TABLE 2.-Comparison of foreign and domestic composition, printing, and binding costs for 83 American publishing firms in 1963 (of which only 20 firms had any foreign composition done, either in English or foreign languages) Foreign language and foreign-authored titles (not covered by the manufacturing clause)... Titles by American authors composed abroad. Total cost of composition, printing and binding for 83 firms.. Total foreign composition cost on 215 American-authored titles composed abroad.. On which monotype composition was used. 868, 938 31, 811 Foreign composition cost of 138 titles in foreign languages or by foreign authors.. Total cost of book and pamphlet manufacture in 1963.. Total new and revised titles published in United States in 1963 by all publishers.. As the table shows, the vast bulk of American titles are completely manufactured in the United States-composition as well as printing and binding. Of the 83 firms, 63 did not have foreign composition, printing or binding done at all. Only 215 American titles were composed abroad-2.3% of binding done at all. Only 215 American titles were composed abroad-2.3% of the total titles. The cost of foreign composition was only $900,749 or only 6/10 of 1% of the total composition, printing, and binding bill of the 83 firms, which amounted to $141 million. Monotype composition accounted for 96% of the foreign composition of American titles. The current practice of having difficult and complicated monotype composition done abroad but doing the printing and binding here provides just about all the cost advantages to American publishers which would be obtained from complete repeal of the manufacturing clause in more than nine out of ten cases. This practice would undoubtedly be continued if the manufacturing clause were eliminated because of the great convenience, flexibility and economies of using American book manufacturers. With the offset plates in the hands of a domestic supplier, the American publisher can quickly and easily secure additional printings here to match sales demand and thus keep expensive inventory at a minimum. Having the printing done abroad is slow-and very risky. Ocean shipping takes time, and the delay can be disastrous if one of the not infrequent shipping strikes holds up delivery of urgently-needed supplies for weeks or months. Besides, American printing is at least as good in quality and the binding is superior. In view of these facts, repeal of the manufacturing clause will not greatly change the present practice in the vast majority of cases. It will provide a useful flexibility in certain situations, and retain copyright protection where it is now sacrificed. A few more books may be set or manufactured abroad, but very few. By and large these are books which would not be done at all if they had to be manufactured completely here because the prices would have to be set at an uneconomic level. The American printing industry is not losing anything on these books-indeed it is gaining the printing and binding of them when the composition is done abroad. Thus it can be said with confidence that the less-than-1% of the expenditure for manufacture of American publishers which is now going for foreign composition would not increase materially with total repeal. The expenditures of American publishers for book manufacturing services-which represent the sales of the book manufacturing firms-have been growing at a rate of over 6% per year in the 1958-63 period, or an annual increment of over $35 million. This rate of increase is expected to continue for the indefinite future, tied as it is to population growth, educational enrollments, library expenditures and the whole combination of factors which has made book publishing one of our strongest growth industries over the past two decades. In terms of annual increments of this size, the amount of foreign book composition and book printing and binding which might be done abroad with complete repeal of the manufacturing clause is so small as to be hardly measurable statistically. As a final gauge of the lack of significance of the manufacturing clause as a protective device, let us consider the volume of imports and exports of other types of printed matter not so protected, in relation to the volume of domestic production. If the manufacturing clause provides protection to American book manufacturing from the danger of low-cost foreign competition, we would naturally expect to find that American printing not so protected would show imports exceeding exports and a high ratio of imports to domestic production. Table 3, which follows, gives the relevant figures for the year 1963. TABLE 3.-U.S. imports, exports and domestic production of printed matter, 1963 [Dollar amounts in thousands] Source: Import and export figures from Bureau of the Census foreign trade reports. Domestic production from Bureau of the Census preliminary release on 1963 Census of Manufactures, reduced as far as possible to eliminate duplicate counting of sales of printed matter from 1 industry to another. It will be seen at once that all of the four principal classes of printed material-books and music, newspapers, periodicals, and commercial printing-show a large surplus of exports over imports and an extraordinarly low ratio of imports to the volume of domestic production. It is not particularly surprising to find that there is practically no market in the United States for foreign periodicals and newspapers, nor for the printing in other countries of American periodicals and newspapers, considering the importance of very quick delivery and the long printing runs involved. (Periodicals, incidentally, are covered by the manufacturing clause, which is even more obsolete here than with respect to books.) One would think, however, that commercial and miscellaneous printing would lend itself to more foreign competition, because split second delivery is not as important for many standard items and unlike books, it should be possible to anticipate the demand reasonably well in advance. The figures prove this not to be the case-commercial and miscellaneous printing shows a very handsome export surplus and a remarkably low ratio of imports to domestic production, all without benefit of the manufacturing clause. High U.S. tariffs are not the explanation of low imports for any of these classes of materials. Our customs duties on printed matter range from zero to a moderate level. Newspapers, periodicals and a good many types of books carry no duty; current English language books and music have duties ranging from 2% ad valorem to 72%; duties on commercial and miscellaneous printing are generally somewhat higher, but are by no means prohibitive. One can only conclude that despite wage differentials the American printing industries are perfectly able to compete on a cost and service basis and that there is something about the custom service provided by printers to their customers which does not lend itself to buying printing services from remote suppliers. A word of explanation may be in order as to why, for books, the ratios of imports to exports and of imports to domestic production, while low compared to most American manufactured products, are so much higher than for the other major classes of printed materials. Book imports and exports both represent for the most part small shipments of thousands upon thousands of individual titles which are used as professional tools either by individuals directly or through public libraries and the libraries of educational institutions and business corporations. There is no mass international traffic in popular books and textbooks each country supplies the bulk of its own needs for these materials— but there is a large international exchange of the thousands of specialized titles in which no country can be self-sufficient. The U.S. is a large exporter of books because our books are among the best in the world in subject matter content and because English has become the new lingua franca of the world in science, technology, the professions, and business. We are a big importer of books because we have the largest education system in the world as well as the largest corps of professional people who need books to keep up with their specialties. Table 4 below shows the vigorous growth of our export of books, and of our favorable balance of trade, since we shifted over from a book-importing to a bookexporting country after the second World War. This table does not really do justice to the facts: it is based upon the official export statistics of the Department of Commerce, which seriously understate book exports because they do not include the large number of shipments of under $100 in value. The true book export figure is undoubtedly much greater, probably half again as large, according to statistics compiled by the industry itself. TABLE 4.-U.S. book exports and imports, 1936–64 NOTE.-The export totals understate true exports by varying amounts because individual shipments valued at less than $100 have never been counted. Industry estimates place the true value of book exports at least 50 percent higher. There is some understatement of imports for the same reason, especially in the 1954 figure, but from 1958 on the understatement is minimal because of a sample count of small shipments. Source: U.S. Department of Commerce, Bureau of the Census, Reports FT-110 and FT-410. Compiled by Printing and Publishing Industries Division for 1948-64; the 1936 and 1940 figures also include music in books and sheets not included in later years. CONCLUSION I shall not attempt to recapitulate a long and detailed statement, or even try to summarize the principal steps in the analysis. Let me only repeat our conclusion, taken after long and serious study, that the repeal of the manufacturing clause and related import restrictions is now required, rather than the further tinkering represented by Chapter 6 of H.R. 4347. Repeal will be a net gain to the United States, and to all the interests in this country particularly concerned, including literary and scholarly authors, scientists, educational institutions, publishers, and the American book manufacturing industry and its employees. Like publishers in other countries, we are dependent upon our domestic printing industry for 99% and more of our book manufacturing requirements, and we want and need a healthy, growing, and technically-advanced American industry. We believe, and have endeavored to demonstrate the factual grounds for our belief, that the crutch of the manufacturing clause is obsolete and should be discarded now, once and for all. APPENDIX TABLE 5.—Growth of the U.S. printing and publishing industries, 1947–63 1 Value added by manufacture is roughly the value of products produced less cost of materials, supplies, fuel, electricity, and contract work. The 1947 figures are on a slightly different basis than those for the latter 3 years. 2 Combines commercial printing and lithographing. 3 Data not published but included in the total for printing and publishing. These are the firms specializing in hard-bound book printing and binding for publishers. Other types of printing establishments do book work also, especially paper-bound books. In 1963 the book printing industry accounted for 68 percent of the sales of book printing. Columns may not add exactly because all figures are rounded to nearest million or thousand. Source: "Statistical Abstracts of the United States" for 1947, 1954 and 1958. The 1963 figures are from preliminary releases of the Bureau of the Census from the "1963 Census of Manufactures." TABLE 6.-Receipts of publishers from book sales, 1958 and 1963 NOTE.-Sales at retail value would be considerably higher except for book clubs, encyclopedias and elementary and secondary textbooks. Source: "U.S. Census of Manufactures," 1963; preliminary report MC 63(p)-27-A-3. |