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PARAGRAPH 451-BOOTS AND SHOES.
(a) Undisputed testimony has been given before the committee to the effect that the manufacturer of shoes in this country secures a profit not exceeding 4 per cent upon his entire turnover. According to the latest United States census, the average retail selling price of shoes in this country is $1.55. The profit to the manufacturer, therefore, upon such an average shoe is less than 6 cents. This, therefore, would be the extent of the saving to the consumer, if foreign competition were to take from the manufacturer his entire profit and give it to the consumer.
(6) If foreign shoes are to compete with shoes of American manufacture, and if revenue is to accrue to the Government from their importation, they must be sold in this country and must displace to some extent at least shoes of American manufacture. If this is the case, since fewer shoes will be manufactured here, the demand for labor will decrease. So far, therefore, as wages depend, as members of the committee have intimated they do, upon laws of supply and demand, wages must necessarily fall. This effect will be felt without regard to any reduction in the duties upon the materials entering into shoes.
(c) Reports of the latest United States census indicate that the number of establishments engaged in this country in the manufacture of shoes decreased 16 per cent between the years 1900 and 1910. This decrease has been due without doubt to the keen competition even now prevailing in this country throughout the industry, which has resulted in the survival only of the most efficient manufacturers. It is admitted that the chief aims sought in the reduction or removal of the duty upon shoes are to increase competition in this country and to secure added revenue from imports. The same process will therefore be carried further that has already been apparent throughout the industry, namely, the elimination of the manufacturer who is least able to endure fierce competition. The large manufacturer can perhaps stand the losses involved in the readjustment of conditions, gradually reducing his labor cost to a point corresponding with the same item abroad. He can buy his supplies more cheaply, in larger quantities, and at favorable times, and can utilize many forms of economy in manufacture. He can employ experts, maintain a large selling staff, advertise extensively throughout the entire country, and establish factories abroad to manufacture for him those grades of shoes in hich foreign competition is most keen. The smaller manufacturer without these advantages must feel the full effect of increased competition, and will be gradually eliminated.
III. It was said in the committee hearing that during the year 1912 not a pair of shoes worth over $1 was imported into this country. On the contrary, the New York and Boston custom houses report that during the year ending June 30, 1912, 21,243 pairs of shoes were imported, valued at an aggregate of $53,858, or of an average value of $2.53. Imports of slippers of a very low grade and price brought the average value of all imports of footwear to an extremely low figure. Respectfully submitted.
NATIONAL ASSOCIATION OF SHOE MANUFACTURERS.
GEO. E. Keith Co.,
Campello, Mass., February 13, 1913. DEAR Sir: Confirming our telephone conversation of this morning, I would state that in no country where the Geo. E. Keith Co. sells shoes, either in their own stores or by agencies, are Walkover shoes sold at as low prices as in the United States. The selling price naturally varies according to the amount of the following factors: First, duty; second, freight rates; third, cost of conducting business in the particular country, and fourth, the necessity of arriving at popular prices in the currency of the country, as for example:
The Walk-over $4 grade as sold in the United States sells in London for 16s. 6d, approximately $4.04; Paris, 25 francs, approximately $4.82; Berlin, 18 marks, approximately $4.32; St. Petersburg, 13 rubles, approximately $6.70.
The only exception to the above statement would be in the case of a sale or the closing out of odd lots. Yours, very truly,
HAROLD C. KEITI,
PARAGRAPH 451-BOOTS AND SHOES,
BRIEF OF THE COMMONWEALTH SHOE & LEATHER CO.,
BOSTON, February 25, 1913. Hon. OSCAR W. UNDERWOOD, Chairman, Committee on Ways and Means,
House of Representatives, Washington, D. C. My Dear Sir: I have read over carefully the report of the hearings given by your committee on January 29 to the representatives of the shoe and leather trade, and I gather from this report that one fact which has an important bearing on the rate of duty necessary for boots and shoes has been entirely overlooked, both by your committee and by the representatives of the trade,
From the frank statements made by yourself to our representatives, I understand that the policy of the committee is to reduce the rate which you now understand to be prohibitive to such a point that importations of a reasonable amount will occur, so that revenue may be produced for the Government, and that no duty solely for protection shall be allowed to stand. In other words, that the rate should be such as to establish reasonable competition between the industry in this and other countries, and you distinctly affirm the proposition that no rate can be levied merely to protect the profits of the manufacturer in this country.
As a citizen who has been urgent for tariff reform for many years, I can agree in fullest detail with these propositions, and it was on the basis of my belief in the equity of this plan that I persuaded the shoe trade in 1908 to authorize me to represent them at Washington and consent to the reduction of the protection on boots and shoes to such a point as represented the actual difference in labor cost. I have no doubt you will agree with me that the rate of 10 per cent now levied on boots and shoes made from the skins of animals of the bovine species does not represent anything more than this difference in labor cost. As a matter of fact, in some grades it does not represent the full difference, and in no grade with which I am familiar does it represent more than this difference.
A careful examination of the charts submitted by the representatives of the shoe trade and based on reports of the Government investigator must convince even the most skeptical that this is the present condition. On the other hand, you and the members of your committee consider this duty prohibitive because under it no importations of consequence have resulted, and right at this point occurs the misunderstanding, which I feel is likely to influence the action of your committee.
On practically all articles of merchandise manufactured in foreign countries, especially such as woolens, fine cotton goods, gloves, hosiery, crockery, steel, and many others, the conditions of the art in Europe are much more advanced than in this country, and the goods are more attractive and desirable in many respects. In such cases it is only necessary to put the duty low enough to bring the price of these goods to the level of the price of American-made goods, when importations will begin, and will reach large proportions. In other words, people appreciate the quality of the foreign product, and when it can be obtained on a competitive price basis are sure to buy quite largely of the foreign-made goods.
The opposite of this condition prevails in regard to shoes. The present method of making shoes by machinery originated in this country, and until the past eight or nine years this country has been far in advance of any foreign country in the development of this art, and at the present moment medium grades of shoes made in foreign countries are not as highly perfected in regard to fit, finish, and style as are similar goods made in this country. The foreign goods being somewhat clumsy in appearance, and when judged by the American standard, poor fitters, are not desired by the consumer in this country, and that is the reason they have not been imported in reasonable quantities since the reduction of the duty made by the Payne-Aldrich bill. The old adage illustrates this condition perfectly, “You can lead a horse to water, but you can not make him drink."
The belief expressed by members of your committee that no shoes at all had been imported (except two pairs coming from Canada) of the medium grades was, I think, an error, as I know some dealers who have imported sample lots of foreign shoes. These they have been able to obtain at lower prices in Europe than they could be furnished by manufacturers in this country, and they have undertaken, in good earnest, to introduce them into their lines and dispose of them to their regular trade. The result, however, has not been satisfactory for the reasons stated. After a thorough examination and the submission of the goods to their customers, they find the goods are not desired. Even a somewhat lower price is found not to be the controlling factor.
PARAGRAPH 451-BOOTS AND SHOES.
The American-made article meets the ideas of the American consumer 80 much better The facilities of the American manufacturer for prompt delivery and his generally more efficient system of merchandising more than offset the advantage in price in the foreign-made article, and the attempts at importing have therefore languished until they have been largely discontinued.
At the top of page 4209 Mr. McElwain said, “If you want to subsidize a man to go into business and force competition upon us, that can be done." The idea which I have expressed at some length was what then rested in Mr. McElwain's mind. I believe anyone thoroughly conversant with the shoe trade will agree that you can not induce large importations of foreign shoes into this country without you adjust the tariff in such a manner as to give the foreigner a very decided advantage in price. If the goods were greatly cheaper than American goods, they would undoubtedly be purchased in considerable quantities. If there were no tariff protection on shoes, this condition on some lines would occur at once, and importations would begin; and if the importations were not interfered with by the subsequent enactment of a protective duty, the volume of imports would increase as fast as the foreign manufacturers were able to equip themselves to produce the goods.
Is it your idea that importations of foreign goods that are undesirable from the standpoint of the American consumer should be forced into this country, to the detriment of American labor, and at that, without producing a cent of revenue for the government? I voted the straight Democratic ticket last fall wholly on the issue of tariff revision, but I must say that no such proposition as that was in my mind, and I believe was never thought of by any of the thousands of independent voters who brought the Democratic Party into power. I believe certain reductions could be made in the shoe and leather schedule that would encourage importation to some extent, and would be logical and proper, but free trade in shoes under all existing conditions would work a hardship that would seem to be uncalled for and wholly undesirable. Yours, very truly,
Chas. H. JONES.
CHARLES N. PROUTY, SPENCER, MASS., WRITES CONCERNING
TARIFF ON SHOES, ETC.
Isaac PROUTY & Co. (Inc.),
Spencer, Mass., February 1, 1913. Hon. Oscar W. UNDERWOOD,
Chairman Ways and Means Committee, Washington, D. C. DEAR Sir: In reading the morning paper's account of the recent hearing on boot and shoe tariff, I notice you ask Mr. McElwain if shoes are put on the free list if it would wipe out the industry.
I recently said in my previous communication that it would wipe out the industry unless the manufacturers cut the price of labor, which we must do, and not allow our industry to be destroyed, if the tariff is reduced to free shoes. Further consideration impresses me more seriously. Ten per cent off from a $2 shoe is $0.20. The labor in a $2 shoe is at the highest about $0.40. The leather is approximately the same price to the foreign shoe manufacturer as the home manufacturer, though labor and findings are lower, so that the $0.20 is all against the labor, which would be equivalent to a cut in labor of 50 per cent. When I come to look into this matter, I am sure it would seriously hamper, if not destroy, the industry, provided it needed any portion of this cut.
The Ways and Means Committee seemed to be very curious to know why the tariff was necessary when the American manufacturers could sell and were selling shoes in 87 countries now, in one instance at the very door of foreign competition. Mr. McElwain's answer that exports were no criterion of competition. I wish to answer this question by saying that American enterprise in early developing and promoting the industry has been in advance of other nations in machinery and application of the same, and the improved style of our goods to date. Other countries are fast approaching us in this respect by adopting our machinery, lasts, and methods of work. The goods exported are the higher grades of machine-made Goodyear sewed bottomed goods, taking the place of hand-sewed bottomed goods. Foreign countries had not got into this method of making shoes this way until recently. We were several years ahead of them, and this gave us the advantage and especially the patronage of Amercans in Europe.
PARAGRAPH 451-BOOTS AND SHOES. Also the enterprise and method of our merchants in opening special American stores helped to attract the trade for the time being. This is only temporary. They are fast adopting our machinery and methods of all kinds, so that it will be hard for us to hold our trade in these 87 countries permanently, and if the duty is reduced they will appear in our country with such low-priced goods made in our style with our improved machinery and lasts that in order to hold our trade we must necessarily reduce our prices of labor to their basis.
I am more than ever convinced that it would be very unwise to reduce the present low tariff on leather and shoes. Very respectfully,
CHARLES N. PROUTY,
BRIEF OF THE W. L. DOUGLAS SHOE CO., BROCKTON, MASS.
BROCKTON, Mass., February 14, 1913. Congressman ANDREW J. PETERS,
Ways and Means Committee, Washington, D. C. DEAR Sır: Hon. W. L. Douglas, who is at present in the South, writes me that the brief presented the Ways and Means Committee by the National Shoe Manufacturers' Association does not indicate the amount of protection offered the shoe manufacturers on a per-pair basis, and for that reason he directed that we should prepare and forward you a list showing the amount of protection thus afforded.
We have gone over the principal items entering into the production of a shoe and have calculated the protective duty on a per-pair basis, which we herewith submit:
The items on which the duty is calculated and the rate of duty follows: Upper leather, 15 per cent; patent leather, 27 cents per pound and 8 per cent; cotton linings, 2 cents and 4 cents per square yard; sole leather, 5 per cent; cotton thread, 6 cents per 1,200 yards; silk thread, $1.50 per pound; hooks and eyelets, 45 per cent; linen thread, 38 per cent; cotton thread, 6 cents per 1,200 yards; tacks, cent per M, nails, to cent per pound; slugging wire, 14 cents per pound; lacings, i5 per cent and 25 cents per pound; cartons, 45 per cent; webbing, 60 per cent.
These are the principal items entering into the cost of a shoe on which there is a protective duty. There are various other items included in the National Manufacturers' brief which we have purposely omitted, as they have very little effect on the cost of production of a pair of shoes and for that reason were left out.
The shoes on which the duty is given in this letter are all men's shoes. Mr. Douglas is quite confident that this information will be of value to you in your arguments before the Ways and Means Committee.
If there is any further information along this line that we can give you, we shall be very pleased to furnish it. Yours, very truly,
FRANK L. ERSKINE, Secretary to W. L. Douglas.
PARAGRAPH 451-BOOTS AND SHOES.
BRIEF OF WALTER H. CREAMER, LYNN, MASS.
LYNN, Mass., January 30, 1913. Hon. Oscar W. UNDERWOOD,
Chairman Ways and Means Committee. DEAR Sır: As a citizen of the shoe manufacturing city of Lynn, and a Massachusetts Democrat, of perhaps some standing, I wish to protest against the assumption that Massachusetts Democrats generally are for a protective tariff when local industries are in question, or that their adherence to the Democratic doctrine of a tariff for revenue only, is lip service alone. I yield to none in my desire to see my city and State prosperous, but I wish to go on record as in favor of putting shoes on the free list. It is true that this duty is economically harmless. It neither raises prices nor lends itself to monopoly, as our manufacturers do compete with each other. But, neither is it necessary to the welfare of the shoe industry, which, competing abroad without such an economic crutch and exporting eighty times our annual imports, certainly should not need it to compete at home. Have our manufacturers no pride, no selfreliance, that they are so mentally befogged on this issue? The assertion that the abolition of this duty would mean wage reduction is effectively answered by the fact that the reduction of the duty from 25 per cent to 10 per cent was followed by wage increase. Do not our labor leaders know that wages in the shoe industry are regulated by the general wage level in the country and not by foreign wage levels? Do they not also know that high priced labor per day, may be, and frequently is, the cheaper labor per unit of work, because it is intelligent and contented labor.' Do they not also know that the overhead expenses of our manufacturers are the cheapest in the world? These are the reasons we do not need such an artificial thing as a tariff tax to keep our present wage level in the shoe industry, or for our shoe manufacturers to compete at home as well as abroad. Take off this tax, and teach them not to be afraid of shadows or bogie men, and I venture to prophesy that two years from now no one will ask for its imposition again. And really, is there any better way of divorcing government and business, than for business not to ask government favors when it can be avoided? Yours, truly,
WALTER H. CREAMER, I am sending a copy of this to Congressman Peters.
W. H. C.
BROCKTON (MASS.) CHAMBER OF COMMERCE OPPOSE REDUC
TION OF TARIFF ON BOOTS AND SHOES.
Brockton, Mass., January 27, 1913. Whereas the prosperity of Brockton and its citizens depends in a large measure on
the manufacture of boots and shoes; and Whereas a further reduction in the tariff on boots and shoes would tend to interfere
with the steady work of thousands of our citizens; and Whereas we believe that if the tariff were taken off boots and shoes Brockton would
lose a share of that industry to other countries:
Be it resolved, That we, assembled in a regular meeting of the Brockton Chamber of Commerce, representing the business interests and working people of the community, do hereby ask and pray that no reduction from the present duty on boots and shoes be made; and
Be it further resolved, That a copy of these resolutions shall be spread upon the records of this organization and one copy shall be sent to Congressman Augustus P. Gardner that he may use it before the committee from Congress that will hear this subject.
BROCKTON CHAMBER OF COMMERCE,