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PARAGRAPH 108-CAMERAS, LENSES, ETC.

which controlled the camera, expired. Before that the Eastman Kodak Co. had absolute control, except of a license owned by the Ansco Co.

Mr. HILL. While I am opposed to the trust proposition, I can not quite see how, for instance, taking sewing machines that are made here, and then having the same machines made as extensively abroad as here how it is going to relieve the situation by putting such an article on the free list, when it can be made abroad cheaper than it can be made here.

Mr. GENNERT. I have not said it could be made abroad cheaper. I do not believe the kodak company would save any money by manufacturing in Europe.

Mr. HILL. They certainly are not barred out of England by a protective tariff, and if they have a factory in England there would be nothing to prevent them making them there, and if they could make them cheaper, selling them over here in competition. Mr. GENNERT. They do not make them in England. They export to England, Germany, and France, as far as I know. The exports amount to more than half a million dollars, photographic cameras aloné.

Mr. HARRISON. What do the imports amount to?
Mr. GENNERT. They are very small.

Mr. HARRISON. About one-half million came in under paragraph 108, but they are classed by the Treasury Department with these other goods, under the same paragraph, and we do not know what proportion was photographic material.

Mr. GENNERT. It is so infinitesimally small they could not be considered separately.

Mr. HARRISON. Putting cameras on the free list, then, would have no effect upon the revenue?

Mr. GENNERT. None whatever. It would, in so far as the imports would increase, and if there was a light duty the Government would have that advantage. Of course, if they are put on the free list that would not be the case.

Mr. DIXON. Do the Eastman people manufacture everything that goes to make up a camera?

Mr. GENNERT. They manufacture everything that is used in photography.

Mr. GENNERT. In conclusion I would like to read the suggestion I have taken the liberty to put into my short brief. We request the following new paragraphs in the law that is being prepared, in place of the present duty of 45 per cent on cameras levied as optical instruments under paragraph 108 of the present tariff law:

1. Camera bodies not optically equipped and parts thereof to be free. 2. Cameras optically equipped, 15 per cent ad valorem.

Mr. Chairman and Members of the Ways and Means Committee:

I am here before your committee for the purpose of requesting changes in the tariff on photographic cameras. These changes, if made, will tend to free the trade in these instruments from the unfair selling restrictions under which it is now laboring, by reason of the fact that the entire photographic supply business in this country is controlled by the Eastman Kodak Co. These changes would increase the revenue to the Government by changing the present condition of merely nominal imports to one of considerable importation, and would benefit the public by making possible a reduction in prices.

PARAGRAPH 108-LENSES, CAMERAS, ETC.

Some years ago there were a number of factories engaged in manufacturing cameras in America. At the present time one single company, the Eastman Kodak Co., which has absorbed the most importantcamera factories of this country, is producing at least seven-eighths of all the cameras made in America; the Eastman Kodak Co. is selling cameras to retailers under a restriction policy and refuses to allow anybody to sell its cameras who either sells cameras made by any other manufacturers or who sells films used in the cameras which are not the product of the Eastman Kodak Co.; this same principle they apply at will to their other products.

That the charge that this company is a trust in violation of the Sherman law is not an empty statement, is best evidenced by the fact that this company's methods are now under investigation by the Department of Justice, where detailed information can most easily be obtained by this body.

I append a copy of a letter received by my firm from a dealer in photographic materials in New York City, whose name I will not give, unless this committee requests the same, in order that this dealer may not be cut off from further supplies of goods by the Eastman Kodak Co. The letter is as follows:

"We are returning herewith 1 Ensignette camera, list, $10; 1 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."

This letter is dated March 27, 1912, and is one of a large number of similar import, which we are prepared to submit to this body.

That the Eastman Kodak Co., which not alone dominates but controls the entire photographic business of this country in cameras, plates, and films, is in no need of a protective tariff is best evidenced by the fact that it has paid in 1911 and 1912 a dividend on its common stock of 40 per cent per annum, and that its earnings on the common stock for 1911 were 57 per cent, the common stock amounting to about $20,000,000. My firm, for instance, is unable to buy any goods or to buy any cameras or films from the Eastman Kodak Co. simply because we have the temerity to wish to sell also films and cameras not manufactured by the trust. Under these trade conditions and particularly in view of the high duty of 45 per cent levied on cameras, competition has been impossible, and we have been forced to go to Europe to get our cameras, which we must import and sell with very little profit. This is a situation from which we now desire relief.

Cameras have never been specifically provided for in any of our tariffs; they have been classified by the board of appraisers as optical instruments, which we contend they are not. Cameras are made up of a camera body and a lens, which latter is an optical instrument. The camera body is certainly not an optical instrument.

The lenses, and the shutters used to govern the quantity of light admitted through the lens, both of which are properly optical instruments, are not under the domination of any trust in this country, and their manufacture is independently and successfully carried on in the United States at present under proper and fair conditions, quite different from the completely equipped cameras.

We desire to import camera bodies as we have been doing in the past-that is to say, cameras not equipped with a lens and shutter---for the reason that we can not buy these bodies in America. After their importation we will equip these bodies imported from abroad with lenses and shutters of American manufacture, thus giving employment to American labor. The optical portion of the camera-that is to say, the lens and shutter originally constitutes about one-third of the value of the completely equipped camera. We request, therefore, the following new paragraphs in the law that is being prepared in place of the present duty of 45 per cent on cameras levied as optical instruments under paragraph 108 of the present tariff law: 1. Camera bodies not optically equipped, and parts thereof, to be free. 2. Cameras optically equipped, 15 per cent ad valorem.

We feel sure that if these changes in the tariff law are made, the present importa tion of cameras, which is so small that the Department of Commerce and Labor furnishes no statistics in regard thereto, will be increased at least fourfold over the present figure, of less than $50,000 per annum, an amount to which the undersigned is no doubt the largest contributor. Opposed to this small amount are exports of cameras and other photographic apparatus which amounted for the nine months ended March, 1912, to $535,158, an amount shown by the last statistics of the Bureau of Commerce and Labor to be on a constant increase. Respectfully submitted.

NEW YORK, January 9, 1913.

G. GENNERT,

24 and 26 East Thirteenth Street, New York, N. Y.

PARAGRAPH 108-LENSES CAMERAS, ETC.

LETTER OF WILLIAMS, BROWN & EARLE (INC.), REGARDING LENSES, ETC.

CHAIRMAN OF COMMITTEE ON WAYS AND MEANS,

PHILADELPHIA, January 10, 1913.

House of Representatives, Washington, D. C.

DEAR SIR: We desire to call your attention to the unnecessary duty on microscopes, photographic and projecting lenses.

Microscopes are manufactured in the United States to-day and sold at prices which are as low as goods of similar quality can be imported into the United States. It, therefore, is not necessary for any duty to be levied on microscopes, so far as a protection to the industry is concerned.

The American manufacturers of photographic and projecting lenses are amply able to compete with their product without any duty being levied upon such lenses. Microscopes, photographic and projecting lenses are scientific instruments used in the arts and therefore should be free of duty so as to enable institutions and individuals engaged in research work and investigation to get their goods at a lower price.

Many physicians of limited incomes are deprived of the use of a microscope owing to the high prices that are charged on account of the duty which is levied on the foreign product and on account of the large profits made by the American manufacturers on microscopes.

We hope, therefore, that you will remove the duty on microscopes as well as on photographic and projecting lenses, neither of which are luxuries, but are intended for scientific research and purchased by those who are not able to expend large amounts of money and are used by them in many cases for a lifetime in their profession or occupation.

Yours, very truly,

WILLIAMS, BROWN & EARLE (INC.),
HENRY S. WILLIAMS, President.

REQUEST OF CALIFORNIA CAMERA CLUB, REQUESTING THAT PHOTOGRAPHIC APPARATUS BE PLACED ON FREE LIST.

Hon. OSCAR W. UNDERWOOD,

SAN FRANCISCO, CAL., January 16, 1913.

Chairman Ways and Means Committee,

House of Representatives, Washington, D. C.

DEAR SIR: The California Camera Club, an organization in this city of about 400 users of photographic apparatus, and no doubt representative of the attitude of thousands of other photographers, at a recent meeting passed a resolution to be presented to your honorable committee, asking that in the proposed revision of the tariff downward, the excessive duties of 45 per cent prevailing on photographic apparatus be removed altogether and they be placed on the free list or the duty reduced to some figure that is equitable to thousands of consumers.

It is alleged as a special and good reason for drastic action on the part of your committee on this schedule, and it is a matter of common knowledge that the business of the United States in photographic apparatus and supplies, with the exception of a comparatively negligible amount, is done and controlled by one concern and its several subdivisions, and that this concern by a trade agreement rigidly enforced for the past 12 years upon dealers in photographic supplies, has prevented the development and marketing of competitive photographic products.

As an example of the working of this restrictive system, it is cited that the San Francisco City directory of 1912 list 26 exclusive dealers in photographic products, of whom there is only one known to be not doing business under this trade agreement. This condition is universal throughout the country. The only relief for the consumer from this noncompetitive condition is by purchasing abroad where supplies and apparatus of the highest character can be had at reasonable prices, but this relief is denied him because of the prohibitive protective tariff duty.

It is a well known fact that the concern referred to above does an enormous foreign business in its products in Europe and England as well as in other parts of the world, under keenest competitive conditions prevailing there, and it is self-evident that a protective tariff duty is not needed in this country excepting as it has served during the past 12 years as a bulwark to the non-competitive business policy of this concern

PARAGRAPH 108-LENSES, CAMERAS, ETC.

enforced through its trade agreements. During the period referred to, it is not known to have given the consumer the benefit of any reduction in price originally established. It is also asked that relief be afforded from the prohibitive duty of 45 per cent on photographic lenses, particularly in relation to scientifically corrected lenses known a anastigmats, which are universally used in the arts and sciences in the production of accurate photographic work.

As an incident of the controlled development of the photographic business of the United States as referred to above in this communication, there has in consequence developed in this country only one large and prominent manufacturer of photographic lenses. We believe investigation will show that his concern, which manufactures the bulk of corrected American-made lenses (under German patents and royalty) is publicly advertising and selling its lenses abroad at figures corresponding to prices charged consumers in this country less the 45 per cent duty.

It is necessary in this communication to cover the contingency that in your hearing there may be representation by other so-called American manufacturers of foreign lenses against a reduction of duty. It is therefore desired to call to your attention that there are several concerns of this kind who import the glass elements of expensive anastigmat lenses unmounted ready for assembling and bringing them in under the low duty charged against unmounted lenses. These finished lenses ready for assembling are mounted at small cost compared to the cost of production of the glass elements in metal cells and sold to the American purchaser at a price that includes the full 45 per cent duty, notwithstanding the fact that no such duty has been paid. Basing our information as to the high cost of anastigmat lens on the information thereon given by manufacturers in various lens catalogues the bulk of the cost of such len undoubtedly lies in the grinding and finished polishing of the lens elements and the culling out of faulty lenses after all the work on them has been done.

The various allegations made above concerning these various concerns are not made for the purpose of criticising them, but for the sole purpose of showing that an intolerable and unjust condition has existed for years, which was in part made possible by high protective tariff duties, which without the tariff would quickly and equitably regulate itself.

Abroad, where free trade or reasonable duties prevail, no such condition exists, and there is the keenest competition and wide varieties of photographic manufacturers for purchasers to select from. The condition in this country, it is contended, has stifled individual enterprise and native ability, and where in other lines we are preeminent such is not the case in photography.

It may seem irrelevant in a communication of this character to make such assertions, but it is an interesting fact that the epoch-making discoveries and inventions in the art and science of photography in the last 10 years, as instanced by the discovery of color photography by Lumere and the invention of new anastigmat lenses and developments of the chemistry of photography, have been made abroad and not in the United States.

The California Camera Club four years ago, at the time when this schedule of the Payne-Aldrich bill was up for revision, took up the matter of the reduction of these duties in a personal communication to the chairman of that committee, and the only acknowledgement of it was that it had been received and filed.

We trust that our interests and the interests of thousands of others who are not able
in any other way to present their case to your committee will fare better at your hands.
Begging leave to remain, we are,
Respectfully, yours,

RESOLUTION COMMITTEE OF THE CALIFORNIA CAMERA Club,
C. B. AUERBACH, Chairman.

BRIEF OF SENECA CAMERA MANUFACTURING CO., OF ROCHESTER, N. Y., RELATIVE TO THE DUTY ON PHOTOGRAPHIC CAMERAS.

ROCHESTER, N. Y., January 15, 1913.

To the Committee on Ways and Means of the House of Representatives:

The Seneca Camera Manufacturing Co., of Rochester, N. Y., files this statement relative to the tariff upon photographic cameras in answer to the statement of Mr. G. C. Gennert, an importer and dealer of New York City, made to the committee on January 9, 1913.

The present duty is 45 per cent ad valorem under paragraph 108.

PARAGRAPH 108 LENSES, CAMERAS, ETC.

The Seneca Camera Manufacturing Co. is engaged in the manufacture of photographic cameras at Rochester, N. Y. It manufactures no other line of goods. It has an investment of at least $125,000 in that business and employs at least 175 hands upon the average throughout the year in the manufacture of cameras. Mr. Gennert advocates such change in the law as shall put camera bodies not optically equipped and parts thereof on the free list and a duty of 15 per cent ad valorem on cameras optically equipped. In support of this he states:

First. "That domestic dealers like himself in photographic cameras can not buy and sell cameras of domestic manufacture, because the entire supply thereof is controlled by the Eastman Kodak Co. That the Eastman Kodak Co manufactures seveneighths or more of the domestic product. That no domestic manufacturer of photographic cameras can compete with the Eastman Kodak Co."

The fact is that there are five substantial business concerns manufacturing photographic cameras in the United States, all of which are wholly independent of the Eastman Kodak Co. and are successfully competing with it. These are: The Ansco Co., Binghamton, N. Y.; Burke & James, Chicago, Ill.; Connolly Camera Co., Rochester, Minn.; Gundlach-Manhattan Optical Co., Rochester, N. Y.; Seneca Camera Manufacturing Co., Rochester, N. Y. In addition there are some smaller companies which it is not necessary to mention.

The foregoing five establishments have an aggregate investment in the manufacture of photographic cameras of at least $750,000. They have upward of 850 employees in that line of manufacture alone and they produce at least one-fourth and probably one-third of all the photographic cameras sold in the United States. Mr. Gennert can buy domestic made photographic cameras from any one of the above-named five concerns on terms which will enable him to compete successfully, so far as the character of the product or the price is concerned, with the cameras manufactured by the Eastman Kodak Co. For several years he has purchased cameras of the Seneca Camera Manufacturing Co. For the year 1910 his purchases from that company amounted to $6,855; for 1911 to $5,053; for 1912 to $4,258.

Mr. Gennert states:

Second. "That the placing of photographic cameras upon the free list would not affect any domestic production except that of the Eastman Kodak Co., which needs no protection because its profits have been so large that it is paying annual dividends of 6 per cent on upward of $6,000,000 of preferred stock and 40 per cent on upward of $19,000,000 of common stock, the common shares of the par value of $100 having now a market value of upward of $700 each."

The profits of the Eastman Kodak Co., as shown by the value of its stock and by the rate of dividends which it is now paying are correctly stated, but the inference that these profits are made from the manufacture and sale of photographic cameras is wholly incorrect. The Eastman Kodak Co. has never made any unusual profit from the manufacture and sale of cameras, which is but a very small part of its business. For many years that company has manufactured and sold a complete line of photographic goods, including besides cameras, photographic papers, plates, and films, development apparatus and supplies, moving-picture films, etc. Until the year 1906 it had never paid a dividend upon its common shares of more than 10 per cent. Up to 10 years ago its preferred and common stock was selling at par or slightly above par. Then came the moving-picture business, for which it manufactures the films. It has now a complete monopoly of the manufacture of moving-picture film in the United States and a complete monopoly of supplying moving-picture film to the moving-picture establishments in the United States. This business has proved enormously profitable and accounts for the extraordinary profits of the company.

Mr. Gennert also states:

Third: "That the Eastman Kodak Co. refuses to permit dealers in photographic supplies to purchase and sell its goods if the dealer undertakes to sell a camera of any other manufacturer. Having stated that there was no, or substantially no, domestic production except that of the Eastman Co., he leaves the inference to be drawn that the Eastman Co. would be properly dealt with by putting its product on the free list." It is true that the Eastman Kodak Co., by methods which are probably within the law, restricts its retail dealers to the sale of its products exclusively. The independent manufacturers of photographic apparatus and supplies have suffered enormously from this practice of the Eastman Co. They have maintained their position in spite of it. They would welcome the abolition of this practice and the removal of this obstacle to their growth heartily, as heartily as Mr. Gennert would, for their interest and his in that respect are identical. They fail, however, to see how the removal or reduction of the duty upon cameras would accomplish that even to the slightest

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