PARAGRAPH 86-CEMENT. a ship was starting from Hamburg to get a cargo of cotton, that ship figures on the round trip. If the rates outbound on cotton for Hamburg are good, that ship can afford to go over in ballast. If at the time she is starting in ballast somebody offers her a cargo of cement, which loads and unloads itself, the ship will carry that. That is the answer as to the 100 pounds from the other side. On the other hand, let us take a ship in the regular trading companies, going to Brazil or South Africa-it has a cargo of bulky things such as I say, automobiles, agricultural implements, and so forth, which are bulky, but do not weigh heavily, and that ship wants ballast. That ship in turn will pick up a cargo of cement for the same reason as did the Hamburg ship. And while 100 pounds is the same, it has a lot of trade difference. Mr. KITCHIN. I see. But you American cement producers seem to strike it lucky. You are more lucky about these ships than these foreigners, because you exported 40 times more than they imported. Mr. LESLEY. That is quite right. Mr. KITCHIN. So that you really get an advantage in imports over the foreigners. Of course you get these advantageous ships. Mr. LESLEY. We do, and I hope to see the exports grow. I am very frank about it. Mr. KITCHIN. You do not really sell this cement cheaper to foreigners than you do to our own home folks? Mr. LESLEY. Not to my knowledge. I do not believe it could be sold lower than it was sold last year. Mr. KITCHIN. Is it not a fact that you ship to Canada; that you export a great deal to Canada? Mr. LESLEY. Not so much now. We have gone there in years gone by. Mr. KITCHIN. You have shipped to Canada in competition with England, which has a third preferential duty rate over us. Mr. LESLEY. That is true. Mr. KITCHIN. You overcome that 33 tariff preferential in favor of England, and then undersell Engiand in Canada? Mr. LESLEY. That is true. Mr. KITCHIN. If you can do that, what fear do you have of England or Germany or any other country shipping across the water this heavy article and coming into competition with you and running you out of business here in your own home market if we put cement on the free list? Mr. LESLEY. The point I want to meet you on is this: It is a great big geographical question. Let us imagine a man out at Winnipeg wanting cement. There are works in Iowa and works out in Spokane and in that territory. Those people have a great deal lower rate into Winnipeg. As the price to the consumer is the mill price plus the freight, he would get that cheaper from America, plus the duty, at a lower rate than he would get cement coming from England, which would come into Quebec or Montreal and have to pay the rates across the continent. Mr. KITCHIN. But we are exporting cement to eastern Canada. Would the advantage be in our favor to the extent of the freight and also to the extent of this reduction in the tariff rates which England has over us? PARAGRAPH 86-CEMENT. Mr. LESLEY. In many cases Mr. KITCHIN (interposing). I mean in cement cases. Mr. LESLEY. In cement, yes; that is what I am talking about. In many cases the rate on a barrel of cement to somewhere in many parts of our country represents, taking a dollar as the unit, a dollar for cement and a dollar for freight; the freight rates are so high on this heavy commodity that the most of it is freight. For that reason these mills have been located in different centers. Mr. KITCHIN. Do you know what the tariff is on cement in Canada? Mr. LESLEY. I think it was reduced lately. My recollection is that it is about 40 cents. Mr. HARRISON. Was it not recently entirely suspended? Mr. LESLEY. No; I think it was a reduction owing to a shortage. Mr. KITCHIN. The tariff rate is higher in Canada than here on cement, is it not? Mr. LESLEY. Oh, yes. Mr. KITCHIN. And yet you can sell to her consumers there, paying a higher tariff rate than we have, selling in competition with England, which has a 333 per cent preferential in her favor-actually underselling England in Canada. Do you really think you will need any protective tariff to protect you against England coming here in your own territory? Mr. LESLEY. I would answer you this wise Mr. KITCHIN (interposing). Will you answer it yes or no? Mr. LESLEY. I will answer you no and then I will say yes, on the seaboard. I said at the beginning of my remarks I did not think the interior of our country was threatened by this importation. Mr. KITCHIN. All right. Mr. LESLEY. And as to this Canadian importation, if you will pardon me for a minute, where we have been able to get cement into Canada has all been far off from the seaboard and in the interior of the continent. I want to meet you perfectly fairly. In the interior I think you are dead right; I do not want to qualify it. But on the seaboard I think conditions are different. Mr. KITCHIN. All right. On the seaboard do you not sell, out of every $100, more than $99 of cement which is used on the seaboard; $99 out of every $100 worth of cement that is consumed on the seaboard? Mr. LESLEY. Yes; with reference to the north, but not with reference to the south. Mr. KITCHIN. The whole United States did not consume more than $125,000 worth of cement from the foreigners in 1912. Mr. LESLEY. If you will look at this table you will see in a panic year, when times were hard, as in 1903-— Mr. KITCHIN (interposing). How about 1912? I have the figures here. Mr. LESLEY. You have some very good figures. I am glad to talk it over with you. Mr. KITCHIN. The American Cement Association gave you your figures? Mr. LESLEY. No. All our figures are official, from Government reports. I did not deem it fair to take any figures which were not official in coming before you. PARAGRAPH 86-CEMENT. Mr. SHACKLEFORD. You say the foreigner makes it cheaper than you. Suppose you have no freight to pay; how could you sell it? Mr. LESLEY. I think on this heavy commodity it is absolutely a question of freight. Mr. SHACKLEFORD. I say, suppose you have your freight for nothing. If it be true they could manufacture cheaper than you could do it, how did you sell your products in foreign countries in competition with the foreign products that are made cheaper than you make yours? Mr. LESLEY. The answer to that would be this: We had a particular freight rate at this particular point, and their freight rate at that particular point might be another one entirely. I think it is purely a freight question. Mr. KITCHIN. Canada used to be one of our competitors? Is it any longer a competitor in the American market? Mr. LESLEY. I do not think so, except right up north, in the Lake Champlain district. Mr. KITCHIN. Not much now, probably, but you made it so cheap you ran Canada out of business. Last year she only exported here about three or four hundred dollars' worth. Mr. LESLEY. I do not think she had any business to come over the line here. Mr. KITCHIN. To be accurate, she only exported into this country, in competition with your $66,000,000 worth of cement last year, $261 worth; and up to three or four years ago she used to export here several thousand dollars' worth. Mr. LESLEY. Yes; but it was a drop Mr. KITCHIN (interposing). And you ran her out of the American market. Mr. LESLEY. It is but a drop in the bucket. Mr. KITCHIN. That is right; I do not blame you. Mr. LESLEY. The point I am trying to argue is that in bad times, in panicky years, then this is used as a dumping ground for foreign cement. And with the advantages they have in cargoes in ballast, at a great many seaports, I believe it would be a serious injury to the industry. But I do not want to disguise the fact it is a pretty lusty industry; it has grown and is growing. But a good many have gone broke in connection with it, myself included. Mr. KITCHIN. Some people would grow poor in the cement industry if they ran up against American competition, with a tariff of $2 instead of 20 cents. Mr. LESLEY. I am the oldest manufacturer in the business and I thought I knew my business; but I could not compete with the low prices that have been made for the last several years. Mr. KITCHIN. You represent this bankrupt concern? Mr. LESLEY. Yes. Mr. KITCHIN. And this association of successful concerns got the bankrupt concern to come here to represent them? Mr. LESLEY. I do not think that is a fair argument. Mr. KITCHIN. I am asking you. Mr. LESLEY. The answer to that is that I had been before this committee previously, and they felt that, knowing a number of the gentlemen here and having appeared before, I might be more familiar PARAGRAPH 86-CEMENT. with the subject. And I really felt complimented in being asked to appear, in the face of my adversity. Mr. KITCHIN. But the truth about the business here is that this rate of 8 cents per 100 pounds did not have anything to do with your company going into bankruptcy? Mr. LESLEY. I would not say that. I want to be fair. I think it is American competition which has had a great deal to do with it. I think it would be even more severe if foreign cement were permitted to come in as ballast at seaport points. Mr. RAINEY. Did the United States buy all the cement for the Gatun Dam, on the Panama Canal, from American manufacturers? Mr. LESLEY. Practically all. We supplied some. The balance was supplied by the Atlas Cement Co. Mr. RAINEY. Operating along the Mississippi River? Mr. LESLEY. No; operating at Northampton. Mr. PALMER. It comes from my district. Mr. RAINEY. Was any supplied by the company at Hannibal, Mo.? Mr. LESLEY. I do not think so. They are connected with the same company. Mr. RAINEY. Did the Government get machinery from foreign companies? Mr. LESLEY. Yes, sir; very much cheaper. I think the best illustration of the sort of rates that have been made in this industry is exemplified in that contract, and it absolutely answers any question of collusion. On the basis of bids being for 4,500,000 bushels, the difference between the bid of the company that got the contract and the next lowest American bidder was about $1,000,000. So there was quite a big room for guessing, because on about 4,000,000 bushels the difference was $1,000,000. Mr. PALMER. Were there foreign bidders on that contract? Mr. LESLEY. I think a few. Mr. PALMER. Were there many American bidders? Mr. LESLEY. My recollection is there were four or five American bidders, and this big difference existed. Mr. PALMER. The contract was originally for four and a half million barrels, and was afterwards increased to about 6,000,000 barrels ? Mr. LESLEY. Yes. Mr. PALMER. From the same company? Mr. LESLEY. Yes. Mr. PALMER. What was the price per barrel under that contract? Mr. LESLEY. I can only give you newspaper reports of the contract. It was somewhere about 65 cents at the mill. Mr. PALMER. What is the present prevailing price for the cement? Mr. LESLEY. The price last year was around 55 to 60. It has now gone up to 80. Mr. PALMER. What was the prevailing price at the time the contract was made with the Government? Mr. LESLEY. The prevailing price then was about 80 cents. Mr. LESLEY. Yes. Mr. PALMER. You state that importations increased in panicky PARAGRAPH 86-CEMENT. Mr. LESLEY. Yes. Mr. PALMER. What year in recent times illustrates that increase in importations? Mr. LESLEY. I think in 1903 there was quite a large importation, and that it has continued off and on. Mr. PALMER. How large an importation was there in 1903 ? Mr. LESLEY. My recollection is there were about 3,000,000 barrels. Mr. PALMER. Do you call that a large importation? Mr. LESLEY. It was a large importation in proportion to the output at that time. It was about ten or eleven millions, something of that kind, as I recollect. Mr. PALMER. In 1905 the output was about 26,000,000 as against imports of about 1,000,000. Mr. LESLEY. Yes; but things began to mend a little then. Mr PALMER. But they have been coming down steadily since 1905 ? Mr. LESLEY. Absolutely. Mr. PALMER. The present importation amounted to something over $200,000, coming from where? Mr. LESLEY. I would say as a general proposition that the Germans supplied the largest quantity at the present time. Mr. PALMER. Where does it go to? Mr. LESLEY. It must necessarily, except in special cases, go to seaports like Savannah or Charleston, or some of the ports which have outbound cargoes. Some may go to the Pacific coast. Mr. PALMER. There is nothing special about a foreign cement which would take it inland, over the American cement? Cement is cement, in other words. I Mr. LESLEY. I should say that is so, except in very rare cases. know of some German brewers who a few years ago used a certain German brand; they still adhere to their first love, and we can not convince them they are wrong. Mr. PALMER. Does that condition exist inland and on the seaboard? Mr. LESLEY. Inland to some extent, but the occasions are exceptional. Mr. PALMER. What is the prevailing foreign price in cement to-day? Mr. LESLEY. I think in Germany it is between 5 and 6 marks. I would not like to give you the present quotation. Their prices to-day are based on the wooden package, and ours are based on the bag package. We base it really on bulk. Mr. PALMER. Their prices are higher than ours, as a rule. Mr. LESLEY. I think the same conditions prevail in the cement industry as in the steel industry. The trade has had a very good year and prices are higher. Mr. PALMER. Has that not been generally true for four or five years in the cement business? Mr. LESLEY. No. Some years ago we could buy it cheaper there than here. Mr. PALMER. That was in 1903. Mr. LESLEY. No; since then. I think along in 1907 and 1908 we could buy it cheaper. Things were very hard over there and there was a great surplus. |