horse power. Practically all of this water power was developed at prewar prices, and is being utilized under long term prewar contracts, which have not changed. These prewar contracts were made at as low as $6. and most of them at less than $8 per horse power year. If the contracts for this horse power call for payment in kronen, under the present rate of exchange the cost per horse-power year would be still further reduced. Owing to the tremendous fall of water, amounting to successive drops of many hundreds of feet, as above stated, and to the natural storage accumulations of the lakes on the plateau, no great dams are needed, and short transmitting lines are available, so that water power can continue to be developed in Norway as in Sweden at a very low cost. Swedish power rates.-Reference is here made to the Swedish Government report on water-power resources of Sweden, published at Stockholm in 1919. Here we find the minimum total available horsepower of Sweden to be 4,432,000 horsepower, the maximum to be over 6,000,000 horsepower, and that there was already developed in 1911 (that is, prior to the World War) 1,105,000 horsepower. The average income per horsepower year from the three Government plants in Sweden was $7.32, which, at the present rate of exchange, payment in kronen, is equivalent to $5.27 per horsepower year. Canadian water-power rates.-We refer again to the United States Tariff Commission for data on the above, as their engineers have made a thorough and exhaustive study, as set forth in their Tariff Information Survey on the Ferro-Alloy Industry, published in 1921, page 89: "At Shawinigan Falls, Quebec, where the Canadian Ferro-Alloy Co. was established, power rates are also lower than in the United States. The Shawinigan Water & Power Co., supplying power in that part of Canada, advertised rates of $15 and $16 per horsepower year in 1919.” The existing industries at Shawinigan Falls will enjoy the use of several hundred thousand hydroelectric horsepower as developed, and these industries are being built up as a part of the power development itself, so that the profit will be in the power company for which the electric furnace division makes a market. French power rates.-Reference is made to the report of the commission on French water power. France has, according to this report, 9,000,000 potential horsepower, of which 1,165,000 horsepower is already developed. At the present rate of exchange the prices per horsepower year for prewar developments aggregate 750,000 horsepower, which is at the rate of $6.30 to $7.90 per horsepower year. Figures regarding other countries will be on a somewhat similar basis. COMPARISON WITH AMERICAN POWER RATES. It is therefore clear that with American prewar hydroelectric power rates running from $20 to $40 per horsepower year, and an advanced cost of power production, caused by the advance in all commodities during the war, the American manufacturer having existing plants is in serious competitive difficulties; and the development or expansion of these plants-requiring new power at higher rates-will increase these difficulties. Most American water powers are subject to great seasonal fluctuations. The great water powers are several hundred miles from the eastern coast, and the vast percentage of undeveloped water powers is in the Pacific coast section, whereas consumption of ferro-alloys is destined always to be in the East. POWER RATES AN IMPORTANT FACTOR IN COST OF PRODUCTION. Using ferrosilicon as an illustration, and speaking only of the 50 per cent grade (because the higher grades require a great deal more electrical energy for their production), 1 ton of ferrosilicon requires approximately 1 horsepower working a full year for its production. As a mere illustration, it may be said that if the difference in water power cost for the manufacturer of ferrosilicon, between a European country and the United States, is $15 per horsepower year, then, in water power alone, the difference would anrount to $15 per ton, which on a 20,000-ton plant would give the European manufacturer $300,000 a year the advantage of the American. This illustration might be carried into the other alloys, as is obvious. WAGES HIGHER IN THE UNITED STATES THAN ABROAD. The great difference in wages here and abroad runs parallel with the foreign advantage in water power cost, and is now greatly accentuated by the present value of the dollar in comparison with the kronen, franc, mark, lira, and pound. The average wage cost of those employees directly engaged in the production of ferroalloys in the largest plant in this country, covering more than 1,000 persons, averaged above 68 cents per hour, or a little above $5 per day, or over $30 per week for an 8-hour day, in November. 1920. This compares with the wages of all factory workers in the State of New York, as reported by the New York State Industrial Commission for the month of November, 1910. which averaged a little above $28 per week. The difference per week was accounted for by the larger percentages of skilled employees necessary for ferroalloy production. In Europe, while wages in this industry are higher than in many others, they are much lower than as shown above for America. Compare the tabulation below with our scale of $30 per week: Norway. Per week. Per week. $12.96 4.40 In the manufacture of ferrosilicon the producers usually quarry their own silicon rock and purchase scrap steel. coal, and coke-all produced under the tariff protective conditions on the American scale of wages. Not only labor cost but the great difference in water power cost must be considered. American producers must also pay railroad freights for long d'stances, as against water rates abroad--especially in the case of Norway and Sweden. America's vast resources of water power will not be developed within this or the next generation, unless the heavy electric furnace industr es ut l'zing great quantities of water power are permitted to survive as a basis for the utilization of these powers when developed. FOREIGN SITUATION. For Ferro-alloys are produced in Canada, France, Germany, Japan, Italy, Sw ́tzerland, Austria, Norway, and Sweden. England exports a large quantity of ferrochrome and produces low-grade ferrosilicon. Canada is a large producer of ferrosilicon, while its yearly home consumption is but about 3,000 or 4.000 tons, or less than 10 per cent of its reported producing capacity, and large quantit es have been and are being imported into the United States from that country. The ferro-alloy capacity of the United States increased during the war, but for years has been great enough to take care of our country's needs. Our ferro-alloy production capacity exceeds the domestic consumption. eign productive capacity is largely in excess of foreign consumption, the excess of production capacity in Canada alone over and above Canadian consumption being estimated at 46,000 tons of ferrosilicon per annum, and the entire ferroalloy industry in the United States is threatened with irretrievable loss unless a fair and adequate tariff is enacted. Norway and Sweden, as shown above, are great producers but small users of alloys, and they as well as Germany have in the last few months been competing for the European market. Offerings from Scandinavia are already being made here at less than our cost of production, and what is more significant, Germany has again entered the field, and has recently undersold the Scandinavian makers of electric furnace ferrosil con. CONCLUSION. As large manufacturers of ferrosilicon and ferrochrome, together with smaller quantities of various other valuable alloys, the Electro Metallurgical Co. has brought its plants to the highest state of the art and has conducted continuous and successful research, developing new uses for the existing alloys and discovering new alloys which are finding a market in the production of special steels and other metals of great and growing importance. The skill and knowledge resulting from this research proved of great benefit to our country and the steel industry was peculiarly dependent upon this company at a time when the production of sound and special steels was vital to the conduct of the war. Our products in the market have met an extremely serious competition, the basis of which has been outlined above. The facts in the case are a matter of official record, and there is no disputing the situation which confronts the industry to-day. In view of the greatly increased European productive capacity, the rapidly returning normal ocean freight rates, the permanent difference in labor and water-power costs, and the syndicate operations reported now reestablished in European countries, this company, in asking for a duty which will equal the difference in cost between the United States and European producers, knows it is well justified. It desires to call attention to the fact that American labor conditions can not be brought down to the European standard, and unless the industry is so protected, production of these highly important alloys will cease in this country and the business will go to the foreign manufacturers. The ferro-alloy industry being highly technical, and vital not only to the in dustrial progress of our country, but of extreme importance for its defense, believes that the necessity for its continuance in the United States is obvious. N. PETINOT, REPRESENTING THE UNITED STATES FERRO ALLOYS CORPORATION, NEW YORK CITY. Mr. PETINOT. N. Petinot, United States Ferro Alloys Corporation, New York, N. Y. Mr. Chairman and gentlemen of the committee, while I am an American citizen, I will ask your kind indulgence for my French accent, and in case I do not make myself clearly understood, please do not hesitate to ask me to repeat. I will refrain from repeating what my competitors have already mentioned, and as I have had some experience in the manufacture of ferroalloys, mostly ferrosilicon, and ferrochrome in France, Switzerland, Canada, and the United States, I will be glad to answer any of your questions with the best of my ability. I will state, however, that I claim that ferrotungstens can be made only in the electric furnaces, which does not apply to ferro, which is an ordinary product of the blast furnace. Mr. GREEN. Ferrosilicon can be made only in electrolytic furnaces? Mr. PETINOT. Yes; high-grade ferrosilicon is only made in the electric furnaces. Mr. TIMBERLAKE. Did you state that you had engaged in this business in France? Mr. PETINOT. Yes, sir; for some 22 years. Mr. TIMBERLAKE. When did you come to this country? Mr. PETINOT. Twelve years ago. Mr. TIMBERLAKE. What has been your experience here? Mr. PETINOT. I came to this country and established a plant on the Pacific coast. The project over there has been abandoned because of the high price for power, as the power company found it was more remunerative to send their power to San Francisco, where it could be sold at a high price. My second experience was to establish a plant for the purpose of making steel by the electric-furnace process. Then I started a plant at Niagara Falls, which was the first to be successful in making ferrotungsten ferrotitanum only in this country. Mr. TIMBERLAKE. What can you say with reference to the labor costs in France as compared with the prices of labor in this country? Mr. PETINOT. From 1900 to 1907 labor used for electric-furnace works were paid 3.50 francs for 12 hours. In figuring the dollar worth 5 francs, it would mean 70 cents for 12 hours, or a little under 6 cents an hour. From 1907 to 1914 the same class of labor was raised gradually to 5 francs per day of 12 hours each, or $1 per day, still figuring at the rate of 5 francs on the dollar, about 8 cents per hour. Since the armistice the labor cost has been considerably raised, also the 8-hour shift has been introduced, and the rate as communicated to me in December, 1920, was averaging from 4 to 5 francs per hour. Taking into consideration the present value of 6 cents per franc, the French electric-furnace labor is getting the equivalent of 24 to 30 cents per hour. In the United States and for the similar period we were paying labor the following prices: From 1900 to 1907, United States, 20 cents an hour, France, 6 cents, or an increase in the United States of 330 per cent; from 1907 to 1914, United States 28 cents, France 8 cents, or an increase for the United States of 350 per cent. The average for 1920 was the United States 60 cents, France 23 cents, or about 250 per cent increase. In Canada the same class of labor has been paid 10 to 15 cents less per hour than in the United States, or 15 to 20 per cent less. Mr. GREEN. What does ferrosilicon sell for now? Mr. PETINOT. Ferrosilicon sells for $85 to $95. Mr. GREEN. Where are your plants in France located? Mr. PETINOT. They are located at Savoie, Haute-Savoie-Isere. At the present time power can be produced very cheaply, because we have high falls which are artificially created, two to three hundred feet. In the present development of that power we do not have any power companies selling power to individual consumers. They can not find a market for their power over there without having very long and costly transmission lines, so the power companies have to find some way of utilizing their electric power right near the power plants. Our power companies over there are so constituted that in the same building you have the power house and you have on the other side of the wall the furnace room. They are then satisfied with the price we can get for their power, because if we did not use it for this purpose the power would be wasted, and they would not know what to do with it. Mr. GREEN. I do not quite understand that in view of the fact that in this country we transmit electric power for several hundred miles. Mr. PETINOT. Over there, with the exception of five or six large towns, electric lights are something you will not see in homes anywhere. Now, take, for instance, in the Department of Savoie, at Montiers, we have that water power there, and so we wanted to try to do something with it, so we were manufacturing ferro-alloys and exporting them to this country. Now, the next near-by town, which is 2 miles away, has only 3,000 people, and for lighting and electric-power purposes they have a motor and a turbine of 50 horsepower. Mr. GREEN. You use it for manufacturing? Mr. PETINOT. No manufacturing. Mr. GREEN. Can't you transmit the power? Mr. PETINOT. We are too far away back in the mountains, as already stated. Mr. GREEN. Well, our distances are so much greater here that it does not seem that you could not transmit this electricity to the cities. I am taking up the time of the committee on that, though. In all events you have cheap power where you use it? Mr. PETINOT. Yes; we have the cheapest power. The power over there, on the average, is something like seven and a half per kwh-I will say from $5 to $6-per horsepower per year. Mr. TIMBERLAKE. I would like to ask a question. I have understood that the French control or establish the price of these ferroalloys. Can you tell us anything with reference to that? Mr. PETINOT. Certainly. At the present time mostly all the products of the electric furnaces as ferro-alloys are handled by a French compton, with general offices in Paris. I think that the correct translation of compton is syndicate, or rather trust, and usually the direct inquiries for the products are referred to the French comptoir. Mr. TIMBERLAKE. Do you know whether or not that association or syndicate is represented in the United States? Mr. PETINOT. Yes, sir; an agent of this French firm is located in New York. His name is Jules Cablat, in New York. They advertise in the trade papers "French ferro-alloys, exclusive seller for North America; stock in warehouse in New York. Send us your specifications." Mr. HULL. The witnesses who have been appearing here have been speaking of the daily wages paid in France and other countries. Mr. PETINOT. Yes, sir. Mr. HULL. As a basis for measuring the different costs of produc tion-and there have been a great many gentlemen who have appeared here who have referred to that, but they do not say anything about the difference in overhead charges or the different output per man per day or the difference in improved machinery and those other factors. Now, here is one thing that I want to refer to, and something which has been reported in the trade papers. Here is a clipping from a paper with regard to the salary difference. An American laborer gets $4.50 a day, while a Japanese laborer gets 40 cents in foundries. Yet the American laborer can set up 60 boxes daily, while the latter, with a helper, can set up only 4. So the efficiency of the American industry in all of the essential factors is able to turn out a product cheaper than the Japanese do. We find a great many of these things. That would give us a much better basis if you consider all these factors I have referred to in connection with the amount of wages paid to the workmen. Mr. PETINOT. Well, sir, with regard to the ferro-alloys Mr. HULL (interposing). Do you refer to that condition, with regard to the amount which is paid the French laborer? Mr. PETINOT. Well, I want to mention to you that the industry, the ferro-alloy industry, was started in France about the same time that it was started in this country, and we have been keeping our overhead in the same ratio as in this country. 31700-21-PT II- -3 |