PARAGRAPH 427-BUTTONS. SELLING PRICES HERE AND EUROPE-Continued. Best quality coat, vest, and overcoat vegetable ivory buttons-English make-Continued. [Information from Robert P. Skinner, consul general, Hamburg, Germany, May 1, 1911.] 23 and 24. 30. 36. 40. 44 and 45. 50.. 23 and 24. 30. 36. 40. 44 and 45. 50. 22.. 27. 20. 24. 30. 32. 34. 36. 22. 27. 20. 24. 30. 32. 34. 36. [Information from Augustus E. Ingram, consul, Bradford, England, Mar. 16, 1911.] PARAGRAPH 427-BUTTONS. SELLING PRICES HERE AND EUROPE-continued. Best quality coat, vest, and overcoat vegetable ivory buttons-English make—Continued. [Information from John L. Griffiths, Consul General, London, England, Apr. 28, 1911.] Our selling prices average 84 per cent over European, with but a profit to us of less than 5 per cent on the capital invested. CAN NOT LIVE WITHOUT ADEQUATE PROTECTION. It is quite evident that with any reduction below the present tariff rate the manufacturers can not continue in business but will be forced out as they were in the two periods 1884 to 1889 and in 1893 to 1897 under the Wilson tariff of 35 per cent ad valorem, unless they reduce wages low enough to compete with the cheap labor of Europe--taking into account the tariff rate finally decided upon. PARAGRAPH 427-BUTTONS. A SPECIFIC DUTY IMPERATIVE. The opinion among the manufacturers that a specific tariff is absolutely imperative and should be maintained on this class of merchandise is unanimous; otherwise undervaluations can not be prevented-and this difficulty has presented itself with every ad valorem tariff we have ever had, as far as it related to vegetable ivory buttons. The present duty obviously can not be translated into an equivalent of ad valorem and is not equal to any given ad valorem percentage. INCREASED COST SINCE 1897. Since 1897 when the present tariff went into effect the cost of ivory nuts has increased from 2 cents to 6 cents per pound, and labor has nearly doubled, yet the selling price to the consumer has not been increased. VEGETABLE IVORY BUTTONS NOT ON CHEAPEST CLOTHING AND THEREFORE IN A MEASURE A LUXURY. Vegetable ivory buttons are not used upon the cheapest grades of clothing, but only upon the better grades. Upon the cheapest grades are used mostly horn, bone, composition, and metal, which are used in very large quantities. EUROPE HAS ADVANTAGE ON RAW MATERIAL While it is true that ivory nuts come into the country free of duty as they also go into Europe free (and we earnestly hope they will continue to be permitted to come here free as long as they go into Europe free), yet Hamburg is the ivory nut market of the world and largely controls the gathering and shipping of nuts in South America to our disadvantage, and furthermore the Italian colony of Eritrea supplies the Italian manufacturers with about 5,000 to 6,000 tons yearly of nuts at about one-third the prices we have to pay for South American nuts, thus giving the Italian manufacturer à tremendous advantage. DATA OPEN FOR YOUR INSPECTION. Our books, the data for all of the above figures and any records that we have in substantiation of the above or relating thereto, are open for the examination, at our New York office, by any expert you may designate for that purpose. NO MONOPOLY OR AGREEMENT THAT REGULATES PRICES. We are pleading for a chance to live. Without adequate consideration we can notand maintain the present rate of wages paid in this country. We have no monopoly, agreement, or anything else that controls the price to the consumer. Open, free, and unrestricted competition alone regulates the selling price. From the information we have given you, you can see that we have made no extortionate profits. On the contrary, domestic competition has made the result for the three years mentioned deplorable, but we have been looking forward to the future with confidence that any legitimate industry will not be injured and that better conditions will exist, and if we have a favorable tariff we have reason to believe we will not be disappointed. VEGETABLE IVORY BUTTONS OUR PRODUCT. We are writing of vegetable ivory buttons alone and not metal, pearl, composition, rubber, glass, agate, or any other kind that may be under Schedule N-conditions of which may be entirely different from what they are in this industry that we represent. Very truly, yours, UNITED BUTTON Co., PARAGRAPH 427-BUTTONS. Hon. OSCAR UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. UNITED BUTTON Co., New York, January 18, 1913. DEAR SIR: We understand that the question of the tariff rate on the importation of buttons made from vegetable ivory (par. 427, tariff of 1909, Schedule N) will be considered by your committee about the 29th instant, and we respectfully inquire whether it is the intention of the committee to change the existing tariff rate; because if it is not we do not desire to take up your time in listening to arguments as to why that rate should continue to be maintained. Vegetable ivory buttons are manufactured from ivory nuts produced by the tagua palm in Colombia, Ecuador, and Panama, South America, and come in duty free, and the industry is absolutely dependent for existence upon a protective tariff. Without such a tariff it could not exist, because the very low cost of labor in Germany, Austria, and Italy enables those countries to produce ivory buttons at such a price that we could not compete with the high labor cost we have to pay in this country. There is not the slightest trace of any monopoly in the ivory button industry in this country, and there never was. The tariff simply gives manufacturers the American market to a very large extent, but domestic competition now and always has regulated the selling price to the consumer, with the result that that domestic competition has made it difficult for the manufacturers to make even a fair profit on their output. If the tariff was taken off entirely or was reduced materially from the present sched ule, it would without question result in the admission of foreign-made buttons and would drive the American manufacturer out of business, and the people now employed in this industry would seek employment elsewhere and become competitors in other lines of employment to sustain themselves. The American standard of living unquestionably demands a higher rate of wages than is paid abroad, and the only way we could compete with the button makers of Germany, Austria, and Italy, without the protec tion of the tariff, would be by reducing the standard of living of the American button maker to that of the German, Austrian, or Italian, to attempt which would result in industrial upheaval and chaotic conditions the danger of which would be hard to forecast. The public has not suffered ore iota as the result of any monopoly, combination, agreement, or understanding that has increased to price to the consumer, and as that price to the consumer has been regulated absolutely by domestic competition, we sincerely hope that no action in regard to the tariff rate on vegetable ivory buttons will be taken that will be injurious to an industry that is only surviving by strictest attention and the greatest economy in all matters relating thereto, and that can not possibly exist under any more adverse circumstar ces than obtain at the present time. It is essential to have a specific duty, or at least partially so, as at present, because of the difficulty in pricing this class of goods or getting at the proper valuation. It will be practically impossible for customhouse officials to put a proper valuation upon goods imported, no matter how efficient they may be for their business in general, and without a specific duty undervaluation will be made as formerly under a purely ad valorem tariff. Whether we differ or agree as to the theories of the working of the tariff, if we refer to the past history of this industry and get at the facts as they have transpired it will become evident that under the low tariff of 1885 the industry was practically put out of business, so that by 1887 the majority of the factories closed up or failed. Conditions following this were such that a great many of the employees of this industry and their families were for a considerable period on the verge of starvation-seeking employment in other industries at any wages they could obtain in order to eke out an existence. After the year 1889 there was somewhat of a revival, but the low tariff, again adopted in 1893 to 1897 (35 per cent ad valorem), practically ended the existence of the manufacturers, including those few who had survived the previous depression of 1885 to 1889. These facts are easily corroborated in the history of the business and it seems to us should have due consideration in connection with the question. We have not had time to obtain and compile reliable information as to the different rates of wages paid in the different countries of Europe, as the subject is very much complicated and it would be an immense amount of work to get up a statement that would be clear and conclusive. Our best information is that we pay from 200 per cent to 325 per cent (the latter in Italy) more than is paid in Europe, depending upon locality and the class of buttons produced. PARAGRAPH 427-BUTTONS. We do know, however, that under a 35 per cent ad valorem tariff in 1893 to 1897 the industry was absolutely destroyed and that under the present tariff we have a living chance, although about $100,000 worth of buttons were imported last year, showing that the present tariff is very near the danger point. We will endeavor within a few days to transmit to you information as to the total capital invested in the vegetable ivory button business, the net sales and the net profit or loss during the three years 1909, 1910, and 1911; and we say to you in all frankness that we are perfectly willing to have our books gone over by any expert you may name in order that you may have any information you require to arrive at a result that shall be just to this industry and allow it to live and continue to employ thousands of men, women, and children at wages they can live on upon the basis of the American standard of living. Hearing Gov. Wilson on various occasions, we were led to believe that no industry doing business upon legitimate lines would be injured, and fully relying upon his statements we confidently expect that conditions will not be made any harder for us than they now are. Very truly, yours, UNITED BUTTON Co., The witness at a later date filed the following documents: Mr. DANIEL C. ROPER, Washington, D. C. GERMAN-AMERICAN BUTTON Co., MY DEAR MR. ROPER: I am in receipt of the authoritative statements regarding wages in Europe paid by vegetable ivory button factories there located, which I left with you last week. It seems to me we have presented to you a perfect case against change in our duty. We have proven that, first, labor is of more importance relatively in our industry than perhaps in any other in this country; second, we face the cheapest labor in Europe, with wages 25 per cent of ours; third, importations are very substantial, and three times what they were during first years of present tariff; fourth, through excessive competition, foreign and domestic, the industry is on the very "breaking point," 2.73 per cent profit per annum for past two years on actual capital invested. We have also proven much more, and I can not conceive how a member of your committee can suggest reducing our duty. I am, however, writing you this letter because when I spoke to you last week you did not see why we needed a specific duty more than any other industry. Will you not do me the very great favor to read over the brief herewith inclosed? (See brief of Rochester Button Co.) It seems to me we have given you therein 27 reasons for a "combination specific" duty on ivory buttons which can not be answered. We want, moreover, to deny that any one can absolutely translate specific duties into ad valorem equivalents, and the least undervaluation now will truly "swamp" our industry. Assuming, however, that your committee is absolutely opposed to specific duties, you can still give us what we want. Our present duty is in two parts, (a) three-fourths of 1 cent per line per gross, and (b) 15 per cent ad valorem. Now, then, the "specific" portion is not a straight specific like so much per pound. It is in a real way "ad valorem" in its nature. To the extent that price is regulated by size, to that extent the present specific of three-fourths cent per line per gross is levied on the value of the various sizes, and to this extent it differs from any other "specific." Our "specific" may fairly be said to be between a straight specific and an ad valorem for this reason. Since our public hearing we have not called on a single Democratic member of your committee, and I do therefore beg to urge you strongly to help us to secure for our industry the present duty which we have just as it is. HENRY T. NOYES. Very truly, yours, |