Sivut kuvina
PDF
ePub

for a corresponding period shows a respective reduction of 40 per cent and 30 per cent (see appendix) we urge upon your committee the imperative necessity of such provisions in the interpretation of the words "market value" as will entail the requirement of certain specific rulings under certain conditions without permitting the exercise of discretion by the administrative officers of our ports.

There has been a constant growth in importations, increasing yearly in volume, decreasing yearly in average value. We refer you also to the statistics of imports compiled by the Department of Commerce and Labor.

The retail value of foreign cars sold in America during a period of six years, with additional parts, is approximately $52,677,046. (See appendix.) The value of American cars sold in America for a corresponding period is approximately $250,000,000.

A motor vehicle of any kind can be made in Europe certainly for 60 per cent of the cost thereof in America, including the manufacturer's profit, as shown in the Fiat case, and by the figures on cost of materials and labor.

We particularly point out that Mr. Charles H. Sherrill, representing the importers, and especially the Fiat Company, of Italy and America, stated to your committee that the tariff ought to be reduced to 33 per cent. In other words, such a rate of tariff would be satisfactory to the Italian company as giving it free access to the American market.

It is further of the utmost importance to note that Mr. Sherrill also admitted that the 40-horsepower Fiat chassis, which we referred to in our preliminary brief and which we refer to again in this brief as being imported at a customs value of $1,800, was actually imported at a customs value of $1,600, and he further stated that this sum of $1,600 was the full and total sum which went abroad in full payment of the 40-horsepower chassis referred to.

We direct your attention especially to a complete and detailed refutation of erroneous statements made by Mr. Sherrill in his hearing before your committee, in the attached appendix and exhibits referred to therein.

We wish most urgently to impress upon your committee that with 60 per cent of American cost a tariff of 65 per cent, plus 5 per cent freight and import charges, would still permit a European manufacturer to place his product on the American market at 102 per cent of the American cost-only a margin of protection of 2 per cent. If, however, you assume that average European costs are 65 per cent of American costs (though American workmen are entitled to protection against the cheapest labor and not the average labor), then a tariff of 45 per cent, plus 5 per cent freight and import charges, would put foreign cars on the American market at 971 per cent of the American cost. (See appendix and problems below.)

[blocks in formation]

In this case 65 per cent duty affords only 2 per cent margin of protection on cost basis without profit.

[blocks in formation]

In this case 45 per cent duty lacks 24 per cent of protection on cost basis without profit.

[blocks in formation]

In this case allowing even that European costs are as high as 70 per cent (which we allege is not the fact, however), a 45 per cent tariff rate affords a margin of protection of only 5 per cent without profit.

We will next call attention to the manufacture of commercial vehicles, cabs, etc.

The industry of manufacturing commercial vehicles in America to-day absolutely does not exist to the extent that it may be dignified as an industry, yet it is in process of evolution, though its development will be slow.

There are many reasons for this. The most important are that the commercial vehicles so far manufactured and sold to users have had so large an annual depreciation and cost of operation that people who bought them lost money and are timid about further investments in commercial vehicles.

In the next place, it is natural that commercial vehicles should follow in the wake of the so-called pleasure motor vehicle, because all of the engineering of pleasure vehicles practically applies to commercial vehicles, though the shop equipment of a pleasure vehicle factory is not of the nature to produce the parts of commercial vehicles, many of which are heavier and larger than can be worked on pleasure vehicle machine tools. The pleasure vehicle manufacturer has also been obliged to devote every scrap of his energy, talent, and money in the most strenuous effort to get his pleasure vehicle business onto a paying basis, and in only a few cases has this been accomplished. In the very large percentage of cases they are yet striving toward this end. When this has been accomplished, the natural direction will be toward the production of commercial vehicles, which must go through to a great extent a similar process of evolution at a great expense to the manufacturer before they arrive at the crystallized final marketable product.

It would be unfortunate in the extreme to deprive the commercial vehicle of the protection which will insure its evolution and development in America and open our American markets to the foreign commercial vehicles which are now coming forward in the European markets.

We urgently insist that the same protection be accorded to commercial vehicles as now exists on pleasure vehicles, namely, 45 per

cent duty, and possibly your committee may recommend a higher duty in view of all the facts.

It has been suggested that a commercial vehicle does not need so high a rate of duty to protect it as does the pleasure vehicle on account of the alleged fact that in the commercial vehicle labor is not so large a component part of its cost in proportion to the value of the material purchased as is the case in pleasure vehicles. So far as the crude information goes which we now possess as to the commercial vehicle industry it goes to show that the commercial vehicle made in the highest possible class of workmanship and material, in order that it shall have the longest possible life and least possible annual depreciation or cost of upkeep consistent with the stage of the art, has exactly the same or so nearly the same relation between labor and material that it is not possible to classify it separately and give it a separate tariff from the pleasure vehicle. It should, in our judgment, be in the same tariff scale with other motor vehicles and be allotted a 45 per cent or greater duty, if the greatest value to the American workman is to be obtained by the development of the commercial vehicle industry in America, to say nothing of its importance to the entire transportation and manufacturing interests of the United States.

In connection herewith we wish to call the attention of the committee to the very free imports of taxicabs now going on.

The Packard Motor Car Company is obliged to ask $3,700 for its 3-ton-load capacity truck, and Mr. Henry B. Joy, its president, states that it will take many hundreds of thousands of dollars and many months of time before it can build up a sufficient demand to enable it to make any profit whatever at that price. To-day, the De Dion Bouton Company, of Paris, is landing at the New York customs a 3-ton truck at a duty valuation of about $2,500, which, with duty and import charges of 50 per cent additional, place the truck on the New York market at $3,750, including manufacturer's profit and middleman's profit, while the Packard Company has yet to make a deduction from its price stated above of 10 per cent to the dealer.

We call your attention to the Wyner-Huber-Reich letter, addressed to our special agent, Mr. James M. Carples, with reference to motortruck prices from Austria. (See Exhibit F.)

Commercial conditions summarized are as follows: The 253 recorded American manufacturers of automobiles are grouped as follows:

[blocks in formation]

About 80 of these are marketing a product that is of some importance to the trade. About 10 per cent of the whole number (25) have so far, possibly, made a commercial name, but we doubt if even 20 manufacturers can show a fair profit.

75941-H. Doc. 1505, 60-2-vol 3-34

Notwithstanding the great number of machines sold and the amount of money invested, it is a fallacy in the public mind that the manufacture of automobiles represents a very large profit. At least 90 per cent of the manufacturers of automobiles in this country are not to-day making manufacturing profits, and but few concerns engaged in the business have been in any sense successful. This is not because of poor business management, but on account of the large amount of capital required in the experimental and development stages to bring the industry to its present condition and the many unusual risks incident to the conduct of a business of this character. The industry is profitable only in the event of there being an especially desirable product combined with ample capital, skill, and foresight, and a selling ability properly proportioned to market a large product. A record of the development of the industry is submitted herewith:

[blocks in formation]

NOTE. Of the 51 concerns in business in 1902 only 21 survive and are in business to-day.

The foregoing picture of the vicissitudes of individual concerns is the more appreciated by our manufacturers themselves, who recognize the uncertainty of prolonged success. History shows many times over the failure of concerns which have been successful temporarily to hold the gain which they had made.

[blocks in formation]

The National Association of Automobile Manufacturers is composed of the members of both the other organizations and of a number of other manufacturers not affiliated with either organization. A copy of their articles of agreement is submitted. (Exhibit D.)

The American Motor Car Manufacturers' Association is composed of 44 manufacturers who do not recognize the validity of the Selden patent. A copy of their articles of agreement is submitted. (Exhibit D.)

The Association of Licensed Automobile Manufacturers is composed of a group of 30 automobile manufacturers of America who recognize the validity of the Selden patent and pay royalties thereunder. A copy of their articles of agreement is submitted. (Exhibit D.)

A careful perusal of the various articles of agreement (Exhibits D) above noted will convince your committee that none of the associations above enumerated have anything in common but the general good and welfare of the industry; that there are no trade or price agreements of any kind, either written or what is commonly known as "gentlemen's agreements;" that there is no understanding as to output, but that there is the keenest competition between all of their members; in fact, the opinion of the supreme court of the State of New York, as expressed in the decision in which one of these agreements figured, stated:

That the rights and liabilities of the members of the Association of Licensed Automobile Manufactures are controlled by its articles of association which constitute a contract the terms and provisions of which are binding on all its members.

That the provisions of the articles of association of the Association of Licensed Automobile Manufacturers are reasonable and not opposed to public policy or the law of the land.

We urge that American labor requires protection by an adequate tariff, in view of the lower cost of labor abroad, and from the overproduction of the European automobile factories, who have the advantage of cheap labor, lower cost of material, best American machinery and longer experience. (See appendix.)

That the possibility of undervaluation and fraud on the revenue be prevented by providing for a proper or uniform interpretation of market value" (see Exhibit C and appendix), and we submit that in the judgment of your committee you may deem it wise to recommend a higher tariff than now exists, but if not we certainly urge that it would be wise and proper to so provide in the tariff that an additional 5 per cent, making 50 per cent in all, may be added by proper authority upon a proper and adequate showing of the necessity therefor, and that this shall be specifically mentioned in the act, together with the conditions governing the necessity of the application of the additional rate, written in plain language, and leaving nothing to the discretion of administrative officers. That note be taken of the fact that our United States tariff rate as it exists is only 10 per cent higher than the Canadian tariff rate. Even, therefore, considering Canada's cheaper labor, lower costs of manufacturing in every way, yet they find it necessary to impose a tariff rate nearly equal to our own, and further safeguard their interests by exacting a "dumping duty," which is graduated to protect against overproduc

« EdellinenJatka »