PARAGRAPH 427-BUTTONS.

Mr. HILL. I understood you to say a moment ago you attended

that meeting?

Mr. KELLER. I did; I attended a meeting of the button importers. But I am only here representing agate buttons.

The CHAIRMAN. It is 1 o'clock, gentlemen, and the committee will stand in recess until 2 o'clock this afternoon.

Thereupon (at 1 o'clock p. m.) the committee took a recess until 2 o'clock p. m.

AFTER RECESS.

The committee reassembled, pursuant to adjournment, at 2 o'clock p. m.

The CHAIRMAN. Gentlemen, the committee will come to order. Mr. Keller, when we adjourned at recess, had not taken up the second question to which he wanted to address himself. Mr. Keller, you will come right down to it.

if

TESTIMONY OF ADOLPH KELLER-Continued.

Mr. KELLER. I will come right down to it, Mr. Chairman. It is on trouser buckles. These buckles are made especially for the American market. If they were not made for the American market, there would not be any imported. There are certain lines which I have in my brief explaining that. The value of them is 63 pfennigs, which is about four one-thousandths of a mill under 15 cents.

Mr. DIXON. A gross?

Mr. KELLER. A box of a hundred, which allows them to come in at 5 cents a hundred plus 15 per cent of the value. There are $300 worth of the higher grade imported, meaning those that are valued over 15 cents per hundred and pay duty at 10 cents per 100 and 15 per cent ad valorem. The balance, $7,200, were of the cheaper grade valued under 15 cents per 100 and pay a duty of 5 cents per 100 and 15 per cent ad valorem. Gentlemen, I would like to submit that with the brief I have, and I think that will cover the whole matter. The CHAIRMAN. We will look into it when the time comes.

THE COMMITTEE ON WAYS AND MEANS,

NEW YORK, January 28, 1913.

House of Representatives, Washington, D. C.

GENTLEMEN: Representing the following importers of agate buttons-Messrs. Strauss Bros. & Co., J. Porter & Co., and ourselves, Dieckerhoff, Raffloer & Co., all of New York-we respectfully request a reduction of duty on buttons commercially known as agate buttons.

The rate of duty as assessed under the present tariff act at one-twelfth cent per line per gross, and 15 per cent ad valorem, is excessive and unreasonable. The present rate is equivalent to a rate from 38 per cent up to 115 per cent ad valorem. The fate differentiates on the various sizes of buttons, and it would seem that a button of same grade or quality should pay the same rate of duty, whether large or small. These agate buttons are not made in this country, nor are they likely to be made, because none of the raw material required has been found here. They are entirely of foreign production, therefore without a domestic competition. These agate buttons are one of the cheapest kind of buttons produced, and are used by manufacturers of cheap shirts, underwear, etc.; in fact, on all wearing apparel of the cheapest kind.

Agate shoe buttons, which are assessed the same as agate buttons, pay an equivalent rate of from 25 to 40 per cent ad valorem. The importations of shoe buttons predominate, and would say that about 75 per cent of agate buttons imported by us are shoe

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PARAGRAPH 427-BUTTONS.

buttons. We herewith submit sample card of agate buttons and shoe buttons, which are the staple goods imported, with a statement showing the equivalent ad valorem, which is equal to the present specific and ad valorem rate as assessed; also submit schedule as paragraph 427 should read in the new tariff..

Statement of agate buttons as per sample card.

Paragraph 427: Strike out all reference to buttons in paragraph 448. Buttons or parts of buttons, button molds or blanks, finished or unfinished, shall pay duty at the following rates. The line button measure being one-fortieth of an inch, namely:

Buttons of pearl or shell, shoe buttons of all kinds of whatever material made, 25 per cent ad valorem.

Buttons of bone, horn, glass, metal, or vegetable ivory; buttons known commercially as agate buttons; and buttons of every description not specially provided for in this section; and all collar and cuff buttons and studs, 25 per cent ad valorem.

We herewith respectfully submit these statements for your consideration, and earnestly request that you will favor the reduction of duty asked for on agate buttons and agate collar buttons, namely, 25 per cent ad valorem. Respectfully submitted.

DIECKERHOFF, Raffloer & Co.

TESTIMONY OF A. V. HAMBURG.

The witness was duly sworn by the chairman.

Mr. HAMBURG. Mr. Chairman and gentlemen, I am here in the interest of the ocean pearl button manufacturers of the United States.

I have a brief that I have prepared and shall leave with you, and wish to state in addition a few facts bearing upon this matter, and I can assure you that I will not exceed the time allotted to me.

In the first place, let me state very briefly that the manufacturing of pearl buttons is a peculiar business. You have perhaps some little idea from the gentlemen that preceded me, and as I said, I represent the ocean shell. We mean by that this class of goods, entirely worked up [exhibiting sample], imported, no duty.

PARAGRAPH 427-BUTTONS.

There was a reference made here to a certain line of pearl buttons and that refers to the shell found in this country known as the sweet water or fresh water, a button in which there is considerable business. We feel that our business, or our industry, is one that this Government will recognize should be encouraged, and I will tell you why. It consists of a very large number of small concerns and no large establishments. The success of this business seemed to manifest itself shortly after the act of 1890. Prior to that time our business in this country was of very little importance. All the goods came from abroad. Probably 5 per cent of the goods consumed were made in America. Immediately upon the operation of the bill that I have referred to, or two years afterwards, that sharp, shrewd ingenuity that we have here to produce resulted in turning that around, and 95 per cent of the stuff used is made in America. With the introduction and operation of the Wilson bill, which changed the tariff, the manufacturers' production dropped possibly one-half. The foreign goods came in. Under the operation of the Dingley bill it increased again, as the figures you have there will show, and I have attached to my brief a list of the importations since 1884. Under the last bill the tariff was left unchanged, and our business has been continuing in a prosperous way.

I wish to assure you, gentlemen, that in our business, in our industry, there is no combination or trust. You say, "You are too small; your individual industries are too small." That may be. Neither is there any agreement as to prices or method of marketing our stuff, but each manufacturer places his goods on the market as best he can. The pearl buttons that were imported, and there are a few imported still, if you will allow me to explain, I will say this character of goods [exhibiting sample]. The duty, as was explained by one of the previous speakers, is 14 cents a line and 15 per cent ad valorem. Mr. HILL. Right there, let me ask you this question, Mr. Hamburg. Mr. HAMBURG. Yes, sir.

Mr. HILL. So that we may all understand it. What was the value, if any, of the material out of which the pearl buttons, which are now made from the mussels of the fresh-water rivers of the West, prior to the passage of the bill which you have referred to?

Mr. HAMBURG. I am glad you asked that question. About the time that we were in a position to make pearl buttons, there was a man by the name of Buckle who experimented in a small way with some shell that he took from the Mississippi River. After a while he finished a button that was in such shape as could be marketed. The result has been since then a very long story, but it has been one that has given the people in the West in particular-that is the kind you referred to thousands and hundreds of thousands and millions of dollars in wages. I am not representing that part of the business at all. Our shell runs from $1,200 to $1,600 a ton. Theirs runs from $15 to $20 or $30, but, nevertheless, it is a part of the entire business. I will say to you that every person in this room has probably on some part of their wearing apparel at this moment a pearl button, and you may say, "Yes, but of the garment itself, of the apparel, that is a very small part. That is just the reason why so many small concerns exist, each of them doing business in their own way. Does that answer your question?

PARAGRAPH 427-BUTTONS.

Mr. HILL. You did not tell me whether it was of any value. Mr. HAMBURG. None whatever. It runs just the same as the oyster shell, with which we have experimented. It is too brittle, and we can not do anything with it.

I have a letter from our consul general at Vienna, in which he writes as follows:

Pearl buttons will probably never be an important industry of the United States. Labor is so cheap here that they can not make them very successfully.

However, we have demonstrated that we can.

On this class of goods [exhibiting sample], of which we have had the importations referred to, the duty is about 62 per cent. I give you that within 1 or 2 per cent, without reference to the figures.

When I tell you that a button that we pay 30 cents to make is sold at 15 cents in Japan, you can see that we do not dare even to suggest reducing the tariff on our line and still maintain our industry. When I show you this button here, and these are right from that country [exhibiting sample] I can tell you that we pay 40 cents to make that, and they bring those buttons over for 27 cents. Do you think we are asking too much when we ask for 14 cents a line and 15 per cent ad valorem?

I want to say this, before the chairman informs me that my time is up: This class of goods [exhibiting sample] is made in Japan, where these samples came from, at 22 cents, 24 cents, 26 cents, and 32 cents per gross, and we pay 50 per cent more than that to our help to make them. Consequently you ask why do we ask to have our tariff maintained? I will tell you why, gentlemen. On this class of goods that I am showing you [exhibiting sample] the average pay to our help is 68 per cent of the cost. Four manufacturers are within 10 feet of me who will certify to that as being true in their factory.

Now, we have been told that we are up against it here, and I will admit that you could wreck me all to pieces here in a few questions, and probably one would be, "What are you going to do; you have to have some goods coming over to get a revenue?" Yes, that is true; but if you take off 10 per cent on enough to allow 33 per cent of our stuff to come to this country, you allow 99. You can not help it otherwise.

I have been in this business since the day the McKinley bill went through. None of our people have amassed fortunes. When we were here four years ago, when the other bill was under consideration, we submitted a sheet showing each individual concern, each company engaged in this business, with its rating. We shall ask you to refer to that list to-day and see if you think there has been much progress in it. We pay our hands good wages. We pay our cutters $15 to $20 a week, and in Bohemia they get $4.85 to $7. News left there two weeks ago to that effect. In Austria the general workman gets $4.87 to $9.75; in England, $6 to $8; and in Japan, $1.50 to $3. I am not talking about pauper labor and that low-priced labor in England. I am simply stating a few facts relating to our particular industry.

Mr. PALMER. What proportion of the total cost of producing your product is labor cost?

Mr. HAMBURG. Sixty-eight per cent.

PARAGRAPH 427-BUTTONS.

Mr. PALMER. Sixty-eight per cent of it?
Mr. HAMBURG. Yes, sir; 68.

Gentlemen, are there any other questions? I was just giving you a few facts bearing upon our business.

Mr. KITCHIN. How much do you say Japan can make these buttons for that you pay forty-odd cents to make?

Mr. HAMBURG. I will give it to you exact to the penny. You spoke about the Japs?

Mr. KITCHIN. Yes, sir.

Mr. HAMBURG. The buttons that they bring over and land at San Francisco they sell from that point at 15 cents. When those buttons are made in this country we pay 30 cents for the labor.

Mr. KITCHIN. You are not making any of those buttons, then, are you?

Mr. HAMBURG. We make the same character of goods. There are not many of these come in from Japan. The whole amount of imports last year was less than a hundred thousand dollars.

Mr. KITCHIN. I know; but if it costs you as much to produce that button as it does the Japanese to land it

Mr. HAMBURG. But the duty is more than 50 per cent.

Mr. KITCHIN. If it would be 100 per cent it would cost you twice as much.

Mr. HAMBURG. No; we do not make these. We make a different class of goods right here and sell them; this class of goods [exhibiting sample].

Mr. KITCHIN. There is one class of button that I understand from you the Japs land here at 27 cents, and it costs you some forty-odd cents to make them.

Mr. HAMBURG. Twenty-seven cents, and we pay 40 cents for the labor.

Mr. KITCHIN. You pay 40 cents for the labor?

Mr. HAMBURG. Yes, sir. Now, having this duty

Mr. KITCHIN. That does not include overhead charges or anything for material?

Mr. HAMBURG. That includes 10 per cent for fixed overhead charges, tools, and material.

Mr. KITCHIN. On that button that the Japs can make and land at 27 cents, what would the whole cost be to you for material and labor and overhead charges?

Mr. HAMBURG. Well, I will withdraw the "land" part of it. They can bring it to San Francisco and then they have to pay the duty. Mr. KITCHIN. What would that cost you? The labor costs you 40 cents. What will your overhead charges and raw material cost you?

Mr. HAMBURG. I will give you the materials.

Mr. KITCHIN. I do not think they should be allowed to have that tariff if that is true.

Mr. HAMBURG. Well, we have not made a great deal of money. The average profit is 4 per cent.

Mr. KITCHIN. What does that same button sell for?

Mr. HAMBURG. I am going to tell you.

Mr. KITCHIN. The labor cost is 40 cents?

Mr. HAMBURG. Yes.