PARAGRAPH 451-LEATHER.

shoes in this country will depend on the cost, the cost depends on the demand and supply of leather the world over, and the tariff is simply a differential, and these tides swing up and down entirely independent of the tariff. It has been a curious coincidence that regarding the war tariff of the Civil War, when it was enacted, at 15 per cent, it was said that hides would not be worth taking off in this country if you took the tariff off. It was taken off and hides immediately commenced to advance. Precisely the same condition ensued when the duty was taken off some few years ago. After the duty was taken off the prices commenced to advance. They never have gone back to the place they were in the nineties.

Mr. HULL. The farmer has not got anything to do with keeping the duty off of hides?

Mr. CLARKE. No, sir.

Mr. HULL. As a matter of fact, the real advantage of it was in equalizing the cost of raw material between the competing buyers? Mr. CLARKE. Precisely. The American tanner went to South America to buy his hides, competed with the European tanner. If he had had an additional 15 per cent to pay after he had bought them in that competition, he was not a free bidder in the world's market, but you take that away, free competition ensued, and the price went up with such a powerful bidder as the American buyer. Mr. HARRISON. Has there not been a very largely increased consumption of leather all over the world in the last few years?

Mr. CLARKE. Yes, there has; and at the same time the economic law has been proven that as countries become more settled the ratio of cattle or hide-bearing animals rather decreases to the number of inhabitants.

Mr. HARRISON. Did more advanced agriculture have anything to do with it?

Mr. CLARKE. There is one little machine used in western America called the milk separator, which enables the farmer to separate the cream from the milk and to feed the skimmed milk to the calves, and in that way a great many more calves are raised, whereas the great reservoir of hides, where we are all to-day, Europe and America, struggling to get our calfskins, is semicivilized Russia, where the poor peasants live, who kill their calves almost as soon as they are born. As Russia becomes more and more civilized the amount of calfskins we can get there will be less, and the fight will be more intense.

Mr. HARRISON. Suppose that leather went on the free list, as some kinds of leather did in the free-list bill that was vetoed by the President, would you then have any recommendation to make concerning tanning extracts?

Mr. CLARKE. Well, it would seem to me rather obvious that with leather on the free list, everything that goes into it, that makes up the composition ought to be equally free.

Mr. HARRISON. How large a proportion of the cost of production of leather would the tanning extracts be?

Mr. CLARKE. What class of leather would you say? Sole leather or calfskin?

Mr. HARRISON. Yes; on rough or sole leather?

PARAGRAPH 451-LEATHER.

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Mr. CLARKE. I should say the amount of bark or extract which into sole leather would be worth to-day in the neighborhood, depending on the weight of the sole leather, anywhere from $1 to $2 for each hide.

Mr. HARRISON. What per cent of the cost of production would that be? In other words, would it be a material restitution to the tanner to put tanning extracts upon the free list if his finished product was put upon the free list?

Mr. CLARKE. The tanning material would be an item in sole leather, about 20 per cent of the value of the completed, tanned leather. Mr. HARRISON. That is a very considerable item of the expense? Mr. CLARKE. Very considerable and necessary.

Mr. HARRISON. Will you tell us about the export trade? I have noticed in reading from the figures of the different classes here there is a very considerable export trade. For example, the article as to which you testified, calfskins, tanned and dressed, the imports for 1912 seemed to be $129,344 worth, and the exports to be $1,786,571. To what country do we export calfskins?

Mr. CLARKE. We exported a good many to England, but the Germans came over there and drove us out. I should say that trade was very varied. We have certain little specialties of calfskins which are on the luxury side; that is, those very fine, soft suedes, which make a very fine class of women's boots, colored leathers, and all that sort of thing.

Mr. HARRISON. Are those calfskins of American production tanned here, or are they skins which are imported from Russia and again exported?

Mr. CLARKE. They are imported. A part of them are Americangrown calfskins, but the great majority of them are foreign-grown calfskins, but it is only those little specialty lines of calfskins which really have any sort of good trade abroad. We can not sell big staple lines of black calfskins abroad, and what little hold we have on markets now we are slowly being driven back. I know in our experience—and we are purchasers of very high-grade material-we have gone into Europe for the purpose of building up a trade there, but we have been forced to retire because the expense is such that it is not worth while doing it. We are exporting some to South America, but there again we are meeting the German, who is at least on an equal basis with us, if not a little better. So I do not consider that the million dollars which you show in there is anything on which we have any grip or any reason to believe is a basis for an extension of our business.

Mr. HARRISON. So far as the tanning business is concerned, is it not pretty fair evidence that we are now in the position where our cost of production of calfskins tanned is lower than that of other countries whom we undersell in the foreign market?

Mr. CLARKE. I endeavored to show, sir, that those are not staple calfskins, but fancy lines of skins where it is a matter of taste and perhaps a little better shade of color or some little technicality of manufacture in which we have a temporary advantage, but that does not constitute a big staple export of leather.

Mr. HARRISON. It is about 4 per cent of our total productions, according to my calculation.

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Mr. CLARKE. That would be 4 per cent out of twenty-five million! Mr. HARRISON. $1,700,000 out of $42,000,000.

Mr. CLARKE. Yes, about 4 per cent.

The CHAIRMAN. That is all, Mr. Clarke.

TESTIMONY OF AUGUST H. VOGEL, ON BEHALF OF THE NATIONAL ASSOCIATION OF TANNERS.

The witness was duly sworn by the chairman.

Mr. VOGEL. Gentlemen of the committee, on behalf of the National Association of Tanners, representing a large part of the sole, belting, harness, calf, side, upper, and patent leather tanning interests of the country, we respectfully urge your consideration of the following facts in revising the duties on these commodities:

WIDE DISTRIBUTION.

The United States census for 1909 reports that the tanning industry, representing 919 tanning establishments, is controlled by 784 proprietors and firm members, with an invested capital of $333,000,000. The product is valued at $327,000,000. The wages amount to $39,000,000, paid to 66,000 employees. The production is distributed over 39 States, from Maine to California. The industry is one of active, intense competition.

COMPARISON OF DINGLEY AND PAYNE TARIFFS.

The following tabulation shows the duties under the Dingley and Payne tariffs, and the percentage of reduction:

You will note from this tabulation that the rates of duty now in force are extremely low and are already permitting material competition from foreign markets. We have never sought high duties, but we do contend that this country should not be a dumping ground for the world's surplus of leather. The duties which we recommend are as low as can prevent such unfair competition.

PARAGRAPH 451-LEATHER.

DUTIES RECOMMENDED,

After careful investigation, and in full recognition of the general demand for lower duties, we believe we can make concessions to this demand on harness, calf, and patent leather, but under no conditions should the duty be lower on sole, belting, rough, and side upper leathers. We recommend the following duties:

To illustrate the growth of importations under a low tariff, we would call your attention to the imports of heavy leather during the past five years and during six-month periods of the past year. Imports for consumption, bend, belting, and sole.

In 1910 there were 11 months at 5 per cent and 1 month at 20 per cent.

You will note that in 1908 and 1909 the importations of heavy leather are insignificant, but in 1910, after the duty was reduced from 20 per cent to 5 per cent, there was an increase from $88,000 to $955,000. During the 12 months ending December 30, 1912, the importations have increased to $1,578,802. The duties collected on heavy leather have increased from $10,000 in the fiscal year 1908 to $78,940 in the calendar year 1912.

PARAGRAPH 451-LEATHER.

tain diminishing in the supply of raw hides and skins compels us to look to foreign countries for our supplies of raw skins. In these foreign hide markets we meet with determined efforts of the foreigners to retain for their own use their production of hides and skins to cover their own requirements. Open this country to the free imports of foreign-made leather and conceive, if you can, the increased requirements of the foreign tanner for raw hides and consider the position forced upon the American tanner, who would buy hides in the world's markets. Inevitably higher prices must result from such a disturbance of the world's markets, which even now are far removed from that condition of stable equilibrium which is only consistent with the safe and profitable prosecution of any form of protective industry.

Compelled as we are to buy so large a share of our raw material abroad, contending against all the advantages possessed by European tanners because of their local buying organizations and their nearness to the source of supply, it can be seen that we have an excessive cost to pay in order to take this raw material from their territory and bring it to our American tanneries.

One hundred raw calfskins which we buy in Europe weigh_800 pounds, upon which we have to pay the freight and expenses to land them in our American tanneries.

The German tanner taking these raw skins from his immediate neighborhood can tan them and finish them, by which process their weight is reduced, so that 100 finished calfskins weigh only a little over 100 pounds, on which the European tanner would pay the freight, or, in other words, he would ship the finished product on a freight basis of one-eighth of the weight of the raw material.

The opportunity of obtaining our supply of raw material was given us when the duty was taken off hides.

This saved the trade from the unfair competition of the large packers, many of whom are now tanning their own take-off.

We wish this free import of the raw material to continue, but we need a moderate tariff against foreign leathers not only to offset the expense of freight on raw hides and skins to this market but also to make up the differential in the labor cost between foreign and home produced leather.

For the purpose of revenue and at the same time placing the American tanners on a competitive basis with the European tanners, I should propose a duty of 10 per cent instead of 15 per cent as it now stands.

We ask the retention of the small duty on leather for the benefit of the great body of proprietors of moderate capital who now, having their raw material free and equally accessible to all, have freedom. of opportunity unsurpassed in any other great industry, an industry where small beginnings still having a chance to prosper and grow, have resulted in individual industry and individual ability, an industry that never has had and does not ask for any favors nor monopoly, but only such slight protection as shall enable them to give their employees a wage such as will maintain contentment and prosperity for the workmen as well as for the employer. No governmental favoritism in the shape of an extravagant tariff is asked for. This