The values per dozen shown in Table 1 are for all men's straw hats, and therefore include low, medium, and high priced hats, made of sennit, milan, and other braids, whereas the cost data shown later cover only low and medium priced hats made of sennit braid. The values given in Table 1, therefore, are not comparable with the cost as found by the commission. IMPORTS Since the President's proclamation changing the rate of duty from 60 to 88 per cent on men's sewed straw hats valued at $9.50 or less per dozen, effective March 14, 1926, imports of sewed hats have been recorded under two classifications, namely, "Men's sewed straw hats valued at not over $9.50 per dozen" dutiable at 88 per cent, and "other sewed hats" dutiable at 60 per cent. Imports entered under these classifications are shown in the following table. Imports at the 60 per cent rate include not only women's hats made of straw, but men's and women's sewed hats, composed wholly or in chief value of chip, grass, or any other material specified in paragraph 1406 of the tariff act of 1922. This classification covers also men's sewed straw hats, valued at more than $9.50 per dozen. TABLE 2.-Sewed hats of straw and other materials: Imports for consumption The foregoing import table shows that in the calendar year 1929, Italy supplied 98 per cent of the imports of men's sewed straw hats valued at not over $9.50 per dozen, and 95 per cent of other sewed hats, and is therefore the principal competing country. EXPORTS The exports of straw hats from the United States are small. The statistical classification includes as one item hats for both men and women, of straw and all other similar materials, whether woven or sewed. The commission found that the exports in fact consist - principally of harvest hats, and that exports of men's sewed hats of sennit types were negligible. Total exports of all classes in 1929 amounted to 78,701 dozens valued at $576,602. BASIS OF COST COMPARISON Of the classes of hats covered by paragraph 1504 (b) the most important, both in domestic production and in imports, is that covered by subparagraph (4), namely, sewed hats. For this and other reasons the cost investigation was confined to hats under this subparagraph. In the commission's investigation it was found that the imported hats falling under subparagraphs 1504 (b) (1), (2), and (5), consist of hat bodies, that is, hats in the rough, unblocked and untrimmed. There is no important domestic production of these unfinished hats. These imported hat bodies are used as material by domestic manufacturers, who block and trim them after importation. The commission therefore did not include hats under these three subparagraphs in its cost investigation. The hats covered by paragraph 1504 (b) (3) include such types as leghorn, yeddo, and Panama hats. The commission found it uncertain whether the domestic and the imported finished hats falling under this subparagraph were like or similar for the purposes of cost comparison. The imports consist in part of unfinished hats-that is, bodies or shells of the leghorn, yeddo, and other types. These are not produced in the United States, either for sale as such or otherwise, the domestic manufacturers producing finished hats of these types exclusively from imported bodies. For these reasons hats covered by bracket 1504 (b) (3) have not been included in the cost investigation. In the case of hats dutiable under paragraph 1504 (b) (4), consisting of sewed hats of straw and other materials, it was found that the most important class, both in domestic production and in imports, consisted of sennit straw hats, made by sewing from sennit braid. There have recently been large importations also of chip hats, but these were not produced in the United States in commercial quantities during the straw-hat season of 1929. The cost comparison was therefore confined to sennit straw hats. In the case of sennit hats, the commission found that those of staple grades that is, of low or medium price, constituted the great bulk of the consumption. It was found impracticable to establish comparability between domestic and imported hats of the higher-priced range. Such hats are largely sold on the basis of the reputation of the individual manufacturer, and competition is less dependent on relative costs. The cost comparisons were therefore limited to sennit hats of the staple grades. There are three major varieties of sennit hats, namely, split, improved, and flatfoot. Costs were obtained for these three classes separately. The cost comparison was based on 10 samples of imported sennit hats and 20 samples of domestic hats. For purposes of accurate cost comparisons, there were eliminated both from the domestic and foreign cost data the variable costs of the material used in trimming hats, such as ribbon, leather, and lining fabrics. The elimination of the cost of these trimming materials would not materially affect the difference in costs for identically trimmed foreign and domestic hats. The labor and other expenses in applying the trimming materials have been retained in the cost comparison. COST DATA The domestic costs were obtained from seven manufacturers, who produced the bulk of men's sennit hats of staple grades. Data for imported hats were obtained from five importers, who together handled the bulk of the imports of hats of the types under comparison. The costs of production as defined in section 336 (h)*(4) of the tariff act, in the principal competing country were not readily ascertainable. The commission therefore secured invoice prices of the imported hats. It also secured, however, the price schedule of the Italian straw hat cartel, which schedule distinguished the various major factors entering into price. Among other items one was shown to cover profit. This figure was deducted from the invoice. prices, but the commission thereupon added to the invoice prices as thus adjusted an estimated item for imputed interest on capital invested corresponding to the similar item included in the domestic costs. PRINCIPAL MARKET AND TRANSPORTATION The retail market for straw hats is distributed throughout the United States. New York City is the largest retail market, as well as the most important wholesale distributing center for domestic and imported hats. Owing to the fact that the domestic manufacture of straw hats is conducted on or close to the north Atlantic seaboard, and that imports are entered principally through the New York customs district, there is very little difference between the domestic and the imported hats as regards the cost of transportation, within the United States. The cost of transportation from each domestic producing center to New York City has been ascertained and an average has been computed. The costs of transportation from Italy, and other costs incident to delivery to New York City, have also been ascertained. SUMMARY OF COST COMPARISON Table 3 gives a summary of the comparison of costs of domestic and foreign sennit hats. For convenience the ratio of the differences in cost to the dutiable value of the several classes of hats is computed. There is also shown the ad valorem equivalent of the compound duty of $3 per dozen and 50 per cent found by the commission to be necessary to equalize the difference in costs for hats falling under paragraph 1504 (b) (4) considered as a whole. TABLE 3.-Summary cost comparison of domestic and foreign sennit straw hats DECREASING RATES OF DUTY ON HATS, BONNETS, AND HOODS Whereas, under and by virtue of section 336 of Title III, Part II, of the act of Congress approved June 17, 1930, entitled "An act to provide revenue, to regulate commerce with foreign countries, to encourage the industries of the United States, to protect American labor, and for other purposes", the United States Tariff Commission has investigated the differences in costs of production of, and all other facts and conditions enumerated in said section with respect to, hats, bonnets, and hoods, wholly or partly manufactured, described in paragraph 1504 (b) of Title I of said act, being wholly or in part the growth or product of the United States and of and with respect to like or similar articles wholly or in part the growth or product of the principal competing country; Whereas in the course of said investigation a hearing was held, of which reasonable public notice was given and at which parties interested were given reasonable opportunity to be present, to produce evidence, and to be heard; Whereas the commission has reported to the President the results of said investigation and its findings with respect to such differences in costs of production; Whereas the commission has found it shown by said investigation that the principal competing country is Italy, and that the duties expressly fixed by statue do not equalize the difference in the costs of production of the domestic articles and the like or similar foreign articles when produced in said principal competing country, and has specified in its report the decreases in the rates of duty expressly fixed by statute found by the commission to be shown by said investigation to be necessary to equalize such difference; And whereas in the judgment of the President such rates of duty are shown by such investigation of the Tariff Commission to be necessary to equalize such difference in costs of production. Now, therefore, I, Herbert Hoover, President of the United States of America, do hereby approve and proclaim decreases in the rates of duty expressly fixed in paragraph 1504 (b) (4) of Title I of said act on hats, bonnets, and hoods, composed wholly or in chief value of straw, chip, paper, grass, palm leaf, willow, osier, rattan, real horsehair, cuba bark, ramie, or manila hemp, whether wholly or partly manufactured, if sewed (whether or not blocked, trimmed, bleached, dyed, colored, or stained), from $4 per dozen and 60 per cent ad valorem to $3 per dozen and 50 per cent ad valorem, the rates found to be shown by said investigation to be necessary to equalize such difference in costs of production. In witness whereof, I have hereunto set my hand and caused the seal of the United States to be affixed. Done at the city of Washington this 5th day of February in the year of our Lord one thousand nine hundred and thirty-one, and of the Independ ence of the United States of America the one hundred and fifty-fifth. [SEAL.] HERBERT HOOVER. By the President: HENRY L. STIMSON, Q |