in this country could not supply the whole demand.

Mr. UNDERWOOD. Then the importations are very much less than 1 per cent of the total production?

Mr. KAYSER. Yes, I can say.

Mr. UNDERWOOD. How much duty do these goods pay when they come in?

Mr. KAYSER. Sixty per cent.

Mr. UNDERWOOD. Then you have an industry here upon which the tax amounts to 60 per cent, and the importations are less than 1 per cent. There practically is no revenue paid to the Government, and you think the Government ought to maintain the same prohibitive duty that you have to-day?

Mr. KAYSER. I think so.

Mr. UNDERWOOD. Why should you think so?

Mr. KAYSER. Well, firstly, the tendency of these Saxony manufacturers is to depreciate quality.

Mr. GRIGGS. But you are one of them.

Mr. KAYSER. And for the benefit of the consumer here, he is better off if those goods could not be imported at all. Whatever money they pay for them is thrown away. That is the history.

Mr. UNDERWOOD. Then you are a philanthropist. You want to insure the American consumers against purchases that are bad.

Mr. KAYSER. It has worked that way every time. They can make these goods of much lighter silk and load them in the dye, and instead of getting articles placed before the consumer which are cheaper articles, the consumer gets the worst of it.

Mr. UNDERWOOD. This very large production in this country and very small importation indicates very clearly that foreign manufacturers can not enter the home market at the present rate of duty?

Mr. KAYSER. I would like to explain that to a certain extent. As I say the silk-glove industry was never anything until we took hold of it. I made the article, took out a patent on the finger endsupon silk gloves there is a liability, if the finger ends cut through, to do great damage after one or two wearings-but I took out a patent in 1887 to reenforce the ends, making an article which would wear, and through that succeeded in making an article like these gloves. During the time I had the patent they were barred from importing those goods, and they did not have any other kind of gloves in this country.

Mr. UNDERWOOD. Then you not only want a protection with a prohibitive duty in this country, but you also have your goods protected by a patent?

Mr. KAYSER. The patent has expired.

Mr. UNDERWOOD. Under this present duty, since 1888, you have built up an industry in this country that has now obtained a monopoly in the American market. Is not that so?

Mr. KAYSER. Yes, sir; the industry has monopolized this market to a great extent.

Mr. UNDERWOOD. Don't you think, under those circumstances and the fact that the Government is needing revenue, that this 60 per cent duty ought to be reduced?

Mr. KAYSER. I doubt whether the Government would derive any revenue from that. I want to say that we personally do not have the monopoly; that is, I haven't got it personally. I have a number of competitors.

Mr. UNDERWOOD. But your industry has a monopoly of the American market?

Mr. KAYSER. It has, so far.

Mr. UNDERWOOD. Now, Mr. Kayser, are you doing any exporting of these goods abroad?

Mr. KAYSER. A very small quantity; very insignificant.

Mr. UNDERWOOD. How much do you export?

Mr. KAYSER. I do not believe we exported altogether 500 dozen. Mr. UNDERWOOD. Is that all you have exported in the history of your business?

Mr. KAYSER. Yes, sir.

Mr. UNDERWOOD. Then you are not engaged in the export business in any way?

Mr. KAYSER. No.

Mr. UNDERWOOD. Are any of your competitors exporting this line of goods?

Mr. KAYSER. No.

Mr. BOUTELL. Your gloves are better gloves than the foreign gloves, are they not?

Mr. KAYSER. We try to make them so; to have them better.

Mr. BOUTELL. Very much better?

Mr. KAYSER. Very much better; yes, sir.

Mr. BOUTELL. That would account, would it not, for the fact that you and the American manufacturers substantially control the market?

Mr. KAYSER. That is the sole reason, I believe, and the best proof of that is that when they had no competition, when no silk gloves were made in this country, they never succeeded in selling to any extent, and it is not a large article in Europe.

Mr. BOUTELL. How many employees have you in your factory?
Mr. KAYSER. Altogether we have about 2,800.

Mr. BOUTELL. How many are there engaged in other factories of the same kind in the United States?

Mr. KAYSER. I should say about an equal number.

Mr. BOUTELL. So therefore there are between 5,000 and 6,000 altogether?

Mr. KAYSER. Fully that, and more indirectly in the different operations required which the other manufacturers do not do themselves

that is, sewing the silk, dyeing, and things of that kind. I should say about 7,000 engaged altogether in this industry.

Mr. BOUTELL. In general terms, and round figures, how much capital is there engaged in this industry in this country?

Mr. KAYSER. I should say between $5,000,000 and $6,000,000. The CHAIRMAN. I want to ask a question or two about your patent. How long does it run, or when did it expire?

Mr. KAYSER. It expired in 1904.

The patent was taken out in 1887. The CHAIRMAN. So that does not protect you any longer?

Mr. KAYSER. It protects us no longer.

Mr. GRIGGS. You are in a pretty prosperous condition, are you not? Mr. KAYSER. Yes.

Mr. GRIGGS. Making money?

Mr. KAYSER. I want to state further that our pay roll-
Mr. GRIGGS. I asked you if you are making money?

Mr. KAYSER. We have made money up to now. What we will do in the future we do not know. Things have changed greatly in the last few months, but I think we will always be able to make something. I wish to state that our pay roll for the last year was $1,400,000 in the different factories.

Mr. GRIGGS. What was your gross income?

Mr. KAYSER. Something over four millions and a half, the total sales. Part of this income is particular importations. We import probably three-quarters of a million of those sales, so it is not all from the manufacture.

Mr. GRIGGS. And that makes your pay roll $2,000,000?
Mr. KAYSER. Possibly fully that, if not more.

AMERICAN MAKERS OF SILK GLOVES WISH PRESENT DUTIES MAINTAINED AND SEPARATE CLASSIFICATION GIVEN.

WASHINGTON, D. C., December 16, 1908.

Hon. SERENO E. PAYNE,
Chairman Ways and Means Committee,

Washington, D. C.

SIR: The undersigned manufacturers of silk gloves respectfully submit to your committee the following statement, to be considered in connection with the testimony given by Mr. Julius Kayser, of New York, on December 1, 1908:

Relative to the great manufacturing industries of this country, and also possibly excepting Julius Kayser & Co., the manufacturers engaged in making silk gloves are small and independent manufacturers. These manufacturers are confronted with a very high labor rate. Kindred industries in this country, such as hosiery and underwear, pay much smaller wages than do silk-glove manufacturers.

Without further thought we can not agree with Mr. Kayser that the present ad valorem duty of 60 per cent should be changed to a specific rate. We are building up an industry that actually does pay high wages, and an industry which is growing and has grown, in the past three years, enormously in volume. The price of our raw silk is, in a measure, fixed the world over (it is true that the European manufacturer has a great advantage in the throwing or