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Mr. LINDSAY. No; we do not want to, for there is a certain class of people who will buy the English and French automobiles and other expensive things because they are foreign, and we can not shut that out; but we want them to buy and to pay a good price for it.
Mr. BOUTELL. So they will buy the foreign wall paper of silk finish, and manufactured under the various foreign patents, no matter what the tariff is?
Mr. LINDSAY. Yes, sir.
Mr. Hill. Has there been any increase in shipments during the past twelve months ending in October?
Mr. LINDSAY. Yes; we feel the competition greater this year than before, and paper is being distributed as low as 24 cents per roll.
BRIEF SUBMITTED BY JOHN J. LINDSAY, BUFFALO, N. Y., RELA
TIVE TO WALL PAPER RATES AND CLASSIFICATION.
WASHINGTON, D. C., November 21, 1908. COMMITTEE ON WAYS AND MEANS,
Washington, D. C. GENTLEMEN: The wall-paper manufacturers, whose signatures are hereto affixed, respectfully ask your consideration of the effect produced upon the wall-paper industry by the rapidly increasing importations of wall papers, due to the low rate of duty applying to same, under the present tariff, according to Schedule M, paragraph 402, law of 1897, wherein the duty is placed at 25 per cent ad valorem, and hope that our arguments will justify you in recommending a material increase in the rate of duty, in order that the manufacturer may be afforded at least some relief from the present discouraging conditions.
It might be well to observe in the first place that the wall-paper industry has never heretofore requested any protection against importations of foreign wall papers, and that the conditions which compel it to do so at the present time are the result mainly of the enormous increased cost of manufacture, caused by the peculiar contracts with labor unions into which the manufacturer has been obliged to enter, and which provide for the continuous employment of the operatives, whether the plant is running or not.
In the face of these discouraging conditions we understand that under the reciprocity agreement with Germany a minimum rate of duty has been placed on importations of wall paper from that country of less than 25 per cent, operating directly in favor of the German manufacturer to the detriment of the American manufacturer, inasmuch as the export from the United States to Germany for the fiscal year ending June 30, 1907, amounted to only $7,564, while the importations of vall paper from that country amounted to several hundred thousand dollars.
Another unfavorable condition affecting the industry in this country is due to the fact that many of the raw materials, as far as the manufacture of wall paper is concerned, bear a higher rate of duty than the finished wall paper, of which the said raw material forms the principal item of cost, and as a glaring example of such inconsistencies we refer to the silk floss papers, the duty on the silk floss
used in the manufacture of same being 50 per cent, while the duty on the finished wall paper is only 25 per cent.
Again, there are imitation leather papers, in which the main cost is that of the varnish, on which the duty is over 100 per cent, while the duty on the finished wall paper is only 25 per cent. There are, of course, many minor items which figure as raw materials in the manufacture of wall paper on which the duty ranges from 35 per cent upward, while, as already stated, the duty on the wall paper itself is only 25 per cent.
We appreciate the fact that these so-called raw materials, as far as wall paper is concerned, are finished productions in themselves, and that it might work an injustice to other industries in this country to have the duty on such materials reduced, and because of these facts we ask for an increased duty on foreign wall papers.
To demonstrate that the facts are not exaggerated, we submit tabulated returns of the Bureau of Statistics of the Department of Commerce and Labor, Washington, showing that the imports of paper hangings for domestic consumption for the five years ending June 30, 1907, have been as follows: 1903
$287, 154. 42
291, 114.00 1905
361, 929. 88 1906.
456, 898.00 1907
671, 904. 00 The returns for the year ending June 30, 1908, are not at hand, but would no doubt show a considerable increase over 1907.
The burdens imposed on the manufacturer by labor conditions in this country make it impossible for him to compete with foreign countries in the markets of these countries, as is demonstrated by the fact that for the year ending June 30, 1907, we exported to all of the countries of Europe, including the United Kingdom, but $46,921 in value of American wall papers, while, as already shown, we imported from these countries during the same period goods to the value of $671,904, and being unable, because of labor conditions in this country, to compete successfully with the foreign business, we contend that we should at least be given the fullest opportunity of holding the American business for American manufacturers by protection in the way of increased duties.
In addition to the advantages under which the foreign manufacturer is operating, due to a much lower wage scale, is the fact that the word " foreign" has in the minds of most dealers and consumers a significance which is given a money value. In other words, the imported article, even if it is inferior in many respects, will bring a better price than the domestic article, for the simple reason that it is “imported.” Accordingly, for the same grade of papers, a price seyeral cents per roll less must be given by the American manufacturer in order to meet this competition.
Another point demands attention: Foreign competition is against the better ends of the domestic lines of wall paper, where the margin of profit should reasonably be the best. Assuming that the money value of the total domestic production of wall paper of all grades is $12,000,000, annually, which is not far from the truth, it is safe to say that not over 25 per cent is of the higher grades.
Local conditions of demand and supply have so reduced the selling price of these cheaper grades, or blanks, that the present margin of profit is reduced almost to a vanishing point. The only possible escape from a net loss in making this grade of papers is by a maximum of production. For the financial balancing of the business, therefore, dependence must be placed on the sale of the higher grades of papers, on which, as has been stated, there should be a fair margin. If foreign competition were restricted, this might be an encouraging possibility. Twenty-five per cent of the value of the annual output of the American factories above referred to is $3,000,000. This amount then represents the volume of domestic products which is in immediate competition with the, say $875,000 of imports for the past year. In other words, foreign competitors are selling in this country at the present over 25 per cent as much wall paper of the better and most desirable grades as is placed on our market by all the American manufacturers each year, and, as has been indicated, this is done at the expense of the domestic producer, who finds the reasonable margin of profit of this class of papers, which is absolutely necessary for his prosperity, to a great extent eliminated. Foreign competition, then, strikes the American manufacturer at a point where otherwise he could reasonably hope to make good in a measure for the narrower margins of profit at present realized for the cheaper grades of papers, which, in every instance, make up the bulk of the output of all the factories.
Attention is also directed toward the present regulations in respect to determining whether or not importations of wall paper are undervalued.
A committee of manufacturers offered to act in an advisory capacity to the appraiser at New York, with the view to ascertaining whether goods were entered in the custom-house at less than their actual value at the place of manufacture, but were informed by the appraiser that only importers were eligible to act as his advisers.
Now, we contend that such a regulation is inconsistent, and that wall-paper manufacturers as well should be afforded the fullest possible information in order to correct any evils which may at present exist.
That the wall-paper industry is not in a condition to bear any great strain because of excessive foreign competition is evidenced by the fact that the bankruptcy of wall-paper manufacturers is frequent. During the past eight years the following factories have been discontinued for this reason: Gossler & Wilt, Philadelphia; Wagner, Wagner & Co., Philadelphia; Philadelphia Wall Paper Mills, Philadelphia; Johnstown Wall Paper Mills, Johnstown; Corey-Heller Company, Newark; Essex Wall Paper Mills, Newark; Steubenville Wall Paper Company, Steubenville, Ohio; Western Wall Paper Mills, Superior, Wis., Conowingo Wall Paper Company, Baltimore; Hoefer, Meinken & Baeck, Nepera Park, N. Y.; Illinois Wall Paper Company, Chicago; George Halbert, Brooklyn, N. Y.; Ithaca Wall Paper Mills, Ithaca; Lakeside Wall Paper Company, Chicago, Ill. ; Middletown Wall Paper Company, Middletown, Mass.; Syracuse Paper and Pulp Company, Syracuse; while other factories, viz, Cresswell & Washburn, Philadelphia; Williamson Wall Paper Company, Long Island City; Tarrytown Wall Paper Mills, Tarrytown,
N. Y., have discontinued because of the lack of profit attending their operations; while several other factories of large caliber, such as Allen Higgins Company, Worcester, Mass., and William Campbell Wall Paper Company, Hoboken, N. J., were compelled to reorganize for the same reason. Respectfully submitted.
John J. LINDSAY.
STATEMENT OF HENRY BURN, OF No. 453 FIFTH AVENUE, NEW
YORK CITY, REPRESENTING WALL-PAPER MAKERS.
SATURDAY, November 21, 1908. Mr. BURN. Gentlemen, I want to make a plea in behalf of the wall-paper manufacturers of the United States for a reasonable protection to that industry.
The wall-paper manufacturers are in fact the most modest of men when it comes to a matter of this kind, as you will admit when I state that never before have they appealed to Congress for a higher tariff than that which was offered them without any solicitation on their part.
The very wording of the tariff is in proof of my assertion, inasmuch as it refers to certain items which have been obsolete in the business for a quarter of a century.
Our full argument is set forth in the brief that we have filed, and I shall therefore simply call attention to a few commanding features.
First. The fact that we pay wages nearly four times as large as those paid by European manufacturers, their skilled labor costing them only $6 per week, while we pay an average of $22.50 per week for the same cłass of help, and it is to be assumed that their unskilled labor is paid in the same proportion. Then, again, we guarantee employment for the entire year, while the European manufacturers employ labor only as they actually require it.
This discrepancy will probably increase, as further demands on the part of the labor unions are in prospect.
Second. While the present tariff calls for a duty of 25 per cent, the reciprocity treaty with Germany provides for reduced duty on wall paper-10 per cent, I believe-notwithstanding that the exports to Germany for the fiscal year ending June 30, 1907, were only $7,500, while the exports from Germany to this country were in excess of $300,000.
In other words, we can not see where the reciprocity comes in there.
The CHAIRMAN. I think it is safe to say that this committee will probably do away with the necessity for that treaty with Germany. Mr. BURN. If so, a part of our appeal will be heeded. The CHAIRMAN. By a maximum and a minimum tariff. Mr. Burn. I think that is a good idea.
Third. The entire exports from European manufacturers to this country for the year ending June 30, 1907, were $671,904, while our exports to those countries were only $46,921; thus demonstrating that we can not compete with them in their own markets notwithstanding the strenuous efforts we have made to do so. The exports from European countries have increased from $287,000, in 1903, to $671,000, in 1907, over 125 per cent.
While the proportion of the imports, which probably amounted to $850,000 in 1908, may not seem large at first glance as compared to the total business of our manufacturers, $12,000,000, it must be remembered that at least 75 per cent of our product is sold at actual or less than cost, and that the competition from the European manufacturers is therefore directed against the remaining $3,000,000, to which we look for a reasonable margin, and that consequently our importation of $850,000 against a production of $3,000,000 materially affects the result, and as the importations are so rapidly increasing the situation will become worse instead of better unless we obtain some relief.
Fourth. On raw materials entering into the manufacture of wall paper the duty is in some cases 50 per cent, while the wall paper of which said raw materials form the main cost is brought in at à duty of 25 per cent.
When I speak of raw materials, I speak of materials which are probably finished products in themselves, but which are raw materials when it comes to the matter of manufacturing wall paper.
Fifth. Manufacturing wall paper requires a capital of $1 for every dollars' worth of goods manufactured. Thus, on a capital of $12,000,000 we produce an output of $12,000,000, making the risk a large one for the returns obtained.
Sixth. Protection against undervaluation. At the present time the manufacturer has no means of knowing whether the goods are coming in with proper valuation or not. Efforts have been made with the appraiser at New York to get in touch with the situation, but the manufacturers were informed that only importers were eligible as advisers to him. Now, it stands to reason that the importer has his own interest to consider in appraising the imports for the duty, but it would seem to me that something ought to be done whereby the manufacturer should have an opportunity of demonstrating whether those goods come in at a proper valuation or not.
Seventh. It is to be assumed that changes about to be made in the tariff will remain in force for many years, and that therefore, unless we receive additional protection now, the industry is liable to be seriously affected and the capital employed will be imperiled.
Under these circumstances we ask for your careful consideration of our plea, and hope that you can consistently advance the duty on wall paper to 35 per cent or 40 per cent ad valorem.
That is all I have to say on that subject.
The CHAIRMAN. Right there, you made a statement that you complained to the appraiser and that the appraiser advised you that importers were the only people they consulted in regard to valuation.
Mr. BURN. Yes, sir.
The CHAIRMAN. What appraiser told you that? Give the name to this committee.
Mr. BURN. Mr. Wanmaker.
Mr. CLARK. Why do you not ask for a tariff of 60, 70, or 100 per cent?