with imported shoes and (2) shops producing footwear of lower grades. In Lima shops of the first classification are to be found in large numbers.

PROMINENCE OF CHINESE IN THE INDUSTRY.

The Chinese are especially prominent in the shoemaking trade of the capital. They occupy a whole block on the farther side of the Rimac River, as well as many individual shops in other parts of the city. One Chinese owns a chain of three retail stores in Calle Rastro de San Francisco, while two other members of his family maintain stores on adjacent streets. In some shops the proprietor is the sole workman, perhaps assisted by one or more members of his family. In other shops 8 or 10 native Peruvians are employed in upper stitching, the vamps being sent to individual houses for bottoming and finishing.

The average price paid to employees for making a pair of men's fine shoes is $1; for making a pair of women's fine shoes, $0.90; grades of lower quality are paid for in proportion. It is clear that the labor problem is not a difficult one in Chinese shops. The sole leather used is entirely of native tannage. The upper stock, laces, eyelets, hooks, and other findings are not imported directly but are purchased in very small quantities at a time from local wholesale houses or general importers making a specialty of this class of trade. Chinese shoemakers work on a very small capital, and their expenses are amazingly low. In many cases the one room that serves for a workshop is also used as kitchen, bedroom, and dining room.

Competition from this source is felt chiefly in medium-grade lines of men's, women's, and children's shoes, but the product of Chinese shops also affects to a certain extent the sale of high-grade American footwear, especially in women's and misses' lines. One prominent Lima retail dealer who specializes in American-made footwear described the way in which the Chinese shoemaking industry indirectly affected his business as follows:

A number of Chinese shops have workmen who have become expert in making shoes directly modeled from drawings and cuts obtained from American shoe catalogues or from late issues of shoe and leather trade papers. These shoes, when completed, are sold to servant girls and women of the "cholo" class at prices ranging from $4 to $7. Three or four months later, when the originals of the drawings reach my shelves and are displayed to the trade, I find it extremely difficult to dispose of them. Having been worn around the city by servants and people of the poorer classes, my fashionable customers consider the style no longer new or attractive and refuse to purchase them.

While Chinese shops do not offer serious competition to imported footwear at the present time, the number of these establishments is slowly increasing. The quality and quantity of the output of individual shops is being improved, moreover, and competition from the Chinese shoemaking industry is one of the problems which retail dealers handling medium-grade and high-grade imported footwear will find more rather than less difficult in the future.

In addition to the Chinese, the Italians form an important share of the total number of shops producing shoes which compete to a certain extent with the imported goods. These two nationalities monopolize the trade in Lima. In the towns outside of the capital Italian and Peruvian shoemakers are found in about equal propor

tions, with a scattering of French. The output of a typical Italian shop in Lima on a Saturday in March, 1917, was as follows: Seventy pairs, comprising men's blucher high cuts, American last, high toe, box calf, native tanned sole leather, to retail for $6; same in blucher oxfords, to retail for $5; women's 8-inch lace boots, vici kid, Cuban heel, native tanned sole leather, to retail for $6.20; women's patent ankle-strap pumps, Cuban heel, sole leather of native tannage, to retail for $4.50; miner's high 14-inch boots, American last, blucher style, heavy sole of native tannage, upper stock of native tannage, to retail for $7.50; farmer's heavy, rough shoes, pegged sole of native tannage, upper stock of native tannage, to retail for $4.65. Only cutting and upper stitching is completed in the establishment, bottoming and finishing being done in the homes of employees. The extent to which the products of this type of shoe shop compete with imported boots and shoes is taken up elsewhere in the sections devoted to the requirements of the Peruvian market in particular lines of footwear.

LOWEST GRADE OF LOCALLY MADE SHOES.

Shops of the second classification referred to above as those producing shoes of a cheaper grade, which in no sense compete with imported goods, are generally found in the small towns of the mountains and in the Provinces to the north and south of Lima. The materials used by these small shops are mostly sole and upper leather of native tannage, and poor tannage at that. Imported upper stock of an inferior quality is sometimes used in the larger towns. Canvas slippers, cowhide sandals, and sandals made of old automobile tires are also turned out by these shoemakers. The native owner of the shop is in many cases the sole workman, and he often tans on the premises the leather used in fashioning his product. Sample No. 22 sent with this report is a type of the shoes worn by thousands of Indians who neither can afford to wear anything better nor know of anything better in the way of foot protection.

A native shoemaker who can acquire an old discarded automobile tire can make as many as six pairs of sandals and be absolutely certain of disposing of his production within a short time after they are completed. A rawhide thong and a strip of the automobile shoe fashioned into a rough sole makes a very serviceable article, and they are eagerly sought by natives in all parts of the Republic. Twentytwo cents gold was the price paid for a pair of such sandals in Tia Bahia, a town a few miles west of Arequipa, in March, 1917, and this figure was considered to be unreasonably low.

WAGES OF WORKERS IN THE SHOEMAKING INDUSTRY.

No weekly or daily wages are paid in the great majority of Peruvian shoeshops. The piecework system is employed universally in the better class of shops. In the most fashionable of these establishments, where excellent workmanship is required, as much as 4 soles (about $2) is paid a workman for making a pair of either men's or women's shoes. This figure generally includes all operations except cutting, which is done in most cases by the proprietor. For making children's shoes of the best grade workmen receive from 1.50

soles (about $0.75) to 2.50 soles (about $1.25). All necessary materials and findings are supplied by the firm. The average workman in Lima can make one pair of fine shoes in each working day of nine hours. In some cases uppers are separately stitched, for which operation workmen receive 1 sol (about 50 cents) per pair.

The bulk of custom-made shoes are made for less money than is paid for the finest grade mentioned above. In many shops workmen receive 2.50 soles. (about $1.25) for making a pair of high-grade shoes and 2 soles (about $1) for making a pair of medium-grade shoes, men's in both cases. For making women's high-grade boots the wages paid are 2.40 soles (about $1.20); for women's high-grade Oxfords the price is 2.10 or 2 soles (about $1.05 and $1 respectively). From 1.30 soles (about $0.65) to 1.70 soles (about $0.85) is paid for making a pair of women's medium-grade boots or shoes, according to the quality. Proprietors in Lima custom shops state that few employees can make over one and one-half pairs of men's shoes a day. In women's medium-grade lines two pairs a day can be turned out by a good workman. The average wage in all custom shoemaking establishments producing footwear that competes with Americanmade goods is not over $1.25 gold per day. The daily wages earned by workmen in shops producing shoes of cheaper grade will average 85 cents gold. Employees in Chinese shops are principally native Peruvians, and their average earnings are probably between 60 and 70 cents per day.

MARKET FOR SHOE MACHINERY.

The prospects for the sale of additional shoe machinery in the near future are not especially promising. There are only three factories using power machinery in the entire country at present, only one of which has an equipment of any importance. The total number of machines of all descriptions (English, German, and American) is less than 150. For upper stitching Singer sewing machines are used by a large number of small shoemaking establishments, which perform all other operations by hand. The United Shoe Machinery Co. of South America (a branch of the United Shoe Machinery Co. of Boston, Mass.) has maintained an office and warehouse in Sanitago (Chile) for a number of years, and a representative from this office visits the Peruvian trade regularly. A complete Goodyear set and other general machinery has recently been sold to two Peruvian factories. Reference has been made on an earlier page to the equipment and nature of the output of the Lima and Arequipa factories. None of the importing houses that specialize in leather and findings are devoting any attention to the machinery end of the business at present.

VI. MARKET FOR SHOE LEATHERS AND SUPPLIES.

POSITION OF AMERICAN GOODS.

Peru offers an attractive field for the sale of shoe leathers and supplies at the present time, and, moreover, the possibilities of the market have not as yet been well developed by American exporters. Before the war these articles came very largely from Germany, France, England, and Italy, with only a relatively small percentage of the total imports from the United States. The almost complete shutting off of Continental sources of supply, however, has provided an unprecedented opportunity for the formation of new connections with Peruvian houses that never before purchased leather and shoe supplies from the United States.

Several American firms have already gained a foothold in this market which otherwise would have taken years of effort to obtain. There exists a wide difference of opinion among leading importers as to whether the United States will be able to retain this business when European factories are once more free to devote their attention to the Peruvian field. A clear understanding of several factors which affect the trade in shoe leathers and supplies will help American manufacturers to gauge the prospects for future business in their individual lines.

FACTORS AFFECTING AMERICAN TRADE.

In the first place, the principal importers of shoe leathers and supplies, with the exception of one American firm, are Europeans of various nationalities. Through custom and tradition, these houses have become thoroughly used to placing their orders with European firms, and although they may hold the agency for one or more lines of American goods, the natural tendency is for them to give the preference to Europe. A number of Peruvian establishments have been buying shoe leathers and supplies from British and Continental manufacturers for more than two generations, and business friendships of such long standing are not easily broken. Among these merchants, however, so far as personal investigation can ascertain, there exists no prejudice against goods of American manufacture. On the contrary, a lively interest is being manifested in establishing connections in the United States. Many of these importing houses maintain a special department for shoe leathers and supplies; others specialize in goods required by the domestic shoe manufacturing industry. Houses handling shoe leathers also handle shoe supplies, although there are several exceptions to this rule.