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PARAGRAPHS 101-102-PLATE GLASS.
Mr. AUERBACH. All of it?
Mr. AUERBACH. All of it. It is an international glass trust permitted by the Government. Of course, all such trusts are not only permitted but favored by foreign Governments. If we, too, want to favor the foreign trusts, operating in ways distinctly against our public policy, well and good.
Mr. PALMER. We are apt to consider in this country a trust as a business concern which controls a very large proportion of that particular business.
Mr. AUERBACH. I think that would be erroneous.
Mr. PALMER. We speak of the United States Steel Corporation as the Steel Trust, yet I observe that it controls only about the same proportion of steel business as the Pittsburgh Plate Glass Co. controls of the plate-glass business.
Mr. AUERBACH. One might perhaps be justified in calling that a trust, inasmuch as it is popularly understood that the Government in the pending litigation has so characterized it. A corporation may have a large amount of business, a large output, and a large control of trade. That is an element in determining what is a trust. But that is not the controlling element, the final thing. Under the interpretation of the Supreme Court the question now is, “How was the volume and control secured, and how are they maintained ? Were they secured through monopolistic practices, and are they maintained through monopolistic practices either by raising the price or by cutthroat practices, by lowering the price or otherwise, so that a competitor is killed and its business absorbed ?" If so, there is a clear violation of our antitrust acts.
Mr. DALZELL. As I understand, all you want is to maintain the present law.
Mr. AUERBACH. That is all I dare ask for, though the difference between the foreign and home cost of production as set forth in our brief would justify me in asking for an increase rather than in merely protesting against a decrease of duty.
Mr. AUERBACH. If there is anything further you would like to have, we shall be glad to submit it. The Audit Co. of New York has not been able to do all of its work yet, but if you want it done, although it will be a matter of considerable expense, several thousand dollars, the Audit Co. will go over every plant engaged in this industry in the United States and submit its report, as you will find in the back of the brief it has, within the limited time at its disposal, done as to two or three corporations.
Before I close, I wish to say that I am told that the trust Mr. Palmer has referred to is a trust in optical goods in Germany, Schoot & Genossen, at Jena, and has nothing to do with the plate-glass industry.
PARAGRAPHS 101-102-PLATE GLASS.
BRIEF SUBMITTED ON BEHALF OF THE AMERICAN PLATE GLASS INDUSTRY.
[Represented by the following companies: Allegheny Plate Glass Co., Glassmere, Pa.; American Plate Glass
Co., Kane, Pa.; Columbia Plate Glass Co., Blairsville, Pa.; Federal Plate Glass Co., Ottawa, Ill.; Heidenkamp Mirror Co., Springdale, Pa.; Penn American Plate Glass Co., Alexandria, Ind.; Pittsburgh Plato Glass Co., Pittsburgh, Pa.; Saginaw Plate Glass Co., Saginaw, Mich.; St. Louis Plate Glass Co., Valley Park, Mo.; Standard Plate Glass Co., Butler, Pa.; Edward Ford Plate Glass Co., Rossford, Ohio; Kittanning Plate Glass Co., Kittanning, Pa.]
To the honorable members of the Ways and Means Committee of the House of Repre
Although the above companies are rivals in business and carrying on their operations under keen competitive conditions between themselves, they have joined in this appeal to Congress because the plate-glass industry in the United States is in a precarious condition even under the present tariff. This condition exists by reason of the enormous difference between the cost of production here and abroad, and also owing to the operations of the European Plate Glass Trust. This trust in its control of the output and the regulation of prices is favored by the policy of the foreign Government, while in this country a similar trust would be condemned by public opinion and be unlawful.
The subject of this brief comprises paragraphs 100, 102, 103, 104, and 109 of the
square foot. On plate glass measuring 384 square inches and under...
10 On plate glass above 384 square inches and not exceeding 720 square inches... 127 On plate glass above 720 square inches.....
WORLD PRODUCTION AND CONSUMPTION.
The production of plate glass throughout the world is estimated at 125,000,000 feet, a little less than one-half of which is produced and consumed in the United States. The European factories have a capacity of 45 to 50 per cent more than their present production. Their production is curtailed and prices fixed under a trust combination which would be indictable here.
CONDITIONS OF INDUSTRY ABROAD.
Factories. The plate glass factories of Europe are equipped with modern machinery and are as up-to-date and efficient as those of the United States. A great advantage to the foreign manufacturer is that the cost of building and equipping the manufacturing plant abroad is less than one-half the cost of a similar plant here. This item is particularly important in that it enables them to turn over their capital every 8 to 10 months, whereas in the United States it is impossible to turn the capital over more often than once in two years. This extraordinary condition is made possible, first, by the difference in the original cost of the plant; and second, by the fact that they are maintaining through their syndicate operations a very high price for their product which would be considered intolerable in this country, whereas the market conditions in the United States have barely permitted the manufacturers to maintain their existence. This makes the overhead charges and depreciation of the Belgian manufacturers, figured per foot, materially less than one-half what they are in this country.
Labor.--The foreign plants have the advantage of labor that is better trained and more skillful than American labor, as abroad the trade descends from father to son, and here the laborer has to be trained and developed.
The rate of wages in Belgium, the chief producer and exporter of plate glass, is less than one-third that which is paid in this country, and enables the manufacturers there to produce glass cheaper than any other country in the world.
PARAGRAPHS 101-102—PLATE GLASS.
The producing countries are Belgium, Germany, Austria, France, England, Italy, Spain, and Russia. As Belgium produces more glass than any of the other countries, at the lowest cost, and exports 95 per cent of its product, we submit herewith a report of the consul general residing at Brussels, giving rates of wages in Belgium, to wit:
(United States Daily Consular and Trade Reports, Oct. 31, 1912, p. 566.
Watts, Brussels, Belgium.)
From Consul General Ethelbert
FOREIGN WAGES AND COST OF LIVING,
“According to data published by the Government, wages in Belgium are lower generally than in any other European country. The Annuaire Statistique, which gives the official figures for 1910, shows the following daily wages:
Male, under 16 years:
4.667. 12,748. 15.090.
19.128. Male, over 16 years:
20.883.. 28.638. 62.195. 87.011. 100.367 65,781. 50.874.. 21,134.. 13,832. 5,776. 3,668..
Male, over 16 years--Continued.
Less than $0.29
Less than $0.19
77 .87 .87- 96 .97- 1.06 1.06. 1. 16 1. 16- 1.25
.29 .38 . 38 48 .48.58 .58
.67$0.77 and over.
.67 . 77
“About 65 per cent of men workers over 16 years earn less than 68 cents. Of the women, 67 per cent earn less than 39 cents, and 93 per cent less than 58 cents.
“In 1907 inquiry was made at the public schools of 18 towns, distributed over the country, into the quantity and kind of food each one of the children had had during the preceding 24 hours. The answers compiled have shown that 21.33 per cent of the children were insufficiently nourished."
The rates of wages paid to Belgian plate-glass workers are no higher than the general rates above given, while the average rate of wages paid by the American plate-glass manufacturers is about $2.30 per day.
Tariff-Germany (whose tariff is admittedly the most scientific in the world) taxes plate glass at a flat rate equivalent to 12.42 cents per square foot; Austria, a flat rate equivalent to 12.60 cents per square foot; Spain, a flat rate equivalent to 14.80 cents per square foot; France, 5.40 cents to 6.30 cents per square foot; and Italy, 7.79 cents to 9.86 cents per square foot. The European countries maintain this tariff notwithstanding that their costs of production are not materially higher than the cost of production of Belgian manufacturers.
Foreig Plate Glass Trust.—The European manufacturers are organized into one of the strongest and most successful trusts known to the commercial world, controlling absolutely and arbitrarily the output of its members. This trust, known as the International Glass Convention, was organized in 1904, and has been extended until 1924. It includes nearly all the continental manufacturers of plate glass. It has been very successful in its operations, some of its members earning as high as 83 per cent per annum on their capital, and paying as high as 30 per cent per annum in dividends, as is shown by the following extracts from the balance sheets of the two principal manufacturers in Belgium, published in 1911, according to the Belgian law.
Earnings. Per cent.
PARAGRAPHS 101-102-PLATE GLASS.
This trust and its operations are described in the following extracts from the United States Daily Consular Trade Reports:
(United States Consular and Trade Reports, Aug. 18, 1909, pp. 2–3.)
“The scope of the plate-glass syndicate is mainly to place the manufacturer of plate glass in direct connection with the consumers of this article, in order, in a measure, to give stability to the selling price and to prevent overproduction, which always results in excessive damage in any form of industrial activity.
“In order to attain this object, the syndicate agreed theoretically, it is stated, to reduce the productive capacity of the syndicated concerns to 126 days per year working at full power. They have therefore imposed on the members of the combine a stoppage of work for a period of 180 days out of the 306 working days of the year. In this arrangement there is a tendency to oppose the interests of the working force, the members of which can with difficulty accept such a long period of enforced idleness, In order to obviate this inconvenience the shutdown was in practice regulated as follows: The factories in the combine were forced to remain in operation during the entire year, but with a productive capacity of machinery that would limit the output to what it would have been had they worked but 126 days during the year. Thus, a factory possessing 10 machines, according to the agreement, would have a productive capacity of 1,260 days working at full force., Instead of working 126 days at iull force, however, the factory would work during the entire year but four of its machines, leaving the remaining six idle. This arrangement enabled the managers of the differeat factories in the combine to eliminate the least valuable element among their working forces, and to retain only the most skillful workmen. Besides, there resulted a saving in the cost of operating a large number of machines.
“The board of management (conseil general) of the international syndicate follows very carefully the movements of the different markets; the board meets every three months in order to regulate the matter of production. Besides a special committee examines each month all statistics communicated by the members of the syndicate, while an organization composed of agents of the principal factories meets at least once a month in order to regulate the question of orders received and communicate to the board of managers such information as may be deemed opportune.
The United States trade report of July 22, 1912, page 376, says, concerning the Belgium industry:
"CONDITIONS IN THE PLATE-GLASS INDUSTRY.
“Plate glass is one of the most important articles of export to the United States. The shipments last year were valued at $568,199, compared with $1,166,026 for the previous year. The large decrease last year was due to the fact that in 1910 one of the principal plate glass factories in the United States was destroyed by fire, thereby increasing the demand for the Belgian product.
“In 1904 the International Glass Convention was organized, with a view to control the production and sale of polished glass. With the exception of two companies, one in France and the other in Belgium, all the plate-glass companies in Germany, Austria, Belgium, France, Netherlands, and Italy agreed to the convention which is still in operation and which operates to the satisfaction of all concerned. Since the agreement the plate-glase manufacturers have prospered, while prior to that time the industry was unsatisfactory. Great improvements have been made in the machinery. A glasspolishing machine of 1 square meter to-day produces as much or more than one of 2 square meters before the convention. Great improvements have been made in the manufacturing of the rough glass (glacé brute) and the cost greatly reduced. Eight years ago the cost of manufacturing glass in Belgium was 9 to 10 francs ($1.74 to $1.93 per square meter (10.76 square feet). At present it is 5.60 to 6.50 francs ($1.06 to $1.25) and rough glass is now manufactured at the cost of less than 2.50 francs (48} cents) per square meter (10.76 square feet) or 4} cents per square foot.”.
PARAGRAPHS 101-102-PLATE GLASS.
The report of November 6, 1912, states as follows:
“Belgium plate-glass manufacturers are very prosperous, paying yearly dividends as high as 30 per cent. Because of the cheap labor the plate glass industry in Belgium maintains on all foreign markets its power as price regulator. The advantage of a low cost of production (11 cents United States currency per square foot of polished plate glass) is assisted by the successful operation of the international syndicate of plate glass manufacturers which regulates the selling prices according to conditions existing in such foreign market. These arbitrary selling prices are consequently of great variety. For example, the same glass and the same size, quality for silvering are sold (off the gross prices of the same list) at 20 per cent discount for England and 30 per cent discount for the United States, and quality for window at 30 per cent and 2per cent for England against a discount of 45 per cent and more for the United States.
“The reason for this discrimination is said to be the fact that American plate glass manufacturers are not associated with the European syndicate and consequently the syndicate establishes a low range of prices for the American market on the kinds and sizes of glass which, through overproduction, must be disposed of by the American manufacturers regardless of cost.”
Organization of foreign sales agency.—Within the last 30 days a new and most important step has been taken by the foreign manufacturers of plate glass. The trust described above left to each factory the sale of its own product, under certain restrictions which left the manufacturers in limited competition with each other. The product of each factory being handled separately, the trust had not the power to control and regulate markets as it would have had if it had charge of the selling of the entire product of all its members. This power has just been vested in the trust through the organization in Belgium of a selling company, which will purchase from each manufacturer his entire product and then distribute and sell it in such markets and at such prices as is deemed to the best interest of all the manufacturers in the syndicate. The control of the entire output of the factories gives the trust an enormous power. It can undersell competitors in any market in the world and recoup its losses by adding them to the price of glass in markets that it controls. The trust is therefore in a position to at once successfully invade the American market, which consumes practically half the glass production of the world, and is the only market which the foreign manufacturer does not at present control, although it does regulate the prices upon part of the American product and could easily do so on all of it.
CONDITIONS OF THE INDUSTRY IN THE UNITED STATES.
Production.—The production in the United States is about 60,000,000 square feet, about 47 per cent of which is produced by the Pittsburgh Plate Glass Co. and the remainder by 11 separate companies. None of the American product is exported, excepting a negligible quantity to contiguous territory to supply pressing requirements.
The capital invested in the industry in this country is about $49,000,000, the smallest concern in the industry having a capital investment of about $1,000,000. The average number of men directly employed in the industry in this country is about 11,000. Those indirectly employed will equal more than twice this number.
Importations.--Importations of unsilvered polished plate glass into the United States from 1906 to 1911, inclusive, in feet, were:
An inspection of the table of imports given above shows that most of the importations consist of small sizes. Small sizes of plate glass have never been adequately protected, and the Ameriean product under 384 square inches, now bearing a duty of 10 cents per square foot, and above same but not exceeding 720 square inct es bearing a duty of 12 cents per square foot, does not yield an average price equal to