PARAGRAPH 93. PARAGRAPHS 92-94-POTTERY. China, porcelain, parian, bisque, earthen, stone, and crockery ware, including clock cases with or without movements, pill tiles, plaques, ornaments, toys, charms, vases, statues, statuettes, mugs, cups, steins, and lamps, all the foregoing wholly or in chief value of such ware; painted, colored, tinted, stained, enameled, gilded, printed, or ornamented or decorated in any manner; and manufactures in chief value of such ware not specially provided for in this section, sixty per centum ad valorem. PARAGRAPH 94. China, porcelain, parian, bisque, earthen, stone and crockery ware, plain white, plain brown, including clock cases with or without movements, pill tiles, plaques, ornaments, toys, charms, vases, statues, statuettes, mugs, cups, steins, and lamps, all the foregoing wholly or in chief value of such ware, not painted, colored, tinted, stained, enameled, gilded, printed, or ornamented or decorated in any manner; and manufactures in chief value of such ware not specially provided for in this section, fifty-five per centum ad valorem. STATEMENT OF W. S. PITCAIRN, IMPORTER OF CHINA AND EARTHEN WARE, NEW YORK CITY. The CHAIRMAN. The next speaker on the list is Mr. William S. Pitcairn. To which paragraph do you address yourself, Mr. Pitcairn? I represent the importers of English china and earthen ware in the city of New York. Earthenware with the present duty of 55 per cent and 60 per cent is one of the highest-protected industries on which ad valorem rates are imposed. Under the present tariff American earthenware is protected by a nominal duty of 55 per cent on the white and 60 per cent on the decorated ware, which does not represent the full burden levied upon this commodity. The exorbitant character of the present tariff on earthenware can be best illustrated by a comparison of the selling prices of the English and domestic products. The comparison is simplified by the fact that the American factories adopted the English sterling scale at an established ratio of $8 per pound. In the illustrations which I shall give quotations are those of the best makers in each country, standard brands of ware, in usual wholesale quantities. The figures represent actual transactions at current prices in 1912. I wish to submit to you, gentlemen, a plate manufactured by Johnson Bros., of England, white granite, a cominon everyday white ware that goes into use by millions of people. I also offer in comparison a plate of Knowles, Taylor & Knowles, of the United States, white ware, and sold to the same class of con sumers. The landed price of Johnson Bros.' product at the port of entry represents for a 100-piece dinner set, which is what you have been considering, $4.80. The selling cost, without a cent of profit, is $4.80 on the dock. The selling price of the Knowles, Taylor & Knowles product, a similar class of ware, is $3.36 per set. PARAGRAPHS 92-94-POTTERY. I also offer for your consideration a sample of a product of another prominent English manufacture, this plate being white and gold, the class of decoration that is very popular at the present time. This costs, duty included, landed at a port of entry like New York or similar port, $8.48 per 100 pieces, while the American company, who have complimented them by copying the decoration which I show to you now in their book, have a price for the same set of $6 per 100 pieces. There is a difference of 42 to 44 per cent. The English ware costs that much higher than the American selling price of goods that now stands before you, the same class, going to the same people, and the same production. The CHAIRMAN. If it will not interrupt, I would like to ask a question right there. Mr. PITCAIRN. Yes, sir. The CHAIRMAN. I would like to see a competitive tariff all along the line, and I will reserve the right to change my mind if any testimony comes before me to change it. It looks to me like this schedule on paragraphs 92, 93, and 94 is quite a competitive affair, more competitive than most of the paragraphs and most of the items we have to deal with. If there is any block in that competition along certain lines, of course when you get to that point, we will be glad to have it pointed out. When we see the large amount of importations as compared to the American consumption, I believe we can all concede it is competitive as regarded from top to bottom of these two paragraphs 93 and 94. If there is a block along the line where certain articles are not competitive, I would be glad for you to point out to me if you can where that block exists. Mr. PITCAIRN. Yes, sir. Paragraph 92 is a dead letter, as your figures in the Treasury Department show. It is impossible for us to-day, with that class of merchandise, to pay the freight across the Atlantic Ocean without any duty at all. The CHAIRMAN. I am not talking about paragraph 92. Mr. PITCAIRN. Paragraph 92 is important also, if you do not mind. We used to sell those goods to you, and I am still importing them. The CHAIRMAN. I am inclined to agree with you that paragraph 92 is not competitive like the other two. But what I was talking about is this which comes under paragraphs 93 and 94. That strikes me as quite competitive. Mr. PITCAIRN. These which I have shown you are under 93 and 94. The American potter sells this identical proposition, as I said before, costing $6 per set, against the foreign merchandise $8.48. It is no marvel, Mr. Chairman, that the imports from old England, of the class of goods which I have submitted to you here as representing the earthenware, have gone from $4,500,000 to $2,000,000. Mr. PETERS. At the same time, have not the importations from Germany increased? Mr. PITCAIRN. I am speaking of the matter of earthenware, and specifically the English earthenware, because it most directly comes in contact with productions of the American factories. Ninety per cent of that, approximately, is this class of ware, and when we did PARAGRAPHS 92-94-POTTERY. $4,500,000 of business, we were doing a pretty good business, with a great deal of courtesy to the American consumer. The American factories progressed, and they have all the advantages over us, but that is no reason why a prohibitive tariff should be put on, so we could not compete at all. If this thing goes on very much further, schedule 94 will be in the same class with schedule 92. We will be put out altogether, and then they will have the market to themselves but I presume that is all right. The CHAIRMAN. I am interested in this proposition because I want to get the facts. I notice that in 1896 there were $8,000,000 imported and in 1895 $8,000,000. In 1910 the imports increased to $10,000,000 and in 1911 to $10,900,000, and last year fell down to $9,615,000. It appears from our figures that the total consumption of articles under this paragraph was $34,000,000. You say that importation is over 25 per cent of the imports on these two paragraphs as compared with the American consumption. I do not know whether you are familiar with the tariff schedule or not, but that is a very large importation in comparison to the average paragraph in the tariff schedule, and taking it as a whole it strikes me as quite competitive, reserving the right to change my opinion if you gentlemen can convince me. That is what I want to draw out. I want to see where there is a block, if at all. Mr. PITCAIRN. In the total importations I ask if you will kindly think of the matter of the English earthenware, because that is the bulk of all earthenware that reaches this country. The Americans do not make china, except incidentally. Of their $17,000,000 they do not produce more than $2,000,000 of china. I think those are about the figures; I am not speaking in exact dollars and cents. So that earthenware has gone down from $4,500,000 of English alone to $2,000,000 in English alone. As I said before, if the tariff remains as it is, English ware or any earthenware I say English because it is the bulk-will be greatly eliminated from the market, and it will be, as I said before, in the same position as paragraph 92. The CHAIRMAN. Do you contend that most of these importations are in china, and not earthenware? Mr. PITCAIRN. Your figures on that will prove that to you. They are 4 to 1, I believe, viz, $2,000,000 earthenware against $8,000,000 china. The CHAIRMAN. Where do you make the distinction between earthenware and chinaware? Mr. PITCAIRN. We formerly had that distinction; before 1883. They were classified together again afterwards as one proposition, and in the schedule we present to you to-day we ask you once more to divide between earthenware, as it goes to most of the consumers, and chinaware. We ask you to separate china and earthenware. Mr. PETERS. What rate do you suggest on earthenware under this division? Mr. PITCAIRN. I should like to present that matter to you fully. I should like to suggest the competitive figures we are dealing with. The landed cost we are dealing with as against the American market should be brought to your attention. PARAGRAPHS 92-94-POTTERY. Here, for instance [indicating], is a white and gold plate that cost $8.48. Here [indicating] is the same identical production that they sell at $6 per set. They are 40 per cent higher on the cost of the ware on the dock in New York than the same merchandise is sold for in East Liverpool. We want to be quite as generous as possible and still remain in the business of old English earthenware. We suggest a tariff rate at not to exceed 30 per cent. The CHAIRMAN. That is, on earthenware? Mr. PITCAIRN. Yes, sir. These gentlemen, Mr. Burgess and Mr. Wells, appeared before you yesterday representing the infant industry," and, with all its frailties, I have always noticed in the last 20 years it has a pretty lusty voice. This committee was informed yesterday morning by Mr. Burgess and Mr. Wells, representing these American potters, that their profits were restrained to about 7 per cent because of competitive conditions with foreign ware. These [indicating] are the wares they compete with directly. Earthenware is their product. The CHAIRMAN. I may be wrong about this, but let me ask you this question. You refer to the English earthenware. I heard there was a good deal of competition in this class of earthenware coming from Austria? Mr. PITCAIRN. There is no earthenware from Austria. The CHAIRMAN. It is all china? Mr. PITCAIRN. Yes, sir. The CHAIRMAN. There is no earthenware? Mr. PITCAIRN. No. I think I may say safely that 90 per cent of the importations of earthenware are from Great Britain, and always have been so. The CHAIRMAN. That which comes from Austria is china? Mr. PITCAIRN. Yes, sir. That is the thing we suggest differentiating. As I say, these gentlemen informed this committee yesterday that their profits were restrained to about 7 per cent because of the competitive condition with reference to foreign wares. As a matter of fact, these are their prices, and there is a difference of 44 per cent between their selling price and our cost price, and I do not quite see the evidence of restraint. Mr. Burgess took occasion to mention that a very important English competitor, Johnson Bros., a few years ago, declared a dividend that he considered large. Johnson Bros. are one of the largest sanitary manufacturers in England. Mr. Burgess carefully omitted to mention the fact that they were the largest sanitary manufacturers in England, and that in the year he referred to they had had a very successful year, and that the bulk of their large profit came from the sale of that sanitary product, which is absolutely prohibited from importation into this market at 55 per cent duty, and I doubt if there has been any importation of it in 10 years. So when you come to consider those alleged large profits, kindly refer to the fact that it is on sanitary ware, in which the American market holds practically a monopoly. PARAGRAPHS 92-94-POTTERY. In addition to the present tax of 55 and 60 per cent, we wish to emphasize the substantial protection afforded by the heavy expenses of bringing earthenware to this country from England. The freights from Staffordshire to Liverpool and sea freight to an American port, such as New York, Baltimore or Philadelphia, amount to approximately 15 per cent in the value of the cheaper grades of ware and 10 per cent on the best grades. The Atlantic sea freight alone has been increased in the last three years over 200 per cent, and the sea freight on a crate has advanced from 80 cents to $2.50. The CHAIRMAN. Let me ask another question at this point. How much do you say is the amount of the American consumption of that class of earthenware that you have before you; that is, all that will be classed in schedules 93 and 94 as earthenware? Mr. PITCAIRN. You are speaking of consumption? You are speaking of the table wares which we are discussing, and you are not referring to the sanitary? The CHAIRMAN. The sanitary wares are all under schedule 92, are they not? Mr. PITCAIRN. It is not, as a matter of fact. There is none in there. I do not believe No. 92 covers sanitary ware. We im The CHAIRMAN. I think it is in 93 or 94; that is, to the best of my knowledge and belief. They produced $15,000,000. ported $2,000,000, approximately, we will say. That is $17,000,000 for the two. You think the total consumption of that class of earthenware is $17,000,000? Mr. PITCAIRN. I am speaking now of selling values. I do not know what the consumption price would be, but there is $15,000,000 of theirs and $2,000,000 of ours. The CHAIRMAN. I am talking about the wholesale or import prices. Would not that be correct? Mr. PITCAIRN. If you are trying to reach the consumption, you would have to add our factory cost and the freights and the duties at the port. That would make our importations about $2,500,000 and the domestic production approximately $15,000,000 for that class of ware. Is that clear, sir? The CHAIRMAN. I think so; yes. Mr. PITCAIRN. Yesterday some reference was made to the matter of geographical protection as a sort of myth. There is no myth about the price that we pay to-day for freight to Liverpool and these other charges which accrue. For instance, Mr. Burgess stated yesterday that the sea freight from Liverpool to Baltimore was 8 cents per hundred pounds. The fact is the rate is 25 cents per hundred poundsquite a difference. These transportation charges alone constitute a big protection against foreign goods. Under such conditions a duty of 30 per cent on earthenware would be more than generous protection. These freights represent actual money that we pay out, and amount to approximately 10 per cent on the highest class of ware and 15 to 20 per cent on the cheapest classes of ware. If you will go to paragraph 92, Mr. Chairman, I can give you an example. I imported to the Philadelphia port 12 crates of stoneware for retorts for the use of chemical manufacturing people, on which I paid 38 per cent freight of the total value of the goods. The invoice |