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one kind of safety matches, the so-called book matches given away in cigar stores. These are one of the kinds of safety matches which the board had formerly held to be fancy matches.
2. While large quantities of safety matches are sold in boxes of about 60 matches each at 1 cent per box or at 5 cents per dozen boxes, large quantities of these as well as those put up in the form of paper booklets covered with advertising matter are given away by cigar stores, hotels, cafés, etc. Whether these matches pay duty at the rate of 6 cents per gross of boxes or at 35 per cent ad valorem would not affect the selling price.
3. A duty of 35 per cent ad valorem, or even a higher rate, would be a purely revenue duty. There are very few safety matches produced in this country, and there can be no general manufacture of them here unless the duty is increased to about 100 per cent ad valorem. The only concern which is equipped to make safety matches in the United States is the Diamond Match Co., and we believe that that company has machinery in only one of its factories.
The foreign safety matches are delivered at New York at less than 22 cents per gross of boxes f. o. b., exclusive of duty. It is impossible to manufacture and lay down such matches here for less than 45 cents. That they can not be successfully made here in competition with foreign manufacturers is shown by the fact that the Diamond Match Co., which has the machinery here to make them, is one of the largest importers of these matches.
The safety match is not the kind of match commonly found in the homes of the masses. The bulk of them are used by smokers, and they bear a striking similarity in use to cigars and other forms of tobacco, which have always been considered peculiarly suited to revenue taxation. Respectfully submitted.
The Ohio Match Co., Wadsworth, Ohio, by E. J. Young, Treasurer; Som
mers Bros. Match Co., Saginaw, Mich., by Frank F. Sommers, Secretary; Fred Fear Match Co., Bloomsburg, Pa., by Fred Fear, President; Union Match Co., West Duluth, Minn., by John B. Himnik, Treasurer; the Reliable Match Co., Ashland, Ohio, by Chas. D. Darrah, President; the Pennsylvania Match Co., Bellefonte, Pa., by J. L. Montgomery, Treasurer; National Match Co., Joliet, Ill., by Fred Bennitt, President; Indiana Match Corporation, Crawfordsville, Ind., by A. M. Smith, Secretary-Treasurer.
BRIEF OF SOMMERS BROS. MATCH CO., SAGINAW, MICH.
Saginaw, Mich., February 13, 1913. Hon. J. W. FORDNEY,
House of Representatives, Washington, D. C. My Dear Mr. FORDNEY: While presuming that a reduction in the tariff on matches will not be countenanced by your good self, still I would like to call your attention to the extremely prejudiced position held by one Mr. Waldo Peck Adams, who recently gave a rather extended talk before your committee.
In reply to Mr. Palmer's question, “Whom do you represent?” Mr. Adams replied, “I represent myself. I am in the fire insurance business in New York." In the same tariff hearing, in a printed extract taken from the New York Tribune of December 19, 1912, Mr. Waldo Peck Adams is confessedly a representative of the Salvation Match Có. I say "confessedly” in view of the fact that it was he who submitted these newspaper articles to your committee.
To say that the Salvation Match Co. is not actuated by any philanthropic or humani, tarian motives is putting it mildly, as it is a known fact that these people have entered into large contracts for matches with manufacturers abroad, realizing that they can purchase the class of goods they have contracted for at a much less price than they can manufacture them in this country, the present duty on matches notwithstanding.
The writer would like to see you pass this information along, and he would also
SOMMERS Bros. Match Co.,
Percussion caps, cartridges, and cartridge shells empty, thirty per centum ad valorem; blasting caps, two dollars and twenty-five cents per thousand; mining, blasting, or safety fuses of all kinds, not composed in chief value of cotton, thirty-five per centum ad valorem.
BRIEF OF COAST MANUFACTURING & SUPPLY CO., OAKLAND,
OAKLAND, CAL., January 17, 1915. Hon. OSCAR W. UNDERWOOD, Chairman Committee on Ways and Means,
House of Representatives. Dear Sir AND GENTLEMEN: We desire to present for your consideration, the following statement of facts regarding the manufacture, profits, and general information of safety fuse as applied to the business in the United States and particularly on the Pacific coast.
In order that you may be thoroughly conversant with the subject, it will be necessary for us to go somewhat into details of the manufacture of fuse.
In the first place, safety fuse is an article that is not used by the general mass of the public. Its sale and use is restricted to mines, quarries, and railroad contractors, with a very slight percentage to the farmer and lumbermen for blasting stumps and hardpan.
Its manufacture has been to a certain extent restricted to a few people for the reason that but few understand the method of its manufacture.
The manufacture of safety fuse is a very small industry, comparatively, but is a very necessary and particular one, entailing the danger of loss of life and limb with all users of the article. The amount of capital invested compared to the number of people employed is very large and the reducing of the amount of production will advance the proportion of overhead charges to such an extent that the cost of production would be so greatly increased as to surely put the American Fuse Manufacturers entirely out of business.
Great care is needed and is used by the manufacturers in this country, on account of the liability of loss of life in its use if not properly made.
The manufacture of safety fuse is in itself a dangerous operation, subject to explosions, fires, etc. This company has had three explosions at different times since its organization, and while fortunate in not causing any loss of life, we suffered siderable loss of property. Other factories, both here and in the Eastern States, have had serious explosions, causing both loss of life and great loss of property. It is not possible to insure against fire and explosions, owing to the extreme rate of insurance on such risks, and the profits of the business are not large enough to warrant paying such extreme rates.
Seldom is there found any business that does not turn over its capital at least once a year, and the most ordinary lines of business with no such risks attached turn over their capital several times in a year.
To show you just what business is done by this company, we give you the following figures: Our capital is $1,000,000. Our gross sales during the years of: 1908.
527, 000 1910.
509, 000 1911.
479, 000 1912...
571, 000 Showing a decrease each year, excepting 1912, with the duty at 35 per cent ad valorem.
In 1912 it was decided that as the inroads of foreign fuse were becoming much greater our policy would be to try and get greater volume of business, even at less
profit, and try and hold business for American made goods until such time that some relief might be had. This policy was to a certain extent successful, as is shown by the slight gain in the total amount of business done. At the same time the year 1912 showed a considerable increase, owing to the increased production of metals, especially copper. Our net profit for these years were as follows:
Per cent. 1908.
9. 6 1910.
8. 2 1912.
8.9 Showing a profit which is ridicuously small for such a business, and in the face of all kinds of improvements in manufacture, and lowering of manufacturing cost, which have been adopted during the past five years.
The corporation taxes of both the Federal Government and State levy, together with the State franchise taxes, of course have affected our net profits without giving us any chance of recuperation.
Owing to foreign competition, we are not able to change our prices to cover the market changes on our raw materials. The fact is that we have made no changes, except to reduce prices where compelled to by foreign competition, since January, 1907.
We also face the inevitable inroads into our business by the development of electricity for use in blasting, which is slowly but surely taking away from us our means of livelihood, and we have people connected with us who have been in the business since childhood and know no other business.
Taking all of these things into consideration, we can not but think that your committee, when understanding the situation, will do us justice.
We wish to call your attention to the increase in imported safety fuse since the passage of the Payne-Aldrich tariff bill in 1909. These figures are given us by the Bureau of Statistics: In 1908 the imports were valued at $10,326; in 1909 the imports were valued at $13,418; in 1910 the imports were valued at $93,689; in 1911 the imports were valued at $113,888; in 1912 the imports were valued at $ 105,000.
The ad valorem basis was much lower than our cost of production with the profits of the German manufacturer already added.
The slight decrease in 1912 no doubt was the result of our forced policy of lower prices.
The cost of manufacturing our product is much greater here than in Germany and Belgium, from which countries most of the imported fuse comes.
For instance, the actual cost of the fuse we manufacture to compete with the imported article is $2.73 per thousand feet, or $16.38 per case. The average cost of manufacture in 1912 of all kinds of fuse was $2.618 per thousand feet, or $15.71 per case, based on the total of all moneys spent for materials, labor, etc., and all fuse manufactured during the year. This includes a large percentage of the cheaper grades, which naturally brings the average down. This cost does not include any profit whatever, being the actual manufacturing cost.
The fuse imported from Germany and Belgium, with which we have to compete, is invoiced from $1.73 to $2.08 per thousand feet, and this includes the profit to the manufacturers.
COST OF MATERIALS. The cost of raw materials in this country is greater than in Europe, and at the present time the cost of many materials is much higher than the first part of 1912. We give the following comparative figures on the value of materials used in the manufacture of fuse in the United States and in Europe. The prices are the latest we can get at the present time in Europe and the prices in the United States are what we are actually paying at this time.
In looking over these figures, it will be seen at a glance that all the important materials are considerably higher in the United States than in Europe. For instance, our powder cost us twice as much as in Europe, and powder is the vital point in safety fuse. Jute yarns also are a large part of fuse, and it can be seen at a glance that they are much cheaper abroad than here. These yarns, being a raw material, carry the same duty, viz, 35 per cent as does the finished fusé.
The statement is made and advertised broadcast over the country by an importer, that the cost of materials and manufacture is no greater in this country than in Germany and Belgium. We should like proof of this assertion. We should also ask the question as to where he gets the information as to cost of manufacture in this country. The statement made by him is at random but has a misleading effect on customers and is entirely untrue.
LABOR. The question of labor and hours of labor cut no little figure in the cost of production in the United States. Following is given the comparative wages paid by us and that paid in Europe:
This informations has been obtained from authentic sources, such as the fuse manufacturers themselves. Superintendents and foremen, per month..
$56.00-$80.00 Male operatives, per day.
75- 1.00 Female operatives, per day.
24- .37 Hours of labor, all kinds, from 10 to 12 hours per day.
European factories average about 20 per cent males and 80 per cent females. We do not know the cost of office force in Europe, but it is reasonable to suppose that the same ratio exists between the two countries in this respect, as in the regular labor costs.
Superintendents and foremen, per month..
$125. 00-$200.00 Machinists, per day...
3. 75- 5. 00 Male operatives, per day.
1.75– 2. 50 Female operatives, per day.
1. 20- 1.75 Hours of labor in California: Male, 10 hours per day; female, 8 hours per day, or 48 hours per week.
In our plant we employ an average of about 50 per cent males and 50 per cent females.
As the work of the production of fuse is largely machine work, it can be readily seen that a machine will produce only so much per day, and the restriction in the number of hours of labor has a material effect on American production in comparison with European, to say nothing of the vast difference in wages paid.
In our case in California the application of the eight-hour law for females has made a difference of 20 per cent in the production. This has made it necessary for us to increase the number of machines to enable us to turn out as much fuse as formerly, and also increase the number of employees to operate the additional machines. This also has increased the invested capital, on which we are not getting adequate returns.
There is now pending before the California Legislature a bill making eight hours per day the working day for both male and female. The probabilities are that this bill will become a law, which will mean additional cost to us to cover the 20 per cent reduction in production, as well as increased capital invested to increase the facilities of our plant to keep our production the same as at the present time.
The foreign competition we are compelled to meet not only has the benefit of cheaper cost of production, but also has the cheaper freight rates. For instance, the freight from Hamburg, Germany, to Denver, Colo., is but $1.90 per hundred pounds, while the rate from San Francisco or Oakland to Denver is $2.60 per hundred pounds, whether in carload or one-case lots. Thus, it is plainly seen that we are laboring under quite a disadvantage in regard to freight rates.
In order to show the class of competitors we are up against, we might cite the methods now being pursued to mislead the purchaser into believing that they are ordering from American manufacturers.
The name of our firm is the Coast Manufacturing & Supply Co. The name adopted by our competitors in San Francisco is the Coast Supply Co., 311 California Street, San Francisco. This similarity in names will mislead the most careful buyer.
In Denver, Colo., is located another fuse factory, under the name of the National Fuse & Powder Co. Our German competitors have also adopted a similar name, calling themselves the National Fuse Co. of California, also of 311 California Street, San Francisco, using a large heading on their stationery of the words “National Fuse Co.” and very small letters for the words of California." These two companies are composed of the same individuals and have the same offices and address. They also, in the first place, used the name of “Crescent" for one of their brands of imported fuse. This name “Crescent” was registered in the United States Patent Oflice by the Ensign-Bickford Co., of Simsbury, Conn., and is a popular brand throughout the country. The attention of the Coast Supply Co. was called to the infringement, and we are now informed that they have stopped the use of this brand. This goes to show the methods adopted by importers in competing with us.
The following is the report of one of the leading financial agencies on the Coast Supply Co., and also a letter from the National Fuse Co. of California to a user in the locality where the National Fuse & Powder Co. is located: 115-7-28–11 ...... Ref. Coast Supply Co......
.San Francisco, Cal.
310 California Street. This is the style used by Hickmott Mulligan & Schupp, in the conduct of their business at above address, and upon whom see report.
75 ... 86 Not .... July 28, 1911
(See Hickmott Mulligan & Schupp.) 115–7-28-11 ... Prim. Hickmott Mulligan & Schupp
Agts. San Francisco, Cal. R. Hickmott, age 48, married.
310 California St. W.J. Mulligan, age 32, married.
Branches: Portland, Oreg. J. A. Schupp, age 40, married.
Style: “Coast Supply Co On July 27, 1911, Mr. Mulligan, stated to our reporter at his office: “This concern is in a way an offshoot of Parrott & Co. We are not incorporated, although operating under the corporate style of Coast Supply Co. We are manufacturers' agents and handle a variety of articles and represent several eastern houses. Our principal accounts are Utility Supply Co., Cincinnati, Ohio; Sterling Manufacturing Co., Ridding, Mass.; C. L. Dietz Co., Indianapolis, Ind.; Paper Canister Co., Philadelphia, Pa., and O'Neil James Co., of Chicago. We are brokers only and carry no stock of
The investment is nominal, but if required there is ample capital at hand.
The concern occupies a portion of the offices of Parrott & Co., one of the largest shipping and commission houses on this coast. All the above-named are closely associated with Parrott & Co., and the latter concern is believed to virtually own the Coast Supply Co. This business was established in April, 1911. Hickmott is president of R. Hickmott Canning Co., of Orwood, Cal. This latter concern is also believed to be subsidiary company of Parrott & Co. Mulligan was for several years manager of the lumber department of Parrott & Co. Schupp is still in the employ of Parrott & Co., where he has been a clerk for many years.