PARAGRAPHS 92-94-POTTERY.

EXHIBIT K.

One case containing 40 dozen decorated German china salads, at 2.75 marks, equals 65 cents a dozen, $26.20.

Weight 700 pounds, measure 34 cubic feet.

On the basis of 1912 ocean freight rates it cost $24.62 to land $26.20 worth of china salads in Baltimore.

EXHIBIT L.

One case, containing 30 dozen decorated German china salads, at 3.90 marks, equal 93 cents a dozen, $27.90.

Weight 810 pounds, measure 45 cubic feet.

On the basis of 1912 ocean freight rates, it cost $27.28 to land $27.90 worth of china salads in Baltimore.

EXHIBIT M.

One case containing 30 dozen decorated German china salads, at 3.10 marks, equals 134 cents a dozen, $22.12.

Weight 708 pounds, measure 34 cubic feet.

On the basis of 1912 ocean freight rates it cost $22.17 to land $22.12 worth of china salads in Baltimore.

PARAGRAPHS 92-94-POTTERY.

EXHIBIT N.

One case containing 40 dozen decorated German china salads, at 2.20 marks, equal 52 cents a dozen, $20.93.

Weight 715 pounds, measure 42.3 cubic feet.

On the basis of 1912 ocean freight rates it cost $21.46 to land $20.93 worth of china salads in Baltimore.

EXHIBIT O.

One case containing 36 dozen decorated German china cake plates, at 2.70 marks, equals 64 cents a dozen, $23.13.

Weight, 616 pounds; measure, 36 cubic feet.

On the basis of 1912 ocean freight rates it cost $22.10 to land $23.13 worth of china cake plates in Baltimore.

EXHIBIT P.

One case containing 24 dozen decorated. German china sugars and creams, at 2 marks, equals 71% cents a dozen, $17.14.

Weight, 506 pounds; measure, 40.1 cubic feet.

On the basis of 1912 ocean freight rates, it cost $17.55 to land $17.14 worth of china sugars and creams in Baltimore.

Attention is called to the fact that in the present year, 1913, the ocean freight rates are 31.6 per cent higher than given in the above exhibits. Respectfully submitted.

GEO. KOLB,
HERMAN SIEGEL,
JULIUS ROSENFELD,

Committee for the Importers of German and Austrian China, New York City.

PARAGRAPHS 92-94-POTTERY.

Mr. Kolb thereupon exhibited samples of china and earthenware to the committee.

Mr. PAYNE. Do you know what they pay for decoration in Germany?

Mr. KOLB. I could not give you any information on that score. I am a manufacturer and not an importer.

Mr. PAYNE. I am told it costs $1.50 a week in Great Britain and $8 a week here for the girls who do that work.

Mr. KOLB. I think, Mr. Payne, if I would ask a manufacturer with whom I was dealing what he paid for the applying of the decorations. or what it cost him he would tell me that was none of my business.

Mr. PAYNE. I presume he would, if he was importing into the United States.

The CHAIRMAN. Are you almost through, Mr. Kolb?

Mr. HILL. I would like to ask one question. Really, as a matter between one china and another, is not china to-day a luxury?

Mr. KOLB. No, sir; not the class of merchandise we are talking about here to-day.

Mr. HILL. One will look just as well as the other and wear just as well?

Mr. KOLB. Sir?

Mr. HILL. Is it not a luxury?

Mr. KOLB. No, sir; you would not call that a luxury [exhibiting plate]?

Mr. HILL. If I was working for $6 or $8 or $10 or $12 a week, as the average workman in the United States does, it would be a luxury

to me.

Mr. KOLB. I would not say that.

Mr. HILL. Is it not a luxury to the average American citizen?
Mr. KOLB. No, sir.

Mr. HILL. And ought it not to pay a high tax?

Mr. KOLB. No, sir.

Here is something that I would like to show, to show you that the domestic potter to-day is stamping a good portion of his ware as china. Here, for instance, I have a plate that is stamped "Dresden China" (exhibiting plate); here is another platter marked “Limoges China."

Mr. PAYNE. He ought to be sent to State prison for life for that. Mr. KOLB. That would happen if the importer did it.

Mr. PAYNE. You couldn't get an importer in State prison when he actually commits a fraud and gets thousands of dollars out of the Government?

Mr. KOLB. The Government would have to prove it first, before they could do it.

The CHAIRMAN. Gentlemen, that concludes Mr. Kolb's statement.

Mr. DANIEL ('. Roper,

GEO. BORGFELDT & Co..

CUSTOMS DEPARTMENT,
New York, N. Y., January 30, 1913.

Clerk Committee on Ways and Means, Washington, D. C.

MY DEAR MR. ROPER: By direction of the committee we beg to hand you herewith a copy of memoranda in rebuttal of certain statements made by Mr. Burgess and Mr.

PARAGRAPHS 92-94-POTTERY.

Wells in reference to the hearings before the committee on Schedule B, which I will thank you to have printed in the proper place, and oblige,

Yours, truly,

GEO. BORGFeldt & Co.,

JOHN E. DAWSING, Customs Manager.

MEMORANDA IN REBUTTAL OF STATEMENTS MADE BY WILLIAM BURGESS AND W. E. WELLS, REPRESENTING THE DOMESTIC POTTERY INTERESTS.

[Before the Ways and Means Committee, Jan. 8, 1913.]

Mr. Burgess stated that fully 90 per cent of the total cost of pottery ware represents labor and that 664 per cent goes out in the pay envelope. This is at variance with statement of the other representative, Mr. Wells, where he shows besides wages, the "pay envelope" kind of Mr. Burgess, a small item of over $20,000, made up of "all other wages, $14,054.33, and office and management, $6,240." This represents but one of his factories, and, presumably, the figures are most favorable. This is an expense and can not be considered anything else and certainly does not go into the beneficent pay envelope.

Also in this connection Mr. Burgess confuses the figures. He shows of the production of $115.263 the labor item to be $58,912, or 51 per cent. Here he reckons interest at $9,430, whereas he states an investment of $100,000 should produce $150,000 of finished product, so that according to these figures, on a production of $115,263 a liberal estimate of investment necessary would be $80,000 with interest of about $5,000.

Mr. Burgess stated that they are supplying less than two-fifths of the consumption of dinner ware. According to his figures the domestic production is $16,000,000 or $17,000,000, and the landed cost of importations would be about the same. In the amount of the imported goods represented 25 to 33 per cent of fancy articles, not dinner ware, and high-priced china goods which in no way come into competition with the domestic production and should not be used as a basis for comparison.

In this connection Mr. Burgess in defending the domestic pottery interests made the sorrowful statement that the business never made a fortune for anyone. While that may merely be regarded as a relative expression, 200 per cent dividends might be regarded as approaching "comfortable conditions." The Onandago Pottery Co. (see recent issue of May 19, 1912, of the Pottery, Glass, and Brass Salesman), which is practically the only pottery company in the United States producing real china, declared a stock dividend of $500,000 on a capital of $250,000, or, in other words, a 200 per cent dividend.

Mr. Burgess's allusion to Royal pottery companies is another misleading state. ment. The Royal Worcester is not a Royal factory of any sort. It is royal only in name and is not subsidized by the Government. There is no such thing as a "Royal Japanese Factory," nor has one existed for the past 50 years. These facts and others of like purport it does not seem probable the domestic interests were ignorant of.

Mr. Burgess again submits misleading statements. He states the dividends of various foreign factories: Kahla, 25 per cent; Rosenthal, 18 per cent; Jonhson Bros., 263 per cent, etc., when as a matter of fact Kahla pays 25 per cent on about 2,000,000 marks ($500,000) of common stock and about 34 to 4 per cent on about 4,000,000 marks ($800,000) bonds, making an actual dividend of 10 or 11 per cent on their capitalization; also these dividends are chiefly derived from electrical goods, such as insulators, etc., not imported into this country. The Rosenthal earnings are based on similar conditions, and the output of Johnson Bros. is practically two-thirds sanitary ware, none of which is imported into this market. His other statements have the same value for accuracy. In comparison of American factories he gives earnings of factories as averaging 63 per cent, which, if submitted, is equal to the factories of any of the pottery centers of Europe.

In this connection Mr. Wells gives the average earnings of 21 factories as 8 per cent. He carefully gives the average. It would be illuminating to have the figures of a few of the most successful. We have shown one, supra, paying a 200 per cent dividend.

Assuming the statement made by Mr. Wells indicating the average profit of 21 factories to be 63 per cent to be correct, this does not necessarily indicate that the American factories are entitled to special protection, because of the fact that they do not show large profits, although this is intended to be implied.

PARAGRAPHS 92-94 POTTERY.

In any industry the dividend returns will vary in different factories making the same merchandise, according to the different degrees of ability displayed by the management.

It is certain that the inducements of the actual profits, whether declared as dividends or in whatever manner received, have been sufficient to cause a large increase in the capital invested and an increase in the number of kilns built, from 239 in 1890 and about 1,000 in 1912, and several of the big factories have announced a further increase in the number of kilns. The increase and output has been from $4,000,000 to $17,000,000. As the protection enjoyed has been enormous, it appears evident that the normal rate of dividend shown is not an adequate index of the real prosperity of the industry. It seems probable that the well-managed concerns show considerable profit, and that the figures are only held down to the average of 63 per cent by reason of the poor showing of the poorly managed or equipped plants. The figures submitted do not disguise the fact that some of the factories were operated at a loss, but as they do not wish the actual dividends declared making up the average, they are not conclusive, and can not be used as an index of the condition in the industry On page Mr. Burgess gives some figures which he states are based on information obtained by him while an American consul in the potting district of England. This was 20 years ago (1893) and although he states they have been confirmed he carefully refrained from giving any data on the subject. As a further index of the misleading character of his statement to the Ways and Means Committee, we quote his figures and what they are actually to-day. It is unnecessary to suggest that this correct information, if not actually in Mr. Burgess' possession, could have been easily obtained.

The price of coal in England.

Mr. Burgess' figures: Coal, $2.56; cobbles, $2.10; slack, $1.38.

Actual prices to-day in England of the grades of coal used by the pottery manufacturers are as follows: Coal, 14s. 10d. ($3.61); cockshead or burgy from 138. 15d. ($3.16 to $3.65); slack, 10s. 6d. ($2.57); coal, domestic (Mr. Burgess), $3.45 per ton. Actually delivered in East Liverpool: Coal, $2.75; slack, $1.75.