Tariff Information Surveys on the Articles in Paragraph 1- of the Tariff Act of 1913 and Related Articles in Other Paragraphs

April, 1917, they were called upon to supply large quantities of instruments to the United States Government for use in the Army and Navy.

In order to facilitate production a standard list of about 800 instruments was compiled by a committee of the Council of National Defense. Because of the limited supply of workmen capable of making steel instruments by hand processes, the increase in production would have been impossible unless radical changes had been made in the methods of production. Automatic and semiautomatic machine tools have supplanted skilled hand labor in many processes. One of the best illustrations of the changes which have taken place is the use of the drop hammer in forging in place of the old method of hand forging.

The product of American factories in 1917 was valued at $3,380,000, of which $1,927,000 represented soft-metal goods and $1,458,000 steel instruments. The production for 1918 was $5,235,000, about evenly divided between soft-metal and steel instruments. The number of workmen employed increased from 958 in April, 1914, to 2,128 in April, 1918.

While devoting most of their attention to production of Government contracts, the American manufacturers were forced to neglect the demands of the civilian trade. The result was a noticeable shortage in the supply of steel instruments and a rise in prices ranging from 50 to 100 per cent. The shortage was somewhat relieved since the beginning of 1917 by the importation of steel instruments from Japan. Japanese instruments were of uncertain quality and very often defective. The quantities received were large in comparison with previous importations from Germany. In July,1917, the the Wholesale Surgical Trade Association estimated that less than 10 per cent of the total consumption of instruments was being supplied by Japan. Prices of Japanese instruments were considerably higher than prices of German instruments before the war and not appreciably lower than the American instruments of comparable quality. Japanese surgical instruments were largely supplied by American manufacturers in their contracts with the Government. Army purchasing authorities estimated that from 20 to 30 per cent of all instruments bought for use in the Army after April, 1917, were of Japanese manufacture.

The Government also received many instruments, perhaps 25 per cent of its entire purchases, from outside concerns, chiefly those engaged in the manufacture of jewelry, cutlery, and hardware.

The conditions of competition hereafter will depend largely (1) on the ability of American manufacturers to maintain the increased effectiveness of their industry which was gained during the war, (2) on the effects of the war upon the German industry, and, (3) upon the ability of Japanese manufacturers to develop an export trade in surgical instruments.

The American surgical instrument industry became more effective during the war than it was in 1914, by the introduction of machine methods in the production of standardized instruments. After the war, Government orders ceased and production again became diversified. The civilian trade demands a greater number of patterns of

instruments and only a few of each pattern. As a result of this change, hand methods are again being utilized in the production of many types of instruments. In the manufacture by hand methods. the American producer suffers under the disadvantage of high labor costs. If, however, a large export trade could be built up in Canada, South America, and elsewhere, quantity by machine methods might be continued.

Since the close of the war Germany has been seeking to renew her control of the world trade in surgical instruments. Notwithstanding temporary disadvantages, such as the loss of many skilled workmen and the disorganization of export trade on account of the late war, the costs of German manufactures apparently remain low compared with those of many American firms.

The dangers of Japanese competition have probably been exaggerated. Although wages are lower in Japan, nevertheless the methods of production are antiquated. Instruments of a few simple types were produced by hand methods during the war in considerable quantities, but in order to develop a permanent export trade the Japanese manufacturers would have to introduce machine methods of production and would have to be prepared to supply a varied assortment of complicated instruments. The disadvantage of the lack of a supply of really high-grade mechanics would then become apparent.

Surgical instruments are dutiable under paragraph 167 of the tariff act of 1913 at 20 per cent ad valorem. Under the act of 1909 and previous acts, as far back as 1883, with the exception of the act of 1894 in force during the years 1894-1897, the rate was 45 per cent. American manufacturers have asked that surgical instruments be taken out of the general or basket clause in Schedule C and given a separate classification. They also wish to see the tariff rate raised very considerably. The importers of Japanese instruments, on the other hand, request that action be deferred at least until normal trade conditions return. The hospitals, which are the largest consumers of instruments, have for years attempted to get legislation which would allow them to import instruments free of duty on the ground that they are charitable and educational institutions. (See Tariff Information Series Handbook No. 7.)

DENTAL INSTRUMENTS AND APPLIANCES.

GENERAL INFORMATION.

Description. Dentistry and dental surgery have been developed in the United States to a high degree of perfection, and domestic work is recognized as the equal if not the superio of that in any other country. Dental instruments are composed of steel almost exclusively and consist of a large number of standard tools. There is some call for instruments of special design, but the demand can not be compared to that found in the surgical instrument field.

General supplies required by the profession consist of artificial teeth, plate frames, gold wire, and special fixtures.

Every practicing dentis requires, in addition to his tools, an extensive assortment of appliances, such as operating chairs, spittum

pans, sterilizers, power drills, anesthetic administering devices, and other articles designed specially for the dental trade and not used in the surgical profession to any extent.

Domestic production.--The dental appliance, instrument, and supply industry produces sufficient material to supply the home market and exports large quantities of the products to all the world's markets. Domestic manufacturers are at no disadvantage in obtaining their raw materials and are not affected by the cost of labor to the extent experienced by the manufacturer of surgical instruments, because dental instruments are more nearly standard and an therefore be manufactured in quantity. The export business is a considerable proportion of the entire production, the National Dental Association estimating that over 35 per cent of the domestic production is for foreign consumption.

Prior to the war English teeth manufacturers were able to market a small amount of their product in the United States. Domestic manufacturers produce this product in large quantities (one firm exporting over 20,000,000), but the profession claims that the domestic product is not as satisfactory as the English article for some purposes.

Dental instrument and appliance exports are not classified separately in the customs ttatistics. Information obtained by the commission justifies the assumption that practically all of the material classified in the customs statistics as medical and surgical instruments are in reality material used exclusively by the dental profession. These exports amounted to over $1,100,000 in 1913 and to almost $10,800,000 in 1919. This is exclusive of artificial teeth, amounting to about $300,000.

Foreign production. Considerable quantities of dental instruments, supplies, and appliances are manufactured in England, France, Germany, and Japan. The dental profession has not been developed in those countries to the same degree as in the United States, however, so foreign manufacturers are without the large home market possessed by manufacturers in the United States.

A large part of the international business carried on by foreign concerns is in the hands of one English company. The New York representative of this company asserts that during the last 35 years his company has exported dental goods, mainly teeth, valued at $1,500000, to the United States, and during the same period has exported to England domestic goods to the value of $25,000,000. During 1920 domestic exports of artificial teeth amounted to $300,000 as compared to imports of $20,000.

Tariff history.-Dental instruments have never been specifically provided for in the tariff and have entered as mis ellaneous manufactures of metal. (See Tariff History of Surgical Instruments.) Teeth are classified as porcelain or earthy mineral substance manufactures. Competitive conditions.-Dental instruments and appliances of foreign origin do not compete to any extent with the domestic product except in the case of specialties such as teeth. Tooth manufacture is a ceramic process and domestic consumers claim that the foreign product is superior to the domestic for some purposes. The continued importations of this product tend to substantiate this claim.

Tariff considerations.-Dental-instrument manufacturers are in a good position to compete with the foreign product. Surgical-instrument manufacturers, on the other hand, must produce a large number of different styles of each class of instrument, so can not place production of any one product on a quantity basis. Domestic manufacturers export dental instruments, whereas surgical instruments are imported in large quantities. These facts justify mention of dental instruments as distinct from those used exclusively in surgical work.

The Canadian tariff laws cover the situation by specific mention of dental goods as follows: "Artificial teeth, not mounted; dental instruments and appliances.

Surgical instruments-Production in United States, by cities.

[From Tariff Commission's questionnaires.]