Men S Sewed Straw Hats Report Of The United Stated Tariff Commi

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UNITED STATES TARIFF COMMISSION WASHINGTON

MEN'S SEWED STRAW HATS

REPORT OF THE UNITED STATES TARIFF COMMISSION TO THE PRESIDENT OF THE UNITED STATES

INVESTIGATION OF THE COSTS OF PRODUCTION OF MEN'S SEWED STRAW HATS IN THE UNITED STATES AND IN THE PRINCIPAL COMPETING FOREIGN COUNTRIES

WITH APPENDIX PROCLAMATION BY THE PRESIDENT

WASHINGTON GOVERNMENT PRINTING OFFICE 1926

UNITED STATES TARIFF COMMISSION

Office: Eighth and E Streets NW., Washington, D. C.

COMMISSIONERS

THOMAS O. MARVIN, _Chairman_. ALFRED P. DENNIS, _Vice Chairman_. EDWARD P. COSTIGAN. HENRY H. GLASSIE. A. H. BALDWIN. EDGAR B. BROSSARD.

JOHN F. BETHUNE, _Secretary_.

ADDITIONAL COPIES OF THIS PUBLICATION MAY BE PROCURED FROM THE SUPERINTENDENT OF DOCUMENTS GOVERNMENT PRINTING OFFICE WASHINGTON, D. C. AT 5 CENTS PER COPY

CONTENTS

Page Introductory: Reference to files 1 Rates of duty 1 History of investigation 1 Scope of investigation 2

Information obtained in the investigation: Domestic production 2 Kinds of hats produced 3 Organization 3 Labor conditions 3 Imports 4 Effect of imports 6 Principal competing country 7 Foreign production-- Types of hats produced 8 Organization 8 Working hours and wages 8 Costs of production-- Methods of obtaining cost data 9 Description of cost items-- Material 9 Labor 9 Overhead 9 Selling expense-- (_a_) Domestic 9 (_b_) Foreign 9 Tables showing cost comparisons 10 Competitive conditions-- Transportation and marketing costs 11

Formal statement of conclusions 11 Summary of conclusions 13

Separate statement of Commissioner Costigan, in part concurring and in part dissenting, in the investigation of men's sewed straw hats: Both higher and lower duties indicated by the commission's cost figures 15 Determining the dividing line for tariff purposes between higher and lower priced hats 15 Some omissions from and doubtful features in the commission's report 16 Representativeness of samples 16 Importers' selling expenses omitted 17 Deficiencies in comparative overhead data 18

Appendix: Proclamation by the President 21

LETTER OF TRANSMITTAL

JULY 17, 1925.

The PRESIDENT, _The White House_, _Washington, D. C._

MY DEAR MR. PRESIDENT: Herewith I have the honor to transmit the report of the Tariff Commission in the investigation, for the purposes of section 315 of the tariff act of 1922, of the costs of production in the United States and in the principal competing foreign country of men's sewed straw hats. Included in the report is a "Separate statement of Commissioner Costigan, in part concurring and in part dissenting, in the investigation of men's sewed straw hats."

Respectfully,

THOMAS O. MARVIN, _Chairman_.

UNITED STATES TARIFF COMMISSION WASHINGTON

MEN'S SEWED STRAW HATS

JULY 17, 1925.

_To the President_:

The United States Tariff Commission respectfully submits the following report upon an investigation of the differences in costs of production of men's sewed straw hats in the United States and in competing foreign countries, for the purposes of section 315 of Title III of the tariff act of 1922.

INTRODUCTORY

_Reference to files._--The basic documents in connection with the investigation on men's sewed straw hats are in the files of the Tariff Commission and are available to the President. They include the transcripts of the public hearings and the original cost schedules and other data. These include confidential data, the disclosure of which is forbidden by section 708 of the revenue act of 1916:

SEC. 708. It shall be unlawful for any member of the United States Tariff Commission, or for any employee, agent, or clerk of said commission, or any other officer or employee of the United States, to divulge, or to make known in any manner whatever not provided for by law, to any person, the trade secrets or processes of any person, firm, copartnership, corporation, or association embraced in any examination or investigation conducted by said commission, or by order of said commission, or by order of any member thereof. * * *

_Rates of duty:_

Act of 1922--Not blocked or trimmed } 60 per cent. } Par. 1406. Blocked or trimmed } }

Act of 1913--Not blocked or trimmed } 25 per cent. } Par. 335. Blocked or trimmed } 40 per cent. }

Act of 1909--Not trimmed } 35 per cent. } Par. 422. Trimmed } 50 per cent. }

_History of the investigation._--On May 29, 1924, the commission ordered an investigation of men's sewed straw hats for the purposes of section 315 of Title III of the tariff act of 1922, and on the same date ordered a preliminary hearing for June 12, 1924.

An application was received from the National Association of Men's Straw Hat Manufacturers of America requesting an investigation looking toward an increase in the rate of duty on men's sewed straw hats, now dutiable at 60 per cent ad valorem under paragraph 1406 of the tariff act of 1922.

The domestic field work was carried on during the period August to October, 1924, and the foreign work in Italy and England during the period October, 1924, to February, 1925. After due notice, as prescribed by law, public hearings were held in the offices of the commission on June 12, 1924, and on May 4, 1925. The latter hearing was continued on May 14, 15, and 16, 1925. Oral argument was waived and the date for filing briefs was set for June 6, 1925.

_Scope of the investigation._--Costs of production were obtained for hats sold in the straw hat season of 1924 by companies whose fiscal years ended at or about June 30, 1924. This period was the latest for which cost data could be obtained at the time the investigation was made.

Domestic costs were obtained from 19 concerns in Maryland, New York, Connecticut, and Massachusetts. The total production of these concerns amounted to 718,265 dozen hats. Of this number, 553,253 dozen were men's sewed straw hats. The 19 concerns produce approximately 85 per cent of the men's sewed straw hats in the United States and include makers of cheap, medium, and high-priced hats. They include nonmembers as well as members of the national association.

Costs were obtained in Italy from five concerns and in England from three concerns exporting men's sewed straw hats to the United States.

Both domestic and foreign straw hat factories are characterized by lack of standardization in production. Variations exist in the quality of the hats manufactured by different establishments, because of variations in the type and quality of the braid, in the quality of the trimming materials, such as leather sweat and silk bands, and in the amount of hand labor employed in the finishing processes. Because of these variations, it was considered inadvisable to compare the average costs of production of all hats of the domestic concerns with the average of all foreign hats. Evidence submitted at the preliminary hearing and data in the possession of the commission indicated that competition between domestic and foreign straw hats centered chiefly on three types, split sennits of 13/15 millimeter braid, improved sennits of 16/18 millimeter braid, and flatfoot sennits of 16/18 millimeter braid. The commission's cost comparisons were therefore confined to hats of these specifications.

INFORMATION OBTAINED IN THE INVESTIGATION

From the commission's investigation of men's sewed straw hats, conducted as indicated above, the following information has been obtained:

DOMESTIC PRODUCTION

The manufacture of men's straw hats has been conducted on a commercial scale in the United States for upward of 50 years. The industry is centered in and around New York City, in a number of cities in Massachusetts and Connecticut, and in Baltimore, Md. Statistics of production of men's sewed straw hats are not available, since the census of manufactures does not distinguish between men's and women's hats nor between sewed hats and woven hats. Domestic manufacturers estimate that the value of the men's straw hats produced in 1914 was $12,000,000, or about 45 per cent of the total production of all straw hats. In 1920 the value of the total production of men's straw hats was estimated at $20,000,000, of which about $12,000,000 was men's sewed hats. At the preliminary hearing it was estimated that the average annual production of men's sewed straw hats in recent years amounted to 800,000 dozen. There are about 40 manufacturers of men's sewed straw hats in the United States. The majority are well established firms.

The production of men's sewed straw hats for the season 1923-24 of 19 factories for which costs were obtained was 553,253 dozen. The factories may be classified as follows:

TABLE 1.--_Domestic straw-hat factories grouped according to annual production_

_Kinds of hats produced._--There are two general types of men's straw hats produced by the domestic manufacturers:

(1) Woven hats, such as panamas, etc. The bodies of these hats are imported in the rough and are shaped, finished, and trimmed in this country.

(2) Sewed hats. All of the operations necessary in the manufacture of a sewed straw hat, with the exception of plaiting the braids, are performed in the United States. This investigation relates to sewed hats only.

_Organization of production._--The manufacture of straw hats is essentially a factory business and with few exceptions each concern carries on all of the major operations connected with the production of hats in a single establishment. Plaiting of straw braid is a separate industry, the domestic hat manufacturers being dependent upon foreign sources for their supply of braids. The bleaching of straw braids is performed by some of the hat manufacturers in their own establishments; others have the bleaching done by outside concerns which specialize in this class of work. Some firms make the tips (the inside linings of the hats) in their own establishments; others buy the complete tip, or have certain operations, such as printing or stamping, performed by outside shops.

_Labor conditions._--The hours of labor of employees in domestic straw hat factories in 1923-24 varied from 42 to 54 weekly. Wages are based both on piece and time work. Time wages ranged from $15 to $40 per week, according to the character of the work performed.

The production of straw hats is to some extent seasonal. Orders are received in the late summer for delivery in the following spring. Production on these orders begins in September and the factories are usually busiest in the early months of the year. The summer is a slack season and factories operate with reduced labor force or close altogether for several weeks. The following table shows the monthly variations in the total number of employees of 18 domestic factories in the season 1923-24:

TABLE 2.--_Employees in 18 domestic straw-hat factories, season of 1923-24_

+-----------++----------------+----------- | Number of || | Number of Month | employees || Month | employees ---------------+-----------++----------------+----------- 1923 | || 1924 | July | 1,116 || January | 3,331 August | 1,775 || February | 3,371 September | 2,542 || March | 3,403 October | 2,765 || April | 3,380 November | 3,221 || May | 3,117 December | 3,291 || June | 1,871 ---------------+-----------++----------------+-----------

IMPORTS

The quantities and values of sewed straw hats imported into the United States were not separately shown in official statistics prior to the tariff act of 1922, in which sewed straw hats were given a separate classification.

Table 3 shows the imports for consumption of sewed straw hats from the principal countries of origin, by months, for the calendar years 1923 and 1924. Total imports increased from 93,309 dozen in 1923, valued at $779,989, to 164,041 dozen in 1924, valued at $1,179,929, a gain of approximately 75 per cent in quantity and 50 per cent in value.

TABLE 3.--_Imports for consumption of men's sewed straw hats[1] from Italy, England, Germany, and other countries, by months, calendar years 1923 and 1924_

(Source: Foreign Commerce and Navigation of the United States)

+----------+----------+----------+----------+------------ | Italy | England | Germany | Other | Total | | | | countries| | | | | [2] | +----------+----------+----------+----------+------------ Month | 1923 | 1923 | 1923 | 1923 | 1923 -------------+----------+----------+----------+----------+------------ | _Number_ | _Number_ | _Number_ | _Number_ | _Number_ January | 51,225 | 9,734 | 2,460 | 26,606 | 90,025 February | 53,644 | 9,235 | 8 | 4,756 | 67,643 March | 54,102 | 55,920 | 7,420 | 51,305 | 168,747 April | 66,552 | 46,222 | 1,931 | 84,684 | 199,389 May | 78,602 | 68,989 | 80 | 31,888 | 179,559 June | 38,658 | 42,776 | 1,960 | 4,414 | 87,808 July | 23,049 | 6,717 | 848 | 11,685 | 42,299 August | 1,796 | 1,250 | 1,504 | 1,041 | 5,591 September | 120 | 960 | 1,272 | 102 | 2,474 October | 53,129 | 396 | 3,411 | 331 | 57,267 November | 77,962 | 2,718 | 8,929 | 7,524 | 97,133 December | 78,372 | 1,647 | 21,334 | 20,415 | 121,768 +----------+----------+----------+----------+------------ Total number | 577,211 | 246,584 | 51,157 | 244,751 | 1,119,703 Dozen | 48,101 | 20,549 | 4,263 | 20,396 | 93,309 +==========+==========+==========+==========+============ | | | | | Total Value | $289,215 | $256,769 | $32,503 | $201,502 | $779,989 | | | | | Average | | | | | value per | | | | | dozen | $6.01 | $12.50 | $7.62 | $9.88 | $8.36 +==========+==========+==========+==========+============ Per cent | | | | | of hats | | | | | imported | | | | | from each | | | | | country | 51.50 | 22.00 | 4.60 | 21.90 | 100.0 -------------+----------+----------+----------+----------+------------

+----------+----------+----------+----------+------------ | Italy | England | Germany | Other | Total | | | | countries| | | | | [2] | +----------+----------+----------+----------+------------ Month | 1924 | 1924 | 1924 | 1924 | 1924 -------------+----------+----------+----------+----------+------------ | _Number_ | _Number_ | _Number_ | _Number_ | _Number_ January | 35,754 | 50,087 | 19,829 | 34,754 | 140,424 February | 114,644 | 35,024 | 25,372 | 57,429 | 232,469 March | 97,899 | 46,435 | 50,126 | 40,669 | 235,129 April | 192,007 | 119,031 | 85,421 | 49,935 | 446,394 May | 113,593 | 54,874 | 85,884 | 34,047 | 288,398 June | 59,840 | 37,208 | 6,873 | 14,769 | 118,690 July | 22,505 | 1,533 | 720 | 41,367 | 66,125 August | 4,000 | 820 | 2,795 | 41,689 | 49,304 September | 427 | 706 | 7,377 | 10,550 | 19,060 October | 37,809 | 318 | 4,541 | 34,528 | 77,196 November | 82,313 | 2,640 | 959 | 44,471 | 130,383 December | 100,353 | 4,723 | 5,332 | 54,516 | 164,924 +----------+----------+----------+----------+------------ Total number | 861,144 | 353,399 | 295,229 | 458,724 | 1,968,496 Dozen | 71,762 | 29,450 | 24,602 | 38,227 | 164,041 +----------+----------+----------+----------+------------ | | | | | Total Value | $427,706 | $282,402 | $180,054 | $289,767 | $1,179,929 | | | | | Average | | | | | value per | | | | | dozen | $5.96 | $9.59 | $7.32 | $7.57 | $7.19 +==========+==========+==========+==========+============ Per cent | | | | | of hats | | | | | imported | | | | | from each | | | | | country | 43.75 | 17.95 | 15.00 | 23.30 | 100.00 -------------+----------+----------+----------+----------+------------ [1: Including men's, women's, and children's.] [2: Including withdrawals from warehouse.]

A comparison of the imports for the first four months of 1925 with those for the corresponding period in 1924 is shown in Table 4. A significant feature of this table is the increase in imports from Italy and the decrease of imports from both the United Kingdom and Germany. It should be noted also that the average foreign[a] value per dozen of Italian hats decreased while the average foreign[a] value of hats imported from England and other countries increased.

[Footnote a: Values upon which duties were assessed as computed from data given in Foreign Commerce and Navigation of the United States.]

TABLE 4.--_Imports for consumption of men's sewed straw hats[1] from Italy, United Kingdom, Germany, and other countries, by months, January-April, inclusive, 1924 and 1925._

(Source: Foreign Commerce and Navigation of the United States)

+----------+----------+----------+-----------+----------- | Italy | United | Germany | Other | Total | | Kingdom | | countries | | | | | [2] | +----------+----------+----------+-----------+----------- Month | 1924 | 1924 | 1924 | 1924 | 1924 ------------+----------+----------+----------+-----------+----------- | _Number_ | _Number_ | _Number_ | _Number_ | _Number_ January | 35,754 | 50,087 | 19,829 | 34,754 | 140,424 February | 114,644 | 35,024 | 25,372 | 57,429 | 232,469 March | 97,899 | 46,435 | 50,126 | 40,669 | 235,129 April | 192,007 | 119,031 | 85,421 | 49,935 | 446,394 +----------+----------+----------+-----------+----------- Total number| 440,304 | 250,577 | 180,748 | 182,787 | 1,054,416 Dozen | 36,692 | 20,882 | 15,062 | 15,232 | 87,868 +==========+==========+==========+===========+=========== | | | | | Total value | $228,452 | $201,291 | $102,366 | $123,775 | $655,884 | | | | | Average | | | | | value | | | | | per dozen | 6.23 | 9.64 | 6.80 | 8.13 | 7.46 +==========+==========+==========+===========+=========== Per cent | | | | | of hats | | | | | imported | | | | | from each | | | | | country | 41.76 | 23.76 | 17.14 | 17.34 | 100.00 ------------+----------+----------+----------+-----------+-----------