He should have figured his profits equal, giving each a fair showing, and if he is going to figure freight, figure the quantity of kraft paper that goes to the interior, and add to this 20 cents per hundredweight for freight, as he has done on the domestic paper, which is only right, it would bring the kraft paper up and make it all the more prohibitory at its present price and rate of duty; and if you compare qualities you have to compare the best quality and 100 per cent of the best quality of the pulp made here against the same percentage of the best quality of pulp made abroad. The foreign pulp can be brought in here and manufactured, including $2.25 per hundredweight for the pulp, 22 cents per hundredweight for shrinkage, and 80 cents per hundredweight for making, and 15 cents per hundredweight for freight; total $3.42, showing that the pulp can be brought here and· kraft paper manufactured in this country cheaper than the paper itself can be imported, and we further feel confident that the pulp can be made in this country just as cheap as it can be made in any other country, for we have the wood, and the manufacturing of pulp is a chemical process taking very little labor in comparison with the machine work, and the machine end of it and the chemical end of it costs practically the same in one country as in another.

Your committee has already heard facts conce ning parchmyn or pergamyn and grease-proof papers from a manufacturer of these papers in this country, showing that under an unsatisfactory condition of business during the so-called panic of 1907 and a tariff on the foreign article of 25 per cent, this manufacturer was blessed inasmuch as he stated he had made a profit of approximately $10,000, or 3 per cent, on his capital invested. This mill started to make these papers on a small scale of an inferior quality, and has advantages now, in that he has proved he can make a profit and make prompt delivery, and has a further advantage of freight rates for interior business.

Now, if he can make a profit on the lines he is working along, why can he not increase this profit each year by making a better article as he increases his product and thereby minimize his expense? At the classification he asks, which means a higher rate of duty, he might just as well have a patented article, and the consumers who are obliged to use this class of paper would have to pay an enormous profit for the imported article, while he is getting in a position two or three years hence to take care of the business, as such an increase would in all likelihood cut the import down to about onehalf at once. It is used now largely for wrappers for patented medicines, canned goods, and articles of this sort, simply to preserve the label and to keep them from dust and dirt, and being transparent the label can be read through the parchmyn paper. This is quite an expense which the manufacturer of these articles did not have to incur, but as the paper was reasonable and within reach in price they have adopted it for this purpose, thereby giving the consumer cleaner and better packed goods. Excessive duty would not improve the standard of the American goods in this case, but would be a great drawback.

All of which is respectfully submitted.
Very truly, yours,

A. J. CORNING, Jr.,

Assistant Treasurer. HUBBS & CORNING CO.

THE ROBERT GAIR CO., BROOKLYN, N. Y., WISHES THE DUTIES ON GLASSINE AND SIMILAR PAPERS REDUCED.

Hon. SERENO E. PAYNE,

BROOKLYN, N. Y., January 6, 1909.

Chairman Committee of Ways and Means,

House of Representatives, Washington, D. C.

DEAR SIR: In connection with the proposed revision of existing tariff schedules now in the hands of your committee, we desire to make mention of several items which are manifestly favorable to our European competitors.

Herewith are samples of paper, and envelopes made of the same, variously described as japanin, parchmyn, glassine, etc. This material possesses qualities which are bringing it into very great demand.

The paper in the form of raw material is admitted under paragraph 402 at the rate of 25 per cent ad valorem. The finished article-that is, envelopes made of this paper-is admitted under paragraph 399 at the rate of 20 per cent ad valorem.

A large percentage of the cost of these goods is represented by the material used, and in making the envelopes the waste in cutting the various shapes required is about 12 per cent, and often greater, with a further waste incident to manufacture. The burden imposed on the American manufacturer is thus increased to the further advantage of his European competitors.

Since the business has grown to large proportions the European manufacturers have been able to control the best of it for the reasons set forth above. We suggest that, as existing tariffs discriminate against the American manufacturer in favor of his foreign competitors, the schedule on raw material be reduced to 10 per cent, and the rate on goods made of this paper be increased to 35 per cent. This will not more than equalize the advantage the foreign manufacturer has in having the raw material made at his doors, and a lower cost of production.

A reduction in the price of the raw material will not operate against any manufacturer in this country, as very little of the paper is produced here, principally for the reason that there has been no incentive to American paper makers to take it up because of the fact that the goods made of this paper are brought here and sold at prices we can

not meet.

We respectfully request your earnest consideration of this matter, and are sure that your investigations will sustain the justice of our claims.

Respectfully,

ROBERT GAIR COMPANY,
GEO. W. GAIR, Vice-President.

JACQUARD DESIGNS AND CARDS.

[Paragraph 402.]

STATEMENT OF ROBERT P. BAGGALEY, OF PATERSON, N. J., RELATIVE TO SMUGGLING OF JACQUARD DESIGNS.

SATURDAY, November 21, 1908.

Mr. BAGGALEY. I am here, if the gentlemen please, to discuss the matter of Jacquard designs.

We are asking for an increase in the tariff on these designs.

Mr. FORDNEY. Are these not put on in that name in the free list? Mr. BAGGALEY. No, sir.

The CHAIRMAN. Under what section of the schedule is this found? Mr. BAGGALEY. It is under section 402. These designs are the skilled part of the silk industry. We are greatly suffering from importation of these designs from Germany. They import designs here at 3 marks per hundred cards, which is equal to about 75 cents. The lowest price at which we can work and earn a decent wage is $2.50 per hundred, working at our best and fastest. The tariff applied on these designs now is 35 per cent ad valorem. If the 35 per cent was applied it would bring it up to $1.01 per hundred cards. This duty is not always paid, because they can send it through the mails in a very small space, very valuable designs which we have here to show you, occupying a very small space comparatively. They can send designs valued up to $500 through the mails and pay no duty on them. The duty has never been known to be paid for some years by five or six manufacturers. It is easily evaded. They send these designs through in envelopes. They can pack five or six in an envelope. Here is one design which would cost about $25 upon the basis of the American workman's wages.

Mr. BONYNGE. Do you know how much was imported last year? Mr. BAGGALEY. At a rough estimate, which we tried to get, there was about $50,000 worth.

Mr. BONYNGE. The statistics we have show the total value of the importations to have been $1,905.50, and the duties paid were $666.94. Mr. BAGGALEY. Yes, sir; that is paid through the custom-house in New York by one concern, I believe.

Mr. BONYNGE. You say the rest is smuggled in?

Mr. BAGGALEY. Yes, sir; it is smuggled in, and very easily, too. I may say that we went down to the custom-house about four or five years ago and furnished them with information where it was coming from. They were sending it through the mails.

Mr. DALZELL. Smuggling through the mails?

Mr. BAGGALEY. Yes, sir.

Mr. DALZELL. I do not see how the tariff will affect that.

Mr. BAGGALEY. They state on the other side it is a design of no value.

Mr. BONYNGE. How would raising the duty prevent the smuggling of goods in that way? Will not that have a tendency to increase the smuggling? If there is a higher duty, will there not be a greater inducement to smuggle the goods than if we were to lower the duty! Mr. BAGGALEY. I am asking for a higher duty on it.

Mr. BONYNGE. I know, but putting a higher duty on it would increase the smuggling, would it not?

Mr. BAGGALEY. I do not think it would.

Mr. BONYNGE. There would be more inducement to smuggle the goods, would there not?

Mr. BAGGALEY. Yes, sir; for the few manufacturers that smuggle them in at the present time, there are only about seven manufacturers that smuggle them in that way, and there are only about sixty designers working in the silk industry at the present time.

Mr. BONYNGE. How long has this been manufactured?

Mr. BAGGALEY. This is not manufactured. It is art. It is a product of the brain.

Mr. BONYNGE. How long have you been in the business?

Mr. BAGGALEY. In America I have been eleven years; in business for myself five years. I have been working at this since I was 15 years old. It is a business that takes seven years to get a practical knowledge of. You never learn the business, practically, because there is something always coming in under the construction of. machines that you have to restudy again.

They also send perforated cards, done from designs on the other side, in order to evade the duty on it, and they repeat it over here on special machines. They could not send the cards originally made, because they are so heavy, and they send them in a small roll like this [indicating]. They evade the duty on designs like this, which are called "designing cards." We are now trying to stop that practice. We are only a very small number of men, and we have been trying our very best to stop this practice. We went to the custom house and told them who were sending these over from Germany. The only way I can see is to make them declare what the packages are, from the places where they originate, and then you can see what they The post-office in New York or Philadelphia can stop this practice. Make them declare what is in the package.

are.

Mr. GRIGGS. Who will do the declaring?

Mr. BAGGALEY. The one that sends the package to this country. Mr. CLARK. A man has a right to send what he pleases through a letter that pays the highest rate of postage.

it.

Mr. BAGGALEY. The legal rate of postage?

Mr. CLARK. Yes, sir. I want to know how you are going to stop

Mr. GRIGGS. You say that comes in as first-class mail matter?

Mr. BAGGALEY. Yes, sir; it comes in as first-class matter.

Mr. GRIGGS. Did you ever stop to consider how much it would cost to send that as first-class matter?

Mr. BAGGALEY. No, sir; we have not.

Mr. GRIGGS. It would cost 32 cents a pound.

Mr. BAGGALEY. That would not make much difference on a pattern that will cost $20 to $25 to execute in this country. A pound does not amount to much in a proposition of that sort. I know I sent patterns here before I came to this country, under the McKinley Act, and I had to declare what was inside of the packages. I had to make a declaration at the post-office where I posted them in England. I sent them here to a manufacturer and he paid the duty on those sketches. Those were small sketches, which were in the form which I now show you. That is the first part of the silk industry. Next

comes the design, and next the cards, and its manufacture in the looms. You have to make a declaration, because I have had to make it known to the postal authorities in England the contents of the package I was sending and whether it is dutiable.

Mr. GRIGGS. In a letter?

Mr. BAGGALEY. Yes, sir; to the postmaster where it is sent from. Mr. DALZELL. Are you after a change in the tariff?

Mr. BAGGALEY. We are after a change in the tariff, sir, to bring it up equal to what we work for at the lowest price, and also to stop this importation without paying the duty on the design.

Mr. DALZELL. This committee has no jurisdiction over that.

Mr. BAGGALEY. Where is the jurisdiction? Where do we have to go to stop this thing?

Mr. DALZELL. It is the business of the Post-Office Department to correct that sort of thing.

Mr. CLARK. You should apply to the Postmaster-General.

Mr. FORDNEY. This is a violation of the law. The question is to catch them.

Mr. BAGGALEY. That is it. We will give all the information we have to the proper parties.

Mr. FORDNEY. You should give it to the Post-Office Department. Mr. BONYNGE. As I understand it, you also want a change in the rate of duty?

Mr. BAGGALEY. Yes, sir; we want a change in the duty.

Mr. BONYNGE. What change do you want?

Mr. BAGGALEY. I would be in favor of 100 per cent, to bring it anywhere near what it should be.

Mr. BONYNGE. It is now 35 per cent, and you want 100 per cent ad valorem?

Mr. BAGGALEY. Yes, sir.

Mr. BONYNGE. Have you any figures to show the cost abroad and the cost at home that would warrant such an increase?

Mr. BAGGALEY. Yes, sir. The cost for a design to be made here by practical men is at the rate of $25, while the cost on the other side is very little, because they employ young boys and apprentices. We can not do that here, because the boys will not go into the trade. There is not a sufficient amount of it. That is the reason they can sell them at a very small price, such as 75 cents per hundred. Mr. GRIGGS. Per hundred what?

Mr. BAGGALEY. Per hundred cards designing.

Mr. GRIGGS. What does it cost to make a hundred cards here? Mr. BAGGALEY. A very simple design would cost around $1.75 for the workman's wages, but we charge it at $2.50 [supplying the sketch paper and material for it.]

Mr. CLARK. If the smuggling could be stopped, would that suit you?

Mr. BAGGALEY. That would suit us, if they paid the increased duty which we ask for.

Mr. CLARK. If you stop the smuggling and let the duty stay as it is, would that be satisfactory?

Mr. BAGGALEY. No; not altogether. They undersell us at least three times. What they can sell here for a dollar we have to charge $2.50 for as a minimum price.