The equipment is all of American manufacture, and the quality is equal or superior to that available in any foreign countries.

Methods of production. Electrical machinery is highly standardized, and the manufacturing methods are systematized to a high degree. Hand labor is required in some operations, such as winding transformers and armatures for generators and motors, and careful supervision is necessary in many of the machining processes. Foreign processes are not greatly different, although handwork is used to a somewhat greater extent. In designing a machine of given operating characteristics, in order to obtain the most economical construction, there is taken into account in this country a somewhat different balance between labor and material from that existing in Europe. Organization. For the manufacture of heavy power apparatus, large organizations and capital investments are required; these are justified only by a large market. The expense of maintaining an engineering and research organization would also tend to limit the production of this class of apparatus to the larger corporations. These conditions do not apply with as much force to the manufacture of fan motors and other small motors, as they are more standardized and are generally bought by purchasers less exacting than the users of large generating equipment. But even buyers of small motors, who are not usually equipped to test the machines themselves, often prefer the product of a large corporation of well-known reputation. The capital invested in this branch of the industry can not be given, as firms making power equipment also make many other products. The capital invested in the entire industry was reported in 1919 at $857,855,456, as compared with $355,724,756 in 1914. There are 4 or 5 firms producing the larger apparatus and 40 or 50 making small machines and appliances.

Geographical distribution. The two largest electrical manufacturers are located in New York and Pennsylvania, and the bulk of the production is from the North Eastern and North Central manufacturing States.

History of the industry. The development of electrical-power apparatus has followed that of appliances for the utilization of the electrical current, most important of which are the electric lamp and the motor. The incandescent lamp was invented about 1880, and its development was rapid. The use of the electric motor for railway and other purposes was well started by 1890 and has continued without interruption. More recently the development of electrochemical and metallurgical processes has opened another broad field for the use of electric current. In all these fields the largest growth has been seen in the United States; this is due both to the advanced position held by American inventors and engineers and to the size and rapid growth of the country.

Domestic production and consumption. A rigid classification can not be made of the items included under this title. Production of the principal items was reported by the Census of 1914 as $95,375,767, and in 1919 as $273,258.885. The domestic consumption is practically all supplied by American manufacturers.

Exports. From 1913 (the first year for which separate figures are available) to 1916 the exports of this class of electrical machinery averaged about $7,000,000 per annum. After 1916 the increase was very rapid, and in 1921 shipments to the value of $38,000,000 went

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to foreign markets. Before the war Great Britain and Germany, which were then the largest exporters, had a great advantage over American manufacturers, since the public utilities of the less developed countries were largely influenced by German and British capital. American products are directly competitive with those of foreign make, and European-controlled public service corporations and industrial enterprises bought principally the products of their home countries.

Pre-war prices in many of the export markets were reported to be considerably lower for German than for American machinery, but. on the other hand, the reputation of American goods was high, often better than that of the German. Germany's greatest markets were the less developed countries of Europe and South America. British dominions were large consumers of British products.

At the beginning of the war, however, the European supply was largely cut off, and there remained as sources of supply only the United States and Japan, of which America was much the larger producer. so that domestic manufacturers obtained a large share of the trade of the world, including Europe, British dominions, and South America. Japan is strongly intrenched in the Chinese market, especially as regards the smaller apparatus. Other competitors in the export markets are Switzerland and Sweden; the former is especially strong in the heavier machinery.

FOREIGN PRODUCTION.

Before the war the United States was the largest producer of electrical machinery; it was followed closely by Germany and Great Britain. Other producers, though on a much smaller scale, are France. Switzerland, Belgium, Sweden, Japan, Canada, Italy, and Austria.

Germany. The annual pre-war production of German electrical goods of all classes is estimated at about $292,000,000, as against $359,432,155 for the United States in 1914. It can not be said how much of this amount represents power machinery, but the proportion is doubtless large. Germany was the most aggressive of the competitors of the United States, and her manufacturing methods were more nearly like those of American producers. She has had the advantage over her European competitors of a home market second only to that of the United States, and of a large export trade, built up with the aid of assistance from her financial connections. The quality of her product, though not uniformly of the highest, is in many instances better suited to the purposes of countries such as South America and Asia than the American or British article. The German industry has been highly organized and consolidated, resulting in the formation of a few large firms working more or less in cooperation.

Great Britain. Great Britain in 1913 ranked third in production of electrical machinery and supplies of all kinds. Her production was estimated at $109,300,000. The expansion of electrical manufacture in Great Britain has been greatly retarded by restrictive laws passed in the early days of the electrical development, from the effects of which the industry has not yet fully recovered, and which seriously curtailed the home market. British possessions and South America

1U. S. Dept. of Commerce Special Agents Series, Nos. 174 and 205. Report of British Board of Trade on Electrical Trades Cd. 9072, 1918. Report of British Board of Trade, on Electrical Industry, Cd. 9072, 1918.

have been the chief source of orders for export. The quality of English electrical machinery is high, but owing to the smaller production, and possibly in some degree to the diversity of designs demanded by the numerous types of electric currents in use in the British Isles, English costs have also been high. Since the war there has been a movement toward greater consolidation among manufacturers, and toward greater standardization of products. The relatively weak position of Great Britain before the war may be seen from the fact that she imported large amounts of electrical machinery from Germany and the United States, but exported almost none of these goods to the two countries. A comparison of electric motors of American, British, and German manufacture was made by an agent of the Department of Commerce, who states that American motors were selling in the British Colonial export markets on the basis of quality and price, British on the basis of quality and sentiment, and German motors on the basis of price and financial assistance to the exporters.

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France.-The French electrical machinery industry was, before the war, largely self-contained. Production of power machinery in 1913 amounted to $12,850,000. Imports were not over $1,500,000 and exports were but half of that amount. It seems probable that France will be able to supply the greater part of her needs, but unlikely that she will be a factor of importance in export trade competing with the larger producers. During and since the war, France was, of course, unable to supply her requirements and imported large amounts of machinery, chiefly from the United States and Switzerland.

Switzerland. Although the home market of a country as small as Switzerland is necessarily limited, Swiss manufacturers have acquired such a reputation for the design and construction of large power installations that a large export trade has developed, chiefly with the other countries of Europe. Extensive water power projects have furthered this industry, but Switzerland is not likely to offer active competition in this country.

Japan. The manufacture of power apparatus in Japan is carried on partly by firms having foreign affiliations and financial support, through which they obtain engineering assistance. In many cases these firms make parts of an apparatus which the Japanese find it difficult to make. Large numbers of Japanese engineers secure education and experience in the United States, and return to enter Japanese electrical works, and American engineers are supplied by the American firms to their Japanese connections. The product of such firms, of course, will not be offered in competition with American goods. There are also several of the larger independent Japanese electrical works which turn out a fair grade of machinery, some of which is adapted to large installations. Much of the material produced by strictly Japanese firms, however, is not high grade. The manufacture of transformers, which does not require extensive use of machinery, is carried on to some extent by small workshops, by cheap hand labor, but as the makers lack engineering ability, the product is of poor quality, and could not compete in a discriminating market with properly designed equipment. Japan's exports of electrical machinery have increased greatly following the beginning of the war, but have gone chiefly to China.

U. S. Dept. of Commerce, Special Agent Series, No. 205, p. 70.

French Ministry of Commerce, L'In iustrie Fran aise," 1919, Vol. 1, Pt. V. p. 465.

IMPORTS.

Imports of electrical machinery are classified with those of miscellaneous machinery, and consequently no separate figures are available. It is improbable that there is or has been any considerable importation of this class of products, and it would no doubt be difficult to find any foreign made electrical equipment of this kind in use in the United States.

PRICES.

Owing to differences in design, construction and operating characteristics, it is difficult to make accurate comparisons of foreign and domestic prices. Quotations have been submitted to the commission tending to show that German motors are being offered in this country at prices ranging from 40 to 90 per cent of the prevailing domestic prices, and these quotations are in general confirmed by data published in technical periodicals, but caution is necessary in making comparisons without complete data as to the quality and ratings.

TARIFF HISTORY.

Electrical machinery and power apparatus have never been specifically mentioned in the tariff acts, but have been included in the basket clauses as manufacturers of metal not specially provided for. Under the act of 1894 they were dutiable at 35 per cent ad valorem, in 1897 and 1909 at 45 per cent, and in 1913 at 20 per cent. Although definite figures are not available, it is probable that the duty on electrical machinery has had appreciable effect along certain lines on importation.

COMPETITIVE CONDITIONS.

The great advantage which America enjoys in having the largest home market in the world has been somewhat increased by the capture temporarily of part of the export business of the world, thus permitting production on a scale larger than that of any of her competitors, and a consequent reduction in costs, which tends to offset somewhat the lower wages paid in Europe. A cost investigation made by the Electrical Manufacturers Council during 1919 and 1920 indicates that labor forms approximately 40 per cent of the total cost of production in the case of domestic motors and generators. This figure is probably exceeded in the case of fan and other small motors, and may be somewhat smaller in the case of large generators. For transformers, circuit breakers, and lightning arresters, which include no moving parts, or those not requiring accurate fitting, and much less machine work, the figure is approximately 30 per cent. Labor cost of other power equipment, such as controllers, is not greatly different, the total output is much less in value than that of motors, generators, and transformers. These figures for labor costs include all indirect factory labor, draftsmen, engineers, foremen, etc., as well as direct labor. The absence of foreign competition is indicated by the large domestic production, wide export trade, and negligible imports. Although no statistics are available as to imports, it is difficult to find examples of foreign motors or generators in use in the United States, and it is reported at the New York Custom House that very

little of such material is imported. Examples are cited of quotations of foreign manufacturers at prices much lower than those of domestic makers, especially in motors of the smaller sizes, but it does not appear that any considerable amount of business has been done. The well known reputation of many of the American manufacturers is an asset which would prove of value to them in meeting competition from foreign sources.

TARIFF CONSIDERATIONS.

The situation in regard to the classification of electrical machinery is not essentially different from that of machinery in general. Like most other machinery in wide use, it is made in large quantities by mass production methods, and the competitive conditions are similar, with the exception of the added factor of international relations between some of the largest manufacturers.

producer of revenue, it is unlikely that electrical machinery would be of any importance, owing to the small importation.

STATISTICAL TABLES.

DOMESTIC EXPORTS.

Total electrical machinery and appliances (including locomotives).