PARAGRAPH 462-ASBESTOS.

Mr. RHETT. I do not. The duty as fixed to-day allows the foreign products to come in at 22 cents, as against our 25 cents, and therefore the foreign manufacturer has that advantage over the American manufacturer, by 2 cents.

Mr. FORDNEY. Tell me, if you can, what is the difference between the asbestos found in this country and that found in Canada, and tell me why the Canadian asbestos can be used and ours can not be used?

Mr. RHETT. NO; I can not tell you that. can probably tell you that.

Mr. FORDNEY. Is there any difference?

Those who follow me

Mr. RHETT. Yes. One is fiber asbestos and the other is not; but I would suggest that you ask those questions of some people who have been in the business for 12 years. They can tell you more about it. We have to get all of ours from Canada, as we can not find any in this country that we can use.

Mr. HILL. Do you know of any reason why there should be a distinction drawn in this country between that and any other textile that is in the tariff law, that yarn should be given the same rate of duty as the finished product?

Mr. RHETT. There is a difference in the preparation of this yarn. The labor cost is the large proportion. In cloth it takes but very little labor.

Mr. HILL. Is not that true of wool and silk and cotton?

Mr. RHETT. Yes; the labor is a very small proportion as compared to this. It takes a great deal of labor to make that into yarn. When you take silk and cotton, with the new machinery in these industries, the question of labor is very small; but to get this into yarn the labor cost is enormous.

Mr. FORDNEY. Are there any importations of cloth under the existing law?

Mr. RHETT. $96,000 last year.

Mr. FORDNEY. In proportion to the consumption, what does that amount to? What was the consumption in the United States? Mr. RHETT. I do not know exactly the consumption of cloth separated. Yarn was $241,000 and cloth was $96,000.

Mr. FORDNEY. Then, as compared with our consumption of those goods in this country, you do not know what the imported quantity is? Mr. RHETT. I should say in the neighborhood of 25 per cent.

Mr. FORDNEY. About 25 per cent?

Mr. RHETT. About 25 per cent.

Mr. FORDNEY. So that under the existing tariff laws those goods are coming into this country?

Mr. RHETT. They are coming in, and they have increased 125 per cent in the last five years.

Mr. FORDNEY. How has the price to the consumer of these goods ranged since the establishment of that law-up or down?

Mr. RHETT. Since the establishment of the law?

Mr. FORDNEY. Yes.

Mr. RHETT. I do not know that there is any difference in the amount of importations. I do not know that it has increased the cost very appreciably.

PARAGRAPH 462-ASBESTOS.

Mr. FORDNEY. Well, do you make the cloth?

Mr. RHETT. We make the cloth; yes.

Mr. FORDNEY. What has been the prevailing price of your cloth? Mr. RHETT. We were not in existence. We have been only in existence three years.

Mr. FORDNEY. Has it gone up or down since you have been in the business?

Mr. RHETT. I do not know that that would be governed at all by this law, because the tariff law went in in 1909 and we were not established.

Mr. FORDNEY. You started in after the adoption of that law?

Mr. RHETT. When you first start in, it takes a long time before you are actually able to put goods on the market.

Mr. FORDNEY. Well, have your prices ranged up or down since you have been in business?

Mr. RHETT. I can not tell you that. It has ranged up and down, but I do not think it is largely governed by the importations.

Mr. FORDNEY. You do not know whether, since you started into this business, the price of this cloth has gone up or down? Mr. RHETT. No; I can not tell you that.

Mr. FORDNEY. Yet you have only been in business for three years? Mr. RHETT. We have only been in business for three years. I am not familiar with that particular detail; the president is here if you want to ask him that.

Mr. RAINEY. How much came in five years ago?

Mr. RHETT. How much what?

Mr. RAINEY. You said the importations

Mr. RHETT. $150,000.

Mr. RAINEY. How much comes in now?

Mr. RHETT. $336.701.

Mr. RAINEY. One hundred and twenty-five per cent increase?
Mr. RHETT. One hundred and twenty-five per cent increase.

Mr. RAINEY. You do not think that is a very large increase, do you? Mr. RHETT. I think that is pretty good, when the increase in our manufactures here has not been 100 per cent.

Mr. RAINEY. If $1 worth had come in five years ago and $4 worth came in now, that would be a 300 per cent increase, and still that would not be very much coming in, would it?

Mr. RHETT. No; but the proportion of increase has been 125 per

cent.

Mr. RAINEY. Well, when the total is so small, it does not amount to much?

Mr. RHETT. But that is pretty good when you have to figure against 25 per cent of the total consumption. That will set the price very often.

Mr. KITCHIN. What is the proportion of the raw material-that is, of the asbestos-in one of these finished products of yours; 20 or 25 or 50 per cent?

Mr. RHETT. Of the finished material?

Mr. KITCHIN. Yes.

Mr. RHETT. Every particle is asbestos.

Mr. KITCHIN. If you have a hundred dollars' worth of finished product what proportion would be the raw product; the asbestos?

PARAGRAPH 462-ASBESTOS.

Mr. RHETT. About 40 per cent.

Mr. KITCHIN. And the other, the 60 per cent, is labor and overhead charges?

Mr. RHETT. Labor and overhead charges. I think the labor constitutes 40 per cent and the overhead charges 20 per cent. Of course, the overhead charges abroad are a little less than our overhead charges. That includes superintendence and sales and all that sort of thing. Mr. FORDNEY. During the time that the importations have increased, what has been the increase of the home production?

Mr. RHETT. One hundred per cent, while there has been an increase of 125 per cent, so that the competition has been very active. Mr. FORDNEY. The evidence, then, is that the law is sufficiently low now to let in competition?

Mr. RHETT. It is. It has let competition in to the extent of its increasing 125 per cent, and they are now selling 25 per cent of the goods.

Mr. RAINEY. But our figures show that the production was over $12,000,000?

Mr. RHETT. But a large amount of that is not in the fiber business at all. Ten millions of that is in the shingles and paper.

Mr. RAINEY. The note indicates that it is in the same industry. Mr. RHETT. As far as I can understand, the sale value to our industry would hardly be $2,000,000. The rest of it is in other things; I do not know what.

Mr. HAMMOND. I suppose this steam business refers to the wrappings about steam pipes?

Mr. RHETT. Yes; but that does not pass through the factory at all.

Mr. HAMMOND. It is a paper?

Mr. RHETT. It is a kind of paper. It is a mixture, but it is not spun. What we are asking for is protection on the spinning.

Mr. HAMMOND. It is not asbestos paper?

Mr. RHETT. No; it is only in yarn and in cloth that the labor element enters so largely.

Mr. RAINEY. Do you not make the paper in this country?

Mr. RHETT. Yes; but none of us do. We are only asking this for the asbestos textile industry or the mills which produce about $1,500,000 to $2,000,000 worth of that in 12 months.

Mr. RAINEY. You just want protection for whatever your mill produces, and let everything else take care of itself?

Mr. RHETT. No; we do not know anything about their business. The only business we are interested in is this textile business, of which we know the labor element constitutes so large a part that unless our labor goes down, it is impossible to compete.

Mr. KITCHIN. Is this asbestos which is imported here going into the manufacture of products such as you make?

Mr. RHETT. Not one-third of it, hardly one-fifth of it. The balance of it goes into a product which is like steam wrapping and asbestos covering and shingles. That is another very large industry.

Mr. FORDNEY. You say the difference in cost between the yarns and the cloth would be compensated by 3 per cent? Mr. RHETT. Three cents. They tell me that 3 cents is the of the difference in the cost of labor to turn the yarn into the cloth.

average

PARAGRAPH 462-ASBESTOS.

Mr. FORDNEY. As the present law reads 25 per cent, as I have it, and 40 per cent, where would that 3 cents bring the raw material? How near would that bring the raw material up to the finished product?

Mr. RHETT. I will give you an illustration of the difference in yarn and cloth. Take this illustration which I first gave to you, of 10 cents for material in yarn, 10 cents for labor, and 5 cents for cloth. Add 40 per cent to that on the yarn product, which is 10 cents for material, 5 cents for labor, and 3 cents overhead cost, and 40 per cent would be 7.2; adding the 7.2 to the 18 would give 25.2. In this country the yarn would cost 10 cents for the material, 10 cents for the labor, and 5 cents for the overhead charges, or 25 cents. you add 40 per cent to the foreign product, it will be 25.2 and our product will be 25 per cent even.

Mr. FORDNEY. Then suppose the duty on the raw material were raised to bring it up to a proper basis of difference between the cost of production of the yarn and your cost, what point would that be brought to?

Mr. RHETT. If you put a duty on the raw material and the man on the other side has no duty on it

Mr. FORDNEY (interposing). I am supposing now that in order to get a revenue for this Government-because you say there is none of that asbestos produced in this country

Mr. RHETT (interposing). Not a bit.

Mr. FORDNEY (continuing). It must be imported, and therefore, in order to get revenue, suppose we raise the duty on raw material; how near would we have to bring it to this 40 per cent to get the proper difference in the manufacture of the cloth out of the yarn?

Mr. RHETT. If they put what duty on the raw material?

Mr. FORDNEY. If they raise it up and bring it up to a proper difference between the cost of the yarn and the cloth?

Mr. RHETT. You mean raise the duty on yarn?

Mr. FORDNEY. No; on the raw material. The duty on the raw material is 25 per cent, and on your finished product

Mr. RHETT (interposing). There is no duty on the raw material. Mr. FORDNEY. On yarn, I meant to say.

Mr. RHETT. The duty on yarn brought here is 25 per cent, and 40 per cent would equalize that within two-tenths of 1 cent. It would make the cost in this country 25 cents, and give them a cost here of

25.2 cents.

Mr. FORDNEY. Suppose they brought the yarn up to make a proper difference, they would have to bring it up to 38 per cent?

Mr. RHETT. That is right.

Mr. HARRISON. Your time has expired, Mr. Rhett.

Mr. HILL. Just a moment, please.

This is a very good illustration of the Payne tariff law. You started your factory when?

Mr. RHETT. Three years ago.

Mr. HILL. That is the year after the Payne tariff law was enacted. As a matter of fact, are you doing well? I am not going to ask what your profits are-I do not think that is a proper inquiry. But are you doing fairly well in the industry?

Mr. RHETT. We think we are beginning to do well.

PARAGRAPH 462-ASBESTOS.

Mr. FORDNEY. You think there is a chance of doing well under the 40 per cent duty?

Mr. RHETT. I think there is a chance of our doing well; yes. I think there is a chance of increasing our business under the present duty.

Mr. HILL. What was the particular reason why you did not start this industry before the Payne tariff bill was passed?

Mr. RHETT. Simply because we had not learned the industry. We had been studying several years, and buying and selling yarns and calculating, but we found we could get hold of the raw material and we thought it best to go right to the bottom and we created a trade and took the article

Mr. HILL (interposing). You had given no consideration to that before the passage of the Payne tariff law?

Mr. RHETT. I do not think the passage of that bill, Mr. Hill, entered into the consideration of these people. I think they had been studying the question before.

Mr. HILL. If you will look at the Payne tariff bill and the Dingley tariff law you will find the protection which is on now and is given to you now in the manufacture of the cloth was put on there in the Payne tariff bill.

Mr. RHETT. Yes.

Mr. HILL. Prior to that it was counted as manufactures of asbestos, which included the yarn and cloth.

Mr. RHETT. Yes; and they had 25 per cent.

Mr. HILL. But at the instance of somebody, and on just as complete a showing of the lack of protection at 25 per cent on the finished cloth as you are making now, that committee, of which I was one, cheerfully voted for this proposition and gave a protection to you reaching 40 per cent on your particular product of woven fabric, and then you started in the business.

Mr. RHETT. No, Mr. Hill, I must correct that, for this reason: The importations of woven fabric in this country are not large, and that is not the main business. That protection of 40 per cent was not altogether what carried us forward in this business. The 25 per cent of protection that we had before was sufficient to cause us to go in and learn the business. We simply thought there was an opportunity to manufacture, and we thought so, to our cost, for two years. think we have learned enough now to make something out of it. Mr. PAYNE. What are you for at this minute, 25 per cent or 40 per cent?

Mr. RHETT. I simply think the 40 per cent tariff which exists now ought to be maintained, and that the yarn ought to be placed with the cloth, simply because it is the same thing or practically the same thing. If you think there ought to be a difference of 3 or 4 per cent I will agree there is that slight difference.

Mr. PAYNE. Still you just said you thought 25 per cent then was sufficient in 1909. I can not understand your Democratic doctrine. Mr. RHETT. I am glad the country did not agree with you.

Mr. PAYNE. I think you are getting mixed up about it a little now. Mr. HILL. You stated before that the law was satisfactory at 25 per cent ad valorem.