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The average net profits of the business are less than 6 per cent on the actual cash invested.
There is no trust or combination in restraint of trade in any form whatsoever; competition is free and extremely keen.
The business is absolutely dependent upon some measure of protection.
We have proof to substantiate every statement we make and will welcome a thorough and complete investigation of our claims on your part. Our factories and books are at your command and will be gladly opened to your authorized representative. We will also be glad to render any further assistance within our power.
I beg the opportunity of submitting more at length and in detail the facts concerning our industry in the form of a brief. In what I have to say to-day and in the brief it will be my purpose to give you a conservative statement of the facts and conditions surrounding our industry without exaggeration or embellishment, for I am satisfied that a mere statement of the truth is the most potent argument I can use for the preservation of our industry.
The purposes publicly expressed by your chairman and the statement of President-elect Wilson, to the effect that honest and legitimate business need fear nothing from the new administration, gave us great encouragement and put new heart into our endeavors.
We class ourselves among the honest and legitimate businesses of the country, and have a right to continue to live. We have taken you at your word. The business has developed under a policy of protection, but has never made a fortune for anyone. Those who have made a competency have been extremely fortunate. Every penny of such protection has gone to the wage earner, who now stands forth as one of the best paid artisans in the United States; at the same time we have reduced the value of pottery ware to the consumer; for example, a given assorted crate of English tableware was sold at wholesale in this country in 1852, when there was no domestic competition, for $95.30; in 1864, on account of the high gold premiums, the same crate was sold for $210.75, and incidentally enabled the industry to get a start. The same assortment of ware, of vastly superior quality, now made in America, is sold for $37.59.
While this has been accomplished, it has not in any way seriously interfered with competition from abroad. Statistics show that importations of 1884 were $4,945,813, and in 1912 they were $10,062,203.
1885. 1886. 1887 1888 1889. 1890. 1891. 1892. 1893. 1894, 1895. 1896. 1897. 1898. 1899. 1900. 1901. 1902. 1903. 1904. 1905. 1906. 1907 1908. 1909. 1910. 1911.. 1912.
By comparison of the importations of 1885 and of 1912 we find as follows:
I have here some little charts, which I passed to the gentlemen of the committee, prepared by us, which bring this scale down to date, showing in the first place, on chart 1, the importations from the various countries, showing how England practically had the market of this country in 1884. Germany, with very little importation, about six million. To-day Germany has far outstripped England. England is less than she was 25 years ago. Japan has become a very serious factor, and Austria has also increased very largely.
On the other chart, No. 2, you will see the relative growth of the industry as compared with the importations, the upper line indicating the American value of the imported ware, giving it only 100 per cent advance over the foreign value, which is extremely low and conservative. So that the importation value in 1890 was about $14,000,000, say; that is, the American selling value of the imported stuff. To-day that is up in the neighborhood of $28,000,000. The American importations in 1890 were about $8,800,000; to-day they run up above the chart figures, near to the fifteen million mark.
The CHAIRMAN. You are speaking of china there, are you notearthenware?
Mr. BURGESS. Earthenware and china combined.
The CHAIRMAN. The Treasury figures have them separated. They are separated under the schedules-total importations of earthenware and total importations of chinaware.
Mr. BURGESS. Running all the way back?
Mr. BURGESS. Oh, for the last year. But I do not think you have them running back 25 years. Recently they have been separating them more carefully.
Therefore we have no data for accurate comparison.
In chart No. 2 I would like to call special attention to the lower left-hand corner to show the very disastrous effect that befell the American industry at the time of the last reduction. Our product in 1892 was about $8,800,000. In 1893 it fell to $3,500,000. “At the same time the imports went up over a million. They immediately dropped after the depression in trade, but very promptly rose to the ten-million mark, whereas the American industry simply rose very gradually, amounting to a million dollars or thereabouts in the four years.
Mr. PETERS. What were the reduced rates at that time?
From that time, from the enactment of the Dingley bill, there has been a steady advance in importations and in domestic production.
Mr. Dixon. Did the Payne bill reduce the rates from the Dingley bill--the rates on chinaware?
Mr. BURGESS. The Payne bill left the china and earthenware as a whole just where it was, changing the wording of the schedule slightly, but making no difference in the rate.
Mr. KITCHIN. Is it a fact, that outside of the chinaware, we export a great deal more of earthenware and stoneware than we import, and that we export this in competition with all the world?
Mr. BURGESS. We do not export any earthenware, sir—the class that I represent.
Mr. KITCHIN. Are you sure of that?
Mr. KITCHIN. You overlook the fact that we exported in 1912, in earthenware and stoneware, $1,824,000.
Mr. BURGESS. Not one piece of it is included in the ware I represent.
Mr. KITCHIN. I said outside of chinaware.
Mr. KITCHIN. And the imports were a good deal less than the exports, outside of chinaware.
The CHAIRMAN. Your figures, Mr. Burgess, do not correspond with the figures the Treasury Department has furnished to the committee.
Mr. KITCHIN. Somebody has furnished you with the wrong figures. Mr. BURGESS. No; I am not segregating them.
The CHAIRMAN. It will be conceded, I think, that so far as chinaware is concerned, there is a very good competition at a free competitive rate now; at least, it appears to be so from the figures furnished by the Treasury Department.
PARAGRAPHS 92-94POTTERY. When it comes to stoneware, if their figures are correct, you have less than 1 per cent importation. The committee is considering these different paragraphs, and we are not going to consider them grouped together.
I think it will be conceded there is a very reasonable competition in chinaware, but when you come to earthenware it looks like there was a tariff block on the wall, and if you care to, we will be very glad to hear from you on the earthenware proposition.
Mr. PAYNE. What do you mean by earthenware?
Mr. KITCHIN. It is the common yellow and brown clay, and all stone and earthenware, except the chinaware, this yellow stuff that you see there [indicating).
Mr. PAYNE. They are the general line of stoneware. They come in with porcelain, parian, plain white, and common yellow, a total of $9,615,000 of importation.
Mr. KITCHIN. Read all the paragraph.
Mr. PAYNE. I think you will find that million is plain white and plain brown.
The CHAIRMAN. Mr. Witness, to make it clear to you, so that you may take the matter up if you care to, I desire to call your attention to the fact that in paragraph 92, designated in the bill as common yellow, brown, and gray earthenware, and so forth, the Treasury Department's figures that we have, show for the year 1912 total importations only to the value of $144,000. The estimated consumption, as given us by the Census Bureau, of this article, under this paragraph, is over $14,000,000, and the exports amount to $802,000.
You can see that there is hardly 1 per cent of importation under that paragraph. Mr. PAYNE. That comes in under 25 per cent. .
. The CHAIRMAN. Yes. But I am trying to make him differentiate between these two paragraphs. Under paragraphs 93 and 94, which you class as chinaware.
Mr. BURGESS. Earthenware, fine stoneware, and chinaware.
The CHAIRMAN. I am merely calling your attention to these figures. There the value of the imports amounts to $10,000,000 out of a total consumption of $34,000,000
In other words, there is nearly one-third of the articles that were consumed in the United States, under paragraphs 93 and 94, that are imported, and I can agree with you in your argument. But when you come down to paragraph 92 there seems to be a block in the tariff wall. We would be glad to hear from you if you have anything to say as to that.
Mr. Payne. Mr. Burgess, I think perhaps you can enlighten the chairman as to what that $10,000,000 includes.
Mr. BURGESS. Mr. Chairman, the whole difficulty lies in a misunderstanding of what we are talking about.
The CHAIRMAN. I am talking about paragraph 92.
Mr. Burgess. Paragraph 92 is the paragraph that enters very little into the consideration of what I am saying just now, because that refers to a grade of ware that is of the commonest kind, that is of a low order, that has a low rate of duty set against it. We are producing in this country without any question a very large proportion of that group of commodities. But to say that everything under paragraphs 93 and 94 is chinaware is a misunderstanding of the trade's use and meaning of that term.
Here we have two articles. This indicating] is earthenware. The paragraph reads, as I remember it, earthen, stone, porcelain, parian
The CHAIRMAN. I think, Mr. Burgess, that we can concede you have a competitive tariff in paragraphs 93 and 94. It looks that way from the figures that are before us.
Mr. BURGESS. The wording of 93 and 94 is ---
There [indicating] is a high grade of earthenware. There (indicating) is a high grade of chinaware. Those are the subjects I am speaking about this morning, and those are the subjects which we are at present interested in.
The CHAIRMAN. Your testimony, then, does not relate to paragraph 92.
Mr. BURGESS. No.
Mr. BURGESS. No. The industry is entirely free from anything in the form of combination or trust in the making of selling prices or in restraint of trade. Competition is absolutely free and is extremely keen.
As a revenue producer, Schedule B stands tenth in importance of all the schedules in the tariff law.
The industry is a very precarious one. The possibilities of loss are unusually great, and the proportion of profits have never been commensurate with the great risk in manufacture. Out of 30 factories that were in operation in the city of Trenton when I began business some 34 years ago but 4 of those factories have weathered the storm.
The pottery industry is and has been the special object of governmental consideration in foreign countries. The Royal Worcester of England, the Sevres of France, the Royal Copenhagen of Denmark, the Royal Meisen of Dresden, Germany, to say nothing of the Emperor's own pottery plant at Berlin,
the Royal Japanese Factory, are examples of such fostering care. These factories are not supposed to produce profit, but are established for the benefit of the industry. Experiments are made, materials tested, and methods of operation tried out for the benefit of the national industry. The American potter has none of these advantages, but must work out his own salvation with fear and trembling.