My hon. friend will observe that as we go along. This letter is from the
office of the managing director of the Dominion Textile Company, and is dated February 27:
Dear Mr. Robb:
Your recent tariff changes, in so far as cotton goods are concerned, apparently will be considered quite popular. I wonder whether you are aware that few of these changes are in accordance with the facts put before the Tariff Advisory Board?
Apparently this gentleman thought he was the only man to place any facts before that board.
The net results are that there is little reduction to the general public, but a very serious one to this company, amounting to something in excess of $600,000 annually, which amount you propose to distribute through the medium of increased protection to seven other cotton companies, five of whom are producing coarse gray cotton goods, previously more fully protected than the lines of gray cottons produced by this company, when considered in the light of labour and cost of production.
Based on this year's production to date, we will, at the end of our year (March 31), have produced approximately 41,500,000 pounds of gray cloth and yarn. Of this quantity, approximately 4,600,000 pounds of yarn, averaging coarser than 20's and sold as single, will receive a reduction of four and a fraction per cent, equivalent to about $64,000. Approximately 750,000 pounds, sold in ply yarns, are unaffected.
The bleachery processed 16,256,000 yards, weighing 4.889,000 pounds, approximately one million pounds of which receive a reduction of 3 per cent under the preferential, from which its competition mainly comes. The balance of the bleachery production is unaffected in this tariff, but it has been seriously affected for many years, as this department has not averaged four days' operation per week owing to the already utterly inadequate protection of 15 per cent under the preferential tariff.
The remaining 31,000,000 pounds of gray cloth production is cut 2J per cent under the general tariff, and has only 12J per cent protection under the preferential.
In addition to this some 32,000,000 yards of printed cloths will receive a further reduction of 24 per cent. As the margin for printing is= to-day barely sufficient to cover costs, this reduction will affect the print works to the extent of making it impossible for it to meet its comparatively small proportion (allotted to it) of the common and preferred dividend requirements.
What appears to be, and is most unfair, is the fact that prints receive a protection of 2| per cent less than yarn and raw stock dyed fabrics, notwithstanding the fact that to produce the above quantity of prints will require buildings and machinery in excess of $2,500,000 more than will be needed to produce a similar yardage and value of yarn and raw stock dyed fabrics, and, at the same time, requires a much larger number of operatives with skill and technical knowledge not needed in the other plant.
We have recently spent rather more than one million dollars, and will not have completed changes and additions to the program, started last summer at the print works, before the end of this year, solely with the view of giving
Ways and Means-Customs Tariff
service to the public as, owing to the altered conditions of trade in the method of buying, forward purchasing is almost a thing of the past, and we do not expect, owing to the extremely small runs or yardage processed at any one time, to be able, on the twenty-four printing machines, to produce as great a quantity as we processed on twelve machines five years ago. .
The reason for this is that the quantity ordered at one time is so small that a much greater time is occupied in setting up a machine to print a design, than is required in the actual printing. _ .
By comparison with England, in our basic rate for printing we ask a customer to give us an order for 3,600 yards to be coloured in three different sets of colours, or 1,200 yards per colouring, whereas in England the basic rate is for 12,000 yards, or 4,000 yards per colour. .
Approximately two hours and fifteen minutes is required to set up a printing machine and make the two changes in the colour boxes, and one hour and thirty minutes running time, or a total of three hours and forty-five minutes to print 3,600 vards. To print 12,000 yards a total of five hours and fifteen minutes is required. We can produce only about 10,000 yards daily against 24,000 yards in an English works. Our labour and overhead cost is more than doubled. A great many of our orders are for 200 yards.
This reduction of 5 per cent m the general and 21 per cent in the preferential, bringing the British prints to an 18 per cent rate, will have a most serious effect on the print works and the town of Magog with its population of over 5,000 depending entirely upon this company. In addition to this a large farming community finds a very satisfactory home market for its products in this district.
As shirts and clothing are sold at set prices, it is most unlikely that the $1.50 shirts, for instance, will be sold at $1.47, the difference represented by the reduction in duty.
Coming to the companies that have been benefited, the three tire duck companies and the two duck companies, producing more than 20 000.000 pounds, receive a straight increase of 21 per cent upon their entire production, and no reductions.
The Wabasso Cotton Company, at Three Elvers, -which was started after fine yarns were put on the free list, receives 71 per cent preference and 15 per cent general protection jtn single fine yarns, and 15 per cent preference and 25 per cent general on fine ply yarns, all of which is an increase. They also receive an increase under the preference of 5 per cent on such cloths as they fabricate in which artificial silk is used, and which, I understand, represents about one-fifth of their looms.
They receive no reductions with the exception of 3 per cent under the preference on the negligible quantity of made-up sheets and slips which they produce.
In their Shawinigan yarn plant at Shawinigan Falls, Quebec, spinning yarns, they will receive the same reduction as we do, but Mr. Whitehead made the statement to Mr. Moore and myself that he had never made a cent in the Shawinigan plant, and that if he got a protection on fine yarns he would convert this plant to spin fine yarns. The Hamilton Cotton Company receive reductions and increases that offset one another.
On the face of things, it would appear that the tariff in very unfortunately framed against the company that has been honestly, efficiently, and economically operated, and should receive greater consideration.
Under proposed conditions, there is no question but that this company, and its more than seven thousand operatives will be seriously affected, and the latter, at least, are worth your reconsidering the proposed schedule.
Hon. gentlemen opposite will observe this:
Nearly one hundred million lineal yards of cotton cloths were exported to this country last year, in almost equal quantities, by Great Britain and the United States, plus imports under French and intermediate rates. At least sixty per cent of these imports directly affected this company.
We have also to accept orders for large quantities of cloths, subject to drawback rates, in order to keep occupied.
There are a great many points not touched upon in this letter that I would be glad of an opportunity to discuss with you if you will be good enough to give me an appointment.
F. G. Daniels,
Managing Director, Dominion Textile Company.
Subtopic: CUSTOMS TARIFF, 1927, AMENDMENT