Figures are presented in the report showing that although labor costs in the cotton industry are in many cases lower in the United States than in England, yet the actual hourly earnings in this country are, in most of the principal occupations, much greater.

The conclusion that under present methods of production on many plain fabrics the cost of production is not greater in this country is also borne out by a comparison of English and American mill prices. A comparison of such prices on a large variety of these fabrics in England and the United States for the date of July 1, 1911, shows that in the case of plain goods the American price at the mill was in no case much above the English mill price, while in the majority of cases it was lower. It should be noted, however, that American prices of this date, relative to the price of cotton, were somewhat lower than normal. The English prices are the regular quotations for the home market, and are not necessarily the prices for export and for neutral markets. In the case of fancy goods, however, where the looms tended are necessarily less, the American mill prices were in most cases higher than the English.

The subject of prices is referred to below, but the fact that in the case of a number of leading fabrics the American manufacturer is selling at less than is the English manufacturer is corroborative of the statement that plain goods can be manufactured as cheaply in this country as in England. The report also gives information as to the ability of the American manufacturer to compete in neutral markets on goods of this kind.

Cost of finishing. Finishing includes the processes of bleaching, printing, dyeing, mercerizing, etc. It is the general rule in England that the finishing of cotton fabrics is carried on in establishments separate and distinct from the weaving mills. This is also true in large measure in the United States. Since the converter or the weaving manufacturer must pay the actual commission charges, a comparison of these finishing charges in England and the United States is adequate to show the relative cost of finishing in the two countries.

A comparison of sixty specific samples for which finishing data were obtained shows that in most cases the differences between the charges in the two countries were slight, but that the American charges were slightly lower on most of the samples.

Duties in relation to costs of weaving and finishing. . . . In nearly all cases the duty is more than 80 per cent of the total American cost of conversion, and in a majority of cases it more than equals the entire conversion cost in this country. There are goods in which the ratio of manufacturing cost to the total cost (which includes the value of the material used) is small, and the actual ad valorem rates of duty - that is, the duties on the selling price of the finished fabric - range from 20 per cent to 45 per cent., with only four cases in which the duty is over 50 per cent.

The above-mentioned list, as stated, includes only standard goods of simple construction (plain, twill, or sateen). A further comparison is made on 100 selected samples, covering a wide range of fabrics, as sold at retail. It is impracticable to draw any general average from these samples, but the facts for each one are set forth in the report. In general, it may be said that the ratio of duty to domestic cost diminishes as the character of the weave becomes more complicated and the number of looms tended per operative diminishes.

These figures show a large number of costs in which the duty per square yard on the cloth unfinished (in the gray) is more than equal to the total conversion cost. ... In the greater number of cases the duties are greater than the total domestic cost of spinning and weaving.

These same figures, taken with others presented in the report, show that the additional duties imposed on finishing processes bear little relation to the increased costs of these processes. ... In the majority of cases, so far as the actual samples are concerned, for which cost figures were secured, the increase in duty is in excess of the total actual increase in cost, due to the finishing processes. . . .

American retail prices. As already stated, many standard fabrics of simple construction are sold by American manufacturers at a price as low as or lower than that of the English manufacturer. On the other hand, the English mill price of finer fabrics is in most cases lower than in this country; but it is only in the case of very few fancy specials that the American mill price is greater than the English mill price by anything like the full amount of the present duty. It does not follow, however, that the American consumer gets his goods at the same price as the English consumer. One of the most interesting results of the investigation is to be found in the facts included in the report regarding the different methods of distribution in the two countries and the greater margin which exists between the price at which the manufacturer sells his goods and the price at which the consumer buys them in this country as compared with similar prices in England. The relation of the tariff to the prices paid by consumers can only be understood by fully comprehending the significance in American trade of the principle of "set prices." This principle is fully explained in the report, and many figures are given to show mill price, converter's price, jobber's price, and retail price.

The most common retail prices for different kinds of cotton cloth are 5, 7 1/2, 8 1/3, 10, 12 1/2, 15, 19, 25, 29, 35, and 50 cents a yard. These prices in turn fix the prices which the jobber can charge the retail merchant in order to bring the price of the fabric inside a given "set price" to the consumer, and these in their turn determine the prices which the jobber can afford to pay the manufacturer. The result is that under the existing system of distribution the effect of any change in cost of production or in mill price cannot be determined except in relation to the "set price" of the retail trade. In some cases a reduction of one cent a yard in the mill price might be just enough to enable the jobber to sell at a price which would bring the goods within a lower retail class, thereby possibly saving as much as 6 cents a yard to the consumer. In another case a reduction in price of 3 or 4 cents a yard might not be sufficient to bring the cloth into the lower class, and in this case the whole reduction in mill price would go to the jobber or retailer, or both, while the consumer would pay the same price as before.

It may be said in general that goods which are sold at the mill at from 8 to 9 cents reach the consumer commonly at 15 cents per yard.

When the mill price is 10 cents per yard, the fabric is thrown into a different classification and will reach the consumer at 19 cents. An increase of the mill price from 10 to 11 1/2 cents would probably not affect the price to the consumer. When, however, the mill price goes to 12 cents, the consumer will pay 25 cents. A further increase in the mill price of 2 cents in this case would not change the price to the consumer.

With a mill price of 14 cents the consumer would still pay 25 cents retail. Where the mill price is, however, 15 cents, the cloth enters another classification and probably reaches the consumer at 29 or 35 cents. It will be seen, then, that an increase of 2 cents, from 12 cents to 14 cents, does not affect the 25-cent retail price, while an increase of 1 cent, from 14 !/2 cents to 15 1/2 cents, may increase the price to the consumer by 10 cents.

The same facts are brought out clearly by a study of the course of mill prices, jobber's prices, and retail prices of the same fabric over a period of years. A good many examples of this are shown in the report. To illustrate by a certain sample quilt: This was sold by the mill in 1908 for 62 1/2 cents and reached the consumer at $1. In 1910 the mill price went up to 75 cents, an increase of 12% cents, which increased the retail price paid by the consumer to $1.50.

Another quilt of a little lower grade sold in the earlier period at the mill for 58 1/2 cents; jobber's price, 70 cents; retail price $1. In 1910 the same quilt was selling for 67 1/2 cents at the mill; jobber's price 75 cents; retail price, $1. In the case of the first quilt an increase in the mill price of 12% cents increased the price to the consumer by 50 cents, while in the case of the other quilt an increase of 9 cents at the mill, in the same year, did not increase the retail price at all. The reason, of course, was that, the second quilt being of a little lower value, the increase did not quite bring it out of the $1 class.

These facts, besides being of interest as showing the relation of the consumer to the producer in this country, are of importance in considering the effect of tariff changes. Assuming that the method of distribution remains the same, it would appear that the same rule would hold, whether the jobber should buy his goods of the domestic or the foreign manufacturer. We have seen that a slight reduction in the price the jobber pays to the producer might mean a large reduction in the price to the consumer. Conversely, a considerable reduction in the mill price might have no effect on what the consumer must pay. For exactly the same reasons, on the one hand, a slight reduction in duty might mean a much more than proportional reduction in price to the consumer, whereas, on the other hand, a very material reduction in the duty might have no effect at all in decreasing the retail price.

This method of distribution is much more firmly fixed in the United States than in other countries. This fact, combined with the lower margin abroad between the mill price and jobber's price and the lower margin between the jobber's price and the retailer's price, as compared with this country, brings about the result that goods which are manufactured at the same cost in England and the United States and sold at the same price in both countries at the mill nevertheless reach the consumer in the two countries at quite different prices.

English retail prices. A few comparisons may be given here to show the wider margin between manufacturer's prices and retailer's prices in this country as compared with England. Thus one fabric which sells at the mill in the United States at 8% cents a yard will be jobbed at 11 cents and sold at retail at 15 cents. The identical fabric in England would sell at the mill for the same price - 8 1/2 cents - be jobbed at 9.75 cents and retail at 13 1/2 cents.

A fabric selling at the mill in the United States at 10% cents would be jobbed at 12 1/2 cents and sold to the consumer at 19 cents, or possibly 25 cents. The same fabric selling at the mill in England at a price identical with that paid at the American mill would be jobbed at 11 1/2 cents and would reach the consumer at 15 cents.

A fabric selling at the mill in the United States at 12 cents would be jobbed at 16% cents and reach the consumer at 25 cents. The same fabric with the same mill price in England would be jobbed at 14 cents and reach the consumer at 19 cents. In the case of these particular samples it will be seen that the price received by the manufacturer is the same in both countries, but that the American consumer pays a decidedly higher price than the British consumer.

General conclusions. In conclusion it may be stated that the foreign cost of spinning is less than in the United States, as shown by the figures above. The same holds true for weaving fancy fabrics, on which the number of looms to the weaver in this country is not much greater than the number of looms to the weaver abroad. On account of the different mill methods in this country, the domestic labor cost of weaving on a large variety of plain fabrics of wide consumption is below the foreign cost. Except in the case of a few special fabrics, and in the case of various manufactured articles, some of which are produced in this country to a very slight extent, the American industry practically supplies the whole consumption. The imports of yarn in 1910 were less than one-half of 1 per cent of the home production in pounds. The imports of cotton cloth were less than 2 per cent of the home production in value. Mill prices are in many cases as low in this country as in the world's markets. Where higher, as in the ease of the finer classes of products, they are rarely higher by anything like the whole amount of the duty. The effect of the present tariff, then, in most cases is not so much to add the duty to the domestic manufacturer's price as to secure him the American market; and, in the case of most articles of widest consumption, to prevent the competition of the foreign manufacturer, either in normal or abnormal times. On account of more costly methods of distribution in this country from producer to consumer, the latter pays a decidedly higher retail price than the European consumer, even in the case of fabrics on which the cost of production and the mill price are as low here as there.