Thus giving the foreigner an advantage of 21 per cent‒‒‒‒‒‒ 25 And for your further consideration we submit a comparative illustration showing the difference in cost of production and profit between a foreign car and an American car, citing in this instance the actual make of car and the actual price: Packard 30-horsepower chassis, without tires: Factory cost, without overhead, administration, advertising, rent, or manufacturer's profit.‒‒‒‒‒ $2,320 Fiat 40-horsepower chassis, without tires: New York customs entry value, including manufacturer's profit. 1,600 Add 5 per cent freight and import charges__. $720 800 2,400 Packard margin in which to find profit--- 80 Packard 30-horsepower chassis, without tires: Cost without overhead, administration, advertising, rent, or manufacturer's profit---- manufacturer's profit--- If manufactured in Italy at 60 per cent cost, cost would be.. Profit if manufactured at 60 per cent cost__ 1,600 208 92 MAXWELL BRISCOE MOTOR COMPANY, Mr. HENRY B. JOY AND TARIFF COMMITTEE OF AUTOMOBILE MANU- DEAR SIR AND GENTLEMEN: Conforming to the suggestion made at a meeting of your committee that this company (The MaxwellBriscoe Motor Company) furnishes you with facts and information specifically setting forth its experience, etc., we accordingly give you below information as to our cost of manufacturing, which we are willing you should present to the Ways and Means Committee of the House of Representatives, in order that they may have before them definite facts relating to the manufacture of the moderate-priced automobiles. We manufacture the Maxwell line of automobiles, comprising the following models: Model A. A 10-horsepower, two-cylinder, two-passenger, retailing at $500. Model LD. A 14-horsepower, two-cylinder, two-passenger, retailing at $825. H Model HD. A 20-horsepower, two-cylinder, five-passenger, retailing at $1,450. Model DA. A 30-horsepower, four-cylinder, five-passenger, retailing at $1,750. All above complete with tires. In addition to the above we make various modifications of these same models, which are furnished with more or less equipment, but the above models comprise the real basis of the line. The model A car we are making for the first time this season. We sell it at $450 to the trade-at present it costs us to manufacture $393. We expect, through the development of special machinery upon which we are working and by applying to it certain economies in manufacturing, to be able to reduce its cost about 5 per cent. The model LD we have manufactured for four seasons, having made over 8,000 of them in all. This car retails at $825-our selling price to the trade is $660. Our profit for the past year on a production of 2,552 averaged $86 each on this model. Having, as we say, made this car for four years, our facilities for producing it are complete and our experience thorough. Figures relating to its cost, therefore, may consistently be taken as a good representation of the moderate-priced car, as a class. The cost of the car we itemize in general as follows: Being the cost of LD car as made in America. The labor element in the above cost is based on the following sched ule, which shows our actual wage cost to-day: Factory No. 3, pay roll summary, week ending November 24, 1908. From investigation we learn that the rate of wages in Italy is as follows: In consequence of this difference in conditions as between Europe and America we could produce this car, if we made it in Italy and hired Italian workmen, for the following cost: This, you will note, calculates the cost of material at 70 per cent of the cost as bought in America. We use no foreign material whatsoever and have never, therefore, had occasion to investigate the cost of material if bought in Europe. We have, however, been informed that the average cost of material such as we use in the construction of our automobiles is from 25 to 35 per cent lower in Europe than in the United States. The Ways and Means Committee probably have before them data that gives them complete information on this matter. The labor figures that we present to you are based solely upon what we know to be the difference between the labor cost in Italy and what labor is now costing us in the United States. We present another table which shows what we could produce our model LD car for, provided we did all the metal work-that is, the blacksmith work, the machine work, and the assembly work at Italian labor cost, and shipped the motors and axles to this country and here assembled them into a complete car. Materials bought in Europe___. Labor on parts made in Italy- Total Cost of LD car if made in Europe and assembled in the United States. $218 76 12 20 42 368 If the tariff is levied as a "protective" tariff, then we assume we have the right to expect that such a rate of duty will be established as will cover the difference between what we can produce our goods for in a foreign country and what it actually costs us to produce them in our own country. Therefore, if this is still the theory actuating the Ways and Means Committee in the revision of the tariff, then it is seen that to afford protection in this industry it is necessary that the rate should be at least 51 per cent. We want to call your attention to the fact also that the labor cost of moderate-priced automobiles is greater proportionately than in the higher priced cars, for the material in moderate-priced cars costs less in proportion to the labor than it does in the higher priced cars. For instance, our labor cost is 35 per cent, while our material costthat is, the material entering into the automobile itself-is 54.2 per cent. Take it in the case of a higher priced automobile-for instance, the Packard-the labor cost is 31.8 per cent, while the material cost is 60.5 per cent. The workmen, therefore, engaged in the manufacture of low-priced cars need a protective tariff to an even greater degree than the manufacturer of the higher priced cars. It might not be amiss for me to say here that I have, through the manager of the American Motor Car Manufacturers' Association, communicated with all of its members, and that both as a member of your committee and representing that association, and as chairman of the association, I am authorized to request on their part a retention of at least the present duty. The figures that I give are indicative of the experience of the Maxwell-Briscoe Motor Company only, and are not presented for or on the part of any other concern, but are a compilation of its records solely. My opinion is, however, that they represent the average condition confronting the manufacturers of moderate-priced cars, this being fair to assume, as the Maxwell-Briscoe Motor Company is one of the large producers, which it could not be were it operating under an unfavorable cost. We have understood that the French, German, and Italian manufacturers are preparing to produce large quantities of low-priced automobiles with which to invade the American market. If such is the case, particularly should the present rate be reduced, a complete readjustment of wages in the automobile industry would be necessary, the only alternative being for the American manufacturer to move the whole, or at least a part, of his manufacturing operations to such countries as will put him in touch with competitive labor conditions. We have endeavored in this communication to give nothing but actual facts, as to the proof of which we are willing at any time to furnish documentary evidence in the shape of our pay rolls and workmen's wage vouchers. Yours, very truly, MAXWELL-BRISCOE MOTOR Co., President and General Manager. EXHIBIT F. We take this opportunity to refute the statements made by Mr. C. H. Sherrill, representative of the Importers' Automobile Salon, before your honorable committee on Friday, November 27, 1908. 1. Mr. Sherrill states that 90 per cent of the foreign automobiles arrive in this country in an unfinished condition, and it is necessary to add many machine parts in this country to complete the vehicle. To refute this statement we refer you to the attached photograph, marked "No. 1," showing the so-called naked Fiat chassis as exhib ited by the manufacturer at the Paris automobile show in December, 1907. The hood has been removed, but the car is delivered complete, with the exception of the running board, footboard, and mud guards, and this is the customary trade understanding amongst the majority of the continental makers as to the equipment of a chassis. 2. Mr. Sherrill states that in four years, ending June 30, 1908, of the almost $17,000,000 worth of foreign-made chassis entered at the port of New York alone 90 per cent went to American carriage builders to have American bodies built. We reply to this by stating that in the last twelve months (from November, 1907, to November, 1908) out of 1,533 machines imported at New York alone 900 had foreign-made bodies. 3. Mr. Sherrill states that the reports of Capt. Godfrey L. Cardin are valuable because they show that the Fiat Company has imported $200,000 worth of American machinery and the Hotchkiss Company $175,000 worth of machinery, and we volunteer to supplement this statement by adding another $1,750,000 worth of up-todate American automobile machinery in use by the continental manufacturers at present. We agree with Mr. Sherrill that Captain Cardin's figures are valuable, because they bear out our contention that, with skilled labor costing us two and one-half times as much here as it does abroad, the very fact that they employ the same up-to-date machinery as we do here must prove to your committee the necessity for protecting the wages we pay. 4. Mr. Sherrill forgot to state that French motor-car manufacturers, which until two years ago led the world in the production of the motor vehicle, have become aware of the fact that American tool machinery is being imported to the Continent, and have within a year organized a machine-tool manufactory for self-protection. For full particulars regarding this we refer your committee to the Special Consular Reports, Volume XI, page 17 (Department of Commerce and Labor). The object of this factory, ably stated by Consul-General Mason, of Paris, is to have French manufacturers economize at every point. He also states: This will create the most dangerous competition that the machine-tool makers of America have ever been called to meet in France. The import duty on such machinery ranges from 17 to 70 francs per 100 kilograms ($3.28 to $13.51 per 220 pounds), according to weight of machine, but the French tariff is a flexible enactment and can be modified to meet any existing or future relation between home supply and actual demand. 5. Mr. Sherrill stated that the difference between the scale of wages abroad and in the United States is from 30 per cent to 33 per cent for the same grade of work-that much lower there than here. Our answer to this is found in Exhibits C and D, and the figures stated there have been compiled by Mr. James M. Carples, our own expert, who has visited the different factories abroad, and your committee will, we think, find them conservative when compared with the reports of the United States special and confidential agents, who may have from time to time submitted information on this subject. We refer your committee to a clipping from the New York Times of October 18, 1908, of an article written by Mr. E. R. Hollander, the vice-president of the Fiat Automobile Company of America, who |