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venture of a doubt, that we cannot get that break so long as the State Department of the present administration is writing our tariff rates.

In the short space of 160 years, scarcely more than two lifetimes, our country has become the most powerful and the most prosperous in the whole world. We have the highest wage rates, not only in money, but in things money will buy; we have the lowest percentage of illhoused, ill-clothed, and ill-fed; we have the lowest percentage of illiterates; we have in the last 50 years built more and finer schools, colleges, churches, museums, and hospitals than all of the rest of the world combined. These things we have done under 4 consistent policy of tariff protection for our industries, farms, and mines. Without it, we would today either be in a state of arrested development about on a par with Central Africa, or our people would be working for barely enough to keep body and soul together. There would be no motorcars or radios or telephones or electric washing machines for the workingman. Whenever our tariffs have been substantially lowered in periods of peace, we have run into depression and hard times. No one who will read the story can deny that our huge steel and chemical industries are wholly due to a protective tariff. Just where would we be today in our war effort without the products of these steel and chemical plants?

Yet we find today a large segment of our otherwise intelligent population sold on the insidious propaganda of the former starry eyed college professors who have taken over a substantial part of our Government—and who are ably coached by a small band of importers and international bankers—that our whole policy of protective tariffs has been entirely wrong and has been responsible for all the ills of all the world. That our only salvation is to reverse this policy completely and in the shortest possible time, and that the quickest and surest way to do this is to place our tariffs in the hands of the executive branch, the Constitution to the contrary notwithstanding.

As for me, until they produce a nation that has gone further and faster under a different system, I will string along with the timeproven customs and policies and Constitution that have made my country the finest and freest place in the whole world to live and work and play.

Mr. FORAND. We will take a 10-minute recess. (A short recess was taken at this point.)

STATEMENT OF J. M. WELLS—Resumed

Mr. FORAND (presiding). The committee will resume its sitting. Mr. Wells, will you resume the stand?

Mr. JENKINS. Mr. Wells, I am sorry we had to leave during your statement, but you understand how that is. We had a very important vote in the House.

Mr. Wells, you were before this committee 3 years ago, were you not, when this matter was up before?

Mr. WELLS. That is right.

Mr. JENKINS. As I remember it, you made a very elucidating statement then, as you always do, but I should like to ask you this question. Have there been any developments that are immediately peculiar and incident to your business in the last 3 years that you are not able to tell us about in your statement?

Mr. WELLS. About the only thing that has happened as a result of the British reciprocal trading treaty in which we were involved, or in which duties on our products were lowered, has been that the British importations have up until about 6 months ago, from all the evidence that we can get-of course, the Department of Commerce is not publishing figures any more—the British imports of crockery generally and, of course, particularly the items that were affected by the treaty-steadily increased.

About 3 or 4 months ago there was a limitation finally put on the export of dinerware to this country by Great Britain, but aside from that, since the Japanese competition was practically shut off, which was shortly after we were here 3 years ago, or a little after the prohibition on the Japanese trade was put into effect, our business, of course, has boomed tremendously, due to the fact that in the past we never had, as I mentioned here before, more than 65 percent of the American market, and usually, it has run between 60 and 65. There were never sufficient potteries built in this country to take care of the full American demand which we have now, with the exception of the restricted British imports, so the industry is booming now as it never has before, since the last war, for that very reason.

Mr. JENKINS. Have you increased your physical properties very much?

Mr. WELLS. Not at all.

Mr. JENKINS. You had enough latent strength and latent capacity to take on this boom and absorb it nicely?

Mr. WELLS. Not at all. We do not have that capacity: At present, as a matter of fact, I know of no pottery that is taking orders at present for delivery until next year, and the reason we had not increased the capacity of the industry during peace years was that we did not have the market. Now we do not want to increase it because we know that immediately after the war—that is, if we could build potteries, which we cannot because of priorities--when the tariffs disappear, that business would disappear again.

Mr. JENKINS. I think you stated those you represent here employ a total of about 25,000 men?

Mr. Wells. Yes. In the industry there are about 25,000 people employed at the present time, and that is the absolute maximum employment.

Mr. JENKINS. You stated that you are afraid to expand because you feel that if you do you will have just that much investment and capital to lose?

Mr. WELLS. Yes.

Mr. JENKINS. For instance, I was talking to quite a few big steel men yesterday, and the Government is driving them to increase their capacity, as it has for years, and they have, as everybody knows, increased heir capacity, but your industry for years was starving along and going into bankruptcy, like a lot of people were, and then when the boom comes along, because of war conditions, you cannot realize on that with any degree of hope?

Mr. WELLS. That is right. "We know that whatever investment we put in will be lost later on.

As indicated by that remark, in 1927 there were 53 firms who were members of our association, who were manufacturing dishes. Today there are 28. There have been 25 of them that have either failed or gone out of business.

Mr. JENKINS. In your industry you have never had any trouble with your labor ?

Mr. WELLS. No. We have done collective bargaining in our industry on an industry-wide basis for nearly 50 years, and in that 50 years we have had only one strike of about 10 weeks' duration. That was about 20 years ago.

Mr. JENKINS. I wish you would go a little more into detail and explain just what this British situation has been, how it was brought about down here in Washington, and just what was done. I am not clear on that.

Mr. WELLS. First of all, when it was suggested or we were advised by the information committee of the reciprocal trading agreement that our paragraphs were being considered for reductions in duties, we could not understand why, because we knew that the largest importer was Japan, and the policy of the committee making these treaties had been not to make any recommendations on any commodity to a country that was not the largest importer of that commodity. We made every effort we possibly could to find out, through that information committee and through the State Department, what it was they had in mind, and we could get nothing from them at all. Finally we got that information from some friends we had who were British importers and who had gotten all the information they wanted not only from the British Embassy here in Washington but from their British committee who was working on this trade treaty. But we could get nothing from our representatives.

Mr. JENKINS. Here is the situation that you make out, and I think you are a living example of the effective argument that can be made against the statements of Mr. Hull and everyone else, nearly, who has appeared in favor of these trade agreements, because they have argued all the time that they are properly administered and that everybody gets a fair chance and that the rates are fixed after thorough study and complete investigation.

As I understand it, you say that you got a notification that your paragraphs were to be considered, and you came to Washington, and you were never able to find out from any of them, after your complete investigation, what was the reason back of what they were trying to do?

Mr. WELLS. That is right.

Mr. JENKINS. Do you know today what the purpose was or why they wanted to recanvass and change the rates in your paragraphs?

Mr. WELLS. Well, they claim that the information that they were able to obtain—and there was no way they could possibly collect the information, because it was not kept, and I am not saying that they are wrong-was that on certain items, like cups and saucers or other dishes which were charged for, on which there was a certain price at the factory, Great Britain was the greatest importer of those earthenware. Probably they were right, but there were no figures they could get to determine that. They took the word of the British manufacturers on that, but they did not ask us.

By the same token, they took the word of the British manufacturers, which again was right-I mean they were correct--that the British were the greatest importer of this particular bone china, but bone

china, was grouped with the other in the Tariff Act. There was no differentiation made between bone china and other china. They said England was the largest importer. I think they probably were. But there were no figures to satisfy that contention. They had the word of the British for that. They did not ask us.

The minute there was a reduction in bone china—which is made by adding calcium chloride or calcium bone to the regular mix of clay that you make ordinary china from—the first thing was that China started to throw in 25 percent of bone china. You cannot break that down and determine what proportion there is of calcium chloride. They promptly came in here and ruined the British business. When the war is over, Great Britain, who has had a nice business, will have nothing, and neither will we. It is all going to be from Japan.

Mr. JENKINS. The result of the changes that they made in your paragraphs was to give the business to Britain?

Mr. Wells. In those particular items, the more expensive ones.

Mr. JENKINS. Of course, you realize that the theory of these reciprocal trade agreements is that when they give something to Britain, they get something back? I mean they are supposed to get something back but oftentimes they do not get much back.

Mr. WELLS. That is right.

Mr. JENKINS. They gave your business to Britain but you do not know what they got back?

Mr. WELLS. Whatever they got back, they did not get their money's worth, because in our industry we have the highest labor. If they gave $1,000 worth of automobiles for $1,000 of crockery, we gave them $650 in wages and we get back $160 in wages. That is the way it works out.

Mr. JENKINS. When you say “we” you mean the United States ?
Mr. WELLS. That is right.

Mr. JENKINS. You mean that since you have a very high margin of labor expense, probably the highest in any industry, the Government could not possibly make a trade with anybody that would help American labor as much as if they held the business in the United States?

Mr. WELLS. To protect us; that is the point. There is not any import that we know of that takes quite as much money out of the laborer's pocket as the imports of China.

Mr. JENKINS. They might feel justified in doing it, but it seems to me that here is a high degree of culpability on their part when they trade American labor off for 50-percent British labor.

Mr. WELLS. That is the thing that Britain is not doing, either. Mr. JENKINS. You say that just as soon as the war is over and if we establish any kind of peaceful arrangement with Japan, Japan will root Great Britain out of the pottery business and root you out of business?

Mr. W'ELLS. Yes.

Mr. JENKINS. And you will probably have the same limited business back that you had before?

Mr. WELLS. Yes.

Mr. JENKINS. You testified that you would have to have a terrific tariff rate in order to protect it.

Mr. WELLS. A very high ad valorem rate on foreign valuation.

Mr. JENKINS. I think when you were here before some figures were developed that it would have to be at least 300 percent to protect you.

Mr. WELLS. The yen was at that time 14 or 15 cents against what is considered normally 45 cents, and with the Japanese valuations in that market, there is not any value over there at all. They set any figure that they can think of. There is no way of proving that they are wrong;

Mr. JENKINS. In Japan, they have subsidized the pottery industry, have they not?

Mr. WELLS. They have subsidized their manufacturers. We have documentary evidence, printed in Japan, stating that they have subsidized the industry.

Mr. JENKINS. I was thinking about what you were talking about awhile ago. There is a plan to close a pottery in our State and use it as storage space. Do you have a report on that?

Mr. WELLS. No. That was a report that came to me over the telephone, and I told them I would try to investigate it while I was down there. I know that particular pottery is closed—the Shawnee Pottery Co.—but I do not know how closely they are aiming at us. That is the thing I do not know anything about.

Mr. JENKINS. Do you know the facts as to how that was closed?

Mr. WELLS. No; except the information I got today. Yesterday I could not get any information on that, but today the report came that that plant was to be used for the storage of airplane parts that they could not ship out of the country, that they are making so fast that they cannot find boats for. That was the story.

Mr. JENKINS. If that is true, then the story develops that they are closing the pottery to use it as a warehouse for airplane parts?

Mr. WELLS. Which will throw out part of that labor. Of course, part of that labor can be used in defense plants, but not very much of it.

Mr. JENKINS. If in your investigation you find that is true you might tell these men that in my town we have several large, vacant buildings that would be admirably fitted for storage purposes, and they would not have to put anybody out of business to do that.

Mr. WELLS. I will certainly carry that information to Garcia.
Mr. FORAND (presiding). Are there any further questions?
We thank you, Mr. Wells.

The committee stands adjourned until 10 o'clock tomorrow morning.

(Whereupon, at 4 p. m., the committee adjourned until Thursday, April 22, 1943, at 10 a. m.)

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