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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. 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. 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.
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.
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 sindicating) 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. 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. 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. 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.
BRIEF OF THE ALPHA QUALITY CHAMOIS LEATHER CO., OF
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 werds, 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.
PHILADELPHIA, January 17, 1913. Hon. Oscar W. UNDERWOOD, M. C.,
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.,
PHILADELPHIA, January 18, 1913. Hon. OSCAR W. UNDERWOOD, M. C.,
Chairman Ways and Means Committee, Washington, D. C. DEAR Sır: We respectfully ask to call the attention to your honorable committee “Tariff act, 1909, section 451, dressed upper and all other leather, caliskins tanned, or tanned and dressed, kangaroo, sheep, and goat skins (including lamb and kid skins), dressed and finished, other skins, and bookbinders' caliskins, all the foregoing not specially provided for in this section, 15 per centum ad valorem.'
“Section 452. Bags, baskets, belts, satchels, card cases, pocketbooks, jewel boxes, portfolios, and other boxes and cases, made wholly of or in chief value; not specially provided for in this section, 40 per centum ad valorem.”
Que company manufactures sheep leather largely, and again manufactures hatters' leather from the sheep leather. According to these two paragraphs sheep leather now pays duty 15 per centum ad valorem. Hatters' leather being manufactured from sheep leather 40 per centum ad valorem: We respectfully ask that this duty be retained in the new tariff bill. It is very important that American manufacturers of sheep leather and hatters' leather should have this protection so that they can continue to successfully compete with foreign manufacturers of these goods.
The American manufacturers are handicapped by the much higher cost of labor as compared to cost of labor in Europe. We estimate this higher cost not less than 40 per cent. Again, the tanning and coloring materials which must be used to produce these goods are at present paying a duty $7 per ton op sumac, and 30 per cent ad valorem on aniline dyes.
We hope that your committee will fix the duty on sheep leather as now, 15 per cent; on hatters leather (manufactures of leather), 40 per cent.
Any material reduction or removal of duty altogether we fear very much would cripple this industry in the United States. If it is absolutely necessary to have a revision of tariff downward, we would suggest that this be done very gradually, so that American manufacturers would not be seriously affected. In that event we would suggest duty on sheep leather 14 per cent. Duty on manufactures of sheep leather 38 per cent.
Should your committee desire any further information on this subject, the writer will make it convenient to come to Washington to appear before your committee at any time you may designate. Respectfully submitted. We are, yours, very truly,
DRUEDING Bros Co.,
BRIEF OF THE MOROCCO MANUFACTURERS' NATIONAL ASSO
CIATION ON GLAZED KID, ETC.
THE WAYS AND MEANS COMMITTEE:
The Morocco Manufacturers' National Association, representing no combination, but 34 independent and competing manufacturing concerns, employing 12,000 persons, begs to submit for your consideration data pertaining to the manufacture of glazed kid, mat kid, and colored kid manufactured from goatskins.
The present rate of duty is 15 per cent, which we consider not more than adequate to protect our industry.
Taking the average cost of goatskins per dozen in the raw state as $6.50 per dozen.
Based upon the 1910 census, showing years 1899, 1904, 1909, and 1912, the declared average value of raw goatskins is $6.52 per dozen.
The average cost of the finished product is approximately $9 per dozen.
Per cent. Cost of the raw material.
72. 22 Cost of labor...
13. 89 Cost of tanning materials..
8. 33 Cost of manufacturing expense..
5. 56 Total.......
100.00 The foreign manufacturer has an advantage over American manufacturers in the purchase of raw material by reason of being
closer to the point of origin—the large percentage of goatskins grow in the Eastern Hemisphere and the skins coming from
South America are principally shipped via Europe, thereby effecting a saving in freight, insurance, interest, and handling amounting approximately to 3 per cent, equal to 2.17 per cent of the total cost of the finished product.
The cost of labor to the foreign manufacturer is about one-half of that paid for the same labor in America, effecting a saving of 6.94 per cent of the total cost of the finished product.
The foreign manufacturer also has some advantage in the purchase of chemicals which enter into the manufacture of glazed kid which are subject to duty in America, such as glycerine, arsenic, bichromate of potash, bichromate of soda, aniline colors, dye woods, hyposulphide of soda, and sulphide of sodium, and many others, amounting to approximately 124 per cent, equal to 1.42 per cent of the total cost of the finished product.
Manufacturing expenses 334 per cent less, equal to 1.85 per cent of the total cost of the finished product. The foreign manufacturer's advantage is:
Per cent. Raw material...
2. 17 Labor..
6. 94 Chemicals.
1. 42 Manufacturing expenses.
1. 85 Total.....
12. 38 Twenty-five years ago goat-skin tanning or manufacturing was an infant industry in America. Its market was dominated by French and German manufacturers. The best grades of kid cost then from 70 to 80 cents per square foot, or a general average cost of from 30 to 40 cents per square foot, since which time, through the perfecting of a mineral tannage and protection, the American manufacturer has regained our home market. Through the competition of the 34 manufacturing concerns the price has been reduced; the best grades of kid to-day sell at from 30 to 35 cents per square foot, or a general average of 18 cents per square foot.
Up to five years ago the American manufacturer dominated the world's market, enjoying a great domestic and foreign demand. Since, however, owing to the American proclivity to extravagance and love of novelty, the domestic consumption has been greatly decreased through the use of patent and fancy leathers and various fabrics, such as cloths, velvets, silks, satins, and canvas, leaving now a domestic demand chiefly for the cheaper grades. Fortunately, the export demand has been for the better grades, enabling us to continue business, but in a lessened percentage of the world's volume.
The decrease in value from 1909 to 1912 is 16.15 per cent; the decrease in number from 1909 to 1912 is 6.08 per cent.
The English, French, and German manufacturers have adopted all new American machinery, send each year experts to America to glean new ideas and secure expert American workmen to teach their employees, and during the same time (or for the past five years) have more than doubled their production, tanning now approximately 37.50 per cent of the world's supply of goatskins.
Now the crux of the situation is this: The foreign manufacturers have a demand for the better grades beyond their ability to supply, but only a limited demand for their cheaper grades, because cheap shoes in foreign countries are principally made of cowhides, calf or sheep skins. Not having a market for their cheaper grades, the increase of their production has been thus limited.
Should the present duty on glazed kid be removed, the foreign manufacturers would soon, because of lower costs, secure and dominate the American market for cheaper grades and through increased production hold their own markets for better grades, thus seriously hurting our industry, to the detriment of some 12,000 employees, who now receive annually $6,000,000 to $7,000,000 in wages.
MOROCCO MANUFACTURERS' NATIONAL ASSOCIATION,