PARAGRAPH 15-COAL-TAR DYES. Mr. HILL. Then there would be no revenue; from the standpoint of revenue there would be no gain in this bill by putting 10 per cent on the intermediate coal-tar products? Mr. SCHOELLKOPF. I would not say that absolutely, because some are used outside of colors. Mr. HILL. So far as your industry is concerned there would be no gain in revenue? Mr. SCHOELLKOPF. No. Mr. HILL. It would be necessary, then, to increase the importations, the quantity of importations of the finished product, enough to make up for the 5 per cent loss in duty on the finished product? Do you not think that would be done? Mr. SCHOELLKOPF. No. Mr. HULL. Did you reduce the price of labor when these other reductions were made in the present law? Mr. HILL. There was no reduction. Mr. HULL. I misunderstood the witness, then. Mr. KITCHIN. There was a reduction by the Dingley bill from the act of 1883 and by the act of 1897, was there not? Mr. SCHOELLKOPF. There was a reduction in 1883. Mr. KITCHIN. Was the reduction in 1883 greater than in 1897? Mr. SCHOELLKOPF. We were hardly started in 1883. Mr. KITCHIN. There were some industries in 1883, were there not? Mr. SCHOELLKOPF. They did not amount to very much in those days. Mr. KITCHIN. If there were no industries, what did they want to reduce the tariff for? Mr. SCHOELLKOPF. They wanted to get goods in cheaper, I presume. Mr. KITCHIN. Do I understand that they reduced the wages after 1883, after reducing the tariff? Mr. SCHOELLKOPF. We can not reduce wages. Mr. KITCHIN. In fact, wages have been increased since the tariff has been decreased, have they not? Mr. SCHOELLKOPF. Yes. Mr. KITCHIN. You told Mr. Hill you could not make any money with 183 per cent tariff on the finished product? Mr. SCHOELLKOPF. We are making very little now. Mr. KITCHIN. Very little now on 30 per cent? Mr. SCHOELLKOPF. Yes. Mr. KITCHIN. How much do you think would be a fair rate, so that the industry could make as much profit as the industry would like to make? Mr. SCHOELLKOPF. It is not a question of what we would like to make. It is a question of what is fair. Mr. KITCHIN. Well, reasonable? Mr. SCHOELLKOPF. I think 35 per cent. Mr. SCHOELLKOPF. We are not asking for that, you understand, but that would be the fair thing. Mr. KITCHIN. You think 35 per cent would satisfy you? PARAGRAPH 15-COAL-TAR DYES. Mr. KITCHIN. How many wage earners are employed in this industry? Mr. SCHOELLKOPF. Altogether, probably six or seven hundred. Mr. SCHOELLKOPF. Probably six or seven hundred, I presume, altogether. Mr. KITCHIN. You mean that is for your own plant? Mr. SCHOELLKOPF. No; our plant has only about 300. Mr. KITCHIN. The whole industry employs six or seven hundred? Mr. SCHOELLKOPF. I imagine so. I do not know how many the other plants have. Mr. KITCHIN. That is, in the entire country? Mr. SCHOELLKOPF. That is directly employed in the industry. Of course, indirectly, there are more employed. Mr. KITCHIN. I understand. What is the average amount of wages? Mr. SCHOELLKOPF. Well, to our ordinary labor we pay about $2 a day. Mr. KITCHIN. $2 a day? Mr. SCHOELLKOPF. Yes; then, of course, it goes up; to skilled labor we pay $3 and more. We employ quite a few mechanics and pipe fitters, and other skilled hands. Mr. KITCHIN. Do you work any women? Mr. SCHOELLKOPF. No. Mr. KITCHIN. How many hours a day do they work? Mr. SCHOELLKOPF. Nine to ten hours. Mr. KITCHIN. Do you work any children under 16 years of age? Mr. SCHOELLKOPF. No, sir. Mr. KITCHIN. Do you know about how much yearly the imports of this color are? Mr. SCHOELLKOPF. Yes. Mr. KITCHIN. How much? Mr. SCHOELLKOPF. About six millions. Mr. KITCHIN. How much? Mr. SCHOELLKOPF. About six millions. Mr. LONGWORTH. Do you know what wages are paid in Germany for the same class of labor? Mr. SCHOELLKOPF. They pay about 3 marks. Mr. LONGWORTH. About 80 cents? Mr. SCHOELLKOPF. It is about 80 to 90 cents. Mr. LONGWORTH. I want to ask you this question: Is your labor more efficient than the labor in Germany? Mr. SCHOELLKOPF. No. Mr. LONGWORTH. It is not more efficient? Mr. SCHOELLKOPF. Not in our industry. Mr. LONGWORTH. Man for man, your labor is not more efficient than corresponding labor in Germany? Mr. SCHOELLKOPF. No, sir. Mr. LONGWORTH. But your wages are more than they are in Germany? Mr. SCHOELLKOPF. Yes, sir. If we could make the difference in our wages we would be satisfied. PARAGRAPH 15-COAL-TAR DYES. Mr. JAMES. Is there any tariff on these articles in Germany? Mr. JAMES. They are admitted free? Mr. SCHOELLKOPF. But there is a tariff in France and in Russia. There is no tariff in Germany. Mr. JAMES. Speak a little louder. Mr. SCHOELLKOPF. There is no tariff in Germany, but there is in France and Russia. Mr. KITCHIN. Is not the tariff in Germany on the finished product and no tariff on the raw materials? Mr. SCHOELLKOPF. They do not need any tariff. They would have one quickly enough if they needed one. Mr. JAMES. Why not? Mr. SCHOELLKOPF. Because they put tariffs on. I know of other goods that are imported into Germany, and when they found the domestic manufacturers could not compete they put Mr. JAMES. I say, why is it they do not need any. do not. a tariff on. You said they Mr. SCHOELLKOPF. Because they can produce goods cheaper than we can here. Mr. LONGWORTH. Is not that because their labor in chemicals, in a general way, is more efficient than in this country? Mr. SCHOELLKOPF. I would not say that; but their labor is cheaper. Where we pay $200,000 they pay $100,000. Mr. KITCHIN. Is not that same labor, so far as dollars and cents are concerned, cheaper in every other single industry than it is here? Mr. SCHOELLKOPF. How is that? Mr. KITCHIN. Is not the labor in Germany in every other industry cheaper, as far as dollars and cents are concerned, or as far as the amount they pay per day is concerned, than it is in this country? Mr. SCHOELLKOPF. Labor is cheaper, certainly. Mr. KITCHIN. Yet the German tariff is the highest of all foreign tariffs, is it not, on practically everything? Mr. SCHOELLKOPF. That may be on some articles. On some things possibly we have an advantage. Take leather, for instanceMr. KITCHIN. Take what? Mr. SCHOELLKOPF. Leather. I know my father started to import leather in 1873 into Germany, until they put the tariff so high that he could not import a cent's worth any more. Mr. KITCHIN. I wish to say that Germany has a tariff on dyes, but none on the raw material. The CHAIRMAN. Is there any other difference in cost between mill and your competitors in Germany, except the labor cost? your Mr. SCHOELLKOPF. Well, there is a difference in the cost of mate rial. Our materials, if we imported them free, would cost pretty nearly 10 per cent more than they do on the other side. The CHAIRMAN. Do you mean on account of the tax? Mr. SCHOELLKOPF. On account of the freight and charges of one kind and another. The CHAIRMAN. They pay freight charges on the other side that more than equalize the freight rate on your raw material? PARAGRAPH 15-COAL-TAR DYES. Mr. SCHOELLKOPF. Yes; but it is relatively small. You see the finished product costs more. The freight on a 30-cent article is not much more, if anything more, than freight on a 5-cent article, while on a 5-cent article it would amount to 10 per cent and on a 30-cent article it would only amount to 2 or 3 per cent. The CHAIRMAN. How much difference would there be in the cost on account of the freight, do you think? Mr. SCHOELLKOPF. On that finished product? The CHAIRMAN. Yes. Assuming that there is a difference in the freight rates in bringing them over, how large a percentage on your total output, your total product, would that amount to? Mr. SCHOELLKOPF. Well, 60 per cent of our product is raw material, and that costs us 10 per cent to import; it would mean that ours would cost us 66 per cent where it would only cost them 60 per cent on the other side. The CHAIRMAN. About 6 per cent difference? Mr. SCHOELLKOPF. Ten per cent. The CHAIRMAN. Do you think that difference is as much as 10 per cent? Mr. SCHOELLKOPF. Yes. The CHAIRMAN. The main difference in the cost, then, is in reference to getting your raw materials here, your freight rates, etc., and your labor cost? Mr. SCHOELLKOPF. Yes; and not only that. Of course, our domestic products are more expensive. Take our acids. They cost a great deal more here than they do on the other side. Our buildings cost a good deal more than they do on the other side. Our repairs cost double what they do on the other side, and there are quite a lot of repairs in the chemical industry in general. The CHAIRMAN. That is only a small percentage of your total output, is it not? Mr. SCHOELLKOPF. No; it is quite an item. I have set it all out in that brief. The CHAIRMAN. Let me ask you one question there: You said the difference in the labor cost is about as one is to two; that is, you pay pay twice as much as they do on the other side? Mr. SCHOELLKOPF. Yes; fully. The CHAIRMAN. And your total labor cost on that product is only 20 per cent of the value of the product? Mr. SCHOELLKOPF. Yes. The CHAIRMAN. Then 10 per cent of the value of the product would cover the difference in the labor cost? Mr. SCHOELLKOPF. Certainly. The CHAIRMAN. So that if we add an 18 per cent net tariff to you, there is a margin of 8 per cent above your difference in labor cost to cover these other charges, is there not? Mr. SCHOELLKOPF. Yes; I know; but they are more than made up by the other increased expenses. The CHAIRMAN. Well, we are not very far wrong in equalizing the difference in cost in that 18 per cent, are we? PARAGRAPH 15-COAL-TAR DYES. Mr. SCHOELLKOPF. Yes, you are, because I showed just a moment ago that if these materials that we import would come in free they would cost us about 10 per cent more than they pay on the other side. There is more than 18 per cent right there. The CHAIRMAN. What is that? Mr. SCHOELLKOPF. If we import the raw material, it costs us about 10 per cent more to import it on account of the charges. The CHAIRMAN. If you have 18 per cent above the difference in the raw material, after you equalize the duty on the raw material, in subtracting that from the duty you have on the finished product you still have 18 per cent net profit to you under this bill that Mr. Hill was questioning you about? Mr. SCHOELLKOPF. No, Mr. Chairman, you are mistaken there. That is so theoretically; but, of course, we pay in addition to the 10 per cent that you intend to impose on the raw material 10 per cent in charges, so that we are really paying 20 per cent, under a law like that, more for our raw materials than they pay on the other side. I say, if it comes in free, it would cost us 10 per cent to import it. Now, if you put another 10 per cent on, it would be 20 per cent; then 10 per cent increase in the cost of labor would mean 30 per cent right there. The CHAIRMAN. I realize that. But if you subtract the duty placed on the raw materials from the duty we gave you on the finished product, that would leave you with a net duty of about 18 per cent. Mr. SCHOELLKOPF. No. You have 10 per cent on the raw materials and 25 per cent on the colors. The CHAIRMAN. You just a moment ago stated to Mr. Hill that his statement to that effect was correct. Mr. SCHOELLKOPF. That is under the present law. The CHAIRMAN. He did not ask you about the present law; he asked you about the proposed bill that came before Congress the last time, and you stated, in answer to his question, that there was an 18 per cent difference, which is the fact. If you will take the figures and estimate them, you will find that there is a difference of 18 per cent between your raw material and your finished product. You agreed to that when Mr. Hill asked you the question. Now, if you have an 18 per cent difference in the net protection to you, incidental or otherwise, and your 10 per cent equalizes your difference in labor cost and your cost of transportation and assembling these products, which according to your statement is 10 per cent, this duty must very closely equalize your difference in cost. Mr. LONGWORTH. I did not understand him to say that 10 per cent would equalize the difference in cost. Mr. KITCHIN. Do you mean to say that 20 per cent of the finished product represents labor? Mr. LONGWORTH. He said 10 per cent would equalize only the difference in labor cost. The CHAIRMAN. He said that the total labor cost was 20 per cent of the finished product. He said the difference in labor cost was about one as to two, and that he paid $200,000 and they paid $100,000. It is self-evident that if that is the case 10 per cent would equalize the difference in labor cost-10 per cent of the finished product would |