Men\'s Sewed Straw Hats
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United States Tariff Commission >> Men\'s Sewed Straw Hats
TABLE 5.--_Imports at the port of New York of men's sewed straw hats
from Italy[1] classified according to foreign value, including packing
January-June, 1924_
[In dozens]
----------------+-------------------------+-------------------------
| Sennits[2] | Fancies[3]
Value +-------+---------+-------+-------+---------+-------
|Trimmed|Untrimmed| Total |Trimmed|Untrimmed| Total
----------------+-------+---------+-------+-------+---------+-------
$2.99 and less | | 18 | 18 | | 60 | 60
$3.00-$3.49 | 6 | 38 | 44 | | 219 | 219
$3.50-$3.99 | 255 | 23 | 278 | 1 | 250 | 251
$4.00-$4.49 | 2,518 | 28 | 2,546 | 196 | 2,909 | 3,105
$4.50-$4.99 | 1,617 | 24 | 1,641 | 61 | 477 | 538
$5.00-$5.49 | 1,671 | 4 | 1,675 | 427 | 711 | 1,138
$5.50-$5.99 | 1,687 | 1 | 1,688 | 608 | 89 | 697
$6.00-$6.49 | 1,313 | | 1,313 | 2,831 | 182 | 3,013
$6.50-$6.99 | 2,657 | 1 | 2,658 | 2,537 | 33 | 2,570
$7.00-$7.49 | 740 | | 740 | 996 | 15 | 1,011
$7.50-$7.99 | 255 | | 255 | 939 | 3 | 942
$8.00-$8.49 | 147 | | 147 | 470 | 6 | 476
$8.50-$8.99 | 165 | | 165 | 261 | 5 | 266
$9.00-$9.49 | 10 | | 10 | 165 | 1 | 166
$9.50-$9.99 | 30 | | 30 | 107 | | 107
$10.00-$10.49 | 39 | | 39 | 56 | 1 | 57
$10.50-$10.99 | 46 | | 46 | 34 | | 34
$11.00 and over | 63 | 3 | 66 | 10 | 12 | 22
+-------+---------+-------+-------+---------+-------
Total |13,219 | 140 |13,359 | 9,699 | 4,973 |14,672
----------------+-------+---------+-------+-------+---------+-------
[In dozens]
----------------+-------------------------+-------------------------
| Miscellaneous[4] | Grand total
Value +-------+---------+-------+-------+---------+-------
|Trimmed|Untrimmed| Total |Trimmed|Untrimmed| Total
----------------+-------+---------+-------+-------+---------+-------
$2.99 and less | | | | | 78 | 78
$3.00-$3.49 | 50 | | 50 | 56 | 257 | 313
$3.50-$3.99 | 570 | | 570 | 826 | 273 | 1,099
$4.00-$4.49 | 622 | | 622 | 3,336 | 2,937 | 6,273
$4.50-$4.99 | 680 | | 680 | 2,358 | 501 | 2,859
$5.00-$5.49 | 1,715 | | 1,715 | 3,813 | 715 | 4,528
$5.50-$5.99 | 1,095 | 58 | 1,153 | 3,390 | 148 | 3,538
$6.00-$6.49 | 1,826 | 10 | 1,836 | 5,970 | 192 | 6,162
$6.50-$6.99 | 879 | 1 | 880 | 6,073 | 35 | 6,108
$7.00-$7.49 | 433 | | 433 | 2,169 | 15 | 2,184
$7.50-$7.99 | 346 | 17 | 363 | 1,540 | 20 | 1,560
$8.00-$8.49 | 598 | | 598 | 1,215 | 6 | 1,221
$8.50-$8.99 | 231 | | 231 | 657 | 5 | 662
$9.00-$9.49 | 420 | | 420 | 595 | 1 | 596
$9.50-$9.99 | 46 | | 46 | 183 | | 183
$10.00-$10.49 | 203 | | 203 | 298 | 1 | 299
$10.50-$10.99 | 56 | | 56 | 136 | | 136
$11.00 and over | 527 | 1 | 528 | 600 | 16 | 616
+-------+---------+-------+-------+---------+-------
Total |10,297 | 87 |10,384 |33,215 | 5,200 |38,415
----------------+-------+---------+-------+-------+---------+-------
[1: Taken from original invoices. Fractional dozen omitted in this
table.]
[2: Split, improved, and flatfoot.]
[3: Fancy straw and sennit, fancy.]
[4: Including hats the type of which is not specified in the invoice.
Probably many sennits and fancies.]
In Table 5, imports of Italian hats at the port of New York in the six
months January-June, 1924, have been classified according to foreign
values shown on consular invoices. There is a marked concentration of
imports in the value groups between $4 and $7 per dozen. About 90 per
cent of all the sennit hats and 80 per cent of the total importations
had foreign values of less than $7 per dozen.
TABLE 6.--_Percentage of men's sewed straw hats imported at the port
of New York from Italy with a foreign value less than that specified,
January-June_, 1924
--------------+------------+------------+------------------+-----------
Foreign value | Sennits[1] | Fancies[2] | Miscellaneous[3] | Total
less than-- | | | |
--------------+------------+------------+------------------+-----------
| _Per cent_ | _Per cent_ | _Per cent_ | _Per cent_
$9.50 | 98.6 | 98.5 | 92.0 | 96.8
$9.00 | 98.6 | 97.4 | 87.9 | 95.2
$8.50 | 97.3 | 95.6 | 85.7 | 93.5
$8.00 | 91.2 | 92.3 | 79.9 | 90.3
$7.50 | 94.3 | 85.9 | 76.4 | 86.3
$7.00 | 88.8 | 79.0 | 72.3 | 80.6
$6.50 | 68.9 | 61.5 | 63.8 | 64.7
$6.00 | 9.1 | 40.9 | 46.1 | 48.6
$5.50 | 46.4 | 36.2 | 35.0 | 39.4
$5.00 | 33.9 | 28.4 | 18.5 | 27.6
$4.50 | 21.6 | 24.8 | 12.0 | 20.2
--------------+------------+------------+------------------+-----------
[1: Split, improved, and flatfoot.]
[2: Fancy straw and sennit, fancy.]
[3: Including hats the type of which is not specified in the invoice.]
The imports at the port of New York of hats from England are classified
in Table 7. It is evident that the bulk of the English importations are
not competitive with Italian hats. Only 28 per cent of the imports from
England had a foreign value of less than $7 per dozen.
TABLE 7.--_Imports at the port of New York of men's sewed straw hats
from England,[1] classified according to foreign value, including
packing, January-June_, 1924
------------------+---------
Foreign value | Dozen
------------------+---------
$6.50-$6.99 | 2,631
$7.00-$7.49 | ...
$7.50-$7.99 | ...
$8.00-$8.49 | ...
$8.50-$8.99 | 3,340
$9.00-$9.49 | 1,260
$9.50-$9.99 | 1,044
$10.00-$10.49 | 98
$10.50-$10.99 | ...
$11.00 and up | 948
| =====
Total | 9,521
------------------+---------
[1: These data cover 9,521 dozen hats out of a total of approximately
10,730 dozen imported from England, or 89 per cent. They represent
the larger invoices (several over 1,000 dozen) and hence are not
so evenly distributed as are the Italian hats.]
_Effect of imports._--The effect of the increasing imports of straw
hats on the production and sales of domestic firms was discussed at the
public hearings before the Tariff Commission. Evidence was introduced
showing that the production of 19 factories decreased from 468,424 dozen
in the eight months August, 1923, to March, 1924, to 391,189 dozen in
the corresponding months of 1924-25. Seventeen firms showed decreased
production and two firms reported increases. Meanwhile imports of
foreign hats increased from 74,355 dozen to 102,450 dozen. Imports
from Italy increased from 38,000 dozen to 70,000; imports from England
decreased from 12,000 dozen to 9,000. Representatives of several
domestic firms stated that their losses of business were directly
attributable to inability to meet prices quoted by importers of Italian
hats.[1]
[Footnote 1: See Transcript of Public Hearings, May 16, 1925, pp. 408,
420.]
Representatives of the importers, on the other hand, called attention
to the increasing competition of small firms in and around New York
City with larger and longer established firms located principally in
Baltimore. Some of the new firms operate on small capital and specialize
in cheap hats which are directly competitive with the cheapest Italian
hats. Others produce a somewhat better hat, such as is sold by chain
stores. The rate of business failure among the newer firms is unusually
high. Although the membership of the group of producers of cheap hats
is fluctuating, its total output of hats each year is a factor in the
competitive situation.
A relatively new development in the distribution of straw hats is the
chain stores. Sales of such stores, estimated at 150,000 to 200,000
dozen straw hats yearly, include Italian and English hats but are
principally of domestic manufacture. In some cases a chain-store
organization has established factories and thus has instituted direct
competition with manufacturing firms already established. Chain stores
also have furnished capital to small manufacturers, contracting for the
bulk of their output. Thus the change in marketing methods has a bearing
on the failure of the older establishments to keep pace in the volume of
their sales with the national expansion in straw hat consumption.
PRINCIPAL COMPETING COUNTRY
Table 3, on page 4, shows that in the calendar year 1923 imports of
sewed straw hats from Italy amounted to 48,101 dozen, or 51 per cent
of total imports. The average value per dozen of these Italian hats was
$6.01. During this same period imports from England amounted to 20,549
dozen or 22 per cent of total imports, at an average value of $12.50
per dozen.
During the calendar year 1924 imports from Italy amounted to 71,762
dozen, or 44 per cent of the total, at an average value of $5.96 per
dozen. Imports from England were 29,450 dozen, or approximately 18 per
cent of the total, at an average value of $9.59. 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 quantitative gain of approximately 75 per cent.
The latest available import data covering the months of January-April,
1925, are shown in Table 4, on page 5. For these four months imports
from Italy amounted to 72,449 dozen, or about 76 per cent of the total,
and the average value of Italian hats imported declined from $6.23 per
dozen, on the comparable four months' period in 1924, to $5.46 per dozen
in 1925. Imports from the United Kingdom for this same period were
12,353 dozen, or about 13 per cent of the total, and it should be noted
that the average value increased from $9.64 to $13.07 per dozen.
Italy, is, therefore, for the purposes of section 315, the principal
competing country.
FOREIGN PRODUCTION
The center of production in Italy is Signa, near Florence. It was
estimated (1924) that 1,500 persons were employed in the Signa district
in establishments producing men's straw hats. The employees were about
evenly divided between men and women.
In England the principal centers of straw-hat production are St. Albans
and Luton, towns near London. No estimate was obtained of the number
of factories in operation, the volume of production, or the number of
persons employed. The English manufacturers of men's straw hats in
1923-24 were suffering a business depression, and some of them were
changing over to the manufacture of women's hats.
_Types of hats produced in foreign factories._--Neither the English nor
the Italian factories producing men's straw hats confine their business
exclusively to men's sewed straw hats. Some of them also block and trim
woven-hat bodies, such as panamas; some make women's and children's
hats, and others produce, or deal in, felt hats. Nor is production of
sewed straw hats confined to those made of sennit braids; hats are made
of other braids as well.
_Organization of foreign production._--The sennit braids used in the
Italian straw hats exported to the United States are not made in Italy
but are of Japanese origin, as are also the sennit braids used in the
sewed straw hats made in the United States and in England.[2]
[Footnote 2: Milan and fancy braids are plaited by Italian women
in their homes, but this industry is not to be confused with the
manufacture of sewed hats, the subject of this investigation.]
In general, the foreign straw-hat factories do not bleach straw braids
in their own establishments. In Italy, however, one concern not only
bleached its own braids but also bleached braids for other straw-hat
manufacturers.
With respect to hats, some of the unfinished bodies, usually leghorns,
are made by women in their homes. But men's sewed straw hats, the
subject of this investigation, are produced in factories or in small
workshops. The latter generally operate on a contract basis for the
larger manufacturers or shippers. The workshops which own their own
equipment are organized to produce from 25 to 200 dozen sewed hats per
week. In the making of the shell or body of the hat the contractors
are paid on the basis of the number delivered to and accepted by the
principal. The contractors furnish their own sewing cotton, gelatin,
and other materials, except braid, used in making the shells or bodies
of the hats. The trimming of straw hats is also to some extent performed
on a contract basis.
The establishments visited in England generally perform all the
operations of making and trimming hats in their own establishments,
although at times "outworkers" are employed.
_Working hours and wages._--The labor employed in the manufacture of
sewed straw hats is well organized in both Italy and England. The rates
of wages and hours of labor, both of factory workers and of employees
of contractors, are determined by collective bargaining. A minimum wage
scale for both pieceworkers and timeworkers became effective in Italy
October 27, 1924. The labor of women and children in Italy is limited to
48 hours per week (decree of March 15, 1923). The employment of children
under 12 years of age in shops and factories is prohibited.
COSTS OF PRODUCTION
_Methods of obtaining cost data._--Costs of the domestic Italian and
English hats were obtained by representatives of the commission. In the
United States they were given access to the books and records of the
manufacturers. Domestic costs of materials, labor, and overhead are
based on actual records.
In both Italy and England representatives of the commission were given
access to manufacturers' books showing estimates of their costs. The
estimates of material and labor costs were verified from original
records. Estimates of general administrative and factory expense were
expressed as percentages of the combined cost of labor and materials or
of sales. Access to records from which the latter estimates could be
verified was not permitted.
DESCRIPTION OF COST ITEMS
_Material._--Material includes costs of braid, of bleaching, and of
trimming materials and sundries, and also the cartons in which the hats
are packed.
_Labor._--The amount charged to the individual hat for labor includes
all labor costs connected with its manufacture. The amount of direct
labor on each hat was first determined. The indirect labor charge for
each hat was determined by applying to its direct labor charge the
percentage which total indirect labor for the factory bore to the total
direct labor.
_Overhead._--In each domestic factory the total overhead charges were
obtained and the ratio of these charges to the total direct labor cost
of the respective factory was computed. This ratio, expressed as a
percentage of direct labor, was applied to the direct labor cost of
individual hats to determine the overhead charge to be apportioned to
each hat.
SELLING EXPENSE
(_a_) _Domestic._--The ratio of total selling expense in each factory
to total manufacturing cost (material, labor, and overhead) was first
determined. This ratio (expressed as a percentage of total manufacturing
cost) applied to the manufacturing cost of the selected hat determined
its proper share of the total selling expense. Firms organized to deal
directly with retailers uniformly had higher selling expenses than those
whose products were marketed chiefly through jobbers. The average
selling expense of the selected hats was $1.64 per dozen, or 10.8 per
cent of the average manufacturing cost. In selling expense is included
the charge for cases and other packing material.
(_b_) _Foreign._--Costs of selling hats to importers in the United
States are included in the general overhead expenses reported by
foreign companies, but are an inconsiderable item when compared with
manufacturing costs. No expenses of the offices maintained in this
country by foreign manufacturers have been included.
TABLES SHOWING COST COMPARISONS
In Table 8 are shown the costs of domestic and Italian men's sewed straw
hats, irrespective of the type of braid used in their manufacture. In
Table 9 are shown similar cost data for domestic and English hats. In
both tables costs are shown with and without transportation charges on
foreign hats, and ad valorem rates of duty necessary to equalize
differences in foreign and domestic costs have been computed.
TABLE 8.--_Rates of duty necessary to equalize differences in costs of
production of men's sewed straw hats in the United States and in Italy,
the principal competing country_
-------------------------------------------+-------------+------------
Item | Domestic[1] | Italian[2]
-------------------------------------------+-------------+------------
(_a_) Cost (transportation not included): | _Per dozen_ | _Per dozen_
Material cost | $6.44 | $4.35
Labor | 4.60 | .87
Overhead | 1.70 | .76
+-------------+------------
Total manufacturing cost | 12.74 | 5.98
+=============+============
Difference | | 6.76
Foreign valuation[3] | | 6.42
American selling price[4] | 13.28 |
| |
Ad valorem duty necessary to equalize | |
on basis of-- | | _Per cent_
Foreign valuation | | 105
American selling price | | 51
+=============+============
| |
(_b_) Cost (transportation on Italian | |
hats to New York included): | | _Per dozen_
Total manufacturing cost | 12.74 | $5.98
Transportation to New York--Inland | |
freight, ocean freight, marine | |
insurance, consular fee | | 1.10
+-------------+------------
Cost, including transportation to | |
New York for Italian hats | 12.74 | 7.08
Difference | | 5.66
Foreign valuation[3] | | 6.42
| |
Ad valorem duty necessary to equalize | |
on basis of-- | | _Per cent_
Foreign valuation | | 88
-------------------------------------------+-------------+------------
[1: Average costs of 15 domestic hats selling to jobbers at $10.55 to
$15.52.]
[2: Average cost of 15 Italian hats whose imported cost plus duty
ranged from $8.51 to $13.10.]
[3: Average of wholesale selling prices reported by foreign
manufacturers.]
[4: Average of wholesale selling prices to jobbers reported by domestic
manufacturers.]
TABLE 9.--_Rates of duty necessary to equalize differences in costs
of production of men's sewed straw hats in the United States and in
England_
-------------------------------------------+-------------+------------
Item | Domestic[1] | English[2]
-------------------------------------------+-------------+------------
(_a_) Cost (transportation not included): | _Per dozen_ | _Per dozen_
Material cost | $8.34 | $5.47
Labor | 5.85 | 1.84
Overhead | 1.87 | 2.01
+-------------+------------
Total manufacturing cost | 16.06 | 9.32
+=============+============
Difference | | 6.74
Foreign valuation[3] | | 9.73
Ad valorem duty necessary to equalize | |
on basis of-- | | _Per cent_
Foreign valuation | | 69
+=============+============
(_b_) Cost (transportation on English hats | |
to New York included): | | _Per dozen_
Total manufacturing cost | 16.06 | $9.32
Transportation to New York--Inland | |
freight, ocean freight, marine | |
insurance, consular fee | | 1.35
+-------------+------------
Cost, including transportation to New | |
York for English hats | 16.06 | 10.67
Difference | | 5.39
Foreign valuation[3] | | 9.73
| |
Ad valorem duty necessary to equalize | |
on basis of-- | | _Per cent_
Foreign valuation | | 55
-------------------------------------------+-------------+------------
[1: Average costs of eight domestic hats selling to jobbers at $16.74
to $22.50.]
[2: Average costs of eight English hats whose landed costs duty paid
ranged from $15.64 to $18.60.]
[3: Average of selling prices reported by foreign manufacturers.]
COMPETITIVE CONDITIONS
Styles for men's straw hats are set about one year in advance.
Sample hats are manufactured in May and June and orders are taken by
manufacturers in July, August, and September for hats to be delivered
the following spring. This custom of the trade makes it possible for
foreign manufacturers to copy and offer in competition the same styles
as those made by American manufacturers. Imported hats have a wide range
of styles and prices, including not only sewed hats of sennit braid
but also those of fancy braids, and woven body hats such as leghorns.
Domestic hats also comprise a wide range of styles and prices. Within
this range there is a more or less definitely limited field in which
imports compete directly with domestic merchandise.
TRANSPORTATION AND MARKETING COSTS
Before the Italian or English hats enter into competition in the
domestic wholesale market with hats of domestic manufacture expenses for
transportation, marine insurance, and consular fees must be incurred. In
the season 1923-24 the charges specified amounted to approximately $1.10
per dozen for Italian hats and $1.35 per dozen for English hats.[3] Such
expenses are set forth in the lower half of Tables 8 and 9.
[Footnote 3: Computed from consular invoices for hats imported at the
port of New York in the six months, January-June, 1924.]
The methods of marketing foreign and domestic hats are similar, but
because of minor differences in terms of sale, etc., it was not found
practicable to institute a mathematical comparison of selling costs.
Some domestic firms deal only with jobbers, others only with retailers.
A few of the largest firms sell to both jobbers and retailers. When
the manufacturer dispenses with the services of jobbers his selling
costs are, of course, increased. Foreign straw hats are distributed
principally by importing jobbers. Such firms are usually engaged also in
the marketing of domestic hats and in some instances are manufacturers
or have financial interests in domestic factories. Foreign factories
occasionally deal directly with large retailers in this country. In such
cases it is usual for the retailer's representative to travel abroad to
inspect samples and place orders. One large Italian factory maintains a
New York office through which it deals directly with domestic retailers.