DO ME PAY TRIBUTE TO MONOPOLY WHEN WE BUY OUR SHOES?
Do We Pay Tribute to Monopoly When We Buy Our Shoes? DO WE HAVE TO PAY TRIBUTE to Monopoly when we go to the store to buy a pair of shoes? We all wear shoes. Even the babies must have their feet...
...We estimate that the royalty we pay to the company, the direct royalty,.is between 5 and 6 cents per pair...
...Unfortunately for us we have already all signed contracts which run for 17 years from the date on which we put in the last machine, and our lawyers tell us that inasmuch as we have signed these contracts and agreed to use no other machines except those made by the United Machinery Company, that contract is binding...
...D'Oench: "Yes, sir...
...D'Oench: "No, sir...
...Mr...
...Concerning this item, Mr...
...It is admitted that there is another type of machines that will do the work...
...Plant came back that night and infoimed us that, as we did not seem very . much interested he had sold out"—to the machinery trust...
...But the United Shoe Machinery Co...
...In addition to that you must buy the parts from the company, and finally you must agree that if you go out of business or discontinue you are obliged to take that machine and return it to them and pay the freight charges on it, and they stipulate in their lease that they have a right to take that machine and put new parts on it and put it in order and charge you for those parts...
...Mr...
...There is no market for putting a line of machinery in this country today...
...Plant found himself surrounded, did he not, when he endeavored to enter into competition with this United Shoe Co., by INFLUENCES THAT CUT OFF HIS CREDIT, and drove him finally to sell out his entire institution to the United Shoe Co...
...Senator Smoot: "That would be $270...
...Weeks' defense was of small service to his great constituent...
...Senator Smoot: "And the rate (of duty) is 45 per cent...
...Weeks: "Yes...
...Mr...
...Mr...
...And then there is an indirect royalty for parts and things of that kind, which we estimate at between 2 to 4 cents per pair...
...Rucker demolished Week's affirmation, calmly, tersely and effectively, in the following words: "If figures submitted by Mr...
...Senator Stone: "And then you contract to buy all your material from that company...
...duty and get it for 26 or 27 cents...
...Florshei'm of Chicago: "It would not be policy for anybody to manufacture a line of machinery, because he has no market...
...Louis, tolr1 how the shoe manufacturers, seeking relief from the grip of the machinery trust, went to Boston to negotiate with Mr...
...And, indirectly, every person who buys shoes must pay tribute to this Boston corporation...
...Said Mr...
...D'Oench: "Yes...
...Mr...
...He said "it is not possible that there can be any combination in the shoe industry in this* country, because the shoe was widely distributed and the owners of no particular company have any interest in any other company...
...Harris of the gentleman's state are correct, they would show that in 1910 there were 1,316 different concerns in the United States making shoes, when statistics show that 10 years ago there were more than 2,000 concerns making shoes, so that it seems to indicate that the number of concerns is getting less rather than more...
...We will sew around 200 pair a day on that machine...
...if so, bring prosecution immediately...
...Senator Heyburn: "The only way you can get those machines is to lease them...
...This corporation is a not unimportant constituent of Representative Weeks of Massachusetts...
...Evidence is accumulating before Congress that the shoe trade of the country is completely under the domination of a big corporation that manufactures the machinery used to make shoes...
...That we ascertained by an audit to be correct, and we were negotiating to see if we could buy the machinery at a minimum of $3,000,000 and a maximum of not exceeding $3,500,000...
...Mr...
...D'Oench: "Yes, sir...
...Which led Senator Bailey to exclaim: "// these hearings are transmitted to the Attorney General's office, the United Machinery Co...
...so no capital will invest any money in that industry and the market is closed...
...And he did not help his case by citing that IF this company is a DESPOTISM it is of the BENEVOLENT TYPE...
...A trust is a trust, whether benevolent or tyrranical...
...That would be a royalty of $4...
...D'Oench: "We could not use that wire if we had it...
...With profits such as these, why do not other manufacturers enter the field and sell these machines outright...
...He did open the way for bringing out the fact that there are fewer shoe manufacturing concerns now than formerly—in contradiction to the point he tried to make that his constituent's policy of leasing instead of selling shoe machines tended to increase the number of manufacturers...
...D'Oench: "Yes, sir...
...We must do that in order to obtain these machines...
...Then Mr...
...I want to state I was there (Boston) at the time, and we were negotiating with Mr...
...Senator heyburn: "They will not sell those machines to you, will they...
...The Attorney General should find out if this corporation is a trust operating illegally in restraint of trade...
...Rucker: "And that would tend to increase the number of manufacturers...
...Mr...
...is not without a defender...
...Then there is wire...
...D'Oench: "There was an attempt made to do that not long ago, and the man who manufactured a complete line of that kind sold out to that company"—that is, to the Shoe Machinery trust...
...He must pay tribute to MONOPOLY...
...Mr...
...There is no one hardy enough to venture the suggestion that boots and shoes are not a "necessity...
...It is a fact that must not be overlooked, that if this company is a despotism it has been UP TO THIS TIME of the benevolent type...
...is not that understood in the trade to be the truth...
...The Defense That Failed ALL THIS is damaging testimony, indeed...
...it varies according to the grade of shoes...
...Mr...
...They furnish two machines which perform two operations, one known as welting and the other known as stitching...
...How the Shoe Trade is Controlled HOW THIS CORPORATION puts the screws to the shoe manufacturers—little and big—throughout the country was described to the Senate Committee on Finance, during the hearing on the Farmers' Free List Bill...
...They OWN practically all the shoe machines that are used in the manufacture of shoes here...
...Weeks: "Yes...
...Senator Smoot: "I suppose those machines are protected by patents...
...Plant...
...Weeks had but one difficulty—and that was with FACTS...
...Said Mr...
...Senator La Follette: "Mr...
...A "Cinch" on the Business HOW, IT MAY BE ASKED, if shoe manufacturers have to pay each year in the form of RENT more than twice as much as the machine is worth, why do they not get together and manufacture their own machines...
...We would not be permitted to use it, because we have signed a lease agreement to buy the wire from this company...
...here ties you up in a lease that covers every machine they have...
...Rucker of Missouri: "I understood the gentleman to say that the policy on the part of shoe manufacturers of renting machinery with which they made the goods they sell, instead of purchasing the machinery outright, enabled the manufacturers to engage in the business with less capital than would otherwise be necessary...
...Johnson...
...Weeks then quoted from a statement made by C. H. Jones, president of the Commonwealth Shoe Company: "At the time of the organization of the Machinery Company, I resented very deeply what seemed to me the extreme and unfair advantage that they were taking of the power vjhich they undoubtedly held over shoe manufacturers, but in the six or seven years during which they have been in operation, I must say that I have waited in vain for any unfair or arbitrary use of this power...
...It is the United Shoe Machinery Company of Boston...
...Senator Smoot ; "What is the value of it...
...D'Oench of the Friedman-Shelby Shoe Company, St...
...D'Oench replied: "Senator, you can not import all these machines, because the Shoe Machinery Co...
...Mr...
...Here is the answer: Mr...
...One Year's Rent Pays for Two Machines MR...
...Here is a matter that should claim the immediate attention of the Administration...
...They charge a royalty of 2 cents a pair, and they have a recording dial on the machine, and they keep record, besides, and so you pay 4 cents a pair for every pair of shoes made on those two machines...
...Weeks attempted to show on the floor of the House that "there is no trust or monopoly of combination connected with these (the shoe) industries in any wav or shape...
...We have to buy their parts...
...Plant for the purchase of his institution...
...There is the story...
...Plant for the purchase of his machines, and the nearest to the price that we ever got was that he stated that it had cost him something over $3,000,000...
...Mr...
...D'OENCH ILLUSTRATED the amount cf royalty shoe manufacturers are required to pay on ONE machine as follows: "I quoted a moment ago a machine called a stitcher, which sews the outsoles to the welt of the man's shoe, on which the company charges a royalty of 2 cents per pair...
...is not that a fact...
...Counting 300 working days in the year, if the man running that machine were steadily employed, it would pay the company a royalty of $1,200 on that one machine...
...the Shoe Machinery Company is a trust...
...It is sold in England for about 1J, cents per pound...
...Senator Smoot: "Why don't you pay the $870 instead of $1,200...
...Louis, said: "The wire is sold in this country to us by the Shoe Machinery Co...
...do you lease your machinery rather than buy it...
...He did quite the opposite...
...But he did speak of the "ESSENTIAL" machines made by the corporation he was championing...
...Every man or firm in the country who goes into the business of making boots and shoes must do so with machinery OWNED AND CONTROLLED by this combination...
...D'Oench: "Yes, some are sold, but very few...
...the basic patents on those machines have expired...
...Senator Smoot: "You can buy the wire there (England) at 14 cents and pay the 45 per cent...
...D'Oench: "Because it is controlled by the Shoe Machinery Company...
...and then they are through...
...WOULD COME INTO OUR FACTORY AND TAKE EVERY MACHINE OUT, AND WE COULD NOT MAKE SHOES...
...ought to have some trouble right away...
...They charge a royalty on a* man's welt shoe...
...at 38 cents per pound...
...Mr...
...Will he...
...Aside from the machinery, there are, for example, blacking, buttons, glue, leather, nails, tacks and thread...
...D'Oench: " * * * I have heard reports to that effect...
...Whereupon Mr...
...To which Mr...
...D'Oench: "No...
...It is not news to any one to be told that the prices of most "necessities" are absolutely under the control of trusts...
...He did admit that the United Shoe Machinery Company made the "essential" machines...
...But are we now to discover that our very necessary footwear is also trustified...
...During the period of negotiations we took a recess...
...D'Oench: "Yes sir * * * and the parts, too, you know...
...There are many items that enter into the making of shoes...
...Johnson, of the Roberts, Johnson and Rand Shoe Co., of St...
...Two kinds of wire are used—brass and steel...
...D'Oench: "* * * between $500 and $600, perhaps...
...D'Oench: "Because, if we do that, THE UNITED MACHINE CO...
...He did not demonstrate what the corporation wanted him to demonstrate...
...Senator La Follette: "Was that Mr...
...In fact, the machine is only leased to us, and they lease it to us and charge us a certain sum of money, and then they furnish the wire and the parts...
...We are...
...Even the babies must have their feet clad...
...The Lease That Binds SENATOR CLARK INTERPOSED with the remark that he could not "understand why you should be held up at the rcercy of this combination when you can go into the foreign market and import your machinery at a cost less than one year's royalty...
...Senator Smoot: "You spoke of a lease...
...Senator Smoot: 'Why don't you buy in England, then...
...There is no escape...
Vol. 3 • June 1911 • No. 22
