Mr. SPALDING. I am taking a great deal of the time of the committee, but there have been so many questions asked that I have been shifted off to other lines.

Mr. LONGWORTH. It is very interesting, because it involves the whole principle.

Mr. SPALDING. What I am recommending to the committee is: Take each thing separately, because I think each group stands or falls on its own feet, and in the golf and tennis lines we are of course interested in not having a tax imposed so large as that it would kill the business and reach the point of diminishing the returns; and the committee are equally interested with us in not reaching that point, because they want to raise the maximum amount of revenue, and this revenue that it is desired to be produced can be produced from those sports can be produced by imposing the tax entirely on the balls instead of on the other implements that are used.

Let me take golf and show why I make that recommendation. We manufacture both the clubs and the balls. We are entirely impartial, and we have not any ax to grind as between the manufacturers of balls and clubs. The golf balls and clubs both have to be produced in quantity production. They have got to be produced in factories of large size. The small man can not start up a shop and make golf balls or tennis balls. It is too difficult a manufacturing proposition. There are a comparatively small number of manufacturers of golf balls in this country. There are a comparatively small number of manufacturers in this country of either golf balls or tennis balls. Therefore the administration of the law, the collection of the tax, becomes a simple matter. I do not believe the total number of reports of golf balls would exceed 20 reports in this country. The amount in each report would run into several hundred dollars, and probably several thousand dollars, each month, and it is a simple matter to keep track of them.

What is the situation with golf sticks? We manufacture completed sticks, but we, as well as all other manufacturers of golf sticks, do a much larger business in turning out the rough shafts and the heads and leather strips for the binding, and we sell those in that shape to golf professionals at golf clubs throughout the country; and a professional takes a shaft and puts the head and the stick together, and polishes it, and fits the handle on, and sells it to some member of the club, or to someone else he comes in contact with. Now, for the manufacture of golf clubs, you have got to ask the Treasury Department to go to all these golf professionals, and they are not often very good business men, they are hard men to deal with, and you have got to ask them to turn in a monthly report on the few sales they have. In the winter time that golf professional would turn in a report with a tax, say of 50 cents. It becomes a burden on the department. The collection of the tax is difficult, and it opens an opportunity where you are dealing with small people that way for a certain kind of evasion. I do not mean to say that the golf people will evade any more than anybody else, but they are ignorant of the law; and that is their sole business and it is located in some country place always where golf is played, and I think that is an unsatisfactory group of manufactures to attempt to collect a tax from.

Now, in addition to that, we find it a great burden, in the case of golf clubs and tennis rackets, with some of our concerns to keep account as we send uncompleted tennis rackets and golf clubs to those places, and we have one or two workmen at the larger points of supply engaged in that work, and we have got to make a return from those. The cost to us of keeping track of those small, picayune reports of the kind I am speaking about is very great; they are small matters with an immense amount of detail and expense attached, and it would simplify the thing enormously not only for us, but also for the Treasury Department, and produce just as much revenue. I do not care how much revenue you want to collect out of golf and tennis, all that you can poss bly collect can all be collected, in our opinion, by a tax on balls alone, without trying to include the rackets and clubs. Now, of course, this only covers golf and golf sticks. There are a number of other small things.

For instance, there are the tee-boxes that contain the sand and water. Those can be made by local carpenters. We do make up boxes, some of them under patents, some made of wood and some of metal, that we sell, but the total amount throughout the year would be very small, and it would be unwise to include it because it would produce a large amount of detail and very small tax.

Going into the tennis line, there are nets and posts that are not to-day subject to tax. I think the total sale of the tennis posts at the manufacturer's price does not exceed $50,000 a year, and probably this year will be considerably less.

Mr. LONGWORTH. Does that include anything else?

Mr. SPALDING. No. I think I have probably referred to all these other points in my brief, here, which with the permission of the committee I will submit; and I will go further and say that if you want to go back and collect a tax on the baseball lines, and on football lines, there again it would be better to confine yourselves to the ball than it would be to spread out and try to include all the thousand and one trivial implements.

Mr. HAWLEY. How about the bats?

Mr. SPALDING. The bat business, at manufacturers' prices, as I said, last year was about $300,000. It is a very small amount. And the bat is another proposition where you can have the article made anywhere. Any wood-turning establishment can turn out baseball bats. A man can go to any local carpenter shop that has a lathe, and have a bat turned out.

Mr. STERLING. They do not do it much, do they?

Mr. SPALDING. They do not do it much, but there is the possibility.

Mr. STERLING. How many manufacturers are there of baseball bats?

Mr. SPALDING. Of large baseball bats to-day I would say that there are only two principal manufacturers, ourselves and another firm at Louisville. There may be others that make bats in small quantities, but I think those two are the only ones.

Mr. STERLING. Would not a little tax deter them from going into business, so that it could be confined to two or three concerns, and it would be a very simple matter for the Treasury Department to go to those concerns and collect the tax?

Mr. SPALDING. Yes. I will say, so far as baseball bats are concerned. I do not think it is a particularly difficult matter to assess a tax. You do not there run into that difficulty that you do in the case. of tennis racquets and golf clubs. Tennis racquets are finished in a great many small retail stores throughout the country.

Mr. STERLING. They are made in the rough, though, in just a few places, are they not?

Mr. SPALDING. Yes.

Mr. STERLING. And the manufacturer pays the price.

Mr. SPALDING. Now, we might point out to the committee where they would lose if they applied that rule, in an enormous amount, in taxation. The finished club at the price at which the manufacturer sells it to the jobber is probably, roughly, about 50 per cent of the retail price of that article when sold over the counter to the consumer. Mr. STERLING. Then he would just do this, he would just double on the rough manufacture and let him pass it to the man who sells. We could overcome that by the finished rate.

Mr. SPALDING. Do you mean put one tax on the rough product and another on the finished?

Mr. STERLING. No; just put a tax on the manufacturer of the rough article. The next man, do not tax him at all. The Government has got the revenue.

Mr. SPALDING. Now, another reason why I do not like to see a tax on golf clubs and tennis racquets is, this is a consumption tax. It may be called an income tax or anything else, but it is a consumption tax. A man buys a golf club, and he may retain it for a great many years. He does not have to buy a new club this year if he has one. He can use his old set of clubs; and the truth of that is shown by the fact that while our golf-ball sales have fallen off somewhat, they have not fallen off anything like the sale of clubs. The same is true in regard to tennis racquets. Of course, the sales of balls have fallen off because so many players have gone into the Army, but the sales of balls have not fallen off anything like the sales of tennis racquets have. Of course, if a man is going to play golf, he has got to buy new balls, and if he plays tennis he has got to buy new tennis balls. He can not use last season's tennis balls because they are not good, and even old golf balls are not so good as new ones. He wants new balls.

Now, the same people buy tennis racquets and tennis balls as buy golf balls and golf clubs. You are reaching the same class of individuals, if you throw your tax on balls; therefore your tax is in proportion to their consumption and not in proportion to an accidental sale made this year as against a year ago; and by virtue of the very fact that the man has got to buy balls if he wants to play and he has not got to buy clubs, you will get your revenue, because he is so deeply intrested that he will not give up. He must buy the balls; whereas he will say, "Tennis racquets have gone up to a pretty high price, and I guess my old one, restrung, will do for this year," or "I will not buy a new golf club this year." In other words, the business of the sale of clubs will be hurt very much more quickly than the sale of the balls.

That is also true to a large extent of baseballs and footballs and the other lines. I would not urge that if I did not feel that you can

collect just as much total revenue of that particular industry by putting your entire tax on the ball as you can be attempting to spread it out thinner over any other industry.

Mr. RAINEY. Are you leaving with us several copies of your brief? Mr. SPALDING. I have several copies here. I do not know what the custom is about printing briefs.

Mr. RAINEY. You can have that printed in the record if you

want to.

Mr. SPALDING. Very well.

Mr. RAINEY. And you may revise your remarks and make any changes that are necessary.

Mr. STERLING. Did you say clubs were not covered by the tax under the present law?

Mr. SPALDING. Yes, sir.

Mr. STERLING. I think you would render this committee a great service if in extending your remarks you would put in everything that you know of that comes within the sporting-goods category.

Mr. SPALDING. You mean athletic goods? Of course, the term "sporting goods" covers guns and fishing tackle and everything else. Mr. STERLING. Yes.

Mr. SPALDING. I do not know that I can do any better for the committee than to send you one of our general catalogues. That covers every article. I shall be very glad to do that, but I should also be very sorry to see the committee spread itself out over everything, because it has become a serious matter in our accounting to-dayhow we can prepare and file the reports which we are required to file. You see, the difficulty we are confronted with is this, that everything we sell is not taxed. It could not be taxed unless you went out to tax clothing and all merchandise. If the committee should decide finally that they want a general consumption tax of 1 per cent or 2 per cent upon sales, I would say all right, because that is something we can find very easily.

Mr. STERLING. How many different articles do you make and handle?

Mr. SPALDING. Individual articles?

Mr. STERLING. Yes.

Mr. SPALDING. I could not give you the number, but our catalogue runs into the thousands.

Mr. STERLING. Thousands?

Mr. SPALDING. Yes. You see, you take it in the baseball line, and there is the subject of baseball uniforms. There is a uniform made for the special purpose of playing baseball, but it is a garment which any dealer can make up. We make initialed sweaters and we make bathing suits and all kinds of garments of that kind-bath shoes and athletic wear of all kinds. You can see that the shoes that these felows use for baseball can be used for other purposes. The shoe that is made for any special purpose by manufacturers can be usually adapted for baseball. Should that be subject to a tax?

Mr. STERLING. No; I would not say that a shoe that is used in that way that anybody could wear, that can be used for general purposes should come within the category.

Mr. SPALDING. What about the other shoes that are used by tennis. players? They are bought by thousands of people for other things, who do not want to play tennis.

Mr. STERLING. I should not say that they came within the category of athletic goods-I mean strictly athletic goods.

Mr. SPALDING. Well, you would come, probably, onto a few shoes that are so incidental in their purpose that they could not be used for any other purpose; but the bulk of our goods are not confined specifically to use in a particular sport. The difficulty is that there are so many details in our line that it would take all day to mention them, and I do not know how the committee drafts legislation, or particular sections; whether they have a subcommittee to consider each section or not.

Mr. RAINEY. We are drafting this to get a lot of money.

Mr. SPALDING. Yes; I understand that, but I do not know whether it is intrusted to subcommittees or to individuals to draft a particular section. I should be very glad to hold myself at the disposal of the committee to come down to Washington at any time to cover details; I do not mean to argue on the subject generally, but to assist when you are drafting the thing into form.

Mr. RAINEY. We want to draft this bill for additional revenue, and we are unwilling or reluctant to take up any proposition to take

away revenue.

Mr. SPALDING. You know, we are also subject to the income tax and the excess-profits tax, and the individual owners are subject to

the taxes.

Mr. RAINEY. Yes. If we exempted individual owners on account of other taxes we would not have anything to draw an additional amount from, at all.

Mr. SPALDING. If any individual tax you might place would have the result of so decreasing the amount of sales in any particular industry that its profits were reduced to a point where you would collect smaller excess and income taxes from the businesses and the owners deriving their incomes from the businesses

Mr. RAINEY. From the standpoint of raising taxes of course we do not want to do that.

Mr. HAWLEY. You submitted a list of seven specifications there. Mr. SPALDING. Yes.

Mr. HAWLEY. You mentioned four of them in your discussion. Mr. SPALDING. I mentioned four because I did not want to go into details. Our business has so great a variety.

Mr. HAWLEY. I want to just ask this question about the other three: In the recommendations you made on the other three classifications you did not discuss or oppose an increase of revenue on them?

Mr. SPALDING. At the present time there is no tax on those other classifications, and I did not propose putting on any tax. Of two of them, the implements for these field games and the gymnasium apparatus, the sale is trivial under any circumstances, and in war times. it is going to be very much reduced. The skate industry is in pretty had condition at present. The largest skate manufacturers in the country, Barnes & Berry, of Springfield, Mass.. are in the hands of receivers. We have many other lines that are falling off. I do not think a large tax could be derived from skates without killing the industry to even a larger extent than it is now. You know there is a Member of the House of Representatives who is engaged in the skate business.