Mr. WELLS. That is true. But that is earthenware, paragraph 211. Cheap china in paragraph 212 is our real competition. Mr. BACHARACH. I just wanted to state for the benefit of Mr. Watson, who was asking you about white ware. You stated that you did not know what the competition was. Apparently that also comes from England and is quoted on page 470. I will not take Time to read it. (Mr. Wells submitted the following brief:) BRIEF OF THE UNITED STATES POTTERS ASSOCIATION This brief discusses competitive conditions prevailing in the markets of the nited States between American-made and foreign-made china and earthenware, r just that class of clay products commonly known as dishes, either decorated r undecorated. Paragraph 211 defines earthenware, and establishes rates of import duty as lows: Earthenware and crockery ware, undecorated, 45 per cent ad valorem; arthenware and crockery ware, decorated, 50 per cent ad valorem. Paragraph 212 defines china, and establishes rates of import duty as follows: China, undecorated, 60 per cent ad valorem; china, decorated, 70 per cent ad alorem. DIFFERENCE BETWEEN EARTHENWARE AND CHINA In appearance, commercial grades of china and earthenware are much the me. But there is a structural difference, and a quite important one. This ifference is well defined in the wording of the two paragraphs under considerahon. The two commodities may be readily distinguished by experts, but not easily by the purchasing public. Besides, there are many grades, or degrees f quality in both earthenware and china. It may be said as a general proposion that the products of no two makers, nor of no two countries, are identical. High-grade china is the most beautiful, most costly, and most desirable of the roducts of the clays of the earth. The excellence of this commodity gives a ertain sales prestige to the name "china." Consequently, the United States uports from some foreign countries vast quantities of a low-grade goods which technically "china," but in all desirable features quite inferior to the so-called arthenware dishes which constitute the bulk of American production. HOTEL CHINA There is some high-grade china made in this country, but the quantity is not arge compared with the aggregate. The production cost in America is so high mpared with foreign costs that the output is limited. The bulk of the producons of this country are divided into two classes, as follows: Earthenware; tel china. Hotel china is a true china, paragraph 212, made for use in hotels, restaurants, d other public institutions, in special shapes, and in a little heavier weight han dishes for family use, so that it may withstand the more severe demands { continuous public service. The American factories have been notably sucssful in producing a commodity especially adapted to this service. CLASSIFICATION OF AMERICAN PRODUCTIONS AND IMPORTATIONS Under the several classifications mentioned above, American productions nd competitive imports from foreign countries may be listed as follows: United States: Earthenware, 55 producers; annual sales, $33,000,000; hotel aina, 11 producers, annual sales, $10,000,000. England: Earthenware and high-grade china. France: High-grade china. Czechoslovakia: Principally low-grade earthenware and china, with some highrade china. Germany: Principally low-grade earthenware and china, with some highrade china. Japan: Principally low-grade china, with quantities of low-grade earthenvare and some high-grade china. Other countries: Holland, Belgium, China, Italy, principally low-grade earthenware, but with some high-grade earthenware and china. The statistics available as to the competitive value of the dishes imported can be derived only from the figures promulgated by the Treasury Department monthly, which show only the values at the factory door abroad, upon which duties are computed. Thus far in 1928 the foreign value of dishes imported is running close to the rate of $20,000,000 per year. With duty, freight and incidental expenses added, the competitive value of imported goods is about $44,000,000. Even upon this basis, importations of dishes would exceed American production by $1,000,000 per year, or the difference between $44,000,000 per year and $43,000,000. But the real difference is still greater. Some large department stores, and some large chain stores, import direct from foreig producers, but there are literally thousands of retailers who do not buy sufficient to warrant maintaining a foreign buyer, and they must purchase foreign gonds from an importer or a wholesaler. Consequently, their laid-down cost is increased by the addition of the importers' legitimate margin of profit. It is, therefore, conservative to assume that the cost upon the retailers' counters is about as follows: American dishes.. $43,000,000 50, 000, 000 It will be observed that we receive china or earthenware or both from nearly every civilized country of Europe and Asia, but because about 60 per cent of the cost of producing these commodities is labor cost, and since rates of wages paid in the exporting countries vary as much as 300 per cent the foreign selling prices of the same or similar articles in different countries are very far from uniform The prices at the door of the foreign factory ranged for the first 10 months of 1928 from an average of 63 cents per dozen pieces of decorated China in Japan to $2.33 per dozen in France. On decorated earthenware the range was from an average of 59 cents in Japan to $1.68 in England. The principal source of supply, that is our principal competing country, has constantly shifted as a low wage country and then a still lower wage country developed a pottery industry. This evolution has been as follows: From the time the United States began to import pottery until 1900 England maintained the lead. But in the meantime imports from Germany, by reason of lower wage rates, were rapidly increasing. She passed England in 1901 and continued a our leading competitor until the Great War closed her factories to America After the readjustment period it was a close race for a while between England and Germany, but the imports were increasing amazingly from Japan, a country manufacturing upon a much lower wage basis than Germany or any other competing European country. COMPARISON OF POTTERY WAGES PAID IN THE UNITED STATES AND IN COMPETING COUNTRIES From the best information available the comparison between American pottery wages and those of competing countries is approximately as follows, counting a classes of labor, male and female, skilled and unskilled: American wages, two and one-fourth times British wages, three and one-ha!! times German wages, and 8 times Japanese wages. Supporting the American-British comparison, the department of Commer Census of Manufactures, 1927, showed the 17,780 employees received $20,043,000 for the year's work, which is equivalent to $21.68 per week per individual. Quite independent of the Department of Commerce the Department of Labor, in 1923, made a survey of wages in 46 American potteries making earthenware and 7 potteries making china. The results are published in Bulletin No. 412 of the department showing the average earnings per week to be as follows: American earthenware potteries... $21.63 21.12 The reports from the two departments are so close as to confirm each other. The Pottery Gazette, of London, the trade publication of the British pottery industry, publishes monthly the number of persons employed in making Britis china and earthenware for a certain week and the amount of wages paid them. Taking two widely separated periods the Pottery Gazette figures are as follows. Aug. 1, 1922: 11,427 employees received 21,332 pounds in one week, or the equivalent of $9.004 each. Dec. 1, 1928: 11.027 employees received 21,536 pounds in one week, or the equivalent of $9.48 each. Taking these figures as a basis, the American wages are a little more than two and one-fourth times the British. The comparison with German rates of wages is based upon a survey and a report made by the United States Department of Labor, as published in the Monthly Labor Review of December, 1926. The figures employed below are taken from pages 131 and 132 of that publication for German rates of wages, while the figures for American wages are taken from pages 5 and 6 of the Bureau of Labor Statistics Bulletin No. 412, published in July, 1926. AMERICAN AND GERMAN POTTERS' WAGES In Germany, females earn from 8 cents to 10 cents per hour; in the United States females earn from 25 cents to 52 cents per hour; average in Germany, unknown; average in the United States, 382 cents per hour. In Germany, males earn from 13 cents to 31 cents per hour; in the United States males earn from 42 cents to $1.27 per hour; average in Germany, unKnown; average in the United States, 702 cents per hour. Based upon these figures taken from governmental reports, it is quite conservative to say American pottery wages are three and one-half times those paid in Germany, and this may include Czechoslovakia, which has recently become quite a factor. No official information is available as to rates of wages paid in the potteries of Japan. The office and factory doors of that country are closed to foreign inspection and there appears to be no means available to American manufacturers or to any governmental body, including the Tariff Commission, whereby the cost of production in Japan may be accurately compared with the cost of production in the United States. UNITED STATES STATISTICS COMPLETE AND FRANK In this country we are frank and lay our cards on the table. In the publications of the Department of Commerce and of the Department of Labor the most valuable statistics and the most intimate details as to manufacturing operations are exposed that all the world may see. In submitting our case to the Ways and Means Committee, it is the desire of the potters to present accurately all of the essential facts that may have a bearing upon the case. Much valuable information has been obtained from the following publications of the Department of Commerce: Monthly Summary of Foreign Commerce of United States. Census of Manufactures. Other details of equal value are revealed by publications of the Department of Labor, notably the Bulletin No. 412 of July, 1926, a publication of more than 160 pages, reporting the results of a survey of American pottery wages made by the department in 1925 with the cheerful cooperation of American manufacturers and American workers. If statistics equally accurate and comprehensive were available from competing countries, our task in presenting our case to Congress would be much simplified, and the justice of our petition for a substantial increase over the rates of duty specified in paragraphs 211 and 212 would be apparent. But there appears to be no official or reliable information available as to rates of wages, nor as to production costs in the Japanese pottery industry. The representatives of the Japanese manufacturers and importers who in other years have appeared before the Ways and Means Committee could disclose such essential facts if they would, but they have not done so heretofore. We can only infer what the wages must be from the prices at which they sell the product, and from a slight knowledge of the general level of Japanese wages in all industry. Computing upon that basis and knowing that labor cost in all Countries is approximately 60 per cent of total production cost of dishes, it may be assumed that Japanese female pottery workers do not receive more than the equivalent of 3 to 5 cents per hour and male workers more than 4 to 10 cents per hour. Therefore we believe the estimate that American pottery wages are eight times those of Japan is quite conservative. In support of the statement that Japan has become by a long margin our chief competitor the following table is submitted, taken from data published by the Department of Commerce in the Monthly Summary of Foreign Commerce. The table sets forth the number of dozens of decorated china imported from various countries for the first 10 months of the years 1926, 1927, and 1928. Only 10 months of all years are taken into account for the purpose of comparison, the latest figures available being for October, 1928. Volume in dozens of imports of decorated china from all countries for first 10 months of years 1926, 1927, and 1928 This table indicates that we receive more decorated china from Japan than from all other countries combined. In terms of percentage of the total imports the comparison is as follows: From this it will be seen that approximately 60 per cent of all china brought into this country comes from Japan alone, the country of cheapest labor. The next lowest scale of wages is paid in Germany and Czechoslovakia. Those two countries, plus Japan, are now supplying 93.4 per cent of the decorated china shipped into the United States, leaving only 6.6 per cent coming from Great Britain, France, and other countries. Formerly Great Britain and France enjoyed almost a monopoly of the American demand for foreign dishes. When I first entered the pottery business, just 40 years ago, 60 per cent of our import of dishes came from England and only 3 per cent from Japan. The explanation lies in the comparison of production costs, largely labor, which are reflected in selling prices at the pottery door. From the Monthly Summary of Foreign Commerce we arrive at the prices per dozen at which decorated china is entered at the port of New York and elsewhere as shown by the following table: Average prices per dozen at which decorated china was entered from various countries at American ports for the years 1926 and 1927 and for 10 months of 1928 The outstanding fact disclosed by this table and the one that warrants the American potters in petitioning the Congress for increased protection is that the price of decorated china from our principal competitor-Japan-supplying 60 per cent of our imports of that commodity, has dropped from 86 cents per dozen at factory door in 1926 to 63 cents per dozen in 1928. When the duty of 70 per cent is added this means that in 1926 the Government assessed 60 cents per dozen on Japanese imports and in 1928 only 44 cents, which is equivalent to a reduction in the tariff rate of 26 per cent. It also means that, omitting transportation charges and adding duty only to factory prices, Japanese china is now coming into this country at $1.07 per dozen against $1.46 per dozen in 1926, which is still of course a drop of 26 per cent, or 39 cents per dozen. To offset this partially we are asking that to the ad valorem rates specified in paragraph 212 of the tariff act of 1922 there be added a specific rate of 25 cents per dozen. The tabulations embodied in this brief should be sufficient evidence that neither an exclusive ad valorem rate of duty nor an exclusive specific rate will cover the ease. Neither one alone will afford reasonable protection to the domestic industry and at the same time render equal justice to importing countries. An ad valorem duty alone high enough to give the American potter an equal chance with the Japanese and Germans in our home market would be prohibitive as applied to France and England. A specific duty alone high enough to protect is against the lower wages of France and England would exclude Japan and Germany. So it would seem that equal justice to all concerned may be more nearly achieved by establishing a compound duty than in any other way. Ours is a highly competitive industry. It always has been. There never has been a time when the retail sales of foreign dishes have not been as much in dollars in the United States as the sales of the American product. This is not true of any other industry of equal magnitude or importance. Nor does any other American industry actively compete with so many producers abroad. In the modern construction of pottery plants, in the installation of improved and more economical methods of manufacture, in the study and adaptation of scientific principles the American potters have made tremendous strides, in recent years. In these respects America now leads the world. In rates of wages the potteries Compare favorably with the highest paid labor in any other American industry. In dealing with our labor organization we were pioneers in adopting the system of collective bargaining which is now recognized everywhere as ideal. We have followed that plan successfully for 30 years. We enjoy a record of having always dealt fairly and frankly with our public, our workers, our Government and with each other. Our books and our factories are always open to inspection by any agency of the United States Government. We have been surveyed three times in recent years by such agencies, always at our invitation, and with our cheerful and unreserved cooperation. What we ask in view of this record is that the Congress may accord to the ndustry a degree of protection that will enable us to keep our workers employed, o make a conservative return upon investments and to give us an equal chance n the home market against the products to cheap foreign labor. This will equire a comparatively high rate of duty for the reason that labor cost is such remarkably high precentage of total cost. Statistics promulgated by the Department of Commerce disclose that wages paid by the potteries are about ne-half the sales value, while for all manufactured products of all kinds made in he United States the labor cost is but little more than one-sixth of market value. Obviously the rate of duty required to protect the home industry should largely lepend upon the proportion of labor cost to total cost. The foreign manufacurer enjoys some advantage over United States in other elements of cost, such is raw materials, fuel, etc., but the disporportion in such items is meager in comparison with the difference in labor cost. EFFECT OF FOREIGN COMPETITION It will be apparent that the prices the merchants of the United States will pay or dishes made in America or elsewhere will be largely established by the lowest rices at which they can buy from any source goods of the same or similar charcter, or goods that serve the same purpose. Consequently, during recent years he prices of imported dishes in the American market have been much upset, and the business of American potters demoralized by the flood of importations rom Germany and Japan, and especially from Japan, at ruinous prices. Some tatistics of the experience of American pottery firms will bear out the foregoing tatement. During the consideration of the Fordney-McCumber tariff bill in 1922 Senator Jones of New Mexico, who vigorously opposed the rates on pottery proposed by the Finance Committee, asked the Internal Revenue Department to submit a statement to be taken from income-tax returns showing, among other ntimate details, the earnings of American pottery firms for the years 1918, 1919, and 1920. That statement was submitted, whether legally or not, and was pubished on page 8301 of the Congressional Record of May 25, 1922. It disclosed 34120-29-VOL 2, SCHED 2-25 |
