PARAGRAPH 99-WINDOW GLASS. Mr. HILTON. I am speaking for all hand plants, not the machinery plants, except machine plants that are putting in other patents than the American this year. Mr. HARRISON. Is there not some suspicion there is a windowglass trust? Mr. HILTON. I do not know of any. Mr. HARRISON. Are they all incorporated? Mr. HILTON. The companies are all incorporated individually. Mr. HARRISON. Have they not been under suspicion over here in the departments? Mr. HILTON. They were two years ago, when 40 per cent of them organized. They had been cutting prices, and cutting each other for a year or two. The business was demoralized, and practically all gone to pieces, and so 40 per cent of them organized, and sold their glass all through one agency. Mr. HARRISON. The machine factories you say are not in the National Association ? Mr. HILTON. No, sir. Mr. HARRISON. All the others are? Mr. HILTON. Yes. Mr. HARRISON. What company are you connected with? Mr. HILTON. I am connected with the Allegany Window Glass Co., of Port Allegany, Pa. Mr. HARRISON. What is your relation to that company? Mr. HILTON. What company? Mr. HARRISON. The company with which you are connected. Mr. HARRISON. Do the companies that are embraced in your association avoid paying dividends by paying salaries to their officers ? Mr. HILTON. No. The window-glass industry does not pay any large salaries. Mr. HARRISON. How much salary do you get? Mr. HILTON. I get $2,000 a year, and I am the only salaried officer. I am manager, secretary, and treasurer. I think that is about the average they get. Mr. JAMES. No skilled workmen are required in making glass by machinery? Mr. HILTON. Not skilled. There is some skill developed, but they are not an organized body, and they do not call themselves skilled workmen. It is cheap labor. That is the reason we can not compete with them. Mr. LONGWORTH. You said 56 per cent of your factory cost was labor. Mr. HILTON. Yes; it is more than that. When I come to think it over, our office cost is not over 2 per cent, and 58 per cent is common labor around the factory. Mr. LONGWORTH. And 20 per cent is your material? Mr. HILTON. Yes. Mr. LONGWORTH. About 20 per cent overhead charges? Mr. HILTON. Yes. About 20 per cent material and 20 per cent fuel. Mr. HILTON. Yes, sir. The overhead charges include the fuel. PARAGRAPH 99-WINDOW GLASS. Mr. HILTON. Yes. Mr. LONGWORTH. So that in round numbers 60 per cent of your cost is the labor? Mr. HILTON. Yes. Mr. LONGWORTH. You have spoken of the disadvantage you were at in comparison with Belgium, on your material? Mr. HILTON. Yes. Mr. LONGWORTH. That is relatively insignificant, is it not, as compared with the disadvantage as to labor? Mr. HILTON. Certainly. Mr. LONGWORTH. You would be willing, would you not, to have glass put on the free list, if you could reduce your wages to what is paid in Belgium? Mr. HILTON. Certainly. Mr. LONGWORTH. You would be willing to do that? Mr. HILTON. Yes. Mr. LONGWORTH. You would take free trade and pay your labor the same as they do? Mr. HILTON. Yes. Mr. LONGWORTH. So your protection practically all goes to labor? Mr. HILTON. It all goes to labor. The CHAIRMAN. That is all. The witness at a later date filed the following communication with the committee: THE COMMITTEE ON WAYS AND MEANS, ALLEGANY WINDOW GLASS Co., Port Allegany, Pa., January 15, 1913. House of Representatives, Washington, D. C. Re Schedule B, paragraph 99. The National Window Glass Manufacturers Association through its tariff committee begs to submit the following additional data to that given before your committee at the hearing of January 9. In further reply to the questions of Mr. Dalzell and Mr. James, shown on pages 655 and 657 of Hearing No. 4, January 9, as to valuation of window-glass production in the United States in 1910 by the United States Treasurer as being $38,055,297, we beg to submit the following evidence to sustain the estimate of the manufacturers' committee as to the value of window-glass production in 1912: 1 Figures taken from Thirteenth United States Census, Bulletin on Manufactures, p. 64. We also beg to submit a copy of the wage scale made between the manufacturers and skilled workmen for the present blast, or working year, and call your attention specially to the scale itself on first page and to paragraphs 2 and 8, showing that the manufacturere have agreed to share with their skilled workmen any advances in prices they may secure. The window-glass factories of the United States commenced three years ago manufacturing a heavy-weight glass, known as 32-ounce, being double the weight of single PARAGRAPH 99-WINDOW GLASS. strength and 25 per cent heavier than double strength. As this is still a competitive industry, we protest against any change being made in the tariff on this product. Signed in behalf of the tariff committee of the National Window Glass Manufacturers' Association. H. R. HILTON, Chairman. BRIEF OF SEMON BACHE & CO., RELATIVE TO COMMON WINDOW GLASS. COMMITTEE ON WAYS AND MEANS, NEW YORK, January 18, 1913. House of Representatives, Washington, D. C. GENTLEMEN: We request your consideration of the propriety of a substantial reduction in the duties throughout this paragraph. The present domestic production of window glass was stated by Mr. J. R. Johnston in his testimony before the committee on January 8 last as about 7,500,000 boxes per year. The boxes referred to contain, approximately, 50 square feet each and weigh, net, about 55 pounds to the box in single thick and 80 pounds to the box in double thick. The 7,500,000 boxes annually produced is the equivalent of about 475,000,000 pounds. The importations run from 30,000,000 to 35,000,000 pounds annually; that is about 7 per cent of the domestic production. The manufacturers ascribe this relatively small importation, which still exists, as due to insufficient protection in the small sizes. The fact is, however, that the importations consist almost entirely of special varieties of window glass, imported solely on account of their suitability for particular requirements and not on account of low price. In fact, the vast majority of the importations do not compete with the American product at all. For instance, there are imported annually about 12,000,000 pounds for the manufacture of photographic dry plates, lantern slides, etc. At least 10,000,000 pounds consist of high quality picture glass. These two items alone account for two-thirds of the importation, and in addition there are numerous other imported specialties, such as clear fluted glass, colored window glass, muffled glass for art glass workers, etc. In fact, Mr. Johnston's own figures of glass imports, reprinted on page 408 of print No. 3, Tariff Hearings, January 8, 1913, show conclusively the nature of the importation. The average price per box for the period from 1888 to 1912, inclusive, works out as follows: It will be observed that up to 1898 the importations did actually consist of glass of comparatively low value. Since then, however, there has been a consistent advance in the foreign value of the importations. The fact of the matter is that the American manufacturers of window glass are so enormously overprotected that most of the time they don't take advantage of their production, even in the small sizes, but sell their product at 20 or 30 per cent less than the cost of Belgian glass laid down in New York. The larger sizes, those exceeding 16 by 24 inches, are frequently sold for much less than the cost of the Belgian product-that is, the foreign cost—f. o. b. Antwerp, without duty, and frequently for less than the duty alone on the imported article. In fact, under competitive conditions the price of American window glass never gets anywhere near the importation point and the public doesn't suffer from the operation of the tariff. At intervals, however, the domestic manufacturers get together in a trade agreement or selling agency or something of that sort and the public pays handsomely. PARAGRAPH 99-WINDOW GLASS. In our brief presented to the Ways and Means Committee in 1909, we pointed out that allowing this exceedingly high tariff to stand simply offered a premium for the formation of a combination behind it. Prophecies have seldom been fulfilled more promptly. During the early part of 1909, the American window glass manufacturers had been engaged in the formation of a combination, but as the project attracted some attention during the tariff discussion of that year, the scheme was temporarily dropped. The ink was hardly dry on the Payne bill, however, before it was revived and by the end of 1909 a selling agency known as the Imperial Window Glass Co. was in full operation. This organization comprised some 70 plants, including 15 plants which were leased for the purpose of shutting them down, and there were not more than half a dozen small factories left outside when the combination was formed, so that together with the American Window Glass Co., who at that time produced all the glass made by the machine process, amounting to about half the entire production, they controlled the market absolutely. The effect on prices is illustrated in the attached tables Nos. 6 to 12, inclusive, showing the fluctuations in selling prices during the past four years. It will be seen that in some cases prices were more than doubled and that the advance averaged all round considerably over 50 per cent. The Imperial Window Glass Co. was merely a selling agency, operating principally on a commission basis, and most of this enormous increase in price went direct to the manufacturers, whose product was sold through the Imperial. Roughly speaking, the additional profit during 1910, including the profits of the Imperial Co. itself, were in the neighborhood of about $6,000,000. The Imperial Co. did not last long. The profits of the business were so great that old plants that had been shut down for years were renovated and manufacturing recommenced, so that by the fall of 1910 there were 14 independent factories in operation and 5 new ones in process of construction, and as glass had been produced at an unprecedented rate during the first half of 1910 owing to the stimulus of high prices, the overproduction, together with outside competition, finally broke the market late in the fall of 1910. During its brief existence, however, the combination had, as stated above, cost the country something like $6,000,000, which was a pretty good price to pay as a direct result of the operation of the Payne tariff. From the late fall of 1910 until the summer of 1912, competitive conditions existed in the window-glass business. Last summer, however, the Imperial project was practically revived by the formation of the Johnston Brokerage Co., Mr. J. R. Johnston, the president of this concern, who appeared before your committee on January 8, having been the secretary of the Imperial Co. The Johnston Brokerage Co. handles the product of most of the factories that were formerly affiliated with the Imperial concern. The effect of this last combination is shown in Tables Nos. 11 and 12 attached. For a graphic demonstration of the violence of the fluctuations in price due entirely to the presence or absence of competitive conditions, and impossible except under the existing tariff, we show hereunder comparative prices of four popular sizes at different periods: PARAGRAPH 99-WINDOW GLASS. It will be observed that under competitive conditions it would have been impossible on the one hand to import ordinary Belgian window glass for glazing purposes, even if it could have been brought in free of duty, as the foreign cost of the Belgian glass was in many cases higher than that of the domestic factories here, while, on the other hand, if the Belgian glass had been given away, it still could not have been imported, as the duty was higher than the cost of the American glass. In justice to the American manufacturers, we are free to say that a combination of some sort appears to be the only alternative to ruinous cut-throat competition, and we don't think any consumer of glass should object to a reasonable combination to steady the market, but the combination should not be allowed the benefit of the present excessive protection. The public should also be protected by at least the possibility of foreign competition. We are unable to figure out the basis for the comparative labor cost given by Mr. Neenan and Mr. Hilton. In fact, we don't see how a really exact comparison could be made. The American window glass blowers' wages are determined by the sizes into which the glass he blows is eventually cut, whereas the Belgian blower is paid by a piece-rate system. The same statement applies to gatherers, flatteners, cutters, etc. It is sufficient to say regarding this labor matter that up to 10 years ago or so, there was steady immigration of window glass workers from Belgium, a large proportion of the workmen in the trade to-day being of Belgian origin. This immigration has practically ceased, which is sufficient demonstration that conditions in the trade here are no longer attractive as compared with conditions in Belgium. In fact, both Mr. Neenan's and Mr. Hilton's testimony show conclusively that the tariff has absolutely nothing to do with the prosperity of the American window-glass worker, as under the Dingley and Payne tariffs wages have been reduced 40 per cent or more in spite of the enormous protection. Mr. Hilton in suggesting a flat rate of 2 cents per pound (see print No. 4, tariff hearings, Jan. 9, p. 662), practically admits the propriety of a reduction running from 20 to 50 per cent in all the larger sizes, those above 16 by 24. He insists, however, that he suffers from Belgian competition in the small sizes. We think that a glance at the attached tables on pages 6 and 10, showing that the American manufacturers have sold this small glass frequently at only 20 or 30 cents per box higher than the duty on the imported article will disprove this conclusively. The American manufacturers may have been selling these small sizes too cheap, but the tariff had nothing whatever to do with it. Respectfully submitted. SEMON, BACHE & Co., F. J. GOERTNER, Sales Manager. [National Glass Budget, Pittsburgh, Saturday, Apr. 30, 1910.] A DEMURRER IN IMPERIAL CASE-WILL DELAY TRIAL AT LEAST SIX MONTHS-POSSIBLY A YEAR OR MORE-SUIT NO LONGER A MENACE TO SPRING AND SUMMER MARKET INDICTMENT MAY BE QUASHED-PRICES ADVANCED. As a result of an agreement arrived at between counsel for the Government and the Imperial Window Glass Co. early this week the Imperial's attorneys will file a demurrer in the case on the 9th of May. The court will then set a day for argument. If the demurrer is sustained it will then be optional with the United States district attorney whether the case will go to the circuit court of appeals for review or be quashed. If overruled the Imperial has no alternative but to go to trial, in which event the case can not come up before the October term of court, and it may possibly be carried over to the May term in 1911. In the event of the case going to trial before the local court and an adverse decision rendered, the Imperial Co. will still have the privilege of appealing it to the circuit court of appeals for review. United States District Attorney Jordan, on Wednesday morning, said: "This is the first case of this character to come before the local United States court and it is desired on the part of the court to ascertain beforehand whether we are moving in the right direction. Argument will determine whether the case will go to trial or be quashed." It will thus be seen that the executive officers of the Imperial Co. are to be given an opportunity to state their case before the court, and, in view of the voluminous evidence that they will be able to submit sustaining their position, they feel confident |