BOTTLE CAPS.

SUMMARY.

The bottle-cap industry in the United States, never very large, has rapidly declined in the last few years-from four manufacturers in 1913 to one in 1920. This reduction has been brought about by foreign competition and a decreased domestic demand for bottle caps after prohibition of the manufacture and sale of alcoholic liquors eliminated one of the principal uses of this product in the United States.

The American bottle-cap industry is located in New York City. The size of the industry is sufficiently indicated by the estimate that the value of the annual domestic production has not been less than $100,000 nor more than $200,000. Germany, Austria, and France are the principal foreign producing countries, though considerable quantities are made in England. Though statistics of foreign production are not available, the industry in Europe is known to be much larger than in the United States. In 1909 it was stated that France had 35 bottle-cap factories, Germany 30, and Austria 20.1

One manufacturer estimated that after the act of 1913 went into effect and before the war disturbed international trade conditions approximately 80 per cent of the domestic consumption of bottle caps was imported. After the war the situation changed somewhat in favor of the American producer. Bottle caps were imported in comparatively small quantities and under the prevailing high prices of the product the import duty per unit, levied on an ad valorem basis, had by 1920 about doubled.

No statistics prior to 1913. Production statistics furnished by the one remaining manufacturer are preserved in the confidential file of the United States Tariff Commission.

Includes also sprinkler tops and collapsible tubes after Oct. 4, 1913.

• Calendar year.

1 Lahmaier, Schwartz & Co., New York, N. Y.

Conley Foil Co., New York, N. Y.

GENERAL INFORMATION.

TARIFF PARAGRAPH, ACT OF 1913.

PAR. 164. Bottle caps of metal, * * * if not decorated, colored, waxed, lacquered, enameled, lithographed, electroplated, or embossed in color, 30 per centum ad valorem; if decorated, colored. waxed, lacquered, enameled, lithographed, electroplated, or embossed in color, 40 per centum ad valorem.

DESCRIPTION.

Several kinds of metal bottle caps are in general use in the United States; the only kinds, however, that have up to the present time been imported are composed of approximately 95 per cent lead and 5 per cent tin. This material is made up into a foil cap, which is usually decorated either by electroplating, embossing, or otherwise, or coated with a material applied in liquid form, such as enamel. lacquer, or coloring inks. Bottle caps are used primarily for covering the corks and ends of the necks of wine bottles and bottles containing olive oil, beverages, vinegar, medicinal preparations, and other liquids for the purpose of adding to the attractive appearance of the containers. Bottle caps, when securely fastened to the necks of bottles are serviceable, in addition to their decorative value, in preventing the escape of the contents of the bottles in case leaks develop in the stoppers.

Varieties of bottle caps differ only in size and decoration. Tin foil wrapped around the necks of bottles is sometimes used as a substitute for bottle caps. The most popular style, which is also the average size, measures 1 inches across the top and 14 inches in length. This size per thousand usually weighs 12 pounds and contains 11.88 pounds of lead and 0.36 pound of tin.

The familiar crimped bottle cap stamped out of sheet tin, containing a thin layer of cork inserted in the concave side and commonly used as a stopper for beer bottles, soda-water bottles, etc., is not imported. The manufacture of these caps has been solely in the control of the Crown Cork & Seal Co., Baltimore, Md., by virtue of a patent granted by the United States Government about 20 years ago. As these caps are not imported, their further mention in the following pages is omitted.

DOMESTIC PRODUCTION.

The industry in the United States is small, being confined to one manufacturer, the Conley Foil Co., New York, N. Y.

Raw materials.-Lead and tin are the principal materials entering into the manufacture of plain bottle caps, the proportions being approximately 95 per cent lead and 5 per cent tin. In decoration, lacquer and printing ink is used. The tin used is of foreign origin, mostly from the Straits Settlements. The amount of decorating materials used is comparatively small and can be readily obtained in the United States.

Method of production.-Ingots of lead and tin are melted in separate kettles and the metal is cast into slabs by the use of metal molds.

These slabs are rolled down in a breaking-down mill until they become thin enough to wind upon spools, then a finishing mill is employed which rolls the material to a finished gauge and winds it upon spools. The material next passes to a machine which forms and finishes the caps complete. If the caps are to be decorated they are passed to a coloring machine; side embossing and printing are done by another machine. Semiautomatic machinery, manufactured in the United States and first introduced in 1908, is used throughout the entire operation.

Organization.-Large factories are not required for the efficient conduct of the industry, and a capital of approximately $75,000 invested in machinery and $125,000 for current use is stated to be sufficient to carry on the business. The market for bottle caps is widely distributed throughout the United States, and some of the product is exported.

The manufacture of bottle caps has never been carried on as a separate industry in this country but in connection with the manufacture of tin foil, lead foil, and composition foil, with which this industry is closely allied.

In 1920 the industry in the United States was being carried on only by one manufacturer.

History of the industry. The manufacture of bottle caps has been conducted in the United States for 30 or more years, yet the industry has not increased. It, in fact, decreased from four manufacturers in 1913 to one in 1920. Foreign competition and the falling off of domestic requirements of bottle caps after the law prohibiting the manufacture and sale of alcoholic liquors in the United States became effective, have been the chief causes of the decrease.

Domestic production and consumption.-It is estimated that in 1920 and for some years before approximately 25,000,000 to 50,000,000 bottle caps were consumed annually in the United States. The producing capacity of the factory in this country is sufficient to meet domestic demands.

Domestic exports.-Approximately 5 per cent of the total domestic production was formerly exported, being shipped principally to the Philippines, Cuba, Canada, and South American countries. Official statistics of exports are not available.

FOREIGN PRODUCTION.

The industry in Europe was established over 100 years ago. In 1909 there were about 35 factories in France, 30 in Germany, and 20 in Austria. The important foreign countries manufacturing bottle. caps in order of magnitude of production are: Germany, Austria. France, and England.

In point of quality, the domestic caps compare very favorably with the foreign product, though in certain grades of the highly finished decorated caps the European product presents a superior finish.

IMPORTS.

Since the act of 1913 became operative official statistics of imports of bottle caps have not been shown separately, these being combined with collapsible tubes and sprinkler tops. In the fiscal year 1913 the

Tariff hearings, H. R. Doc. No. 1505, 60th Cong., 2d sess., p. 2770.

89476-22-c-28-2

total importation of bottle caps was valued at $227,480, the values having decreased to this amount from $251,626 in 1911.

Prior to 1914 the United States imported the largest part of its bottle-cap requirements, but shortly after the war in Europe began (August, 1914) the amounts imported decreased greatly; three of the largest exporting countries-Germany, Austria, and France-stopped shipping to this country entirely and only small amounts continued to come from England.

Estimates, from unofficial sources,' of the number of bottle caps imported annually during recent years are as follows: 1916, 53,400,000; 1917, 5,100,000; 1919, 4,400,000.

PRICES.

In 1919 the average price of bottle caps was more than twice the price in 1913. Figures given by one of the leading importers show an increase in the average wholesale prices of domestic decorated caps in 1919 over 1913 of over 177 per cent and on undecorated caps of 150 per cent. On decorated caps of foreign manufacture, delivered in the United States, the percentage of increase in 1919 over 1913 was 132 per cent on decorated caps and 184 per cent on undecorated

caps.

TARIFF HISTORY.

Bottle caps received special mention for the first time in the tariff act of 1909.

The act of 1909 divided bottle caps into two classes-plain and decorated. Plain caps were given a compound rate of one-half cent per pound and 45 per cent ad valorem, thus increasing the duty one-half cent per pound. The duty on decorated caps was made 55 per cent ad valorem.

The act of 1913 reduced the duty on plain bottle caps to 30 per cent and on decorated caps to 40 per cent ad valorem.

Imports during the three fiscal years (1911 to 1913, inclusive) in which the act of 1909 was operative show slight annual decreases. As the publication of statistics of imports include collapsible tubes after the act of 1913 became operative, the tendency of the import movement under that act is not known.

COMPETITIVE CONDITIONS.

American bottle cap manufacturers have had very little competition from foreign countries since 1916.

The extensive use of bottle caps on bottles containing wine was an incentive to the large development of the industry in France, Germany, and Austria. In all of these countries and also in England tin is imported free of duty. Germany and England admit lead free of duty, while France charges a duty of from 26 to 35 cents per 100 pounds, according to the silver content, and Austria slightly more than 97 cents (4.80 kronen) per 100 pounds. In the United States the tariff on lead is 25 per cent ad valorem, equivalent to a duty of about $1.10 per 100 pounds in 1913 and $2 in 1920.

1 Conley Foil Co., New York, N. Y.

2 Budde & Westermann, New York, N. Y.

In 1920 import duties on 1,000 bottle caps in the various countries were: France, $1.93; Austria, $0.54; and Germany, $0.32. The United States having an ad valorem rate, the duty varies with the value of the import. Under the act of 1913 and during the brief period preceding the war the duty averaged about 35 cents on 1,000 bottle caps. In 1920 the duty averaged about 66 cents per 1,000. When prices are low the industry in the United States has less protection than the industry in the principal competing foreign countries, but under the high prices prevailing since the World War the American industry has had tariff protection practically as high as the industry in Austria, higher than in Germany, but much lower than in France, the latter country having advanced its rate of duty in 1920 to three times the former rate.

Lead is an important item in the cost of plain bottle caps. In July, 1920, the value of the 12 pounds of lead required to make 1,000 bottle caps selling at $3.50 was over $1, or nearly 30 per cent of the selling price. Tin is a minor item, amounting to only about 15 cents per 1,000 caps at 1920 prices. In 1913 the cost of lead was nearly one-third of the selling price ($1.40).

Ordinarily the price of lead has been less in Europe than in America, the difference being from 0.5 to 2 cents per pound. Conditions after 1913 caused prices to fluctuate, so that during the greater part of the time from 1913 to the close of 1919 European prices were from a fraction of a cent to 1.75 cents above New York prices.

The one American manufacturer now operating states that after the reduction in the rate of duty by the act of 1913 about 80 per cent of the total domestic consumption was imported and American manufacturers were unable to dispose of their product at a profit. While the number of manufacturers decreased from four in 1913 to one in 1920, this reduction was not necessarily the result of foreign competition since the domestic demand for bottle caps was greatly reduced after 1917 by the operation of prohibition laws regulating the manufacture and sale of intoxicating liquors in the United States, which resulted in entirely stopping the most important use of bottle caps. There has also been a rapidly increasing demand for tin foil, which is now the principal product of bottle-cap manufacturers rather than merely an intermediate product.