PARAGRAPHS 101-102-PLATE GLASS. NOTE 1.-Amount of labor.-We give this as 0.041 days, or the equivalent proposition of 24.4 square feet per man per day or 7,320 square feet per man per year of 300 working days. This is a difficult item on which to reach an exact figure as the result can not be reached by dividing the annual output of a factory by the average number of employees. All the plate-glass factories make their own pots and the cost of the labor in this department is not part of the general labor cost but is included in the pot cost, which is a separate item in the calculation (see note 15). Similarly, many of the companies mine their own sand or dredge it from river or lake beds, this labor representing the cost of the sand and not being part of the general cost of manufacture. Some of the companies operate private railroads. The number of employees in these three departments in one factory that we know of aggregates 90 men. There are also companies that specialize in very thin or very thick plate glass, both of which are considerably more expensive to produce than the regular one-quarter inch thickness and decrease the output per man accordingly. In the case of a factory confining itself to straight plate glass production, however, it will be found that the average output per man is considerably in excess of the amount we state. For instance, the general manager of the Ford Plate Glass Co. stated to a commercial agency under date of March 6, 1911, as follows: "We expect to have part of the new plant in operation within six to eight months. When it is running complete we will have a pay roll between $75,000 and $100,000 per month. Our output is now about 500,000 square feet of glass per month, and it will then be about 1,000,000 square feet. At this time we are now employing about 800 men including those employed on the new work." Eight hundred men at 300 working days per year equals 240,000 working days per year. Five hundred thousand square feet per month equals 6,000,000 square feet per year, which divided by 240,000 equals 25 feet per man per day or 7,500 feet per man per year. It will be noted that these 800 men include those engaged on the new plant and we may add that this company dredges its sand from Lake Erie, leaving the obvious conclusion that this particular factory's output is in the neighborhood of 8,000 feet per man per year. In the Commoner and Glassworker, a Pittsburgh trade publication, in the issue of April 24, 1909, there is an article concerning this company and giving details of improvements recently made at the plant and winding up with the statement that the monthly capacity is 450,000 square feet and that the employees number 700, which works out at 7,714 feet per man per year and agrees remarkably well with the statement quoted above made two years later. NOTE 2.-Melting materials.—We allow 10.22 pounds for the total material entering into the composition of a square foot. The weight of plate glass in the rough, immediately after casting and before grinding or polishing, is about 7 pounds per foot, so that we obviously allow sufficient material with proper allowance for volatilization, which is about 30 per cent in soda ash but much less in the other important materials. NOTE 3.-Grinding sand.-The 30.5 pounds allowed is rather larger than the quantity actually required, but as this material is more expensive in this country than in Europe we have allowed a maximum quantity to remove all room for argument. The total consumption of grinding sand on page 23 of Census Bulletin No. 62 of 1905 is given as 410,856 tons. Not all of this was used for grinding plate glass, as there were several million square feet of ground and obscured glass produced in 1905, most of which was made by the sand-blast process. However, assuming that the entire consumption was for the manufacture of polished plate, the 410,856 tons divided by the 1905 production of polished plate-27,293,138 square feet-equals 30.1 pounds per foot of production. NOTE 4.-Plaster.-We state the required quantity as 2.66 pounds per foot of production. The total consumption according to page 23 of Census Bulletin No. 62 of 1905 was 33,939 tons, which divided by the number of square feet produced— 27,293,138-gives a results of 2.49 pounds per square foot. NOTE 5.-Rouge.-We state the quantity as 0.05 pound per square foot. Page 23 of Census Bulletin No. 62 gives the consumption as 1,098,566 pounds, which divided by the production of 27,293,138 square feet, give a result of 0.04 pounds per foot. NOTE 6.-Cost of labor.-It is fortunately possible to confirm this item very exactly from official records. The report of the United States Commission on Immigration, now issuing from the Government Printing Office, gives in its investigation of the conditions in the manufacture of plate glass the following tables. PARAGRAPHS 101-102-PLATE GLASS. STUDY OF EMPLOYEES. TABLE 38.-Per cent of male employees 18 years of age or over earning each specified amount per week, by general nativity and race-Plate glass. [This table includes only races with 80 or more males reporting. The totals, however, are for all races.] TABLE 43.—Per cent of male employees 14 and under 18 years of age earning each specified amount per week, by general nativity and race-Plate glass. [This table includes only races with 40 or more males reporting. The totals, however, are for all races.] In the above tables figures are given for a total of 3,261 adult employees and 174 boys, showing average weekly wages of $12.07 and $7.87, respectively. Assuming these proportions of 3,261 to 174 to hold good, we reach an average weekly wage of $11.85, or $1.97 per day. The above tables, Nos. 38 and 43, however, show an unduly large proportion of native American labor; that is, of high-priced labor, and an unduly small proportion of Italian and Slav labor; that is, of cheap labor. This Italian and Slav labor constitutes 60 to 70 per cent of the entire working force in the average American factory, as stated by Mr. Clause, president of the Pittsburgh Plate Glass Co., in his testimony before the Committee on Ways and Means in 1908. (See p. 1158, Tariff Hearings, Schedule B, Sixtieth Congress.) This is also confirmed PARAGRAPHS 101-102-PLATE GLASS. by another table (No. 130) in the report of the Immigration Commission in which the racial distribution of employees in a typical plate glass plant is given as follows: Tables Nos. 38 and 43 show an average wage of $1.97 per day for a working force containing 1,069 native Americans out of a total of 3,261 (exclusive of boys), or about 33 per cent, and 1,143 Italians, Slovaks, etc., out of 3,261, or about 35 per cent. It is obvious that average wages for a force consisting of only 11 per cent native Americans and about 67 per cent Italians, Slovaks, etc., will be very considerably lower. NOTE 7.-Cost of melting sand.-We state it as $2 per ton. Census Bulletin No. 62, 1905, page 23, gives the total consumption as 769,702 tons of a total cost of $1,547,147, or $2.01 per ton. NOTE 8.-Cost of salt cake.—We state it as $12 per ton. Census Bulletin No. 62, of 1905, page 23, gives the total consumption as 53,905 tons of a total value of $802,611, or $14.89 per ton. This material has declined in price since 1905. There have been small importations during the first nine months of the fiscal year ending June 30, 1911, amounting to 10,397 tons of a foreign value of $109,667, which, plus the duty of $1 per ton, works out at $11.55 per ton. Salt cake and soda ash are interchangeable materials in glass manufacture. Some American factories use soda ash exclusively. When soda ash alone is used, fusion is quicker and at a lower temperature, thus effecting a saving in fuel, compensating for the increased cost of the material as compared with salt cake. NOTE 9.-Cost of soda ash.-We state it as $26 per ton. Census Bulletin No. 62, of 905, page 23, gives the consumption as 215,462 tons of a total value of $4,068,804, or $18.88 per ton. Unlike salt cake, this material has advanced in price during the past few years. There has been a trifling importation during the first nine months of the fiscal year ending June 30, 1911, 2,951,203 pounds, or about 1,476 tons of a foreign value of $33,024, which, plus the duty of $5 per ton, gives a total value of $40,402, or about $27.38 per ton. (See also the preceding memorandum regarding salt cake.) NOTES 10, 11, 12, 13, 14.-All figures from Census Bulletin No. 62, of 1905, page 23. NOTE.-The cost of grinding sand in many factories is exclusively for labor. See note No. 1. NOTE 15.-Cost of pots.-Our statement of $26 per pot is difficult to confirm, as the plate-glass factories make practically all their own pots. We have accordingly based ourselves on the Belgian cost, plus about one-third of what the freight and duty would amount to if the pots were imported, and as none actually are imported, this is a reasonably close approximation. This is a very small item in the cost in any event. NOTE 16.-Cost of fuel.-The value of $1 per ton assigned to coal should rather be described as the relative cost of fuel as compared with the Belgian cost. PARAGRAPHS 101-102-PLATE GLASS. No single item in the cost varies so greatly as this one. Many of the American factories are still operating with natural gas, particularly those in Pennsylvania, which are more than half of the total number in the country. Still other factories, notably the Pittsburgh Plate Glass Co., own their own coal mines, or are so located with reference to coal deposits that their cost is considerably under $1 per ton. In other factories the cost is higher, but $1 is a fair average for a ton of coal or for fuel of equal caloric value. Census Bulletin No. 62, of 1905, on page 35, gives the total consumption of coal in the State of Pennsylvania as 419,636 tons of a value of $574,274, or $1.37 per ton. This includes the operation of all establishments and is undoubtedly much higher than in the plate-glass factories, who are very large consumers and who were located with reference to cheap fuel, as is stated in the preface to the Census Bulletin above referred to. NOTE 17.-The investment required to erect and operate a plate-glass factory independent of banking facilities, is about 33 per cent higher in the United States than in Belgium. The capital required in Belgium is about 45 cents per square foot of annual capacity. In the United States it requires about 60 cents per square foot of annual capacity. The interest on this difference of 15 cents per square foot, at 5 per cent per annum, amounts to about three-fourths cent per square foot in the cost of the product. General office expense and selling expense is, generally speaking, higher in Belgium than in the United States. The Belgian factories sell very little of their product in their own country-not more than 5 to 10 per cent-all the rest being exported and sold in relatively small units than is the practice in the United States. The fact of of exporting the bulk of their product naturally requires a much larger clerical force for the handling of the business, on account of consular formalities, etc., and the multiplication of clerical details. This is a difficult matter to reduce to figures, but it is a matter of common knowledge to anyone familiar with plate-glass plants that the entire office force of an American factory will not exceed five or six people, that is, exclusive of the force employed in keeping factory records, etc., all of whom are provided for in the administrative expense item shown on the calculation of shop cost, whereas a Belgian factory will employ an office staff three or four times as large. General office oxpense, however, is a most intangible matter, particularly in close corporations, where it is a matter of indifference to the proprietors of the business whether their profits take the form of dividends or large salaries. Selling expense is also a greater item with the average Belgian factory than with the average American establishment. That is natural, on account of the fact that the Belgian market is all over the world instead of being confined to one country. The average American plate-glass plant employs only one general sales agent, who rarely has any assistants. The Belgian factory employs an official of the same title, and in addition to this markets most of its product through brokers, who are paid a commission of from 2 to 3 per cent. In the cost of packing, it is about a stand-off. The labor costs less in Belgium; the packing material itself-lumber, straw, excelsior, etc.-costs less in the United States. It should be said, however, that this refers merely to packing in Belgium in a general way. The packing of Belgian glass destined for the United States or any other country to which it is exported by water is very much more expensive than the packing employed by the American manufacturers for rail shipment. The general expense above referred to is simply general office expense. The expense of record keeping in the factory, and of all office expense directly connected with the operation of a factory, in fact, all office expense except that connected with the sale of the material and the relations between the manufacturer and his customers, are included in the cost calculation. SELLING PRICES OF AMERICAN PLATE GLASS. We believe it will be accepted as an axiom that no manufacturer will continuously sell his product below cost. He may perhaps sell occasional parcels of merchandise below the cost of production, or perhaps he may sell his entire product, for a very brief period, below the cost of production, but he will not continuously sell his product on this basis and keep his factory in full operation. The manner in which the great bulk of American plate glass is sold is in carload lots of what are known as glazing stock sheets; that is, the manufacturer does not undertake to furnish any specific sizes, but merely sizes within certain limits that is, of any given quantity he undertakes to furnish. PARAGRAPHS 101-102-PLATE GLASS. Four per cent in sizes having an area of from 1 to 3 square feet, 6 per cent in sizes having an area of from 3 to 5 square feet, and so on. These divisions are known as brackets. The percentages furnished in each of the various brackets, and the way in which the average price of a carload of glazing stock sheets is worked out, is shown in the following tables. The first table shows the figures on a carload of 10,000 square feet at the prices current during the greater part of the years 1908-9. The second table shows to-day's prices. Average price of carload of 10,000 square feet, 1908–9. That is an average price per square foot of almost 26 cents. Average price of carload of 10,000 square feet, 1911. 4 per cent in sizes from 1 to 23 to 10 to 4 to 5 to 7 to 12 to 25 to 50 to 100 per cent. Average price, 25.43 cents per square foot. The duty on either of these standard carloads would be $2,140. It will be observed that the average selling price of a carload of glazing stock sheets was just a trifle under 26 cents per square foot in 1908 and is about 2 per cent lower to-day. Now the average price of a carload of glazing stock sheets is considerably higher than the average price obtained for the total product of a factory. The manufacturers themselves testified on this point in 1909. We quote from the statement signed by the independent plate glass manufacturers-the factories exclusive of the Pittsburgh Plate Glass Co.-dated February 11, 1909, and printed on pages 7863 to 7869, inclusive, of the appendix to the tariff hearings of the Sixtieth Congress, the quotation following being from page 7865: "The manufacturer is burdened with cuttings from stock sheets, by the trade, called strips, with second quality, and with inferior quality called O. B.'s, which glass sells at about one-third of cost. There are also large quantities of small glass sold not included in the customary car of stock sheets, at prices far below cost. The result is the average price for the entire product is much less than the average price received per square foot for a carload of glazing stock sheets." The difference between the average price of a carload of glazing stock sheets and the average price received for the entire product of a factory is usually figured at 4 to 6 cents per square foot. Five cents is a fair average. That is, if the price of stock sheets averages 26 cents per square foot, it means that an average price of only 21 cents per square foot is being obtained for the product of a factory taken as a whole. The American plate-glass factories are running along as usual with only the usual and normal shutdowns, and are selling their product at 20 or 21 cents per foot on the average, these figures being reached as outlined above. We submit that this condition is consistent with the average cost as stated by us and is not consistent with any higher cost. |