is absolutely compelled to buy both kinds of carbons from them, by which action the trust gets the whole trade. Fortunately, not all central stations use both kinds of carbons, for if they did they would pay dearly for all carbons. Now, a few words for other carbon products, such as carbons for dry batteries, carbon brushes, etc. The National Carbon Company controls the sale of all these products because of the high protective duty. Take, for instance, carbons for dry batteries. These are comparatively cheap to manufacture, as the material in them is of the cheapest, and they do not need much care in manufacturing. The duty on these carbons is 35 per cent, which makes the importation prohibitive, as the manufacturers of dry batteries can not afford to pay for the imported carbons, and are therefore driven right into the arms of the National Carbon Company-that is, the trust-and for your information I wish to say that the carbon trust is also the largest manufacturer of dry batteries in the United States, if not in the world. So here you have the peculiar situation of a lot of manufacturers being compelled to buy some of their most important supplies from their most hated rival. How easy it is then for the National Carbon Company to withhold deliveries of battery carbons to a competitor when that competitor has large, important deliveries to make, or to charge such a price for battery carbons that the manufacturer can not make any profit, as you may be sure that the carbon trust knows perfectly well what it costs its competitors to make dry batteries, and under these circumstances is in position to get the bulk of the business and make a profit, not alone on their own batteries, but on every battery sold by their competitors. In carbon brushes the trust likewise controls the situation owing to the ample tariff protection given it. Gentlemen, I claim that if the tariff on all carbon products for electrical purposes be revised to a reasonable basis the consumer will obtain the benefit, and will be able to buy his carbon supplies at much cheaper prices, thereby enabling the central stations, isolated electriclight plants, etc., to produce cheaper light, and enable the manufacturers of dry batteries, electrical novelties, etc., to successfully compete with their strongest competitor, and in the interest of the consumer I respectfully ask that you give your earnest consideration to this matter. Mr. UNDERWOOD. You say that the carbon trust asks $24 per 1,000 for these carbons, and makes them at less than $10? Mr. REISINGER. Their average price is $24 per 1,000. It is pretty hard to get at the bottom of the matter. I have seen prices as high as $28 and I have seen prices as low as $20, according, probably, to their consumption. Mr. UNDERWOOD. How long does one of these carbons burn in an electric light? Mr. REISINGER. It varies; say about an average of one hundred and twenty hours. Mr. UNDERWOOD. One hundred and twenty hours; that is about five days a week? Mr. REISINGER. Yes. Mr. UNDERWOOD. How many of these carbons will a town of 100,000 people use in a day? Mr. REISINGER. It is according to the lamps they use. Some use more gas, and some use more arc lamps, and others use incandescent lamps. That is pretty hard to tell. Mr. UNDERWOOD. You have no way of estimating what the cost is to the public in that way? Mr. REISINGER. That I could not tell you exactly; no. Mr. UNDERWOOD. You say that more than half of the stock of this National Carbon Company is water? Mr. REISINGER. That is what I understand-the common stock. Mr. UNDERWOOD. Do you know anything about the cost of making these carbons? Mr. REISINGER. I think the carbons cost about $10 per 1,000, and I think they do not cost more here than they cost on the other side. Mr. UNDERWOOD. How much of that is labor? Mr. REISINGER. About 20 per cent, I should say. Mr. UNDERWOOD. About 20 per cent is labor? Mr. REISINGER. But you must not forget that the labor if, of course, cheaper in Europe, especially in our factory, where low-class peasants are doing this common work. It is not skilled work at all. But that man only makes half of what an intelligent American workman makes, so really the higher cost of an American workman is equalized by his better work. Mr. UNDERWOOD. And the work is mostly done by machinery? Mr. UNDERWOOD. That is all. Mr. RANDELL. I should like to ask you a question; I will be through in a minute. You were in the business in 1897, were you not, when the Dingley tariff bill was passed? Mr. REISINGER. Yes, sir. Mr. RANDELL. What was the price of the sort of carbon that you sell, before that bill went into effect? Mr. REISINGER. I have here, for instance, a carbon seven-sixteenths by 7; we sold that for $11.70. Mr. RANDELL. Eleven dollars and seventy cents a hundred? Mr. REISINGER. Eleven dollars and seventy cents per thousand. Mr. REISINGER. Yes, sir. But this is the list price, on which the usual trade discount is allowed. Mr. RANDELL. What was the tariff at that time? Mr. REISINGER. Thirty per cent. Mr. RANDELL. What is it now? Mr. REISINGER. Nine dollars per thousand. Mr. COCKRAN. About how much is that? Mr. REISINGER. It is very hard to figure. It is all the way from 50 per cent to 700 per cent. Some carbons, as Mr. Cary says, we import in double lengths, in order to bring the duty down from 90 to 45 cents per 100. But there are lots of the carbons that we can not make in double lengths. It is impossible. Mr. RANDELL. What I want to get is the price that this stuff brought before the Dingley bill went into effect; and what effect, if anything, that bill had upon it, or what it brought in the market after that. That is what I want to get at. Mr. REISINGER. I have given it to you right here. For instance, if you take one carbon selling for $11.70 at the time before the Dingley tariff went into effect, we are selling it now for $20. These are the list prices. Mr. RANDELL. When was this trust that you are speaking about organized? Mr. REISINGER. In 1897, on the strength of the Dingley tariff. Mr. RANDELL. And what per cent increase was there inside of a year in the cost to the consumer? Within a year from the time that trust was organized, what per cent, if any, was the raise in the value and in the price, to the consumer? Mr. REISINGER. The difference of the duty, exactly the difference of the duty. Mr. RANDELL. What was the difference in the price? Mr. REISINGER. We paid 30 per cent duty then. Mr. RANDELL. I understand; and what was the price per thousand? Mr. REISINGER. Eleven dollars and seventy cents per thousand. Mr. RANDELL. Within a year after that, what was it? Mr. REISINGER. Twenty dollars. Mr. RANDELL. Twenty dollars? Mr. REISINGER. Twenty dollars. Mr. RANDELL. It was nearly double? Mr. REISINGER. Yes, sir; nearly double. Mr. RANDELL. Has that been maintained ever since? Mr. REISINGER. Yes. Mr. RANDELL. And the monopoly has been maintained ever since! Mr. REISINGER. Absolutely. Mr. RANDELL. If the tariff is taken off, what, in your opinion, would be the result in reference to the price to the consumer? Mr. REISINGER. The results in reference to the price to consumers would be the reduction of duty, because the trust does and can regulate its prices accordingly. I may add that the trust tried very hard to prevent us from importing double sticks. I am the oldest importer in the business, and when I first started importing double lengths the trust came and said: "That is not meant; you can not import double lengths." "Why?" "Because we meant only that you should import single lengths." I had a suit and the suit was decided in my favor, and from that time I have been able to import double lengths, although they tried to prevent it. Mr. RANDELL. If the tariff is taken off, what per cent would that increase the imports into this country, in your opinion? Mr. REISINGER. I suppose we would have a fair division in the market between the trust and ourselves. Mr. RANDELL. In reference to the high-grade carbons? Mr. REISINGER. Yes. Mr. RANDELL. What could be done in this matter in reference to giving relief for the lower-grade carbons, making competition there? Mr. REISINGER. As to the lower grades, we could not import them under any circumstances. It would be impossible, even if they were free of duty. HUGO REISINGER, NEW YORK CITY, FILES SUPPLEMENTAL BRIEF RELATIVE TO ELECTRIC-LIGHT CARBONS. NEW YORK CITY, December 18, 1908. GENTLEMEN: I had the privilege of making a brief oral statement to your committee on Monday, November 23, on the subject of a duty on electric-light carbons, and I pointed out that by procuring from the Fifty-fifth Congress an enactment of a practically prohibitory duty on this class of goods the National Carbon Company, commonly known as the "carbon trust," has been able to prevent the importation of low-grade carbons and to secure such an amount of protection on the high grade as to enable it to control 80 per cent of the sales of this country, notwithstanding the fact that their prices include a profit of 150 per cent on the cost, because, as they can manufacture as cheaply as the imported carbons can be laid down here, they make the duty a profit, besides their ordinary legitimate profit. After I had made my statement a statement was made by Mr. J. S. Crider, of Cleveland, Ohio, representing the National Carbon Company, and in view of that statement I now beg leave respectfully to submit in writing a few additional suggestions on this very important subject. It will be noted that my original statement that this business was now in the hands of a trust is not denied. On the contrary, in answer to questions by Mr. Underwood, Mr. Crider conceded that his company was the only concern that made the high-grade carbons, and that it had a monopoly of the American market. It also appeared from his testimony that his company had $1,500,000 of preferred stock (presumably representing the actual capital invested) and $5,500,000 common stock (presumably representing expectations or hopes-in effect, water). They are paying 7 per cent dividend on the preferred and 4 per cent dividend on the common. If they can get from this committee the increased protection they demand, it will not seem unreasonable to suppose that their future profits will enable them to increase the dividend on the common stock, or to cut a watermelon in the shape of an extra dividend. Mr. Crider states: When the present tariff was being considered, an amendment introduced by Senator Quay provided for a duty of $10 per 1,000 on carbons for electric lighting 12 inches or less in length. In the joint conference the day prior to the passage of the act this was changed to 90 cents per 100, but in some way the important words restricting these carbons to commercial sizes were omitted. This is a very misleading statement of what happened in the Fifty-fifth Congress. The facts are as follows: When the Dingley bill passed the House, paragraph 93 contained this provision: Carbons for electric lighting and filter tubes, 50 per cent ad valorem. It is true that on the 29th of April Senator Quay introduced the following amendment in the Senate: Carbons for electric lighting of 12 inches or less in length, $10 per 1,000; for lengths over 12 inches, $10 per 1,000 for each 12 inches or fraction thereof. (Cong. Rec. 55th Cong., 1st sess., vol. 30, pt. 2, p. 1138.) This amendment was never adopted by the Senate. The bill as it passed the Senate struck out all special provisions for electric-light carbons. The amendment to this effect was amendment No. 145. The conference report (p. 6) contained the following: Amendments numbered one hundred and forty-four and one hundred and forty-five: That the House recede from its disagreement to the amendments of the Senate numbered one hundred and forty-four and one hundred and fortyfive, and agree to the same with an amendment as follows: Strike out the amended paragraph and insert in lieu thereof the following: "98. Gas retorts, three dollars each; lava tips for burners, ten cents per gross and fifteen per centum ad valorem; carbons for electric lighting, ninety cents per hundred; filter tubes, forty-five per centum ad valorem; porous carbon pots for electric batteries, without metallic connections, twenty per centum ad valorem." And the Senate agree to the same. It will thus be seen that the provision as it now stands in the law was not considered in either House of Congress, but was inserted by the conference committee, and therefore had either to be accepted or the conference report disagreed to. The duties imposed by this provision amounted on the standard sizes and grades of carbons then in use to a duty of from 100 to 150 per cent ad valorem. The importers did bring in the long carbons and had them cut and finished here by American labor, not, as Mr. Crider suggests, to evade the law, but to meet the law, which the Supreme Court of the United States has repeatedly decided that importers have the right to do. And notwithstanding this, the trust still controls 80 per cent of the market. Mr. Crider says: That while the declared value of carbon imported in 1908 increased 217 per cent, the duty paid increased only 37 per cent, owing to the fact that the number of pieces increased only a like percentage, thereby proving the increasing importations in long lengths. Such importations obviously present opportunity for undervaluation. These remarks are obviously intended to suggest that the Government is losing something by undervaluations. The absurdity of this suggestion is manifest. The duty in no wise depends upon the value, but on the number of pieces. It is a purely specific duty, and therefore undervaluation, if it existed, would help nobody and injure nobody, not even the Government. Mr. Crider states that labor constitutes about 65 per cent of the total cost of manufacture, but he furnishes no statistics to support this statement. As a matter of fact, I believe his statement is not true. The labor constitutes but about 20 to 30 per cent of the cost of manufacture. Mr. Crider's statement as to the price of labor abroad is substantially correct, but his statement as to the prices paid in this country is not correct. It would have been easy for him (as he represents the sole manufacturer of these articles in the United States) to furnish proofs with regard to the wages paid here, had he so desired. The wages paid here are about $2 for skilled labor and $1.25 for unskilled labor. In discussing the subject of raw material, Mr. Crider asserts that the cost of the raw materials is much higher here than abroad, and gives a table in which he puts down lampblack as costing 2 cents abroad and 4 cents here; carbon pitch as costing $9 abroad and $20 here, and coal tar as costing $1.85 abroad and $3.50 here. Reference to the existing tariff will show that coal tar and pitch are on the free list (pars. 512, 524, 678) and that lampblack is dutia |