PARAGRAPH 427-BUTTONS. under the concealed compound rates of this paragraph, they uniformly pay a duty of 85 per cent. The amount of buttons paying this particular rate of duty is not separated from the numerous other goods provided for in the same paragraph. But, excluding the goods imported under paragraph 448, the average ad valorem rates on goods imported under paragraph 427 for the year ending June 30, 1911, was 52 per cent, and for the year ending June 30, 1912, 48 per cent. This average ad valorem rate may, however, be easily misleading. Under present conditions some of the rates in para graph 427 are in effect prohibitive. If some of the buttons which were imported previous to 1890 could be imported now at the same prices the rate would average from 150 to 200 per cent, expressed in terms of equivalent ad valorem. A critical study of the tables of button imports entered for consumption, published by the Department of Commerce and Labor, for the year ending June 30, 1912, is instructive. The total value of foreign imports is given at $1,079,509.33. Many varieties of buttons are specially enumerated and not less than seven rates of duty are provided. The result is, as a study of the table shows, that the importations of some varieties of buttons, such as bone buttons and metal buttons especially, have become comparatively petty and insignificant. The explanation, of course, is that domestic manufacturers have succeeded in the past in securing what amounted to discriminating rates so as to virtually exclude the varieties of buttons in which they were especially interested. We submit that this discrimination should be wiped out. Some idea of the restrictive operation of the present schedule may be had when it is seen that of the total buttons imported for the year ending June 30, 1912, approximating in value $1,000,000, buttons to the value of $413,045 were "other buttons not specially provided for." That is to say, the value of such buttons not specially enumerated was about 40 per cent of the total quantity imported. These figures are typical of the conditions which have existed under the present tariff. In addition to this it should be also borne in mind that, not being satisfied with these several different rates of duty specified in the button paragraph, the eighth rate of 85 per cent was inserted in paragraph 448, commonly known as the jewelry paragraph. The existing tariff for the first time contains the words "dress buttons" in the jewelry paragraph, and we trust that this anomaly will be eliminated from the new law. We believe there should be a flat ad valorem rate for all grades and varieties of buttons, save pearl buttons. Although one of our number is, it is true, interested in the manufacture of pearl buttons in Muscatine, Iowa, we are all, manufacturer and importer alike, agreed as to the situation with respect to this particular branch of the button industry. This business is totally different from the manufacture of any other kind of button. In order to work up the pearl shell all qualities are produced, and it would be impossible to manufacture one quality without producing all the others. In fact, the goods are only graded and can only be graded after the blanks have passed through various processes of manufacture. An ad valorem rate would tend to flood this market with enormous quantities of cheaper grades of pearl buttons, the better grades under unfavorable tariff conditions being sold and consumed abroad. Others who will probably appear before you are likely to develop this matter more at length, but we concur in the view that it is advisable to retain a specific duty on pearl buttons. Exclusive of pearl buttons, however, we suggest a flat ad valorem rate of duty covering all other buttons. Such a rate would greatly simplify matters both for the customs authorities and for the importers. On the large majority of metal, composition, bone, pressed horn, celluloid, and covered buttons, so-called fancy buttons, and the like, manufactured in this country we believe that without any duty whatever domestic manufacturers would be able to compete. The domestic manufacturer enjoys a natural advantage. The styles, sizes, and colors of many varieties change so swiftly that in many cases before the dealer in the imported article can supply the new demand the style is again changed. The domestic manufacturer has undisputed possession of much of this field. We are not, however, asking for buttons to be put on the free list. We are asking for a return to competitive conditions which we believe this committee seeks to restore. The general button provision in the act of 1883, exclusive of some grades of buttons, provided for a duty of 25 per cent. The Wilson Act of 1894, save as to pearl and shell buttons, provided ad valorem rates of 25 and 35 per cent. We would suggest except as to the pearl and shell buttons a flat ad valorem rate of 25 per cent in the new law. Under such a paragraph it is certain that the revenue would be increased to probably double the present amount, and at the same time enable the domestic manufacturers to continue their growth and development. If anything like the present rates are maintained we believe that during the next 10 years the importation of buttons will be less than $100,000 per annum PARAGRAPH 427-BUTTONS. instead of over $3,000,000 as it was prior to 1890. At the end of this same period we predict with some confidence that the domestic production will at least equal $30,000,000 per annum. We would, therefore, respectfully submit elimination of everything relating to buttons in the present paragraph 448 and replace the present paragraph 427 with the language which will accomplish the following result: SUBSTITUTE FOR PRESENT PARAGRAPH 427, SCHEDULE n. "Buttons or parts of buttons and button molds or blanks, finished or unfinished, shall pay duty at the following rates, the line-button measure being one-fortieth of 1 inch, namely, buttons of pearl or shell 14 cents per line per gross, and in addition thereto 15 per cent ad valorem. Buttons not specially provided for in this paragraph, even if provided for in any other paragraph, 25 per cent ad valorem.” Respectfully submitted. B. BLUMENTHAL & Co. TESTIMONY OF JULIUS HEIDEN. The witness was duly sworn by the chairman of the committee. Mr. HEIDEN. Mr. Chairman, I represent Rothschild Bros. & Co., in regard to buttons, and at the same time J. W. Schloss & Co., New York. I intend to be as brief as possible. In regard to paragraph No. 426, which speaks about button material, I am perfectly satisfied with the present duty. However, I would like to have the duty reduced, if the buttons in paragraph 427 will be reduced. Of course, the reduction I will have to leave to you gentlemen how much you intend to make it. Now, in regard to paragraph 427, I wish to state there are a great number of buttons which are mentioned there which we do not handle at all, and naturally I have nothing to suggest in regard to them and I shall only mention these buttons which we are importing either importing or buying in this country. Now, in regard to the pearl buttons, I wish simply to mention that the present duty is perfectly satisfactory. Mr. HARRISON. Are you a manufacturer of pearl buttons? Mr. HEIDEN. Absolutely not. I will give you the reason why in one moment. The reason is this: The industry has increased here in this country enormously, and besides that the business has adjusted itself to the new conditions which have been caused by the new industry. Mr. HARRISON. They are the most valuable of all the kinds of buttons, are they not? Mr. HEIDEN. They are staple goods which are used all the time. We have more expensive goods than that, however. Mr. HARRISON. They are the most expensive class of buttons, are they not? Mr. HEIDEN. Oh, no. Mr. HARRISON. I do not refer to the silk buttons or fancy ornamental buttons, but the staple pearl buttons are the highest priced buttons with the exception of those, are they not? Mr. HEIDEN. Yes; of the staple goods; that is correct. PARAGRAPH 427-BUTTONS. Mr. HEIDEN. The fine goods I consider luxuries. The fine pearl buttons; yes. The cheap goods I would call necessities-the cheaper classes. Mr. HARRISON. Well, the reason I asked you is that every gen-` tleman who comes before the committee to speak on buttons, whether he is a manufacturer or an importer, is unanimously of the opinion that pearl buttons are entitled to a duty of 64 per cent, but that all other buttons ought to be on the 25 per cent basis. Mr. HEIDEN. Well, I am not quite as bad as that. I do not ask you for 25 per cent. Now, the reason is simply this, that the pearlbutton industry is a very peculiar industry, and the business is an exceedingly difficult one. For the last 15 or 20 years, since we have had the high tariff, the business has shaped itself in such a way that if you would make a change to-day it would take years before we would get a proper result again from it. Now, in regard to glass buttons, of which we are very heavy importers, I wish simply to say this: The present duty produces quite a large revenue, because the goods are in demand. The glass buttons are buttons of fashion. If they are not in demand and you allow them to be brought into this country without any duty at all, they will not be imported, and if you reduce the duty a good deal on these buttons, which are not manufactured in this country at all, you simply deprive this country of a large revenue. They may be good for another year; maybe next year they are not worth 5 cents on a dollar. Now, in regard to the duty on metal buttons, this duty is a very complicated one, and very often the importers are in dispute with the customhouse officials because we simply do not know under what paragraph or what line these buttons should be imported. There is a continuous fight about it. If the line duty would be done away with and simply an ad valorem duty put on, it would be much more satisfactory for everybody. Mr. HARRISON. Do you recommend any rate ad valorem? Mr. HEIDEN. Yes; I recommend on all these metal buttons, no matter what line, no matter what paragraph, and no matter of what material, I recommend 40 per cent. Mr. HARRISON. Did you say 40 per cent ad valorem? Mr. HEIDEN. Yes. The same is the case to-day with horn buttons. They pay to-day 50 per cent. I am perfectly satisfied with 40 per cent. Forty per cent gives a chance to the importer to do what he pleases. If he finds the market is good for him in Europe, he will buy his goods in Europe. If he finds it is to his advantage to buy here, he will buy here. He can manipulate his business to much better advantage than at present. At present he is compelled to go to the home market, but if you bring it down to 40 per cent we can bring them in and compete very nicely. Now, one of the most peculiar paragraphs we have which, I think, brings at present a very large revenue, are the buttons not specially provided for. Under this buttons not specially provided for you have buttons made of celluloid, made of silk, and sick-crocheted buttons. Now, all these buttons pay 50 per cent. I would advocate a reduction on every one of those except the crocheted buttons, down to 40. The reason why I say you should make an exception of the crocheted button, which is a handmade article, is that this is entirely an article of luxury. PARAGRAPH 427-BUTTONS. Furthermore, this is a button which is exceedingly dependent on fashion. There have been years when there has hardly anything been imported. In the last three years the fashion is in favor of crocheted buttons, and they are brought in in enormous quantities, and even if you would reduce the tariff to-day Europe could not produce the quantity which this country wants. We could use three times as much from Europe if we could get them, so the country would not be benefited by too large a reduction on this article. Mr. LONGWORTH. Why do you ask that the duty be reduced at all under those circumstances? I say with this Mr. HEIDEN. I do not ask it with regard to that. one item excepted. I say, leave the duty as it is. Mr. LONGWORTH. I beg your pardon; I thought you advocated a reduction. Mr. HEIDEN. No. Now, we come to paragraph 448, and this paragraph 448, which is really a jewelry paragraph, has the words "dress buttons" included. On account of that a great number of buttons have to pay 85 per cent. Now, this is simply a prohibitive duty which keeps out a great number of goods which could be imported here and which could be sold here in quantities. As it is at present, it makes this class of goods so expensive that even the rich buy them only by the dozen, and some people only by the piece. Mr. HARRISON. What are dress buttons? Mr. HEIDEN. In this paragraph, No. 448, it is really a jewelry paragraph, and they describe a lot of jewelry made of all kinds of material, and they use the phrase "and dress buttons." Mr. HARRISON. And that causes a great many buttons, which ought to fall under the other classes and under a lower rate, to be taxed at 85 per cent? Mr. HEIDEN. Yes. Mr. HARRISON. How do they know that they are dress buttons? What does that signify? Mr. HEIDEN. A dress button is any button that can be used for an ornament on a dress. That is the way it is described in the article. Now, these buttons I know positively if that tariff would be reduced down to 20 per cent they could be brought in in quantities and would give good revenue for the country. In fact, I would be in favor, as I stated before, of having an ad valorem duty on all goods, possibly except on the pearl buttons-on everything else right through. Mr. HARRISON. That is exactly the statement another gentleman made here, who is also an importer and not a manufacturer, that he was in favor of ad valorem duties on all other kinds of buttons except pearl buttons, and that he was in favor of specific duties on them." Mr. HEIDEN. The simple reason is, as I stated in the beginning of my remarks, that a reduction in the duty on pearl buttons would create a regular revolution in the button business. Mr. RAINEY. Do you know anything about the pearl-button business? Mr. HEIDEN. I am not a manufacturer; no. Mr. RAINEY. Do you know anything about pearl buttons? PARAGRAPH 427-BUTTONS. Mr. RAINEY. Well, I notice that for several years the importations of pearl buttons have been falling off. Mr. HEIDEN. Yes. Mr. RAINEY. In 1896 we brought in here $332,000 worth of pearl buttons, and in 1905 we only brought in about half as much—a little over half as much-$172,000 worth, and in 1910 we brought in $107,000 worth, and in 1911, under the Payne tariff, we brought in $100,000 worth, and last year we only brought in $71,000 worth. What is the reason for the decrease in the importation of pearl buttons? Mr. HEIDEN. Well, because the industry in this country is so enormous that we can do without the foreign goods. Mr. RAINEY. Do you know what the production of pearl buttons in this country amounts to? Not in lines, but in values? Mr. HEIDEN. No; I do not. Mr. RAINEY. I notice in 1905 we produced nearly $5,000,000 worth. I presume the production is increasing all the time. Mr. HEIDEN. Oh, yes; decidedly. Mr. RAINEY. But you have no idea what it is now? Mr. HEIDEN. NO. You can simply thank this to the protection of the industry, that these foreign goods are keeping out, and I think inasmuch as I heard only the other day that perhaps between 100,000 and 150,000 people are working at it, it should be continued. Mr. RAINEY. Is not that entirely due, Mr. Heiden, to the fact that the pearl-button industry of Mississippi is comparatively a new industry? Mr. HEIDEN. Yes. Mr. RAINEY. And they have their raw material at hand and have built up an enormous industry there? Mr. HEIDEN. Well, this is only a part of the value. The ocean pearl industry has increased enormously. Mr. RAINEY. What kind of pearl buttons come in? Mr. HEIDEN. What is still imported? Mr. RAINEY. You do not bring in any sweet-pearl buttons at all? Mr. HEIDEN. No; they can not be imported. Mr. RAINEY. On account of the fact that you make them here so much cheaper? Mr. HEIDEN. Yes; they make them here. Mr. RAINEY. Do you know of any combination in this country between the makers of sweet-pearl buttons? Mr. HEIDEN. Have I heard of any combination? Mr. RAINEY. Yes; by which they try to keep down the price of shells? Mr. HEIDEN. No: I never heard of it. Mr. RAINEY. And pay the fishermen to get the shells out of our western rivers much less than they did formerly-do you know anything about that? Mr. HEIDEN. No; I never heard of it. |
