PARAGRAPH 451-LEATHER.

because this same pelt has a considerable better value in its full state for shoe and other leathers.

We are therefore dependent on the foreign market for our raw material, which market is giving us, even on the present basis, a difficult problem in competition. This can be definitely verified, as before stated, as industries of this nature have been commenced and large amounts of money spent in the development at various times, but died out owing to the competition of the foreign goods, which are produced with labor at one-third of what we pay, in addition to the advantage the European market has in the procuring of raw stock.

You will appreciate that with the competitive condition outlined and our dependence on the foreign market for raw material, we are placed at a tremendous disadvantage. In other words, as to the importation of our raw material, the foreign market is controlled by our foreign competitors.

In the process of tanning genuine chamois leather Newfoundland cod oil is largely used, and upon it a duty of 8 cents per gallon is imposed. On the present production of 2,000 fleshers per day we consume approximately 3,000 barrels of cod oil per annum. While it might inure to the temporary advantage of chamois manufacturing to have this duty on cod oil removed, we do not ask it, for the reason that we believe that it will ultimately be for the best interest of all concerned to encourage the production and manufacture of the domestic cod oil, which is now acquiring a standard as to quality, but not yet produced in sufficient quantities to meet the needs of chamois manufacturers. This oil becomes thoroughly oxidized and changed in general nature in the process of tannage. The chemical change taking place is not generally understood even by the leading chemists, but the results thereof have been clearly established as being beneficial in the use of this oxidizing oil in stuffing of upper leather, and as such is now thoroughly recognized by the tanners of good leather for shoe and other purposes.

This product or by-product, the oxidized oil, is known as moellon degras from the fact that it contains not only the oxidized cod oil but the degreased nerve tissue, and it adds strength and weight to leather as no other commodity will do.

This by-product moellon degras is produced by the foreign chamois tanner, and like many importations has had prestige over a domestic product, and in this commodity we have had, as well as in the chamois leather, a hard fight. There is something about the foreign article that from sentiment takes prestige over the domestic, and the tanner has become accustomed to place undue confidence in this article.

This condition had to be overcome in order to successfully continue the industry, as it would be absolutely impossible to lose the value of the cod oil in the tannage, and it must be marketed at nearly the cost of the cod oil. This feature of the manufacturing has played no small part in the development of the business. We have, however, been forced to market these goods at less than the intrinsic value to the upper leather tanner, owing to the prestige of the foreign market, which we can definitely state is not a fair one, as the foreign producer, because of this prestige, has been able to dilute his production so that it realizes for him a margin of profit considerably over the cost of the cod oil. This has been possible as the tanner has felt entirely dependent on the foreign market for his supply, and the foreign market in turn has taken advantage of this point, supported by the supposition that imported moellon is better than stock produced in this country. We, on the other hand, guarantee the absolute purity of our stock and by unceasing energy have been able to market our production, but only at a lower figure than our competitor abroad. We do, therefore, deserve substantial protection on this by-product as well as on the chamois leather. We should, in order to successfully continue and enlarge this industry, be in a position to compete with imported goods. There should be a substantial and definite tariff on all moellon degras, degras, and tanners' grease on the basis of percentage per pound rather than tariff percentage ad valorem, as the latter encourages dishonest billing of the goods, which can only be defined correctly by expert laboratory tests.

The chamois industry in this country is yet in its infancy. There are but 3 companies devoting their entire energies to the production of chamois, and but 10 or 15 smaller companies which manufacture chamois incidental to other activities. There is a fair opportunity to increase the amount of American production of this article, provided there be no interference with the present rate of duty, which is hardly sufficient to permit the existing concerns to compete with European manufacturers. It is respectfully urged, therefore, that no reduction in the present tariff schedule be made on that item.

Respectfully, yours,

NORMAN H. PARKE, General Manager Black Horn Leather Co.

PARAGRAPH 451-LEATHER.

TESTIMONY OF WILLIAM ROBINSON, SR., ON BEHALF OF THE ALPHA LEATHER CO., OF FRANKFORD, PHILADELPHIA.

The witness was duly sworn by the chairman.

The CHAIRMAN. You may proceed, Mr. Robinson.

Mr. ROBINSON. Mr. Chairman and gentlemen of the committee, I have no brief at all to submit, and only a very few remarks.

I am here in the interest of the Alpha Leather Co., of Frankford, Philadelphia. I notice on the calendar list of witnesses that gloves are stated as our line, but such is not the case, as we never made a finger of one.

My sole purpose before this committee is to ask your consideration, in making a provision in the coming tariff, for our line of imports, as there is evidently none in the present bill.

For nearly two years we have been importing from England rough split sheepskin leather, tanned but unfinished, and have been assessed on this 20 per cent ad valorem.

Mr. HULL. Under which section are you speaking?

Mr. ROBINSON. There is no section that I know of. It will come under section 451, if you can find it.

I want to impress on your minds that this is rough split sheepskin, tanned but unfinished.

On this line of imports we have to expend about 15 per cent of labor to put it in a marketable condition; yet the importer here imports the finished article, ready for sale, and only pays the same ad valorem, 20 per cent.

I have two samples here, one of the unfinished skin just as we import it, and the other a small piece which we have finished, similar to all our finished goods, and I would ask the committee if they think there is any equity in the present rating, after you see the contrast. We contend that our line should be placed on the free list, and especially so if it should be that a reduction is made on the finished goods.

This line of industry is a new venture to my firm, and is practically only in its infancy, and I am of the opinion that quite a reasonable amount of exports are made yearly from England, at least, and we would like to foster the industry if we are given a fair chance, but we can not continue under present conditions.

I will now show you the difference in the two skins.

Mr. Robinson here handed two samples of chamois to the members of the committee.

Mr. ROBINSON. Ours has to be handled from ten to a dozen times before we can get it into this finished condition. This other sample [indicating] is exactly the same leather that comes from England, finished and worked on the other side, and yet we pay the same amount ad valorem on our unfinished product-20 per cent.

Mr. HARRISON. Does not the ad valorem rate in itself mount with the value of the skin?

Mr. ROBINSON. Yes.

Mr. HARRISON. So when it is more highly finished and after these other processes have been worked on it, it is worth more than it is in the first form and the rate is higher?

PARAGRAPH 451-LEATHER.

Mr. ROBINSON. Not in our particular line, because ours is only a medium grade. It is not used for any manufacture of any kind. It is used for washing windows and for a lower grade of work.

The CHAIRMAN. What is the value of that skin which you have in your left hand?

Mr. ROBINSON. Just as it is imported, do you mean?

The CHAIRMAN. Yes.

Mr. ROBINSON. I could not say. They vary. The average runs about $4.80 a dozen at the present time.

The CHAIRMAN. What would be the value of that after you finished it.

Mr. ROBINSON. They vary, too. It just depends. You might buy a dozen skins and you would not get the same amount of leather out

of them.

The CHAIRMAN. But taking that particular skin, as you have it in your hand, and finishing it, what would be the value of that?

Mr. ROBINSON. As we sell it?

The CHAIRMAN. As it goes to the customer.

Mr. ROBINSON. This particular skin here?

The CHAIRMAN. Yes.

Mr. ROBINSON. I could not tell that.

The CHAIRMAN. You say that it would be $4.80 coming in that way?

Mr. ROBINSON. No; I take the average of the smaller size with the larger size.

The CHAIRMAN. What we want to do is to get some information. Can you not tell us what would be the value of that skin coming into the customhouse?

Mr. ROBINSON. The purchase price?

The CHAIRMAN. I mean the value of that particular skin by the dozen, coming in at the customhouse.

Mr. ROBINSON. Possibly about 40 cents.

The CHAIRMAN. What would it be the worth if it came in finished? Mr. ROBINSON. I do not know. We do not buy in that particular

way.

We do not buy them finished.

The CHAIRMAN. Do you not know what is the import value of those skins with which you come in competition?

Mr. ROBINSON. They vary in size and quality. It just depends on the quality. The only thing I am in touch with is the selling of it. Mr. HILL. What is the other piece which you have there?

Mr. ROBINSON. This [indicating] is a small piece exactly as it is finished.

Mr. HILL. Is that cut off for any particular purpose?

Mr. ROBINSON. It is cut off for a sample or pattern. It is supposed to be a pattern of a certain size.

Mr. HILL. How do you get that in at the same rate when the law says you shall pay 10 per cent additional for the other?

Mr. ROBINSON. We do not buy it in this condition. We put it in this condition.

Mr. HILL. You can not import that at the same rate of duty as the other?

Mr. ROBINSON. Yes, sir; that is my contention.

PARAGRAPH 451-LEATHER.

Mr. HILL. The law does not say that. The law says you pay 10 per cent more for that. Is that to make gloves?

Mr. ROBINSON. No; this is a window leather.
Mr. HILL. The law distinctly says:

Provided, That leather cut into shoe uppers or vamps or other forms, suitable for conversion into manufactured articles, and gauffre leather, shall pay a duty of ten per centum ad valorem in addition to the duty imposed by this paragraph on leather of the same character as that from which they are cut.

Mr. ROBINSON. How is it they only pay 20 per cent?

Mr. HILL. I do not know. You have been very lucky in getting them in.

Mr. ROBINSON. We are not buying in this condition. We finish ours ourselves.

Mr. PALMER. You are a manufacturer?

Mr. ROBINSON. Yes. We manufacture the goods in this condition [indicating]. This [indicating] is the condition in which we buy them, yet these goods [indicating] are bought by other people from the manufacturer on the other side and sent here for the same rate of duty. Mr. HILL. At the same rate of duty?

Mr. ROBINSON. Yes, sir; at the same rate of duty.

Mr. HILL. I do not see how they do it.

Mr. ROBINSON. They do it just the same.

Mr. HARRISON. Suppose the first skin you show us there is worth 40 cents at the customhouse and you pay on that 20 per cent ad valorem ?

Mr. ROBINSON. Yes, sir.

Mr. HARRISON. That is one-fifth, or 8 cents duty?

Mr. ROBINSON. Yes, sir.

Mr. HARRISON. Let us assume that the other piece of leather is a full-sized skin, just like the first one, except that it is finished in that condition; that is worth more, it it not?

Mr. ROBINSON. It ought to be.

Mr. HARRISON. Let us assume it is worth 60 cents, just for the sake of the calculation. On that you claim 20 per cent duty is paid? Mr. ROBINSON. Yes, sir.

Mr. HARRISON. Twenty per cent is one-fifth; one-fifth of 60 is 12; so there is a duty of 12 cents paid on it when finished and only 8 cents paid on it when it comes in unfinished, and therefore there is a higher amount of duty paid on it after labor has been expended on it, and you correspondingly are protected for the amount of work you put on it in this country.

Mr. ROBINSON. I do not think you are right.

Mr. HARRISON. My figures may not be right, but my reasoning is. Mr. ROBINSON. No; your reasoning is not right. It is sold in the old country just as cheaply as we sell it. That is my argument, and we can not compete with them on the other side, as they can sell cheaper over there than we can sell here. That skin does not cost any more. They are valued just about the same.

The CHAIRMAN. There seems to be nothing further, Mr. Robinson. You may be excused.

PARAGRAPH 451-LEATHER.

BRIEF OF THE ALPHA QUALITY CHAMOIS LEATHER CO., OF FRANKFORD, PA.

FRANKFORD, PHILADELPHIA, PA., February 6, 1913. Mr. Oscar W. Underwood, chairman, and gentlemen of the Ways and Means Committee, House of Representatives:

We, the Alpha Quality Chamois Leather Co., of Frankford, Philadelphia, have for the past two years been importing into this country rough, split sheepskin leather, tanned but unfinished, commonly called in England crust-oil leather, which we convert into wash leather, usually termed commercial chamois.

Under the tariff act of 1909 there appears no rating for these goods, and consequently we have been assessed 20 per cent ad valorem, having been given the rating or classification as per schedule 451 (chamois skins), which was unjust, and we have been paying said rate under protest ever since. These goods as we receive them in their crude state require 15 per cent of labor to put them in a finished and marketable condition.

The importer pays 20 per cent ad valorem on the finished goods, having to expend no labor on the same, yet the same goods bought by the manufacturers in England, in the same crude way as we buy them, and from the same tanners, are finished by the manufacturers and made ready for sale by them at a labor cost of 24 cents a dozen skins; the same dozen skins finished by us cost 70 cents, or, in other words, the labor cost in England is about one-third of our own cost.

This comparison will show how inequitable has been the rating against us in the past two years, and in order to continue our business and foster a new American industry, allowing us only fair and just competition, we would ask that rough, split sheep skin, tanned but unfinished, be placed on the free list, and that the present duty of 20 per cent ad valorem on chamois leather be retained. Respectfully submitted.

ALPHA QUALITY CHAMOIS Leather Co.,

Frankford, Philadelphia, Pa.

BRIEF OF drueding BROS. CO., PHILADELPHIA, PA.

Hon. OSCAR W. UNDERWOOD, M. C.,

PHILADELPHIA, January 17, 1913.

Chairman Ways and Means Committee, Washington, D. C.

DEAR SIR: We respectfully ask to call the attention of your honorable committee to tariff act, 1909, section 451, chamois skins, 20 per centum ad valorem.

Our company manufactures these goods extensively, and requests your committee to retain the present duty (20 per centum ad valorem) on this article.

The tanning materials is fish oil and cod oil. Newfoundland cod oil at present pays

a duty equal to 8 cents per gallon. Sheepskins are on the free list.

Our principal argument for retention of this small duty, besides the necessity for revenue, is to protect American manufacturers for the difference in labor costs as compared with the labor costs in European countries. We estimate the difference in cost of labor at not less than 40 per cent higher. We fear it would cripple this industry if the duty should be materially reduced, or taken off altogether.

We therefore request that your committee fix the rate on chamois skins as at present, 20 per centum; or, if in your opinion a downward revision is absolutely necessary, we would suggest 19 per centum.

In the writer's opinion a very gradual reduction would cause the least disturbance. Should your committee desire any further information on this subject, the writer will make it convenient to come to Washington and appear before your committee at any time you may designate.

Respectfully submitted.

We are, yours, very truly,

DRUEDING BROS. Co.,

CHAS C. DRUEDING, Treasurer.