BOSTON PUBLIC LIBRARY
3 9999 06317 362 7
OFFICE OF NATIONAL RECOVERY ADMINISTRATION
DIVISION OF REVIEW
FOREIGN TRADE UNDER THE NATIONAL INDUSTRIAL RECOVERY ACT
By
H. D. Gresham
Assisted By
J. G. Burke D. S. Green
M. E. Gross J. W. McBride
WORK MATERIALS NO. 37
IN TWO VOLUMES
VOLUME II: APPENDIX TO PART B
FOREIGN TRADE STUDIES SECTION
March, 1936
FOREIGN TRADE UNDER TH3
NATIONAL INDUSTRIAL RECOVERY ACT
APPENDIX TO PART B.
SECTIOIT 3 (e) 0? TEE NATIONAL INDUSTRIAL RECOVERY
ACT, AND ITS ADMINISTRATION
by
H. D. GRESHAu
Assisted "by
J. G. Burke D- S. Green
i:. E. Gross J. ff. LIcBride
FOREIGN TRADE STUDIES SECTION
LiARCH, 1936.
9829
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op
FOREIGN TRADE UNDER THE
NATIONAL INDUSTRIAL RECOVERY ACT
APPENDIX TO PART B. SECTION 3 (e) OP THE NATIONAL
INDUSTRIAL RECOVERY ACT, AND ITS ADMINISTRATION
Table of Contents
I. STUDIES OE COMPLAINT PROBLEMS UNDER SECTION 3(e) OF Page
TIE NIRA (included in this volume) number
Binder Twine (No. 47) 326
Cigars (No. 29) 366
Table Damask (No. 32) 404
Handkerchief s, embroidered (No. 34) 452
Horseshoes (No. 33) 498
Pig Iron (No. 43) 515
Newsprint (No. 13) 564
Quebracho (No. 25) 59
Rubber Erasers (No. 31) 6
Salt Cake (Sodium Sulohate) (No. 46) 646
Jute Webbing (No. 37) 694
Note: Separate tables of content and lists of tables appear
at the beginning of each study.
II. FORMAL COMPLAINTS UNDER SECTION 3(e) FOR WHICH PRELIMINARY
SURVEYS OF AVAILABLE INFORMATION HAVE BEEN FILED IN NBA.
STUDIES SPECIAL EXHIBITS, WORK MATERIALS NO. 37
Antimony (No. 8)
*3raids and Hat Bodies, Pedaline (Nos. 21 & 22)
Bread (No. 27)
Brushes (No. 55)
Cardboard Novelties (No. 55)
*Chinavare and Earthenware (No. 15)
**Cloth, Bleached Cotton (No. 50)
Coal and Coke (Nortnv/est Area) (No. 51)
Fertilizer (Maine) (Ho. 54)
Fiber Board, Counterbo ?rd. (No. 39)
Fish, Canned Tuna (No. 14)
Fish, Frozen Tuna (No. 17)
Fish Netting, Cotton and Linen (No. 48)
Fishing Lines, Hemp Halibut ("No. 40)
Fly Catchers, Ribbon (No. 35)
* Goggles, Sun (No. 20 )
***Gloves, Wool Knit (No. 45)
*Hat Bodies, Wool-felt (Nos 4 & 44)
Hollow-ware, Silver-plated (No.2o)
Horsehair, Dressed (No. 10)
9829 -i-
Table of Contents (continued)
Ice (Mexican Border) (Ho. 12)
Leather, Calx" and Kip (No. 11)
* Matches (No. 3)
."■ nthol (No. 23)
Oil, Sunflower (ilo.lS)
Paper, Kraft Wrapping (To. 38)
Pearl 3ssence (No. 28)
♦Pencils, "/nod Cased Leaf. (No. 5)
* Qui ch silver (No. 7)
Rice (Philippine Islands) (No. 24)
Rubber [joys (l T o. 30 )
Rubber ~ ter Pottles (No. 19)
♦Ri s, Cotton (No. 2)
*R ;s, Cotton Oriental (No.l)
Rugs, Crass and Fiber (lb. 52)
Rugs, Jute. Oriental (No. 49)
Salt, Com .on (No. 33)
♦Shingles, Red Cedar (No. 18)
Shoe Laces (No. 9)
Is )ioca, Flour (No. 41)
Thermostatic Containers (No. 42)
Umbrellas (No. 35)
W tches, Parts and Movements (No.S)
♦The United States Tariff Commission has published
the results of its investigations of the complaints
with respect to these cases.
**A report on conditions and problems of the cotton
textile industry by a Cabinet Committee appointed
by the President of the United States was publish-
ed as Senate Document 12S, Seventy-fourth Congress,
First Session.
♦♦♦The United States Tariff Commission has published
a report on a recent investigation of Tool Knit
Gloves under Section 335 of the Tariff Act of 1930.
9829
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TABLE OF CONTENTS
Page No.
Subject of complaint and status of the complainants
under the National Industrial Recovery Act 32P
Cooperation "by other producers 326
Commodity and tariff treatment : -- 326
Description of commodity 326
Tariff treatment 327
The raw material 327
Sisal and henequen fibers 327
(a) Sisal 323
(b) Henequen 328
(c) Production 328
Abaca 329
World production of the agave fibers and abaca
since 1930 329
Tariff treatment 330
Imports 330
Domestic consumption 330
Channels of trade 330
Uses of binder twine 330
Consumption per acre 332
Decreased twine consumption 332
The domestic industry 334
The private industry 334
(a) Concentration of production 334
(b) Branch factories and fiber
plantations 334
(c) The importance of binder twine to the
domestic producers 335
The State -orison binder twine industry 337
(a) Importance of binder twine manufacture
as a prison industry 337
(b) Production by prisons 337
Domestic production 339
Carry-over 340
Exports 341
Imports 342
By countries 342
Unit values 342
By quarters 342
By customs districts 346
Relation of imports to production 346
Prices of binder twine 350
The price system 350
Domestic prices and the prices of raw fiber 350
'The spread between raw fiber prices and whole-
sale prices 351
Effect of the national reco-'ery program 355
Labor provisions of the code 355
(a) ?age provisions 355
(b) Hours provisions 355
Employment and payroll 355
Cost of production 359
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LIST OF TABLES
Table No. Page No,
1 World production of agave fibers, 1909-1930 328
2 Hard fiber: Estimated world production, "by countries,
of abaca, sisal, and henequen, 1930-1934 329
3 Sisal and henequen fiber: Inports for consumption
into the United States, by countries, 1927-1934 331
4 Domestic consumption of "binder twine for harvesting
wheat, oats, barley, and rye, in relation to total
acreage and the use of the combine harvester, and
the price per pound and the tocai cost of twine
used', 1919-1935 333
5 Binder twine: Relation of total output to the produc-
tion by private industry of all cordage products in
the United States, 1927-1933 336
6 Binder twine: Prison production for state use and
state account in 1923', 1932, and 1934 338
7 Binder twine: Production by all private companies and
the prisons, and relation of prison to total
domestic production 339
8 Binder twine: Domestic production by complainant com-
panies, other manufacturers, and prisons,
1929-1934 340
9 Binder twine: Indices showing trend of domestic
production since 1929 340
10 Binder t^ine: Domestic exports by countries,
1923-1934 343
11 Binder twine: General imports into the United States
by countries, 1923-1934 344
12 Binder twine: General imports into the United States,
by quarters since 1931 345
13 Binder twine: Ratio of imports to production, 1929
to February, 1935 347
14 3inder twine: Ratio of inports to private domestic
production 1929 to February, 1935 349
Chart 352
15 Wholesale prices of binder twine in relation to
New York prices of raw fiber, 1928-1935 353
16 Spread between the prices of raw fiber and the
wholesale prices of domestic binder twine,
1928-1935 354
17 Binder twine: Employment and payroll for the six
leading private domestic producers, 1929 and 1932
to January, 1935 — : 356
18 3inder twine: Indices of employment and payroll for
the six leading private domestic producers, 1929
and 1932 to January, 1935 357
19 Binder twine: Indices for wages paid and employment
by the five leading complainant producers and for the
leading manufacturer, before and after the code be-
came effective on I larch 7, 1934 358
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list of tables-continued
Table No. Page No.
20 Binder twine: Production costs of the six lead-
ing domestic manufacturers, including the five
leading complainant conroanies, 1933 and first
half of 1934 359
21 Binder twine: Increases in production cost
items in the first half of 1934 over 1933
and ratio of separate cost items to total
cost in 1933 and the first half of 1934
for the five complainant producers and the
largest manufacturer 360
Appendices
A Filing Price Schedules, Binder-Twine
Division, Code for the Cordage and
Twine Industry 361
B TpqIe A. — Quarterly prices of raw ward fiber
at New York, 1927 to 1935 363
Table B. — Wholesale prices of binder twine
effective in the private domestic
industry, 1923 to" 1935 365
Tablp C. — Unit value of binder-twine imports
for six-month periods, 1927 to 1934 365
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BIKDSR TWINE (No. 47)
9829
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survey of information
on
binder wine
September, 1935
Subject of Complaint and Status of the Complainants
under the N a tional Industrial Recovery Act
This is a report on a complaint filed by ten domestic manu-
facturers of binder twine, pursuant to Section 3(e) of the national
Industrial Recovery Act, with respect to imports of binder twine of all
kinds.
The complainant producers operated under the Code of Fair Com-
petition for the Cordage End Twine Industry (Code Hoi 303), approved
on February 21, 1934. These companies manufacture about 45 per cent
of all binder twine produced in this country by private manufacturers
and about 30 per cent of all binder twine produced in the United
States by both the private manufacturers and eight State prisons.
The largest priva.te manufacturer of binder twine, producing
about 35 per cent of both privately manufactured end prison-made
binder twine, the State prisons, and four very small producers of
binder twine did not become parties to the complaint.
Cooperation by Other Producers
All the private companies, especially the leading producer,
and the prisons as well cooperated in furnishing information with
respect to the domestic production of binder twine at the request of
the National Recovery Administration. Cooperation with the prisons
manufacturing binder twine, with exception of the Kansas State
prison, was obtained through the efforts of the Prison Labor
Authority created under the Compact of Pair Competition for the
Prison Industries of the United States, approved by -the President
on April 19, 1934. The 28 signatory States under the compact under-
took to establish and maintain fair competition between products of
private domestic industry and those of prison industry.
Commodity and Tariff Treatment
Description of commodity
Binder or binding twine is a single-ply, hard- twisted yarn, with
a breaking strength of 65 pounds, which is manufactured from hard fiber
to measure by weight approximately 500 feet to 650 feet in length per
pound, the better grades of twine being of proportionately longer measure.
9829
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Bindcr twine is used extensively in this country for the harvesting of
■ in crops.
In 1880 the first hard-fiber binder twine was successfully
manufactured from pure abacs fiber (reanila hemp) grown in the
Philippines. Abaca has since been used in the manufacture of binder
twine, although it has largely been displaced by Mexican and Cuban
henequen and to a less extent by sisal from East Africa, the Fether-
land East Indies, and Haiti. Relatively small amounts of istle, sunn,
and Hew Zealand hemp have been used from time to time in the manu-
facture of binder twine.
Binder twine is gill- spun by machinery directly from the
sliver of the various hard fibers. The twine is oiled when spun.
After spinning, it is wound in balls weighing five or eight pounds,
which are packed in 50-pound burlap-covered bales.
Tariff treatment
Paragraph 1522 of the Tariff Act of 1930 provides that binder
twine "manufactured from New Zealand hemp, henequen, manila, istle or
Tampico fiber, sisal grass, or sunn, or a. mixture of any two or more of
them, of single ply and measuring not exceeding 750- feet to the pound"
is free of duty. Binder twine was duty-free under the T a riff Acts of
1922 and 1913.
Henequen and sisal twines have been held to be not free of
duty as binding twine under Paragraph 1521 of the Act of 1922 unless
they are single-ply, hard- twis ted, oiled yarns measuring approximately
not less than 500 feet and not more than 750 feet to the pound and wound
in balls of five or eight pounds in weight (T.D. 40805). The Treasury
Department has ruled that binder twine measuring 475 feet to the
pound should be admitted free of duty provided other conditions pre-
scribed in Treasury Decision 40805 are met. (CLE. 1527 r.f 1928)
The Raw Material
Domestic and imported binder twine is chiefly made from
henequen, sisal, and abaca (manila hemp), the amount of each used in
the manufacture of binder twine during any given period depending
largely upon the relative prices for the individual fibers. It is
believed that henequen is usually the chief component fiber of the
two principal grades of domestic binder twine which are known in the
trade as 500- foot Standard and 500- foot White Sisal, and which ac-
count for about 85 per cent of total domestic production of all
bind-er twine. The better gr.-des of twine, those of 600 feet and 650
feet to the pounds, contain only abaca, or abaca, mixed with sisal
and/ or henequen.
Sisal and henequen fibers
Sisal and henequen fibers are obtained from the leaves of two
closely related but distinct species of the genue Agave . B th species
9829
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originated in the Yucat a n peninsula, and they are not known elsewhere ex-
cept as introduced plants. Both are cultivated on large plantations in
the Tropics, and the fibers are cleaned "by means of the same type of
machines. Both fibers are used in the manufacture of ropes of small
diameter and hard-fiber twines other than binder twine.
(a) Sisal . - The sisal plant, Ag av e sis al ana , is now regularly
cultivated on la^ge plantations in Kenya Colony, Tanganyika, Portuguese
East Africa, Senegal, Dahomey, Sumatra, Java, India, and Haiti. The
most extensive production is in tropical East Africa and Sumatra and
Java. Cultivation in many areas was not greatly developed prior to the
World War.
(b) Henequen. - The henequen plant, Agave fourcroydes, is culti-
vated in Yucatan and Campeche, and to a less extent in the States of
Chiapas, Tamaulipas, and Sinaloa in Mexico, and in Cuba.
The principal production of the fiber is in Yucatan where the
total outpiit is marketed under the direction of Los Henequeneros de
Yucatan Sociedad Cooperative. . The Cooperativa determines the price of
the fiber to foreign purchasers from time to time, and occasionally re-
stricts the output. A reduction in fiber output of 20 per cent of pro-
duction in 1029 was enforced from 1930 to June 30, 1933, inclusive,
by the Yucatan Cooperativa. to meet falling prices occasioned by growing
stocks and declining world consumption of hard fibers. On March 4, 1935,
the Governor of Yucatan levied a, production tax on the fiber, which will
increa.ee progressively with the market price of the fiber from 4 to 10
centavos per kilogram, and a. processing tax of 0.52 centavos on every
kilogram of fiber "industrialized" in the States.
( c) Production . - Before 1910 the world was dependent upon Mexico
for its supply of agave fibers. Since that time henequen plantations
have come into production in Cuba and sisal plantations elsewhere. The
result has been an increasing production of sisal and henequen fibers, as
may be noted from Table 1.
Table 1. - World production of agave fibers, 1909-1930
Period
Sisal
Henequen
Metric tons
1909-1913
(5- year average)
1926
1927
1928
1929
1930
26 , 700
76,700
94 , 100
98,100
122,100
133,940
106,800
117,000
175,000
113,700
104,000
112,200
Source: Dept. of Agriculture, Circular No. 186, October,
1931, Sisal and Henequen, Plants Yielding Fiber
3829
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for Binder Twine: estimates for 1930 furnished
by; the Department to replace those given in the
circular.
Abr.cr.
Binder twine ras first manufactured almost exclusively from
abeca which for many years came entirely from the Philippine Islands.
The Philippines remain the principal source of abaca, although in re-
cent years the production of this fiber in the ITetherland E a st Indies
has developed. Abaca is widely used in the United States for the maw*'
facture of cordage, rope, and marine Coble.
World ) r«? duct ion of the agave fibers and
abaca since 1530
Production of the agave fibers, as veil as abaca, has increased
since 1330. This increase may partly account for the decline in price of
raw fibers since 1929. Production by princi jal countries and producing
regions is shown in the table below.
Table 2. - Hard fiber: Estimated world production, by countries,
of abaca, sisal, and henequen, 1930-1934
(Lonff tons)
Fiber and producing
area
1330
"•931
1932
1933
1934
Abe ca
Phi lippi ne I s 1 an d s
Netherland Last Indies
159,440
10,000
1.33,850
10 , 000
110,230
10,000
151,000
10,000
172,240
5,000 '
Total
Sisal
East Africa 1/
West Africa 2/
Netherland Last Indies
West Indies 3j_
Haiti
139,440
) 76,000
L35.000
4,600
2,520
143,850
83,000(
66,000
6,350
2,900
120 , 230
85,000
6,000
70,000
6,000
. 3,300
161,000
102,000
6,000
85,000
6,000
3,800
177,240
111,000
10,000
80,000
10 , 000
4,290
Total
158,120
158,250
.170,300
202,800
215^290.'
Henequen
Lexico
Cuba
104,000
10,000
70 , 000
10,000
88,000
. 9,820
93,000
11,000
92,000
10,000
Total
114,000
80 , 000
97 , 820
104,000
102,000
Total sisal and
henequen
252,120 238,250 ?68,12C 306,800 317,290
Sj3&x>2Cl Dept. of Agriculture, Bureau of Flant Industry. The estimates, pro-
vided by the Dept. of Agriculture are based on data obtained from
the Philippine Fiber Inspection Service, Uiggleaworth & Co., Ltd. ,
9823
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London, and consular reports,
1/ Includes Tanganyika, Kenya Colony, and Portuguese East Africa.
2/ Principally Senegal and Dahomey.
3/ Principally British West Indies „ n d Jamaica; come production in
Salvador may be included.
ITO'IZ:^ World production of fcorium, maguey, s nd Maritius hemp, not sshovm
m this tabulation, amounts to about 12.CCC tons annually.
Tariff treatment
Si cal, henequen, abaca are imported free of duty, under Parr T£~>v
168-: of the Tariff Act of 1930. They were duty-free under the Tariff Acts
of 192.3 and 1913.
I mports
Imports of sisal and henequen and the unit value of imports
since 1927 by principal countries of shipment, are shown in Table 5. Im-
ports of the raw fiber from the Netherlands, Germany, and the United
Kingdom are believed largely to repre ent shipments from tne plantations of
Africa and the Netherland East Indies that were transshipped' to the
United States.
In Table 3 it will be noted that the unit value of all sisal and
henequen imports declined from 7.0 cents a pound in 1929 to 2.2 cents a
pound in 1932, when the unit values for fiber from all sources reached
their lowest level in history. In 1933 the unit value of all imports
rose only three-tenths of 1 cent. During 1932 imports of sisal and
henequen, amounting to 168,205 long tons, were greater than in any vear
of tne 1927 to 1954 period, and in 1933 total Inroorta of 126,268 Ion-
tons exceeded the imports of 1927, 1930, 1931, and 1934.
Domestic Consumption
Channels of trade
Binder twine is sold to consuming farmers by farm implement
dealers, general retail stores, supply houses, and farm cooperative buy-
ing groups.
0n3 -y about 20 Per cent of the binder twine manufactured by the
State prisons is sold outside the State of manufacture. In 193d none
of the binder twine made in the prisons ef Wisconsin and North Dakotr — s
sola outside these States. About 68 per cent of orison-made binder
twine is sold direct to retailers, 16 per cent to wholesalers and
jobbers, 6 per cent to farm cooperatives, and 10 per cent through other
channels including direct purchases by farmers.
Uses of binder twin e
In different areas of the country bin er twine is used for
Harvesting a number of grains, although its greatest use is to be
9829
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found in the wheat, barley, oats, rye, and rice growing regions. Bind-
er twine is used for harvesting sorghum grains and buckwheat, as well
as flax and grass-seed crops. No binder twine is used for harvesting
corn in the corn-belt area where corn is picked in the field from the
standing stalks, but in such eastern States as uhio, Virginia, Maryland,
Pennsylvania, and Delaware, it is employed where the stalks are cut and
the corn is harvested from the shock. Much corn for silage is first
cut and bound with a binder.
Consumption per acre
The amount of twine used in any area depends upon the methods of
narvesting, the stand of grain or corn acre, and the relative amount of
grain straw, the latter being related to rainfall during the growing
season. Under usual crop conditions, about 2.5 pounds of twine are used
for harvesting an acre of wheat, 2.3 pounds for oats and barley, 2,8
pounds for rye, 5 pounds for rice, and 3 ■ pounds for an acre of flax. For
shocking corn about 2.2 pounds per acre are required, and for bundling
corn for silage about 3.4 pounds are required. To a limited extent the
growing practice of cutting corn ensilage in the field has reduced the
consumption of binder twine.
Decreased twine consumption
The consumption of binder twine since 1920 has declined partly as
a result of the increasing use of the combined harvester-thresher, es-
pecially in the Great Plains area. Approximately 3 million acres of
wheat, oats, barley, and rye were harvested by the combine in 1920. In
1932 'the acreage 'of these grains harvested by the combine reached 25
million. The use of the combine spread from the Pacific Coast to the dry
areas of Oklahoma, Kansas, and Texas in 1918, and then to almost every
State east to the Atlantic and north into Canada. An example of its
spread is seen in North Dakota where three combines were reported in 1925,
27 in 1926, 249 in 1927, and 1,172 in 1928.
Drought conditions and crop restriction in 1933 and 1934 also ac-
counted for a decrease in binder-twine consumption. As compared with
1932, when approximately 112.9 million acres of wheat, oats, barley, and
rye were harvested, there were harvested only 96..4 million acres in 1933
and 81.7 million acres in 1934, as may be seen from Table 4. With this
reduction in acreage correlated with the acreage of these four grains
harvested with the combine, the total acreage of wheat, oats, barley, and
rye for which twine was used in harvesting amounted to 87.9 million in
1931, as compared with 76.4 million in, 1933 and 64.7 million in 1934.
•Vith an increased acreage of all these grains estimated for the
season of 1935, according to the Department of Agriculture, including a
liberal estimate for the total acreage which will be harvested by combines,
a total of about 78 million acreas requiring twine is anticipated in 1935.
This increase is expected to require a total of about 195 million nounds
of binder twine for the harvesting of wheat, oats, barley, and rye during
1935, as compared, with about 136 million pounds in 1934, and 168.1 mil-
lion in 1933, as shown in Table 4. This table also shows the average
price per pound of twine and the total cost of twine to the farmers.
9829
- 33-
Table 4. - Domestic consumption of "binder twine for harvesting wheat,
oats, "barley, and rye, in relation to total acreage and the use of
the combine harvester, and the price per pound and the total cost
of twine used, 1919-1935.
Acreage
Binder
twine
of :
Harvested:
Using :
: Amount:
Total : Price per:
Total
Year :
Specified:
by :
Twine :
: per :
used :pound to :
cost to
cro"os :
combine :
: acre :
: fanners :
farmers
Mil]
129.0 :
.'.ons of ac
3 :
:res :
126.0 :
: pounds:
Million: :
pounds : :
•
302.4: $0,258 :
Million
: 2.40 :
dollars
1919
$78.0
1920
116.1 !
3 !
113.1 :
: 2.70 :
305.4: .200 '
61.1
1921
121.1 :
3
118.1 :
: 2.25 ■
265.7: .160
42.5
1922
116.0 :
4 :
112.0 :
: 2.45
274.4: .130
35.7
1923
111.9
4 !
107.9 :
: 2.50
269.8: .134
36.2
1924
105.1
4
101.1 :
: 2.75
278.0: .138
38.4
1925
108.4
6
102.4 :
: 2.55
261.1: .153
39.9
1926
110.4
8
102.4 :
: 2.40
245.8: .160
: 39.3
1927
111.9
12
- 99.9 :
: 2.40
239.8 .152
: 36.4
1928
• 114.3
17
97.3 .:
: 2.60
: 253.0 .142
: 35.9
1929
117.4
22
95.4 :
: 2.50
: 238.5.
.142
: 33.9
1930
• 116.9
24
92.9 :
: 2.60
• 241.5
.144
: 34.8
1931
■ 109.6
: 25
! 84.6 :
: 2.45
: 207.3
.122
: 25.3
1932
: 112.9
25
: 87.9 :
: 2.50
: 219.8
.088
: 19.3
1933 1/
! 96.4
: 30
: 76.4 :
: 2.20
: 168.1
.081
: 13.6
1934 1/
: 81.7
: 17
: 64.7 :
: 2.10
: 136.0
.096
: 13.1
1935 2/
: 3/102.8
: 25
: 78.0 :
: 2.50
: 195.0
4/ .086
: 16.8
Source: Dept. of "Agriculture, Bureau of Agricultural Economics.
1/ Subject to possible revision.
2/ Estimated by Bureau of Agricultural Economics, H?y 15, 1935, on the
basis of the acreage of winter grains remaining for harvest and intentions
to plant spring grains, along "ith an average twine consumption of 2.5
pounds per acre.
Zj The estimated acreage of the f c ■■ ./ groins for the 1935 harvest, over
1934, is as follows: Winter and spring wheat, 48.3 million in 1935 and
42.2 million in 1934; oats, 39.1 million in 1935 and 30 million in 1934;
barley, 11.9 million in 1935 and 7.0 million in 1934; rye, 3.5 million
in 1935 and 2 million in 1934.
4/ Estimated as being 20 per cent greater than the wholesale price of 500-
foot white sisal and standard binder twine set for the 1935 season on
April 18, 1935. (The wholesale price of this grade of twine ranged from
74 to 81 -oer cent of the r>rice to the farmer in the years 1931-1934.)
9829
-334-
Tho Domestic Industry
Domestic ."binder twine is produced by 15 dif 'erent companies in IS
mills situated in Massachusetts, Hon York, Pennsylvania, Her.' Jersey,
Ohio, Illinois, i'issouri, Louisiana, Texas, and California, and \iy 8
State prisons in the grain growing regions of the West. The heaviest
production by private manufacturers is in Massachusetts, Hew York, Ohio,
Illinois, and Louisiana.
The -private industry
In 1929 there were about 17 mills in which binder twine was pro-
duced^ including three manufacturing only binder twine. In 193d- there
were 16 mills, two producing binder twine exclusively. A total of approx-
imately 1,457 wage earners was employed in the production of binder twine
in 19.29 at .a payroll for the year of 'about $1 ,.-1-75,000; about 1,200 wage
earners were employed in 1934 at -a payroll for the year of roughly
$953,000. • : • ; : . .
During the period May, "1929, to May, 19?2, mills producing binder
twine at iiprth Kansas City, flo. , ■ St. "Paul, Minn. , and Portland, Oreg. ,
were closed. The St. Paul mill, 'producing only binder twine, prior to
its closing had a relatively large annual output, while' the' production
of the two- other mills which" were closed was .-comparable' with the annual
output of some of the medium- si zed oo'rdage mills in the country. :
1932, however,' t'-'o very
of binder .'twine, one at
Moreover , a. former nan-
Between 1929 and the second quarter of
small cordage mills commenced the production
Hew, Orleans and the, other at Houston, Texas,
ufacturer of binder, twine, not a party to this complaint, although pro-
ducing no binder twine in 1929 and 1930, began again the manufacture of
binder twine in 1931 and increased yearly production thereafter.
(a) Concentration of production. - There is a high degree of con-
centration of production in the binder twine industry. The two largest
producers since 1929 have accounted for about 75 per cent of total out-
out; four small- to-medium- size companies have produced about 23 per
cent of the total, while some eight to ten very snail remaining produc-
ers have accounted for "about 2 per cent of the total production of bind-
er twine.
(b) Branch factories and fiber jlantations . - There crP- five fib-
er mills abroad operated in connection with branch factories controlled
by the two leading domestic producers, including single mills in Sweden
(established in 1905), Prance (1906), Germany (1908), and two in Canada
(1902 and 1905).
These same domestic producers own and operate abroad three fiber
plantations, two of which are situated in Cuba, and one in Davao province
in the Philippine Islands. The two Cuban plantations, together valued
at $1,300,000, r.re devoted to the culture of henequen. The Philippines
plantation, although not yet in bearing, is for the production of abaca.
98^
(c) The in or tance of "binder twine to the domestic producers. -
With the excemtio 1 of its production by one large producer engaged pri-
marily in the manufacture of "an machinery, binder twine is manufactured
by producers of yarn, ro^e, oakum, end twines other than binder twine, -
all made principally from hard fibers. T7ith respect to the ten com-
plainant manufacturers - all cordage producers, - binder twine accounted
for about 1-3 per cent of the total value of al 1 - commodities produced 'by
these companies in 1931, 52 per cent in 1932, and 42 per cent in 1933,
and 39 per cent during the first nine months". of , 1934. ..The binder- twine pro-
duction of four of the five largest complainant producers (the four class-
ified above as snaH-to-r.iedium in size) amounted to 56 per cent of the
total factory value of all fiber products manufactured by them between
1931 and September, 1934. T7ith respect to each of these four producers,
the value of bindor-twine production in relation to the value of total
production of all commodities ranged from 30 per cent to 75 per cent.
Binder-twine production is relatively 1">S3 important to the five other
complainants, designated as very snail. 3?or four of these producers
operating throughout the period 1931 to September, 193-1, binder twine
amounted to only 5 per cent of the total value of all products which
they manufactured, and was of greater relative importance (38 per cent)
to only one producer. In relation to total production since 1932 by all
five of the \ r er r snail complainant producers, binder twine a.ccounted
only for 3 per cent of the value of all products which they manufactur-
ed.
The da.te of the following table indicate the importance of binder
twine as a cordage- product* of 'private 'industry in the 'United States
since 1927. In 192S binder twine amounted to 33 jer cent in quantity
and 18 per cent in value of all cordage and twine products priva.tely
manufactured, as con 'ared with 35 per cent in quantity and 16 per cent
in value in 1933.
9829
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St.-'te -ori?on hinder fr-'ine industry
: y ■ ■ the manufacture for sale to the public of "binder
twine by some eight or nine State prisons hp„s -constituted an important
-orison industry nd has represented a substantial proportion of "total
stic production. "Under twine is not produced in the Federal prisons,
(a) I;r -ortaiv-.e of hinder twine npnuf ^cture as a prison industry. -
Prison binder-twine production cane-at the insistence of farners in the
wheat- raising eomnrunities of the T7Gst, after the ITationai Cordage Co.,
ostp.blis l 1887, and its predecessors, the United States- Cordage Co.
(1894 to 1395), the Standard Rooe £ Twine Co. (1895 to 1905) , and the
Standard Cordage Co. (1S05 to 1910), tried through "trust" organizations
to monopolize completely the cordage and tuine industry in the United
States by attempting to control not only the marketing of nanila hemp
cr) and Mexican sisal (honequen) , but also the manufacture of cordage
machinery.
The first State prison binder- twine mill ws established by Minn-
esota in 1891. The Minnesota prison plant soon became self-supporting
and a source of revenue to the State. Its success led other Stp.tes to
establish prison plants, including Kansps in 1398, ITorth Dakota in 1900,
Missouri in 1905, Irdiana in 1906, Michigan in 1908, and in South Dakota
in 1909. The first appropriation for a prison hinder- twine factory was
mrae in Wisconsin in 1507 and in Oklahoma in 1916. Hone of the other
arisen plants has been so financially successful as the one in Minnesota.
Some have jeen operated at continuing losses.
The manufacture of binder twine is an important ;:>rison industry.
Of all prison goods and farm products produced in 47 Stp.tes in 1923
for the competitive market under the public account, piece-price, and
contract systems, binder twine accounted for approximately A 5, 550, 000
of a total value of $44,826,622, or 12 per cent. In 1932, binder twine
accounted for 14 per cent of the value of State prison manufactures and
farm produce entering the competitive market, cr $-.= ,050,123 of a total
528,895-, 629. A total of 1,365 inmates- was engaged full or part time in
the production of binder twine in 1923, and 1,572 in 1932.
(b) Production by orisons. - Among' the States in which prisons
oroduce binder twine, Minnesota, the most important, accounted for 46
per cent of the total in 1934, and was followed by Wisconsin and
Michigan. Table 5 shews the production of prison binder twine by States
in 1923 pnd in 1932 and 1934 for both Str.te use and State account.
3inder twine jro-duced for State use is almost negligible, amounting
to less than 1 :>er cent of the total.
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^1
Domestic Production
lab^e 7 shows the total yearly production of all grades of binder
Wine in the United States since 1923. Complete datp are not avail-
able on the production by the iriva$;e manufacturers and the prisons of
Lfferent grades of binder twine, i.e., 500-foot Standard, 600-foot
I'anila, etc. Date furnished the National He cover-/ Administration in-
dicate, however, that from Bo to 94 -ber" 'cent"* of all binder twine pro-
duced between 1929 J and 1051- wps 500-foot Standard and- 500-foot Unite
Sisal .twine. ■ :
Table 7. - Binder twine: Production by all private companies
and the arisons, and relation of orison to total domes-
tic production
'
Total domes-
Production
■
Patio of :
: Index of
Year
tic produc-
hy
Prison . :
prison to :
: total
tion .( :riv ;.te
private
i
production :
total domestic:
: product ion
and : oriso _>
companies
:
production :
:
Founds
:
Per Cent :
:1923 ;= 100
1925
295,357,912
1/239,800,117
55,557,795
:: 18.81 :
: 100.00
1925
289,959,1 1
1/233, 650, 54?
56,298,552
:: 19.42 :
: 93.17
1927
227,60.3,.692
1/15,9, .795, 2.3.8
57,808,454
: : 25.40 :
: 77.06
1929
: 232,071,195
: 2/ 134, 749, 515
47, 322, 550
:: 20.39
: 78.57
1931
: 190,214,06^
2/138,052,86-1
52,151,200
:: 27.42 :
: 64.40
1932
! 222,887,517
: 2/159, 175, 842
. 63,711,575
:: 23.53
: 75.46
1933
! 198, '153, 995
! 2/141 ,331, 259
57,135,737
:: 23.79 :
: 67.19
193-
! 150, 357. -1-20
: 2/100, 355, 097
: 50,002,323
:: 33.26 . :
: 51.24
1/ c
oiisus of Manufactures.
2/ Total based en Data submitted to the National Recovery Administration
From the da.ta in the foregoing table it will be noted that total
domestic production of binder tuine in 1934 was slightly more than
half of the output in 1923, production in 193d amounting to 150,357,000
pounds as compared with 295,^353,000 pounds in 1923. Prison production
did not decline during the period 1923 to 193d nearly as greatly as
production by the private manufacturers, t as is indicated by the in-
creasing ratio of prison production tq total production. Prison-made
binder twine accounted for IS per cent of total domestic production
of binder twine in 1923 and 53 per "cent in 1934. There are 55,568,000
pounds of binder twine produced in the prisons in 1923 and 50,990,000
in 193d.
Table 3 shows the production of binder twine since 1929 by the
ten' conplainant producers, in prisons, and other private manufacturers
in relation to total production. It will be noted that while the
ratio of production by the ten complainant producers to total pro-
duction declined only one point from 1929 to 1934, the ratio of pro-
9329
-340-
duction "by other private manufacturers in relation to total production
declined 12 points, and that of the prisons increased 13 points.
Table 8. - Binder twine: Domestic production by complainant
companies, other manufacturers, and prisons, 1929-1934
J
Prison
Other
:H a tio to' total
: Cora-
Period Total : plainant
:Com- : :
: plain- :Pri son: Other
: ant : '
: Pounds
•
1929 232,072,195:74,067,629: 47,322,550
1931 190,214,064:67,671,825: 52,161,200
1932 222,887,517:79,120,940: 63,711,675
1933 198,466,996:64,618,332: 57,135,737
1934 150,357,420:46,524,644: 50,002,323
110,682,016
70,381,039
80,054,902
76,712,877
53,830,453
: Per cent
.31.92: 20.39:47.69
:35.58: 27.42:37.00
:35.50: 28.58:35.92
:32.56: 28.79-38.65
:30.94: 33.26:35.80
1935
( Jan. -Feb. ) 23,190,233
(.Jan. -Mar.)
5,834,000:1/9,816,233: 7,540,000
-. : 10,224,350:
25.16
42.33:32.51
Source: Census of Manufactures and data submitted to the National Recovery
• Administration and the Prison Labor Authority.
1_/ Estimated
Total production of binder twine and production by the ten com-
plainant-producers, the prisons, and. other private. -manufacturers,
given in the foregoing table, are expressed in terms of indices of
1929 in Table 9. , "'
Table 9. - Binder : twine: Indices showing trend of domestic
production since 1929
(1929 = 100)
p
eriod
Total
Complainant
Pri<
son
Other
1929
100
,00
100
.00
100
.00
100
.00
1931
81
96
91
.36
110
.22
33
.59
1932
96
.04
106
.82
134
.63
72
,33
1933
85
52
87
.24
120
.74
69
.31
1954
64
.79
62
.81
105
.66
48
,63
c
arry-over
Unsold binder twine carried over from one season to the next by
the prisons and by the private manufacturers has increased since 1931.
It is estimated that the combined carry-over of the prisons and the
private manufacturers amounted to 55 million pounds in 1932, 91 million
pounds in 1933, and 124 million pounds in 1934, an increase in 1934 over
1932 of 69 million pounds, or 125 per cent. Carry-over of the private
producers has increased at a greater rate than carry-over of the prisons
and in greater increasing ratio to production.
9829
-341-
iotal carry-over on October 1 of all the private manufacturers in
tile country, not including the carry-over of one of the medium-sized
complainant producers, amounted to 42,117,970 pounds in 1931, 40,966,238
pounds in 1932, 74,463,347 pounds in 1933, and 94,007,733 pounds in
1934, an increase from 1931 to 1934 of 51,889,768 pounds, or 123 per
cent, and an increase from 1932 to 1934 of 53,041,500 pounds, or 129
per cent.
Total carry-over as of December 1 of six of the eight prisons
producing binder twine, including tiie carry-over of the three largest
producing prisons, amounted to 11,781,393 pounds in 1932, 11,169,376
pounds in 1933, and 22,411,596 pounds in 1934, an increase from 1932 to
1934 of 10,630,203 pounds, or 90 per cent!
With respect to total production in each division of the binder
twine industry, the carry-over of the private manufacturers amounted to
roughly 26 per cent in 1932 and 94 per cent in 1934 of total private
production; the carry-over of the -orisons in 1932 amounted to roughly
19 per cent and in 1934 to 45 per cent of total prison production.
Exports.
The data in Trble 10, below, show the quantity, value, and unit
value of domestic exports of binder twine, by principal countries of
destination, since 1923. Exports of the different grades of binder twine,
i.e., 500-foot Standard, etc., are not separately recorded.
Total domestic exports of binder twine declined from 74,407,000
pounds in 1923 to 6,703,000 pounds in 1934, a decrease of 91 per cent.
Exports in 1934 were 40 per cent less than a total of 16,779,000 pounds
in 1929. The unit value of exports declined from $0,107 in 1929 to
$0,064 in 1934, a decrease of $0,043, or 40 per cent.
In 1933 and 1934 Argentina was the largest foreign market for
binder twine exported from the United States, with Uruguay next in im-
portance. Other countries were unimportant as markets for domestic
exports of binder twine in these years. Argentina took 33 per cent of
this country's exports in 1929, 77 per cent in 1933, and 87 per cent in
1934. Until 1928 Canada was the United States' best customer of binder
twine. Since then exports to Canada have declined greatly. As will be
noted from data given later in this report, for a number of years
Canada has been an important source of binder twine imported into the
United States. Since 1928 imports from Canada have exceeded exports
to that country. Exports of binder twine to Can-' a in 1934 amounted to
only 311,015 pounds; in the same year imports from Canada amounted to
2,943,107 pounds. Denmark, France, Bussia, and the United Kingdom,
formerly important markets for binder twine exported from the United
States, in 1934 took none of this country's exports.
The two largest private producers since 1928 have exported something
in excess of 95 per cent of all domestic exports of binder twine. The
largest producer since 1929 has noticeably increased its ratio of exports
in relation to the total annual exports at the expense of the other
producer.
9829
-342-
Ko prison-made binder twine is exported. Hone of the ten complain-
ant producers with exception of one reports exports of hinder twine for
the years 1929 to 1934.
Imports r
By countries
1/
Imports of binder twine increased from 18,946,000 pounds .in 1929
to 47,927,000 pounds in the peak year of 1934, an increase of 153 per
cent, and then declined to 25,200,000 pounds in 1934, as may be seen
from the data in Table 11. In 1933 and 1934, Mexico, Cuba, and the
Netherlands were, in the order named, the chief sources of imported
binder twine, followed, by Canada and the United Kingdom. Imports of the
different grades of binder twine are not separately recorded.
Unit values
In Table 11 it will be noted that the unit value of all imports
since 1923 was the lowest in 1933, the same year during which total im-
ports in quantity reached, their highest point. The value of imports
declined from $0,051 per pound in 1932 to $0,045 in 1933, a decrease of
12 per cent, and from $0,106 in 1929, a decrease of $0,061, or 58 per
cent. The unit value of imports increased from $0,045 in 1933 to $0,056
in 1934, an increase of 24 per cent.
By quarters
Table 12 shows imports by quarters since 1931.
1/ General imports and imports for consumption for most years are
identical and in other years only slightly different in amount.
There are no reexports of binder twine.
9829
-343-
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-345-
Table 12. - Binder twine: General imports into the
United States, by quarters since 1931
Feriod
Quantity
Value
Un:
It value
r runds
1929
18,946,484
$2,013,360
$0,106
1931
22,888,560
. 1
,890,537
'.083
1932
31,992,248
1
,623,197
.051
1933
47,927,491
2
,177,315
.045
1934
25,200,116
1
,401,329
.056
By quarters
1931
First
1,290,142
112,235
.087
Second
13,256,765
1
,057,345
.080
Third
7,038,153
606,059
.086
Fourth
1,303,520
114,898
.088
1932
First
1,920,736
113,163
.059
Second
20,845,110
1
,065,141
.051
Third
6,658,862
317,540
.048
Four th
2,567,540
127,353
.050
1933
First
7,525,169
359,171
.049
Second
28,771,499
1
,249,824
.043
Third
5,844,944
241,071
.041
Fourth
5,785,879
317,248
.055
1934
First
7,770,252
457 , 389
.059
Second
10,866,077
620,562
.057
Third
3,398,390
203,368
.060
Fourth
3,165,397
120,010
.038
1935
First
3,730,276
181,596
.049
Source: Foreign
Comnu-rce and navigation
of the United
States.
Imports of tinder twine in the second cuarter of 1933, amounting
to 28,771,000 pounds, were greater than in any quarter of the period
1931 to 1934. Imports were the heaviest for any quarter of . the year
in the same . quarter of 1932, amounting to 20,845,000 pounds, and again
in the same quarter in 1934, reaching a smaller total of 10,866,077
pounds.
There is a decided seasonal trend to imports of hinder twine which
increase during the first quarter, reach their peak in the second quarter,
just prior to the active summer harvest season in this country, and
then decline thereafter until the end of the year.
9829
-346-
3y customs districts
r
Imports of "binder twine are made along the Great Lakes, Atlantic
Coast, the Gulf and the Pacific Coast. Heaviest imports, amounting to
about 48 per cent of the total, are entered through the New Orleans
and Galveston custom districts. The heaviest., imports on the Great Lakes
are entered through the Duluth and Superior customs districts through
which pass about 18 per cent of all imports. The Philadelphia and
Maryland customs districts account for somewhat more than two-thirds
of all hinder twine entered along the Atlantic Coast. About two-thirds
of all binder twine imported on the Pacific Coast is entered through
the Oregon customs district.
Relation of Imports to Production
The following table shows the ratio of total imports to total
production, and the ratio of imports, less domestic exports, to
domestic production for consumption within the United States from 1929
to February 1935.
9829
-347-
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9329
-343-
The data in Table 13 indicate that there was an increasing ratio
of imports to domestic production from 1929 to 1933 and a decreasing
ratio thereafter. Domestic production of binder twine for sale and
consumption within the United States in relation to general imports,
less domestic exports, shows a ratio of 21.78 per cent in .1933 and
a ratio of only 1.01 per cent in '1929, as compared with a ratio of
24.15 in 1933 and a ratio of 8.16 in 1928 when all imports are
contrasted with total production for "both export and domestic con-
sumption.
The data in Table 14 show the ratio of binder twine imports to
total private production and separately to production by the com-
plainants and also to production by all other manufacturers, in-
cluding the largest producer, from 1929 to 1934, and by quarters in
1933 and 1934. It will be noted that imports reached their peal: in
the second quarter of 1933, both in absolute .amount and in ratio to
either total private production, or production by the complainant
producers, or production by other manufacturers. The ratio of imports
to total private production in this quarter rose to 73 from 18 per cent
in the first quarter, and then declined in the following two quarters
to 19 per cent.' There was a corresponding but minor peak in the
following year, when in the second quarter of 1934, the ratio of
imports to totals private production rose to 35 per cent.. The ratio
of imports to production by the complainant companies was' 26 in 1929,
40 in 1932, 74 in 1933, and 54 in 1934.
9829
-349-
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9329
-350-
Prices of Binder Twine
The price system
The open price provisions in the Code of Fair Conpetition for the
Cordage and Twine Industry did not change the price system which has
prevailed in the private hinder-twine manufacturing industry for a number
of years. (*) The code provisions, given in Appendix A, merely made
possible the continuance of a system whereby one or the other of the lead-
ing manufacturers announces, usually during March or April of each year,
prices which, through established discounts, are rigidly adhered to by
all private producers until new prices are sot.
Prices for prison-made binder twine are usually lower than prices
for priva/tely manufactured binder twine. In the past the differential
has been greater than in the last few years. In 1932, 1933, and 1934,
the prices for prison-made twine have ranged from about two-fifths of 1
cent to Ijr cents per pound less than prices for privately manufactured
twine, allowances being made for the various discounts effective. The
average differential in the 1932-1934 period was between 1/2 to 3/4 cent
per pound.
In the prison industry pricos far tho selling sodson announced by
the Minnesota prison authorities a week or two earlier than the date on
which prices are set in the private industry are, for the most part, used
as bases for the other prison producers in publishing their prices for the
year.
Domestic -prices and the prices of raw fiber
Once—yearly price changes have made for a rigid price structure with
respect to the domestic binder twine industry. Thus in the last few
years wholesale prices of domestic binder twine have not reflected the
changes in the price of raw fiber nearly as quickly and as much as have the
wholesale prices of imported binder twine. Therefore, with falling fiber
prices, greater competition from imported binder twine has been experienced.
The accompanying char t (**) shows graphically through curves the relation
of the wholesale prices of the two leading grades of domestic binder twine,
500-foot Standard or White Sisal, and 600-foot manila, - along with two
composite prices of fiber (based on New York quotations) largely used in
the manufacture of each grade of twine. For further comparison there is a
curve showing the unit value of imported binder twine, inasmuch as the
wholesale prices of imported twine are determined to a great extent by the
entered value of imports. The curve showing the trend of the composite
weighted price of henequen, Ho. 2 British East African sisal, and grade B
Java sisal represents the Hew York prices of fiber used in the manufacture
of 500-foot Standard or White Sisal twine, and the curve showing the com-
posite weighted price of grades J-2 and 0- abaca, Ho. 1 British East African
sisal and Grade A Java sisal represents the prices of fiber used in the
manufacture of 600-foot Manila twine. All data upon which the curves of
the chart are based are given in Appendix B.
(*) See Appendix A for price discounts followed by the industry.
(**) For the data upon which this chart is based, see Appendix B.
9829
-3 C 1 -
From the curves of the chart it nay be seen that, although the New
York price of hard fiber fell rapidly from 1929 to 1932 and 1933, there
was considerable lag in the lowering of the wholesale prices of domestic
binder twine. In fact, prices of domestic binder twine were raised
slightly in the first quarter of 1929 and then held to this higher level
to be raised again, this time 6 per cent, in the first quarter of 1930,
It may be seen from the price curves that, although the domestic industry
lowered its prices of binder twine twice in 1931, and once again in April,,
1932, before reducing them in 1933 to the lowest level in years, the unit
value of imported binder twine fell more rapidly and as time went on
became more sensitive in reflecting the trend of raw fiber prices.
Both fiber price curves reached their lowest point in the second
quarter of 1932, - that of henequen and sisal dropping 2.36 cents, and
that of abaca and sisal to 2 ? 67 cents. It was not, hoT/ever, until the
following April, 1933, just after a sustained and moderately sharp
decline in the unit value of imports, that the domestic industry -
reduced its wholesale prices to their lowest level, - 500-foot twine
to 6 cents a pound and 600-foot twine to 7 cents a pound. Twine prices
were raised about 29 per cent in the first quarter of 1934, following
a limited increase in the prices of fiber and in the unit value of
imports. In April, 1935, however, domestic wholesale twine prices were
again lowered, following a decrease in raw fiber prices and a corres-
ponding decrease in the unit value of imports.
The spread between raw fiber prices and wholesale prices
Table 15 shows the wholesale prices^) of 500-foot Standard or White
Sisal, 600- foot manila, and 650-foot Superior Manila and Premax twines
and a composite weighted price of the fiber used in the manufacture of
each grade. The fiber prices, wherever related to the wholesale twine
prices for a given period, are, with two exceptions where twine price
changes occurred twice in 1931, for a period beginning approximately
two months before the price of twine was changed and ending two months
before a new twine price was set.
From the data in Table 15, it may be seen that the ratio of the
price of fiber to the wholesale price of 500-foot twine decreased after
1930 from roughly 64 per cent in the period March, 1928, to March, 1931,
to 38 per cent in the period April, 1932, to April, 1933, and again rose
only to 43 per cent in the period April to June, 1935, There was a
similar decrease in the ratio of the price of fiber to the wholesale
price of 600-foot twine. There was a decrease in the ratio of the price
of grade G abaca to the price of 650-foot Superior Manila twine from
65 per cent in the period March, 1928, to March, 1929, to 38 per cent
in the period April to June, 1935.
More significant, however, than the ratio of fiber prices to whole-
sale twine prices, is the difference between the wholesale prices and
fiber prices viewed as an absolute amount over a period of years. The
cost of fiber is the largest single item in total material and manufac-
turing cost in the production of binder twine. For six leading domestic
(*) See Appendix A for discounts prevailing in the industry,
9829
-353.
uq:
9829
-253-
'2
3 &£& af s i * »
I it! 1 8 1 1 J
I S3! I I § I I
« sss s? £ p 3 if
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5 s s«
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irio in
2J2
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® 3«* s £ £ £ 3
111! Ill II
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«s vi vi a
9829
M
manufacturers the cost of fiber accounted for 43 per cent of the total
cost of production in 1933 and 47 per cent in 1934. Thus, in an industry
where fiber cost amounts to about half of the total cost of production,
any substantial reduction of the cost of fiber (indicated by fiber prices),
in relation to total cost, leaves a greater manufacturer's margin from
which profits may be taken.
The spread with respect to each of the wholesale prices for the
three grades of binder twine and the related raw fiber prices, shown in
Table 15, is set forth in Table 16. In each instance the spread is given
both in absolute amount and as an index of the amount for the period
March 31, 1928, to March 16, 1930.
Table 16. - Spread between the orices of raw fiber and the
wholesale prices of domestic binder twine, 1928-1935
500-foot !
Standard :
: 500-foot :
650-foot i
Superior
Period
or White
Si sal :
: Manila :
Manila and Pre max
Amount
1928 and:
1929=100:
: Amount
1928 and
1929=100
: Amount
1928 and
1929=100
March 31, 1928 to
March 16, 1930
$0.0375
100.00 :
: $0.0412
100.00 .
: $0.0531:
100.00
March 17, 1930 to
March 8, 1931
.0482 !
128.53 :
: .0683
165.78
: .0841
158.38
March 9, 1931 to
October 16, 1951
.0603 :
160.80 :
: .0675 !
163.35
: .0746
140.49
October 17, 1931
to April 8, 1932
.0433 :
115.47 :
: .0478
116.02
: .0529
99.62
April 9, 1932 to
April 9, 1933
.0403
107.47 :
: .0453
1C9.95 :: .0475
89.45
April 10, 1933 to
March 18, 1934
.0314
83.73 :
: .0385
93.45
: .0452
: 85.12
March 19, 1934 to
: : :
April 17, 1935
: .0405
: 108.00 :
: .0516
' 125.24
:: .0617: 116.20
► • ■
April 18, 1935 to
• •
» • •
June 1, 1935
: .0415
110.67 :
: .0493
119.66
:: .0572: 107.72
It will be noted from the data in Table 16 that for both 500-foot (*)
and 600-foot twine the spread between the wholesale price and the price
of fiber increased after March, 1950, and was greater in every price
period thereafter with the exception of the period April, 1933, to March,
1934, when binder twine prices were reduced to their lowest level. In
(*) It should be remembered that about 85 "oer cent of total domestic pro-
duction is 500-foot twine.
9829
-355-
this period the amount of the spread with respect to 500-foot twine fell
from 3.75 cents in the ba.se period to 3.14 cents, a decrease of 16 per
cent, and the spread with respect to 600-foot twine from 4.12 cents in
the base period of 3.05 cents, a decrease of about 7 per cent. The amount
of the spread after April, 1935, for 500-foot twine was 11 per cent
greater than in the base period, and for 600-foot twine, 20 per cent
greater. Although the amount of the spread with respect to 650-foot twine
increased 58 per cent in 1931 over the base period, it declined to less
than the amount of the base period from October, 1931, to 1 larch, 1934.
Thereafter, however, it rose above the amount in the base period, 16 per
cent in 1934 and 8 per cent in 1935.
Effect of the National Recovery Program
Labor -provisions of the code
The Code of Fair Competition for the Cordage and Twine Industry
prohibited employment in the industry of all persons under 16 years of
age, and of all persons under 18 in operations or occupations which were
hazardous in nature or dangerous to health. The code contained a number
of provisions with 'respect to wages and hours which were pertinent to this
complaint.
(a) TTage provisions . - The minimum hourly wage to be paid any worker
in the industry was 30 cents in specified southern States and 32- a - cents
in all other States. There was no minimum weekly wage for plant or factory
; workers. The minimum rate of pay for all office and clerical employees was
$14 per week. It was further provided that "Every member of the industry
shall increase the, rate of pay of all employees paid either by hour or
• piece, *** and sh~ll increase the rate of- pay for all employees paid by the
day, week, or mon+h, now receiving less than thirty-five dollars ($35.00)
per week, *** to not less than ninety per cent (90;.) of the rates paid by
said member of the industry, *** for the -same class of work at the same
place of business in June, 1929, provided that no employee shall be paid
less than the minimum fixed in this Code.'"
(b) Hour previsions . - Factory and plant workers and office and
clerical employees' were not permitted to work in excess of 40 hours a
week, except that they might have been employed 48 hours in any one week
provided their average employment for any calendar . quarter in the year did
not exceed 40 hours per week. All factory and plant workers were to re-
ceive time and one-third for all time over 40 hours a week. Shipping
crews, watchmen, Esngineers, cleaners, etc., might not have been employed
in excess of 44 hours a week, "except in event of emergency, and must have
been paid time and one-third for overtime.
Employment and payroll
The hours and wages of workers employed by the six leading producers
in the manufacture of about 98 per cent of the total binder twine output
of the private industry are shown in Table 17. Employment and payroll data
shown in this table are based on information submitted for all the mills
operated by these companies and are representative of production in such
widely scattered States as Massachusetts, Ohio, Illinois, and Louisiana.
9329
-356-
TABLE 17
Binder twine; Employment and payroll for the six
leading private domestic producers, 1929 and 1932
to January, 1935.
1
Number-
Hours
Man-hours
Total
Average
Ave rage
(
of
per worker
per payroll
weekly
weekly
hourly
Period
employees
per week
period
payroll
wage
wage
Average l/
1929
1,435
48.5
69,529
$30,302
$21.12
$0,436
1932
1,501
49.1
73,677
27,994
18.65
.380
1933
1,367
44.1
60,34-4
22,340
16.34
.370
1934
1,196
38.2
45,641
19,843
16.59
.435
January, 1934
1,372
. 38.6
52,897
22,002
16.04
.416
Code effective March 7, 1934
April, 1934, to
January, 1935 : 1;, 107
15th of month
1932
January : 1,325
April ; 1,516
July : 1,897
October : 1,266
1933
January : 1,518
April : 1,399
July : 1,202
October : 1,347
1934
January : 1,372
38.0
42,053
18, 743
33.6 : 52,897 ;• 22,002
Code effective March 7, 1934-
16.93
44.0
58,236
23,791
17.96
44.5
67,476
26,010
17.16
58.0
109,957
40,618
21.41
46.6
59,040
21,557
17,03
47.6
72,202
25,367
16.71
43.4
60,754
21,465
15.34
46.8
56,217
20,501
17.06
38.8
52,201
22,028
15,35
16.04
.446
.409
.385
.369
.365
.351
.353
.365
.422
.416
April
July
October
1935
January
1,455
1,035
923
1,015
38.2
37.8
37.9
38.0
55,519
39, 129
35,018
38,546
23,976
17,584
15, 808
17,603
16.48
16.99
17.13
17.34
.432
.449
.451
.457
Source; Complaint and other data furnished the National Recovery Adminis-
tration.
l/ January, April, July, October.
9829
-357-
From the data of the foregoing table it may he seen that the six
leading producers, accounting for ah out 98 per cent of private domestic
production, as .a wnole did not exceed the maximum work week of 40 hours
or pay less than the minimum hoiu-ly rate of 32} cents after going under
the code. The table shows .'that after the adoption of the code the number
of wage earners increased sharply in -April, then declined even more
abruptly to a ne\ low level of 923 in October, 1934, and rose only to
1,015 in January, 1935. The tfend of the total weekly payroll after the
code became effective followed the course of the number of workers en-
gaged. After the code became effective, however, there was a gradual
upward trend in the weekly wage and the hourly rate, the former increas-
ing from $16.48 to $17.34 from April, 1934, to January, 1935, and the
latter increasing from $0,432 to $0457 during the same period.
Separate data for the operations of each producer indicate that none
paid less than the minimum hourly rate in the post-code period, although
two complainant producers in a total of four payroll periods slightly
exceeded the prescribed work week.
The data of the above table indicate that the binder twine industry
complied with the code admonition that hourly wages should be increased
at least to 90 per cent of what jthey were in June, 1929.
Part of the data in the foregoing table is expressed in the form of
indices of 1929 in Table 18.
Table 18..- Binder twine: Indices of employment and payroll for
the six leading private ^domestic producers, 1929 and. 1932
to January, 1935 :
Per' od
(15th of specified month)
1929
1932
1933
1954
Number : Hours per : Average : Average
of : worker : weekly : hourly
enroloyees: per week : wage _ : wage
100.0.
104.6
95 . 3
S3. 3
' 1929 =
100
100.0
100.0 :
100.0
101.2
88.3 :
87.2
■ 90.9
77.4 :
34.9
: 78.3
73.6 :
99.8
January, 1934
95.6
79.6
76.0 : 95.4
-Code effective Iiarch 7, 1934-
April, 1934, to January, 1935
77.1
78.4
80.2 .: 102.3
1933
January
April
July
October
1934
Januar^-
105.8
97.5
83.8
93.9
95.6
98.1
89.5
96.5
30.0
79.6
79.1
72.6
80,8
.77.4
76.0
80.5
81.0
83.7
96.8
95.4
-Code effective March 7, 1934-
9829
(Cont'd)
-353-
Table 18. - Binder twine: Indices of employment and oayroll for
the six leading private domestic producers, 1929 and 1932
to January, 1935 (Cont'd)
April
July-
October
1955
January
01.4 :
78.8
78.0
99.1
72.1 :
77.9
80.5
103.0
64.3 :
78.1
81.1
103.4
70.7 :
78.4
82.1
104.3
Table 19 shows indices for wages paid and employment by the five
leading complainant producers, for four payroll periods during a 12-month
period preceding the effective date of the code and during a like period
after the code .rent into force.
Table 19..- Hinder twine: Indices for wages paid and employment by
the five leading complainant producers before and after the code became
effective on March 7, 1934
: lumber of
Hours oer work-
. Average
Averags
Period
employees
er per : 'eek
weekly wa, r ;e
: hourly i
(week ending 15th
Five
Five
: Five
Five
of month)
c o rap 1 ai nan t s
complainants
: complainant
s comol;
ant's
Before code
April, July, Oct-
ober, January, 1934
100.0
100.0
: 100.0
: 100.0
After : od"
April, July, Oct-
ober, 1934, Janu-
ary, 1935
83.0
90.3
105.9
117.4
1934
April
111.4
91.3
103.2
113.3
July-
76.4
89.3
107.7
120-.-3
October
64.6
89.3
106.9
119.0
1935
January
79.6
90.5
107.1
118.2
74.1
93.3
105.9
113.8
The indices of the above table
plainant producers did not increase
effective, but reduced the number o
worker per week. Weekly wages were
rates, or vice versa,, in the post-c
ant producers increased weekly wage
per cent in the post code .period,
five complainant producers and the
period were roughly 18 per cent in
cents.
indicate that the five leading com-
employment after the code became
f workers employed and the hours oer
increased, as reflected in hourly
ode period. The five leading complain-
s 5*9 per cent and hourly wages 17.4
The average hourly wages paid by the
largest manufacturer in the ore-code
excess of the code minimum of 32.5 r
9829
-359-
Cost of production
The total cost of manufacturing and distributing 100 uounds of
binder tv/ine together f or t he five leading complainants and the largest
producer rose from $4.84 in 1933 to $6.03 in the first half of 1934, an
increase of 25. per cent, as ma^ he seen from the data in Table 20. The
cost of fiber, an item representing 47 per cent of total production cost
in the first half of 1934, increased 38 per cent, the largest increase
in an;- cost. Labor cost, amounting to only 14 per cent of total product-
ion cost, increased 21 per cent.
Table 20 shows the costs of manufacturing and distributing binder
twine for the six producers in 1933, before the code, and in the first
half of 1934. The code became effective March 7, 1934.
Table 20. - Binder twine: Production costs of the six leading
domestic manufacturers, including the five leading com-
plainant companies, 1933 and first half of 1934
Cost -per
ICO pounds o
f binder
twine
7eighted :
: ?iatio
to
Item of Cost • :
average cost ;
Increase :
C^-) over :
: total
cost
First
First
. :
1933 half of
1933 :
: 1933
half of
1934
1934
Per cent :
: Per c
ent
Materials - ■
Fiber • ■ '
$2,170
5 $2,855
■ 37-39 :
: 42.80
• 47.34
Burlap ■ :
.'J93
: .126
35,09 : :
: 1.92
2.09
Oil
.160
: .179
11.35 ■ :
: 3.31
. 2.96
Other
.066
: .073
9.82 ■ :
: 1.37
1.21
Total
2.389
: 3.233
35.22 :
: 49.39
53.60
Labor
.673
: .820
21.02 :
: 14.01
13.60
Depreciation
.145
: .157
: 8.03 . :
: 3.00
2.60
Factory Expense
.697
: .752
: 7.38 : :
: 14.42;
12.47
General and administra-
tive exoense
.245
: .323
: 32.12 :
: 5.06
5.36
Total material and
manufacturing cost
■ 4.154
: 5.285
: 27.19 :
: 85.83
87.63
Selling expense
1 .683
: .746
: 9.27 :
: 14.12
12.37
Total (all costs)
; 4.837
: 6.031
: 24.73
: 100.00
100.00
Source: Complaint and other data furnished the National Recovery
Admini s trati on .
9829
-360-
La"bor cost and factory expense each was in smaller ratio to
total cost during the first half of 1934 than in 1933. About equal
in amount, the two together represented 28 per cent of total cost in
1933 and 26 per cent of total cost in the first half of 1934.
TABLE 21
Binder twine: Increases in production cost items
in the first half of 1934 over 1933 and ratio of
separate cost items to total cost in 1933 and the
first half of 1934 for the five complainant pro-
ducers .
First half of
increase (/)
decrease (-)
year 1933
1934
or
Dver
Ratio to
total cost
Item of cost
Five
producers
Five complainant
producers
■ 1933
First half
of 1934
Materials -
Fiber
Burlap
Oil
Other
/24.S9
/14.42
/12.00'
/ 1.10
Per
cent
■ 41.67
1.90
3.20
1.66
43.32
1.81
2.98
1.40
Total
Labor
Depreciation
Factory expense
General and adminis-
trative expense
/22.81
/17.7.8
. . :
/ 9.01
/38.33
48.43
15.61
3.36
11.76
7.43
49.51
15.30
2.80
10.67
8.56
Total material a.nd
manufacturing cost
Selling expense . .
/20.48
/17.98
86.60
13.40
86.64
13.16
Total (all costs)
/20.14 •
100.00
100.00
It will be noted in Table 2, that, the .item of depreciation for
the five producers did not increase, and there was an increase of 38
per cent in the item of general and .administrative expense.
)829
-361-
APPDtTDIX A
Code of Fair Competition for the Cordage and Twine I n dustry
(No. 303), approved February 31, 1934
Schedule "B"
Division for Manufacturers of Binder Twine
Filing Price Schedules
■1. Every member of this Division offering Binder Twine for
sale shall file with the Code Authority a schedule of prices and terms
setting forth the grade and lengths por pound, prices per pound, or
the prices per "bale of fifty (50) lbs. gross weight, quantity discounts,
terras and date of payment, d?te and amount of cash discount, and conditions
of delivery; each such schedule shall set forth only the lengths there-
in shall be, approximately five hundred (500) feet, five hundred fifty
(550) feet, six hundred (600) feet and six hundred fifty (650) feet to
the pound. Such schedules shall represent the basis upon which Binder
Twine is to be sold by members when selling to retail dealers.. Such- schedule
shall also set forth full information as to all discounts allowed to
purchasers. Such schedule, when filed with the Code Authority, shall
become effective on the date filed and shall rerrain in force until a
new schedule is filed and becomes effective.
2. Copies of all schedules filed by manufacturers shall be
open to examination, as the Administrator may determine, to parties in
interest.
3. The Code Authority, at such time and after such study as
it may deem proper, shall recommend to the Administrator the establish-
ment of a definite quantity (bales) of binder twine, the purchase of
which for a season's requirement shall entitle the purchaser to a dis-
count, from any individual manufacturer, equal to the discount allowed
by said manufacturer to jobbers. The Administrator may approve, dis-
approve ir modify the recommendations. Pending such determination,
each member shall file such discounts as he desires to make applicable
to any purchaser.
4. ITo manufacturer shall sell, or offer to sell, Binder
Twine, directly or indirectly, upon any other conditions than specif-
ied in his schedule as filed, or as may be established under the prov-
isions of Section 3 hereof, and no manufacturer shall modify the cond-
itions of sale by any concessions, either directly or indirectly, made
subsequent to any sale.
9829
-362-
Price Discounts for Binder Twine
The following price discounts have been, generally effective in
the private domestic binder—twine industry since 1921:
200- bale lots, 6$ cents per bale less;
400- bale lots, 12§ cents per bale less;
10,000 to 20,000 pounds, l/8 cent per pound less;
20,000 pounds or more, l/4 cent per pound less.
In 1935, the largest producer listed its discounts as follows:
Dealers . - Lots of 10,000 pounds, 12^ cents per owt.;
lots of 20,000 pounds or carloads, 25 cents per
cwt .
Jobbers. - In any quantity, prior to December 29, 1933,
75 cents ner cwt.;
lots up to 200,000 pounds since December 29,
1933, 75 cents per cwt.;
lots of 200,000 pounds or more since December 29,
1933, $1 per cwt.
9829
-363-
APP3-TDIX 3
Table A. - Quarterly prices of raw hare 1 , fiber at Now York,
1927 to 1935
: Composite of weighted
•prices of
: Standard Mexican : Grades G. and J-2
Period
: henequen, No. 2 Eritish: abaca, Ho. 1 British
: East African sisal, and: Fast African sisal, and
: Grade 3, Jgva sisal '• : Grade A. Java sisal
: Price nor 'pound
1927
First
: $0.0807
: $0.0973
Second
: .0770
: .0931
Third
: .0753
: .0931
Fourth
: .0'- j
: .0910
1928
First
: .0719
: .0867
Second
: ,0
: .0361
Third
: 17:3
: .0333
Fourth
: .0V2 1 .
: .0864
1929
First
i ,0740
: .0240
Second
: . ' vt
S .0891
Third
: .0:
: .0889
Fourth
! . 313
: .0846
1930
First
: .0798
: .0781
Second ,
: .077.3
: .0690
Third
.0503
: . 0550
'FDurth
.0467
: .0521
1931
First j
.043''
: .0437
Second j
.0404
.0327
Third ;
. '.lb
.0381
Fc oi-th ;
.0256 :
.0353
1932 :
First j
. 0244 ;
.0300
Second ;
.0236 !
. 0261
Third ;
.0241 !
.0239
Fourth ;
.0245 ;
.0285
1933 j
First j
.0243 J
.0276
Second •
.0278 :
.0295
Third :
.0375 :
.0404
Fourth :
.0372 :
.0596
1934 •
First :
.0383 :
.0383
Second •
.0382 :
.0398
Third :
.0341 :
.0360
Fourth :
.0313 :
.0355
°3
29
-364-
APPENDIX B - continued
Tabic A. - Quarterly prices of raw hard fiber at Hew York,
1927 to 1935
Cortrpo site of weighted prices of
Standard Mexican : G" ra&es G. and J-2
Period , . : henequen, No, 2 British: abaca, Ho. 1 British
East African sisal, and: East African sisal, and
Grade: B. Java sisal : Grade A. Java sisal
1935
First
Price per pound
.0303
.0358
Sources: Cordifie Trade Journal
and prices furnished by Messrs.. Hanson & Orth, II. Y.
9829
-365-
Table 3. - Wholesale prices of binder twine effective in
the private domestic industry, 1927 to 1935 1/
: 500-foot
650-foot
Date effective
; White Sisal
600-foot !
Superior Manila
; and Standard
Manila
and Premax
: ?:
.•ice -oe r pound
February 15, 1927
: $0.1275
; $0.1450
$0.1575
March 31, 1928
: .1100
. 1263
.1375
March 13, 1929
! . 1125
! . 1325
. 1438
March 17, 1930
! . 1200
: . 1400
! .1513
March 9, 1931
: .0975
: .1125
: . 1225
October 17, 1931
: .0725
: .0838
.0925
April 9, 1932
: .0650
: .0750
: .0825
Aoril 10, 1933
: .0600
: .0700
: .0775
March 19, 1934
{ .0775
: .0900
: .0975
April 13, 1935
: .0725
; .0850
: .0925
Source: Data furnis'
led the National
Recovery Admini<
stration.
l/ Yearly price changes are announced in the Cordage Trade Journal
T^ble C. - Unit of imports for six-month periods,
1927 to 1934
Value
: Value
Period ,
per
: Period
; per
I -lound
: pound
1927 !
1931
First ;
$0.1144
First
$0.0804
Second
.1194
Second
.0864
1928 j
: 1932
First ;
.0997
First
.0518
Second ;
.0952
; Second
.0482
1929 ;
1933
First ;
.1066
! First
! .0446
Second ;
.1057
: Second
.0480
1930 !
1934
First j
.1045
First
.0578
Second :
.1139
Second
.0493
9829
-366-
CIGkES (No. 29)
9329
-367-
TABLE OF CONTENTS
Page No.
Status of complaint under the national Industrial
Recovery Act -r -* 370
Subject of complaint and tariff status ' 370
The domestic industry 370
Distribution 370
Employment ' 371
Effect of machinery upon employment 376
Effect of machinery upon concentration of production 376
Effect of machinery upon wages 378
Effect of the Rational Industrial Recovery Act \roon
competition between hand and machine producers 379
Exports of domestic cigars 380
Imports 381
Comparability of Philippine and domestic cigars 384
Comparision of trend of imports from the Philippine
Islands with domestic production 385
Competitive factors 386
Decline in cigar imports from Puerto Rico 388
Wages in the cigar industry 389
Wages for making cigars ~oy hand 392
Effect of the national recovery program 394
Arraendix
9829
-368-
LIST OP TABLES
Page II o .
Table No .
1 Trend of production, employment, and payrolls in the
cigar industry by census years since 1^27 371
2 Domestic production of class A -nc all other large
cigprs, 1926-1934 372
3 Cigar production of ten reporting companies distri-
buted, by retail price classification, for fiscal
'/errs, 1929-1934- 373
4 Production of cigars and cigarettes, ly2d-1934 374
5 Number oi men and women cigar workers employed at
various types of work July 1, 1934 375
6 Comparison of the distribution of cigar workers
with the production of cigars in various States 375
7 Comparison of total cigar production in the United
States and estimated total output and labor dis-
placement from machine production 376
6 Changes in number of factories and. proportion of
total cigar out nut manuf actured by factories
grouped according to annual out nut from 1921
to 1^33 377
9 Net income of six large cigar companies, .192S-1934 378
10 Imports of cigars from the Philippine Islands,
1926-1934 381
11 Imports of Philippine cigars ba.sea upon (l) in-
ternal revenue stamp sales, and (2) exports
of Philippine cigars to the United States,
1926-2934 382
12 Imports of Philippine cigars into the United
States, by ouarters, 1933-1934 383
13 Comparison of average value of imported Philippine
cigars and average value of domestic cigars,
1927-1933 384
14 Comparison oi total imports of Philippine cigars
with United States production of class. A cigars,
1926-1935 386
15 Comparison of total imports of Philippine cigars
with domestic production of 2-forr-5 cent cigars
by ten large producers 388
16 Comparison oi domestic production of Class A
cigars with total cigar shipments to the United
States from the Philippine Islands and Puerto Rico-389
17 Comparison of trend oi wages in cigar manufacturing
industry and all manufacturing industries 390
18 Comparison of .-average weekly wages of female
cigar makers in 1929 and 1933 i or the United
States and for Pennsylvania 391
19 Comparison of trend of average piece rates for
making class A cigars by hand in York County
and in other sections of the United States 392
20 Frequency distribution of makers of class A
cigars by hand receiving specified, hourly earn-
ings during a representative week in June, 1933 393
9829
-569-
AFPEN.DIX
TABLE Oi CONTENTS
Page No.
Tobacco in the Fhilicpine Islands 396
Manufacture 01 vobacco products--" 396
Froc'uction end imports from the United States of
cigarettes 397
Production rnd expci&rs of cigars 398
Other tobacco products 398
Reciprocal nature of tobacco trade by the United
States anc the Philippine Islands 399
Tobacco promotion activities 401
Philippine ci -ars in relation to the National
Recovery Administration 402
Wages for making cigars in the Philippine' Islands 403
LIST OF TABLES
Table No . „ „ .-„
Page No .
1 Comparison of total -production and exports of
Philippine tobacco 396
2 Comparison of .raw materials used in manufact-
ure of Philip-cine tobacco products 397
3 Comparison of tax-paid withdrawals in the
Philippine Islands of domestic cigarette
imports from the United States 397
4 Comparison of the distribution of total Phi-
lippine cigpr production to different
consuming markets 398
5 Comparison of the value of Philippine exports
to and imports from the United States of
tobacco products . 399
6 Comparison of quantity and value of United
States exports to and imp.rts from the
Philippine Islands of tobacco products 400
7 Expenditures from advertising, fund for pro-
moting sales of Philipoine cigars in the
United States 401
9629
-370-
5URVEY 0j< INFORiviATION
ON
CIGARS
April, 1935
Status of Complainant under the National
Industrial Recovery Act
This is a report on a complaint under Section 3 (e) of the
National Industrial Recovery Act, with respect to imports of cigars
from the Philippine Islands, especially cigars manufactured to retail
for 2-lor~5 cents or less, filed by the Code Authority of the Cigar
Manufacturing Industry. The Code of Fair Competition for this indus-
try was approved June 19, 1934.
Subject of Complaint and Tariff Status
Cigars are dutiable under Paragraph 605 of the Tariff Act of
1930 at $4,90 per pound and 25 per cent ad valorem; they were dutiable
at the same rate under the Tariff Act of 1922.
Section 501 of the Tariff Act of li-30 provides "that all articles,
the growth or product of or manufactured in the Philippine Islands from
materials the growth or product of the Philippine Islands or of the
United States, or of both, ***coming into the United States lrom the
Philippine Islands shall hereafter oe admitted free of duty,"
On December 2, 1933, the Attorney General of the United States
ruled that "articles brought into continental United States from the
Philippine Islands are subject to the provisions of Section 3 (e) of
that Act (National Industrial Recovery Act) concerning articles
'imported into the United States in such manner or in such circum-
stances' as to render ineffective or seriously endanger the mainten-
ance of any code or agreement. "
The Domestic Industry
Distribution
On the basis of the Census of ..Januf actures there were 646 cigar
manufacturing establishments in the United States in 1933. During this
year the industry produced 4,510 million large and small cigars valued
at $135,576,000; it employed an average of 53,o&4 workers to m hom it
paid $29,558,000 in wages. The leading cigar producing states with
the percentage of the total United' States output derived from each were
Pennsylvania, 37.6; Florida, 10.8; New Jersey, 10.3; New York, 5. 2;
Ohio, 5.0; South Caroline, 4.9; Kentucky, 4.9; l.iichigan, 4.6; and
Virginia, 3,5.
9829
-371-
The total volume 01 cigar production in the United States has been
declining; ox" more than a decide, the downward trend being particularly
noticeable after 1930. Comparative figures for uroduction, employment,
and wages in the industry since 1927 pre given in Taole 1,
Table 1. - Trend. of production, employment, and payrolls,
in the cigar industry by census years since 19^7
Number of
. Average
Value
Year
establish-
numoer of
Wage s
of
ments 1/
wage earners
Products
Thousands
1927
1,950
94,556
$76,470
$356,026
1929
1 , 587
84,166
67,222
509,211
1931 :
1 , 063
68,162
46,074
225,149
1933 •
646
53,684
29,558
135,576
Source:. Census of Manufac tures, Bureau of the Census.
1/ Only those rerortiri": output valued at $5,000 or more.
Production
Cigars pre grouped into live classes according to their retail sal?
price for the purpose of collecting internal revenue. The groups
range from the cheap class A cigars, which retail at not more than 5
cents each and pfv a tax of $2 per thousand, to the expensive class E
cigars, which retail at more than 20 cents each and pay .a tax of $15.50
per thousand. A study of the relative production oi the different
grades of cigars, as shown by the sale of internal revenue stamps,
indicated that the decline in total production has been due almost
entirely to a decline in the demand for the more expensive cigars.
Table 2 compares the annual production of Glass A cigars since
1926 with the production oi cigars retailing .or mare than 5 cents.
It may be. noted that the production oi the less expensive cigars rose
36 per cent from 1926 to 1934, while at the same time the production
of the more expensive cigars declined 63 per cent.
9629
-572-
Table 2. - Domestic production of class A and all other large
cigars, 1926-1934 \J
( illions
of cigars)
Large cigar :
: Index of lprge
production :
: cigar production
Year
: All
All
Class A
: other
Total :
:Class A
other
Total
"1926
2,886
: 3,703
6,569 :
: 100
100
100
1927
3,175
5,396
6,571 :
: 110
92
100
1928.
3,310
• 3,144
6,454 :
: . 115
65
98
1929
3,583
■ 2,969
6,552 :
: 124
80
99
. 1930:
3,574
2,315
5,889 :
: 124
63
69
1931:
3, 588
1,631
5,319, :
: 128
44
61
1932;
3,491
952
4,443 :
:. 121
26
67
1933-
3,590
655
4,345 :
:. 128
16
66
1934
3,929
640
4,569 :
: 136
17
69
Source: Annual report of the Commissioner of Internal Sevenue.
1/ Based on stamn tax sales.
All cigars selling for 5 certs each or less are reported in
internal revenue statistics in the class A group. These statistics,
therefore, afford no basis for a comparison of the relative changes in
the production ox cigars selling icr less than 5 cents each. Some
indication oi the changes which nave occuri ed in the production of the
cheaper graces of cigars may 'be gathered from the data given in Table
5, which is based upon the statistics furnished by ten domestic cigar
manufacturers. In 1929 onlv ti"0 of these companies were making cigars
selling. for 2-for-5 cents or less. Fractically the entire production
in this classification ^as cheroots or little cigars made by one machine
producer and sold for less than 2-for~5 cents. The reported production
of 2-for-5 cent cigars has grown very rapidly, rising from 5 million
in 1929 to 222 million in 1934, an increase of aoout 37000 per cent. At
the same time the reported production of all other :rades of cigars,
even including those retailing for less than 2-for~5 cents, has
declined sharply. On the basis of these data," it appears that the
greater part of the grin which has taken -place in the production of
class A cigars since 1929 has resulted from the phrnomenal increase
in the production of 2-ior-5 cent cigars. It may be noted ^Iso that
the machine production of 2-i'or-5 cent cigrrs rose 65 per oent from
1933 to 1934, while the proouction of nand-made cigars in the same
group declined 8 per cent.
9829
Trole 3. - Cigar production 01 ten reporting companies distributed
by retail price classif icat-ion, for xiscal years,
1 929-1934 1/
(Thousands of Cigars).
1st-'
rear
Ciears nrocuce:c to retai"
Fiscal ^
n'r oia
Over
Total,
ending
Less than
2- for-:
2-for-5 cents
5 cents
all
June 30
2-for-5 cents
cents
to
each
ci^prs
5 cents each
•
Four machine nroducers
1929
2/
271, 217
2, 630
215,326
84,922
574,094
1932
157,034
OUiUfO
134,601
32,399
359,407
1953
L06.472
66, 524
127,161
12,912
315,068
1934
89,096
113,160
Six h?
175,183
md urocucers
6,012
363,748
1929
2/
3,o30
165,. .92
189,322
1932
56,486
108,352
164,829
1933
117,980
86,497
16
206,494
1934
5/
108, C66
69,698
29
178,592
Total -
- ten companies
1929
271,217
6,260
401,016
64,922
763,416
1932
157,034
91, 8o3
242,953
32,399
524,236
1933
106,47?
186,504
215,658
12,930
521 , 562
1934
3/
89, 096
221 , 626
243,081
6,041
562,540
1/ Eight companies in 1929; nine companies in 1932, and ten com-
panies in 1953 and 1954.
2/ Three machine producers pnd five uand producers in 1929.
3/ Partially estimated.
The decline i r ' the total production of cigars has been in sharp
contrast to the rise in the production of cigarettes. Hovever, since
1926 the cheap clpss A cigars have risen in -production at about the
same rate as cigarettes. This strongly suggests that the future of
the cigar industry is dependent in very large leasure upon its ability
to furnish the consuming public vith a relatively cheap "smoke",
vnich vill compete with the cigarettes. In order to compete with
tne lor-cost machine production of cigarettes, the cigar manufacturers
are being forced, inevitably, to adopt machine methods of -production.
9629
-374-
Table 4. - Production of cigars and cigarettes, 1925-1934
Index of
Year
Cigar
Oigrrettes :
production
: Cigars
Cigarettes
i
[illions :
1926
6 , 499 .
92,097 :
: 100
100
1927
6,519
99,809 :
: 100
108
1928
6,373
108,706 :
: 98
118
1929
6,519
122,392 :
: 100
153
1930
5,894
123,802 :
: 91
134
1931
5, 348 .
117,065 :
: 82
127
1932
4,583.
106,632 :
: 67
116
1933
4,300
114,874 :
: 66
125
1934
1/ 4,'597
"
1/ 125,612 :
: 71
136
Source: Annual report of C6mmissioner of Internal Revenue.
1/ Based upon stamp tax sales. \
Employment
The cigar industry has Deen able to raeet the public demand for
lower-priced cigars very largely as a result of technological develop-
ments' in the industry which have greatly reduced the manufacturing cost
of cigars. The automatic cigar-making machine has revolutionized
the technique of cigar iapking, introducing almost complete mechanization
where formerly a handicraft type of production predominated. The
distribution of employment between machine and hand cigar workers as of
July 1, 1954, is given in Table 5. This table also shows the distribu-
tion of employment between men and women, indicating that the hand
workers are predominantly women, and that the machine workers are almost
exclusively women.
9829
-375-
Table 5. - Fumuer of men and women cigar workers eumloved
at various types of work, July 1, 1934
CI
-ssiiicatiun :
Piece-workers :
Time-workers :
Total
Fiece-v'orkers :
Ti
ne-workers :
Total :
Hand
'. orkers
(Ircnme
workers
All
workers
Lien
'.Vomen
iien
Women
Jen
: Wo me n :
Total
8,827
1,865
19,899
5.707
23
182
11,978
3,742
8,850
2.077
: 31,877:
: 9.449:
40,727
11.526
10,712
25,606
205
15,720
10,927
: 41,326:
52,253
16.9
3.6
38.1
10.9
Percentage oistribution
1/ : 22.9 : 16.9 : 61.0
0.4 : 7.2 : 4.0 : 16.1
77.9
22.1
20.5
49.0
.4
30.1
29,9
79.1
100.0
Source: Special Tabulation of the -ure.-u oi the Census.
1/ Less than 0.05 oer- cent,
.The distribution of cigar workers corresponds roughly with the
distribution of r>rocuction among the various States. The c if f erences
between the two noted in Table 6 were due in part to the varying degree
of mechanization in- individual States, also in part to the lack of
correspondence between: the production period (1933) and the date of
employment- enumeration: (July 1, 1934).
Table 6. -. Conroariscn of the- c lstrioution of cigar workers
with the production of cigars in various States
-roduction
Number of cigar
makers :
: Percentage
millions of
cigars !_/
July 1, 1934
: of total
Machine
Hand
Total :
: Cigar
dumber of
1935
: oroduc-
: t i on
cigar
makers
Fenra.
1,616
3,697
8,425
12,322 :
: 37.6
30.3
New Jersey
443
2,155
3,1 (0
5,255 :
: 10.3
12.9
Florida
466
fc24
! , 978
o,802 :
: 10.8
16.7
Few York
266
386
2 , 122
2,506 :
: 6.2
6.2
Ohio
214
469
1,779
2,246 :
: 6.0
5.5
Michigan
196
361
l-,76£
2,126 :
: 4.6
5.2
All other
1 . 099
Z ,906
5, 559
9,466 :
: .25.5
23.2
Total
4,300
IS. '01
28.726
40.727 s :
: 100.0
100.0
Source: Special tabulation of -trie 3ureau oi the Census.
1/ Tax-raid removals.
9629
-376-
Effect of machinery upon Employment
Machine production of cigars has grown rapidly since trie first
automatic machines were installed in 1919, tJechanized cigar production
has oeen accompanied by significant changes within the cigar industry.
The direct and immediate effect of technological advances in the
manufacture of cigars has been widespread displacement of labor.
Table 7 indicates the extent of the technological unemployment which
has resulted from. the substitution of automatic machinery tor hand,
production of cigars, estimated by the Bureau of Lao or Statistics, .in
connection with a study of technological changes in the cigar industry.
in 1831.
Table 7. - Comparison of. total cigar production in the United
States and. estimated total output and labor dfspla cement
from machine production.
(iilillions of cigars)
United States production
Ratio of
Estimated
Year
of large cigars
machine
■production
number of
Total
Made by
hand workers
machinery
to totfcil
displaced
Per cent
1919
7,072
162
2.6 ■
1,331
1921
6,726
401
6,0
'2,942 ■
1923
6,950
632
9.1
4, 636
1925
5,463
957
14.8
7,015
1927
6,519
1,625
28.0
13,381
1929
6,519
2,291
35.1
16,797
1931
5,348
2,912
54.4
21,356
1933
4,345
1/ 2,782
64,0 !
1/ 20,392
Source: Monthly Labor Review , Dec.
1/ See Leidesdorf Srief, p. 4.
31, 1933, p. 13.
Effect of Machinery upon Concentration of Production
Since the introduction of automatic machinery, competition in the
cigar industry has centered, around cigars manufactured to retail at not
more than 5 cents each. Sustained demand in the low-price cigar field
has made possible the volume of production necessary for the economical
use of expensive machinery. This competition has resulted in the
elimination of many of the relatively, high-cost , small factories which
made cigars by hand,' and has concentrated production in a comparatively
small number of plants using machinery.- Table 8 shows : the extent of
the chpnre "hich took place from 1921 to 1933 in the production of
cigars by factories, classified according to. the quantity of their
output.
In 1921 the factories having an output of less than 20 million
cigars a. year procuced 74 per cent of the total output for the year; in
1933 factories in this same group accounted for only 39 per cent of the
production for the year. The 11 factories having an annual output in
9829
-377-
excess of 40 million cigars produced 16 per cent of the year's total in
1921; the 23 factories in this class in 1933 accounted for 50 per cent
of the year's output.
1/
Table .8- Changes in number of factories- and proportion of total
cigar output manufactured by factories grouped according to
annual output from 1921 to 1933
Factories with classified
Annual out-nut
output
(millions of
Number in
Cigars
Percentage of
cigars)
operation
produced
total production
1921
1933
1921 .
1933
1921
• 1933
Under 1
13,659
6,293
1,285
328
19.0
7.6
1 to 5 :
620 .
194
1,410
456
20.9
10.6
5 to 10
178
59
1,233
409
18.4
9.6
10 to 20
85
34
1,073
469
• 16.0
10.9
20 to 40
25
17
668
475
10.0
11.0
Over 40
11
23
1,057
2,163
15.7
50.3
Total
14,578
6,620
6,726
4,300
■100.0
100.0
Source: Annual reports of the Commissioner of Internal Revenue.
1/ The greater part of the factories producing less than one million
cigars each year represents individual or home production not included in
census statistics which are limited to establishments having an output
valued at $5,000 or more each year.
The trend toward concentration of production of cigars in the hands
of a few large companies has been even more pronounced than is indicated
by Table 3. The Bureau of Internal Revenue lists the various cigar
factories as physical units without reference to ownership. Practically
all the 1; rge corporations own two or more large factories and the ten
largest cc qnies in the industry have for several years produced more
than half of the total United States output.—' These larger companies
depend almosi entirely upon machine production, and while their profits
have been greatly reduced during the depression, their record has been
much better than the average industrial corporation. Table 9 shows
the total net income available for dividends of six large companies from
1926 to 1934. The combined net income of these companies was lowest in
1931: it r?se somewhat in 1932 and 1933, and in 1934 advanced nearly 50
per cent ever the average for the preceding three years.
1/ See Reavi s Cox, Competit i on in the American Tobacco Industry
(Columbia University Press, 1933), p. 95; also Willis N. Baer, The '
Economic Development of Ci^a r Industry in th e United States (Lan-
caster, Pa-, 1933), p. 253; also Russell H. Mack, The Cigar Manu-
facturing Industry, Factors of I nstability A ffecting Production and
Employment "(University of Pennsylvania Press, 1953) .
9829
-378-
1/
Table 9. - Net income, of six large cigar companies,
1926-1934
Year
Net income
Year
Net income
1926
1927
1928
1929
$10,861,000
13,570,000
14,382,000
15,357,000
1930
1931
1932
1933
1934
1/
$7,101,000
3,478,000 ;
4,116,000'
4,220,000 ;
6,251,000
Source: Moody' s : Manual of Inve
1/ Net lasses of two companies
for first nine monts.
tments, In dust rial's .
for the year estimated, from record.
• . . Effect of Machinery upon Wages
Mechanization has greatly weakened' the bargaining poorer of cigar
workers, and thereby contributed to the low-wage scale which prevails
in the industry. This has resulted from the following factors:
(a) Automatic cigar machine operators reouire very little training
or skill and the workers are almost exclusively women. This type of
labor has never received a. very high wage.
(b) The extension of machine production has created a surplus of
skilled hand laborers, thereby tending to depress wages in this branch
of ohe industry.
(c) The hand manufacturers have been subjected to increasingly
severe competition from the low-cost machine producers. In their
struggle, for existence they have been compelled to reduce costs wherever
possible, and labor has not been in a position to offer much resistance.
(d) Mechanization has probably been the most important cause of
the decline in the power of the Cigar Makers' International Union of
America which flourished when cigar making was a skilled hand trade.
The majority of the Cigar workers are now unorganized women.
(e) During the most distressing years of the depression the wage
scales in many of hand-made cigar factories were so reduced that the
highly mechanized plants lost much of their competitive advantage. In
order to escape the intense competition in the field of the 5-cent
cigars, many of these hadn manufacturers took advantage of the low wages
and cheap leaf tobacco to reduce prices to 2-for-5 cents. At. the time
there was very little machine competition in the 2-for-5 cert field, ar.d
these hand manufacturers experienced a gratifying increase in the volume
of their sales. The machine manufacturers, however, accepted the
challenge of price competition, and entered the cheap cigar field with
special brands created for the purpose. Their competitive position
9829
-379-
in this very low-price field wan guaranteed by the perfection of an
automatic machine which makes cheap, short-filler cigars with only
about half the labor cost of the standard, long-filler machine.
Effect of the national Industrial Recovery Act upon Competition
between Hand and Machine Producers
The recovery program introduced a new element into the competition
between the manufacturers of low-price machine and hand-made cigars.
The continued existence of hand manufacture of 2-for-5 cent cigars
depended upon very low wage rates and low prices for leaf tobacco.
These manufacturers found that they could not continue to make 2-for*»5
cent cigars and pay NRA wages and AAA tohacco prices. Their brands
had become identified by the consuming public with 2-for-5 cent cigars,
and they were unable to raise their prices. They attempted this in
August, 1953, when a large group signed the President's Reemployment
Agreement, and jointly agreed to discontinue the production of 2-for~5
cent cigars entirely. The machine manufacturers, however, were expand-
ing their production of 2-for-5 cent cigars rapidly at this time, and
the hand manufacturers found it necessary to again drop back to the
cheaper grade of cigars.
When the Code of Pair Competition for the Cigar Manufacturing
Industry became effective in June, 1934, the hand manufacturers of
2-for-5 cent cigars in the York Count;/ district of Pennsylvania dis-
missed all except those workers who could make the code minimum wages
at the prevailing piece rates. The workers retaliated by calling a
strike. A committee representing employers and labor was appointed
by the Code Authority for the industry to determine the cost of pro-
ducing 2-for-5 cent cigars by hand in that district. This committee
found that less than 50 per cent of the employees were receiving the
weekly wage of $10.80 required by the code, and that the factories
were making very little or no profits. It recommended (l) that slow
workers be exempted temporarily from the minimum wage provisions of
the code, provided prevailing piece rates be paid, (2) that the 2-for-5
cent cigar be eliminated from the United States market, and (3) that
restrictions be placed upon Philippine cigar imports in order to insure
the success of the second recommendation.
The first recommendation was put into effect August 15, 1934.
By virtue of successive extensions it has acquired very nearly a
permanent status. The second recommendation apparently has not received
general approval, since the machine manufacturers have continued steadily
to expand production cf 2-for-5 cent cigars. By using the latest model
automatic machines, these manufacturers are able to make 2-for-5 cent
cigars at a profit, while complying with the minimum wage requirements
of the code for their branch of the industry. The third recommenda-
tion was offered as a necessary corollary to the successful administra-
tion of the second. Obviously the domestic hand manufacturers of
3-for— 5 cent cigars would gain little by restrictions upon imports from
the Philippine Islands so long as the machine manufacturers of these
cigars continued to expand their production.
9829
-380-
Export of Domestic Cigars
Export markets have never constituted an important outlet for
American cigar manufacturers largely because of the high duties and
other restrictions on importation in foreign countries. Exports have
averaged slightly more than one million cigars annually in recent years;
they dropped to 923,000 cigars in the fiscal year ending June 30, 1934.
On the basis of the 1932 imports Panama and the United Kingdom each
took about 34 per cent of the total. In relation to the domestic
production of more than 4,500 million cigars the quantity of exports is
negligible.
«
9829
-381-
Imports
Table 10 shows the trend of tae quantity and value of cigar imports
from the Philippine Islands since 1926. It will be noted that imports
were unusually low Ln. 1933 and that they rose to- a -peak- in 1934. The
to^al value of these imports was 15 per cent higher in 1934 than in 1933
'■3 a result of the . sharp decline in the average-unit value.
Table 10. - Imports of cigars from the Philippine
Island, 1926-1934
Statistical
- W$Jt~ -*
■ ■ — m».^ . - . . ■
period
Quantity
Value
. ^it„v_alus
■ ■ A
. Thousand
Thousand
Per pound
• pounds
dollars
n
1926
3,021
55,047
$1.67
1927.
2,645
4,142
1.57
1928
2,574
: 4,190
1.63
1929
2,073
■' 3,341
1.61
1930
, • 1,001
2,997
1.58
1931
2,056
3,105
1.51
1932
2,192
: 3,066
1.40
1933
1,824
2,673
1.47
1934
3,182
3,080
.97
1935 (J an. -Mar.)
1,271
: ' 988
.78
Source: Foreign Commerce and Navigation of the United States.
The number of Philippine cigar imports has been reported in the
United States trade statistics only since January 1, 1934. A fairly re-
liable measure of the number of these imports for earlier years, however,
can be obtained from two sources, (l) tne record of United States inter-
nal revenue starms for Philippine cigars to be sold in the United States,
and (2) tne Philippine trade statistics of cigar exports to tae United
States. On trie oasis of these data, the number of Philippine cigars im-
ported into the United States reached its lowest level in 1930; it in-
creased steadily thereafter until 1934 when it was somewhat greater than
in 1926. The total value of thsse imports did not increase in proportion
to tne quantity due to tne decline in the average unit value. The unit
value was lowest in 1933, increasing slightly in 1934. Comparative statis-
tics 3 of internal rpvenue stamp sales for Philippine cigars and Phil-
ippine cigar exports to the United States are given in Table 11.
9829
-382-
lable 11. - Imports of Philippine cigars based upon (l)
internal revenue stamp sales, and (3) exports of
Philippine cigars to the United States, 1925-1934
United States imports of Philippine cigars
,najcated by -
Year
: Internal ;
: revenue :
: stamp sales :
: Thousand pi
1925
':" 206,184 :
1927
: 175.474 :
1928
: 191 ,397 :
1929
: 159,158 :
1930
: 154,243 :
1931
: 169,3^4 :
1932
: 175,012 :
1933
: 186,697 :
1934
: 210,009 :
1935
(Jan.-
-Mar.)
: 55,968 :
l/Pre
li mi nary.
Philippine exp orts statist ics
Uni t
Quantity
: Value
value
cigars
Pnous.ands
Pe.
r thousand
195,327
34,569 '
cv co • c->y
167,300
3,769
22.53
179,570
3,856
21.47
150,945
3,013
19.96
144,767
2,810
19.41
158,520
2,885
18.20
154,515
2,886
17.53
180,714
2, p 23
15.62
203,896
3,232
15.85
1/ 52,932
1/ 8oi ;
U
15.13
In order to facilitate a comparison of the three statistical series
showing trie shipment of Philippine cigars to tne United States, quarterly
data from the tnree sources are presented in Table 12. The internal reve-
nue stamps are sold to manufacturers in tne Philip-nine Islands snortly be-
fore tne exportation of tne cigars, Shipments from the Philippine Islands
ar° recorded as import entries into tne United States from one to two
months after the date of export. After due allowance is made for thin lag,
it ap 'ears that Philippine export and United States import statistic:; agree
fairly closely, and that stamp sales statistics overstate actual shipments
by several per cent.
9 829
j'able 12. - Imports of Pnilippine ci ars into the United States,
. y quarters, 1933 and 1934
dumber
: Average
value :
Average
of c i gar s
: of cigars :
: weight of
Statistical
Revenue
Philip-
United :
:?hilip-
United :
: cigars
period
stamp
Dine
States :
: nine
States :
: United States
sales
exports
imports :
: exports
imports :
: imports
In thousands :
:P"i- thousand :
: Pounds per
: thousand
1933
Jan. -Mar.
32,] 09
29,0o5
1/ =
: $15.06
1/ :
: 1/
Apr. -June
33,174
29,247
1/ :
: 15,85
u ■■
: 1/
July-Sent .
54,^87
53,298
1/ • :
: 15,47
1/ :
: 1/
Oct . -I ec."
55,825
59,114
1/ :
: 15.45
1/ :
: U
1934
Jan. -Mar.
59,593
54,814
55,215 :
: 16.03
15.6.7 :
: 11.9
Apr. -June
52 , S43
54,874
45,083 :
: 15.57
15.62 :
: 15.8
July-Sept .
33,401
3.1,987
o8,508 :
:. 15.82
14.98 :
: 17.8
Oct . -Dec .
64,272
52,221
40,293 :
: 15.95
15.72 :
: ■ 18.1
1935
Jan. -Mar .
Do, 968
2/52,932
6o,fi78 :
ts 15.13
15.59 :
: 20.1
iy Pumber of . cigar imports not reported prior to 1934
2_/ Preliminary. . . j
One of o.e most interesting aspects of • Philippine cigar shipments
to tne United States concerns the average weight of trie cigars. In 1923
and 1924 tne average weight of tne- Philippine cigars was 18 pounds per
thousand, or aoout tne weight of standard size United States cigars.. Dur-
ing tne succeeding years one size of tne Philippine cigars was gradually
reduced until they weighed only 12 rounds per thousand in the early part
of 1934. Concurrently with this reduction in tne weight, Philippine ci-
gars were reduced in price, declining from about $24 per thousand in the
earlier years to $16 in the first quarter of 1934. The unusual aspect of
this situation relates to the weight and price of Philippine cigar im-
ports after the first quarter of 1934. The average weight per thousand
rose to 17 pounds in trie second quai ter of tne year and 18 pounds in the
third and fourth, while tne average price fluctuated in succeeding quart-
ers at aoout the level of tne first quarter. The explanation of this sud-
den rise in the weight of Philippine cigars seems to be as follows.
Philippine cigar shipments to the United States must be approved by
tne Collector of Internal Revenue in tne Philippines under tne provisions
of Act To. 2513 of tne "nilinpine Legislature (1915). On March 20, 1934,
the Collector of Internal Revenue announced that government approval
would be refused on export Shipments of 2-for-5 cent cigars to the United
States priced at less than $16.50 per thousand in States which have cigar
taxes and $17 in tax-free States, less a 2 per cent discount for cash.
Tnese prices applied to sales to jobbers, and were amended on August 10
to Demit sal<-s to importers at "15.17 per thousand, net. These minimum
prices are identical with the minimum prices on domestic 2-for-5 cent
9823
-384-
cigars provided by the merchandising plan of the cigar manufacturing in-
dustry code. The Philippine manufacturers evidently found it necessary
to offer standard size cigars at these prices in order to make sales.
Despite the increase in size, the Philippine cigar imports during the
last three quarters of 1934 averaged 13 per cent below the level of the
first quarter.
Comparability of Philippine and Domestic Cigars
A comparison of the average landed value of Philippine cigars with
the average factory value of domestic cigars indicates that the import-
ed product competes only .with the cheaper domestic grades. This com- ;
pariscn for census years' since 1927 is shown in Table 13.
Table 13. - Comparison of average value of imported .
Philippine cigars and average value of domestic :
. ; cigars, 1927-1933 .
: Average value per
: : ■ . Index of average
: one thousand cigars
: : value of cigars
Census
: Philippine
,. Manufactured
: : Philippine : Manufactured
years
imports
: in the
, : imports : in the
1/
United Gtates2y
': • : 1/ : United States 2/
: • 1927. = 100
1927
$24.78
$48.29
: 100 : 100
1929 ;
21.96 :
44.57
: 89 : 92
1931 :
20.02 ;
39.59 :
: 81 : 82
1933 :
17.18
30.06
: 69 : 62
1,/ Landed value estimated by adding It per cent to the average
Philippine export value.
2/ Quantity and value of total cigar production as reported to the
Bureau of the Census.
The Philippine cigars are primarily of the long-filler type, made
by hand from native tobacco. Since 1926 tne wrapper leaf used upon a-
bout 50 per cent of these cigars has been imported from' the United
States. This undoubtedly contributes to tne a ttractive appearance of
the Philippine cigars, which compares very favorably with domestic ci-
gars. In recent years these cigars have been individually wrapped in
cellophane, which not only makes them more attractive, but also helps
to prevent drying out during the long period between manufacture and
sale.
The Philippine tobacco gives the imported cigars a rather distinc-
tive flavor which has never gained a very large consumer following in
the United States. Philippine cigars have been imported into tne United
States free of duty since 19J9; they have always been offered at relative-
ly low prices and for many years have had the advantage of advertising
and promotion work, subsidized by the Philippine Government. Despite all
these favorable factors, the Philippine cigars have never supplied much
more than 5 per Scent of the domestic production. This suggests rather
strongly the fact that the distinctive characteristics of tae Philippine
cigar effectively limit its market in tne United States.
9 829
-385-
C omparison of trend of impor ts from the Pnilippine
Isla nds with domestic projection
Both imported and domestic cigars must oay the United States inter-
nal revenue tax, and tn° record of tne -sale of the different classes of
internal revenue stamps provides a convenient and accurate m- j ans of com-
paring; imports and dom-scic production.
In view of tne fact that cigars retailing for not nior- than 5 cents
;h constitute 97 to 100 per cent of the total imports from the Philip-
pine Islands, competition between these imports and domestic production is
confined almost entirely to the clr.ss A group. For this reason, the trend
of imports of Philippine Cigars is compared with the domestic production
of class A cigars in Table l*t.
During the eignt-year period from 1926 to 1933 imports of Philippine
cigars averaged 5.4 per cent Of domestic production of class A cigars.
Tne ratio was lowest in 1930 when it dropped to 4.3 per cent; ic rose
tnereai'ter to an average : of 5.1 -in 1933. On a quarterly basis tne ratio
re-'Ched a high pcint of 7.6 during the;last three months of 1933; it
declined therafter fco ohiy^S.0 per c >nt in the third quarter of 1934,
out rose to an average of 6.1 in tne final quarter of 193<±. The average
for tne 12 montns of 1934 was 5.3 per cent, almost exactly the average
for the preceding eight years. ■
9829
-386--
Table 14. - Comparison of total inroorts of Phili/ccoi-ne cigars
with United States nroduction of class A cigars l/ .
1936-1935
1926
1927
1928
1929
1930
1931
1932
1933
1934
1933
Tax-paid withdrawals of cigars for
consum-otion in United States
Domestic
class A
Total
Puilippine
Thousand of cigars
2,8F6,079
3,175,158
3,310,354
3,583,593
3,573,315
3,687,784
3,490,540
3,689,733
5,928,834
206,184
176, -4:74
191,597
159,157
15^,243
169,344
175,012
186,697
210,009.
Patio of total
Philippine to
domestic class, A
P er cent
7.1 •
5.6
5.8
4.4
4.3
4.6
5.0
o.l
5.3
'
Jan. -Mar .
752,783
33,109
4.3
Apr. -June
951,204
33,174
3.5
July-Sept .
1,095,190
54,587
5.0
Oct.-D^c.
893,54 3
65,825
7.5
1934
Jan.-'.ar.
868,863
59,693
6.7
At. -June
961,007
52 , 543
5.5
July -Sept .
1,044,123
33,401
3.0
Oct .-Dec .
1 ,054,841
64,372
6.1
1935
Jan . -Kar .
900,618
5. ,968
5.2
l_y As indicated by sales of internal revenue stamps
Although therp was nracticaly no production of 2-for-5 cent ci-
gars for mor^ tuan a decade nrior to 1930, a suostantial part of the
Philitrnine inroorts has always b--n of this cn t -a~> variety. A comparison
of Pnilip^ine inroorts witn domestic -nroduction of 2-for~5 cent ci 3 ars ,
however, cannot be mad*-, since neither has been separately r--nort-d. On
tae basis of data submitted oy the com lainants for the automatic mach-
ine and hand production of 3-for-5 cent cigars by ten representative comp
panies in the United States since 1939, it appears tnat the ratio of
Puiliopinp inroorts to domestic -production has been declining rapidly in
recent ypars .
In 1933 C fiscal ypar) ten dom^tic comoanips produced 3nly 6 mil-
lion 3-for-5 cent cigars, comnared with 176 million irmortpd in the
Philippine Islands. Altnougn a substantial proportion of the Philippine
cigars in 1939 was sold for more than 2-for~5 cents, on the oasis of the
average oricejjt- appeal that at lpast on— half of the total belongs in
(
9839
-387-
the cheap-r classification. In this year, therefor-, Fnilippine inroorts
of 2-for-u cent cigars w- r f: om 10 to lb times gr- at--r than reported
domestic production of ten companies, The great expansion of domestic
nroduction of 2-for-5 cent cigars raised uhe production of these ten com-
panies to a Higher level than Philippine imoorts in 1933. In 1934 Philip-
pine imports increased <iS per cent to n level slightly aoove the nrodue-
ion of these companies. It is interesting to note, however, that from
1933 to 1934 machine production of 2-for-5 cent cigars rose 65 per cent,
even more' rabidly t-.an Ptiili >pine imports. The increase in the ratio of
Philippine im orts to total production of 2-for-b cent cigars in 1934 re-
sulted entirely from the declin- in hand production.
On the basis of the quarterly figures given in Table 15, it may be
noted that tne ratio was highest in the last quarter of 1933 and that it
has b^en declining since then. It should also be noted that the gain
which the machine producers had mad° in the nroduction of 2-for-5 cent
cigars has b -en offset to a considerable degree by the decline in their
production of charoots and small cigars s- lling for less than 5 cents.
9829
-338-
Tabl- 15. - Comparison of total im j-fos of Pnilippihe cigars
with domestic production of 3 -for -5 cent cigars by ten
large producers
R- sorted
domestic
procluc-
Gigar imports from
Reported
tion of 2
-for-5 cent cigars
°ni'lippine Islands ly
' domestic
production
Ratio to
of
Statistical
total
l°ss tnan
period
Automatic
r^orted
2-for-5 cc-n
t ?•/
macni-nery
Hand
lotal
Total
domestic
production
of 2-for-5s
cigars by
aut omat i c
mscninery
Thousand of cigars
per cent
Thousand ci
gars
^iscal years
' 1929
2,630
3,630
5,260
176,221
2,542
271,217
1932
35 , 375
56,488
91,863
174,419
190
157,034
. 1933
68,524
117,980
186,504
160,496
86
106,472
1934
113,160
108,666
221,326
233,718
105
89,096
Quarters
(
1932
Jan. -Mar.
7,402
13,750
21,152
38,610
183
* 32,469
Apr. -June
11,226
16,559
29,785
41,190
138
35,468
July -Sept .
14,171
20,854
35,025
52,932
151
33,820
Oct. -Dec.
20,398
21,392
41,790
42,280
101
26,979
1933
Jan. -Mar .
2c,278
23,795
49,073
32,109
55
21 ,449
Apr. -June
2P.868
30,370
59,238
33,174
56
24,224
July -Sept .
30,538
30,500
61,038
54,087
89
25,264
Oct. -Dec.
36,336
15,867
52,423
66,825
127
21,996
1934
Jan. -Mar .
25,325
23,280
49,505
59,693
120
20,137
Apr. -June
31,104
27,227
58,331
52,643
90
21,720
1_/ As reported by Bureau of Internal Revenue in form of stamp- sales,
2/ Chiefly cheroots and small cigars.
3/ Domestic production data availaole for only the first two quarters of
1934.
Competitive Factors
Decline in cigar imports from Puerto Rico
Imports of cigars into the United States from foreign countries are
subject to duties which are prohibitive to all aut the most expensive
grades, rhese duties, now^ver, do not apply to cigars coming from either
the Philippine Islands or from ^auerto Rico. As a result, a substantial
industry engaged in making cheap cig rs by hand has developed in each of
these inBular possessions, dependent in very large measure upon the Un-
ited States market. The wages paid to cigar makers in both Puerto Rico
and the Pnilippines nave been lew, and neither comes under tn<= labor oro-
visions of tne Code of Pair Competition for tae Cigar Manufacturing Ind-
ustry. However, tue marketing provisions of the code apply to Puerto R; ico
9829
-339-
ci - rs, although the"' do not apply to Philippine ci pars. Any competi-
tive advantage which may accrue to manufacturers of cigars in the
Philippine Islands by reason of their freedom from the labor provisions
of the cigar code applies with- equal force to the manufacturers of
cigars in Puerto Rico. The sharp decline in cigar imports from Puerto
Rico in 1953 and 1934 hr.s more than offset the rise in imports from the
Philippine Islands, the trend of combined imports from both sources
being distinctly downward since 1931. Cigar shipments to the United
States fro p both so\irces are compared with domestic production of class
.a cigars in Table 13.
I ' le 16. - Comparison of domestic production o^ class A cigars
with to.ta] cigar shipments to the United States from the
Philippine; Islands and Puerto Rico
Domestic
f .'
Cigar
shipments to the
Stati
stical
riod
production
class A
t .
Uni
ted States
oe
i .Prom , . :
•From :
Ratio of total
: cigars
, .Philip-nine:
: Islaids :
•Puerto :
Pico :
Total . :
to domestic
production
: 3,310,35-;
: ■ Thousands
of cigars:
323,140
Per cent
1928
':'l79,570
,'1144,373:
9.8
1929
; 3,582,593
{.150,-94o
153,556:
309,501
3.6
1930
3,573,315
: 144,7 57
.145,566:
290,333
8.1
1931
3,637,784
; 158 , 520
155,535 :
325,506
3.3
1932
3,490,540
: 154,316
. 122,455:
267,071
: 3.2
1933
3,689,725
: 130,714
: 53,715:
244,429
: 5.6
1934
3,939 ,-122
; 203,895
: S3..375:
257,271
: 5.3
1955
(Jan.-:
.ar.) 900,618
: 52,932
:- 9,874:
62,806
: 7.0
Uages in the ci^ar industry
TTages in the cigar industry average 30 per cent or more below the
general level of wages in all manufacturing industries. Table 17 in-
dicates that the disparity between wages in the cigar industry and all
manufacturing industries has had a tendency to increase since 1926.
9329
-390-
Table 17. - Comparison of trend of vages in cigar raanuf actiiring
industry and all manufacturing industries
: Index of average
Statistical
Average wee 1 .
:ly wage ;
: weekly wage
period
All
Cigar :
: All
Cigar
manuf actur ing
industry :
: manuf actur ing
mdustry
1926
$24.38
$18.45 :
: 100
100
1927
24.37
18.04 :
: 100
98
1928
25.14
17.10 :
: 101
93
1929
25.26
17.02 :
: 102
92
1930
25.54
15.97 :
: 95
87
1931
21.17
14.30 :
: 35
73
1932
17.45
12.60 :
: 70
63
1933
17.07
; 12.08
: 69
66
Jan.— i.Iax.
15.53
10.89 ■:
: 62
59
Apr. -June
16.40
11.39 :
: 66
62
July- Sept.
17.74
12. 24 •:
: 71
66
Oct. -Dec.
17.74
13.71 •:
: 71
74
1934
Jan. -liar.
18.79
12.44 •:
: 76
67
Apr.- Jun e
19.68
1 12.91 :
: . 79
70
July-Sept.
18.65
13.25 .-:
: 75
72
Source: 3ureau of Lahbr Statistics. Unpublished tabulation of
employment and wages in the cdgar industry.
9829
-339-
cigars, all the^ r do not apply to Philippine cigars. Any competi-
tive advante ;e ■ hich m y accrue to manufacturers of cigars in the
Philippine Islands by reason of their freedom from the labor provisions
of the cigar code applies with equal force to the manufacturers of
cigars in Puerto Rico. The sharp decline in cigar imports from Puerto
Rico in 1933 and 1934 hrs more than offset the rise in imports from the
Philippine Islands* the trend of combined imports from both sources
being distinctly downward -since 1931. Cigar shipments to the United
States fro i both sources are corropred with domestic production of class
a cigars in .Tabic 15. ; :
Table .16. - Comparison of domestic production o-f class A cigars
with tota] cigar shipments to the United States from the
: Philrprjine Islands and Puerto Rico
Domestic .
Ci ;ar shipments
the
Statistical
product ion r
,
Uni
ted : States
oeriod
class A :
t
From . :
Prom :
- : Ratio of total
cigars -
.
Phili'roine:
Puerto '•
To Sal : to
domestic
•
Islands ■ :
?..ico :
: product ion
:
Thousands
of cigars:
: Per cent
1928
3,310,354 :
179,570 ;
, 144,373:
323,140:
9.8
1929
3,582,593
150,945 :
153,556:
309,501: .
8. 5
1930
3,573,315
144,757 .
- 145,556:
290,333:
3.1
1931
3,687,734
1 5 3 , 520 .
: 135,935:
325,505: .
8.3
1932
3,490,540
164,315 .
: 122,455;
237,071:
3.2
1933
3,689,723
: 130,714
: 53,715:
244,429:
5.6
1934
3,929,122
: 203,893
: 33,375:
257,271:
3.-3
1935 (Jan.-;
lar.) 900,318
: 52 , 932
: 9,374:
62,805:
7.0
gages in the ci^ar indur L ,r"
Uages in the cigar industry average 30 per cent or more below the
general level of wages in all manuf acturing industries. Table 17 in-
dicates that the disparity between wages in the cigar industry and all
manufacturing industries has had a tendency to increase since 1926.
9329
-390-
Table 17. - Comparison oi tread of wages in cigar manufacturing
industry and all manufacturing industries
: Index of average
Statistical
Average weel
:ly wage :
: weekly wage
period
All
Cigar :
: AH
Cigar
manuf actur ing
industry :
: manuf actur ing
industry
1926
$24.38
: $18.45 :
: 100
100
1927
24. S7
18.04 :
: 100
98
1928
25.14
17.10 :
: 101
93
1929
25.26
: 17.02 :
: 102
92
1930
25.54
: 15.97 :
: 95
87
1931
21.17
; 14.30 :
: 35
73
1932
17.45
: 12.60 :
: 70
68
1933
17.07
; 12.08 :
: 69
66
Jan.— Liar.
15.53
; 10.89 :
: 52
59
Apr. -June
16.40
: 11.39 :;
: 66
62
July- Sept.
; 17.74
12.24 :
: 71
66
Oct. -Dec.
17.74
; ; 13.71 :
: 71
74
1934
Jan. -Liar.
18.79
12.44 •:
: 76
67
Apr. -June
19.68
12.91 :
: ■ 79
70
July-Sept.
18.65
13.25 :;
: 75
72
Source; Bureau of Labor Statistics. Unpublished tabulation of
employment and wages in the cigar industry.
9829
-391-
The low level of wages in the cigar industry is due in ^>art to the
fact that 79 per cent of the workers in the industry are women. In J-cO_y,
1933, there were only 215 men among 15,935 machine workers and 10,307
men among 34, 532. hand workers. Evidently the trend toward greater
mechanization is responsible in large measure for the increasing propor-
tion of women to all workers in the industry.
The low average wage paid to cigar workers is also a result of the
oversiroply of hand workers who have "been displaced either by the tech-
nological advances in mechanical production or by the general decline in
the consumption of cigars. Furthermore, the concentration of hand pro-
duction in the cneaper grades has forced cigar makers' wages very low,
since these cheap cigars cannot carry the burden of very large labor
costs and compete with machine-made cigars. Naturally very few young
workers are learning cigar making as a trade, and this has resulted in
a decline in the average productive efficiency of those workers who have
continued in the occupation. The remaining hand cigar makers, through
lack of opportunity or adaptability to change to other types of employ-
ment, have been compelled to assume the major portion of the burden of
compensating the advantages of cheap efficient machine production.
Some idea of the relative position of the skilled hand cigar maker
and the semi-skilled machine worker 1 cam be gathered from Table 18 which
gives comparative data for female workers of both classifications in
Pennsylvania, and the entire United States. It will be noted that the
machine workers have received wages about 20 per cent higher than hand
workers, and that hand workers' wages have declined. Although these
wage rate comparisons are made on the basis of the rates paid to women,
such statistics as are available indicate that wages paid to men are
only slightly higher.
Table 18. - Comparison of average weekly wages of female
cigar makers in 1929 and 1933 for the United States
and for Pennsylvania
United States Pennsylvania
Median wage
1929
- All cigars -
Hand
$15.65 : ; $16.60
i iachine
19.90 : 19.95
Range of wages
1933
- Class A cigars -
hand
$3.90 - 11,60 : 37.50 - 11.23
iiachine
10.71 - 13.62 : ; 9.64 - 13.67
Source: 1929 data, Bulletin No. 100, women's Bureau,
U.S. Department of Labor, p. 93.
1933, unpulbished tabulation of special survey made by
the 3ureau of the Census for July, 1933.
9829
-592-
Wages for making cigars by ha? id
Labor cost is a relatively large iten in the total cost of making
cigars by hand. The manufacturer using automatic machinery has been
able to make a substantial saving in labor costs which has given him a
decided competitive advantage' over hand cigar manufacturers. As a re-
sult, machinery has largely displaced hand production methods in all but
a few sections of the United States. One of the few remaining strong-
holds of the hand cigar manufacturing industry is the York County dis-
trict of Pennsylvania. Here the smaller independent manufacturers have
formed a cooperative association to withstand the organization and ad-
vertising campaigns of the machine manufacturers. They have received
substantial aid in their endeavors from the workers in the district who
regard cigar making as a family affair, with fathers, mothers, sons, and
daughters combining their efforts to make a family wage.
The reputation of the York County district has been based upon the
production of low-priced cigars, which before 1930 were almost entirely
of the grade retailing for 5 cents each. During the depression, however,
machine competition in this field became very keen, and after 1931 a
great many of the York County manufacturers shifted to the production of
2-for-5 cent cigars. The major portion of the burden of this drastic
reduction in price was borne by the farmers, viiose leaf tobacco prices
in 1931-1933 dropped to less than 50 per cent of the pre-depression level.
In addition, "the piece rates paid to York County cigar makers for making
class A cigars were reduced 32 per cent between 1931 and the first half
of 1933. ' ;
Table 19 compares the average piece rates for making cigars selling
for 5 cents or less by hand in York County and in other sections of the
United States. It will be noted that in June, 1933, the average rate in
the York County district was only 66 per cent of the rate paid in other
sections of the United States.
Table 19. - Comparison of trend of average piece rates for making
class A cigars by hand in York County and in other sections
of the Unites States 1/ .
Average rates for mailing :
: Ratio of
Statistical
period
: class A cigars :
: York County
United States : :
except ' : York County :
: rate to
: rest of
York County : :
: United States
Per thousand :
: Per cent
1931
$5.20 : $5.76 :
: 93
1932
5.59' ' : 4.74 :
: 85
1933
Jan. -June
5.55 ': 3.89 :
: 70
June
5". 73 : 3.89 ■ :
: 66
1/ Average rate for ]
"oiling and bunching as reported in
Statistical
Survey of Hand-mac
Le Cigar manufacturing Industry prep
ared by S. D.
Leidesdorf & Co. , and filed as brief at code hearings.
9829
-593-
In June, 1933, recording to a comprehensive investigation of the
production of hand-made cigars in the United States, 66 per cent of the
cigars aade in the York County district were of the 2-i'or-5 cent classi-
fication. On the basis of this survey, it ao pears that York County was
making about 35 y er cent of all hand-made 2-for-5 cent cigars manufactur-
ed in the United States.
The average rate for making 2-for-5 cent cigars in York County in
June, 1933, was S3. 07 a thousand, the rate for 3-for-10 cent cigarc being
$4.09, and for 5-cent cigars, $5.36. Apparently the lower rate paid for
making the cheaper cigars was an important factor in enabling the manu-
facturers to shift to this type of production. The resulting wages, how-
ever, were so low that 50 per cent of the workers in this district re-
ceived less than 20 cent an hour. In contrast to this, only 15 per cent
of the hand cigar makers outside the York County district received less
than 20 cents an hour. Tabic 20 summarizes the results of the investi-
gation relative to the wage level in the York County district and in the
rest of the United States for making class A cigars by hand.
Table 20. - Frequency distribution of makers of class A cigars
by hand receiving specified hourly earnings during a
representative week in June, 1935 1/
Number of workers within:
: Cumulative percentage of work-
Hourly j
each wage
f,roup in - :
ers receiving less than grouo maxir rum
wage
.United States
: United States
group
, e::cept .
: York County
York County:
; except
: York County
York County
Cents
'
Under 12
: 9
73 :
: 0.4
4.6
12 - 13.9
26
164 ;
: 1.4
14.8
14 - 15.9
. 63
202 :
: 3.9
27.5
16 - 17.9
! 106
187 :
: 8.0
39.2
18 - IS. 9
: 177
200 :
: 15.0
51.8
20 - 21.9
280
222 :
: 26.0
65.8
22 - 23.9
: 462 :
209 :
: 44.2
73.9
24 - 25.9
: 303
105 :
: 56.2
85.4
26 and over
,1,113
235 :
: 100.0
100.0
Total
, 2,539
1,596 :
1/ Rollers, bunchers, and hand cigar makers, from Exhibit ? of Statisti-
cal Surve" of Hand-made Cirar Lanufacturing Industry prepared by S.D.
Leidesdorf & Co., and filed as brief at code hearings.
5829
-394-
Effect of the national Recovery Program
The provisions of the Code of Pair Competition of the Cigar Manu-
facturing Industry regarding .vages and hours of labor which are most
significant in connection with the complaint against Philippine imports
may he summarized as follows:
"Ho productive employee engaged in the production of stogies or
hand made cigars to retail at not more than 2. for 5 ce'nts shall be paid •
less than 27 cents per hour, and no machine cigar operator engaged in • •
the production of cigars made to retail at 2 for 5 cents shall he paid
less than 29 cents per hour.
"Cigar makers in the hand cigar manufacturing and stogie manufactur-
ing industries who -are classed as slow workers, up to 25 per cent of the
total number of such workers, and machine cigar operators, up to 10 per
cent of the total number of such workers need not receive the minimum
hourly rate herein specified, provided they shall be paid the same piece
rate as paid other employees of the same class."
Productive employees shall not be -oermitted to worlc'mbre than 40
hours in any one week except during two peak seasons each year, in which
the number of weeks and the number of hours per week shall be determined
by the code authority, subject to the approval of the Administrator.
TJage rates in the hand cigar manufacturing industry were generally
increased in July, 1933, when quite a number of manufacturers signed the
President's Reemployment Agreement. In June, 1933, the piece rates for
making 2~for~ 5 cent cigars in York County averaged $3.07 per thousand.
On the basis of data submitted in connection with the complaint, it ap-
pears that a rate of approximately $4.20 per thousand was paid during the
first si:: months of 1934. Under the rates ^prevailing in June, 1933, more
than 90 per cent of the York County cigar makers earned less than the 27
cents an hour minimum provided in the code;- during the first six months
of 1934, with the higher rates prevailing under the President's Reemploy-
ment 'Agreement, 61 per cent of the workers .received less than the code
minimum.
The York County manufacturers protested vigorously against the mini-
mum wage provisions of the code for making. 2— for-5 cent cigars by hand.
They declared that they could not manufacture 2-for-5 cent cigars and pay
a higher rate than $4.20 per thousand. Po.llo\?ing June 25, when the Code
of Fair Competition for the Cigar Manufacturing Industry, became effec-
tive, the York County manufacturers posted notices that only the faster
workers who could meet the minimum wage requirements of the code would be
employed. This amounted to a virtual lockout for a large proportion of
the workers, and resulted in a general strike among the cigar makers of
the district. The Code Authority of the Cigar Manufacturing Industry
solved the difficulty temporarily by declaring an emergency in the dis-
trict and authorizing the exemption of manufacturers from the minimum
wage rates of the code, provided piece rates of not less than $4.20 per
thousand were paid for making this grade of cigar. This order was made
effective for a period of 30 days, and has been subsequently renewed
several times. Since the York County manufacturers have at no time
9829
complied with the minimum wage provisions of their code,- it is impossi-
ble to measure the extent to which their costs would have "been Increased
by code compliance. It appears, however, that piece rates were raised
approximately 37 per cent after July, 1933, when a substantial propor-
tion of the manufacturers began to operate under the president's Reem-
ployment Agreement, and that no change has been made in these rates
since then.
In contrast to the difficulties experienced by the hand cigar manu-
facturers operating under exemptions which practically nullified the
minimum wage -revisions of the code, the machine manufacturers making
2-for-5 cent cigars have been able to meet the higher minim-urn wage re-
quirements of the code and expand their production. Some of the larger
manufacturers have made substantial additions to their machinery equip-
ment since the code became effective. One manufacturer has been operat-
ing at full capacity, employing 1,600 workers three shifts a day.
Despite the differential of 2 cents an hour in favor of the hand
manufacturer, it appears that the minimum wage provisions of the code
cannot be net by the hand manufacturing industry in competition with the
machine manufacturing industry.
9829
-396-
APPSNDIX ..
Tobacco in the Philippine Islands
Approximately 40,000 people in the Philippine Islands are engaged
in raising t&bacco, and nearly 200, ooo acres of land are devoted to the
crop. Philippine tobacco consumption, however is somewhat less than
half the annual product! n of about 100 million pounds, the remainder
being exported. Nearly half of the total Philippine crop is exported in
the unmanufactured state as leaf tobacco, the major part being sold to
the Spanish Tobacco Monopoly. Cigars, which are the leading item in the
manufactured tobacco exports, depend to a vary large extent upon the United
States mr-rket.
Table 1. - Comparison of total production and exports
of Philippine tobacco
Tobacco
: Ratio of
Statistical
Total crop :
production ;
exports
: total
period
Unmanuf ac- :
tured leaf:
,0.1
other 1/
Total .
:exports to
: total crop
Thousand pounds
: Per cent
Ave rage
1926-1930
103,782
46,956
9,182
56,138 :
: 54.1
1931
• 95,954
49,941
8,730
58,671 :
: 61.1
1932
; 99 , 529
47,664
8,016
55,680 :
: 55.9
1933
; 92,042
37 , 250
6,167
43,417 :
: 47.2
Source; Annual reports of the Insular Collector of Customs, Philippine
Islands.
1_/ Leaf equivalent of cigar and cigarette exports estimated from data
for raw material used in manufacture of total production.
('
Table 1 compares the tre-'-d of total production of tobacco in the
Philippine Islands with the trend of leaf and manufactured tobacco
exports. The decline in production in recent years has been due, in
considerable measure, to the reaction of tobacco growers to the low
prices which they have received for their crops.
Manufacture of tobacco products
The principal tobacco products manufactured in the Philippine
Islands are cigarettes and cigars, Table 2 compares the trend in the
manufacture of cigars, cigarettes, and smoking and chewing tobacco on
the basis f the raw material requirements of each.
9829
~397~
Table 2.' Comparison of raw material? used in manufacture
of Philippine tobacco produc" s
Tobacco leaf used in manufacture of
-
Statistical
period
Cigarettes
Cigars
Smoking
tobacco
Chewing :
tobacco
All
tobacco
products
average
1926-1930
1931
1932
1933
17,080
: 14 , 572
: 13,040
: 12,374
Thousand rounds
5,963 : 1,135 : 578 ;
5,048 : 967 : 554
4,831 : 667 : 469
: 5,384 : 489 : 432
24,756
21. , 141
19,007
18,679
Source : Annual reports of the Collector of Internal Revenue of the
Philippine Islands
rroductioi, and imports from the United States of cigarettes
Cigarette production in the Philippine Islands has been declining
almost steadily since 1926. ^'ji important factor contributing to this •
decline has been the increase in the importation of cigarettes made in
the United States. Table 3 compares the tax-paid withdrawals in the
Philippine Islands of domestic cigarettes and the cigarette imports from
the Unitea. States. Imports of United States cigarettes into the
Philippine Islands increased rather steadily until 1933, when there was
a sharp drop. Imports in the first six months of 1934, however, were
8 per cent of imports for the twelve months of the preceding year, while
the withdrawal of domestic cigarettes dropped to 43 per cent..
Comparison of tax-paid withdrawals in the Philippine
Islands of domestic cigarettes and cigarette imports from
the United States
Indicated consumption in :
:3atio of imports
FhiliDpine Islands of - :
: frbm the
Cigarettes :
: Unites States
Statistical :
Domestic :
imported from the :
: to domestic
period :
cigarettes :
United States :
: cigarettes
4,903
Millions :
1926
418 :
: 8.5
1927
4,924
542 :
: 11.0
1928
4,881
709 :
: 14.5
1929
: 4 , 811
1 , 020 :
: 21.2
1930
: 4 , 659
1,076 :
: 23.1
1931
; 4 , 203
: 1,132 :
: 26.9
1932
: 3,929
: 1,053 :
: 26.6
1933
: 3,532
: 73s :
: 20.7
1934 (Jan.- Jul
ie) 1,536
: 610 :
: 39.7
9829
-393-
Source; Animal reports of tl."
Philiirsine Islands*
I; :.tcr
f Int ?rnal Tlevenur of the
Exports of Philippine cigarettes are usually less than 1 per cent
of total production. Imports from the United States regularly constitute
more than 99 per cent of
I si anus.
total cigarette imports into the Philippine
Production and exports of cigars
The trend
was downward fr
More than twice
in the Islands,
United States. •
sumption in the
the United Stat
cigar pro duct io
the total Fhili
i rii the manufacture of cigars in the Philippine Islands
om 1926 to 1933 when a. slight upward movement took place,
as many Philippine cigars are exported than are consumed
and more than 85 per cent of the exports are sold in the
In 1933, as a. result .of the decline both of cigar con-
Philippine Islands and exports to foreign countries,
es took more than 70 per cent of the total Philippine
n. Table 4 compares the changes in the distribution of
.pine cigar roduction to the different consuming markets.
Table 4. - Comparison of the distribution of total Philip-
pine cigar production to different consuming markets
Philippine
: Ratio of
Stat i s-
cigars
: exports to
tical
: Total
Consumed' •
Exported
Exported :
:United States
period
:production
in
to foreign
to the' :
: to total
: ;
I slands
countries
United gtates :
: product ion
Thous;
inds of cigars :
: Per cent
19L6
: 357,668
108,045
43, 4,, 6
206,187 :
: 57.6
1927
: 317,466
108,9 67
34 ,684
173,814 :
: 54.7
1928
: 331 , 838
10.6,871
35,540
139,427 :
: 57.1
1929
: 298,323
110,741
.31,16.4
156,413 :
: 52.4
1930
: 283,352
102,845 .
27 , 299
153,208 :
: 54.1
1931
: 274,177
87,400
19,163
1'67,613 :
: 61.1
1932
: 257,959
69,855
12,890
174,909 :
: 67.8
1933
: 261,426
62,344
12,232
186,467 :
: 71.3
So arc.-
Annual reports of the Collector of Internal Revenue of the
Philippine Islands.
Cther tobacco products
Philippine imports of chewing toba.cco average about BOOjOOO pounds
annually, practically all of which comes from the United States. These
imports constitute about 60 per cent of the tax-paid consumption of chew-
ing tobacco in the Islands. Cn the other hand, slightly more than 90 per
cent of the taxy-paid comsumption of smoking tobacco is manufactured within
the Philippine Islands. Since 1926 Philippine imports of cigar leaf tobac-f
co from the United States have averaged 2.73, Ono pounds^ annually, and it
is estimated that 47 per cent of the Philippine cigars which have been
exported to the United States since then have been wrapped with this im-
port leaf. In recent years the Philippine Islands have been importing
increasing quantities of leaf tobacco from the United States for use in
the Manufacture of cigarettes.
9829
.. -599-
Reciprocal nature of tobacco trade by the United States
and the Philippine Islan ds
An average of 48 per cent of the value of all Philippine tobacco
exports from 1926 to 19 '-. -,.?. taken by the United states. At the same
tine the Unitdd States; has supplied 95 per cent or more of the Philippine
imports of tobacco products. Cigars constitute 9° per cent of the value
of all Philippine tobacco exports to the United States; chewing tobacco
and cigarettes constitute 78 per cent of the imports from the United
States. It appears that the tobacco trade between the United States and
the Philippine Islands is complementary in nature and very nearly equally
balanced, particularly in recent years. Table 5 compares the value of
Philippine exports to and imports from the United States, in total and
for the leading manufactured products.
Table 5. - Comparison of the value of Philippine exports
to and imports from the United States of tobacco
products
Tobacco produ<
;ts of Philippine Islands
Statistical
Exported to
United States
Imported from
United States
period-
Total
Cigars
: Chewing tobacco
Total :and cigarettes
Average
1926 - 1930
1931
1932
1933
$3,983
3', 40?
3,243
2,976
Ti
$3,603
2,885
2,866
lousands
$2,678
2,669
2,527
2,085
$2,076
2,342
2,249
1,195
Source: Vnnu- 1 reoo
rts of the
Tnsular Co"
lector of
Customs.
Phi 1 ippine I c -.lan x s .
The data given in Table 5 are taken from Philippine trade statis-
tics. The trends indicated by this table are confirmed by United States
traae statistics relative to the sprne tobacco trade. A summary of these
statistics, which, are given in .Table -6,. indicates that on a quantita-
tive basis the balance of trade was favorable to the United States in
both 19^3 and 19;,4.
9,29
-400-
Table 6. - Comparison of quantity and value of United States
experts to and imports from the Philippine Islands of
tobacco products
United State;; tobacco trade
with Philippine "slands
Statistical
Experts to
Imports from
Ratio of
period
the Philipp:
mes
the Philippines
quantity of
exports to
Quantity 1/
Value
Quantity
Value
imports
Thousand
Thousand
Tii^ucand
Thousand
pounas
Dollars
p ounds
dollars
Per cent
Average
1926 - 1930
2,992
: $2,497
5,446
$4,366
54.9
1930
3,590
z, , boo
6,587
3,537
54.5
1931
4,2^9
2,562
6,209
3,674
67.8
1932
5,20?
2,446
5,754
3,503
90.5
1933
6,582
2,662
3 , 471
2,840
: 189.6
1934
5,123
3,173
4,672
3,223
109.7
Source : Foreign !
Jonuaerce and: 11;
avigation
of the United States
Monthly
Summary, and Statement Ho. 2101 (Tobacco Exports) of the
Bureau of Foreign and Domestic Commerce.
<
In connection with the comparison' indicated above, it should be
noted that the United States internal revenue taxes on tobacco products
are collected in the Philippine Islands and the proceeds turned over to
the Philippine Government. The commodity value of the tobacco shipments
from the Philippine Islands to the United States is therefore overstated
by official trade statistics, since these data include not only the value
of the products themselves, but also the internal revenue tax which
ordinarily would be collected in the United States. On this basis the
.value, as well as the quantity, of tobacco trade with the Philippine
Islands has been favorable to the United States since 1932.
1/ Weight of cigarette exports estimated from average weight of total
production.
9329
-401-
Tobacoo promotion activities
The Government of the. Philippine Islanus is keenly interested in
the sale of Philippine cigars in the Unite a States, since it derives a
considerable amount of revenue from the internal revenue taxes collec-
ted on these cigars. In 1927 the Government established an advertising/
fund with an initial appropriation -of $150,000 to "be expended in foreign
countries to advertise Philippine tobacco products. 1/
Factories may draw upon this fund on the basis of allotments •deter-
mined by a Tobacco Board representing the Government and the various
tobacco interests in the Islands, providing they contribute an euual
amount. The advertising has been carried on almost exclusively in the
United States, the amounts indicated below being drawn from the fund
each year.
Table 7. - Expenditures from advertising fund for promoting
sales of Philippine cigars in the United States
1928
1929
1930
$15,711
20,891
14,340
1931
1932
1933
$19 , 620
•1/ 14,793
Source: Annual reports of the Collector of Internal Revenue of the
Philippine Islands.
if Estimated.
1/ Act No. 3424.
9_2S
-402-
Up to 1932 allotments were made from the fund for only 5-cent
or higher priced cigars. In 1932 the Tobacco Board disagreed regarding
the inclusion of advertising for 2-for-5 cent cigars, and no allot-
ments were made. In 1933, however, the 2-for-5 cent cigars were given
an allotment, and an estimated total of $14,793 was required cf the
fund. Total government contributions from this source during the
six-year period from 1928 to 1933 amounted to $85„355.
In addition to the advertising subsidy indicated above, the
Philippine Government has aided the sale of tobacco products in the ■
United States by means of contributions from the Tobacco Inspection .
Fund. This fund is derived from fees charged by the Government for
the inspection of leaf tobacco, cigars, etc., and is used to defray
the cost of inspection and tobacco agricultural development work in
the Philippine Islands the expense of promoting cigar sales in the
United States. Since 1934 two men, having the official title of to-
bacco agents of the Philippine Government, have been traveling exten-
sively in the United States for the purpose of urging uoon distributors
the advantages of handling Philippine cigars. In addition, a sum of
money, usually $5,000 each year, has been appropriated from the Tobacco
Inspection Fund to nay for general advertising of Philippine cigars in
United States tobacco trade journals. Apparently an average of more
than $40,000 a year of the cost of imported Philippine cigars is re-
turned to the United States in the form of these various advertising
and promotional expenditures.
Philip-pine cigar a __ in r elation to the National
Re c ove ry Ad ml n i .-- ! ra t i o n
It arrears that both the manufacturers and the internal revenue
authorities in the Philippine Islands are anxious to avoid the charge
that Piiilippine cigar imports are hindering the successful operation
of the cigar manufacturers' code in the United States.
On March 20, 1934, the Collector of Internal Revenue of the
Phili-mine Islands, after consultation with the principal exporters,
announced that government approval would be refused on export shipments
cf 2~for~5 cent cigars to the United States priced at less than $16.50
per thousand in States which have cigar taxes, and $17 in tax-free
States, less a 2 per cent discount for cash. These prices applied to
sales to jobbers, and were amended on August 10 to permit sales to
importers at a $15.17 per thousand. An additional amendment wa.s made
May 1, 1935, requiring that cigars weighing more than 13 pounds per
thousand be retailed in the United States for not less than 2-for-5
cents.
Under the provisions of the merchandising plan of the cigar manu-
facturing indxistry's code, the minimum selling price to jobbers,
including cash discounts, is '"15.17 per thousand with $17. G4 as the
minimum price to retailers. The minimum price on Philip-nine cigars
was therefore fixed at substantially the same level as the code minimum
for the United States. In addition, the Philippine cigar manufacturers
have expressed their willingness to abide by the various provisions of
the merchandising plan.
9829
Tile Collector i-f Internal RevwnTto wvc given po^er to regulate
cigar exports to the United States by Act No. 2613 of the Philippine
Legislature (1916) which authorised him to establish adeauate rules
defining the standard and type of leaf or manufactured tobacco which
might be ex-oorted from the Philippine Islands. The Act req-aircs that
no leaf or manufactured tobacco be exported to the United States until
it has been inspected by the Collector of Internal Revenue or hie duly
authorized representative; heavy -oenalties are nrovided for violations,
either of the provisions of the Act or cf eny of the rules issued by
the Collector of Internal Revenue in accordance thereto. These laws
give the Collector of Internal Revenue amnle no^er to enforce the regu-
lations which he has issued regarding minimum sales -orices of cigar
exnorts to the United States. His -nroblem is simplified somewhat by
the fact that in the last few years approximately 80 ner cent of all
cigar shipments to the United States was made by four large companies.
Wages for. making cigars in the Philippine Islands
Practically all Philinnine cigars are manufactured by hand, the
industry furnishing emnloyment for about 12,000 workers. Statistics
are not available, however, for tracing the course of wages paid to
hand cigar makers in the Philinnine Islands. The industry is very
largely concentrated in Manila, where the average wages for female cigar
makers were 63 cents ner day in 1926, 64 cents in 1927, and 59 cents in
1928.
In the early nart of August, 1934, more than 11,000 Philinnine
cigar workers struck for higher wages. On the basis of newsnaner
accounts it appears that $2 ner thousand was paid for making cigars
before the strike. After a period of 45 days, the strike was ended
by the grant of a temporary increase of 25 cents ner thousand in the
rates, sending the comoletion cf a comprehensive investigation by the
Philinnine Department of Labor. The labor department officials stated
that further increases would be forthcoming if the survey of the fact-
finding committee indicated that the factories could nay the higher
wages, but that in any event it seemed unlikely that there would be
any reductions from the new rates. According to the Secretary of Labor,
the average cigar maker should earn from 40 to 45 cents a day at the
$2.25 ner thousand rate.
9829
-404-
TABLE EA.MASK (No. 32)
9829
-40E -
LI ST OF TABLES
Table Pa x
1 - Tariff classification of import items alleged to "be
competitive 4<~>9
2 - Domestic production of cotton table damask ns recorded by
the Census 409
2a- Recent trends in domestic production of cotton table
damask by a group of seven important mills reporting
directly to National Recovery Administration 410
2b- Trends in monthly production, sales, stock and unfilled
orders, for the past 15 months, of 15 damask mills
reporting to the Cotton-Textile Institute 411
S - Trends in exportation of cotton damask (piec>: goods ex-
clusively) and in the ratios of exports to production
and, .import s 41 2
4 — Reported capacity of 'foreign' 'textile industries offering
competition 413
5 - Importance of the American market to foreign competitive
industries, expressed in ratios of exports to the
United States to total exports 415
6 — Trends in total value of imports in the principal com-
petitive groups; all in thousands of dollars 416
7 - Imports of linen table damask and manufactures of (ex-
cept napkins) ,' by principal countries of origin 419
8 - United States imports of linen nankins, by principal
countries, and by type 421
9 - Imports of manufacture's 'of flaxy n-.-s.p.f., by principal
countries (comprises chiefly linen table covers of
weave s other than damask) 423
10— Imports in the principal cotton groups combining table
covers and napkins, ' by'COuntrie s 425
11— Trends in the import unit values of linen damask and
linen napkins 426
12— Indices of trend in unit value of imports, by type and
.country , 1934 428
13— Seasonality of imports of competitive groups during the
four-year period 1931-1934, indicated by percentage
ratios 429
14— Trends in the ratios of imports through ea^h of the prin-
. cipal . customs districts, to tatal imports of allegedly
competitive items; i.e., damask piece gocd"3 and manu-
factures, and plain-woven table covers ani napkins «... 430
(continued on following page)
9829
-406-
Table Page
15- Trends in the Ratios of Cotton Damask Production and Com-
petitive Imports to Apparent Consumption of Table
Covers and Napkins, merchandised either made up or in
the piece ; basis of value 431
16- Trends in quality of fiber imported, for the linen in-
dustries of the United' Kingdom and Czechoslovakia 436
17- Trends .in sources, and costs of imports of flax and tow
into the United Kingdom mid 'Czechoslovakia 437
13- Trends in unit values of imports of flax and tow into
Ireland and Czechoslovakia, measured against trends
in the prices quoted to those countries on standard
Russian grades of flax and ton 438
19- production costs for linen fabrics in North Ireland, as
estimated by Thomas Woodhouse in 1S51 (excluding
interest on investment) 439
■20- Indices of price trends of haled cotton and hackled flax .. 441
21- Trends in wholesale price indices' 'Of haled cotton and .
, significant .cotton manufactures, as recorded by the •
Bureau of Labor Statistics *. .'..,': .-.• 443
22- Comparison of price trends in linen and cotton damask ..... 444
23- Indices of. trend in prices of domestic cotton damask,
"based on average for January - April 1933 = 100 445
24- Course of fluctuations in the currencies of the United
States and certain foreign countries 447
•25- Composite employment and payroll statistics - four mills .. 449
26- Ratio of individual cost items to total production costs
(.excluding interest on investment), based on separate
analyses of production 'costs of nine ■ individual pro-
ducts, as reported by six mills 45C
• -27- .'iiaasureraent qf .maximum possible effect of the National In-
dustrial Recovery Act on the cotton damask industry,
. .... . . .on the, "basis of production cost data submitted by com-
plainants, covering the first six months of 1933 and
of 1934 451 |
9829
. -407-
TABLE OP COIITEITTS
P&£e
Complainants Status -under the national Industrial Re-
covery Act 408
Subject of Complaint 408
Tariff Treatment 408
The Done stic Industry 409
Exports 411
Character and Scope of Foreign Competitive Industries .... 413
Imports 415
Import movement by 'principal classes and sources 417
Trends in unit values of imports 426
Seasonality of imports 429
Importance of customs districts in imports 430
Trend in Apparent Consumption 431
Important Cor.Detitive Factor s 432
The style element 432
Response of competitive industries to dictates of
fashion 433
Household storage practices 434
Respective qualities of linen and cotton in table
covers 435
hedifications in type and fiber quality of table
. linen manufacture 435
Cost spread betueen danask and crash 439
False labeling a.s to measure and fiber content 440
Pr i ce movement s ' 440
Fluctuations in currency values 44S
The Domestic Labor Situation 448
Comparison of Production Costs Before and Under the
Code 452
5829
-400-
SURVEY OF Ii~OHI.;ATIOK
01
TABLE COVERS . ■ '
April, 1335 . .
Complainant's Status under .the National Industrial
Recovery Act
This is a report on a complaint to the President with respect
to imported table covers and napkins., of linen or cotton, either
made up or in the piece. The complaint was filed by the Code
Authority of the Cotton Textile Industries, pursuant to Section 3 (e)
of the IT IRA.
The seven complainant companie.s. in. this case, all manuf acturers of
cotton damask, operate under the Cotton Textile Code, approved "by
the President on July 9, 1933, • • ■ •
Subject of Complaint
The complaint is directed against imports of ta.tle damask,
table cloths and napkins, in jacquard, dobby, and -plain weaves, com-
posed of pure linen, pure cotton* .or of rai::ed linen and cotton. Im-
ports consist main]./ of linen table covers and napkins of dana.sk or
plain weave. Less important items .embraced in -the -complaint include
linen damask and cotton damask in .the piece, and cotton covers and
napkins of either damask or plain .weave.. .The. only cotton and/or
linen table covers not embraced in the complaint are those con-
taining embroidery or drn/m threads.., . Complainan-t.& make- particu-
lar reference to 'imports of linen jacouard fabrics .and finished
cloths with plain or colored borders, colored border crash cloths,
peasant design crash, plaids, and/or checks, fringed and/or hemmed.
Comolainants state that "until recent years the word 'Linen'
was closely associated with the finest type of workmanship and
material, but that lately low-grade linen products have captured a
substantial -oortion of the market by capitalizing on the reputation
earned previously by s\ip<"-rior linen aroducts. "
Tariff Treatment
Products covered by this complaint are dutiable under five
separate paragraphs of the Tariff Act of 1930, as indicated in the
table below, v/hich shows the ad valorem rates carried in the present
and the two -orevious tariff acts.
9809
Table 1.
-409-
Trriff classification of import items alleged to be
competitive
Present :■
tariff :
parapraoh :
: Rates carried
: in Tariff Acts of -
;
: 1930 : 1922 :
1913
Linen
Laics:: piece goods
Dama,sk manufactures (except
napkins)
Plain-woven table covers
ITaokins, counting; 'oer square inch
1013 :
1013 :
1023 :
1014 :
1014 :
: 9in :
: 910 :
: 911(b) :
Per cent
: 45 : 40
: 45 : 40
: 40 : 40
: 55 : 55
: 40 : 40
: 30 : 30
: 30 : 30
: 30 : 30
35
35
35
Hot over 120 threads
Over 120 threads
Cotton
Dana si: piece £Oods
Damask manuf ac tur e s
35
35
25
: 25
Plain-woven tpble covers,
naukins, etc.
30
The Domestic Industry-
Domestic production of cotton table danask as recorded by the
Census Bureau dropped considerable from 1923 to 1927 and; after a small
recovery in 1929, declined sharply -ith the deprf ssion. Production of
tablp damask during this ten-year 'period failed to keep aace with gen-
eral production of all cotton ^oven goods; table damask represented
seventy-one one-hundredths of 1 per cent of the total poundage of woven
goods in 1925 and only twenty-five one-hundredths of 1 por cent in ■
1933. Table 2 gives Census Bureau* data for the table damask industry
over the period 1923-1933.
Table 2. - Domestic production of cotton table damask as
recorded by the Census
Year : Quantity
1923
1925
1927
1929
1931
1953
Value 1 : Unit value
Thousand -oounds: Thousands : Cents per lb.
15,193
14,504
11,006
12,379
5,993
5,402
$10,852*
12,450
o»
751
8,333
3,551
2,837
71.4
85.3
61. 3
67.7
52.2
52.5
Percentage of all
production of
cotton woven ppods
(poundage basis)
1/
0.71
.45
.52
.38
.25
1/ Hot available.
9329
-410-
Domestic production of cotton table dam,' sk, woven on either
jaecuard or dobhy looms, is now concentrated largely in seven mills,
three of them in North Carolina and one each in Virginia, Georgia,
South. Carolina, and Maine. The Census Bureau has received returns in
recent years from 15 mills. The seven active mills reported aggregate
table , damask production for 1933 directly to the National Recovery
Administration, representing 63 per cent of national production of all
cotton damask as reported for that year by the Census Bureau. The
other cotton mills possessing damask looms do not appear to have pro-
duced tahle damask regularly in volume daring the past few years.
The Cotton-Textile Institute states that production of these other
mills is decidedly subordinate to that of the seven mills. Table 2a
traces the course of the combined production of the seven mills which
have reported directly to the National Recovery Administration,
annually from 1929 through 1934, and quarterly during the past three
years. The quarterly data for the past three years show some concen-
tration of production in the first two quarters, but information at
hand is not sufficient to properly gauge normal seasonality.
Table ,2a. - Recent trends in domestic production of cotton
table damask by a group -of seven important mills reporting
directly to National Recovry Administration
Aggregate production :
of seven mills :
Thousand Bounds :
Years
1S29
6, S3? :
1931 ;
4,482 :
1952 :
4,524 :
li 53 ■
3,690 :
1934 :
3,528 :
Quarters
1952
Jan.-Mar.
1,548 :
Apr. -June
1,217 • :
July- Seat.
823 :
Get. -Dec.
941 ■ :
1933
Ja.a.-LIar.
797 :
Apr. ~ June
1,045 .
July- Sept.
943
Oct.-Df c.
9 on : :
1934
Jam. -Mar*
'1,073 :
Apr. -June
1,061 ' :
July- Sept.
584: : :
:
Oct. -Dec.
' 807. : :
, t
Ratio to Census
production total
Per cent
55.2
64.1
68.3
-Ill-
Table 2b is ba.sed on records compiled by the Cotton-Textile
Institute covering 15 mills reporting on cotton damask, woven either
on &obby or jacquard loons. It traces the course of monthly pro-
duction, sales, and the coarse of unsold stock and unfilled orders
since the beginning of 1934, It should be noted particularly that
these data are in units of linear yards in conti ast to Census data.
in units, of pounds.
Table 2b. - Trends in 'monthly production, s'ales, stock, and un-
filled orders, for , the past 15 months, of 15 damask mills re-
porting-to the Cotton~Te::tile Institute
' he nth
. :
Pro- . :
, Sales :
Unsold
:
Unfilled
. *
1 >
duct ion :
Stock
:
Orders
- .«
. •
- .•
't
during month :
End of
month
Thousand of linear
yards:
1934
' «
January
•
722 '. !
l,06i;
: 3,376
1,246
Pebruary
*
74S !
959
: 3 , 141
1,373
Lfcirch
' •
865 ;
485
: 3,478
1,119
April
•
838 .. :
590
'3,633
1,057
I [ay
•
•
942 :
65b
'3,921
1,029
June
•
814 •
81$
•3,903
859
July
•
■
730
629
: 4,014
852
August -
• •
• •
652
845
: 3,937
1,123
September
•
320
417
: 3,377
1,134
October •
■ :
857 ■
648
3,951
1,181
November
:
876
557
, ' 4,273
1,063
December
I
733
9.14
%277
1,157
1935 • ■
: ;
January - :
;
1,199
854
: : 4,393
1,026
February
•
970
580
: ' 4,719
672
March 1-16 :
a
543
: 892
: ; 4,447
943
The bulk of domestic production of cotton damask is- made up by
the manufacturers into table covers or napkins. The industry has con-
centrated largely on bletached ahite goods, but several manufacturers
have been introducing some c^lqr in borders, 'and several of them nou
offer table covers and napkins in plaids and checks, made on dobby
looms. The. percentage ' of total production contributed by these latter
manufacturers appears to be increasing.
Data at hand are not sufficient to establish the amount and
character of seasonality in damask production.
Exports
£::-j0rts of cotton damask are comparatively small in relation to
production, representing normally around 2 per cent. The principal
markets lieve been Cuba, Cana.d t, Colombia, and the Philippines. Our
official classification of exports does not permit thi •gaurgirig of the volume
of export of cotton damask manufactures. Table 3 indicates a substantial re-
vival in the volume of exuorts of cotton damask piece goods during 1934.
9829
-41 Sa-
lable 3. - Trends in exportation of cotton damask (piece goods
conclusively) and in the ratios of exports to pro-
duction and imports
"stimated :: Ratio of exp.to
poundage ::Domest. imports
total 27 :: product. Spc.gds.
1,000 :
1,000 :
Cents per :
1 , 000 : :
2/
2/
so. yds. :
dollars:
sq.yd. :
lbs. s:
In percentage
Yesrs :
1927 :
372 :
497 :
26.2 :
127 ::
1.1 !
53
1928
: 780 :
213 .
27.3 . ■
267 :. :
126
1929 :
780 ■
245 :
31.4 -
267 ::
2.2 :
136
1930 :
506 :
141 ;
27.8 :
, 175 :':
152
1931 :
307 :
64 :
20.8
104 : : :
1.5 :
2(Jl
1932 :
310 :
51 •
16.5 :
106 i
435
1933 • ;
369 . •
:58 :
15.3 !
126 :
2.3 :
4707
1934
• 485 . :
■ 96
19.8 :
166 i
*
Recent
.
quarters
1932
First
: 73 .
. 12
16.6 ;
25 ':
1.1
153
Second
; 34 .
. 10
28.4
12 : :
. .6
257
Third
96 . «
: 16
16.3 .
34 ■:
• 2.8
961
Fourth
90 ,
14
15.0
31 ; :
2.2
: *
1933
First
: P7 .
: . 15
15.2
33 :
: 2.8
:1488
Second
104
15
14.3
: 36 :
: 2.3
:7934
Third
: 112 ,
17
■ 15.1
: 38 :
: 2.7
. *
Fourth
: 56 .
: ■ 12
: 20.7
: 20 :
: 1.5
. *
.ISM
First
: 93
: : 19
: 2C.6 .'
: 32 :
: 2.0
■ *
Second
: 103
• 22
: 21.1
: 36 '■ :
: 2.3
. *
Third
: 120
: 24
: 20.0
: 41 :
; 4.8
. *
Fourth
: 167
: 31
: 18.6.
: 57 :
: 4.8
1935
First
: 109
: 19
: 17.4
: 37 :
: 3.9
. *
* No imports recorded for these periods.
1/ Conversion from square yards to pounds effected on basis that one
square yard of production averages, roughly, 0.342 pounds, in the
light of Census returns.
2/ Annual ratios are based on production as reported "by Census in
square yards. Square yardage production for recent quarters has
been estimated by applying a coefficient of 4.29 to the quarterly
poundage production reported to us by seven important producers.
The Census yardage production in 1933 vas 427;"o of the aggregate
poundage production reported to us for 1933 by these seven mills.
3/ Represents ratio of estimated export poundage to recorded import
poundage.
9829
-41. -
Character and Scope of Foreign
Competitive Industries
Flax was a popular material in the very earliest days of textile
manufacture in Europe. Manufacture of linen tended to concentrate grad-
ually in Belgium, Northern France and Germany, where conditions were
more favorable for growing and retting the flax. Manufacture was ex-
tended in the early days to North Ireland, owing to an abundane of cheat)
female labor and owing to admirable conditions for grass bleaching.,-.
Development of cotton manufacture was a serious. blow to the long
established linen industries, inasmuch as cotton is a fiber more easily
separated into grades and prepared for spinning, and as it possesses
the tensile strength essential with the use of high-speed machinery.
Cotton manufacture was taken up extensively in Europe,, spreading rapidly
through North England and Scotland and in Germany, Netherlands, France
and 3ohemia. The Japanese industry is a more recent development.
Table 4 groups recent authoritative estimates for the present
capc.city of the linen and cotton industries in most of the countries from
which competition is felt locally by the domestic damask industry. The
figures in this table, of course, cover all mill equipment in these
countries and not merely the equipment producing articles competitive
with domestic damask.
Table 4. Reported capacity of foreign textile industries
offering competition
Spindles
:
Power
•
looms
'In
thousands
North Ireland - linen
900 '
38
Czechoslovakia - linen
234
22
cotton
5,574
105
Belgium - linen
240
France - linen
: 550
22
Netherlands - cotton
; 1 , 242
55
Japan - cotton
! 3,644
86
Manufacture in North Ireland is concentrated largely in the hands
of about a dozen integrated companies which, after having built up a
refutation for high quality daina.sk some decades ago, have since settled
down to production of those standard items year after year. As a result,
the Ulster industry has been undisturbed by, or at least relatively un-
responsive to, ever-changing vogues for table covers of novelty weave,
design, and color. Their mill equipment is comparatively standardized
and has required little re-placement since the Y/ar. Tfeges are reported
to have been increased generally about 10 per cent a year ago.
Before the War, the linen industry in Bohemia consisted of about
twenty mills working primarily on good standard quality. There are now
in Czechoslovakia about sixty factories, and practically all of the new
9829
-414-
ones are concentrating on the manufacture of novelty cloths of fairly
coarse reave, Host of the old factories are still active, principally
on orders for shipment to contiguous countries. The cheap novelty pro-
ducts of the newer factories go chiefly to the United States. As the
depression followed closely upon the era of capacity expension, most
of the Czech mills are under bankers' control at present, according to
reliable reports. Czechoslovakia has dealt harshly with attemtps of
mills to exploit labor. The eight-hour day is prescribed generally.
7a g? scales in the linen weaving industry are reported to have been
advancad roughly 10 per cent in September 1934-. American Commercial
Attache Sam Woods reports under date of November 8 that profits of
nucerons mills in Czechoslovakia suffered during 1934 as a result of
commitments entered into before the currency devaluation of a year ago
increased the cost of imported flax.
linen -Tanufacturers in Belgium have the advantage of local supply
of the relatively best qualities of flax, end many of them have d evelop-
ed a reputation for fine goods. A few Belgian manufacturers took up
the novelty cresh patterns after the TJar, but the present disparity in
the value of Belgian and Czech&slovakian currencies has made it extreme-
ly difficult for the Belgian mills to meet the Chechoslovakian competi-
tion.
The Russian Pive-Yoar Plan included the building up of linen spin-
ning and weaving industries, a move wiiich was quite natural in view of
the fact that Russia, for a long time, had been the principal supplier
of flax to the linen industries in other European centers. The Russian
Government equipped itsfirst linen mills with second-hand machinery of-
fered at decidedly bargain prices by the. German and Belgian mills. Oth-
er mills now being completed, however, are equipped with quite modern
swindles end looms. In developing its linen export business, Russia
concentrated first on crash toweling. Prices on this item have been re-
duced to such a low level that this toweling is reported to be running
away with the market in the United States as well as throughout most of
Eur owe.
French linen table covers have not been a. big factor in the Ameri-
can market since the TTar.
A few cotton manufacturers, principally in Czechoslovakia and Japan,
introduced novelty color designs in plain woven cotton table covers and
this has bec-n responsible largely for their entry locally in competition
with domestic damask.
The imwortance of the American market to certain branches of foreign
textile industries can be gleaned f rom Table 5.
9829
-41 1
Table 5. - Importance of the American market to foreign competitive
industries, expressed in ratios of exports to the United
States to total exports
1222 LL2JH_L.123^: 1933
In percentages
United Ilincdom linen industry
Flain-woven "bleached piece goods
Dama.sk piece goods
Pamask manufactures
Czechoslovakia!! textile industries
Plain-woven linen manufactures
Linen damask manufactures
Cotton manufactures - present type
Belgian Linen industry
Plain-woven linen manufactures
Japanese cotton table cover industry
Cotton table covers and napkins
62
51
62
: 68
75:
: 53
56:
: 74
79:
: 81
87:
: 56
62:
: 9
13:
. *
* .
: 17
17:
71
37
73
87
54
21
50
22
Not available.
Imports
Inasmuch as our official import classifications record imports of
articles competitive vrith domestic cotton damask in different units of
quantity, the relative importance of imports in the various groupings can
be indicated only by comparison of value totals. Table 6 shows the trend
in the value of imports annually since 1926 and quarterly for the past
two years in each of the seven official classifications which complainants
allege to embrace competitive items. It will be noted that combined im-
port values of the four linen groups rose gradually to a peak in 1929; also
that the combined value of the three cotton groups in ]934 surpassed the
previous high, registered in 1926. ,'■
9829
-416-
c
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to oo t> o
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T* rH
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lilt
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03 CO CO H
CO CM ^ «
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^i co ^f in
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tn co to «o
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tO Q
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9829
-417-
The seasonal movement in the aggregate quarterly value of these
four linen groups and three cotton groups during the past four years
is presented graphically on the next "cage, based entirely on values
as given in our official import statistics. The dotted lines breaking
away from the solid lines after the first quarter of 1933, represent
the aggregate value equivalent in gold dollars of the discontinued 25.8
grains gold content. Obviously the dotted line v, ould more directly rep-
resent the real trend in import volume from countries Those currencies
remained stable against cold during this interval. A study of the
trend in unit values of exports from these foreign countries, as given
in their official export statistics, would indicate that unit values,
expressed in currencies which have remained stable against gold in most
cases, have shown little change. This leads to the probability that
the volume trend in our imports has actually more nearly followed the
dotted line.
Import movement by -principal classes and sources
Table 7 traces the trend during the past few years in the import-
ation of linen table damn sir and manufactures, except napkins, from the
principal countries of source. It will be noted that imports from
Belgium are nor 1 comparatively insignificant in relation to the 1927
volume, and that imports of linen damask from Czechoslovakia have also
declined considerably. Forth Ireland is shown to remain our chief
source of linen damask. Attention is directed to the late start, but
nevertheless rapid development, of importation of damask from Russia.
The first damask received from Russia was of fairly simple design and
usually the product of outmoded patterns. Importers are inclined to
believe that damask competition will develop seriously from Russia
within a few years, owing to the reports that PLussia has recently been
importing more modern jacquard patterns.
9529
-418-
Thousands
IMPORTS OF TABLE LINENS
(BY VAUPt)
LINEN
COTTON
•400
300
^--*v
zoo
100
| 1
K""* — \.
--—!----
"
l?3l
1932
1933
1934
Solid line - Totals in dollars
Dotted line *■ Totals ar t previous full gold conte.
Basis for the solid lint: Official U.S. Import Statistics.
S«29
-419-
Table 7. - Imports of linen taole damask and manufactures (except
nap"rins), by >'rincipal countries of origin
i "2—-
y-ir.ci a]
countries of o
•igin
Totals
: United
Oerrv nv
■ Pi ece : l.'anuf ae-
Xingi c .'
' G'jcohc -
Belgium
Hussia
1/
: ^,'oods : ture f ( e::-
(Ireland)
: slovakis
: cept naokins >
In thousand
3 of pou
ids
3" years
1927 1/
■ 2,138
■ 2, 335
37 G
' u\
• 557
5,558
19 ]
1,704
: 1,049
7
90
• 412
2, 539
1932
! 1,775
911
1
38
150
: 2, 617
1?
L.S03
61?
• 31
90
15
128
2,207
1934
1.2
713
33
144
*
48
2, 211
By Quarters
193?
Jan . -1 : p v .
444
271
5
X
*
38
703
Apr. -June
440
151
5
*
35
579
July-Seot.
394
218
10
*
*
39
597
Oct. -Dec.
251
8
*
*
38
739
1933
Jan.-iiar.
333
lo
8
1
*
35
468
Apr. -June
£'94
132
5
15
*
13
437
July- Sept.
444
203
5
48
*
46
634
Oct. -Dec.
518
149
12
25
*
34
668
1934
Jan.-i ,ar.
357
144
5
43
*
16
544
Apr. -June
281
115
4
4;
*
9
434
July- Sept.
357
225
S
3!
*
15
635
Oct. -Dec.
334
229
IS
c
*
8
599
1935
Jan. -Liar.
252
155
T~1
(
:°S
* :
16
427
1/ Data for 1927, and annually for Germany, re-orcsent general imports. All
others arc ,.ts for consumpti on.
X = Tot record
* = Figures not rvailable; presumedly ne-li^ible.
9829
-420-
Table 8 compares the trend through recent years in inroorts of linen
napkins from each important country of source. Figures in this table are
not directly .comparable with the figures in the preceding table or in
tables immediately following it, as napkin figures are given in number
of napkins as against poundage sho r 7i for ] iaen damask, and as against
value for other competitive items in later tables.
Attention is directed to the steadiness of napkin import volume
from North Ireland, Czechoslovakia and Belgium, and to the sharp in-
crease in imports from Russia. Imports from Ireland and Belgium are
chiefly damask, while those from Czechoslovakia are mostly crash or
other olain weaves.
The two final columns in the table show separately the trend in
the t'-'o classifications .for napkins carried in our import statistics,
the first now carrying ad Valorem duty rate or 4C per cent and the
second carrying 55 -per cent, for the rea.son that towels dutiable in this
second tariff cla.ss are more nearly competitive with domestic manufac-
tures. These two columns indicate that the irroort volume of coarse nap-
kins has held uo better .than that of fine verve.
5829
-4." 1 -
ble 8. - United States imports of linen napkins, bv principal
countries, and by by
Uni t
'Iv^i . •
Thread count per
Ki ng&om :
Czecho-:
Belgium:
Hussia
(All ':[
— square
irch
(Irel- i
Slovakia:
coxm- :
Ovjr tlTot ovei"
tries' 1 :
120 1/ :
_12Q l/_
In thousands of napkins
.3"- -ears
1 31 :
7,595 :
15,8 !
C12 ■
34 ■
5,740:
17,325 :
9,414
1932 :
8,076
15,449
o04
5
25,534:
15,961
9,574
1933
6,913 ■
IS , 7
9.'-
98
21,579:
12,484 :
9,115
19
5,907
13,575
945
240
' 1,190:
11,873 ■
9,316
3y Quarters
:
i;< ■
:
Jan .-. iar.
1,963
A 1 OQ
201
5,577:
4,391
",186
.'.-■ ■ -June
2,109
. -07
202
5,178:
3,284
1,394
t.
1,853
4, "IS
■ 273
3
S, 573:
3,791
2,882
Oct. . -.
2,141
4, 194
• 123
-
7 , 107 :
4,495
2,512
193?
:
_* .
1.54C
3,02
► P7 p
-
5,036:
: 2,327
2,210
i
1 , 55S
3, i
244
-
4,735:
2,586
2,199
b ..
1,859
kj , 357
: 255
34
5,993:
3,538
2,484
: ■ - . •.
2,147
3,274
: 158
45
5,755:
3,543
2,222
1934
•
1,599
• 3,826
: 254
: 49
4,837:
: 2,343
1,994
Apr.
1,236
2,086
: 201
144
3,797:
• 2,255
1,532
Jul-^-Sept .
■ 1,597
4,162
: 196
: 25
: 6,128:
• 3,316
2,812
-Dec,
: 1,474
4,501
: 293
: 2^
: 6,428:
: 3,450
: 2,978
1935
: ;
.-
r 1,219
: 3,89£
: 243
: 351
: 5,817:
: 2,724
: 3,093
l/ Mostly : reave.
2/ i'iostl: cr; ave.
9829
Imports of linen table coverings of reaves other than damask are
not recorded separately in our official trace figures, but invoice
analyses have revealed that they are tie outstanding separate item enter-
ed under the basket classification "manufactures of flax, n.c.p.f." Ta~,
ble 9 traces the trend in dollar value of imports included in this bas-
ket classification from principal countries.
It will be noted that Czechoslovakia stands out as the principal
supplier and that North Ireland has registered considerable gains, chief-
ly at the expense of Belgium. The increase shown for Czechoslovakia in
1934 can be discounted to some extent from 1 the volume standpoint, tak-
ing into account the fact that the figures in this table are in units
cf dollars subject to devaluation during the -oast two years. This same
consideration diminishes the significance of the increased total from
all countries sho^n for 1934.
9829
-423-
Table 9. - Import? of manufacture? of flax, n.s.p.f., by
principal countries (comprises chiefly linen table
covers of weaves other than damask)
sited
Oz
echo-
Other :
: Total
Kingdom
si
ovakia
Belgium
countries:
: all
:
: Countries
In thou-
sands of dollars
3y years
1931
29 V
1
, 533
255
255 :
: 2
343
1932
33
1
,335
199
163 :
r 2
,032
•1933
551
i
,148
144
128 :
: 1
781
1934
248
t_
,537
173
146 :
,154
3" r Quarters
1932
Jan. -liar.
72
344
59
54 :
529
Apr. -June
102
234
46
38 :
420
July- Sept.
75
399
39
39 :
552
Oct. -Dec.
65
358
55
33 :
531
1932
Jan. -Mar.
90
292
29
33 :
444
Apr. -June
77
219
38
24 :
358
July- Sept.
83
328
36
: 35 :
488
Oct .-Dec.
106
309
40
36 :
491
1934
Jan.-: [ar.
85
359
50
31 :
525
Apr. -June
59
253
37
25 :
374
July- Sept.
55
502
32
34 :
624
Oct. -Dec.
47
474
54
: 56 :
531
1935
•
■
i
:
Jan . -! [arc .
70
378
28
34 :
\
510
9829
_/. re-
imports of cotton table covers are ret out in table 10: in dollar
value, The final column of this table sho r, ?> a sharp rise in the import
value of plain woven items for 1933, and maintained in 1934. It will be
noted that this sudden spurt developed in the i'etaerlands where it now
arroear^ to be on the wane. The Few York representative of the consortium
of Dutch mills declares that his gjsilv colored merchandise has not been
able to maintain the popularity it developed in 1933 as a novelty, and
that it is losing out in competition '" r ita cheaper .merchandise from Japan.
Imports from Japan are shown in the table to be rising rapidly.
Total imports of cotton table covers of damask weave are shown to
have increased somewhat in value, though they continued to be less im-
portant than imports of plain weave, Czechoslovakia would appear to be
holding its own as chief supplier of damask weave table covers composed
principally of cotton. Imports from Czechoslovakia, include novelty
tinted items of mixed, rayon and cotton, which '.fere featured in many de-
partment stores during the Christmas season of 1934.
9829
-425-
Table 10. - Ircports in the principal cotton groups combining
table covers and napkins, oy countries
Damask v
: ' tec". : Czecho-
: ^ i-igdon: Slovakia
Plain weave
Total imports
: C "- echo- :i"ether-: Japan: ":' Damask: Plain
: Slovakia: lands : : : weave : reave
3y years
1931
1932
1933
1934
3y quarters
1S3C~
Jan. -Mar.
Apr : -June
Jul. -Sent ,
Oct. -Dec.
1933
Jan .-. '.a r.
A r.-June-
Jul. -Sent.
•Oct. -Dec.
:: --
Jan. -Liar.
Anr.-June
Jul. -Sent.
Oct. -Dec.
1935
Jar. .— L'ar .■
1?
25
44
49
5
5
8
7
5
11
15
13
10
16
■13
11
(Value in thousands of dollars)
99
125
153
17?
34
oL
24
37
45
45
38
45
25
37
32
0.5
32
: 23
59
304
54
255
5
1
9
12
2
5
• 20
4
.30
16
104
24
110
15
: 40
in
14
105
59
47
43
52
64
43
104
150
6
10
9
18
15
22
34
32
40
31
45
45
141
193
234
280
49
137
141
508
524
49
23
45
29
52
35
47
53
33
77
56
151
75
180
70
100
64
171
75
112
59 :
119
81 :
122
134
9829
-426-
Trends in unit valn.es of im'oort'v
Table! 11, based on our official import statistics, traces the trend
in unit value of imports of linen table damask both in the piece and made
up into table covers, also the trend in unit value of linen napkins, both
fine and coarse. It will be noted that .unit values on linen damask piece
goods have advanced since early 1933 in almost full ratio to dollar de-
valuation, but that the other items have advanced somewhat less.
Table 11. - Trends in the import unit values of linen damask and
linen napkins
linen :
damask :
Linen napkins
Thread count per
In the : Table :
"Diece : covers :
scuare inch
Over : ? T ot over
120 : 120
Cents per lb. :
Gents per napkin
3y years
1931
1932
1933'
1934'
3y eras rt
er?
1932
July
-Sept
Oct.
-Dec.
1933
Jan.
-liar.
Apr .
-June
July
-Sept
Oct.
-Dec.
1934
Jan.
-Liar.
Apr.
-June
July
-Sent
Oct.
-Dec.
1935
Jan. -Mar.
1934
January-] larch
July- S ep t ember
October-December
1935
January-Larch
95.3
63.1
70.5
84.3
69.5
58 . 2
50.8
52.5
73.5
85.9
79.9
89 . 5
35.2
35.4
73.4
57
68
44
100.4
76.3
83.3
94.9
77.7
74.5
71.6
75.7
35.2
94.5
94.5
95.3
93.4
95.9
96.8
10.7
8.6
9.9
11.5
3.5
3.2
3.4
8.5
9.9
12.2
11.5
11.9
11.3
11.5
10.7
3.5
3.0
3.3
3.8
2.9
3.0
2.3
n n
c • o
3.8
3.9
4.0
4.0
3.3
3.7
3.9
In percentage increase since January-
Larch, 1953
5? : : 37
30 : : 35
33 : : 37
25 : : 27
43
35
32
39
9829
•
-427-
The advance ia mit value recorded for inroorts of important compe-
titive items from individual countries of source are set out in Table 12
in the form of indices based on 100 representing the first quarter of
1933. The indices relating to these countries marked with an asterisk
have been calculated from official export statistics for the countries
concerned, the foreign values "being converted to dollars at average dol-
lar exchange for the ouprter. Indices for linen damask items and for
napkins are based on United States import statistics.
It will be noted that unit values (expressed in dollars) have in-
creased more substantially on imports from Ireland a d Belgium than on
imports from Czechoslovakia. The New York agent for the Dutch manufac-
turers of novelty cotton table covers has supplied data which would in-
dicate that Dutch values have been cut consideraol"'- during the past year,
oresumebl-'- to meet convoctition from Ja _ oan.
9829
-428-
Table 12. - Indices of trend in unit value of imports, by type
and country, 1934
(Besed or: Januory-Larch. 1953- 10 0)
1935
Linen r>:
'O ducts
Damask
piece
rocc s
Damask
table
co"t rs
apxms
Fine
Coarse
Trble covers - Plain-
1 7 oven
Cotton pr o ducts
Table covers - plain-
woven
Table covers - ve i; yes
otner thai; damask
Country of
source
Ireland
Ireland
C z echo si ova 1 .1 a
."his si a
Ireland
Czechoslovrhi--.
Belgium
Ireland
C z e chn si ovalri a
Belgium
Ireland*
C z e cho si ovaki a*
Belgium"
Czecho Slovakia*
Netherlands**
Japan*
First
ouarter
154
142
124
252
141
112
127
1.94
143
140
167
143
144
141
150
142
Second
quarter
171
165
129
137
158
127
145
Thi rd
quarter
167
150
143
115
119
21 7
575
149
150
125
114
159
157
140
157
152
148
148
148
153
131
162
141
120
145
j'irst
quarter
144
145
132
313
142
124
196
209
133
148
* Bsti^.r tes based or. analysis of foreign unit values of exports to tne
United 5trtes.
** Based on dollar shipping values as reported by the factor^ representa-
tive's in ITew York of the consortium of Dutch mills.
9829
-429-
c .
"li ty of impo rts
Th° seasonal movement in the importation of all items competitive
m ith domestic cotton damask is portrayed in the graph appearing on
page 17, In further evidence, Table 15 gives the ratio to total
imports in each classification during the -oast four years, of imports
during each quarter and each month of those four years.
Table 13. - Seasonality of imoorts of competitive groups during
the four-year period 1931-1934, indicated by p°rc'entage
ratios
January- : Aoril- • July-! October-
March '• June :Sept. December
Li
men
1J Damask niece ^oods
2) Table covers, etc., of damask
3v Table covers, etc., plain "eave
4.) Nankins, fine
5; Napkins, coarse : .
Simple average
Cotton table manufactures
6/ Damask
7) Plain-Wov^n
.Linen group Cl) ; .
Linen groups (?) (3) (4) (5)
.Cotton .groups (6) (7)
Ratio of quarterly imports to
total imnorts
30
16 :
PI
33
22
! 20
27
31
24
: 20
28
28
24
: 20
26
30
22 ■
' 19
29
' 30
£4
: 19 ;
26
: 31
20 •
: 24
27
: 29
24-
: 25 ;
: 28
: 23.
Ratio of 'monthly imnorts to
; • total - imnorts
7_8-6 : 9-6-18
7-9-11:11-10-8
9^-8-11 : 10-9-7
Note: Based on poundage for it^ms (l) and (2); numbers for items (4)
and (5); and value for items (3), (6), and (7).
9829
-430-
Imoortance of cur tons district s in. imports
The dominating position of New Ior v as receiving "ooint for
competitive imports is revealed in Table 14. This sho^s that the
Hom York customs district handles ov?r 30 o°-r c a nt of competitive items
of linen, followed by Chicago. It sho^s also that Pacific Coa.st dis-
tricts have risen substantially in importance as clearance joints for
competitive articles of cotton and that Chicaro receipts have also
increased. Ke^ York, neverless, continues to handle over 60 p°r cent
of competitive imports of cotton.
Table 14. - Trends in tli° ratios of imports through each
of the principal customs districts, to total imports of
allegedly competitive items; i.e., damask piece goods
and manufactures, and plain-woven table covers and
' - napkins
(Pm- rp.nt)
Customs
district
Articles of
lin°n
Articles of
cotton
All competitive
imports
19?7
19?9
1971
19P7
1929
1 971
1QP7
1929
1971
IIott York
79.
:'78.
81.
68.
78.
62.
77.
78.
77.
Chicago ;
8.
: 8.
7.
8.
7.
14.
8.
: 8.
8.4
Massachusetts
2.4
3.2!
1.5
1.4
1.
1.9
2.2
2.
Philadelphia'
1.9
' 2.2
1.7
1.1
1.3
• c
1.7
• 2.
1.4
St. Louis
1.7
1.5
1.8
1.2
2.1
2.4
1.6
Los Angeles
.7
.3
1.2
2.7
3.5
6.
1.1
1.3
2.2
San Francisco
.8
.8
.9
9.5
1 n
o • <
7. !
2.5
1.3
2.1
All other
5.4
; 5.3
4.3
7.7
3.8
8.6.
5.7
4.8
5.3
9829
-431-
Tr°nd in Apparent Consumption
Table 15 gives a rough indication of the trend in apparent con-
sumption of table covers and napkins of cotton and/or linen, merchan-
dised either made up or in the niece. Apparent consumption in this
case is gauged "by adding the total dollar value of imoorts to the
value of domestic production as reported by the Censxxs Bureau. On this
tasis, consumotion registered a pea 1 ' in 1927, and thereafter dropped
68 per cent to a lo^ in 1933.
The movement in relative importance of production and imports in
apparent consumotion over the period 1923-1927, as indicated in the
tWo final columns in Table 16* was due partly to increased volume of
imoorts, but also to a considerable extent to curtailment of domestic
production. The ratio of imoorts to a-oparent consumotion dropped
• substantially from 1927 to 1929, but it is shoim to have been main-
tained at close to 68 per cent since 1929.
Table 1?: Trends in the Ratios of Cotton Damask Production
and Competitive Imoorts, to Apparent Consumotion of Table
Covers and "apkins, merchandised either made up or in
piece; basis of value
Domestic
production
value
Total
value
of
imports
Apparent !
consumption
(l) plus (2)
Ratios to apparent
consumption
Domestic
-nrnrhif.-H n-n } Xj' '.^f..\ A.
(l) i
(2)
(3)
(in percentage)
1923
10,851
12,667
23,518
56
'• 54
1925 :
12,450
11,457
23,907
52
48
1927
6,751
21,087
: 27,838
24
76
1929
8,383
18,702
27,085
31
' 69
1931
.3,651
7,837
11,488
32
68
1933
2,837
5,985
' 8,822
32
68
1934 (est)
; 3,247
6,322
10,069
32
68
1st quarter
1935 (est)
; 990
1,628
2,618
38
62
;929
-432-
Important Competitive Factors
The style element
Prior to the War, bleached doraa.sk of either linen or ootton
enjoyed almost undisputed title in the field of taljle covers and
napkins, owing primarily to dictates of fashion. Ascending the living
scal°, families moved invariably from oilcloth to plain cotton check
and finally to white damask. It was th n usual custom for housewives
to have several Dualities of the latter so as to he -ore-pared for all
occasions, ranging from familv meals to formal dinner parties and
receptions.
during and after the War, th° table itself gradually emerged from
obscurity with the rapid extension of the vogu° for th° use of
individual doilies, centerpieces, and runners. Owing to the background
afforded by the table, open-work designs including la.ee were found to
be effective, thereby displacing damask to some extent from its former
supremacy. Fashion during this transition period continued to call
for white goods or unbleached 1 in°n or mildly tinted over-all color.
The next caprice in fashion for table covers was intimately bound
up with the vogiie for -provincial dining rooms. Interior d°cora,tors
decided that white table coverings produced an off-note in rustic
settings inspired by Normandy, Brittany, etc., and they introduced
color in table s°ts to harmonize with the -peasant furnishings. Modern-
istic furniture also cried for color. The no longer a novelty p°r se,
color in table lin°n continues to be considered decreed by numerous
furniture backgrounds, and to be sma.rt for a. variety of occasions, re-
gardless of the furniture type.
More or less coincident with th° introduction of colored checks
and -olaids in table covers to harmonize with provincial furnishings,
interior decorators introduced fringed cra.sh table sets to more com-
pletely transplant th° peasant atmosphere carried in th° furniture and
furnishings, and th°se peasant weaves soon achieved widespread
popularity.
As a result of these" changes in fashion during th^ -past few years,
the housewife's -problem is more complex than, it was when a series of
white damask table sets ranging in quality, would suffice for all
occasions. Now, if the family budget permits, she win aspire to the
following range of items in her linen closet; (l) Several white table
sets of damask or cut-out embroidery for family or informal dinners;
K2) A double damask table cloth of elaborate -pattern, and probably also
a lac table covering for formal dinners, the lace cloth serving also
for formal afternoon receptions; (3) A dama.sk or crash set either
bordered or otherwise -patterned with subdued coloring for informal
Sunday night supper; (4) Several crash table coverings or doily sets in
gay colors for the breakfast room, and on° of these will probably be of
red and white check to go on the self-service table for evening en-
tertainment, particularly if refreshments are to include to»r; (5) A
heavily laced cloth for formal luncheons, and a "cWnie c ri" novelty
set for less formal luncheons for women; (e) Linen bridge sets either
9829
-433-
embroidered or a-p-pliqued on solid color.
Repeal, rnor^ than any other singl° factor, may "be held responsible
for the returning popularity of sll-over tints, inasmuch as these have
"been found to he the most effective backgrounds for the serving of
table wines. Repeal also resulted in the mushroom development, not
of the old type har room, hut rather of arty cocktail bars,
rathskellers, etc, H°r<= the continental atmosphere wa.s copied, usually
to the extent of furnishings in gaily colored checks, r>laids, etc.
As novelty table sets have become popular for numerous household
•oUrposes, th° damask trade has become more dependent on the hotel and
r°staurant group of consumers. Defection from this group has been
pfetty well confined, up to the present, to tea rooms and rathskellers,
but some hotels hav° compromised to the extent of s°tting ut>, alongside
of their main dining rooms, a gaily furnish d and mor° speedily
s°rviced "Deauyi]l° Coffee Sho-p" or. "Valencia Patio."
A considerable -portion of the -pioneering in nov a lty lin°ns
originates with interior decorators and "ith buyers for department
stores. These buyers are ever on the alert to sense the trend in
-po-oularity of types, -patterns and color effects, and they trv con-
stantly to introduce an item ahead of rival establishments. They
make a regular -practice of visiting mills in European centers and
consequently exert considerable influence in th° inspiring of novelties.
As a result there is some basis to a buyer's matter-of-fact statement
that the -public, six months h°nce, will be giving -preference to, say
heavier bandines, larger checks, and more tones of brown. It is
almost c°rtain, however, that he mill have a quite different prediction
for th° future, by the time the retail customers are confirming his
previous prediction.
Response of competitive industries to dicta t es of fashinn
From the moment housewives became novelty-conscious in table
covers, the domestic sales volume of an individual manufacturer of
these novelty items has been somewhat dependent upon his agility in
keeping up with or ahead of these -popularity trends. Domestic cotton
damask manufacturers have res-ponded to the call for colorings to the
extent of weaving a mildly colored border in some of their items.
Several domestic mills are also using dobby looms to turn out gaily
colored checks, plaids, etc.
Asserting that the weaving of color in damask is tantamount to
"gilding the lily", most of the Irish linen damask manufacturers have
maintained production of their old. standard qualities carefully bleached,
but a few have compromised to the extent of adding new it°ms to their
line, designated in th° trade as -promotion cloths, made up of somewhat
yarns and frequently containing a bit of color in the border. On the
other hand, the vogue for -pea.sant cloths developed in a -period wh=n the
Czeckoslovakian lin°n industry was in process of growth, and many of the
n o w°r mills are equipped to specialize in crash and color weaves. Sev-
eral mills in Belgium took up crash and color "eaves some years ago, but
most of them have gone back to their old standard items, after an attempt
9829
- 434 -
to compete on the crash, novelty goods with Chechoslovakia. Russian table
linen offerings commenced with damask. It is reported, however, that
some of the new Russian mills are equipped for crash and color weaves.
The importing of Irish table damask into the United States is in the
hands of a comparatively small number of firms, many of them branch sales
offices of the Irish manufacturer. Tnc: sales approach of these branch
offices tends to take the form: "You knew our good old standard lines.
Here's our 'schedule of quotations. What do you wish?" In contrast,
agents in Hew York for Czechoslovak! an Mills approach important customers
in the following manner: "'Bfe are sales representatives for the ,
Mill in" Czechoslovakia, which is large and equipped with modern looms.
This display indicates the range of items it has been turning out recently.
Tell us what you. have in mind to purchase this season so far as pattern
and color are concerned, and we will lay the matter before our mill and
we will let you know later what they can quote."
Chechoslovakian cotton mills got an early start in the meeting of
local demand for dobby-woven table sets of novelty pattern and coloring.
A group of Dutch mills" undertook an intensive sales campaign two years
ago on cotton table covers of comparatively plain weave but highly colored,
quoting unusually attractive prices. This campaign produced a good busi-
ness volume but apparently a minimum of profit considering the trend in
vc.lume of recent shipments.
Household storage practices.
When hope chests were a commonplace but very serious family institu-
tion in the United States,. a large set of table damask was usually one of
the first items to go into the chest, followed later on by one or more
less pretentious ' sets. This took- hundreds of tons of damask. off store
shelves and, at least temporarily, out of circulation. The original fine
damask in hope chests of many a bride of the pre-War days is noT gracing
the table for family celebration of her daughter's engagement .
The probability of this daughter's having inherited and retained her
mother's zeal for hope chest accumulation would depend on habitat and
interests. It would be very small if she had taken up some profession
and if she had moved from home to independent urban quarters. During
the years of hope chest linen accumulation by a daughter now attaining
marriageable age, she might have been tempted frequently to purchase
novelty table sets; nevertheless she probably resisted temptation in
most casCs and kept her fund for novelties intact pending settlement on
such matters as marriage date and home furniture. When these matters are
later settled and when she sets out to purchase her novelty linens, she
will give relatively less consideration to durability and more to price
if she aspires to keep up with constant changes in novelty vogues; but
her damask purchases will still be made with an eye to durability and
quality, as a long term investment.
9829
-435-
If the b ride- to-be is faced with the pros-pent of living in an apart-
ment, she will not think in dozens as her mother probably did when pur-
chasing tatole linen* She may have to cope not only with small and incon-
venient storing space for linen, tout with physical limitation to the num-
toer of dinner guests*
Res-pec tive aualitie r. of linen and cotton in tatole covers
Linen damask is normally valued at a considerable premium over standard
ootton damask, owing to its relatively greater wearing qualities, resis—
tence to present day laundering methods, and permanency of sheen produced
toy ironing. Standard cotton damask not only rates lower in the above
qualities, tout lacks the "body" and elasticity demonstrated by linen after
ironing 'end storage. The lint of cotton covers demonstrates an affinity
for . w.ool' suitings, '■• ■ ■ '
With a view to overcoming these defects, several domestic manufac-
turers of cotton damask' subject their fabric to special beetling and other
patented' finishings, which result in the securing of a product closely re-
sembling" linen damask and retaining most of its special -oroporties.
In view of-' these superior qualities of linen, standard cotton damask
has never been able to compete with standard linen dama.sk under conditions
of purity prices. • The amount of necessary price' differential is cut down
somewhat' but not entirely by the subjecting of cotton to patented finishing
processess. One of the' complainant mills described linen damask as "made
of costlier staple, in higher constructions as a luxury product," and cot-
ton damask as "made of' a cheaper staple, generally in lower qualities for
people who could not afford linens."
Modifications in type and fiber quality of table linen manufacture
In preceeding to a discussion of the competitive situation, this com-
plainant adds that ,: during the last several years, this has been changing
and the foreign manufacturer, with labor cheaper than ever and flax cheap-
er than ever, has seen the opportunity to obtain the low and table cloth
business here as well as the high and business, and by also using cheaper
weaves and chorjper constructions? has been able to £lood ■ ■ • ■ .. ■ -v
the American market with so-called all-linen table cloths in direct compe-
tition with cotton table cloths.. The most serious competitor has been the
linen crash table cloth."
It is indeed a fact that numerous Continental linen mills, particularly
in Czechoslovakia, are concerntrating now on cheaper constructions and
weaves to cater to the market for peasant cloths in novelty patterns which
are now favored for harmony with ..rustic furnishings. So far as damask is
concerned, however, wholesale dealers and department store buyers report
that, while plenty of foreign lin»n damask manufacturers have added one or
more promotion cloth items to their line, practically all of the damask
weavers in North Ireland and Belgium, and most of those in Czechoslovakia
have refrained from debasing the quality of their standard items. The
it does not lead to any conclusions specifically on table covers, Table 16
gives a general indication of the trends in proportional use of flax and tow
by the linen industries in North Ireland and Czechoslovakia. Crash table
9829
_ A.1A
cover production undoubtedly contributed to the increasing and relatively
greater use of tow in the latter country , and promotion cloths were res-
ponsible in pari for the increased use of tor in North Ireland.
Table 16 - Trends in quality of fiber imported for the linen
industries of the United Kingdom and
Czechoslovakia
,
Imj
Ui
Flax
(1)
jorts into the
lited Kingdom
: Imports into
: Czechoslovakia
Toy; : Ratio of
(2) : (2) to (l)
: Flax : Tow' :
s (1) : (2)
Ratio of
(2) to (1)
1913
1930
1931
1932
1933
1934 (9 months)
Thou;
of J
84.0
. X
28,9
30,9
. 29.0
' 27.9
;ands :
:ons : Per Cent
18.4 -j 22
x : x
14.3 : 49
17.8 : 58
22.7 : 81
21.3 : 76
: Thousands
: of tons
• X \ X
: 11.8 : 5.3
:• 5.6 : 5,3
: 10,2 : 6,6
: 4,2 : 6.3
: 9.5 : 9.3
Per cent
X
45
93
64
149
98
x indicates that data are not available.
Table 17 indicates the, changes which .have occurred during recent years
in dependence of the linen industries in North Ireland and Czechoslovakia
on various sources for their raw material; it also shows the relative price
level each year on material secured from these different sources. As
sources of supply for the Irish industry, Russia is shown to be returning
rapidly to the importance it occupied before the War. Since 1931 Irish
manufacturers have been drawing more of their' Russian grades direct and
purchasing a lesser quantity of Russian grades from shippers in Baltic
countries, despite the fact that the imports direct from Russia, show an
increasing differential in unit. value over imports from the Baltic coun-
tries. Irish manufacturers are shown also to be depending more upon Bel-
gium than they were before the War. The unit value of imports from Bel-
gium is shown to have remained fairly constant in sterling at a level very
high in relation to imports from other sources.
Czechoslovak! an mills are also shown to have increased their direct
takings from Russia,, particularly takings of tow, thereby placing a smaller
volume of orders in Germany and Poland, although unit volume of imports
from these latter countries continue lower than unit volume for Russian
shipments. Czechoslovak! an mills take comparatively little of the high-
quality Belgian flax,
9829
- ■.-
Table 17 - Irends in sources aid costs of imports of flax and
tow into the United Kingdom and Czechoslovakia
: Imports
into th
e : : :
; a
Import
s into
: United
iCingdom
: : :
C'zechos
Lovakia
Year and
: Ratio
to com-
: Unit
value : : :
: Ratio
to corn-
: Unit value
s ource s
:bined
imports
: per
ton : : :
:bined
imports
: per kilo
: durin
z year
• • ■
: during year
: PI ax
: Tow
: PI ax
: Ton : : :
rling : : :
:• Plax
: Ton
: Plax : Tow
: Per
sent
: £ Ste
Per
sent
: Kroner
1915
: : :
Russia
: 67
: 13
: 41
: 37 :: :
northeastern
* #' ■ ■
Eur oo e 1/
I X
' X
: x
: x : : •
Belgium
: 14
: 4
: 89
: 17 :: :
1931
• • • - •
U.S.S.R.
! 8 .
: 6
37
: 23 : : :
: 13 •
: 11
: 5.0
: 3,6
northeastern
: : : ;
Europe
• 28 ;
: 23
36
: 22 : : :
: 34
: 33 •
: '4i8
: 3.1
Belgium
28
: 2
81
: 34 :: :
: 2
: -
: 12.7
: -
1932
; : : :
u« s» s.r.
17
22 .
43
28 :: :
: 16
• 3
4.3
: 3,6
northeastern
: : :
Europe
20
11 .
41
30 :: :
: 41
34
•4.3
, 3.1
Belgium :
23
2 :
75
26 :: :
: 2
!
9.5
: -
1933
: : :
U.S.S.R. :
11
34 :
51
31 :: :
: 11
26
5,6
3.2
northeastern
• • *
Europe :
11 :
46
34 : : :
: 24
30 :
.'5.1
3.2
Belgium :
29 :
3 :
81 :
28 :: :
: 1 :
:
11.2 :
-
1934 (9 months'):
: : :
U.S.S.R. !
20 :
36 :
50 :
27 :: :
: 18 :
29 :
5.4 :
3.4
Northeastern :
: : :
Europe :
x :
x :
45 :
33 : : :
: 26 :
18 :
5.3 :
3.3
Belgium :
23 :
x :
80 :
x : : :
'. ti '•
— i
9.2 :
-
1/ Comprises Baltic Countires, Poland, and Germany, and includes a con-
siderable percentage of transshipments originating in U.S.S.R.
NOTE: In place of figures (x) Is used when data are lacking;
(») is used when imports were nil or insignificant.
9829
-438-
TafcfLe 13 indicates the manner in which unit volume of Irish and
Czechoslovakia imports of flax and tow have moved during "the past four
years in relation tc quotations on Slanetz flax and Hallo tow, those
latter being Russian grades so important in the trade as to strongly in-
fluence the orice trends for all other grades in world markets. This
given some support to the clai'a of lineal importers that manufacturers
in North Ireland and Czechoslovakia have not moved over generally to use
of relatively poor fiber. In 'the case of British imports/ where unit
values would appear to have failed to keep up with the rise in Slazetz
quotations, it is "believed' that ' t the unit value for the "base period was
influenced abnormally "by heavy imports from Belgium at an' unusually
heavy -premium over Russian' qualities. '
Table 18 - Trends in unit volume of imports of flax .and to« into Ireland
and -Czechoslovakia, measured against, trends in the prices! quoted to
those countries '.on standard Russian grades of flax mid 'tow 1/
(indices of trend, based on January-June, 1931 - 1D0)
: U.Ki
(llorth Ireland)
Czechoslovakia
(
: :P]
ax
Tow
: Flax
: • ' Tow
: :
Unit
: '■ :
Unit
: Unit
• •
• •
Unit
Period
: : Quota- :
•
Quota- :
:Quota-
:
: Quota-:
:
: tion :
value '
tion :
.value
: tion.
: Value
: tion :
value
,
:: Slanetz:
of "■
Rallo :
of
; :Slanetz
: of
: Rallo:
of
• : ' :
imoorts
: imports
: imports
• t
imports
1931 ■
Jan. -Mar • )
100 '•
100'
ioo
.100
: 100 -
100
100
100
Apr. -June )
July- Sept.
. 100 '
89 ; :
102
' 97
. .98 :
102
98
100
Oct. -Dec.
: 103 '
78 :
114
.119
78 J
87;
86
100
1932
'
Jan.-Mar,
■ 113 :
85 '■ ■
l.Xl
124
81 "
79 •
80
38,
Apr. -June
. 123 •
96 '
117
130
: 93
82 '
89
103
July- Sept...
: 113 •
87 ' '
126
135
• 81
83 :
89
99
Oct.-Dec. s
: 130
104 '• ;
1.38
139
• . 33
93
95
97
(
1933
Jan. -Mar.
: 147 •
103 "
111
i53
102
! 109 '
77 '
102
Apr.-June ,
• 147
109 '
92
150
. 93
109 •
62
104
July-Sept.
■. 132
120
83
137
: '83
: 103
„55
101
Oct. -Dec. ,
118
108 :
71
120
78
95
46
-86
1934 :
Jan. -Mar.
: 137
97
98
117
93
87
65
86
Apr.-June
152
109
111
131
115
108
80
103
July- Sept.
176
113
123
' 133
130
123
99
124
Oct. -Dec.
. 196
135
142
132
1/ Price quotations as reported in Linen Trade Circular; in Sterling for
Ireland a&&. in gold sterling for Czechoslovakia until the Czechoslovakia^,
crown was devaluated in early 1934*
9829
439-
Cost spro.-'d bet 1 -ee ] _dg --J ".l#tQ,nd c. r-'.sk
While linen crash fnbrics can bo turned out "by relatively high-
speed mechanical equi Meat involving a minimum of labor, linen damask
manufacture is p. complicated process, permitting relatively very small
output per dry. Damask manufacture rust also absorb the high cost of
designing and pattern-making for the Jacauard looms. Furthermore, the
finishing and "bleaching of damask are very substantial cost items.
The price differential permissible befrveen linen damask and crash
manufactures is indicated in Table 19, which tabulates production costs
for various linen manufactures in Worth Ireland as estimated by Mr.
Thomas Woodhouse, author of several technical volumes rated highly by
the British textile industries. Mr. Woodhouse's cost study points to
the probability that crash table covers can be offered profitably at
one-half the price level for good quality damask. It will be noted
that for twilled sacking, the cost of nerving labor represents 6 per
cent, finishing 2 per cent and yarns 87 per cent of total costs. Wear-
ing labor for damask represents 17 r>er cent of total cost, finishing
9 per cent, and yarns only 55 per cent.
Table 19 - Production costs for linen fabrics in llorth Ireland, as esti-
mated by Thomas TToodhouse in 1931 (excluding interest on in-
vestment)
(per square yar d)
Ind.i v i dual costs
Yarns ^jffn? 5 : Finishing
Total cost
11 Porter; 40 inch Hessian
lC-g- oz., 13 shots per inch
10 Porter, 45 inch Taroaulin
20 oz. , D. V. 12v shots
10 Porter 28 inch Twilled Sacking
20 oz. 10i shots .
12 Porter, Imitation Tapestry
36", 14 shots
34 Porter, 27 inch Tent_Duck
36 shots per inch
24 inch checked union glass cloth
40" scale, 10 shots per glass
27 inch union huckeback
bleached, 55 shots
72 inch Damask, ' 1200 Reed
40 !, scale, 3 threads per split,
27 shots, bleached
1.53
2.55
2.47
5.65
6.25
3.00
5.20
8.51
Pence
0.17
.18
.16
.72
.50
.64
.65
2.60
0.03
.06
,06
2/
2/
2/
2/
1.38
Pence : U. S.
: cents l]
1.95: 3.69
2.98: 5.63
«
2.84: 5.37
7.27
7.25
4.31
6.71
15.47
13.74
15.70
3.15
12.68
29.24
1/ Conversion at average exchange for 1931, One pence = 1.89 cents,
2/Not segregated from administrative exoense.
9829
-440-
False labeling; as to Measure and fiber content
Complainants allege that they have suffered from unfair
competition in comtiection "ith the frequent occurence of improper
labeling of imports, as to measure 'and fiber content. Complainants
submitted samples of inonrted table covers which actually fail by
as much as 10 per cent to meet the square yardage indicated in the
label,- and which are not actually of -oure linen as inferred in the label.
These two practices have now been outlawed or at least
largely restricted by the Code of Fair Competition for the linen
Importing Trade, signed November 22, 1934. Unfair trade practices
cited in the code include the following:
A. No linen importer shall mark goods, or sell or
distribute goods which are ma.rked, in such a way as to vary
more than two per cent (2^o) in the case of stable and
apparel linens, or three per cent (3{S). in the case of
fancy linens, from, the finished size in either length or
width. Any merchandise remai'ning in warehouse or in stock
on the effective date of this Supplementary Code either
must be re-marked, or the correct finished size, in accord-
ance with this iDrovision, must be directed to the attention
of the buyer and the confirmation of the order must be
marked accordingly. The merchandise shall be so invoiced.
B. The use of the terms "linen," "mire linen," and
"all iinen" and terms of similar inroort shall be limited
solely : to articles the basic fabric «sf which has a linen
: content of ninety-five per cent (9!?/>) or more in weight.
.No article the basic fabric of which contains less than
:five per cent (5~o) of linen by weight shall be labeled,
:mar,ked,. branded, stamped, characterized, or named with
the word "linen" in any form. Articles the basic fabric _
•.of -which contains between five 'per .'cent (5^>) and ninety-
:five per cent (95$) in weight of linen content shall be
•so .labeled as to indicate the exact linen Content expressed
in percentage of weight, such figures to be printed in the
.•same size type as : the Word '"linen. '[ The above limitations .
shall also apply in the case of fabrics.
Price- movenrents
Table 20 traces the trend in ptices of baled cotton and
hackled flax during the : past * nine years and during quarters of the
past four years. Cotton prices are given not only on a dollar basis,
but on a gold basis, so' as to_indicate the trend in cost of cotton
to, manufacturers in countries still remaining on a gold basis;
similarly, flax prices are given on both sterling basis a.nd gold basis,
the former to indicate the trend 'in cost to North Irish manufacturers,
and the latter to show the trend in cost to manufacturers in gold
countries.
It will be noted that cotton reached a low point in 1932
and flax in 1932 on sterling ba.sis and 1933 on gold basis; also that
9829
-
Cost spread bet-. -eon ^ ^SilikxsiDAjU'—lL.
While line.;: crash fabrics cr.n bo turned out by relatively high-
speed mechanical equipment involving r, minimum of labor, linen damask
manufacture is a compile ted process, L »err.;itting relatively very small
output per day. Damask manufacture mist also absorb the high cost of
designing and pattern-making for the jacnuard looms. Furthermore, the
finishing and bleaching of damask are very substantial cost items.
The arice differential permissible betv.-een linen damask and crash
manufactures is indicated in Table 19, which tabulates production costs
for various linen manufactures in North Ireland as estimated by Mr.
Thomas Foodhouse, author of several technical volumes rated highly by
British textile industries. Mr. Foodhouse's cost study joints to
the probability that crash table covers can be offered -a-ofitably at
one-half the price level for good quality damask. It will be noted
that for twilled sacking, the cost of weaving labor represents 6 per
cent, finishing 2 per cent and yarns 87 per cent of total costs. Fear-
ing laoor for damask represents 17 per cent of total cost, finishing
9 per cent, and yarns only 55 per cent.
Table 19 - Production costs for linen fabrics in North Ireland, as esti-
mated by Thomas Foodhouse in 1931 (excluding interest on in-
vestment)
(Per square yard)
11 Porter; 40 inch Hessian
lCg- oz., 13 shots oer inch
10 Porter, 45 inch Tarpaulin
20 oz., D. F. 12-} shots
10 Porter 28 inch Twilled S acking
20 oz. 10|. shots
12 Porter, Imitation Tape stry
36", 14 shots
34 Porter, 27 inch Tent Duck
38 shots per inch
24 inch checked union gl^ss cloth
40" scale, 10 shots per glass
27 inch union huckeback
bleached, 55 shots
72 inch Damask, 1200 Heed
40"scale, 3 threads per split,
27 shots, bleached
Individual cojts
Ynrr ,c i Weaving
Finishing: :
Total cost
: : Pence ; U. S.
:: : cents 1/
• • ♦
• • •
0,08 :: 1.95: 3.69
.06 :: 2.98: 5.63
• • •
.06 :: 2.84: 5.37
2/
2/
2/
2/
:: 7.27
:: 7.25
:: 4.31
:: 6.71
1.38 ::15.47
^Conversion at average exchange for 1931, One pence = 1.89 cents
2/Not segregated from administrative expense. '
13.74
13.70
8.15
12.68
29.24
9829
• -44^-
False labeling as to Pleasure and fiber content
Complainants allege that they have suffered from unfair
competition in connection -1th the frequent occurence of imurooer
labeling of imports, as to measure and fiber content. Conrolainants
submitted samples of imoorted table covers which actually fail by
as much as 10 per cent to meet the square yardage indicated in the
label, and Which, are not actually of nure linen as inferred in the label.
These two practices have now been outlawed or at least
largely restricted by the Code of Fair Competition for the linen
Importing Trade, signed November 22, 1934. Unfair trade practices
cited in the code include the following:
A. No linen importer shall mark goods, or sell or
distribute goods which are marked, in such a way as to vary
more than two per cent (2?o) in the case of stable and
apparel linens, or three per cent (3-'i) in the case of
fancy linens, from the finished size in either length or
width. Any merchandise remaining in warehouse or in stock
on the effective date of this Supplementary Code either
must be re-marked, or the correct finished size, in accord-
ance with this provision, must be directed to the attention
of -the buyer and the conf irma.tion of the order must be
marked accordingly. The merchandise shall be so invoiced.
B. The use of the terms "linen," "-Dure linen," and
"all linen" and terms, of similar import shall be limited
solely to articles the basic fabric of which has a linen
content of ninety-five per cent '(95;o) or more in weight.
No article the basic fabric of which contains less than
five: per cent (tfo) of linen by Weight shall be labeled,
marked, branded, stamped 1 , characterized, or named with
the: word ."linen- 11 in any form'. Articles the basic fabric *
of which contains between five per cent (5 c /o) and ninety-
five: per cent (95^,) in weight of; linen content shall be'
so labeled as to indicate the exact linen content expressed
in percentage of weight,' such figures to be printed in the
same" size type as the word "linen." The above limitations
shall also apply in the case' of fabrics.
Price movements '• .-:.■•"
: • 'Table 20 traces the : trend in prices of baled cotton and
hackled flax during the past nine years and during quarters of the
past four years. Cotton prices are given not onl'y on a dollar basis,
but on a gold basis, 'so as to 'indicate the trend in cost of cotton
to -manufacturers in countries r still remaining on a gold basis;
similarly, flax 'prices are given On both sterling basis and gold basis,
the former to indicate the trend in cost to North Irish manufacturers,
and the latter to show the trend in cost to manufacturers in gold
countries.
It will be noted that cotton reached a low point in 1932
and flax in 1932 on sterling basis and 1933 on gold basis; also that
9829
the dro'^ in flax was not as pronounced as in cotton.
The loner portion of Table 20 reveals that flax has
increased 96 per cent in sterling and 18 ner cent in gold since
earl; r 1931 and that cotton is up 26 per cent in dollars and do'-m
26 per cent in gold since early 1931.
Table 20: Indices of OTice trends of baled cotton and hackled flax
Baled cotton
Hen York l/
Dollars
: Gold
: dollars
Hackled
flax
Sterling
basis
Gold
basis
1S2S
1927
1923
1929
1930
1931
1932
1933
1934
1931
Indices of annual average nrice based on
1926 - 100
100
100
114
109
77
49
37
50
70
39
42
2/
100
82
127
107
83
68
79
87
63
57
SI
Indices of quarterly average nrice based on
January-June, 1931 * 100
3/
First
:) 100
: 100
Second
i)
Third
76
■ 100
: 98
Fourth
! f
53
■ 103
: 78
1932
First
! 66
: 113
: 81
Second
>
55
: 123
: 93
Third
69
113
: 81
Fourth
: 61
• 130
: 88
1933
First
• 63
63 : :
: 147
102
Second ;
83
73 ::
147
98
Third ■
99
70 ::-
132
88
Fourth :
99
64 :::
118
78
1534
First :
119 :
73 : : :
137
88
Second «
118 ;
70 : : :
152 :
96
Third :
126 :
74 : : :
176 «
108
Fourt h •
126 :
74 : : :
196 :
118
As recorded ~by the Bureau of Labor Statistics.
2/ Annual flax prices for 1926-1933 based on unit values of United States
irroorts.
3/ Average quarterly flax orices based on 3assian quotations for Slanetz
grade.
9829
-•-442-
Table 21 which compares the trend in trices of cotton
table damask with the trend in prices on other important items of
domestic cotton manufacture over the past nine years, indicates
that cotton damask prices have held ut> much better than the
average for all cotton goods and better than the price of other
important items, alt ho the upward trend in price of gingham and
duck has recently overtaken the price trend of damask.
The lower section of Table 21 on the other hand, indicates
that the price advance since early 1233 has been less in damask,
relatively, than in the general cotton average, and than in any of
the other individual items shown.
Table 22 comoares the trend in prices as recorded by the
Bureau of Labor Statistics during the past nine years for linen
damask table covers and for cotton damask piece goods. The final
column of this table, giving the ratio of cotton damask -orice to
linen damask orice indicates that the soread between the two has
decreased somewhat, tho not substantially. Prices as recorded by
the Bureau of Labor" Statistics are supported in other columns of the
tabulation by an indication of unit values over this neriod for
linen damask imports and cotton damask exports.
With the exception of two colums which give B. L. S. prices for
comoarison -ourooses, Table 23 is based entirely on prices reported
by complainant mills. The table indicates the trend in orices
of domestic cotton damask, both in the piece and made ur> into
table covers, in the form of indices based on ICC equalling the
average quotations offered during the period January-April, 1933.
It shows that cotton damask niece goods quotations have been in-
creased by various of these seven mills in amounts ranging from
zero to 73 per cent, and that the simole average of the different
price increases was 42 ver cent, excluding' consideration of the
processing tax, and 53 per cent with the processing tax taken into
account. The range of increases and the simple average of increases
in prices on damask table covers are shown to have been somewhat less.
The product showing the minimum price increase in the group was of
mixed cotton and rayon.
'. n 29
-443-
Table 21 - Trends in wholesale price indices of baled cotton
and significant cotton manufactures, as recorded by the
Bureau of Labor Statistics
Cotton : All
baled, :cotto
itJe^ York: goods
: Bleached :31eached: Gingham
Table :mereerized: sheeting:6.37 y a s»
damasktbroadcloth: Series 1; per lb.
Duck,
wi de
: Index
66 x 56:
58" :
123 x 6S :6k x 64
36"
10/4
27"
36"
Indices of annual average price based on 1926 average
1926
: 100
1927
; 100
132s
; llU
1929
; 109
1930
; 77
1331
; k 3
1932
; 37
1933
; 50
193^
; 70
1933
100
97
ICO
99
85
66
54
71
57
price = 100
100
100
3 k
106
1C1
11s
105
117
83
104
59 ;
87
; 55 :
69
77
83
idk
103
Average quotation, cents per yard, January-March. 1933
6.43 :
(per lb.): - : 28.6 : 8.4 : IS. 5 : 6.1 : 23.2
Indices of price trends based on January- j/iarch, 1933 = 100
Jan, -March
100
100
100
100
100
100
100
A"nril
107
102
92
101
103
98
100
:..av
13^
lib
95
113
110
102
113
June
1U9
135
99
1U5
139
103 .
137
July
l6S
lbl
115
182
158
X
156
August
149 .
188
127 .
! .. . 202 ■•
178 .
lk-3 "
175
September
151
184
128
190
131
148
169
December
154
172
128
163
l6S
148
167
1°34
January
176
Hk
128
l68
163
145
Ilk
April
1S5
HI
135
167
168
152
191
July
201
171
135
156
157
. 152
139
October
194
Hk
135
I65
I.65
I56
189
llovember
196. .
170
135
158
157
156
189
x - no quotation
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•rH
-p
tJ
P :
: P
o
P
o
;^P
Ph
CD '
M
Ph
•
' CD
O
m
^
m
u
>i ■
p
rH
CO
r*
P
yi
•H
p ■
o
n
Ph
P
o
CD ;
•H
QjO
■P
cd :
P
u -
-P
CD
M
>
O
p
Ph
• CO
o.
CO pj
+J.
-P cd
H TH
■p
O -P
OJ
p.
-p
a -
Ph
•H !>»
O
•p
Ph
«H P
CD
o riH;
CO •
11
CD O
Pi -H
P -P
O rH
CO
Pi o
« -H
P
^ -e,
<D -H
-P P
flO
p -P •
cd ♦>
xJ 00 to
M CO
o
CD fq
5)0 Ph -h '
> CD
P O -P-
P -P
•H p U
fn
rp P tH'
U O
P PH -P
CD Ph rH P
Ph : a
O Cp +j
•H
X o to
."
CD
CO rH
P rH
xJ: P
p p
Pi Ph
CO CD 'H
.(d CD
CD P. O
US) d 5 H
> s >
. CD
Ph m Cf-I
CD CO
P <H-I
r.j
^3 CD o
CCS 'H
o .p-
P O
-p >,
&
-rO
CO CO
to >J
-p
CD pt)
vo P
^H 0)
in cu
En P Ph
; • S
CD Q)
CM CD
rp CM
-P
• • Ph c h
<n cd
P >; O O
O -P
O +J O
CO
•H p CD to
to
CO nd 'Ph -H
•H P
to to
0) O
.M CO CO p
id
B P CD rO
^J 'P
a rH O
CD
O Ph -H CD
>b to
O P, rH
u cd
Cd r-O
tO Ph rO
-CD CTi
Ph
CO p CD Ph
-P «
Ph rH rH Cd
■H CO
Gl P P Pi
rO CD
■P > CO
P. bS>
Ph CD O
P Pi
O -P rH O
P
Ph -H O
P .P
P .P O
O O
•H p ^ S
CT,
CM
-hIojI
H *
60
Table 23 - Indices of trend in prices of domestic cotton
damask, based on average for January-April
1933 = 100
Cotton damask
i.i the niece
: : Cotton damask table covers
: Range of
:
: : Range of
: i ndi vi dual
: Simple
! J . Jj . •
: : individual
: Simple
:3.L.S.
: price
: average of
: whole-
: : price
: average of
: whole -
: indices l/
: pr i ce
: indices of
: sale
:price
: : indices l/
: price
: indices of
: sale
: kills
: : ...ills
: price
■ showing
: six products l/
: ?V
: : showing
: six products l/
: 2/
L 077- High
:Low - hiph
: Processing tax
;luded—
r ; Excli
:Processin£ tax
ided
: - In
ided
:- Included
1926
(Ave.)
133
• 150
19,29
(April)
75 193
143
143
133
: 88 153
123
123
145
1932
(July)
71 11s
94
94
105
: 93 103
100
100
100
1933
( Jan- Apr)
100 100
100
100
100
: 100 100
100
100
100
1933
July
100 185
129
129
119
: 100 127
112
112
109
Aug. :
100 16s
135
146
131
: 110 153
126
135
131
Sept. :
10c 16s
13S
1U9
132
: 111 158
123
137
131
Nov. :
100 162
13b
1^7
132
: 111 153
130
139
131
1934 :
Feb. :
96 162
142
152
133 :
: 113 153
130
139
131
May :
36 167 :
1»43
153 :
133 :
: 103 165 :
133
142
137
Aug. :
96 167
139
150 .
133 :
: 105 165 j
135
144 :
137
Dec. :
96 173
142 j
153 :
153 :
: 103 166 :
135 :
144 :
137
l/ Based or
1 -orice dat?
1 reported by si:
: manuff
icturers. Ar
1 index of trend
was
computed
. separately
r for the
product
, of eac
;h manufactui
■er and then a simple
average was taken of the six indices for each month.
2/ Prices on a standard item recorded by the 3areau of Labor Statistics.
9829
-446-
Fluctuaticn in currency values
Table 24 traces the trend in the exchange value of currencies of
countries concerned in this complaint. The Tipper section of this table
indicates that Belgium and the Netherlands nave refrained from devalu-
ating their currencies, "but that the pound sterling has dropped off
40 per cent in gold value since a start in early 1931; that the Czecho-
slovakian crown has dropped 16 per cent since a start early last year,
and that the dollar has dropped off 41 per cent since early. 1933, while
the Japanese yen has dropped gradually- away from gold since late 1931 to
the lowest point of all at jDresent.
The final section of the table shows the percentage increase which
has taken place in the dollar exchange value of these foreign currencies
since . January, 1933. These percentages represent the degree to which
dollar- devaluation would have impeded imports from each of these coun-
tries under level conditions of producing and shipping expense in orig-
inal currency since the base period.
9329
• '-47—
Table 34. - Course
'3 < '■;■■
United States
cis i ■ Le currencies of the
certain forei-'-n countries
: I n i ■ s
:Sc fces
Irela id
Czecho-
slov ■■ :ia
-. -, . : Nether- : T
3eltfium . , Japan
: lands :
1929 -
1950 -
1931 -
1932 -
1935
x »/ ^ _
averr.. e
aver.,:.: e
July
October
January
April
July
October
January
April
July
October
J iary
A" 'Til
July
October
December
Dollar ; . Sterling Crown : lel&a : Flor in : Yen
• • • • • ■
• • • • •
I. v. ices of t- e'.'.d iii old e.::c'nau£e value, based on
100 = currency's pa r
1951
- January
$4.85
: $0.0.536
50.139
, \
0.402
: $0,494
1932
- January
: 3.42
.0296
.139
.402
: .360
1932
- January
! 3.36
: .0296
.133
.402
[ .207
April
5.53 :
.'512 :
.153
.420 :
.221
July
4 .65
.0416
il95
.562
: .288
October
4.67
.0442
.207 :
.600
! .278
1954
- J-. nuary
5.05
.0471
.220 :
.636
! .301
October
5.00
.0411
.237
.686
.293
December
t 4.95
: .0418
.234 i
.676
: .238
Percentage inc
:resse in c
Lol
lar exch?
mpe
value
since
Jar.ua:
1333
: : 47^
4b ;
i
68fS !
68?
?829
The Domestic Lac or Situation
Tahle 25 is hased entirely on data supplied by four of trie most
important mills supporting the complaint. In the upper section of
the table, a. composite picture is given of labor use and labor cost
in these four mills, showing the trend over spaced intervals running
bach to 1932. The three lower sections of the table are devoted to
indices of trend based on 100 equalling the average for .January,
April, and July, 1933. The final section shows the range (and the
section just previous the simple average), of indices of trend cal-
culated separately for each mill. : The indices based on composite
data of the four mills s'how that since early 1933, the timber- of
workers had increased 10 per cent : in Jvly, 1934-, the Aggregate payroll
6 per cent, the average, output per man-hour: 13 per cent, and payroll
per man-hour; 37 per cent, tut that output, had dropped. Id- aer cent and
man-hours of employment 22 oer cent.
9829
Table 25. - Cociposite Employment a n Payroll Statistics - Pour Mills
• Mumber
: Average
Period
Plant
of
: payroll
: I "an-
! output
Pay-roll
: output
Wor 1 :ers
: hours
: per
man-hour
per
■ man-hour
Pounds
! Pounds
: Cents
1932
- January
• 76,888
: 644
: $9,281
: 31,358
! 2,45
: 29.6
1935
- January
57.528
545
: 6,979
: 25,744
2,23
: 27.1
April
45,062
639
8 y 224
27,063
: 1 ,67
: 30.4
July
82,588
726
: 9,954
: 36,340
: 2.27
! 27.4
October
68,453
728
10,606
! 29,277
2.34
! 36.2
1934
January
63,165 ,
790
• 10 , 523
: 30,145
! 2.10
! 34.9
April :
66,656 :
836 :
11,272 !
30,158 :
a.' . ox
37.4
July ;
52,939 :
703 !
8,918 :
23,036
2.30 :
38.7
Indices of Trend "based on 100= average of January, April
and July, 1933.
(Based on composite enployment and payroll data.)
1935
- October
111
- 114
! 126
: 99
: 115
: 128
1934
- J - nuary
102
' 124
• 125
101
: 102
! 125
Ap r i 1
105
' 131
154
101
: 107
: 152
July
36
110 _
: 106
7S
: 112
! 137
*
[Simple vv\
rerare of 3
.ndicds of
trend calculated
Se _ ;D£
irately fo:
- each mil!
■ i/5
1933
- October
110
121
146
104
: 105
: 140
1934
- J nuary
101
103 •
1 23
92
151
! 150
April
' 109
125
145
100
• 129
! 145
*
July
' ; 79
j
97 '
75
- 129
: 105
[Based on
separate e
■v lysis oi
each of '
;he four
mi 1 1 s ,
showing t.
i
le range ii
he four nu
i indices j
.lis.)
.'or
1933
- October
85-I3§
103-155 ,
117-177 :
86-121
90-124
! 108-173
1934
- January
62-157
69-175 :
91-176 :
56-179
72-240
96-179
April j
75-135 :
56-178 :
77-254 :
50-157
85-221
104-179
July :
X-143 -
X-171 ,
x~l : .-- :
X-159
X-190 :
X-155
l/ Indices -.'ere tahen separately for each of four mills. This group
index is the simple average of the four individual indices (of 3 mills
when one was closed) .
X^ indicates that one mill was closed.
9RP.9
-450-
Table 26 indicates the decree to which operation under the code
affected the importance of individual cost items in total production
costs, showing in each case the range, .as well as the simple average
of ratios in the group of products analysed. It ■•will "oe noted that
the • importance of labor costs in total production costs increased
11 per dent.
Table 26. - Ratio o-f individual cost items to tot-al production costs
(excluding interest on investment), "based on separate analyses of
production cos-ts of
nine individual products, as reported "by six mills.
Cost Item
Material
Lad or
Factory expense
Depreciation
General and ad-
ministrative expi
Selling expense
Processing tax
Cost s_b e fore 'the code
(first h alf: of 1935)
Range of rabies of each cos - t
item to ; total cos : ts, "based :
on- separate computation for'
each of nine products
Product S ho win
, . Simple
: average for
Lowest : Highest :9 products
Cost s under the cod e
(first "half of 1934)
in perce nt age
17
17
9
1
50
37
50
13
10
11
27
26
28
4
4
8
Range of ratios of- each
cost" item to total
cost's, "based on sepa-
rate computation for
each of nine products
Pro due t s ho wing : Simple
: average
Lo we s t : Hi ghe s t : f o r
:9 prod-
:ucts
15
20
6
1
1
4
2
35
35
45
9
7
11
10
25
29
24
3
4
8
7
9829
-451-
The first two columns of Table !7 show the range and the simple
average of increases in the sol • neurit of individual cost items
from the earlier period to the later. I te rerage increase in material
costs is shown to have been - tr cent, in labor cost c ' to have been
53 per cent, and in 11 cost 41 >er ce: t. The effect oi the processing
tax, of course, cannot oe shown i sent' , is it rose from zero.
The three final columns od n bli 7 gives the range and the
simple average of the ratio to t earlier production cost totals, of
the absolute amount of increase i individual cost items from the
earlier period to the later. The figures in the final columns should
be representative of the influence on total costs of increases which
occurred in individual cost items; thus, tne average mill price would
increased 11 per cent to cover the increased cost of mater-
ials, 14 per cent to cover increased labor costs, and 10 per cent to
cover the processing tax. AH of these increased costs are related
rtially, ii not entirely, to one or another phase of the Recovery
■ an.
Table 27. - Measurement of maximum possible effect of the national
Industrial Recovery Act on the cotton dauasl- industry, on the
sis 'if production cost data submitted by complo.ino.nts, cover-
ing t. first si:-: months oi 1933 md of 1934
— . — — - ■■ ^1
: Range of
percentage increo.se s
: Ratio to the earlier pro-
:as computed separately ..for
: duct ion
cost total, of the
\e..cYi of 9 products, in the
: absolute amount
of in-
{absolute
amount of each cost
: crease in indivi
dual cost
litem, from the earlier period
• : items from the earlier
! to
the lati
showing
;r
: : period to the la.
ter
Product
Simple
; average of
, : Product
•
•
showing
: Simple
: Lowe s t
:Ki Rest
: average
! percent
{percent
increases
:: Lowest
! Highest
: ratios i
increase
{increase 9 products
: : ratio
: ratio
:9 product
In pe:
-centage
Cost Items
terials
!
: 105
: 42
':
: 32
: 11
Labor
t 34
: 76
! 53
. o
: 20
: 14
Selling ex •
ise
:
: 79
! 40
:: 1 !
7
: 3
Processir
tax
! X
! x
: x
1 C
: 18
: 10
:tory expense
> o
! 35
: 19
:
: 13
: 4
All cost ite;
is
: 10 s
: si
41
: 10
: 81
: 41
9339
-452-
HANDKERCHIEFS (No. 34)
9329
HATTD-MADE AJTO miD-S.OROIIIEREI) HAHDKERCHIEFS
TABLE 0? CONTENTS
Comolainants' status under the National Industrial
Recovery Act 456
Commodity and- tariff status 456
Tariff nrovisions 456
Analysis of ad valorem eouivalents of current rates of duty 457
The domestic industry 461
The Puerto Ric.-in industry 461
The mainland industry 452
Domestic production 462
Official statistics 463
Puerto Rican production reported oy mainland concerns . . . 463
Embroidered handkerchief production in Puerto Rico 471
Production data submitted by Puerto Rican contractors . . . 477
Inroorts ' 479
Imports of linen handkerchiefs ornamented 'vith
embroidery, etc 479
Inroorts of embroidered cotton handker chiefs 482
Inroorts of -olsin linen handkerchiefs 482
Conroetitive ch-racter of nlain linen handkerchiefs'
imported from China 484
Trend of inroorts from China of all linen handkerchief s. . . 434
Retail price classes at ^hich handkerchiefs inroorted
from China are sold 485
Ratio of inroorts to domestic product ion 488
Effect of fluctuations in foreign e^chan^e rates 489
Competitive factors 492
• ■ Arraendix
Payroll data surrolied by Puerto Rican contractors
Cony of letter addressed to Mr. Victor Domenech requesting
information about the effects of bhe code on production and
payrolls
List of Tables
Table
number
Ad valorem eouivalents of the duty collected on
various types' of handkerchiefs under the
Tariff Act of 1930 '. . 453
Estimated amount of duty and ad valorem eouivalents
applicable to inroorts from China of embroidered
linen handkerchief s , 1931 - 1934 450
Estimated amount of duty and a.d valorem equivalents
applicable to inroorts from China of ulain linen
handkerchiefs, 1931 - 1934. 46 °
9829
.AR A.
List of Titles ( continued )
Table
number
3 Shipments of cotton and linen handkerchiefs from
Puerto Rico to continental United States, 1931-1934. . 463
4 Estimated quarterly distribution of payments by
22 mainland concerns to contractors in Puerto
Rico for work done on handkerchiefs, 1932-1934 .... 465
5 Estimated quarterly distribution of total
handkerchief production in Puerto Rico for 18
mainland concerns, 1952-1934 466
6 Handkerchief production in Puerto Rico classified
according to material used 467
7 Estimated quarterly distribution of linen
handkerchief production- in Puerto Rico for 17
mainland concerns, 1932-1934 . . 469
8 Distribution of total reported Puerto Rican
production of embroidered handkerchiefs
according to retail o~ice classes 472
9 Distribution of embroidered ■ handkerchief
production in Puerto Rico according to retail
■price classes- for 13 reporting concerns, 1932-1934 . . 474
10 Comparison of- indices of -oroduction of embroidered
handkerchief s • in various retail nrice classes,
1933 - 100 . .' 476
11 Estimated Puerto Rican -oroduction- of embroidered
handkerchiefs priced at 25 cents or more retail
18 concerns, 1931 - 1934 476
12 Total- Handkerchief -oroduction- of 10- Puerto Rican
■ contractors- by quarters, 1932 - 1934 477
13 Handkerchief production in Puerto Rico reported
by five- contractors, 1931 - 1933, and the first
9 months of 1934 478
14 Inroorts of consumotion of linen handkerchiefs
ornamented with embroidery, etc. , 1925—1934 480
15 Inroorts for consumption of linen handkerchiefs,
ornamented with embroidery, etc., by quarters,
1931 - 1934 ' 481
16 Inroorts for consumption of cotton handkerchiefs
ornamented with embroidery, etc. , 1931-1934 432
17 Inroorts for consumption of plain linen handkerchiefs. . 4 ^3
13 Comparison of imports for consumption from China
of linen handkerchiefs, plain and embroidered, by
corresponding quarters, 1931-1934 48 4
19 Distribution of imports from China of embroidered
linen handkerchiefs according to retail price
classes 486
20 Coverage represented hy importers' questionnaire
• returns . . . ^ 7
21 Comparison of total imports for consumption from
Chin-- of linen handkerchiefs, plain and embroidered,
with estimated Puerto Rican production of com-
petitive items, 18 concerns, 1931-1934 490
9829
- ns-
List of Tables (continued)
Table
number
Relative changes in the dollar exchange rate of the
English -oound and the yuan dollar 491
Appendix
Quarterly payroll data reported by 10 Puerto Hican
contractors engaged in handkerchief production,
1932-1954 49 3
9829
-455-
SURVEY Oi n IHFCBltAIIGH
ON
HAND-MADE A:D HAND-EI.SROIDERED handkerchiefs
KAY, 1935
Coirolain-mts' Status under the National Industrial
Recovery Act
This is a report on a coraolairit under Section 3(e) of the National
Industrial Recovery Act with respect to inroorts of hand-made and hand-
embroidered handkerchief So The complaint was filed by the Code Authority
of the Needlework Industry in Puerto Rico in behalf of 25 contractors
and manufacturers who claim to produce the bulk of the handkerchief s
made in Puerto Rico s The complainants have been operating under a Code
of Pair Competition aucroved by the President on June 28, 1934.
Commodity and Tariff Status
Tariff -provision s
Handkerchiefs made of cotton, linen, or any other material, which
are trimmed or ornamented with lace, embroidery ; &~n slioue work, etc.,
are dutiable under Paragraph 1529(b) of the Tariff Act of 1930 at the
following rates:
Valued at not more than 70 cents per dozen, 3 cents each and
40 per cent ad valorem;
Valued at more thai ^0 cents ner dozen, 4 cents each and 40
per cent ad valorem;
If ma.de with hand-made or hand-rolled hems, 4 cents each 'olus
40 cent ad valorem.
Under the Tariff Act of 1922 ornamented handkerchiefs were dutiable
under Paragraph 1430 at 90 per cent ad valorem if ornamented with lace,
and 75 per cent ad valorem if ornamented with embroidery, applique,
work, etc.
Plain linen handkerchief s a^e dutiable under Paragraph 1016 of the
Tariff Act of 1930 at 35 ioer cent ad valorem if they are unhemraed, and
at 50 per cent ad valorem if they are hemmed or hemstitched. If the
handkerchiefs are made with a hand-rolled or hand-made hem they are
subject to an additional duty of 1 cent each. Under the Tariff Act
of 1922 plain linen handkerchiefs were dutiable under Paragraph 1016
at 35 per cent ad valorem if unhemmed and 45 per cent ad valorem if
hemmed or hemstitched.
It will be noted that identical rates are apolied under Paragraph
1529(b) to handkerchiefs ornamented either with machine or hand
9829
-457-
embroidery. However, special provision is raade for hand-rolled or
hand-made hems, both in Paragraph 1529(b) and in Paragraph 1016.
Analysis of ad valorem equivalents of cu rre nt rates of duty
The ad valorem equivalents of the conraound duties levied on
ornamented handkerchiefs and on plain linen handkerchiefs made with
hand-rolled or hand-made hems are shown in Table 1. Variations in
these ad valorem eauivalents from year to yea.r and variations between
cotton and linen are the result of changes in the unit values of the
imports. The unit values of iranorted ornamented linen handkerchiefs
rose from $0,905 per dozen in 1931 to $1 3 151 in 1934 and- the ad valorem
equivalent of the conroound duties fell from 90.1 per cent in 1931 to
81.6 per cent in 1934, The higher ad valorem eruivalent of the duties
levied on ornamented cotton handkerchiefs is the result of the lower
unit values of these handkerchiefs.
It is reasonable to assume that the bulk of the imported ornamented
handkerchiefs uses embroidery and applique work rather than lace trimming.
On this basis it will be observed that tne compound duties applicable to
ornamented handkerchiefs under the Tariff Act of 1930 represent sub-
stantial advances over the 75 "oer cent ad valorem rate of the Tariff
Act of 1922. The current rates arralicable to ornamented linen handker-
chiefs represent increases over the 1922 rate- ranging from 3.8 per
cent in 1933 to 20.1 uer cent in 1931. Current rates applicable to
ornamented cotton handkerchief s represent increases over the 1922 rate
ranging from 31.9 t>er cent in 1931 to 50.9 -oer cent in 1932. Ornamented
handkerchiefs must have a uni* value of &1«36 a dozen before the current
tariff rates will approximate an ad valorem equivalent of 75 ner cent.
The ad valorem eauivalents of the current rates apnlicable to
plain linen handkerchiefs made with hand-rolled or hand-made hems
exceed the 45 per cent ad valorem rate applied under the Tariff Act of
1922 by an amount ranging from 26.4 per cent in the last half of
1930 to 35.6 -oer cent in 1932.
9829
-453-
Table 1
AD VALOREM EQUIVALENTS OF THE -DUTY
COLLECTED ON VARIOUS TYPES OF HANDKERCHIEFS
UNDER THE TARIFF ACT OF 1930
I. Handkerchiefs Made of Vegetable Fibre Other
Than Cotton, Hemmed; Embroidered Etc.
Period
Value of Imports
Amount of Duty
Ad Valorem
Equivalent
Per Cent
1930 (June 18
- Dec. 31)
1931
1932
1933
$' 1,175,295
2,266,249
1,345,604
1,104,253
$1,001,848
2,041,474
1,192,683
911,068
85.2
90.1
88.6
81.6
II. Cotton Handkerchiefs, Hemmed, Embroidered, Etc.
Period
Value of Irrroorts
Amount of Duty
Ad Valorem
Equivalent
Per Cent
1930 (June 18
- Dec. 31)
1931
1932
1933
71,218
158,098
'57,787
45 , 152
71,913
156,280
65,451
49 , 175
101.0
96.9
113.2
108.9
III. Handkerchiefs of Vegetable Fibre Other Than Cotton,
Plain, and Made With Handmade or Hand Rolled Hem.
Period
Value of Imports
Amount of Duty
Ad Valorem
Equivalent
Per Cent
1930 (June 13
- Dec. 31
$ 512,585
$
291,880
56.9
1931
642,452
373,675
58. C
1932
314,565
190,664
61,0
1933
294,786
175,671
:8.9
9829
-459-
Table 2 shows the ad valorem equivalents of the estimated amount
of duty levied on imports from Chins of ulain and embroidered linen
handkerchiefs. Because the handkerchiefs imported from China have lower
average unit values than the embroidered and plain linen handkerchiefs
imported from European countries, the ad valorem equivalents given in
Table 2 are somewhat higher than those indicated in Table 1. The
inverse relationship which exists between average unit value and equiv-
alent ad valorem rates of the current conroound duties is illustrated
further by the 40.5 -oer cent increase in the unit values of embroidered
linen handkerchiefs between 1931 and 1954 and the 17.7 per cent decline
in the equivalent ad valorem rates during' the same period.
9829
Table 2
ESTIMATED AMOUNT OF DUTY AND AD VALOREM
EQUIVALENTS APPLICABLE TO IMPORTS FROM CHINA
OP EMBROIDERED LINEN HANDKERCHIEFS. 1931 - 1934
Estimated
Ad Valorem
Quantity
Value
Amount of
Equivalent
Tear
(Dozens)
Value
Per Dozen
Duty 1/ .
Per Cent
1931 1,624,240 $1,219,897 .751
1932 1,029,218 853,354 .329
1933 750,760 706,166 .928
1934 1,216,407 1,232,932 1.055
1,267,594
103.9
835,366
97.9
£47,631
91.7
1,097,048
85.5
1/ Computed on the basis of 4 cents per handkerchief plus 40
■oer cent ad valorem.
ESTIMATED AMOUNT OF D;'TY A;D AD VALOREM
EQUIVALENTS APPLICABLE TO IMPORTS FROM CHINA
OF PLAIN LINEN HANDKERCHIEFS. 1931 - 1934
Estimated Ad Valorem
Quantity Value Amount of Equivalent
Year (Dozens) Value Per Dozen Duty 1/ Per Cent
1931 15,500 ft 11,191 .829 7,216 64.5
1932 35,322 22,378 .639 15,738 68.8
1933 57,369 38,311 .662 20,100 68.1
1934 32,592 71,734 .869 45,778 63.8
1/ Comnuted on the basis of 1 cent ner handkerchief nlus 50
per cent ad valorem.
6/18/35
H:jp
9829
-461-
The Domestic Industry
The domestic hand-made handkerchief industry is located principally
in Puerto Rico. On the mainland a fair volume of production is reported
in California and Texas, and small quantities of hand-made handkerchiefs
are also manufactured commercially in si:: additional States.
Both in Puerto Rico and on the mainland the industry relies on
home workers who are paid on a niece-rate basis. The number of estab-
lishments varies from year to year, and the number of home workers is
largely a matter of guesswork.
The Puerto Rican Industry
The Code Authority of the Needlework Industry in Puerto Rico reports
a total of 39 contractors and manufacturers engaged in the production
of handkerchiefs in Puerto Rico in 1934. Many of these operators are
not engaged exclusively in the handkerchief industry, but also contract
to do other types of needlework for wholesalers and manufacturers
located principally in New York City. Practically none of the Puerto
Rican operators is an independent manufacturer producing goods to be
sold in the open market on the mainland. Operators on the Island are
either the representatives of mainland manufacturing concerns or
contractors who receive the fabric from the mainland manufacturer and
distribute the material to various sub-agents and home workers for
further processing.
The Puerto Rican industry is engaged almost entirely in hand-work
so far as handkerchiefs are concerned, but the bulk of the needlework
activity consists of hand rolling operations. Quite frequently a
handkerchief will be embellished with machine embroidery in New Jersey
and hemmed by hand in Puerto Rico. Likewise machine hemstitching may
be done on the mainland and the handkerchiefs may be sent to Puerto Rico
for embroidery or applique work. All available evidence indicates that
a. considerable proportion of Puerto Rico's handkerchief output is only
partially processed on the Island.
The bulk of the Puerto Rican out-out is known to consist of low-
"orices handkerchiefs and, while there is very little coimoetition in
hand rolling operations, much of the hand embroidery is competitive with
the machine embroidery of the mainland.
The - 39 operators in Puerto Rico in 1934 are classified by the
code authority as follows:
Large-scale operators 25
Medium-scale operators 8
Small-scale operators _6
Total 39
The accuracy or significance of this classification is open to Question.
The invested capital of a contractor is negligible, and comparisons on
the basis of plant capacity, etc., are impossible. Twenty-five of the
39 operators are complainants, and 14 are not parties to the complaint.
9829
-462-
The relative importance of these two groups of operators cannot be
ascertained.
The principal complainants are contractors, whereas several of
the non-complainants are mainland, concerns which have their direct
representatives in Puerto Rico. While the list of cdmplainants is not
exclusively a list of contractors, a suggestion of the oasis of the
complaint is found in the impression of persons returning from Puerto
Rico, to the effect that a somewhat higher percentage of the total
handkerchief production is now handled by direct manufacturers' repre-
sentatives and the contractors feel that they are not getting their
share of the business.
The number of persons employed by the handkerchief industry in
Puerto Rico cannot be ascertained. As explained above, the needleworkers
on the Island do not confine their activities to one type of article, but
take whatever work the contractor or his sub-agent has available for
distribution. The number of home workers in Puerto Rico is variously
estimated from 50,000 to 100,000,,. The number of home workers for the
entire needlework industry is unknown, so it is obvious that no estimate
can be made of the number of persons engaged in hand rolling or embellish-
ment of handkerchiefs. A system of subagents creats a situation in
which individual contractors do not know how many people are working on
their products.
The code sought to rectify this situation in part, but no evidence
has been submitted to indicate the number of persons employed in the
industry.
T he mainland industry
The hand-made handkerchief industry- on the mainland operates under
the Code of Pair Competition for the Handkerchief Industry, approved by
the President on October 9, 1933. This code permits home manufacture of
"handkerchiefs made entirely by hand" and exempts such production from
the minimum wage and hours of labor provisions of the code, provided
that such handkerchiefs have a wholesale price of not less than $3.50
per dozen.
The mainland hand-made handkerchief industry consisted in the fall
of 1934 of 24 operators, 17 of whom were located in tir near the cities
of Los Angeles or San Prancisco. The seven remaining producers were in
seven other States. The maximum number of persons employed at any time
in 1934 totaled 3,873 home workers and 188 inside workers. The mainland
industry is not a party to this complaint.
Domestic Production
The sales of hand-made handkerchiefs manufactured on the mainland
are reported at $440,300 in 1934. (*) Aside from this estimate there is
(*) See Section 4, Introduction to Report on The Hand-made Handkerchief
Industry in Continental United States , Women's Bureau,, U. S.
Department of Labor, January, 1935.
9829
-463-
no available information regarding the volume of production either in
terms of quantity or in terns of value for previous years. As a re-
sult, this section on donestic production will "be confined tp Puerto
Rican production.
Official statistics
Official statistics covering shipments of handkerchiefs from
Puerto:. Pico to the mainland are customarily taken as the measure of
the volume of production in Puerto Rico. Table 3 shows these data
on an annual basis for the years 1931-1934.
Table 3. - Shipments of cotton and linen handkerchiefs from
Puerto Rico to continental United States, 1931-1934 l/
y ear Cotton Handkerchiefs Linen handkerchief s
Quantity Value Quantity Value
Dozens ■ Dozens
1931 1,298,209 $984,794 65,723 $76,726
1932 1,865,190 1,267,493 315,402 365,888
1933 1,605,119 919,589 746,587 802,924
1934 1,687,282 979,402 1,040,601 1,029,505
l/ Source: December issue of Monthly Summary of Foreign Commerce of
the United States , 1931-1934.
The accuracy of these official statistics has been questioned
at various times by members of the industry. One important Hew York
concern reported an output of linen handkerchiefs in Puerto Rico in
the year 1933 greater than the volume reported by the official
statistics. The relatively small proportion of linen handkerchiefs
reported in earlier years has been explained on the grounds that
many mixed shipments were listed as being entirely of cotton. The
system of reporting shipments appears to be so lax that there is no
reason to believe that official statistics even indicate the trend
of Puerto Rican production.
Puerto Rican -production reported by mainland concerns
The general lack of adequate records on the part of the Puerto
Rican contractors and the manner in which the Puerto Rican industry is
integrated with the handkerchief industry of the mainland made it
necessary to request information from mainland concerns which had
handkerchiefs processed, in whole or in part in Puerto Rico. Sixty-
five mainland concerns which were reported to be operating in Puerto
Rico received questionnaires covering their handkerchief production
on the Island. Becuase these concerns were not parties to the com-
plaint, the questionnaires were answered on a voluntary basis, and
the 29 replies which were received varied materially in the degree
to which they gave the desired information.
OOOO
-464-
The coverage in these 29 questionnaire returns is substantially
greater than a comparison with the total number of concerns engaged
in the Puerto Rican industry would indicate. The completed question-
naires constitute a good sample in the statistical sense in that
firms making both high-grade and low-grade handkerchiefs are re-
presented. Likewise, several concerns known to be among the most
important operators on the Island sent in fairly detailed informa-
tion.
Despite variations in wage rates over a period of years, payments
by mainland concerns to the contractors represent a fairly good
index of the degree of activity in the handkerchief industry in
Puerto Rico. Table 4 shows this information for 22 mainland concerns
by quarters for 1902, 1933, and the first nine months of 1934. It
will be noted that the volume of payments was lowest in the first
quarter of 1933, essentially the bank holiday period, and highest
in the fourth quarter of 1933, a period in which the mainland in-
dustry was subject to a code, but no restrictions were in effect
in Puerto Pico. This interpretation seems reasonable despite the
fact that fourth quarter production is usually high because of
seasonal factors. The greatly increased payments to the contractors
continued throughout the first three quarters of 1934 and most of
this period represents pre-code operation in Puerto Pico. A com-
parison of the trend of payments in the first nine months of 1932,
1933, and 1934 indicates an increase over the levels of 1932 of 29
per cent and 83 per cent in 1933 and 1934, respectively. On an
annual basis payments in 1933 represent an increg.se of 55 per cent
over 1932 levels, and payments in the first nine months of 1934
were in excess of 87 per cent of those reported for the previous
12-month period. All of this ifiaterial would indicate something
approximating a pre-code boom in Puerto Rico.
9829
-465-
Peri*d
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Total
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Total
Period
TABLE 4
ESTIMATED QUAETSELY DISTRIBUTION OF
PAYM3STS 3Y 22 iaAIHLAltD COHCERIJS
TO CONTRACTORS IS PUERTO RICO FOR
WORK DOIIS OH HASDK3HCHI3FS, 1932 - 1034
1932
Payments to Contractors
1933
$ 168,641
190,390
163,589
182,688
$ 160,717
221,509
291,630
421,813
ft
v
1934
318,774
280,483
358,332
705,308 1,095,669
Indices of Trend. 1932 - 100
100
100
.100
.100
100
95.3
116.3
178.3
230.9
155.3
957,589
189.0
147.3
219.0
Trend of Payments in First 9 Months
of 1932, 1933 and 1934
Index.
1932 - 100
1932 (Jan. - Sept.)
1933 (Jan. - Sept.)
1934 (Jan. - Sept.)
100.0
128.9
183.2
As indicated previously the completed questionnaire returns receiv-
ed from the mainland concerns varied materially in the scope of the in-
formation submitted. Total handkerchief production in Puerto Rico as
reported by 18 concerns is shown by quarterly periods for 1932, la^,
and the first three quarters of 1934 in Table 5. It will be noted that
the rate of increase indicated in this table is somewhat slower tnan
the rate of increase in the volume of payments to contractors wmch
is shown in Table 4. Total production for the first nine months of
1934 is only 71.9 per cent of reported production in the preceding Ld
months, whereas a comparison on the same basis of payments to contrac-
tors indicates a ratio of 87 per cent. A comparison of the first
three quarters of 1934 with the corresponding period in 1932 and
1933 indicates a substantial increase in production, but the second
and third quarters of 1934 represent a decline from the preceding
quarters in 1933.
9829
-466-
TA3L3 5
3STIUATZD QUARTERLY DISTRIBUTION OF TOTAL HA1IDK3RCHI3;
PBODUCTIOIT IN PUERTO RICO FOB 18 MAINLAND' CONCERNS
1932 - 1934
Period
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
To tal
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Total
Unit Quantity - Dozens
1932
193C
428,062
697,074
444, 635
517,626
2,087,397
498,275
752,217
743, 719
935,837
2,928,048
QUARTERLY INDICES OF TREND 1932 = 100
100
100
100
100-
100-
116.4
107.9
167.3
180.4
140.3
1934
632,571
688,549
735,253"
2,106,373
159.5
98.8
165.4
INDEX OF PRODUCTION III
FIRST 9 LiOFTHS OF 1932,
1932 = 100 •
1933,
AND 1934
Period
Index
1932 (Jan-Sept.)
1933 (Jan-Sept.)
1934 (Jan-Sept.)
■100
•127.0
134.2
9829
-457-
Although Table 5 is "based on the reports of 18 concerns, several
of which are known to "be among the largest producers of high-grade
handkerchiefs; the -course of total production indicated in the table
is greatly influenced by the reported production of one company, the
entire production of which is known to consist of low-grade handker -
chiefs selling at less than 25 cents each in retail markets. This
company reported a drastic decline in production in 1934 with the ;• w i
result that in that year it accounted for only IS per cent of the total
output reported in Table 5, as compared with the ratios of 34.4 per cent
and 31 per cent in 1932 and 1933. Yhe course of reported production of
this one oompany is not typical of most of the: other concerns.
Table 6 shows the classification of Puerto Rican handkerchief pro-
duction according to the material used. A small production of silk
handkerchiefs is know to exist, but it is negligible when compared with
total production. Linen and cotton are the principal materials used,
and a substantial proportion of the handkerchiefs for which the material
was not specified is believed to be eotton. Linen handkerchiefs repre-
sent slightly over 60 per cent of the total output reported by 21 con-
cerns in the first nine months of 1934. A comparison of the trend of
linen and cotton handkerchief production on the part of 18 concerns
indicates that linen has accounted for a steadily increasing percentage
of the total output.
Table 6
HANDKERCHIEF PRODUCTION IN PUERTO RICO CLASSIFIED
ACCORDING TO MATERIAL USED
1932 1932
i Jan, -Sept
. 1934
Per >•'
Per
Per
Cent
Cent
Cent
of
of
of
Material
Dozens
Total Dozens
Total Dozens
Total
Cotton
59,249
2.8 164,301
5.5 607,123
24.4
Linen
1,300,868
62.3 l ,.896, 734
63.9 1,504,513
60.4
Not : 1/
Specified
727,280
34.9 907,647
30.6 379,235
15.2
2/
3/-
1/
Total
2,087,397
100.0 2,968.682 100. n 2,490,871
100.0
1/ Production believed t
o consist mostly of cotton.
2/ Based on
18 questionnaire returns, 4 of
which reported no
production in Puerto
Rico in 1932.
3/ Based on
19 questionnaire returns, all of which reported
production in Puerto
Rico in 1933.
4/ Represents production
. of 21 concerns.
9R29
-4S8-
TOTAL HANDKERCHIEF PRODUCTION IN PUERTO HI CO OF 18. MAINLAND
CONCERNS, CLASSIFIED ACCORDING TO .THE 1A.TERIAL USED
1932 - 1934 (1st. 9 MONTHS
1932
1933
Jan.
-Sept. 1934
Per
Per
per
Cent
Cent
Cent
of
of
of
Material
Dozens
Total
Dozens
Tota]
Dozens
Total
Cotton
59 , 249
2.8
140,390
4.8
289,347
13.7 ',
Linen
1,300,868
62.3
1,860,011
64.2
1 , 437 , 791
68.3
Not
1/
Specif iei
I
727,280
2/.
34.9
.907,647
31.0
379 , 235
18.0
Total
2,087,397
100.0
2,928,048
100.0
2,106,373
100.0
1/ Production "believed to consist nostly of cotton
2/ Represents production of 14 concerns. Four concerns- .reported no
production in Puerto Rico in 1932.
Ta"ble 6
TREND OF PRODUCTION OF COTTON AND LINEN HANDKERCHIEF IN
PUERTO RICO. 18 MAINLAND CONCERNS. 1932 - 100
Year
u.
Cotton 1
1932
100
1933
1934
,
133.2
■ 2/
85.0
(Jan.
-Sept. )
Linen Total
100 100
144.5 140.3
2/ 2/
110.5 100.9 '
1_/ Included production of handkerchiefs, of unspecified material
which is "believed to consist mostly of cotton.
2/ Index for 1934 is not adjusted, "but compares production in first
9 months of 1934 with total annual /production in 1932 and 1933.
9829
-469-
Table 7 shows the quarterly distribution of linen handkerchief
production in Puerto Rico as reported by 17 concerns for the period
1932, 1933, and the first three quarters of 1934. A comparison nf
corresponding quarters indicates a steady increaee in production since
1932, although the second and third quarters of 1934 represent rather n
negligible increases over the corresponding periods of 1933. A com-
parison on the basis of the first nine months of the year indicates an
increase of 27 per cent in 1933 and 46.6 per cent in 1934 over 1932
levels. It will be noted that the reported production of linen hand-
kerchiefs is somewhat higher relative to 1932 than the corresponding
ratios covering the total handkerchief production of 18 concerns.
Table 7
ESTIMATED QUARTERLY DISTRIBUTION OF LINEN HANDKERCHIEF
PRODUCTION IN FUERTO RICO FOP. 17 MAINLAND CONCERNS
1932 - 1934
Unit of Quantity - Dozens
Ferird 1932 1933 1934
1st Quarter 271,009 334,740 513,503
2nd Quarter 430,758 447,136 451,279
3rd Quarter 278,993 464,538 473,009
4th Quarter 328,678 633,597 -
Total 1,309,438 1,880,011 1,437,791
INDICES OF TREND OF PRODUCTION BY QUARTERS 1932 Z 100
1st Quarter 100 123.5 189.5
2nd Quarter 100 103.8 lf4.S
3rd Quarter 100 166.5 165.5
4th Quarter 100 192.8
Total 100 143.6
INDEX OF PRODUCTION IN FIRST 9 MONTHS OF 1932, 1933, and 1934
1932 = 100
9829
-470-
Period Index'
1932 ( Jan. -Sept.) 100
1933 ( Jan. -Sept. ) 127.1
1934 ( Jan. -Sept. ) 146.6
9829
"Smbroidered handkerchief -production in Puerto Rico
It is impossible to determine accurately what proportion of the
total handkerchief production in Puerto Rico is embroidered. As
stated before hand rolling is known to be one of the most important
operations on the Island and a substantial minber of olain and machine-
embroidered handkerchiefs are hemned in Puerto Rico. Since the com-
plaint against imports of hand-made and hand- embroidered handkerchiefs
did not affect the interests of the pro&ucersof the cheaper grades of
handkerchiefs, it is entire^ possible that the firms which gave de-
tailed information about their Puerto Rican -oroduction consisted pri-
marily of those concerns which had an active interest in the complaint.
If this is the case, the proportion of embroidered handkerchiefs shown
in the questionnaire returns is bound to be somewhat higher than a more
comprehensive survey would indicate.
On the basis of the production data submitted by 21 mainland
concerns, 63.7 per cent of the Puerto Rican handkerchief production
was ornamented with embroidery, applique work, etc. , in the first nine
months of 1934. This is the broadest coverage of the Puerto Rican
industry that it is possible to develop from the questionnaire returns.
Of the 21 companies reporting production for 1934, two reported
no production of embroidered handkerchiefs, and numberous others re-
ported the production of vj-.n^ing quantities of olain linen and cotton
handkerchiefs. One concern reported its-production of embroidered
handkerchiefs, but failed to give a breakdown according to retain
price brackets.
Table 8 shows the distribution of the reported embroidered hand-
kerchief production (cotton and linen) according to retail ;orice
classes for 1932, 1933, and the first nine months of 1934. In the lat-
ter period, 18 concerns reported that 74.2 per cent of their embroid-
ered handkerchief production consisted of low-grade handkerchiefs oriced
to sell in retail markets at less than 25 cents each. In the main,
these handkerchief s are sold, in competition with the machine-embroid-
ered products of the mainland. Handkerchiefs selling at 25 cents or
more, retail, accounted for 25.8 per cent of total embroidered hand-
kerchief production, and most of these were concentrated, in the lower
nrice brackets.
If 63.7 per cent of the total production reported, in the first
nine months of 1934 consisted of embroidered handkerchiefs, and if
25.8 per cent of these handkerchief s may be regarded, as a high-grade
nroduct designed, to sell at 25 cents or more in retail markets, it is
evident that the ra.tio of high-grade handlcerchief s to total Puerto
Rican production is 16.4 per cent. It should, be emphasized that this
represents a high estimate and. that a more- complete survey would pro-
bably indicate a lower ratio.
9829
-472-
Table 8
DISTRIBUTION OP TOTAL REPORTED PUERTO RICA1T PRODUCTION
OP EMBROIDERED HANDKERCHIEFS ACCORDING TO RETAIL
PRICE CLASSL'S
Retail Price Jan. -Sept. 4/
Classes 1931 1/ 1932 2/ 1933 3/ 1934 *
Dozens Dozens Dozens Dozens
Under 25^ 970,506 1,055,132 1,658,067 1,165,789
25^, 3 for $1.00,350 99,988 286,358 396,106 354,830
50^ and u P 19.481 16.474 51 . 710 ,50.089
Total 1,089,975 1,357,964 2,105,883 1,570,688
PERCENTAGE DISTRIBUTION
Under 25rf
250, 3 for $1.00, 350
500 and up
Total 100.0 1 00.0 : 100.0 100.0
1/ Based on 10 questionnaire returns giving production of em-
broidered handkerchiefs 1931-1934, however 6 concerns
indicate no production in 1931
2/ Based on 13 questionnaire returns. Five concerns indi-
cated no production in 1932.
3_/ Based on 15 questionnaire returns. Three concerns indi-
cated no production in 1933.
4/ Based on 18 questionnaire returns, all of which reported
production for the first 9 months of 1934.
89.0
77.7
78.7
74.2
-9.2
^21 r .l
18.8
, 22.6
1.8
1.2
2.5
3.2
9829
1*473-
In order to establish the trend of product ion in the variour, classes
of embroidered handkerchiefs, it has been neces^ar" to select such Question-
naire returns as give the breakdown according to retain price classes for
a period of several years. Table 9 shows such a distribution for 13 con-
cerns for the period 1932 - September, 1934, end for 15 concerns in the
period 1933 - September, 1934.
There is no question as to the adenuac"'' of the sample of 13 concerns.
Of the reported embroidered handkerchief production in the first nine
months of 1934, 13 concerns accounted for 81 per cent of the total. For
these concerns, it will be noted that the percentage of high-grade hand-
kerchiefs, i.e., hand].: er chiefs valued at 25 cents or more in retail mar-
kets, stood at 22.3 pel cent in 1932, 20 per cent in 1933, and 25.9 per
cent in 1934. With the addition of two more concerns which reported the
retail price breakdown for their embroidered handkerchief production in
1933 and 1934, these percentages were increased to 21.3 per cent for
1933 and 27.8 per cent for 1934.
9829
-.'7-''—
Table 9
DISTRIBUTION Ol" 1 EL3ROIDERED HANDKERCHIEF PRODUCTION
IN PUERTO RICO ACCORDING TO RETAIL PRICE CLASSES
FOR 13 REPORT I" TG CONCERNS
1932 - 1934
Retail Price
Classes
1932
Dozens
1933
., Dozens
Jan. -Sept.
1934
Dozens
Under 25$ 1,055,132
25c*, 3 for $1.00, 35c* 286,358
50^ and up
16,474
Total
1,357, J64
Under 25^
77.7
25^, 3 for $1.00, 35^
21.1
50 c* and up
1.2
Total
100.0
1,631,322
. 9.53,971
369,677
298,233
37,282
35,302
2,038,281
1,287,506
80.0
74.1
18.2
23.2
1.8
2.7
100.0
LOO.O
DISTRIBUTION OF EMBROIDERED HANDKERCHIEF PRODUCTION
IN PUERTO RICO ACCORDING!- TO RETAIL PRICE CLASSES
FOR 15 REPORTING CONCERNS
1933 and JAN.- SEPT. 1934
Retail Price
Classes
1931
Jan. -Sept.
1934
Under 25c*
25^, 3 for $1.00, 35c*
50 f* and up
Total
Dozens'
1,658,067
396,106
51,710
2, 105,883
Dozens
981,684
329,323
48,342
1 , 359 , 349
(Continued on following page)
9829
(Cont'd)
Tsble 9
PERCENTAGE DISTRIBUTION
Retail Price
Classes
Jan.- Sept
1933
1934
78.7
72.2
18.8
24.2
2.5
3.6
100.0
100.0
Under 25^-
25f£, 3 for $1.00, 55rf
50^ and up
Total
Table 10 compares the indices of trend of enbroidered handkerchief
production in various retail v>rice classes, as indicated in 13 question-
naire returns giving a continuous series since 1932 and in 15 question-
naire returns giving data for 1933 and the first nine months of 1934.
No attempt has been nade to adjust the index for the nine months' period
in 1934 because there is no satisfactory basis on which to construct an
index of seasonal variation. It Trill be noted that the production of
low-priced handker chiefs in the first nine months of 1934 is naterially
under 1932 levels whereas the production of high-grade handkerchiefs
has shwon a very satisfactory increase over 1932 levels amounting to
approximately 4 oer cent in the case of medium-priced handkerchiefs and
114 per cent in the case of handkerchief s priced at 50 cents or more
in retail markets. According to the information s\ibmitted by the
mainland concerns the lag, if any, in the Puerto Rican production of
embroidered handkerchiefs in 1934, took olace in the lov;-priced product
which is competitive with the machine-embroidered product of the
mainland.
9829
-476-
Table 10
COMPARISON OP INDICES 01' PRODUCTION 0? E1I3R0IDEHED
HANDKERCHIEFS IN VARIOUS RETAIL PRICE CLASSES
193". - 100
13 Concerns
15 Con
cerns
25«f
25 v <
3 for
50 $
3 for
50 rf
Under
$1.00
and
'Jnder
$1 . 00
and
Year
25d
35 <p
up
Total
25rf
35rf
UT3
Total
L932
64.7
77.5
44.2
66.6
-
1935
100
100
100
100
100
100
100
100
1934
58.5
80.7
94.7
63.2
59.2
83.1
93.5
64.6
( 9 in on
ths not
adjusted
Table 11
Year
1931
1932
1933
9 month
3STLUATED 1/ PUERTO RICAN PRODUCTION 0_ E 1R0IDEEED
HANDKEECHIEES PRICED AT 25 CENTS OR HOT'S RETAIL
18 CONCERNS, 1931 - 1934
Production 1 / _
Dozens
462,844
367,774
494,288
I nclex
1951-100
100
79.5
106.8
Index
1933- 100
93.6
74.4
81 .-9
1/ The basis of the estimate is the index of production of embroid-
ered handkerchiefs priced bo sell at retail at 25 cents or
higher, as indicated in the reports of 13 concerns. Total em-
broidered handkerchief production priced at 25 cents or more for
18 cpmcerns was 404,919 dozen in the period January-September,
1934. This figure has been adjusted to show estimated production
since 1931.
Table 11, which immediately precedes this section, represents
an effort to construct the probably oroouction for 18 concerns of
highgrade embroidered handkerchief s, i.e., those priced at 25 cents
or more in retail markets, since 1931. The basis of this estimate
is the e::perience of 13 representative concerns and the adjustment
f or 1931 has been made on the basis of the questionnaire returns
which give 1931 data. Fhile this estimate is highly tentative, it
represents the nea.rest approach -nos^ible, on the basis of the data
9829
-477-
submitted, to a statement of the volume and trend of high-grade hand-
kerchief production in Puerto Rico. It should be noted that no attempt
has been made to adjust the indices of production as as to make the
nine months' data submitted for 1934 strictly com-oarable with previous
years. However, the evidence indicates that production of embroidered
handkerchiefs priced at 25 cents or more, retail, has increased steadi-
ly from 1932 until the end of the third quarter of 1934.
Production data submitted by Puerto Rican contr a ctors
Of the 25 complainants, 10 submitted production data by quarters
covering the period 1932 - September, 1934. These contractors were
unable to classify their production either with reference to the mater-
ial used or the retail -.'rice classes into which their production would
fall. The available data are shwon in Table 12. It will be noted
that pefik --production is reported in the fourth quarter of 1933 and that
the low point of operations appears to be the first quarter of 1932,
although re-oorted -production for the third quarter of 1934 is almost on
a parity with the 1932 low. This presumably would indicate the dampen-
ing influence of the code which became effective July 19, 1934. A
comparison of these data with corresponding material submitted by the
mainland concerns, shown in Table 5, indicates a measure of similarity
in the reported trend of production in 1932 and 1933, but the Puerto
Rican contractors report a drastic decline in 1934 which is not sub-
stantiated by the reports submitted by the mainland concerns.
Table 12
TOTAL HANDKERCHIEF PRODUCTION 05' 10 PUERTO RICAN
CONTRACTORS BY QUARTERS 1932 - 1934 1/
1st 2nd 3rd 4th
Year Quarter Quarter Quarter Quarter Total
Dozens Dozens Dozens Dozens Dozens
1932 364,566 439,035 386,847 514,778 1,705,376
1933 380,852 530,641 622,672 936,633 2,470,798
1934 381,353 541,620 365,447 - 1,238,420
Indices of Trend, 1932-100
1932 100 100 100 100 100
1933 104.4 120.9 161. 182. 144.9
1934 104.6 123.4 94.5
1/ Production data for last quarter 1934, not available.
INDEX OF PRODUCTION IN FIRST 9 LiONTHS
of 1932, 1933, and 1934. 1932~100
Period production (Dozen) Index
Jan.-Seut. 1932 1,190,598 • 100
11 I" 1933 1,534,165 128.9
" " 1934 1,288,420 108.2
9829
-478-
Table 13 shows the production of five Puerto Rican contractors
from 1931 through the first three quarters of 1934. In 1931 and 1932
the course of production remained practically unchanged, at least on an
annual basis. In 1934, theae contrrctorr reported a 50 per cent in-
crease in production, ?nd in the first nine months of 1934, a volume
of oroduction equal to approximately 85 per cent of the toal production
in 1931 and 1932. Relative to the year 1933, oroduction in the first
nine months of 1934 amounted to 56.9 per cent of the total - a slightly
better showing than that indicated in Table 12.
A comparison of reported oroduction with the trend of shipment
as reported officials statistics indicates wide differences. Further-
more, it should be noted that the reported, 'oroduction of ten contractors
exceeds the official statistics in point of ouantity in 1932 and 1933.
Table 13
HANDKERCHIEF PRODUCTION IN PUERTO RICO
REPORTED BY FIVE CONTRACTORS. 1931-1933,
AND THE FIRST 9 MONTHS V 1934
Year
Production
(Dozens)
Index of Production
1932-100
1931
1,029,433
1932
1,029,113
1933
1,549,903
1934
881,687
(9 months)
iro.«3
ior\
150.61
85.67
TOTAL HANDKERCHIEF SHIPMENTS FROM PUERTO RICO
AS REPORTED IN OFFICIAL STATISTICS. 1931-1933
Al-ID THF FTP ^ 9 MONTHS OF 1934
Year
Shipment:
Index of Shipments
1931
1932
1933
1934
(9 months)
1,3«3,932
2,190,592
2,351,706
2,130,140
62.6
100.0
107.8
97.7
1/ Based on 9 months data and not adjusted.
9829
-479-
Iraports
Imports of linen handkerchiefs orr.amentod
with embroidery, etc.
Table 14 shows imports for consumption of ornamented linen handker-
chiefs over the ten-year period 1925-1934. Prior to 1950 the United
Kingdom was the chief source of supply, and the country of secondary
importance was Switzerland. Since 1930 China has been the principal
supplier of imported ornamented linen handkerchief s. The growth of the
imports from China is well illustrated by the ratio of imports from
China to total imports. In 1925 this ratio stood at 2.03 per cent;
in 1929, at 17.42 per cent; in 1931, at 64.87 per cent; and in 1934,
at 88.72 per cent.
Both total imports and imports from China reached a peak in 1331.
Imports from countries other tlian China reached a peak in 1929. Rel-
ative to 1929, the index of total imports in 1334 stood at 82.10, the
index of imports from China stood at 418.14, and the index of imports
from other countries, 11.21. The low print in the importation of emb-
roidered linen handkerchiefs, subsequent to the peak year of 1931, was
reached in 1933. Imports from China registered a decline of 53.2 per
cent, largely as a result of a style change which created a demand for
larger-sized women's handkerchiefs. The time required to place orders
in Chinaand receive the finished product for distribution to domestic
retail outlets is variously estimated from 6 to 10 months. As a res-
ult the importers of Chinese handkerchiefs found themselves stocked
with poorly styled products and wore unable to place additional orders
in China for quick delivery.
The unit value of the imports from China have always been mat-
erially below the unit value of imports from European countries. In
1931 the average value of the embroidered linen handkerchiefs imported
from China was 36.8 per cent below the value of the imports from other
countries. In 1932 this difference amounted tn 23.3 per cent; in 1933
41.9 per cent and in 1934, 44.6 per cent. Despite this increasing
price disparity, the average value of the handkerchiefs imported from
China rose from $0,751 per dozen in 1931 to $1.0555 per dozen in 1934,
an increase of 40.5 per cent. During the same period the average unit
value of the embroidered linen handkerchiefs imported from European
countries rose from $1,189 to $1,905 per dozen, an increase of 62.4
per cent.
Table 15 shows imports for consumption of ornamented linen handker-
chiefs, total and from China, by quarters, 1931-1934. It will be noted
that the imports follow a well defined seasonal pattern in which imports
are uniformly heaviest in the last half of the year. In every year the
fourth quarter represents the peak of importation and is followed in
importance by the third quarter. This is due to the increased sales
of high-grade handkerchiefs during the Christmas holiday period.
In connection with this seasonal variation is the volume of
9829
-480-
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CVJ CJMO CVI t^l^NVO LfV* I s -
^t I s -* r-io -r\v©Jt o r—
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-481-
imports, it should, "be noted that the highest unit value for Chinese
handkerchiefs were registered in the fourth quarter of each year with
the exception of 1932.
Table 15
IMPORTS FOR CONSUMPTION OF LIIOI HANDKERCHIEFS,
ORNAMENTED WITH EMBROIDERY, ETC., BY QUARTERS
1931 - 1934
Ratio of
Imports
Imports
From
China to
Value
per Dozen
Imports
Total
FroB
Total
Total
From
Period
Imports
Dozens
China
Imports
Imports
China
Dozens
Per cent
1931
1st Quarter
359,365
257,250
71.58
?0.954
$0 . 737
2nd Quarter
385,811
265,969
68. 9<
.803
.674
3rd Quarter
739,104
430,887
58.30
.895
.739
4th Quarter
1,019,660
670,134
65.72
.932
.795
Total
2,503,940
1,624,240
64.07
.905
' .751
1932
1st Quarter
289,397
233,732
80.76
; .872
'; . 8oo
2nd Quarter
185,032
114, 032
61,62
.949-
". . 885
3rd Quarter
374, 135
244,0'?9
65.24
.923
'.838
4th Quarter
600, 128
437, 385
72.88
.950
.825
Total
1,448,592
1,029,218
71.04
.929
.829
1933
1st Quarter
127,505
85,261
66.81
1.038
.824
2nd Quarter
114, 821
84, 239
73.36
1.161
.762
3rd Quarter
347, 557
267,665
77.01
.953
.921
4th Quarter
420,211
707 \Or.
77.00
.803
1.005
Total
1,010,194
760,760
75.31
1.093
.928
1934
1st Quarter
200,364
172,937
' 85.51
1.153
1.093
2nd Quarter
131,209
110,736
84.40
1.145
1.021
3rd Quarter
439,831
385,112
87.56
1.111
1.006
4th Quarter
599,654
547, 622
91.32
1.130
1.084
Total
1,371.058
1,216,407
88.72
1.151
1.055
9829
-482-
Imports of embroidered cotton handkerchiefs
Table 16 shows the annual imports for consumption of cotton hand-
kerchiefs ornamented with embroidery, etc., for the period 1931-1934.
The bulk of these handkerchief s are machine-embroidered and Switzer-
land is the chief source of supply; However, there is a small import-
ation of hand-embroidered cotton handkerchiefs from China which amount-
ed in 1933 to 1,404 dozen, and in 1934 to 1,052 dozen.
At one time imports of cotton handkerchiefs ornamented with emb-
roidery, etc., constituted a substantial proportion of the total imp-
orts of ornamented handkerchiefs, but in recent years this trade lias
declined to negligible proportions. It will be noted that total im-
ports for 1934 amounted to only 5.4 per cent of the value of imports
in 1931.
Table 16. - Imports for consumption of cotton handkerchiefs
ornamented with embroidery, etc., 1931-1934
Year
: Quantity
: Value
: , Value :
: per :
; dozen :
: Index of
: quantity
: 1931 - 100
1931
1932
•1933
■ 1934
; Dozens
! 240,759
113,544
. 82,403
! . 13,047
$158,098
57,787
45,152 !
10,478
$0,657 :
.509 :
.548 :
. 803 :
: 100.0
: 47.2
: 34.2
: 5.4
Imports of plain linen handkerchiefs
Table 17 shows the imports for consumption by quarters for the
period 1931-1934, of plain linen handkerchiefs which are hemmed or
hemstitched. The bulk of these handkerchiefs is from the United
Kingdom. The imports from China which represented less than 1 per
cent of the total imports in 1931, represented 29' per cent of the
total in the fourth quarter of 1234, and 19.4 per cent of the total
for the year 1934. Imports from European countries declined in 1934
to less than 20 per cent of the 1931 level of imports, whereas imports
from China increased 511.8 por cent during the same period.
The exact character of the total imports of plain linen handker-
chiefs is not known. A substantial proportion consists of men's hand-
kerchiefs, and many of the imports are block printed by hand. So far
as imports from the United Kingdom are concerned, they may be machine-
made, hand-made, or a combination of hand and machine -orocesses.
9829
H
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9829
•=584-*. . .
Competitive character of -plain linen handkerchiefs
imported from China
For the purposes of this complaint, special interest attaches to
the imports from China of plain linen handkerchiefs. It is "believed
that the "cull: of these imports consist of women's handkerchiefs ornam-
ented with a shadow hem or an Armenian edge. Since the centers are
plain these handkerchiefs have been held dutiable under Paragraph 1016
of the Tariff Act of 1930, l/ but the ornamentation is such as to make
them competitive in retail markets with embroidered handkerchiefs.
Trend of imports from Cnina of all linen handkerchiefs
Tabic 18 shows a comparison of the total imports from China of
plain and embroidered linen handkerchiefs, by quarters, for the per-
iod of 1931-1934. It will be observed that the low point in imports
was reached in the first quarter of 1533 and that the peak quarter of
1933 and the peak period of imports occurred in the fourth quarter of
1931. On on annual basis imports in 1934 amounted to 79.3 per cent of
the 1931 volume, but a comparison of imports during the last six months
of those years shows a ratio of 89.5 per cent in 1934.
Table 18
COuPAEISOH OF IMPOSTS FOE CONSUMPTION FROM CHINA OF LIN3N
HA1TDK3RCHIZFS, PLAIN AND 3MB20IDEB3D, BY C0PJBSP0NDING CHARTERS
1931-1934
1st Quarter
2nd Quarter-
3rd Quarter
4th Quart
e r To tal
Year
Dozens
Dozens
Dozens
Dozens
Do z ens
1931
260,390
269,113
434, 438
673,799
1,637,740
1932
235,628
118,531
259,814
451,067
1,065,040
1933
92,491
95,374
289,148
341,616
818,629
1934
186,720
120,755
407,579
583, 945
1,298,999
INDICES OF TH3MD 1931 = 100
1931
100
100
100
100
100
1932
90.5
44.0
59.8
66.9
65.0
1933
35.5
35.4
66.6
50.7
50.0
1934
71.7
44.9
93.8
86.7
79.3
1/ See decision of the customs court in T.D. 46477 and by the U.S.
Court of Customs and Patent Appeals in T.D. 47067.
9829
-485-
Rot^.il price classes at "Inch handkerchiefs impo r ted from China
are sold
In order to establish the character of the conpetition between
the Puerto Rican handkerchief industry and the imports from China it
was necessary to request the importers of Chinese handkerchiefs to des-
ignate the retail price classes at which these handkerchiefs were sold.
The importer sells, the handkerchiefs to retail outlets and is in a pos-
ition to know the retail price because of the relatively fixed price
relationships which prevail in the handkerchief industry. For exam-
ple, handkerchiefs selling at 25 cents each in retail markets have a
wholesale value of $1.75 to $2 per dozen; handkerchiefs having a re-
tail value of 50 cents each have a wholesale value of $3.65 to $4.25
per dozen. In periods of declining prices, competition takes the
form of supplying a better fabric or putting mo re. work on handker-
chiefs in the lower price brackets.
Tabic 19 shows the distribution according to retail price classes
of embroidered linen handkerchiefs imported from China. It will be
noted that the percentage retailed at loss than 25 cents is negligible,
except in 193", a year in which the importers had considerable quant-
ities of poorly styled products. In this year only 4.8 per cent of
the total was sold at less than 25 cents. The bulk of the handker-
chiefs imported from China retail at 25 cents, 3 for $1, and 35 cents;
however the percentage soiling at 25 cents has declined since 1931
whereas the percentage selling for 3 for $1 and 35 cents has increased
since 1931. Likewise, there has been a great increase in the 50-ccnt
and 75-ccnt cl?,sses.
The fact that handkerchief sales for the first nine months of
1934 indicate an increased percentage in the 25-cent and 3~forr$l price
brackets is not conclusive evidence of a reversal of- the trend toward
higher prices for the handkerchiefs imported from China. The fourth
quarter is the best period for sales of high-priced handkerchiefs and
complete data for the year 1934 would probably result in a different
percentage distribution from that reported, in Table 19. This is a
matter of importance because the complainants allege that Chinese
handkerchiefs were not sold at 25 cents in retail markets until re-
cently, whereas the data submitted by the importers would indicate
that 63 per cent of their sales was in the 2i3-cent bracket and 78 per
cent was below the 50-cent level in 1931.
9829
-486-
Table 19
DISTRIBUTION OF IMPORTS FROM CHINA OF
ACCORDING TO RETAIL PRICE CLASSES
IMBROIDERHD LUIS HANDKERCHIEFS
Price
Classes.
1931
Per Cent
1932
Por Cent '
1933 1934
Per Cent Por Cent
1st 9 months
5$, 10$ ' '
12^,15^,3 for
50$
.7
1.8 *
4.8
.4
25<f
63. 3
41.8
29.5
36.6
3 for $1.00,35^
14.3
23.4
23.6
26.0
50^
17.4
24.3
32.2
28.0
75(£ and "up
4.3
8.7
9.9
9.0
Total
100.0
100.0
100.0
100.0
DISTRIBUTION OF IMPORTS FROM CHINA OF EMBROIDERED LINEN HANDKERCHIEFS
ACCORDING TO BROADER RETAIL PRICE CLASSES
Price
Classes
1931
Per Cent
Under 25^ .7
25^,3 for $1.00, 35j* 77.6
50^ and up 21.7
Total 100.0
1932
1933
1934
Per Cent
Per Cen
t Per Cent
1st 9 months
1.8
4.8
.4
65.2
53.1
62.6
33.0
42.1
37.0
100.0
100.0
100.0
Unit values of embroidered
linon handkerchiefs imported
from China
U. S. Customs Statistics
(9 Months)l/
$.751 per dz . $.329 per dz. $9.28 per dz
$1,031 per dz.
1/ The unit value of imports for the 4th quarter of 1934 is $1,084 so
the percentage distribution according to retail price classes for
1934 would he altered on an annual basis. Sales of high priced
handkerchi efs are heavy during the Christmas Holidays.
Table 20 shows the coverage represented by the importers' question-
naire returns. Not all importers are represented, but the replies
are known to be from representative concerns and the ratio of
reported imports to total imports is over 53 per cent for 1931,
a year for which the number of companies reporting was only 13.
In later years tho coverage is more adequate in all years it is
sufficient to constitute a good sample.
J 829
'487-
Table 3o
COVERAGE REPRESENTED BY IMPORTERS' QoESTIOliEAjRE RETURNS
ITumber of
"
Concerns
Year
Rcoortiiv
1931
13
1933
16
1933
16
1934
18
1st 9 mo
nths
Ratio of ' Reported Imports
to Imports for Consumption
from China of Embroidered
Linen Handkerch iefs,..
Per Cent
53.8
86.4
78.4
94.3 1/
1/ Several replies covered handkerchiefs in bonded warehouses ana m
transit from China. This factor accounts for the high ratio of
reported imocrts to total imports for consumption for the xirst
9 months of 1934.
9829
-488-
Ratio of Imnorts to Domestic Production
For purposes of constructing a ratio of imports to domestic pro-
duction of hand-made and hand-embroidered handker chiefs, it has "been
necessary to segregate certain portions of the imports and of the re-
ported domestic production.
Imports which may be deemed competitive with the domestic pro-
duction are imports of linen handkerchief s from China, although, as
indicated in a previous section, the handkerchiefs imported from
China are materially higher-priced in retail markets than the better
grades of the Puerto Rican output. Imports of plain linen handkerchief s
from European countries have declined drastically in volume since 1931 ,
and are of a type which offers relatively little competition to Puerto
Rico, but the plain linen handkerchiefs imported from China have
elaborate hems which makes them competitive with a portion of the
ornamented handkerchiefs produced in Puerto Rico.
Embroidered linen handkerchiefs from European countries have
materially higher unit values •than those imported from China, and the
r>ricc spread has been increasing in- the past few years. Por this
reason, it would appear that Puerto Rico encounters very little com-
petition from European countries since the price and quality of the
imports are so much higher than the price and quality of the domestic
product.
The Seme problem of comparability arises in a comparison- of the
domestic output and the imports from China, but t refined analysis is
not possible on the basis of v;he information submitted in connection
with this complaint.
Table 21 gives the ratio of imports of linen handkerchief s, plain
and embroidered, to the estimated Puerto Eican production of com-
petitive items as reported by 18 mainland concerns. To be classed as
competitive, Puerto Eican handkerchiefs must be priced at 25 cents or
more in retail markets. It will be noted that the ratio of imports
to domestic production stood at 353.8 per cent in 1931 and 289.6 per
cent in 1932. In 103" it fell to 165.6 per cent and in the first nine
months of 1934 rose slightly to 17''. 6 per cent.
If the comparison is made on the basis of an index of trend using
1931 as 100, a comparison of the first nine months of 1934 with the
full year in 1931 shows the index of Puerto Eican production to be
87.5 and the index of imports to be 43.7. If it is assumed that the
post-code decline in Puerto Rico - a decline which followed a prc-
code boom - means that the production reported for the first nine
months of 1934 is ir effect the production for the entire year, and if
we are to add the fourth quarter imports from China, the indices for
1934 will stand at 87.5 for Puerto Eican production and 79.3 for the
imports from China.
Despite the highly tentative character of the estimated Puerto
Rican production, it is clear that the indices of trend and ratios of
9829
-439-
imports to domestic production presented in Table 21 overstate the com-
petition between the Puerto Rican output and the imports from China*
If an adjustment is made on the basis of the comparability of the im-
ports and the Puerto Rican output, and if an allowance is made for the
declining proportion of the imports from China which sell in the 25-
cent price" bracket, the ratio of imports to domestic production would
be somewhat lower.
Effect of Fluctuations in Foreign Exchange Rates
In order to appraise the effect of fluctuations in foreign ex-
change rates on the importation of linen handkerchief s from China, it
is necessary to have s slight knowledge of the organization of the
Chinese industry. The linen is shipped from Belfast and stored in
Chinese ports, particularly Shanghai. When orders for handkerchiefs
arc placed by American importers, the linen is withdrawn from storage
and turned over to Chinese contractors who are responsible for the
needlework. Obviously the linen is paid for in Pounds Sterling and
labor is compensated in one of the several Chinese currencies. Trans-
portation costs arc presumably paid cither in sterling or in dollar
exchange .
The proportion of the total cost of the handker chiefs which is
represented by raw material cost, transportation, labor, etc., is not
known, but from data submitted in connection with this complaint re-
garding domestic costs in Puerto Rico, it would appear that linen was
the principal cost item in the manufacture of handkerchief s in China.
Table 22 shows the dollar rates of exchange for the English pound
and the yuan dollar since 1929. It will be noted that the trend of im-
ports has not been effected materially "by the fluctuations in foreign
exchange. The year 1931 was the peak year in the importation of linen
handker chiefs from China and any linen entering into these handkerchiefs
was bought prior to England's departure from the gold standard. The
year 1932 saw materially lower levels of exchange rates, both for
sterling end the yuan dollar, but this did not result in increased
imports. Furthermore, exchange rates continued to be relatively low in
the first part of 1933, when the orders must be placed in China if the
handkerchiefs arc to be available for the fall trade in the United
States, but handkerchief imports from Chxna. were at a low level in that
year because of a style charge. Subsequently, as a result of our own
devaluation and our silver policy, exchange rates for sterling and the
yuan dollar rose appreciably, but 1934, especially in the last half of
the year, saw a marked increase in the imports of linen handkerchief s
from China.
The increasing unit values of the handkerchiefs from China are in-
fluenced in all probability by the increasing exchange ra/tcs, especially
the more recent increases in the value of the yuan dollar, but there is
no evidence to indicate that fluctuations in foreign exchange rates
have been an important influence on the trend of handker chief imports
from China.
9329
-490-
Table 21
comparison or total imposts for cohsumptiou prom ciiiita o? lie*
EAKDIZERCKIEPS, PLAI1T AiT> EMBROIDERED, WITH ESTIMATED PUERTO
1/
Year
RicAii ?:;oeuctio: OP COMPETITIVE ITEMS. 1/
18 COrCEIlIJS 1931 - 1934
1931
1932
1933
1934
(9 months)
Estimated
Puerto Rican
Production
Dozens
462,844
367,774
494,288
404,919
Imnorts
Dozens
1,657,740
1,065,040
818,629
715,054
Ratio of Imports
to Puerto Rican
Production
Per Cent
353.8
209.6
165.6
176.6
1931
1932
1933
1934
(9 months)
I1TDICES OP TREND 1931 - 100
100 100
79.5 65
106.8 50
87.5 43.7
1/ Embroidered handlcerchief s selling in retail markets at 25 cents each or
higher are deemed competitive with imoorts from Chin?.
9829
-491-
:'ablo 22
Relative changes in the dollar exchange rate of the
English pound ?nd the yuan dollar
English value :
: Index of exchange value
Peri<
)d
of - :
: of -
English poundrYuan dollar:
: English pound: Yuan dollar
Cents :
: 1930=100
1929
485.69 :
41.90 :
: 99.9 :
140.0
1930
486.21 !
29.92 :
: 100.0 :
100.0
1931
453.50 i
22.44 :
: 93.3 !
75.0
1932
350.61 :
21.74 :
: 72.1 !
72.7
1935
# *
'
Jan. -
Mar. ■ !
340.54 :
20.21 :
: 70.0
67.5
Apr. -
June
388.24 :
24.28 :
: 79.9
81.1
July- r
Sept.
460.58 :
29.01 :
: 94.7
97.0
Oct. -
Dec.
497.80
32.07 :
: 102.4
107.2
1954
.
Jan. -
". x.r .
505.86
34.31 :
: 104.0
114.7
Aor . -
June
510.27
33.22 :
: 104.9
111.0
Juip -
Sept.
503.32
34.73 :
: 103.5
116.2
Oct. -
Dec.
495.85
34.07 :
: 102.0
113.9
1935
J an . —
liar.
484.74
36.61 :
: 99.7
122.4
April-
- - & l'
486.23
39.94
: 100.0
133.5
9829
-49 a-
Competitive Factors
Rico ossesses an advantage over China, in the manufacture
of . . er hiefs as a result of proximity to continental United States.
This becomes highly important in producing Highly styled and novelty
items.
I : average elapsed time between the date of cloth shipments from
I7ev7 York and the receipt of handkerchief s from the Puerto Eican con-
tractors appears to be from four to six weeks for hand rolling and
■am ei " t to twelve weeks for embroider;." work. The time involved de-
Lds in part on the degree of ornamentation, but in part on the col-
1. ction mechanism maintained by the contractor. Y. r hen work is dis-
tributed through r series of sub-agents throughout the hinterland,
there is considerable delay in returning the finished product to
ITew Pork. However , ' even at its slowest, the Puerto hi can deliveries
are made with great speed as compared with the six to ten-month period
required to receive handkerchiefs ordered in China. This lengthy
period obviously effects the rate of capita
capital costs ;to the importer, from Chine,.
•1 turnover and raises
So far as., skill in needlework is concerned, the available Chinese
workers are undoubtedly superior co the Puerto Hi cans.
9829
-493-
APPSKDIX
QUARTERLY PAYROLL DATA REPORTED 3Y 10 PUERTO RICAM
CONTRACTORS ENGAGED IT. " "AhYXZ.lO '.ITS' PRODUCTION
193.2-1934
A— HOME iiTORKSES PAYROLL
1st 2nd 3rd 4th
Year Quarter Quarter Quarter Quarter Total
1932 $104,675 $136,256 $102,760 $144,756 3438,447
1935 117,571 142,911 170,130 73,360 '713,030
1934 125,099 149,145 109,072 l/ 333,323'
Indices of trend - 1932 =100
1932 100 100 100 100 IOC
19333 112.3 110 163.6 190.2 146
1934 119.5
100
100
100
110
163.6
190
109.5
105.1
—
1/ Payroll for 4th Quarter 1934, is net avail abl
INDEX 0? HOME .7GRK3RS PAYROLL II" 3I23T 9 1/E0NTZ8
01 1932, 1S33, and 1934. 1932=100
Period Payroll Index
Jan- Sept. 1932 3343,691 100
" » 193:' '437,670 127.3
■ » 1934 383,323 111.5
3. FACTORY ".70RKZR3 PAYROLI
1st
2nd
3rd
4 th
Year
Quarter
Quarter
Quarter
Quarter
L E 5 3
326,468
• j~/J ,676
3j3 , 377
330,266
1933
25 , 917
28,041
43,762
52,475
1934
29 , 344
32,932
26,206
ll
Indices of
trend - 1032
= 100
1232
100
100
ioo :
1933
97.9
97.8
153.1
173.4
1234
110.9
114.3
91.7
-
Total
150,195
38,482
100
l/ Payroll for the 4th Quarter 1934, is not available.
9829
_4S 4-
IEDSX OF FACTORY TOHKEZ3 PAYROLL IE FIRST 3 1/IdTTIIS
'F 193?, 1933, and 1934. 1932=100
Period .
Payroll
Index
J an- Sept. 193?
" » 1933
n ii 193A
383,7.31
97,720
8G. 432
100
116.7
105.7
9 . 19
u495i-
May ,3, 1935.
Mr. Victor E. Domenech,
Chair, The Code Authority for the
.Needlework Industry in Puerto Rico,
I iayague z , Puerto Hi c .
lay dear Llr. Domenech:
Tli is is to acknowledge the receipt of your letter of
April 26 in which you requested information regarding the present
status of the complaint filed by the Code Authority for tie Needle-
work Industry in Puerto Rico against iipcrts from China of hand-made
and hand-embroidered handkerchiefs.
As you know, this complaint was filed in October, 1934,
after a very short period of operation under the Code. Likewise, the
basis of tne complaint was in a large measure Lie anticipated effect
on the competitive position of the Puerto Rica.ii Industry of tne (}2
weekly minimum wage lor home workers.
A survey of import statistics at the time the complaint was
filed indicated that total embroidered linen handkerchief imports for
the first nine months of 1954 exceeded tie quantity of imports for
the corresponding period of 1933 by 30 percent, however, the imports
in the first nine months of 1934 were below the levels of 1931 and
1932 by 48 percent and 9 percent, respectively.
In order to submit a report to the President in accordance
with the terms of Section 3(e) of the National Industrial Recovery
Act, it is necessary to show the ratio of imports to domestic produc-
tion. The official statistics of handkerchief s shipments from Puerto
Rico to the mainland show a steady increase from 1931 to 1934 and
shipments for the first nine months of 1954 exceeded shipments for
the corresponding period of 1931 by 116 percent. Furthermore, ship-
ments of linen handkerchief s (the class the most comparable with the
imports complained of) increased 63.7 percent in the first nine
months of 1934 over the corresponding period of 1935.
Clearly, if official date, of shipments between Puerto Rico
and the mainland ^7ere to be used as t e equivalent of Puerto Rican
production, it would be difficult to establish an increasing ratio
of imports to domestic production. Likewise, there is evidence that
the volume of production in Puerto Pico has been several times larger
than the volume indicated 0:/ official statistics.
In order to determine what portion of the Puerto Rican
production was competitive with imports from China, and in order to
9829
-496-
estimate the volume an:l trend of production of these competitive
items, it was necessary to reouest information from mainland concerns
whic' had handkerchi ef s manufactured in wlicle or in part in Puerto
Rico. Several important operators were slow in submit ting^ie* infor-
ma t i on r e que s t ed .
Pending the collection of these data, the piece rates
.'.id t: heme workers -..ere revised downwards. Obviously, this ex-
emption to the $2 minimum weekly wage provisions (effective January 8',
1935) affects the competitive position of the Puerto Rican industry.
For this reason, I am suggesting that you sxibmit information
regarding payrolls and production for the fourth quarter of IS34 end
the first quarter of 1935. The return may be consolidated but the
names of the firms submitting data to ymar office should be indicated.
The attached form is for your convenience in making this return.
Upon receipt of definite information regarding the recent
effects of the operation of the Code in Puerto P.ico, this office j
will be in a. Position to expedite the convolaint.
Very truly yours,
h.D. ire si '.a. -,
Chef, L. rt Section,
Research and Planning Division.
Enclosure.
-497-
Payroll and Production Statistics for the Handker-
chief Industry in Puerto Rico
Payroll for handkerchief
Handkerchiefs
Name of
workers
finsihed in
contractor !
Factory
Home
each
workers
workers
quarter
4th Quarter. 1954 :
1. !
2.
3. !
4. :
5.
1st Quarter, 1935
1.
2.
3.
4.
5.
9329
-498-
t
HORSESHOES (No. 33)
9829
T A3LH OF CO ITTEiTTS
Page ITo .
Complainant's Status under the national Industrial Recovery
Act 501
The domestic industry 501
Production 502
Sales 503
Stocks 503
Exports 504
Imports 504
Comparison of imports with domestic production and sales... 506
Competitive factors 507
Decline in consumption 507
Prices 508
Effect of exchange fluctuations ^H
Effect of the Recovery Program °-^
oOo -
?329
-500-
LIST 0? TABL ES
Tabic I T o . Page : : o ,
1 Distribution of horse or mule shoe production
among compani es • . . 502
2 Total United Str^tes production of horse or mule
shoes "by census years, 1925-1933 -503
3 Reported sales of horse or nulc shoes by four
companies, 1931-1934 503
4 Reported year-end stocks of horse or mule shoes 504
5 Trend of exports of horse or mule shoes 504
'6 Trend of imports of horse or mule shoes 505
7 Imports for consumption into various customs
districts in 1933 and 1934 506
8 Comparison of iranorts with total production,
production in the eastern area, and domestic
sales 507
9 Comparison of trend in the po^ulrtion of horses
and mules with the consumption of horseshoes 508
10 Comparison of trend in the delivered prices of
horseshoes at various points of competition with
import s 510
11 Average price per 100-nound ke£ of annuel sales
of horseshoes by four companies 510
12 Comparison of the trend in the dollrr value of the
reichsmark" with the avcra; e unit value of im-
ports of horseshoes from Germany 512
13 Weighted average cost of producing horseshoes before
and after code. 513
14 Comparison of trend of employment and payrolls in the
horseshoe manufacturing industry 513
- oOo -
9829
-501-
SURVEY 0? IiTOBtiATION
017
HORSES! 01 3
M arch, 195 5
yainant's Status under the National Industrial
Recover;/ Act
This is a report on a complaint under Section 3 (c) of the
." ■ tion.-.l Industrial Recovery Act with respect to imports of horse
or mule shoes, filed "by the Code Authority of the Horseshoe and
Allied Products Manufacturing Industry in accordance with the pro-
visions of Article IX of the Code of Fair Cometition for the indus-
try, approved March 3, 1934; this section provides that, "the said
Code Authority is also established as an Agency of the Industry for
the purpose of investigating and informing the Administrator as to
■che importation of competitive commodities into the United States..
.. and as an Agency for r.iakin;. complaint with respect thereto, to
the President, en behalf of the said industry "
Commodity and Tariff St- tus
Horse or mule shoes, specified in this complaint, are mado : of
wrought ire:- or steel. Imports are almost exclusively the common
variety of flat' shoes, dutiable at one-fifth of 1 cent per pound under
Par -graph 333 of the Tariff Act of 1350; they were dutiable at the
sane rate i n tlle Act of 19--.. Uroujht i r0 n or steel horseshoes with
adjustable or turned calks are dutiable at 1 cent per pound; there
are practically no imports of these special typos/
The Domestic Industry
According to reports of the Burea.u of the Census, the number of
horseshoes manufacturing establishments declined from 26 in 1923 to
9 in 13 "9 and to 3 in 1933. This decline resulted from two causes:
(l) the decreasing consumption of horse and mule shoes in the United
States, and (2) the consolidation of conioeting establishments. The
complainants st- to that only four companies, operating five plants,
are now engaged in the manufacture of the common type horse or mule
shoes specified in this connlaint. The remaining companies manu-
facture only special types of horseshoes and calks.
The largest company in the industry operates two plants, both
of which are advantageously located with rcs2">ect to supplies of raw
material :.n;«. to important consuming markets. One of these plants
is located within the Chicago-Gary steel producing district, and is
the only horseshoe manufacturing establishment west of the Appalachian
Mountains. The other plant is located not far from Bethlehem, Pa.,
another important steel producing center.
9329
_ 502
The three smaller manufacturers, which operate one plant each, are lo-
cated at Richmond, Va. ; Troy, N. Y. ; and' Warehara, i/iass.
The manufacture of horseshoes amounts to about 20 and 50 per
cent, respectively, of the business of two companies in the industry
which together are responsible for somewhat less than 15 per cent of
the domestic output. A third company, which produces about 5 per cent
of the domestic output, is exclusively engaged in the manufacture of
horseshoes. The fourth and largest company, which produced over 75 per
cent of the total output in 1933 and 1934, is almost exclusively en-
gaged in the manufacture, of common horseshoes; less than 5 per cent of
its output consists of special types of horseshoes and equipment.
Table 1 shows the distribution of production among the four com-
plainant companies in the domestic industry. It may be noted that the
principal company increased its share from 58 per cent of the total out-
put in. .1929 to 81 per cent for the first nine months of 1934. The share
of the next largest company declined from 17 per cent in 1929 to 10 per
cent in 1933 and 1934, and the share of the two o+her producers was less
in 1934 than in either 1933 or 1931.
<
Table 1. - Distribution of horse or mule shoe production
among companies
Company :
number
1929
1931
1933
1934
(9 months)
Per cent
of total
Per cent
of total
Per cent
of total
Per cent
of total
1
2
3
4
All other
58
17
: 5
3 14
65-
14
7
6
8
76
10
6
6
► o
81
10
5
4
:
Total
: 100
100
100
: . 100
1_/ Production based upon sales. This plant was sold in 1930 to
company No. 1, but was purchased by a new company which began
operation in late 1930. .....
On the basis of data submitted with the complaint, it appears that
average employment in the horseshoe manufacturing industry in 1933 was
somewhat less than 500 workers and total wages for that year amounted
to about $450,000.
Production
Data from the Bureau of the Census, shown in Table 2, indicate
that the production of horse or mule shoes in the United States de-
clined from about 81 million in 1925, to 29 million in 1931, but rose
to somewhat over 31 million pounds in .1933.
982=
-503-
Table 2. - Total United States production of horse or
mule shoes by census years i 1925—1933
irse or
;iul o
:- T orse or nule
Year
»es
shoe calks
: average
: Quant i ty .
Value :
• unit value
Value
1 , 000 pounc j
1 i.ooo •■'-'
e-v 100 Founds
1,000
1925
: SI, 273
34,218 :
$5.19
: $1 , 109
1927
: 79 , 537
: 4,812 :
6.05
870
1929
: 41,718
■ 2,664 :
6.39
539
1931
: 29,354
: 1,429 :
4.37 ::
251
1933
31 , 140 .
• 1,298 :
4.17
: 221
Source: Ce
msus of -i'anuf'
:ctuTres.
3 n .les
Sable 3 shows the trend of the quantity, value,' and unit value
of sales "by the 'four complainant companies from 1931 to 1934. Sales
by these companies reached their lowest point in recent years during
J- ■> O ± .
Table 5. - Reported sales of horse or mule shoes by
four 'comnanies , 1951-19:54
Year
1931
1932
1933
1934
Quantity
Value
1,00 -pound s
34,615
25,966
23,059
25,073
31,960,197
1,706,857
1,743,039
i, 590, 485
Stocks
Table 4 shows year-end stocks of
the four complainant com-anies for the
this table it may be noted that stocks
from 1933 to 1934, the highest level for the four-year' period.
iverage unit
value
per 100 pounds
$5.66
6.57
: 6.21
6.34
Lorse or mule shoes held by
years 1931 to 1934. From
o.i hand rose about 12 per cent
J 829
_ 504 -
Table 4. - Reported year-end stocks of horse or
mule shoes for four companies, 1931 - 1934
Reported stocks
i of four companies
Year
Quantity
Value :
Average unit
value
1,000 pounds
Per 100 pounds
1931
14,590
$611,443
$4.19
1932
13,017
517,080
3.97
1933
13,108
510,697
: 3.90
1934
14,762 :
604,278
4.09
Exports
Islands and
in 1925 to 1
somewhat, ri
nine months
from $7.30 p
1934. Table
unit value o
high-priced
Exports
of horse or mule shoes, which go mainly to the Philippine
Canada, declined from about 2 per cent of domestic production
ess than 1 per cent in 1932. Since 1932 they have gained
sing to 1.4 per cent of the domestic output in the first
of 1934. The average unit value of these exports declined
er 100-pound keg in 1925 to $6.19 in 1932, and to $5.25 in
4 compares the trends of the quantity, value, and average
f exports since 1925. Exports probably include some relatively
special type horseshoes.
Table 5. - Trend of exports of horse or mule shoes
.
Average
Year
Quantity
Value
unit value
1,000 pounds
Per 100 pounds
1925
1,587 :
$115,872 :
$7.30
1927
1,289
90,699
7.04
1929
985
68,726 :
6.98
1931
342
21,128
6.18
1932
225
13,935
6.19
1933
323
22,909
7.10
1934
390
20,452
5.25
Imports
Imports consist almost entirely of common horseshoes which differ
in no important respect from the domestic product; they are shipped in
standard 100-pound kegs.
Germany supplied 71 per cent of the horseshoe imports in 1933 and
93 per cent in 1934.
9829
-595-
Table 6 shows the trend of the quantity, value, and average unit
value of import from 1930 to 193-'-, inclusive. It will be noted
that imports declined from a peal: of 1,948,000 pounds in 1924 to an
average of about . I, 10 pounds annually for the years 1926 to 1931,
inclusive, and then rose to 371,000 pounds in 1932, to 781,000 pounds
in 1933 and to §65,000 in 1934. The average unit value of imports
declined to a low point in 1932, out rose 'to the 1929 level in 1934.
Table 6.. - 'Trend of imports of horse or mule shoes
: Ave rape
Year :
Quantity
: Value :
unit value
: 1,000 p.ounds-
: Per 100 pounds
1920
: 44- :
$3,496
07.99
1924
1 , 948 - :
87,408 . :
4,49
1935
130 :
5,971 : :
4.59
1926
; 2 :
.132 :
6.56
192?
•30
1,754 :
5.82
1923
19
787 :
4.15
1929
: . 60 :
2,441 :
4.08
1930
' 32 •:
1 , 344 :
4.14
1931
: 40 :
1,533 :
3.07
1950
371 •
13,531
3.64
:
701
29,421 :
3.76
1
965
39,325
4.08
Source : Foreign Commerce and H.-nvig ? ti on of the TJ/.itec States
Table 7 shews the distribution of imports for consumption
among varicus customs districts in 1933 and 1954. From this
table it will be noted that there was a sharp decline in entries
at hew York and a considerable increase in southern districts in
1934 as com-oared with 1953.
-50R-
Table 7. - Imports for consumption into various customs
districts in 1933 • nd 1934
Percent age
Customs
district
: Quantity
1933 : 1934
Unit
1S53
value
1934
distribution
1933 : 1934
: Pounds
Per 100.
joounds
Hew York
328,644
147,42^
S3. 83
$4.47
41.5
15.3
Philadelphia
-
10,590
-
3.51
-
1.1
Virginia
57,741
124,517
3.72
4.31
7.3
12.9
South Carolina
66,^00
203,400
3.65
3.92
8.4
21.1
Georgia
253.400
288,200
3.78
3.64
32.0
29.9
Florida
-
5,500
-
3.58
,
,fi
Mot) ile
13,000
52,500
3.65
3.60
1.6
5.4
New Orleans
-
104,489
-
4.72
-
10.8
Galveston
-
15,500
-
5.40
-
1.6
Puerto ?.ico
73,280
3 , 042
•..00
6.64
9.2
.3
District not given
-
10,000
-
3J12
-
. „i«.o.
Total -
United States
:792,6«5
964,964
3.80
4.08
100.0
100.0
Comparison of Imports rith Domestic Production
,nd Sales
Taole 8 shows a. comparison of the trend of imports with the
total production, production in the eastern area, and sales reported
by four compli.anant companies.
-507-
Table 8. - Comparison of imports -ith total production,
Production in the eastern area, and domestic sales.
1934
Imports
Reported by four companies :
: Ratio of imports
to -
Production - :
Sales :
: Producticn
Sales
Period
In :
In
Total
eastern;
area :
..Total:
: Total
eastern
area
Total
Thousand nounds
: Per cent
1929
SO
1/35,931
l/l4,110:
2/ ;
: 0.17
0.43
•3/
1931
40
26,790
15,615:
34,615 :
: .15
.26,
0.12
1932
371
25,180
13,946:
25,966 :
: 1.47
2.66
1.43
1933
781
30,530
13,350:
28,059 :
: 2.56
• 5. 85
2.78
1934
! 965
• 3/
3/ :;
25,073 :
: 3/.
: 3/
- 3.85
Jan. -Sept.
698
. 21,180
8,509:
3/ :
: 3.30
8.20
1 3/
Jan. -Mar.
149
3,854
3,151:
3/ :'
: 1.68
4.73
3/
Apr. -June
370
8,364
3,177:
3/ :
: 4.17
11.64
H
July-Sept.
179
3,462
2,181:
t
*
3/ :
: 5.17
8.21
3/
1/ Production of one company based on sales.
2/ Sales of two of the four companies amounted to 37,528,000 nounds
during this year.
3/ Not available.
Prom the foregoing table it may be noted that the ratio of imports
to total production rose from less than 1 per cent in 1929 and 1931 to
roughly 2k per cent in 1933; and that after the adoption of the code by
the horseshoe manufacturing industry, the r°tio increased to somewhat
over 5 per cent cf total domestic production. The ratio of imports to
production by the four plants located e'st of the Appalachian Mountains
rose from somewhat less than 6 per cent in 1933 to over 10 per cent in
the six-month period following the adoption of the code in March, 1934.
Competitive Factors
Decline in consumption
The decline in the domestic consumption of horseshoes has been in
large measure a result of the displacement of horses by automobiles,
trucks, and tractors. The decline in the horse and mule population in
the United States, however, has been much less than the decline in the
consumption of horseshoes; this is indicated by the data shown in Table
9.
9829
-508-
Table 9. - Comparison of trend in the population of horses and
mules with the consumption of horseshoes
: Total
In licated :
horse and , :
mule shoe :
consumption :
2/"
: Index of -
: Number of
Year : horses and
: mul e s
I/:
: Total
: number of
: horses and
: .mules
Indicated
; horse and
: mule shoe
consumption
: 1,000
1923 I 25*589 .
1925 :. 23 ,.738 ■
1927 . , :' 22,057 ■
1929 :- 20, .245 .
1931 : 18,745 .
1933 :■ 17,531 :
1 , Q00 pounds :
125,324 •;:
79,316 :
73,278 :
40,793 ■ :
29,052 :
31,598 : :
: 1 923
: 100
: 93
: 8'6
: 79
: 73
: 69
= 100
100
64 ;
; 62 .
; 33 ;
: 23 ' *
" 25
1/ horses and -mules: on "farms: plus estimated number in cities based upon
census figures of 2,034,000 in 1 920 : and 375,000 in 1930-
Agricul ture Yearbook , .1934* \
2/ Domestic production . plus imports, minus exports.
The number of horses and'-mul.e.s en farms declined 6,690,000, from 1920 to
1930, while the number in cities is estimated to have declined 1,709,000 dur-
ing the same period. . With reference to the consumption of horseshoes, the
decline in the number of horses in cities was probably of much greater im-
portance than the decline in the number on farms, for the reason that horse-
shoes wear out more rapidly on hard-surfaced cr paved streets.
The available production statistics do not, indicate accurately the
consumption of horseshoes in the United States in recent ypars for the rea-
son that a number of companies in the ;.ndustry were liquidated during the
years 1922 to 1930 and their accumulated stocks. were sold in subsequent
years. For example, one of the complainant' companies sold 35 million pounds
in 1929, although it produced only 24 million, and 27 million in 1931, when
its production was only 19 million.
A further factor of importance in the declining consumption of horse-
shoes is the effect of the agricultural depression in curtailing the pur-
chasing power of farmers. A comparison of the trend of farm prices of agri-
cultural products with the indicated mill prices of horseshoes for census
years from 1925 to 1933 indicates that, on the basis of the relationship ex-
isting in 1925, the price of horseshoes was 86 per cent higher than farm
prices in 1933. The rise in cost of horseshoes in terms of farm products
has undoubtedly tended to decrease their consumption.
The consumption of common horseshoes, which require fitting by black-
smiths, has been afi'ected'by competition from special type shoes and calks,
produced to some extent by the complainants but principally by other com-
panies. For example, the special type screw and drive calk shoes are con-
structed so that the calks may be replaced from'. time - to time as they wear
out. Replaceable toe calks may also be attached to
9329
-. ^9-
standard shoes or replaced without welding. Likewise, ruober shoes and
pads may be used with standard iron shaes or in combination with iron
toe crlks to give maximum protection against slipping and to eliminate
noise; they are also replaceable. Special type shoes and calks, there-
fore, compete with standard horseshoes by prolonging wear and by elim-
inating to a considerable extent the necessity for and the cost of
fitting by blacksmiths.
Prices
The complainants have submitted data showing the trend of deliv-
ered prices at : various points where import oompetition is claimed to
oe severe. These data indicate that prices were not, on the average,
reduced from 1929 to 1932. In July, 1932, a small company in Ma ss-
achusetts reduced its price for delivery in southern territory by • $1.03
per 100 pounds. In January, 1933, the New York producer lowered *he
New York City price $1 per 100 pounds and the Philadelphia prie $1.55.
The largest producer followed in July with a price reduction of $1
for delivery at New York City and Atlanta, G-a. These lower prices
were maintained until April, 1934, when the pre-depression level was
restored by all producers. No data were submitted for prices in
districts west of the Appalachian Mountains. The statistics, however,
indicate that the average decline in tne value of output at the mill
for all producers' after 1^29 was considerably greater than the reduc-
tion in delivered prices in the eastern area.
Table 10 presents a comparison of the trend.s in the various ■
prices submitted by the complainants.
9829
-510-
Table 10. - Comparison of trend in the delivered prices of
horseshoes at various points of competition with imports
: N
D
3W
slivered j
:Phila-
Drice per '.
.00 pounds
at -
Company
Southern
Rich-
number l/
York
: delphia
Atlanta
joints
mond 2/
Average
la
2
: 2
lb
: 3
4
1929
April
$6.60
$6. 61
: $6.59
$K.37
! -
$6.30
o6.ro
1932
Jam.xa.ry
6.62
6.61
6.59
6.89 .
$6.93
6.05
6.62
April
6.62
^.59
6.55
6.39
6.93
6.04
6.60
July
6.^2
«.63
6.55
6.89
5.90
S.09
6.45
October
6.62
R. 63
6.55
6.89
5.90
6.10
^.45
1933 :
January
6.62
5.63
5.00
6.39
5.90
6.02
6.01
April :
6.R2-
5.63
5.00
6.39
5.70
5.12
5.33
July
5.62:
5.63
5.00
5.89
5.70
5.94
5. 63
October :
5.60
5.63
5.00
5.87
5.70
5.96
5.63
1934
Jamuary :
5.60
5.63
5.00
5.37
5.70
5.95
5.^2
April
6.60
6.60
R.5fi
R.87
6. 65
6.72
6.67
July
6.60
6.60
6.56
6.87
6.63
6.91
6.70
1/ Company number - la located at Catasauqua, Pa.; lb at Joliet, 111.;
2 at Troy, 11. Y.; 2 at War ©ham, Mass.; and 4 at Richmond, Va.
2/ F.o.b. shipping point.
Table 11 shows the average unit value of annual sales of horse-
shoes as submitted by four companies.
Table 11. - Average price per 100-pound keg of annual
sales of horseshoes by four companies
Year
Company number
Average
four
» - - • - -
x
2 _ ,
....?.
4
companies
1931
$5.41
$6.52
$6.76
$6.fifi
§5.66
1932
6.64
6.50
5.93
6.33
6.57
1933
6.27
6.19
6.14
6.21
1934
6.41
6.49
5.27
6.58
6.34
It will be noted that company I T o. 1, increased its price 23 per cent
between 1931 and 1932. This rise in price was accompanied by an 18 per
cent drop in the quantity of sales mr.de by this company, and by a sharp in-
crease in the volume of imports. An inverse relationship between the vol-
ume of sales and prices is indicated by statistics for the other three
companies. The clearest case is that of company Wo. 3, which lowered
its price slightly each year after 1931 and increased its sales steadily,
9829
-511-
while the spies of its three compe titers declined an average of 30 per
cent. From 1333 to 1931 the -jrice ciwrg< C by this company was lowered
5 per cent, while the average price quoted by its competitors rose 3
per cent, a difference in'. 1934 of $1.16 wer keg. At this lower price
conroany No, 3. increased: its sales IS' per cent as compared with a 23 per
cent increase in imports: from 1933 to 1934.
Effect of Exchange Fluctuations
The rise in the dollar value of the German mark since April, 1933,
has made it' increasingly difficult for German products, including horse-
shoes, to be sold in the United States 1 . However, while outwardly main-
taining the", jold value of the reichsmark at par, the German Government
has resorted to foreign exchange control measures which have had much
the same effect as currency depreciation. Special concessions have been ,
made to e.cporters for the :purpose of promoting sales in foreign markets
which otherwise ■ -cold have been closed 'to German -products. The prin-
cipal methods by which exports have been encouraged ar& as follows;
(1) By an arrangement enabling the German exporters to real-
ize profit by accepting part payment in the form ocf German bonds
v 'hich could be purchased in foreign markets at considerably below
the German market price.
(2) By ma'ring exchange available to German exporters at con-
siderable discount derived from "blocked" accounts of foreign cred-
itors in German banks.
(3) After October 1, 1933, by makin; exchange available to German ex-
porters,. at discounts ranging as high as 5'"> per cent, from a spec- ".
ial fund of "blocked exchange" created in connection with a govern-
ment monopoly of foreigh exchange.
Table 12 shows a comparison of the trend in the dollar value of
the reichsmark with the average unit value of imports of horseshoes
from Germany during 1933 and 1934.
9329
-512-
Table 12. - Comparison of the trend in the dollar value
of the reichsmark with the average unit value of imports
of horses irru Germany
Average
unit value
Exchange :
: Index of
-
Statistical
: Unit value :
Exchange
period
of imports
rate :
: of imports
rate
yer 100 pounds
Cents :
: Jan. -Mar., 1933 - 100
1933
Jan. -Mar. !
$3.58
1/ 23.82 :
: 100 !
100
Apr. -June
3.50
26.85 :
: 98 i
113
July- Sept.
3.63
33.80 :
: 107 . :
142
Oct. -Dec.
4.11
37.00 :
: 115
155
1934
Jan. -Mar
3.61
38.71 :
: 101
163
Aor.-June
4.12
39.12 :
: 115
164
July- Sept.
3.83
39.42 :
: 107
165
Oct. -Dec.
4.61
40.28 :
: 129
: 169
1/ January-March exchange at par.
The fact that the average unit value of imports of horseshoes from
Germany increased very little from the beginning of 1933 to the third
quarter of 1934, while the exchange value of the reichsmark in terms of
dollars rose 65 per cent, indicates that German exporters have in fact
"benefitted "by some form of exchange subsidy sufficient to offset the
disadvantage which would otherwise have been caused by the revaluation
of the United States dollar. It thus appears that the dollar exchange
value of the reichsmark may have little or no significance as an indica-
tion of increased disadvantage in the sale of German horseshoes in the
United States.
Effect of the Recovery Trogram
Data submitted by the complainants indicate that direct labor costs,
which accounted for 28 per cent of total costs, increased 16 per cent
after the adoption of the code. The cost of materials, which amounted
to 23 per cent of total costs, increased 31 per cent; other cor.fcs in-
creased approximately 13 per cent. As shown in Table 13 a comparison
of weighted average costs for the industry oefore and after the adoption
of the code indicates an increase in total casts, exclusive of selling
expense, of 18 per cent.
9829
- 513 -
Table 13. - Weighted average cost of producing horseshoes
"before snd after code
firer 100 pounds)
Before
co c e
per cent
' After
code
: Increase
Cost item
Cost ;
Cost
Per cent
Co
st"i
Per
'Per cent
of total
of ' total
•
dent
:of total
Materials
•51.02
: 23
$1.34
• 26
:$0
.32
31
: 41
Labor
1 OA
X . CrZ
28
1.44
28
.20:
16
: 26
Factory expense
.88
20
1.00
20
.12:
13
15
Depreciation
.21
5
.22
4
.01:
4;
1
General and admini-
strative expense
.46
11
.52
10
.06:
13
18
Total
3.81
87
4.52
88
.71
18
91
Sell in-; expense
.55
13
.62
12
.07
13
09
Total including:
selling expense:
4.36
100
5.14
100
.73
18
100
Although the cost of production data indicate that la"bor costs ad-
vanced 16 per cent after the code, the employment and payroll data sub-
mitted "by the complainants reveal little or no increase in the average hour-
ly wage, and only a slight advance in the average weekly wage rate.
Table 14 summarizes the employment and payroll data for periods before
and after the code.
Table 14. - Comparison of trend of employment and payrolls
in the horseshoe manufacturing industry
Total reported for
one week
in period indica
sed
Period
Number
Amount !
Total :
Weekly
Hourly
of :
of :
hours
wage s
wa
Ses
workers
payroll :
worked
1929
581
: $13, 907
27,920
:;i23.94
: $0
.50
1932
575
: 3,629
: 20, 332
15„35
.43
1933
•
January
376
4,748
9,999
: 12,63
.47
April
337
7,480
14,208
: 22.20
.53
July
578
10,725
23,485
: 18.56
.46
October
430
8,970
17,656
: 18.69
.51
1934
January
639 :
12,766
24,291
19.98 :
.53
Code-
Approved kiarch 3
April
July
627 : 12,771 24,812 20.37 .51
615 : 12,305 24,122 20.01 .51
Source: Data supplied by complainants.
9829
-514-
The code of the horseshoe manufacturing industry provides a min-
imum wage of 40 cents per hour in the North and 30 cents per hour in
the South, and limits the normal week to 40 hours. These provisions
had little effect upon the costs of the horseshoe manufacturer s for
the reason that the plants had been operating on a 40 hour per week
schedule prior to the code-, and were paying wages considerably in excess
of the minimum. The relatively high level of wages, in the industry is
accounted for in part by the fact, that the majority of the workers in
the industry are unionized.
9829
-515-
PIG IRON (No. 43)
9329
-516-
TABLE OF CONTENTS
Page No.
Commodity and tariff treatment 519
Description of commodity 519
Tariff treatment 519
The domestic industry 520
Location 520
Type s of producers 520
Capacity 520
Area of import competition 522
The complainant producers 522
Course of domestic production 525
Pig iron production compared with general
inanuf acturing 525
Total, for sale, and for makers ' use 526
Total production by grades 527
Merchant production by grades 527
Importance of merchant production 528
Importance of merchant production in area of
import competition 529
Exports 531
Imports 531
By customs districts 533
Ratio of imports to production- • 534
Effect of the National Recovery Program 538
Pertinent provisions of the code 538
Labor provisions 538
Basing point provisions 538
Price provisions 538
Employment 539
Earnings of labor 540
Hourly wage rate s 541
Costs of production 542
Raw material costs 542
Pr ice s 545
The currency situation 547
oOo
3829
LIS ? 0? TAI LS S
Table Pa^e
Number Number
1 Annual blast furnace capacity of the United States... 521
Comparison of pig iron production by reporting com-
plainants with total merchant production in the
United States in which they operate, 1931-1934 524
3 Comparison of index of daily av.er.age production of
pig iron with general index of manufactures 525
4 Domestic production of pig iron 526
5 Total domestic production of pig iron by grades
1920-1334 527
6 Merchant production of pig iron by grades,
1920-1934 528
Ratio of merchant production to total output of
pig iron, by grades » 529
8 Comparison of merchant production with total produc-
tion of pig iron in the United States end in the
producing area of import competition, 1931-1934 530
9 Course of exports of pig iron, 1322-1934 531
10 Imports of pig iron into the United States by
principal countries 532
11 General imports of pig iron in 1933, by customs
districts 533
12 Comparison of imports of pig iron with total produc-
tion, and production for sale, 1923-1334 534
13 Ratio of imports to domestic production of
pig iron 536
14 Ratio of imports to reported production of ■>
complainants 537
15 Employment and activity in the production of pig
iron by the reporting complainants 540
16 Course of semi-monthly earnings of labor employed
by reporting complainant producers 541
9829
-510-
( Continued)
Table Fage
Mumper Number
17 Course of indicated hourly wage rates % • 542
18 . Domestic consumption of principal raw materials
per gross ton of pig iron, 1933 543
19 Imports of iron Te in 1933 and 1934 "by customs
districts 544
20 Comparison of approximate landed costs of imports
with domestic prices delivered at Thiladelphia 546
21 Comparison cf trend of unit value of imports from
the Netherlands with course of florin-dollar ex-
change 547
22 Comparison of trend of unit value of imports from
British India with course of rupee-dollar exchange... 548
oOo
9829
-519-
SURVSY 07 INTOHKATION
ON
PIC IROK
Karch, 1935
Commodity and Tariff Treatment
Description of commodity
Pig iron is described by the American Iron and Steel Institute
as "a metallic product, the result of blast furnace or electric smelt-
ing of iron ores, v.'hich is used as part or all of the initial metallic
charge in steel making, puddling (the point of departure in process
between the manufacture of wrought iron and of steel), and producing
molten metal for foundry use (casting)." It is produced by smelting
iron ore with carbonaceous fuel and a fins (chiefly limestone) in
blast furnaces.
Of the total domestic output of pig iron, less than one-fourth
in the past has been produced for sale; more than three-fourths has
been produced by large integrated companies for further use in the
manufacture of iron castings, steel, and wrought iron.
Domestic "merchant" pig iron, - i.e., produced for sale, -
which is the subject of this report, consists chiefly of (1) foundry
iron which is characterized by a silicon content of from 1.25 to 3.25
per cent, (2) malleable iron which is characterized oy a phosphorus
content not exceeding 0.20 per cent, and (3) minor quantities of forge
iron, used largely in the manufacture of wrought iron.
Gas and coke are the principal fuels used in the manufacture
of pig iron, having almost entirely displaced charcoal. In fact,
there are now only five blast furnaces in the United States ^hich
are designed for the production of charcoal iron.
Tariff treatment
Pig iron is dutiable under Paragraph 301 of the Tariff Act of
1930 at $1.12tt per long ton (or gross ton as it is known to the in-
dustry). The Tariff Act of 1922 originally provided a specific rate
of duty of 75 cents per ton. As the result of an investigation by
the Tariff Commission under Section 515 of that Act, the duty was in-
creased by Presidential proclamation, March 24, 1927, to $1.12^- per
ton, which rate was made statutory in the Act of 1930. A similar
investigation by the Tariff Commission in 1931 resulted in no change
of duty.
982$
- 520
The ad valorem equivalent of the duty under the Tariff Act of 1922
averaged approximately 4 per cent; the duty of $1.12% per ton made effect-
ive by Presidential proclamation in 1927, and continued in the Tariff Act
of 1930, averaged around 7 per cent ad valorem prior to 1930; on account
of lower prices it was over 12 per cent in 1933. As a result of an up-
ward turn in prices, it declined to somewhat over 8 per cent for the year
1934.
The Domestic Industry
Location
The pig iron industry of the United States is located almost entirely
east of the Mississippi River, generally centered at or near the product-
ion centers for steel, wrought iron, and cast iron products. The great-
est pig iron producing area of the United States embraces western Penn-
sylvania, eastern Ohio, and' West' Virginia. Frobcbly the second area in
importance is the eastern part of Pennsylvania and Sparrows Point, Md.
Another important pig iron producing region is centered in and around
Birmingham, Ala., a district which, although somewhat distant from the
markets for finished iron .and steel products,, enjoys the natural advan-
tage of large deposits of iron ore, limestone, and coking coal within
short distances from the blast furnaces. A fourth major pig iron pro-
ducing area is located in northern Indiana and Illinois; and more recently
Michigan has attained relative importance as a. .pig iron producing State.
In addition, there are two pig-iron producing areas in New York State,
one in the vicinity of Buffalo, and the other in the northeastern part
of the State.
Types of producers
The domestic industry may be roughly classified by types of pro-
ducers as follows: (a) steel nanufacturers who consume their entire
output of pig iron; (b) manufacturers of cast iron, wrought iron, and
steel, who attempt to merchandise the pig iron produced in excess of
their requirements; and (c) ' pig iron producers who are entirely dependent
upon sales for the disposal of their output of pig iron.
Capacity
The total domestic pig iron capacity in 1933 was 240 blast furnaces
(excluding furnaces which had been long idle, and those which produce
ferro alloys) whose rated capacity was more than 50 million gross tons
per annum. Table 1 shows the distribution of domestic pig iron capacity
by States.
9829
-521-
Table 1.
Annual 'Blast furniace capacity of the United States*
:Pig iron capacity
: in 1933
Number of blast :
furnaces :
: Per cent of
: total number
State : Gross :Per cent
: tons l/:of total
1933 2/
. 1934 3/:
:1933
1934
: Thousands:
275
! 258 :
: 100.0
Total : 50.322 : 100.0
: lO\0
Massachusetts
175 :
.3
1 :
1 :
: 6/ :
6/
New York
3,477
6.9 •
19
18 :
: 6.9:
7.0
Pennsylvania - :
16,935 :
33.8 :
93 :
82 :
: 33 . 8 :
31.8
Eastern
4/2, 713
5.4
19
5/ :
: 6.9:
Other
4A4 272 '
28.4
74
5/ :
i 26.9:
Maryland
1 ; 653
3.3
6
6 :
: 2.2-
2.3
Virginia
90
. 2
6.
5 :
: 2.2
1.9
West Virginia
603
1.5
3
3 :
: 1.1
1.2
Kentucky
256
.5
2 :
: 6/
6/
Tennessee
180
.4
6
4 :
: 2.2
1.5
Alabama
3,^75
6.1
25
25 :
: 9.1
9.7
Ohio
11,346 -
22.5
55
53 :
: 2° .
20.5
Illinois
5,561
11.1
25
25 :
: 9.1
9.7
Indiana
5,058
10.1
: ..18
IS :
6.5
7.0
Michigan
: 875
1.7
: 8
8 :
: 2.9
3.1
". .innesota
: 113
: .2
3
3 :
: 1.1
1.2
Miss our i
' 1/
: 1/
: 1
1 :
: 6/
6/
Colorado
: 493
1.0
: 3
: 3 :
: 1.1
1.2
Utah
: 172
.3
: 1
1- :
: 5/
6/
All other
: -
! —
; —
i — :
: 1.8
: 1.9
* Compiled from statistical reports cf the American Iron and Steel
Institute.
1/ Does not include capacity of blast furnaces which have long been
inactive or are likely to remain inactive.
2/ Includes all blast furnaces whether producers of coke or charcoal
pig, iron, or ferro alloys.
3/ As of June 30, 1934.
4/ Special communication of American Iron and Steel Institute.
5/ Not available.
6/ Less than 1 per cent; iicluded in "All other."
9829
-522-
Area of import competition
m
Because of the high cost of inland freight, pig iron produced
ore than approximately IOC miles inland does not enter directly into
competition with imports. Import competition, however, is an important
factor; in the areas of consumption along the Atlantic seaboard and the
vicinity of Buffalo, N. Y. The former area is supplied "by nearby domes-
tic producers and "by producers in the Alabama district who ship by water
to eastern centers of consumption. The rated capacity of the producing
areas which compete with imports is approximately 11 million gross tons
per annum, or about 22 per cent of the total pig iron capacity of the
United States.
Of the total pig iron capacity of the producing area in which
competition from imports is encountered, approximately 50 per cent, or
5.5 million gross tons, is normally available for merchant production,
of the 20 producers in this area, eight (combined merchant capacity
over 3 million gross tons per annum) are either operating units or sub-
sidiaries of steel companies; two (combined capacity over 250,000 tons)
are subsidiaries of producers of cast iron products; at least one is
a producer of wrought iron; and the status of three other producers is
not clearly indicated from available information. The remaining six,
whose combined capacity is 1,287,000 tons, or 23.4 per cent of the total
merchant capacity of this area, are entirely dependent upon sales for
the disposal of their pig iron output.
The complainant producers
The complaint which is the subject of this report was submitted
for 12 producers having 24 blast furnaces situated : by States as follows:
Massachusetts, 1; Hew York, 9: Pennsylvania, 7; Virginia, 1; and
Alabama, 6. Their combined annual blast furnace capacity on December 31,
1933, was 8,765,436 gross tons, or 17.4 per cent of the total pig iron
blast furnace capacity of the United States. Their capacity for produc-
tion of merchant pig iron was 4,400,828 gross tons per annum, or 50.8
per cent of their total capacity. Of the 12 complainant producers, five
are either integrated steel producers of subsidiaries thereof, and thus
are not entirely dependent upon sales for the disposal of their pig iron
output. Five complainants, having a combined capacity of 1,137 gross
tons, or 13.0 per cent of aggregate pig iron capacity of the complain-
ants, are entirely dependent upon sales for disposal of their pig iron
output. Of these, two are subsidiaries of fuel companies, but their
bla.st furnaces have not operated since 1931; one other, which also oro-
duces coal-tar derivatives, has produced pig iron more or less consist-
ently throughout the depression. Available information with respect to
the operations of two other producers is indefinite.
9829
of the nine producers who submitted data in support of this
complaint, one producer has not been at all active, and three have
not operated since 1S31. Of the remaining five, only two were active
throughout the year 1932; two were in operation during the first quarter
only, and one other producer operated only during the last quarter of
that year.
During the first six months of 1933, immediately prior to the
adoption of the code, only two producers were active. From July to
December, however, all of the complainants were in blast, excepting
the three who had not operated since 1931.
During the first six months cf 1934, four of the producers were
in continuous operation, one operated irregularly, find another sus-
pended operations in February. During the third auarter, four pro-
ducers were in continuous operation, one continued idle, and one sus-
pended operations during August. During the month of October, the last
month for which data were submitted, only three producers were active.
Table 2 compares the production of the reporting complainants
with the total merchant production of pig iron in the States in which
they operate.
9329
-524-
Table 2.
Comparison of pig iron ^reduction by reporting complaints
with total merchant production in the States in
which they operate*, 1931-1934
Merchant produc- :
Production :
Hatic
of reoorted produc-
tion (north :
as reported ttion
to merchant produc-
Atlantic States l/
by : tion
in States in which
and Alabama 2/ :
conrolaintants complaintants operate
Gross
tons :
Per cent
Years
1931 :
2,007,838 ;
1,027,562 :
51.2
1932
887,8-4 :
408,292 :
46.0
1933
1,232,936 :
476,6^7 :
38.7
1954
1,626,^46 :
3/
Quarters
1932
First
347,818
118,949
34.2
Second
201,681
96,799
48 .
Third
119,017
90, 623
76.1
Fourth
219,388
ru,92i
46.5
1933
First
: 122,559
49,628
40.5
Second
: 177,195
65,928
37.2
Third
: 467,993
159,272
34.0
Fourth
: 465,189
201,779
43.4
1934
First
: 425. 704
183, 016
43.0
Second
: 547,692
181,491
33.1
Third
: 361,425
171,981
47.6
Fourth
: 291,185
3/
* Compiled from monthly reoorts apoe' ring in Steel and aata sup-
plied individually by nine comolainants.
1/ Does not include Massachusetts, Virginia, and Maryland which could
not be segregated.
2/ Includes indeterminate quantities of f erromanganese and spiegeleisem.
3/ Reports cf complainants not complete.
9829
-525-
Course of loraestic Production
Fig iron •production compared with general manufacturing
From 1924 through 1329 the daily average domestic outnut of nig
iron ranged, between 10' \ 000 and 116,000 tens per day. Btiring those
years the index of daily output moved in relatively close harmony with
the index of general manufacturing. After 1929, however, pig iron
output declined to a much greater degree than did general manufacturing,
reaching a low point in 1952 of somewhat less than 24, «VX) tons per day,
or 24 per cent of the 1923-25 average, as corn-pared with the low point
of 65 per cent in that year for the index of manufacturing. The index
of pig iron output rose to 37 in 1933 and to 45 in 1954, as compared
with 75 and 78, respectively, in those yj- rs for the general index of
manufacturing. Table 3 shows a comparison of average daily output of
pig iron with the index of manufactures compiled by the Federal Reserve
Board.
Table 3.
Comparison of index o*" daily average production of pig
iron with general index of manufact\irers
1923-1925= 100)
Daily average output :
: General
Year
of pig iron :
: index of
: manufactures
Gro r JS tons 1 /
Index
2/
1926
l 1 ?,]^
: 119 :
: 108
1927
99,422
101 :
: ■ 106
1928 •
103 ,.36 5
105 :
: 112
1929 . '
115,008-
118 :
: 119
1930
86, 141
88 :
: 95
1931
50,035-
51 :
: 80
1932
23,699
24 :
: 63
1933
36,223
37 :
: - 75
1934
43,774
45 :
: 78
Quarters
; •
1933
First
18,487
19 :
: 61
Second
30, 559
31 :
: 80
Third
55,897
57 :
: 90
Fourth
39, 504
40 :
: 71
1934
First
45, 8^1
47 :
: 81
Second
62, 973
p 4 .
: 87
Tnird
34, 650
35 :
: 71
Fourth
31, 924
32 :
: 74
1/ Steel , January 7, 1933.
2_/ Federal Reserve 3oard - unadjusted.
9829
Tot-il for Sale, and makers' Us e
-526-
The course of domestic production of pig iron
inclusive, as published by the American Iron and St
shown in Table 4. It may be noted that, with the e
share of domestic production which ras offered for
est level in 1924; a secondary peak was reached in
the trend of the ratio of merchant production to to
iron was downward until 1S33 when only 15.9 per cen
tion of this commodity was offered for sale. In IS
recovery in the ratio of production for sale to tot
from 1920 to 1933,
eel Institute, is
xception of 1920, the
sale reached its high-
1927. Since that year,
tal production of pig
t of the total produc-
34, there was a slight
al nroduction.
Table 4. - Domestic production of oig iron*, 1920-1934
Year :
Total
Production
Satio to total
production
nroduction
For
For :
: For For
sal e
makers' use:
: sale makers'
: use
Thousands c
if gross
tons
Fer cent
1920
36 , 244
10,243
26,001 :
: 28.3 : 71.7
1921
16,399
3,570
12,829 :
: 21.8
78.2
1922
26,325
6,21,2
20,593 :
: 23.2
76.8
1923
39,721
10,106
29,615 :
: 25.4
74.6
1924
30,375
8,058
22,817 :
: 26.1
73.9
1925
36,116
8,587
27,529 :
: 23.8
76.2
1926
38,698
9,283
29,410 :
: 24.0
76.0
1927
35,858
8,978
26,880 :
: 25.0
75.0
1928
37,402
7,724
29,678 :
: 20.7
79.3
1929
41,757
9,014
32,743 :
: 21.6
78.4
1930
31 ,021
6,567
24,454 :
21.2
78.8
1931
: 17,958
4,000
13,958 :
• o<j • O
77.7
1932
8,550
1,714
b,doo :
: 20.0
80.0
1933
13,001
2,063
10,933 :
: 15.9
84.1
1934*
15,972
2 , 755
13,217 :
: 17.2
82.8
(*) Compiled from American Iron and Steel Institute - Annual Statistical
Report. 1933 .
(**) Compiled from monthly reports in Steel ; includes ferromanganese and
spiegeleisen which were impossible to segregate.
9829
-527-
Total production h< r grades
Tacle 5 shows". the course of domes-tic production of pig iron and its
distribution between the two princioal "'use 11 grades, i.e., steel making
and casting iron grades. The steel making grades include Bessemer and
low-phospherus iron. The casting grades include foundry, malleable, and
forge iron. It will be noted that the proportions have shifted from
approximately 80 per cent steel making grades and 20 per cent casting
grades, during the period 1920 to 1923, to over 05 .per cent and somewhat
less than 15 per cent, respectively, in recent years.
Irble 5. - Total domestic production of pi;
1920-1934* 1/ .
iron by grades,
'(
Total
In thousands of gro
3S tons)
: Steel
making
: Casting
: ' All :
: Steel
' making
! Per ce] &otaf
I ear
. Casting
r~KiT
grade s
rfades
other;
's grades
graa.es
Mother
1920
If 21
56,244 '
16,399
28,800 •
13,348
7 , 352
3,027
■ 92 :
■ 24 ■ :
: 79.5
: 81.4
20.3
18.5
: 0.2
: .1
: .3
: .3
: p
1922
26,825
21,654
5 , 100
■ 63 • :
: 80.7
: 19.0
1923
39 , 721
.1,473
8 ,147
101 :
: 79.2
20.5
1924
30,875
24,171
6,852
52 :
: 78.3
21.5
1925
36,116
29,087
6,978
51 :
: 80.5
19.3
r"i
1926
1927
1928 ;
1929
38,698
35,858
37,402
41,757
31,211
28,463
31,139
34,789
7 , 405
7 , 343
S , 221
6,927
62 :
47 :
42 :
41 :
: 80.7
: 79.4
: 83.3
19.1
20 5
16.6
16.6
.2
.1
.1
.1
.2
.2
.3
.1
• 1
1930
31,021
25,703
5,245
68 :
: 82.9
16.9
1931
17,958
14,810
3,116
32 :
: 82.5
17.5
1932
1933
8,550
13,001
7,295
11,426
1,556 !
22 :
19 :
: 85.3 :
: 87.9 ;
14.4 :
12,0 :
12.6 :
1934 1/
9,669
8,4-40 :
1,216
13 :
: 87.3 :
Merchan t -product ion b" grade s
Table 6 shows the distribution of merchant production of pig iron as
between steel making and casting grrde^. It 'ill be noted that approxim-
ately 70 per cent of the merchant oig iron outout consists of the casting
grades, - i.e„, foundry, malleable, and forge iron, - and approximately
30 per cen J consists of the steel making grades, - i.e., basic Bessemer
and low—phosphorus.
(*) Compiled from statistical reports of the American Iron and Steel
Institute,
(l/) lirst six months.
9829
-528-
Table 6. - Merchant production of pig iron by grades
1920-1934* 1/
(in thousands of gross tons)
Per cent
Year ;
Total "
, merchant
Steel
making
Casting"
AH : .
of total
: Steel :
Casting :
All
| production
grade s
grade s
other
: making
: grades
grades
other
1920
: 10,243
: 3,245
: 5,952
: 35 :
: 31.7
: 68.0
: 0,3
l c : '21
: 3,570
: 975
: 2,592
: 3 :
: 27.3
: 72.6
: .i
1922
: 6,232
: 1,687
: 4,534
: 11 :
: 27.1
: 72.7
: .2
: .1
: .1
: .1
: .3
• .1
.1
1923
: 10,106
: 2,877
: 7,218
: 11 :
: 28.5
: 71.4
1924
: . 8,058
: 2,226
: 5,828
: 4 :
: 27.6
: 72.3
1925
: : 8,587
: 2,510
: 6,069
: 8 :
: 29.2
: 70.7
1926
9,288
: 2,638
: 6,621
: 29 :
: 28.4
71.3
1927
: 8,978
: 2,425
: 6,545
: 8 :
: 27.0
• 72.9
1928
: 7,724
: 2,158
: 5,560
: 6 :
: 27.9
72.0
1929
: 9,014
2,737
' 6,274
: 3 :
: 30.4
' 69.6
2/
.6
1930
6,567
1,921
: 4,604
: . 42 :
: 29.3
70.1
1931
: 4,000
: 1,160
: 2,823
: 17 :
: 29.0
: 70.6
' .4
.9
1932
1,714
52b
: 1,173
: lb :
: 30.7
' 68.4
1933 : 2,068
1954 1/ 1,484
: 645
: 411
: 1,417
: 1,069
: 6 :
: 4 :
: 31.2
: 27.7
68.5
72.0
• -*
.3
.3
Importance of merchant
production
Table 7 shows the importance of domestic merchant pig iron output in
relation to the total domestic production of pig iron, and the importance
of the domestic output of the steel making and casting grades in relation
to 'the total domestic output of each of those grades. It will be noted
that the merchant furnaces have been responsible for approximately 90 per
.cent of the domestic outout of casting iron for more than a decade. In
contrast, less than 10 per cent of the steel making grades is produced in
merchant furnaces and this proportion reached its lowest point of approx-
imately 5 per cent in 1933 and 1934.
(*) Compiled from statistical reports' of the American Iron and Steel
Institute, page 6.
(l/) First six months.
(2/) Less than 0.1 per cent.
9829
„r ■-.(-!_
Table 7. - Ratio of merchant production to total output
of pig iron, by grades*
(Per ce nt)
Steel '
Year
: All grades
making ',
£rad.e s
Casting
grades' :
All other
1920
28.3
11.3
94.7
39.1
1921 :
21.8
7.3
85.6
12.5
K 22
23.2
7.8
: 38,3
17.5
1923
25.4 .
9.1
: 85,6
10.9
1924
26.1
9.2
: 87.6
7.7
1925
23 .8
8.6
: 87.0
15.7
1926
24.1
8.5
: 89.4
35.4
1927
25,0
0.5
: 89.1
17.0
1923
20.7
6.9
: 89.4
14.3
1929 .
clot
7.9
: 90.6
: 7.3
19 3D
.21.2
7.5
: 87.8
: • 61.8
1931
.22.5 ■
7.8
: 90.5
: 53.1
1932
20.0
: 7.2
: 95.1
: 68.2
1933
15.9
! .5.6
: 91.1
: ' 31.6
1934
: 15.4.
: 4.9
: 87.9
: 30 „ 8
Importance of merchant production in area of import
competition
The ratio of merchant production to^ total United States production
of pig iron declined from 21 per. cent in 1931 to 19 per cent in 1932, and
to 15 per cent in 1933,- but rose, to 17 per cent In 1934. In the States
in which the complainants are located, however, the ratio of merchant
production to total production was approximate ly 26 per cent in 1931 and
1932; it declined .to 23 per cent in 1933 and rose to 24 per cent in 1934.
The proportion of .the total merchant 'output produced in this area in-
creased from 53 per cent in 1931 to 59 per cent in 1934.
Table 8 compares the course of total domestic production of pig iron
and total merchant production with production in the area in which import
competition is encountered.
(*) Computed from, statistical reports of the Iron and Steel Institute.
9829
-530-
Table 8. - Comparison of merchant production with total production
of pig iron in the United States and in the producing
area of import competition*, 1931-1934
Period
Domestic pig
iron production
Total
Merchant
Production in
States in which
complainants are
located 1/
n otal
Merchant
Patio of merchant
to total
In
United
States
In States
in which
complain-
ants are
located
Ratio of
merchant
production
in States
in which
complain-
ants are
located to
total mer-
chant pro-
duction
Years
Thousands of f cross ton s
Per cent
1931
. 18,234
3,768
7,784
2,003
20.7
25.3
53.3
1932
: 8,66?
1,653
3,432
888
19.1
25.9
53.7
1933
13,229
1,995
5,492
1,255
15.1
22.4
61.8
1934
15,972
2,755
6,712
1,626
17.2
24.2 ■
59.0
Si:c months
periods
1931
First
11,096
2,186
• 4,805
1,094
19.7
: 22.8
50.1
Second
7,133
1,532
. 2,978
914
22.2
30. 7
57.3
1932
First
5,157
957
2,103
550
18.6
26.1
57.5
Second
3,510
696
1,329
338
19.3
25.4
48.6
1933
First
4,445
548
1,546
300
12.3
: 19.4
54.7
Second
8,784
1,447
3,946
933
16.5
23.6 !
64.5
1934
First
9,847
1,604
4,196 !
973 :
16.3 '
25.2
60.7
Second
6,125
1.151
2,516
653
18.8
26.2 :
56.7
(*) Compiled from reports published in Steel .
(if) Does not include production in Massachusetts,
figures for these States could not be se^re^f;
States not along the North Atlantic seaboard.
Massachusetts or Virginia have been in operat
quarter of 1931, however. Total Pennsylvania
although not all of it competes with imports.
Mar
ted
Ho
ion
pro
"land, and Virginia;
from those for other
blast furnaces in
since the second
duction is included,
9829
-531-
Exports of pig iron are small in comparison with either domestic
production or imports. For more than a decade exports Have not
amounted to as mucn as 1 percent of the annual domestic production
for sale except for the year 1928. Since 1928, exports have declined
steadily in ratio to production for sale in the United States.
Table 9. - Course of exports of pig iron, 1922-1934
Year
Quantity
Gross tons
1922
: 30 , 920
1923
32,318
1 9 ~ -~-
41 ,483
1925
3.3,674
■ 1926
25 , 208
1 327
50,99 2
1S28
84,662 .
1929
46,357
1950
13,671
1931
6,719
1932
■2 , 324
1933
2,750
1934 :
4,096
Value
$756,842
'862,443
957,921
724,565
523,833
1,028,425
: 1 ,336,794
830,225
291,683
150,658 '
53,966 ;
■ 63,985
• 97,060
Value
per ton
$24.48
26.69
23.09
22.18
20,78
20.17
15.79
17.91
21.34
23.42
23.23
23.27
23.69
Imports
Table 10 shows the course of imports of pig ir^n by important
countries during three pre-denression years and in 1932, 1933, and
1934. It will be ncted that imports from the Neth^^ 1 rnds amounted
to 54 percent -of the total auantity in 1934 as compared with 12
percent in 1925 and 16 percent in 1929. British India, tnroughout
this entire period, has been an important source of imports.
The unit values of imports from British India have been somewhat
lower than those of other important sources.
The sharp decline in the total quantity imported in 1927
reflects tie immediate effect of the change in duty resulting from
the Presidential procla.nation of that year.
9329
-532-
Table 10. - Imports of pig iron into the Unitec
principal countries
States by
11)35
1937
1929
1933
1934 1/
Quantity (tons) 2/
' 'United Kingdom.'
: 96,369
: 21,129
: 39 , 140
: 23,378
: 5,495
600
Canada
6 , 455 .
735
7,382
2,113
13,259
: 8 , 934
Brit if i India
184,325 ■
66,627
: 69,243
23,820
: 63,056
. 36,013
Netherlands
o4,904
29,380
24,189
74,372
. 68,341
. 61,939
All otlier
hountries
98,872
14,707
7,309
1,947
4,465
6,748
Total
441,425
132,563
147,763
130,630
153,596
. 114,284
Value
United Kingdom
1,926,275
;;406,0C3
; $676,247
$231,680
$64, i-; 1
$10,451
Canada.
142,419
13,166
■ 150,383
38,339
336,303
177,023
British India
3,020,816
1,002,070
956,685
254,093
389,705
333,142
Netherlands
1,033,686
535,454
435,782
748,564
701 , 546
332,747
All otlier
Countries
1,828,087
297,662
179,436
23,949
57,^-95
104,335
Total
7,951,283
2,254., 355
2,398,488.
1,301,625
1,439,306
1,457,703
Unit value :
/
United Kingdom :
$19,89
$19.22
$17.38 :
$9.91
|511.67
$17.42
Canada
22.06
18,16
30.36
13.14
18.45
19.71
British India :
16.39 :
. 15.04 .
13.83 ■
8.82
5.73
9.25
Netherlands
18.33 !
18.23
18.03 .
10.07
10.37
13.44
All other
ccun tries
18.49 :
20.24
22.98
14.87
12. 8J
15.46
Average :
18.01 :
17.01
16.33 :
9.96
9.07
12.75
Percent of total
quantity !
United Kingdom
31 . 9
15.9
26 . 5 :
17.9
3.5 :
0.5
Canada !
1.5
.5 •
5.0 :
1.6
7.7
7.9
Britis" . India :
41.8
50.3
46.8 :
22.1
42.9 «
31.5
Neth errands
12.4
22.2
16.4 :
56.9
43.1 :
54.2
AIL other i
countries
22.4
11.1
5.3 :
1.5
2.8
5.9
To tal
100.0
100.0
100.0 :
100.0
100.0
100.0
1_/ Imports for consumption.
2/ Tons of 2,240 pounds.
9329
-533-
By customs districts
Imports of pig iron are entered almost entirely along the Atlantic
seaboard north of Norfolk, Va. , and are centered in tne customs dis-
trict of Philadelphia which accounted for 58.3 percent cf the total
importation in 1933. An examination of imports by countries through
the various customs districts during the first six months of 1933, the
most recent period for which this information is available, indicates
that imports through Buffalo are entirely of Canadian origin and were
entered at unit values equal to or higher than tie domestic price of
merchant pig iron produced in that area. Table 11 shows the imports
of pig iron in 1933 by customs districts.
Table 11. - General imports of pig iron in
1933, by custom districts
Percent
District
Quantity
r of total
Gross tons
Total
158,596
100.0
Philadelphia
92,366
58.3
Massachusetts
10,335
6.5
Connecticut
10,049
6.3
Maryland
3,998
5.7
New York
7,732
4.9
Hhode Island
: 10,847
: 6.8
Buffalo •
2,749
1.7
All other
13,500
9.8
9829
-534-
ilatio of Imoorts to Production
Table 12 shows the course of the ratio of imports to domestic
production of pig iron since 1922, with respect to both total produc-
tion and production for sale.
Table 12. - Comparison of imports of pig iron with total
production, and production for sale, 1923 -
1934
Year
Production :
: Imports :
: Ratio of imports to
: production
Total
Fo r sal e :
only :
: Total
For sale
only
1923
1924
1925
1925
1927
1923
1929
1930
1931
1932
1953
1°34 1/
Thous?
39,721
30,875
36,116
38 , 698
35 , 853
37,402
41,757
31,021
17,958
8,550
13,001
9,669
mds of long
10,106 :
• 3,058 :
3 , 587 :
9,288 :
8,978 :
7 ,724 :
9,014 :
6,567 :
4,000 :
1,714 :
2,068 :
1,434 :
tons :
: 368 :
: 209 :
: 441 :
: 446 :
: 133 :
: 141 :
: 148 :
:• 137 :
: 84 :
: 131 :
: 159 ' :
: 65 :
: Perc
: . 93
: .68
: 1.22
: 1.15
•': . 37
: .38
: .35
': .44
: . 47
: 1 . 53
■: i . 22
: .67
;ent
3.64
2.59
5.14
4.30
1.48
1.82
1 . 64
2.09
2.11
7.62
7.69
-"■.S3
l/ First six months.
The production figures in Table 12 were obtained from the annual
reports of the American Iron and Steel Institute. Table 13 shows in
greater detail the course of the ratio of imports to total production,
to total merchant production, and to raercnant production in the area
in which the complainants operate. These data include some f erromanganese
and spiegel ei sen for which separate data are not available.
It will be noted that the ratio of imports to total production
exceeded 1 percent only in the years 1925 and 1926, immediately prior
to the increase in the tariff by Presidential proclamation, in 1932,
9829
-535-
tlie low point of the depression, and in 1933, tie first year of tie
recrv ^o^ram.
The ratio of imports to production for ~ule readied its first
peak of 6.1<? percent in 1935, after wnica it followed a downward trend
to 1.64 percent in 1939. It rose to approxi;nately 2 percent in 1950
anc
s , i ".^i
A sliarp increase in shipments 'from the Netherlands after
1931, arising from the 'special circumstances of sterling depreciation
an?, t. e British tariff, parelled by low domestic production, resulted
in an increase in tie ratio of imports to domestic merchant production
to 7.6 percent in 1933 and 1933, despite an increase of 31 percent in
domestic merchant output in the latter year.
In 1934 domestic merchant production increased while imports
declined and the ratio dropped to .-.beat 4 percent, as shown in
Table 13. In fact, 'the ratio by quarters during 1934 was lower than
in corresponding periods of 1933 or 1933. Roughly speaking, the same
trend appears from a comparison of imports with domestic merchant
production in the area of import compe tition.
9839
-536-
Table 13. - Ratio of imports to domestic production cf pig iron
(Quantities in thousands of gross tons)
:
. Fat
lo of imports to
Lod
: Domestic production 1 / :
production
Per:
:
: Merchant :
: i Is r chant
:
: Her -
: production :
: Imports:
: production
: Total
: chant
: in area of :
: import :
:conroetition2,/ :
: Total
:Mer-
: chan t
: in are?, cf
: import
: co'iroetitioii
.
:q
Percent
Year
:
: : :
1931
13 , 234
3,768
. 3/ 2,008 :
: 84 :
: 0.46
: 2.23
: 4.18
1932
:8,667
1,653
: 888 :
: 131 :
: 1.51
7.92
: 14.75
1933
J-O j&uJ
1,995
: 1,233 :
: 159 :
: 1.20
: 7.97
: 12.90
1934
15,972
2,755
: 1,626 :
: 114 :
: .71
: 4.14
: 7.01
Six-montlis
:
periods
:
: o
1931
- First
•.'11,096
2,166
3/ 1,094 :
: 56 :
: .50
2.56
5.12
Second
:7,138
1,582
914 :
: 28 :
: .39
1.77
: 3.06
1932-
• First
:5,157
957
550 :
: 75 :
: 1.45
7.84
13.64
Second
: 3,510
696
338 :
: 56 :
: 1.59
8.45
: 16.57
1933
- First
:4,445
548
300 :
: 63 :
: 1.42
11.50
21.00
Second
:S,784!
1,447
933 :
: 96
: 1.09
6.63
10.29 '
1934
- First
: 9,847.
1,604
973 :
: 65 :
: .66
4.05
6.68
Second
:6,125
1,151
653 :
: 49 :
: .80
4.26
7.50
Quarters
:
1931
- First
:5,452
1,050
2/ 474 :
: 22
: .40
2.09
4.64
Second
:5,644
1,136
2/ 620 :
: 34 :
: .60
t+j • Z/ •?
5.48
Third
:3,882:
928
521 :
: 14 :
: .36
1.51
2.69
Fourth
: 3,256:
654.
393 :
: 14 :
: .43
2.14
3.56
1932
- First
:2,891:
586
348 :
: 34 :
: 1.13
5.80
9.77
Second
:2,266:
371:
202 :
: 41 :
: 1.81
11.05
20.30
Third
: 1,692:
324
119 :
: 15 . :
: .89
4.63
13.60
Fourth.
:1,818:
372
219 :
: 41 :
: 2.26
11.02
13.72
1933
- First
: 1 , 650 :
240:
123 :
: 24 :
: 1.45
10.00
19.51
Second
:2,795:
308:
177 :
: 39 :
: 1.39
12.66
23. 03
Third
:5,138s
721
468 :
: 57 :
: 1.11
7.91
12.13
. Fourth
:3,646:
726:
465 :
: 39 : :
: 1.07
5.37
3.39
1934
- First
:4,120:
671:
426 :
: 43 :
: 1 .04
6 . 41
10.09
Second
:5,727:
933
547 :
: 23 :
: .38
2.36
4.02
Third
:3, 188:
632.
361
: 33 :
: 1.03
5.25 :
9.14
Fourth
1 & 1 i? o i ''
519.
292
: 16 $
: .54
3.03
5.48
1935
-January
: 1,476:
143
75 :
: 2 :
: .14:
1.40
3.67
1/ Co.
railed from repc
>rts put
dished in Stee
1.
2/ Production in Maryland not included because not separately available.
3/ Data, for the first six months of 1931 do not include small production
in Massachusetts and Virginia.. No blast furnaces nave operated in
taose States since that time.
9829
-537-
Table 14 shows the course of the ratio of imports to the combined
pig iron production cf the producers who have submitted data in
support of this complaint. It will be noted that this ratio was at
its highest point in the second quarter of 1533 - the three-months
period immediately preceding the promulgation of the code under which
these producers operate. Since the code has been in effect, the trend
of the ratio of imports to the combined output of these producers has
been generally downward.
Table 14. - Ratio. of imports to reported production
of complainants
Number of
: Ratio of imports
Period
companies
Reported
Imports :
: to reported
reporting
production
: production
G-ros
3 tons :
: Percent
Years
1929 :
9 :
1,700,540
:• 147,763 :
: 8.69
1931
: 7
. : 1,027, 562
:1/ 34,259 :
: 8.20
1932
: 5
403,292
: 130,53 :
: 31 . 97
1933
: 6
: 476,607
153,393 :
: 33.23
1934 2/
6
:• 536,478
97 , 905 :
: 18.24
Quarters
193-
First
4
113,949
: 33 , 932 :
: 28 . 53
Second
2
96,799
41,169 :
: 42.53
Third
2
90,623
15,121 :
: 16.69
Fourth
3
101,921
40,306 :
: 39 . 55
1933
First
. 2
42,628
24,140 :
: 48 . 64
Sec
2
65,923
33,551 :
: ' 58.47
Third :
6
159,272
56,572 :
: ■' 35.52
Fourth
6
201,779
39,130 :
: 19.39
1934
First
6 :
183,006 ;
43,337 :
: 23. 63
Second :
5
181,491
21 , 947 :
: 12.09
Third
5
171,931
32,621 :
: 18.97
1_/ Data from Tariff Commission; differs slightly from Department of
Commerce data which report 84,269 gross tons.
2/ First nine months.
9829
Effect of the National Recovery Program
Pertinent provisions of the code
The Code of Fair Competition of the Iron and Steel Industry, under
which the complainant producers are operating, contains the following
provisions which are pertinent to this complaint:
Labor provisions . - Article IV, Section 2, states that " *** except
in the case of executives, those employed in supervisory capacities and
in technical work and their respective staffs, and those employed in
emergency work, in so far as practicable and so long as employees
qualified for the work required shall be available in the respective
localities where such work shall be required *** none of the members of
the code shall cause or permit any employee to work at an average of more
than 40 hours per week in any six-months period or to work more than 48
hours or more than 6 days in any one week or more than 8 hours 'in any one
day. "
Section 5 of the same Article, and Schedule D, provide minimum
hourly wage rates for common laborers in 21 districts. These wages range
from 35 to 40 cents per hour, with the exception of: the Birmingham and
Southern districts, where, minimum wages of 2.7 and 25 cents, respectively,
are provided. Section 5 further provides for an immediate increase of 15
per cent in wages of laborers receiving more than the specified' minimum.
Basing point provision s. - Schedule E of the code provides that
prices of all iron and steel products, produced under the code shall be
quoted f.o.b. designated .basing points listed in Schedule F of the code.
The basing points which affect the marketing of pig iron are
located by States as follows: Massachusetts, 1; New Y ork, 2; Pennsyl-
vania, 7; Maryland, 1; Alabama, 1; Tennessee, 1; Ohio, 5; i'ichigan, 1;
Minnesota, 1; Illinois, 2; Utah, 1. In general, this represents little
change from the pre-code policy of quoting prices f.o.b. blast furnaces.
Price provisions . - Article VII and Schedule E of the code provide
that each member of the industry shall adhere to an open price policy by
maintaining on file with the Code Authority, a list showing the base
prices for all of its products, together with any discounts which may be
allowed. These prices are not to be changed except by filing a new list,
which shall be effective not less than ten days after the date of such
filing
Quoted prices are to be delivered prices which must not be less than
the sum of the published base price (f.o.b. basing point) and an amount
equal to the all-rail published freight tariff charges from the basing
point, to the place of delivery. If such place of delivery is at the
basing point, the published tariff switching charges to such place of
delivery must be added to the basing point price. If other all-rail
delivery is made, freight charges may be adjusted accordingly with the
prior consent of the Board of Directors.
9829
_ 3 I—
Violation of the provisions of this pricing -oolicy is chargeable
with a fine of $10 per ton of the product sold in violation. The
following proviso nay operate as an exception to the price provision:
"The Board of Directors by the affirmative vote of
three-fourths of the whole Board may permit any member of
the Code generally to sell or contract for the sale of any
product produced by such member or members at a base price
which snail be less than the then published base price of
such member or members for such product at the respective
basing points therefor of siich members, or at a delivered
price which shall be less than the delivered -price other-
wise chargeable under the provisions of this Section 4, if
by such vote such Board shall determine that the making of
such sale or contract of sale a.t such less base price or
less delivered price is in the interest of the Industry or
of any other branch of the industry and will not tend to
defeat the policy of Title I of the National Industrial
Recovery Act by making possible the using or employing of
an unfair practice."
Employment
Data supplied by the nine comolainants indicate that in 1929
approximately 2,000 workers were engaged in their blast furnace plants
and that the normal work day during that year consisted of 12 hours.
This cannot be considered =s representing total employment at any one
time, because the individual reports cover different periods. During
1933 and 1934, however, summarized data as supplied by the complainants
may be considered a.s representing the total employment in their blast
furnace plants. These data are shown in Table 15. It will be noted
that in July, 1937;, the month immediately following the passage of the
National Industrial Recovery Act, the number of workers was almost
double the employment in the preceding April; also that employment
apparently rose to a peak of 1,700 workers in January, 1934, but has
followed a downward trend since that time.
9829
-540-
Table 15. - Employment and activity in the production of pig
iron by the reporting complainants
1/
Number of com-
Nximber of companies
Payroll period -
Number of
panies reporting
reporting no
including 15th
employees
s ome
production
of -
employment
during period
1929 (aggregate)
l/ 7,901
9
1932
January
'329
3
5
April
359
1-
7
July
10
1
7
October
r
6
1933
January
460 '
4
7
April
506
4
7
July
1,007
6
3
October
1,220
6
3
1934
January
1 , 302
6
3
April
1,011
5.
4
July
1,297
6 .
4
October
829
5
6.
This total is arrived at by combining reports rf producers as of
different periods; it should not be considered as representing total
employment as of any one date.
Various data submitted by the complainants indicate that employment
in the pig iron industry was greatly affected by a., "spread the work"
policy on the part of the producers; that is, individual employees
worked only a few days during each payroll period, being replaced by
other employees in order to enable the workers to realize some earnings.
The data in hand are not sufficiently detailed, however, to measure the
extent to which this policy was followed. They do indicate, however,
that part-time employment during periods of operation has largely dis-
appeared in the pig iron industry under the code.
Earnin gs o f labo r
Apparent earnings of labor have not risen to the level of 1929 as
the result of compliance with the Iron and Steel Code. However, in that
year the normal work day was 12 hours in length, whereas the maximum
work day under the code is eight hours. Moreover, the work week in 1929
consisted of six, and in some cases, seven days, whereas at present the
maximum work week, with specific exceptions, is 40 hours. This will
explain the failure of average semi-monthly earnings of labor, as shown
in Table 16, to be as high as the level of 1929.
9829
-541-
The difference 'between the anrwrent weekly earnings in all re-porting
plants and those of northern plants exists by reason of the fact that
wages are normally lo^er in the Southern States, a condition which was
nerpetuated by a differential in minimum wages provided in the code.
Table 1^. - Course of semi-monthly earnings of labor
employed by reporting complainant producers
Number of
reporting
Average semi-
-monthly wages
Payroll neriod
All
Northern
including 15th of -
producers
producers
nroducers
1929 1/
9
$70.10
$72.74
1932 1/
5
42.95
47.93
1933
January
4
27.80
32.89
April
• ' 4
30.70
34.88
July
6
38.94
41.95
October
6
36.19
38.04
1934
January
6
37.27
39.38
April
5
39.18
42.54
July
6
41.13
43.82
October
5
44.47
48.07
\J Cannot be considered as representing any one specific payroll period;
available data relating to specific -oeriods are not adequate for
establishing any trend within the year.
Hourly wage rates
Data from which the course of hourly earnings of labor can be
estimated with any degree of satisfaction have been supplied for the
period 1929-1934 by only three northern producers. These ds,ta are
summarized in Table 17.. It will be noted that average wages paid by
these three producers increased from 36.5 cents per hour in July, 1933,
the month immediately preceding the adoption of the code, to 45.0 cents
in October, 1933; and that the general tendency continued upward through-
out 1934.
9829
Table 17. - Course of indicated hourly wage rates
Payroll 1
including
oeriod j
15th of - :
Number
of
report
produc
Lng:
3rs
Simole
average
wage
rates
:Average wage rates of
: producers who supnlied
:data for the entire
: neriod
: Cents
1929 1/
1932 T/
4
.3
■ 41.8
38.2
;
.44,9. . ..,
38. 2
1933
January
April
July
October
3
3
3
3
56.5
35. 8
36.5
45.0
•
36.5
35.8
36.5
45.0
1934
January
April
July
October
4
2/3
4
2/ 3
43.5
42.5
46.4
56.1
*•
45.7
45.1
49.6
65.6
1/ Cannot be considered as representing any one specific payroll period;
available data relating to specific neriod s are not adequate for
establishing any trend within the year.
2/ 31ast furnaces belonging to two of those producers were banked.
Costs of production
Data have been supnlied by only two producers, from which the
change in the cost of producing foundry pig iron since the passage of
the National Industrial Recovery Act can he estimated.. One company
supnlied costs applicable to the last six months of 1931 as corn-oared
with the period from September 1, 1933, to January 31, 1934. Data
submitted by 'this producer indicate that his total cost was only 5
per'cent higher during 1 the latter neriod than during 1931. This is
largely due to the fact that raw material costs were slightly lower'
during the latter period. Da.ta submitted by the other nroducer indicate
that raw material costs were 14.7 per cent nigher during June, July,
and August, 1934, than the average of the first six months of 1933,
and that total costs had increased by 17.4 ner cent.
Both producers indicate an increase of approximately 42 tier cent in
labor costs over those in effect under -ore-code conditions.
Raw materials costs . - Raw material for the manufacture of pig iron,
the cost of which amounts to about 80 per cent of total cost of pro-
duction, consists of iron ore, coke and crushed limestone. The following
9829
-543-
table shows the amount of each of these materials required to produce
one gross ton of nig iron.
Table 18. - domestic consumption of -principal raw
materials per gross ton of pig iron, 1933
C
onsumption per gross
Raw material
ton of pig iron l/
Gross tons
Iron ore
1.660 '.
Mill cinder, scale,
etc.
.217
Coke
.864
Limestone
.351
Total
3.092
TJ Computer 1 from American Iron and .Steel Institute,
Annual Statistical Report, 1933 .
Published reports in the leading periodicals of the iron and
steel industry indicate that the price of Lake Superior ore delivered
to lower Great Lake ports has not varied since March 22, 1929. Prices
of iron ore in the Birmingham district are not available.
Imports of iron ore are entered chiefly into Maryland from sources
controlled oy a major stee-I producer. The unit values 1 of entries through
other customs districts have varied widely and irregularly siiice the
beginning of 1933, apparently depending upon the analysis of the ore.
This renders impossible the establishment of a trend of unit values of
a specific grade of ore. Table 19 shows imports of iron ore in 1933
and 1934 by customs districts. '■ .
3829
344-
Table 19. - Imports of iron ore in 1933 and 1934 by customs
districts
• Total
Phila-
Hew
: All
Period
. imports
' Maryland : delphia
York
Buffalo
other
Quantity -
. ong tons
1933
July-September
376,332
372,994
746
40
-
2,542
October-December
343 , 527
292,890
49,337
66
-
1,244
1934
January-March
232,296
146,469
6,100
70,702
1,549
7,476
April-June :
517,870
427,707
6,800
75,669
6,864
830
July-September
426 , 798
'368,191
806
Value per
22,400
ten
35,237
114
1933
July-September
$2.23
$2.22
: $14.59
$33.22
; —
: $6.65
October-December
: 2.33
2.02
: 4.08
44.95
; —
3.89
1934
January-March
2.16
2.00
4.25
2.21
: S3. 39
3.10
April- June
2.27
2.17
2.94
2.40
5.55
4.38
July-September
2.55
2.30
11.70
2.04
5.30
9.74
Per (
:ent of tc
;al quant'
Lty
1933
July-September
100
99.1
0.2
negligible
0.7
October-December
100
85.3
14.4
Do.
—
.3
1934
January-Mar ch
100
63.1
3.6
30.4
0.7
3.2
April- June
100
82.6
1.3
14.6
1.3
.2
July-September
100
36.3
.2
5.2
3.3
Negli-
gible
The price of furnace coke at the ovens in Connellsville, Pa., as
reported in Iron Age, increased, from $1.75 per net ton during the first
five months of 1933 to *,3.85 during the last nine months of 1934, as
compared, with an average of $2.75 in 1929. The increase affects five of
the 12 complainant producers , inasmuch as they purchase this material.
Of the seven complainant producers who own and operate their own coke
ovens, five are either branches or subsidiaries of steel producers and
are not entirely dependent upon the sale of pig iron as an oixtlet for
their metallic product.
In 1933, the average consumption of coke per gross ton of pig iron
produced, in the United States was 0.864 gross ton, or approximately one
net ton. Although the yield of by-product coke in that year was only
68.97 per cent of the coal consumed (62.3 per cent in the case of
beehive coke) , the complainants owning their own coke ovens are able to
utilize gas which is produced in the coking process as fuel in the produc-
tion of pig iron; and a number of these producers normally sell their
-: 45-
excess gas to municipalities, tans recovering a portion of their- fuel
costs. One producer of pig iron also manufactures coal-tar products,
thus recovering a substantial -oortion of its cost in producing coke.
Data with respect to cost? of limestone used in the production of
pig iron are not available. 'Most iron and steel producers own their own
limestone quarries, thus obviating the necessity for purchasing this
material in an open market.
Prices ' ' : . . .
During the first three months of 1933, the Iron Age composite pig
iron price stood at $13-. 56 per: gross ton, the lowest'.average since the
World War. By June, 1933, this average., had increased to $15.01 and by
December of that year, -to $16 ..90; there was a further rise to $17.90 per
gross 'ton, the price which has prevailed sinqe April', 1934'. The increase
of $4.34 per gross ton -from .the low point in ] 1933 .'.Represented an advance
of 32'per cent. During the 'same period of tine, 'the price of No. 2
foundry pig iron delivered from eastern Pennsylvania furnaces to Phila-
delphia, the principal- center, of consumption. for merchant iron, rose from
$13.26 te~$20.26, or approximately 53 t per cent; and' the price of the
same grade of iron delivered from Birmingham, Ala.,' to the docks of
Philadelphia increased from $15 per ton to $19.38 per ton, or 32.5 per
cent. •
In 1934 the prices of ITo. 2 foundry iron quoted at points in eastern
Pennsylvania (3ethlehem, Birdsboron and Swede land), at Sparrows Point,
Md., and at Everett, Mass.,' with one .exception have been 'the highest
basing point prices for this 'grade of the commodity in the United States.
The same is true with- respect to prices quoted for'" the malleable grade
of pig iron, with the- exception of the fact that Sparrows Point, Md. is
not a basing point for this 'grade of. product. Moreover/ the delivered
price of pig iron in Boston,' Mass. ,. from Everett, Mass.,' a suburb of
Boston, where'- the plant of- one. of the complainants! is-- located, is the same
as the all-rail freight delivered price from Buffalo, IT. Y.
Table 20 compares delivered prices of domestic No. 2 foundry iron
at Philadelphia, the'prineipal market in the United States, with the
average landed cost of imports through that port for the years 1933 and
1934.
9829
-546-
Table 20; - Comparison of approximate landed costs of imports
with' domestic prices delivered at Philadelphia
Price of No.
2 foundry iron; :
Approximate landed cost of
delivered
from ; :
imports from-
Feriod
Eastern
Birmingham : :
The Nether- :
British
Pennsylvania Ala : :
land si/ :
India 1/
1933
: : :
January $13126-$15..7Si
' : $15.-15.25 :
14.88
$10.77
February
13.26-13,76 !
15-15.25 : '
14.98 1
9.59
March
13.26-13.76
15-15.25 :
15,91.
9.63
April
14.26
15-15*25 :
14.29
9.29
May
15.26 !
17-17.25 :
13.97
! 10i52
June
'16.26-16,76
17-17.25 :
14.58
10.13
July
'16.26-16,76
17 T 17.25 :
15,53
: 12.00
August
[17.26-17.76
18.12-18.37 :
' 14. G8
! 11.14
September
18.88 :
! 15.00
:' 12. 29
October
! 18.26
: 16.42
: 11.72
November
! 18.26
: 19.73
: 12.73
December '
i 19.26
! 18.88 :
: 17.10
: 13.39
1934
January !
19.26 !
18.88 ; :
14,49 !
13.41 .
February !
19.26
18.68 : :
20.70
14.52
March
19.26
18.68 : :
17.61
15.53
April
19.26
18.88 :
17.15
20.06
May-
20.26
19,88 :
18.77
15.71
June
20.26
19.88 :
19.00
15.47
July
20.26.
19.88 :
19.73
14.96
August
. .20.26
19.88 :
20.69
■ • 15.76
September
! 20.26
: 19,68 •• :
20.16
! 16.22
October
! 20,26
! 19.80 :
22.10
: 15.26
November
: 20.26
! 19.88 :
20.55
! 16.45
December
! 20.26
! 19.88 :
! —
: 16.14
1935
January
: 20,26
: 19.88 :
» — •—
: 18.58
1/ Unit value of imports plus duty at $1,125 per gross ton plus ocean
freight at conference contract rates; does not include handling costs
or importers' profits.
9829
-547-
From data shorn in Table 20, it mav be noted th.-^t the landed cost
of pig iron imported from the Netherlands, net including minor costs of
shipping and handling or importers' profit, was not greatly different
from domestic delivered prices during 1933 and errly 1934. Since
July, 1934, the landed cost of imports appears to have been somewhate
higher than domestic delivered prices of No. 2 foundry iron. It may
also be noted th^t the landed cost of imports from British India dur-
ing 1933 and the early part of 1934 was roughly $5 to $7 per ton
lower than tne domestic delivered prices for No. 2 foundry iron.
Since March, 1934, howevfr,tha landed cost of imports from British
India has been only $3 to $5 per ton lov;er than domestic delivered
prices.
. The Currency Situation
The exchange value of the florin in.ttrms^of dollars rose 69 per
cent from 40.27 cents in the first quarter of 1933- to 68.22 cents tn the
third quarter of 1934, whereas the average unit value of imports from
the Netherlands rise 56 per cent during the same period. Table 21
shows a. comparison of .the extent of the rise in the exchange value of
the florin and of the unit value 'of import s during 1933 and 1934.
Table 21. Comparison .of trend of unit value of imports from the
Netherlands with course of florin-dollar exchange
Unit value
Florin-:
Comparison with
Comparison
of imports
in
dollar :
exchange
first ouarter, 1933
of trade
Quarters
Unit
Florin-
jlorin-
Unit
dollars
in cents
value
dollar
dollar
value
per gross
per
of
exchange
exchange
of
ton
florin
imports
imports
1933
•
;
First
$9.80
40.27
100.0
loo. n
100.0
100.0
Second
9.21
45 e 97
94.0
114.1
, 100.0
82.4
Third
! ]/i.l9
57,15
104.0
141.9
100.0
73.3
Fourth
! 11.57
62.46
118.1
155.1 :
100.0
76.1
1934
First
: 12. 27
: 65.^5
125.2
163.0
100.0
76.8
Second
: 12.80
• 57.86
130.6
168.5
100.0
77.5
Third
: 15.31
: 68.22
156.2
169.4
■ 100.0
92.2
Fourth
: 15.63
: 1/87. 85
159.5
168.5
: 100.0
94.7
1/ Average for October and November used since no imports from the
Netherlands were entered in December.
The exchange value of the rupee in terms of dollars rose 45 per cent
from the first ouarter to the fourth quarter of 1933, whereas the average
unit value of pig iron imported from British India roseonly 18 per cent
during the same period. However, during 1934 the average unit value of
imports from British India ranged from 50 to 84 per cent higher than the
first quarter of 1933, whereas the exchange value of the rupee in terms
of dollars averaged somewh-t less than 50 per cent aDove the l>:vel for
that quarter. Table 22 shows a comparison of the unit value of imports
from British India with the exchange value of the rupee during 1933
and 1934.
9829
-548-
Table 22. - Comparison of tfendof unit value of imports from
British India with course of rupee-dollar exchange
Period
(quarters)
Unit value
of imports
in dollars
per gross
ton '
ffiupee-
rdollar
: :' Comparison with Comparison
: first quarter, 1933 of trends
: exchange : Uni t v alue
:incc ents : :' of
:per run ee: im ports
Rupee- :Eupee- : Unit- ■•
dollar : dollar : value
e xchange: exchange ;of import
1935
First
Second
Third
Fourth
1934
First
Second
Third
Fourtii
$5.47
4.81
5.02
6.45
25,50:
29.17:
34.50:
37.25:
100.0
87.9
110.0
117.9
8.24
38.05
: 150.5
10.07
38.33 ,
1G4.1
9 . 53
37.33
: 174. 2
9.86 .
: .37.27
! 180.3
100.0 : 100.0 : 100.0
113.6 : 100.0 : 77.4
134.7 : 100.0 : 31.7
145.1 : 100.0 : 01.3
143.2 : 100.0 : 101.5
149.3 : 100.0 : 123.3
147.3 : 100.0 : 118.3
145.1 : 100.0 : 124.2
c
c
9fi;
-549-..
APPENDIX A
The Industry in the Netherlands
Development of the Industry
The pig iron industry, in the Netherlands is an outgrowth of the
position of that country during the Uorld War, at which time ex-
treme difficulty was encountered in obtaining sufficient iron and
steel for its needs. The promotion of this industry was "begun in
1917, with the formation cf a "committee for the establishment of
blast furnaces, steel works, and rolling mills in the Netherlands."
The original capitalization was 25 million florins, of which the gov-
ernment subscribed 7| million. This was later increased to 35 million
florins, of which the city of Amsterdam subscribed 5 million. Oper-
ations were begun early in January, 1924. At the present time there
are three blast furnaces with total annual capacity of about 500,000
tons.
Sources of raw materials
The pig iron industry in the Netherlands obtains virtually its
entire stock of raw materials from foreign sources. .In 1933, im-
ports of iron ore into that country amounted to 459,000 metric tons,
of which Spain supplied 157,000, France 121; 000, Sweden 117,000, and
Algeria 49,000 tons. In addition, 379,000 metric tons of unroasted
iron pyrites (sulphide, ores) were imported chiefly from Spain, Italy,
Portugal, Greece, and Belgium and Luxemburg. This gra.de of- ore is
not economical in the production of pig iron alone, since the sul-
phur must be eliminated by roasting before the ore is smelted. The
sulphuric acid thus obtainable is important, however, in the produc-
tion of phosphoric acid of which the Netherlands is a substantial
exporter.
Coal is obtained from Germany, the United Kingdom, Belgium-
Luxemburg,' Poland and Danzig, Soviet Russia, and France. Limestone,
the flux, is obtained chiefly from the concessions in Belgium and
Luxemburg.
The fact that the Netherlands imports its iron ore from various
sources indicates the possibility of changing at minimum cost the grade
of iron produced to accomodate changing demands.
Location of the industry
The blast furnaces of the Netherlands are situated at the water's
edge in the city of Amsterdam. This location is stragetic because of
its accessibility for both ocean shipping and inland water transpor-
tation, which make possible virtual, if not complete, elimination of
overland freight costs. This constitutes a substantial oconomy in
costs of production and of marketing the product.
9829
-; du~
Production and exports
The output of -oig iron in the Netherlands in 1924, the first year
of production, was 91,100 metric tons. 3y 1927 the output was over
200,000 metric tons; and from 1928 to 1933, annual production was more
than 250,000 metric tons.
The pig iron industrj' of the Netherlands depends primarily upon
exDorts for the disposal of its metallic product. Table 1 shows the
ratio of total exports to the production of rug iron since 1925.
Table 1. - Production and exports of pig iron in the Netherlands,
in metric tons
Gross
Hatio of exports
Year
Production 1/
exoorts 2/
to production
1926
142,500
114,721
80.5
1927
203,700
149,633
73.5
1928
258,200
215,774
83.6
1929
253,800
179,276
70.6
1930
272,700
: 209,727
76.9
1931
256,717
222,857
86.8
1932
236,426 , ■■■
212,237
89.8
1933 :
252 , 645
, 238,807
94.5
.1/ American Iron'and Steel Institute, Annual Statistical Eeport,1933.
.2/ Netherlands foreign trade returns.
Transshipment constitutes an important but ' indeterminate element
in the exportation of ' pig iron from the Netherlands. In 1933, imports
of pig iron into the Netherlands amounted to 9,204 metric tons, where-
as exports during that year were 283,307 tons. Data from which the
consumption of imported pig iron in the Netherlands can be estimated
are not available. Since the average unit value of imnorts has been
considerably higher than thnt of either gross exports or net exports,
however, it appears reasonable to suppose that they have been entered
either for purposes of transshipment, or to satisfy a demand for iron
of special grades, or both. Inasmuch as the unit value of gross ex-
ports has exceeded that of net exports, however, the hypothesis of
transshipment appears to be the most reasonable one. This hypothesis
is strengthened by the fact that, since the industry is an importer
of iron ore, it should be in a position to produce the grades of iron
required in its domestic market.
9829
-551-
Table 2 -shows the quantity and unit value of exports, imports, and
net exports of pig iron from the ITetherlands since 1925.
[able 2, - Netherlands exnort-s and imports of pig iron,(*)
1926-1934-
Year
G-ro s s
Imports
Net
exports
• exports
Quantity - metric tens
1926
114,721
37,155
77,565
1927'
149,655
51,727
117,906
1928
215 , 774
35,628
180,146
1929
179,276
30 , 506
148,770
19c C
209,727
- 32,840
176,887
1951
222,857
16,228
206,629
1952
212,237
10,501
201,735
1933
238,807
. 9,204
229,603
1954 1/
183,312
8,748
174,564
Valu<
3 - -florins per metric 1>on
1926
40.44
52.88
34.45
192?
: 40.39
: 37.06
35.91
1928
: 40.83
54.24
38.24.
1929
: 41.54
55. r '3
38.78
1950
: 42.65
50.73
41.14
1931
: 34.68
: 46.17
33.77
1932
: 23.62
35.01
23.02
1933
: 21.47
43.07
20.61
1934 1/
21.37
: 53. £1
20.76
(*) Netherlands foreign trade returns
1/ January to October.
9829
-552-
E xport markets
The principal' market, for. Netherlands nig iron, in the collective
sense, is Europe.- The principal markets on, that continent in recent
years have been the customs union of Belgium and Luxemburg, and France,
while important secondary markets have included Sweden, Switzerland,
Italy, and a number of other European countries. The largest single
market at the present time, however, is the United States.
The rela.tive importance of the export markets for Netherlands oig
iron underwent a drastic change during the period 1931-1933. For
example, prior to the financial collapse in Europe in 1931, Germany
had been receiving approximately 14 per cent of these exports; in 1931
Germany's share wa,s 5.8 per cent and since that year that country has
imported no iletnerlands nig iron. With declines in other foreign
markets, the exoorts of Netherlands pig iron to the United Kingdom rose
from 28,000 metric tons in 1.930 to 64,000 tons in 1931, or from 13 to
over 28 per cent of the total exports. As a result of the depreciation
of sterling and' change "rom a duty of 10 per. cent to one of 33-1/3 ;oer
cent, exports of pig iron to the United Kingdom declined to .22,000 metric
tons in 1932, and to negligible quantities since that time.
. s
Meanwhile, total exoorts of ''pi, iron from the 'Netherlands were
210,000 metric' tons in 1930, 223JOO0 in 1931, 212,000 in 193.2,
239,000 in 1933, and 183,000 metric tons in the first tern months of 1934.
This has been due in great measure to increased exports to the United
States. In 1928 and 19?9, less than 13 -per cent of exports was con-
signed to this country; in 1932, 1933, and the first ten montns of
1934, more than 30 per. cent of the Netherlands exports of pig iron was
1 1 r
shipped to the United States.
Table 5 shows the coiirse of Netherlands exports of pig iron by
important countries, the relative importance of these exoort markets,
and .the annual average,, unit values of exoorts to these countries in
terms of Netherlands currency.' With respect to unit values it will
be noted that, although average values have declined greatly since
193.0, they have at all times been closely grouped.
9829
-55i -
Table 3. - "Jether lands exoorts of Dig iron, "by important
countries, 1928-1934.*
T QOQ
i
t
\
•
Country :
1929
1930
: 1931
1932
: _1933~
±3&2A..Xl
Average
Quantity -
metric tons
United States :
25,920
6,615
15,223'
• 67,089
74,613
58,728
Belgium-Luxemburg :
•49,698-
59,528
58,879
48,407
58,7-93
'42,244
France :
•35,272
24,358
16,942
19,435
■ 36,503
11,299
United Kingdom
21,052
27,810
63,934
22,421
600
8/
Germany
23,689
29,600
13 , C 10
15
-
2/ .
Sweden ':
9,378
23,715
21 , 140
■, 16,771
17 , 932
23,893
Italy ' :
8,861
■ 6,520
■ 6,825
5 , 647
, 3„219
5,081
Switzerland :
2,440
5,529
3,204
5,458
8,453
10,325
Denmark :
10,683
14,209
3,867
2,779
4,930
7,716
Canada
1,275
950
254
. . 58:1
.;-
2/ .
All other
'9,252:
: 10,895
21 , 579
23,627
28 , 764
24 , 031
Total
197.5C3:
: 209, 727
222,857
212,237
233,807
183,312
13.1
xJ • ft
D or cent (
if total
. 31.2
United States
5.9
31.6
32.1
Belgium-Luxemburg :
25.::
28.4
26.4
• 22.8
24.6
23.0
Prance
17.9
11.6
7.6
9.1
15.5
6.2
United Kingdom
10.6
13.3
23.7
10.6
.3
2/
Germany
12.0
14, 1
5.8
Negligible-
2/
Sweden
4.8
11.3
9.5
' 7.9
.7.5
13.0
Italy
4.5
3.1
3.1
2.7
3.4
2.8
Switzerland
1.2
2.6
1.5
2.6
3.5
5.6
Denmark
5.3
6.8
1.7
-L. <->
• 2.1
4.2
Canada
.7
. .4
• .1
.3
-
- 2/
All other
4.7
9.7
11.1
t 12.1.-
■ 13.1
Total
100.
100.0
10 0.0
. 100.0
: : .100.0
: 100.0
40.98-
Value— f
lorins pc
r metric
ton
: : 21.77
United States
• 45.70 •
32.48
24.44
: 21.18
3 e lgium- Luxemburg
40.56
41.33 ■
• 32; 79
22.43
: 21.52
: 21.00
France
40.59
: 43.77
32.59
: 22.59
20.76
: 21.42
United Kingdom
43.40
44.35
31.3:2
: 25.44
21.01
• 2/
Germany
: 41.41
: 43.72
: 36107
: 57.73
'
: 2/
19.63
Sweden
: 40.91
: 41.47
: 33.19
: 21.59
19.59
Italy
: 40.17
I 40.90
: 33.61
:'■' 22.82
: 21.41 ■
20.27
Switzerland
: 43.21
: 43.14
: 33.51
: 24.53
• 22. 12
27.41
Denmark
:' 40.93 '
: 42.54
: 33.04
23.57
2C.61
20.61
Canada
40.00
40.85
: 36.32
25.87
_
2/
25.88
All other
42.72
41.97 -
54.15 :
24.19 :
22. 74 :
Average :
41.13 :
42. 65 :
34.68 :
23. 62 :
21.47 :
21.32
Netherlands fo
1/ January- Octobe
2/ Exports, if an
reign trade returns.
r, inclusive.
y, were negligible, and are
included in "AH other. "
9329
-554-
E ffect of the currency situ ati on on costs of production
Adherence to the gold standard on the part of the Netherlands has
contributed materially to the lowering of the cost of producing pig iron
since 1931. This arises from the fact that raw materials are purchases
from, countries whose currencies have depreciated. Neither Spain nor
Sweden, the principal sources of hematite (oxide) ore, nor the United
Kingdom, an important source of coking coal, are on the gold standard;
and Gernany, the most important source of coal, is pursuing a policy of
stimulating exports by means of exchange manipulation. As a result,
from 1931 to 1933, the average unit va'lue of the net imports of hematite
ore declined from 10.37 to 6. '30 florins per metric ton ($4.17 to $2.56,
converted at par); iron pyrites (sulphide ore) from 11.29 to 9.00 florins
($4.54 to .$3.62), and coal from 11.88 to 6.14 florins ($4.78 to $2.47).
Although Belgium, the principal source of limestone, has remained on the
gold standard, the unit value of this imported material declined from
2.87 florins in 1931 to 1.91' florins in 1933 ($1. 15 to $0.77, converted
at par). The effect of these price changes on the raw material cost of
producing pig iron is estimated in Table 4. This estimate is based upon
the United States consumption! of iron' ore, ' coal* and limeston-e par gross
ton of pig iron in 1933, as indicated- in reports of' the American Iron and
Steel Institute. It does not include prices of mill cinder, scale, etc.,
which- are_ not available, The table indicates a decline of more than 40
per cent in the total cost of imported 1 raw ; materials, however.
• ( Table.. - Effect of declines in import values on the raw
material 'cost o'f producing pig iron in the Netherlands
Estimated
Unit
value • :
Approximate raw :
Raw
quantity !
• c
)f • :
material costs :
.•Percent
material
're qui red 'par
'metric ton 1/
imports
per ton 2,1 -
tdecline
.' 1931 '
: 1933
1931 :
1933 :
Metric tons
■FIoj
:ins
Hematite ore
1.633
10.37
:' 6.30
16.93
10.29 :
:39.2 ,
:48.3
Coal
.850
11.88
: 6.14
10.10
5.22 :
Limestone'
..345
: 2. 87
: 1.91 :
.99
. 56 :
:33.3
: Total
. 2-828
•
•
•
28.02
16.17 :
: 42.3
iy .U.S. quantities reported by American 'Iron and'Steel Institute, con,
verted to metric equivalents. " * :
2/ Computed from Netherlands foreign trade returns.
Other factors affecting costs of production •
. The possibility of recovering sulphuric acid' from the roasting of iron
pyrites is noted above 1 in the discussion-' of "Sources of raw materials, "
Although current data regarding costs of production in the Netherlands are
not available, it may be reasonably supposed that some degree of flexibility
in the allocation of costs of producing is possible in so. far as pyrites is
used. Coal, rather than coke, is imported into the Netherlands. This in-
dicates that the pig iron producer operates its own coke ovens in conjunc-
tion with its blast furnaces; it further indicates the possibility of
!829
-555-
recovering substantial costs of producing pig iron by producing coal-tar
derivatives which, are used in the chemical manufacturing industry. The
Netherlands is a substantial exporter of chemicals, paints, varnishes, and
fertilizers. ...
The Netherlands pig iron, industry supplies the city: of .Amsterdam
with fuel gas. Although that. practice is not uncommon in the United
States, wherever followed, it makes possible partial recovery of the
fuel cost of producing pig iron.
The location of the Netherlands blast furnaces with respect to deep
water is noted above in the discussion of "Location of the industry. "
The effectiveness -of this location is in sharp contrast .with the locations
of the blast furnaces in the United States; in this counjtry it is neces-
sary to transport either coal or iron ore, or the finished product rela-
tively long distances (usually overland), thus adding materially to. domes-
tic costs of producing or marketing iron and steel products.
Returns from exports
The 42 per cent decline in the purchase prices of raw materials
described above was instrumental in enabling the Netherlands pig iron
industry to reduce the unit value of exports by approximately 38 per cent
between 1931 and 1933 without great adverse effect on its profits. This
is especially true if, as is true of production costs in the United
States, between 75 and 80 per cent of the cost of producing pig iron is
in the cost of raw materials. Inasmuch as production was only approximate-
ly 4,000 metric tons less in 1933 than in 1951, it does not appear prob-
able that fixdd costs of production increased in substantial degree.
U nited States trade with the Netherlands
The United States normally enjoys substantial commodity trade with
the Netherlands, the balance of which is "favorable. " The commodity
trade of the United States with the Netherlands from 1926 to 1933 is
shown in Table 5. It may be noted that our "favorable" balance of trade
has declined from $61 million in 1927 to $18 million in 1933, and that
our exports declined by approximately $100 million during the same period.
9829
-556-
Table 5..- United States trade with the Netherlands, 1926-1933*
(in thousands o f dollars) ;
: Excess of
Year
Exports
Imports
: exports
1926
$135,795
$101,855
$33,940
1927
148 , 220
87,242
60,978
1928
142, 278
83,604
58,574
1929
128,295
83,853
44,442
1930
104,915
51,193
53,722
1931
: 65,590
: 34,952 ':
: * 30,638
1932
: 45-, 254 ■
22,430 :
: 22,824
1933
: 48,659
: 30,949 :
: 17,710
* U. S. Department of Commerce, ForeiCT, Commerce and Navigation of
the United States .
Iron and steel products . - The increase in United States imports of
pig iron from, the Netherlands since 1932 has been an important phase of
the search of that country for foreign markets for her output of pig iron
after the British tariff of 33-1/3 per cent against that commodity 'became
effective. In 1932 our imports of iron and steel products from the
Netherlands, which consist chiefly of pig iron, increased from $400,000
to $973,000, while our. exports to that country declined from $639,000 to
$359,000, thus changing our. "balance of trade with respect to iron and
steel products from a favorable one of $239,000 to an unfavorable one of
$614,000. In 1933 our exports to the Netherlands of iron and steel
products increased to $820,000, while our imports of this class of com-
modity declined to $832,000, thus producing an approximately even "balance
of trade in iron and steel commodities "between the two countries. Table
6 shows a comparison between our exports to and imports from the Nether-
lands in iron and steel products, excluding machinery and similar highly
advanced commodities, since 1925..
(
I
9829
-557-
Table 6. - Balance of trade with the Netherlands in iron and
steel manufactures*
(In thou sa nds of dollars)
Year :
Exports
1926
1 $972
1927
: • 891
1928 :
1,004
1929 ■!
1,362
1930-
: 980
1931
: 639
1932
359
1933 1/
: 820
Imports :
Excess
. £xpo rt s :
Imports
$2,134 :
$1,162
: 897 :
: _
6
: 1,068 :
: —
64
.738 :
: $624
:
: 354
: 626
: -
: 400
: 239
: -
: . . 973
: ; —
: 614
: 832
: ; —
: 12
*U. S. Department of Commerce, Foreign Commerce and Navigation of the
United States .
1/ Preliminary.
Importance of United States in Netherlands trade
The United States declined in importance as a market for Nether-
lands exports from 3.7 per cent of the total exports of that coimtry
in 1929 to 2.7 per cent in 1931, but rose to 3.6 per cent in 1932.
Similarly, the United States declined in importance as a source of
imports into the Netherlands from 9.9 per cent in 1929 to 6.7 per cent
in 1932. Similar data for 1933 are not available at this time. Table
7 shows the course of the trade of the Netherlands with the United States
from 1929 to 1932.
Table 7. ~ Importance of the United States to the Netherlands
in commodity trade*
(In millions of dollars)
Exports :
: Imports
To :
Ratio:
Erom :
Ratio
Year :
Total :
United :
to :
: Total
United
: to
States
total
States
total
: $790
: $29
:Per ceni
:: :
$109
Per cent
1929
: 3.7
: $1,106 :
: 9.9
1930
: 681
: 19
: 2.8
: 972
: 85'
: 8.7
1931
: 519
: 14
: 2.7
. : 760
59
: 7.8
1932
: 336
: 12
: 3.6
:: 522
: 34
: 6.7
1933 1/
*U.S. Department of Commerce, Foreign Commerce Year Book, 1933.
1_/ Not available.
9829
APFBVTIX
The Pig Iron Industry of Iritis]! India
History and ".resent capacity •
The pig iron industry of British India i in its modern sense, majr
be considered as -having developed since 1881, when the government took
over the pioneer plant of what 'is novr the Bo'ngal Iron £. Steel Co., and
put it on an operating "basic. :This plant was acquired by the present
organization in 1889, and operations continued until 1931.
The Tata Iron and Steel Co., Ltd., the largest producer of pig
iron in British India, was organized in 1907, began building its plant
in 1908, and beg n the production oi pig iron in December, 1911. Two
other producers, the Indian Iron & Steel Co., Ltd., and the Mysore Iron
Works, began operations in 1933. 'The latter producer is a small govern-
ment-owned plant which produces charcoal pig iron only.
The total pig iron capacity of British India in 1933 consisted of
13 blast furnaces with rated capacity of 1,730,000 gross tons per year.
Three small furnaces of this number are more or less obsolete, however,
and the capacity is not included in published estimates.
Location
The blast furnaces which produce about 99 per cent of the pig iron
output of British India are located in the midst of coal and high grade
iron are deposits of sufficiently abundant reserves to satisfy the needs
of the industry indefinitely. The -producers are located at such short
distances from active coal and iron mines and limestone' quarries xs to
incur minimum costs of transporting raw materials to their blast furnaces.
The industry has the further advantage of location within less than 200
miles from Calcutta, the' principal port of exportation. Moreover, the
same railroads which connect this "iron belt" with Calcutta connect it
directly with one of the principal iron and steel markets of the country.
grade from basic
to the rough e qui v-
G-rades'of pig iron produced
Coke pig iron produced in British India ranges i
and low-phosphorus iron, with hi ; _,h' manganese* content ,
alent of Ho. 2 or 2X foundry iron Which has a silicon content of approxi
mately'2.25 per cent. An' analysis of the various grades of Indian pig
iron reported by the Bureau of '"Foreign and Domestic C pmmerce indicates
that it is comparable in grade with most of the domestic product.
Production and exports . *
Prior to the beginning of operations in 1923 by the Indian Iron
& Steel 6o., pig iron output ranged from 300,000 to 350,000 gross tons
per year. Prom 1923 to 1926 total annual output ranged from 600,000 to
900,000 tons. Prom 1927 to 1931 the annual output of Indian iron was
9829
— . . . —
million tens but in 1932 reduction was slightly below that
over one million T-on^, uu.« ^»
level. More recent figures are not available
Table 1. Production and exerts of pig iron in
: • British India*
*" C*
• —
txpor
Ity . '•
Ratio to
Year :
Production
Quant
production
Per cent
16.0
1920 : :
Thousands
311 .
of i
tons
59 :
11B . :
183 :
341
382
309
393
449 .
568 .
439
350
1921
1922 :
369
340
*
34.7
29.4
1923
623
'• ;
39.1
1924
1925
1926
1927
1928
573
. eeo
902
: 1,140
: 1,052
• •
43.4
; 34.3
: 34.5
. 42.7
40.8
1929
: 1,392
: '•
37.4
1930
1931
: ■ 1,175
: . 1,058
: :
: 33.1
1932
: ■ 914
• •
i_— — —
JaP an is the chief foreign ■*£ %**£** TeZ^
receiving more than 50 per cent of the total _ xno ^
States is the second market in !*>?**»"; ^^ries since 1920.
of pig iron from British India by important countries
Bureau of Foreign and Domestic Commerce, TradeJnforHation
*U.S
Bulletin Fo . 815
1/ Fiscal year, 1929-32, etc.
9829
-560—
Table 2. Exports of pig iron from British Ihaia, 1921-1932*
( I n thou s ands of ^ross tons)
: Total
Exports
to -
Fiscal year
: exports
United
United
All
Japan
States
Kingdom
other
1921-22
: 59
58
1
1922-23
118
112:
3
-
3
1923-24
: 183 .
14|±,
24
3
12
1924-25
'34T
171'
134
■ 19
17
1925-25
382
-15 -8- -
155
20
38
1925-27
309
234
40
16
19
1927-28
393
271
65
' 21
35
1928-29
4^9 ;
. 353
5
39
1929-30
068
349
85
71
62
1930-31
439
150
108
• 99
72
1931-32
3o0
188
51
59
42
F.atio to total (per
cent)
1921-22
100
96;.31 :
„
1.69
1922-23
100
94.92 : 2.0^
-
2.54
1923-24
100
78.59 : 13.11
1.64
6.55
1924-^5
100
30.15 : 39.30
5.57
4.98
1925-26
100
43.98 : 40.84
5.2^t
9.94
1926-27
100
7D.73 : 12.94
5.18
6. Id
1927-28
100
68.95 : 16. o4
'O .34
9.16
1928t29
■100
7 C .52 : 11.58
1.11
8.69
1929v30
100
61.44 : U-..14
12.50 -
10.92
1930-31
100
36 '.45 : 24.60
22 . 5o
16.40
1931-32
100
53.72 : 14.57
19.71
12.00
*U.S. Bureau of Foreign and Domestic Commerce, Trade Information
Bulletin No. 815, 1933
9829
-
-'r^i e of ti.r United S t_at es with British India
Total. Table 3 indicates that commodity imports into the United
States from British India normally exceed commodity exrtorts to that
country. It will be noted that the commodity balance of trade declined
from -.95 million in 19 :8 to 8 million in 1933. Partly as a result rf
tne continued declim in our exports to British India and partly because
of incre; sed imoorts from that country, the "unf, vor-.ole" balance of
trade increased to million in 1933- Invoorts in 1933 were smaller,
v-r, than in 1931; on the other hand exports in 1933 were only
slightly more than 50 oer cent of the 1931 exports to British India,
•is a result tne 'unfavorable" balance of tr';df in 2 933 was slightly
aser than that of 1931.
Table 3. Trade with British India, 1936-1933*
( I n thousand dollars)
excess of
Year
exports
Imoorts
imports
1925
00,013
;p 150, 930
$100,917
19 -?
53,397
131,00;
57,708
19. '3
53 , 594
148,9;
95,238
1
5c ,359
149,332
93,973
1930
45,195
104,1 E
58,953
19 :
,598
£.8,5 '1 :
2U823
19; .
24, -dL'
33 . 30
8,289
19."
19,858
•*3,759
13,901
*U.S. Department of Commerce - For^ i^:n Commerce
of tne United Stat-s.
avigation
- -3-
-552-
Iron and steel tr fi.d e. In contrast with our "unf avorable" balance
of tptal commodity trr.de with British Indi-^, trie United States enjoys
a decidedly "favorable" balance of tr^de in iron and steel. .T^ble 4,
which snows tae trade between tnese two countries in iron and steel
manufactures, shows a recline in this balance from i4 million in 1926
to 390,000 in 1933.
Table 4. Balance of trade with Britisn India in iron
and steel manufactures*
Year
(Thous nds of dollars)
Exports
1926
5,438
1937
4,685
1928
4.301
1929
3,986
1930
3.593
1931
l,P n 5
1932
73c
1953 1/
782
Imports'
Excess of
-xports
1,423
4,015
1,011
3,674
777
, .-■
858
3,028
1,811
2,43-!
597
1 , 209
2 bo
479
392
590
Importance of tne United Stales in Britisn Indian trade . The
importance of the United States as a source of imports into British
India increased from 7.3 per cent in 1929 to 10.3 per cent in 1931,
but declined to 8.5 ner cent in 1933. At the same time, our importance
as a market for exports from British India declined from 12.0 -per cent
of total exports from that country in 1929 to 7.6 per cent in 1933.
Data for 1933 are not available. Table 5 snows the course of the
trade of British India with United States since 1928.
(
*U.S. Department of Commerce
of the United States.
- Fore ign Commerc e a nd Navigation
!_/ Preliminary.
9 329
-56C
Table j. InnDortai.ee to 3ritish India of United States trade*
C Tnousaiids of dollars
Year
1929
1930
1931
1932
193? 1/
SxDorts '
Inroorts
To
P.atio :
From
Hatio
: Total
United
to :
: Total
United
to
States
total :
States
total
Per c^nt :
Per cent
: $1,174
141
12.0 :
: o907
;se
7.3
: 919
90
9 8 ;
: 574
55
8.2
: 566
50
Q.O :
: 464
48
10.3
: 355
27
7.5 :
: 3o2
30
8.o
*U.S Department of Commerce - Foreign Commerce Yearoook - 1933
1_/ Not available.-
9 829
~5S4~
NEWSPRINT (No. 13)
9829
-565-
C0NT2NTS
Page
567
Complainant's Status Under the NIEA
Subject of Complaint 567
Descrintion of commodity *.*.•••. 567
Tariff treatment. . ..... ... .....' 568 -
The Newsprint Industry in the United States 568 '•■
Zmoloyment , payroll and working hours, 568 .
Number and capacity of mills 569 •••
Principal producers in the United States.. 570 o
Relative consumption of domestic and imported woodrulp 570
The Newsprint Industry in Canada .. .. •• .-.' 572
Number and Rapacity of mills 572
Principal Canadian producers .••••• '••'•' 572
United States investment in and control of the Canadian
Newsprint Industry 572
Consunrotion of Newsprint Paper in the United States 572
Proportion of world production consumed in the
United States 573
Growth of consumption by publishers. .... 573
Trend of consumption and stocks 573
Consumption by states 574
Source of newsprint consumed in the United States. 574.
World Production of Newsr;i - nt Paper'. 57$ -
Changes in distribution cC world production, 1939 - 1932 57$
Course of Newsprint Production in the United States 575-
Newsprint Production by States,'.' ......' 578
Comparison of production in the United States and Canada 578
Exports v.V.Y.V .'..'. V.7.V 580
Exoorts from orincipal oroducing countries...... .•.•...•...'•.. 58P
Exoorts from Canada tc the United' States 580
Exports from the United States . . . 58?.
Inmorts into the United States '...'.. 582
Course cf total imports. .<.•;."; ; : '. '. '..'. 582
Imports by countries.,...-....;....' 582
Ratio of Imports t^ Comestic oroducti^n 534
Effect of the NIRA ■.;•. .-.'.' ...'.'.. .'.'.* ■. 546
Employment and payroll. . .-••••. .'.'. .'.".' 586
Costs of production. , < • 586
Imoortant Competitive Factors 5Q.'
Trend of newsprint prices in relation tc the general
orice level • 539
Comparison of average import Values with domestic prices 589
Trend of import values and exchange rates 591
Proposed Cooperation Between 'the "Co'de 'Authority of the
Newsprint Industry in the United States and the Newsprint
Export Manufacturers Association of Canada. 593
9829
' -boe-
I1TPEX OF TABLES
Table Page
Unrobe r lumber
1 Number of emoloyees and payroll.................. 563
2 Number of machines and rated' capacity 569
3 Proportion of United States woodpulp
cons\urroti6n stTODiied. "by imoorts 571
4- United States share of world newg-orint
consumption. 573
5 Consunrotion and stocks of n°- r s;orint in
' the United States 574
6 Sources of newsprint c">nsum=d in the.
United States '. . . . 575
7 World m^cuiction of n°wsr>rint paper "by
iirroortant countries, 1929 and 193? 576
8 United States production, ISgQ - 1933..... 576
9 Conroarison of an index of newg-nrint produc-
tion with the general manufacturing index........ 577
10 Newsprint -oroduetion by state:;, 578
11 Production by United States and Canada with
percentage of total -produced by °ach country
annually," . 1913 - 1933 579
12 , i Total exoorts, and exports to the United
Stat°s, in relation to production by
principal "oroducing countries, 1929. 580
13 Percentage of Canadian -oroduetion exnorted
•■■to the United States, 1921- 1933 581
14 Ratio of United States exports to nroduction
' 1929 - 1933. 581
15 Imoorts of standard. newsprint nauer, 1929 -
March', 1934. . . ' ...... 582
16 . General imoorts, 1929 - March/' 1934 .' 583
17 ., Ratio, of inroorts to domestic -oroduetion 584
18 Weighted cost of newsprint -np^er n°r ton in
. Canada and the United States, 1933. 587
19 Cost changes under U.R.A. ■Cod' 3 588
20 . Conroarison of tr°nd of prices; nf w^sinrint
paper with trend in general wholesale price
■ index and index of -D^ner and pulo prices 589
21 Conroarison of average, import values with
domestic -nrices, 1929 - 1933. ■
22 Conroarison of trends of inroort values and
exchange rates, 1929 - March, 1934 592
p;
90
9829
-567-
SURV^Y OF INFORMATION
ON
STANDARD NEWSPRINT PAPFR
May, 1934.
Complainant ' s Status Under the National
Industrial Recovery Act
This is a report on a complaint filed January 17, 1934, by the
Cod" Authority of th<= lTew S -orint Industry with the Imports Division of
th° National Industrial Recovery Administration, pursuant to Section
3 (e) of Title I of the Recovery Act. The complainant Code Authority
represents the entire newsprint industry in the United States, Hiich
is composed of twenty-five member companies operating principally in
the states of Maine, Now York, Oregon, Minnesota, Wisconsin and
Washington, and involving an estimated aggregate capital investment of
about 300 million dollars. Most of these companies manufacture news-
print paper only, including the wood oulp from which it is made;
however a few, chiefly the larger .concerns, also manufacture a wide
variety of -paper and paper products.
The news-print industry is operating under the Code of Pair
Competition for the N^wg-orint Industry, approved- -by the President on
November 17, 1933. The Cod" Authority states that all of the news-
print producers in th° United States have complied with the provisions
of Title I of: the National Industrial Recovery Act. They have supplied
information as outlined in the -prescribed Rules and Regulations
Governing Complaints, and have agreed to furnish to the National
Industrial Recovery Administration and/or th<= United States Tariff
Commission, ah:/ further information which may b Q necessary in completing
the action requested in their -petition.
Subject of Complaint and Tariff Treatment :
Description of commodity ' -
Newsprint -paper, designed for use in the -printing of regularly
-published news-pa.pers, is ^6.°. -principally from woodpulp and is composed
of apnroximately 75 to 80 -percent of the short fibre ground-wood pulp
and 20 to 25 -percent of th D long fibr° sulphite -pulp. Woodoulp, in
turn, is made chiefly from s-oruce timber and to some extent from hem-
lock and fir. Experiments in recent years have resulted in the
development of methods by which other species of timber, notably
yellow pin o „ may in the future "be converted into pulp suitable for
newsprint.
9829
-»568-»
Tariff treatment
Standard newsprint paper is imported into the United States free
of duty under Paragraph 1772 of the Tariff Act of 1930, and ^as also
imported free of duty und°r the Tariff Act of 1922.
Printing paper valued not above 2t? cents per pound was free of
duty in the Act of 1913; that valued at not above 5 cents per pound
remained free in the Revenue Act of Sept°mber 8, 1916; and that not
a"bove 8 cents o°r pound in the Act of April 23, 1920.
The Newsprint Industry in the United States
Employment, payroll, and wording hour s
As shown in Table 1, employment and the average annual earnings
per worker in the newsprint industry declined 27 and 28 percent
respectively from 1928 to Jun<=, 1933, while total payroll declined 47
percent.
Table 1. Number of employees and payroll
Year
Number of
emoloyees
payroll
Total
! Average per
worker
Thousands
1928
1930 :
1932
1933 (June)
8,960
8,340
6,790
6,560
$13,500
12,750
7,850
7,150 U
$1 , 510
1,530
1,155
1,090 1/
Percentage
decline
1928 - 1933
?lfo
47$
*>8$
l/ On annual basis
A large proportion of the employees in n a ^sprint mills work on a
tour' system, i.e., three tours of 8 hours each for continuous operation.
Prior to the adoption of the code some of the employees not directly
connected "ith the paper machines worked as much as 10 hours p°r day;
however, most of them were on an 8 hour day "basis. In recent years
also most newsprint mills have operated only about 80 percent full
time - from 38 to 39 hours out of a maximum 48 hour week - and some of
them have operated even a smaller percent of full time.
9829
-569-
The Code for the Newsprint Industry provided for a 40-hour week,
averaged over a 13-week period, with a. limitation on day workers of
48 hours in a single wo°k, with tine and one-third for hours worked in
excess of 8 in a single day. Provision is also made for additional
hours for tour workers who desire to he free to exchange shifts to
meet situations such as the changing of wires and washing and cleaning
of machines after a run. Such work is too small in amount and to
irregular to justify the employment of an additional shift.
Employees not engaged directly in production, of whom there are
only a few in each plant, are on a 42-hour "basis averaged over a 4-week
period. Watchmen may work 56 hours per week and office employees 40
hours per week averaged over a year, hut not more than an average of
48 hours per week in any quarter. In emergency cases restrictions
are removed for employees engaged in repair and maintenance work.
A comoarison of the provisions of the code regarding working
hours with the actual conditions of employment which prevailed
prior to the adoption of the code indicates that the code probably
has had little effect upon employment in the newsprint industry.
Number and capacity of mills
The number of companies producing newsprint paper in the United
States declined from 39 in 1929 to ah out 27 in 1933, and the number
of mills declin°d from ahout 60 to ahout 40.
From Table 2 it appears that, while there we're 40 .less machines
in operation in 1932 than in 1927, the rated capacity in the industry
remained practically stationary, indicating the installation of new
machines or the modernization of old ones. However, the Newsprint
Association states that whereas 354,000 tons of annual capacity have
heen withdrawn by nine companies since 1929, only 113,000 tons of
annual capacity ^ere added by t^o companies.
Table 2. Number of machines and rated capacity
Year !
Number of !
machines !
Capacity in short tons
P°r day of !
Per year of
24 hours
310 davs
Thousands
1925
146
5, 721
1,774
1927
156
6,349
1,968
:i928
141
: 6,101
1,891
1929
127
: 5,468
: 1,695
1930
: 121
: 5, 523
! 1,712
1931
: 105
: 5,279
! 1,636
1932
: 116
: 5,630
: 1,745
qp--i
-570-
Princioal producers in the United States;
Over 50 percent of the productive capacity Of the news-print indus-
try in the United States is controlled "by three' companies. The largest
of these companies is the International Paper . Company, of New York,
which, in addition to its holdings in Canada, - operates ten mills in
the United States with a combined rated daily capacity of, 1,360 tons,
or approximately 23 percent of the United States capacity in 1932.
The second largest -producing company is the Great Northern Paper Compan ~,
of Hillinocket, Maine, ?/hich owns and operates three mills with a com-
bined rated daily capacit?/ of 1,010 tons,;, or approximately 17 percent
of the United States daily capacity in 1932. The third largest company
is the Croi.m Zeller.oach Corporation, of San IVancisco, California, a holding
company which owns or controls three mills' in Oregon and Washington,
with a combined rated daily capacity of 840 tons, or aoproximat ely 14
percent of the domestic newsprint capacity.
.Relative consumption of domestic and imported wood-pulp
ce woodpulp is used in the manufacture of products other than
, it is impossible to determine exactly to what extent the domes-
Sin
newsprint
tic industry depends upon foreign sources of supply. Table 3 shows the
-proportion of total United States, consumption f woodpulp of all types,
of sulphite, and of mechanically ground pulp, which is supplied by imports
('
It will be noted that the proportion of woodpulp consumption of
all kinds supplied by imports increased sharplv from 15 to 28 percent
from 1919 to 1926; it remained practically stationary at about 28
percent from 1926 to 1932; and increased to 32, percent in 1933.
i
9829
-571-
Tatile 3. Proportion of United States wood-pulp
consumption supplied "by imports
(Thousands of she
>rt tons)
Ratio of
Period
Apparent :
consumption :
Production :
Imports .
Exports :
imports to
apparent
consumption
Percent
All kinds :
1909
2,791 :
2,496 :
307 1/
12 1/ :
11.0
1919
4,114 :
3,518 :
636 " !
40
15.5
1926 :
6,094 :
4,395
1,734
34
! 28.4
1929 !
6,695 !
4,863
1,886
! 54
28.2
1930
6,414 :
4,630 :
1,832 !
48
: 28.6
1931 !
5,952 :
4,409
1,596
53
: 26.8
1932 !
5,194 ■
3,760
1,482
48
28.5
|1933
6,002 :
4,160
1,921
79
32.0
Sulphite
1909
• « • •
1,018 : 2/ ■
i i/
• • • •
1919
• • • •
1,420
283 '
1 2/ '
• • • •
1926
2,570 !
1,558
1,035
: 23
! 40.3
1929
2,798 :
1,682
1,160 '
! 44
! 41.5
1930
2,639 x
1,567
1,107
: 35
: 41.9
1931
! 2,330 !
1,417
963
! 50
: 41.3
1932
: 2,017
1,146
: 917
: 46
1 45.5
1933
! 2,452
1,360
1,169
! 77
: 47.7
Mechanically
ground
1909
: 1,309
1,179
: 130 1/
\ 3/
: 9.9
1919
! 1,721
1,519
: 202 "
: 2/
: 11.7
1926
: 2,068
: 1,764
: 304
: 3/
: 14.7
1929
: 1,910
: 1,637
: 273
' 3/
: 14.3
1930
: 1,859
; 1,560
: 299
: 3/
: 16.1
1931
: 1,659
! 1 , 449
: 210
I 3/
: 12.6
1932
: 1,391
! 1,203
: 188
1 3/
: 13.5
1933
: 1,410
: 1 , 200
: 210
1 3/
: 14.9
1/ Fiscal years.
2/ Not Available.
3/ Negligible.
-572-
Of the total consumption of woodpulo in the United States 40 percent
is sulphite, and, as shown in the preceding table, over 40 percent of this
is imported from abroad. The proportion imported increased from about
41 percent in the years 1929 to 1931 to 45.5 percent in 1932 and to 47.7
percent in 1933, The annual consumption of mechanically ground pulp in
recent years has amounted to between 25- and 30 percent of total woodpulp
consumption, and as shown in the above table, somewhat less than 15 per-
cent of this, on the average, is imported from abroad.
The Newsprint Industry i,n Canada
Number and capacity of mills
The Canadian newsprint industry consists of about 30 companies oper-
ating about 40 mills which are equiped with about 150 Fourdrinier machines.
The dail" r capacity of the Canadian industry increased from 2,630 tons
in 1920 to 12,940 tons in 1932, an increase of 492 percent.
Principal Can a dian producers
Approximately 50 percent of the total capacity of the Canadian news-
print industry is controlled by three: companies. The largest of these,
the Abltibi Power and Paper Company, operates eight mills with a combined
daily capacity of about 2,000 tons. 'The second largest company, the
International Paper Company, controls three mills in Canada with a com-
bined daily capacity of 1,970 tons. :The third largest company is the
Consolidated Paper Corporation, which controls five mills, having a
daily capacity of 1,950 tons. :
United States investment in and con t rol of the Canadian Newsprin t ;
Industry
Al though no estimate i^> available as to the amoiint of United States
capital invested in the Canadian newsprint industry alone, the Depart-
ment of Commerce has estimated that. the investment of the United States
capital in the Canadian paper and pulp industry as a whole amounted, in
1930, to over 400 million dollars, which is more. than 50 percent of the
794 million dollar capital investment in th t industry.
Approximately 35 percent of the Canadian newsprint capacity is con-
trolled either by United States corporations or. by corporations operat-
ing both in the United States and Canada, In addition to controlling
about 37 percent of the capacity of the newsprint industry in the United
States, The Crown Zellerba.cn Corporation "and the International Paper
Company operates four mills in Canada, having a daily capacity of 2,270
tons, or approximately 18 percent of the total capacity of the Canadian
industry. Six other Canadian mills, which have a daily capacity of about
2,250 tons, or approximately 17 percent of the total Canadian newsprint
capacity, are owned or controlled by United States corporations.
Consumption of Newsprint Paper in the United States
Proportion' of world production consumed in the United States
9829'.'
-573-
From Table 4 it will be noted th t- prior to 1°32 about 50 percent of
the world -oroduction of newsprint was consumed in the United States; in
that year the proportion dropped to 44 percent.
Table 4. United States share of world
newsprint consumption
Percent of
world production
Year !
Uo rid
United States
! consumed : in the
■oroduction
consumption
United States
! (in thousand snort -SoiiQ) :
: sv .l-i ;
1929 !
I 7,308
! 3,794'
: 52 •
1930 !
6,975
: , 3,652'
: • 51 :
1931
: 6, .622 . :
! 3 , 214
: 49 :
1932 !
: 6,275
: 2,791
! ■■ 44 :
Growth of consumption ."by publishers
The rapid development of the newsprint paper manufacturing industr" and
the correspondingly rapid growth of the newspaper publishing industry have
"been interdependent. The rapidity of expansion in these two industries,
following the first use of vroodpulp in the manufacture of paper is indi-
cated by the increase in the number and circulation of newspapers. In
1860 there were only 387 daily papers, with a total circulation of approx-
imately 1,500,000 and about 3,000 weekly papers, with a circulation of
about 7,500,000. In 1914 there were 2,500 daily and Sunday papers and
about 14,000 weekly and semi-weekly newspapers in the United States,
'The daily papers had a circulation of about 30 million copies, the Sunday
papers about 17 million and the weekly and semi-weekly papers about 24
million, in 1927 there were 2,265 daily newspapers with a gross cir-
culation of 42 millions, 7,760 weekly newspapers with a circulation of
about 56 million, and 511 Sunday newspapers with a circuit ion of 27,-
700,000.
In addition to the increase in the number of papers and in the cir-
culation per issue, it is important to note the growth in size from the
small four page paper of the early days to the not uncommonly large
sized daily paper of 50 to K pages. In fact, there are now many daily
papers which run well over 100 pages.
Trend of consumption and stocks
The table below shows the trend of total consumption, consumption
by publishers, and of stocks at mills, in the United States in recent
years. It will be noted that total consumption declined 24 percent from
the 1926—1929 average to 1933. Stocks at mills and total stocks de-
clined 15 and 17 percent respectively. The significant fact is that
consumption has declined to a greater extent than stocks, indicating a
relative increase in the latter in 1933 as compared to former years.
9829
-574-
Table 5. Consumption and stocks of newsprint in the
United States
Statistical
Period
Total
consumption
Stocks at end of month
At mills
At mills, at
publishers
and in transit
In : thousand short tons:
Annual average:
1926 - 1929
1930
1931
1932
1933
Percentage
decrease from!
1926-1929
average tol933
3,582
512
3,552
333
3,214
: 399
2,791
398
2,729
255
3,084
3,399
2,223
2,940
2,567
di
2A%
18 } o
175t
P
Consumption bv States
For 1928, the latest year' for which. data are available, . the distri-
bution of ner/sprint consumption among leading states was as follows:
Hew York 22 per cent, Illinois 12 per cent, Pennsylvania 9 percent
Massachusetts 6 percent, California 6 percent, Ohio 5 percent,' Mich-
igan 5 percent, Missouri 4 percent, Tennessee 3 per cent, Minnesota <2
per cent, Indiana 2 percent, Texas 2 per cent. The consumption in this
group of 12 states amounted .to ovor 75 per cent of the total con-
sumption in the United States. Although the total consumption of news-
print paper in 1933 was less than that of 1926, it is probable that the
percentage relations have not greatly changed.
Source of newsprint consumed in the United State s
Approximately 35 percent of the newsprint, consumed in the United
States is supplied by the .domestic industry; roughly 66' percent is
supplied by imports from Canada, Newfoundland and Labrador; the remain-
ing 5 percent is supplied chiefly by Sweden and Finland. Table 6
shows the sources from which the newsprint consumed in the United States
is drawn, in quantity and in percentages for the years 1923 to 1933.
9829
-575-
Year
1923
1925
1927
1929
1930'
1931
1932
1933
1923
1925
1927
1929
1930
1931
1932
1933
Table 6. Sources of newsprint consumed in the United
States, 1923 - 1933
(Thousand short tons)
United
States
consumption
2,778
955.
3,461
3,794
3,552
5,214
2,791
*t
729
United
States
prrduction
1,485
1,530
1,436
1,392
1,232
1,157
1,007
• 946
Imports
from Canada
Newfoundland
and Labrador
1,108
1,315
1,865
2,327
2,145
1,915
1,647
1,640
100
100
100
100
100
100
100
100
Percentage distribution \
53.4
51.8
42.9
36.7
36.1
36.0
36.0
34.7
39.9
44.5
53.9
61.3
5916
59.0
6C.0
Imports
from all
other
countries
200
133
122
96
135
151
145
154
7.2
4.5
3.5
2.5
3.8
4.7
5.2
5.6
World Production in Newsprint Paper
Changes in distributions of world production 1S29 - 1932
Table 7 indicates the distribution of world production of newsprint
paper among the principal producing countries in 1929 and 1932, and the
significant changes which have occurred in the intervening period.- For
example, the decline of 14 per cent in total world production was due chie-
fly to the sharp decline in Canada, the United States, and Germany* Pro-
duction in Sweden. land Japan' declined a relatively small amount. On the
other hand, production showed a remarkable increase in England, Pinland
and France, and substantial- increases occurred in Newfoundland and; Norway.
9329
-576-
Table 7. Uorld production of newsprint paper
by important countries, 1929 and 1932
(Quantity in thousands of sh ort tons)
: 1929
..932
• •
> *
Country-
: Percent
Percent:
[Percentage
: Quant i ty
: of
: Total
: Quontity
of :
total :
. change
Total all :
countries
I 7,503 .
: 100.0
: 6,275
: -100.0
! —14.1
Canada
: 2,729 .
! 37.4
: 1,^15
30.5
! -29.8
United States !
! 1,392 ■
! 19.0
: 1,007 :
16.1 :
-27. 7
Great Britain !
636
8.7
: ' 790
12.6
! +24.2
Germany
! 623
8.5 '
' 450
: 7.2
! -27.8
Japan
! 286
: 3.9
272
: 4.3
--4,9
Swede.n ;
275 .
3.8
257
4.1
: - 6.5
iJewfoundland !
256 :
3.5
272 !
4.3
: * 6.3
Finland i
215 :
2.9
254 :
4.0
+18.1
(
France :
210
2.9 !
275 !
4.4
+31,0
Norway !
189 !
2.6 !
200 :
3.2
+ 5.8
Other :
497 !
6.8 !
583 :
9.3
t-17.3
It will he noted that the United States' share' of world production declin-
ed 3 percent from 1929 to 1932 as compared with a decline of 7 percent
in Canada's share; this decline was off-set, roughly, by 'a corresponding in-
crease of production in Suropean countries.
Course of newsprint production in the United States
Table '8 shows the trend of newsprint production in the United States
by o L uantit3", value, and unit value,, for certain years since 1899.
Table 8. United States production, 18b9~IC33
» — ■ — ■ — ■
Quantity
1
Year
(Thousands
: ' Value
: Unit value
' of short tons)
: (Thousands)
: per short ton
1899
! 569
; $20,092
: 35. 3C
1904
! 913
! 35,906
: 39.34
1909 !
! 1,168
: 46,390
: 39.71
1914 |
! 1,313
! 52, 943
! 40.31
1919
! 1,324
: 98,559
! 74.45
1921
! 1,237
. 114,315
t 92.38
1923 !
! 1,521
110,865
72.39
1925 !
! 1.563
106,083
67.86
1927
! 1,517 !
98,782 !
65.12
1928 :
! 1,415 J
— — ;
1929 !
1,409 ::
80,707 !
57.27
1930
! 1,226 !
_— <
1931 :
1,203 ;
63,654 !
52.90
1932 :
1,047 :
—
1933 :
946 :
1
43.09 1/
1/ Avers
ige delivered cost Jan,
- Sept.
9829
-577-
From Table 8 it will be noted that the annual production of newsprint
in the United States from 1904 to 1935 showed remarkably smell variation.
After a fairly sharp increase -orior to 1909 the trend of production
was gradually vipward until 1925, the result being a total increase of
70 percent in the twenty year period. From 1925 to 1929 production
declined about 10 per cent and then fell sharply - over 30 percent -
from 1929 to 1953. In 1933 production was only 946,000 tons, just a
little in excess of the orodu.ction of 913,000 tons in 1904, In con-
trast to the trend of production, the value of newsprint rose sharply
in the war --ears and remained at a high level until 1923. Since that
time it has steadily declined to a level not greatly higher than that
prevailing in the pre-war period.
Table 9 conroares the Federal Reserve Board index of newsprint
production in the United States with the combined index of manufacturing
for the years 1923 to 1933 and by months for the year 1933. It will be
noted that the annual index of newsprint production was consistently
below the index of general manufacturing from -'1927 to 1931; in 1932 it
was above the general index, but again .dropped considerably below it
in 1933. • :
Table 9. Comparison of an index of newsprint productipn with
the general manufacturing index.
:' Combined :
•
: : : Combined.:
i
index !
'newsprint
: : index ' :
newsprint
Year i
( manuf ac- ;
tur e s )
pap er '
: Year (manufac- . :
: 1933 :tures) ,' :
paper
1923-1925 ;
100 !
: 100
; January: 63 !
59
1926 !
! 108 !
112
: February 63
: 59
1927 !
! 106
! 99
: Inarch : 58
59
1928 j
; 112
! 94
.•April : 68
! 62
1929 !
119
! 93
:May : 80
61
1930 !
! 95
: 86
:June : 93
• 65
1931
! 80 |
! 77
:July : 97
: 66
1932 •' I
: 63
! 68
:August : : 89
: 68
1953 1/ !
: 76
: 63
: Sept ember 84
:0ctober: 77
:Uovember 70
: Dec ember 67
• •
: 60
: 66
! 70
! 67
1/ Preliminary,
From the index of monthl~ T production it appears that the com-
paratively low production in the newsprint industry in 1933 resulted
from its failure to share in the general rise in production during
the middle Of the year. There was, however, a considerable improvement
in newsprint production during the last six months of 1933 as compared with
a sharp decline in the general manufacturing index, and in consequence the
level of production in the last two months of the year was the same in the
newsprint industry as in general manufacturing.
9829
-578-
ITewsprint Production by States
Table 10 shows the distribution of newsprint production by states,
It will be noted that in 1929 Maine was the principal producing state,
and that her share of the United States production increased from 30
percent in 1925 to about 40 percent in 1929. The share of ITew York
the next largest producing state, declined about one-half from 1925
to 1929.
Newsprint production by states
1925
1S29
States
! Thousand
: : Percent
: Thousand
Percent
! tons
: of Total
: tons
of Total
Total
: 1,563
! 100.0
: 1,409
! 100.0
Hew York
: 483
: 30.9
235
: 16.7
Maine
! 470
30.1
561
: 39.8
Wisoonsi ■<
: 151
! 9.7
103
7.3
Minnesota,
: ' 122
: 7.8' !
122
8.7
r ."ashington !
96
6.1 ' :
140
9.9
All other ;
States !
241 :
15.4 '• !
248 :
17.6
Comparison of production in the United States and Canada
Table II compares tlie trend of newsprint production in the
United States and' Canada for : the past twenty years. It shows that in 1913
the domestic industry was responsible for approximately 80:per cent
of the combined production of newsprint : in Canada and the United States,
but that since then the United States' share of the total has fallen
steadly. In 1925 each country produced : aoproximately 50 per cent of the
total. 3y 1929 the United States' share had declined to 34 per cent and
by 1933 to 32 per cent.
9829
-579-
Tal
Die II. Pr
eduction "by
United Sta
tes and Canac
la with percentage
of
total produced by each country annually, 1913-1933
: Total
: tli ou sands
United States
Canada
Year
: Thousands
: Thousands
:of snort
:of short .
Percent
; of sho rt
Percent
: tons
tons
tons
1913
1 , 655
: 1 , 305
79
350
21
1914
1,728
1,313
76
415
24
1915
1,728
1 , 239
72
48a
: 23 .
1916
1,923
1,315
68
608
32 .
1917
2,045
1,359
•66
686
34
1918
1,995
1,260
■63
735
37
1919
2,178
1 , 375
63
80S
37 ;
1920
2,387
1,512
63
875
37
1921
2,033
1 , 225
•60
808
40 ■
1922 !
2,530
1,448
57
1,082
43
1923 '
2,751
'1,485
:54
1,266
46
1924
2,834
•1,481 :
'52
1 , 353
48 ■
1925" :
3,053 '
•1,530 ' .
:J0
1,523
50
1926 ■ :
3,566 • !
'-1,634 :
= 47
1,882
53
1927 :
3,573 '
: 1,486 :
;42
2,087
58
1928 ' .
3,799 •
'1,418
:37
2,381
63
1929 :
4,121 :
•1,392 :
34
2,729
66 •
1930 :
3,786 ■ :
1,282 :
• 34 :
2,504
66
1931- :
3,378 • :
1,157 :
:34
2,221
66
1932- :
2,915 • :
1,007 !
■ 35 :
1 , 908
65 :
1933 :
2,963 :
• 946
32
2,017
68
[Fie rapid expansion of the newsprint industry in Canada during
the past tv/enty years has been due to the fact that extensive tracts of
timber and an abundance of advantageous water power sites have been avail-
able in Canada under Government lease at a comparatively low capital cost,
making the initial investment incidental to the establishment of newsprint
mills distinctly less in Canada than in the United States. On the other
hand, the situation in the United States has been that substantially all
sites affording sufficient supplies of timber and v/ater power, and con-
veniently located for shipment of the finished newsprint to the consuming
markets, have been available, if at all, only at a capital cost greater
than those available in Canada. Furthermore, obsolescence of equipment,
which has affected the industry on both sides of the boundary line, has
been longer at work in tue United States industry. However, many United
States mills which have become obsolete during the last twenty years have
been abandoned or have gone into t.ie manufacture of other types of paper;
other mills _xave been modernized by the installation of new machinery,
and adequate reserves zf timber aave been provided or maintained.
9829
-580-
Sxports
Exports from principal producing countries
Table 12 shows the importance of total exports, and exoorts to the
United States, from the principal newsprint producing countries for the ■
vear 1929, the most recent year for which complete data are available
Table 12.
Total Exports, and exports to the United States, inrelation to
production by principal producing countries, 1929 •
; (Thousands of short time)
Hatio to production
: Production
Exoorts to
of exports
Country
All coun-
United.
To all
To the
tries !
States
countries
United
States
'
Percent
Percent
United ;
States
: 1,392
19
1.4
Canada
: 2,729
!2,515
: 2,195
92.2
80.4
Great ;
Britain
1 6S6
108
;
17.0
1 — ,J
Germany ,
! 623 :
254
9
40. 8
: 1.4
Japan ;
! 286 :
58
1/
20.3
: —
Sweden |
275
218
: 51
79.3
• 18.5
Kewfound— '
.land '
! 256 :
244
: 132
'95.3
51.6
Finland
\ 215
191
: 33
b8. o
: 15.3
Norway ;
189
l
189
: 3
100.0
1.6
1/ 1900 lbs,
It will he noted from data in this table tliat newsprint is pro-
duced principally for export in Canada, Newfoundland, Sweden, Finland,
and Norway. I.ioreover, the proportionately large amount exported to the
United States is of more importance, and any restriction of the market
would he more serious, in cases where the industry is principally an ex-
port industry than would he the case if the exoorts were merely incidental
tc a relatively large domestic production.
Exports from Canada to the United States
The proportion of the ajinual Canadian production of newsprint ex-
ported to the United States since 1921 is indicated in Table 13,
9829
-581-
Ta"ble 13. Percentage of Canadian production exported to the
Halted States, 1921 - 1933
( Thous
and short tons)
* ' * *' (
' Exports
Percen
tage
Year
Prod-action
' to the
•
exported to the
United St
at est
United
States
1921
80*3
657 '
: 81.3
1923
1,266
: 1,109
: 87.6
1925
•i
1,522
1,295
85.1
. 1927
2,087
! 1,776
85.1'
1929
2,729
! 2,195 ■'
: 30.4
:
1931
2,221
! 1,756 '
: 79.1
.*
^1933
1/
2,017 •
1,545
i ■ 76.6
1/ Preliminary,
Proa the above table it will he noted that the increase in ton-
nage exodrts to the United States corresponded closely with the increase
in production in' Canada up to 1929. The decline in^ the percentage of ,
exports to the United States since 1926 is due in part to the develop-
ment of fJie newsprint industry in Newfoundland, which has. exported
approximately 50 percent of its production to the.* United States, amount-
ing to .over 5 percent of total imports into the United States in; recent
years. j :• ...•■'
Exports fron the United- States : :. >a*r[, •
Exports of newsprint from the United States.* are negligible^ in
amount. "However', even a small volume of exports i-s significant, in . the
case of an industry which is operating at a relatively increasing dis-
advantage as is the newsprint industry of the United States. •
• " . •
Table 14 : s'iows the elation of exports to domestic production of
newsprint for the years' 1929 to : 1933.
• h- ■ '
Table 14._ : latio 'of United States exports to - production, 1929- 1933
[ \ (Thousands of short tons) . • :. . ■. j "
Year
Pr'oductio'n
'. Patio of
ports :
• expor.ts : to
: r>ro duct ion
: Percent
19. !
• 1.4
10 :
.8
10 :
■
.8
8 j
.8
11 • :
!
1.2
1929
1930
1951
1,392
1,232
1,157
*S8**w -• : h°°?
19.33
,946
9829
-582-
Imports into the United States
Course of total inroorts ■
Table 15 shows the quantity, value, and average unit value, of imports
of newsprint paper into the United States in recent years.. It will Dp
noted that the quantity of imports declined 26 per cent^ and' the value
of imports somewhat over 50 percent, from 1929 to 1933.
Sable 15, Imports of standard newsprint paper,
1929 - March, 1934 ■ . '. : '.
(Quantity and value in thousands) t
Statistical
: Quantity
: Value . :
: Average
period
: (short tons)
• , ;
: unit lvalue
1929
: 2,423
: $144,493"
: $59.64
1930
: 2,280
: 131,793
: 57.82
1931
: 2,067
: 112,170
! 54.27
1932
! 1,792
: 84,721
! 47.27
1933 :
! 1,794
: • 68,495 {
:. 38.18
1931 Jan # — March.
492
! 27,845
: 56.60
Apr.-June
560
30,492
! 54.45
July—Sept
490 '
26,234 , -
!, 53.54
Oct, —Dec,
: 524
: 27,600 , ,
52.67
1932, Jan, -liar. . :
446
! 21,623 !
48.48
April-June
487
! 23,577
48,41 - .
July-Sept ,
421
20,185
47.94
Odt.-De'c.
438
19,335
! . . 44.-14
1933 Jan.-Mar.
341
13,689 ,
: . 40,14
Apr.-June
! 439
!• 17,038 .!
38.81
July— Sept : !
' 492
18,809 -j
38,23
Oct, -Dec, j
521 !
18,960 A
36.39
Oct, ;
176 • :
6 , 638 .!
37.72
ITov. . j
177
6,360 ■
35.93
Dec.. !
168 :
5,962 j
••; , 35,49
1934 Jsn.-Mar. •
463 ; '. !
. 15,737 :
33, 99
Jan, j
1'69 !
5,'808 :
•.••■ ...v 34,42
lob, j
125 i
4, '207 !
33,77
Mar,. :
169 j
5, 722 :
33,89
Imports by count i
■ies ••
\ '
Table 16 shows imports of newsprint paper into the. United States from
the principal countries and the share of each in the total for the years
1929 to 1933, The percentages in the table indicate that the shares of
Sweden, Finland and, to a lesser extent, Norway, although small, are incre-
asing. Canada still greatly predominates but its proportion of the total
d829
-583-
importation tends to decline. Through January 1934, Newfoundland and
Labrador continued to supply from 5 to 8 -jercent; the significance of the
decline in February and March, 1934, oarnot now be determined.
Table 16. General i-moort;
3, 1929 - Mar. 1934
(in quant:
Lty - tons
5 of 2,000
pounds )
: Newfoundland
Period
! Canada
: and
: Labrador
: Sweden
: Finland
Germany
: Norway
1929
! 2,194,587
: 131,915
: 50,719
! 32,607
: 9,250
, 3,498
1930 J
i 1,989,285:
156,186
: 69,267
; 41,796
• 13,789
: 9,327
1931 !
, 1,756,056
159,781
! 66,687
: 47,992
! 21,910
: 14,444
1932
! 1,533,389
: 113, 827 :
59,986
! 46,626
14,323
22,692
1933 !
• 1,545,293
94,944
68,061
56 , 576 •
12,058
: i6/: r 9l
Jan-Mar. i
t 295, 751
: 9,043 :
16,487
: 11,701
! 3,078
: 4, 514
) Apr-Jun i
Jul-Sep !
! 378,833
23,777
16 , 3,79
: 13,074
: 2,834
' 4,410
! 431,992:
21,467 !
19,279
: 14,418
3,027
; 2,194
Oct-Dec !
! 458,716-
40,658 :
15,916
: 17,333
: 3,118
: 5,472
1934 !
Jan. -Mar,-
: 413,921:
15,495
' 13,468
! 13,672
1,607
: 4,007
January
! 141,409
14,945 !
6,183
! 3,775
491
: 1,949
February !
! 115,810'
293 :
2,135
4,762
424
1,161
March !
! 156,702
257
5,150
: 5,135
692
897
In percent
of total
imports
1929
! 90.6
5.4
2.1
: 1.3 :
.4
t .1
1930 :
: 87.3 :
6.8
: 3.0
! 1.8
: .6
: .4
1931 !
! 35.0
: 7.7 :
3.2
2.3
1.1
: .7
1932
! 85.6
: 6.4
3.3
! 2.6
.8 i
1.3
1933
! 86.2
! 5.3 :
3.8
: 3,2
.7 l
-• .9
Jan -Mar
! 86,8
! 2.6
: 4.7
: 3.5
.9 -
: 1.3
Apr.-Jun
! 86,2
5.5
3.6
! 3.0 :
.7 !
.9
Jul-Sep
! 87.8
1 4.4 :
3.9
: 2.9' :
.6 !
.4
Oct. -Dec
! . 84.2
7.8
! 3.1
» 7 n i
.6 :
1.0
1934
Jan-Mar
! 89.0
1 3.3
2.9
: 3.0
.3 !
, 1.5
Januar?/
: 83,4 j
8.9
3.6
2.3
.3 . :
1.2
February
: 92,3
.2 !
1.6
4.0 :
.3
.8
March
: 92,8
1 .2 :
3.1
3.0 :
.4 •
.5
r -3£S
-584-
Ratio of imports to domestic production
Tabic 17 shows the trend of imports of newsprint paper in relation to
production in the United States -since 1926. . It indicates a decline in done .tic
production in each year since 1926; the total decline from 1S26 to 1933 was
44 percent. Imports, on the other hand, increased approximately 30 percent
from 1925 to 1929 hit thereafter declined, and in 1932 and 1933 were shout
3 percent less than imports in 1926. Nevertheless, with the exception of the
year 1932, the ratio of imports to domestic production, based on annual figures,
increased steadily throughout the period 1926 to 1933. This increase has been
in progress £or tv/cnty years, but for a decade has been particularly rapid.
It rose from] 110 percent in 1926 to 175 percent in 1929, to 178 percent in 1932,
and to 190 percent in 1933.
Table 17. Ra,tio ! of imports to domestic
production
(Thousand short :tons)
Statistic?!
Domestic
Imports
Ratio of [imports ,
jcriod
t
produc tion
to domestic
*
:' ■ production
_
i 1 , 684
1 , 850 ,
Percent
1926 .'
: . 110
i .
1927 ;
'.'1,486
1,987.
: 134
1928
'1,418
2,157
152 ;
• .*
1929
' 1 , 3*92 '
2,423
: . 175 :
1930
1,282
2,280
178
1931
1,157' ;:
2,067 .
179
1932
1,007 v
1,792
178
1933 , .'
946 ■; '
l,7-9d :
.190 .
1932 ' [
,
- •
Jan. -Lia^r.
281 .
44, .
159
Apr. -Jim c
264
: 487
184
Jiil'y-SQpt. ■
225 ■
: 421 ' \
. ' 187
Oct.-Dtc. :
237 •
438 .'
185
1933 ; :
, *
Jan. -Liar.
218 •
341 '.
156
Apr. -June
238
439
184
Jul - -Sept.
240 •
492
205
Oct. -Dec.
251 ■
521
208
'Aug..
: 83 • ■ :
151 ;
172
Sept.
: 72 • :
178 .
247
Oct.
82
176
215
ITov.
83
177
201
Dec.
81
168
207
1934
Jan. -Mar.
242
463
191
Jan.
85
169
199
Feb.
72
125
174
tlar.
85
169
199
9829
-585*
From the quarterly figures in Tabic 17 it appears that both imports and
domestic production declined irregularly from the second quarter of 1932 through
the first quarter of 1933 and increased in the last three quarters. The in-
crease in imports in the last three quarters of 1933 was greater than the in-
crease in domestic production, and, as a result, the trend of the ratio of
imports to production, which had been interrupted in the preceding six months,
resumed its upward movement. The ratio in the first qxiartcr of 1934, although
lower than in the preceding two quarters, was higher than in any other preceding
quarter. The ratio for January, 1934, was still higher than in any quarter
prior to the last two quarters of 1933, although less than those two. In
February, 1934, imports declined more than production and the ratio dropped lower
than that for any month since August, 1933, and lower than for any quarter since
the low point reached in the first quarter of 1933. In general it will be noted
that there was an irregular decline from September, 1933, to February, 1934,
but an increase in March.
5829
-586-
Effect of the National Industrial Recovery Act
Employment and payroll
Statistics of employment and oayroll were submitted in support of
the complaint by six individual companies. However, the data for some
companies include pulp and paper mills other than newsprint. For this
reason, and "because the data cover only one month's operation under the
code, it is difficult to draw any satisfactory conclusions as to the
effect of the code on emplovment in the industry as a whole. Some com-
panies appear to have increased employment and/ or payroll; others appear
to have increased employment, "but this increase was offset by a decrease
in payroll; still others appear to have experienced a decline in both em-
ployment and payroll. If the changes in opposite directions as between
companies, and as.' between: the number employed and payroll within indivi-
dual companies, are taken into account, it seems probable that the News**
print Code had little effect on average labor cost for the industry.
Table 19, on page 33, shows the changes which occurred in labor cost
per ton for eight newsprint companies. Three companies which experienced
an increase in production from October to December of 1933 show a decline
in the unit cost of labor ranging from 4 to 9 percent. Three companies
whose output remained at the same level for the two months show increases
in unit cost of labor ranging from 7 to 10^ percent. Two companies which
experienced a decline in output show increase in unit cost of labor of
13 and 17 percent respectively. The comparison of the average unit cost
of labor for the eight companies in the two months shows a net increase
of 5 percent.
Costs of production
Table IS gives in considerable detail the average costs of producing
newsprint by twelve companies in Canada, and by twenty-four companies in
the United States, for the first half of 1933. It. also gives the average
costs of prcritucing newsprint in the United States in the third quarter of
1933 and an estimate of the increase in United States costs from May to
December, 1933. These data were submitted in support of the complaint
under Section 3 (e), and also at the National Recovery Administration
hearing on the stabilization proposals of the Newsprint Code Authority on
February 1, 1934. With respect to the greater total cost shown for Canada
than for the United States, it should be noted that the twelve Canadian
companies operated at only^55 percent capacity, whereas the twenty-four
domestic companies operated at 70 percent capacity. Manifestly, the costs
of the Canadian mills would have been somewhat l0"er if those mills had
been operating at the same percentage of capacity as the domestic mills.
Moreover, a higher or lower level of output in Canada or the United States
would have the effect of altering the cost advantage prevailing between
the producers of newsprint in the two countries.
932<
587-
Table 13. Weighted cost of newsprint paper per ton in
Canada and the United States, 1933
(Excluding interest en indebtedness and return on investment)
Canada
(12 companies)
United States (24 companies)
Estimated
Cost items
First six
First Six
Third
increase
•
months
months
quarter
December
over May
wood
$ 9.93
$10.09
$10.00
$1.70
Purchased pulp
.19
1.73
1.82
.48
Sulphur
.53
.40
.42
-
Alum, Size, Color, etc.
.35
.57
.67
.07
Limestone
.3.9
.10
.11
'
Pulpstones
.16
.11
.11
-
Fuel
2.37
2.52
2.24
.42
Power
4.11
3.43
3.51
-
Repair Materials
.91
.93
1.05
: .15
Wires & Machine Clothing
1.01
1.18
1.17
: .11
Supplies
.42
.27
.31
: .05
Finishing & Shipping
material
.53
.49
.49
: .06
Labor
4.80
5.61
5.76
.85
Factory Burden & Misc.
1.33
1.76
1.57
.08
Insurance
.33
■ .28
.24
.01
Ta r.e s
.79
.97
;.95 .
3'. 23^/
.08
Depreciation
3.7c
3.57
-
Depletion
.92
.51
.51
-
General & Administra-
tive Expense
2.35
1.97
1.70
.06
Selling Expense
1.04
.90
.87
.03
Cost f.o.b. mill
35.37
37.44
36.73
Delivery to destination
Points
■7.66
5.84
5.98
Total
43.53
43.28
42.71
4.15
Estimated increase
December over May
9.5$
Percent of capacity
ope rated
55.4,i
70.8$
76.0$
1/ This item was listed as $0.51 in the record of the hearings, and, if
correct, would make a total delivered cost of $39.99.
=829
- 538 -
The indicated decrease in costs in United States mills in the third
quarter of 1933 compared with the first half of that year probably was
due primarily to the increase in production from 70.8 per cent to 76 per
cent of capacity. Only about one-fifth of the increase of $4.15 per ton
was due to labor costs, whereas two-fifths of it was due to the increase
in cost of pulp wood.
The relative increase of 9.5 per cent shown in Table 18 as occurring
between May and December should be compared with the average increase in
costs of 4.4 per cent shown in Table 19 as occurring between October, the
last full month before the newsprint code became effective, and December,
the first full month under the code. The increase from October to December
is based on the average of the costs submitted individually by eight manu-
facturers in support of the complaint under Section 3 ( e) . Table 19 shows
separately for each company the percentage of increase from October to
December, in total costs, in general administrative expenses, and in labor
costs. It also shows the percentage of capacity operated by each company
in October and December. Taking all eight companies together the percent-
age of capacity operated was practically the same in the two months.
Table 19. Cost changes under N.R.A. Code
Percentage of
: Percentage changes in costs
capacity
operated
October to December
Company
General &
October
December
Total
administra-
tive
: Labor
1
69
: 83
- 7.0
if 12.6
- 8.3
2
67
92
- 3.6
- 28.0
- 4.2
3
100
92
•(- 13.3
4. 21.0
*16.8
4
100
100
*■ 3.7
1 87.8
+ 8.7
5
93
87
+ 24.1
+ -185.1
j-13.1
6
73
73
4- 3.2
■»• 81.0
+10.5
7 !
68
78
* 2.7
- 27.6
- 7.1
8 :
100
: 100
f .4
*■ 2.9
+ 7.1
Average
+ 4.4
•»- 44.5
■[ 5.0
The data in Table 19 indicate changes from October to December in
total mill costs of production ranging from a decrease of 7 per cent to
an increase of 24 per cent, or an average increase of 4.4 per cent.
Changes in general and administrative expenses ranged from a decline of
28 per cent to an increase of 185 per cent or an average increase of 44.5
per cent. In sharp contrast it will be noted that the changes in labor
costs shown in the last column of the table ranged from a decline of
approximately 9 per cent to an increase of approximately 17 per cent,
with an average increase of only 5 per cent.
9 829
-539-
Important Competitive Factors
Trend of newsprint prices in relation to the general price level
Table 20 compares the trend of prices of newsprint paper with the
trend since 1926 in general wholesale commodity prices and in the prices
of all paper and pulp products. It will be noted that up to and in-
cluding 1930 the index of prices of newsprint paper compared favorably,
but since 1S30 has compared unfavorably, with the general price index
for paper and pulp products. Moreover, from 1926 through the first
three quarters of 1532 newsprint prices fell less than general whole-
sale price. Since the first quarter of 1933, however, newsprint has
not shared the general rise in wholesale prices, and the index in Decem-
ber, 1935, was 55.7, based on avera ;e 1925 prices as 100, whereas the
general price index on the same basis stood at 70.8 and the price index
for the paper and pulp products industry as a whole stood at 82.5.
Table 20. Comparison of the trend of prices of newsprint paper
with the trend in the general wholesale price index and
the index of paper and pulp prices
Wholesale
Paper
New sprint
Period
commodity
and pulp
paper
index
index
index
1926
100.0
100.0
100.0
1927
95.4
93.8
94.2
1928
96.7
91.4
94.2
1929
95.3
83.9
94.2
1930
86. 4
86.1
94.2
1931
73.0
81.4
79.4
1932
64.8
75.5
70.2
1933
65.9
76.6
57.4
1932 - March
; 66.0
76.8
73.8
June
63.9
76.2
73.8
September
: 65.3
75.5
71.1
December
62.6
73.0
62.7
1933 - March
60.2
72.2
62.7
June
: 65.0
73.5
55.7
September
; 70.8
32.2
55.7
December
; 70.3
82.5
55.7
Comparison cf average import values with domestic prices
Table 21 compares the annual average import values with domestic
average delivered prices for the years 1929 to 1933. It should be noted
that the average unit values of imports do not include transportation
and importers' or brokers' profits.
9829
-590-
Table 21. Comparison of average import values
with domestic prices, 1929 - 1933
(Average valxie per ton, of 2,000 "pounds)
Year
Domestic
price
Canada
New-
. foundland
' and
La bra do r
Sweden
Finland
Germany
No rway
1929
1930
1931
$62.00
62.00
( 52.00
( 57.00
$60 . 23
58.55
55.12
r
*
$56 . 35
56.65
53.24
$50.79
45 . 57
46.55
$47.98
46 . 20
43.73
$49.02
4P . 78
43.05
$50.84
47.62
49.58
1932
( 53.00
( 45.00
4C.07
49.77
38.92
34.92
35.11
37.15
1933
( 45.00
( 40.00
39 . 31
38.05
27.92
27.67
28 . 50
The average unit values of ever 85 percent of the imports, which come
from Canada and Newfoundland are only slight^ below the domestic price, and
the addition of a small amount to cover the cost of transportation would
bring the net price to the consumer up to, or above, the level of the domestic
price. However, a study of a breakdown of the average import values by ports
of sntr^ shows that imports from lie' r£ oundland at times have been entered at
average values which were very much below that of combined imports from
Canada and Newfoundland.
The foreign value of imports from European countries in 1333 averaged
about $12.50 less per ton than the average domestic delivered price at prin-
cipal Atlantic and Gulf ports. This difference is accounted for chiefly by
costs of packing, handling, and transportation. The North Atlantic Con-
ference ocean freight on newsprint from North European to Atlantic ports
was about $5.00 per short ton during 1933; in addition there were pre-
terminal and post-terminal charges amounting to from $4.00 to $7.00 per
short ton, depending upon the quantity involved. The total cost of handling
and transportation therefore, would range from about $9.00 to $12.00 per
ton. Adding these costs, and s reasonable margin of profit for importers,
tc the average import values shown in Table 21, j'i ves ? total landed cost
somewhat less than delivered prices' of domestic newsprint at the principal
Atlantic ports. It is impossible to determine what price advantage, if
any, would remain to the importer if differences in grade, quality, and
methods of packaging for shipment, should be taken into consideration.
We have no reliable information as to variations in grade or quality
of imported and domestic newsprint, and no information as to the exact
amount of cost variations which are due to differences in the quantity
shipped or in the methods of packaging. Furthermore, no statistics are
available as to the 'amount of newsprint shipped, or the cost of transporta-
tion, by "tramp steamer." Consequently no strictly accurate price com-
parisons can be made.
9829
-591-
Trend of import values and exchange rates
The present competitive position of the domestic newsprint in-
dustry, insofar as it is affected by the currency situation, is sub-
stantially better than it was from September, 1931 to April, 1933. For
example, the dollar value of the currencies of Canada, Sweden and
Finland averaged about 12 percent, 30 percent-, and 40 percent, respective-
ly, below par for the year 1932. During 1923 the currencies o_" Sancda and
Sweden returned to par and that of Finland to within 10 percent of par.
Table 22 compares the trends of foreign exchange rates with the
average unit value of imports from each of the countries which are the
principal sources of newsprint.
It will be noted that the average annual import values for the
countries shown in Table 22 declined to a considerably greater extent
from 1930 to March, 1933 than did the exchange value of their currencies.
Moreover, the average dollar value of imports has not risen, since
March, 1S33, to correspond with the appreciation of the currencies of
these countries. In fact, although the exchange rates for Canada,
Finland and Sweden rose 20, 45 and 49 percent respectively from March to
December, 1933, the average value of imports from Canada and Finland
declined' a further 12.4 percent and 1.9 percent respectively, and the
imports from Sweden' rose only 1.6 percent. In short, it appears that
the price competition has become somewhat ' more serious instead of less
serious during the period of rising foreign exchange, since March, 1933.
This is due in part to the existence of excess stocks and the operation
of relatively long term contracts. '
9329
-592-
Table 22. Comparison of trends of import values and
exchange rates, 1929 - March, 1934
: Exchange value in 1
Jnited
; Unite
value of inroorts
Statistical
■
States dollars
per
short ton f
iTm
period
Canada
Svieaen
| Finland
Ca na da
' Sweden
| Finland
; Par =
: Par =
; Par s
: $1.00
: $0,263
: $0.0252
1929
: $0.9925
$0.2678
. $0.0252
; $60.28
; $50.79
: $47 . 98
1930
; .9934
: . 2635
; .0252
; 58 . 55
; 49.57
: 46 . 20
1931
; .9633
; . 2525
; . 0239
55.12
; 46 . 55
; 43.73
1932
.3809
.1847
: .0155
48 . 07
; 38.92
: 34.92
1933
.9196
.2203
.0187
39 . 31
: 27.92
: 25 . 33
1933- Jan.
.8746
.1830
.0146
41.61
30.18
: 28.69
Feb.
.8351
.1827
.0149
40 . 74
29.36
: 26 . 61
Mar.
.3352
.1819
.0152
41.24
27 . 27
; 25 . 90
Apr.
.8472
.1831
.0158
39.65
26.49
I 27.03
May
.8759
.2024
.0175
40 . 44
27. 3S
; 25.26
June
.3939
.2128
.0182
39.69
27.66
; 24.26
July
.9447
.2398
' .0205
' 39.80
26.48
: 24.76
Aug.
.9423
.2323
.0200
59.06
27.04
24.01
Sept.
.9647
.2505
.0207
39.54
23.69
; 24 . 46
Oct.
.9760
.2407
.0207
38.82
28.17
24.49
Nov.
1.0118 :
.2655
.0227
36.77
27.45
24.70
Dec.
1.0055 ;
. 2639
.0227
36.17
27.71
25.41
1934- Jan.
.9952
.2604
.0224
34.92
27.71
25.68
Feb.
.9917
.2596
.0223
34.28
28 . 84
25.54
Mar. :
.9974 ■
.2626
.0225
34.41
27.59
25.12
Percentage
change ;
1930 to Mar. ;
1933 :
-16.4 :
-32.3
-39.7 ■
-29.6
-45.0
-44.0
Mar. to Dec. :
1933 :
/20.4 ;
/45.1 .
/49.3
/12.4 :
/ 1.6
- 1.9
Mar. 1935 to ;
Mar. 1934 ;
/19.5 :
/44.4 .
/48.0 :
-15.6 :
/ 2.3 ;
- 3.0
9829
-593-
Prcoosed cooperation between the Code Authority of the
Newsprint Industry in the United States and
the Newsprint Export manufacturers
Association of Canada
At the public hearing on February 1, 1934, before Deputy
Administrator Fickard, the Code Authority of the Newsprint Industry
made t-o general proposals for the stabilization of the newsprint
industry. The first included a series of recommendations covering
minimum prices, tr^de practices and trr.de customs; the second was ■
a propsed agreement between the Association of Newsprint Manu-
facturers of the United States and the Export Manufacturers
Association of Conada, providing and setting up machinery for the
uniform administration and/or enforcement of the proposed trade
practices in both the United States and Canada.
The principal feature of the proposed regulation of trade
practices is a provision for the maintenance of a fixed minimum
price for newsprint marketed in the United States. This is set
out in the recommendations in the following terms: Except in the
fulfillment of contracts signed before October 24, 1935, "no paper
shall be sold or offered for sale directly or indirectly in any
manner whatsoever by any member of the industry for delivery
during the years 1933 and 1934 at less than a base price of $41.00
per ton, subject to the zone and other differentials;" these
price differentials range from $1.50 below the base price to $6.00
above, depending upon the zone or territory as determined by the
Newsprint Code.
It is further provided in the trade practices that the Code
Authority, upon its own motion or upon application by any member
of the industry or group of consumers, might adjust or modify
such minimum prices to the extent that it should find such adjust-
ment or modification justified by general changes in the cost of
manufacturing or in the value of the dollar and by conditions in
the newspaper publishing industry. Moreover, the agreement with
the Expert Manufacturers Association of Canada to comply with the
requirements of the recommendations included agreement to comply
with the adjustments and modifications which might be made from time
to time by the Code Authority.
The proposed agreement further provided for a joint committee
composed of four representatives of the American and four repre-
sentatives of the Canadian association, selected in such manner and
for such terms as the associations respectively should from time
to time determine. It provided that the joint committee should have
power to call joint meetings of the associations and to confer
with members of the association, other manufacturers, importers, dis-
tributors, and consumers, with respect to stabilization of the in-
dustry and the elimination of unfair practices and destructive com-
petitive prices, and to report the results of such conferences, with
their recommendations to the associations.
9829
-594-
Otlnr principal provisions of the proposed agreement vrere:
(l) methods of enforcing compliance -ith the trade practices, i.e.,
machinery for investigating, stipulation of legal remedies and
penalties for, violation of the agreement, including application
for restriction or regulation of imports under Section 3 (o) of
the Act: (2) the interchange of statistics of plant capacity.
9829
-595-
QUEBRACHO (No. 7)
9829
-•596~
TABLE OF CONTENTS
Page No .
Complainant's Status under the rational Industrial
Recovery Act 599
Subject of Complaint 599
Tariff Treatment 50 °
The Domestic Industry 60 °
The chestneut branch ^00
The quebracho branch °O0
The miscellaneous branch s01
Complainant' s interest in imports 601
Concentration of control b0 ' : '
Course of Domestic Production °°2
Exports ^02
Quebracho Logs D
The Quebracho Industry in Argentina and Paraguay — 6 °5
Course of Imports 608
Ratio of imports to production 610
Important Competitive Factors "^-^
Competition bet'Jeen vegetable and chemical
tanning agents ° 2
Inter-relationshin of vegetable tanning ex-
tracts 613
Price relationships
Trend of 'orices in relation to consunrotion
Currency fluctuations
Influences of currency fluctuations on que-
bracho import volume
Structure of the Solid Quebracho Extract Import-
ing Business
Causes of Increased Resort to Direct Purchase
Effect of the National Industrial Recovery Pro-
grara 621
Effect on labor °g"
Effect on costs of production .
The Competitive Position of the Domestic Industry-
9829
-537-
LIST OF TABLES
Table Page
No. No.
1 Trend of production of chestnut extract and
fresh quebracho extract, compared with pro-
duction trend of vegetable-tanned leather 603
2 Trend of exports and domestic production of
chestnut extract in terms of 25 per cent
tannin content 604
3 Annual invoorts of quebracho logs, by customs
districts and total, with indication of
potential yield of extract 605
4 Exports of quebracho logs and extract from
Argentina and Paraguay, both in terms of
obtainable extract of 25 per cent tannin
content 606
5 The quebracho extract industry in Argentina
and Paraguay, with indication of capacity
and exports, in metric tons of solid cf 63
per cent tannin content 608
6 Imports of solid quebracho extract, in terms
of 25 per cent tannin content 609
7 Percentages of total imports of solid que-
bracho through principal customs districts — 610
3 Batio of solid quebracho extract imports to
domestic production of chestnut and fresh
quebracho extracts 611
9 Trend of production of vegetable-tanned and
chemical-tanned heavy leather 612
10 Comparison of trends of average domestic mar-
ket prices for principal tanning extracts
and general wholesale prices 614
11 Comparison of the trend of prices and the
perhide consumption of chestnut and que-
bracho extracts 615
12 Course of fluctuations in United States and
Argentine currencies 616
13 Solid quebracho extract despatched to the
United States by principal shippers in Buenos
Aires during recent quarters, in terms of
extract of 25 per cent tannin content 618
14 Comparison of Buenos Aires market prices and
import unit values; also comparison of landed
costs of direct purchases in the Buenos
Aires market and ex-dock purchases 6 20
15 Trend in employment, payroll, man-huiirs, and
productivity of labor in the domestic tan-
ning extract industry 622
16 Comparison cf trends of labor costs, selling
prices, and unit value of imports. 623
9829
-598-
LIST OF CHARTS
I Solid quebracho extract: - Comparison of trend
of imports with trend of cost 625
II Solid quebracho extract: Comparison of shipments
to "regular" importers and to "Independent"
importers s) by volume, and b) by cost to
consumer. ; t "°'
9829
-599-
SURVEY OF IKPOHMA.TIOH
ON
SOLID QUEBRACHO EXTRACT
December, 19 3 4
Complainant's Status under the National
Industrial Recovery Act
This is a report on a complaint under Section 3 (e) of the National
Industrial Recovery- Act, filed by the Code Authority of the tanning extract
industry, with respect to imports of solid quebracho extract. This industry
is operating under a code of Fair Competition approved by the President on
March 29, 1934. Prior to that time it operated under the President's Re*-
employment Agreement.
Subject of Complaint
Quebracho extract is an important tanning material, approximately
90 'oer cent of which is used in the tanning of heavy leathers, such as sole,
belting, and harness leather, and 10 per cent in tanning lighter leathers,
such as bag, strap, and upholstery leather. The extract is prepared in
two commercial grades known in the' trade as (l) "ordinary" or "hot water
soluble" and (2) "clarified" or "cold water soluble." For industrial use,
the clarified grade of solid merely requires dissolving to form a liquid,
but the ordinary grade (which has comprised over 85 per cent of total
imports during recent years), must also be treated with bisulphite of
soda to free all of the tannin.
Quebracho extract is imported in solid form almost exclusively from
Argentina and Paraguay. It has an available tannin content ranging from
62 to 55 per cent. For industrial use it 'must be dissolved to form a
liquid of approximately 35 per cent tannin content.
The complaint is directed against solid quebracho extract which the
complainant states "is being imported in increasingly large amounts at
distressed prices." These imports are alleged to be competitive with
chestnut extract produced from domestic chestnut wood and with liquid
quebracho extract, which is produced domestically from imported quebracho
logs.
The complainant further states that "the advent of the National
Recovery Administration has raised the operating costs of the domestic
producers, and fchey are now at still a greater disadvantage, facing fur-
ther curtailment of their production and sales volume on account of the
increasing imports of solid quebracho. " They suggest that action be taken
under Section 3 (e), to require (l) that importers "agree that no impor-
tation is to be sold at less than a certain price per net pound, ex-dock
in bond, United States ports, basis 53 per cent tannin content", (2) that
consumers and dissolvers be permitted to import under conditions specified
above, but if the cost to them is less than tne selling price established
thereby, they be required to pay a tax equal to the difference, and (3)
that no consumer be allowed to purchase for resale.
9829
-600-
Tariff Treatment
Quebracho extract, whether solid or liquid, is dutiable at 15 per
cent ad valorem under Paragraph 30 of the Tariff Act of 1930. It was
dutiable at the same rate under Paragraph 39 of the Tariff Act of 1922,
and was imported free of duty under Paragraph 624 of the Tariff Act of
1913.
Quebracho logs and wood are imported duty-free, along with other
dyeing and tanning raw materials, under Paragraph 1670 of the Tariff Act
of 1930. They were liewise on the free list in the Tariff Acts of 1922
and 1913.
The Domestic Industry
The Code of Pair Competition defines the tanning extract industry as
"the manufacture, the liquefying and/or dissolving, for sale, of tanning
extract from domestic woodand bark or from imported wood, bark, leaves,
nuts and extracts." The code membership comprises 14 companies operating 25
plants and employing approximately" 900 workmen. Representation on the node
authority is provided for the following three branches of the industry: (l)
Chestnut branch, consisting of nine companies, (2) quebracho branch, con-
sisting of three companies, . and (3) miscellaneous or specialty branch, con-
sisting of two and -oossibly more manufacturers of extracts.
' The chestnut branch
The chestnut branch of the industry consists of 19 plants situated
in Tennessee, North Carolina, Virginia, and Alabama. Over 60 per cent
of the total output of this branch of the industry in 1931-1933 was con-
tributed by nine plants operated by two important manufacturers of paper
and/or paper board, the extract being derived from chestnut-wood chips
which are used later for pulp in the paper mills. A third company, op-
erating three extract plants , maintains a contractual arrangement by
which it furnishes its de-tanned chips to one of these paper manufacturers
for pulp purposes. Considerable amounts were produced in three extract
plants operated by two large tanners of sole leather "ho consumed practi-
cally all the output of the three plants. These companies work almost
exclusively' - on chestnut.
The sole leather manufacturers, who operate three chestnut extract
plants, are also important importers of solid quebracho extract and other
tanning materials which they dissolve and/or otherwise prepare for consump-
tion at their tanning plants. The ■•extract' output of the two paper manu-
facturers is limited to chestnut, all of it being produced for sale.
The annual cut of chestnut is roughly estimated at 050,000,000 board
feet, of which about 30 per cent goes to extract plants. This annual con-
sumption represents only about 5 per cent of the standing timber, but
government entomologists have stated that the supply may run out in 10 to
15 years, owing to ravages of a blight, concerning which the following is
quoted from a report of the Forest Service of the Department of Agriculture;
9829
-601-
The entire stand of chestnut in the United States is
threatened with extinction from a fungus disease known as
the "chestnut blight." This blight first attracted at-
tention in 1904 in New York City and has since spread over
New England and New York, and southward and westward into
Virginia and T7est Virginia. Every attempt to check the
spread of the blight has met with failure. It is estimated
that nine-tenths of the remaining stands of chestnut in
the Southern Appalachians will be heavily infected by the
blight by 1935 unless something occurs to stop it.
The quebracho branch
The quebracho branch of the industry includes three firms. (l) One
is a comoany manufacturing dyes and tanning materials which operates a
special plant to produce fresh quebracho extract- from l n gs received from
an affiliated company, in Argentina. (2) The second one is a domestic
corporation, which is a subsidiary of a British company in Argentina
from which it receives quebracho logs and solid, quebracho extract. This
corporation, operating a domestic plant produces fresh quebracho extract
from the imported logs and also dissolves and/or otherwise prepares for
sale to tanners the imported solid quebracho extract. .This company also
sells the imported solid extract directly to tanners on dollar terms of
f.o.b. cars, American ports. (.3) The remaining one is an American conroany,
operating extensively in Paraguay, which receives solid quebracho extract
from its foreign plant and dissolves and/or -otherwise prepares it in
a domestic "olant for sale to tanners. This company also offers the im-
ported solid quebracho extract to tanners on terms of f.o.b. cars, Ameri-
can ports. This third, firm has been operating under the tanning extract
industry code, although the business of dissolving solid extract was out-
side the scope of the ind.ustry as defined in the original code. An amend-
ment was approved on October 9, 1934, which clarified this company's member 1
ship status.
The miscellaneous branch
The so-called miscellaneous 'branch of the tanning extract industry is
composed of two companies. One manufactures for sale a wide range of
extrs.cts from domestic and imported materials, including solid quebracho.
The other company supplies tanners with a spruce ex-tract obtained as a
by-product in sulphating pulp preliminary to paper manufacture.
Complainant ' s interest i n imports
The complaint, directed exclusively against imports of solid que-
bracho extract, has been filed by the code authority for the tanning ex-
tract industry, the membership of which includes two companies which
normally handle 70 per cent of imports into the United States of that
extract. Only one of these two companies is directly represented on the
code authority. The industry membership also includes extract-plant
subsidiaries of certain tanners who are responsible for another 5 per cent
or more of the imports. These subsidiaries have no direct representation
on the code authority.
9829
Concentration of control
Control of production in the tanning extract industry is highly
conccentrated. Over 75 per cent of the total output is controlled by
three companies. Furthermore, the major portion of the domestic fresh
quebracho extract output is produced "by the company which usually imports
a substantial percentage of the solid quebracho extract.
Course of Domestic Production
Approximately 90 per cent <Jf the domestic production of vegetable tanning
extracts - exclusive of dissolving the imported solid ouebracho extract -
consists of chestnut extract and of fresh quebracho extract produced from
imported logs; the balance is derived from myrabolan, rattle, summac , oak,
spruce, etc. The following table shows the trends of domestic production
of both chestnut and fresh quebracho extracts and in comparison the trend
of vegetable-tanned. leather production.
It may be noted that domestic production of chestnut extract fol-
lowed closely the downward trend o.f 'production of vegetable-tanned lea-
ther. Despite the fact that there was a heavy importation of solid que-
bracho extract in the latter half of 1933 and early in 1934, the produc-
tion of chestnut extract ^ose considerably during the third quarter of
1933, and has maintained a relatively high level through the first six
months of 1934. Apart from the table it may be observed that at the same
time the relatively high level of Production of vegetable-tanned leather
has resulted in a decline in the chestnut extract stocks in the hands of
all. producers. According to a statement of the code authority, these
stocks dropped from 57,528,000 pounds in July, 1933, to 55,967,000 in
April, 1934.
The domestic production of fresh quebracho extract likewise kept
pace relatively with production of veg'etable-tanned leather until 1931,
after which time it dropped abruptly to a decidedly lower level. Com-
plainant states that present quotations of domestic fresh quebracho are
below cost of production. If this statement is correct with regard to
present. conditions, and considering the trend in the cost of imported
quebracho logs and other costs, it appears that the domestic fresh oue-
bracho plants have been unable to compete successfully with the imported
solid ex.tra.ct since 1931 when there occurred in the price of the latter
a sharp drop from the artificially high level maintained prior to that
time by the Argentine cartel.
Exports
Chestnut is the only domestic extract exported in any volume, Can-
ada, being the principal market with smaller amounts going to Cuba, Ger-
many, and the United Kingdom. The annual exoort totals given in Table 2,
converted to 25 per cent tannin content, are taken directly from the com-
plaint. They are based on exports as reported to the Tanners Council
Statistical Bureau by the various chestnut plants.
9829
-603-
Table 1: Trend of production of chestnut extract and
fresh quebracho extract, compared with production trend
of vegetable-tanned leather.
Period
1927
1928
1929
1930
1931
1932
1933
1933
Ja/uary - l.iarch
April - June
July - September
October - December
1934
January - Larch
A-pril - June
Production in thou-
sands of pounds of
25 per ce nt tanninl/
Chestnut: Presh
extract : quebracho
Indices of trend.
Average 1927-29
production B 100
Chestnut: Fresh : Vegetable-
extract : quebracho: tanned
:_ :_ leather 2 /
323,527
3? 4, 429
323,427
336,162
269,284
218,089
241 , 770
45,301
55,255
69,863
71,351
69,969
,907
115,764
S/
125,385
3/
92,891
59 470
44,022
6,967
10,498
13,481
13,076
10,376
10,664
By years
)
) 100
)
)
)4/ 100
)
98
78
63
70
By_cuarters
53
64
81
83
CI
81
5/
77
33
37
)
) lob
)
94
76
64
67
35
45
43
34
35
3/
82
83
89
1/
2/
3/
1/
Con-iled 'o^ the Ta.nr.ers Council of America, acting for the American
Tanning Extract manufacturers Association, as reported by complainant.
3ased on data furnished by Tanners Council of America.
Tot available.
1927 and 1929 - 100.
9829
-604-
Table 2: Trend of exports and domestic production of chestnut ex-
tract in terns of 25 per cent tannin content.
Year '
Domesti
procucti
1927
323,527
1928
384,429
1929
323,427
1930
r ;36 , 162
1931
269,284
1932
218,089
1935
241,770
In t housands of
Exports
■ . 19,784
25,291
'29,968
. . 25,855
'. ', 26,968'
. .' 36 , 178
' 45 , 752
£2]i£^.?JL ,..
Ratio of exports
to domestic
production
Per cent
6.1
5.6
9.3
7.7
; 10.
16.6 :
18.9
As shown in the. above table, during the period from 1927 to 1933 dom-
estic production declinec. 25 per cent, while exports increased 131 per
cent. This resulted in an increase in the ratio of exports to domestic
production from 6 ~oer cent in 1927 to 19 per cent in 1933. Available sta-
tistics indicate that the trend of exports has continued upward during 1934.
.Quebracho Logs
Quebracho logs which constitute the raw material for the two domestic
producers of fresh ouebracho . extract are imported into the United States
free of duty. Table 3 shows the trend of these imports by years since 1926
in total and by customs districts. Quebracho logs yield approximately 21
per cent tannin, therefore their potential yield in terms of 25 per cent
tannin extract amounts to about 84 per cent of the weight of the logs.
These logs can be stored for an indefinite period. It is reported that the
domestic industry has a supply considerably in excess of its requirements.
9829
- 605 -
Table 3: Annual imports of quebracho logs, by customs
districts and total, with indication of -ootential
yield of extract.
Now York
Total :
Total
Year
Mobile
end
imoorts :
■potential yield of
Philadelphia 1/
extract 2/
In thousands of
Tor
5,97^
is of 2,2^0 nounds
26.09U
32,062 :
■oounds
1926
60,352
1927
17,170
^3,756
60,926 :
llU,6b3
192S
22,320
^7,675
75,995 :
1^3,023
1929
23,260
46,7^2
70,602 : ■
132,22*1
1930
lk,k9Z
29,622
l+U,llU :
23,023
1931
15.3^
U0.052
55,396 :
104,255
1932
U.95U
2,429
13.3S3 : -
25.1S7
1933
133^
(6 mos,
-
20,115
'20,115 : <
37,S56
.) -
36,710
36,710 ft,
• 1
69,022
1/ Ooerations of one oroducer transferred from New York to Wilmington
in 1927.
2/ Twenty-five t>er cent tannin content. ■
The ruebracho Industry in Argentina and
Paraguay
The "uebracho tree 'is only native to South America and
commercially exploited in Argentina and • Paraguay . The
heartwood of this tree from which the extract is obtained is
extremely hard, having a density of 72 -oounds -oer cubic foot.
Extraction was first undertaken in Argentina about 1220, but
did not reach substantial -oro-oortions until early in the pre-
sent century "hen plants were established by the British Forestal
Company, and several German and French companies. As early as
1272 a small plant was erected in France for the extraction of
tannin from imported quebracho logs. Further development
later took clace in several Eur or) e an countries. The expor-
tation of the solid extract aroduced by plants in Argentina
and Paraguay increased raoidly after the World War, and dur-
ing the same neriod the exportation of logs declined. Com-
pars.tive figures showing the relative -imrjortance of the two
types of exports are given in Table H.
9229
- 6o6 -
Table 4: Exports of quebracho logs and extract from Argentina and
Paraguay, both in terms of- obtainable extract of 25 ^er .cent .tannin
content.
(in thousands of ooundf )
: Logs -
Solid quebracho
Period
tannin content
extract
Annual averages
1891-1900
217,473
7,735
1901-1910
:. 472,515
179,5b2
1911-1920
: 377, S60
596,295
1921-1930
: 212,867
1,267,160 ,.
,
Annual totals
.
f
f
1925
206,9Ul
1,739,320
1,563,%7 ,
1927
240, 204
1928
309,945 -
1,535,091 ,
1929
300,733 •
1,186,211 ,
1930
262,202
1,109,736
1, 315,144
1931
i5S,;6f3 r '
1 1932
101,560
1,4.72,966
1933
187,700
1/1,600,000
1/ Estimated.
The industry' in Argentina and Paraguay expanded more
than the world demand for quebracho justified and, after re-
peated attempts to control output, the Forests,! Land Timber
and Railways Company, Ltd., which has always been the .largest
producers, arranged exclusive export marketing contracts with
the other producers. This cartel arrangement functioned
satisfactorily from about 1927 to the middle of 1931 ^7 main-
taining prices at an artificially high level. luring the 12
months p.fter its dissolution, the price of quebracho dropped
nearly 60 per cent, and has continued at a relatively low
level ever since.
The quebracho extract producers in Argentina and
Paraguay have been striving, so far unsuccessfully, to de-
vise a substitute plan for the cartel in order to restore
the industry to a profitable basis. The producers, with the
exception of three' large companies which are foreign-control-
led, presented a petition to the Argentine Government propos-
ing that the Government take control of the quebracho extract
industry for the purpose of rationing production on a level
with consumption, and also urging the Government to embargo
the export of logs. The petition asserted that (l) the oro-
ductive capacity of the plants in Argentina and Paraguay was
sufficient to supply world needs for quebracho extract; (2)
foreign plants using Argentine logs depended upon high tariff
barriers to offset the handicap arising from their uneconomi-
cal location; (3) the greater value of the solid extract would
yield additional foreign credits to bolster the exchange value
9829
- 607 -
cf the peso; (k) the value of foreign plants would not be de-
stroyed if log exports nere prohibited since these plants could
make extracts from other materials and continue their present
practice of -ore-oaring liquid extract from imported solid que-
bracho; and (5) ten of the leading companies suffered an
average loss of 3*7 P er cent on caoital investment in 1932*
Trro of the larger companies, -rhich are foreign-con-
trolled, oppose the plan advanced by the remaining -oroducers
insofar as it relates to the embarg of log exports for the
re? son that they operate fresh extra.ct plants in foreign con-
sumer markets.
Table 5 compares relative productive capacity, total
exports, and exports to the United States, of the leading pro-
ducers of solid quebracho. extract in Argentina and Paraguay.
Two of these companies, ship to corporate affiliates in the United
States which quote to llorth American tanners on dollar terms, f.o.b.
cars, American port. These two companies are very large, and
have played a prominent cart in the United States import market
for quebracho in the past. The importance of one of them in this
respect is greater than its shipments of solid extra.ct indi- ,
cate, since it --lso supplies logs to its fresh extract plant
in the United States.
9323
- 603 -
Table ^>: The quebracho extract industry in Argentina and Para-
guay, with indication of capacity and exoorts, in metric tons of
solid of 63 "oer cent tannin content.
Name
: Exoort
: shiamen
bs
of
■ Registered
: capacity
i To all countries
: to U.
5. Ports
producer
: caoital
: production
1932
: 1932
: 1933
-1,000 -oesos
Orjerat:
mz in Argentina
Forestal
54,117
165,156
97,145
■ 14,192
: 31,097
Colorantes
1,000
9,600
3,630
483
: 529
Del Norte
500
6,000
5,900
i 392
1.931
Pfahl
• . 500
: 2,000
313
: -
Curtiunidas
500 .
18,000
! ' —
—
: —
Del Yuto
600
6,000
544
: 323
: —
Fusianados
7,000
■ 36,000
lSyOHO
. 1,922
—
Fontana 1/
4,000
20,500
—
-
Chaquana
5.11U
IS, 000
753
: 1
: S45
No e tinge r
2,415
16, soo
15,126
367
-
Atorrasagar
sti
1,000
15,000
2,440
1,494
249
Curtientes
500
15,000
1 ? 1 z.Z
11,725
7,498
Franc ia-Arg,
soo
7,596
852
! 5
-
Jalon
525
7,483
-
-
-
Sarauhi
i,4oo
7,200
7,454
.3/771
2,550
Fern, Fenian*
l.V 600
6,980
1,732
444
257
Noruego-Arg,
750
5,4oo
1,723
350
-
TTelbers
1,000
4,500 :
4,969
405
446
Las Palmas :
600
4,000 :
135 .
-
394
Dubosc
1,108 :
7,000 :
4,909
752
299
Formosa
2,000
IS, 000
9,216
151
1,560
Oners
it ins in Paraguay
Internation-
al Prod-
ucts Co.
3,000
36,000
22,902
Carlos Casa-
do
7,955
21,600
8,369
Puerto
Sastre
4,S24
27,000
9,590
Puerto
Cuarani
1,750
15,600
3,031
6,983
42
12,24l
Ui4
2.60G 3O3
1/ Export handled "by Fores tal.
Course of Imoorto
Table 6 shovrs the trend of the quantity, value, and unit value of im-
ports of solid quebracho extract "Inch is the subject of comolaint.
The increase in iimorts in late 1931 and during 1932 v:as due in nart
to the cheaper 'orice of the solid extract resulting from breakdown
of the Argentine export cartel.
9829
- 609 -
The trend in 1933 '""' r - influenced "by speculative pur-
;] ses mpde in rntici i-tion of higher n-ices resulting from the
rise in the dollar vplue of the oeso.
A com \T' tivel insignific nt ->ro->ortion of the im-
ported extrrct is reerroorted, orincipally to Canada. The trend
of reexports h-s been dcviva-. d since 1926, hen they amounted
to sir tenths of 1 ner cent of the "mount of innorte.
Table 6: Imports of solid quebracho extract , in terms
of 25 ^© r cent tannin content.
Thousands
: Thousands : Do.llar value
of. pounds
of dollars' : "our. 100 oounds
3y years
1926
284,273
: 3,721
$1.31
1927
311,910
: 4,304
1,57
1928
270,528
: 4,301
: 1.59
1929
228,969
: 3,7^
: I.63
1530
243,975
: 3.328
1.57
1931
263,377
: 2,435
1932
290,344 :
1,79S
1933
345,366
2,5^5 :
•i u
1933
By quarters
Janup
ry-fe
rch
66,556
: 37^
: .56"
Aori]
-June
37,280
: 214
.57
July-
Septe
rnber
87,572
: 625
.71
October-De
cember
153,958
: 1.331
.86
1934
Janus.ry-Ir
rch
122,903
! 1,073
.37
Aoril
-June
65,62b
: 519
.79
Since 1926, New York has drooned substantially in importance as
a "oort sf entry for solid quebracho extract, and the customs districts
of Virginia and IJaryland have increased in importance. Table 7 shows
the ^ercentr e of tot->l inroorts through the -orinei-oal customs district:
since 1926.
IZS
-61D-.
Tabl3 7: Perc^ntara o^ total' irroori
r 5lio. auebrach'
-orinci-oal cr.stonis districts.
cormetition with domestic fresh ouehracho' e>: tract ,and, to sore
e;-t<5irt, nith doriestic chestnut sxtraet. Tr'ole 8 shoTS a cora-
oarison of the trend of domestic product i V- of fresh que'bracho
and of chestnut extracts with the trend of imorts of .solid
q etiracho extract.
Peri"d
I e-
} Ian sa-
Pl-ila-
San
Connecti-
3y years
Yo: ]'.
:chuse'tts
d.el-ohia
fir^inia: Kd.
I i-an.
cut
192 :
79
9
2-.
6 : o.3
4
„
1927
7C
r»
4 •
13 : G
3
-
1S20
64
9
7
18 : 3
i:
-
192?
44
9
21
22 ;---4" -
.8
-
19f0
52
15
10 •
24 : 17 '
.7
• 2
] r 31
37
24
11 '
16 : 11 '
.7
'1
1932
31
. 25
6
15 • i c
.5
.2
1933
29
n
n
O
26 : 24
.7
■ : 3
Hatio of iiroorts to ^reduction
•
In-
iorts
of s~l..d
ouehrac":
lo e::.tract cb: \ ;
i--.to t
"irect
9829
-611-
7;' 1< B: ... io of co'i, 1 quebracho extract inroorts to
donestic production of chestnut and fresh quebracho
extracts.
: Inroorts
: Ratio of
Period
: Domestic Product
ion
: of
; solid
: inroorts
i : Fresh
i
i
: to
; Che sinut : quebracho
: Total
: quebracho
: production
' In millions o.
Z r> v.mC. s (
jf
By years
; 25 -~>er cent extract
: Per cent
192?
324
: 116
: 439
: 312
: 71
1929
323
: 125
AAO
: 229
: 51
IS 30
- 336
: 1/
; ij
: 244
« u
1931
: 269
■ C7
1 *-' <->
: 562
253
\ 70
1 c M
— *' l_^ —
218
: 39
: "57
1 290
S 113
1 c-v
242
> 44
: 286
: 345
: 121
By auatte* s
l£ r 3
Januar "-if rch
45
: 7
: 52
: 67
127
Anril-June
» en
: 10
: 65
38
: 57
July-Se-it cno ?r
70
! 13
! 83
88
: 105
Oct.-D--c- «:
71
13
: 84
154
: 182
1934 :
Januar -LI" re': !
70
!•
80
123
153
Aoril-Jun : !
70
11
81 !
66
81
3y months :
25
4
! 29 !
55
January )
224
February :
21
»_,
t 24 j
30 :
125
March !
2<
o
27
27
101
Aoril !
24
3
27 !
22
80
May <
23
4 :
27 :
25 j
94
June ;
23 !
4 «
27 !
19
71
Jiily !
*»
— j
— i
25 !
_
August :
—
— J
— !
17 :
-
1/ Production not rooort
;c
From
-'or~z r -'"- table, it r.iay be noted thft th
rrtio of imports of solid cu fcracho e::t: act to domestic ora-
duction of chestnut and fresh quebracho extracts -as much
hirher in 1932 and 1933 than in former years. As erolainec
in detail elsewhere in this report, this -as principally on
account of increas a iiroorts o-.'ing to a sharp decline, inihe
price o:: th imported solid quebracho extract which 'resulted from
two factors: (1) Zrea'rdovn of cartel control in Argentina,
and (2) the decline in the exchange value of the Argentine oeso.
9329
-612-
This shan decline in price mF,cle the domestic production of fresh
quebracho iron the inrnortec 1 logs relative!" xurprof itable.
As sho v 'n in Telle, 8, the -oroductior. of domestic extracts
increased substantially during 1933. The sharp increase in the
ratio of imports to production in. the latter part of 193-7 and early 1934
resulted from ebnomally large inserts in anticipation of rising
costs due to the de-oreciation of the United States dollar.
lionthly data in the table sho - " 1 that; rhile the domestic
production of chestnut and of fresh Gue.rac' o extracts: remained
relatively high through the final montr r sorted by the complainant,
the imports oi solid quebracho errtract declined almost: steadily
fron January to August of 1934. As r consectuence, '.n June, 1934,
the ratio of imports to Tjroductior declined to vh.ri might be
termed a normal level, namel ■-, that nhich nr vailed in. 1927 and
1931. :
Imoortant Corroetitivs factors
C onn o t i t i on b e t ■-• ~ - n ye ';e - ell-- _ : nd_cj L suical tanning c gent s
In addition to the extent to "rhich leather products have
been displaced b; rubber substitutes - particularl;* rubber
and textile cannosition belting arf s'ree soles - vegetable
tanning agents have suffered sOmerrhat in competition -ith
chemical tanning agents. This is indicated in the follorring
table shoving the trend of production of vegetal] B- tanned and
chemical-tanned heavy leather in recent years.
Table 9 - Trend of production of vegetable- tanned ■
and chemical—tanned he-aw leather.
Total
:
2.
evtio of
of
:
V
3 get able
tanne 6
•
t
Mined tc
cowhides
1/:
+;
Dtal 2/
In thovis;
•
•
vnds
Fer cent
1927
21 , 824
■
47.. 7
1928
20,2-
:
• 50- 4
1929
19,147
:
■ 49.4
1930
17,674
:
! 3.4
1951
J. O j CCu
:
47.1
1932
14,583
:
44.3
1953
16,941
.
59.3
1/ from "Survey of Current Business."
2/ Data on production of vegetable-tanr
Tanners Council of America.
Indices "be- o eel or .927
: production
Ve/
tabl
-5 mm
■ Che-
rical -
.eel"
2/
tanned
100
IOC
98
8C
91
85
91
72
75
75
,62
71
65
P9
ed leather furnished b T r
982^
-613-
As shown in th • above table, vegetable tanning agents
have encotuiter d gradually increasing competition from chemical
agents - principally chrome - during the past several years.
As compared with a drop of roughly 22 per cent iron 1527 through
1S33, in th-- number of cattle hides tanned, the consumption of
vegetable tannin ; onts declined 35 per cent, and th. t of
chemical a-rents declined only 11 per cent.
Inter-rel ationship of veget able tanning extract s
Vegetable tanning agents utilized by manufacturers, of
leather, either in the raw forn or a„s extract, are commonly
classed iv t"0 "roups - pyragallols and catechols - each of
which has properties that are essential in the proper -'tanning
of heavy leather. Chestnut is the nost important pyragallol
and quebracho the principal catechol. Chestnut and other
pyragallol agents impa.rt ol-empnoss, durability, cuttirg equality,
and dull yello- or browr. color to leather*. Quebracho and other
catechols impart flexibility, resistance to -ater and chemicals,
and brighten the color of leather i nd hasten the tanning -orocess.
distinct properties of each roup fix the relative amounts
of t". 2 two which tanners must use in the .preparation of blends
needed in the tanning o: n leather to meet particular specifica-
tions. Contrasted with ■• the United interchangeability between
groups, in nost uses various agents within each group — for
example, th: catechols: qu.ebra.cho and rattle - nay be substituted
for each other to a. conside: able extent without alt u-ing the
character of the tanned, leather.
With reference to the question of competition between
chestnut and quebracho' extracts, the relatively narro 1 ■ limits
within nhich they may 'be substituted for each other in the
bulk of the leather tanned, of necessit:" limits the 'extent
of the actual competition between the !• .As a ma.tter : of fact,
the demand for leather over a period of .years has been pre-
dominantly for those grades and Qualities in the tanning of
which the range of- substitution between chestnut and quebra-c] o
extract was limited to roughly 10 per cert. To that extent,
the tanner was able to take advantage of a relatively 1o t -
price for one or bhe oth'-r extracts in order to reduce his
raw material costs.
Price relationships
- price of imported solid quebracho directly in-
fluences ths price of domestic fresh quebracho for the reason
that the two extracts are interchangeable in us- . In contrast,
the data sho-n in Sable 10 indicates that there is little, if any,
correlation between the price of imported solid arc' the price of
domestic chestnut 3xtra-cts.
The price of chestnut extract is mors directly influenced
by conditions in the leather tannin'- industry than by the quantity
or price of the quebracho imports.
9829
-614-
In fact, since September, 1933, th price of chestnut extract has
"been slightly hi her than the average for the years 1928 and 1929,
! .Thile the price of iuroorted solic" quebracho e:-:t. r :,t has "been a-o~oro::i-
mately 40 per cent belo 1 " the level for the sf.-T.ie "cars.
Tr"ble 10; Comparison o: r trends, of avera ye domestic marmot
•or ices for "orincipal tannin--; extract and general
vrholesale -3ric.es.
Indices
of -orices l/
Statistical
' Imported
~lr e sh
General
period
! soT id
done fit ic
Chest
■ hole sale
quebracho .2
Quebracho
: nut
■orices 3/
1926
100
100
100
100
1927
112
100
104
95
1928
11s ■ ■
100
90
97
1929
117
' 108
95
1930
113
100
92 '
83
1931 -
January-June
00
■1r-
: 92
75
July-Dece-iber
62
57
85
71
19:2 -
J anuary- Jun e
45
57
82
65
July-Decemb er
45
57
ri A
64
1933 -
Janue.ry-i.Iar ch
42
: 67
74
60
April-June
48
67
• 74
63
July-Se-ot emb er
69
: 57
82
70
Octofeer-Decenb' r
72
57
92
71
1934 -
January-liar ch
S3
7S
92
: 73
April-June
65
79
92
' ' 74
1/ ~l:tract -orices furnisl & "by coi:nlainant.
2/ Prices quoted by "reyular" inoorters, plus dutj".
3/ Bureau of Labor Statistics.
oo n n
3 0GJ
—615—
Trend of prices in relation to cons umption
The next table shows a comparison of the effect of the relative
price changes of imported solid quebracho, domestic fresh quebracho,
and domestic chestnut extracts, upon the extract consumption per hide
of leather tanned by vegetable tanning agents.
The table shows that imported solid made substantial gains at the
expense of the domestic fresh quebracho extract quoted at a premium.
However, despite the fact that the price of the imported solid extract
was very much below the price of domestic chestnut extract, the per-
hide consumption of chestnut has continued at much the same level as
formerly, indicating that the two extracts have rather definite limits
of interohangeability.
Table 11: Comparison of the trend of prices and the per-hide
consumption of chestnut and quebracho extracts l/
Tnrl-i nes of -
Chestnut
Quebracho : ; ■-
'. ■ . i
Imported solid. :
Domestic fresh
Prices ! Per-hide
: consumption
Prices
per-hide •
supply
Prices
Per-hide
supply
1927
1929
1931
1932
1933
100 '. 100
&5 : 106
85 : : 109
75 : 97
: 77 : : 100
100 :
: 104 :
: 72 :
: 41 •
! 51 :
100 •
81 •'
: 110 :
: 150 :
: 171 :
100
108 ''
: 77 :
: 67 :
: 67 '
: 100
: 120
: 109
: 55
: :59
=L No allowance has been made for changes in warehouse^ stocks.
However these were not particularly' significant until 1933.
Note: Per-hide consumption of chestnut extract in 1927 was 29.2
pounds, of imported solid quebracho extract 30.0 pounds,
and of domestic fresh quebracho 11.1 pounds.
The limit of displacement of chestnut by quebracho extract is
further indicated by the fact that' chestnut imports into Germany held
up well during the period 1928-1933, whenHamburg prices starred at 424
per metric ton for Argentine quebracho extract and 423 for Italian
chestnut, and finished at 413 and ^25 respectively.
Currency fluctuations
Since 1931 the Argentine peso has been pagged successively to
the pound sterling, the dollar, the French franc, and then again to
sterling. lable 12 shows the trend in the gold value of the peso and
of the dollar and the exchange value of the two currencies. It may
be noted that the gold value of the peso declined approximately 40
per cent from 1928 to April, 1933, when the dollar began to depreciate.
During 1933, when the dollar was depreciating most rapidly, the g*»ld
value of the peso remained steady, resulting in an improvement of ap-
proximately 57 per cent im the peso-dollar exchange from March to Nov-
9829
-616-
ember of that year. In November, 1933, the Argentine Government
arbitrarily reduced the value of the peso about 17 per cent.
Table 12: Course of fluctuations in United States
and Argentine currencies.
Indices
of trend .
Peso-dollar :
Appreciation
of
in gold exchange :
value based on :
exchange rate
peso against
the dollar
United States :
100- currency's par:
cents per sold peso
after 1932
Peso
Dollar
Par i
(100)
(100) .
(96,48)
1928 average
100 ;
100 :
96,48
1929 average
99
100 :
95.13
1930 average
37 :
100 !
83.51
1931
January
72
■ 100
69.70
October
64
99
*52.00
1932
January
60
: 100
: 58.27
October
: 61'
100
: 58.58
2933
March
60
99
: 58.30
!■ —
April ;
: 60
! 96 :
: 60.49
I: 3
June :
. .■ 60
: 82 ■
: 71.06
: : 21 '
August :
: 60.
! 73 :
: -79.43
: 36
November
: ■ 60:
: 63 .
: :9 2.04
!: 57 .■
December :
: 50:
64 :
: 75.75
:• 29 :
1934
January
: ,5©
63
: . 76.14
: 30
March
: 48
: 60
: 77.18 -
: 32
June
: 47
. . . .59
76.50
: 31
•
Source: Federal Reserve Bulletin .
Influences of currency fluctuations on quebracho import volume
The Buenos Aires market quotation for solid quebracho,
extract, which had. stood for. some time at around 96 pesos
per metric ton, dropped rapidly after the breakdown of the -ex-
port cartel late in 1931, reaching a low of 46 pesos late in
1932.
9829
-617-
Gradual devaluation of the pes- during 1931 and 1952 accentuated the decline
in the erst of the solid extract in terms of dollars.
During the ten-month period from February through November of 1933 when
the Buenos Aires quebracho market price remained constant at 59 pesos, the
full 57 per cent improvement in the peso in terms of dollars was reflected
in costs of quebracho imported into the United States. Import costs dropped
at the end of November in direct ratio to the 17 per cert devaluation of the
peso.
Inasmuch as the solid quebracho extract can be readily stored, heavy
purchases by American tanners and accumulation of stocks by importers during
1935 were motivated by the fact that the price of solid quebracho (already at
low level following the breakdown of the Argentine cartel) , was bound to move
upward as a. result of the advance of the peso- dollar exchange. This situation
doubtless furnishes the principal explanation for the exceptionally high
volume of imports during the second half of 1355. The influence of the
exchange situation of speculative purchases is further indicated by the degree
to which the volume of imports declined during the period of relative ex-
change stability, i.e., from January to August, 1934.
Structure of the Solid Quebracho. Extract Importing Business
Two prominent companies with sales offices in New York solicit orders for
imported solid extract, quoting in dollars on landed basis. These two firms
are members of the tanning extract industry operating voider the code. The
complaint filed by the code authority prays for relief from imports received
through other channels at "distressed prices. " It designates these two
companies as "regular" importers and describes other imports as handled by
"independent" importers.
American tanners have the option of making their solid extract purchases
through those two "regular" import firms, or of purchasing direct in the
Buenos Aires market. In acquiring direct supply of extract, the American
tanner usually entrusts the purchase to the branch office or agency in Buenos
Aires through which he regular 1: receives the bulk of his supply of raw hides.
The tanner may also place his direct- purchase order through brokers in New
York connected with Argentine shippers.
)
By making his extract purchases from "regular" importers, the domestic
tanner has effective means of redress for claims, secures prompt delivery, and
avoids tie-up of funds in irrevocable letters of credit. Furthermore, he
knows his costs without bothering with the purchase of foreign exchange in a
restricted market. On the other hand, if the American tanner carefully studies
the Buenos Aires market and is representee, there by a competent agent,, he is
in a position occasionally to buy closer to the market, but not, however,
without certain attendant risks in the event of deficient weight, quality, etc.
Purchases through brokers in New Y rk involve even greater difficulties as far
as concerns redress for claim. Follow-up orders placed by tanners^ are con-
tingent upon satisfaction. The tanner has a check on quality in the course of
utilizing" the extract, and he is able to measure his cost in terms of net tan^
in content.
9829
-613-
Table 13 shows exports by individual shippers in Buenos Aire:- .wring
recent quarters, as compiled from official Buenos Aires port records "by a
private statistical agency. The shipments shown for the first three companies
were made to affiliated lompanios in New York, i.e., "regular" importers.
Shi men ts made b^ the other firms listed in the table were invoiced to Ameri-
can companies described by complainants as "independent" importers. The
record of shipments shov/n in Table 13 indicates that American "brokers took
very little part in the abnormal volume of business during the latter part
of 1S33, and tha.t the Buenos Ak es brrnch offices or hide purchasing agents
of American tanners handled the bulk of the "independent" business during
that period.. The table also shows that shippers to se-enlled "independent"
importers handled roughly 50 per cent of all shipments to the United States
during the first half of 1934, as compared with only 21 per cent during the
first cpartcr of 1933.
Table 13: Solid quebracho extract despatched to the United
States by principal shippers in Buenos Aires during recent
quarters, in terms of extract of 35 per cent tannin content.
( Uni t- 1 , 00 , OQC pounds)
c
t.-Dec.
J an. -Mar.
Apr.-Ji
me.
Jhly-Sept.
Oct. -Dec.
Jan.— Mar.
April
X
1932
1333
1933
1933
1933
1934
C: nay
Sh
ipments
to
"re u.lar":
importers
Foresta.l
33.1
22.8
21.0
67. 5
81.6
13.2
13.0
Internation-
al Products
Company
19.6
11.0
18.2
20. G
TO D
16.7
10.1
Cie Francia
3.0
3.7
.6
-
-
-
-
Shipments
to
"independe
nt" import
ers
Tanners
*
Trading Co.
22.
6.4
8. 3
20.2
29.8
23.9
15.6
Rod Silva
-
-
3.5
6.6
9. 3
5.8
Clarendon
2.8
1.6
2.
1.1
—
1.5
.9
Kistler
Trading Co,
-
-
-
—
3.1
3.1
—
Oakshect
i.e
c
1.6
o R
2.4
-
.7
Otto Lacker
9 *~>
.9
.6
.6
-
-
-
e
Wil .iams
Chemical Co
• ■""*
—
—
—
—
2.4
1.2
Total
82.6
47.3
&i?« 8
124.1
146.3
75. 1
45. 3
Per cent
shiijoou to
"regular"
importers
66£
795i
71',
7?p
71$
46;,
50£
Source: Boletin Mariti
no.
9829
-619-
The Turners Trading Company, shown in Tabic 12 to be the principal shipper
to "independent" importers, was established some years ago in Buenos Aires by a
group of prominent American tanners to handle their purchases of hides. Eod
Silva conducts a commission business in Buenos Aires acting as representative
of a number of American tanners for their purchases of hides on letters of
credit. Clarendon is e hide buyer acting as commisi ion agent for several
American tanners. The Kistler Trading Company is a subsidiary of an American
tanner. Owing to their close and long-existing relation with Anerican tanners,
shipments of these four firms undoubtedly resulted from buying orders placed by
the tenners without resort to American brokers as intermediaries. It is pos-
sible that some of the shipments were invoicec. to third parties in I T cw Tor 1 .: or
other ports, but these third parties served as little more than customs brokers
and freight forwarders.
Otto Lacker and Oaksheet serve in some instances as hide buyers for
American tanners, but they are identified also with hide brokers in the United
States. Extract purchases placed by tanners through Anerican brokers would
probably be passed to one or the other of these two firms. The shipments of
the Williams Chemical Company, shown in the two final columns in Table 12, are
reported to have been offered to American tanners through brokers.
The sta.temnent is made in the complaint that "it is not unusual to find
South Anerican firms not directly interested in the Quebracho business who
purchase Quebracho in the Argentine and Paraguay, shipping it to the United
States for sale in order to establish credits in this country and in that way
evade the Argentine capital export prohibition." Available information points
to the conclusion that this type of transaction v'as not frequent or important
in the qu.ebiacho extract export business. It involved circumventing the system
of foreign exchange control then exercised by the Argentine Governement.
Quebracho extract was orominent among the export commodities for which the
shipper had to show actual sale of his foreign currency draft to the Banco
de la llacion at the official exchange rate, before he could obtain export
despatch papers. Even if an importer who had been refused foreign exchange
had been able to convert his peso account into : commodity, such as quebracho
extract, he still would have had to sell his foreign draft covering the export
sale to the Banco de la llacion before he received his shipping permit.
Causes of Increased. Resort to Direct Purchase
Table 14 indicates the rising costs of the solid extract which prompted
American tanners to order beyond current needs, both by direct pure ase and
through the intermediary of "regular" importers. An additional factor, which
appeaxs to have encouraged direct purchase during certain late months in 1S35,
was the abnormal spread between the cost of direct purchases and the cost of
purchases from "regular" importers. The two final colv-mns in the table give
a c son cf these two costs, up to payment of duty. It will be noted tnat
from the normal amount of roughly 10 cents per hundred pounds, this spread
increased to ever 30 cents during certain months of active dollar depreciation.
This probacl; resulted from the fact that the "regular" importers, presumably
to insure coverage of higher replacement costs, increased their quotations at
a faster rate than the actual rate of increase which took place in the cost
of direct purchases. It will be noted that this price spread was reduced in
December by a decrease in the quotations of the "regular" importers. Con-
sequently, the price spread, while still abnormal, was less in June, 1934, than
during the third quarte: of 1933.
9829
-620-
Table 14: Comparison of Buenos Aires market prices ?nd import unit
values; also comparison of landed costs of direct purchases
in the Buenos Aires market and ex-clock Dirchases
3iienos
Ai
res mark
et
Am
■erage
Landed cost
Ex- dock
P. A. S.
qu
otat ion
1/
uni
t value
of direct
quotation
Month
As actu-
Convert
ed
of
imports
purchases in
of domestic
ally
to U. S
•
for the
Buenos Aires
"regular"
quo ted
i
currency
2/
month
market
importers Zj
Gold pesos
per
metric ton
I
n cents
•per 100
poinds of 25fj extract
1931
••
June
96
109
136
126
134
September
78
75
82
92
98
December
66 '
63
73
77
09
1932
March
58
55
71
69
71
June
51
48
68
62
71
September
46
44
58
58
71
December
52
49
55
53
71
1933
March
59
56
63
66
67
April
59
58
57
68
67
May-
59
65
57
75
80
June
59
68
59
78
80
July
59
77
59
87
98
August
56
72
73
82
107
September
55
77
73
87 ,
120
October
56
78
82
88
120
November
59
88
84
98
120
December
61
75
94
. 85
103
1934
Jrnuary
63
78
95
88
103
February
60
74
80
84
103
March
59
74
70
84
103
June
59
73
79
83
108
1/ F.A. S. quotation as posted by the Buenos Aires Board of Trade for solid
quebracho extract on first Saturday of month indicated.
2/ Converted at average exchange for the month indicated.
Zj Furnished by complainant.
9829
-621-
A stud^ of unit values of monthly exports of Argentine solid quebracho
extract to the United States ant to other countries does not reveal my
invoicing to this country below the unit value of exports to other countries.
Comparison of rverage monthly unit values shown in column 3 of the preceding
tabic and the dollar equivalent of the Buenos Aires export market quotations,
as shown in column 2, serves as another indication that shipments to this
country have paid the full Buenos Aires export market price (if, in con_ aring
these two columns, allowance is made for the normal lag between purchase in
the Buenos Aires market and clearance through American ports).
Effect of the National Industrial
Recovery Program
Effect on labor
Statistics relating to employment and payroll were submitted in support
of tlic complaint for the two fresh quebracho extract plants and for eight
chestnut extract plants operated by two companies out of a total of 19 plants
in the chestnut branch of the domestic extract industry. These data., shown in
Table 15, are believed to be sufficiently representative to indicate the
general trends in the domestic industry, showing roughly the changes which
have occurred since adherence to the President'' Reemployment Agreement and
during subsequent operation under the approved code for the tanning extract
industry.
98 2£
-622-
Table 15: Trend in employment, payroll, man-hours, and
productivity of labor in the domestic tanning
extract industry
Month
Number Average
Extract of Payroll Llan-hours Ou.tput
output workers per
man-hour
1.0C0 lbs.
Dollars
Pounds
Payroll
per
man-hour
Cents
Two fresh quebracho extract plant ;
1929- Jul y
10 , 614
142
12,749
29,118
365
1935- April
4,144
51
3,705
9, 343
448
July
4,194
77
5,798
15,790
266
Octob
er
4,857
123
3,253
19,977
243
1934- April
1/
4,176
111
7 , 645
1C,460
226
40
37
41
41
Percentage
change since
July, 1933
-4£
44£
32£ 17Jb -15p'
Eight chestnut extract olants
1929- July
15,572
470
1932- April
9,055
277
July
13,870
344
October
14,164
497
1934- April
14,815
492
Perccr.tr ,e
change since
July, 1933
7;S
43,
38,385 124,193
17,132
22,770
34,222
50 , 642
39)3
60,387
81 , 040
89,614
7S,76 r '
-.S'j
124
150
171
158
188
10p
ns
50.9
23.3
Ijlla . '
1/ Data for the month of May used for one plant.
9829
-62o~
From data in the foregoing table relating to the domestic Pro-
duction of fresh ouebracho extract, it will he noted that the number
of enroloyees increased 44 per cent from July, 1933, just Prior to ad-
herence to the President's Reemployment Agrement, to April, 1934,
and the monthly payroll increased 52 p<=r cent during the same period,
The 44 per cent increase in the number employed was paralleled by
an increase of only 17 per cent in man-hours of enroloyment. With prac-
tically no change in the level of production, the average productivity
per worker declined 15 per cent.
From data in Table 15 relating to the operations of the eight
chstnut extract plants, it willbo noted that the number of employees
increased 43 per cent from July, 1933, just Prior to adherence to the
President's Reemployment Agreement, to April, 1934, and monthly pay-
roll increased 35 per cent during the same period. In fact, -employ-
ment in April, 1934, exceeded that for July, 1929. The increase in the
number employed was offset by a sharp decline in the average hours "f
employment per worker, resulting in a net decrease in the total man-
hours of employment. The 35 per cent increase in payroll was paralleled
by a 7 per cent increase in total output and a 10 per cent increase in
the Productivity per worker.
Effect on costs of prodcution
Table 16 shows the trends of labor cost of the chestnut and fresh
quebracho branches of the domestic tanning extract industry and the
selling price of their products in comparison with the trend of the
unit value of imports during recent yea.rs.
Table 16: Comparison of trends of labor costs, selling prices, and
unit value of imports
J. F or 1,000 pounds of extract of 25 per cent tanning content)
Hight chestnut
Two fresh quebracho
Period !
extract plants
extract plants
Value . of
Labor
Selling !
Labor
: Selling
imports
1/
cost
price
cost
Price
1929 - July :
$2.50 ;
Sl5 !
1.20 !
23.20
$16.25
1933 - April'
1.89
12 :
.89
14.30
5.70
July
1.64
12.5
1.38
14.30
5.96
October
2.42
15
1.70
14.30
8.20
1934 - April
2.07
15
1.83
16.90
7.90
Increase
since July,
1933
: 264
204 :
33$
: 184
334
Approximate r-
^tio of
<•
labor erst t
3 sell-
ing price
: 14$
ll c
\
:
1/ Solid quebracho extract
It is net possible to state the amount of the total increase in
costs of prcdu: ing .chestnut and fresh ouebracho extracts for the reason
that complainants have not submitted co^t data other than the item of
lab or .
9829
-624-
Frora data shown in Table 16, it will be noted that the labor cost
per unit of chestnut extract increased ?6 ner cent from July, 1933, to
Anril, 1934, and the labor cost ner unit of fresh auebracho extract
increased 33^ during the same neriod. Roughly sneaking, the labor cost
item represented 14 per cent and 11 ner cent, respectively, of the
selling -prices of the two -products. Therefore, these increases rep-
resent less than a 3 ner cent increase in total co^t as indicated
by selling nrices, and this increase wa.s offset by increa.ses of 20
ner cent and 18 per cent, respectively, in the selling prices of
the two products during that period.
The Competitive Position of the
Domestic Industry
The position of the domestic chestnut and fresh auebracho extract
industry, as compared with the conditions nrevailing nrior to adherence
to the National Recovery Program, may, in general, be characterized
as follows:
(1) The domestic production of chestnut extract was substantially
higher in the second quarter of 1934 than in the corresponding auarter
of 1933. The domestic nroduction of fresh auebracho extract remained at
a uniform level during those twi Quarters.
(2) Exnorts of domestic chestnut extract rose from 27 million
pounds in 1931 to 36 million pounds in 1932 and to 46 million pounds
in 1933. Available statistics indicate th?-t the trend ha.s continued
upward during 1934.
(3) Despite the fact that the price of the imported solid nueb—
ra,cho extract has been very much below the price of domestic chest-
nut extract, the ner-hide consumption of chestnut has continued
at anproximately the same level as formerly.
The relatively high level of production of r vegatable- tanned '. ■
leather resulted in a decline in the chestnut extract stocks in the hands
of all nroducers, according to data submitted by the code authority,
from 57,52B,000 nounds in July, 1933, to r55, 967, : 000 in ApriJ.,1934.
(4) After declining sharply from 1927 to 1929, imports of solid
quebracho extract increased steadily in quantity, but declined steadily
in value, to 1932. In 1933 there was a sharp upward movement in both
quantity and valixe of imports, reaching a peak ir. the last auarter of
1933 and the first month of 1934. They have since declined to approx-
imately the average level for 1931. The increase in imports of the
solid extract after 1929 was paralleled by a decline in the imports of
quebracho logs.
(5) The leveling off of import costs which occurred in December,
1933, ©wing to relative stability of dollar-peso exchange, removed the
incentive for further advance purchases, and, as a result of the heavy
speculative buying in 1933, import orders were reduced sharply and the
trend of imports continued downward during the neriod of comnaritive
stability of dollar-peso exchange from January to August of 1934.
9829
-625-
As a conseauence, in June, 1934, the ratio of invoorts to production de-
clined to approximately the level which availed in 1927 and 1931.
(6) The abnormal spread between "regular" importers' auota.tions
for s^lid auebracho extract and the dollar cost of direct purchases
which prevailed during 1933, owing to the fact that these quotations
were increased at a rate faster than the increase in direct import
costs caused by depreciation of the dollar, has since been reduced,
thereby diminishing the incentive for direct purchases by tanners.
(7) As compared with a net increase in cost, due to increase in
labor element, of less than 5 eer cent of total cost as indicated by
selling prices, and as compared with increases of 20 per cent and
16 ner cent, respectively, in the selling prices of chestnut and
fresh quebracho extracts, the unit val e of imported solid ouebracho
extract increased 33 per cent from July, 1933, to April, 1934,
and continued upward since that date.
Two important aspects of the problem in this case are presented
graphically in Charts I and II, which follow.
9829
v
8-
9829
-627-
CHART II.
Solid Quebracho Extract:- Comparison of shipments to "regular"
importers and to "independent" importers A. by volume, and B.
by cost to consumer/
A.
1932
1933
1934
9829
\
«628~
RUBBER ERASERS (No. 31 )
9029
INS-
TABLE of contents
Page Mb.
Complainants* strtus under the National Industrial
Recovery Act 631
Subject of complaint • 631
Description of commodity ■ — < ■ — 631
Tariff treatment 631
The domestic industry « ■ *• 631
Production in the United States - — 632
Exports — ; 634
Course of exports
The foreign market — ■■ 635
Imports -'-- 635
635
Imports sepr.rr.tely recorded for 1934 . — .
Import, date, obtained by invoice analysis ~— — • „
Course of imports ~ ~ — °
Imports in relation to domestic production 639
Important competitive factors — — ■ 649
Comparability of imported end domestic erasers ■ 649
Channels of trade 649
Domestic prices 649
(a) Range of domestic prices — b4y
(b) Stability of domestic prices ° 4 - 1 -
Average unit values of imports and exchange rates
64-P
Effect of National Recover;'' Program ^
Production costs —
Labor 644
9329
-630-
.1ST OF TABLES
Table _ Page
No. • • t-Tq.
1. Rubber erasers: Domestic production in- 1929, 1931,
and 1933 6:32
2. Rubber earsers: Production, 1929, 1931-Septnmber, 1934 633
3. Rubber erasers: Domestic exports, 1929 to October,
1934 i _ 6 34
4. Rubber erasers: Domestic exports by countries,
1929 and 1933 v 635
5. Rubber erasers: Imports separately recorded as rubber
erasers, at the port of Ne™ York and at all ports, first
ten months, 1934 636
6. Rubber erasers: Data obtained by invoice analysis of
all erasers imported at New York and recorded under
the classification of "manufactures of rubber, n.s.p.f.",
1933 to September, 1934 337
7. Rubber erasers: Total imports at Hew York, 1933 to
September, 1934 638
8. Rubber erasers: Ratio of imports at New York £0
domestic production 639
9. Domestic rubber erasers: Trends of weighted wholesale
selling prices, average unit export values, and
production, 1929, 1931 to September, 1934 S41
10. Rubber erasers: Costs of production of six pro lucers
for the first half of 193,3 and for a representative
period under the code — 643
11. Rubber erasers: Indices of employment, payroll, and
wages, 1933 and 1934 ~- -~r 545
9829
*»629-
TABLE OF C017TEFTS
Page No .
Complainants' status under the National Industrial
Recovery Act — 631
Subject of complaint ■ • ' °^
Description of commodity — — — • Dl - > - L
Tariff trec.tmont 631
The domestic industry • ■ • ■ ■-
Production in the United States - — r
Exports — ^34
n -P 4. 634
Course of exports ~ — ■ ■ '
The foreign market — — ' '
Imports ■ " ■■■■ " 53 ^
Imports separately recorded for 1934 ■
Inroort. data obtained by invoice analysis — — •
Course of imports — «—— ' —
Imports in relation to domestic production — "^
Important competitive factors — ~— 3
Comparability of imoorted and domestic erasers • 6/ * 9
Channels of trade — ; e jf
Domestic prices -
(a) Range of domestic prices
(b) Stability of domestic prices — 5
Average unit values of imports and exchange rates
Effect of National Recovery Program
Production costs — ~ ~. A
, . 644
Labor — — — —
9329
-630-
LIST OP TABLES
Table
No.
Page
la .
1. Rubber erasers: Domestic production in 1929, 1931,
and 1933 — 1— — ■ 632
2. Rubber earsers: Production, 1929, 1931-Septeraber, 1934 633
3. Rubber erasers: Domestic exports, 1929 to October,
1934 - -. 634
4. Rubber erasers: Domestic exports by -countries,
1929 and 1933 •? " 635
5. Rubber erasers: Imports separately recorded as rubber
erasers, at the port of Ne™ York and at all ports, first
ten months, 1934 63B
6. Rubber erasers: Data obtained by invoice analysis of
all erasers imported at Hew York and recorded under
the classification of "manufactures of rubber, n.s.p.f.",
1933 to September, 1934 537
7. Rubber erasers: Total imports at Hew York, 1833 to
September, 1934 638
8. Rubber erasers: Ratio of imports at New York to
domestic "production b 39
9. Domestic rubber erasers: Trends of weighted wholesale
selling prices, average unit export values, and
production, 1929, 1931 to September, 1934 S41
10. Rubber erasers: Costs of production of six producers
for the first half of 1933 and for a representative
period under the code ^43
11. Rubber erasers: Indices of employment, payroll, and
wages, 1933 and 1934 545
9829
-631-
SURVEY 01? INFORMATION
ON
RUBBER ERASERS '
January, 1935
Connlainants 1 Status under the National Industrial
Recovery Act
This is a report on a complaint to the President with respect to
imported rubber erasers filed August 20, 1934, by the Code Authority of
the Rubber Manufacturing Industry, pursuant to Section 3 (e) of Title I
of the National Industrial Recover Act. <
The eight complainant companies in this case operate under the
Rubber Manufacturing Code, approved December 15, 1933, as members of the
Stationers' Rubber Goods Subdivision of the Rubber Sundries Division of
the Code; the:/ represent 100 per cent of the rubber eraser industry.
The Rubber Manufacturing Code -provides that any .division of the
industry may investiage the importation of competitive articles with a
view to obtaining possible action under Section 3(e) of the National
Industrial Recover;'- Act and report its findings to the Divisional Auth-
ority which shall inform the President through proper channels.
Subject of Complaint.
• * * . *
Description 'of commodity
The complaint is directed against the importation of all kinds of
rubber erasers, exclusive of rubber pencil knobs and art gum erasers which
contain no rubber. The imports consist mainly of the cheaper grades of
double-beveled rubber erasers used, largely ''oy school children.- Some of
the imported erasers are sold in sets or separately as toys, such as ani-
mals, pencils, watches, blocks, etc.
Tariff treatment
Rubber erasers are dutiable at 25 per cent ad valorem under Para-
graph 1537 of the Tariff Act of 1930, being classified as manufactures
in which India rubber or gutta percha is the component material of chief
value. They were dutiable at the same rate under Paragraph 1439 of the
Tariff Act of 1922.
The Domestic Industry
The number of companies producing rubber erasers (not including pencil
knobs and art gam erasers) increased from seven in the 1929-1935 period to
eight in 1934, when a large manufacture of tires, rubber sundries, and other
goods, began producing erasers in small qunatities. In 1929 there were
9829
-632-
approximately 325 wage earners, earning a total yearly pare of about
$275,000; in 1933, there were about 150 workers earning a total yearly
wage amounting to approximately $140,000, according to data submitted in
the complaint.
The seven principal establishments are all situated within the New
York metropolitan area, largely in New Jersey, They accounted :f or virtually
l n per cent of domestic production of rubber enasers prior to 1934.
Rubber erasers amounted to approximately 28 per cent in value of the pro-
duction of all commodities by these establishments in the period 1931-1933.
According to the Census of Manufactures, three of the manufacturers
of rubber erasers accounted for approximately 71 per cent in value of the
total domestic output in the years, 1929, 1931, and 1933..
Production in the United States
The following table shows the trend of domestic prodiiction of rubber
erasers in quantity, value, and unit value since 1929, as repoictad' by the
Census of Manufactures. These data correspond closely to the value of
sales -reported in the complaint for these same years.
Table 1. - Rubber erasers: Domestic production in 1929,
1931 and 1933
■ Quant i ty
Sales Valrze
Unit Value
Year
Pounds
Patio to
1929
Dollars
Ratio to
1929
Po^ars
•Ratio to
■ 1929
1,832,683
1,306,143
1,256,618
Per Cent
$1,065,186
662,716
577,489
Per Cent
SO. 581
.507
. .460
Per Cent
1929
1931
1933
100.0
71.
69.
100.0
62.
54.
100.0
87.
79.
Source: Census of Manufactures.
The next table shows (l) total domestic production of erasers,
(2) production of erasers reported to be most comparable with imports,
and (3) the ratio of production of erasers most comparable, with im-
ports to total domestic production of erasers. Table 2 is based on
data submitted by the complainants.
9829
- ,__
Table 2. - Rubber erasers: Production, 192 r ', 1931- Sept ember, 1934
(Cuantity)
1/
sers -iost
latio of erasers
Period
Total
comparable
comparable with
production
with
imports to total
iuroorts
production
rounds
Per cent
Year
1929
1,522,065
336,854
22
1931
1,164,012
242,755
21
1932
811,925
181,721
22
1933
969,820
200,144
21
First nine months
1932
6-:-5,598
153,935
24
1933
675,752
154,176
23
1934 2/
889,862
182,028
20
By auarters
1932
J anuary-! lar ch
166,123
. 39,885
24
April-June
227,398
45,312
: 19
July- Sept ember :
253, u7 7
70 , 738
28
October-December
155,327
27,786
17
1933
January-i :arch . .
164,664
. '. 46,184
28
April-June
202,336
• . 39,284
19
July- Sept ember .
308,752
: . 68,708
22
October-December.
294,058
• ' 45,968
16
1334 2/
January— 1 iar ch
289,601
. 58,721
! 20
April-June
329,342
! '. 74,194
23
July- September
270,919
: . 49,113
: 18
Source: Complaint.
1/ Production data for one producer not included in this table as
they were not reported.
2/ Includes one producer not manufacturing prior to 1934.
From the foregoing table it may be noted that after a rather sharp
decline from 1929 to 1932, the production .both of all rubber erasers and
of erasers most comparable with imports increased in 1933. "'oreover, pro-
duction in both categories was greater during the first nine months of
1934 than, in the corresponding period of 1933; the rate of increase for
each was approximately the same as shown by the fact that the ratio of pro-
duction of erasers most comparable with imports to the total declined only
2 per cent from 1932 to 1934.
The production of era-sers is seasonal, the peak being reached in the
late spring or summer, usually in the third quarter, reflecting orders
placed prior to the opening of the shcool year in September. Increased
general business activity during the fall also contributes to this
seasonal trend.
9829
-634-
Exports
Course of exports
Since January 1, 1929, the United States has annually exported about
30 per cent in quantity and 34 per cent in value of its total rubber eraser
production. The proportion of exports to total production in quantity de-
clined from 31 per cent in 1929 to 27 per cent in 1933 and in quantity from
35 to 32 per cent over the same period.
The following table shows the trend of domestic exports of rubber er-
asers since 1929.
Table 3. - Rubber erasers: Domestic exports, 1929 to
October, 1934
: : Indices o
f trend
Period
: Quant i ty
: Value
: : 1929=
LOO
: : Quant i ty
: Value
: Pounds
: : Per
cent
Year
1929
: 577,235
: 5367,542
:: 100.0
: 100.0
1930
: 507,125
■ 307,901
:: 87.9
: 83.8
1931
: 400,576
: 239,179
:: 69.4
: 65.1
1932
: 261 , 783
• 152,465
:: 45.3
: 41.5
1933
■ 337,481
184,112
: 58.5
: 50.1
By nine months
1932 (Jan. -Sept.)
189,169
114,158
: 43.7
: 41.4
1933 Db.
231,638
123,052
: 53.5
: 44.6
1934 Do.
251,329
138,449
: 58.1
• 50.2
By quartors
[■
1S33
J an uary-Mar ch
59,862
. 32,873
: 41.5
35.8
April -June :
87,295 :
48,056
: 60.5
52.3
July- Sept ember !
84,481 .
42,123.
: 58.5
45.8
October-December •
105,843 :
61,060.
: 73.3
66.5
L934 i
January-March :
72,309 :
37,188.
: 50.1
40.5
April-June ■
85,755 :
48,305:
: 59.4
52.6
J i:Jy- Sept ember ;
93,265 :
52,956:
: 64.6
57.6
July :
39,424 j
22,437:
: 82.0 :
73.2
A::, "cist ;
25,860 :
14,720:
: 53.8 :
48.0
September :
27,982 :
15,809:
: 58.2 :
51.6
October •
29,352 :
16,691:
: 61.0 :
54.5
Source: Foreign Commerce and Uavigation of the United States.
9829
Prom the atiove table it nay be noted that exports of rubber erasers
declined from over 500,000 pounds in 1929 and 1930 to 252,000 in 1932,
but rose to 337,000 pounds in 1933. Toreover, they increased from
232,000 po i .inds in the first nine months of 1333 to 251, 300 pounds in the
corresponding months of 1934.
The Foreign r?arke -ft
The domestic industry exports rubber erasers to a world-wide market,
Germany being the. largest customer, followed in order of importance in
1933 by the United Kingdom and! Argentina. The distribution of foreing
demand remained relatively stable from 1929 to 1933, as is indicated by
the following table.
Table 4. - Rubber erasers: Domestic exports by countries,
1929 and 1S33
.' 1929
: 1933
Country
Ratio to:
Ratio to
Quantity .
: Value
total :
value :
: Quar t i ty
Vp.lue :
total
value
Pounds
577.235 .
: £367.542
Per cent:
: Pounds
$184,112
Per cent
Total
100.0 :
:' 337,481
100.0 ,
Germany
79,022
: 51,148
13.9 :
: 79,471
39,726"
21.6
United Kingdom
77,720
: 33,708
9.2 :
: 30,087
15,089
8.2
Canada.-
46,743
: 27,355
" 7.5 :
: 30,051
9,520
5.2
Argentina
37,297
25,690
7.C :
: 20,817
: 16,003
8.7
Japan
33,450
: 25,633
3.0 :
: 6,930
: 3,273
: 1.8
Denmark
: 30,086
: 19,202
: 5.2 :
: 12,725
: 5,495
3.C
China
: 24,567
: 16,519
: 4.5 :
: 10,103
: 6,397
: 3.5
Brazil
! 18,473
: 14,279
3.9 :
: 4,375
! 3,968
: 2.2
Switzerland
: 19,342
: 13,111
: 3. 5 :
: 19,906
: 10,706
: 5.8
Sweden
• 16,286
: 12,929
: 3."5 :
: 11,525
: 6,514
: 3.5
Australia
: 22,173
: 11,784
: 3.2 :
: 8,982
: 4,576
: 2.5
All other
: 171.576
: 115.' 584
: 31.4 :
: 102.509
: 62.845
: i 34.0
Source: Foreign Coi
".nerce and
Haviffation
cf the Un
ited Stat
3S.
Imports
Separate statistics of imports are not available prior to 1934, imports
of erasers being classified as "manufactures of rubber, n.s.p.f." Despite
the fact that a separate classification was set up at the beginning of 1934,
some of the imports have continued" to be classified as "manufactures of
rubber, n.s.p.f."
Imports separately recorded for 1954
Bfao table behcv? s2fcjws-.the 'imports Separately recorded axnder the 'new " ••?-
Class ificBttiori*'fT>¥. thai fa-ret ten months ".oil: 1 304 , " bothi&t -Jfew rYorlc "and at'
all port:?. -. All "But two sifall shixftients vrero from Japan.
9829
•DOO-
Table 5. - Rubber erasers: Imports separately recorded as
rubber erasers, at the port of New York and at all
TDorts, first ten months, 1934
At New York
: At all ports
Quantity : Value
: Quar.t i ty
Value
Pounds :
: Pounds
January-
11,775 : Si, 459
: 26,470
$2,335
February
7 , 250 : 490
: 7,250 .
490
IJarcli
9,511 : 716
: 10,645
794
April
10,128 : 1,046;
: 16,220
■ L,494
May
5,036 : 994
•: 14,329
1,695
June
13,228 : 1,382
: 16,828
1,672
July
21,315 : , 1,857
•;. .. 31,967
2,881
August
: 52,250 . : 2,819
;:. . 38,895 :
3,344
September
Total' - J an, -Sent.
34.679 ■: 2.454-
::: 40.177 :
• 2.911
•145.172 •: 13.227
:: 202.781 :
: 17.617
October.
• 13,033 : _ :: 1..533
:: . 15,040
1,832
November
.■'■"■ 4 *"■
>: 27,728
: 2,599
Source:- Bureau of Foreign; and Domestic Commerce.
Note: All impor.ts from Japan, with, exception of shipment from
Germany: of 710 pounds, valued at. $79,: in August 1 , and shipment of 15
■ pounds valued at $10 from Czechoslovakia, in October, both at New York.
Imports at New York ampunted to ; 72'per cent in quantity and 75 per cent
in value of all separately, recorded imports into the. United States during
the first nine months, of 1934. .Detailed, import statistics for the period
show that a total of 29,993- rounds valued at $2,382 was entered through
customs districts on the Pacific Coast. Shipments' of 10,733 pounds valued
at $644 were entered at Baltimore, and 8,995 pounds valued at $814 at New
Orleans.
Import data obtained by invoice analysis
An invoice analysis was made in connection with this complaint
of all erasers imported at New York and recorded under the classifica-
tion of "manufactures of rubber, n. s.p.f." both in 1933 and in the
first nine months of 1934. The results of this analysis are given in
the following table. All imports were from Japan.
9829
-657-
Table 6. - Rubber erasers: Data obtained by invoice
analysis of all erasers imported at New York and
recorded under the classification of "manufactures
of rubber, n.s.p.f. ", 1933 to September, 1934
Period
Quant i ty :
Value :
: Quantity
Value
Pounds
: Gross
1933
January ,
: 11,881
ft 2, 100
February
2,980 :
ft 70 :
: 2,920
634
' 'arch
1,606
77 :
: 8,165
1,550
April
: 6,559
1,652
Hay
: 1,935 i
802
June
2,418
118 :
: 1,720
697
July
720 !
65 :
: 6,075
1,994
August
2,890
231 :
: 5,690
1,625
September
: 10,615
3,180
October
295
16 :
: 3,691
1,172
November
: 8,145
2,754
December
515
196 :
: 14.520
4.731
Total
11.425
773 :
: 82.216
22.891
1934
January
: 18,567
5,523
February
: 4,906
1,879
i iarch
: 11,451
3,509
April
: 9,936
5,294
i iay
: 4,999
: 2,450
June
5,235
■ 374 :
: 5,346
2,549
July
: 10,367
2,917
August
: 5,416
: 2,014
September
3, 320
. 1 . 425 :
: 3.641
: 1.551
Total-Jan.-SeT)t.
: 8.555
•1.799 :
: 74.629
: 27.491
Source* United States Tariff Commission.
Note: All inroorts from Japan,
Course of imports
The available statistics of imports of rubber erasers entered at ports
other than Her; York P.ve incomplete. However, imports at that port during the
first nine months of 1934 amounted to over 70 per cent of total imports. In
vie" - ' of there facts, imports at lleyi York have been taken as representative
of total imports curing 1933 and 1934.
The data presented in Tables 5 and 6 are shown in consolidated form
in Table 7 below. These data were combined by the method of partially esti-
mating the unit of quantity in pounds. The weighted average unit value of
imports for 1933 invoiced in pounds was used as the basis for converting to
pounds the imports invoiced in gross. For the various months of 1934, the
monthly unit value of imports in pounds was used as the basis for converting
to nounds imports invoiced in gross for those months.
9829
-638-
Tat>le 7 . -Rubber erasers: Total imports at Kev; York,
lb33 to September. 1934
Feriod
: Qu.an.tity
{partially
estimated)
1933
Tanufxy-March
April- June
July-September ■
Total : - 9 months
October-December
Total 'for year
1934
January-March
April-June
July-Sent ember
Total - 9 months'
January :
February
march ■' :
April
may • :
June
July
August
September
86,693
61,984
133.135
282.0,15
164,459
446,471
147,227
119,765^
436 . 997-
56,070
3 5,040
56,111
61 , 37?
17,447
.40,941
54,805
5 ; , 293
.59,907
Value
$4,431
3,259
7,093
2&JSL
„J^,85?_
23,664
13,591
13,889
15, 057
.42^.517.,:
6, 99' 7
2,369
4, 225
6 , 340 '.
3,444.'
4,105
4,774
4,833
5,430
Index of
Quantity
100.0
71.3
153.2
169.4
137.8
195.6
157. 6
193
121
193
211
60
141
189.2
190.9
206.8
Value
■306.7
313.4
339.4^
519.8
473.8
160.4
286.0
429 . 2
235.4
277.9
323.2
327.2
367.6
Note: All imports from Jaoan, with exception of shipment
from Germany of 710 pounds valued at $79 in August, 1934.
The Code of Fair Competition for the -Rubber Manufacturing
Industry became effective December 15, 1933. On the basis of the
data shown in Table 7 it may oe noted that imports of rubber erasers
increased from 282,000 rounds in the first nine months of 1933 to
437,000 pounds in the 'corresponding months of 1934, and from $15,000
to about $43,000 in value representing inc: easts of 55 per cent in
quantity and 178 per cent in value. The increase in value was only
partly on account of the rise in the unit value of imports.
9829
-639-
Imports in Relation to Domestic Production
Inasmuch as imports at He'-; York, amounting to over 70 per cent
of total imports in 1S34, have been tal en as representative of total
i iports into the United States, the folio'ving table sho'.7s a comparison
of the trend of these inports with domestic production of erasers for
the year 1933 raid through the first nine months of 1934.
Table 3. - Rub
;r erase: s: Ratio of imports at New York to
domestic production
Domestic
: Total imports:
Ratio of
imports to
tiroduction
: at her: York :
fc (Partially :
estimated) :
production of
Period
211 : Gr- des ;ios
. : com; i rable
: Grades most
- 1, : comparable
grades :with im-
: y :
grades. ,
•ith imports
ijports
: Pounds
P©r
cent
1$9$
By Quarters
Jan . -I i ■ r .
164,664: 46,184
: 86., 293
52.8
188.1
A r.— June
202,336: 39,294
: 61,984
30 . 5 :
157.8
July- Sept . :
303 J 753.:__J8 J 70B,.
675.752: 154,176
■„. „125jl35^__
43.1 :
193.8
Total - 9 months
: 282.012
41. 7. __
182.9
Oct. -Dec.
294.068:- 45, 968_
: ; 164.459
55.9
367.8
1934
By Quarters
J an. -Max.
28. , 601 : 58 , 721
: 147,227
50.8
250.7
Apr.— June
329,542: 74,194
: 119,765
36.4
161.4
July-Sept .
g^o^grgj i^iis,,
889.862:: 182,028
: „ _ 170.005
: 436.997
62.8
346.2
Total - 9 months
' 49.1
240.1
By m iths
■~
95,072: 21,695
: 56,070
• 59.0
258.4
Feb? ■ ty
83,098: 13,559
: 35,046
42.2
225.2
.. :
111,431: 21,467
: 56,111
: 50.4
261.4
A
112,343: 33,608
: 61,377
54.5
132.6
'
116,397: 22,186
: 17, -147
• 15.0
78.6
!
10 ,602= 18,400
: 40 , 941
• 7
222.5
Ju Ly
'.88,454: 10,320
: 54,805
• 62.0
531.1
A ust
: 93,431: 15,164
: 55,^93
: 59.2
342.1
September
: 89,034: 22,629
: 59 , 907
: 67.3
264.7
Kofce: Production data for one producer a e not included in this table
1// See Table 7 and accompanying textual comment,
9329
-640-
From data shown in Table 8, it may bo noted that the ratio of
imports t-o-domestl-c-protmttlbn of all grades of erasers increased from
42 per cent during the first nine months of 1933 to 49 per cent for the
corresponding jiionths of 1934^-:, a similar comparison shows an increase
fro:.! 133 to 240 per cent in the ratio of imports to that part of domestic
production reported to be comparable with imports, furthermore-, a
comparison of data for the third quarter of 1933, just prior to the
period when the code feocaflfs? effective, with the corresponding quarter
of 1934, under the code, shows increases of from 43 to 63 p G r cent and
from 194 to 346 per cent, respectively, in the two ratios.
Important Competitive Factors
Comparabilit y of i mported a nd domestic erasers
Era- ers imported in largest quantities are the double-beveled type.
This type is also produced in greatest volume by the domestic industry.
Among the standard grades of double-beveled, erasers, the imported eras-
ers pre similar in general appearance and shaoe to domestic erasers.
Unlike any of the customary domestic tyoes, some of the imports are
novelty erasers which might well be classed as toys since they are shap-
ed like animals, pencils, watches blocks, etc. They are sometimes sold
in sets or groups wrapped together in cellophane. There is some question
whether these novelty erasers are strictl - " comparable v, ith standard
domestic erasers which form the bulk of the "school line." The novelty
character of the imported er.asers, however, is said to be a substantial
competitive feature.
Channels o f trade
Imported rubber erasers have only af 'ected to an appreciable extent
the production of domestic erasers going into the "school line", the
imported erasers being sold at retail throughout the country to children
and for children's use by syndicate or chain 5-andlO-cent stores, and
small corner stores. Because of their alleged inferior erasing qualities
and a prejudice against Japanese products in general, imported erasers
have been purchased hardly at all by commercial stationers and large
industrial consumers .
For many years domestic erasers have been sold in the United States,
along with other stationers' supplies, to wholesale stationers, jobbers,
and direct to large retailers. It is stated that the syndicate stores
refused'to handle imported 'erasers when, they,- first appeared on the
market in 1932, but because job.iers and small retail stores began pur-
chasing and selling these erasers at lower prices, the syndicate stores
were forced to handle them.
Dome st ic prices
(a) Range of d omestic prices. - Domestic net wholesale selling-
prices of erasers with which imports are said to be ".ost competitive,
roughly speaking, range from between 42 cents and 90 cents per pound.
9339
The prices of sone domestic e: asers are higher than 90 cents a pound,
but there is doubt -hether these erasers enter into competition with
J, lanese imports. The net 'vholesale selling, prices of one manufacturer,
-- ' >- ■ i '■ th t 53 out of 45 1-inds of erasers produced have been affected
by imports and that all erasers produced cure comparable with imports,
average about 55 cents per pound.
(b) Stab ility of dom esti c orices_._ - The weighted average of whole-
sale selling prices reported- b r seven domestic manufacturers declined
less than 5 per cent from 1929 to 1932- It rose slightly in the second
half of 1952 and remained through 1933 anc the irst nine months of 1954
at a level approximately 3 per cent u der 1929. In comparison, the
average unit value of exports declined approximately 15 per cent from
1929 to the second half of 1932 and remained substantially at that level
during 1933 and 1934. It appears, therefore, that domestic wholesale
selling prices were not reduced to any important extent as a result of
increasing competition fron imports. The greater decline in export
prices " doubtlessly -reflicfcs more severe ■ compet it. ion.'' in "foreign, .markets
during recent years.
In contrast to the relative stability of wholesale orices of rubber
erasers in the domestic market, total domestic production declined
roughly 40 per cent from 1929 to 1932 raid 1933.
•The following -.table shows the trend of. .weighted wholesale prices,
the unit value of. exports, and domestic production of rubber erasers in
1929 and from 1931 to September, 1934.
Table 9. -Domestic rubber erasers: Trends of weighted wholesale
selling prices, average unit export values, and production,
1929, 1931 to September, 1934
Per iod
1929
1931
1952
January- June
July-December
1933
1934 - 9 months
Weighted
wholesale
selling
price s 1/
: 100.0
: 2/
: 96.7
: 96 . ?
:3/ 97.1
: 97.1
: 97.2
Average
un i t
export
value
1929
100.0
95.7
91.4
96.1
8.3
85.7
86.5
All
erasers
»" IPO"" "
Production
100
76
5
53
.3
51
7
55
63
7
78
Erasers most
comparable with
imports
100
72
.1
53
,9
49
4
58
5
50
4
72
Source: Complaint and roreign Commerce and navigation of the United
States.
Note: The indices in this table are based upon the selling prices of
domestic erasers produced in large quantities anc? reported to be com-
parable with iroortr. . _^ ___
1/ Weighted according to value of production for each producer in the
years 1929, 1931, and 1935.
2/ hot available.
3/ July, 1935.
9829
-642-
Average unit values of imports and exchange rates
On the basis of the available data covering imported erasers
recorded in pounds, the average duitiable value of erasers imported
from Japan increased from $0,053 per pounu in 1933 to an average of
$^.0869 per pound for the first nine months of 1934. The averages
during 1934 were $0.1026 for the second quarter, $0.0821 for the third
quarter $0.1212 for the month of October, and $0.0937 for November.
In general, these data indicate that the unit value of imports increased
from 1933 to 1934 by more than the amount of the rise in the value of the
yen in terms of dollars, which was 43 per cent from the first quarter of
1933 to the third quarter of 1934.
Effect of National Recovery Frograra
Production costs
The following table shows the various items of cost per 100 pounds
of rubber erasers for six producers for the first half of'. 1933 contrasted
with corresponding costs for a representative period under the code.
9829
-545-
Table 10. - Rubber erasers: Cost'- of production of six
producers for the first half of 1933 and for a repre-
sentative period under the code
Item
Weighted
ave rage
cost
first
half of
1933 1/
Costs pei
Weighted:
average
cost for
period :
under ■
code 2/ ;
• 100 rounds o
Increase ( ) :
or decrease :
(-) over :
first half :
of 1933 :
f erasers
: Ratio to
: total costs
of
cost
: First :
: half :
: of :
: 1953
Period
under
code
Material
Labor
Factor expense
(except depreciation)
Depreciation
General and administra- .
tive expense
Selling expense
$10 . 67
10.33
6.81
1.78
: 8.18
: 9.74
$14.54
11.16
7.58
2.15
: 6.45
: 7.69
per cent :
36.4 :
8.1 :
11.2 :
20.4 :
21.1 :
21.1 :
: Per
: 22.5
• 21.7
: 14.3
: 3.7
: 17.2
: 20.5
Cent
29.4
22.5
15.3
4.3
13.0
, 15.5
Total
: 47 . 50
: 49.57
: 4.4 :
: 100.0
100.0
Source : Complaint.
From data in the above tabic, which is based on information sub-
mitted by the complainant companies, it may be seen that the cost of
material ^as 36 per cent higher under the code tiian for the first half of
1933; depreciation was 20 per cent higher, factory expense 11 per cent
higher and labpr cost 8 per cent higher. These increases were largely
offset, however , oy a decline of 21 per cent in the items of general
and administrative expense and of selling expense, respectively, leaving
a net increase in total costs of only 4.4 per cent.
1/ Ratio of all erasers produced by each manufacturer to total
production of erasers in 1933 used in weighting costs.
2/ Ratio of all erasers produced by each manufacturer to total
production for the first nine months of 1934 used in weighting costs.
9829
-644-
Labor
A "basic minimum hourly wage of 35 cents, applicable to the
Stationers' Rubber Goods Subdivision, is provided by the c^de for the
Rubber Manufacturing Industry. There is likewise provided minimum
weekly wages' ranging from' $15 for workers in cities having ove? 5 n 0,ono
population, or in the immediate ti-ade area, of such a city, down to $12
per week for wage earners- in towns of less than 2,5 r ' n population. A
40-hour week' and an 8 hour day are' established by the code, although
each employee may be permitted to work a total of 80 hours per year in
excess of the maximum hours specifier, but not more than 48 hours in any
one week.
. . ' In 1929 , wage earners in the rubber eraser industry were paid an
average hourly wage of about $0.54, and en average weekly wage of about
$24. The industry ouring' 1933 and the first seven months of 1934 main-
tained average hourly '^ages between approximately $0.49 and $0.56, or
between roughly 40 to 60 per cent 'above the basic minimum hourly wage
of $0,35 established for the entire rubber manufacturing industry by
the code.
The average weekly ''-'age maintained in the rubber eraser industry
during 1933 'ranged from $15.50 tt>:$20,62, or roughly between 3 and 37
per cent above the highest minimum weekly wage established for the
rubber manufacturing industry.
In 1929, the work averaged approximately 45 hours. The average
work week during 1933 ranged from 28 to 36 hours. -During the. first
seven months of 1934, after adoption of the code, the average weekly
work period was roughly 38 hours.
The following table snows the trends of employment, payroll, and
wages for the rubber eraser industry in the first half of 1933, before
the code, and for the first seven months of 1934, after the code became
effective.
-645-
Table 11. - Rubber erasers: Indices of enrol oyment ,
! yroll, and -ages, 19 To and 1934
Period
Numbe r :
Hours per,
Man hours :
Total :
Average;
Ave rage
1 - k ending
of
worker
per payroll
weekly:
weekly ;
h -urly
15th of month)
employees
per week
period
payroll.
"•age
rage
Jan
1933 b inn
1953
January
ion . o
inn . o
100.0
100.0
100.0
inn. n
April
104.9
92.0
96.6
100.1
95.4
103.5
July
109.7
133.9
147.0
139.3
127. n
94.8
October
125.0
118.9
148.8
150.1
120.1
inn. 7
Coae
Approved De<
1954
January
116.0
127.2
147
April
129.2
129 . 6
167
July
155.7
125.9
172
5
135. n
4
161.2
9
187.3
91.5
96.3
96.7
Source
Complaint.
The indices of the above table she- that the number of wage earners
engaged in producing ruboer erasers was 56 per cent greater in July,
1934, than in January, 1933; the average work week was 26 percent Z"~ '■
greater, the weekly -age 22 per cent greater, and the hourly wage rate
3.3 per cent. less.
;829
(
-646-
SALT CAKE (Sodium Sulphate) (Ho. 46)
3829
I
-647-
TABLE OF COIVI
Subject of Complaint and Status of Complainants
Under the National Recovery Act 549
Tariff Treatment 549
1!n.e Domestic Industry 350
Nature of Product . -■ 550
'Uses of the product 55O
Methods of production ■ 651
Organisation -of the industry 652
Cone it ions : of production and marketing. <. . . : 654
Statistics of domertic production. 654
Exports . .;•..'.•.;•.•.•..•...•■.<. 659
The Industry in Poreigni Countries 660
Canada.;' ' • 660 '
Germany. . . : .'..-. ■ ■...-... 661
Imports' .; 663
Important Competitive Factors ■-. 568
Foreign exchange ' -. . . : 668
Comparability of product •. 572
Frices and transportation rates. . ..-. . . ,-y, 672
iii'fec't of the National- -I-ndu atrial ecovery Act . ._ 679
Cod« provisions. ..-...' 679
Costs, wage rates and- employment . , 679
9829
-643..
LIST OF TABL3S
Table
number
1. . Salt cake (sodium sulphate, crude): Domestic
chemical production, census years 1933-1933. ,.. . 655
2. Salt cake (sodium sulphate, crude), natural :
Domestic production, 1924-1934. 656
3. Salt cake (sodium sulphate, crude); Domestic
production from natural and chemical sources,
. census years, 1925-1933 657
4. .... Salt cake (sodium sulphate, crude) :
Complainants' production, 1929-1934 658
5. . Salt cake (sodium sulphate, crude): Total
. production for sale, non-primary chemical,
primary, and complainants' production; and
percentage participation of each class in the /
total production for sale, 1929-1934 657
6. Salt cake (sodium sulphate, crude and refined):
Srports , 1929-1932 .....: 660
7. .. Salt cake (sodium sulphate, crude): Imports
for consumption, 1923-1934 664
8. Salt cake (sodium sulphate cruds): Imports
for consumption by countries, 1929-1934 665
9. Salt cake (sodium sulphate, crude): Imports
for consumption by customs districts, 1929-1934. 666
10. Imports for consumption compared with primary,
non-primary chemical, and total domestic
production for sale, 1929-1934 667
11. Trend of competition between imports for
consumption and domestic primary production
serving Gulf and Pacific Northwest market
areas, 1929-1934 678
-oOo-
9829
-649-
SUHV3Y 07 IiJFOHi ATI ON
Oil
SALT CAKE (Sodium Sulphate Crude)
May 1935
Subject of Complaint and Statue of Complainants
Unter the National Industrial Recovery Act.
This is a report arising out of a complaint under Section 3 (e) of
the National- Industrial Recovery Act with respect to imports of salt
cake (sodium sulphate crude), filed by the producers who manufacture
salt cake as a primary objective. Barring one exception they produce
salt cake from natural deposits of "brine and thenardite ore and mira-
bilite.
The complainants operate under the Code of the Chemical Manu-
facturing Industry approved by the President February 10, 1934. Pour
of these complaining companies have made it their primary objective to
produce crude sodium sulphate for sale in commercial form. The other
complainant is affected less directly since it does not actually produce,
but leases its properties on a royalty basis to another producing com-
pany not a party to the complaint. Chemical companies producing salt
cake but not as a primary product are not parties to the complaint.
Tariff Treatment
Salt cake (crude sodium sulphate) is imported into the United
States free of duty. In the Tariff .Act of 1930 it falls under Paragraph
1765, Sodium * * * sulphate, sulphate crude or crude salt cake * * * .
Comparison of tariff rates since 19-13 reveals that salt cake has long
been on the free list, thus:
1930
Paragraph 1766
• Pree
1922
1667
,n
1913
605
ii
In its refined form as glauber's salt (hydrated sodium sulphate)
it falls under Paragraph 81 of the. Tariff Act of 1930 and is dutiable
at $1.00 per ton, or as dehydrated glauber's salt (anhydrous sodium
sulphate) it is dutiable under the same paragraph at $3.00 per ton.
The difference between the two rates on the refined forms is com-
pensatory, as conversion of glauber's salt costs approximately
$2.00 per ton.
American producers of natural sodium sulphate, in Mprch, 1932,
protested the free entry of sodium sulphate crude, and- asked for a
proper classification which would place it in the category of anhydrous
sodium sulphate. "Crude", it was maintained, meant in the natural
state, and the foreign product was manufactured and, therefore, should
be held dutiable. The Treasury "Department declared that the foreign
product was indentical in use with natural crude sodium sulphate, and
adopted the definition of anhydrous sodium sulphate" as a pure grade
sold for special uses, sometimes sailed anhydrous glauber's salt and
usually made by separating it from its concentrated form (T.D. 45856) .
9829
-650-
On a supplementary complaint sodium sulphate crude was held not
dutiable as an earthy or mineral substance under Paragraph 214, or aa an
unenumerated manufactured article under Paragraph 1588, nor was it
dutiable under Paragraph 81 or Paragraph 214 by reason of the similitude
clause in Paragraph 1589 of the Tariff Act of 1930 (T.D. 46005). The
liquidation of entries of salt cake was suspended pending judicial
determination of the Treasury Department's classification (T;D. 46150).
A protest filed under Section 516 (b) against liquidation under Paragraph
1766 was abandoned and T.D. 46150 was revoked (T.D. 46323). An anti-
dumping complaint is again before the Bureau of Customs undergoing
investigation at the time this survey is being made.
The Domestic Indu.stry
Hature of product
Sodium sulphate is a chemical which occurs in commerce in three forms:
anhydrous sodium sulphate or refined salt cake, appearing as white
amorphous powder containing no water of crystallization;
Glauber's salt or refined salt cake, a-yoearing as a crystalline solid
containing 55 per cent of water of crystallization; and
salt cake, the crude form of anhydrous sodium sulphate available in
powder or more typically in Pumps containing 92 to 99 per cent sodium
sulphate.
Ordinarily, commercial salt cake, or sodium sulphate crude, varies
in color from yellowish to greenish white, occassionally pure white. A
dirty gray color is indicative of sodium chloride contamination, that is,
incomplete decomposition. In general, the finer the grain of salt cake
the higher the grade.
Uses of the -product
Sodium sulphate has numerous uses. It is a sdurce of soda in the
sulphate process used in making sulphate pulp for kraft paper manufacture.
It is also an important ingredient in glass and soap-making, and in
artificial refrigeration. The textile industry finds it useful as a
bleaching agent for fabrics and as a mordant in cotton dyeing. It is also
used as a diluent in the manufacture of synthetic dyestuffs. In construction
work it is an ingredient of hydraulic cement. Pigment making uses it to
promote crystallization. It is also valuable in metallurgical processes,
in photography, in tree surgery, and for pharmaceutical purposes ?s
Glauber's salt.
The crude salt cake is most extensively used, however, in the manu-
facture of sulphate pulp for kraft paper. Kraft paper has been so much in
demand in recent years that the tonnage of sulphate pulp used in its
manufacture increased from 120,378 short tons in 1929, t'o the high figure
of 1,259,000 short tons in 1933. Large quantities of sulphate pulp arc
also imported free of' duty. It has been estimated that over 50 per cent
of the salt cake or crude sodium sulphate produced 'for sale in this
country is usod by the producers of sulphate pulp who
9829
-651-
reouire about one ton of salt cake to produce five tons of pulp. In 1927
it was estimated that the domestic consumption of sodium sulphate in all
forms was as follows:
Industry
Pulp and paper
Heavy chemicals
Rayon and textiles
Glass and ceramics
Dye and coal tar
Soap
Fine chemicals
All other
Short tons
103,000
97,000
92,000
45,000
20,000
2,000
1,000
15,000
Type of sodium
sulphate used
crude
crude ana refined
n n ii
ii ii n
n n it
crude
crude and refined
Total comsumption 575,000
Methods of production
Salt cake is obtained by chemical manufacture or frara natural
sources such as brine lakes or deposits in the form of the minerals,
thenardite or anhydrous sodium sulphate and mirabilite, the hydrated
form containing water.
Chemically it is derived from the manufacture of hydrochloric
acid which is made by several chemical processes. It may be produced
by the reaction of common salt ( sodium chloride) with niter cake (sodium
bisulphate); by the reaction cf common salt with sulphuric acid; or by
the reaction of common salt with sulphur dioxide.
Production by the first process is of declining importance.
This is due to the fact that niter cake is much less plentiful than
formerly. The introduction of new methods of producing nitric acid, in
the production of which niter cake was formerly a residual product, is
responsible for the decline.
The most widely used process is by treating common salt with
sulphuric acid from which is derived hydrochloric acid and salt cake,
The apparatus long used was the pot and muffle furnace, but it is said
that it is being rapidly displaoed by the Mannheim furnace, which
operates mechanically.
The other process, known as the hargreaves process, which
yields salt cake and hydrochloric acid from the reaction of common salt
and sulphur dioxide, has been used extensively in Europe and is used in
this country by one company in Louisiana.
The chemical output of salt cake has dimished considerably
due to changes in methods of acid manufacture. Hydrochloric acid is
now being produced as a by-product of the cnlorination of organic
materials, chiefly of coal tar origin. Synthetic processes based upon
direct combination of elementary hydrogen and cnlorine from electro-
lytic cells has been adopted also. v '!heri such methods are used salt
cake is not produced.
9629
-652-
The natural sodium sulphate is present in great quantities in
the United States, but unfortunately in remote section of the country.
Usually it is to be found in arid regions - in the great closed "basins
where rainfall is deficient and streams have no outlet to the ocean.
In a few places sodium sulphate minerals are present in dry "beds of
mineable thickness, mixed with other salts .ana mud. Typical occur-
rences are in "playas" which are dry or marchy bootoms of more or less
dried up salt lakes, ranging in size from small doughs with a scanty
incrustation of salts on the surface of the mud, to thick beds several
miles in extent, In such deposits sodium sulphate frequently mixed with
other soluble salts may occur.; (l) in solution as a brine in varying
degrees of saturation: (2) in intermittent crystal layers, or (3) as a
permanent bed protected from solution in wet weather by a covering of
mud.
Large deposits are known to exist in Arizona, Nevada, Texas,
Utah, California, North Dakota, Washington, and Wyoming. The methods
of extraction very considerably. Thus, in the Verde River section in
Yapavai County, Arizona, a flat-lying bed of thenardite ore about 3-|
feet thick is worked underground through tunnels. The ore is drilled
with machines, loaded into cars, and carried to a near-by plant for
processing. The contaminating clay and sodium chloride are removed by
a fine-mesh cylindrical screen, equipped with sprays and employing a
saturated sodium sulphate solution instaed of water. A drum dryer
removes moisture and rolls are employed to crush the sulphate to the
desired size. A typical analysis reveals a product containing about
95 to 96 per cent sodium sulphate content.
In the Rhodes marsh region of Nevada, sodium sulphate is also
mined from thenardite ore. In this region the area, to be mined is
stripped of the overburden ^r top soil by means of gasoline shovels
to get at the underlying mineral vein. Frequently it is necessary to
pump out the eater which has collected in the stripped areas before
the blasting of the thenardite ores takes place. After blasting the
ore is loaded into conveyers and transported to the plant. There it
is crushed and washed. It is then dehydrated, classified, and given a
final washing. Once more it is dried and then crushed to size and
made ready for shipment. Chemical analysis shows a high degree of purity
from this deposit, the sodium sulphate content running 97 per cent or
better. The balance is sodium chloride, calcium sulphate, insolubles,
and moisture.
Still another method of production is employed by a Texas pro-
ducer. Brine is pumped from a lake and the sodium sulphate is obtained
from solar evaporation or by means of a chilling procer.s. The latter is 1
used when the weather conditions require artificial refrigeration to pre-
cipitate the sodium sulphate.
Lrganization of the industry
A final tabulation of data collected by the Bureau of the Census
reveals that in 1933 there were 30 establishments producing salt cake
(sodium sulphate), and other chemicals, which is seven more than in 1931.
9829
-I . . -
Five are located in New Jersey, 4 in Illinois, 3 in Pennsylvania, 3 in
Ohio, 4 in California, 2 in Texas, i e;.ch in Co:mecti cut," Delaware, Mass
Massachusetts, New York, Indiana, Michigan, Louisiana, Maryland, and
Tennessee, it is interesting to note that most of the chemical estab-
lishments are located in the Eastern United States and the Middle West.
This is a matter of considerable significance, since transportation
rates tend to confine the sale of domestic salt cake to market areas of
limited ranee.
According to the United States Tariff Commission the bulk of
salt cake chemically pro dace d is made by less than 10 large companies
manufacturing a general line of heavy chemicals.
In Louisiana one company - included in official statistics in
the Census with the other chemical producers - maintains that it produces
salt cake as a primary objective rather than as a minor product. This
company is a party to this complaint , whereas the other chemical producers
are not .
It has been fceported also that a company in California in 1934
planned to produce sodium sulphate as a by-product from potash and borax.
The brine in the Searles Lake region was to be used as raw material.
According to the Bureau of Mines this company actually entered produc-
tion in 1934, -but its production statistics are not availablp.
The number of companies producing salt cake as a primary objective
are few and widely scattered. In the case of the five complainants, one
has its plant in Texas; one in Louisiana; one in Nevada; and one has a
plant under construction in Utah. The fifth leases its properties in
Arizona on a royalty basis to a company which is controlled by a large
chemical concern which imports salt cake.
The properties of three of these complainants, when in operation,
are devoted to the exploitation of natural salt cake deposits; those of
another will produce from natural sources when production is started; the
fifth complainant produces salt cake chemically in conjunction with hydro-
chloric acid by the Hargreaves process.
The number of companies actually producing natural crude salt cake
vanes from year to year and from available information it appears that
l. no one year recently have more than four or five comoanies been in
actual operation.
The complainant company making salt cake by chemical process is a
subsidiary of a salt company in Louisiana. Three complainant companies
producing or about to produce salt cake from natural sources, appear to
be independent organizations. The remaining complainant has its properties
under lease to a company controlled by a large chemical company as already
indicated.
9829
-554-
These primary producer organizations are not large. 'vailable
statistics reveal that they have had on their combined payrolls from
51 to 148 men at various times in recent years. It would "be conser-
vative to state that the producers of sodium sulphate as a primary .
objective probably never had more than 200 employees on their combined
payrolls at any one time,
Conditions of production and marketing
Despite the developments of new methods in the manufacture of
heavy acids wherein salt flake or its derivative, niter cake, is no longer
produced jointly with acids, it nevertheless remains true that a very
large share of the sodium sulphate produced in this country is the
chemical type. .This supply of salt cake, therefore, varies with
demand for hydrochloric acid. A brisk demand for acid means a larger .
supply of salt cake, regardless of the demand for the latter at the pre-
vailing prices. A lag in demand for acid means a le&senes supplu of salt
cake. Unfortunately, chemical companies cannot produce sodium sulphate
only, by permitting the acid gases to escape uncollected, due to the
excessive amount of damage which the gases inflict on the surrounding
countryside. Hence, the acid must be collected whenever salt cake is
made. The high cost of storage of acid is a factor in determining how
much acid will be produced. Comsequently, from this source of pro-
duction salt cake is subject to the varying demand for hydro chloris
acid.
Insofar as salt cake is a minor product of the chemical industry
it might be sold even at a loss without, serious injury, perhaps, to the
large chemical companies which produce many products. Under such con-
ditions it would .appear that unlss there were an absolute scarcity of
chemical salt cake the market areas served by the chemical companies
could be denied the producers of natural sodium sulphate in most in-
stances. This is likely to be the case in the Northeastern and Middle
Atlantic States and that section of the country bounded on the West by
the Mississippi River and on the South by the Ohio, where chemical
companies producing salt cake are most numerous. The transport costs
of getting the natural salt cake from the remote regions in which it is
mined, has ever been a handicap to the natural industry and is still
very much of a limiting factor on the activities of the natural sodium
sulphate producers/
Statistics of domestic production
Table 1 presents by census years the chemical production of salt
cake, it may be observed that since 1927 the trend of yearly output
has been downward. This is attributable largely to technological
changes in the production of heavy chemicals.
9829
-655-
Table 1. Salt cake (sodium sulphate, crude): Domestic
chemical production, census years 1923 - 1933
Number
i
Made and :
?r( due- :
Value :
Value
of
Total :
consumed :
tion :
of :
per
Year
establish-!
oroduction:
by :
for :
product :
short
ments
.
■producer ,
sale :
sold
ton
: Short tons
1923
34
187,064
46,047
141,017
$2, 973,013
$21.08
1925
38
189,593
48,450
: 140,843
2,339,002
18.61
1927
34
20-8, 5 65
33,573
: 174,992
:■ 2,786,818
: 15.93
1929
28
206,612
36 , 436
: 170,176
: 2,014,838
: 11.84
1931
23
119,399
20,672
: 98,727
i 1,528,032
: 15.48
1933
30
143, 148
, 28,538
: 114,610
: 1,471,278
: 12.84
Source: Basic data, Ccnsiis of lianufactUTcs.
production of
production has
Table -2 presents the bureau of i^ines figures of the
natural salt cake since 1924. 'Considerable variation in
been present from 1924 to 1929. In 1930 natural production reached a new
high level and maintained it in 1951 and 1932. In 1933 natural production
was again noticeably increased, but dropped precipitously in 1934,
declining 64 per cent.
The trend of unit values has been downward up to 1934 when they
advanced sharply. It is believed that this advance is attributable to
the influence of the production of one producer, who by virtue of a
somewhat more strategic location in relation to the market than the other
producers is able to produce and sell at mill prices somewhat higher
than those u reducers mora i-omotelv Jomt.od.
9829
-656-
Table 2. Salt cake (sodium sulphate , , crude) , n a tural :
, Domestic production,, 1924-1934 1/
Statistical
Unit
: Production
Value
value
Short tons
1924
16,148
$174 ,'600
$10.81
1925
• '9,909 :
84.-380
; 3-. 52
1926 ;
• 19,557
165,800
: 8.53
1927
• '28,006
168,882
7.34
1928- - : .
6,559
42,485
6.48
1929
7,540
41,199
5.46
1930
32,630
206,323
6. 32
1931
32,510
198,132
6.ng
1932
32, 204
210,342
6.53
1933
46 , 539
245,240
5.27
1934
16,o50
148,225
8.90
<
Source: Bureau uf Mines and U, S. Tariff Commission.
1_/ Includps small emounts of dauber salt.
Table 3 classified domestic production "by census years 1925 to
1933. Up to 1930, barring 1927, natural salt cake production has been
a negligible part of total sodium sulphate oroduction. In recent years
it has become a more important factor in the market, due to the fact
that chemical production has been decreasing, while natural production
has increased. In terms of a ratio of value oroduct, the natural nroduct
has also increased, but not as noticeably as in the case of production
ratios. This is due to the fact that the unit value of the natural oro-
duct runs considerably lower than the unit value of chemical product.
9829
-657-
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Table 4 presents the production figures of the complainant parties.
Those producers are classified herein as primary producers , that is",
those whose primary obj e ctive is the production of salt cake, and in-
clude several natural producers and a chemical oroducer.
Table 4, Salt cake (sodium sulphate, crude)
Complainnnis' production, 1929 - 1934
Statistical period
Production
Short tons
1929
15,536
1931
• • 17,340 v ■
1932
24,049
1933
33,248
1934
25,336i/
Source: Complaint, Exhibit P.
1/ 9596 tons from natural ' sources.
The production of the complainants has increased steadily from 1929
to 1933, the peak year,' In 1934, however, their production was .about
80 percent of what it was in 1933. The fact that one complainant company
producing salt cake from natural sources closed its plant in 1934 accounts
largely for the. decline in the complainants' output. As reference to
Table 2 will show, natural producers, ■ including the complainant natural
producers, appear to have suffered heavily in 1934 as compared with
previous years, unless 1933 production was abnormally large by reason
of stock accumulation in accumulation in anticipation of increasing pro-
duction costs,
Table 5, derived from official data, oresents a readjustment of
data necessitated by distinguishing producers whose primary abjective is
salt cake production and producers who make salt cake as a minor chemical
product.
Total production of salt cake for sale decreased sharply in 1931
compared with 1929 due to the great decline in non-primary chemical pro-
duction, despite the noteworthy increase in primary production. Both
non-primary chemical and primary production increased in 1933, with
primary producers representing about 40 percent of the total production
for sale. However, in 1934 the primary production declined drastically,
the plants of several natural producers being- closed.
The complainants represented about 52 percent of the primary pro-
duction in 1933 and about 79 percent in 1934. In 1933 they represented
about 21 percent of total- production for sale.
9329
-659-
Table 5. Silt c»':e (sodium sulphate, crude): Total
oroduction for sale, non-orimary chemical, primary,
and complainants ' oroduction, and 'nercentige
participation of each class in the total
oroduction for sale, 1929 - 1934
Production for sale
Percent of
total oroduc-
tion for s?Je
Complainants '
Year
: Uon- :
Total : primary: Primary
: chemical:'
Hon- :
orimary. Primary
chemical :
: Percent
: of total
Production : product ion
:for sale
1929
1931
1953
1934
: Sht. tons:
Sht. tons :
87.0
62.0
60.1
13.0
33.0
39.9
15,536
17,340
33,248
26,336
8.7
13.2
20.6
Source: Derived from official data and complainants' production
figures.
1/ Not available
Exports
Prior to 1929 exports of sodium sulphate were not separately recorded.
Since then, the figures shown are for both crude and refined sodium
sulphate and are not comparable with statistics of oroduction and imports.
Experts have gone mostly to Canada, with lesser amounts to Japan. Since
1933, sodium sulphate has not been separately classified, but it is known
that exports in recent years have been negligible. Table 6 shows the
exoorts from 1929 to 1932.
3829
-660-
Table 6. Salt cake (sodium sulphate, crude and refined)
Exports, 1929 - 1932 1/
Value per
Ye ar
: Pounds
Short tons
Value
short ton
1929
3,331,630
1 , 666
$53,176
$31.92
1930
8,872,462
4,436
113,253
25. 53 :
1931
9,304,887
4,652 ;
75,784
16.29:
1932
2,870,061
1,435
24,155
16.83
Source: Foreign Commence and Navigation.
1/ Sodium sulphate not separately' classified prior to 1929 nor after
1932, From 1929 to 1932 both crude and refined are sho^n together,
hence they are neither comparable with domestic* production nor with
imports.
Competition with the Eur one an cartel is not conducive to any great
development of an export trade in sodium sulphate by the United States,
Moreover, Canada, which has been our best customer, has 'large natural
denosits, particularly in Saskatchewan, and is protected now by a high
tariff - $12,00 per short ton - and a special excise tax of 3 percent
applicable only to imported goods on their duty-paid value. A six per-
cent sales tax is imposed also on all salt cake sold in Canada and on
imported salt cake the tax is figured on the duty-paid value.
The Industry in Foreign Countries
Sodium sulphate is produced in many countries as a natural product
from ore -and brine and as a More or less minor product of the chemical
industry. Natural deposits of considerable size and of increasing im-
portance are found in Canada, Russia, and Chile. Chemical production is
found in the leading European industrial countries, notably in Germany.
No attemnt will be made to describe the industry as it exists in
all foreign countries. However, since Canada ha.s assumed importance in
recent years as a producer of natural sodium sulphate and since Germany
has long been the dominating factor in world markets through the cartel,
attention will be directed to trie industry in these two countries.
Canada
The production of Sodium sulphate in Canada prior to 1920 was
negligible. The domestic shortage of potash so noticeable during the
Sorld war led to an extensive search in Saskatchewan and Alberta.
Many deposits of sodium sulphate in the form of mirabilite were uncovered.
Exploitation of these natural resources started in a small w ay to serve
the needs of the pulp industry and the smelting of nickel-copper ores and
9829
-Col-
in very recent years production figures in Canada have built up rapidly.
Canada has placed herself on a self sustaining basis and is able to ex-
port salt cake, some of which has entered the United States. In 1933,
"the Canadian output of salt cake was valued at $485,416. Preliminary
figures for the first six months of 1934 show a oroduction of 27,689 short
tons valued at 209,409.
Plants h^ve been installed at Likes Kuskiki, Frederick, Fusilier,
Sybout, White Shore, Horseshoe, and Alsask, and consular reports indicate
considerable productive activity.
In Canada, three methods of production have been employed. Accord-
ing to the nature of the deposit and otner factors it has been possible
(1) to mine the bed; (2) to fish crystals oat of the brins; or (3) to
evaporate the brine. In the late summer, brine in deposits become suf-
ficiently concentrated so that intermittent beds of crystals can be
harvested by means of steam shovels. In the fishing operations the crystals
are loaded into scows that are floated over the deposits. This method is
slow, but has the advantage of yielding almost pure crystals needing little
further treatment. However, any method dependent upon intermittent
crystals is naturally limited to a short harvesting season of only a few
months at most each year. On the other hand, methods dependent upon
permanent beds or evaporation of brine involve chemical processes of
ourif ication to eliminate soluble as ""ell as insoluble impurities.
As in the case of natural product production in *he United States,
oroduction in Canada suffers through uneconomic location in terms of
markets and long hauls of the product are necessary. The nearest market
to the Saskatchewan oroduction regions is probably to be found in
Minnesota and Wisconsin, among the sulphate pulp mills.
Germany
The German production of sodium sulphate and niter cake (aoid
sodium sulphate) has been estimated as high as 350,000 tons annually.
The Kaiseroda Works alone have an annual capacity of 120,000 tons and
the I. G. Farbenindustrie plants in 1928 were credited with the capacity
to make 80,000 tons annually, and to these may be added the output of
several smaller producers.
In Germany, one method of oroduction is from magnesium sulphate
liquor, a residue from the process of making fertilizer potash. Former-
ly this liquor was dumped into the rivers as a waste product. Its
commercial possibilities were discovered, however, and there followed
conversion cf magnesium sulphate to sodium sulphate by adding common
salt (sodium cnloride) to the magnesium sulphate at suitable temperatures.
This chemically manufactured product is generally superior to that de-
rived from acid production since it contains practically no free acid,
so that in purity it approaches anhyrdous sodium sulphate, the refined
salt cake. About one-half of the total German production is from this
method. The balance is produced in conjunction with hydrochloric acid.
These synthetic processes have made Germany a leading producer, and
it has been the dominant factor in international trade in salt cake
9829
-662-
through the cr.rtcl ( Sill fat Vereinigung) which has its headquarters at Frank-
fort- on~i.Iain. Other European Industrial countries, notably Great Britain,
France, and Belgium, with exportable surpluses, have frequently pooled their
interests with. Germany to the extent of el locating markets ana even operating
through a joint sales organisation in the form of an international eartcl.
The Se.lfat Vercinigung, hereinafter called the • Sulphate" Union, './as or-
ganized in 1926, with one of its objectives the elimination of intermediaries
in the distribution cf salt cake. Selling conditions were unsatisfactory to
the industry (largely because of the -operations of the so-called "Coffee house"
urokers and curb merchants), and it desired to exercise a greater degree of
control over prices and markets, particularly with respect to prices -aid b;*
ultiua.te consumers. The Union desired to deal only with buyers known to use
the merchandise in their own establishments .and un 'er the present operation
of the Union'- strict control is exercised. The Sulphate Union is a limited
liability company which was organized to handle the' export sales of the principe
German producers of sodium sulphate. It ec -ccrns itself only with the so-called
"technical cre.de salt cake," the purity of which runs from 95 per cent to about
98 per cent. The • Sulphate Union is the sole exporter of crude salt cake. pro- {
duced b its members" in Germany, and individual producers who belong to the
Union are not permitted to export crudi; salt cake, on 'an independent basis.
The Sulphate Union is also said to be under Contract with one or two small
producers not actually members of the Union.' One or two minor concerns in
Germany are said to work in competition with the Union.
. While the Sulphate Union is an export organization, it also exercises some
control over Gorman inland' business, in that each individual producer of salt
cake, the selling independently, must file 'copies of contracts and, invoices with
the Union.
The Sulphate Union is a part o: the European Salt Cake Cartel, known as the
"European Salt Cake Association," which has its ee (-quarters in London. This
is the ke , organization for the following affiliates!
(l) The Salt Cake Association of. London. I
(S) The Sulphate Union of Frankfort.
(o) Belgian interests.
(4) French interests. ,
The French ana Belgian interests, which arc relatively small, are represented
by secretariats and arc bound by agreement not to sell to the United States or
Scandinavian countries, which are the principal users of salt cake, except
through the. Sulphate Union. The British interests cell largely to the
Scandinavian countries, while all contracts for the United States arc made by
the Sulphate Union of Germany*
. . Under the terms nf the European Salt Cake Association's agreement the
Sulphate Union is obliged to allot a given amount of business to the Belgian
producers, also to the French, and sometimes to Butch interests. Thus, ship-
ments for the i nitcd States might at timers consist entirely of German or of
Belgian goods, anc sometimes of 'mixed shipments fron both countries.
9829
-bto~
Except where special qualities arc specified, such as Kaiseroda from
Germany, the Sulphate Union allots deliveries on export orders to German and
Belgian producers on s quote basis. Eai .av.iu, quality, which comes from natural
mineral deposits yielding magnesium sulphate, is considered a somewhat better
quality than the crude salt cake which is produced in conjunction with the
manufacture of hydrochloric acid.
The Sulphate Union is represented in the United States by three fins, each
of which is said to have its own distributing area. Two of these firms are
under agency contracts, working on a commission basis, end the other is a sales
agency, buying at a discount and reselling.
The only relationship between the Sulphate Union and the ultimate buyer
in the United States is that of buyer and seller. The Union exercises no
control over the resale price, in the United States, but in its contracts
requires assurance that buyers are purchasing the salt cake for their own use.
It is said that there is no community of financial interest between the Union
and its customers in the United States.
Prices quoted by the Sulphate Union have been c.i.f. American ports until
recently, when some customers in the United States requested a change to f.o.b.
European port, such as Hamburg, Antwerp, etc.
Payments to the Sulphate Un_on arc made in dollar amounts to the Union's
American agents, who in turn remit through dollar drafts, after deducting the
amount of the agents' commission.
In the case of payments for Belgian merchandise, the Sulphate Union's
American agent in New York- remits to the European Salt Cake Association in
London, which is instructed by the Sulphate Union in regard to the distribution
of the remittance to the various participants in the shipment, including the
Sulphate Union.
The fact that Germany produces much of its spit cake as a by-product,
and because salt and magnesium sulphate from potash refining are abundantly
available raid very cheap in Germany, together with the fact that the control
of all sales abroad is in the hands of the Sulphate Union, which in turn is a
dominant factor in the European Cartel, make German producers very keen com-
petitors in any market.
Imports
Annual imports of salt cake from 1922 to 1934 arc shown in Table 7. Prior
to 1328 the amounts imported were negligible, the domestic demand being amply
cared for by the chemical industry producing crude sodium sulphate. However,
the phenomenal growth of the sulprhte pulp industry because of the increasing
popularity of kraft paper, the fact that chemical production of salt cake
depends on the demand for hydro- chloric acid and nitric acid and not on the
demand for salt cake, together with technological changes in the production of
acids wherein salt cake is no longer produced, and the then very small amounts e>:
sodium sulphate produced iron natural sources, made the American market peculiar',
dependent upon imports to meet the increasing demand for salt cake. T..ie,
relative scarcity encouraged imports and accounts in part for their rapid increar
since 1927. At the same time they encouraged greater production of salt cake
domestic: 11; from natural resources.
9829
•■ -664-
Table 7. Salt coke (sodium sulphate, crude): Imports for
consumption, 1953-1924
Statisticrl Quantity Value Value per
period . ( short tone) ( doll; rQ short ton
1922 715 $ 8,537 $ 11.94
1223 .5,283 84,051 15.91
1924 . 3,427 40,582 11.84
1925 1,913 . 18,176 9.50
1926 6,270 6 ,321 10.58
1927 11,172 100,279 8.08
1928 28,227 253,553 8.98
1929 91,634 829,793 9.06
1930 70,335 800,432 11.38
1931 72,747 803,509 11.05
1932 01,124 . 644,074 10.54
1935 99,209 885,306 8.92
193-:. . . . 89,701 799,141 8.91
Source: U, 3. Tariff Comrais.sion.,
The. chief sources of imported sodium sulphate are revealed in Table 8.
It may be observed that Germany has ranked high as an exporter, to the United
States in every year since 1920. In 1954, Germany' s contribution v/as par-
ticularly large, representing 70 per cent of the imports for that year. The
proportion contributed by Canada was 26.5 per cent in 1931, but the tondency
has been for imports to decline from that source since the 1931 high. The
unusually large amounts from the Netherlands in 19.09 and Belgium in 1933 arc
believed to je due to transshipments of the product from Germany."
9829
Table 8. Salt cake (sodium sulphate crv.de): Imports
for consumption by countries,
1929 - 10, I
1029
19,
1931
X J Co
1933
1934
(Juan tit" (short tons
Germany
34,811
2*, 334
3 .
32/ 5-
38,110
63 , 270
Belgium
2,022
8,811
8,454
16,156
35,610
17,793
Canada
2,545
6,897
19,246
7,980
12,423
3,648
Netherlands
5 ,038
5, 236
4,395
3,573
4,C 63
3,634
All other l/
1,419
18,057
. 732
1,355
9,062
1,356
Tote
tl 91,635
70,335
72,747
61,123
99,268
89,701
Value
Go many
$316,242
$312,171
$469,308
$356,279
$354,246
$565,337
Belgium
18,642
128,311
78,677
161 , G27
330,114
152,255
Canada
21, CSS
94,260
188,687
77,193
109,329
34,198
Net: crlands
•459,220
46,754
60 , 394
38,880
37,426
39,656
All other 1/
14, 51
218,946
5,943
10,095
54,191
7,144
Total 829,793
800,432
803,509
64- ,074
855,506
799,14-1
Vrlue per short ton
•
Germany
$9.00
$10.64
511.85
311.11
$9.30
30. 94
Belgium
9.22
14. 56
9.31
10.00
9.27
3.56
Canada
8.50
10.59
9.3
9.67
8.80
9.37
i t-icrlands
9.03
8.93
12.97
10. 87
9.21
10.91
All other 1/
9.90
12.13
3.12
7.45
5.98
5.27
Average •
; 9.06
11. 38
11.05
10. 54
8.62
'i p.-l
Per cent of total en
lantity
Germany 38.0 41.7 54.4 52.4 38.4 70.5
Belgium 2.2 12.5 11.6 26.4 35.9 19.8
Canada 2.3 12.7 26.5 13.1 12.5 4.1
Netherlands 55.5 7.4 6.5 5.9 4.1 4.1
All ether 1/ 1.5 25j/7 1.0 2.2 9J. 1.5
Total 100.0 100.0 100.0 100. r: 100. 100.0
S our c c : U.S. Tari f f C ommi s s i o n.
1/ Cilc, Spain, United Kingdom, Hungary and U.S. S.3. in Europe.
The points of impact of imports arc shown in Tabic 9. In 1934, ap~
proximately 75 per cent of the imports entered through Gulf customs districts
and about 12 per cent through North Prcific ports. It is iii these coastal and
immediate hinterland areas that the primary producers of salt cake hope to marko"
their product. Consequently, these market areas re pre rent the regions of keenesi
competition between domestic and foreign saltteeakc. In the C-ulf area in
particular this is true, since about 50 per cc St of the total drily capacity of
the el ate pulp industry is represented in the coastal regions of the four
States of Florida, Alabama, Mississippi, and Louisiana, and it is this industry
which is the largest user of sodium sulphate.
9829
-666-
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-667-
Table 10 indicates the trend of imports for consumption compered
with domestic production Tor sale from primary and non-primary chemical
sources of sodium sulphate. It nay be observed that primary production
has increased rapidly from 1929 to 1S33, whereas non-primary chemical
production for sale has decreased noticeably due to the technological
changes already indicated. However, the net effect has been a decline
in sodium sulphate available for sale from domestic sources. Imports for
consumption which had risen rapidly in the 1920s reached their peal: for
that decade in 1929. They declined considerably in 1930, 1951, and 1932,
and then reached a new high in 1933. Expressed in terns of a percentage
of total domestic production for sale, imports for consumption increased
from 51.7 per cent in 1929 to 61.8 per cent in 1933. This increase in
large measure appears to be more attributable to chemical production de-
cline in the domestic industry, particularly on the part of the non-
primary producers, rather than to a material increase in imports in 1933
as compared with 1929. In 1934 imports for consumption declined to a
level just under the 1929 figures. Despite this decline, the ratio of
imports for consumption to primary production increased greatly due to
the materially greater decline in the output of the primary producers.
The ratio of imports to total domestic production for sale in 1934 is
not known, since total chemical production of salt cake in 1934 is not
available. However, chemical production for sale would have to increase
about 16 per cent in 1934 over 1533 to maintain the same ratio of imports
for consumption to total domestic production for sale in 1934.
Table 10. Imports for consumption compared with primary,
non-primary chemical, and total domestic production
for sale, 1929 - 1934
Domestic production
for sale
Imports
for
con-
sumption
Ratio of imports for
: consumption to
Year .
Irinary
IFon- : ;
primary : Total
chemical :
Pr imary
produc-
tion
Eon-
: primary
chemical
Total
produc-
tion
: :
Per cent
1929
: 23, 075
; 154,640 ; 177, 716
i 91,634
: 397.1
59.2
, 51.5
. 1931 I
49 , S50
81,387 : 131, 237
72,747
145.9
89.4
55.4
1932
49,965
1/ ! -
61,124
122.3
-
-
1933 .
64,261.
96,693 : 161, 149.
99 , 269
154.5
102.4
61.6
1934 .
,33,390
1/ ': -
89,701
> 2c d. o
-
-
Source
U.S.
Tariff Commission
and data
in Tsble 5.
1/ ITot available.
9629
•668-
Important Conroetitive Factors
Fore ign e:: change
Since the rise in the dollar value of the German reichsmark from
parity 23.8 cents in March 1933 to 40.2 cents in the last quarter of
1934, German goods have been at a disadvantage in the American market.
To meet currency devaluation in other countries the German government
has resorted to foreign exchange control measures, which have amounted to
a devaluation of the reichsmark for -.purposes of foreign trade, while the
free reichsmark within the country represents the gold standard currency.
This has been accomplished by means of "blocked" foreign-owned funds
in the form of "blocked marks," of which there are several kinds, classi-
fied according to origin; and, more recently, by means of German scrip.
Originally, it was intended that these blocked funds be used to fi-
nance "additional exports," that is, exports from Germany in addition to
such usual and regular exports as existed at the time when blocked funds
were made available. However, blocked funds have become an instrument
which has as its chief function the retention of control over already
existing exports,. the loss of which was threatened by various factors,
such as devaluation of foreign currency , anti-German boycott, and rising
production costs within Germany itself. Thus, in practice,., "additional
exports" may consist of any export order which an exporter is in danger
of losing by reason of underbidding by a competitor in some other country.
For example, an American importer may write a German exporter that the
latter' s prices are too high, a.nd unless adjustments are made downward
the order will be placed elsewhere. The German exporter is, under such
circumstances, in a position to go before the German exchange control
authorities with a demand for assistance from blocked funds.
Tho there axe numerous types of blocked funds, only three types are
of general interest insofar as financing of "additional exports" : is con-
cerned.. These are: registered marks, scrip, and dollar bonds. :
TThen scrip procedure was introduced in October 1, 1933, it was in-
tended tha.t the use nf registered marks for financing exports be dis-
continued. However, American importing .firms already holding permits to
use registered marks in payment, for German goods were allowed to use
their unexpended portions for current importations. In recent months not
only have old permits for the use of registered marks been extended, but
new permits have also been issued. In the case of the registered marks,
it is the foreign importer who : takes the initiative and obtains a permit
to buy registered marks. This allows him to buy marks at from 30 to 40
per cent below the day's rate for free marks, that is, for the usual and
ordinary currency of Germany as quoted on the world's exchanges. Usually
the foreign importer is permitted to pay for 50 per cent of the value of
the imports with these registered marks purchased at a discount. However,
declining German exports have compelled the German foreign exchange con-
trol authority to issue permits authorizing the use of 60 to 70 per cent
in registered marks, in order to overcome the currency devaluation of
foreign countries.
9 829
- by-
Use of scrip has "been the prevailing procedure during 1954 for fi-
nancing ^additional exports." The German exporter in this instance
takes the initiative by making application to receive scrip payment in
reichsmarks. Technically, he is required to prove that he has had to
accept an export order at a loss. Actually, as in the case of registered
niarks, evidence of compulsory price redaction to meet genuine or fancied
.foreign competition may he sufficient to place the transaction within the
meaning of "additional exports. "
Scrip has arisen out of interest payments on German public and pri-
vate "bonds held by American (and otner foreign) investors. Payments are
made through the German Conversion hank, hor example, the Conversion
Bank forwards the American investor 50 per cent of the amount of interest
due on bonds in dollars and 30 per cent in German scrip. The bondholder
can hold and redeem this scrip at 100 per cent of its face value sometime,
though the date is indefinite; or the scrip can be sold at a 50 per cent
loss to certain American banks authorized by the Conversion Ban 1 : to buy
at that reduced price. The American banks remit this scrip to the Gold
Discount Bank in Germany and receive credit for the full purchase price
paid ~bi' them, plus a commission for services rendered. The German, ex-
porter -/ho has invoiced his goods at the lowest price necessary to meet
competition, is maid in free reichsmarks for the full amount of the in-
voice by the American importer. To compensate for the difference between
what he should have received for his goods and what he had to take, he
buys scrip from the Gold. Discount 3ank at a discount sufficient to cover
the loss on his order, and re-sells the scrip to the Conversion Bank at
100 per cent of its face value, thus compensating himself for the reduced
prices necessary to meet competition.
The net result of this procedure is that G-erman exporters make
foreign sales which otherwise could not nave been made,- and American in-
vestors in German public and private bonds bear the burden through the
reduced returns in interest on their loans in Germany.
A third method of financing "additional exports" is through the re-
purchase of German dollar bonds held in the United States. It is not
known whether this procedure is in very wide use at the present time. It
is believed that its application is reserved eitner for large transactions,
or for those German exporters who have outstanding bond obligations in the
United States. The German exporter does not actually buy and sell bonds,
but he is authorized by the foreign exchange control authority to deal in
so-called "export valuta" up to a certain percentage of the total invoice
value of the goods shipped - usually about 50 per cent. German banks do
the actual buying and selling of the bonds, and the exporter simply re-
ceives his additional payments from the profit on the bond transactions.
Recently quotations on "export valuta 1 ' have run as high as 175 per cent,
that is, German dollar bonds purchased in New York can be sold in Germany
at a price 175 per cent over the "Jew York purchase price. This permits
the exporter to receive 40 per cent of the selling price in reichnarks
at the current exchange rate of about Ei» 2.50 per dollar and the balance
in bonds, convertible through sale in Germany at a price sufficiently
attractive as to compensate the exporter for making the sale under the
conditions neces.sary to obtain the order.
-670-
However, with respect to crude salt cake exported to the United
State-, the Sulphate Union disclaims receipt of payments in scrip or
other forms of blocked funds, or of any form of drawback, "bonus, or
premium designed especially to facilitate the exportation of this product.
If this he the situation, then foreign exchange control in Germany so far
as it relates to salt cake, is a matter of potential, if not present
concern.
The accompanying chart is presented to show the trend of United
States imports of salt cake from Germany and the movement of the reichs-
mark in terms of dollars. It is significant that despite reichsmark ap-
preciation in dollars during 1S33 and 1934 Germany contributed 38,110 of
the S9,25S short tons of salt cake imported into the United States in
1933 and 63,270 of the 89,701 short tons in 1934. Germany's percentage
participation in the total United States imports of salt cake rose from
33.4 in 1933 to 70.5 in 1934. Expressed in another way Germany increased
its exports of salt cake to the United States in 1934 by 25,160 more short
tons than 1933. This is equivalent to a 66 per cent increase in 1934
over 1933.
The chart also shows the reichsmark equivalent of the dollar value
of German salt cake t>er unit of one short ton based on the going rate of
exchange in cents per mark from January 1933 to March 1935, as compared
with the number of reichsmarks German sellers would have received for
one short ton of salt cake had the old dollar mark parity of 23.32 cents
been maintained.
These trends tend to raise some doubt as to the validity of the
disclaimers of the Sulphate Union that the salt cake industry in Germany
is not deriving some benefits through governmental exchange control
devices.
98?9
-671-
SALTCAKE COMPARISON OF U.S. IMPORTS FROM GERMANY
WITH MOVEMENT OF DOLL AR/REICHSM ARK EXCHANGE, AND
VALUES PER SHORT TON IN TERMS OF MARKS. BY MONTHS.
1933-1935
1600 ,
UNITED STATES IMPORTS TOR CONSUMPTION,
1400
IZOO
1000
800
600
400
200
60
40
20
O
60
40
20
BY MONTHS, 1933 - 193 5
SHORT TONS
REICHSMARKS
PER
SHORT TON.
COLLAR VALUE
CONVERTED
AT
PARITY OF E
XCHANGE
x *^^_/ \ fy
\ ir"^ X/
£yr
V- N
*** •
REICHSMARKS
SHORT TON, DOLLAR VALUE
CONVERTED
AT
GOING RATE OF
EXCHANGE
GERSvi~.N
REICHSMARK
PARITY-23.82 CENTS
DOLLAR DEVALUATION
JANUARY 30, 193-4
U S ABANDONS
GOLD STANOARD
APRIL 1, 1933
J F AMJJASONOJFMA' JjAL,ONDJFMAMJJASOND
1933
193 4-
SOURCt U S TARIFF COMMISSION AND
FEDERAL RESERvF BOM
1935
MR A
research & planning
IMPORTS SECliON
No. 223
a 39
-673-
Comparab ility of •product
German s:lt cake of the quality exported to the United St; tes
varies between 25 end 98 per cent purity. The Kaiseroda product is gen-
erally recognized as the best quality of German salt cake, and "bears a
slightly higher price than that produced in ether quarters. In general,
alt cake produced chemically and from natural sources in the United
States and the German salt cake are closely comparable in quality. So
for most uses, technically, the source and method of production appears
to be a matter of indifference. This fact confines the competitive sit-
uation largely to price and delivery.
Prices end transportation rates
As a rule, German salt cake producers sell to their American cus-
tomers on long-term contracts, with "orices quoted c.i.f. American port.
However, since March 195?, prices on deliveries ra.de to Gulf ports have
been quoted f.o.b. European port. Salt cake delivered to Pacific Coast
ports continues to be quoted c.i.f. Certain additional charges (about
$1.90 per ten for bagging) are riade for delivery in bags rather in bulk.
Terms of sale are net cash, except '..here delivery is made to an American
firm having a scles contract with the Sulphate Union. These long-term
contracts usually contain a conditional price-reduction clause, thus en-
abling the American buyer to benefit from any price decline. Under this
clause reductions in price have been made from time to time since 1931
from $14.75 per short ton c.i.f. Gulf ports, to $9.25 per short ton f.o.b.
steamer European port, at the present time the buyer now making his own
arrangements for shipment and its attendant costs, or about $12.35 p er short
ton, Gulf port. Prices to customers in the Pacific Forthwest have also
been reduced from $16.95 per short ton c.i.f. American port in 1932 to
$14.50 in 1933, and to $12.75 c.i.f. in 1954. This latter price appears
to be the prevailing one for G-erman salt cake delivered to the Pacific
Northwest ports at the present time.
Ocean transportation rates from Antwerp, Hamburg and Bremen, Germany,
and Rotterdam, Netherlands, to New Orleans, La. for the participating steam-
ship lines in that service arc as follows:
Salt C ake ( Sodium sulphate, crude )
Per thousand Short ton
kilos equivalent
In bags $3.25 $2.95
in cr sl:s
3.40
Ir bulk 3.00 3.72
These rates apply to Llobile, Ala.; Galveston, and Houston, Texas,
also, but not to Panama City, Fla.
It should be noted that the rate of $3.00 per thousand kilos was
originally shown in the shipping tariff schedule, but subsequently was
deleted prior to the receipt of the tariff in Washington, November 16,
1934. Consequently this occasions some doubt as to the precise rate
9339
*
-573-
ilicable to sr.lt cake shipments in bulk to tlie Gulf ports.
On the basis of the above rates the price of German salt cake in
bull:, wharfside, "ew Orleans, La., would be, therefore, approximately
$1.3.00 per short ton, not inclx di : as rine insurance and other charges
incidental to ocean shippin- . Also, bhere must be added wharfage and
unloading charges, pins freight to inland points of consumption, such as
Camden, Arkansas and Tuscaloosa, Ala. These inland rates, which are im-
port commodity rates and lower than domestic commodity rates between the
same points, are rs follows: Hew Orleans to Camden, Ark., 15 cents per
100 pounds carload lots, or $5. .1 per short ton; ITew Orleans to Tusca-
loosa, Ala., 16g cents per 100 pounds carload lots or $3.53 per short
ton. These charges include the additional 7 per cent emergency rate on
the line haul charge, when such a charge is not in excess of 2 cents ier
hundredweight . The delivered cost of German salt cake to Camden, Ark.,
therefore,- would approximate $15.96 to $16.21 per short ton, allowing 75
cents to $1.00 to cover marine insurance and the. unloading and handling
charges at the American dock, etc. The delivered cost at Tuscaloosa, Ala.,
would approximate $16.28 to $16.53 per short ton.
The ocean rate on salt cake from Antwerp, Hamburg, Bremen, Rotter arm
and Amsterdam to the Pacific ports of Los Angeles end San Francisco, Cal-
if., Portland, Ore., Seattle and Takoma, Washington, is $8.50 per thousrnd
kilos, or $7.71 per short ton. Longview, 'Washington, which is also the
destination of German salt cake shipments, is net a terminal nort of dis-
charge for ocean carriers constituting the ocean freight conference, the
rates of which are quoted herein, hence post-terminal rates are imposed
on shipments destined to this port. The post-terminal rates applicable
to Longview, Washington, follow:
P er 1000 k ilos
On rates over $10.00 O n rates of 5 10 .00 and below
1000 tons and over - no extra Kb extra
500 tons to 1000 tons - $2.50 $1.25
250 tons to 500 tons - $5.00 2.50
Under 550 tons - $10.00 5.00
Shipments destined ultimately to Camas and Port Tcwnsend, Washing-
ton, would bear the rate to the terminal ports of Portland, Ore., and
Seattle, Washington, respectively, plus additional charges for reshipment
by coast '.vise and river lines.
It is unlikely that shipments from abroad would run less than 500
tons per shipment, hence the post-terminal rate to be added to the term-
inal rate would be $1.25 per thousand kilos, or $1.14 per short ton. The
rate to Longview, Washington, therefore, would be $8.85 per shrrt ton
wharfside, net including marine insurance and incidental shipping ex-
penses. At the contract price of $12.75 c.i.f. American port, German ship-
ments to Longview, for example, would yield the Sulphate Union $3.90 per
short to.;, from which would have to be deducted German inland transport-
ation rates as well as marine insurance end ether incidental ocean shin-
ping charges not accounted for.
9829
-674-
Since 1930 the trend of salt cake prices has been downward. It is
difficult, however, to accurately describe the price situation for the
domestic product, since it is produced under various conditions at wide-
ly scattered points and transportation rates bulk large in the final
price th the consumer.
The Bureau of Labor statistics report the wholesale price of domes-
tic salt cake from the chemical industry at $13.58 per short ton in bulk
at the works .in 1932, $13.00 in 1933 and 1934, and $12.00 in March 1935.
The Oil,. Paint and Drug Reverter, a trade journal, reports prices
for salt cake each "eek. This medium of trrde information quotes a range
of prices of salt cake in bulk at the -'orks, e.g. $13.00 to $13.00 per ton.
.This ciuotation has varied little, if any, from week to week during 1933
and 1954. At present, Hay 1935, salt cake is ouoted. at $12.00 - $16.00
per ton by this journal. It is said that the low auotation constitutes
the bulk of sales, which are usually made on a. contract basis during the
early part of the "-ear. Occasional sales in snail amounts, and quality
differences, account for the range.
However, these reported orice quotations rre more or less nominal and
are significant only as they indicate the trend of orices. In the chem-
ical trade the reported f.o.b. price for salt cake represents the price
obtained by suppliers of salt, cake enjoying the lowest transportation rates
to the consuming point. The real f'.o.b. orice to other producers is less
than the quoted f.o.b. price.. by the amount of the freight absorbed by the
shipper whose location in relation to the market is less favorable. The
extent of any market, therefore, is limited b-r the degree of variance in
production costs in the trade and the willingness and ability of less
favorably situated chemical companies to absorb freight. The situation is
further complicated by the fact that the chemical industry produces salt
cake- along with many other chenicals.
kith respect to the producers of salt cake as a primary objective
which includes the producers of salt cake from natural sources, the range
of prices of salt cake, f.o.b. plant, is very wide. This is due in part
to varying production methods and costs- koreover, freight rates are of
cardinal importance in the marketing problem. Thus, in 1932 the range of
f.o.b. orices of the cormlainant primary producers was from $5.30 to $14.80
per short ton on shipments destined to consumption points in the lo'ver
Mississippi Valley, from points as far distant as the Nevada deposits, and
as near to that market area as a. producing point not far from lieu Orleans.
In 1934 the range was from $'5.10 to $13.08 f.o.b. these points.
The accompanying map sno- s the location of the leading points of pro-
duction of the Sulphate Pulp Industry, '.'hick is the largest single consLuner
of crude salt cake; the location of the properties of the complainant pro-
ducers, rhose primary objective is the production of salt cak? t and trans-
portation rates from the points of production to points of consumption in
the sulphate pulp industry! The location of the plants of a feu non-primary
producers of chemical salt cake is also shown. As already indicated, chem-
ical plants producing salt cake are numerous in the region East of the Miss-
issippi and korth of the Ohio Rivers, and obviously are in such a strategic
position to meet the demand for salt cake in tais market area that the pri-
mary producers of salt cake and the importers of German salt cake, cannot
9829
-675-
easily compete with then under present conditions. It is nob likely that
this domestic chemical salt cake ' ould be shipped into the Gulf market area
either coastwise or by rail, due to transportation costs, except possibly
in tiio case of chemical salt cake "oroduced in Monsanto and Hegeswich, 111.,
end Grasselli, Ind. Even these plants '•ould be more likely to serve their
natural mark-, t areas, including the "'.'i sconsin sulphate pulp mills, unless
their stocks of salt cake became excessive in terms of the demand in their
own natural market areas, due to an increased demand for hydrochloric acid
which is produced jointly with salt cake. The fact that the annual salt
cake reauirements of the large consumers ore usually provided for by con-
tracts arranged earl" each year, it is doubtful whether the chemical pro-
ducers would enter this Gulf market are? to any great extent other than
occasionally. It is highly unlikely that the].' would serve the more dis-
tant Pacific l^orthv.-est under the present price and competitive conditions.
It appears, therefore, that the so-called primary producers, largely
composed of the complainants, and the German Sulphate Union, would serve
the Gulf and Pacific i'orthwest coastal regions. The competitive position
of the domestic primary -nrodveers is revealed by the transportation rates
shown on the map. Thus, salt cake shi yoed from Weeks, La., to Camden, Ark.,
bears a rail charge of 33 cents per 100 pounds in carload lots, minimum
weight 40,000 pounds, plus the emergency 7 per cent rate on the line haul
charge, or $4.92 per short ton. In view of the present approximate deliver-
ed price of German salt cake to Camden, $15.93 to $16.21 per short ton,
the producer at Weeks could not operate with production costs above nor
afford to quote a f.o.b. mill price much in excess of $11.04 to $11.29 per
short ton, without losing trade to German competitors. Probably better de-
livery service due to proximit;' to the market would allow the domestic salt
cake producers some leeway in their price quotations.
Shipments of salt cake from Monahans, Texas, to Camden, Ark., bear a
rate of 26 cents per 100 pounds in carload lots, minimum weight 30,000
pounds. This is equivalent to $5.56 per short ton, including the additional
emergency 7 per cent line naul charge. The primary producer at Monahans,
therefore, could, not quote a price f.o.b. mill much above $10.40 to $10.65
per short tor: and obtain business against German competition at this con-
suming point under the present price Quotations. From Monahans, Texas to
Tuscaloosa., Ala., salt cake shipments in carload lots boar a rate of $8.50
per snort ton, including the emergency charge. Therefore, to meet the com-
petition of German salt cake shipped- inland by rail, the f.o.b. price Mona-
hans must not greatly exceed $7.85 to $8.13 per short ton in the Tuscaloosa
market.
The production co r ts of the domestic primary producers attempting to
compete with German salt cake at the points of consumption mentioned above,
according to data supplied by the complainants, are either about equal to
or in some instances higher than the f.o.b. prices which they must quote to
be able to compete with German salt cake and obtain orders from the sul-
phate pulp mills and other users of salt cake in the market areas considered
herein.
Freight rates from hina, Nevade and Clarkdale, Arizona, under the pre-
sent price conditions, appear to make it extremely difficult for these pro-
ducing points to enter the Gulf market area in competition with their more
9829
-67f-
9G5i
-677-
favorably located domestic competitors and the German product. The bur-
den of freight rates, as reference to the mco would show, is somewhat
less in the case of Clarkdale but burdensome, nevertheless under the pre-
vailing market conditions. On the other hand, Hina is more favorably
located to serve the Pacific Northwest demand for salt cake. With Ger-
man sff.lt cake quoted at $12.75 per short ton, c.i.f. at the Pacific North-
west points, Hina can compete as long as production costs and auoted mill
prices do not greatly exceed $8.15 per short ton. "Test Coast chemically
produced salt cake and imports from Chile and Canada tend to complicate
the situation in this area.
Developments at Trona, Calif., in the Searles Lake Region, where
salt cake was produced in 1934 as a by-product of the potash and borax
industry, offer possibilities for the rise of a strong competitor both
of the German and present domestic suppliers of the salt cake markets on
the Pacific Coast, also. Furthermore, water rates out of San Francisco
northward to Portland, Oregon, and Seattle, Washington, are relatively low.
At the present moment the company '."'hose plant is under construction
near Salt Lake City is precluded from entering the market competitively
either against domestic or German salt cake, due to extremely high freight
rates. Such rates as a^e quoted at present are class rates. Hence this
potential producer must obtain a reasonable commodity rate on salt cake in
order to enter the existing markets.
In general, it would appear that the domestic primary producers are
suffering from uneconomic -locations in relation to markets, a disadvantage
which is accentuated as long as the price of salt cake is relatively low
and freight rates make up such a large proportion of the delivered price
to the consumer. Furthermore, these small primary producers are obliged
to comt^te with salt cake produced by large domestic and German chemical
producers and the Germans' are favored by ocean transportation rates which
are very low in comparison with our railroad rates.
In view of the fact that foreign produced salt cake' enters the country
largely through the Gulf and Pacific Northwest .ports) Table 11 is submitted
to compare these entries in recent years with the production of primary
producers of salt cake in the United States who, by reason of their loc-
ation, must also serve the Gulf and Pacific Northwest market areas in com-
petition with the German' product.
The data in Table 11 reveal that' a' larger and larger percentage of
the imports for consumption are entering the Gulf and Pacific Northwest
ports in the regions which are the market areas most economically available
to the domestic primary producers. In 1931, 55 ;er cent of the imports for
consumption entered through the customs in these two areas, whereas through
the same areas in 1934 there entered 91 per cent of the total imports for
consumption.
In 1933 the ratio of imports into Gulf and Pacific Northwest ports was
119 per cent of the production of the domestic primary producers; whereas,
in 1934 the ratio rose to 244 per cent. This was due to a decline of slight-
ly less than 50 per cent in the production of salt cake by the primary pro-
ducers, while imports for consiimption declined only about 10 per cent. The
9829
-678-
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9229
-G79-
ratio of total imports for consnwntion to domestic primary production in
1933 was 155 per cent am in 1934, 259 per cent.
The ratio of total imports for consum >tion to total domestic pro-
duction, which includes both chemical and natural salt cake, as reference
to Table 10 will show, was 61.6 oer cent in 1933, which is about 10 per
cent higher than it was in 1.959 and about 5 per cent higher than it was
in 1931. The total chemical salt cake production for sale in 1934 is not
known, but unless the output from this source increased hy about 16 per
cent in 1934 over 1933, the ratio of imports for consumption to total
domestic production for sale v;ould be greater in 1934 than they were in
1933.
Effect of the National Industrial
■Recover;-- Act
Code -provisions
The Code of Fair Competition for the Chemical Manufacturing Industry,
on and after its effective date, Tebruary 30, 1934, restricts the hours of
work of persons (with certain exceptions) employed within the chemical in-
dustr; 1 " to no more than an average cf 40 hours per week during any period
of four months end to not more than 48 hours during any week.
Minimum wage provisions are summarised as follows: On and after the
effective date of the Code, the minimum wages paid by any employer in the
chemical industry to any employee sha.ll not be less than 35 cents per hour
when enroloyed in the Southern district, that is, territory south of Mary-
land, "est Virginia, Kentucky and Missouri, and including the states of
Oklahoma and Texas; no less than 40 cents "oer hour elsevhere in the United
States, provided, howevsr, that if the hourly rate for the same class of
work or. July 15, 1929 was less than 35 cents per hour in the Southern
distrfct or les& than 40 cents per nour else v 'nere in the United States,
in which case the minimum wages paid hereunder shall not be less than the
hourly rate paid on June 15, 1929, and in no event less than 25 cents
per hour in the Southern district and 30 cents per hour elsewhere in the
United Sta.tes, except 'lerever a state provides a higher minimum wage, in
which case the wa~e per hour shall not be less than the minimum provided
by the state law. Certain exceptions are made to these provisions in the
case of apprentices and the aged or infirm kept or the payroll as watch-
men, etc.
Costs, wa^e rates and employment
"ith respect to the complainant primary oroducers it is difficult
to formulate any general conclusions with respect to the effect of the
National Industrial Recovery Act on costs, wage rates and employment.
One complainant is a. corroa.ny whose plant has been under construction
and has as yet not seen fit to go into oroduction, allsgedly because of
price conditions due to imports. Another leased its properties in 1930
to a company which is not a party to this complaint, consequently, data
are lacking in this instance. A third company oroduced in 1933 and pro-
vided data with "erpect to costs, payroll and emplo3' - raei..t for that year,
cut it has not been operating in 1934 since the code became effective.
9829
-680-
The remaining two complainants have operated in pre-code and post-code
periods, but their production technique differs considerably, one ob-
taining salt cake from brine by means of a chilling process, and the
other treating common salt (sodium chloride) chemically and obtaining
salt cake. In the one case laoor costr ' ere slightly under 41 per
cent of total costs of production (not including interest on invest-
ment) in the last half of 1933, and 33 pi r cenb ^or s representative
period under the code. In this instance the .downward trend in percent-
age of labor costs to total costs per "unit may have been due to the
fact that this company had just begun operations about the middle of
1933 and "as able to cut laoor costs per unit as -oroduction got under
way. Also, in this care total costs per ton were less after the code.
In the other instance labor costs before the code constituted about 11
per cent of total production costs, er. elusive of interest on investment,
and slightly over 15 per cent after the code. Total cofts per unit
were 5 per cent higher in the post-code than in the "or?-code period.
However, the costs submitted by this company hich produces salt
cake chemically are subject to question for several reasons. In the
first place this company buys its raw material, salt, from its parent
and the price paid for it 'may or may not be at the prevailing market
price. Secondly, it produces hydrochloric acid in conjunction with salt
cake, and though salt cake is its primary product, it is not known from
the available information precisely now costs are allocated between the
two products.
7ith respect to employment, an increase in the numbers employed "as
experienced by the two companies operating when the cod.e vent into effect.
This increase amounted to 35 per cent, approximately, However, it is
not known to what extent code requirements have precluded operation and
employment in the plants which have been and still are closed.
In the instances '"'here data "ere sufficiently complete to permit
analysis, it appears that hours of work per week per worker have been
reduced to conform to the code requirements and the average weekly wage
has risen slightly since the code became effective.
In the case of the one operating company giving nearly complete data,
the average hourly wage rate, though low in absolute amount, is relatively
much higher than it was in 1933, and slightly higher than it was in Oct-
ober, 1929. In terms of the code, the wage rate in this case would con-
form to the code requirements under the exception "That if the hourly
wage rate for the same class of work, on July 15, 1929, was less than 35
cents per hour in the Southern district * * * and in that case the min-
imum wages paid, hereunder shall not be less than the hourly rate paid on
July 15, 1929 and in no event less than 25 cents per hour in the Southern
district * * *. "
9829
-681-
Statis tical Arroendix
LIST 01' SA
Spit cake (date for chart). ■
ire~u of Lacor Statistics wholes le. price of crude salt cake and tread
Of unit values of salt _c-i:e fron various sources, 1925-1934.
Salt c; ke -orices (wholesale) per ton, spot, Her? York.
(U.S. Tariff Commission)
iTiter cake brices -,er ton, bulk, at rorks,' siot He" York.
- (U.S. Tariff Commission)
Glauber salt orices (wholesale) >er 100 pounds, spot, Hew York.
(U.S. Tariff Commission) ' ".
G-lauier salt prices (inoortedj i, "orgs, 100 pounds, spot, JTew York.
(U.S. Tariff Com ission)
Domestic production of hydrochloric acid and chemical salt -cake, by-
census ye ;rs, 1923-1933.
Consumption of salt crke" injjthjs lass industry, by States, 1927 and 1929,
Sulphate pulp mills and their daily capacity.
Salt cake (sodium sulphate, crude): Production
indices, classified on'the'basis of objective,
. chemical or primary producers*
nd' value data with .
as': either non-primary -
Number of reichsmarks -oar .dollar: rTew York exchange.
Comoarative dost of German and domestic salt cake on Pacific Coast in
1929.
Sodium sulohate, all forms: United State imports for consumption,
1922-1933.
Salt cake (sodium sulphate, crude): Trend of imports for consumption,
1929-1934.
9829
-ess*
Salt cake (data for chart)
: la -lorte, :
.'or
Heichsnarks
s per short
Value of
Statis-
! consumt
Lon
ton - doll?
» converted ;
\r vr.lue
it -
reichsmark
tical
'All countries
'Germany
in cents
period
Parity of
Crbin.'i rate
(Par s
exchange
of exchange
23.82-<#
! Shor
t tons
1933
January
6,955
2,257
46.01
46.10
23.77
February
5,429
859
41.56
41.54
23.83
March '
8,173
2,438 •
37.66
37.31 . !
23.85
April
8,063
2,225 ,
44.71
43.66
24.39
May i
10,543
3,021 ■
40.51
35.27
27.36
June :
8,464
1,674 :
,38.08 •
31.48 :
28.81
July
6,819
2,299 :
44.92
o2.1o
33.26
AUgUSt !
11,032
6,134 :
36.27
26.41
32.71
September:
8,214
5,202 !
36.86
' 24.78
35.43
October
12,516
3,669 :
38.53
25.93
35.43
November
7,166
4 , 351
34.30
21.36
38.24
December
5,797
3.930
-.40.76
28.01
37.32
Total i
99,269
38,110 •
1934 :
January
5,235
3,585
36. 82 '
23.33
37.59
February :
10,512
7,430 '
40.72
24.94
38.88
March ;
9,407
3,917 !
55.84
20.32
39.66
April :
12,034
9,945 .
35.47
21.34
39.59
May :
5,555
4,790 .
36.52
22.04
39.47
June :
7,837
5,284 ,
34.59
21.51
38.30
July :
6,301
4,706
. 37.07
23.94
38.49
August , :
5,002
4 , 237
57.49
22.61
39.48
September:
7 , 352
4,295
38.34
23. 26
40.28
October :
7,508
6,114
39.12
23.04 ,
40.45
November .
3,276
1,335
33.54 '
. 22.83
40.21
December :
8.471
7,134
40.09 • '
23.75
40.19
Total :
39,701
63,270
1935 :
(
January !
11,482
3 , 054
36.35
21.61
40.06
February
5,205
4,551
37.99
22.55
40.12
March
11,730
7,550
37.15
21.92
40.37
Source: U.S. Tariff Commission and Federal Reserve Board.
9829
»
3ureau of Labor Statistics - olesale jrice of\cni&e -salt cal e and trend
of unit valu-s of s It crk ?r - v i arces, 1925-1934
> ; T c;
• . • •
Chenical 1/
Natural
: Imorted,
Year
•^rice ner
value oer
value pe r
: value per
short ton
short ton
short ton
: short toll
1925
$19.35
LilS.61
$3.52
$9.50
1926
20.00
-
3.53
10.58
1927
17.93
15.93
7.34:
3.98
1923
12.91
-
6.43
8.98
1929
15.62
11.84 :
5.46
9.06
1930
17.35
-
6.32
11.38.
1931
15.92
15.48
5.09
11.05
1932
13.68
-: :
o« Oo
10.54
1953 :
13.00 :
12.84
5.27
3.92
1934 :
13.00 :
— '
8.90
8.91
Sources: 3.L.S.: Census of ' "rnufactures ; U.S. Tariff Commission;
Bureau of I lines*- '
1/ Available by census years only.
9829
-684-
Salt cake prices (wholesale) per ton, snot, lie-n York
(U.S. Tariff Co: miss ion)
...
',
Year ,
Jr nuary
' April
'July :
.October
1912
: ' $11
$11
'-$11
$11
1913
: " 11
11
: : 11
: 11
1914
11
11 ;
11
: 11
1915
11
• ' IV
• 11
: 11
1916
ii ; •
12;
_
: 11
1917
; -
_ ■ '
_
• : 30
1918
30
30'
: 30 .
• 35
1919
25
13
■ 12 .
14
1920
17
21
: 40 .
50
1921
! 25
25
: : 17
17
1922
5 18
17
18 . . .
;25
1923
25
25
25
24
1924
: 22
23
i 17
18
1925
18
20
: 18
20
1926
20
20
20
20
1927
! 20
13
: 18
18
1928
! 17
17
10
10
1929
: 15
15
15
18
1930
20
20
! 18
14.50
1931
! 14.50
14.50
17
16
1932
15
15
13
13
1933
! 13
13
13
13
1934
13
13
13
13
9829
inter cn!:e prices per ton, twlk, at works, spdt,
jjev Yen- 1 :
(U.S. Tariff Commission)
Ye ex
: January
: April ; '
: July
October
1922
$6.50
1923
: $0
$6
$6
6
1924
: 6
5.50
: 5.50
5.50
1925
5. 50
5.50
4.50 .
4.50
1926
4.50 :
4.50
4.50
4.50
1927
4.50 :
4. 50
4. 50
4.5C
1928 !
4.50
4. 50
4.50 :
10.
1929 :
12 •
14
14
14.50
1930 :
15 - :
14
14
14
1931 :
14 :
14
14
14
1932
13
13
10
10
1953 :
10
10
10
12
1934 :
12 :
12
12 !
12
Glauber's salt prices (tfholesale)per .100 pounds, spot,
. . ITerr York
(U.S. Tariff Concision)
Jan'ucry
April
July
October
1912 :
$0.60
$e.6o .
?o:^o
$0.50
'. 1913 :
• .50
.60 ■
: . 6u
.60
1914
.60
. 60
.60
1915 :
.60 :
.50
.60
.60
1915 ;
.60 :
• 70.
.65
: .60
1917 :
.60 :
.60
' .65
-
1913
.90
1.50
1.50
2.00
1919 ;
1.75
1.50
1.00
1.25
1920
1.15
1.60
: 2.30
2.10
1921 :
1.75
: 1.75
1.50
1.75
1922 :
1.00
.95
.35
1.25
1923 !
1.25
1.25
1.30
1.35
1924
1.35
1.35
1.20
1.25
1925 !
: 1.25
! 1. 25
1.25
1.20
1926
1.20
1.10
1.10
1.00
1927
! 1.10
1.10
1.10
1.10
1921
: 1.10
: 1.00
1.00 •
1.00
1929
: 1.00
: 1.00
1.00
1.00
1930
: l.CO
: 1.00
: 1.00
: 1.00
1931
l.GO
: 1.00
: 1.00
1.00
1932
: 1.00
: 1.00
: 1 . 00
1.00
1933
: 1.00
: 1.00
1.00
1.00
1934
: l.OC
: 1.00
: 1.00
1.00
:29
-686-
Glauber's salt prices (imported), "begs, 100 pounds, soot,
re':; York
(
U.S. Tariff (
3o= .mission)
J ear
January
April
July
. October
1925
M
_
$0.05
1926
$0.75
$0.85
: $0.30
.70
1927
.90
.80
.70
.70'
192^
.70
.70
.70
.70
1929 :
.70
.70
: .70
.70
1930
.70
.70
.70
.70
1931
.70
.70
.70
.70
1932 *:
.70
.70
.75
.75
1933 :
.75
.75
.75
.75
1934- :
1.05
1.05
1.05
1.05
Donestic Traduction of hydrochloric, acid and chemical
salt' cake, by census years, 1923-1933
Year :
Aci
d -oroduction ■
Value
S
alt cake -
Dro-
Value 1/
100
-pp.v r.ent
"hnsis
duced. rath
acid
Short tons
Short tons
1923 :
69,092
$3,102,172
187,064
$3,943,309
1925 :
71,619
2,976,155
189,293
3,144,157
1927 :
70,848
: 3,016,014
203,565
3,322,440
1929 :
81, 309
3,195,415
•206,612
2,446,286
1931 :
2/
• 40,68V •'
'.
2,422,439
119,399 •
1,848,297
1933 :
2/
44, 89 : 5
2,386,790
143,148
:• 1,838,020
Source : Cen
JUS
of lirnufactur
3S,
i.
1_/ Based on
value oer' ton of
SE
lit cake sole
2/ Includes
onl
y tonnage
for
SJ
\le, therefor
•e
not strictly comparable to
other figures.
-687-
Co n simp t ion of salt cake in the glass ind\istry, "by States,
1927 and 1929
(Short tons)
State
1927
! 1929
California
95
i 314
Illinois
: 4,133
3,739
Indiana
: 3,635
3,464
New York
! 494
473
Ohio
3,719
2,729
. Oklahoma
1,166
814
Pennsylv; nia
14,575
14,717
Test Virginia : :
9,809
7,684
Other Stc tes
9,658
8,673
Total
47.284
42,607
Source: Basic data, Census of Ilanufactiires, 1929 , p. 871.
9829
-688-
Lo cation
Southern —
Al 0.1) ana
Motile
Tuscaloosa
Arkansas
Camden
Florida.
Panama City
Louisiana
Bastrop
Bogalusa
Calcasieu
Hodge
West Ll6n.ro e
Mississippi
Moss Point
Sulphate Pulp Hills and Their Daily Capacity
Company
Southern Kraft Corp.
Gulf States Paper Corp.
Southern Kraft Corp.
Southern Kraft Corn.
Daily capacity
in pounds
• 5,180,000
500,000
375,000
425,000
850,000
Southern Kraft Corp. 700,000
Bogalusa Paper Co. Inc. 500,000
Calcasieu Sulphate Paper Co. 110,000
So. Advance Dag and Paper Co. Inc. 400, 000
Brovm Paoer Mill Co. 1,000,000
Southern Kraft Coro,
320,000
Middle Atlantic 1,370,000
North. Carolina
Canton
Roanoke Hapids
Virginia ,
Covington
Hopewell
West Point
Champion Fibre Co.
Halifax Paper Co. Inc.
200,000
70,000
¥. Virginia Pulp and Paper Co. 400,000
Hunmell-Boss Fibre Corp. 200,000
Chesapeake Corporrtion 500,000
Hep England —
Maine
Van Bur en
International Paper Co.
110,000
110,000
Horth Central and Lake Region 1,700,000
Wisconsin
Thilmany Pulp and Paper Co. 180,000
Mosinee Paper Mills Co. 200,000
Nekoosa-Edwards Paper Co. Inc. 300,000
Kankanna
Mosinee
Nekoosa
Oconto Falls
Stevens Point
Continental Payer and Bag Corp. 150,000
Stevens Point P\i1p and Paper Co. 70,000
9829
-689-
Sul hate Pulp Hills and Their Daily Capacity (Continued)
Location
Minnesota.
Cloquet
International Falls
Michigan
Filer City
i iuskegori
Ontonagon
Co.: ian"
Daily Capacit 1 "
in pounds
Northnest Paper Co. 150,000
Kinnesota and Ontario Paper Co. 180,000
Pilar Fibre Co.
Central Paper Co.
Ontonagon Fibre Corp.
120,000
200,000
150,000
Pacific "orthwest
~.'c s:'i:r:to:;
Camas
Longvien
Port Towns end
Oregon
St. Helens
Crown-Uillamette
Longview Fibre Co..
rational Paper Products Co.
St. Helens Pulp & Paper Co.
-1,170,000
200,000
240,000
500,000
230, 000
All States -Total 9,530,000
Source: lioclrwood Directory, 1934.
Salt cake (sodium sulphate, crude): Production and value data
•:ith indices, classified on the basis of objective as
either non-'-orimary chemical or -orlmatv producers-
Non— primary chemical :
production l/ :
Primary
: production 2/
Year
Short
tons for
:sale
Index of
produc-
tion
: Index:
Value : of :
: value :
: Short: Index of
: tons:produc-
: : tion
Talue
Index
of
value
154,640
81,387
96,898
; 2/
100.
52. 6
, 62.7
| 2/
000s : :
$1,831:100. :
! 1,062: 58. :
1,119: 61.1:
: 2/ : 2/ :
•
:23,075 100.
:49,850 216.
: 64, 251 278.4 •
:33,390 144.7
000s
1929
1931
1933
1934
$226
466
478
2/
: 100.
206.2
211.5
2/
Source: Jasic data from Census of Manufactures and Bureau of Mines: Adjusted to
show actual primary and non-primary chemical production.
1/ Chemical companies producing a variety of chemical products, including salt
cake.
2/ Primary production indicates production where primary objective is salt cake.
Includes all producers from natural sources and one chemical producer.
9829
;9c~
IMmber of reichsmarks per dollar: Ner; York Exchan,
1/
Month
ge
January
February
March
April
May
June
July
August
September
October
November
December
Source: London and Cambride
conoraic Service ' (Supplement
to Monthly Bulletin), Vol. XIII, iTo. 4, May 7, 1935,
p» lob, '
1/ First of month quotations.
9829
-691-
C omparative Cost of &em an __and Domestic Gait Ca ke on Pacific C o ast in 1939
(Source: .American Sodium Co., Rko.do's Salt & Borax Co., Sodium Products
Corp., and Westates Co. Brief. Tariff Hearings "before Committee
on Finance. U.S. Senate, 1939. Free List, p. 577)
.American
.American
German
byproduct
Natural
$2.28
$7.50
1/4.18
$3.50
-
.18
.05
-
.16
.50
-
1.90
2.25
2.25
2/ 4.50
10.00
'6.75
13.20
15.30
16.50
15.95
15.95
15.95
Railroad freight
Ocean freight
Fees and insurance
Commission and incidentals
Sacking
Production costs
Total
German sales price
Profit 2.75 0.65 3/ 0.55
1/ Includes $1.20 Panama Canal tolls. 2/ Estimated. 3/ Loss
Comparative Cost o f German; and D omestic S alt Cake on Gulf Coast, in 1929
(Source: .American Sodium Go., Rhodes Salt & Borax Co., Sodium Priducts
Corp., and Westat;es Co. Brief. Tariff Hearings "before 'Committee
on Finance. U.S. Senate, 1929-. Free List, p. 577.)
.American American
German "byproduct N atura l
Railroad freight $2.38 l/ $7.00 $12.00
Ocean freight 2.70
Fees and insurance .18 - -
Commission and/or incidentals .16 -
Production costs z] 4.5n 10.00 6.75
Total 9.92 17.00 18.75
German price per ton,
Gulf ports 13.50 13.50 13.50
Profit 3.58 ~z] 3.50 3/ 5.25
1/ Average rail rate (Illinois, Missouri, er Ohio)
2/ Sstimat ,d
3/ Loss
9829
-692-
Sodium sulphate, .all forms;
ccnsiurotio:.
United States imports for
19 22-12 7Z
•
Salt cake
Value
Anhydrous
(i-ofinsd)
spdiura .jn"!ol:at(
Value
3 *
\ Glauber
\ salt
: Value
She, b tons
, ^ ; l^i 1 ;_-.i. , L t ;.
: g'yrfa tons
1922
714 '
$S : r37
u
u
• 6.S18
: $74, 155
1923
1924
1925
5.223
3 4 27
1 913
■ 84,051
: 40 o23
18,175
84
132
.1 36
: $5A8
■ 4,443
3,700
• 9.C1.5
: 6.423
: 6,682
: 100, 145
: 68,315
: 77,150
1926
6,269
66,221
1,413
. 35 ,946
: 3.530
: 38,303
1927
11.272 .
100,2^9
2-877
I 5:.- : 6j5
; 3, ] 45
: 31,210
1928
28,228
253 : 553
3.. 573
; 7'r s 742
: 1.550
: 17,651
19 29
91,633
029.. 793
5 ; 553
116.935
: 1,161
: 9,517
1930
70,337
800,432
9,934
200,143
: 1,156
: 9,241
1931
72, 746
803,509 :
10,315
193,041
: 924
: 9,615
1932 :
61,124 :
644,074 :
8 , 855
153,612
: 304
: . 2,848
1933. ■
: • 99,269
* ■ " i
885,306 .
10,371- ■' •
* •
179,529
: -.629 "'■
: 8,677
Source: Tyler' P-.M.y 'Monograph,' Sodium Sulphate',
Information Circular II. 6333, p. 37.
1_/ Not separately reported.
U.S. Bureau of Mines
9829
-693-
Tablo. - Salt cake (sodium sulphate, crude):
for consumption, 1929-1934
Trend of imports
Statistical :
period :
Quantity )
Value \
Value per :
long ton
: Index
:of imports
Long tons :
1929 i
31,816 !
$829,793 :
$10.14 :
: 100.0
1930 :
62,799 :
800,432 :
12.74 :
: 76.8
1931 :
64,953 :
803,509 :
12.37 :
: 79.3
1932 !
54,575
644,074 !
11.80 :
: 66.7
1933 :
88,633 :
835,306 !
9.99 :
: 106.3
1934 :
80 , 090 :
799,141 :
9.98 :
: 97.9
By quarters
1932
First
: 14, 163
171,995
12.14 :
: -
Second
13,614
: 150,347
: 11.78 :
:
Third
9,634
: 111,721
• 11.60 :
:
Fourth
: 17,146
: 200,011
: 11.67 :
:
1933
First
: 13,354
• 195,414
: 10.65 :
:
Second
: 24 , 169
: 233, 284
: 9.65 :
:
Third
: 23,272
: 228,978
: 9.84 :
: -
Fourth
: 22,838
: 227,630
: 9.97 :
: -
1934
First
: 22, 549
: 232, 650
: 10.32 :
:
Second
: 23,693
: 226,413
: 9.56 :
:
Third
: 16,656
: 162,151
: 9.74 :
:
Fourth
: 17,192
: 177,927
: 10.35 :
• ■"*
9829
-694-
JUTE flEEBING (Ho. 37)
9829
-69 -
Pane No .
Complainants' st; tus under the Hat i one 1 Industrial
Recovery Act 697
Description of commodity = 697
Tariff treatment ? 697
The raw material
The domestic industry
The industry as a whole
The largest producer
Production in the United States 699
Exports 7 ° 2
Imports
The foreign industry ""-—
Imports ih-r elation to domestic production .
Price con; orisons :
Imported end domestic webbing
The relationship between webbing and rev jute prices 708
The crice cf jute yarn as a competitive factor 710
Yarn as a domestic manufacture ' J -
Domestic tariff treatment of yarn '■'-
71 9
Foreign tariff treatment ■
71 ?
Foreign and domestic yarn prices ^
Prices stability of domestic yarn
Manufacturer 's margi'.
The effect cf dollcr depreciation ; _
The effect cf the natio: al recovery -irogram
71 8
Labor ^revisions of the code
71 R
Ho^rs ci'.d wages ~ —
7?0
Production and sales cost
698
698
698
699
sua
706
707
708
708
9829
.-696-
LIS- CI- 1 TABLES
Fa, ;e "- T o .
Ta ble I'o.
1 Jute wetting: Dor.iestic --.reduction for census years
since 1919 700
2 Jute webbing: Trend of quantity, vrlue, and unit
vrlues of domestic production, in census pears since
1929 70^
3. Jute webbing: Dor.iestic porductior. e.s rcnor ;od by
comlainancs, 19.39 to October, 1934 701
4 Jute webbing: Imports for consumption, 19.23~133E 703
5. Jute webbing: Irrroorts for consuivriticn by principal
cour tries , 19 7:9-1934 705
6 Jute webbing: Ratio of imports for consumption to
domestic production ' '
7 Jute webbing: Indices of domestic production, weighted
domestic mill prices, unit vrlue of imports, and the
"iricc of medium grades of rv into at Few Yorl:,
1929-1934 — 709
Single Jute yarn: Imports and equivrlent ?d valorem
duty, 1925-1934 — 711
9 Plain, 2-ply jute cordage, twine, arc twist: Im;oorts
and equivalent ad valorem duty, 1935-1934 711
10 Jute yarn: Comparison of domestic prices with Dundee
prices and Dundee trices plus ad valorem eouivo.lent
duty of 65 -ier cent, 1 79-1934 712
11 Raw jute and jute yarn: Indices of wholesale rices
of medium grades of raw jute at Few Yon;, donestic
mill arices of Ho. ", 14-pound co 16-pound carpet
yarn, and mill nrices of 14-aound (warp) carnet yarn
ac Dundee, Scotland 714
IP Raw jute and jute yarn: Prices of rr\- jute and carpet
yarn, and the manufr ccurer' s r.iar ; .in, 19 39 to
March, 1935 — - - 715
15 Exchange and webbing imports: Indices of belga-ar.d
rupee- do 11, or excha:. _,e and of the unit values of
imoorts, along with ch quantity of imports, 1332
to March, 1935 " 717
14 Jute webbing: Trend of avera e weekly and hourly wa„ cs
in the industry since 19p9 713
15 Jute webbing: Indices of enrol oyment, nayroll, and
wages, 1933 and 1334 '— 719
K Jute webbing; Producing n d sellin costs for four
comio.niec in 1933 and 1934, and- percentage
distribution of cos'; items 7 ^0
9C29
-697-
SC :"" v r I;"F0H1A.TI0U
01:
AP2IL, 1935
Complainants' Status under the National Industrial
Recovery Act
This is r report on a connlaint to the President with respect to
imported jute webbing, filed Octobea ?.3, 1934, by the Code Authority
of aril-Soft Fibre Manufacturing Industry, pursuant to Section 3(c) of
Title I of the retinal Industrial Recovery Act.
Fie six comolai ant connanies in this case, representing virtually
100 per cent of the donestic industry, operated under the Cede of Fair
Competition for the Soft Fibre Manufacturig Industry, approved April 9,
1934; prior to that date only two operated at any tine under the President's
Reemployment Agreement. One producer manufacturing small amounts of jute
webbing to fill special orders did not join in the complaint.
The Code for the Soft Fibre Manufacturing Industry provided that
the cod authority she Id investigate ,he efiect and inform the President
of innortation of competitive m-oducts into the United States.
Description of Commodity
Jute webbing is principally used in the upholstery of furniture,
cashets, and automobiles. It is estimated that about 0.5 per cent of
all jute manufactures consumed in the United States is jute webbing.
Imports are plain-woven fabrics with fast edges ranging in width
from ? inches to 5 inches; domestic webbings are plan-woven and twilled
fabrics with fast edges, ranging in width from 1-jj to 5 inches. Both
imported and domestic webbings arc put up in rolls from 70 to 72 linear
yards, the former weighing from 5g to 13 pounds per roll and the latter,
from 4 to 14 pounds. The grades of webbing most commonly imported are
3g inches and 4 inches wide and from 7 to 10'- pounds in weight per roll,
beinn constructed of 5-pound to 37.0-pound single yarn and 6-pound to 13-
pound 3-ply yarn, often woven double in the warp and sometimes in the
filling. Domestic webbin; s produced in largest quantities are usually
3-| inches vide and from 7 to 9t? rounds in weight per roll, beinn con-
structed of 7-pound to 20-pouiod single yarn and from 7-pound to 18-pound
2-ply yarn which is woven single or double in the warp and filling.
Tariff Treatment
9829
-698-
Jute webbing is dutiable at 55 per cent ad valorem under paragraph
1015 of the Tariff Act of 1930 as a fabiic with fast edges, not exceeding
1"! inches; in width, in chief value composed of vegetable fibers other than
cotton, and for use other than the raanuf - cture of measuring tapes. It
was dutiable at the same rate under the Tariff Acts cf 193.? and 1913.
The Raw Material
Jute webbing is constuctcd from yarn manufactured in the United
States of raw jute imported from India. The jute fiber of commerce is
produced chiefly in the Province of Bengal, where about 3 million acres
are devoted to .it? production, and shipped through the port of Calcutta.
fibre jute is now retained for manufacture into burlaps, hessians, gunny
bags, and ether products in Calcutta and its environs than is shipped in
the ra\i state to all other countries together. Jute is the most easily
spun, cheapest, .weakest, and least, durable of the important textile
fibers, and is used in larger quantities than all other fibers combined
except cotton.
Raw jute is imported duty-free under Paragraph 1684 of the Tariff
Act of 1930.
The Domestic Industry
At the congressional tariff hearings in 1929 it was said that there
was a total capital investment of 3oOC,-454'.in the jute webbing industry,
and that 777 wave earners were emoloyed in the production of jute webbing
in 19 38. According to data submitted in the complaint, en average of 185
wage earners were emoloyed in the industrv in 1929, 105 in 1933, and 83
in 1934.
The industry as a whole
Jute webbing is regularly produced in- Ohio, Pennsylvania, New York,
Massachusetts, and Georgia. There are five principal producers of jute
webbing who have accounted for at leapt 95 per cent of total domestic
production since 1939. There is a sixth producer whose output is much
smaller than any of the others. The two largest, producers account for
about 63 per cent of domestic output, the remaining three each accounting
for 11 to 14 per cent of the total.
The productive capacity of the jute webbing industry to some con-
siderable extent has exceeded che domestic demand of the past few years.
Two narrow fabric producers, sti">l possess.: 1 .;: machinery for production
of jute webbing, have ceased manufacturing this product; another estab-
lishment has limited its production to special types made to order, and a
fourth establishment claims to have the necessary :iachinery for the pro-
duction 3f jute webbin but has never manufactured the product*
9 "39
-699-
The lar/.est producer
that jute webbi is constructed entirely from
doraestic juti ••r: , 6 '. i Lr tvo of the webbing manufacturers - the
largest and one of the smaller producers - spin their own yarns, it is of
interest to examine the oosiiicn if thelargest producer in the industry.
In 1919 this company extended its operations to India where it
established near Calcutta a selecting and baling ;?lant for handling raw
jute and a mill cr.ch for manufacturing cotton bagging, hessians, and
sacks rnt". bags from hessians. The selecting and baling plant is said to
be the newest and most improved one in Bengal. With the extension of
this co.pnvr .into India, all the major branches of jute manufacturing
fro i i vy bagging .to webbing and the finest yarns arc integrated under
a si firm. Besides', this company is the only manufacturer of jute
outside India operating- its own plant; go as to control the grading and
handling o:. the raw. fiber.
I T oue f he other webbing manufacturers approaches in any degree the
integration :f this firm; nor has any other r branch manufacturing estab-
lishment ir India.
Production in the United States
In 1931 the value of jute webbing amounted to 30 per cent of the
total value of all commodities >roduced in the plants of the members of
the jute webb int. industry, this ratio, declining to ,29 per cent in 1932
and 10 per cent in 1933. Jut" webbing produced in the United States
amounts to about 2.5 per cent of the total value of domestic jute manufac-
tures. In 1935, jute webbing accounted for 2.4 per cent of the total
value of all jute .venuf re cures as compared with 2.9 per cent in 1931,
3.7 per cent in 1929, and 4.6 per cent in 1927, according to the Census
of Manufactures.
The following table shows domestic production of jute webbing in
quantity and value -since'' 1919. The data on production, converted from.
linear yards to pounds, arc shown so- ara.tely.
9229
-700-
Table 1. - Jute nebbing!
D one s t i c pro due i
since 1919
x or census y e r rs
Qjiaht i ty :
: Value 2/ :
: Unit value -ner -
Year
Linear : -. - , / :
Pounas 1/
yards : :
: Linear
: yar d
Pound
1919
1921
1923
1925
1927
1929
1931
1933
25,417,400 : ?, 824, 15. :
17,464,062 : 1,940, 451 :
47,085,030 :5, 231, 670 :
38 , 496 , 307 : 4„;?G7 , 590 :
45,853,260 :5, 095,918 :
43,736,731 :4, 859, 687 :
22,723,590 :3, 524,043 :
17,870,956 :1, 935, 551 :
:?1,055,170 :
: 483,745 :
: 1,375,910 :
: 1,185,214 :
: 1,554,009 :
: 1,122,021 :
: 467,825 : :
: 367,626 :
: $0,041
: .028
: .029
: .029
: .029
: . 026
: .081'
: . 021
$0,373
. 349
.263
. 253
: . :66
: .281
: .185
: .185
Source: Census of Manufactures.
1_/ Domestic production, ...r.eported in linear yards, converted to pounds on
oasis of 9 linear yards to the pound, or an averr:,e of 8 younds per roll
of 70 to 78 linear 3 r ards. (The average weight of jute webbing is
believed co range from 7-i- to 8-^- pounds, or possibly 9 pounds.)
2/ At f.o.b. factory orices.
Table 2 shows the trend of production in linear yards, sales value,
and the unit value of jute webbin_ sir.ee 1929. From the indices of Tabl.e
2 it may be seen that total produccirn in o_uuantity declined about 59.1
per cent fron 1929 to 1935, while the value of output decreased 67.2 oer
cent and unit values declined 19.2 per cent.
Table 8. -Juts -web ing: Trend ox quantity, value, and unit values
of donestic -oroduction, in census yerrs since 1929
Year
• Quantity
Value
Unit
V?lue
"Quantity * Value
• •
Unit
Value
1939
1931
1933
:Linear yards
: 43,736,731
: 2 ; , 723, 590
: 17,878,956
$1,1.22,021
! 407,825
367,626
$0,026
.021
.0,21
1929 = 100
: 100.0 : 100.0
: 5.2.0 : 41.7
:• 40.9 : 32.8
• •
100.0
80.8
80.0
Source:
Census of L'anufac
;tures.
Table 5 shows '.domestic production of jute webbing since 1929 as rcoorted
by complainant lanufacturers. Their outwit was 46.1 per cent of 1929 in
1933 and 40.7 of 1929 in the first en months of 1934~. Table 3 indicates
less of a decline in domestic production than is shewn in the preceding
table by data obtained from the Census oi Mrnufactures. Thcr*
apparent seasonality in the producti
lirnufactures. Thcr r is no
of jute web' i: g in the United States
9829
-701-
Table 3. - Jute webbing: Domestic production as reported by
complainants, 1929 to October, 1934
Indices of
period ;
Quantity .
production
Pounds :
1929 = 100
1929 :
6,201.649 :
100.0
1931 :
3,810,273 :
61.4
1932 :
2,790,229 :
45.0
1933 :
2,861,224 :
46.1
First nine months :
1933 :
2,175,741 :
46.8
1934 :
1,836,243 !
39.5
First ten months of 1934 :
2,105,850 !
40.7
By Quarters l/ :
1 9 V*
January-March
547 , 809
55.3
Ap ri 1- June
652,131
: 42.1
July- Sep t erabe r
! 975. SOI
: 62.9
October-December
■ 685,483
: 44.2
1934
January-March •
648,291
: 41.8
April-June
; 571,464
• 36.9
July- S ep t emb e r
t 616,489
! 39.8
By months - 1934
• ■<■ » - » ■*■
January
: 199,071
: 38.5'
February
: 207,257
: 40.1
March
: 241,963
: 46.8
April
: 223,164
: 43.2
M y
: 212,276
: 41.1
June
: 136,024
: 26.3
July
: 181,993
: 35.2
August
: 19C, 886
: 38.5
September
: 235,610
: 45>6
October
: 269,606
: 52.2
Source: Complaint.
1/ Quarterly production data of two small companies; prcrrtfted. for 1933,
9829
-702-
The decline of domestic production since 1929 was a consequence of
the recession in automobile ana furniture production, combined since 1931
with increasing irrorts. Automobile production in 193.? was only about
26 per cent and in 1934 roughly half of the 1929 output. Statistics
reported "by the industry in furniture manufacturi g indicate that the
recession began as earl as 1927 and continued uninterrupted until the
second quarter of 1933, Only a very limited degree of recovery has
taken place in this industry in the la"s't"'"frw years. In 1933 end 1934
furniture factories, on the basis, of plant hours and man-hour employment,
operated at roughly 30 to "35 per cent of their 19^9 level with a corresponding
output. According; to data in the 'Census of Manufactures, employment in
the industry in 1933 was 54.5 per' cent and wages and the value of production
were each. 31.4 per cent of 1929. "More particularly, available census data
indicate < that th:.. value of upholstered furniture in 1931 was roughly 56
per cent^and in 1^35 roughly' 23 per cent of 1929. In 1933 the value of
upholstered furniture produced in' each if the three leading sta.tes, Hew
York, Illinois, anc California, was roughly 61 per cent, 78 -ier cent, and
63 per cent, respectively, of 1929.
Export?.
Although domestic exports a.re not separately .recorded in official
trade statistics, it is believed ■ that jute webbing exports are negligible.
imports
Roughly half of the imported jute webbing is entered at Hew York,
and somewhat over a fifth through Massachusetts. In 1934, the Phila-
delphia and Virginia customs districts v, ere the only two other areas along
the Atlantic Coast through which webbing was imported. On the Pacific
Coast the principal center of importation is los Angeles, followed by
Portland.
Table 4 chaws imports of juts webbing since 1923, the first year
in which this product Was separately classified for statistical purposes.
9829
„ _
Table
J wi t Lng: I- •' i' 1 ' ■ ration, 1923-1935
Period
Quantity
Founds
3y years :
19.33 :
77,339
1925 !
86,242
l.:37 - :
149,061
1929 :
537,891
19.30 :
494,564
1931 :
761,037
1932 !
1,202,649
1933 :
1,912,186
1934 !
1,075,717
By q\iarters
1932
First
257,971
Second
287,376
Third
: 216,173
Fourth
431,129
1933
First
! 332,602
Second
: 535,964
Third
: 514,371
Fourth
: 479,249
1934
First
: 336,92
Second
> 144,209
Third
: 196,925
Fourth
: 397,661
1935
First
: 338,320
Value
$18, -203
15,593
24,597
98,521
76,846
101,071
98,936
160,879
100,336
22,778
23,650
18,117
34,391
31,276
38 ,931
45,209
45,463
33, 682
13,578
19,296
33,780
30,943
Unit
value
$0.2353
.1924
.1650
.1831
.1554
.1328
.0823
.0841
.0933
.0850
.0823
.0838
.0798
.0817
.0726
.0879
.0949
.1000
.0942
.0980
.0894
.0915
S ur c e : Fo reign Co ^tcrce and ravi~ation of th e United States ,
and U.S. Tarifj Commission.
; 829
-704-
The data in Jfablo 4 show that there was a general increase from
1923 to 1932 in the quantity of imports for consumption of jute webbing,
followed "by a decline in 19-34 of roughjLy 44 per cent under 1933, imports
in 1934 being slightly less than in 1932, although greater than- in the
years previous to 1932. The unit value of iim: :rts declined roughly
60 per cent from 1923 to 1934, A sharp decrease in unit value from the
previous year occurred in 1932, while at the same time the quantity of
imports increased substantially.
The following table shows imports for .- consumption by principal
countries since. 1929. It will be noted that the only important sources
of webbing are Belgium and British India, the former country supplying
71 per cent of all webbing imports in 1934. The quantity of imports
from Ijjdia has been increasing in relation :to total imports since 1929.
Webbing imports .from Belgium; since 1929 have been }f greater unit value
than imports from India, 11 per cent greater inl929, 1 per cent greater
in 1931, 28 per .cent in 1932, 12 per. cent in 1933, and 55 per cent in
1934. What competitive advantage with respect to Indian webbing maybe
found in the difference between the foreign values of Belgian and Indian
webbing depends -upon the ocean freight rates to the United States from
the respective countries of shipment. Freight rates are not available
to furnish the data for any determinative comparisons.
>82<
-7 -
Table 5. - Jut« L: : Irrr.ort i in by irincipal
co , 1929-19:
1939
1931
1931
1933
j 1934
1 it (-pounds)
] 1 Lub
513,344
611,776
1,081.938
1,584,125
• 759,947
. ritish India
8,784
132,589
73,344
150 , 723
: 313,570
Fr nee
-
> -
8,377
145,311
: -
All d ther
• 15,463
16,672
38,990
33,0.33
: 200
I t 1 :
537,391
, 761,037
1,202,649 )
,:1,912,186
Sl, 075, 717
Value
■$90,606
$80,891
$90,111
$135,153
Belgi
: $76,547
British Indis
1,377
: 17,402
4,731
11,407
: 23,729
Fr nee
: -
-
: 685
11,095
:
All )ther
: 6 ,538
; 2,778
: 3,409
3,219
: 60
I t 1
: 98,521
•'101,071
. 03 035
160,379
S 100,336
Unit value
•
Belgium
S0.1'76
S .132
30.083
: SO. 085
: $0,101
British India
.137
.131
: .065
.076
S .075
France
: ~
j —
: .03.-.
.076
: -
All otl;-3 -•
. ~~; .-J
: .167
: .08?
.101
: .300
Aver-^e
: .133
: .082
.084:
.093
Per cent : f total
quantity
Belgium
95.5
30.4
90.0 :
82 . 8 !
70.6
British India.
: 1.6
17.4
: 6.1 :
7.9
: 29.3
France
! —
-
.7
7.6
:
All )ther
: 2.9
: 2.2
: 3.2
1.7
: .1
Total
100.0
■100.0
! 100.0
100.0
: 100.0
i29
-706-
The Fo r e i gn I ndus try
Kothing is known of the jute aebbing industries in Belgium and
British India, except th t they are ver; small segments of much larger
jute spinning and weaving industries in each country.
In this connection it should -.e pointed out that British India,
although second as an exporter of jute webbing to the United States,
is this country's principal source of all imported jute manufactures,
being- fol owed in importance by the United Kingdom and Belgium, respec-
tively. In 1953, British 1 India was the source of 78 per cent of the value
of .all general imports of 'jute manufactures (exclusive of waste sacking
avid waste bagging), the United Kingdom accounting for 10 per cent, and
Belgium 4 per cent. Belgium and the United Kingdom in 1933 were the two
most important sources of woven jute fabrics, n.e.s., imported into the
United States.'. :
The Belgian Jut'_ ; Weavers' Association, comprising 13 concerns with
2,500 looms, this'- spring ( : 1935) reported improved business and the end of
sever losse-s experienced during the past few years. Members of the
Association, in consequence of plant modernization and resultant improve-
ment of their manufactures', are widening their markets i'nithc United States
and South America
by the' Association
per cent was sent
competitor is the
for jute fabrics. In 1934, 90 percent of production
•s members was exported, whereas eight years ago 50
abroad. '■ The Belgian manufacturers assert their chief
1 13d i an jute industry.
9329
-707-
Irrroorts in Relation to Domestic Production
Table 6 shows a comparison of the trend of imports for consumption
with domestic production from 1929 to 1934.
Table 6. - Jute webbing: Ratio of imports for consumption
to domestic "production
Domestic
Imports :
: Ratio of
Period
production
for i
A imports to
consumption :
:_ _ production
Pounds :
: Per cent
1929 :
5,201,649
537,891 :
: 8.7
1931
3,810,273
! 761,037 :
: 20.0
1932
2,790,229
l', 202, 649 :
: 43.1
1933 . :
3,835,986
1,912,136 ':
: 67.4
1934 (first r,en months)
- 2,105,850
777', 959' :
: 36.9
1933
January-March
! 547 , 809
382,602 :
: 69.8
April-June
: 652,131
: 535,964 :
: 82.2
July-September
975,801
514,371 :
: 52.7
Octcoer-De cember
: 685,435
: 479,249 :
: 69.9
1934
January-March
! 643,291
: 336,922 :
52.0
-Code approved April 9, 1934
April- June
Jul y- Sep t ember
October
571,464
616,489
269,606
144,209
196,925
99,903
25.2
31.9
37.1
9829
-708-
From the data in Table S it may "be noted that the ratio of imports
to domestic production decreased from 52 per cent in the first quarter of
1934 to 25 per cent in the second quarter, after the code was approved,
and rose only to 52 per cent in the third quarter after alrnort six months
of code operation. The ratio of imports to domestic production~for the
first ten months of 1934 was 37' per cent as compared with 67 per cent for
1933 and 4-3 per cent for 1932. :
Price Comparisons
Importec and domestic webbing
Wholesale-, prices in 1934 of foreign v/ebbing, f.o.b. New York, ranged
from 15-3/4 cents to 14-1/2 cents per pound', averaging ahout 17 cents per
pound. 'Prices : quoted f.o.b. Boston "by importers in 1934 averaged roughly
16-1/3 cents. ; Whole-sale prices' for imported webbing m the Pacific Coast
were similar to -those quoted by importers at Atlantic ports. In the
fall of '1934, f,.p.b. mill price's of domestic jute webbing ranged from
roughly $0.14 to- $0.22 per pound. The average mill price of nine leading
varieties of domestic webbing at the same time was $0,185. These varieties
of webbing are all said to be competitive with imports.
The relationship
-between we bbing a nd raw j ut e: prices
It will be noted from the indices of Table 7 that the price of
domestic webbing-. did not follow the same course as the trends of the
unit value of imported webbing arid the price of raw jute, which, practically
paralleled each other. During the first half of 1933, when the price of
raw jute declined 64 per cent from 1929 and the unit value of webbing
imports about 60 per cent, the price of domestic -webbing dropped only
33 per cent. By the third quarter of 1934 the .price of domestic webbing
had risen to 80 per cent of its 1929 level, but the price of raw jute
had only risen to -.about half and the unit values of imports to slightly more
than half of 1929. ,- The data in trie tahle indicate the close relationship
between the price of jute and the unit value of we'b'bing imports, the
latter, of course, bearing upon the prices of imported webbing in the
United States,
9829
-7«9~
The following table shows the trend of domestic production of jute
webbing, weighted mill prices of domestic webbing, the unit value of
imports, and the price of raw jute from 1229 to 1954.
Table 7. - Jute webbing: Indices of domestic production, weighted
domestic mill prices, unit value of imports, and the price of
medium graces of raw jute at Hew York, 1929-1934
Period
1929
1932
1933
1934
1934 (first eight months)
By
quarters
1933 -
- First
Second
Third
Fourth
1934 -
- .First
Second
Third
Fourth
1935 -
- First
: Weighted : Unit : Price
Domestic .domestic mill: value : of
product .on . -nricesl/ :,of t-ig^q rt s : raw juts
pr ice;
1929 - 100=
100.0
45.0
45.7
38.7
2/ 100.0
3/ 71.4
4/ 71.9
80.1
35.3 .:
70.9
42.1
66.5
62.9
75.2
44.2
75.7
41.8
80.1
36.9
80.1
39.8
5/
80.1
100.0
100.0
44.9
41.7
45.9
45.8
51.0
52.8
54.4
: 53.0
44.6
36.1
39.7
45.8
48.0
1 51.4
51.8
! 48.6
54.6
! 55.6
51.4
! 52.8
53.5
50.0
48.8
! 51.4
50.0
: 54.2
Source : Complaint : jj^> reign Ccmme~rce an d, Nav igation of the United Statesj.
and Bureau of Labor Statistics, Wholesal e Prices.
l/ Weighted for each year or period within year according, to ratio of
production of separate establishments to total production of five leading
producers for respective ye?.r.
2/ April and October.
3/ January, April, July, and October.
4/ January, April, July, September, October, November, and December.
5/ September not included.
>829
-71*-
From the data in the foregoing table it may be seen that from 1929
to August, 1934, weighted mill prices of domestic jute webbing did not
decline more than 34 per cent. In contrast, domestic production in 1932
and 1933 decreased roughly 55 per cent from 1929. In the first ten
months of 1934, domestic production decreased still more, and was
roughly 60 per cent less than in 1929.
The Frice of Jute Yarn as a Competitive Factor.
Domestic manufacturers of webbing not making their own yarn are
obliged to compete with imported webbing constructed from lower-priced
jute yarn. Domestic webbing since 1929 has been produced almost exclu-
sively from grades of domestic jute yarn and twist (2-ply yarn), which,
in turn, are manufactured behind a tariff protective enough to prohibit,
virtually all imports of competitive yarn and twist from abroad. Little
or no yarn is exported from the United States.
The jute yarn market in the United States is dominated and prin-
cipally supplied by two, or possibly three, '• integrated producers of jute
and other fiber textiles, the two largest having branch jute manufacturing
establishments in India.
Yarn as a domestic manufacture
Yarn is far more important a domestic 'jute manufacture than webbing.
In value it is the mosc important single manufacture of jute, accounting
for roughly 45 per cent of the total value of domestic jute manufactures,
as compared with the ratio of 2. 5 per cent for webbing. About 35 per
cent in quantity and Value of all domestic yarn sold by producers is used
in the manufacture of wool carpets and otherr floor coverings. Less than
10 per cent is purchased for further manufacture by the jute goods in-
dustry. More yarn is believed to be purchased for use in manufacturing
electric cables than in weaving jute' fabrics, such as webbing. The Census
of Manufactures records domestic pro'duction of jute yarn "for sale" in
1933 amounting to 61,853,153 pounds valued at $6,827,370, or 95 per cent
in quantity of all fiber yarns' (exclusive of cotton) made for sale. There
is no record of the output of jute yarn produced and used for further
manufacture by the same companies.
Domestic tariff treatment of yarn.
Domestic webbings are constructed from 7-pound to 20-pound single
yarn and from 7-pound to 18-pound twist or 2-ply yarn. Since the Tariff
Act of 1922, jute yarns ranging in fineness from 20-pound up to but not
including 10-pound have been dutiable at 4 cents per pound, and from 10-
pound up to but not including 5-pound at 5f v cents per pound; unbleached
and undyed jute twist (two or more yarns twisted together to form a single
strand of the same size as single or roving yarn) , ranging in size from
20-pound up to but not including 10-pound, have been dutiable at 5 cnnts
per pound, and twist from 10-pound up to but not including 5-pound, 6^
cents per pound.
The prohibitive character of these specific duties is indicated by
the fact that imports of both yarn and twist in the above classes since
9829
-711-
1929 have been negligible. Imports since 1925, with the ad valorem
equivalent duties for each year, are shown in the following two tables.
It will be noted that the equivalent advalorem duty on yarns most used
in making webbing - 20-pound up, to 10-pound single - in 1932 amounted
to 144 per cent and in 1933, to 133 per cent, and also that there were
no imports of these yarns in 1934. The ad valorem equivalent for both
20-pound to 10-pound yarn and twist together in 1929 and 1931 to 1934
amounted to 65 per cent.
Table 8. Single jute yarn; Imports and equivalent ad valorem
duty, 1925-1934.
Feriod
20-pound up to 10-pound
(dutiable at 4 cents per pound
Quantity Value
Equivalent
ad valorem
duty
10-pound up to 5-pound
(dutiable at 5-| cents per pound)
Quantity Value
Equivalent
ad valorem
duty
1925
1927
1929
1931
1932
1933
1934
Founds
316,708
2,311,942
320
199
42,562
261,562
9
6
Fer cent
30
35
144
133
Founds
308,604
79,518
1,008
9,793
106
7,560
406
$47,194
10 , 303
118
1,146
8
808
48
Fer cent
36
43
47
47
88
52
47
Source: Foreign Commerce and Navigation of the United States , and
U. S. Tariff Commission.
Table 9. - Flain(*), 2-ply jute cordage, twine, and twist:
Imports and equivalent ad valorem duty, 1925-1934.
20-pound up to 10-pound :
10-pound up to 5-pound
Feriod (dutiable
at 5 'cents per pound
(dutiable
at 6t T cent:
3 per pound)
Equivalent :
Equivalent
Quantity
Value ad valorem :
duty
Quantity
Value
ad valorem
duty
Founds
57,593
• ■
Fer cent
Founds
86 , 880
$15,168
Per cent
1925
$10,526
27
29
1927
35,367
2,982
59
_
_
—
1929
2,710
291
47
570
151
25
1931
2,000
100
100
_
—
—
1932
6,858
528
65
106
8
88
1933
1,383
83
83
—
_
—
1934
250
34
37
11,307
1,224
60
Source: Foreign Commerce and Navigation of the United States, and
U. S. Tariff Commission.
(*) Hot bleached, dyed, or otherwise treated.
9829
-712-
Foreian tariff treatment
In contrast to the foreign trade of the United States in jute yarn,
Belgium and the United Kingdom are "both heavy exporters of jute yarn
and also import, at nominal rates of duty, consideiably more jute yarn
than this country. The ad valorem equivalent of the Belgian specific
duty on 8-pound to 14-pound single yarn since 1929 has probably ranged
from roughly 7 to 10 per cent, raid the ad valorem equivalent on 8-pound
to 14-pound twist from 8 to 13 per cent. Jute yarn, including twist,
imported into the United Kingdom is dutiable at a general ad valorem
rate of 10 per cent. Jute yarn imported into British India, both an
unimportant importer and exporter of yarn, is dutiable at 25 per cent
ad valorem.
Foreign and domestic yarn prices
In Table 10 are given the prices since 1929 of yarn at Dundee,
Scotland, the jute-yarn center of Europe, and at domestic mills. In
addition, there is shown the Dundee price to which has been added the
ad valorem equivalent duty on yarn and twist of 65 per cent for the
1929-1934 period.
Table 10. - Jute yarn; Comparison of domestic prices with
Dundee prices and Dundee prices plus 'ad valorem
equivalent duty of 65 per cent, 1929 - 1934.
(Per pound)
Dundee price l/ Dundee price .'Domestic mill Ratio of
price of domestic
14-pound to price to
16-pound Ho. 2 Dundee price
carpet yarn plus dut y
of 14-pound
Period
(warp)
carpet
y;v?n
1929
$0.1010
1930
.0823
1931
.0661
1932
.0652
1933
.0610
1934
.0569
of 14-pound
yarn, plus
65 per cent
duty
$0.1667
.1358
.1091
.1076
.1007
.0939
$0 . 1490
. 1380'
. 1170
.1050
.1140
.1230
Per cent
89,
.4
101
.6
107,
.2
97
.6
113,
.2
131,
.1
Sources: Dundee Prices Current and Bureau of Labor Statistics ,
Wholesale Prices.
1/ Converted from pounds into dollars at the 1929 rate of $4.8569
It will be noted that the domestic price per pound in 1929 and 1932
was less than the Dundee price plus the duty and that in only two years,
1933 and 1934, was the domestic price more than 10 per cent greater than
the Dundee price plus the duty. Considering the price of imported yarn
to include necessarily the Dundee price plus the duty as well as freight,
handling, and brokerage charges, it would appear that, except possibly in
the years 1933 and. 1934, Dundee exporters could not have profitably
shipped 14-pound yarn to the United States market.
9829
«713^
Frice stability of domestic y?:rn
The fact that the domestic price of jute yarn has not been subject
to the possible influence of competitive prices of imported jute yarns
is at least a possible explanation for the stability of the price of
domestic yarn in relation to the downward fluctuations in the price of
raw jute since 1939. The indices of Table 11 show the trend since 1929
of wholesale prices at Hew York of medium grades of raw jute in relation
to the mill price of No. 2, 14-pound to 16-pound domestic carpet yarn
and the price at Dundee, Scotland, of 14-pound (warp) carpet yarn.
(Yarn widely used in the manufacture of webbing is substantially the same
as this grade of carpet yarn, with the exception that sizing is added
to carpet yarn.)
9829
-714-
Table 11. - Haw jute gild jute yarn: Indices of wholesale
.prices of medium grades of raw jute at Hew York, domestic
mill prices of i : o . 2, 14-pound to 16-pound carpet yarn,
and mill prices of 1 i-pound (warp) carpet yarn at
Dundee, Scotland.
w
holesale price ;
Mill price
of jute
of medium ■
grades of •
carpet y
arn
Period j
Domestic j
At Dundee ,
raw jute at •
No . 2 , 14-pound <
14-pound
New York <
to 16-pound
(warp)
1929
- 100
1929
100.0 :
100.0
100.0
1930
69.4
92.6
81.9
1931
51.4
78.5
65.8
1932
41.7
70.5
64.8
1933
45.8
76.5
60.6
1934
52.8
82.6
56.6
By quarters
1932 - January-March
47.2
70.5
69.9
April- June
40.3
70.5
62.7
July- September
43.1
70.5
: 64.4
October-December
37.5
70.5
62.3
1933 - January-March
36.1
70.5
: 58.5
April- June
45.8
71.8
: 61.5
July-September
51.4
80.5
: 63.4
October-December
48.6
82.6
: 59.2
1934 - January-March
55.6
82,6
59.2
April-June
52.8
82.6
: 55.7
July- Sept ember
50.0
: 82.6
56.6
October-December
51.4
: 82.6
56.6
By months
1935 - January
55.6
82.6
58.5
February
55.6
82.6
: 59.2
Sources: Bureau of Labor Statistics, Wholesale Frices , and
Dundee Prices Current (weekly) , Dundee, Scotland.
9829
-715-
Prom the three price indices in the above table, it will "be noted
that in the first quarter of 1933, when the price of raw jute fell to
36 from its 1929 level of 100, - the lowest point for the entire 1929-
1934 period, - the mill price of domestic yarn declined only 71. At the
same time the price of yarn (in pence) at Dundee fell to 59 per cent of
1929. Since the first quarter of 1933 the price of domestic yarn has
risen to 83, while the Dundee price has generally continued to decline,
notwithstanding the fact that the pound was devaluated a year and one-half
earlier than the dollar.
Manufacturer's margin
The stability of the price of domestic jute yarn, despite the greater
general decline of prices during the depression, allowed the manufactureers
to increase the margin between the cost of the raw fiber and the selling
price of the finished yarn. Thus, through an increased manufacturer's
margin, the yarn producers have, in effect, raised the price of their
services.
The data of Table 12 indicate that in every year shown, with exception
of 1932, the manufacturer's margin in the production of jute yarn was
greater than in 1929, being 5.2 per cent greater in 1933 and 10.4 per
cent greater in .1934.
9829
-716-
Table 12. - Raw jute and jute yarn: Prices of raw jute and
carpet yarn, and the manufacturer's margin,
1939 to March, 1935.
YTholesale
Domestic
Manufacturer' s
Period
price of
medium grades
mill price, No. 2
14-pound to
mars]
.n
Indices
of raw jute
16-pound
Amount
of amount
at Hew York
carpet yarn
1929= 100
1929
$0,072
$0,149
$0,077
100.0
1930
.050
.138
.088
114.3
1931
.037
.117
.080
103.9
1932
.030
.105
.075
97.4
1933
.033
.114
.081
: 105.2
1934
.038
.125
.085
110.4
By quarters
1932
J anuar y-M ar ch
.034
.105
.071
: 92.2
April- June
.029
.105
.076
98.7
July-September
.031
.105
.074
: 96.1
October-December
.027
.105
.078
: 101.3
1933
January-March
.026
.105
.079
102.6
April-June
: .033
.107
.074
96.1
July- Sept ember
.037
.120
.083
107.8
October-December
.035
.123
.088
: 111.7
1934
January-March
.040
.123
.083
: 107.8
April- June
.038
.123
.085
: 110.4
July-September
.036
.123
.087
: 113.0
October-December
.037
.123
.086
111.7
1935
J anuar y-M arch
.039
.123
.084
109.8
Source: Bureau of Labor Statistics, Wholesale Prices,
9829
-717-
The Effect of Dollar Depreciation
The depreciation of the dollar in terms of belgas and rupees during
the period from the second quarter of 1933 to the second and third
quarters of 1934 apparently was a factor in the decreasing volume of
imports from Belgium, hut was without apparent effect in decreasing the
volume of imports from India, as may be seen from the data of Table 13.
This table gives the indices both of the respective exchange rates and
of the unit values of imports, along with the amount in pounds of imports
from each country, f iron 1932 to the first quarter of 1935.
Table 13. - Exchange and webbing imports: Indices of belga-and
rupee-dollar exchange and of the unit values of imports,
along with the quantity of imports, 1932 to March, 1935.
'Belga-
Imports from
Imports from
Period
dollar
exchange
Bt
jlffium
Rupee-
dollar
British India
Unit
Quantity
Unit
Quantity
value
exchange
Value
: ■
1932 -
100
Pounds
1932 =
100
Pounds
1932
■100
100
1,081,938
100
100
73 , 344
1933
129
102
1,584,125
121
117
150,722
1934
167
121
759 , 947
144
111
315,570
By Quarters
1933
J a nuary-M ar ch
100
98
331,247
97
104
21,750
April- June
115
87 :
430,301
111
108
41,762
July-September
142
108
441,981
131
117
8,700
October-December
155
117
380,596
141
: 126
78,510
1934 :
January-March .
163
126 J
239,417
144
136
97,305
April-June
168
132 •
101,209
145
89
43,000
• July- Sept ember
170
121 '
170,980-
144
120
25,945
October-December
' 168
■ Ill :
248 , 341
141
111
149 , 320
1935
January-March
166
113 -
300 , 145
139
112
38,175
Source: federal Reserve Bulletin , and U.S. Tariff Commission,
In the foregoing table it may be noted that the value of the belga
in terms of dollars rose 67 points from. 1932 to 1934, and that the unit
value of imports increased 21 points. From 1933 to 1934 the quantity of
webbing imports from Belgium declined about 50 per cent. From 1932 to
1934 the rupee rose 44 points in terms of dollars, while the unit value
rose only 11 points. From 1933 to 1934 the quantity of webbing imported
from British India increased 100 per cent.
9829
-718-
The Effect of the National Recovery Program
La"bor provisions of the code
A basic minimum wage rate of 32^ cents, regardless of whether
employees are compensated on a time-rate or piece-work "basis, was es-
tablished by the Code for the Soft Fibre Manufacturing Industry. A
basic minimum weekly wage, however, was not provided. A basic 40-hour
week was established by the code, but there was no limitation on the
number of hours in a work day. _,
Hours and wages
The trend of weekly wages and hourly rates of pay in the industry
since 1929 may be seen from the data in Table 14.
Table 14. - Jute webbing: Trend of average weekly and hourly
wages in the industry since. 1929.
Average wee
:kly wage
Average hourly rate
Period
Amount - : '
Index '
Amoun t
Index
1929- 100 .
1929=100
1929 :
$21.04
100.0
$0,455
100.0
1932 :
8.47 ■
40.3
.379
83.3
1933 :
10.48
49.8
.346
76.0
1934( first nine months)
9.98 ■
47.4
.372 !
81.8
1932
January
11.66
55.4
.361
79.3
April
7.48 •
35.6
.441
96.9
July
4.62
22.0
.422
92.7
October
6.93
33.2
.367
80.7
1933
January
: 7.34
34.9
.355
78.0
April
: 5.80
: 27.6
: .281
: 61.8
July
: 11.38
: 56 .5
: .317
: 69.7
October
: 15.83
: 75.2
: .400
: 87.9
1934
January
: 11.00
: 52.3
: .398
: 87.5
April, July, September
April
July
September
-Code approved April 9, 1934-
9.67
10.24
9.66
1/9.48
46.0
48.7
46.0
45.1
.367
.375
.362
1/.366
80.7
82.4
79.6
80.4
Source: Complaint.
1/ Includes data of one company for payroll period ended August 18,
1934, instead of for September, because September data are unacceptable.
9829
-719-
From the data in the foregoing table it may be seen that wage earners
in the jute webbing industry in 1929 were paid an average hourly rate of
about 30.46. The average hourly rate was about $0.38 in 1932, $0.35 in
1933, and $0.37 in the first nine months of 1934. During 1933 the average
hourly rate ranged from approximately $0.28 (April) to $0.40 (October).
After approval of the code on April 9, 1934, the average hourly rate
through September, 1934, was roughly $0.37, as compared with the average
hourly rate of about $0.40 in January, 1934. (According to data sub-
mitted in the complaint, at no time from the date of the approval of the
code to September, 1934, was the hourly wage paid by any single establish-
ment less than $0,34*).
In the above table it may be seen that the average weekly wage was
about $10.48 in 1933 and $9.98 in the first nine months of 1934. In
January, 1934, just prior to the approval of the code, the weekly wage
was about $11 and $9.67 in the period from April to September, after
the approval of the code.
Table 15 shows indices of employment, payroll, and wages for the
year 1933 and for the one-week period ended the middle of January, 1934,
before approval of the code, and similar periods in April, July, and
September, after approval of the code.
Table 15. - Jute webbing; Indices of employment, payroll, and
wages, 1933 and 1934.
Period
(week ended
of month)
15 th
Number
of
employees
Hours per Man-hours
worker' :per payroll
per week : period
Total
weekly
: payroll
Average
Weekly
wage
Average
hourly
wage
59.34
■ :1933-l/= IOC
)
■
62.07
104.96
1934
January
91.54 : 54.11
•
115.03
--Code Ajjproved April c .
5, 1934—
April
July
September
2/
. 66.81
87.91
: 89.01
90.22 : 78.09
• 88.24 : 77.47
: 88.90 : 76.10
84.54
80.77
80.25
97.71
92.18
90.46
108.38
104.34
105.78
1/ Fayroll periods in January, April, July, and October.
2/ Includes data of one company for the payroll period ended August 18,
1934, instead of in September, because September data are unacceptable.
The indices of the foregoing table show that the number of workers
employed, hours of work, and weekly wages declined in 1934, after approval
of the code, as compared with 1933. There was, however, an increase in
the index of hourly wages in the post-code period. As compared with the
period in January, 1934, before approval of the code, the indices for the
later payroll periods in April, July, and September, show only an increase
in the number employed, with declines in the hours per worker and the
weekly and hourly rates of pay.
-720-
Production and sales cost
Table 16 shows costs of producing- and selling 1,000 pounds' of jute
webbing for four companies in the first half of 1933 and generally for
1934 and the percentage distribution of costs in the two periods. The
costs were submitted in the complaint in consolidated form without
separate data for each company, thus precluding a determinative analysis
of the various factors which should be considered before any valid con-
clusions can be drawn as to costs in pre-and post-code periods.
Table 16. - Jute webbing: Producing and selling costs for four
companies 1/ in 1933 and 1934, and percentage dis-
tribution of cost items.
Cost
Per cent
Percentage
Per cent
per 1,000
increase (/)
distribution of
increase^)
Item of cost
pounds ■
or decrease
separate costs
or decrease
1933
1934
(-) over
1933 : 1934
(-) over
2/
3/
1933
2/ : 3/
1933
Material
$79.59
$92.53
/ 16.2
56.9
56.3
-0.6
Labor
20.76
28.49
/ 37.2
14.8
17.3
±2,5
Factory expense
14.10
15.67
i 11.1
10.1
9.5
- .6
Depreciation
4.66
4.37
- 6.2
3.3
2.7
- .7
General, administra-
tive, and selling
expense-
20.83
23.29
/ 11.8 ■
14.9
14.2
- .7
139.93
164.35
/ 17.5 ■
100.0'
100.0
—
Total
Source: Complaint
\l .Representing about 50 'per cent of 'domestic production.'
2/ Based on operations for the first half of 1933.
3./ Based on operations for various periods in 1934.
. The cost of: material was 16 per cent greater in 1934 than in 1933,
an .increase greater than the known general increase in the cost of yarn,
the chief material used in weaving jute webbing. The mill price of No.
2, 14-pound to 16-pound carpet yarn rose from $0,114 in 1933 to $0,123
in 1934, an increase of 0.9 of a cent, or 7.9 per cent.
9829
OFFICE OF THE NATIONAL RECOVERY ADMINISTRATION
THE DIVISION OF REVIEW
THE WORK OF THE DIVISION OF REVIEW
Executive Order No. 7075, dated June 15, 1935, established the Division of Review of the
National Recovery Administration. The pertinent part of the Executive Order reads thus:
The Division of Review shall assemble, analyze, and report upon the statistical
information and records of experience of the operations of the various trades and
industries heretofore subject to codes of fair competition, shall study the ef-
fects of such codes upon trade, industrial and labor conditions in general, and
other related matters, shall make available for the protection and promotion of
the public interest an adequate review of the effects of the Administration of
Title I of the National Industrial Recovery Act, and the principles and policies
put into effect thereunder, and shall otherwise aid the President in carrying out
his functions under the said Title. I hereby appoint Leon C. Marshall, Director of
the Division of Review.
The study sections set up in the Division of Review covered these areas: industry
studies, foreign trade studies, labor studies, trade practice studies, statistical studies,
legal studies, administration studies, miscellaneous studies, and the writing of code his-
tories. The materials which were produced by these sections are indicated below.
Except for the Code Histories, all items mentioned below are scheduled to be in mimeo-
graphed form by April 1, 1936.
THE CODE HISTORIES
The Code Histories are documented accounts of the formation and administration of the
codes. They contain the definition of the industry and the principal products thereof; the
classes of members in the industry; the history of code formation including an account of the
sponsoring organizations, the conferences, negotiations and hearings which were held, and
the activities in connection with obtaining approval of the code; the history of the ad-
ministration of the code, covering the organization and operation of the code authority,
the difficulties encountered in administration, the extent of compliance or non-compliance,
c;nd the general success or lack of success of the code; and an analysis of the operation of
code provisions dealing with wages, hours, trade practices, and other provisions. These
and other matters are canvassed not only in terms of the materials to be found in the files,
but also in terms of the experiences of the deputies and others concerned with code formation
and administration.
The Code Histories, (including histories of certain NRA units or agencies) are not
mimeographed. They are to be turned over to the Department of Commerce in typewritten form.
All told, approximately eight hundred and fifty (850) histories will be completed. This
number includes all of the approved codes and some of the unapproved codes. (In Work Mate-
rials No^ 18, Contents of Code His to ries , will be found the outline which governed the
preparation of Code Histories.)
(In the case of all approved codes and also in the case of some codes not carried to
final approval, there are in NRA files further materials on industries. Particularly worthy
of mention are the Volumes I, II and III which constitute the material officially submitted
to the President in support of the recommendation for approval of each code. These volumes
9768 — 1 .
-ii -
set forth the origination of the codes, the sponsoring group, the evidence advanced to sup-
port the proposal, the report of the Division of Research and Planning on the industry, the
recommendations of the various Advisory Boards, certain types of official correspondence,
transcript of the formal hearing, and other pertinent matter. There is also much offi-
cial information relating to amendments, interpretations, exemptions, and other rulings. The
materials mentioned in this paragraph were of course not a part of the work of the Division
of Review. )
THE WORK MATERIALS SERIES
In the work of the Division of Review a considerable number of studies and compilations
of data (other than those noted below in the Evidence Studies Series and the Statistical
Material Series) have been made. These are listed below, grouped according to the char-
acter of the material. (In Work Materials No. 17 . Tentative Ou tlines and Sum m arie s of
Studies in Process , the materials are fully described) .
I ndustry Studies
Automobile Industry, An Economic Survey of
Bituminous Coal Industry under Free Competition and Code Regulation, Ecnomic Survey cf
Electrical Manufacturing Industry, The
Fertilizer Industry, The
Fishery Industry and the Fishery Codes
Fishermen and Fishing Craft, Earnings of
Foreign Trade under the National Industrial Recovery Act
Part A - Competitive Position of the United States in International Trade 1927-29 through
1934.
Part B - Section 3 (e) of NIRA and its administration.
Part C - Imports and Importing under NRA Codes.
Part D - Exports and Exporting under NRA Codes.
Forest Products Industries, Foreign Trade Study of the
Iron and Steel Industry, The
Knitting Industries, The
Leather and Shoe Industries, The
Lumber and Timber Products Industry, Economic Problems of the
Men's Clothing Industry, The
Millinery Industry, The
Motion Picture Industry, The
Migration of Industry, The: The Shift of Twenty-Five Needle Trades From New York State,
1926 to 1934
National Labor Income by Months, 1929-35
Paper Industry, The
Production, Prices, Employment and Payrolls in Industry, Agriculture and Railway Trans-
portation, January 1923, to date
Retail Trades Study, The
Rubber Industry Study, The
Textile Industry in the United Kingdom, France, Germany, Italy, and Japan
Textile Yarns and Fabrics
Tobacco Industry, The
Wholesale Trades Study, The
Women's Neckwear and Scarf Industry, Financial and Labor Data on
9768 — 2
- iii -
Women's Apparel Industry, Some Aspects of the
T rade P ractic e Studies
Commodities, Information Concerning: A Study of NRA and Related Experiences in Control
Distribution, Manufacturers' Control of: Trade Practice Provisions in Selected NRA Codes
Distributive Relations in the Asbestos Industry
Design Piracy: The Problem and Its Treatment Under NRA Codes
Electrical Mfg. Industry: Price Filing Study
Fertilizer Industry: Price Filing Study
Geographical Price Relations Under Codes of Fair Competition, Control of
Minimum Price Regulation Under Codes of Fair Competition
Multiple Basing Point System in the Lime Industry: Operation of the
Price Control in the Coffee Industry
Price Filing Under NRA Codes
Production Control in the Ice Industry
Production Control, Case Studies in
Resale Price Maintenance Legislation in the United States
Retail Price Cutting, Restriction of, with special Emphasis on The Drug Industry.
Trade Practice Rules of The Federal Trade Commission (1914-1936): A classification for
comparision with Trade Practice Provisions of NRA Codes.
Labo r Studies
Cap and Cloth Hat Industry, Commission Report on Wage Differentials in
Earnings in Selected Manufacturing Industries, by States, 1933-35
Employment, Payrolls, Hours, and Wages in 115 Selected Code Industries 1933-35
Fur Manufacturing, Commission Report on Wages and Hours in
Hours and Wages in American Industry
Labor Program Under the National Industrial Recovery Act, The
Part A. Introduction
Part B. Control of Hours and Reemployment
Part C. Control of Wages
Part D. Control of Other Conditions of Employment
Part E. Section 7(a) of the Recovery Act
Materials in the Field of Industrial Relations
PRA Census of Employment, June, October, 1933
Puerto Rico Needlework, Homeworkers Survey
A dministrative S tudie s
Administrative and Legal Aspects of Stays, Exemptions and Exceptions, Code Amendments, Con-
ditional Orders of Approval
Administrative Interpretations of NRA Codes
Administrative Law and Procedure under the NIRA
Agreements Under Sections 4(a) and 7(b) of the NIRA
Approved Codes in Industry Groups, Classification of
Basic Code, the — (Administrative Order X-61)
Code Authorities and Their part in the Administration of the NIRA
Part A. Introduction
Part B. Nature, Composition and Organization of Code Authorities
9758—3.
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Part C. Activities of the Code Authorities
Part D. Code Authority Finances
Part E. Summary and Evaluation
Cjde Compliance Activities of the NRA
Code Making Program of the NRA in the Territories, The
Code Provisions and Related Subjects, Policy Statements Concerning
Content of NIRA Administrative Legislation
Part A. Executive and Administrative Orders
Part B. Labor Provisions in the Codes
Part C. Trade Practice Provisions in the Codes
Part D. Administrative Provisions in the Codes
Part E. Agreements under Sections 4(a) and 7(b)
Part F. A Type Case: The Cotton Textile Code
Labels Under NRA, A Study of
Model Code and Model Provisions for Codes, Development of
National Recovery Administration, The: A Review of its Organization and Activities
NRA Insignia
President's Reemployment Agreement, The
President's Reemployment Agreement, Substitutions in Connection with the
Prison Labor Problem under NRA and the Prison Compact, The
Problems of Administration in the Overlapping of Code Definitions of Industries and Trades,
Multiple Code Coverage, Classifying Individual Members of Industries and Trades
Relationship of NRA to Government Contracts and Contracts Involving the Use of Government
Funds
Relationship of NRA with States and Municipalities
Sheltered Workshops Under NRA
Uncodified Industries: A Study of Factors Limiting the Code Making Program
Legal Studies
Anti-Trust Laws and Unfair Competition
Collective Bargaining Agreements, the Right of Individual Employees to Enforce
Commerce Clause, Federal Regulation of the Employer-Employee Relationship Under the
Delegation of Power, Certain Phases of the Principle of, with Reference to Federal Industrial
Regulatory Legislation
Enforcement, Extra-Judicial Methods of
Federal Regulation through the Joint Employment of the Power of Taxation and the Spending
Power
Government Contract Provisions as a Means of Establishing Proper Economic Standards, Legal
Memorandum on Possibility of
Industrial Relations in Australia, Regulation of
Intrastate Activities Which so Affect Interstate Commerce as to Bring them Under the Com-
merce Clause, Cases on
Legislative Possibilities of the State Constitutions
Post Office and Post Road Power — Can it be Used as a Means of Federal Industrial Regula-
tion?
State Recovery Legislation in Aid of Federal Recovery Legislation History and Analysis
Tariff Rates to Secure Proper Standards of Wages and Hours, the Possibility of Variation in
Trade Practices and the Anti-Trust Laws
Treaty Making Power of the United States
War Power, Can it be Used as a Means of Federal Regulation of Child Labor?
9768—4.
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THE EVIDENCE STUDIES SERIES
The Evidence Studies were originally undertaken to gather material for pending court
cases. After the Schechter decision the project was continued in order to assemble data for
use in connection with the studies of the Division of Review. The data are particularly
concerned with the nature, size and operations of the industry; and with the relation cf the
industry to interstate commerce. The industries covered by the Evidence Studies account for
more than one-half of the total number of workers under codes. The list of those studies
follows:
Automobile Manufacturing Industry
Automotive Parts and Equipment Industry
Baking Industry
Boot and Shoe Manufacturing Industry
Bottled Soft Drink Industry
Builders' Supplies Industry
Canning Industry
Chemical Manufacturing Industry
Cigar Manufacturing Industry
Coat and Suit Industry
Construction Industry
Cotton Garment Industry
Dress Manufacturing Industry
Electrical Contracting Industry
Electrical Manufacturing Industry
Fabricated Metal Products Mfg. and Metal Fin-
ishing and Metal Coating Industry
Fishery Industry
Furniture Manufacturing Industry
General Contractors Industry
Graphic Arts Industry
Gray Iron Foundry Industry
Hosiery Industry
Infant's and Children's Wear Industry
Iron and Steel Industry
Leather Industry
Lumber and Timber Products Industry
Mason Contractors Industry
Men's Clothing Industry
Motion Picture Industry
Motor Vehicle Retailing Trade
Needlework Industry of Puerto Rico
Painting and Paperhanging Industry
Photo Engraving Industry
Plumbing Contracting Industry
Retail Lumber Industry
Retail Trade Industry
Retail Tire and Battery Trade Industry
Rubber Manufacturing Industry
Rubber Tire Manufacturing Industry
Shipbuilding Industry
Silk Textile Industry
Structural Clay Products Industry
Throwing Industry
Trucking Industry
Waste Materials Industry
Wholesale and Retail Food Industry
Wholesale Fresh Fruit and Vegetable Indus-
try
Wool Textile Industry
THE STATISTICAL MATERIALS SERIES
This series is supplementary to the Evidence Studies Series. The reports include data
en establishments, firms, employment, payrolls, wages, hours, production capacities, ship-
ments, sales, consumption, stocks, prices, material costs, failures, exports and imports.
They also include notes on the principal qualifications that should be observed in using the
data, the technical methods employed, and the applicability of the material to the study of
the industries concerned. The following numbers appear in the series:
9768—5.
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Asphalt Shingle and Roofing Industry Fertilizer Industry
Business Furniture Funeral Supply Industry
Candy Manufacturing Industry Glass Container Industry
Carpet and Rug Industry Ice Manufacturing Industry
Cement Industry Knitted Outerwear Industry
Cleaning and Dyeing Trade Paint, Varnish, ana Lacquer, Mfg. Industry-
Coffee Industry Plumbing Fixtures Industry
Copper and Brass Mill Products Industry Rayon and Synthetic Yarn Producing Industry
Cotton Textile Industry Salt Producing Industry
Electrical Manufacturing Industry
THE COVERAGE
The original, and approved, plan of the Division of Review contemplated resources suf-
ficient (a) to prepare some 1200 histories of codes and NRA units or agencies, (b) to con-
solidate and index the NRA files containing some 40,000,000 pieces, (c) to engage in ex-
tensive field work, (d) to secure much aid from established statistical agencies of govern-
ment, (e) to assemble a considerable number of experts in various fields, (f) to conduct
approximately 25% more studies than are listed above, and (g) to prepare a comprehensive
summary report.
Because of reductions made in personnel and in use of outside experts, limitation of
access to field work and research agencies, and lack of jurisdiction over files, the pro-
jected plan was necessarily curtailed. The most serious curtailments were the omission of
the comprehensive summary report; the dropping of certain studies and the reduction in the
coverage of other studies; and the abandonment of the consolidation and indexing of the
files. Fortunately, there is reason to hope that the files may yet be carec for under other
auspices.
Notwithstanding these limitations, if the files are ultimately consolidated and in-
dexed the exploration of the NRA materials will have been sufficient to make them accessible
and highly useful. They constitute the largest and richest single body of information
concerning the problems and operations of industry ever assembled in any nation.
L. C. Marshall,
Director, Division of Review.
9768—6.
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