PARAGRAPH 462-ASBESTOS. Mr. RHETT. You must get this straight. If you put that rate of tariff at 40 per cent to-day, you will increase the revenue to the country, because I do not believe it will stop importations one way or the other. I think from a revenue standpoint this Government will benefit by making the whole tariff 40 per cent. Mr. PAYNE. You forget that we get revenue from the prosperity of the country, and the prosperity of business when the people have money to spend, and the greatest income of the Government has always been under a protective tariff, under which the people could do work and manufacture goods and pay wages, and the people had something to buy with and import. Mr. RHETT. I am sorry I do not agree with your protective views. Mr. HARRISON. Mr. Rhett, I think the committee understands your position, and as we have about 100 more witnesses on the calendar, I hope you will not proceed further. Mr. RHETT. Thank you, Mr. Chairman; I will suspend. Hon. WYATT AIKEN, GENERAL ASBESTOS & RUBBER CO., House of Representatives, Washington, D. C. DEAR SIR: We are taking the liberty of requesting you to kindly look carefully over the brief filed by the manufacturers of asbestos textiles; said brief was filed with the Ways and Means Committee and comes under heading of Schedule N. The hearing of said schedule was on January 29. We trust that after reading the brief, as well as the statements made by parties interested, that you will see the reasonableness of our claim. You will find this data under paragraph 462. We are the only Southern manufacturers of this article, there being only about eight in the United States, but we are now having active competition from abroad and in several instances of recent date our prices have been underbid by foreign manufacturers. We need the 40 per cent ad valorem on asbestos yarns, as well as on the woven materials. Woven materials it is, of course, understood include everything in the textile line of this particular business, but yarns; and yarns being the first principle in textile manufacture, you can readily see the position we are in. We inclose a list of the names of the manufacturers, their location, money invested, and number of employees, who are engaged in this business. We trust that you will get in touch with the members of the Ways and Means Committee in advance of their making up their recommendations for the next Congress. Thanking you in advance for your cooperation in behalf of these manufacturers, as well as ourselves, we are, GENERAL ASBESTOS & RUBber Co., C. B. JENKINS, President. Very truly, yours, PARAGRAPH 462-ASBESTOS. TESTIMONY OF C. HUBER, OF THE ASBESTOS FIBRE & SPINNING CO., NORTH WALES, PA. The witness was duly sworn by the chairman. The CHAIRMAN. Gentlemen, we have two more asbestos men following Mr. Huber, and if we do not progress faster than we have been this morning we will not get through with this list of witnesses at all. I hope the members of the committee will assist in confining the witnesses to 10 minutes each. You may proceed, Mr. Huber. Mr. HUBER. I simply came to ask this committee to place the duty on yarn the same as it is now on woven fabrics, for the simple reason that the cost of labor in this country is so much greater than the cost of labor abroad, and we can not compete unless we have the duty; we can not manufacture the goods and sell them in this country against the foreign manufacturer. The cost of labor in producing a yarn out of asbestos is very different from any other manufacture of textile goods. It has to be worked very much slower, and consequently consumes very much more labor, and labor is the principal portion of the expense in the manufacturing of the yarn, as well as the woven fabric. Therefore, we would ask you to place the duty on both, and not have it 25 per cent on one and 40 per cent on the other. Mr. HULL. A representative of your industry did not appear before the Ways and Means Committee when the bill was drafted? Mr. HUBER. Yes, sir. Mr. HULL. Did they ask for an increase of the rate on both the yarn and the cloth at that time? Mr. HUBER. The increase was asked for; yes, sir. The same increase was asked for. Why it was not put on the same way I can not understand and can not tell you. We asked for an increase on the asbestos textile goods. In the importation of this raw material I would wish to inform you that there are not 100 tons of asbestos produced in this country that can be used to manufacture textile goods. All the asbestos that has been found in this country is either used in paints, as powder, or in pipe covering, or in paper. I have never found but one mine that produced goods that were used or that we could use in spinning. I have seen them all. I have examined goods out of pretty nearly every mine in the country. The best I have found is out in Wyoming, but it was not worth one cent for spinning purposes. Thank you, Mr. Chairman. To the chairman and members of the Ways and Means Committee. GENTLEMEN: Section 462 of the present tariff act of 1909 is as follows: "Manufactures of amber, asbestos, bladders, catgut, or whip gut or worm gut, or wax, or of which these substances or any of them is the component material of chief value, not specially provided for in this section, twenty-five per centum ad valorem; woven fabrics composed wholly or in chief value of asbestos, forty per centum ad valorem." The manufacture of asbestos is an industry which was begun in this country about 20 years ago. Prices then were considerably higher than they have ever been since, this reduction being brought about and maintained by active competition amongst domestic manufacturers and with foreign importers. The product is divided into two classes: Yarns and cloth. PARAGRAPH 462-ASBESTOS. All raw material comes from Canada and costs from 74 cents to 15 cents per pound. There is a shrinkage and waste which makes the cost of the net pound in the yarn from 9 to 18 cents. Raw asbestos is brought in as a solid mass. It is broken up and then handled very much like cotton. The fiber is so frail, however, that the expense of producing the yarn is many times greater than with cotton. It takes a man to every loom. The speed at which the machinery is run must be reduced very low and even then the breakage is frequent. The result is that the labor cost is very high, varying from 10 cents per pound upward to several times that amount. The cost of medium grade of yarn would be about as follows: A higher grade of yarn would show a larger proportion of labor costs. To manufacture the cloth there is only an addition of about 3 cents in labor and 1 cent in overhead charges, so that the cost of the "woven fabric" may be represented as follows: The cost of labor in this country is about $15 per week for men, $8.50 per week for boys, and $7 per week for girls. The cost of the same labor abroad varies from 40 per cent to 60 per cent of these amounts. It will be recalled that under the present act the tariff on yarn is 25 per cent and on woven fabrics" or cloth it is 40 per cent. 66 It may be well to compare the costs of both of these products here and abroad. It would seem, then, that at the present rates the foreigner has the advantage on both products. Let us see whether the growth of the sales from the two sources would confirm this. The importations of raw asbestos and of the manufactured products, respectively, are given by the Department of Commerce and Labor, since 1907, as follows: The increase of the former is about 35 per cent, of the latter 125 per cent. But a canvass of the cost of the manufactured products of asbestos in 1907 shows that it PARAGRAPH 462-ASBESTOS. amounted to about $750,000, while in 1912 it amounted to about $1,500,000. This would make the apparent increase 100 per cent, which is still considerably less than the percentage of importations. It will also be noted that the increase in the importations were greater after the increase in the tariff of 1909 than it was before. If we add to the importations of yarn in 1912, i. e., $241,064, a tariff of 25 per cent, and to the importations of cloth, i. e., $96,488, a tariff of 40 per cent, the value of the imported products at its cost here (which we have seen is, with the tariff, still less than ours), it would be $136,413, against $1,500,000 for our total product-or nearly onethird as much. This is a very fair proportion. It would seem that the term "woven fabrics" was intended to cover both yarn and cloth, or else the elements in the manufacture of the two were not clearly understood. Yarn is the foundation. Into it the element of labor enters very largely. The additional labor employed in its conversion into cloth is very slight. The tariff should be the same and should be 40 per cent on both yarn and cloth. This would come very nearly equaling the cost. It would certainly leave no advantage with us except in the very lowest grades. The product of an asbestos factory is used for automobile and other brake linings; in steam packing; in theater curtains, and in electric insulations. None of these can be termed the necessaries of life. The industry after 20 years can only boast of 9 factories, none of which are of any great size. Not one of these has ever been able to ship a pound out of this country. There is no trust involved here. Open competition exists amongst each other and with the importers. The business of the latter has grown more rapidly under the present tariff than under the former tariff and now constitutes nearly one-fourth of the total consumption. Viewed solely from a revenue standpoint, a rate of 40 per cent on yarns and cloth would give an increased revenue to the Government. It is more than doubtful whether a reduction in the rate would be followed by any increase in the importations, as this is the only dumping ground for the foreign surplus product. We have no surplus product and are struggling to make ends meet under present conditions. If the committee takes into consideration the actual cost of labor here and abroad, it would require a 40 per cent tariff on both yarn and cloth to give us an equal chance and a fair competition, and we ask that paragraph 462 be amended so that the last sentence thereof shall read as follows: "Yarns and woven fabrics, composed wholly or in chief value of asbestos, 40 per cent ad valorem." Respectfully submitted. C. B. JENKINS, President General Asbestos & Rubber Co. A. R. ZIMMERMAN, President United States Asbestos Co. CHRISTOPHER HUBER, President Asbestos Fiber Spinning Co. TESTIMONY OF G. L. HILL, OF THE UNITED STATES ASBESTOS CO. The witness was duly sworn by the chairman. Mr. G. L. HILL. Mr. Chairman and gentlemen, I have very little to add to what Dr. Huber has said. In the first place, being from Pennsylvania, I naturally am for protection Mr. PALMER (interposing). That does not follow. Mr. G. L. HILL. You asked a question a few moments ago, Mr. Palmer, and said you could not see any reason why foreigners could not come here and clean us up if the conditions were such as set forth by Mr. Rhett. They could; if they had the sales organizations and knew the country as we know it, they could clean us up. Mr. PALMER. That condition is not going to change, is it? It is a fact that there is no spinning asbestos found in this country. There are no spinning fibers found here at all. Every bit of that PARAGRAPH 462-ASBESTOS. comes from Canada, and these exportations referred to are largely exportations of fiber which were bought in New York and shipped abroad from New York, and that constitutes the whole of it, with the exception of pipe coverings and a few specialties which do not enter into the spinning and weaving proposition at all. Mr. PALMER. Who owns these asbestos mines in Canada? Mr. G. L. HILL. These asbestos mines in Canada are owned principally by Canadians. Mr. PALMER. Are they not largely owned by American manufacturers? Mr. G. L. HILL. No, sir. Mr. PALMER. There are American manufacturers interested in them? Mr. G. L. HILL. There is one mine in Canada, I believe, which is owned entirely by an American manufacturer, but the other mines are owned principally by Canadian capital and by English capital. It is a fact that if there was any duty on raw asbestos, we simply would have to shut down. It is a fact that if the duties are lowered, we will have to shut down. We have struggled along for 10 years and none of us have made any money, and largely due to the fact we have had a foreign competition, and we have been obliged to meet foreign prices with our product, and that is one reason why the foreign sales have not grown any more. Mr. PALMER. The difficulty with your foreign competition is simply in the matter of labor. So far as the raw material is concerned you have an advantage over the foreigner. Mr. G. L. HILL. I do not think so. Mr. PALMER. Your raw material is nearer to you than the Germans. Mr. G. L. HILL. Yes; but there is something in the freight rate to be considered. While it costs us just as much for the material itself, the freight from Canada into Pennsylvania costs just as much as the freight on the asbestos that is taken to Germany. It is just as cheap there as here, so far as freight rates are concerned. Of course they have an advantage in labor. Their labor over there will average 25 to 35 cents a day, while our average labor here is $2.50 and up. And it is not only the labor of spinning the asbestos and weaving it. It is the labor that goes into the whole thing, which Mr. Rhett referred to as indirect. It costs them less to build their buildings; it costs them less for their machines; their machines over there can be built for half the price of ours. Their whole investment is considerably less than ours. Mr. HULL. Where do you get your machines? Mr. G. L. HILL. We get our machines here in this country. There is only one cencern in this country that makes them. We pay anywhere from $3,000 to $5,000 for our machines, whereas the same machine used abroad can be bought for about $1,200 or $1,300. Mr. HULL. What is the tariff on those machines? Mr. G. L. HILL. I do not know, sir. I know the machinery, by the time it is landed here Mr. HULL (interposing). What is the name of the concern from whom you purchase? Mr. G. L. HILL. Smith Berwin Machine Co., Philadelphia. |