SUGGESTED CHANGE-PARAGRAPH 422. PRESENT ACT-PARAGRAPH 422. Braids, plaits, laces, and willow sheets or squares, composed wholly or in chief value of straw, chip, grass, palm leaf, willow, osier, rattan, real horsehair, Cuba bark, or manila hemp, suitable for making or ornamenting hats, bonnets, or hoods, not bleached, dyed, colored, or stained, 15 per centum ad valorem; if bleached, dyed, colored, or stained, 20 per centum ad valorem; hats, bonnets, and hoods composed wholly or in chief value of straw, chip, grass, palm leaf, willow, osier, rattan, Cuba bark, or manila hemp, whether wholly or partly manufactured, but not trimmed, 35 per centum ad valorem; if trimmed, 50 per centum ad valorem. But the terms "grass" and "straw" shall be understood to mean these substances in their natural form and structure, and not the separated fiber thereof. Braids, plaits, laces, willow sheets and squares, composed wholly or in chief value of straw, chip, grass, willow, osier, rattan, real horsehair, Cuba bark, manila hemp or ramie, suitable for making or ornamenting hats, bonnets, or hoods, not dyed, bleached, colored, or stained, 15 per centum ad valorem; if bleached, dyed, colored, or stained, 20 per centum ad valorem; hats, bonnets, and hoods, composed wholly or in chief value of sewed or plaited leghorn straw, not bleached, dyed, colored, or stained, unblocked and untrimmed, 25 per centum ad valorem; if bleached, dyed, colored, or stained, 30 per centum ad valorem; if blocked, 40 per centum ad valorem; if blocked and trimmed, 50 per centum ad valorem; hats, bonnets, and hoods, composed wholly or in chief value of woven and not sewed straw, chip, grass, palm leaf, willow, osier, rattan, Cuba bark, ramie, real horsehair, or manila-hemp braid not bleached, dyed, colored, or stained, unblocked and untrimmed, and not provided for, 25 per centum ad valorem; if bleached, dyed, colored, or stained, unblocked and untrimmed, 30 per centum ad valorem; if blocked, 40 per centum ad valorem; if blocked and trimmed, 50 per centum ad valorem; hats, bonnets, and hoods, composed wholly or in chief value of sewed and not woven straw, chip, grass, palm leaf, willow, osier, rattan, Cuba bark, ramie, real horsehair, or manila-hemp braid, wholly or partly manufactured and not provided for, 50 per centum ad valorem. But the terms "grass" and "straw" shall be understood to mean the substances in their natural form and structure and not the separated fiber thereof. Suggestion No. 1.-Ramie braid should be included with the other braids mentioned in paragraph 422. Ramie braids should be included in paragraph 422, as they come under the same classification of braids mentioned therein, and should not bear a different tariff than other braids, composed of vegetable fiber, which enter into the manufacture of hats. Under the present law ramie braids are classified under paragraph 349. Not an inch of ramie braid is manufactured in the United States. Ramie braids are chiefly produced in Italy and Switzerland and are composed of grass grown in China, which is subjected to certain pressing processes for the purposes of plaiting. These braids are plaited solely for the purpose of being sewed into a woman's hat and are in all respects similar to braids composed of straw, chip, grass, rattan, and the other braids enumerated in this paragraph. We submit for inspection samples of ramie braid, now dutiable at 60 per cent under parargaph 349 (Exhibits Nos. 1, 2, 3, and 4), and samples of chip braid, now dutiable at 15 per cent under paragraph 422 (Exhibits Nos. 5, 6, 7, and 8). We also submit samples of braids composed of straw (Exhibit No. 9), hemp (Exhibit No. 10), Cuba bark (Exhibit No. 11), and real horsehair (Exhibit No. 12). An examination will, show that these braids are in many respects very much alike and all of them are used only in the manufacture of hats. It will be observed that ramie braid is very much like chip braid, except of a somewhat heavier texture. Paragraph 349 was never intended to apply to hat braids, but the language was broad enough to include ramie braids and to exclude ramie braids from paragraph 422. Ramie braid is no more expensive than some grades of braid enumerated in paragraph 422 and is less expensive than some of the better grades mentioned therein. It is therefore respectfully submitted that paragraph 422 should be amended, by inserting the word "ramie" after the words "Cuba bark." This change will largely increase the importations on account of the reduced cost. Suggestion No. 2.-Hats composed of real horsehair should be included in paragraph 422. Paragraph 409 of the act of 1897 did not include braids, etc., composed of real horsehair, Cuba bark, or Manila hemp, nor hats composed of those three classes of braid. When the present act was under consideration it was urged by this association that paragraph 409 be amended by including braids suitable for making hats, and hats composed of real horsehair, Cuba bark, and Manila hemp, for the reason that in texture and use, braids and hats composed of these vegetable and animal fibers were commercially similar to the other braids and hats enumerated in this paragraph. The act of 1897 was amended by the act of 1909 for the reasons urged, by including braids composed of real horsehair, Manila hemp, and Cuba bark, and likewise by inserting hats composed of Manila hemp and Cuba bark, but through oversight, hats composed of real horsehair were eliminated. Real horsehair braid is made in Switzerland out of hair recovered from the tails of Russian horses. No real horsehair braid is made in the United States. Under T. D. 32357 (United States v. Bass & Warner 782), real horsehair hats are now classified under paragraph 405 and pay a duty of 60 per cent ad valorem and 45 cents per pound. The Court of Customs Appeals held that no provision being made for real horsehair hats and as they are comparable with horsehair braid articles, they should be classified under paragraph 405 under the similitude clause. No hats composed of real horsehair are made in the United States. It is respectfully urged that "hats" composed of real horsehair braid should be included in the same paragraph as "braids" composed of real horsehair, and that the same grouping of braids suitable for making hats and hats composed of horsehair braids should be followed. Suggestion No. 3.-We urge that hat bodies be divided into the following classifications: 1. Hats composed of woven straw. 2. Hats composed of sewed straw braid. 3. Leghorn hats which are composed of woven straw and sewed braid. Under the present language of paragraph 422 all classes of hats composed of straw, chip, grass, palm leaf, willow, osier, rattan, Cuba bark, or manila hemp, whether natural or bleached and whether partially or wholly manufactured, are dutiable at 35 per cent if untrimmed; and if trimmed, at 50 per cent. No distinction is made between what are commercially known as woven body hats; that is, hats made out of woven straw in the countries where they are produced, such as Panama, Bangkok, and Java hats, and between braid hats, which are made out of sewed braid composed of straw, chip, rattan, willow, and the other braids enumerated in paragraph 422. The straw-hat manufacturers in the United States are principally engaged in the business of manufacturing sewed-braid hats and blocking and shaping woven-body hats. Not a single so-called woven-body hat is made in the United States. We urge a further classification of body hats, and the dutiable rates as follows: (1) Woven body hats, not bleached, dyed, colored, or stained, unblocked and untrimmed, 25 per cent. (2) Woven body hats, bleached, dyed, colored, or stained, unblocked and untrimmed, 30 per cent. (3) Woven body hats, bleached, dyed, colored, or stained and blocked, 40 per cent. (4) Woven body hats, bleached, dyed, colored, or stained, blocked and trimmed, 50 per cent. As a woven body hat becomes more valuable as it is respectively bleached, dyed, or stained, and blocked and trimmed, the duties should be progressive and increased. Under the present paragraph a woven hat body untrimmed is dutiable at 35 per cent and trimmed at 50 per cent. In urging a reduction from 35 per cent to 25 per cent, we believe that the importations of this class of merchandise will be considerably increased. These woven body hats cover a wide range of prices; indeed, they sell wholesale from 75 cents per dozen upward. Among the lower grades are the so-called harvest hats, better known as the wide-brimmed straw hats which the farmer usually wears. Some few of the woven body hats, principally Panamas, are expensive, but the vast majority of Panama hats are valued at the port of export from $9 to $15 per dozen and are mostly retailed in the United States at from $3 to $5 apiece. We do not suggest a reduction from 35 per cent to 25 per cent from any selfish motive, and are quite satisfied to have the duty remain at 35 per cent, except that we believe our knowledge of the trade should be placed before the committee with the statement that if the duty is reduced it will result in a corresponding reduction of the price, which the consumer will have the benefit of, and it is to that end that a reduction would be agreeable. We do, however, urge that whether the duty on woven hat bodies is changed or not, a differential duty should be placed on body hats which are bleached, stained, dyed, or blocked, becaused the bleaching, dyeing, and staining and blocking of woven-body hats is done in the United States. Under the present language of the paragraph, woven-body hats that are bleached and blocked pay the same duty as a woven-body hat unbleached and unblocked. As a result a great many woven-body hats, and in some kinds of body hats all of them, are brought into the United States bleached and blocked, thereby depriving the United States manufacturers of this work, because it is manifest that an importer would prefer to bring over the hat manufactured rather than unmanufactured if no higher duty were imposed. We illustrate the difference between an unbleached, a bleached, and a bleached and blocked hat body. Exhibits Nos. 13a and 13b are woven hat bodies unbleached; Exhibit 14 is the same hat bleached; Exhibits Nos. 15a and 15b are the same hat blocked. We suggest the following language to cover woven-body hats : "Hats, bonnets, and hoods composed wholly or in chief value of woven and not sewed straw, chip, grass, palm leaf, willow, osier, rattan, Cuba bark, ramie, real horsehair, or Manila hemp braid, not bleached, dyed, colored or stained, unblocked and untrimmed, and not provided for, twenty-five per centum ad valorem; if bleached, dyed, colored, or stained, unblocked and untrimmed, thirty per centum ad valorem; if blocked, forty per centum ad valorem; if blocked and trimmed, fifty per centum ad valorem." Suggestion No. 4.-Special provision should be made for plaited leghorn hats. All of our remarks with relation to woven hat bodies apply to hat bodies composed of plaited leghorn straw, and the only reason why special phraseology is necessary to cover leghorn hats is to differentiate a leghorn hat from a woven-body hat covered by suggestion No. 3 and a sewed-braid hat covered by suggestion No. 5, because a leghorn hat is made from a plaited braid which is meshed and held together by a cotton thread, so that it is neither a woven nor a sewed-braid hat, but is composed of both. These hats are not made in the United States. We suggest the following language to cover leghorn hats: "Hats, bonnets, or hoods composed wholly or in chief value of sewed or plaited leghorn straw, not bleached, dyed, colored, or stained, unblocked and untrimmed, twenty-five per centum ad valorem; if bleached, dyed, colored, or stained, thirty per centum ad valorem; if blocked, forty per centum ad valorem; if blocked and trimmed, fifty per centum ad valorem." Exhibit No. 16 is a leghorn hat unblocked or natural. Suggestion No. 5.-Hats composed of sewed straw braid should be dutiable at 50 per cent whether trimmed or untrimmed. Under the present classification a hat body composed of sewed straw braid, such as Exhibit No. 18, is dutiable at 35 per cent, if untrimmed; and if trimmed, such as Exhibit No. 19, at 50 per cent. The only difference between a trimmed and an untrimmed hat is that a trimmed hat has a piece of ribbon, usually silk, placed around the crown, a satin lining and a leather sweat placed inside of the hat. There has been a progressive increase in the importations of trimmed sewed braid hats within the last few years, which is illustrated by the figures taken from the Government reports hereinafter set out: Prior to 1911 untrimmed sewed braid hats were not brought into the United States, but a number of importers discovered that they could more profitably import untrimmed sewed braid hats, such as Exhibit No. 18, than trimmed hats, such as Exhibit No. 19, because the hat in an untrimmed state under the present act is dutiable at 35 per cent, and if trimmed, at 50 per cent. Very large quantities of these untrimmed sewed braid hats have been coming into the United States and have formed such strong competition to the domestic manufacturer, that on some grades the domestic manufacturer has been obliged to almost stop manufacturing, or to continue to do so and meet the competition at a loss. These untrimmed hats are brought into the United States and trimmed here for home consumption. Substantially all of the labor which enters in to the manufacture of a sewed braid hat is completed when the hat is ready for trimming. Sewed braid hats are made out of straw or similar braid, sewed together by machine and then either by hand or machine process blocked and pressed into the desired shape, and when so clocked and pressed is a completely manufactured article, except for the trimming. The trimming is only an incidental part of the manufacture, and is of such minor importance that a female operator usually trims from 70 to 80 hats per day, for which she receives on an average of 2 cents per hat. It is impossible for a domestic manufacturer to finish a sewed braid hat up to the point of trimming against the competition of Italian factories with a duty of 35 per cent. Independent of the labor item, to which we hereinafter refer, there is but a slight differential duty on a sewed braid hat at 35 per cent. Every inch of straw or similar braid out of which our hats are manufactured is imported. All braid is bleached before manufacture, and much of it is imported in a bleached state. If imported bleached, we pay 20 per cent; if unbleached, 15 per cent, so that as the law now stands we pay substantially 20 per cent duty on all braid out of which our hats are manufactured, making allowance for the cost of bleaching in the United States on braids which are imported unbleached, which cost of bleaching is equivalent to the 5 per cent differential betwen the bleached and unbleached braid. In addition to the straw braid, the only other important material which enters into the manufacture of a hat is glue. Every dozen hats contain 15 cents worth of glue, the largest part of which is imported, and against which a duty averaging 25 per cent is paid. Paying, therefore, 20 per cent on our braid and 25 per cent on our glue does not leave a very large differential on the sewed braid untrimmed hat at 35 per cent. We made considerable effort to obtain the exact manufacturing cost of sewed braid hats, both untrimmed and trimmed, and representatives of several hat manufacturers went abroad for the purpose of investigating the straw-hat business as conducted in Europe and to learn why they could manufacture hats so much cheaper than we could. They went through various hat factories and found them equipped equally as well as the straw-hat factories of the United States and with all the modern appliances and machinery. An operator is able to make just as many hats over there as here. The work is all piecework, and while unable to obtain the precise piecework cost of hats, they did find out that the average labor cost price per dozen was about 35 per cent of the cost price in the United States. This in particular applies to Italian factories, where the labor was in some instances about 25 per cent of what is paid in the United States. Indeed, the price of the sewed braid hats was so attractive that several American straw-hat manufacturers now import these hats in an untrimmed state, finding that these hats can be landed in the United States, all charges paid, cheaper than they can be made in their own factories. Exhibit No. 18 is an Italian untrimmed hat which sells placed aboard the steamer at the port of sailing for $2.76 per dozen, and which can be landed in New York City, duty and all charges paid, at $4.17 per dozen. Exhibit No. 20 is the same hat manufactured in the United States, and for comparison the following is a schedule of cost of this hat: Flanging... .06 Factory expense (figured on a capacity of 200 dozen hats per day, and including only rent, light, heat, steam, etc., and excluding any office or selling expense or profit).... 1.87 Total.... 5. 14 The facts as to the cost of Exhibit No. 18 will be verified by the contracts, invoices, and other papers connected with various customhouse entries, and the facts as to the schedule cost of Exhibit No. 20 can be verified at any straw-braid factory in the United States. Indeed, the schedule of wages paid in straw-hat factories is largely based upon the piecework price and production. We therefore respectfully submit that the difference so far as labor is concerned between an untrimmed and a trimmed sewed braid hat is so insignificant as to require no differential duty, and that they should no longer be distinguished as to classification, and that an untrimmed hat requires as much protection as a trimmed hat. The Italian sewed braid untrimmed hat can be landed in the United States for 97 cents a dozen, duty and all charges paid, cheaper than the same hat can be manufactured in the United States. If to this difference of 97 cents is added the office and selling cost, and even the slightest profit to the manufacturer, a startling difference exists, as illustrated by Exhibit No. 20. If Exhibit No. 18 were trimmed abroad, the market value at the port of export would be $4.25 per dozen, the difference between the untrimmed and the trimmed being $1.49 per dozen, which represents the cost price of the hat trimmings and the amount spent for the labor of trimming. Hat trimmings consist of silk bands, satin linings and leather sweats. If the hat were imported in a trimmed state instead of an untrimmed state, the duty would be 50 per cent, an increase of 15 per cent, not alone on the sewed braid body, but on the increased value of the body as enhanced by the addition of the value of the trimmings. These hat trimmings cost the European manufacturer about one-third less than they cost the domestic manufacturer. Nearly all hat trimmings are imported. On silk bands we pay a duty of 60 per cent; on satin linings, 60 per cent; and on leather sweats, 15 per cent. Exhibit No. 19, which is a hat made in Italy and is the same as Exhibit No. 18, only trimmed, can be placed aboard a steamer at the port of sailing in Europe for $4.25 per dozen, and the same hat can be landed in New York City, plus duty and all other charges, for $7.04 per dozen. To reproduce this hat under the same scale of wages, as illustrated in the cost schedule heretofore given, would cost $8.49 per dozen, or a difference of $1.45 per dozen above the price that the Italian hat can be delivered in New York City. We refrain from going further into comparative labor cost, as we are advised that the difference in labor cost will not be the controlling factor in estimating whether or not a particular article is subject to too much protection. Sewed braid hats, trimmed or untrimmed, should be retained at 50 per cent, because the amount of duty is not prohibitive and only represents a fair differential duty between the cost of raw material to the domestic manufacturer and does not represent the difference between the actual cost of labor between foreign countries and the United States. The facts heretfore given regarding the selling price of Italian made hats and the cost price of the same hat made in the United States, is the absolute truth, and this statement is not made through hearsay facts but is made as a result of actual business transactions which are taking place every day. It may be argued that the quantity of importations is not sufficiently large in warranting us to say that a very fair proportion of domestic consumption is of foreign-made hats. We do say that a very fair proportion is of foreign manufacture, although a first glance at the Government statistics does not make this clear. On trimmed hats alone there has been a progressive increase from year to year. In the fiscal year of 1912 importations amounted to $343,752; in 1911, $265,000; 1909, $215,000; 1908, $164,000; 1907, $148,000; 1906, $88,000; 1905, $54,000; 1904, $49,000; 1903, $38,000. This schedule includes only sewed braid hats, because woven body hats are never imported trimmed. It is impossible to ascertain the quantities of untrimmed sewed braid hats, about which we are greatly apprehensive, because they are not classified under hat bodies, which classification includes Panamas, Java, and all kinds of woven body hats. The importations of dutiable hat bodies is as follows: 1912, $3,612,000; 1911, $2,920,000; 1910, $2,898,000; 1909, $2,037,000; 1908, $2,482,000. The above figures for 1911 and 1912 include sewed braid hats. (Prior thereto sewed braid untrimmed bodies were not imported.) It will be observed that since 1909 there has been a substantial increase in importations, and in 1912 this increase was more than $700,000 over the highest previous year. We know that the importations of woven hat bodies has not substantially increased, if increased at all, during the last two years. In former years large quantities of leghorn hat bodies were imported from Italy in particular in the years 1908, 1909, and 1910. The demand for leghorn hats on account of change in fashion greatly diminished in 1912, so that but very few of these hats were imported. Likewise in the year 1911 the collector of the port of New York practically closed that port to Panama hats on account of alleged undervaluations. The action of the collector put a quietus on the Panama hat industry for that year and was so effective that practically no Panama hats were entered into the United States for nearly 10 months. While it is true that we are interested in this subject, we are not giving colored and unfair statements, and these facts are well known to anyone at all familiar with this industry. It is also true that prior to 1909 all hats from the Philippine Islands were dutiable at 27 per cent. Manila hats and bangkok hats come exclusively from this territory, and since 1909 this class of hats has been free of duty, which fact must be taken into consideration when comparing progressive importations of hat bodies, as shown by Government reports. Knowing the average number of hats that an operator can trim during a day, it is not hard to calculate the output of a trimming room by multiplying the number of employees by the average production. The estimated gross production of these trimming rooms forms the basis of our estimate. We know of a number of importers who maintain trimming factories where these imported sewed-braid hats are trimmed for the American market, and from such facts and from investigations which we have made we accurately estimate that the total amount of untrimmed sewed-braid hats imported during the year 1912 amounted to at least $1,000,000. This sum is the value at the port of export, and when the duty of 35 per cent and the cost of trimming these hats are added it will bring the amount up to the American equivalent of $1,750,000 (value of same hats if manufactured in the United States). Add to this sum the value of the trimmed hats at |