Mr. BOUTELL. What do we do in the way of exporting automobiles? Mr. SHERRILL. Our cheaper grades for instance, the Ford-is being largely sold in France, I understand.

Mr. BOUTELL. How is it in other countries?

Mr. SHERRILL. And in nearly every other country of Europe also. Mr. BOUTELL. Is the Ford a good car?

Mr. SHERRILL. I think it is.

Mr. BOUTELL. What is the principal one we export?

Mr. SHERRILL. The Ford is the principal car we export, I think. Mr. BOUTELL. What is the export price on the Ford?

Mr. SHERRILL. I don't know.

A BYSTANDER. Twenty per cent off the list.

Mr. GAINES. Are not these foreign makes of automobiles sold cheaper in this country than they are abroad?

Mr. SHERRILL. Oh, no.

Mr. GAINES. Then, is there not a discount greater in this country than in the foreign country?

Mr. SHERRILL. Well, it is a different kind of a car; they do not make the same kind of a body.

Mr. GAINES. As a matter of fact, is there not a difference of between 15 and 20 per cent in the discount allowed the dealer in the country where the cars are made and in America?

Mr. SHERRILL. The answer to that would be as many different answers as concerns I represent in this association. I happen to know in the case of the Hotchkiss Company that that is not true. Of course it is a trade matter

Mr. GAINES. I do not expect you to tell about any particular company, but is it not a fact that there is a larger discount allowed to the American dealer than the dealers in the countries where the same cars are made?

Mr. SHERRILL. In the case of the Hotchkiss car the discount given to the dealer in Paris who sells the car is the same as the discount given to the dealer in New York.

The CHAIRMAN. If I understood you, the unfinished car here is $1,600, on which there is a duty of 45 per cent, or $675, and that car is sold for $6,000?

Mr. SHERRILL. Yes, sir.

The CHAIRMAN. So that Uncle Samuel gets about 11 per cent of duty on a car for which the consumer pays $6,000?

Mr. SHERRILL. Yes; partially due to the high price of bodies in this country

The CHAIRMAN. That is true, is it not?

Mr. SHERRILL. If you complete the answer

The CHAIRMAN. Well, complete the answer.

Mr. SHERRILL. The answer is that the rest of that money is divided up so that the automobile importer here makes a small and reasonable profit and the rest goes to body builders, which are very expensive in this country, and to other American businesses.

The CHAIRMAN. He makes 30 per cent profit?

Mr. SHERRILL. No; about 7 per cent. I said when the total got to about $4,200, then there still remains to be paid all his selling charges. The CHAIRMAN. But his profits are $1,800?

Mr. SHERRILL. No; because out of that profit would come his insurance and office expenses, and so on

The CHAIRMAN. That machine is $1,800

Mr. SHERRILL. You have to pay the agent to sell them.
Mr. COCKRAN. What do you pay him?

A BYSTANDER. About 15 per cent.

Mr. SHERRILL. About 15 per cent.

Mr. COCKRAN. You say that 15 per cent is the cost of selling?
Mr. SHERRILL. Yes.

Mr. COCKRAN. Fifteen per cent of the $6,000?

Mr. SHERRILL. Yes; that is what he gets, on the price he gets for the car.

Mr. COCKRAN. There is a selling price fixed?

Mr. SHERRILL. Yes.

Mr. COCKRAN. And he gets 15 per cent on that?

Mr. SHERRILL. Yes. Further than that, you have got to consider insurance and office expenses.

Mr. CLARK. If you figure much longer, you will bring that fellow out in the hole.

Mr. SHERRILL. That is just where we have got him. [Laughter.] Mr. DALZELL. Does the body include the wheels?

Mr. SHERRILL. Yes; but not the tires.

The CHAIRMAN. I received this telegram from Mr. Denvy:

Am requested by the Ford Automobile Company, the largest makers of automobiles in the world, to protest against the reported proposition to raise the tariff on automobiles, and to ask for them a hearing before final action is taken on the subject. They are opposed to increasing the tariff on automobiles.

Mr. SHERRILL. That is another American industry.

The CHAIRMAN. Did you get that same rumor, that the tariff is to be increased on automobiles?

Mr. SHERRILL. We did not get a rumor, but we got something that possibly some of you gentlemen got. We got a copy of a letter that was sent out confidentially by this association, inclosing another letter which they hoped the receiver would find it convenient to sign, or else sign one similar to it. That contained some ideas which made us fear that the automobile manufacturers were going to try to have the duty raised.

Mr. UNDERWOOD. Will you put that in the record?

The CHAIRMAN. I want to say that I have not received any such communication from anybody. Do you not think we had better have them filed and not printed? When is that dated?

Mr. UNDERWOOD. I wanted it to go in the record. Before the winter is over these different concerns will be coming in here. Mr. SHERRILL. These do not seem to be dated. month ago.

It was about a

The CHAIRMAN. I have not received anything. Neither has any member of the committee.

Mr. SHERRILL. I would like to put into the record

The CHAIRMAN. Just file it with the clerk.

Mr. SHERRILL. One is a letter marked "Important, confidential," and the other is a letter marked "Basis of letter to be sent to your Board of Trade," and is headed, "To the Chamber of Commerce or Board of Trade."

The CHAIRMAN. Who signs it?

Mr. SHERRILL. The association signs the first letter.
The CHAIRMAN. What association?

Mr. SHERRILL. The American Motor Car Manufacturers' Association.

The CHAIRMAN. What interest have they-Oh, they want to raise the duty?

Mr. SHERRILL. Yes; or they want to have it kept where it is. But I have here the original letter, which I would be glad to exhibit. This I put in is merely a copy.

BRIEF SUBMITTED BY THE ITALIAN CHAMBER OF COMMERCE OF NEW YORK CITY RECOMMENDING A REDUCTION OF DUTY ON AUTOMOBILES.

203 BROADWAY, New York, November 25, 1908.

Hon. S. E. PAYNE, M. C.,
Chairman of House Committee on Ways and Means,

ittee

Washington, D. C.

HONORABLE SIR: Inclosed we have the honor to forward to this honorable committee a memorial of this chamber recommending a reduction of the present duty on automobiles covered by Schedule C, Miscellaneous metals and manufactures of, paragraph 193.

This chamber trusts that said memorial will receive the attention of the honorable committee which you so competently preside, and will be pleased to furnish any further information you might desire on the subject, regretting the inability to send a special representative for the hearing.

Very respectfully,

E. MARIANI,
Vice-President

Italian Chamber of Commerce of New York.

COMMITTEE ON WAYS AND MEANS,

Washington, D. C.

NEW YORK CITY, November 25, 1908. GENTLEMEN: The Italian Chamber of Commerce in New York submits respectfully to this honorable committee the following recommendation and arguments for a decrease of the duty on automobiles:

The present rate of 45 per cent ad valorem on automobiles was established when this latest of modern means of conveyance was yet a novelty, and its use, on account of much higher cost, exclusively confined, we may say, to the classes of most affluent means, and when the importation and the domestic manufacture of this commodity was far from the important position it has attained to-day. This rate will be recognized as decidedly too high under the present conditions, when the use of the automobile is becoming daily more extensive and finds its patronage not only among the wealthy and sportive classes, but also among people of more moderate circumstances.

The almost astonishing development in the manufacture of these machines during the last few years, due to a demand which overtaxes in many cases the productive capacity of the manufacturing plants, and the remarkable increase in the importation of automobiles for home consumption, which reached, in fiscal year ending June,

1907, the number of 1,100, valued at $3,923,634, with a unit value of $3,566, against an exportation of 2,862 machines, valued at $4,890,886, with a unit value of $1,709, shows that the automobile is growing daily into more popular use, and from the domain of luxury, to which it was confined in its earlier days, has now entered that of usefulness and of more general utilization. That it is ultimately destined to supplant the ordinary means of conveyance by animal traction may be taken as a foregone conclusion, the time when this desirable consummation shall have taken place being within commensurable distance, and its earlier or later realization depending upon the ability of manufacturers to place on the market machines at such moderate cost as to render this desirable substitution economically possible. An argument this, which seems by itself sufficient to substantiate a plea for a lower duty, in order to maintain as wide a field of supply as possible.

From the unit cost above stated of American machines exported it is apparent that Americans can manufacture automobiles, pay good wages, and still make a reasonable profit at a much lesser figure than foreign manufacturers, and that they are thus able to undersell the latter not only in the United States, but in foreign markets as well.

In no other country is the material entering the manufacture of automobiles-viz, steel, iron, brass, wood, leather, rubber, glass, etc.cheaper or as cheap as in the United States, and this economic advantage, securing already to domestic manufacturers a natural protection, is more than sufficient to counterbalance any difference in the cost of labor, especially considering that in this line of manufacture, requiring specially skilled labor, the difference between wages paid abroad and in this country is by no means notable, if at all existent. Foreign manufacturers are, in fact, at a much greater disadvantage in comparison with their American competitors, not only on account of the higher cost of the material entering into the manufacture of their machines, which has to be imported from this and other countries, but also on account of the duties that have to be paid in the foreign manufacturers' home country on such material, and of the freights and contingent expenses both on the necessary material imported from abroad and on the machines exported to this market. The factors mean a further protection to domestic machines.

Foreign automobiles are bought in this country by reason of the special reputation with which certain particular makes have become identified through their efficiency. Each make represents, so to speak, an individuality of its own, embodying certain specific merits, which are the essential factor of their sale. Thus it can not be said that they compete with any domestic machine, because their demand is conditional upon a certain specified make, which has deserved the confidence of the buyer, and also because their original cost is higher than that of the American machine. To handicap the importation of foreign machines with the present exorbitant duty is therefore to tax heavily instead of promoting endeavor to that greater efficiency, which is, in the very interest of American industry, necessary to stimulate a wider use of this line of manufactures; is to put an unnecessary high premium or undue limitation on healthful sport; is to

court possible combination of domestic interests to the detriment of those who use automobiles, and to deprive the revenue of the greater income obtainable from increased importation consequent upon a lower and moderate rate of duty.

The foregoing arguments point to the advisability, to which this chamber respectfully calls the attention of this honorable committee, of reducing the present exorbitant rate of 45 per cent ad valorem on automobiles to a more reasonable rate, more in accord with the visible future of this industry and trade, more equitable to those who use automobiles, and more to the interest of revenue itself.

Respectfully submitted.

E. MARIANI.

Vice-President, Italian Chamber of Commerce of New York.

STATEMENT OF JOHN J. CARTON, OF FLINT, MICH., REPRESENTING THE BUICK AUTOMOBILE CO.

MONDAY, December 14, 1908.

(The witness was duly sworn by the chairman.) The CHAIRMAN. Are you a manufacturer of automobiles, Mr. Carton?

Mr. CARTON. I am the attorney for the Buick Automobile Company, of Flint, Mich., and I am here at the request of the general manager of that company, who is also one of the directors of the company, to present the views of that company with reference to the tariff which should be placed upon the importation of automobiles. From my talks with him I desire to state to the committee that we occupy somewhat of a middle ground. We differ from those who want a 45 or 60 per cent tariff, and we also differ from those who do not want any tariff. The company which I represent, and for whom I speak, is perhaps one of the largest, if not the largest, manufacturers of automobiles in the country-it is certainly one of the largest; and we are of the opinion that there should be a moderate tariff placed upon the importation of automobiles, somewhere from 20 to 25 per cent. The general manager of our company is of the opinion that a 25 per cent ad valorem tariff would be a sufficient tariff to take care of the automobile industry and to give it proper protection in this country.

Now, it is a fact that the Buick Automobile Company is to-day selling automobiles in Europe, and selling them there in competition with the automobiles manufactured there, and selling them successfully. Of course, at the present time they are not manufacturing an automobile which, in the common acceptation of the term, is as high grade as some of the other factories, but Mr. Durand, the general manager of our company, said to me in a conversation the other day, and authorized me to say it here, that next year they will turn out as high-grade automobiles as any factory in the country-as good an automobile as can be made and that they will sell it at 70 per cent of the price which is now being charged for the same grade of automobiles by the so-called high-grade factories.

Mr. DALZELL. That is your particular company?