TABLE 3.—Factory costs of carpetings per square yard—Continued.

Table 3 is compiled from details submitted by the several manufacturers, and is designed to show the variations in costs of material, labor, and overhead among the different companies, for roll goods, seamed and seamless rugs of the same fabrics. These costs are shown for two periods, in order that fluctuations may be registered. A comparison between the weighted average totals for each form of floor covering as shown in Table 3 is of interest in supporting statements to the effect that the production of rugs is more efficient, and hence less expensive, than that of roll goods. The majority of reporting firms produce rugs. Rug costs have not advanced to as great an extent as have roll goods in the period 1915-1919.

The weighted average figures for chenille Axminster show seamless goods to cost a fraction less than roll goods. This is accounted for by the fact that there is doubtless a greater production of seamless rugs than of roll goods, and that those companies producing seamless rugs exclusively show a low figure. This explanation also holds true for wool velvets and for Axminsters.

Among the roll goods, Axminster, with 214 per cent increases over 1915 costs, are the greatest of any increases shown. Rugs of worsted Wilton (75 per cent) and chenille Axminster (80 per cent) show the least increase of any floor covering costs from 1915 to 1919.

This table further substantiates the conclusion drawn from Table 2, that total costs have doubled since 1915.

The percentage which wool yarns constitute of the cost of materials used in carpet manufacture is of significance if compensatory duties are to be levied on the finished product.

TABLE 4.—Wool—-Ratio of cost to total material costs, per square yard of fabric.

Table 4 shows the percentage which wool costs form of the total material cost in each kind of carpet. Percentages derived from both weighted and simple averages are presented. Weighted averages are somewhat more accurate, but the simple averages are given as a guide where it is impossible to get weighted averages, as, for example, Brussels and wool Wilton roll goods for 1915 and seamless rugs for

both 1915 and 1919.

In practically every instance wool is less of a material factor in seamless than in either of the other two forms of floor coverings. The greatest spread between forms occurs in worsted Wiltons for 1919, when the wool in roll goods was 79 per cent of the total material costs, and in seamless rugs, 60 per cent. Chenille Axminster shows the greatest percentage of material costs for wool, and is followed in close order by wool Wilton and worsted Wilton. Axminster leads the group composed of Axminster, velvet, and tapestry.

It will be observed that wool costs represent less of total material costs in 1919 than in 1915, being more pronounced in cheaper grades of carpetings (velvets and tapestries) where the ratio of wool to total material costs has decreased approximately 10 per cent. This can be accounted for in two ways-that less wool was used in 1919 per square yard of product than in 1915, or that other materials (cotton, linen, jute) have advanced in cost more than wool since 1915.

It is evident that if foreign and domestic manufacturers buy their raw material at practically the same prices-as is the case where world markets exist, such as those for the various fibers used in making carpets--the competitive strength of these producers, so far as

determined by costs, depends upon the cost of labor and overhead, and not upon the total factory cost. Table 5 gives comparative conversion costs for the several kinds of domestic floor coverings.

TABLE 5.-Conversion costs (labor and overhead).

1 Worsted Wilton, seamless, is not as yet a stable commodity in the industry. It partakes of the nature of a specialty and hence these figures are not taken into consideration in making a study of this table.

Table 5 is a composite of labor and overhead charges shown in Table 2, page 90. While the percentages which conversion costs form of total factory costs are given as of possible statistical interest, actual (weighted average) costs in dollars form the basis for tariff considerations. It will be observed that conversion charges in 1919 approximate 40 per cent of total factory cost of American made carpetings, but actually the charges vary from $.4662 per square yard of tapestry to $3.3912 per square yard of chenille Axminster. The conversion costs of Brussels seamed rugs, 1915, show the lowest percentage of total costs. However, the advantage in value is held by tapestry.

It will be noted that the conversion charges are generally lower for Wiltons, tapestries, velvets, and Axminsters-carpets the manufacturing processes of which have been most highly developed in the United States-than for those entailing considerable hand work, such as chenille Axminster and Smyrna. The goods produced in greatest quantity usually show the lowest actual conversion charges. American goods have forged ahead where mechanical processes have predominated over hand processes. The cost of hand work in the United States offers an insurmountable barrier to effective competition of American handmade floor coverings with imported ones. In

the carpet industry, as well as other industries, American manufacturers have been at a disadvantage in meeting foreign competition with articles the labor element of which runs high, and on such articles protective duties have been effective in stimulating growth. On the other hand, where mechanical processes were most fully developed with a resulting reduction in labor costs, the competitive position of domestic manufacturers has been strong.

The great increase in labor costs between 1915 and 1919 is also reflected in this table. Conversion costs have advanced 350 per cent in Axminster roll goods. From this high point the advances range to the lowest (55 per cent) in chenille Axminster seamless rugs. A more important indication of the competitive positions of foreign and domestic manufacturers are conversion costs in the United States and abroad. As has been pointed out elsewhere in this report, chenille Axminster has been subject in a peculiar degree to competition from Great Britain.

It has been possible, through the cooperation of certain importers and of domestic manufacturers, to prepare an exhibit showing comparable costs of competing American and British chenille Axminster floor coverings. Due regard has been had in this exhibit for the factor of exchange rates.

An American manufacturer furnished figures on two grades of chenille rugs or carpets and one grade of chenille roll goods, and costs were obtained f. o. b. England of two grades of chenille rugs or carpets of practically the same specifications and of one grade of chenille roll goods of different specifications but which competes with the domestic product.

The comparison of these costs per square yard follows:

1 Normal exchange is taken at $4.8665; subnormal exchange is taken at $3.80, in all these calculations.

The cost of these two grades, adding the present 50 per cent duty and 10 per cent for freight, insurance, etc., is as follows:

1 Normal exchange is taken at $4.8665; subnormal exchange is taken at $3.80, in all these calculations.

From these figures it will be seen that at the rate assessed by the act of 1913 the foreign manufacturer can sell in America at a price that is below the American manufacturers' cost except in the instance of plain goods with the exchange at normal, in which case the American manufacturer has a leeway for profit of from about 6 per cent to 10 per cent; on designed goods his costs are from 5 per cent to 15 per cent higher, however, than the English manufacturers' selling price in America at normal exchange, and from 34 per cent to 47 per cent than his selling price at subnormal.

No figures are available to show English labor costs in chenilles, but assuming that the materials are purchased in a world market at the same cost in both countries, and deducting said material costs, which in America are for plain, grade A, $3.46; plain, grade B, $3.70; designed, grade A, $3.99; designed, grade B, $4.15, the following comparison results:

1 Normal exchange is taken at $4.8665; subnormal exchange is taken at $3.80 in all these calculations. * The Tariff Commission desires to call attention to the fact that expenditures for labor are made within Great Britain, and are thus not subject to the exchange rates, as are the prices of British goods sold in the American market. The transaction is within the country, and to be considered at par. Present exchange rates affect directly the selling price of British products in the United States, but only indirectly the rate of wages in Great Britain.

All the above figures are for chenille rugs and carpets made for special orders.

Chenille rolls.—No detailed figures could be obtained for chenille roll goods of similar specifications. It was possible, however, to obtain selling prices on competing qualities from two English factories (which are practically the same price) and one American factory.

1 Normal exchange is taken at $4.8665; subnormal exchange is taken at $3.80 in all these calculations.

The above foreign prices include the duty of 35 per cent (act of 1913) and 5 per cent for freight, insurance, etc.

In conjunction with the foregoing discussions, a study of costs, designed to emphasize labor charges between chenille Axminster and Axminster made in the United States, is pertinent. The data which