PARAGRAPH 427-BUTTONS. Mr. HILL. Would you be perfectly willing that a duty should be fixed at such a rate as would give 5 per cent to the domestic manufacturer? Mr. KELLER. To the domestic manufacturer? Mr. HILL. Yes. Mr. KELLER. I do not know what they are making or what their commissions are. Mr. HILL. Of course, the whole purpose as an importer is to want everything in the business, and I do not blame you, because I would get it if I could; but would not that be the way to treat the domestic manufacturer, on an equality—and you say yourselves you went out of the pearl-button business because there was nothing in it. Mr. HARRISON. I think this witness testified there are no agate buttons made in the United States. Mr. KELLER. Absolutely none made. When the McKinley bill went into effect, I remember the agate-button importers were down here, and they explained that fact to the committee, and the committee said, "the button schedule is made up, and the agate buttons are going to go in there, and anything you have to say about it will have no effect." Mr. HILL. I did not refer particularly to the agate buttons, but the witness recommended, as an importer, that there be a straight ad valorem on all classes. Mr. HARRISON. No; on everything except pearl buttons. Mr. HILL. Yes; except on pearl buttons. Mr. KELLER. The reason I say on all buttons is that the button importers had meetings in New York, and Mr. Blumenthal was delegated to represent our interests, and after discussion pro and con, they settled on the 25 per cent rate. The agate buttons prior to the McKinley bill have always paid a 25 per cent duty. Four years ago we were advised that there was not any need of coming down here to try to have the rate of duty changed, because the party then in power was elected to change the tariff, to give the country a reduction in the tariff, and they left it as it was, but in a great many things I do not think there was a reduction of the tariff. I have here, Mr. Chairman, a sample card showing the four grades of buttons which have been practically used, made of agate, the socalled commercially known agate button, and also the shoe buttons, giving the four grades with the line measurement. The line measurement is one-fortieth of an inch. In a brief which I have filed with the clerk of your committee, I have made a statement giving the aggregate differential duty, which is equivalent to 12 and 15 cents a line, opposite each one of those buttons. I would like to file that sample card with the committee. The CHAIRMAN. You may do so. The sample card of buttons referred to was thereupon filed with the clerk of the committee. Mr. FORDNEY. Did I understand you to say on your capital invested you make about 5 per cent on imported goods? Mr. KELLER. I did not. Mr. Hill said that. Mr. FORDNEY. What rate do you make out of this 10 per cent which you add for selling expense and profit? PARAGRAPH 427-BUTTONS. Mr. KELLER. We take the price of the goods which the manufacturer sells us and add the duties, plus the 10 per cent as a business charge, and that is the wholesale price of the article. Mr. FORDNEY. What portion of that 10 per cent is profit? Mr. KELLER. Ten per cent? What portion? Mr. FORDNEY. Yes. Mr. KELLER. The portion of that would be 7 to 8 per cent. Mr. FORDNEY. How many times a year do you turn your capital? Mr. KELLER. On $200,000 of importations? Mr. FORDNEY. Whatever you have invested; you make 7 per cent on what you have invested. How many times a year do you turn your capital and make 7 per cent on it? Mr. KELLER. That is on one item. We are importers Mr. FORDNEY (interposing). As a merchant, you have so much capital. Do you turn that capital more than once a year in buying and selling goods? If so, how many times a year do you turn it? Mr. KELLER. I do not quite grasp what you are after. Mr. FORDNEY. Suppose you are a merchant having $200,000 capital invested, and you are buying foreign goods. What were your total sales and what would they amount to during the year? Mr. KELLER. On all classes of merchandise for our business? Mr. KELLER. We did about $4,000,000 worth of business last year. Mr. FORDNEY. Then you turned your $200,000 of capital a good many times to do $4,000,000 worth of business? Mr. KELLER. We would have to. Mr. FORDNEY. And you made 7 per cent each time you turned your capital? Mr. KELLER. No; we did not. There are some features of it we did not make anything on. There is close competition on these lines. Mr. FORDNEY. Where does this 7 per cent come in that you say you add 10 per cent to your goods abroad and that about 7 per cent of that is profit? Mr. KELLER. I did not say it is 7 per cent profit. In an offhand way I say the foreign price of the merchandise plus the duties is taken as a basis, and we figure 10 per cent expenses, which is supposed to carry all charges. Mr. FORDNEY. Let us get down to one-half of that as profit and then say that on $200,000 capital your total sales were $4,000,000. That is turning your capital a good many times? Mr. KELLER. That is, all kinds of merchandise? Mr. FORDNEY. That is quite a good percentage on your capital. You did not find it profitable to remain in the manufacturing of buttons, and you went into merchandising and the buying of foreign goods and selling them, and you found it more profitable. You would have remained in the manufacture of buttons if you found it profitable, would you not? Mr. KELLER. I do not think so. We were importers for a good many years, and this manufacturing we had forced on us. The pearlbutton men, in a small way, when the McKinley bill went into effect, came into this country and started the manufacture of pearl buttons. We took his products, and eventually our sales grew larger than his PARAGRAPH 427-BUTTONS. factory output. We advanced him from time to time, and as his factory grew we built his factory, so he was able to make deliveries for our sales. He became eventually the manager of it. It was a stock company, but after a while, with competition, or for some other reason I do not remember any more the reason of it, but I know they gave up this factory. Mr. FORDNEY. Since the McKinley tariff law put a duty on buttons, have the prices of buttons in this country gone up or down to the consumer? Is it not a fact they have materially lowered in price to the consumer? Mr. KELLER. Oh, no; I would not say that. Mr. FORDNEY. It is my understanding that they have, many times. Mr. KELLER. Buttons are a peculiar article. There are some of a staple character. There are others of a fancy character. Some buttons have an intrinsic value, and yet a merchant in selling them will get 100 per cent over and above what they are worth just because of the demand, and the demand will fall off and the price of those buttons will drop 50 per cent within a week. Mr. FORDNEY. I thank you for that, but I want to ask you this: You spoke about the lower-priced buttons having a higher rate of duty ad valorem, as I understood you, than the higher-priced buttons? Mr. KELLER. Yes, sir. Mr. FORDNEY. On the lower-priced buttons I understood you to say something like 100 per cent; is that right? Mr. KELLER. Yes, sir. Mr. FORDNEY. They, I understood you to say, are used in making up the cheaper valued garments? Mr. KELLER. Cheap garments. Mr. FORDNEY. Children's and such like? Mr. KELLER. Yes. Mr. FORDNEY. What would that difference in the duty be on enough buttons to make a suit of clothes for a boy, the suit retailing at $5 or $6? If the duty were removed, how much less would the boy pay for that suit of clothes than he gets it for to-day under this high rate of duty? Mr. KELLER. The button I have at the head of this card [indicating] which is one of our No. 1 white lentille, which is an 18-line button, is worth 1.10 francs per great gross. Mr. FORDNEY. How much in American money is that? Mr. KELLER. With the discount, that will make it 18 cents. Mr. FORDNEY. On the gross ? Mr. KELLER. Yes, sir. Mr. FORDNEY. That is the value of a gross of those buttons? Mr. KELLER. Yes, sir. Mr. FORDNEY. How many of those buttons would be used on a suit of clothes that a boy wears, that would retail for four or five or six dollars? Mr. KELLER. They are not used on clothing of that character. They are used on calico garments and things of that kind. Mr. FORDNEY. Say on a dress on which they are used? PARAGRAPH 427-BUTTONS. Mr. FORDNEY. No. I ask what, then, would that garment sell to the consumer for, if the buttons on that garment which you have mentioned there were at a 25 per cent duty instead of 45 per cent or were put on the free list. Is not the difference in the value of that button so small it would not be noticed at all, and the consumer would get no benefit? Mr. KELLER. On the contrary, it would change the value of the garment by the dozen, the way they are sold, to about 5 per cent or 10 per cent in some cases. Mr. FORDNEY. And how much do you say those buttons sell for per gross here, in American money? Mr. KELLER. The value of that is 18 cents, plus the duty 20.7 cents. That is equivalent to a 115 per cent rate. Adding 20.7, the rate on that is Mr. FORDNEY (interrupting). On one gross? Mr. KELLER. On one gross that is 39 cents, and the freight charges, business expense, etc., 10 cents more. Mr. FORDNEY. But whether on the free list or the protected list those are exactly the same. I am speaking of the tariff alone. What is the difference between free trade and a tariff on a gross of those buttons? Mr. KELLER. It shows 115 per cent of duty. Mr. FORDNEY. How many cents would that be? Mr. KELLER. 20.7 cents. Mr. FORDNEY. Out of a gross there are not more than a dozen buttons used on a garment. Do you think that would make any difference to the consumer? Mr. KELLER. If you take a gross Mr. FORDNEY (interrupting). I am speaking of the consumer of the garment and the number of buttons on the garment for a child. or a woman. Mr. KELLER. It surely does to the manufacturer that makes them. Mr. FORDNEY. I was asking about the retail price that the ultimate consumer pays, and not the price the factory man pays. Mr. KELLER. I would not speak for the garment maker, but I am sure if he uses a dozen buttons on a garment and he has a dozen garments, which is a gross of buttons, and he buys buttons on them 21 cents cheaper Mr. FORDNEY (interposing). Twelve dozen buttons 21 cents cheaper and a dozen going on a garment? Mr. KELLER. I would naturally think the cost of producing one dozen garments is 21 cents cheaper, and on the cheaper garment it would be a matter of 5 or 10 per cent. Mr. FORDNEY. That is a cent and a fraction on a garment. Do you believe the consumer would get it for a cent and a fraction cheaper than he is getting it to-day? Mr. KELLER. I certainly think he would; yes. Mr. HILL. I want to ask about that meeting. You say there was a meeting of the importers in New York and that they agreed on a 25 per cent rate. Did I understand you correctly? Mr. HILL. Did they have any discussion about the matter? PARAGRAPH 427-BUTTONS. Mr. HILL. What was the ground on which they agreed that the 25 per cent rate-by the way, how many were there? Were you present? Mr. KELLER. I was present. There were about five or six there, if I remember right, and they represented the importers of buttons in New York. Mr. HILL. The importers of buttons in New York? Mr. KELLER. Yes, sir. Mr. HILL. What was the basis upon which they reached a 25 per cent ad valorem rate on all buttons? Mr. KELLER. The general importations of the class of merchandise that comes in, of the higher class goods, average about along that line, 20 to 25 per cent. Mr. HILL. Were any of those five or six importers who were present manufacturers in the United States ? Mr. KELLER. Yes, sir. Mr. HILL. How many of them? Mr. KELLER. There were two of them there, and they could not agree on the 25 per cent rate. They were perfectly satisfied to accept the 35 per cent rate. Mr. HILL. They thought they ought to have 35 per cent? Mr. KELLER. Because they were manufacturers. Mr. HILL. Because they were manufacturers? Mr. KELLER. Yes, sir. Mr. HILL. And the importers wanted 25 per cent? Mr. KELLER. It is only natural an importer would ask for all he can get. Mr. HILL. Did those who were manufacturers claim the 25 per cent was below the difference in cost of production here and on the other side, and that it would encourage importation? Mr. KELLER. That was not discussed. Mr. HILL. What was the reason for the respective differences of opinion between those five men, because I think that will furnish a good deal of light to the committee? Mr. KELLER. I think the other two gentlemen stated they were interested in manufacturing interests, and said they could not very well agree to anything that contemplated a lower rate than 35 per cent. In fact, there was a time there when, so far as we as importers were concerned, we did not care whether we did have it 35 per cent. Some of them did get interested enough to find out, under the existing button paragraph, that certain buttons, although they were the same style and the same grade, only of a different size and, of course, size making the value, it would be a larger button-that it was only 20 per cent duty, but it was on the high-class buttons. Mr. HILL. Then in a meeting of five importers, the three interested in the sale of foreign buttons and importing them to this country, called for a duty of 25 per cent, and the two interested in the manufacture in this country thought that 25 was too low and that it ought to be 35, and you therefore are here representing the button people of New York by a majority of one out of five in favor of the 25 per cent duty? Mr. KELLER. I am not here representing any of the button people except on agate buttons. |