PARAGRAPH 427-BUTTONS.

Mr. KITCHIN. Now, what do your raw materials and overhead charges amount to?

Mr. HAMBURG. That button costs, with the duty, 57 cents. It costs 60 cents. Now, there is not difference enough in that for them to be handled successfully here.

Mr. KITCHIN. What I do not understand is, if the duty is not over

64 or 65 cents

Mr. HAMBURG. Well, it varies.

Mr. KITCHIN. So that really the duty on that button you are talking about is over 100 per cent, is it not?

Mr. HAMBURG. Well, you may figure it on the cost of a button or its value.

Mr. KITCHIN. I know, but then it has 3 cents margin on you. I do not quite see how you are making this button, to save my life. Mr. HAMBURG. I will tell you. One of you gentlemen were asking about the line. There is a button that may be 40 lines. That may be $4, and it only costs $4 and 15 per cent ad valorem. That would be $4.60.

Mr. KITCHIN. I was speaking of that button that was over 100 per

cent

Mr. HILL. Where did you get the figures as the value of the fresh water shell since the industry was established in this country?

Mr. HAMBURG. It had no value until they got up to sometimes as high as $35 per ton.

Mr. HILL. You are paying now more by a great deal than when the duty was first established?

Mr. HAMBURG. Oh, yes.

Mr. HILL. Consequently the duty is not as beneficial to you now as it was then?

Mr. HAMBURG. Well, the answer would be no and yes.

I want to say, Mr. Chairman and gentlemen, in closing, that, conscientiously, I do not think if you were in the button business, manufacturing pearl buttons, or were an importer in New York City handling buttons, that you would do anything else but what I am going to do here, and that is this-plead that the present tariff on pearl buttons be maintained, for this reason: The importers who handle imported goods will not come here and ask for it. They recognize that it is a necessity. They are getting better merchandise. Your wife and my wife buys a better button to-day than they ever bought of the foreign stuff, for a low price, and there is only one single industry and one single line of importers who would dare to come to you and ask a reduction on pearl buttons conscientiously, and that would be the Japanese importers in New York City.

I thank the committee for your attention.

OCEAN SHELL PEARL-BUTTON INDUSTRY.

Hon. OSCAR W. UNDERWOOD,

Chairman Committee on Ways and Means,

House of Representatives, Washington, D. C.

DEAR SIR: The manufacturers representing the various trades that use motherof-pearl or ocean shell as raw material respectfully submit to your committee the following:

PARAGRAPH 427-BUTTONS.

The manufacture of pearl buttons was made possible in the United States by the tariff of 1890. Prior to that time the industry was of little importance in the United States, being imported from Austria, England, and France.

Our industry is made up of a large number of small manufacturers located largely in the States of New Jersey, New York, and Pennsylvania, giving employment to a large number of people.

We should like to place before you the fact that in our trade there are no combinations of any kind existing, neither are there any agreements or understanding as to the maintaining of prices, for there is absolutely free competition in the open market amongst the manufacturers, each firm placing their goods on the market as best they

can.

It is fair to assume that a great number of the manufacturers are men of average intelligence, still there are no great fortunes that have been amassed in this trade, but since the successful production of this class of goods in America, the consumers have been benefited by having the very best merchandise at the lowest price.

The question of labor enters very largely into the cost of production. This applies particularly on the line of buttons known as staple pearls, the average cost of labor being 68 per cent of their value.

Prior to 1890, the consul general at Vienna reported that the manufacturing of pearl buttons was not an industry of the United States and probably would never be, stating pearl buttons could not be manufactured by machinery owing to the brittle nature of the shell and that hand labor was paid so low that the United States could not compete.

When we tell you that when sufficient protection was given us to pay the standard wages of this country we reduced the importations from $1,612,000 in 1887 to $100,000 in 1891, and since that the industry has been one of growth in this country.

Recently there has developed a most formidable danger to the industry in the shape of Japanese competition. We beg to submit a paragraph taken from the report of United States Consul General Henry B. Miller of June, 1908, from which your committee will be able to see not only the increase of this industry in Japan but also the tremendous increase of ratio of exportation of buttons to European countries.

The rate of wages paid to the pearl-button manufacturers in the United States are for cutters, $15 to $20 per week, while in Bohemia the rate of wages paid for the same work is $4.85 to $7. In Austria the general workmen on pearl buttons receive from $4.87 to $9.74, and in England $6 to $8, while in Japan $1.50 to $3. We believe this information valuable for your committee in considering our petition for the retention of the tariff on pearl buttons and pearl novelties.

We do not come here presuming to tell you what to do, but to lay before you facts relating to our industry-that of manufacturing pearl buttons and novelties and to state that the changing of the tariff on the class of goods we refer to will disturb our industry and affect thousands of workmen engaged in the industry.

We are pleased to hand you herewith a statement showing the imports from 1884 to 1912, inclusive, which we believe will be of value in connection with the foregoing facts.

We ask that the present tariff on pearl buttons and pearl novelties be retained. As contained in Schedule N, page 50, paragraph 414, pearl buttons finished or partly finished, 14 cents per line specific, and 15 per cent ad valorem; also on pearl novelties as contained in schedule "Miscellaneous manufactures," page 54, paragraph 450, 35 per cent. A. V. HAMBURG,

Chairman Manufacturers Pearl Button Committee.

JAPAN.

Consul General Henry B. Miller forwards from Yokohama the following information from newspapers published in Japan of industrial development in that Empire:

The manufacture of shell buttons was introduced into Japan by a German about 20 years ago, and factories have since been started in Osaka, Hyogo, Wakayama, and other places. Raw material is imported from India and the South Sea Islands. The principal destination of the buttons is Germany and France, whence they are reexported to other countries. It is stated that lately orders have been received by manufacturers direct from Europe. At present Osaka is the center of the shell button industry, there being in the city over 60 factories, while there are 12 or 13 in Hyogo and Wakayama, 3 or 4 in Mie, and 2 each in Ishikawa and Cita. There is 1 factory in Okayama which is devoted to the manufacture of buttons from mother-of-pearl. The

PARAGRAPH 427-BUTTONS.

value of buttons exported last year amounted to $272,600 against $169,900 in 1906 and $74,900 in 1905.

Pearl buttons imported.

We address you in the interest of the pearl button manufacturers, who make pearl buttons from shells found in the rivers and lakes of the Central West and Southern States.

Previous to 1890, there were no staple pearl buttons made in America, as the low rate of duty, which was 25 per cent ad valorem, did not allow us to compete with imported buttons.

The McKinley tariff placed a specific duty on pearl buttons, without which it would have been impossible to successfully manufacture pearl buttons in America. The present tariff shows a reduction of 40 per cent on both specific and ad valorem rates, compared with the McKinley tariff.

Under the present rate of 14 cents per line specific and 15 per cent ad valorem, the industry has made great progress, employing thousands of people, and utilizing a product, hardly known to exist previous to 1890.

The button factories now consume between 50,000 and 60,000 tons of fresh-water shells per year, giving employment to shell diggers, who gather the shells from the river beds, to transportation companies, who haul the shells to the factories, and thousands of employees in the button factories, all of whom earn good wages, in localities where otherwise it would be difficult to obtain steady remunerative employment.

By the use of improved machinery, better methods of manufacturing, and keen competition the price of these buttons has been gradually reduced until they are now selling at less than one-half the former price, while wages have advanced 40 per cent, and raw material which was of no value, to $30 per ton for the better grades.

It is absolutely necessary that a specific duty be maintained, as even a high ad valorem rate would allow the importation of cheap grades from Europe and Japan, which would seriously interfere with our industry.

This Japanese competition is a menace, which if allowed to develop through a change in tariff, will make it impossible to pay the present high rate of wages.

A peculiar condition of the pearl button industry is that the entire shell composing the raw material must be worked up at the first operation; therefore, if we attempt to fill an order for first-quality goods, we must manufacture, or partly manufacture, nearly twice the quantity of low grades, which are slow of sale.

PARAGRAPH 427-BUTTONS.

The Japanese and Austrians with cheap grades of shells, could put on the market in this country finished buttons, sewed on cards, for a little more than we pay for the first operation.

Therefore if specific duty is removed, the Japanese and Austrian goods would take the place of our cheap buttons, and we could not operate against this competition. The pearl button industry in America has several million of dollars invested in plants and special machinery-worthless for anything but manufacturing pearl buttons—and have up-to-date appliances and sanitary conditions.

The Japanese or Austrians, being skilled hand workmen, can start manufacturing pearl buttons with the investment of a few dollars, and can build himself a simple lathe, worked by foot power, and with such a machine can make the finest quality of goods with minimum waste.

The wage scale in some of our factories is higher than that paid in any other industry where equal skill is employed.

We call your attention to the fact that the Wilson tariff allowed us a specific rate on pearl buttons.

In conclusion, we respectfully request, on behalf of the fresh-water-pearl button manufacturers, that the present compound rate of duty be maintained.

HARVEY CHALMERS & SON, Amsterdam, N. Y.,
By EDWARD COOPER.

THE VIENNA PEARL BUTTON MANUFACTURING Co.,
Muscatine, Iowa,

By D. A. WILLIS, Secretary.

(Representing fresh-water-pearl button manufacturers.)

SUMMARY.

A great industry has been developed by utilizing a former worthless material, namely, fresh-water shells.

Employment given to thousands of people.

Wages exceed those paid in any other industry requiring equal skill.

Special machinery installed at high cost, worthless for any other purpose.

Impossible to produce first-grade buttons without producing many inferior grades, slow of sale.

The life of this industry depends absolutely on a specific rate of duty, and if it is removed the industry will be destroyed.

PEARL BUTTONS.

INTERNATIONAL BUTTON Co.,

Hon. HENRY G. DANFORTH,

Rochester, N. Y., January 23, 1913.

House of Representatives, Washington, D. C.

DEAR SIR: We have your favor of the 20th and are preparing a statement for the Ways and Means Committee as suggested.

As we mentioned in our previous letter, an association will present our views in regard to the pearl button question, but we trust that if you can bring any influence to bear on this you will do so. Our line and the most important line of pearl buttons is the small button such as is used on men's soft shirts. These are fairly well protected now by a combination specific and ad valorem duty. However, we take the liberty of citing an instance which will show what is likely to happen to a greater extent should the tariff be lowered. The facts are as follows: "About seven or eight years ago, we began making pearl buttons from a shell known as trocha shell, which at that time was worked only in Europe. By means of improved methods we found that we were fairly well able to compete with the European manufacturers and worked up quite a business on this line. About three years ago the Japanese began to manufacture these goods and gradually entered this market, so that we were compelled to quit this end of the business entirely, in spite of the fact that the duty the Japanese were forced to pay on this article amounted to fully 100 per cent. They are to day selling a certain size of this button in Japan for approximately 23 cents per gross in our money, whereas when we were making these goods we actually paid from 18 to 21 cents per gross for only the first operation of the dozen or more opera

PARAGRAPH 427-BUTTONS.

tions required to complete the button, to say nothing of the cost of the material, cards, boxes, etc.

If you can bring these facts to the attention of any members who may be interested, we trust you will do so, as to-day in our line it is the Japanese that is to be feared more than the German or Austrian.

Yours, very truly,

INTERNATIONAL BUTTON Co., Per E. SHAUTZ, Secretary.

BRIEF OF Pioneer Pearl BuTTON CO., POUGHKEEPSIE, N. Y,

Hon. OSCAR W. UNDERWOOD,

POUGHKEEPSIE, N. Y., February 13, 1913.

Chairman Ways and Means Committee, Washington, D. C.

DEAR SIR: We respectfully request the retention of the present tariff on pearl buttons by your honorable committee, in order that the invested capital be justly protected, as well as the present interests of those employed be maintained.

To more fully familiarize your honorable board with the reasons for the maintenance of the existing tariff, which is 14 cents a line specific and 15 per cent ad valorem, we cite the following facts:

Prior to 1890 the manufacture of staple pearl buttons was not attempted, owing to the lack of a protective duty and the further knowledge that, owing to the importation of foreign goods, it would be impossible to compete in our home markets.

Many attempts were made by our organization, then an unknown factor, but later styled as the Boepple Button Co., to manufacture pearl buttons from the mussel shells gathered in the rivers of this country, but in each instance the attempt to market them at merely a slight profit met with failure, owing to the low price of the imported buttons.

Últimately, through the adoption of the McKinley tariff, placing a specific duty on pearl buttons, the domestic product was permitted an opportunity for sale in the home market, and its manufacture has made constant advance, so that at this time we find that employment is given to 11,800 men and 4,400 women in its manufacture and distribution from the period of the gathered shell to the finished product.

In addition thereto it is very conservatively estimated that 4,800 men are employed in the gathering of the shell five months annually, which is during the open river season, and many more in its handling, etc.

The scope of its manufacture has so largely increased as to cover the States of Iowa, Illinois, Tennessee, Alabama, Kentucky, New York, New Jersey, Ohio, Michigan, Missouri, Indiana, and other States.

The invested capital in building and equipment aggregates $3,000,000.

The profit paid upon this capital for the past five years will not exceed 7 per cent, unfortunately this condition being due to the extreme competition existing in the industry.

Sufficient strides have been made in improved machinery to make the working conditions of the employees very favorable, and the wages paid for unskilled labor admittedly very good, the average for men running about $14.20 per week and female labor at $7.80 weekly.

As a comparison of wages in foreign countries, where pearl buttons are made, such as England, Germany, Austria, Italy, and Japan, we cite England, where the best wages are paid, as affecting a given task in this country: