PARAGRAPH 423-BRUSHES. Mr. FORDNEY. Yes; your net profit. Anything beyond that is not profit. Mr. HOLTON. Between 5 and 6 per cent. Mr. FORDNEY. Do you know whether or not the men engaged in making brushes make a higher rate of interest on the capital invested than you do? Mr. HOLTON. I do not. Mr. FORDNEY. Then you have no right to complain about the money they are making, because you do not know what profit they make. Mr. HOLTON. I know they are a good deal higher rated and more prosperous apparently. Mr. FORDNEY. But you do not know how much money they do make, do you, on the capital invested? Mr. HOLTON. They are very careful not to furnish us those figures. Mr. FORDNEY. You surmise they are making more money than you are, and therefore you want an opportunity to import more foreign goods to displace American capital and labor, and give a larger profit to you. That is the whole gist of your argument, is it not? Mr. HOLTON. I hope not; I did not intend it for that. The CHAIRMAN. Your contention is that this duty now levied upon that class of brushes is prohibitory, or a large percentage of it. That is it, is it not? Mr. HOLTON. On all brushes below a certain price; yes, sir. The CHAIRMAN. You want the duty lowered so that there will be a reasonable amount of importations coming in? Mr. HOLTON. Yes, sir. The CHAIRMAN. And that the American people may have the right of selection? Mr. HOLTON. That is it, exactly. Mr. PAYNE. I want to know what that cheapest brush you have there retails for. Suppose I wanted to buy one; suppose the ultimate consumer wanted to buy one? Mr. HOLTON. A toothbrush or a hairbrush? Mr. PAYNE. A hairbrush. I do not want that Siamese-twin toothbrush. [Laughter.] I want a hairbrush. Mr. HARRISON. He is one of the few members of the committee that needs one. [Laughter.] Mr. PAYNE. Is that the cheapest one [referring to a brush which the witness exhibited]? What does that retail for? Mr. HOLTON. 40 cents. Mr. PAYNE. How much does it cost you, the foreign brush, if you want to import it, before the duty is paid? Mr. HOLTON. About $3; $2.95 to $3. Mr. PAYNE. What is that? Mr. HOLTON. $2.95 to $3 is the cheapest brush I have ever seen in comparison with that. Mr. PAYNE. $3 a dozen? Mr. HOLTON. Yes, sir. Mr. PAYNE. 25 cents apiece? Mr. HOLTON. Yes, sir. Mr. PAYNE. The duty is 40 per cent that is, 10 cents apiece. Suppose you got it reduced to 20 per cent, that duty would amount to 5 cents. The landing price would be 30 cents instead of 35 cents. PARAGRAPH 423-BRUSHES. Mr. HOLTON. We would still be behind the American brush. Mr. PAYNE. Do you think you can make this committee believe I could buy those brushes at retail for less than 40 cents? Mr. HOLTON. I do not think you can. Mr. PAYNE. If it is reduced that way? Mr. HOLTON. If it is reduced you can. Mr. PAYNE. Oh, you never have had much experience in that, I guess. That duty has been kept up pretty regularly since almost back to 1842 at 35, 40, and 45 per cent. You would find the whole profit was absorbed. I am not sure if the duty was taken off that the difference would be taken by the wholesaler and the retailer, and the ultimate consumer would have to suffer. If I understand you, you want that in your business to increase your profits, and for no other reason I can see that you have adduced here. Mr. HOLTON. We want to enter into competition with the American manufacturer on a basis plane, which we can not do now. Mr. PAYNE. You want to be so as to compete with the American manufacturer, do you? Mr. HOLTON. On a competitive basis. Mr. PAYNE. Would it not cut his profits, with the duty off? Mr. HOLTON. No, sir. Mr. PAYNE. Or his labor ratio, or something else? Mr. HOLTON. No, sir. Mr. PAYNE. He would not get as high profits if we cut down the duty, would he? Mr. HOLTON. I think he would, because the item is mostly machine labor, not manual labor. Mr. PAYNE. It would not be of benefit to me or to the rest of the gentlemen here that want to buy a brush sometimes. Mr. HOLTON. I think you will find it would. Mr. PAYNE. I have had some experience in that, and I have never found it yet. Mr. HILL. If I understand you correctly that brush cost you 25 cents and you sold it at 40 cents? Mr. HOLTON. No, sir; I did not say that. Mr. HILL. I thought you answered Mr. Payne that it cost you 25 cents and you sold it at 40 cents. Mr. HOLTON. It cost me $3.19 per dozen. Mr. HILL. That would be about 26 cents? Mr. HOLTON. Twenty-seven cents. Mr. HILL. And you sell it at 40 cents? Mr. HULL. That is an American brush. Mr. LONGWORTH. Mr. Payne asked you about the foreign brush. Mr. HOLTON. They sell these domestic brushes to us for $3.19. The nearest thing that I have seen to it in a foreign market costs us $2.97, exclusive of duty and ocean freight. Mr. LONGWORTH. You mean before you pay the duty? Mr. LONGWORTH. Yes. PARAGRAPH 423-BRUSHES, Mr. HOLTON. About 24 cents. Mr. LONGWORTH. The duty is 40 per cent? Mr. HOLTON. Yes, sir. Mr. LONGWORTH. That is about 10 cents-34 cents. Mr. HOLTON. Then you have your ocean freight, consular charges, and entrance fees. Mr. LONGWORTH. So that the ultimate consumer really gets this brush cheaper than he would if the duty was reduced to 20 per cent? Mr. HOLTON. I think not. I do not know by what process of reasoning you arrive at that. He has to pay 40 cents for the domestic brush because there is nothing else that he can buy in competition with it. Mr. LONGWORTH. He gets that for 27 cents now, does he not? consumer. Mr. LONGWORTH. What does the consumer pay? Mr. HOLTON. We buy this brush and sell it over again. Mr. LONGWORTH. What does the consumer pay? Mr. HOLTON. Forty cents. Mr. LONGWORTH. That sells for 40 cents? Mr. HOLTON. Yes. Mr. LONGWORTH. Then you made a 30 per cent profit, did you not? Mr. HOLTON. No, sir; we get $3.75 a dozen for the domestic brush; we pay $3.19 and get $3.75. We allow the trade the same discount as we get, of 2 per cent. So it nets us $3.68 Mr. FORDNEY. You can buy that and sell it for less money than you can buy a similar brush from the foreigner? Mr. LONGWORTH. Just a minute. Let us get these figures straight. You say that it costs you 24 cents abroad? Mr. HOLTON. That is the cheapest brush I have ever seen in comparison with this. Mr. LONGWORTH. You add 20 per cent to that; that is 5 cents, is it not? That would make 29 cents. Twenty per cent of 24 is about 5? Mr. HOLTON. That is right. Mr. LONGWORTH. That would be 29 cents. Mr. HOLTON. And then there will be another 5 per cent Mr. LONGWORTH (interposing). To cover the cost of handling? Mr. HOLTON. At least that. Mr. LONGWORTH. Then the brush brought into this country that retails at 27 cents to the ultimate consumer is less than the brush would be, according to your proposition, with a 20 per cent tariff? Mr. HOLTON. This price of $3.19 includes their profit here. We have to add the additional cost to the foreign brush. Mr. LONGWORTH. At that the consumer gets it cheaper? Mr. LONGWORTH. Not according to your figures. You would have to revise them. The ACTING CHAIRMAN (Mr. Harrison). Are there any other questions, gentlemen? That is all, Mr. Holton. We thank you. PARAGRAPH 423-BRUSHES. The following memorandum was subsequently filed: MEMORANDUM SHOWING SOME OF THE DISCREPANCIES EXISTING IN BRIEFS AND TESTIMONY OF AMERICAN MANUFACTURERS OF BRUSHES. COMMERCIAL BRUSHES NOT IMPORTED. Mr. Bonner states that the brushes used for decorating inside and outside of every building to a great extent are made abroad, while the brief of the Universal Brush Co., in common with seven other brush manufacturing companies, states that the United States imports no heavy paint brushes, which is true, as stated in the importers' brief, as all kinds of industrial or commercial brushes are not imported at the present time, owing to the high rate of duty. COST OF LABOR. The briefs of the American manufacturers vary as to the percentage of the cost of the brush paid for labor from 20 to 60 per cent. When it is considered that the brush industry is rapidly being converted into a machine industry from a hand industry, we feel that the present rate of 40 per cent is much higher than the actual difference in the cost of labor. This is fully borne out by the testimony of Mr. Bonner, one of the largest American manufacturers, in which he states that in the last 25 years the quality of hair brushes and toilet brushes has been improved about 60 per cent and the cost has been reduced 75 per cent. COST OF BRISTLES. The Florence Manufacturing Co., of Florence, Mass., states that the duty on bristles is nearly 3 per cent of the cost of the bristles. The Grand Rapids Brush Co. say that in the cheaper grades the duty becomes a large factor and amounts to from 331 to 25 per cent of the cost of the bristles used. Upon inquiry we find that the cheapest bristles in value are worth 40 cents a pound and pay a specific duty of 74 cents per pound, or 19 per cent ad valorem, while paint-brush bristles average from $1.50 to $2 per pound, with a duty of 74 cents per pound, amounting to 4 per cent ad valorem. Hair-brush bristles are worth from $3 to $7 per pound, with a duty of 74 cents, amounting to 1 to 2 per cent ad valorem. These figures show that the statement of the Florence Brush Co. is correct on that point. INCREASED DUTY LESSENS IMPORTATIONS. The American manufacturers ask that the duty of 40 per cent be increased to 50 per cent, stating that the increased duty will lessen the importations. It therefore follows that a decreased duty will increase the importations. SALABILITY OF AMERICAN BRUSHES VERSUS FOREIGN BRUSHES. The statement that the foreign-made brushes are favored by the buying public is contradicted on page 28 of the current issue of Fabrics, Fancy Goods and Notions, as follows: "Some years ago the statement that a brush was imported was supposed to be a clincher by the average brush salesman. To-day, however, such a statement carries no weight with the customer of average intelligence, but in many instances really depreciates the value of the brush shown.' This shows that the demand for the American brushes equals the demand for foreign brushes. AMERICAN MANUFACTURER ABLE TO UNDERSELL FOREIGN BRUSHES. The brief of eight American manufacturers states that the American toilet-brush manufacturer succeeds in producing brushes of equal quality to the foreign article and is able to sell them at from 10 to 25 per cent below the prices of the foreign brushes. The status of this industry can be summed up as follows: The American brush production is increasing rapidly. Importations are limited to certain classes of brushes, and in these classes, while the imports are increasing, they are not keeping up with the increased consumption, and the ratio of imports to American consumption is steadily decreasing. PARAGRAPH 423-BRUSHES. TESTIMONY OF COL. JOSEPH C. BONNER, OF TOLEDO, OHIO. Mr. BONNER. Mr. Chairman, I am pleased that this gives me an opportunity to correct figures given to you a few moments ago by Mr. Holton, brush importer, of New York, that the manufacture of brushes in this country amounted in the aggregate to $29,125,000. For the information of this committee, and because it has been a matter which has been presented to previous Ways and Means Committees and also to the Finance Committee of the Senate, I will say that paragraph 423, which includes brooms as well as brushes Mr. HARRISON. If you will pardon me, brooms are utterly a negligible quantity. There are none coming in. Mr. BONNER. It was stated awhile ago that there were $29,000,000 worth of brushes manufactured here and $14,000,000 worth of brooms. The chairman made the statement that the imports of brushes amounted to 7 per cent of the manufacture, and the other gentleman, Mr. Holton, stated about 8 per cent. Twenty-nine million one hundred and twenty-five thousand dollars is the total manufacture of both brushes and broom-corn brooms. Of the latter class the production is 150,000,000 and amounts to $15,000,000. This amount must be subtracted from Mr. Holton's figures and leave the brush production $14,000,000. If in the rearrangement of the tariff law brooms are put into a different schedule, it would be the only correct way, for the reason that broom corn is a vegetable matter that is grown in our country; it is a separate industry and has nothing whatever to do with brushes. It is not imported except to the extent of a thousand or two dollars. Personally I have never heard of our American broom corn being grown abroad. But it is exported to a very considerable extent, and the brush schedule changed with it. According to the information of the manufacturers of brushes in this country, there are practically no brushes exported. We, ourselves, that is speaking for the Ames-Bonner Co., at Toledo, do not export at all. Mr. HARRISON. Perhaps I do not understand what you are saying. I understood that you are trying to correct what you believe to be some mistakes in the testimony of Mr. Holton, and I think I understood you to say just now that in the previous census brooms and brushes have been ranked together. It is true that according to the census report for 1905 the American production of $21,000,000 included both brooms and brushes. When we get to the census of 1910, there are $19,431,000 worth of brooms, and then a census figure of $14,624,000 worth of brushes, and of the imports in 1910 the brushes were $1,774,000, about 8 per cent, as he stated. The imports are given entirely under the head of brushes, feather dusters, and hair pencils, and there are no exports given to us of brooms at all. Mr. BONNER. It is difficult to understand it unless there are two schedules for brooms and brushes, for there was an amendment of that character presented to the Finance Committee of the Senate when the last bill was under consideration. You have no way of knowing what the export of brushes is. The manufacturers in this country say that they do not export at all. The Ames-Bonner Co. do not export a dollar's worth. 78959°-VOL 5-13-24 |