A number of American bagging concerns import secondhand bagging from the United Kingdom for the purpose of making it into yarn. One of the firms in the South, reweaving bagging, reports that it consumes annually from fifteen to twenty million pounds of secondhand gunny bagging, a part of which is purchased from mills located in Manchester, England.

The United Kingdom consumes about one-fifth of all the cotton grown in the world, ranking second to the United States. About two-fifths of American exports are consigned to the United Kingdom. Shipments to the United States form an outlet for surplus secondhand bagging.

BRITISH INDIA.

The production of cotton bagging in India has never been large. With one exception all the Indian mills that have woven any cotton bagging in the past have produced it as incidental to their manufacture of burlap and sacking. Before the war there were five Indian mills that wove bagging. An American importer estimates their annual production as follows:

TABLE 8.--Indian jute mills manufacturing cotton bagging.

The last, Narcoldanga, produces bagging exclusively. On January 1, 1921, this mill had 14 sacking looms."

The representative of a domestic bagging company, who visited India in 1920, reports only two mills manufacturing bagging, namely, Lansdowne and Narcoldanga, the former an up-to-date and efficient concern preparing to double its plant.

The practice in Calcutta is to manufacture on order and not to carry stock, as in the United States.

India's production of gunny cloth for covering cotton is not limited to supplying the demand of the United States. As a grower of this commodity India ranks second, furnishing, in 1919, 22.4 per cent of the world's consumption.10 Raw cotton is India's leading export. An examination of India's trade returns for the 30 years previous to 1920 shows that on 18 occasions India's chief exports were raw and manufactured cotton, principally raw.

IMPORTS.

Annual imports of cotton bagging for consumption during the period 1892 11-1921 were greatest in the decade 1901–1910.

9 In lian jute mills and their looms as of Jan. 1, 1921, pp. 41, 42.

10 Cotton Production and Distribution, Season of 1919-20; Department of Commerce, Bulletin, 145, p. 79. I 1892 is the first full year for which imports of cotton bagging, on the basis of square yards, are available.

TABLE 9.-Imports of cotton bagging into the United States, 1892–1921.

In the decade 1901-1910 the domestic production of cotton, including linters, advanced about 27 per cent, or from an average of 9,102,000 bales during the years 1892-1900 to 11,591,000 for the following 10 years.

In the period 1892-1920 imports of bagging were smallest in 1894, with 618,708 square yards, valued at $32,709, and greatest in 1907, with 19,817,860 square yards, valued at $1,215,446.

Imports showed the greatest advance in quantity during the years 1903-1907, when they increased steadily year by year from 5,417,039 square yards to the peak reached in 1907. Accompanying this rapid advance was a decline in the equivalent ad valorem duty from 15.26 to 9.78 per cent. Under the act of 1913 bagging was exempt from duty.

The war seriously interfered with shipments of bagging. From a total of 9,648,484 square yards in the fiscal year 1915 they fell to 1,781,889 square yards in 1918.

Since 1918 imports have tended to remain at the level of war years. From 2,912,524 square yards in the fiscal year 1919 shipments advanced to 9,332,239 square yards in 1920, but fell to 4,873,711 square yards during the fiscal year ending June 30, 1921.

IMPORTS BY COUNTRIES.

Since the close of the war British East India has supplied the United States with the greater part of its foreign bagging—in the fiscal year 1919, 67.81 per cent; in 1920, 80.99 per cent; and in 1921, 56.71 per cent. Imports from the United Kingdom, which supplies all but a small part of the remainder, were 32.55, 17.55, and 37.49 per cent, respectively, for those years.

This is in striking contrast to the previous quarter of a century, when bagging of English manufacture constituted by far the greater part of the domestic consumption. From 1895 to 191812 in two years only-1898 and 1902-did the value of shipments from India exceed those from the United Kingdom. By five-year periods since 1895 imports from the United Kingdom have ranged between 60 and 80 per cent of the total value as against 39 and 19 per cent from British India.

Indian bagging is superior to that made by the English; it is made entirely from jute butts, is woven with more threads to the square inch, and is in every way stronger and more suitable for covering cotton. Calcutta bagging finds its greatest use in the Mississippi Delta, where the best grades of American upland cotton are grown and where the demand is for the best covering available.

12 The value of bagging received from foreign countries is first separately recorded from bags in 1895.

Imports of cotton bagging from the United Kingdom fall into three classes: (1) New bagging; (2) second-hand bagging; and (3) old bagging suitable only for remanufacture. The English product for the most part is made from a combination of worn bagging and low grades of mill waste.

With her exceptional advantages in the way of raw materials and labor, Calcutta is able to export bagging at a lower figure than Dundee. During the years 1912-1921 the average export prices per square yard of English and Indian bagging were as follows:

TABLE 10.—Prices per square yard of imported cotton bagging, 1912–1921.1

1 Prices of domestic and imported bagging are found on pp. 28-30.

India in the past has not supplied all of our imported bagging, because in contrast to her major lines, burlap, and sacking bags, the American trade in bagging is small and attended with certain risks.13

COMPETITIVE CONDITIONS.

Imported bagging constitutes a small part of the material consumed annually in the United States for covering cotton. In the years 1892-1920, the domestic production of raw cotton, including linters, averaged 11,597,000 bales yearly. Allowing 7 yards of material for each bale, 81,179,000 yards of bagging were necessary to cover the American crop; during this period imports averaged 7,728,000 square yards, or 5,796,000 yards of 45-inch material.

The American production of raw cotton and linters during the season 1920 amounted to 13,863,000 bales, requiring about 97,000,000 yards of bagging. Imports of bagging in the twelve months ended December 30, 1920, totaled, 7,261,904 square yards-5,446,000 running yards or about 6 per cent of all the bagging used for the 1920 crop. 14

Import statistics are not separately classified to show: (1) New bagging; (2) second-hand bagging, or (3) old bagging that is to serve as raw material for new bagging or is to be rewoven. It is estimated that at least a fourth of the covering material imported in 1920 consisted of bagging, which was subsequently rewoven or mixed with other fibers in the manufacture of new bagging.

Two factors combine to make the volume of imports small (1) the strong position of the American concerns manufacturing this product, and (2) the risks involved in supplying a demand which fluctuates from year to year.

13 This subject is treated at greater length on pp. 43, 44.

14 During the calendar year, 1921, imports were 3,372,000 square yards, valued at $309,897.

The two domestic concerns are the world's largest manufacturers of bagging. Each has a strong and large organization, has been long prominent in this field, and makes a number of products closely allied to bagging, thus saving in overhead expenses.

The import trade is attended with certain risks. The demand for bagging fluctuates from season to season, as it depends upon the size of the crop. Likewise the demand is confined to the period, AprilNovember. Whatever bagging is not sold during this period must be stored until the following season. These factors, together with the uncertainty of bagging remaining on the free list, or being subject to a low rate of duty, have militated against foreign manufacturers concentrating on the production of bagging and against their buying additional machinery.

These considerations have had more influence in limiting imports from Dundee than from India. Calcutta's lack of interest has been due to the small size of the orders involved and the low value of the product, which have offered little incentive to turn from. the production of burlap and sacking bags, in which lines the world's consumption up to 1914 was advancing more rapidly than the output.

There is, however, a possibility of India furnishing in the near future a larger part of the American consumption. The first of the two concerns which dominate the domestic trade in bagging, and a subsidiary of the second, are now each building a mill in India for the manufacture of this material. Both companies have already shipped abroad a part of the bagging machinery formerly operated in this country. The subsidiary of the second company was incorporated in 1920 with $5,000,000 capital stock for the purpose of taking over and extending the business of the parent company in India. This subsidiary will also produce burlap.

In the past, although burlap has been subject to a duty which, in the years 1898-1913, ranged between 21 and 30 per cent, over 99 per cent of the domestic consumption was supplied by British India and the United Kingdom. In the fiscal year 1921, the domestic consumption of burlap was about 1,000,000,000 yards, of which about 93 per cent came from India.

The advantages India possesses for the manufacture of jute cloths, and which are responsible for the leading American bagging firms building mills there, will be discussed later. 15

TARIFF HISTORY.

A study of the paragraphs relating to cotton bagging in tariff acts since 1824, when it was first mentioned, discloses:

(1) That cotton bagging has been assessed at a specific duty in all acts with the exception of those passed in 1846, when it was made dutiable at 20 per cent, and in 1894, and 1913, when it was made free. (2) That jute has become the leading material used in its manufacture, supplanting flax and hemp.

(3) That in the earlier acts, where the duty was laid on the basis of value per yard, the basis tended to become lower.

15 See pp. 52-54.

The paragraph relating to cotton bagging in the act of 1824 reads as follows:

On cotton bagging, 3 cents and three-fourths of a cent per square yard.

The first reference to bagging made from jute appears in the act of

1861:

On cotton bagging or any other manufacture not otherwise provided for, suitable for the uses to which cotton bagging is applied, whether composed in whole or part of hemp, jute, or flax, or any other material, valued at less than 10 cents per square yard, 14 cents per pound; over 10 cents per square yard, 2 cents per pound.

In 1862, the duty was lowered to three-quarters of a cent per pound on material valued at less than 10 cents per square yard, and to 1 cent on that over 10 cents.

In the act of 1864 gunny cloth, gunny bags, and cotton bagging were assessed at 3 cents per pound, when the value was 10 cents or less per square yard, and at 4 cents when the value was in excess of 10 cents. These products were dutiable in the acts of 1870 and 1883 at 2 cents and 14 cents, respectively, per pound when valued at 7 cents or less per square yard; and when valued at over 7 cents per square yard at 3 cents in 1870 and at 2 cents in 1883.

In 1890 jute butts were added to the list of materials, from which the cotton bagging might be made. In that act "Bagging for cotton, gunny cloth, and all similar material suitable for covering cotton, if valued at 6 cents or less per square yard, was assessed at 1.6 cents per square yard; and if valued at more than 6 cents per square yard,

at 1.8 cents.

The act of 1894 used the same phraseology as the act of 1890, but placed the article on the free list.

The classification adopted in the act of 1897 was a radical departure from former classifications. Paragraph 344 of that act reads as follows:

Bagging for cotton, gunny cloth, and similar fabrics, suitable for covering cotton composed of single yarns made of jute, jute butts, or hemp, not bleached, dyed, colored, stained, painted, or printed, not exceeding 16 threads to the square inch, counting the warp and filling, and weighing not less than 15 ounces per square yard, six-tenths of 1 cent per square yard.

This paragraph was reenacted without change of wording or duty in the act of 1909, and was made a basis of the classification adopted in 1913. The act of 1913 made cotton bagging free of duty, and while eliminating hemp, which is a soft fiber, from the list of materials from which cotton bagging might be made, added cotton tares and a number of new fibers: Seg, Russian seg, New Zealand tow, Norwegian tow, and aloe.