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BRIEF OF EDWIN HORRAX, NEW YORK, N. Y.
New YORK, January 28, 1913. Hon. Oscar UNDERWOOD,
Chairman Ways and Means Committee. Sır: We wish herewith to protest against the present high tariff on several items known in the trade as notions; these are little necessities in life which are as staple as bread and butter, and we believe that the duty should be reduced on them; for instance, ordinary pins at present we are paying 35 per cent duty, and at this rate of duty the domestic manufacturers have absolutely no competition, as we can not figure near them with the imported goods, and the consequence of this high rate of duty has been that the domestic manufacturers have formed a combination, or so-called trust, and every mill has the same price list and discount on their goods, and furthermore will not allow an independent manufacturer to exist.
On the glass-headed pins, which mostly come from Germany, the rate of duty on these is 45 per cent. I do not believe that there is or ever has been a glass-headed pin manufactured in the United States. As these goods are used in every household, it would seem that the duties should be reduced on this line.
On ordinary wire hairpins we pay 35 per cent duty, and on account of the high duty it has absolutely stopped the importation of the cheapest class of goods, such as are put up in bulk and cabinets, as the domestic manufacturers are selling them a good deal lower than the cheapest German mills can manufacture them and pay this high rate of duty.
On garter elastics the present duty is 60 per cent on the cotton covered and 50 per cent on the silk covered; some years ago, before this high rate of duty, we used to import large quantities of the cotton covered, but on account of this extremely high rate we are now unable to import any and if the present duty is continued on the silk it will only be a question of time when we will have to stop importing these as well; some years ago we used to import large quantities of cotton tapes, shoe laces, and similar staple articles which go into the notion line, but have not been able to import any for years, as the duties have been prohibitive, and under this high protective tariff the domestic mills would only turn out an inferior article at an extremely high price, as there has been no competition.
Hoping that you will find time to go into the duties of the many hundred little items known as notions, but which are very necessary in every household in the country, we think that you will find that the duties can be materially reduced without seriously interfering with the welfare of the domestic mills, I remain, Yours, very truly,
Edwin HORRAX, Per J. C. HORRAX.
BRIEF OF ALBERT BORGZINNER & CO., NEW YORK, N. Y.
New York, February 25, 1913. The COMMITTEE ON WAYS AND MEANS,
House of Representatives, Washington, D. C. GENTLEMEN: Your attention is respectfully directed to certain inaccuracies appearing in the brief filed by the Warner Jewelry Case Co., of Buffalo, N. Y., on or about the 22d day of January, 1913, in reference to the tariff on jewelry cases.
First. The brief states that the present tariff on leatherette and velvet jewelry cases is 30 per cent ad valorem and 5 cents per pound. This is not the fact. The present tariif on paper or leatherette boxes is 45 per cent ad valorem and on velvet boxes 50 per cent.
Second. It further states that the tariff on these articles was formerly 75 and 80 per cent. This is also contrary to the fact. At no time within the last 20 years, to the writer's knowledge, has the tariff on these articles been as high as at present. I have been engaged in the business of importing jewelry cases from England and Germany for more than 20 years, and now am engaged at No. 66 Nassau Street, in the city of New York, under the name of Albert Borgzinner & Co. In my 20 years' experience I have never known the tariff on these articles to be anything nearly as high as 75 and 80 per cent. In point of fact in all that time it has never been as high as at present.
Third. The brief continues: “The duty now exacted does not protect the American manufacturer, and he is utterly incapable of competing with the German manufacturer,” etc.
This is again at variance with the fact and is without force. In spite of a tarifi of 45 and 50 per cent on these respective articles manufacturers in Buffalo, in New York PARAGRAPH 448_JEWELRY. City, in Boston, and elsewhere are now well able to afford to sell their products cheaper than the imported boxes, for the following reason:
The goods manufactured at these respective places are made by machinery. Exclusive rights to these machines, in the nature of a monopoly, are owned by three concerns in Buffalo and Boston. These machines can not be purchased. With these machines boxes are covered with leather, paper, or velvet without employing hand labor.
The materials used in making these boxes, namely, velvet, leatherette, satin, board, etc., are mainly an importation of foreign manufacture on which a duty of about 50 or more per cent has been already paid.
The only advantage that the importer can have, that I am aware of, may be in the lower cost of labor abroad. To my knowledge foreign labor is approximately 50 per cent less than domestic labor. Leather workers in the United States receive from $12 to $18 per week. In Germany they receive from 35 to 54 marks about $8.50 to $13). Girls employed in the United States receive from $4 to $9 per week; in Germany they receive from 10 to 25 marks (about $2.50 to $6).
The brief continues: “Writer can only see that the importer is the only one that derives any benefit, while if the duty would be increased it would give employment to thousands of our working people, who are the sufferers."
Will a higher duty induce the manufacturers above described to employ hand labor and abandon their machines, or will it add another story to their profits? That the importer alone benefits by the present tariff I contend is wholly untrue. The Warner Jewelry Case Co., in its brief, ignores the fact that American manufacturers of boxes have been able to build up their business solely as a result of adopting the modern ideas and improved methods inaugurated by manufacturers abroad. Not only have the American manufacturers reduced the cost of production in this country by borrowing and adopting the ideas of foreign box manufacturers, but by improving upon those ideas they have still further reduced the cost of production in the United States to such an extent that the writer is ready and able to produce American-made boxes which compare and compete to advantage in every respect with imported boxes irrespective of the fact that a duty of 45 and 50 per cent, as the case may be, now exists. If under the existing tariff the American manufacturer can compete to advantage with the foreign manufacturer, what useiul purpose can be served by disturbing the present tariff unless that purpose is to assist the manufacturers of machine-made boxes to a higher profit?
What importance attaches to the statement that the importation of these boxes has benefited only the importer, may be judged from the fact that their importation has stimulated the entire box industry to larger efforts and has enabled jewelry stores, department stores, mail-order houses, and others to offer their jewelry, etc., in presentable, inexpensive boxes; and their ability to do this has materially aided and increased their business. This state of affairs formerly did not exist, and its beneficial influence was lost to the American trade until the dozing American manufacturers awoke to the fact that they could offer the goods they now offer. Thus indirectly a very large and substantial outside field of business, if affected by the importation of jewelry cases and the consequent increase in the number employed in that field, is a substantial and growing advantage to the American workingman.
It is a significant fact that the Warner Jewelry Case Co. in its brief is silent with reference to the paper cardboard box industry. It will doubtless be of interest to fathom this silence. The tariff on these is the same as on leatherette boxes, and this is therefore a parallel case and illustrates the real situation with respect to the articles designated above to advantage. The fact is, the present tariff effectually prohibits the importation of paper cardboard boxes. Their cost abroad almost equals the selling price in the United States. Cardboard paper ring boxes may be taken as an instance. These, velveteen-lined, are sold in this country by the manufacturer for $1.65 per gross. The same boxes purchased abroad would cost in large quantities 5.75 marks per gross (that is $1.30), which with the duty and freight added would bring the cost up to $1.95 per gross. These, as I stated before, can be purchased from domestic manufacturers, even in small quantities, for $1.65 per gross, less a cash discount.
It will thus be seen that a higher rate of tariff than the present rate on the articles mentioned would not benefit the workingman, but would henefit only the few manufacturers who employ machines and who now are, as the matter stands, in spite of the existing tariff, fully able to compete with foreign manufacturers and who now can, in point of the fact, materially undersell the foreign article. Respectfully submitted.
RESOLUTIONS OF COMMITTEE OF CITIZENS OF NORTH AT
NORTH ATTLEBORO, Mass., January 27, 1913. The COMMITTEE ON WAYS AND MEANS,
United States House of Representatives, Washington, D. C. HONORABLE SIrs: In connection with the proposed tariff legislation at the coming session of Congress the Democratic town committee of North Attleboro, a committee elected by the Democratic voters of the town to promote the best interests of the Democratic Party, has instructed me to forward to you a copy of the following resolution passed by them on January 27, 1913: Whereas the customs tariff law is about to be revised by the United States Congress;
and Whereas this committee recognizes that the welfare and prosperity of the town of
North Attleboro is practically dependent upon its jewelry and silverware industries, which in turn are made possible only by an adequately protective tariff against the low-priced labor of foreign countries; and Whereas the committee has been informed and believes that even under the present
rate of duty on similar goods, the imports are steadily increasing: Therefore, be it
Resolved, That this committee record its disapproval of any reduction of duty upon jewelry, silverware, and kindred articles, and that it urge upon Congress the necessity of maintaining the present rates; and
Be it further resolved, That the secretary of this committee be and he is hereby instructed to forward to the Ways and Means Committee of Congress, to the Representatives of this district, and to the United States Senators of this State a copy of this resolution.
Dr. M. E. VANCE
(And 30 others).
PROTEST AGAINST REDUCTION OF DUTY ON JEWELRY,
NORTH ATTLEBORO, Mass., December 30, 1912. The COMMITTEE ON WAYS AND MEANS,
House of Representatives, Washington, D. C. HONORABLE Şırs: In view of the proposed legislation on the customs tariff, the undersigned, who one and all supported the Democratic Party during the recent electoral campaign, take the liberty of asking you to use your good offices against any reduction in the rate of duty now levied upon jewelry, silverware, and kindred prod. ucts, should such reduction be contemplated.
As you are aware, the Attleboros practically owe their existence as manufacturing towns to the establishment and maintenance of the great jewelry and silverware industries, which are possible only under a tariff which will equalize the difference in the cost of labor and overhead charges between the United States and foreign countries. In these lines the difference is so enormous that even with the present duty of 85 per cent the competition has been exceedingly keen, and we are informed that even with the seemingly high duty the imports have greatly increased over those of preceding years.
Å reduction in the tariff even to a small degree would therefore mean greatly increased foreign competition, with consequent lessening of our output and a scarcity of work.
It is a fact that under the construction put upon the present paragraph relating to our products, by which the duty has been reduced, whole lines of articles have been discontinued, and we greatly fear and believe that any further reduction will result in the curtailment, or indeed the actual closing down, of our factories, with enforced idleness and distress.
It is unnecessary to point out to you how vital this matter is to us as workmen in these factories, and we urge you most earnestly to do your utmost to prevent any reduction in this duty.
JOHN J. SOPER
(And 176 others).
PARAGRAPH 449_PRECIOUS STONES.
Pearls and parts thereof, drilled or undrilled, but not set or strung, ten per centum ad valorem; diamonds, coral, rubies, cameos, and other precious stones and semiprecious stones, cut but not set, and suitable for use in the manufacture of jewelry, ten per centum ad valorem; imitation precious stones, including pearls and parts thereof, for use in the manufacture of jewelry, doublets, artificial, or so-called synthetic or reconstructed pearls and parts thereof, rubies, or other precious stones, twenty per centum ad valorem.
TESTIMONY OF LUDWIG NISSEN, 182 BROADWAY, NEW YORK
Mr. Nissen was duly sworn by the chairman.
Mr. NISSEN. Gentlemen, I represent with other members of our committee who are here, the diamond, precious and semiprecious stone interests of the United States from New York to California and from Maine to Texas, including all of the branches of the trade, namely, the cutters, the importers, the jobbers, the manufacturers who use these stones in their products, the retailers, and the workingmen employed in the diamond cutting establishments; and while I have no warrant specifically from them, I know we also represent the interests of all the consumers of these commodities who buy their articles of adornment and pleasure within the borders of this country.
To the ordinary mind it would seem that inasmuch as certain necessaries of life are made to bear a high percentage of duty, these luxuries must be made to bear a higher duty than is now imposed
The experience of the past, however, has shown that a higher duty than is now levied can not be collected. Up to the time of the enactment of the Wilson bill, the duty on these commodities was never higher than 10 per cent ad valorem. Representations were then made to the Ways and Means Committee that the higher the duty the lower would be the revenue accruing to the Government from these importations. Nevertheless, the duty at that time was placed at 25 per cent on all finished goods and 10 per cent on the rough, with the result that during the operation of that bill the revenues dropped in three years to about one-half of what it had been during the three previous years under a 10 per cent duty, although in accordance with the changes that were made, the revenue should have risen from 150 to 200 per cent.
Mr. HARRISON. Mr. Nissen, does it not seem to you possible that all luxuries during those times were imported in less quantities?
Mr. NISSEN. During the first year of the operation of that bill, 1895, it may be possible that the importations were somewhat less. During the last two years of it, the business became fairly normal, and if the importations were any less than they had been previous to the operation of the bill it may be more than offset by the higher prices of the goods, because we in this country do not establish the price on diamonds and pearls and things of that kind. The prices are made on the other side, and they are not made for the accommodation of the United States alone, because the whole world buys dia
PARAGRAPH 449_PRECIOUS STONES.
monds and pearls and things of that kind in London and Paris, where the syndicates exist, and make these prices.
Mr. PAYNE. Were you importing diamonds at that time?
Mr. PAYNE. Is it not a fact that diamonds could be bought in this country at a lower price than an honest importer could import them for and pay 25 per cent duty ?
Mr. Nissen. It was a fact.
Mr. NISSEN. That was almost universally so, because 80 per cent of the goods that came into this country during the operation of that bill were smuggled. During the last year of the operation of the Wilson bill the regular importations entering through the custombouse ran down to $2,600,000. The revenue collected upon those importations was $416,000, under a 25 per cent duty upon finished goods and a 10 per cent duty upon the rough; whereas for the three previous years, when there was no duty upon the rough and a 10 per cent duty upon the finished goods, the revenue amounted to nearly a million and a half dollars, on the average.
Mr. HARRISON. Do you not believe that if the Government were to bend its attention to the matter, that a higher rate of duty could be levied on diamonds ?
Mr. Nissen. I think it absolutely impossible, no matter how much the Government would spend in the detection and prevention of smuggling.
Mr. HARRISON. Is there not a great deal more attention being paid now to smuggling than was paid to it even three or four years ago ?
Mr. NISSEN. There has been during the last four years a great deal better result in achieving some revenue for the Government by a very strict enforcement of the law at the New York entrance.
Mr. Harrison. Are there not revenue agents in the foreign capitals who are keeping track of purchases of jewels.
Mr. Nissen. To a very small extent. Mr. Harrison. Do you not believe that by extending that system a higher rate of duty could be collected upon diamonds at our ports ?
Mr. Nissen. I do not. I think it is absolutely impossible to collect a higher rate of duty upon diamonds. You will create the incentive for smuggling, which it will be absolutely impossible for the Government to circumvent, because with our enormous coast lines east and west, and our long stretches of borders south and north, it would not be possible to detect and prevent the smuggling of articles, of which you can put a million dollars worth into one man's pocket without indicating that he has anything.
Mr. HARRISON. Would not a stricter supervision of the sources from which they come make it possible to collect a higher rate of duty on them here?
Mr. Nissen. I do not believe it, because the Government has so far, with its revenue agents on the other side, paid very little attention to actual smuggling. They do pay some attention to undervaluations, and mostly of bulky goods and things of that kind, but they can not go into the hearts and safes of the people in Amsterdam and Antwerp who do this business. They never have been able to do it up to the present time.