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Mr. HARRISON. What are the materials of manufacture that you use in bleaching your sponges ?
Mr. Hart. Permanganate of potash, hydrochloride, muriatic acid, and sal soda.
Mr. HARRISON. Of course, you realize in trying to arrange a tariff the question would arise, in putting sponges on the free list, whether all the materials of manufacture were also on the free list?
Mr. Hart. Yes, sir; some are and some are not, I presume; but if some of the materials are not paying a duty we think that would be all the more reason why the chemically bleached should pay a higher duty than the raw material. Mr. HARRISON. But it does pay a duty.
Mr. Hart. Yes; but the raw material also pays a duty at the same rate, gentlemen, as chemically bleached. Why should not the raw material have a benefit over the chemically bleached ?
Mr. SHACKLEFORD. I think there has been a misreading of that section of the law, and I think that the text of the law will corroborate the witness entirely. We have in all the schedules a saving clause covering things not otherwise provided for, but I think bleached sponges are provided for, and that applies only to manufactured sponges or articles of which sponge constitutes the component material of chief value. I think the text of the law is in accordance with what the witness has stated.
The CHAIRMAN. I do not think there is any provision with reference to bleached sponges in the tariff.
Mr. HART. I do not think it mentions raw materials
The CHAIRMAN (interposing). There is no reference to bleached sponges.
Mr. Hart. The bleached sporges and the raw material come in at the same rate of duty. That is not fair.
Mr. KITCHIN. The trade considers a bleached sponge a manufactured sponge, but the Treasury Department does not so consider it.
Mr. Hart. It only provides for sponges. Consequently bleached sponges and raw material come in at one and the same duty, which is not fair. We want to expand the manufacturing end of it and to be able to go into foreign countries and to capture their trade, which we can not do at present. It cost us $5,000 last year to send a man to Australia to try to sell manufactured products, just to find out that we were too high. I wanted to put a letter in as a matter of record, but my attorney thought it would be of no material importance. We had a letter from one of our customers, telling us that our prices were higher than the prices of our competitors. The statement was made verbally to our Australian agent, “Oh, well, your firm has to pay a duty of 20 per cent on sponges, and there is that much difference. We can, of course, buy cheaper in England, and we do not have to pay that duty on the manufactured product. If we did not have to pay that duty, Jack would be as good as his master. We should be given an opportunity to expand our manufacturing industry; we should be permitted to get our raw materials free, and that would enable us to manufacture sponges cheaper and employ a larger number of men, and we would be able to pay the same rate of wages as we do at the present time. If we were enabled to increase by two or three times our manufacturing business it would be far more
important, gentlemen, than the forty or fifty thousand dollars in duty that would be collected.
Look at the small contracted business that it is; $700,000 worth in in Florida and $400,000 worth imported; $1,100,000 worth of sponges. Are you not suprised at the smallness of our business? Can't you do something to help us to increase it? Are we to remain small people all the time? There are only about 13 real importers in the business, yet there are about 40 firms, that is to say, ordinary firms, who share in that small volume of business. At the present time, gentlemen, we have a representative in Japan. We are spending our money trying to get the export business. We have sent a man to South America. He has been down there for two years, and we are in hopes and are spending a lot of money that we can make a success of it. If we do not make a success of it the first year, we will make a success of it the second year, and if we do not make a success of it the second year we are still going to try until we capture it. And we are going to do it if you will give us the necessary assistance.
Mr. SHACKLEFORD. Is it your view that the system that makes the cost of manufacture higher in the United States then elsewhere tends to limit our foreign trade?
Mr. Hart. The duty is the thing that is the drawback to us.
Mr. SHACKLEFORD. I say, the levying of the duty in this country is the thing that tends to increase the cost of manufacture, and do you think that limits your foreign trade?
Mr. Hart. That is true. It entirely tends to prevent our successfully competing in price with our British competitors, who have in their control
Mr. SHACKLEFORD. The manufacturer would do just as well if he had a higher profit on his American trade ?
Mr. Hart. No; but the American manufacturers would increase their home business as well as the export, because the American material is so very short of the supply that, if we can reduce the cost of the imported goods, we will bring them within reach of the populace in general.
Mr. James. Do you think to take this tariff off the raw material would cheapen the product to the consumer of the finished product?
Mr. Hart. Absolutely so.
Mr. Hart. Absolutely so. If we had raw material free and 20 per cent duty on chemically bleached sponges, it would expand our business.
Mr. James. And expand the market ?
Mr. Hart. Expand the market. I think it would tend to increase and expand the manufactures to a great extent and put us in touch with the Australian, South American, China, and Japan trades.
Mr. James. This is a protective tariff, then, that does not protect?
Mr. Hart. Absolutely a protective tariff, which retards our expansion, the expansion of our manufacturing industry, and it is of quite serious importance to us.
Mr. James. By reason of the fact that there is a tarff on the raw material?
Mr. Hart. There is at the present time a tariff on the raw material and on the manufactured material at one and the same rate.
PARAGRAPH 79 SPONGES.
Mr. LONGWORTH. You say that if sponges are put on the free list you will reduce the price 20 per cent ?
Mr. HART. Yes.
Mr. LONGWORTH. Then, why will you be better off than you are now?
Mr. Hart. As a firm, we do not expect to reap the benefit from the 20 per cent, except by the expansion of our trade. We will not make any more.
Mr. LONGWORTH. You make the positive statement in your brief that you have to add 20 per cent to the price because of the tariff cost.
Mr. HART. Yes.
Mr. LongwORTH. You then say that if the tariff is taken off you will immediately reduce your price 20 per cent ?
Mr. HART. Yes.
Mr. Hart. In the first place, the public at large will receive the greater benefit from the reduction in price.
Mr. LONGWORTH. No; but you pay 20 per cent more by virtue of the tariff, you say, and you say the moment the tariff is taken off you will reduce your price 20 per cent.
Mr. HART. Yes.
Mr. Hart. We are better off by reason of the expansion of our business. We hope to double and treble our business by reason of having raw material free, to enable us to manufacture and sell at a reduction of 20 per cent. We hope that will be the means of our doubling or threefolding the present volume of the business that we already have; and, of course, naturally, the same applies to all other importers who are with me in this movement.
Mr. LONGWORTH. I can not see how there is any difference whether you add 20 per cent to your original cost or take it off the price.
Mr. Hart. If we are able to take it off our raw material, our manufactured product will cost us that much less. Consequently, we can go into the foreign markets and sell to foreign countries 20 per cent cheaper than we are to-day. Must not that be of benefit to this country?
Mr. LONGWORTH. I can not see how it is of benefit to you.
Mr. Hart. We are unable to get into the foreign markets now, and is it of no benefit to expand the trade of these countries?
Mr. LONGWORTH. I am talking about your business.
Mr. Hart. We are looking to the business as a whole, and not ourselves personally.
Mr. LONGWORTH. I thought you were.
Mr. Hart. With this exception: We do look in the long run to expand our business to such an extent as to get the benefit of it. We are not looking to the benefit of the general public in the long run alone.
Mr. LONGWORTH. Yes.
Mr. Hart. But we do not think that will come before 6 or 9 or 12 months. It will take some time to feel the benefit of it, whereas the public at large will receive the immediate benefit of this reduction.
Mr. Hill. Under the Dingley law, the duty was 40 per cent on the manufactured product and 20 per cent on the raw material.
PARAGRAPH 79-SPONGES. Mr. Hart. I beg your pardon.
Mr. Hill. I say, under the Dingley law the duty on the finished product was 40 per cent and on the raw product 20 per cent, and the duty was reduced by the Payne bill to 30 and 20 per cent. What is the objection you have in regard to the raw material, where there is no change from 20 per cent ?
Mr. Hart. We have not been able to expand our export business, nor to increase our manufacturing business by it.
Mr. Hill. But what you want now is the duty taken off entirely from the raw material ?
Mr. Hart. Yes; to enable us to expand the manufacturing end. Mr. Hill. That is really an increase in duty of 20 per cent,
you leave the manufactured product the same.
Mr. Hart. But we are going to protect ourselves in this country. Mr. Hill. On the finished product, and raw material, too.
Mr. Hart. We are going to manufacture the finished material ourselves and give labor a chance to make many times more than at present. We will increase the amount of wages we are to pay and will reap the benefit of it in the long run through the expansion and doubling of our business, besides giving the general public at large the benefit.
Mr. LONGWORTH. How many do you employ now!
Mr. LONGWORTH. How long do you work them; how many hours a day do they work?
Mr. Hart. They work from 8.30 in the morning until 5.30 in the afternoon.
Mr. LONGWORTH. Nine hours.
Mr. Hill. Do you produce the manufactures of sponges, or do you manufacture a sponge by bleaching it, etc.?
Mr. Hart. We manufacture a sponge by bleaching, trimming it, and assorting it, casing it, and sending out salesmen to sell the sponges.
Mr. Hill. Then your completed product comes in at 20 per cent?
Mr. Hart. The manufactured product comes in at a rate of 20 per cent, and the raw material comes in at the same rate.
Mr. Hill. This bill which passed the House at the last session proposed to reduce your raw-material rate to 15 per cent, but left the
duty on your finished product at 20 per cent, making a margin of 5 per cent as against the Payne bill of 12 per cent. .
Mr. Hart. A margin of 5 per cent. We would just as leave the Government put the entire duty of 20 per cent on.
Mr. Hill. Why should not the duty be taken off both?
Mr. Hart. We have no objection whatever to having it taken off both the raw material and the manufactured material. Then Jack is as good as his master as against England, and we in the United States would be perfectly able to take care of ourselves as against the English salesman.
Mr. James. You say you just employ 18 men. Then this is really an infant industry.
Mr. Hart. The whole industry is an infant one, from the standpoint of size, and from the number of years it has been in existence, and it is for you gentlemen to help to expand it.
Mr. SHACKLEFORD. These tariff rates are levied for two purposes one is to get revenue and the other is to protect the laboring man.
Mr. HART. Yes, sir.
Mr. Hart. Yes, sir; I might remind you that Mr. Longworth did not ask me the number of men employed as a whole, because that question I could not correctly answer.
Mr. SHACKLEFORD. The gentleman from Ohio, Mr. Longworth, seemed to ridicule the fact that you employed only 18.
Mr. HART. I did not take it as such.
Mr. LONGWORTH. I am sympathizing with his ambition to expand to 36.
Mr. SHACKLEFORD. I say this tariff is levied for the benefit of the laboring men, even if there are only 18 of them.
Mr. HART. But the revenue is too small to be considered as against the laboring man.
Mr. JAMES. How many firms are there engaged in this same business?
Mr. Hart. I am speaking for 95 per cent of the importers in the United States.
Mr. JAMES. How many are engaged in this same business besides
Mr. Hart. That we recognize. There are a good many smaller concerns also who are, of course, entitled to the same consideration, but I figure only the general average of firms with which we come into fair competition.
Mr. JAMES. How many men are engaged in this work in the United States ?
Mr. Hart. That I could not exactly say, because, of course, I have not been permitted to go into our competitors' factories. There are six firms that certainly employ as many nen as we do and one firm that probably employs more than we do, but there are more firms than that. They employ a certain number of men. There are two or three hundred men actually employed. It is a small, inconsider