estimated by the United States Tariff Commission) but these are not mentioned in their statement, and as a result it is not known whether such pocket watches are produced only by the 3 manufacturers who produce the pin-lever wristwatches, or whether some of the other clock manufacturers also produce pin-lever pocket watches. In any event, such pocket watches represent a major portion of the domestic production of pin-lever watches and certainly must be considered in connection with the question of whether watch imports are tending to injure the clock manufacturers, especially as the latter have a virtual monopoly of the domestic market for this type of pocket watch. In its report to the President on watches, June 1951, the United States Tariff Commission said (p. 86): * domesic pin-lever pocket watches receive virtually no competition from imported pin-lever pocket watches; and consumption of domestic pin-lever pocket watches accounts for a large share of total domestic consumption of all watches. In view of this, it is not difficult to understand why these pocket watches are not mentioned in the statement of the clock manufac turers, and why they have not been included in any of the tables therein giving statistics on which their claims of injury are based. Practically all domestically produced pin-lever watches are clocktype watches, viz, the construction is similar to that found in cheap spring-driven desk and alarm clocks. Hence, as the clock manufac turers also produce annually approximately 15 million of the latter types of clocks (which clocks, like the pocket watches, have not been referred to in any of the tables and which clocks, like the pocket watches, have not in the past received, and presently are not receiving, virtually any competition from imported clocks), it is obvious that the fact that the clock manufacturers are receiving more competition from imported pin-lever wristwatches cannot possibly reduce their industry to the extent that they have indicated in their statement, or to any extent that reasonably could be considered serious injury or a threat thereof. In this connection, there must also be considered the clock manufacturers' production of electric clocks and "myriad timing devices for industrial, scientific and household uses" (statement, p. 2). Such timing devices utilize clock-type mechanisms which are made by the same kind of machines and workers that make the various clocks and pin-lever watches. As to clocks, including both the spring-powered and electric-powered, Mr. Lux of Lux Clock Mfg. Co., one of the clock manufacturers testified before the Tariff Commission, in investigation No. 7 covering watches, that the domestic production of clocks is in excess of 30 million units per annum (record, p. 519). In the light of this annual domestic production of 30 million clocks and 5 million pocket watches, which receive virtually no competition from imports, the claim that the clock manufacturers "cannot stand up against floods of imports from foreign clock and watch industries unless tariff relief is obtained, not only is without merit but constitutes gross exaggeration. With respect to watches, the table (statement, p. 15) shows the inports of all watches, both jeweled and nonjeweled. As the clock manufacturers do not manufacture any jeweled watches, which they admit are manufactured by other segments of the horological industry, the increase in the imports of jeweled lever watches does not concern them as most of such watches are not competitive with their pin-lever products. Furthermore, the apparent consumer demand for jeweled lever watches is about five times larger than it was in 1935. At that time (excluding 0-1 jewel watches) the said demand (based on available statistics of domestic manufacturers' sales and imports) was estimated at 2,384,000 units. In 1950, it was estimated at 10,700,000 units. The jeweled lever domestic manufacturers' sales in 1935 were estimated at 1,246,000 units and in 1950, 2,625,000 units. As their sales represent on the average a figure about 10 percent less than their total production, it is clear that the increase in imports of jeweled lever watches was necessary to supply the demand which the domestic jeweled lever watch manufacturers were unable to supply. It is true that there also has been an increase in the number of imported pin-lever wrist watches. From 1931 to 1936, after the enactment of the 1930 Tariff Act, there was a drastic drop in world trade and only a small quantity of pin-lever watches were imported during those years. The Trade Agreements Act was passed in 1934 in an effort to revive imports, and the trade agreement with Switzerland was proclaimed effective in February 1936. Thereafter, imports of pin-lever watches gradually increased and reached a total of 2,469,861 in 1952. This increase, however, was not entirely the result of concessions granted in the 1936 trade agreement on watches because pin-lever movements in the 0-1 jewel category, measuring 1.5 inches to 1.77 inches in width, did not receive any concession whatever, the rate of 75 cents each being the same as in the Smoot-Hawley Tariff Act of 1930. The following table shows the total imports of 0-1 jewel movements and the total number of such movements 1.5 to 1.77 inches wide which did not receive any concession in rate in the 1936 trade agreement: It thus appears that of the total 0-1 jewel pin-lever imports in the past 5 years, over one-third did not receive any duty concession and the increase in the imports thereof conclusively was the result of factors other than the tariff. With respect to the increase in the other two-thirds of the 0-1 jewel-movement imports, while this has caused increased competition between the clock manufacturers and the importers, it is inconceivable that it could result in serious injury or threat thereof to the clock manufacturers under existing conditions. The above table shows that a total of 2,469,861 pin-lever movements were imported in 1952, and the table (statement, p. 18) shows that there were sales of domestic pin-lever wrist watches in 1952 totaling 2,908,759 units. It is well known in the trade that a considerable quantity of the imported 0-1 jewel movements 1.5 to 1.77 inches wide are cased as clocks, but assuming, for the sake of argument, that the entire imported quantity represented wristwatches, the clock manufacturers would have supplied about 57 percent and the imports 43 percent of the domestic market in 1952 for pin-lever wristwatches. However, the clock manufacturers also supply the entire domestic market for pin-lever pocket watches (about 5 million annually) in which they enjoy an uncontested monopoly, and also supply practically the entire domestic market for clocks (about 30 million units annually) in which they have what amounts to a monopoly, the clock imports being negligible, due to the tariff thereon, which will be shown later herein. It is quite evident, in view of this situation, that the dire predictions of the clock manufacturers, concerning their future if something is not done to give them tariff relief, have no sound basis in fact. I have never seen a case where practically all of the clocks produced and used in America are made in America and where there is practically no competition and to have $30 million all told a year and where the clock manufacturers say they have to have some tariff in order to survive. The table (statement, p. 17) contrasting the percentage increases to 1951 of imports of manufactured goods over the 1931-35 average thereof, with the percentage increases for 1951 of imports of watches over the 1931-35 average thereof, is without significance and meaningless in the absence of any claim or proof that the domestic market for manufactured goods in terms of units has enjoyed the tremendous increase that has occurred in the domestic demand for watches. If the domestic demand for manufactured goods other than watches had expanded to the same extent as the demand for watches, the percent of increase in the imports of such other manufactured goods might well have equaled or exceeded the percentage increases shown for watches. On page 18 of their statement, a table is presented which purports to show what happened in the domestic watch market in the period 193552, by comparing the total watch imports (both jeweled-lever and pinlever) per 1,000 of United States population with the number of domestic pin-lever wristwatches sold per 1,000. It should be noted that while this table describes the pin-lever sales as "Total domestic pinlever watch sales," the figures represent only the pin-lever wristwatch sales and do not include the annual sales of pin-lever pocket watches which average about 5 million units. Hence, this table does not show what happened in the domestic watch market generally but only with respect to imports of all watches as compared with sales of domestic pin-lever wristwatches. Of course, when presented in this manner, the figures show a substantial increase in the watch imports per 1,000 population, as compared with the sales of domestic pin-lever wrist watches. While this looks impressive and is quite useful in support of a claim of injury from imports, it is of no practical significance and could be misunderstood as representing the total sales participation of the clock manufacturers in the domestic watch market. As the clock manufacturers are complaining about both watch and clock imports, it is interesting to compare the total watch and clock imports per 1,000 population with the total domestic clock and pinlever watch sales per 1,000 population for the past 3 years when the imports were largest. In preparing the following table, the figures in said table on page 18 of their statement were used, to which were added (1) clock imports, which were obtained from the table on page 21 of the statement; (2) pin-lever pocket watch sales obtained from United States Tariff Commission statistics (the 1952 sales were not available but were estimated at 5 million units); and (3) clock sales of 30 million annually as testified by Mr. Lux before the Tariff Commission (which figure is corroborated by the 1947 Census of Manufacturers, Department of Commerce). The sales of jeweled lever watches manufactured in the United States have not been included because the clock manufacturers do not manufacture such watches. Watch and clock imports per 1,000 United States population compared with domestic clock and pin-lever watch sales per 1,000 population, 1950–52, inclusive It will be seen from the foregoing table that the clock manufacturers unquestionably supply the lion's share of the domestic market for watches and clocks. The increased competition that they have experienced in the smallest segment of their business, namely, the sales of pin-lever wrist watches, could not possibly result in serious injury to them or even a threat thereof, in view of their enormous production of pocket watches and clocks and their virtual freedom from competition from imports in those items. With respect to clocks dutiable under paragraph 368 of the present tariff act, the clock manufacturers look with alarm at the imports thereof into this country since October 1, 1951, the date when the 50 percent tariff reductions negotiated at Torquay became effective, and while admitting that the volume of such imports in 1952 was not sufficient to support a complaint of injury by their industry, nevertheless state that the sudden increase in "imports of clocks following the reduction in duties is both highly significant and ominous." They complain, in effect, that the 50-percent reduction in the duties on clocks should not have been made and state that the rate of duties on clocks prior to the said reduction "afforded reasonably sufficient protection to the domestic clock industry because it was, and it still is, sharply competitive at a low retail price level." In answer to the foregoing, let us examine the facts. The rates of duty provided in paragraph 368 of the 1930 Tariff Act for clocks were so high that far from affording "reasonably sufficient protection" to the clock manufacturers, those rates constituted a virtual embargo on the importation of clocks. This is conclusively established by the total number of clocks imported annually. The table (statement, p. 21) shows such imports to have been 10,517 units in 1948; 32,572 units in 1949; and 135,260 units in 1950. Compared with the domestic-clock sales of 30 million per annum, the imports represented about 0.00035 percent in 1948, 0.00108 percent in 1949 and 0.00450 percent in 1950. As previously indicated herein, this constituted virtual monoply of the domestic clock market by the clock manufacturers. With the exception of certain level movements of plate- and bridgetype construction, 1.77 to 2 inches wide, having more than 4 jewels, and clocks containing such movements (which are not manufactured by the clock manufacturers), the rates of duty on clocks dutiable under paragraph 368 were not reduced in any trade agreement negotiated prior to October 1, 1951, when the 50-percent reduction in those rates agreed to at Torquay were proclaimed effective. Thus, from June 1930 until October 1951, the clock manufacturers did not have merely a reasonably protective tariff on clocks under which imports could compete with the domestic products on any semblance of equality, but they enjoyed a tariff protection that precluded competition from clock imports. There can be little question that it was because of this situation that the trade-agreement negotiators finally decided in 1951 to reduce the prohibitive tariff rates on clocks to the fullest extent permitted under the law, in an effort to encourage some clock imports. While it is still too soon to predict with any certainty what effect the reduction in duty will have on clock imports, the number imported in 1952, the first full year following the duty reduction, is still negligible, the total being 280,764 units, which represent less than 1 percent of domestic sales. Whether the tariff rates on clocks, as reduced at Torquay, will enable imports to compete with the domestic products is difficult to determine because the reduced rates still provide a high measure of protection to the clock manufacturers. In a report entitled "International Trade Policy Issues" published in February 1953 by the foreign commerce department of the Chamber of Commerce of the United States, the ad valorem equivalent in effect on May 1, 1952, on clocks, is shown as follows (pp. 64–65) : Valued $5 to $10 each__ Valued $5 to $10 each___ Valued more than $10 each__. Percent 105.5 84.0 102.8 105.5 84.0 These ad valorem equivalents were obtained by dividing the reported value of the import items for 1950 in the duty collected. Corrections were made to take account of duties which had been negotiated at Torquay. It is thus evident that the reduced duties on clocks still constitute a formidable barrier and that it remains to be seen whether imports can successfully compete with the domestic clocks on the new duty basis. It is not difficult to understand the efforts of the clock manufacturers to endeavor to have the embargo duties on clocks reinstated, but it should be observed that of the thousands of items listed in the dutiable schedules of the tariff act, only a handful enjoy the measure of tariff protection that is afforded the clock manufacturers by the present duties on clocks. |