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PARAGRAPH 427-BUTTONS.

BRIEFS SUBMITTED BY IVORY BUTTON MANUFACTURERS.

ROCHESTER BUTTON CO.-VEGETABLE IVORY BUTTONS.

COMMITTEE ON WAYS AND MEANS,

House of Representatives. GENTLEMEN: We exceedingly desire that the present tariff on vegetable ivory buttons, which is three-quarters of a cent per line per gross specific and 15 per cent ad valorem, be maintained. We manufacture ivory buttons which are used on the better grades of clothing. On the cheaper clothing are used buttons made from horn, bone, composition, and metal.

In this brief we shall confine our arguments to that which in our opinion is the most important subject in connection therewith, the retention of a specífic duty.

EXHIBIT,

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We desire to submit for your inspection and guidance an exhibit of ivory buttons, which shows a wide range of prices at which these various styles are being marketed this eeason.

You will easily observe that to your own eyes (those of a layman) there is not sufficient difference in the appearance to warrant the wide difference in prices. We beg to state that if these prices were not attached to the card and the card was presented to a manufacturer of buttons, he would find it difficult, without knowing the facts and conditions controlling, to accurately determine their real value. We desire to bring this matter conspicuously before you for the reason that these are the actual prices at which the five manufacturers who produced these goods are selling them. These prices, moreover, are based strictly on the cost of manufacturing and selling. The difference in prices is not at all one of profit, but is due to the "conditions” under which these goods are manufactured and sold.

We therefore feel that if an expert button manufacturer finds it difficult to properly appraise apparently similar buttons, that a public appraiser would find it utterly impossible.

Therefore, to prevent undervaluation and similar abuses, with their consequent injury to both the Government and manufacturers, it is in our opinion absolutely essential that the present specific duty be retained.

OTHER REASONS FOR A SPECIFIC DUTY.

1. The difference in value between the various kinds of ivory buttons made is really small. The big difference is between the various goods made in the same kind, depending on conditions, many of which can not be known to the appraiser.

2. A specific duty gives us knowledge and assurance that a certain definite amount of duty has been paid on a button of a given class. An ad valorem leaves the American manufacturer in doubt as to whether the duty has been paid or only half of it paid. This is demoralizing and very harmful to the American manufacturer. It does not necessarily increase importations. It probably lowers them, because it leads the American manufacturer in his demoralization to do foolish things. A specific, benefits manufacturer, consumer, and laborer. It means a steady market.

3. The value of an ivory button in a given class, such as " pressed blacks," is to a certain extent dependent on the expense of tools, equipment, etc., made necessary in getting out that particular “style." An appraiser can have no means of determin. ing this expense on one style as against another.

4. The value is also very largely dependent on the total quantity produced of a given “novelty” or “style.” No single invoice will reveal this to an appraiser.

5. Our business is a business of novelties and styles, all "luxuries." The styles change absolutely every six months. A button to-day worth $1 per gross may be worth to-morrow 40 or 50 cents per gross. Many of the manufacturers have to sell their “out of style” goods at 50 per cent or more below manufacturing cost. An ivory button is a very small article, usually a liali to three-fourths of an inch in diameter. Among other things, a slight diference in the contour of the face may make the button either in style" or "out of style.” This is literally and absolutely true. No appraiser can ever be able to follow the styles" in ivory buttons and intelligently determine values.

6. A middleman in Europe can obviously buy goods "out of style” there and per haps, unknown to himself, at, say, one-half of the manufacturing cost. He may offer

PARAGRAPH 427_BUTTONS.

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them for import under an ad valorem duty at a real profit to himself and yet do us a serious injustice. Incidentally, "out of style" buttons in Europe go largely into the hands of the middleman. Our only protection lies in a duty at least in part specific.

7. The value of ivory buttons is very largely determined by the "color effects": produced on the buttons, the suitability of the effect” to the prevailing weaves of cloth, etc. How an appraiser could ever be trained to use judgment on this matter is beyond us. 8. Obviously, the value of an ivory button depends on its color being just right for the "novelty" shades of woolens being sold at a given moment. Ivory buttons have a market largely because these “novelty" shades can be made in ivory buttons. Can appraisers be supposed to keep posted on the subject of prevailing shades?

9. Europe, in many cases, sets styles in cloths and in shades. It takes, however, time for these styles to travel from Europe here. Ivory buttons are produced to suit certain cloths and in the prevailing shades. Now, then, it frequently happens that by the time certain styles and shades in cloths reach this country, the buttons made therefor in Europe are "out of style" in Europe, but strictly “in style” in America. Their value in Europe is low. Their cost to a dealer would be low. He could thus honestly bring them into this country under an ad valorem at a price below possible competition. It don't take many goods to "break” a market.

10. The value of an ivory button, an article of "style,” is dependent, to an extent, on the cost involved in the design and development of that given button. The trade will pay therefor, but no appraiser is able to establish the amount of such value.

11. An exclusive ad valorem duty in connection with the business like ours, where goods go out of style so quickly and where they lose their value to such a large extent, would make it possible for the foreign manufacturers to use our market as a dumping ground and seriously disturb conditions in this country.

12. Assuming that it were possible to appraise ivory buttons on the basis of intrinsic value, which we seriously question, we still affirm that you can not appraise the value of "style."

13. The value of an ivory button is dependent, to an extent, on the quality of raw material from which it is made. Raw-material prices to-day vary according to grades from 2 cents per pound to 6 cents per pound. No appraiser on earth can determine the quality and kind of raw material used in a given button.

14. Above all, we want to emphasize to you that perhaps the greatest difference in cost hetween one ivory button and another is in the particular shade produced on the button. In making certain shades we frequently have to throw out 30 and even 40 gross out of every 100 as imperfect, due to the nature of the color. Another shade in the same design, made in identically the same manner, the only difference being the shade, may give 98 gross perfect out of a hundred. No appraisers will ever be able to give an intelligent judgment as to the relative values of given shades, yet this very difference is well understood and recognized by the manufacturers and consumers of ivory buttons.

15. New shades are continuously being produced in cloths. It requires much experimenting to secure these shades in ivory buttons. The time of expensive labor is given to this and much material is wasted in the process of experimentation. The manufacturers make the consumers pay for this cost when they buy these shades. No appraiser, however, could ever begin to estimate such cost. He would probably not know of its existence.

16. There is considerable difference in the skill of dyers in various plants, and dyers are paid from $10 to $60 per week, involving differences in cost. The product of certain dyers is worth on the market more than others. This can not be apparent to an appraiser.

17. One of the serious problems of the button business is the fact of certain goods fading color” when exposed to the light and to wear. Goods made under more expensive processes and conditions are much better in this particular than others. They cost more and are worth more. We defy an appraiser from mere examination, and without a full, intimate knowledge of these conditions, to properly value such goods. Even the best informed buyers can not tell the value in this particular, except from wear. They can, however, buy so as to be guaranteed results.

18. Many "effects” produced in ivory buttons are obtained by dyeing buttons, not once but two and three different times. We affirm that this frequently increases the total cost 10, 15, and 25 per cent. Even the best buyers can not tell how the effects are produced; they are buying for effect and for style. There is not a single appraiser in the employ of the Government that can determine in connection with ivory buttons this element of cost and value. Even manufacturers themselves can not, in many

PARAGRAPH 427—BUTTONS.

instances, tell how other manufacturers have produced certain effects or even estimate the extra cost involved.

19. Effects are produced in many other ways than by dyeing. Sometimes by double and triple pressing and by many other various methods, involving expenses that make, not infrequently, one button of the same general kind cost perhaps double the other—although both are made from the same nut. This is positively true, and yet no appraiser could be expected to have adequate knowledge of the subject or ability to discriminate.

20. One of the chief differences in the cost, as between ivory buttons, is the case with which they are shaded and inspected before being boxed. Our material is imperfect. At the last final step we always have to shade and throw out a certain percentage. Assume the same shade, the same grade of raw material, the same finish, etc. One manufacturer may throw out 1 per cent and another 20 per cent. It frequently happens that in making certain styles and certain colors we shade or throw out not only 20 per cent, but 30 per cent and even 40 per cent. Please figure the difference in cost as between buttons that “go through” and are sold in the one case as against the other. No appraiser could be expected to determine the extent to which given goods have been shaded.

21. The necessity of confining patterns to a buyer curtails the possibility of selling it to the general public and restricts its sale to the requirements of that buyer alone. This is an element of cost an appraiser can not estimate.

22. Under conditions appertaining to our business and understood by those in the business, when large buttons are in great demand the waste involved in our processes increases the cost of the coat and vest sizes. No appraiser would be likely to know this.

23. One big point is that for the reasons set forth an exclusive ad valorem duty would make it possible for a middleman to bring goods into this country, honestly perhaps, at figures entirely at variance with actual manufacturing costs; it would place a tremendous incentive on foreign manufacturers not to tell the "whole" truth, and, above all, the Government appraisers would be hopelessly unable to protect us.

24. The same variation in prices of goods made abroad prevails there as here. All based on the "conditions" attending the manufacture and sale of the goods. It is not necessarily so much a question of difference in kind, but difference in conditions, etc., as set forth by us. You will find by reports from our American consuls that prices for the same kinds vary abroad from 75 to 100 per cent. This is due to the conditions which we have emphasized, but how can any appraiser know them? Frankly, is the foreign manufacturer, who is handling buttons made under these more expensive conditions, and who is anxious for business, going to represent the cost or value of his goods at the real cost or at his “average” cost? And yet, if we have to compete with him under an ad valorem, he can easily escape part of the duty. Under a spe cific we at least know just “where we are at."

25. Under an ad valorem duty the actual duty would become uncertain and subject the American manufacturer to the uncertainties and fluctuations of the foreign market. We would also be at the mercy of that foreign country which is at the particular time the most depressed.

26. The difficulties confronting us as to the values and costs of vegetable-ivory buttons obtain just as much abroad as in this country This is evidenced by a quotation from a letter written by the American consul at Odessa, Russia, under date of May 3, 1911, wherein he states:

As regards the wholesale and retail prices of the many grades and classes of buttons, they are so complicated that to one outside the business they are bewildering. Apparently similar buttons are often very dissimilar in price.".

27. Foreign governments have recognized the peculiar conditions connected with vegetable ivory buttons, and Germany, Italy, Austria, Russia, and France have established specific duties against ivory buttons and not ad valorem.

We believe that we have demonstrated to you that the fair determination of an ad valorem duty in the case of ivory buttons is a very difficult, if not impossible, process. We sincerely hope that we have convinced you of the need of a specific duty. We earnestly ask you to leave the duty on buttons as it is. Yours, respectfuliy,

ROCHESTER Button Co.
Nelson Sage, General Manager.

PARAGRAPH 427_BUTTONS.
BRIEF SUBMITTED BY SENECA BUTTON Co., POUGHKEEPSIE, N. Y.
To the WAYS AND MEANS COMMITTEE,

House of Representatives, Washington, D. C.: The vegetable ivory button industry has a pathetic history. It secured a slight foothold in this country in the seventies, but was largely wiped out of existence during the period of 1884 to 1889. Under the McKinley tariff the industry again got a slight foothold, only to be ruined by the Wilson tariff. In 1897 we once more established, and we now face with great fear the mere possibility of any change in the present duty.

All the above has been so because labor is such a tremendous percentage of our cost. An industry where labor and salaries is 75 per cent as against raw material 25 per cent is absolutely in need of consideration as against foreign labor. Twice, by not adequately recognizing this fact, changes in the tariff have ruined the industry.

Since the early history of this business in the sixties, we do not know of one single man who has made a fortune in the manufacture of ivory buttons. Indeed we can put this much stronger; we know of only one man engaged in the business who eventually got out of it with-let us say, a dollar.

All this simply tells you that the business has been a competitive one. The consumer has benefited and the American workman has been paid American wages.

The American industry has always, at all periods, been controlled by foreign competition as it is to-day. We submit you below figures taken from your Government records. FOREIGN COMPETITION IN VEGETABLE IVORY BUTTONS UNDER PRESENT TARIFF,

Importations of vegetable ivory buttons by years.

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Vegetable ivory buttons are made from vegetable ivory nuts. The nuts are entered free from duty. The production of buttons is of course related to the importations of nuts.

Importation of ivory nuts.-1900, 8,036 tons; 1905, 9,844 tons; 1912, 11,538 tons.

The census of 1900 and 1905 gave the number of gross of ivory buttons produced and also the value thereof for each period, but the census of 1910 considered the subject of buttons as a whole and gave no data as to the vegetable ivory button industry.

Value of ivory buttons produced in the United States.

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Ivory buttons made in this country are in large measure sold to consumers direct. Hence importations should be figured in part at price to consumer. The importations for 1912 were in value $143,418 as above. Add to this, say, 40 per cent to put same on a parity with American production as sold and we have the value of imports as $200,785, or about 13 per cent of the American production as estimated above.

The above, however, tells you only a very small part of the story.

The importations are not greater because we have been constantly threatened by the increasing foreign importations, as shown by your records, and have made prices to meet the foreigners even at loss to ourselves.

PARAGRAPH 427_BUTTONS. Let us state this more strongly. The importations of vegetable ivory buttons would probably have been two or three times greater than they are, except for the fact that we have sold such large quantities at figures way below cost. The returns on the industry indicate this to you. Our books and records will absolutely prove the fact to you.

Furthermore, wherever you find any industry under such extreme competitive conditions as ours you know that many goods are sold below cost for volume, and, obviously, goods sold at such low figures take the place of goods that would come in from Europe made by cheap labor.

It is obvious to you from the foregoing that we do not and can not export any ivory buttons.

We contend that it would be eminently unfair to reduce the tariff rate on our product when we are continually striving to better the conditions under which our employees work and to shorten the hours of labor. From October 1, 1912, the working hours of women, girls, and of boys under 18 years of age were reduced in the State of New York to 54 hours per week. These hours granted now by us to both men and women serve to increase our costs.

The ivory-button factories in this country work 54 hours per week. Our foreign competitors work 60 hours per week.

As further evidence of the very sharp competition in the ivory-button industry, there have been a number of failures in the past few years.

Gentlemen, we earnestly beg of you to let us alone.
Respectfully submitted.

SENECA BUTTON Co.,
J. C. DENNEY, Secretary.

BRIEF SUBMITTED BY M. TURKELTAUB & Son, New York City. We come before you as importers, jobbers, and manufacturers of buttons. We import and job between two and three times as many buttons as we manufacture.

We refer to Schedule N, paragraph 427, dealing with vegetable-ivory buttons. In order that you may determine the proper duty on vegetable ivory buttons, we present the following facts for your consideration:

Vegetable ivory buttons are used on the better grades of clothing; on the cheaper grades of clothing there are used composition buttons, metal buttons, and hornoid buttons.

No matter how low the price of buttons may be, the consumption will not increase, owing to the fact that buttons are manufacturers' supplies and manufacturers of clothing will not consume any more than they require to sew on the clothing that they manufacture.

The present profit to the manufacturer, owing to the very keen competition that exists, is very little about 2 cents per gross on the average. We know this from the manufacturing end of our business, and under these conditions manufacturers can hardly make a living profit.

We suggest that you allow the present specific and ad valorem duty to remain, as it is hard even for an expert to determine the exact value of a vegetable-ivory button, which is made in different qualities-various goods looking alike, but costing much more to produce. For instance, a 90-cent button can very easily be brought in as a 50-cent button, and an appraiser can not distinguish between them.

If the present duty on vegetable ivory buttons shall be reduced, it is our humble opinion that under conditions now prevailing the industry in this country will be ruined. The consumer will not profit one penny, as the individual cost to a person is comparatively little, but a few cents on a suit of clothes. The foreign trusts in the ivory-button business of Europe will be enriched.

In 1884 to 1889 and in 1893 to 1897, when the tariff on vegetable ivory buttons was reduced, it practically put every manufacturer of this class of goods out of business.

Under the present tariff European manufacturers can successfully compete with American manufacturers even to a larger extent than they do. Were the tariff changed, however, even slightly, it would allow them to sell certain kinds that they can not now sell. This additional incentive will lead them to make efforts that they are not now making.

Manufacturing is but a part of our business, and were the tariff reduced it would not affect us as much as it would were we manufacturers exclusively. If a change in the tariff is made, we could dismantle our plant and buy our goods exclusively in different centers of Europe, especially Italy, where the proportion of labor is so much less than it is in the United States; and we would, therefore, be able to remain in the business and sell our merchandise at a profit by successfully underselling American manufacturers of vegetable-ivory buttons.

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