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PARAGRAPH 108-LENSES, CAMERAS, ETC. We are in a position that we can not get these cameras except by importing them. We import them. The imports have to date been so slight that the Department of Commerce and Labor does not even furnish any statistics, and I should estimate them at approximately $30,000, whereas the exports are in the neighborhood of $1,000,000, not quite a million for the last 11 months, but steadily increasing from month to month.

What happens when we go out in the market and attempt to sell our goods in competition, if I may use the almost amusing word, with the photographic trust ? What happens is that we get letters, of which I hold about a dozen in my hand and have others, from customers to whom we have shipped our cameras, which we in large part import from England. I mention no names in connection with these letters, because the moment the names were made public undoubtedly the Eastman Kodak Co. would refuse to ship their goods to the customer in question.

The letter to which I have reference now is as follows: We are returning herewith one Ensignette camera, list $10; one Ensignette, list $15. Please credit these to our account. We could no doubt have sold a large number of these cameras, but as the Eastman Kodak Co. refuses to sell us their product if we sold Ensignettes, we are obliged to discontinue the sale of them.

I have one where even the following humiliation of expression is swallowed by the retail customer who had attempted to buy goods from the applicant:

I am returning via United States Express one Ensignette camera, which I wish you would give me credit for, as the Eastman Kodak Co. have stopped me from selling it.

That is not the exact letter I had reference to, but I do not lay my hands on it for the moment. In any event the letter contains this phrase: The customer writes us, saying: :I must return the camera because I can not afford to incur the displeasure of the Eastman Kodak Co."

It seems it is a very unusual situation that an American business man must fear for his very existence, that he is going to incur the displeasure of a company whose profits seem to be without limit.

The CHAIRMAN. You want the reduction on cameras allowed ?

Mr. GENNERT. I can only take up the question of cameras alone, because the cameras are the sole photographic article that come under the paragraph that the committee is considering to-day.

Mr. LONGWORTH. What is the number of that paragraph ?
Mr. GENNERT. One hundred and eight.

Mr. PALMER. Your business is the business of selling photographic supplies ?

Mr. GENNERT. Yes, sir; and to a certain extent manufacturing. Mr. PALMER. What line do you manufacture?

Mr. GENNERT. We have formerly to a considerable extent manufactured cameras, but we were unable to sell them owing to the restrictive policy pursued in the main by the predecessor of the present Eastman Kodak Co., the Rochester Optical Co., which in turn has been absorbed by one of the companies, which in turn has been absorbed by the present corporation, the Eastman Kodak Co., which is a corporation of New Jersey.

PARAGRAPH 108—LENSES, CAMERAS, ETC. Mr. PALMER. Did I understand you to say the Eastman people have seven-eighths of the business now in this country?

Mr. GENNERT. I think it is a conservative estimate to say they have seven-eighths of practically every branch.

Mr. PALMER. Is that a patent monopoly or a monopoly obtained by combination of various companies which own patented articles ?

Mr. GENNERT. That opens a question that I can only give you my side of.

Mr. PALMER. I would not expect you, after what I have heard thus far, to give the Eastman side of it.

Mr. GENNERT. The main patents on the films have expired, and the main patents on the cameras have expired. But for films and plates they relied largely on the secret-process idea, which has, by a recent decision, been exploded.

Mr. PALMER. Is the Eastman Co. also a company of a number of other concerns which were engaged independently in the business of making cameras?

Mr. GENNERT. A good many years ago, yes. It has absorbed three or four of the largest camera-manufacturing companies.

Mr. PALMER. You say that the American manufacturers of cameras to-day can not compete successfully in this market ?

Mr. GENNERT. They can not.
Mr. PALMER. With the Eastman people?
Mr. GENNERT. They can not.
Mr. PALMER. Is that the reason you went out of business?

Mr. GENNERT. We were forced out of business because we could not sell our goods, owing to the restrictive policy of the forerunner of the Eastman Kodak Co.

Mr. PALMER. What do you mean by the restrictive policy? Do they fix a price?

Mr. GENNERT. They had films, but we had no films. We had cameras.

But each retail dealer had to have a film, which we did not have. And as a result they cut our cameras out because we did not have the films to sell them. We are left high and dry, and one by one our customers are throwing us overboard.

I intend to make a similar argument when this committee reaches the film schedule, which I believe is among the sundries.

Mr. PALMER. Have the prices on photographic products gone up or down, in view of the controlling operations of the Eastman Co. ?

Mr. GENNERT. I do not think there has been a great change either way.

Nr. PALMER. In what length of time, say?
Mr. GENNERT. About 10 years.

Mr. PALMER. There have been great advances made in the camera manufacturing business in 10 years in the way of improved cameras, have there not?

Mr. GENNERT. There have.

Mr. PALMER. But the prices you think have remained about the same?

Mr. GENNERT. The prices have remained about the same.

Mr. PALMER. Are there foreign cameras which are equal in quality to the Eastman camera ?

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PARAGRAPH 108-LENSES, CAMERAS, ETC. Mr. GENNERT. There are, but we can not bring them in at the price the Eastman camera is selling for here. We are selling some, but at a higher price than the Eastman. We sell, for instance, a small cheap camera for $2.50 which we import. That is, we sell it if we can. The Eastman Kodak Co. is selling the same camera for $2. Competition under those circumstances is very difficult.

Mr. PALMER. You mean the same kind of camera, about the same quality ?

Mr. GENNERT. Yes, cameras similar to each other, which will do the same work ours will do.

Mr. PALMER. Would the removal of this 45 per cent duty open up this entire American market to the foreign article?

Mr. GENNERT. It would give us an opportunity to compete. the present moment we not alone have difference in prices against

we have the restrictive policy which scares off the customer. If we could get a much lower duty we could at least meet the Eastman Kodak Co. in price, and we might even afford to spend more money for advertising, and thus create a market.

Mr. PALMER. I should think that the Eastman Co. would be satisfied with a reasonable profit on its capital of, say, 10 per cent, or even 15 per cent, which is a fair manufacturers' profit, and it could reduce the price of cameras so as to still keep out the foreign camera.

Mr. GENNERT. The profit is so enormous it is hard to tell where the point would be reached by the Eastman Kodak Co. They could afford to keep dropping and dropping. It is unique. I do not remember just what the profit of the Standard Oil Co. is, but even with its tremendous dividends there is a surplus that in a very few years will exceed the capital stock, mounting and mounting by leaps and bounds.

Mr. LONGWORTH. But the tariff has nothing to do with the Standard Oil Co.; that is not protected.

Mr. GENNERT. I merely used the instance of the Standard Oil Co. as an instance of prosperity.

Mr. LONGWORTH. But you are speaking of the tariff.

Mr. GENNERT. My example was probably badly chosen. I did not use it for the purpose of producing a tariff argument. If I created that impression, I want to correct it.

The CHAIRMAN. This paragraph reads, “Opera and field glasses, telescopes, microscopes, photographic and projection lenses, and optical instruments,

It seems the Government gets about $240,000 or $250,000 out of this item. There must be competition in some of these articles that are in this paragraph to produce that amount of revenue.

Mr. GENNERT. There undoubtedly is, Mr. Chairman, and we make the point that photographic lenses do not belong in that schedule.

The CHAIRMAN. What I wanted to ask you was that very question. Does the term “photographic lenses” cover cameras ?

Mr. GENNERT. It does not. A photographic lens is on a separate piece of wood and easily detachable from the body of the camera. In other words, the only optical part of the camera is the lens.

Mr. PALMER. Cameras come under this section as photographic lenses?

PARAGRAPH 108-LENSES, CAMERAS, ETC. Mr. GENNEXT. They come in under optical instruments. The board of appraisers hus classed them as optical instruments.

Mr. HARRISON. It says, “Photographic and projection lenses and optical instruments, and frames for mountings for the same.'

Mr. GENNERT. Yes, but the Board of General Appraisers has said that cameras are optical instruments.

Mr. HARRISON. You probably know that the Democratic platform calls for the placing of trust-controlled products on the free list. Suppose we attempted to put the products of the Eastman Co. upon the free list; what effect, if any, would that have upon any of the manufacturers of cameras in the United States ?

Mr. GENNERT. It would be a benefit to everybody, and it would permit a competition between outsiders and the Eastman Kodak Co. There would be only one class of manufacturers who might be harmed. The manufacture of lenses and shutters, while it is not a large part of the industry, is still carried on on a fairly competitive basis.

The suggestion I was going to take the liberty of making to this body was that a separate duty be levied on cameras. We desire to import from Europe camera bodies, namely, a box, which is not optically equipped with a lens and a shutter. When this box has been imported from Europe we intend to go to the American manufacturers of lenses and shutters, an industry which is still independent, and equip our European-bought bodies with American optical portions. And I might add that we do not manufacture these American optical portions.

Mr. Harrison. How large a proportion of the camera production in the United States is controlled by the Eastman people ?

Mr. GENNERT. At least seven-eighths, if not more.

Mr. HARRISON. Are they selling their products cheaper abroad than they are in the United States?

Mr. GENNERT. As to answering yes or no, I do not think I can answer. Their sale in foreign countries depends upon the condition of those countries. If, for instance, there is a duty into the country, persons buying are given a large discount for customs, so that they can meet competition. I do not think there is a great difference between the prices they get abroad and the prices the others get. They are always there and sell cheap enough to be able to compete abroad; and, while they have not the control abroad they have in America, they still do a large business in practically every civilized European country.

Mr. Hill. Do you know if they have factories abroad?

Mr. GENNERT. They have factories for certain articles, but which ones I can not tell you.

Mr. Hill. Do you know whether there is any financial connection between the Eastman Kodak Co. and the foreign Kodak Trust in England ?

Mr. GENNERT. There is undoubtedly some connection.

Mr. Hill. There is undoubtedly? Then putting the article on the free list, even though the Democratic platform called for it, does not necessarily call for putting the foreign trust on the free list, but only domestic articles on the free list?

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PARAGRAPH 108-LENSES, CAMERAS, ETC. Mr. GENNERT. I might sayMr. HILL (interposing). Can you reach these people by the tariff ? Mr. GENNERT. Yes.

Mr. Hill. Then I would like to know why could not the Eastman Co. manufacture abroad any article made free, manufacture it in their factories abroad, and ship the finished product here and sell it here under the free schedule ?

Mr. GENNERT. They make everything here that they can make cheaper; they do not manufacture abroad for the American market at all.

Mr. Hill. Why would not they do it if it was free?
Mr. GENNERT. I do not know.

Mr. Hill. That is what I say. Can you reach this problem by tariff regulation ?

Mr. GENNERT. If the tariff is reduced we can. Even if we do not buy the goods from Eastman, if the tariff is reduced, we can get the goods from others at such a price that we can compete here.

Mr. Hill. I am just as much opposed to the trust proposition as you are. But the question I want to know about is what is the best

. way of reaching it. If the Eastman Co. has a factory in England, and another in Germany, and the articles they make are put on the free list, how have you helped the situation any?

Mr. GENNERT. To answer your question properly, I would have to know more than I do about the extent to which the Eastman Kodak Co. manufactures abroad.

Mr. G. C. GENNERT. I think I can answer your question. The Eastman Kodak Co. does not manufacture in Germany.

Mr. Hill. Do they in England ?

Mr. GENNERT. They have a factory in England. I do not think they make any cameras in England.

Mr. Hill. Have they any business connection with anybody else in other countries, or is it the same company there as here?

Mr. GENNERT. They have none that I know of. They have offices for the sale of their goods. There was a report some time ago they had joined with a company in Dresden. I tried to verify that report when I was in Germany this summer, but I was assured there was no truth in it by the officers of the company.

Mr. Hill. Are you manufacturing here?
Mr. GENNERT. I manufacture on a small scale here.

Mr. Hill. What would be your judgment if they did have a factory abroad whether putting the product on the free list would in any way relieve the situation ?

Mr. GENNERT. The putting of cameras on the free list will relieve the situation in this way: There are factories abroad at the present moment prepared to supply us with goods appropriate for our use. There are none in the United States. We are making plans now to go into the manufacture ourselves. We are not afraid of the free list. There will always be a certain trade in this country in cameras of foreign manufacture.

Mr. Hill. You are not manufacturing now?

Mr. GENNERT. We are on a small scale. We are preparing to embark on a larger scale. It is only a year since the Houston patent,

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