PARAGRAPH 324-SHIRTS.

Second, in the matter of labor, we find our average rate of labor, as compared with labor abroad, is something like this: We are paying $9.62 per week to those who are operating our factories, our wage earners. In England the average is $3.75 to $4 per week. In Germany the average is $2.14 to $2.42, and in Japan the average is from $1.77 to $2.44.

We have a schedule here which I will not attempt to read, of the individual kinds of operators. I will ask if we may have the privilege of filing some of this matter with you in the near future?

The CHAIRMAN. You may do so.

Mr. ELLS. The rate of wages in Troy has increased in 20 years 30 per cent. In five years it has increased 15 per cent.

We have another condition which is very important, having a bearing on wages, and that is that we have to run a certain limited number of hours; that we have to have certain definite conditions in our factories. Gov. Sulzer, of New York State, where many factories are located, just now has had a hearing of the labor leaders, who have asked the abolishment of female labor and all things of that kind, with which we have to contend.

We claim there is a better product offered at a given price on shirts to-day than ever before in the history of the industry. I point to the shirt sales in evidence on Pennsylvania Avenue and everywhere else to-day. Twice a year these shirt sales are in progress, which come out of the profits of both the retailers and very largely the manufacturers, showing that the consumer certainly does not require anything further to make the competition broad enough and keen enough to give him the advantage of a proper garment at a proper price. There is no necessity for anything of that sort.

There are many other things I would like to say, but in deference to the chairman I want to conclude as quickly as I can.

First, we believe, sir, that the present rate of duty is not a prohibitive rate. That is evident.

We believe it should be maintained; that if it is not maintained, the shirt manufacturers, who, to-day and for several years past, by reason of these conditions which have grown up have had a very hard time, and who, if my information is correct, and I believe it to be correct, are barely holding their own in very many cases, will be driven out of business entirely. It will be a great hardship and it will be impossible for us to go ahead. We know that we can not compete with anything like the foreign labor prices nor the prices at which the foreign product is now being brought into this country.

This one shirt which I now hold in my hand has been bought within a week, being imported from Japan, at a price that lays it down here at $31.88, and the best cost we have been able to figure on it, without any allowance for profit or for selling expenses, is $34.46, or $2.50

more.

We also beg leave to suggest that whatever the duty may be, the plan which is now adopted in Canada of requiring certification with every import that the prices at which the import is named are no less than the prices in the home country for home consumption, should be put upon the invoice.

The CHAIRMAN. In other words, you favor a dumping clause?
Mr. ELLS. Yes, sir.

PARAGRAPH 324-SHIRTS.

The CHAIRMAN. You do not think the dumping clause would work any injury to your industry by reason of some other countries adopting it in the nature of reprisal, do you ?

Mr. ELLS. No, sir; there is not enough goes out of the country.
The CHAIRMAN. Your time has expired.

Mr. Ells's brief is as follows:

BRIEF OF SHIRT MANUFACTURERS.

COMMITTEE ON WAYS AND MEANS,

House of Representatives.

GENTLEMEN: The undersigned, a committee representing a substantial part of the shirt-manufacturing industry, present the following brief in regard to the tariff rates specified in paragraph 324 of Schedule I of the tariff act of 1909, which provides for the "imposition of an ad valorem duty of 50 per cent upon clothing, ready-made, and articles of wearing apparel of every description, composed of cotton or other vegetable fiber, or of which cotton or other vegetable fiber is the component material of chief value" (this being the paragraph under which manufactured shirts are dutiable).

This committee represents substantially that part of the industry which manufactures laundered shirts, retailing at prices ranging from $1 upward.

We recommend that no material change be made in the rate of duty imposed by the aforesaid section, and for the following reasons:

The entire shirt industry, according to the Thirteenth Federal Census, represents an investment of upward of $44,000,000, comprised in 770 different manufacturing establishments spread over the entire United States, employing upward of 48,000 wage earners and turning out a product of the value of upward of $92,000,000 per

annum.

The committee represents a very substantial part of that industry in respect to capital investment, number of wage earners, and volume of product.

Our industry is upon a decidedly competitive basis. There is no combination, trust, monopoly, or association of any kind among these manufacturers, and if this brief is in part unsatisfactory as to statistics it is attributable to the fact that no organization exists among these manufacturers whose plants are widespread over the entire country, and therefore it is impossible to secure such statistics, more particularly since the committee which presents this brief was appointed at a meeting held only two weeks prior to this hearing.

Point I.-The industry is upon a highly competitive basis.

For the information of your committee we have secured the data contained in Schedule A hereto annexed and made a part of this brief, from manufacturers whose product we deem representative of our industry. It shows the cost of production of a typical grade of shirt most extensively sold to the consumer. It gives the net selling prices thereof, as well as the profit realized thereon. A perusal of that schedule must necessarily convince your committee that any industry, the operations of which are so widely distributed and comprising 800 plants, each under separate and independent management and control, must result in the keenest sort of competition. In fact, so active and severe is this competition that during the last 10 years the quality of the product has been materially advanced while the price has remained stationary.

The business is now meeting foreign competition; and the latest statistics, especially of increases in importations, indicate this fact.

The industry is one readily susceptible to increase of competition, because it is feasible for men with small capital to engage therein, since neither extensive premis s nor complicated machinery are requisite for turning out the product, which is evidenced by the large increase in the number of manufacturers.

In our second point we shall advert to the vast discrepancy in the cost of labor in this industry here and abroad. With this reference in mind, we draw attention to the fact that this lower cost of production abroad has thrown upon the American market a quantity of shirts, which is not a mere matter of apprehension for the future, but an actual present condition, demonstrated by the enormous growth of importations during the last three years. During the fiscal year ending June 30, 1910, the total imports of cotton wearing apparel dutiable under paragraph 324, amounted to $1,838,356; in 1911, these figures were more than doubled, the imports amounting to $3,983,030; and in 1912 they were $3,635,393. Not all of these importations were shirts, and unfor

PARAGRAPH 324-SHIRTS.

tunately there is no way of telling just how much of them represent shirts, because the Government statisticians do not segregate the different kinds of merchandise. We have good reason to know, however, that a part of this great increase must be due to the large importations of men's shirts, for, during the last two years, we have encountered vast quantities of foreign-made shirts displayed for sale in the dry goods and department stores. In view of the desirability and necessity of furnishing your honorable committee with precise figures, it is particularly unfortunante that we can give only the totals for the paragraph (excluding corsets), but inasmuch as the Government does not separately report the importations of shirts, and inasmuch further as there is no central association or bureau in our trade to aid us in securing these quotations, there is no way in which we can segregate them.

At the present time the competition in men's shirts comes from Austria, England, France, Germany, and Japan. Data showing the exportations from those countries to the United States are not available, but through the courtesy of the Japanese consul general in New York, we have secured some general statistics taken from the report of the treasury department of Japan, which have a great, and for the American shirt manufacturer, a sinister significance.

These figures indicate a tremendous growth in the export of shirts manufactured in Japan, and they are as follows:

1910... 1911..

1912.

.dozen shirts.. 1, 391

..do.... 2, 117 ..do.... 7, 601

These figures in themselves, of course, would not represent a very extensive inroad upon the shirt industry in this country, but they are exceptionally significant for they show that the manufacture and exportation of these shirts from Japan in creased nearly 600 per cent in three years. Incidentally, it may be well to refer to the fact that from the same country, and according to the same report, the exportation of collars and cuffs increased 150 per cent during the same period.

If this progression be possible in a country where the industry is practically in its infancy, what are the domestic manufacturers to anticipate in the event of a reduction of the duty, but a tremendous influx of shirts from foreign countries where the industry is already well established, and from Japan, where it is making such great strides?

Competition by the domestic manufacturers with exportations of that type would be utterly impossible, and could only be met by reductions of wages so radical and sweeping in character, as to be practically out of the question. It must be equally plain that in view of the part that machinery plays in the production of these shirts, and in view of the deftness of the foreign workers, any reduction in the duties on cotton cloths would not justify a substantial reduction in the duty on manufactured shirts.

We do not wish to be understood as objecting altogether to foreign competition, nor as seeking a tariff which would eliminate it. On the contrary, we welcome competition from foreign countries, and are getting it now in increasing quantities, but we must be kept upon a parity with the foreign manufacturer in the cost of production. For the convenience of your committee we append hereto Schedule B, a table showing the importations of cotton wearing apparel such as are dutiable under the present paragraph 324 from 1894 to 1912.

It is probably needless to remind your committee that the cotton cloth, pearl buttons, and kindred materials, which are constituent parts of a manufactured shirt, are more cheaply procured in the countries named, quality for quality, than in the United States.

The domestic consumer has always shown a tendency to give preference in his purchases to articles of apparel stamped or marked "imported," probably on the groundless belief that such a mark implies superiority in quality, and this human weakness would be a decided factor in favor of the foreign manufacturer in the sale of his merchandise. The domestic competition in the last five years has placed the industry on such a basis that, taken as a whole, and with but few exceptions, it has not been remunerative.

Point II.-The difference in the cost of labor to the domestic and the foreign manufacturer is one that can only be equalized by the maintenance of the present tariff. In the matter of original equipment-that is, the purchase or leasing of factory sites and the construction and equipment of factory buildings-there is entailed upon the domestic manufacturer a far greater investment than upon the foreign manufacturer, and this overhead expense is being increased from year to year, owing to the enactment of various State laws designed to improve the conditions of labor, with which we are only too pleased to comply, since in most of our institutions these

PARAGRAPH 324-SHIRTS.

changes have been voluntarily made for the express purpose of improving the working conditions of the wage earners.

We are subjected to stringent laws regulating child labor and the hours of employment of women (of which we make no complaint), but they constitute, nevertheless, a considerable financial burden upon the American employer.

Furthermore, the foreign countries named have the advantage of an apprenticeship system, whereby they are enabled to secure the services of apprentices practically free, while in America apprentices, who are called "learners," are paid in a proportion equivalent to the payment received by skilled operatives.

Conceding as we do the greater efficiency of American labor, yet in the manufacture of shirts it does not make up the inequality which we shall exhibit by our tables, for the same machinery is used abroad and here, and the deftness in this class of work of English, German, and Japanese work people is well established. We therefore seek to impress upon your committee the necessity for preserving the equation representing the difference in the cost of labor.

The average cost of labor which enters into the manufacture of a shirt represents 40 per cent of the total cost thereof. So that it will be observed that labor is the largest constituent item in the determination of cost. Therefore, in attempting to adjust the tariff upon a competitive basis for the purpose and with the intent that the American and the foreign manufacturer shall be placed upon a parity in the domestic market we must take this equation into consideration.

The character of labor employed in this industry may well be described as almost entirely "skilled labor," and the following table represents a comparison of the rate of wages paid to operatives in this industry in America and in competitive countries: Weekly rate of wages: America, $9.62; England, $3.75 to $4; Germany, $2.14 to $2.42; Japan, $1.77 to $2.44.

NOTE. The averages both here and abroad include male and female labor. The American average shows an increase of nearly 20 per cent in the last decade. The Japanese average includes cost of maintenance.

A report submitted by the board of trades to the British House of Commons shows that the average weekly wage for those working full time in the "shirt, blouse, underclothing, etc., industry" during the last pay week in September, 1906, was as follows:

This makes the average rate of all these classes of employees in the United Kingdom at the period named 14 shillings 2 pence per week, equivalent to $3.42. While the Board of Trades Labor Gazette, December, 1912, shows that returns from shirt and collar manufactories in England, Scotland, and Ireland, employing 6,313 workmen in factories (in addition to out-workers), and paying £4,277 in wages in the week ending November 23, represented a decrease of 1.1 per cent in the amount of wages paid compared with the month previous, and of 2.7 per cent compared with a year ago-their tabulation being as follows:

This shows an average wage not considering out-workers, of $3.30 per operative. Even more significant, and may we say, appalling, is the account of the Japanese industry of shirt and collar making for export, reported by Consul General Thomas Sammons, of Yokohama, in the Daily Consular and Trade Reports, No. 26, of January 31, 1912, which we herewith set forth in full:

PARAGRAPH 324-SHIRTS.

"The manufacture of shirts in Japan for export is increasing and is considered to be very profitable. A good quality of shirts made to order sells at from $16 to $20 a dozen. Quantities of material are imported for the purpose of manufacturing shirts for the export trade, utilizing Japan's cheap labor. Rebates of the import duties on the raw materials are granted on such manufactures. In some instances foreign made shirt materials are very cleverly imitated in Japan.

"Male Japanese shirt and collar makers, including cutters, are paid $7.50 to $10 per month, while female workers receive $5 to $6 per month. Food and lodging are also provided, the estimated cost being $2 to $3 per month. It is assumed that each person consumes during the year 1 koku or about 5 bushels of rice. A koku of rice at prevailing high prices, is worth about $12. The cost of the other food furnished is estimated at twice that of rice.

"In addition to board and lodging furnished to the shirt and collar makers who are employed in the factories, a daily free bath is provided, and a religious service is customarily arranged for once a month, this being followed by an entertainment of some kind, frequently including a moving-picture exhibition."

"HOURS OF LABOR-CHILD LABOR.

"These laborers work about 57 hours each week, with an average of three holidays in each month, usually the 1st, 15th, and 28th, in addition to the usual national holidays, 10 or 12 each year. Thus, without ceasing to work on Sundays, these shirt and collar makers have about 50 holidays during the year. The average working day is 9 or 10 hours, from 8 in the morning to 6.30 or 7 in the evening; 30 to 45 minutes are allowed for luncheon, with an additional half-hour for the serving of tea in the afternoon.

"Under the new factory laws of Japan, children who are employed in factories must have had 6 year's schooling. It is estimated, therefore, that with the school age beginning at 6 or 7, children would not be admitted, under this law, to factories before the age of 12 or 14. However, in the shirt and collar industry much piecework is turned over to families rather than to individual workers. While it is estimated that the earnings of a family engaged in this work will amount to between 35 cents and $1 per day, it is practically impossible to secure definite information showing how much piecework is done for a certain sum of money. Most of the shirt manufacturers regard data of this kind as trade secrets.

66

As the shirt and collar makers in Japan are paid a higher scale of wages than cottonmill employees, the manufacturers have no difficulty in securing all the help they require.

With a rapidity of growth in this industry which is possible only in such countries as Japan, where labor is ridiculously cheap, and with the industry well intrenched in the other foreign countries, where it has been longer established, domestic manufacturers in the face of a substantial reduction in the tariff will be compelled to face an attack which they are not prepared to meet, and which, in fact, they can not meet, except as the result of a stringent reduction in the wages paid to their operatives-a measure both inequitable and impossible, and visiting upon their employees the evil results which might flow from their choice of the other alternative, namely, a shutting down of the factories engaged in this industry.

If, therefore, your committee were to reduce the duty upon raw materials which enter into the manufacture of these articles, and if we disregard entirely the increased cost of equipment and of general overhead charges, and selling expenses in the United States, as hereinbefore referred to, nevertheless, the American manufacturer can not be placed upon a basis of equality of competition with the foreign manufacturer, because of his utter inability to secure labor, the chief component cost of shirt manufacture, at an equivalent price, unless the tariff upon the manufactured article is maintained at substantially its present rate.

The reduction of the tariff upon the raw material and the substantial maintenance of the tariff upon the manufactured article would probably enable the domestic manufacturers in such cases where they are justified, either in increasing the quality of the product furnished to the consumer by using the imported material when it is better than the domestic and procurable at the same price, or in reducing the price of the manufactured article to the consumer, by whatever sum may be saved as a result of the competition in raw materials, but the labor equation will forever remain. In spite of the fluctuations in the prices of raw material, and in fact the gradual increase in the prices thereof, and the rather steady increase in the cost of labor and other expenses, the fact remains that both wholesale and retail prices of our article have not advanced, and that the consumer is to-day receiving greater value for his money than ever before in the history of the industry.