In some plants this percentage of boys will run as high as one-quarter of the total employees. The English rate for these apprentices starts with $3 a week for boys 14 years old and ends with $8 per week for boys 20 years old. POSITION OF THE TEXTILE MACHINERY COMPANIES The manufacture of textile machinery has grown up as an integral part of the great textile industry of this country. It furnishes new equipment, repairs, service, and research work. It has developed many useful and important inventions. The development and encouragement of the textile machinery industry is absolutely essential to the well-being of the textile mills. In this connection the American textile manufacturers have from time to time indorsed the plea of the manufacturers of textile machinery that they have adequate protection. In time of war the textile machinery industry is a necessity to this country. Its importance was fully recognized by the Government during the late war and everything was done to expedite the manufacture of textile machinery. The establishments in this industry furnish well-paid employment directly to over 25,000 citizens, and indirectly to many more. It is obvious that the textile machinery industry of this country is in a critical and depressed condition. Its future is uncertain. It may be largely destroyed if invasion of its market by foreign builders on a large scale is not prevented. Experience has shown that a tariff of 45 per cent is necessary to give adequate protection and foster the growth of the industry. The present rate of 35 per cent is too low and the rate of 45 per cent should be restored before the industry is overwhelmed by competition from the powerful foreign builders driven into our markets by the shrinkage of demand in their own. Respectfully submitted. HENRY R. GUILD, Attorney, 1 Federal Street, Boston, Mass. SUPPLEMENTAL BRIEF OF TEXTILE MACHINERY MANUFACTURERS To the COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. GENTLEMEN: This supplemental brief is filed with the committee on behalf of the principal manufacturers of textile machinery of the United States. TEXTILE-MACHINERY INDUSTRY OF UNITED STATES SMALL AS COMPARED WITH The textile-machinery industry of the United States is relatively small and insecure as compared with its great English and European competitors. The industry in England particularly has grown to huge proportions and to-day is developed and equipped to take care of a domestic market approximately twice as large as our own, and in addition a great foreign market, particularly in India, China, Japan, and South America, as well as the English Dominions of Canada and Australia. It is literally true that in size and number of plants, productive capacity, and financial resources the foreign builders are greatly superior to the textile machinery companies of this country. We usually think of American industries as being overwhelmingly big as compared with their European rivals. This is true in the case of industries like steel, automobiles, electrical equipment, etc. In the textile machinery business, however, exactly the reverse is true, and this fact deserves the strongest possible emphasis in any consideration of the tariff. MASS PRODUCTION METHODS WITH ATTENDANT ECONOMIES NOT POSSIBLE IN TEXTILE MACHINERY INDUSTRY Textile machinery is not a standardized product. Most orders for textile machinery are manufactured to specifications which fit the particular customer's requirements. It is what might be called a job shop business. Because of this fact it has not been possible in the textile machinery business to introduce highly specialized machine tool equipment and adopt methods of mass production, such as prevail in typical large American industries. As a result, the textile machinery manufacturers of the United States have not been able to realize the economies that result from mass production and from the extensive use of special purpose tools, working on highly repetitive operations. Instead, they have been forced to keep their equipment elastic and available for many different purposes, and have, therefore, been denied the advantages over European producers which other industries in the United States have realized from the extensive use of special purpose high-speed tool equipment and mass production of standardized products. In consequence, there has been no offset in the textile machinery business to the much lower wage levels of the European producers. AMERICAN BUILDERS USE SAME EQUIPMENT AND METHODS AS FOREIGN RIVALS BUT PAY WAGES 2 TO 4 TIMES HIGHER It is an actual fact that the European builders to-day are using practically the same type of tool equipment as is found in the plants of the American machinery builders, and are operating this equipment with employees who receive wages ranging from one-fourth to one-half of those paid in plants of this country. In other words, the American machinery builders are competing on equal terms with the foreign builders as regards the efficiency of mechanical equipment used, and are paying wages which are two to four times those paid by the European builders. Nor is there any notable difference in the productive efficiency of the individual workman using the same kind of tools on the same class of work. It is clear, therefore, that under these conditions the American machinery builders can not compete successfully unless they are given adequate tariff protection. GREAT ENGLISH BUILDERS RENDERED DESPERATE BY RESTRICTION OF THEIR OWN MARKET, BEGINNING TO TRY OUT UNITED STATES MARKET The greatest threat to-day is from the large and numerous machinery building plants of Great Britain. One of these plants alone-namely, Platt Bros. (Inc.), has a capacity so large that when running on full time it employs more men than the combined plants of this country engaged in the manufacture of cotton preparatory and spinning machinery, which group includes the largest textile machinery plants in the United States. This great company, and others not so large, but larger than similar companies in the United States, find their home market greatly restricted and badly depressed. They must find other compensating outlets for their production. Naturally they will fight hard for a considerable proportion of the business in the market of this country, as soon as buying of new machinery revives to any considerable extent. The only reason they have not done this during the last few years is because the volume of business in the American market has been so small that it did not attract them, and furthermore, because the domestic builders, starved for business themselves, were determined to take such business as was offered in order to hold the nucleus of their organizations and continue running their shops on short time, thus keeping themselves alive and in readiness to serve the textile industry later when conditions improve. This necessity for getting some business in order to keep alive is also the principal reason why a small amount of textile machinery is exported each year by the American builders. In preparing statements regarding the need for tariff protection it is sometimes the practice to overstate the case for the claimant, with the result that all statements regarding the need for tariff protection are likely to be discounted because of this tendency toward exaggeration. In the case of the textile machinery builders of this country, however, it is the literal, sober truth that they are facing a very critical situation, and unless the threat of increased competition from abroad is warded off by the restoration of the traditional rate of tariff of 45 per cent, under the protection of which the industry has grown up, its future will be placed in serious jeopardy. SPREAD BETWEEN AMERICAN AND FOREIGN LABOR COSTS GREATER TO-DAY The need for tariff protection to-day is greater than it has been in the last 25 years or since the industry was well established, because the spread between the American and European standards of living, and standards of wages is greater than ever before. The tariff rate of 45 per cent was found necessary prior to the war and it is much more necessary to-day to equalize the greater differential in labor costs between domestic and foreign plants. As already stated, also, there have been no compensating advantages in the way of mass production economies and increased tool efficiency to offset the increased differential in wage costs. The character of the business does not permit of such advantages, and to-day the American machinery builders are facing the real and growing threat of foreign competition after having been weakened by five years of disastrous business, and with a wage level in their plants higher in relation to that of their competitors than it has ever been before. Unless Congress recognizes this situation and unless the serious significance of it is registered in the minds of those who have in charge the drafting of the new tariff bill, one of the smaller but absolutely essential industries of the country will be badly crippled and even threatened with partial extinction and it can be said without fear of intelligent contradiction that the maintenance on a sound basis of the domestic machinery industry is vitally important for the rehabilitation and continued well being of the great textile industry of this country. RESTORATION OF TRADITIONAL 45 PER CENT TARIFF MORE NEEDED TO-DAY THAN EVER BEFORE Already during the past five years several large and well-known plants in the American textile machinery industry have been abandoned. Many of the American builders have lost money steadily since 1923. Their operations are still on an unprofitable basis, and they can not continue to lose money indefinitely and survive. They should be preserved because the harassed textile industry of this country urgently needs them and can not be adequately served by the foreign builders. Yet they can not survive if they do not receive a price for their product governed by American standards of living and wages. This they can not do if the imminent and growing threat of destructive European competition is not averted by the restoration of the tariff of 45 per cent which has been in effect during the greater part of the industry's existence and which is more needed to-day than ever before. LARGE STEEL VESSELS AND CYLINDERS [Par. 372] STATEMENT OF F. BRADLEY, REPRESENTING THE MIDVALE CO., NICETOWN, PA. Mr. BRADLEY. Reaction chambers, drums or vessels, or stills, are a new development since the last tariff, and were not covered at that time. They come in under the head of paragraph 372, machinery, and so forth, at 30 per cent ad valorem. It is possible that you would like to look at these photographs, which give you a certain idea of the subject [handing photographs to the committee]. In the last few years the oil, steam, and chemical industries have required strong forged vessels of all sizes. These chambers were needed to withstand safely the high pressures and temperatures. have assisted and helped in the design and development of their desires. They have been made of all sizes, from 10 inches up to 90 inches in diameter, and up to 50 feet in length, weighing up to 250,000 pounds. These chambers utilize special equipment and a highly trained organization, which we had for our ordnance manufacture. We have standardized and simplified our design to reduce costs, but we find, more and more, a severe competition from Krupp and the German ordnance plants. The making of these chambers requires a highly skilled class of labor, receiving in this country about 90 cents to a dollar per hour. The same class in Germany receives from 30 to 35 cents. Approximately 75 per cent of the cost of these chambers is in the labor. As the development stage passed and the design became more standardized, the competition from Krupp became more and more severe. Also the lapse of time since the war has made concerns buy from Germany when the price was low. Hardly an order is sold that we are not confronted with a German selling price which is below our costs. If we are to keep up this splendid equipment and highly trained organization, able to make the vital parts of our chemical and our power and our oil industries, and also to be used in time of need for national defense, we ask that a tariff be put on these reaction chambers of 2 cents a pound and 50 per cent ad valorem. This tariff is needed to offset the low wage scale in Germany. This subject is so large and has so many ramifications that it is rather impossible to present it in this time, and I would like permission to file a brief going more into detail. (Mr. Bradley submitted the following brief:) BRIEF OF THE MIDVALE Co. COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. GENTLEMEN: Pursuant to the permission granted by your committee on January 15, 1929, following the statement of Mr. Francis Bradley, general superintendent of the Midvale Co., on steel vessels and cylinders, variously designated, and used in the fertilizer, chemical, oil, power, and other industries, this brief is presented for your information and consideration. In 1922, due to the application of chemical reactions at high pressures and at elevated temperatures on a large scale in industry, there began in this country a commercial need for large steel vessels and cylinders capable of withstanding safely exacting conditions of both or either pressure and temperature. About 10 years earlier a similar need arose in Germany to make commercially practical the manufacture of synthetic ammonia which was so successfully developed during the war and was so essential to that nation through its derivatives, especially nitrates for fertilizer and other products. One of the first commercial applications of these vessels in this country was in improved methods of "cracking" crude and low-grade oils to increase their gasoline yield. Since that time these vessels and cylinders have made possible the application of many high-pressure high-temperature reactions, making products such as fertilizer, ammonia, nitrates, "antiknock" gasoline, methanol, and high alcohols used as solvents in lacquers, paints, etc. The future use of these vessels in this new field of high-pressure high-temperature reactions seems reasonably certain to be an increasing one. It is well established that steam at pressures and temperatures higher than those in common use can be used more effectively, especially when converted to electric power. Under these high-pressure high-temperature conditions the riveted type of boiler drum is not safe and since 1924 a considerable number of large seamless forgings have been made and used as boiler drums. The use of these drums is increasing. We The manufacture of these steel vessels on which we are asking protection is a new industry. The vessels vary in design, chemical composition and size. have partly or entirely designed, and completely manufactured, vessels up to 90 inches in diameter, over 50 feet in length, and weighing as much as 250,000 pounds. The largest sizes require a steel ingot weighing more than 200 tons to start their manufacture. A group of photographs illustrating various types is attached as Exhibit A. The present price of these vessels and cylinders in this country is from 10 to 50 cents per pound, the variation depending on size, design, composition of the steel and amount of machining and assembly. Throughout the whole development and manufacture of these vessels in this country we have had to contend with prices quoted by firms abroad, especially Krupp in Germany, lower than our costs. We believe it absolutely hopeless for American firms to try to sell this product abroad. The difficulty of selling our products to American industry at prices higher than those at which the same products can be secured abroad, has increased as the elapsed time since the war becomes greater and as the various designs of the vessels have progressed through the development period and have become more standardized. Obviously, a manufacture of this character requires highly skilled and specialized labor, special equipment and engineering personnel. These manufacturing requirements were fortunately available for this new industry in the form of the equipment and organizations used in the manufacture of heavy ordnance, for which there has been absolutely no demand since 1922. The manufacture of these vessels is the only replacing business which has developed, or seems likely to be developed, to employ the large equipment and highly specialized knowledge essential for large ordnance manufacture, and so retain these resources for the benefit of the Nation. The need of these vessels has made possible the operation, in a small way, and maintenance of this unusual ordnance equipment, and the retention of human organizations capable of conducting this manufacture which is technically very closely related to ordnance manufacture. It is of the greatest importance to realize that the equipment and organizations capable of manufacturing these vessels are the only ones in this country (excepting some unmanned Government equipment) that are available to serve the country in the manufacture of the larger types of ordnance for national defense or in case of national emergency. It is noteworthy and significant that though ordnance manufacture in Germany has been forbidden by the treaty of Versailles, yet in that country ordnance equipment and organizations for ordnance work have been kept occupied and available by the manufacture of these types of vessels and it is reliably reported that new equipment is being built of increased size and capacity. While data are not at hand to give an accurate estimate at current prices of the investment required to build a plant to make these vessels, an approximate estimate of $4,000,000 to $5,000,000 is not too high. The amount of business in the manufacture of these vessels available at the pressent time, and probably for some time to come, could not possibly justify building a new plant for such manufacture. We would like to state the exact imports of these vessels and cylinders, but we lack the complete data on account of lack of a specific classification covering these products in the existing tariff act. However, an indication of the imports is shown by Exhibit B attached, which is a photostatic reproduction of a portion of a pamphlet describing the products under discussion, issued by Krupp's in Essen, Germany. It is seen that from July, 1922, to December, 1925, Krupp's supplied to industry a total of 324 of these vessels distributed as follows: 243 vessels to Germany; 3 vessels to Holland; 4 vessels to England; 10 vessels to Italy; 2 vessels to Switzerland; 22 vessels to Hungary; 2 vessels to Sweden; 8 vessels to Austria; and 30 vessels to the United States. During the same period, the only American manufacturers of these products, Midvale and Bethlehem, made a total of only 134 vessels, all for domestic use. Krupp, therefore, supplied almost 20 per cent of the needs of the United States. It is evident that Krupp is maintaining and utilizing its equipment and organization by this manufacture of steel vessels and cylinders. This manufacture, so very similar to ordnance manufacture, not only supplies Germany, but also supplies the needs of most of Europe, and a substantial part of that required in the United States. We know of no complete data of shipments into this country from abroad since that quoted. The period described covers development years in this country when close contact between the designers and engineers of the users and manufacturers of these vessels was highly necessary. This contact offered domestic manufacturers a chance to obtain business in spite of the considerably lower prices quoted by foreign manufacturers. As design and manufacture have become more standardized, this reason for purchase of American vessels and cylinders is becoming ever less, and business is placed on a more strictly commercial basis. This situation will be accentuated in the future. Moreover, an account of the low foreign prices, the portion of the business the American manufacturers have been able to secure, was at prices on the average less than could yield a reasonable margin of profit. We believe imports from Germany have increased, and were probably as much as 25 per cent of the consumption in this country in 1928. Between 75 per cent and 90 per cent of the ultimate cost of these vessels is labor. Since it is so firmly established and accepted that labor costs abroad, particularly in Germany and Czechoslovakia, is less than one-third the cost in the United States, it seems needless to elaborate on this condition except to point out that the difference becomes greater when the costs of the highly skilled and |