PARAGRAPH 426-BUTTON FORMS. Horn buttons are being brought in freely at present rate of duty, but this is due mainly to the fact that the European horn-button manufacturer controls to a great extent the supply of raw material; but we will manage eventually to build up this line at present rate of duty. PARAGRAPH 426. H. KERNGOOD. Button forms of lastings, mohair or silk cloth, or other manufactures of cloth, woven or made in patterns of such size, shape, or form as to be fit for buttons exclusively, and not exceeding three inches in any one dimension, ten per centum ad valorem. BUTTON FORMS. TESTIMONY OF C. H. PUTNAM, ESQ., REPRESENTING NEWELLPUTNAM MANUFACTURING CO., SPRINGFIELD, MASS. The witness was duly sworn by the chairman. Mr. PUTNAM. I represent the Newell-Putnam Manufacturing Co., and speak in reference to cloth-covered buttons, Schedule N, paragraphs 426 and 427, which is unprovided for in paragraph 427 at 50 per cent ad valorem. Prior to the Payne tariff bill the duty on these materials was 10 per cent ad valorem, in paragraph 426. It has been at this same rate from March 3, 1863. In the tariff act of March 2, August 5, and December 24, 1861, they were admitted free. In the act of March 3, 1857, they paid 4 per cent, and in the act of July 30, 1846, 5 per cent. In the existing tariff, the Payne bill, the rate of duty is 10 per cent ad valorem, in paragraph 426, but a clause was added "not exceeding 3 inches in any one dimension." This has been a great detriment to the manufacturers of covered buttons in this country, as it has barred them from getting many materials which it would be unprofitable to import in such small sizes. I will explain that. The sizes used are coat, vest, and overcoat. The 3-inch in any one dimension is an overcoat size, 36 line. The other sizes which are very much used go into paragraph 383, page 49, of the present act. That is 50 cents a pound and 60 per cent ad valorem, which is prohibitive. Mr. HAMMOND. Those are very large buttons ? Mr. PUTNAM. Yes. The CHAIRMAN. By putting in that language it made those buttons prohibitive? Mr. PUTNAM. It made them prohibitive. Mr. HULL. When did you say that language was put into the Payne law? Mr. PUTNAM. In 1909. Mr. FORDNEY. Does that affect the material you use, do I understand you to say? Mr. PUTNAM. Yes, sir. If that should be eliminated-the "not exceeding 3 inches in any one dimension," as stated in paragraph 426, it would be very beneficial to the manufacturers of this country, as it would enable them to use a great many more materials, and there fore add to the revenue of the Government. Mr. HILL. What material does it prevent you from using now? PARAGRAPH 426-BUTTON FORMS. Mr. PUTNAM. All classes of cloth material-soft material, silks, velvets. Mr. HILL. Since that time has the size of the buttons grown? Mr. HILL. Then it was not prohibitive at the time it was put in ? Mr. HILL. It is because of change of fashions? Mr. PUTNAM. Yes; it is because of change of fashions. Mr. HILL. As a matter of fact was it not true that under the other clause, as the Dingley law was at the time, there was a good deal of fraud, and a good many pieces of cloth were brought in presumably as button forms for the purpose of making buttons, that were not used for that purpose? Mr. PUTNAM. Not many. Mr. HILL. There were some, were there not? Mr. PUTNAM. There were some few; yes. Mr. HILL. And it became necessary in view of the fact it was only a 10 per cent duty Mr. PUTNAM. Yes; it went into trimmings. Mr. HILL (continuing). To clearly and specifically define that it should not be used for anything else. Mr. PUTNAM. Yes. Mr. HILL. Then there was justification for making that change? Mr. PUTNAM. That was the highest price that was paid for that material since, as I have stated, 1863. Mr. HILL. It was only a 10 per cent duty? Mr. PUTNAM. Yes. Mr. HILL. And it was simply because it was almost waste, and it was made so small it could not be used for any other purpose thån buttons, and for that reason the 75 or 80 per cent duty was cut down to accommodate the convenience of the button makers? Mr. PUTNAM. Yes. Mr. HILL. Your statement is that fashion has dictated a very much larger button? Mr. PUTNAM. Yes. Mr. HILL. And you want that restriction in the matter of dimension taken off so you can use any size which is used for buttons? Mr. PUTNAM. Yes, sir. We ask to have eliminated that expression "three inche in any one dimension." Mr. HILL. It would have to be very carefully drawn to prevent the same trouble there was before. Mr. HULL. What would you substitute? Mr. PUTNAM. I think if they were cut to the sizes for what the buttons are used Mr. FORDNEY. What size is necessary now? Mr. PUTNAM. It goes up to 70 and 80 lines-there are several sizes. Now it is just a little bit of a button, about the size of a quarter. The limit in size now is three inches in any one dimension. Mr. FORDNEY. How many inches would you suggest now? Mr. PUTNAM. Eight inches. Mr. FORDNEY. Could it be used for anything else except button material then? Mr. PUTNAM. Absolutely none. PARAGRAPH 426-BUTTON FORMS. The CHAIRMAN. You do not mean to say it would require eight inches. There is no button big enough to require eight inches of cloth to cover one button. Mr. PUTNAM. Oh, yes, there is, Mr. Chairman. Take the ladies' big fur coats. Mr. HILL. Would not they make caps out of a piece of that size? Mr. PUTNAM. Not very well. Mr. HILL. Cut them diagonally and match them up? Mr. PUTNAM. No, it is pretty hard. Mr. HILL. They did do it. Mr. PUTNAM. I do not see how they could, because they are made on a Jacquard loom. A Jacquard loom is fancy effects; the edges fray. They have just got to be made in form for button purposes exclusively. Mr. FORDNEY. How big is a button that will require a piece of cloth 8 inches square? Mr. PUTNAM. Well, I guessed at the 8 inches. I should say that it is about a size close to a dollar. You understand 8 inches is necessary, because you take an 8-inch cover and probably need half an inch to draw down under the button, to draw the material under the metal, to close it, to hold it. Therefore an 8-inch piece would be drawn down to 7 inches. Mr. PALMER. Seven inches in diameter ? Mr. PUTNAM. Yes. Mr. PALMER. Is there a button that big? Mr. PUTNAM. I would say that is what we term a "hundred line." Mr. PALMER. A hundred line? There are 40 lines to the inch, are there not? The CHAIRMAN. That would be a button 2 inches in diameter? Mr. PUTNAM. It is 40 line centimeters to the inch. That is the expression used. Now, what we call a 3-inch cloth permits us to make only a 36-line button. Mr. PALMER. A 3-inch piece? Mr. PUTNAM. Three inches in diameter. Mr. PALMER. Makes a button less than an inch in diameter? Mr. PUTNAM. Yes, sir; less than an inch in diameter. Mr. PALMER. And so in proportion? Mr. PUTNAM. Yes; you take 6 inches, that would make 72 lines; 3 inches make 56 lines, and so on. Mr. HAMMOND. I thought there were 40 lines to the inch. Mr. PUTNAM. Forty line centimeters to an inch. We use the French expression of centimeters in measuring buttons. We adopted it from Europe. The CHAIRMAN. The other people use lines? Mr. PUTNAM. We use lines, too. Mr. FORDNEY. Are you limited in your ability to get material in this country? Mr. PUTNAM. Yes; for the reason there are no machines here. You see, these are Jacquard looms. Those looms are principally in Germany. They are made by special machinery for button purposes only, and we have none in this country. We have a few Jacquard looms, which are for neckwear, silks, and things of that kind. 78959°-VOL 5-13-27 PARAGRAPH 426-BUTTON FORMS. Mr. FORDNEY. Then the material is not made here? Mr. FORDNEY. The duty is so high you can not import it, you say? Mr. PETERS. Under what paragraph are the importations exceeding 3 inches? Mr. PUTNAM. Paragraph 426. Mr. PETERS. What rate do they bear then? Mr. PUTNAM. Paragraph 426. Mr. FORDNEY. No; this is 426 where they are located now, and he says not exceeding 3 inches. Mr. PUTNAM. In any one dimension. Mr. PETERS. What paragraph do the importations that exceed 3 inches come in under? Mr. PUTNAM. Paragraph 383, at page 49 of the act, 50 cents a pound and 60 per cent ad valorem. Mr. PETERS. Do you know what the ad valorem rate is on those? Mr. PUTNAM. No; I do not. Mr. PETERS. It says so much a pound. Mr. PUTNAM. Fifty cents a pound and 60 per cent. Mr. PETERS. You do not know what the ad valorem equivalent is? Mr. PUTNAM. No. Mr. PETERS. It is largely prohibitive, you say. Mr. PUTNAM. It is prohibitive; yes, sir. The CHAIRMAN. The button rate is 10 per cent. it gets up into the cloth rate Of course, when Mr. PUTNAM (interposing). On the manufactured buttons in paragraph 427 we respectfully request a 50 per cent ad valorem as heretofore. The CHAIRMAN. Can you tell me the amount of imports and of American production? Mr. PUTNAM. No. That is in an unprovided list. In 1911 in that unprovided list it was something like $206,000, with a duty of $103,000 paid. There is no classification. We can not find the amount. There is no way of telling it. The CHAIRMAN. We are not going to write a prohibitive rate, and it is advisable for you to show us the amount of competition if you want to maintain your rate. Mr. PUTNAM. Yes. The CHAIRMAN. If you have reasonable competition now you have a good chance for a day in court, but if you have a prohibitive rate, if you can get the information as to the comparative imports and the American production, it would be a good thing for you to give it to this committee. We are suffering, of course, from the same trouble you are with respect to these schedules where they are classed together. Mr. PUTNAM. I was to the Treasury Department, but we find it impossible to get the exact amount of cloth-covered buttons that came in in any year, because they are all in an unprovided list, which come in under a 50 per cent ad valorem duty. Mr. HARRISON. There is only one class of buttons that comes in under the 50 per cent ad valorem duty. That is silk buttons, and then the basket clause. PARAGRAPH 426-BUTTON FORMS. Mr. PUTNAM. Fifty per cent. Mr. HARRISON. The other buttons carry specific duties with ad valorems running all the way through. Mr. PUTNAM. It says for the unprovided Mr. HARRISON. Those that are not specifically provided for. Mr. PUTNAM. Yes. Mr. HARRISON. That is what we call the basket clause. Mr. PUTNAM. Yes. Mr. HARRISON. Your kind of buttons are not specially mentioned. Mr. PUTNAM. No. There are other classes of buttons coming in under the same duty. Mr. HARRISON. I have no doubt there are several different kinds of buttons that come in under the basket clause; but the only class the 50 per cent ad valorem are silk buttons and the basket that carry clause. Mr. PUTNAM. Yes. Mr. HULL. What is the labor cost? Mr. PUTNAM. That is guided entirely by the class of merchandise. Mr. HULL. I notice that imports under this basket clause seem to be less than 1 per cent of the domestic production. Mr. PUTNAM. One per cent? Mr. HULL. Less than 1 per cent. Mr. FORDNEY. What is your labor cost for the entire output of the buttons? Mr. PUTNAM. About 60 per cent. Mr. FORDNEY. Sixty per cent? Mr. PUTNAM. Yes, sir. Mr. FORDNEY. And the material is 40 per cent? Mr. PUTNAM. Well, not quite, because we add our overhead charges and profits, etc. Mr. FORDNEY. Your overhead charges are not included in your labor cost? Mr. PUTNAM. No. Mr. HULL. Do you export any? Mr. PUTNAM. No, sir. They are all for domestic use. The CHAIRMAN. It is very material to the proposition in connection with your button question, of how your imports compare with American production. Mr. PUTNAM. The question in our case is entirely one of import, because you can see from the act back to 1863 that there always has been a lower tariff on the raw material. The CHAIRMAN. I am not questioning about that matter. I think you have explained the case very clearly about your buttons. I have no desire to see your buttons thrown into the cloth schedule and make you pay a 60 per cent rate when other buttons are paying a 10 per cent rate. I think you make that clear. The question you are talking about as to the 50 per cent duty on the finished product, the finished button, that is another matter. What we want to do is to get the information. Mr. PUTNAM. That 50 per cent duty, as near as we can figure it out, is about the difference of the wages between Germany and Italy, France, and this country. (See letter which follows.) |