The revised hearings were first indexed and printed in separate The hearings are here consolidated in 8 volumes (each indexed Schedule 3., Metals and Manufactures of... Schedule 4. Wood and Manufactures of... Schedule 5. Sugar, Molasses, and Manufactures of.. Schedule 6. Tobacco and Manufactures of........... SCHEDULE 9. COTTON MANUFACTURES. COTTON AND OTHER TEXTILES. STATEMENT OF JOHN F. CONWAY, REPRESENTING E. F. DREW & CO. (INC.), NEW YORK, N. Y. Mr. CONWAY. We are importers and exporters of cotton yarns and textiles. We also run two domestic winding plants, one located at Jewett City, Conn., and the other at Pawtucket, R. I. The CHAIRMAN. Do you appear as an importer or manufacturer? Mr. CONWAY. I appear as both. The CHAIRMAN. Have you any industry established in Germany or in Europe? Mr. CONWAY. No, sir. The CHAIRMAN. You may proceed now to state to the committee your views. Mr. CONWAY. I appear in opposition to any advance in the rates on cotton yarns over the existing rates as named in the Underwood bill. I have prepared a brief and also some statistics, which I will be pleased to hand to the committee, and if the different members of the committee would like one, I will have enough printed to go around. I have only one extra copy. The CHAIRMAN. You can have that sent to each member of the committee or leave it with the secretary.. Mr. CONWAY. I will do so. I appreciate that the committee has a difficult task in getting any schedule which will please all parties concerned and at the same time render a fair amount of protection to the American manufacturers. There are two things to be taken into consideration-the amount of revenue and the amount of protection. It is well to consider, first, the difference between the pricing of American goods and foreign goods. The foreign manufacturer makes his price based upon the cost of his material at the mill. For example, if you buy a No. 100 yarn from a Manchester spinner or English spinner you buy that yarn at his mill. That does not include the cost of cases, packing, or anything else. Those cases and packing and other material amount to about 2 to 3 cents a pound. At the present time they are paying something like $6 or $7 a case on the other side for cases which contain our merchandise. On the other hand, the American manufacturer either sells his goods direct or through his own agency or through some commission house, for which he pays a commission of 5 per cent. With that he gives a. trade discount, either 2 or 3 per cent, payable on the 10th of the month following delivery. He also allows freight to the consuming mill-either pays it or makes an allowance. Senator MCCUMBER. Just a moment. If I understood you rightly, you stated that our tariffs were levied upon just what it cost the mill to produce the yarn. Mr. CONWAY. I did not quite catch that. Senator McCUMBER. You stated that our tariffs were levied upon just what it cost the foreign manufacturer to produce the yarn. Did you take into consideration what it cost for packing, etc.? Mr. CONWAY. No; I said the foreign manufacturer based his price. or sold on what it cost at his mill. He adds his manufacturing profits, of course. Senator McCUMBER. But he has got to pack it? Mr. CONWAY. He does not allow you for that. We pay for packing cases and lining for the cases. Senator MCCUMBER. Yes; but the tariffs we levy include all that packing? Mr. CONWAY. We pay a duty on the packing, yes; that is the reason I bring that point out. Senator SMOOт. I suppose that your remarks now will also apply to cotton, hemp, and to wool? Mr. CONWAY. Exactly. Senator SMOOT. So that whatever you say now in relation to cotton you want it to apply to yarns of hemp and wool? Mr. CONWAY. And also to silk, artificial silk. Senator SMOOт. Certainly; to artificial silk. Mr. CONWAY. These allowances which the American manufacturer makes will approximately equal 9 or 10 per cent. So that basing any duties on domestics or American prices in comparison with the prices for that abroad you must make an allowance of about 10 per cent. On the coarse numbers there is no duty needed. In fact, as you know, we have been very large exporters of cotton yarn to all parts of the world for years, not only cotton yarn but heavy sheetings. The number of New England mills and their makes of sheetings are known in all parts of the world; in fact, we get inquiries for them through our foreign connections, and they specify they must be equal to certain American brands. Another thing. When it comes to importing yarns there are precious few yarns which are able to be brought in under 80 until the American manufacture fills up. We export 40s and below, and we have exported up to 70s. We have never exported any 80s, because we could not do that on account of the freight. Senator MCCUMBER. You stated that "we export to all countries of the world." Do you export those to the United Kingdom? Mr. CONWAY. I have exported No. 12 yarn to Manchester, England. Senator McCUMBER. When? Mr. CONWAY. In 1919 and 1920. We could do it to-day if the freight rates were not against us. Senator MCLEAN. Do you export to Germany? Mr. CONWAY. We exported to Germany in 1914, prior to going to war. Senator MCLEAN. But do you now? Mr. CONWAY. No; we can not export there now on account of the exchange. Senator MCLEAN. That is one of the "countries of the world." Mr. CONWAY. Well, we do not export there. Our foreign office has exported there during the past year and a half. But we do not do it directly from here. Senator SMOOT. You do not mean to say you could not export 80s on account of freight. The freight on 80s is no more than it is on 40s. You mean to say that you can not export it because of the fact that the finer the yarn the higher the cost, and there is the difference in the foreign country? Mr. CONWAY. That is true; as you go up you get the competition on low prices, but the matter of freight to-day is a very considerable item. It amounts to 6 cents a pound. Senator SMOOT. That applies to 16s or 40s or any other number? Mr. CONWAY. Exactly. Therefore, when you come to consider a tariff, the duty is not needed on those coarse numbers. Another matter to be taken into consideration is the difference in the qualities of the yarn made; for instance, you might take a No. 10 or 20 or 30 yarn and make it out of different staple cotton. The foreign manufacturers are able to spin up to 40s of shorter staple, which no American manufacturer would attempt. They also make carded yarns as fine as No. 120. There are a few domestic manufacturers who make No. 60s in carded. There are very few that care to make No. 60s in carded. I do not think there are any who have ever attempted to make over No. 60 in carded. Now, on the other hand, the English manufacturers run as high as No. 120 in carded. There are the different considerations-labor, construction, machinery, interest, taxes, and efficiency. Prior to the war the cost of labor in the cotton industry here and abroad were not very much apart, about 10 or 12 per cent, according to the locality, whether northern or southern. The foreign manufacturer had an advantage in construction; they also had an advantage in their textile machinery. It cost less to construct the foreign mill than it did the domestic mill. That might be helped by reducing the duty on textile machinery; for instance, you can buy a patented machine which is made in England and patented here and manufactured in this country, the same machine, at practically the same price, imported into the United States, with the duty added, as you can buy it from the domestic firm. As to the matter of interest they formerly had an advantage over us, because we paid on the average 6 per cent for money here while they got it at 3 or 4 per cent. That is a thing that is past. The interest charges now and in the future will probably be less in this country, at least not more than abroad. In regard to taxes I think that they have a little more burden in that regard over there than we have. In efficiency I think they have the advantage, because their labor has been trained for generations. Our labor here is a little more transient. Also they excel in efficiency in management. Coming down to the colored yarns: You have heard a good deal about the dyestuffs, etc. I will say briefly that we have never been able to import colored yarns except in very special instances. We find the price of the dyeing, bleaching, and especially of these very fine indanthrenes are higher in England than we can get them done in this country. There are two methods advanced in this tariff for valuation-that is, the ad valorem and the specific. We believe a specific duty is the proper duty. An ad valorem leaves very much to be furnished by the customhouse and ourselves. The CHAIRMAN. Mr. Conway, the committee is well posted on that phase of it; that is, on the ad valorem and specific duties. Mr. CONWAY. I want to give them my reasons why The CHAIRMAN. They are fully impressed with the desirability of the specific wherever it can be applied. Mr. CONWAY. But this bill calls not only for specific but also the alternative of ad valorem rates. If our goods are imported on a specific duty, we know when they reach the customhouse what we have got to pay. Our past experience has shown us that we have had to pay the duties based on the market price abroad on the date we imported those goods; for instance, in 1919 we bought No. 100 yarn at 6 shillings, on a basis of a shilling, then a trifle under 24 cents. Those goods were sold immediately on that basis to the American manufacturers. When we came to get those goods in we had to wait on account of the cotton strike and the dock strike. We were penalized at the customhouse, our yarn valued at 18 shillings, and there was no way in which we could recoup that loss. We, therefore, feel that a specific duty without any alternative of an ad valorem is the proper one and fair to the importer. Another reason is this: There is not very much variation in the cost of manufacturing goods in this country. The large variations in the price of cotton yarns has been due to the advance in cotton, whether justified or speculative. For instance, in 1919 and 1920 long-staple cotton went from somewhere around 35 or 40 cents a pound to $1.25. Therefore, when we paid our duties on the ad valorem values we were paying duty on the speculative price of cotton, or at least the speculative advance in the price of cotton. Now, you have heard a great deal about the German competition and the mark being worth one-third of a cent. We deal in a great many articles besides cotton and other yarns which are not in my immediate department, but I have knowledge personally of what is going on. Our quotations for months have been in dollars and cents, and in any country where we have dealt where the mark or the franc or the shilling has depreciated in value those quotations have been advanced with each change, so that the price in dollars and cents has remained practically the same. In view of the fact that the coarse numbers need no protection, we have recommended Senator SMOOT (interposing). That recommendation will be in your brief, will it? Mr. CONWAY. Yes, sir. Our request is that the amount of duty assessed on 40 yarn be 3 cents a pound for carded, with an additional duty of one-fifth of 1 per cent upward; on combed yarn, 4 cents a pound for No. 40, with a difference of one-fourth cent per number advance. Senator SMOOT. For each number advance? |