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The action taken under the state of facts that had been presented, furnishes a very strong reason why we object to the renewal of the Reciprocal Trade Agreement Act. The act does not pretend to lay down any basis to determine on what grounds concessions in duties may be made. It becomes very obvious that differences in cost of production of an article in the United States and those in competing foreign countries are not of any importance to the framer or framers of these acts. With the greatly increased costs of labor rates and the shortened hours of labor in the United States not comparable to the rates paid and the hours worked in any foreign country, naturally a producer in the United States must be greatly concerned if the tariff protection on the articles he produces is not sufficient to equalize the difference in cost of production. Carried to its natural conclusion most industries in this country dependent on protection, could be wiped out by trade-agreement reductions in duties.

I have not attempted to set forth all the reasons why we believe that our industry was entitled to a continuation of the rates established by the Hoover proclamation. What I have said should be sufficient to make it clear why we do not understand how a concession could have been justified on economic grounds. But the concession was made, and to this day we do not know how it was justified. Under the law we are not entitled to find out, and as you well know, we were not entitled to an appeal from the decision of the negotiators.

In the report of the House Ways and Means Committee on the renewal of the Reciprocal Trade Agreement Act, on page 7, it makes a comparison of window glass imported in 1931 and 1937, and also of domestic production in the same years. The report states, "In other words, the domestic producers in 1931 supplied 97.8 percent of a poor market and in 1937 a smaller percent (94.9 percent) of a much better market."

While there is some discrepancy between the import figures used in the report with the figures used in the data prepared by the statistician of the window glass industry, who fixed the ratio percentage of imports to industry shipments as 7.02 percent, which equals 92.98 percent of the industry shipments, the difference is of no great significance.

I should like to call your attention, gentlemen, to the fact that the increased importation cited in this majority report of the Ways and Means Committee took place prior to the effective date of the Czechoslovak trade agreement. Indeed, this sixfold increase in imports between 1931 and 1937 seemed to us to constitute a further justification for our position that a reduction in duty was not warranted. Certainly it is ample evidence that the duty in existence at that time did not deny foreign producers access to our shores and markets.

In the brief that we submitted in connection with the Czechoslovak agreement, there was included a composite analysis of costs of production and a composite summary of the yearly profit and loss for seven companies in the industries. I quote from the brief:

The production of these companies represents approximately 75 percent of the production of the industry. The striking feature of this record is the unprofitableness of the industry for the years 1932-35, inclusive, and the literally infinitesimal profit reported for 1936.

The CHAIRMAN. Let me ask you, Mr. Monro, when did the Czechoslovakian agreement go into effect?

Mr. MONRO. The 16th of April 1938.

The CHAIRMAN. The imports in 1937 before the agreement

Mr. MONRO (interposing). They were about 790,000 boxes, com

puted on a 50-foot single-strength basis.

The CHAIRMAN. I get them as $1,238,000.

Mr. MONRO. We compute them in the industry on the basis of the weight of the glass and reduce it all to a single strength basis so that we are comparing on the same basis.

The CHAIRMAN. I get it in 1937 in dollars as $1,238,000 of imports, and under the Czechoslovakian agreement in 1938 it was $653,000. The Czeckoslovakian agreement now, of course, is suspended.

Mr. MONRO. In our figures, we have the imports in 58 pounds to the box units. In 1937 it was 794,066 boxes, or the ratio of domestic shipments was 7.02; while in 1938 they dropped to 409,604 boxes, or 4.96 percent.

May I call your attention to the fact that the domestic shipments in 1937 aggregated 11,321,915 boxes, while in 1938 they dropped to 8,250,000 boxes, so that the imports do bear a certain relation to the general volume of business.

The CHAIRMAN. In the Czechoslovakian agreement, there were some rates reduced.

Mr. MONRO. All rates, Mr. Chairman, were reduced 30 percent right straight down the line.

The CHAIRMAN. But still, those figures to which they were reduced in the Czechoslovakian agreement were above the rates fixed on glass in 1922 in the Fordney-McCumber Act.

Mr. MONRO. Slightly below the Fordney-McCumber Act, sir; but they were 471⁄2 percent below the rate fixed in the Hawley-Smoot bill.

The CHAIRMAN. But in the Belgian agreement, were they fixed at that much below the Smoot-Hawley Act?

Mr. MONRO. No change was made under the Belgian reciprocal trade treaty in the duty on window glass, because the industry had taken a 25 percent reduction under the Hoover proclamation on the rates provided in the Hawley-Smoot bill.

The CHAIRMAN. Does your organization sell in competition with Libbey-Owens-Ford?

Mr. MONRO. Yes, sir.

The CHAIRMAN. I notice in a very recent news item that the Libbey-Owens-Ford people in their report showed the highest quarterly profit in its history, $4,160,000, and I notice in the paper of March 2, in speaking of reports on the glass industry, it says:

The seasonal dip in glass activity continued during the week according to the current issue of the American Glass Review. The weather experience in so many States this year has been a definite factor in curbing the demand for glass. However, shipments of glass for laminating purposes have increased along with the rise in automobile plant activity. Window-glass producers still expect a big production this year.

Mr. MONRO. There is the nub of your whole situation on that, and you ask me for an explanation?

The explanation, Mr. Chairman, is this, that the profit was not made in window glass. That profit was made in safety glass. For your information, may I say that the Pittsburgh Plate Glass and the Libbey-Owens market over 90 percent of all of the safety glass that is used in this country. The Pittsburgh Plate sells every bit of safety glass that the Chrysler Motor Co. uses. The Libbey-Owens Co. sells every bit of safety glass and any other glass that the General Motors Co. uses. The Ford Motor Co. makes its own safety glass by buying the window glass in the open market, and you gentlemen are imposed upon by the publication of those figures. So many times we are asked to explain "How do you explain those large profits?"

Well, they do not have to separate their profits on the window glass and on the plate glass and on safety glass.

Take Libbey-Owens, for example; they make different kinds of building glass, and tile. The Pittsburgh Plate is also in the production of window glass, plate glass, paints, chemicals, tile, and all sorts of products of that kind. So that it hits us poor ignoramuses who can only make window glass rather hard to have to reconcile our poor showing with those big profits of those companies, because they are foxy enough to keep up the price on safety glass to a very profitable figure.

My own company does make some safety glass, but these big automobile companies have been very hesitant about dealing with a small factory.

The CHAIRMAN. Mr. Biggers, who is the head of the Libbey-Owens people, takes a different viewpoint from you, doesn't he?

Mr. MONRO. I don't think so.

The CHAIRMAN. He was a member of the advisory council with reference to this matter, and he with a great number of others—I think that is in the record-said that these reciprocal-trade treaties had been a benefit and asked for a continuation of them.

Mr. MONRO. I do not understand that policy on the part of Mr. Biggers, because as the president of the Association of Window Glass Manufacturers, I was authorized to present opposition to any change at that time in the Belgian agreement, and when I presented the argument against the reciprocal trade treaties to Czechoslovakia, the Libbey-Owens-Ford Co. was also one of the eight companies that I represented at that time. Maybe Mr. Biggers changed his mind after he got into public life.

The CHAIRMAN. I don't know about that, but I notice on page 172 of the House hearings that the business advisory council of the Department of Commerce to which he was appointed, and he was the vice chairman, that John D. Biggers, president of Libby-OwensFord Glass Co. -that is the gentleman, isn't it?

Mr. MONRO. Yes; I know him very well.

The CHAIRMAN. He advocated that. He said among other things: The council wishes to emphasize the belief that the results of trade agreements must be regarded in the light of their effect on our national economy as a whole and not solely in the light of their effect on a given segment of the industries or agriculture.

Mr. MONRO. Can you reconcile it that I was authorized to appear in opposing the Czechoslovakian agreement on behalf of Mr. Biggers' company, and the Pittsburgh Plate Glass Co., the American Window Glass Co., and other companies? It may be that they are so big that the right hand doesn't know what the left hand is doing.

Senator LAFOLLETTE. Did the dissolution of the association in the industry have anything to do with your view with regard to reciprocal trade agreements?

Mr. MONRO. Not at all.

Senator GUFFEY. Has the glass industry ever advocated a lowering of the tariff in any part of the industry?

Mr. MONRO. No, not that I know of, because our costs of production are all higher than in any other glass-producing country in the world. The cost of our raw materials is a whole lot higher, and the labor is incomparable. We are paying today 64 cents an hour for common labor, while the last report of my engineer in Belgium, who up until a few years ago was general manager of the Belgian syndicate plants, gave me the rate of common labor at 14% cents per hour there. Senator GUFFEY. Will you file here the record of the profits of your

company for the last 10 years?

Mr. MONRO. I have them here. I am not very proud of it. Senator GUFFEY. Haven't we improved the product in this country? Mr. MONRO. Yes.

Senator GUFFEY. And if I remember rightly, I think the American Window Glass Co. is making the best?

Mr. MONRO. It may interest you, gentlemen, to know that the American Window Glass Co. introduced the first improvement in the process of making window glass, and that was in 1903, when we introduced a mechanical process of blowing window-glass cylinders. Formerly they were blown, as I understand, by hand for over 350 years, and the average size which was blown was about 12 inches in diameter and about 7 feet long. Sometimes we had what they call 90-inch blowers, who could blow a narrow cylinder 90 inches long. When the American Window Glass Co.'s process was at its height, we were drawing cylinders that were 33 inches in diameter and 500 inches long, and one man would manipulate three or four, and sometimes five machines, himself. That illustrates some of the progress. Since then-beginning about 1927-since then the entire industry throughout the world has changed. There is no more hand blowing except here and there on a small furnace for a particular kind of glass. All window glass made in the world today, I am safe in making the statement, is made in what we call the sheet-drawn process. There are three-the Libbey-Owens process, and they draw the glass from the bath in sheet form to a height of about 3 feet, and then bend it over a roll and send it across flattening tables of rollers and right out through a long lehr 200 feet long.

In the Fourcault process, which we are using, and which is in more general use than the Libbey-Owens, because the Libbey-Owens is a patented process and in the Fourcault process, the patents have expired, we draw a continuous sheet from the bath of glass vertically. and we cut the glass right off up above after passing through an annealing oven, which of course is necessary, but the height at which we cut the glass off above the bath and still have the glass annealed is only about 25 feet.

The Pittsburgh Plate Co. is using a similar process, but instead of drawing their glass through a slot which we use to hold it out to the required width, because if you draw without a slot the glass will pull in toward the center, they invented a submerged floater which has the effect of overcoming the surface tension which causes the glass to pull in to the center, and the Pittsburgh Plate draws from this submerged floater, and their glass is cut off above the same as in the Fourcault process. The Fourcault process is used in all of the countries of the world except a few furnaces-the Pilkington Bros. in England are using in the majority of their furnaces on window glass the Pittsburgh Plate process. There are a few others-I think France has one furnace using the Pittsburgh Plate process. I am not sure whether Belgium has one furnace using the Pittsburgh Plate process. Japan also has one furnace using the Libbey-Owens process. Germany has a Libbey-Owens process, Belgium has a Libbey-Owens process, and France has a Libbey-Owens process, and all the other factories are using this Fourcault process. The Japs are using the Fourcault, the Libbey-Owens, and the Pittsburgh process.

Senator GUFFEY. How did they get them?

Mr. MONRO. They did not need a license under the Fourcault, but they made a deal with the Pittsburgh Plate Glass and Libbey-Owens for a license.

Senator GUFFEY. Is there any cylinder glass blown at all, Mr. Monro?

Mr. MONRO. No; excepting perhaps in Germany, where they blow colored glass.

Senator CLARK. The Pittsburgh Co. and Libbey-Owens are building up their own competitors, aren't they, by giving those licenses?

Mr. MONRO. They do not ship any glass over here. They protect themselves by an agreement that none of the glass produced on their machine will be shipped into the United States.

Senator DAVIS. You have given us the difference in the wages between Belgium and the United States. What is the difference in wages between Japan and the United States?

Mr. MONRO. Mr. Biggers, when he returned from Japan a few years ago, made the statement that the average rate of wages paid in Japan in the glass industry was-and he did not single out window glass but he took window glass and plate and made it just for the glass industry was 40 cents a day, which was lower than the price that we were paying by the hour.

Senator DAVIS. You are paying 60 cents an hour?

Mr. MONRO. We are now paying 64 cents an hour since the 1st of February. Prior to the 1st of February we were paying 58 cents an hour. At the time the Smoot-Hawley bill was passed, we were paying 35 cents an hour.

Senator Davis. There is a great hullaballoo around here that the depression was caused by the Hawley-Smoot Act. Did the depression in your industry begin with the passing of the Hawley-Smoot Act? Mr. MONRO. The depression in the window-glass industry began before the passage of the Hawley-Smoot Act.

The CHAIRMAN. Has it kept up ever since?

Mr. MONRO. Not continuously, Senator, but it may interest you to know that in 1931 the shipments of domestic glass were 5,190,000 boxes; in 1932 it was 4,398,000 boxes; in 1933 it was 5,600,000 boxes; in 1934 it was 7,954,000 boxes; in 1935 it was 9,197,000 boxes; in 1936 it was 9,736,000 boxes; in 1937 it was 11,321,000 boxes. You know, there was a revival in business in 1937 and everybody thought that we were going to pull ourselves out of the soup. It fell back again in 1938 by the window glass dropping to 8,250,000 boxes. Again it picked up in 1939 and we reached the total of 11,285,000 boxes. That is the history of the shipments of window glass following the HawleySmoot bill.

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