Wire staples were imported into the United States since 1922, from January 1 to September 21, $127,000; from September 22 to December 3, the date of the tariff, $23; in 1923, $3,000 worth; in 1924, $213,000 worth; in 1925, $9,978 worth. Do you think that importation has a very material effect upon your business? Mr. HEYN. I am very sorry I can not answer you, because I have not got a copy of my brief before me. Mr. GARNER. I just wanted the record to show the amount of importations under the present schedule, and that you gentlemen want an additional tariff to protect you from two or three thousand dollars' worth of competition abroad. Mr. HEYN. If I remember correctly one detail in the brief, it is that the wire staples formerly used to be under a different classification, paying 30 or 40 per cent ad valorem, and under to-day's classification, which wrongfully seems to be under the classification of wire nails, which a wire staple is not in any sense of the word, that allows this particular staple to come into the country, if I remember correctly, for four-tenths of 1 cent instead of 40 cents. Mr. GARNER. But under the present interpretation of it, it is keeping out the imports. Mr. RAMSEYER. The staples you make, are they the kind that we used to tack barbed wire on the fence posts? Mr. HEYN. NO, sir. They are the kind of staples you use to tack sheets of paper together, and records. Mr. RAMSEYER. Are those staples in the same class in the tariff act as the staples we use for tacking barbed wire on to fence posts? Mr. HEYN. No, sir. Mr. RAMSEYER. There is a separate classification? Mr. HEYN. They are different. (Mr. Heyn subsequently submitted the following brief:) BRIEF OF E. H. HOTCHKISS Co., NORWALK, CONN.; BOSTON WIRE STITCHER CO., GREENWICH, R. I.; AND ACME STAPLE CO., CAMDEN, N. J. DESCRIPTION Wire paper fasteners are made from tinned or bright-finished steel, brass, or copper wire 0.019 to 0.05 inch in diameter. They are bent to form a double right angle with parallel legs up to 1 inch in length and are attached to each other laterally for the purpose of inserting in the machine, in a series 44 inches or more in length by a process known only to the American manufacturers and not involving the use of solder. Sample boxes of such American-made paper fasteners are submitted herewith for examination of the committee. USE Wire paper fasteners are so constructed that they can not be used for any other purpose than to fasten together material up to 1 inch in thickness, or its equivalent of 100 sheets of ordinary correspondence paper, and can be applied only through a machine specially designed for the purpose. DISTINCTION Staples, as described in paragraph 331 of the tariff act of 1922, are loose, such as those used for attaching wire screening to fence posts, chicken yards, and the like, or those used in railroad maintenance, while paper fasteners are especially processed in strip form in a series or carried in a series on a specially designed magazine for use in a paper-fastening machine. Those staples contemplated under paragraph 331 of the tariff act of 1922 are not in series and attached, or carried on a special magazine, and can not be used in automatic paper-fastening machines. By a recent ruling of the Treasury Department imported wire fasteners are dutiable under paragraph 331, but prior to that ruling duty was being assessed under various orher paragraphs according to the description given to the fasteners by foreign manufacturers and importers. CLASSIFICATION REQUESTED We propose to show that under the present ruling which classified wire paper fasteners with staples, under paragraph 331, the duty does not protect the domestic industry. We respectfully request that the following clause be added to the end of paragraph 331 of the tariff act of 1922: "wire fasteners (preformed and attached to each other in strips or carried in a series on specially designed magazine of 1 inch or more in length), 40 cents per pound." SUBSTANTIATING EVIDENCE FOR CLAIM We submit the following evidence of the cost of manufacturing wire paper fasteners in this country as compared with the cost of our principal foreign competitors: Fasteners average 10,000 to the pound. Foreign costs are based on the average current wage scale and material cost in European metal trades, our principal competitors. In an effort to meet as nearly as possible the perpetual guarantee on imported paper fastening machines, American manufacturers are forced to rely solely on fasteners rather than on machines for their profit. Replacement cost, therefore, absorbs a major portion of their gross profit. Present selling price per thousand... Selling price per thousand with proposed increase in duty ($0.40 per pound).. In the face of European competition American manufacturers have been forced to quote as low as $0.17 per thousand to the United States Government. German manufacturers have stood and stand ready to quote under whatever price we bid for this business. On January 24, 1929, American manufacturers, we believe, proved conclusively to the subcommittee on purchases, the superiority of American-made wire paper fasteners over the German fasteners which were being sold to the Government at a price considerably lower than that quoted by any American manufacturer. This demonstration also proved that while German-made fasteners soldered together in strip form and made from a smaller size wire might work satisfactorily for a short length of time, they would eventually ruin a paper-fastening machine because of inevitable irregularities in soldering and the difference in size of the wire used. The use of soldering in holding fasteners together in strip form not only decreases to a considerable extent the cost of manufacture but because of the presence of two or more different metals permits electrolytic action resulting in the formation of rust. COMPARATIVE QUALITY AMERICAN American wire paper fasteners are made from a size of wire which fits precisely the requirements of all makes of paper-fastening machines, both domestic and foreign. The absence of solder in the finished product not only prevents rust but eliminates the possibility of clogging the machines. The process by which solder is eliminated from the manufacture of American paper fasteners, while it is considerably more expensive than the soldering process, has been found to be essential to the proper functioning of paperfastening machines. Paper fasteners of American make are absolutely uniform in length. FOREIGN Imported paper fasteners are made from a smaller size of wire than those of American make and are fastened together in strip form by means of solder. The presence of this solder is conducive to rust and the inevitable unevenness of its application causes frequent clogging of paper-fastening machines in which they are used, and the eventual ruin of the machine. Imported fasteners tend to hasten the ruin of the machine. We wish to call attention to the following facts in regard to the imports on wire staples as reported by the Tariff Commission and their relation to our product. 1. As to the discrepancy in the volume of imports of wire staples from year to year ranging from $23 in 1923 to $213,000 in 1925, we have definite knowledge that this variation is caused by the fact that the various sorts and sizes of wire staples imported have not always been assessed duty under paragraph 331, but have been entering the country under different classifications and descriptions. In reality, the quantity of paper fasteners was very much more than the above figures indicate. 2. There has been even a wider divergence in the classifications and descriptions under which wire paper fasteners have been entering the country. 3. For want of a specific clause in the tariff to cover wire paper fasteners, they have been entering the country classified as anything from office supplies to machines and parts thereof. IMPORTANCE OF THE INDUSTRY The importance of the wire paper fastener industry is demonstrated by the fact that during the World War, the United States Government took over almost the entire plant and output of one of the companies that is a party to this brief for the manufacture of paper fasteners and paper-fastening machines for the Allies, and also one company that is a party to this brief manufactured a machine-gun belt for the Browning machine gun out of staples and paper and furnished the War Department with many thousands of them, devoting the greater part of their plant to this product. In the United States there are more than 2,000 employees engaged in the paperfastener industry, and to include the employees employed by the manufacturers of raw material used in the paper-fastener industry, there are many more thousands engaged. The products of the industry have been in use in the offices of all lines of business for over 34 years. The conclusion, we submit from the above is that statistics on the volume of imports of wire paper fasteners, as collected by the Tariff Commission or any other governmental fact-finding body, are consequently so general and inaccurate as to render them absolutely meaningless. We submit this brief as a sufficient demonstration of the ineffectiveness of the existing tariff schedule under paragraph 331 of the act of 1922 and as argument for the insertion of the additional clause which we request. Respectfully submitted. R. H. HEYN. WOOD SCREWS [Par. 338] STATEMENT OF RALPH G. FARRELL, BRIDGEPORT, CONN., REPRESENTING MANUFACTURERS OF WOOD SCREWS Mr. FARRELL. Mr. Chairman and gentlemen, I represent 16 makers of wood screws as well as the Bridgeport Screw Co., of which I am president. We have filed our brief, and we are asking in that brief for a change in the rate of duty from the present rate of 25 per cent ad valorem to a specific duty of 10 cents on sizes over 2 inches; 8 cents on sizes over 1 inch and not over 2 inches; 5 cents on sizes over one-half to 1 inch; 3 cents on sizes one-half inch and under. The present rate of 25 per cent ad valorem is the same rate that was established in the Underwood bill in 1913, and we believe that that rate at present is inadequate. Mr. GARNER. I want to read into the record again, just to show the contrast, if I may, the figures with reference to your industry, and which you are asking protection on. We imported into the United States from 1922, $1,354; 1923, $580; 1924, $2,033; 1925, $12,314; 1926, $6,117; 1927, $5,973; and you exported-I have only the figures for 1923; from 1919 to 1923: $1,186,000; $910,000; $961,000, and $971,000. The Tariff Commission says that is between 6 and 12 per cent of the domestic production. Your imports are less than one one-hundredths of 1 per cent of the production of this country, or 1 will say one-tenth of 1 per cent. Your exports are between 6 and 12 per cent, and you want the duty increased. Mr. FARRELL. That is true, sir. Mr. GARNER. That is all. That is a very clear statement. Mr. FARRELL. But the imports to this market have not really been a profitable market for the foreign manufacturer. Those imports have been kept out of the country by keen competition at home really more than by any help that the tariff has given. The price of screws has been very low. Mr. TREADWAY. Do you agree with this statement: The production is by automatic machines requiring only a small amount of labor, most unskilled? Is that correct? Mr. FARRELL. It is mostly all automatic machinery; all automatic machinery. A fair portion of it is unskilled labor, but the fact remains we have to pay prices to unskilled labor almost as high, in many instances, as for skilled labor. Mr. COLLIER. How much are you asking? Mr. FARRELL. A change from an ad valorem duty to a specific duty. Mr. COLLIER. What specific duty? Mr. FARRELL. To a specific duty of 10 cents per gross on over 2 inches; 8 cents per gross on over 1 inch up to 2 inches; 5 cents a gross on over half inch up to 1 inch; 3 cents per gross on sizes onehalf inch and less. Mr. COLLIER. How much will that increase the duty? Mr. FARRELL. That is on the basis of an ad valorem, from 20 per cent up to about 70 per cent. Mr. COLLIER. These screws that you are speaking of, are they used in the furniture and chest and boxes? Mr. FARRELL. Yes, sir; and hardware and all that sort of thing. Mr. RAGON. How much increase would this make? Mr. FARRELL. That would increase the rate on some sizes from 25 per cent at present to about 70 per cent, and decrease the rate on other sizes from 25 per cent at present to about 20 per cent. (Mr. Farrell submitted the following brief:) BRIEF OF MANUFACTURERS OF WOOD SCREWS COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C.: The undersigned manufacturers of screws respectfully recommend changes in duties on imports of iron and steel wood screws. The present paragraph 338 provides an ad valorem duty of 25 per cent. In order to equalize the cost of material and wages in competing foreign countries, we suggest that the wording of the paragraph be changed to read as follows: Screws, commonly called wood screws, of iron or steel: More than 2 inches in length.... Over 1 inch in length and not more than 2 inches in length.. Cents per gross 10 8 5 3 The present rate of 25 per cent ad valorem is insufficient to equalize the costs at home and abroad. Any ad valorem duty which would equalize the costs on the larger sizes would be utterly inadequate on the smaller sizes, as the proportion of labor to the total cost rapidly increases as the sizes decrease. The specific duty that provided protection in 1909 would not equalize to-day's costs; the present rate is the same as in the tariff act of 1913. The increase in labor costs is shown as follows from the factory pay rolls of subscribers: The foreign-labor rates have shown no such percentage of increase, hence the necessity for a specific duty. VOLUME OF BUSINESS The total volume of the wood-screw business is approximately $10,000,000 per annum. Many firms conduct this in connection with some other industry; thus it is impossible exactly to state the number of people exclusively employed in the manufacture of this product. A conservative estimate would be that 3,500 are engaged principally therein but that several thousand more work some part of their time in producing these goods. Many users of large quantities of screws make their own and sell their overproduction to the trade. Accurate statistics of such manufacturers are not available. COMPARATIVE COSTS The material used (bright steel wire) is quoted at continental ports at from $1.57 (Belgium) to $1.62 (German) per hundred pounds. The Pittsburgh base price is $2.50 per hundred pounds. We have disregarded herein the transportation charges, as the cost of moving screws from continental ports to New York is from $4 to $6 per long ton; the freight rates from New England points of manufacture to New York are as high. The wire rate from Pittsburgh to New England is 362 cents per hundred pounds. The American manufacturer has no country-wide advantages. |