imports three or four times as much material as she did at that time. Now, that is the difference. You should not make a comparison between the silk industry in England and the cotton industry in England. In the cotton industry, that was not an industry organized on the Continent, which was able to produce material at a cheaper rate and employ cheaper labor than England did. Mr. HARRISON. So that in your opinion the difference in the wages that are paid to the laboring man makes the cost of production of all kinds of silk goods in this country higher than abroad? Mr. CHENEY. Unquestionably. Mr. HARRISON. Then how does it come that we have such a large export trade in silks? Where do they go? Mr. CHENEY. The only exporting the United States does in silks are goods which are sent to ports close at hand, because they are novelties, or something which can be delivered right on the spot when it is wanted, and not because it is sold at a lower price. Mr. HARRISON. Into which ports are they shipped? Mr. CHENEY. Chiefly to Canada. Mr. HARRISON. Chiefly to Canada? Mr. CHENEY. Yes. Mr. HARRISON. And in Canada they must compete with the French goods? Mr. CHENEY. They do not compete. The articles which go there are not competitive articles. They go there either because the market is bare of them, or they are something which they can deliver quickly, before they could be gotten from the other side. Mr. HARRISON. Do you know what the size of the export trade is? I would like to read here, for your benefit, the figures given for the last three years. In 1910 there were $1,097,593 worth of manufactures of silk exported from the United States; in 1911 there were $1,538,543 worth, and in 1912, $1,992,765 worth. Mr. PAYNE. Those are all manufactured silk? Mr. HARRISON. All listed as manufactures of silk. Mr. CHENEY. I will tell you our own experience in attempting to export silk. I think I told you something about the foulard business, in which, if we have anything left over, we have to sell it next year for less than it cost to produce. Mr. HARRISON. That is exactly the attitude of all American manufacturers in the export business; but I will call your attention to the fact that the export trade has grown more than 50 per cent in the last two years, and in the current year it equalled nearly 8 per cent of the imports, which you described as being so large. Does not that look to you as if there were certain classes of silk goods which can be manufactured cheaper in the United States, and sold in Canada in competition with French and Japanese silk goods, and sold cheaper, or they would not have found any market? Mr. CHENEY. No, sir. Mr. HARRISON. Now, if that is so, would it not be worth while to inquire whether the cost of production of certain kinds of silk is not cheaper in the United States than in Japan or France? Mr. CHENEY. I know it is not. The question is simply one of the proximity of the market; not of cost or price. Mr. HILL. Is not that a question of noncompeting products, such as ladies' dresses, made up, known as manufactured goods, which are all included in the figures the gentleman has given? Mr. HARRISON. Would not those same goods be noncompetitive if there was a market in this country under free trade? Mr. CHENEY. There are always novelties in silk goods, and if a man has a novelty which is wanted at the moment he can sell it. Mr. HARRISON. Is 10 per cent of the whole trade a novelty trade? Mr. CHENEY. I do not know, sir. I can not say. Mr. HARRISON. Well, why should you need to fear imports from abroad if it is a question of novelties? Your ingenuity would induce you to supply novelties to the American market, and you do not need to fear the foreigner in that regard, do you? Mr. CHENEY. We would have to double our ingenuity. Mr. HARRISON. Well, is it not true in the cheaper grades of silk goods that the American manufacturer can manufacture them cheaper than the manufacturers of any other nation, and are manufacturing them cheaper, and are shipping them abroad and underselling the foreign manufacturers? Mr. CHENEY. No, sir; it is not true. It is not true in any single instance I know of. We have tried it over and over again ourselves. We have just been through an experience of the kind, where we sent a whole line of samples of practically everything we make to some gentlemen who said they could create a considerable business for us in Mexico. They said the question of whether they were this year's styles in the United States had nothing to do with it; that they could, nevertheless sell them down there, and show us a profit on goods that we would have to sell at a loss here. Well, they took them to Mexico, and after having canvassed the market very thoroughly, they said they could not sell any at all for the cost of the labor and materials in them. Mr. HARRISON. Have you examined the report of the Tariff Board upon the other textile schedules ? Mr. CHENEY. I could not say that I have made a very exhaustive examination of it; no. I have it in my possession, and that is about as much as I could say. Mr. HARRISON. If you had read the report of the Tariff Board upon Schedule K you perhaps would have been struck by the statement at two places in the report that in the United States the high wages are coincident with a low cost of production. Now, the woolen-trade. manufacturers were making the same statements which you are, but after examining into their statements the Tariff Board found that the high cost of labor was coincident with a very low cost of production, and it may be that an investigation of your industry would disclose the same condition. Mr. CHENEY. We are the only firm in the world that make practically all kinds of silk goods. We make pretty nearly the whole range-dress goods, decorative goods, upholstery goods, ribbons, neckties, and laces, both spun and real, and we have yet to find a single article that we can make here as cheaply as it can be made in the nearest market of the world to our business. Mr. HARRISON. Some manufacturers found at least $2,000,000 worth of business last year. Mr. CHENEY. No, sir. Mr. HARRISON. I am only taking the Government figures; of course, the Government may be mistaken. Mr. CHENEY. You assume that those were sold because they were cheaper. I assume that they were not sold because they were cheaper, but because they were articles which that market did not have from other sources, or because they were articles which could be gotten quicker from this source than any other source. Now, there is not, in the silk industry, any advantage in the matter of machinery. In a great many other industries that is not true. To-day the fastest running machinery that is invented that is in use in the world is French machinery. Mr. PAYNE. Did you examine the Tariff Board's report on the woolen schedule enough to find out that they ascertained the cost of labor on, say, a thousand yards of goods, of different kinds of goods, and that they found that the cost per unit was from two times upward more here than abroad? Mr. CHENEY. I am afraid, Mr. Payne, that I am not an authority upon that. Mr. PAYNE. You do not remember that? Mr. CHENEY. No; I have not had time to examine it carefully. Mr. PAYNE. Of course, we have heard a great deal all our lives about going after the markets of the world. It has not come from this side of the House, suflicient to say, and under this woolen schedule we appear to have been going after the markets of the world, and increased the exports up to about $3,000,000-two or three times as much as they were, under the present law-the silk schedule. Would it not occur to you that that was an argument in favor of continuing the present silk schedule on silk goods? Mr. CHENEY. It would, if it were true, but I haven't any idea that we can ever go after the markets of the world. Mr. PAYNE. Well, if it is desirable to have the markets of the world. Of course, there are other gentlemen who can argue that more strongly than I. Mr. CHENEY. No, sir. We have no hope of going after the markets of the world. Mr. HILL. I have read the Tariff Board's report on the silk schedule, and I have it in mind distinctly now, and the paragraph to which the gentleman from New York refers has nothing to do with the case. It was just this. I studied it particularly, because I understood the national Democratic committee furnished the gentleman with several questions to ask me at a campaign meeting during the campaign, and that was one of them. That refers to the examination of the respective efficiency of labor in 70 different woolen mills in this country, and the board reported that so far as the facts were shown they indicated that in this country the most efficient men were paid the highest rate and got out the greatest production. Now, that principle is a fundamental one, and just as true of your competitors on the other side as it is here. It has in no sense any reference to a comparison between your most efficient men and the most efficient men of your competitors in Italy. It is simply as to the results of the investigation of these 70 mills here. That is all there is to it. The CHAIRMAN. I hope you gentlemen will confine yourselves to the discussion of this silk schedule. Mr. HILL. Mr. Chairman, I felt in view of the question having been put now, and having been formerly put by the National Democratic Campaign Committee in the last campaign, that it was a good chance to answer it. Mr. FORDNEY. In the manufacture of any grade or quality of silk, what proportion of the cost of production is the cost of labor? Mr. CHENEY. You have asked me a question which it is almost impossible to answer, because it varies all the way from 30 to 80 per cent. Mr. FORDNEY. The labor is a very large proportion of the cost, is it not? Mr. CHENEY. Yes; it reaches as high as 80 per cent of the cost. Mr. FORDNEY. Well, where the cost of production is 80 per cent labor, and where labor, as you have described, in Japan and in China, is ten or twenty times cheaper than it is here, it would be utterly impossible for you to make that grade of silk without protection, would it not? Mr. CHENEY. Why, we would not attempt it. Mr. FORDNEY. To offset that cost of labor, where labor is your chief cost Mr. CHENEY (interposing). There are to-day in Japan mills being built equipped with the very best American and European machinery, and Japan, according to her last Government report, is weaving more silk upon imported looms than they weave upon their old-time looms. Mr. HARRISON. Did you ever hear of the city of Akana, in Japan? Mr. CHENEY. I can not say that I did. Mr. HARRISON. Well, one of my colleagues visited Akana, and there he found one of the largest cotton mills he had ever seen, and it was shut down, and when he asked them why it was not in operation, they said they could not stand the competition from Fall River. Mr. CHENEY. That is lucky for Fall River. Mr. KITCHIN. You say that labor constitutes the greatest part of your product; represents the greatest part of the cost of your product? Mr. CHENEY. I do not like to try to answer the question for the reason I am afraid it will be applied to specific cases. If you apply it to specific cases, anything I say will be wrong. Mr. KITCHIN. You said about 80 per cent, I understood. Mr. CHENEY. That is the maximum. I do not mean to be quoted that that is always so. Mr. KITCHIN. I ask you if the census report does not show that a smaller part of the cost of finished product of silk goods is labor than substantially any other industry in this country? Do they not give less than 20 per cent of the value of the finished product of silk as the cost of labor? Mr. CHENEY. I endeavored to explain that some time ago, sir; that you will see on the table, where they give you that labor, another item. which, so far as I remember, is about one-third of the amount given for labor of contract work. Now, contract work is practically labor. On the next page you will find that there are deductions of $20,000,000 on account of duplications. Mr. KITCHIN. That goes with the labor-the labor cost? Mr. CHENEY. No, sir. Mr. KITCHIN. The amount of the labor cost, $38,000,000, includes that. Mr. CHENEY. No, sir. Mr. KITCHIN. Well, of course, if $20,000,000 is added in as a duplicate, then the labor cost of a duplicate would be Mr. CHENEY (interposing). The proportion of labor to the materials is varied very greatly when you take out of that the materials which are not used in the industry, or are duplicated in it. The CHAIRMAN. If Mr. Kitchin will let me interrupt him just a monmet, in the census report, the way they ascertain this result is that they give as furnished them by the manufacturer, the total amount of production of the mill-not contracts, but of the milland then they give the total labor cost, and then give the number of men employed. Now, from those figures they ascertain the percentage, and they give the total amount paid for labor, and dividing the total amount paid for labor into the total production of the mill, they ascertain the percentage of the labor cost. Now, how could the contract figures enter into that, because that is outside of the mill production? Mr. CHENEY. No, sir; that is largely a labor cost, that contract work. In addition to that, the dyeing, the printing, and the finishing industry, which is practically all labor cost, is not reported in that census at all, although it is reported in the cost of the finished product. In addition to that, there are reported in those values there, as a part of the cost of the goods, all of the silks that have been used in other trades; those that went into woolen manufacture and into the manufacture of cotton goods, into the manufacture of braids, and electric wires, and all kinds of other things. You can not draw any kind of conclusions from those census figures that will not be erroneous. Mr. KITCHIN. Well, it is just what you manufacturers swore to the census it cost you. Mr. CHENEY. But you have not got it all there. Mr. KITCHIN. And they have it all. They have figured it all. Mr. KITCHIN. Well, does it take very skilled labor, as a general proposition, in the manufacture of silk goods? Mr. CHENEY. Yes, sir. Mr. KITCHIN. Well, how much labor do you employ in your mills? Mr. CHENEY. About 4,000. Mr. KITCHIN. Well, how much is the average wage now? Mr. CHENEY. It is $1.90 a day. Mr. KITCHIN. $1.90 a day? Mr. CHENEY. Yes, sir. Mr. KITCHIN. Will you average that, not counting your clerical force and your salaried officers? Will it average $1.90 a day? Mr. CHENEY. That is the average of the people who are paid by the day without including the clerical force or without including any salaried persons. Mr. KITCHIN. Now, how many women and how many children are employed in your mill? Mr. CHENEY. I have not the figures at hand, but there are approximately half men and half women. Mr. KITCHIN. How many children? Mr. CHENEY. We do not employ anybody in our mills who is over 15 years of age. Mr. PALMER. Under, you mean? Mr. CHENEY. Yes; under. |