LIBRARY University of California^ IRVINE / 62 , CONGRESS 1 HOUSE OF REPRESENTATIVES ( 3d Session / I No. 1447 HEARINGS BEFORE THE COMMITTEE ON WAYS AND MEANS HOUSE OF REPRESENTATIVES VOL. I SCHEDULES A AND B INDEX IX FINAL VOLUME WASHINGTON GOVERNMENT PRINTING OTTIOE 1913 COMMITTEE ON WAYS AND MEANS. HOUSE OP REPRESENTATIVES. OSCAR \V. UNDERWOOD, Alabama, Chairman. CHOICE B. RANDELL, Texas. ANDREW J. PETERS, Massachusetts. FRANCIS B. HARRISON, New York. A. MITCHELL PALMER, Pennsylvania. WILLIAM G. BRANTLEY, Georgia. TIMOTHY T. ANSBERRY, Ohio. DORSEY W. SHACKLEFORD, Missouri. SERENO E. PAYNE, New York. CLAUDE KITCHIN, North Carolina. JOHN DALZELL, Pennsylvania. OLLIE M. JAMES, Kentucky. SAMUEL W. McCALL, Massachusetts. HENRY T. RAINEY, Illinois. EBENEZER J. HILL, Connecticut. LINCOLN DIXON, Indiana. JAMES C. NEEDHAM, California. CORDELL HULL, Tennessee. JOSEPH W. FORDNEY, Michigan. WINFIELD S. HAMMOND, Minnesota. NICHOLAS LONGWORTH, Ohio. DANIEL C. ROPEE, Clerk. PREFACE. Tariff hearings were begun on January 6, 1913, pursuant to the following notice: The Committee on Ways and Means announces to all concerned that it will hold hearings at Washington, D. C., looking to the revision of the present tariff act as per the following schedule: Schedule A: Chemicals, oils, and paints; Monday, January 6, 1913. Schedule B: Earths, earthenware, and glassware; Wednesday, January 8. Schedule C: Metals and manufactures of; Friday, January 10. Schedule D: Wood and manufactures of, and schedule L: Silk and silk goods; Monday, January 13. Schedule E: Sugar and manufactures of, and Schedule H: Spirits, wines, and other beverages; Wednesday, January 15. Schedule F: Tobacco and manufactures of, and Schedule M: Pulp, paper, and books; Friday, January 17. Schedule G: Agricultural products and provisions; Monday, January 20. Schedule I: Cotton manufactures; Wednesday, January 22. Schedule J: Flax, hemp, and jute, and manufactures of; Friday, January 24. (Schedule K: Wool, and manufactures of; Monday, January 27. Schedule N: Sundries; Wednesday, January 29. Free list: Administrative features and miscellaneous: Friday, January 31. The hearings will be conducted in the hearing room of the committee, 321 House of Representatives Office Building. Sessions will begin at 10 a. m. and 2 p. m. unless otherwise ordered. Persons desiring to be heard should apply to the clerk of the committee previous to the date set for the hearing, to be assigned time on the program for that day. In making such application the following information should be given: Name; permanent address; temporary address in Washington; person, firm, or corporation represented; paragraphs of the act concerning which testimony will be given; brief mention of attitude to revision of the tariff; and the amount of time desired. In addition to this the person intending to give testimony should forward in advance to the clerk a copy of his brief and of any documents he desires to file with the com- mittee. In preparing this brief it is desired that the following outline be observed: 1. State by items and paragraphs the changes in duties recommended, assigning in each instance reasons for recommendations. 2. Estimate the increase or decrease of imports by paragraphs and items, which would result from suggested modifications of duties. 3. Explain methods or experience relied upon in making estimates. 4. Suggestions as to changes in phraseology of present tariff law. 5. Suggestions as to the betterment of the administrative features of the present law. All briefs and other papers filed with the committee should have indorsed on them the name and address of the persons submitting them and the numbers of the para- graphs of the present tariff law to which they relate. 0. W. UNDERWOOD, Chairman. DECEMBER 11, 1912. in IV PREFACE. The time devoted to the hearings in accordance with this notice was distributed by tariff schedules as follows, the committee sitting as a rule in both day and evening sessions: Date. Schedule A January 6 and 7. Schedule B January 8 and 9. Schedule C January 10, 11, and 14. Schedules D and L January 13. Schedules E and H January 15. Schedule F January 17. Schedule M January 17 and 18. Schedule G January 20 and 21. Schedule I January 22 and 23. Schedule J January 24 and 25. Schedule K January 27 and 28. Schedule N Januaiy 29 and 30. Free list, Administrative and Miscellaneous January 31-February 1. Beginning with January 10 and with the testimony on Schedule C, all witnesses appearing before the committee were sworn before giving testimony. The stenographic minutes of each day's proceedings, together with the briefs and memorials filed, were printed and distributed usually on the day following and about 2,500 copies of this first print were thus disposed of through a mailing list of requests and on personal applica- tion. Copies were sent to each witness with the request that he make necessary corrections for clearness in his statement and return the revised copy to the clerk. Such corrections have been observed in preparing this revised edition of the hearings. In this revised edition the chronological order of the statements has been disregarded and the oral testimony and the papers filed on each subject have been grouped and arranged as near as practicable, according to the paragraphs of the present tariff law. A large number of letters filed with the committee, merely stating the attitude of the writer or substantially repeating arguments already appearing; in the hearings, have not been printed in this revised edition but suchletters are in the committee's files and accessible to the com- mittee. By this means the size of the volumes has been somewhat reduced, the printing has been expedited, and repetitions and dupli- cations avoided. DANIEL C. ROPER, Clerk, Committee on Ways and Means. FEBRUARY 1, 1913. CONTENTS. SCHEDULE A. Page. Preface Ill Date of hearings IV Outline of briefs IV Time devoted to hearings IV Acme White Lead & Color Works, Detroit, Mich., white lead and colors 353 Allen, Hon. A. G., telegram 414 American Alkali & Acid Co., Bradford, Pa. , oxalic acid 54 American Camphor Refining Co., Boston, Mass., crude and refined camphor.. 128 American Chicle Co., New York, N. Y., gum chicle 234 Arnold & Co., New York, N. Y., soaps, etc 391 Arnold, Francis R., New York, N. Y., fancy, toilet, and castile soaps, etc 391 Badcock, Robert, jr., New York, N. Y., cod oil 288 Baker & Adamson Chemical Co., Easton, Pa., photographic chemicals 35 Baker & Bro., New York, N. Y., synthetic and refined camphor 128 Baker Castor Oil Co., New York, N. Y.: Castor seed, flaxseed, castor oil 251 Soluble oil, alizarin 257 Batten Co., New York, N. Y., perfumery 397 Baugh & Sons Co., Philadelphia, Pa.: Charcoal, blood char, etc 119 Gelatin, glue, and glue size 221 Bauer Chemical Co., New York, N. Y., chemicals 374 Beckton Chemical Co., Newark, N. J., lithopone 329 Berry Bros., varnish, quicksilver, white lead, and white pigments 321 Bird & Co., New York and Boston, varnishes 312 Black Horn Leather Co., Great Bend, Pa., fish and cod oils 296 Blumauer, Frank, Drug Co., sponges 429 Borgfeldt, Geo., & Co., chemicals, oils, paints, and perfumery, etc 66 Bosson & Lane, Atlantic, Mass., alizarin and soluble oil, castor oil 254 Bowker, W. H., Boston, Mass., arseniate of soda 416 Boykin, S. G., Atlanta, Ga., Epsom salts 236 Bredt & Co., New York, N. Y., tannic acid or tannin 54 Brigham, Louis S., Randolph. Vt., sheet gelatin 198 Brigham Sheet Gelatin Co., Randolph, Vt 198 Bright, F. S., Washington, D. C., olive and cottonseed oil 267 Brindle, Frank M., chemicals, oils, paints, and perfumery, etc 66 Brown, H. W., and others, laundry soap 412 Buddecke, Win. A., Mineral Point, Mo., barytes 301 Callahan, P. H., Louisville, Ky., varnish gum, china-nut and soya-bean oils. . 315 California firms regarding duty on cream of tartar, crude tartar or wine lees, cream of tartar, tartaric acid 99 Campbell & Co., New York, N. Y., dyestuffs, logwood and hematine extracts, pastes, etc 197 Carpenter, H. B., Newark, N. J., animal charcoal 305 Cassella Color Co., New York City, fast vat dyes 163 Chamber of Mines & Oil, Los Angeles, Cal. , borax, borate products 122 Cleveland Tanning Co., Cleveland, Ohio, cod oil 293 Cochrane Chemical Co., Boston, Mass., sulphuric acid 41 Cocorullo, Ferdinand, New York, N. Y., mannit 87 Colgate & Co., New York, N. Y., santonin, perfumed and laundry soaps 398 Columbia Western Mills, West Pullman, Chicago, 111., oils 73 Coulston & Co., New York, N. Y., paints, colors, pigments, etc 353 Crescent Burner Manufacturing Co., New York, N. Y., cut steatite or German lava 133 Crowdus Drug Co., Dallas, Tex., medicinal preparations 377 V VI CONTENTS. Page. Cushman, Allerton S., Washington, D. C., chemical industry 8 Davis, Albert, New York, N. Y., sponges 431 Day & Son, New York, N. Y., gelatin, glue, etc 206 Debie, Dr. J., St. Louis, Mo., chemical industry 7 Delany, Charles, Philadelphia, Pa., glue and gelatin 204 Dick, Joseph, New York, N. Y., bone glues in cake form 217 Dippel, William J., New York City, nitrate of ammonia 89 Dodge & Olcott Co., New York, N. Y., oil of cloves, drugs, chemicals, etc 68 Dow Chemical Co., Midland, Mich., bleaching powder, or chloride of lime. . . . 114 Drury, Jno. H., Troy, Ohio, chlorate of potash 371 Elson & Brewer, New York, N. Y., salicylic acid 30 Emery, Lewis, jr., Bradford, Pa., oxalic acid 54 Ewing Fox & Co., New York, N. Y., calcimines, paints, and varnishes 324 Geigy-ter Meer Co., New York, N. Y., tannic acid and nutgall extracts 53 Goodrich & Co., Milwaukee, Wis., linseed oil 260 Grasselli Chemical Co., Cleveland, Ohio, acetate of lead, sulphide and chloride of zinc 326 Greene, Hon. William S., sperm oil 287 Griffin Drug Co., Peekskill, N. Y., white lead (whiting, Paris white) 323 Gudger, Francis A., New York, N. Y., pyroxylin compounds 166 Hamilton, Francis E., Esq., New York, salicylic acid 18 Harshaw, Fuller & Goodwin Co.. Cleveland, Ohio: Cream of tarter, tartaric acid 45 Crude and refined glycerin 226 Tartrate of lime, or wine lees, crude 88 Hart, Albert, New York, N. Y., raw sponges 419 Heller & Merz- Co., Buffalo, N. Y., coal-tar dyes 137 Heller & Merz Co., Newark, N. J., ultramarine blue 310 Heyden Chemical Works, New York, N. Y., salicylic acid 18 Hibberd, N., San Francisco, Cal., whale oil, sulphur bottoms, finbacks, etc... 293 Higginson Manufacturing Co., Newburgh, N. Y., whiting and Paris white 323 Howard, Henry, Boston, Mass., general 1 Hubbard, R. S., Philadelphia, Pa,, paints 322 Huff, Dr. L. J., Los Angeles, Cal., olive oil 262 Irsch, Frank E., New York, N . Y., glue and gelatin 208 Italian Chamber of Commerce, New York, N. Y.: Argols and wine lees, citrate of lime, lemon juice, licorice root, etc 101 Olive, peppermint, and whale oil 284 Job & Co., New York, N. Y., cod oil 288, 298 Johnson & Johnson, New Brunswick, N. J.: Chemical and pharmaceutical preparations 6 Healing, court, and adhesive plasters 378 Jones & Co., San Francisco, Cal., castor, rapeseed, and hempseed oil, etc 257 Klipstein, E. C., New York, N. Y., indigo extracts or pastes, etc 227 Krebs, H. J., Newport, Del., lithopone, crude baryta, and zinc ores 300 Kubie Co., New York, X. Y., chicle 234 Kuh & Valk Co., New York, N. Y., glue 207 La Manna, Azema & Farnan et al., New York, N. Y., olive oil 286 Lamar Chemical Works, Newark, N. J., phosphorus 357 Laundry soap manufacturers, laundry soap 400 Leon, Maurice, New York, N. Y., medicinal soaps, alcoholic and nonalcoholic perfumery 389 Leousi, Clonney & Co., New York, N. Y., bleached sponges 428 Listers, A. C'., Works, Newark, N. J., animal charcoal 305 Lockwood, Bracket t & Co., New York, N. Y., castile soap 414 Longworth, Hon. Nicholas, of Ohio, telegram 402 McCormick & Co., Baltimore, Md., juniper berries, etc 168 McCormick, R. A., Baltimore, Md.. juniper berries, insect flowers, gum asa- fetida, marjoram leaves, celery seed, etc 168 Mallinckrodt et al., tannic, gallic, and pyrogallic acid, caffeine, chloroform, ethers, alkalies, alkaloids, etc 46 Mariani, C. A., New York, N. Y., olive oil 278 Marx & Rawolle, New York, N. Y., refined glycerin 224 Mechling Bros. Manufacturing Co., Camden, N. J.: Epsom salts 250 Silicate of sod a 417 CONTENTS. Vn Page. Mepham & Co., East St. Louis, 111., colors 356 Merck & Co., New York, N. Y., salicylic acid, crude iodine, opium, coca leaves, cocaine, morphine, etc 28 Merrimac Chemical Co., Boston, Mass.j hydrate of alumina, etc 94 Michigan Ammonia Works, Detroit, Mich., ammonia 98 Michigan Carbon Works, Detroit, Mich., charcoal 115 Miller, W. E., New York, N. Y., gelatins, glue, isinglass, fish glue 220 Mousanto Chemical Works, St. Louis, Mo., phenolphthalein , alkalies, and vanillin 79 National Association of Glue and Gelatin Manufacturers, Philadelphia, Pa., glue and gelatin 204 National Association of Tanners, Milwaukee, Wis., dying or tanning extracts. . 183 National Borax Co., San Francisco, Cal., borax, boracic acid, borate of lime... 121 National Wood Chemical Association, Atlanta, Ga., charcoal, acetate of lime, and wood alcohol 117 Natural Products Refining Co., Jersey City, N. J., bichromate of potash, sul- phuric acid 359 Newark Chamois Co., Newark, N. J., cod oil 293 New York Metal Ceiling Co., New York, N.Y., olive oil 285 New York Tanning Extract Co., New York, N. Y., quebracho extract 182 Niagara Alkali Co., Niagara Falls, N. Y., caustic potash 360 Nichols, W. H., jr.- epsom salts, sulphuric, muriatic, and nitric acids 36 O'Connell, Joseph F., coal-tar dyes or colors 158 Ohio Chemical & Manufacturing Co., Cleveland, Ohio, epsom salts 238 Orr, John B., Boston, Mass., bone glue and liquid fish glue 216 Orth, M. S.. Boston, Mass., tanning extracts, nutgalls, Persian berries, hem- lock bark,' etc 192 Pacific Coast Borax Co., New York, N. Y., boracic acid and borax 125 Pacific Mills, Cocheco Department, Dover, N. H., hydron blue 165 Paint Manufacturers' Association of the United States, Philadelphia, Pa., paints 322 Paint Manufacturers' Association of the United States, Detroit, Mich., white lead and colors . 353 Park & Tilford, chemicals, oils, paints, and perfumery, etc 66 Pennsylvania Salt Manufacturing Co., hydrate of alumina, etc 93 Perth Amboy Chemical Works, New York City, formaldehyde, paraformalde- hyde 77 Pfker & Co., New York City: Camphor, refined, etc 129 Citric acid, lime and lemon juice 43 Pfister & Vogel Leather Co., Milwaukee, Wis., Newfoundland oil 293 Philadelphia (Pa.) Quartz Co., Philadelphia, Pa., silicate of soda 418 Point Milling & Manufacturing Co., Mineral Point, Mo., barytes 301 Pomeroy & Fischer, New York City, paints, oils, and varnishes 348 Powers-Weightman-Rosengarteii Co., Philadelphia, Pa., citric acid, citrate of lime, lime juice 42 Pratt Laboratory, Atlanta, Ga., Epsom salts 236 Procter & Gamble. Cincinnati, Ohio, soaps 403 Providence Drysalters Co., Providence, R. I., blanc fixe and satin white 303 Purves, Austin M. , hydrate of alumina, etc 92 Queeny, John F., St. Louis, Mo., phenolphtalein, alkalies, and vanillin 79 Randolph, Hollins N., Atlanta, Ga., charcoal, acetate of lime, and wood alcohol 117 Reichard, F. A., New York, N. Y., dry colors 307 Ricksecker, Theodore, perfumeries, toilet waters, alcohol, and cologne 380 Ritchie & Co., New York, N. Y., glue 207 Roessler & Hasslacher Chemical Co., New York City: Ceramic colors (metal oxides) .. 345 Cyanide salts and potassium cyanide 371 Rueb & Gleichman, Rotterdam, barytes 302 Russell Borate Mining Co., Ventura, Cal., borax, boric acid, and borate of lime. 124 Russell, Henry M., Ventura, Cal., borax, boric acid, and borate of lime 124 Seabury & Johnson, New York City, surgical dressings 380 Schering & Glatz, New York, N. Y., camphor 130 Schoellkopf, J. F., Buffalo, N. Y., coal-tar dyes 134 Schoellkopf, Hartford & Hanna Co., Buffalo, N . Y., coal-tar dyes 134 VTTT CONTENTS. Page. Sholes, J. G., Cleveland, Ohio, Epsom salts 238 Simon, George, Garfield, N. J., salicylic acid 18 Skiddy, W. W., Stamford, Conn., tanning extracts, dyewood, and bark 170 Smith, Alfred H., Co., chemicals, oils, paints, and perfumery, etc 66 Snevily, M. B., New York City, olive seed, flaxseed, and hempseed 75 Somers, Arthur S., New York City, dry colors (chrome colors, coal-tar dyes, paints, Paris green) 330 Spencer, Kellogg & Sons, New York City, linseed, flaxseed, and hempseed -i at OEcn oils 81, 259 Stengel & Rothschild, Newark, N. J., oils and chemicals 292 Summers, Dr. S. Lewis, Fort Washington, Pa., acetyl-salicylic acid Tartar Chemical Co., Brooklyn, N. Y., argols 112 Tennant Sons & Co., New York City, nitrate of ammonia 89 Tirrell, Frederick N., Boston, Mass., chalk, Paris white, whiting (natural, ground, or bolted) 131 Todd, T. S., & Co., New York City: Alizarin 252 Blanc fixe and satin white 303 Verona Chemical Co., North Newark, N. J., spices, peppermint, clove, pimento, allspice, etc 70 Victor Chemical Works, Chicago, 111., Epsom salts 246 Vogel, August, Milwaukee, Wis., tanning extracts, ethers, sulphuric acid 183 Waddell, Robert S., Peoria, 111., chlorate of potash 369 Wadhams, William H., New York City, soap 403 Walton Co., Philadelphia, Pa., cod oil 292 Washburn, A. H., enameled paints, oil, varnish, zinc oxide 312 Watson, Herbert, Charles County, Md., bicarbonate of potash 83 Weil, Jacob, New York City, medicinal preparations 375 White, William A., gallic and pyrogallic acids 31 Wilckes, Martin Wilckes Co., New York City, lampblack (bone, ivory, or vege- table) 304 Williams, C. K., & Co., Easton, Pa., ourl (siennas, lead, and bichromate of potash or soda) 307 Wrigley Co., Chicago, 111., chicle 235 Yahr & Lange Drug Co., Milwaukee, Wis., medicinal preparations 376 Zucca, Antonio, olive oil, cottonseed oil 274 SCHEDULE B. Page. Agard, E. A., Fairbury, 111., glass bottles 760 Alabama Marble Co., and others, marble, etc 920 Allegheny Plate Glass Co., Glassrnere, Pa., and others, plate glass 835 Allegany Window Glass Co., Port Allegany, Pa., window glass 815 Altenberg, G. P., Cincinnati, Ohio, vacuum bottles, jars, carafes 752 American Association of Flint and Lime Glass Manufacturers, glass cutters 739 American Association of Portland Cement Manufacturers, cement, lime 438 American Carbon & Battery Co., St. Louis, Mo., carbon brushes, etc 697 American Clay Co., Akron, Colo., fuller's earth 543 American Clay Producers' Association, Macon, Ga., china clay 528 American Ever Ready Co., carbon clinkers 683 American Flint Glass Workers' Union, glass and glassware 710, 743 American Optical Co., Southbridge, Mass., spectacles, lenses, etc 862 American Plate Glass Industry, plate glass '835 Ansco Co., Binghamton, N. Y., lenses, cameras, etc 895 Armstrong, Theodore, Philadelphia, Pa., bauxite 520 Asheville Mica Co., Asheville, N. C., mica 555 Ashley, George W., Baltimore, Md., marble, etc 936 Association of American Portland Cement Manufacturers, cement, lime 449 Atlas Roofing Co., Xewburgh, N. Y., fire-brick tiles 435 Auerbach, Joseph S., New York, N. Y., plate glass 821 Baldwin, A. H., Washington, D. C., cement imports into Canal Zone 460 Barber, Asphalt Paving Co., asphalt 486 Bausch & Lorub Optical Co., Rochester, X. Y., spectacles, lenses, etc 882 Benton Chamber of Commerce, Benton, Ark., bauxite 521 Blake, Will T. , pottery 680 CONTENTS. DC Page. Boggs, F. C., Washington, D. C., cement 461 Borgfeldt & Co., New York, N. Y., pottery 676 Brantley, Hon. W. G., asphaltum 505 Brotherhood of Potters, white chinaware 631 Brown, S. H., Asheville, N. C., mica 555 Brown, W. Vance, Asheville, N. C., mica 556 Burgess, William, Trenton, N. J., pottery, china, etc 593 Burley & Tyrell Co., Chicago, 111., pottery 683 California Camera Club, San Francisco, Cal., lenses, etc 891 Carey, H. D., Scranton, Pa., cut glass 744 Casey, Charles L., Cambridge, Ohio, pottery 587 Champion Carbon Co., Cincinnati, Ohio, carbon 689 Champion Coated Paper Co., Hamilton, Ohio, china clay 530 Chavant Manufacturing Co., Jersey City, N. J., carbon 687 Chrystall, Ckarles B., New York, N. Y., pumice stone 484 City of Mobile, Mobile, Ala., asphalts 510 Clow & Sons, Chicago, 111., marble 941 Clyde, J. L., Olean, N. Y., glass bottles 707 Corliss Carbon Co., Bradford, Pa., carbons, etc 686, 702 Curie, Smith & Maxwell, New York, N. Y., stained window glass, etc 906 Cut Glass Manufacturers' Association, Brooklyn, N. Y., cut glass 751 Denny & Wright, Rome, Ga., asphaltum 505 Dorflinger, William F., glass cutters, etc 739 Feeney & Devanny Co., New York, N. Y., marble 940 Fies, Eugene, Birmingham, Ala., asphalts 506 Forrest, Edwin J., Pyriton, Ala., mica 561 Friedlaender, Oscar O., New York, N. Y., hollow glassware, shades, chimneys. 776 Gemnert, G., New York City, lenses, cameras, etc 897 Gennert, G. C., New York, N. Y., opera and field glasses, etc 883 Glass Bottle Blowers' Association Philadelphia, Pa., glass and glassware 709 Glassworkers' Union, Philadelphia, Pa., imported glassware 776 Gostling, Charles R., Eustis, Fla., kieselguhr (diatomite) 546 Grant, Adolph, & Co., New York, N. Y., tiles 437 Graves, Henry B., spectacles, lenses, etc 873 Great Southern Mica Co., Asheville, N. C., mica 556 Grindstaff, B. C., Asheville, N. C., mica 556 Guernsey Earthenware Co., Cambridge, Ohio, pottery 587 Hammill & Gillespie, New York, N. Y., fuller s earth 545 Hamilton, Alice, Chicago, 111., pottery 682 Hamilton, F. E., New York, N. Y., spectacles, lenses, etc 881 Hanold, Frank J., New York, N. Y., granite, etc 942 Hastings Pavement Co., New York, N. Y., asphalts 507 Hays, D. A., Philadelphia, Pa., glass and glassware 709 Henry Marble Co., Chicago, 111., marble 939 Hilton, H. R., window glass 803 Homer Laughlin China Co., Newell, W. Va., pottery 679 Howard, William M., Philadelphia, Pa., asphaltum 502 Huke, Herman W., Torrington, Conn., lime 464 Hutchins, Frank H., white chinaware G31, 365 "Icy-Hot" Bottle Co., Cincinnati, Ohio, vacuum bottles, jars, carafes 752 Iowa State Highway Commission, Ames, Iowa, asphalts 510 Italian Chamber of Commerce, New York, N. Y., pumice stone 480 Jackson & Co., New York, N. Y., and others, marble, etc 928 Jackson, C. D., New York, N. Y., marble, etc 928 Jacoby & Son Co., Philadelphia, Pa., marble 940 Jenkins, Harry, Alton, 111., glass bottles 703 Johnston Glass Co., Hartford City, Ind., window glass, etc 777 Johnston, J. R., Hartford City, Ind., window glass, etc 777 Jones, Jerome, Boston, Mass., earthenware, china, glass 612 Jost, Henry L., Kansas Citv, Mo., asphalts 509 Keene Mica Products Co., Keene, N. H., mica 562 King, J. B., & Co., New York, N. Y., and others, plaster rock, crude gypsum. . 471 Kirchberger, M., & Co., New York, N. Y., and others, glassware 765 Kolb, George, New York, N. Y., decorated china 668 Lane, T. M., stained window glass 901 Lesley, Robert W., cement, lime 438 Lessler, Montague, New York, N. Y., plaster rock, crude gypsum 470 X CONTENTS. Page. Limoges China Co., Sebring, Ohio, pottery 680 M. & G. Mica Co., Pyriton, Ala., mica 561 McDonald, Chas., Marble Co., Cincinnati, Ohio, marble 940 Marble Industry Employers' Association, New York, N. Y., marble 920 Marquardt Marble & Granite Co., St. Louis, Mo., marble 940 Mayer, Frederick E., Philadelphia, Pa., stained window glass 905 Mayer & Co., Philadelphia, Pa., stained window glass 901 Merrimac Chemical Co., bauxite 519 Meyer Co., New York, N . Y., quarry, tiles 436 Meyer, Max, New York, N. Y., lenses cameras, etc 899 Meyer, W. C., Spokane, Wash., electric-light bulbs 765 Mica Association, mica 551 Martin-Copeland Co., Providence, R. I., lenses, cameras, etc 900 Moore, R. M., New York, N. Y., moving-picture cameras 901 Morgan, Peter W., china clay 528 Moulton, H. G., Rockland, Me., cement 455 Mungesser Carbon & Battery Co., Cleveland, Ohio, carbon 696 Murphey, Elmer R., Chicago and New York, pumice stone 474 National Association of Granite Dealers, granite, etc 942 National Brotherhood of Operative Potters, pottery 635, 680 National Carbon Co. , Cleveland, Ohio, carbons 697 National Vial and Bottle Manufacturers' Association, glass bottles 707 National Window Glass Association, window glass 785 Neenan, J. M., window glass 788 Neilson, Winthrop C., Philadelphia, Pa., bauxite, alumina 510 Nelson, N. 0., Marble Co., Edwardsville, 111., marble 946 New England Portland Cement Co., Rockland, Me., cement 457 Newark Lime & Cement Manufacturing Co., Newark, N. J., crude gypsum 473 Munn, C. S., fluorspar 531 Ornamental Glass Manufacturers' Association, stained-glass windows 910 Pedrara Onyx Co., San Diego, Gal., onyx 941 Pennsylvania Salt Manufacturing Co., Philadelphia, Pa., bauxite 520 Perkins Goodwin Co., New York, N. Y., china clay or kaolin, earths, glassware. 529 Peoria Stone and Marble Works, Peoria, 111., marble, etc 939 Perry, John F., Bridgeton, N. J., glass bottles 707 Pitcairn, W. S., New York, N. Y., pottery 564, 580, 586 Pitkin, E. II., Chicago, 111., pottery, crockery, earthenware, china 607 Pure Carbon Co., Wellsville, N. Y., carbons,"etc 695 Reisinger, Hugo, New York. N. Y., carbons, etc 689 Republic Mining & Manufacturing Co., bauxite, alumina 510 Rhodes, James H., & Co., Chicago and New York, pumice stone 474 Richardson, John, Boston, Mass., china clay of kaolin 521 Richardson Co., Boston, Mass., china clay or kaolin 521 Rock Island Batteiy Co., Cincinnati, Ohio, coal-gas retort carbon, etc 697 Rockland & Rockport Lime Co., Rockland, Me., lime 464 Rosenberger, John A.. Alexandria, Ind., glass and glassware 710 Rosiclare Lead and Fluor Spar Mines, Rosiclare and Fairview, 111., fluor spar. 543 Rowe, T. W., Toledo, Ohio, glass, glassware, etc 710 Rudd, Henry W., New York, N. Y., asphalt 507 Salomon. F. A., & Bro., New York, N. Y., fuller's earth 545 Sargent, Paul D., Washington, D. C., asphaltum 502 Scammell, H. B., St. Louis, Mo., pottery 563 Schwarz, Laz. Mobile. Ala., asphalts 510 Scott, M. F., Benton, Ark., bauxite 521 Semon Bache & Co., Xew York, N. Y., window glass, plate glass 816, 848 Seneca Camera Manufacturing Co., Rochester, N. Y., lenses, etc 892 Sewall, Arthur W., asphaltum, bitumen 486 Sewall, John S., marble, etc 920 Shearn, Clarence J., New York, N. Y., lampshades and chimneys 775 Shipway & Bro., New York, N. Y., marble 941 Simmons, Fred G., Milwaukee, Wig., lake asphalts, petroleum residuum or blown-oil asphalts 506 Sisson Marble Co., Baltimore, Md., marble, etc 936 Solari, Luigi, New York, N. Y., pumice stone 480 Southern Asphalt & Construction Co., Birmingham, Ala., asphalts 506 Southern Gypsum Co., North Holston, Va., crude gypsum 467 CONTENTS. . XI Page. Speer Carbon Co., St. Marys, Pa., carbons, etc 685 Stackpole Carbon Co., St. Marys, Pa., carbons 686 Standard Diatomite Co. , Eustis, Fla. , kieselguhr (diatomite) 546 Standard Marble Works, Cincinnati, Ohio, marble 939 Standard Optical Co., Geneva, N. Y., spectacles, lenses, etc 873 Stevens, D. F., Danbury, Conn., window glass 820 Stone, William A., window glass 785 Storrs, Charles P., Owego, N. Y., mica 547 Taylor-Hobson Co., New York, N. Y., spectacles, lenses, etc 881 Thurston, F. W., & Co., Chicago, 111., pumice stone 485 Tilton Optical Co., Tilton, N. H., spectacles, lenses, etc : 880 Tomkins, Calvin, New York, N. Y., crude gypsum 473 Traitel, Benjamin D., New York. N. Y., marble 911 Underbill, Geo. H., Boston, Mass., lenses, cameras, etc 898 United States Incandescent Lamp Co., electric-light bulbs, electric lamps 763 United States Lens Co. , spectacles, lenses, etc 878 United States Potters' Association, pottery, china, etc 593 United States Stoneware Co., Akron, Ohio, stoneware 563 Vereinigte Lansitzer Glaswerke, A. G., New York Branch, glass and glassware. 708 Vermont Marble Co., and others, marble, etc 918 Voorhis, J. W., carbon clinkers 683 Waddell, R. J., & Co., New York, N. Y., schumachersche fabrik or German rubbing bricks, hones, and whetstones 478 Waling, Donald, Keene, N. H., mica 562 Watson Bros., Boston, Mass., mica 561 Watts, Ethelbert, consul general, Brussels, glass industry 820 Wells, Charming M., Southbridge, Mass., spectacles, lenses, etc 862 Wells, W. E., East Liverpool, Ohio, white tableware 636 Whitacre, J. J., white tableware 647 Wilder, Frank A., North Holston, Va., crude gypsum 467 Williams, Brown & Earle, Philadelphia, Pa. , lenses, etc 891 Wills, J. M., Akron, Ohio, stoneware 563 Witnesses, swearing of 946 Yost, George W., Bellaire, Ohio, glass bottles 707 SCHEDULE A. CHEMICALS, OILS, AND PAINTS. ZTTT SCHEDULE A. CHEMICALS, OILS, AND PAINTS. COMMITTEE ON WAYS AND MEANS, HOUSE OF REPRESENTATIVES, January 6 and 7, 1913. The committee met at 10 o'clock a. m., Hon. Oscar W. Underwood in the chair. Present with the chairman: Messrs. Harrison, Shackleford, Kitchin, James, Rainey, Dixon, Hull, Peters, Payne, Hill, Needham, Palmer, Longworth . The CHAIRMAN. The committee will come to order. The clerk will dispense with the roll call. STATEMENT OF HENRY HOWARD, BOSTON, MASS., CHAIRMAN OF THE EXECUTIVE COMMITTEE OF THE MANUFACTURING CHEMISTS' ASSOCIATION. Mr. HOWARD. Mr. Chairman, Mr. Weed is secretary of the Manu- facturing Chemists' Association, and he can not attend. I am appearing for the executive committee, being chairman of the executive committee. My name is Henry Howard. The CHAIRMAN. Henry Howard ? Mr. HOWARD. Henry Howard. The CHAIRMAN. Mr. Howard, the committee will be glad if you can make your statement in 15 minutes. Mr. HOWARD. I can easily do that. In view of the fact that the Manufacturing Chemists' Association of the United States has been assigned among the first to be heard at the opening hearing of your committee on January 6, it is perhaps proper that this association should first raise the question of the best method of procedure with respect to all investigations regarding Schedule A, to the end that the true conditions of the chemical industry may be fairly and accurately ascertained. Furthermore, this association must necessarily confine itself to the broad question of the character and method of investigation, as the association has not the available data necessary to enable it to speak specifically regarding the many and varied items of the chemical schedule. The association will therefore address itself to the funda- mental principle of expert investigation, pointing out in this regard certain errors and inconsistencies which have resulted from past methods of procedure, and leave the question ol the discussion of individual items to individual witnesses. The association has for years given much study to the question of tariff and tariff revision. As a result of the experience thus gained the association has reached, the conclusion that no adequate and TS'J.j!) VOL 113 I I 2 TARIFF HEARINGS. just revision of Schedule A can be had except after careful and expert investigation. The association advocated this principle at the time of the last revision in 1908-9. Again, in September, 1911, by resolutions at that time adopted, the association with unanimous consent embodied its views. Copies of these resolutions were sent to the members of your committee, with a tender of cooperation in any investigation which your committee should then undertake. The association again tenders its cooperation. The first question which arises is the creation of a proper forum for the taking of evidence and the ascertaining of the essential facts and data. The association feels strongly that no committee or body of the size of the Ways and Means Committee can, as a whole, con- duct an investigation which is so essentially technical as an investi- gation of the chemical industry. The very fact of the number pres- ent necessarily prohibits a scientific inquiry and results in the intro- duction of collateral issues foreign to the topic of discussion. Fur- thermore, two days, which is the maximum amount of time assigned by your committee to Schedule A, is hardly more than sufficient for presenting and cataloguing the many briefs from those who undoubt- edly wish to be heard. For some time the members of this association have held the opinion that a satisfactory investigation can only be conducted by a committee or commission, nonpartisan in composition, which shall have a tenure of office of sufficient duration to complete work of great magnitude, and which shall be clothed with the necessary authority to employ competent experts and hear the testimony of those possessing an accurate knowledge of the subject. The associa- tion has not changed its attitude in this regard; but, in the absence of an investigation by such a body, this association respectfully requests that your committee consider the advisability of delegating to a subcommittee of its own members, or other duly constituted bod} T , the authority to investigate the chemical industry, with power to employ sufficient and competent experts and to hear testimony. Such a subcommittee or body, when fortified by its own experts, should be able to conduct hearings orderly in procedure and scien- tific in character. No report should be required nor any legislation attempted until such time as the investigating committee had acquired sufficient data and knowledge of the industry to be able not only to comprehend the relation which eacJi product bears to the other products in its own schedule but also the relation which each product bears to the entire industry of the country. In this connection the association refers without comment to the report of Mr. Xagel, Secretary of Commerce and Labor. Apparently there exists with this department sufficient authority to conduct an expert tariff investigation by virtue of an act passed several years ago, it only requiring an effective appropriation to make this act of real working value. The association, however, does not pretend to discuss the validity of this act but rather offers it as a suggestion for the consideration of your committee in connection with the question of expert investigation, which alone is of fundamental importance. Your committee has already had under discussion the chemical schedule. Your Report on Schedule A, submitted to the House on February Hi. 1912, is a very comprehensive document, considering the limited amount of time which vour committee had to devote to SCHEDULE A. 3 the problem. The proposed bill which is embodied in the report known as H. R. 20182 contains many salutary changes in the ex- isting law and offers many changes in present classifications which would undoubtedly prove beneficial. The bill II. R. 20182, however, is far from perfect. The changes in classification are hardly fundamental, and the revision of rates is distinctly illogical in that the relation of raw material to finished product is persistently ignored, the relation of one product to another is apparently in many instances misunderstood, and there are many other errors which would undoubtedly be eradicated in the light of expert consideration. The report contains a glossary on Schedule A, marked "Appendix C." Tnis document is, however, little more than its name indicates, a mere glossary or translation of technical chemical terms into laymen's English. The information contained hi this document is but the a b c to a chemical education, and it is submitted without a suggestion of disrespect that the glossary is of practically no avail to the lay mind without the constant interpreta- tion of the chemical expert. In thus freely criticizing the bill and the accompanying report on Schedule A, our association does not wish to adopt the attitude of superior wisdom. On the contrary, it is with the greatest respect for the .enormous task before your committee that we venture to sug- gest that no adequate revision can be had under the ordinary meth- ods of procedure which have characterized revisions in times past. Regarding the question of adjustment of rates as between raw materials and finished product, our association has made a careful analysis of H. R. 20182 as compared with the act of 1909. For the purpose of this analysis the so-called "caucus print," which is Appen- dix B of your report, has been used. The "caucus print" gives definite data and an estimate of revenue, etc., for a 12-months' period regarding approximately 300 specific articles contained in the 76 paragraphs of the duitable list. Of these 300 articles, 97, or approximately one-third, may be classified as raw materials, and the rest, or approximately two-thirds, may be classified as finished product. Of the 97 different raw materials made dutiable under the pro- posed bill (H. R. 20182), 80 were entered free under the Payne act of 1909. Of the remaining 17 articles, the duty in almost every instance was increased from the rates under the existing law. The "caucus print" further shows that the total revenue derived from Schedule A under the Payne act for 1911 amounted to $12,966,545, while the estimated revenue for a 12-months' period under H. R. 20182 amounts to $16,170,157, or an increase hi revenue of nearly $3,500,000. This increased revenue, however, results entirely from the increase of rates on raw materials, the revenue from the above-mentioned raw materials under the act of 1909 amounting to $1,826,955, while the estimate for a 12-months' period for the same raw materials under H. R. 20182 amounts to $6,081,060, or an increase of approximately $4.000,000. At the same time, under the proposed bill, the rates of duty on finished products are very materially de- creased with the estimated result that the revenue for a 12-months' period on finished products would amount to $10,089,097 as against $11,139,590 revenue under the act of 1909, or an estimated decrease 4 TAEIFF HEARINGS. in revenue by virtue of the decrease in rates on finished products of more than $1,000,000. Thus it is apparent that the estimated increase in revenue under II. R. 20182 comes entirely from a most radical increase in rates on raw materials, an increase so great, that a loss in revenue on finished products of approximately $1,000,000, owing to a drastic decrease i i the average rate from about 25 per cent ad valorem to about 16 pe.' cent ad valorem, is not only offset but a net increase in revenue i > estimated of nearlv $3.500,000. A complete analysis, showing a comparison of the Payne Act and H. R. 20182 with respect to changes in duties on raw materials and finished products, may be found in a brief of this association printed in the Hearings and Statements before the Committee on Finance, United States Senate, March 14 to 22, 1912, at pages 438-454. This means a double hardship to the manufacturer. It not only removes his protection against the more favorable conditions of manu- facture existing in foreign countries, but it renders those conditions even more difficult, if not prohibitive, by taxing the basic materials which enter into the finished product. It is hardly conceivable that this result in its entirety was intended as a matter of policy by your committee, for such a policy, if pursued for all schedules, would inevitably bring disaster to many industries with the consequent hardship to labor unemployed. The result, in a large number of instances at least, must have been brought about by a misconception of the basic character of many commodities a misconception which will inevitably occur in the absence of a thor- oughly expert investigation. The American manufacturers are not only in competition with each other, but they arc also in competition with the great German syndicates, combinations which under the laws of this country would undoubtedly be declared illegal and void. These large German com- binations effectually control the market, regulate prices, and are able to dump surplus product into this country at prices against which our domestic manufacturers can not compete. The existence of the German syndicates is recognized in the report of your committee. The question of the dumping of surplus product into this country by foreign manufacturers is a matter of most serious concern to the chemical industry. The Manufacturing Chemists' Association strongly recommends to your committee a thorough consideration of this im- portant subject, and in this regard calls attention to section 6 of the Canadian customs tariff act of 1907. which provides as follows: In the case of articles exported to Canada of a class or kind made or produced in Canada, if the export or actual selling price to an importer in Canada is less than the fair market value of the same article when sold for home consumption in the usual and ordinary course in the country whence exported to Canada at the time of its exportation to Canada, there shall, in addition to the duties otherwise established, be levied, collected, and paid on such article, on its importation into Canada, a special duty (or dumping duty) equal to the difference between the said Selling price of the article for export and the said fair market value thereof for home consumption; and such special duty ('or dumping duty) shall be levied, collected, and paid on such irticle, although it is not otherwise dutiable. Provided, That the said special duty shall not exceed fifteen per cent ad valorem in any ca^e. The higher cost of labor in this country, as compared with foreign countries, is a disadvantage which daily confronts our domestic manufacturer. On pages -'-505 and 37U of your report statistics are SCHEDULE A. 5 given which throw much light on the difference between this country and Germany. From this authority it appears*that for 1910 there were employed in this country in the cnemical industry 311,537 officials and employees, at a total salary or wage of $197,251,000, or an average of $633.12 per man. The statistics given for Germany show the average salary or wage in 172 different establishments to be from $291.55 to $318.44. These and many other disadvantages are all factors in drafting any revision of the tariff which shall be adequate and just. It is submitted, in conclusion, that if the interests of the manu- facturer are to be considered and the high standard of the Ameri- can wage earner to be maintained, your committee should at the very outset take under most careful consideration the best method of conducting its investigations, to the end that, whatever the theory of revision may be, the revision, when made, shall contain a readjust- ment of classifications and rates which shall be economically and scientifically just. The Manufacturing Chemists' Association of the United States comprises the following members: Barrett Manufacturing Co., 17 Battery Place, New York City; Baugh & Sons Co., 20 South Delaware Avenue, Philadelphia, Pa.; Butterworth & Judson Co., 60 Wall Street, New York City; Henry Bower Chemical Manufacturing Co., 2185 Grays Ferry Road, Phila- delphia, Pa.; The Cassella Color Co., 182 Front Street, New York City; B. P. Clapp Ammonia Co., 257 Broadway, New York City; Cochrane Chemical Co., 55 Kilby Street, Boston, Mass.; Columbia Chemical Co., 1618 Frick Building, Pittsburgh, Pa.; Columbia Chem- ical Works, 11 Broadway, New York City; Consolidated Color & Chemical Co., 122 Hudson Street, New York City; Contact Process Co., Buffalo, N. Y.; Davison Chemical Co., 601 Keyser Building, Bal- timore, Md.; Detroit Chemical Co., 190 Junction Avenue, Detroit, Mich.; General Chemical Co., 25 Broad Street, New York City; Grasselli Chemical Co., Cleveland, Ohio; Harrison Bros. & Co. (Inc.), Thirty-fifth Street and Grays Ferry Road, Philadelphia, Pa.; The Heyden Chemical Works, 135 William Street, New York City; Hooker Electro Chemical Co., New York City; Hudson River Aniline Color Works, Albany, N. Y.: Heller & Merz Co., Newark, N. J. ; Charles Lennig & Co. (Inc.), 112 South Front Street, Philadelphia, Pa.; Thomas Leland & Co., Boston, Mass.; Mallinckrodt Chemical Works, 3600 North Second Street, St. Louis, Mo.; Merrimac Chemical Co., 33 Broad Street, Boston, Mass.; Merck & Co., New York City; Momanto Chemical Works, St. Louis, Mo.; Mutual Chemical Co. of America, West Side and Fulton Avenues, Jersey City, N. J.; National Ammonia Co., Philadelphia, Pa.; Naugatuck Chemical Co., Nauga- tuck, Conn.; New England Gas & Coke Co., 40 Water Street, Boston, Mass.; New York Quinine & Chemical Co., 114 William Street, New York City; Nichols Cooper Co., 25 Broad Street, New York City; Pennsylvania Salt Manufacturing Co., 115 Chestnut Street, Philadel- phia, IPa. ; Charles Pfizer & Co. (Ltd.), 81 Maiden Lane, New York City; Philadelphia Quartz Co., Philadelphia, Pa.; Powers-Weight- man-Rosengarten Co., Philadelphia, Pa.; Roessler & Hasslacher Chemical Co., 100 William Street, Xew York City; Rumford Chemical Works, Providence, R. I.; Solvay Process Co., Syracuse, N. Y.; 6 TARIFF HEARINGS. Schoellkopf, Hartford & Hanna Co., Buffalo, N. Y.; Tartar Chemical Co., 135 William StFeet, New York City. The CHAIRMAN. Just one minute. I will say to the members of the committee that the clerk and chairman have tried to divide the time among these witnesses, and I will be very glad if the witnesses may be allowed to consume their portion of the time, and then if the committee desire to cross-examine the witness, let that time come out of the time of the committee, and not out of the witness's time. Mr. Howard has used up all of his time now, but if any member of the committee desires to ask him any questions they may do so; if not, we will call the next witness. VIEWS OF JOHNSON & JOHNSON, NEW BRUNSWICK, N. J., ON THE CHEMICAL SCHEDULE. NEW BRUNSWICK, N. J., January 28, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. O. DEAR SIR: In consideration of the tariff schedules, especially Schedule A, which applies to chemical and pharmaceutical prep- arations, etc., we desire to present the following facts for your consideration : \Yhile we do not contend that the manufacturers of these products need a high protective tariff, they should have a certain amount of consideration. Taking our own line as a basis it is a fact that nearly all of the goods which we manufacture originated and have been developed by American industry. The manufacture of these prod- ucts lias been followed and in some instances grossly imitated by foreign manufacturers. In many countries when we attempt to compete with European manufacturers in then: home market we are met not only with conditions of lower cost of labor and lower cost of raw materials but a high protective tariff. For example, in Germany, whore there are a large number of manufacturers of goods in our line, and which manufacturers have followed our methods and our goods, there is a tariff ranging from 25 to 60 per cent on manufactured products. Should manufactured products be admitted free of duty, in our line we would be met with a peculiar condition of an almost prohibitive tariff in Germany, with German products admitted to this country either free or at a normal rate. Further, we believe that manufacturers in this line should be encouraged from the fact that in the case of great disasters, wars, and the like, experience lias shown that our people must depend on American manufacturers. For instance, in such late disasters as the Galveston flood, the Johnstown flood, the San Francisco earthquake, the Spanish- American War, and the like, it was impera- tive that there should bo a source of supply immediately accessible. This can only obtain where there is sufficient encouragement for homo manufacture of these products. Our suggestions would be ;..s follows : The duly on finished products should be of such a rate as to enable homo manufacturers to compote with European manufacturers in 1 ho American market. This would encourage the home manufacture of these products. SCHEDULE A. 7 It would insure a revenue to the Government from continued importations. It would enlarge the demand for crude materials and encourage the manufacture of such other raw material and intermediate products as are now imported. If, as we understand is proposed in the bill now being considered, raw materials are taxed it will place home manufacture at a disad- vantage. Should it be advisable to levy duties on crude materials for revenue purposes, then an increase of duty should also be made on the fin- ished products for the encouragement and development of home manufacture. Respectfully submitted. JOHNSON & JOHNSON. F. B. KELME. DE. J. BEBIE, ST. LOUIS, MO., WRITES CONCERNING THE CHEMICAL SCHEDULE. ST. Louis, Mo., February 1, 1913. Mr. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: The chemical schedule being now under discussion by the Ways and Means Committee. I am taking the liberty of submit- ting my views on the subject, an action to which I am prompted by my 12 years' experience as chemical engineer. H. R. 20182 as passed by the House of Representatives last fall contains the extraordinary feature of proposing to levy import duty on chemical raw materials, and lowering or removing the duties on finished products made from these very raw materials. While I can not conceive that it be the deliberate intention or purpose of a legislative body to cripple or destroy a hitherto flour- ishing and growing industry, it is certain in my mind that a tariff bill such as H. R. 20182, if it becomes law, is bound to so affect the now existing chemical industry of this country. The following few arguments should, I believe, substantiate my views. A great number of drug and chemical products can not be manu- factured in this country in competition with European products, unless duty is levied as to offset the difference in cost of manufacture here and abroad. As is generally known, the higher cost of manu- facture in this country over the cost in Europe is due to several causes high wages paid to skilled and unskilled labor; higher sal- aries paid to chemists, engineers, and all other professionals; higher first and maintenance cost of machinery, buildings, and general fixtures. The crude materials for many drugs and chemical products are not available in this country, therefore these products should remain on the free list in order to enable the American manufacturer using these raw materials to meet foreign competition with the finished products, in the manufacture of which these raw materials have been used. Only on that basis will it be possible for many branches of the American chemical industry to continue and to develop. To encour- age such a development is not only in the interest of the many thou- sands connected directly or indirectly with these industries but it is 8 TARIFF HEARINGS. also in the interest of the Government and the consumer, because it is an established fact that many of those products which are not manu- factured in this country are selling at excessive prices and many products could be enumerated which are selling 30 to 50 per cent cheaper now that they are also manufactured in this country. The duty on these products, which made their home manufacture possible, therefore not only did not increase the selling price of these products, but was the actual cause of bringing it down to a reasonable figure. That the present duties are not of a prohibitive character is demon- strated by the fact that importation of dutiable products is steadily increasing, and the present tariff system and principle of levying duties should therefore be also satisfactory from the standpoint of Govern- ment revenue. On the other hand if duties should be put on raw materials, the importation would undoubtedly decrease to a great extent, because the manufacture of products necessitating such raw materials would be discouraged and stopped as soon as foreign com- petition would make such manufacture prohibitive. It is therefore more than likely that duties on raw materials would prove to be a very unreliable source of revenue. If, however, changes are considered necessary, due consideration should be given to the arguments submitted by the various manufac- turing interests, because they are in position to give data and facts which make a thorough study of the subject possible. On that basis changes could be brought about for revenue purposes and with the object of doing away with some prohibitive duties as may exist at present and without the danger of inflicting serious damage to the industry. Having at heart not only my own personal interest as a chemical engineer, but also the one of the profession and the growth of the American chemical industry as well, I urge you to give that important branch of American manufacture in the coming issue a fair hearing and the chance for further development to which it is justly entitled. Yours, very respectfully, DR. J. BEBIE, 3717 McDonald Avenue. ALLERTON S. CUSHMAN, WASHINGTON, D. C., WRITES REGARD- ING SCHEDULE A. THE INSTITUTE OF INDUSTRIAL RESEARCH, Washington, D. C., January 27, 1913. Hon. OSCAR W. UNDERWOOD. Chairman Ways and Means Committee, f louse of Representatives, Washington, D. C. DEAR SIR: [ have followed with the closest attention the hearings of the Ways and Means Committee \vitli reference to Schedule A. I have also given study to the bill, IT. R. 20182, which was passed at the last session of Congress and which was framed on lines that, in the general average, called for distinct reductions on the finished products of American chemical industry and showed a tendency to place taxes on raw materials previously on the free list. My position as director of the Institute of Industrial Research, which calls for cooperative investigation work with a great number of chemical industries in this coimtrv, has led me to the belief that SCHEDULE A. 9 PARAGRAPH 1 ACIDS. the general policy of heavy reduction on finished products and increase of taxation on raw materials must inevitably tend to dis- courage and, to some extent, to destroy the chemical manufacturing industry of this country. There is prooably no line of human indus- try, in my opinion, in which this country Is more justified in seeking protection than in the chemical industries, nor is there any line in which we are more distinctly led, up to the present time, by Europe. Nevertheless, we have been making great strides in this country, especially in the last ten years. Many of our chemical industries are just struggling to get ahead at the present time, and although the labor cost against our chemical industry is much higher than the European cost, our American ingenuity and cleverness in adapting means to ends by substituting labor-saving devices is beginning to pull us out to even terms. I can not help but feeling that if the committee should in their wisdom give very careful heed to the arguments which have been filed by the manufacturers they will notice that, in respect to Schedule A particularly, there is very little indication of greed or desire for undue or unjustified profits. The taxation of the raw materials considered under Schedule A, as \yell as the substantial increase of duties on finished materials, will, in my opinion, operate only to the advantage of Germany and the other big manufacturing countries. Only my close touch with the subject which I am discussing would justify my adding my word of appeal to you in respect to these matters. Very sincerely, yours, ALLERTON S. CUSHMAN, Director. PARAGRAPH 1: Acids : Acetic or pyroligneous acid, not exceeding the specific gravity of one and forty-seven one-thousandths, three-fourths of one cent per pound; exceeding the specific gravity of one and forty-seven one-thousandths, two cents per pound ; acetic anhydrid, two and one-half cents per pound ; boracic acid, three cents per pound; chromic acid, two cents per pound; citric acid, seven cents per pound; lactic acid, containing not over forty per centum by weight of actual lactic acid, two cents per pound; containing over forty per centum by weight of actual lactic acid, three cents per pound; oxalic acid, two cents per pound; salicylic acid, five cents per pound; sulphuric acid or oil of vitriol not specially provided for in this section, one-fourth of one cent per pound; tannic acid or tannin, thirty-five cents per pound; gallic acid, eight cents per pound; tartaric acid, five cents per pound; all other acids not specially provided for in this section, twenty-five per centum ad valorem. For boracic acid, see also Italian Chamber of Commerce, page 103; for thymol and terpin hydrate, see Veiona Chemical Co., page 71. ACIDS. SALICYLIC ACID. STATEMENT OF DR. S. LEWIS SUMMERS, FORT WASHINGTON, PA. Dr. SUMMERS. Our Government and its citizens are being unjustly taken advantage of by a 8100,000,000 corporation of Germany. Through the inequalities of our tariff laws, in conjunction with our patent laws, and the skillful manufacture and dissemination of defamation calculated to discredit competition, this special interest 10 TARIFF HEARINGS. PABAGBAPH 1 ACIDS. has patented control of opportunity and deprived the noncombative sick of the use of what would best restore their health. This corporation is selling in the United States a long list of patent medicines at prices many hundred per cent in excess of the prices for what they sell the same products for to all other peoples. The drug- gists of the United States have to pay 43 cents per ounce for aspirin or acetyl-salicylic acid. There are most probably more than 10,000 ounces of it sold in this country every day. It costs the manufac- turers of it less than 5 cents per ounce to produce it. All other peoples can buy the same identical substance, made by the same corporation, for less than 10 cents per ounce. The excess extortion filched from the sick of the United States by this corporation of Germany for acetyl-salicylic acid will most probably exceed in 17 years over $20,476,500. The so-called patent on acetyl-salicylic acid was obtained from our Government by misrepresentation. The product was fully described in Current Literature by Kraut in 1869. They claimed that their acetyl-salicylic acid was different from that described by Kraut in that their's did not liquefy until it reached a much higher tempera- ture and that it did not produce a violet color when added to a weak solution of chloride of iron. Our Patent Office has since acknowl- edged, when it issued patent No. 740702 on the sodium salt of acetvl- salicylic acid, that if the medicine is made in exact accordance with the prescription written by Kraut in 1869 it would produce the identical acetyl-salicylic acid fhey claimed. As to the definite temperature at which the product is converted to a liquid condition, there is none. It will completely liquefy, with decomposition, if gradually heated to a temperature of 120 C., or 15 less than claimed in the patent. If our tariff is to be one of protection to American industry or one of evenness, then these medicines should be taxed on the basis of their selling prices in this country, and not taxed on the basis of the cost of their production in another country. The postal laws of our country are being violated by the Journal of the American Medical Association to the material benefit of this octopus corporation and some other favored German corporations who have combined in the restraint of trade. Under the regulations governing the use of the mails by publications at second-class rates, our laws provide that there shall be no discrimination between manu- facturers in the use of the advertising pages. The Journal of the American Medical Association refuses the opportunity of making known the truth about American-made competing chemical com- pounds of superior value on the technicality that all products advertised in the journal must be first approved of by its council on pharmacy and chemistry of the American Medical Association. This device is supposed to constitute this council as a "referee" and is supposed to bind those who are intrepid enough to submit their products to it to abide by its decision and forfeit the right to adver- tise in that journal. Do our laws tolerate such blatant deceit? Thus the patent medicines made by the $100,000,000 corporations in Germany, who are in the combination to restrain competition in medicines in the United States, were approved of en masse, over six SCHEDULE A. 11 PARAGRAPH 1 ACIDS. years ago, by this so-called council on pharmacy and chemistry of the American Medical Association. The competing medicines that possess superior values in the amelioration of human suffering were to be acted on later, after due consideration. It was not a question of proprietary rights versus freedom of manufacture. Neither was it the laudable question of curative values versus medicinal uselessness, as stated by trie chairman of the council on pharmacy and chemistry of the American Medical Association in a letter to me that the pro- prietary products made by the favored German manufacturers Are recognized and will need no investigation on the part of the council. * * * If your preparations are patented, * * * send the number and date of the patent. The therapeutic properties of the preparations need not be gone into except in brief. The main thing in this case, of course, is to define the chemical position. That being done, the rest is easy. There is no class of men so sensitive to ridicule as the medical pro- fession. This fact has made the American people the victims of the German corporation. Were the maintenance of this German monopoly and the discredit- ing of American competition merely a question of merchandise the Government would not stand for it. It is far worse. Being a ques- tion of human life the public naturally have a right to think that the function of this council was in the interests of the health of the people. It is the cleverest device ever foisted before the American people for the patenting of control of opportunity in behalf of special interests by the manipulation of the confidence of guardians or the health of the Nation. The tremendous prestige of the honorable positions held by the individual members of this council, and the knowledge that tne issue involved human lives, made it unthinkable that any such class of men would permit the use of their reputations in this scurvy attempt to discredit medicines having the power to alleviate human sufferings. Thus, the weighty influence of the high prestige of Harvey W. Wiley, then Chief Chemist of the Bureau of Agriculture, the chief of the Drug Laboratory of the Bureau of Agriculture, along with the power of the high positions in our leading medical colleges held by the other members of that body, have produced deep-rooted prejudices and fixed opinions of the prescribers of medicines and established an insidious boycott of medicines capable of reducing the period of sickness as quickly and in many instances much more rapidly than any other medicine made anywhere by anybody. By the display of the official positions of the individuals compos- ing the council on pharmacy and chemistry there is accomplished the appearance of the indorsement of favored patent medicines and the condemnation of meritorious chemical compounds of known composition by our Government and the leading medical colleges (if our countiy that should prohibit the use of their stationery for such purposes. Six years ago the Government bought some acetyl-salicyl-phenet- idin on the open market. It was analyzed and found to be a true chemical compound. The chief of the drug laboratory, Lyman F. Kebler, the so-called referee (he stated) to whom the council on pharmacy and chemistry had referred this chemical compound to for a report on it, told me that he could not report favorable upon it, "because it passed through the alimentary canal without being 12 TARIFF HEARINGS. PARAGRAPH 1 ACIDS. absorbed." He gave as authority an article that had been pub- lished hi Germany. In the stipulation contained hi the agreement sent me by the chairman of the council on pharmacy and chemistry all that was essential was that . The main thing in this case, of course, is to define the chemical position. That' being done, the rest is easy. The therapeutic properties of the preparations need not be gone into except in brief. Under legislative law the chief of the drug laboratory of the Bureau of Agriculture has to admit that these competing synthetics are chemical compounds of known composition. Under the caption as "referee" of the council on pharmacy and chemistry of the American Medical Association he avoids approval by sophistry on specious technicalities. After several letters from me demanding evidence in substantiation of his statement to me he supplied the name and issue of the German publication. For this gentleman to be so well posted in the litera- ture of the world, especially in a branch of science different from his vocation and that printed in a foreign tongue, caused me to smile when I thought of the many other such partisan statements that had been conveniently printed in Germany and astutely circulated in the United States for the purpose of discrediting the chemical compounds which I had created. The article he referred to was printed in the Berechte der Deutschen Gesellschaft, volume 37, page 3975, and entitled, "Acetyl-salicyl- phenetidin." See page 69 of my monograph. The article was pre- pared by two of the leading chemists of Germany and one of its great- est authorities on pharmacological testing. It was honest in what \vas stated, but dishonest in conveying misleading inference by adroitly omitting to state the principal part of the whole truth. It gave me credit as being the originator of the compound and admitted that the process, published by me, for the manufacture of this syn- thetic chemical compound, was correct. It admitted that the medi- cine does not reduce the normal temperature of the body, and that it does not interfere with the oxygen-carrying function of the red-blood corpuscles so vitally essential for life. But it deftly omitted to tell the important part of the whole truth that where an abnormal temperature or fever is present as the result of the germs of disease that the chemical compound does remove the excess temperature with safety. When that quality of not doing harm whilst doing good is the valuable feature of the compound which I added to this world's sum of knowledge, and is the one true reason for its existence, what does the suppression of such important knowledge indicate f The product that is the nearest approach to this unequaled chem- ical compound in relieving mankind of the pains of neuralgic condi- tions and the fevers caused by infectious diseases, colds, etc., is con- trolled by the favored (ierman corporation, there being none other made in tliis country. Statistics state that there are 25, 000 deaths from typhoid fever and 100, 000 deaths from pneumonia in the United States every year. There is no one medicine more efficient and potent in the treatment of these diseases than is ace tyl-salicyl-phenetidin' when used hi ade- SCHEDULE A. 13 PARAGRAPH 1 ACIDS. quato dosage. Dr. Henry Beates, for many years president of the Pennsylvania State medical examining board, states: In typhoid fever, as proven by cultures studied by competent observers, it rapidly diminishes the number of bacilli typhosi in the urine (50 per cent in 4 days) and frequently lessens the duration of the disease because of its antiseptic quality. By using the German quotation as his authority and reason, Lyman F. Kebler, in stating that the compound is inactive, admits that no medicine is safer to use in the treatment of these diseases. He has no justifiable reason for not knowing of its efficiency. He would not personally take an overdose of it to prove his contention. So. in playing the part of being the mentor as to just who shall man- ufacture medicines capable of saving human lives, this so-called "referee" may be responsible, in my opinion, for the sacrifice of many times more lives than went down with the Titanic. Application for space in the exhibit hall of the annual meetings of the American Medical Association is also denied, because the products submitted had not been acted upon by the council on pharmacy and chemistry. Finally, in June, 1907, the council on pharmacy presented the appearance of action by refusing to approve of the synthetic medicine, bismuth methylene disalicylic acid, assigning as an object that I had obtained a patent on another product, which, it stated, had been described in current literature in Germany. This was an admission that one of the functions of this council was the passing upon the validity of patents. To this objection we answered that the Government grant to us is prima facie valid by force of the statute, and that we aid not think the council on pharmacy and chemistry was a tribunal in substitution for the courts to determine ex parte the validity of the patents. If such were the case, then why had the council on pharmacy and chem- istry approved of aspirin or acetyl-salicylic acid that had been fully described in current literature as far back as 1869 ? The members of this council on pharmacy and chemistry knew of the nature of the defect in the claims in the patent rights of foreign-made product. It also knew that that product, outside of the commercial advantage, ' was in no sense superior in medicinal values to the salts of salicylic acid, described in the Pharmacopoeia, that were entirely free of pro- prietary rights. It also knew that there were no products described by the Pharmacopoeia that possessed the chemical nature and the medicinal qualifications of the American-made synthetic. It also knew that the compound possessed sufficient merits as to necessitate the manufacture of a specious technicality for the appearance of a defect. The rights of the sick to the use of the meritorious medicinal values of the new synthetic compound were trampled upon by the ruse of raising a cloud on the validity of letters patent issued by our Govern- ment on another different substance. It was a device that looked as if they would like to undermine the right of honorable compensation to the inventor of the acetyl compound of methylene disalicylic acid. When I went the Germans one better and chemically combined formaldehyde with acetic acid and salicylic acid and produced acetyl methylene disalicylic acid, I created the product that cures rheu- 14 TAEIFF HEARINGS. PARAGRAPH 1 ACIDS. matism and gout in less time than by any other agent known to man. It is far safer and more efficient than the product controlled by that German corporation, especially in the presence of heart disease. But in doing so I have brought down upon myself and my cause the wrath of that $100,000,000 corporation and have been deprived of the vaunted rights of citizenship. To undermine confidence in the curative value of acetyl methylene disalicylic acid, that far surpasses in curative quality the German- made proprietary, approved of by the council on pharmacy and chemistry, the so-called " referee" to whom the council had referred it for investigation prepared a fake "report" that contained over 10,000 words with the difficult collaboration of elaborate tables. Months of tune were consumed in its preparation, which involved the " reading" of much of the German literature and the manufac- tured evidence, so as to neatly place here and there some quotation to give it the appearance of reliability with which to impress the readers as to the care, thought, and accurateness involved in its preparation. This dishonest "report" the council on pharmacy and chemistry ordered to be printed in the Journal of the American Medical Association. This fake "report" bore the immaculate appearance of a dispas- sionate research contribution "from the pharmacological laboratory of the Western Reserve University" on the value of "Formaldehyde derivatives: Their fate and actions in the body, together with obser- vations on some other urinary, intestinal, and wound antiseptics." Emanation from such a source carried with it the high prestige of correctness of that college. Bearing the approval for publication by the council on pharmacy and chemistry of the American Medical Association gave to the fake "report" the atmosphere of infallibility. Having the approval of the Chief Chemist of the Bureau of Agricul- ture and the chief of the drug laboratory caused the medical profes- sion to accept it as authentic. The function of these apostles of virtue was supposed to be guarding the welfare of the sick and their time was supposed to be donated to the service for the uplifting of the cause of pure food and clean thought. All of the foreign-made formaldehyde derivatives described in that fake "report" had already been approved of by that council on pharmacy and chemistry. All of the American-made formaldehyde derivatives mentioned in that "fake" report were first thought out by me and the process of manufacture published to the world. This fake "report" was the highest effectual advertisement of the foreign- made proprietary medicine brought out by that favored German corporation to compete with the chemical which I had created, and at the same time a severe denunciation of our product which is so efficient that false witness must be manufactured to discredit it. The total amount of the medicines used for testing for the libera- tion of formaldehyde in watery solution would bulk about as much as a No. S grain of shot. The amount administered to observe their fate and actions in the human body, together with observations on their antiseptic influence on the urine, was less than one single dose, and that used but twice on two separate days. The American synthetic, bismuth oxyiodido methylene digallate, that is used by honest men in those diseased and accidental conditions exhibited SCHEDULE A. 15 PARAGRAPH 1 ACIDS. as diarrhoeas, ulcerations, contused wounds, burns, etc., at reputable medical colleges was measured by these male creatures on the basis of a urinary antiseptic. The synthetic acetyl-methylene disalicylic acid, that is so superior in the curing of gout and rheumatism to those approved of proprietaries made in Germany, was measured on the basis of a wound powder. The synthetic benzoyl methylene diguaiacol was denounced and rejected with the ruse "that it was most probably not absorbed" Into the human organism, although no attempt was made to find out by administering it. The author of the "report" afterwards stated that he did not consider it incumbent on him to conduct lengthy researches to sup- ply information which should have been furnished by the manu- facturer, and that he therefore contented himself with stating that the latter had not made good his claims. But he failed to state where and wiien he had ever before stated it. Then why the exist- ence of his "report"? The Journal of the American Medical Asso- ciation and the council on pharmacy and chemistry had stated, and afterwards repeated the misstatement in the face of this admis- sion that he had not, that he had proven it. On the subject of conducting "researches" and praising foreign- made patent medicines upon the "use" of a fraction of one solitary dose, and that use but three times on separated days, in whose behalf was he conducting them ? He was supposed to be serving the cause of afflicted humanity. In whose behalf was the "research" con- ducted in praise of another foreign-made proprietary medicine and published on the previous month in the Journal of the American Medical Association ? Was he working in behalf of the sick or working the sick ? The author of that fake "report" also confessed, on the subject of the liberation of formaldehyde in passing through the human organ- ism, that none of his evidence that had been published as proven hi the Journal of the American Medical Association and approved of as proven facts by the council on pharmacy and chemistry was true, as shown by his admissions I took care to avoid any statement that the decomposition was disproved. * * * None of this amounts to a final proof that these products are not decomposed in the body; and I have with care avoided any statement to this effect. The fake "report" purported to be one founded on "Formaldehyde derivatives: Their fate and actions in the body." It contained no reference to personality, yet the editor of the Journal of the American Medical Association and the chairman of the council on pharmacy and chemistry afterwards confessed that Knowing what I know, I think Dr. Summers has been treated much more leniently than he ought to have been treated, but I do not care to give the reasons to you now. According to this evidence from the general manager of the Ameri- can Medical Association the discrediting of nonsecret chemical com- pounds possessing unsurpassed curative properties in the saving of human lives, was upon me question of personality and not because of any therapeutic inefficiency of those medicines. Then why the Sollmann "report" and the misuse of such valuable space in the leading medical journal of the world? 16 TARIFF HEARINGS. PARAGRAPH 1 ACIDS. In its follow-up plan of attempting to destroy our competition by its assumed rights to designate who shall manufacture medicines and who shall invent chemical compounds for the relief of human sick- ness, the editor of the Journal and the general manager of the American Medical Association, and the council on pharmacy and chemistry caused to be published in the journal of the association, on May 8, 1909, a general assault against acetyl-methylene-disalicylic acid, which is so much more efficient than the approved of German made antigout and antirheumatic remedies, against the manufac- tures of it, and fiercely abused those who had dared to defend the rights of the sick by testifying to the facts. Being unable to refute the irrefragible evidence contained in these chemical compounds, and the evidence submitted by those who do- nated their talents and time without price in defense of the rights of the sick, the council on pharmacy and chemistry resorted to the device of calling names and intimating lack of integrity and of ability in men of achievement who stand far above any member of that council. Many thousands of words were used ana so arranged as to skillfully cloud the questions at issue, with appeals to the passions of the medical profession. It was a masterpiece of work of the kind calculated to confuse and entangle, with the omission of the crucial part of the facts. Venomous mendacity was promoted with the appearance of truth with a cunning confusion. The character of responsibility of this council on pharmacy and chemistry is such as appears to enable it to originate and circulate wicked untruths and committing fraudulent acts that were personally irresponsibly indorsed collectively but not personally responsible by being indorsed individually. The invested capital of American cor- porations should be just as much protected from defamation calcu- lated to undermine confidence as is now possessed by our national banks. The noncombative sick of our country are entitled to the use of what will best restore their health. Collusive fraud, such as practiced by this council on pharmacy and chemistry, should be punished by personal imprisonment. Believing that the then chief chemist of our Government and the chief of the drug laboratory would be willing to die the death of martyrs in behalf of the innocent public in the arena of Christian courage, I wrote to them and asked them to assume individual responsibility for what bore the appearance of their approval, as to the truthfulness of the statements contained in these "reports." But their courage was not sufficient to apologize or to assume the conse- quences of a suit for perjury, if they would swear to what they loaned the high prestige of their official positions to accomplish. In 1901 the American representatives of that audacious foreign corporation attempted to obtain a restraining injunction against the manufacture of a synthetic that we were selling in competition with their phenacetin. This was at a period of time when they were enjoying their heyday from the profits from this drug. More than Hi, 000 ounce^ were most probably sold every day at the price of $1 pei- ounce for what did not cost them more than 5 cents. The duty they paid the Government was probably less than 2 cents. All other peoples could buy the same product for about 10 cents. An injunc- SCHEDULE A. 17 PARAGRAPH 1 ACIDS. tion against a product which they claimed to be identical that sold for 25 per cent less than they charged would have been of value to them. The United States district court refused them an injunction. Then began a virile campaign of defamation calculated to destroy confidence in our products, that was printed and mailed in Germany and beyond the reach of our laws. In 1904 the Journal of the American Medical Association became a party to publications reflecting upon our products not on the curative quality, but on the question that the readers could not be competent to judge. As the editor and general manager of the American Medical Association wrote me on the subject: It is one of those questions that can not be settled by ordinary correspondence, since it has underlying it principles about which the average physician knows but little. The advertising manager and the left-hand bower of the general manager wrote: Can you tell me, confidentially, why such an article should be presented? I am not quite sure, but I think the article was read in the therapeutic section of the A. M. A., a program of which meeting I am sending you under separate cover. Does any one firm in New York make preparations similar to yours? I know about thermol, but whose toes are you tramping on with ur-a-sol and iodomuth? Is it the same party? This is as much as I can say in a letter. The owners of the foreign-made patented chemicals possessed ample funds to protect their rights. When they were the exclusive beneficiaries of the libelous attack against their American competing products, why did not the Journal of the American Medical Associa- tion refer the question to the courts, especially as it was beyond the comprehension of the "average physician" ? This assault was followed up by the sending out of another medical publication containing reference to the publication in the Journal of the American Medical Association, which was sent to every phy- sician and druggist in the United States and Canada at an. expense of many thousands of dollars. In 1907 a combination in restraint of trade of German chemical manufacturers prevented our purchase of supplies from which to construct the synthetic medicine which was our largest seller. The general manager of the American Medical Association admitted knowledge of this fact and wrote: From what I have heard in the past it is quite probable that the German firms are working with other firms to control certain products not yours particularly, but many others. In 1907 the Journal of the American Medical Association published a scathing defamatory attack against me personally and the company of which I was president. Being unable to bring the slightest evi- dence of any wrongdoing of ours to be used against us, the editor of the Journal of the American Medical Association wrote himself down as skilled in all the arts appropriate to forgers and convicted himself of being guilty of a studied perversion of the truth and a desire to de- prive the sick of meritorious medicines. By his so doing and with the presentation of photographs of his misstatements and of my chemical-therapeutic contributions which he described as a clinical 78959 VOL 113 2 18 TAEIFF HEAKINGS. PARAGRAPH 1 ACIDS. contribution, there is revealed a more severe reflection of his inten- tional incorrectness than any that I could make. This manufacture of false evidence to be used against an innocent person in holding him up to the medical profession of the United States as an object of ignominy and contempt and to discredit the manufacturers or medi- cines possessing unsurpassed curative virtues and of known compo- sition may be right in the minds of those $100,000,000 corporations of Germany but not hi the interest of the innocent sick. Detailed replies to those seeking the destruction of competition in medicines have been prepared in pamphlet form, much of which is contained in my monograph on How Special Interests Patented Con- trol of Opportunity with the Delivery of Noble Sentiments for the Welfare of the Afflicted. STATEMENT OF FRANCIS E. HAMILTON, ESQ., REPRESENTING THE HEYDEN CHEMICAL WORKS, OF NEW YORK. The CHAIRMAN. We will now hear Mr. F. E. Hamilton. Mr. HAMILTON. Mr. Chairman and gentlemen, I wish to be heard through my client, the president of the Heyden Chemical Works, who knows a great deal more about the subject than I do; and I call the attention of the committee to the fact that I am a lawyer making such an admission. The subject to be discussed is salicylic acid, which I believe, if not at the present moment of personal interest to every member of the committee, may at some time become of some interest to every member, because it is the most universal remedy for rheumatism I know of. The CHAIRMAN. The committee will now hear Mr. George Simon. STATEMENT OF GEORGE SIMON, OF GARFIELD, N. J., PRESI- DENT OF THE HEYDEN CHEMICAL WORKS, OF NEW YORK. Mr. SIMON. Gentlemen, this bill which passed the House of Rep- resentative last summer affects our company in about 50 different preparations. Some of our raw materials have been made subject to a duty, and all of our finished products have been reduced in duty. I will confine myself only to salicylic acid, not because it is in quan- tity or in value the most important of our products, but because it is a basic product which is used in the manufacture of fine chemicals in various ways, and it is very important that the source of supply of this product should not become wholly foreign. In a brief which I have already submitted, and which I will not read again unless I am asked to, I have tried to prove that a duty of 2} cents per pound, as this bill proposes, would put the American manufacturers and the American consumers entirely at the mercy of a foreign trust called the ''Salicylic Acid Syndicate." The Ding- ley tariff put a duty of 10 cents per pound on salicylic acid; the Payne- Aldrich bill reduced this to 5 cents per pound. Now, a further cut of 24- cents per pound would be disastrous. The amount of money which we have invested in our factory alone, in the manufacture of salicylic acid, in buildings and machinery, amounts to a little more than $190,000. Our pay roll is $28,000 per year. Those are com- paratively small figures, but the total quantity of salicylic acid which SCHEDULE A. 19 PARAGRAPH 1 ACIDS. would be imported here if the manufacture in the United States should entirely cease would not exceed, probably, 500,000 pounds, and with a duty of 2 cents per pound this would make a revenue of $12,500 per year. The question may be asked, Is it worth while to destroy this industry, which, as I have stated, is important, and to deprive a considerable number of workmen who are employed in the manufacture of this product of their living, for the sake of getting a revenue of $12,500? But I understand that these are minor questions, that this is going to be a tariff for the consumer. What would be the result as far as the consumer is concerned? We would have to stop making the salicylic acid here, and then the consumer would be dictated to as to his price by the European syndicate. He would be forced to buy from a combination which, under the laws of our country, would be illegal. I do not believe that it has been intended to bring about such conditions, and in trying to find the reason for it, I notice that there are certain conditions which must have misled the framers of this bill. The tariff rates in Schedule A have been reduced in this bill from an average of 25 per cent ad valorem to 16 per cent ad valorem. On salicylic acid the duty has already been 19 per cent ad valorem, but the new bill, No. 2182, reduces it to 2 per cent, or an equivalent of 9 per cent ad valorem. The CHAIRMAN. I think you are mistaken about that. Mr. SIMON. I will explain that in one minute. That is just the point I want to make clear to you. Mr. LONGWORTH. What paragraph is that ? Mr. SIMON. Salicylic acid, Schedule A, paragraph 1, I think. The value given in the import list which you have before you does not represent the correct European value for pure salicylic acid, and consequently the duty of 5 cents per pound does not equal the ad valorem rate of 31 per cent, as you have it in these lists, but equals only 19 per cent. The CHAIRMAN. Let me state there, of course you understand that this equivalent ad valorem rate of 31.04 per cent is the rate that is estimated by the Treasury Department; those are not our figures. Mr. SIMON. Yes. We wish to state that the salicylic acid which has been imported, and on which this figure has been calculated, has not been commercial salicylic acid; it has been crude salicylic acid, a product from which the commercial salicylic acid is manufactured, and the value of this crude salicylic acid is away below the value of the regular salicylic acid. Of course, we do not manufacture it from crude salicylic acid. Certain quantities of that crude product have been imported at a very low value, but the actual value all over Europe, in every country except the United States, is 26 cents a pound. An3'body who sells in Europe at 1 cent below this figure will be subject to a heavy fine. Mr. HILL. Why ? Mr. SIMON. Because It is a syndicate. It is a salicylic syndicate, or trust. Mr. KITCHIN. In fact, all these concerns in Europe, or across the waters, which come in competition on this chemical schedule are in syndicates or monopolies, are they not ? Mr. SIMON. I know of this one. 20 TARIFF HEARINGS. PAKAGRAPH 1 ACIDS. Mr. KITCHIN. I know all I have heard of to-day have been in syndicates. Mr. SIMON. I do not know about the others, but I know about this. Mr. HARRISON. What do you suppose is the American consumption of salicylic acid ? Mr. SIMON. All that could be sold here would probably not exceed 500,000 pounds. I have shown that in detail in the brief which I have submitted. Mr. HARRISON. And about 30,000 pounds are the imports now? Mr. SIMON. I believe they have been considerably more in 1912, because the trust over there has made great efforts to invade our market. I will read a few words from our brief, which will be of inter- est in connection with it: Salicylic acid is manufactured on a large scale in the United States since about 1893 to 1895. Prior to that time practically all salicylic acid consumed here was sup- plied by the German manufacturers, who were then, the same as they are to-day, combined to control the prices all over the world. The price was $1.25 per pound when the first salicylic-acid factory was erected in St. Louis. The American manu- facturers cut the price far below the European prices and forced the agents of the trust to reduce their prices in the United States to 56 cents per pound for quantities of more than 100 pounds. Under the severe competition which followed, the price of salicylic acid in this country went gradually down to about 30 cents per pound and less in wholesale quantities. About 10 years ago there existed five manufacturers of salicylic acid in the United States, three of which have since failed. The American manufacturers are to-day the only opponents of the European trust. All other countries in the world are controlled by this trust and uniform prices are fixed in every country, except the United States, which is left open as a dumping ground for any surplus that may exist. The prices at which the European manu- facturers ship their salicylic acid into this country are much lower than those at which they sell in their home markets. Mr. KITCHIN. How much did foreign countries dump on us of the salicylic acid last year ? Mr. SIMON. I estimated it at 50,000 pounds. Mr. KITCHIN. Less than $6,000 worth, was it not? Mr. SIMON. Yes. Mr. KITCHIN. Is $6,000 worth going to destroy you folks? Mr. SIMON. Yes; and I will tell you why. This was a 5 cents per pound duty. I did not base my remarks on the present duty; I based them on the duty of 2 cents per pound, which will be in effect under this, and I have submitted here a statement to you, a calculation, showing why we will be at the mercy of the Europeans if this duty is reduced, because our cost of manufacture is 2 cents per pound more than in Germany. Mr. KITCIIIN. In 1909, when the tariff was up for discussion, you salicylic acid gentlemen appeared here, did you not? Mr. SIMON. Xo; we did not. Mr. KITCIIIN. Did you not protest against a reduction of 50 per cent, from 10 cents a pound down to 5 ? Air. SIMON. In 1 909 we did not appear before this committee. Mr. KITCHIN. The Dingley Act was 10 cents a pound, and the Payne Act reduced it to 5 cents. Mr. SIMON. The manufacturers who protested at that time, when the Dingl;\v Act was made, have gone out of business. We have manufactured since 1900. SCHEDULE A. 21 PARAGRAPH 1 ACIDS. Mr. KITCHIN. I say, in 1909, when it was reduced from 10 to 5 cents a pound, did you people not think it would ruin you ? Mr. SIMON. I did not appear here then. Mr. KITCHIN. You did not find out when they reduced it ? Mr. SIMON. Oh, yes, we found it out. Mr. KITCHIN. It did not hurt you, did it? Mr. SIMON. I do not say that a duty of 5 cents will hurt us. The duty of 5 cents is just sufficient to equal the difference, as I have tried to figure out here. Mr. KITCHIN. How much of the product of the salicylic acid for 1912 was manufactured; what was the total amount of manufacture ? Mr. SIMON. About $150,000. Mr. KITCHIN. So this little six thousand that came in did not bother you much, did it ? Mr. SIMON. It did not bother us, because it was not so much; but it will be a great deal more under the new bill. Mr. KITCHIN. A reduction from 10 cents to 5 cents, in 1909, did not seem to hurt you gentlemen, did it ? Mr. SIMON. It did not. Our price was already very low. The competition in this country prevented us from adding the duty of 10 cents to our price. Mr. KITCHIN. You were selling our consumers here at a low price, because you got competition among American producers ? Mr. SIMON. Certainly. Mr. KITCHIN. Our consumers were getting it about- as cheaply as any other consumers in the world, were they not ? Mr. SIMON. They were. Mr. HARBISON. What is the price of salicylic acid in this country? Mr. SIMON. There are different qualities. There is the pharma- ceutical, which is worth about 30 cents a pound. On the average, we do not realize more than 25 cents per pound. The CHAIRMAN. Is that all you desire to say ? Mr. HILL. Just one moment. Salicylic acid is made from oil of wintergreen as well as from coal-tar products ? Mr. SIMON. Yes. Mr. HILL. As a matter of fact, this last chemical bill cut the duty on salicylic acid in two and puts a duty of 10 to 20 per cent on the raw material. Mr. SIMON. Up to the present time carbolic acid has been the chief raw material for salicylic acid, but the price has become so high it is not to-day considered the raw material. Our competitors in Germany have in recent years installed plants to produce salicylic acid by synthetic process, starting from benzol, and this is to-day to be considered the most important raw material. The natural carbolic acid has up to last year been used in our factory as the chief raw material for the manufacture of salicylic acid. The price of this product, however, has become so high that the German salicylic acid manufacturers have installed large plants to make their carbolic acid synthetically from benzol. The product which they obtain by this process is not only considerably cheaper than the natural carbolic acid at its present price, but also consid- erably purer. We obtain from 5 to 6 per cent higher yields by 22 TARIFF HEARINGS. PARAGRAPH 1 ACIDS. employing the carbolic acid derived from benzol, anti are therefore now buying this product from our competitors in Germany, to whom we have to pay a profit of at least 15 to 20 per cent. We have worked out a process which will enable us within a short time to start from benzol in our manufacture of salicylic acid, if the rate of duty of this product will enable us to continue to make it here on a competitive basis. Benzol is a product of the United States. We do not object to a duty of 5 per cent on this product, if it is deemed wise to impose it, but we respectfully request that this duty be also considered in fixing the duty on salicylic acid, which is a so-called fine chemical, requiring a very large amount of labor. The other raw materials, of which salicylic acid is made are also subject to duty or produced here under conditions which make the price considerably higher than in Europe. To make 100 pounds salicylic acid we require: 75 pounds syn- thetic carbolic acid made from benzol (proposed ad valorem duty 5 per cent) ; 40 pounds caustic soda (proposed duty, J cent per pound equals 10 per cent ad valorem); 50 pounds carbonic acid (proposed ad valorem duty 15 per cent); 75 pounds sulphuric acid, and 2 pounds muriatic acid (free, but price here 50 per cent higher than in Germany). I do not wish to appear as opposing the duties on these materials, if it is deemed wise to have them for the sake of revenue or for other reasons, but I respectfully submit that, in view of the resulting higher cost of our raw materials for salicylic acid and the higher cost of labor and machinery, with resulting higher cost of tear and wear, a duty of 1\ cents per pound on salicylic acid is inadequate. This rate of 2^ cents per pound as proposed in H. R. 20182 corre- sponds to an ad valorem rate of 9^ per cent, figured on the lowest selling price for pure salicylic acid anywhere in Europe, which is 26 cents per pound. The present duty on salicylic acid is 5 cents per pound, or equal to 19 per cent, which, as I have shown in the statement printed, is just sufficient to put the American manufac- turers of salicylic acid on a competitive basis with their European opponents. Mr. HILL. Taking the coal-tar products by and large, and adding from 10 to 20 per cent duty on them, and cutting your products, as au example, can you make salicylic acid at a reduction of duty of 50 per cent and an addition of duty of 20 per cent on your raw material without cutting your labor cost ? Mr. SIMOX. No; wo would not cut our labor cost; I think we would have to stop. Mr. HILL. That would cut it, would it not? It would cut it out entirely ? Mr. SIMOX. Yes. Mr. HILL. Then you say it is impossible for you to make salicylic acid under this schedule as proposed in the chemical bill passed at the last session of Congress ? Mr. SIMOX. I say it just depends on the price at which the Euro- peans ship it over here. .Mr. HILL. CouM you have made it during the last year under this schedule, taking the prices as the}' are now? SCHEDULE A. 23 PARAGRAPH 1 ACIDS. Mr. SIMON. I doubt it very much. Conditions were very unfavor- able during the past year for us. Mr. HILL. You know whether you could make it or not, do you not? Mr. SIMON. I do not think we could; not to any advantage. Mr. HILL. You could not do it without a large reduction in the wages of labor ? Mr. SIMON. No ; we could not do it at all. Mr. HARRISON. Just for the sake of record, the figures which Mr. Hill referred to as 20 per cent in our bill are 5 per cent ad valorem ? Mr. SIMON. Five per cent ad valorem. Mr. HARRISON. And the ad valorem equivalent of 2 cents per pound for salicylic acid is a little more than 13 per cent? Mr. SIMON. Nine and a hah*. Mr. HARRISON. According to your own statement of the value of the foreign products; but according to the Treasury returns, upon which we must base our figures, it equals 13 per cent ad valorem. Mr. SIMON. If you want to be just, I think you must base your figures on the facts. Mr. HARRISON. You said that the foreign salicylic acid sells for 26 cents per pound. Mr. SIMON. It does. Mr. HARRISON. And sells here for 25 cents a pound. Why do you need to fear competition under free trade, then ? Mr. SIMON. Because they are selling it here at a much lower rate than they are selling it over there. They are considering the Ameri- can market as a country where they ship their surplus. We are obliged to get the trade here, because we have to run our factory day and night, continually it is never stopped ; and we can not reduce it. We must either have the output which we have or we will be much worse off than we are. We would rather cut the price down than let considerable quantities of the foreign product come in here, because then we can not continue to manufacture it to any advantage. Mr. HILL. As a cold, mathematical fact, a reduction of the duty from 5 to 1\ cents is a reduction of 50 per cent in the duty, is it not? Mr. SIMON. Yes; it has been cut 50 per cent already, and now it is proposed to cut it another 50 per cent. I would like very much to submit herewith a statement showing the exact difference in price for making salicylic acid here and abroad, to show that 5. cents per pound is just equal to the difference in cost, and that 1\ cents is not. Mr. KITCHIN. How much of this salicylic acid do you export? Mr. SIMON. Insignificant quantities, very small quantities, which we occasionally ship to Canada, because it is so near. Mr. KITCHIN. Do we really not export more than we import ? Mr. SIMON. Salicylic acid? Mr. KITCHIN. Yes, sir. Mr. SIMON. We import hardly any very little. Mr. KITCHIN. I know we imported very little; but did we not export more than we imported '? Mr. SIMON. The quantities do not cut any figure either way. Mr. KITCHIN. I know; but I ask you if we do not export more than we import ? 24 TABIFF HEARINGS. PARAGRAPH 1 ACIDS. Mr. SIMON. I have not the figures; I do not know. Mr. KITCHIN. And we exported most to Canada, did we not ? Mr. SIMON. Yes; because that is near to our country, and they are sometimes short hi salicylic acid, and buy it from here because they can get it hi a short time. Mr. KITCHIN. What country can compete with us hi salicylic acid ? Mr. SIMON. France and Germany. Mr. KITCHIN. England does not compete with us 1 Mr. SIMON. England does not make it. Mr. HULL. How many employees are there engaged hi the manu- facture of salicylic acid? Mr. SIMON. I can only speak for our factory. We have 40 engi- neers and workmen. It is not a large industry. As I stated at the beginning, the whole duty on imported salicylic acid will be $12,500. The folio whig papers were submitted by Mr. Simon : Under the Dingley tariff the duty on salicylic acid was 10 cents per pound. The Payne-Aldrich tariff reduced it to 5 cents per pound. A further cut to 2J cents, as the House bill 20182 provides for, would be disastrous to the industry in our country. In our factory at Garfield, N. J., we have invested in the manufacture of salicylic acid more than $190,000 for buildings and machinery. Our pay roll for this product amounts to $28,000 per year. The total amount of salicylic acid which is sold per year in this country is hardly more than 500,000 pounds. If all of this was imported, the duty at the rate of 2 cents per pound would be $12,500 per year. It would seem that a revenue of $12,500 is no adequate equivalent for the possible destruction of the values invested in the product and the means from which a large number of people employed in this business obtain their living. But what would be the effect upon the consumer? The European trust, after destroying the Ameri- can industry, would have absolute control of this market, the same as it has control of all other markets in the world, and the natural result would be that the consumer would be forced to pay to a combination that would be illegal in this country the prices which it would dictate. The tariff rates of Schedule A have been reduced on an average from 25 per cent ad valorem under the present tariff to about 16 per cent ad valorem under bill 20182 which passed the House of Representatives last summer. On salicylic acid, however, the duty is now only equivalent to 19 per cent ad valorem, and the bill 20182 reduced it to an equivalent of 9^ per cent ad valorem. This radical and, in our opinion, unintended reduction can be explained by an erroneous impression about values which the framers of this bill may have obtained from the import lists. The values given in these lists do not represent the correct European prices of pure salicylic acid, and consequently a duty of 5 cents per pound does not equal an ad valorem rate of 31 per cent, as it has been figured out on the lists published by the Bureau of Statistics. The lowest price at which pure salicylic acid, answering the requirement of the U. S. P., is sold anywhere in Europe is 26 cents per pound in large wholesale quanti- ties. There has been imported into this country a crude salicylic acid at a much lower price, but this is not the article generally known as salicylic acid, and in fact no commercial product at all. Sample Xo. 1, which I submit, is salicylic acid and Sample No. 2 is the crude stuff, on the price of which the Bureau of Statistics based its figures. Salicylic acid is manufactured on a large scale in the United States since about 1893 to 1S95. Prior to that time practically all salicylic acid consumed here was supplied by the German manufacturers, who were then, the same as they are to-day, combined to control the prices all over the world. The price was $1.25 per pound when the firft salicylic acid factory was erected in St. Louis. The American manufacturers cut the price far below the European prices and forced the agents of the trust to reduce their ] trices in the United States to 56 cents per pound for quantities oi more than 100 pounds. Under the severe competition which followed, the price for salicylic acid in this country went gradually down to about 30 cents per pound and less in wholesale quan- tities. About ten years ago there existed five manufacturers of salicylic acid in the United States, three of which have since failed. SCHEDULE A. 25 PARAGRAPH 1 ACIDS. The American manufacturers are to-day the only opponents of the European* trust. All other countries in the world are contolled by this trust and uniform prices are fixed in every country, except the United States, which is left open as a dumping ground for any surplus that may exist. The prices at which the European manufacturers ship their salicylic acid into this country are much lower than those at which they sell in their home markets. We respectfully submit these facts. We have already filed a brief stating why the maintenance of the present duty of 5 cents per pound on salicylic acid is absolu'ely necessary, if this industry is to continue in the United States. In addition to this we file herewith a memorandum, showing that the duty of 5 cents per pound does not even fully cover the difference in cost of production here and abroad. THE HEYDEN CHEMICAL WORKS. GEORGE SIMON, Vice President. Our plant at Garfield, N. J., for the manufacture of salicylic acid, as it now stands, costs somewhat more than $190,000. The greater part of the machinery had to be imported from Germany, and we paid 45 per cent duty on this. This duty and the higher expense for putting it up makes our machinery cost 50 per cent more than the German manufacturer has to pay for his. Also our buildings are about 50 per cent more expensive, because it costs about that much more to erect a chemical plant here than in Germany. Our factory therefore costs us about $63,000 more than a manufacturer in Germany has to pay for a salicylic-acid plant of equal size $63, 000 The wear and tear of machinery in the chemical business, where strong acids are used, is generally figured at 10 per cent per year. Our salicylic-acid machinery costs us $102, 735 In Germany it would cost only 68, 000 Our depreciation is therefore 10 pel cent of 34, 000 Higher than in Germany 3, 400 Besides, we have to figure interest on the actual cost of the investment on buildings and machinery; this is $63,000 more than in Germany. Conse- quently, the difference in favor of the German competitors is 5 per cent of this amount 3, 150 The number of laborers employed in our salicylic acid works is now about 40, including high-salaried chemists and mechanics, and the wages and salaries which we pay for salicylic acid total $28,000 per year. The German laborer receives only half the amount of wages (see pp. 305 and 370 of your report). This makes a difference in favor of our foreign competitors of 14, 000 It appears from this that our highest cost for labor, depreciation, and interest alone amounts to 20, 550 This figure does, however, not include the higher cost of raw materials, some of which are subject to duty and cost considerably more here than in Germany. It is somewhat difficult to figure out exactly what the difference on raw ma- terials amounts to because we do not have the exact foreign values to com- pare with. We estimate it at 5, 000 Total 25,550 3 per pound ( ts per pound Submitted by 5 cents per pound duty on 500,000 pounds, $25,000. 2 cents per pound duty on 500,000 pounds, $12,500. THE HEYDEN CHEMICAL WORKS. G. SIMON, Vice President. Mr. Simon also submitted the following brief of the Heyden Chemi- cal Works, 135 William Street, New York (factory, Garfield, N. J.), supporting the maintenance of present rate of duty on salicylic acid: We have submitted to the Finance Committee of the United States Senate on March 21 a memorandum regarding tariff bill H. R. 20182, as passed on February 15 by the 26 TAEIFF HEARINGS. PARAGRAPH 1 ACIDS. House of Representatives. As our statements made before the Senate committee are matters of public record, we refrain from repeating them. We beg, however, to submit herewith some facts regarding salicylic acid, for which we request kind con- sideration in fixing the duty on this product in the new tariff bill which is expected to be passed next summer. Salicylic acid is a basic product used in the manufacture of a number of chemicals for pharmaceutical purposes. It is, therefore, of considerable importance for the chemical industry in this country that its source of supply should not become entirely foreign. The European market of salicylic acid is, and has been for more than 25 years, controlled by a syndicate, which has fixed uniform selling prices for all coun- tries except the United States, and is a strong competitor to the salicylic acid manu- facturers in our country. The fight between the European syndicate and the American salicylic acid manu- facturers is fully 20 years old. In order to afford the American industry an adequate protection ag_ainst the com- petition of the European Salicylic Acid Trust, the Dingley tariff provided for a duty of 10 cents per pound on salicylic acid. This rate was reduced to 5 cents per pound in the Payne-Aldrich tariff, not without causing considerable injuries to the American salicylic acid manufacturers, and ever since then they have been hard pressed by their European competitors. The tariff bill (H. R. 20182) which was passed by the House of Representatives on February 15, 1912, made a further reduction of the present rate of duty to 2i cents per pound. When we started 12 years ago to manufacture salicylic acid in our factory at Gar- field, N. J., there existed, besides us, four other salicylic acid manufacturers, but the prices have declined to such an extent that three of them have since that time failed or suspended the manufacture of the product. In the month of November, 1912, alone, 12,700 pounds of salicylic acid have been imported into this country, and were sold at prices which we had to decline to meet, in spite of the duty of 5 cents per pound. A further increase in these importations will reduce our sales of salicylic acid to a point where we can not continue to manufacture advantageously. The importation of above 12.700 pounds was preceded by the offer of one member of the European salicylic acid syndicate to withdraw its competition from the American market if we would pay a yearly indemnity of 10,000 francs, which was promptly declined. We are fully aware of the fact that the tariff bill to be introduced next summer will be li a tariff for revenue," but we can not believe that it is the intention to secure the revenue, in this case, at the expense of the destruction of an American industry. Our pay roll for the manufacture of salicylic acid amounts to $28,000 per year. Should the duty on salicylic acid be reduced below the present rate of 5 cents per pound and the American manufacturers forced to discontinue the production of salicylic acid, the total revenue on about 500,000 pounds of salicylic acid, which would then have to be imported into this country, would amount to only $12,500 per annum. To obtain this amount of revenue, property invested in buildings and machinery for the manufacture of salicylic acid to the extent of more than $200,000 would have to be destroyed and many American workmen (about 40) would be thrown out of employment. It has been stated that the interest of the consumer shall receive first consideration in fixing the rates of the new tariff bill. The consumer would not profit by a reduction in the rate on salicylic acid, for if the European trust thereby succeeds in driving its only competitors in America out of business, it will then have an opportunity to advance the prices in this country without fear that the American manufacturers would revive, because they would know that as soon as they start operations again the trust prices would again be put down to a basis where the manufacture in America becomes unprofitable. We can not compete here against German manufacturers with a duty of 1\ cents per pound on salicylic acid, because our expense for labor and chemists' salaries amounts to more thau twice as much as that of'the European manufacturers, our build- ings and machinery cost at least 50 per cent more, and therefore the depreciation is 50 per cent higher, and our raw materials cost also considerably more here than in Germany. We depend on the European markets for cur supply of carbolic acid. This product lias, in recent years, become so expensive that the large and successful salicylic acid manufacturers abroad have introduced in their works synthetic processes, starting from benzol instead of carbolic acid. In order to be able to compete, we shall be obliged to do the sam in this country, but the bill (H. R. 20182) which passed the SCHEDULE A. 27 PARAGRAPH 1 ACIDS. House in February provides for a duty of 5 per cent ad valorem on benzol. It pro- vides also for a duty of one-quarter of 1 per cent per pound, equal to about 10 per cent ad valorem, on caustic soda, the raw material which ranges second in importance in the manufacture of salicylic acid, and sulphuric acid and muriatic acid, two other materials, are almost twice as expensive here as in Germany. We are able to produce evidence that the cost of making salicylic acid here is con- siderably more than 2$ cents per pound higher than in Germany, and we are con- vinced that a duty of 5 cents per pound, as now levied, is about the lowest measure necessary to equalize the difference in conditions existing here and abroad. The lowest price for pure salicylic acid is in Germany to-day 26 cents per pound. A duty of 2 cents per pound would be less than 10 per cent ad valorem. No other fine chemical which requires a similar amount of labor and expensive machinery to manufacture has been put down in tariff bill H. R. 20182 at such a low rate. We respectfully request that in fixing the new tariff rates the duty of 5 cents per pound for salicylic acid be maintained, so that the American industry may be able to keep up its existence against the competition of the European trust. Our country would not benefit if it should become dependent on a European monopoly for the supply of salicylic acid. The following statement contains such information as we are able to give in regard to the outline suggested for preparation of briefs by the Hon. O. W. Underwood. SCHEDULE "A," PARAGRAPH I, SALICYLIC ACID. In the foregoing memorandum we respectfully recommend the maintenance of present duty of 5 cents per pound on salicylic acid, because the manufacturers in the United States need this duty in order to maintain their existence against members of the European salicylic acid syndicate, which use the American market to dispose of their overproduction at much lower rates than they obtain in their own home markets. The amount of salicylic acid sold in the year 1910 by all the sali- cylic acid manufacturers in the United States was approxi- Pounds. Pounds, mately r 440, 000 The importations in 1910, according to glossary on Schedule A, prepared by the tariff board, amounted to 62, 000 Total 502, 000 The sales of the American manufacturers in 1911 amounted ap- proximately to 500,000 The importations in the year 1911 to 30, 000 Total 530,000 The sales by the American manufacturers in the year 1912 are estimated at 480, 000 And the importations at 50, 000 Total 530, 000 Three years 1, 562, 000 Average per year 520, 666 We obtain our information regarding the importations in the year 1911 and 1912 from import lists published in trade papers, which, however, are not complete and not perfectly reliable, and from the knowledge of sales of imported salicylic acid made in these years. A further increase of importations and a proportionate decrease of the sales of the domestic manufacturers would greatly increase the cost of manufacture of salicylic acid, because it would mean that the factories could only be run part of the time, which is always very uneconomical. It would then perhaps be better to entirely discontinue the manufacture. The total revenue to be derived by a duty of 5 cents per pound, if all the salicylic acid sold in this country is imported, will be about $25,000 per year. With a duty of 5 cents per pound the American industry will, however, continue and perhaps 50,000 pounds will be imported, the same as in previous years. The revenue on this amount will be $2,500. Should the duty be cut to 2 cents per pound, and should all salicylic acid be imported, the revenue derived therefrom would amount to $12,500. This revenue would then have been procured by destruction of the domestic industry. 28 TARIFF HEARINGS. PARAGRAPH 1 ACIDS. The glossary on Schedule A prepared by the tariff board gives the ad volorem duty on imports in 1910 at a rate of 10 cents per pound (under the Dingley tariff) as 32.84 per cent. At the rate of 5 cents per pound (under the present tariff) as 30.36 per cent. This seems contradictory; if the rate of 10 cents per pound is 32.84 per cent,- the rate of 5 cents per pound should be 16.52 per cent and not 30.36 per cent. We can explain this apparent discrepancy by the statement that the salicylic acid imported in the year 1910 at a rate of duty of 5 cents per pound was not pure salicylic acid, but a crude product which was sold very much below the value of the regular salicylic acid standardized by the United States Pharmacopoeia. The above compilations have been made as carefully and conscientiously as possible, and we believe that they are correct. NEW YORK, December 20, 1912. BRIEF OF MERCK & CO., NEW YORK, N. Y., ST. LOUIS, MO., AND RAHWAY, N. J. The COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. Schedule A should be modernized as to classification. There are many anomalies in classification resulting from the patchwork methods of past revisions. This condition requires no extended comment, as it has already been pointed out by the report on Schedule A by your committee in connection with H. R. 20182, passed at the last session of Congress. It is entirely in order that there should be revision of the text of the law to modernize the classification. Basket-clause definitions should he precise. In the tariff acts of the past there has been too much uncertainty, and it has frequently required protracted litigation to find out the meaning of tariff terms in Schedule A. The new law should set definite standards and make clear what is the precise meaning, for tariff purposes, of the terms used in the vari- ous basket clauses, such as acids, chemical compounds, chemical mix- tures (whatever these may be), drugs, medicinal preparations, etc. Radical revision of rates downward. Revision of the rates downward in Schedule A to any such extent, for instance, as provided in H. R. 20182 of the last session, would seriously disturb the chemical industry of this country. We are large importers, as well as large manufacturers, of the class of so-called fine chemicals, and where we might be put to a disadvan- tage by a reduction of the rates in one case we would gain correspond- ingly on the side of our import business. We would probably be less affected than any other American house in our line by radical changes such, for instance, as were adopted by the old 11. R. 20182, so far as direct effects upon our manufacturing and import costs arc concerned. But we fear that a cut from the present average of about 25 per cent to a rate of, say, 15 per cent, cutting the old one almost in half, would result in a serious unsettle- mont of trade conditions in the chemical industry. It is our opinion, based upon our dual experience and interest as manufacturers and importers, that the average rate of about 25 per cent, in general, marks the legitimate line of division between protec- tion and revenue for lino chemicals. \Vo do not argue for or against protection as such, but we strongly urge against such radical revision as will surely upset trade condi- SCHEDULE A. 29 PARAGRAPH 1 ACIDS. tions and ruin running plants whicli have existed for decades. Both protectionists and free traders must agree that sudden transition from one condition of cost basis to another is as unkealthy for com- mercial organizations as is a violent change of temperature or atmos- pheric pressure to the individual human organism. And we insist that an absolute reduction of 10 per cent ad valorem in a rate of duty is a radical cut. The increased amount of revenue that may be col- lected as a result of such cut will be incommensurate with the indirect effect upon the commerce in that product. Raw materials now free should not J)e assessed. We urge upon your committee also the danger and unwisdom of imposing heavy taxes on such raw materials as are now free of duty. They are not only burdensome to the manufacturer in unsettling his business, which has hitherto adjusted itself to the natural trade conditions, but they are, eventually, transferred to the consumer in increased measure through concentration of the product, additional profits, etc., pro- vided, of course, that the manufacturer is not altogether put out of the business of making the articles in which the raw material is used. Dynamiting the tariff wall. Your honorable chairman is reported to have stated in an interview as follows: "To reach this result I prefer to lower the tariff wall, by taking bricks off the top of the wall, rather than dynamiting the structure at the bottom." We would respectfully express our conviction that assessment of duties on such raw materials as are now being supplied to the trade free of duty is applying dynamite at the bottom of the structure. If theory of protection justifiable at all, is so in chemical industry. If the element ot protection to infant industry is to be considered to any degree, it may be noted in passing that the chemical industry as a whole in this country is, generally speaking, far behind that of Ger- many, which has attained a high state of development. ("Her supremacy as a whole is at present undisputed, etc." Page 363, report on Schedule A of Committee on Ways and Means, 1912.} STATEMENT AS TO SPECIAL ITEMS. Paragraph 1: Acid, salicylic. The present rate on this article is 5 cents per pound, and this should not be changed. The present cur- rent German market value ranges from 2.40 marks to 2.80 marks per ko. (26 \ to 30 cents per pound). The short price is for 1,000 kp. ( = 1 ton). A duty of 2 cents per pound as fixed, for instance, in H. R. 20182 is equivalent therefore to a very low and unfair ad valorem rate, and such a rate will simply put the American salicylic acid business out of existence. Error in report of Tariff Board. In the appendix attached to the report on Schedule A (H. R. 20182) the ad valorem equivalent of the specific duty of 5 cents per pound on salicylic acid (act 1909) is given as about 30 per cent for the year 1910; under the act of r897 (year 1905), with the duty at 10 cents per pound, the equivalent ad valorem rate is calculated at 32 per cent. These figures mani- festly embody an error; comparison with present values shows that 5 cents per pound figures less than 20 per cent. 30 TARIFF HEARINGS. PARAGRAPH 1 ACIDS. Paragraph 593: Iodine, crude. Iodine, crude, being a raw material, should be retained on the free list for the reasons previously stated in our general remarks in regard to the taxation of raw products. Iodine is used in preparing many important pharmaceutical and photographic preparations and also in the manufacture of aniline Paragraph 4-1: Opium, morphine, coca leaves, cocaine. The tariff tax on opium, coca leaves, etc., should not at this time be further increased, as they are already carrying an exceptionally heavy rate for drugs and as it is also contemplated to impose an internal-revenue tax on these products and to assess in addition a special tax on manufacturers of and dealers in these articles and preparations. Internal-revenue taxes on narcotics. The collection of such internal- revenue taxes on these products will create efficient machinery for restricting the traffic with habitues. An increased tariff tax would not have any effect on the illegitimate traffic, but in the meantime the accumulated charges will have considerably augmented the cost to the legitimate consumer. Rate on morphine and cocaine. However, if the duty is increased on opium and on coca leaves (as was done in H. R. 20182), then there should also be a revision of the duty rate on their alkaloids accord- ingly. Respectfully submitted. MERCK & Co., New York, N. Y., St. Louis, Mo., and Rahway, N. J. JANUARY 6, 1913. STATEMENT OF ELSON & BREWER (INC.), NEW YORK, N. Y. NEW YORK, January 11, 1913. Hon. OSCAR W. UNDERWOOD, House of Representatives, Ways and Means Committee, Washington, D. C. SIR: We beg herewith to urge a further reduction in the duty on salicylic acid. Act H. R. 20182 provided a specific duty of 1\ cents per pound, which at present prices would be about 11 per cent on the chemically pure product and 15 per cent on the technical salicylic acid. Inasmuch as both grades are largely used as basic raw materials for the manufacture of medicinal chemicals, it is evident that it would be to the interest of the masses to transfer this product to the free list. Respectfully, yours, ELSON & BREWER (!NC.), B. ELSON, President, American Agents for the Societe Chimique des Usines du Rhone, Paris and Lyon (France). SCHEDULE A. 31 PARAGRAPH 1 ACIDS. GALLIC AND PYROGALLIC ACIDS. STATEMENT OF WILLIAM A. WHITE, OF HARTFORD, REPRE- SENTING THE EASTERN CHEMICAL WORKS. The CHAIRMAN. We will now hear Mr. William A. White, repre- senting the Eastern Chemical Works. Mr. WHITE. Mr. Chairman, we have made our brief filed before the Finance Committee of the Senate a part of this brief, and I think, perhaps, I had better read from that first. [Reading:] GALLIC AND PYROGALLIC ACIDS. This company was organized in 1910, and after extensive experiments purchased land, erected buildings, and had special machinery constructed for the manufacture of pyrogallic and gallic acids, which are at present entirely imported from Germany. The prospects of success were based upon the assumption that an infant industry such as this, struggling against great odds, would be protected from ruinous competition from abroad. The foreign manufacturers of the above-mentioned products are un- questionably in a much better position, for they enjoy the advantages of enormous capital, lon established works, sales organizations, extensive experience in the art and particularly cheap manual and professional labor. In order to succeed in the manufacture of these chemicals in the United States, it was necessary to work out entirely different processes in order to avoid manual labor as far as possible. After the expenditure of much time and money we are now so far advanced that the appear- ance of our product on the market is only a matter of a few months. If, however, the proposed bill should be enacted into law, all our labor and money will be lost for the following reasons. Pyrogallol was not specifically mentioned in the tariff act of August 5, 1909; it came in under the head of a "medicinal preparation not specially provided for" (Schedule A, 65) at 25 per cent ad valorem we would call attention to the fact that it is a United States Pharmacopeia article later it came in under the head of "all other products or preparations of coal tar, not colors or dyes and not medicinal, not especially provided for" (Schedule A, 15) at 20 per cent ad valorem. And this in spite of the fact that it is a medicinal preparation mentioned in the United States Pharmacopoeia and is also used as a dye in dyeing furs. Gallic acid enters under the specific duty of 8 cents per pound (Schedule A, 1). The proposed bill makes a specific duty of 4 cents per pound on gallic acid and of 6 cents per pound on pyrogallic acid. Gallic acid can not be made in this country under so small a protection, until the manufacturers have becoma well known to the trade and have had time to refine the processes so as to reduce the cost of pro- duction as much as possible. The reasons for this are that the raw material, nut- galls, must be imported at great risk to the buyer, as shipments are very irregular and at times impossible on account of the political conditions in the only countries where this crop is gathered, namely, China, Turkey, and Persia. This is shown by the imports of gall nuts during the last six months. Under normal conditions the crop is gathered so that the first shipments start about August and most of the crop follows during the fall and winter, but during the six months ending March 1, 1912, we can only get a record of a few small lots. Another very important "reason" is that the consumption of gallic acid is not great enough to warrant its manufacture in large quantities at one time, which means that the labor element constitutes a very large proportion of the cost of production; and it must also be mentioned that the manufacture requires skilled labor and a well-trained chemist. It is a well-known fact that as soon as the manufacture of any kind of chemicals is taken up here, the foreign manufacturer reduces his price, and this is well illustrated in the case of hydroquinone, which is used in photography for same purpose as pyro. Here we are told that the only American producer has been forced to sell his product at so near cost as to leave scarcely any profit, and were it not for the loss in capital in- vested in machinery etc., would abandon the manufacture at once. This gallic acid is the product of which pyrogallic acid is made, and theoretically 2 pounds of pyro will be produced from 3 pounds of gallic, but in actual practice the yield does not approximate any such amount on account of the unavoidable losses in operation. It will therefore be seen that in this case the duty on the prime material (gallic acid) is virtually higher than that on the finished product (pyrogallic acid); 32 TARIFF HEARINGS. PARAGRAPH 1 ACIDS. for example, 3 pounds of gallic acid with the proposed duty of 4 cents per pound amount to 12 cents, while the duty on the pyro that can be obtained from 3 pounds of gallic acid would amount to only about 9 cents at proposed rate of 6 cents por pound . That was our brief before the Senate Finance Committee. Mr. HARRISON. But the ad valorem equivalents are very much the same thing on the figures taken from the' Treasury books, in one case 10.14, and in the other 9.60. Those are the only figures we can go by. Mr. WHITE. Yes; but you are taking the figures of the propor- tionate tariff per pound or per dollar's worth, but gallic acid is prac- tically a raw material for pyrogallic acid. Mr. KITCHIN. How much is the product in the United States for 1912? Mr. WHITE. How much was it? Mr. KITCHIN. How much did it amount to, the American product ? Mr. WHITE. I have no report for 1912, but I gave it in my previous evidence for 1907, 1908, 1909, 1910 and 1911. The Oil, Paint, and Drug Report gives it for 1907, 1908, 1909, 1910, and 1911. It was 38,000 pounds for 1907. This is merely in thousands. Mr. KITCHIN. How much is that in dollars ? How much would it be, about? Mr. WHITE. For the fiscal year 1908-9 the average invoice price was $1.04. This is the price on which duty was computed. In 1908, it was 32,000 pounds, 23,000 pounds in 1909, 37,000 pounds in 1910, 22,000 pounds in 1911. [Reading:] Since appearing before the Committee on Finance of the United States Senate, we have entered the market and we have found that the statements made in our brief "submitted to that committee and hereto appended have been fully substan- tiated by the facts brought to light by our actual manufacturing experience. Espe- cial attention should be called to the fact that we find the item for wages and sal- aries to all employees to constitute about 35 per cent of the present selling price. This item alone is well known to be at least twice as high as that borne by the Ger- man manufacturer and is the Chief reason why we are compelled to ask for a con- tinuance of the present rate of 25 per cent ad valorem for pyrogallic acid and of 8 cents per pound on gallic acid. The now existing rates are barely sufficient to equalize the difference in the item of wages and salaries above mentioned. Another reason is that the revenue would decrease, for the amount of pyrogallic and gallic acids imported would not increase at all by any lowering of the duty, since at present the entire consumption of this country is imported from Germany, and consequently the revenue would be smaller in exactly the same proportion as the duty is lowered. The Germans and their agents here would be the only ones benefited by such a measure. The manufacture of these articles, which is a difficult one, would be ruined by their competitive practices and they would be given the monopoly which we are now trying to wrest from them. As they are not hindered, and, if anything, encouraged to form syndicates, which are unlawful in this country, they will dump their goods on our market until we are ruined and then reimburse themselves by fixing the prices so high after that end is once attained that the consumer will be much worse off than if through a slight protection competition had been kept alive. The practice here mentioned is proven by the statistics of importations. For instance, during the fiscal year 1908-9 the average invoice price of pyrogallic acid was $1.04. In 1909-10 the average invoice price of pyrogallic acid was |0.68. In 1910-11 the average invoice price of pyrogallic acid was"$0.641. That was owing to the tremendous competition between manufac- turers in Germany who afterwards got together, and the price for the last quarter of 1911 and 1912 was 95 cents. We have invested a large sum of money in experiments to adapt this difficult indus- try to the peculiar conditions existing here, and more money was spent in buying land and building and equipping a factory. The equipment is all of such a nature that it had to be designed and built specially for our particular needs, and jf we are SCHEDULE A. 33 PARAGRAPH 1 ACIDS. ruined by any lowering of the present duties on the articles in which we are interested nearly all this could not be sold or utilized for any other purpose, but would be scrapped at a total loss. For the reasons above set forth we would respectfully ask for a continuance of the present duty of 25 per cent ad valorem on pyrogallic acid and of 8 cents a pound on gallic acid, which, all things considered, are not too high and would not create a monopoly on this side. We shall then in this country be enabled to fight the German monopoly and to gradually build up an independent industry. We may sum up the consequence of any lowering of the tariff on pyrogallic acid and gallic acid thus: First. Smaller revenue for the United States Treasury. Second. Higher prices to the consumer. Third. Strengthening of the grip of the German monopoly. Fourth. Ruin of a young industry which now promises to create competition and ultimately reduce the price to the consumer. Mr. KITCHIN. How long do you think it would take, with this present tariff, for that industry to become an old industry that is, not an infant industry one tnat would not need this protection ? Mr. WHITE. It is somewhat difficult to say, but if we should be able to get hold of the market firmly in five years we should accom- plish a great deal, I think. Mr. KITCHIN. You would not need much protection, then? Mr. WHITE. I do not think we would. I think as soon as we have become known to the trade and have a chance to refine our methods so as to reduce the labor element as far as possible, we shall not object to a reasonable lowering of the tariff; but we shall always have the element of low wages paid to foreign labor to contend with. In Germany, in a continuous process, the laborers work 12 hours a day. They have two shifts which work the entire 24 hours. Our laborers work 9 hours. If we put on continuous process we must have three shifts of 8 hours. We could not get laborers to work 12 hours here. Not only that, but we pay our laborers $12 to $15 a week. Over there they pay not over naif of that. Mr. HILL. Gallic acid is made from nutgalls, which are on the free list? Mr. WHITE. Yes, sir. Mr. HILL. Pyrogallic acid is made from gallic acid ? Mr. WHITE. Yes, sir. Mr. HILL. This bill of last session cuts the duties on both of them about 60 per cent, from 25 to 10. The question I want to ask is, Can you continue to manufacture the gallic and pyrogallic acid if nutgalls remain on the free list, as they are now, with a reduction of 60 per cent of the present duty without cutting your wages ? Mr. WHITE. We can not do it under any conditions. Mr. HILL. Then, you can not continue the manufacture at all? Mr. WHITE. No, sir. Mr. HARRISON. What is the process of making pyrogallic acid out of gallic acid ? Mr. WHITE. It is a secret process. I can tell you in a general way. Mr. HARRISON. Is it an expensive process ? Is it a high grade of manufacture ? Mr. WHITE. It is not a high grade of manufacturing, as classed with watchmaking, perhaps, or something of that character, but it requires a class of labor that we pay from two to two and a half dollars a day. 78959 VOL 113 3 34 TARIFF HEARINGS. PARAGRAPH 1 ACIDS. Mr. HARRISON. You make it out of gallic acid ? Mr. WHITE. Yes. We are now trying to make our own gallic acid. We expect to make our own gallic acid. We have large quantities of nutgalls now on the way from China, and while we nave not yet made our gallic acid so as to be able to compete with the gallic acid we can buy abroad, we fully expect to do it, and we can say it is an assured thing. Mr. KITCHIN. About how much of this acid is consumed in the United States ? Mr. WHITE. I do not know. Mr. KITCHIN. We imported only about $9,000 worth of it last year, and I believe your figures there gave a production of about $22,000, so that would indicate we did not consume over $32,000 all over the United States. Mr. WHITE. The Treasury figures, or the import figures, are very misleading. Mr. KITCHIN. There must have been some smuggling going on. Mr. WHITE. Oh, no, sir. I beg your pardon. The acid comes in under "Other articles not specifically mentioned." Mr. KITCHIN. No, it comes in under "gallic acid." Mr. WHITE. Pyrogallic acid, too. Mr. KITCHIN. What I wanted to get at is this: Is it a big industry ? Do we make as much as $1,000,000 worth in the United States? Is there much of it consumed ? Mr. WHITE. No, sir. At present it is impossible to ascertain the exact amount of pyrogallic acid imported. It is well known to the trade that the actual amount imported is much larger than the Treasury reports show. We have been told by Mr. O. P. Austin, of the Bureau of Statistics, that this is on account of pyrogallic acid not being specially mentioned in the tariff act of August 5, 1909. It is optional with the importer to enter it as pyrogallic acid or as "an acid not specially provided for." (Schedule A, par. 1.) Reliable estimates place the actual importation at between 100,000 and ] 50, 000 pounds annually. The CHAIRMAN. You have passed over your time considerably. Is that all you desire to say ? Mr. WHITE. That is all. Mr. LOXGWORTH. Is your labor any more efficient than similar labor in Europe ? Mr. WHITE. No, sir; I do not believe it is. Mr. RAINEY. Does Germany get her supply of nutgalls from China also ? Mr. WHITE. Yes, sir. Mr. RAIXEY. The world's supply comes from China? Mr. WHITE. Practically. Some comes from Persia and some from Turkey, but practically all from China. SCHEDULE A. 35 PARAGRAPH 1 ACIDS. BRIEF OF BAKER & ADAMSON CHEMICAL CO., EASTON, PA. EASTON, PA., January 27, 1913. Hon. OSCAR W. UNDERWOOD, Chairman, Ways and Means Committee, House of Representatives, Washington, D. C. SIR: So far as this company's interests are concerned the changes proposed in the Underwood bill (H. R. 20182) would be injurious only in respect to the following reductions in the duties on five photographic chemicals, ail of which are coal-tar products, except pyrogallic acid: 1. Mono^methyl-para-amido-phenol (known as "metol"): Present duty, 20 per cent (par. 15); proposed duty, 15 per cent (H. R. 20182, par. 22). 2. Diphenyl oxide: Present duty, 20 per cent (par. 15); proposed duty, 15 per cent (H. R. 20182, par. 22). 3. Cinnamic acid: Present dutv, 25 per cent (par. 1); proposed duty, 15 per cent (H. R. 20182, par. 1). 4. Pyrogallic acid: Present duty, 25 per cent (par. 1); proposed duty, 6 cents per pound (H. R. 20182, par. 1). 5. Hydroguinone (hydrochinori) : Present duty, 25 per cent (par. 65) or 20 per cent (par. % 15); proposed duty, 15 per cent (H. R. 20182, par. 22). Since our domestic trade in these articles is controlled by Europe, and since European exportations to the United States are sold at prices having no relation to the rate of duty, we think it certain that a moderate increase in the rate of duty would not tend to increase domestic prices. We, therefore, suggest an advance of duty to 30 or 35 per cent ad valorem generally on all coal-tar chemicals covered by paragraph 22 of the bill under consideration, and on cinnamic acid and pyrogallic acid belonging to paragraph 1. Practically the entire domestic consumption of fine chemicals, espe- cially coal-tar products such as the five above specified, is and always has been imported from Europe, where the production and sale are controlled by "convention" embracing substantially all the manu- facturers. As a consequence, exportations to the United States are sold at prices generally very much in excess of cost, since very few of the articles are manufactured in this country. On the other hand, the European prices to the United States for those few articles which domestic manufacturers have lately attempted to produce and sell in competition with the foreign "convention" are frequently, if not gen- erally, below cost in accordance with the avowed and determined policy of European manufacturers to stamp out all attempted Ameri- can competition in this entire field. This is the case with the five articles above specified. Until 1910 none of them was manufactured in this country. Since that time we have manufactured and sold each of them in quantities which are relatively small as compared with the European exportations to this country. The following table of domestic prices for these articles in 1910 and 1913 illustrates both the excessive European prices for fine chemicals when not produced in this country and the European cut- throat prices for those few which domestic manufacturers attempt to 36 TABIFF HEARINGS. PARAGRAPH 1 ACIDS. produce and sell in competition with the European "convention." Obviously, neither scale of prices bears any "relation to the present relatively insignificant duties on these articles : 1910 1913 Metol $5. .50 $2 .50 Diphenyl oxide 4.00 1.25 2.00 1.00 Pyrogallic acid 1.80 1.20 Hydroquinone 1.20 .52 Past experience shows, therefore, that so lonj* as the United States market in these and similar articles is controlled by Europe which must be for a long time to come any ordinary rate of duty is not an appreciable factor, either in the determination of the volume of imports or in the determination of domestic prices. Respectfully submitted. BAKER & ADAMSON CHEMICAL Co., GEORGE P. ADAMSON, Vice President. SULPHURIC ACID. ' STATEMENT OF W. H. NICHOLS, JR., VICE PRESIDENT OF THE GENERAL CHEMICAL CO. Mr. NICHOLS. Mr. Chairman and gentlemen of the committee, I represent the General Chemical Co., manufacturers of what is known as heavy, inorganic chemicals almost exclusively, such as sulphuric, muriatic, and nitric acids, some of the soda products, and some of the alums. We have never enjoyed a very serious protective tariff in our particular branch of the chemical industry, and it was not with the idea of complaining that the tariff is not sufficient to pro- tect us on the bulk of our manufactures that I appear here. I believe it is true in our line of business that we need no protection based solely on the difference between the cost of manufacture in this country and abroad. We have tried to take the best methods that wo can find and adapt them to the conditions in this country, enabling us to pay the same rate of wages to our workmen as in other lines of industry, and making it unnecessary in many cases to ask for pro- tection. There are two or three articles that we are interested in that I believe have been overlooked, or possibly have not been fully under- stood by the committee having this matter of revision in charge. Out of the 30 or 40 articles that we manufacture there are practically only three on which we would bring up this question of possible error. One is what is known as sodium sulphide. The solution of sodium sulphide has been put on the same basis as the concentrated in the proposed bill, so that an article of twice the strength of the solution comes in at the same rate of duty as the solution. The concentrated should take twice the duty of solution. The CHAIRMAN. Is it an ad valorem rate or a specific rate? SCHEDULE A. 37 PARAGRAPH 1 ACIDS. Mr. NICHOLS. A specific rate. Epsom salts, in which we are inter- ested, and, as has been pointed out in your very complete appendix and glossary to the chemical schedule, is made largely from magne- site. It is also manufactured from kieserite or crude magnesite sul- phate which is a production of a German syndicate. I think under the present wording of the proposed bill, the crude material takes the same duty as Epsom salts, which is cut from the old rate of 20 cents to 10 cents per 100 pounds. We are entirely in the hands of our German friends in this matter, as we make our Epsom salts on suiferance. They are getting to-day, as near as I can discover, a little more for the crude kieserite than they are from their Epsom, after they have manufactured it from kieserite, and it is simply a question of what they want to let us make over here. The duty should remain on Epsom salts and kieserite should be free. The third article is acetic acid. This under the old schedule took a moderate duty for the weaker strength and 2 cents a pound for the so-called strong glacial acid. It is now proposed that acetic acid be placed entirely upon the free list. On the other hand, you have put on the dutiable list acetic anhydride, which may be said to be still stronger, at 2^ cents a pound. I should urge very much the placing of glacial acid on the dutiable list at something like the old rate of 2 cents a pound, whether the weaker acid is or is not. These materials I believe to be illustrations of chemicals that can come into this country at times irrespective of the rate of tariff that is placed upon them the so-called "dumping 7 ' of certain surplus manufactured products from the other side. While we have by-product acid in this country, large volumes of it, it is made at points where the freight to the consuming points is very heavy; but in many directions we are growing faster man our production of by-product materials. On the other hand many of our European manufacturing competitors have surplus sulphuric acid to place. They can not place it directly as sulphuric acid and it must therefore be placed as one of the salts, as glacial acetic acid, or some other product made by the use of sul- phuric acid. Seeing the need of protecting themselves from this class of importation Canada instituted what is known as a dumping clause, and I believe it has been successful. Whether or not it is wise to enact such a clause into our law, I am not prepared to say. I do think, however, that inasmuch as we must secure in this country some revenue for the maintenance of the Government, I think the duty should be placed on just such things as these I have mentioned and of course there are many other things upon which it will be perfectly reasonable and fair to place a duty. It is quite immaterial, on some of these things what the duty is. If the foreign manufacturer wants to place them here, he is going to place them here . We are going to do our best to keep them from taking our business away from us, whether there is a duty or whether there is not a duty. In our experience we have found that irrespective of duty many of the foreign manufacturers will bring in such articles as glacial acetic acid, without any reference whatever to the cost but simply as a surplus material that they desire to rid themselves of. Mr. HILL. You would do the same thing abroad if you had the surplus ? 38 TABIFF HEARINGS. PABAGBAPH 1 ACIDS. Mr. NICHOLS. Absolutely; and I make no argument against it. But here is an opportunity for us to get additional revenue without charging the ultimate consumer more. I would like to add just a word or two about things in which we are only very slightly inter- ested. You have, and wisely, I believe, decided to place a duty on aniline oil and salt. We are interested in a company producing aniline oil and salt in this country. Mr. HARRISON. What is the amount of production of those things ? Mr. NICHOLS. I think our maximum production in this country would be 1,000 tons. I think that is one-half of the consumption in this country. You have, I believe, placed that on the dutiable list at 10 per cent. Whether that is going to protect a very young infant which is starting, is something I do not know. I believe a larger duty than that would be reasonable 15 or 20 per cent. The industry was started in a tune when there was no protection. Mr. JAMES. Which would produce tne most, 15 or 20 per cent? Mr. NICHOLS. I believe you would get all the revenue you charged, because the production is not sufficient to meet the demand. Mr. HILL. Why did you start that industry without any duty? Did you think you could make it pay? Mr. NICHOLS. There are a great many experiments that we try Mr. HILL. Mr. Emory was speaking of the manufacture of oxalic acid running 6 years under free trade. You say you started this industry without any duty on it at all? Mr. NICHOLS. Yes, sir. Mr. HILL. And you think it ought to have more duty than the committee has given it ? Mr. NICHOLS. We agree with the Congress which has already decided that the duty on that for revenue purposes, I believe, was wise. Mr. HILL. Did you start it for the purpose of using the by-prod- uct, or with the idea of making a successful business investment ? Mr. NICHOLS. That is one of the things in which we use sulphuric and nitric acid, a thing which I believe we must encourage in this country, the use of the growing production of what might be called basic chemicals. Mr. HILL. You did not start it as an altruistic proposition? Mr. NICHOLS. We haven't made any money. Mr. HILL. You are not satisfied with your experience? Mr. NICHOLS. It has not been very good. Mr. HARRISON. This witness has made no request for protection. Mr. HILL. I know that. Mr. NICHOLS. We have no business in this country in fine chemicals that can compare with the chemical industry abroad. It is simply a question of whether it is not wise to foster the growth of the chem- ical industry or at least give us a source of revenue. I believe that our business is going to grow over here, whether we have free trade or whether we do not. I believe that we are going ahead in this country, but I think there are certain things that should be pro- tected and that certain duties should be levied. It seems to me to l)e a question so important that one man's wisdom is not sufficient to cover the ground. SCHEDULE A. 39 PARAGRAPH 1 ACIDS. The CHAIRMAN. There are several other witnesses, and we must adjourn early this afternoon. Mr. NICHOLS. I am entirely at your disposal. The CHAIRMAN. Have you covered the ground that you wish to cover ? Mr. NICHOLS. I have, sir, unless you would like to ask me to submit a brief later on. The CHAIRMAN. We would be very glad to have you submit a brief. Mr. NICHOLS. I intended to have the chairman of our research department to do that, but that has been impossible on account of his illness. The CHAIRMAN. If you will submit your brief and get it in to-day, it will be printed in the hearings on the chemical schedule; if not, it would go back in another schedule, where it would not be so much in evidence. Mr. NICHOLS. Any brief that I would submit to-day would be of no very great aid to your committee. The CHAIRMAN. You can file a brief at any time before the hear- ings are over, at the end of the month. Mr. LONGWORTII. Where are your plants ? Mr. NICHOLS. We have them all over the country. Mr. LONGWORTH. You have a number of them? Mr. NICHOLS. Yes, sir; we have about 25 of them. At a later date the witness filed the following statement of General Chemical Co. regarding the Underwood bill to amend the Chemical Schedule of the tariff act. NEW YORK, JANUARY 27, 1913. Hon. OSCAR W. UNDERWOOD, Chairman, Ways and Means Committee, House of Representatives, Washington, D. C. SIR: In accordance with your request to our vice president, Mr. W. H. Nichols, jr., at the hearing of 7th January 1913, we submit a few criticisms of the Underwood bill. \Ve are of the opinion that no great injury would result by the adoption of the amend- ments to the duties in that portion of Schedule A with which we are familiar, and we would be willing to accept the proposed amendments with the exception of four articles, namely: "1. Magnesium sulphate: Epsom salt and kieserite. Page] 11, line 22, erase "one- tenth" and in lieu thereof insert "one-fifth." Page 22, between lines 19 and 20 insert "88a kieserite." Kieserite contains about 60 per cent sulphate of magnesia in an impure state, which has always been on the free list (paragraph 602 of present tariff act); its only use is as a raw material for Epsom salt and for which it is the only commercial raw material; it must all be imported since this country has no deposits thereof. If the understanding be correct that, in general, raw materials are to be duty free, then kieserite should be definitely placed on the free list in some such manner as that proposed; the bill, as at present framed, leaves open to serious discussion whether or not kieserite is dutiable under paragraph No. 45 of H. R. 20182. In any event, we believe that sulphate of magnesia or Epsom salt should be taxed as heretofore, namely, one-fifth of 1 cent per pound, plus any tax that may be assessed against kieserite. and we so request, the reason being that 1 pound of kieserite produces about 1 pound of Epsom salt. In this connection it is only jiist to you and to us to point out that on page 229 of report No. 326 on Schedule A, kieserite is not mentioned as a raw material for Epsom salt; the statement there made that Epsom salt is obtained from a by-product in the making of liquid carbonic acid was true some years ago, but no longer represents the actual state of affairs. It may very well be that this incorrect statement led to the omission of kieserite from the free list of H. R. 20182. 40 . TARIFF HEARINGS. PARAGBAPH 1 ACIDS. 2. Sodium sulphid. Page 19, line 25, erase "sulphid of, and." Page 20, line 1, before "cyanide" insert "sulphid of, containing not more than 35 per cent of true anhydrous sodium sulphid, one-fourth of one cent per pound; containing more than 35 per cent of true anhydrous sodium sulphid, one-half of one cent per pound." In the manufacture of sulphid of soda two distinct and clearly differentiated com- mercial qualities exist and are so recognized and so treated in the trade. They are known as "crystal" and "concentrated" respectively. "Concentrated" contains rougly twice as much actual active material as "crystal;" "crystal" seldom, if ever, contains more than 35 per cent true anhydrous sulphid of soda, whereas "concentrated ' rarely contains less than 60 per cent true anhydrous sulphid of soda. "Concentrated " can and does therefore, weight for weight, perform twice the work of "crystal;" "concentrated" is in a more advanced stage of manufacture than is "crystal." These iacts are our reasons for suggesting that "concentrated" should bear twice the duty imposed on "crystal." We are convinced therefore that for purposes of fair taxation ft would be better to define the grades of sulphid of soda by their actual content in anhydrous sulphid, and suggest that the two classes be distinguished by drawing a line between sulphids containing more than 35 per cent and those. containing less than 35 per cent. It would seem that such a classification would be better than "crystal" and "concentrated." We agree to the 50 per cent cut in duty on "crystal" as proposed in H. R. 20182. 3. Acetic acid. Page 21, line 4, after "pyroligenous" insert "containing not more than 65 per cent of true acetic acid." Page 2, line 7, before "benzoic " insert "acetic acid containing 65 per cent or more of true acetic acid, 2 cents per pound." In the chemical manufacture of acetic acid there are at present several processes in use, and the average resulting product contains about 65 per cent of true acetic acid. In order to produce acids of higher strength, it is necessary to add another step in the manufacture. Since it is a fair general statement that acetic acid of more than 65 per cent strength is a different article of manufacture from acid below 65 per cent, and is in a more advanced stage, and since the actual value of acetic acid is greater the greater its strength, we accept the placing of the weaker acid on the free list and ask for the retention of the present duty rate of 2 cents per pound on acid of a strength above 65 per cent. 4. Nitrate of soda. Page 23, between lines 9 and 10, insert "95a soda, nitrate of, or cubic nitrate." Nitrate of soda is now on the free list (paragraph 677). It is omitted from the free list in H. R. 20182 and would therefore presumably be assessed at 10 or 25 per cent duty according to the classification finally adopted for it; at any rate its position now is ambiguous. Nitrate of soda comes exclusively from South America, the United States importing between 400,000 and 500,000 tons annually; none is produced in this country. About 40 per cent is used in agriculture as fertilizer; about 40 per cent is used in explosives; about 15 per cent is used in chemicals; about 5 per cent is used in miscel- laneous. It is essentially a raw material and its omission from the free list must be an over- sight. The duty on many items in the chemical schedule might, however, we believe, be advantageously retained as in the present act, or even raised, without reducing impor- tations or affecting prices. In the United States the chemical industry as a whole is not evenly developed. The manufacture of fertilizers is its largest branch and is absolutely unprotected by any tariff. In the manufacture of heavy chemicals, sulphuric acid, muriatic acid, and nitric acid, there is either no duty at all or it is a noneft'ective duty. The large num- ber of mineral salts made from these acids are dutiable and furnish some revenue. They are subject to attack from Europe, and the tariff placed upon them is simply a means of collecting revenue rather than in any sense a protective measure. Coal-tar dyes and medicines are other branches of great importance, but they can hardly bo said to exist in the United States. A moderately high duty on these prod- ucts would, we believe, neither rest rid the importation thereof nor seriously affect the selling price of the finished produds consuming them. Paragraphs 487 and 592 of the pn-sent free list might safely be put on the dutiable list at a duty of 30 per cent ad valorem or even higher, and paragraphs 536, 639, and 491 might be raised to 15 or 20 per cent,. The census bulletins show the total revenue under Schedule A in 1911 to have been 4.0<; per cent of the entire revenue collected under the existing act, while for the previ- ous 10 years the average tariff collected from Schedule A was only 3.42 per cent. The average rate of duty on all of the schedules is 41 per cent and the average rate of duty on Schedule A is 23 per cent. SCHEDULE A. 41 PARAGRAPH 1 ACIDS. A study of the appended table will make it obvious that Schedule A has never been treated as a source of revenue. Consideration from this point of view may well result in the Government's pursuing a diffenert policy. The chemicals manufactured by this company on which a duty is assessed, are as follows: Sodium hyposulphite, sodium sulphid (crystal and concentrated), sodium phosphate, trisodium phosphate, sodium sulphite (crystal and anhydrous), sodium silicate, bichloride of tin, tin crystals, alum products. These are all dependent upon cheap sulphuric acid, and when Europe is permitted to dump its biproduct acid in this country in the form of such salts, it simply deprives the United States of an outlet for its own acids. If these importations are to be allowed then we strongly recommend the Government's collecting a revenue thereon, which it can do without the least risk of increasing the cost of the articles to the consumer. Respectfully submitted, GENERAL CHEMICAL COMPANY, W. H. NICHOLS, JR., Vice President. Rough analysis of Schedule A yielding 4 per cent of total tariff revenue. Approximate valueUnited States pro- duction. Value of imports. Duty collected. Total. Per cent. Total. Average rate. Heavy chemicals l $125,685.000 49,212,000 4,505,000 2,267,000 8,054,000 63,537,000 91,780,000 124,889,000 $12,226,385 10,731,626 33,738,548 12,218,722 8,726,995 32,749,574 829,141 2,017,507 10.8 9.5 29.8 10.8 7.7 28.9 0.7 1.8 $764,553 422,294 4,534,267 1,911,446 1,222,833 3,126,281 271,697 618,403 Per cent. 6.25 3.93 13.50 15.64 14.01 9.54 32.80 36.50 Alkalis and alkalis salts . . Medical chemicals and fine chemicals Dyes and coal-tar products Extracts Oils. ... . . Soaps Paints Total 469,929,000 113,238,498 100.0 12,871,774 1 Includes $104,000,000, fertilizers'. STATEMENT OF THE COCHRANE CHEMICAL CO., BOSTON, MASS. BOSTON, MASS.. January 2, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Committee on Ways and Means, Washington, D. C. DEAR SIR: We, the Cochrane Chemical Co., of Boston, a Massa- chusetts corporation, beg to present our views on the proposed tariff reductions in Schedule A. Our principal product is sulphuric acid, on which there is now a duty of one-fourth cent per pound. We admit that the full amount of this duty may not be necessary in the case of competition with the European nations, where freight rates form a natural barrier. In the case of Canadian competition, however, the situation would be dangerous to the American sulphuric-acid producer. Canada is rich in raw material, viz, pyrites, and with cheaper labor can, if the duty is removed, flood our markets, while we would be unable to retaliate so long as she retains her present tariff, forti- fied by a "dumping clause." Under these circumstances our disadvantage is obvious. We believe it would be only fair to our interests to have a similar dumping clause, especially if the duty should be entirely removed. 42 TARIFF HEARINGS. PARAGRAPH 1 ACIDS. We further believe that it is not only unwise but impossible to intelligently draw up the chemical schedule until the various mineral schedules which deal with our raw materials, such as lead, zinc, bauxite, etc. have been settled. As the manufacture of chemicals is by far the most complicated and technical of any of the industries of the countries, it i$ a schedule not to be drawn up hurriedly. In closing, we think that the most practical policy and fairest to all concerned would be somewhat as follows: First. Eliminate the tariff peaks by reducing excessive rates, so that the advantages of protection may be more equitably distributed among its beneficiaries. Second. Abolish tariff on raw materials essential to American industries in order to compensate for lower rates upon the manu- factured products. Third. Reduce duties upon manufactured articles gradually by enforcing as far as possible a moderate percentage of reduction each year for a period of years. Yours, very truly, COCHRANE CHEMICAL Co., LINDSLEY LORING, Treasurer. CITRIC ACID. STATEMENT OF POWERS-WEIGHTMAN-ROSENGARTEN CO., MANUFACTURING CHEMISTS, PHILADELPHIA, PA. PHILADELPHIA, January 6. 1913. The Hon. OSCAR W. UNDERWOOD, Committee on Ways and Means, House of Representatives, Washington, D. C.: Citric acid is now assessed at a duty of 7 cents per pound. This duty, which is a trifle less than 25 per cent ad valorem, should be allowed to remain undisturbed, as great advantages are possessed by the foreign makers owing to cheaper labor, cheaper apparatus, and cheaper reagents which enter into its manufacture. This article is made from citrate of lime, which is imported from Sicily and the West Indies, and also from lime juice obtained from the West Indies. These raw materials, citrate of lime and lime juice, should remain upon the free list. There is no country in the world which imposes an import duty on either of them. Respectfully submitted. POWEHS-WEIGHTMAN-ROSENGARTEN CO., A. G. ROSENGARTEN, Treasurer. SCHEDULE A. 43 PARAGRAPH 1 ACIDS. STATEMENT OF CHARLES PFIZER & CO. (INC.), NEW YORK, N. Y. Hon. OSCAR W. UNDERWOOD, Chairman Committee on Ways and Means, House of Representatives, Washington, D. 0. DEAR SIR: Pursuant to your notice of tariff hearings, 1913, dated December 11, 1912, we beg to submit the following. The para- graphs mentioned below refer to the present tariff law: Paragraph 1. Citric acid. Present rate, 7 cents per pound. This represents, on the present market price abroad, less than 20 per cent ad valorem, which we think is little enough to enable the manufacturers in the United States to compete with the lower cost of production in Europe. Imports into the United States of foreign manufacture are constant, and at present rate, therefore, the Gov- ernment obtains a revenue. Under the Wilson bill this article was dutiable at 25 per cent ad valorem. We suggest, therefore, that the present rate of duty should be maintained. In European countries combinations and agreements to maintain prices are not only permissible but encouraged by some Govern- ments, as is well known; hence if, because of a reduction in our tariff rate, manufacturers in the United States found it unprofitable to operate, the people of this country would be the eventual sufferers by being compelled to pay much higher prices because of control of markets in Europe beyond the reach of the laws of the United States. Paragraph 613. Lime, citrate of. Now on the free list of the pres- ent tariff. Paragraph 610. Lemon juice, lime juice. Now on the free list of the present tariff. These are the raw materials for the manufacture of citric acid. In no large manufacturing country of the world is there an import duty imposed on these crude materials. The greatest country of produc- tion is Sicily, and in that country the Italian Government has estab- lished a monopoly, controlling prices to be paid by buyers. We strongly recommend that lime, citrate of; lemon juice; and lime juice be retained upon the free list. If for any reason, however, in the wisdom of your committee, it is deemed desirable to effect a tariff on these articles, then we trust that an equivalent advance on the tariff on citric acid be effected, bearing in mind always that it takes from 1 to If pounds of citrate of lime to manufacture 1 pound of citric acid. Paragraph 1 . Tartaric acid. Present rate, 5 cents per pound. This rate has increased imports very largely to the detriment, proportion- ately, of the manufacturers in the United States. The imports in 1907 were 11,573 pounds, and increased constantly until in 1911 they were 331,538 pounds. Crude argols is the raw material for the manufacture of this article. European makers of tartaric acid operate by using the lowest grade of wine lees and the refuse which they get from the wine presses. American manufacturers can not use this low-grade stuff because of added freight costs from Europe on about 80 per cent waste material and because of labor costs being at least three times greater in the 44 TARIFF HEARINGS. PARAGRAPH 1 ACIDS. United States than in Europe. Further, the makers in the United States must pay duty on the crude material used, while the Europeans have it directly at their doors free of any extra cost. Manufacturers in the United States also pay from 50 to 100 per cent more for other raw materials used in the manufacture of tartaric acid, as well as everything that goes into construction of plant and operation of same. In and about our factory we employ labor in the form of carpenters, coppersmiths, tinsmiths, machinists, masons, and ordinary workmen, as well as high-priced chemists, clerks, etc., to all of whom we pay wages far in excess of anything paid in other countries. The advantages possessed by the European makers over the manu- facturers in the United States in practically everything that goes to make up the cost of producing this article is not offset by a duty of 5 cents per pound. To make a relative and proper proportion of rates, as compared to cream of tartar mentioned below, the duty upon tar- taric acid should be 6J cents per pound. Paragraph 6. Cream tartar. Present rate, 5 cents per pound. What we have said above with regard to tartaric acid applies with equal force to cream tartar. We think if the duty on crude argols is maintained at 5 per cent ad valorem, as at present, that the rate upon cream tartar should remain at 5 cents per pound. The chemical ratio between tartaric acid and cream tartar is as 1 is to 1|, 1 part of tartaric acid being equal to 1^ parts of cream tartar. Paragraph 6. Tartrate of soda arid potash or Rochelle salts. Present rate, 3 cents per pound. This rate was established under the law of 1909, and the imports during the fiscal year of 1909 immediately increased to 40,123 pounds, as compared to the import in 1908 of 1,722 pounds. Imports have constantly increased since the enactment of the law of 1909, so that during the fiscal year 1911, 78,257 pounds were imported, and, as far as we have been able to learn, imports during the fiscal year 1912 will exceed at least 125,000 pounds, clearly demonstrating that the law of 1909, establishing a rate of 3 cents per pound, is as low as it should be. The crude material for this article is crude argols, and what we have said above with regard to tartaric acid and cream tartar applies with equal force to this article. Paragraph 6. Argols or crude tartar, or wine lees, crude. Present rate, 5 per cent ad valorem. About 95 per cent of all the consumption in the United States is imported from European centers. These articles are the crude material for the manufacture of cream tartar, tartaric acid, and Rochelle salts. If in the wisdom of your committee this crude material is placed upon the free list, then a proportionate reduction could be consistently made in the above- mentioned rates for the products. If, on the other hand, any advance in the tariff rates on this crude material is deemed wise, then a pro- portionate increase should be made in the rates of duty for the above- mentioned products. Respectfully, yours, CHARLES PFIZER & Co. (!NC.). FRANKLIN BLACK, Secretary. NEW YORK, January 6, 1913. SCHEDULE A. 45 PARAGRAPH 1 ACIDS. TARTARIC ACID. BRIEF OF THE HARSHAW FULLER & GOODWIN CO., CLEVE- LAND, OHIO. JANUARY 6, T 913. SIR: Paragraph 1 provides for a duty on tartaric acid of 5 cents per pound. Paragraph 6 provides for a duty on argois or crude tartar or wine lees, crude, 5 per cent ad valorem; also cream of tartar and patent tartar, 5 cents per pound. We respectfully ask that no change be made in the duties on these articles. On April 1, 1911. Mr. E. Fabre, who was for 15 years superintendent of the largest factory in Europe, engaged in the manufacture of cream of tartar and tartaric acid, entered our employ to superintend the building, equipping, and operation of a plant for the manufacture of these products, in connection with our chemical works located at E^ria, Ohio. The plant was completed in August, 1912, and has been in operation since. While we nave not been long enough in the business to have full information as to the cost of manufacturing and distributing these goods, we have learned enough to know that if any material reduction is made in the tariff we can buy them cheaper abroad than we can produce them here. Through Mr. Fabre we have complete information as to manufacturing conditions in France. Our factory was built by American workmen receiving the American scale of wages. It is equipped entirely with American-made machin- ery. We are advised by our superintendent that the cost of building and equipping our factory was almost double that of a similar plant in France. Our minimum wage is $2 per day, and the average wage paid is $2.80 per day. In the French factory, of which our superintendent had charge, the minimum wage paid was 3J francs per day; the average was 4 francs, or a little less than 80 cents per day American money. In other words, the average daily wage in the French factory is less than one-third of the average wage in our factory. The raw material used by us is obtained almost entirely from France, Italy, and other wine countries of southern Europe, as our own country produces only about 2 per cent of the total amount which it consumes. The majority of the crop is marketed during three or four months of the year, and this, coupled with the fact that we are so far from the source of supply, compels us to keep invested large sums of money in stocks of raw materials. We pay freight on this raw material from Europe to Elyria, Ohio, not only on the goods which can be used, but on impurities contained in them, which amount to from 30 to 50 per cent of the total bulk, and have no value as a by-product. The foreign factories, which are close to the supply of raw material, are able to obtain it as required, and do not have to invest large sums in supplies. In addition, they can obtain at low prices goods which are wet or otherwise damaged, and consequently not in fit condition to transport a long distance. 46 TARIFF HEARINGS. PARAGRAPH 1 ACIDS. Moreover, the cost of packages, transportation charges, and general expenses of doing business are much greater in this country than abroad. Briefly, we have tried to give some of the items that make up the difference in the cost of manufacturing these products in this country and in foreign countries, and if we are to continue this manufacture of them there must be a sufficient tariff to cover the difference. The present tariff barely does this. We would not object to a reduction on the present tariff on the finished goods, provided a corresponding reduction were made on the raw materials, but the parity between the two must be maintained. If changes are made that prevent us from operating our factory the loss will fall not only upon ourselves and the men we employ directly, but in more or less degree upon the entire community, as the well-being of the people of a manufacturing town depends upon the constant operation of its factories. We are not connected in any way with other manufacturers of these .products in this country, and ask for no protection against manufac- turers who are working under the same conditions as ourselves, but we do feel that we should be permitted to operate this factory and should receive the necessary protection to enable us to do so and sell our goods in this country in competition with foreign manufacturers who operate under entirely different labor and living conditions. Respectfully, RALPH L. FULLEK V Secretary. Hon. O. W. UNDERWOOD, Chairman Committee on Ways and Means, House of Representatives, Washington, D. 0. TANNIC ACID. BRIEF OF MALLINCKRODT CHEMICAL WORKS ET AL., RE- GARDING MEDICINAL AND OTHER FINE CHEMICALS. Hon. OSCAR W. UNDERWOOD, Chairman Committee on Ways and Means, House of Representatives, Washington, D. C. DEAR SIR: Pursuant to your notice of tariff hearings, 1913, dated December 11, 1912, we beg to submit the following: Our business is confined largely to the manufacture of medicinal chemicals. Our products are mostly those prescribed by the United States Pharmacopoeia. Our processes are not secret but generally known, and none of our articles are patented. We represent a dis- tinct branch of the chemical industry which, because of special features, should be considered separately and apart from the indus- tries manufacturing chemicals for technical purposes in very large quantities with the employment of machinery and in which labor is a small part of the cost and in which few expert chemists are required. In our industry, on the other hand, the expense of labor is a consid- erable portion of the cost and we are unable to employ machinery except to a very limited extent. We pay our workmen from $2 to $3 per day. In Germany similar workmen receive from 3 to 5 marks per day, equal to, say, SO. 72 to SI. 20 per day. We are somewhat SCHEDULE A. 47 PARAGRAPH 1 ACIDS. familiar with the conditions that obtain in the German factories in our line and from our own observations are convinced that the aver- age German workman, at the lower wages, is more intelligent, more careful and efficient, and more amenable to discipline than the American workman. We attribute this largely to the training in the German industrial schools and German military system. We beg to submit the following: The paragraphs mentioned below indicate the paragraphs in the present tariff law. PARAGRAPH 1. Tannic acid or tannin. Present rate, 35 cents per pound. Since this rate was enacted, conditions in this country have changed hi the matter of solvents used, etc., and the duty could be reduced. We suggest that the phraseology with respect to this article in para- graph 1 read as follows : 1 ' Tannic acid or tannin, over 70 per cent, 25 cents per pound ; less than 70 per cent, 10 cents per pound. " This new rate would not prohibit imports but probably would cause an increase of imports. Gallic acid. The present rate, 8 cents per pound. Taking the present lowest foreign cost at 30 cents per pound, the rate of 8 cents is equivalent to an ad valorem duty of 26 per cent. The Payne bill reduced the duty 25 per cent, from 10 cents to 8 cents. The present duty of 8 cents per pound is no more than sufficient to offset the differ- ence in cost of manufacture. We suggest that this article be included in the general provision of 25 per cent ad valorem duty. All other acids not specially provided for in this section: Present rate of duty, 25 per cent ad valorem. We think this rate should be maintained so as to enable manufacturers in this country to exist in competition with foreign producers who have all the advantages of cheap labor, cheap scientific help, and cheap crude material to assist them. In connection with this clause we especially desire to mention Pyrogallic acid. The manufacture of this article has only recently been successfully established in this country, after a number of years of experimentation. The effect has already been to reduce prices. A considerable sum has been spent by domestic manufacturers in establishing the manufacture and investment in apparatus and plant. The duty of 25 per cent declared on this article is not sufficient to offset the handicap under which American manufacturers are labor- ing, and should be retained. PARAGRAPH 3. Alkalies, alkaloids, etc. Present duty 25 per cent. This clause covers a multitude of medicinal chemicals produced not only by us but by numerous other small manufacturers. Medici- nal chemicals are mostly made in small quantities, many of them in lots of only a few pounds or ounces. The operations have to be either conducted by or under the immediate supervision of expert experi- enced chemists. We submit that in medicinal chemicals purity is of 48 TARIFF HEARINGS. PARAGRAPH 1 ACIDS. first importance. A small increase in the cost of medicinal chemicals is of no importance to the ultimate consumers, the sick. Medicinal chemicals are dispensed to the public through the pharmacists who charge mainly for their professional knowledge and skill, and whether the ingredients cost 2 or 5 or 10 cents or more, the prices of the pre- scriptions are made 25, 50, 75 cents, or $1. The original cost, there- fore, bears but little relation to the price paid by the ultimate con- sumer. A large amount of capital is invested in this industry and a large number of skilled workmen and chemists are employed. The present duty is, in our opinion, not sufficient to offset the high cost of manufacture in this country, and the importation of medicinal and other pure chemicals has been steadily increasing. Our industry is, therefore, not in a strong position to meet foreign competition, even under present rates. That the rate is in no sense prohibitive is shown by the value of the imports, which in 1911 amounted to $3,338,419 and yielded revenue amounting to $834,494. One of the articles affected by this paragraph is: Caffeine. This product is now imported quite largely into the United States in competition with home m anuf actures, and there should be no change, therefore, in the present rate, provided tea siftings the raw material remain on the free list. With the present rate of 25 per cent on the foreign market price of caffeine equal to about 76 cents per pound American manufacturers can and do compete. If, however, it should be concluded to put a duty on tea siftings, then a corresponding increase of duty should be made on caffeine. We desire to call attention to the error in the caucus print of H. R. 20182, in which appears the average unit value of caffeine as SI. 66 per pound, 1910, and $1.82 per pound, 1911, whereas the correct value is $3.06 per pound, as shown in the letter from the Treasury Department under date of April 24, 1912. PARAGRAPH 14. Chloroform. Present rate of duty, 10 cents per pound. Crude materials for the manufacture of this article are acetone, bleaching powder, and carbon tetrachloride, all of which are dutiable when imported into this country, and all of which the foreign manufacturers obtain without the payment of duty. We believe that this rate of duty should be maintained. PARAGRAPH 15. All other products or preparations of coal tar, not colors or dyes and not medicinal, not specially provided for in this section, present rate of duty. 20 per cent ad valorem. We strongly urge that if a change should be made in this section of the paragraph the words ''and not medicinal" be retained, for the reason that this wording covers a number of intermediate coal-tar products used bv home manufacturers as raw materials in the manu- facture of medicinal products. The omission of this provision is likely to cause confusion, trouble, and expense in the classification of such intermediate products. SCHEDULE A. 49 PARAGRAPH 1 ACIDS. PARAGRAPH 21. Ethers, sulphuric. Present rate, 8 cents per pound. Conditions surrounding the manufacture of this article are now such that we as manufacturers of this article recommend a reduction to 4 cents per pound. PARAGRAPH 27. Iodine resublimed. Present rate of duty, 20 cents per pound. This rate of duty represents only about 7 per cent ad valorem, and we think is as low as it should be. Crude iodine is the crude material for the manufacture of this article, and is at present on the free list. If any duty is established upon crude iodine, then a proportionate increase of duty should be made upon the resublimed article. PARAGRAPH 28. lodqform. Present duty, 75 cents per pound. Crude iodine is the crude material for this article. If crude iodine is allowed to remain upon the free list, where it is at present, then the duty on iodoform, we suggest, can be established at the minimum rate of 50 cents per pound. PARAGRAPH 31. Magnesia, calcined medicinal. Present duty, 7 cents a pound. In 1911, 65,739 pounds were imported into this country, yielding a duty amounting to $4,598. The above imported quantity is probably more than is altogether manufactured in this country. PARAGRAPH 41. Opium. Crude or unmanufactured, and not adulterated, contain- ing 9 per cent and over of morphia, $1.50 per pound; opium of the same composition dried, powdered, or otherwise advanced beyond the condition of crude or unmanufactured, $2 per pound ; morphia or mor- phine, sulphate of, and all alkaloids of opium and salts and esters thereof, $1.50 per ounce; cocaine, ecgonine, and all salts and deriva- tives of the same, $1.50 per ounce; coca leaves, 5 cents per pound. We believe that the present duties on opium and morphine are in proper relative proportion and should remain unchanged. We be- lieve that any considerable further advance of duties would induce extensive smuggling and an evasion of duty, as has been the experi- ence in the past when very excessive rates have been imposed. We believe, too, that the present duties on coca leaves, cocaine alkaloid and salts are sufficiently high and on an equitable basis and should not be changed. If, however, it is concluded, as was proposed in H. R. 20182, to advance the duty on coca leaves 100 per cent, from 5 cents per pound to 10 cents per pound, the advance on cocaine and salts should not be less than 75 cents, making the specific duty $2.25 per ounce. It requires 10 pounds or more, according to the quality of coca leaves, to make 1 ounce of cocaine hydrochloride. Making the same rate of advance on both leaves, alkaloid, and salts would therefore really be reducing the duty on the latter. 78959 VOL 113 4 50 TARIFF HEARINGS. PARAGRAPH 1 ACIDS. PARAGRAPH 62. Hydriodate, iodide, and iodate of potash. Present rate of duty, 25 cents per pound. This is equivalent to less than 10 per cent on the present import costs. Crude iodine is the crude material for the manufacture of this article, which is at present on the free list. If any duty is established upon crude iodine, then a proportionate increase of duty should be made upon the articles in this paragraph. These articles contain over 77 per cent of iodine. PARAGRAPH 65. (No. 1.) Medicinal preparations containing alcohol, or hi the prepa- ration of which alcohol is used, not specially provided for in this sec- tion, 55 cents per pound, but in no case shall the same pay less than 25 per centum ad valorem. Should any change be made in this paragraph, we strongly recom- mend that this section of the paragraph be retained as it now reads. In the manufacture of many articles covered by this section, alcohol, being the chief material, is either decomposed or lost in the process of manufacture, and therefore does not appear in the finished product. Any change in the above wording would therefore be likely to cause confusion and enable the entering of such articles under other classifica- tions with a consequent loss of revenue to the Government. The imports under this paragraph paying the specific rate of 55 cents per pound are apparently on the increase, as shown in the following tabu- lations : From Report No. 326 (p. 272). From Report No. 320 (p. 63). 1890 1890 1900 1905 1910 1911 Pounds 41,312 $7, 274 50,208 $39,583 147,112 $133,994 147,447 $113,534 171,342 $152, B59 157, 713 $138,583 Value (No. 2.) Calomel , corrosive sublimate, and other mercurial medicinal preparations, present rate of duty, 35 per cent ad valorem. At the present time there is a duty on mercury, which is the crude material for the manufacture of these articles, of 7 cents per pound. As these preparations contain about SO to 85 per cent of mercury, the actual tariff afforded is equivalent to only about 20 per cent. We think therefore that this rate of duty should continue. If it is deemed wise to reduce the duty upon the metal mercury, then a propor- tionate reduction could be made in these preparations. Imports of these preparations have been constantly increasing, notwithstanding the above-mentioned duty, s ) that while the imports in the year of 1900 were 16. 047 pounds the imports during the year 1912, in so far as we have been able to ascertain, far exceed the rate of 100,000 pounds per annum. We would suggest that this part of the paragraph be made to read as follows: "Calomel, corrosive sublimate, red precipitate, and all mercurial medicinal preparations, 35 per cent." SCHEDULE A. 51 PARAGBAPH 1 ACIDS. PARAGRAPH 80. Strychnia or strychnine and all salts thereof. Present rate of duty, 15 cents per ounce. The crude material for the preparation of this article is nux vomica, which contains a very small percentage of strychnine (less than an average of 1^ per cent). The process of extraction from nux vomica is a highly scientific and laborious one, involving the cost of much labor and high-cost solvents. We think the present rate of duty should be maintained, which is little enough to have the industry prosper in this country. PARAGRAPH 83. Vanillin. Present rate of duty, 20 cents per ounce. This is a synthetic chemical product for which cloves is the raw material, and until about 15 years ago sold in the United States by European manufacturers at $5 per ounce. It is now selling at 32 to 35 cents per ounce, due to home competition. The rate of duty was 80 cents per ounce until 1909, when it was reduced to 20 cents per ounce, the rate now ruling. The manufacture of this product requires a large investment for the quantity manufactured. Its process of manufacture is very complicated and requires besides competent chemists a number of dutiable chemical products for its manufacture in addition to the raw material cloves. The present rate of 20 cents per ounce is none too high with cloves, the raw material, on the tree list. If cloves should be made dutiable, the rate on vanillin should be proportionally higher. PARAGRAPH 482. (No. 1.) Phosphoric acid, now free and yielding no revenue. There are two grades of phosphoric acid on the market; one the pure acid made from phosphorus and the technical acid made from bones or phosphate rock. The foreign price of pure phosphoric acid from phosphorus is fixed by agreement among European manufac- turers who work together under a combination. In order to en- courage the manufacture of phosphoric acid in this country we think the duty should be made 25 per cent ad valorem. Pure phosphoric acid is produced in a diluted state by burning phosphorus in large chambers constructed of sheet lead, which are very expensive, and owing to the destructive nature of the acid require frequent repairs and have to be entirely replaced within a few years. Large quanti- ties of porcelain and earthenware are required, all of which have to be imported, as none of the kind is made in this country. All of the materials and apparatus required in the manufacture of the pure phosphoric acid now pay a very heavy duty. The process of manu- facture is a difficult and more or less dangerous one, requiring skilled labor and very careful supervision by expert chemists. The wages of laborers and salaries of chemists paid by American manufacturers average at least double those paid by foreign concerns. Under H. li. 20182 a duty of 2 cents per pound, equivalent to 10 per cent ad valorem, was proposed, but this duty is not sufficient to offset the 52 TABTFF HEARINGS. PARAGRAPH 1 ACIDS. increased cost of manufacture in this country. We believe that a duty of 25 per cent ad valorem on pure phosphoric acid, while yielding a revenue to the Government, would encourage the manufacture in this country without materially increasing the cost to the consumer. We therefore suggest the following change in the schedule: "Pure phosphoric acid made from phosphorus, 25 per cent ad valorem; phosphoric acid technical, free." (No. 2.) Phthalic acid, now on the free list. Phthalic acid should be retained in the free list, as more than 60 per cent of the total quantity imported is used in the manufacture of the medicinal product, phenolphthalein. If phthalic acid be put in the dutiable list at the rate of 5 cents per pound, as proposed in H. R. 20182, then phenolphthalein should be specially provided for at the specific rate of 55 cents per pound. Phenolphthalein up to three years ago was manufactured exclusively in Europe and sold in this country at $2.15 to $2.75 per pound in a wholesale way. It is now made by home manufacturers, with the result that the wholesale price is now $1.20 to $1.25 per pound. Germany, France, Italy, Russia, Canada, Japan, and other coun- tries are following the principles of free raw materials and are effecting duties 011 manufactured products more and more. In aU of the above- mentioned countries combinations, agreements, and conventions are legally permitted for the purpose of maintaining prices and effecting other controls of trade situations that under our Sherman antitrust law are not permitted, and therefore manufacturers in the United States are not enabled to effect trade agreements that establish their control of the situation in such a manner that they can afford to ex- port at cost or below cost, so as to compete successfully with foreign manufacturers, by dumping surpluses of their products abroad in competition witli the foreign manufacturers. Unless adequate duties arc maintained by the Government of the United States, enabling manufacturers in this country to sustain themselves, foreign manu- facturers certainly will flood the market of the United States with goods at prices which will ultimately eliminate the manufacture of many products in the United States. "A dumping clause" might advantageously be introduced in the tariff law of the United States similar to that effected by the Canadian Government, which might restrain the foreign manufacturers from dumping goods into the United States at or below cost with the object of driving manufac- turers of the United States out of business and then controlling the situation themselves. Respectfully submitted. Mallinckrodt Chemical Works, Edw. Mallinckrodt, presi- dent; Schaefer Alkaloid Works, O. Schaefer, presi- dent; Powers-Wcightman-Rosengarten Co., A. G. Rosengarten, treasurer; Monsanto Chemical Works, Jno. F. Queeny, president; Charles Pfizer & Co. (Inc.), John Anderson, treasurer; New York Quinine & Chemical Works (Ltd.). Donald McKenon; Stand- ard Essence Co., E. W. Preston, secretary and treasurer. JANUARY 6, 1913. SCHEDULE A. 58 PABAQRAPH 1 ACIDS. BRIEF OF THE GEIGY-TER MEER CO., NEW YORK, N. Y. NEW YORK, January 4, 1918. Hon. OSCAR W. UNDERWOOD, Chairman of the Ways and Means Committee, United States Congress, Washington, D. C. DEAR SIR : We beg herewith to respectfully call your attention to the subject of tannic acid and nutgall extracts, with a view of having these two products properly classified in any new tariff bill which may be drawn for consideration of the new Congress soon to meet. We have carefully read the statement of Messrs. Zinsser & Co., dated March 22, 1912, and addressed to the Hon. Boies Penrose, chairman Finance Committee of the United States Senate, but would point out that the argument of these gentlemen seems one-sided and refers only to tannic acid and nutgall extracts prepared by means of alcohol and of ether. Our factory in Basel, Switzerland, the aniline color and extract works, formerly John R. Geigy, are large manufacturers of both products, but in their process neither alcohol nor ether are used as solvents, only water, and we consider that products produced by these means should be specifically provided for, in distinction to tannic acid and nutgaU extracts manufactured by means of alcohol and of ether and at a lower rate of duty than such. The existing tariff places a prohibitive duty on tannic acid of 35 cents per pound, in consequence of which the American manufacturers of this article have for years had a clear field for their product. A competition with the foreign article was impossible owing to the aforesaid pro- hibitive duty. We beg, therefore, to indorse fully the rate of duty of 4 cents per pound on tannic acid (par. 1, H. R. 20182) and of 10 per cent ad valorem on nutgall extracts (par. 31 same bill), as proposed, provided the same are produced without the use of either alcohol or ether as solvents. For products made with alcohol and of ether a somewhat higher duty would be justified. To the best of our knowledge and belief the American manufac- turers are making only alcohol or ether tannic acids and nutgall extracts, and we therefore claim that the textile manufacturers of this country should now be given an opportunity of buying and using water tannins and nutgall extracts by the aid of a lower tariff. Regarding nutgall extracts, we differ materially from Messrs. Zinsser & Co. in their statement that these extracts are simply solu- tions of tannic acid. As regards our nutgall extracts, we would positively state that they are not such solutions, but are aqueous extracts from China nutgalls. Thus a duty of 25 per cent as Messrs. Zinsser & Co. propose is unwarranted, except to act as a stop to the further importation of these extracts which are so necessary to all the silk manufacturers of America. We trust that the proposed duty on tannic acid of 4 cents per pound, and on nutgall extract 10 per cent ad valorem, and as already passed by the retiring Congress, may not be altered, at least not for products manufactured by the water process. 54 TARIFF HEARINGS. PARAGRAPH 1 ACIDS. We should very much appreciate it if you would kindly place our communication before the proper committee for hearing to be held, we understand, on the 6th instant. Very respectfully, GEIGY-TER MEER Co. ROBERT J. KELLER. ALFRED KUBLER, Vice President. STATEMENT OF F. BEEDT & CO., NEW YOEK, N. Y. NEW YORK, January 6, 1913. Hon. OSCAR W. UNDERWOOD, CJiairman Ways and Means Committee, House of Representatives. SIR: We, the undersigned chemical manufacturers and engaged in the manufacture of tannic acid and its derivatives, respectfully request your kind consideration of the following paragraphs : Paragraph 1, tannic acid or tannin, duty 35 cents per pound. In view of the changes, conditions, and prices of solvents used in the manufacture of this product we consider that a fair and just rate of duty would be 15 cents per pound. Paragraphs 20 and 22, gall extract, duty one-fourth cent per pound and 10 per cent ad valorem. Gall extract is really tannic acid in solution, in which tannic acid is the ingredient of chief or sole value; in fact, gall extract for many purposes can and is used in place of tannic acid. We further beg to call your attention to the fact that gall extract can be converted into tannic acid by drying, and we consider that a fair and just rate of duty for this product gall extract would be 25 per cent ad valorem. We have manufactured tannic acid and gall extract for about 30 years in New York, and have invested a considerable amount in build- ingS) machinery, equipment, etc., for the special production of tannic acid and gall extract. We have given the matter under pres- ent conditions careful and thorough study and respectfully submit the following rates of duty for these products, which we consider fair and just: Paragraph 1, tannic acid, or tannin, 15 cents per pound. Paragraphs 20 and 22, gall extract, 25 per cent ad valorem. Kespectfully, F. BREDT & Co. OXALIC ACID. STATEMENT OF LEWIS EMERY, JR., ON BEHALF OF THE AMERICAN ALKALI & ACID CO., BRADFORD, PA. Mr. EMERY. Mr. Chairman and gentlemen of the committee, the question that is before the committee will be prefaced by some explanation as to what kali or muriate of potasn is and how it is obtained in Germany, the only country in which it is produced. I have visited the mines and wells from which this product is taken. There are two ways of obtaining it. One is by drilling a well or a SCHEDULE A. 56 PARAGRAPH 1 ACIDS. hole into the ground to a depth of some 1,600 to 2,000 feet, and by the introduction of water, hot or cold, or by steam the kali or muriate of potash is dissolved and is pumped out. The more modern and cheaper way, however, of obtaining it is by sinking large shafts, 'ihe shaft that I saw being sunk at the time I visited the field was 16 feet in diameter, and at that time it was down 1,600 feet, and they sunk it to a depth of 2,200 feet, and there they struck this great deposit of kali or potash. It is taken from the ground the same as you take out coal or almost any other mineral, if you may call it such. Therefore, the German Government has a complete monopoly on the raw product. The American Alkali & Acid Co., as you will see from the circular, is the first and only factory in this country. Now, if the chairman will permit, I will read. The American Alkali & Acid Co., of Bradford, Pa., respectfully sub- mits the following facts to show that the duty of 2 cents per pound on oxalic acid be retained, and that the duty of 25 per cent ad valorem on salts of oxalic acid be also retained, the said salts of oxalic acid being calcium oxalate, potassium oxalate, ammonium oxalate, and all other oxalic-acid salts not mentioned. Before presenting our facts we desire to call your attention to the following: We are up against two foreign trusts, both of which are strongly supported and protected by the German Government the German Potash Trust, which controls the supply of our most-needed raw material, caustic potash, and, secondly, the German Oxalic Acid Syndicate. These two trusts go hand in hand, and the reason, as* I say, the German Government controls this product is because it has retained an interest in the products of the soil of Germany in regard to every- thing, as I understand. It is a wise Government, and therefore they have a direct interest in this product, and they permit syndicated power throughout the entire German Empire. The base product used in the manufacture of oxalic acid is caustic potash, which is a product of kali, or muriate of potash. Below we give the reasons why the tariff should not be changed. 1. In the year 1911 the German Government, against the ex- tended protest of the United States Government, placed an export duty of $0.0119 per pound on muriate of potash or raw material. 2. The Underwood committee in 1912 placed a United States im- port duty of $0.006 per pound on the raw material (caustic potash), product of muriate of potash. (The two items mentioned above have raised the price of the raw material $0.0179 per pound, which is a very severe blow to the manufacture of oxalic acid, because we can not obtain the raw mate- rial in any other country in the world except Germany.) 3. The Underwood committee of 1911 also reduced the duty on oxalic acid from 2 to \\ cents, which, from the above, would seem eminently unfair, as our business is hit by the action of both Ger- many and the United States. 4. We are the first and only manufacturers of oxalic acid in the United States. 5. The difference in labor cost is in favor of the foreign manufac- turers, our product representing 60 per cent of its cost in labor. 56. TABLFF HEARINGS. PARAGRAPH 1 ACIDS. 6. The German Government trust or potash syndicate control the base raw material, potash. 7. The oxalic-acid syndicate or trust in Germany control the pro- duction and sales of oxalic acid, as Germany produces seven-tenths of all the oxalic acid consumed. 8. The industry is young and needs the Government's assistance for a time. 9. During the years 1903-1907, the German syndicate succeeded in driving the American Acid & Alkali Co. to the wall, and their property was sold at sheriff's sale on June 2, 1908. In 1909 the duty of 2 cents per pound was granted, and we have revived the business, and at the present tune oxalic acid is not so expensive to the Ameri- can manufacturer as it was for a number of years previous to this time, even with the duty upon it. (See reference for prices in 1903- 1907 hi statistical list.) 10. Germany protects her oxalic-acid manufacturers with an import duty on oxalic acid. The manufacture of oxalic acid and its by-products is a new Ameri- can industry, the first and only American factory being located at Bradford, Pa. The American Alkali & Acid Co., of Bradford, Pa., incorporated under the laws of the State of Pennsylvania, was organized for the purpose of manufacturing oxalic acid, and 19 large buildings, covering 10 acres of land, were built and equipped to this end, at the cost of $500,000. That does not cover the entire money which we have spent; the total amount has been several hundred thousand more, because we have been up against the real thine;. We would call your attention to the four important differences in the cost of manufacture and sale of oxalic acid in the United States compared to those existing in Germany and other foreign countries, where are located the principal manufacturers of this article. It is a well-known fact that common labor in the United States is paid about 100 per cent more than is paid for the same class of labor in Germany. We pay an average wage per hour in our oxalic-acid plant of 20 cents, and the German wage for the same class of work is 8 cents and 9 cents per hour. For factory superintendents, chemists, engineers, and other positions of responsibility there is an even greater difference in the scale of wages paid. In the manufacture of oxalic acid the cost of raw material used is now practically constant, but we would call your attention to the fact that the price of our raw materials has increased 40 per cent within the last four years. The labor cost in the manufacture of oxalic acid is the larger part of the total cost, and the cost of raw materials being constant, any reduc- tion in the manufacturing cost must necessarily be borne by the labor item. As is well known, there are no commercial deposits of potash salts in the United States. Potash is necessary for the manufacture of oxalic acid, and the Germans control, through the German Govern- ment and the potash sjmdicate, all the raw material for the world's supply of potash in its various forms. It is also a well-known fact that the German Government aids the Kali Syndicate, or German Potash Trust, in almost any manner they may desire. According SCHEDULE A. 57 PARAGRAPH 1 ACIDS. to the Imperial German law and regulations regarding the sale of kali or potash (par. 24) the Government forbids the sale of kali cheaper abroad than for the German interior. (Imperial German law and regulation regarding the sale of kali, par. 24.) "The prices for sell- ing and delivering kali abroad must not be lower than those given for the German interior." This restriction guarantees to the German consumer of potash in any form from the potash syndicate at a maximum, or highest price, which can not be more than the minimum, or lowest, price abroad, and this guaranty is upheld by the German Government. In other words, that the minimum price paid by the Americans is the maximum price paid by the Germans. It can be as much lower as they see fit to sell it at. Therefore, there is an agreement that the price in this country shall be fixed at a stipulated sum, but they can make it as much lower to the German manufacturers of oxalic acid as they see fit. The oxalic-acid manufacturers of Germany, Russia, England, Belgium, Norway, and Austria have formed a syndicate, headed and controlled bv the German manufacturers, to hold at a high level the price of oxalic acid in their respective countries, and to deliver the surplus to the United States. Prior to the control of the oxalic-acid trade by the German manufacturers, through the syndicate, all for- eign producers sold their product in the United States on a compet- itive basis, and the consumer in the United States bought his oxalic acid at a very low figure because of the keen competition among the European manufacturers. By maintaining a high price abroad for a major part of their product, the foreign manufacturers were able to sell then- surplus production in the United States at the best price they could obtain in the open market. The use of oxalic acid in the United States has increased nearly 70 per cent in the past eight years and the price has remained practically constant for the last six years. In fact, it has increased since its introduction in 1884, the first statistics we had of it, over several hundred per cent. This, we believe, was due to our presence as manufacturers in the oxalic-acid market in the United States. We have been a check on the advancing trust price, as is shown by the following incident: In 1906 the price of acid w T as 7 cents per pound, New York. In the early part of 1907 our plant in Bradford was shut down to overcome some difficulties in our process. Remember that we knew nothing about this business, and we could not get the necessary expert labor from Germany or from any other country to teach us how, and our process was rather crude at first, and we were shut down for nearly a year. Simultaneously the price of oxalic acid jumped to 9 cents f. o. b. New York, and that price was maintained until we started operations again; then the price of oxalic acid dropped again to 7 cents. We believe that with all competition removed by reduction in the tariff the German syndicate would immediately raise the price in the United States to a figure as high, or higher, than that main- tained during the time of our shutdown. The 2-cent duty on oxalic acid is no burden to the ultimate consumer. This is proven by the fact that the price of oxalic acid for the four years since the duty has been effective has not been as high as for the two years preceding the 58 TARIFF HEARINGS. PARAGBAPH 1 ACIDS. imposing of the tariff. We give below the table showing the prices of oxalic acid in the years shown in the table. Government statistics on oxalic acid. Quantity. Value. Price. 1884... Pounds. 1,371,842 $145,392.00 $0.11 1886 1,371,030 137,137.00 .10 1886 1,488,539 106, 608. & .07 1887 1,865,878 129,149 00 .07 1888 1,387,527 100,831.00 .07 1889 1,851,682 142,757.00 .08 1890 1,973,050 139,676.00 .07 1891.. . 2,743,222 200, 595. 00 .07 1892 2,209,940 150, 529. 75 .07 1893 .... 2, 464, 443 143,194 00 .06 1894 2,783,876 159,026.00 .06 1895 2,889,513 189,506 00 .066 1895 3, 164, 964 219, 630. 00 .07 1897 3,602,124 246, 200. 00 .07 189.S 3, (47,041 242, 276. 00 .075 1899 3,981,788 246,027.94 .06 1900 4, 900, 123 275, 747. 00 .055 1901 .. 5,622,908.60 300, 879. 00 .054 1902 5,678,139 301,675-00 .053 1903 . .. ... 5,363,646 257,289.00 .048 1904 6, 726, 159 329,836.00 .049 1905 .- 7,906,886 360,951.00 .046 1906 : 7,129,105 334,855.00 .047 1907 7,296,246 376,860.00 .052 1 90S 8,853,539 524,836.00 .06 1909 9,797,901 '621,387.00 .063 1910 r 1,002, 626 61,271.00 .061 i Duty on Aug. 6, 1909, $96,<>51.06. Sales price to consumer during years 1904-1912. Cents. 1904 1905 190G 1907 9 and 74 1908... . 7 and Cents. 5 and 5^ 1909 7} and 7$ 5 and 5i 1910 7 and 1\ 5iand7i j 1911 7 and 7^ 1912 7 and 7} In addition to the foregoing reasons why the duty of 2 cents a pound be retained on oxalic acid and be placed on the salts of oxalic acid, we would respectfully call your attention to the fact that the German Government imposed a duty of approximately 1 cent per pound on any oxalic acid imported into Germany. It was on account of fear, due to that condition of things, that they immediatelv pro- tected their manufacturers. Russia has also placed a tariff of 3 cents per pound on oxalic acid, and Austria and Belgium have fol- lowed on the same line. They are very jealous of their manufac- turers, and each one has attempted to take care of their manufac- turers in the respective countries. This fact, together with the natural advantages of cheap raw materials, cheap transportation, cheap labor, and unlimited supply of potash, gives the German manufacturers the power with which the} 7 can- completely destroy all competition unless the present duty is retained. We trust we have made clear the necessity for duty on oxalic acid and its salts, and ask that you recommend to the Congress of the SCHEDULE A. 59 PARAGRAPH 1 ACIDS. United States that the present tariff of 2 cents per pound on oxalic acid be retained and that a 25 per cent ad valorem duty be retained on the salts of oxalic acid. I might say, Mr. Chairman and gentlemen, that quite a number of people started out in the manufacture of this oxalic acid, but, as we say in common parlance, "they got cold feet" because of the enormous amount of money we had expended. They let it go because of this competition to which I have referred, and on June 2, 1908, the plant was sold at sheriff sale for its debts. A copy of the deed is hereto appended. On that point I would like to call your attention for a moment to the reason we were obliged to shut down. We commenced the construction of that factory in 1903, and immediately upon our doing so the German manufacturers reduced their prices from 6 cents in 1901 to 4-^ in 1903; 4-j%- cents in 1904; 4^ cents in 1905, and to 5^ cents in 1906. Then we came into the market. We feared that they would attempt to break our back again, as our backs were broken financially in our first attempt, and we then asked the United States Congress to protect us, and they did by levying an import duty of 2 cents a pound, which went into effect August 6, 1909. Now, we would like to have the 2-cent duty remain. Why? Because, as you will note from the said figures indicating the Gov- ernment statistics of the United States, the prices at which the goods were billed from Germany, England, and Norway to their respective representatives in the United States for resale were, from 1884 to 1903, maintained at a high price. We are also appending hereto a schedule of the average sale price to the consumer from 1904 to 1912, inclusive. The American Alkali & Acid Co., in whose behalf I ask the main- tenance of a 2-cent duty on oxalic acid, commenced the construc- tion of their plant during the year 1903. The plant was not con- structed along proper lines and was rebuilt three separate times, and did not commence the manufacture of oxalic acid until the fall of 1907. You will note that the prevailing price in 1904 and 1905 during the early construction of our plant was from 5 to 5J cents. This was due to the fact that we had produced a small quantity of goods and put them on the market during that period. However, during 1906 we shut the plant down completely, and you will note that in that year the German manufacturers combined with the English and Norwegians to form the Oxalic Syndicate, raised the price to 1\ cents, and from that in 1907 to 9 cents, which price pre- vailed until t'he fall of the year, when we again started operations in our plant. The financial strain was so heavy in the year 1907 and 1908 that on June 2, 1908, the plant was sold at sheriff sale, as above stated. I purchased same and became the sole owner of this company, which was reorganized under the name of the .American Alkali & Acid Co. In 1908 we became a factor in the oxalic business in the United States, and the German Oxalic Syndicate immediately reduced the price to 6 cents, which price was maintained until August 6, 1909, at which time the tariff of 2 cents went into effect on the commodity. 60 TARIFF HEARINGS. PARAGRAPH 1 ACIDS. The price was then raised to 7 and 7 cents, which price has been prevalent during the following years, 1910, 1911, and 1912, and you will note by the schedule incorporated in this paper that the German syndicate raised the price as soon as we were incapacitated, but im- mediately upon our return to the market the prices were lowered with the evident intention of driving us out of the business. Let us now ask how oxalic acid is made from kali. I expected to have a sample of oxalic acid and kali here, but the express companies, I suppose, have failed to deliver it. So that you may thoroughly understand it, I will say that kali is distilled from what is called "caustic potash." Caustic potash is the basis. The next product that is put into the caustic potash is sawdust. That is fed into the kettles, where it is digested, and then it is taken from there. Then we use lime; after that we use sulphuric acid. We use 15,000 pounds of lime a day, and we use about 10,000 pounds of sawdust a day, and for every pound of oxalic acid that we produce we use 1.17 pounds of sulphuric acid. If you will notice upon that picture there, we have done everything that we could to cheapen our products. We built a large sulphuric-acid plant, that we might get it down to the manu- facturer's cost; and we have gone so far as to buy tracts of timber, that we might be sure of having a source of supply for our sawdust in the future. The question of lime is a serious one. Now, the enormous amount of lime that we use, the enormous amount of sawdust that we use, and the enormous amount of sul- phuric acid that we use, give employment to hundreds of men, although the number employed directly in the factory is only about 70 to 80 men. You have only to turn to the statistics of the United States Govern- ment as to the prices of these goods to show what the situation was in 1903, 1904, and 1905. It was only done to drive the American out of business; that is all. Who uses this product ? The American print works use a million pounds a year. The shirt and collar you wear upon your person are washed partially with it, and 2,500,000 pounds of it are used by the laundry people. Then, again, the tanning industry are large users of oxalic acid. This product enters largely into the chestnut extracts of the South for clarification purposes and for other purposes too numerous to mention. Lot me say to this committee that there is no company. I am the company; and I have withstood the storm and battle for years, and I am going to withstand it longer if possible. Since I have been at the head of the American Alkali & Acid Co. wo have had in our emplov continually one or two research chem- ists; and the reason that those goods nave gained to the enormous percentage of 70 per cent in the last six or seven years is because we have found now uses for this product, and it is but in its infancy at the present time. Why should the American Alkali & Acid Co. not have protection? In 1911 there were 7,538,000 pounds brought into this country, and we manufactured about 2, 000, 000 pounds additional, making 9,000,000 pounds and upward. The United States Government received from the duty on the importation of oxalic acid $141,177.98. SCHEDULE A. 61 PABAGRAPH 3 OELS. We are working with a process at the present time to materially reduce the price of oxalic acid ? and if the United States Congress will allow this duty to remain as it is for the present we will be able to cheapen the commodity to the consumer ii the process on which we are working fully materializes. In addition to all the foregoing we are manufacturers of 22 per cent dark commercial lactic acid. There are three manufacturers of lactic acid in the United States at the present time. Originally the duty on this commodity was 4 cents, then reduced to 3 cents, and is now 1J cents. We are perfectly willing that the duty should be taken off if you see fit, as we have perfected our process to such a degree that wo are to-day selling these goods to the consumer at 2 cents per pound, package included, f. o. b. our works, and this to the amount of 2,000,000 pounds per year, with the prospects of a large increase in consumption during the ensuing year. The CHAIRMAN. Mr. Emery, I do not like to limit you, but you have already had 20 minutes. Mr. EMERY. I am ready for any questions. The CHAIRMAN. Does any gentleman desire to ask Mr. Emery any questions. [After a pause.] That is all. PARAGRAPH 2. Alcoholic compounds, including all articles consisting of vegetable, animal, or mineral objects immersed or placed in, or saturated with, alcohol, not specially provided for in this section, sixty cents per pound and twenty- five per centum ad valorem. PARAGRAPH 3. Alkalies, alkaloids, distilled oils, essential oils, expressed oils, rendered oils, and all combinations of the foregoing, and all chemical compounds, mixtures and salts, and all greases, not specially provided for in this section, twenty-five per centum ad valorem; chemical compounds, mixtures and salts containing alcohol or in the preparation of which alcohol is used, and not specially provided for in this section, fifty-five cents per pound, but in no case shall any of the foregoing pay less than twenty-five per centum ad valorem. For sodium cyanide, see also Roessler & Hasslacher Chemical Co., page 372; for sodium sulphide, see also W. H. Nichols, jr., page 36; for formaldehyde, see also Dr. S. Lewis Summers, page 14; for perilla oil, see also S. L. Jones & Co., page 259; for sulphide of soda, see also General Chemical Co., page 40; for aqua ammonia, see also Michigan Ammonia Works, page 98. OILS. BRIEF SUBMITTED BY SPENCER KELLOGG & SONS. BUFFALO, N. Y., January 4, 1913. Mr. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: We respectfully request that the following communica- tion be made a part of the hearings by your committee of the pro- posed changes in the chemical schedule and the free list of the present tariff law : During the past two years we have been investigating the crushing in the United States of various oil seeds, nuts, and beans grown in foreign countries, with the idea of competing with Europe and the 62- TARIFF HEARINGS. PARAGRAPH 3 OILS. United Kingdom, each of which is now extensively engaged in this branch of manufacture and is exporting the oil to this country in great quantities. In our investigations we have discovered that, although none of the raw materials, with the exception of peanuts, is grown in the United States, there is under the present tariff law either a sufficiently heavy duty imposed upon these raw materials and a proportionately low oluty on the resultant oil, as to render economic manufacture in the United States a practical impossibility, due to the necessity of importing a dutiable raw material and manufacturing a duty-free product in competition with Europe where the raw material is imported duty free. Or there is no duty on either raw material or oil, which makes it impossible to compete with Europe owing to their cheap freight rates on raw materials, their cheap labor, and their ready market for the by-products (oil cake) almost none of which can be marketed in this country. This condition results in American consumers being forced to buy foreign oils through importers and brokers on foreign terms, paying higher prices than necessary and having little recourse in the case of inferior quality. We believe that the oils enumerated below can be manufactured in this country with the same success that they are now manufactured in foreign countries, and that the result will be the starting in the United States of industries hitherto untried with the further result of better and cheaper oil to the consumer. Let us repeat that none of those oil seeds or nuts is grown in this country, with the exception of peanuts, which article is treated separately in the detailed explanation below. Therefore there can l)e no injustice done the American farmer by lowering the duty on the materials enumerated below and allowing their crushing in this country. Some of the materials, the crushing of which we have investigated, are not specifically provided for in tho tariff act, thus bringing them under the n. s. p. f. clause for oil seeds or 25 cents per bushel of 56 pounds. As this branch of manufacture has boon neglected in this country up to this time, we fool that this chomical schedule of the Payne- Aldrich Tariff Act has become obsolete and that it should be changed in order to allow manufacturers to build up now oil industries in this country similar to those abroad. Thore has been during the last 10 years a tremendous growth in tho oil sood crushing industry in Mar- seilles, Rotterdam, nnd tho other centers of Europe, most of which growth has boon occasioned by the inoroasod demand for oil in the Unitod States. It is our hope that if tho schedule is changed the United States may bo enabled to retain this large business and thereby improve tho condition of both the manufacturer and the consumer. We have given this matter much study and we respectfully submit to your committee 1 the request that, the following be the rates of duty on tho following materials. Wo have given in this schedule a de- tailed description of each seed, its resultant oil with the present and suggested duty: a record of the imports into the United States from September 1, 1911, to September 1, 1912, of each oil and following this date a condensed paragraph giving materials and the suggested duties. SCHEDULE A. 63 PARAGRAPH 3 OILS. Shea nuts, present duty n. s. p. f . ; suggested duty, free. Shea-nut oil, present duty n. s. p. f . ; suggested duty, 2 cents per pound. This nut is a native of India and is not grown in the United States. It is inedible. The oil when refined is used for edible purposes and when raw for soap-making purposes. This oil was classed under "all other oils" in the import record. Soya bean, present duty n. s. p. f. ; suggested duty, free. Soya-bean oil, present duty free; suggested duty, 2 cents per pound. A native of Manchuria. Inedible. Not grown in the United States. Oil used for paint purposes and for soap making. Imports during 1912, 26,230,061 pounds. Mowra seed, present duty n. s. p. f.; suggested duty, free. Mowra oil, present duty n. s. p. f.; suggested duty, 2 cents per pound. This seed is a native of India. Inedible. Not grown in the United States. Resembles the peanut. Oil used for soap, and, when refined, for edible fats. No imports during 1912. Niger seed, present duty n. s. p. f.; suggested duty, free. Niger oil, present duty 25 per cent; suggested duty, 2 cents per pound. Native of India. Not grown in the United States. Inedible. Oil used for soap and, when refined, for edible purposes. Classed under " all other oils" in imports. Sesame seed, present duty, 25 cents per bushel; suggested duty, free. Sesame oil, present duty, free; suggested duty, 2 cents per pound. Native of India. Not grown in the United States. Oil used for soap and edible purposes. Imports during 1912. Classed under " all other oils." Palm kernels, present duty, free; suggested duty, free. Palm-kernel oil, present duty, free; suggested duty, 2 cents per pound. Native of Africa and South America. Not grown in the United States. Inedible. Oil used for soap, and, when refined, used for edible purposes. Oil imports during 1912, 29,323,889 pounds. Peanuts, present duty (shelled), 1 cent per pound; suggested duty, free. Ground nuts, present duty (unshelled), \ cent per pound; suggested duty, free. Peanut oil, present duty, free; suggested duty, 2 cents per pound. Native of Africa. Oil used for edible purposes. Imports during 1912, 6,878,237 pounds. Peanuts are grown in some of the Southern States, but are almost entirely exported to France or used here for roasting or eating. These are of a superior quality to the African nuts and are hi con- sequence used for edible purposes and command a premium and are not crushed. The African 'peanuts, on the other hand, are used entirely for crushing purposes and do not, therefore, compete with the American peanuts. The American nut is grown in quantities insufficient even to supply the demand for a roasting peanut. We 64 TARIFF HEARINGS. PARAGRAPH 3 OILS. will suggest that the words "for crushing purposes only" be inserted in the new schedule as applying to peanuts. Candlenut, present duty, tree; suggested duty, free. Candlenut oil, present duty, n. s. p. f.; suggested duty, 2 cents per pound. Not grown in the United States. Used for burning and soap purposes. SUMMARY. Free list. Shea nuts, soya beans, mowra seeds, niger seeds, sesame seed, palm kernels, ground nuts or peanuts for crushing purposes only, candlenuts. Duty 2 cents per pound. Shea-nut oil, soya-bean oil, inowra oil, niger oil, sesame oil, palm-kernel oil, peanut or ground-nut oil, candlenut oil. In conclusion, may we express the hope that our requests will be granted and the chemical schedule changed according to our sugges- tions. Should this be done, we are sure that great benefit will result to both the American manufacturer and the American consumer. Very respectfully, yours, SPENCER KELLOGG & SONS (!NC.). GEORGE H. SICARD. BUFFALO, N. Y., January 10, 1913. Hon. OSCAR W. UNDERWOOD, Chairman, Ways and Means Committee, Washington, D. C. SIR: We wish to respectfully call your attention to the inclosed letters which we have sent to the Chairman of the Committee on Ways and Means, of which we understand you are a member. We desire to point out the good results that would accrue to consumers of oils as well as to the manufacturers, should our ideas of duties be followed. Of course, the removal of the duty on the raw materials (shea nuts, soya beans, mowra, niger, sesame, palm kernels, peanuts, and candlenuts) would encourage the starting in this country of crushing industries in competition with this branch of manufacture in Europe. This would result in groat benefit to the consumer for the following reasons : (1) It would enable him to buy oil direct from the manufacturer and not through brokers, as is now done, thus saving him the broker's commission. (2) He would also be saved the loss that almost invariably results through leakage when oil is imported, which leakage can not be and is not covered by any exporter under 1 per cent. (3) The consumer would also have direct recourse in case of inferior quality of the oil. to a reputable American manufacturer, governed by the same laws as the consumer, and anxious to please, knowing that his trade depends entirely on his reputation here in this country. But, in case the manufacturer should not show any disposition to adjust the claims of the consumer, the latter could refuse to pay the bill, and would thereby have a lever with which to force the manufacturer to come to terms, and in case this should fail, recourse could be had to the law, which treats manufacturer and consumer alike. SCHEDULE A. 65 PARAGRAPH 3 OILS. As the matter now stands, in case of inferior quality, the consumer can only file his claims with the broker, who forwards them to the manufacturer. In case this gentleman does not desire to settle, the matter must be referred to arbitration, which arbitration is never held in the United States, but is usually held in the country and city of the manufacturer. In case the arbitration proves unsatisfactory to the American consumer, as is usually the case, bis only recourse is the law, as he has none of the manufacturer's money in his posses- sion, due to the universal custom of paying sight drafts before the documents can be obtained and the cargo unloaded. Of course, any such lawsuit would be tried in the manufacturer's country and under its laws, and would, in all probability, result unsatisfactorily to the consumer. (4) It would enable him to get away from the purchase of oils on foreign terms and contracts, dictated by the manufacturers, which terms are highly unfavorable to consumers in this country. We have further asked for a duty on the corresponding oils (shea, soy bean, mowra, niger, sesame, palm kernel, peanut, candlenut) for the following reasons: Aside from the oil produced from these seeds, there is a residue or oil cake, which is used for cattle feeding. This material finds a ready market in Europe, but due to the large supply of fodder in this country, there is very little demand here. It is, therefore, necessary to export all of this oil cake and pay the freight to Europe in order to compete with the European oil cake. The freight rates to Europe on oil and oil cake are about on a parity. But, as there are about 40 poun.ds of cake to 15 pounds of oil in a bushel of seed, the freight on the oil cake to Europe will be correspondingly higher per bushel or gallon than the freight on oil from Europe, and, therefore, the American manufac- turer is working under this disadvantage and also under the disad- vantage of the difference between raw material freight to Europe and America. Oil mih 1 labor is also cheaper in Europe than in the United States. We, therefore, feel that a 2 cents per pound duty on oil would be just in order to encourage competition with Europe for the oil business of the United States. And we further feel that, if our suggestion of duties is followed, at least four or five oil-seed crushers in this country will begin experimenting with the seeds enumerated above, and that there will be keen competition among these firms for the oil business of this country this resulting in the general lowering of prices. Before closing, we would further call your attention to the inclosed letter on linseed oil and seed. (See under par. 35, p. 259.) This question is, of course, familiar to you, but we would like to impress the fact that when both raw material and finished product are duti- able, if there is to be any reduction of duty made, it should be made to each correspondingly. We would further reiterate our statement that there is no linseed oil trust, and that on the contrary the business is now conducted on such a competitive basis that the profits have been reduced to a minimum and money has been lost by the company erroneously termed, "The trust." 78959 VOL 113 5 66 TARIFF HEARINGS. PARAGRAPH 3 OILS. We hope that you will support our suggestions in the meetings of the committee. Very respectfully, yours, SPENCER KELLOGG & SONS (INC.). GEO. H. SICARD. BRIEF SUBMITTED BY PARK & TILFORD, ALFRED H. SMITH CO., GEORGE BORGFELDT & CO., AND FRANK M. BRINDLE. JANUARY 6, 1913. The CHAIRMAN WAYS AND MEANS COMMITTEE, Washington, D. C. DEAR SIR: As importers of perfumery, toilet preparations, and other articles under Schedule A, we respectfully submit the following for consideration when drawing up the new tariff. (Reference is made in most instances to H. R. 20182; when reference is made to the tariff act of 1909, this is specifically stated.) Tariff act 1909, paragraph 3. With reference to the phrase "in the manufacture or preparation of which alcohol is used, this sentence should be omitted, because in some instances the same article is manufactured in different ways, and there seems no obvious reason why the duty should be assessed differently because in the manufac- ture of it alcohol was used, although alcohol is not contained in the product. Tariff act 1909, paragraph 7 (H. R. 20182, p. 12). Should be amended to read "blacking of all kinds, or all creams and prepara- tions for cleaning or polishing boots and shoes or metals 20 per cent ad valorem, whether in printed tin containers or otherwise." The addition of the words "or metals" is for the purpose of over- coming the inconsistent rulings of the appraising officers and courts in holding powders and pastes for polishing metals to be dutiable under paragraph 95 of the Payne bill as "articles of wares composed wholly or in chief value of earthy or mineral substances whether sus- ceptible of decoration or not." The addition of the words "whether in printed tin containers or otherwise" is to the amendment of paragraph 195 of the Payne bill. Tariff act 1909, paragraph 17 (H. R. 20182, p. 26). This paragraph should be amended by striking from the revised schedule the words "but not less than 40 cents per pound" of line 19, page 7. The tax per pound of celluloid is a variable one in its incidents for the reason that the weight of the celluloid used never runs uniform; the celluloid plates from which articles are made will not be of uniform but of varying weight, with corresponding variation consequently in duties assessed. Also, the specific rate is not a rational one, owing to great difficulty, if not practical impossibility, of arriving at the weight when celluloid is used in connection with other materials. Thirty-five per cent duty ad valorem should be a sufficiently high duty, but if this is not agreed to, then it would be preferable to offset the weight limit by a corresponding increase in the ad valorem duty, so as to avoid a compound rate. SCHEDULE A. 67 PARAGRAPH 3 OILS. Tariff act 1909, paragraphs 32 to 88, inclusive (H. R. 20182, p. 50, lines 14, 15, 16 of p. 13). Olive oil should be provided for at a rate per gallon instead of 20 per cent ad valorem, say about 10 to 20 cents per gallon. If a specific duty is placed on oil it will conduce to the importation of the best grades of oil and will to a great extent shut out the many deleterious oils now being imported for consumption. Also it will save endless amount of litigation as to the value of the oil. The specific rate per gallon should apply on all olive oil, irrespective of the capacity of the containers. Tariff act 1909, paragraph 67 (H. R. 20182, p. 53). This para- graph should be amended by omitting the phrase "and other toilet articles" in line 10 of page 15. This is too general an application, as combs, brushes, soaps, etc., while specifically provided for under other provisions of the tariff, are also covered by this phrase. Specific designation should be sought as far as possible and misleading generalities omitted. We recommend that hi paragraph 53, line 7, reading "if containing alcohol, 60 cents per pound and 50 cents per ad valorem," be changed to "50 per cent ad valorem," without a specific weight duty; "if not containing alcohol, 50 per cent ad valorem" instead of 60 per cent. At the time the 60 cents per pound was assessed in the 1909 tariff, paragraph 67, the contention was that this specific- weight duty was to onset the internal revenue on alcohol taxed in this country. Aside from the fact that if this is the purpose, 60 cents per pouna is exces- sive, and that 20 per cent per pound would serve to amply offset this consideration, we respectfully call your attention to the fact that, inasmuch as the alcohol contained in such perfumery pays an internal revenue in the country of origin, which internal revenue is contained in the selling price to this country and pays duty accordingly ad valorem, the internal-revenue tax in the United States is thereby ipso facto equalized. Reference to the Government statistics on the importations of perfumery will show that from England and Germany they are insig- nificant and from France have since 1909 not increased to any extent, certainly not in proportion to the increase in the population of the country. In fact, such reference will show that the total importation of perfumery at this time is practically nil compared with the total consumption a sufficient indication in itself that the rates imposed are not conducive to producing revenue. Tariff act 1909, paragraph 68 (H. R. 20182), Payne bill, 56. This paragraph should be amended to include all paint "whether contained in lacquered metal containers or otherwise, to correct the manifest injustice of paragraph 195 of the Payne bill. 'Tariff act 1909, paragraph 69 (H. R. 20182, paragraph 70). The duty on soaps should be ad valorem exclusively, without specific- weight rate provision, for, owing to the range of prices from ordinary laundry soaps to the expensive toilet soaps, the specific rate in the amended House bill of 20 cents per pound is absolutely prohibitory on the cheaper grades, which would otherwise be most used. It is recommended that ad valorem rates be made to apply on soaps exclusively of 35 per cent, or, if this is not approved on the very 68 TARIFF HEARINGS. PARAGRAPH 3 OILS. cheap soaps, that a specific duty exclusively be assessed on this low grade of merchandise instead of the compound duties proposed in H. R. 20182, paragraph 70. Respectfully, PARK & TILFORD. ALFRED H. SMITH Co. GEO. BORGFELDT & Co. FRANK M. BRINDLE. Presented by 1 Mr. C. S. WELCH, of Park & Tilford. STATEMENT OF THE DODGE & OICOTT CO., OF NEW YORK CITY, IMPORTERS AND MANUFACTURERS OF ESSENTIAL OILS, DRUGS, AND CHEMICALS. NEW YORK, January 2, 1913. The WAYS AND MEANS COMMITTEE, House of Representatives, Washington D. C. We have no specific recommendations to make at this time as to changes in duties; but we are vitally interested in the essential oil paragraphs of Schedule A, and are desirous of affording your com- mittee any assistance we can to make these paragraphs reasonable, fair, and consistent with other correlated sections of tne tariff. And along this line we call your attention to the question of Species as raw materials for the domestic manufacture of essential oils : We have no wish to oppose or bring in question the levying-of a duty upon spices as spices that is, as foods or condiments; but the provisions of the bill passed at the last session, while doubtless intended to levy a duty upon certain spices as condiments, had a much farther reaching effect. For example, clove buds were made dutiable at the specific rate of 2 cents per pound. At that time the value of standard grades of cloves was approximately 10 cents per pound, which is about an average price under normal conditions. The proposed duty, there- fore, was the substantial equivalent of 20 per cent ad valorem. On the other hand, oil of cloves, distilled from the clove buds, as an unenumerated essential oil was to be made dutiable at 20 per cent ad valorem. Under the present tariff the American distiller of oil of cloves has the protection of a duty of 25 per cent ad valorem on the oil, whereas his raw material, the clove itself, comes in free of duty. This house has distilled as much as 150,000 pounds of clove oil per annum, and it has been able to do so solely and absolutely because the raw material has been free of duty, whereas upon clove oil of foreign manufacture there has been a duty of 25 per cent ad valorem. Even as it is. however, the oil is sold here at next to no profit, the competition being extremely keen; but it is a "labor maker," without which it would be practically impossible to keep an essential oil fac- tory in existence; and without the protection we have up to this time enjoyed we should have to abandon the industry. It is obvious that with a duty on the raw material amounting to 20 per cent or more ad valorem while the manufactured product itself pays only 20 per cent ad valorem, we are not only deprived of the protection we have SCHEDULE A. 69 PARAGRAPH 3 OILS. had, but are placed completely at the mercy of the foreign manufac- turer, who has every advantage of us now hi cost of labor, main- tenance, and materials, besides having a profitable outlet for his by-product, while here we have none. A large proportion of all the clove oil distilled is used as the basic material in the manufacture of vanillin, a fine aromatic chemical. Last year's bill reduced the duty on vanillin to 10 cents per ounce, specifically, in the face of the new duty proposed upon the raw material, tne clove bud. As will doubtless be shown to your committee by the vanillin manufacturers, such a reduced rate of duty on the finished product would hardly be sufficient to protect the American manufac- turer even when his vanillin is manufactured from homemade oil dis- tilled from free cloves. But if the domestic vanillin maker is to have the cost of his raw material advanced while the protection on his manufactured product is cut in half, he will simply have no chance whatever. He will have to abandon the industry or resort to an entirely different raw material which has never been employed in this country and which would yield no revenue whatever to the Govern- ment. We simply ask for the continuance of a reasonable protection in a plain case where the raw materials of a long and well established in- dustry are accidentally spices but are used for purposes entirely for- eign to the usual and ordinary employment of spices. The situation is substantially the same as above stated in the case of the somewhat less important oils of pimento, nutmeg, and one or two others distilled from spices. We venture to suggest further that, while the essential-oil section, paragraph 51 in last year's bill was in this respect an improvement upon the Payne and preceding tariffs (which specified by name "es- sential oils" that do not and never did exist), it showed clearly that the provision was not drawn by one having anything like an accurate knowledge of the subject. It mentions by name, first, oil of pepper- mint for discriminative treatment, i. e., a specific duty of 25 cents per pound ; then it proceeds to enumerate by name over 20 essential oils which, together with " all * * * essential and distilled oils, etc.," are to come under the horizontal duty of 20 per cent ad valorem. Among the oils thus enumerated are many whose real importance perhaps would warrant specific mention by name ; but there are others, like chamomile, cedrat, jasmine, valerian, and the like, which are of no consequence whatever, being imported, when at all, only in the pettiest quantities, or, as in the case of the cedrat and jasmine, being little more than curiosities. Again, open to criticism are such specifications as ' ' anise or anise seed," since there is no anise oil other than anise-seed oil; "citronella or lemon grass/' indicating two names for the same thing, whereas the two oils of these names are widely different in character and value and no reason exists for linking them together; "rosemary or anthoss," perpetuated from former tariffs like the foregoing, in which the expres- sion "or anthoss" is altogether meaningless. And there are otners. We suggest that nothing substantial is gained by enumerating part of a general class in this way, especially if the enumeration is un- scientific and includes members which are neither important nor 70 TARIFF HEARINGS. PARAGRAPH 3 OILS. typical, while on the other hand such an enumeration is apt to open the door to unnecessary complications and confusion. We submit that only such oils should be enumerated by name as are to receive discriminative treatment by being assessed with special rates of duty diff erent from the general horizontal rate ; and that the general hori- zontal class should be covered by a single definitive specification similar to the one used in paragraph 51 for the residuary portion, say, "all essential and distilled oils and all combinations of same," etc. It should be borne in mind, however, that while not all essential oils are distilled, there being several important exceptions, neither are all distilled oils essential oils. DODGE & OLCOTT Co., By CHRISTIAN BRILSTEIN, Secretary. BEIEF OF VERONA CHEMICAL CO., MANUFACTURERS OF FINE CHEMICALS, CUSTOM DISTILLERS OF ESSENTIAL OILS. NORTH NEWARK, N. J., January 2, 1913. Hon. CHAIRMAN UNDERWOOD, Committee on Ways and Means, Washington, D. C. DEAR SIR: We beg to inclose briefs on paragraphs 5, 22, 51, 54-76, of the dutiable list; also a brief treating on "Spices." In reading same you will note we have not asked for an increase (one exception, see brief No. 3), but simply to leave the present duties remain, for the reason that a great number of the raw materials, especially those covered by paragraphs 23 and 24, have been taken on the tree list and a duty imposed. This has evidently been done for revenue pur- poses and to give American manufacturers of these products a pro- tection, and we can not object to this. In return, therefore, it would not he fair nor reasonable to lower duties on the finished products, especially as the duties now prevailing, to wit, 25 per cent, paragraph 5, and 20 per cent, paragraph 22, are not excessive, which is proven by the undeniable fact that there is a very large importation. Again, the chemical manufacturing industry, especially the one producing high-class products, is laboring under rather difficult conditions, and the duties allowed for the past years have always been very moderate com- pared to the 45 per cent and 60 per cent rates of the iron and steel and the textile industries. Progress has been comparatively slow, and we can not but too forcibly state that a further reduction, in the face of possible import duties on our raw materials, would place the American industry in a very precarious position. Surely it is not the intention of Congress to do that. A general downward revision may be necessary and in good order, but there are exceptions and these are some of them. The writer will he pleased to give testimony to the best of his ability any time convenient to the committee. Respectfully, yours, VERONA CHEMICAL Co., By EDWIN KUTTROFF, President. SCHEDULE A. 71 PARAGRAPH 3 OILS. BRIEF No. 1. Paragraph 5. This paragraph covers a whole line of chemical and medicinal prod- ucts. In fact, a great majority of the products that do not find special mention in other paragraphs fall in under this heading. We can truthfully claim that the pres- ent duty of 25 per cent is very fair and not too high, for it is safe to state that the importation exceeds the domestic production. So long as the paragraph is left written in this broad sense probably no exact figures can be given, besides many articles are imported without stating their exact nature or composition. While there may be comparatively few products that can be made here in competition to the imported goods, plus the proposed duty of 15 per cent, we do not hesitate to state that it is the honest opinion of every chemical and pharmaceutical manufac- turer in this country familiar with the condition of the increased cost of labor, machin- ery, repairs, and nearly every item of expense, that a duty of 15 per cent means the shutting down and ceasing of many a manufacture now in operation. A duty of 15 per cent will mean a large importation of the overproduction from, especially, Germany, and that country will certainly welcome such a move on the part of the tariff legislators of the United States. We, as a good many other manufacturers, have capital invested, have spent a lot of time and money for the manufacture of products which fall under this paragraph, and we respectfully and earnestly request that no reduction is made. The consumption of these products is relatively limited, the cost of production, on account of increased expenses, as everyone familiar with the manufacture of chemicals in the United States will admit, is higher all proves that we need a protection of at least 25 per cent, and that this rate is not excessive is, as above stated, undeniably proven by the fact that great numbers and quantities of these products are now imported . What argument can be more convincing than this latter fact? We have been manufacturing thymol and terpin hydrate for several years, and, we can state, without any profit to us. For example, on thymol the present duty of 25 per cent has not been sufficient to offset the increased cost of freight of the raw material from India to New York against the same from India to Hamburg. We are told the difference is about 1 shilling per hundredweight. As one gets only about H-l$ pounds thymol from 100 pounds raw material, you will note the shilling must be added to the 1^-lJ pounds finished product. Again, the resulting by-product, an oily cake, finds a very much better market in Europe, due to the relatively cheap cattle-food products found here, such as cottonseed cake, etc. The consumption in this country is equal to about 30.000 pounds so you will note how very limited the manufacture can be which again increases the cost per pound. We suggest a fixed duty would be more satisfactory, and propose as a fair and reasonable rate 50 cents a pound . For terpin-hydrate the same arguments, practically, hold; the consumption is about the same, etc. In this case also a fixed duty would be far more satisfactory, and we propose 10 cents a pound as a reasonable rate. BRIEF No. 2. Paragraph 22. Exactly the same arguments apply here as we give in the case of paragraph 5 i^see Brief No. 1). Paragraph 22 is very broad and far reaching in its application, and it is impossible to treat the subject matter of this paragraph except in a general way. We can state in addition in the case of the manufacture of coal- tar products or preparations which are covered by this paragraph that the raw mate- rials used fall mostly under paragraphs 23 and 24, and it is proposed to take both of these off the free list and place a duty of 5 per cent on the products mentioned in paragraph 23 and a duty of 10 per cent on the products mentioned in paragraph 24. In other words, it is proposed to lower the duties on the finished products and raise the duties on the raw materials. This is surely not in order and we again respectfully request and urge that no reduction is made in paragraph 22. BRIEF No. 3. Paragraph 51. We respectfully request and urge that after the words "peppermint 25 cents per pound," the following is inserted: "Clove, pimento or allspice, nutmeg, mace, patchouli, 35 per cent ad valorem." This is altogether necessary, for the new tariff (see paragraph 41 ) proposes a range of duties on the raw materials used for the dis- tillation of these various oils which averages about 20 per cent ad valorem. A differ- ence of 15 per cent, or a 35 per cent duty, is therefore very fair and reasonable. We respectfully urge the committee to give especial attention to this feature of the bill. 72 TARIFF HEARINGS. PARAGRAPH 3 OILS. BRIEF No. 4. Paragraph 54- This paragraph covers a whole range of products, some of which must be imported and others which can be made in this country. We may state that the latter form a large minority. We manufacture two products covered by this paragraph, namely, heliotropin and terpineol. We respectfully request and urge that both of these products are taken out of this paragraph and given specifies duties as follows: Heliotropin 50 cents a pound, terpineol 6 cents a pound. Heliotropin. The raw material used for this article is camphor oil, which under the proposed tariff will pay a duty of 20 per cent; paragraph 54 proposes for heliotropin the same rate, namely, 20 per cent this is therefore not just. Fifty cents a pound equals about 35 per cent of the selling price, but as we would have to pay a duty of 20 per cent on the raw material, camphor oil, the same is not excessive. Terpineol. The present duty on this article is 25 per cent. We manufacture this product, but owing to the increased cost of production (the item of labor enters here largely) far more is imported than we manufacture. A reduction of the present tariff is therefore entirely unnecessary and would be most unjust to the manufacturers of this country, of whom we are one. BRIEF No. 5. Paragraph 76. Vanillin. Present Payne rate, 20 cents per ounce. Proposed rate, 10 cents per ounce. We respectfully request and urge that the present rate be allowed to remain: (1 ) The rate was reduced from 80 cents to 20 cents per ounce in the last tariff which in itself is already a tremendous cut. (2) We use the following raw materials: Cloves, caustic potash, acetic anhydride, bichromate of potash, sulphuric acid, benzol. (A) Cloves: These have always been on the free list; it is now proposed to place a duty of 2 cents per pound, which is equal to about 20 per cent ad valorem. (13) In the case of caustic potash we have a similar condition. This article has ahvays been free; is now to be taxed with an import duty of three-fifths cent per pound . (C) Acetic anhydride: The duty now is 2 cents per pound plus 30 per cent for the container and there is no change proposed. (D) Bichromate of potash is made here, and we use the domestic article exclusively. (E) Sulphuric acid costs us fully 50 to 60 per cent more than the price paid by our German competitors. (F) Benzol: The proposed tariff places a duty of 5 per cent on this product; this probably means the price will advance nearly proportionately. The above is a brief resume of the situation of the point of view of the raw materials used by us. The increased cost of labor, the more expensive special machinery used, in fact every item of cost and expense is higher here than abroad. These facts all go to prove a reasonable tariff is absolutely necessary. You will note that the proposed bill reduces the present tariff by 50 per cent, and of the six principal raw materials used it is proposed to take three off the free list and on another, acetic anhydride, there is no decrease, but the present rate is allowed to remain unchanged. In view of the foregoing we respectfully request that no change be made in the present rate of 20 cents per ounce. BRIEF No. 6. The attention of the committee is respectfully called to the fact that a good many spices, etc., are used for two purposes in this country. First. As spices or condiments, and we can not discuss these uses and what effect a duty will have on the same. Second. Spices are also the raw materials for two very important industries now existing in the United States, the distillation of essential oils and the production of vanillin. The duties proposed in paragraph 41 equal about 20 per cent ad valorem and we claim, placing a burden of such high duties on the raw materials of two indus- tries, is altogether out of proposition. If it is the intention of the committee to propose a tariff on spices used for food and spice purposes then some means should be devised whereby those used for manufacturing purposes can enter free of duty as before. They could perhaps be made unfit for human consumption is some way or the manufacturers could use and distill these raw materials under some suitable governmental control. We understand in France and German v the latter method is used evidently with some degree of success otherwise the practice would not continue. It appears to us that the SCHEDULE A. 73 PARAGRAPH 3 OILS. framcrs of the new bill had in mind when the duties were proposed for spices that these articles are used solely as spices and condiments and may therefore be considered possi- bly as a luxury, but they evidently did not, at the same time, consider the fact that spices also form the basis of two important chemical industries. We respectfully request and urge that this feature of the matter is carefully considered and if the various duties proposed must remain on the spices used by the food and spice trade, then some means and method be introduced and decided upon, whereby spices, etc., imported and used for distilling and manufacturing purposes can come in free of duty. BEIEF OF THE COLUMBIA WESTEEN MILLS IN RE OILS. WEST PULLMAN, CHICAGO, ILL., January 3, 1913. Mr. JAMES R. MANN, House of Representatives, Washington, D. G. DEAR SIR: As you are probably aware a hearing is going to be given on January 6 at Washington, D. C., Ways and Means Com- mittee presiding, on the Underwood Bill, on which there is a proposed duty of one-fourth cent per pound on soya bean oil and 5 cents per gallon on China wood oil. As you will probably remember, this matter was discussed during March, April, 1912, when the above bill passed the House of Repre- sentatives. We can not see any reason why any amount of duty should be assessed on these oils, because the same are raw materials for paint and varnish industry of this country and both these oils are not crushed here. The assessment of any amount of duty on such raw materials will place the consumers in a very disadvantageous position in buying these materials in the future. Our object in writing you is to protest against such assessment of duty on these items, leaving them free as they now are. Attached we give you some information covering these two oils which is self-explanatory, and anything you can do to leave their entry free into this country without duty will be appreciated by us. Yours, very truly, COLUMBIA WESTERN MILLS, F. B. REYNOLDS, Manager. [Inelosure.] CHINA NUT OIL (CHINA WOOD OIL). China wood oil is crushed from nut. which is a production of southern China, Hankow district being the center. This nut tree is only grown in southern China and not in any other place in the world. We heard that experimental plantation of this nut tree was made in this country, but such experiment was a total failure. We tried to import the nut instead of the oil, to be crushed in this country, but we were not successful. Every year, about the beginning of October, the nut is picked from the tree by natives in southern China and crushed to obtain the oil. Then it is sold to refineries around Hankow, by whom the oil is refined, and shipped to this country. Usually the new crop oil is shipped from China by the end of October or early November. It generally takes 90 days before the oil arrives in this country from China. 74 TARIFF HEARINGS. PARAGRAPH 3 OILS. As long as the nut tree can not be raised in this country, we do not think that any industry for crushing of this nut can be established, especially if you take into con- sideration the fact that we were not successful even to import the nut for crushing purpose here. We are unable to obtain statistics for the production of nut in China, because there is no way of obtaining any figure, but we state below the quantity and value of importation of this oil into this country for the past few years: , Amount. Value. 1907... Gallons. 2,515,643 $1,044,016 1908 1,874,217 857, 782 1909 2,897,319 1,151,016 1910 2,494,896 846,635 1911 5,840,739 2, 204, 016 January-August 1912 3,045,758 1,591,926 SOYA BEAN OIL. Soya bean oil is crushed from soya bean, which is a product of North Manchuria, China. This oil has been used by soap manufacturers in extensive quantities about three years ago, when cotton-seed oil, tallow, grease, and other soap materials were very high. We heard that experimental plantations were made in this country with soya bean in the past, but the result was not successful. There even might be a small quantity of soya bean raised in this country, but such quantity is used for cattle feeding, fertilizer, etc., and is not enough for crushing use to obtain oil. Therefore the only way to obtain soya bean oil is to import from foreign countries. The production of soya bean in North Manchuria averages around 1,000,000 tons of 2,240 pounds per year. About 40 per cent of this quantity is now exported to Japan, where it is used for aoy making, or feeding purpose, as well as for crushing use to make soya bean oil. About 20 per cent is consumed by China itself; about another 20 per cent is crushed in northern China, thereby obtaining oil and cake; about 5 per cent will be kept by farmers for sowing use for next season. The balance of about 15 per cent is for export to European crushers. In Europe soya bean is used for crusher purpose to obtain soya bean oil and soya oil cake. Soya bean has only been introduced to European crushers since 1909. Therefore it is still quite a new product to them. There is no industry in this country for crushing soya bean . Therefore the soya bean oil used by soap manufacturers lias to be imported as above stated from foreign countries. Below are the statistics of import into this country. Amount. Value. August 1909 to Juno 1910 Pounds. 1,020,000 July 1910, to June, 1911 41,106,000 2, 560, 000 Julv 1911 to December 19)1 . . 11,286,000 670,000 January 1912 to \ugust 1912 20, 208, 905 1,113,483 P. S. Under present tariff then- is a duty of 45 cents per bushel on soya bean which is a prohibitive rate. If there is a small number of farmers who are raising soya beans in this country they are well protected under the above prohibitive duty on soya beans. SCHEDULE A. 75 PARAGRAPH 3 DLLS. STATEMENT OF M. B. SNEVILY, OF NEW YORK CITY. Mr. SNEVILY. If the committee please, a provision should be made in your tariff to cover vegetable oils and seeds met with elsewhere and which are now named under either the similitude clause or under the paragraph "Not otherwise specified," the result of which is that an inferior oil or a seed which we use to produce an oil to be used as a substitute for a staple, will pay in some cases the same duty and in other cases more duty than the staple itself. This fact prevents the use of substitutes, because it is well recog- nized in the trade that a buyer will never pay for a substitute the same price for which he can obtain a staple. The duties on vegetable oils and seeds, in my opinion, should be specific and not ad valorem for several reasons. One reason is that a specific duty will do away entirely with undervaluation. It will also absorb any difference in market values of the different markets of the world. Furthermore, in this country, where we import a seed we import it to obtain the oil. The value of that seed depends upon the percent- age of oil which it contains and the quality of the oil that we can secure. Ad valorem duties increase the assessment on the consumer when the market advances. For example, take table olive oil, a fair quality of which was obtainable a year ago at 80 cents a gallon. I am not alluding to the class of oil that you would use yourself on your own table, but to a fair grade of wholesome oil. The duty on that oil in barrels is 40 cents a gallon, equivalent to 50 per cent, of course. To-day that same grade of oil will cost $1.20 a gallon. An equivalent of 50 per cent would make the duty 60 cents instead of 40 cents, and that 20 cents a gallon increase is paid by the consumer, not to the producer but to the Government. Mr. HARRISON. In that respect you are satisfied with our bill, because in all our seed laws the duties provided are specific. Mr. SNEVILY. If my recollections are correct, you provide in some places an ad valorem duty, not on olive oil, but on some of the seeds covered in the schedule. Mr. HARRISON. The seeds themselves or the oil ? Mr. SNEVILY. The seeds and oils. Mr. HARRISON. They are in the agricultural schedule ? Mr. SNEVILY. The seeds are in the agricultural schedule; yes, sir. Mr. HARRISON. We have not reached that yet. Mr. LONGWORTH. To what paragraph are you particularly re- ferring ? Mr. SNEVILY. I am not referring to any particular paragraph, but am on the general subject of vegetable oils and seeds. Fluctuations in these commodities are sometimes very violent. Prices have been steadily advancing for several years in fact, are continuing to advance. As an illustration of what we have in the way of fluctuations, linseed oil sold a short time ago for 95 cents and is now being sold for 40 cents a gallon. Coconut oil, of which we have sold hundreds of tons at 4 cents a pound and which I con- sidered extremely high at 6 cents a pound has sold during the past 76 TARIFF HEARINGS. PARAGRAPHS 3 OILS. three years for 10 cents a pound, and 7 cents a pound has been con- sidered a low price. Mr. LONGWORTH. Are you in favor of a duty on coconut oil ? Mr. SNEVILY. Not unless that duty can be sufficient to overcome the difference in cost of transportation and manufacture in this country. There is a certain amount of coconut oil made in the United States, but that is made for a particular purpose. It is not the oil which is sold to the soap makers. The oy-product of that oil is what is sold to the soap makers. Commercial olive oil is used in the industries, tanning of leather, dressing of worsteds and woolens. When we paid a duty of 25 per cent, we considered the oil high at 65 cents a gallon, including that 25 per cent duty. To-day we consider olive oil at 65 cents a gallon, without any duty, as a safe investment. A low price or an average price is 80 cents, and a high price is 90 to 95 cents. Coconut oil at present pays no duty at all, and neither does commercial olive oil. As illustrating the advance which has taken place in these oils, prior to the enactment of the Payne-Aldrich bill olive oil could not be imported into the United States except upon payment of 40 cents a gallon duty, if the cost at port or the place of origin exceeded 60 cents per gallon, and now it is seldom if ever that we can get olive oil at 60 cents a gallon. That simply illustrates the advance in values. I will hardly take the liberty to suggest to your honorable committee the rates of duty that should be assessed on these various oils and seeds, but I would like to call a few facts to your attention. The imports of vegetable oils and seeds, dutiable and free, in the year 1910 aggregated about $25,000,000 to $27,000,000; in the year 1911 practically $65,000,000. Ocean freights are an item that has to be considered on this proposi- tion, particularly of recent years when the rates have advanced to the extent that they have. A ton of seed occupies 55 cubic feet. We have just paid $6.10 per ton on an import, which figures out 11 cents per cubic foot. The product of that ton of seed in oil, on an average, would run from eighty to a hundred gallons. Allow that it is a hundred gallons or two barrels; the cubic space occupied by that two barrels would be 20 feet, which at 11 cents per foot is $2.20. You will therefore perceive that as freight room on steamship is sold by the cubic space occupied by cargo that a domestic manufacturer would be obliged to pay $2.00 more for the product of 1 ton than the foreign manufacturer. We consider the outlay on a ton of seed as practically $10. That is, from the time a ton of seed is landed on the dock until we finish its manufacture into oil, meal, or cake the cost of it is approximately $10. In some cases it is less; in others more. That represents the amount which we spend on every ton of seed which we import. An importer will bring to this market the oil content of that ton of seed, and it will cost him not over 50 cents expenses here. It may cost him nothing. If he has a free lighterage clause, the oil may be discharged from the steamer, and the railroad company absorbs the charge. 1 le may have weighing and sampling, but it will not cost him over 50 cents. In other words, the man who imports oil will spend 50 cents on wluit lie gets out of a ton, while a domestic manufacturer will spend $10. If he brings the cake or meal here, which seldom SCHEDULE A. 77 PARAGRAPH 3 FORMALDEHYDE. if ever is done, he may make an outlay possibly of another dollar. Increased consumption has steadily advanced prices. It is a problem for all manufacturers who are consumers of oils and fats, making it very difficult for them to compute costs or establish any standard of values. It seems to me that relief must necassarily come by substi- tuting for these staple articles some of the oils that are used elsewhere in the world. This, to my mind, can be best accomplished by offering to those who are willing to promote the use of these oils an opportu- nity to do so at a fair margin of profit. Scarcity r-crop failures invariably result in higher prices. The consumer, if he is enter- ing goods on an ad valorem rate, has a further hardship beside that of increased values through scarcities. By-products of these seeds are seldom, if ever, brought to the United States. In fact, in most places where produced they are of more value than they are here. That is all I have to say. The CHAIRMAN. Any questions ? No response. The CHAIRMAN. Thank vou, sir. Mr. HILL. Is cottonseed oil and olive oil oftentimes used inter- changeably for the same purposes ? Mr. SNEVILY. Not if the Department of Agriculture can locate it, unless so branded. Mr. HILL. I know, but Mr. SNEVILY (interposing). There are mixtures that are branded as a mixture of olive oil and cotton oil. Mr. HILL. Is it not prepared so that the ordinary person who is not an expert could not tell the difference ? Mr. SNEVILY. Personally, I had rather have a high grade of cotton oil than a low grade of olive. Mr. HILL. For food purposes ? Mr. SNEVILY. Yes, sir. Mr. HILL. One is free and the other pays duty? Mr. SNEVILY. Yes, sir. FORMALDEHYDE. STATEMENT SUBMITTED BY PERTH AMBOY CHEMICAL WOKKS, NEW YORK CITY. PERTH AMBOY CHEMICAL WORKS, New York, January 4, 1913. Hon. OSCAR W. UNDERWOOD, Committee on Ways and Means, House of Representatives, Washington, D. C. SIR: We respectfully petition that formaldehyde, 40 per cent solu- tion, also commercially called formalin, be dutiable at 1$ cents per pound specific; paraformaldehyde, solid, 95 per cent pure, be dutiable at 7 cents per pound specific. Formaldehyde, containing 40 per cent formaldehyde, is an aqueous solution, and paraformaldehyde is a polymerized formaldehyde, formed by evaporation of the aqueous solution of formaldehyde, an amorphous solid product 95 per cent pure. 78 TARIFF HEARINGS. PARAGRAPH 3 FORMALDEHYDE. Both are powerful antiseptic disinfectants and preservatives, employed in a number of ways, separately or in different combinations. Formaldehyde is produced by the oxidation or partial combustion of methyl alcohol by an elaborate process of purifying crude wood alcohol. The apparatus and plant necessary for the production of formalde- hyde, consisting chiefly of large expensive copper stills and fittings, etc., are correspondingly higher in cost in the United States than in other countries, requiring a larger investment of capital, affecting overhead charges, including interest, insurance, and depreciation. The price of formaldehyde and paraformaldehyde is governed by the price of crude wood alcohol. The price of wood alcohol is largely regulated by what the wood-alcohol producers secure for their by- products, namely, acetate of lime and charcoal. For acetate of lime a relatively uniform market exists, while for charcoal great fluctu- ations at times take place, on account of the varying demand on the part of the iron industry, in which charcoal is mostly consumed. Low prices of charcoal almost always mean higher prices for wood alcohol. The price of wood alcohol is also affected by tne demand and supply, thus leaving the manufacturer of formaldehyde at the mercy of rather erratic fluctuating market conditions, as far as the supply of his raw material is concerned. On one side the constantly increasing demand for wood-alcohol products and on the other the fact that our depleted forests are not being replanted tends toward a marked increase in the value of all wood-alcohol products. The Canadian competition, with its lower cost of labor and immense resources of undepleted forests, has cheaper raw material for the manu- facture of wood alcohol at its disposal. As pioneers of the formaldehyde industry in this country, we there- fore petition that the adequate rate of duty on formaldehyde of 1J cents per pound specific, paraformaldehyde 7 cents per pound specific, be established, so that in case the reciprocity question between the United States and Canada should at any time be reopened and con- cessions on the United States import rates of duty be agreed to it will not endanger the American formaldehyde industry. The Canadian competition in seeking the nearest market as an out- let for its formaldehyde surplus which can not be consumed at home may cause ruinous competition in the United States, which could not be checked, as our customs laws do not embody any "dumping" provision. Approximate revenue estimates. Payne- Aldrich Tariff Act 1909: Paragraph 3: Paraformaldehyde, basis 100 per cent pure, 25 per cent ad valorem, 25,000 pounds, at 1\ cents per pound $1, 812. 50 Paragraph 3: Formaldehyde, 40 per cent solution, 25 per cent ad valorem, 250,000 pounds, at 2 cente per pound 5,000. 00 Modified duty suggestion: Paraformaldehyde. 25,000 pounds, at 7 cents per pound 1, 750. 00 Formaldehyde, 500,000 pounds, at \\ cents per pound 7,500.00 We therefore petition that: Formaldehyde 40 per cent solution be dutiable at 1 \ cents per pound; paraformaldehyde, solid, be dutiable at 7 cents per pound. Respectfully submitted. PERTH AM BOY CHEMICAL WORKS, HUGO Du Bois, Treasurer. SCHEDULE A. 79 PARAGRAPH 3 ALKALIES. ALKALIES. BRIEF OF JOHN F. QUEENY, PRESIDENT MONSANTO CHEMICAL WORKS, ST. LOUIS, MO. COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. DEAR SIR: Pursuant to your notice of tariff hearings of December 11, 1912, we beg to say that we are engaged in the manufacture of a limited number of medicinal and fine chemicals, most of which, up to a few years ago, were manufactured exclusively in Europe principally in Germany and sold in the United States at materially higher prices than are now ruling, the reduction due entirely to our competition. It is no unusual procedure for the foreign chemical manufacturers to maintain high prices here, so long as they have no competition, but immediately the manufacture of a product is undertaken here, the price is dropped to a point which makes its manufacture prac- tically unprofitable in an endeavor to discourage the new manufac- turer. This they are enabled to do, and at a profit to themselves, because they can maintain high prices at home, due to their com- binations a fact well known and dump their surplus production here in competition with us. To illustrate: The selling price of phenacetin (acetphenetidin) classified under paragraph 65 in the United States in wholesale quantities was $12 per pound for 17 years, up to and including the year 1906, during the time it was manufactured exclusively in Europe. The patent expired during 1906, and in 1907 its manufac- ture was taken up by us, with the result that the price in the United States to-day, in wholesale quantities, is about 90 cents per pound, as against $12 per pound six years ago, and $1.15 per pound the year following. Phenolphthalein also imported under paragraph 65 was manu- factured exclusively in Europe until about three years ago, and was sold in this country in wholesale quantities at $2.15 to $2.75 per pound. It is now manufactured by us in competition with the European manufacturers, with the result that the wholesale selling price is now $1.20 to $1.25 per pound, almost one-half the price previously obtained here by them. Nevertheless, thousands of pounds are still coming in from Europe. The manufacturers of fine and medicinal chemicals are perhaps under greater expense proportionately to the amount of business done than any other line 01 manufacture. They must always mam- tain, at a considerable cost, a research laboratory, with no assured compensatory results to offset such cost. They must keep pace with the changes that are constantly taking place in processes of manu- facture, which changes often make obsolete the machinery or apparatus then in use. This necessitates a complete change in the character of the machinery or apparatus at a considerable cost, and as part, and very often the greater part of the machinery and appara- tus required in an installation, must be imported from Europe, the manufacturers of fine chemicals start out with an investment of at 80 TAKIFF HEARINGS. PARAGRAPH 3 ALKALIES. least 45 per cent more than the European manufacturers in machinery and apparatus alone, as comparatively little of the machinery or apparatus required in this industry is now manufactured in the United States. Chemists who are satisfied with a salary of $600 to $900 a year in Europe Germany and Switzerland particularly demand $1,800 to $3,000 a year under similar conditions of employment in the United States. The young men who graduate as chemists from our uni- versities demand a salary of $900 the very first year they are out of college, while in Europe such graduates are glad of the opportunity to get in a factory at comparatively little or no compensation, to get a start and for the knowledge they acquire in such factories. The manufacture of medicinal chemicals, even under the present tariff, is not in any too good a position, while Germany is spending an enormous amount every year for its development through its great universities, in which the professors and the chemical factories are working hand in hand with enormously good results. Medicinal chemicals reach the consumer in very small quantities, and therefore any reduction in the present rates, which we ask you to retain, will not affect the ultimate cost to them to any appre- ciable extent, but will affect and discourage home manufacture, and at the same time reduce the revenue now obtained by the Gov- ernment. Our investment for the manufacture of the medicinal products we now make has been made within the past five years and repre- sents about $300,000. This investment was made in good faith, based on the present tariff rates, and the benefits thus far obtained have been more for the consumers than for us, because they have obtained such products as we manufacture at from 25 per cent to 50 per cent less than the}' were paying when we started manufac- turing. We ask, therefore, that the raw materials used in the manufacture of fine and medicinal chemicals be retained on the free list and the present rates be also maintained on the finished products, which are commensurate only with the conditions now existing in this country. This will enable us to continue manufacturing, and further, it will encourage the manufacture of fine and medicinal chemicals in this country to the ultimate good of our whole people. We respectfully submit the following: Paragraph, 3. Alkalies, alkaloids, etc.: Caffeine being an alkaloid is now classified and imported under this paragraph and assessed at the rate of 25 per cent ad valorem. Caffeine is very largely imported into the United States in com- petition with home manufacturers, and the quantity imported pays a good revenue to the Government. There should be no change, therefore, in the present rate, if tea siftings the raw material is retained on the free list. With the present rate of 25 per cent on the entered foreign value for caffeine-- equal to 70 cents per pound we can and do compete, whereas if tea siftings the raw material be made dutiable at 1 cent per pound- equal to about 40 per cent of its value as proposed in H. K. 201S2, then caffeine should be made dutiable at 40 per cent ad valorem, or preferably at a specific rate of $1.25 per pound. SCHEDULE A. 81 PARAGRAPH 3 ALKALIES. We desire to call attention to an error in the caucus print of H. R. 20182, in which appears the average unit value of caffeine as $1.66 and $1.82 per pound- (1910), (1911), whereas the entered value for the fiscal year 1911 is $3.06 per pound, as shown in a letter from the Treasury Department to us under date of April 24, 1912, appended herewith. The actual market value of caffeine abroad in maximum quantities is 30 marks per kilo, equal to $3.24 per pound. TREASURY DEPARTMENT, OFFICE OF THE SECRETARY, DIVISION OF CUSTOMS, Washington, April 24, 1912. The MONSANTO CHEMICAL WORKS, 1800 South Second Street, St. Louis, Mo. GENTLEMEN: Referring to your letter of the 12th instant, and to previous cor- respondence, relative to the market value of caffeine imported during the past year, I have to advise you that an investigation of this subject discloses that the prices stated in your letters as the foreign value are approximately correct. The collector of customs at New York reports that due to erroneous quantities having been recorded by the statistical clerk the quantities shown in the report published by the Bureau of Statistics are incorrect. The following is a correct report of the caffeine imported during the fiscal year 1911: Quantity (pounds). Value. Quarter ended: Sept. 30, 1910 10,611 $33,160 Dec. 31, 1910 1,858 5,680 Mar. 31, 1911 4,519 14, 104 June 30, 1911 16,941 51,067 33,929 i 104,011 1 $3.06$ per pound. The price lists inclosed with your letter of January 20 last are herewith returned. Respectfully, F. M. HALSTEAD, Chief Division of Customs. Paragraph 15. " Coal-tar dyes or colors, not specially provided for in this section, thirty per centum ad valorem; all other products or preparations of coal tar, not colors, or dyes and not medicinal, not specially provided for in this section." We strongly urge the retention of the words "and not medicinal" in this paragraph, which were omitted in paragraph 22, H. R. 20182, although included in the two succeeding paragraphs of that bill, i. e., paragraphs 23 and 24. The classification "not colors or dyes and not medicinal" covers a number of intermediate coal-tar products used in the manufacture of medicinal products, and the. omission of the words "and not medicinal" in said paragraph is likely to cause confusion, trouble, and expense for the importer of such intermediate coal-tar products, with no apparent benefit to the Government. The imports under the classification of "not colors or dyes and not medicinal" during the fiscal year ending June 30, 1910, amounted to $661,500 and the duties collected amounted to $130,312 as shown in Schedule A, Report No. 326, page 205. 78959 VOL 113 1> 82 TARIFF HEARINGS. PABAGBAPH 3 ALKALIES. Paragraph 65. (1) "Medicinal preparations containing alcohol, or in the preparation of which alcohol is used, not specifically pro- vided for in this section, fifty-five cents per pound, but in no case shall the same be less than twenty-five per centum ad valorem." The imports under this paragraph, paying the specific rate of 55 cents per pound, are apparently on the increase, as shown herewith: From Schedule A, Report No. 326, p. 272. From Schedule A, Report No. 326, p. 63. 1890 1896 1900 1905 1910 1911 Pounds 41,312 $7,274 50,268 $39,583 147,112 $133,994 147,447 $113,534 171,342 $152,659 157,713 $138,583 Value In the manufacture of a number of articles coming under this para- graph the alcohol is transformed or lost during the process of manu- facture and does not appear in the finished product. For that reason we ask that the wording of this paragraph (65) be retained as it now reads; otherwise products so made might come in under other classfi- cations, with a loss of revenue to the Government. Paragraph 18 of H. R. 20182, introduced at the last session of Congress, would not cover such articles, for the reason that the finished products do not contain alcohol, as such, although alcohol was a raw material or the base for their manufacture. Paragraph 83. Vanillin, present rate 20 cents per ounce. Vanillin is a synthetic chemical product manufactured from cloves. Until about 15 years ago it sold in the United States by European manufacturers at So per ounce, now selling at 32 to 35 cents per ounce, due to home competition. The rate of duty was reduced in 1909 from 80 cents per ounce to 20 cents per ounce, the rate now ruling. The manufacture of this product requires a largo investment for the quantity manufactured, its process of manufacture is very complicated, and requires, besides competent chemists, a number of dutiable chemical products for its manufacture in addition to the raw material, cloves. Vanillin enters almost entirely into the manufacture of perfumery, flavoring extracts, biscuits, chocolate, and confectionery, the price of which would not be affected in the slightest by the cost of vanillin, even if it were two or three times its present selling price, because of its strong and far-reaching flavoring properties. .None would therefore suffer by continuing the present rate of 20 cents per ounce, with cloves, the raw material, on the free list. If cloves should be made dutiable at 2 cents per pound, then vanillin should be made dutiable at 25 cents per ounce. Pantf/rapTi 679. Cloves now on free list. About one-third of the entire quantity imported is used in the manufacture of vanillin. If cloves are made dutiable, a proportionate increase should be made in the rate on vanillin (par. S3): for instance, if cloves are made dutiable at 1 per cent per pound, the duty on vanillin should be increased 2J cents per ounce. If cloves are made dutiable at 2 cents per pound, then the duty on vanillin should be increased 5 cents per ounce over the present rate, SCHEDULE A. 83 PARAGRAPH 3 ALKALIES. Paragraph 482. (Free list.) Acid phthalic should be retained in the free list, as more than 60 per cent of the total quantity imported is used in the manufacture of the medicinal product phenolphthalein. If phthalic acid be placed in the dutiable hst, as proposea in H. R. 20182, phenolphthalein should be specially providea for at the specific rate of 55 cents per pound, as alcohol also enters into its manufacture. Phenolphthalein up to three years ago was manufactured exclusively in Europe and sold in the United States at $2.15 to $2.75 per pound in a wholesale way. It is now manufactured by us, with the result that the wholesale price is $1.20 to $1.25 per pound, a reduction of about 50 per cent in about three years, and due entirely to our competition. As long as the European manufacturers had no competition they obtained high prices here, but with home competition they lowered their prices in an endeavor to make the manufacture here unprofitable and undesirable. Paragraph 500. * * *; also quicksilver flasks or bottles, iron or steel drums used for the shipment of acids, of either domestic or foreign manufacture, which shall have been actually exported from the United States, but proof of the identity of such articles shall be made under general regulations to be prescribed by the Secretary of the Treasury. After the words "iron or steel drums" insert "exported empty or," and after the word "acids" insert "or other chemical products," making the lines read "iron or steel drums exported empty or used in the shipment of acids or other chemical products of either domestic or foreign manufacture," etc. We request this amendment for the reason that numerous chemical, products are shipped into the United States in such iron or steel drums and on which drums a duty of 30 per cent ad valorem is levied under paragraph 151 in addition to the duty levied on the contents. Under the present act if such drums are returned or exported to be refilled and shipped back to the United States, these same olrums are again assessed at the rate of 30 per cent ad valorem, the importers paying duty twice or more on the same drums as often as they are returned and reshipped into the United States. Respectfully submitted. MONSANTO CHEMICAL WORKS, Per JOHN F. QUEENY, President. ST. Louis, January 6, 1913. PETITION OF HERBERT WATSON, OF CHARLES COUNTY, MD., REGARDING DUTY ON BICARBONATE OF POTASH. To the Chairman and Committee on Ways and Means of the House of Representatives: The petition of Herbert Watson, of Charles County and State of Maryland, respectfully shows and represents: 1. That the specific duty of 1^ cents per pound which, as appears from the first item in paragraph 69 of the bill H. R. 20182, originally introduced in the House of Representatives on February 15, 1912, it is proposed to place upon potash, bicarbonate of, and carbonate 84 TABIPP HEARINGS. PARAGRAPH 3 ALKALIES. of, refined, should be made to be at least 1 cents per pound on bicarbonate of potash, for the following reasons, that is to say: As proven by experience, it has been impossible heretofore to maintain a plant and to manufacture and sell bicarbonate of potash in the United States in competition with importers of this commodity manufactured abroad, even with therateof duty25per cent ad valorem, as it is at pres- ent, this being about equal to a specific duty of 1 cents per pound. The Diamond Soda Works, a branch of the Liquid Carbonic Co., at Milwaukee, Wis., the only concern in the United States which has attempted the manufacturing and marketing of this product, com- menced the manufacturing of bicarbonate of potash in the year 1901, and continued until the year 1907, when the enterprise was abandoned as being unprofitable, for the cause hereinafter stated. As will appear from the tabulated statement herewith submitted, as part hereof, marked "Exhibit A/' the importation of the com- modity fell from 162,798 pounds in 1900, the year before the manu- facturing in this country commenced, to 44,850 in 1906, owing to the output from the domestic concern at Milwaukee. In the year when the manufacturing in this country ceased importations were 310,281 pounds; and the import value was reduced from $0.049 in 1906 to $0.022 in 1907, or considerably less than the value per pound of the crude carbonate of potash from which the bicarbonate of potash is made. It was the importation of this large quantity in 1907 and the low price for which trie commodity was offered on the market that made the further manufacturing in this country wholly unprofitable and caused its abandonment at Milwaukee, as above set forth. The following year, 1908, the value of the imported commodity was again put up, and the selling price to the trade became, for lack of compe- tition, about 1 cent per pound greater than the price of 6 cents, for which thedomestic concern atMilwaukee had beensellingtheproduct manufac- tured there. The price has continued to rule slightly above these fig- ures, there being no longer competition with any domestic manufacturer. While, even at the prevailing 25 per cent ad valorem duty, it was found, after six years' experience, impossible to manufacture bicar- bonate of potash at Milwaukee in competition with foreign manufac- turers, your petitioner believes it would be possible to manufacture the product at a place nearer the Atlantic coast if a duty of at least 1 cents per pound were laid upon the imported commodity; and, with this duty, your petitioner is prepared to undertake such manufacture in Charles Count}", in the State of Maryland, where he now owns land about 25 miles south of Washington City. For, not only would the expense of maintaining a plant and operating in said Charles County be less than in Milwaukee, but there would be relief from the heavier freight charges on the crude potash west, as well as from the return charges on shipments of the refined product east. Besides, in this section of Maryland, the entire section south of Washington, there are no manufacturing establishments whatsoever, and the installing of such plant and the operating thereof would aid greatly in the develop- ment of this section, so in need of development. With such a plant in southern Maryland your petitioner would be able to supply at least 60 per cent of the trade in this commodity in the United States, at a price not exceeding 6^ cents per pound. The SCHEDULE A. 85 PARAGRAPH 3 ALKALIES. ruling prices three months ago were from 7$ to 1\ cents per pound, ex dock, New York, although in some cases contracts for 1912 have been made at $6.87 per 100 pounds. Thus consumers would be benefited by the imposition of a duty which would make it possible and profitable to manufacture this com- modity here, while at the same time the revenue to the Government would increase. For instance, take the 275,204 pounds imported in 1912, as appears from "Exhibit A" herewith, as the quantity fairly demanded by the trade in this country in a year. Selling at 6 cents, as against the present ruling price of 1\ cents per pound, there would be a saying to the consumers of $2,752.04; and (conceding that the domestic con- cern would supply 60 per cent of this quantity), as against the revenue from the importation of the entire quantity at \ cent duty per pound, amounting to $1,386, we should have, from the 40 per cent, or 110,082 pounds, imported with a duty of 1 cents per pound, revenue amount- ing to $1,657.23. 2. Your petitioner respectfully submits that the figures given in the exhibit herewith, together with what has been hereinbefore stated as to the ability of your petitioner to manufacture at least 60 per cent of the quantity of bicarbonate of potash required by the trade in the United States, fairly indicate what would be the decrease in importa- tions if the duty were fixed at \\ cents per pound, thus enabling your petitioner to establish his plant in southern Maryland and to manu- facture the commodity, as hereinbefore stated. Of course, if others should be similarly encouraged to engage in the work of manufac- turing the product the result might be no further importations. At best the total revenue from such importations under present condi- tions is not large, as appears from "Exhibit A." There are no secrets about the manufacture and use of bicarbonate of potash. The cost of the plant, machinery, and apparatus is approxi- mately $10,000. The commodity is made by treating carbonate of potash in solution with carbonic-acid gas and crystallizing the product, which involves the production of carbonic-acid gas on a commercial basis ; and it requires from 12 to 14 days to crystallize and prepare the product for use. It must be chemically pure and answer to all the requirements of the United States Pharmacopoeia. All crude mate- rial is imported duty free. Bicarbonate of potash is used principally by manufacturers of patent medicines and by baby food and con- densed milk manufacturers. It is rarely sold by retail druggists, except in small quantities as a component part of physicians' pre- scriptions. Therefore, it enters as a very small fraction into the cost of any article or compound. 3. In submitting the aforegoing statements and estimates your petitioner has relied, both upon a publication by the Bureau of Sta- tistics of Foreign and Domestic Commerce, from which the tabulated statement herewith, marked "Exhibit A," was taken by courtesy of the officials of that bureau, and upon knowledge and information gained from his experience and work as a chemist, as an inventor who has made discoveries in applied chemistry, and as a manufac- turer. He was superintendent and chemical engineer of the Diamond Soda Works, at Milwaukee, hereinbefore mentioned, where he in- stalled the plant for the manufacturing of bicarbonate of potash, and 86 TARIFF HEARINGS. PARAGRAPH 3 ALKALIES. operated it for two years, at the end of which period he had charge of the works of this company at Pittsburgh, manufacturing carbQnic- acid gas and Epsom salts. Later, he was engaged by a concern in Chicago in the matter of manufacturing a new and useful chemical, "acetaldehyde," not previously manufactured in this country. He resigned his position in Chicago about three months ago with the view of establishing a plant for the manufacturing of bicarbonate of potash upon his land in Southern Maryland, being then ignorant of the fact that it is proposed to make the tariff upon this product so low as one-half cent per pound. He has already ordered, and there has been delivered, a portion of the requisite machinery for his plant; but pending the enactment into law of the new tariff bill, and your petitioner being fearful that the proposed rate of one-half cent per pound upon this product may be prescribed, he has been impelled to abandon the further prosecution of his plans for the present, to be resumed, nevertheless, if the duty shall be 1^ cents per pound. In conclusion it is respectfully submitted that your petitioner knows of no reason why the rate of duty on bicarbonate of potash should not be maintained on equality with the duty on permanganate of potash; the duty whereupon, as appears from said paragraph 69, is proposed to be at the rate of 1 cents per pound in lieu of the pres- ent duty of 25 per cent ad valorem upon that commodity. It may be added that the Government has been making search Cor available sources of potash other than the German deposits, and that it is important to develop the potash industry where possible. Respectfully submitted. HERBERT WATSON. EXHIBIT A. IMPORTATIONS OF BICARBONATE OF POTASH. Y Rate of duty. Quantity. Value. Duties. Value per unit of quantity. Ad va- lorem rate of duty. Per cent. 1900 .. 25 162,798 $9,666 $2,416.50 $0. 059 Per cent. 25 J901 25 73, 770 5,054 1,263.50 .069 25 1 902 25 56, 970 3,625 906.25 .064 25 ] 903 . . . . 25 19, 130 1,518 379. 50 .079 25 1904 25 93, 769 4,778 1,194.50 .051 25 1905 25 76,983 4,504 1,126.25 .059 25 190(1 25 44, 850 2,192 548 06 .049 25 1907 . 25 310, 281 6,787 1,696.75 .022 25 1908 25 218, 007 11,500 2, 875. 00 .052 25 1909 . 25 342,856 16,915 4, 228. 75 .049 25 1910 25 334, 300 16,633 4, 158. 25 .049 25 1911 25 325,016 16,428 4,107.00 .051 25 1912 25 275, 204 13, 155 3,288.00 .048 25 NOTE.- In (be above tabulation the year is the fiscal year ended on June 30 of the designated year. SCHEDULE A. 87 PARAGRAPH 3 COMPOUNDS N. S. P. P. COMPOUNDS N. S. P. F. REQUEST THAT MANNIT BE PLACED ON THE FREE LIST WITH MANNA. NEW YORK, February 4, 1913. The COMMITTEE ON WAYS AND MEANS, Washington, D. C. GENTLEMEN : It has recently been brought to our attention that our people in America, and other classes of your population, originat- ing from southern Europe, use almost exclusively crude manna instead of mannit. Mannit is the sugar extracted from manna. Manna is a sap from a tree known as frassino, which grows only in Sicily and Southern Europe. Manna and mannit are both used for the same purposes namely, as a sirup and gentle laxative. Mannit is the more desirable of the two, but on account of its being taxed 25 per cent duty the people import cmde manna duty free instead. Approximately 47,427 pounds crude manna were imported in 1911, valued $21,424, duty free. The importations of mannit are unob- tainable, but we know them to be very small, only a few hundred pounds. The high duty, 25 per cent ad valorem, on material worth $2 a pound, brings the price up to $2.50 a pound, with the results that there are no importations, no revenue derived, none is produced here, and the people are importing crude manna instead. It requires 4 parts manna to yield 1 part of mannit, so the persons using manna take a proportionately larger quantity, and get a lot of molasses and other impurities in their system. The principal sales in other countries are of mannit, because the price is right, and mannit is better adapted for children and delicate persons, because of its purity. It seems reasonable, therefore, to ask that the consumer in the United States be also placed in a position to get mannit reasonably, especially as there is nothing to be lost to anybody in granting to mannit the same exemption from duty as accorded to manna. Busi- ness will be handled through the same channels here, and the supply received from the same sources abroad. It seems that mannit has been improperly classified with "Chemical compounds, n. s. p. f., subject to a duty of 25 per cent ad valorem." Mannit is not a "chemical compound," alcohol is not used in refining it commercially, and mannit does not contain alcohol in any form whatsoever. The mannit of commerce is the pure crystal obtained from a solution of manna in water. The alcohol process referred to in textbooks is not employed except in very rare instances; not over 250 pounds a year of alcohol-prepared mannit is used in the whole world. Mannit is not manufactured or refined in the United States in any form, and probably never will be because of its peculiar and excep- tional nature. The sap-bearing trees grow only in a few places in southern Europe, and are not grown in the United States. It requires 12 years before a tree begins to bear, and then another 5 to 10 years for the sap to ripen after it has been tapped. Manna improves with age; so the villagers pile it against the walls of their huts and have 88 TABIFP HEARINGS. PARAGRAPH 3 COMPOUNDS N. S. P. E. it around them this way, year after year. They are a deserving class of poor but industrious people, living cheaply on their own gar- dens, and sell their manna wnen they need money. The \yorld' s pro- duction and supply of manna does not exceed half a million pounds annually; take out 50,000 pounds of crude shipped to America, and the balance is boiled down to 150,000 pounds of mannit, the refined manna, which plays an important r6le in the health of many peo- ple elsewhere, and would be better for our own people than the present use of crude manna. We therefore respectfully petition your honorable committee to place mannit in the same specific classification as manna on the free list; that is, to have paragraph 620 instead of reading "manna," read "manna and mannit," thereby benefiting and encouraging the consumer, without injuring any industry or merchant, and without depriving the Government of revenue. Respectfully submitted. FERDINAND COCORULLO, Importer. Endorsed by the Italian Chamber of Commerce in New York. G. R. SCHROEDER, Secretary. THE HARSHAW FULLER & GOODWIN CO., CLEVELAND, OHIO, ASK FOR CLASSIFICATION OF TARTRATE OF LIME. THE HARSHAW FULLER & GOODWIN Co., Cleveland, January 6, 1913. SIR: We respectfully ask that paragraph 6 be changed by adding the following: "Tartrate of lime" (after argols). The paragraph would then read: "Argols, or crude tartar, or wine lees crude, and tartrate of lime, 5 per cent ad valorem; tartars and lees crystals, or partly refined argols, containing not more than 90 per cent of bitartrate of potash, and tar- trate of soda or potassa, or Kocholle salts, 3 cents per pound; con- taining more than 90 per cent of bitartrate of potash, 4 cents per pound: cream of tartar and patent tartar, 5 cents per pound." "Tartrate of lime" is a by-product in the manufacture of cream of tartar, and is the raw material in the manufacture of tartaric acid; hence it bears the same relation to tartaric acid as argols to cream of tartar, and, in our opinion, should come under the same classification, and be subject to the same rate of duty. It has not been heretofore specifically classed. Respectfully, RALPH L. FULLER, Secretary. Hon. O. W. UNDERWOOD, Chairman Committee on Ways and Means, House of Representatives, Washington, D. G. SCHEDULE A. 89 PABAGRAPH 3 COMPOUNDS N. S. P. F. NITRATE OF AMMONIA. TESTIMONY OF MR. WILLIAM J. DIPPEL, REPRESENTING C. TEN- NENT SONS & CO., NEW YORK CITY. The witness was duly sworn by the chairman. Mr. DIPPEL. Mr. Chairman and members of the committee, I rep- resent the C. Tennent Sons & Co., of New York City. We are the selling agents of the Norwegian Hydroelectric Nitrogen Co. (Ltd.). of Norway, and the article w r hich I desire to bring to your attention is nitrate of ammonia. Under the present tariff it is not specially provided for, and consequently pays a duty under the blanket para- graph No. 3 of 25 per cent ad valorem. Under House bill 20182, paragraph 8, a duty of three-quarters of a cent per pound is pro- vided, which, of course, we think is a reasonable rate when the article is to be used for explosive purposes. Up to the present time it has been used merely for explosive purposes, in the manufacture of per- missible powders that is. for explosive purposes and in a limited way in the manufacture of nitrous oxide, which is commonly known as " laughing gas." Since the bill was drawn, however, a wonderful advance in the chemioal industries of the world has taken place through the syn- thetic process for the manufacture of nitric acid and ammonia, which has made it possible now to manufacture nitrate of ammonia at a price which will permit of its being utilized as a fertilizing material if it is admitted free of duty. It contains 35 per cent of nitrogen, which is equivalent to about 42 per cent of ammonia, and in this con- centrated form it is most valuable as a fertilizer. In fact, nitrogen in the form of nitrates is the most available of any form of nitrogen, as detailed in Farmers' Bulletin No. 44, on page 15, which bulletin was issued by the United States Department of Agriculture; and that bulletin Swells at some length on nitrogen, particularly on nitro- gen in the form of nitrates. In the Southern States, to show you how much of this fertilizing material is consumed in the country in the Southern States the con- sumption of fertilizers for 1911 was approximately 4,250,000 tons, of which about 106,000 tons was nitrogen, taken out at 100 per cent; that is to say, the amount of nitrate of soda would be equal to about 530,000 tons in the Southern States alone. Mr. William H. Bowker, of Boston, conected with the American Agricultural Chemical Co., one of the oldest and best-informed men in the fertilizer trade, in his publication, entitled " Plant Food- its Sources, Conservation, and Preparation," writes in reference to nitrogen : Nitrogen is so rare an article, the commercial sources of it being so few that he who will discover a cheap commercial process for obtaining it from the atmosphere and combining it in a form that will be servicable to crop pro- duction not only will be a great benefactor and inventor but will change the economy of living on this earth." This is just what the Norwegian Co. has done. That was written about two or three years ago, but they have done exactly what he refers to here. 90 TARIFF HEARINGS. PABAGBAPH 3 COMPOUNDS N. S. P. F. The CHAIRMAN. Is that cyanamide? Mr. DIPPEL. No ; it is not cyanamide. We have presented briefs, giving in detail full particulars, which we will be glad to have you incorporate into the record, and we do not think any lengthy argument is necessary to show the committee the great value which will accrue to the agricultural interests of the country if this article is placed on the free list. In order to make it obtainable to the American farmer all duty must be eliminated, otherwise it can not compete with nitrate of soda, sulphate of ammonia, and other ammoniates for fertilizing purposes which are at the present time on the free lists. Congress has always been in sympathy with the free importation of fertilizing materials, and, as far as I know, no duty is at this time imposed on an article used for this purpose. In the Payne- Aldrich bill of 1909 these fertilizing materials, namely, sulphate of ammonia, basic slag, cyanamide, andf lime nitro- gen were all placed on the free list, while prior to the passage of that act rates of duty of three-tenths of a cent a pound and $1 per ton and 25 per cent, respectively, prevailed. The CHAIRMAN. What is the amount of importation of this product ? Mr. DIPPEL. The importation now is limited, because it is only used for explosive purposes. You are speaking of nitrate of am- monia ? The CHAIRMAN. Yes. Is cyanamide on the free list now? Mr. DIPPEL. Cyanamide is now on the free list, and also nitrate of lime. In fact, there are no fertilizing materials that I know that are not on the free list. If nitrate of ammonia is placed on the free list, our company can import it to compete with nitrate of soda and other ammoniates ; and we feel that after knowing the facts and giving due consideration thereto you honorable committee will put it on an equal basis with these articles. 100 WILLIAM STREET, New York, January 16, 1913. Honorable COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. DEAR SIRS : We. the United States agents for the Norwegian Hydro-Electric Nitrogen Co. (Ltd.), do respectfully submit for your consideration the following in the contemplated revision of the tariff: Nitrate of ammonia. This material has been imported for several years for the purpose of being used in the manufacture of safety explosives and also in a limited way in the manufacture of nitrous oxide. Under paragraph 8 (H. R. 20182) a duty is proposed of three-quarters of a cent per pound, which, at the present time, is a reasonable rate of duty on the material when nitrate of ammonia is used for either of the aforesaid purposes. We do, however, respectfully claim that Nitrate of ammonia when used for fertilizing purposes should be placed on the free list for the following reasons : The development of the synthetical process for the manufacture of nitric acid has made it possible to manufacture nitrate of ammonia in Norway at a price so low that it can be used as a fertilizer. Nitrogen in the form of nitrates is the most valuable form in which nitrogen is obtainable for fertilizing purposes, and the ever-increasing demand in the United States, as evidenced by the increased importations of nitrate of soda, shows conclusively that the United States is not able to produce sufficient nitrogen for the requirements of the country. In the Southeastern States Virginia, North Carolina, South Car- olina, Georgia. Florida. Alabama. Tennessee, and Mississippi the consumption SCHEDULE A. 91 PAKAGBAPH 3 COMPOUNDS N. S. P. F. of fertilizers for the year 1910 were, according to the 1910 United States census advance reports, 3.761,972 ton?, a large percentage of which was in the form of nitrogen. The demand for nitrates from the Northeastern States and Pacific coast is also on the increase, and the consumption in the entire United States will undoubtedly continue to increase steadily as the yield for each acre of cultivated land in the United States, on the average, is only about one-half of the yield obtained from most European soils of equal quality. Consequently it is absolutely essential to secure fertilizer materials to be applied to the agri- cultural lands in the United States. The sources of supply in the United States are mainly from the waste substances of the slaughterhouses, such as dried blood and tankage, which, naturally, are limited. Nitrate of ammonia contains 35 per cent nitrogen and represents the most concentrated form of nitrogen as a nitrate. This material, on account of its highly concentrated form, will be a great benefit to the American farmers and consumers. The Norwegian Hydro-Electric Nitrogen Co. (Ltd.) can manufacture nitrate of ammonia to compete with nitrate of soda and other ammoniates, if it is ad- mitted free of duty. It is being used abroad in an experimental way, and the company informs us that they are prepared to manufacture 60,000 tons, of which 30.000 tons can be available for export to this side. We commend this to the attention of your honorable committee, and we feel that the benefits to be gained by the American farmer by the use of this article can not be overestimated. Yours, faithfully, C. TENNANT SONS & Co. OF NEW YORK. E. O. LEMON, Vice President. 100 WILLIAM STREET, New 1'orfc," January 29, 191S. Honorable COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. Subject: Nitrate of ammonia, which we think should now be placed upon the free list in the interest of the American agriculturalist. DEAR SIRS : We desire to supplement our brief of January 16 on this subject. Nitrogen, phosphoric acid, and potash are the constituents most likely to be deficient in soils or most quickly exhausted by the production and removal of crops. They are known as essential fertilizing constituents, and a value of com- mercial fertilizer is determined almost exclusively by the amount of form of the nitrogen, phosphoric acid, and potash which it contains. The Farmers' Bulletin, No. 44, page 12, United States Department of Agricul- ture, says about nitrogen, " Nitrogen is the most expensive of the three essential fertilizing elements. It exists in fertilizers in three distinct forms, viz, as an organic matter, as ammonia, and as nitrate." (1) Organic nitrogen. The most abundant supply of nitrogen occurs in or- ganic forms, and the most available source of organic nitrogen, from the stand- point of uniformity in composition, richness in the constituents, and availability are dried blood, dried meat, and concentrated tankage, which are produced in large quantities in slaughterhouses; also dried fish, refuse from fish oil and fish- canning establishments; also the residue of cotton seed after the oil has been ex- tracted. (2) Nitrogen a-s ammonia. Nitrogen of ammonia exists in commercial prod- ucts in the form of sulphate of ammonia ; it is more readily available than ni- trogen in organic forms. Ammonia nitrogen is derived to-day almost exclusively from sulphate of ammonia, the commercial product of which contains about 20 per cent of nitrogen ; this form of nitrogen is readily converted in the soil into nitrate. (3) Nitrogen as nitrate. Nitrogen as nitrate exists in commercial products to-day in the form of nitrate of soda, nitrate of potash, and nitrate of lime. These, like the ammonia compounds, are extremely soluble, and the nitrate con- tained in them is readily available as food for plants. The nitrogen in this form is directly and immediately available, no further change being necessary. The main source of nitrate nitrogen is nitrate of soda; this Chile saltpeter contains 15.5 per cent nitrogen. 92 TABIFF HEARINGS. PARAGRAPH 4^HYDRATE OF ALUMINA. Nitrate of lime has been placed on the market the last few years. It contains 13 per cent nitrogen, and is produced from synthetic nitric acid and limestone. The development of the synthetic nitric acid and ammonia industry has made it possible to manufacture nitrate of ammonia at a price low enough to permit its use in Europe, and it could also become available to the American farmer in the United States in competition with Chile saltpeter if put upon the free list. The consumption of fertilizers in the Southern States was in 1911 approxi- mately 4.250,000 tons, containing about 306.000 tons of nitrogen. For 1910 the consumption, according to the 1910 United States Census Advance Report, was 3,761,972 tons. The demand for nitrogen has been increasing very rapidly over the entire United States and must continue to gain as the demand for fertilizers increases ; for example, the consumption of sulphate of ammonia in the United States in the year 1900 was 36,011 tons, and for 1911, 230,743 tons. It is also a fact that the importation of nitrate of soda from Chile shows an enormous in- crease over the corresponding period. One of the greatest problems to be solved in the United States is how to in- crease the yield per acre of cultivated land under the various crops. To illus- trate : Germany : Bushels. Rye 29 Barley 38 Oats 51 Potatoes _ _ 158 United States: Bushels. Rye 16 Barley 21$ Oats 25 Potatoes _83 England obtains a little more per acre than Germany. The difference in the output between the United States and European countries lies in the lavish use of fertilizers in Europe. All of the different kinds of fertilizers are now on the free list nitrate of soda, nitrate of lime, sulphate of ammonia, tankage, fish scraps, etc. and we now respectfully petition that nitrate of ammonia be placed upon the free list, where, in all fairness, it seems to belong. As shown by the foregoing, the economic production of nitrate of ammonia is of recent origin ; the new industry has come into existence since the last tariff act. Nitrate of ammonia has been imported into the United States in limited quantities for the explosive industry. The argument here is exactly the same as with nitrate of soda now imported from Chile which enters into the fertilizer industries and is on the free list. Yours, truly, C. TEN N ANT SONS & Co. OF NEW YORK. WM. J. DIPPEL, Secretary. PARAGRAPH 4. Alumina, hydrate of, or refined bauxite, containing not more than sixty- four per centum of alumina, four-tenths of one cent per pound; contain- ing more than sixty-four per centum of alumina, six-tenths of one cent per pound. Alum, alum cake, patent alum, sulphate of alumina, and aluminous cake, containing not more than fifteen per centum of alumina and more than three-tenths of one per centum of iron oxide, one-fourth of one cent per pound; alum, alum cake, patent alum, sulphate of alumina, and aluminous cake, containing more than fifteen per centum of alumina, or not more than three- tenths of one per centum of iron oxide, three-eighths of one cent per pound. HYDRATE OF ALUMINA. STATEMENT OF AUSTIN M. PURVES, REPRESENTING THE PENNSYLVANIA SALT MANUFACTURING CO. Mr. PURVES. I have the honor to represent before you, gentlemen, the Pennsylvania Salt Manufacturing Co., in whose behalf I request your attention in connection with the proposed reduction of the duty on- Air. HARRISON (interposing). Please give your name. Mr. PURVES. A. M. Purves. Mr. LOXGWORTH. To what paragraph are you referring ? SCHEDULE A. 93 PABAGBAPH 4 HYDRATE OP ALUMINA. Mr. PURVES. Paragraph 4. The duty proposed under the act known as House bill No. 20182 is fixed at 15 per cent ad valorem. This duty we beg to submit is not sufficient to compensate for the difference in cost of manufacture between the United States and foreign countries and this principally on account of the element of labor entering into the proposition. The average of labor in Germany and England is a dollar per day. as compared with an average rate of $2.25 a day in this country. As the item of labor in the manufacture of alumina approximates 40 per cent of the total cost, it is seen at a glance that the proposed duty does not compensate for this one single element of cost. The duty now current under the Payne bill of four-tenths of a cent per pound on hydrate of alumina containing not more than 64 per cent of alumina, and six-tenths of a cent per pound when it con- tarns more than 64 per cent alumina, amounts to only 25 per cent ad valorem, and is insufficient to maintain the current rate of wages on this side. The industry has been made possible of maintenance in the United States through the large demand abroad for alumina products; but this has been met by increased production in England, Germany, and France, with the result that longing eyes are now being cast upon the great markets of the United States, made so attractive by the low rate of duty prevailing under our present tariff law. This im- portant industry, now aggregating a production of 100,000 tons per annum, demands, we believe, careful consideration in connection with the economic measure now before your honorable committee, and we beg to request your favorable attitude as applied to the current rates of duty, to wit, four-tenths of a cent per pound on hydrate and six-tenths of a cent on calcined as necessary to the integ- rity of the alumina industry in the United States. WASHINGTON, D. C., January 2, 1913. Hon. OSCAR W. UNDERWOOD, Chaii~man Committee on Ways and Means, Washington, D. C. DEAR SIR: I have the honor to represent before you the Pennsylvania Salt Manu- facturing Co., in whose behalf I respectfully request your attention in connection with the proposed reduction of duty on hydrate of alumina, etc. The duty proposed under the act known as House bill 20182 is fixed at 15 per cent ad valorem. This duty we beg to submit is not sufficient to compensate for the dif- ference in cost of manufacture between the United States and foreign countries, and this principally on account of the element of labor entering into the proposition. The average of wages in England and Germany is $1 per day, as compared with an average rate of $2.25 per day in this country. As the item of labor in the manufacture of alumina approximates 40 per cent of the total cost, it is seen at a glance that the pro- posed duty does not compensate for this one single element of cost. The duty now current under the Payne bill of four-tenths cent per pound on hydrate of alumina containing not more than 64 per cent of alumina and six-tenths cent per pound when it contains more than 64 per cent alumina amounts to only 25 per cent ad valorem and is insufficient to maintain the current rate of wages on this side. The industry has been made possible of maintenance in the United States through the large demand abroad for alumina products, but this has been met by increased pro- duction in England, Germany, and France, with the result that longing eyes are now being cast upon the great markets of the United States made so attractive by the low rate of duty prevailing under our present tariff law. This important industry now aggregating a production of 100,000 tons per annum demands, we believe, careful consideration, in connection with the economic measure now before your honorable committee, and we beg to request your favorable attitude as applied to the current rates of duty, to-wit, four-tenths cent per pound on hydrate 94 TARIFF HEARINGS. PARAGRAPH 4^-HYDRATE OF ALUMINA. and six-tenths cent on calcined, as necessary to the integrity of the alumina industry in the United States. We have the honor to be, very respectfully, PENNSYLVANIA SALT MANUFACTURING Co. AUSTIN M. PURVES, Vice President. BRIEF SUBMITTED BY THE MERRIMAC CHEMICAL CO., BOSTON, MASS. JANUARY, 1, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, Washington, D. G. DEAR SIR: On behalf of the Merrimac Chemical Co., I beg to sub- mit the following brief for the consideration of your committee in connection with its investigations regarding tariff: HYDRATE OF ALUMINA, ETC. Paragraph 4 of the act of 1909 provides as follows: "Alumina, hydrate of, or refined bauxite, containing not more than sixty-four per centum of alumina, four-tenths of one cent per pound ; containing more than sixty-four per centum of alumina, six-tenths of one cent per pound. Alum, alum cake, patent alum, sulphate of alumina, and aluminous cake, containing not more than fifteen per centum of alumina and more than three-tenths of one per centum of iron oxide, one-fourth of one cent per pound ; alum, alum cake, patent alum, sulphate of alumina, and aluminous cake, containing more than fifteen per centum of alumina, or not more than three-tenths of one per centum of iron oxide, three-eighths of one cent per pound." The rates and the classifications as provided in the above paragraph wo believe should be maintained. Hydrate of alumina is produced from bauxite. It is essentially refined bauxite in that, if the impurities are removed from the crude bauxite, hydrate of alumina is the resultant product. It was origi- nally entered into this country free of duty under the head of "refined bauxite," but it was subsequently made dutiable. Hydrate of alumina contains commercially' about 64 per cent of alumina and about 36 per cent of water and is used for two distinct purposes: (1) For the production of salts of alumina by dissolving it in acids; and (2) for the production of aluminum. When it is used to produce salts of alumina, the water content is not objectionable, but. when used for the production of aluminum, it is necessary that it should first bo calcined in order to drive off the water. As hydrate of alumina may or may not contain water, according as it is to be used, the distinction for the purpose of assessing a duty is drawn at 64 per cent alumina content. The experience of the Merrimac Chemical Co. has been somewhat as follows: In ls()4 we secured from Russia, at much trouble and expense, a process for the manufacture of hydrate of alumina. In the following year we erected a plant and started operation; but shortly thereafter a duty of 81 a ton was placed upon bauxite, with the result that our profits from the manufacture of hydrate of alumina were so reduced that we were unable to enlarge our plant in any way whatsoever. SCHEDULE A. 95 PARAGRAPH 4 HYDRATE OF ALUMINA. If the duty on hydrate of alumina is to be reduced, as contemplated in the bill drafted last year and known as "H. K. 20182," it will be impossible for our manufacturers to compete with those manufac- turing abroad. SULPHATE OF ALUMINA, ALUM, ETC. The distinction in the amount of iron oxide content, in regard to alum, etc., is made *f or the purposes of separating the high-cost from the low-cost alums. Alums containing more than -^ per cent of iron oxide are presumably made by dissolving bauxite in acid and are cheaper than those containing less than ^ per cent of iron oxide, which are presumably made from hydrate of alumina. The further distinction in regard to the alumina content in the alums is made for the following reasons: It is possible to concentrate the low-grade alums by driving off all the water and thereby greatly enhance the value. In other words, the low-grade alums, irrespective of the iron- oxide content, may be greatly ei hinced by concentration, and, on the oth T hand, those alums with a low percentage of iron oxide are more valuable than those with a high percentage of iron oxide, irre- spective of concentration. For these reasons we believe that the classifications as set forth in paragraph 4 of the present tariff act are advisable and should be maintained. Alum, alum cake, sulphate of alumina, etc., from 1898 until August 5, 1909, carried a specific duty of one-half cent per pound. During this period the importations were only approximately 2,500,000 pounds, with an annual revenue of from $10,000 to $13,000. By the provisions of the tariff act of 1909 the duty was changed, so that alum, alum cake, etc., containing not more than 15 per cent of alu- mina and more than ^ per cent of iron oxide, carried a duty of one- fourth cent per pound; while alum, alum cake, etc., containing more than 15 per cent of alumina, or not more than -fo per cent of iron oxide, carry a duty of three-eighths cent per pound. The imports for 1911 show an increase of approximately 1,250,000 pounds, or in excess of 50 per cent. This increase in importation would undoubtedly have been much larger but for the conditions existing in the industry in this country. For the past five or six years competition has been so active in these various grades of alum that the prices have been reduced to a point where there is not only no profit but an actual loss to the factories which are not most favorably located; and, while business can be carried on in this way for a number of years by strong concerns, it is not likely to be continued indefinitely. Eventually, the natural laws must control, and the manufacturers will either abandon or restrict their output until business shows a normal profit. With the duty as at present any increase in price would undoubtedly enormously increase the proportion of importations. This increase of importa- tions is not going to affect manufacturers of the country equitably, owing to the fact that the value of alum cake is so low that the cost of transportation or freight rates form an effectual protection for the manufacturer located in the interior of the country. If the tariff is fixed at a rate purposely intended to stimulate importations of the 96 TARIFF HEARINGS. PARAGRAPH 4 HYDRATE OF ALUMINA. various grades of alum which are consumed in this country, it will simply mean the annihilation of that part of the industry which is located along the Atlantic seaboard, while that part of the industry which is located hi the interior will not be affected materially, if at all, as the freight rates will furnish ample protection. Furthermore, in alum as in many other articles, America is con- sidered the dumping ground for surplus product abroad. We there- fore feel that the reduction of duty brought about by the Payne bill, which reduction amounted to 100 per cent of the present tariff on one grade and 33J per cent on the other grade, was indeed radical, and a further reduction should not be made. Conclusion. In conclusion, it is submitted that the rates and classifications contained in paragraph 4 of the act of 1909 should be maintained. SULPHURIC ACIDS. Paragraph 687 of the act of 1909 provides as follows: "Sulphuric acid which at the temperature of sixty degrees Fahren- heit does not exceed the specific gravity of one and three hundred and eighty one-thousandths, for use in manufacturing superphosphate of lime or artificial manures of any kind, or for any agricultural pur- poses: Provided, That upon all sulphuric acid imported from any country, whether independent or a dependency, which imposes a duty upon sulphuric acid imported into such country from the United States, there shall be levied and collected a duty of one-fourth of one cent per pound." Paragraph 1 of the act of 1909 provides that * * * "Sulphuric acid or oil of vitriol not specially provided for in this section, one- fourth of one cent per pound." Paragraph 77 of the proposed bill known as "H. R. 20182" places sulphuric acid and oil of vitriol on the free list without making any proviso. We believe that the proviso contained in paragraph 687, as above set forth, should be retained in any revision of the tariff act. This vitally affects the manufacturers along the Canadian border line. If the American market is to be thrown open to Canadian manufac- turers, the American manufacturers should have equal opportunities in the Canadian market. This can only be effected by some such provision in our tariff law as above set forth. BAUXITE. Under section 90 of the act of 1909, bauxite is assessed a duty of SI a ton, the language of the act being as follows: " Bauxite, or beauxite. crude, not refined or otherwise advanced in condition from its natural state, one dollar per ton." * * * Bauxite is distinctly a raw material, and it is our contention that it should be placed on the ''free list." There are two distinct kinds of bauxite, one of the character of the American bauxite, commonly known as "white" bauxite, and con- taining less than 10 per cent of iron oxide, and the other known as "red" bauxite, containing more than 10 per cent of iron oxide, and mined almost exclusively in foreign countries, particularly France. SCHEDULE A. 97 PARAGRAPH 4 HYDRATE OP ALUMINA. The "white/' or American, bauxite contains 47 per cent to 57 per cent alumina, iron oxide not exceeding 10 per cent, and from 6 per cent to 20 per cent of silica. The better qualities of this bauxite are used in the manufacture of sulphate of alumina, in the manufacture of which a high percentage or silica is not objectionable, while a high percentage or iron is very detrimental. The ordinary "red" bauxite contains 58 per cent to 60 per cent of alumina, 18 per cent to 22 per cent iron oxide, and 2 per cent to 4 per cent silica. This "red bauxite is used principally in the pro- duction of alumina, which is the principal source 01 aluminum used in the manufacture of the metal aluminum. In the refining process of this "red" bauxite the high percentage of iron is not objectionable, while a high percentage of silica content is almost fatal to economical manufacture. Thus it is apparent that the American, or "white," bauxite and the "red" bauxite, which constitutes the greater portion of the foreign importation being distinct in their character and pur- pose, are not in serious competition with each other. An effort was made at the last tariff revision in 1908-9 to have the duty on bauxite increased from $1 a ton to $2 a ton on the ground that the American mines could not compete with the foreign mines. We do not believe that importations of bauxite interfere in the slightest with our American mines, nor do we believe that the output of our American mines would be affected if bauxite were placed on the free list. The following are our reasons for this opinion: (1) As already stated, the "red" bauxite, which constitutes the bulk of the foreign importation, is used for different purposes than the "white" bauxite, which is mined in this country. The only important exception to this statement that we know of is the Arkansas bauxite used by the Aluminum Co. of America in their works near St. Louis. The Arkansas mines in question are, we understand, owned and operated by the Aluminum Co. of America, and it is most im- probable that their operations would be in the least curtailed by the removal of the duty because the inland freight on the imported ore would be prohibitive. (2) Our American mines have shown a steadily increasing output, and there is no indication that the development of these mines has been or is likely to be retarded by the importation of foreign bauxite. According to the Mineral Industry for 1911, which is the most accurate and official estimate of mineral productions published in the United States, there were produced in the United States in 1911 155,618 tons of bauxite. This is somewhat larger than the output in 1910 and 1909, and three times the output in 1908. In 1911 there were imported into this country 43,222 tons of bauxite, but the major portion of this importation was "red" bauxite, which, as already explained, is not really in conflict with our American ore. It is submitted that when due consideration is given to the fact that the American output of bauxite has tripled since 1908, and when it is considered how small has been the importation of "white" bauxite under the present duty, it will be apparent that our American producers of bauxite do not require the protection of this $1 duty. 78959 VOL 113 1 98 TARIFF HEARINGS. PARAGRAPH 5 AMMONIA. Conclusion. To place bauxite on the free list would surely stimu- late the aluminum industry and would not, in our judgment, seri- ously affect our American mine owners, because, as already explained, the American markets for the imported and domestic ore are to a large extent separate and distinct. Furthermore, should it be deemed advisable to maintain a duty on our American bauxite, a distinction may be made between the "red" and the "white" bauxite, and the duty removed on the former. This may be effected by providing that bauxite containing in excess of 10 per cent of iron (Fe^) shall be entered free, and bauxite containing less than 10 per cent iron shall pay a duty of $1 a ton. Respectfully, yours, S. W. WILDER, President. PARAGRAPH 5. Ammonia, carbonate of, one and one-half cents per pound; muriate of, or sal ammoniac, three-fourths of one cent per pound; liquid anhydrous, five cents per pound. AMMONIA. BRIEF OF THE MICHIGAN AMMONIA WORKS. DETROIT, MICH., January 2, 1918. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: As manufacturers of aqua ammonia and carbonate ammonia we beg to submit our most earnest protest against a pos- sible reduction in the duties on these two articles. Aqua ammonia. The gradual increasing cost of the raw material, the continuous advances in labor in this country against cheap labor and cheap material of foreign countries, has handicapped the manu- facture of this article considerably. The manufacture requires an expensive plant, careful and conscientious attention, and only a large production permits the American manufacturer to operate on a small margin if the duty will at least remain at its present state. A standard of a high-grade article must be maintained on account of the efficiency expected from aqua ammonia in its ultimate appli- cation. A reduction of duty would not result in any advantages to the individual at large. Carbonate ammonia. The manufacture of this article requires an expensive plant and very careful attention to the process. Its consumption is confined practically in the baking of sweet baked goods by the bakers in this country and is limited to a compara- tively small consumption. Largely on account of the limited con- sumption we can operate this plant a few months in the year only. The foreign manufacturers have considerable advantages over us. Their cost of labor is about half of ours. Their cost of raw material is much less than ours. Their larger production gives them the advantage over us by lessening their total cost. They are in posi- tion to maintain profitable prices at home and use the foreign markets SCHEDULE A. 99 PARAGRAPH 6 ARGOLS. to dispose of their surplus production at a low price and sometimes below cost. High cost of labor and material together with the increased cost of manufacture on account of the limited home consumption bj the American market make it absolutely necessary to at least retain the present duty in order to permit the domestic manufacturer to con- tinue the production of this article. A possible reduction of duty on this product would in no way benefit the ultimate consumer. Less than a pound of carbonate ammonia is used to a barrel of flour, yielding about 400 pounds of sweet baked goods. The carbonate ammonia is sold at 8 to 9 cents per pound and fractionally higher for small quantities. If therefore the present tariff on these products would be decreased it would eventually involve the American manufacturer into a very serious loss, and we respectfully and urgently ask you not to decrease the present duties of these articles. Very respectfully, yours, MICHIGAN AMMONIA WORKS, GEORGE Osius, Secretary and Treasurer. PARAGRAPH 6. Argols or crude tartar or wine lees crude, five per centum ad valorem ; tartars and lees crystals, or partly refined argols, containing not more than ninety per centum of bitartrate of potash, and tartrate of soda or potassa, or Bochelle salts, three cents per pound; containing more than ninety per centum of bitar- trate of potash, four cents per pound; cream of tartar and patent tartar, five cents per pound. For cream tartar, etc., see also Charles Pfizer & Co. (Inc.), page 44; for argols, see also Harshaw Fuller & Goodwin Co., page 45. ARGOLS. STATEMENT SUBMITTED BY CALIFORNIA FIRMS REGARD- ING DUTY ON CREAM OF TARTAR. SAN FRANCISCO, January 6, 1913. To the honorable REPRESENTATIVES IN CONGRESS FOR THE STATE OF CALIFORNIA, House of Representatives, Washington, D. C. GENTLEMEN : We urgently commend to your attention the attached communications to the Hon. Burton Harrison, chairman of a sub- committee of the Committee on Ways and Means of the House, relating to H. R. 20182. No doubt you will agree with us that tariff provisions should not be enacted which, at best, can procure but a very slight reduction in cost for the ultimate consumer by destroying a domestic manufac- turing industry, and with it the market for a domestic raw material, with consequent loss to American labor interested in both. We submit this additional thought: That the principal article affected by the reduction in section 9 of said bill, cream of tartar, is mainly used in the manufacture of baking powder; and that the resulting reduction in the market price of one of its ingredients will 100 TARIFF HEAETWGS. PABAGBAFH 6 ABOOLS. not be sufficient to affect the retail prices of this article, thus favoring only its manufacturers and distributers. Respectfully submitted. CALIFORNIA WINE ASSOCIATION. GUNDLACH-BUNDSCHU WlNE Co. (INC.). ITALIAN Swiss COLONY. NAPA & SONOMA WINE Co. LACHMAN & JACOBI. WETMORE-BOWEN. ARTHUR LACHMAN & Co. THE ROSENBLATT Co. B. ARNHOLD & Co. AMERICAN CREAM TARTAR Co. GRAPE GROWERS' ASSOCIATION OF CALIFORNIA, San Francisco, Col., January 6, 1913. Hon. BURTON HARRISON, Chairman, Subcommittee of the Committee on Ways and Means, House of Representatives, Washington, D. C. DEAR SIR: House Bill No. 20182 increases the duty on argols (crude tartar or wine lees), apparently favoring the American wine industry, of which argols are a by- product. The marketing of this product in California, where the industry is mainly located, has been made possible in recent years only through the establishment on this coast of a refining plant, producing therefrom cream of tartar, tartaric acid, and Rochelle salts; and on these the same bill makes a 50 per cent reduction. See sections 9 and 1. We have reason to believe that such an increase in duty on its raw material and a reduction on the finished product will seriously cripple, if not ruin, this local industry; thus destroying instead of improving our market for argols. Aside from the freight handicap in marketing this by-product on the Atlantic coast, it seems likely that this tariff will destroy even that meager opportunity by opening the way for foreign countries to supply the entire American requirements of cream of tartar and the other products from wine lees. A tariff giving us a more remunerative price for argols would, of course, be welcome; but we protest against a change that tends to kill the industry which is the only outlet for this product. Respectfully submitted. E. M. SHEEHAN, President. [Telegram.] SAN FRANCISCO, January 6, 1913. Hon. BURTON HARRISON, Chairman Subcommittee of the Committee on Ways and Means, House of Representatives, Washington, D. C. DEAR SIR: As grape growers and wine manufacturers, we are urged by mutual interests to join in and earnestly indorse the representations made to your committee, under even date, by the Grape Growers' Association of California in reference to House bill No. 20182. ITALIAN-SWISS COLONY. CALIFORNIA WINE ASSOCIATION. GUNDLACH-BUNDSCHU WlNE Co. (INC.). ARTHUR LACHMAN Co. NAPA & SONOMA WINE Co. LACHMAN & JACOBI. WETMORE-BOWEN Co. THE ROSENBLATT Co. B. ARNHOLD Co. SCHEDULE A. 101 PARAGRAPH 6 ARQOLS. MEMORIAL OF THE ITALIAN CHAMBER OF COMMEECE, 1TEW YORK CITY. Hon. O. W. UNDERWOOD, Chairman of the Committee on Ways and Means, Washington, D. 0. HONORABLE SIR: The Italian Chamber of Commerce in New York, an organization representing the commercial interests of a community of over 600,000 consumers and dealers in this city, and of a still greater number distributed in various States in the Union reached through this market, desire to submit to this honorable committee the follow- ing recommendations concerning the revisions of Schedule A of the tariff act of August 5, 1909, now under consideration. To make its position clear as to the interests it represents, this organization states at the outset that while it was established for the promotion of reciprocal trade relations between Italy and this country, where its members have made their permanent home, the scope of the interests it represents is not confined to imported articles, but extends, by reason of the correlated necessities of trade, to a wider field, includ- ing many commodities of domestic productions which enter their business. This chamber is an exponent of commercial interests with which Italo-American communities living in this country have been identi- fied, irrespective of the origin of the articles exchanged, as well as of the consumers whose needs they supply. The unbiased character of tne motives bv which it is moved to submit recommendations respecting the revision of the tariff thus appears manifest. In recommending the changes in the rates of duties herein explained this chamber has not been unmindful of the many issues implied in tariff legislation, of which some of the most important are: The neces- sity of raising revenue; the offsetting of the difference in the cost of production of an article between this and foreign countries; the relieving, as much as possible, from taxation of articles necessary to the livelihood and comfort of the people; the lightening of fiscal burdens on raw materials necessary to American industries; the interests of the ultimate consumers in the case of products of industry necessary to manufacturers of other products; and is aware of the difficult task of reconciling these various and often contrasting issues so that a tarn? may result of which, rather than the fiscal side, its function in relation to the economic life of the Nation may stand out conspicuously. This chamber believes that the changes of rates hereby recom- mended are not only La accord with the interests it vouches, but also harmonize with the fundamental principles above stated, upon which the present revision is conducted, and trusts that they will receive due consideration from this committee. Argols and wine lees. This raw material, necessary to American industry, is not produced, save in irrelevant quantity, in the United States and is imported from the countries of southern Europe at the rate annually of about 28,250,000 pounds. Argols are a by- product of the wine industry and the only visible source of raw material for the production of cream of tartar, tartaric acid, and 102 TABIFF HEAEINGS. PARAGRAPH 6 ARGOLS. Rochelle salts, tartaric products not having been obtained yet by any synthetic process. Many are the uses of these finished products: Tartaric acid (of which about 3,000,000 pounds are yearly manufactured in this coun- try) in dyeing and printing of fabrics, in the preparation of medicinal compounds, and as a substitute of citric acid in the manufacture of beverages ; cream of tartar, in medicines and food products, especially in the form of baking powders, in the preparation of which probably more than one-half of the whole output (estimated yearly at about 25,000,000 pounds) is absorbed; and Rochelle salts, used pharma- ceutically. Baking powders are a household necessity. There is practically no family, however modest in circumstances, in whose grocery bill baking powders are not an item. It is important, from the standpoint of health, that the use of bak- ing powders made from cream of tartar be encouraged in preference to less healthful preparations of a similar denomination, such as the phosphate and alum baking powders. To this end it is necessary that the cost of baking powders should not increase, as a higher price would be felt widely, and in some measure add to the already nigh cost of living. If the purpose of the present tariff revision is, as this chamber understands, to relieve raw materials bearing upon the necessities of life from fiscal burdens and to bring about by fiscal legislation such conditions as will promote a reduction in, or at least prevent an increase of, the cost of living, then the advisability of leaving unchanged the present rate of 5 per cent on argols, or crude tartar, is manifest, if they can not be returned, as in former tariffs, to the free list; while on partly refined argols, containing no more than 90 per cent of bitartrate ol potash, a rate of 10 per cent, and, on those containing more than 90 per cent, a rate of 2 cents per pound would appear fair for revenue purposes. On cream of tartar and tartaric acid this chamber recommends, in lieu of the present high duties, the rates, respectively, of 2 and 3 cents per pound, which appear sufficient for reasonable protection to the manufacturer, without leaving the consumers entirely at the discretion of the latter. Citrate of lime. For like reasons citrate of lime should be main- tained on the free list. It is a raw material, imported chiefly from Sicily (5,219,544 pounds in fiscal year 1911), used in the manufacture of citric acid, of which over 2,000,000 pounds are yearly produced in the United States. Citric acid enters largely into the preparation of pharmaceutical compounds and of temperance beverages, so healthful in our climate. The importations of citrate of lime have shown during the last years a tendency to increase, owing to the greater demand of citric acid for the above-stated purpose. As it is an article not produced in the United States, and as its market in the country of production has been organized to eliminate the fluctuations in prices formerly ruling in this raw material, its continuation on the free list, while not prejudicial to any American industry, would obviate increase in the price of citric acid and allied products, otherwise unavoidable. SCHEDULE A. 103 PARAGRAPH 6 ARGOLS. Because of the fact that few houses control the manufacture of citric acid in this country protection of the interests of consumers suggests the advisability of a reduction from the present prohibitive rate to one affording better guaranties against monopoly. Lemon juice. In line with the arguments for free citrate of lime are those for free lemon juice, an article not produced in this country, used in the preparation of medicinal compounds and of cooling drinlts, the consumption of which should be encouraged in the interest of public healtn, against that of poor and often noxious substitutes. With a high protective tariff on lemons, depriving the consumer of small means of this healthful commodity, some avenue should be left open to him for getting, during the hot days of summer, the refreshing, thirst-quenching benefits of its juice, while by encouraging the utiliza- tion of culls in the manufacture of juice and eliminating them from the fruit market the latter is benefited also to the advantage of domestic production. Boracic acid and borax. The maintaining on boracic acid of a duty other than for revenue purposes is hardly understandable, considering the natural advantages possessed by this country for its production, averaging yearly about 3,000 tons against a little over 155 tons imported (during the fiscal year 1911). The markedly declining tendency in the importations of this article, used chiefly in the manufacture of glass and as an antiseptic, and at present protected with a duty of 3 cents per pound, equivalent to a protection of about 80 per cent, shows that the reduction of the duty to a more reasonable rate is advisable, and this chamber indorses the proposed rate of three-fourths of 1 cent per pound contained in H. K. 20182, as well as the reduction of the present rate of 2 cents per pound to one-eighth of 1 cent per pound on refined borax. The production of borax in the United States is almost entirely controlled by one firm, and amounts annually to about 20,000 tons. It is largely used for cleansing purposes, in the manufacture of soap, and in that of glass and earthenware. Crude borate, of which this country produced 41,434 tons in 1909, should be placed on the free list. Licorice root and extract. Licorice root, a raw material not pro- duced in this country and imported chiefly from southern Europe and Asia Minor to the amount of $2,060,561 in fiscal year 1911, is used in the preparation of licorice extract, and the latter is utilized in flavoring tobacco and for medicinal purposes. It should be main- tained on the free list as a necessary material to industrial use, identi- fied with the prosperity of an important American industry, and in the interest of consumption of American tobacco. A specific duty equivalent to 15 per cent on licorice extract would be preferable to one ad valorem, owing to the difficulty of ascertain- ing the market price of said commodity in the countries of origin. Sumac and tannic extracts. The removal of duties on hides and undressed skins, accomplished by the tariff act of 1909, aimed at counterbalancing the increase in the cost of raw materials, due to the fact that production does not keep apace with consumption and the consequent reaction on the cost or leather manufacturers, which has to be paid by the ultimate consumer. 104 TARIFF HEARINGS. PARAGRAPH 6 ARQOLS. Tanning materials being an important factor in determining the cost of leather, it is evident that tney should be relieved as much as possible from fiscal burdens. The scarcity in the domestic supply of tanning materials will make itself felt in the near future, as the deforestation of the hemlock, oak, and chestnut forests, from which are derived most of the materials now employed in the tannery, proceeds with alarming rapidity. The importation of tanning materials should therefore be encour- aged in the interest of the American tanning industry, and among these is ground sumac, used in the tanning of upper leather. The duty on ground sumac should be lowered from the present rate of three-tenths of 1 cent per pound, equivalent to about 16 per cent ad valorem, to one-fifth or 1 cent per pound, equivalent to about 10 per cent ad valorem; and the importation or tannic extracts should be encouraged by reason of economy in freight, labor, and waste material in comparison to the raw materials, with tangible reductions in the duties. On sumac extract, instead of the present rate of five-eighths of 1 cent per pound, the duty should be fixed at three-eighths of 1 cent, and on chestnut extract reduced from the present rate of 15 per cent to three-eighths of 1 cent per pound. Although some sumac and sumac extract are produced in the United States, namely, in Virginia, Sicily supplies most of this com- modity, Sicilian sumac yielding the lightest and most esteemed ex- tract, used not only in the tanning of leather but also in the textile industry. Oils of lemon, orange, and bergamot. These essential oils are not produced in the United States, are supplied almost entirely by Sicily (in fiscal year 1911, lemon, pounds, 430,768, valued $323,552; orange, pounds, 73,804, valued $100,115; and bergamot, pounds, 65,199, valued $222,225), are used chiefly in perfumery and, save bergamot, as flavorings in beverages, confectionery, and pharmaceutical preparations. They are at present on the free list, where they have been for many years, with the exception of orange oil, upon which at the last tariff revision a duty at first of $1 per pound, and then, upon protest, of 25 per cent was assessed. The imposition of a duty caused a decrease in the importations of orange oil from 92,077 pounds hi fiscal year 1905 to 73,804 pounds in fiscal year 1911. Bergamot is not grown in the United States and no manufacture either of lemon or orange oil exists or can be established in California on account of the high cost of labor, which does not admit of the extraction of the essential oils by hand, while no efficient machinery has yet been devised that will render the extraction of these oils industrially possible. Protection can not be a valid argument in regard to these articles, because, as no domestic production exists, there is nothing to protect. Identified as they are with the success of important lines of American industry (perfumery, beverages, confectionery, etc.), lemon and ber- gamot oil should be continued on the free list and orange oil should be returned to it. If, however, for revenue purposes, a duty should be deemed una- voidable, which in the end would have to be paid by the consumer, SCHEDULE A. 105 PARAGRAPH 6 ARGOLS. this chamber recommends that, instead of an ad valorem, as pro- posed in H. R. 20182, a specific rate, equivalent to the proposed 20 per cent rate ad valorem, be charged, in order to avoid the difficulty of assessment and the consequent fines to importers, through no fault of their own, which are apt to be encountered by an ad valorem rate. Olive oil. Olive oil, wnich only a score of years ago was imported in comparatively small amount, nas become of late years an impor- tant article of food, owing to the demand created by tne notable num- ber of immigrants from southern Europe, in whose diet this article is an important item, as well as to the extension of its use among natives. In fact, while the importations of edible olive oil in 1892 amounted to only 706,486 gallons, they reached in 1911 a total of 4,405,827 gal- lons. From the above figures, showing the remarkable progress in its consumption, the classification of ouve oil under Scheaule A (chemi- cals, etc.), appears rather out of date. Edible olive oil would be more properly classified under Schedule G (agricultural products), because olive oil destined to industrial use represents now the smaller amount of importations (in fiscal year 1911, 578,477 gallons, against 4,405,827 gallons of edible olive oil). Olive oil, for many of our people, even of small means, who have come from southern Europe, wnere this food practically takes the place of butter in the diet of the people, is an article of prime neces- sity, and its beneficial use, either medicinally or as an article of food, is becoming more recognized also among our native population. The importation of olive ofl has steadily and notably increased during the last two decades. The olive-oil industry in California is still in its infancy. It has had a checkered career and passed through periods of inflation, when planting was general in sections where the climate and localities were altogether unsuitabls, so that hi many places planting had to be stopped and many of the trees previously planted had to be rooted out. The planting of olive trees in unsuitable conditions, inexperience in the cultural methods and in the best ways of preparing the oil, the fact that the olive tree required many years before bearing full crops, the scarcity of labor existing in that State, while the gathering of the olives is an operation that has to be performed by hand, aJj these facts show that the conditions of olive culture in California are not such as to enable it to supply this commodity at a reasonable cost in any quantity adequate to the requirements of consumption. Although the production of olive oil in California is stated to have been of 920,000 gallons in 1911, or a little more than the increase (703,617 gallons) shown by the consumption of imported olive oil in fiscal year 1911, against 1910, its wholesale cost, which averages about $2.40 per gallon, against $1.90 for the imported, puts it beyond the reach of the consumers who mostly need this commodity. If the price of olive oil is not reasonable and not easily accessible to consumers of small means, who, with normal crops, can obtain im- ported olive oil of good quality at $1.75 per gallon, other vegetable oils of less cost and lower value regarding both health and nourish- ing qualities will replace the use of olive oil among the less fortunate classes. 106 TAKIPF HEAB12STGS. PARAGRAPH 6 ABGOLS. For a number of years the people of this country have had to pay exorbitant duties on olive oil simply for the protection of a very small number of growers, who, notwithstanding this heavy protection, have not materially increased the output or made a success of olive-oil production; and, as judging from the experience of the past and of the conditions relating to this production in California there is not the slightest hope that California will ever be able to supply the de- mand of this article at a logical cost, it is evident how unwise and unjust would be the continuation of such high rates as are assessed at present on olive oil, especially in view of the increased cost of this commodity experienced during the last few years, owing to shortage of production in the countries from whence it is imported. In the readjustment of the duty on olive oil, the criterion that this is a necessary article of food for a large number of our population should first of all be borne in mind, and that as such it should not be burdened with a heavy duty. Another important condition is that the duty should be so framed as to encourage the use of olive oil in the original package in which it is shipped to this country, so that the consumer may have a better guaranty than is now possible, even taking into account the beneficial effects of the enactment of the pure-food law, which certainly pre- vents the importation and interstate commerce of adulterated oil, but even in those States where pure-food regulations exist does not prevent the reduction of an olive oil of high quality with one of low quality, or the mixture of olive oil with other vegetable oils, pro ;ded they are sold as compounds, while often (for instance, in the restaur- ants, where the oil is not supplied to the consumer in an original pack- age) the supply of a mixed oil, ostensibly as olive or salad oil, but without any statement as to the nature of the product, is not pre- vented by any law. This chamber, in order to submit to this honorable committee an unbiased report on the subject of the revision of the duties on olive oil, heard, through its tariff committee, at a special hearing, many of the most important distributors of olive oil in this country, who an- swered a set of specific questions. From the replies received the fol] owing conclusions have been arrived at: (a) That the present duties on olive oil are exorbitant and ought to be reduced. (6) That a reduction of them will not affect unfavorably any Ameri- can industry. (c) That no ad valorem rates should be assessed on olive oil. (d) That the majority of distributors are in favor of a uniform rate of specific duty on olive oil, irrespective of the kind or size of package In which it is imported; i. e., a uniform rate per gallon for ooth oil imported in bulk and oil imported in bottles, jars, tins, etc. (e) That the majority are in favor of a uniform rate of 25 cents per gallon. Sufficient has already been stated on paragraphs a and 6 to render superfluous further argument on the issues implied in said para- graphs. Unanimous is the consensus of opinion among the distributors heard against the assessment of any ad valorem rate as proposed for SCHEDULE A. 107 PARAGRAPH 6 ARGOLS. ofl in bulk in H. R. 20182, because of the difficulty of ascertaining market values in the countries from whence this commodity is de- rived, the market value differing considerably according to grades and other factors not easily ascertainable in markets which are not always in a high developed condition and often subject to fluctua- tions, and also because of the objectionable feature of fines, necessa- rily implied in such form of duty assessment, which often makes the importer the scapegoat of unavoidable discrepancies, through no fault of his. The reason why a uniform rate both on oil in bulk and in cases is recommended is one of equitv and of the necessity of avoiding the unjustifiable discrimination that the present system of duty mam- tains between oil in bulk and oil in bottles, jars, tins, etc., irrespective of Quality and to the disadvantage of the oil imported in the smaller packages. Olive oil in bottles or other small packages is already in the matter of cost per gallon, owing to the higher cost of its packing, higher freight, and of the duty of 40 per cent on the containers in the case of oil in bottles, at a disadvantage in comparison with oil in bulk, and should not be made to bear, as at present, the addition of a higher fiscal burden. The difference of cost of olive oil, of identical quality and brand, by reason of the different package in which it is put up, reaches in some cases as much as 43 cents, and is never below 15 cents per gal- lon, to the disadvantage of the oil imported in tins. To be more exact, this difference is: For cases containing 2 tins of 6 gallons each, equal to 15 cents per gallon; for cases containing 12 one-gallon tins, equal to 18 cents per gallon; for cases containing 24 one-half gallon tins, equal to 23 cents per gallon; for cases containing 48 quart tins, equal to 28 cents; and for cases containing 96 pint tins, equal to 43 cents per gallon. In the case of bottles, which are subject to a duty of 40 per cent ad valorem, this difference in cost is even more striking, and both encourage unfair competition to the advantage of the oil in bulk, and also a loss to the revenue. The discrimination against cased oil by the present tariff is not, however, the only argument for which a uniform rate is recommended on olive oil, irrespective of how it is packed. A still more valid argument is that olive oil imported in tins or bottles gives a better guarantee, practically a Government guarantee, to the consumer not only of the purity, but also of the quality, of the oil imported, such as only the original imported package can assure, encouraging the consumption of oil of better quality, which is essen- tial to the promotion of the use of this healthful commodity. The present tariff indirectly favors the illegitimate competition of adulterated or mixed oils, in the preparation of which is used the largest part of the olive oil imported in bulk, chiefly represented by oil of strong flavor and odor, fit only for blending. A uniform rate is therefore respectfully recommended by this chamber in the interest of the consumer, of revenue, of equity, and of hygiene, and this chamber recommends, further, that the rate be fixed at 25 cents per gallon, which is ample protection to domestic 108 TABIFP HEABINGS. PARAGRAPH &-ARGOLS. production of a commodity largely used and which, for a great num- ber of our population, is one of prime necessity. Containers i. e., bottles or jugs at present subject to a duty of 40 per cent, should be assessed with a specific and not with an ad valorem rate and exempted from duty when bearing the brand or the name of the manufacturer in such manner that it can not be removed, thus rendering the containers unfit for further commercial use. Olive oil for mechanical or manufacturing purposes, rendered unfit for use as food by such means as shall be satisfactory to the Secretary of the Treasury and under such regulations as he shall prescribe, should be continued on the free list, where it has been under previous tariffs, this being a raw material required for the textile mills (which used in 1908, according to T. S. Todd, 1,610,000 pounds of castile soap manufactured from olive oil) as well as for the soap and leather manufacturers. A duty on such, however small, would necessarily react in an increase in tne cost of the products of said manufacturers, which enter largely into the consumption of the masses. Castile soap. Upon this commodity, which is especially popular among consumers, originating from countries where olive oil is pro- duced, this article being manufactured from low-grade olive oil or olive roots and being demanded for its special features largely by a class of consumers of small means, who should not be burdened with a high duty on an article so promo tive of the hygienic habit of cleanli- ness, the present duty of 1J cents per pound should be lightened, considering the advantage already enjoyed by the manufacturers in getting the raw material necessary for its making, free from duty. The proposed duty of 15 per cent ad valorem, or not less than 1 cent per pound, contained in H. R. 20182, is ample protection to the domestic manufacturer, who sells his article at a lower price than the importer, still making more than a fair profit, while the imported article can not compete advantageously, as far as cost goes, with the domestic soaps, and can hold its own only through its superior quality and tne small margin of profit by which it is sold. Crude glycerin. The wide and ever- increasing use of glycerin in the manufacture of nitroexplosives, in the finishing of leather, in the curing of tobacco, in printing and dyeing, in the preparation of liq- uors, toilet articles, and medicines, and also for mechanical purposes, shows how this article is so identified, not only with the important domestic industry of its refinery (with a production, according to the census of 1909, of 17,000 tons, not including the glycerin consumed in the establishments where made, which brings the consumption to an estimated total of 40,000 tons), but with so many branches of our industrial life that it is essential the importation of crude glycerin should not be burdened with a higher rate than the present, of 1 cent per pound, especially considering the increased cost of the raw material that has ruled of late years. This chamber, therefore, recommends that the present rate on crude glycerin remain unchanged. Medicinal compounds. The rates of duty on articles used for medicinal purposes and considered vital to health should be materially reduced. At present medicinal preparations containing alcohol are taxed at 55 cents per pound, a rate equivalent to over 60 per cent ad valorem, SCHEDULE A. 109 PARAGRAPH 6 ABOOLS. which is exorbitant, the alcohol in said preparations being used solely as a solvent and means of preservation for the essential therapeutic constituents. As this class of goods includes medicines essential, either as pre- ventative against or curative of many kinds of illnesses to which the poor people, and especially those living in unhealthy climates, are more subject, owing to the less hygienic conditions and absence of comfort under which they are obliged to live, a reduction of the present rate of 55 cents per pound to 10 cents per pound and 20 per cent ad valorem, equivalent to about a 30 per cent duty, such as con- templated by H. R. 20182, is strongly recommended; also the reduc- tion of the rate on other medicinal preparations n. s. p. f. from 25 to 15 per cent. in the latter paragraph is included mannit, a product not manu- factured in the United States, which is becoming of wider use among a numerous class of our population as a gentle cathartic, and also finds employment in the manufacture of nitroexplosives. On calcined magnesia, a medicinal article of wide use, at present subject to a rate of 7 cents per pound, equivalent to about 44 per cent ad valorem, the duty should be reduced at least 50 per cent, i. e., to 3 cents per pound, as proposed in H. R. 20182. The United States already holds an important position in the manu- facture of magnesia salts and is not wanting in natural advantages in this direction. Magnesite, the raw material from which this article is manufactured, notwithstanding the large proportion in which it is imported, is mined in large quantities on the Pacific coast, and, with the opening of the Panama Canal and the possibility of lower freights, this mineral will be able to reach the eastern centers of manufacture in competition with the imported. The small amount of calcined magnesia imported (57,393 pounds in fiscal year 1910) shows that in the production of this article this country has nothing to fear from the foreign article. Calomel is another indispensable therapeutic article, now subject to a duty of 35 per cent, the duty on which should be reduced, as proposed in H. R. 20182, to 15 per cent. This, as other mercurial therapeutic compounds, is manufactured in the United States (which have the advantage of a notable produc- tion of quicksilver) in quantities sufficient to cover, and probably above, the requirements of consumption, so that in this case protec- tion is not only superfluous but unadvisable, the rate of 15 per cent contained in H. R. 20182 being hereby indorsed. Perfumery. The prevailing idea that the articles included under this paragraph are luxuries, while a good many of them, such, for instance, as hair lotions, mouth, skin, and teeth applications, are only articles of ordinary comfort, indispensable for reasons of hygiene and cleanliness, which should not therefore be placed outside the reach of even the consumer of small means, have caused the enact- ment of the present exorbitant duties, especially on alcoholic per- fumery, subject to 60 cents per pound and 50 per cent ad valorem, while nonalcoholic is charged 60 per cent. These practically prohibitive rates for many of the imported arti- cles, which are not necessarily luxuries, but demanded simply by 110 TARIFF HEARINGS. PARAGRAPH 6 ARGOLS. reason of confidence acquired from long usage and attachment to a particular brand, have defeated their purpose both as a revenue measure, because they have not stimulated importations, and as a protective measure, because the exclusion of many articles of foreign perfumery, represented by proprietary or patent brands, by a duty that increases their cost often 100 per cent, has not benefited domestic production, by reason of the proprietary character of the imported articles, of which the high rates discouraged importation. This chamber is of the opinion that it would be in the interest of revenue to reduce the duties on these commodities to more reason- able rates, because the increased importations thus stimulated, without injuring domestic production, would increase the revenue. The foreign article, owing to its proprietary or patented character, does not compete with the domestic. It therefore recommends that the duty on alcoholic perfumery be fixed at 60 cents per pound and 25 per cent ad valorem, and on nonalcoholic perfumery, in the production of which the United States possesses natural advantages, because of abundance of some of the necessary materials (fats, soap, glycerin, powders, etc.) 40 per cent ad valorem, as it was in the Wilson tariff. Sulphur. It would be superfluous to dwell upon the advisa- bility of maintaining crude sulphur on the free list, when the exten- sive use of this mineral, especially in the manufacture of gunpowder, in the bleaching of wood pulp and textile fibers, in the vulcanizing of rubber, in the making of fumigating sticks, matches, etc., in the manufacture of sulphuric acid where the pyrites are not economi- cally obtainable, in medicinal use, etc., is considered. The United States have become, since the beginning of the last decade, largely productive of this mineral, the output of the Louisi- ana sulphur deposits being so important (in 1908 the production was estimated at 369,444 tons) as to easily cover domestic consump- tion, so that the importations from Sicily, which up to 1902 were the principal source, having supplied in that fiscal year as much as 163,571 tons, have since fallen off to a paltry 8,753 tons hi fiscal year 1911. The cost of production of the Louisiana brimstone, although not stated for recent years, is, owing to the ingenious mining method by which it is extracted, much lower than in the case of the sulphur mined in Sicily, where, besides other disadvantages, a considerable amount of sulphur ore has to be burned and is therefore lost in the process of extraction. Not only is the cost of production of brimstone lower in Louisiana than in Sicily, but the domestic brimstone is obtained at a higher decree of purity. The United States are already exporting more sulphur than they import (in fiscal year 1910, 45,595 tons, against 29,329 imported), which shows that in the production of this mineral this country enjoys natural and technical advantages to render any protection not only superfluous but dangerous, as certainly over 95 per cent of the production is controlled by one concern. Most of the Sicilian sulphur imported into the United States is used in the manufacture of gunpowder and in bleaching wood pulp, SCHEDULE A. Ill PARAGRAPH 6 ARGOLS. the latter especially an industry which appeals for free raw materials, owing to the wide scope of its bearing on the economic life of the Nation. Refined sulphur, which under the present tariff is taxed $4 per ton, should, for like reasons, be placed on the free list, but especially so in order to avoid in future a repetition of the unsuccessful attempt that was made about a year ago to have the purer grades of brim- stone classified as refined sulphur and thus made subject to duty. This chamber, therefore, recommends that sulphur in any form be exempted from duty. Talc. This article, which under the present tariff is admitted free of duty only in a crude or unground condition, is subject to a duty of 35 per cent when ground. Although talc is produced largely in the United States (about 120,000 tons annually), the quality of the domestic talc, chiefly fibrous and used as a filler in paper making and in paints, is different from the imported, which serves, as a rule, a different purpose. The notable difference in cost between imported talc selling, the Italian from $35 to $40 per ton and the French from $15 to $25 and domestic talc, selling as low as $9 at the mine, shows clearly the difference in the quality and principal use of the two articles. The imported talc is used chiefly in the preparation of toilet powders, which, on account of their extensive use among all classes, can not be considered a luxury, but an article of necessity in the household. For this purpose whiteness and fineness are required in the talc, and these qualifications the imported article possesses in a greater measure than the domestic, to which it is therefore preferred. The consumption of ground talc is increasing with the increase of population. In the Dingley tariff ground talc was taxed at the rate of 20 per cent. The act of 1909 increased the impost to 35 per cent, with the result that importations, which had averaged annually in the pre- vious three years about 16,833,000 pounds, fell in the following two years to about 15,518,000 pounds, showing that the increase of duty was responsible for the falling off of importations, and therefore of revenue, on this article. This chamber respectfully recommends that talc in a crude or unground condition be maintained on the free list, while the duty on ground talc be reduced to 15 per cent. Sienna. The importance of lightening fiscal burdens on pigments required in the preparation of paints, which absolve not only an esthetic function, out the more important one of preserving and secur- ing a longer duration of the materials to which they are applied, is self-evident and in line with the policy of conservation, so much insisted upon in these days, when the consequences of a wasteful past of many national resources are beginning to be felt. Sienna earths, like umbers and ochers, enter in paints used princi- pally for staining wood. They are imported chiefly in the crude state and powdered here and made ready for use. American mines produce a lower grade of sienna than the imported article, as shown by the marked difference in price. While domestic 112 TARIFF HEARINGS. PARAGRAPH 6 ARGOLS. sienna is quoted from $50 to $60 per ton, the imported sells from $80 to $140. At present crude sienna earth, i. e., when not powdered, washed, or pulverized, is subject to a duty of one-eighth of 1 cent per pound. The milling of imported sienna gives employment to American labor, a reason which, together with the fact that raw material of this class can not be replaced by domestic production, ought to be sufficient to exempt it from duty. Should, however, a duty be aeemed unavoidable for revenue pur- poses, this chamber recommends that the present specific rate be maintained in preference to the proposed 10 per cent ad valorem con- tained in H. R. 20182, and also that the word "washed" be omitted from the first portion of paragraph 47, Schedule A, of the present tariff, because a considerate part of the sienna earth imported in lumps is naturally washed and should not thereby be made to incur the classification of powdered or artificially washed sienna, and thus be subjected to the higher rate of three-eighths of 1 cent per pound, without having undergone any process that has materially enhanced its value. As in the case of the crude sienna, in that of the powdered also, a specific rate, as in the present tariff, is preferable to an ad valorem rate. BRIEFS SUBMITTED BY TARTAR CHEMICAL CO. The Tartar Chemical Co. filed the following papers with the com- mittee : RATES OP DUTY ON TARTARIC ACID AND CREAM OF TARTAR. [Tartar Chemical Co., manufacturers of cream of tartar and tartarlc acid, No. 135 Wflllam Street.] NEW YORK, January 2, 191S. COMMITTEE ON WAYS AND MEANS, Bowse of Representatives, Washington, D. C. SIRS: In relation to the proposed increase in duty on our raw material and the decreases in the duties on our manufactured products, we desire to meet your com- mittee in a right spirit and to ask you to consider the following: Assuming that bill H. R. 20182 may serve as basis of the new tariff legislation, it is stated in Paragraph I, to reduce tartaric acid to 3 cents per pound against the existing rate of 5 cents and the Dingley tariff rate of 7 cents; Paragraph IX, to reduce cream of tartar to 2i cents per pound against the existing rate of 5 cents and the Dingley tariff rate of 6 cents; Paragraph XI, to increase the duty on argols from 5 per cent (present rate) to 10 per cent (or 100 per cent increase). Argols are the crude material from which the two above-named products are made in this country, and of which at least 98 per cent must be imported from wine-pro- ducing countries principally France and Italy. We produce cream of tartar and tartaric acid in such proportions that the average duty would be 2.7 cents per pound, from which must be deducted the duty on the raw material of 10 per cent, and this, at the present price of argols, would be 1.7 cents, leaving an apparent protection of 1 cent per pound, which the foreign manufacturer can far more than offset in the lower cost of his raw material, in addition to which he has the far lower cost of all classes of labor, which in the competing countries is one- half of what we pay, and in some cases even less than half. Under the present tariff the foreign manufacturers have an advantage of at least 4| cents per pound on cream of tartar and 6 cents on tartaric acid, but with the proposed increase pi duty on raw material it will be over 5 cents on cream of tartar and 6| cents on tartaric acid. _ 1. They use a lower testing grade of crude material, which will not bear transporta- tion here because of chemical disintegration before it could be brought here and SCHEDULE JL. 113 PABAGBAPH 6 ABQOLS. employed. To prepare these goods for transportation necessitates special prepara- tion, and the handling, packing, and freight charges are the aame on crude material testing 25 per cent as on the argols averaging 70 per cent, which latter we must employ here for the reasons just mentioned. The crude material employed by the foreign manufacturers costs them 2J cents per pound, based on 100 per cent purity, less than it would cost us here. 2. Labor cost is unquestionably higher here than with the foreign manufacturer situated in the argol-producing countries generally in southern Europe. We employ skilled labor steadily in our works, as well as a large number of ordinary work- men, who, as you know, are paid more than double here than in France, Italy, or Spain. This difference amounts to 1.2 cents per pound. 3. Italy has an export duty, which amounts to about 3 per cent ad valorem on argols, while on the lower grades, which they mostly employ, it amounts to 6 per cent or more. This differential duty amounts to an average of 0.6 cent per pound. Besides this, all foreign manufacturing countries have a protective duty on the manufactured products. 4. The manufacturer in the United States is further handicapped by the much higher cost in this country of the various chemicals and other materials employed in the process of manufacture compared with those in Europe. Recapitulation of advantages of foreign manufacture. Per pound cream of tartar. Per pound tartaric acid. Crude material cost Cents. 1.88 Cents. 2.87 Labor 1.20 1.20 Chemicals and supplies .65 .55 American duty .75 .94 Italian export duty - 4.38 .45 5.56 .60 With additional duty as proposed 4.83 .75 6.16 .94 Against a proposed duty 5.58 2.50 7.10 3.00 Advantage to foreign manufacturers under proposed duty 3.08 4.10 REVENUE ACCRUING TO THE COUNTRY ON PROPOSED TARIFF CHANGES. Estimated revenue from duties on argols, cream of tartar, and tartaric acid under the proposed bill is figured as $312,250, of which $300,000 is on crude material, but for the reasons stated above this latter sum will fall away if our domestic factories are forced to reduce their output. The Government will not be the gainer in the revenue from the importation of the manufactured product. Even under existing tariff the importations of tartaric acid have increased from 36,389 pounds in 1907 to over 300,000 pounds in 1911, and on cream of tartar from 6,000 pounds in 1907 to over 100,000 pounds in 1912. Combinations of large European manufacturers have been going on; are legal and encouraged by their governments; and we allege on best information and belief, from facts in our possession, that the people of this country would not receive benefit of any reduction in the tariff of the United States, but on the contrary a combination of large European manufacturers of cream of tartar and tartaric acid would result, and prices be increased after makers in this country cease to exist. Tentative statements to this effect are in our possession, and should you desire any substantiation of the above-cited facts we will gladly submit it. We have been in business over 30 years Capital employed is over $2,000,000, and our annual disbursements for pay roll and other expenses are about $500,000. For the above-explained reasons we pray that you allow the duties to remain as they are, but if it seems necessary for you to increase the revenue as estimated, it will be 78959 VOL 1 13 8 114 TARIFF HEARINGS. PARAGRAPH 8 BLEACHING POWDEB. obtained by advancing the duty on crude material from 5 per cent ad valorem to 10 per cent ad valorem, as proposed, and continuing the present duty of 5 cents per pound on manufactured cream of tartar and filing the duty on tartaric acid at 6 cents per pound to make the equivalent. Respectfully submitted. TARTAR CHEMICAL Co., WILLIAM C. VOIGHT, Treasurer. TARTAR CHEMICAL Co., Brooklyn, N. T., January 25, 1913. The COMMITTEE ON WATS AND MEANS, House of Representatives, Washington, D. C. GENTLEMEN : On page 101 is printed the memorial of the Italian Chamber of Com- merce in New York. The seventh paragraph begins with our raw material, argols, and wine lees and goes on to the products manufactured therefrom. This memorial favors leaving the duty on the raw material, where it now is. and reducing the tariff on cream of tartar and tartaric acid from 5 cents per pound to 3 cents per pound on tartaric acid and 2 cents per pound on cream of tartar. This would leave the European manufacturers, who almost wholly work in agree- ment, as open a market here for their manufactured products as would H. R. bill 20182, and this is of course the desire of the Italian Chamber of Commerce. This chamber is subsidized by the Italian Government and is designed to promote the industries of Italy rather than of this country. On pages 282 and 284 of Tariff Schedule A, No. 2 Hearings, you will find admissions from Mr. MarianitoMr. Palmer that the Italian Government subsidizes the Italian Chamber of Commerce in New York. Naturally, therefore, this institution favors throwing down the bars here for the benefit of the Italian industries without regard to the consequences to the same industries of this country. Very respectfully, TARTAR CHEMICAL Co., EDWARD McC. PETERS, Vice President. PARAGRAPH 7. Blacking of all kinds, twenty-five per centum ad valorem; all creams and preparations for cleaning or polishing boots and shoes, twenty-five per centum ad valorem. For blacking, of all kinds, etc., see also Park & Tilford et al., page 66. PARAGRAPH 8. Bleaching powder, or chloride of lime, one-fifth of one cent per pound. BLEACHING POWDER. THE DOW CHEMICAL CO., MIDLAND, MICH., SUBMITS BRIEF REGARDING BLEACHING POWDER. By the tariff act of 1897 bleaching powder was taken off the free list and a duty of two-tenths of 1 cent per pound was placed upon it. Prior to this change the price of bleaching powder, in the United States, was about 2 cents per pound. Either simultaneously with the placing on this two-tenths of 1 cent per pound duty, or shortly afterwards, the United Alkali Co. of Great Britain, who controlled more than 90 per cent of the bleach sold within the United States, lowered the price in the United States to about $1.87 per 100 pounds and also paid the import duty. The placing of this small import duty that was only about 10 per cent of the ruling price proved to be sufficient to inspire enough con- fidence among capitalists so that two bleaching-powder plants were SCHEDULE A. 115 PARAGRAPH 10 CHARCOAL. erected in the United States, one at Niagara Falls and the other at Midland, Mich.; both plants increased their capacity from time to time until competition became very keen and prices were reduced to $1.25 per 100 pounds, which is the ruling price to-day on yearly con- tracts, the price being substantially the same in the United States and Great Britain. The United Alkali Co. of Great Britain, and not the consumer, is Eaying the two-tenths of 1 cent per pound now assessed on imported leach, and if the duty is reduced we do not think that any more bleaching powder would be imported or the price to the consumer reduced, for the following reason: A bleaching-powder plant costs several times the annual output of this plant and if the selling price changes 10 per cent, it would only affect the return on the investment in the bleaching-powder plant by a small part of the 10 per cent. It is not likely that the proposed reduction in the import duty will cause any plants now built to dis- continue their operations, and thereby permit any increased amounts of bleaching powder to be brought into this country from abroad, neither would the prices be likely to change for the reason that the selling price at the present tune does not return a normal profit on the investment and new competitors are not likely to enter this market and thereby cause a still further reduction in the selling price. To summarize: We believe the present import duty will furnish a larger revenue to the Government than a lower import duty, and at the same tune the risk of an American industry being blotted out by a foreign monopoly is less than it would be if the import duty were lower. Respectfully submitted. THE Dow CHEMICAL Co., By HUBERT H. Dow, General Manager. MIDLAND, MICH. PARAGRAPH 9. Blue vitriol or sulphate of copper, one-fourth of one cent per pound. See W. H. Bowker, page 416. PARAGRAPH 10. Charcoal in any form, not specially provided for in this act; bone char, suitable for use in decolorizing sugars, and blood char, twenty per centum ad valorem. CHARCOAL. PROTEST OF MICHIGAN CARBON WORKS AGAINST DUTY ON CHARCOAI, ETC. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee of the House of Representatives, Washington, D. C. SIR: As manufacturers of charcoal (animal), bone char, or bone black, we beg to submit our most earnest protest against a possible reduction hi the duties on these materials. At the present tune this company has invested in the portion of its plant devoted to the manufacture of charcoal (animal), bone char, or bone black, approximately SI 00,000. During the five-year period 116 TARIFF HEARINGS. PARAGRAPH 10 CHARCOAL. ended December 31, 1912, the net profits to the Michigan Carbon Works, in the production of charcoal (animal), bone char, or bone black, have averaged 8.27 per cent on the actual cash capital invested, with no deduction whatever for depreciation of plant. Charcoal (animal), bone char, or bone black, is employed principally for decolorizing purposes in the refining of cane sugar, glucose, and special lubricating oils. It is not used in the beet-sugar industry. Modern methods of users in reburning or revivifying the material have largely reduced the consumption, so that the expense for bone black per barrel of sugar, glucose, or lubricating oil produced is so small as to be practically negligible. In the lubricatmg-oil refining industry bone black has in a very large measure been replaced by fuller's earth. The collection of bones used in the production of charcoal (animal), bone char, or bone black, gives occupation to a large number of men throughout the United States, and in order to gather and secure the material, much higher prices must be paid than in Europe. Further- more, the labor expense in the production of bone black is a very large item; and as our labor is now being paid approximately 65 per cent more than is received by labor abroad doing the same kind of work, it is not difficult to see the effect of a reduction in the present rate of duty. In the manufacture of charcoal (animal), bone char or bone black, there is produced a large amount of by-products now available and used for fertilizing purposes. In recent years a considerable quantity of bones has been brought to this country from South America to be used in the manufacture of bone black. In the event of any reduc- tion in the present duty, these bones will go to Canada or Europe to be made into bone black for export to the United States, and not only will the domestic industry be injured, many men deprived of their present means of livelihood, but the farmers of the United States will suffer the loss of a large quantity of very desirable and much-needed fertilizer for the improvement of their land, now obtain- able at a low cost. As the industry in the United States is already seriously handi- capped and in anything but a flourishing condition, we therefore petition that the present rate of duty 20 per cent ad valorem be retained on charcoal (animal), bone char or bone black, not suitable for use as a pigment. Respectfully submitted. MICHIGAN CARBON WORKS, By GEO. B. BURTON, Manager. DETROIT, MICH., January 27, 1918. SCHEDULE A. 117 PABAGBAPH 1O CHABCOAL. BRIEF OF HOLUNS N. RANDOLPH, COUNSEL FOR THE NATIONAL WOOD CHEMICAL ASSOCIATION. In Re Hearings Before the Committee on Ways and Means, United States Congress. ATLANTA, GA., February 8, 191S. I shall be very brief in submitting the considerations which I wish to advance in this matter. The National Wood Chemical Association and its members are interested in the chemical schedule of the pro- posed new tariff measure, and more particularly in the tariffs on charcoal and its related products, acetate of lime and wood alcohol. The present duties on these articles are as follows: Acetate of lime, 25 per cent; charcoal, 20 per cent: wood alcohol, 20 per cent. These articles are manufactured at about 100 works in the United States, the factories being located principally in Pennsylvania and parts of New York State, Michigan, and Wisconsin; with an investment of approximately $25,000,000 and giving employment and support to aoout 75,000 people. The articles are made from wood, and the wood which is used to a large extent consists of tops, butts, and breaks of trees which have been cut into sawlogs, thereby creating from what would otherwise be a waste material valuable commercial commodities and a corresponding field for the employment of American labor. It is believed that the employment of these waste tree products has a tendency to greatly reduce the danger of destructive forest fires, and to that extent brings about a conservation of our forests rather than a waste of wood. If these articles were placed on the free list or the prevailing rates of duty greatly reduced, it would result in the building of a large number of new works in Canada, where wood and labor are about 20 per cent cheaper than in the United States. The inevitable result would be to exterminate this industry in the United States and force our manufacturers to sustain large losses, and deprive their employees of the means of livelihood. Canada, with its vast areas of cheap raw material, is offering every encouragement to the building up of this industry in its own borders by paying a large bounty on the manu- facture of charcoal iron, and an enormous price for the wood alcohol used for denaturing purposes. The Canadian market charcoal is cheaper than the markets in the States, returning to the manufac- turer, it is estimated, about 50 per cent more than is realized by our home industry. From this it can readily be seen that with new markets open to them the Canadian production will increase very rapidly and their surplus dumped into the United States, which could only result in ruinous competition. The Canadian duty on charcoal at the present time is 17 per cent, and if these chemicals were manufactured in Canada and the present rates of duty in the United States removed or greatly reduced, we have no law that would prevent her from dumping all her surplus product into this country. For the information of the committee, I will state that in the manu- facture of these chemicals about 60 to 75 per cent of the total amount received from the sales thereof is expended in labor. 118 TARIFF HEARINGS. PABAGBAPH CHABCOAL. We would like to have the present rates of duty continued, but if a change is deemed imperative we suggest that the duties be made specific and as foUows: Crude wood alcohol (82 per cent), 5 cents per gallon; refined wood alcohol, all grades, 10 cents per gallon; acetate of lime, one-half cent per pound; formaldehyde, 2 cents per pound; charcoal, 1 cents per oushel. No demand in any quarter for lower duties on wood chemicals has so far manifested itself, and so far as known prices are satisfactory to the consumers. The above facts are taken from evidence submitted at the hearings before the Senate Committee on Finance, March 19, 1912. But little more needs to be said. We have here a typical American industry, and one which has been created from our waste wood pro- ducts and by the wit and wisdom and thrift of the people living in the States named. The art and trade has become valuable, and to allow it to be destroyed or greatly impaired by the admission of com- petitive products free of duty from Canada would, it seems to me, be without justification, particularly so as there is no complaint or agitation in any quarter for a change and reduction in the prevailing rates of duty. Finally, it should be remembered that the Canadians have protected themselves against the importation of these products, or some of them, from the United States by the imposition of the rates of tariff named, at least on charcoal. For all of which reasons it is respect- fully urged that the present rates of duty be aUowed to remain, but if as stated above a change is deemed imperative, then we respect- fuly suggest that the duties be made specific as above outlined. All of which is respectfully submitted. HOTJ.TNS N. RANDOLPH. ATLANTA, GA., February 24, 1913. Hon. OSCAR W. UNDERWOOD, Washington, D. C. MY DEAR MR. UNDERWOOD: My attention has been called by one of my friends to a mistake I made in my little brief filed on the sub- ject of import duties on charcoal and its by-products. I stated therein that the Canadian market for charcoal is cheaper than in the United States. In this I find I am mistaken. The Canadian market is higher and returns the manufacturer a much better average per bushel than we are able to get in the United States ; it seems also that the product does not have to be so well prepared. Therefore, in the event the Canadian manufacturers produced more of these products than their markets can readily absorb, instead of reducing the price to their home trade they would use the United States and its con- sumers as a dumping ground, if they had no tariff duties to confront on importing the product in this country. I regret this mistake and hasten to correct it at first opportunity. With kindest regards. I am, Sincerely, yours, HOLLINS N. RANDOLPH. SCHEDULE A. 119 PARAGRAPH 10 CHARCOAL. PROTEST OF BAUGH & SONS CO., OF PHILADELPHIA, PA., AGAINST THE REMOVAL OF DUTIES UPON CHARCOAL, BLOOD CHAR, ETC. To Hon. Oscar W. Underwood, Chairman, and Members of the Ways and Means Committee of the House of Representatives, Washing- ton, D. C. In the matter of proposed revision and amendment of Schedule A of the present tariff act so as to remove all duties payable upon importations of charcoal, blood char, bone char, or bone black not suitable for use as a pigment, and so as to make, as suggested in House bill No. 20182, the tariff act under the head of free list read: "85. Charcoal, blood char, bone char, or bone black, not suitable for use as a pigment," as shown by the report of the Committee on Ways and Means of the House of Representatives, page 136. Baugh & Sons Co. is a corporation of the State of Pennsylvania and is a large manufacturer of charcoal (animal), bone char, or bone black, not suitable for use as a pigment, and has a capital of approx- imately $270,000 invested in the portion of its plant devoted to such manufacture. The company is not connected or affiliated in any manner whatever with any trust or combination. It is an absolutely independent concern, competing with all manufacturers of charcoal, blood char, bone char, or bone black, not suitable for use as a pigment, and other products, within the territories which it is practicable for it to reach profitably, considering the location of its plant, which is at Philadelphia, Pa. The company employs a large number of men at its plant, and their average working day is 10 hours and the wages paid skilled men are at the rate of $12 per week and the wages paid the unskilled workmen are at the rate of $10 per week. The present tariff act imposes a duty of 20 per cent ad valorem upon importations of charcoal, blood char, bone char, or bone black, not suitable for use as a pigment, and it is earnestly submitted that a proper consideration of the interest of the American workman engaged in this industry, and of his employer, require that this duty be not removed or decreased. During the past year, 1912, the profits of Baugh & Sons Co. (after allowing a proper rental for the premises in which the business is conducted) from the manufacture and sale of bone black, charcoal, bone char, or blood char, not suitable for use as a pigment, amounted to but approximately 6 per cent upon the amount invested in the business in other words, a profit slightly more than would be received by any investor in any good bonds, and that slight increase was more than earned by the risks and hazards incident to the conduct of the business. The rate of profit above mentioned is obtained upon the basis of price of crude materials in the United States being $26 per ton, the minimum price, whereas in fact the price ranges and is likely to range higher, having already been as high as $31 per ton, so that the above- mentioned rate of profit, even under the present protective policy, is not a fixed profit, but is subject to diminution as the prices of crude materials advance, and indeed it is a well-known fact that the prices for crude materials which enter into the manufacture of charcoal, bone char, blood char, or bone char not suitable for use as a pigment 120 TARIFF HEARINGS. PARAGRAPH 10 CHARCOAL. are rapidly advancing and there are no longer available to a manu- facturer of these products, such as Baugh & Sons Co., any great source of supply of crude materials such as a few years ago existed, and the result is that a great deal of crude material must be imported from other countries and at greatly increased prices, in addition to the freight. On the other hand, the prices of crude materials in foreign countries producing these articles are much cheaper than in the United States, and under the prevailing low scales of wages paid the foreign work- man (the skilled men receiving about $7.50 per week and a common laborer about $6 per week) it is very apparent that the foreign manu- facturer is able to produce charcoal, blood char, bone char, or bone black not suitable for use as a pigment, at a much lower cost than the American maunfacturer, who must pay more for his crude material and a higher rate of wages to his workmen, to whom he pays wages, as hereinbefore mentioned, to the skilled men at the rate of $12 per week and to the common laborer $10 per week. Right here it is clear that there is a difference in cost of production in America and foreign countries, considering the element of labor merely, of 37 to 40 per cent. Therefore, to remove the present duty upon these commodities and to admit them free into this country would obviously work to the advantage of the foreign manufacturer alone and to the great dis- advantage of the American workman and his employer, making it impossible for the American citizens, both employee and employer, engaged in the industry, to compete if the American workman is to receive his present scale of wages. The only possible way the American manufacturer could compete with the foreign trade would be to decrease greatly the wage scale of the American workman, who, in order to have employment, would be obliged to accept this decreased wage and consequently set for himself and his family a lower standard of living. If the workman were not willing to accept the decreased wage and the pressing conditions which would follow its acceptance, then the American manufacturer would be compelled to cease operations and thus abandon the field to the foreign producers without competition from the American manu- facturer. The only recourse of the American workmen under such conditions would be to seek employment in other directions, which, of course, would tend to decrease the wage rate in the other lines of business by reason of an oversupply of labor and would demoralize conditions socially as well as the charcoal, blood char, bone char, or bone black (not suitable for use as a pigment) industries in this country. The geat damage that would be suffered by the American manu- facturers by the removal of the present duty of 20 per cent ad valorem, will be more clearly apparent when it is known, as is the real fact that the profit upon the manufacture and sale of bone black, for example, does not ; at the prevailing price, exceed 6 per cent. If, therefore, the foreign producer is able to enter his goods into this country without a duty of 20 per cent ad valorem atleast it is clear that he would have such an advantage as to entirely eliminate the American manufacturer and employee from the industry. SCHEDULE A. 121 PARAGRAPH 11 BORAX. It is clear that to place these commodities upon the free list can only result in aiding the large manufacturers of charcoal, blood char, bone char, or bone black in European countries, where the crude materials and labor are so much cheaper and lower than in this country, to the great detriment not only of the American manufac- turer, but to those workmen who are dependent upon the industry here for the, livelihood of themselves and their families. But if upon a consideration of the whole subject it be determined to place these articles upon the free list, then not only to be con- sistent, but in the hope of preventing the absolute destruction of the industry, there should be placed upon the free list not only crude bone but bone ground, crushed and broken particles of afl kinds which might enter into the manufacture of charcoal, blood char, bone char, or bone black not suitable for use as a pigment. This would afford the American producer and his workmen a very slight or the only chance to continue the condition of their industry. Respectfully submitted. BAUGH & SONS Co., B. H. BREWSTER, Vice President. PHILADELPHIA, January 3, 1918. PARAGRAPH 11. Borax, two cents per pound; borates of lime, soda, or other borate material not otherwise provided for in this section, two cents per pound. For borax, Bee also Italian Chamber of Commerce, page 103. BORAX. BRIEF OF NATIONAL BORAX CO., SAN FRANCISCO, CAI., IN FAVOR OF TARIFF ON BORAX, BORACIC ACID, AND BORATE OF LIME. The borax produced by the mines of the company which I have the honor to represent are situate in the northeastern portion of Ventura County, a very sparsely populated section and practically a desert country. The mines are a long distance away from railroad transportation, something like 70 miles, and we have been compelled to build and maintain wagon roads to haul our products and supplies this long dis- tance at a very high expense. Our mine is one of the four existing borate mines hi this country, and all are more or less laboring under these same disadvantages, besides having to pay the highest rate of wages to miners and other high costs for supplies. The ore produced by these mines is principally colemanite, a variety of borate of lime, containing a very large percentage of waste matter, and has to be refined before it becomes an article of commerce. The output of our mines will average 1,000 tons a month at an approximate value of $25 per ton for the crude ore at the mine. Over 100 people are more or less directly interested in the mainte- nance of the operations of our mines, and our pay roll, including sup- plies, exceeds the amount of $10,000 per month. 122 TARIFF HEARINGS. PABAGBAPH 11 BOBAX. Any reduction of the present tariff would only force us to discon- tinue our operations ana would not only work a very great hardship upon our laborers and others depending upon them, but also upon our stockholders, of which there are 200. The present price of the refined commercial product, borax, and also all other products derived from the mineral we mine (colemanite, borate of lime) is lower than it has ever been known before. The reduction of tariff would only open the American markets to the borate of lime produced in South America, where they have very cheap labor, and would close the operations of all of the American mines, without giving the American consumer any compensating benefits. NATIONAL BOBAX Co., By MAX P. FRIES, President and General Manager. SAN FRANCISCO, CAL. CHAMBER OF MINES AND OIL, LOS ANGELES, CAL., URGES RETENTION OF DUTY ON BORAX. CHAMBER OF MINES AND OIL, Los Angeles, Cal., January 9, 1913. Mr. DANIEL C. ROPER, Clerk Committee on Ways and Means, House of Representatives, Washington, D. C. DEAR SIR : We beg to confirm our telegram to you to-day, quoting resolutions passed by our board of directors, urging that no action be taken by the Committee on Ways and Means toward placing borax or borate products on the tariff free list. We inclose herewith copy of the resolution, as telegraphed to you; also a brief of facts on the borax industry of this State, as prepared by our committee. We will appreciate it if you will bring this resolution and brief to the attention of the committee, and assure you of our appreciation in advance. Very truly, yours, CHAMBER OF MINES AND OIL, G. M. SWINDELL, Secretary. [Night letter.] Los ANGELES, CAL., January 8, 1913. DANIEL C. ROPER, Clerk Committee Ways and Means, House of Representatives, Washington, D. C. Please bring to attention committee following resolution passed to-day by our board of directors: AYhereas the borax-mining industry in California has shown a small but steady increase after 40 years of development work notwithstanding the limited market; and Whereas with the increase in production and transportation facilities there has been an enormous decrease in the price of borate products to the consumer; and "Whereas any reduction in the existing tariff will eliminate this industry in California, throw open the markets of the United States to foreign mines, benefit foreign labor at the expense of American labor, practically destroy the work of those who have built up the industry, and cause great loss in capital now invested in California: Now, therefore, be it SCHEDULE A. 123 PARAGRAPH 11 BORAX. Resolved by the Chamber of Mines and Oil of Los Angeles, Cal., That we do most earn- estly protest against any reduction in the existing tariff on borax and borate products, and do urge our Senators and Congressmen to devote their best efforts to the support of this resolution in the proper committees and on the floor of the Senate and House of Representatives. Russ AVERT, President. JANUARY 9, 1913. RESOLUTIONS PASSED BY THE BOARD OP DIRECTORS, CHAMBER OP MINES AND OIL OF LOS ANGELES, CAL., PROTESTING AGAINST REDUCTION IN EXISTING TARIFF ON BORAX AND BORATE PRODUCTS. Whereas the borax mining industry in California has shown a small but steady increase after 40 years of development work, notwithstanding the limited market; and Whereas with the increase in production and transportation facilities there has been an enormous decrease in the price of borate products to the consumer; and Whereas any reduction in the existing tariff will eliminate this industry in Cali- fornia, throw open the markets of the United States to foreign mines, benefit foreign labor at the expense of American labor, practically destroy the work of those who have built up the industry, and cause great loss of capital now invested in California: Now, therefore, be it Resolved by the Chamber of Mines and Oil of Los Angeles, Cal., That we do most earnestly protest against any reduction in the existing tariff on borax and borate products, and do urge our Senators and Congressmen to devote their best efforts to the support of this resolution in the proper committees and on the floors of the Senate and House of Representatives. Certified as a true and correct copy. Russ AVERY, President. G. M. SWINDELL, Secretary. JANUARY 9, 1913. BRIEF OF FACTS IN RE THE BORAX MINING INDUSTRY OF CALIFORNIA. In view of the fact that the entire production of borax in the United States is vir- tually derived from four producing mines in this State, the industry may be defined as essentially Californian. The crude ore now being mined is principally colemanite, a borate of lime, and its content of anhydrous boric acid varies considerably, owing to the presence of impurities in the ore. The total production for the present year, from present indications, will be in the neighborhood of 4,100 tons monthly, with an approxi- mate valuation at the mine of $29 per ten. The present wholesale price of refined commercial borax, a chemical combination of boric acid and soda, is $3.75 per 100 pounds. Incidentally, the wholesale price in the United States is as cheap as in Europe. It is estimated that the industry provides employment for about 1,000 men; that salaries and wages will approximate $2,000 to $3,500 daily; that the average monthly purchase of supplies, very conservatively estimated and excluding machinery and equipment, will reach $50,000. Los Angeles, being the nearest large center to the mines, secures the bulk of this business. It is, therefore, apparent that the industry ia a small one, comparatively, and one which would seem to warrant protection and encouragement. Any reduction in the present tariff will, we feel sufficiently confident, eliminate borax mining in the United States, and yet at the same time will not tend to reduce prices to the consumer. Such tariff reduction will open the United States market to foreign mines in South America, Asia, and Europe. It would also help foreign labor, throw out of employment in the United States men who have specialized in this industry and helped build it up from a gross production in 1895 of 5,959 short tons to 53,330 tons in 1911. It is interesting to note that with the growth of the borax mining industry there has been an immense reduction in the value of the crude ore. Thus in 1895 a production of 5,959 tons netted the miners $595,900, or $100 per ton; while the production of 53,330 tons in 1911 brought them but $1,569,151, or about $29 per ton. Statistics to be obtained from the Federal authorities will also show that the price of borax and boric acid to the consumers has been steadily reduced during the period mentioned. 124 TABIFF HEAB1NGS. PARAGRAPH 11 BORAX. Even with the nominal protection afforded by the present tariff foreign competitor* found it possible to import in 1911 for consumption in the United States borax and berates, including boric acid, with a valuation of about $24,000. The facts furnished above will prove the limited market for borate products in the United States, and a reduction in the present tariff will merely mean an increased profit for the foreign producer, as he could mine and ship the refined product to the United States at a slightly lower cost than at present, while such a reduction in tariff would effectually eliminate a minor industry in this State, the development of which has gradually lessened the cost of a household necessity year by year, and not followed the trend of other protected industries to the detriment of the general public. We urge all Senators and Congressmen receiving this brief to give the matter their most earnest consideration, and we sincerely trust that the facts presented may con- vince them of the necessity for retaining the existing small tariff on borax and borate products. Respectfully presented. CHAMBER OP MINES AND OIL, HENRY BLUMENBERQ, Jr., THOS. THORKILDSEN, C. E. CALM, Committee. Approved. Russ AVERT, President. G. M. SWINDELL, Secretary. BRIEF IN FAVOR OF THE PROTECTIVE TARIFF ON BORAX, BORIC ACID, AND BORATE OF LIME. VENTURA, CAL., January 7, 1913. The entire production of borax in the United States is virtually derived from lour producing mines located in this State in outlying and desert country. Our mine is one of the four and is under heavy expense for hauling the ore 75 miles by wagon and very high rate for wages to miners and for supplies. Our crude ore is principally colemanite, a variety of borate of lime, having a large percentage of impurities, which necessitates refining The total yearly production of our mine is 6,000 tons, at an approxi- mate valuation at the mine of $25 per ton for the crude ore. We employ about an average of 65 men, whose wage is approxi- mately $200 per day. Any reduction of the present tariff will force us to discontinue operations and will not only work a hardship upon our stockholders, but also upon the laborers and others depending upon the operation of this mine. The present market price of the refined commercial product (borax) is lower than has ever been known before and would not be reduced even with a reduction of the tariff, and we can not see that it will be of any advantage either to the American consumer or manufacturer. HENRY M. RUSSELL, President Russell Borate Mining Co. SCHEDULE A. 125 PARAGRAPH 11 BORAX. BRIEF OF THE PACIFIC COAST BOEAX CO., NEW YORK, N. Y. PACIFIC COAST BORAX Co., New York, January 28, 1913. Hon. OSCAR W. UNDERWOOD, Chairman, Ways and Means Committee, Washington, D. G. DEAR SIR: Referring to the present law: Paragraph 1. Boracic acid, present duty 3 cents per pound. Paragraph 11. Borax, present duty 2 cents per pound; borates of lime, soda, or other borate material not otherwise provided for in this section, present duty 2 cents per pound. We beg to protest against any change in the above duties, for the following reasons: BORATES OF LIME OR SODA OR OTHER BORATE MATERIAL NOT OTHER- WISE PROVIDED FOR. The mineral (borate of lime) from which borax and boracic acid are manufactured is found in this country in commercial quantities chiefly in the western portion of the United States, and particularly in the States of California and Nevada, where it is confined to a lim- ited area of desert country known as the Death Valley region. From this region there is mined annually approximately 50,000 tons of crude borate material. The production of this material has neces- sitated extensive developments for many years, and an industry of considerable magnitude has grown up in connection with the pro- duction of borate of lime in Death Valley. In the past years of growth in the borax business in America, it has been necessary to build railroads and wagon roads, and to establish water stations through the development of springs, and generally to civilize arid wastes of drifting sand. This development work has so opened up the thousands of square miles of land in Death Valley and other desert sections of California and Nevada that it is now possible to reach, with safety, most of the ulterior points on the desert, and prospectors as well as others are frequently seen trav- eling with safety from place to place on the desert, depending largely for food and water upon the stations established by the borax people, until death from want of water is much less frequent than formerly, and through prospecting thus made possible, much land containing other valuable minerals has been found which heretofore was entirely unknown. The possibility in potash alone is an example of what has been accomplished through civilization by the borax people, who alone have done the pioneer development work hi the American deserts and converted them, and particularly the Death VaUey, as it is generally known to-day, into an oasis of health and remunerative employment for many contented workmen and prospectors. During the past 10 years, extensive plants have been constructed in order that the borate material may be economically produced, assorted, calcined, and shipped. A great many men are constantly employed in this industry. A railroad of 127 miles in length has been built to carry the crude material from one of the fields of pro- 126 TARIFF HEARINGS. PARAGRAPH 11 BORAX. duction to a point of connection with a transcontinental railway line. The industry which, through years of development, effort, and economic management, has thus grown and developed in the arid region of Death Valley, until at present there is expended annually for labor and supplies approximately $750,000. In order to produce commercial borax and boric acid from the crude material extracted from the Death Valley fields, it is necessary to combine the borate ingredients existent in the material with a certain percentage of soda. Soda of proper quality does not exist in that region. It therefore becomes necessary to either ship the crude material to some point on the Atlantic seaboard, where it may be combined with soda, or to ship soda from the point of its produc- tion in the Eastern States to some point on the Pacific coast, and there to combine it with the borate material. Since the territory of the greatest distribution for the refined prod- uct is existent upon the Atlantic coast and east of the Mississippi River, it has been determined by experience that it is necessary to ship the crude ore to some point in the East for its manufacture into refined borax and boric acid, and from that point distributed to the consumers. The vast production and transportation of raw mate- rial from the fields in the West to eastern points of manufacture necessitates a considerable expenditure. Approximately 25,000 tons of marketable borate ore are shipped from the 50,000 tons mined from these fields each year to the Atlantic seaboard for refining. Of such crude material so shipped approximately 60 per cent consists of lime, which has no commercial value. Thus it becomes necessary to transport across the continent 15,000 tons of waste material in order that the essential ingredients of the crude ore may be secured. Such trnsportation necessitates the payment of large sums for freight and adds greatly to the commercial and economic value of the borax industry, as the same has grown up in this country. With the present import dut} r existing, the American borax indus- try is enabled to compete successfully in the American market with foreign producers of the same material. The producers of borate material in the western United States have their strongest competi- tors in the fields of borate ore existent upon the eastern and western coasts of South America. In the Argentine Republic, Chile, and Peru borate of lime superior in quality to the California mineral can be produced from extensive fields at a low cost with "peon" labor, which receives a daily wage of from 25 to 50 cents. The product of these fields can be cheaply transported by ship to American ports, and the total expenditure for production ana delivery of South American borate material to points of manufacture and dis- tribution within this country is, and will continue to be, very cheap when compared with the outlay necessary to produce the material in the Death Valley region and transport the same to the Atlantic coast, there to be refined and manufactured into the commercial product. Such South American competition becomes doubly dan- gerous to the borax industry of this country because of the fact that upon the completion of the Panama Canal the South American producer, chiefly in Chile and Peru, can extract, ship, and deliver crude borate material to New York or other Atlantic seaboard ports SCHEDULE A. 127 PARAGRAPH 11 BORAX. at a less cost than the cost of mining in the Death Valley fields plus the cost of transportation to the eastern seaboard points. If the import duty is removed from borate, as was proposed in House bill 20182 and passed by the House, the industry which has been built up in this country, together with its incidental and attend- ant activities and benefits, would cease. A great amount of valuable property would be forced to lie dormant and to revert to its original condition of an arid, nonproductive desert waste of drifting sand. The only direct result would be to wreck an American industry and take from the channels of trade and commerce the benefits which are now directly derived from such industry in a monetary and commer- cial sense. If, on the other hand, the import duty was maintained upon borate of lime, borax, and boracic acid, the present extensive workings of Death Valley will continue their operations and hun- dreds of persons who are now dependent for support upon such industry and its incidental activities would continue in their present satisfied and prosperous condition, and the other mineral resources of the territory which have been developed hi the past will continue to be prospected and developed in the future. The duties under the present law are a reduction of 60 per cent from what they were under the Dingley law, and under these condi- tions only mines that are fairly well situated from a transportation standpoint are able to operate. Many properties that were formerly operated have been compelled to discontinue operations. We may mention some of these properties : In Oregon, the Rose Valley Borax Co.; in Nevada, the Arnedee Borax Co., the Rhodes-Marsh Borax Co., Teels-Marsh Borax Co.; the borate properties at Columbus, Nev., the Reno Borax Co., in California, the San Bernardino Borax Co. (where the recent potash discoveries were made), and the mine of the Sterling Borax Co. in Ventura County. None of these prop- erties can be profitably worked under the present conditions. It is therefore imperative that instead of putting borate material on the free list the present duty should be maintained and that the duties on refined borax and boracic acid also should not be reduced. The price of borax has decreased over 90 per cent since 1870, when it was 35 cents per pound, to 3| cents per pound in 1912. The annual consumption has increased from approximately 300 tons in 1870 to over 20,000 tons in 1912. The duty has been reduced 60 per cent from what it was under the Dingley bill, 5 cents per pound, to 2 cents per pound under the present law. To remove the duty would close the western mines. The present improvements and desert developments, including 127 miles of broad-gauge railroad, would, however, suffer, which is much to be regretted, for if the borate shipments were discontinued the railroad would have to be abandoned, as the other business would not support the operations of the road, and all development in that region of the Pacific coast would consequently cease. Yours, very truly, PACIFIC COAST BOB AX Co., C. K. FABRISIDE, Eastern Manager. 128 TARIFF HEARINGS. PARAGRAPH Id CAMPHOR. PAEAQEAPH 12. Camphor, refined, and synthetic camphor, six cents per pound. CAMPHOR. AMERICAN CAMPHOR REFINING CO., BOSTON, MASS., URGES RETENTION OF DUTY ON CAMPHOR. BOSTON, January 6, 1918. Hon. OSCAR W. UNDERWOOD, Chairman of Ways and Means Committee, Washington, D. C. SIR: We respectfully bring to your attention the importance to the American refiner of camphor that there should be no change hi the existing rate of duty under the present tariff. Crude camphor is a monopoly of the Imperial Japanese Govern- ment and is admitted free of duty. Refined camphor is manufactured by the American refiner from the crude camphor imported from Japan and Formosa. Notwithstanding a duty of 6 cents per pound on refined camphor, the imports of Japanese refined camphor are constantly increasing, as will be seen by the following statement: Imports Japanese refined camphor. Pounds. 1890 87 1896 153, 912 1900 109, 971 1905 214, 049 1909 430, 524 1910 492, 583 At the present time Japanese refined camphor is selling at from 1 to 2 cents per pound less than the home product, notwithstanding the duty of 6 cents per pound. In consequence of the fact that labor in Japan is less than one- fourth of the amount paid in the United States for similar labor, and as refiners here are not favored as are the refiners in Japan, it will readily be seen that if the duty on the refined product is decreased, or if a duty is placed on crude camphor without a corresponding increase in the duty of refined camphor, the industry in the United States must be discontinued. We shall be pleased to furnish any additional information or to answer any inquiries. Respectfully, AMERICAN CAMPHOR REFINING Co., CHAS. A. WEST, President. BAKER & BRO., NEW YORK CITY, PROTEST AGAINST CHANGE OF DUTY ON CAMPHOR. NEW YORK, January 8, 1918. Hon. OSCAR W. UNDERWOOD, Chairman Committee on Ways and Means, House of Representatives, Washington, D. C. DEAR SIR : In reply to your notice of tariff hearings, dated De- cember 11, 1912, we oeg to submit the following : SCHEDULE A. 129 PARAGRAPH 12 CAMPHOR. "Paragraph No. 12. Refined camphor, present duty, 6 cents per pound." We beg to enter our protest against any changes in the present tariff reducing the tax on refined camphor from 6 cents per pound and placing a duty on the crude material, which is now on the free list. Should the changes in H. R. 20182 become effective, it will be the equivalent of reducing the present duty on refined and synthetic cam- phor 66 per cent. The crude supply of the world is controlled by the Japanese Im- perial Government monopoly. Due to the advantages enjoyed by the Japanese refiners of location and cheap-labor conditions, even under the present duty imports of refined camphor have increased as follows : Pounds. 1890 87 1896 153,912 1900 109,791 1905 214,049 1909 430,524 1910 492,583 We have been refiners of camphor for about 40 years and desire to remain in the business, but any radical changes in the present tariff schedules will put the business in the hands of foreign refiners. We remain, very respectfully, yours, H. J. BAKER & BRO. PFIZER & CO., NEW YORK CITY, REQUESTS THAT PRESENT DUTY ON CAMPHOR BE MAINTAINED. Hon. OSCAR W. UNDERWOOD, Chairman Committee on Ways and Means, House of Representatives, Washington, D. C. DEAR SIR: Pursuant to your notice of tariff hearings, 1913, dated December 11, 1912, we beg to submit the following: The paragraphs mentioned below refer to the present tariff law. Paragraph 12. Camphor, refined, and synthetic camphor. Present rate, 6 cents per pound. It is evident from the fact that refined camphor is constantly being imported into the United States in increasing quantities that the refiners in the United States are not enabled to compete success- fully with the foreign refiners, especially those of Japan, where all the costs of refining camphor are vastly lower than those of our own country. The imports of refined camphor into the United States in 1900 were 109,971 pounds, and have been constantly increasing since then, until in 1911 the imports were 492,111 pounds. We submit, therefore, that if this industry is to be continued in the United States the present duty should be maintained, if not increased. Paragraph 527. Camphor, crude, natural. On the free list of the present tariff. 78959 VOL 1 130 TARIFF HEARINGS. PARAGRAPH 12 CAMPHOR. This is the raw material for the manufacture of refined camphor. Supplies of the world of crude natural camphor are now practically under the control of a monopoly established by the Imperial Japa- nese Government. Crude natural camphor is not only the raw material for refined camphor, but also for other important products manufactured in the United States. We submit that this article should be retained upon the free list. If, however, for reasons of revenue it is deemed wise to place a tariff upon this material, then we suggest that a proportionate increase should be made in the tariff for refined, bearing in mind that 100 pounds of crude camphor represents in the finished refined product 85 to 87 pounds. Respectfully, yours, CHARLES PFIZER & Co. (!NC.), FRANKLIN BLACK, Secretary. NEW YORK, January 6, 1913. STATEMENT BY SOBERING & GLATZ, NEW YORK, N. Y. NEW YORK, January 30, 1913. The honorable COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. G. SIRS: We beg leave to present to your committee for considera- tion the following data relating to the chemical schedule of the tariff revision: 1. Crude synthetic camphor from oil of turpentine. The tariff act of 1909 provides that natural crude camphor enters the United States free of duty, excluding, however, absolutely a crude synthetic cam- phor, because the impurities of the latter are not identical with those of natural camphor. Importers of crude synthetic camphor are required, therefore, to enter the product under the paragraph which provides that "Refined or synthetic camphor shall pay a duty of 6 cents per pound." Competition with the natural product is made impossible, therefore, although it is well known that neither the natural nor the synthetic crude camphor can be used for the production of a satisfactory colorless grade of celluloid. We recommend that this paragraph be changed to read: "Refined natural or synthetic camphor shall pay a duty of 6 cents per pound" and that paragraph 527 dealing with natural crude camphor be supplemented to include also the synthetic crude camphor. 2. Chemical compounds and salts containing alcohol, or in the prep- aration of which alcohol is used. Paragraph 3 of the tariff act of 1909 provided that chemical compounds and salts containing alcohol, or in the preparation of winch alcohol is used, shall pay a duty of 55 cents per pound, but not less than 25 per cent ad valorem n. s. p. f. We recommend that this paragraph be changed to exclude chem- ical preparations in the preparation of which alcohol is used which do not contain alcohol, however, and that an ad valorem duty be provided therefor not higher than that assessed on medicinal prep- arations. The present rate of duty is absolutely unjust, because it exceeds in many instances many times the value of the merchandise. Chloral hydrate, for instance, entering under this paragraph, has a SCHEDULE A. 131 PARAGRAPH 13 CHALK. market value of about 15 cents per pound and the duty thereon is 55 cents per pound. 3. Tannic acid " Tannin." Tannin is specially provided for under paragraph 1 of the tariff act of 1909 to pay duty at the rate of 35 cents per pound. In view of the fact that its market value rarely exceeds 35 cents, we recommend that the duty be modified to an ad valorem rate on the basis of chemical compounds or chemical acids, n. s. p. f. Respectfully, SCHERING & GLATZ. PARAGEAPH 13. Chalk, when ground, bolted, precipitated naturally or artificially, or other- wise prepared, whether in the form of cubes, blocks, sticks or disks, or otherwise, including tailors', billiard, red, or French chalk, one cent per pound; manufactures of chalk not specially provided for in this section, twenty-five per centum ad valorem. See M. Ewing Fox & Co., page 324. CHALK. STATEMENT OF FREDERICK N. TIRRELL, OF STICKNEY, TIRRELL & CO., BOSTON, MASS. Mr. TERRELL. Mr. Chairman and gentlemen, I wish to call your attention = The CHAIRMAN. What industrv do vou speak for? Mr. TIRRELL. Stickney, Tirrell & Co.; Paris white, coming under two different articles in the schedule. First, I will take chalk. Please refer to the present tariff under the free list, page 71, section 531, and page 2, section 13. Please note that H. K. 20182, page 21, section 84, continues chalk on the free list, but the wording of section 17, page 4, would impose a duty on "Chalk, natural," of 10 per cent ad valorem. Eliminate the word "natural" in H. R. 20182 and, as relates to chalk, it is con- sistent. There are no deposits of chalk on this continent from which the American manufacturer can obtain his supply of raw material, so that it must be imported from Europe mostly from England and France paying the ocean freights on same. The advantage to the foreign manufacturer under these conditions is obvious, as he has his whiting factory adjoining the chalk quarry. It is unques- tionably most beneficial to all concerned in this country that chalk "crude or natural chalk" shall be continued on the free list; we understand this to be your intention. In this section 17 please note that chalk, ground or bolted, becomes by this process of manu- facture whiting, and should carry the same rate of duty as whiting and Paris white. We would suggest, to avoid confusion, that the folio whig be stricken out of section 17, page 4, line 24, viz: "Natural ground or bolted, ten per centum ad valorem." Also permit us to call your attention to H. R. 20182, page 20, section 74, line 14, "French chalk, powdered, washed, or pulverized." By this process it becomes whiting and should carry the same duty as whiting and Paris white. Chalk "crude, natural" whether English or French, 132 TARIFF HEARINGS. PARAGRAPH 13 CHALK. reduced to powdered form by any process of manipulation, becomes whiting and Paris white. "Whiting" and "Paris white" are commercial terms and refer to merchandise produced principally from crude or natural chalk. A ton of chalk will not make a ton of whiting or Paris white. It re- quires from 2,700 to 2,800 pounds of the crude material to make 2,000 pounds of whiting or Paris white. The freight and handling charges on this 700 to 800 pounds per ton of waste reduces by so much the duty protection. We have no knowledge of any demand or request from the American consumer for a reduction in the present duty of one-fourth of 1 cent per pound. Please refer to the present tariff, page 5, section 54. Also piease refer to H. R. 20182, page 18, section 65, proposing reduction to one-tenth of 1 cent per pound. The Government has imposed a duty on whiting and Paris white since 1816, and under any and all conditions never less than the present duty, and during most of this period the duty has ranged from one-half to 1 cent per pound, except from July, 1846, to July, 1862, when the "bars were let down," resulting in wide and violent fluctuations in prices, caused by short or oversupply in importations and ruling rates in ocean freights. "Corners" were of frequent occurrence and the very conditions which dealers and consumers seek to avoid were always present, creating an element of uncertainty. During this period the industry languished in this country. The universal sentiment expressed by dealers and consumers is that prices under the present rate of one-fourth of 1 cent per pound are satisfactory and that what is most desired is stability and uniformity of price which is secured to them by competition among the Ameri- can manufacturers and the avoidance of fluctuations certain to pre- vail under a tariff that would eliminate the American manufacturer. The present tariff is not prohibitive, although very little whiting and Paris white is imported. This is because of the low rate of prices of the American manufacturer. There is no trust or combination in the business. There have been no fortunes made by the whiting manufacturers. Competition among American manufacturers is, and always has been, intense. The margin of profit to the American manufacturer is so small that freight rates in this country largely determine the market in which the consumer places his orders. Consumption of whiting and Paris white in this country, based on the statistics of 1911, is about 100,000 tons yearly. If the entire amount were imported under the proposed tariff rate, the Govern- ment would receive about $200,000 in duties and the loss to labor in this country would be about $500,000 to 8600,000 per annum. Labor is all able-bodied men and the scale of wages hi this country ranges from SI. 65 to S3 per day, the same being somewhat over 50 per cent higher than for similar labor in Europe. The cost of chalk and labor to the European manufacturer is from S4.50 to So. 50 per ton less than to the American manufacturer, so that the present rule of one-fourth of 1 cent per pound duty on whiting and Paris white is protecting the American laborer only and does not contribute to the American whiting manufacturer's margin of profit. It Li by superior methods of manufacturing we are able to maintain SCHEDULE A. 133 PARAGRAPH 13 CHALK. this business under the present tariff, and it appears to us the limit of possibilities in that direction is reached. We will be pleased to inform you in detail any information we possess in relation to this industry, believing that careful investigation by your committee will verify these statements and convince you that the industry is not deriving undue profit from the present rate of one-fourth of 1 cent Ker pound duty, that the present rate barely protects the common iborer in this industry in a modest wage, and that any reduction of the present duty is certain to seriously disturb and, 'if the rate proposed is maintained in the new tariff, probably abolish the manu- facture of whiting and Paris white in this country. In this connection it is only fair to state that the investments in mills and machinery, because of their nature, would become practi- cally worthless, seriously crippling the various owners. We therefore protest, and earnestly request that in your proposed bill these articles be placed at not less than that now imposed, and further ask the benefit of your wide influence to give us this measure of justice. I present this not only in my own behalf, but have been requested to do so by the legislative committee of the whiting manufacturers, all of whom have indorsed this, and I would be pleased to present it as the brief of the whiting manufacturers, to be substituted for any brief that any individual member may have filed with your com- mittee, because it embraces substantially all the facts contained in the various briefs that have been submitted. I am also pleased to file with your committee, for reference, a couple of photographs that may be of some interest in determining the competition we are against as regards simply the process of manufacturing. BRIEF OF THE CRESCENT BURNER MANUFACTURING CO., NEW YORK, N. Y. NEW YORK, January 27, 1918. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: We take the liberty of submitting to you herewith specimen of a raw material which is extensively imported into this country for the purpose of manufacturing gas burners and insulators. This material is now taxed, in the condition in which we submit it to you, at 1 cent per pound, the same as talcum powder. We would ask to have this material, which classifies either as "cut steatite" or " German lava," on the free list, as it can not be used in this condition for any other purposes than to manufacture other articles, and in order to reduce it by crushing to powder American labor would have to be added, which amounts to more than 1 cent per pound. We have established a considerable industry with this material, and not only sell these goods all over the United States but also in foreign countries, where we have to compete with the market of Germany, which is also the country of origin of this raw material. 134 TARIFF HEARINGS. PARAGRAPH 15 COAL-TAR DYES. The case would be covered by a paragraph in Schedule B, which would read : " Steatite, German lava, or soapstone, cut either in squares or in trapeze form, free." Very respectfully, CRESCENT BURNER MANUFACTURING Co. PARAGRAPH 14. Chloroform, ten cents per pound. For chloroform, see also Mallinckrodt Chemical Works et al., page 48. PARAGRAPH 15. Coal-tar dyes or colors, not specially provided for in this section, thirty per centum ad valorem; all other products or preparations of coal tar, not colors or dyes and not medicinal, not specially provided for in this section, twenty per centum ad valorem. For other coal-tar products, etc., see also Mallinckrodt Chemical Works et al., page 48; for coal-tar dyes or colors n. s. p. f., see also John F. Queeny, page 81; E. C. Klipstein, page 231; Verona Chemical Co., page 71; and General Chemical Co., page 40. COAL-TAR DYES. STATEMENT OF J. F. SCHOELLKOPF ON BEHALF OF THE SCHOELLKOPF, HARTFOBD & HANNA CO., BUFFALO, N. Y. Mr. SCHOELLKOPF. We respectfully request that no change be made in the rates on coal-tar dyes and allied products, covered by para- graphs 15, 482, 491, 536, 593, and 639, until a careful and expert investigation of the whole chemical schedule has been made by a committee or commission appointed for that purpose. We are members of the Manufacturing Chemists' Association of the United States (with the exception of Central Dyestuff & Chemical Co.) and we thoroughly agree with the position taken by that associa- tion as outlined in the letter of October 31, 1912, addressed to you by the chairman of the executive committee, Mr. Henry Howard. We maintain that the coal-tar color industry has never had adequate protection since the tariff act of 1883, and the most conclusive proof of this is that the large German manufacturers have consistently refused to establish plants in the United States, while they have not hesitated to build branch factories in Russia, France, and England, in all of which countries the consumption of these dyes is smaller than here in America. A further convincing proof that this industry has not received proper encouragement is the fact that since its establishment over 30 years ago it at no time supplied over 20 per cent of the domestic con- sumption, and at the present time more than 80 per cent of the coal- tar dyes used in the United States are imported, principally from Germany. The principal reasons for the nondevelopment of the coal-tar industry in the United States are: (1) Patent law. Up to 1880 the industry was in its infancy every- where, even in Germany. About that tune the first important German patents were taken out. Under our patent laws then, which remain unchanged to this day, the foreign owners of patents were not compelled to manufacture in the United States. The American SCHEDULE A. 135 PARAGRAPH 15 COAL-TAR DYES. manufacturers were therefore restricted to a few colors, such as magentas, rosanilinblues, eosines, chrysoidines, bismarckbrowns, etc. (2) Duty on raw materials. Since 1883 the domestic color manu- facturers were necessarily confined to using coal-tar products which were on the free list and could be obtained in this country on a com- petitive basis, such as aniline oil and salts, benzole, nitrobenzol, arseniate of aniline, etc. For this reason the American maker was slow in taking up new lines even when the expiration of the foreign patents permitted him to do so. (3) Insufficient duty on colors. At no time since 1883, when the specific duty of 50 cents per pound was taken off coal-tar dyes, was the duty on colors high enough to compensate for the difference in cost between America and Europe. This was true even for colors using free raw materials, let alone dyes, the raw materials for which were taxed. (See Table D, annexed hereto.) Immediately following the passage of the tariff act of 1883 more than hah* of the American coal-tar dye factories shut down permanently, and the few remaining plants have kept up the struggle ever since under the most adverse circumstances. We refer to the Report No. 326, on Schedule A, which report was printed to accompany H. R. 20182. On page 17, paragraph 4 of this report, the following language occurs: Probably the most radical change in the chemical schedule made by H. R. 20182 is that of the classification and change of the duties of coal-tar products. The manu- facture of these products is little developed in this country and imports are principally from Germany, where this manufacture is highly developed. The changes alluded to were radical, indeed, for they proposed to reduce the duty on the finished colors and dyes and make the raw materials, which were on the free list, dutiable, thus placing the American manufacturers in a worse position than they ever were in before. Why this industry, already underprotected and in a precarious condition, should be singled out in this manner we do not pretend to understand. If under present conditions it is hardly able to supply 20 per cent of the domestic requirements, one can easily imagine what would happen if these conditions were made infinitely worse by adopting such radical changes as proposed in H. R. 20182. We have annexed hereto the brief submitted to the Ways and Means Committee during the tariff revision of 1909. The statements made in that brief are as true to-day as they were then, and if given the opportunity every statement made therein can be substantiated. WASHINGTON, D. C., March 14, 1912. Hon. BOIES PENROSE, Chairman Senate Committee on Finance. DEAR SIR: The undersigned respectfully wish to protest most emphatically against the amendments to the present tariff law contained in H. R. 20182, paragraphs 21, 23, and 24, for the following reasons: 1. Even with the present duty on coal-tar colors and with coal-tar products coming in free we are barely able to hold our own against our foreign competitors. In fact we can only do so by sacrificing the greater part of our legitimate profits, and if a change is made in the rate for coal-tar dyes it should be increased rather than decreased, as is clearly shown by Tables A, B, C, and D, annexed hereto. 2. If the purpose of making these changes was to increase revenues this object will not be attained, for even if the importers should give the American consumers the benefit of the entire reduction in the duty, the consumption would not be stimulated. 136 TARIFF HEARINGS. PARAGRAPH 15 COAL-TAR DYES. If, as the makers of the bill assume, the value of imported coal-tar dyes would actually increase a million dollars, then as the total consumption of coal-tar ayes in the United States is about seven and one-half millions, of which the American manufacturer produces but one and one-half millions, the result would be to deprive the domestic manufacturers of a million dollars worth of products, which would be equivalent to driving them out of business. 3. The American consumers of coal-tar colors would not be benefited by the reduc- tion in the duty proposed for the reason that the importers would not lower their eelling prices in the same ratio. On the contrary, to judge by similar experiences in the past, the foreign makers, after eliminating American competition, would raise their prices, so that the final result would be higher prices to the American user and smaller revenues to the United States Government. 4. It would be an economic blunder to crush out American competition and abandon the market to the mercy of foreign makers. It has been our experience in the past that whenever we came into the market with a new color the price of this particular dye experienced a decided drop, thus benefiting the American consumer. The mere fact that the industry exists in this country has a restraining influence on the importers, tends to keep prices at their proper level, and saves the American consumer from the arbitrary exactions and high prices of the foreign manufacturers. We beg to call special attention to the fact that our raw materials, which are now on the free list and which this bill proposes to tax, can not be manufactured to advantage in this country for the reason that the individual products are used in comparatively small quantities, which would not warrant the investment of the capital required for their manufacture. We speak from experience in this matter, for we ourselves spent a great many thousand dollars in endeavoring to make these products, but we finally had to give up the attempt. We took up the manufacture of these colors in 1880 and within the next three years eight other factories were established for the same purpose. If this industry had not been so handicapped at that time, America would now doubtless be manufacturing its own requirements in these products. But what happened? The tariff act of 1883 abolished the specific duty of 50 cents per pound, leaving an ad valorem duty of 35 per cent on the colors and 20 per cent on the coal-tar products, the raw materials for the colors. The immediate result was that five of the new factories closed their doors, and the remaining four struggled along under adverse conditions, hoping that some future revision would bring them relief. This hope was in vain, however. On the contrary, the ad valorem duty on the colors was further reduced to 30 per cent in 1897 without any corresponding reduction in the duty on raw materials. During the last revision for the first time in 30 years Congress evinced a disposition to meet us in a fair spirit by adding to the free list these additional raw materials: Naphtylaminsulfoacids and their sodium or potassium salts. Naphtolsulfoacids and their sodium or potassium salts. Amidonaphtolsulfoacids and their sodium or potassium salts. Amidosalicylic acid. Diamidostiibendisulfoacid. Metanilic acid. Paranitranilin. Dimethylanilin. Binitrochlorbenzol. This enabled us to increase our range of colors considerably but it certainly is rather discouraging that barely two years after these changes were adopted, to practically put us out of business by not only again placing a duty on these products but also at the same time lowering the duty on the finished colors to a point where their manu- facture becomes absolutely unnemunerative. We wish to state here that we have signified to the Tariff Board our willingness to open our books to them whenever they are ready to investigate the chemical schedule. In closing we would like to draw your attention to that part of the "Glossary on Schedule A " prepared by the Tariff Board, relating to "Special features of the German chemical industry" (p. '224) (H. Kept. 326, 62d Cong., p. 378) which discloses in a rather startling manner the danger to the domestic consumer of the elimination of American competition. SCHOELLKOPF, HARTFORD & HANNA Co SCHEDULE A. 137 PARAGRAPH 15 COAL-TAR DYES. BUFFALO, N. Y., November 9, 1908. Hon. SERENO E. PAYNE, Chairman Ways and Means Committee. DEAR SIR: The undersigned respectfully request that at the impending revision of the tariff the minimum duty on coal-tar colors and dyes be increased from 30 per cent to 40 per cent ad valorem, and that all coal-tar products and preparations not col- ors or dyes used in the manufacture of these dyes be placed on the free list. In submitting this request we do so with the understanding that it is the intention of Congress to adjust import duties, so as to give the domestic manufacturer adequate protection against his foreign rival, or, in other words, the duties imposed shall cover the difference in cost of the article protected when made in America as against the same article when made abroad. In asking for free entry of all coal-tar products and preparations used in the manu- facture of coal-tar colors, no American industry will be injured, as these articles are not made in the United States, nor can they be manufactured profitably under exist- ing conditions. In order to prove that our demands as outlined above are not unreasonable, we have prepared the following tables: Table A: Showing cost of a coal-tar dye plant in America and Germany designed for a yearly output of 3,000,000 pounds; also showing the .cost for depreciation on buildings and wear and tear on machinery and interest on investment. Table B: Showing number of employees required and their salaries for such a plant in America and Germany. Table C: Showing material required to produce 3,000,000 pounds of color and cost of same under present tariff; also under tariff as proposed by us; also cost of same material in Germany. Table D: Showing comparative cost of 3,000,000 pounds of color when produced in Germany, also cost when produced under present tariff, also cost when produced under tariff as proposed by us. By referring to Table D, it appears that taking the cost of colors in Germany at 100 per cent, the same colors cost to produce in America under the present tariff, 144.1 per cent, and in case all coal-tar preparations should be admitted free, the cost would still be over 134.4 per cent. That our figures are correct is positively proven by two highly significant facts: First. These same colors are now being imported from Germany and sold in this market for less than it costs us to produce them, even omitting charges for depre- ciation and interest on investment. Second. By the fact that German manufacturers do not manufacture in the United States, because, as people high in authority state openly, they can manufacture the colors in Germany and lay them down in the United States, with duty of 30 per cent and manufacturer's profit added, at a lower price than they could manufacture the same colors in America. By referring again to the same table, it appears that under the proposed tariff the cost of colors would be only 35 per cent higher than the same colors when made in Germany, while we are asking for a duty of 40 per cent. It should be borne in mind, however, that in the first place the American manufacturer, in order to secure the home market, must be in a position to undersell the importer, and in the second place, the foreign manufacturer, when driven to it, will always assume part of the duty himself. The result would be that with a duty of 40 per cent the American manu- facturer could not hope to realize more than 30 per cent in excess of what the same goods are sold for in Germany, and probably considerably less. In any event, there- fore, even with a 40 per cent duty the American manufacturer would have to content himself with a considerably smaller profit than his German rival. Since the present tariff went into effect American coal-tar dye manufacturers have striven strenuously to capture the home market, and while they have succeeded in increasing very materially their output, they have done so at no profit to themselves. Whenever the domestic production of any one color increased sufficiently to inter- fere seriously with the sale of the imported product, the foreign manufacturers dropped prices to a point that compelled the American manufacturer to sell at cost or even lower. On the other hand colors not made in America and controlled by the foreign manu- facturers, either through patents or combinations, were not only not reduced but in many instances actually increased in price. Eliminate American competition, and prices, even with a reduced duty, will rise and not fall. We refer to such products as alizarines, aniline salt, aniline oil, beta naphthol, etc., which during the past few 138 TARIFF HEARINGS. PARAGRAPH 15 COAL-TAR DYES. years have advanced from 15 to 50 per cent, although the cost of production has not risen. In conclusion we beg to state that the figures and tables contained in this docu- ment are taken from our books and represent actual conditions, and if desired, we are prepared to prove the correctness of same in every particular. On a separate sheet annexed hereto, marked "Table E," we suggest the wording of the sections in the tariff which we desire to have changed. Respectfully submitted. SCHOELLKOPP, HARTFORD & HANNA Co. THE HELLER & MERZ Co. TABLE A. Table showing cost of coal-tar dye plant designed for a yearly output oj 3,000,000 pounds: also showing the cost oj depredation of buildings and wear and tear on machin- ery, etc. Cost of plant in- United States. Germany. For land $50,000.00 100,000.00 380,000.00 500,000.00 $50,000.00 60,000.00 250,000.00 350,000.00 Fnr buildings For machinery, tools, etc For working capital. Total cost of plant 1,030,000.00 710,000.00 Depreciation on buildings, 5 per cent 5,000.00 38,000.00 61,800.00 3,000.00 25,000.00 42,600.00 Wear and tear on machinery, etc., 10 per cent Into rpst nn invpstrnpnt, fi por npnt Total 104,800.00 70,600.00 TABLE B. Table showing employees needed for a coal-tar dye plant with a yearly capacity of 3,000,000 pounds. United States. Germany. Rate. Total. Rate. Total.' 1 general manager $10,000.00 5,000.00 1,500.00 1,300.00 900.00 1, 144. 00 468.00 312.00 208.00 2, 500. 00 1,800.00 1, 200. 00 900.00 780.00 500.00 364.00 1,560.00 1,200.00 1,040.00 780.00 728.00 624.00 780.00 936. 00 676. 00 624.00 718.00 540.00 $10,000.00 10,000.00 6,000.00 1,300.00 900.00 3,432.00 468.00 312.00 416.00 2,500.00 1,800.00 1, 200. 00 2, 700. 00 780.00 1,000.00 364.00 1,560.00 1, 200. 00 2,080.00 4,680.00 1,456.00 1,248.00 3, 120. 00 1,872.00 1,352.00 2, 496. 00 7,180.00 44, 820. 00 $5,000.00 2,500.00 1,000.00 800.00 600.00 390.00 160.00 135.00 78.00 1, 220. 00 900.00 600.00 450.00 350.00 250.00 160.00 750.00 450.00 520.00 390.00 390.00 390.00 390.00 468.00 468.00 2CO.OO 390.00 300.00 $5,000.00 5,000.00 4,000.00 800.00 600.00 1,170.00 160.00 135.00 156.00 1,200.00 900.00 600.00 1,350.00 350.00 500.00 160.00 750.00 450.00 1,040.00 2,340.00 780.00 780.00 1,560.00 936.00 936. 00 1,040.00 3,900.00 24,900.00 2 head chemists 4 chemists . Do 3 dyers 1 helper Do.. 2 boys. 1 head bookkeeper 1 clerk Do 3 clerks. 1 clerk 2 boys 1 telephone operator 1 superintendent 1 shipping clerk 2 engineers C firemen 2 watchmen 2 teamsters . 4 carpenters 2 machinists . . 2 blacksmiths 4 helpers 10 foremen 83 laborers Total... llo,236. 00 61,493.00 SCHEDULE A. 139 PARAGRAPH 15 COAL-TAR DYES. TABLE C. Material required for 3,000,000 pounds of coal-tar dyes and cost of same. Chemicals used. Quantities in pounds. Cost in United States Cost in Germany. Under present tariff. Under pro- posed tariff. Nitrite soda 385,803 1,369,125 122,814 790,875 111,942 3,371,280 4,860 2,880 4,437 139,041 68,445 593,145 54,270 29,295 35,910 9,630 4,032 12,420 18,720 19,908 47,952 104,625 23,400 25,740 218,340 $29,899.74 10,268.43 409.38 7,592.40 2,417.94 5,899.74 65.61 144.00 1,668.30 16, 128. 75 16,426.80 206,414.46 4,205.94 4,247.79 9,605.91 1,661.16 695.52 5,464.80 4,867.20 4,411.62 5.591.19 22J 965. 18 7,317.18 8,494.20 66,047.85 $29,899.74 10,268.43 409.38 7,592. 40 2,417.94 5,899.74 65.61 144.00 1,387.89 16,128.75 13,689.00 172,605.21 4,205.94 3,544.71 7,989.96 1,396.35 584.64 4,558.14 2,822.97 4,081.14 5,072.22 21,228.09 5,974.02 8,494.20 66,047.85 $23,919.79 8,214.74 327.50 6,073.92 1,934.35 4,719.79 52.49 115.20 1,110.31 12,903.00 10,951.20 138,084.17 3,364.75 2,835.77 6,391.96 1,117.08 467.71 3,646.51 2,258.38 3,264.91 4,057.78 16,982.47 4,779.22 6,795.36 52,838.28 Muriatic acid Sulphuric acid Carbonate soda Caustic soda Common salt Sulphide sodium Ammonia 26' mono-aethyl . . Alpha naphthylamine . . ... Aniline oil Paranitraniline H-acid Alpha naphthylamine R-salt . . . t " A Tnidn-fr-sfl.lt . L ..... Freund's acid Cleve acid Gamma acid Salicylic acid A A Tm Ba A B Sp Sa A A Bm Ba A A TmS Tolidine. Benzidine Total.. 7,568,889 442,911.09 396,508.32 317,206.64 TABLE D. Cost of producing 8,000,000 pounds of coal-tar dyes. Materials, labor, fuel, etc. When made in United States. When made in Germany. Under present tariff. Under proposed tariff. Materials... $442,911.09 20,250.00 116,236.00 61,800.00 43,000.00 8,000.00 $396,508.32 20,250.00 116,236.00 61,800.00 43,000.00 8,000.00 8317,206.64 27,000.00 61,493.00 42,600.00 28,000.00 4,000.00 Fuel Labor Interest on investment Depreciation on plant Taxes, fire insurance, and incidentals Total 692,197.09 645,784.32 480,299.64 Per cent 144.1 134.4 100 140 TARIFF HEARINGS. PARAGRAPH 15 COAL-TAR DYES. TABLE E. Present wording. New wording suggested. SEC. 15. Coal-tar dyes or colors, not specially pro- vided for in this act, thirty per centum ad valorem; all other products or preparations of coal tar, not colors or dyes and not madicinal, not specially pro- vided for in this act, twenty per centum ad valorem. Coal-tar dyes or colors, not specially provided for in this act, forty per centum ad valorem. FREE LIST. SEC. 469. Alizarin, natural or artificial, and dyes derived from alizarin or from anthracin. SEC. 524. Coal tar, crude, pitch of coal tar, and products of coal tar known as dead or creosote oil, ben- zol, toluol, naphthalin, xylol, phenol, cresol, xylidin, toluidine, cumidin, binitrotoluol,binitrobenzol, ben- zidin, tolidin, dianisidine, naphthol, naphthylamin, diphenylamin, benzaldehyde, benzyl chloride, re- sorcin, nitrobenzol, and nitrotoluol; all the forego- ing not medicinal and not colors or dyes. SEC. 580. Indigo. No change suggested. . Coal tar, crude, and all products or preparations of coal tar, not colors or dyes and not medicinal, not specially provided for in this act. No change suggested. The CHAIRMAN. Now, if you are through with your brief, let me ask you a question. The manufacturer of coal-tar dye in this country is really assembling a partly finished product and it is only the question of assembling what has already been manufactured after it gets into this country? Mr. SCHOELLKOPF. Oh, no. The CHAIRMAN. I wish you would describe that to the committee. In the first place tell us what raw material you import. Mr. SCHOELLKOPF. We import coal-tar products, nitrate of soda, and we use very many domestic chemicals, sulphuric and muriatic acid, caustic soda, and soda ash, common salt, coal, etc. The CHAIRMAN. What do you do after you get those acids, sodas, or manufactured products when they come in here ? When you get them here, what do you do to make your product? Mr. SCHOELLKOPF. We put them through the regular process of manufacture, combining certain chemicals under certain conditions. The CHAIRMAN. That is merely the process of mixing them together ? Mr. SCHOELLKOPF. Much more. Chemical changes take place there very radical chemical changes. The CHAIRMAN. Of course, chemical changes take place, but I am talking about a mechanical proposition, as far as labor and time are concerned. It is a question of mixing them together? Mr. SCHOELLKOPF. Oh, no, Mr. Chairman; you are entirely mis- informed there. It takes us about four weeks to complete the manu- facture of our color. The process takes us four weeks. You can hardly say that it is simply stirring them together. There are quite a few manufacturers on the other side that do the same thing we do. They buv the intermediate products or raw materials and manu- facture the color from those. The CHAIRMAN. I am trying to get this proposition: The four weeks that it takes, is that in the process of manufacture all of that time, or do you mix them together and wait for four weeks ? Mr. SCHOELLKOPF. Oh, no. SCHEDULE A. 141 PARAGRAPH 15 COAL-TAR DYES. The CHAIRMAN. Describe to the committee what you do. After you get this manufactured product that you use for your manu- factured product, what do you do ? Mr. SCHOELLKOPF. Well, we will take one color; for instance, magenta; we would mix nitrpbenzol with aniline oil and apply heat. That would probably be agitated for four days. Then trie surplus aniline oil is removed by distillation. The resulting crude smelt is then dissolved in large tanks, and then drawn off in large vats. Here about 30 per cent of the color crystallizes. The remaining liquor is again boiled down and recrystaUized. This process is repeated until all of the color is exhausted, the whole process taking about two months. The CHAIRMAN. What is the total cost of manufacture hi your plant, including labor and raw material ? Mr. SCHOELLKOPF. The labor is about 20 per cent and the crude material is about 60 per cent. The CHAIRMAN. And the overhead charges are about how much ? Mr. SCHOELLKOPF. They make up the balance of about 20 per cent. The CHAIRMAN. Sixty per cent for raw material; is that your raw material ? Mr. SCHOELLKOPF. Yes. The CHAIRMAN. Twenty per cent for labor and 20 per cent for over- head charges ? Mr. SCHOELLKOPF. Yes. The CHAIRMAN. Are there any further questions to ask the witness ? Mr. SCHOELLKOPF. There are a few more remarks I would like to make, Mr. Chairman. Mr. HILL. This is what strikes me as a typical case with reference to this schedule, and I want to ask you a question or two. Three years ago you came before this committee and submitted your books as to the results of your business. Mr. SCHOELLKOPF. Yes, sir. Mr. HILL. I have before me the statement that you made at that time, showing the cost of coal-tar dyes made from the intermediate products of coal tar, showing a difference of 44 per cent between this country and Germany. Mr. SCHOELLKOPF. Yes. Mr. HILL. Those books were examined by the chairman of the committee, and as a result a duty of 35 per cent instead of 44 per cent was recommended. Mr. SCHOELLKOPF. Yes, sir. Mr. HILL. The Senate cut that down to 30 per cent ? Mr. SCHOELLKOPF. Yes, sir. Mr. HILL. You have been going on with that duty since, have you not? Mr. SCHOELLKOPF. Yes. Mr. HILL. Have there been any excessive profits under that duty, from that time to this ? Mr. SCHOELLKOPF. No, sir; in fact, our profits are less. 142 TARIFF HEARINGS. PABAGBAPH 15 COAL-TAB DYES. Mr. HILL. I suppose you are perfectly willing to submit your books to the chairman of the committee, are you not, just as you did three years ago ? Mr. SCHOELLKOPF. Yes, sir. Mr. HILL. This proposed bill I will not say that; I have no authority to say that but the bill that was proposed by the Dem- ocratic House last session provided for cutting down that duty 5 per cent? Mr. SCHOELLKOPF. Yes : from 30 to 25 per cent. Mr. HILL. And for increasing the duty on raw material 10 per cent? Mr. SCHOELLKOPF. Yes. Mr. HILL. I see by your statement here, which I assume you still continue as correct, notwithstanding the lapse of three years' time Mr. SCHOELLKOPF (interposing) . I do. Mr. HILL. That the materials constitute about two-thirds of the cost of the product. Mr. SCHOELLKOPF. About that. Mr. HILL. So that the duty on the materials would be 6.6 per cent of the entire product, making a reduction of 11.6 per cent. Mr. SCHOELLKOPF. Yes. Mr. HILL. On that duty of 30 per cent. Mr. SCHOELLKOPF. Yes. Mr. HILL. Can you carry on that industry at 18.6 per cent duty without a reduction of labor? Mr. SCHOELLKOPF. We can not carry it on and make any money out of it. Mr. HILL. Can you carry it on without a reduction in the cost of labor, at a duty of 18.6 per cent? Mr. SCHOELLKOPF. If that bill was passed as it is now, and leaving the labor as it is, we could make absolutely no profit. Mr. HILL. How much of a reduction, in your judgment, in the cost of labor, would be necessary, with a duty of 18.6 per cent on coal-tar d}^es and colors ? Mr. SCHOELLKOPF. We would have to cut down our labor one-half. Mr. HILL. About one-half ? Mr. SCHOELLKOPF. Yes. Mr. HILL. Could you do it; would it be possible to do that? Mr. SCHOELLKOPF. No ; we could not do it. Mr. HILL. It is proposed, as to coal-tar dyes and colors, to put a 10 per cent duty on the raw materials and cut the finished product 5 per cent, and that would absolutely compel you to stop the industry of making coal-tar dyes and colors ? Mr. SCHOELLKOPF. Unless we wanted to carry it on at a loss. Mr. HILL. To go one step further: Would there be any revenue received whatever on the 10 per cent duty on the intermediate products ; would there be any imported under ohose circumstances ? Mr. SCHOELLKOPF. Not so far as we are concerned. Mr. HILL. And you are typical of the industry, are you not; you are about as large as anybody in it ? Mr. SCHOELLKOPF. Yes, sir. SCHEDULE A. 143 PARA GRAPH 15 COAL-TAR DYES. Mr. HELL. Then there would be no revenue; from the standpoint of revenue there would be no gain in this bill by putting 10 per cent on the intermediate coal-tar products? Mr. SCHOELLKOPF. I woula not say that absolutely, because some are used outside of colors. Mr. HILL. So far as your industry is concerned there would be no gain in revenue ? Mr. SCHOELLKOPF. No. Mr. HELL. It would be necessary, then, to increase the importa- tions, the quantity of importations of the finished product, enough to make up for the 5 per cent loss in duty on the finished product ? Do you not think that would be done ? Mr. SCHOELLKOPF. No. Mr. HULL. Did you reduce the price of labor when these other reductions were made in the present law ? Mr. HELL. There was no reduction. Mr. HULL. I misunderstood the witness, then. Mr. KITCHIN. There was a reduction by the Dingley bill from the act of 1883 and by the act of 1897, was there not? Mr. SCHOELLKOPF. There was a reduction in 1883. Mr. KITCHIN. Was the reduction in 1883 greater than in 1897? Mr. SCHOELLKOPF. We were hardly started hi 1883. Mr. KITCHIN. There were some industries in 1883, were there not? Mr. SCHOELLKOPF. They did not amount to very much in those days. Mr. KITCHIN. If there were no industries, what did they want to reduce the tariff for ? Mr. SCHOELLKOPF. They wanted to get goods in cheaper, I presume. Mr. KITCHIN. Do I understand that they reduced the wages after 1883, after reducing the tariff? Mr. SCHOELLKOPF. We can not reduce wages. Mr. KITCHIX. In fact, wages have been increased since the tariff has been decreased, have they not ? Mr. SCHOELLKOPF. Yes. Mr. KITCHIN. You told Mr. Hill you could not make any money with 18 per cent tariff on the finished product? Mr. SCHOELLKOPF. We are making very little now. Mr. KITCHIN. Very little now on 30 per cent? Mr. SCHOELLKOPF. Yes. Mr. KITCHIN. How much do you think would be a fab* rate, so that the industry could make as much profit as the industry would like to make? Mr. SCHOELLKOPF. It is not a question of what we would like to make. It is a question of what is fair. Mr. KITCHIN. Well, reasonable? Mr. SCHOELLKOPF. I think 35 per cent. Mr. KITCHIN. Thirty-five per cent? Mr. SCHOELLKOPF. We are not asking for that, you understand, but that would be the fair thing. Mr. KITCHIN. You think 35 per cent would satisfy you? Mr. SCHOELLKOPF. It would satisfy me. 144 TARIFF HEARINGS. PABAGBAPH 15 COAL-TAB DYES. Mr. KITCHIN. How many wage earners are employed in this industry ? Mr. SCHOELLKOPF. Altogether, probably six or seven hundred. Mr. KITCHIN. How many ? Mr. SCHOELLKOPF. Probably six or seven hundred, I presume, altogether. Mr. KITCHIN. You mean that is for your own plant ? Mr. SCHOELLKOPF. No; our plant has only about 300. Mr. KITCHIN. The whole industry employs six or seven hundred? Mr. SCHOELLKOPF. I imagine so. I do not know how many the other plants have. Mr. KITCHIN. That is, in the entire country ? Mr. SCHOELLKOPF. That is directly employed in the industry. Of course, indirectly, there are more employed. Mr. KITCHIN. I understand. What is the average amount of wages ? Mr. SCHOELLKOPF. Well, to our ordinary labor we pay about $2 a day. Mr. KITCHIN. $2 a day ? Mr. SCHOELLKOPF. Yes; then, of course, it goes up; to skilled labor we pay $3 and more. We employ quite a few mechanics and pipe fitters, and other skilled hands. Mr. KITCHIN. Do you work any women ? Mr. SCHOELLKOPF. No. Mr. KITCHIN. How many hours a day do they work? Mr. SCHOELLKOPF. Nine to ten hours. Mr. KITCHIX. Do you work any children under 16 years of age? Mr. SCHOELLKOPF. No, sir. Mr. KITCHIN. Do you know about how much yearly the imports of this color are ? Mr. SCHOELLKOPF. Yes. Mr. KITCHIN. How much ? Mr. SCHOELLKOPF. About six millions. Mr. KITCHIX. How much ? Mr. SCHOELLKOPF. About six millions. Mr. LONGWORTH. Do you know what wages are paid in Germany for the same class of labor ? Mr. SCHOELLKOPF. They pay about 3^ marks. Mr. LONGWORTH. About 80 cents ? Mr. SCHOELLKOPF. It is about 80 to 90 cents. Mr. LONGWORTH. I want to ask you this question: Is your labor more efficient than the labor in Germany? Mr. SCHOELLKOPF. Xo. Mr. LONGWORTH. It is not more efficient ? Mr. SCHOELLKOPF. Not in our industry. Mr. LONGWORTH. Man for man, your labor is not more efficient than corresponding labor in Germany? Mr. SCHOELLKOPF. No. sir. Mr. LONGWORTH. But your wages are more than they are in Germany ? Mr. SCHOELLKOPF. Yes, sir. If we could make the difference in our wages we would be satisfied. SCHEDULE A. 145 PARAGRAPH 15 COAL-TAR DYES. Mr. JAMES. Is there any tariff on these articles in Germany? Mr. SCHOELLKOPF. No, sir. Mr. JAMES. They are admitted free? Mr. SCHOELLKOPF. But there is a tariff in France and in Russia. There is no tariff in Germany. Mr. JAMES. Speak a little louder. Mr. SCHOELLKOPF. There is no tariff in Germany, but there is in France and Russia. Mr. KITCHIN. Is not the tariff in Germany on the finished product and no tariff on the raw materials ? Mr. SCHOELLKOPF. They do not need any tariff. They would have one quickly enough if they needed one. Mr. JAMES. Why not ? Mr. SCHOELLKOPF. Because they put tariffs on. I know of other goods that are imported into Germany, and when they found the domestic manufacturers could not compete they put a tariff on. Mr. JAMES. I say, why is it they do not need any. You said they do not. Mr. SCHOELLKOPF. Because they can produce goods cheaper than we can here. Mr. LONGWORTH. Is not that because their labor in chemicals, in a general way, is more efficient than in this country? Mr. SCHOELLKOPF. I would not say that; but their labor is cheaper. Where we pay $200,000 they pay $100,000. Mr. KITCHIN. Is not that same labor, so far as dollars and cents are concerned, cheaper in every other single industry than it is here ? Mr. SCHOELLKOPF. How is that ? Mr. KITCHIN. Is not the labor in Germany in every other industry cheaper, as far as dollars and cents are concerned, or as far as the amount they pay per day is concerned, than it is in this country ? Mr. SCHOELLKOPF. Labor is cheaper, certainly. Mr. KITCHIN. Yet the German tariff is the highest of all foreign tariffs, is it not, on practically everything ? Mr. SCHOELLKOPF. That may be on some articles. On some things possibly we have an advantage. Take leather, for instance Mr. KITCHIN. Take what ? Mr. SCHOELLKOPF. Leather. I know my father started to import leather in 1873 into Germany, until they put the tariff so high that he could not import a cent's worth any more. Mr. KITCHIN. I wish to say that Germany has a tariff on dyes, but none on the raw material. The CHAIRMAN. Is there any other difference in cost between your mill and your competitors in Germany, except the labor cost ? Mr. SCHOELLKOPF. Well, there is a difference in the cost of mate- rial. Our materials, if we imported them free, would cost pretty nearly 10 per cent more than they do on the other side. The CHAIRMAN. Do you mean on account of the tax ? Mr. SCHOELLKOPF. On account of the freight and charges of one kind and another. The CHAIRMAN. They pay freight charges on the other side that more than equalize the freight rate on your raw material ? 78959 VOL 113 10 146 TARIFF HEARINGS. PARAGRAPH 15 COAL-TAR DYES. Mr. SCHOELLKOPF. Yes; but it is relatively small. You see the finished product costs more. The freight on a 30-cent article is not much more, if anything more, than freight on a 5-cent article, while on a 5-cent article it would amount to 10 per cent and on a 30-cent article it would only amount to 2 or 3 per cent. The CHAIRMAN, How much difference would there be in the cost on account of the freight, do you think ? Mr. SCHOELLKOPF. On that finished product ? The CHAIRMAN. Yes. Assuming that there is a difference in the freight rates in bringing them over, how large a percentage on your total output, your total product, would that amount to ? Mr. SCHOELLKOPF. Well, 60 per cent of our product is raw mate- rial, and that costs us 10 per cent to import; it would mean that ours would cost us 66 per cent where it would only cost them 60 per cent on the other side. The CHAIRMAN. About 6 per cent difference ? Mr. SCHOELLKOPF. No; 10 per cent difference. The CHAIRMAN. What? Mr. SCHOELLKOPF. Ten per cent. The CHAIRMAN. Do you think that difference is as much as 10 per cent? Mr. SCHOELLKOPF. Yes. The CHAIRMAN. The main difference in the cost, then, is in refer- ence to getting your raw materials here, your freight rates, etc., and your labor cost? Mr. SCHOELLKOPF. Yes; and not only that. Of course, our do- mestic products are more expensive. Take our acids. They cost a great deal more here than they do on the other side. Our buildings cost a good deal more than they do on the other side. Our repairs cost double what they do on the other side, and there are quite a lot of repairs in the chemical industry in general. The CHAIRMAN. That is only a small percentage of your total out- put, is it not ? Mr. SCHOELLKOPF. No; it is quite an item. I have set it all out in that brief. The CHAIRMAN. Let me ask you one question there: You said the difference in the labor cost is about as one is to two; that is, you pay pay twice as much as thev do on the other side ? Mr. SCHOELLKOPF. Yes; fully. The CHAIRMAN. And your total labor cost on that product is only 20 per cent of the value of the product ? Mr. SCHOELLKOPF. Yes. The CHAIRMAN. Then 10 per cent of the value of the product would cover the difference in the labor cost? Mr. SCHOELLKOPF. Certainly. The CHAIRMAN. So that if we add an 18 per cent net tariff to you, there is a margin of 8 per cent above your difference in labor cost to cover these other charges, is there not? Mr. SCHOELLKOPF. Yes; I know; but they are more than made up by the other increased expenses. The CHAIRMAN. Well, we are not very far wrong in equalizing the difference in cost in that 18 per cent, are we? SCHEDULE A. 147 PARAGRAPH 15 COAL-TAR DYES. Mr. SCHOELLKOPF. Yes, you are, because I showed just a moment ago that if these materials that we import would come in free they would cost us about 10 per cent more than they pay on the other side. There is more than 18 per cent right there. The CHAIRMAN. What is that? Mr. SCHOELLKOPF. If we import the raw material, it costs us about 10 per cent more to import it on account of the charges. The CHAIRMAN. If you have 18 per cent above the difference in the raw material, after you equalize the duty on the raw material, in subtracting that from the duty you have on the finished product you still have 18 per cent net profit to you under this bill that Mr. Hill was questioning you about ? Mr. SCHOELLKOPF. No, Mr. Chairman, you are mistaken there. That is so theoretically; but, 'of course, we pay in addition to the 10 per cent that you intend to impose on the raw material 10 per cent in charges, so that we are really paying 20 per cent, under a law like that, more for our raw materials than they pay on the other side. I say, if it comes in free, it would cost us 10 per cent to import it. Now, if you put another 10 per cent on, it would be 20 per cent; then 10 per cent increase in the cost of labor would mean 30 per cent right there. The CHAIRMAN. I realize that. But if you subtract the duty placed on the raw materials from the duty we gave you on the finished product, that would leave you with a net duty of about 18 per cent. Mr. SCHOELLKOPF. No. You have 10 per cent on the raw materials and 25 per cent on the colors. The CHAIRMAN. You just a moment ago stated to Mr. Hill that his statement to that effect was correct. Mr. SCHOELLKOPF. That is under the present law. The CHAIRMAN. He did not ask you about the present law; he asked you about the proposed bill that came before Congress the last time, and you stated, in answer to his question, that there was an 18 per cent difference, which is the fact. If you will take the figures and estimate them, you will find that there is a difference of 18 per cent between your raw material and your finished product. You agreed to that when Mr. Hill asked you the question. Now, if you have an 18 per cent difference in the net protection to you, incidental or other- wise, and your 10 per cent equalizes your difference in labor cost and your cost of transportation and assembling these products, which according to your statement is 10 per cent, this duty must very closely equalize your difference in cost. Mr. LONGWORTH. I did not understand him to say that 10 per cent would equalize the difference in cost. Mr. KITCHIN. Do you mean to say that 20 per cent of the finished product represents labor? Mr. LONGWORTH. He said 10 per cent would equalize only the difference in labor cost. The CHAIRMAN. He said that the total labor cost was 20 per cent of the finished product. He said the difference in labor cost was about one as to two, and that he paid $200,000 and they paid $100,000. It is self-evident that if that is the case 10 per cent would equalize the difference in labor cost 10 per cent of the finished product would 148 IABIFF HEAEINGS. PARAGRAPH 15 COAL-TAR, DYES. equalize the difference in labor cost. That is merely a mathematical calculation. Mr. KITCHIN. What I do not understand is his statement that he still would have about 10 per cent. Mr. SCHOELLKOPF. Because the freight charges and the charges in bringing them through the customhouse will amount to 10 per cent of the cost of the raw materials. Mr. KITCHIN. Do you mean to say it is 10 per cent on the raw mate- rials you use that the freight charges are 10 per cent ? Mr. SCHOELLKOPF. Exactly; we figure about a cent a pound. Mr. KITCHIN. You figure that, but what does it actually cost ? Mr. SCHOELLKOPF. It does cost actually that much; it may be more on some and a little less on others. Mr. KITCHIN. Do not the foreigners have to pay these freight charges too? Mr. SCHOELLKOPF. If we get an article that costs 5 cents a pound the charges will be 20 per cent, and on a 10-cent article would be about 10 per cent. Mr. KITCHIN. Would not the foreigners who are competing with you have to pay that 10 per cent on the finished material too ? Mr. SCHOELLKOPF. But where they import a pound of color, we have to import two pounds of this raw material, and they pay the freight on the high-priced article where the percentage will probably be 2 or 3 per cent. The average price of our colors which we sold last year was 33 cents. Mr. KITCHIN. Would there be a higher freight rate on the finished articles ? Mr. SCHOELLKOPF. Very little, if any. Mr. HILL. The chairman has asked you what the difference in labor cost is, and you state 10 per cent, and that, according to your brief, is correct; that is, 10 per cent of the American cost, and he asks you the question whether 18 per cent would not cover it and more too. Is it not a fact, commonly overlooked, that the import duty is laid on the cost of the foreign product and not on the Ameri- can product, and that therefore it would take 20 per cent to cover the difference in labor cost, if the difference was 10 per cent of the American cost, being about one- half as you stated? Mr. SCHOELLKOPF. Yes; I presume that would be so. Mr. HILL. Of course, that is true, that the duty is laid on the foreign cost and not on the American cost. So that the duty to cover the difference in labor cost alone, according to your own show- ing here, would have to be more than 18.6 per cent, which you have said would be the difference under this new tariff. Now, I want to ask you another question on the general industry. Mr. SHACKLEFORD. You do not wait to hear his answer to your other question. Mr. HILL. I will wait. That is correct, is it not ? Mr. SCHOELLKOPF. Yes. It is exactly so. Mr. HILL. The difference is 10 per cent of the American cost of labor and that is twice as much as the foreign cost of labor ? Mr. SCHOELLKOPF. Yes. SCHEDULE A. 149 PARAGRAPH 15 COAL-TAR DYES. Mr. HILL. Consequently, a compensating duty on a foreign prod- uct of half the American value would have to be twice 10 per cent to make up that difference. I think that is plain enough. Mr. SHACKLEFORD. Not at all. Mr. HILL. If I recollect rightly, you stated three years ago that the patents on these coal-tar dyes had largely expired, did you not ? Mr. SCHOELLKOPF. Yes. Mr. HILL. So that they had become open to American competition ? Mr. SCHOELLKOPF. Yes. Mr. HILL. That is correct? Mr. SCHOELLKOPF. Yes, sir. Mr. HILL. Are there still a large number of patents in coal-tar dyes that are still held by the Germans ? Mr. SCHOELLKOPF. There are quite a large number, but they are not as important as those that have expired. Mr. HILL. So that competition would not be complete, so far as the general range of coal-tar dyes is concerned, but only on those that are not covered by German patents held in this country ? Mr. SCHOELLKOPF. Yes; but at the same tune if we could make the colors that are open to us to make that are not patented, and if we could make those and make them at a profit, we would be perfectly satisfied. That would be the bulk of the colors that are in use at the present tune. Mr. HILL. So far as the coal-tar dyes are concerned that are covered by patents, they are owned absolutely by a syndicate in Germany, are they not, so that it is a trust-controlled product abso- lutely? Mr. SCHOELLKOPF. That is true. Mr, HILL. So far as those patents are concerned? Mr. SCHOELLKOPF. Yes. There are two combinations over there, but they work together, as I understand. Mr. HILL. I have a list of them here in the committee's report, a list of five concerns in Germany that were the owners of the patents on coal-tar dye products in the United States. Is not the effect of this legislation, if carried into effect, to give absolute control to a foreign trust, a syndicate authorized and legalized by the German Government, and to give them the benefit of the American trade rather than give the advantage to American manufacturers? Mr. SCHOELLKOPF. That is well known. Mr. KITCHIN. That is what? Mr. SCHOELLKOPF. That is well known, that fact. Mr. SHACKLEFORD. Other things being arranged by Congress, as you think they ought to be, the question of patents would not inter- fere with your successful manufacture of these articles ? Mr. SCHOELLKOPF. No; I do not think so. Mr. SHACKLEFORD. There are no patents that would interfere with your manufacturing as cheaply as other nations if you could get other matters arranged to your liking? Mr. SCHOELLKOPF. There are some colors that we oould not manu- facture at the present time. Mr. SHACKLEFORD. But you do not regard that as materially interfering ? 150 TAEIFP HEARINGS. PARAGRAPH 15 COAJL-TAR DYES. Mr. SCHOELLKOPF. But the more important colors are open to competition. Mr. HULL. The cost of machinery, tools, and so forth, constitute more than a third, in the neighborhood of a hah 1 , of the total cost of one of these plants, does it not ? Mr. SCHOELLKOPF. Yes; just about. Mr. HULL. Where do you get your machinery? Do you import any of it ? Mr. SCHOELLKOPF. No; we get it all here in America. Mr. HULL. What are the tariff rates on machinery that you use ? Mr. SCHOELLKOPF. What are the rates ? Mr. HULL. Yes. Mr. SCHOELLKOPF. I do not know. Our machinery is mostly iron. Mr. HULL. Do you know what effect the present rate on the machinery you use has on the prices ? Mr. SCHOELLKOPF. In our statement we show that the interest on the investment was $61,800 for a certain sized plant, against $32,400 in Germany. Mr. HULL. What I was getting at is, what is the present effect of the existing tariff on the prices or the machinery you use ? Mr. SCHOELLKOPF. I do not know that it would have very much effect, because the things that we use are largely cast iron and it is doubtful whether we could import that, pay the freight on the stuff, and get it out much cheaper, even if the present duty was lowered. Of course, it costs us quite a little more here than it does on the other side, but it is doubtful in my mind whether it would help us very much i the duty was reduced on those goods. Mr. KITCHIN. If we keep the tariff like you want it on your prod- ucts, you are willing to keep the tariff on machinery and others like they want it ? Mr. SCHOELLKOPF. We have not interested ourselves by any study along those lines; we have not looked into it for that feature; but I do not see how that would help us very much. Mr. KITCHIX. That is a sort of general understanding ? Mr. SCHOELLKOPF. A good deal of that machinery is made after our own plan, and we would never think of going to Germany or France and have the machinery made and wait probably three or four months for it, particularly if we could have it made here. Mr. KITCHIN. In other words, your interests are not asking for any reduction in the tariff on machinery and such apparatus or anything of that kind ? Mr. SCHOELLKOPF. We are not asking, at this hearing, for any- thing of that kind. We are simply asking that the rates on these products of our manufacture be let alone until some committee can satisfy itself as to what is needed. Mr. KITCHIX. To be left alone, and if touched at all, to be increased a little ? Mr. SCHOELLKOPF. We are not asking for that. We are simply asking the committee to look carefully and properly into the thing. We are willing to open our books, and if we can satisfy them we are entitled to more, then give us more; and if after they have looked into SCHEDULE A. 151 PARAGRAPH 15 COAL-TAR DYES. the matter they do not think we should have it, or they think it should be lowered, let them put it down. Mr. JAMES. In this brief that you have filed here you make the statement that the machinery here costs you more than the machinery costs your competitors in Germany ? Mr. SCHOELLKOPF. That is true. Mr. JAMES. Is that caused by reason of the fact that you have a better class of machinery, or by reason of the tariff ? Mr. SCHOELLKOPF. No; it is by reason of cheaper labor on the other side. Of course they can produce machinery on the other side cheaper than we can here. Mr. JAMES. Then, there is a tariff on that machinery, or else you would buy it instead of American machinery, if you could buy it cheaper ? Mr. SCHOELLKOPF. I doubt whether we could import it. Mr. JAMES. I say, if you could buy machinery manufactured hi Germany cheaper than American machinery, you would buy it as a matter of economy ? Mr. SCHOELLKOPF. Probably so, as a matter of economy; but most of our machinery is hi the nature of replacements, where we must be in touch with the foundry or the machine shop, right in our own town, so that if anything comes up where any slight change must be made, we can go right there and attend to it. I do not think we could do that with the special machinery required in our business if we bought it at long range. Mr. JAMES. There is a tariff, then, on your own machinery, you say? Mr. SCHOELLKOPF. I presume there is. Mr. JAMES. And for that reason it costs you more to run your busi- ness? Mr. SCHOELLKOPF. It costs us more for our plant. Mr. JAMES. And you want this committee, in arranging the tariff, to allow you a duty that will equalize that charge which is made upon you by the tariff on the article you use ? Mr. SCHOELLKOPF. As I said before, I do not know whether that would make much difference, or whether there is any duty on the machinery or not. Mr. JAMES. But you do state it in here as a fact Mr. SCHOELLKOPF. (interposing) . That it costs us more. Mr. JAMES. And your reason in doing that was to call it to our attention. Mr. KITCHIN. If we reduce the tariff on the articles that you buy you could stand a little reduction ? Mr. SCHOELLKOPF. Reduce what article? On machinery? Mr. KITCHIN. I mean the product of your plant. Mr. SCHOELLKOPF. On machinery? Mr. KITCHIN. Yes. Mr. SCHOELLKOPF. I do not think so. Mr. KITCHIN. We import about $6,000,000; about what per cent comes from Germany ? Mr. SCHOELLKOPF. Of those intermediate products ? Mr. KITCHIN. This product that you are speaking of; your product. Mr. SCHOELLKOPF. The finished product ? 152 TARIFF HEARINGS. PARAGRAPH 15 COAL-TAR DYES. Mr. KITCHIN. Yes; the coal-tar dyes. Mr. SCHOELLKOPF. I presume over 80 per cent of that comes from Germany. Mr. KITCHIN. Where does the other 20 per cent come from ? Mr. SCHOELLKOPF. Quite a little comes from Switzerland and a little from England and France. The CHAIRMAN. Is there anything further you wish to say? Mr. SCHOELLKOPF. I would like to make a few remarks to show the difference between the 30 per cent duty away back in 1883 and now. Our colors in 1883 sold for about five times what they are selling for to-day, so that a color that sold for a dollar, with a 30 per cent duty, would mean a protection of 30 cents. If that same color were selling to-day for 20 cents our protection would be only 6 cents. Mr. HILL. Has that been caused by American competition or by competition between foreign establishments ? Mr. SCHOELLKOPF. Both by competition and by lowering the cost of the raw materials. Mr. KITCHIN. That high price was correspondingly high in foreign countries, too, at that time? Mr. SCHOELLKOPF. That is true. Mr. KITCHIN. And it is correspondingly low now? Mr. SCHOELLKOPF. What I am trying to get at is that we actually had a protection then of 30 cents a pound. Now, 30 cents a pound is a lot more than 6 cents a pound, because the other charges are about the same to-day, if not higher, than they were then, such as our labor, replacements, and so on. Mr. KITCHIN. But one man produces three or four times more now, by unproved machinery and methods, than he did then. Mr. SCHOELLKOPF. That applies to the other side as well as to this side. Mr. KITCHIN. I know that. Mr. SCHOELLKOPF. Take our raw material, for instance. The bill puts 10 per cent on the raw material. That is 6 cents a pound. So that we have a net protection there of 24 cents. That is reduced now to about 60 per cent of 20 cents would amount to 12, and 10 per cent of that would be 1.2, so that we have a net protection now of only about 4^ cents. That is entirely inadequate. This is further cut by the import charges on the present cheap raw material, which amount to another 10 per cent, which charges on the same article in 1880 amounted to only about 2 per cent. So that in those days we actually paid when importing the raw material carrying a 10 per cent import duty about, say, 12 per cent. Now we are paying about 20 per cent, because we pay 10 per cent duty and 10 per cent more for charges. The CHAIRMAN, if we equalized the difference in cost, in labor cost and other costs, between you and your foreign competitors, would you be satisfied? Mr. SCHOELLKOPF. No; that does not make all the difference in cost. The CHAIRMAN. I say, if we equalized the difference in labor cost and other costs, would you be satisfied ? Mr. SCHOELLKOPF. Yes; we would be perfectly satisfied if you equalized the difference in cost of producing those goods here and SCHEDULE A. 153 PARAGRAPH 15 COAL-TAR DYES. on the other side. That is all we ask for. Even then, we would not realize that difference. Mr. PAYNE. Some of these gentlemen seem to be laboring under the delusion that the only difference in cost is the difference in cost of labor. In the brief you presented four years ago, you presented what was called Schedule D, in which you set out in detail the differ- ence in cost here and in Germany, in labor and everything else. Mr. SCHOELLKOPF. Yes. Mr. PAYNE. Including capital, interest on capital, depreciation, taxes, insurance, and every other element that goes into it, as well as the difference in cost of material. Then you make this statement: By referring to Table D, it appears that taking the cost of colors in Germany at 100 per cent, the same colors cost to produce in America, under the present tariff, 144.1 per cent, and in case all coal-tar preparations should be admitted free the cost would still be over 134.4 per cent. That our figures are correct is positively proven by two highly significant facts: First. These same colors are now being imported from Ger- many and sold in this market for less than it costs us to produce them, even omitting charges for depreciation and interest on investments. That included, of course, the duty ? Mr. SCHOELLKOPF. Yes, sir. Mr. PAYNE. That item included the duty? Mr. SCHOELLKOPF. Yes, sir. Mr. PAYNE. Is that fact true to-day? Mr. SCHOELLKOPF. It is. Mr. PAYNE (reading) : Second. By the fact that German manufacturers do not manufacture in the United States, because, as people high in authority state openly, they can manufacture the colors in Germany and lay them down in the United States, with duty of 30 per cent and manufacturer's profit added, at a lower price than they could manufacture the same colors in America. Mr. SCHOELLKOPF. That is so. Mr. PAYNE. Is that true to-day? Mr. SCHOELLKOPF. Absolutely. Mr. PAYNE. So that the difference is not simply the element of labor; and when these gentlemen simply say the percentage is equal to that, they do not grasp the question. That is all. Mr. KITCHIN. But in spite of the fact that in 1909 and 1897 Ger- many was making this stuff, shipping it here, paying the tariff, and selling it cheaper than you people could produce it, the gentlemen on the other side did not increase the tariff at all, but allowed it to remain just the same. Mr. SCHOELLKOPF. You did increase it. It was increased hi the House 35 per cent. Mr. KITCHIN. Thirty per cent; they are paying that. Mr. SCHOELLKOPF. The Payne bill was 35 per cent, and it was reduced in the Senate, but it also put raw materials on the free list. Mr. KITCHIN. I am talking about the act as it passed, because it could not have passed unless my Brother Payne had consented to it, you know. So you had the same tariff in 1897 and the same tariff in 1909. And you had a losing business just because they were bringing it here paying the tariff, and selling it to our people cheaper than you could produce it and you have been losing ever since. 154 TARIFF HEARINGS. PARAGRAPH 15 COAL-TAR DYES. Mr. SCHOELLKOPF. Oh, no; I am not saying that. Mr. KITCHIN. In the hope that somebody would come along and raise it for you ? Mr. SCHOELLKOPF. I am not saying that. Mr. KITCHIN. I know you did not intend to say it, but he made you say it. Mr. SCHOELLKOPF. I am saying that we are not making 5 per cent on our investment, not taking anything off for depreciation. Mr. KITCHIN. I know you did not mean to say it, but Mr. Payne got you to say it. Mr. SCHOELLKOPF. It amounts to the same thing. We are really losing money, because if we take off 10 per cent for depreciation, as we should do and as they do on the other side, then we would be money out of pocket. Mr. KITCHIN. So you are really complaining against the Dingley and Payne bills because you have been losing ? Mr. SCHOELLKOPF. We are asking now Mr. KITCHIN. Because you have lost ever since? Mr. SCHOELLKOPF. We are willing .to have you appoint a committee of your own members, if you wish, and we will pay all the expenses of coming up to Buffalo and looking over our business and seeing what we are doing. Then we will abide by your decision. Mr. KITCHIN. Of course, if you are losing money and have been losing money since the Dingley Act, from a manufacturer's or mer- chant's standpoint, you would be perfectly satisfied with the law re- maining as it is, would you not? Mr. SCHOELLKOPF. No; we are not satisfied. Mr. KITCHIN. You would like to have it increased somewhat, would you ? Mr. SCHOELLKOPF. I think we are entitled to an increase, but we are perfectly willing to leave it to you to settle after investigation. Xow, another thing. Assuming that we had adequate protection that is, the difference between the foreign cost and the domestic cost then we could not realize the entire difference in cost. If the difference is 35 per cent, we can not get 35 per cent more here for our goods than they get on the other side, because we must cut that price at least 10 per cent in order to get the bulk of trade. There are 20 importers here competing with us. We can only get our share of the trade unless we cut the price, because our good American consumers of aniline dyes, when we offer them American-made colors, the first question asked is, ' ' What inducement can you offer ?" We are obliged to offer an inducement. We must cut the price 10 per cent below the import price before we can get any more than a fair share of the business. Mr. KITCHIN. How much has the industry increased since 1909 ? Mr. SCHOELLKOPF. It has not increased, so far as we are con- cerned ? Mr. KITCHIN. I mean the industry, the business. Mr. SCHOELLKOPF. I do not know that it has increased at all. I do not believe our sales are more now than they were then. Mr. KITCHIN. I know, but how about the industry in the United States ? SCHEDULE A. 155 PABAGBAPH 16 COAL-TAB DYES. Mr. SCHOELLKOPF. Our volume of manufactures has increased, but the value has not increased. In other words, we are making less money to-day than before the enactment of the Payne bill. In other words, we are losing more through lower prices of our colors than we are saving on the duty on those raw materials. Mr. KITCHIN. How much more capital is invested to-day in your industry, not your private business, but in the industry in the United States, than there was in 1909? Mr. SCHOELLKOPF. I can not speak for other manufacturers. Mr. KITCHIN. Has it not more than doubled ? Mr. SCHOELLKOPF. No, sir; oh, no. Mr. KITCHIN. It has not ? Mr. SCHOELLKOPF. Oh, no. I doubt whether it has increased at all. Our industry has not increased 10 per cent. Mr. KITCHIN. It has been one of the industries that has not pros- pered under the Dingley and Payne Acts ?, Mr. SHACKLEFORD. Is yours an industry that could profitably be carried on in this country without some bonus in the way of a tariff? Mr. SCHOELLKOPF. I do not look upon it as a bonus. All we are asking for is an equalization of cost. We can not pay our men $2 where they pay their men 90 cents, and produce these colors at the same price. Mr. SHACKLEFORD. I live out in Missouri, in the central part of the country, and in the hot-houses we grow lemons and figs. It is not profitable unless we can shut out other markets, so as to give us some artificial stimulus, to enable us to successfully grow figs. What I mean is this : Is yours a business in and of itself profitable without it gets some favors extended to it by law ? I speak of yours individually, by itself. I am not referring to the lemon and fig business especially, but this particular coal-tar dye business. Can it be successfully carried on in this country without some sort of stimulus being given to it in the way of a tax in its behalf ? Mr. SCHOELLKOPF. We have not had any stimulus. Mr. SHACKLEFORD. You have not had it ? Mr. SCHOELLKOPF. I will say we can not manufacture hi this coun- try under free trade and pay the same wages we are paying now. Mr. SHACKLEFORD. That in and of itself it is not a prosperous busi- ness in this country ? Is that what you mean to say ? Mr. SCHOELLKOPF. It can not be prosperous. Mr. SHACKLEFORD. And it can only be made prosperous by levying a tax on the people who consume it ? Mr. SCHOELLKOPF. No. It can be made prosperous if the differ- ence in cost is equalized. If you take the duty off of colors altogether, the ultimate consumer will not profit one iota. Mr. SHACKLEFORD. That is a question of argument. Mr. SCHOELLKOPF. That is so. Here is a dye [indicatingl, if you reduce the duty 5 per cent on the dye (which is a heavy shade), it will make a difference of just two-twenty-fifths of a cent a yard, and it sells for $1.50 a yard. Mr. SHACKLEFORD. We differ as to who the ultimate consumer is. The ultimate consumer in your case is the manufacturer who buys your dyestuffs? 156 TARIFF HEARINGS. PARAGRAPH 15 COAL-TAR DYES. Mr. SCHOELLKOPF. The ultimate consumer is you and all the rest of us who wear clothes. Mr. SHACKLEFORD. Then we look at it from a different standpoint. The ultimate consumer is the person to whom you sell. What I I want to know is, whether or not your business of manufacturing dyes in this country is in and of itself a prosperous business, in that it is profitable to engage American labor and capital there being, as you know, a shortage in both capital and labor in this country. We have prosperous industries in this country that do not have either enough capital or enough labor. Do you think it is wise to turn capital and labor from prosperous enterprises and put them into unprofitable industries, which can exist only by levying a tax in their favor, upon the people who consume it ? Mr. SCHOELLKOPF. If you carry that principle through absolutely, we would be satisfied. Mr. SHACKLEFORD. I am not talking about a principle. Mr. SCHOELLKOPF. If you take the duty off everything that needs protection, then we probably will be able to get labor at half price. We are one of many industries that need protection. Mr. SHACKLEFORD. What do you mean by that term, "need protection" ? Mr. SCHOELLKOPF. We need enough protection, enough duty, to equalize the difference in cost here and abroad, thus giving us a chance to compete. Mr. SHACKLEFORD. What you mean is that the industry will not sustain itself unless it is propped up by a tax upon the consumer, to make it go? Mr. SCHOELLKOPF. Put it that way if you like, although there is a great deal more to it than that. Mr. SHACKLEFORD. Now, is it profitable to invest American capital and labor in that industry, if there is a well-known shortage in capital and labor to carry on the industries of this country, which are profit- able in and of themselves ? You do not pay your labor now as much as we pay carpenters, bricklayers, stonemasons, and farm hands in our country. Mr. SCHOELLKOPF. Of course, the present time is exceptional anyway, because there are a great many times when labor is not as scarce as it is now. but the competition which it creates is surely for the benefit of all our citizens, who thereby get their goods cheaper. Mr. SHACKLEFORD. But is not your labor lower paid than the unprotected labor of this country ? Mr. SCHOELLKOPF. Possibly that is so. That is simply because we can not compete with the people on the other side and Day more wages. We pay as much as we can. But an unprotected industry, such as those you mention, those goods would not be imported any- way. You can not import a house or a road. Mr. SHACKLEFORD. There is such a shortage of those profitable enterprises that it would be better, would it not, for us to invest our capital and employ our labor in American industries that are profit- able within themselves, rather than to put exorbitant taxes on the consumer in order to sustain Mr. SCHOELLKOPF (interposing). I do not think so. You might be able to get more labor for what you call the unprotected industries, SCHEDULE A. 157 PARAGRAPH 15 COAL-TAR DYES. but I think if you took the duty off all the industries that do need and now have protection you would have labor down pretty low and men walking the streets looking for work. I will say now that if we can be put on the same basis as the Germans, if we can get our labor at the same price as the Germans, we are perfectly willing to have no duty at all. If you want absolute free trade, we are satisfied. But under present conditions we must have that protection, because we have to pay double for our labor and have to pay a good deal more for other things that make up the cost of our goods. Anyway, we are not asking exorbitant taxes, because under the present tax, which we ask to be left as it is, over 80 per cent of the total consumption in the United States is imported. If we have absolute free trade and take the tariff off of everything and put it on coffee, tea, whisky, and do as the English do, then we will be perfectly satisfied. Then things will equalize themselves. Mr. SHACKLEFORD. One other question: Is the raw material of which these dyes are manufactured more available to other countries than to us ? Mr. SCHOELLKOPF. I think it is more available here. Mr. SHACKLEFORD. It is more available here? Mr. SCHOELLKOPF. Yes, sir. Mr. SHACKLEFORD. But it must come from foreign sources ? Mr. SCHOELLKOPF. Well, it comes from foreign sources, because it is not made here at the present time. Mr. SHACKLEFORD. Could it be made here? Mr. SCHOELLKOPF. It could be made here; certainly. Mr. LONGWORTH. You were speaking a moment ago about the price to the ultimate consumer if these raw materials were put on the free list. Do you think that if the German manufacturers were no longer forced to compete with American manufacturers it would lower the price to the American consumer ? Mr. SCHOELLKOPF. I do not think it would. Mr. SHACKLEFORD. You do not think it would ? Mr. SCHOELLKOPF. I do not think so; no. Mr. HILL. Do you know whether the German Government itself is interested in these syndicates, or any of them, and which it has legal- ized, as it is interested in the phosphate syndicate ? Mr. SCHOELLKOPF. Not to my knowledge in anilines. Mr. HILL. You have no reason to suppose they are ? Mr. SCHOELLKOPF. No, sir. The CHAIRMAN. If the committee are through, I would like to have you complete your statement. Mr. SCHOELLKOPP. There is one aniline plant in this country that is controlled by a German plant, and that is the only plant that has not increased its line of colors since they obtained control. In other words, they find they can import the colors cheaper under the present rate than they can manufacture them here. The CHAIRMAN. What is the name of that concern ? Mr. SCHOELLKOPF. The Hudson River Aniline Color Works, con- trolled by Farbenfabriken, of Elberfeld. They have increased their production of pharmaceutical products, but have not increased the 158 TARIFF HEARINGS. PARAGRAPH 15 COAL-TAR DYES. production of their line of aniline colors. Up to 1896 we lost money steadily; we absolutely lost money. From then on we were able to increase our production materially, owing to expiring foreign patents and to the working of our own patents, and to the placing on the reef list in 1897 of additional raw materials. We were never, however, able to earn as much as 6 per cent on our coal-tar dyes, even without writing off anything on machinery and plant. Our books are open to the inspection of your committee or any authorized representative at any time. We have been working on a declining market for over 30 years, or ever since we have been in business, and the process is still going on. As I said before, our colors have gone down in price to such an extent, since the Payne bill was passed, that we make less on our colors than we save on the raw materials coming in free. So that shows that competition does something. STATEMENT OF JOSEPH F. O'CONNELL, ON BEHALF OF SCHOELLKOPF, HARTFORD & HANNA CO. Mr. O'CONNELL. Gentlemen, I have only a few observations to make, because I believe that when Mr. Schoellkopf's testimony is read it will clear up very many things of which the committee were in the dark. I would like to call your attention particularly to sections 21 and 24 of the proposed bill. Section 21 calls for a cut of from 30 to 25 per cent on the coal tar dyes or colors that are manufactured in this country. Now, if I understand it, one of the purposes of the committee in revising this chemical schedule was to raise revenue primarily, having proper regard for the interests of the consumer. It seems to me the committee have made a mistake in this matter, and we respectfully call the committee's attention to these particular sections, with the desire that they may go into it very carefully. There is consumed in this country only seven and one-half million dollars worth of coal tar products. Of that, 80 per cent comes from abroad. That 80 per cent equals $6,000,000. There are $6,000,000 in value imported, which pay in revenue to this Government SI, 800, 000 surely not a prohibitive tariff. This proposed cut will make a difference in the revenue of $300,000. Now, as against that, you seek to put on, in section 24, a 10 per cent duty on articles that are now on the free list, and from those articles that are now on the free list you estimate that you are going to get $100,000. Taking into consideration article 22, which is also allied with it, which shows a loss in that section of $25,000, which, added to the $300,000, makes a total of $325,000, as total loss in revenue by the proposed changes. In other words, you are losing approximately $325,000 on the manufactured articles, and you are imposing $100,000 on the raw materials, a net loss of revenue of $225,000. Now, we submit that the committee are not accomplishing their purpose in doing this, and in addition are doing two things that I am sure they never intended to do, namely, crippling an American industry and adding to the burden of the American consumer. The American consumer is burdened whenever you tax raw materials. SCHEDULE A. 159 PARAGRAPH 15 COAL-TAR DYES. As a Democrat, I think I am justified in protesting against the policy of taking raw materials from free list and taxing them. Mr. HARRISON. One moment, if you please, Mr. O'Connell: Is it not true that, if a reduction is made in the duty upon the finished product, it would be difficult, if not impossible, for the American manufacturer to hand on that tax on the materials that are manu- factured to the consumer? In other words, it would be difficult for him to increase the price to the consumer if the duty is lowered upon his finished product? Mr. O'CONNELL. I do not know that I grasp your intent exactly, but do I gather from your statement Mr. HARRISON. How can the manufacturer of coal-tar dyes or colors increase the price to the consumer of coal-tar dyes and colors if his duty is reduced upon his finished product ? He can not hand down to the persons who buy from him the duty which we impose upon his materials of manufacture, because the competition from abroad will increase. Mr. O'CONNELL. No; the competition from abroad would wipe out the competition here, and then the competition from abroad would be able to do what it pleased and surely raise the prices to the con- sumer. Mr. HARRISON. That is just an assumption; that is a different matter. Mr. O'CONNELL. I do not think it is an assumption; it is a well known and accepted fact in the oal-tar industry. In the first place, only seven and a half million dollars worth of products are used, and if you lower the tariff it is not going to increase the consumption. For instance, the dye that is in my coat or necktie will not be increased because the duty on the dye is going to be lowered or is going to be raised. Now, you say you expect to gain $1,000,000 in products coming in under section 24. If you increase that a million dollars, it merely means that you are taking away from the American manufacturer the opportunity to make $1,000,000 worth of goods which he now makes, and you are cutting that American industry absolutely in two. Thus you are increasing the output of foreign manufacturers and retarding and taking away our market to the extent that the American manufacturer will only supply less than 10 per cent of the whole amount of coal-tar colors whicn are consumed. That points out in another way the difficulty that I think the com- mittee overlooked in framing this bill. Now, I submit as a Democrat that it is very poor policy to put any raw materials needed for manufacturing in this country on the duti- able list. I think there are very many eminent authorities who have protested most strongly against such a policy. Mr. LONGWORTH. I suppose what you mean by raw materials are those materials not produced in this country ? Mr. O'CONNELL. Yes. Mr. LONGWORTH. I agree with you, too. Mr. O'CONNELL. When Mr. Cleveland was President, in his message he protested against it most strongly. Let me quote what he said 160 TARIFF HEARINGS. PARAGRAPH 15 COAL-TAR DYES. in a letter to Mr. Wilson denouncing the Senate for its action at that time. Mr. KITCHIN. Let me interrupt you. Maybe I misunderstood you, but Mr. Cleveland did not make the difference or distinction that my friend from Ohio makes. Mr. Longworth, in referring to raw materials, refers to only those articles that are not produced in this country. Mr. Cleveland made no such distinction. Mr. O'CoxNELL. I am sure President Cleveland intended, by raw materials, all those materials that are necessary for our factories to use which they make into the finished product. Coal-tar products which are to be made into colors are as much raw materials as iron ore or wool, which are to be finished into other forms. Mr. Cleveland was very emphatic. He said: One topic will be submitted to the conference which embodies Democratic prin- ciples so directly that it can not be compromised. We have in our platforms and in every way possible declared in favor of the free importation of raw materials. We have again and again promised that this should be accorded to our people and our manufacturers as soon as the Democratic Party was invested with the power to deter- mine the tariff policy of the country. The party now has that power. We are as certain to-day as we have ever been of the great benefit that would accrue to the country from the inauguration of this policy, and nothing has occurred to release us from our obligation to secure this advantage to our people. Mr. William Jennings Bryan, in the Fifty-third Congress, took the same attitude. Speaking about free raw materials at that time, he said: They tell us that free coal can not benefit the interior. Take the tariff off from coal so that the New England manufacturers can buy it for less, and they can manufacture more cheaply, and then by cutting down the tariff on the products of their factories we can compel them to sell at a lower price to the people of the South and West. That is the reason our folks are interested in free coal. So long as we lay burdens upon what the manufacturers use they can with some justification ask a tariff on the product of their looms. Mr. Chairman, in the first place, I believe we can make no permanent progress in the direction of tariff reform until we free from taxation the raw materials which lie at the foundation of our industries. Mr. HARRISON. Mr. O'Connell, you are very familiar, of course, with our tariff history and you know that the class of raw materials as used at that time was specially defined or referred to as the crude products in the soil, and then they have been advanced in the process of manufacture. That surely does not apply to any of these inter- mediate coal-tar products, which are the result of high systems of manufacture. Mr. O'CONNELL. I believe that the same distinction would have been made then as is made now if it had been brought out along the same lines that you now refer to. When 60 per cent of the value of the products consumed by an industry are imported from abroad, those certainly ought to be considered raw materials, particularly when they are not found here in this country. They are basic raw materials, so far as our manufacture is concerned, and are so specified in the coal-tar industry. Now, gentlemen, it seems to me that this committee ought to bear in mind that it is necessary for our textile manufactures that this industry should be kept in this country. It serves as a restraint upon the German syndicates, cartels, and combinations that are SCHEDULE A. 161 PARAGRAPH 15 COAL-TAR DYES. raising prices ad libitum whenever there is no competition. If we have no competition in this country the foreign makers will surely and quickly raise the prices of their articles. Our factories at Buffalo are engaged in a work that ought to receive your heartiest aid. They are engaged in an enterprise which can be made one of the greatest enterprises in this country. The great industrial development of Germany has centered around her chemical industry, and the most marvelous part of her chemical industry has been along the lines of the coal-tar industry. Their products and profits have been enormous. The profits, according to your own glossary, which you have published, have been from 24 to 25 per cent. We barely survive under present conditions, as our books will disclose if you care to investigate. Those people are now able to come into this country, and even with the competition which we have in this country and the 30 per cent that is now on it, they are able to lay down the goods here and sell them cheaper than houses in this country are able to do. The Germans have gone into this matter very carefully and very minutely and are giving it their closest attention and encouragement. The various changes that the coal-tar industry has suffered during the variations of the tariff might be brought closely home to you when I say this: That the price of coal-tar colors was immediately lowered after the passage of the last tariff act when these articles were put upon the free list that you now seek to put back on the dutiable list. If you put these articles back on the dutiable list, as you now contemplate under section 24, the cost of production of coal-tar colors will necessarily rise and the American manufacturer will suffer accordingly. It may occur to some that the putting of this 10 per cent will help the consumer, but I would like to refer you to page 162 of the tariff hearings held before the Finance Committee of the United States Senate last year on this bill, and will quote to you a letter from one of the German houses to the effect that when- ever contracts are made this clause is put in: In case any duty should be charged on any merchandise sold under this contract or in case of any change in said duty the buyer to pay or receive in dutiable funds any difference from the present rates, the buyer to pay any additional duty caused by advance in the market value. In other words, the consumer must bear this burden. You do not improve the situation, and you do not increase the revenue, by lowering the tariff from 30 to 25 per cent on the finished articles, and putting 10 per cent on the raw materials. Mr. LONGWORTH. Mr. O'Connell, will you let me ask you a question right there? Mr. O'CoxxELL. Yes. Mr. LOXGWORTH. Suppose, as you contend, the passage of this legislation will destroy this industry here, in this country, do you think that would result in lowering the price to the consumer? Mr. O'CONNELL. Absolutely not. It would result in an immediate rise in the prices to the consumer. Mr. LONGWORTH. I welcome you to my school of political thought. Mr. O'CoxxELL. I think everybody will agree to that. Mr. Harrison and Mi-. Underwood will absolutely agree with this position after they have considered the matter a little more fully. 78959 VOL 113 11 162 TARIFF HEARINGS. PARAGRAPH 15 COAL-TAR DYES. Mr. JAMES. Are you advocating a tariff for protection to this industry, or are you advocating it for revenue? Mr. O'CoNNELL. I am advocating a tariff for revenue along Demo- cratic lines and that is a tariff that permits competition. I think you and I both agree on that, Mr. James. Mr. JAMES. I agree with you as to a tariff for revenue. I do not know of any Democrat that approves of a tariff for protection. Mr. O'CONNELL. I am not asking for a tariff for protection. We are asking for a tariff in order to allow us to compete for the benefit of the American consumer. Mr. JAMES. I merely made the remark, or asked the question, rather, to see whether my friend Mr. Longworth was right when he welcomed you to his political school. I do not want to lose any Democratic followers here. Mr. O'CONNELL. Well, I rather think we will be welcoming Mr. Longworth to our school before we finish. Mr. LONGWORTH. As enunciated by yourself, not by Senator James. Mr. O'CONNELL. Well, I don't know. Mr. PAYNE. I wish you would clear up the Democratic policy on this question, Mr. O'Connell. Mr. O'CONNELL. I will leave that to those who are better qualified, Mr. Payne. Mr. JAMES. We will attend to that when we come to make the bill. Mr. O'Connell, at a later date, submitted the following brief on behalf of Schoellkopf, Hartford & Hanna Co.: DECEMBER 26, 1911. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR MR. CHAIRMAN: In accordance with your suggestion that a brief be filed in reference to article 15, schedule 1, viz, that referring to "coal-tar dyes or colors, not specially provided for, on which there is imposed a thirty per cent ad valorem, and all other products or preparations of coal tar not colors or dyes, and not medicinals, not specially provided for, of fifteen per cent ad valorem, " let me say that I am firmly of the belief that this section should not be in any way changed. The duty is hardly a sufficient one. German manufacturers control practically the whole output and are able to compete in our market to-day, and very frequently can undersell us. In the last year there was over ,%. 000,000 worth of coal tar imported under this section, giving a revenue of $1, 700, 000. There can be only two possible reasons assigned for a change in this schedule, viz, first, that a reduction of the rate of the tariff might lower the price of the imported coal-tar products in this country, and, second, that the cost of coal-tar products in the form of aniline colors and dyes would be cheaper to the manufacturers that use these colors. Inasmuch as it, will be practically impossible for American manufacturers to com- pete against German manufacturers, if this rate is cut, we can safely assure your committee that a cut of the present '.*>() per cent only means that the aniline dye manufacturers in this country must close their doors. The consequence of this is apparent, viz. there will be no competition in this country against the German color makers, thus affording them a monopoly. Their first step in this case will lie to raise the price of coal-tar products, and the same situation will arise as was found in iho case of the ali/arin color.-; which were put upon the free list the Dingley bill and the prices immediately raised. Thus it is quickly seen that the very objects which arc soutrht for in a reduction of the tariff will be quickly and effectually defeated. It will establish a monopoly which can not in any way be combated SCHEDULE A. 163 PARAGRAPH 15 COAL-TAR DYES. or opposed, and the American manufacturer will be hopelessly at the mercy of the German manufacturers. This industry in this country is composed principally of four different manufacturers. Their total production is about 20 per cent of the total consumption of these dyes in the United States. This certainly is a large enough percentage to constitute an actual industry here. This percentage is arrived at by taking the total imports of aniline colors into the United States in any of the last five vears and comparing against them the production of the four factories, of which a fairly accurate estimate can be made, resulting in a finding that 20 per cent of the whole is manufactured in this country. The chemical industry in the last few years has undergone a great impetus, through the better conditions which have been evolved from placing the raw products on the free list and leaving a reasonable tariff on the finished products. The 30 per cent now imposed represents a proper or fair proportion. It is our firm belief that if the situa- tion is left unchanged our industries will increase and will become formidable com- petitors with the great German manufacturers. They certainly will be sufficient to offset the monoplies established by the conventions and combinations formed by the European manufacturers which cause the products governed by these combinations to actually cost the consumer more in proportion than the protected colors on which prices are forced down to a reasonable basis through competition of the American manufacturers. The consumer to-day is no better off in reference to alizarin colors, aniline salts, and aniline oil, which are on the free list, than if there was an actual duty on these products, simply because the conventions and combinations have placed a greater cost upon them. The American coal-tar colors industry gradually is becoming a recognized competitor against the European manufacturers, which should be encouraged. The commercial world is fast realizing that the tremendous progress made by Germany has been due in no small measure to the splendid encouragement of her chemical industries. Any step taken by this Government in discouraging chemical advancement will be a distinct retrograde movement. Any reduction of the present 30 per cent duty will not help the manufacturers that use aniline dyes in any way, shape, or form, because the percentage of reduction would never be credited in the selling price, because it would be deemed inconsider- able. The same situation will confront them as has been considered in the preceding paragraphs, viz, that if the German manufacturers control the output the price, instead of being lowered, will most certainly be raised. It should be borne in mind that the American manufacturer, in order to secure the home market, must be in a position to undersell the importer. This he can not do to-day, and the struggle is a very severe one to maintain the industry even with the present rates. The foreign manufacturer very often assumes part of the duty him- self in order to get the American trade. The German manufacturers do not manufac- ture in the United States because, as the people high in authority state openly, they can manufacture the colors in Germany and lay them in the United States with the duty of 30 per cent and the manufacturer's profit added at a lower price than they could manufacture the same colors in America. In conclusion I desire to state that the Schoellkopf, Hartford & Hanna Co., which is the largest color industry in America, is willing and anxious to submit its books to any member or members of the committee and to give them the fullest information possible in reference to the actual condition of the color industry in this country, which will verify and substantiate every statement made in this letter. The money invested at the present time, which is not watered in any way, barely returns a small dividend. In the last four years it has been less than 6 per cent. SCHOELLKOPF, HARTFORD & HANNA Co., By Jos. F. O'CoNNELL, Attorney. BRIEF ON BEHALF OF IMPORTERS OF CERTAIN ALIZARIN VAT DYES. The COMMITTEE ox WAYS AND MEANS, House of Representatives, Washington, D. C. GENTLEMEN: We desire to call to the attention of your committee certain inequalities in the treatment, under existing law, of various anthracin dyes belonging to the class known as "fast vat dyes," 164 TARIFF HEARINGS. PARAGRAPH 15 COAL-TAR DYES. which inequalities we believe will be perpetuated if the language of the present tariff act, or of the chemical bill of 1912 known as H. R. 20182, is adopted in new legislation. We are importers of certain anthracin fast vat dyes manufactured in Germany and known as hydron blues. These dyes are produced from carbazol, which is derived from commercial or crude anthracin. We have claimed the hydron blues to be properly classifiable under paragraph 487 of the present tariff act as " dyes derived from * * * anthracin," but such classification has been denied by the customs officials who assess the dyes in question as "coal-tar dyes or colors not specially provided for " at 30 per cent ad valorem under paragraph 15 of the tariff act of 1909. Litigation as to the propriety of this assessment is now pending in the United States Court of Customs Appeals, but, as the law is thus misconstrued, we venture to ask your committee to clear the matter up by the insertion of appropriate phraseology when it writes the new tariff bill. The language of the present act reads: "Par. 487. Alizarin, natural or artificial, and dyes derived from alizarin or from anthracin." The language we propose is: "Alizarin, natural or artificial, and dyes derived from alizarin, anthracin, or carbazol." THE RELATION OF HYDRON BLUES TO ANTHRACIN. The hydron blues are derived from anthracin because their origin is traceable to the physical substance, commercial anthracin. Car- bazol, from which they are directly made, is derived from commercial anthracin and can not be obtained in commercial quantities from any other substance. Up to this time the customs authorities have held that the phrase "derived from anthracin" does not refer to the com- mercial product, but refers to technically pure anthracin having the chemical formula C 14 H 10 . It is only since the last tariff act went into effect that a commercial method of separating carbazol from anthracin has been perfected, and the discovery of hydron blues has resulted. Their derivation and properties therefore place them in the same class with the vat blues derived from anthracin. Clearly bringing them within that group in the tariff is in accord with the avowed object of your com- mittee to bring the classification of the chemical schedule up to date, remove all obsolete features, and eliminate possible misconstruction. Such treatment of these dyes is also in accordance with THE ATTITUDE OF CONGRESS TOWARD THE FAST VAT DYE STUFFS KNOWN AS ALIZARIN OR ANTHRACIN DERIVATIVES AND INDIGO. For nearly 40 years it lias been the policy to exempt from duty alizarin or anthracin derivatives and indigo. Provisions exempting alizarin, or alizarin or anthracin derivatives, and indigo, are found in every tariff since 1875, the phraseology changing from time to time to meet the development of the industry. SCHEDULE A. 165 PARAGRAPH 15 COAL-TAR DYES. While the policy of giving these products free entry was departed from for the first time in many years in the bill which passed the House of Representatives in 1912, known as H. R. 20182, there was no departure from the policy of treating them alike. That bill imposed an ad valorem duty of 10 per cent on "alizarin, natural or artificial, and dyes derived from alizarin or from anthracin" (par. 6) and the same rate on "indigo, indigo extracts, or paste and indigo carmined" (par. 38). If your committee sees fit to remove the dyes just enumerated from the free list and subject them to a tax of 10 per cent, no ine- quality will result. But what we ask is that the phraseology of the act should be so clear that ah 1 dyes properly falling within the same class shall be treated alike. We do not believe that your committee intends that one fast vat dye derived from anthracin shall be dutiable at 10 per cent and another fast vat dye from the same derivation shall by reason of a lack of clearness in the law be assessed at 30 per cent. The law as it now stands is interpreted in favor of certain German manufacturers who produce a limited number of patented anthracin derivatives and import them into this country, and discriminates against other manufacturers and importers who have discovered and developed valuable competing products in the same class. No dyes of this class are manufactured in America. We believe you wiU wish to correct this in the interest of the American textile industry as well as in fairness to the importer. Hydron blues are among the fastest dyes known and are largely used abroad, but are almost prohibited to the American textile manufacturer because of the misconstruction of which we complain. As the dyes for which we speak have been upon the market but two years, and have had to pay a duty of 30 per cent, while other anthracin dyes have paid notliing, the importations have been rela- tively small and the aggregate duty unsubstantial. An equal or greater amount of revenue would doubtless be collected from them if properly classified with the anthracin derivatives because of the increased consumption that would result from placing them upon a competing basis. Respectfully submitted. CASSELLA COLOR Co., 182-184 Front Street, New York City. ROBERT ALFRED SHAW, Vice President. (Curie, Smith & Maxwell, attorneys, 32 Broadway, New York City. Thomas M. Lane, of counsel.) BRIEF OF THE PACIFIC MILLS, COCHECO DEPARTMENT, IN RE HYDRON BLUE, ETC. DOVER, N. H., February 6, 1913. Hon. OSCAR W. UNDERWOOD, Esq., Chairman Ways and Means Committee, Washington, D. C. DEAR SIR : We are large users of indigoes and vat colors on cotton goods, and we also use hydron blue to a moderate extent. We have 166 TAEIFF HEARINGS. PARAGRAPH 17 PYROXYLIN COMPOTJNDS. just been advised of the brief filed by the Cassella Color Co., requesting the removal of the misconstruction in the present tariff, which makes hydron blue dutiable at 30 percent. We believe a favorable action in this matter would be of great advantage, both to the textile industry and the public in general. Hydron blue is one of the more important of the recent additions to the color industry, being a decidedly faster color than indigo, which it would largely replace if the price were more favorable. At its E resent price it is used only for the more expensive lines of work, and )wering the duty would undoubtedly increase the use of this valuable dyestuff. Respectfully, yours, H. W. OWEN, General Superintendent. PARAGRAPH 16. Cobalt, oxide of, twenty-five cents per pound. PARAGRAPH 17. Collodion and all compounds of pyroxylin or of other cellulose esters, whether known as celluloid or by any other name, forty cents per pound; if in blocks, sheets, rods, tubes, or other forms, not polished, wholly or partly, and not made up into finished or partly finished articles, forty-five cents per pound; if polished, wholly or partly, or if in finished or partly finished articles, except moving-picture films, of which collodion or any compound of pyroxylin or of other cellulose esters, by whatever name known, is the component material of chief value, sixty-five cents per pound and thirty per centum ad valorem. For celluloid, see also Park & Tilford et al., page 66. PYROXYLIN COMPOUNDS. BRIEF SUBMITTED BY FRANCIS A. GUDGER, NEW YORK CITY, IN BEHALF OF MANUFACTURERS OF PYROXYLIN COMPOUNDS. NEW YORK, January 10, 1913. Hon. OSCAR W. UNDERWOOD, Clia-irman Committee on Ways and Means, Washington, D. C. SIR: The American manufacturers of compounds of pyroxylin beg to express their appreciation of the opportunity afforded them to bo heard by your committee relative to contemplated changes in the tariff law affecting their industry, but owing to the shortness of time and the absence of the undersigned upon the dates set for the hearing on paragraph 17, Schedule A, and realizing that your committee will undoubtedly be crowded to the utmost by the large number of persons who will wish to be heard on this schedule, we respectfully ask you 1o accept this short statement concerning the matter in question: The paragraph in the tarhT act of 1909 which is applicable to our industry is Xo. 17, Schedule A. We earnestly protest on behalf of the stockholders of our several companies, as well as on behalf of the thousands of workmen employed in our factories and factories of allied industries, against any reduc- tion in the rates of duty now set forth in paragraph No. 17 of Schedule SCHEDULE A. 167 PARAGRAPH 17 PYROXYLIN COMPOUNDS. A of the act of 1909. We firmly believe in the justice of our position and feel that it is supported by facts and conditions, the most impor- tant of which we set forth briefly as follows: First. Our product is distinctly and originally American. It was discovered by an American citizen forty-odd years ago, and American capital and brains developed and perfected it to a point where it became a valuable commercial commodity. When that point was reached our patents were copied, our secret processes were learned and transported abroad and developed to such an extent that to-day there exist large factories in Germany, France, England, Austria, Russia, Italy, and Japan. Second. There is no trust or monopoly in the industry and never has been. Each one of the companies is an independent corporation in which the others have no interest whatsoever, marketing their goods wholly independent of each other, and there exists between them all competition of the very keenest character. Third. The Government records will not show a large importation of pyroxylin articles, but this is because under the interpretation of the tariff laws the great majority of these goods are imported into this country under other tariff schedules than the one applying specifically to our industry. Such importations are, however, very large and increasing rapidly and progressively year by year. A single glance at the stocks of any of the department or retail stores throughout the country will fully bear out this assertion. Fourth. We firmly believe that if the protection now afforded our industry is taken away or radically reduced, our business will be seri- ously crippled and in many of the lines now produced by us will be completely destroyed, as tney are now being gradually crippled. Fifth. The foreign manufacturers have taken from us all the markets of the world except the United States of America, and unless adequate protection is continued we will undoubtedly gradually suffer the same defeat at home as abroad. Sixth. Foreign manufacturers have a great advantage over us in cheaper crude materials and cheaper labor, and in many other ways, both from a point of cost and labor conditions. In the European countries well-known and well-established records show their labor to be less than one-third of the wages paid in our factories. In Japan, where there are now two completed "celluloid" factories on modern improved scale, the labor is less than a fourth or fifth of what ours is m this country, and some records show it to be far less than this. Seventh. There is scarcely a single article that we manufacture or that is manufactured from our material but what is strictly a luxury and has always been so classified or which can not be replaced by other and cheaper materials. Eighth. In the manufacture of our material we are very large users of two raw products, the conditions surrounding which we wish to call to your particular attention. (a) The American manufacturers of compounds of pyroxylin,while unable to give figures of an exact character, owing to the competi- tion which prevents each from knowing the figures of the other, are users of approximately 10,000,000 pounds of cotton per year and a decrease in our manufacture or a resulting cessation of our industry will, of course, wholly or partially eliminate this consumption. 168 TARIFF HEARINGS. PARAGRAPH 20 DYEING OR TANNING WOODS, ETC. (&) Our industry consumes millions of pounds of camphor, all of which comes from the Empire of Japan. The price of this raw ma- terial is controlled by the Government of Japan, the supply is control- led by the Government of Japan, and the distribution of this material is in the hands of the financial backers of the celluloid industry of Japan, all of which places the pyroxylin industry of America largely at the mercy of these same Japanese manufacturers who are plan- ning to become our keenest competitors. Finally, we respectfully protest against any reduction of the pro- tection afforded us in paragraph 17, Schedule A, act of 1909, and the clean conduct of our industry in botn giving to the world and our country a commodity hitherto unknown, and with prices reasonable and fair we firmly believe justify every claim that we make for this encouragement from our Government, and we further respectfully request and wish to impress upon you the importance of a more strict and correct reading of the paragraph referring to our product and ask that the following paragraph be appended to the present tariff act as it now reads: "No article of which a compound of pyroxylin, or of other cellulose esters, is a component of chief value shall be entered for import under any other classification bearing a lower rate of duty." Very respectfully, FRANCIS A. GUDGER, Second Vice President, The Arlington Co. PARAGRAPH 18. Coloring for brandy, wine, beer, or other liquors, fifty per centum ad valorem. PARAGRAPH 19. Copperas, or sulphate of iron, fifteen hundredths of one cent per pound. PARAGRAPH 20. Drugs, such as barks, beans, berries, balsams, buds, bulbs, bulbous roots, excrescences, fruits, flowers, dried fibers, dried insects, grains, gums and gum resin, herbs, leaves, lichens, mosses, nuts, nutgalls, roots, stems, spices, vegetables, seeds (aromatic, not garden seeds), seeds of morbid growth, weeds, and woods used expressly for dyeing or tanning; any of the foregoing which are natural and uncompounded drugs and not edible, and not specially provided for in this section, but which are advanced in value or condition by any process or treatment whatever beyond that essential to the proper packing of the drugs and the prevention of decay or deterioration pending manufacture, one-fourth of one cent per pound, and in addition thereto ten per centum ad valorem: Provided, That no article containing alcohol, or in the preparation of which alcohol is used, shall be classified for diity under this paragraph. For nutgalls, see also F. Bredt & Co., page 54. DYEING OR TAXXIXG WOODS, ETC. STATEMENT OF R. A. McCORMICK, REPRESENTING McCORMICK & CO. The CHAIRMAN. Mr. McCormick, we have assigned to you 15 minutes, if that is satisfactory. Mr. MCCORMICK. Entirely so. The CHAIRMAN. Give your name and address to the stenographer. SCHEDULE A. 169 PARAGRAPH 20 DYEING OR TANNING WOODS, ETC. Mr. McCoRMicK. R. A. McCormick, of McCormick & Co., of Balti- more. Mr. Chairman, the items that we as a firm are interested in are very small as compared with the main item in Schedule A, and I will therefore not take up very much of your tune on them. We handle a number of articles in the chemical schedule, but wish to speak only of those under section 20. This section deals with a number of items which we import under the free list, section 559, but which in the ground state, or in a state described in the section as " advanced hi value, " carry a specific duty of one-fourth cent per pound and 10 per cent ad valorem. The principal items we import affected by the sections are: Section 559, juniper berries, insect flowers, gum asafetida, marjoram leaves, thyme leaves, savory leaves, laurel leaves, and senna leaves; section 668, tumeric root, celery seed, caraway seed, anise seed, fennel seed, coriander seed, and fenugreek. None of these items, so far as we are informed and also advised by the United States Department of Agriculture, are produced in this country other than as an occa- sional kitchen-garden product, except insect flowers. These, we are advised by Prof. Woodward, entomologist of the department of agriculture of California, are cultivated in that State by one grower only, who sells all his products at higher prices than are paid for the imported flowers. As the yield is not one- thousandth enough to supply the demand, it would seem that this single product needs no protection when unground or ground. Different grades of practically every agricultural product may come from the same field. They will vary in value on account of soil or season by the care and intelligence, or their lack, used in gathering the crops, together with the facilities for curing and weather conditions while being matured. Any of our common grains, as oats, wheat, barley, or corn, may be so badly grown, gathered, cured, or protected that they may be difficult to market, but bring a f air price in the ground state, simply because the buyer can not so thoroughly examine or so easily see the defects and inferiority when in the ground condition, and also because no chemical or microscopical examination will equal the examination by the eye when in the whole state. Any one of the leaves named may lose its strength wholly or in part, and in consequence could not be imported unground, and would sell in the country of origin for only a fraction of the cost of prime quality leaves, but could still be ground and hardly denied entry. For instance, if they were mixed with a small quantity of first- quality powder, they would meet every requirement for entry. In some seeds, as, for instance, caraway, the grains may be exhausted in the process of distilling the essential oil. The exhausted seeds are inert and of no practical value, easily distinguished and condemned in examination by the eye and taste, but if ground and mixed with powder from good seed would pass current and not be refused entry. This danger of substitution is greater now than a few years ago, for damaged products not up to a certain well-defined standard may be and are rejected when presented for entry at our ports; there- fore the reasons for importing ground goods are greater rrorn a profit standpoint. 170 TARIFF HEAKINGS. PARAGRAPH 20 DYEING OR TANNING WOODS, ETC. Heretofore practically none of these items have been imported in the ground state; therefore there has been little or no revenue derived under this section from the class of goods named. In fram- ing a new tariff act with reference to goods affected by this section, if the duty is left unchanged we believe that in the main importing the ground goods will be prevented. It is, however, probable that in some instances 'it will be still found to pay the foreign grinder to send to the United States inferior ground goods rather than good class whole goods. In that event this class of goods would yield a small revenue, but to the detriment of the legitimate American grinder or to the ultimate consumer. If duties are reduced additional revenue will be had, as importing would be fostered, but the dangers pointed out would be propor- tionately increased. Putting these articles, if ground, on the free list would be particularly regrettable and would not only bring in no revenue but would certainly foster an evil without any compensating benefit. A duty on ground goods of this class is for one of two objects: First, as a revenue producer; second, to entirely bar out the goods. If for revenue, the duty must be at a happy medium between free and so high a tariff as to be prohibitive, or it must be high enough to be practically prohibitive. The latter is presumably the end here sought. I urge that your committee either leave the duties as they are now or increase them, and recommend that an ad valorem duty of 30 per cent rather than a combined specific and ad valorem duty, as at present will be best, and respectfully urge that this rate be adopted. STATEMENT OF W. W. SKIDDY ET AL., REPRESENTING THE MANUFACTURERS OF DYEWOOD AND TANNING EX- TRACTS. Paragraphs, present law: No. 20. Dutiable list, Schedule A; No. 22! Dutiable list, Schedule A. No. 559. Free list. Committee representing the manufacture of these extracts in the United States: W. W. Skiddy, Stamford, Conn.; Geo. A Kerr, Lynchburg, Va.: Onia Carr, Canton, N. C.: The New York Tanning Extract Co., New York, N. Y.; John D. Lewis, Providence, R. I.; American Dyewood Co.. Chester. Pa.: The Stamford Manufacturing Co., Stamford, Conn.: Brevard Tannin Co., Pisgah Forest, N. C.; Jno. E. Heaid & Co.. Lynchburg, Ya.; Mount Union Extract Co., Mount Union, Pa.: Smethport Extract Co., Damascus, Va.; The Tanners & Dyers Extract Co., Charleston, W. Va.; The Champion Fibre Co., Canton. X. C.; Cherokee Tanning Extract Co., Andrews, N. C.; American Extract Co., Port Allegheny, Pa.; and others (see page 9, Compilation of Tariff Hearings). WASHINGTON, January 6, 1913. Hon. 0car \V. Underwood, chairman, and the honorable members of the Way* and Means Committee. GENTLEMEN: Representing the manufacturers of dyewood extracts and tanning extracts in the United States, we beg to submit the SCHEDULE A. 171 PARAGRAPH 20 DYEING OR TANNING WOODS, ETC. following statement in connection with paragraphs 20 and 22 in the dutiable list and 559 in the free list. Messrs. Kerr & Can* are manufacturers of tanning extracts only; and Mr. Skiddy of both dyewood and tanning extracts, representing also the dyewood manufacturers. These gentlemen constitute a committee appointed by these manufacturing interests in the United States to represent them. DYEWOOD EXTRACTS. Your attention is called to what is known in the present law as paragraph No. 20, Schedule A, relative to woods imported that are used expressly for dyeing or tanning, and these woods represent the raw material for the manufacturing of these extracts. These woods have always come into this country free, provided that they have not been advanced in value by grinding, chipping, etc., as stated in this paragraph No. 20, and also stated in a corresponding section of the free list No. 559. These woods come from the islands of the West Indies, from the Gulf ports of Mexico, and from South American ports, aiding very materially the trading and shipping interests between these countries and the United States. Cargoes consisting of a great variety of goods can always be secured for export from this country, but owing to the fewer articles that these countries have that can be used in the United States, it is more difficult to get return cargoes. When these trees are cut down, it takes but a short time for con- siderable of the bark to peel off naturally, owing to the heat in these countries, so that the chipping is resorted to, to save time. This saves unnecessary handling and freight on the worthless bark, and enables the storing of the wood in vessels to better advantage. The adding of the word "peeling" in the two sections named, would place a duty on them for the first time, adding greatly to then* cost, for one-fourth of 1 cent per pound and 10 per cent ad valorem would mean over 1J cents per pound on the extract, as you can call 4 tons of wood equal to 1 ton of extract, and the value in the United States $19 to $20 per ton. Endless litigation would also be created in trying to prove what bark had fallen off naturally and what had been chipped off, opening wide the door for misrepresentation and fraud. A sample of the wood of the logwood tree, and of the bark of same, and one of the quebracho tree and the bark, is submitted. These dyewood extracts also meet strong competition in the impor- tation of coal tar or aniline colors, manufactured in Germany, all of them having a prohibitive protection for a long term of years by United States patents. The tonnage imported annually of these dyewoods at the present time is not as great as many years ago, owing to the competition with foreign goods and aniline colors. These conditions have caused several manufacturers of dyewood extracts of former days to quit the business. In the early eighties there was from seventy to eighty thousand tons of wood brought into this country, and, if I remember correctly, 172 TABIFF HEABINGS. PABAGBAPH 20 DYEING OB TANNING WOODS, ETC. nearly 100,000 tons per annum prior to that time; the figures since 1906, according to the United States reports, show as follows: Importations of logwood and fustic into the United States from 1906-1912, inclusive. Fiscal year ending June 30 Logwood. Fustic. Fiscal year ending June 30 Logwood. Fustic. 1906... 36,625 5,783 1910 31,270 5,816 1907 37 902 (i) 1911 35 340 5,379 1908... 21,809 4,452 1912 39,571 (i) 1909 17 873 2 466 1 No record. In 1897 nearly the whole of the textile manufacturers, the users of these extracts, presented a protest against any reduction in the duty on these dyewood extracts of seven-eighths of 1 cent per pound and as at present in paragraph 22, realizing that any injury done to the manufacturers in this country would greatly decrease compe- tition and that it was the home competition that kept down the prices for them, not only in dyewood extract, but in the patented German aniline extracts. These dyewood extracts are made in England, Germany, France, and Russia, and 25 years ago the United States shipped large quan- tities to France and Russia, but these countries placed a prohibitive tariff on them, completely killing these exports. France has been using this country as a dumping ground for these extracts when their manufacturing output could not be taken care of in their own country. The duty on dvewood extracts in France, unless it has been lately changed, is on blacks and violets (which is logwood), 20 francs per hundred kilos, which equals 1.8 of a cent per pound, and on reds and yellows (which means fustic and redwoods) 30 francs per hundred kilos, which represents 2.7 of a cent per pound, and I do not know of any commercial agreement between the two countries that changes in any way these rates. The wages paid in this country are much higher than paid in England, France, or Germany. Any reduction from the present rate of seven-eighths of a cent per pound on these extracts, as in paragraph Xo. 22, would be an encour- agement to the European manufacturers to ship their surplus to this country, thus running their factories full at the expense of the Ameri- can manufacturers, knowing that their tariffs prohibit interference from the American market. During the last few years, as stated, five or six manufacturers of dyewood extracts, included in former tariff hearings, have been obliged to go out of business, owing to foreign competition, including aniline colors, thus reducing profits, and those few who remain earn- estly ask that no change be made in the present law, thereby crip- pling their business and probablv reducing still further the number left. TANNING EXTRACTS. Tanning extracts are made from various woods and under processes similar to dvewood extracts. SCHEDULE A. 173 PARAGRAPH 20 DYEING OR TANNING WOODS, ETC. The largest quantities of tanning extracts used in the United States are those made from chestnut wood and quebracho wood. These extracts are manufactured in Virginia, West Virginia, North Carolina, Tennessee, Pennsylvania, New York, and Connecticut. The chestnut wood used grows in Pennsylvania, Virginia, West Virginia, North Carolina, and Tennessee, and the quebracho wood is imported from the Republics of Argentina and Paraguay. As already stated, a sample of the quebracho wood and of the bark has been submitted. This wood holds the same position as dyewoods, according to paragraphs 20 and 559 of the present law, and the same statement made for dye wood applies to quebracho wood. We would add that after a quebracho tree has been cut down and allowed to lie on the ground, which is always the case, it becomes necessary to remove the bark; otherwise the sap contained in this bark breeds a large quantity of worms which immediately attack the wood and injures its value for extract purposes. The duty thus created would add, as stated regarding dyewood extracts, an additional cost to the extract manufactured in this country of over 1J cents per pound. We pray that this word "peel- ing" will not be placed in these sections. The first mention of quebracho distinct from other tanning extracts was made in the law of 1897. At that time only one grade was shipped into this country, as regards density or gravity, and that grade was a liquid article in barrels standing at about 28 Baum6 and containing abt ut 35 per cent of tannic acid, and the law of 1897 placed upon this grade one-half of 1 cent per pound. Tanning extracts are sold by me pound, the price per pound based upon the percentage of tannic acid or tannin, as it is termed, contained in a pound; therefore, according to the strength or the weakness of the percentage of tan is fixed the price per pound on the market. Some tune after 1897 and prior to 1909 great improvements were made in machinery and apparatus for the reducing of liquid extracts to solid extracts without injury to the article so reduced. Extracts from woods are very susceptible and can easily be ruined by excessive heat, nothing more so than tannic acid, and these new methods and improvements enabled the manufacturer of the liquid to reduce these extracts further, or, in other words, to take the liquid which was at 28 Baume, representing one-half quebracho extract and one-half water and containing 35 per cent of tannic acid, to a heavier density by driving off the half amount of water, and producing what is known as solid extract. By driving off this water they of course made 1 pound of extract represent, more quebracho and less water, the result showing that this solid article contained about 12 to 15 per cent of water only and 65 per cent of tannic acid. This decrease of water and increased percentage of tannic acid immediately increased the value per pound; therefore in 1909 the manufacturers of this extract in the United States asked that an adjustment or equalization be made to meet these new conditions, and that the duty of one-half of 1 cent per pound on the liquid quebracho remain as in the law of 1897, bv adding the words " under 28 Baume" (which is the universal stand- ard in this country and all European countries to distinguish the 174 TAHIPF HEARINGS. PARAGRAPH 20 DYEING OR TANNING WOODS, ETC. difference between liquid and solid extracts), and that the solid extract, or that above 28 Baume", be placed at seven-eighths of 1 cent per pound, which would equal the one-half cent per pound on the liquid, as the solid was 65 per cent tannic acid instead of 35 per cent, as in the liquid. The Congress at that time, in 1909, saw fit to make the rate of duty on the solid three-fourths of a cent per pound, as per paragraph 21 in present law, instead of seven-eighths of a cent, which we asked for, which was a slight reduction, as it made the duty based on the percentage of tannic acid (viz, 65 per cent) less than the old duty of one-half cent on the liquid (viz, 35 per cent) as in 1897. The foreign manufacturer, in addition to this decrease in duty on sol d, gained a reduction of freight, in that they did not pay on the weight of barrels, as they put up and ship the solid in bags, which is a much cheaper package than barrels, also saving the freight on 50 per cent water that they formerly paid on the liquid extract and getting about double the price they could get for the liquid which they brought in under the law of 1897. Manufacturers of tanning extracts have always felt, and still do, that this adjustment was not an advance in 1909, but actually a reduction. Immediately after the passage of the 1909 law liquid extracts were no longer imported into this country, they coming only in solid form. The foreign manufacturer is noted for his shrewdness, and were it not to his advantage he would not have dropped the liquid entirely in favor of the solid. Our greatest competition in quebracho extract in fact, we might say 90 per cent of it comes from the Argentine Republic, and from one concern in that country known as the Forestal Land, Timber & Railways Co. In 1896 and 1897, when this extract was first manu- factured in the United States, there were a number of small independent manufacturers in the Argentine, but certain Germans, seeing an opportunity for large combinations, started in, and late in 1907 our agent or representative in Buenos Aires wrote us a letter in which he said an agreement has been made between several of the quebracho- extract manufacturers, etc., of the Argentine as to the fixing of prices and the soiling of the extract, and stating that "the signing parties aro tlio Forestal Land, Timber & Railways Co., the Puerto Sastre Co., T. II. Brncht & Co., the Puerto Marie, the Industrial Del Chaco, and tlio Cnssjulos." Sijiee that timo we have been constantly hearing of the Forestal Trust, and nothing we think can bo more convincing as to their increased growth and power and control of this business than to quoio from their own reports and the newspaper statements, relative to ^ hat they have done. hi 190'.) there appeared a small pamphlet published in London by 1! is company, giving maps, views, and facts concerning their busi- ness, and thoy state in this prospectus that their chief business is to make. \Sio extract from the quebracho wood. We quote: It ;s infeivsiino; to note that tlio pioneers of the quebracho-extract industry were Messrs. Hartneck, Portalis & Renner, now directors of the Forestal Land, Timber & Railways Co. SCHEDULE A. 175 PARAGRAPH 20 DYEING OR TANNING WOODS, ETC. The result of the labors of those gentlemen culminated in the formation of the Com- pania Forestal del Chaco, which built a factory at Guillermina, capable of turning out 24,000 tons of extract per annum, some 300 miles north of the factory which had already been established at Calchaqui, which had a capacity of 14,000 tons yearly, and they later on completed a third plant with a capacity of 7,000 tons yearly at Peguaho. The business of that company was taken over by the Forestal Land, Timber & Rail- ways Co. (Ltd.), as from the 1st January, 1906. This company has now a share capital of 1,200,000 pounds sterling, of which 1,171,500 pounds sterling has been issued, divided equally into preference and ordinary shares, besides 477,680 pounds sterling outstanding 5 per cent first mortgage debentures. On a slip placed in this book after publication they say: Since this pamphlet was sent to press, the Forestal Land, Timber & Railways Co. (Ltd.), has purchased $1,500,000 paper (or, say 130,000 pounds sterling) of 6 per cent first mortgage debentures of La Sociedad Quebrachales Fusionados at 90, and secured at the same time, the consignment of the total production of the Fusionados extract for the next seven years. The Review of the River Plate (a trade paper published in Buenos Aires), under date of June 16, 1911, presents the report of the directors to the stockholders for the year 1910, and states: The company has taken a substantial participation in the capital of the Ocampo Railway Co., which owns 36 kilometers of permanent way between the port of Ocampo and the terminus of the company's Malberti Railway, together with rolling stock, an investment which will conduce to the economical working of the Campo Redondo factory. The directors have been advised by cable that the long-deferred arrangement with the Fusionados Co. has been completed, and they await fuller mail particulars. The Fusionados Co. and the Hardy & Co. were the largest and strongest competitors the Forestal Co. had in the Argentine, and now they own or control them both. In 1912, at their stockholders' meeting in London, they issued a statement, with a balance sheet (a copy of which We have) showing a profit of over 429,000 pounds sterling. They also declared for 1911 dividends, the same as previous year 1910, viz, 14 per cent on their preferred stock and 24 per cent on their ordinary or common stock. Next to the Argentine, the largest manufacturing interests of this extract, is found in Germany and was started some years ago in Hamburg by Mr. Herman Renner. This gentlemen, as already shown, is a director in the Forestal Land, Timber & Railways Co., and we now quote from a Hamburg paper of October 28, 1912, as follows : [Gerb und Farbstoffwerke H. Renner & Cle, A. Q. Hamburg.] The principal object of the extraordinary stockholders' meeting held on October 28 was the proposition to accept an amalgamation of interests with the Forestal Land, Timber & Railways Co. (Ltd.), London. The presiding officer, Herr Geh. Kom- merzieurat, Dr. Ing. Carl Delius opened the meeting with the statement that the ex- ecutive committee felt sure that the amalgamation of interests would be beneficial to the shareholders. The principal points of the contract were as follows: We conclude on January 1, 1913, an amalgamation of interest with the Forestal Land, Timber & Railways Co. (Ltd.), by handing over our total profit, including the dividends, received from our ownership of Forestal shares and other participations in connection with the Forestal Co. The Renner Co. continues its present and absolutely independent organization; we in return are to receive a payment, which shall be governed by the dividend paid on the common and preferred shares of the Forestal. Calculating the dividend of 19 per cent paid for the past 2 years on the fully paid-in capital, said payment would amount to 1,940,000 marks a year. 176 TAEIFF HEARINGS. PARAGRAPH 20 DYEING OR TANNING WOODS, ETC. Every reduction of 1 per cent would be equal to a decrease of 100,000 marks; every addition of 1 per cent would represent an increase of 80,000 marks, but in no case shall the payment of the Forestal Co. exceed two and one-half millions yearly. We to receive 10 per cent of all special reserves, but said amounts shall be de- ducted whenever said reserves later on are paid out in the shape of dividends. We bind ourselves not to sell any of our "participations" without the consent of the Forestal. This conditions does not include the 11,669 preferred Forestal and 9,624 common shares, procured last year, with which we can act as we please. Any profit we may- make by a sale of these shares does not belong to the Forestal Co., but to our stockholders; we have also reserved to ourselves the ownership of a special reserve fund of 600,000 marks set aside to be used for the purpose of a supple- ment to our dividends in special instances. This agreement has been made for a period of 10 years and can be mutually can- celed by giving notice 6 months in advance earliest per January 1, 1920 by the payment of 30,000 pounds sterling as a compensation. The compensation of a cancellation for 1921 is reduced to 25,000 pounds sterling and for 1922 to 20,000 pounds sterling. The legal settlement of disputes shall be subject to the decision of the English auditors Deloitte, Plender, Griffiths & Co., and the Revision Treuhand A. G. Berlin. As a public indication of the amalgamation of interests, we propose the supple- mentary election of Mr. C. Hartneck, one of the directors of the Forestal Co., as a member of our executive committee. We ourselves are represented on the board of the Forestal Co. by our president, Herr Kommerzieurat and Herman Renner. The stockholders accepted the agreement unanimously by accla- mation; in the same Way Mr. Hartneck was elected a member of the executive committee. In reply to the question of a stockholder, whether the possibility exists to receive for the current year a considerably higher dividend, the presiding officer stated that, taking as a basis the result of the past 9 months, it is believed that at least the same dividend as the one paid last year will be distributed. But at the last moment he could not say whether a larger dividend could be paid, because it was impossible to foretell the result of the remaining three months, and, further, nobody could tell whether some complication in reference to the political situation may arise. In regard to the future prospect of the Forestal Co., the president, Mr. Renner, stated that the present year was of less interest for said company than the years 1913 and 1914. The outlook for the year 1913 could be called extraordinarily favorable, because there have been made such large sales of extract that it is believed that the average dividend of 19 per cent paid for some years past is safe. In the future also we may count upon receiving the same good dividends regularly. In reply to a further question the speaker gave the additional infor- mation that the stockholders' meeting of the Forestal Co. was taking place on October 28 at 3.30 p. m. in London, and in that way alt formalities in reference to the amalgamation of interest were settled on the same day. Again we quote from the Financial Times of London, under date of September 25, 1912: The Financial Times, referring to the reported amalgamation of the Santa Fe Land Co. with the Forestal Land, Timber & Railways Co., remarks that this will enable them, if the project is realized, to keep up the present price of quebracho, the working of which is the principal object of the two companies. Thus it seems that the control of this business is pretty well in the hands of one company, and all they require now in order to control SCHEDULE A. 177 PARAGRAPH 20 DYEING OR TANNING WOODS, ETC. a large part of the world is the American manufacturing interests which a reduced tariff rate would make it easy for them to accom- plish. In the hearings before your committee in 1909 Mr. Klipstein, the agent of the Forestal Land, Timber & Railways Co., undertook to deny a statement made by Mr. Skiddy that there had been a trust formed in the Argentine in 1907 to control the price of quebracho extract, but his denial is as follows: Mr. Skiddy states that there was formed a trust in Argentine in 1907 to control the pri; e of quebracho extract. As a matter of fact, the manufacturers of quebracho extract, in view of the impending panic, tried to form a combination to prevent enor- mous losses, but the panic was too severe, and the combine went to pieces, and the price of 2 cents per pound for quebracho extract, as mentioned in our first state- ment, was the result. The Argentine makers of extract had to take their panic med- icine like all the rest of the world. Please note that the price went to 2 cents per pound in 1908, as stated by Mr. Klrpstein, prior to then- purchase of 130,000 pounds sterling of the Fusionados Co., a very natural result of prices below the cost of manufacture. Mr. Klipstein in 1909 furthermore stated before the Ways and Means Committee in a brief that the price used to be 4 cents to 5 cents per pound, and generally imported in the form of the liquid extract. Bear in mind, if you please, that Mr. Klipstein hi this statement is referring back prior to the time of their making solid extract, and before they realized the growth of the American competition, and this competition when realized caused a reduction from 4 or 5 cents for liquid at 35 per cent tan to 4 cents for solid at 65 per cent tan (worth in the market almost double the price of the liquid), or, in other words, they were selling liquid without the American competi- tion at a price equal to 9^ cents per pound for the solid that thev are selling to-day for 4 cents per pound. Why should not prices advance again without competition? If the Forestal Co. or their representatives in this country under- take to claim that they are being frozen out and that the present rates of duty are so great they can not compete, then we would refer you to their statements already made in their reports to their stock- holders at their annual meetings held in London and their continuing to pay 24 per cent on their ordinary stock and 14 per cent on their preferred stock. Such dividends have not been and can not be earned by the Amer- ican manufacturers. A reduction in the present duty would tend to bring about one of two results, either the closing out by the American manufacturers at great loss, or the temptation to get together, advance prices, and control the market. We also have received a copy of the Daily Mail of Paris, under date of November 14, 1912, with an advertisement of the Forestal Land, Timber & Railways Co., stating that the capitalization is 1,700,000 pounds sterling, setting forth their great earning power, etc., and offering to sell 1,000,000 pounds sterling of 5 per cent first mortgage bonds. 78959 VOL 113 12 178 TARIFF HEARINGS. PARAGRAPH 20 DYEING OR TANNING WOODS, ETC. That imports have not been checked by the present tariff, we sub- mit the following table: Fiscal year ending June 30 Tons of wood received and amount of extract same represents each Govern- ment fiscal year. Tons of solid extract im- ported into the United States and the tons of wood same represents each Government fiscal year. Per cent ex- cess of extract imported and wood used for same above that used for man- ufacture in the United States. Tons of wood received in the United States per Department of Commerce and Labor. Represents in solid extract (pounds). Pounds of solid extract imported into United States per Department of Commerce and Labor. Represents total tons wood used for same. 1906 87,838 67,310 48,871 66,113 80,210 64,703 68,174 49,189,280 37,693,600 27,367,760 37,023,280 44,917,600 36,238,720 38,177,400 43,989,707 76,479,846 62,593,671 99,108,284 90,483,576 77,606,700 74,239,715 78,553 136,572 111,774 176,979 161,578 138,584 132,571 1907 102.8 128.7 107.7 101.4 114.2 94.4 1908 1909 1910 1911 1912 Please note that in 1906 the United States manufacturers did a little more business in pounds of extract than did the importers. The Forestal Trust at that time, as already shown, was not fully in the saddle, but later the imports were considerably over 100 per cent, and in 1908-1909 it was the largest, probably due to the low price of 2 cents mentioned by Mr. Klipstein. The year 1912 shows about double the quantity of extract imported as compared with the quantity manufactured in this country, but a decrease of about 20 per cent from the imports of 1911. This decrease can not be attributed to the increase of the home manufacture, as they only show about 5 per cent increase between the same years, which was 10 per cent less than they showed in 1910. The present tariff can not be called excessive; otherwise, the imports would not exceed the home manufacture by 100 per cent and maintain this position year after year. We understand that the desideratum of tariff adjustment is to establish a rate that will produce the greatest revenue, combined with greatest encouragement for both home and foreign competition; therefore as a tariff for revenue and competition the present rate should be retained. Total money re- ceived by pres- ent rates on the actual imports each year, viz, three- fourths cent per pound. 1 Total money re- ceived at a rate of three-eighths cent per pound on total used hi United States by adding to ac- tual imports the amount manu- factured hi the United States.* Loss in revenue to the Government even by having total consump- tion imported at three-eighths cent per pound and home manu- facture wiped out and no competi- tion.' 1907 $573,598 84 $428, 150. 40 $ 145, 448 44 1908 469,452.52 337,355.37 132, 097. 15 1909 743,312.13 510,493.36 232, 818. 78 1910 678, 626. 82 507,754.41 170,872.41 1911 582, 050. 25 426,901.41 155, 148. 84 1912 556,797.85 421,564.33 135, 233. 52 1 Three-fourths per cent on account imports. 1 Three-eighths on all. 'Loss. SCHEDULE A. 179 PABAGBAPH 20 DYEING OB TANNING WOODS, ETC. If the tanners of this country understood the actual conditions, they would be more anxious than the extract manufacturers to have the duty on these extracts maintained. We have seen of late articles in the leather-trade papers advocating reductions in the tariff, all written by importers or representatives of foreign manufacturers (or their employees), the usual method they have adopted for years prior to tariff hearings. On the 30th day of August last the Stamford Manufacturing Co. wrote to their agent in Buenos Aires, putting to him a few questions, wishing to have an answer in time to place before your committee, which we now submit : Question No. 1. What is the wage per day or month of the ordinary laborer at a quebracho factory in the Argentine? Answer. The wage of the ordinary laborer in the Chaco is about $20 per month. NOTE. In this country the ordinary laborer receives $1.75 per day, about 127^ per cent higher. Question No. 2. What are the wages per day or month of a more intelligent man, such as bosses, etc.? Answer. The wages of a more intelligent man, such as a foreman, is about $40 per month, or perhaps $50. NOTE. The wage of such men in this country is from $2.75 to $3 per day, about 56 per cent higher. Question No. 3. What are the wages per day or month of still higher class of me- chanics or engineers who have to be imported to that country? Answer. About $80 a month. NOTE. In this country from $4 to $4.50 a day, about 46 per cent higher. Certain other questions as to cost, freights, etc., he states, depends upon distance, freight, etc., making the cost of the solid extract on board vessel ready for shipment to the United States at from $59 to $62 gold per thousand kilos. NOTE. This represents 2.62.7 cents per pound. To this must be added the freight from the Argentine and the present duty to give the cost price here. Assuming an equal division of the various grades of labor (although the ordinary labor of $1.75 per day would be the largest), the average shows 76 per cent higher in this country than in the Argentine Republic. The difference in wages, taking the cost of the extract in this country and as shown to be in the Argentine, estimated on the average higher wage of 76 per cent, shows about nine-tenths of 1 cent per pound. Chestnut extracts are largely used in connection with quebracho extracts, a combination of the two extracts used quite extensively by the tanners. Chestnut extracts are made abroad and could easily become a part of the business of quebracho manufacturers, a natural result of a reduction in the present tariff. Such a result would be injurious to the American chestnut manufacturers, probably causing many of them to quit business, thus throwing on the market many plants at low prices, the purchase of which might result in the absolute control of the two most important and largely used extracts by the tanners in the United States. 180 TABTFF HEARINGS. PARAGRAPH 20 DYEING OR TANNING WOODS, ETC. The attached pamphlet is submitted as part of this brief, it being a compilation of the tariff hearings in 1909 and since, and which we believe in this form will be of aid to your honorable committee. ADDITIONAL STATEMENT OF W. W. SKIDDY, NEW YORK, N. Y. NEW YORK, January 28, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: Certain corrected figures furnished by the Department of Commerce and Labor somewhat changed the brief under date of January 6, 1913, relative to the dutiable clauses No. 20 and No. 22 in Schedule A, and 559 on the free list. (Corrections made in brief above.) I also beg that you accept a few statements further in relation to the matter. First, that you notice in a page taken out of the Review of the River Plate under date of December 13, 1912, being a general trade paper, published in Buenos Aires, which shows, according to the re- ports from the Argentine Government, the exports for the first 11 months of 1912, and notice the total amount of quebracho wood ex- ported from that country, there was 31 per cent of it shipped to the United States and 34 per cent of it shipped to Germany, and there was shipped of the extract to the United States 41 per cent of the total and to Germany only 17 per cent, showing that an excess of the manufactured article over the raw material to the United States was 10 per cent, but that to Germany it was the reverse, and there was 85 per cent in excess of the raw material over the manufactured goods. The total raw material, therefore, would indicate that 65 per cent of it was shipped 1o the United States and Germany. These figures prove absolutely that when 41 per cent of the total exports of any particular kind of manufactured goods from any one country can be shipped to the United States that the existing laws do not interfere with the free trading in these goods, particularly when this quantity shows, as it does in the Government figures, that it is 100 per cent greater than the amount of the same kind of goods manufacture in the United States. The American manufacturers under these conditions certainly do not control the market, but are simply competitors as against the much greater market that is bringing into this country the same kind of goods. On the 6th of January last Mr. August Vogel appeared before your committee, stating that he represented the tanners, and I believe he does represent some of them, but not all of them, and in his cross- examination, which you will lind on page 87 of No. 1 Tariff Hearings, in answer to Mr. .lames, is the following: Mr. JAMKS. il.,\v niadi cheaper d<> they sell that .stuff in Canada than here? Mr. Yor; i-;i.. You can buy f|uel>raeh<> at :} cents there, and it costs you 3| cents here. Mr. JAMKS. They just add <>n the tariff? Mr. YIH;EL. They just add the tariff. SCHEDULE A. 181 PARAGRAPH 20 DYEING OR TANNING WOODS, ETC. Mr. JAMES. They sell it in competition in Canada? Mr. VOGEL. Yes, sir. The American chestnut extract is sold in Canada in com- petition with the world's extracts, even so far that they manufacture quebracho ex- tract in this country and sell it over there in competition with the world's markets. That, Mr. Hill, would seem to me rather a good indication that they could exist, the fact that they can take this quebracho extract manufactured in this country and sell it over in Canada in competition with the world's extracts. We do not ask to go as far as that. This statement is not only misleading but is not true, and we do not believe that Mr. Vogel would have made it did he really know the actual facts. The vice president of the New York Tanning Extract Co., hi answer to this statement, has written a letter which I 'inclose and which proves very positively so far as they are concerned, the error of Mr. Vogel, and the sales manager has given to me one as regards my company, which also disproves the statement. We think this is sufficient to correct Mr. Vogel's error, but hi further answer to this statement, Mr. George A. Kerr, of Lynchburg, Va., a member of this committee and a manufacturer of chestnut extract, stated to Mr. F. B. Harrison, that the only reason they could ship liquid chestnut extract to Canada was owing to the use of tank cars, because in shipping in tank cars there is from one-fourth to thirty one-hundredths of a cent saved per pound in the cost of barrels, hand- ling, and freight of the same, and this difference enables them to send their liquid chestnut extract to Canada; Otherwise, they could not do so. In fact, the use of tank cars during the last few years in the tanning extract business, has grown rapidly, being forced upon the manufacturers in order to have a saving, as stated by Mr. Kerr, which enables them, in all of these liquid extracts, to compete with the imported solid extracts at the present prices. The United States has almost entirely lost their solid extract business, and a very large percentage of their liquid business is now being carried on in tank cars, and but for this we fear they would have lost a large quantity of that business also. A little incident for further proof I would quote, viz, that the Stam- ford Manufacturing Co.'s representative, Mr. H. Stacy Smith, of Newark, N. J., finding that some of his customers want occasionally a little extract in the solid form, and, of course, wishing it at the prevailing price, placed us in a position where we could not furnish it except at a heavy loss; therefore Mr. Smith asked us if we would not allow him or arrange for him to sell the imported solid, which was granted; and Mr. E. C. Klipstein, agent or the Forestal Co., was communicated with, and you will find copy of his letter to us, the original of which, of course, we should be very glad to show if you wish it, and also a copy of Mr. Smith's reply, which we can also show. The price fixed upon these goods by Mr. Klipstein for Mr. Smith was 4 cents per pound for the higher grade or clarified at 65 per cent of tan, and 3| cents per pound for the ordinary or unclarified at 65 per cent of tan, f. o. b. New York. This transaction was somewhat humiliating, but made necessary hi order that we could retain the liquid-extract trade hi the tank cars by furnishing what solid these customers required. 182 TARIFF HEARINGS. PARAGRAPH 20 DYEING OR TANNING WOODS, ETC. Silence as to statements made against us might be construed as an admission on our part of their truthfulness, and we therefore stand ready to answer any statements that tend to question the truth of anything that we have said. Very truly, yours, W. W. SKIDDY, For W. W. Skiddy, Geo. A. Kerr, and Oma Case, committee. Destination of principal exports from Argentina of the first 11 months of 1912 to Euro- pean, North American, and Brazilian ports. ppst.raticn. Quebracho. Wood. Extract. United Kingdom Tons. 6,562 75,075 18,707 83,727 11,085 5,310 Tffns. 7,478 28,192 2,114 11,954 7,015 2,257 60 9,276 United States . . . . France Germany Belgium Italy Brazil. . Other countries 43,315 Total 243, 781 68,346 11 months: 1911.. . .... 394,835 343,299 266,162 253,231 77,115 60,537 54,034 56,687 1910 1909 . . . ... 1908.. [Inclosure.] NEW YORK TANNING EXTRACT Co., New York, January 29, 1913. Mr. W. \V. SKIDDY, President Stamford Manufacturing Co., 82 Wall Street, New York. DEAR SIR: In connection with tariff hearings on Schedule A, held in Washington on January G, we note that on page 87 of pamphlet No. 1 of the Ways and Means Committee covering these hearings that Mr. Vogel. chairman of the National Associa- tion of Tanners' Tariff Committee in hie cross-examination is reported as saying in regard to the sale of solid quebracho extract in Canada that ''they manufacture quebracho extract in this country and sell it over there (in Canada) in competition with the world's markets." In reply to this assertion we wish emphatically to state that as far as our own business in quebracho extract goes, Mr. Vogel' s statements are absolutely at variance with the facts, and calculated to do us a great deal of harm in this tariff discussion. It is wholly impossible for us to sell any of our solid quebracho extract of domestic make in Canada in competition with the foreign-made goods, and we can not recall an instance where we have ever sent a pound of our domestic-make solid quebracho extract into that section. We. however, have a number of customers in Canada who buy of us foreign- made solid quebracho extract, which we sell on commission and ship through the United States to Canada in bond, but all of this extract is made in the Argentine Republic. For your guidance I might state we are sending a small amount of liquid quebracho to Canada, but are getting for same the regular market price charged for these goods in this country. This business, however, is not important, and it is equally impossible for us to compete witli our liquid quebracho extracts in Canada with foreign-made solid extracts. The facts of this whole matter are that solid quebracho extract can not be made in ih is country from the raw material and sold at prevailing market prices, even with the present duty, at any profit whatever, and the business in liquid quebracho extracts SCHEDULE A. 183 PARAGRAPH 22 DYEING OR TANNING EXTRACTS. is only made possible by reason of their peculiar efficiency for certain purposes, whereby the customer is willing to pay a relatively higher price for them, or by reason of the fact that they can be shipped in tank cars at a minimum of expense for handling, freight, etc. We can not too strongly urge you to impress the Tariff Committee with the fact that American manufacturers of quebracho are to-day in a most hazardous position on this tariff matter, and that any reduction whatever in the duty will be a most serious matter for this business, which although not large by itself, yet as a branch of the tanning extract industry, certainly demands proper consideration. Mr. Vogel says nothing about the fact that even though the duty on solid quebracho extract in the Payne bill was by reason of its greater strength readjusted to differentiate it from the liquid, the price of solid extract which at that time was 4J to 4| cents per pound has in the meantime dropped to 3| to 4 cents per pound. This drop in price has been caused by competition of foreign makers of quebracho, whose consistant aim, as you know, has been to force American manufacturers out of business, and who apparently have been able under present conditions of prices and tariff to sell their goods here at a profit. The present duty to-day barely gives us a fighting chance in continuing the manufacture of quebracho extracts in this country, and any reduction in same would surely force us to give up the business. Yours, very truly, NEW YORK TANNING EXTRACT Co., J. STEVENS, Vice President and Treasurer. PARAGRAPH 21. Ethers: Sulphuric, eight cents per pound; spirits of nitrous ether, twenty cents per pound; fruit ethers, oils, or essences, one dollar per pound; ethers of all kinds not specially provided for in this section, fifty cents per pound; ethyl chloride, thirty per centum ad valorem: Provided, That no article of this paragraph shall pay a less rate of duty than twenty-five per centum ad valorem. For sulphuric ethers, see also Mallinckrodt Chemical Works et al, page . 49 PARAGRAPH 22. Extracts and decoctions of logwood and other dyewoods, and extracts of bark, such as are commonly used for dyeing or tanning, not specially provided for in this section, seven-eighths of one cent per pound; extract of nutgalls, aqueous, one-fourth of one cent per pound and ten per centum ad valorem; extract of Persian berries, twenty per centum ad valorem ; chlorophyll, twenty per centum ad valorem; extracts of quebracho, not exceeding in density twenty-eight degrees Baumfi, one-half of one cent per pound; exceeding in density twenty-eight degrees Baum6, three-fourths of one cent per pound; extracts of hemlock bark, one-half of one cent per pound ; extracts of sumac, and of woods other than dyewoods, not specially provided for in this section, five-eighths of one cent per pound; all extracts of vegetable origin suitable for dyeing, coloring, staining, or tanning, not containing alcohol and not medicinal, and not specially provided for in this section, fifteen per centum ad valorem. For nutgall extract, see also F. Bredt & Co., page 54; for tanning extracts, see also W. W. Skiddy, page .172 DYEING OR TANNING EXTRACTS. STATEMENT OF AUGUST VOGEL, OF MILWAUKEE, WIS., REPRE- SENTING THE NATIONAL ASSOCIATION OF TANNERS. Mr. VOGEL. Mr. Chairman, I desire to have a correction made in the calendar. I am not interested in brewers' malt, in spite of the fact that I come from Milwaukee. I suppose the word "Milwaukee" was sufficient to carry the beer sign with it, but I desire to correct that, and also that it is not "tunners," but the tanners who are 184 TARIFF HEARINGS. PARAGRAPH 22 DYEING OB TANNING EXTRACTS. appearing before you. With your permission, Mr. Chairman, I would like to read the brief of the tanners in reference to this schedule. The CHAIRMAN. The committee has allowed you 15 minutes with- out interruption. Of course after that the committee may cross- examine you. You may dispose of the 15 minutes to suit yourself. Mr. Vogel read the brief referred to, as follows: On behalf of the National Association of Tanners, and representing a majority of the tanning interests of this country, we respectfully ask the attention of your hon- orable committee to the items enumerated below, which appear under Schedule A of the Payne Tariff Act. Para- graph. Item. Duty. 1 2j cents per pound. 4 J to f cent. 4 i to I cent. 9 J cent. 11 2 cents. 15 30 per cent ad valorem. 22 j cent per pound. 22 A to $ cent per pound. 22 J cent. 22 | cent. 22 1 cent. 22 Extract sumac | cent. 22 f cent. 22 | cent. 35 Linseed oil 15 cents per gallon. 40 Cod oil 8 cents. 40 Sod oil . . 8 cents. 40 Fish oil . 8 cents. 71 Bichromate soda IJ cents per pound. 74 Sal soda J cent. 75 Soda ash i cent. 79 Sponges 20 per cent ad valorem. 81 ?4 per ton. 82 Sumac, ground . . i^j cent per pound . 559 Bark Free. 290 Degras - - } to i cent per pound 1 Lactic acid 2 to 3 cents per pound. 1 Sulphuric acid } cent. 73 Soda sulphide | to f cent. 45 Lampl ilack 25 per cent ad valorem. GO Bichromate potash '2\ cents per pound. 73 Yellow prussiate soda 2 cents 09 Soap 20 per cent ad valorem. 1 Oxalic acid 2 cents per pound Cottonseed oil Free The above equal an average ad valorem duty of about 29 per cent. Our recommendation in reference to these items (all of which enter into the tanning of leather) is that the rates indicated in II. R. 20182, introduced in the last session of Congress, be used in the readjustment of duties on paid items, except that on tanning extracts other than chestnut and quebracho we suggest one-eighth cent per pound all providing that there is to be no important change made in the present low duties on leather. The reduction of duty on belting, sole, and rough leather from 20 per cent in the !>iiiLj;ley Act to ~> per cent in the Payne Act, a reduction of 75 per cent, has already n suited in a marked increase in importations of such leathers, as illustrated in table below. SCHEDULE A. 185 PARAGRAPH 22-DYEING OR TANNING EXTRACTS. Importations of belting, sole, and rough leather, duty 5 per cent (record incomplete prior to December, 1911). [Source: Monthly Summaries of Commerce and Finance.) Six months ending December, 1911 $314,422 January, 1912 406,406 February, 1912 452, 565 March, 1912 497,858 April, 1912 5;%, 615 May, 1912 626, 349 June, 1912 706, 492 July, 1912 806, 891 August, 1912. 871, 398 September, 1912 872, 528 October, 1912 932, 200 Referring to the items of tanning extracts, which are the most important items to our industry of those listed above, we argue for the reduction of these duties on the broad ground that the duties are unreasonably high. The approximate cost of producing liquid chestnut extract in this country is 1 cent per pound and of solid chestnut extract 2f cents per pound. A duty of three-eighths cent per pound, as recommended above, equals 37.5 per cent of the cost of liquid chestnut extract and 13.6 per cent for the solid. The present duty on chestnut ex- tract of five-eighths cent per pound equals 62.5 per cent of the cost of the liquid extract and 22.5 per cent for the solid. These duties seem to us manifestly too high, especially in view of the low rates of duties (5 and 1\ per cent) on the various kinds of leather in which these extracts are used. The imports of quebracho extract into the United States has varied from seventy- five to one hundred million pounds per year during the past three years. This im- portation has produced a revenue for the Government of over $500,000 annually, but has failed to materially increase the production of quebracho extract in the United States, which is limited to two plants. It is, therefore, our opinion that no duty should be placed on quebracho, except as may be found necessary for revenue pur- poses. We would call to your attention the importance of this matter of tanning extracts to the leather industry, by submitting herewith a table showing the relation of the value of tanning extracts to the value of the leather tanned with that extract. Classes of sole leather. Price per pound of leather. Tanning material cost per pound of leather. Equivalent percentage. Packer slaughter Cents. 27 Centi. 31 13.0 Tannery run dry hide . 24 3} 14.6 Dry hide, No. 2 26 34 13.5 Dry hide, No. 3 24 3i 14.6 Dry hide scabs .. 15 34 23.3 Dry hide rejects 22 3J 15.9 Heads 12 li 29.2 Bellies . . . . 18 34 18.4 This table is based upon two well-known classes of sole leather, namely, packer slaughter leather and dry hide leather, which leathers are those principally used in the manufacture of low and medium priced shoes. You will note from this table that the value of the tanning extract in a pound of leather varies from 13 to 29.2 per cent of the value of the leather in the different grades enumerated . In fact, the duty on the extract at three-fourths of a cent a pound equals the entire duty on a pound of the lowest grade leather mentioned (dry hide scabs). Approximately, it takes about 1 pound of solid extract to tan 1 pound of leather. 186 TARIFF HEARINGS. PARAGRAPH 22-DYEING OR TANNING EXTRACTS. Quebracho extract is used in combination with domestic chestnut extract to- pro- duce the proper color in the leather. Lower duties on foreign extracts will tend to increase the use of chestnut extract, and this will conserve our hemlock and our oak a We 8 would also call to your attention that our principal-competitor is the Canadian tanner who pays no duty on tanning extracts. He has cheaper bark and labor as low or lower than ours. In spite of the competition of free quebracho and other tanning extracts in Canada, American extract manufacturers are regularly shipping quebracho and chestnut extract from the United States to Canada, demonstrating that these American extract manufacturers can compete even with free foreign extract. Respectfully submitted. THE NATIONAL ASSOCIATION OF TANNERS' TARIFF COMMITTEE. AUGUST VOGEL, Chairman. The CHAIRMAN. Do you desire to say anything further ? Mr. VOGEL. I have nothing to say, unless questions should come from the other side. Mr. HILL. I would like to ask a question with reference to que- bracho. Do you think the duties provided hi this bill should remain hi reference to the extract of quebracho ? Mr. VOGEL. No, sir. I recommend that it be reduced from three- fourths to three-eighths of a cent. Mr. HILL. I mean the duties on the raw material ? Mr. VOGEL. On the raw material ? I do not quite get your question. Mr. HILL. Do you think there should be a 10 per cent duty on what has always been free, as the raw material of the industry of making extract of quebracho, solely for the sake of getting revenue? Mr. VOGEL. The duty is at present three-fourths of a cent a pound on quebracho. Mr. HILL. I understand that, but I am talking about the log from which it is made. Mr. VOGEL. The log will remain free. Mr. HILL. It does not remain free under this bill, if it is peeled, and it can not be brought here any other way. There is a duty of 10 per cent on it. Mr. VOGEL. I am not prepared to argue that point. Mr. HILL. That is a very vital point, is it not, to the manufacturer of quebracho ? Mr. VOGEL. It is, no doubt. Mr. HILL. Is it possible to make a cut of 50 per cent in the duty on the extract and add 10 per cent to the raw material and expect the industry to continue in this country ? Mr. HARRISON. This gentleman is not a manufacturer of quebracho. Mr. HILL. I understand that; he is appearing in behalf of the tanners, and. as I read the statement here, is in favor of continuing the duties on the raw materials put down in the chemical bill re- ported last year. Mr. HARRISON. He is in favor of the reduction made in the chem- ical bill reported to the House last year as to all those items as to which material reductions were made in that bill. Mr. HILL. But the brief says: Our recommendation in reference to these items (all of which enter into the tan- ning of leather) is that the rates indicated in H. R. 20182, introduced in the last session of Congress, be used in the readjustment of duties on said items, except that on tanning extracts, oilier than chestnut and quebracho we suggest one-eighth cent per pound. SCHEDULE A. 187 PARAGRAPH 22 DYEING OR TANNING EXTRACTS. And so it goes on. Now, do you recommend that the log be sub- jected to a duty of 10 per cent in order to get revenue? Mr. VOGEL. No, sir; I do not. Mr. HILL. Then, you would not insist upon the statement in this brief, that the duties provided in the recent chemical bill be made the basis of a readjustment in that industry ? The CHAIRMAN. I will state to Mr. Vogel, so that there may be no misunderstanding, that the law was changed when the bill went through the House last year, so that the word "peeling" was added to the present law. It has been suggested that to put the word "peeling" in there might put a tax on the log. There was no inten- tion on the part of the committee to tax the raw material. Mr. HILL. I am glad to hear that. The CHAIRMAN. And if that construction of the word should put a tax on the raw material, it would be corrected at the proper time. I want the record to be clear as to that point. Mr. VOGEL. I am very glad you brought up the point, because it has been brought up to us, and we took it for granted that it was not to be taxed. Mr. PAYNE. Has the tanning business been pretty prosperous in the United States in the last three or four years ? Mr. VOGEL. It has been pretty fairly so. Mr. PAYNE. Pretty universally so, has it not? Mr. VOGEL. Yes, sir. Mr. PAYNE. With the present rate of duty both on the extract and on the leather? Mr. VOGEL. Yes, sir. Mr. PAYNE. Do you advocate taking the duty off the sole leather ? Mr. VOGEL. No, sir; we do not. Mr. PAYNE. Suppose the duty, which is now 5 per cent, were taken off, in order to take the duty off shoes, which is now 15 per cent, do you think that would add to the prosperity of the tanning business in this country ? Mr. VOGEL. The tanning business as it is to-day is not earning a percentage of profit which compares favorably with other industries, as far as my own knowledge goes, and the very fact that these imports of sole leather are increasing so rapidly, as they are doing, is a very good indication that the Canadian tanner has an advantage over the American tanner at the present time. With his free extracts and his labor cost no higher, he has undoubtedly an advantage over the American tanner. Mr. PAYNE. You might get along without any duty; is that the idea? Air. VOGEL. I do not wish to be understood so. We have labor cost, as far as England is concerned, fully double. I can submit to you reliable figures, which we will be pleased to give you when the leather schedule comes up, showing that where we pay $12 the English- man and German pays six. Mr. PAYNE. Do you advocate taking the duty of 5 per cent off sole leather ? Mr. VOGEL. We claim we are justly entitled to the difference of labor cost abroad and in this country. 188 TARIFF HEARINGS. PABAGBAPH 22 DYEING OB TANNING EXTBACTS. Mr. PAYNE. Will you advocate taking it off? Mr. VOGHL. I do not advocate taking it off; no, sir. Mr. LONGWORTH. You are aware, are you not, that in another bill which passed the House that leather was put on the free list ? Mr. VOGEL. I understood so; yes, sir. Mr. LONGWORTH. If that should happen, which the indications are will come to pass, would you revise your recommendations as set forth in this brief? Mr. VOGEL. We certainly should. We should very strongly con- tend we would be entitled to free extracts. Mr. LONGWORTH. This is based on the contingency that there will be no change in the leather schedule ? Mr. VOGEL. Yes, sir. As far as the sole leather and heavy leather schedule is concerned, that is our contention. Mr. LONGWORTH. I think you will have to rewrite it very shortly. Mr. PAYNE. It is a fact, is it not, that four years ago the tanning business for sole leather in this country was done either in Germany or by what is called the Meat Trust, largely? Mr. VOGEL. No; I can not agree with that statement. Mr. PAYNE. It was shown pretty conclusively four years ago that that was the case. Mr. VOGEL. I have not seen that evidence. Mr. PAYNE. The meat people were buying up and renting the tan- neries at that time in this country? Mr. VOGEL. Yes, sir; they were renting a good many. Mr. PAYNE. And had control of a good portion of them? Mr. VOGEL. Yes. sir. Mr. PAYNE. And our tanners here could not get hides from the meat people, except the few that were imported? Mr. VOGEL. You will notice that the imports of hides have increased enormously since then, to the benefit, I believe, of our industry, as well as to the people at large. Mr. HILL. In considering this recommendation for a continuance of 5 per cent duty on leather, do you concurrently recommend the application of the tanning extract rates in this bill which was passed last session ? Mr. VOGEL. Yes. sir: we do. Mr. HILL. Have you figured how much advantage there would be to the t turner in the reduction of rates? Mr. \OGEL. } es. sir. I believe our brief so states, if you will read tliis brief. Mr. HILL. It strikes me that the reduction in the tanning extracts would be fully equivalent to the ."> per cent, making practically a 10 per cent rate now as compared with 5 per cent under the present law, with these articles at the other rate of duty. Is not that correct ( Mr. Y(H;KL. You will find from our brief that we state that the duty is equivalent in some of these eases. Mr. HILL. But. taking the trade by and large, if these extracts are reduced in accordance with this bill, should not the 5 per cent come oil' leather ( SCHEDULE A. 189 PARAGRAPH 22 DYEING OR TANNING EXTRACTS. Mr. VOGEL. No, sir; unless you wish to lower your standard of American labor, and unless you want us to cut our laborers down. Mr. HILL. Why are you not willing to concede to the manufac- turers of the tanning extracts, from whom you buy, the same cour- tesy you ask from the committee on your finished product of leather ? Mr. VOGEL. We do. Mr. HILL. No; you recommend a reduction. Mr. VOGEL. Because they are entirely too high; because they run up as high as 62 ^ per cent, and we are down to 5. We do not ask them to give free extracts. We simply state that the American ex- tract manufacturer is to-day selling extracts in Canada, out of which they make leather competing with ours in this country, to our disad- vantage. We do not ask for free extracts. We believe that under the three-eighths cent duty they can carry on a profitable business. Mr. DIXON. Do they sell it cheaper in Canada than here ? Mr. VOGEL. Yes, sir. Mr. HILL. Were you here four years ago ? Mr. VOGEL. Yes, sir. Mr. HILL. Did you not then say that if you could have free hides you were willing to have free leather? Mr. VOGEL. I never made such a statement. Mr. HILL. Who was it that made that statement ? Mr. VOGEL. I believe that was made by a gentleman in the shoe industry. Mr. HILL. Did not the tanners unite with the shoe manufacturers in that request? Mr. VOGEL. We did, sir; but we did not unite in this statement. Mr. JAMES. How much cheaper do they sell that stuff in Canada than here ? Mr. VOGEL. You can buy quebracho at 3 cents there, and it costs you 3f cents here. Mr. JAMES. They just add on the tariff? Mr. VOGEL. They just add the tariff. Mr. JAMES. They sell it in competition in Canada ? Mr. VOGEL. Yes, sir. The American chestnut extract is sold in Canada in competition with the world's extracts, even so far that they manufacture quebracho extract in this country and sell it over there in competition with the world's markets. That, Mr. Hill, would seem to me rather a good indication that they could exist, the fact that they can take this quebracho extract manufactured in this country and sell it over in Canada in competition with the world's extracts. We do not ask to go as far as that. Mr. HILL. What proportion of the leather is now produced by the independent tanners strictly independent, I mean and the packers; half and half, is it ? Mr. VOGEL. I should say, taking the industry as a whole in- cluding goatskins, calfskins, and every kind of leather manufac- tured that the packer tanners would not produce over 15 per cent of the total output and that the independent tanners would produce 85 per cent of tne total output. When you consider only the pro- duction of heavy leather, the packer's proportion is larger. Mr. HILL. Immediately after hides were made free they went up, did they not ? 190 TARIFF HEARINGS. PARAGRAPH 22 DYEING OR TANNING EXTRACTS. Mr. VOGEL. Yes, sir. Mr. HILL. Have they ever got back to where they were when the duty of 15 per cent was on them? Mr. VOGEL. Yes, they have. Mr. HILL. When? Mr. VOGEL. I think about two and a half years ago, in the begin- ning of 1910, the prices were lower than before the repeal of the duty. Mr. PAYNE. About a year after the bill was passed, was it not ? Mr. VOGEL. About a year after the bill was passed. Mr. PAYNE. The price stayed there overnight, or such a matter ? Mr. VOGEL. Not at all. The prices continued lower during 1910 and 1911 until about the middle of 1912. For three or four months, in the early part of January, 1911. Mr. PAYNE. Then they went up again ? Mr. VOGEL. Then they went up again. Mr. PAYNE. Have they stayed up since ? Mr. VOGEL. Yes, sir. Mr. HARRISON. How much higher would the price have gone if the rate had stayed on ? Mr. VOGEL. Approximately 13 per cent. Mr. HILL. That is a question of supply and demand, is it not? Mr. VOGEL. Entirely so. Mr. HILL. Tell me, is the same grade of leather higher or lower here than it is in Europe to-day? Mr. VOGEL. That is rather a difficult comparison to make. Mr. HILL. Take ordinary sole leather. Mr. VOGEL. Ordinary sole leather, what we call dry hide leather, has been the unprofitable end of the sole leather business during the past year. Mr. HILL. "Why is it the unprofitable end? Mr. VOGEL. Because the tendency has been to use union and oak leather, a lighter colored leather. The old-fashioned hemlock leather, which at one time was used so largely for the common shoes of this country, is being replaced by union and oak. The American tanner had the advantage over his foreign competitors in making the old- fashioned hemlock leather through the fact that the hemlock bark was a domestic product. If you will look up the census of the Gov- ernment you will find that there has been a falling off of about 20 per cent in the consumption of hemlock solo leather and an increase of about 25 to 30 per cent in the consumption of union and oak. In other words the America u tanner is losing his advantage over his foreign competitor. Mr. HILL. You do not get my point. The question I want answered is this: The ordinary sole leather, mostly in use, made here and mnde abroad from tanning extracts is that much higher in this country to-day, or is it higher in Europe than it is in this country? Mr. \ OGEL. I see your question; the answer is not as easy. Mr. HILL. It either must he higher or lower or the same. Mr. Krrrmx. Let him answer the question. Mr. "\ O(;F.!.. It must he approximately the same, otherwise you could not have this interchange of sole leather that is going on at the present time. SCHEDULE A. 191 PARAGRAPH 22 DYEING OR TANNING EXTRACTS. Mr. HILL. There are importations every day made by the hide and leather importers, are there not ? Mr. VOGEL. Yes, sir. Mr. KITCHIN. Is it not a fact that we are exporting sole leather in competition with all the world England, Germany, and France? Mr. VOGEL. Yes, sir. Mr. KITCHIN. And we are the biggest exporters of sole leather in the world, are we not ? Mr. VOGEL. Yes, sir. Mr. KITCHIN. And we import only about a million dollars' worth a year, and export from nine to twelve million dollars' worth a year; is not that a fact ? Mr. VOGEL. Yes, sir. Mr. KIT-CHIN. And we are making sole leather as cheaply and selling it here as cheaply as it is sold anywhere in the world, are we not ? Mr. VOGEL. No, sir. Mr. KITCHIN. And for this nine or ten million dollars' worth of leather we export yearly to foreign countries we are getting a higher price abroad than we are getting at home ? Mr. VOGEL. No, on an average about the same price. Mr. KITCHIN. So that this tariff on leather amounts to very little one way or another, does it not? Mr. VOGEL. It depends on what you call "little," of course. Mr. KITCHIN. That is the profit. But you are paying now three- quarters of a cent on your extract and still making it cheaper and selling it cheaper than any people in the world ? Mr. VOGEL. No, sir. Mr. KITCHIN. So, if you reduce your tariff on your extract here you could get along with free leather all right, could you not ? Mr. VOGEL. No, sijr; we could not. Mr. KITCHIN. You are now underselling the world in sole leather with a tariff on this stuff? Mr. VOGEL. I purposely called your attention to the important fact that since 1911 the imports into this country were very rapidly increasing, as shown by this table which I have submitted to you. Mr. LONGWORTH. They have trebled, have they not? Mr. VOGEL. Yes, sir; they have trebled in that time. Mr. KITCHIN. And your exports 'have grown very rapidly, too ? Mr. VOGEL. No, sir ; they have not grown in proportion. The CHAIRMAN. Gentlemen, we are being called away from the chemical schedule in this hide proposition. Mr. VOGEL. I was not prepared to argue this question to-day. Mr. PAYNE. I would like to know, in that connection, whether we are exporting sole leather in any quantity ? Mr. VOGEL. We are; yes, sir. Mr. PAYNE. Is not the most of the leather the fancy leathers* and of a higher grade of manufacture than sole leather ? Mr. VOGEL. We have always exported large quantities of glazed kid from this country. Mr. KITCHIN. The record shows we exported about $20,000,000 worth of glazed kid last year, and of sole leather over nine millions. Mr. PAYNE. Is it not a fact that of the higher grades of leather we make the best in the world ? 192 TABIFF HEARINGS. PARAGRAPH 22 DYEING OB TANNING EXTBACTS. Mr. VOGEL. We hope we do. Mr. PAYNE. We do; that is the reason we are exporting it. Why not have the whole truth ? Mr. KITCHIN. He has told too much about it now. Mr. JAMES. We do not want to give it all to you at once. [Laugh- ter.] Mr. LONGWORTH. Do you sell rough leather in Canada? Mr. VOGEL. We do not. Mr. LONGWORTH. Not at all ? Mr. VOGEL. Not to my knowledge is any rough leather being sold from this country to Canada. Mr. LONGWORTH. Do you sell sole leather in Canada ? Mr. VOGEL. No, sir; it is impossible to sell any sole leather in Canada. Mr. LOXGWORTH. Why ? Mr. VOGEL. Because they are evidently able to buy cheaper at home. Mr. LOXGWORTH. Do you sell abroad any leather cheaper than you sell at home ? Mr. VOGEL. No, sir; we do not. We never trade on that basis. Mr. LOXGWORTH. You sell abroad cheaper than you do at home? Mr. VOGEL. No, sir. The CHAIRMAN. I would like to get back to the chemical schedule Mr. Vogel, have you anything further? Mr. VOGEL. I 'have nothing further to say. I am very much obliged to you gentlemen for your attention. STATEMENT OF M. S. ORTH, REPRESENTING MARDEN, ORTH & HASTINGS, BOSTON, MASS., DEALERS IN TANNING EXTRACTS; AND THE BASIC EXTRACT CO., BASIC CITY, VA., MANUFAC- TURERS OF CHESTNUT EXTRACT. Mr. ORTH. Mr. Chairman, with reference to Schedule A, paragraph 22, 1 think that the tariff should be revised downward on materials where the present rates prohibit importation and also on materials used in American factories -raw materials in the sense that they are to be remamifactured. I think that logical American industries should be moderately pro- tected against cheaper foreign labor, and I believe in tariff for revenue. Changes proposed in the act of 1909: Paragraph 22, to read : Kxtrvts i if nutLralls ami of {Vivian berries. 1 cent per pound; extracts of quebracho, of chc.-tni I wood, and of oak wood, three-eights of 1 cent per pound; extracts of lieinlnck 1 .irk, of sumac, and extracts and decoctions of logwood and other dye woods, extract.- o barks and of woods oilier than dye woods, such as are commonly used for >i vegetable origin suitable for dyeing, coloring, FtainiiiL*. ' r tanninir. all the fnreiroiii'jr nm containing alcohol, not medicinal, and not specially provided for in this act or in the first, section of the act cited for amendment, onc-civhi h i if I cent per p' iinid. My reasons I'or the-e changes are: I he- rate-; of duty >pe. ilird in paragraph 22, Schedule A, act of 1909, arc practically prohibitive on all tanning extracts except que- bracho, preventing or greatly curtailing the importation of Joreign- made extracts of foreign-grown woods, barks, acorns, and nuts which do not grow in this country, but which are valuable to and greatly SCHEDULE A. 193 PARAGRAPH 22 DYEING OR TANNING EXTRACTS. needed by our tanners. A reduction of the rate of duties would greatly increase the importation of these foreign extracts and thereby provide great revenue and help conserve the hemlock and oak bark of of the United States. (2) Paragraph 22 is too complex in its specifications, causing un- necessary work for the collectors and appraisers. House bill 20182, paragraph 31, is much simpler. It would seem unnecessary for the collector or appraiser to have to determine whether an extract was made from the root or wood or bark or fruit of a tree. (3) These reduced duties would hurt no one in the United States, except one or possibly two quebracho extract manufacturers, located in Connecticut and New York, and their business is too illogical to endure. It requires three or four tons of quebracho wood to produce one ton of quebracho extract. This quebracho wood grows in the interior of South America and has to be transported to New York and Connecticut if it is to be made into extract by these two factories. The freight on a ton of wood from South America to New York is as much as it is on a ton of extract. This freight is about $3.50 to $4 per ton. Consequently these factories are handicapped to the extent of $7 to $12 a ton of extract compared with the factories in South America. In addition to this handicap the American labor is 50 to 100 per cent higher than the South American labor. Obviously, therefore, the business is an illegal one and it is not fair to the American tanner to make him pay a high duty (amounting to $547,850.24 in 1912) to protect these two American factories. These reduced duties would benefit many: First, the American tanning industry (comprising some 600 tanneries), than which industry there is none in the United States which requires such a large casn outlay, such a long process of manufacture, with as great risks of no profits and as little chance for a large profit. Second, the Govern- ment, by increased revenue. Third, the 20 or 30 chestnut extract manufacturers of the United States. They would be benefited by an increased consumption of and a greater demand for their chestnut extract. This increased consumption would be brought about by the fact that the greater the quantity of imported extracts that are used the greater the quantity of chestnut extracts used. One is not a substitute for the other, but together thev are substitutes for oak and hemlock barks. The best proof of this contention is the fact that the Canadian tanners, who have free extracts of all kinds, and cheaper barks than the United States tanners, use large quan- tities of chestnut extract from the United States, which costs them more than it costs our tanners because the freight rates are higher. They use these large quantities of chestnut extract in spite of the fact that their quebracho extract costs them three-fourths cent per pound less than it costs the American tanners and their other im- ported extracts cost them from 15 to 30 per cent less. This proves conclusively that the imported extracts are used with chestnut extract and that if we increase the use of imported extracts we will increase the use of chestnut extract proportionately. I have suggested three-eighths cent per pound on quebracho ex- tract instead of a lower rate, because I think that just as much would be imported at three-eighths cent as at a lower rate, and the revenue derived would be greater. 78959 VOL 113 13 194 TARIFF HEARINGS. PARAGRAPH 22 DYEING OR TANNING EXTRACTS. I have suggested three-eighths cent per pound on chestnut wood and oak wood extracts instead of a lower rate merely to protect the American chestnut extract manufacturers against a dumping of Italian and Saxonian chestnut and oak extracts onto this market at times of depression in those countries. Such a condition might never arise, but inasmuch as no chestnut extract is imported into this country under ordinary conditions, and inasmuch as the American chestnut extract industry is a worthy one and very beneficial to the mountain- ous sections of our Southern States, where its factories are located, I think it should be protected against such a possible condition. To show the necessity of these lower rates of duties, the apparent benefits to be derived from them by the American tanners, and the increased revenue they would furnish to the Government, I give below three tables. (1) The quantity and value of domestic barks consumed in the United States in the years 1900 and 1909 (the Department of Agri- culture informed me that no record has been kept since 1909) and the quantity and value of tanning extracts consumed in the United States in the years 1900 and 1909. (2) The quantity and duties collected thereon of tanning extracts imported into the United States during the year ending June 30, 1909 (the last year under the Dingley tariff) and the year ending June 30, 1912. (3) My estimate of the probable importations and revenues there- from under the duties proposed by me in this brief for the year ending June 30, 1915, compared with the importations and the revenue therefrom for the year ending June 30, 1912, under the Payne-Aldrich bill. TABLE 1. Tanning materials consumed in the United States. Kind. 1909 1900 Quantity. Cost. Quantity. Cost. RAW MATERIALS. Domestic: Hemlock bark Tons. 698,365 324.070 18,527 18,925 18,000 1,023 $6,434.848 3,533,862 65,152 514,169 534,727 42,992 Cords. 1,170,131 445,934 $7,747,242 3,174,995 Oak bark Chestnut wood Imported: Mangrove bark Myrobolans nuts All other Total 1,078,910 11,125,750 1,616,065 10,922,237 Domestic: EXTRACTS. Hemlock bark. . . Pounds. 10,862,540 276,436 3,613,344 703,805 Pounds. 6,406,000 150,914 Chestnut wood 184,307,498 Oak bark 36,930.861 27,115.500 550,065 Total 232,100,899 4,693,585 33,521,500 700,979 Imported or from imported material: Quebracho extract 147,109,443 1.401,008 1.101.303 2. 041, 001 1.0.84,171 350 535 5,877,989 43 566 10,180,000 292,133 Mangrove bark extract Myrobolan extract . . 37. 571 133, 765 43,757 16.167 18.022 14, 755 (Jambier extract .. (?) (?) Qurrmos extract Sumac extract (?) (?) Valonia extract 243.536 785,996 All other extracts Total 1 "1 716 993 6,185.572 10,180.000 292, 133 Total all extracts.. 386.817,892 10,879,157 43,701,500 993,112 SCHEDULE A. 195 PARAGRAPH 22 DYEING OR TANNING EXTRACTS. Compared with 1900, the quantity consumed in 1909 of domestic barks decreased 36 per cent. Compared with 1900, the quantity consumed in 1909 of domestic extracts increased 592 per cent. Compared with 1900, the quantity consumed in 1909 of imported extracts increased 1,420 per cent. This shows that imported extracts are absolutely necessary for the preservation of our tanning industry. TABLE 2. Duties collected on tanning extracts imported during years ending June SO, 1912, and June SO, 1909. 19 12 19 09 Quantity. Duties. Quantity. Duties. Quebracho extract: Less than 28 3.579.050 $17,895.25 Exceeding 28 . 70,660,665 529,954.99 99,108,284 $495,541.42 Logwood and other dyewood 2,463,422 15,396.39 3,463,582 30,306.36 All other wood extracts .. 82,226 513.91 5,006 31.29 All other bark extracts 2,439,966 21,349.70 4,339,596 37,971.45 Sumac extracts 1,389,733 8,685.83 1,232,530 7,705 21 All other vegetable origin 1,272,670 6,615.60 Total 81,887,732 600,411.67 109,517,412 571,555.73 SUMMARY. Quantity imported, 1912, 25 per cent less than in 1909; duties collected, 1912, 5 per cent greater than in 1909; quantity quebracho, 1912, 25 per cent less than in 1909; duties on quebracho, 1912, 10 per cent greater than in 1909; quantity other extracts, 1912, 26 per cent less than in 1909; duties on other extracts, 1912, 31 per cent less than in 1909; quebracho in 1912, 90.66 per cent of total quantity and 91.24 per cent of total duty collected; quebracho in 1909, 90.49 per cent of total quantity and 86.70 per cent of total duty collected. This proves that the higher rates charged under the Payne-Aldrich bill on tanning extracts prohibited the importation of some extracts and greatly restricted the importation of others. And, in the mean- time, the chestnut extract manufacturing business of the United States has been poorer than ever before a less active demand and with smaller profits. TABLE 3. Estimated importations for year ending June 15, 1915, of tanning extracts and revenue therefrom under rates proposed in this brief, compared with the importations and revenue for year ending June 30, 1912. Year June 30, 1915. Year June 30, 1912. Quantity. Duties. Quantity. Duties. Quebracho extract Pounds. 150,000,000 1,000,000 2,000,000 4,000,000 1,000,000 10,000 000 40,000,000 6,000,000 12,000,000 $562,500.00 3, 750. 00 2,500.00 5,000.00 1,250.00 12,500.00 50,000.00 7,500.00 15,000.00 Pounds. 74,239,715 $547,850.24 Chestnut and oak extract ... ... All other extracts, comprising Sumac extracts 1,389,733 2, 463, 423 8,685.83 15,396.39 Logwood and dvewood extracts Hemlock bark extracts Myrobolans extracts Mangrove cutch, extracts Valonea extracts All other 3, 794, 902 28, 479. 21 226,000,000 660,000.00 81,887,772 600,411.67 196 TARIFF HEARINGS. PARAGRAPH 22 DYEING OR TANNING EXTRACTS. This estimates an increase in importations of about 176 per cent for 1915 over 1912, which may seem too optimistic to you. But it is not too optimistic when you consider that the present rates of duty are practically prohibitive on all but quebracho extract, and restrictive on it, as shown by Table 2, where the quantity of extracts imported in 1912 are shown to be 25 per cent less than in 1909, although Table 1 shows that between the years 1900 and 1909 the quantity of im- ported extracts consumed increased 1,420 per cent and the quantity of domestic extracts consumed increased 592 per cent, while the quantity of domestic barks consumed decreased 36 per cent. This proves that imported extracts are an absolute necessity and that at a low rate of duty an enormous quantity would be imported (and thereby conserve our bark supply). This estimate also shows only 10 per cent increase in the revenue from duties over the year 1912, but it shows an increase of about 80 per cent more than your committee estimated would be the revenue under House bill 20182. (See H. Kept. No. 326, p. 35.) METHODS ANB EXPERIENCE RELIED UPON IN MAKING MY ESTIMATE. All the figures submitted of importation have been taken from Government documents. In addition to being a chestnut extract manufacturer, I am one of the largest dealers in other tanning extracts, imported and domes- tic, and in oils and greases used by the tanners. I meet the tanners constantly and study their business as well as mine and think I am competent to judge of the probable increase hi the importation of foreign extracts for this industry under lower duties. Besides, I am familiar with the foreign supplies of crude tanning materials. The tremendous quantities available in India, Borneo, Africa, and South America which could be sent here in the shape of concentrated extracts where they can not be profitably sent here as crude tanning materials on account of the high freight rates. In addition, a study of the tables above submitted to you shows the probable effect of a lower duty. These tables show that the quantity of imported extracts increased 1,420 per cent from 1900 to 1909; that the quantity decreased 25 per cent from 1909 to 1912 under the Payne- Aldrich bill, which raised the duty on quebracho extract 50 per cent. Furthermore, every one in the industry knows that our hemlock and oak bark supply is diminishing year by year, and that imported extracts, in increasing quantities, are essential for the tanning industry. To sum up There can be only two possible reasons why there should be any duty at all on imported tanning extracts. First. For revenue. Second. To protect the domestic chestnut extract manufacturers. [ have given you my best opinion as to how to obtain the greatest revenue three-eighths of a cent per pound on quebracho extract and on chestnut wood and oak wood extract and one-eighth of a cent per pound on all other tanning extracts. SCHEDULE A. 197 PARAGRAPH 22 DYEING OR TANNING EXTRACTS. I have also presented my argument why low duties and large importations of foreign extracts other than chestnut extract will help the domestic chestnut extract manufacturers. No doubt some of the chestnut extract manufacturers do not agree with me. In 1908 it was stated to this committee that 1904 was the last profitable year in the chestnut extract industry; that money had been lost every year thereafter to 1908; and that they would, have to go out of business unless the duties on foreign extracts were increased materially. I made extremely satisfactory profits in my extract plant during those years, 1905 to 1908, much greater profits than since the Payne- Aldrich bill increased the duty on quebracho extract 50 per cent. In fact the year 1912 was the poorest year we have ever had in the chestnut extract industry, and incidentally the quebracho extract importations in 1912 were the smallest for many years. I am convinced that high duties are a detriment to the chestnut extract industry, and, as a chestnut extract manufacturer, I want to see the duties on foreign extracts reduced to the lowest possible point compatible with a good return of revenue. JOHN CAMPBELL & CO., NEW YORK, N. Y., NATURAL AND ARTIFICIAL DYESTUFFS, EXTRACTS, AND CHEMICALS. NEW YORK, January 15, 1913. Hon. O. W. UNDERWOOD, CJiairman, Committee on Ways and Means, House of Representatives, Washington, D. C. DEAR SIR: Following the advice contained in your letter of Jan- uary 8, 1913, we are taking the liberty of bringing before the notice of the Committee on Ways and Means an item of the Chemical Schedule, which, if not already considered, we think should be sub- jected to the removal, or at least a reduction, of the import duty. We refer to logwood and hematine extracts, pastes and crystals, also fustic extract, of which we are importers, and upon which there is now a specific duty of seven-eighths cent per pound. Our reasons for requesting this revision are: In the first place, the products mentioned are in the nature of raw products used in the textile, leather, and other industries and as such should not be subjected to a duty charge, as this proves a heavy handicap on the manufacturers when attempting to compete with foreign manufacturers in the open markets of the world. Secondly, we consider, since a large majority of the trade, not only of this country but of the world, in these products, is in the hands of a holding company in the United States controlling factories in this country, France, Great Britain, and the West Indies; and able, we believe, by reason of their large purchases to more or less govern the price of the raw materials, logwood and fustic, from which these goods are manufactured, that no duty is necessary to protect the industry which is in such a strong position. The customs statistics show the importations of these products during the last year to be about 5,000 barrels, a very small proportion of the total consumption, and in view of the fact that the labor cost 198 TARIFF HEARINGS. PARAGRAPH 23 GELATIN, GLUE, ETC. of the manufacture is relatively small we feel that no injustice will be inflicted by the removal or considerable reduction of the duty and therefore respectfully request that our petition may receive such con- sideration as is its due. Yours very truly, JOHN CAMPBELL & Co. PARAGRAPH 23. Gelatin, glue, isinglass or fish glue, including agar-agar or Japanese isinglass, and all fish bladders and fish sounds other than crude or dried or salted for preservation only, valued at not above ten cents per pound; two and one-half cents per pound ; valued at above ten cents per pound and not above thirty-five cents per pound, twenty-five per centum ad valorem; valued above thirty-five cents per pound, fifteen cents per pound and twenty per centum ad valorem; gelatin in sheets, emulsions, and all manufactures of gelatin, or of which gelatin is the component material of chief value, not specially provided for in this section, thirty-five per centum ad valorem; glue size, twenty-five per centum ad valorem. GELATIN, GLUE, ETC. STATEMENT OF LOUIS S. BRIGHAM, REPRESENTING THE BRIG- HAM SHEET GELATIN CO. The CHAIRMAN. Give your name and address to the stenographer. Mr. BRIGHAM. Louis S. Brigham, Randolph, Vt. We filed a orief with the clerk, and I wish to make one change. The word "color- less" should be changed to "colored." The CHAIRMAN. We have allowed you 15 minutes. Mr. BRIGHAM. I represent the Brigham Sheet Gelatin Co., a com- pany that takes raw gelatin and converts it into sheets. These sheets are not used for edible or adhesive purposes. They do not enter into the cost of living in any way whatever. The business was started in 1876 and has grown slowly and steadily ever since. In 1896 we found that vast quantities of sheet gelatin were imported into New York City at a price that seriously crippled our business. Since then we have competed against German gelatin and the prices have been steadily driven downward. Last year we found that immense quan- tities of sheet gelatin were imported into New York and Baltimore at a price very much lower than ours. That naturally led to an inves- tigation. Comparing the prices of imported sheet gelatin with ours, it was almost impossible to see how sheet gelatin could be made and sold in this country, with all the transportation charges and the duty paid, at the prices paid by box makers, who used these sheets in vast quantities. Therefore we wish to have sheet gelatin classified in the tariff by itself, the same as gelatin bandeau, or gelatin artificial flowers. It has always been classified as a manufacture of gelatin and carries a duty of .'-55 per cent. Gelatin bandeau carries a duty of 60 per cent. Gelatin flowers carry a duty of 50 per cent. Last spring the duty on raw gelatin was raised 10 per cent more through a technicality, but that technicality was really 011 the word "sheet." I have a sample hero of what the technicality is or shows. That [indicating] is called a sheet of gelatin. So is that [indicating]. That carries 10 per cent more duty than gelatin in little pieces or Hakes. 1 ou can hardly see them in my hand [indicating]. As soon SCHEDULE A. 199 PARAGRAPH 23 GELATIN, GLUE, ETC. as this duty of 10 per cent was put on gelatin like that [indicating! the price of the product went up 10 per cent to me. But when I analyzed gelatin like that [indicating] for all its qualities, and made the price on it, I found that gelatin made in this country, which cor- responds to this foreign gelatin in every way, carried just about the same price. This is the gelatin whicn we make [indicating], and that [indicating] is what we call a sheet. You see it is very much different from anything like that [indicating]. Mr. KITCHIN. What is this used for? Mr. BRIGHAM. This particular sheet of gelatin, this grade, is used for wrapping candy boxes and for various antiseptic purposes. Tooth brushes ana toothpicks are inclosed in a little wrapper like that [indicating]; also high-grade cigars. Mr. JAMES. What is the tariff on that now? Mr. BRIGHAM. The tariff on this is 35 per cent. Mr. JAMES. What is it on that larger piece ? Mr. BRIGHAM. This piece [indicating piece of gelatin] ? Mr. JAMES. Yes. Mr. BRIGHAM. The tariff on that is 35 per cent. Mr. JAMES. And you say it was increased 10 per cent on a tech- nicality? Mr. BRIGHAM. On the word "sheet." I should call it a tech- nicality. Before, it carried a duty of 25 per cent. When that word "sheet" was introduced, then these two [indicating] carried the same duty. Mr. JAMES. What was the effect on the one that you hold in your right hand ? Mr. BRIGHAM. The effect on this one [indicating] ? Mr. JAMES. Yes; by the duty. Mr. BRIGHAM. They made me pay 10 per cent more for my raw stock. You understand, I use this product [indicating] and convert it into a product like that [indicating]. Mr. JAMES. You have no increased duty to pay on the finished product? Mr. BRIGHAM. No, sir; that remains still at 35 per cent. Mr. JAMES. What was the effect of the increased duty on the raw material which you have there? Mr. BRIGHAM. The increased duty on this [indicating a sheet of gelatin] ? Mr. JAMES. Yes. Mr. BRIGHAM. It makes me pay the importer 10 per cent more for it. It amounted to about three-fourths of 1 cent a pound. Mr. JAMES. It increases the price of that 10 per cent? Mr. BRIGHAM. Yes, sir. I have investigated the prices of labor up there in Vermont. My minimum wage, in my little industry, is $7.50 a week, paid to women. It is impossible for them to live on any less than that up there. The maximum wage paid to men in Germany I find from the consular reports is $4 a week. They work 10 hours a day, or 60 hours per week. My help works 9 hours a day. Mr. Dixox. Can you refer us to the consular report giving those figures ? Mr. BRIGHAM. Yes, sir; it is dated January 26, 1911. It is the report of Consul General Frank Dillingham, at Coburg, on technical 200 TARIFF HEABIKGS. PARAGRAPH 23 GELATIN, GLUE, ETC. articles. The wage to boys is from $2.14 to $2.86; to men it is $3.57 to $4. That is as near to gelatin as I could find. Even if it came in under the head of lithographic printing or something like that the wages are not higher. But that does not conflict with our business. Mr. HILL. Does your business require the hiring of skilled labor ? Mr. BBIQHAM. I should not call it skilled labor. I have some girls who become proficient in a month ; others I have to let go, sometimes. I keep them sometimes for six months, and then if they are not able to make $7.50 even if they work by the piece I let them go. I pay more wages than that when they become skilful by putting them on piecework. Mr. RAINEY. What effect has the increased tariff on these raw materials had upon the price at which you sell your finished manu- factured product ? Mr. BRIGHAM. It has not had any effect. I interviewed two large users of gelatin on the way down here and they said that the quality of American sheet gelatin is superior to any imported gelatin, but that our prices are prohibitive. That is the only reason we could get no orders. Mr. KAINET. Could you not lower your price ? Mr. BRIGHAM. We could not lower it to where the imported article is sold now. Mr. RAINEY. Have you changed the amount of wages paid your employees ? Mr. BRIGHAM. We have not changed the wages. Mr. RAINEY. It is just a question of profits, then, that you are presenting a question of the individual profits of your firm wnich are affected by this raise in the tariff on raw material ? Mr. BRIGHAM. The profits are affected and also the total income. I had to shut the factory down on the 21st day of December, the first time since I have been in it, which dates from May, 1890. I tell you, gentlemen, I did not like the looks of the faces of the women when I paid them. We live in a cold country and coal is $10 a ton, which is $2.80 more than it is in Burlington, 40 miles up the road. Wood is $8 a cord. When you turn women off in the middle of the winter up there for lack of work it is a serious thing. Mr. DIXON. Have you made a comparison of the efficiency of your labor with foreign labor ? Mr. BRIGHAM. I have made a careful study of it. Last Thursday I spent with an expert in Norwich, Conn., who has visited every for- eign factory making this article, and he says that my methods and the equipment of my factory are the simplest that he has seen anywhere. I think, comparing the methods and the location of the factory, that we can produce gelatin as cheaply as anybody can, barring the question of wages. will say that one factory, turning out this product in Cincinnati s now m the hands of a receiver. Their boast was on their letter- heads and circulars -that they made American sheets from American gelatin. Mr. R.AIXKY. Have you anv objection to stating what vour profits are? Mr. BuiGiiAM. What is that? SCHEDULE A. 201 PARAGRAPH 23 GELATIN, GLTJE, ETC. Mr. RAINEY. I say, have you any objection to stating what your profits are ? Mr. BRIGHAM. I will gladly state them in writing. Mr. RAINEY. What is that, please ? Mr. BRIGHAM. I will gladly state them in writing (on file). I would rather not state them orally. Mr. RAINEY. I understood you to say that you pay just the same wages to your laborers now as you did before the increase in the tariff on the raw material ; that you sell your manufactured products for exactly the same price as you did before the increase in the tariff on the raw materials, and; moreover, that the increase in the tariff on raw materials simply affected the amount of the dividends that you paid your stockholders. Now, I am asking you, and what I am anxious to know is, what your dividends are and how much they are affected, inasmuch as you are asking relief on that account and on that account alone. Mr. BRIGHAM. The relief I want is not to lose the business I have. Mr. HARRISON. Have you read this chemical schedule which was passed by the House of Representatives last year ? Mr. BRIGHAM. No, sir; I have not studied it. Mr. HARRISON. Have you read the paragraph dealing with gelatin, glue, glue size, etc. ? Mr. BRIGHAM. I have not. Mr. HARRISON. If you will read that, I think you will find that this proposed measure prevents the injustices which you describe and which were due, as I understand it, to the decision of the board of appraisers under the Payne law, by which gelatin in sheets, which was originally, no doubt, intended by the committee which framed the bill to cover only ornamental sheets that the finished product was interpreted to mean all gelatin that comes into the country, at least if it comes in in similar sheets to that. If you will read the bill, you will see that it corrects that injustice by reclassifying the gelatin. Mr. BRIGHAM. Do I understand that it would carry a duty like the duty on gelatin bando or flowers ? They carry specific duties of their own. The CHAIRMAN. I think you had better read the bill and if you have any further suggestions to make after you have studied that, we will be glad to have you put them in the record. Mr. HILL. What is the first sample sheet you showed ? It is con- strued as a manufacture of gelatin, is it not ? Mr. BRIGHAM. This first sample I intended to show you is not a manufacture of gelatin; it is gelatin. Mr. HILL. And the other is a manufacture of gelatin ? Mr. BRIGHAM. The thin sheet like that [indicatingl is the finished product, the manufacture of gelatin. Mr. HILL. Then under the language of this bill, the bill passed by the last session of Congress, the first article would come in accord- ing to its value and not as sheet gelatin, that is under the bill as prepared at the last session of Congress? Would not that relieve your difficulty? As a manufacture of gelatin, valued not above 10 cents a pound, 25 cents a pound, and above 25 cents a pound, where would that first sample come in valued not above 10 cents, or above 25 cents ? 202 TARIFF HEARINGS. PARAGRAPH 23 GELATIN, GLUE, ETC. Mr. BRIGHAM. Above 25 cents. Mr. HILL. Above 25 cents ? Mr. BRIGHAM. Yes, sir. Mr. HILL. Then it would bear a duty of 25 per cent ad valorem and the manufactures of gelatin would bear the same duty of 25 per cent ad valorem under the terms of this bill, so that your diffi- culty would not be relieved at all from what it is now ? Mr. BRIGHAM. I understand that it carried a duty of 35 per cent for sheet gelatin. . Mr. HILL. I mean under the proposed law as passed by the major- ity of the House at the last session. Mr. BRIGHAM. I am not informed on that. Mr. HILL. If your first sample is worth 25 cents a pound or more, the duty would be the same as on manufactures of gelatin. Mr. BRIGHAM. I think that is right. Mr. HILL. Your contention is that you are paying just as much duty on your raw material as you are on your manufactured product ? Mr. BRIGHAM. That is it exactly. It puts the foreign manufacturer and myself on exactly the same basis. He is protected by the duty and I am protected by the duty, and that throws us back on the labor question. Mr. HARRISON. Under which head of the list of imports would you place your raw materials under gelatin valued not above 10 cents a pound, or valued above 10 cents a pound and not above 25 cents a pound, or valued above 25 cents a pound? Mr. BRIGHAM. The higher value. We use about the best grade there is. Mr. HARRISON. What are the classes of gelatin that come in under the lower grades ? Have you any samples with you ? Mr. BRIGHAM. I have no samples, because the different grades of gelatin are the results of different parts of animal matter and may be for different purposes; they may bo for cheaper purposes. Mr. HARRISON. What proportion of the total cost of production of your finished product does your raw material bear? You realize that under the ad valorem rate there is not the same amount of duty upon the finished product as upon the raw material, even though there is the same ad valorem rate on both processes. Mr. BRIGHAM. On that grade sheet [indicating] a very thin sheet the percentage of raw stock entering into the total cost is about 30 per cent. The CHAIRMAN. Are there any further questions? Mr. LONG WORTH. Does 70 per cent represent the labor cost in the manufacture ? Mr. BRIGHAM. Xo, sir: the rest we divide into labor and overhead charges. Mr. JAMES. Where do your profits come in there? Mr. liuKMFAM. Where do the prolits enter? Mr. .!AM MS. If '.]() per cent is the cost of the raw material and 70 per cent is the lal>or and overhead charges, you leave your profits out entirely. Mr. BIUMIAM. I gave you the percentage of the factory cost of the article, and upon that we determine the selling price. SCHEDULE A. 203 PARAGRAPH 23 GELATIN, GLUE, ETC. Mr. JAMES. You are trying to get relief from those schedules in the Payne bill. You have not read the bill that was passed by the House last year and which failed in the Senate ? Mr. BRIGHAM. No, sir. Mr. JAMES. Your complaint is against the existing law? Mr. BRIGHAM. I was informed at the office that the sheets, or rather the manufactured product, and the raw stock carry the same duty. Mr. JAMES. It was not a scientific adjustment of the schedule rela- tive to your products ? Mr. BRIGHAM. I would like to have them classified the same as other articles are classified. Celluloid is an article almost identical with sheet gelatin. The city of Newark has been practically built up on the manufacture of celluloid. It also has a very high pro- tective duty and a tremendous industry has resulted one of the biggest industries of the world. We would like to have a righteous duty put on sheet gelatin, if possible, and I can agree not to raise our selling price if such a duty is put on. Mr. KITCHIN. What do you think the rate of duty should be to give you as much profit as you think the industry ought to have ? Mr. BRIGHAM. We had in our brief figures from 50 to 60 per cent on imported sheet gelatin. Mr. KITCHIN. It is now 35 per cent ? Mr. BRIGHAM. Yes, sir; it is now 35 per cent. The difference in the foreign labor and ours is 50 per cent, and I do not think that is very large. Mr. KITCHIN. Do you think an increase to 90 or 1 00 p'er cent from 35 per cent would be about fair ? Mr. BRIGHAM. I do not understand that. Mr. KITCHIN. You think that an increase to 90 or 100 per cent, or about double what it is now, would be the fair thing for this industry ? Mr. BRIGHAM. I think it would be fair; yes, sir. Mr. KITCHIN. And you think you would make a little more profit? Mr. BRIGHAM. Well, I have got to make a little more profit hi order to live now. Mr. KITCHIN. The consumer would not have to pay any more ? Mr. BRIGHAM. I can sell at the same price that we are selling now, but we would expect to do a great deal more business if the imported sheet were kept out of the country. Mr. KITCHIN. If you had that duty you think you could sell it much cheaper because you could sell more of it ? Mr. BRIGHAM. I can not tell how much cheaper. Mr. KITCHIN. And if there were any importations made you would have to sell it at a higher price ? Mr. BRIGHAM. We have competition here in this country. There are other factories. There is a larger factory than ours at Buffalo. The CHAIRMAN. I would like to state to the committee that as we have allowed this gentleman 15 minutes, the time consumed in ask- ing him questions will be taken out of the time of the committee and not out of his time. Mr. BRIGHAM. That is all I have to say. 204 TAEEBT KEABINGS. PABAGBAPH 23 GELATIN, GLUE, ETC. The brief of Brigham Sheet Gelatine Co. follows: As gelatin sheets, colored, clear, white, frosted or ground, figured or opaque, trimmed to standard sizes, made from ordinary crude gelatin or glue in sheet form, which is now taxed at 35 per cent ad valorem, should have more protection, because the gelatin sheets as above specified are a finished article made from the crude gelatin or glue; and as a finished article should be taxed at a higher rate of duty, viz, 50 or 60 per cent ad valorem. The following is a suggested change in phraseology: Gelatin sheets, a manufacture of gelatin, colored, clear, frosted or ground, figured or opaque, trimmed to standard sizes. We recommend that the paragraphs on gelatin as suggested above be made sepa- rate and not included with related articles as in paragraph 23. BRIQHAM SHEET GELATINE Co., Randolph, Vt. STATEMENT OF CHARLES DELANY, PHILADELPHIA, PA., PRES- IDENT NATIONAL ASSOCIATION OF GLUE AND GELATIN MANUFACTURERS. Mr. DELANY. In reference to paragraph 23 of Schedule A of the present tariff act we understand it to be the wish of your committee that the glue and gelatin manufacturing industry of the United States should make a brief presentation of what it considers to be the best interests of the people in this special matter, tKe needs of the Treasury, and the continued progress of the manufacturing of glue and gelatin in this country. Taking up these several matters in the order above given, it can truthfully be said that the glue consumers of the United States are now being as well served by their own manufacturers as are any other glue consumers in the industrial world. The United States glue makers have now attained to a standard of quality in what is needed in the way of permanence of adhesion required in this trying climate, that is not appreciated or needed in the greater part of Europe, as well as a diversity of product that is well adapted to the great variety of purposes for which glue is required, while the for- eign glue maker has concerned himself with the production of an article suitable to existing conditions in his own locality, and much more limited in its adaptability to general use in this country than the American product. The usi> of foreign-made glues has been chiefly for specific purposes and has shown a steady and regular growth in the operation of exist- ing tariff raters. As the actual cost of glue, as a component part of any article in which it is used, is so small as to make it a negligible quantity, a reduction in the rate of duty would be of no benefit to the ultimate consumer. Regarding the question of revenue, we conceive it to be the wish of your committee that this should be fixed at such point as will bring the most money to the United States Treasury without any burden to our consumers. A reference to the statistics compiled by the Department of Commerce and Labor will show that the present tariil rates have brought a steadily increasing revenue to the Treasury >, and in connection with this fact we respect- > the estimated revenue that would be produced operation the house of Pervilhac Silk Finishing, of Lvon, France, at a lower price than they sell the very same grado in the United States. in I. you includes the cost of transportation to the city of 1 recommend a change from 25 per cent to 15 per cent on SCHEDULE A. 221 PARAGRAPH 23 GELATIN, GLUE, ETC. the above-mentioned goods valued at above 10 cents and not above 35 cents, inasmuch as the domestic manufacturers can produce gela- tins of sufficiently good quality to eliminate the necessity of a 25 per cent protection. I take this from the fact that the Michigan Car- bon Co., of Detroit, Mich., now produces a gelatin for the manufac- ture of gelatin capsules, which they sell at about 38 cents per pound, which is superior for this purpose to French gelatins selling at about the same price in France. This is substantiated by the fact that in the past we sold enormous quantities to the capsule industry in this country, where now we sell very little, entirely due to the superiority and low price of the domestic manufactured article. I recommend a rate of 15 per cent instead of 15 cents per pound and 20 per cent on the above-mentioned articles valued above 35 cents, for the reason that this classification includes photographic gelatins, of which there are none made in this country, therefore no protection is needed. No. 2. This change will undoubtedly materially increase the im- portations, certainly sufficient to produce as much if not more revenue than the present rates. If this result is not arrived at, at any rate the consumers in this country will be materially benefited, because the competition which the importers will be enabled to give the domestic manufacturers would compel them to reduce their prices, and not ask the exorbitant profit they now ask. No. 3. I estimate the increase specified above from an experience of 18 years in the glue and gelatin importing business, during which I have seen a great decrease in the importations of a number of grades of foreign goods which would be recovered by reduced rates. No. 4. In paragraph 23 of Schedule A, the classification of gelatin in sheets, emulsions, etc., is ambiguous, inasmuch as raw gelatin is originally produced in sheets and should not be confounded in any way with that manufacture of gelatin known as " gelatin sheets"; there- fore, I would decidedly recommend that this classification be made more specific, at least in the elimination of the word "in." No. 5. I beg to suggest that inasmuch as glues, gelatins, etc., are susceptible to the absorption of moisture while crossing the ocean which increases their weight for which we are charged an additional duty under the present tariff, and as this increase in weight dries out after the goods have been in our warehouses for a short tune, this additional duty is a total loss, and the elimination of this additional duty on all increase in weight on glues and gelatins, etc., up to 1\ per cent, will be equitable. Respectfully, yours, W. E. MILLER. PROTEST OF BAUGH & SONS CO., OF PHILADELPHIA, AGAINST THE PROPOSED REVISION AND REDUCTION OF IMPORT DUTIES UPON GLUE. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C.: In the matter of proposed revision and amendment of Schedule A of the present tariff act so as to reduce the duties payable upon im- portations of gelatin, glue, glue size, and other kindred products, and 222 TARIFF HEARINGS. PARAGRAPH 23 GELATIN, GLTJE, ETC. so as to make, as suggested in House of Kepresentatives bill No. 20182, the tariff act read: Gelatin, glue, and glue size, valued not above ten cents per pound, one cent per pound; valued above ten cents per pound and not above twenty-five cents per pound, fifteen per centum ad valorem; valued above twenty-five cents per pound, twenty-five per centum ad valorem; manufactures of gelatin or manufactures of which gelatin is the component material of chief value, twenty-five per centum ad valorem; isinglass and prepared fish sounds, twenty-five per centum ad valorem. as shown by the report of the Committee on Ways and Means of the House of Representatives, page 75. Baugh & Sons Co. is a corporation of the State of Pennsylvania, and is a large manufacturer of glue and glue products, and has a great deal of capital invested in this industry. The company is not connected or affiliated in any manner whatsoever with any trust or combination. It is an absolutely independent concern, competing with any and all manufacturers of glue and glue products within the eastern markets where its business is conducted. The company has a considerable number of men employed in its plant and their average working day is 10 hours a day, and the wages paid the skilled men are SI 3. 50 per week and those paid the unskilled men, commonly called laborers, are at the rate of $10 per week. The tariff act as it stands to-day and which subjects glue to a duty of 2 cents a pound is barely sufficient to afford a reasonable protection to the American manufacturer, and a duty of 1 cent a pound would be totally insufficient. To reduce the duty to that amount would give an enormous advantage to the foreign manufacturer of glue and glue products, because a duty of 1 cent a pound would not begin to cover the difference in cost of production in America and in foreign coun- tries. From the best information obtainable and after an exhaustive examination into the conditions existing in America and foreign manu- factories, it can be conservatively stated that the difference to-day between the cost of manufacturing a pound of glue in America and in Europe is from 2.2 cents to 2.8 cents. Of course, a great deal of this difference in the cost of production is due to the low rate of wages paid in European countries compared with those paid in America, the European workingmen receiving wages at least 40 to 50 per cent below those paid in America, and in addition the cost of crude materials is much lower abroad than in this country. The average rate of duty on glue and gelatin under all tariff bills for the last 10 years or more has been considerably less than the aver- age rate of duty on other dutiable products imported into this country, and, therefore, there should not be a reduction in the duty which would hamper to a greater extent the efforts of the American manu- facturers of glue and gelatin products to compete with the foreign manufacturers. Even under the existing tarifT, importations of glue and gelatin products have increased during the past three years, and there has naturally been a corresponding increase in revenue, and this proves conclusively that the rates of duty fixed in the Payne-Aldrich bill do not prohibit importations, but on the contrary freely permit foreign manufacturers to sell their product in this country in competition with the American manufacturer. It is evident that a reduction in SCHEDULE A. 223 PARAGRAPH 23 GELATIN, GLUE, ETC. the rate of duty from 2 cents a pound to 1 cent per pound would give such a great advantage in this competition to the foreign manufac- turer as to render him the easy victor over the American manufacturer who has invested his capital in this country and gives employment to the citizens of this country and at higher rates of wages than those paid to the foreign workman. But any argument that a reduction in the duty on importations of glue and gelatin products, and especially glue, would result in a de- crease in the cost thereof to the consumer, and, therefore, a general saving to the public, is not entitled to any weight whatsoever. To reduce the duty on glue might well result, and no doubt would, in the flooding of the American market with foreign-made glue and even in the dismantling of the American plants, which could hardly hope to compete with the foreign product, but the only persons who would feel any advantage would be those who purchase glue or gelatin in large quantities, because the cost of glue, for example, as a component part of other products is relatively so small that it may be considered as a negligible quantity so far as affecting the cost of any article into the manufacture of wnich it enters is concerned. For instance, the glue which enters into the manufacture of a valuable piece of furniture may cost but a few cents, while a straw hat selling for several dollars requires no more glue than that of a value of about one-half a cent. Surely it can not and ought not to be said that the larger purchaser of glue, with protection under other clauses of the tariff act and who uses glue m the manufacture of his products, should be given further aid and protection by the Congress reducing the duties on glue to such an extent as to drive the American manufacturer out of the industry and enabling the larger purchaser of glue to obtain his supply at a price from the foreigner at which the American can not manufacture and vend it. The protestant here is not, as above stated, a member nor has it any connection with any trust or combination. Furthermore, from long experience and from an actual knowledge of the conditions existing in the industry, it can be stated positively that the manufac- ture and selling of glue and glue products is not controlled in this country by any trust or combination. It is true that some of the packing houses may he engaged hi the manufacture of glue from hides, but at least 65 per cent of the glue and gelatin produced in this country is made in manufactories that are entirely independent and not owned or controlled by any pack- ing house concerns or trust or combinations of any kind. To reduce the tariff would be ruinous to the American manufacturer of glue, but it would be a highly advantageous happening for the only Glue Trust in the world, a German-Austrian syndicate, which may now be said on good authority to control practically all of the glue factories of any consequence in Germany, Austria, Belgium, Italy, France, Russia, and other European countries a trust so powerful that it absolutely regulates the production for Europe by regulating the output of its factories and dominates and controls the selling price of glue and gelatin products throughout Europe. This gigantic trust, with an enormous capital and economical methods of conducting its large business, is so powerful that competition by the various inde- 224 TARIFF HEARINGS. PARAGRAPH 24^-GLYCERIN. pendent concerns in this country with it would be perfectly impos- sible, and the result would be that this trust would make this country a dumping ground for its surplus stock, and the American manufac- turer and his workmen wouloT be in the position of seeing themselves without a market for their joint product at a price which would make it reasonable for them to continue to carry on business. The competition between the American manufacturers of glue has for some years past and now is so keen and severe that the result has been to keep the margin of profit to the lowest possible minimum, and to-day it can positively be asserted that the approximate return on capital invested in "glue" is not over 8 per cent, and the great competition has resulted in keeping prices to a uniform and low level, and during the past three years glue is the only article in the list of animal products that has not advanced in price. The price of raw material, on the other hand, has greatly advanced, and the prices paid during the past year for raw materials were higher than any average for over 20 years, and approximately 10 per cent higher in America than in Europe. It is earnestly urged, therefore, that the duty upon importation of glue be not changed from those existing at the present time, for if the downward revision proposed should be made it will inevitably result in great harm not only to the man with his capital invested in the industry but also to the many American citizens engaged in the industry and earning their livings and the livelihood of their families therefrom. BAUGH & SONS Co. B. H. BREWSTER, Vice President. PHILADELPHIA, PA., January 8, 1913. PARAGRAPH 24. Glycerin, crude, not purified, one cent per pound; refined, three cents per pound. For crude glycerin, see also Italian Chamber of Commerce, page 108. GLYCERIN. BRIEF OF MARX & RAWOLLE, NEW YORK CITY, REGARDING DUTY ON REFINED GLYCERIN. NEW YORK, January 4, 1913. The COMMITTEE ON WAYS AND MEANS, House of Representatives. GENTLEMEN: Marx & Rawolle, of No. 100 William Street, Borough of Manhattan, city of New York, a corporation engaged in the manu- facture of refined glycerin, does hereby protest against the reduction of the rate of duty on refined glycerin as was proposed by H. R. 2, section 36, from 3 cents to 2 cents per pound, and against any change in the rate of duty on glycerin, whereby a 'difference in the rate of duty between the crude and the refined is less than 2 cents per pound. After a full consideration of the matter in the hearings had on tunil measures heretofore adopted it was conceded that the rate of duty on the refined article must exceed the rate on the crude in at SCHEDULE A. 225 PABAGBAPH 24r GLYCEBIN. least a difference of 2 cents as a fair and just margin to protect our home refiners. Under the Wilson bill that difference was maintained and the Dingley Tariff Act continued it, as has also the Payne Tariff Act, and we submit that no change has since occurred in the product itself nor in the difference between the cost of production at home and abroad to make necessary the proposed reduction of 1 cent per pound in the rate of duty on the refined article without any reduction ui the rate on the crude article. Believing the purpose of the proposed amendment to be a reduc- tion that will meet the exact line, if possible, of the difference in the cost of production at home and abroad and not to overthrow the pro- tection policy in force for so many years, and as a result of which the refining industry in this country was encouraged and made possible, we feel reasonably sure that a thorough consideration of the matter will show that this proposed reduction will be unjust and unfair to the refiner in this country. The bulk of crude glycerin imported contains only about 80 per cent anhydrous crude glycerin, the remaining 20 per cent consisting of salt, water, and impurities, and as the duty is imposed on the~ weight of the material as received, there is in effect a duty of 1.25 cents per pound on the crude article. Refined glycerin as made in Europe contains from 98 to 99 per cent actual glycerin, no salt, and only from 1 to 2 per cent water, so that in reality the only protection the refiner in this country will get if the proposed amendment goes into effect will be about three-quarters of a cent per pound, which is not a sufficient margin, because of the higher cost of labor in this country, to protect the home manufacturer in his own market against foreign competition. The cost of labor employed in this business is almost 50 per cent less in Europe than here, unskilled labor in Europe receiving from 10 to 14 cents per hour and skilled labor from 20 to 25 cents per hour, while in this country unskilled labor receives from 18 to 22i cents per hour and skilled labor from 30 to 35 cents per hour. The other elements of the cost of production are as low as the strictest attention and improvements in methods and machinery can make them. It is to enable the home manufacturer to continue the present rate of wages that a difference of at least 2 cents per pound between the rate of duty on the crude and refined article is demanded or otherwise the cost of labor will have to be reduced to enable the refiners here to meet foreign competition, because in a fair contest, all the condi- tions except the price of labor being equal, the producing country paying the highest wages can not successfully compete and must ultimately be defeated. A reference to the Canadian tariff will show the extent to which the difference in duty between the crude and refined article must go to protect the Canadian refiner against foreign competition. In Canada crude glycerin is admitted free of duty, while the refined glycerin, if imported from England and its colonies, must pay a duty of 15 per cent, and if imported from the United States and other countries a duty of 17i per cent. 78959 VOL 113 15 226 TARIFF HEAEINGS. PARAGRAPH 24r-GLYCERIN. The report of the House of Representatives on Schedule A, para- graph 36, page 77, shows that the duty at the rate of 1 cent per pound on the crude glycerin, based on estimates for a 12-month period under H. R. 20182, equals a duty of 9.26 per cent ad valorem, and at the rate of 2 cents per pound on the refined glycerin, based on esti- mates for like period, equals a duty of 9.75 per cent ad valorem, a difference of less than one-half of 1 per cent ad valorem between the rate on crude and refined glycerin. We do therefore protest against this proposed reduction of the rate of duty on refined glycerin as proposed by H. R. 20182, as manifestly unjust and unfair to the refiner at home in that it will not provide protection sufficient to enable the manufacture of refined glycerin at home to meet foreign competition on a fair and equitable basis. Respectfully submitted. MARX & RAWOLLE, By H. CALDER, Treasurer. BRIEF SUBMITTED BY HARSHAW FULLER & GOODWIN CO., CLEVELAND, OHIO. HARSHAW FULLER & GOODWIN Co., Cleveland, January 6, 1913. SIR: We respectfully request that no reduction be made in the duties on this article but that the paragraph be amended to read as follows : Glycerin, crude, not purified, 1 cent per pound; refined, 3 cents per pound; usual iron drums as containers, free. For the past 15 years we have operated a factory at Elyria, Ohio, in connection with our chemical works there, in which we have taken crude glycerin, imported from foreign countries, and by a process of refining nave converted it into refined or chemically pure glycerin. The operation of any factory within the United States where imported raw material is used, involves the transportation of that raw material from abroad to the point where the factory is located. This transportation charge is on the gross amount of such raw mate- rial, and any loss of such raw material in manufacture involves a freight expense which the imported manufactured goods does not bear. This loss in refining glycerin is approximately 20 per cent. There must also be considered the difference in manufacturing costs, including added cost of buildings, machinery, labor, and general expense of carry big on the business upon the plane of American life in contrast with that obtaining abroad. In carrying on the business in Elyria, Ohio, of converting crude glycerin into the high quality of refined glycerin required by the pure food and drugs law of the United States, a difference of at least 2 cents pci; pound between the duties on crude glycerin and refined glycerin is positively required, and even then the business is only moderately profit aide. During the year 1912 there were produced in our factory at Elyria and distributed throughout the United States approximately 5,000,000 pounds of refined glycerin. The gross profit on this business did not exceed 9 per cent, leaving a net profit, after deducting cost of labor, SCHEDULE A. 227 PARAGRAPH 25- INDIGO. fuel, plant depreciation, taxes, insurance, buying and selling expense, etc., of possibly 4 per cent. It can readily be seen that any change in duties, reducing the dif- ferential duties between the crude and refined products, would com- pel us to close our factory in this country and, if we desired to continue the business of manufacturing refined glycerin for distribution in this country, to build a factory abroad. Prior to the enactment of the tariff act of 1909 the iron drums used as containers for glycerin were admitted free, but since the enactment of this law the Treasury Department has collected a duty of 30 per cent, under paragraph 151 of Schedule C, which reads: Cylindrical or tubular tanks or vessels, for holding gas, liquids, or other material, whether full or empty, 30 per cent ad valorem." Under this ruling the importers of crude glycerin have been obliged to pay this duty, which is equivalent to approximately $1.75 per drum or one-quarter of a cent per pound on glycerin contents, and this is, in effect, an additional duty on glycerin, for in selling these drums the price real- ized was the same as American-made drums, resulting in a loss to the manufacturers of refined glycerin of approximately the amount of the duty. It is our contention that the framers of the law never intended to impose this duty on the regular drums used as containers of glycerin, but the Treasury Department have held otherwise under the above- named schedule. Respectfully, RALPH L. FULLER, Secretary. Hon. O. W. UNDERWOOD, Chairman Committee on Ways and Means, House of Representatives , Washington, D. C. PARAGBAPH 25. Indigo extracts or pastes, three-fourths of one cent per pound; indigo, cannined, ten cents per pound. INDIGO. STATEMENT OF E. C. KLIPSTEIN, ESQ., REPRESENTING A. KLIP- STEIN & CO., OF NEW YORK CITY. Mr. KLIPSTEIN. Mr. Chairman and gentlemen, I represent the firm of A. Klipstein & Co., of New York. We are importers, and conse- quently we have not come here to say that any of the things you have done or are going to do are going to ruin us. We have been up against it for the last 40 years on the tariff; they have all been against us. But what I do want to call to your attention is the necessity for clearness and precision in drawing the paragraphs of the tariff. In paragraph 38 of the proposed law, which refers to indigo and its products, this paragraph is exactly the same as the paragraph under the present law, the Payne law, and as that paragraph was under the Dingley law, except that it contained the word indigo" in addition to ' indigo paste" and "extracts of indigo." We are now importing some new products of indigo, new colors that are directly produced from indigo. We were importing these 228 TARIFF HEARINGS. PARAGRAPH 25 INDIGO. products under the Dingley bill, but we brought them in as indigo paste, at three quarters of a cent a pound. The present law contains exactly the same provision as the DingJey bill. It reads exactly the same way, but as the first importation came in under this law, the duty of 30 per cent was assessed on this stuff as an aniline color. We immediately protested, and the Board of General Appraisers decided hi our favor, that the duty should be three quarters of a cent a pound. The Government attorney appealed it to the customs court, and the customs court decided that the attorney had no case, and threw it out of court. The customs attorney then made up a new case, and brought it before the Board of General Appraisers. The first importation came in soon after the passage of the present law, and it is not out of the customhouse yet. We do not know to-day whether we are going to pay on the stuff that we have im- ported during the past two years three quarters of a cent a pound or whether we are going to pay 30 per cent as an aniline color. We can not make the price to the consumer what we think we ought to make, and it acts as a disadvantage to us, as compared with similar dyes that are brought in by other people that come under another list. Mr. HARRISON. All indigo that is imported now is artificial indigo, made out of coal tar ? Mr. KLIPSTEIN. There is very little of anything else. Mr. HARRISON. The indigo has been driven out of the market. Mr. KLIPSTEIN. In the past year, the last drop in price on that received from the Swiss was from 16 to 15. Mr. HARRISON. The law as proposed is: " Coal-tar dyes or colors not especially provided for * * * 25 per cent ad valorem." But indigo is especially provided for at 10 per cent. How could there be a question whether indigo was a coal-tar dye or color or an intermediate product ? Mr. KLIPSTEIN. This dye we are bringing in is not an indigo itself. It is a bromide of indigo; it is a direct derivative. Mr. HARRISON. Then it would be extract. Mr. KLIPSTEIN. Extract or paste. But that word "paste" is indefinite. What does it mean ? It used to mean sulphate of indigo, which is used very little now. Bromide of indigo has come Into large and important use, and it is necessary to make a distinction. What I propose is to treat indigo exactly the same as alizarine is treated. Alizarine is one of the fast dyestuffs, and so is indigo, They have always been handled in the tariffs since 1883 on the free list, for the benefit of cotton manufacturers. There is no reason why indigo should not be treated the same as alizarine. Paragraph No. 6 reads as follows: "Alizarine, natural or artificial, and dyes derived from alizarine or from anthracene." Indigo, in the natural condition, or as paste, and sulphate of indigo do not mean anything at all. Isatin corresponds to anthracene. I think the tariff should read "Indigo, or dyes derived from indigo or isatin." As I said, isatin corresponds to anthracene. You would be treating indigo as you treat alizarine, and you would remove the uncertainty. SCHEDULE A. 229 PARAGRAPH 25 INDIGO. Mr. HARRISON. How many of the coal-tar dyes or colors would that remove from the 25 per cent list and bring them down as a derivative of indigo ? Mr. KLIPSTEIN. It would not remove any. All the dyes that are there now would remain. But, as I say, this word "isatin" prac- tically corresponds to anthracene in regard to alizarin. I am not asking or opposing a duty on these dyes. If you put a duty on this class of dyestuff I do not believe it would make very much difference. Nobody would object very much, and you would get $180,000 revenue; you would get twice as much revenue from indigo as from anthracene, because there is about $1,200,000 from indigo and about $600,000 from anthracene, etc. As I have said, the word "paste" is very indefinite. You might just as well use "chocolate" or "ice cream." So much for that. That is all I have to say about that. There is another paragraph, No. 50, that covers alizarin oil, alizarin assistant. I have it here, and I will read the first three or four lines, to make myself intelligible : Alizarin assistant, sulphoricinoleic acid, and ricinoleic acid, and soaps containing castor oil, any of the foregoing in whatever form, and all other alizarin assistants and all soluble greases used in the process of softening, dyeing, or finishing, not specially provided for. And so forth. Alizarin assistant was put into the tariff in the McKinley bill. It was not even shown in 1883 what it was made of exactly. As a matter of fact alizarin assistant, the words used, used to apply as well to sulphonated castor oil used in dying alizarin, and sometimes a little olive oil was used. Mr. HARRISON. That is the turkey red dye ? Mr. KLIPSTEIN. Yes. There was a man in Moscow, named Miller Jacobs, that got a patent on it; it was bought, and there was a dis- pute. That is the reason why alizarin assistant is quoted always in the tariff here with castor oil. It was put in at the time of the Mc- Kinley bill on account of this dispute over the Miller Jacobs patent. As a matter of fact the use of sulphonated oilsJs one hundred times greater than it was in the days of the McKinley oill. Not only that, but they are sulphonating a great many other oils. In the last two or three years more particularly they have been sulphonating fish oils, cod oils, and using them in the leather business. The con- sumption in the leather business is more than the other consumption all together, and more important. What I wanted to point out was that under this tariff, which is practically the same as the one to-day, there is an English firm sul- phonating fish oil, cod oil, and Japanese seal oil, which pays no duty in England, sulphonating it, mixing it with mineral oil and some other cheap oils, shipping it to the United States and selling it as a "soluble grease fit only for leather dressing." Mr. LONGWORTH. What is the name of that firm ? Mr. KLIPSTEIN. The name is Livingston, but it is not going to be confined to Livingston. As soon as you say I can do it, I will be there. And I only want to point out here that, for the sake of 230 TABIFF HEABINGS. PARAGRAPH 35 INDIGO. clearness, you use the term, " sulphonated oils." It is not too long. It is not indefinite; it is a perfectly definite term. If you will simply say that sulphonated oil should pay this duty, that will give rise to no uncertainty, because it stops here with the word "finishing." I was in the trial myself before the Board of General Appraisers in New York when this man argued his case there, and all he claimed was it was not suitable for dyeing and finishing. Consequently they said that is not covered by this paragraph, and they let it in free of duty as a grease. If you would make these two paragraphs plain, it does not amount to very much. They ought to be plain. Being an importer I am running up against it all the time with the customhouse, and I would like to see these things cleared up. The CHAIRMAN. When we come to write the bill, we will give careful consideration to what you say. Mr. KLIPSTEIN. Thank you. Mr. NEEDHAM. How long have you been an importer? Mr. KLIPSTEIN. About 25 years. Mr. NEEDHAM. Is there an organization of importers.in New York City? Mr. KLIPSTEIN. Yes, sir. Mr. NEEDHAM. How long has it been in existence ? Mr. KLIPSTEIN. That I do not know about. I believe I belong to it myself, but I have never attended any of its meetings. Mr. NEEDHAM. Is it not organized for the purpose of promoting the interests of importers? Mr. KLIPSTEIN. That is what it is for, for protecting the importers. Mr. NEEDHAM. You do not know the objects of it other than that ? Mr. KLIPSTEIN. Its object is to promote the interests of the im- porters. Mr. NEEDHAM. And bring in as much foreign goods as possible ? Mr. KLIPSTEIN. That is not it at all. The importers ever since I have been coming down hero, and I have been before every tariff committee since the days of McKinlcy we have always been defend- ing ourselves against manufacturers that had to be protected. Mr. NEEDHAM. Who is the president of the association ? Mr. KLIPSTEIN. I do not know that. Mr. NEEDHAM. Has it a board of directors ? Mr. KLIPSTEIN. I suppose so. As I tell you, I have never at- tended a meeting of it. Mr. NEEDHAM. Can you give us that information ? Mr. KLIPSTEIN. I can get it for you if you want it. Mr. NEEDHAM. I would like to have that in the record, the name of the president, the other officers, its objects, and if it has a constitution and by-laws I would like to have that set out in full. Mr. KLIPSTEIN. The importers have had the whole force of the Government against them, just as it lias been in favor of manufac- turers, but still we have managed to exist. Mr. NEEDHAM. Will you kindly get that information for us? Mr. KLIPSTEJN. Yes, sir. SCHEDULE A. 231 PARAGRAPH 25 INDIGO. ALIZARIN AND DYES DERIVED PROM ALIZARIN OR ANTHRACENE. INDIGO INDIGO PASTES. From time immemorial the two "fastest" and best natural dyes were madder and indigo. The colors produced by these dyes were alike fast to washing and to light, and wherever the human race exists they have been preferred on that account to all other colors. For this reason when the development of the coal-tar dye industry began, the first problems attacked by the chemists were the synthetic production of madder and indigo. The first was solved nearly 40 years ago by the production of alizarin from anthracene, with the result of destroying the madder-raising industry of Europe. The second problem has only been solved within the past 10 years by the production of synthetic indigo from anilin or naphthalene. The result has been the utter extinction of the indigo-planting industry. In House bill 20182, passed by the House in 1912, paragraph 6 reads as follows: "Alizarin, natural or artificial, and dyes derived from alizarin or from anthracene, 10 per cent ad valorem." The imports and values of these dyes were stated as follows: 1905, 4,076,573 pounds, value $625,076; 1910, 3,605,854 pounds, value $647,948; 1911, 3,188,037 pounds, value $709,909. It follows, from these figures, that while the quantity of these dyestuffs decreased 25 per cent the value increased 13 per cent. These figures show that either the value or the character of the dyes grouped under this head had undergone a change, and the figures correspond with the commercial facts. Since 1905 the consumption of aliza- rine dyes, properly so called, has decreased; but an entirely new class 01 dyes, known as "fast vat dyes," of which indanthrene blue is a type, have come into use. These dyes are admitted free of duty, because they are derived from anthracene, and because they are new and patented dyes, the price is very much higher than the old alizarine dyes properly so called. That is why the value has increased while the quantity has declined. These new dyes are patented and chiefly sold by one German firm. They are termed "fast vat dyes" because they are very fast, like indigo, and are dyed in a vat like indigo, being in both these points different from all former dyestuffs. In the last few years this class of dyes has increased rapidly owing to the demand for "fastness" to light, washing, etc. In consequence, the whole invention ability of all the dye manufacturers in Europe has been devoted to their production. As a result there are to-day on the market many "fast vat dyes." Some of them are produced from anthracene, some from indigo or isatin. But in spite of their similarity in the prop- erty of fastness and of their mode of application by "vat" dyeing, only those derived from alizarine or anthracene are admitted duty free, while all the rest must pay 30 per cent duty. The House bill, 20182, proposes 10 per cent duty on dyes derived from alizarine. Whether such dyes pay 10 per cent or are made free of duty, the chief producer of them is one German company, who thus obtains an advantage over all other dye manufacturers who make their "fast vat dyes" from other products, such as indigo or isatin. All these dyes are coal-tar products and there is no reason whatever why they should not be classed with all other coal-tar dyes and be made to pay the same duty . But this paragraph is one of the curiosities of Amrican tariff legislation, because it demon- strates that for the past 30 years the Congress of the United States has been uncon- sciously passing tariff bills in the special interest of German manufacturers. The first appearance of the word alizarine was in the tariff act of 1883, in which the free list contained the paragraph ' ' Alizarine, natural or artificial . " At that time the Badische Aniline and Soda Fabrik claimed to have a United States patent for the production of alizarine from anthracene, and sold a 20 per cent alizarine in the United States at $1 to $1.25 a pound. A few years later this patent was declared invalid by the United States Supreme Court, other manufacturers were allowed to sell in this coun- try, and in consequence the price of alizarine dropped to 11 cents per pound, thus proving conclusively that the cost of a dyestuff is more dependent upon competition than upon the tariff. The next appearance of the word alizarine was in paragraph 478 of the act of October 1, 1890 the McKinley bill which read as follows: "Alizarine, natural or artificial, and dyes commercially known as alizarine yellow, alizarine orange, alizarine green, alizarine blue, alizarine brown, alizarine black." All of these dyes were special products of the same German company and not one of them was made from alizarine. In the Wilson Tariff Act passed August 27, 1894, the matter was made more general and therefore worse. Paragraph 368 of the free list of that act read: "Alizarine and OJ2 TAEIFP HEARINGS. PABAGRAPH 25 INDIGO. alizarine colors or dyes, natural or artificial." But this act, at least, put all manu- facturers of dyes on the same level. It was, however, indefinite and lead the foreign manufacturers to call every new dye invented an alizarine dye, and this indefiniteness was sought to be remedied in the Dingley tariff of July 24, 1897, where paragraph 469 of the free list reads: "Alizarin, natural or artificial, and dyes derived from alizarin or from anthracin." It will be plain from the foregoing that for the past 30 years a few German manu- facturers have been able to dictate an important paragraph of the United States tariff and to-day enjoy privileges not granted to other manufacturers of the same class of dyes. During the years that have passed since the tariff act of 1883 the manufacture of alizarin and on the dyes most directly derived from it has been monopolized by about three German firms and has become the most profitable branch of the dye business, because in consequence of this monopoly the price of alizarin 20 per cent has been advanced from 11 cents to 15 cents per pound. This advance of 40 per cent in price is 33 per cent more than the 30 per cent duty on other coal-tar dyes, and proves that the solicitude of the German dye makers for lower duties is not because they want the American consumer to have the benefit of low prices but because it will enable them to get higher prices and make larger profits. Since the tariff act of 1883 it has been the policy of Congress to put not only alizarin but indigo on the free list for the benefit or the textile industries, "When synthetic indigo replaced the natural product, this policy was continued. The existing tariff places indigo in paragraph 692 of the free list. In other words, indigo and alizarin have been treated alike and kept in the free list since 1883. On the other hand, dyes derived from alizarin or anthracene have been made free while dyes derived from indigo or isatin have been made dutiable, although they belong to the same class, both as to fastness and method of application. This should not be. All the new dyes derived from indigo or isatin are even faster than indigo itself, and they are dyed in a vat exactly the same as indigo. This is also true of the new dyes derived from alizarin, which are dyed not like alizarin, but like indigo. The new tariff should treat both these classes of fast dyes alike. If alizarin and dyes derived from anthracene and alizarin are free or taxed 10 per cent, or 20 per cent, then indigo and dyes derived from indigo or isatin should be treated exactly the same. To make one class free and tax the other or to impose one rate on one class and another rate on the other would be to discriminate unjustly in favor of special manufacturers, to the great inconvenience of the consumer, who must often use both classes at the same time to get his results. Since the manufacture of synthetic indigo and dyes derived from indigo and isatin was commenced the price of 100 per cent indigo has declined from the parity of $2 per pound to 75 cents per pound, thus permitting its greatly increased use and rendering it and its derivatives more important as dyestuffs than formerly, or even than alizarin. I am not arguing to have these two classes of dyes put in the free list, but if the necessity for revenue makes a tax advisable, both justice and com- mon sense require that the tax be the same on both. Respectfully submitted. E. 0. KLTPSTEIN. NEW YORK, January 6, 1913. INDIGO STATISTICS. The imports of indigo can not be compared by quantity becanse some of it contains 20 per cent, some 50 per cent, and some 100 per cent. The total value of indigo imported in 1900 was $1,446,490. The total value from Germany $319,329 (21.3 per cent), $1,127,161 (78.7 per cent). The total value imported in 1911 was $1,152,518. The total value from Germany $987,082 (85.6 per cent), $165,436 (14.4 per cent). The imports from Germany represent synthetic indigo and consequently the amount of synthetic indigo used as compared with the total consumption has gone up from .3 per rent in J900 to 85.6 per cent in 1911. Last year the manufacture of synthetic indigo was commended in Switzerland and the German convention at once dropped the price from 16-^ cents net per pound for 20 per cent paste to 15 cents net, a fan of about 9 per cnnt. Based on the imports for the year 1911, viz, indigo to the value of $1,152,518 and alizarin-anthracene dyes $650,000, a 10 percent duty on those two products would produce a revenue of $180,251 yearly. SCHEDULE A. 233 PARAGRAPH 25 INDIGO. ALIZARIN ASSISTANT CASTOR OIL. Hon. 0. W. UNDERWOOD, Chairman Ways and Means Committee: House bill 20182 in paragraph 50 makes the duty on castor oil 20 cents per gallon and on the sulphonated oil made from it, known as alizarin assistant, 15 per cent ad valo- rem. These are practically the rates of the Wilson bill, which made the duty on castor oil 35 cents per gallon and on alizarin assistant 30 per cent. The Wilson bill seriously injured the manufacturers of assistant and it is certain the rates now pro- posed would do the same, because the duty on the finished product is relatively lesa than on the raw material, castor oil. In this case three rates of duty must be con- sidered: First, the duty on castor beans; second, the duty on castor oil; third, the duty on alizarin assistant. The McKinley tariff in 1890 imposed the following rates: Castor beans, 50 cents per bushel; castor oil, 80 cents per gallon; alizarin assistant (containing 50 per cent of castor oil), 80 cents per gallon, less than 50 per cent, 40 cents per gallon; all other, 30 per cent ad valorem. The Wilson bill in 1894 reduced the duty on castor beans to 25 cents per bushel, on castor oil to 35 cents per gallon, and on alizarin assistant to 30 per cent. The Dingley Act of 1897 and the Payne bill both retained the low rates of the Wilson bill on castor beans (25 cents per bushel) and on castor oil (35 cents per gal- lon), but made the rates on alizarin assistant to correspond, viz, 30 cents per gallon when it contained over 50 per cent of castor oil, 15 cents per gallon when it con- tained less than 50 per cent castor oil, and 30 per cent ad valorem when made of other than castor oil. The makers of both castor oil and alzarin assistant have managed to exist com- fortably in spite of the tremendous reduction of duty in the Dingley and Payne bills as compared with the McKinley bills, because the duties on beans, oil, and alizarin assistant were justly proportioned. In view of this fact both the makers of castor oil and of alizarin assistant would be perfectly satisfied with a reduction of duty on their products if you will make a corresponding reduction in the duty on castor beans; and in that case you could not do better than to follow the relative rates of the present tariff and make the duties about as follows: Castor beans, 12 cents per bushel; castor oil, 20 cents per gallon; alizarin assistant, containing 50 per cent and over of castor oil, 17 cents per gallon, containing less than 50 per cent castor oil, 10 cents per gallon. If made from any other oil than castor oil, 20 per cent ad valorem. The consumption of sulphonated oils has increased very much in the past few years, and a great many other oils are being so treated besides the castor oil. This is notably true of fish oils, cod oils, etc., which when so treated are largely used by the leather industry. It is important, therefore, to specify clearly that all sulphonated oils must pay a duty say, 20 per cent as otherwise foreign manufacturers can evade the duty on oils by sulphonating them. As a matter of fact, at the present time an English manufacturer is sulphonating fish oil and shipping it in large quan- tities to this country free of duty as a "soluble grease fit only for leather dressing." This is a fraud on the revenue and should be rendered impossible in the new tariff. Respectfully submitted. E. C. KLIPSTEIN. NEW YORK, January 6, 1913. PARAGRAPH 26. Ink and ink powders, twenty-five per centum ad valorem. PARAGRAPH 27. Iodine, resublimed, twenty cents per pound. See Mallinckrodt Chemical Works et al., page 49. PARAGRAPH 28. lodoform, seventy-five cents per pound. See Mallinckrodt Chemical Works et al., page 49. PARAGRAPH 29. Licorice, extracts of, in paste, rolls, or other forms, two and one-half cents per pound. For licorice root, etc., see also Italian Chamber of Commerce, page 103. PARAGRAPH 30. Chicle, ten cents per pound. 234 TARIFF HEABINGS. PABAGBAPH 30 CHICLE. CHICLE. BEIEF OF THE ISAAC KUBIE CO., NEW YORK, IT. Y. NEW YORK, February 3, 1918. Hon. OSCAR W. UNDERWOOD, Chairman Committee on Ways and Means, House of Representatives, Washington, D. 0. SIR: We would like to call your attention to the rate of duty on chicle, which to-day is 10 cents a pound, and there is no other con- dition included in the paragraph which we believe is not just, for the following reasons : The American Chicle Co., Wm. Wrigley, jr., Co., the Sen-Sen Co. (Ltd.), etc., otherwise known as the trust, forward practically all the gum they receive in transit to Canada, where it is ground, cleaned and all tne moisture and foreign matter taken out, and is then reim- ported into the United States. This process, however, reduces the weight about 30 per cent, and naturally the Government loses the duty on said shrinkage, besides which the labor which would other- wise be performed by the residents of this country, and the greater number of people which would be employed. We do not know the exact number of smaller manufacturers of chicle chewing gum, but there are from 150 to 200 scattered all over this country that have not sufficient capital to enable them to do the same as the trust is doing, and therefore they are at a disadvantage and find it extremely difficult to compete with the trust. We would suggest, therefore, that in revising the tariff, paragraph 30, Schedule A, it read as follows: Chicle: Crude, in solid or liquid form, 10 cents per pound. Refined, cleaned, dried chicle, advanced in manufacture or in anywise prepared for making chewing gum, or similar purposes, 25 cents per pound; chewing gum prepared for sale without any further manufacture, 50 cents per pound. It is possible that the trust will be manufacturing the chicle in foreign countries and import it into this country unless some such step as we suggest herein is taken, and while the gist of our meaning is expressed above, \ve have not the slightest objection to your chang- ing the wording in such manner as to make the distinction between the various classes of chicle clearer, and the rate of duty on each respective class well defined and without liability of misinterpretation. Respectfully submitted. ISAAC KUBIE Co., ISAAC KUBIE, President. BEIEF OF AMERICAN CHICLE CO., NEW YORK, N. Y. NEW YORK, January 3, 1913. The WAYS AND MEANS COMMITTEE, JIouKt of Representatives, Washington. D. C. SIRS: We und"istand .hat section 37 of bill 20182, which passed the House of Representatives on February 20, 1912, will be included in the tariff bill your committee now has under consideration. As large gatherers, importers, and users of the article known as gum chicle, we respectfully request your attention to the following statement: SCHEDULE A. 235 PARAGRAPH 30 CHICLE. First. Gum chicle is the sap of the sapote tree and is found only in Mexico, Guatemala, and British Honduras, and is used in the United States solely in the manufacture of high-class chewing gums. Second. The gathering of gum chicle is attended by many diffi- culties and risks. The crop of chicle is determined by the rainfall. A drought in the early part of the year affects the output to a large extent, and may involve the gathers in heavy financial loss. If the rainfall be abnormally heavy, the roads become impassable for months, thereby increasing me cost of transportation. An added trouble will be seen in the disturbed political conditions of Mexico. Third. Gum chicle contains a large percentage of water, much of which must be extracted before it can be incorporated with the other ingredients hi the manufacture of chewing gum. During the past 12 years 29 per cent of water has been extracted from gum chicle used by us. Fourth. The present import duty on gum chicle is 10 cents per pound. The average invoiced price is 32 cents per pound, making a duty of over 31 per cent, but on the gum chicle actually usable and used, the duty amounts to 44 per cent. Fifth. Your committee will readily see that in the event of section 37 of bill No. 20182 becoming law, the duty on chicle actually used will be 88 per cent. Sixth. We contend that gum chicle is a raw material and as such should be admitted into the country duty free. Respectfully submitted. AMERICAN CHICLE Co., H. ROWLEY, Secretary and Treasurer. BRIEF OF WM. WRIGLEY, JR., CO., CHICAGO, ILL. CHICAGO, January 4, 191S. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives , Washington, D. C. DEAR SIR: Referring to bill H. R. 20182, which passed the House February 20, 1912, and which we understand will oe the basis of a new tariff bill to be introduced, we desire to protest against an item in section 37, raising the duty on chicle from 10 to 20 cents per pound, for the following reasons : First. There is not a pound of gum chicle, so far as we know, raised in the United States, and we have to depend entirely on Mexico, British Honduras, Guatemala, and other tropical countries for our supply. In order to obtain a large supply of gum chicle it is now necessary for us to advance the cost of hiring native help, buying mules, implements, etc., for sending them into the woods to tap the trees, and this advance is often made months before we use the chicle. There is more or less loss by contractors to whom the money is advanced failing to produce the chicle. There have also been advances in the duties to the Governments in the different countries. All of this tends to raise the price of chicle, and inasmuch as we are paying an extremely liberal duty on this article (10 cents per pound), we believe it would be unjust to raise this duty. 236 TARIFF HEARINGS. PARAGRAPH 31 EPSOM SALTS. Second. The chewing-gum business is very difficult to successfully conduct. This is proven by the fact that many thousands who have gone into this business have failed, and we believe the smaller chew- ing-gum manufacturers who are struggling to make enough to pay their help and a small profit can only continue by raising their prices. Third. Thousands of people are employed in the manufacture of chewing gum, and there are many more thousands employed in sell- ing same. There is a large class of people selling chewing gum on the streets in a retail way that are not able to do anything else, and perhaps supporting families by so doing, who would otherwise become a burden to the community. Hundreds of thousands of stores add a little to their profit by selling chewing gum, and inasmuch as raw material, labor, etc., have been steadily advancing, this bill, if it becomes a law, will add an additional burden, which can only be borne by raising the price of chewing gum. We respectfully ask that the above letter may receive your careful consideration, and that only a just and equitable duty be placed on gum chicle. Very truly, yours, WM. WRIGLEY JR. Co., A. G. Cox, Vice President. PAEAGRAPH 31. Magnesia and carbonate of, medicinal, three cents per pound; calcined, medicinal, seven cents per pound ; sulphate of, or Epsom salts, one-fifth of one cent per pound. For calcined medicinal magnesia, see also Mallinckrodt Chemical Works et al.; page 49; for Epson salts, see also W. H. Nichols, jr. page 37, and General Chemical Co., page 39. EPSOM SALTS. STATEMENT OF S. G. BOYKIN, REPRESENTING THE N. P. PRATT LABORATORY, ATLANTA, GA. Mr. S. G. BOYKIN. Mr. Chairman and gentlemen of the committee- Mr. LONGWORTH (interrupting). Mr. Chairman, I would like to suggest that each witness, if he can, state what paragraph he intends to speak on, and what his interest in it is. The CHAIRMAN. Yes; we will be glad to have you state what para- graph you intend to talk about. Mr. BOYKIN. Paragraph 31, Schedule A. The CHAIRMAN. And of what commodity are you a manufacturer? Mr. BOYKIN. Epsom salts. I am vice president of the N. P. Pratt Laboratory of Atlanta. I filed my brief with the clerk, and I just want to say that Epsom salts produced in the United States is simply a manufactured article, while the majority of Epsom is dug out of the ground and made from kaiserite. Therefore, we are unable to compete with those people, as ours is a purely manu- factured article. Epsom salts can be imported into the United States with the duty around 65 cents. Now, to reduce the duty on Epsom will not benefit the consumer. Why, you can buy for 5 cents all you can carry now and in 10-cent quantities you would have to get a cart to carry it away with you, so the consumer will not be benefited; it will be~the foreign manufac- SCHEDULE A. 237 PARAGBAPH 31 EPSOM SALTS. turer. This kaiserite is controlled by the general pdtash syndicate, and it will simply put us out of business if this duty is taken off. We are selling it now as cheaply as we can make it, and it will simply be a benefit to German manufacturers rather than to the consumer. We get for Epsom around 85 cents or 90 cents a hundred pounds at the factory, and it is sold to the consumer by the retail drug trade we sell to the wholesalers at anywhere from 10 to 40 cents a pound, so if the imported article comes in to a greater extent it will be the same thing. It will simply put us out of business. We can not com- pete with a 20-cent reduction or a 10-cent reduction on Epsom salts. We would simply have to abandon it. Now, in the past three years two Epsom factories have gone out of business on account of the low price of salts, and I certainly hope you gentlemen will see that the sarn^ duty remains on Epsom. I thank you for your attention, sirs. The CHAIRMAN. All right, sir. Mr. Boykin presented the following brief of the N. P. Pratt Lab- oratory, Atlanta, Ga., manufacturers of Epsom salts, protesting against a reduction of duty on Epsom salts : The COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. GENTLEMEN: The tariff act of 1909, page 4, line 34, reads: "Sulphate of magnesia or Epsom salts, one-fifth of 1 cent per pound." The proposed Underwood bill now reads, on page 11, line 22: "Sulphate of magnesia or Epsom salts, one-tenth of 1 cent per pound." We respectfully ask your honorable body to recommend to Congress the retention of the present rate of duty and not to make the reduction fixed in the proposed Under- wood bill for the following reasons: 1. Epsom salts produced in the United States is strictly a manufactured product, raw materials required being sulphuric acid and carbonate of magnesia, and, conse- quently, the cost of manufacturing is much greater than that of the German article which is mined in the crude state and only needs slight purification. 2. The proposed reduction in duty will not benefit the American consumer but the beneficiary will be a foreign monopoly. On these two points we beg to submit the following: EPSOM SALTS PRODUCED IN THE UNITED STATES IS STRICTLY A MANUFACTURED PRODUCT. Considering the high price of raw materials, no American manufacturer could manufacture Epsom salts solely. It is therefore, manufactured in connection with carbonic-acid gas from magnesite and sulphuric acid. Grecian magnesite is an imported article, upon which we pay a freight of $5.20 per ton from New York to our plant, in addition to the price per ton to New York, which varies from $7 to $8. While there is no duty on magnesite, it will be seen that the transportation charges are very high. To show the cost of manufacturing Epsom salts and the low prices received for same, in the past three years two carbonic acid plants have discontinued the manufacture of Epsom salts, due to the fact of the low selling price and the high cost of materials, even in the face of the present duty. THE PROPOSED REDUCTION IN DUTY WILL NOT BENEFIT THE AMERICAN CONSUMER, BUT THE BENEFICIARY WILL BE A FOREIGN MONOPOLY. To reduce the tariff from its present basis it will mean a reduction in the selling price of the American producer, and, considering the extremely high cost of producing Epsom salts now, it would mean the discontinuance of the manufacture of Epsom salts, thereby leaving the field in the United States entirely to a foreign monopoly. A reduction of 10 cents per 100 pounds in the wholesale price of Epsom salts will never be felt by the consumer, who pays from 15 cents to 40 cents per pound. 238 TARIFF HEABINGS. PARAGRAPH 31 EPSOM SAI/TS. CONCLUSION. As manufacturers of carbon dioxide, the process which we are now using will not be the most economical if the duty on Epsom salts is reduced. We have already been seriously considering the abandonment of same and substituting the method of manu- facture from the combustion of coke, and any curtailment of our present profits by rea- son of a reduction in the duty will certainly force us to take this step. Should we aban- don the manufacture of Epsom salts the whole southern territory will be surrendered to the foreign monopoly, for the reason that the ocean freights even now to western points are much lower than our railroad rates to the same places, and any manufacturers remaining in the East will not be able to supply this territory in competition to the N. P. PRATT LABORATORY, By S. G. BOYKIN, Vice President and Treasurer. STATEMENT OF J. G. SHOLES, ESQ., REPRESENTING THE OHIO CHEMICAL & MANUFACTURING CO. Mr. SHOLES. Mr. Chairman and gentlemen, I represent the Ohio Chemical & Manufacturing Co., of Cleveland. We are intensely inter- ested in Epsom salts, or sulphate of magnesia. The present tariff is one-fifth of 1 cent per pound, while the proposed tariff is one-tenth of 1 cent per pound. We believe that the present tariff is the best revenue getter, and is truly a competitive tariff. Dur- ing 1907 there were imported 4,1 13,000 pounds of Epsom salts, and four years later the importations were 8,000,000 pounds, almost double, showing the rapid increase. The domestic production during 1912, as near as we can figure it, was 16,000,000 pounds. Consequently one-third is imported, while two-thirds is produced. If the new traiff goes into effect it will be necessary to import double the quantity to obtain the same revenue. Of course, reducing the domestic production to one-third will practically stop domestic manu- facture. The imports come from the German Potasn Syndicate, who obtain Epsom salts as a by-product. They now ship it into this country at a very low price, from about 37 to 39 cents, and the duty, dockage, insurance, etc., brings it up to 61 or 67 cents. Those at a distance from the coast are able to manufacture and seh 1 it at a very small profit; but if the duty is reduced of course the importations will take its place. Epsom salts is manufactured from Grecian magnesite and sulphuric acid. Consequently the sulphuric-acid industry is to an extent inter- ested in the production of the Epsom salts; it assists in the production of it. During one-half of the year we use crude Grecian magnesite, which comes into the country free, and during the other half of the year we use calcined magnesite, which in the past has come in free, but the present schedule, I believe, proposes to put a tariff of $1 a ton on that. Consequently we are hit both going and coming. The amount of calcined magnesite imported during the fiscal year 1912 was 204,997,000 pounds, and the revenue from that would be 8102,000. Our consumption of calcined magnesite, although it means a great deal to us, is only a small part of that, and we feel we have no right to object to the proposed tariff for revenue purposes on the calcined magnesite; nevertheless it makes it pretty nard for us, and we hope that the duty of one-fifth of 1 cent per pound will be retained. SCHEDULE A. 239 PARAGRAPH 31 EPSOM SALTS. With the opening of the Panama Canal we will be able to get our crude magnesite from California, where there are the largest deposits of magnesite in the world, and it will develop mines there which are now inactive, I believe, on account of the very small production on the coast. Mr. HARRISON. Do I understand that for half the year you get your raw material crude ? Mr. SHOLES. Yes. Mr. HARRISON. And during the other half of the year it is calcined magnesite ? Mr. SHOLES. Yes. Mr. HARRISON. What benefit, if any, would your Epsom salts derive from our placing sulphuric acid on the free list ? Mr. SHOLES. None at all. Mr. HARRISON. Why is that ? Mr. SHOLES. Because we could not import sulphuric acid from any other country, I do not think, as cheaply as we could buy it at our door. Mr. HARRISON, Is that on account of tlie difficulties of trans- portation or because of the price ? Mr. SHOLES. On account of the difficulties of transportation, I would say. Mr. HILL. This business, as stated here in the brief, by a reduction of 10 cents a hundred pounds, will probably stop the manufacture of Epsom salts in the United States ? Mr. SHOLES. Yes, sir. Mr. HILL. That is, $2 a ton ? Mr. SHOLES. It can be very easily figured. It takes 1 pound of calcined magnesite and 3 pounds of sulphuric acid to produce 5 pounds of Epsom salts. Koughly the cost would be 2 cents at the present time, although actually slightly in excess of that. To be more accurate, the crude material only costs us in Cleveland 56 cents a hundred pounds. The imported can be purchased at 61 cents f . o. b. New York. Our 56 cents is without even a barrel. A barrel will raise the price on that 10 cents a hundred, making it 66 cents. Mr. HILL. There is not much labor involved in its manufacture ? Mr. SHOLES. About 5 cents a hundred. Consequently our figures of 73 cents, or 71 cents during 1911, is what it costs us. Mr. HILL. The entire labor of manufacturing would be $1 a ton at 5 cents a hundred ? Mr. SHOLES. Yes, sir. Mr. HILL. That is as much as the entire labor involved in the production ? Mr. SHOLES. Yes, sir; twice as much. Moreover, the price of labor should be added to the cost of crude material. Mr. HILL. It is not a question of the price of labor in this matter at all? Mr. SHOLES. No. Mr. HILL. It is simply a question of the turning of it over to the German Potash Syndicate, of which the Government is a part owner ? Mr. SHOLES. Yes. Mr. HARRISON. They do not manufacture Epsom salts. Mr. SHOLES. Yes, sir. 240 TABIFF HEARINGS. PARAGRAPH 31 EPSOM SAI/TS. Mr. HARRISON. It is a by-product ? Mr. SHOLES. The German Potash Syndicate obtains Epsom salts as a by-product, and if they import to such an extent that do- mestic manufacturers cease to manufacture I do not believe they will continue to sell it at a low price. They have not done it in other things. The present price of Epsom salts in Germany, France, and England to-day is equal to this country or above this country. Mr. HILL. You think they will absorb the reduction if it is made ? Mr. SHOLES. They will get the advantage of it, and perhaps the domestic manufacturers will go out of business. Then,' I believe, when we are unprepared to manufacture and give competition, they will raise the price. One thing more. I do not think the ultimate consumer will obtain any benefit of a reduction of one-tenth of 1 cent, inasmuch as the man who buys Epsom salts at a drug store pays 5 or 10 cents and obtains a package. It goes into certain preparations, such as mineral waters, and things like that, but the price of those will not be reduced. Mr. RAINEY. Do you think when the Panama Canal is opened you can get your raw material much cheaper? Mr. SHOLES. Not much cheaper; but it will be a higher grade of raw material, at probably about the same price. It will be the natural source for us to obtain our supply. We have been trying to do so for the past 5 or 10 years. Mr. RAINEY. You are now getting it from Germany, you say ? Mr. SHOLES. We are now getting the raw material from Greece. Mr. RAINEY. When the Panama Canal is opened up, and you get cheaper freight rates from California, you will not need any tariff? Mr. SHOLES. Not on the crude material. I do not think the raw material will bo decreased in price when the Panama Canal opens, but we will be able to obtain a higher grade of magnesite in probably a little more convenient way. At present it is very difficult to obtain magnesite, because we have to order sometimes six months in advance of our requirements. Mr. RAINEY. Then you will be able to make a better profit ? Mr. SHOLES. No: not a better profit. If crude magnesite comes from Greece and contains 48 per cent of magnesia, we get 48 per cent out of it. Mr. RAINEY. Then you will be able to make Epsom salts cheaper; is that it ? Mr. SHOLES. I do not think it will be any cheaper. Mr. RAINEY. What is the use of using this better stuff you are going to get from California ? Mr. SHOLES. It might he fractionally cheaper. It requires less labor in a way, and it probably would be somewhat cheaper. It is problematical. Mr. RAINEY. Is it a cheaper process of manufacture? Mr. SHOLES. No; it is simply a hotter grade. Mr. RAINEY. You say you can not make any better salts? Mr. SHOLES. No: because, we can only get 52 per cent of magnesia out of rock from California. In buying from Greece we get 48 per rent, or approximately those figures. Those figures may not be exact but they show the ratio, it depends upon what the price will SCHEDULE A. 241 PARAGBAPH 31 EPSOM SALTS. be and whether it will be lower or higher, to tell whether it will be cheaper or not. Mr. RAINEY. I do not see any use of using the California product at all, then, if you can not make it better or cheaper. Mr. SHOLES. We will be able to get it more regularly and more quickly, and perhaps a little cheaper, but we can not tell what the price will be. Mr. NEEDHAM. There is no duty on .magnesite ? Mr. SHOLES. There is no duty on the raw magnesite, but on calcined magnesite the duty proposed is $1 a ton, and that is what we use one-half of the year. Mr. NEEDHAM. Your hope is that by the completion of the Panama Canal you can obtain it cheaper ? Mr. SHOLES. We will be able to get the crude material from Cali- fornia, which we have been trying to get for a number of years. Mr. PAYNE. This article is sold in the drug stores, is it not ? Mr. SHOLES. Yes, sir. Mr. PAYNE. It is sold in small quantities to individual consumers ? Mr. SHOLES. Yes, sir. Mr. PAYNE. Three or four ounces as a usual thing? Mr. SHOLES. Yes, sir. Mr. PAYNE. What effect would it have on the price to the ultimate consumer if we did reduce this duty to one-tenth of 1 cent a pound ? Have you figured it out ? Mr. SHOLES. The ultimate consumer would undoubtedly get no benefit, but the wholesale druggist would. Mr. PAYNE. The 10 per cent would get lost before it got to him. Mr. HILL. I notice in your brief your last statement is: These facts are not presented to you at this time as an argument for protection, but to assist you in demonstrating the fact that the greatest amount of revenue can be received by allowing the present duty to stand. Mr. SHOLES. We believe it will produce a more equitable revenue to the Government. Mr. HILL. Is it your interest to give the Government a larger revenue in your particular industry ? Mr. SHOLES. No, not entirely. Each one of us is interested in what we are doing, and if we do not continue in manufacture, we do not believe the Government will get as large a revenue at one-tenth of 1 cent per pound as they do now at one-fifth of 1 cent per pound. Mr. HILL. As a matter of fact, in one case it is protection and in the other case it is not ? Mr. SHOLES. It is incidental protection. Mr. HILL. There is no such thing as incidental protection. Mr. SHOLES. It would undoubtedly reach this. Mr. HILL. In this case your argument is for protection to your industry ? Mr. LONGWORTH. I suggest you use an equivalent word. One gentleman did not like the sound of protection. Mr. SHOLES. I do not know anything else that would Mr. HILL (interposing). You do not like the word? Mr. SHOLES. I want protection, but I do not like the word. [Laughter.] TS959 VOL 113 -16 242 TARIFF HEARINGS. PABAGBAPH 31 EPSOM SALTS. Mr. HARRISON. What interests vour company most is the increased revenue the Government will get if we increase this tax, or is it the increased profits you will be able to contribute to your stockholders ? Mr. SHOLES. We want to continue to manufacture, and we do not believe the Government will receive any benefit by our going out of manufacture. By our ceasing to manufacture we believe the Gov- ernment will obtain a less revenue rather than a greater revenue eventually. Mr. JAMES. You stated that this reduction in the tariff would not make the article any cheaper to the consumer. Then how is your company affected if it would not affect the price to the consumer ? Mr. SHOLES. The ultimate consumer is the man who buys a small amount at the drug store at the price of 5 or 10 cents. It will affect the wholesale druggist. Mr. HILL. Is not this used for manufacturing purposes, to some extent, in the textiles ? Mr. SHOLES. Not so much. It is not used in the textiles to amount to anything; it is very little, as I understand it. That statement has been made, but I have not been able to verify it. It is used in the tanning industry. Mr. JAMES. So, then to take the tariff off will not cheapen the article and to increase the tariff will not raise the price ? Mr. SHOLES. I do not quite get that. Mr. JAMES. So the tariff does not affect it at all? Mr. SHOLES. Xot to the ultimate consumer. We believe the pres- ent tariff of 20 cents a hundred or one-fifth of 1 cent a pound is the best tariff, for the reason that it is a competitive one. We have to hustle, and we make very little money on it. Mr. RAIXEY. Do you know that the Government only collected $7,000 on Epsom salts? Mr. SHOLES. My figures for last year show they collected $16,000. Mr. RAIXEY. What is the difference between sulphate of magnesia and Epsom salts ? Mr. SHOLES. They are the same thing. Mr. RAIXEY. The figures that the Treasury Department give show that they got 7,000 out of it last year. Oil, yes; it is 816,000; you are right. But if we reduce this tariff we will bring; m more of it, will we not? Mr. SHOLES. You will bring in more of it. Mr. RAIXEY. Therefore we will got more revenue? Mr. SHOLKS. You will have to increase just double. In other words, you will have to bring in 16,000,000 pounds in order to get the present revenue of 816.000. Epsom salts amounts to very little to the Government. I should think that the calcined magnesite would be of greater interest. Mr. LOXGWOHTH. Do you or do you not think this, that generally in the chemical industry it would not only not be to the benefit but to the damage of the ultimate consumer in this country to drive any American chemical works out of business? Mr. SHOLES. 1 do. Mr. I.oNowotrnr. In other word... do you not think that the Ger- man manufacturers, if they were relieved of the competition here of SCHEDULE A. 243 PARAGRAPH 31 EPSOM SALTS. American manufacturers, instead of lowering the price would raise it eventually ? Mr. SHOLES. Yea, sir; that is what I have been saying. Mr. LONGWORTH. So the ultimate consumer would be at a disad- vantage ? Mr. SHOLES. Yes. Mr. LONGWORTH. Eventually wherever an American manufacturer is driven out of business ? Mr. JAMES. That would depend upon whether or not the American manufacturer were in a monopoly to raise the prices on the consumer, would it not ? Mr. SHOLES. If the tariff is competitive, I do not see how they can. Mr. JAMES. I know; but suppose the manufacturers of certain articles are in a monopoly and they raise the price and press the people behind the tariff wall, would you say the ultimate consumers were injured by driving them out of business and letting competition come in ? Mr. SHOLES. Of course, the ultimate consumer would be injured in that case. Mr. JAMES. That is what I thought. And your answer to Mr. Longworth's question must be corrected. Mr. SHOLES. I can only answer with regard to my own business. Mr. JAMES. You are answering as it relates to your business. Mr. SHOLES. As relating to our business, I have tried to say that if the Potash Syndicate imported Epsom salts to this country when American manufacturers have dismantled their plants, using them for other purposes that is, these departments I do not believe the Potash Syndicate will be philanthropic enough to continue the low prices. Mr. LONGWORTH. Exactly. Wherever you get a duty so low that it does not measure the difference between the cost of production here and abroad, then you drive the American industry out of business, do you not ? Mr. SHOLES. Yes; but I can only answer, Mr. Longworth, for the Ohio Chemical & Manufacturing Co. and on Epsom salts, because I am not familiar enough with other lines of business. Mr. LONGWORTH. Then, I ask you about your own. If the duty is placed below the difference of wtiat it costs you to produce and wnat it costs the syndicate in Germany to produce, or your competitor in Germany or anywhere else to produce, you can not continue in busi- ness? Mr. SHOLES. No, sir. Mr. LONGWORTH. That will then be a loss to the consumer, you having been a competitor and having been driven out of business. Will he benefit by that reduced tariff ? Mr. SHOLES. He will not. Mr. LONGWORTH. By the reduced price? Mr. SHOLES. I do not think he will, because the moment we cease to manufacture I believe the German Potash Syndicate would increase the price. Mr. LONGWORTH, Exactly; that is it. 244 TARIFF HEARINGS. PARAGRAPH 31 EPSOM SALTS. Mr. SHOLES. And that the ultimate consumer would not be really as well off as he is to-day with the competition which there is between Germany and America in producing this article and in selling it. Mr. LONGWORTH. And that is what protection is, without using the word? Mr. SHOLES. Yes, sir. Mr. RAINEY. Is there any understanding among the manufacturers who are protected by this chemical schedule that they will all come here and say that they want this tariff maintained at the old rate for the purpose of protecting the people of this country against German syndicates ? Mr. SHOLES. No, sir. Mr. RAINEY. Is it not singular that every one of them advance the same argument now for the reason of keeping the tariff up ? Mr. SHOLES. Of course that is the evident argument. Mr. RAINEY. How does it happen that these German syndicates do not drive out of business manufacturers who are manufacturing the same thing over in free-trade England, just a few miles from Ger- many, where they can ship their goods for nothing ? Mr. SHOLES. I believe they have an arrangement with England. I have heard it once or twice. I think it was in connection with the brief of the Victor Chemical Co., which they asked me to file for them. When I read the brief it said that they had information to the effect that in attempting to purchase Epsom salts from Germany there was some provision made that if it was resold to England there would be a penalty of 25 cents per 100 pounds. Mr. RAINEY. That is, according to your position, the German manufacturers of Epsom salts and I presume the same argument would apply to these other things are so solicitous of the English manufacturers that they do not want to interfere with their business, but they feel so antagonistic toward Americans that they would come over here and destroy their business and put up prices to the American consumers when they would not permit it to be done in England ? Mr. SHOLES. Xo; I think the price is already up in England. This is only a surmise from what I have always heard; but I believe the prices in England .are higher than they are in America on Epsom salts. Mr. RAIXEY. Do you think they have succeeded in driving out English manufacturers from Emgland ? Mr. SHOLES. Xo; I think there is some arrangement there, so that they use America as a dumping ground. Mr. RAINEY. Like all these other manufacturers, do you pay more wages to your laborers than they do in Germany? Mr. SHOLES. I do not know what the German scale is. I can only say it is extremely hard to get labor. In the last two years we have increased our wages about 33 per cent. Mr. IVAIXEY. Is it not a matter of surprise that almost all these American manufacturers claim they pay twice as much wages as they do in Germany (and I presume yon would claim that, too, if you inves- tigated iO; is it not a matter of surprise that German laborers do not come over here and get the benefit of the increased wages we pay? Mr. SHOLES. I think they do. Mr. RAIXEY. How manv? SCHEDULE A. 245 PARAGRAPH 31 EPSOM SALTS. Mr. SHOLES. I do not know. Mr. RAINEY. Is it not true that the influx of German laborers is comparatively small ? Mr. SHOLES. I have no idea. Mr. RAINEY. It used to be large when they came over here as agriculturists . Mr. SHOLES. I have no idea. I know that if we wanted to-day an excellent chemist, at a low price, we would probably go to Germany for him. Mr. HILL. Is it not a matter of fact that the competition of Ger- many and England has been so keen that the English have had to change their patent laws and compel the Germans to come over there ? Mr. SHOLES. I am sorry I can not answer your question. Mr. RAINEY. There is no patent on Epsom salts ? Mr. SHOLES. No, sir. Mr. HILL. I was not speaking of Epsom salts. I had in mind dye- stuffs and so on. Mr. Sholes presented the following brief, relative to sulphate of magnesia (Epsom salts), on behalf of the Ohio Chemical & Manufac- turing Co., Cleveland, Ohio: The COMMITTEE ON WAYS AND MEANS, House of Representatives, United States. GENTLEMEN: As manufacturers of sulphate of magnesia (Epsom salts) we desire to submit to you our recommendation, urging most strongly the retention of the present duty of one-fifth of 1 cent per pound. At the last session of Congress the chemical schedule as agreed upon by Congress provided for a rate of duty of one-tenth of 1 cent per pound. During the year ending June 30, 1907, the importation of Epsom salts amounted to 4,113,167 pounds, and under the present law the importations have increased until the amount reached a total of 8,012,228 pounds for the fiscal year of 1912, thus indi- cating that the rate of one-fifth of 1 cent per pound provides a competitive rate, which undoubtedly brings the maximum of revenue for the Government. The revenue to the Government for the fiscal year 1907, upon which the tariff of 1909 was based, was $8,226.33, and for the fiscal year 1912 was $16,034.44, showing a revenue increase of nearly 100 per cent. The domestic production of Epsom salts amounts to about 16,000,000 pounds per annum, which together with the importations of about 8,000,000 pounds indicates a yearly consumption of about 24,000,000 pounds. At the rate of duty imposed on the bill of the last session the importations would have to double in quantity in order to produce the same amount of revenue, and at the same time the production in this country would necessarily be curtailed in at least the corresponding degree. Epsom salts is made largely of magnesite and sulphuric acid. The magnesite is principally imported from Greece without duty, but your attention is directed to the fact that the chemical schedule of the last session provided a duty of $1 per ton upon magnesite when calcined. Sulphuric acid enters largely into the production under theprocess used by four of six producers of Epsom salts. The average cost of producing the article in 1911 by our company was 71 cents per 100 pounds, while our average selling price was 73 cents per 100 pounds. The importations to this country come principally from Germany and represent sales made by the Potash Syndicate. This syndicate obtains the article as a by- product, and they are able under some circumstances to sell same at a very low price. However, our information is that the price generally on Epsom salts in for- eign countries is as high or higher than in this country. Your committee has information relative to the manner in which the German Potash Syndicate is able to control the price of potash; and if the rate of duty to this country is lowered in the manner suggested, it would seem that the only bene- ficiary would be this oppressive monopoly. The duty as it now stands is purely competitive; does not allow an excessive protection to American industry. In our opinion the reduction of the duty to one-tenth of 1 cent per pound will practi- cally stop the manufacture of Epsom salts in the United States without any cor- 246 TABIFP HEARINGS. PARAGRAPH 31 EPSOM SALTS. responding benefit to the general revenues of the Government. A very large pro- portion of Epsom salts is sold in the drug stores throughout the country at prices ranging from 5 to 10 cents per pound. It is quite evident that the reduction of one- tenth of 1 cent per pound on the tariff duty will not affect the price of Epsom salts to this class of the ultimate consumers. They buy only a few ounces at a time, and the price to them would undoubtedly remain the same. Epsom salts also enters into some medicinal preparations; but the retail price of these could not possibly be reduced by reason of any reduction in the pnce of Epsom salts. We have already invested large sums in our endeavors to increase the production of this company and we believe that other manufacturers are also increasing their plants, for the reason that if Epsom salta is to be manufactured at all in this country under present conditions a greater volume of business must be done in order to pro- duce the necessary economies. The margin between the cost price and the selling price in 1911, which we consider a representative year in the business, was only 2 cents per 100 pounds. If the duty is reduced as proposed, and there is a cor- responding reduction in the selling price, we will be doing business at a loss and must necessarily go out of business of manufacturing the article. The experience which we expect under such circumstances must also be expected by all other manufacturers of Epsom salts in the United States. At the present time the raw product, magnesite, is, as stated above, imported from the Grecian Archipelago. There are large deposits of this mineral in the United States, notably in Santa Clara and Stanilaus Counties, Cal. In these places are found the largest known deposits in the world, but on account of the high rail freight rates, it has been found impossible to transport this raw product to the eastern part of the United States, where Epsom salts are manufactured. It is our opinion that with the opening of the Panama Canal all manufacturers will be able to obtain the California magnesite and so assist in bringing into use a material which is now mined only in small quan- tities, due to the fact that there is an insufficient consumption on the Pacific coast. Your attention is also called to the fact that sulphuric acid enters so very largely into the manufacture of the article, thus affording a market for another product of our manufacturers. In brief First. The present tariff of one-fifth of 1 cent per pound provides a competitive rate. Second. A reduction below present rate will not, except by entirely wiping out the industry in this country, provide a larger revenue to the Government. Third. The reduction of the tariff would result in benefit only to the German Potash Syndicate, an oppressive monopoly. Fourth. The destruction of American producers will result in loss of large amounts of capital with no corresponding benefit. Fifth. The small consumer could not possibly receive any benefit from the reduction on account of the manner of selling small quantities. These facts are not presented to you at this time as an argument for protection, but to assist you in demonstrating the fact that the greatest amount of revenue to the Gov- ernment can be received by allowing the present duty to stand. Respectfully submitted. THE OHIO CHEMICAL & MANUFACTURING Co., J. G. SHOLES, Secretary. JANUARY 4, 1913. BRIEF OF VICTOR CHEMICAL WORKS, CHICAGO, PROTESTING AGAINST A REDUCTION OF DUTY ON EPSOM SALTS. The COMMITTEE ON WAYS AXD MEAXS, House of Representatives, Washington, D. C. (inxTLEMEx: The tarill' act of 1909, page 4, line 34, reads: Sulphate of magnesia or Epsom salts, one-fifth of one cent per pound. The proposed Underwood hill now reads, on page 11, line 22: Sulphate of magnesia or Epsom salts, one-tenth of one cent per pound. \\e respectfully ask your honorable body to recommend to Con- gress the retention of the present rate of duty and not to make the reduction lixed in the proposed Underwood bill for the following reasons: SCHEDULE A. 247 PARAGRAPH 31 EPSOM SALTS. 1.' The reduction proposed will not result in an increase of revenue to the Government, but rather a decrease. 2. The proposed reduction will not benefit the American consumer, but the direct beneficiary of it will be a foreign monopoly. 3. The committee's decision fixing the proposed reduction is based on erroneous information. On these three points we beg to submit the following: REDUCTION PROPOSED WILL NOT RESULT IN AN INCREASE OF REVENUE TO THE GOVERNMENT, BUT RATHER A DECREASE. Attached to this brief will be found statistics on the importations of Epsom salts taken from the Foreign Commerce and Navigation of the United States, published by the Department of Commerce and Labor, Bureau of Statistics. It will be noted that at the present rate of duty there were imported into the United States in the year ending June 30, 1907, 4,113,167 pounds of Epsom salts. Importations from then on (excepting during 1908, when they were 3,631,245 pounds) increased until they reached 8,012,226 pounds in 1912. It will be readily recognized, therefore, that the import business in Epsom salts has grown tremendously with the present rate of duty. A careful estimate of the domestic production of Epsom salts places the total output of the five or six manufacturers in this country at about 15,000,000 pounds per annum. If the duty is reduced, it will mean that 16,000,000 pounds per annum of Epsom salts will have to be brought into this country to insure to the Government the same amount of revenue which it is collecting under the present tariff on 8,000,000 pounds. It would mean that to obtain the same revenue the imports would have to be doubled, the domestic production cut one-half. Since American manufacturers have capital invested in plant and other assets of value, it is fair to assume that for a while at least they will run their factories at a loss, rather than dismantle them, so that Congress can not expect to increase the tariff revenue for some years to come by a lowering of the duty on Epsom salts. As we have shown above, if all the Epsom salts consumed were imported, the duty under the proposed reduced tariff rate of one- tenth of 1 cent per pound on 23,000,000 pounds would yield a total revenue of $23,000. The Government now is collecting one- fifth of 1 cent per pound on 8,000,000,000 pounds imported under the present tariff rate of one-fifth cent per pound, or $16,000. There- fore, as a revenue producer, the proposed decrease in duty on Epsom salts could, at the very most, yield only $7,000 per annum more than is now collected, and that only after the American factories had all been closed and had ceased to produce. We respectfully submit to your honorable committee that this increase in revenue is not worth while if it carries with it a total destruction of an industry employing American capital and American labor. 248 TARIFF HEARINGS. PARAGRAPH 31 EPSOM SALTS. THE PROPOSED REDUCTION WILL NOT BENEFIT THE AMERICAN CON- SUMER, BUT THE DIRECT BENEFICIARY OF IT WILL BE A FOREIGN MONOPOLY. Practical!} 7 " all the Epsom salts which is manufactured in this country is produced from magnesite. Magnesite is a mineral which is imported into this country from Greece. Austria, and other European countries. The Epsom salts which is imported is made in Germany and is produced from kieserite. Kieserite is one of the minerals found in the potash mines of Ger- many, and its production and sale is under the control of the German Potash Syndicate. The subsidiary companies of this syndicate manufacture Epsom salts and kieserite. and it is this which is imported into this country. Kieserite is a crude, impure Epsom salts, and all that is necessary is to refine it in order to produce the Epsom salts of commerce. To produce Epsom salts from magnesite in this country, the magnesite must undergo expensive chemical processes and we are free to admit that the production of Epsom salts from magnesite is more expensive than is the production of Epsom salts from kieserite. It is true that both magnesite and kieserite, under the present tariff, enter the country free of duty, but since kieserite is controlled by the German monopoly, which also makes Epsom salts, it is self-evident that kieserite is available to the manufacturers in this country only on such conditions as the German monopoly, in active competition on the finished material, sees fit to impose. The average market price for Epsom salts in barrels, car lots, in this country, is somewhere around 90 cents per 100 pounds, f. o. b. works. We are advised, and we have every reason to believe that it is true, that the prices governing in Germany and England are con- siderably higher. In fact, a quotation which we had some time ago from Germany and which named a low price on Epsom salts, was made with the provision that the product was for delivery and sale in the United States, that if it were sold in the United Kingdom, a penalty of 1 per ton would be exacted. 1 per ton is approxi- mately 25 cents per 100 pounds. Your honorable committee will agree, therefore, that the assump- tion is fair that if the proposed change of disty carries with it a destruction of the American manufacturing industry, it will cer- tainly not mean a lower cost to the consumer. As soon as the domestic competition is snuffed out, we can rely on the foreigner placing a higher price on his product than is now in effect under the present system of competition and the consumer, instead of paying less, will pay more for his product. We respectfully submit that it would be strange indeed if Congress in these days, where so much legislative effort is exerted toward the rectification of evils due to combinations and trusts, should wipe out of existence an American industry which is on a strictly com- petitive basis, in order to hand the business over to a foreign monopoly over which Congress \has no control, and the selfishness and power of which has made itself so strongly felt in the potash controversy. SCHEDULE A. 249 PARAGRAPH 31 EPSOM SALTS. That the very existence of this American manufacturing industry is immediately threatened by a reduction of the tariff, is perhaps best emphasized by this statement of fact: Two years ago the then largest producers of Epsom salts, viz: the Liquid Carbonic Co., of Pittsburgh, Pa., found it unprofitable to continue even at the present tariff rate, the manufacture of Epsom salts. It discontinued that portion of its business entirely, disman- tled its plant, and sold its machinery. We leave it to the imagination of the members of your honorable committee as to the effect a still lower rate of duty will have on what remains of the industry. THE COMMITTEE'S DECISION FIXING THE PROPOSED REDUCTION is BASED ON ERRONEOUS INFORMATION. Report 326, which is the report on Schedule A, submitted to Con- gress by the Committee on Ways and Means, states on page 88 the consumption in this country of Epsom salts during 1905 as 30,677,838 pounds and the consumption for 1910 as 47,785,000 pounds. On page 328 the consumption of Epsom salts for 1904 is given as 15,935,837 pounds. According to these figures it would appear that the consumption of Epsom salts doubled in 1905 over what it was during 1904. No such increase hi the consumption took place. As a matter of fact, the figure of actual consumption of Epsom salts, given by us as 23,000,000 pounds per annum during the year ending June 30, 1912, is a conservative estimate and based on a thorough knowledge of the business and is, we believe, as near accurate as can be had. When it is considered, therefore, that the importations of Epsom salts of 8,000,000 pounds during the year ending June 30, 1912, represent fully one-third of the total consumption in this country and tnat the importations are increasing at the present rate of duty, we believe that your honorable committee will agree that the foreign producer is already in the position to control the Epsom-salts business in this country and a reduction in duty will simply strengthen the foreigner's hold on the business, without any advantage to the American con- sumer, the American Government, nor the American manufacturer. Further, on page 229 of the same report, a statement is made that Epsom salts is used in the industry in dye and print works for making carbonate of magnesia, and the argument has been made that Epsom salts, being an important raw material hi the dye and print industry, the duty should be reduced. As a matter of fact, the quantity of Epsom salts used in the dye and print industry is negligible. In our opinion it amounts to less than 50,000 pounds per annum. The prin- cipal use of Epsom salts is for pharmaceutical purposes. CONCLUSION. We are convinced that the American Epsom salts industry will not be able to maintain itself for very long even at the present rate of duty, but believing that the principle 01 protection is not one that is being considered in framing tariff schedules at this time, we refrain from suggesting the wisdom of increasing the tariff rate on Epsom salts to protect the industry. 250 TABIFF HEARINGS. PARAGRAPH 31 EPSOM SALTS. We believe, however, that on the facts as shown not even the most strenuous advocate of free trade will be in favor of a reduction of the duty on Epsom salts, and we respectfully but earnestly petition your honorable committee that the present rate of one-filth cent per pound be maintained. VICTOR CHEMICAL WORKS, By AUGUST KOCHS, General Manager. CHICAGO, January 2, 1918. Imports entered for consumption, Epsom salts. [Commerce and navigation of the United States Department of Commerce and Labor, Bureau of Statistics.] Quantity. Value. Duties Value per unit quan- tity. Actual and com- puted ad valorem rate. Year ending June 30 1907 Pounds. 4, 113, 167 $16,072 $8,226.33 $0.004 Per cent. 51.18 1908 3,631,245 12,094 7, 262. 47 .003 60.05 1909 8,053,235 26,138 16, 106. 45 .003 61.62 1910 6,147,159 27,330 12,294.32 .004 44.98 1911 6, 204, 219 23,092 12,408.42 .004 53.73 1912 8, 012, 226 31,332 16,024.44 BRIEF OF MECHLING BEOS. MANUFACTURING CO., CAMDEN, N. J., RELATIVE TO EPSOM SALTS. CAMDEN, N. J., January 4, 1913. The COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. GENTLEMEN: We submit to your honorable committee the follow- ing reasons against a reduction in the present rate of duty on Epsom salts. A reduction in the duty will not in any way change the price to the consumers at large. It will probably increase importations and thereby reduce the amount of products manufactured in the United States. A reduction in the tariff can not possibly change the price to the ultimate consumer, as the public at large buys Epsom salts in minute quantities. A reduction in the tariff would not affect the retail prices. We further protest on the ground that a reduction of the tariff on a low-priced article is manifestly unfair to manufacturers located on the Atlantic coast, as it opens competition from abroad, which they alone feel. The interior points are not affected because the imported goods can not come into their territory on account of the freight rate from the seacoast. The object of a reduction in the tariff is therefore defeated, inas- much as prices are not reduced excepting along the Atlantic coast. Trusting that your committee will give the foregoing their consid- eration, wo beg to remain, Very truly, yours, MECHLING BROS. MANUFACTURING Co. BEXJ. S. MECHLING, Secretary. SCHEDULE A. 251 PARAGRAPH 32 ALIZARIN ASSISTANT. PARAGRAPH 32. Alizarin assistant, sulpho-ricinoleic acid, and ricinoleic acid, and soaps con- taining castor oil, any of the foregoing in whatever form, in the manufacture of which fifty per centum or more of castor oil is used, thirty cents per gallon; in the manufacture of which less than fifty per centum of castor oil is used, fifteen cents per gallon; all other alizarin assistants and all soluble greases used in processes of softening, dyeing, or finishing, not specially provided for in this section, thirty per centum ad valorem. For alizarin assistant, see E. C. Klipstein, page 229; T. S. Todd & Co., page 252; Bosson & Lane, page 254. ALIZARIN ASSISTANT. BRIEF OF BAKER CASTOR OIL CO., NEW YORK CITY, RESPECT- ING ALIZARIN ASSISTANT OR SOLUBLE OIL. The WAYS AND MEANS COMMITTEE, Washington, D. C. Under the Dingley bill the provision with respect to alizarin assist- ant has been subject to criticism, and several cases have been carried to the courts. It is therefore important that the reading of this pro- vision should be so arranged as to eliminate dispute and litigation, and also be so broad as to prevent the real intent of the act from being avoided. We are not manufacturers of alizarin assistant, but sell castor oil to those makers of alizarin assistant who do not manufacture their own castor oil. Many foreign manufacturers of alizarin assistant have branch houses in this country and import this oil in quite large Quantities, as you will see from the records of imports. Consequently it can not be claimed that 30 cents per gallon protection on this article is prohibitive. Alizarin assistant usually consists of castor oil treated with sul- phuric acid, etc., and is used as a mordant, and has been variously known under the names of alizarin assistant, soluble oil, Turkey red oil, oleate of soda, padding liquor, etc.; various importers bring it under various names in order to endeavor to pass it through the cus- tomhouse at a lower rate of duty than the Government exacts. It is made of varying strengths, the strength usually used by the consumer being what is called 50 per cent, that being the percentage of castor oil used in the mixture. It is possible, however, to have almost the entire mass of this article consist of what was originally pure castor oil, in which shape it can be and has been imported into this country, and afterwards, by the addition of water, can readily be reduced to the required strength. Alizarin assistant has the property of holding castor oil in solution, just as water would hold sugar in solution, and the castor oil could be thus mechanically mixed with it, imported into this country, and afterwards recovered from the mixture as castor oil by a very simple process. Referring to H. R. 20182, this bill made a reduction of duty on alizarin assistant to 15 per cent ad valorem, regardless of the per cent of castor oil in the assistant, and reduced castor oil to 20 cents per gallon. To illustrate the gross injustice of a duty of 15 per cent ad valorem on assistant as compared with 20 cents per gallon on castor oil we beg to submit a concrete example: 252 TARIFF HEARINGS. PARAGRAPH 32 ALIZARIN ASSISTANT. A imports 100 pounds of alizarin assistant containing 50 per cent castor oil or 50 pounds, costing at 4 cents per pound, $45. Cost $45 at 15 per cent ad valorem the duty would be 67 cents. B imports 50 pounds of castor oil and pays duty of 20 cents a gallon, or $1.25. (Fifty pounds equals 6i gallons.) This little example is sufficiently plain to illustrate how necessary it is to have the rate of duty on alizarin assistant within 5 cents per gallon of the rate of duty on straight castor oil. We suggest that the wording of the tariff be as follows : "Alizarin assistant, by whatever name known, whether liquid, solid, or in paste, 10 cents per gallon when containing less than 50 per cent castor oil, and 15 cents per gallon when containing over 50 per cent castor oil, including all soluble greases used in processes of softening, dyeing, or finishing." We would state that the clause "by whatever name known" is very important, as parties have endeavored to evade the tariff by bringing it in under various names. The words "liquid, paste, or solid" are necessary, as parties have had alizarin assistant made abroad, car- rying the process to the point of saponification (which can be readily done by expelling the moisture) and then passing it through the cus- tomhouse as "soap." Castor oil and alizarin assistant are manufactured here by many concerns, and the use of castor oil in this country is small compared with what it is used abroad, consequently cost of manufacturing and distribution is much cheaper abroad. Respectfully, yours, THE BAKER CASTOR OIL Co., 100 Williams Street, New York City. F. H. MARSH, Secretary and Treasurer. JANUARY 2, 1913. BRIEF OF T. S. TODD & CO., NEW YORK, N. Y., CUSTOMHOUSE BROKERS AND FORWARDERS. NEW YORK, January 8, 1918. The WATS AND MEANS COMMITTEE, Washington, D. C. GENTLEMEN: The manufacturers of alizarin assistant desire to brin<* to your attention the close relationship that exists between this article and castor oil and which they hope will be recognized and main- tained when tariff provision is made for them. Should provision be made for alizarin assistant without regard to its castor-oil content, such provision would, without doubt, more or less nullify the provision for castor oil and at the expense of the revenue. Alizarin assistant is made of castor oil which has been treated with sulphuric acid, washed and neutralized by alkalies so as to be made perfectly soluble in water, and it is used as a mordant and softener, and for fixing the dyes in cotton fabrics. In II. R. 201 82 provision was made for castor oil at 20 cents per gallon; alizarin assistant was provided for at 15 per cent ad valorem, without limitation as to castor-oil content. SCHEDULE A. 253 PARAGRAPH 32 ALIZARIN ASSISTANT. As castor oil is the component material of value in alizarin assistant it seems manifest that the duty should be based on such material, and previous tariff legislation has followed this reasoning. In the tariff of 1890 the duty was 80 cents per gallon when containing more than 50 per cent castor oil, and 40 cents per gallon when containing less than 50 per cent castor oil. The tariff of 1894 provided for it at 30 per cent, and because of this marked reduction the manufacture in this country was entirely eliminated; the tariff of 1897 provided for duty of 30 cents per gal- lon when containing more than 50 per cent castor oil, and 15 cents per gallon when containing less than 50 per cent, and this latter pro- vision was continued without change in the tariff of 1909, thus, wnile very pronounced reduction in the rate covering this material has been made during the past 22 years, with exception of three years, duty has always been collected based on its component material which undoubtedly is always the basis of tariff enactment, otherwise sub- terfuge might easily defeat its purpose. If the above-mentioned rate of 15 per cent ad valorem should be made a part of the proposed bill, the effect would be that, based on the present English price of 16 10s., material imported and described as alizarin assistant, by reason of the mixture of sulphonating sub- stances incorporated therein, could go to the point of 95 per cent castor oil and, the foreign substances being tnen removed, would leave castor oil of sufficient purity for large commercial use, and the duty would be 8^ cents per gallon instead of 19 cents, which it should be as castor oil; and alizarin assistant of 80 per cent castor-oil content would pay duty of 7 1 cents per gallon instead of 16 cents, which it should do as castor oil, and, further, if under 50 per cent castor-oil content, the duty would be 4.3 cents instead of 10 cents, which it should relatively be. Advantage would undoubtedly be taken of such a condition to the extent that only castor oil which was intended for human consump- tion and must conform to the provisions and requirements of the United States Pharmacopoeia would be declared for the rate provided for this material. How closely this article comes into competition with the foreign is illustrated by the following : The present price of alizarin assistant of 50 per cent castor oil abroad is 16 10s. per ton of 2,240 pounds, or 3.6 cents per pound. Adding 15 per cent duty, as above proposed, makes the price duty paid on the Atlantic seaboard 4| cents per pound, or fully 1J cents per pound less than American cost of pro- duction. If there is applied 10 cents per gallon duty on that containing 50 per cent castor oil, the foreign would cost 5^ cents duty paid and place the American producer in a position to compete. In the present law castor oil is provided for at 35 cents per gallon and alizarin assistant, when containing over 50 per cent of castor oil, at 30 cents per gallon, which slight difference would seem to indicate that the lawmaking body recognized the danger that would be present if provision for it was made other than on the basis of its castor-oil content. The annual production of alizarin assistant in this country is about 275,000 gallons, and the imports for 1912 were 108,331 gallons. 254 TARIFF HEARINGS. PARAGRAPH 32 ALIZARIN ASSISTANT. The reduction in H. R. 20182 on castor oil from 35 cents to 20 cents per gallon is 43 per cent, and we earnestly pray that this sanie ratio of reduction be maintained on alizarin assistant when contain- ing over 50 per cent of castor oil, thus making the duty 17 cents per gallon, and on alizarin assistant containing 50 per cent or under 10 cents per gallon. While this latter provision is slightly less than 43 per cent reduc- tion, it will no more than compensate for the increased cost of pack- ages, labor, and transportation on the lower grade, as these items bear a larger percentage to cost of production than do the higher grades. Such provisions would be in accord with the policy of tariff reduc- tion, allow the continuation of an American industry representing a very considerable amount of labor and investment, and at the same tune tend to good administration by removing the temptation for the practice of deception or fraud upon the revenue. We have the honor to be, yours, respectfully, T. S. TODD. Firms represented. The Oil Seeds Co., New York; Providence Drysalters Co., Providence, R. I.; Thos. Leyland & Co., Boston, Mass.; John Shaw & Co., Boston, Mass.; Jacques Wolf & Co., Passaic, N. J.; Maas & Waldstein Co., New York. BRIEF OF BOSSON & LANE, ATLANTIC, MASS., REGARDING ALIZARIN ASSISTANT, ETC. ATLANTIC, MASS., January 4, 1913. DANIEL C. ROPER, Esq., Clerk Committee on Ways and Means, House of Representatives, Washington, D. C. DEAK Sm: We respectfully ask if you will please file this com- munication with the committee, which gives our position with refer- ence to items of alizarin assistant and soluble oil, Schedule A, para- graph 30, and castor oil, paragraph 31, and castor seeds, Schedule G, paragraph 262, tariff law of 1909, which is the same for these items as the law of 1897. These three items are so closely related that consideration of one should necessarily include the others, from the business interests' point of view. From the fact that the present rates have proven to be satisfactory to manufacturers of alizarin assistant in this country, and inasmuch as foreign-made alizarin assistant has and is now being imported, we feel that the present tariff lias not been a burden to the consumer, and we are not, therefore, in a position to ask for any revision; but we recognize the popular demand for lower tariff rates, and it is our desire to call attention to certain pertinent points with reference to the subjects mentioned. If lower rates are to be made we hope that they will be equalized in such a way t hat the industry in this country will not be jeopardized, and this we believe will be the case, provided your honoraole com- mittee u'ive due consideration to the items mentioned, inclusive. It- has been a source of great satisfaction to us that the manufacturing SCHEDULE A. 255 PABAGBAPH 32 AUZABIN ASSISTANT. interests have received such general assurance from our Representa- tives at Washington and from our President-elect that a revision of the tariff downward is to be made in such manner that our industries will not suffer. It is our firm conviction that this can be done with the commodities in which we are now interested. Our position hi placing this matter before you is based upon an experience in the business covering more than 30 years, the past 18 having been under the present partnership. Previous to the tariff law of 1894 the writer sold alizarin assistant made in the United States. During the operation of the tariff law of 1894 we sold imported alizarin assistant. That law, Schedule A, paragraph 26, charged 30 per cent ad valo- rem on alizarin assistant, and paragraph 27, castor oil, at $0.35 per gallon; Schedule G, paragraph 205, castor seeds, at $0.25 per bushel. This permitted alizarin assistant to be imported at a cost of $0.04 per pound for 50 per cent. Under such conditions we could not manufacture the product here and compete; hence we sold the imported goods. The tariff law of 1897 charged alizarin assistant $0.15 per gallon for less than 50 per cent castor-oil contents, and $0.30 per gallon for higher grade than 50 per cent. This was equal to almost $0.02 and $0.04 per pound, respectively. The same law charged castor oil at $0.35 per gallon, equal to $0.04f per pound. The same law charged castor seeds at $0.25 per bushel, equal to $0.01 per pound for oil contents. Upon the passage and operation of this law we started the manu- facture of alizarin assistant, and within a few years we began to import castor seeds and started the manufacture of our own castor oil, which we have been continuing since that time. The tariff law of 1909 remained same as law of 1897 in items referred to. Alizarin assistant is sold by the pound. It is manufactured from castor oil, the castor oil being extracted from castor seeds. The present cost to produce a pound of alizarin assistant containing 50 per cent of castor oil, including barrels, carting, labor, and chemicals, is $0.05^, but not including cost of selling or any percentage of fixed charges. Castor oil has been quoted selling abroad at $0.06 per pound. Based upon this price, and as near as we can estimate their cost, to produce a pound of alizarin assistant a 49 per cent grade could be imported at $0.05^. We take 49 per cent rather than 50 per cent, inasmuch as the duty is only one-half as much on the 49 per cent grade, which is near enough for the purpose to compare witn cost of our 50 per cent. Our average cost to produce a pound of castor oil, going back for about two years, figures $0.0904, including barrels, carting, usual discount, but not including per cent of fixed charges. We understand that castor oil is sold in England at $0.06 per pound. 256 TARIFF HEARINGS. PARAGRAPH 32 ALIZABIN ASSISTANT, With the present duty of $0.35 per gallon, equal to $0.04f per pound, this would bring price of imported oil to about $0.10$ per pound. Our figures are based upon commercial castor oil. We do not manufacture the medicinal quality. The present duty on castor seeds is $0.25 per bushel, or equal to approximately $0.01 \ per pound of castor-oil contents. The yield of oil varies from 35 to 40 per cent. The price of seeds varies from time to time, so that the cost of oil should be averaged in order to obtain a fair basis. The key to the situation seems to be with the raw material. With the tariff reduced on the castor seeds a corresponding reduction may be made on both castor oil and alizarin assistant without injury to the manufacturing end. We have never used American castor seeds; have never had any offered to us, and do not know that it is or has been a profitable industry. In fact, we doubt if castor seed raising is of any interest to the farming sections of the country. At any rate, without a market of castor oil manufacturers the castor-seed crop would be useless in this country. We trust that whatever reductions are made will be equalized, as based upon the castor-oil contents. With free seed our industry would stand a reduction of $0.01^ per pound or $0.10 per gallon on the castor oil, and $0.05 per gallon, or $0.00f per pound on 50 per cent alizarin assistant. We fear that a further reduction on the manufactured goods would interfere with the success of the industry in this country. Wages paid by us are from $14.50 to $16 per week. Other expenses, including selling expenses, are no doubt much higher here than abroad. We would like to call attention to another point when the work we are engaged in becomes unprofitable, we may turn our hands to something else. We intend to remain in business, and do not now wish to appear before your committee as the time-honored infant in swaddling clothes, but in connection with an object to obtain lower costs for the consumer, we have observed that when the foreign manufacturer does not have competition in this country his prices rise beyond our first calculations, considerably displacing our estimate that the reduction in the tariff rate was to secure a cor- responding reduction in the cost to the consumer. And in the mean- time the present competition among us manufacturers in this country in this line is a great regulator of prices. There has never been to our knowledge any hint of combination or understanding. There is a sharp fight to secure business, and this is a pretty good guaranty of low prices. Our industry is not large, but we trust it will have your thoughtful consideration. Respectfully submitted. BOSSON & LANE. SCHEDULE A. 257 PARAGRAPH 33 CASTOR OIL. PABAGBAPH 33. Castor oil, thirty-five cents per gallon. See S. L. Jones & Co., page 258; Baker Castor Oil Co., page 251; T. S. Todd & Co., page 252; Bosson & Lane, page 254. CASTOR OIL. BRIEF SUBMITTED BY THE BAKER CASTOR OIL CO., NEW YORK CITY. JANUARY 2, 1913. The WAYS AND MEANS COMMITTEE, Washington, D. C.: As the largest manufacturers of castor oil in the United States, and located on the Atlantic seaboard, we use entirely imported castor seed produced principally in India and Brazil. We do not desire to take up the time of the committee with an appearance in person, and will state in a few words that we are heartily in accord with the committee for a revision of the tariff downward, and only ask such consideration as will enable us to con- tinue the business that was established 55 years ago. The House bill (H. R. 20182, 62d Cong.) which passed the House of Representatives fixed the duty on castor oil at 20 cents per gallon. The duty under the Payne tariff law, and which is the auty that is now in effect, is 35 cents per gallon. A lowering of the duty to 20 cents per gallon figures out some 43 per cent reduction. A reduction of this nature is exceedingly drastic, and we fear will seriously affect the castor oil industry of the United States unless accompanied with a reduction of the duty on the raw product castor seed. The present duty on castor seed is 25 cents per bushel of 50 pounds, equal to the castor- oil content contained therein some 12 cents per gallon. We there- fore pray your honorable committee to take due notice of the relation of castor oil to castor seed in preparing these schedules. Respectfully, yours, THE BAKER CASTOR OIL Co., 100 'William Street, New York City. F. H. MARSH, Secretary and Treasurer. BRIEF SUBMITTED BY S. L. JONES & CO., SAN FRANCISCO, CAI. S. L. JONES & Co. (!NC.), San Francisco, January 15, 1913. Hon. JULIUS KAHN, Washington, D. C. DEAR SIR: We beg to acknowledge receipt, of your esteemed letter of the 31st of December, 1912, and will endeavor to give you such facts and figures as will be of service to you in putting the question of duties on oils before the Committee on Ways and Means. In the first place, such oils as kapok seed oil, perilla oil, etc., were practically unknown in this country when the present tariff on oils was drawn up or they would undoubtedly have been placed on the free list as they are only suitable for manufacturing purposes and 78959 VOL 113 17 258 TARIFF HEARINGS. PARAGRAPH 33 CASTOR OIL. are not raised in the United States at the present time. There has been no account kept of the importations of these outside oils, as they have been run into the statistics as "all other oils." Castor oil (not suitable for pharmaceutical purposes) We would strongly suggest that this oil be placed on the free list, as in this case the American soap manufacturers could use same and turn out a soap which would compete with the large quantities of so-called castile soaps imported from the countries bordering on the Mediter- ranean, i. e., Italy, France, etc. This oil is absolutely of no value for the making of pharmaceutical castor oil, as the latter must be taken from the first cold pressings only, while ordinary commercial castor oil is extracted by the addition of heat, thereby destroying its value for pharmaceutical purposes. This oil is especially adapted for the making of the castile style of soap, and if our soap manufacturers could get hold of this oil cheaply enough they could then compete with the foreign product. It should by all rights be classified simply as a soap stock. The importation of this oil into the port of San Francisco for 1912 was 2,077 gallons, valued at $1,871. This, how- ever, may include some pharmaceutical castor oil, but we think the bulk of the importation was represented by a sample shipment sent here by people in the Orient, who were unaware of the heavy duty of 35 cents per gallon now imposed. With regard to codfish oil, we beg to draw to your attention the fact that ordinary fish oil (not American caught) bears a duty of 8 cents per gallon, but owing to the fact that codfish oil sometimes bears a trace of the cod-liver oil it is subjected to a duty of 15 cents per gallon. Now it is almost impossible when extracting this oil to have all the livers eliminated, and we would like to have this oil take the fish-oil rate of duty oven if it should contain cod-liver oil as it is absolutely unfit for the purpose of making pharmaceutical cod- liver oil, and this is what the duty of 15 cents per gallon is to protect. Furthermore, we would suggest that all fish oils, whether seal, whale, sperm, or other fish oils be placed on the free list as they are suitable only for the manufacturers of soap or lubricating oils, and would in this way cheapen the eost of raw materials for our manufacturers of these 1 products, enabling them to compete better with the foreign- made goods. Rapeseed oil. This oil is subject to a duty of 10 cents per gallon, but we respectfully beg to call your attention to the fact that same is only used for the making of lubricating oils and does not compete with any American-made oil. It is one of the few oils which can be "blown," and is almost indispensable to manufacturers of lubricating oils. We therefore think that it is a fit oil to go on the free list. Hempseed oil.- -We would also suggest this for the free list as well as sod oil. both of which are only used for manufacturing purposes, the former of which bears a duty of 10 cents per gallon and the latter a duty of S cents per gallon. A\ e herewith beg to give you the figures for the San Francisco customhouse for the vear 1912: SCHEDULE A. 259 PARAGRAPH 35 LINSEED OIL. Oils. Quantity. Value. Rapeseed oil Gallons. 35, 748 $15, 715 Castor oil 2,077 1,871 Whale oil 10,000 2,756 6,207 1,929 Degras or wool grease 349,265 8,149 Trusting that all these facts will be taken into consideration by the honorable committee above mentioned, and thanking you for the interest you have taken in the matter, we remain, Yours, very truly, S. L. JONES & Co., W. C. DUNCAN, Vice President. Addenda. Referring again to perilla oil, we would also beg to call your attention to the fact that nut oils, except those especially pro- vided for, are free of duty, and according to all authorities we have consulted perilla is classified as a nut, and therefore should by rights come into the United States on the free list ; but disputes have arisen, and a duty of 25 per cent has been levied on certain importations. We therefore strongly suggest that perilla oil should be added to the list of oils free of duty. This oil has been used for centuries by the oriental lacquer makers and is a very important oil in the making of lacquers, and there is no oil in the United States which can entirely take its place. It is therefore essentially a fit oil to be admitted free of duty. Another oil which we would also suggest as applicable to be placed on the free list is stillingia or tallow-seed oil, which is a drying oil shipped from China, and which, owing to its not being mentioned in the tariff, would be assessed a duty of 25 per cent ; but had the framers of the present tariff had this oil brought before them they would have undoubtedly placed it on the free list. PARAGRAPH 34. Cod-liver oil, fifteen cents per gallon. PARAGRAPH 35. Flaxseed, linseed, and poppy-seed oil, raw, boiled, or oxidized, fifteen cents per gallon of seven and one-half pounds weight. LINSEED OIL. COMMUNICATION SUBMITTED BY SPENCER KELLOGG & SONS, NEW YORK CITY. SPENCER KELLOGG & SONS, Buffalo, N. Y., January 4, 1913. Mr. OSCAR W. UNDERWOOD, Chairman, Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: Wo respectfully request that the following communica- tion be made a part of the hearings of your committee of the proposed changes in the chemical schedule and the agricultural schedule of the present tariff: 260 TARIFF HEARINGS. PARAGBAPH 35 LINSEED OIL, LINSEED OIL AND LINSEED (FLAXSEED). There are five points we wish to make : (1) Trust. Although stated to be so by at least one Member of Congress, there is no '"trust" in the linseed-oil business. The Ameri- can Linseed Co. probably handles about one-third of the business in this country, which is conducted upon a very competitive basis. (2) Profits. These have not been large in this line; in fact, quite the contrary, as shown by the published reports of the above- mentioned company, showing that they have not paid a dividend since 1900, and since then have only accumulated a surplus of $768,000, showing a loss during their last fiscal year of $478,000. (3) Tariff on linseed and linseed oil should be adjusted at the same time and upon the same basis, for the one is the raw material of the other. One cent per gallon change in oil is equal to 1\ cents per bushel change in seed. (4) Drawback. We urge the retention of the drawback system, for it allows us at certain times to import foreign seed, and to sell abroad both oil and oilcake made from this seed. (5) Present duty on linseed should be maintained (consequently, the present duty on oil) for the purpose of giving all possible encour- agement to our farmers to raise this crop. The paint trade, varnish maker, linoleum manufacturers and other interests affected, as well as the linseed-oil crushers, have during the past few years annually raised a fund of thousands of dollars to educate and to encourage our farmers to make a success of this crop. Last year and the year before, owing to the poor linseed crops in this country, linseed oil was imported in large quantities, and the duty of 15 cents per gallon paid, showing conclusively that at such times the business is on a competitive basis with European mills, and that our farmers, because of the duty of 25 cents per bushel receive a higher price for their linseed to compensate for the smaller yield per acre. Very respectfully submitted. SPENCER KELLOGG & SONS (!NC.), HOWARD KELLOGG, Treasurer. BRIEF OF WILLIAM GOODRICH & CO., MILWAUKEE, WIS. MILWAUKEE, Wis., January 4, 1913. Representative FXPERWOOD. Chairman of the Ways and Means Committee of the House, Washington, D. C. DEAK SIR: We understand that the question of reducing or chang- ing the present duty of 15 eents per gallon on linseed oil will come up for discussion before the Ways and Means Committee under the chemical and oil schedule on Monday the 6th inst. In the interest of the Unseed crushing industry and of the flaxseed or linseed industry as a whole, we beg to enter an earnest protest against any further reduction in the duty on foreign-pressed linseed SCHEDULE A. 261 PARAGRAPH 35-LINSEED OIL. oil. At the present time both chiua-wood oil and soya-bean oil are admitted free of duty, and both are competitors of linseed oil. Under the Payne-Aldrich tariff the duty on linseed oil was reduced 25 per cent, and now stands at 15 cents per gallon. The removal of this duty would, we think, permit the importation of foreign oil at all times and necessitate a heavy reduction in the price of domestic flaxseed. Owing to a gradual reduction hi the area devoted to flaxseed and the consequent curtailment of the crop the linseed crushers and paint manufacturers of this country have for some years been contributing generously to an educational fund for the purpose of encouraging the growing of the flaxseed and of educating the farmer in the proper treatment of the soil and on the sowing of the seed. Our efforts have met with considerable success, and this year for the first time in several years we have raised a crop sufficient for the country's needs and one that has been profitable and satisfactory to the grower. Now, if through the removal of the protection given to Unseed oil the price of seed is forced to considerably lower levels, the farmer, we believe, will not find it profitable to sow flax, and in consequence the linseed-oil industry of this country (which at present represents a business of sixty to seventy-five millions annually) would be very seriously crip- pled, if not entirely ruined. We would draw your attention to the fact that the duty on oil is in no sense a bonus to the crusher. There is widespread competition and over providing capacity sufficient to keep a considerable number of presses idle all the time. Aside from the benefit to the grower the duty on oil only serves to equalize the values as between this country and Europe. In this country the oil is the principal product and the oil cake the by-product, while abroad the reverse is the case, the value of oil cake abroad being nearly twice that of the oil cake in this country. Under these conditions we can not compete with the European manufac- turers of linseed oil without protection. The present duty on linseed oil is only just sufficient to meet these conditions, and in consequence we believe that any reduction of the present duty would be a serious menace to the life of the industry in this country, if not, indeed, its complete undoing. As we can see no commensurate gain to any class of Americans by lowering or removing the duty, we earnestly pray your committee to recommend the same for retention. Respectfully, yours, WM. O. GOODRICH, Chairman Linseed Oil Committee, National Paint, Oil, and Varnish Association. PARAGRAPH 36. Fusel oil, or amylic alcohol, one-fourth of one cent per pound. PARAGRAPH 37. Hemp-seed oil, ten cents per gallon; rape-seed oil, ten cents per gallon. See S. L. Jones & Co., page 258. 262 TARIFF HEARINGS. PARAGRAPH 38 OLIVE OIL. PARAGRAPH 38. Olive oil, not specially provided for in this section, forty cents per gallon; in bottles, jars, kegs, tins, or other packages, containing less than five gallons each, fifty cents per gallon. See Park & Tilford, page 67; F. S. Bright, page 267; Antonio Zucca, page 274; C. A. Mariana, page 278; Italian Chamber of Commerce, page 105; La Manna, Azema & Farnan, page 286. OLIVE OIL. STATEMENT OF DR. I. J. HUFF, OF IOS ANGELES, CAI., ON THE SUBJECT OF OLIVE OIL. Dr. HUFF. Mr. Chairman and gentlemen, I have been delegated by the olive growers, nurserymen, and olive-oil manufacturers of Cali- fornia to appear before you representing their interests in the matter of a proposed reduction in the tariff on olive oil of 20 cents per gallon. We request that this duty be allowed to remain, as it is for the best interests of those concerned; and we believe that after you have thoroughly examined our statement and investigated our conditions you will agree that to preserve that industry the duty must be left intact. The proposed reduction of 20 cents a gallon, as far as we can see, will in no way reduce the cost of olive oil to the consumer for this reason: Ninety per cent of the olive oil sold to the consumer in the United States is sold in bottles and small cans called sixes (6 to the gallon) and contain 20 ounces of oil each. The average selling price in the United States is 80 cents per can or bottle. A reduction of 20 cents per gallon would be 3J cents per bottle. It is very obvious that the retailer would not sell at 75 cents and lose 1J cents per bottle of his profit, which profit is small enough at the present time. Neither would lie make a 76 cents price. We claim that the proposed reduction on an average annual import of 4,000,000 gallons, or 8800,000, would go to the importer alone, and the Government would lose this revenue and not help the con- sumer, and work a very serious hardship on the olive-oil industry of California. Twenty cents a gallon reduction on 4,000,000 gallons would be a line plum for the importer and absolutely no benefit for the consumer. The importer's argument has been that a 20-cent reduction would increase the sale and thereby increase the revenue. If j'oii will follow the European markets you will find that all of the olive oil being manufactured is readily sold, and that each year the supply is far below the demand, and especially so on the better grades of oil which come in competition with the California products. There was imported in the United States during the year ending June 30, 1912, 3,050,322.06 gallons of olive oil, valued at $4,335,294.25, on which a duty of 1.525,101 .58 was paid, a value of $1.42 per gallon. Tliis was in packages containing less than five gallons. There was also imported 1,700,023.07 gallons, valued at $1,729,491, on which a duty of S6S3.WW.44 was paid, a value of $1.01 per gallon. This was in packages larger than five gallons. There was also 702,565 gallons of denaturized oil, on which no duty was paid. In 1!)()S we were represented here before the Wavs and Means Commit tee. and at that time we asked that the dutv be retained on SCHEDULE A. 263 PABAGBAPH 38 OLIVE OIL. olives and olive oil, and it was. Note the result in four years: With the very small protection we have had we added 6,000 acres more olives, and of the 12,000 acres then growing and 50 per cent bearing 3,000 acres of these have come into bearing and we have planted 6,000 acres more, making at the present time a total acreage in the State of 18,000 acres, from which we are securing at the present time 8,000 tons for oil and 4,000 tons for pickles, a total of 12,000 tons. Four years ago the average net income was only $17 an acre. This year the average net income is $36.88 an acre not a very large income, but still it shows what we can do with protection to this industry, and all of this would be lost if the duty on olive oil were removed. In 1908 the olive industry of California represented $4,500,000. To-day it represents over $7,500,000. There is in California to-day 375,000 acres available for olive trees, and, with proper protection, the time will come when we can nearly supply our own country with oil and olives. The total coM of harvesting and delivering olives in Europe to the factories rarely exceeds $7 per ton, while our cost is seldom under $20 per ton. The average cost of California olive oil in the tanks is $1.85 per gallon, and the average selling price is $2 per gallon, giving the manufacturer a profit of 15 cents a gallon. We use only the best sanitary mechanical methods for extracting oil, while in Europe a large percentage of the oil is extracted in the most crude and filthy manner imaginable, a large portion of it being done by the orchardist himself, and in many instances with only the use of the feet and hands. Labor is a matter which enters largely into the California product. The entire labor pertaining to all the olive industry in Europe, in- cluding field laborers, manufacturing laborers, office help, etc., is $1.04 per day. In California, including the same help as mentioned above, it is $2.47 per day. Heretofore the by-products have been more or less wasted. Now we have started to extract from the pomace the foots oil. This oil is what is termed mechanical oil, used to a large extent by soap fac- tories and silk manufacturers, and its extraction heretofore has been done only in foreign countries. Another serious handicap that we have is the matter of freight. Olive oil can be laid down in New York or Chicago from Europe for 7 cents a gallon. It costs us 15 cents a gallon to deliver it to any point from Denver east, and 18 cents to 20 cents a gallon to deliver it from California to what is known as the Northwest ; that is, through Montana and Idaho. I have a detailed schedule here, which I will ask to have made a part of my statement. The schedule referred to by Dr. Huff is as follows : Average land value per acre, 9,000 acres of bearing olive trees all varieties, $250. Low value here caused by mountain and low land with orchards not cultivated or properly taken care of. Average land value per acre, 9,000 acres growing but not bearing, $325. Higher value of land caused by quality of soil, higher state of cultivation with water facilities. Average yield of olives per acre in California, 1 tons. Low average yield is brought about by approximately 3,000 acres bearing, but not yet under full state of cultivation. 264 TARIFF HEARINGS. PABAGBAPH 38 OLIVE OIL. Average price received by grower for three years, 1909-1912, 9,000 acres, oil olives on trees, $22 per ton. . Average cost irrigation, cultivation, fertilization, and pruning, 18,000 acres bearing and notbearing, $8.50 per acre. Low average caused by large amount of early planted acreage not being cultivated or irrigated. Net average receipts to grower per ton for oil olives, $13.50. Average' price received by grower, 1909 to 1912, for pickling olives on trees, $62 per ton. Forty per cent of all olives produced in State are pickling olives, balance oil olives. Net average receipts by grower for pickling olives, $53.50 per ton. Net average receipts by grower for both oil and pickles per acre, $36.88. Average cost of picking, 9,000 acres, $17.50 per ton. Average cost shipping expense per ton, $3.50. Net amount paid to grower for approximately 12,000 tons produced in 1911, $442,560. Of this tonnage, 4,000 tons were pickles representing 1,200,000 gallons and 8,000 tons of oil olives representing 280,000 gallons of oil. Average cost of manufacturing olive oil for past three seasons including cost of fruit, manufacturing (not including selling expense or other expense pertaining thereto), $1.85 per gallon. Based on annual output of five largest factories, 90,000 gallons per Average cost of curing and canning ripe olives including cost of fruit (not including selling expense or other expense pertaining thereto), $0.617 per gallon. Based on annual output of five largest factories, 409,998 gallons. Average paid for labor field work including farm help and olive pickers, $2.17 per day. Average paid for manufacturing including packing, shipping, selling, operating and office help, $2.76 per day. Average paid for European labor, including field labor, where any paid, manufactur- ing plants and shipping stations, $1.04 per day. Covers, Italy, France, and Spain, approximately 400 orchards and 30 mills. Average labor in Greece is 84 cents per day. Average cost of manufacturing California olive oil for past three seasons (1909, 1910, 1911). [Five factories.) Cost of oil fruit de- livered to factory, per ton. Average yield of oil per ton, gallons. Average cost of fruit per gallon of oil pressed. Manufac- turing, expense, labor, ma- terial, etc. Taxes. Repairs. Season 1909 S46. 10 34 4 $1 342 $0 3858 $0.0091 $0.02 Season 1910 45.57 37.0 1.231 .256 .014 .05 Season 1911 . 45.00 34 1 33 269 009 .048 Total 13G 73 105 4 3 8% 9108 0321 .118 Average for last :> seasons 45.58 35.13 1.299 .3036 .0107 .0393 Interest. Insurance. General ex- penses. Other miscella- neous ex- penses. Total cost, Eer gallon, ulk oil in tanks. Gallons manufac- tured. Season 19n'.i SO 0558 so 0248 SO 0760 SO Oil $1 9245 75 000 Season I91n. . ... . (KH 039 185 012 1 848 85 000 Season 1911 04 015 07 1 779 110 000 Total . 156X 0523 . 07SS . 3310 .028 5. 5515 270. 000 SCHEDULE A. PARAGRAPH 38 OLIVE OIL. 265 Average cost of pickling and canning California ripe olives for past three seasons (1909, 1910, and 1911). [Per quart case of 2 dozen.] Cost of - fruit de- livered, at factory. Manufac- turing ex- pense,labor, material, etc. Taxes. Repairs. Interest. Insurance. Season 1909 $1.570 $1.312 $0.0224 $0.0493 $0.137 $0.0612 Season 1910 1.586 1.494 .041 .084 .171 .109 Season 1911 2.059 1.242 .022 .044 .098 .037 Total 5.215 4.048 .0854 .1773 .406 .2072 Average per year for last three seasons (24 qt. cans). . Per gallon (4) 1.738 .289 1.349 .225 .0285 .0047 .0591 .OC9S .135 .0225 .0691 .0115 General expenses. Other mis- cellaneous expenses. Total cost per case. Cases packed. Total pack five facto- ries, cases. Season 1909 $0.187 SO. 0271 $3.366 36,129 75,000 Season 1910 .311 .0159 3. 955 21,578 50,000 Season 191 1 .. .171 .115 3.788 41,701 80,000 Total .CC9 .1580 11.109 99,408 205 000 Average per year for last th (24 qt. cans) ree seasons .223 .053 3.703 33,136 68,333 Per gallon (4) .037 .009 .617 1 198,816 1 409,998 1 In gallons. Mr. HARRISON. It has been frequently stated before this commit- tee that California produces about 5 per cent of the olive oil con- sumed in the United States. If that is so, you want a tax on the other nineteen-twentieths of the olive oil to protect that 5 per cent ? Dr. HUFF. We claim that if the tax which is now upon olive oil were removed that it would not affect the consumer at all. Mr. HARBISON. Is not this an endeavor on the part of these small producers in California to make the people in the East pay their freight rates, through, the tariff? Dr. HUFF. I do not think it is. I think it is an endeavor on the part of the people of California to build up a business that is young and has shown that it can be built up. Mr. HARRISON. At the expense of the rest of the United States ? Dr. HUFF. I do not see how the expense would figure, because I do not think the consumer could get his oil for any less. Mr. NEEDHAM. California produces about 10 per cent of the con- sumption in this country, instead of 5 per cent. Dr. HUFF. Yes, sir. Mr. NEEDHAM. How much has your investment in the olive busi- ness increased since the Payne law was enacted ? Dr. HUFF. From four and a half to seven and a half million dollars. Mr. NEEDHAM. Is there enough land in the States of California and Arizona to produce ultimately enough olives and olive oil to meet the home demand ? Dr. HUFF. I think there is. Mr. NEEDHAM. Has the price of olives gone up in recent years, or tho price of olive oil ( 266 TARIFF HEARINGS. PABAGBAPH 38 OLIVE OIL. Dr. HUFF. The price of olive oil? Mr. NEEDHAM. Yes. Dr. HUFF. No; the price of olive oil remains about the same, but the prices of the manufactures of olives has gone up, and thereby benefited the grower. Mr. HARRISON. What is the market price of olive oil in bottles now? Dr. HUFF. On the 20-ounce basis, about 80 cents. Mr. HARRISON. What is the market price per gallon of the other olive oil ? Dr. HUFF. Which do you mean ? Mr. HARRISON. The tariff divides the importations into two differ- ent classes. How is it imported otherwise than in bottles ? Dr. HUFF. Well, in packages of 5 gallons or under, and also over that in casks and barrels. Mr. HARRISON. What is the market price per gallon of that oil? Dr. HUFF. I presume it is the same as the other. It is the oil that is brought in here to be bottled. Mr. HARRISON. There is a great difference between the unit of value of the two in the Treasury report. Dr. HUFF. From $1.01 to $1.42 per gallon a difference in the duty. Mr. HILL. Dr. Huff, do you know any reason why cottonseed oil should be on the free list and olive oil not on the free list ? They are both a food product. Dr. HUFF. Xo; I do not. Mr. HILL. Would you approve a general policy which would make the duty large enough to pay transportation and prevent competi- tion in any part of the United States ? Dr. HUFF. Xo. Mr. HILL. You would ? Dr. HUFF. Xo, sir. Mr. HILL. Then why do you ask a duty here that will enable you to control the market on the Atlantic coast in olive oil? Dr. HUFF. We do not ask a duty to enable us to control the market. We ask a duty to protect a voung industry. Mr. HILL. Will it ever get to be old ? Dr. HUFF. Yes; as time goes on. Mr. HILL. It is a food product ? Dr. HUFF. It enters largely into food. Mr. HILL. Do you not think it would be a wise policy to have food products free in this country >. Would you justify a duty of 25 cents a bushel on wheat and 10 cents on corn, and things of that kind that enter into the daily living of the American people "? Dr. HUFF. I do not think olive oil enters into the daily living of the American people. Mr. HILL. I think it enters into a very large proportion of the daily living O f the people of the Atlantic coast. The foreign popu- lation there is very large. Would you be in favor of putting a cor- responding duty on meat? Dr. HUFF. Xo; I would not. Mr. HILL. Why not on meat as well as on olive oil? Dr. HUFF. Bemuse, meat is more generally used than olive oil. SCHEDULE A. 267 PARAGRAPH 38 OLIVE OIL. Mr. HILL. Would you 011 any food product other than things which are produced in California ? Would you favor, for example, the appli- cation which was made here three years ago to increase the duty on peanuts 15 cents a bushel or from a half of a cent a pound to two cents a pound in order to give the peanut growers of the Atlantic coast a virtual control over the San Francisco market ? Would you think that a wise policy ? Dr. HUFF. No ; I would not. Mr. HILL. I do not believe you would, and I do not approve of it with regard to olive oil. STATEMENT OF F. S. BRIGHT, ON BEHALF OF THE POMPEIAN CO., OF WASHINGTON, D. C. Mr. BRIGHT. Mr. Chairman and gentlemen of the committee. I rep- resent the Pompeian Co., whose sole business is the importation of olive oil in bulk for redistribution in packages. The Pompeian Co.'s plant is located in the city of Washington, and this is probably the only subject that will come before your committee which can be seen right here. It is situated on Thirteenth Street SW., next to the Bureau of Chemistry, and my clients chose that location in order that they might be subject to the most searching super- vision as to the quality of their product. I shall address myself only to the subject of olive oil, section 38 of the Payne bill, and the latter part of section 50 of H. R. 20182. In the Payne bill " olive oil not specially provided for in this section" pays 40 cents per gallon; "in bottles, jars, kegs, tins, or other packages containing less than 5 gallons each, 50 cents per gallon." In H. R. 20182 it is provided- Olive oil, not specially provided for in this act or in the act cited for amendment, twenty per centum ad valorem; olive oil, in bottles, jars, kegs or other packages con- taining less than five gallons each, thirty cents per gallon. My clients are interested in not having the duty on their raw material placed on an ad valorem basis, but think that if an ad valorem duty is to be placed it should be put at 15 per cent ad valorem. The reason for the imposition of the specific duty on the oil in bulk, rather than the ad valorem duty, is the constant fluctuation in the price of olive oil which is imported at the present time. The price runs well toward $1.30 per gallon on the other side now. It has increased, as I will show you in a few minutes, well on to 80 per cent in the last five years. That is the first reason for a specific duty, because you can better estimate, w r ith a specific duty, what the revenue will be and you can further induce the importer to bring in the highest grade of olive oil, if you pay the specific duty, rather than an ad valorem duty. You further protect your revenue by the fact that the oil, when it bears a specific duty, needs only to be measured ; it requires no appraisement, and with the variations in the prices abroad , an ad valorem duty may lead to difficulty in appraisement. We are in no w r ay interested in the importation of olives as a food, but only in the olive oil itself. The existing difference of 10 cents per gallon between oil in bulk and oil in jars and bottles is changed 268 TABIFF HEAKINGS. PABAGBAPH 38-OLIVE OIL. in the proposed bill, by my present figures, to only 4 cents per gallon; that is, it comes in in bottles, under the bill, at 30 cents per gallon, while at a 20 per cent ad valorem rate, on the basis of cost of $1.30 a gallon on the other side, the bulk product would pay 26 cents a gallon. My client is interested in the preservation of as wide a differential between the olive oil in bulk and olive oil in packages as it is fair should be maintained. In this connection I desire to present to the committee a very brief compilation of the duty on olive oil in Canada, France, Ger- many, Mexico, Spain, Italy, and Greece, giving to you both the pro- ducing countries and the distributing countries. These statistics are prepared by the Division of Foreign Tariffs of the Bureau of Foreign and Domestic Commerce, of the Department of Commerce and Labor, and I thought they would be of convenience to the committee. It shows the present duty in Canada, a nonproducing country, of 15 per cent ad valorem. The present duty in Germany, a nonproducing country, is not quite 8 cents a gallon. That is on the bulk. In Germany the difference between the oil in bulk and the oil in jars and receptacles, ready for distribution, is 2 to 1; in Greece the dif- ference is 3 to 1 . We think it is fair that the duty should be less in the United States. I would say as a fair proposition that the duty on the oil should be placed at a specific duty of 20 cents a gallon, which would be a present ad valorem duty of about 15 per cent. The specific duty on the finished product is 30 cents per gallon, as provided in the bill. We think that we have some justification in talking to you because in the year just concluded the Pompeian Co. imported and packed not quite half a million gallons of olive oil, and we think the duty on the finished product should be 40 cents per gallon. I have here the statistics of growth in the importations of olive oil in the last few years, from 1907 to 1911, compiled by the Bureau of Statistics. They arc left from the brief, and I will ask to incorporate them in the record. These show that the price is rising much more rapidly than the quantity imported. I do not think anybody can honestly promise a continuance of the present prices, even if the duty is reduced as pro- posed by this bill, because the demand all over the world is growing enormously, and the length of time that is required to bring an olive grove into bearing is such that we can not foresee any very great in- crease in the production of olive oil in the immediate future" Congress has at all times recognized this difference in the duty be- tween the bulk and package, and still continues to recognize it in the pending House bill. There is another phase of this question which I wish to bring to your attention, and that is of the 500,000 gallons imported by the Pompeian Co. in the last year, half of it, or 250,000 gallons, were distributed among the drug trade of the United States. There is a very largely increasing use of olive oil as a medicine and as an emollient, and we think that unless we can get the committee to help us maintain this lower duty the American people will eventually have to pay a higher price for their olive oil. and that if the duty is maintained as provided SCHEDULE A. 269 PARAGRAPH 38 OLIVE OIL. in this bill, amended as I have suggested it, the present price of olive oil can probably be maintained I do not want to make an} 7 misrepresentations by saying that the price can be materially reduced even if the duty is reduced, because the price of the raw product seems to be rising all over the world, and has steadily progressed in the last five years. I do not" know that it is necessary to take the time of the commit- tee to discuss the California situation, but if my information is cor- rect, the entire product of California is only 300,000 gallons, and within the last year the Pompeian Co. has shipped 30,000 gallons into the State of California, so that the product of the State of Cali- fornia is not sufficient for the Pacific coast region alone. Mr. NEEDHAM. Is not that because your oil is a much cheaper grade ? Mr. BRIGHT. No; we think our oil is the best in the world. We pay the highest price for it abroad, and we think it is better than the California oil. Mr. NEEDHAM. Is it not universally conceded that the California oil is the best oil in the world ? Mr. BRIGHT. Yes, sir; but we do not believe that conception is cor- rect. We have spent a great many thousand dollars trying to per- suade the American people that a product packed as our product is packed, under the most absolutely sanitary conditions conceivable, is as good as a product bearing a foreign label. Mr. NEEDHAM. Is your product a pure product ? Mr. BRIGHT. Yes, sir. Mr. NEEDHAM. Is it not mixed with cottonseed oil ? Mr. BRIGHT. Absolutely not a fraction of a tenth of 1 per cent of cottonseed oil. We are next to the Bureau of Chemistry, and they will tell you they can discover a fraction of one-half of 1 per cent of cottonseed oil. Olive oil formerly was adulterated at Porto Franco and shipped into this or any other country, but our olive oil is abso- lutely pure. That is our pride. Mr. NEEDHAM. You can not get the same price as California, can you ? Mr. BRIGHT. We are not trying to get the high prices. We are not aiming at the high price California gets.' We are aiming to make as cheap a product as possible. That is our purpose. The Pompeian Co. handled last year, if our figures are correct, five gal- lons for every three gallons produced by the State of California. Mr. NEEDHAM. Do you think that if olive oil were put on the free list it would reduce the price to the consumer? Mr. BRIGHT. I do not really know whether it would for any very long time. Mr. NEEDHAM. Do you think it would reduce it for the present, for the moment ? Mr. BRIGHT. I think probably it would. Mr. NEEDHAM. How much of the duty is added to the price, which you add to the price? Mr. BRIGHT. I can not answer that question. The supply varies so it is hard to tell. We keep our product at a fixed price. We dis- 270 TARIFF HEARINGS. PARAGRAPH 38 OLIVE OIL. tribute it at wholesale. The increased demand is such that individu- als to whom we distribute have been erasing the price that is printed on the package and charging a higher price for it. Mr. HILL. How do you do that keep your price at a fixed price with a varying supply ? Mr. BRIGHT. The company has done it up to this time. Mr. HILL. Is there any agreement among the dealers to do it ? Mr. BRIGHT. No, sir. We do not know anybody that operates in the olive-oil business except the foreign grower and the American consumer whom we reach through our distributers. Mr. HILL. You must make the price high in the beginning, to cover all the short supply, and then keep it up when the supply is greater. Mr. BRIGHT. The time will come whe'n the price will have to be changed if conditions are not changed in the production of olive oil on the other side. If we had several years of bad season in the olive- growing countries the price of olive oil, our price, would have to be put up. But we have been able to maintain it largely because of the great quantities that we handle. We made a great deal of money to begin with. We did not make so much per gallon, because the price has risen not quite 80 per cent in the past five years Mr. KITCHIX. What per cent of the olive oil consumed in this country do you import ? Mr. BRIGHT. The United States imported last year, in 1911, altogether 4,400,000 gallons. We imported about 300,000 of those. Last year our business grew so enormously that we imported 500,000 gallons, half a million gallons of olive oil. Mr. KITCHIX. There are a great many other competitors with you ? Mr. BRIGHT. There is constant competition. Mr. KITCHIX. How is it you have all been able to fix and maintain this same identical price for the last four years ? Mr. BRIGHT. We have maintained the price ourselves without any consideration for anybody else. I can not tell you what the prices are at which other companies sell their products. There are a great number of importers who import and put up the product. We have maintained our price- because it is good business to maintain that price. The wide distribution of the product and the wide adver- tisement of the product at that price is good business. Mr. PALMER. What proportion of the imports are in bulk as you import it ? Mr. BRIGHT. Every ounce. Mr. PALMER. What proportion of the total imports into this country? Mr. BRIGHT. 1 can not give you those figures, but we have at this time 1.200 casks of olive oil right hi the plant here in Washington in hulk. Mr. PALMKI;. There are other concerns in the country engaged in the same business as you are? Mr. BRK;HT. 1 think there are other concerns that import the bulk oil, but 1 know of no other concern that has the same business as Tluit is only a part of other businesses. But we have no business whatever except the importation of olive oil in hulk and ils redistribution in packa es. SCHEDULE A. 271 PARAGRAPH 38 OLIVE OIL. Mr. SHACKLEFORD. In the process of refining this olive oil what materials are combined to increase its volume ? Mr. BRIGHT. Nothing. The olive oil that is imported is placed in the plant here, packed under sanitary conditions in tins, and dis- tributed. Mr. SHACKLEFORD. Cottonseed oil is not combined with it ? Mr. BRIGHT. Absolutely not the fraction of an ounce. I have said that before. We are immediately next door to the Bureau of Chem- istry and we are subject, of course, to the pure food and drug act. Every bit of olive oil packed in the United States is subject to it. We would be liable to be caught up immediately if we did adulterate our product in the slightest and called it olive oil. Mr. SHACKLEFORD. Is there not a product on record called olive oil that has in it a combination of cottonseed oil ? Mr. BRIGHT. I can not answer that question. I do not know of any. But cottonseed oil is used very largely as a food product, and is a very good food product. Mr. HARRISON. Is it true, as reported, that cottonseed oil is sent from this country to one of the States of Italy, bottled there, and sent over here as olive oil ? Mr. BRIGHT. I have heard of it, but I can not verify it, and under the pure food and drug law I don't believe it possible. Mr. KITCHIN. Which is the better of the food products olive oil or cottonseed oil ? Mr. BRIGHT. I have never tasted cottonseed oil, when I knew it, and I can not, therefore, answer your question from personal knowledge. Mr. SHACKLEFORD. What is your firm ? Mr. BRIGHT. The Pompeian Co. You have seen the advertise- ments in the street cars in Washington, and we would be delighted to have any of you see the plant, if you are interested in seeing it, at any time. I thank you very much. BUREAU OF FOREIGN AND DOMESTIC COMMERCE. Tariff No. British preferen- tial tariff. General tariff. 262 278 Canada: Olive oil . ail valorem 15 per cent. . 20 per cent. Free. Do. Olive oil for manufacturing soap, tobacco, and can- ning fish, ad valorem. United Kingdom: Olive oil Free General tariff. Minimum tariff. France (franc, 19.3 cents): Ex 110. Pure olive oil For sonn making ("TOO kilos'). 10 francs 3 francs. 10 francs. Other (100 kilos) 2o francs . NOTE. Tte general tariff applies to imports from the United States. 272 TARIFF HEARINGS. PARAGRAPH 38 OLIVE OIL. BUREAU OF FOREIGN AND DOMESTIC COMMERCE Continued. General tariff. Conventional tariff. Germany (marks, 23.8 cents): 166. Olive oil, pure, in casks (100 kilos) 10 marks Free. Pure olive oil, officially denatured (100 kilos) 2 marks . ' 167. Olive oil in receptacles other than casks (100 kilos) ..... 20 marks 10 marks. NOTE. The conventional tariff applies to imports from the United States. Peso. Mexico (peso, 49.8 cents): 123. Olive oil, in jars or cans per kilo.. 0.17 124. Olive oil, in glass vessels do .22 NOTE. There is a surtax of 5 per cent of the duty. First tariff. Second tariff. Spain (peseta, 19.3 cents): 644. Olive oil (100 kilos) 40 pesetas 30 pesetas. The second tariff applies to imports from the United States. General tariff. Conventional tariff. Italy (lira, 19.3 cents): 7. Olive oil (100 kilos) 15 lire . Greece (drachma, gold, 19.3 cents: oko, 2.8 pounds): 42. Olive oil in bottles or other vessels, except barrels, skins, and the like j per 100 okos 100 drachmas. Olive oil in barrels, skins, and the like do 30 drachmas. XOTE. The fluty is payable in paper drachmas at the rate of 1.4") drachmas paper to 1 drachma gold. The value of the paper drachma is now practically equal to that of the gold drachma, and the actual duty, therefore, amounts to 145 per cent of the rates given above. [The Roesslor & Hasslacher Chemical Co., 100 William Street, New York.] Imports of merchandise years ending June 30. 1907-1911. OIJVK 01!,, KXCKPT FOR MANUFACTURING OR MECHANICAL PURPOSES (DUTIABLE). Imported from Europe: Austria-Hungary Azores, and Madeira Islands Belgium France Gorman v Gibraltar... Grr Italy Malta, Go7.o, etc Netherlands Norway Portugal Spain Sweden Turkey in Kun>|><'. . United Kingdom - England. Scotland Ireland North America: Canada Mexico West Indies -Cuba. i, isii 10 14 29,922 fi 1 , .SOS Gallons. 15,507 3 875.537 10, 793 153,776 2,604,546 1,670 35,215 202, 158 11,695 7,046 6 982 Gallons. 16,858 1,646 773,267 8.220 158,350 2,356,086 117 213,641 24,305 43,031 40 1,753 135 2, 895 Gallons. 5,358 10 295 858,691 4.287 185,895 2,959,638 (i 1,223 83 215,169 92,893 23,689 38 3,777 623 3,680 SCHEDULE A. 273 PARAGRAPH 38 OLIVE OIL. Imports of merchandise years ending June 30, 1907-1911 Continued. OLIVE OIL, EXCEPT FOR MANUFACTURING OR MECHANICAL PURPOSES (DUTI- ABLE) Continued. Imported from 1907 1908 1909 1910 1911 South America: Argentina Gallons. 6 Gallons:. Gallons. Gallons. Gallons. Chile .. 41 6 Asia: Chinese Empire 5 Hongkong 50 6 224,930 Japan 3 111,316 24 2,092 3 132,664 1 100,953 Turkey in Asia 48,414 Oceania: British Australia and Tasmania Africa: French Africa 544 1,429 110 50 18,561 9,187 2 18 258 43 1,639 Morocco Turkey in Africa- Egypt.. Tripoli 2,014 104 376 Total 3,449,517 3,799,112 4,129,454 3,702,210 , 4,405,827 RECAPITULATION. Europe 3,333,161 896 6 111,324 24 4,106 Dollars. 5,501 3,563,900 8,052 41 224,986 3,960,985 8,034 3,596,105 4,783 6 100,954 4,347,275 8,080 North America South America Asia 132,667 48,414 Oceania Africa -... 2,133 Dollars. 860 100 1,998 1,082,020 12,796 11 39,318 2,416,583 27,768 Dollars. 16, 196 362 Dollars. 15,033 2,058 Dollars. 6,526 15 472 1,477,284 6,758 Europe: Austria- H,ungary Azores, and Madeira Islands Belgium 517 1,087,641 9,385 5 1,383,873 11,561 1,258 1,320,959 10,116 France .. . Germany Gibraltar Greece ... . 48,524 2,100,557 11 14 146,486 3,118,737 125,207 3,034,622 167,953 3,955,614 Italy Malta, Gozo, etc Netherlands 63 1,643 292 6 1,576 113 215,262 Norway Portugal 242 127,135 1 12,154 1 56,546 452 82 580 8 102 129,934 23,310 172,750 169 196,800 Spain Sweden Turkey in Europe 2,054 52,764 6,788 14 1,797 8,141 | 70,046 1 " 16,915 67,010 90 77,686 48,005 83 United Kingdom- England Scotland Ireland North America: Canada 8,320 15 1,044 2,175 84 3,256 5,041 407 4,251 Mexico West Indies Cuba South America: Argentina Chile 73 8 Asia: Chinese Empire ... 5 Hongkong 60 9 126,281 Japan . 2 71,930 35 1,405 5 92,001 2 74,819 Turkey in Asia 45,642 Oceania: British Australia and Tasmania Africa: French Africa 352 2,800 85 39 8,604 6,840 2 11 203 46 1,149 Morocco Turkey in Africa- Egypt Tripoli 998 96 302 Total 3,523,725 3,876,901 3,738,603 8,599 73 126,350 5,069,655 4,869,114 6,014,191 RECAPITULATION. Europe . 3,448,228 1,114 8 71,937 35 2,403 4,952,813 9,379 4,788,471 5,515 8 74,821 5,957,353 9,699 North America South America Asia 92,006 45,642 Oceania Africa... 3,276 15.457 299 1,497 78959 VOL 113- -18 274 TARIFF HEARINGS. PARAGRAPH 38 OLIVE OIL. STATEMENT OF ANTONIO ZTJCCA, REPRESENTING ZUCCA & CO. Mr. ZUCCA. I present myself before this honorable committee as a veteran merchant selling pure olive oil, never having sold a package of other than the pure article. Forty-two years ago I commenced to sell said product, at which tune I was disposing of only a few hundred cases a year; at present I sell about 30,000 cases and several thousand barrels annually. Although the duty of about 50 per cent of the cost of olive oil is heavy, its consumption has steadily increased, on account of the increase of the Latin immigration; in view also of the fact that the American people find the use of oil a healthy and excellent condiment and its employment for cooking, illness, cleanliness unsurpassed. Olive oil is really a necessity of life that should be sold at prices within the reach of the masses. I supported the passage of the "pure-food law," preventing the entry and selling in this country of other than the pure olive oil when so branded. Before the passage of said bill much of the olive oil sold to the public was a mixture of cottonseed and other vegetable oils, which, although perhaps not injurious to the health, on the other hand, was not beneficial. The law is very strict as regards the importation of the pure product; nevertheless the masses are not protected by it, as adulterated olive oil is packed and sold in this country by simply branding the bottle or can containing the same with very attractive labels and names sufficiently deceiving to keep the unscrupulous dealers within the law, while in small type the word "compound" is placed on the labels. The quantity of this kind of oil sold is far in excess of that of the pure. The package and price is attractive to the consumer, and the seller realizes a much larger profit than he could ever make by dealing in the pure article, with the advantage of being able to give a much higher percentage to the selling agent. The pure-food commissioners are helpless in taking any action in the matter, as the package is branded "compound" or is bearing such other misleading phrases. In my opinion, there is but one way to restrict the selling of this "compound oil," which is actually an adulterated food product, and that is by reducing the tariff on pure oil to a rate that will not yield any profit by selling a compound oil, such duty to be 20 or 25 cents per gallon on packages and in bulk: for this reason, that the present lower rate of 10 cents per gallon on oil imported in bulk, when it is put into packages here, is mixed with a cheaper grade of olive oil, but is sold to the public as a finer quality than it actually is. By such a measure the strictly pure olive oil can be sold to the masses at just as low a figure as the adulterated, making it unprofitable to anybody who tries to adulterate the article and sell it for pure. Tru;-, California produces some olive oil, but in such a small quan- tity as to be insufficient to supply the demand of the State, or even of OIK; city. Flie importation of olive oil in California is quite large, and a lower tariff would be an advantage to California, even when the State pro- duces a larger quantity, and that will take some time, as olive trees l>ear fruit only after having been planted many years, a tree 50 years old being considered a full-bearing tree. SCHEDULE A. 275 PARAGRAPH 38 OLIVE OIL. Let the people have olive oil at reasonable prices. It should not be considered a luxurv, but a necessity of life. Dyspepsia is unknown illness in oil-producing countries, and is due in a great part to the free use of pure olive oil. In conclusion, I sincerely hope this honorable committee will con- sider it important for the good of the masses to reduce the tariff on olive oil, that the same may be obtainable in every home at a moderate cost. I will say this, gentlemen of the committee, that I am in favor of a specific duty, for the reason it is good for the Government and good for the merchant. With the ad valorem duty we always have had trouble, on account of differential prices on the other side. Another thing I will say : As far as revenue is concerned the con- sumption of olive oil in the United States is about 10,000,000 gallons a year, of which four and a half millions come from Italy, France, and Spain, and some from Greece. California produces about 800,000 galloni. The other 5,000,000 or less than 5,000,000 gallons that is sold is only this compound oil. It is not bad oil; it is cottonseed oil, or peanut oil, probably; but certainly it is not very beneficial to the health. If you reduce the duty, say, one-half of what it is to-day, from 50 cents to 25 cents, I am pretty sure they will have to drop business in this compound oil or they will fail. And then, instead of the im- portation of four and a half million gallons, there will be nine or ten million gallons of oil, which will give the same revenue to the United States Government. The cottonseed-oil merchants probably will complain, but there are a lot of countries where they nave no pure- food laws, and they will not prohibit the cottonseed oil produced in such countries. Mr. HARRISON. I want to ask you a (question. I believe you are one of the best-known Italian-Americans in our city. Is it not true that among the people of Mediterranean birth, who live hi the big cities of the East, olive oil is a common substitute for butter ? Mr. ZUCCA. Yes. Mr. HARRISON. And it is known as Italian butter among these people ? Mr. ZUCCA. I eat three eggs every morning, and they are fried in oil. Mr. HARRISON. It is a matter of general consumption in the families of these people in all eastern cities? Mr. ZUCCA. Yes, sir. I like steak in butter, but other things we fry in oil. In our family of four or five we use from a gallon and a half to 2 gallons of oil every week. Mr. NEEDHAM. You do not consider it a luxury, do you? Mr. ZUCCA. No. Mr. NEEDHAM. My distinguished opponent who defeated me in the last campaign said that olive oil was a luxury, and under the Democratic theory they would increase the duty if they were elected. You do not agree with him ? Mr. ZUCCA. I do not know anything about the theory. And I am not a prophet. Mr. RAIXEY. I presume you have had opportunities to observe the manufacture of the oil ? 276 TARIFF HEARINGS. PARAGRAPH 38 OLIVE OIL. Mr. ZUCCA. Yes, sir. Mr. RAINEY. What have you to say about it ? Mr. ZUCCA. The gentleman from California is wrong in what he stated. They have a perfect way in Italy and in Spain for making the oil: even in Africa that is the case. Mr. RAINEY. How about the cleanliness of their methods in mak- ing it? Mr. ZUCCA. It is very clean. I have been in Lucca, and through- out tlie Riviera, in northern Italy. It is very clean indeed. Mr. RAINEY. Have you seen them making olive oil in California? Mr. ZUCCA. Oh, yes. Mr. RAINEY. What is the difference in the method ? Mr. ZUCCA. I do not believe there is any. I believe California has the latest methods. But the best methods are also used hi the best places in Italy. Mr. RAINEY. Which is the better, the California oil or that imported from Mediterranean countries ? Mr. ZUCCA. I think there is no difference whatever between that which is made at the best places. It is well done in California, and it is well done in Italy and France and Spain. Mr. RAIXEY. Did you notice any difference in its manufacture ? Mr. ZUCCA. No, I do not believe so. Not in the first-class houses. Mr. RAINEY. Somebody stated something here about pressing out olive oil in the hands, or something of that kind. Mr. ZUCCA. Oh, no. It is all done by machinery, in bags. First they pick out the bad olives: take them out. Then the olives are put into bags, and then the first grade of oil is abstracted, then the second grade, and then they put hot water on it and get the third-class oil, which is machinery oil. Mr. RAIXEY. Is there a kind of government supervision over there? Mr. ZUCCA. Oh, yes. Mr. RAIXEY. Do they look after cleanliness ? Mr. ZUCCA. Oh, yes. Xo package of oil goes away from the city of Lucca which has not a certificate from the board of health given with the invoice. Mr. RAIXEY. Is the oil they export as good as that which they keep for homo consumption '. Mr. ZUCCA. They are not so particular about machinery oil. There is a lot that comes for machinery purposes. They neutralize the oil. Mr. RAIXEY. For what they send over to us, do they require the same sort of health certificate as at home? Mr. ZUCCA. I guess not; I do not think so. They are putting some sulphur there. Mr. RAIXEY. They are not so careful about what we eat as they aro about what they eat over there? Mr. ZUCCA. They are very clean, as far as I saw. I go quite often to Italy, and T have been in Spain and in Greece, and in the best places they use very clean methods. I guess the gentleman from California must have been there possibly 50 years ago. Mr. JAMES. Do not they require the same stamp on the oil they ship to us, which is required for that which they use amoncr the people at home? SCHEDULE A. 277 PARAGRAPH 38 OLIVE OIL. Mr. ZUCCA. Yes; the board of health supervises that. Mr. JAMES. When it comes out of the factory, the same stamp is required if it is to be exported as if it is to be used over there ? Mr. ZUCCA. Not the same, because there the board of health certi- fies they have a hundred cases of oil from Lucca which has been shipped to Zucca & Co., New York, or to somebody else, and attached to the invoice is a certificate from the board of health stating that the supervisor has been there and examined the oil, as to how they make it, how they pack it, and everything else, which is in that certificate from the board of health. Mr. Dixox. How about the quality of the oil in California and there Mr. ZUCCA. It is the same in the best places. California oil is very fine. Some of it has a strong taste, the same as the California wine, because the imported wine is more fine, because the soil has been worked more. It is the same about the California oil. I tasted it, and some of it has a little of that soil taste. That is probably because the soil is too rich. Mr. RAIXEY. Suppose those Italian boards of health should refuse to stamp a lot of oil manufactured because it was not up to the standard. What would thev do with it? How would they dispose of it ? Mr. ZUCCA. They would dispose of it there, I suppose. They do it. Mr. RAINEY. They could not dispose of it there, could they ? Mr. ZUCCA. Olive oil, you know, is not sent only to the United States. Down in Central America they use it in large quantities, and they have no pure-food law. Mr. RAIXEY. Then it is sent out of the country, what they can not use there ? Mr. ZUCCA. Yes. They send it to South America, and they send it to South Africa; all places. Mr. RAIXEY. They are just as likely to send it over here, are they not? Mr. ZUCCA. They can not do that, because the oil is examined by the pure food commissioners every lot of oil received. When we get an invoice of a lot of oil we find two or three cans that have been taken from the cases and examined by the pure food people. If they find anything mixed with it, they do not allow it to enter into the country, and it has got to go back. They send it back to the other side. Mr. PETERS. The Italian olive oil imported here is examined as to its condition, both in Italy and in this country ? Mr. ZUCCA. It is; not only the Italian, but every oil, except machinery oil, which is examined. They neutralize it in such a way that it could not be used for eating purposes. Mr. PETERS. Will you tell us whether the Italian olive oil sent here for consumption is subjected to the same examination in Italy as if it was to be consumed there ? Mr. ZUCCA. Yes; by the board of health, the local board of health. It is a local law for the benefit of the honest producer there. 278 TAEIFF HEARINGS. PARAGRAPH 38 OLIVE OIL. STATEMENT OF C. A. MARIANI, REPRESENTING THE E. MARIANI CO., NEW YORK CITY. The CHAIRMAN. Mr. Mariana, I understand, wants to appear before the committee. Give your name, Mr. Mariana, to the stenographer. Mr. MARIANI. C. A. Mariana, of the E. Mariana Co., 29 Broadway, New York City. Mr. Chairman and gentlemen of this honorable committee, 1 want to thank you for this opportunity given me, especially as this brief that I am reading from was published as a part of yesterday's pro- ceedings. I had a special motive, however, in asking the privilege of speaking before you, and that was to advise you that I could not appear before your committee as a special representative of the Italian Chamber of Commerce (as I had previously advised the mem- bers of your committee I would), because they have presented their brief direct, and because, as a result of conversation with certain official gentlemen in Washington, I was advised that I could not appear as their representative officially anyway, as they were sub- sidized by the Italian Government. I therefore had to present a new brief myself under my own name in order to properly get before your committee. I want this committee to know I regard this brief as not my own personal views, and that is why I asked to come before you this after- noon. If it represented my own personal views, as I start off in my brief, I state that I am in favor of olive oil being absolutely free for the very obvious reasons which I cover in my brief. But I wanted this committee to know that this brief that I have presented repre- sents the opinions of practically half the importation of Italian olive oil as a result of testimony that I had taken as chairman of that com- mittee in the last three weeks. That is one point. Another point I wanted this committee to know, which certainly is important, is that I made a statement in my brief that one clause of the last bill that was passed was vicious. 1 did not mean that in a personal way. That is, I meant by that it would result viciously for the Government. That to which I had reference was the ad valorem clause in connection with the duty on olive oil. I say in my brief, and I think I can be borne out in my statement, that there are very few, if any, experts in the United States at the present time capable of deciding on the quality of olive oil. The subject of the quality of olive oil is one of the few features of olive oil that has not been given consideration by the Federal Government. For your information in to-day's market in France, Italy, and Spain, between the first and last grade of olive oil, there is a difference of some 51 cents a gallon in the price there. I contend, as 1 have expressed in my brief, as the result of con- sultations 1 have had with others that a separate, specific duty on oil containers, whether they be half-pint bottles or 5 or 50 gallon 'barrels, will result in the Government obtaining one principal feature that they are trying to obtain, outside of the revenue end, and that is to get to the consumer the best product obtainable at the least possible cost. A specific duty of 25 per cent will encourage the exportation to the l"niled States of a higher bls. 98,916 98, 758 $393. 125 499,544 341,543 323, 740 398,814 188, 493 69, 207 68.229 40. 929 95,261 54,804 92,305 45, 575 77, 259 59,725 81,950 89,814 90,814 125,911 114.882 95, 807 115,519 115,695 129,423 23,021 27, 980 39, 423 50,044 71,322 85,324 260, 880 313, 140 320.580 347.922 401 , 898 347,400 Bacon, ham, and pork: 1907 pounds.. 1908 do.... 1909 do 4,190,243 7.133,252 5, 618, 937 4,672,453 5.688.917 6,979,044 427,184 850,847 551.800 316.106 457,545 773,703 1,081,431 1,324,296 1,127,183 1,323.603 1,486,206 1,484,477 22,912 49,230 13,830 86, 405 147, 384 116,807 3,899,250 5, 599, 773 5,213.723 6,532,214 6, 678, 770 6, 580, 103 515,315 408,472 390,091 156,551 453,047 506,435 $352,514 597,365 437,969 479,096 597,882 652,321 40.426 78,720 54,958 38,508 53,033 75,863 89, 103 103,574 110, 530 137, 184 129,075 134, 625 1,730 3,390 855 6,069 11,229 7,620 145,891 221,475 193,036 296, 407 287,850 292,811 47,467 44,261 35,349 17, 545 62,165 78,169 1908 do 1909 do.... 1910 do 72, 214 61,927 72, 895 36,718 20. 388 17.510 12.040 25. 325 1910 do 1911 do 1911 do 1912 do.... 1912 do Coal: 1907 tons.. 190* do.... Lard: 1907 do 1908 do 190'J do... 1900 do 1910 do 1910 do 1911 po 13,980 23, 173 476,321 889,403 704, 583 919,200 974,458 1,015,730 030, 584 592, 013 495.009 504,552 554.397 595, 445 21,985 23, 117 32, 099 41.033 58. 349 1911 do 1912 do... 1912 do Cotton cloths: 1907 . . vards Kerosene oil: 1907 gallons.. 1908 do 190S do.,.. 1909 do.... 1909 do 1910 do.... 1910 do 1911 do... 1911 do 1912 do 1912 do.... Cottonseed oil: 1907 pounds.. 1908 do.... 1909 do Leathers: 1907 poii i Is.. 1908 do 1909 do.... 1910 do.... 1911 do.. 1910 do 1911 do 1912 do 1912 do.... Sugar: 1907 do.... Bools and shoos: 1907 pairs.. 190S do 1908 do... 1909 do 1909 .|, .... 1910 ,\( 1910 do... 1911 do 1911 di 1912... ,!, 07.808 .5, 274. 470 1912 do.... Tobacco: 1907 do Beef: 1907 pounds 190S , (i 4,749.770 4. c,i;:i. 300 1908 do... 1909 do 1: 111:1 i o I'.'lfl till'.'.'. 5.oos.333 ">. V>0. V50 5,077,404 1910 do I'.H 1 < o 1911 do... 1912 do.... 1"|J ,jn SCHEDULE A. 291 PARAGRAPH 40 FISH OILS. Furthermore, on the free list of Newfoundland is noted the fol- lowing: Flour, cottonseed oil, boracic and acetic acid, many lines of ma- chinery, hides, corn, kerosene oil, lines and twines, motor-boat engines, wheat, and many other articles, all of which are exported to Newfoundland from the United States. Mr. HARRISON. Mr. Badcock, do you believe bv reducing the duty as proposed in this bill from 8 cents to 5 cents a gallon the importations would increase only to 659,000 pounds, as we stated in our caucus copy? Mr. BADCOCK. I did not see that. Mr. HARRISON. Or do you think the imports would increase still more? Mr. BADCOCK. Yes, sir; I am quite sure they would. Mr. HARRISON. A reduction in the tariff from 8 cents to 5 cents would increase the imports far more than shown in our estimates ? Mr. BADCOCK. It would, because the chief trouble we have in the matter of this oil is adulteration, and we know for a fact that unscrupu- lous dealers, of which there are many in this country, have adulterated this oil and sold it at the same price as the imported. The tanner has no way of finding it out until he dresses his leather with it, when it is too late in many cases. Mr. LONGWORTH. I would like to know a little more about your business. Do you import oil to sell to tanners? Mr. BADCOCK. Yes, sir; we import oil to sell to tanners. Mr. LONGWORTH. At what price do you sell it ? Mr. BADCOCK. You mean the market to-day ? Mr. LONGWORTH. Yes. Mr. BADCOCK. Forty-three cents. Mr. LONGWORTH. Are you advocating that this shall be put on the free list ? Mr. BADCOCK. We are, with the help of the tanners. The tanners have asked us as importers to see what we could do to have this tariff reduced. Mr. LONGWORTH. You idea is to reduce the price at which you sell it ? Mr. BADCOCK. It certainly is. Mr. LONGWORTH. How much ? Mr. BADCOCK. To the extent of the duty, 8 cents per gallon, if the reduction be that much. Mr. LONGWORTH. How will you be any better off ? Mr. BADCOCK. We will not be any better off except we will get a very much larger trade. That is our main point. Mr. LONGWORTH. You are acting with the tanners in this 'matter ? Mr. BADCOCK. I have presented exhibits here from several of the tanners. Mr. LONGWORTH. All I want to know is why you are here. Mr. BADCOCK. These exhibits from the tanners, together with my statement, will show. The testimony of the witness was furnished in the shape of a brief signed by tlu following firms: W. & S. Job & Co., per Kobert Bad- cock, jr.; Bowring & Co., Chas. W. Bowring, Director; New York, Newfoundland & Halifax Steamship Co. (Ltd.); Harvey & Outer- 292 TABIFF HEAEINGS. PABAGBAPH 40 FISH OILS. bridge, per R. Harvey; National Oil & Supply Co., Arthur Phillips, President; Dooner & Smith Co., James J. Dooner, President; New- ark Chamois Works, F. P. Chapot, Manager; National Red Oil & Soap Co., C. P. Gulick, Treasurer; Max Hertz, per Hass; Stengel & Rothschild; National Oil Products Co., R. Bambinger, Secretary; Blanchard Bro. & Lane, by M. T. Gay, President. EXHIBIT A. [Stengel & Rothschild, tanners and manufacturers of patent enameled and fancy leather.] NEWARK, N. J., December 26, 1912. W. & S. JOB & Co., 68 Broad Street, Jfew York City. GENTLEMEN: We understand that there is to be a hearing in Washington on the 6th of January before the Ways and Means Committee regarding duties on oils and chemicals such as enter into the manufacture of leather. We are especially interested in the duties on Newfoundland cod oil, such as we have been purchasing from you. We would like very much to have you use your best efforts to have this duty reduced as much as possible. It is impossible for us to use domestic cod oil on the class of leather which we manufacture, as we have tried it over and over again without success, there being certain properties in it which makes it unsuitable for our work. We con- eider this oil in the nature of a raw material which we use in the manufacture of our leather, and have always believed that such goods as enter into the use of any product manufactured in this country should be taxed as little as possible. Furthermore there are times when the domestic catch is a failure or limited in quantity, and at such times the opportunity is used to drive prices up to the highest point. We hope you will use your best efforts to have the duty on this oil reduced, and trusting that you will meet with success, we remain, Very truly, yours, STENGEL & ROTHSCHILD. EXHIBIT B. [F. S. Walton Co., oil manufacturers, importers, exporters, and jobbers.] PHILADELPHIA, December 31, 1912. Messrs. W. & S. JOB & Co., 68 Broad Street, New York. GENTLEMEN: There are four reasons which we can cite why the duty on Newfound- land cod oil for commercial uses should be abolished, these reasons being as follows: First. It is the only pure cod oil on the market. Second. It is used by the best and largest tanners. Third. It does not conflict with a domestic cod oil, as it is greatly superior. Fourth. It would compel receivers of domestic oil to sell their oil pure, instead of it being the product of livers of several other fish, as at present. Yours, truly, F. S. WALTON Co.. GEORGE T. EDGE, Treasurer. Increase in exports United States to Newfoundland, years ending June SO, 1907 and 1912. Articles. Value. Increase. 1907 1912 Agricultural implements $228 12.761 45. 354 64.121 So'. 528 32,984 123.411 92.507 23. 021 266. 880 352.514 40.426 46.753 145. 891 42,355 103,536 $2,320 23,365 74,430 149,043 207, 507 81,078 431,832 187, 166 85,324 347.460 652. 321 75, 863 156, 653 292.811 83,911 225, 858 $2,092 10,604 29,086 84,922 121,979 48,094 308,421 94,659 62,303 80,580 299,707 35,437 119,900 136,920 41,556 122,312 Cars, carriages, and vehicles Chemicals, drugs, fives, mi'! medicines Wearing appurel Cotton manufactures (all other j Fruits and nuts Machinery Other machinery Hoots and shoes Beef, salted Bacon, hams, and pork . . . Lard Other meat and dairy product-; Refined sugar Manufactures of wood All other articles SCHEDULE A. 293 PARAGRAPH 40 FISH OILS. EXHIBIT C. (Newark Chamois Co., manufacturers of oil-tanned washable chamois leathers.] NEWARK, N. J., Januarys, 1913. Messrs. DOONER & SMITH Co., Newark, N. J. GENTLEMEN: We understand there is to be a hearing before Congress relative to a change in the duty on leather manufacturers' products, and would respectfully ask that you use your best endeavors to have the duty on Newfoundland cod oil removed entirely or reduced materially, as we firmly believe that we should have our cod oil free from duty. It is our sole tanning material in the manufacture of chamois skins. This business has met with very little success in the United States on account of the great competition we are obliged to meet from abroad. The cost of labor here has been fully three times what it is in England, France, and Germany. Thanking you for any interest you might take in this matter in our behalf, we re- main, Yours, truly, NEWARK CHAMOIS Co., Per FRANK P. CHAPOT, Manager. EXHIBIT D. MILWAUKEE, Wis., January S, 191S. BOWRING & Co., New York, N. Y. GENTLEMEN: Your letter of December 28 at hand inquiring why we use Newfound- land oil. We find this oil to be more pure and that it does not oxidize as readily as the domestic product. It penetrates the leather better and does not spew. Yours, truly, PFISTER & VOGEL LEATHER Co., JOHN W. MAPEL. EXHIBIT E. CLEVELAND, OHIO, January 4, 191S. BOWRING & Co., New York, N. Y. GENTLEMEN: Replying to yours of the 28th relative to cod oil. we wish to state that it is impossible for us to use the domestic oil, owing to its impurities. In the manufacture of patent leather it is necessary to have an oil that has a low cold test, otherwise the leather will bloom. The Payne-Aldrich tariff bill removed practically all of the duty on leather. This was done with the supposed understanding that duties would be lowered on every- thing that went into the manufacture of leather. This, however, was not done, as on some articles, namely, quebracho extract, the duty was raised. We do not believe, however, the foregoing is any argument, the only thing being that it is impossible for us to use any but Newfoundland cod oil in our business. Very truly, yours, THE CLEVELAND TANNING Co., H. N. HILL, General Manager. STATEMENT OF CAPT. N. HIBBEED, SAN FRANCISCO, CAL. Mr. HIBBEKD. Mr. Chairman and gentlemen of the committee, I am here as the representative and part owner of the Tyee Co., of San Francisco. This company is owned entirely by a number of merchants in that city, and is the pioneer concern in America to engage in catching three species of whales commonly called sulphur bottoms, finbacks, and humpbacks, which, until we commenced operations in 1908, had never been taken l>y the people of this country. Therefore, the establishment of our plant represented an entirely new American industry. 294 TAETPF HEABINGS. PABAGBAPH 4Q FISH OILS. The oil which we get from these whales is not the whale oil of com- merce, because it has no lubricating value, and therefore has to be used for a different purpose. The English and Norwegians have been engaged in this business for many years, and knowing these whales were very numerous along the Alaskan coast, after mature deliberation our company was organized and $450,000 invested in our shore station and floating plant. We were aware that our equip- ment would cost us more than double what our foreign competitor had to pay for his. As an illustration, our first whaler cost $60,000, while our competitors on Vancouver Island, about 200 miles away, only have to pay $22,000 for their steamers, which they have built for them in Norway; and hi addition to the first cost, the wages paid to our employees, including their maintenance will average $100 per month each as against $40 without maintenance by the owners of the foreign plant. But we felt confident that the duty, which amounts to practically $3 a barrel, would enable us to compete with them. Unfortunately, we found there was no sale for our product hi this country, for, as stated above, it has no lubricating value and the soap makers and tanners were afraid of it because of the odor, and we were therefore compelled to sell our oil the first year in Glasgow, Scotland, in competition with the English and Norwegian whaling companies, at a price which meant- a loss to us of $100,000 for the season's operation. All this loss was not due to the price which we could have obtained for the oil had we sold it in America at the English price plus the greater part of the duty. Some of it was caused by the fact that we were new at the business and had much to learn before we could compete successfully with our foreign com- petitors, who had had many years' experience; but we did realize that even after we had mastered the details of the business we could not hope for success until we could sell our products at home, and before we could do this it was necessary for us to educate our possi- ble customers. We therefore started m on a campaign of educa- tion, which cost us about $50,000 in money and took a great deal of care and trouble. But we finally succeeded in convincing the soap manufacturers and tanners they could use our oil as a substitute for tallow. The second year we succeeded in selling about one-half of our catch, which amounts to about 9,000 barrels per year, in this country. We did a little bettor the next year, and last year we succeeded in selling our entire output here in this country, and have therefore devel- oped an entirely new business. The past year is the first time we have made any profit, and this profit, even with the protection afforded us by the duty of 8 cents per gallon, amounted to but $9,000. Surely not an excessive return on an investment of 450,000, especially when you consider that there was nothing written off for depreciation and there was an oper- ating loss in the first three years of $150,000 in addition to our origi- nal investment. But wo have boon gradually working ahead, and two other Amer- ican concerns who have watched our progress, and who, perhaps, have not been fully posted as to the financial returns of the venture, have put in similar plants, one of which has been in operation two SCHEDULE A. 295 PARAGRAPH 40 FISH OILS. years and the other one expects to commence work next year. One of these concerns has four steamers, which were built in Seattle at a cost of $60,000 each, while their competitor, 200 miles away on the coast of Vancouver Island, is using 12 steamers built in Norway at a cost of $22,000 each; and in addition all the American concerns are importing lines and other fishing gear from Norway, paying a heavy duty thereon (which the customs regulations of this country provide for) because these articles are not manufactured and can not be bought in this country, although some of the rope manufacturers are now endeavoring to make lines which we can use and thus avoid the necessity for this outlay; and if we can continue in business there is no doubt but that the American rope manufacturers will finally suc- ceed in producing an article which will be satisfactory for our pur- poses, and thus we are indirectly helping another American industry. Now, does it seem fair or right when we have invested our money in these plants, feeling safe in doing so because the duty gave us this protection, and then had energy and pride enough to develop an en- tirely new industry, that you gentlemen should take it away from us ? Because if you reduce the duty on these oils you will absolutely destroy our investment, for we could not possibly hope to operate in competition with our foreign competitor just across the border who has such advantages in the cost of his plant and the wages paid his workmen, and thus the $60,000 a year which we are paying out for wages and provisions to Americans would be entirely lost to this country and would go to the foreign workmen in their home countries. We have just about developed markets enough for our own output, and if other American concerns come into the field we will all have to continue our campaign of education so as to have a market for our goods at home, for none of us can hope to compete with our foreign competitors while they have such an advantage in the cost of their plants and wages to their employees, and we respectfully urge you not to make it impossible for us to continue but to give us the help necessary for us to go on and build up this trade, especially in view of the fact that in doing so you are helping several American indus- tries, while on the other hand a reduction in the duty would be a benefit to the foreigner only and a handicap which would put your own countrymen out of business and mean a direct loss to American labor of $60,000 a year from this one plant. And I am convinced that the other two plants, one of which is now in operation, are in exactly the same situation, and their figures can safely be added to purs as showing the loss which must come to this country if this industry is to be wiped out, while at the same time there is no one to be helped but the foreigner, in whom I presume you are not especially interested, and whose interests you are not anxious to protect, particularly when in so doing you are working such a great hardship on a struggling industry which is trying to develop a new trade in this country . I trust that when you come to consider this question you will bear these facts in mind and give us the protection we ask for, to which I feel sure you will decide we are entitled. Thank you, gentlemen. Mr. HULL. What is the average cost of one of those plants ? Mr. HIBBERD. I know exactly what purs cost us $100,000. Mr. HULL. What proportion of that is embraced in the machinery ? 296 TARIFF HEARINGS. PARAGRAPH 40 FISH OILS. Mr. HIBBERD. That would be a very difficult question to answer. For instance, we have a very large factory or plant for reducing the blubber after it is taken off the whale and converting it into oil and converting the flesh into fertilizer and grinding the bones, and we have our whaler and a tug to go out and tow the whales into the station. I do not think I could tell you exactly the different propor- tions. Mr. HULL. Where are your materials manufactured ? Mr. HIBBERD. In this country, all except some particular parts, for instance the gun, which we use on the bow of the whaler, and our harpoons and our lines and bombs, and some other specialties which the Norwegians have developed. Mr. HULL. Is the machinery complicated in the main, or is it more or less simple ? Mr. HIBBERD. There is nothing about it different from other machinery. There are many plants which have been installed which have much more complicated machinery. Mr. HULL. You do not know about what proportion the cost of the machinery would comprise ? Mr. HIBBERD. No, Ido not know; but I could give you the detailed cost of everything. I happened to be in the East, and when these hearings were announced my partners telegraphed me and asked me to come here and state our views on the matter; so I am not very well posted as to the details. Mr. PETERS. What is the total production of your firm and of the other firms that you have referred to? Mr. HIBBERD. Our output is 9,000 barrels, and I am under the impression that theirs is about the same. Mr. PETERS. Barrels? Mr. HIBBERD. Barrels. Mr. PETERS. How much does that amount to in gallons? Mr. HIBBERD. There are about 50 gallons to a barrel, and that would make 450,000 gallons. Mr. PETERS. What proportion of the total consumption do you produce ? Mr. HIBBERD. At first we produced all that was used in this country. When we commenced, wo could not sell a barrel here. It was all shipped abroad. There may have been some shipments that I do not know anything about, but I do know that we went to all the principal users of that sort of product, and they would not touch it. There may have been some of it used in a way that I have no knowledge of, but, so far as I know, there was not any of it used. Mr. Dixox. What is the proportion of your labor cost 'to the total value of your output ? .Mr. HIBBEHD. Just about 60 'per cent. The CHAIRMAN*. That is all. Mr. IIiBBKi'.n. Thank you. BRIEF IN BEHALF OF THE BLACK HORN LEATHER CO. ( CHAMOIS MANUFACTURERS), OF GREAT BEND, PA. ilack I lorn Leather Co. is interested in the maintenance of the existing duty on these oils. It is a purchaser and consumer of fish SCHEDULE A. 297 PARAGRAPH 40 FISH OILS. and cod oils which are required in the production of chamois leather; and is a producer of sod oil, moellon, and degras, as a necessary sequence in the oil tannage of chamois. All these oils under the exist- ing tariff carry a duty of 8 cents per gallon. Chamois leather tannage requires fish or cod oil. Cod oil oxidizes a little more slowly than otner fish oils, and hence is less likely to burn skins in tanning, and for that reason it is extensively used in all oil tannage. Newfoundland cod oil, whicli is the chief competitor of the domestic cod oil, is controlled almost exclusively by London importing houses whose American representative has appeared before your committee in advocacy of placing Newfoundland cod oil on the free list. It is admitted that Newfoundland cod oil has maintained a more uniform standard of quality than has the domestic oil, but there has been a marked improvement in domestic oil in the last few years, with result that the Newfoundland cod oil has fallen off hi importa- tion. 1 It was urged before the committee by the representative of the English importing houses that Newfoundland cod oil, because of its acknowledged superiority, did not come in competition with domestic productions. This statement is in error. The improvement in the quality of the domestic cod oil in the last few years has been marked. Mr. Orth, of Harden, Orth & Hastings, of Boston, large distributors of domestic cod and fish oil, is now offering domestic cod oil which he guarantees to be equal to any Newfoundland cod oil on the market, and the experience of the Black Horn Leather Co. in- the use of domestic cod oil has been exceedingly satisfactory. The reason the Black Horn Leather Co. as purchasers and consumers oppose the removal or low- ering the present duty on cod and fish oil rests in the belief that such removal would dimmish, if not eliminate, the domestic production, and then with no competition from the domestic article the control of prices of Newfoundland cod oil would be lodged with the English importers. If their suggestion should be adopted to remove all duty from Newfoundland cod oil and retain it on any other fish oils the importers' control would be complete The National Association of Tanners, who appeared before this committee through Mr. Vogel, made no request whatever to have the duty on cod oil removed. On the contrary, the firm of Drueding Bros. & Co. and the Black Horn Leather Co., manufacturing substan- tially all of the chamois made in the United States, do not favor the lowering of the existing duty on fish and cod oils. Inasmuch as sod oil, moellon, and degras are necessary products of oil tannage, and enter so largely into the financial side of the sale of oil-tannage products, it is necessary to ask for thorn the same protection that is accorded to cod and fish oils. Chamois production in the United States has not as yet been developed to any great extent, and only the two concerns mentioned have thus far engaged in the manufacture of chamois leather, and they require, hi order that they may continue in business, that their products be protected against the well-established foreign producers. 1 See brief of Mr. Badcock in behalf of W. & S. Job Co.. London. 298 TAKIFP HEARINGS. PABAGBAPH 40 FISH OILS. The Black Horn Leather Co., with most of the other oil-tannage people, believe that the best and proper method of pioviding them- selves with an assured and safe supply of cod and fish oil is to develop the American industry. They know of no reason why under the present duty domestic cod oil will not continue to improve in quality. There are no mechanical or local reasons why such improvement should not take place until the American product becomes as uniform as the Newfoundland product, and they are content to bear any burden, if it be considered a burden, in the way of a reasonable duty In order to aid the American fisherman to establish himself where he will be safe from the destructive competition of foreign fishers and English importers. We respectfully urge the retention of the 8-cent duty on all fish and cod oil, and on sod oil, moellon, and degras. NOTE. The term "degras" has frequently been limited in legis- lative measures to wool grease, whereas it has as frequently in trade been applied to oils resultant from oil tannage. BLACK HORN LEATHER Co.. NORMAN H. PARKE, General Manager. ADDITIONAL BRIEF OF W. & S. JOB & CO. Objection is made to statements by Black Horn Leather Co. through brief submitted and presented by Norman H. Parke, general manager, to revising duties in Schedule A, paragraph No. 40. For the reason that said statements in brief of Black Horn Leather Co. are not correct and the existing conditions are not as stated, and further, that com- ments thereon are inclined to mislead, rather than place facts before this committee. First. Newfoundland cod oil is not a competitor of domestic cod oil, as they are materially different, and proof of this statement is con- firmed by exhibits contained in brief of W. & S. Job & Co. from direct users. Second. Newfoundland cod oil is not controlled by any London importers, nor has any London house a branch office in United States for sale of cod oil, and the statement made to this effect in brief of Black Horn Leather Co. is in error. Third. The result of the falling off in the importations is due solely to high prices and not to any improvement in the manufacture of domestic cod oil. Fourth. Reduction or removal of the duty on cod oil will not eliminate or diminish the domestic production for the reason that cod oil is a by-product of the codfish, and it is only reasonable to assume that the American fishermen will not forsake the fishing industry if this duty is removed. Fifth. Importers do not control the price of Newfoundland cod oil, they never did, have never tried, and never shall be able to accom- plish this, as there is as much competition in the primary market as in the selling market, moreover, some American firms have their repre- sentatives located in Newfoundland who buy direct from the fish- ermen, and this in itself establishes the fact that the control of the market is not in the hands of the importers. SCHEDULE A. 299 PARAGRAPH 40 FISH OILS. Sixth. The National Association of Tanners, who appeared before the committee, through Mr. August Vogel, of Milwaukee, did make mention of the duty on this oil and recommended readjustment of the duty on cod oil. (See brief of August Vogel.) Further, the attached exhibit from Mr. Vpgel's firm clearly explains the position and empha- sizes the fact that it should be free of duty and that his firm (Pnster & Vogel Leather Co.) find the oil more pure, it does not oxidize as readily as domestic, it penetrates the leather better, and does not spew. Further, the Cleveland Tanning Co. state it is impossible for them to use anything but the Newfoundland cod oil and will not use domestic, owing to its impurities. (See letters under statement of Robert Badcook, jr., representing W. & S. Job & Co., p. 288.) Fur- ther, Stengel & Rothschild state it is impossible for them to use do- mestic cod oil, and they have tried it over and over again without success, there being certain properties in it which makes it unsuitable to their work. (See letter.) The Newark Chamois Works, manufac- turers exclusively of chamois and competitors of Black Horn Leather Co., state it is their sole tanning material and that they should have their cod oil free of duty. (See letter.) Seventh. It is further stated in brief of Black Horn Leather Co. that, together with Drueding Bros. & Co., they manufacture sub- stantially all the chamois made in United States. Eighth. It is pointed out to your committee that no statement or signature of Drueding Bros. & Co. substantiating brief of Black Horn Leather Co. showing authority for quoting this firm is found in brief of Black Horn Leather Co. Ninth. The tanners, to the extent of 90 per cent or more, are in favor of the readjustment of this duty, and the protest of only one concern should not have any adverse bearing as to the retention of this duty. (See brief of August Vogel, representing National Asso- ciation of Leather Manufacturers.) Tenth. The Italian Chamber of Commerce in their brief advocate the relief of fiscal burdens from all tanning materials, one of which pure cod oil plays a most important part, as manufacturers of certain leathers must use it. PARAGRAPH 41. Opium, crude or unmanufactured, and not adulterated, containing nine per centum and over of morphia, one dollar and fifty cents per pound ; opium of the same composition, dried, powdered, or otherwise advanced beyond the condition of crude or unmanufactured, two dollars per pound; morphia or morphine, sulphate of, and all- alkaloids of opium, and salts and esters thereof, one dollar and fifty cents per ounce; cocaine, ecgonine, and all salts and derivatives of the same, one dollar and fifty cents per ounce; coca leaves, five cents per pound; aqueous extract of opium, for medicinal uses, and tinc- ture of, as laudanum, and other liquid preparations of opium, not specially provided for in this section, forty per centum ad valorem ; opium containing less than nine per centum of morphia, six dollars per pound; but preparations of opium deposited in bonded warehouses shall not be removed therefrom without payment of duties, and such duties shall not be refunded: Pro- vided, That nothing herein contained shall be so construed as to repeal or in any manner impair or affect the provisions of an act entitled "An act to prohibit the importation and use of opium for other than medicinal pur- poses," approved February ninth, nineteen hundred and nine. For opium, etc., see Merck & Co., page 30; Mallinckrodt Chemical Works, page 49. 300 TARIFF HEARINGS. PARAGRAPH 42 BABYTES. PARAGRAPH 42. Baryta, sulphate of, or barytes, including barytes earth, unmanufac- tured, one dollar and fifty cents per ton; manufactured, five dollars and twenty-five cents per ton. BARYTES. STATEMENT OF H. J. KREBS, PRESIDENT OF THE KREBS PIGMENT & CHEMICAL CO. Will you give your name and address to the stenographer, please ? Mr. KREBS. H. J. Krebs, president of the Krebs Pigment & Chem- ical Co. The CHAIRMAN. Mr. Krebs, we have allowed you 15 minutes. Mr. KREBS. I beg your pardon, sir. The CHAIRMAN. I say we have allowed you 15 minutes hi which to make your statement. Mr. KREBS. Yes; I will be brief. On behalf of the Krebs Pigment & Chemical Co., of Newport, Del. ; the Grasselli Chemical Co., of Cleveland, Ohio; and the Beckton Chem- ical Co., of Newark, N. J., who are among the principal lithopone manufacturers of this country, the following brief is submitted, referring to paragraph 55, lithopone, and paragraph 42, baryta: The principal raw materials used in producing lithopone are crude baryta and zinc ores, or other forms of zinc, although zinc ore is naturally the basic material. In addition to the above, numerous other chemicals are also required, the costs of which are higher in this country than abroad. Also in considering the crude materials we call your special attention to baryta, on which there is now a duty of $1.50 per ton, and which we are obliged to import principally from Germany, owing to there being no reliable home supply; also zinc ores, on which a varying duty must be paid, accord- ing to the zinc contents. Lithopone is purely a chemical product which contains barium sulphate as a com- ponent. This barium sulphate must not be confounded with native ground baryta, which is also used in the paint trade. Lithopone is extensively used in the manufac- ture of flat coat paints, linoleum, oilcloth, and the rubber industries. Labor is a factor which must be considered in the manufacture of lithopone, and we earnestly request your consideration of this item. For the comparative differences) existing here and abroad we refer you to House Report No. 326, pages 305 and 370. Xo conditions have arisen since the enactment of the present rate to warrant any change in the rate of duty and we therefore urge that no change be made, and that the existing rate of 1J cents per pound be continued. It is suggested to place an ad valorem duty instead of a specific rate, and we earnestly urge your careful considera- tion before allowing such a change. With a specific rate of duty both the manufactur- ers and consumers know exactly what rate must be paid, whereas an ad valorem rate open? the question to endless discussion and consequent annoyance on account of the continually fluctuating change in the selling prices both here and abroad. There was imported into this country during the year ending June, 1911 (notwith- standing the present rate of 1} cents per pound), 5,409,520 pounds of lithopone. Special reference is made to this fact to show that even under the present rate of 1J cents per pound the foreign manufacturers, especially the German^, are able to com- pete successfully in this country, and we believe that should any reductions be made in the present rate it will seriously affect our home production. It is a well-known facMhat the markets of this country are often used as a dumping ground for surplus foreign stocks, especially from Germany, and we further feel that any reduction in the present rate will only afford foreign manufacturers a better opportunity to demoralize our home markets at the expense of the industry in this country and with the natural disastrous effect on the labor employed. In view of the foregoing we earnestly request that the present rate of 1| cents per pound be continued. The CHAIRMAN'. Does any member of the committee desire to ask the witness any questions? That is all. SCHEDULE A. 301 PARAGRAPH 42 BARYTES. STATEMENT OF WM. A. BTTDDECKE, PRESIDENT OF THE POINT MILLING & MANUFACTURING CO., MINERAL POINT, MO. We venture to submit to you the following brief statement of facts in relation to the production of barytes in this country. This material is mined almost entirely in the Southern States, there being operations in Missouri, Kentucky, Tennessee, North and South Carolina, Georgia, and Virginia. As you know, in Wash- ington County, Mo., it is the principal industry, and over 50 per cent of the barytes mined in the united States comes from Washington County. The employees there do little else; the men work in the mines and their families clean and prepare the ore for factory uses. This company has a factory at Mineral Point, Mo., right at the mines and employs a full force of men in the production of this material for market, the operations being of a character that requires the factory to be run night and day, or to shut down completely. The competition on this material comes almost exclusively from Germany, where there are very large mines, and with their cheap labor it is possible to produce at a lower price than we can here hi this country under present conditions. We attach herewith a letter recently received by one of our friends in East St. Louis, and inclosing samples, which we are sending to you hi the original covers, and from these is evident the competition which exists in this industry. We would say further that 75 per cent of the consumption of ba- rytes is in the Atlantic seaboard cities, and for years the price on the American product in New York, Philadelphia, and Boston has been at a figure that the German producers were willing to accept, and it has been a constant effort of the American producers to meet this price. You will note that with the letter from Holland is attached a sheet showing the prices worked out into tons of 2,000 pounds, adding the duty as at present, and showing the net price, delivered Atlantic ports, as per quotation. Now our situation is as follows: The average price for the tiff, which is the local name for barytes ore in Washington County, is $7 per net ton at the railroad to which must be added a small loading charge and freight to our factory, averaging 30 cents per ton. The ore in manufacturing shows a loss of 5 per cent, or 35 cents per ton. The freight on the manufactured product from Mineral Point to New York is $4.65 per ton, A fair estimate of cost is $5.50 per ton, mak- ing $17.80 per ton delievered New York as against $17.90 on the foreign product. This shows an extremely small margin, as at pres- ent, and on that we are working. To reduce the tariff means that every ton of foreign ore that comes into this country does not simply mean ore ton more used but dis- places a ton of American mined and manufactured goods, and every ton means the employment of at least six men in the mining, hauling, and manufacturing. We therefore ask you to use your good offices to prevent damage to an industry that while not large it is a very valuable one and can be made still larger if properly protected, and on the other hand there is no demand made by any consumer of this material for a reduction in tariff, and that the only real benefit hi 302 TARIFF HEARINGS. PARAGRAPH 42 BARYTES. having the tariff reduced will be to some importing brokers at the seaboard. We would also state that the mining and manufacturing of this material is entirely free from any consolidation or understanding; that competition is very active, there being a greater factory produc- tion than the consumption requires; also that the present duty is not prohibitive, as import records show that every year a considerable quantity of the German product is brought to this country. We would also suggest that the railroad companies recognize the foreign competition, and have been willing to maintain a rate of freight which works out about 40 cents per ton per mile, and is as low as we can hope to obtain, and, unlike the German competition, we have no water route from this section to the Atlantic seaboard. We therefore trust you will do what you can to help the producers in this section, and prevent the mining and manufacturing of this material being obliterated by bringing into this country more of the foreign production. Yours, very truly, POINT MILLING & MANUFACTURING Co., WM. A. BUDDECKE, President. [Inclosure.] ROTTERDAM, January 9, 1913. Messrs. GEO. S. MEPHAM & Co., East St. Louis, III. DEAR SIRS: We have pleasure in drawing your attention to a product for which we are very well posted for export to your country and we will be glad if you will give the present your very best attention. This product is heavy spar ; or barytes. We know that a fair amount of business is already done in this product on your side. They have up to this date been buying from Hamburg, but as the sources of supply are situated nearer to Rotterdam, we are in a position to make you very advantageous offers for shipment via our port, and we trust that you will not fail to avail yourselves of this opportunity. The largest use of the above-named articles is made by manufacturers of lithophon, white lead, and carpet manufacturers. On account of its very heavy weight, it serves to add weight to the products in which it is mixed. It is also used by various other chemical works. For your guidance we have sent you a sample of this product and we can but advise you to follow up the sale of this stuff which \ve know to have already found a market in the States. We beg to quote without engagement: Price per 1,000 kilos (2,200 pounds) c. i. /., at New York, Boston, Philadelphia, and Baltimore. Value per ton (United States currency). 1 Grade. In bags. In casks. Includ- Without ing duty duty. of $5.25 per ton. 1 Mark*. Marks. No. 1... 58 60 $12 65 $17 90 No. 2... 48 50 10 47 15 72 No. 3 45 47 9 82 15 07 No. 4 41 43 8.94 14.19 1 Ton of 2,000 pounds. SCHEDULE A. 303 PARAGRAPH 44 BLANC FIXE. This heavy spar contains 97 to 98 per cent BaS0 4 . The price, in bags is charged in the gross weight; when packed in casks an allow- ance of 3 per cent is made for tare on the gross weight. Our conditions of payment are net cash against documents, and we will be glad to hear from you in regard to the above offer. Meantime we are, dear sir, yours, truly, RUEB & GLEICHMAN. PARAGRAPH 43. Blues, such as Berlin, Prussian, Chinese, and all others, containing ferrocyanide of iron, in pulp, dry or ground, in or mixed with oil or water, eight cents per pound. See Arthur Somers, pages 335, 344. PARAGRAPH 44. Blanc fixe, or artificial sulphate of barytes, and satin white, or artificial sulphate of lime, one-half of one cent per pound. BLANC FIXE. BRIEF OF T. S. TODD & CO., CUSTOMHOUSE BROKERS AND FORWARDERS, NEW YORK CITY. NEW YORK, January 4, 191S. WAYS AND MEANS COMMITTEE, Washington, D. C. GENTLEMEN: Blanc fixe and satin white are made in this country from a foreign raw material not found here. The price of blanc fixe during the past 10 years has been reduced from $55 to $39 per ton. The imports or about 6,000,000 pounds amount to about 50 per cent of the total consumption, therefore quite removed from a monopoly. The present duty is one-half cent per pound and provided for hi paragraph 44. Blanc fixe and satin white are made from a natural product known as witherite spar, found principally in England, although other sources of supply are found in Germany; this material is imported in the rough state from the mine in bulk, but not in sufficient quantity to admit of any reduction hi the ocean freight, so that the raw mate- rial and the finished article, blanc fixe, pays practically the same freight. This raw material goes through an elaborate process of manufacture, and is reduced to its commercial product by grinding and successive treatment with muriatic acid and sulphuric acid, both of which acids cost considerably more in this country than they do abroad; as an illustration, in England muriatic acid is sold at 70 to 75 cents per 100 pounds, as against $1.20 to $1.25 per 100 pounds here. In Germany sulphuric acid can be purchased at 40 cents per 100 pounds, as against 80 to 85 cents per 100 pounds here. Actual production figures taken from our manufacturing records show the following: Cost of raw material, $19.50 per ton; labor, $7 per ton; acids and treatment, $7.50 per ton; packing, $2.50 per ton; total, $36.50 per ton; and the finished material sells for from $39 to $40per ton. In House bill 20182, paragraph 56, provision is made for duty on blanc fixe and satin white at one-fourth cent per pound, equivalent 304 TABJFF HEARINGS. PARAGRAPH 45 LAMPBLACK. to $5.60 per English ton of 2,240 pounds; the price of blanc fixe in England is 5 per ton, ocean freight 25s. per ton, total, $36 per ton, or $1.61 per 100 pounds, which is less than the American cost of production. The present duty of one-half cent per pound does not admit or any abnormal profit to the manufacturer, the above figures indicating it to be less than 7J per. cent, from which it is manifest that a duty of one-fourth cent per pound under present conditions, under which we are entirely dependent on England and Germany for our raw material, would force the American manufacturer to discontinue its production. The present duty has been in force since 1897, and the American producer has voluntarily reduced his cost to the consumer 30 per cent, which should commend him to your committee as justly worthy of consideration in fixing a rate of duty which will enable him to con- tinue a business representing a very considerable amount of labor and capital. We have the honor to be, yours, respectfully, T. S. TODD, For Providence Drysalters Co., Providence, R. 1. JOHN D. LEWIS, Providence, R. I. PARAGRAPH 45. Black, made from bone, ivory, or vegetable substance, by whatever name known, including boneblack and lampblack, dry or ground in oil or water, twenty-five per centum ad valorem. LAMPBLACK. BKIEF SUBMITTED BY WILCKES, MARTIN WILCKES CO., NEW YORK CITY. Brief appealing on the reduction of the duty on lampblack from 25 per cent to 15 per cent under report on Schedule A, chemicals, oils, and paints. (1) Labor. Germany is the largest producer of lampblack in the world, and their wages are from 50 per cent to 75 per cent lower in that country than they are here. For instance, our common laborers get- $2 a day, and our cooperers get $3 a day, and our foremen get $20 per week, as against the German wages for a common laborer of 3 marks, which equals 75 cents, 4 marks, which equals $1, for cooperers, and 38 to 40 marks a week, which equal $9.50 to $10 for foremen. (2) Raw material. Germany is also the largest producers of coal tar and coal-tar products, which are the base of the raw materials for the manufacture of lampblacks. They therefore have cheaper coal tar and coal-tar products than the American manufacturers. (3) Marketing the product. American manufacturers have to de- pend on the American market exclusively, as not a pound can be sold outside of the United States on account of the German competition. They all have the South American trade, for the reason that they are not only in a position to produce cheaper, but they transport their lampblack at ridiculously low-ocean freights right to South America SCHEDULE A. 305 PARAGRAPH 46 LAMPBLACK. in their own bottoms. The same holds true in Russia, England, and Austria. (4) No change can be made in the tariff without injuring to some extent the American industry. (5) We are perfectly familiar with the above-mentioned facts for the reason that we are well posted on manufacturing conditions on the other side. (6) The Germans can deliver lampblack here on the basis of only a 15 per cent duty at a lower price than the goods can be manufactured for in this country. We would be glad to give exact figures proving our contention if you will give us an opportunity. (7) The evidence submitted is so clear, however, when you take into consideration the selling price of lampblack in this market, which to-day is as low as 2 cents a pound for the majority of it, as against the tremendous advantage which the Germans have in their labor and raw materials that very little further argument or figures is necessary. (8) The Germans are exporting lampblack to practically every country where there is a market for it, whereas there is not a pound of lampblack exported from this country to any point. (9) The 25 per cent duty barely kept them out of this market which they have had their eyes on for years. (10) You will see from the knowledge which the Ways and Means Committee already have on the raw material and the labor condition and the price at wlu'ch the majority of lampblack sells in this market that the duty should not be reduced from 25 per cent. (11) Please do not get this article confused with carbon gas black which is all produced in this country and exported abroad nor ivory, bone, or drop blacks. (12) Of course, these blacks are all made from entirely different raw materials, viz, carbon gas black from natural gas, and the other blacks from bone and vegetable matter, and they can not, any of them, be used for the same purpose as lampblack. Respectfully submitted. WILCKES, MARTIN WILCKES Co., By L. MARTIN. BRIEF OF H. B. CARPENTER, OF THE LISTERS A. C. WORKS, NEWARK, N. J. NEWARK, N. J., January 17, 1913. The Chairman. Hon. BOIES PENROSE, and MEMBERS OF THE FINANCE COMMITTEE, V. S. Senate, Washington, D. C. GENTLEMEN: We respectfully urge upon you to consider carefully the question of removing the present auty from "animal charcoal*' and pray you to leave it undisturbed, as serious consequences are likely to result to many thousands of persons whose labor and living are dependent upon the production of this article. 78959 VOL 113 20 306 TARIFF HEARINGS. PARAGRAPH 45 LAMPBLACK. "Bone black," "animal charcoal," or "ivory black" is made from bones and is used for decolorizing purposes by sugar refiners, oil re- finers, blacking manufacturers, and others. The collection of raw stock is a slow and difficult matter in this country, as labor will not engage in it without being paid much higher price than in foreign countries. The collection of bones furnishes occupation for thousands of per- sons. Every town of any size has one or more men engaged in the collection of bones, which are shipped to the nearest manufacturers. The following statement shows the wages here and abroad: Under conditions abroad, labor is paid as follows: Common labor, $6 per week; skilled labor, $7.50 per week; while in this country the rates are, common labor, $10 per week; skilled labor, $12 per week, which is equivalent to 66 per cent and 60 per cent, respectively, in favor of American workmen. Of the total expense of manufacturing bone black more than 50 per cent is labor. Bones being refuse, their value arises from the labor employed in collecting, handling, and conveying to the different factories. Removal of the duty from bone black will result in the reduction of the price of bones, which must be borne by the laborers engaged in the collection and sale of bones. For the period of eight years ending December 31, 1911, the profit to the Listers Works in the manufacture of bone black shows an aver- age of 0.09-54/1 00 per cent on the gross sales. For a manufacturing business employing a large amount of capital it would appear that this is a small profit. If the duty is removed the profit will un- doubtedly disappear altogether, as sugar refiners are the principal users in this country, and the duty on bone black, such as they use, as' at present levied, would be from $12 to $13 per ton. The profits of 0.09-54/100 per cent represent less than $5 per ton of product, therefore, it is self-evident that the bone-black business will be de- stroyed if the duty is removed and foreign competition allowed with- out protection in this country. The business of the Listers Works in bone black has decreased about 33 per cent during the past eight years as compared with the years 1898 and 1894, and if the duty is removed will be wiped out entirely, thus depriving a large number of employees in the bone- black works of their livelihood and leaving a larger number of bone gatherers through the country with no employment. We therefore pray that your honorable committee will carefully reconsider your action and permit the duty on "bone charcoal" to remain undisturbed and as at present provided. Very respectfully, yours, (Signed) LISTERS A. C. WORKS, By J. F. KEHOE, President. SCHEDULE A. 307 PARAGRAPHS 46-47 DRY COLORS. PARAGRAPH 46. Chrome yellow, chrome green, and all other chromium colors in the manu- facture of which lead and bichromate of potash or soda are used, in pulp, dry, or ground in or mixed with oil or water, four and three-eighths cents per pound. PARAGRAPH 47. Ocher and ochery earths, sienna and sienna earths, and umber and umber earths, not specially provided for in this section, when crude or not powdered, washed, or pulverized, one-eighth of one cent per pound ; if powdered, washed, or pulverized, three-eighths of one cent per pound; if ground in oil or water, per cent per pound. For sienna earths, see Italian Chamber of Commerce, page 111. DRY COLORS. BRIEF OF C. K. WILLIAMS & CO., OF EASTON, PA., ON DRY COLORS AND MINERAL FILLERS. C. K. WILLIAMS & Co., Easton, Pa., January 6, 1913. Hon. A.^IITCHELL PALMER, House of Representatives, Washington, D. C. DEAR SIR: As manufacturers of dry colors and mineral fillers, we wish to refute articles covered by paragraphs Nos. 47 and 56 of pres- ent tariff. Venetian red, red oxides, mortar colors, ocher, umbers, and siennas are largely produced from the natural resources of our land. The labor costs commence from the time they are first moved from the earth, and constitute fully 80 per cent of the cost of the finished product. From our knowledge of frequent visits to the mines and works abroad, with which we compete, can say that the cost of labor abroad for this kind of work is less than one-half what it is in the United States. Thus the present duty of 30 per cent is not excessive and does not prevent these products being imported in large propor- tions; and we earnestly request that you lend your support to the maintenance of present tariff applying to them. As you know, this is an important industry in Pennsylvania, especially in your district, and needs the protection. Very truly, yours, C. K. WILLIAMS & Co., C. K. WILLIAMS, Treasurer. BRIEF OF F. A. REICHARD, NEW YORK, N. Y. NEW YORK, January 4, 1913. Hon. OSCAR W. UNDERWOOD, Oiairman Committee on Ways and Means, House of Representatives, Washington, D. C. SIR: We wish to place before you a few facts regarding the tariff on those dry colors in which we are particularly experienced through importation for the past 60 } 7 ears. Ochers, umbers, and siennas (covered by par. 47, customs tariff act of Aug. 5, 1909). There are no qualities suitable for paint manufacturers, which branch of the countrj 7 's industries is the largest user of these colors produced in this country. It is readily apparent, therefore, that three-eighths cent per pound duty is unjust, because the ultimate consumer is taxed with this unfair duty. So long as 308 TABIFF HEARINGS. PABAGBAPHS 46-47 DBY COLOBS. suitable quantities are not produced here, we think the manufac- turer and ultimate consumer should receive the benefit of free entry. The few American mines produce vastly inferior grades and really do not enter into competition with the imported products to any appreciable degree. . We would refer you to a very, comprehensive brier submitted to the Committee on Ways and Means of the Sixtieth Congress, which appears on pages 413-452 of the publication "Tariff Hearings," Six- tieth Congress, Schedule A. This brief goes into greater detail than we do here, and also gives you the opinions of many leading paint makers on these items. Oxide of iron (Covered by -par. 56 customs tariff act of Aug. 5, 1909) . There are two classes, natural, which is mined, and artificial, which is made by the calcination of copperas. These natural oxides are in exactly the same position as ochers, umbers, and siennas the qualities mined here are so greatly inf erior to those produced abroad that it seems to us a shame to tax the American consumer 30 per cent by the American consumer we mean the entire population of the country, for every person is a more or less user of paint for the benefit of a few firms engaged in the production of this material. It is recognized bv the trade that the present duty of 30 per cent on the artificial oxides is inequitable particularly on the lower grades. Copperas is plentiful in this country and we believe pur- chasable at a much lower price than in England, which country is the acknowledged producer of the best qualities of red oxide. It does not seem right to us that the hundreds, nay thousands, of users of copperas red oxide in this country should be compelled to stand a tax of 30 per cent for the benefit of to the best of our knowledge three manufacturers. We would suggest a rate of 15 per cent ad valorem, which we are sure would amply protect the three American makers and vastly benefit the thousands of consumers. The brief mentioned above also treats of these items in greater detail. While on this red oxide subject we want to call your attention to a grievous wrong perpetrated under the present tariff: There is a crude oxide of iron mined abroad and well known to the trade under the caption of "Persian Gulf red" this is largely used by paint makers. It is being imported by one house, whom the trade believes to have the sole agency, at a rate of 15 cents per ton duty, although the tariff specifically provides that all colors, whether crude or powdered, should pay 30 per cent. This importing firm brings it in under the '' Iron ore for smelting purposes" clause, which you can readily see is entirely wrong because every particle of it is used as a coloring agent 01- paint. Now, to further accentuate the injustice, other iron ores are compelled to pay a 30 per cent duty. As both classes go for the same purpose, we are sure you will agree with our contention that the crude iron oxide designated herein as Persian Gulf should pay the 30 per cent duty. In order to eliminate such an unjust discrimination in the tariff' which your committee will draft, we respectfully suggest that you specifically provide for occurrences of this nature this can easily be done by specifying that all crude iron oxides when intended for use as a paint or color should pay the rate of duty which your SCHEDULE A. 309 PARAGRAPHS 46-47 DRY COLORS. . committee thinks just. A proviso of this nature will prevent dis- crimination in favor of certain importers. Principal uses of ochers and oxides of iron. These colors are used principally in the cheaper classes of paints mixed paints, barn paints, freight-car paints, structural paints, etc., and therefore you can readily see that a duty on these items materially affects the selling price to the American consumer of a necessity such as the paints described have become. Lead products (covered by par. 48, orange mineral; 49, red lead- customs tariff act of Aug. 5, 1909). We speak only of orange mineral and red lead. The tariff on these items is exorbitant and seems to have been cre- ated solely to benefit the National Lead Co. the so-called Lead Trust. There is no reason for the existence of separate duties on these items orange mineral is only a high grade of red lead. The exist- ence of distinct duties renders it easy for the entering of the superior red lead (orange mineral) at the lower duty the red-lead duty. One tariff on these items would render this impossible. We firmly believe a duty of If cents per pound on red lead and orange mineral would be ample. Such a duty would take excellent care of the Lead Trust and still benefit the consumer. A reference to the brief mentioned above will give you further information on these items. Ultramarine Hue (covered by par. 50, customs tariff act of Aug. 5, 1909). This is another product very largely used by paint manu- facturers, paper manufacturers, and several other industries which is in the hands of a trust and which is protected to a greater extent than it is rightfully entitled. We would refer you to pages 413-452 of the above-mentioned pub- lication which will give you full information as to what large con- sumers think is a proper duty. We also wish to refer you to pages 459 to 468 of the publication mentioned herein which will prove conclusively the absolute monop- oly enjoyed by the Ultramarine Trust. We can not urge you too strongly to provide a duty on ultramarine blue, which will permit of importation and thus break the monopoly in this country. Such a procedure would greatly benefit many indus- tries employing thousands upon thousands of workmen, because free competition in ultramarine blue would then be enjoyed by the con- sumers. Talc, sulphate of lime, and china clay (covered by pars. 481, talc; 88, sulphate of lime; 90, china clay, customs tariff act of Aug. 5, 1909). We would refer you to pages 413-452 of the publication hitherto mentioned. Talc pays 20 per cent duty as an article not specifically provided for. We might add that there is no talc mined in this country equal to that which is mined abroad, and the retaining of a tariff upon an article placed such as this entails considerable hardship upon the manufacturers whose needs demand the better qu ah' ties. The same is true of sulphate of lime and china clay. 310 TABIFP HEADINGS. PARAGRAPH 50 ULTRAMARINE BLUE. We would respectfully suggest a duty of, say, 5 per cent upon talc; this would greatly benefit the consumers and would very likely increase revenue. We will be very glad to advise you upon any points not mentioned herein upon which you desire information, for it is our one desire to place in the possession of your committee true facts regarding the tariff situation upon those items with which we are acquainted. Respectfully, F. A. REICHARD. By J. W. BOSSERT. PARAGRAPH 48. Orange mineral, three and one-fourth cents per pound. See F. A. Reichard, page 309. PARAGRAPH 49. Red lead, two and five-eighths cents per pound. See F. A. Reichard, page 309. PARAGRAPH 50. Ultramarine blue, whether dry, in pulp, or mixed with water, and wash blue containing ultramarine, three cents per pound. See F. A. Reichard, page 309. ULTRAMARINE BLUE. BRIEF OF THE HELLER & MERZ CO., ON ULTRAMARINE BLUE. NEWARK, N. J., January 3, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Committee on Ways and Means, Washington, D. C.: We wish to submit to you and your committee the following facts for consideration in deciding on the duty to be put on "Ultramarine blue, * * and wash blue containing ultramarine," paragraph 50, Schedule A. The duty on these items under the Payne- Aldrich Act is 3 cents per pound, specific. In filing with you our protest against any change we will discuss the subject under three heads: (1) The duty should be specific, and not ad valorem. (2) The production of maximum revenue. (3) Relations of wages paid in, and duties levied by, the United States compared with wages paid in, and duties levied by, foreign countries. THE DUTY SHOULD BE SPECIFIC, AND NOT AD VALOREM. Ultramarine is used in paints, oil enamels, printers' inks, paper making, wash blue, and for other purposes. Each trade requires its own speciality, and the prices vary between very wide limits. The external appearance, and even the chemical analysis, gives no clue to its adaptability for a given use. It is therefore apparent that an ad valorem duty, involving an appraisal, is uncertain, unreliable, and fraught with difficulties in application. SCHEDULE A. 311 PARAGRAPH 50 ULTRAMARINE BLUE. THE PRODUCTION OF MAXIMUM REVENUE. The caucus print, published in connection with H. R. 20182, shows that the imports of ultramarine have steadily increased since 1905. The slight falling off in 1911, as compared with 1910, when 709,726 pounds were imported, is no more than one carload, which was undoubtedly compensated for in 1912. Following the statistics further back, we find that the imports in 1900 were estimated at 350,000 pounds per year, and 1898 at 275,000 pounds per year, showing that the imports have increased 250 per cent in a period of 13 years. A further reduction of the duty will result in an increased impor- tation expressed in pounds. It is not probable, however, that the increased importations, under a reduced duty, will be sufficient to maintain the revenue collected in 1910 and 1911. In fact, the caucus print shows that in the estimate of its compilers the revenue will fall 30 per cent under an ad valorem duty of 20 per cent and a 2-cent minimum. AMERICAN WAGES AND DUTIES COMPARED WITH EUROPEAN WAGES AND DUTIES. Our unskilled and semiskilled labor is paid from $10 to $15 per week. Skilled labor is paid from $3 to $4 per day, or $18 to $24 per week. German laborers in ultramarine factories are paid but 50 per cent of the American wages. French laborers in ultramarine factories are paid 63 cents per day, or 37 per cent of the lowest American wages. Belgian laborers in ultramarine factories are paid 43 cents per day, or 25 per cent of the American wages. The duty levied on ultramarine under the German tariff law, though but 15 marks per 100 kilos, is prohibitive of imports into that country. Official statistics show that the German imports are less than 1 per cent of the German production of ultramarine. The French manufacturer has the benefit of a protective duty of 30 francs per 100 kilos, or 2f cents per pound. In view of the protective duties levied by European countries, export from America into those countries is impossible ; in view of the wage difference between American and European countries, it is impossible for the American producer to send ultramarine even into free-trade countries in competition with France, Germany, and Belgium. The American employer pays his workmen from two to four times as much as is earned by the European laborer. We trust that the duty you will see fit to put on our products will not place the American manufacturer of ultramarine in the position to make him choose between conceding his market to the foreign manufacturer by going out of business, or offering an American workman the European wage scale. Respectfully, THE HELLER & MERZ Co., By EUGENE MERZ, Treasurer. 312 TARIFF HEARINGS. PABAOBAPH 61 VABNISHES. PARAGRAPH 51. Varnishes, including so-called gold size or japan, twenty-five per centum ad valorem; enamel paints made with varnish, thirty-five per centum ad valorem; spirit varnish containing five per centum or more of methyl alcohol, thirty-five cents per gallon and thirty-five per centum ad valorem; spirit varnish containing less than five per centum of methyl alcohol, one dollar and thirty-two cents per gallon and thirty-five per centum ad valorem. For varnishes, see also Pomeroy & Fischer, page 350. VARNISHES. STATEMENT OF A. H. WASHBTJEN, EEPEESENTINO J. A. & W. BIED & CO., OF NEW YOEK AND BOSTON. Mr. WASHBURN. I appear, Mr. Chairman and gentlemen of the committee, in behxlf of Messrs. J. A. & W. Bird & Co., of New York and Boston, importers of enameled paints. The paragraph affected is 51, I think, of the present act. The CHAIRMAN. Will you state your name, please, sir 1 Mr. WASHBURN. Washburn. The CHAIRMAN. Mr. Washburn? Mr. WASHBURN. Yes, sir. The CHAIRMAN. What are the initials 1 Mr. WASHBURN. A. H. The CHAIRMAN. A. H. ? Mr. WASHBURN. Yes. Mr. HILL. What paragraph did you say ? Mr. WASHBURN. Paragraph 51. I think it is 51, of the Payne Act. Mr. HILL. Fifty-one ? Mr. WASHBURN. Yes. Mr. LONGWORTH. Varnishes also come in under that ? Mr. WASHBURN. Yes, sir; it is in the varnish paragraph, and the clause to which I want to direct your attention for just a moment provides for enamel paints made with varnish. Now, enamel paint is a specialized article, containing zinc oxide as a base uniformly, I think. The zinc oxide is ground in oil, and usually not always a certain percentage of varnish is added to impart a gloss, and because of that fact, I suppose, enamel paints are provided for in the varnish provision. Under the old act of 1897 they were held to be dutiable as zinc-oxide paints, the courts saying that the addition of varnish did not change the character of the article as a zinc-oxide paint. That duty was If cents per pound. The present rate is a very great addi- tion to the old rate. The importations under the present act have been comparatively slight. I have not the figures for the last year, but the amount of duties paid on these enamel paints entered for consumption during the years 1910 and 1911, ending June 30, in no one year hardly exceeded $3,000. The revenue from this source is very slight. The suggestion we make is that the present duty of 35 per cent, which by the way is, I think, the highest duty assessed upon any paint (even under the old Dingley Act the highest rate of duty was 30 per cent) that that be materially reduced; that the old phraseology preferably be reestablished ' 'zinc-oxide paint"; but if the committee prefer to retain the present language the dominative provision for enamel paints, that it strike out the provision "made with varnish," SCHEDULE A. 313 PARAGRAPH 51 VARNISHES. and the reason for that is this : These enamel paints are made both with and without varnish and it has been very difficult for chemists the Government chemists to determine by an analysis whether varnish is or is not added to impart the gloss. Some gums, acting as a varnish substitute, are sometimes added, and the result is a certain amount of confusion. You have enamel paints made with varnish assessed at 35 per cent, and you have enamel paints proven in some cases not to be made with varnish, but accomplishing precisely the same purposes, taking another rate of duty. Mr. JAMES. What is the total product of this article of enamel paint in the United States ? Mr. WASHBUBN. In the United States ? Mr. JAMES. Yes. Mr. WASHBUKN. I have not the domestic figures. The total amount entered for consumption for the year ended June 30, 1910, beginning, of course, August 5, 1 909 that would be about 1 1 months was only 3,334.5 gallons, and those were valued at $6,485, and for the next year the total amount of imports entered for consumption as shown by the official statistics was 4,584 gallons. Mr. JAMES. No ; but I asked you about what was the value of the output in the United States. Mr. WASHBUBN. The domestic output, Senator James, I am not advised with respect to that. It is difficult to get any figures. Mr. JAMES. Could you not approximate it ? Mr. WASHBUBN. No ; I can not. I have not been able to get any figures about that. Mr. KAINEY. Are there many factories making it ? Mr. WASHBUBN. Oh, I could say there are perhaps hah* a dozen factories making these enamel paints. Mr. RAINEY. Is the consumption large or small ? Mr. WASHBUBN. It is growing. It is, as I said at the outset, a specialized article, which has come into vogue during the last 10 years, but under the present conditions, as they now exist, it can not be imported to any very great extent. Mr. HARRISON. You are in favor of the reduction proposed hi our bill to 25 per cent ad valorem ? Mr. WASHBURN. Certainly, sir ; and even lower. We think a duty of approximately 20 per cent would yield a much larger revenue and permit these people to do a competitive business. Mr. LONGWORTH. Just what is the business or firm that you represent ? Mr. WASHBURN, They are importers of paints and oils. Mr. LONGWORTH. They are not manufacturers? Mr. WASHBURN. No; they are not manufacturers, Mr. Longworth. Mr. LONGWORTH. To whom do they sell? Mr. WASHBURN. They sell to the American consumers. Mr. HILL. For whom do they sell? Whom do they represent on the other side ? Mr. WASHBURN. I think they buy it from various sources. Mr. HILL. Do you not know? Mr. WASHBURN. I only know one name. Mr. HILL. Well, what is that? Mr. WASHBURN. That is the Repolin Co. (Ltd.), I think, Holland. 314 TABIFF HEAEINGS. PARAGRAPH 51 VARNISHES. Mr. HILL. Are they agents or are they buyers in the world's market ? Mr. WASHBUBN. They are buyers in the world's market; yes. Mr. HILL. And not agents for any particular concern ? Mr. WASHBUBN. I think they are agents for that particular concern. Mr. HILL. Well, for what other concern ? Mr. WASHBUBN. I do not know of any others. Mr. LONGWOBTH. Their interest is simply to get the importation as cheaply as possible? They have no interest in the industry in this country ? Mr. WASHBUEN. They are perfectly willing that the domestic industry should continue to nourish. Mr. HILL. You represent two concerns, do you ? Mr. WASHBUEN. No; just J. A. & W. Bird. Mr. HILL. Have they any money invested in the production of this article in this country ? Mr. WASHBUEN. Not in this country. Mr. RAINEY. Do they import any other paints than enamel paints made with varnish ? Mr. WASHBUEN. I think they do. They are not interested, how- ever, so far as I am advised, in the tariff rate on any others. Mr. RAINEY. They would not have much of a (business, if that were the whole business. Mr. WASHBUEN. They are interested in other paints and oils. I know they import other varieties, but how largely I am not advised. Mr. JAMES. Are there anv enamel paints exported from the United States ? Mr. WASHBUEN. I am not advised about that. Mr. JAMES. This figure here of 35 per cent is practically pro- hibitive, is it not ? Mr. WASHBUEN. It is almost prohibitive. It has not resulted in yielding much revenue, as you can see from the official figures. Mr. JAMES. The revenue received in the year ending June 30, 1912, is $2,689.90? Mr. WASHBUEN. Yes, sir; and yet it is quite an important article of commerce. I will file my brief. BOSTON, MASS., January 2, 1913. COMMITTEE ON T WAYS AND MEANS, Washington, D. C. GENTLEMEN: We address you as dealers in enamel paints. Enamel paints as a group have a zinc oxide base and usually are ground in oil and varnish added to impart a gloss, or the zinc oxide may be ground in varnish itself. Because varnish is so generally employed in their manufacture, no doubt, enamel paints are included in a clause of the varnish paragraph (51) of the present tariff act providing for "enamel paints made with varnish, 35 per centum ad valorem." Lnder the Dingley tariff act there was no eo nomine provision for these paints as such, and they were assessed by collectors of customs under the general "basket clause " paint provision as paints "not otherwise specially provided for." The courts, however, on two different occasions held white enamel paints to be otherwise specially provided for under the more exact descriptive language found in paragraph 57 of the act of 1897 as "Zinc, oxide of, and white paint or pigment containing zinc, but not containing lead ground in oil, one and three-quarter cents per pound." Colored enamel paints were not affected by this ruling. The view adopted by the Federal courts was that the merchandise was in fact a white paint containing zinc, but not containing lead, and ground in oil, and that the addition of the varnish did not under established rules of interpretation change the SCHEDULE A. 315 PARAGRAPH 51 VARNISHES. character of the mixture as a paint. The decisions and the reasoning upon which they were based will be found in United States v. Bird, Circuit Court of Appeals, Second Circuit (167 Fed. Rep., 319). Enamel paint is largely a specialized article, the demand for which has been worked up chiefly during the past decade. It is used where enamel surface is especially desired, as in painting golf balls, bathtubs, and the like. During the latter part of the lifetime of the Dingley Act the importations, while not on an extensive scale, were sufficiently large to yield considerable revenue to the Government. No sta- tistical figures are available of the volume of importations under the old law, nor, as far as we are aware, none are available now showing the total importations. It appears, however, from statistics published by the Department of Commerce and Labor that from August 5, 1909, the date of the Payne-Aldrich Act, to June 30, 1910, 3,334.50 gallons of enamel paints, valued at $6,485, were entered for consumption, yielding, at 35 per centum, Government revenue of only $2,269.75. For the year ending June 30, 1911, 4,584.50 gallons valued at $8,782.88 were entered in the same way, upon which duties amounting to $3,074.01 were collected. The amount of revenue under present conditions is thus seen to be inconsiderable at best. Under existing conditions handicapped by the present extensive duty we can not compete with the domestic aritcle which is able to undersell us regularly. With a reasonable tariff rate, speaking for ourselves, we could get our fair share of the business, and which is all we ask, and incidentally insure a larger Government revenue from this source. We have no doubt other dealers are similarly situated. In our opinion this tariff rate to yield a satisfactory revenue should under no con- ditions exceed 20 per cent ad valorem, if your committee prefers ad valorem rates to the specific rate of If cents per pound levied under paragraph 57 of the act of 1897. The corresponding paragraph (55) in the act of 1909 retains the same rate of If cents per pound, but the paragraph was amended by striking out the provision for "white paint" (under which these enamel paints had been classified) found in paragraph 57 of the act of 1897. The highest ad valorem rate assessed upon even the most expen- sive varieties of wet paints does not exceed 30 per cent under the present tariff act. This is the rate also assessed upon various hign-grade dry colors. The discrimina- tion against enamel paints found in the present act in indefensible. The present provision is for "enamel paints made with varnish." This has been productive of some litigation, inasmuch as some varieties of enamel paints have been shown not to be made with varnish and have accordingly been held not to be dutiable at 35 per cent ad valorem as "enaniel paints made with varnish" but at 30 per cent ad valorem as paints "not otherwise specially provided for." (G. A. 7324, T. D. 32243.) Inasmuch as many varieties of enamel paints are either made with varnish or contain varnish as an ingredient, enamel paints take one rate or the other accord- ing as they are shown to be made with or without varnish. Whether varnish is used or some substitute for varnish is used in the process of manufacture to impart a gloea is difficult if not impossible to determine by analysis. If your committee, therefore, desire to continue to make a special provision for enamel paints, we would suggest that the words "made with varnish" be omitted. A specific provision for "enamel paints " followed by the rate of duty would, we think, be unambiguous and embrace enamel paints both white and colored. If your committee should prefer to eliminate the special provision for enamel paints and return to phraseology similar to that employed in the acts of 1894 and 1897, this result would be accomplished, in our opin- ion, by amending the present paragraph (55) so as to read: "Zinc, oxide of, and paint or pigment containing zinc but not containing lead, dry, per pound; ground in oil, per pound." Respectfully submitted. J. A. & W. BIRD & Co., By COMSTOCK & W T ASHBURN. STATEMENT OF P. H. CALLAHAN, OF LOUISVILLE, KY. Mr. CALLAHAN. Mr. Chairman, I have the articles in question here, and perhaps some of the members would like to see them. [Mr. Callahan thereupon submitted to the members of the committee some samples. 1 Mr. Chairman and members of the committee, I have appeared here as a member of and delegate for the National Varnish Manuf ac- 316 TABUT HEADINGS. PAHAGBAPH 61 VABNISHES. turers' Association, which represents about 80 per cent of the entire industry. We have already submitted to the chairman of your committee a brief that relates to the proposed duties on varnish gums, China nut oil, and soya bean oil, whicn have never been taxed and which have never had any duty upon them in the past. I understand this is not a matter of protection, and my remarks will therefore be upon the subject of revenue. I came here, not with the purpose of arguing the justice or injustice of the act, or the pro- posed act, but to perhaps furnish you with some information which we possess as manufacturers of these goods and consumers of this raw material; to show you the ramifications of the business, the chan- nels in which these goods go, so that you will know who eventually pays the bills and who will have to pay this tax. Varnish is in no sense a luxury. Next to food and clothing, it is perhaps now one of the common necessities of life. There is no arti- cle of such general use, with the exception of iron and wood perhaps, that enters into the composition of different manufactures. You can go into the most humble home, and you will see varnished chairs, varnished beds, varnished tables, and varnished cradles. YoXi can go anvwhere and you will see varnished work. Perhaps next to soap, it is now more generally used than anything else for ordi- nary necessities. It is a preservative ; it is absolutely necessary that it should be used for the preservation of wood and also on iron to pre- vent rust. I will just enumerate a few things on which varnish is used, varnish that is made from the materials that I have submitted to you. It is used on moldings, radiators, bathtubs, furniture of all kinds, including tables, chairs, dressers, school desks, and office fur- niture, stoves and stovepipes; linoleum; and floor varnishes, oil cloths, bedsteads, hardware, including locks, hinges, bolts, etc.; washing machines, brooms, dusters, wallpaper, concrete floors, chil- dren's toys, wood and metal; books, pencils, rulers, etc.; tin cans, labels, bicycles, baby carriages, automobiles, agricultural imple- ments, including wagons, trucks, plows, rakes, shovels, and harrows; sewing machines, buttons, buckles, eyelets, trunks, valises, talking machines, hats, shoe buttons, rubber shoes and boots, patent leather, coat hangers, bobbins, loom harness, coffins, rubber cloth, all classes of insulated electric fixtures, transformers, motors, insulated wires, pianos and organs, sanitary wall finishes, refrigerators, ships, yachts, motor boats, rowboats, canoes, railway and tramway cars, freight cars, fireproof doors and trims, fiber products, pails, tubs, etc.; willow ware, wood-turned articles, and machinery of all classes. Those are some of the few things in which varnish is used. It is the opinion of all manufacturers and the opinion of good judges of economics, that articles of a general beneficial character and com- modities of that kind should be purchased at the lowest price, as they go to the masses, and not to the classes. It is proposed on the basis of the 1911 importation to raise the tax to $803,000 ; that is on last year's importations of these products, the largest up to date. Now, it must occur to you gentlemen that this tax of $803,000 will ultimately go down to the lines of goods that I have enumerated, which go into the houses and into the homes of middle and humbler classes in particular. It is the trend of the times, I believe, to reduce the cost of living. But it must occur to SCHEDULE A. 317 PARAGRAPH 61 VARNISHES. you gentlemen that this tax of $803,000 will increase the cost of living at least that much, and perhaps $1,000,000, with the additional investment, and therefore would bring about the opposite result from that which the committee desires to bring about. Now, talking of our own business. We are, as varnish manufac- turers, a remnant of the old style of competitive business. We have not the semblance of any connection with each other. We have no combination in prices or anything of that kind. We compete with each other, we nave our separate selling forces, we have sales managers, and we have an extensive research department. We go out with our chemists and we develop new things altogether, so that we will have a better price than our competitors. We make a lower price and give the benefit of that research and of our investigations to the public, with the result that varnishes to-day, regardless of the fact that materials are twice as high as 10 years ago, are twice as good at the same price. That benefit has been brought about by the extremely fierce competition that exists between us. Every one of us has our own salesmen, who solicit personally, and who Keep in touch fre- quently with every buyer in the country. Mr. HARRISON. Are you interested in the manufacture of spirit var- nishes or oil varnishes ? Mr. CALLAHAN. Oil varnishes, mostly. Mr. HARRISON. The proposed bill reduces the duty on oil varnishes and other materials also. Mr. CALLAHAN. I understand it does. Mr. HARRISON. What is the total of the American consumption of varnish ? Mr. CALLAHAN. $18,000,000. Mr. HARRISON. What was the largest amount imported in any recent year ? Mr. CALLAHAN. I do not know. Mr. HARRISON. In 1911 there was about $9,000 worth of varnish imported. You had $9,000 worth of imports in the total American consumption of $18,000.000 worth. For what concern do you appear ? Mr. CALLAHAN. The National Varnish Manufacturers' Association. Mr. HARRISON. Does that include among its membership an im- portant concern of which former Gov. Franklin Murphy, of New Jersey, is president? Mr. CALLAHAN. I believe they are members. Mr. HARRISON. Do you recognize him as an authority on the manu- facture of varnish ? Mr. CALLAHAN. Do I recognize him as an authority on the manufac- ture of what ? Mr. HARRISON. On the manufacture of varnish ? Mr. CALLAHAN. Perhaps so, on the quality of varnish; not on an economical question. Mr. HARRISON. Do you know what statements he made before the Finance Committee of the Senate last year? Mr. CALLAHAN. I do not know. Mr. HARRISQN. He was asked some question by the Senators, and he said that the varnish industry, in his opinion, could stand alone without any duty. Do you agree with that f Mr. CALLAHAN. I rather believe so. 318 TARIFF HEARINGS. PARAGRAPH 51 VARNISHES. Mr. HARRISON. So that your complaint is as to the imposition for revenue of a duty upon these noncompetitive products. If your raw materials were left upon the free list, you would be willing to see varnish upon the free list also ? Mr. CALLAHAN. So far as I am concerned; yes. Mr. HARRISON. Then in that respect you agree with Mr. Murphy ? Mr. CALLAHAN. I make about $800,000 worth of varnish, and none of that is in competition with England. I do not make automobile varnish, and I make very little piano varnish. Everything I make is in the cheaper line of goods for the great middle classes. Mr. Murphy's line, perhaps, goes into piano varnish. If he made that statement, perhaps he is pretty nearly correct. Mr. HARRISON. If your materials of manufacture were not taxed as proposed by this bill, do you believe your industry could stand on a free-trade basis ? Mr. CALLAHAN. I believe so. Mr. KITCHIN. You are exporting over $1,000,000 worth a year in competition with all the world and importing less than $50,000 ? Mr. CALLAHAN. We have had the benefit, you understand, of free materials all the time. We have had the benefit of extreme com- petition, bringing out the best that is in us in the development of our business. Our business is constituted of men who own their own business, like myself; I am the proprietor of my company. We are always active in it. I represent, as I say, a remnant of the old-style competitive business, which political parties are trying to reestablish in this country. I hope, therefore, that, coming from an association like ours, our remarks will have some favorable consideration at your hands. We say that this tax of $803,000 that is proposed to be assessed will be paid by the consumer. I am trying to tell you gentlemen who that consumer is that is going to pay the tax. Mr. JAMES. You are not asking for any protection? Mr. CALLAIIAX. I am not asking for protection. Mr. JAMES. You are merely asking that the raw materials be admitted f roe- Mr. CALLAIIAX. I am telling you just who is going to pay that $803,000. Mr. James personally knows me and knows my position on different topics. I say that the removal of the tax on sugar and putting it on this does not improve the situation in the least. Mr. HARRISON. Let me ask you a question for my own information. Suppose, after imposing this revenue upon the raw materials we reduce the duty upon the finished product from 65 to 25 per cent. Mr. CALLAIIAX. Has there been a duty of 65 per cent ? Mr. HARRISON. That is upon the ad valorem equivalent. Do you believe that will permit any extensive importations from abroad ? Mr. CALLAIIAX. I do not" think so. Mr. HARRISON. If that is true, then your position is correct. The manufacturers would bo able to hand down the small tax that we impose upon the raw materials. If the enormous reduction in duty from 65 to 25 por cent would permit extensive importations and competition would set in, how would you be able to hand down that tax levied on you ( SCHEDULE A. 319 PARAGRAPH 51 VARNISHES. Mr. CALLAHAN. The Treasury reports will show that the profits that have been made in the varnish business have been very meager \yhen compared with the investments, owing to this old-line compe- tition. Self-preservation in business is the same as self-preservation in life. Mr. HARRISON. The varnish manufacturers that I have the pleasure of knowing are among the richest men of my acquaintance. Mr. CALLAHAN. I am not one of your acquaintances. Mr. HARRISON. I am sorry to hear that. Mr. CALLAHAN. I would not come hi that class. Mr. JAMES. I think Mr. Harrison was looking at the wrong sched- ule. Instead of being 65 per cent it was 25 per cent. Mr. HARRISON. That was spirit varnish. Mr. CALLAHAN. The importations are mostly oil varnish. We have developed our business and we have gone abroad, owing to this research work Mr. JAMES. The duty is 25 per cent. Mr. CALLAHAN. It is that particular duty that applies to most of the imports. On that particular point, perhaps, Mr. Murphy, whom you quote, is very good authority. If the general purpose is to greatly reduce the tariff on common necessities, and I understand it is, I just want to bring that point out again as to w r ho will pay this tax. I have tried to make it plain who will pay this tax. We are of the opinion that it w r ould be a mis- take. We will pass it on, and the great common people will have to pay for it. Mr. LONG WORTH. You make a distinction between articles of neces- sity that are produced in this country and those which can not pos- sibly be produced here ? Mr. CALLAHAN. I have made no distinction. My only point is w*ho pays this tax Mr. LONGWORTH (interposing). You claim that, where an article is not produced in this country and is imported, necessarily the duty, whatever it may be, is added to the price. Mr. CALLAHAN. To the consumer; that has been settled, that the consumer pays the duty. Mr. LONGWORTH. Not at all. It has been settled with reference to articles which can not be produced in this country, but by no means settled as to articles which may be produced in this country. That is the reason I asked you if you did not make a distinction. Mr. CALLAHAN. These articles are not produced or even found in this country, and we have to pay for those articles an additional sum of money eight hundred and some odd thousand dollars. Mr. JAMES. What are those articles? Mr. CALLAHAN. Varnish gums, China nut oil, and Soya bean oil. The proposed duties or tax on them, on last year's basis, would come to $800,000. My point is this, that we varnish manufacturers will certainly add that onto our selling price, and the consumer will have to pay for it. Mr. JAMES. They are the raw materials that go into these products which you sell? Mr. CALLAHAN. Yes. 320 TAEIFF HBABINGS. PARAGBAPH 61 VABNI8HES. Mr. LONGWORTH. And can not by any possibility be produced in this country ? Mr. CALLAHAN. They can not. Mr. LONGWORTH. They must be imported ? Mr. CALLAHAN. Yes, sir. Mr. LONGWORTH. Then you make that distinction between foreign articles of necessity and articles of necessity that can be produced in this country, do you not ? Mr. CALLAHAN. I do not remember referring to bringing in articles that could be produced. Do you mean varnish ? Perhaps you can assist me ? Mr. LONGWORTH. Raw wool, which is an article of daily necessity. Do you think wool should be on the free list ? Mr. CALLAHAN. I do. Mr. LONGWORTH. You think that any article which is a daily necessity, whether it can be produced in this country or not, should be on the free list ? Mr. CALLAHAN. "Any article" may be very broad, but if it is of extreme necessity, I should say so. That is my personal opinion. Mr. LONGWORTH. Of course finished varnish ought to be on the free list, too ? Mr. CALLAHAN. I would not object to it, if Mr. Murphy says it is all right. Mr. LONGWORTH. Any article of necessity used in daily life. Mr. CALLAHAN. Of general necessity; common necessity; used by the common people. Mr. LONGWORTH. Should be on the free list? Mr. CALLAHAN. Yes, sir. Mr. KITCHIN. Provided you can get a revenue sufficient to run the Government. Mr. CALLAHAN. Yes; but not confined to these things. Mr. LONGWORTH. You do not believe in a revenue on wool? Mr. CALLAHAN. I would not believe in a revenue on wool. Those are just my points, gentlemen. We took the matter up with the Senate, and the Democratic members of the committee agreed with us and brought in a minority report, striking those items from the dutiable list. I hope I have made it plain to you now, just where those goods are used and who eventually will nave to pay the bill. That is my only object in coming here. Mr. PALMER. Would a reduction in the duties on varnish result in any increased importation of varnish ? Mr. CALLAHAN. Well, that is questionable. It might. There is a proposed reduction, is there not, Mr. Harrison? Mr. HARRISON. On spirit varnishes, but not on oil varnishes. Mr. PALMER. That means that competition with the foreign maker of varnish would be increased ? Mr. CALLAHAN. Yes, sir. Mr. PALMER. That being so, how could you pass on the duties on the raw materials, thus increasing the price on your finished material ? Mr. CALLAHAN. Well, we would either do that or go out of business. Mr. PALMER. What is that ? SCHEDULE A. 321 PARAGRAPH 51 VARNISHES. Mr. C ALLAH AN. We would either do that or go out of business. That is another case of self-preservation. Mr. PALMER. Is it not a fact that the varnish people think that the reduction of the duties on varnish would result in a large increase in the imports of varnish ? Mr. CALLAHAN. I believe they think that way. Of course, to my mind, we are in advance of the world in the scientific development of the varnish business. Germany, within the last few years, has given us a very hard race. It is because of the scientific develop- ment of our business that we do not fear competition so much. Mr. PALMER. Do you not have confidence in your ability to com- pete with the foreign manufacturer by the reduction of your price to some extent, if necessary, to so compete with him ? Mr. CALLAHAN. We can not make any further reduction in our present prices. Mr. HARRISON. Is not that Gov. Murphy's idea? Mr. CALLAHAN. I do not think so, for we can not make any reduction in our present prices. Mr. Chairman, I am very much obliged to the committee. STATEMENT SUBMITTED BY BERRY BROS. CONCERNING CHANGES IN VARNISH SCHEDULE. NEW YORK, January 9, 1913. Hon. OSCAR W. UNDERWOOD, House of Representatives, Washington, D. C. DEAR SIR : Confirming my brief conversation with you when intro- duced last Monday by a letter from Mr. Edwin Sefton, I wish to put in writing our strenuous objection to any change being made in the varnish schedule, and particularly so in what is known as spirit var- nishes ; for if the duty is taken off of these articles, it will be impossible for us to compete with the German manufacturers, as they have no internal-revenue tax, and we have to pay $2.10 per gallon revenue for every gallon taken out of the bonded warehouses. Please give this your very careful consideration. We are also very much opposed to a duty being put on china wood oil and soya-bean oil, as it is impossible to raise it in this country, and it is absolutely a raw material. If there is any information I can give you from a technical stand- point, please do not hesitate to call upon me. Thanking you for the courtesy extended me on Monday at 1 o'clock, I remain, Yours, very truly, BERRY BROS., Per H. P. STEPHENSON. PARAGRAPH 52. Vermilion reds, containing quicksilver, dry or ground in oil or water, ten cents per pound : when not containing quicksilver but made of lead or con- taining lead, four and seven-eighths cents per pound. See Arthur Somers. page 343. 78959 VOL 113 21 322 TARIFF HEARINGS. PARAGRAPH 53 WHITE LEAD. PARAGRAPH 53. White lead, and white pigment containing lead, dry or in pulp, or ground or mixed with oil, two and one-half cents per pound. For white lead, see also Pomeroy & Fischer, page 349. WHITE LEAD. BRIEF SUBMITTED BY R. S. HTJBBARD, REPRESENTING THE PAINT MANUFACTURERS' ASSOCIATION OF THE UNITED STATES. PHILADELPHIA, January 7, 1913. To the COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. GENTLEMEN: As chairman of the tariff committee of the Paint Manufacturers' Association of the United States, I beg leave to present the following brief on the subject of proposed tariff revision as it may affect the interests of the members of our association. I do not desire at this time to make any specific recommendations on behalf of our association as to changes in the duty on any special item. Briefs and arguments were presented, both by our tariff com- mittee and by a number of the individual members of this association, at the hearings before the Finance Committee of the Senate last year, when the proposed Underwood bill was under consideration. We venture to express the hope that the arguments and briefs then sub- mitted will have due weight in any further consideration of changes in the present tariff. We do wish to file an urgent request that in making revision of the tariff careful consideration be given to the relation between raw mate- rials and the finished products of our industries. We submit that in justice to the manufacturing industry in this country any reductions in duties on the finished product should be accompanied by an equitably adjusted reduction of duty on the articles entering into the manufacture of that product as raw material. For instance, we contend that the duty on paints, white lead, etc., of Schedule A can not be fairly and equitably apportioned without intelligent and careful consideration at the same time of the proposed duty to be levied on pig load and lead ores ; Schedule C. We urge further that due consideration be given to the fact that the subject of chemicals and allied manufactures is necessarily highly technical in its nature. We believe, therefore, that this should be the subject of expert investigation, and that the duties levied upon such products should be based upon the findings of a nonpartisan board or commission. We also beg to urge that, so far as possible, all duties be made spe- cific and not ad valorem. There appear to us to be many objections to the ad valorem method of assessing duty. In the first place, the ad valorem duty is more difficult to determine and collect fairly. It makes it more difficult for the manufacturer to figure his cost in advance, and therefore unnecessarily increases his risk of doing busi- ne^s An ad valorem duty automatically decreases when a foreign manufacturer is (lumping his surplus product here at low prices, and is automatically increased when such products are scarce and com- mand a high price. Thus, it produces to the Government a minimum revenue when imports are plentiful and tends to decrease imports SCHEDULE A. 323 PARAGRAPH 54 WHITING. when prices are high, because of the rapidly increasing load of duty added onto the higher price. Finally, I wish also to say that the tariff committee of the Paint Manufacturers' Association will be only too glad, at any time, to render any assistance they may be able to give in expert investigations to insure equitable and scientific readjustment of the present tariff. Respectfully submitted. R. S. HUBBARD, Chairman Tariff Committee Paint Manufacturers' Association of the United States. GRIFFIN DRUG CO., OF PEEKSKILL, N. Y., URGES REDUC- TION OF DUTY ON WHITE LEAD. PEEKSKILL, N. Y., January 10, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: Won't you please look into the tariff on white lead? We understand the Smelters' Trust, controlled by the Guggenheims, make the price on all the lead made in the United States, and Mr. Guggenheim has been in the Senate voting on the tariff on goods he controls. Reduce the tariff on lead and give the poor man a chance to paint his house, which he can't do now. We are paying $7 per hundred pounds for lead, and we are told they (the Lead Trust) are selling the same thing in London for $4. We are Progressives, but we hope you and President Wilson will make good, so there will be no need of a Progressive Party. Yours, very truly, GRIFFIN DRUG Co. PARAGRAPH 54. Whiting and Paris white, dry, one-fourth of one cent per pound; ground in oil, or putty, one-half of one cent per pound. For Paris white, see also Frederick N. Tirrell, page 131. WHITING. THE HIGGINSON MANUFACTURING CO., OF NEWBURGH, N. Y., SUBMIT BRIEF ON WHITING AND PARIS WHITE. To the WATS AND MEANS COMMITTEE, House of Representatives, Washington, D. C. SIRS: We, as manufacturers of whiting and Paris white, wish to enter a protest against the proposed reduction in duty on whiting and Paris white, and respectfully request that the present tariff on these commodities be maintained and for the following reasons: First. There are no chalk deposits in this country from which the American manufacturer can draw his supply of raw material, hence all chalk and cliff stone must be imported from England and France, and ocean freight paid on the same. The advantage to the foreign manufacturer is at once apparent; he has his whiting factory adjoin- ing his chalk quarry. Second. There is" no demand from the American consumer for a reduction in the duty on whiting and Paris white. The present 324 TARIFF HEARINGS. PABAGRAPH 54 WHITING. prices are low, and the freight rate usually determines the market in which the buyer places his order. There is no combination or or trust to maintain prices, and competition is and always has been keen. Third. The yearly importations of chalk and cliff stone amount to about 100,000 tons, which is manufactured into whiting and Paris white, the industry furnishing employment to laboring men of the United States and pays them, in the aggregate, approximately $500,000 per annum. The daily wage ranges from $1.75 to $3, as against less than one-half of this sum in the same industry in England. Fourth. The crude chalk, from which whiting is manufactured, contains a very large percentage of moisture, sand, and flint, which is eliminated in the process of manufacture and will average about 25 per cent; in other words, a ton of crude chalk produces only three- quarters of a ton' of whiting. The amount so lost the manufacturer in this country is obliged to pay for, both cost f. o. b. shipping point in England or France and cost of ocean freight on the same. Fifth. During the last half of the year 1912 the cost of ocean freight has advanced to such an extent the delivered price of the crude chalk to the manufacturer in the United States has advanced approxi- mately 35 per cent to 40 "per cent. Sixth. The industry as a whole is not a large one, and if the entire quantity of whiting and Paris white consumed in this country was imported the revenue to the Government would be small, and to obtain this would mean the sacrifice of approximately $500,000 yearly which is paid to labor. We have endeavored to put before you, in a brief way, the main facts in connection with the industry, and sincerely hope wou will retain the present duty of one-fourth of 1 cent per pound. Respectfully, yours, THE HIGGINSON MANUFACTURING Co., T. H. MILLSPAUGH, President. NEWBURGH, N. Y., December 18, 1912. BRIEF OF M. EWING FOX & CO., NEW YORK, N. Y. NEW YORK CITY, January 9, 1913. Hon. STEVEN B. AYRES, Congressman, Washington, D. C. SIR: Referring to proposed changes in tariff and the hearings on Schedule A (paints, oils, and chemicals) by the Ways and Means Com- mit fee of the I>ouse of Representatives: We manufacture calcimines, paints, and varnishes, in which some ofjhe materials that will be considered arc used in large quantities. We urge your consideration of the following statement and its presen- tation to the committee if you think best: Chalk (crude or him]); now on free list). Is only found in Europe, is very cheap, and is used in great quantities for the manufacture of whiting and Paris white. Any duty placed upon it would result in considerably higher prices for the materials made from it, reduced consumption by the public, loss of business to American manufac- SCHEDULE A. 325 PARAGRAPH 54 WHITING. turers, and loss of employment to their men. We strongly protest against any tariff being imposed on this material. Chalk (ground or powdered; now on protected list). Some of this is simply the crude chalk passed tlirough ordinary separating and grinding processes, the cost of which is considerably more in America than in Europe. We estimate this manufacturing cost to be at least 50 per cent more in United States than abroad, and believe that such a duty should be imposed. Whiting and Paris white (now on protected list) . These two mate- rials are practically alike, the latter being made from a slightly harder kind of chalk and by a more elaborate method. The chalk is dug from hillsides and pits adjoining certain European waterways, is then crushed, washed, refined, graded, dried, recrushed or ground, packed, and shipped direct from adjoining wharves to various American sea- ports, particularly those in Canada, Central and South America. Very little of it is sold in United States because the present tariff is sufficient to protect our manufacturers. Most English manufactur- ers of Whiting and Paris white are also owners of chalk mines, so that if the tariff is lowered sufficiently to enable them to compete with United States manufacturers ur brief if it is in there it is all right, and we will consider it when we reach it, but if it is not in there I would be glad if you will file with your brief a statement making a relative comparison showing how it would cut your raw materials. Mr. SOMERS. I have included that, Mr. Chairman. 334 TARIFF HEARINGS. PABAGBAPH 56 PAINTS, COLOBS, ETC. The CHAIRMAN. We will consider it. Mr. SOMERS. All that we ask for is an equalization; that is all. Now, we pass on to the question of the vermilion red, containing quicksilver. That carries a reduction of from 10 cents per pound to 7.5 cents per pound. I think I made myself perfectly clear at the hearings before the Senate Finance Committee on this very bill, when I said: "If you pass this paragraph we ask you to take into considera- tion at the same time the duty on quicksilver, which is included in that other schedule." Quicksilver is in the metal schedule, and I was informed at that time that it was expected to reduce the tariff on quicksilver in the metal schedule. If that be true, then we have no quarrel with it; but we want to keep that in mind, for the reason that to put under 10 cents per pound duty a great proportion and by a great proportion I do not mean 10 or 15 per cent or any small pro- portion but a great proportion of the quicksilver vermilion, so called, that is used in this country, is imported from Europe, even though there is a duty against it of 10 cents.per pound. So, if you reduce it still further, without giving us some reduction in the duty on quick- silver, you wipe us out completely. Mr. HARRISON. You will observe that there is a reduction in ver- milion red containing quicksilver from 17.5 per cent to 15 per cent. Mr. SOMERS. Yes; that is about what it amounts to, from 10 cents per pound to 7.5 cents per pound. Mr. PETERS. Quicksilver was reduced from 14 per cent to 10 per cent under the bill that passed the House. Mr. SOMERS. Yes. Mr. PAYNE. I suppose you have heard the evidence here that the policy of this committee is to put a tariff on these articles going into your manufactures, like quicksilver, in order to tax the manufacturer. You have heard that, I suppose ? Mr. SOMERS. I have not heard it, but I do not question that it has been stated. Mr. PAYNE. It was stated yesterday. Mr. SOMERS. I was not here yesterday. Mr. PAYNE . Are von in harmony with such a policy as that to put a tax upon all of those materials you use that enter into the manu- facture of your goods? Mr. SOMERS. Xo; I am not wholly in sympathy with that policy, and I do not think that it tends to the best interest of the country. However, I am not prepared to discuss that now, although I would like very much to discuss it. Mr. PAYNE. I am afraid you are a victim of misplaced confidence. Mr. SOMERS. I am not so certain about that, Mr. Payne. Perhaps I have made some mistakes in my time, but I am young yet, and have an opportunity to correct them. Mr. PAYNE. On coal-tar dyes the duty has been reduced to 20 per cent. Do you know the cost of manufacturing these dyes here and abroad ? Mr SOMEKS Not the slightest. I have no knowledge of it. Mr PAYNE. You want to have that done for your special accom- modation, and not because you think it is necessary to reduce that duty, and still preserve that competition between our people and the people abroad that are manufacturing coal-tar dyes? SCHEDULE A. 335 PARAGRAPH 56 PAINTS, COLORS, ETC. Mr. SOMERS. I believe it is perfectly equitable to comprehend the both materials, the coal-tar dye and the finished product, as being closely related to one another. Mr. PAYNE. Well, that is an addition to your business? Mr. SOMERS. Yes. Mr. PAYNE. You are departing from your view. Mr. SOMERS. Naturally, as other men do, I guess. Mr. PAYNE. I thought it would result in a change in your opinion as to their being able to manufacture here when they get this sched- ule into effect. Mr. SOMERS. Of course, I am not not arguing for another man's business, nor do I want to attack any other industry in this country; but I wish to emphasize the point that with every reduction you make in our colors, you give us just the same reduction in the ma- terials that we can use. Mr. PAYNE. Are the duties on this article that you are here talking about under the present law prohibitive? Mr. SOMERS. No, sir. Mr. PAYNE. They are competitive, are they not? Mr. SOMERS. Oh, yes. Mr. PAYNE. So far as your industries are concerned, the present law meets your definition of a competitive duty ? Mr. SOMERS. Exactly, sir. I have no quarrel with the present law. We have been getting along under it very well indeed. I have studied the Payne law, and have lived under the Payne bill, and expect to live even under this bill, if it is equitably adjusted. That is all. Now, I am sorry to have taken so much time, and I do not want to exceed my limit, gentlemen, but I would like to say a word about blues Chinese, Berlin, and Prussian blues which are also included in this bill. They carry a reduction from the present tariff of 8 cents per pound to 20 per cent, or not less than 3 cents per pound. Now, the chief article that we use in the manufacture of blues is prussiate of potash. It is proposed to reduce prussiate of potash from 4 cents per pound to 1.25 cents per pound; and I call your atten- tion to the fact mat while that may appear to be a reduction of 2.75 cents per pound on raw materials, it is not, for the reason that a larger quantity of prussiate of potash is required for the manufacture of blue than you really get back. For instance, we require 120 pounds of prussiate of potash to make 100 pounds of blue, so that in considering the change in the tariff on our prussiate of potash it is well to bear in mind that there is always an excess quantity used that does not come back to a manufacturer of Prussian blue. I call your attention, further, to the fact that under the Payne law a volume of 200,000 pounds of this blue was imported during 1911. That is a considerable part of the consumption of blues in the United States. Mr. HILL. Taking them generally, there was more exported than imported, was there not ? Mr. SOMERS. I am speaking of blues, now. I do not believe any blues could be exported: but certainly 200,000 pounds was imported. We have again imported 200,000 pounds, which is a considerable por- tion of the total quantity consumed in America under the 8-cent 336 TABLET HEARINGS. PARAGRAPH 56 PAINTS, COLORS, ETC. clause, and I will leave you to judge how much more would be imported under the 3-cent clause and how little opportunity the American manufacturer would have to compete. When the Wilson bill was in effect, years ago, under the Cleveland administration and some reference has been made to it this morn- ing W6j as manufacturers of blue, imported bronze blue, which is a certain kind of Paris blue, because it was far more to our advantage to import blue than it was to manufacture it. That gave us a duty of 3 cents per pound, and we might get back to that same condition; so that we hope you will reconsider your determination in this matter, and not make the cut quite so severe. Instead of reducing it to this extent, if you should reduce it about 25 per cent of the present tariff, and carry with it the same reduction that you have proposed in prus- siate of potash, then we would be pretty nearly right, and be on the same competitive basis as we are to-day. We enjoy no monopoly of the market, as is indicated by the fact that a large percentage of the consumption in this country has been imported. Now, the last article to which I wish to draw your attention and I want to say here in passing that, coming bac to the statement I made earlier, as far as chrome colors are concerned, we make no pro- test against the reduction in these, because you have suggested reduc- tions in the lead products that form the basis of these colors, and we have no quarrel whatever with that this last article to which I wish to draw your attention is Paris green. We have taken Paris green and London purple and have com- bined the two. Let me ask the committee to divide these two insecticides, for the reason that they bear no relation to each other. Paris green is made the world over. It is made in America very extensively; several million pounds annually are made and sold to the farmers in this country. There is not a pound of London purple made in America. I believe that is exclusively made in England, and by but one concern. London purple does not come in competi- tion with Paris green at all. London purple has some advantage over Paris green, as a spray for certain kinds of cotton worms. Paris green has an advantage over London purple as an insecticide in other directions; so wo would ask you to divide the two. Paris green is the only insecticide that is not on the free list. Now, a large quantity of Paris green is made in Canada, just across the line. Canada has imposed a duty of 10 per cent on Paris green, and we have tried to go there, and have been excluded absolutely from the Canadian market. We can not go there and sell our goods. The Canadian does not come here, except in a very limited way. There has been some imported; as a matter of fact, I remember that there was a quarter of a pound package of Paris green that was made in Canada. If you put Paris green on the free list, you are going to wipe out this pipe dream, and you are going to wipe out every Paris green factory in the United States. So that we are complaining to you, and I am telling you something that is absolutely a fact, for the reason that the Canadian importer is but a few miles north of us, and there are concerns manufacturing Paris green in Detroit, in Indianapolis, in Chicago, and in Cleveland, and it is a very easy matter for them to step across the border, because these concerns have plants already SCHEDULE A. 337 PARAGRAPH 56 PAINTS, COLORS, ETC. in Canada making other lines of goods, and enjoying a share of the Canadian markets, and coming into the States with their surplus products and selling their green here against the home manufacturer, who can not compete, unless he has some duty that will represent just about the difference in the cost of labor not the difference in the cost of materials, because we do not know that there is any difference. You are putting blue vitriol on the free list. Arsenic is on the free list; acetic acid is on the free list. That would not be imported, any- way, because it contains so much water that nobody could afford to pay the freight on the water. But you are keeping soda ash on the dutiable list, one-eighth of a cent per pound, which amounts to probably 20 per cent of the cost; but I shall not press that as a reason. However, we do ask that you give us at least as much pro- tection in the matter and I hate to use the word but as much protection in the matter as Canada is giving to her manufacturers. That is ah 1 I ask for. Mr. KITCHIN. How much is the Canadian tariff on Paris green? Mr. SOMERS. Ten per cent. Mr. KITCHIN. Where is it made? Mr. SOMERS. It is made in Toronto by the Canada Paint Works. Sherwin-Williams have a factory over there. I believe they ab- sorbed the Canada Paint Co v and are manufacturing Paris green in Canada. Mr. KITCHIN. Do we export any into Canada ? Mr. SOMERS. Not a pound to my knowledge; not a pound in the last 10 years. I have not been able to trace a single pound. Mr. KITCHIN. Does England export any there ? Mr. SOMERS. To Canada? Mr. KITCHIN. Yes. Mr. SOMERS. That I do not know. Mr. HARRISON. Do you not get your raw materials just as cheap as the Canadians get theirs ? Do we not export immense quantities of sulphate of copper ? That shows that we are able to produce the raw materials for the manufacturer Mr. SOMERS. Do you know at what price ? Mr. HARRISON. The mere fact that we export it satisfies me that the Americans can get their raw materials cheaper than the manu- facturers of other countries. Mr. SOMERS. But that does not satisfy the man who pays the freight. He pays 4J cents a pound for blue vitriol to be used in this country, while he can buy that blue vitriol for 3f cents if he signs a bill of lading and manifest to have it shipped out of the country. I say that is our viewpoint, and I say we want to take into consideration the price at which it is exported. The mere fact that it is exported and brought back into this country and sold at the same rate shows that they must export it at a price far below the price they ask the American manufacturers. That is one of the things that hurts. Mr. KITCHIN. How large is the American output of Paris green ? Mr. SOMERS. I should say from five to seven million pounds. 78959 VOL 113 22 338 TARIFF HEABINGS. PARAGRAPH 56 PAINTS, COLORS, ETO. Mr. KITCHIN. How much is that in dollars and cents, about ? Mr. SOMERS. I am a little hazy on mathematics. The price is 13 cents a pound. Mr. KITCHIN. How many million pounds ? Mr. SOMERS. About 6,000,000 pounds, average, and that would be about $800,000, would it not ? Mr. KITCHIN. $800,000 ? Mr. SOMERS. Yes, sir. Mr. KITCHIN. Do you know how much we imported last year into this country from abroad ? Mr. SOMERS. Very little. Mr. KITCHIN. About $4,000 worth. Mr. SOMERS. Yes, sir. Mr. KITCHIN. And you are scared to death of this little $4,000 worth ? Mr. SOMERS. I am scared to death of it; yes, sir. I will tell you why. Mr. KITCHIN. How much did we export last year ? Mr. SOMERS. I do not believe we exported any. Mr. KITCHIN. Did we not export a great deal more than we im- ported ? Mr. SOMERS. Yes; to the southern countries, to Cuba and the West Indies; but none to Europe, that I have been able to trace. I do not know; I am simply telling you of my own experience. Mr. KITCHIN. Yet when you exported into the southern countries, you exported in competition with Canada and Germany, did you not ? Mr. SOMERS. Yes, sir. Mr. KITCHIN. You did not sell it to those people any cheaper than you sold it to your own people ? Mr. SOMERS. Not a cent. Mr. KITCHIN. Have you looked into the labor cost in Canada and America? Have you looked into the labor cost around about Toronto ? Mr. SOMEES. I have never investigated it personally, and I am not prepared to make any statement with reference to the difference in labor. I understand that when the reciprocity act was under con- sideration that matter was investigated by Congress, and you prob- ably have definite information on that subject. Mr. KITCHIN. If you will investigate the subject you will find out that labor is just about as high, and in many places higher, in the United States than in Canada. I am afraid that they are fooling you folks on this labor proposition. Mr. SOMERS. They are not fooling us. Mr. KITCHIN. They have scared you, rather. Mr. SOMERS. I have in mind a statement made by the Sherwin- Williams Co., who manufacture in Cleveland and Toronto. They figured out that the difference in cost of labor was approximately 12 to 15 per cent. I think that is a matter of record before the Senate Finance Committee. The statement was prepared by one of their representatives. 1 am not sure who. But we do insist that it is a serious matter, though it may not ap- pear so to you gentlemen. Ten per cent seems like a very small mat- SCHEDULE A. PARAGRAPH 56 PAINTS, COLORS, ETC. ter for this association to come here and ask for, but I want to say that it represents to-day our profits Mr. LONGWORHTH (interrupting). You surely do not want your profits protected ? Mr. SOMERS. No; but we do not want to be forced to do business for nothing, Mr. Longworth. Mr. LONG WORTH. Then you are not a real Democrat. Mr. SOMERS. You do not know how good a Democrat I am. Mr. LONGWORTH. You are a man that comes before this committee and says that he hates to use the word "protection," but that he likes the f eeling of it ? Mr. SOMERS. No, sir. I challenge anybody to assert that I have appeared here in the attitude of a protectionist. I am simply asking for an equitable adjustment of this tariff. That is all I am asking for. I am asking for no favors; we do not want any favors; we do not nave any need for special favors. Put us on a competitive basis and we will battle with the world. Mr. LONGWORTH. It is better than a competitive basis now, because you only have imports of $4,000 to contend with. Mr. SOMERS. We will have a great deal more if you put Paris green on the free list, because the American manufacturer will abstain from going as extensively into the manufacture of Paris green as he does to-day. He buys material in the summer tune and he begins the manufacture in the spring. He manufactures all through the sum- mer and he stores up his material through the winter. He enjoys a market for three months on stuff that it has taken him nine months to manufacture, and his money is tied up, and I submit that he is entitled to some consideration. Mr. HILL. Right there on that line: Are you aware that the authors of this bill had in mind only raising revenue from these schedules while holding in view the interests of the consumers ? They have not considered you in the matter. Mr. SOMERS. I am trying to pomt out to them where the con- sumers' interests should be considered, even more deeply than it is by this bill. I am coming to that now. Mr. HILL. Would you be satisfied to have the rates made on the basis of the difference in the cost of production here and abroad ? Mr. SOMERS. Yes, sir. Mr. HILL. Putting you on an equal basis of competition with your foreign competitors ? Mr. SOMERS. Yes, sir. Mr. HILL. Are not we the largest producers of paints in your line in the world ? Mr. SOMERS. Yes, sir. Mr. HILL. Are we not shipping abroad far more than we are importing ? Mr. SOMERS. That point I can not answer. I ani not in the paint, business. Mr. HILL. No; but in dry colors? Mr. SOMERS. No; we are not. Mr. HILL. But we are the largest producers of paint and pigments in the world. We produce 50 per cent more than Great Britain, which is the next largest; we are shipping them all over the world. 340 TAEIFP HEABINGS. PARAGRAPH 56 PAINTS, COLORS, ETC. Now, would you not be satisfied if this committee fairly investigates tie question, or if a nonpartisan tariff board thoroughly investigates the question, as to the difference in the cost of production here and abroad ? Would you not accept that ? Mr. SOMERS. Absolutely. Mr. HILL. Without knowing what the results of their conclusions would be ? Mr. SOMERS. Absolutely; but I can not live on that. I have got to get out of the business Mr, HILL. You have got to get out of business because you say that this bill does not consider your interests at all ? Mr. SOMERS. Again I repeat that they do. My interests are going to be considered The CHAIRMAN (interposing). Gentlemen, there are other witnesses here, and I would like to have you return to the real subject before the committee. This political discussion can come up at a later date. Mr. SOMERS. Let us presume that you put Paris green on the free list. I want to be serious on this. The manufacturers hesitate to manufacture a year in advance. If they do not prepare themselves to meet the demand there may be a demand and there may not be a demand. We can not tell when the bugs are going to appear. If the bugs do not come and the crops are all right, we sit there with Paris green in our hands. If the bugs do come, it is a question of having sufficient Paris green to supply the needs of the farmers. Last year, when I was up before the Finance Committee of the Senate, Senator Williams protested against the statement I made. I said that the manufacturer was getting approximately 15 cents a pound for his Paris green from year to year. He said, "I have paid 75 cents a pound." I told them that I wanted that committee and I want this committee to understand who gets the profit; how much the farmer is going to be benefited if you put Paris green on the free list. He is not going to be benefited one single iota, because the fellow who has the Paris green that the farmer needs is going to get all the money ho can get out of the farmer. If he does not get it, he is going to carry it over, and it isn't worth house room, because we do not want that kind of poison lying around. If there is a demand for it and the farmer must have it, he' will get a dollar a pound for it. I have shipped a carload of Paris green from New York to Texas by express, because they had to have it. We paid enormous express rates on a carload 30,000 pounds of Paris green to get it down there to meet an extreme situation. If Senator Williams had to pay 75 cents for a pound of Paris green, I wish I were a dealer rather than a manufacturer. We are getting approximately 13 cents a pound for it, and it costs us about \'2 cents a pound, I think, at the present time to make it. We are making about a cent a pound profit. It costs more than 12 cents a pound if I have to go into the market now and buy my materials at the present market price and sell it at 13^ cents a pound \"2l cents a pound, which is the price it is being sold for, to be exact about the matter. It will have to go very much above 13 cents Then- is too close competition. We are satisfied with a small ju-oiit, but it you wipo it out we are not going to take any chances. SCHEDULE A. 341 PARAGRAPH 56 PAINTS, COLORS, ETC. What would be the result if we had no Paris green here ? You can readily see what would become of the crops. We think we are bene- factors in a sense. We think we help the development of agriculture in this country. Mr. HILL. The general opinion is that you are robber barons. Mr. SOMERS. I would like to know why, Mr. Hill. Will somebody please let me know why? There is no combination. There is not even a gentleman's agreement. There is no connection between us; no connection one with the other; absolutely nothing. It is an open business, with the keenest kind of competition that you can conceive of. I am representing other people here, but they will tell me no more about their business than they will tell Beelzebub. They say to come down and make a protest, and I do it in their behalf, because it is my bread and butter, as it is theirs. I am only fighting for a situation that will enable us to do business as we have been doing it. We do not ask that you give us 15 per cent, as at present, but that you give us at least as much as Canada gives her manufacturers. Mr. PAYNE. Have there been any large quantities of it sold at 50 or 75 cents ? Mr. SOMERS. I know of large quantities sold at 40 cents a pound. Mr. PAYNE. The same article that you sell at 13 cents a pound? Mr. SOMERS. Yes, sir. Mr. PAYNE. If we take this tariff off and that profit of yours should go glimmering, if you sell your goods at eleven and a hah* cents a pound can the farmer save anything? If it goes through the mid- dleman they would save one and a half cents a pound, perhaps, or on a hundred pounds a dollar and half ? Mr. SOMERS. Or less. Mr. PAYNE. And that would amply compensate him I want you to understand this theory that would amply compensate him for taking the tariff duty off on all his products, to the ultimate benefit of the consumer in your line. That is the theory, and you ought to square off your Democratic politics with the theory of this com- mittee and the prevailing theory of the Democratic Party. Mr. SOMERS. I have not altogether agreed with that theory. I appreciate it. I have listened to-day very carefully, and I appre- ciate it, but at the same time it does not meet the situation that I am trying to describe. We are in this position: You are going to take Paris green off of the dutiable list and put it on the free list. You are going to open the doors to the Canadians who are protected from any other countries. We could not go there. They have closed their doors against us. You open the doors to them here and make it impossible for us to do business under legitimate conditions. You are going to create a situation that will put the farmer in the hands of the foreigner, who may or may not buy Paris green, as he pleases. That is the situation. Mr. PAYNE. Where do the Canadians get the materials from which they manufacture ? Mr. SOMERS. I think in Canada. Mr. PAYNE. Where do they get blue vitriol ? Mr. SOMERS. They get it from the Northwest and export it. Mr. PAYNE. Do they not have to send to the United States to get their materials ? 342 TARIFF HEARINGS. PARAGRAPH 56 PAINTS, COLORS, ETC. Mr. SOMERS. They buy it cheaper than we can. They pay no duty on it there. They buy it at a price less than ours. Mr. PAYNE. Is this not heresy, to say that one manufacturer sells cheaper aboad than at home ? Mr. SOMERS. I do not know whether it is heresy or not. If it is, I don't care. I am willing to stand on my position, however I may be regarded. Mr. KITCHIN. If Canada did not have this 10 per cent tariff against Paris green, you could ship to Canada and sell there ? Mr. SOMERS. Yes, sir; we could go into Canada and give them a run for the trade, particularly if they had free access to our markets. We will be satisfied to have them come to meet us on the same basis. All we want is to meet {hem on the same platform. I do not believe that you ought to build a higher platform for one and a lower platform for the other. We want an equal chance. This is a serious matter, and I do not know anything in the whole business that we are more con- cerned with than we are with the duty on Paris green. We submit, in conclusion, that you ought to at least give us the same consideration that Canada gives to her manufacturers, and that is at least 10 per cent on Paris green. I want to thank the committee for indulging me and allowing me to take up so much time. Mr. PAYNE. The only thing that surprises me is that you did not appear here four years ago and argue as to the fact that as we were putting 15 per cent on Paris green that we ought to put 15 per cent on all colors, because you seem to make that same argument in regard to coal-tar dyes. Mr. SOMERS. I appeared before the committee four years ago. Mr. PAYNE. But you did not make any such suggestion as that. Mr. SOMERS. If you will remember, Mr. Payne, I was one of the first witnesses called on the first. I suggested that I did not know what was in the minds of the committee, and you very frankly said that you were in the same attitude, that the committee scarcely knew what they expected to do with the tariff. I had nothing upon which to base my argument, as I have here. I argued generally before the committee before. I have before me now House bill No. 20182, and I had an idea of the points in the minds of the majority of this com- mittee, and that is why I addressed myself specifically to those items. 1 thank you very much. The brief above referred to by Mr. Somers is as follows: COMMITTEE ox WAYS AND MKANS, House of Representatives, Washington, D. C. GENTLEMEN: Assuming that your committee is considering changes in the tariff along the lines proposed in H. R. 20182, we beg to present herewith a few important facts showing why the changes suggested in certain paragraphs would discriminate against the color manufacturers of the United States. Section 56 of the present tariff imposes a 30 per cent ad valorem duty on all paints, olors, pigments, etc., n. o. s. Paragraph 68 of H. R. 20182 reduces the duty from 30 per cent to 20 per cent ad valorem. The colors included in section 56 for the most part contain considerable quantities of coal-tar dyes, at present dutiable in paragraph 15 of the law of l!'u;t at 30 per cent ad valorem. Paragraph 21 of H. R. 20182 proposes a reduction of 5 por cent, making the duty 25 per cent ad valorem. There is also used in the manufacture of the colors above referred to considerable quantities of alizarin, p_aranitraniline, and alpha aaphthylaruine, all of which are at present free of duty. Under paragraph fi of H. R. 20182 'it is proposed to put a 10 per SCHEDULE A. 343 PARAGRAPH 56 PAINTS, COLORS, ETC. cent ad valorem duty on alizarin, and under paragraph 24 of H. R. 20182 it is proposed to put a 10 per cent duty on paranitraniline, alpha naphthylamine, and other similar anilines, many of which are used in the manufacture 01 dry colors, but \\hich are now on the free list. The situation presented to us is that it is proposed to reduce the duty on poods we manufacture in competition with Europe from 30 per cent to 20 per cent, while imposing a duty of 10 per cent on many of the anilines that we use in the manu- facture of these colors, and which are now free; also by reducing the duty on other coal-tar dyes from 30 per cent to 25 per cent only. This is a clear discrimination against the manufacturer of dry colors in the United States. If it is desired to reduce the duty on dry colors from 30 per cent to 20 per cent the duty on coal-tar dyes should be reduced from 30 per cent to 20 per cent, and alizarin, paranitraniline, and alpha naphthylamine should remain free of duty, inas- much as they are not manufactured in this country, and must be imported from abroad . This seems to us a conclusive argument. VERMILION RED CONTAINING QUICKSILVER. Under the law of 1909 paragraph 52 imposes a duty of 10 cents per pound on this material. In H. R. 20182, paragraph 64, it is proposed to reduce this duty to 15 per cent ad valorem, or not less than 7$ cents per pound. We ask that when con- sidering this reduction the duty on quicksilver be taken into account, as unless the duty is reduced on quicksilver in proportion to the reduction made in the duty on vermilion red containing quicksilver, we will be entirely excluded from our home market. We pointed out in a former brief, submitted to the Committee on Finance of the United States Senate on March 19, 1912, that during the year 1911 about 90,000 pounds of vermilion red, carrying a duty of 10 cents per pound, were imported. This is a very large percentage of the total amount consumed in the United States, and any further reduction in the duty that did not carry with it a corresponding reduction in the metal from which the vermilion is made would simply turn the business entirely over into the hands of the foreigners. We submit this for your earnest consideration. PARIS GREEN. Under paragraph 57 of the law of 1909, Paris green is dutiable at 15 per cent ad valorem. H. R. 20182 proposes to put the article on the free list. We pointed out in a brief submitted to the Senate Finance Committee in March, 1912, that there was the keenest competition among the manufacturers in this country on this article. We also called attention to the fact that we were discriminated against by Canada, who imposed a duty of 10 per cent on American Paris green, thus keeping us out of that market. If you put Paris green on the free list, you will invite the Canadian manufacturer to sell his goods in this country at a price lower than that at which the American manufacturer can compete, and his Government protects him in the exclusive enjoyment of the home trade. This does not seem a reasonable attitude for your committee to take toward the manufacturers in this country. In the discussion before the Senate Finance Commit- tee in March, 1912, it developed that there was a feeling that the manufacturers were asking an exorbitant price from the farmers for Paris green. The fact is that Paris green has been selling for approximately 13 to 15 cents per pound for several years. We know that in some cases retailers have charged 30 cents and as high as 50 cents per pound for Paris green to farmers when they needed it, but the manufacturers never got above 15 cents, so if an exorbitant price has been exacted from the consumer, it has been exacted by the small dealer, and not by the manufacturer: and if the removal of the 10 per cent duty now on Paris green would flood the market with imported green, it is fair to assume that the dealer would ask just as high a profit at a time when the farmer actually needed the green, and, consequently, the latter would enjoy no benefit of this apparent reduction in the first cost. Fifteen per cent is approximately our profit. If you take it away, you wipe out our business. We believe that we are entitled to at least as much consideration as is the Canadian manufacturer, and that at least a 10 per cent duty should be maintained. The raw materials used in manufacturing Paris green are blue vitriol, arsenic, soda ash, and acetic acid. It is out of the question to think of importing acetic acid, because of the large content of water, so that putting it on the free list means noth- ing. Soda ash, which costs about five-eighths cent per pound, is made dutiable under paragraph 21 of H. R. 20182 at one-eighth cent per pound. Arsenic is free and blue vitriol is also made free. The latter article is largely exported, and the only 344 TARIFF HEARINGS. PABAGBAPH 56 PAINTS, COLOBS, ETC. importations that we have been able to trace in recent year*- have been importations of American-made blue vitriol sent abroad and shipped back to this country, so that while it appears that the material costs us no more than it costs the foreigner, it is a fact that the difference in labor is more than the 10 per cent asked for by the manu- facturers. This is something that we do not care to discuss exhaustively, as you have information on the subject that is perhaps more conclusive than any we could bring to you. We ask, therefore, for at least 10 per cent on Paris green. Permit us to respectfully ask whether it be a good policy to produce such a condition that the farmers must wait upon the pleasure of English and German manufacturers for 7,000,000 pounds of their most important insecticide? When the "bugs" begin to appear the farmer sends out urgent appeals for quick deliveries of Paris green. We buy our chemicals in the autumn, make our green in the winter and wait until early summer to sell it. Sometimes, the "bugs" don't appear to any extent and we have to carry over a large stock of green to the next season. If the farmer has to rely upon foreign green, a shortage of it would often send prices up to fabulous figures. The demand for green from the farmers depends entirely on the number of "bugs" which appear during the season. This makes the manufacture of green a speculative business and even under present conditions, we makers are apathetic in regard to producing it. Again, elaborate Federal and State laws exist to-day as to the proper method of making the green; the preventing of its being in any way adulterates; the restricting of the amount of soluble arsenic which it may contain; the way in which this poison may be distributed; the kind of package it shall be put in, with its net weight of contents. The law makes us state on every label that the amount of arsenious oxide combined with copper is not less than 50 per cent. We have to pay for a license in most States before we can offer these goods for sale. The retailer in these States can be arrested and fined if the green he sells does not conform to all the laws of his State. The law on these subjects varies in the various States. Let us suppose that a steamer brings in 50 tons of green and it is found that it doesn't exactly conform in composi- tion to the Federal laws and also that the farmers are crying for green. Would the Government reject this lot and let the "bugs" eat up the crops, or would they let the farmer have any kind of green that Europe might please to send us? Then would the various States permit the sale of a green that did not comply with their State laws? BLUES. Blues, such as Berlin, Prussian, Chinese, etc., are now dutiable under paragraph 43 of the law of 1909 at 8 cents per pound. H. R. 20182 proposes, in paragraph 57, to make the duty 20 per cent, or not less than 3 cents per pound, or a reduction of about 62 per cent in the duty. The Ways and Means Committee report No. 325 sho.rs that 190,000 pounds of these blues were imported in 1911, having an average value of 18 T % cents per pound. The proposed duty of 20 per cent would therefore be 3f cents per pound. This brings the duty paid cost to 22 cents per pound, which is below the cost of making these blues in this country. The chief ingredient of these blues is prussiate of potash, now dutiable at 4 cents per pound, which it is proposed to reduce to 1J cents. This is an apparent reduction in our favor of 2f cents per pound. But it must be borne in mind that it takes 120 pounds of prussiate of potash to make 100 pounds of Prussian blue. On this basis, the reduction amounts to only 2J cents per pound. There is only a very small amount of pruspiate made in this country, approximately 75 per cent of it being imported from Europe. The normal average price which we have paid for prussiate for the past few years has been about 13 cents per pound. The powerful chemical trust in Europe has now advanced the price to 16 \ cents per pound, and we are wholly at their mercy. There are but few agencies in this country from whom we can buy the foreign-made prussiate, and when we make a contract we do not know whether we are to receive German, Belgian, or English prussiate. On account of foreign competition, even at the duty of 4 cents per pound, the largest manufacturer in this country has been forced recently to go out of business. A reduction in the duty on blue means an increased importation, with a very much reduced revenue to the Government, whereas it is clear to us that the present importation of blue, paying a duty of 8 cents per pound, nets the Government a much higher revenue than would possibly be expected under the proposed order of things. At the same time it does not give the American manufacturer control of the home market but keeps him in sharp competition with his competitors abroad. SCHEDULE A. 345 PARAGRAPH 56 PAINTS, COLORS, ETC. We therefore ask for such consideration as an American manufacturer is entitled to. We do not ask for protection, nor for a tariff that will prohibit competition. We invite competition, but would ask to be permitted to enjoy a share of the trade on the same platform with outsiders. We do not believe that we are getting this consideration under H. R. 20182, but, on ' the contrary, are being seriously discriminated against. We do not oppose the reduc- tion in other colors that we manufacture, because corresponding reductions seem to have been made in the pigments used in their manufacture, but in the particular cases that we have pointed out it seems to us that the committee has not been fully informed of the effect of the proposed changes. CONCLUSION. We believe that the maximum revenue will be produced by equalizing the duty between coal-tar dyes, etc., and the dry colors made from the same. We also believe, with respect to Paris green, that placing the article on the free list will wipe out whatever revenue the Government now enjoys, and there is Paris green imported even at the present duty of 15 per cent. With respect to Berlin, Chinese, and Prussian blue we believe that the duty on these articles should not be lower than 8 cents per pound, if the revenue-producing principle is to be maintained. The principle of tariff reduction is not lost by the adoption of our suggestion, as there are many reductions in other items that we manufacture against which we make no protest, because of the reasons pointed out. All of which is respectfully submitted. ARTHUR S. SOMERS, Representing Dry Color Manufacturers. JANUARY 6, 1913. BRIEF OF THE ROESSLER & HASSLACHER CHEMICAL CO., ON CERAMIC COLORS. NEW YORK, January S, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Committee on Ways and Means, House of Representatives, Washington, D. C. SIR: We respectfully petition that the present rate of duty on ceramic colors, 30 per cent ad valorem, be retained and remain unchanged. For the reason that these colors are metallic and vitrifiable prepa- rations and substances, in powder and liquid form, composed of metal oxides with fluxes, to assist their melting. The ceramic colors are also used by amateur artists for china and glass painting, and put up in vials and tubes separately or mixed with oil. The rich color elfects being principally obtained by the use of precious metals, which limit their consumption to beautifying china and glassware, etc., making them more a luxury than a neces- sity of life. CLASSIFICATION UNDER PAYNE- ALDRICH TARIFF ACT, 1909. SCHEDULE A. Chemicals, oils, and paints. Paragraph 56 : Ceramic colors proper, 30 per cent ad valorem. Imports, 1910-11, S16,334; 1911-12, $12,323. Artists' paints or colors (in bottles, packages, tubes, pans, cakes, etc.), 30 per cent ad valorem. Imports, 1910-11, 880,130; 1911-12, $106,940 (75 per cent ceramic colors and 25 per cent water-color paints). 346 TARIFF HEARINGS. PABAGRAPH 56 PAINTS, COLORS, ETC. SCHEDULE B. Earth, earthenware, and glassware. Paragraph 110 : Fusible enamels, 25 per cent ad valorem. Im- ports, 1910-11, $15,511; 1911-12, $14,604. FREE LIST. Paragraph 576 : Glass enamel white for watch and clock dials, duty free. Imports, 1910-11, $21,702; 1911-12, $17,981. White glass enamel, known as a color rather than an enamel, and a material for making color, rather than an enamel itself, heretofore duty free, according to recent decisions of the United States Court of Customs Appeals, Treasury Decision 32983, November 21, 1912, is now dutiable as ceramic colors at 30 per cent ad valorem. SCHEDULE M. Pulp, papers, and books. Paragraph 412 : Decalcomanias in ceramic colors, weighing per 1,000 sheets, 20 by 30 inches, under 100 pounds, 70 cents per pound and 15 per cent; over 100 pounds, 22 cents per pound and 15 per cent; all others (except toy), 40 cents per pound. Imports, 1910-11, $176,481 ; 1911-12, $171,838. Description of ceramic colors. The ceramic colors are a distinct article of commerce, comprising a great variety of vitrified prepara- tions, commonly known as stains, color bodies, fluxes, fusible enamels, enamels (over and under glaze), glazes, etc., only suitable in coloring and decorating metal, porcelain, glass, pottery, and other earthen and clay wares. The ceramic colors differ essentially from all other kinds of pig- ments, paints, colors, and dyes used for house painting and in the textile industries, since their application to develop the colors, bringing out the rich color effects and fix the same permanently on the ware, requires a firing process at a high temperature ranging from 900 to 3,000 F. (Exhibit A, price list ceramic materials No. 12, recently issued.) The manufacturing and marketing of these ceramic colors is more difficult than other lines of trade, since with the change of fashions in shades and colors, the matching of shades requires a well-trained and competent staff for research work, meaning considerable expense in time and money. Their manufacture necessitates experiments with costly raw materials before the desired shade effects are obtained. Large stocks of both raw materials and finished products are con- stantly kept on hand, which with the change of fashions do not find a ready sale. Tariff. This industry, although established by us in this country nearly 30 years ago, has made only slow progress, due to the fact that the customs duty has at no time been adequate to equalize the advantage which centuries of experience give to the products manu- factured in England, Franco, Germany, etc. The present duty of 30 per cent on ceramic colors is too low a rate of duty considering the duty carried by their raw materials, being generally the same and in some instances considerably higher, there SCHEDULE A. 347 PARAGRAPH 56 PAINTS, COLOBS, ETC. being no counterbalance for the higher cost of skilled labor, apparatus, machinery, materials, and supplies in general. In all previous tariffs ceramic colors have been dutiable at 30 per cent ad valorem. Under the Dingley Tariff Act, 1897, litigation arose on account of some of the ceramic colors containing chrome, lead, and zinc, to have the same classified under the low paint and color schedule at a few cents per pound, not at all consistent with their value, when some of the more expensive colors, like maroons, purples, rubies, etc., the basis of which are the precious metals, are worth up to $20 per pound. A manifest error of the Dingley Act was recognized and rectified in the Pavne- Aid rich Act of 1909 by specifying that the ceramic colors be made dutiable at the proper rate by making special provision for ceramic colors according to the enactment of the following paragraph: "All glazes, fluxes, enamels, and colors used only in the manufac- ture of ceramic, enameled, and glass articles, thirty per centum ad valorem." The white glass enamel, for watch and clock dials, duty free, having been held to be untenable, and fusible enamels enumerated under the glass schedule, continued from previous tariffs, dutiable at 25 per cent ad valorem on scientific principles, as both these materials contain metallic oxides, should in fact be listed as ceramic colors and be dutiable at 30 per cent ad valorem. Approximate duty revenue (average 2 years' imports). [Payne-Aldrich Tariff Act, 1909.] Ceramic colors. Values. Duty rates. Ceramic colors proper $14,329.00 30 per cent ad valorem. Artist's paints *or colors (75 per cent eers>tiiic colors) 70, 152. 00 Do. Fusible enamel ... 15, 058. 00 25 per cent ad valorem. Glass enamel, white.... 19,842.00 Free, now 30 per cent. Total 119,381.00 Approximate revenue. .. 34,911.40 Artist's water-color paints (25 per cent artist's paints) 23,483.00 30 per cent ad valorem. Approximate revenue . 6,344.90 Decalcomanias in ceramic colors, total 172,661.25 Various rates. Approximate revenue . 67, 418. 00 Suggested modification of duties. Ceramic colors proper: Artist's ceramic colors in tubes, etc.; fusible enamels, glass enamel white, $119,381 (30 per cent ad valorem). Approximate revenue, $35,814.30. Artist's water-color paints (25 per cent artist's paints), $23,483 (30 per cent ad valorem). Approximate revenue, $6,344.90. Although the ceramic color item is not very large, the same offers a good opportunity for revenue, since the ultimate consumer is per- fectly willing to pay for the luxury of beautifully decorated china, tableware, and vases. From a revenue point of view any reduction in duty would not be counterbalanced by an increase in the imports, and as the ceramic colors are used primarily in the fine arts, for deco- 348 TARIFF HEARINGS. PARAGRAPH 56 PAINTS, COLORS, ETC. rative purposes, which are a luxury, the question of duty can there- fore be regarded more as a revenue-bearing proposition. We therefore petition that the present duty of 30 per cent ad valorem on ceramic colors be retained. Respectfully submitted. THE ROESSLER & HASSLACHER CHEMICAL Co., Louis RUHL, Assistant Secretary. POMEROY & FISCHER, NEW YORK, N. Y. NEW YORK, December 23 ,.191 2. Hon. OSCAR UNDERWOOD, Chairman Committee on Ways and Means, Washington, D. C. DEAR SIR: Replying to yours of December 5, we present our view on the tariff rates for paints, colors, and varnishes under Schedule A. We have arranged the matter as far as possible under the head- ings suggested in your letter. In general the present average rate of duty is 32.22 per cent (1). On the other hand, this class of goods is produced with a minimum of labor, which the United States census places at 7 per cent (2). Certainly a duty of more than four times the total labor cost is absurd. Our total exports are over seven million and our imports but two million dollars (3). A study of the Government report cited will sho\v that our exports are growing fast, having more than trebled between 1900 and 1910, whereas imports have increased but 25 per cent in the last five years. In other Words, domestic makers compete with ease in the world's markets and are gradually forcing foreign goods out of the home market. Our total consumption of this class is $200.000 (4). of wliich foreign goods comprise but 2 per cent. Tims it is evident that the present duties do not simply protect, they prohibit. That the American manufacturers do not desire such grossly unfair conditions is amply proven by the reports of the hearings before the Payne committee (5) as well as by the statement of ex-Gov. Murphy before the Senate Finance Committee early this year. From the volume of imports and average rate of duty already given it is clear that this great industry furnishes a revenue of less than 8700,000. A lower duty would produce more revenue, put a wholesome and much-needed restraint upon the price and quality of American goods, and yet deprive the domestic manufacturer of no legitimate profit. Our experience of 25 years leads us to believe that paints, colors, and varnishes need no duty as a protection, but that an average rate of 10 per cent would produce the greatest possible revenue. Free entry might possibly increase the present insignificant imports by tenfold and a 10 per cent duty by fivefold, thus nearly doubling the present revenue. A reduction of the present average rate of 2 per cent to 25, 20. or 15 per cent would have little effect on imports or revenue. The 10 per cent rate is needed to produce any competition worthy the name. SCHEDULE A. 349 PARAGRAPH 56 PAINTS, COLORS, ETC. Price control of at least four items in this group is exercised by trusts, pools, agreements, etc. We refer to white lead, zinc, Englisn or quicksilver vermilion, and ultramarine blue. To prove this generally recognized fact would carry us far beyond the limits of this article, and we leave it with the suggestion that your committee most carefully investigate the matter. Packages and containers now enter free when containing free or specific duty goods, but pay the same rate as their contents when holding ad valorem goods. This is so manifestly unfair as to need no comment. Ad valorem package should be free as well. The trade data concerning a number of articles of this schedule furnishes a stronger argument for lower rates than the general figures given. We will now touch briefly on a few items with which we are familiar from long experience. WHITE LEAD. White lead, dry or in oil, paragraph 53. We believe this article and its associated products, red lead and orange mineral, should enter free. Lead is the most highly protected of the industrial metals and its derivative. White lead is equallv burdened. Its present duty of 2\ cents per pound is 51 per cent of to-day's London price and averaged 42.44 per cent upon the goods imported in 1911 (6). Our present domestic production is 132,612 tons (7), whereas our imports are but 330 tons (8) or O.OOJ per cent as much. Records of exports of white lead have only been kept since last July, but they indicate them to be at the rate of 8,500 tons annually (9), or 26 times the imports. These records do not separate dry lead from that ground in oil, so it is impossible to compare the export price with that charged the American consumer. To our minds there is no doubt, however, that the export rate is lower by a considerable per cent. This belief is supported by a letter just received from a correspondent in Holland, who says, "As for prices, we beg to point out that American white lead in oil in Holland as a rule is f. 2.50 to f. 3 per cent kilos cheaper than the true Dutch white lead in oil." The trade is undoubtedly controlled by the National Lead Co., which probably produces 65 to 70 per cent of the country's output. This company in turn is said to be owned by the American Smelting & Refining Co. interests, which again, we believe, controls the metallic- lead market. Recently the press announced that this group had formed an international pool or trust, whose power was immediately manifested. We had hardly learned of this pool before we received the first of a series of cables from the English corroder we represent, announcing increases in the price of white lead. A further and most startling evidence of the great power of this company was a statement made by one of its officials to the writer to the effect that they regularly export dry lead in large quantity to the English factory above mentioned and that they similarly sell every corroder in England. When our manufacturers can lay their 350 TARIFF HEARINGS. PABAQBAPH 56 PAINTS, COLOBS, ETC. product down at the doors of their foreign competitor so much cheaper than he can make it as to lead to large and steady sales, is a protection of 40 to 50 per cent needed? The National Lead Co. is supposed to make about 65 per cent of our output, or 86,198 tons. Were this material imported, the duty would be $4,309,900. Thus we see at a glance the height of the pro- tecting wall erected by a kindly Congress to shield an infant nidus try. Nothing but free entry will have any effect upon this situation, as is amply proven by the fact that the lower duty of 1 cents per pound under the Wilson law only increased the annual imports to 814 tons. Red lead (par. 49) and orange mineral (par. 48) are similar in appearance and identical in chemical composition. They differ only in minor physical respects, and their identification is all but impos- sible to any but experts. This naturally leads to false classification and much trouble. The two articles should bear the same duty. VARNISH. Varnish (par. 51, duty oil varnish, 25 per cent). Pure oil varnishes contain but three major ingredients Unseed oil, fossil gums, and turpentine. The last two enter free, and the first is produced here in quantities sufficient for our needs. As in the case of the other articles mentioned, our imports of varnish are small and declining, whereas our exports are large and growing rapidly. Even the reduction of the duty from 35 per cent to 25 per cent under the present law has not stimulated imports. All these facts are shown at a glance from the following figures (9) : 1903 1907 (35 per cent). 1910 (25 per cent). SI 25 479 $65 483 i$57 156 667 475 961 291 1 050 200 'Oil. 21911. Dom&stic production, 1905, 823,561,099. Surely a duty that allows entry to but one-fourth of 1 per cent of the country's consumption is prohibitive, and little revenue can be expected from it. To produce income the rate must allow of com- petition. The United States census reports tell us that the labor cost for pro- ducing varnish is but 5.1 per cent of its value (10). This does not warrant a duty five times as great. The average declared values of imports and exports must give quite an approximate idea of manufacturing costs. Judged by this standard, foreign goods cost nearly double as much as domestic, the figures being SI. 92 per gallon for the former and 98 cents for the latter (11). These figures are borne out by our own experience, which we will illustrate by two cases. The Navy was recently quoted a quantity of varnish, under the most rigid of specifications, for -?1 .09 per gallon (12), whereas our cost SCHEDULE A. 351 PARAGRAPH 68 PAINTS, COLORS, ETC. in London for a similar grade is $1.82. Our cheapest carriage- finishing varnish costs us over $2.25 in London, whereas we have absolute proof that at least one of the railroads centering in New York buys for $2.05. That the domestic manufacturers do not feel the need of a duty is amply proven by their testimony before your committee at various tunes. Mr. N. B. Arnold, representing the Varnish Manufacturers' National Association, said at the hearing in 1907 : "All varnish in this country is a great deal lower in price than the foreign varnish to-day-" and also, "We go into the foreign countries and compete with the world the goods being sold at a profit." Ex-Go v. Murphy, of New Jersey, one of our largest manufacturers, said to the Senate Finance Committee on March 15 last that so far as he could speak for the industry, as representing one of the largest plants, he would have no objection to the removal of the duty on varnishes. It is thus quite clear that no duty on varnish is needed unless it be to produce revenue. Speaking as the oldest importing house, we believe that a rate of 10 per cent, with packages free, would produce the greatest income. Such a rate might possibly in crease imports by tenfold and the present revenue by fourfold. Even at that imports would be but 1\ per cent of our production and no harm could come to the infant industries. READY-MIXED PAINTS. Ready-to-use paints constitute one of the largest items of domestic production; but they are not specifically covered by the tariff, and if imported would enter under the " basket clause," paragraph 56, at 30 per cent. Records of imports are not to be had; but it is generally known in the trade that they are nil. Data covering exports have only been kept since July last; but it shows shipments at the rate of over 1,000,000 gallons per year (13). It is not pleasant to speak ill of any branch of our industries; but it is well known that adulteration of paints is easily accomplished and with difficulty detected by the consumer. As a result, the practice has become very general and was first exposed in a convinc- ing way by the agricultural experiment station of North Dakota in Bulletins Nos. 70,^86, and others (1906-1909). These reports showed that many large and well-known firms were putting into their paints from 16 to 100 per cent of inert pigments, 5 to 40 per cent of water, and giving short measure at that. These revelations resulted in the enactment of much needed pure-paint laws by a number of States, and the situation is now somewhat improved. On the other hand, our experience is that foreign paints of all classes are prepared much more carefully and with greater regard for the makers' future reputation. We therefore submit as a conclusion that a rate of duty which would permit of some real competition would be of the greatest benefit to the consumer and to the ultimate gain of the domestic maker. 352 TARIFF HEARINGS. PARAGRAPH 56 PAINTS, COLORS, BTO. ENAMEL PAINTS. The rate of duty on enamel paints has been in almost continuous litigation since the enactment of the Dingley Tariff Act in 1897. This has placed a great hardship on both importers and consumers of this article, and we hope your committee will so word your proposed bill that no doubt can exist, either as to the rate of duty or as to whether enamels made without varnish and those made with varnish are to be assessed alike or differently. It is also desirable to make it clear whether or not colored enamels are to carry the same rate as white enamels of their respective classes. Enamels made with varnish consist simply of oxide or zinc ground in varnish, and it seems to us that it should carry the same rate as varnish, its most expensive ingredient. Enamel made without varnish, on the other hand, is oxide of zinc ground in a drying linseed oil and thinned with turpentine. It is, of course, a cheaper product, and it would seem as if it should carry the lesser rate always accorded linseed oil. If an ad valorem rate is de- sired, we believe that nothing above 10 per cent will produce any revenue of moment. At present enamels made with varnish enter at 35 per cent under paragraph 51, and enamels made without varnish, imder the basket clause Xo. 56, at 30 per cent. Comparative records of exports and imports are not to be had so far as we can find. Few American enamels now sell at above $2.50 per gallon, and the Navy Department recently purchased under most rigid specifications for SI. 52 per gallon (14). On the other hand, our own landed costs run from about S2.50 to nearly $4 per gallon according to quality. In closing we would remind you that, though importers, we are loyal American citizens. We desire no advantage over any domestic com- petitor, but simply a chance to meet them on equal terms. Regulated competition is me life of trade, and customs tariffs, to be productive, must permit and not prohibit imports. Yours, very truly, POMEROY & FISCHER, By CHAS. B. GRIMES. REFERENCES. (1) Commerce and Navigation of United State?, Department of Commerce and I. at or, volume 1911,' pages 993 and 994. (2) Census 1910, Bulletin Manufactures of New York State, pages 84-85: Total value of products. 1909 $28, 559, 474 Total wages paid to produce 1, 863, 339 < 'ensus United State?, 1905, volume "Manufactures." (3) Commerce and Navigation of United States, 19] 1. pages 29, 841, 59, and 473: Exports paints, pigments, and colors, 1911 $6,294,746 Exports varnish, 1911 1,074, 264 7, 369, 010 2, 045, 548 57, 156 2, 102, 704 SCHEDULE A. 858 PARAGRAPH 56 PAINTS, COLORS, ETC. (4^ Mineral Resources of United States, bulletin issued November. 1912. (5) Tariff hearings before Committee on Ways and Means, Sixtieth Congress, Sched- ule A, pages 413-468. (6) Commerce and Navigation of United States, 1911, pages 993 and 994. (7) The Production of Mineral Paint in 1911, page 16. (8A) Monthly Summary of Commerce and Finance for October, 1912, page 26. (8) Commerce and Navigation of United States, 1911, pages 993 and 994. (9) United States Census, 1905, Manufactures, part 1, page ccc. United States Census, 1905, Manufactures, part 1, page 350. United States Census, 1905, Manufactures, part 1, page clxxii. Commerce and Navigation of United States, 1911, pages 473 and 841. (10} United States Census, 1905, Manufactures, part 1, pages 336-337. (11) Commerce and Navigation of United States, 1911, page 473 foil varnish). Commerce and Navigation of United States, 1911, page 841 (all varnish). (12) Class 94, opening November 14, 1912. (13) Monthly Summary, Commerce and Finance, advance sheets for October, 1912, page 26. (14) Schedule 4715, class 36, opening of August 13, 1912. BRIEF OF J. W. COULSTON & CO., NEW YORK, N. Y. NEW YOEK, January 8, 19 IS. Hon. Mr. UNDERWOOD, House of Representatives, Washington, D. C. DEAR SIR: Paragraph 56 of tariff act of 1909: Under this para- graph of paints, colors, and pigments, etc., a duty of 30 per cent is paid. Paragraph 117: Under this, iron ore pays duty of 15 cents per ton. Under Treasury Summary 29074 (119 Fed. Rep., 470, and 162 Fed. Rep., 880), oxide of iron in lump form is permitted to enter the United States on duty as iron ore at 15 cents per ton. Not a particle of this iron ore is used for smelting purposes but solely to make powdered oxide of iron. On oxide of iron we pay duty of 30 per cent, or $6 per ton, while the importer of crude material pays only 15 cents per ton. We respectfully ask that in some manner importations of iron ore, used in paints, be assessed at the same rate as the powdered iron ore. V ery respectfully, yours, J. W. CotHLSTON & Co. BRIEF OF THE PAINT MANUFACTURERS' ASSOCIATION OF THE UNITED STATES. ACME WHITE LEAD AND COLOR WORKS, Detroit, Mich., January 10, 1913. MY DEAR MR. DOREMUS: Referring to our recent conference cover- ing the matter of proposed revisions in Schedule A of the tariff and the effect that said revisions would have upon pur industry, wish to say that when this matter was under consideration last March a com- mittee, appointed by the Paint Manufacturers' Association, prepared a statement or brief to be presented in connection with a hearing before the Finance Committee of the Senate. You will, perhaps, remember that no opportunity was given for hearing on this schedule by the Ways and Means Committee of the House. This statement, which 78959 VOL 113 23 354 TARIFF HEARINGS. PARAGRAPH 56 PAINTS, COLORS, ETC. was prepared with considerable care, is applicable in every way to conditions as they exist at the present time. Hence, it occurred to me that it might be as well to send you a copy of same. As our conference was necessarily limited in time and the proposi- tion, as a whole, gone over rather hurriedly, the statement I am send- ing herewith will probably make some matters more clear to you. Trusting that we may have your best cooperation in the way of bringing aoout an equitable adjustment of the tariff, as it affects this industry, along the lines of our conversation, I beg to remain, with kindest regard!, Yours, most sincerely, WM. L. DAVIES, President. Hon. FRANK E. DOREMUS, House of Representatives, Washington. D. C. GENERAL STATEMENT REGARDING PAINTS IN SCHEDULE A. [Paragraph 68, relating to ready mixed paints; paragraph 60, earth paints for all painting purposes; paragraph 63, enamel paints made with varnish; paragraph 50, soya oil, china nut oil and linseed oil: paragraph 37, varnish gums.] Hon. BOIES PENROSE, United States Senate. DEAR SIR: Last fall the Paint Manufacturers Association, which I represent to-day, unanimously passed the following resolution: "Whereas in the opinion of the Paint Manufacturers Association of the United States tariff legislation requires careful and expert investigation in order to insure equitable and adequate protection, and to avoid undue favor through lack of full comprehen- sion of the details of the industry involved; and "Whereas the Paint Manufacturers Association of the United States have already gone on record as approving such investigation and revision of the Tariff Schedule, based on the findings of the Tariff Board: Now therefore "Resolved, That the Paint Manufacturers Association of the United States tender ite cooperation in the event of any possible tariff revision by Congress, and that a copy of this resolution be sent to the President, the members of Congress, and the Tariff Board." No request for any information has been received from those in charge of the prepa- ration of Schedule A, before it passed the House and no opportunity was given us there for a hearing, nor lias the Tariff Board apparently made any investigation into production cost here and abroad, as shown by the absence of any figures of this sort from Appendix C, entitled ''Glossary on Schedule A." It is no wonder, therefore, that the lower duties proposed show lack of familiarity' with the intricacies of The paint business, and to the relation between what are raw materials to the paint grinder, but which are finished products to the dry color maker, from whom he buys; and in like manner raw materials to the dry color maker are in many instances the finished product of the chemical manufacturer, who in turn derives his raw material from the output of the mines bearing the necessary ores; or in the case of the vehicles employed in the making of prepared paints, principally linseed oil, which in turn is the finished product of the crusher of flaxseed, who takes for his raw material the flax, the product of the farmer. ^e notice also the omission of any mention of flaxseed, or of zinc and lead bearing ores, in the preparation of this schedule, though they are directly connected with our line of industry. It is impossible, therefore, to make changes in the tariff on any of these materials without having due regard to the others, and this is why we protest against them, until due consideration can be given to these facts, and data can be procured that will show the costs of production here and abroad. In the short time since the passage of Schedule A by the House we are unable ourselves to furnish any data other than to state that from investigations made the committee of our association reported in 1909, at the time the Payne bill was being considered, as follows: SCHEDULE A. 355 PARAGRAPH 56 PAINTS, COLORS, ETC. "From investigations made your committee is not far wrong in stating that the wages paid in this country are from two and a half to three times greater than are paid for similar labor in most foreign countries. This being true, then to reduce the tariff to any appreciable extent would necessarily mean a proportionate reduction in the wage scale of the people employed in the paint factories, etc." We are able, however, from the Tariff Board's glossary on Schedule A, to observe that the English statistics for 1907 give in round numbers a total cost of $27,000,000 for raw materials of paint and varnish and of $40,000,000 for the value of the product, showing the raw materials to be in the proportion of two-thirds to the value of the fin- ished product, which almost exactly accord with the proportion in this country for 1905, when the cost of raw materials was $60,000,000 and the value of the product $90,000,000, and again in 1910 when the cost of the raw materials was $80,000,000 and the value of the product $124,000,000. This, we think, shows how much care has previously been exercised in preceding tariff measures, including the one under which we are now operating, and that by reason of the present tariff our manufacturers are not selling their product at any higher percentage on ita cost than in England. Yet we are paying higher wages and more for all the expenses of a manufacturing business. The present tariff has produced no trust,pool, or agreement on prices. Internal competition to use the words of another, "Has reduced the price or the article to a minimum of a reasonable profit on the capital employed." In our judgment it is radically wrong to reduce the tariff on paragraph 68, when applied to our particular line of industry, because our products contain a large per- centage of linseed oil, now paying a tariff of 15 cents a gallon which it is proposed to reduce to 13 cents a gallon, equivalent to but 3 per cent ad valorem. Meanwhile, two flax crop failures prevent our buying linseed oil on a world's market basis, as hereto- fore, and thus handicaps us by this proposed 13 cents a gallon. If 2 cents a gallon on oil, then 5 cents a bushel should be taken off flaxseed. It, therefore, to our minds, furnishes no excuse for a reduction of from 30 to 20 per cent on the mixed paints, colors in oil, etc., mentioned in this paragraph, for in these products the price of oil and the tariff thereon determines more largely the cost of the products than any other item. We do not wish to be understood as complaining about the tariff on linseed oil. We believe the farmer should have protection, and have backed that belief by furnishing through voluntary contribution collected by members of our association many thou- sands of dollars for putting into effect methods devised by Prof. Bolley, of the North Dakota Agricultural College, that would produce a higher rate of yield per acre and prevent rust. We believe it is to the interest of the United States that the flax planter should not be discouraged by the prospect of any lower duty on either the seed or the oil which is pressed from it in order that we may again be independent in this respect of foreign countries. Great strides have been made in the scientific preparation of paint, especially during the higher prices of linseed oil, and a use has been found for the soya bean oil to the extent of 5,500,000 gallons imported during 1911, where a few years prior there was practically none imported. Yet it is proposed to transfer this from the heretofore free list and impose a tariff of one-fourth cent a pound. In like manner Chinese wood oil, of which 5,800,000 gallons were imported during 1911, and of very recent use in our industry heretofore free, it is now proposed to tax 5 cents per gallon. We also oppose the very unusual change from the free list to an average duty of 1 cent a pound on all the gums used in the manufacture of varnish. This proposed change, together with the tariff on china wood oil, will increase the cost of perhaps 50 per cent of all the varnishes used, so we are told by the varnish makers. So closely connected are the paint and varnish industries that the line between them can not be drawn, and this will manifest itself in increased cost of many of the preparations made by the paint manufacturers. Paragraph 63, among other things, relates to enamel paints made with varnish. The proposed tariff of 25 per cent is a reduction from 35 per cent, this in spite of the pro- posed changes which increase the cost here, as above stated, of all varnishes, thus in- creasing the cost of enamel paints made from varnish. The paint industry is a large and growing one, having increased 40 per cent in five years and showing sales in 1910 of $124,000,000. We dislike to see any changes made that would jeopardize this growth, and we believe the changes proposed will effect not only the manufacturers of paint, but clear along the line until it reaches the farmer who raises the flax and the miner who produces the ore as well as the laborer employed by them all. 356 TAEIFF HEARINGS. PABAGBAPH 56 PAINTS, OOLOBS, ETC. In the limited time in which this matter has come up there have been passed reso- lutions by local bodies in our line of industry in Boston, New York, and Philadelphia, and also the principal cities, protesting against these changes, and a thorough canvass of the entire trade has shown that the position here taken is unanimously endorsed. Respectfully, PAINT MANUFACTURERS ASSOCIATION OF THE UNITED STATES, HERBERT W. RICE, Chairman, Tariff" Committee* BSIEF OF GEO. S. MEPHAM & CO., EAST ST. LOUIS, ILL. EAST ST. Louis, ILL., January 2, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: We are advised that hearing on Schedule A present tariff will be held January 6 next and that brief statements of facts and suggestions will be welcomed. We are interested in the mining and manufacturing of colors and have a factory at this point. Our principal competition comes from England though on some items we have strong competition from France, Germany, and Spain. The writer during four visits to Europe has carefully looked into the manufacture and production of paints and colors, and finds first that factories in this country are equipped with better machinery than any European factory he visited, but that American factories pay from three to six times as much for labor than is paid in England, Germany, France, or Spain. In England machinery used in the manufacture of paints and colors because of cheap labor cost may be bought at prices which, added to duty and freight, makes the machinery laid down here at East St. Louis at a lower cost than local manufacturers are able to produce, which makes cost of machinery in factory in England about one-half the cost of equipping over here and repairs, an important item, equally as low. The snipping facilities enjoyed by English producers is in itself an important item. As an instance the present rates less than carload on colors from English port to Atlantic seaboard from $2 to $2.50 per ton. Freight on same items from here to seaboard range from $7 to S8.60 per ton, which tells its own story and shows the necessity for protection if American factories are to be operated. We would say that with present duties we purchase considerable quantity of goods from all of the countries named above because they can be laid down at less than they can be produced here and shipped to seaboard and finally the English producer has in colonies of England and great purchasing markets of the world to which British producers are admitted by preferential duties at lower rates than from this country. Is it wise to turn over a still larger share of the trade in the United States to foreign manufacturers by permitting them to dispose of their surplus products in this country to the extinction of American industry and the employment of American labor? We would add that our crude material comes from Illinois, Missouri, Kansas, Arkan- sas, Kentucky, Georgia, Alabama, Tennessee, Michigan, and Wis- consin. SCHEDULE A. 357 PARAGRAPH 69 PHOSPHORUS. We close with the statement that there is no request for reduction in tariff on items covered by paragraphs No. 42, barytes; No. 47, ocher, sienna, and umber earths; No. 54, whiting, etc., and No. 56, paints and colors of all kinds, and a reduction in tariff would only reduce revenue on the material already coming into this country, and permit of bringing into the cheaper grades which now are made in the United States. Yours, very truly, GEO. S. MEPHAM & Co. PARAGRAPH 57. Paris green, and London purple, fifteen per centum ad valorem. See Arthur Somers, page 336. PARAGRAPH 58. Lead : Acetate of, white, three cents per pound ; brown, gray, or yellow, two cents per pound ; nitrate of, two and one-fourth cents per pound ; litharge, two and one-half cents per pound. For acetate of lead, see Grasselli Chemical Co., page 327. PARAGRAPH 59. Phosphorus, eighteen cents per pound. PHOSPHORUS. LAMAR CHEMICAL WORKS WRITES CONCERNING PHOSPHORUS. NEWARK, N. J., January 16, 1918. Hon. OSCAR UNDERWOOD, Chairman, Committee on Ways and Means, House of Representatives, Washington, D. C. DEAR SIR: In reference to the item "Phosphorus" in the proposed new chemical schedule. We respectfully request your committee to report all varieties of phosphorus on the free list in the new chemical schedule. Under the existing tariff, the duty on phosphorus is 18 cents per pound. The manufacture and sale of phosphorus is practically monopo- lized in this country by an English concern, who have their American plant at Niagara Falls. In making phosphorus, labor is an insignifi- cant item in the cost. The necessary raw materials, phosphate rock, charcoal, and limestone, are very cheap and abundant. The main cost is electrical power in the shape of heat. The electric furnace is employed in manufacturing phosphorus, and the Niagara Co. are fortunate in having secured, years ago, cheap power contracts from the electrical power plant at Niagara Falls. The patents on the electric-furnace method of making phosphorus have expired. This Niagara Co. are also joint owners with one of the large chem- ical concerns of the country in a company for manufacturing the compounds of phosphorus. This company for manufacture of phosphorus compounds have a practical monopoly of the manufac- ture in this country of sirupy phosphoric acid and the hypophosphite salts of sodium, potassium, and calcium. Phosphorus is the main ingredient and item of cost in the manufacture of sirupy phosphorus acid and the three above-named hypophosphites ; and without a process for the manufacture of phosphorus here, or without the 358 TABIFF HEABINQS. PABAGBAPH 59 PHOSPHOBTJS. removal of the duty on phosphorus it is impossible for any concern to enter in the manufacture of sirupy phosphoric acid or hypophos- phites. It would be more than foolhardy to set up a plant for the manufacture of these compounds of phosphorus, counting on a continuous supply of the raw material phosphorus from those who control the American market, both with regard to phosphorus and its compounds. Furthermore, the American manufacturer of phosphoric acid, by the membership of its parent house in European price conven- tions, has control of the phosphoric acid that is imported into this country. Here we have the usual order of things reversed; with the high prohibitive tariff on the raw material, phosphorus, and no duty on its derivative, phosphoric acid. The duty on phosphorus was undoubtedly placed thereon at the time when its use was so large in the match industry, but as this use is now a thing of the past, the duty ought to be removed from this raw material, phosphorus. Rather, there ought to be a duty on phosphoric acid, which is the manufactured article. Phosphoric acid is being used in ever-increasing amounts for the refreshing acidulous fruit drinks which are so popular and so refresh- ing. Hypophosphites are used in medicine very largely as tonics. Our company, the Lamar Chemical Works, wish to engage in the manufacture of sirupy phosphoric acid and hypophosphites. For these articles we have developed economical processes, but it would be poor business policy to commercially develop these processes before the duty is removed from phosphorus. We are a young concern, only a few years old, and to take up the manufacture of phosphoric acid and hypophosphites under these conditions would precipitate a war with the old established concerns which would not be otherwise than disastrous to ourselves, a newcomer in this field. The amount of tariff revenue that is derived from the importation of phosphorous at the present time is very slight indeed. The pre- vailing tariff arrangements on this raw material simply perpetuate practical monopoly in this country. So far as revenue is concerned, it would be much better to admit phosphorus free and to charge a slight duty of several cents per pound, for example, on phosphoric acid. This would remove the duty from the raw material and place it upon the finished material and at the same time increase the revenues derived therefrom. Trusting that this request will receive favorable consideration at your hands, and offering our services in case we can supply you with any further information, we beg to remain, Yours, very truly, LAM AH CHEMICAL WORKS, Per iS. TRIPP, Secretary. SCHEDULE A. 859 PABAOBAPH 60 POTASH. PARAGRAPH 60. ' Bichromate and chromate of potash, two and one-fourth cents per pound. POTASH. BRIEF OF NATUEAL PRODUCTS REFINING CO. NATURAL PRODUCTS REFINING Co., Jersey City, N. J., January 2, 1913. The COMMITTEE ON WAYS AND MEANS, Washington, D. C. GENTLEMEN: We manufacture bichromates which are used for tanning, dyeing, color making, etc. The present duty on bichromate of soda is If cents per pound (par. 71 of Schedule A). The present duty on bichromate of potash is 2J cents per pound (par. 60 of Schedule A). The Underwood bill of last session proposed a tariff of only three- fourths of a cent per pound on bichromate of soda and 1 cent per pound on bichromate of potash. Unless we have adequate protection, our business will be seriously threatened by an influx of foreign-made goods, as we will not be able to compete owing to a difference in cost of manufacture of about SI .28 per 100 pounds. This higher cost of manufacture in our country is due primarily to the better rate of wages paid employees and is gone into in detail in tabulation of costs attached. The European manufacturers operate under a trust or pool known as a "carts!" and command a uniform price of 5 cents per pound on bichromate of soda, whereas the price in this country, owing to keen competition is 4f cents to 4| cents per pound. Without sufficient tariff protection the European trust will be enabled to dump their goods in this country even at less than our cost of manufacture owing to their ability to stand an actual loss here by pooling their interests and selling at their own high prices in their markets, thus forcing the American manufacturer out of business and gaining control of the market. It is generally understood that they are enlarging their works in view of the anticipated tariff reduction here with the deliberate purpose of using our market as a dumping ground as above set forth. We respectfully submit the above facts for your consideration and plead for a schedule rate of not less than 1 cents per pound on bichromate of soda and not less than 2 cents per pound on bichromate of potash. The following is an analy- sis of the difference in cost of manufacture of bichromates in the United States as compared with cost in the German Empire. United States. Germany. Labor per 100 pounds. . SI. 00 80.40 Sulphuric acid do .33 .15 General expenses (clerk hire,- chemists, superintendent) do.... 1.00 .50 Total difference . 2.33 1.05 360 TAEIFF HBABINGS. PARAGRAPH 61 REFINED CAUSTIC POTASH. Showing an advantage of $1.28 per 100 pounds in favor of the German manufacturer. These figures were obtained from facts supplied us by a German expert, and also by one of our own representatives who studied con- ditions in Germany before we engaged in this business. Our average wage per man per day in the manufacture of bichro- mates is $2.25, wnereas the average per diem rate in the German Empire is 90 cents. It may be added that rate of freight from points on the Rhine to western cities via Canadian route is practically the same as rates in force from Jersey City to the same points. Respectfully submitted. NATURAL PRODUCTS REFINING Co. PARAGRAPH 61. Caustic potash, or hydrate of, refined, in sticks or rolls, one cent per pound; chlorate of, two cents per pound. REFINED CAUSTIC POTASH. BRIEF OF NIAGARA ALKALI CO. REGARDING PROPOSED DUTY ON REFINED CAUSTIC POTASH. NIAGARA FALLS, N. Y., January 4, 1918. The WATS AND MEANS COMMITTEE, House of Representatives, Washington, D. C. DEAR SIRS: Section 61 of the tariff act of August 5, 1909, in Schedule A is as follows: "Caustic potash, or hydrate of, refined, in sticks or rolls, 1 cent per pound; chlorate of, 2 cents per pound." Our request is that this section be so amended that the words "refined, in sticks or rolls," be stricken put, and the words "containing over 75 per cent true caustic potash" inserted in their stead. We are reliably informed that the underlying reason for the form of the old law was that a large part of the crude caustic potash used in the United States, showing about 65 per cent caustic potash and the balance soda and other impurities, came from the wood ashes of the Canadian lumber camps, and it was intended to allow this to come in free of duty; but the refined or high-grade potash, which practi- cally all came from Germany and was always packed in sticks or rolls, was expected to pay the duty of 1 cent per pound. In recent years the electrolytic process for making caustic potash makes it possible to manufacture high-grade caustic potash of from 90 to 96 per cent direct, arid this, being packed in barrels and drums, evades the duty. The insertion of the words "containing over 75 per cent true caustic potash" would still admit free of duty the crude potash provided same be not a chemical mixture of potash and soda. Thus the proper effect of this change will be to force the present large importations of almost pure caustic potash, packed in drums and barrels, to pay the legitimate revenue to the United States Gov- ernment, which they have been evading in recent years, and at the same time afford the Americ'an manufacturer the incidental pro- tection necessary to his continuing in this business. SCHEDULE A. 361 PARAGRAPH 61 REFINED CAUSTIC POTASH. That he is justly entitled to this consideration we think is shown conclusively in the following pages. That the Government is entitled to the revenue of nearly $100,000 yearly which this duty would produce goes without saying. That no hardship would accrue to the American consumer of caustic potash is plain, from the fact that within the past four years the wholesale price has been reduced by the importers from $120 per ton to around $80 per ton, in their effort to drive the American manufac- turer out of business, and the duty asked would in no case increase the price to more than $100 per ton, whereas the forcing of the Americans out of business will allow the importers to restore the old price of $120, which is really very little lower than the present prices in Europe, protected as they are from American competition by import duties, high freights, and discriminating attitudes of steam- ship lines. As a further guaranty to American consumers, we understand that the importers have assured their customers that they would see that no duty is imposed by Congress, and if one be imposed, the importers will pay same. All the contracts the Niagara Alkali Co. have made provide that there will be, no increase of the contract price on account of duty. Even in case the importers fail to live up to this contract agreement, what with our productive capacity and that of American caustic soda producers who can also produce caustic potash, there will be no possibility of American consumers suffering from the duty. A short statement of the development of the Niagara Alkali Co. will doubtless suffice to put plainly before you the situation so as to demonstrate the fact that the American manufacturer is fully entitled to the incidental protection that would be afforded by the small duty asked. For a number of years previous to 1907 the Roberts Chemical Co., possessed of one of the pioneer electrolytic processes for the manu- facture of caustic potash, operated a small plant in Niagara Falls, using 500 horsepower and producing about 200 tons of 90 per cent caustic potash per annum. The raw material, muriate of potash, which was then and still is used for manufacturing caustic potash, is found only in the vicinity of Stassfurt, in Prussia, and its production is controlled by the German Potash Trust, or Kali-Syndikat of Berlin, Germany, under the auspices of the German Government. The competitors of the Roberts Chemical Co. were the agents of the Griesheim Caustic Potash Trust, some of the members of which also owned mines belonging to the general potash trust mentioned above. The Roberts Co. was warned that it must not attempt to sell its product to the soap or woolen trades, which consumed over 95 per cent of the caustic potash used in America. Should they do so, the importers threatened the price of raw material muriate would be increased and the price of manufactured caustic potash would be decreased until the Roberts Co. was driven from business. Therefore the Roberts Co. confined itself to the small trade obtain- able at around $140 per ton and allowed the impression to be created by the importer that only imported caustic potash could be used by tne soap and woolen trades. 362 TAEIPP HEAE1NGS. PARAGRAPH 61 REFINED CAUSTIC POTASH. Even with this high price, with such a small factory, and with such a high price for raw material, the company could make no money, and gradually went from bad to worse, until at the end of 1907 the plant was shut down for lack of funds to go further. At the end of 1908 some parties holding a mortgage on the property leased the plant and ran it during the year 1909 under the trade name of the Niagara Alkali Co., not incorporated, with the result that a heavy loss was sustained. During the year 1909 the Kali Syndikat was temporarily dissolved and one of the mines belonging to same was purchased by American fertilizer people, who had at the same time purchased considerable phosphate-rock holdings in Tennessee, among which were those belonging to the writer, who is a native of Nashville, Tenn., and who was one of the pioneers in the development of the large phosphate- rock business in that State. Among other interests taken over at the same time was the mort- gage and lease on the old Koberts Chemical Co. The writer was asked to make an investigation of the possibilities of this old business, as a result of which he reported that the old plant was practically worthless, entirely obsolete, and could not be profitably operated. He further advised, however, that with the low-price contract held by the Niagara Alkali Co. for raw material, and with a new plant using an up-to-date German process which would make caustic potash that could compete with the German product in the soap and woolen trades, a profitable business could be established. Negotiations thereupon began with the German owners of one of the best processes for making caustic potash; the old Roberts Chem- ical Co., the American lessees and the mortgage holders, which re- sulted in the formation of the Niagara Alkali Co. (Inc.), ah 1 the old American stockholders of the Roberts Co., becoming stockholders of the new company, the management being placed in the writer's hands. The old plant was put in shape to work to better advantage pending tlae construction of a new plant, and active and vigorous efforts were made to enter the soap and woolen trades. In May, 1910, the first bomb exploded in the new business was the passage by the German Reichstag of the celebrated potash law, which had the effect of raising the price to all American contract holders on raw material muriate of potash almost 100 per cent. Being sure of the fact that the American Government would not permit such discrimination, we proceeded with our work, and in January, 1911, put our new plant in operation and demonstrated our ability to compete in quality with the best German product. In the meantime, at the end of 1909, true to their threat, the importers reduced wholesale prices on caustic potash to the soap and woolen trades to S102.50 per ton, making the new price apply on old contracts, thus preventing our securing any large part of this business for 1910. Similar tactics were pursued in the last part of 1910, the reduction this time being to S95 per ton and again applying to unfilled portions of old contracts. Again in 1911 similar reductions with similar application to old contracts brought the wholesale price to $90 per ton. SCHEDULE A. 363 PARAGRAPH 61 REFINED CAUSTIC POTASH. By January 1, 1911, we became convinced that nothing would be done by the United States Government, and compromised our con- tract with the German Potash Trust at about an 80 per cent increase above our old contract price for raw material muriate of potash. In the meantime we secured a considerable amount of the American business by meeting the prices of the importers, and of course having to go slightly lower to induce users to change. Congress being in session we presented our case, and a bill passed the House in which was imposed a duty of $12 per ton, and fearing this would become law, the foreign manufacturers offered to let us have 40 per cent of the business and raise the price to $110 per ton if we would withdraw our request for duty. This we positively declined to consider, and after the bih 1 failed to pass the Senate, a further reduction w r as made by the foreigners, applying to remainder of 1912 and all of 1913, putting wholesale prices down to as low as $80 per ton. Thereupon we decided to again enlarge our plant to treble its present capacity, using the excess capacity for making caustic soda and trusting to securing a duty from the next Congress on caustic potash. We will have invested by July, 1913, about $800,000 in this country, in excess of cost of process, patents, etc., purchased in Germany, and will have 150 American laborers, clerks, etc., with nearly 40 American stockholders, whose interests we must protect. If we can secure our reasonable share of the American business at prices around $100 per- ton, we can pay the necessarily high American wages, pay the increased price for raw material necessitated by the laws of the German Government, and still pay a reasonable dividend to our stockholders on their large investment. If the original contract price still held, it would amount to a differ- ence to us of nearly $24 per ton of finished product, so that the duty we ask of $20 per ton would not give us back even the advantage of which we were deprived by the German Government. Unless we secure the protection asked we must go out of the caustic potash business and leave the field to our German competitors, con- fining our manufacture to caustic soda, except for the few American consumers who have contracted with us. If we are thus forced out, the American consumers will be made to pay the old high prices again, and hence it can not be to their interest to oppose the duty named. Under ordinary circumstances we would neither need nor ask for protection from anybody's competition. When, however, an American industry is threatened with extinc- tion by the competition of manufacturers working under the wing of a Government which has passed laws forcing that American industry to pay nearly double for its raw material, it is manifestly pioper that the article manufactured from this raw material should be made to pay its just revenue to the United States Government and at the same time afford incidental protection to the American industry. We append hereto various exhibits giving detailed statistics o? pos- sible interest to your committee as bearing upon the subject. 364 TABIFF HEARINGS. PARAGRAPH 61 REFINED CAUSTIC POTASH. We respectfully urge the recommendation on your part that the duty of 1 cent per pound be pJaced on caustic potash and one-half cent per pound on carbonate of potash. We also ask that the present auty of $4 per ton on bleaching pow- der, which is a by-product of our industry, be retained, in view of the fact that there are still more than 50,000 tons of foreign bleaching powder imported into the United States each year and the present American manufacturers can not afford any reduction of prices. Respectfully submitted. H. D. RUHM. Vice President and General Manager Niagara Alkali Co. EXHIBIT A. [Brief of Niagara Alkali Co. Statistics.] The selling price of caustic potash has gradually decreased from 7.52 cents in 1907 to 4.3 cents in 1912, as shown by the following table: [Average selling price of caustic potash per 100 pounds.] 1907 $7. 52 1908 7. 25 1909 5. 91 Jan. 1 to June 30, 1910 5. 38 July 1 to Dec. 31, 1910 5.17 Jan. 1 to June 30, 1911 (large sale of liquid held price up) 5. 26 July 1 to Dec. 31, 1911 4. 89 January and February, 1912 4. 30 Last of 1912 4. 15 The increase in price of our raw-material potash over that originally contracted for at the organization of the Niagara Alkali Co. amounts, for the 95 per cent grade, to $17 per ton. As it takes 1.4 tons of raw-material muriate of potash to make 1 ton of 90 per cent caustic potash, this amounts to increase in our cost of $23.80 per ton of caustic potash, or 1.19 cents per pound. The duty asked for by us of 1 cent per pound could not possibly advance the price beyond the 1910 figures, which are very much lower than the prices paid before we started business. Failure to impose such a duty will destroy this industry and again place the American consumer at the mercy of the German manufacturer. The present price is below even the German cost and their American pales are now made at a loss. They can do this indefinitely, because they sell only one-fifth of their production in this country and receive the old high prices in Europe. We are prevented from getting this advantage by the high freight rates, and in addi- tion the principal markets of Europe i. e., Germany, Austria, Italy, Sweden, and Switzerland all charge an import duty on caustic potash, as shown below: Austria, 0.95 cent per pound; Germany, 0.5 cent per pound; Italy, 0.2 cent per pound; Sweden, 0.25 cent per pound; Switzerland, 0.10 cent per pound. Tho.se countries charging a low duty have correspondingly high freight rates. (Exhibit A 2 omitted in printing and placed in the files of the committee.) EXHIBIT A 3. A. KLIPSTEIN & Co., New York, December 18, 1912. GENTLEMEN: The bill which was introduced in the last Congress and passed by the House, but vetoed bv the President, making changes in Schedule A, chemicals, "will, it appears, be again introduced in practically the same form in the new Congress, which will undoubtedly be railed in extra session about March 15 next. SCHEDULE A. 365 PARAGRAPH 61 REFINED CATJSTIC POTASH. This bill proposes to place a duty of three-fifths cent per pound on caustic potash and one-half cent per pound on carbonate potash, both of which articles have been on the free list for a number of years. They are used by the woolen industry as a raw material, and it seems to us that they should continue to come in free, so as not to increase the price of these raw mate- rials unnecessarily. There will be public hearings on this bill, we understand, on January 6, and we would recommend that already before this time you take steps so that the matter can be properly explained to the Committee of Ways and Means, and especially to Mr. Underwood, the chairman. It will be necessary to act promptly in the matter. If we can be of any assistance to you in giving you any information or points, we shall be very glad to have your inquiries, and beg to remain, Yours, very truly, A. KLIPSTEIN. EXHIBIT B. [To brief of Niagara Alkali Co.] Following invoices show comparison of prices of raw material under (1) Old contract before tax was imposed: INTERNATIONAL AGRICULTURAL CORPORATION, New York, November 18, 1910. Sold to Niagara Alkali Works, Niagara Falls, N. Y., steamship George Washington, at New York: V. P. 250 bags muriate of potash, 56,000 pounds, 99.1 per cent 69,370 pounds, 80 per cent; $1.05 per hundredweight $728. 39 (2) After tax imposed: INTERNATIONAL AGRICULTURAL CORPORATION, New York, February 10, 1911. Sold to Niagara Alkali Works, Niagara Falls, N. Y., steamship Roon, at New York: Z. U. 250 bags muriate of potash, 56,000 pounds, 95.3 per cent=66,710 pounds, 80 per cent; 66,710 pounds, at $1.05 per hundredweight $700. 46 (Duty levied by German Government pursuant to authority contained in bill passed by Reichstag on May 10, 1910), 303.58 dz., 80 per cent=152.99 dz.,K20; 152.99 dz., at M18.60=M2,845.61 680.29 1, 380. 75 (3) Under present compromise contract: GERMAN KALI SYNDIKAT, G. M. B. H., Berlin, SW., 11., August 20, 1912. Sold to Niagara Alkali Works, Niagara Falls, N. Y., steamship Patricia, at New York: V. S. 1,120 bags muriate of potash, min. 95 per cent, weighing gross 102,256 Kos., net 101,600 Kos., testing 97.7 per cent= 124,079 Kos., at 80 per cent=273,560 pounds, at $39.65 per 2.000 pounds, c. i. f . New York $5, 423. 33 Less freight payable at New York at 9 marks per 1,000 Kos. =46.4= M20.40.. 223.50 5, 199. 83 Less 1^ per cent for cash 78. 00 5, 121. 83 Less rebate on consc. salts, 6| per cent on $5,423.33 366. 00 4, 755. 83 EXHIBIT C. [Brief of Niagara Alkali Co. Explanatory.] There is perhaps need of some explanation regarding the distinction to be drawn between the various forms of potash. 366 TARIFF HEARINGS. PABAGBAPH 61 BEFINED CAUSTIC POTASH. As found in the earth in the potash section of Germany, potash exists as muriate or chloride of potassium, just as common salt is the muriate or chloride of sodium. The various forms of this muriate or chloride of potassium mixed with sulphate of magne- sium and chloride of sodium or common salt make up the various raw material potash salts called muriate, carnallite, kainit, sulphate, double manure salt, etc., which are concentrated to varying degrees of purity and sold for use in fertilizers and as the raw materials for the manufacture of different chemical products of potash, such as chro- mate of potash, bichromate of potash, iodide of potash, iodate of potash, chlorate of potash, tartrate of potash, prussiate of potash, citrate of potash, ferrocyanide of pot- ash, and hydrate, or hydroxid of potash which is commonly known as caustic potash. This latter article is the product in the manufacture of which the Niagara Alkali Co. is now engaged and for the production of which this company has a plant at Niagara Falls. The only other American manufacturer ever engaged in the electrolytic production of caustic potash was the Roberts Chemical Co., of Niagara Falls. Under the existing tariff law the various manufactured potash compounds named above are dutiable as follows: Cents Bichromate and chromate of potash per pound . . 2 J Chlorate of potash do 2 Hydriodatc, iodato, and iodide of potash do 25 Nitrate of potash do $ Prussiate of potash, red .do 8 Prussiate of potash, yellow ' do 4 Cyanide of potash ad valorem.. 12J Bitartrate 4 EXHIBIT D. [Brief of Niagara Alkali Co. Letter from E. M. Sergeant.] NIAGARA ALKALI Co., Niagara Falls, N. Y., March 18, 1912. Mr. IT. D. RTJHM, Vice President and General Manager Niagara Alkali Co., Niagara Falls, N. Y. DEAR SIR: Beg to advise that the business of the old Roberts Chemical Co. was managed by me during the year 1909, under lease from the Roberts Chemical Co., to Mr. T. C. Meadows, and during this year there was a loss incurred of between forty and forty-five thousand dollars, due to the reduction in the selling price of caustic potaslv and the high cost of raw material. Very truly, yours, E. M. SERGEANT, Factory Manager. EXHIBIT E. [Brief of Niagara Alkali Co. Letter from F. O. Geyler.] NIAGARA ALKALI Co., Niagara Falls, N. Y., March 18, 1912. Mr. TT. D. RUHM, Vice President and General Manager Niagara Alkali Co., Niagara Falls, N. Y. DEAR SIR: I beg to advise that we had a five-year contract with the International Agricultural Corporation for our supply of raw material, namely, muriate of potash at price of $21 (basis, 80 per cent) per ton f. o. b. New York. After the German Government passed the new law placing an export duty on muriate of potash we were forced 1o surrender our contract and enter into a new one with the Ger- man Kali Syndicate at price of $38.05 (basis, 80 per cent) per ton f. o. b. New York. Very truly, yours, F. 0. GEYLER, Secretary and Treasurer. SCHEDULE A. 367 PARAGRAPH 61 REFINED CAUSTIC POTASH. EXHIBIT F. [Brief of Niagara Alkali Co. Statement of C. H. MacDowell. Extract copied from address before Chicago Division of the American Chemical Society.] SHARP PRACTICE CHARGED. In January the German and the American Governments were negotiating their commercial treaties in accordance with the provisions of the Payne-Aldrich Act. The proposed potash law was not introduced into the Reichstag, and Washington was given to understand it had been dropped. Germany was then given our mini- mum tariff rates. On February 3, 1910, the bill was introduced into the Reichstag, referred to a committee, reported out May 10, and passed May 25, the United States Government protesting vigorously against any action which would impair the American contracts. The debate in the Reichstag shows clearly that the American contracts were the cause of the new legislation. Minister Sydow states: "The starting point for myself and for the United States Government, which rec- ommends you to raise the charge mentioned in paragraph 26 of the law also for the older contracts the so-called Schmidtmann contracts are principally and in first rate at stake," etc. "In the contracts a clause is contained wherein it has been stipulated that any governmental charges would be borne by the purchasers. If, therefore, the parties had to count upon this possibility, if, furthermore, the price has been fixed at an exceedingly low rate and one of the parties undertook to pay any charges in excess, we do not violate, in the opinion of the united governments, in any way the princi- ples of fairness and justice, if we now take the expected measures with regard to these contracts" in other words, gunning for the American contracts through the governmental charge feature of the contracts, and yet they claim there is no dis- crimination against America. Neither Schmidtmann nor the Americans are natu- rally mentioned in the law, but the debates and newspaper articles all show that the syndicate and the Government had resolved to rid themselves of these contracts through hostile legislation. Members of the Reichstag making inquiry were given clearly to understand that the bill would not cause trouble with the United States. The day the legislation was passed, Ambassador Hill was assured by the German minister of foreign affairs that the law as modified would in no way impair or invali- date the American contracts, and Ambassador Hill advised his Government by cable to this effect. The law was promulgated and it became effective May 28. GERMANY KNEW ABOUT SCHMIDTMANN CONTRACTS. Before the law was passed the German Government was in possession of copies of the American contracts, and the official letter returning them is in the possession of our Department of State. EXHIBIT G. [Brief of Niagara Alkali Co.] A paragraph which appeared in a recent issue of a German paper, Zeitung fuer Angewandte Chemie: AMERICAN COMPETITION AGAINST GERMAN CAUSTIC POTASH. [Translation.] "The Niagara Alkali Co., successors of the Roberts Chemical Co., tries hard to com- pete with the German caustic potash products which are mainly sold by the chemical plant of Griesheim Elektron. The company tries to induce the United States Gov- ernment to levy an import duty upon caustic potash. This duty would seriously affect the competition of the German manufacturers. It appears advisable that the German manufacturers, including Neustassfurt and Westerregeln, which forms a part of Kali Syndicate, as well as the German Government, give this matter their timely attention," 368 TARIFF HEARINGS. PAHAQKAPH 61 REFINED CAUSTIC POTASH. EXHIBIT H. [To brief of Niagara Alkali Co.J STATEMENT. In order to show the extent to which the German manufacturers are going in their efforts to put us out of business, I beg to call your attention to the fact that, inasmuch as we were forced to sell at the present ruinously low prices in the United States in order to meet the competition brought about by German manufacturers, we decided we would attempt to sell at these same prices in Germany, where they were holding up the old-time high prices. We found that with the prices quoted we could get a better price in Germany than we had to sell this material in the United States to meet competition, even adding the freight. The first discovery we made was that we had to pay duty to get our material into Germany, which put us in about the same position, leaving us the same price on our German sales as we would realize here at home. We then found out that the German steamship lines had been instructed by their German offices to refuse any caustic potash shipments offered them for Germany and Mediterranean ports. In this way we are debarred from the foreign market by the protection afforded German manufacturers by the German Government and also by the refusal of steamship lines to transport our product to German ports, and we are forced to sell here at home at the sacrifice price which the Germans have made in order to put us out of business. EXHIBIT I. [Brief of Niagara Alkali Co.] Imports of caustic potash. Revenue lost by United Tons. States at 1 cent per pound. 1909.... 8,163 128 $81,631.28 1910 8 304 696 83 046 96 1911 7 069 837 70 698.37 1912 (first 10 mont hs) 7,685,003 76, 850. 03 312, 226. 64 Totnl 1912 basis, first 10 months, estimated, $92,220. Owing to rapid increase in use of caustic potash in the United States there will probably be no decrease in above imports if duty of 1 cent be imposed. EXHIBIT J. [To brief of Niagara Alkali Co. Letter to Representative Simmons.] NIAGARA ALKALI Co., Niagara Falls, N. Y., July 29, 1911. Hon. JAS. S. RIMMOXS, Member of Congress, Washington, D. C. MY DEAR MR. SIMMONS: I have for acknowledgment your kind forwarding of the Daily Consular and Trade Reports for July 25, 19li, containing marked copy of report from the Brunswick consul headed "Peace in the German potash industry." A careful reading of this statement will doubtless convince anyone that the "peace" referred to consists merely in the American purchasers of potash having given up in despair of securing the benefit of low-priced contracts which they had made, and of having accepted the terms of the German potash syndicate, with the hope that they may be able to now overthrow the contracts which they have been for so long at- SCHEDULE A. 369 PARAGRAPH 61 REFINED CAUSTIC POTASH. tempting to defend, and on the strength of which they made every effort to secure American intervention in preventing the German potash law from being applied to said contract. You can readily see that this does not relieve OUR individual situation in the least, but leaves us held to pay the syndicate price, which is practically equiv- alent to our having to pay the tax. That is, if we carry out our present contract made in good faith with the independent mines, we must pay the German tax. If we join with other American interests and claim that these contracts are void, we must then pay a price to the syndicate practically equal to the independent contract price plus the tax, so that the actual result is to leave us within a very few dollars of where we have been all the time since the situation complained of was inaugurated. We are therefore in the same position as to needing relief and feel that the only adequate relief which can be afforded us is the imposition of the 1-cent duty, now applying to refined potash, on all caustic potash imported 85 per cent or over in grade. While it is true that the German manufacturers of caustic potash also purchase their raw material, muriate of potash, from the syndicate, they receive special prices for this raw material used in chemical manufacture, and, being themselves members of the syndicate, have the advantage of the special rebate allowed to such syndicate miners who have chemical plants. In this way they secure their raw material at practically the price we had expected to secure ours from the independent miners, manufacture their caustic potash with cheap labor and under thoroughly established conditions, ship same into the United States, where they have long been established in the market, and we are forced to meet this competition. The matter of price charged for the caustic potash does not enter into the question, as we are perfectly satisfied with the present prices, provided we can secure our share of the business. You can readily see that to do this we must be in position to offer some inducement to American manufacturers who have long been using the imported product, and if with the other adverse conditions already set out we have to still further reduce the price to secure the business we can not make both ends meet. If, however, the imported material is placed at a disadvantage, we can secure the business, the American consumer will pay no more for his goods, and we will be able to meet the German competition regardless of the unfair conditions imposed by the German law. We trust that a thorough realization of these conditions will induce Congress to afford us the relief desired and so eminently justified. Thanking you for past favors and for your further kind consideration of the matter, I am, Very truly, yours,. H. D. RUHM, Vice President and General Manager. ROBERT S. WADDELL, OF PEORIA, ILL, ENTERS PROTEST AGAINST TARIFF ON CHLORATE OF POTASH. BUCKEYE POWDER Co., Peoria, IU., January 8, 1918. CHAIRMAN WAYS AND MEANS COMMITTEE, House of Representatives, Washington, D. C. DEAR SIR : I desire to file the following brief on the chemical schedule : I respectfully protest against any tariff on chlorate of potash, because it will not produce an adequate revenue to justify a protec- tive tariff. There are three plants in the United States manufacturing this chemical by the electrolytic process, located at Niagara Falls, in Ver- mont, and in the Sagmaw-Bay City, Mich., fields. The entire output of these plants is controlled by J. L. and D. S. Riker, 46 Cedar Street, New York City, who, because of such monop- oly, require the public to pay exorbitant profits. The present tariff of 2^ cents a pound enabled J. L. and D. S. Riker to make an agreement with the chemical pool of Europe by the terms 78959 VOL 113 24 370 TABIFF HEARINGS. PARAGRAPH 61 REFINED CAUSTIC POTASH. of which the said American monopolists shall not export any chlorate of potash to foreign countries and foreigners shall not sell or quote prices to the American trade. This agreement prohibits a revenue from all the large manufactur- ers of Europe and nullifies the tariff laws of this country. Will Con- gress legislate to create and foster this conspiracy by continuing the tariff on which it is founded ? Remove the tariff and there would remain no inducement for for- eigners to enter into an agreement to close the markets of this country to themselves. Chlorate of potash costs to manufacture abroad 3 cents per pound in Sweden, 3| cents per pound in France and on the Continent. The Hikers sell at 9 cents, and it costs less than 4 to manufacture it. The Hikers are not innocent violators of the law. John L. Riker was the largest stockholder of the Laflin & Rand Powder Co., and took part in the conspiracy that formed the Du Pont Powder Trust, and his successors will profit by the dissolution that the court has just entered. From one little distribution of the usufruct in that case I extract the following from the record: Delaware investment stock (exchanged) issued to: J. L. Riker. $140, 889. 44 M. J. Riker 11, 300. 54 D. S. Riker 3, 896. 75 J. C. Riker 3,896.75 Samuel Riker 9, 118. 37 W. J. Riker 3, 896. 75 J. J. Riker 1, 169. 02 E. B . Riker 779. 35 S. R. Riker, jr 779. 35 Balance to the Du Pont Trust. The record in The Government v. Du Pont Powder Trust shows that the Laflin & Rand Powder Co., of which John L. Riker was a director, was a party to the "world agreement," dividing the markets of the world between the American and foreign trusts. That agreement prohibited foreign manufacturers from quoting or selling powder to " the Government of the United States of America." I urgently recommend that the tariff law contain a provision that if it be proved to the satisfaction of the President that should any individual, firm, or corporation, protected on any article by a tariff, enter into a conspiracy or agreement dividing markets, or otherwise defeating this Government in the collection of the revenue provided by the act, or shall make an agreement with foreigners to manufac- ture foreign brands in this country, then, in either case, the President shall place such article on the free list. I suggest this as a rebuke to those who, for private gain and to create a monopoly to rob the public, deprive the National Treasury of its just dues. Soliciting the kind consideration of your committee, I remain, Very respectfully, ROBERT S. WADDELL. SCHEDULE A. 371 PARAGRAPH 64 POTASSIUM CYANIDE. PEOTEST AGAINST ANY DUTY ON CHLORATE OF POTASH. THE FIRST NATIONAL BANK, Troy, Ohio, January 24, 1913. Hon. J. D. POST, Washington, D. C. DEAR SIR: The undersigned hereby respectfully protests against any tariff upon imports of chlorate of potash for the following reasons: 1. The present tariff of 2 cents a pound has resulted in an illegal agreement between the American monopolists who control the Ameri- can production of chlorate of potash and the European chemical pool, the effect of which is that the American monopoly is not to export any chlorate of potash to foreign countries and the European monopoly shall not sell or quote prices thereon to the American trade. 2. From this agreement it results that there are no importations, and therefore no revenue to the United States from that source; and the American monopoly charges consumers 9 cents a pound for a product that costs less than 4 cents a pound to produce. 3. A brief that has been filed with the chairman of the Committee on Ways and Means of the House of Representatives by Mr. R. S. Waddell, of Peoria, 111., gives the details of the foregoing statements and also additional reasons why this article should be placed on the free list. You are respectfully urged to use your influence and vote to secure the placing of chlorate of potash on the free list in the interests of the American manufacturers who use that product, and who, by reason of this tariff, are obliged to pay an exhorbitant price therefor, without a cent of incidental benefit to the Government of the United States. Respectfully, yours, JNO. H. DRURY. (A communication identical with the above was filed by Harry C. Downey, on behalf of W. C. Downey & 9., Springfield, Ohio.) PARAGRAPH 62. Hydriodate, iodide, and iodate of potash, twenty-five cents per pound. See also Mallinckrodt Chemical Works et al., page 50. PARAGRAPH 63. Nitrate of potash, or saltpeter, refined, one-half of one cent per pound. PARAGRAPH 64. Prussiate of potash, red, eight cents per pound; yellow, four cents per pound; cyanide of potassium, twelve and one-half per centum ad valorem. POTASSIUM CYANIDE. BRIEF SUBMITTED BY THE ROESSLER & HASSLACHER CHEM- ICAL CO., NEW YORK CITY. NEW YORK, January 4, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Committee on Ways and Means, House of Representatives, Washington, D. C. SIR: We respectfully submit that the two principal commercial cyanide salts be dutiable according to their intrinsic value, as follows: Potassium cyanide, at 2 cents per pound; present duty, 12 per cent = 2 cents per pound. Sodium cyanide, at 2| cents per pound; 372 TAKIFF HEABINGS. PARAGRAPH 64 POTASSIUM CYANIDE. present duty, 25 per cent = 4 cents per pound. Or if, for revenue purposes, a uniform rate of duty be desired, that both potassium cyanide and sodium cyanide be dutiable at 2| cents per pound. Even at the higher rate of dutv, cyanide of potassium can not now be profitably made here, so that an actual increase hi revenue should result. The first proposed duties on cyanides gives the opportunity for a scientific revision, proportioned to their intrinsic values, both as to quality and price. Uses of cyanides. Both the potassium and sodium cyanide are extensively used for electroplating, case hardening, fumigation (the generation of hydrocyanic-acid gas being the best means of destroy- ing scale insects on citrus and other fruit trees), and principally for the extraction of the precious metals from ores and tailings by what is known as the modified MacArthur-Forrest cyanide processes. Value comparisons. Theoretically 100 per cent potassium cyanide contains 40 per cent cyanogen; 100 per cent sodium cyanide, equiva- lent to 132^ per cent potassium -cyanide, 53 per cent cyanogen. The available cyanogen in both salts being the valuable active principal of the cyanide, the potassium and sodium ingredients simply acting as carriers for holding the cyanogen, the molecule of sodium having a larger carrying capacity for cyanogen than the molecule of potassium. Commercially. Potassium cyanide. The highest test for this product is 95/96 per cent, with cyanogen contents of 38.4 per cent. Sodium cyanide, equivalent to 130 per cent cyanide of potassium, has a cyanogen content of 52 per cent. The comparative values of the sodium and potassium salts hence are as 130 per cent is to 95 per cent. Therefore in order to place sodium cyanide on an equal basis with potassium cyanide the duty on the sodium salt should be as 95: 2 cent = 130 :X, making potassium cyanide 2 cents per pound specific, equal to 12^ per cent ad valorem; sodium cyanide, 2f cents per pound specific, equal to 12^ per cent ad valorem; or should revenue be the object in view, a uniform rate for both potassium and sodium cyanide of 2| cents per pound. History. Any reduction in sodium-cyanide duty below 12^ per cent ad valorem would threaten the abandonment of the manufacture of sodium cyanide, same as the enactment of the Dingley tariff act of 1897, making a reduction in the rate of duty from 25 per cent to 12 per cent ad valorem, caused the manufacture of potassium cyanide to be abandoned in this country, and compelling at the same time the ultimate closing down of several prussiate of potash factories supplying the raw material. CLASSIFICATION UNDER THE PAYNE-ALDRICH TARIFF ACT, 1909. Potassium cyanide, paragraph 64, 12^ per cent ad valorem. Present market value, S pence per pound, equal to 16.22^ cents United States currency, f. o. b. European seaport. Twelve and one- half per cent is equivalent to 2 cents per pound specific. Sodium cyanide, paragraph 3, 25 per cent ad valorem. Present market value, 7 pence per pound for 100 per cent, equal to 9^ pence SCHEDULE A. 373 PABAGBAPH 64 POTASSIUM CYANIDE. per pound for 130 per cent, equal to 18.45 cents United States cur- rency, f. o. b. European seaport. Twenty-five per cent equivalent to 4 1 cents per pound specific. Import records under potassium cyanide, which include all cya- nides imported, do not give a true and correct idea of importation or values per unit after deduction of nondutiable charges. For the past six years the identity of cyanides of potassium was in dispute; various sodium cyanide mixtures adjusted to 98-99 per cent cyanide (39 per cent cyanogen) were claimed for entry under the low 12 per cent duty rate. The difference between the various cyanides was finally recognized and definitely fixed by a recent General Appraisers' decision, T. D. 326801, abstract 29108, June 27, 1912, so that under the present laws the import records will hereafter give a true record, enumerating separately the potassium and sodium cyanide salts. According to a second ruling of the Board of Appraisers, T. D. 32823, September 17, 1912, abstract 29723, the mixtures of both cyanide salts in various proportions were also classified as falling under the higher rate of oluty. SUGGESTED MODIFICATION OF DUTIES. Average imports of the last six years, 2,665,775 pounds, $48,603.25. We therefore estimate a revenue as follows: All as potassium cyanide, 2,500,000 pounds, at 2 cents per pound, $50,000; 50 per cent each potassium and sodium cyanide, 1,250,000 pounds, at 2 cents per pound; 1,250,000 pounds, at 2| cents per pound; total, $59,375. All as sodium cyanide, 2,500,000 pounds, at 2f cents per pound, $68,750. _ Or uniform rate for both potassium and sodium cyanide, at 2f cents per pound, $68,750. Witn the proper adjustment of the duty of the two cyanide salts on scientific principles, ample revenue will be provided for the Gov- ernment, and the producer and consumer will be encouraged to develop their opportunities. We therefore petition that the rates of duty for these salts be fixed for potassium cyanide, at 2 cents per pound specific; sodium cya- nide, at 2f cents per pound specific; or on a revenue basis, at a uni- form rate for both potassium and sodium cyanide, at 2f cents per pound. Respectfully submitted. THE ROESSLEK & HASSLACHER CHEMICAL Co., Louis RUHL, Assistant Secretary. 374 TABIFF HEARINGS. PARAGRAPH 65 MEDICINAL PREPARATIONS. PARAGRAPH 65. Medicinal preparations containing alcohol or in the preparation of which alcohol is used, not specially provided for in this section, fifty-five cents per pound, but in no case shall the same pay less than twenty-five per centum, ad valorem; calomel, corrosive sublimate, and other mercurial medicinal preparations, thirty-five per centum ad valorem; all other medicinal prepara- tions not specially provided for in this section, twenty-five per centum ad valorem: Provided, That chemicals, drugs, medicinal and similar sub- stances, whether dutiable or free, imported in capsules, pills, tablets, lozenges, troches, or similar forms, and intended for medicinal purposes, shall be duti- able at not less than the rate imposed by this section on medicinal preparations. For medicinal preparations n. 8. p. f., etc., and calomel etc., see also Mallinckrodt Chemical Works, page 50; Italian Chamber of Commerce, page 108; John F. Queeny, page 82; Verona Chemical Co., page 72. MEDICINAL PREPARATIONS. BRIEF SUBMITTED BY BAITER CHEMICAL CO., NEW YORK CITY. NEW YORK, January 7, 1913. Hon. OSCAR UNDERWOOD, House of Representatives, Washington, D. O. DEAR SIR: We understand that in the contemplated revision of the tariff your committee is about to consider the chemical schedule. In this connection we would respectfully urge: First. That the 25 per cent ad valorem duty on medicinal prepara- tions and chemical compounds be wholly eliminated or reduced by at least 50 per cent. Second. That the duty per pound of 55 cents on medicinal prepara- tions in the manufacture of which alcohol is used be abolished. Naturally the effect of such changes on wages is of primary impor- tance. A revision of the tariff that will in any appreciable degree disturb economical conditions or furnish a pretext for certain classes to dictate terms of employment tending to lower the standard of living can scarcely be viewed with favor. On this point we submit that the manufacture of medicinal preparations in this country is no more expensive than in the principal European countries, Germany and England, for instance. In this cost me item of labor is rela- tively very much smaller than in the case of shoes, clothing, machin- ery, etc. The principal cost lies in the raw materials and expert knowledge, together with the sales cost. Automatic machinery, generally recognized as having reached a higher degree of efficiency and a larger capacity in the United States, thanks to American ingenuity and enterprise, enables the manufacture of such prepara- tions here at a cost as low if not lower than in the Old World. In the trade it is a matter of common knowledge that a large num- ber of American manufacturers of medicinal prepararions annually transact an extensive export business. Many of them maintain branch offices in nearly all European countries; in Australia, South America, and sections of Asia and Africa, successfully competing with similar articles of European manufacture. Placing medicinal preparations and chemical compounds on the free list would not cause or stimulate serious competition by Euro- pean products. This is particularly true of articles protected by SCHEDULE A. 375 PARAGRAPH 65 -MEDICINAL PREPARATIONS. letters patent, where the exclusive right of manufacture is vested in the patentee. Where the patented article is manufactured in Europe the cost to the American consumer is unnecessarily 25 per cent higher through the present rate of duty. In such a case obviously the consumer pays the duty and can obtain the article only from the patentee, as no one in this country can legally manu- facture it. As a matter of fact, the duty of 25 per cent is in actual practice 30 per cent, as no importer wouJd care to handle foreign-made articles on a margin of less than 5 per cent. The result is that American manufacturers can and do keep their prices more than 30 per cent above European parity. A reduction of the rate to even 10 per cent would still be ample protection to the American manufacturer, and would also discourage many of them from advancing their prices more than 15 per cent over those of Europe. It is confidently believed that under an average rate of 10 per cent the Government would derive more revenue than it does at present, and it would seem reasonable to expect that such a reduction in the tariff would result in lower prices on American-made articles and will leave a handsome margin of profit. Here, again, the consumer will be the gainer. With regard to the rate on preparations in the manufacture of which alcohol is used, it is important to remember that the internal- revenue tax on denatured alcohol was abolished some time ago. Hence the present customs duty on preparations of this character would seem to be as unnecessary as it is antiquated. Surely no competition need be feared, inasmuch as denatured alcohol is pro- duced in this country at a lower cost than in Europe. We thoroughly appreciate the diffculty of adjusting tariff duties upon a basis that will meet the approval of all commercial interests without discriminating against any particular industry or geographical section of the countiy. When the rate of duty can be lowered without the probability of profitable foreign competition, without danger of reducing wages, but, on the contrary, to lower the cost to the consumer, plain busi- ness principles, simple justice, and the welfare of the public, aside from any political advantage that might reasonably be expected, would seem to demand that that change be made. Please accept our high appreciation of your courtesy in considering the suggestion herein set forth, and believe us, Very truly, yours, BAUER CHEMICAL Co., By T. W. HEHMEYER, Resident Manager. BRIEF SUBMITTED BY JACOB WEIL, NEW YORK CITY. DECEMBER 21, 1912. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: As chairman of the committee on public health in the board of aldermen in this city, New York, I kindly request you and your honorable body, in connection with the chemical schedule in the 376 TARIFF HEARINGS. PARAGRAPH 65 MEDICINAL PREPARATIONS. proposed tariff bill, to put medicinal malt preparations containing no alcohol on the free list. All medicinal malt preparations that con- tain no alcohol are used in marasmus and atrophy cases in infants. These diseases exist principally amongst the poorer classes through malnutrition. Most of these preparations are used in children's hos- pitals supported by benevolent and charitable organizations. There- fore, I ask you and your honorable body in the name of these institu- tions not to tax them or the sick infants for an article that can not be obtained here, and which does not conflict or compete with any goods manufactured in this country. These malt preparations containing no alcohol have been in use as infant food for about 14 years in the United States with such good results as you yourself can see from the report of Dr. W. H. Guufoy, registrar of the department of health of the city of New York. Deaths and rates per 1,000 children living under 1 year of age: Year. Deaths. Rate. Year. Deaths. Rate. 1898 16,070 203 1905 . . 16,522 163 1899 15,381 182 1906 . . 17,188 164* 1900 16,640 192 1907 17, 437 160 1901 15,467 173 1908 16,231 144 1902 15,526 168 1909 15,976 137 1903. 14,413 151 1910 16,212 134 1904 16, 125 164 1911 15,030 120 If we compare the rate of 1898 with that of 1911, we obtain a decrease of slightly over 40 per cent. If we compare the rate of 351 per 1,000 for the months of July, August, and September, of the year 1898, with the rate of 145 per 1,000 for the corresponding months of the year 1911, we find a decrease of almost 60 per cent. Now, if you and your honorable body will consider the mortality of infants before these medicinal malt preparations containing no alcohol were imported, you readily can realize what great good has been accomplished through the use of them. And as they are mostly consumed by the poor and by charitable institutions, you can clearly see what a true humane act it would be to allow these medicinal malt preparations containing no alcohol to be admitted duty free. As I have stated before, as I am chairman of the committee on public health and a member of the committee on public charities, besides being interested in many charitable institutions, I am in a fit position to see what a great public benefit it would be. Therefore, gentlemen, I pray that you will give this your favorable consideration. Very respectfully, yours, JACOB WEIL. BRIEF OF YAHR & LANGfi DRUG CO., MILWAUKEE, WIS. MILWAUKEE, Wis., January 30, 1913. Hox. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: We wish to call your attention to a proposed change in the tariff on chemicals, and to supplement the facts presented to the Ways and Means Committee by Mallinckrodt Chemical Works SCHEDULE A. 377 PARAGRAPH 65 MEDICINAL PREPARATIONS. of St. Louis. The present duties of 25 per cent ad valorem are not sufficient to overcome the lower cost to foreign manufacturers, and if these rates are reduced, the importation of foreign chemicals, principally from Germany, which has been steadily increasing for years, will compel American manufacturers to discontinue the manufacture of many articles they now produce. We believe that a reduction on medicinal chemicals would not benefit the ultimate consumer, the sick, as the cost of the ingredients in physicians' prescriptions bears little relation to the price charged for compounding the same. The purity of American-made chemicals we believe to be vastly superior, as a rule, to that of like chemicals imported from abroad. American manufacturers of chemicals employ a large number of chemists and skilled workmen, to whom good wages are paid. A reduction of the present duties would probably inflict a material loss not only on the manufacturer, but would cause a reduction of wages and throw a good many workmen out of employment. To our mind, apparently nothing can be gained by a reduction in duties on medicinal and fine chemicals, and we believe a retention of present duties is both rational and hi the general interests of the public. We submit this statement for your careful consideration, believing that you are interested in the prosperity of our own people, rather than to discourage home manufacturers, and to cause them a loss, and to inflict a loss (through their being thrown out of employ- ment), upon our own people also, the American workers. Respectfully, YAHK & LANGE DRUG Co., By L. A. LANGE. BRIEF OF THE J. W. CROWDUS DRUG CO., DALLAS, TEX. DALLAS, TEX., January 81, 1913. The Chairman and Members Ways and Means Committee, Washington, D. C. GENTLEMEN: As large distributors of medicinal and fine chemicals, we take the liberty of submitting the following in connection with the pending revision of the tariff: We assume that the object of the revision is, first, to secure revenue; second, to reduce the cost of necessities to the general public and ulti- mate consumers; third, to protect American workmen and, as far as consistent, invested capital, and to encourage the development of American industries. The duties paid on importations of chemicals in the year 1911 amounted to $834,494. The importation of medicinal and fine chemicals has steadily increased for years, and we believe will con- tinue to increase under present rates of duty. We believe that a reduction of the present rates of duty, particularly of the general clause of 25 per cent ad valorem, while stimulating importations and curtailing the manufacture in this country to the detriment of American interests, would not materially, if at all, increase the revenue. 378 TARIFF HEAKINGS. PARAGRAPH 66 PLASTERS. A reduction of duty on medicinal chemicals would not benefit the ultimate consumer,the sick, as the cost of the ingredients hi physi- cians' prescriptions bears little relation to the price charged for com- pounding the same by the pharmacist. The purity of medicinal chemicals is of far greater importance to the patient than any possible small advance in cost, and we believe the American manufacturers offer a greater security and protection to the jobbing druggist, phar- macist, physician, and patient than could be expected from foreign importers or representatives of foreign manufacturers. American manufacturers of medicinal and fine chemicals have large investments in plants and employ a large number of chemists and skilled workmen. The industry hi this country is still backward compared with foreign countries, notably Germany. A reduction of present rates would probably inflict material losses on American manufacturers, cause a reduction of wages, and throw many workmen out of employment, whereas a continuance of the 25 per cent ad valorem rate and other special duties would doubtless tend to further development, increased employment, and the promotion of prosperity. As apparently nothing can be gained by a reduction of duties on medicinal and fine chemicals, a retention of present duties would seem rational and in the general interest. Submitting the above for your careful consideration, we are, Very respectfully, THE J. W. CROWDUS DRUG Co., GEO. M. WELLIAMS, Vice President. PARAGRAPH 66. Plasters, healing or curative, of all kinds, and court-plaster, twenty-five per centum ad valorem. PLASTERS. BRIEF OF JOHNSON & JOHNSON, BRUNSWICK, N. J., ON PLASTERS, ETC. Plasters. Paragraph 66, tariff act of 1909, imposes a duty upon plasters, healing or curative,of all kinds, including court-plaster, of 25 per cent ad valorem. We presume this also covers adhesive plaster, the use of which is very largely mechanical, whether used in the arts or by the surgeon. The duty under former acts has been as high as 35 per cent. Under the so-called Underwood bill H. R. No. 20182, paragraph 55 plasters, healing or curative, of all kinds, and court-plaster, 15 per cent ad valorem. A reduction of 10 per cent. By the Underwood bill, paragraph 19, pills, tablets, lozenges, troches, or similar forms of medicine are to be made dutiable at not less than 2o per cent ad valorem. Our contention is that plasters, pills, tablets, ointments, fluid ex- tracts, tinctures, etc., should bear the same rate of duty. That the Underwood bill, making this difference, puts the manu- facturer of medicinal plasters at an unfair disadvantage; that is to say, the maker of a belladonna ointment, or belladonna pill, or belladonna extract would be protected by a duty of 25 per cent, but SCHEDULE A. 379 PARAGRAPH 66 PLASTERS. the maker of belladonna plasters would have a duty of only 15 per cent. It would simplify matters if the word "plasters" was to be inserted in paragraph 55 of H. R. No. 20182, introduced February 15, 1912, or in similar tariff bills. There is no good reason why plasters should have ever been sepa- rated from other preparations of the same character. In considering the rate of duty the following should be borne in mind : In a number of countries in introducing plasters, medicinal and otherwise, we are confronted by a heavy protective duty. For example, Germany. In Germany there are some 30 maKers of medicinal plasters of fairly respectable size, and about 100 small and large. The duty upon our own plasters in Germany ranges from 25 to 60 per cent. By the Underwood tariff the German manufacturers could intro- duce their plasters into the United States at 15 per cent duty. Our plasters in Germany would be subjected to a minimum rate of 25 per cent. The German manufacturer would also have an advantage in the way of certain kinds of raw material used in the preparation of these articles, and a great advantage in the way of labor. Hospitals. We understand that an effort will be made to revive the movement of 1909 whereby medicinal and surgical instruments, appliances, and apparatus imported by and for the use of hospitals and other institutions shall be admitted free. One great objection to this course is the fact that a great number of hospitals throughout this country are private or semiprivate insti- tutions charging fees for treatment given. Only a minor number give treatment without pay, the latter being municipal or State institutions supported from city or State funds derived from the American taxpayer. Under the proposed amendment they would be able to import all supplies free of duty. Many physicians and surgeons obtain their medical and surgical supplies for use in private practice from hospitals with which they are connected. Should foreign goods for hospital use secure entry free of duty, this would have a serious effect upon American industries. The American factories devoted to the preparation of medicinal and surgical apparatus, utensils, instruments, and preparations have been built up by large investments, supplemented by devotion to scientific study, expert knowledge, mechanical and chemical skill, and have attained the nighest development in the art of preparing these supplies. These industries are of great importance to the municipal, State, and Federal governments in time or peace and of utmost importance in the tune of war. This alone should urge that they were entitled to a consideration. JOHNSON & JOHNSON. NEW BRUNSWICK, N. J. 380 TARIFF HEARINGS. PARAGRAPH 67 PERFUMERY. [Telegram.] COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. Being manufacturers of items in paragraphs 66, also surgical dress- ings, we respectfully protest against reduction or removal of present duty on medical and surgical apparatus, appliances, utensils, instru- ments, and preparations imported by or for hospitals and institutions. They are mostly private or semiprivate institutions, are largest cus- tomers of our industry, which would be ruined by duty-free foreign competition. SEABUBY & JOHNSON, Manufacturing Chemists, New York. PARAGRAPH 67. Perfumery, including cologne and other toilet waters, articles of per- fumery, whether in sachets or otherwise, and all preparations used as appli- cations to the hair, mouth, teeth, or skin, such as cosmetics, dentifrices, including tooth soaps, pastes, including theatrical grease paints and pastes, pomades, powders, and other toilet articles, all the foregoing; if containing alcohol, or in the manufacture or preparation of which alcohol is used, sixty cents per pound and fifty per centum ad valorem ; if not containing alcohol, or in the manufacture or preparation of which alcohol is not used, sixty per centum ad valorem ; floral or flower waters containing no alcohol, not spe- cially provided for in this section, twenty per centum ad valorem. For perfumery, see also Italian Chamber of Commerce, page 109; for toilet prepara- tions, see also Park & Tilford et al., page 67. PERFUMERY. STATEMENT OF THEODORE RICKSECKER, OF THE MANUFAC- TURING PERFUMERS' ASSOCIATION OF THE UNITED STATES. Mr. RICKSECKER. I am chairman of the legislative committee of the Manufacturing Perfumers' Association of the United States, and represent them. Gentlemen, let us get into an atmosphere of flowers this morning. We respectfully submit the following in behalf of the Manufacturing Perfumers' Association of the United States : This association embraces a membership from the Atlantic to the Pacific. The proposed changes in our paragraphs are not for tariff revision downward, but for increasing the revenue by taxing all our raw materials 20 per cent, which are now free, and have been for many years. This proposed new tax, apparently unintentionally, shows lack of proper information and strikes a severe blow to our industry. Its depressing influence would also be felt by the auxiliary indus- tries, bottle and box makers, lithographers, etc. This injustice would be well-nigh disastrous, and should be corrected for reasons below. In the formation of the Wilson bill, in 1893, for revenue, under President Cleveland, at which time I appeared on behalf of our in- dustry, this question was thrashed out, resulting in giving us free raw materials in that law, which was agreed to by members of both sides in the Senate and House when they learned the facts. I could name some of the most distinguished Democratic Senators we had in SCHEDULE A. 381 PARAGRAPH 67 PERFUMERY. that day whom I positively know voted in our favor on this propo- sition. So also in the tariff of 1909, after the House had unexpectedly passed a bill proposing a duty on our raw materials ; when the facts became known, the law retained them on the free list, paragraph 639. The very natural misapprehension is that these articles are luxuries, and should be taxed. They are not luxuries until American labor, capital, and skill make them such, just as raw silk is not a luxury until manufactured, and is free as a raw material, and has been for many years. These items are used in toilet goods for teeth, hair, skin, and mouth, and other articles of therapeutic value which have now grown into general use by our intelligent laboring people and have become household necessities. They are our first raw materials. They are used in every State in the Union. Some are also used in flavoring extracts, in medicine, etc., and by the 48,000 druggists in the United States. These raw materials are not made in the United States. To prove the truth of our position, we had Dr. True, of the Plant Industry, Department of Agriculture, before our association, with samples of distilled oils, at one of our recent annual meetings. I asked him the point-blank question, "Doctor, is it now feasible and possible for us to commercially produce these oils V 1 His stations were in the South and Southwest, and he answered point blank "No." He had studied the question. Why single out our industry and tax our raw materials, which must be imported ? Our industry is now paying a revenue tax estimated at one and a half million dollars a year on refined alcohol. I took the best means at my command to ascertain from alcohol men the best estimate I could get, one that would be fairly true and square, and I have esti- mated that it would be between a million and a million and a half doUars revenue, and this alcohol man said, "No; it is nearer two millions." I said, "Would I be safe in making the assertion that it is a million and a hah* dollars?" He said, "Absolutely, in my judgment." To our knowledge no other industry contributes so large a propor- tion of its total volume of business to the support of the Government. Denatured alcohol can not be and is not used in our business. To load us with this additional tax is unfair and unjust and would seriously handicap and blight the business. Don't put additional duty on goods that pay so large a revenue tax. The revenue the Government might receive from this unprece- dented tax would be too small a price to throttle a national industry which is a struggling one. Nearly aU of our manufacturers are making very modest incomes. I know that definitely from personal contact and personal confi- dences on the part of many of the members of our association. I am clearly within the absolute fact when I make this statement. Paragraph 53 continuing the present duties on manufactured goods is eminently wise. It yields a fine revenue, although the increase of 382 TAEIFF HEAEINGS. PARAGRAPH 67 PERFUMERY. importations of manufactured perfumery and toilet goods for 1911 was 28 per cent over the previous year. To secure additional revenue, we ask you to insert in this para- graph after the words "all the foregoing," line 10, "wholly or partly manufactured, " which will yield the Government double the revenue on imported goods partly manufactured. It will yield the Government double the revenue on imported goods. These alcohol goods come into customs from abroad, consigned to agents here, to complete the manufacture, and they are now classified under the 25 per cent clause, whereas they should be classified under the 60 cents a pound and 50 per cent ad valorem. That would give double the revenue from this increasing line of importations. We realize this bill was not intended to handicap our industry, but for revenue, which object might also be defeated hi the coming year, as big supplies would be cabled for by importers in fear of adverse legislation. President Elect Wilson has just written: "American enterprise is not free; the man with only a little capital is finding it harder to get into the field," etc. The large majority of our manufacturers are in this class. This bill, if enacted, would make it still harder by increasing the necessary capital to go into our business by 20 per cent. A 20 per cent duty on our raw materials would compel us to either debase our present formulas or increase the cost to consumers; either is impracticable. Our popular priced goods at 25 and 50 cents are sold at a minimum profit, are leaders, reaching the great middle class, and fierce competition compels rigid price, quantity, and value. A misconception is in the minds of a great many men, that these are luxuries for the rich only. The fact is, one of the best markets in the United States for goods of this type, for toilet goods, embracing the consumption of these oils and materials, are the factory towns of New England. The laborers have very little compensation in life in the way of pleasure and enjoyment; and wherever you go, you find an increasing consumption, due to higher standards of living, even amongst the wage earners. I have known of typewriters to pay the equivalent of two days' labor for a bottle of perfume, tooth paste or powder, talcum, and soap, which is always perfumed with these materials. The cost of these materials was never so high as now. As an example, attar of rose cost us $5 an ounce three years ago. To-day it costs $15 an ounce. AYe must ask the same price for our goocfs or else we lose sales. To emphasize this restraint of trade, I may say that when attar of roses, for instance, jumped to such fearful proportions, we put up the price of our rose. Immediately the sales fell off. With an additional 20 per cent duty, it would make the cost of attar of rose $18 per ounce, which is prohibitive. Attar of rose must come from only one source, Bulgaria. In my nine trips to Europe I have studied these questions. This one has been deter- mined by the fact that in Germany, around Leipzig, they trans- planted the rose bushes from Bulgaria and tried to make attar of rose. It was a failure commercially. There is something in the soil and climate, the cost of labor, etc.. that would not allow them to make a competitive article. SCHEDULE A. PARAGRAPH 67 PERFUMERY. The revenue the Government would receive from import duty on fine oils might be considerably minimized by the dishonest importer. Valuable oils mixed or combined at a cost of, say, $20 a pound might be invoiced at $3 a pound. The appraisers could scarcely determine value, and might receive 60 cents instead of $4, as was expected, as mixed oils are very difficult to appraise. I had an interview with the chief appraiser of our customs in New York, and tried to get points bearing upon the classification, the appraisement, or the adjudication of the questions that came up. Our entire industry most respectfully, but most earnestly, protests, and urges the return to the free list of the items named in paragraph 51, and all of paragraph 54, which are our raw materials on the free list; avoiding repression or restraint of trade, which is sure to follow if a duty is levied on them. Confident that you will realize the justice of our position, and appre- ciating your laborious task, and relying upon your fair interpretation of the vital needs of our industry, we bespeak your effective influence to this end. Mr. HARRISON. I would like to state to Mr. Ricksecker that, in preparing this bill, the committee left the duties at 60 and 70 per cent upon the finished product, because we considered that perfumery is really a luxury, and, according to our theories, the proper subject of a high tax ; and in view of that fact, that those high duties were left upon the finished product, the committee thought it wise to recom- mend a 20 per cent ad valorem tax on these essential oils and materials for the manufacture of perfume which were not grown in this country, by which means we estimated that we would raise one-half a million dollars' worth of revenue. We thought it was fair to the manufac- turers that perfume should bear that tax in view of the high duty which has been left on their finished product. It is entirely a revenue proposition. Mr. RICKSECKER. Yes. We understand that, and I have gone into the matter and have classified and totaled the amount of revenue you could derive from it, and our figures are just a little short of that sum ; but the reasoning above the question at issue, together with the fact of our big alcohol-revenue tax, offset that issue. In the original bill prepared by Mr. Payne they also took the same ground in 1909. When they saw the issue in the House and Senate, as presented by our industry, they saw its fairness. Now, it may be pertinent to the question to state that, at different times, the question of alcohol tax has come up in our industry and in the arts, and in an interview with an old friend, Senator Allison, in his room, I said to him that "It seems hard that the industry should be taxed as much as liquor." He said to me, "If you will prepare a bill which will hold water as to a tax on alcohol hi the arts and manufactures, I will do what I can to support it." The CHAIRMAN. I thought in your perfumery you used a good deal of methyl alcohol? Mr. RICKSECKER. No. The CHAIRMAN. I see that every now and then some person takes a drink out of a bottle of perfume and is poisoned. 384 TARIFF HEARINGS. PARAGRAPH 67 PERFUMERY. Mr. RICKSECKER. Yes; that is a rare thing. I know of only one instance where a certain house sold some toilet water with denatured alcohol. It went to North Dakota and killed seven Indians. Mr. HARRISON. We have provided for the 60 cents a pound in addition to the ad valorem duty to take care of that alcohol propo- sition. Mr. RICKSECKER. Well, the trouble is that is not enough; free raw materials are imperative for successful business. Now, I have been called the oldest perfumer in the United States, and I have studied the question from every standpoint, and am pretty well tired of having to come down to Washington every few years to defend the position which we have been accorded in the past for so many years in the Dingley law, in the Wilson bill, and in the Payne law from the opposition on both sides of the House. The Senate has seen the justice of our position. The consumption of these oils is a part of civilized life to-day. Toilet goods are used liberally even by the working people. The standards are higher to-day. Eliminate these things, and you take out a slice of happiness that we are all entitled to, on the part of the girls and women, who get very little else in the way of luxuries, except such few things as they can buy of this character. They do not buy liquor and cigars like men do; but they do buy these things. The consumption falls not upon the rich, but on the great middle class. Intelligent laborers are all consumers of the goods in which we use these materials. Mr. HILL. Mr. Ricksecker, are you president of and represent the Manufacturing Perfumers' Association ? Mr. RICKSECKER. I am the chairman of the committee and repre- sent the association. Mr. HILL. I understand that you have no criticism of this bill, which is printed as a part of the tariff handbook here, so far as the duties are concerned, where they are continued the same as they were, in the finished products. What your criticism is, is as to the addition of 20 per cent duty on the noncompeting raw materials which enter into the finished product ? Mr. RICKSECKER. Yes. Mr. HILL. Is not your association perfectly aware that this bill, representing the true principle of a tariff for revenue only, was adopted twice by Congress in its former session, and ratified by an overwhelm- ing majority of the people last November? Mr. RICKSECKER. That does not disturb the soundness Mr. HILL. You mean that does not alter your views or mine, but is the fact that it is clearly before us that the Democratic majority in the House was more than doubled; the Senate was made Democratic; the President elect has approved this legislation in express terms con- cerning one bill, and that the country has overwhelmingly indorsed it. Mr. RICKSECKER. I admit Mr. HILL. The theory and principle Mr. PAYNE. Let him answer that. I do not believe he would agree with you. Mr. HILL. The theory of putting a revenue duty on raw materials, noncompeting. SCHEDULE A. 385 PARAGRAPH 67 PERFUMERY. Mr. PAYNE. The majority of the people of the country did not elect the House and Senate and the President, but the minority did. Mr. HILL. I don not alter my question at all. My theory is that the voter intelligently understands what he is doing, and that if he votes for a third party, he puts the first party in power. Mr. KICKSECKER. I shall answer that by referring to a little inci- dent that occurred on New Year's Day. Mr. HILL. Your association was familiar with the terms of this bill before the election, was it not ? Mi\ RICKSECKER. I was going to answer you question in a moment. I met one of our manufacturers in New York, and he spoke of the hearings, and I asked him if he knew that raw materials were proposed to be taxed 20 per cent hereafter. He said no; he did not. That gentleman travels all over the country, and I was surprised to find that, although a member of our association, he did not know the fact. I think that is the case with a great many. They are so absorbed in their business that they do not watch congressional proceedings as they might, and they rely upon a few of us to take care of that. Mr. HILL. But your association was before the Senate after this bill had passed the House and went over there ? Mr. RICKSECKER. Yes. Mr. HILL. And they understood it ? Mr. RICKSECKER. Yes. Mr. HILL. Is there any reason to doubt that the association at least understood then that the duty of 20 per cent was going on raw materials ? Mr. RICKSECKER. Yes, sir. Mr. HILL. And that policy of revenue duty on raw materials was the policy of the bills generally that were introduced and would be introduced, not all probably along that line, in case the result of the election was favorable to them ? Mr. RICKSECKER. There is where I found some of the members were lame. They did not notice the bill had been passed, and they did not take enough interest to inform themselves. Mr. HILL. They must not plead their own default now, it seems to me. Mr. RICKSECKER. Well, I am simply representing them. I cer- tainly have no right to speak for each one's knowledge of what has happened. I only know that I met this gentleman that I speak of on the street, and I found that he, a manufacturer who has traveled all over the country, and an intelligent man, did not know that we were up against a possible 20 per cent increase of duty on our raw materials. Mr. HILL. What percentage on the cost of the finished product would this 20 per cent on the raw material probably make ? Mr. RICKSECKER. Mr. Hill, I like to answer all questions as closely to fact as I possibly can, and I am not informed. Mr. HILL. Well, it would amount to more than 5 per cent on the finished product ? Mr. RICKSECKER. Yes. In most instances it would amount to more; perhaps 10 or 15 per cent. 78959 VOL 113 25 386 TARIFF HEARINGS. PARAGRAPH 67 PERFUMERY. I want to say right here that the working people, who get a few luxuries in their lives once in a while, will pay 25 or 50 cents for a bottle of perfume or a cake of soap, or a box of talcum powder, etc., and if we increase our price to the retailer he will have to increase his price, and the consumer would say, "Why 30 cents for a 25-cent article?" It would be a blight on the retail man's reputation. It would be the same way if he charged 55 cents for the 50-cent article. The prices of some of these goods are so close that if we had to sell them alone, we could not come out even. Mr. HILL. Are you aware of the fact that the changes in this bill from the Payne law will take forty-odd million dollars from the present free list, or that the free list of the Payne bill was double as much as H. R. 20182 ? Mr. RICKSECKER. I have not heard the total. Mr. HILL. I would like to make a part of my question, Mr. Chair- man, the exact figures. The clerk will put them in the record as a part of my question, showing the difference between the free list in the two propositions and the dutiable lists hi the two propositions. Mr. JAMES. Before that is done, I suppose you ask that question with the understanding that you acquiesce in the verdict of the people ? Mr. HILL. I have always believed that the people should rule. These figures are taken from the Democratic report, and so vouched for their correctness, so far as the report is concerned. Mr. JAMES. As a good patriotic citizen you are going to support our bill? Mr. HILL. I have announced my policy. The figures referred to by Mr. HiU are as follows: Schedule A Chemicals. Payne bill classification at Payne rates: Imports, 1911 $117, 092, 655 Dutiable 48, 869, 368 Free 68, 223, 287 Duties collected 12, 609, 456 Rate on all per cent. . 10. 7 Under Democratic rates in the last session bill and classification (from Democratic report). 1912: Total estimated importations $122, 921, 793 Dutiable 96, 742, 850 Free 26, 178, 943 Duties to be collected 16, 101, 595 "Rate on bill percent.. 13. 1 RESULTS. Finished products greatly reduced. Raw materials largely increased. Result, importation of finished products. No revenue from increase on raw materials. Revenue must come from increase of imported finished products, which means a transfer of industry or reduction of wages. The CHAIRMAN. Of course we have a great deal of latitude in these hearings, gentlemen, but as we have a large number of witnesses this morning, and as it is the last day, I would like, as far as we can, to confine the questions to the bill and not wander into the realm of political discussion. Is that all, Mr. Kicksecker? SCHEDULE A. 887 PARAGRAPH 67 PERFUMERY. Mr. RICKSECKER. I have twice in my commercial life suffered from legislative action on tariff matters. I started in as an importer of toilet goods and began a business which was successful. I soon saw that the trend was toward perfec- tion of industries, and I went into the manufacture of toothbrushes in Brooklyn. I started a factory and got English and French work- men and made a success of it. One morning in 1884 I read in the morning paper that the duty on toothbrushes was reduced from 40 to 30 per cent. It floored me. It killed my industry and it killed those in Newburyport, in Florence, Mass., in Brooklyn, N. Y., and in different places. It killed the toothbrush industry, and it has been dead ever since. I had to gird my loins. I lost considerable and I had to try some- thing else, so I went into this business. Then in 1893 the menace of the change in the tariff you must bear in mind our industry is a very sensitive one ; it is a regular barometer to tariff changes. Under President Cleveland's proposed tariff for revenue only the menace to our industries was so potent that I lost one-half of my business. Mr. KITCHEN. Dp you know the difference between the tariff under the Cleveland administration, the Wilson bill, and the tariff of the Payne Act or the Dingley Act on your products ? Mr. RICKSECKER. I know that there was and is no tariff on our raw materials. Mr. KITCHEN. Do you know the difference as to the finished prod- ucts? Mr. RICKSECKER. I Mr. KITCHEN (interposing) . I know what it is, but you said it killed you; but were not raw materials of your products on the free list under Cleveland ? Mr. RICKSECKER. Yes; but they do not cover the requirements of our industry alone. Mr. KITCHEN. Were not those same raw materials on the free list under Cleveland ? Mr. RICKSECKER. Yes, sir. Mr. KITCHIN. And did you not practically have the very identical tariff you have now ? ' Mr. RICKSECKER. Yes, sir; nearly the same. Mr. KITCHIN. How then could the tariff under Mr. Cleveland have affected you ? Mr. RICKSECKER. It was the menace in the minds of the public Mr. KITCHIX. Oh, yes. Mr. RICKSECKER. (continuing). That broke up confidence and destroyed order. Mr. KITCHEN. Then it was not the tariff that affected you, but this menace ? Mr. RICKSECKER. Yes. Mr. KITCHIN. Just the fancy of the people ? Mr. RICKSECKER. Yes, sir. "Menace" is the word I used. Mr. KITCHIN. How much of this perfumery is exported, if you know? 388 TABIFF TTKABTNGS. PABAGBAPH 67 PEBFT7MEBY. MF. RICKSECKER. I secured from the Bureau of Statistics figures on the exports of perfumery, cosmetics, and similar toilet articles from the United States in the fiscal year ended June 30, 1912, which were $1,147,000. Mr. KITCHIN. That is a great deal more than the imports ? Mr. RICKSECKER. The imports Mr. KTTCHIN. All these materials have alcohol in them ? Mr. RICKSECKER. No; the imports are about the same. Mr. KTTCHIN. They are a little less, are they not ? Mr. RICKSECKER. $1,064,000. Mr. KITCHIN. That is for all kinds ? Mr. RICKSECKER. That is all kinds, too. Mr, KrrcmN. Are you exporting this perfumery ? Mr. RICKSECKER. Somewhat so; yes. Mr. KITCHIN. Are you selling it cheaper to the foreigners than you are to your own home people ? Mr. RICKSECKER. No, sir; not generally. Mr. KITCHIN. Then why do you fear competition, if you can ship perfumery across the water and pay the freight on it and then sell it to the foreigners at just the same price you are selling it to the Americans? Why do you fear competition, then? Mr. RICKSECKER. One reason is that we can now get a drawback. Mr. KITCHIN. It must pay freight? Mr. RICKSECKER. One reason is that we can now get a drawback on our alcohol shipped for export. Mr. KITCHIN. But your raw material is on the free list now. You do not get any drawback now ? Mr. RICKSECKER. But the alcohol drawback is considerable. Mr. KITCHIN. Well, you have the same; you do not lose anything by that. Mr. RICKSECKER. We did not have an alcohol drawback previously. Mr. KITCHIN. You had that all the time, had you not ? Mr. RICKSECKER. No, sir; we had to buy alcohol under the old law in Europe. Mr. KITCHIN. And then you could compete with the foreigner. The CHAIRMAN. He has not had a drawback on alcohol since the Dingley bill. Mr. RICKSECKER. Excuse me, Mr. Chairman. May I say that I was partly instrumental in bringing about this present drawback in 1909. Mr. KITCHIN. This Congress or the next Congress or any other Congress would have the same drawback. Mr. RICKSECKER. We did not have it until this last bill. Mr. KITCHIN. But you will have it; I think we can assure you of that. Mr. RICKSECKER. We are satisfied, as manufacturers, for the sake of the prestige it gives us to accept a less profit on exporting goods. It is an advantage to our salesmen to be able to say that we have sold these goods in London, in St. Petersburg, and in Berlin. We sold a bill of goods in Berlin amounting to $300. A member of the Reichstag passed that store and noticed it, and within a few days they voted to increase the duty on American perfumery. I was inter- viewed by the New York papers on the subject, because the German SCHEDULE A. 389 PARAGRAPH 67 PERFUMERY. consul told them that I was the man who shipped the goods. It was only $300 worth, and yet they voted to change our duty. Mr. KITCHIN. If you had this tariff, could you continue to ship in there? Mr. RIOKSEOKEB. No; the German duty intervenes. Mr. KITCHIN. But you have already shipped goods under the same tariff? Mr. RICKSECKER. We had sold that one bill of $300. The alcohol tax on our industry is severe, and we have been told that the alcohol people could make it more so, if they chose. The CHAIRMAN. Is that all, Mr. RickseckeH Mr. RICKSECKER. Yes, sir. STATEMENT OF MAURICE LfiON, REPRESENTING ROGER & GALIETT, NEW YORK. We believe that an ad valorem duty of 25 per cent on toilet and medicinal soaps and of 40 per cent on alcoholic and nonalcoholic per- fumery shoula be adopted as part of the present revision. We are hi the business of importing and selling perfumery, alco- holic and nonalcoholic, and soaps. Under the present rates it has been our experience that it is difficult, if not impossible, for us to compete on our market for the class of goods which goes into the homes of people in medium circumstances. The existing tariff compels us to restrict our activities to the kind of goods which only well-to-do people can afford for the reason that the existing tariff rates make it impossible for us to import and sell merchandise of average good quality at prices low enough to be within the means of the average citizen. As to soaps, the present rate is 50 per cent ad valorem and it is proposed to make it 40 per cent ad valorem with a proviso that it shall not amount to less than 20 cents per pound. The average weight of a cake of soap being 4 ounces, the proposed change would make the duty on soap not less than 5 cents a cake. Tliis duty is prohibitive with respect to the kind of soap used by persons in moderate circumstances and also amounts to a discrimination against them as is shown by the obvious fact that a cake of soap worth 20 cents abroad will pay on entering the United States 8 cents, whereas a cake of soap selling abroad for only 3 cents would pay 5 cents. Altogether, the fairest duty is an ad valorem duty only, because to such duty each one contributes his just share according to his means. As shown by your records, the information gathered for the Finance Committee of the Senate states the value of the domestic soap output to be over $68,888,000, while on the other hand, the value of toilet and medicinal soaps imported in 1907 is given at $520,000, that imported hi 1910 at $240,000, and that imported in 1911 at $380,500. These figures tell their own story and establish beyond dispute not only that the industry, which is so largely in the control of the Beef Trust and its friends, is not in need of protection, but that the public on the other hand does not get the benefit of competition in the matter of prices and quality. 390 TABIPF HEARINGS. PARAGRAPH 67 PERFUMERY. We are satisfied that our competitors who sell goods manufactured in this country make upon some of their most popular grades at least 300 per cent profit, yet find ourselves unable to compete against them for those grades on account of the protection they now receive. We submit therefore that the proposed change in the tariff should be restricted to fixing the ad valorem duty at 25 per cent only, without any fixed minimum valuation such as has been proposed. As to alcoholic perfumery, the present rate is 50 per cent ad valorem plus 60 cents per pound. This often involves, in practice, a quad- ruple tax, namely, 50 per cent on the value of the merchandise at the United States customhouse, 50 per cent for domestic alcoholic tax in the country of manufacture, 60 cents per pound on the liquid con- tents whether their alcoholic strength is 10 per cent or 90 per cent, and, finally, 10 per cent ad valorem on the bottles and stopper. In many cases this quadruple duty has been found to amount to about 140 per cent ad valorem, thus closing the American market to any but the very expensive grades which the rich use and giving to do- mestic manufacturers a protection amounting to virtual prohibition in the case of the grades of goods used by the enormous majority of consumers. This enables the domestic manufacturers to sell to the American consumer inferior goods at the prices for which high-grade goods sell abroad. This is not a competitive tariff; it amounts prac- tically to a prohibitive tariff. The specific duty has been said to be an excise duty on the alcohol, but the fact is that the domestic excise duty on alcohol is equivalent to 28 cents per pound, while imported alcoholic perfumery pays 60 per cent per pound, no matter how low the percentage of alcohol. It would seem, therefore, that the interests of the Treasury and those of the average consumer will be equally promoted by having only an ad valorem tax not exceeding 40 per cent. Likewise that duty should be reckoned on the liquid and the bottle or other container altogether, which should be treated for the purposes of duty as one thing, which they in fact are, being sold as one thing and not otherwise. It is this piling up of duties, each one seemingly small, that destroys general competition. Nonalcoholic perfumery. The present rate is 60 per cent ad valorem. It is believed that a reduction of it to 40 per cent would lead to a sub- stantial increase of revenue. The American industry is very large and flourishing and, as shown for instance by the enormous development of talcum powder manu- facture, is plainly not in need of any protection. A reduction in the rate of duty herein asked will not only serve to increase the revenue, but will also serve to protect the consumer from poor quality and high prices. Respectfully submitted. MAURICE LEON, Representing Roger & Gallet. SCHEDULE A. 391 PARAGRAPH 67 PERFUMERY. STATEMENT OF FRANCIS R. ARNOLD, ON BEHALF OF F. R. ARNOLD & CO., IMPORTERS, NEW YORK. Mr. ARNOLD. Mr. Chairman and gentlemen of the committee, I wish to refer to what I call fancy tailet soaps. There is a wide distinction in certain classes of soaps. Soaps like castile soap, which are traded in by the pound, are made by numerous manufacturers where there is a market. There is a vast difference between soaps of that kind and toilet soaps. Each manufacturer owns his own soap, which is usually wrapped, sometimes inclosed in an expensive outer wrapper and packed either in cartons or in small quantities, and it is difficult to obtain the correct weights. There is always a variation in weight of a number of single pieces; therefore, I think that soaps of this class should be subjected only to an ad valorem duty. A specific duty weighs more heavily on the lower priced articles than on the higher priced articles. Therefore the imposition of a specific duty on such articles places the pyramid on its apex; it puts the lower articles at a higher rate and the articles that really ought not to have reduction pay a lower rate. In that respect the Payne tariff was in the right direction. The pyramid was placed on its base, although the base was a very heavy one a 50 per cent taxation. Under that tariff we have been able to recommence the importa- tion of moderate-priced soaps intended for general consumption by people of moderate means who are entitled to moderate luxuries. I have prepared a table, Table A, which is annexed to my brief, giving the exact figures, showing that the imposition of 20 cents per pound would raise the duty on the low-priced soaps set out in my table from 50 to 130 per cent. Under the Payne tariff we have been able to recommence the importation of the low-priced soaps; but if you put a duty of 130 per cent on them they are cut off. In 1 912 we imported from one house about $2,700 worth of soap, which paid a duty of 50 per cent. That is bound to increase. It is difficult to introduce new articles under that duty. Under a 40 per cent duty the importations should be still larger, and it would enable us to reduce the retail price 2 cents. Under 20 cents per pound these prices will have to go up 25 per cent to pay the retailer a profit and also pay a moderate profit to the importer. Our profits ought to be 20 per cent at least. The expenses due to the business are Yl\ per cent, and the expense of distributing the goods in small quantities is very heavy. If we get 7$ per cent out of it we are lucky. Our chief opponents, and I think those who favor the tax of 20 cents a pound are those to whom soap is a by-product, are Chicago manufacturers. They have been our heav}- competitors. As to alcoholic perfumery Mr. HARRISON (interposing). Before leaving the subject of soap, will you inform the committee whether the change in the wording of the existing law from "fancy and perfumed toilet soap" to simply "toilet soap" will change the character of soaps imported under that head. In other words, are there any toilet soaps that have not some perfumery in them ? Mr. ARNOLD. I think they would all go under the head of fancy toilet soaps. 392 TARIFF HEARINGS. PARAGRAPH 67 PERFUMERY. Mr. HARRISON. In the proposed law, in regard to toilet soaps, we have eliminated the words fancy or perfumed." Are there any toilet soaps which are not perfumed ? Mr. ARNOLD. There are some few low-priced toilet soaps that have no perfumery to speak of. Mr. HARRISON. The effect of this change would be to raise the duty on those soaps ; is that the idea ? Mr. ARNOLD. To 20 cents per pound ? Mr. HARRISON. To 40 per cent ad valorem. Mr. ARNOLD. I have prepared a table showing certain soaps which are typical. It would raise the duty from 50 to 130 per cent, which is virtually a crushing tax and which means cutting off a source of revenue. In regard to alcoholic perfumes, owing to the heavy specific tax, it stands very much on the same basis. The specific duty of 60 cents per pound means an increase over the former rate of $2, or over 100 per cent it is virtu ally $4. 05 a gallon, or double the amount. The result is that low-priced articles, such as lavenders, colognes, and dentifrices, of which there is large volume, are under an enormous tax. I have left with the clerk of the committee a sample, which, under the 60 cents per pound and 50 per cent ad valorem, paid a tax of 201 per cent. The importation of these articles would be crushed out. There is also a very large demarcation in alcoholic perfumery preparations intended for the hair, teeth, and skin; hair lotions, dentifrices, lavenders, and cologne are not perfumery in the strict sense of the word; not high-priced extracts. I am in- formed by one of my confreres, who imports chiefly high-priced extracts, that the rate of duty is only 56 per cent ad valorem at present. I have an example of a very interesting article which shows that the tax is 201 per cent under the specific duty. Up to the time of the Dingley tariff certain of these articles paid only 40 per cent as nonalcoholic perfumery. Thus eau de quinine, which is largely used in this country, paid only 40 per cent until the Dingley tariff. Under 60 cents a pound the importations have entirely ceased. There are not over 12 dozen a year imported, and they arc for people who want it at any price. I have prepared a statement of importations from one house, chiefly articles of that kind, cologne, lavender. I have submitted a table, Table C, which shows that the actual cost of perfumery imported from Darrasse & Colmant was 81,073, which paid out $1,478.30, or 137* per cent. With such a duty as that the committee is closing the- doors to a source of revenue. If the committee will adopt a line of demarca- tion and state that those articles which are evidently intended only for outer application should como in as nonalcoholic, as they used to, the importation will be gradually recommenced and gradually reestablished. The pyramid will then stand on its base and not on its apex. I believe a great many of the articles we import are articles of foolish luxury. I do not believe a woman who pays $6 for a bottle of perfumery or two or three dollars for a cake of soap is doing the wise thing, but I do believe in this country that the well-to-do middle class who like a little luxury should have the opportunity to indulge it. SCHEDULE A. 393 PARAGRAPH 67 PERFUMERY. Mr. LONGWORTH. Did I understand you to say that the effect of this bill which passed the House will be to reduce the duties on the very high priced perfumed soaps and increase the duties on the very low priced ones ? Mr. ARNOLD. You have the table before you, Mr. Longworth. It shows my exact figures, and I think they are correct. I can give you one article here I do not know whether Mr. Roper has laid the sample before you or not. Mr. HARRISON. The only soaps that can be affected are toilet soaps which are not perfumed soaps. Mr. ARNOLD. They are all perfumed hi a way. Mr. LONGWORTH. He said that under the paragraph "Toilet soaps 40 per cent ad valorem, but not less than 20 cents per pound," the duty on certain perfumed toilet soaps of the very cheapest kind would be very largely increased. In other words, an increase on the low-priced articles and a decrease on the high-priced articles. Mr. ARNOLD. Exactly. Mr. HARRISON. In other words, the minimum provision of 20 cents a pound would amount to a great deal more than 20 per cent ad valorem. Mr. ARNOLD. Much more Mr. PAYNE. That is what is called a "joker" in a tariff bill. Mr. ARNOLD. I think the tariff was made sincerely. Mr. PAYNE. I do not charge these gentlemen with any such inten- tions, but I have been charged with it before. Mr. ARNOLD. That soap costs $1.89 under the present tariff. Fifty per cent would be about 94 cents. I am speaking of a soap that has been largely imported for years; it is a soap made by Coudray. That soap weighs 3 pounds. Twenty cents a pound would be 60 cents Mr. HARRISON. Have you submitted similar criticisms on all the other classifications of soap in our proposed paragraph, or only on toilet soaps ? Mr. ARNOLD. Only on toilet soaps. Mr. HARRISON. You will observe that the duties are very much reduced on all other kinds of soap. Mr. ARNOLD. I am not interested in any other kind of soap, and therefore I did not take the matter up. Fancy toilet soaps are very different articles from these other soaps, in the way they are handled and in the way they are put on the market. Mr. HILL. Do you manufacture at all ? Mr. ARNOLD. No, sir. Some years ago we experimented with some soap, but we found that it did not pay us. Mr. HILL. Do you know of any reason why this [indicating powder puff] should have a preferential rate over Mr. ARNOLD (interrupting). The duty is not very large on those items. They are little articles. Mr. HILL. The question is whether you think it should have a preferential rate over other productions of wool. Mr. ARNOLD. That is used as a brush for powder. Mr. HILL. It is purely a luxury in the sense in which it is used. The average man does not use that wool brush. 394 TABIFJf HEARINGS. PARAGRAPH 67 PERFUMERY. Mr. ARNOLD. I think it is very largely used. The ladies use it very largely. Mr. HILL. Why would not that be a good reason for making the duty higher, on the real Democratic, Republican, and Progressive rule of a tax on luxuries ? Mr. ARNOLD. I should not object to a higher ad valorem duty Mr. HILL (interposing) . I suppose the ordinary workingman m the United States does not have much use for this, does he [exhibiting article] ? Mr. ARNOLD. No, sir. Mr. JAMES. How about that small one [indicating article] ? Mr. ARNOLD. I do not think that is used either by the working- man. They are articles of luxury to a certain extent. The CHAIRMAN. Mr. Arnold, the committee has allowed you 20 minutes, if you have any other matters to present. Mr. AJRNOLD. I have not, unless there are some more questions. NEW YORK, January 2, 191S. COMMITTEE ON WAYS AND MEANS, House of Representatives Office Building, Washington, D. C. 1. Francis R. Arnold, No. 7 West Twenty-second Street, New York; Washington address, New Willard. 2. Representing F. R. Arnold & Co., New York, N. Y. 3. Schedule A, paragraph 53, perfumery; schedule A, paragraph 70, soaps; schedule N, paragraph 463, dressing combs; schedule K, paragraph 397, wool pads. ADMINISTRATIVE CLAUSES. 4. Attitude as to tariff. Such revision as will afford relief from overtaxation and such correction in the incidence of the tax as will insure the easy execution of the law, saving the time not only of the importer but also of the Government employees. 5. Experience of 47 years as a prominent importer of such articles. 6. Time, probably half hour or so. Schedule A, paragraph 70, fancy toilet soaps. First. While a specific duty on soaps which are traded in by the pound such as castile, is not objectionable, it would seem incorrect to apply a specific duty to so- called fancy toilet soaps, which are ususally wrapped, sometimes inclosed in an ex- pensive outer wrapper, packed either in cartons of small quantity, or even in single cartons. The difficulty under these conditions of ascertaining the correct weight and the inevitable variation in weight of a number of single pieces entail much extra labor and differences in result. The only fancy toilet soaps imported in quantity are made by well-known manufacturers, whose price lists are in the hands of the custom- house officials, so that there can be no difficulty in ascertaining the actual value as the basis of taxation. It would seem, therefore, that soaps of this class should be sub- jected only to an ad valorem duty. Second. It is evident that a specific duty based on weight must be a much lighter tax on high-priced soaps which are really luxuries than on the medium, and espe- cially on the lower-priced soaps, which are suitable for general consumption. There- fore, the change in the proposed tariff from "50 per cent to 40 per cent ad valorem, but not less than 20 cents per pound." while reducing considerably the tax on high- priced soaps, would increase it enormously on lower-priced ones, as shown in Table A, which gives the value of certain low and medium priced soaps currently imported, with the duties at 15 cents per pound. 20 cents per pound, and 50 per cent ad valorem, and showing that on the latter soaps a duty of 20 cents per pound would substitute for the present duty of 50 per cent one of 130 per cent. Third. In the ''Estimated revenues," prepared for the Committee on Ways and Means, the value of all imported toilet soaps (including medicinal) is given for the year ending June 30, 1000. as less than 8478,000. In synopsis prepared for the Finance Committee of the Senate the value of the domestic product is given as over $68,888,000. In the comparison of the Senate tariff bill (S. 128, H. R, 1438, July 13, 1909), page 7, the value of toilet and medicinal soaps imported in 1907 is given as $520,000. SCHEDULE A. 395 PARAGRAPH 67 PERFUMER Y. In the report in Schedule A, House of Representatives Sixty -second Congress, second session, Report No. 326, the value of imported toilet soaps in 1910 is given as only $240,000; in 1911, $380,500, this latter increase being undoubtedly owing to the larger amount of low-priced soaps imported. Therefore it is evident that no protec- tive duty is needed. Fourth. It would not be in accordance with the declared intention of Congress to reduce the burdens of the present tariff, to impose upon soaps suitable by their price for popular consumption, an increase of duty from 50 per cent to in some cases 130 per cent, as shown in Table A. Fifth. Therefore it would seem that in any case the proviso of 20 cents per pound should be omitted from the proposed duty in paragraph 70. And there should be little doubt that a reduction of the ad valorem duty to 35 per cent, the rate under the Wilson bill, would result in a large increase in importation of this class of soaps. This should be the result judging from the writer's experience under the Payne bill where the 50 per cent ad valorem duty is an actual reduction on this class of soaps from the former rate of 15 cents per pound, and he can not conceive that it would be the intent to impose on this class of soaps a duty, in some instances 130 per cent, which must pre- vent their importation, because in spite of their low foreign cost the addition of such a crushing tax would so increase the cost of laying them down as to prevent their use by consumers of moderate means, which has been rapidly increasing. Respectfully, F. R. ARNOLD & Co. TABLE A. Prices net per dozen. Custom- house value. Weight. Duty 15 cents. 50 per cent ad valorem. 40 per cent ad valorem. 20 cents per pound. No 35 . Francs. 3.00 $0.58 Pounds. 2.34 $0.35 $0 29 $0 232 $0 47 =80 per cent No. 226 6.75 1.30 2.25 .331 .65 .520 .45 35 per cent No. 295 9. CO 1.85 3.00 .45 .92i .740 . 60 =32J per cent. No 336 12.00 2.32 3.16 .47J 1.16 .928 . 63J 28 per cent No 333 14.40 2.78 3.16 .47* 1.39 1.112 . 63i=22| per cent. Prices net per dozen. Custom- house. Weight. 15 cents per pound. 50 per cent. 40 per cent. 20 cents a pound ad valorem. No 305 Ru. 0.80 $0. 412 2.65 $0. 3975 $0.206 $0.1648 $0 53 130 per cent No 304 1.20 .618 4.00 .6000 .309 .2472 80 = 130 per cent. No. 303 1.60 .824 5.30 .7950 .412 .3296 1.06 129 per cent. No 439 1.20 .618 2.38 .3470 .309 .2472 476= 77 per cent No. 452 1.60 .824 2.65 .3975 .412 .3296 .53 65 per cent. No. 523 1.60 .824 3.00 .4500 .412 .3296 .60 = 73 per cent. No 531 6.00 3.090 2.71 .3865 1.545 1.2360 .542 17 per cent No. 10202 3s. 4d. .810 4.875 .7300 .405 .3240 .975=120 per cent. COMMITTEE ON WAYS AND MEANS, BRIEF OF F. R. ARNOLD & Co., ON PERFUMERY, ALCOHOLIC AND NONALCOHOLIC. F. R. ARNOLD & Co., New York, January 4, 191S. Report on Schedule A (Report No. 326, par. 53). The present duty on alcoholic perfumery, 50 per cent ad valorem and 60 cents per pound, actually involves in many cases the payment of duty on four different items: First, 50 per cent on the actual cost; second, 50 per cent on alcoholic tax the foreign manufacturer is obliged to pay on goods not exported; third, 60 cents per pound on the actual contents, sometimes containing not over 65 per cent alcohol; fourth, an addi- tional 10 per cent ad valorem where the bottles are cut, or where the bottles are molded and have only a polished stopper. The result is a crushing overtaxation on lavenders, colognes, hair washes, articles of low price, frequently of a low alcoholic percentage but of a large volume, and the ulti- mate result has been that the importation of such has been either entirely prevented or reduced to a very small quantity. 396 TARIFF HEARINGS. PARAGRAPH 67 PERFUMERY. Until the passage of the Dingley bill alcoholic preparations intended for application to the hair, articles of low price and large volume, were taxed at 40 per cent. Since the imposition of the specific duty of 60 cents per pound the importation has been virtually suspended, and that of similar articles intended for application to the teeth or skin, as dentifrices, lavenders, and colognes, similar articles, not intended to be used as what are properly called perfumes, has been reduced to a small quantity which is gradually diminishing. We append Table B to give striking examples of this over- taxation. Table C, showing the actual duty paid on our importations of alcoholic goods from the manufacturers, Darrasse & Colmant, consisting entirely of such goods and amount- ing to 137 per cent ad valorem. The Canadian tariff imposes a tax of 50 per cent ad valorem on alcoholic perfumery, contents not exceeding 4 ounces, and only adds a specific duty where the contents is greater, $2.40 per gallon, plus 40 per cent ad valorem. This specific duty of 60 cents per pound means an increase from the former rate of $2 of over 100 per cent ($4.05 per gallon). This is simply overtaxation, the results of which are shown in the total suspension of or decrease in importations. The imposi- tion of any specific rate, unless an exceedingly low one, must overtax the low-priced articles of great volume stated above. It would seem that such articles should be differentiated from the extracts which are actually used for perfuming the handker- chief or person, and tne duty imposed on such articles should be the same as on non- alcoholic perfumery unless the duty is to be virtually prohibitive. In any case it would seem just that the duty should be reduced to a specific rate of not over $2 per gallon and 50 per cent ad valorem and that duty on the containers should be the same as that of the contents. The increase shown in importations is accounted for by the fact that under the present rate of taxation even low-priced extracts can not be imported to advantage and that therefore the importations consist almost entirely of high-priced extracts on which the specific duty virtually amounts to not over 2^ per cent or 3 per cent in addition to the ad valorem duty. Perfumery, nonalcoholic. The imports of this class of perfumery have increased very largely, owing to the increase of the country in wealth and population, and because many of the articles are low priced and can not be retailed at 25 cents to 40 cents apiece, in spite of the heavy rate of duty, 60 per cent ad valorem. It would seem that the ad valorem rate in all classes of perfumery should be the same, not over 50 per cent, and that this reduction in duty will lead to increase of importations. The important English and French manufacturers of alcoholic perfumery publish catalogues, showing clearly the price for export, and higher prices charged the do- mestic consumer for the alcohol tax. This addition is therefore not a drawback allowed by the Government, but simply an addition to the export prices, and should not be included in the market value, where the export price is clearly shown and is open to all buyers. In any case, if the importer is obliged to pay an ad valorem duty on this foreign alcohol tax, he should not be obliged 'to pay a further specific duty to offset the United States internal tax on alcohol. In a word, under the present and proposed tariff on alcoholic perfumery, the higher the price of the foreign article, and therefore the more decidedly an article of luxury, the lower the rate of duty. This is the reverse of what should be demanded under democratic government. Schedule "N," paragraph 463, dressing combs: The increase of the duty under the Payne tariff on horn dressing combs from 30 to 50 per cent, and on celluloid combs from 25 per cent and 60 cents per pound to 30 per cent with 65 cents per pound, re- spectively, will seem to have been made simply in order to give more protection to hard -rub her combs. The compound duty on celluloid combs is one which causes great labor to the im- porter and to the customhouse officials, with continually varying results as to cost. There would seem no reason why all dressing combs should not be classified unripr th title "Combs" with a uniform duty, say not over 40 per cent. Schedule "K," paragraph 397, wool pads: These are now classified as manufactures of wool, value over 70 cents per pound, duty 55 per cent ad valorem, and 44 cents per pound. They are disks of woolen velours, varying in diameter from 1 inch to about 4 inches, the weight running from about 1| pounds per gross upward, and always varying with each importation. In this weight is included in many cases weight of the handles, padding, and in many cases wooden handles, weighing more than the pad itself. In use, they are to all intents similar to brushes, being used as puffs to apply toilet powder. There is therefore no reason why they should not be taxed at the same rate as brushes as the case with all powder puffs, not over 40 per cent. Respectfully, R. F. ARNOLD & Co. SCHEDULE A. PARAGRAPH 67 PERFUMERY. TABLE B. 397 Actual cost per dozen. Custom- house value. Added to cover for- eign alco- holic tax. So-called market value. Weight per dozen. Total duty. Percentage of total duty to actual cost. Lavender, No. 1593 . . Cologne, No. 1496.... Francs. 7.20 0.60 $1.39 1.86 Francs. 3. 20 ($0.62) 2.80 ($0.54) $2.01 2.39 Pounds. 8 3 ($2.01) at 60 per cent. (3 pounds) at $0.60. ($2.39) at 60 per cent. . (3 pounds) at $0.60. 1 01 per cent. $1.00 1.80 2.80 ItS per cent. $1.19 1.80 2.99 The sale of both the above numbers has decreased to an insignificant amount, owing to the heavy increase in specific duty, as above. TABLE C. Importations, 1912, Darasse & Colmant, Paris. To merchandise. Soap. Perfumery, nonalcoholic. Perfumery, alcoholic, actual cost. Additional alcoholic tax. Pounds, alcoholic. Rate of duty 50 per cent, 60 per cent, 50 per cent, 50 per cent, 60 per cent, Duty.. $3,857. $1,928.50 $2,187. % $1,312.20 $1,073. $536.50 $287. $143.50 pounds, 1,330*. $798.30 Actual cost alcoholic perfumery, $1,073 (137J per cent). Total duty alcoholic perfumery, $1,478.30 (137J per cent). GEORGE BATTEN CO., NEW YORK, N. Y., REGARDING PERFUMERY. NEW YORK, N. Y., January 22, 1913. The CHAIRMAN OF THE WAYS AND MEANS COMMITTEE, House of Representatives, Washington, D. C. DEAR SIR: We have noticed the discussions as presented in the newspapers as to who buys perfumery, and whether or not it is a luxury. Having had some experience in this direction, we felt that possibly it might be of interest to your committee, which is the reason why we are writing this letter. We represent, as advertising agents, one of the large perfumers of this country, Paul Rieger & Co., of San Francisco. Mr. Rieger is often in New York and we discuss the problem of selling perfumes and the best method of advertising it through the magazines and public print. We notice that Theodore Ricksecker, of New York, a manufacturing perfumer, appeared before your committee and stated that he regarded it as a mistaken notice that perfumery was a luxury, and that he 398 TARIFF HEARINGS. PARAGRAPH 69 SOAPS. had known of working girls who spent much of their wages for it. He stated that perfumery was virtually a necessity of the servant girl as well as womankind generally. In this connection we wish to say that Rieger & Co. manufacture a perfume of very good grade, not cheap perfumery, and that they find that their best demand for perfume ranging as high as $1 to $1.50 per ounce is among the working girls, shop girls, stenographers, etc. The factory district, such as the New England district, is among the best users of perfume in this country. It is the observation of Rieger & Co. that the woman of the better class, the woman who could spend money for luxuries, pays $1.50 or $2 for a bottle of French perfume once a year and hangs on to that. Domestic perfumes are almost entirely consumed by the working class. We thought that this information coming from us, unconnected as we are with the definite making of perfumes, might be of interest to your committee. We think that further investigation would show the great consuming population for perfumery is the ordinary shop girl class. The Rieger advertising at any rate has for a long time been directed to the working class, and the fact that we are continu- ing to direct it to this class shows that the results must come from this class. Such magazines as the Blue and Green Book, etc., are the class of mediums we use to reach the consuming perfume public. Yours, very truly, GEORGE BATTEN Co., F. H. LITTLE, Second Vice President. PAEAGEAPH 68. Santonin, and all salts thereof containing eighty per centum or over of San- tonin, fifty cents per pound. For suggested phrase, see also Park & Tilford et al., page 67. PAEAGRAPH 69. Castile soap, one and one-fourth cents per pound; medicinal or medicated soaps, twenty cents per pound; fancy or perfumed toilet soaps, fifty per centum ad valorem; all other soaps not specially provided for- in this section, twenty per centum ad valorem. For soaps, see also Park & Tilford et al., page 67; for castile soap, see also Italian Chamber of Commerce, page 108. SOAPS. BRIEF OF COLGATE & CO., SOAP MAKERS AND PERFUMERS, NEW YORK CITY. NEW YORK, December 26, 1912. Mr. EUGEXE F. KINKEAD, Gommittee on Appropriations, House of Representatives, Washington, D. C. DEAR SIR : We wish to thank you for your letter of December 20, offering to bring before the proper parties any statements which we may desire to make before the Ways and Means Committee. We are informed that the chemical schedule, in which we are inter- ested, comes before the committee on the 6th and 7th of January. SCHEDULE A. 399 PARAGRAPH 69 SOAPS. It is physically impossible for the committee to begin to hear all the parties who will be present at Washington at that time. We, there- fore, have deemed it expedient to write our wishes in a short and compact manner, and we herewith send them to you, trusting that you will use what influence you can to see that they are carried out in the new tariff. We do not ask for higher protection. All we desire is that the articles which are already on the free list through a number of successive tariffs remain untouched, for they are raw materials in our business. Can you not use the following arguments with your committee ? Laundry soap is a household necessity, and is used practically in every family in the United States. Anything which adds to its price must increase its cost to the consumer, and on that ground anything which makes the raw materials more expensive ought to be avoided by your committee. All laundry soaps contain to a greater or less extent the following articles, which at present are all on the free list: Palm oil, palm kernel, copra, cottonseed and coconut oils, vege- table and nut oils, vegetable wax, and rosin. The 400 or more soap manufacturers in this country are a unit in desiring that these articles continue on the fre'e list. Also, that tallow, on which a duty is now placed, be put upon the free list. We do not know of any industry which objects to placing tallow on the free list. The large packing houses and soap manufacturers so desire it. As one of the largest manufacturers of laundry soap in this country (by all odds, the largest in New Jersey) we sincerely hope that you may be able to assist us in carrying out these very reasonable wishes, for we do not ask for any increase of duty, but ask that the present free raw materials continue. The revenue placed upon these raw materials would not be as large as anticipated. If placed on an article like palm oil, it would prac- tically prevent its being imported into this country to any large extent, and only because it is on the free list is it possible to import it in large quantities. The duty derived from tallow is too insignificant to be considered, as practically little or none comes to this country. As cattle become more and more scarce, it will become a necessity for us to import this article from South America and Australia, and we sincerely hope that the present duty may be taken from it. As regards perfume and flavoring extracts, we believe in the general principle that the raw materials used in manufacturing should be allowed to come in free of duty, or at a considerably lower rate than articles manufactured from them. It is desirable that the natural perfuming materials now on the free list in paragraph 639 should remain free, especially the following oils: Citronella, cassia, aspic or spike lavender, thyme, lemon grass, lavender, bergamot, and lemon. Unground clove buds and stems in paragraph 679 should remain on the free list, also seeds mentioned in paragraph 668. Oils of geranium, rosewood, and lanolin, now assessed 25 per cent under paragraph 3, should be admitted free of duty. 400 TABLET HEABINGS. PARAGRAPH 69 SOAPS. It is desirable that all synthetic or compounded perfume materials should be assessed for not less than 25 per cent duty over the raw oils enumerated above. We would be pleased to carry out any suggestions which you may make in regard to our bringing these arguments before the proper committee, and if you deem it advisable, we can send a representa- tive to Washington. Thanking you for the interest you have taken in this matter, we remain, Yours, very truly, COLGATE & Co. STATEMENT SUBMITTED IN BEHALF OF LAUNDRY SOAP MANUFACTURERS. WASHINGTON, D. C., January 6, 1913. To the Chairman and Members Committee on Ways and Means, House of Representatives, Washington, D. C. GENTLEMEN: This statement is submitted on behalf of laundry soap manufacturers of the United States representing over 75 per cent of the production of common laundry soaps. The item and paragraph concerning which this brief is submitted are Schedule A, paragraph 69, item, All other soaps not specially provided for in this section, 20 per centum ad valorem." Xo change in this item is requested or desired by the laundry soap manufacturers. They do not, however, object to the reduction to 15 per cent ad valorem, as was proposed in H. R. 20182, provided the raw materials used by them are allowed to remain on the free list and are not taxed as was proposed in H. R. 20182. (See brief on behalf of laundry soap manufacturers relative to free list, dated January 31, 1913.) REASONS FOR RECOMMENDATIONS. The laundry soap manufacturers are not opposing a revision of the tariff downward. The laundry soap business has been built up in a highly competitive industry scattered throughout the United States. FACTS RELATING TO THE SOAP INDUSTRY. Number of soap factories in the United States, according to United States census, is 436. SCHEDULE A. 401 PARAGRAPH 69 SOAPS. Locations: There are soap factories in all sections, and nearly every State in the Union has one or more factories, as follows: California 27 Colorado 4 Connecticut 14 Delaware 1 District of Columbia 1 Georgia 3 Illinois 34 Indiana 15 Iowa... 7 Montana 1 Nebraska 4 Nevada 1 New Hampshire 7 New Jersey 14 New York 67 Ohio 43 Oklahoma 1 Oregon 3 Pennsylvania 60 Rhode Island 8 South Carolina 1 Tennessee 4 Texas 8 Utah 1 Vermont 2 Virginia 1 Washington 5 Wisconsin 16 Kentucky 5 Louisiana 4 Maine 3 Maryland 4 Massachusetts 36 Michigan 11 Minnesota 5 Mississippi 1 Missouri 10 CHARACTER OF ESTABLISHMENTS. (OUT OF 436.) Individual ownership 146 Firma 108 Corporations 182 INVESTED CAPITAL. Less than $5,000 101 $5,000 but less than $20,000 103 $20,000 but less than $100,000 140 $100,000 but less than $1,000,000 79 $1,000,000 and over 13 There is no soap trust. There is no combination of soap manufac- turers. There is keen competition in all sections of the country. This competition compels each manufacturer to give the largest possible cake or the best possible quality or the lowest possible price, or all of these; otherwise his volume of business can not be increased or even maintained. The prices to consumers of the common and Jaundry soaps we are discussing run between 2J cents and 5 cents per cake or bar. While there have been large and almost universal advances in the cost of other essentials of life, the retail price of laundry soap has shown no substantial change during a long period of years. COMPARATIVE IMPORTANCE TO THE SOAP INDUSTRY OF THE COST OF LABOR AND THE COST OF RAW MATERIALS. The labor employed in the soap factories is principally unskilled. The cost of raw materials is a more important item in the cost of soap than is the cost of labor. According to the figures furnished by the Thirteenth Qensus, all establishments engaged in the manu- facture of soap paid, during the year 1909, for both salaries and wages the sum of $11,733,000, while the cost of raw materials is given as $72,179,000. 78959 VOL 113 26 402 TARIFF HEABINGS. PARAGRAPH 69 SOAPS. The industry has been buiJt up relying upon free raw materials. These materials have been upon the free list under all tariffs, and if a reduction on the manufactured article is contemplated it should only be made upon condition that they remain upon the free list. This condition is peculiarly proper in view of the fact that common laundry soap is used not only for laundry but also for personal and genera] household purposes by the great mass of people. With food and shelter, soap is fairly classed as a necessity. It is not the purpose of the tariff revison to increase the cost of a necessity of life, but on the contrary to reduce the cost of living. The revision of the tariff downward should not be coupled with a new tariff upon ingredients which enter into the manufacture of a necessity which is now sold at a low price and manufactured by an industry conducted without combination but competing in all markets. If to raise revenue it is necessary to impose a tariff upon some articles now upon the free list, it is respectfully submitted that such tariff should not be imposed upon the raw materials heretofore on the free list used in making laundry soap, because: (1) It is a necessary of life; (2) it is sold under highly competitive conditions; (3) it is the product of an industry which has been developed relying upon free raw materials; (4) it is sold at a price which has not contributed to the high cost of Jiving. At the proper time we will present more iully the facts and argu- ments against the imposition of a tax upon the raw materials now on the free list and we refer the committee to our briefs on the item of tallow in Schedule G, dated January 20, 1913, and on the items of oils, gum resin, etc., on the free list schedule, datod January 31, 1913, which will be filed with the committee. We have deemed it advisable while stating our attitude with respect to a reduction of the tariff on laundry soaps to make it clear that such reduction should not be coupled with an imposition of duty upon raw materials now on the free list and which are used in the manufacture of Jaundry soaps. Respectfully submitted. H. W. Brown, of The Procter & Gamble Co., chairman; W. H. Wadhams, of B. T. Babbitt, secretary; L. H. Waltke, of Wm. Waltke & Co., J. R. Collingwood, of Pels & Co.: F. II. Brcnnan, of The N. K. Fail-bank Co., committee of National Conference of Laundry Soap Manufacturers. TELEGRAM PRESENTED BY REPRESENTATIVE LONGWORTH, OF OHIO. Mr. LOXGWORTH. Before we adjourn I would like to read into the record a telegram. The other day a member of the committee said lhat he understood that the Procter & Gamble Co., a large soap- maniiiaeUiring company in Cincinnati, dictated retail prices at which soap should be sold. I telegraphed to the Procter & Gamble Co., asking them if that was true, and received this telegram, which I would like to have read into the record. SCHEDULE A. 403 PABAQBAPH 69 SOAPS. The CHAIRMAN. That will be incorporated in the record, Mr. Longworth. The telegram referred to by Mr. Longworth is as follows: CINCINNATI, OHIO, January 7, 1918. Hon. NICHOLAS LONGWORTH, Washington, D. C.: Replying to your telegram, we have before us only press reports of statements made yesterday in Committee on Ways and Means. We wish to state positively that this company has never attempted to fix the prices at which its soaps are sold by the retail dealers, and so far as we know no laundry soap manufacturers ever have done so. We will appreciate it if you will present this denial to the committee. THE PROCTER & GAMBLE Co. STATEMENT OF WILLIAM H. WADHAMS, REPRESENTING LAUNDRY SOAP MANUFACTURERS. The CHAIRMAN. Mr. Wadhams, you have 15 minutes. Give your name and address to the stenographer. Mr. WADHAMS. William H. Wadhams, 31 Nassau Street, New York City. I notice on the calendar that I am stated to appear for B. T. Babbitt. That is correct, but only in so far as B. T. Babbitt is one of the manufacturers of laundry soap. I appear on behalf of 75 per cent of the common laundry soap manufacturers of the United States. The attitude which we take is this: We were notified by the card which was prepared by the committee that we were requested to state the item concerning which we wished to be heard and also our recommendation. The item is Schedule A, paragraph 69. We have no recommendation. The present tariff is 20 per cent ad valorem. In H. R. 20182 it was proposed to reduce this tax to 15 per cent ad valorem. Our trade has no objection to such reduction. We do not appear here in opposition to the reduction of the tariff, fully realizing the pledge which has been given to the people by the election to reduce the tariff, to revise it downward. We do, however, in our recommendation suggest this proviso: That there be no reduction upon the manufactured article, unless the raw materials used in the laundry soap industry remain upon the free list. We appreciate fully the situation which the committee finds itself in, committed to a revision downward, with a large free list carrying, perhaps I know it has been stated some 53 per cent in value of merchandise coming over our docks; that this merchandise must be looked over; and in order to make up the necessary revenue, certain items now found on the free list must bear the burden of the tax. Therefore it is a question of the relative burden. Now, the laundry- soap industry has peculiar reason to appeal to vou for the reason that it is not a trust. It is highly competitive. There are, according to the census, some 436 concerns scattered throughout the Union in the several States. The laundry soap catalogue makes it six hundred and odd; but we have relied here entirely upon the official figures as reported. We have given a list of the States in which this business is con- ducted, and I think that the personal knowledge of the representa- tives from other States will suggest to them that there are small manufacturers of common laundry soap in every State of the Union. 404 TARIFF HEARINGS. PARAGRAPH 69 SOAPS. These laundry soap concerns are divided : One hundred and forty-six of them are individual manufacturers, 108 of them are firms, and 182 of them are corporations. Their invested capital ranges from less than $5,000 to over $1,000,000; and I have given the divisioh: One hundred and one less than $5,000, 103 less than $20,000, 140 less than $1,000,000, and 13 over $1,000,000. There is no one concern that is dominant, but the highest competitive conditions exist in the trade. It has been a common phrase that "cleanliness is next to godli- ness." It is also, perhaps, something that the committee may take judicial notice of, that one thing that distinguishes our American people from other races is that we are the best washed people in the world. Now, the soap that is used is not the highly perfumed and fancy article imported from France. The soap that is used in the household of the United States is common laundry bar soap. Cut a piece off and use it for personal use in washing, use it for laundering, use it from cellar to attic, for every purpose. That is the staple article. There are approximately 20,000,000 families in the United States, and the experience of the soap manufacturers shows that the average family uses 100 pounds a year. Therefore, there are 2,000,000,000 pounds of common laundry soap consumed in the United States. We think it fair to state, under these circumstances and in view of the standard of living which we set for ourselves and the standard of cleanliness which we require of our people, that com- mon laundry soap may fairly be classed as a necessity of life, coming next to food and shelter and necessary clothing. Now, what is proposed? We have been accorded time by this committee to appear on the 31st, when the free list is taken up, and we propose, with your permission, at that time to go at greater length into the various items that enter into the manufacture of common laundry soap, which are and have been under all tariffs, Republican and Democratic, from the earliest time upon the free list. Mr. KITCHIX. Is that what is called Castile? Mr. WADHAMS. It is not what we call Castile. This is the kind oi soap which you may know, perhaps, if it is used in your household, as Colgate's Octagon or Babbitt's Best, or as one of the common laundry soaps which are used either in bars or cakes of a large size. They are sold two for 5 or 5 cents apiece. That is the custom of the grocery trade which has been established and which can not very well be varied. Mr. HILL. Would Procter & Gamble's Ivory soap come under this heading ? Mr. WADIIAMS. Ivory soap is accepted as a common laundry soap, I think. In that connection, I might say that all these soaps, includ- ing Procter & Gamble's Ivory soap, have used these oils which are placed upon the dutiable list to increase the quality. The great advance in the art has been adding to the basic tallow an oil. which gives a greater lather, makes the soap serviceable in hard-water districts, and has advanced the art so that our soap is the best soap. We produce it largely by the admixture of these oils, making a standard of quality. Xow. if we have established the proposition, that this soap is a necessity of life, then should not the committee, SCHEDULE A. 405 PARAGRAPH 69 SOAPS. in looking over the list of articles upon the free list, not select the entire catalogue of articles which we use in the manufacture of soap to bear the burden of a tax which is to be placed upon that list by reason of reduction on the manufactured article, particularly when this trade come before the committee, in sympathy with its purpose, and state that they have no objection to the reduction on the manu- factured article? This is the situation: At present there is a duty of one-half a cent per pound on tallow, the basis of the soap. It is not mentioned in H. R. 20182, therefore there is no reduction upon that, although it is generally conceded that that has been gathered up in the hands of a few who make and control the market. All the other items, running through them, gum, resin, the oils, coco- nut oil, palm oil, palm-kernel oil, soya-bean oil, olive oil (not edible), all now upon the free list, are to be taxed one-quarter of a cent per pound, with the exception of olive oil (not edible) , which is three-eighths of a cent per pound. The essential oils, used to overcome the odor of tallow, citronella, rosemary, aspic, caraway, thyme, lemon grass, lav- ender, bergamot, mace, palma rosa, geranium all except the latter two now upon the free list are all taxed 20 per cent ad valorem, under H. R. 20182. So that the basic tallow, the basic resin, the basic oils, the common, cheap perfumery oils to overcome the tallow, all these ingredients which go in to make up this necessity of life, have been removed from the free list and a burden placed upon them. It is submitted that this will directly affect the cost of living. We are not here, of course, holding a brief for the people. We appreciate that business is business. This will disturb our business, ana the net result will be that, although, by reason of conditions in the grocery trade, the price of a cake of soap can not be changed, because you can not charge fractions of cents, the net result will be that the size of the cake will have to be changed, because the manufacturer could not manufacture at a profit under the burden which it is pro- posed to place upon him. Mr. KITCHIX. What per cent of the raw material you have just mentioned constitutes your finished product ? Mr. WADHAMS. Practically our entire finished product. Mr. KITCHIX. No: suppose you have $1 as the cost of manufacture of the soap, or the finished product. What per cent of these articles that you have said have been put upon the free list constitute the finished product ? Mr. \\ ADHAMS. You mean, what will it increase the cost of a cake of soap ? Mr. KITCHIX. No; what part or per cent of the finished product is the raw material. You have some labor, too, have you not ? Mr. WADHAMS. Oh, yes. Mr. KITCHIX. You have some overhead charges? Mr. WADHAMS. Yes. sir. Mr. KITCHIX. What part of these materials, which you say have been transferred from the free list to the dutiable list by this pro- posed bill, or the bill passed last year Mr. WADHAMS (interposing). Exactly. I have those figures, and have placed them in the brief in this way. 406 TARIFF HEARINGS. PARAGRAPH 69 SOAPS. It appears from the Thirteenth Census that the raw materials are much the largest item. For example, salaries and wages combined are shown to have been, in the year 1909, $11,733,000, whereas the cost of raw materials was $72,179,000; in other words, that the cost of our raw materials is very nearly seven tunes the cost of wages and salaries. Mr. HARRISON. Have you in your brief a full statement of all the materials of manufacture you use? Mr. WADHAMS. We have in the brief, which we will submit at the hearing on the 31st. This is merely the brief with respect to the proposed reduction of duty on the manufactured article. Mr. HARRISON. Does it also contain a specific statement of the reductions of duty on articles in our bill, or only those noncom- petitive products upon which a revenue tax is to be levied ? Mr. WADHAMS. No; we give the comparative duties of the present Dill and H. R. 20182 for all items. Mr. HARRISON. Even though we have reduced the duty on raw materials ? Mr. WADHAMS. I do not know of any on which you have reduced the duty, except the two most expensive and highly desirable essential oils, known as Palma Rosa and geranium, which are used to some limited extent where the duty was reduced from 25 per cent to 20 per cent ad valorem, and in which we recommend they be placed on the free list. Mr. HARRISON. Have you made a complete statement of all your raw materials used in the manufacture 01 soap ? Mr. WADHAMS. We have. Just in closing, I wish to call to the atten- tion of the committee this general, and perhaps political, condition, which, nevertheless, seems to me to bear upon this situation in deter- mining what shall bear the burden: One is that soap is a necessity of life. The second is that the industry is conducted under highly com- petitive conditions. The third is that it has been built up in this coun- try and developed, relying upon free raw material under all tariffs, Democratic and Republican. The fourth is that it is sold at a price which lias not contributed to the high cost of living. The price of soap to the public has not changed during the last 10 years in any material degree. There may have been some slight fluctuations to the jobber or the middleman, but the cost to the consumer has remained steady. Mr. HARRISON. What is the amount of export trade in soap to-day ? Mr. WADHAMS. I have here, under date of January 2, a table pre- pared by the Department of Commerce and Labor, Bureau of Foreign ;uid Domestic Commerce, which gives a comparison, in pounds and dollars, of the imports for consumption and of the domestic exports. Mr. HARRISON. How many times greater are the exports of soap than the imports ? Mr. WADHAMS. For a period of six years, on both sides of the sheet, they have remained substantially steady. They are approximate, varying from 120,000 to $53,000, the lowest year, 1909, of imports, as compared with $2,695,000, exports, of domestic soap. Mr. KITCHIX. Two millions what, of exports? Mr. WADHAMS. That is in dollars: I am giving dollars. Mr. KITCIIIX. Do we export 2,000,000 worth of soap? SCHEDULE A. 407 PARAGRAPH 69 SOAPS. Mr. WADHAMS. We do. Mr. KITCHIN. And import less than $100,000? Mr. WADHAMS. Yes, sir. This is common laundry soap. I am not talking about the fancy soaps or perfumed soaps. Mr. KITCHIN. I understand. Mr. WADHAMS. I am not talking about castile soap, which is, of course, a soap largely imported, a special soap made of olive oil. I have attempted to analyze the figures, to make the comparison fair. Mr. DIXON. If the raw materials are kept on the free list, how about reducing the duty on the finished product? Mr. WADHAMS. We have stated that we have no objection to a reduction of the duty as proposed. Mr. DIXON. Below even 15 per cent? Mr. WADHAMS. It seems to us that is adequate. Mr. KITCHIN. You spoke about the census figures a while ago, giving the proportion of raw material? Mr. WADHAMS. .Yes, sir. Mr. KITCHIN. And the cost of labor. What about your business? You can tell more about that than the census. Mr. WADHAMS. That is about correct; it is about 7 to 1. Mr. KITCHIN. Why should you not take the business in which you are engaged; that is, your own individual business? Then you can tell better than by the census figures. Mr. WADHAMS. That gives a review of the traffic. Our business, as I say, is about the same. The raw materials are far above any other item of expense. They are our greatest item of expense. They bear about that proportion of 7 to 1 so that the placing of the burden on the raw materials is a very serious matter to the industry. Mr. KITCHIN. Tell me what this castile soap is. Mr. WADHAMS. Castile soap, as I understand it, is a soap which is largely made from olive oil. I think Mr. Harrison will be, perhaps, able to give you better figures than I can on that. But it is produced largely in Italy, and although it is used in competition with laundry soaps, it is a more expensive soap; it is not used in the families of the poor the way that laundry soap is. I think that every household which can afford to buy a variety of soaps has a certain amount of castile soap. We are talking, however, or a household that has only one kind. Mr. KITCHIN. That is the only soap for household use that is imported into this country ? Mr. WADHAMS. That castile is the only kind imported ? Mr. KITCHIN. Yes, sir. Mr. WADHAMS. No. The CHAIRMAN. For your information, if I may be permitted to put it on the record, the value of castile soap imported during the year 1911 was $364,200; medical and medicated soaps, $15,663. Mr. KITCHIN. For 1912 it is $338,000. I do not suppose you have that there. The CHAIRMAN. The value of perfumed soaps was $380,472, and all other soaps amounted to $68,000. Now, Mr. Witness, "all other soaps" covers your soap. 408 TARIFF HEARINGS. PARAGRAPH 69 SOAPS. Mr. KITCHIN. That is what I am getting at, that very little of your kind of soap is imported. How much did you say was exported last year ? Mr. WADHAMS. These different reports seem to vary slightly. This is the official report. Mr. KITCHIN. All kinds, according to the estimate here. Mr. WADHAMS. Exported ? Mr. KITCHIN. Yes. Mr. WADHAMS. I appreciate that that argument would perhaps be against me. Mr. KITCHIN. I just want to see whether this trade report is right in its figures. Mr. WADHAMS. I notice that we get some variation in the reports, and for that reason I fortified myself with this report, which comes from the department. This is a report from the Bureau of Foreign and Domestic Commerce, in the Department of Commerce and Labor, dated January 2, 1913, and shows the figures which I have stated. It is not contended by us that the tariff on soap should not be reduced on the manufactured article. We are hi sympathy with the general attitude of this committee to reduce the tariff on the manufactured article, but our position is that in doing so the raw materials should not bear the burden of the new tax, for the reasons I have stated: The condition of the trade, the fact that it is com- petitive, the fact that this is an article that is a necessity of life, the fact that the industry has been built up upon this raw material, and the fact that we have not contributed to the high cost of living, because the price of our soap remains the same. Now, it seems to us that, of all the industries that you might take up, you could not find one that can come here with such clean hands, that can come here and say, "Do not put the burden on us; we have not put the burden on the people; we will accept a reduction on pur manufactured article: but do not put the burden on our raw materials which we use in this common soap that goes into the homes of the poor, and which is a necessity under modern standards of living." Mr. KITCHIN. The exports for 1912 of other soaps, except toilet and fancy soaps, amount to 82,084,000. What I want to ask you is this: You export this in competition with all other countries, do you not, this industry this two or three million dollars? You export that in competition with all other countries, do you not? Mr. WADHAMS. We do. Mr. KITCHIN. And do you sell it cheaper abroad than you do at home { Mr. WADIIAMS. No. Mr. KITCHIN. So, then, it' these articles called by you raw materials arc kept on the free list that arc now on the free list, you do not need any tarifl' at all, do you ? Mr. WADHAMS. We should have some tariff, and it should not be changed all at once. Mr. KITCHIN. ^ ou do not need it. You are exporting, in compe- tition with all the world, and selling it as cheaply abroad as at home, and no cheaper. Do you need it? SCHEDULE A. 409 PARAGRAPH 69 SOAPS. Mr. WADHAMS. Perhaps I can answer by saying that in France and Germany there is a tariff on soap; in England, as I understand it, there is none. Take the great house of Leber Bros. They had a factory in England. They found they could not sell soap here, so they came over here and opened a factory in this country, and they are making soap here now in large volume. If we are going to compete with the countries of the world, we, of course, would prefer that there should be some tariff upon the manufactured article. If we are going to have a sudden change, the result will be that we are going to nave at once the competition of all Europe; we are going to nave the concentrated governmental aid of Germany in that competition against us. Although not opposing a little reduction we do not know; we can not say positively we fear that a complete removal of the duty would jeopardize the business. Mr. KITCHIN. Let us see whether it could: If you can manufacture it here, ship it across the waters, pay the freight, ship it into Germany and France Mr. WADKAMS (interposing). There is very little into Germany? Mr. KITCHIN. Or into England, how in the name of common sense can they manufacture it there and ship it over here, paying the freight, and come in competition with you ? Mr. WADHAMS. The answer is the same answer which has always been made. Mr. KITCHIN. Which is the tariff ? Mr. WADHAMS. Which is. the tariff, and the answer is the difference in cost of labor, as one item. It is a smaller item with us than with most industries, because ours is unskilled labor. Mr. KITCHIN. But you do, with your high-priced labor, undersell Germany, France, and England, by exporting this $2,000,000 worth in competition with them, and you say you are making it just as cheaply and selling there no cheaper than you sell to our people at home; and I believe you are right about it. I believe you can do it. I know you are doing it. Mr. WADHAMS. We do not deny that we are doing it; I am glad we are doing it. We wish that every industry in the country could do the same. Mr. KITCHIN. Therefore you do not need a tariff to protect it, if you can do that. Mr. WADHAMS. We do not need a high tariff to protect it; no. Mr. KITCHIN. You do not need any to protect it, do you ? Mr. WADHAMS. You can not speculate; I mean, you can not change abruptly. For me to give an assurance to this committee that we could continue to do it would be an absurdity. I can not tell. Whether or not the other countries of the world, taking ad- vantage of that situation, would not be so stimulated in their business that we would suffer the loss of all our export trade is something that can not be stated with definiteness. It is highly probable that it would occur. I think it would be a dangerous thing. I understand that it is the purpose of this committee not to take wholesale action at once, but to proceed moderately and by degrees. Mr. NEEDHAM. How do you understand that ? Mr. WADHAMS. Well, perhaps I should not understand it except that I take it that this committee is proceeding in good faith to do 410 TARIFF HEARINGS. PARAGRAPH 69 SOAPS. what it can to readjust the burden of the tariff with the least dis- turbance of business possible; and I assume that they are working in good faith. The CHAIRMAN. I suggest that probably the witness has read the bill which was sent to the House last year, which was a reasonable reduction. Mr. WADHAMS. Yes; as far as the manufactured goods were con- cerned; but as far as our trade was concerned, we seriously urge upon this committee to reconsider the disposition of the duty on the raw materials, bearing in mind the character of the industry. Mr. PAYNE. Just one question: Of course, when you export the soap, the manufacturers are entitled to a drawback of 99 per cent of the duty paid on the raw material, and I assume they do that. Do you know whether or not they do ? Mr. WADHAMS. I do not, because as a matter of fact the particular company which I represent does not export soap in large quantities. At the last hearing befoie the Senate committee I spoke from my personal knowledge of my own company, and said there was very little exported. Since then I have looked up the figures. I find, and other members of the industry have called my attention to the fact, that I was incorrect in my statement. Mr. PAYNE. The assumption is that they do take advantage of that, to put them on more of an equality, on raw materials, with nations manufacturing abroad that they do get this drawback. Mr. WADHAMS. Of course, the raw materials are now upon the free list, Mr. Payne. Air. PAYNE. All of them? Mr. WADHAMS. Oh, yes; practically all, except tallow. Mr. PAYNE. That is a different thing, then. I thought some of them were dutiable. Mr. HILL. Does your concern fix the prices at which the goods shall be retailed ? Mr. WADHAMS. Each individual manufacturer does. There is no association of soap manufacturers at ah 1 . Mr. HILL. Then, why do you want a tariff at all? Does not Procter & Gamble fix the price at which Ivory soap shall be retailed to the consumer ? Mr. WADHAMS. They make it and they fix the price. Mr. HILL. Does not Babbitt do the same thing? Mr. WADHAMS. Yes. Mr. 11 ILL. Why do you want any tariff at all, then, if you abso- lutely control the price, from the manufacturer down to the ultimate consumer "'. Mr. WADHAMS. Because this is a highly competitive business, and unless we keep up the standard and keep the price right we are going immediately to have competition at home and abroad. Mr. II ILL. You have met the competition and fixed your own prices clear through to the consumer? Mr. WADHAMS. That price has never been changed since B. T. Babbitt, who was the pioneer soap manufacturer, started out. Everybody knows it is a fixed thing. You go to a grocery store and you know what you are going to pay for a bar of soap. SCHEDULE A. 411 PARAGRAPH 69 SOAPS. Mr. HILL. Do you see any consistency between a manufacturer making an article, fixing the price at which it shall be sold, eliminating it from competition, and then coming before the Ways and Means Committee, and asking for a protective duty on the article? Do you see any consistency in those two things ? Mr. WADHAMS. My less experience than yours does not enable me to get your question. Mr. HILL. I have had no experience in the soap business, but I can see inconsistencies. Mr. WADHAMS. What is the question ? I did not get the question. I would like to answer the question if I can understand it. Mr. HILL. I asked you whether there is any consistency in a man- ufacturer making an article, fixing the price at which it is wholesaled, fixing the price at which it is retailed, fixing the price which the consumer shall pay for it, and then coming before a congressional committee and asking for protection on the article. Mr. WADHAMS. We do not fix the price in the sense in which you use the word, where the manufacturer fixes an arbitrary price. The price is fixed by the trade, by what the traffic will bear. We have to take the price we can get for it. We do not fix the price in the sense you used the word. The sense you use is fixing the price where there is a monopoly. This is a highly competitive business. There is not even an association in our business. Mr. HILL. Can a wholesale grocer in New York City sell Babbitt soap at any price he pleases ? Can the retailer, to whom he sells it, sell at any price he pleases ? Mr. WADHAMS. Absolutely; he can sell it at any price. Mr. HILL. Can he get another invoice if he does ? Mr. WADHAMS. Yes, sir; and he does it all the time. If you will go into a department store every once in a while you will see, as an advertising feature, in order to boom their business, a sale of Bab- bitt's soap at seven cakes for a quarter. That is done right along. Mr. HILL. And they can make any price they please ? Mr. WADHAMS. They can make any price they please. Mr. HILL. And without conflict with the contract under which they bought it from the manufacturer ? Mr. WADHAMS. There is no contract. We take orders and sell goods. Mr. HILL. Is that true of Procter & Gamble ? Mr. WADHAMS. As far as I know, it is. Mr. HILL. As far as I know r it is not. Mr. WADHAMS. There is not an} 7 business in which there is more, open, free, and honest competition than there is in this laundry- soap business ; absolutely none. Mr. KITCHIN. Brother Hill had these same facts before him when he helped write the Payne bill, did he not ? Mr. WADHAMS. May it please the committee, I can not act as an arbitrator. Mr. KITCHIN. And he gave you these high-protection duties under the same conditions which he is now complaining about, did he not? Mr. WADHAMS. I am here, not for the purpose of in any way taking part hi any political difference as to method. 412 TARIFF HEARINGS. PARAGRAPH 69 SOAPS. Mr. HILL. Nor am I. Mr. WADHAMS. I am here for the purpose of answering such questions as I can and, I think, showing that in this business of common laundry soap although not objecting to a reduction of the tariff, it should be reduced without taking the raw materials we use off the free list and putting the burden of bearing the new tax, which must be raised for revenue, upon a necessity of life, by puttingit upon the free raw materials used in this business. Mr. PETERS. Did I understand you to say that raw materials are now on the free list ? Mr. WADHAMS. All raw materials are now on the free list, except tallow, upon which there is a duty of one-half cent a pound. There is a separate brief filed on the subject of tallow, which comes up under Schedule G, and in order to keep the various things in the classes in which the hearings are held, we put the tallow item under Schedule G on that brief. WASHINGTON, D. C M January 6, 1913. To the Chairman and Members Committee on Ways and Means, House of Representatives, Washington, D. C. GENTLEMEN: This statement is submitted on behalf of laundry soap manufacturers of the United States representing over 75 per cent of the production of common laundry soaps. The item and paragraph concerning which this brief is submitted are: Schedule A, paragraph 69, item "All other soaps not specially provided for in this section, 20 per cent ad valorem." No change in this item is requested or desired by the laundry soap manufacturers. They do not, however, object to the reduction to 15 per cent ad valorem, as was pro- posed in H. R. 20182, provided the raw materials used by them are allowed to remain on the free list and are not taxed, as was proposed in H. R. 20182. (See brief on behalt of laundry soap manufacturers relative to free list, dated Jan. 31, 1913.) REASONS FOR RECOMMENDATIONS. The laundry soap manufacturers are not opposing a revision of the tariff downward. The laundry soap business has been built up in a highly competitive industry scattered throughout the United States. FACTS RELATING TO THE SOAP INDUSTRY. Number of soap factories in the United States, according to the United States census, is 43(J. Locations: There are suap factories in all sections, and nearly every State in the Union has one or more factories, as follows: California 27 Minnesota 5 Colorado 4 Mississippi 1 Connecticut 14 Missoun 10 Delaware 1 Montana 1 District of Columbia 1 : Nebraska 4 Georgia 3 Nevada ".'.'.'. I Illinois 34 New Hampshire 7 Indiana.. 15 New Jersey 14 Iowa.. 7 New York 67 Kans as 4 Ohio 43 Kentucky 5 Oklahoma 1 Louisiana 4 Oregon. . 3 Maine 3 Pennsylvania... 60 Maryland 4 Rhode Island 8 Massachusetts 36 . South Carolina 1 Michigan 11 i Tennessee 4 SCHEDULE A. 413 PARAGRAPH 69 SOAPS. Texas Utah Vermont. Virginia Washington . Wisconsin.. 1 5 16 Character of establishments (out of 436). Individual ownership 146 Firms 108 Corporations : 182 Invested capital. Less than $5,000 101 $5,000 but less than $20,000 103 $20,000 but less than $100,000 140 $100,000 but less than $1,000,000 79 $1,000,000 and over 13 There is no soap trust. There is no combination of soap manufacturers. There is keen competition in all sections of the country. This competition com- pels each manufacturer to give the largest possible cake or the best possible quality or the lowest possible price or all of these; otherwise his volume of business can not be increased or even maintained. The prices to consumers of the common and laun- dry soaps we are discussing run between 2$ and 5 cents per cake or bar. While there have been large and almost universal advances in the cost of other essen- tials of life, the retail price of laundry soap has shown no substantial change during a long period of years. COMPARATIVE IMPORTANCE OF THE SOAP INDUSTRY OF THE COST OF LABOR AND THE COST OF RAW MATERIALS. The labor employed in the soap factories is principally unskilled. The cost of raw materials is a more important item in the cost of soap than is the cost of labor. According to the figures furnished by the Thirteenth Census, all establishments engaged in the manufacture of soap paid during the year 1909, for both salaries and wages, the sum of $11,733,000, while the ccst of raw materials is given as $72,179,000. The industry has been built up relying upon free raw materials. These materials have been upon the free list under all tariffs, aad if a reduction on the manufactured article is contemplated it should only be made upon condition that they remain upon the free list. > This condition is peculiarly proper in view of the fact that common laundry soap is used not only for laundry but also for personal and general household purposes by the great mass of people. \Vith food and shelter, soap is fairly classed as a necessity. It is not the purpose of the tariff revision to increase the cost of a necessity of life, but on the contrary to reduce the cost of living. The revision of the tariff downward should not be coupled with a new tariff upon ingredients which enter into the manufac- ture of a necessity which is now sold at a low price and manufactured by an industry conducted without combination but competing in all markets. If to raise revenue it is necessary to impose a tariff upon some articles now upon the free list, it is respect- fully submitted that such tariff should not be imposed upon the raw materials hereto- fore on the free list used in making laundry soap, because: First. It is a necessary of life. Second. It is sold under highly competitive conditions. Third . It is the product of an industry which has been developed relying upon free raw materials. Fourth. It is sold at a price which has not contributed to the high cost of living. At the proper time we will present more fully the facts and arguments against the imposition of a tax upon the raw materials now on the free list, and we refer the com- mittee to our briefs on the item of tallow in Schedule G, dated January 20, 1913, and on the items of oils, gum resin, etc-., on the free list schedule, dated January 31, 1913, which will be filed with the committee. We have deemed it advisable while stating our attitude with respect to a reduction of the tariff on laundry soaps to make it clear that such reduction should not be coupled 414 TARIFF HEAEINGS. PARAGRAPH 69 SOAPS. with an imposition of duty upon raw materials now on the free list and which are used in the manufacture of laundry soaps. Respectfully submitted. H. W. BROWN, Chairman (Of the Procter & Gamble Co., Cincinnati, Ohio;, W. H. WADHAMS, Secretary (Of B. T. Babbitt), L. H. WALTKE (Of Wm. Waltke & Co.), J. B. COLLINGWOOD (Of Fels & Co.), F. H. BRENNAN (Of the N. K. Fairbank Co.), Committee of National Conference of Laundry Soap Manufacturers. TELEGRAM SUBMITTED BY HON. A. G. ALLEN. Mr. Allen presented the following telegram, and asked that it be inserted in the record: CINCINNATI, OHIO, January 7, 191S. Hon. ALFRED G. ALLEN, Washington, D. C. We have before us only press reports of statement made yesterday in Committee on Ways and Means. We wish to state positively that this company has never attempted to fix the prices at which its soaps are sold by the retail dealers, and so far as we know no laundry soap manufacturer has done so. In response to telegram from Mr. Long- worth, have also wired him as above. Will appreciate effort on your part to correct wrong impression. THE PROCTER & GAMBLE Co. LOCKWOOD, BRACKETT & CO., NEW YORK, N. Y., WRITE CONCERNING CASTILE SOAP. NEW YORK CITY, January 28, 1913. Hon. OSCAR W. UNDERWOOD. Chairman Committee on Ways and Means, House of Representatives, Washington, D. C. DEAR SIR: With reference to proposed revised tariff, the alteration in duty on castile soap, at present 1J cents per pound, proposed change to read "15 per cent ad valorem." This change means a flat increase in duty, particularly on the better grades. We respectfully petition you not allow this change to be made, and give the following reasons: The change is uncalled for. Castile soap manufactured in this country sells regularly with satisfactory profits for a much lower price than imported castile soap. Therefore the domestic soap needs no additional protection. The present duty is ample and the proposed increase amounts to undue protection. At the same time may we call your attention to the proposed de- crease in the duty on olive oil. which is the chief article entering into the manufacture of castile soap, amounting to a still further benefit to the manufacturers of castile soap in this country. Imported castile soap is an everyday article of use in most of the homes of this country. It is therefore a common necessity and not a luxury. The advance 4 would have to be borne by the consuming pub- lic and explanation rendered in every drug, grocery, and department SCHEDULE A. 415 PARAGRAPH 69- SOAPS. store that this Congress had advanced the duty when the whole coun- try has been looking for downward revision. If it is desired to increase the total revenue through this proposed increase, that object would fail utterly, because the aggregate import of castile soap would decidedly decrease, resulting in considerably decreased total revenue. A large sum has been paid to this Government each year by im- porters of castile soap. Imported castile soap is sold so closely by the importers that the proposed increase will be a decided hardship. The consumer is paying enough to-day for imported castile soap, which is desired because of its peculiar qualities not existent in domes- tic goods. The increase would drive the consumer to put up with something he or she does not want. Interests controlling the larger soap manufacturing plants of this country need absolutely no additional protection, and those interests are the only interests that would be benefited. This duty has not been disturbed for many years. Very few know this time an increase is proposed. The advance would meet with a clear disapproval in every part of the country. We wish to most seriously bring this to your attention and respect- fully ask that the proposed change in the tariff be withdrawn and that the present duty of 1J cents per pound continue as in the past. Respectfully, yours, LOCKWOOD, BRACKETT & Co. PARAGRAPH 70. Bicarbonate of soda, or supercarbonate of soda, or saleratus, and other alkalies containing fifty per centum or more of bicarbonate of soda, five-eighths of one cent per pound. PARAGRAPH 71. Bichromate and chromate of soda, one and three-fourths cents per pound. See Natural Products Refining Co., page 359. PARAGRAPH 72. Crystal carbonate of soda, or concentrated soda crystals, or monohydrate, or sesquicarbonate of soda, one-fourth of one cent per pound; chlorate of soda, one and one-half cents per pound. PARAGRAPH 73. Hydrate of or caustic soda, one-half of one cent per pound; nitrate of soda and yellow prussiate of soda, two cents per pound; sulphide of soda con- taining not more than thirty-five per centum of sulphide of soda, and hypo- sulphite of soda, three-eighths of one cent per pound; sulphide of soda, concentrated, or containing more than thirty-five per centum of sulphide of soda, three-fourths of one cent per pound. For hyposulphite of soda, etc., see Grasselli Chemical Co., page 326. PARAGRAPH 74. Sal soda, or soda crystals, not concentrated, one-sixth of one cent per pound. 416 TARIFF HEARINGS. PARAGBAPH 75 ARSENIATE OF SODA. PARAGRAPH 75. Soda ash, one-fourth of one cent per pound; arseniate of soda, one cent per pound. ARSENIATE OF SODA. BEIEF OF W. H. BOWKER, BOSTON, MASS., CONCERNING ARSENIATE OF SODA. To the WAYS AND MEANS COMMITTEE, Washington, D. C. GENTLEMEN: I am aware that hearings on Schedule A have been closed, but I hope it is not too late to call the attention of the com- mittee to two items in the schedule which are of vital importance in the preparation of insecticides and fungicides for agricultural pur- poses by farmers and manufacturers. They are blue vitriol and arseniate of soda (pars. 81 and 71, H. R. 20182). You are doubtless aware that the production and sale of insecti- cides and fungicides for the protection of crops, as well as for the protection of shade trees and shrubs, has enormously increased in this country in the past 10 years. It is believed that but for certain insecticides and fungicides the fruit and potato industry of this country would have been wiped out in certain districts, while in the protection of shade trees and shrubs, especially in New England, from the gypsy moth, and brown-tail moth, they have been of very great assistance. Messrs. McCall and Peters, of your committee, will bear me out in this statement. The company which I represent manufactures insecticides and fun- gicides, and for that reason it is interested in having the raw mate- rials which enter into its products admitted duty free. The essential destructive agents of the efficient insecticides and fungicides are arsenic, sulphur, and copper. Arsenic (par. 77) is now on the free list, and it is proposed to retain it in H. R. 20182. Sulphur (par. OS) is now on the free list, and it is proposed to con- tinue it in the new bill. Copper (par. 81) in the form of blue vitriol carries a duty of one- fourtn per cent per pound under the Payne Act. and in the new bill it is proposed to make it free, to which we subscribe, and therefore we urge it for the reason that wo use it extensively in the manufac- ture of fungicides, but we do not manufacture it. Paris green and london purple (par. 91) now carry a duty of 15 per cent, and it is proposed to put mom on the free list, to which the farmer certainly will not object, and we do not, but I should add that wo do not manufacture thorn. But the particular article to which I want to call your attention is soda, arseniate of (par. 7]), which carries a duty under the Payne Act of 1 cont per pound, but in H. R. 20182 it is proposed to make it one-half cont a pound. While this proposed reduction is a step in the right direction, yet 1 would respectfully request that this article be admit I od duty froo for the following reasons: To most manufacturers of insecticides, and to all farmers who man- ufacture their own, arseniate of soda is the initial source of arsenic SCHEDULE A. 417 PARAGRAPH 76 SILICATE OF SODA. and therefore more essential than arsenic, which is admitted duty free, and which is the destructive poison in all insecticides used for killing leaf-eating insects. It may be urged that arseniate of soda is a manufactured product, which is true; so likewise is blue vitriol, which is the initial source of copper, the destructive fungicidal agent in the preparation of Bor- deaux mixture by farmers and by many manufacturers. Since both are initial sources, one of copper and the other of arsenic, both should be admitted free. Arseniate of soda does not materially contribute to the revenue (only $1,684 in 1911) and it never will, but the duty on it serves to keep up its price in this country, and thus the price of insecticides of which it forms a component part. I therefore respectfully request that before H. R. 20182 is submit- ted in its revised form that arseniate of soda (par. 71) be put on the free list, instead of at one-half cent per pound as proposed, and that blue vitriol (par. 81) be put on the free list as proposed. Respectfully submitted. W. H. BOWKER, President Bowker Insecticide Go. 43 CHATHAM STREET, BOSTON, MASS., January 29, 191S. PARAGRAPH 76. Silicate of soda, or other alkaline silicate, three-eighths of one cent per pound. See Grasselli Chemical Co., page 329. SILICATE OF SODA. BRIEF OF MECHLING BEOS. MANUFACTTTKING CO., CAMDEN, N. J. CAMDEN, N. J., January 4, 1918. The COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. G. GENTLEMEN: When your honorable committee considers a reduc- tion in the duty on silicate of soda, we would like to call your atten- tion to the fact that there are a number of grades of silicate of soda manufactured abroad, and that if you form a new tariff bill let your committee specifically name the various grades. The present tariff bill makes the rate of duty on all grades of silicate of soda the same. Silicate of soda glass which contains 100 per cent of silicate of soda takes the same rate as a common solution which tests 40 Baume" and contains about 38 per cent of silicate of soda. The other grade imported tests 60 Banine" and contains about 52 per cent of silicate of soda. We request that your honorable committee in forming your bill specify the percentage of silicate of soda on which duty .is to be paid. We further protest on the ground that a reduction of the tariff on a low-priced article is manifestly unfair to manufacturers located on the Atlantic coast, as it opens competition from abroad, which they 78959 VOL 113 27 418 TAKIFF HEABTNGS. PARAGRAPH 76 SILICATE OF SODA. alone feel. The interior manufacturers are not affected, because the imported goods can not come into their territory on account of the freight rate from the seacoast. The object of a reduction in the tariff is therefore defeated, inas- much as prices are not reduced excepting along the Atlantic coast. Trusting that your committee will give the foregoing their consid- eration, we beg to remain, Very truly, yours, MECHLING BEOS. MANUFACTURING Co., BENJ. S. MECHLING, Secretary. BRIEF OF THE PHILADELPHIA (PA.) QUARTZ CO. ON SILI- CATE OF SODA. PHILADELPHIA, PA., January 7, 191$. Hon. OSCAR W. UNDERWOOD, Chairman Committee on Ways and Means, House of Representatives, Washington, D. C. ESTEEMED FRIEND: Referring to i: Notice of tariff hearings, 1913," dated December 11, 1912. When Schedule A was under consideration last year by the Senate Finance Committee we addressed a letter to Senator Boies Penrose, as chairman of said committee, under date of March 6, 1912, and take the liberty of submitting a copy of the same as representing our views on the subject: Under the existing tariff bill 60 Baume 1 silicate of soda is being imported and 40 Baum6 is not. It is, therefore, evident that the foreign producers are able to pay the present rate of duty on silicate of soda selling approximately at double the price of the ordinary 40 silicate. In the proposed chemical schedule now under consideration silicate of soda is reduced from three-eighths of 1 cent per pound to one-eighth of 1 cent per pound, while the duty on soda ash (which is one of the two raw materials from which silicate of soda is made) is reduced from one-quarter of 1 cent per pound to one-eighth of 1 cent per pound. When the present tariff was prepared the existing relative rates on soda ash and silicate of soda undoubtedly received careful consideration, and it seems to us rea- sonable that the same proportion should be maintained in the proposed tariff, whereas there has been a reduction on soda ash of 50 per cent and on silicate of soda 66$ per cent. If the foreign producer should be able to save 25 cents per 100 pounds on his present American cost he would be in a position to name a price which should enable nim to take much, if not all, of the trade using the alkaline silicates and probably much of the tonnage more neutral than the 60, that sells at a higher price than the 40. Owing to the variation in the quality and gravity of the silicate of soda now being used it would seem reasonable, in fact' right and proper, that the difference in value should be recognized and the rate per pound van- with the Baum6 test; otherwise the rate should be sufficiently high to meet all conditions. We believe as great a reduction in duty as was proposed in the bill referred to will prove a hardship, and we would appreciate thy calling the attention of the Ways and Means Committee to the variation in value and gravity of silicate of soda as stated above. Respectfully, PHILADELPHIA QUARTZ Co. WM. T. ELKINTON, President. SCHEDULE A. 419 PARAGRAPH 79 SPONGES. PARAGRAPH 77. Sulphate of soda, or salt cake, or niter cake, one dollar per ton. PARAGRAPH 78. Moss and sea grass, eel grass, and seaweeds, if manufactured or dyed, ten per centum ad valorem. PARAGRAPH 79. Sponges, twenty per centum ad valorem; manufactures of sponges, or of which sponge is the component material of chief value, not specially provided for in this section, thirty per centum ad valorem. SPONGES. STATEMENT OF ALBERT HART, REPRESENTING LEOUSI, CLONNEY & CO. The CHAIRMAN. Mr. Hart, will you give your name and address to the stenographer ? Mr. HART. Albert Hart, 3941 Walker Street, New York. The CHAIRMAN. The committee has assigned to you 15 minutes. Mr. HART. Before commencing my address I desire to state that through a clerical error Nassau, N. P., was omitted from my brief in connection with imports, and that said imports amount to about $100,000. That is in connection with imports from the Mediter- ranean and Cuba. I appear before you as an American manufacturer asking to have the entire duty removed, not only from the raw material of my in- dustry but from the manufactured product. I do this because ex- perience has demonstrated that the duty on the manufactured product is not necessary in order to permit or to maintain an Ameri- can industry, and the duty on the raw material prevents us from expanding an American manufacturing industry. This is particularly important just on the eve of the opening of the Panama Canal. If you will remove the duty from raw sponges, we American manufac- turers can compete with Great Britain, which is our chief rival for the South American trade, as well as for the trade of Australia, Can- ada. Japan, and other countries. The duty is not needed to protect any American industry producing the raw material of our manufacture. Practically all the sponges of the United States are produced upon the coast of Florida. They are of a very high quality and the demand for them always exceeds the supply. " The industry only employs about 100 boats of 10 tons each and 1 ,000 men. The sponges which we import both from the Medi- terranean and from Cuba can not be substituted for the American sponge; consequently if we American manufacturers concede that we do not need any measure of protection for our finished product, there is no question of protection to any American industry involved. The duty ought to be abolished because it is a direct and entire tax added to the foreign market value of the product and paid by the consumer. To illustrate: If the foreign market value of an imported sponge is a dollar a pound, and we sell it in this country without adding to its value by any process of manufacture, we add to the dollar 25 per cent to cover the duty and charges, and this sum the American consumer pays in addition to our profit. If the tariff is 420 TABTFF HEABINGS. PARAGRAPH 79 SPONGES. taken off sponges, the price to the consumer of the ordinary bath and toilet sponge, which is a necessity, will be immediately reduced 20 per cent. This will be accomplished because the competition in America between importing firms is very keen, and no firm or firms will con- tinue the prices based on the present tariff if that tariff were removed. Also, if the tarn? was reduced, we could continue to pay the same rate of wages in our factories that we are now paying, so there is no question of mamtaining the American rate of wage in our industry. We chiefly desire the abolition of this duty so we could increase the volume of our manufactured product, which would, of course, increase the number of men employed in the various establishments, and we believe that this extension of an American industry would be of far greater permanent value to the country than the inconsiderable duty now collected. We set out in detail in our brief the reason why we can not for our export trade avail ourselves of the drawback provisions of the existing tariff law. In conclusion, I call the attention of the committee to the fact that no tariff will foster this particular American industry, because a sponge is an animal product, but it is of a low organism, and no scheme which is commercially practicable has as yet been devised for increasing the product. On the other hand, the Government has been compelled to adopt stringent regulations to prevent the destruc- tion of the domestic industry through the gathering of the entire Florida crop at one time (see ch. 3342 laws of 1906, 34 Stat. L., p. 313) and makes an annual appropriation to protect the sponge fisheries, which appropriation for the current year is $3,500. If anything, therefore, the importation and use of foreign sponges wherever they can be substituted for the American sponges saves and protects our American industry from destructive exploitation. Air. PAYNE . As I understand you, the only effect of this duty is to bring in a revenue of $43,000 ? Mr. HART. I think it is about $59,000. Air. PAYNE. Sir ? Air. HART. I think it is about $59,000. Air. PAYNE. The only effect, as far as benefits are concerned, is to bring you a revenue of 843,000 ? Air. HART. Somewhere around $40,000 or $50,000. Air. PAYNE. You are aware that this committee is making a tariff for revenue only, and you are making an argument because it is not protective Air. HART. We are making; the argument because the amount of duty that is collected is so very inconsiderable as against Air. PAYNE. It is not protective at all? Air. HART. Sir ? Air. PAYNE. It does not protect any industry, you say? Air. HART. It does not protect our manufacturing industry. Air. PAYNE. It simply brings in a revenue of $43,000? Air. HART. It brings in a revenue somewhere in that neighborhood. Air. PAYNE. As I understand it, this committee is looking for just such tilings ;is that a tariff for revenue. SCHEDULE A. 421 PARAGRAPH 79 SPONGES. Mr. HART. But the country is also looking to the expanding of American manufacturing industries, which will help us to capture the export trade. At the present time we are totally unable to capture that export trade. Great Britain has aU the advantage of the duty, and we are not able to go to a foreign country, into Canada, Australia, or Japan, and compete with the British houses. We have found that out from experience. We have sent a man to South America and we have also sent a man to Australia at a loss, as we found that our prices, with the duty, are higher than the prices of our British competitors; and if we should have this duty removed, it would enable the expansion of this export trade; it will largely in- crease the number of men we will be able to employ and make the business a far larger one than it is at the present time. Gentlemen, what is the sponge business at the present time ? It is of very small volume. The output of American sponges is only worth $700,000, and that is not sufficient to supply our demands. The production of $700,000 worth of sponges is as nothing against the enlarging of the foreign trade and the expansion of the manu- facturing interests of our country. The CHAIRMAN. I will read into the record, hi connection with your statement, the Treasury report of the importations with refer- ence to this article. I find from this report that for 1911 the total importations were valued at $256,479; the duties amounted to $48,371, and the average tax was 18.86 per cent ad valorem. That was on raw sponges Mr. HART. And manufactured sponges The CHAIRMAN. Allow me to finish. Mr. HART. I beg your pardon. The CHAIRMAN. That was the value of the raw sponges. Of manufactured products, the importations amounted to only $61; the duties were $18 and the tax was 30 per cent ad valorem. Mr. HART. The record is not correct. With due respect to your Honor, the record is not correct. The CHAIRMAN. I suppose the committee will have to take the Treasury report on that, but if you have anything further to say about it Mr. HART. With due respect to the committee, the Treasury report is entirely inaccurate. The volume of manufactured sponges imported into the United States, that is chemically bleached, will be considerably more than that sum mentioned by you many many tunes. I know one house alone which imports a considerable quan- tity of chemically bleached sponges, running up into the thousands of dollars not a fewpaltry dollars, but thousands of dollars. Mr. LONGWORTH. What is a manufactured sponge ? Mr. HART. A sponge that is chemically bleached. It is the differ- ence between the raw material (that is, a sponge in its natural state, after it has been cleaned or freed of its animal matter) and the bleached sponge. The raw material is the sponge in its natural state as shipped from the fisheries, trimmed from its roots and untreated by chemicals. The CHAIRMAN. My purpose in reading this into the record is simply to show that the present duty on manufactured sponges was 422 TARIFF HEARINGS. PARAGRAPH 79 SPONGES. prohibitive and that practically none was coming in; that only the raw material was coming in. It was not against your argument. But I want to say this, that of course the committee will be bound to accept the Treasury figures, unless you can produce evidence contro- verting them. If you wish, you may file, hereafter, a statement showing on what evidence you base your statement. Mr. HART. Yes, sir ; the Treasury statement is absolutely incorrect. Mi. KITCHIN. As I read it, in 1912 the Treasury report shows only $58 coming in. Mr. HART. It is absolutely ridiculous. Mr. KITCHIN. We want to know how they got in here without being put on the customhouse books. Mr. HART. The reason may be that there is no specific duty for the raw material and the bleached. The duty on the raw material and the manufactured product is one and the same. There is no reason whatever for an importei Mr. KITCHIN (interposing). You mean, they might have to class them at the customhouse as raw ? Mr. HART. If they bad classified that 20 per cent duty on raw material and 30 per cent duty on manufactured sponges, we would have been in duty bound to have entered them as such and classify them as such, whether raw or bleached. The law only says 20 per cent on sponges ad valorem. The CHAIRMAN. Oh, no; let me read you the law. Paragraph 79 of the Payne law reads as follows: Sponges, twenty per centum ad valorem; manufactures of sponges, or of which sponge is the component material of chief value, not specially provided for in this sec- tion, thirty per centum ad valorem. Mr. HART. That refers to such sponges as antiseptic sponges, which are put up in bottles, and sponges that are specially put up for medical uses, such as operations, and so forth, and used oy the medical profession, but not sponges that are used in commerce. Mr. KITCHIN. In other words, the bleached sponge, which you call the manufactured sponge, comes in under the 20 per cent ad valorem duty ? Mr. HART. Absolutely; and if the record of the Treasury is other- wise, then there is not an importer in the country, who is importing sponges, chemically bleached, that is entering them other than at the low rate. We would like to have a separate duty on all chemi- cally bleached sponges. We would be very well satisfied if you would admit the raw material free and put a duty on the chemically bleached sponges. We think that ought to be done. Mr. HARRISON. Your definition of a manufactured sponge is a chemically bleached sponge ? Mr. HART. Yes, sir. Mr. HARRISON. And that is not accepted by the Treasury Depart- ment as their definition of a manufactured sponge? Mr. HART. Evidently not. They only classify those for the med- ical profession. Mr. HARRISON. Is that just the custom of the trade? Mr. HART. Just the custom of the trade. SCHEDULE A. 423 PARAGRAPH 79 SPONGES. Mr. HARRISON. What are the materials of manufacture that you use in bleaching your sponges ? Mr. HART. Permanganate of potash, hydrochloride, muriatic acid, and sal soda. Mr. HARRISON. Of course, you realize in trying to arrange a tariff the question would arise, in putting sponges on the free list, whether all the materials of manufacture were also on the free list ? Mr. HART. Yes, sir; some are and some are not, I presume; but if some of the materials are not paying a duty we think that would be all the more reason why the chemically bleached should pay a higher duty than the raw material. Air. HARRISON. But it does pay a duty. Mr. HART. Yes; but the raw material also pays a'duty at the same rate, gentlemen, as chemically bleached. Why should not the raw material have a benefit over the chemically bleached ? Mr. SHACKLEFORD. I think there has ben a misreading of that section of the law, and I think that the text of the law will corroborate the witness enthely. We have in all the schedules a saving clause covering things not otherwise provided for, but I think bleached sponges are provided for, and that applies only to manufactured sponges or articles of which sponge constitutes the component ma- terial of chief value. I think the text of the law is in accordance with what the witness has stated. The CHAIRMAN. I do not think there is any provision with ref- erence to bleached sponges in the tariff. Mr. HART. I do not think it mentions raw materials The CHAIRMAN (intei posing). There is no reference to bleached sponges. Mr. HART. The bleached sponges and the raw material come in at the same rate of duty. That is not fair. Mr. KITCHIN. The trade considers a bleached sponge a manu- factured sponge, but the Treasury Department does not so consider it. Mr. HART. It only provides for sponges. Consequently bleached sponges and raw material come m at one and the same duty, which is not fair. We want to expand the manufacturing end of it and to be able to go into foreign countries and to capture tneir trade, which we can not do at present. It cost us $5,000 last year to send a man to Australia to try to sell manufactured products, just to find out that we were too high. I wanted to put a letter in as a matter of record, but my attorney thought it would be of no material importance. We had a letter from one of our customers, telling us that our prices were higher than the prices of our competitors. The statement was made verbally to our Australian agent, "Oh, well, your firm has to pay a duty of 20 per cent on sponges, and there is that much difference. We can, of course, buy cheaper in England, and we do not have to pay that duty on the manufactured product." If we did not have to pay that duty, Jack would be as good as his master. We should be given an opportunity to expand our manufacturing industry; we should be permitted to get our raw materials free, and that would enable us to manufacture sponges cheaper and employ a larger num- ber of men, and we would be able to pay the same rate of wages as we do at the present time. If we were enabled to increase by two or three times our manufacturing business it would be far more 424 TARIFF HEARINGS. PARAGRAPH 79 SPONGES. important, gentlemen, than the forty or fifty thousand dollars in duty that would be collected. Look at the small contracted business that it is ; $700,000 worth in in Florida and $400,000 worth imported; $1,100,000 worth of sponges. Are you not suprised at the smallness of our business ? Can't you do something to help us to increase it ? Are we to remain small people all the time ? There are only about 13 real importers in the business, yet there are about 40 firms, that is to say, ordinary firms, who share m that small volume of business. At the present time, gentlemen, we have a representative in Japan. We are spending our money try- ing to get the export business. We have sent a man to South Amer- ica. He has been down there for two years, and we are in hopes and are spending a lot of money that we can make a success of it. If we do not make a success of it the first year, we will make a success of it the second year, and if we do not make a success of it the second year we are still going to try until we capture it. And we are going to do it if you will give us the necessary assistance. Mr. SHACKLEFORD. Is it your view that the system that makes the cost of manufacture higher in the United States then elsewhere tends to limit our foreign trade ? Mr. HART. The duty is the thing that is the drawback to us. Mr. SHACKLEFORD. I say, the levying of the duty in this country is the thing that tends to increase the cost of manufacture, and do you think that limits your foreign trade ? Mr. HART. That is true. It entirely tends to prevent our success- fully competing in price with our British competitors, who have in their control Mr. SHACKLEFORD. The manufacturer would do just as well if he had a higher profit on his American trade ? Mr. HART. No; but the American manufacturers would increase their home business as well as the export, because the American material is sj very short of the supply that, if we can reduce the cost of the imported goods, we will bring them within reach of the populace in general. Mr. JAMES. Do you think to take this tariff off the raw material would cheapen the product to the consumer of the finished product? Mr. HART. Absolutely so. Mr. JAMES. Would it encourage your industry ? Mr. HART. Absolutely so. If we had raw material free and 20 per cent duty on chemically bleached sponges, it would expand our business. Mr. JAMES. And expand the market ? Mr. HART. Expand the market. I think it would tend to increase and expand the manufactures to a great extent and put us in touch with the Australian, South American, China, and Japan trades. Mr. JAMES. This is a protective tariff, then, that does not protect ? Mr. HART. Absolutely a protective tariff, which retards our expan- sion, the expansion of our manufacturing industry, and it is of quite serious importance to us. Mr. JAMES. By reason of the fact that there is a tarff on the raw material ? Mr. HART, There is at the present time a tariff on the raw material and on the manufactured material at one and the same rate. SCHEDULE A. 426 PARAGRAPH 79 SPONGES. Mr. LONGWORTH. You say that if sponges are put on the free list you will reduce the price 20 per cent ? Mr. HART. Yes. Mr. LONGWORTH. Then, why will you be better off than you are now? Mr. HAKT. As a firm, we do not expect to reap the benefit from the 20 per cent, except by the expansion of our trade. We will not make any more. Mr. LONGWORTH. You make the positive statement in your brief that you have to add 20 per cent to the price because of the tariff cost. Mr. HART. Yes. Mr. LONGWORTH. You then say that if the tariff is taken off you will immediately reduce your price 20 per cent ? Mr. HART. Yes. Mr. LONGWORTH. How are you better off ? Mr. HART. In the first place, the public at large will receive the greater benefit from the reduction in price. Mr. LONGWORTH. No; but you pay 20 per cent more by virtue of the tariff, you say, and you say the moment the tariff is taken off you will reduce your price 20 per cent. Mr. HART. Yes. Mr. LONGWORTH. How are you better off ? Mr. HART. We are better on by reason of the expansion of our busi- ness. We hope to double and treble our business by reason of having raw material free, to enable us to manufacture and sell at a reduction of 20 per cent. We hope that will be the means of our doubling or threefolding the present volume of the business that we already have; and, of course, naturally, the same applies to all other importers who are with me in this movement. Mr. LONGWORTH. I can not see how there is any difference whether you add 20 per cent to your original cost or take it off the price. Mr. HART. If we are able to take it off our raw material, our manu- factured product will cost us that much less. Consequently, we can go into the foreign markets and sell to foreign countries 20 per cent cheaper than we are to-day. Must not that be of benefit to this country ? Mr. LONGWORTH. I can not see how it is of benefit to you. Mr. HART. We are unable to get into the foreign markets now, and is it of no benefit to expand the trade of these countries ? Mr. LONGWORTH. I am talking about your business. Mr. HART. We are looking to the business as a whole, and not our- selves personally. Mr. LONGWORTH. I thought you were. Mr. HART. With this exception: We do look in the long run to expand our business to such an extent as to get the benefit of it. We are not looking to the benefit of the general public in the long run alone. Mr. LONGWORTH. Yes. Mr. HART. But we do not think that will come before 6 or 9 or 12 months. It will take some time to feel the benefit of it, whereas the public at large will receive the immediate benefit of this reduction. Mr. HILL. Under the Dingley law, the duty was 40 per cent on the manufactured product and 20 per cent on the raw material. 426 TARIFF HEABINGS. PARAGRAPH 79 SPONGES. Mr. HART. I beg your pardon. Mr. HILL. I say, under the Dingley law the duty on the finished product was 40 per cent and on the raw product 20 per cent, and the duty was reduced by the Payne bill to 30 and 20 per cent. What is the objection you have in regard to the raw material, where there is no change from 20 per cent ? Mr. HART. We have not been able to expand our export business, nor to increase our manufacturing business by it. Mr. HILL. But what you want now is the duty taken off entirely from the raw material ? Mr. HART. Yes; to enable us to expand the manufacturing end. Mr. HILL. That is really an increase in duty of 20 per cent, if you leave the manufactured product the same. Mr. HART. But we are going to protect ourselves hi this country. Mr. HILL. On the finished product, and raw material, too. Mr. HART. We are going to manufacture the finished material ourselves and give labor a chance to make many times more than at present. We will increase the amount of wages we are to pay and will reap the benefit of it in the long run through the expansion and doubling of our business, besides giving the general public at large the benefit. Mr. LONGWORTH. How many do you employ now ? Mr. HART. We employ at the present time about 18. Mr. LONGWORTH. About 18? Mr. HART. Eighteen. Mr. LONGWORTH. Eighteen American laborers ? Mr. HART. Yes, sir. Mr. LONGWORTH. How long do you work them a day? Mr. HART. How long what, sir ? Mr. LONGWORTH. How long do you work them; how many hours a day do they work ? Mr. HART. They work from 8.30 in the morning until 5.30 in the afternoon. Mr. LONGWORTH. Nine hours. Mr. HART. Yes, sir; nine hours. Mr. LONGWORTH. Are they all men ? Mr. HART. Mostly married men, sir. Mr. LONGWORTH. Eighteen of them ? Mr. HART. Eighteen of them about 18. Mr. LONGWORTH. Now, you want to expand this industry? Mr. HART. We would like to employ 36. Mr. LONGWORTH. As many as that ? Mr. HART. Yes, sir; we hope to. Mr. HILL. Do you produce the manufactures of sponges, or do you manufacture a sponge by bleaching it, etc. ? Mr. HART. We manufacture a sponge by bleaching, trimming it, and assorting it, casing it, and sending out salesmen to sell the sponges. Mr. HILL. Then your completed product comes in at 20 per cent ? Mr. HART. The manufactured product comes in at a rate of 20 per cent, and the raw material comes in at the same rate. Mr. HILL. This bill which passed the House at the last session pro- posed to reduce your raw-material rate to 15 per cent, but left the SCHEDULE A. 427 PARAGRAPH 79 SPONGES. duty- on your finished product at 20 per cent, making a margin of 5 per cent as against the Payne bill of 12 per cent. Mr. HART. A margin of 5 per cent. We would just as leave the Government put the entire duty of 20 per cent on. Mr. HILL. Why should not the duty be taken off both ? Mr. HART. We have no objection whatever to having it taken off both the raw material and the manufactured material. Then Jack is as good as his master as against England, and we in the United States would be perfectly able to take care of ourselves as against the English salesman. Mr. JAMES. You say you just employ 18 men. Then this is really an infant industry. Mr. HART. The whole industry is an infant one, from the stand- point of size, and from the number of years it has been in existence, and it is for you gentlemen to help to expand it. Mr. SHACKLEFORD. These tariff rates are levied for two purposes one is to get revenue and the other is to protect the laboring man. Mr. HART. Yes, sir. Mr. SHACKLEFORD. To protect American men, including these 18 men- Mr. HART. Yes, sir; I might remind you that Mr. Longworth did not ask me the number of men employed as a whole, because that question I could not correctly answer. Mr. SHACKLEFORD. The gentleman from Ohio, Mr. Longworth, seemed to ridicule the fact that you employed only 18. Mr. HART. I did not take it as such. Mr. LOXGWORTH. I am sympathizing with his ambition to expand to 36. Mr. SHACKLEFORD. I say this tariff is levied for the benefit of the laboring men, even if there are only 18 of them. Mr. HART. But the revenue is too small to be considered as against the laboring man. Mr. JAMES. How many firms are there engaged in this same business ? Mr. HART. I am speaking for 95 per cent of the importers in the United States. Mr. JAMES. How many are engaged hi this same business besides your own ? Mr. HART. I should say about 20. Mr. JAMES. About 20 ? Mr. HART. That we recognize. There are a good many smaller concerns also who are, of course, entitled to the same consideration, but I figure only the general average of firms with which we come into fair competition. Mr. JAMES. How many men are engaged in this work in the United States ? Mr. HART. That I could not exactly say, because, of course, I have not been permitted to go into our competitors' factories. There are six firms that certainly employ as many men as we do and one firm that probably employs more than we do, but there are more firms than that. They employ a certain number of men. There are two or three hundred men actually employed. It is a small, mconsider- 428 TABIPF HEARINGS. PABAGBAPH 79 SPONGES. able business. It is a business that if anything can be done t help it expand, its benefits can be very clearly seen at a glance. We shall appreciate it very much if you can see your way clear to accomplish that end. The CHAIRMAN. All right, sir. Mr. HART. Thank you very much. The witness filed the following papers with the committee: BRIEF OF LEOTJSI, CLONNEY & Co. ET AL, ADVOCATING THE REPEAL OF JTHE DUTY ON SPONGES. PRESENT RATE. The present duty on sponges is found in paragraph 79 of the Payne law, and is 20 per cent ad valorem, which is the same rate as under the act of 1897. GENERAL INFORMATION. Until 1852 nearly all the sponges used in the United States were imported from the Mediterranean. In that year Florida commenced to supply sponges. The Florida supply is largely made up of what is known as the sheep's wool sponge, which is as high priced as any sponge in the market. The industry has been a variable one, aa the sponge is an animal of a low order, and a system of sponge culture capable of extending the industry has not yet been devised, although the Bureau of Fisheries believes that it has a system to perpetuate the industry, which is commercially feasible and profitable. From 1900 to 1905 the sponge fishery seemed on the whole to be on the decline. It was revived in 1905 by resorting to diving, which was done by Greeks, who before that had been engaged in the sponge fisheries in the Mediterranean. In 1906 these Greeks took four or five times the normal quantity of sponges. This large crop was felt to be destructive and was followed by legislation in Congress restricting the use of the diving machines and forbidding the use of sponges less than 4 inches in diam- eter. (Stat. L., vol. 34, p. 313.) As a result of these measures, the product of the fishery has fallen to about normal. The Bureau of Fisheries figures from May 1, 1911, to April 30, 1912, are $631,032.74 (partly estimated). The price of these American sponges is fixed by demand and supply and without any reference whatever to the tariff, because the imported sponges do not compete. During the fiscal year 1912 the import of sponges from the Mediterranean was valued at $218,954, dutiable at 20 per cent, while the imports from Cuba were $92,535, dutiable at 20 per cent less 20 per cent, making a total duty collected of $58,596.40. The importations other than from the Mediterranean are almost entirely of a grade not equal to the Florida sheep's wool, and therefore do not compete with that American product. There is never enough of the American product to supply the demand for it. Sponges are imported into the United States in two forms, absolutely raw material and chemically bleached, and the manufacture of sponges in this country consists in their chemical bleaching, which is necessary for their use for bath and toilet purposes. The Government makes an annual appropriation to patrol and protect the fisheries. For this year the appropriation is 83,500. ARGUMENT. There is no justification for the duty on sponges from any point of view. It is not needed to protect American industry, as a sponge is an animal, though of a low organism, and no way has as yet been found to increase its production. The imported sponges do not compete with the American sponges, because the American sponge, being of a high quality, is in great demand for carriage and auto purposes and, being conceded ly superior to the imported sponges, the use of the latter is also eliminated in the particular lines of manufacture and sale where the American sheep's wool is in demand. The duty can not be justified as a revenue measure, as the rate is low, the foreign importation small, and the resulting duty inconsiderable. The duty can not be justified as one imposed upon luxuries. The sponges used in connections with carriages and automobiles are the American sheeps wool, while the SCHEDULE A. 429 PARAGRAPH 70 SPONGES. distinctive use of the Mediterranean and Cuban sponges is for bath and toilet purposes, which are not luxuries. The duty is indefeasible in that it is concededly a tax paid by the consumer. The price of the imported article is not kept down at all by the compettition of the do- mestic production, because the domestic production, being almost entirely of a higher grade, does not compete. Less than 25 per cent in value of the American product is other than sheep's wool. EXPORT TRADE. The imposition of the duty hampers an American manufacturing industry in its export branches. The principal competitor of the United States in the manufacture of sponges is Great Britain. There is no import duty on sponges in Great Britain; consequently the British manufacturer gets his raw material at least 20 per cent less than his American competitor, besides usually having the advantage of a lower freight rate, and on exportations to Canada and the Colonies the added advantage of a preferential tariff in those British Colonies. The American manufacturers of sponges are willing to have the tariff entirely taken off manufactured sponges if at the same time it is taken off raw sponges, as they know the result of that will be to permit them to increase their trade with South America, Australia, and other places. But they can not compete while they have to pay a 20 per cent duty, and their British com- petitor pays none. DRAWBACK INEFFECTIVE. The drawback provisions in the tariff act are impracticable so far as the sponge industry is concerned for the following reasons: 1. It is difficult and almost impossible to identify a chemically bleached sponge with the raw material from which it was made, owing to changes in size and apparent structure. 2. Even if this could be done, the process would be so difficult as to increase the labor cost 300 per cent. 3. It is impossible to establish a standard of loss of weight as each and every sponge varies in loss of weight, depending upon the manner in which the fisherman cleans each sponge at the fishery. Many different degrees of cleanness are found in one boatload of sponges, also some sponges are naturally heavier than others even of the same grade. These and other difficulties make the drawback system inoperative so far as the industry of chemically bleached sponges is concerned. It being shown by this brief statement that the tariff on sponges does not protect any American industry, but, on the contrary, hampers the manufacturing end of the industry, that it is not justified as a revenue measure because of the low duty, the smallness of the importations and the consequently inconsiderable sums col- lected, and it being further shown that the duty is a tax payable by the consumer of a necessity, to wit, bath and toilet sponges, there is no justification for the duty remaining, and it ought to be entirely removed. Respectfully submitted. ALBERT HART, Of LEOUSI, CLONNEY & Co. SPONGES SHOULD BE ADMITTED INTO THE UNITED STATES FREE OF DUTT FOR THE REASONS STATED. First. The coast of Florida is the only sponge-producing center in the United States. Its average yearly yield being under $300,000, and the past and present output has been and is now inadequate to supply the demand. Second. The chief American sponge, i. e., sheep's wool, differs so materially from the imported grades in that its quality and strength are vastly superior that its staple value is assured. Third. Inasmuch as there is not enough American sheep's wool ever to supply the demands, and as it always commands a very high price, almost equal to some grades of Mediterranean honeycomb sponges, it does not require any protection. Fourth. The American sheep's wool for carriage and auto purposes, and for other lines of manufacture, is generally conceded to be so far superior to the imported sponge that the latter's use in those particular lines is almost eliminated. Fifth. The value of sponges is determined wholly and solely by supply and demand, and sponges being a product of nature short crops invariably occur from time to time, 430 TARIFF HEAEINQS. PABAGBAPH 79 SPONGES. due largely to weather conditions during the fishing season; but also to the using up of former fishing grounds. It will thus be seen that the American sheep's wool, by reason of its superiority to any other grade, is purely a distinctive article and needs no tariff protection. Sixth. The Florida market is controlled by the fishermen, who refuse to sell their wares unless a satisfactory price is obtained; and as the market can not withhold from buying, due to the inadequacy of supply to demand, prices are always held to a profita- ble basis. Seventh. Sheep's wool sponges from the West Indies, being of inferior quality and shape, have distinctive uses apart from American sheep's wool. Eighth. Mediterranean sponges have a distinctive use, mainly for bath and toilet purposes. Ninth. The annual importation of sponges for the past six years averages only $442,000; therefore the revenue derived by the Government is of little importance. Tenth. The duty on foreign goods retards commercial progress in that it prevents the free use of the article by the multitude. Eleventh. The import trade could be largely increased by the removal of the duty, without in the least degree interfering with the product of the United States. Respectfully submitted. BLUMAUER FRANK DRUG Co. (And 58 others). For the attention of Mr. Acker. JANUARY 7, 1913. GENERAL APPRAISER, Washington Street, New York City. DEAR SIR: The writer appeared yesterday before the Ways and Means Committee with reference to the tariff on sponges. During the course of his examination before that body the honorable chairman, Congressman Underwood, read into the record paragraph 79 of the tariff act of 1909, which has reference to sponges, and he interpreted same that manufactured sponges referred to chemically bleached products used for bath and toilet, and that the duty levied on them was 30 per cent; also that Govern- ment statistics showed that but $69 worth of manufactured sponges were imported into the United States during the past year. These statements the writer at once refuted, claiming that the $69 worth of goods referred to were medicated sponges and similar products used by the medical profes- sion, and that chemically bleached sponges used for bath and toilet purposes were entered under the 20 per cent duty, as sponges in general, and not as manufactured. The honorable chairman accorded the writer permission to submit proof of these facts. I shall therefore esteem it a favor if you would kindly inform me on these points in order that I may be able to transmit your reply to Congressman Underwood. If possible, will you kindly give an approximate value of chemically bleached sponges annually imported into the United States, and which are used for bath and toilet purposes. Also kindly state the duty that is levied on same, so that I may have the matter entered as a record on the minutes of the committee. Appreciating an early reply, I remain, with thanks for your courtesy, Very truly, yours, ALBERT HART. JANUARY 10, 1913. The COLLECTOR OF CUSTOMS, New York, A r . Y. SIR: The accompanying letter from Messrs. Leousi, Clonney & Co. (Albert Hart), dated January 7, 1913, concerning a question of statistics connected with manufac- tured sponges is referred to you for reply direct, the following being stated for your fnformation : It is the opinion of this office that the item of S69 for manufactured sponges quoted from the statistical record of imports for the United States refers to sponge tents or fancy figures, Avhich are occasionally made from sponges, and not to bleached or cleaned sponges, as all sponges, whether natural, cleaned, or bleached, are returned as sponges at 20 per cent ad valorem under paragraph 79, and would probably be included in the same item for statistical purposes. Regarding the request for an SCHEDULE A. 431 PARAGRAPH 79 SPONGES. "approximate value of chemically bleached sponges annually imported," it is impos- sible for this office to give the information desired. The rate of duty on these would also be 20 per cent ad valorem under paragraph 79. Respectfully, (Signed) F. A. HIGGINS, Appraiser. TREASURY DEPARTMENT, UNITED STATES CUSTOMS SERVICE, New York, January IS, 191S. Messrs. LEOUSI, CLONNEY & Co., 39-41 Walker Street, New York City. SIRS: Your letter of the 7th instant (Albert Hart), addressed to the General Appraiser, relative to the classification of chemically bleached sponges for duty, and the annual importations of such sponges into the United States, has been referred to my office by the United States appraiser, accompanied with a letter from his department covering all the points of your inquiry excepting the statistics of chemically pleached sponges imported. I take pleasure in forwarding to you herewith a copy of the appraiser's letter referred to, and in relation to the statistics of chemically bleached sponges, I have to report that no distinction is made of the character or condition in the statistics of gponges dutiable at 20 per cent ad valorem under paragraph 79. All sponges dutiable at the said rate and under the said paragraph, whether natural, cleaned, or bleached, are grouped in a single class, and it is impossible for me to furnish the statistics of any particular class of sponges thus imported. Respectfully, H. C. STUART, Special Deputy Collector. BRIEF OF ALBERT DAVIS, NEW YORK, N. Y., CONCERNING SPONGES. The MEMBERS OF THE WAYS AND MEANS COMMITTEE. GENTLEMEN : Having been unavoidably prevented from appearing before you, I desire to submit the following sworn affidavit relative to paragraph 79, which I think should be included in the free list. Present rate. The present duty on sponges is found in paragraph 79 of the Payne law, and is 20 per cent ad valorem, which is the same rate as under the act of 1897. First. Because the American waters are totally unable to produce sufficient sponges to supply even domestic demands. Second. The American product being superior to the imported grades for automobile, carriage, and all other washing purposes, is not affected by foreign products, which are mainly used (the better grades) for bath and toilet purposes, and the inferior ones by painters, glass- workers, and general lines of manufacturers, who can not afford to pay the high prices of the domestic sheep's wool. Third. The Florida fishermen regulate their prices by supply and demand, without respect to the imported article. And they have adopted the method of withdrawing their goods from the market whenever the prices bid are not satisfactory. The present prices average about $4 per pound, and this means about $5 per pound for the most desirable sizes, packed and landed in New York. Fourth. Due to the inadequacy of supply and consequent high prices at the fisheries many dealers resort to the pernicious practice of adulterating sponges by means of washing them in a solution of glucose, salt, salts, sand, and other substances, thus increasing the 432 TARIFF HEARINGS. PARAGRAPH 79 SPONGES. weight and consequently reducing the cost. This enables sponges to be apparently sold to the general trade at from 50 to 75 per cent below the regular market quotations. As for instance : An unadulter- ated sponge that is worth from $5.50 to $6.50 per pound in New York (representing an advance of 50 per cent within the last three years) is sold adulterated all over the country at from $3 to $4.50 per pound, the price depending upon the quantity of loaded substance injected into the sponge. Fifth. The American sponge-fishing industry needs no protection, neither does the manufacturing or bleaching industry, provided the raw sponges are admitted free. But with a duty on the raw material, we can not compete with the foreign houses in export trade. Sixth. It is manifestly against Democratic and Republican prin- ciples to allow a manufactured article to be admitted into the United States at one and the same rate as raw material, when an American industry employs laborers at a good wage to turn the raw material into a manufactured article. Seventh. Thirty per cent duty on chemically bleached sponges will protect our American industry and at the same time produce a revenue almost equal to that proposed by a duty of 15 per cent on all grades of sponges as provided in the Underwood bill. In conclusion, we trust that we have clearly shown that nature already protects the Florida industry, enabling the Florida fisher- men to obtain high prices for their products without respect to imports, therefore we hope you will favorably consider our plea, either by admitting all sponges free of duty or by placing a 30 per cent duty on chemically bleached sponges and admitting unbleached sponges free, as outlined herein. Either provision will afford us an opportunity to successfully compete for the export trade, expand the home industry, and enable us to reap a benefit from the opening of the Panama Canal. Respectfully submitted. ALBERT DAVIS, (Of D. Davis & Sons, 45 Warren Street, New York City, N. Y.) PARAGRAPH 80. Strychnia, or strychnine, and all salts thereof, fifteen cents per ounce. For strychnia, etc., see Mallinckrodt Chemical Works et al., page 51. PARAGRAPH 81. Sulphur, refined or sublimed, or flowers of, four dollars per ton. For refined sulphur, see Italian Chamber of Commerce, page 110. PARAGRAPH 82. Sumac, ground, three-tenths of one cent per pound. See Italian Chamber of Commerce, page 104. PARAGRAPH 83. Vanillin, twenty cents per ounce. See Mallinrkrodt Chemical Works et al., page 51; John F. Queeny, page 82; and Verona Chemical Co., page 72. The CHAIRMAN-, This completes the hearing on Schedule A, and the committee will stand adjourned until to-morrow morning. Thereupon the committee adjourned until Wednesday, January 8, 1913, at 10 o'clock a. m. SCHEDULE B. EARTHS, EARTHENWARE, AND GLASSWARE. 78959 VOL 113 28 433 SCHEDULE B EARTHS. EARTHENWARE, AND GLASSWARE. COMMITTEE ON WAYS AXD MEANS, HOUSE OF REPRESENTATIVES, January 8 and 9, 1918. The committee met at 10 o'clock a. m., Hon. Oscar W. Underwood in the chair. Present with the chairman: Messrs. Harrison, Shackleford, Kitchin, James, Rainey, Dixon, Hull, Peters, Palmer, Ansberry, Payne, Dal- zell, Hill, Needham, and Longworth. THE CHAIRMAN: The committee will come to order. PARAGRAPH 84. Fire-brick, weighing not more than ten pounds each, not glazed, enam- eled, ornamented, or decorated in any manner, one dollar and twenty-five cents per ton; glazed, enameled, ornamented, or decorated, thirty-five per centum ad valorem; weighing more than ten pounds each and not specially provided for in this section, not glazed, enameled, ornamented, or decorated in any manner, thirty per centum ad valorem; glazed, enameled, orna- mented, or decorated, thirty-five per centum ad valorem; magnesite brick, chrome brick, and brick other than fire-brick, not glazed, enameled, painted, vitrified, ornamented, or decorated in any manner, twenty-five per centum ad valorem; if glazed, enameled, painted, vitrified, ornamented, or deco rated in any manner, thirty-five per centum ad valorem. PARAGRAPH 85. Tiles, plain unglazed, one color, exceeding two square inches in size, four cents per square foot; glazed, encaustic, ceramic mosaic, vitrified, semi- vitrified, flint, spar, embossed, enameled, ornamented, hand painted, gold decorated, and all other earthenware tiles and tiling, by whatever name known, except pill tiles and so-called quarries or quarry tiles, valued at not exceeding forty cents per square foot, eight cents per square foot; exceeding forty cents per square foot, ten cents per square foot and twenty-five per centum ad valorem; so-called quarries or quarry tiles, forty-five per centum ad valorem; mantels, friezes, and articles of every description, composed wholly or in chief value of tiles or tiling, sixty per centum ad valorem. For tiles and quarries, see W. S. Pitcairn, page 584. TILES. THE ATLAS ROOFING CO. SUBMIT BRIEF ON ROOFING TILES. ATLAS ROOFING Co., Newburgh, N. Y., January 20, 191S. WAYS AND MEANS COMMITTEE, Washington, D. C. DEAR SIRS: We desire to call your attention to paragraph No. 85 of Schedule B. as it relates to roofing tiles. This section fixes the tariff oil roofing tiles at 4 cents per square foot, and so far as it applies to what is known as shingle tile it is an unreasonably exorbitant tariff. For instance, we have been importing some shingle tile, each piece of which is 6\ inches by 1(H inches, making a total area of 68J square inches. The tariff applies to the whole surface of this tile, although 4 inches by 6^ inches is exposed to the weather only. This requires a duty to be paid on 68 J square inches for every 26 square inches 435 436 TAEIFF HEABESTGS. PARAGRAPH 85 TILES. which is actually exposed to the weather on the roof. In other words, the duty is actually $10.50 per square of 100 square feet on the roof. This is about twice what the American tile are sold for at the factories. The only advantages of the English tile are the better range of color and shades, and this makes these tile desirable for a certain class of buildings and considerable revenue could be derived from importers of this tile if the duty was reduced to a reasonable price. The price of the English tile at port of exportation is about the same as the price of the American shingle tile at the factories in this country. To the export price of the English tile must be added the heavy freight rate and the tariff of 10.5 cents per square foot of roof covered, the breakage which is sometimes nearly 50 per cent, and the cost of handling at the import point. This brings the price of this material, when delivered to the railroad station nearest the building on which it is to be used, when same is within 100 miles of the point of import, to about $30 per square, whereas the American tile can be delivered to the same point for from $9 to $12 per square. Considering the expensive freight to this country, the breakage, which is often exces- sive, the expense of handling at the import point, there should be no protection needed for the domestic manufacturer; but if it is considered advisable to maintain a tariff on this material, it should be reduced to a reasonable figure, and it would be more nearly fair to the roofers of this country if the tariff were based on the amount of roof which the tile would cover. You will note by referring to paragraph No. 85 that the 4 cents per square foot applies also to other tile which lay the full amount of surface on which duty is placed, as floor tile, wall tile, and tile for other similar purposes that lay without any lap, and 100 square feet of tile cover a little more than 100 square feet of surface, but with the roofing tile mentioned in this letter, 262 square feet are required to cover 100 square feet of surface, and for that reason the present method of fixing the tariff is unfair to this particular industry. That you may better understand the material involved, we are sending you by parcel post one sample of American shingle tile and one sample of the imported. You will note that the American shingle tile is one solid color over the whole surface, while the imported tile has a certain mottled effect which softens the color and takes away the checkerboard effect produced on the roof by the domestic tiles when they are laid in several different shades of color. The domestic tile can be secured of various shades of red continuing through shades of brown to a tile that is almost black. The same shades are obtained in the imported tile, but there is enough variation of the surface of each tile to soften the coloring and make it look better on the roof. It is more than probable that reducing or removing the duty would cause the American manufacturers to make a tile similar in coloring to the imported, but at present they require the roofers to use what they make or substitute some other material, as they are averse to increasing the variety of tile now on the market. If you desire any further information in regard to this matter, we will be very glad to furnish same so far as we may be able. We are, Very respectfully, ATLAS ROOFING Co., H. A. DANIEL, President. BRIEF SUBMITTED BY THE MEYER CO., NEW YORK CITY. PARAGRAPH 85. Assesse_s duty on quarries or quarry tiles 45 per cent ad valorem and in accordance with section 18 the same duty is assessed on the crates, barrels, etc., containing same, in which they are packed for protection from injury during transportation^ The sizes _of these quarries are 9 by 9 by 1| and 6 by 6 by 1. They are used for flooring, interior and exterior work. It is impossible to bring these goods forward from the works loose, as the breakage and damage by handling is excessive, and furthermore the transportation lines, railroad and steamship, will not handle them loose. Bringing them forward in large crockery crates which weighed from 1,000 to 1,500 pounds demonstrated that breakage through jarring was a large percentage. Packing in barrels, it was also found, did not overcome thisT breakage, and finally experiment proved that packing 16 pieces of the 9 by 9 in a little crate and 48 to 54 pieces of fi by 6 overcame the difficulty; that the breakage was insignificant, and these packages many years ago became the unit of sale. SCHEDULE B. 437 PABAGRAPH 85 TILES. It is necessary to make this statement to prepare you for the following: The average cost of the 9 by 9 and 6 by 6 is $15.50 per thousand. The average cost of packing same in crates, carriage from the manufacturers' works to Liverpool, and freight by steamer from Liverpool to New York, Philadelphia, and Boston is $19.50 and irrespective of any United States duty is 126$ per cent of the cost of the quarries at the manufacturers' works. The average rate of duty which is paid on the quarries and the packing is over 67 per cent of the value of the goods at the manufacturers works. The American manufacturer of similar goods, if made, is therefore protected to the extent of 193$ per cent on the basis of said American manufacturer delivering his goods on rails or by boat from his works at the initial competing point, an Atlantic port. To all points west of the seaboard the American manufacturer is further protected to the extent of the freight from the Atlantic seaboard. By the excessive duty imposed by the Payne- Aldrich bill the purchasing power of the dollar of the ultimate consumer is greatly reduced. We appeal for an abolition of the assessment of duty on the value of the crates or coverings to protect these goods from injury during transportation, and a reduction of the duty from 45 per cent ad valorem to either a specific duty of one-half to three- fourths cent per square foot or an ad valorem duty of 20 to 25 per cent. We submit the above. We wrote asking to be heard by the Committee on Ways and Means, on January 6, 1913, but received no reply. THE MEYER Co., 2 53 Broadway, New York City. JANUARY 9, 1913. BRIEF OF ADOLPH GRANT & CO., NEW YORK CITY. ADOLPH GRANT & Co., New York, December 27, 1912. The CLERK OF THE WAYS AND MEANS COMMITTEE, Washington, D. C. MY DEAR SIR: We desire to submit to your honorable body the following brief, regarding duties on tiles which will come up for your consideration on January 8. There is at the present time a combination among the tile manufacturers of the United States. These manufacturers being the following: Alhambra Tile Co., New- port, Ky.; American Encaustic Tile Co., Zanesville, Ohio; Architectural Tile Co., Maurer, N. J.; Beaver Falls Tile Co., Beaver Falls, Pa.; Cambridge Tile Co., Cov- ington, Ky.; Grueby Tile & Faience Co., Boston, Mass.; Mosaic Tile Co., Zanesville, Ohio; The Empire Floor Tile Co., Zanesville, Ohio; National Tile Co., Anderson, Ind.; Robertson Art Tile Co., Trenton, N. J.; Matawan Tile Co., Matawan, N. J.; Old Bridge Tile Co., Old Bridge, N. J.; C. Pardee Works, Perth Amboy, N. J.; Star Encaustic Tile Co., Pittsburgh, Pa.; Trent Tile Co., Trenton, N. J.; United States Encaustic Tile Works, Indianapolis, Ind. This combination was formed about four months ago, for the purpose of regulating the price on tiles made in this country. Prior to this combination we could buy a satisfactory white glazed wall tile at 15 cents a square foot; but since the combination, we are charged 18 cents a square foot. Prior to the combination we bought the vit- reous floor tiles, known as ceramics, sizes being 1 inch and 1J inch, shapes being square, round, and hexagon, for the sum of 10 cents a square foot. To-day we are charged 14 cents for the same tiles and 15 cents per square foot for the 1J inch. Prior to the combination, we bought 2-inch in size vitreous tiles at 16 cents a square foot, and to-day we are paying 22 cents for the same tiles. I have found, upon investigating, no advance in the cost of material, nor has labor advanced. The present duty on glazed tiles, less than 40 cents per square foot, is 8 cents a foot, which makes the cost of tile brought into this country, buying the tile at the cheapest possible market in Europe, and including the duty, 24 cents a foot. These tiles compare with the tiles sold by the American manufacturers, as above stated, at 18 cents a foot and are known as Standards. The American manufac- turers have also made a tile known as selected tile at 22 J cents a square foot. It is my contention that the American manufacturers can make tiles in this country as cheap as they are made in England, as tile sold formerly (before this last combina- tion of the manufacturers) at 15 cents a square foot compared favorably with the tile bought in England at 16 cents a foot, on which we had to pay 8 cents duty as well as freight. The tile industry in this country would not suffer in the least if the entire duty were removed . The only sufferers would be the excessive profits to the manufacturers. 438 TARIFF HEARINGS. PARAGRAPH 86 CEMENT. I further believe that if the duty could be reduced to 2 or 3 cents per square foot on tiles that cost less than 25 cents a square foot in Europe, that importation would be greatly increased. This argument holds good with the rest of the tiles above referred to. In addition to the pool formed by these manufacturers to sell their wares at a given price (and it is impossible to get either one of them to deviate from it) they also have made their rules for payment, and should a tile dealer purchase tiles from either manufacturer and not pay within the prescribed time, no tile manufacturer in the United States is allowed to sell this individual tile until he has paid his bill, even though the tile dealer may have a just cause for refusing to pay the bill. These manufacturers have their headquarters in Beaver Falls, Pa., where the books of every tile manufacturer in the United States are kept, and they are kept complete in every detail. The expense for paying this is born by the manufacturers. The amount of payment toward supporting this undertaking is dependent upon the amount of business done by the various manufacturers, those whose sales are largest paying the greatest fee into the pool. It is not my purpose to discuss the merits of this pool or combination, because if it is an unlawful one the Government can decide it; but I am interested in having the duties on tiles lowered or completely abolished, because I believe it will be to the best interests of our Government and to the advantage of the greatest number of American people. I hold myself in readiness to substantiate orally before your honorable body any statement made by me in the above brief, and beg to remain at your command. Very respectfully submitted. ADOLPH GRANT. PAEAGEAPH 86. Eoman, Portland, and other hydraulic cement, in barrels, sacks, or other packages, eight cents per one hundred pounds, including weight of barrel or package; in bulk, seven cents per one hundred pounds; other cement, not otherwise specially provided for in this section, twenty per centum ad valorem. CEMENT. STATEMENT OF ROBERT W. LESLEY, ESQ., REPRESENTING THE AMERICAN ASSOCIATION OF PORTLAND CEMENT MANUFAC- TURERS. Mr. LESLEY. Mr. Chairman and gentlemen, I have a brief here which I would like permission to file. First, I do not want to appear under false colors. Mr. Wilson is the secretary of the association in whose behalf I appear. I am the president of the American Cement Co. The brief you have before you explains very fully the position of this industry with relation to the tariff. In dealing with the matter 1 want to call your attention to the fact that this is one of the great mineral industries of the United States, of the nonmetallic minerals that rank up near copper and salt. It is a large employer of labor and a large producer of materials. It produced last vear about 79, 000, 000 barrels. There is a capital of $150,000,000. It employed, according to 1909 statistics, about 35,000 people about 30,000 then and now about 35,000 to-day and in all there are close to 175,000 to 'JOOjOOO people dependent on the industry. As a matter of fact, it is a national industry; it is not localized; it is all over the United States. Practically every State in the Union has cement works. Cement can be made almost any place where clay and limestone is found. In looking over the list of your hon- orable committee when 1 came in to-day I found out that out of 21 members, 17 have cement works in tHe States which they repre- SCHEDULE B. 439 PARAGRAPH 86 CEMENT. sent. So it speaks very fairly for the general distribution of the industry. In reference to the duty on this material, it has been maintained practically uniformly for a number of years. It has a very low duty, ranging to-day about 20 per cent. I have had the pleasure of appear- ing before almost every Ways and Means Committee since the prepara- tion of the Mills tariff in 1886. In that tariff as prepared, in the Mc- Kinley bill as prepared, in the Wilson bill as prepared, and adopted in the Dingley bill and in the Payne bill, this duty has been main- tained practically uniformly all the way through. My argument is to this point, that a duty to be proper and right must be just and must be fair. To test tnat, if you will take the trouble to look at just two or three figures in the little pamphlet that I have given you, you will find this duty rather conforms to three important elements. First , has it increased the industry ? I have been connected with the industry since an output of 50,000 barrels was made, and for the year 1912 there has been an output of practically 80,000,000 barrels. Mr KITCHIN. How many pounds ? Mr LESLEY. Three hundred and eighty pounds to the barrel, of Portland cement, which is practically to-day the only cement recognized. The industry, in its growth to that extent, has spread all over the United States, and, as I have already stated, it is a national industry. The next test, I think, in considering a duty, is, has the consumer been injured, and has the result of the duty tended to increase or to lower prices? If you will kindly turn to the diagram on the outside of the pam- phlet, you will see a chart that has practically meant disaster to a very important industry. The tariff has enabled us to grow, but, unfortunately, as you will see, the prices have gone down year after year, until the table there shows practically the lowest prices in the history of the business. The third test, it seems to me, is the test of what has happened to the laboring man. The labor in the industry, in the face of this enormous reduction in price, has been constantly increasing, so that the figures for 1890, where lime and cement workers are grouped, show $430 a year, while the figures for 1909, the last obtainable, show S576. In the Lehigh district, where I am particularly inter- ested, the labor was $1.10 per day in 1890 and to-day it is from $1.40 to $1.50. I claim, therefore, that on these three big broad principles this duty is fairly justified and fairly sustained and is a very reasonable and just duty. The next question is what would result in taking off the duty. I am frank to say that in a great many of the works located in the center of the United States they would not be affected because cement is a commodity weighing 380 pounds to the barrel, and foreign cement would not reach the great inland markets of the country. They would reduce the prices of those work, by lessening the ultimate distribution of cement from eastern works as it goes west, but it would not immediately destroy the industries of the Middle West. 440 TARIFF HEARINGS. PARAGRAPH 86 CEMENT. On the other hand, the great industries of the Southern States would be vitally injured by the importation of this heavy commodity in vessels coming to seaports in ballast to get cargoes of cotton; that is, in other words, seaports which are not importing cement per se but are great outbound seaports in the shipping of cotton. Those ports would receive a shipment of cement, and I think it would seriously injure the industry in the South. I believe at the same time that results on the Pacific coast would be analogous where the great grain shipments would furnish out- bound cargoes to vessels on return trips around Cape Horn. As to the question of what enters into cement, if you will take the trouble to IOOK on page 5 you will find there it is practically all labor. What is not labor is coal, which in turn represents other labor. I should say in the manufacture of a barrel or cement very nearly 90 per cent is labor or coal. Practically it is a labor proposition and labor is the element that will be injured by any change in the duty. As to the result to the industry as a whole from its great growth and by this great reduction in prices, if you will turn to page 7 you will see a series of sad monuments to the cement industry. There are about 32 failures out of 110 works, and I think 1 or 2 failures have been recorded since this little pamphlet was prepared. In other words, the industry while it has had this remarkable growth and furnished this remarkable material, has been most unsuccessful and most lacking in prosperity, so far as the money return has been concerned, in the last few years. The advantage to the community at large of the development of this industry under this equitable duty has been to make school- houses fireproof, theaters fireproof, buildings fireproof, houses for cheap rents fireproof; to make old streets safe with good paving, instead of wooden pavements and brick pavements; to develop to-day the great modern road on which motors travel and which has come to mean a very great aid to health; the development has enabled us to replace old bridges with permanent material. I believe all in all the development of this great industry under this duty has been of the greatest advantage to the country. I leave this matter in the hands of this committee with the same feeling of confidence, the same feeling of fairness and justice with which it has been left with every committee that has dealt with it, and I feel perfectly confident that you will consider the recommen- dations. There is a little loose memorandum in reference to white cement, which is produced in a small way, but which is a growing industry in connection with Portland cement. I trust you will consider that paragraph and enable them to grow as has grown this great big industry which I represent here. I thank you verv much. Mr. KITCHIX. How much capital do vour companies represent? Mr. LESLEY. About $150,000,000, I would say. They have not beon summarized of late. Mr. KITCHIN. What is the production for 1912? What was the American production ? Mr. LESLEY. The American production was about 79,000,000 of barrels. SCHEDULE B. 441 PARAGRAPH 86 CEMENT. Mr. KITCHIN. Worth how much? Mr. LESLEY. Worth about $66,000,000. You will find that on page 6 of my brief. Mr. KITCHEN. How many companies are engaged in this business ? Mr. LESLEY. I think the American Association of Portland Cement Manufacturers, which I represent here, represents some 70 companies, between 60 and 70 companies. Mr. KITCHIN. A few years ago something appeared in the papers to the effect that the Standard Oil Co. owned a large part of the stock of the cement industries. Mr. LESLEY. I do not know of any ownership of that kind. Many years ago John Rockefeller, jr., owned an interest in the Northampton Portland Cement Co., but I am sorry to say that appears among this list of bankrupt companies. Mr. KITCHIN. But do not some of the large stockholders, some of the largest stockholders in the Standard Oil Co., own large blocks of stock in the cement companies ? Mr. LESLEY. I do not know of any except this one interest and the interest of the Lockharts of Pittsburgh in the Alpha Cement Co., up on the Delaware River, near Easton. Mr. KITCHIN. Are there not directors of the Standard Oil Co. who are directors of the cement companies ? Mr. LESLEY. None that I know of. Mr. KITCHIN. How much capital stock is outstanding in these companies, do you know ? Mr. LESLEY. That I would be unable to give you. They are mostly under State charters and would appear there. Mr. KITCHIN. To which company do you belong ? Mr. LESLEY. I belong to the American Cement Co. of New Jersey. Mr. KITCHIN. When was it organized ? Mr. LESLEY. It was organized in 1899, I think, or 1900. Mr. KITCHIN. What was the paid-in capital when it was first organized ? Mr. LESLEY. $2,100,000. Mr. KITCHIN. What is the paid-in capital now ? Mr. LESLEY. It is the sarre, and I am sorry to add that it is in the hands of receivers. Mr. KITCHIN. After it gets out of the hands of the receivers what company are the stockholders going in then? What company do they contemplate organizing? Mr. LESLEY. They are going to reorganize this company with an additional capital. Mr. KITCHIX. Sometimes it is a pretty -good thing to go into the hands of receivers, to reorganize. Mr. LESLEY. I am awfully sorr^ to say I am the principal stock- holder, and I wish I could agree with you. Mr. KITCHIN. I do not say that as to your company, but some- times it is profitable to get in the hands of receivers and to reorganize, is it not? You produced, you say, 866,000,000 worth of cement last year that is, the manufacturer's price last } T ear? Mr. LESLEY. That is the report to the Geological Survey. 442 TABIIT HEABOTGS. i PARAGRAPH 86 CEMENT. Mr. KITCHIN. There was not imported a half of 1 per cent of Ameri- can consumption. Mr. LESLEY. I agree with you. Mr. KITCHIN. The imports to this country were less than $125,000. Mr. LESLEY. That is right. Mr. KITCHIN. You produced $66,000,000 worth? Mr. LESLEY. That is right. Mr. KITCHIN. You exported in competition with all the nations of the world more than $5,000,000 worth? Mr. LESLEY. I am going to correct you right there. We exported about three millions, and the great part of tnat went to the Panama Canal; but we are an exporting nation. I want to agree with you there. Mr. KITCHIN. According to the Treasury figures, you exported last year over $5,000,000 worth. Mr. LESLEY. I do not want to disagree with you, and I will take it for granted you have the right figures. Mr. KITCHIN. You probably mean you exported three millions out- side of the Panama Canal contract. Mr. LESLEY. I do not think so. Mr. KITCHIN. How can you export this in competition with all the nations if the other nations make it cheaper and sell it cheaper ? Mr. LESLEY. The answer to that is, cement is a very heavy com- modity and it is largely a freight question. In other words, take a ship sailing from Hamburg to get a cargo of cotton at Savannah. It might not get any outbound cargo, and would therefore have to go in ballast. It therefore gets a cargo which loads and unloads itself, this heavy cement, instead of ballast. Mr. KITCHIN. But a barrel of cement weighs just as much going across the water as coming. Mr. LESLEY. Quite right, and that is met in this way. For instance suppose a shipment from here to South Africa or to one of the South American countries. Our exports to these countries are light in weight. In other words, we are exporting commodities that take up room, but do not weigh heavily like agricultural implements or auto- mobiles, or hardware, various tools, typewriters, and that sort of thing. They take up ship room, but do not weigh heavily. Mr. KITCHIN. They w T eigh as much coming back as they do going. "What country exports cement to this country? Mr. LESLEY. Belgium, and Germany some. Mr. KITCHIX. Which is the greatest exporting country? Mr. LESLEY. I would say Germany is the greatest to-day. Mr. KITCHIX. Which is the next ? Mr. LESLEY. England is next. Mr. KITCHIX. A weight of 100 pounds will weigh as much coming from Germany here as it does going from here to Germany. Mr. LESLEY. Quite right. Mr. KITCHIX. Do not we ship some to England? Mr. LESLEY. Xo; we do not ship any there. Maybe I am Mr. KITCHIX (interposing). I expect you are mistaken about that. Mr. LESLEY. Xo. I want to be perfectly fair with you. I agree with you on the question of weight. But let me make this clear. If SCHEDULE B. 443 PARAGRAPH 86 CEMENT. a ship was starting from Hamburg to get a cargo of cotton, that ship figures on the round trip. If the rates outbound on cotton for Ham- burg are good, that ship can afford to go over in ballast. If at the time she is starting in ballast somebody offers her a cargo of cement, which loads and unloads itself, the ship will carry that. That is the answer as to the 100 pounds from the other side. On the other hand, let us take a ship in the regular trading com- panies, going to Brazil or South Africa it has a cargo of bulky things such as I say, automobiles, agricultural implements, and so forth, which are bulky, but do not weigh heavily, and that ship wants ballast. That ship in turn will pick up a cargo of cement for the same reason as did the Hamburg ship. And while 100 pounds is the same, it has a lot of trade difference. Mr. KITCHIN. I see. But. you American cement producers seem to strike it lucky. You are more luckv about these ships than these foreigners, because you exported 40 times more than they imported. Mr. LESLEY. That is quite right. Mr. KITCHIN. So that you really get an advantage in imports over the foreigners. Of course you get these advantageous ships. Mr. LESLEY. We do, and I hope to see the exports grow. I am very frank about it. Mr. KITCHIN. You do not really sell this cement cheaper to foreigners than you do to our own home folks ? Mr. LESLEY. Not to my knowledge. I do not believe it could be sold lower than it was sold last year. Mr. KITCHIN. Is it not a fact that you ship to Canada; that you export a great deal to Canada ? Mr. LESLEY. Not so much now. We have gone there in years gone by. Mr. KITCHIN. You have shipped to Canada in competition with England, which has a third preferential duty rate over us. Mr. LESLEY. That is true. Mr. KITCHIN. You overcome that 33| tariff preferential in favor of England, and then undersell England in Canada? Mr. LESLEY. That is true. Mr. KITCHIN. If you can do that, what fear do you have of England or Germany or any other country shipping across the water this heavy article and coming into competition with you and running you out of business here in your own home market if we put cement on the free list ? Mr. LESLEY. The point I want to meet you on is this: It is a great big geographical question. Let us imagine a man out at Winnipeg wanting cement. There are works in Iowa and works out in Spokane and in that territory. Those people have a great deal lower rate into Winnipeg. As the price to the consumer is the mill price plus the freight, he would get that cheaper from America, plus the duty, at a lower rate than he would get cement coming from England, which would come into Quebec or Montreal and have to pay the rates across the continent. Mr. KITCHIN. But we are exporting cement to eastern Canada. Would the advantage be in our favor to the extent of the freight and also to the extent of this reduction in the tariff rates which England has over us ? 444 TARIFF HEARINGS. PARAGRAPH 86 CEMENT. Mr. LESLEY. In many cases- Mr. KITCHIN (interposing). I mean in cement cases. Mr. LESLEY. In cement, yes; that is what I am talking about. In many cases the rate on a barrel of cement to somewhere in many parts of our country represents, taking a dollar as the unit, a dollar for cement and a dollar for freight; the freight rates are so high on this heayy commodity that the most of it is freight. For that reason these mills have been located in different centers. Mr. KITCHIN. Do you know what the tariff is on cement in Canada ? Mr. LESLEY. I think it was reduced lately. My recollection is that it is about 40 cents. Mr. HARRISON. Was it not recently entirely suspended ? Mr. LESLEY. No; I think it was a reduction owing to a shortage. Mr. KITCHIN. The tariff rate is higher in Canada than here on ce- ment, is it not ? Mr. LESLEY. Oh, yes. Mr. KITCHIN. And yet you can sell to her consumers there, paying a higher tariff rate than we have, selling in competition with England, which has a 33 per cent preferential in her favor actually under- selling England in Canada. Do you really think you will need any protective tariff to protect you against England coming here in your own territory I Mr. LESLEY. I would answer you this wise Mr. KITCHIN (interposing). Will you answer it yes or no? Mr. LESLEY. I will answer you no and then I will say yes, on the seaboard. I said at the beginning of my remarks I did not think the interior of our country was threatened by this importation. Mr. KITCHIN. All right. Mr. LESLEY. And as to this Canadian importation, if you will pardon me for a minute, where we have been able to get cement into Canada has all been far oil' from the seaboard and in the interior of the continent. I want to meet you perfectly fairly. In the interior I think you are dead right; I do not want to qualify it. But on the seaboard I think conditions are different. Mr. KITCHIN. All right. On the seaboard do you not sell, out of every $100, more than $99 of cement which is used on the seaboard; 899 out of every S100 worth of cement that is consumed on the seaboard ? Mr. LESLEY. Yes; with reference to the north, but not with refer- ence to the south. Mr. KITCHIN. The whole United States did not consume more than S12o. 000 worth of cement from the foreigners in 1912. Mr. LESLEY. If you will look at this table you will see in a panic year, when times were hard, as in 1903 Mr. KITCHIN (interposing). How about 1912? I have the figures here. Mr. LESLEY. You have some very good figures. I am glad to talk it over with you. Mr. KITCHIN. The American Cement Association gave you your figures ? Mr. LESLEY. No. All our figures are official, from Government reports. I did not deem it fair to take any figures which were not official in coming before you. SCHEDULE B. 445 PARAGRAPH 86 CEMENT. Mr. SHACKLEFORD. You say the foreigner makes it cheaper than you. Suppose you have no freight to pay; how could you sell it? Mr. LESLEY. I think on this heavy commodity it is absolutely a question of freight. Mr. SHACKLEFORD. I say, suppose you have your freight for noth- ing. If it be true they could manufacture cheaper than you could do it, how did you sell your products in foreign countries in competition with the foreign products that are made cheaper than you make yours ? Mr. LESLEY. The answer to that would be this : We had a par- ticular freight rate at this particular point, and their freight rate at that particular point might be another one entirely. I think it is purely a freight question. Mr. KITCHIN. Canada used to be one of our competitors ? Is it any longer a competitor in the American market ? 'Mr. LESLEY. I do not think so, except right up north, in the Lake Champlain district. Mr. KITCHIN. Not much now, probably, but you made it so cheap you ran Canada out of business. Last year she only exported here about three or four hundred dollars' worth. Mr. LESLEY. I do not think she had any business to come over the line here. Mr. KITCHIN. To be accurate, she only exported into this country, in competition with your $66,000,000 worth of cement last year, $261 worth; and up to three or four years ago she used to export here several thousand dollars' worth. Mr. LESLEY. Yes; but it was a drop Mr. KITCHIN (interposing) . And you ran her out of the American market. Mr. LESLEY. It is but a drop in the bucket. Mr. KITCHIN. That is right; I do not blame you. Mr. LESLEY. The point I am trying to argue is that in bad times, in panicky years, then this i used as a dumping ground for foreign cement. And with the advantages they have in cargoes in ballast, at a great many seaports, I believe it would be a serious injury to the industry. But I do not want to disguise the fact it is a pretty lusty industry; it has grown and is growing. But a good many have gone broke in connection with it, mj'self included. Mr. KITCHIX. Some people would grow poor in the cement industry if they ran up against American competition, with a tariff of $2 in- stead of 20 cents. Mr. LESLEY. I am the oldest manufacturer in the business and I thought I knew my business; but I could not compete with the low prices that have been made for the last several years. Mr. KITCHIX. You represent this bankrupt concern ? Mr. LESLEY. Yes. Mr. KITCHIN. And this association of successful concerns got the bankrupt concern to come here to represent them? Mr. LESLEY. I do not think that is a fair argument. Mr. KITCHIX. I am asking you. Mr. LESLEY. The answer to that is that I had been before this committee previously, and they felt that, knowing a number of the gentlemen here and having appeared before, I might be more familiar 446 TARIFF HEARINGS. PABAGRAPH 86 CEMENT. with the subject. And I really felt complimented in being asked to appear, in the face of my adversity. Mr. KITCHIN. But the truth about the business here is that this rate of 8 cents per 100 pounds did not have anything to do with your company going into bankruptcy? Mr. LESLEY. I would not say that. I want to be fair. I think it is American competition which has had a great deal to do with it. I think it would be even more severe if foreign cement were permitted to come in as ballast at seaport points. Mr. RAINEY. Did the United States buy all the cement for the Gatun Dam, on the Panama Canal, from American manufacturers? Mr. LESLEY. Practically all. We supplied some. The balance was supplied by the Atlas Cement Co. Mr. RAINEY. Operating along the Mississippi River? Mr. LESLEY. No; operating at Northampton. Mr. PALMER. It comes from my district. Mr. RAINEY. Was any supplied by the company at Hannibal, Mo. ? Mr. LESLEY. I do not think so. They are connected with the same company. Mr. RAINEY. Did the Government get machinery from foreign companies ? Mr. LESLEY. Yes, sir: very much cheaper. I think the best illus- tration of the sort of rates that have been made in this industry is exemplified in that contract, and it absolutely answers any question of collusion. On the basis of bids being for 4,500,000 bushels, the difference between the bid of the company that got the contract and the next lowest American bidder was about SI, 000, 000. So there was quite a big room for guessing, because on about 4,000,000 bushels the difference was $1,000,000. Mr. PALMER. Were there foreign bidders on that contract? Mr. LESLEY. I think a few. Mr. PALMER. Were there many American bidders? Mr. LESLEY. My recollection is there were four or five American bidders, and this big difference existed. Mr. PALMER. The contract was originally for four and a half million barrels, and was afterwards increased to about 6,000,000 barrels? Mr. LESLEY. Yes. Mr. PALMER. From the same company? Mr. LESLEY. Yes. Mr. PALMER. What was the price per barrel under that contract? Mr. LESLEY. I can only give you newspaper reports of the contract. It was somewhere about 65 cents at the mill. Mr. PALMER. What is the present prevailing price for the cement? Mr. LESLEY. The price last year was around 55 to 60. It has now gone up to 80. Mr. PALMER. What was the prevailing price at the time the con- tract was made with the Government '( Mr. LESLEY. The prevailing price then was about 80 cents. Mr. PALMER. So it was about 15 cents more. Mr. LESLEY. Yes. Mr. PALMER. You state that importations increased in panicky times. SCHEDULE B. 447 PARAGRAPH 86 CEMENT. Mr. LESLEY. Yes. Mr. PALMER. What year in recent times illustrates that increase in importations ? Mr. LESLEY. I think in 1903 there was quite a large importation, and that it has continued off and on. Mr. PALMER. How large an importation was there in 1903 ? Mr. LESLEY. My recollection is there were about 3,000,000 barrels. Mr. PALMER. Do you call that a large importation? Mr. LESLEY. It was a large importation in proportion to the out- put at that time. It was about ten or eleven millions, something of that kind, as I recollect. Mr. PALMER. In 1905 the output was about 26,000,000 as against imports of about 1,000,000. Mr. LESLEY. Yes; but things began to mend a little then. Mr PALMER. But they have been coming down steadily since 1905 ? Mr. LESLEY. Absolutely. Mr. PALMER. The present importation amounted to something over $200,000, coming from where? Mr. LESLEY. I would say as a general proposition that the Germans supplied the largest quantity at the present time. Mr. PALMER. Where does it go to ? Mr. LESLEY. It must necessarily, except in special cases, go to seaports like Savannah or Charleston, or some of the ports which have outbound cargoes. Some may go to the Pacific coast. Mr. PALMER. There is nothing special about a foreign cement which would take it inland, over the American cement? Cement is cement, in other words. Mr. LESLEY. I should say that is so, except hi very rare cases. I know of some German brewers who a few years ago used a certain German brand; they still adhere to their first love, and we can not convince them they are wrong. Mr. PALMER. Does that condition exist inland and on the seaboard ? Mr. LESLEY. Inland to some extent, but the occasions are excep- tional. Mr. PALMER. What is the prevailing foreign price in cement to-day ? Mr. LESLEY. I think in Germany it is between 5 and 6 marks. I would not like to give you the present quotation. Their prices to-day are based on the wooden package, and ours are based on the bag package. We base it really on bulk. Mr. PALMER. Their prices are higher than ours, as a rule. Mr. LESLEY. I think the same conditions prevail in the cement industry as in the steel industry. The trade has had a very good year and prices are higher. Mr. PALMER. Has that not been generally true for four or five years in the cement business ? Mr. LESLEY. No. Some years ago we could buy it cheaper there than here. Mr. PALMER. That was hi 1903. Mr. LESLEY. No; since then. I think along in 1907 and 1908 we could buy it cheaper. Things were very hard over there and there was a great surplus. 448 TARIFF HE A KINGS. PARAGRAPH 86 CEMENT. Mr. PALMER. Is not the real reason why there is no importation of the foreign article that it sells over there for more money than it sells over here, and that even aside from the freight proposition it could not come in unless they shipped it below their usual prices ? Mr. LESLEY. I think that is a fact. As I have saia before, I think it is in panicky years, when we would need the labor most and need to give men employment most, that it would be more serious. Mr. PALMER. We are not going to have any more panics for at least four years. Mr. KITCHIN. You refer to the continuing panic from 1907 to about 1911. Mr. LESLEY. Do I what ? Mr. KITCHIN. You refer to the panic that continued from 1907 to 1911? Mr. LESLEY. I just hate to think about it. Mr. KITCHIN. From November, 1907, to 1910 was the panic to which you refer ? Mr. LESLEY. There was a panic along there. Mr. KITCHIN. It was a very serious panic, was it not ? Mr. LESLEY. I have great hopes you will agree with all these other committees to give us a chance, to give the community at large a chance, all to be very prosperous without any more of these panics. Mr. RAINEY. This bidding which recently occurred in connection with the Panama Canal contract was real competitive bidding? Mr. LESLEY. I understand so. The Government got it very ad- vantageously. Mr. RAIXEY. Between manufacturers here and manufacturers abroad ? Mr. LESLEY. Yes. Mr. RAINEY. Of course, manufacturers here were compelled to disregard the tariff to bid against manufacturers abroad ? Mr. LESLEY. I think that is a free zone in Panama for our cement. I think there is no duty on this cement going into Panama. Mr. RAINEY. I am not talking about that part of it. Of course, there is no duty on it when it is shipped into the Panama Canal Zone. But I say, when competing with German firms, or other for- eign firms, you disregarded the tariff and competed with them on the basis as if there were no tariff wall between this country and Germany against foreign manufacturing competition, and in that competition the American manufacturers won without the assistance of the tariff at all ? Is not that true ? And the largest sale made in the last hundred years was made as the result of that free competitive bidding by American manufacturers, who went in and who could not have been protected in that bidding by the tariff at all. Mr. LESLEY. I am going to answer that in this way: In the free- zone belt. American goods intended for use in the canal, went in free, and goods from abroad paid a duty. Mr. RAIXEY. But YOU were trying to sell to this Government and foreign manufacturers were trying to sell to this Government. There- fore you met on a iield with no tariff wall between you and you bid the lowest and secured the greatest cement contract ever made. Is not that true ? SCHEDULE B. 449 PARAGRAPH 86 CEMENT. Mr. LESLEY. Maybe I have not got the thing quite right in my mind. I want to see if I am right. We bid without any duty on the commodity. The foreigner bid, having to pay a duty on the commodity. We beat him out by reason of that advantage which we had. Mr. RAINET. Did the Government compel foreigners furnishing cement to the zone to pay a duty to the Government ? Mr. LESLEY. Yes; that is the law. I think that law came out in some of these Scotch dredges that came in. I think they wanted a special act admitting them. I think that answers your question, and I am very sure I am right about the law, because I remember the clause very well. Mr. RAINEY. With reference to these dredges, is it not true that the President of the United States threatened to purchase the dredges abroad and disregard our navigation laws and everything else ? Mr. LESLEY. I think he did. I think they passed a special act exempting it, as I recollect. But the general law covering the Panama ('anal Zone does give a preferential to American manufac- turers. Mr. RAINEY. With quality and cost considered? That is the law? Mr. LESLEY. Yes, sir; that is my recollection about it. Mr. RAINEY. Was it the result of the preferential that you got the cement contract? Mr. LESLEY. I think there was a little difference in cost, I think only a few cents in cost, between the American bid and the lowest foreign bid; and the quality was fully equal. Mr. HARRISON. Are there any further questions? If not, that will conclude your statement, Mr. Lesley. Mr. LESLEY. Thank you very much for your attention. ARGUMENT ON BEHALF OF THE ASSOCIATION OF AMERICAN PORTLAND CEMENT MANUFACTURERS. [On Schedule B: Earths, earthenware, and glassware. Subheid, paragraph 86. " Cement, lime, and plaster." "Roman, Portland, and other hydraulic cement, in barrels, sacks, or other packages, 8 cents per hun- dred pounds, including weight of barrel or package; in bulk, 7 cents per hundred pounds; other cement, 20 per cent ad valorem."] Your petitioner, the Association of American Portland Cement Manufacturers, which is a voluntary association for the dissemination of information in connection with the uses of Portland cement, and which represents in its membership nearly 90 per cent of the output of the United States, presents the following argument in support of the retention of the present rate of duty on Portland cement. HISTORY OF THE DUTY. In connection with the duty on Portland cement it will be noted in the paragraph above quoted that the rate of duty upon cement not enumerated is on the basis of 20 per cent, and the following table, showing the importation?, the values, the duty collected, and the rate of duty in percentages, shows the average percentage of duty upon Portland cement for the last nine years to have been about 22 per cent. 78959 VOL 113 29 450 TARIFF HEARINGS. PARAGRAPH 86 CEMENT. Cement tariff statistics, 1903-1911. Calendar year. Official statistics. Calculated results. Pounds im- ported. Value. Total duty collected. Per cent. 1903 927.180,235 418,.%!, 431 338,630,739 882, 284, 967 802,491,371 331,850,000 171,034,800 109,760,000 62,113,600 $3,027,111 1,382,913 1,102,041 2,950,268 2,637,424 1, 178, 105 636,085 371,550 240,163 $741, 744. 18 334,849.14 270,904.59 705,827.97 641,993.10 265, 480. 00 136, 827. 84 87,808.00 48,690.88 24.4 24.2 24.5 23.8 24.3 22.5 21.5 23.4 20.3 1904 1905 1906 1907 1908 1909 1910 1911 By reference to the Tariff Commission of 1882, to the proposed Mills bill, to the Wilson bill, and to the McKinley and Dingley bills, it will be noted that the duty on cement has been considered more as a revenue than as a protective duty, and that in all the period referred to the rate has been practically maintained at or near 20 per cent ad valorem, thus indicating that in the minds of those who had to do with the prepara- tion of tariff bills in the past twenty-odd years the duty on cement was considered reasonable and proper, and one which had as its basic reasons its fairness, its modera- tion, and its revenue-raising powers. In considering the question of the duty on Portland cement, it is respectfully urged that THIS INDUSTRY IS A NATIONAL ONE. In this connection, by a reference to the " Cement Industry in the United States in 1911," Department of the Interior, United States Geological Survey, prepared by Mr. Ernest F. Burchard, it will be noted that there were in existence during the past year cement works in Illinois, Indiana, Kansas, Michigan, New Jersey, New York, Ohio, Pennsylvania, Alabama, Georgia, Virginia, West Virginia, Colorado, Texas, Utah, California, Washington, Kentucky, Iowa, Oklahoma, Tennessee, Maryland, and Montana. In addition to this, in the 1910 report, in referring to the occurrence of raw material for cement making, it Ls shown that the materials for the manufacture of Portland cement can be found in every State and Territory of the Union. This table illustrates clearly the national chaiacter of the industry, and the fact that in asking for its preservation and maintenance in its present condition no geographical lines nor geographical interests are making the request, but a national association of practically all the manufacturers of the United States representing an industry capable of develop- ment in every State and Territory of the Union. In view of the consideration shown at the hands of your honorable committee it would seem necessary to show the operations of the Dingley Act in connection with the present rate of duty as tested under reasonable economic conditions, fair to both producer and consumer. Therefore the arguments are grouped under several heads, as follows, showing the operation of the present law: (a) The growth of the American cement industry. (b) The reduction of prices to the consumer. (c) The continuous importation of foreign cements. (d) The labor conditions in the cement industry. (e) The general benefits to the country. (/) No "trust" in the cement industry. THE GROWTH OF THE AMERICAN CEMENT INDUSTRY. The following table shows the growth of the American Portland cement industry since the passage of (lie Dingley bill, together with the value of the production in dollars. These figures are from the reports of the United States Geological Survey. SCHEDULE B. PARAGRAPH 86 CEMENT. 451 Year. Barrels. Value. Year. Barrels. Value. 1897 2, 677, 775 $4,315,891 1905 35, 246, 812 $33, 245, 867 1898 3, 692, 284 5,970,773 1906 46,463,424 52,466,186 1S99 5,652,266 8,074,371 1907 4S. 7S5.390 53,992,551 1900 8, 482, 020 9,280,525 1908 51.072,612 43 547 679 1901 12,711,225 12,532,360 1909 64,991,431 52,858,354 1902 17,230,644 20,864,078 1 1910 76,549,951 68,205,800 1903 22, 342. 973 27,713,319 , 1911 78 528 637 66 248 817 1904 26, 505, 881 23,355,119 THE REDUCTION OF PRICES TO THE CONSUMER. The appended table, showing the average prices of Portland cement as gathered by the I nited States Geological Survey from 1870 to 1911, is most instructive, and shows that since the year 1890 the price has been practically cut in half. Since the year 1897, the date of the passage of the Dingley bill, the price has fallen over 47 per cent, or from $1.61 to $0.844 per barrel. Average prices of Portland cement, 1870-1911. Average price. 1870-1880 $3.00 1881 1882 1883 1884 1885-1888 1.95 1889 1890 1891 1892 1893 1894 1895 1896 1897 (year of Dingley bill) 1.61 THE CONTINUOUS IMPORTATION OF FOREIGN CEMENT. It will be noted that during the last few yeare the importation of foreign cements ha& been materially decreased . This is due to the fact that we have here in the United States a productive capacity of at least 20 per cent over and above the capacity for consumption. Under these conditions 32 mills have gone through receivers' hands in the last four years and have either reorganized in such a way as to cause their stockholders great loss or are idle. They are as follows: 1, The Alabama Portland Cement Co.; 2, Alma Cement Co.; 3, The Alpena Portland Cement Co. ; 4, American Cement Co. of New Jersey; 5, Buck- eye Portland Cement Co.; 6, Buckhorn Portland Cement Co.; 7, Castalia Portland Cement Co.; 8, Egyptian Portland Cement Co.; 9, Elk Cement & Lime Co.; 10, Em- pire Portland Cement Co.; 11, Hecla Portland Cement Co.; 12, Marengo Portland Cement Co.; 13, Wayland Portland Cement Co.; 14, Northampton Portland Cement Co.; 15, Omega Portland Cement Co.; 16, Western Portland Cement Co.; 17, York Portland Cement Co.; 18, Atlantic Portland Cement Co.; 19, Atlantic & Gulf Portland Cement Co.; 20, Blanc Stainless Cement Co.; 21, Bonner Brand Portland Cement Co.; 22, Great Western Portland Cement Co.; 23, Lily White Cement Co.; 24, Monarch Portland Cement Co.; 25, Norfolk Portland Cement Corporation; 26, Penn-Allen Ce- ment Co. ; 27, Piedmont Portland Cement & Lime Co. ; 28, Santa Cruz Portland Cement Co.; 29, Standard Portland Cement Corporation; 30, United States Cement Co.; 31, Altoona Portland Cement Co.; 32, Tola Portland Cement Co. price. .3.00 1898 Average price. $1 62 2.50 1899 1 43 2.01 1900 1 09 2.15 1901 99 2.10 1902 1. 21 1.95 1903 1 24 1.67 1904 88 2.09 1905 96 2.13 1906 1 13 2.11 1907 1 11 1.91 1903 85 1.73 1909 813 1.60 1910 891 1.57 1911 844 1.61 452 TARIFF HEARINGS. ' PARAGRAPH 86 CEMENT. LABOR CONDITIONS IN THE CEMENT INDUSTRY. For the information of the committee the process of manufacturing Portland cement should be briefly explained. Limestones and clays, limestone, marls and clays, or other similar argillaceous or calcareous materials are mined or quarried and trans- ported to heavy crushing and grinding machinery, where, under the process most commonly in use (the dry process), they are ground to powder of a fineness so great as to practically pass a 100-mesh sieve. This fine powder is subsequently fed into rotary kilns from 60 to 150 feet in length, where it is calcined to incipient vitri- faction by means of pulverized coal, gas, or oil flames entering the kiln at the oppo- site end to that in which the powder is fed. The material which is thrown from the kiln is in the shape of small nodules of great hardness and is called Portland cement clinker. This clinker is again crushed and ground in various forms of iron ball or tube mills to a fineness of from 90 to 95 per cent on a 100-mesh sieve. It is then put into bags or barrels and is the Portlana cement of commerce. To produce a single barrel of Portland cement very nearly 1,100 pounds of material have to be ground, of which between 600 and 700 pounds is the raw material from which the carbonic- acid gas is expelled in the kiln, and 380 pounds is the Portland cement of commerce. In addition to this, nearly 200 pounds of coal are used, of which one-half has to be ground to an equal fineness for the calcination and production of every barrel of cement. From the above statement it should need no argument to convince this committee that the manufacture of Portland cement is essentially a labor proposition. It is labor in the quarry, labor in the raw material, labor in the coal-grinding plant, labor in the finishing mill, and labor in the packing house, and what is not actual labor in and around a cement mill is practically labor in coal, which represents so large a proportion of the weight of the finished product; in point of fact, nearly 50 per cent thereof. For the most part the labor in and around cement mills is ordinary day labor and compares with the labor in and about the manufacture of pig iron. It averages, so far as ordinary day labor is concerned, from $1.40 to $2 per day, according to the section of the country where mill is located. The higher-priced men get from $3 to $5 per day, according to ability. Comparisons of labor cost in this country and in Europe have been repeatedly made, and as a broad proposition it can be safely stated the labor in Europe is on an average from 30 to 40 per cent less than the labor cost per barrel of Portland cement in the "United States. Coal, on the other hand, is cheaper here than abroad. The labor employed in the Portland cement industry is scattered all over the coun- try, there being nearly 100 works in operation, in almost every State of the Union, and any action your committee will take to destroy so important an industry as this by any radical reduction of duty will affect labor conditions seriously in many States of the Union, especially in the State of Pennsylvania, where a large proportion of the Port- land cement of the country is made. This is also the case in the State of Kansas, which is another large producer, and in some of the Southern States, where the industry is just beginning to find a foothold. THE GENERAL BENEFITS TO THE COUNTRY. A reference to almost any scientific magazine, an examination of almost any news- paper, will show the growth of the American Portland cement industry under the present law and the development of many new uses of cement. From the erection of the skyscraper of from 15 to 20 stories in height, constructed entirely of concrete, to the building of the small house of the workingman. concrete is finding a field of the greatest value and use to the American public. Apart from its permanent character, its fire-resisting qualities make it the ideal building material. In sanitary qualities and in its economical virtues in reducing fire risk concrete is becoming recognized as the building material of the future. Not only, however, is this material coming into use in the matter of dwellings and office buildings, but also for factory construction, the building of railway stations, the fabrication of silos, grain elevators, and other work, such as telegraph poles, railway ties. etc. In addition, it has found many uses of great value for both farmer and manufacturer. While the fence post, the hitching post, the motor foundation, the silo, the pigsty on the farm, owe their permanence and strength to concrete, so also the ornamental garden seat, the decorated pergola, the font in the public and private gardens and parks have the same origin. Necessity certainly was the mother of invention when, with the rapidly approaching failure of the lumber supply of the United States, as indicated by the forestry reports, the de- SCHEDULE B. 453 PARAGRAPH 86 CEMENT. velopment of this great Portland cement industry was made possible by the laws that have governed the importation of foreign cements. Thus, by the introduction and development of the uses for this new building material, the deforestation of the United States has possibly been postponed for many years. One of the newer uses of concrete is in road construction. Not only do most engi- neers recognize concrete as the best known material for foundations, but during the last few years no top surfacing is used, the concrete taking the wear. The first cost is very little greater than macadam, and the fact that little or no repairs are necessary permits money ordinarily expended for repairs to be used in improving more miles of road. In concluding this branch of the argument, it may be stated that the American cement industry is also finding foreign markets. The table of production, imports, and exports (below), covering the last 11 years, indicates clearly that the industry, BO far as the world's markets are concerned, is not being stifled. The danger of admitting foreign cement at any reduced duty is a danger to pros- perity. In times of world panics America is made the dumping ground of Portland cement by European nations, and this is particularly the case in view of the fact that Portland cement forms one of the most important articles of ballast for foreign -vessels coming to this country for cargoes of the products of the soil. The points of heaviest imports of foreign cement are Charleston, Savannah, Pensacola, Mobile, New Orleans, and Galveston, where foreign vessels come for outbound cotton cargoes. The same applies to the Pacific coast, where not only Belgian, German, and English cements come in in ballast in vessels coming for grain cargoes, but also Chinese and Japanese cement made by the cheap labor of the Orient; and all this in the face of the fact that within a few miles of San Francisco there are four cement works in actual operation. Two other plants have lately been built in Washington, north of Seattle, and these plants have also felt the inroads of foreign cement. About two years ago 10 of the largest cement plants in the Dominion of Canada were consolidated under a single management. A lowering of cement duty might enable them to dump cement into the northern border States at prices ruinous to the United States mills now supplying that district. The mills in New York, New Jersey, Pennsylvania, Ohio, Michigan, Indiana, Illinois, and Washington would be seriously affected, and as the mills in these States produce to-day 67 per cent of the output of the whole country, it can be readily seen what a detrimental effect such a reduction would have on the entire industry. Table showing production, imports, and exports, in barrels. 1902 1903 1904 1905 1006 Domestic production 17,230,644 22,342,973 26,505,881 35,246,812 46,463,424 Imports 1,903,023 2,251,969 968,410 896,845 2,273,493 Total available supply 19,193,667 24,594,942 27,474,291 36,143,657 48,736,917 Exports 340, 821 285,463 774,940 897,686 583,299 Apparent consumption 13,852,846 24, 309, 479 26,699,351 35,245,971 48,153,618 1907 1908 1909 1910 1911 Domestic production 48,785,390 51,072,612 64,991,431 76,549,951 78,528,637 r mports 2,033,403 842, 121 443, R88 300,863 164,679 Total available supply 50, SIS, 853 51,914,733 65,435,319 76,856,814 78,693,307 Exports 900,550 846,528 1,056,922 2,475,957 3,135,409 Apparent consumption 49, 918, 303 51,068,205 64, 378, 397 74,380,857 75,557,898 NO 'TRUST ix THE CEMENT INDUSTRY. In conclusion, it is but fair to say to the committee that there is no trust in the Portland cement industry, and the course of prices during the last few years indi- cates this very clearly. The best, reason for this is stated by Mr. Edwin C. Eckel, in his report on the cem%nt industry for 1906, Department of the Interior, United States Geological Survey, where, on page 11, he states: 454 TARIFF HEARINGS. PARAGRAPH 86 CEMENT. " Perhaps the most marked feature of American economic history during the last decade has been the manner in which industry after industry has become consoli- dated in control, so as to approach more or less closely to monopoly. This has been particularly well marked in the iron and steel industries, and it is worth consider- ing how far a similar evolution is likely to affect the cement industry. At present the cement industry is the most individualistic of the larger branches of manufacture . No 'trust,' nor even any approach to a monopoly, is now in existence, newspaper statements to the contrary notwithstanding, and, in the writer's opinion, the nature of the cement industry renders it impossible that any such large degree of consoli- dation of interest can take place as to result in permanently or unfairly high prices for the product. "When the history of both successful and unsuccessful 'trusts' is examined, it will be seen that the only way in which a permanent monopoly can be secured and retained by any consolidation is by the control of the supply of raw material, by the absolute control of basic patent!, or by the control of transportation. Any trust which disregards this history, and is content with simply consolidating all or most of the existing manufacturing plants, is in line for disaster; for supplies of raw mate- rials being still available for outsiders, the first advance in prices will be the signal for the erection of competitive plants. If, on the other hand, the raw materials can be cornered, or processes can be monopolized, or transportation can be controlled, there is no possibility of competition. This experience, though unobserved or dis- regarded a decade ago, is now generally borne in mind. "The bearing of these facts upon the future of the cement industry is obvious enough. If there is any possibility that one large cement corporation can acquire control of most of the available deposits of cement material in the United States, it will be possible to form a real American 'cement trust,' to defy competition, and to raise prices to an unwarranted level. If, on the other hand, it is impossible to form such a corner in cement rock or in cement-making processes, or permanently to control transportation, it will be impossible for any consolidation to raise prices permanently above the normal. "On careful consideration of the matter, it will be seen that only one answer is possible. It is safe to say that more than 20 per cent of the entire area of the United States is underlain by raw materials out of which cement could be made if prices were forced high enough. The Standard Oil Co., the United States Steel Corpora- tion, and the United States Government could not, by combining their financial resources, hope to acquire control of any large fraction of this immense reserve of raw material. "Since the supply of limestone and clay can not be cornered, since no essential parts of the processes of manufacture are covered by exclusive patents, and since transportation companies will seek freight, it is reasonable to believe that no cement combination can succeed in permanently raising prices to unfair rates. Ae already stated, there is nothing in existence at present even remotely approaching a cement trust. The trouble is rather in the other direction. The prosperity of the last few years, with reports of enormous profits earned by existing companies, has led to the building of many new cement plants. A fair proportion of these are either too small, badly located, faulty in design, or badly managed; and with the first general business depression and the commencement of falling prices such plants will necessarily become a danger to the entire industry. The condition at present is therefore marked by excess rather than lack of competition." In other words, the impossibility of "trust" ownership, due to the immense amount and wide distribution of the raw material from which cement is made, predicted by Mr. Eckel in 1907, has been borne out by the development of the industry during the last four years. In conclusion, we respectfully ask the retention of the present rate of duty. ADDENDA. In connection with the duty on Portland cement, your petitioner desires to call your attention to a small but important branch of the industry, that being the manu- facture of white nonstaininc* Portland cement. Cement of tlas character has been manufactured in this country for about six years. Prior to 1908 the production was very small and was confined to three com- panies. Two of these companies have since gone out of business, and one has been added, the production of the country at present being by two companies only. The principal reason for the small number of producing factories in this country is the known high cost of production and the steady importation of cements of foreign SCHEDULE B. 455 PABAGRAPH 86 CEMENT. manufacture at prices which make competition without profit. The production fig- ures prior to 1908 are not available, but from that date are as follows: Barrels. 1908 60,000 1909 67, 749 1910 72, 743 1911 135, 775 Figures for 1912 are not available at this time. This product being white in color and nonstaining, by which is meant that when used as a mortar for setting, pointing, and backing fine-textured stones that they are relieved from the staining which occurs when brought into contact with ordinary Portland cement of commerce, is growing in demand but much more costly to pro- duce on account of the scarcity of proper raw material and the more expensive manu- facturing process. Ordinary gray Portland cement is burned with coal, while in the manufactuie of white Portland cement the burning process must be accomplished by the use of fuel oil, which is a very substantial factor in the cost of white Portland cement. The advance in the price of this commodity being 33 per cent in 1912 over 1911, and contracts made for the year 1913 are at an advance of 55 per cent over the price at which fuel oil was sold in 1911. Prior to the manufacture of white nonstaining Portland cement in the United States the demand in this country was supplied by importation from foreign countries and sold at a price largely in excess of the prices prevailing to-day. The advent of American white nonstaining Portland cement has materially reduced the price of cements of this quality, at prices, however, which have been established by the American manufacturers. The prices at which white nonstaining Portland cements are being sold by American manufacturers have provided only a reasonable margin of profit, and the rapidly increasing cost of production, as shown herewith, will at an early date make the manufacture of these grades of Portland cement unprofitable, and we feel that a protection for the purpose of fostering a growing industry should be accorded through the medium of an ad valorem duty which will be more in proportion to the value of the commodity than exists at present. We fear that unless the protection is accorded American manufacturers will be forced out of business and that the higher prices to American consumers in effect prior to the manufacture of this commodity in the United States will be restored. It is shown in this brief that between 1903 and 1911 the duty on Portland cement has ranged from 24.4 per cent to 20.3 per cent. The average selling price of white nonstaining Portland cement is $2.75 per barrel of 400 pounds at the mill, including the value of the package, the present duty of 8 cents per 100 pounds, or 32 cents per barrel, being equivalent to but 12 per cent ad valorem. Your petitioner therefore respectfully submits that an increase in the duty to 25 per cent ad valorem on white and nonstaining Portland cements, by reason of the facts and figures herewith submitted, can be consistently asked for, and it is respect- fully urged that such be enacted. STATEMENT OF ME. H G. MOULTON, OF ROCKLAND, ME. Mr. MOULTON. I represent the New England Portland Cement Company, which owns a deposit of clay and limestone at Rockland, Me., and hopes to develop in New England a cement industry where none now exists. Tnere is not any cement plant nearer New England than the Hudson River. The nearest plant is on the Hud- son River, the Atlas and the plants of the Lehigh Valley, and that leaves all of Massachusetts and Connecticut, and that portion of the country is either dependent on them or on foreign importations. They are not at present dependent upon foreign importations because statistics show that the trade movement is the other way on cement. We think there is an opportunity to manufacture about a million barrels of cement right in Aew England. Furthermore, at Rockland 456 TABIFP HEABINGS. PARAGRAPH 86 CEMENT. we would have the only cement plant on the Atlantic seaboard, and it would be in a position to ship by water all the way down the coast, through the Panama Canal, and compete on the Pacific coast and in South America. We are willing to meet any kind of fair and square competition. We expect to go after the business, but we will nave to get lower prices than prevail at present to get the business, because we will have to meet the established companies. We do not think that we should in the future have to meet the dumping of surplus stocks from Germany. At the present time conditions are very active abroad and very prosperous. People are fully employed and cement prices are high and there is a big demand, so that we would not meet com- petition there at the present time. Mr. KITCHIN. The statistics show that we are doing the dumping on the other countries. Mr. MOULTON. Yes; because of conditions that now exist and be- cause of high prices abroad. But, by the way, we are not dumping; we are simply exporting legitimately wherever we can export on an even freight rate basis. Where the freight rate was the same, we would probably export to Cuba, perhaps, and to parts of South America. But suppose there should come a depression, a sudden depression in Europe, on account of war or anything that might spring up. Suppose a depression of that kind would come, which would cur- tail by half or by a quarter, the European consumption or demand. Then Germany and Belgium and England could afford to let go of a good deal of cement at a very much less price than prevails now. Furthermore, the freight rates from Europe to the United States are at the highest level in my knowledge. You all know of the recent phenomenal increase in freight rates, due to the immense growth of traffic and of commerce. What would happen to this freight rate should the European depression spring up, or a depression of com- merce ? It would cut the freight rate down so low that a duty of 30 cents a barrel, which is what the present duty amounts to, would just about protect our manufacturing cost. It seems to me that that argument alone justifies the maintenance of the duty, if the New England Portland Cement Co. has a valid right to go into existence. In other words, I think if the New England Portland Cement Co. has a valid right to go into existence in New England; if it serves the public interest and it is to the best interests of this country that the company should go in there, then we are justified in having just such a dutv as might prevent wrongful and hurtful competition in times of depression abroad. An investor coming in to establish a cement plant in a new district can not look to present conditions alone; IK; must look ahead and see what might happen tc his invest- ment a few years hence. I think the establishment of that cement plant in New England will be serving a very laudable public aim. Mr. KITCHIN. Your company is going to be a company that is going to fight what is known as the Portland Cement Trust? Mr. MOULTOX. There is no Portland cement trust, as shown by the result of my investigations. Mr. KITCHIN. There has always been considered one. If there is a trust, you people are going to be right in wnth them. SCHEDULE B. 457 PARAGRAPH 86 CEMENT. Mr. MOULTON. If there is any trust we can fight them tooth and toenail. We stand on our own feet and go into that district inde- pendently Mr. KITCHIN (interposing). You had better be prepared to Tight those Portland cement fellows in the United States, because they are fighting. Mr. MOULTON. We have considered that, and we have every opportunity to fight them. We have certain districts that we can legitimately serve and can be in a position, as I say, to fight any competition that might exist in the United States. The CHAIRMAN. Have you already invested your money ? Mr. MOULTON. To some extent. The CHAIRMAN. I was going to say if you had not you could come down to Alabama and we would pretty nearly give you all the cement rock you want, and you can be protected by the freight rate, and be where they could not come after you. Mr. KITCHIN. I would suggest that you get this foreign competition scare out of your mind and begin to fix your plans to fight the fellows inside of the United States. Mr. MOULTON. That is what we have been doing, and I think it is no more than fair to give us protection against possible future dump- ing. That is all we ask. You know an investor putting his money into a new proposition looks to the future and asks all sorts of ques- tions. I would not be afraid to put my money in and tackle them any- where. I think we have got the skill and the courage and the knowl- edge of it, and I am not afraid to go up against any foreign technical man on such a question. But when you are asking an investor to invest his money, he looks ahead and asks as to the future, as to what conditions might be. And I think you ought to consider his future also. Mr. DIXON. You want the duty left just as it is ? Mr. MOULTON. Yes, sir; that is it. It is not an exorbitant duty. It is only about 20 per cent. Mr. KITCHIN. It looks very much like Mr. Hill, of Connecticut, and Mr. Payne, of New York, have just simply excited your fears unnecessarily about this tariff and the foreigners. The CHAIRMAN. Mr. Moulton, your time is up. Mr. DIXON. Is there anything else you want to present? Mr. MOULTON. I was simply going to state that the putting of the tariff duty down would not, under present conditions, reduce the price of cement. It might do it in some years. We think that the establishment of that plant there, on an average over a term of years, would mean lower prices for the Atlantic seaboard, with the duty as it is now, than a reduction of the duty would give. That is my argument. I thank you. The witness filed the following brief with the committee: THE NEW ENGLAND PORTLAND CEMENT CO. AND THE TARIFF. The New England Portland Cement Co. owns deposits of limestone and clay at Rockland, Knox County, Me., and is developing these deposits with the intention of erecting at Rocklaud a plant for the manufacture of Portland cement. In the beginning the New England Portland Cement Co. hopes to supply cement to the 458 TARIFF HEARINGS. PARAGRAPH 86 CEMENT. New England market, and ultimately, to the entire Atlantic coast and, by way of the Panama Canal, to the Pacific coast of the United State?, Mexico, and South America. Located on the Atlantic seaboard, the New England Portland Cement Co. would feel the full effect of any European competition, present or future. At the present time this competition would not be severe for the reason that the demand for cement, and as a result, its price, ia at a very high level in Germany, Belgium, and England. Also, the freight rates between European and United States points are at record levels, due to the recent boom in the world's commerce and shipping. The New England Portland Cement Co., however, must look to the future as well as to the present in considering the investment of capital at Rockland. Should there come a depression and period of low prices in Germany, Belgium, and England, European manufacturers of cement would be very glad to sell a part of their product for export at no more than the actual labor, material, and repair costs of production and thus keep intact their organizations. Under such conditions the mills of Germany and Belgium (in which labor receives only half the wages which the New England Port- land Cement Co. must pay) would no doubt feel justified in selling their surplus product at 40 cents or even at 30 cents per barrel. At the same time, under the con- ditions which would exist in the shipping trade, freight rates on Portland cement to the United States would decline from the present figures of 30 cents per barrel to 15 cents or less per barrel, as it is a well-known fact that ships going to the United States for cotton and foodstuffs would be very glad to handle so bulky a product as Portland cement on the outbound voyage at a figure little above the actual cost of handling rather than go in ballast. The New England Portland Cement Co. respect- fully submits to your honorable committee that under such conditions a duty of 30 cents per barrel (8 cents per 100 pounds) would do no more than protect its actual operating and depreciation costs, allowing nothing for interest on the investment. On page 220 of the Daily Consular and Trade Report of January 13, 1913, Vice Con- sul General Poole, of Berlin, gives detailed statistics of the German cement industry. In these it is shown that during 1911 the average yearly wage of cement workers in Germany was $280 per year and that the average value of the cement produced was 85.3 cents per barrel. A comparison of these figures with corresponding statistics for the United States shows that in 1909 the average wage of cement workers in this coun- try was $576 (census data) and that in 1911, according to the records of the United States Geological Survey, the average mill price of Portland cement was 84.4 cents per barrel. It is plain from this that the demand for cement in Germany was so great that the operations of the mills was very profitable and that higher prices were obtained than those prevailing in the United States in spite of the fact that labor costs are 100 per cent higher in the latter country. In these figures is found the explanation for the large exports of cement from the United States and the small imports into this country from abroad . The figures also show clearly that under different conditions in Germany the relative position of the two countries in the cement trade would undergo a decided change, for the labor costs are twice as great here. The honorable chairman of your committee on January 10, 1913, stated that your committee has to legislate on facts and conditions as they are to-day and that the tariff bill can not be written for what is going to happen. As investors in the industry we can not nrglect the future probabilities for the reason that the value of our invest- ment in future years will be determined by the conditions prevailing in those years. But even if consideration is given only to present conditions, what is there in them to require a reduction in the present tariff on cement? If cement now sells in the United States at lower prices than those quoted abroad, and if we are exporting to foreign countries in the face of German competition, then a reduction in the tariff rate would have no effect on the present price of cement in the United States, nor would it increase the revenue of the Government through increasing imports. There is nothing in present conditions to warrant a reduction of this tariff rate, either from the standpoint of increasing competition or from the standpoint of increasing revenue. If the com- mittee, in considering this tariff schedule, has in mind the possibility of higher cement prices here and the introduction of a competitive tariff rate, then it must necessarily look to the future, and in that event the future position of the New England Portland Cement Co. should also be given due and just consideration. Present conditions make any reduction in the present tariff on Portland cement ineffective and inconsequential, but the conditions which we may expect in the future do justify its maintenance. While we, located on the seaboard and on the firing line of competition, would have to bear the brunt of German dumping under future probable conditions we would not be the only sufferer. The plants in Alabama, which are now able to supply the cement necessary for the great harbor improvements at Mobile, Pensacola, New Orleans, and SCHEDULE B. 459 PARAGRAPH 86 CEMENT. other Gulf ports would be undersold in these cities by the European plants, which could ship their cement as ballast in vessels returning for cargoes of cotton. The cement market in gulf ports is now kept at reasonable levels by competition between the Ala- bama plants and those of New York and Pennsylvania. Surely the citizens of Alabama would not wish their plants to meet additional competition through unfair dumping of European surplus stocks in periods of depression, nor do we believe that the cement users of the North Atlantic seaboard would prefer the opportunity of obtaining foreign cement at low figures in occasional years to the establishment of a new all-American enterprise on the Atlantic seaboard. Now, if the New England Portland Cement Co. is engaged in a legitimate, proper attempt to develop an hitherto latent resource of the New England States it has the right to ask at the hands of your committee such protection as will prevent undue and unfair dumping of foreign surplus stocks during periods of depression abroad pro- vided that the protection which it asks will not in the long run place an undue burden upon the consuming public. It is our contention that the cement users of the Atlantic seaboard will in the long run in the average year receive their cement at lower prices by virtue of the existence of the New England Portland Cement Co. under the present duty than those that would prevail without the New England Portland Cement Co. and with no duty. The argument on which this statement is based is, first, that the New England Port- land Cement Co. by introducing additional competition in the coastwise cement trade of the United States will keep cement prices at reasonable levels at levels lower than would be made by imports of foreign cement during periods of prosperity in Europe. It would only be during occasional periods of European depression that imports of European cement could lower appreciably the prices of cement on the Atlantic sea- board. Therefore, the total gain to consumers in years of European prosperity would more than offset the total loss to them in years of European depression, and the tariff in this case would actually result in a saving to the cement users of the Atlantic seaboard. In the second place, we have no hesitation in saying that the present duty is a very reasonable one, amounting as it does to only 20 per cent of the average import value of Portland cement during the past calendar vear. It is our understanding that this is less than half of the average rate of duty collected on imports during the past year. As to the effect of a duty of 30 cents per barrel on the ultimate consumer, even in a year when prices in some localities might be reduced to the extent of such a duty, it may be said that the average cost of a cubic yard of mass concrete is about $5 and that this amount of concrete requires only one barrel of cement, on which the tariff protection would be 30 cents, or 6 per cent of the total cost of the concrete. In reen- forced concrete buildings, etc., the cement used accounts for a far smaller percentage of the value of a complete job than in the case of mass concrete, and it is doubtful it the ultimate effect of 30 cents per barrel addition to or deduction from the price of cement would affect the cost of constructing an office building or manufacturing plant as much as one-half of 1 per cent, an amount too small to be reflected in rent. We therefore maintain that we are not asking to have a burden put upon the con- sumers in this country to enable us to establish a plant at Rocklaud, for we believe that the establishment of our plant there will result in a substantial gain to them. We further believe that in establishing at Rockland a plant manufacturing 1-,000,000 barrels of cement per annum, employing 300 American workingmen, consuming annually over 100,000 tons of American coal, requiring the investment of $2,000,000 American capital, and providing new tonnage for shipment in American coastwise vessels, we would be engaged in the highest and most praiseworthy type of industrial development and that our attempt to expand the industry and commerce at New England is entitled to the very kindest treatment at the hands of the Government especially since the treatment that we ask involves in no way a special privilege or over a term of years a taxation of the consumer for our benefit. We feel that we are especially entitled to consideration in this matter for the reason that we are pioneers in the field of cement manufacture in the New England States and also on the Atlantic seaboard, and if we are willing to take the risk of developing these deposits and expending capital in their exploitation we feel that we are entitled to all the protection which can be given us without taxing others for our benefit. There is a further question to be considered in this connection; it is that of dis- crimination. In years of depression, with surplus production and low freight rates, the manufacturers of Europe will be able to place cement at the Atlantic seaboard at prices 30 cents per barrel below those which could be made by the American plants. Under such conditions the Atlantic seaboard would receive its cement at very much lower prices than those that could prevail 300 miles back from the coast line, for the reason that a haul of 300 miles inland will cost on the average more than 30 cents per 460 TARIFF HEAEINGS. PABAGRAFH 86 CEMENT. barrel in freight rates and therefore use up all of the tariff protection. Since the natural protection of freight rates makes prices independent of the tariff, excepting on a very narrow belt along the coast line, a reduction in price in any year through a removal of duties would constitute an actual discrimination by the Government against the entire interior territory and in favor of a very narrow strip along the coast. The question also arises as to whether or not foreign competition is necessary to prevent undue increase in cement prices as a result of combination among American Eroducers. In reply, it may be stated with full confidence that there is not, has not een, and never will be, a cement trust in the United States; that there has not been, and is not now, any agreement among leading producers of cement looking to the restriction of output, restriction of territory, or maintenance of the price of Portland cement; the very conditions of occurrence of the raw materials of Portland cement in the United States makes it impossible that a cement trust should ever develop. In an industry of this sort, control of the output could be obtained only through a control of the raw materials and these occur so widely distributed over the United States that no man or set of men can ever monopolize them. The largest interest now engaged in the manufacture of Portland cement is the Atlas Cement Co., which makes about 15 per cent of the total production of the United States. The next largest is the United States Steel Corporation, which manufactures the so-called Universal Cement from blast furnace slag and limestone and accounts for 10 per cent of the entire production of the country. The remaining 75 per cent of the production come from widely scattered, small, independent companies in all parts of the United States. The very course of cement prices and production in recent years shows that there has been no combination in the industiy. If combination in the industry would have the effect of increasing the total production of cement in the United States from 5,800,000 barrels in 1899 to 78,528,000 barrels in 1911, and at the same time decreasing its price from $1.80 per barrel at the mill in 1899 to 84 cents in 1911, it would seem to be to the interest of the Government to foster combination of that sort. Such is not the result of combination, however; it is the result of free, inde- pendent competition, such as now exists and which has, incidentally, brought the price of Portland Cement to a level so low that its manufacture is profitable only at a few plants which have such locations that freight rates give protection. In conclusion, we respectfully ask, that your honorable committee, when consider- ing the question of tariff rates on Portland cement, take into consideration the aims of the New England Portland Cement Co., and look to the future rather than to the present in considering the possible effect of foreign competition, remembering always that we ask for protection not on a basis of what now exists but on a basis of what may exist under certain probable conditions in Europe; and if you agree with us that the New England Portland Cement Co. in this attempt to develop a latent but hitherto unexploited resource of the New England States, is doing a proper and valuable service to the New England States and to this country as a whole, we respectfully ask that you retain the present reasonable rate of duty of 8 cents per 100 pounds on Portland cement. IMPORTS INTO CANAL ZONE. DEPARTMENT OF COMMERCE AND LABOR, BUREAU OF FOREIGN AND DOMESTIC COMMERCE, Washington, January 25, 191S. Hon. OSCAR W. UNDERWOOD, House of Representatives, Washington, D. C. MY DEAR SIR: In reply to your telephone inquiry to-day I beg to inform you that imports into the Canal Zone are subject to the customs treatment prescribed by the laws of the Republic of Panama, and no distinction whatever is made between imports from the United States and those of other countries. All articles imported by the Isthmian Canal Commission or by the Panama Railroad are admitted free of duty independent of their country of origin. In tliis connection your attention is invited to an article on the tariff system of Panama herewith inclosed (from Foreign Tariff X^tes, No. 7, pp. 195-200). Very truly, youra, A. H. BALDWIN, Chief of Bureau. SCHEDULE B. 461 PABAORAPH 86 CEMENT. MAJ. F. C. BOGGS TKANSMITS DATA ON CEMENT FURNISHED ISTHMIAN CANAL COMMISSION. Mr. RAINEY. The question was raised yesterday as to whether or not the bids made by foreign manufacturers of cement were lower than bids made by domestic manufacturers of cement for the work on the Panama Canal. I have addressed some inquiries to the Isthmian Canal Commission, and I have an answer to-day, which was that 14 bids were submitted by foreign manufacturers or cement, and every one of them without exception was higher than the bids submitted by the Atlas Cement Co., to whom the contract for 4,500,000 barrels was awarded. The foreign bids ranged from $1.25 up to $2.10, and the contract was awarded to the Atlas Cement Co. for $1.19, and the letter of the Isthmian Canal Commission to me contains this statement: "The bids for foreign cement were all higher than the bid of the Atlas Portland Cement Co." I ask permission to insert this letter into the record. The CHAIRMAN. The stenographer will insert the letter in the record. ISTHMIAN CANAL COMMISSION, PURCHASING DEPARTMENT, Washington, D. C., January 10, 1913. Hon. HENRY T. RAINEY, House of Representatives, United States, Washington, D. C. SIR: Referring to your letter of January 9, 1913, asking certain questions relative to cement contracts for the Panama Canal, I would advise as follows: It is understood that your request concerns the large contracts for furnishing cement for the locks on the canal and for other purposes, it being noted that very little cement is used in the Gatum Dam or other dams on the canal. It is also noted that the infor- mation given below does not include a few small orders for cement which were placed before the request for the large amount required. In connection with the larger con- tracts, which include practically 95 per cent of all the cement used, it is noted that two requests for bids have been issued: 1. Under Isthmian Canal Commission Circular 420, which was opened June 1, 1908, and under which contract was awarded for 4,500,000 barrels of cement, with authority for the commission, at its option, to increase or decrease this amount by 15 per cent. The cement called for was to be delivered over a period of approximately three years. 2. Circular 721, which was opened on September 3, 1912, called for 1,000,000 bar- rels of cement and was issued on account of the need for cement in addition to the material called for under Circular 420. The information you ask in your letter will be given below and will be indicated for each circular separately. INFORMATION UNDER CIRCULAR 420. Who let the contract? All bids were forwarded to the authorities on the Isthmus, where they were can- vassed and contract was awarded in accordance with instructions from the chairman and chief engineer, Col. Goethals, in his letter of August 14, 1908. How much were they to furnish and what was the price? The contract was awarded to the Altas Portland Cement Co., of Northampton, Pa., for the total amount called for under the circular, viz, 4,500,000 barrels, there being two alternative prices covered in the contract. (1) For material delivered in wooden barrels, $1.19. (2) For material delivered in double sacks, which, at the rate of four sackfuls of cement to the barrel, was contracted for at $1.60. The contract provided, however, for a rebate of 8J cents for each of the eight sacks returned which made the net price of the cement $0.92. Where do the contractors deliver the cement under the contract? Within reach of ship's tackle, Jersey City or Hoboken. 462 TARIFF HEARINGS. PARAGRAPH 86 CEMENT. Were there any bids from foreign contractors? Yes. What were the bids? Foreign bids were received as indicated in the table attached hereto. If the contract had been awarded to foreign factorieSj would the foreign manufac- turers have been compelled to pay any duty to the United States Government? In other words, was the tariff a factor at all in the bidding between American and foreign firms for cement? As a matter of fact the bids for foreign cement were all higher than the bid of the Atlas Portland Cement Co. However, if there had been any lower bids, the question of duty would have been considered on the following account: "Joint resolution providing for the purchase of material and equipment for use in the construction of the Panama Canal was passed by the Senate and House of Repre- sentatives, and approved on June 25, 1906, as follows: "Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That purchases of material and equipment for use in the con- struction of the Panama Canal shall be restricted to articles of domestic production and manufacture, from the lowest responsible bidder, unless the President shall, in any case, deem the bids or tenders therefor to be extortionate or unreasonable." In order to permit a decision as to what was meant by extortionate or unreasonable prices, inquiry was made of the President by the chairman of the commission under date of September 20, 1906, and the chairman of the commission was advised as follows: ' ' Your letter of the 17th instant has been received, and in reply the President directs me to say that he approves your recommendations as to making awards where bids submitted on material of foreign production are lower than on material of domestic production or manufacture, after adding to the bids received on foreign materials such duty as would have to be paid on same if brought into the United States; and where bids on material manufactured in the United States are the lowest, although some or all of the raw material used in manufacturing them may have been of foreign origin." In accordance with this instruction it would have been necessary to have added to the foreign bid the duty per barrel on cement which was in existence at that time for cement brought into the United States. The resulting figure would then have been compared with the domestic bid. As indicated above, however, all foreign bids were higher than the domestic bid, and therefore the duty did not enter as a factor in the award. If the contract had been awarded to foreign factories where would they have been expected to deliver the cement. The circular asked for alternative propositions permitting delivery at seaports in various countries or at Colon. The table attached indicates that most bidders sub- mitted bids on material delivered at Colon. Why was the contract awarded to the American bidders? Because they were the low bidders on a well-known Portland cement which was per- fectly satisfactory to the authorities on the Isthmus, and whose bid was strictly in accordance with our specifications. INFORMATION UNDER CIRCULAR 721. The details of the awarding under Circular 721 are clearly set forth in the memoran- dum addressed to the Acting Secretary of War under date of September 12, 1912, copy attached hereto. The recommendation contained in this memorandum was approved by the Acting Secretary of War and the contract has been let accordingly. No bids were received from foreign bidders under this circular, although requests to bid were sent out as usual. If there had been any foreign bids under this circular the same rule relative to duty would have applied. Trusting that the above gives you the information that you desire, I am, Very respectfully, F. C. BOGGS, Major, Corps of Engineers, U. S. Army, General Purchasing Officer. SEPTEMBER 12, 1912. Memorandum for the- Acting Secretary of War: Our contract with the Atlas Portland Cement Co., Washington, Order 15517, calls for 4.500,000 barrels of cement, with authoritv to increase or decrease this amount by 15 per cent. When this contract was originally let, it was anticipated that the varia- tion allowed would cover all the cement needed in the construction of the canal. SCHEDULE B. 463 PARAGRAPH 8C CEMENT. However, due to change of plans and new work, it has been found that additional cement will be needed and Isthmian Canal Commission Circular 721 was accordingly issued, asking for bids on an additional million barrels. Under this circular only two bids were received, as follows: Alpha and Lehigh Portland Cement Cos., combined; barrels $1.51; bags, $1.91, with rebate of 10 cente per bag, making the net price in bags $1.11, delivered Jersey City. Santa Cruz Portland Cement Co., no bid in barrels; in bags $1.97, with rebate of 19 cente per bag, making the net price $1.17 delivered San Francisco. The specifications under Circular 721 referred to are practically the same as under the contract with the Atlas Portland Cement Co. and in fact the Atlas Co. are supply- ing materials in addition to their contract which would practically make the carrying out of their work agree with the requirements of Circular 721. The bids on this cement were opened on September 4. Previous to the opening, a letter was submitted by the Atlas Portland Cement Co., dated August 31, in which they state that subject to our acceptance before September 20, they would extend the contract to cover all the additional quantity of cement required to complete the work on the Canal Zone under the terms of the contract now in force. They also stated personally that they did not intend to submit a bid under the new circular. Under the contract with the Atlas Co. we were purchasing cement delivered at Jersey City at $1.19 in barrels and $1.60 in bags, with a rebate of 8$ cents per bag, making the net price of cement in bags 92 cents. Comparing the low bid received under the present circular with the price now in force under the contract with the Atlas Portland Cement Co., it is noted that there would be a saving per barrel of cement delivered in wood of 32 cents, or assuming that all bags were returned, a saving per barrel when delivered in bags of 19 cents. In other words, if the bid in bags were accepted, the total price under the low bid on the circular for 1,000,000 barrels would be $1,110,000, whereas the total cost under the present contract with the Atlas Portland Cement Co. would be $920,000, or a saving of $190,000. Under date of September 5, I cabled to the Isthmus the results of the opening of the Circular, as indicated above, and also advised that I had in hand the proposition from the Atlas Portland Cement Co., as indicated above. In reply to this cable I received cablegram dated September 9 as follows: " Circular 721, referring to your cable of the 5th instant, reject all bids and provide for continuing contract with Atlas Portland Cement Co. to furnish cement to complete all work in connection with the canal." On receipt of this cable, I replied as follows: " Circular 721, referring to your cable of the 9th instant, directing continuation con- tract Atlas Portland Cement Co., presume matter should be referred to Secretary for final authority. Advise." And am now in receipt of the following cablegram: "Referring to your cable of the 10th instant, Circular 721. Get Secretary's ap- proval, if it is necessary." After consulting with the assistant examiner of accounts in this office, I am of the opinion that your approval is necessary for the above transaction. In addition to the above and for your information, I would invite attention to the following telegram received from the Hon. Julius Kahn, Member of Congress. " I understand eastern bidders on cement for canal only 6 cents per barrel lower than Pacific coast bidders. As large quantity of the cement is to be used on Pacific coast side I strongly urge that Pacific coast cement producers be given a fair propor- tion of the contract. This will avoid cost to railroad company for transportation of cement across the Isthmus and will also give encouragement to development of the cement industry on the Pacific coast. Kindly advise me of your action." In reply to this telegram Mr. Kahn was advised that all bids had been referred to the Isthmus. Mr. Kahn apparently cabled Col. Goethals in the same tenor, as under date of September 7 we received the following cable from Col. Goethals, which was immediately wired to Mr. Kahn: "Wire Julius Kahn, San Francisco, Cal., referring to his cable of the 7th instant, Pacific coast highest bidders cement, and award can not be made to them." I am to-day in receipt of the following additional telegram from Mr. Kahn: "Your telegram 10th regarding cement received. Cement manufacturers here are working earnestly to develop industry. The Government ought to help them, for occasion will arise when Government will need plant output. Awarding a portion of the cement requirements to Pacific coast bidders will encourage them and will be no additional expense on cement used on Pacific side of Isthmus. Can a portion of this be awarded to Pacific coast bidders? " 464 TARIFF HEARINGS. P ABA GRAPH 87 LUCE. To which no reply has as yet been made. If approved, the following will he sent him: "Commission has, with approval Secretary of War, rejected all bids under Circular 721 and accepted offer Atlas Portland Cement Co. continue old contract, $1.60 barrel, rebate 8 cents per bag. This offer filed before opening bids, Circular 721." In view of all the above I would therefore request your approval of the recommenda- tion from Col. Goethals to cancel all the bids under Circular 721 and continue with the Atlas Portland Cement Co. at the figures in their old contract, with the result in saving to the Government of approximately 20 per cent. Approved as above: Major, Corps of Engineers, U. S. Army General Purchasing Officer. Acting Secretary of War. Name. Number barrels quoted on. Place delivery. Con- tainer (bags or barrels). Rebate on ship- ment. Net price at point of delivery, per barrel. In bags. In barrels Breitenburger Portland Cement Fabrik, Hamburg, Germany. East Asiatic Co., Copenhagen, Den- mark. Martin Earle (Ltd.), London, England. J. Menrin, Andernach, Germany... Rheinisch - Westfalisches Cement Svndikat, Bremen, Germany. Suddeutsches Cement Export Kontor, Mannheim, Germany. Do. 150,000 500,000 1,000,000 1,500,000 1,000,000 100,000 100,000 216,000 4,500,000 4,500,000 900, 000 gtin.ono 4, 500, 000 (') Colon ...do Barrels. . $1.82 1.70 1.60 ...do ...do ...do ...do... . .do Bags.... Barrels. . $0.40 $1.56 2.00 1.15 1.70 2.08 1.55 2.10 1.76} Antwerp or Rot- terdam. Colon ...do ...do.. . Sussex Portland Cement Co. (Ltd.), England. Weydert & Saur, Strassburg, Ger- many. Do . .do .do .. New York Colon .do. .. . .do. . . The \\ouldham Cement Co. (Ltd.), England. The Wouldham Cement Co. (Ltd.). " Bouwmaterialen " Voorheen M. Luiiten. Portland Cement Works, Antwerp. ...do ...do ...do Amsterdam Antwerp Bags Barrels .16 I. SOJ 1.3O 1.25 .do 1 Uncertain. PARAGRAPH 87. Lime, five cents per one hundred pounds, including weight of barrel or package. See also argument of American Portland cement manufacturers, page 449. LIME. STATEMENT OF HERMAN W. HUKE, ESQ., REPRESENTING THE ROCKLAND & ROCKPORT LIME CO., OF MAINE. The CHAIRMAN. Mr. I hike what paragraph do you desire to speak to? Mr. IlrKE. Paragraph 87, Schedule B. My name is Herman W. ITuke: address, Torrington, Conn. Mi*. Chairman and members of the committee, I am here represent- ing the Rockland & Rockport Lime Co., of Rockland, Knox County, Me., to submit the following memoranda of facts relating to its busi- SCHEDULE B. 465 PARAGRAPH 87 LIME. ness and to the manufacture and sale of its product, and I do this in respectful but earnest protest against the removal of the present duty of 5 cents per hundred pounds of lime. This corporation has an investment of $3,700,000, representing an honest acquisition of property without bonus or watered stock. It does not own or operate all the limekilns and limerock quarries in Knox County, but it does own and operate a large number of them, and consequently manufactures and sells a very considerable propor- tion of all the lime produced in that section of Maine. Its average annual output, based upon the standard unit of 200 pounds of lime to the barrel, is 1,500,000 barrels, and its capacity, if market could be found, is easily 2,500,000 barrels per annum. Its product is used almost entirely for building purposes, and its market is confined practically to the New England States and the city of New York. The cost of labor is the principal single factor in the cost of a barrel of lime. This labor cost to the Rockland & Rockport Lime Co., up to the tune of shipment, is 37 cents on every dollar expended, and by the operation of this corporation there is distributed to the wage earners in a community of about 12,000 people a sum amounting annually to $325,000. Limerock is abundant in the Province of New Brunswick, and the markets in the northern part of the State of Maine are now being supplied with lime from that source. This provincial lime is manu- factured either on or in close proximity to the seaboard, and a removal of the existing duty, coupled with the lower wage prevailing there and more favorable water freights, would enable that lime to secure the New York and New England markets now supplied with lime from Maine and other American States. The lime business generally in the East has been far from profitable in recent years, and this corporation, organized originally in 1900, has earned and paid no dividends on its stock since 1901, and was forced to reorganize in 1911 on a basis by which the shareholders were assessed for $300,000. During a period of eight years, including the year 1912, the aver- age annual net profit has been less than 4 cents per barrel. The shareholders feel that the removal of the duty of 5 cents per hundred pouncls of lime, or a little more than 10 cents per barrel in itself a sum in excess of any profit yet shown will impose a burden that is bound to make failure inevitable and that will ruin the industry without good cause or reason. The CHAIRMAN. That is all. The witness presented the following brief: THE WAYS AND MEANS COMMITTEE OF THE SIXTY-SECOND CONGRESS, Washington, D. C.: The Rockland & Rockport Lime Co., of Rockland, Knox County, Me., submits the following memoranda of facts relating to its business and to the manufacture and sale of its product, and does this in respectful but earnest protest against the removal of the present duty of 5 cents per 100 pounds of lime: Capital invested. This corporation has an investment of $3,700,000, representing an honest acquisition of property without bonus or watered stock. Extent of operations. It does not own or operate all the limekilns and limerock quarries in Knox County, but it does own and operate a large number of them, and 78959 VOL 113 30 466 TARIFF HEARINGS. PARAGRAPH 87 LIME. consequently manufactures and sells a very considerable proportion of all the lime produced in that section of Maine. Its average annual output, based upon the standard unit of 200 pounds of lime to the barrel, is 1,500,000 barrels, and its capacity, if market could be found, is easily 2 ; 500,000 barrels per annum. Products and markets. Its product is used almost entirely for building purposes, and its market is confined practically to the New England States and the city of New York. Labor. The cost of labor is the principal single factor in the cost of a barrel of lime. This labor cost to the Rockland & Rockport Lime Co., up to the time of shipment, is 37$ cents on every dollar expended, and by the operation of this corporation there ia distributed to the wage earners in a community of about 12,000 people a sum amounting to annually $325,000. Conditions in New Brunswick. Limerock is abundant in the Province of New Brunswick and the markets in the northern part of the State of Maine are now being supplied with lime from that source. This provincial lime is manufactured either on or in close proximity to the seaboard, and a removal of the existing duty, coupled with the lower wage prevailing there and more favorable water freights, would enable that lime to secure the New York and New England markets now supplied with lime from Maine and other American States. Conditions in New England. The lime business generally in the East has been far from profitable in recent years, and this corporation, organized originally in 1900, has earned and paid no dividends on its stock since 1901, and was forced to reorgan- ize in 1911 on a basis by which the shareholders were assessed for $300,000. During a period of eight years, including the year 1912, the average annual net profit has been less than 4 cents per barrel. Conclusion. The shareholders feel that the removal of the duty of 5 cents per 100 pounds of lime, or a little more than 10 cents per barrel in itself a sum in excess of any profit yet shown will impose a burden that is bound to make failure inevita- ble and that will ruin the industry without good cause or reason. ROCKLAND & ROCKPORT LIME Co., By H. A. BUFFUM, Assistant Treasurer. ROCKLAND, ME., January 6, 1913. A SUPPLEMENTARY BRIEF CONCERNING LJME. FILED BY THE ROCKLAND & ROCK- PORT LIME Co., OF ROCKLAND, ME., FEBRUARY, 1913. First. The American tariff on lime is 5 cents per 100 pounds, including weight of barrel or package. (See par. 87, tariff act of 1909.) Second. The Canadian tariff on lime is 12$ cents per 100 pounds, including weight of barrel, bag, or cask. (See Canadian customs tariff 1907, item 290.) Third. The American tariff is not prohibitive. Example: (A) Bangor, Me., is 55 miles from Rockland, Me., the center of the lime-manufac- turing industry of the North Atlantic States. (B) Bangor, Me., is 205 miles from St. John, New Brunswick, the center of the lime-manufacturing industry on the Canadian coast. (C) Freight by rail from St. John to Bangor, 205 milee, per barrel, 20 cents; duty (including weight of barrel), per barrel, 11 cents; total freight and duty, St. John to Bangor, 31 cents. (D) Freight by water, Rockland to Bangor, 60 miles, per barrel (no duty), 6 cents; differential in favor of Rockland, per barrel, 25 cente. (E) Notwithstanding this differential, St. John is an active competitor for and does business in Bangor. Houlton. and other parts of Maine. In the Bangor district over 800,000 pounds (4.000 barrels) were imported last year, besides the importations in other ports of entry in Aroostook County, viz, Fort Fan-field, Caribou, and Vance- boro. In addition to the imports in the Bangor and other districts in northern Maine, there were also imported last year through the Portland customs district over 8,000,000 pounds MO, 000 barrels). Fourth. The high rate of the Canadian tariff absolutely prevents the American lime manufacturers getting trade in the maritime Provinces, and gives the St. John manu- facturers a monopoly of the trade. Fifth. With any change in duty (American tariff is now 60 per cent lower than the Canadian tariff, being 5 cents American as against 12| cents Canadian per 100 pounds), SCHEDULE B. 467 PARAGRAPH 88 -GYPSUM. the Canadian lime manufacturers will extend their trade zone and gain absolute con- trol of the Atlantic-coast trade, as well aa of the trade of the States bordering on the Canadian line, and also of some of the Middle States a long distance therefrom. Sixth. The Canadian lime manufacturers in the maritime Provinces, being in a for- eign country, have a serious advantage over their American competitors in the matter of freight by water. They can ship their product in foreign bottoms to all the principal consuming points on the Atlantic coast, whereas the American manufacturers must use (and rightly so) American bottoms for this coastwise trade. Seventh. In view of the facts herein stated, your petitioner, the Rockland & Rock- port Lime Co., of Rockland, Me., a lime-manufacturing company organized in 1901 with $3,700,000 paid in, reorganized in 1911 and $300,000 more cash paid in, upon which no dividend has been paid since 1901 except one of 3$ per cent on $587,000 of preferred stock, a company giving employment to over 500 people, having a pay roll in excess of $350,000 per year, distributed among a community of 12,000 people, earnestly protest against the lowering of the present duty, for if it is lowered it will without doubt cause our company to suspend business, thus entailing a complete loss not only to our stockholders, but also to uie local community, by throwing out of work a large number of loyal workmen who are dependent upon us for livelihood for them- selves and their families. Ninth. We conclude with the following: (A) No single individual company or group of companies control the American lime trade. Lime is manufactured in all parts of the United States. The sharpest competition exists in this commodity, so much so that lime is now sold and has been sold for a number of years at prices too low to allow a fair margin for profit, and there have been large losses to persons and companies engaged in this line of business. (B) The Canadian tariff, 12$ cents for 100 pounds, is protective, and, so far as the American Atlantic coast lime manufacturers are concerned, it is an absolutely pro- hibitive tariff. (C) The American duty of 5 cents per 100 pounds (only 40 per cent of the Canadian 'duty) is not prohibitive. It is a tariff for revenue only. Respectfully submitted. ROCKLAND & ROCKPORT LIME Co., By HENRY S. LYONS. PARAGRAPH 88. Plaster rock or gypsnm, crude, thirty cents per ton; if ground or calcined, one dollar and seventy-five cents per ton; pearl hardening for paper makers', use, twenty per centum ad valorem ; Keene's cement, or other cement of which gypsum is the component material of chief value, if valued at ten dollars per ton or less, three dollars and fifty cents per ton; if valued above ten dollars and not above fifteen dollars per ton, five dollars per ton ; if valued above fifteen dollars and not above thirty dollars per ton, ten dollars per ton; if valued above thirty dollars per ton, fourteen dollars per ton. For sulphate of lime, see F. A. Reichard, page 309. GYPSUM. STATEMENT OF MR. FRANK A. WILDER, PRESIDENT OF THE SOUTHERN GYPSUM CO., NORTH HOLSTON, VA. The CHAIRMAN. Mr. Wilder, what paragraph do you wish to refer to ? Mr. WILDER. Paragraph 88, section A, in connection with the duty on crude gypsum, of 30 cents per ton. I wish to speak briefly ana merely to correct certain erroneous impressions that may have been made by the first speaker before this committee yesterday morning. This speaker said, if I understood him correctly, that importations of crude gypsum were decreasing; that the imported gypsum was used for purposes quite different from 468 TARIFF HEARINGS. PABAGBAPH 88 GYPSTJH. those to which domestic gypsum is applied; and that imported gyp- sum does not come in competition with the domestic gypsum; and on these grounds he asks a reduction of tariff on crude gypsum from 30 to 20 cents, the duty before the act of 1909 having been 50 cents. As a matter of fact, figures given me yesterday by the Bureau of Statistics show that the importations of crude gypsum are steadily increasing. Standing at about 190,000 tons in 1901, they arose to 288,781 in 1909, 340,359 in 1910, 342,517 in 1911, 426,500 in 1912. A reduction of the duty of 10 cents a ton might increase imports 100,000 tons and reduce domestic production by the same amount, but if this should be done it would be at the expense of the revenue derived from gypsum importations and to the injury of certain of the younger gypsum companies, which felt very severely the 20-cent cut in the duty on crude gypsum in 1909. Practically all of the imported gypsum is used in the manufacture of wall plaster of just the same nature that the mills using domestic gypsum make. The imported article is quarried easily directly on the coast in Nova Scotia, is brought to the coast cities by cheap barge freight where it is milled, and then again transported by low water rates for distribution all along the Atlantic coast., for use in the coast cities and for shipment inland. By way of illustration, the freight rate on wall plaster from New York and Virginia producing points to the city of Washington is $2.60 per ton, and as a consequence plaster made from domestic gypsum competes with great difficulty here against plaster made from Nova Scotia gypsum, milled at Chester, Pa., and New York City. For 500 miles inland mills using domestic gypsum feel the competi- tion severely. Farther inland, on account of increasing freight rates, this competition is not felt. The domestic gypsum mines and mills within this radius of com- petition are located in central and western New York and in south- western Virginia. Six or seven of the 50 or more mills in the United States are within this zone of competition. The Southern Gypsum Co. (Inc.), built its mill in southwest Vir- ginia five years ago, counting on the market in the Southeastern States, as those markets stood under a 50-cent tariff. It felt severely the 20-cent reduction in 1909. During the past four years the pro- duction of gypsum in Virginia has grown from practically nothing to 90,000 tons in 1912, 55,000 tons of which were produced by the Southern Gypsum Co. and the balance by a neighboring mill. This tonnage is not sufficient to permit of economic operation and we have been striving for a yearly output of 80,000 tons. The effect of a slight change in competitive conditions will be realized when I state that the business is handled on the narrow margin of 30 to 40 cents a ton, and our markets are crowded back from the coast at every slight change in this competitive condition. I believe that you will agree with me that it was proper and de- sirable that the statement made yesterday to the effect that domestic production would not be affected by further reduction in the tariff on crude gypsum should not go unchallenged. SCHEDULE B. 469 PARAGRAPH 88 GYPSUM. The cut of 40 per cent made by the act of 1909 seemed to be about our full share in the matter of tariff reduction for some time to come at least. Mr. HULL. From what section do you get your chief competition ? Mr. WELDER. Competition from American producers is strong and active. Take the State of Alabama, as an illustration. Mills in cen- tral Oklahoma and Texas and central Kansas ship into Alabama on a freight rate about as good as ours. In the city of Atlanta, we meet the competition of this Nova Scotia material milled in New York and coming down by barge, landed at Brunswick, and shipped inland. We meet also western competition there. Mr. HULL. What does it cost per ton to mine gypsum in Nova Scotia ? Mr. WILDER. They do not mine. The mineral lies on the surface, and our material is all underground, and we have mining difficulties in connection with our ventilation, and so on. Their cost of putting the material on the barge is small. Their cost of handling and bagg- ing down and rehandling twice putting the crude material into the mill at New York and Chester and again loading it onto the barges is something less than our freight rate into Washington, D. C., I would say, judging by the competition that we meet. That rate is $2.60. The CHAIRMAN. Are there any further questions ? [After a pause.] That is all, Mr. Wilder. Mr. WILDER. I thank you. SOUTHERN GYPSUM Co. (INC.), North Holston, Smyth County, Va., January 2, 191t. Hon. CAETER GLASS, Washington, D. C. DEAR SIR: Within the last five years the gypsum industry in Virginia has been making rather notable growth, so that for 1912 the total output of gypsum and gypsum products from the two mills in Virginia will be close to 100,000 tons. The industry in Virginia can hardly be said to be on a paying basis yet, though pros- pects for the future are encouraging if no unexpected factors are introduced into the trade problem. The mill of Southern Gypsum Co. was erected five years ago and last yar the mill of the United States Gypsum Co. was completed. These mills were constructed on the supposition that trade conditions might be counted on as reasonably permanent and that no new factors in the way of competi- tion were probable. The Payne-Aldrich tariff bill, however, made a considerable reduction in the duty of 50 cents a ton which had previously existed on gypsum, and in consequence nar- rowed the market for the Virginia mills. Large quantities of Nova Scotia gypsum are imported into the United States, same being milled at Norfolk for land plaster and in New York City for wall plaster, and by cheap barge freight this material is scattered all down the coast and snipped inland. _The production conditions in Nova Scotia are exceedingly favorable while those in Virginia are difficult. In Nova Scotia the mineral is quarried on the surface easily, while in Virginia it is mined under severe difficulties in the way of water and impuri- ties that must be sorted out. Cheap barge transportation moves the Nova Scotia material as against heavier rail- road freights on the part of the Virginia mills. A further reduction in the tariff will be felt severely by the Virginia mills, pushing the farther inland their market and so restricting it as to render doubtful the profitable operation of the mills, unless indeed prices are arbitrarily raised in the restricted ter- ritory near the mills that now receive finished gypsum products at moderate prices. 470 TARIFF HEARINGS. PARAGRAPH 88 GYPSTTM. Our competitors, especially those located in New York City, will doubtless endeavor to make it appear that no American industry will be especially affected by further tariff reduction, and this letter is written so that you may be informed of the facts. The writer believes in the principle of tariff reduction and the general tariff policy of the Democratic Party and at the same time thinks it proper to point out that within two years there has been a considerable reduction in the gypsum tariff, and that if ever the argument for infant industry has existed in connection with the tariff the argument applies at every point right now to the Virginia gypsum. The question of tariff on gypsum will be considered by the proper committee in Washington on January 7 or 8, 1913. Your assistance in seeing to it that the fact that Virginia as a large producer and has important interests at stake is not over- looked will be very greatly appreciated. Very truly, yours, SOUTHERN GYPSUM Co. (!NC.), FRANK A. WILDER, President. STATEMENT OF MONTAGUE LESSLER, ESQ., OF NEW YORK CITY. Mr. LESSLER. Gentlemen of the committee, I represent practically the same men, importers and manufacturers, that I did three years ago at the hearing. I represent the men on the seaboard who import plaster rock and crude gypsum from the two Provinces in Canada, and manufacture it into the material which, as brought out hi the last hearing, is around us here. In the little memoranda which I will file, and which I would like to have printed with these few remarks, I have not attempted to elabo- rate the argument which was very thoroughly gone into at the hearing in 1909. The reasons which obtained then for placing this article on the free list obtain to-day. The comment that I would make to the committee is this: That it has been demonstrated the reduction to 30 cents per ton instead of the 50-cent rate has in no way interfered with the domestic produc- tion at all. The CHAIRMAN. What is the number of the paragraph to which you refer ? Mr. LESSLER. Paragraph 88. The domestic production has gone up by leaps and bounds, and the last figure that I obtained was in 1910. I notice, however, in your tariff handbook that the domestic production in 1910 was about $12,000,000. Curiously enough the importations seem to have fallen off a bit. The point I care to elaborate is simply this, that it is as true to-day as it was then that the imported material is a local proposition only and comes in contact with the domestic production not at all. -The farmers' free list as enacted in the bill passed by this House and the Canadian reciprocity act provided for gypsum. What I supposed would interest the committee a bit was the ques- tion of comparative price under the reduction to 30 cents. It has remained pretty steady both in the domestic and imported articles; that is, the manufactured articles made of the domestic and imported rock. This is notwithstanding the fact that all the material, the coal, the machinery, and the labor involved has to some extent, in fact, to a great extent, grown up very much on the seaboard. A question asked me at the last hearing was on the subject of the income, as to this being a revenue producer to the Government. As the committee ran see that 50 cents a ton on the importation of 1907 SCHEDULE B. 471 PARAGRAPH 88 OYPSTJM. brought a revenue to the Government of about $195,000, which, of course, under the reduced 30 cents per ton, has gone down in the neighborhood of from $102,000 to $111,000 a year. It is to be brought before the committee, however, that very little of this remains to the Government, for the reason that the costs of inspection are of course very large and very great. There is this to be added, that we as importers have helped the Government very mightily, and have saved the Government many thousand of dollars of expenses by our system of weighing and looking after these things for the inspectors put there by the Government. I feel in the very short time that the committee wants to hear me, and in view of the elaborate argument made three years ago, which is so handy to the committee, that there is very little to say except to point out to you that with that argument as a basis, with the other side, the opposition, fully represented (and I believe there is no op- position to-day), the committee reduced that to 20 cents, and in conference it was put at 30. I would respectfully ask that it be placed on the free list. The CHAIRMAN. Are there any questions ? That is all, Mr. Lessler. MEMORANDUM TO THE COMMITTEE ON WAYS AND MEANS OP THE HOUSE OP REP- RESENTATIVES, REQUESTING THAT PLASTER ROCK OR GYPSUM, CRUDE, BE PLACED ON THE FREE LIST. A duty of 30 cents per ton is levied on all importations of plaster rock or gypsum, crude, in section 88 of the Payne-Aldrich Tariff Act. It is respectfully urged that the time has come to place this article on the free list. A very full hearing was had on November 24, 1908, before the Ways and Means Committee, at which it was urged to reduce this produce from 50 cents per ton, the rate fixed in section 91 of the tariff act of 1897. The argument, the examinations, and the letters concerning gypsum will be found in volume 1 of Tariff Hearings, pages 634 to 692. Based on this hearing and these arguments, the Committee on Ways and Means made the rate 20 cents per ton, which, in conference, was finally made 30 cents per ton and enacted into law as section 88. The reasons advanced at that time by those in favor of the reduction obtain to-day, and the arguments against it are no stronger than those urged and advanced by the opposition. The native mining of gypsum has not suffered because of the reduction of the duty, but has shown a gradual and healthy increase, both in the tonnage of the product and its value. In 1909 the latest figures available of the domestic ton were those of 1907. The following is a table of the number of short tons mined and the value as given in the article "Gypsum" in Mineral Productions of the United States for the Year 1911: Year. Tons. Value. 1906... 1,540,585 $3,837,975 1907 1,751,748 4,942,264 1908 1,721,829 4,075,824 1909 2,252,785 5,906,738 1910 2,379,057 6,523,029 It may also be noted that the census report of the Bureau of Manufactures on the gypsum industry shows an increase of 3 mills in the United States calcining the crude product. "At the time of the hearings there were 79 mills and there are now 82. It would seem, therefore, that the domestic production has not been affected by the lowering of the rate per ton (20 cents) either in quantity or value, and that there is a healthy natural growth to the domestic industry. As a matter of fact, the importa- 472 TARIFF HEARINGS. PARAGRAPH 88 GYPSTTM. tion of the crude gypsum is so small in proportion to the domestic product mined that its competition is really negligible. It might also be added that the use of the im- ported crude gypsum seems really a local proposition, with the railway freight rates considered and the differential against the seaboard manufacturers. Just one word further as to the domestic product calcined. The price per ton to the consumer has kept pretty firm and nearly stable throughout the years intervening since 1909. There has been no increase in the number of plants calcining the crude gypsum imported from Nova Scotia, Cape Britton, and New Brunswick. The crude gypsum is brought to the Atlantic seaboard to ports between the extreme points of Portland, Me., and Norfolk, Va. The following table shows the tons imported and their value, with the amounts ind duties paid from 1906 to date. These figures are taken from the Government publication, Imported Merchandise Entered for Consumption in the United States and Duties Collected Thereon. (See also, Imports and duties 1894 to 1907.) Year. Tons. Value. Duties. 1906 . . 383,712 $446, 769 $191,856 1907 390,065 457,047 195, 032 1908 . 300,158 314,845 150 078 1909 288,740 341, 309 144, 370 1910: Tariff act 1897 52,984 63,435 26,492 Tariff act 1909 . ' 287,355 344,470 86 206 1911 342, 528 408,151 102,758 1912 363,658 426,394 109 197 On the amount imported during the year 1912, 264,382 tons arrived at the port of New York, valued at $303,538, and paying a duty of $79,314. From July 1, 1912, to November 30, 1912, there arrived at the port of New York 148,500 tons, valued at $170,560, and paying a duty of $44,550. It would seem from these figures that there has not been a gain in the tonnage imported, while the domestic producer has gained largely. It might be added, and it is to be hoped, that this tonnage may become larger, as it involves the use of American ships, barges, and lighters and the employment of more men to carry the product. At the hearing in 1908 it was urged that in addition to an absence of reason based on the protection theory for the placing of this duty, that it was not even a real revenue measure. At that time it was figured that the gross return to the Government was about $195,000 a year based on an importation in 1907 of 390,000 tons of crude gypsum. It must be remembered that the Government had to expend an appreciable part of this money to inspect and oversee the tonnage. Were it not for the fact that the importers aid the Government by the use of patented machinery, hoists, lefts, etc., in the weighing and inspection, there would be nothing left for the Government from this duty. Based on the 1912 figure with the importation of 363,658 tons of unground gypsum, the gross revenue to the Government was $109,197; hardly a revenue producer of any importance to the Government, when the cost of inspecting and weighing is taken therefrom. The 1S97 tariff placed a duty of 50 cents per ton on crude gypsum (sec. 91), which was. as ha.s been slated, reduced to 30 cents per ton in the 1909 oill. (See sec. 88.) The act of July 2(i, 191 1, chapter 3 (Canadian reciprocity act), placed plaster rock or gypsum, crude, on the free list, probably on the theory of a general reduction on the raw material. The figures and estimates as to production, coste in Canada and the United States of the mined product, as well as those concerning labor, freight rates (both water and railway! have maintained about the same parity as 1909, when adduced before this committee at the hearing on November 28 of that year. It should be remembered, and it is true now as it was then, that your petitioners are situated in a large community, that their plants represent large investments, that they employ some thousands of laborers, skilled and unskilled, whose wages have advanced; that their plants are permanent, stable, solidly built mills, that each pays a Inree amount of taxes, to sav nothing of the restriction? imposed by the authorities regulating the safety of the buildings and the health of the workers. All this means SCHEDULE B. 473 PARAGRAPH 88 GYPSUM. large gums of money, and the industry does need a lowering or abolition of the duty on the crude rock to maintain ita stability in the face of a larger and larger domestic output, which has the advantage of cheaper initial coat, very much cheaper running expense, a decided differential in its favor in railway freight rates, and endless and bottomless pits with undeveloped areas as a source of supply of their raw material. It is respectfully submitted that plaster rock or gypsum, crude, be placed on the free list. Dated, New York, January 8, 1913. J. B. KING & Co., 17 State Street, New York City. KEYSTONE PLASTER Co., Chester, Pa. HIGGINSON MANUFACTURING Co., Newburgh, N. Y. ROCK PLASTER MANUFACTURING Co., New York City. CONNECTICUT ADAMANT Co., New Haven, Conn. WOTHERSPOON PLASTER MILLS (!NC.), Long Island City, N. Y. (Counsel, Montague Lessler, 31 Nassau Street, Borough of Manhattan, New York City.) BRIEF OF THE NEWARK LIME & CEMENT MANUFACTURING CO., NEWARK, N. J. NEW YORK, January 6, 19 IS. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: In considering the rearrangement of the tariff, I urgently recommend that crude gypsum be placed upon the free list. This is the raw material used in the extensive manufacture of plaster of Paris along the Atlantic coast of the United States. For many years until the present tariff was instituted it was on the free list. The duty brings the Government very little revenue, and in addition to the direct handi- cap which it imposes upon the manufacturing business here, it entails other dis- astrous consequences upon plaster manufacturing concerns on the eastern seaboard. I do not believe in any instance the Government weigher actually weighs the cargo as discharged. Physical conditions are such to make necessary that the material should be weighed on the scales of the consignee, by his employees; the customs inspector only oversees the procedure in a general way. As a consequence, very unsatisfactory disputes as to quantities and settlements are continually arising. In 1908, before the present tariff law was enacted, there were nine plaster manu- facturing concerns in operation along the coast using Canadian rock four in New York, one in New Jersey, one in Maine, one in Pennsylvania, one in Connecticut, and one in Boston. Now the number has been reduced to five, there being three in operation in New York, one in New Jersey, and one in Connecticut. This is due largely to the competition of plaster from the interior of the United States, which is, even at the seaboard, driving out of use that made from Canadian gypsum. It is only for the higher grades of product that the plaster made from Canadian rock is used throughout the interior of the country; and it is very unfair that this tariff discrimination should be made between the citizens of the same country. There is no foreign plaster imported, and the only effect of the duty is to give some United States manufacturers, who already have great natural advantages, an unfair advantage over their competitors. An indirect effect of the duty is also to impose an unnecessary tax upon the users of plaster of paris, who necessarily require this grade of goods. In conformity with the effect of duties on raw materials, the final cost to the consumer is reflected in a much higher price than that indicated by the tariff exaction itself. The argument! for aiid against this duty were set forth in the tariff hearings before the then Committee of Ways and Means, under date of November 24, 1908, copy of which I inclose herewith. I would especially call your attention in this pamphlet to the information regarding the gypsum combination of interior manufacturers. The evidence clearly showi artificial control of prices and a desire to control competition through tariff impositions. 474 TARIFF HEARINGS. PARAGRAPH 89 PUMICE STONE. Trusting that gypsum will be placed upon the free list, and offering no objection to a corresponding reduction in the duty on manufactured plaster. I remain, youre, respectfully, CALVIN TOMKINS, President Newark Plaster Co. (Successors to Newark Lime & Cement Manufacturing Co.) PARAGRAPH 89. Pumice stone, wholly or partially manufactured, three-eighths of one cent per pound; unmanufactured, valued at fifteen dollars or less per ton, thirty per centum, ad valorem; valued at more than fifteen dollars per ton, one-fourth of one cent per pound ; manufactures of pumice stone or of which pumice stone is the component material of chief value not specially provided for in this sec- tion, thirty-five per centum ad valorem. PUMICE STONE. STATEMENT OF ELMER R. MURPHEY, PRESIDENT OF JAMES H. RHODES & CO., CHICAGO, ILL., AND NEW YORK, N. Y. Mr. MURPHEY. My name is Elmer R. Murphey, president of James H. Rhodes & Co., of Chicago, 111., and New York. The CHAIRMAN. What paragraph do you appear in reference to? Mr. MURPHEY. Paragraph 87, with reference to pumice stone. Mr. LOXGWORTH. What is your business ? Mr. MURPHEY. We are in the pumice-stone business. Mr. LONG WORTH. Are you an importer? Mr. MURPHEY. We are grinders. We import our grinding rock and grind it here. The CHAIRMAN. The paragraph you are interested in is 89. Mr. MURPHEY. That is my mistake. Pumice stone unmanufactured (pezzame), valued at $15 per ton or less, at 30 per cent ad valorem, per ton of 2,240 pounds, which, at 32 shillings per ton f. o. b. point of shipment, which is Oanneto, Italy, is equivalent to a duty of $2.35 per ton. Pumice stone wholly or partially manufactured (or powdered pumice), three-eighths cent per pound, or $8.40 per ton. Net protection: Is the difference between $8.40 on the manufactured, which we use for grinding purposes, and the manufactured or powdered, or $6.05 per ton. Lump pumice, one-fourth cent per pound: But under this wording the customs authorities have been assessing three-eighths cent per pound on any lump pumice which had the corners filed off, claiming it was partially manufactured. Manufactures of pumice stone, or of which pumice stone is the component mate- rial of chief value, not especially provided for, 35 per cent ad valorem. TARIFF DESIRED. Pumice, unmanufactured, valued at $15 per ton or less, should be admitted free, aa it is our crude material for grinding purposes. Pumice stone wholly or partially manufactured should remain at three-eighths cent per pound. Lump pumice stone should be admitted free. It should also include lumps which have been filed or rolled which is done for convenience in packing and to save break- age in transit and for no other purpose. Manufactures of pumice stone or of which pumice stone is the component material of chief value not specially jarovided for, 35 per cent ad valorem. Reasons for free items. Is one of this product is produced in the United States. Reasons for duty of three-eighths of a cent on manufactured. -Pumice stone manufac- tured in Italy is being sold in bags f. o. b. docks New York at $18.50 per ton of 2,000 pounds (that is, after the United States duty has been paid). Thus, the United States custom records demonstrate that the Italians can grind, pack, and deliver at the dock at New York ground pumice stone at $11 per ton. We are willing to produce invoices, quotations, and refer to importations at this figure. SCHEDULE B. 475 PARAGRAPH 89 PUMICE STONE. American cost of production of powdered Italian pumice stone. In 1908 was $23 per ton, but since that time is higher because of the grinding rock costing more in Italy, ocean freight rate being 75 cents per ton higher (with a further advance scheduled for 1913), and the duty being over $1 per ton more, so that our present cost of producing is over $25.51 per ton. Conclusion as to the facts. If the unmanufactured pumice, which is our grinding rock, came in free it would reduce our cost of production $2.35, which would give us a net cost of $21.15 per ton, as compared to the cost of pumice ground in Italy of $18.50 per ton f. o. b. New York, which we are obliged to compete with. The present ocean freight rate from the Lipari Islands to New York on Italian ground pumice stone is 14 shillings per ton or $3.45 in American money per long ton. On the unmanufactured or pumice in small lumps which we grind the rate is 18 shillings 6 pence or $4.56 per ton, owing to its greater bulk, thus putting us to an additional disad- vantage of $1.11 per ton in ocean freight alone. Wages in Italy. With which we compete in selling American ground powdered pumice. The women and girls who work in the pumice get 20 cents per day and the men get from 60 cents to $1 per day of 11 net hours in the summer and 10 hours in the winter. This is from personal knowledge of the writer gathered during his several visits to Italy and information gathered by our buyer in Italy, and is supported by the statistics at the Washington, D. C., Department of Commerce and Labor as to the average daily wage in Sicily. The difference in their co&t of production is made up largely of labor and wages, . rent, etc. We append a schedule as to the wages in Lipari in 1912, where all the pumice stone is ground, and the wages we pay: Common labor: Per day. Italy $0. 50 New York 2. 00 Carpenter or engineer: Italy 80 New York 4. 00 We have no advantage of the Italian grinder because of any labor-saving machinery, for we both use practically the same kind of a plant. Wages in our Brooklyn, N. Y., mill. In Brooklyn we pay from $2 to $3 per day of 10 hours' work and close half a day on Saturday. Our rent in Brooklyn is $3.150 per year. In Italy our warehouse of practically the same dimensions costs us $300 per year. Furthermore, this pumice is ground by prison labor who are paid 10 cents per day by the Government and thereby forced to work in the mills in order to*exist. The Government has held they were technically not convicts because locked up only at night. Letter No. 90178 of December 13, 1912, from the Treasury Department, Washington, D. C., written after the personal investigation of United States Consul Garrels on a visit at the Lipari Islands in August, 1912, reads in part as follows: "Part of the product of the pumice stone mills at Canneto, Lipari, is manufactured by criminal convicts who are undergoing the fourth degree of punishment prescribed by the Italian penal. They are furnished lodging at lire 0.50 ($0.096) by the Govern- ment, which is not enough to keep them, and they work in the pumice mills, etc., to make a living. About 70 are employed in various grades of labor in the pumice-stone mills, where they earn from 2 lire (40 cents) to 4 lire (80 cents) per day, and this is the scale of wages for common labor and is in keeping with that obtained generally in Sicily in the districts more remote from the larger manufacturing and industrial center. "It is the opinion of the department that the term 'convict labor' as used in section 14 applies only to the enforced labor of convicts and does not include labor voluntarily rendered to individuals. "For adequate compensation under sentences similar to those mentioned it is therefore also of the opinion that the manufacturer 'of pumice stone under the con- ditions cited above is not convict labor within the meaning and intent of the said section 14 and the pumice stone so manufactured is not prohibitive importation under this section." (J. F. Curtis, Assistant Secretary.) Therefore, we may not expect relief from the law prohibiting the importation of merchandise manufactured by convict labor. Estimate of increase or decrease in imports. These changes in duty would make no difference whatever in gross imports of all grades, as the article is such an unim- portant one. The average buyer purchases from one to five barrels and less than 476 TARIFF HEARINGS. PARAGRAPH 89 PUMICE STONE. $100 worth a year, and we are obliged to draw all of our supply from Italy. The change asked would enable American grinders to more successfully compete with the cheap foreign labor. Free competition in United States. We might add that there is in the United States no association nor agreement among pumice grinders, nor is one possible, as any grinding mill could, with the same plant, reduce pumice to a powder, providing the market price would allow him a profit. .'i' f ---' JAMES H. RHODES & Co., ELMER R. MURPHEY, President, Chicago and New York. Mr. LONGWORTH. I notice on this line of assignment that you are defined as being "favorable." Favorable to what? Mr. MURPHEY. I do not know anything about that. This is my brief. Mr. LONGWORTH. Favorable to the reduction of the duty, or what ? Mr. MURPHEY. We want a reduction in our raw materials that we use for grinding. Mr. LONGWORTH. What you want is increased protection ? Mr. MURPHEY. Yes, sir. Mr. LONGWORTH. More than you are getting now ? Mr. MURPHEY. Yes, sir. Mr. LONGWORTH. I was not sure whether you were unfavorable to a reduction in duty generally or to an increase. Mr. JAMES. Do you want an increased duty on the finished product ? Mr. MURPHEY. No, sir. Mr. LONGWORTH. He wants free raw materials, and the same duty on the finished product. Mr. JAMES. Do you want to take the tariff off of the raw materials ? Mr. MURPIIRY. Yes, sir; outside of 30 per cent. Mr. DALZELL. Would you lower the price of the manufactured goods to correspond to the reduction in the duty on raw materials? Mr. MURPHEY. Yes; we would reduce the price of our manufac- tures. Mr. DALZELL. You want the duty on manufactured products under the present law reduced to correspond with the reduction on free raw materials ? Mr. MURPHEY. No, sir; we ask for the same duty of three-eighths of a, cent on material which is ground in Italy. Mr. PAYNE. Did you appear before the committee four years ago? Mr. MURPHEY. We did not; no, sir. Mr. PAYNE. One gentleman appeared here asking for an increased duty on pumice stone. I did not know whether you were the gen- tleman or not. Mr. MURPHEY. No, sir. Mr. JAMES. What is the total output of that product in the United States ? Mr. MURPHEY. A little over 5,000 tons, Mr. James. Mr. JAMES. What amount is imported? Mr. MURPHEY. Of the material we ground, 3,900 tons came in in 1911 and 3,100 tons in 1912. The CHAIRMAN. Are there any further questions ? Mr. LONGWORTT T How many men do you employ? Mr. MURPHEI. About 35. The CHAIRMAN. The next witness is Mr. Reisinger. SCHEDULE B. 477 PARAGRAPH 89 PUMICE STONE. Mr. MURPHEY. I have another brief here which I would like to file in relation to paragraph 89, covering pumice stone, where the duty is 35 per cent ad valorem. Relative to paragraph 89, covering pumice stone, part of which reads as follows: "Manufactures of pumice stone, or of which pumice stone is the component article of chief value, not specially provided for in this section, 35 per cent ad valorem." How applied. We herewith hand you some small shapes of pumice stone mainly used for toilet purposes, which properly come under this neading. But the appraisers have been assessing an imitation pumice brick which contains no pumice at all, but which is made entirely out of clay and flint, at 35 per cent, using this paragraph as their authority. I hand you a sample of this brick known as Bimsstein Fabrik, or imitation pumice brick. Changes desired. We quote an extract from paragraph 90. as follows : ' ' Clays or earths wrought or manufactured not especially provided for in this section $2 per ton." We ask that part of it be changed to read as follows: "Clays or earths, wrought or manufactured, including rubbing, scouring, or polishing bricks or powders. In this way there would be no question about this brick being properly classified. Whatever duty your committee finally determine shall apply on this clause as to "Clays and earth wrought and manufactured," we would ask apply to this imitation pumice brick. I personally have at several times visited the factory in Germany where this brick is manufactured, and know that 65 per cent of the brick is made of a special clay, with 35 per cent of flint added. Increased importation. It is our opinion that there will be little or no change because of properly classifying this article under paragraph 90, as suggested. Not produced here. Some years ago we endeavored to find the same crude material in the United States to enable us to manufacture the brick here, but nothing of the same character could be found. American labor. There never has been one pound of this made in America to date. Therefore, any changes in the tariff are in no way competing with or supplanting Ameri- can labor. The raw material could not be imported and manufactured into these brick forms with the present duty or a higher duty and compete with the foreign-made article. Therefore, the present duty is protecting no one but only operates as a tax on the American manufacturer. Yours, very truly, JAMES H. RHODES & Co., ELMER R. MURPHEY, President, Chicago and New York. The CHAIRMAN. We will give your suggestion consideration when the matter comes up. Mr. HILL. Where is the pumice stone produced in this country ? Mr. MURPHEY. TKere is none producea in this country. There is a volcanic ash, which is produced in the West. Under date of January 15, 1913, the following additional com- munication was filed: NEW YORK, January 15, 191S. Subject: Paragraph 89. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, Washington, D. C. HONORABLE SIR: Referring to our brief, in further explanatin, would say that the customhouse have in many cases been assessing this bimsstein on paragraph 95, which is a catchall for anything not specified in the other paragraphs and which carries a duty of 35 per cent. It was our idea that paragraph 95 was to cover such manufactures of clay as retorts and vessels of that kind but was not intended to cover a manufacture of clay in the form of a scouring or rubbing brick. There has never been any contention by the custom authorities during the later periods but what there was no pumice stone whatever in this brick, and that it was 478 TARIFF HEARINGS. PARAGRAPH 89 PTTMICE STONE. entirely of a clay and flint combination and is baked in a kiln the same as any ordinary brick. Yours, very truly, JAMES H. RHODES & Co., E. R. MURPHEY, President. BRIEF OF R. J. WADDELL & CO., NEW YORK CITY. R. J. WADDELL & Co., New York, January S, 1913. SCHUMACHERSCHE FABRIK OR GERMAN RUBBING BRICKS. Under the present tariff of 1909, we have been obliged to pay duty on the above as classified under the last clause of paragraph 89. We have protested against this, as we believe it is not properly classified and should not come in under this heading. Previous to the Din^ley tariff these German bricks were admitted free, and in our opinion they should still be on the free list, and cer- tainly 35 per cent is an excessive duty. These bricks can not be manufactured in the United States. They are made from disintegrated clay and baked, and the material from which these bricks are made has never been found in this country. If not on the free list they should be classified under paragraph 90, and this para- graph should be changed to read as follows: "Clays and earths un wrought or unmanufactured, $1 per ton; wrought or manu- factured, including rubbing, scouring, or cleaning bricks, $2 per ton." HONES AND WHETSTONES. We are importers of the Tarn O'Shanter and Water of Ayr hone stones found in Scot- land. Under the 1909 tariff hones and whetstones are on the free list. "\Ve import these hones in various sizes and various shapes. Previous to the Dingley tariff all hones were on the free list no matter in what shape or size they were imported. Recently the Board of Appraisers has made a distinction, claiming that some hones were dutiable and others free, and the matter has been in controversy during the last seven or eight years, and we never know what duty we shall be obliged to pay. Decisions have varied from putting them on the free list to 20 to 35 per cent. It will at once appear evident to your committee how unjust this is to the importer, and we would ask that the paragraph be changed to read : "Hones or whetstones of whatever size or shape, whether for sharpening or other purposes, free." This would not interfere with any American product, or, in our judgment, conflict with any other interest. We have been unable to tell since the last tariff went into effect what duty we would have to pay, and we have frequently sold the hones at a loss, thinking they were coming in under the free list, and in several months we would receive an additional duty notice. Can not the paragraph be made clear, so as to avoid this trouble to the importer? CUSTOMS TARIFF OF AUGUST, 1909, PARAGRAPH 89. "Pumice stone, unmanufactured, under $15 per ton, 30 per cent ad valorem. " Lump pumice stone, over $15 per ton, at one-fourth of 1 cent per pound. "Manufactured ground pumice stone at three-eighths of 1 cent per pound." Under the above tariff, our small lump pumice stone for grinding, called pezzame, pays a duty of $2.05 per thousand kilos, or 2,20(^pounds. At three-eighths of 1 cent per pound the duty on the Italian ground pumice stone is $8.25 per thousand kilos, or 2,200 pounds, which shows nominally a protection of $6.20 per 2.200 pounds, which is not sufficient to offset the difference in the cost of manufacturing. SCHEDULE B. 479 PABAGBAPH 89- PUMICE STONE. The lowest price at which we can manufacture our ground pumice stone in our fac- tory in Brooklyn, from the imported lump, is as follows: Per ton. The cost of pumice stone for grinding, including freight to New York, 2 7s.. $11. 47 Duty on pumice stone, at 30 per cent (less freight) 2. 05 Lighterage from steamer dock to Brooklyn dock 88 Cartage from Brooklyn dock to factory, at 2 cents per bag .34 Cost of grinding, including kiln drying, loss of weight, wages, power, bolting cloth, etc 8.00 About six barrels required for each ton, at 30 cents each 1. 80 24.54 The total net cost of $24.54 per ton is as low aa we can possibly turn out our product. The Italian ground pumice stone can be imported into this country, including the payment of three-eighths of a cent per pound duty, at a cost under 1 cent per pound. From the above figures it must be perfectly clear that the nominal protection of $6.20 per ton, as stated above, is not sufficient to protect the American manufacturer, and we would request, as due us as American manufacturers, that the above para- graph 89 be changed to read as follows: "All lump pumice stone should be admitted free. Foreign ground pumice stone should remain at three-eighths of a cent per pound . ' ' The above change would benefit the American manufacturer or grinder of Italian lump pumice stone and would not interfere with any grinder of any domestic material. There has never been any pumice stone found in the United States that could be substituted for use in the arts, and it is necessary to import this article from Italy. It is a raw material, and the manufacturer is entitled to have his raw product free. Also consider the difference in cost, which an American manufacturer has to con- tend with. Our plant represents an investment of fully $60,000. The wages paid are from $2 to $3 per day, with a half day on Saturday. The hours of labor are much longer in Italy and the wages less than a third of what we have to pay. We desire the following changes in Schedule B, paragraph 89, for reasons stated below: All lump pumice stone free. Ground pumice stone at three-eighths of 1 cent per pound. This leaves the duty on the ground pumice stone the same as before. We are importers and grinders of small lump pumice stone, which we must import from Italy, ae there is no genuine pumice stone found in the United States. We can not import and grind pumice stone ready for the market under $24.76. We figure our cost as follows: The cost of pumice stone for grinding, including freight to New York, $11.69 per ton; duty on pumice stone at 30 per cent (less freight), $2.05 per ten; lighterage from steamer to Brooklyn dock, $0.88 per ton; cartage from Brooklyn dock to factory, at 2 cents per bag, $6.34 per ton; cost of grinding, including kiln-drying, loss of weight, wages, power, bolting cloth, etc., $8 per ton; about 6 barrels required for each ton, at 30 cents each, $1.80 per ton; total, $24.76 per ton. The net cost of $24.76 per ton is as low as we can possibly turn out our product ready for the market. The Italian ground pumice stone can be imported into this country, including the payment of three-eighths of 1 cent per pound duty, at a cost to us of $19 per ton on dock. This gives the foreign goods an advantage of $5.76. At the present rate of duty 30 per cent on our small-lump pumice stone our duty is about $2.05 per ton. The duty on ] ton of the Italian ground pumice is $8.25. This would seem to give a nominal protection of $6.20, but notice the above statement that with the duty paid on the Italian ground, they can still offer it in this market at $5.76 under our cost. \Ve are not asking anything unreasonable when we request that the duty on our raw material be taken off, which would give us $2.05, making our cost $22.71, and leaving the Italian st'll $3.71 under our cost. We are able to partially offset this advantage in the Italian grinding by giving a better and more uniform product; this is the only advantage we have. The cost of labor here is fully three times as much as it is in Lipari, and other costs of maintaining a plant in America in proportion. We trust the members of your committee will not be unduly influenced because certain interests in the United States may have in the past been unduly protected, and conclude that all business can be maintained against unfavorable advantages. Pumice stone is only a small business. The consumer will never suffer from any 480 TABIFF HEARINGS. PARAGRAPH 89 PUMICE STONE. changes we have asked for in the tariff, and it would enable us as manufacturers to exist. Shall be glad to furnish your committee any additional information desired. Yours, very truly, R. J. WADDELL & Co. MEMORIAL OF THE ITALIAN CHAMBER OF COMMERCE, NEW YORK CITY. Hon. O. W. UNDERWOOD, Chairman of the Committee on Ways and Means, Washington, D. C. SIR: This chamber desires to submit to the consideration of this honorable commit- tee the following observations on the revision of the herein-stated articles, included in Schedule B (earth, earthenware, and glassware). Pumice stone. Unmanufactured pumice stone, viz: Pumice stone in lumps is practically all imported in this country from the Lipari Islands, located not far off the northeastern snore of Sicily. Although deposits of pumice stone exist in Kansas, Nebraska, Utah, and Nevada, only of late years have they begun to be exploited, and domestic production is yet carried on on a small scale, and to all practical purposes the Lipari Islands remain the only source of supply of this article possessing the qualities required for its use. Pumice is used as an abrasive by manufacturers of furniture, carriages, and other wooden articles, metals, glass, bone, and other manufactures, and more extensively as a filler for scouring, cleaning, and polishing material, and for paint. The imported unmanufactured pumice does not enter into competition with the American article for the reason that the latter can not conveniently replace the im- ported in the manifold purposes in which it is utilized. The lump pumice imported from Italy in fiscal year 1911 to the amount of 5,681 tons, valued at $54,613 is now taxed with an import duty of 30 per cent if valued at not more than $15 per ton, and with a duty of one-fourth of 1 cent per pound if valued at more than $15 per ton. In the Dingley tariff it was rated at 15 per cent ad valorem irrespective of value, and previous to 1897 was admitted free of duty. Its grinding in this country is the object of an industry, which needs this raw mate- rial. Increased freights (at present of about 22 shillings per ton, instead of about 19 shillings, as four years ago on lump pumice in bags) have made the increase of duty burdensome to the grinders, so that in order to counteract the higher cost of freight, the duty should be reduced to its former figures of 15 per cent were it not possible to return this article entirely to the free list. Pumice stone is also imported in a powdered condition (in fiscal year 1911 to the amount of about 3,474 tons), and when it is considered that its present duty of $8 equivalent to about 80 per cent of its value on an article which, although partly manu- factured is a necessary material to other industries, such as the soap and paint manu- factures, that wages have increased of late years in the country of origin, that freights have increased at least 75 cents per ton, which increase acts as a protection to the domestic grinders of the imported lump pumice, that the higher freight on lump than on ground pumice would be counterbalanced by the proposed lowering of the duty on lump pumice to its former rate of 15 per cent it is evident that the duty on ground pumice stone could be reduced without injustice to domestic grinders to its former figure of $fi ("equivalent to about 60 per cent), which is ample protection to the mil- lers in this pountry. For the above stated reasons this chamber respectfully recommends that the duty on pumice stone in lumps, valued at less than $15 per ton, be reduced from 30 to 15 per cent ad valorem, and that the duty on manufactured pumice stone valued at more than $15 be reduced from one-fourth to one-eighth of 1 cent per pound; and finally that on powdered pumice stone the present rate of $8 per ton be lowered to $6 per ton. Limestone rock asphalt. This article, of much lesser value than bituminous or West Indian asphalt, contains no more than 15 per cent, usually only about 12 per cent, of bitumen. It is imported chiefly from Hanover, Germany (in fiscal year 1911, 2,091 tons) and from Sicily (Ragusa) (in fiscal year 1911, 6,099 tons) in increasing quantities (now almost treble the quantity imported five years ago) owing to its increased use in the paving of floors subject to concussions, for which purpose it is especially suited because, provided it is laid 2 inches thick over a good concrete foundation, it does not crack, and provides a flooring of long duration, impervious to water, which permits of being abundantly washed with water without injury. SCHEDULE B. 481 PARAGBAPH 89 PUMICE STONE. Owing to the antiseptic qualities of this material, and signally to the property of not cracking and thus eliminating the accumulation of dirt, that usually takes place in the crevices of other kinds of flooring which are apt to crack, it is preferred for hygienic reasons in the paving of toilet rooms, stables, slaughter houses, factories, parkways, bridges, etc. Although deposits of rock asphalt are said to exist on the Pacific coast, they are hardly exploited, because the product can not economically be hauled to the eastern markets owing to the high freights, a situation which the opening of the Panama Canal, and the lower rates thereby obtainable, can and will remedy better than any artificial protection through the tariff. This material at present is subject to a duty of 50 cents per ton, equivalent to about 16 per cent. With the increased cost of transportation, freights from Sicily have increased of late to about 45 cents per ton; even a duty of 50 cents per ton is anything but low. As it may, however, be necessary for revenue purposes to maintain it, this chamber recommends that it remain unchanged, as this is a line of asphalt importa- tions which has proven satisfactory from a revenue standpoint, the present rate of duty being the most convenient as a revenue yielder without interfering much with its increasing industrial use. Bottles, fdied. This chamber desires to call the attention of this honorable com- mittee to one of the most fiscal features of the tariff act of August 5, 1909, viz, that provision charging duty on bottles imported filled with certain merchandise, such as olive oil, fish, olives, etc., which is by itself subject to duty and, not infrequently, to very high rates. To charge duties on the containers in such cases, as if the container represented a value which it has not, either for the importer or the consumer, is not fair, considering the already higher cost for packing materials (bottles, caps, labels, etc.) and the higher cost of transportation to which the merchandise put up in such containers has to stand by reason of this fractional form of packing; but it is manifestly unjust in the case of merchandise contained in bottles bearing the brand or the name of the manufac- turer in such manner that it can not be removed, thus rendering the containers unfit for further commercial use. It might, moreover, be stated that the duty on bottle containers, or the fiscal regu- lations which impose a duty in certain cases (as, for instance, in beans, peas, mush- rooms, and truffles imported in bottles, a form of packing already handicapped by a higher cost and greater liability to breakage and loss), on the basis of their weight, including that of their immediate coverings, discriminates in favor of other forms of packing, instead of encouraging packing in bottles, which in the case of certain prod- ucts, such as the above stated, may be advisable not only from the standpoint of the better appearance of the article, but also for hygienic reasons, the packing in glass being certainly more healthful than other forms of packing. This chamber therefore respectfully recommends that if, for revenue purposes, it is unavoidable to maintain the duty on bottles used as containers of merchandise already subject to duty, at least it be removed from bottles bearing the brand or name of the manufacturer in such manner that such brand or name can not be removed; and further, that the duty on bottle containers, from the present high rate of 40 per cent, be reduced to a more reasonable rate of specific duty. Marble. Developed as is to-day the quarrying of marble in the United States, espe- cially in Vermont and Tennessee, the most important centers of this industry, it is certain that, owing to the constant increase in the demand of this commodity brought about by the wonderful development of American architecture (which, in line with the improving artistic education of pur people, continuously finds new application for the employment of this noble building material), the future will witness an even more notable increment in the quarrying ol marble in this country, where marble deposits of great variety and of greater or lesser value are to be found in most of the States, so vast is the wealth of the United States in this mineral, fairly distributed throughout its area, marble being quarried from Vermont to California and from Alabama to Colorado. Marble has passed long ago the stage when its use might have been considered a luxury. It has become to-day a commodity, or, to be more exact, a necessity, not only for decorative but often also for sanitary and economic purposes, fully appre- ciated by architects and builders who resort to its use freely, with the -result that marble is to be considered to-day a growing necessity. There is no other country where marble is used as it is here. Such being the case, it is important that, ample as is the source of supply for the domestic article, which for obvious reasons, not excluding that of the enormous pro- 78959 VOL 113 31 482 TABIFP PARAGRAPH 89 PUMICE STONE. tection accorded to it in the past, practically controls the market for the grades of this commodity consumed in the largest quantity, viz, the cheaper varieties, it should not be restricted, as it has been in the past, by not only superfluous but prejudicial high rates of duty on those finer grades of marble destined to special purposes, which are not yet produced in this country and have therefore to be imported from abroad. Italy supplies about 80 per cent of all the marble importations in this country, of which about 70 per cent is represented by marble in blocks, subject to a duty of 65 cents per cubic foot. Marble is imported from Italy because of its special qualities, more suited to certain purposes than the domestic, and chiefly for statuary, and not because it enters into com- petition with American marble, for, as it is visible "a priori," the great difference in the primary cost of production, estimated for the Vermont marble at about 65 cents per cubic foot at the quarry and even less for marbles from other States, against $1.50 per cubic foot for the Carrara marble f . o. b. Leghorn, this would be absolutely impos- sible, aside from any duty consideration. Why a protection as great as the cost of production on the unmanufactured form of marble was ever allowed is, this chamber believes, accountable to the exaggerated importance given to the often-repeated and abused argument of the lower cost of labor in Italy than here, which is, however, not as low as reported by interested competitors. From $1 to $1.60 is paid in Italy to labor working in the quarries for six hours actual work, equivalent to $1.33 to $2.13 for an eight-hour day. The labor employed in the quarrying districts of the United States is paid on the average from $1.50 to $2 per day of 10 hours, equivalent to from $1.20 to $1.60 per day of 8 hours, or about the same as in Italy. At any rate, wages paid to labor are only one of the factors in establishing the cost of production, the disadvantage of the higher cost of labor, if any, in this country, being more than offset by the wide application of labor-saving machinery in the process of extraction, an application which, through peculiar geographical and geological condi- tions, is not possible abroad, where the work of quarrying requires a complicated sys- tem of hauling of the material quarried, which increases the cost of production. It is safe to state that labor in Carrara is, proportionately to the amount of material quarried by a single hand, higher than in the marble-quarrying districts of this country. Add to this the difficulties of transportation, which has to oe done by means of animals to shipping port at a cost of 58 cents per cubic foot, to be added to the cost of the marble at the quarry, viz, $0.92, and you see why the cost price of the Carrara marble at the shipping port of Leghorn ia more than twice the cost of the marble at the quarry in this country. Neither is the statement exact that the American marble quarryman does not derive any protection from the maritime freight, because the average freight from American quarries to the principal distributing points in the United States will average less than from Italy. The freights on American railroads for either domestic or im- ported marble are equal, and comparisons in the cost of freight in the two instances of imported and domestic marble should be made for the same destination and for an average of several differently located places, when it will be seen that the advantage is greater on the side of the American product. Even in the case of New York, which can b reached by the imported marble at a greater advantage than other destinations, i. e., at a freight of 45 cents per cubic foot plus 11 cents per cubic foot, marine insurance and other contingent expenses, or, say, at a total cost of 55 cents, the advantage is notably on the side of the Vermont marble, which can reach the same destination at a cost of 25 cents per cubic foot. It should, moreover, be stated that maritime freights on this commodity have increased lately 10 per cent per cubic foot and further increases seem to be in con- templation, while freights in the case of the American marble have not changed. It will therefore be seen that American marble, in comparison to the imported, enjoys already a natural protection equal to about 100 per cent by reason of the lower cost of production and freight, taking New York as destination, besides the duty pro- tection of 65 cents per cubic foot, in total a protection of nearly 200 per cent. It follows that while the cheapest imported marble, selling usually at $2.85 per cubic foot, leaves a profit to the importer of only 10 per cent, the Vermont marble, selling at $2, leaves to the quarryman a profit of more than 100 per cent. Other advantages are usually associated with the quarrying of American marble in comparison to the imported, and these are the manufacturing of the marble into slabs, or pieces ready for operation, carried on in connection with the quarrying, which, by the protection enjoyed against the marble imported in blocks, makes com- petition impossible from the manufacturer in this country of Carrara marble, who has to pay duty on the marble in block. SCHEDULE B, 483 PARAGRAPH 89 PT7MICE STONE. The present high protective tariff on marble in blocks does not benefit either Ameri- can labor, the employment of which is reduced to a minimum by the equipment of the quarries with modern labor-saving machinery and appliances, nor does it benefit the manufacturers of marble in this country, of whom there are about 100 scat- tered in the States, doing annually a business conservatively estimated at from $15,000,000 to $20,000,000, and who can not compete with the quarryman manufac- turer. It is not to the interest of revenue, as the importation of foreign marble in this country, on account of the exorbitant rate of duty charged, does not keep pace with the demand for marble, and the advantage deriving from the increased demand goes to the total benefit of the domestic article. If the present rate on block marble were reduced to a more reasonable figure, say to 35 cents per cubic foot, as this chamber respectfully recommends, Carrara marble would secure some share of the increased demand, and notwithstanding the reduced rate the revenue would get a greater income than at present, because of increased importations, while the increased use of marble of better quality would add to the value of the buildings in which it is used; would advantage American labor employed in the manufacture of marble and promote artistic improvement. On marble mosaics a duty is at present assessed of 20 per cent ad valorem and one- fourth of a cent per pound. It is the opinion of this chamber that this duty is too high and should be reduced by eliminating the one-fourth of a cent per pound. Mosaic cubes are not made in this country. There is therefore no need of protection. The duty being justifiable only from the standpoint of raising revenue, this chamber believes that if it were reduced as it respectfully recommends, to 20 per cent ad valorem, eliminating the one-fourth of a cent per pound, it would help to increase the sales, which have not developed on account of the prohibitive rates imposed by the tariff act of 1897, preventing the consumer from using an excellent material for which no substitute, equal in quality, can be found in this country. At the last tariff revision some reduction was granted in the duty on mosaics, which, however, has not proven adequate to enable this commodity to attain that extensive use which it certainly would at a more reasonable rate. By granting the reduction recommended there is no doubt that the revenue to the Government would be higher than it has been for the last few years. Granito or terrazzo. It is the opinion of this chamber that granito should be placed on the free list, and that the item "granito" should be specifically stated in tariff nomenclature. About five or six years ago this material, which has been the cause of repeated con- troversies between importers and the Government, was, in consequence of the various decisions rendered, at first admitted in exemption of duty for about one year, and then again returned to the dutiable list on the basis first of 10 per cent and then of 20 per cent duty. Granito is produced, to a certain extent, in this country, at Lee, Mass., and in Georgia, but the domestic product is sold at less than half the prices of the imported article. Granito is worth in Italy about 14 francs per ton, equal to $2.77; it costs $2 per ton to convey it from Carrara to Genoa, and from $3.50 to $4 per ton to bring it to New York. A further 10 per cent addition should be made for waste, which, with the presentduty, at the rate of $0.66 per ton, brings the total cost of the article in New York at $10.30, against $4 per ton, selling price of the domestic article at the quarry. Even with the granito placed on the free list, domestic production could still be sold considerably below the imported, as the steamship companies have lately raised considerably their rates. As the present duty assessment of this commodity at the rate of 20 per cent has helped to limit the importation of an article which should be supplied to the build- ing industry of this country at the smallest possible outlay, this chamber recommends that it be exempted from duty, and that the item "granito" be made one of the cus- toms classification. Botticino, which is a limestone and not a marble, as witnessed by competent tech- nical authority, is now charged at the rate of 65 cents per cubic foot as marble in blocks. This article, also, has been the subject of tedious controversies between the im- porters and the Government, the former having protested against its being assessed at 65 cents, because it is not marble but a limestone, and because it is worth in Italy only from 80 'cents to $1 and even less per cubic foot, which shows conclusively that it is an article of much lower value than the cheapest grade of marble, actually costing at the shipping port $1.50 per cubic foot. 484 TARIFF HEARINGS. PARAGRAPH 89 PT7MICE STONE- The case of the importers, who rightly claim that it should be assessed duty as stone i. e., at the rate of 10 cents per cubic foot was won in all the courts, only to be defeated by the Customs Court at Washington established by the tariff act of 1909. From the facts above stated, it is manifest that the present duty charged on this material is untenable, both from the standpoint of the technical character of the material in question, which is that of a limestone and not that of marble, as well as from the standpoint of equity, it being unfair to charge on a material of much less value than marble the same duty of marble. Therefore, for reasons of justice, equity, and in the interest of revenue, which, were this material allowed to come in at a lower assessment, would benefit by the increased importation, this chamber respectfully recommends that botticino and similar lime- stones, bearing the denominations of Tavernelle, Rosato, Pietra di Trani, etc., be specifically classified, under the paragraph 114, as "unmanufactured limestone," and assessed a duty of 10 cents per cubic foot. Respectfully submitted. [SEAL.] LUIGI SOLARI, President. G. R. SOHROEDER, Secretary. BRIEF OF CHARLES B. CHRYSTAI, NEW YORK, N. Y., IN RE PTJMICE STONE. NEW YORK, February 5, 19 IS. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: Not knowing whether the duty on pumice stone has had consideration as yet or not, I desire to call your committee's attention to the excessive duty on this article, covered in paragraph 89, tariff act of August 5, 1909, "Pumice stone manufac- tured wholly or partly, per pound, three-eighths cent. ' ' This paragraph covers ground or powdered puanice stone, and I am inclosing copy of consular invoice recently received, duly sworn to, showing the value of the pumice stone both at the point of production and at New York, including all charges. The duty on this shipment, as on all shipments of pumice stone, was three-eighths cent per pound. The amount of the inclosed consular invoice in dollars is $615.84 mine value, including cost of bags, and I paid a duty of $855, making the percentage of duty 138.8 per cent. The value of this shipment at New York, adding freights, insurance, etc., duty not paid, $1,194.51, making percentage of duty on this valuation 75.5 per cent. From the fact that there is no pumice produced in the United States excepting a so-called pumice, used in cheap soaps, cleansers, etc., this duty is very excessive. The American pumice BO called, can not be used for most purposes for which pumice is required, such as in the manufacture of silver-plated and solid silver ware, for rubbing down varnished surfaces, and for numerous purposes; in fact, the so-called American pumice is useless for any other purpose, as has been repeatedly demon- strated by practical tests. I would respectfully suggest a duty on pumice stone, manufactured wholly or partly, of $2.50 per ton, and in my opinion, which is based on nearly 20 years' expe- rience in this business, this duty would bring a greater revenue than the present duty does by largely facilitating the importation of pumice. Trusting that this matter will have consideration at the proper time, and feeling certain that your investigations will show that the duty on this material is unduly large, and that due to it the cost of pumice to the consumer is much greater than it should be, I am, Yours, very respectfully, CHAS. B. CHRYSTAL. [Inclosure.] CANNETO, LIPARI, January 2, 191S. Invoice of 1,034 bags powdered pumice stone purchased by Charles B. Chrystal, of New York, from V. & A. di Angelo D'Ambra, of Canneto, Lipari, to be shipped per steamship " Moncenisio." POWDERED PUMICE STONE. FF 400 bags, net kilos 40,000, at 48 Istg . ..' 96.00.00 F 100 bags, net kilos 10,000, at 46 Istg 23. 00. 00 O 150 bags, net kilos 15,000, at 46 Istg 34.10.00 O } 150 bags, net kilos 15.000, at 48 Istp 36. 00. 00 SCHEDULE B. 485 PARAGRAPH 89 PTJMICE STONE. * 50 bags, net kilos 5,000, at 50 Istg 12. 10. 00 G 1 125 bags, net kilos 12,500, at 50 Istg 3L 05. 00 G 59 bags, net kilos 5,015, at 46 Istg 1L 10. 08 Consular certificate 0. 10. 00 Lstg 245. 5. 80 Less freight at New York 84. 11. 50 160. 14. 30 E. and E. E. SPECIFICATION. Lltg. Bags cost 25. 9. 3 Pumice cost 101. 0. Shipping expenses 5. 10. Municipal duty 28. 15. Freight cost 84. 1L 5 245. 5.8 Total amount of export duty paid, Istg. 28.15.0. STATE OP NEW YORK, County of New York, as: Charles B. Chrystal, being duly sworn, says that he is an importer and dealer in pumice stone and has his place of business at No. 11 Cliff Street, in the Borough of Manhattan, New York City, N. Y.; that the foregoing is a true and correct copy of consular invoice filed by him in the United States customhouse in New York City; that the prices noted therein are the present market prices and have been the approx- imate market prices for the past five years. CHAS. B. CHRYSTAL. Subscribed and sworn to before me, February 5, 1913. [SEAL.] ANDREW WOELFEL, Notary Public, Richmond County. Certificate filed in New York County, No. 56, New York County register's office, No. 4161. BRIEF OF F. W. THURSTON CO., CHICAGO, ILL. Pumice Stone and Imitation Pumice Brick. CHICAGO, January 4, 191S. Mr. OSCAR UNDERWOOD, Ways and Means Committee, Washington, D. C. DEAR SIR: Referring to the tariff on pumice stone, paragraph 89, that part which refers to "Manufacture of pumice stone or of which pumice stone is the component article of chief value not especially provided for in this section, 35 per cent ad valorem." How applied : We are interested in the importation of a German imitation pumice brick, which is not made from pumice; in fact, is entirely made from clayey and flinty substances, and which the customs appraisers have been assessing at 35 per cent ad valorem, using the above paragraph for their authority. Changes desired : The commodity to become dutiable in accordance with paragraph 90, which reads as follows: "Clays or earths wrought or manufactured not especially provided for in this section, $2 per ton." In order that this pumice brick receives a proper classification we request that you recommend a change in the paragraph to read as follows: "Clays or earths, wrought or manufactured, including rubbing, scouring, or polishing bricks or powders." In this way there would be no question about this brick being properly classified. Whatever duty your committee finally determine shall apply to the importation listed as "Clays and earth wrought and manufactured," we request you also apply to this imitation pumice brick. Increased importation: A reduction in the tariff should increase the importation of this article, as it will decrease the cost, as under the present ruling the rate of duty is excessive, as the uses to which this brick is put are simply for the purposes of scouring and rubbing. 486 TARIFF HEARINGS. PARAGRAPH 90 ASFHALTTTM. Is not manufactured here. The component parts of this brick have been found by analysis to consist of silica and other mineral substances, but does not contain any pumice. The crude material entering into manufacture, we understand, is native to the country in which it is produced, and none of the exact character has been discovered here to profitably make the brick in this country. American labor: The raw material could not be imported into this country and then manufactured into a similar article with the protection of the present duty or even a higher one and compete with the foreign-made brick, as it is only produced by a few firms who have specialized on this commodity by many years of manufacture. It does not come in competition with American labor; in fact, it will benefit American labor to this extent, that we understand in some of the shops where this material is used the laborer buys his own bricks under contract or piece system. Therefore a reduction will operate as a benefit and not a tax to the American laborer. Yours, very truly, F. W. THXTRSTON, President. PARAGRAPH 90. Clays or earths, tmwrought or unmanufactured, not specially provided for In this section, one dollar per ton; wrought or manufactured, not specially provided for in this section, two dollars per ton; china clay or kaolin, two dollars and fifty cents per ton; limestone rock asphalt, fifty cents per ton; asphaltum and bitumen, not specially provided for in this section, crude, if not dried, or otherwise advanced in any manner, one dollar and fifty cents per ton; if dried or otherwise advanced in any manner, three dollars per ton; bauxite, or bauxite, crude, not refined or otherwise advanced in condition from its natural state, one dollar per ton; fuller's earth, unwrought and un- manufactured, one dollar and fifty cents per ton; wrought or manufactured, three dollars per ton; fluorspar, three dollars per ton. For clays and earths, etc., see R. J. Waddell & Co., page 478; for asphaltum, see Italian Chamber of Commerce, page 480; for fluorspar, see Worth Bros. Co., par. 151, Schedule C; for bauxite, see Merrimac Chemical Co., page 96. ASPHALTUM. STATEMENT OF ARTHUR W. SEWALL ON BEHALF OF THE BARBER ASPHALT PAVING CO. The CHAIRMAN. The next witness is Mr. Arthur W. Sewall. Mr. SEWALL. If you please, Mr. Chairman, and gentlemen of the committee, there are three points to be considered in connection with the item of tariff on asphaltum and bitumen to which I would like to call your attention. They are: First. Why was asphaltum and bitumen, crude and refined, placed on the dutiable list in the first instance; and was this step wise or justifiable? Second. Have conditions changed since the tariff on asphaltum was created ? Third. Should asphaltum and bitumen be removed from the duti- able to the free list ? As to the first question, the asphalt tariff is unique in that it was created to protect not an infant but an unborn industry. Contrary to prevailing belief and assertion, the Dingley duties were not established for the protection of asphalt manufactured from petroleum, but for the benefit of California miners of an asphaltic sandstone, which through extraction of the bitumen it contained, by mechanical processes, was expected to have great commercial possi- bilities. But the scheme commercially was a failure. There was no oil asphalt industry worth talking about at the time of the passage of the Dingley bill in 1897. In that year, according SCHEDULE B. 487 PARAGRAPH 90 ASPHALTTJM. to the 1900 edition of "The Mineral Resources of the United States," page 655, the total production of hard asphalt of all kinds was 3,940 tons, and this production decreased to 1,876 tons in 1898, the year after the bill was passed. Since 1900, however, first in a small way and later hi a rapidly increasing degree, the oil asphalt producers had benefited by the tariff that was imposed to protect an industry that commercially never came into being, and they asserted, when the Payne- Aldrich tar- iff bill was being prepared, that they would be ruined unless the tariff was not only retained but materially increased. One applicant even asked that the duty be increased to $10 per ton. There was not and is not now any domestic product which needs to be protected by a tariff, even the asphalt made from petroleum. As already shown, this product was insignificant at the time of the creation of the present duties, and the price charged for California asphalt up to 1901 was $35 a ton, delivered on the Atlantic seaboard (as shown by Exhibit A, a contract between the Alcatraz Co. and the Southern Asphalt Paving Co., filed with our brief). It was not until three or four years after the passage of the Dingley Act that the production of crude petroleum in California unexpectedly and rapidly reached enormous proportions with the opening up of the Kern River oil fields. In the distillation of part of this largely increased supply of oil the vast bulk of which was used and continues to be used for fuel purposes by railroads, steamships, and otherwise there was made a large and increasing volume of by-product asphaltum, followed by a fall of prices, until it is now sold in the New York market at as low as $16.50 a ton hi cargo lots. These developments, together with a decrease hi freight rates to $12 per ton all rail, and $11 by rail and Gulf, and $6 by Cape Horn, have made it possible for California asphalt to be sold in the East at prices as last named, which are much below those that must be charged for the imported asphalts, because the latter are costly to mine, transport, and refine, represent a very large capital investment, and pay the tariff duties originated in the Dingley Act. I might state for the information of the committee that our plant investment in Trinidad and Venezuela and near Perth Amboy, N. J., is over $7,000,000. The McKinley and Wilson tariffs ignored asphalt, and when, with the inspiration already mentioned, the asphalt duties which have ever since been maintained were proposed in the law of 1897, Senator Chilton, of Texas, made this protest, which is as sound to-day as it was 15 years ago, when the only California asphalt on the market was Alcatraz, the product covered in the original selling contract re- ferred to as our Exhibit A. Senator Chiltori said: It seems to me that this is a case where the American industry is clearly able to stand alone. It needs no protection. This is an unnecessary charge upon the tax- payers of a large section of the country and can do no possible good. The product is one that can not be locally developed by a protective duty, and being so largely used in the work of municipalities, it is not an appropriate subject for revenue duty. It is important to consider that the residual or by-product asphal- tum forms an insignificant part of the petroleum industry as a whole. Of the total California crude-oil production in 1911, 81,134,391 bar- 488 TARIFF HEARINGS. PARAGRAPH 90 ASPHALTUM. rels, not more than 3 per cent (see detailed memorandum illustrative of this field with the committee) was necessary in the manufacture of the amount of California asphalt produced in that year. This product, therefore, can not be an important factor affecting the welfare of California oil producers, so far as the tariff is concerned. Their immense oil-refining capacity, primarily provided for the pro- duction of distillates, results in an amount of oy-product or residual asphalt that has always been far in excess of market demands. The existence of this opportunity in the course of obtaining distillates for producing a vast quantity of residual asphalt is the inspiration of the demand for tariff protection. This demand persists in spite of the fact that its sponsors are asking for protection for a by-product created with the full foreknowledge that the market could not normally absorb it. The most extreme protectionist would hardly claim that it is incumbent upon Congress to rescue deliberate overprotection from its natural economic fate certainly not when the commodity is not a principal product, but one that occurs as an incident in an industry that is made sufficiently profitable by its main products. One hundred and forty thousand dollars was all that should have been paid in 1911 for labor employed in producing that year's output of 139,000 tons of asphalt from California oil, and this is the measure of the extent to which American labor is interested in this matter. I say, "should have been paid." I say that advisedly. For more than 10 years the Barber Asphalt Paving Co. has owned and operated in Los Angeles a refinery for the making of asphaltum out of crude oil. Prior to the rapid development of the petroleum industry in California t*his company had shipped Trinidad Lake asphalt as far west as Portland, Oreg., but it was not commercially possible to do this after the development of petroleum refining in California with its resultant by-product of asphaltum. The refinery referred to was acquired to enable the company to compete in point of price in ob- taining asphalt street-paving contracts on the Pacific coast. That plant nas a capacity of, and does actually produce, 1,400 tons of asphaltum per month. The pay roll, details of which will be filed with the committee, amounts to SI, 397 per month. Thus you will see that the labor cost per ton of asphaltum produced is $1, if the entire labor charge is placed against the asphaltum product, and no part of it against the gasoline, engine, and fuel distillates, which are driven off in the refining process and which constitutes three-fourths of the volume of the petroleum put through the stills. Certainly it would be more accurate to make a pro rata portion of the labor charge against the distillates, they being in bulk and value the prin- cipal products. The plant, at 1,400 tons per month, has a capacity of 16,800 tons per annum. Xine such plants, running full time, could make a pro- duction of asphalt equal to the output of 139,000 tons produced in 1911, as shown in "Mineral Resources of the United States." But there are many more than nine such plants in California, with a great overcapacity of manufacturing ability, and if the overhead charges of tliis excess capacity were added it would increase the cost for labor above Si per ton. In view of these facts, there seems to have been and to be now no justification for the imposition of the tariff on asphalt, a tariff that SCHEDULE B. 489 PARAGRAPH 90 ASPHALTTJM. has directly and indirectly taxed the many for the benefit of the few, and even these few do not appear to need the protection uninten- tionally given them. Secondlv, have conditions changed since these products were placed on the dutiable list ? Not only have conditions changed, as already described, since the enactment of the Dingley law, but a further and more radical change has come about in consequence of the removal of the countervailing duty on petroleum at the tune of the passage of the Payne- Aldrich law. Since petroleum was by it admitted free, there have come to our markets large quantities of Mexican asphaltic oil, which is similar to the California oil, and from which asphalt is being made by the great eastern refining companies at far below the delivered prices of Cali- fornia oil asphalt, no more, in fact, than the rail freight charges on the latter product. This is the real competition that the California producers have to meet; and with the appearance of the Mexican oil, the last vestige of a reason for a tariff on lake asphalt has disappeared. Prior to the removal of the countervailing duty the very high import rates on petroleum and petroleum products in Mexico oper- ated automatically, of course, and they were very high in fact, such as would have been prohibitive on Mexican petroleum if then shipped to the United States. The imported asphaltum from Trinidad and Venezuela or else- where can not possibly compete in price with the residual asphalts made from Mexican and California petroleum; but the lake asphalts have qualities of their own that make them supremely valuable, and of which those who pay for streets and roads should be permitted to take advantage without the additional cost imposed by the tariff. The reasons that led to the removal of the duty on petroleum are equally applicable to asphalts. The Mexican oil, already mentioned, like California oil, is raw material, from which residual asphalt is made. In a similar sense crude lake bitumen is the raw material from which paving and road asphalt is made, and with petroleum it should be placed on the free list. The reasons for placing refined, as well as crude, asphalt on the free list are mainly that this would not menace any considerable interest of American labor, while it would enable producers, American producers, to ship the refined product to points nearest the consuming markets and thus save the cost of freight from main refineries to cities in certain sections, nota- bly hi the Southern States, remote from them. For the information of the committee I would state (by way of parenthesis) that, having such an immense investment of capital in its plant at New Jersey, as heretofore referred to, the Barber Asphalt Paving Co. could not undertake to build and operate additional refining plants at other points along the Atlantic seaboard or on the Gulf coast. From our small refinery at Trinidad there has been imported in 1912, up to the end of November, 16,260 tons of refined asphaltum, of which about one-half is landed at Mobile and the other half at New Orleans. Mr. PAYNE. Are there any by-products manufactured from the Trinidad asphalt? 490 TARIFF HEARINGS. PABAGRAPH 90 ASPHALTUM. Mr. SEWALL. None whatever. In shipping refined lake asphaltum from Trinidad to the Gulf ports for consumption in Alabama, Mississippi, Louisiana, and Florida we have to pay the higher import rate wnich applies to refined asphalt; but, per contra, this higher tariff on the refined is less in amount than railroad freight rates on the same article when shipped from our works in New Jersey to the Southern States mentioned. From the stand- point of fairness to the consumers in those sections, I think it would be most just and proper if the duty on imported refined asphalt were removed. As a matter of fact, American labor has but a very small interest in this matter, either as to the refining of United States oils or im- ported native asphalt. The amount of labor used in refining crude lake asphalt is nearly three times as great as in manufacturing asphaltum by distillation from crude oil, because the crude asphaltum when placed in the hold of a ship amalgamates into a mass and must be dug out by mattocks at destination. It has then to be hoisted from the ship, moved on cars, and placed in bins, again dug from the bins and refined; so that American labor is more interested in this than in the other case. The company that I represent is not asking for a removal of the duty on refined asphalt with the expectation, in case the tariff is removed, of refining a larger percentage of its imported asphaltum at its place of origin. It has, as shown, a very great investment in a refining plant in this country and will continue to operate it always to its fullest capacity. The direct benefit of the removal of the tariff would inure to the consumer in the form of lower prices not to the importers of asphalt and these lower prices would not be obtained at the expense of American labor. Finally, should asphaltum and bitumen, crude and refined, be removed from the dutiable list to the free list ? Without doubt there will be strenuous opposition to the removal of the duty from manufacturers of asphaltum from crude oil in California and those who manufacture asphalt therefrom. There will be opposition from the great refining companies in the East, who are making asphaltum out of the Mexican commodity from oil, but, Mr. Chairman, I assure you you will never receive any protest from any disinterested taxpayer anywhere in the United States if asphal- tum is put on the free list. Without doubt, the reasons why the tariff on asphalt should be removed are: First. Because the present duties of $3 per ton on refined asphalt and $1.50 per ton on crude are a tax on good roads and streets, and in this connection I have a paper which will be filed with our brief, which contains information from the United States Department of Agriculture, Office of Public Roads, in which is given the figures that have been expended in the various States during the current year under State appropriations and other appropriations which have fone hand in hand with and supplemental to the State appropriations. t states, in summing up, that in addition to the amounts already given, a summary of the statistics received from 30 States shows that $72,458,716 has been expended by the counties and other municipal units for highway construction during the last fiscal year. I venture to say that never in the history of our country has a nonpolitical SCHEDULE B. 491 PABAGBAPH 90 ASPHALTTJM. question swept amongst pur people with such tremendous force and absorbed so much of their attention as the present problem of good roads and how to get them. Of course we are aware that an effort is being made to obtain Federal aid, enlist Federal interest, and to what extent that may materialize in results of that sort, of course I do not know. Mr. SHACKLEFORD. We would advise you to be hopeful. Mr. SEWALL. Well, I am hopeful, and I desire to express the thought that with that possibility latent, potential, the continuation of the tariff would seem to indicate that the Nation must, hi con- tributing to the cost of good roads, pay out to a certain extent from one pocket the funds that it has collected into another. Mr. HARRISON. Of course, if we are going to have Federal aid in road building, we won't be able to reduce the tariff. I want to ask you what assurance we would have that the consumer would get the benefit of putting asphalt on the free list. Mr. SEWALL. He would get the full reduction in the tariff. We would make a corresponding reduction in our selling price immedi- ately, as soon as the removal of the duty goes into effect. The CHAIRMAN. How much cheaper would that make it, suppos- ing that we did put asphalt on the free list to go into effect the 1st of July? What would be the quotation of your prices? Mr. SEWALL. If the tariff is taken off, a proportionate reduction in the selling price of Trinidad Lake refined asphalt at our works at Perth Amboy, N. J., would operate to lower the selling price by SI. 77, or from $20, the present price, to $18.23, on asphalt refined at that point. Mr. HILL. Then it would not lower it $3 on the refined ? Mr. SEWALL. No. Because the bulk of our asphalt is imported in the crude state, and therefore does not pay the $3 rate assessed on asphalt when imported in the refined state. Mr. HILL. The question the chairman asked you was, whether, if the duty of $3 on refined asphalt was taken off, the consumer would get the benefit of it the 1st of July. Mr. SEWALL. He would get the benefit of the duty we are paying at the present time, if you please, namely, $1.77 per ton on such asphalt as we produce at Perth Amboy, N. J., from crude; and $2.52 per ton on such asphalt as we import in its refined state through Gulf ports. It should be remembered that the duty is levied on a long ton of 2,240 pounds of asphalt, but the weight of packages is deducted there- from. All refined asphalt is sold in the United States, however, in short tons, consisting of about 1,880 pounds of asphalt and about 120 pounds of barrels, so that for every unit upon which we pay duty there are not only 2,240 pounds of asphalt, but 143 pounds of barrels additional, a total of 2,383 pounds of asphalt and barrels, or about 1.19 commercial short tons for each $3 paid in duty; in other words, that duty per long ton is equivalent to $2.52 per commercial short ton. This accounts for the difference of 48 cents between the $3 per long ton packages weighed out and the $2.52 per commercial short ton packages weighed in. By this latter amount we agree to reduce our selling price for asphalt imported from Trinidad in its refined state. The import rate is assessed on the long ton, disregarding the 492 tARIFP PABAQBAPH 90 ASPHAI/TOM. weight of the containing packages, while all sales in the United States are on the short ton, with packages included in the weight sold, and we therefore are not paying $3 on the short ton. Mr. HELL. But the duty of $3 per ton is intended to fully compen- sate for the shrinkage and loss and all that sort of thing, so that it would seem to me that the duty of $1.50 on the crude would show no shrinkage in the commodity ? Mr. SEWALL. I believe the facts and figures that I have been offer- ing make it clear that the import rates on the refined and crude are not proportionate, the duty on refined being proportionately higher than the duty on crude. From them it would appear that the rate of $3 per ton on the refined was put on under a supposition that it would require 2 tons of crude to manufacture 1 ton of refined, and that the crude asphalt was therefore only half as valuable as the refined for tariff purposes, but such is not the case. Each commercial ton of refined asphalt, manufactured from im- ported crude, represents only 1.18 tons of crude, and not 2 tons. Each commercial ton, as already stated, contains 1,880 pounds of asphalt and 120 pounds of barrels, and to make the 1,880 pounds of refined asphalt so produced there are required 2,648 pounds of crude asphalt, the duty j>aid on which is $1.77. When imported as refined, however, the long ton with its packages becomes converted for commercial purposes into 2,240 pounds of asphalt and 143 pounds of packages, or about 1.19 commercial short tons, upon which $3 duty is paid, or $2.52 per commercial short ton. The crude that was used to make this refined asphalt was about 3,155 pounds and were the rates of duty proportionate, the duty coUected would be equivalent to that on 3,155 pounds of crude asphalt at $1.50 per 2,240 pounds, or about $2.10 instead of $3. Summarizing the foregoing, the customhouse receives payment on on the importation of crude asphalt at our works at a rate equivalent to $1.77 per short ton of United States commercial output while, when the refined article is imported at Gulf ports, the customhouse receives payment at a rate equivalent to $2.52 per short ton of United States commercial output, which in both cases is 2,000 pounds, that is, 1,880 pounds of asphalt and 120 pounds of packages Mr. HILL. Now Mr. SEWALL. Xow. Mr. HILL. Then you do not pay $3 on that which is imported as crude ? Mr. SEWALL. Xo, we pay $3 only when importing refined, and that payment of S3 per long ton is equivalent only to $2.52 when applied to the unit in which asphalt is sold in the United States, i. e., 2,000 pounds, packages weighed in. Mr. PAYNE. Well, Mr. Sewall, have you not competition now which you did not have before in your business ? Mr. SEWALL. Certainly; but not immediately, as the result of the putting on of the duty. Mr. PAYNE. You have more competition, have you not? Mr. SEWALL. We have, since some years after the passage of the DingJey tariff, though, not at the time the duty was created. SCHEDULE B. 493 PARAGRAPH 90 ASPTTAT.TTJM. Mr. PAYNE. Have they not developed more independent com- panies, and do the cities not get more of a chance hi competition, in making their contracts for pavements since that duty was put on? Mr. SEWALL. If you please, Mr. Payne, as heretofore stated, the duty was created to support an undertaking for the mining of bitu- minous sandstone in California. The rock was to be put through a crushing mill and the ground product washed in a closed tank filled with naphtha, which dissolved the particles of bitumen contained in the sand. The solvent, with its load of bitumen, flowed 20 miles through a 4-inch pipe to the seacoast and was there redistilled, the naphtha (which was the solvent) being then pumped back to the quarry on the mountain. The redistillation resulted in a product of refined asphaltum. The operation was expected to cost $7 per ton for the asphaltum produced, but it actually cost $16 and proved a commercial failure. That was the condition at the time the tariff was put on and not until three years thereafter did the oil fields of California commence to yield their large output. There was then a considerable development, and later on a still more extensive output of California asphalt made from oil. Since this production was started on a wholesale scale its introduction into the market has affected our selling prices, but it has not been the only influence which has lowered prices. For 15 years paving-brick factories have come into operation from Pine Grove, Pa., to Coffeyville, Kans., and from Galesburg, 111., to Birmingham, Ala., and at very many intermediate cities. The paving-brick manufacturers have sought popularity with the public, and the struggle which has resulted between them and the makers of asphalt pavement has brought about the lowering of the cost of both types and of the commodities that enter hi to the laying thereof. It would seem not to be accurate or fair to credit the California oil asphalt industry with being the only factor that has caused a downward trend of prices. It had an effect, undoubtedly. Mr. HELL. Is the Mexican product brought in as refined or crude ? Mr. SEWALL. It is brought in in the form of crude petroleum since the removal of the countervailing duty. Mr. SHACKLEFOKD. Your contention is that one form of asphalt comes in free and another form that is not free has to bear the duty ? Mr. SEWALL. Precisely. It is a settled fact that some form of bituminous binder is necessary to hold roads together. With asphalt on the free list the materials best adapted for this purpose could be used at decreased expense. Good pavements and roads are costly enough without the addition of a tariff tax. Second. Because the existing tariff would be saved by the com- munities now paying it hi the form of increased costs and put into much-needed additional construction. That imported asphalts would be reduced in price if the tariff were removed is certain, since these products are now necessarily higher in price, owing to their greater cost, than asphalt made from oils, and it would be to the advantage of all the importers to reduce their price by at least the amount of the tariff tax. 494 TARIFF HBAEINGS. PARAGRAPH 90 ASPHAI/TTTM. Third. Because no lake asphalt is found in the United States and no duties are necessary to protect this product or the labor engaged in its production. No industry or product so located that it must pay heavy freight rates to a part of the market should ask Congress to maintain a tax on the whole country in order to overcome the disadvantages of the product's location. Especially is this true of a product like California oil asphalt, which has demonstrated that it can overcome the draw- back of a high transportation charge even if no tariff existed. Fourth. Because in the face of an increase in asphalt imports from 115,000 tons in 1906 to 168,000 tons in 1911, or 53,000 tons, the pro- duction of California oil asphalt in the same period increased 77,000 tons. This proves that the California industry can prosper hi spite of the increasing use of imported asphalt. All that the Dingley duties have done is to make the imported product cost more and enabled the California producers to charge more than they might have charged for all asphalt had no 'duties been imposed. In support of these statements, I respectfully call your attention to a pamphlet issued by the Union Oil Co. of California, Exhibit B, prior to 1912, the largest producer of asphalt in California, which says: The production of California asphalt now exceeds the entire amount imported from all foreign sources. Note the phenomenal growth of the industry. I might, for the information of the committee, state that from 1900 until January, 1912, the Standard Oil Co., which has the largest refinery in California, made no asphalt. It distilled the oil to a much lower point. Instead of selling the residue at the consistency of asphalt it distilled it down to coke, recovering a larger percentage of distillates, and sold the coke on the Pacific Coast for use in foun- dries and brass works. While California, prior to the discovery of fuel oil, had been extraordinarily handicapped in its lack of fuel for manufacturing purposes, the opening up of its oil fields enlarged its opportunities for manufacturing enormously. Statistics printed in the said pamphlet of the Union Oil Co. (which, however, do not agree with those in Mineral Resources of the United States), assert that the production of California asphalt has increased from 27,000 tons in 1901 to 180,000 tons in 1911, while in the same time importations of asphalt have grown only from 139,047 tons to 174,234 tons. (The first statement shows for California asphalt an increase of 153,000 tons, or nearly 600 per cent, as compared with an increase in importations of asphalt of 35,187 tons, or 26 per cent.) It is in that pamphlet claimed that the paving efficiency of California Union asphalt is 90 yards per ton, while that of Bermudez Lake is 85 yards, and of Trinidad Lake 58 yards. All of the foregoing is not convincing proof of the need for tariff protection to the California material. There are two factors in the price of asphalt, one the price per ton at wliich it is sold and the other the number of yards of pavement got ten out of a ton. It is very important to remember that. By way of illustration, as shown in a tabulation which we will file with the committee, Trinidad Lake asphalt at $20 a ton, laying 58 SCHEDULE B. 495 PABAGBAPH 90 ASPHAI/TDM. yards to the ton (which is the figure given in the aforesaid competi- tor's pamphlet, and which is correct) makes a pro rata cost of 34 cents per square yard of pavement. But California asphalt, sold at the same price, namely $20 per ton, alleged to lay 90 square yards of pavement to the ton, as claimed by the maker, shows a pro rata cost of 22 cents per square yard of pave- ment. Reversing the illustration, if Trinidad refined Lake asphalt were to be sold at 22 cents per square yard of pavement (which is the cost per square yard of California asphalt if laying 90 square yards of pavement to a ton when sold at $20 per ton), thus being put on a parity with the paving value of the California product, the selling price per ton of tne Trinidad article would have to be $12.76. Thus the bitumen contents of a ton of refined asphalt is a controlling feature in determining its relative value as well as the price. Crude Trinidad Lake asphalt, as mined at the lake, contains 33 per cent of water, invisible to the eye, but which can be dried out in stills in 24 hours' treatment. It also contains 28 per cent of sand as fine as the grains of Portland cement, held perfectly in suspension and so ultimately associated with the bitumen that it can not be settled out mechanically, even though the asphalt be heated to several hundred degrees temperature Fahrenheit. To recapitulate, 33 per cent of water plus 28 per cent of sand makes a total of 61 per cent of the contents of the crude Trinidad Lake asphalt, with 39 per cent of bitumen remaining. Let us apply these facts in considering the tariff. Instead of using 39 per cent bitumen, for a quick mental cal- culation, we may use round numbers, or 40 per cent. If this 40 per cent bitumen pays, as it does, an import duty of $1.50 per ton, 100 per cent of bitumen upon the same import rate would pay $3.75 per ton. That is really what the duty amounts to when considered with reference to the bitumen value, which is the test which should be applied. Per contra, the California asphalt, distilled from petroleum and that which is distilled from Mexican petroleum, is practically 100 per cent bitumen. It is further stated in the pamphlet of the Union Coal Co. : The combined capacity of the company's asphalt refineries is at present 5,500 tons per month, or 66,000 tons per annum. Construction to increase refining facilities now under way will give the company a total production of over 100,000 tons per year, equivalent to approximately one-fifth of the present total consumption of asphalt in the United States, which statement is a notable expression of faith in the ability of the California producers of residual asphalt to do an increasingly large business under any and all circumstances. 1 think it is pertinent to call the attention of the committee to this fact also that, while the California producers of asphalt are not giving credit to the Barber Asphalt Paving Co. for what it has done beneficially for their industry, the Barber Co. has placed them tinder obligations that they should never forget. Tie Barber Co. procured, as I have said, a refining plant at LOB Angeles in which to manufacture asphalt for use in paving contacts on the Pacific Coast. It is the custom of the company to maintain a chemical laboratory in connection with its refining plants. In refining in California the chief chemist of the company discovered that there were results possible when heating petroleum to very high tem- 496 TABIFP HEABINGS. PARAGRAPH 9O ASPHAI/TTJM. peratures that were distinctly injurious to the viscosity, or stick- iness, so to speak, of the aspnalt. Anyone who has stirred a mess of porridge or gruel knows that if the fire is hot there must be care- ful stirring to prevent burning, which will show, if not controlled, in the dissemination of little brown or black particles throughout the mass. Quoting from "Mineral Resources of the United States" for 1905, page 1165: Expert chemists state that the refiners are handicapped by the absence of a pro- cess of manufacture which will economically produce an asphaltum free from carbenes (deleterious products of the "cracking" process which goes on in the stills during the distillation of the heavier oils), with a uniform and suitable penetration and possessing stability on heating. A scientific paper by the chief chemist of the Barber Co. was the first to call public attention to this dangerous feature in the making of asphalt from petroleum by distillation. The facts had been dis- covered by him in the laboratory of the company after exhaustive experiments. When, at times, the company had paving contracts on the Pacific coast greater than could be served by the capacity of its oil refinery, it bought asphalt made at other California refineries, and in so doing found that the practice was very irregular in those other refineries, and that the burnt atoms, or " carbenes," sometimes ran as high as 15 to 20 per cent of the asphaltum. Apart from the fact that this had not been previously called to their notice, the reason for the varying quality was that the different refineries were primarily inter- ested in producing distillates, such as gasoline, engine distillates, and fuel distillates, all of them being the major products bringing the higher prices which could be obtained in the refining of petroleum. The chemist of the Barber Co. made use of a solvent called "carbon tetrachloride," in which the carbenes would not dissolve. He was thus enabled to instruct our chemical laboratory in Los Angeles that they should purchase asphalt under specifications that the asphalt obtained should not have over 2 per cent of carbenes, or atoms that could not be dissolved in the carbon tetrachloride solution. An assistant chemist representing the company was placed in the refiner- ies from which we were purchasing. There was trouble at first to lead the manufacturers to recognize the necessity for and abide by the stipulations, though finally they did doso. The resultof that education was a marked improvement in the quality of the product and in its reliability. Thus the rapid growth m the business of the California refineries has been contributed to in a great degree by information obtained from the Barber Co. Mr. PAYNE. Is there any competition of foreign asphalt with your company ? Mr. SEWALL. Not very much. About 14,000 tons last year. Mr. PAYNE. It does not amount to anything? Mr. SEWALL. Practically. Mr. PAYNL. You control all the foreign asphalt? Mr. SEWALL. Ho. We control two asphalt lakes, one in Trinidad and one in Venezuela. There are foreign asphalts which we do not control. Mr. PAYNE. They art not available? Mr. SEWALL. They are Available if anyone chooses to get them. SCHEDULE B. 497 PABAGBAPH 9O ASPHAI/TTTM. Mr. PAYNE. The Trinidad asphalt has a peculiar quality which makes it valuable ? Mr. SEWALL. Yes; largely because it has not been subjected to very great heating, as in artificial distillation of crude petroleum. Mr. PAYNE. Those other asphalts you speak of they never yet have been able to make any terms with those countries, have they? Mr. SEWAIJL. They are not extensively imported. Mr. PAYNE. They have been driven out of there, have they not? Mr. SEWALL. Been driven out of where? Mr. PAYNE. Out of the country where this other asphalt is pro- duced. Mr. SEWALL. No; there are asphalts in Cuba, in western Venezu- ela, on the Magdalena River in Colombia, on the west coast of Africa, and in Turkey. The reason that consumers purchase the Trinidad Lake asphalt and the Venezuelan asphalt is the same that would apply, for instance, if you or I were to go into a clothing store and select the more costly of two suits of clothes because we had learned to recognize additional value in clothes of a certain make and quality. Mr. PAYNE. If we should take all this duty off of asphalt would it result in closing up that California supply? Mr. SEWALL. No, Mr. Payne; first, because they can sell and are selling at as low as $16.50 per ton an article of high bitumen content. Mr. PAYNE. The superior quality of your asphalt would drive them out? Mr. SEWALL. It has not driven them out, according to their own pamphlet. May I illustrate with the same figures I gave before ? Mr. PAYNE. There is no use of giving those. I have those in my mind. I ought not to ask you any questions. It is getting very late. I ought not to interrupt you at all. Mr. HILL. Let me make this suggestion: What would you think about a proposition to put a revenue tax, import tax, of 50 cents per ton on bitumen contents of asphalt and then put an internal- revenue tax on the asphalt that was made from that in the United States? Could we not get a good deal more revenue than we get now from simply an import dutv, and wouldn't it cause an increase in the production of Mexico coming in? Mr. SEWALL. You see it is not refined in Mexico, and I am afraid you would find it pretty difficult to follow through in collecting revenue. Fifth. Because, free of duty, imported asphalt could be supplied in refined form by direct shipment to southern cities. This would save heavy rail freight charges from refineries located at northern seaboard points. New Orleans, Mobile, and other cities similarly situated should be able to buy asphalt as cheaply as New York can buy it. Sixth. Because the increasing use of heavy oils for road treatment, for fuel, and other purposes is resulting in constant advances in the price of these materials. The Barber Asphalt Paving Co. will lower its prices to correspond with a removal of the tariff immediately when such reduction goes into effect. The situation was, I think, absurd enough up to 1909. But now that the Mexican oil can come in free of duty it seems per- 78959 VOL 113 32 498 TABJFF HEAEINGS. PABAGBAPH 90 ASPHALTTJM. fectly ridiculous that a tariff on asphalt should be retained for pur- poses of protection; and as to putting on a duty as suggested by Mr. Hill begging your pardon for differing with you, Mr. Hill I think that when the people of this whole country are attempting to improve roads and when the cost of the roads falls so generally and so evenly upon such a large number of people, it is a tax that might con- sistently better be dispensed with, and the same amount of revenue raised hi some other way. Mr. HELL. It occurred to me as I was sitting here we might get in revenue by putting a corresponding internal-revenue tax on the American production and not on the Mexican production ? Mr. SEWALL. I should tliink that the correct practice would be to make asphaltum, crude and refined, free of duty and thus permit those who prefer these products because of then* quality to get them at a proportionately reduced price. Mr. Chairman and gentlemen, I thank you. Mr. RAINEY. Can you tell us generally what effect the reduction which you suggest would have in the expense of building a half mile of road ? Mr. SHACKLEFOKD. Or on a square yard ? Mr. SEWALL. At 58 yards to the ton, $1.77 lower per ton at the present market price; or about 3 cents a yard. Mr. RAINEY. A saving of 3 cents a yard ? Mr. SEWALL. Yes. Tliis year there has been new construction of city streets approximating 10,000,000 yards, not inclusive of what are known as good roads'" which would vastly increase the total. The CHAIRMAN. Is that all, Mr. Sewall? Mr. SEWALL. Yes; thank you. Trinidad refined asphalt imported into iht United States in 1912. Date of shipment from Trinidad. Name of ship. Tons of 2,240 pounds each. New Orleans. Mobile. Peb 21 Republic 1,166 Mar 12 Three Marys 1,465 May 16 Smith . 426 1,394 May 25 Matador June 8 . . Frednes 1,005 1,016 June 20 Trvm July 17 Malwa 1,005 Aug. 7 . . Trvm 998 2,023 2,017 Sept. 19. Frednes Sept. 25 Trym Oct. 18.. Amanda 1,012 Trym 991 To To 6,468 8,050 8,050 14,518 16,260 COST OF BARRELS. The cost of barrels to October 31 at Trinidad was $1.81 per ton of 2,000 pounds. The production shows that 4.6 barrels were used per ton, making the cost of barrels SCHEDULE B. 499 PARAGBAPH 90 ASFHALTDM. about 40 cents each. Triniday Lake asphalt at $20 per ton, 58 yards, $0.34 per yard. California asphalt, at $20 per ton, 90 yards, $0.22 per yard. If Trinidad Lake asphalt were to be sold at $0.22 per square yard, with 58 yards per ton, its selling price would have to be $12.76 per ton. PROPERTY INVESTMENT. [Real estate, plant, and equipment.) The New Trinidad Lake Asphalt Co. (Ltd) $3, 467, 657 New York & Bermudez Co 1,592,401 The Barber Asphalt Paving Co. (Maurer, N. J.) 2, 181, 769 7, 241, 827 The New Trinidad Lake Asphalt Co. pays a royalty on crude asphalt exported of 40 cents per ton, also an export duty of $1.20 per ton. The New York & Bermudez Co. pays an export duty of 4 bolivars per ton, which equals 77 cents per ton. [Reprinted from the Journal of the Society of Chemical Industry, Apr. 15, 1905. No. 7, Vol. XXIV.] CARBON TETRACHLORIDE AND ITS USE AS A SOLVENT FOR DIFFERENTIATING BITUMENS. By Clifford Richardson and C. N. Forrest. Carbon tetrachloride has attracted of late very considerable attention owing to the fact that it has been made available at a lower price and in a purer form than here- tofore, and it has been suggested as a substitute for carbon bisulphide as a solvent. Tetrachloride, as is well known, is made by exposing a mixture of the vapor of the bisulphide and chlorine to a red heat, forming thereby carbon tetrachloride and sulphur chloride. If the heat is too low, carbon bisulphide remains in the tetra- chloride, and if too high, carbon trichloride (C 2 C 6 1) is formed. As a result of this, or because of insufficient purification, much of the tetrachloride that has been on the market heretofore has contained from 1 to 2 per cent of bisulphide, thus impairing its suitability for certain purposes. The physical properties of the two solvents may be compared with interest: CC1 4 CS, Odor. . Aromatic Rank. Inflammability Noninflammable, nonexplo- 149 P,. vary inflammable Specific gravity 15/15 C sive. 1.604 explosive, 1.270. Vapour tension Low High. Specific heat High Low. Index of refraction 1.464 1.628. 76. 6 C 46 C. Toxic effect None Poisonous. The early supplies of carbon tetrachloride which came into the writers' hands had a specific gravity of 1.593 and a pale straw color. On distillation, this material began to boil below 43 C. showing the presence of some substance of even lower boiling point than carbon bisulphide. On continuing the distillation through an 18-column Young dephlegmator the following results were obtained on a common tetrachloride of specific gravity 1.593: Per cent. Below 43 C 0. 13 43 to 47.. .31 47 to 50. 50 to 60. 60 to 70. 70 to 75. 10 31 22 05 75 to 76.5.. .61 Total. 500 TARTPP HEAEINGS. PARAGRAPH 90 ASPHALTTJM. It appears that 1.73 per cent of the tetrachloride distilled below the boiling point of the pure tetrachloride. On further fractionation 1.5 per cent of pure carbon bisulphide was obtained from the lower fractions, while the residue boiling above^? C. left, on spontaneous evaporation, a substance which sublimed, very readily into quite pure crystals of carbon trichloride, C 2 Cle. More recently a tetrachloride has been put upon the market by the Acker Process Co., of Niagara Falls, N. Y., which has been found to be much purer than the ordinary commercial supply. On distillation under conditions similar to those followed in the examination of the earlier sample, the most volatile constituent was found to come over between 70 and 75 C., and amounted to but 0.8 per cent. It contains a small amount of bisulphide. The boiling point then ran up rapidly to that of pure tetra- chloride, the entire distillate in the first fractionation below that point amounting to but 2.7 per cent. The material as supplied to the trade by the Acker Co. is practically pure tetrachloride, having a specific gravity as shown of 1.604 at 15 C. The solvent leaves no residue on evaporation, although it contains a small amount of trichloride, and is consequently an extremely pure article, at least from a commercial point of view. Considered merely as a standard for extraction on a commercial scale, it is the equal in its solvent power of almost all other solvents, exceeding them to some degree with certain substances. It is miscible with all other solvents of the same class, resembling in this respect carbon bisulphide, and, like the latter, it dissolves but a trace of water. The greater advantage in the use of tetrachloride aa a solvent lies in the fact that while bisulphide is inflammable at 149 C., In consequence of which it takes fire when its vapor comes in contact with a heated steam pipe, and is explosive when mixed with three volumes of air, it is not only quite uninflammable, but imparts this prop- erty to other inflammable substances, such as benzol, turpentine, and naphtha, when mixed therewith. Sixty parts by volume of tetrachloride to 40 of naphtha, 40 vol- umes to 60 of benzol, and equal parts with turpentine prevents ignition of these otherwise inflammable substances. The vapor of tetrachloride is not unpleasant, nor does it appear to have any toxic effect, both of which properties make this materjal preferable to bisulphide in this respect. Tetrachloride has a much higher specific gravity, boiling point, and specific heat than carbon bisnlphide, but a lower vapor tension and index of refraction. Owing to its high specific gravity its volume weight is much greater, and a much larger amount of it must be employed to obtain the same volume of solvent as can be seen from the following figures: [Volume of 1 kilometer in liters.] 62 naphtha 1.366 Benzol 1. 131 CS 2 788 CC1 4 6231 Water 1.000 It appears that a pound of bisulphide will go as far as 1.3 pounds of tetrachloride, while a pound of naphtha has the same volume as nearly 2.25 pounds. Experiments have also shown that its solvent action, upon bitumens at least, is not as prompt as that of carbon bisulphide, probably the lower rate of diffusion being due to its greater density. The value of carbon tetrachloride as a solvent in the examination of bitumens lies in the fact that it exercises a selective action on the hydrocarbons and their derivatives composing many of the native bitumens, residual pitches, and tars, while the true asphalts are dissolved thereby to the game extent as by carbon bisulphide. The same may be said in regard to gilsonite, but such native bitumens as grahamite are not soluble in tetrachloride at air temperatures to the same extent as in carbon bisulphide, as much as 75.3 per cent of an insoluble nature having been found in a grahamite from Colorado, although the type of grahamite from West Virginia contained but 1.3 per cent in this form. The value of the solvent for differentiating the extent to which any native bitumen has been weathered and condensed is, therefore, apparent. It is of additional value in another way in revealing any changes which may be brought about in a bitumen which, althoug'h quite soluble in tetrachloride in its native state, has been injured by treatment at excessively high temperatures in industrial processes. For example, residual pitches carefully prepared from California and Texas petroleums having an asphaltic base, are entirely soluble in tetrachloride at air tem- peratures, but as they are prepared industrially they contain from 1 to 7 per cent of bitumen in a form not soluble in tetrachloride, very conclusive evidence that the original bitumen has suffered a change in character at the high temperature to which SCHEDULE B. 501 PARAGRAPH 90 ASPHALTUM. it has been submitted, this often reaching 700 to 900 F. In the same way, in the careless refining of asphalt for industrial purposes, the bitumen may become more or less altered and insoluble. If this has taken place it can be readily detected by determining if anything is present insoluble in tetrachloride which is soluble in carbon bisulphide. As an example, an asphalt recently introduced on the market the facil- ities for refining which were inadequate, showed 17 per cent of bitumen insoluble in tetrachloride, but with improvement in the process of refining this form of bitumen gradually disappeared. That carbon tetrachloride is a solvent of value in determining the character of bitumens seems, therefore, to be assured. It must for this purpose, however, be employed at a temperature not exceeding 25 C.,. and should be free from carbon bisulphide, and, as used in this way, the writers can cordially recommend it to those interested in the examination of native bitumens. TELLS OF MEXICAN OIL SITUATION. [California Oil World, Dec. 26, 1912.] Los ANGELES, December 25, 1912. Californians will be interested in the following interview published in the National Petroleum News with A. B. Chamberlain, formerly manager of the Indian Refining Co. 'a road-oil department and now a broker for heavy oils in New York: "Mexico, with its enormous production and no local consumption to speak of, offers the logical supply of heavy oils and asphalt to this country," said Mr. Cham- berlain. "The only trouble now is we can not get the boats. There are plenty of them being built, but not enough of them will be finished to permit of any great improvement in the situation until next fall. The high prices of crude and finished petroleum products in this country will force this country to use Mexican and Cali- fornia oil for road and asphalt purposes. The next season will be a bigger road-oil season than any other we have experienced." The Standard Oil interests are reported to have cut the asphalt market in California $5 a ton, making it $17.50 delivered at eastern ports. The Union Oil Co. had been sticking consistently to $22 until the cut came in November. Mexican asphalt can be placed in this country at between $16 and $17 a ton, and it is reported that the Standard interests have reached such an understanding with all other interests oper- ating in Mexico, that they will handle substantially the entire output of that country to the United States, running the crude by tank boats to their Atlantic coast refinery, and there splitting it for what little ends it may have and putting the rest out for road oil and asphalt. ASPHALT YIELD FROM CALIFORNIA CRUDE OIL, From Kern River field 50 per cent out turn. From southern California 25 per cent out turn. They each furnish about one-half the product. The two averaged at half and half 37 per cent. Asphalt tonnage 139,275 tons, requiring at 37 per cent 371,864 tons of oil, at 6.5 barrels per ton 2,417,116 barrels. Crude oil production, 1911, 81,134,913 barrels, of which 2,417,116 is 3 per cent. Capacity per month 1,400 tons of 2,000 pounds, labor list. [Los Angeles refinery of Barber Asphalt Paving Co.] Per month. One superintendent $170 One assistant superintendent 110 One head still man 110 Two assistant still men, at $100 each 200 Two engineers, at $100 each 200 One barrel foreman 97 Six barrel laborers, at $60 each 360 One yard laborer 75 One night watchman 75 Total, 16 employees 1, 397 TARIFF HEARINGS. PARAGRAPH 90 ASPHALTTJM. UNITED STATES DEPARTMENT OF AGRICULTURE, OFFICE OF PUBLIC ROADS, Washington, D. C., January 6, 1912. Hon. WILLIAM M. HOWARD, Hotel Walton, Philadelphia, Pa. DEAR SIR: Replying to your letter of January 1, asking for information concerning recent road legislation and expenditures made by several States, I am herewith inclosing a brief digest of the principal features of the state laws in force at the present time and such information on expenditures as is obtainable. The States of California, Connecticut, Idaho, Maine, Maryland, Massachusetts, New Hampshire, New Mexico, New York, Rhode Island, and Utah have voted or author- ized road bond issues amounting to $136,763,000. A bond issue of $50,000,000 will come before the Pennsylvania Legislature for its third passage during the present year. Ohio voted against a $50,000,000 oond issue in 1912, and Colorado also voted against a $10,000,000 bond issue in the same year, the latter being defeated by a very small margin. According to statistics compiled in this office the State appropriations for State-aid roads in the several States available for expenditure in 1912 were as follows: Alabama $270,000 Colorado 8,300 Connecticut 1,000,000 Delaware 30,000 Georgia 1,543,800 Idaho. Illinois Iowa Kansas. .. . Kentucky. Louisiana. Maine Maryland . Michigan. 193,000 100,000 10,000 6,500 25,000 130, 000 250,000 200,000 250,000 Missouri $80,000 Nevada 20,000 New Hampshire 68,000 New Jersey 750,000 New York 23,000,000 North Carolina 5,000 Ohio 660,000 Oklahoma 5,000 Pennsylvania 1,000,000 Utah 240,000 Vermont 315,000 Virginia 310,000 Washington 1,093,400 Wisconsin 250,000 The State appropriation available for expenditure on trunk lines for construction during 1912 were as follows: California $135, 000 Connecticut 2, 000, 000 Maryland 3, 170, 000 New Hampshire 385, 000 New Jersey $10, 000 New Mexico 87,820 Pennsylvania 3, 000, 000 Rhode Island 940, 000 The above figures are not in every case additional to the State bond issues, but are given to show the funds available for State aid during the year 1912 and represent revenues derived from several sources, including bond issues, direct taxation, auto- mobile licenses, and so forth. In addition to the amounts already given, a summary of the statistics received from 30 States shows that $72,458,216 have been expended by counties and other municipal unite for highway construction during the last fiscal year. This office is now preparing a statement of the amount and value of convict labor performed in the various States upon highways and also information concerning road maintenance, which is one of the most important features of the road problem. It is very probable that since the legislatures of 42 States convene during the present year, considerable road legislation will be passed. Very respectfully, PAUL D. SARGENT, Acting Director. Alabama. A highway law was passed in 1911 providing for five commissioners to serve without pay and a State highway engineer at a salary of $4,000 per annum. The annual appropriation is $154,000, and the State pays 50 per cent 01 the cost of con- struction. County and road district bonds issued prior to January 1, 1912, amount to $3,261,500. Arizona.- Road laws were passed and the office of State engineer created in 1912. The State engineer is subordinate to the board of control. Hifl principal duties are to give advice to county road officials. The State road tax fund is $250,000, and road district bonds issued prior to January 1, 1912, amount to $35,500. SCHEDULE B. 303 PARAGRAPH OO ASPHALTT7M. California. In 1911 the highway commission was appointed, composed of three members who report to the department of engineering. The office of State highway engineer was created and a State bond issue of $18,000,000 is being expended. The State participates only in trunk line construction and pays the whole cost of the same. The total State, county, and road district bonds issued prior to January 1, 1912, amount to 24,251,600. Colorado. The State highway commission is composed of three members appointed for six-year terms, with a civil engineer secretary. One of the principal provisions of the highway law is the preparation of maps showing all roads for purposes of clas- sification, etc. No money can be expended within the corporate limit* of any city, town, or county unless the commissioners provide by taxation for an amount equal to twice the amount appropriated to State, city, town, or county, and in case of failure to BO provide, its apportionment shall be distributed among the other counties. The State s proportion is one-third and the counties' two-thirds on State roads. The total amount of county bonds issued prior to January 1, 1912, is $682,600. The State bond issue was defeated by a small margin November 5, 1912. Connecticut. The State highway department consists of one commissioner, one deputy, and one division engineer. The State aid biennial appropriation is $1,000,000. The trunk line appropriation is $2,000,000. Automobile license revenues amount to approximately $252,000 annually. Delaware. The road affairs of each of the three counties are administered by the levy court of each county. The 1912 State aid appropriation amounts to $30,000. Florida. County, township, and road district bonds issued prior to January 1, 1912, amount to $1,216,000. Georgia. County, township, and road district bonds issued prior to January 1, 1912, amount to $474,000, and the estimated value of statute labor is $750,000 annually. Road funds are expended by the county commissioners of each county. The value of convict labor is estimated at $543,800. Idaho. A State highway commission was established in 1911, composed of the governor and two other State officials who serve without pay. Special appropriations are made for roads and bridges, the total amount of which for 1912 was $193,000. County bonds issued prior to January 1, 1912 amount to $308,526. Special commis- sipners, of which the State engineer is always a member, have superseded the State highway commission for the expenditure of each appropriation made by the State. Illinois. The State highway commission is composed of three members who serve without pay. They appoint a State highway engineer. The annual appropriation is $100,000. It is usea principally for administration and advice. The State main- tains a crushing plant operated by convicts and furnishes crushed stone free to towns. County, township, and road district bonds issued prior to January 1, 1912, amount to $1,310,181. Indiana. The county commissioners and the township trustees have control of highways. County and township bonds issued prior to January 1, 1912, amount to $9,454,847. Iowa. The State highway commission is composed of two members appointed by the trustees of the State College. They employ a highway engineer and other assist- ants, and furnish competent highway builders free to each county. County bonds issued prior to January 1, 1912, amount to $3,459,000. Kentucky. The governor appoints a State highway commissioner for a term of four years. The estimated value of statute labor is $1,000,000, and county, township, and road district bonds amount to $1,623,600. Louisiana. The State board of engineers appoints a highway engineer and assist- ants and furnishes plans, specifications, and advice to the various parishes, cities, towns, and villages. Not more than $50,000 annually may be apportioned to each parish. County bonds issued prior to January 1, 1912, amount to $183,256. The estimated value of statute labor is $421,250 annually. Maine. The State highway department consists of a State highway commissioner and assistants. The annual appropriation for State aid is $250,000. The automobile license revenue amounts to approximately $100,000 and is expended on trunk-line roads. Bond issue of $2,000,000 has been authorized, which will be financed by the revenue derived from automobile licenses. Maryland. The highway commission is composed of the governor and six other members. The commission appoints a chief engineer. The State pays the whole cost of trunk-line construction and 50 per cent of the cost of State-aid roads. State bond issues amount to $6,000,000 and county and road district bonds issued prior to to January 1, 1912, amount to $383,500. 504 TAETPP HEARINGS. PARAGRAPH 90 ASPHALTTJM. Massachusetts. The highway commission is composed of three members, who appoint a chief engineer. The State pays three-fourths of the cost of construction. The State bond issues amount to $2,500,000, $500,000 of which were expended in 1912. The total State and county bond issues, prior to January 1, 1912, amount to $4,234807. Michigan. A State highway department was established in 1909 for the purpose of giving instruction in road building, etc. A State highway commissioner is appointed for a term of four years. The State pays a reward on certain types of roads of $250 to $1,000 per mile. County, township, and road district bonds issued prior to January 1, 1912, amount to $3,101,762. Minnesota. The State highway commision is composed of three members, with a State engineer-secretary. The State pays 50 per cent and the county 50 per cent of the cost of construction. The estimated value of statute labor is $652,500. County, township, and road district bonds issued prior to January 1, 1912, amount to $1,806,164. Mississippi. County, township, and road district bond amount to $2,940,472. Missouri. A State highway engineer is appointed by the State board of agricul- ture. The nature of the work performed is principally educational. County and road district bonds issued prior to January 1, 1912, amount to $819,100. Montana. The estimated value of statute labor is $90,124. County bonds issued prior to January 1, 1912, amount to $2,214,600. Nebraska. County commissioners have supervision of highways where township organization does not exist and they may appoint a highway commissioner. The State and county each pay 50 per cent of the cost of bridges, to which State aid is granted. The county, township, and road district bonds issued prior to January 1, 1912, amount to $763,000. Nevada. County and road district bonds amount to $234,000. New Hampshire. The State highway board is composed of the governor and council and the State engineer designated as superintendent of highways. Aid is appor- tioned to towns on the basis of appropriations made by the towns. State bonds issued prior to January 1, 1912, amounted to $1,000,000, and county, township, and road district bonds amounted to $245,135. New Jersey. The State highway commission is composed of the governor, the president of the senate, the speaker of the house, the State treasurer, and the State commissioner of public roads. A State highway engineer and four division engineers are appointed. The State pays the total cost of the State roads and beginning in 1912 will pay 40 per cent of the cost of State-aid roads, the counties paying 50 per cent and the townships 10 per cent. The total county, township, and road district bonds issued prior to January 1, 1912, amount to $2,494,428. New Mexico. The highway commission is composed of the governor, the commis- sioner of public lands, the attorney general, the State auditor, and the State engineer. The State bond issue of $5,000,000 was authorized in 1912. County bond issues pre- vious to January 1, 1912, amount to $293,800. New York. The State highway commission organization is composed of a State superintendent, two deputies and secretary, and a chief engineer. The cost of State highways is paid wholly by the State. The cost of county and State aid highways is paid by the State and county and the cost of town highways by the State, county, and town. A State bond issue of $50,000,000 has been expended and another issue of the same amount was authorized during 1912, making the total State, county, and township bonds issued $106,630,896. North Carolina. The State geological board acts as the State highway department. The State geologist is the active member, and a State highway engineer is appointed. The estimated value of statute labor is $640,249. County , township, and road dis- trict bonds issued prior to January 1, 1912, amount to $3,272,300. North Dakota. The estimated value of statute labor is $105,000, and the total county and township bonds issued prior to January 1, 1912, amount to $108,500. Oklahoma. The laws of 1911 created a State highway department composed of a State highway commissioner, a chief engineer, and assistants, whose duties are prin- cipally educational aud advisory. The total amount of county and township bonds issued prior to January 1, 1912, are $1,316,000, and the value of statute labor is esti- mated at $731,120 annually. Oregon. A 5 per cent fund derived from the sale of United States public land and a direct fund, due the State upon compliance with the laws of Congress are apportioned among the several counties on the basis of area and are administered by the county board. Pennsylvania. The State highway department is composed of a State highway com- missioner, two deputies, and a chief engineer. State aid is apportioned according to SCHEDULE B. 505 PARAGRAPH 9O ASPHAI/TOM. the mileage of township and county roads, the State paying one-half and the county and township one-half. The State pays the whole cost of State roads. The total county, township, and road district bonds prior to January 1, 1912, amount to $19,513,328. Rhode Island. The State board of public roads is composed of five members. An engineer is appointed. The State pays the whole cost of State roads and one-fifth the cost of State-aid roads, towns paying four-fifths. State bonds issued prior to January 1, 1912, amounted to $1,800,000, and township bonds issued amounted to $125,000. South Carolina. The estimated value of statute labor is $456,088. County and township bonds issued prior to January 1, 1912, amount to $492,000. South Dakota. Statute labor is estimated at $202,500 annually and township bonds issued prior to January 1, 1912, amount to $10,000. Tennessee. In 1909 a State commission of public roads was created to make an investigation and report to the succeeding legislature with recommendations. County, township, and road district bonds issued prior to January 1, 1912, amount to $6,127,000 and statute labor is estimated at $720,000. Texas. County, township, and road district bonds issued prior to January 1, 1912, amount to $11,146,032. Statute labor is estimated at $750,000 annually. Utah. The State road commission is composed of the governor and four other members. State aid is apportioned equally among the counties. The State pays from 80 to 50 per cent, and the county from 20 to 50 per cent of construction. State bonds issued prior to January 1, 1912, amount to $260,000 and county bonds amount to $272,500. Vermont. The governor appoints a State highway commissioner and the commis- sioner appoints a supervisor for each county. The State and town each pay one-half the cost of construction, but aid is also given at the discretion of the commissioner. Virginia. The governor appoints a State highway commissioner for a term of six years, who with four other members, appointed from the different colleges in the State, constitute the highway commission. State aid is given both in the form of convict labor and in money 2 the State appropriation being one-half the cost. County, town- ship, and road district bonds issued prior to January 1, 1912, amount to $2,557,500. Washington. The State highway board is composed of the governor, the State audi- tor, the State treasurer, a member of the railroad commission, also the highway com- missioner. State aid was formerly given to roads, but this provision has been repealed and a permanent highway fund or 1 mill tax is now levied, the State nominally and the county indirectly paying the total cost of construction. Assessment districts, however, may pay 15 per cent of the coet. County bonds issued prior to January 1, 1912, amount to $1,277,000. West Virginia. The office of public roads was established in 1909 and abolished in 1911. West Virginia is the only State which has taken a backward step in regard to centralized authority. County, township, and district road bonds issued prior to January 1, 1912, amount to $205,900. Wisconsin. A State highway commission was created in 1911. The duties are prin- cipally advisory and supervisory. The commission is composed of five members; an engineer of roads and an engineer of bridges are appointed. The State pays not more than one-third of the cost of State highways. The estimated value of the statute labor tax is $375,000 annually and county bonds issued prior to January 1, 1912, amount to $658,000. ADDITIONAL BRIEFS SUBMITTED ON ASPHALT. DENNY & WRIGHT, Rome, Ga., December 23, 191t. Hon. W. G. BRANTLEY, Member of Congress, Washington, D. C. DEAR BRANTLEY: Being one who is vitally interested in the rapidly growing good roads movement throughout our whole section of the South, and having been inti- mately connected with street improvements as county official, I am writing you in the interest of a tariff reform appertaining to natural asphalts. My information is that at present there is no duty on residuum oils. They come in free and in direct com- petition with natural asphalt, upon which there is a duty of $3, according to my information. With the good roads improvement matter so close to the interest of our people, it seems to me that the natural asphalts should be admitted into our country on a parity with residuum oils, thereby increasing competition, and to the pronoun- cedly betterment of our people. Will you not kindly give your attention to this mat- 506 TABIPF HEABINGS. PARAGRAPH 90 ASPHALTTJM. ter, and see whether our good roads improvement can not be advanced by relieving the people of the duty on these natural asphalts, which is very pronouncedly better than oil residuum products that can be furnished by the Standard Oil Co. and other concerns? Thanking you for your kindly interest and study of this matter, and wishing for you a merry Christmas and a glad New Year, and with assurances of my continued fealty and friendship in all matters that may appertain to your success and advance- ment, believe me, Sincerely, your friend, R. A. DENNY. DEPARTMENT OF PUBLIC WORKS, Milwaukee, January 2, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: It has been brought to the attention of the undersigned that a move- ment is under consideration looking to the removal of the present import duties on natural lake asphalts. As commissioner of public works of the city of Milwaukee I feel that it is my duty to express to you and through you to the Congress of the United States my views as to the desirability of removing these import duties. I have been more or less directly associated with the use of asphaltic materials in connection with street pavements and road work for over 25 years and have seen and followed closely the development of the use of asphaltic materials in this country, comprising both the natural or lake asphalts and the so-called residuum asphalts, and acting at the present time in the capacity of commissioner of public works of the city of Milwaukee, and in that capacity being to a great degree responsible for the special taxes assessed against the taxpayers in this city for the paving of the roadways, I feel that any governmental action which may be taken looking to the reduction of the costs of these materials will be a boon to a very large number of taxpayers through- out the entire United States, and will be particularly appreciated by the smaller taxpayers paying taxes on their little homes throughout a vast number of cities in this country. I can not see that the removal of these import duties will effect an undue hardship upon anyone, as it is my personal belief, from such knowledge as I have acquired in this particular material, that the manufacturers of the so-called petroleum residuum or blown-oil asphalts are simply enabled at the present time to charge and secure an undue amount of profit from their business. I agree with many of the experts of the country in the belief that the natural or lake asphalts produce a better and more lasting type of asphaltic pavement than do the pavements based on the residuum products, and if the removal of the import duties from these natural or lake asphalts will tend to decrease the price of that mate- rial, this decrease being reflected in the cost of the asphaltic pavements as laid on the streets, undoubted benefits will accrue to the taxpayers of the United States, on whom falls the burden of expense in these paving matters. This letter is therefore written for the express purpose of assuring you that the undersigned, in view of whatever degree of knowledge he has been able to obtain on this subject, is unqualifiedly in favor of the removal of the import duties upon both the crude and refined asphaltic materials and would be glad to go into this matter more fully and in greater detail at any time in the future when a further and more complete investigation of the merits of the subject was in progress. Very truly, yours, FRED G. SIMMONS, Commissioner of Public Works. SOUTHERN ASPHALT & CONSTRUCTION Co., Birmingham, Ala., December 19, 1912. Hon. OSCAR W. UNDERWOOD, Washington, D. C. MY DEAR MR. UNDERWOOD: I note that the question of the removal of the duties on asphalts is listed for discussion before your committee during the first week in January. SCHEDULE B. 507 PARAGRAPH 00 ASPHALTTJM. At present the duty is $3 per ton on refined asphalt and $1.50 per ton on crude asphalt. These duties were put on asphalts in 1897 at the instigation of the pro- ducers of the California asphalts and were kept on under the tariff bill of 1909 for the benefit of and at the request of producers of residual asphalts, which are by-products of asphaltic petroleums. I think the duties on asphalts should be removed, for the following reasons: Asphalt has come into general use as a material for the successful construction of city streets and the better classes of country roads, and the present tariff tax means nothing more or less than an additional tax on such improvements. This additional tax is particularly obnoxious at this time, when there is such a widespread movement for the betterment of streets and roads. The cost of pavements in which asphalt is used would naturally be decreased if the tariff is removed, as the imported asphalts could be bought at a lower price, and this would have an effect on the price of every form of pavement. The tariff on imported asphalts, while not only increasing the cost of such asphalts, iindoubtedly has its effect also upon the price paid for the by-product asphalts, so that a reduction in the price of the imported asphalts would undoubtedly enable cities and communities to secure much needed highway improvements at a lower cost than now prevails, which would probably mean that much more extensive im- provement projects would be taken up for the betterment of our streets and country roads. As you know, I am greatly interested in the paving business, my company, The Southern Asphalt & Construction Co., makes a specialty of laying asphalt pavements. As we use the imported natural lake asphalts we are vitally interested in having the duty upon the importation of said asphalts removed. In view of the above, I trust that you can have asphalts, both crude and refined, placed on the free list when the time comes for preparing the next tariff bill. Any- thing you may be able to do along this line will oe greatly appreciated by us. With kindest personal regards, I am, Your friend, EUGENE FIES, President. BRIEF IN SUPPORT OP SUGGESTION THAT ASPHALTUM BE PLACED ON THE FREE LIST SUBMITTED BY THE HASTINGS PAVEMENT Co. AND OTHERS. NEW YORK, January SI, 191S. The Hastings Pavement Co. respectfully requests that the duty on crude and refined asphaltum be removed and that both be placed upon the free list. "Crude asphalt" is the material just as it comes from the asphalt lakes, where centuries of exposure to atmospheric conditions has caused it to lose many of its lighter and more volatile oils. "Crude asphalt" from Trinidad Lake contains about 33 per centum of water; and the so-called process of "refining" consists merely of boiling out that 33 per centum of water. In other words, "refined" asphalt is nothing more than the "crude" asphalt with the water boiled out by the operation of heat. The Hastings Pavement Co. is and for 30 years has been engaged, at Hastings-on- Hudson, N. Y., in the manufacture of that form of roadway pavement known as asphalt block pavement. Its business consists of making the asphalt blocks and sel- ling them to municipalities for street paving, or in laying the pavement itself under contract with municipalities. During all that period it has used and now uses Trinidad Lake asphalt exclusively as the binding material in its asphalt blocks. The long experience of the company in the use of Trinidad Lake asphalt has demon- strated that of all known bituminous materials it possesses the qualities of adhesive- ness and cohesiveness to the greatest degree, and therefore best serves the purpose in making a substantial and durable form of pavement. There are other competing materials, such as Venezuelan asphalt, Cuban asphalt, and the so-called artificial asphalt made from oil. The presence of a high degree of cementitiousness in the bitumen is particularly desirable in the form of pavement made by the Hastings Pavement Co. Briefly stated, the asphalt block consists of asphaltic cement and crushed stone, compressed under high pressure; the bitumen contents of the mixture constituting the cement which holds the materials together. The bitumen in the Trinidad Lake asphalt is, in the opinion of this company, superior in all respects to that of any other asphalt, whether natural or artificial, and for that reason this company has for many years made exclusive use of this particular variety of asphalt. 508 PARAGRAPH OO ASPHALTTJM. The company imports its asphalt direct from Trinidad in what is called the crude state, just as it comes from the Trinidad Lake, and, at the company's plant at Hastings- on-Hudson, prepares the crude asphalt for use by driving from it, by means of heat, the 33 per centum of water contained in the crude asphalt as imported. In other words, the company has to thus "refine" its own asphalt, the so-called process of "refining" causing it to lose 33 per centum of its weight before being suitable for use in the manufacture of an asphaltic cement. Until 1897 no duty was levied on this raw material; since then a duty of $1.50 a ton has been assessed upon the "crude" asphalt, which means to this company a duty of $2.25 per ton upon that part of the material which is available for use; this company paying in addition thereto the labor and factory cost.of treating the material as above described. In other words, in order to prepare its raw material for use in the construction of a roadway for a city or village, it has to import the crude material, and pay a duty thereon based upon a bulk which ultimately furnishes but 67 per centum of that bulk in a condition ready for use in the manufacture of its pavement. The imposition of this duty not only does not protect any American industry, but in fact actually operates to impose an onerous and unjust burden upon a long estab- lished and successful industry, as well as to impose a wholly unnecessary tax upon the construction of modern roadways. There does not exist in the United States any commercial form of natural asphalt that competes in any way with the foreign deposits. It is a fact, however, that in the process of refining petroleum oil, having an asphaltic base, a by-product or waste is obtained, which is sometimes called an artificial asphalt, principally because it can be and is used in connection with the construction of roadways. That is to say, the oil refiner distills his oil for the purpose of obtaining and selling the light, volatile oils which have great value; to obtain them is the purpose of the refining of the crude oil. What is finally left is a waste which may be used in some way as an asphalt is used; but the oil is not refined for the purpose of obtaining that waste and, obviously, the imposition of a duty upon crude or refined asphalt was not intended to nor does it in fact furnish protection to the oil refiner. One might as well say that the imposition of a duty upon timber was intended to furnish protection to the saw mill owner in respect to the sawdust resulting from the manufacture of the timber into commercial forms of lumber. Moreover, it is now the declared policy of this Government to allow crude oil to enter free of duty; and it so happens, in respect to Mexican oil, for instance, that the importation of the crude oil free of duty also allows the importation without duty of BO much of the artificial asphalt as is contained in the Mexican crude oil. The result is that the refiners of Mexican oil actually get, as incident to refining that oil, an artificial asphalt which has paid no duty, thereby working a grievous hardship upon the American manufacturer who is not engaged in the oil-refining business but who brings in the crude natural asphalt, paying duty upon it, refining it here with American labor, and then finding himself in competition with the oil refiner who has avoided all duty. We respectfully submit that both the crude and so-called "refined" asphalt should be placed upon the free list. As to the crude asphalt, it is typical in a striking degree of a raw material, for it is invariably a natural deposit existing in consequence of the lapse of ages of time and the slow processes of chemical change. It is taken from the lake by the simplest possible kind of labor, that of plain ordi- nary digging, and it is brought to the United States in such a condition of crudeness that on arrival it has again to be dug out of the hold of the vessel. If imported as so-called "refined" asphalt, the process of refining is in fact nothing more than boiling out of it the water which it contains in its crude state, and thus making its bulk less expensive to ship. But, however imported, its principal use is an important and essential component of modern roads. A customs duty upon it is, therefore, not only an unjust tax upon a raw material, but is in fact a tax upon a tax, because he who pays for the modern roadway is the taxpayer, and in paying his tax he is also subjected to the tax levied by the customs duty on the asphalt in that roadway. SCHEDULE B. 509 PARAGRAPH 90 ASPHALTTJM. We are authorized to say that the following companies, likewise engaged in the manufacture of asphalt blocks, join with this company in urging that asphaltum be placed upon the free list: Asphalt Block Pavement Co., Toledo, Ohio; Washington Asphalt & Tile Co., Washington, D. C.: New Castle Asphalt Block Co., New Castle, Pa.; Railway Asphalt Block Co. (portable plants). All of which is respectfully submitted. THE HASTINGS PAVEMENT Co., HENRY W. RUDD, of Counsel. OFFICE OP MAYOR, Kansas City, Mo., December 28, 191t. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: As chairman of the Ways and Means Committee, I respectfully ask that, in your revision of the schedules in conjunction with tariff revision by the present House, you should take notice of the effect of the present tariff of $1.50 per ton on crude and $3 per ton on all refined asphalt imported into the United States. It is undoubted that some form of bituminous binder is necessary to hold good roads together, and stone is the natural material to use. With asphalt on the free list, material best adapted for this purpose could be used at greatly decreased expense. Good roads and pavements are costly enough without the addition of a tariff tax. The existing tariff could be saved by the communities now paying it in the form of increased costs, which could be put into much needed construction. That imported asphalts would be reduced in price if the tariff were removed is certain, since these products are now much higher in price (owing to the greater cost of production) than the pretended kinds of asphalt made from blown oil. Because the present duty on asphalt was imposed and is retained solely for the benefit of the far western producers of so-called blown oil, which is a by-proauct from the distillation of heavy petroleum. No lake of natural asphalt is found in the United States, so that no duties are necessary to protect this product or the labor engaged in its production. The product of California or Texas must pay heavy freight rates to market and should not ask Congress to maintain a tax on the whole country in order to overcome the disadvantages of the product's location. Because, in the face of an increase in asphalt imports from 115,000 tons in 1906 to 168,000 tons in 1911, the production of California oil asphalt in the same period increased 77,000 tons. This proves that the California industry can prosper in spite of the increasing use of imported asphalts. All that the Dingley duties have done is to make the imported product cost more and probably enable the California pro- ducers to charge more than they would for oil asphalts had no duties been imposed. Because, free of duty, imported asphalt could be supplied in refined form by direct shipment to all eastern and southern cities, saving heavy rail freight charges. New Orleans, Mobile, and cities similarly situated, and Kansas City with her water trans- portation, should be able to buy asphalt as cheaply as New York can buy it. Because, the increasing use of heavy oils for road treatment, for fuel, and other purposes, is resulting in constant advances in the price of these materials. This movement will be retarded if imported asphalt, whether crude or refined, is placed on the free list along with products like the Mexican oils, which are admitted free under the tariff act of 1909. Because, the increasing use of the Texas and California blown oil, passing under the name of asphalt, has furnished Kansas City and all this western country, for some years, with the most despicable paving products that has ever been put on our streets. This suggestion is in the interests of all the road -making authorities in this country; in the interest of every man who pays a paving tax in Kansas City and cities similarly situated. Because this product, whether from Trinidad or Bermudez, in Venezuela, will make better paving, more durable, worth more in every way, than that made with either California or Texas blown oil. Yours, respectfully, HENRY L. Josr. 510 TARTFF HEABINQ8. PARAGRAPH 90 BAUXITE. IOWA STATE HIGHWAY COMMISSION, Ames, Iowa, January 21, 191S. Hon. OSCAR UNDERWOOD, Washington, D. C. DEAR SIR: I understand that your committee will consider, among other matters, the present tariff on crude and refined asphalts. It seems apparent that much of our permanent road improvement will require some form of asphalt and asphaltic oil in construction and maintenance. We have even had in a few instances, under special conditions, reasonably successful improve- ment by means of the application of asphaltic oil to common earth roads properly graded. I believe that the whole Mississippi Valley will use asphalt in various forms in road improvement during the next few years. I would suggest that you consider very carefully the reduction of the present tariff to reduce the cost of these materials. Very truly, yours, IOWA HIGHWAY COMMISSION, By THOS. H. MACDONALD, Highway Engineer. CITY OF MOBILE, BOARD OP COMMISSIONERS, Mobile, Ala., December 23, 1912. Mr. OSCAR W. UNDERWOOD, Washington, D. C. DEAR SIR: In regard to the duty on asphalts which is to come before your com- mittee early next month: Our city has recently let contracts for paving many blocks of our streets and a large proportion of the work will be done with asphalt, which material meets with the approval of our board and when well laid and of the proper type is generally satisfactory. The present duty on imported asphalts, which appear to be the most desirable for street pavements, not only increases the price we must pay for the streets and roads improved with this material but also eeems to affect the price of all paving materials; and this curtails the amount of improvement work that we are able to do. Mobile has shown a decided increase in population during the past few years and we anticipate a greatly accelerated growth following the opening of the Panama Canal, which will make necessary the paving of many more miles of our streets. If Con- gress removes the duty on asphalts, I think the city will secure a material reduction in the cost of its street improvement work. Respectfully, yours, LAZ SCHWARZ, Mayor. BAUXITE. STATEMENT OF WINTHROP C. NEILSON, ESQ., REPRESENTING THE REPUBLIC MINING & MANUFACTURING CO. Mr. NEILSON. I represent the Republic Mining & Manufacturing Co. The CHAIRMAN. To what paragraph do you refer ? Mr. NEILSON. Schedule B, paragraph 90, the bauxite items. I represent the oldest and one of the largest bauxite mining com- panies in this country. We have been mining bauxite since 1889. During that period we have had a protective duty of $1 a ton on bauxite during the time that most of our shipments have moved. During that period we have shown less than $1 a ton profit on our books. I simply make that statement to show the benefit the tariff has been to us, and I want to add that the present arrange- ment of SI per ton is bringing in a nice little revenue from this industry. The CHAIRMAN. I do not think your article is in this schedule, is it bauxite? Mr. NEILSON. Yes; it is in the schedule. SCHEDULE B. 611 PABAGBAPH 90 BAUXITE. Mr. HARRISON. I think it is in the metal schedule. Mr. NEILSON. It is in paragraph 90 of Schedule B. The CHAIRMAN. Very well; proceed. Mr. NEILSON. I am asking for the retention of this present duty. I have prepared a brief in which I give the reasons which lead us to believe this duty should be retained, both as a benefit to the industry in this country and as a source of revenue to the country. As long as I have gone into the matter pretty fully in the brief, I will not say very much here except that I want to bring out the fact that recently we became affiliated with the Aluminum Co. of America. That made no change at all in our personnel or in our corporate existence or in our identity. We are still selling to the trade as we did before, and this move was made largely because with all of our mining operations we get into some hign-iron bauxite, which the regular trade we work with does not use, and the Aluminum Co. can make use of this grade of ore, and it gave us a market for this high-iron bauxite. Within the last day I have heard that I had agreed to recommend the removal of the duty on one of the different grades of bauxite. I simply want to say that is an error, because I have always advo- cated a duty on all the bauxite. The different grades to me look all alike, and a ton of bauxite is a ton of bauxite. I would like to file this brief, to appear in the record. If there are any questions, I will be very glad to endeavor to answer them. Mr. HULL. What have you to say as to the rates in this bill and as they were in the bill last year ? What do you say about those rates ? Mr. DALZELL. What was that rate ? Mr. HULL. Fifteen per cent, as I recall. Mr. NEILSON. I understand you now. I think if we have that put into effect it will cripple us tremendously. We can ship a good deal more than we can get a market lor. The French or foreign materials are cutting us out to a very large extent. At the same time we have developed a pretty nice business, and we are increasing it. The present arrangement is all we can hope for. Mr. HULL. You say your business has recently become allied with the American Aluminum Co. ? Mr. NEILSON. Yes; with the Aluminum Co. of America. Mr. HULL. Your bauxite business is a portion of the business of the American Aluminum Co. now? Mr. NEILSON. Yes; but my company, the Republic Mining & Man- ufacturing Co., still retains its individual identity, and we have not changed our policy in any way at all. They are simply taking over part of their materials that we have heretofore thrown away, for this aluminum industry. Mr. HULL. The import price of this raw material has increased, has it not, during the past 12 months? Mr. NEILSON. No; I think not. I think the import price of this raw material is as it has been, in the rough, for many years. Mr. HULL. What do you understand it to be now ? Mr. NEILSON. I understand you can buy this foreign material for between $8.25 and $9, laid down in New York. Mr. HARRISON. Does it come into competition with your own product ? 512 TAEUT HEAKLffGS. PABAGBAPH 90 BAUXITE. Mr. NEILSON. Yes; I thought I made that clear. Mr. HARRISON. Excuse me, but I could not hear what you were saying. I have been informed that French bauxite is a different material from that which is found in the Southern States, and that there is no real competition between the two. Is that correct? Mr. NEILSON. No; that is incorrect. It is a different ore in a way. It has about two parts of water and six and a half or seven parts of alumina. The American bauxites have practicaUy three parts of water and only six parts of alumina, five and a half to six parts of alumina, on the average. They have a natural advantage of a little bit more alumina, which is one of the reasons why I have asked for the retention of the duty. Mr. HARRISON. The Aluminum Co. of America uses bauxite as its raw material, does it not ? Mr. NEILSON. Yes. Mr. HARRISON. And still it is in favor of having the duty retained upon the raw material ? Mr. NEILSON. I presume they would feel that way about it. Thev have their own mines for the most part, and we only ship a small Eart of our total to them. I presume they are perfectly willing to ave the duty stay on. Mr. HARRISON. Where are the mines ? Mr. NEILSON. The mines are in Arkansas, Georgia, and Tennes- see, and very large mines in Alabama. The^ are ah 1 in the South. They are all a very great distance from the points of manufacture. Our business from 1889 to the present time is really a white alum trade business. We ship to the chemical manufacturing people, and I presume this statement which you make arises from the fact that we have not done very much business with the other people, the people that would use the high iron bauxites, similar to the French bauxites. But I can answer that by saying we have a great deal of this red bauxite lying hi the ground which we have been unable to put on the market. Mr. HARRISON. You mean the red bauxite similar to the French? Mr. NEILSON. Well, red bauxite, possibly not of the same natural character; a little inferior in alumina, putting them to a little bit more disadvantage than the other. But we have great quantities of red bauxite in the South, which we have never been able to mine and market at all. Mr. PALMER. I was not here when you began. What is your rela- tion to the bauxite trade? Mr. NEILSON. My relation to the bauxite trade is that my com- pany is the oldest and one of the largest mining companies in the bauxite industry. Mr. PALMER. You are a miner of bauxite? Mr. NEILSON. We mine and sell bauxite to the trade. Mr. PALMER. You are engaged in that business exclusively? Mr. NEILSON. Exclusively, and have been since 1889. Mr. PALMER. Your company is now owned or controlled by the Aluminum Co. of America? Mr. NEILSON. Yes. Mr. PALMER. And that company owns or controls practically all of the bauxite beds in America, does it not, at the present time ? SCHEDULE B. 513 PARAGRAPH 90 BAUXITE. Mr. NEILSON. No; you are mistaken on that point. Mr. PALMER. I did not say that was my opinion. I am asking you about it. Mr. NEILSON. No. My opinion is they do not control anywhere near all the bauxite. Mr. PALMER. What proportion of it dp they control ? Mr. NEILSON. That really is a question which I do not like to answer, because I do not know. Mr. PALMER. The Aluminum Co. of America, as far as the manu- facture of aluminum is concerned, enjoys an absolute monopoly in this country, does it not ? Mr. NEILSON. I think not. I am not posted as to that. Mr. PALMER. Is it not the onty concern in America which is en- gaged in the manufacture of aluminum articles ? Mr. NEILSON. I am sorry I can not answer you on that point, but I really know very little about the aluminum end of it. Mr. PALMER. It does own or control a sufficient quantity of bauxite for all of its own uses, does it not ? Mr. NEILSON. Yes, I think it does, for a time at least ; but not for an indefinite period. Mr. PALMER. Then if it should turn out to be true that it has a practical monopoly of the aluminum business, of which bauxite is the raw material, and it has sufficient of this raw material for its own uses Mr. NEILSON (interposing). For a certain time. Mr. PALMER. Well, for a long period, is it not ? Mr. NEILSON. Not for a very long period. Mr. PALMER. Then it practically controls all the bauxite which is used in the aluminum trade? Did you ever sell to anybody else except the Aluminum Co. of America ? Mr. NEILSON. I presume that we have not shipped over 2 or 3 per cent of our tonnage to the Aluminum Co. of America. Even now the great bulk of our business is with the chemical people. Mr. PALMER. Have you shipped bauxite to any other concern for the manufacture of aluminum than the Aluminum Co. of America? Mr. NEILSON. Xo, sir. Mr. PALMER. Has anybody else sold any for the purpose of manu- facturing aluminum articles to any other concern than the Aluminum Co. of America ? Mr. XEILSON. I think not. I think, however, that some French bauxite has been imported into this country for that purpose. Mr. PALMER. Does the Aluminum Co. of America own your com- pany outright ? Mr. NEILSON. They do. Mr. PALMER. That is, they own the stock of your company? Mr. NEILSON. Yes. Mr. PALMER. When was it bought? Mr. NEILSON. It was bought in 1909. Mr. PALMER. Have they been engaged lately in buying the control of other beauxite companies? 78959 VOL 113 33 514 TAEIFF HEARINGS. PARAGRAPH 90 BAUXITE. Mr. NEILSON. None that I know of. I have bought one or two properties myself, which I would have bought anyway in the natural course of our own growth. Mr. PALMER. Were those you bought rival concerns? Mr. NEILSON. No; they were from individual farmers. Mr. PALMER. You bought those for the Aluminum Co. of America ? Mr. NEILSON. I bought those for pur regular trade. Mr. PALMER. How big a concern is your company? Mr. NEILSON. $100,000 capital. Mr. PALMER. How long has it been in business ? Mr. NEILSON. Since 1882; we discovered bauxite first along about 1886 or 1887, and made the first shipments in 1889. Mr. PALMER. Where is your bauxite? Mr. NEILSON. Our bauxite is in Arkansas, Alabama, Georgia, and Tennessee. Mr. PALMER. In selling out to the Aluminum Co. of America, did you take the Aluminum Co.'s securities, so that your people are part of that company ? Mr. NEILSON. No; not a dollar's worth of it. Mr. PALMER. You got cash, did you ? Mr. NEILSON. We just sell to them this by-product we make, for a regular price, just as though they were another customer. Mr. PALMER. You sell a by-product to them; what is that? Mr. NEILSON. I thought I made that clear a moment ago, that in our regular mining operations for the chemical trade we get into bodies of bauxite which the chemical trade can not use, and which the aluminum people can use. One of the inducements which led us into this affiliation with them was the fact that they could make use of this by-product . Mr. PALMER. Then as I understand you now, the furnishing of bauxite for the purposes of manufacturing aluminum is simply a side issue with you ? Mr. NEILSON. Absolutely. Mr. PALMER. And the supply of bauxite for the purpose of the alum manufacture is your main business ? Mr. XEILSOX. Absolutely. Mr. PALMER. And the Aluminum Co. of America, which is engaged exclusively in the business of manufacturing aluminum products, has bought you out and now controls your company? Mr. NEILSON. Yes. Mr. PALMER (continuing). And other companies of the same IT- i 7-1 /-] xYllJAl Mr. NEILSOX. I do not know about that. Mr. PALMER (continuing). Engaged in furnishing bauxite for your trade and for the alum trade ? Mr-. NEILSOX. Yes. We have raised no prices since we began. Mr. HARRISOX. The Aluminum Co. of America, which now controls the bauxite fields in America, desire the retention of this duty on bauxite to make it impossible for any other future manu- facturer of aluminum to compete with them, is that the case ? Mr. XEILSOX. I would like to answer that by saving, even if they did have all tlio bauxite in the country, which they have not got SCHEDULE B. 515 PARAGRAPH 90 BAUXITE. by a great deal, although I know they have been reported as having a great proportion of it, even if they owned all of it, they could stifi import bauxite from France and pay $1 duty on it, and lay it down in New York, or any eastern seaport, for two or three dollars a ton less than they could mine this bauxite in the South and lay it down at the seaports. Mr. PALMER. They could not carry it very far inland and com- pete with American bauxite ? Mr. NEILSON. No. Mr. PALMER. So that a reduction in the rate of duty on bauxite would simply somewhat extend the zone of competition with foreign bauxite, bring it a little farther in from the Atlantic seaboard. Mr. NEILSOX. It would probably bring it far enough in to put us out of business. There is already so much bauxite coming into the alum manufacturers of this country from foreign countries that we have to rely a great deal on our western and northern chemical companies' plants. Mr. PALMER. You do not fear about always having a customer for your product now that the Aluminum Co. of America has bought you and owns you; they will buy your product, will they not? Mr. NEILSON. No; they probably could not buy their products at their different plants nearly as readily as these chemical manufactur- ing concerns can buy it. We would lose a great part of our trade, I expect, and I might also say that the kind of ore wnich they use is not similar to the kind of ore which the chemical people use. Mr. PALMER. Let us assume that the bauxite is used by the alumi- num people for a moment. Their plants are all out in the middle western country, are they not? Mr. NEILSON. Yss. Mr. PALMER. Their plant is at East St. Louis? Mr. NEILSON. East ot. Louis, 111. Mr. PALMER. There is not any possibility of foreign bauxite, even with a duty one-half of what it is now, successfully competing with southern bauxite at East St. Louis, is there ? Would not the freight rates more than use up the reduction in duty if we cut the rate on bauxite one-half ? Mr. NEILSON. We ship nothing from the Georgia- Alabama field to East St. Louis on account of the freight rate; therefore I assume that would hold. It would almost keep the foreign ore out of St. Louis, no matter what the duty is. Mr. PALMER. Where is your plant, in Tennessee? Mr. NEILSON. We have mines in Georgia, Alabama and Tennes- see. Mr. PALMER. You can not even compete from Georgia and Ten- nessee at East St. Louis with other bauxites nearer to East St. Louis; is that right ? Mr. NEILSON. We can not. We only send a very small quantity of this by-product material to East St. Louis. Mr. PALMER. Then it follows that foreign bauxite, as far as it being a raw material for aluminum is concerned, would not be a serious competitor at East St. Louis, would it ? Mr. NEILSON. No. 516 TABIFF HEARINGS. PARAGRAPH 90 BAUXITE. Mr. PALMER. It is only you fear foreign competition when it comos to the alum trade ? Mr. NEILSON. When it comes to the alum trade and when it comes to the future field of other bauxites which we hope some day to develop and use these red bauxites which we have. Mr. PALMER. Where are the alum plants in this country ? Mr. NEILSON. Boston, New York, Philadelphia, Buffalo, Chicago, and a small one in Cincinnati. But mostly they are in the large eastern cities. Mr. PALMER. Have you named them all ? Mr. NEILSON. I have named every important one. Did I say Buffalo ? Mr. PALMER. Yes. As far as Buffalo, Cincinnati, and Chicago are concerned foreign bauxite could not compete with the American bauxite, could it ? Mr. NEILSON. It has gone as far as Buffalo in some instances. Mr. PALMER. Under the present rates ? Mr. NEILSON. Yes; but not in large quantities, however. It stops mostly now at the seacoast. Whereas they used to send all the chemical companies' ore to these seaport towns, they are now getting some of the French ore and still using practically 75 per cent or more of their product from Georgia. Mr. PALMER. Your proposition here now is that the present bauxite duty permits some competition at the Atlantic seaboard ? Mr. NEILSON. It does. Mr. PALMER. And allows you to have a monopoly inland? You want to destroy that competition on the seaboard and have an abso- lute monopoly all over the United States ; is that it ? Mr. NEILSON. No; I would not put it just that way. Mr. PALMER. I expect you would not, but that is the proper way of putting it, is it not ? Mr. NEILSON. I would like to ship our material in a little larger quantity to these seaboard towns, but we are very willing to let the present arrangement stand as it is. Mr. PALMER. You are willing to leave it as it is at present? Mr. XEILSON. Yes. We want the duty retained as at present, which lets us ship practically 150,000 or 160,000 tons of ore per annum against 150,000 tons of ore coming in. Mr. PALMER. The retention of the duty at present is in the interest of a decreased competition along the Atlantic seaboard. You want to prevent competition along the Atlantic seaboard ? Mr. XEILSOX. We would like to prevent further competition. If it goes a little further we are ruined in this country. That is, we feel if the duty is taken off the Frenchman would have all of those eastern seaboard cities. Mr. PALMER. Can not he get them all now ? If he can get one can not he get all of them ? Mr. XKII.SOX. No. Mr. PALMKK. Why not' Mr. NKII.SOX. Because the SI duty gives us just that balance of power which lets us ship enough further in to keep us going. SCHEDULE B. 517 PARAGRAPH 90 BAUXITE. Mr. PALMER. You moan the $1 duty makes the French article and your article along the Atlantic seaboard at about the same price, so that now and then you can get customers; is that it? Mr. NEILSON. No; we more than now and then get customers. I suppose we control 75 or 80 per cent of this seaboard custom. Mr. PALMER. You control 75 or 80 per cent of the seaboard towns and all of the inland business ? Mr. NEILSON. Practically. Mr. PALMER. And you want to continue that or get more ? Mr. NEILSON. Yes; that is the idea. Mr. PALMER. Do you not know that there has been, recently, a storm of popular opinion in this country in favor of a reduction of duties to permit some competition in this country? Mr. NEILSON. When you consider there is already a good deal of competition, when the imports are coming in as fast as they are, and when our industry is held down to the point it is held down Mr. PALMER. If you ask me my opinion, I would say that any con- cern which has a monopoly of all the country in the United States away from the seacoast and is able to get 80 per cent of the business in the seaboard towns does not present a condition which I would call competitive. Mr. NEILSON. Now, we not only have the Frenchman to compete with in the seaboard towns, but whenever we sell a pound of bauxite to anybody we have a good many local people to compete with. Mr. PALMER. Are they also concerns which are owned by the Aluminum Co. of America? Mr. NEILSON. Not that I know of. Most of these concerns I am sure are not owned by them. Mr. PALMER. So far as aluminum is concerned there is no compe- tition, because the Aluminum Co. of America buys from its own people entirely, does it not ? Mr. NEILSON. I am not really posted on the aluminum end of it. Mr. HARRISON. Do you refine any bauxite ? Mr. NEILSON. No, sir; we do nothing but mine the raw material and sell it to the trade. Mr. HARRISON. You probably are aware that at the last session of this Congress a bill passed the House reducing the duties on refined bauxite from 24 per cent to 15 per cent? Mr. HULL. Ten per cent. I was in error. Mr. HARRISON. In view of that proposed reduction of duty in the refined article, do you not believe a reduction in duty on the raw material would be only fair ? Mr. NEILSON. I think that that is a little beyond the mining com- panies' scope. If the duties are lowered we know that we will not have as much market for our ore as we have had in the past. We do know that our market has only been a part of what we would like to have it. Moreover, the way it has been has not enabled us to go very deep into the ground for these bauxites. We could have done better mining if we had had a little bit more chance to go deeper into the ground. In other words, when we reach the point that we have got to stop, we leave a good deal of ore underneath us. We simply can not afford to take it put. The CHAIRMAN. That is all. 518 TARIFF HEARINGS. PARAGRAPH 90 BAUXITE. BRIEF SUBMITTED BY REPUBLIC MINING & MANUFACTURING Co., A CORPORATION ORGANIZED UNDER THE LAWS OF THE STATE OF GEORGIA. BAUXITE SCHEDULE B, PARAGRAPH 90. To the Committee on Ways and Means of the House of Representatives of the Sixty-second Congress: There is at present a duty of $1 per ton on bauxite. We respectfully ask that this duty of $1 per ton be allowed to stand.. The Republic Mining & Manufacturing Co. is the oldest bauxite mining company in this country. Chartered in 1882 for the purpose of developing mineral properties in the South, it made the first discovery of American bauxite shortly thereafter, and it made the first shipment of American bauxite in the year 1889. Since the beginning of the industry in that year until the present time we have never stopped mining bauxite. There have been many companies and there have been many individuals operating during this period, but statistics show that the Republic Mining & Manu- facturing Co. has mined and shipped practically 25 per cent of all the bauxite which this country has produced. The largest part of our business has been done with the various chemical companies who manufacture sulphate of alumina, better known as alum. We have sold small quantities to the other users of bauxite, but our business has been, primarily, an alum business. And the profits on our business for 23 years have averaged less than $1 per ton. This statement is made to show our actual need for the duty during this period, and we believe that other American producers have needed this protection fully as much as ourselves. Bauxite is a hydrate of alumina, containing oxide of aluminum, water, and impuri- ties. It is practically a clay in which the oxide of aluminum has replaced a part of the silica. Commercial American bauxite contains approximately 55 per cent oxide of aluminum, 30 per cent of water, and 15 per cent impurities. It is, properly speak- ing, a trihydrate of alumina, as there are about 3 parts out of 10 of water of combination. The bauxites of the United States are found in the State of Arkansas, west of Little Rock; also in the States of Georgia, Alabama, and Tennessee. The Georgia-Alabama- Tennessee bauxite field runs in a northeast-southwesterly direction from a point near Bristol, Tenn., down through Chattanooga, into Georgia, through Rome, and on into northeastern Alabama. Also a territory of considerable importance in Georgia, south- east of Macon, has been opened up within the past few years. It will be noted that all of these American mines lie at great distances from the centers of chemical manu- facturing, which are, for the most part, in the large eastern cities, and in Buffalo, Niagara Falls, and Chicago. Since its small beginning in the year 1889, the industry has shown steady growth and development. To-day practically 1,000 men are employed regularly; large num- bers of farmers also find temporary employment in the mines after crops are laid by. According to statistics published by the United States Geological Survey, there have been mined and shipped in the United States, from the beginning of the industry until the close of 1911, some 1,025,594 tons. Some 85 per cent of this total shipment moved while there was a protective duty of $1 per ton on foreign bauxite. Had it not been for this duty the business would undoubtedly have been much smaller than it lias been. Even with the duty in force, great quantities of French bauxite have been coming into this country, and only the protective duty has enabled the American industry to reach its present stage of development. According to statistics issued by the United States Geological Survey 15,669 tons were imported in the year 1910, and 43,222 tons were imported in the year 1911. American production, according to the same authority, increased from 148,932 tons in the year 1910 to only 155,618 tons in the year 1911. Were the duty removed, or even lowered, American production figures would undoubtedly recede and the import figures would correspondingly increase. Therefore we ask for the retention of the present duty. American bauxites all lie inland, and the rail freight rate to the point of manufac- ture averages not far under so per ton. Include the rate from the Arkansas mines to the Eastern chemical plants, and the average rate is considerably above $5 per ton. Against this, the bauxites of France have a water rate of practically S2. In some instances, cargoes for ballast have been brought over for 6 shillings. Moreover, the French mines are all very near seaport. The deposits lie along the coast from Mar- seille to Nice, and it is a matter of few miles only to reach a port, like Cette, Mar- seille, Toulon, or St. Raphael. This freight rate 'difference in favor of French ore would alone seem to justify the retention of the present duty. It has been shown above that domestic bauxite is a trihydrate, containing some three parts of combined water. Foreign bauxite, on the other hand, is a duohydrate, SCHEDULE B. 519 PARAGRAPH 90 BAUXITE. containing only about two parts out of ten of combined water, with the alumina con- tent replacing the third part of water. This approximate 10 per cent increase in the oxide of aluminum in foreign ore is a natural advantage that we can not overcome. A comparison of the mines also favors the foreign bauxites. The American mines, for the most part, are heavily overburdened and the ore lies deep in the ground. Surrounded by clay and cut by clay barriers, we can do very little underground work. Our open quarrying is followed by great slides, and as we frequently take out ore from a depth of 100 feet even a light rain causes serious delay and cost. The French ores lie mostly in huge bluffs, beautifully situated for mining. Where the ore dips it is for the most part surrounded by rock, so that regular underground mining can be carried on with safety. Again, we believe that French labor for this class of work does not average much, if any, above 80 cents per day. We have had two members of our company make a personal study of this point during several trips to the French mines. In the United States the average labor cost is a full $1.60 per day. And here is a case where labor costs can properly be compared for the total cost of putting bauxite on to cars is almost a hand -lab or cost. A steam shovel here can rarely be used on account of the depths of the deposits, and on account of the clay pockets and different grades being badly mixed. French ore runs more uniform and much more free of clay and grit. With us, the pick and the shovel must be relied on, followed by hand sorting, frequently hand passing into washers, almost always hand passing into cylinder driers, and hauled by wagon to the railroad. Royalty charges and fuel and depreciation on hoisting and drying machinery constitute only a small part of the cost labor con- stitutes far more than all the other costs. Imports of bauxite have so far been chiefly from France. Italy and Hungary are likewise great bauxite-producing countries, each with low-priced labor and plenty of it. Italy and Hungary will send in bauxite, and the tonnage from France will in- crease greatly if the present duty is removed. Under the present arrangement of $1 per ton import duty in the year 1911 some $43,222 in duty was realized from an industry which used some 200,000 tons of bauxite in that year. We presume this ratio fully held in the year just past, and if the present duty is undisturbed there will still be at least an equivalent proportion of American consumption yielding duty. On account of the foreign ore be'ng by nature higher in oxide of aluminum than American ore; on account of foreign labor costing less than American labor; on account of the French deposits being better situated for low-cost mining and close to seaport; on account of the foreign ore carrying a low-water freight rate against our high rail freight rate; and on account of the present duty making large returns on the already established import business, we trust that our request for a retention of the present duty of $1 per ton on bauxite will be found to be in order. WINTHROP C. NEILSON, President, 1111 Harrison Building, Philadelphia, Pa. JANUARY 6, 1913. BRIEF SUBMITTED BY THE MERRIMAC CHEMICAL CO. JANUARY 1, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: On behalf of the Merrimac Chemical Co. I beg to submit the following brief for the consideration of your committee in connection with its investigations regarding the tariff. BAUXITE. Under section 90 of ihe act of 1909 bauxite is assessed a duty of $1 a ton, the language of the act being as follows: "Bauxite, or beauxite, crude, not refined or otherwise advanced in condition from its natural state, SI per ton." * * * Bauxite is distinctly a raw material, and it is our contention that it should be placed on the "free list." There are two distinct kinds of bauxite, one of the character of the American bauxite, commonly known as "white" bauxite, and containing less than 10 per cent of iron oxide, and the other known as "red" bauxite, containing more than 10 per cent of iron oxide, and mined almost exclusively in foreign countries, particularly France. 520 TARIFF HEARINGS. PARAGRAPH 90 BAUXITE. The "white", or American, bauxite contains 47 per cent to 57 per cent alumina, iron oxide not exceeding 10 per cent, and from 6 per cent to 20 per cent of silica The better qualities of this bauxite are used in the manufacture of sulphate of alu- mina, in title manufacture of which a high percentage of silica is not objectionable, while a high percentage of iron is very detrimental. The ordinary "red" bauxite contains 58 per cent to 60 per cent of ahimina. 18 per cent to 22 per cent iron oxide, and 2 per cent to 4 per cent silica. This "red " bauxite is used principally in the production of alumina, which is the principal source of alu- minum used in the manufacture of the metal aluminum. In the refining process of this "red" bauxite "the high percentage of iron is not objectionable, while a high percentage of silica contents is almost fatal to economical manufacture. Thus it is apparent that the American, or "white, " bauxite and the "red" bauxite, which con- stitutes the greater portion of the foreign importation, being distinct in their character and purpose, are not in serious competition with each other. An effort was made at the last tariff revision in 1908-9 to have the duty on bauxite increased from $1 a ton to $2 a ton on the ground that the American mines could not compete with the foreign mines. We do not believe that importations of bauxite interfere in the slightest with our American mines, nor do we believe that the output of our American mines would be affected if bauxite were placed on the free list. The following are our reasons for this opinion: (1) As already stated, the "red" bauxite, which constitutes the bulk of the foreign importation, is used for different purposes than the "white" bauxite, which is mined in this country The only important exception to this statement that we know of is the Arkansas bauxite used by the Aluminum Co. of America in their works near St. Louis. The Arkansas mines in question are, we understand, owned and operated by the Aluminum Co. of America, and it is most improbable that their operations would be in the least curtailed by the removal of the duty because the inland freight on the imported ore would be prohibitive. (2) Our American mines have shown a steadily increasing output, and there is no indiciation that the development of these mines has been or is likely to be retarded by the importation of foreign bauxite. According to the Mineral Industry for 1911, which is the most accurate and official estimate of mineral productions published in the United States, there were produced in the United States in 1911, 155,618 tons of bauxite. This is somewhat larger than the output in 1910 and 1909 and three times the output in 1908. In 1911 there were imported into this country 43,222 tons of bauxite, but the major portion of this importation was "red" bauxite, which, as already explained, is not really in conflict with our American ore. It is submitted that, when due consideration is given to the fact that the American output of bauxite has tripled since 1908, and when it is considered how small has been the importation of "white" bauxite under the present duty, it will be apparent that our American producers of bauxite do not require the protection of this $1 duty. CONCLUSION. To place bauxite on the free list would surely stimulate the aluminum industry, and would not, in our judgment, seriously affect our American mine owners, because, as already explained, the American markets for the imported and domestic ore are to a large extent separate and distinct. Furthermore, should it be deemed advisable to maintain a duty on our American bauxite, a distinction may be made between the "red" and the "white" bauxite, and the duty removed on the former. This may be effected by providing that bauxite containing in excess of 10 per cent of iron (FeoOg 1 ) shall be entered free, and bauxite containing less than 10 per cent iron shall pay a duty of $1 a ton. BRIEF OF THE PENNSYLVANIA SALT MANUFACTURING CO., PHILADELPHIA, PA. PHILADELPHIA, PA., December 2, 1912. Hon. OSCAR W. UNDERWOOD. Chairman Committee on Ways and Means, House of Representatives, Washington, D. C. DEAR SIR: \Ye have the honor to present herewith a brief of facts in the matter of the crude article bauxite, which is now subject to a duty of $1 per 2,240 pounds. SCHEDULE B. 521 PARAGRAPH 90 CHINA CLAY. Bauxite is in Schedule B, paragraph No. 90, act of August 5, 1909. The importation this year will amount to about 30,000 tons. The consumption in the United States is estimated at 150,000 tons during 1912. We respectfully ask that it be transferred to the free list, where for many years it was incorporated. The article imported does not come in competition with the domestic article, by reason of its wide difference in composition. The foreign article contains 60 per cent of alumina and over 20 per cent of iron, whereas the domestic article contains from 50 to 55 per cent alumina and is very low in iron. On account of the iron the foreign red bauxite is not adapted for making alum direct, whereas the domestic article is particularly so; therefore the foreign does not compete, as stated. The selling price of domestic bauxite is about $6 per ton at the mines, compared with $3.60 per ton for foreign at shipping point in Europe. The importation com- prises only about 20 per cent of the total bauxite consumed in the United States. As the bauxite is distinctively a raw material of the crudest character involving a minimum of labor, we submit that it should be placed on the free list. Yours, truly, PENNSYLVANIA SALT MANUFACTURING Co., THEODORE ARMSTRONG, President. RESOLUTIONS OF BENTON (ARK.) CHAMBER OF COMMERCE. Whereas the largest deposit of bauxite in America is situated in Arkansas, near the city of Ben ton; and Whereas three corporations are engaged in the mining and shipping of this bauxite; and Whereas these companies have made very heavy investments in mining plants and building railroads and equipment for mining this bauxite; and Whereas the pay rolls of these companies amount to from $15,000 to $20,000 a month, and that this money is paid to the laborers, who spend it in this community; and Whereas one of these mining plants has built the second largest town in this county, some miles of first-class public roads, erected a $12,000 schoolhouse for the benefit of the children of the community, a, hospital costing over $6,000, a free bathhouse for the use of their employees; all this, where a few years ago there was a wilderness; and Whereas the existing tariff under the Payne-Aldrich bill enables foreign bauxite and aluminum to be shipped into America in free competition with the American man- ufactured articles; and Whereas should the tariff on bauxite and aluminum as contemplated by the Under- wood bill now before Congress be passed, in our judgment would close down this the largest industry in our county: Therefore be it Resolved, That the Benton Chamber of Commerce, of the city of Benton, Ark., in chambers assembled, pray that you use your influence to prevent the tariff being removed on bauxite, aluminum, and alumina as contemplated by the Underwood bill; And be it further Resolved, That the secretary of this organization send a copy of these resolutions to each of our representatives in Congress. The foregoing is a true copy of the resolutions adopted by the board of directors of the chamber of commerce on the 30th day of January, 1913. M. F. SCOTT, President. CHINA CLAY. STATEMENT OF JOHN RICHARDSON, ESQ., REPRESENTING THE JOHN RICHARDSON CO., OF BOSTON, MASS. The CHAIRMAN. The next witness is the John Richardson Co. The committee has assigned to you, Mr. Richardson, 10 minutes. Please give your name and address to the stenographer. Mr. RICHARDSON. John Richardson, of Boston. Mr. DIXON. What section of the bill will you speak about? Mr. RICHARDSON. Paragraph 90. 522 TARIFF HEARINGS. PARAGRAPH 90 CHINA CLAY. Mr. Chairman and gentlemen, I want the duty on china clay removed. I emphasize two points: First, the damage done by the duty to the great paper industry, employing over 65,000 men. Second, the comparatively insignificant damage by removal of the duty to the southern clay industry. As to the first point, paper making is among the largest industries of the United States. Our makers of the better grades of paper must have English clay. The duty on this raw material is now over 36 per cent. From this tax the United States Government receives annually a revenue of over half a million dollars. That revenue is in the end paid by the paper makers. Canada's facilities for the manu- facture of paper excel those of the United States. China clay is admitted free into Canada; her paper comes here free. Already a number of American paper makers have bought land there. Each dollar collected as duty means a gain of $1 to the paper maker who goes to Canada. Now, for the second point, the comparatively insignificant damage to the domestic clay industry. The total value of domestic paper clay produced in 1909 was less than $400,000. Under 1,500 men were employed. From 1905 to 1910, in spite of the duty, the increase of English clay imported over the increase of domestic clay produced was 938 per cent. This duty, which is borne by the paper makers, of over half a million dollars a year protects an industry with a total annual output of less than $400,000 and employing under 1,500 men. I am ready for questions. The CHAIRMAN. Do gentlemen of the committee desire to ask Mr. Richardson any questions ? That is all. PETITION TO REMOVE THE DUTY o\ CHINA CLAY. OR KAOLIN. {Brief of John Richardson Co.] STATEMENT OF FACTS. The COMMITTEE ON WAYS AND MEANS. House of Representatives, Sixty-second Congress: In 1908 the John Richardson Co. was represented at the hearings before the Ways and Means Committee on a petition similar in its purport to this brief, namely, the removal of the duty on china clay, or kaolin. Xow. as then, your petitioner is acting at the suggestion of several paper makers. In 1908 the petition was dismissed after a rather brief hearing. Since 1908 the new Canadian tariff has been put into effect, thereby admitting from Canada one of the finished products of china clay, paper, free of duty. This brief deals first with the subject in the light of the new Canadian tariff, and, second, attempts to explain, more fully than was possible at the hearings before the committee, the effect of the present duty on china clay. EXPLANATION OF TERMS. China clay and kaolin are different names for the same article, and this article is a raw material used in the manufacture of paper, pottery, bleaching, and ultramarine. In this brief the term china clay will be used, except iri the case of the North Carolina clay, where by force of custom the name kaolin has always been applied to the clay there. In spite of the fact that oil imported clay is really of one kind, there are many different grades of cost. This is due to the facts which will be explained later. SCHEDULE B. 523 PARAGRAPH 00 CHINA CLAY. THE DIFFERENT COSTS OF ENGLISH CLAY. The cost of English clay in hulk f. o. b. Cornwall, England, varies from 15 shillings to 32 shillings per ton. Add about 9 shillings and you have the price at New York with- out the duty. These clays, though varying in cost, are in fact all of one kind , the reason for the difference in cost being that the more expensive clays are more thoroughly washed when taken from the mine and are of a whiter color. The expensive clays are used in the finished paper by the coating manufacturers, potters, and to a limited into the United States. This is only $6.76 per ton at port of shipment. (United States Bureau of Statistics, No. 15, imports entered for consumption years ending June 30,1909-10, p. 965.) To this must be added 9 shillings for ocean freight and $2.50 per ton duty, making the average value at United States seaboard $11.42 per ton. English clays sold in 1909, Boston, New York, and Philadelphia, at prices ranging from $11 per ton to $18 per ton. Thus there can not be much expensive English clay imported, or the average would be higher. Inasmuch as the importation of the more expensive English clays is comparatively small, and, furthermore, as there are no American clays of sufficient whiteness to be in competition with these English clays, we shall say no more about them in this brief. We think they do not alter our conclusions in either direction, and therefore at once proceed to the lower grade English clays, of which so large a bulk is imported. We shall then give evidence showing a comparison of the cheaper English clays and domestic paper clays, starting with the clay in its natural state, then showing the analyses of the domestic and English, then the uses, the tariff, the size of the domestic-clay industry, and the competition existing among American paper manufacturers. IN ITS NATURAL STATE. China clay, or kaolin, may be divided into two classes, viz, residual and sedimentary. Residual days. Beds of china clay occurring in or very close to their place of origin are known as residual clays. All English clays are residual, and the deposit is decom- posed granite. The method of mining is by sending a stream of water down the side or stope of the pit, and this stream takes up and carries with it feldspar, mica, and sand. This material is pumped, strained, and settled, then dried in kilns. (See photographs attached of English mines, showing this method.) The residual clays of the United States do not concern us, since they would not be affected by removal of the duty, as hereinafter explained. Sedimentary clays. In the erosion of the earth's surface residual clay is washed down into tlie lakes and seas, where it is deposited in the form of a sediment, with the addition of many impurities. This latter is known as sedimentary clay. The clay deposits of Aiken, S. C., are sedimentary, and in this area are most of the so-called paper clays produced in the United States which could be affected by the removal of duty on English clay. The mining of these clays is simple. The overburden, or earth on top, is removed, and from the solid mass of clay lumps are separated by pick and shovel. These are roughly assorted into grades, determined by color, and stains pared off. 1 The clay is then dried in an open shed, is casked, and ready for market. In some instances the clay is washed with good results. (Attached are cuts from photographs of some of the principal domestic mines. ) For samples of the deposits of English and American clay see Exhibits "A" and "B." 524 TARIFF HEARINGS. PARAGRAPH 90 CHINA CLAY. ANALYSES. We here present a table of an average test of English clay and a test of clay from two mines in South Carolina and one in North Carolina. As explained, the North Caro- lina clay is called kaolin: Medium English china clay. Paper clay, South Carolina. 2 Paper clay, South Carolina.' North Carolina kaolin.' Silica 46.62 45.02 44.23 45.70 Alumina . . . , , 38.98 38.98 38.92 40.61 Ferric oxide .81 .77 2.31 1.39 Lime ... .69 1.39 Magnesia .10 .07 Tr. .09 Moisture. . . . .35 Ignition or total water 12.30 13.58 12.90 8.98 Alkalies .50 2.82 Titanic oxide .85 1.21 Zinc. .03 .12 Potash .26 .30 Soda .55 .26 100.00 100.11 100.25 100.39 i South Carolina Geological Survey, series 4, Bulletin 1, 1904, p. 62. - South Carolina Geological Survey. 3 North Carolina Geological Survey. Now as to test by analysis: "There are, however, many physical properties which the ultimate analysis does not explain, because they are dependent largely on the mineralogical composition." 1 Two clays might show practically the same chemical analysis and one be much whiter than the other, enough so as to make the one commercially valuable where the other could not find a market. The accompanying exhibits will relieve from all doubt that there is a difference, for practical purposes, between the English and American clay. Exhibit shows 10 grains of ordinary English clay in a certain quantity of distilled water. Exhibit D shows 10 grains of high-grade domestic paper clay in the same condition. On shaking these bottles it is apparent that the English clay is held in suspension to a far greater degree than the domestic. This goes to show, first, that the English clay is finer in grain than the domestic; second, it has less grit or free silica. The same experiment tried with washed domestic clay as against the English still shows the English is far superior. Exhibits E and K. samples of English and domestic paper clay, respectively, further show that the domestic clay is harder, shorter, leaner, more yellow in color. The sample of English clay is better color, and is termed by the miners fat, long, or greasy, 2 and possesses a higher degree of plasticity than domestic. Plasticity is an important feature in clay for paper making. Thus it is apparent that no expert knowledge is necessary to distinguish the difference between the two kinds of clay. By far the largest use of china clay is for paper making. Twenty-five years ago paper was made chiefly from rags and old papers. There was not then the need of the china clay, as the papers were easily finished. 'When ground wood and sulphite, on account of their lower cost, began to replace rags, a new need arose for china clay, to fill and finish these papers made from wood.' Without china clay the surface' was harsh and not printable. So that, while china clay was used to a small extent with the old rair papers, it lias now become an abs< >lu1e necessity for much of the paper made. Of all the china clay used in the United States in the year June 30, 1909-10, there were imported 240.881 short tons, of the value of $1.505, 779. 3 There was produced in the United States in the year 1909 paper clays 81 ,58C, short tons, of the value of $386,764. From these two sources practically all the clay used in paper making was derived. Of the kaolin there was produced in Xortli Carolina and other States 31,227 short tons, of the value of $241, 000. 4 It mav be well to state here that the North Carolina 1 North Carolina Geological Survey Bulletin No. 13, by Heinrich Hies, 1897, p. 30. 2 Rudolph V/au'ner. 1'h. I.)., professor of chemical technology at the University of Wurzburg. ' Statistics of the Clay-working Industries of the United States, 1990, U. S. Geological Survey, p. 67. Statistics of the Clay-working Industries of the United States, 1909, U. 8. Geological Survey, p. 65 SCHEDULE B. 525 PARAGRAPH 90 CHINA CLAY. kaolin and other kaolin, the residuary clay, of an average value of $7.72 per short ton at the mine, is used almost wholly in potting, and is far superior to the average paper clay, which sells for only $4.74 a short ton at mine. This domestic kaolin, owing to its ability to stand being fired by intense heat, has no equal for potting. English clays have to be fired much more slowly. To show that there is no competition between the kaolin and English clays in pottery, we have the added fact that it is advantageous to use the two different kinds of clay. In other words, the English clay is combined with the North Carolina kaolin to make the proper mixture. The following table is inserted with the idea of ascertaining how far the English clays are in competition with the domestic clays: (Estimated, 1909.) English clay, short tons. American paper clay, short tons. Book and coating 184,785 Potterv 29,566 Bleacheries . . 17,247 News paper 12,319 Ultramarine 2,464 News wall paper, and low-grade book 81,586 In book paper an average of 20 per cent of the furnish or raw material is English clay, in cover paper 20 per cent, in plate lithograph paper 25 per cent, in cardboard Bristol, 10 per cent. In coated paper 25 per cent additional weight of English clay is placed on the surface, besides the amount in the body of the paper. As was explained before, the ordinary paper is filled with English clay. The coated paper is also covered with English clay by means of rotary brushes, thereby giving it a fine finish, peculiarly adapted to the better class of woodcuts and other processes in printing. Take, as an example, the frontispiece or illustrated pages of our weekly or monthly magazines. Bleachers use this clay for filling, in flour sacks made of a coarse cotton, table oil- cloths, carriage covers, curtains, and for filling and whitening cloth. In this the quality needed in plasticity, freedom from grit and oxide of iron, and clay should be of good color. In ultramarine the requisite for a clay is that it should be highly aluminous, con- tain no ferric oxide, and be free from lime. The quantity of English clay imported in 1871 as compared with 1910 shows an increase from 13,081 tons in 1871 to 230,634 tons in 1910. 1 The present duty on this article is $2.50 per ton of 2,240 pounds. This is a tax on a raw material of 36.97 per cent ad valorem. From this tax the United States Govern- ment received a revenue of $578,086 in 1909-10. 2 With the present agreement with Canada, however, the Canadian finished product, paper made from wood grown on private lands, costing 4 cents a pound and under, is admitted free into the United States. Canada pays no duty on raw material. COMPETITION. In the hearing before the Ways and Means Committee in 1908 the committee made much of the point that if the duty were taken off china clay the clay importers and the paper manufacturers and not the consumer would profit. This is^ improbable. In the first place there is competition among the paper makers in the United States, as evidenced by the yearly bids on Government contracts for paper, 3 viz: Early in 1910 thirty-six concerns, embracing practically all the leading paper makers in the United States, or their agents, tried to secure these contracts. Second, and even more conclusive, is the competition with the finished product of Canada, now admit- i Department of Commerce and Labor, U. S. Bureau of Statistics. - Department of Commerce and Labor, U. S. Bureau of Statistics. Imports entered for consumption, years ended June 30, 1909 and 1910, p. 965. Taken from United States advertisement for bids on paper. 526 TABIFF HEARINGS. PARAGRAPH 90 CHINA CLAY. ted free. With her forests of spruce and unlimited water power running through the same forests and with French Canadian labor, Canada is considered the most advan- tageous country in the world for the manufacture of paper. Already two of our largest paper-making concerns have made purchases in Canada in preparation of manufacturing there. AMERICAN CLAY AND PAPER INDUSTRIES. True it is that the American clay industry is a large one, if stoneware clay, brick clay, slip clay, paper clay, etc., are included. The total quantity mined (1909) was 2,159,647 tons of the value of $3,449,707; average value per ton, fl.60. 1 The paper- clay production of 81,586 tons and the kaolin mining of 31,227 tons of the total value of $627,824 is, however, a small part of the whole United States clay industry. Fur- thermore, clay is reduced from its native state by comparatively few workmen, so that the total amount of labor involved in the United States paper-clay and kaolin industries is small. In 1905, 2,128 men were employed, with wages of $898,700, in the industry, all kinds kaolins and earths included, 2 whereas the number in the paper industry for the same year was 65,964, with wages of $32,019, 212. 3 The total value of paper products in 1909 was $267,869,000, 4 and the total number of wage earners was 75,998 for 1909. 5 Of this total value the following are some of the items. [Department of Commerce and Labor, Bureau of Census, pp. 4 and 5, Apr. 27, 1911.] Book paper $42, 803, 000 Cover paper 1, 761, 000 Plate lithograph 821, 000 Cardboard 'bristol 3, 352, 000 Coated paper 9, 414, 000 It is therefore apparent that the United States china-clay industry is of small account in comparison with the paper industry. ARGUMENT. We shall make a comparison from the point of view of public policy of the probable injuries and benefits that will arise from the removal of the duty. There is no substitute for English clay in the better classes of paper. Exhibits, and the fact that American paper manufacturers have paid the duty to use English clay to such a large extent, are proofs of this. The possible injury to domestic clay is limited to its use in low-grade papers. The lowest grade English clay at our seaboards, duty free, costs but little more than the best domestic paper clays, but the size of the total output, the value involved, and the amount of labor in our paper clay are insignificant when compared with the injury to nvr paper industry. The probability of such injury to the domestic clay industry is a reason that must be met. A seco.ul reason against removal is that the United States can not afford to lose an annual revenue of $578,086. This reason is in theory indefensible, since the revenue is derived from a duty on a raw material. The practical answer to both of the above reasons is the chief argument for removal of duty, viz: The free admission of the Canadian finished product, coupled with the present United States duty on raw material, will drive our paper makers to Canada. The natural advantages of Canada for paper making are considerable. Our paper makers already buy a large amount of Canadian wood pulp. The streams there are well located. French Canadian labor is cheap. The combination of the natural advantages of Canada and the artificial disadvantage of the United States paper makers caused by a duty on a raw material has already forced two of our largest paper makers to purchase lands in Canada for manufacturing purposes. Public policy demands the immediate removal of the duty on china clay. i U. S. Geological Survey. Statistics of the Clay-working Industries in the United States in 1909, p. 65. > Department of Commerce and Labor, Census of Manufactures 1905, United States, p. 84. Department of Commerce and Labor, Census of Manufactures 1905, United States, p. 87. Department of Commerce and Labor, Paper and Wood Pulp Statistics, published Apr. 27, 1911, p. 5. * Department of Commerce and Labor, letter from Acting Director W. H. Hathaway. SCHEDULE B. 527 PARAGRAPH 90 CHINA CLAY. Finally, and in behalf of the paper makers, appeal is made that, in the drawing of the bill to go before the next House, you will not tax a raw material, while admitting finished product free. That is the hardship now being imposed on our paper makers, and we ask relief from this situation. JOHN RICHARDSON. JOHN RICHARDSON, Jr., Attorney. BOSTON, MASS., November 17, 1911. [Supplementary brief of John Richardson Co., John Richardson, John Richardson, jr., 201 Devonshire Street, Boston, Mass.] This supplementary brief is filed in reply to the following requests for information made by Hon. O. W. Underwood, chairman, in notice of tariff hearings, 1913, dated Washington, D. C., December 11, 1912: (1) State by items and paragraphs the changes in duties recommended, assigning in each instance reasons for recommendations: Paragraph 90, act of 1909, Payne-Aldrich bill removal of duty from China clay or kaolin. Reasons: First, the damage done by the duty to the great paper industry, employ- ing over 65,000 men; 1 second, the comparatively insignificant damage by removal of the duty to the southern clay industry. As to the first point, paper making is among the largest industries of the United States. Our makers of the better grades of paper must have English clay. The duty upon this raw material is now over 36 per cent. From this tax the United States Government receives annually a revenue of over half a million dollars. 2 That revenue i? in the end paid by the paper makers. Canada's facilities for the manufacture of paper excel those of the United States. China clay is admitted free in Canada, her Eaper conies here free. Already a number of American paper makers have bought ind there. Each dollar collected as duty means a gain of $1 to the paper maker who goes to Canada. Now, for the second point the comparatively insignificant damage to the domestic clay industry. The total value of domestic paper clay produced in 1909 was less than $400,000. 3 Under 1,500 men are employed. 4 From 1905 to 1910, in spite of the duty, the increase of English clay imported over the increase of domestic clay produced was 938 per cent. * This duty, then, borne by the paper makers,' of over half a million dollars a year, protects an industry with a total annual output of less than $400,000, and employing under 1,500 men. For additional reasons, see original brief filed herewith. (2) Estimate the increase or decrease in imports by paragraphs and items, which would result from suggested modifications of duties: Since 1907 the world -wide demand for English clay has exceeded the supply. Makers of fine paper can not get enough now. In the near future removal of duty will not increase importation beyond the present rate of increase, which is less than needed by the growing paper industry. The old mines are being developed and new ones opened. The removal will probably ultimately accelerate the increase of output and of importation. We are unable to estimate when, if ever, the supply will overtake the demand. (3) Explain methods or experience relied upon in making estimate: Thirty years' experience in the china clay business. (4) Suggestions as to changes in phraseology of present tariff law: China clay or kaolin free. (5) Suggestions as to the betterment of the administrative features of the present law: We shall not make any suggestions, in view of the fact that we think the whole duty ought to be removed JOHN RICHARDSON. JOHN RICHARDSON, Jr. 1 Department of Commerce and Labor. Census of Manufactures, 1905, United States, p. 87. 3 Department Commerce and Labor, United States Bureau Statistics, Imports entered for consumption, years June 30, 1909-10, p. 965. Also our original brief, p. 11. 8 Geological Survey Statistics of the Clay- Working Industries for 1910, p. 45. Department of Commerce and Labor, Census of Manufactures 1905, United States, p. 84. Two thousand one hundred and twenty-eight men includes all kinds of kaolins and ground earths. Our figures, 1,500, are high. * The figures for these two items are to be found on, respectively, pp. 45 and 50, United States Geological Survey for 1910, Statistics of the Clay- Working Industries of the United States. 528 TARIFF HEABINGS. PARAGRAPH 90 CHINA CLAY. STATEMENT OF MR. PETEE W. MORGAN, ON BEHALF OF THE AMERICAN CLAY PRODUCERS' ASSOCIATION, MACON, GA. The CHAIRMAN. Mr. Morgan., what section do you appear in refer- ence to ? Mr. MORGAN. Schedule B, paragraph 90. Mr. Chairman, I wish to read what I have to say, because I am not accustomed to public speaking. [Reading:] I represent the American Clay Producers' Association. This association is not organized for the regulation of prices, the division of territory, or for any unlawful purpose, but simply for the purpose of taking united action in such matters as may affect the general welfare of the constitutent members and the china clay industry. We are all engaged in the china clay or kaolin industry. Our properties and works are located in the States of Pennsylvania, New Jersey, Maryland, North and South Carolina, Georgia, and Florida. There is a duty of $2.50 per gross ton charged on imports of clay classified under Schedule B, paragraph 90. The deposits of clay from which our industries make their material are known as sedimentary clays and are found under surface overburdens ranging from 10 to 50 feet, every ounce of which has to be removed. No practical method of underground mining for this material has been found. The thickness of the clay beds vary from 10 to 20 feet, and it may be calculated that about 4 cubic yards of surface has to be moved for each yard of clay mined. Some of these clays are sufficiently pure to be shipped crude after slight prepara- tion, selection, and drying, but the great majority have to be refined by levigation in water, and in a number of cases a careful blending of materials is required to produce a merchantable commodity. The industry is a comparatively young one and has involved a considerable invest- ment of money and an exhaustive amount of energy in every department for the pur- pose of developing the most economical methods of producing the clays suited for the different commercial uses. The members of our association have all gone through exasperating experiences, have devoted much time and capital to the working out of the numerous problems connected with their business. Few of them have reached the point where the re- turns are commensurate with the investment of time or money, and we therefore urge that your committee allow the duty to remain as it stands at present. Several good reasons may be presented for your favorable consideration of our request: First. This is, comparatively speaking, an infant industry in the United States, and has been instrumental in developing natural resources in various sections of the country, particularly in the South. Second. The domestic production of Kaolin, or China clay, has materially reduced the price of the imported article. It is within the memory of men still engaged in the business that domestic china clay has sold for as much as $15 per ton at the mines. The present price for the same articles is from $4 to $5 per ton. The miners and re- finers of this country are compelled to fix their prices to a large extent on what the foreign clays of similar qualities are offered at. The paper makers, who are our largest customers, will, in all probability, ask for the removal of the duty on clay, and they or the importers will not suggest to your honorable committee that the domestic production has been the means of reducing the cost of both American and foreign clays. The present price of our product ranges from $4 to $6 per ton at the mines, and the members of this association beg to submit for your consideration the fact that if the duty of $2.50 is removed and it should appear that our prices have to be reduced to meet the reduction in cost, we should inevitably have to go out of business, there being no such margin of profit as would permit us to operate. Third. Our mines are located at points quite removed from the places of utilization, and while we have no ground for complaint regarding cost of transportation, we are at, a marked geographical disadvantage as compared with our trans-Atlantic competi- tors who can ship from Cornwall to New York, Philadelphia, or Portland at lower freight rates than have to be paid by us. The two first-named cities are both large markets for clay, and Portland is the gateway to the paper mills of the State of Maine. Fourth. By reason of the heavy movement of produce to the seaboard and in con- sequence the number of empty cars available to be returned west, the railroads have SCHEDULE B. 529 PARAGRAPH 90- CHINA CLAY. made special rates for imports to be carried from abroad to western consuming points, and foreign clay seems to have been especially favored in th.s respect. Our repre- sentations to the Interstate Commerce Commission for relief in this regard are met by the response that their duty does not seem to lie in the direction of advancing rail- road rates. We cite as example that from New Orleans to Chicago a rate as low as 7 cents per 100 pounds has been quoted on imported clay, while from our mines, which are several hundred miles nearer Chicago, the rate is 21 cents per 100 pounds. For your further information we may say that clays can be shipped from Fowey in Corn- wall to Chicago via Philadelphia, Boston, or Portland for approximately the same freight rate which we have to pay from Georgia, South Carolina, and Florida. To some other consuming points the difference in favor of the importer is even greater. Fifth. The cost to us of fuel, engine supplies, tools, etc., are all higher than are paid for similar things abroad, while for labor we have to pay negroes higher wages than are paid to first-class unskilled laborers at the English mines. For superintend- ents and foremen we pay nearly twice the price paid in England. The disadvantage at which we are placed in regard to labor is not diminishing by any means, and in respect of this one item at the present moment the English miners can get labor at prices 50 per cent less than we nave to pay. We find it difficult to secure sufficient labor with an advancing scale of wages. Labor constitutes at least 80 per cent of the cost of this product. Sixth. The Government at the present time derives an annual revenue of approxi- mately $600,000 from the duty on this commodity, and we believe that if this duty were removed entirely, or in part, that such a reduction would produce so infinitesimal a diminution in the cost of articles into the manufacture of which it enters as to give no benefit to consumers. We would further submit for your consideration in our favor that we believe that in the clays of this country we will and are striving to find all the qualities of material necessary to supply the home market; that the initial expenses of investigation and test are all very costly, and with prices at the present low level there is little margin of profit, while if we are compelled to submit to a reduction the enterprises must be inevitably strangled and abandoned. The foregoing is subscribed by the Georgia Kaolin Co., Mclntyre Kaolin Co., Ameri- can Clay Co., Albion Kaolin Co., the Edgar Bros. Plastic Kaolin Co., the Harris Clay Co., Atlanta Mining Clay Co., Edgar Bros. Co., Immaculate Clay Co., and Philadel- phia Clay Co. BRIEF OF PERKINS GOODWIN CO., NEW YORK CITY. NEW YORK, January 4, 1913. COMMITTEE ON WAYS AND MEANS, Washington, D. C. GENTLEMEN: We desire to invite your attention to the discrimination existing in paragraph 90 of the present tariff (Schedule B Earths, earthenware, and glassware) between clays or earths wrought or manufactured provided for at $2 per ton, and china clay or kaolin provided for at $2.50 per ton. The term "china clay," we believe, was first used in connection with certain grades of clay found in England, largely in Cornwall and Devonshire, which were discovered to be especially adapted for making pottery or china. The term "kaolin," as we under- stand it, was originally given to clays having similar uses, found in Austria. By an extension of the trade understanding there are now English kaolins as well. The only unwrought or unmanufactured clays, which are also provided for in the same para- graph, of which we have any knowledge, are what are technically known as 'ball clays." These are crude, inferior pottery clays usually imported in lump form and always unwashed. Clay which has been washed, dried, and ground in other words, advanced beyond the crude, unwrought condition in which it is taken from the earth has always been held to be dutiable as a wrought or manufactured clay. The Treasury Department so ruled many years ago before the Board of General Appraisers was estab- lished (see Treasury Decisions, 9249), and this ruling has never been reversed. In consequence all clays, including china clay and kaolin, excepting ball clay, are in fact wrought or manufactured clays. To be used as a china or pottery clay the clay must possess certain burning qualities. If the clay does not possess these qualities which specially adapt it for pottery pur poses (and this frequently happens with clays coming from the same district and the locality), it ran ho used for other purposes, such as paper making, filling of 78959 VOL 113 34 530 TARIFF HEARINGS. PARAGRAPH 90 CHINA CLAY. cotton cloth, or linoleum manufacture. To apply the term china clay to such clays is a misnomer. The grade of wrought or manufactured clay or kaolin used in making high-grade papers, but nevertheless not possessing the burning qualities for pottery uses, is frequently superior to china clay or kaolin used for pottery purposes. There is no sound reason for tariff discrimination between these articles, and it tends to confusion. Prior to the Dingley law such discrimination did not exist. We append the pertinent provisions of the tariff laws of 1883, 1890, 1894, 1897, and 1909 for the information of the committee. 1883. 98. All earths or clays, wrought or manufactured, not specially enumerated or provided for in this act, three dollars per ton; china clay, or kaoline, three dollars per ton. 1890. 98. Clays or earths, unwrought or unmanufactured, not specially provided for in this act, one dollar and fifty cents per ton; wrought or manufactured, not specially provided for in this act, three dollars per ton; china clay, or kaolin, three dollars per ton. 1894. 82. Clays or earths, unwrought or unmanufactured, not specially provided for in this act, one dollar per ton; wrought or manufactured, not specially provided for in this act, two dollars per ton; china clay or kaolin, two dollars per ton. 1897. 93. Clays or earths, unwrought or unmanufactured, not specially provided for in this act, one dollar per ton; wrought or manufactured, not specially provided for in this act, two dollars per ton; china clay or kaolin, two dollars and fifty cents per ton. 1909. 90. Clays or earths, unwrought or unmanufactured, not specially provided for in this section, one dollar per ton; wrought or manufactured, not specially pro- vided for in this section, two dollars per ton; china clay or kaolin, two dollars and fifty cents per ton. Inasmuch as there is a little real competition between foreign clays and domestic clays by reason of the great difference in quality, and inasmuch as English wrought clays are the raw material especially of paper and linoleum manufacturers, we would urge a reduction in duty to stimulate importation and lead to increased revenue. Whatever the rate fixed by the honorable committee and by Congress, we especially urge a return to the principle found in the Wilson Act of 1894 and prior tariff acts, and that the same rate be imposed upon wrought clays and china clay, or kaolin. A clause providing: Clays or earths, unwrought or unmanufactured, not specially provided for in this section. per ton; wrought or manufactured, including china clay, or kaolin, not specially provided for in this section, per ton. Respectfully submitted. PERKINS GOODWIN Co., By S. GOLDMAN, Secretary. PROTEST AGAINST RATE OF DUTY ON CHINA CLAY. THE CHAMPION COATED PAPER Co., Hamilton, Ohio, January 4, 1913. Hon. Mr. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington. D. C. DEAR SIR: We are advised that you will have a hearing on Wednesday next regard- ing the duty on English china clay. There is no substitute in this country for this clay. It is a decomposed granite and it is entirely different from the clays in this and other countries. We are paying a very high tax on our largest raw materials, while the finished product comes in free of duty from ( 'anada. We therefore hope that you will use your influence to see that this duty is eliminated. Yours, truly, THE CHAMPION COATED PAPER Co., By PETEH G. THOMSON, Vice President. SCHEDULE B. 531 PARAGRAPH 9 O FLUORSPAR. FLUORSPAR. STATEMENT OF C. S. NUNN, ESQ., IN BEHALF OF THE FLUORSPAR INTERESTS. Mr. NUNN. If the committee please, you have been good enough to assign to several fluorspar producers an opportunity to be heard before you, but to conserve your time they have agreed I may present the matter, feeling that a short tune will suffice. The CHAIRMAN. To which paragraph do you desire to address yourself? Mr. NUNN. Paragraph 90, the last phrase of it, with reference to fluorspar. The CHAIRMAN. You may proceed. Mr. NUNN. For the information of the committee I will say that fluorspar is a mineral product, commercially mined in America in southern Illinois and western Kentucky, a relatively small district. It is a small industry. I think perhaps 150,000 tons will cover the total American consumption. Some 85,000 to 100,000 tons is the American production. The other is imported from Great Britain Durham and Derbyshire. Over 80 per cent of this American con- sumption is used in the manufacture of steel by the open-hearth process. It is the only method of steel manufacture in wnich fluor- spar is used. It takes about 8 to 10 pounds of fluorspar to make one ton of finished steel. Prior to the Payne bill there was no tariff on fluorspar. Until 1904 we needed no tariff on fluorspar. The fact is that was really the beginning of what we call the industry on a large scale. The growth of the open-hearth steel process and the supplanting of the Bessemer process has increased the use of fluorspar, and to supply that there was a concern named Blackwell & Co. which dis- covered that in Great Britain there were immense dumps of waste fluorspar piled up there at old abandoned lead mines. It was a waste proauct at the tune the lead was mined. There are millions of tons of it, as we are informed. The mining of it was paid for years and years ago. Blackwell & Co. bought the dumps at an insignificant sum. It is close to the coast. They began to load it in vessels and bring it over here as ballast, free of duty; the prices at Baltimore and Philadelphia being $3 a ton, whereas unless we could get $6 a ton for it aboard the cars in Kentucky and Illinois we could not live. From that time, 1905, until 1909, the production of American fluorspar decreased from 50,000 to about 30,000 tons per annum, and trie importation of British fluorspar increased proportionately. Mr. HARRISON. What are the importations ? Mr. NUNN. In 1911, which are the last figures I have, the importa- tions were 33,000 tons, producing to the Government a revenue of a little over $99,000. Mr. HARRISON. About 50 per cent ad valorem? Mr. NUNN. No; a specific rate of $3 a ton. Mr. HARRISON. But the ad valorem equivalent? Mr. NUNN. That is the equivalent; yes, sir. 532 TARIFF HEARINGS. PABAGBAPH 90 FLTTOBSPAB. . Mr. HARBISON. The ad valorem equivalent of your American price, and about 100 per cent of the value of it the foreign price at the customhouse? Mr. NUNN. It was first sold in the United States to the steel people, at $5 per ton for the flux fluorspar aboard the cars, when we could sell it at all. The fact is our trade had diminished until we were really not in the market. My company had practically suspended. I am president of the Kentucky Fluorspar Co., and we were the largest of the Kentucky producers. The effect of this tariff has been to increase the price $1 per ton. We sell it on board the cars at Marion, Ky. , at $6 per ton. That increase of $1 per ton in the price of fluorspar has increased the cost of steel in the sum of one-half cent per ton to the steel manufacturer. It takes a pretty high-power glass to discover what increase that is in the cost of finisned steel products to the final consumer. As we see it, the imposition of that duty hurts no one. It has been the means of saving the industry in America. It has had this fur- ther effect: There are some 600 or 700 men employed in our county and in that district. Before 1909 they were getting from $1.50 to $2 per day wages. The average wage there now, not counting foremen, is about S2.50. It had the further effect of increasing the production of American fluorspar from 35,000 tons in 1908, 1 think, to 87,000 tons in 1911. Mr. JAMES. What is the total amount of output of fluorspar in the United States? Mr. NUNN. In 1911 the American production was 87,000 tons. The American consumption was some 130,000 or 140,000 tons, there having been 30,000 to 50,000 tons of fluorspar imported annually since the Payne Tariff Act, producing a revenue to the Government of from $90,000 to $130,000, or $140,000 annually. Feeling that the imposition of this duty does not materially injure anyone and is of great value to us, we hope the committee will find it consistent with their view of the facts and conditions to leave that duty remain as it is. Having thus briefly presented the matter in this way, I desire to present it more in detail in the form of a prepared statement. The CHAIRMAN. You may dp that. Mr. NUNN. The statement is submitted in support of the present duty of $3 per ton fluorspar, as established by the last item in section 90 of Schedule B of the tariff act of August 5, 1909, in the following words: "Fluorspar, S3 per ton." The Department of me Interior, United States Geological Survey, issued reports on the production of fluorspar for the years 1910 and 1911. An earlier report was issued in 1905. The report for the year 1912 has not yet been published. These reports show 42,488 tons of fluorspar imported in 1910 and 32,864 tons imported in 1911. On this basis the revenue to the Government was $127,464 in 1910 and $98,292 in 1911. This statement is submitted on behalf .of the producers of fluorspar in the States of Illinois and Kentucky, who have been engaged in the mining of fluorspar for an extended period of time in these States. The main purpose of the argument is to convince the committee, if SCHEDULE B. 533 PARAGRAPH 00 FLUORSPAR. possible, first, that any change in this tariff would not reduce the cost of living; second, that while the revenue comparatively is not large, the duty is a clear application of the principle of a revenue tariff ; third, that any change m the tariff would destroy in this country the business of mining fluorspar, an essential ingredient in the process of making steel by the open-hearth method; fourth, that there is no real demand for such a change, since financial benefit from such a change would flow into the pockets of the foreign producer or importer. In regard to the nature and commercial uses of fluorspar, the fol- lowing quotations are taken from the bulletin of the Department of the Interior for the year 1911 : Fluorspar or fluorite, chemically calcium fluoride (CaF ? ), consists of calcium and fluorine in the proportions of 51.1 to 48.9. The mineral is crystalline, only slightly harder than calcite. Fluorspar, associated with other minerals, has a broad distri- bution geographically and a wide range geologically. The deposits thus far ex- ploited in the United States are, however, confined to the States of Arizona, New Mexico, Colorado, Illinois, Tennessee, and New Hampshire. Fluorspar is a mineral of relatively low value as compared with metallic ores mined under similar conditions. Under the most favorable conditions, therefore, the margin of profit can never be expected to be large, and it requires exceptionally good man- agement to conduct any spar mining operations profitably, unless the veins are thick and of uniformly good quality. Fluorspar is used in the manufacture of glass and of enameled and sanitary ware, in the electrolytic refinmg of antimony and lead , the production of aluminum, the manu- facture of hydrofluoric acid, and in the iron and steel industries in which it is used as a flux in blast furnaces, and in basic open-hearth steel furnaces. It is estimated that about 80 per cent of the American fluorspar output, namely, in the form of gravel spar, is consumed in the manufacture of basic open-hearth steel. The use of fluorspar is increasing in practically all of these industries. The western market for fluorspar ia more limited than that of the Central and Eastern States, but it is nevertheless in- creasing. Recently the iron and steel works of Irondale, Wash., and in Shasta County, Cal., have been enlarged. Supplies of spar mined in the West have heretofore not been sufficient to supply the western market for more than a few months at a time . This has been due to several conditions, the most important of which is that most of the western spar thus far pro- duced has not been of so high a grade as that produced in the Illinois-Kentucky dis- trict. Fluorspar for iron and steel making should carry at least 85 per cent calcium fluoride, and preferably it should be purer. For most other chemical uses it should contain from 95 to 98 per cent calcium fluoride. There are two main grades of fluorspar sold on the market. The first is known as "ground" fluorspar, and contains 96 per cent or more calcium fluoride. This grade is sold to be used principally in the manufacture of glass, of enameled and sanitary ware, the pro- duction of aluminum, and the manufacture of hydrofluoric acid. The second grade of fluorspar is known as "gravel" fluorspar, and is sold almost entirely to the steel mills and used as a flux in the open-hearth furnaces. This grade should contain 85 per cent or more in calcium fluoride. Gravel fluorspar amounts to more than 80 per cent of the production, and the average price for domestic fluorspar of all grades in 1911 was only $7.02. It is therefore manifest that the fluorspar business can not be successful unless this grade can be marketed at a profit. As a flux fluorspar when applied even in small quantities to the metal charge in the furnace liquefies the charge, renders it readily fusible, and thus allows the impurities to escape. According to our information, the chemists 01 the steel companies have never 534 TARIFF HEARINGS. PARAGRAPH 90 FLUORSPAR. found a practicable substitute for fluorspar as a flux in the process of making steel in an open-hearth furnace. In regard to the domestic production, its source and conditions, the Government report for the year 1911 contains a table showing the sources of fluorspar production for the years 1910 and 1911, which is as foUows : Tons. 1910. Illinois..... 27,302 Kentucky 17,003 Other States 5, 122 . Total 69,427 1911. Illinois 68,817 Kentucky 12,403 Other States 5, 828 Total 87,048 As shown by the foregoing table, the mines of Illinois and Ken- tucky produce more than 92 per cent of the fluorspar produced in this country. These mines are located in Crittenaen and Livingston Counties in western Kentucky and in Hardin and Pope Counties in southern Illinois. The district is divided by the Ohio River. It is a mining industry which requires extensive and costly develop- ment and an intricate equipment of mining, crushing, and sorting machinery. No industry of this class offers a more precarious or uncertain investment. The same necessity for the imposition of the duty of S3 per ton against the importation of foreign fluorspar, which rate was established in the so-called Payne-Aldrich tariff act, exists to-day even more emphatically than it did at that tune. Encour- aged by the imposition of this duty, very large capital investments have been made to develop this new mining industry, especially in the States of Illinois and Kentucky. In 1905, prior to the imposition of the duty, the domestic produc- tion of fluorspar amounted to 47,170 tons. Just about this time the industry was struggling to establish itself, the imported fluorspar coming from England and Germany, in which countries it existed in large quantities, having been mined for from 100 to 200 years as the gangue or country rock in lead-mining operations in Durham and Derbyshire in England and in Saxony in Germany. Only since the adoption of the open-hearth or Bessemer-steel practice has fluorspar become an important article of commerce; that is to say, during the last 15 years. This accounts for the newness of the industry. The foreign- product was the waste of the lead mines, and as such was purchased by speculators for a mere trifle per ton and was shipped to this country as ballast until the passage of the Payne- Aldrich Act. and so successfully competed that in 1908 the domestic production did not exceed 3S.7S5 tons annually, a decrease of about 20,000 tons per year in three years. Meanwhile, large investments of capital had been made in the hope of so reducing the cost of production as to enable successful competition with the foreign product. These investments increased the burden on the production itself. The struggle was hopeless. Unsuccessful efforts were made to have the Treasury Department correct the classification of fluorspar, placing SCHEDULE B. 535 PARAGRAPH 90 FLUORSPAR. it in the list of manufactured or treated earths, which were subject to a duty. Had it not been for the duty of $3 per ton imposed by the present tariff law the industry in this country would have undoubtedly become extinct, and all the money invested therein would have been lost to the investors. As it is to-day, the industry can not be said to be on its feet. In the case of the Rosiclare Lead and Fluorspar Mines, encouraged by the protection it was assumed the duty would offer to the industry, new investments have been made to the extent of about one-third of a million dollars. It has been estimated that approximately $2,000,000 of new money has been spent in the devel- opment of this industry generally since the passage of the present tariff law. This is in addition to the original cost of the property and equipment at the time the dutv was imposed. It will be seen and readily understood that in no other mining industry, in which a bulky product such as fluorspar is mined, are so many difficulties met with, and if to these conditions are added the loss of any part of the present duty of $3 per ton it would not be possible to operate the mines except at a loss. This is due to a number of reasons, prominent among which are the following: (a) The character of the deposits and the great uncertainty as to the quantity available from any mine opening. After extensive shaft development and underground work, it is very frequently found that trie vein of fluorspar runs out, or in the language of the miners, "pinches out," or narrows down to such proportions that mining the product under such conditions is economically impossible, forcing the owner or lessee to seek the mineral in some other location, or subject himself to an immense expense in following up the "pinched out" vein in an effort to find the mineral in paying quan- tities at some more remote point. This condition of course is expe- rienced in gold and silver mining, but in these instances the value of the mineral sought offsets the cost of the extension work, a condition which does not obtain in the mining of fluorspar, a coarse material of relatively small value as compared to gold and silver. Unlike coal mining, again, it is impossible to estimate in advance what quantity of the mineral the property may contain. In the fluorspar districts of Kentucky and Illinois are numerous examples of fluorspar mines the working of which was economically impossible for the reasons stated. (6) The mines are generally located remote from railway transpor- tation facilities, necessitating all equipment being brought to the property at the highest cost of transportation and the product to be shipped at the same disadvantage. The precarious condition of the industry is so well known to the transportation compares that up to the present time none of them have been assured of a sufficient continuous supply to warrant the construction of tracks to the mines. This necessitates in the case of the Rosiclare Lead & Fluorspar Mines the operation of an expensive electric tram to the Ohio River and the use of a line of barges to transport the fluorspar from Rosi- clare to Shawneetown on the north, a distance of 38 miles, or to Gol- conda, 12 miles, and Joppa, 50 miles, on the south, along the Ohio River. In the case of the Fairview Fluorspar & Lead Co. the mill and mines are connected with the river by a standard-gauge railroad 536 TABtPP HEARINGS. PARAGRAPH 90 FLUORSPAR. track. Railroad cars are loaded at the mill, moved to the river, taken over a railroad cradle, and placed on railroad track barges. These barges and cars are transported by water 12 miles to Golconda, 111., where they are delivered to the Illinois Central Railroad Co. The same method is used to bring in railroad cars for loading. Since the tariff act of August 5, 1909, the railroad track has been extended to three of the four shafts. In other sections of Illinois and Kentucky the hauls are made by wagon from the mines to the nearest railway stations at a cost varying from $1.25 to $2 per ton. (c) The expense of eliminating the by-products, such as lead and zinc ore, which deposits occur in varying quantities throughout the veins, also impurities such as silica and calc-spar (calcium carbonate), is very costly and requires elaborate machinery and skilled labor. The lead that is recovered offsets only in a small per cent the cost of its elimination. The spar must be freed of these impurities before it is of any economic value. Lead entirely destroys the value of fluorspar as a flux in the manufacture of steel, and as these impurities occur in varying quantities the cost of production is never constant, but varies between wide limits. (d) Fluorspar occurs in veins running almost perpendicular, and as the mine is developed the product must be brought from the lower levels at a greatly increased cost, and here again the varying width of the vein, from 12 to 15 feet in thickness to nothing, and the fre- quent occurrence of pinches, make it impossible to compute in advance the cost of production in any shaft or opening. (e) Many of the veins are below the level of the Ohio River, which flows from one-fourth of a mile to three-fourths of a mile from the different shaft openings on the Rosiclare and Fairview properties. The seepage of water through the overlying strata, at the time of the flooding of the Ohio River, forces a complete suspension of operations and requires all available energy to keep the mines from flooding. This condition is of regular annual occurrence, but it frequently happens in addition, during a wet season, that the breaking through of a water- course into the soft overlying earth formation causes the mine to become flooded to a very serious extent. (jO Extensive areas of the vein lie between mud or earth walls, which, becoming saturated with water through seepage, bursts through the thin vein walls, and causes what is known as "mud runs," which occur with such frequency as to constitute one of the greatest dan- gers in operating fluorspar mines. It has taken, in many instances, weeks and sometimes months to recover from a mud run, and has entailed very heavy money loss, besides great damages to the mines and machinery. (g) The precarious transportation via the Ohio River, from the loading tipple of the mines to the railway terminals at Golconda, Joppa, and Shawneetown, is due to two causes: First. The lack of suflicient water in the river channel during the dry season in the summer months to permit the transportation of heavily laden barges over the shallow river bars between the shipping point and the railway terminal, a condition which varies in duration from a few weeks to two or more months each year. Owing to the effort of the Rosiclare mines to operate under these conditions, heavy SCHEDULE B. 537 PARAGRAPH 90 FLUORSPAR. losses are sustained by the sinking of barges through fouling on the river bars. Second. The impracticability of shipping fluorspar during the winter months of January and February, when the Ohio River is at tunes frozen and impassable to navigation. (Ji) The difficulty of maintaining a sufficient number of skilled mechanics, miners, and laborers to insure the regular operation of the mines is a serious problem. In order to keep a sufficient force at the mines it is necessary to insure to the miners continuous work, regardless of the condition of the water hi the mines and the interrup- tion of transportation, or the fluctuations in the supply and demand for fluorspar. This serious labor condition is due to the isolated location of many of the mines and to the fact that there is no other industry in the neighborhood other than the fluorspar mines. In connection with the labor problem the following statement should be given full consideration: The labor used in the handling of the English fluorspar deposits, from which the foreign supply used by American consumers is derived, is of the lowest grade and is paid at a wage of from 3 \ to 4 shillings per day. No skilled labor is employed in the handling of the foreign product. In the case of the domestic industry the conditions are different. The lowest scale of wages paid at the Rosiclare and Fairview mines is $1.65 per day, or twice as much as that paid to the English laborers, whereas over 50 per cent of the employees at these mines receive wages of from $2.50 to $5 per day as skilled laborers. The English spar, being a waste product, is treated in no other way than by being thrown with shovels against an inclined screen, after which the separated product is shoveled on board cars and dumped into the holds of the vessels to be trans- ported to this country as ballast at the very lowest freight rate. The foregoing facts will give the committee an indication of the hazardous character of this mining and the extraordinary expenses and difficulties attendant thereon. This fact is fully recognized by the Interior Department at Washington. In the report for 1910 it is stated as follows : Under the most favorable conditions, therefore, the margin of profit can never be expected to be large, and it requires exceptionally good management to conduct any spar-mining operations profitably, especially in the Western States. Conclusions. The exploration for and the development of fluorspar deposits under present conditions in. the Western States can not be said to offer attractive profits. Nevertheless the market for fluorspar is growing, and where deposits are found so situ- ated that the freight rates do not hold down the price to a profitless level and the cost of haulage does not further wipe out all chances of gain the development of such deposits should be encouraged. The milling of fluorspar offers rather difficult problems, for, unlike most ores, the bulk of the product must be saved, and the waste which must be eliminated consti- tutes relatively a small percentage. In addition, the separation of the lead and zinc from the fluorspar is difficult, particularly where such small percentages of the former minerals are present. Yet it is essential that they be almost completely removed, since the presence of sulphide ores renders the fluorspar of little value as a flux in steel making. On the other hand, the methods of mining are efficient and modern. Compared with the cost of mining other ores under somewhat similar conditions in the Western States, the cost of mining is not high. Local labor is employed entirely. The mines of the Fairview Lead 538 TARIFF HEARINGS. PARAGRAPH 90 FLUORSPAR. & Fluorspar Co. and the Rosiclare Lead & Fluorspar Mines together employ about 500 men. As to the sources and conditions of foreign production I would say that imported fluorspar is of the unground-gravel grade, is sold entirely to the steel companies as a flux for open-hearth furnaces, and comes from Durham and Derby in England, where it is found in waste dumps of abandoned lead mines. This imported fluorspar is not mined, but is screened from these old dumps, transported a short distance to the coast, transferred to steamers, and is brought to this country as ballast at a nominal freight rate. The cheap conditions of producing and transporting English fluorspar are shown by the fact that in 1910 the total fluorspar produced in England was valued at only $1.63 per ton, and in 1911 the value of this English fluorspar on our seacoast was only $2.46 per ton. The facts are stated in the last report of the Interior Department for 1911, and are as follows: The production of fluorspar in England has an important bearing on the industry in the United States, for practically all the competing material is imported from that country. ' * According to the Official Report of Output of Mines and Quarries, issued by the British Home Office, at London, in 1910, there were 61,621 long tons produced, valued at 20,678 ($100,629), or $1.63 per ton, as compared with 42,483 tons, valued at 16,029 ($78,005), or $1.84 per ton, produced in 1909. * * * As is well known, a large proportion of the fluorspar produced in England is ob- tained by screening from waste dumps of old lead mines. * * * In view of the close correspondence between the estimated cost of production of spar from mine waste and the value of the output given by the British official reports, it is evident that the greater part of the fluorspar produced at present in England is obtained from mine dumps. 4. In regard to the competitive conditions without a tariff: Fluor- spar presents, therefore, not a case of competition between American and foreign labor, but presents a case where the domestic product, produced under the usual mining labor cost, is compelled to com- pete against a similar foreign product where no labor at all is required to mine it or put it on the market and no cost incident except mere loading and transportation. Under such circumstances it is easy to understand why the domestic product could not compete with the English product in the Pittsburgh field or east thereof. The market was in the hands of the foreign producer. The situation was described briefly by the Department of the Interior in the report for 1911, as follows: Before August, 1909, fluorspar was imported into the United States duty free, and the full statistics of importation were not given before that date. Large quantities of gravel spar, produced at a low cost from the tailings of lead mines and from the gobs in abandoned mines in England, have been shipped to this country as ballast at a very low freight rate. The material thus produced is high in silica and is almost entirely consumed by open-hearth steel makers. Before 1909 spar from England competed with American fluorspar as far west as Pittsburgh and practically fixed the market price at that point. 5. Taking up the matter of foreigner's profit without a tariff: The American consumers, to wit, the steel companies, did not receive the real benefit of such conditions. The English producer or importer pushed the price to a point just below a figure which could profitably be met by the domestic producer. In view of these competitive conditions, the difference in cost of production and transportation, SCHEDULE B. 539 PARAGRAPH 90 FLUORSPAR. the foreign product was sold in and east of the Pittsburgh field at an abnormal profit. 6. Situation of domestic producer without a tariff. Under such circumstances there was no profit in producing domestic fluorspar. The result was a complete failure to develop domestic resources. There was no increase in domestic output during the seven years prior to 1909. Domestic production amounted to only about two-fifths of domestic consumption in 1909. The following table is taken from the report of the Department of the Interior, 1911, and shows the annual production of fluorspar since 1905: 1904 . 36,452 1905 57,385 1906 40,796 1907 49,486 1908 38,785 1909 50,742 1910 69,427 1911 87,048 1895 4,000 1896.. 6,500 1897 5,062 1898 7,675 1899 15,900 1900 18,450 1901 19,586 1902 48,018 1903 42,523 About 10 years ago, as the open-hearth method began to be more widely used by the steel companies, in preference to the Bessemer method, there arose an increased demand for fluorspar. This caused a large investment of money in developing fluorspar properties, and resulted in the large increase in domestic production in 1902, as shown by the foregoing table. This same increased domestic demand induced certain English firms, particularly Blackwell & Sons, of Liverpool, to secure control of the waste dumps of fluorspar in England, and unload the product on the American market. This so depressed the domestic fluorspar industry that practically all efforts to mine it ceased in Tennessee, Colorado, and Arizona. In the Kentucky-Illinois district, some of the producers had made large in- vestments and, because of that fact, continued work in a limited way, in the hope of relief from some source. The effect of the importation was, however, so disastrous that many properties were entirely abandoned. According to our information, in Kentucky alone the number of mines decreased from 150 in 1906 to 4 in the summer of 1909. As shown by the foregoing table, the domestic production from 1902 to 1908, inclusive, while slightly fluctuating, did not increase. In fact the production for 1908 was about 10,000 tons less than the production for 1902. This reveals a total failure to deveiop the natural resources of this country in a commodity essential to the production of steel by present accepted methods. Taking the figures given in the report for 1911, the average price of domestic fluorspar of all grades prior to the tariff act of 1909 was as follows : Per ton. 1906 $5. 87 1907 5. 81 1908 5. 82 1909 5. 75 During these years the price of gravel fluorspar was less than $5 per ton at the rail shipping point. 540 TABTPF HEABINGS. PARAGRAPH 90 FLUORSPAR. In view of the expensive character of domestic mining, the unfavor- able location of the domestic properties, and the hazards attending the business, no domestic producers ever succeeded in making any profit at such prices. The Fairview Lead & Flyor Spar Co. and its predecessor, the Fairview Fluorspar Co., lost very heavily every year, and only the hope of ultimate protection through a fair tariff induced the parties interested to continue operation of the properties. The losses of this company for the three years prior to 1910 were as follows : Net loss. 1907 $22, 146. 78 1908 11, 712. 15 1909 12, 283. 32 7. Situation of domestic consumer without a tariff. Prior to 1909 the steel mills of this country were forced to depend for an essential ingredient in the process of steel making upon an uncertain supply of foreign fluorspar. They were compelled to carry very large reserve stocks to protect against interferences with the foreign supply or a sudden increased demand for finished steel. In 1908 the requirements of the steel mills of the United States were about 100,000 tons of fluorspar. The total domestic production of fluorspar of all grades was 38,785 tons. The domestic production of gravel fluorspar was about 30,000 tons, or less than one-third of the demands of the steel mills in this country. 8. Effect of present tariff on domestic production. In the Kentucky- Illinois district some of the large operators who had made substantial investments carried the properties and continued work in a limited way, hoping for some relief. After the passage of the tariff act of 1909, these investors on the faith of the tariff expended large sums in improving their properties and increasing their outputs. The do- mestic output of all grades in 1911 was 87,048 tons. No statistics for 1912 have yet been published. The domestic production for 1912 will reach 100,000 tons, but does not yet equal domestic con- sumption. As stated in the department report for 1910, the price of domestic fluorspar of all grades under the influence of the tariff advanced the first year from So. 75, in 1909, to S6.20, in 1910. Gravel fluorspar during 1910 advanced perhaps 25 cents per ton. Even at this price the Fairview Fluorspar & Lead Co. lost heavily during that year; at this advance there was still no profit for domestic producers, and this company finished the year 1910 with another net loss. In 1911 the price of domestic fluorspar made another slight ad- vance under the influence of the tariff, and, as shown by the depart- ment reports, advanced to an average price of S7.02 per ton for fluor- spar of all grades. The average price per ton of domestic gravel spar was $6.03 in 1911, as compared with 5.43 in 1910. As shown by the foregoing figures, it is impossible for domestic producers to make any profit unless the average price of fluorspar of all grades is approximately $7, and the average price of gravel fluorspar is approximately $6. The present duty will just about maintain these prices. SCHEDULE B. 541 PARAGRAPH 90 FLUORSPAR. The average price of domestic fluorspar of all grades in 1912 re- mained practically the same as in 1911, but it is believed by the domestic producers that there is a slight profit at the present prices, although, as stated by the Department of the Interior, the profit is not "attractive." The report for 1911 summarizes the situation as follows: Under the most favorable conditions, therefore, the margin of profit can never be expected to be large, and it requires exceptionally good management to conduct any spar-mining operations profitably, unless the veins are thick and of uniformly good quality. The present duty will continue to stimulate an increased domestic production. The producers will attempt to increase profits slightly by larger production and a more economical distribution of cost. As the Bessemer plants are changed into open-hearth plants, and as new open-hearth plants are built, the requirements of the steel busi- ness of the country will increase, and the fluorspar production should be permitted to keep pace with the steel business. 9. Effect of present tariff on domestic consumer Has not increased cost of living. The amount of fluorspar used to produce a ton of finished steel varies slightly, in accordance with the character of the scrap iron or the character of the iron ore used in the furnace. Be- tween 800 and 1,000 pounds of gravel fluorspar are used on every heat of 55 tons. At most, therefore, the cost of fluorspar is less than 5 cents to the ton of finished steel. Under the influence of the tariff the price of gravel fluorspar to the steel companies in this country has advanced less than $1 per ton. The increase in cost of fluorspar to the ton of finished steel is approximately one-half of a cent. Fluorspar is the smallest item entering into the production of steel. An increase hi its cost of one-half of a cent per ton of finished steel is insignificant and has no effect to raise the price of steel. The tariff on fluorspar has no effect on the ultimate consumer of finished steel. The steel industry as a whole are entirely satisfied with conditions under the present fluorspar tariff. With the possible exception of a few mills at or near our eastern seacoast, the steel industry of the country has no desire to have the duty removed or even reduced. The ordinary steel company prefers to pay one-half of a cent addi- tional for the fluorspar used in producing a ton of steel, in order to be able to rely upon an increased accessible dependable production of a standard grade of fluorspar. 10. Competitive conditions under the present tariff. The last avail- able quotation of foreign fluorspar was $7.65 per long ton, f. o. b. cars Philadelphia, including duty. Adding the freight rate of $1.60 per long ton, or $1.20 per short ton, the basis on which domestic spar is sold. The freight rates on gravel fluorspar from the Kentucky and Illinois districts to the Pittsburgh field are $2.30 and $2.10 per ton, respectively. Under this competition the price of domestic fluorspar in the Pittsburgh field can not exceed approximately $6 per ton at the rail shipping point. As recognized by the Department of the Interior, there is small profit to the domestic producer at this figure. The steel mills east of the Pittsburgh field can still purchase then- requirements of fluorspar at lower prices than the mills in the west 542 TABIFF HEADINGS. PABAGBAPH 90 FLTJOBSPAB. of that field, and the eastern field is still entirely in the hands of the foreign producer. 11. Conditions under present tariff satisfactory to both domestic con- sumer and domestic producer. While the present duty does not enable the domestic producer to compete with the English product east of the Pittsburgh field, and while it holds prices in that field for gravel fluorspar to a level of about $6 per ton, still the domestic producer believes that under present conditions there is hope for a fair profit, particularly as the production is extended and developed. Develop- ment of production in turn will bring better transportation facilities to many of the fluorspar properties hi the Kentucky and Illinois districts. The steel companies in turn have found conditions more satisfac- tory for them during the past two years than ever before in the history of the fluorspar business. Any possible exception to such expression will be confined to a few steel companies east of the Pittsburgh field, and will be due undoubtedly to the agitation of the importer. The domestic consumption of the mills east of the Pittsburgh field amounts to considerably less than 10 per cent of the total domestic consumption. 12. Effect of removal or reduction of present tariff. As the complete removal of the duty would only reduce the cost of fluorspar to the steel companies about one-half of a cent per ton of finished steel, it will not reduce the price of steel to the ultimate consumer. The money invested on the faith of the tariff in the past two years to improve domestic properties and to open new properties will be entirely lost. Extension of railroad facilities now under contem- plation to certain of the fluorspar properties will be abandoned. Domestic production of fluorspar will decrease at once. One of the most fundamental industries in the country, to wit, the steel business, will be left wholly dependent for an absolute essential upon an uncertain foreign supply. The Government will suffer a loss of revenue. 13. Revenue tariff- Loss in revenue will benefit tne foreigner alone. The loss in revenue to the Government will not result in a propor- tionate reduction of prices of fluorspar. Prices will drop to a figure just below the price at which domestic fluorspar can be profitably marketed. It will only be necessary for the importer to drop the price about SI per ton below the present price to drive the domestic producer out of business. The conditions existing prior to 1909 will return. Two-thirds of the amount of the revenue lost to the Govern- ment will go into the pockets of the foreign producer or importer. In view of the fact that the foreigner alone will substantially benefit by the removal or reduction of the tariff, it is submitted in conclusion that the duty of S3 per ton on fluorspar is an eminently fitting appli- cation of the principle of a revenue tariff. In the earnest hope that the present duty on fluorspar may remain undisturbed, at least until it has received a longer trial, these facts are respectfully submitted. SCHEDULE B. 543 PARAGRAPH 90 FULLER'S EARTH. FLUORSPAR INTERESTS OF ROSICLARE AND FAIRVIEW, ILL. WASHINGTON, D. C., February 1, 1913. Hon. OSCAR W. UNDERWOOD, Chairman, Ways and Means Committee, House of Representatives, Washington, D. C. DEAR MR. CHAIRMAN: In connection with the statement made by Mr. C. S. Nunn, on behalf of the fluorspar people, I wish to make the following statement and request that it be made an adendum or appendix to hearings which have already been filed and printed. During the early part of January, the rise of water in the Ohio River, due to the con- tinuous and heavy rains in the Ohio watershed, so flooded the country, in and about Fairview and Rosiclare, 111., that the mines of the Rosiclare Lead & Fluor Spar Mines and the Fairview Lead & Fluorspar Co. were entirely filled with water. It is impos- sible to estimate the exact quantity of water in the shafte of the mines and workings, but the water in the shafts is within 5 or 10 feet of the mouth of the mines. The shafts are, as stated in the brief filed with the committee, perpendicular, so that the mines are filled just as a bottle would be standing on its bottom. The water flowed into the Rosiclare mines at the rate of 10,000 gallons per minute, and it is impossible to state 1 1 > what extent the mines have been injured by the drowning, owing to the fact that the breaking in of the water was at a point 200 feet below the surface, having broken 1 hrough the soft underlying strata. This is the most serious disaster that has happened to our property during the last five years, and accentuates the precarious character of fluorspar mining. It will cost in money to dewater the mines and put them in con- dition for successful operation again as much or more than we can expect to make out of the operation during a year's run on an ordinary basis of profit. With these con- ditions confronting us, any reduction in the tariff at the present time would make economic mining of this material impossible. On behalf of the mining interests located at Rosiclare and Fairview, in Hardin County, 111., I beg that the committee will take into consideration the effect of this great disaster which has come upon us and through which at the present time we can not clearly see our way. It will be impossible to begin pumping out the mines until the Ohio River has receded to a point where it will receive the ejected water. There is no measure of how much pumping will be necessary to empty the mines, owing to the saturated condition of the soil for 300 feet below the surface and the seepage into the mine being impossible of computation. On behalf of these interests, I therefore pray that the present duty of $3 per ton on imported fluorspar be not changed. Yours, very truly, ROSICLARE LEAD & FLUOR SPAR MINES, By COLIN H. LIVINGSTONE, Manager. FULLER'S EARTH. THE AMERICAN CLAY CO., AKRON, COLO., WRITE CONCERNING FULLER'S EARTH. HOUSE OF REPRESENTATIVES, Washington, February 5, 1913. The WAYS AND MEANS COMMITTEE, House of Representatives. GENTLEMEN: Please find inclosed a letter from Mr. J. A. Hensler, and also one from Attorney E. E. Armour, both of Akron, Colo, (on file), to which is attached a commu- nication addressed to the Senators and Congressmen from Colorado, both elect and in office, all of which are self-explanatory. I will only add that this mine is in my district. I am fully acquainted with the plant and the struggle of the owners to make it a success ; and I cheerfully indorse what is said about this industry, as so ably presented in the inclosuxes. Respectfully, A. W. RUCKER. 544 TARIFF HEARINGS. PABAGBAPH 90 FTJLLEB'S EABTH. AKRON, COLO., January 9, 191S. Hon. Simon Guggenheim, Hon. John F. Shafroth, Hon. Charles S. Thomas, Hon. Edward T. Taylor, Hon. Edward Keating, Hon. George J. Kindel, Hon. H. H. Seldomridge, Hon. Addison W. Rucker, Hon. John A. Martin, Senators and Con- gressmen of Colorado, elect, and in office. GENTLEMEN: The undersigned desire to call your attention to a Colorado industry which possibly may not have come to your notice, and which should have tariff protection to aid in its development. We refer to the mining and treatment of fuller's earth, and particularly that actually under way near Akron. The American Clay Co., of which we are the principal stockholders, owns a quarter section of land 3 miles northwest of Akron, in this State, containing very extensive beds of high-class fuller's earth, and has mined, treated, and marketed it, as best it could under prevailing conditions, for several years. During that time continuous and systematic effort has been made by the company to bring it to the attention of packers and other consumers with the purpose of getting it on the market, and with the result that its superior merit has been invariably acknowledged by the packing companies and others that have used it. This means many of the principal packing companies of the United States, and other concerns. It has been marketed to some extent in Omaha, St. Joe, Kansas City, New Mexico, Los Angeles, Chicago, Denver, and other places, and long ago would have been exclu- sively used by the' main consumers in this country had it not been for the very low duty on the foreign product. The duty, we believe, is only $2 and $3 per ton on the raw and the treated material, respectively, and this merely nominal duty is further lightened by being reckoned upon the long, or English, ton. Our principal competition comes from the English producers, who, by the excel- lence of our clay proved by the United States Government analysis and acknowl- edged by the packers have been compelled to reduce the price from as high as $39 per ton to as low as $9 and $10 per ton, in order to hold us out of the market; Our factory for treating the earth was first located at Omaha, but later was moved to the mines. The progress of the company was temporarily checked by fire destroy- ing the factory, a loss of approximately $10,000. A new and better factory was immediately constructed, and the company has con- tinued its efforts to manufacture and market the product to the present time, but has been so hampered by its successful foreign competitors under the protection given to them by the light duty upon their product that profitable business for the Ameri- can Clay Co., or for any other home producer, has been rendered impossible. The development of an industry, valuable to the community and the State and to other localities throughout the country, has thus been not only crippled, but almost entirely prevented. This condition can not improve under the present tariff. This company has practically an unlimited quantity of fuller's earth, and could supply the American market for many years under suitable tariff protection; but with the present rate of duty, here is the difficulty. The packers and other important consumers will not change their contracts from the foreign producers to us even at the same or a lower price without the assurance that we can and will promptly fill their orders; but this assurance we can not give without first increasing our facilities for mining and treatment, which we are not warranted in doing at the meager and precarious profit now obtaining. We say meager, because foreign competition has already cut the price nearly to the cost of production; and precarious, because the same competition is able to cut it still more, thus leaving the American producer with nothing save his mines and factories, silent and lifeless property, representing loss of money and wasted efforts. It is not the purpose of this company should the duty be raised on the foreign prod- uct to materially increase l price of its clay, if at all, over what the packers now pay the English and other foreign producers, for we can manufacture and market it to some profit even at the price which they are now getting; but we want and need sufficient duty imposed to justify and make safe an adequate increase in our facilities for mining and manufacture to supply the market demands and to protect us against further reduction in prices by the foreigner whereby profit to us will be rendered impossible. We ask only such protection as will make it reasonably safe to proceed with the development of our properties and the increase of our facilities for supplying the market. We submit that the interest of the principal consumers in this case should not be a matter of very heart-rending concern. For who and what are they? Nothing less than the great packing concerns of the country. Even though an increased duty should add a trifle to the price which the product now costs them, would this cripple their SCHEDULE B. 545 PARAGRAPH 90 FULLER'S EARTH. business? Surely there ia nothing there to worry about. Would they raise the price of meat, etc., and thus strike the public another blow? Not so, for willing as they are to do the like, if they have not already gone the limit in that direction, they certainly do not need this trifling matter as a pretext for raising prices. But the tariff which we ask would hurt neither the packers nor the people. On the contrary, it would tend to help both of them. Why? Because, if granted, the prices of fuller's earth would remain practically unchanged, thereby eliminating that influ- ence, at least, from the trust price-fixing of packer products; whereas, to deny the increase of duty asked, would dectroy American production, of which ours is the most active and promising, and leave an open field to the foreign producers for supplying the American market at advanced prices. By reason of the competition and threatened competition, which this company has created, they, the foreign producers, now supply it, for the most part, at from $9 to $10 per ton, the prices at which we can furnish it if protected by adequate duty against further reduction by them. With that competition removed as it must be under a continuance of the present duty will the foreigner hold down the price to its pres- ent figure? The question is an idle one. Freed from our efforts and the consequent menace to his business, he will advance the prices to their former heights of $39, and more, a ton. The packing house companies will have to pay the advance and the people follow suit. The present nominal duty affords no protection. It is wholly useless, save for a little revenue to the Government. But this revenue would be increased rather than diminished by a reasonable increase of duty, for such increase would not keep out the foreign product. Its effect would be to encourage and increase home production, and especially production in this State and by this company. If the duty be not increased, only the foreign producer, German and English prin- cipally, will be benefited. The American consumers, be they packers or others, and all who are affected by higher prices to them, would be injured; the writers hereof and their associates would be losers. Their business in question would be ruined; and an enterprise of great value to the community and to the State of Colo- rado would be destroyed. A tariff of $10 per ton, or more, and possibly less, on the foreign product would give the American product a chance to get into the market and not cost the consumer any more than he now pays (or at most but little more), which, in any event, would be much less than he would be compelled to pay under a continuance of the present duty. And thereby further, as the paramount consideration and result of it all, the American producer would be afforded a living profit. With such a duty we can confidently assure you, at least, that a thriving business would be speedily developed at Akron, Colo., which would greatly benefit the com- munity and be of very material value to the State. You will do a substantial and merited service to this quarter and to this State, as well as to others, by raising the duty on fuller's earth, as herein suggested and requested. We earnestly hope that you will give the matter careful consideration and favorable action. Further elaboration by us is superfluous in addressing gentlemen of your extended experience, sound judgment, exalted capacities, and conscientious concern for the put) lie good. With high regards and the wish that you may all be eminently successful in the discharge of your several trusts, and with strong confidence that you will, we have the honor to be, Very respectfully yours, E. E. ARMOUR. AUGUST MUNTZING. J. A. HENSLER. A. R. ARMOUR. F. MUNTZINO. BEIEF SUBMITTED BY NEW YORK FIEMS. NEW YORK, December SO, 1912. The WATS AND MEANS COMMITTEE, House of Representatives, Washington, D. C. SIRS: The undersigned two firms, L. A. Salomon & Bro., 216 Pearl Street, New York, and Hammill & Gillespie, 240 Front Street, New York, importing about two- 78959 VOL 113 35 546 TARIFF HEARINGS. PARAGRAPH 90 FTTI/LER'S EARTH. thirds of all the fuller's earth that is brought to this country, petition your com- mittee to reduce the duties on fuller's earth to the folio-wing level: Unwrought or unmanufactured to 75 cents, or not to exceed $1 per ton, 2,240 pounds. Wrought or manufactured to $1.50, or not to exceed $2 per ton, 2,240 pounds. At present fuller's earth is classified under paragraph 90 as follows: "Unwrought or unmanufactured, $1.50 per ton, 2,240 pounds. "Wrought or manufactured, $3 per ton, 2,240 pounds. The specific duty now assessed would be equivalent on the wrought article, which constitutes about fifteen-sixteenths of the total importations, to from 36 per cent to 50 per cent ad valorem, according to quality. The article is principally employed in refining cottonseed oil for edible purposes and for compound lard. The total importation of fuller's earth amounts to about 15,000 tons per annum; therefore the loss in revenue would be insignificant. On the other hand, the reduc- tion in price consequent to the reduction in duty would help the sale of it and would also slightly reduce the cost of edible cottonseed oil and compound lard, which are consumed altogether by the poorer classes in this country. The saving to the individual if the duty on fuller's earth should be reduced may be insignificant, but if 100 or 1,000 or more articles should be reduced in duty in a similar manner the saving to the individual will become an important item. In other words, we believe that the reduction in duty asked for by us is in line with the policy to revise the tariff downward. The production of domestic fuller's earth is more than twice as great as the importa- tion of the foreign article, but the domestic article is principally used for refining oils that are not used for edible purposes; therefore there is practically no com- petition between the domestic and foreign article, as they are different in character. Besides, the domestic article sells for at least $3 to $4 per ton less than the imported, so that the reduction in the duty asked for by us on the imported would not affect the sale of the domestic product. Respectfully, L. A. SALOMON & BRO. HAMMILL & GILLESPIE. COMMUNICATIONS REGARDING KIESELGUHR. THE STANDARD DIATOMITE Co., Eustis, Fla., January 8, 19 IS. S. M. SPARKMAN, Esq., Chairman Committee on Rivers and Harbors, House of Representatives, Washington, D. C. MY DEAR SIR: In reply to your esteemed favor of the 5th instant, for which please accept my thanks, I beg to say the quantity of kieselguhr (diatomite) imported into this country is about 3,000 tons per annum. I am of the opinion, however, that con- siderably more than that amount arrives under the name of dried or burnt clay, or even crude clay. The consumption of kieselguhr in New York alone is over 3,000 tons per year, and would be much greater if the foreign producers could supply the quantity required. Trusting I may have a favorable report from the Ways and Means Committee, and again thanking you for the interest you have taken in the matter and the courtesy shown, I remain. Yours, very truly, CHAS. R. GOSTLING. THE STANDARD DIATOMITE Co., Eustis, Fla., January 16, 1913. The Hon. S. M. SPARKMAV. Chairman Committee on Ricrrs arid Harbors, House of Representatives, Washington, D, C. MY DEAR SIR: In reply to your favor of the 13th instant, the average price for the highest grade of kieselguhr (diatomite) in Xew York City is about $80 per ton. There are many inferior grades sold for prices ranging between' $30 and $40 per ton. Eighty dollars per ton seems a high price, but when one considers that it requires the handling of about 20 tons of raw material to produce one ton of kieselguhr it is explained. Yours, very truly. CHAS. R. GOSTLINO. SCHEDULE B. 547 PARAGRAPH 91 MICA. PARAGRAPH 91. Mica, unmanufactured, or rough trimmed only, five cents per pound and twenty per centum ad valorem; mica, cut or trimmed, mica plates or built-up mica, and all manufactures of mica or of which mica is the component mate- rial of chief value, ten cents per pound and twenty per centum ad valorem. MICA. STATEMENT OF CHAELES P. STORES, OF OWEGO, N. Y. The CHAIRMAN. The next witness is Mr. Charles P. Storrs. We have assigned to you 10 minutes. Mr. STORES. Gentlemen, I want to ask a reduction in paragraph 91, relative to mica. The raw material is used by about 10 concerns whom I represent, who use it as a basis for tneir manufacturing products. Some of these concerns are importers and dealers, but a majority of them are manufacturers. The reason for asking a reduction on the raw material is that the (Duality of the mica imported is different from anything produced in this country. The amber mica of Canada and the India mica is softer and of better cleavage and suitable for use in electrical insu- lation, in making mica lamp chimneys, and in various other lines. The American mica can not be used to produce as satisfactory a product for these purposes. For that reason we feel that the present ad valorem rate, which amounts to about 35 or 37 per cent on the raw material, is an undue burden on this raw material. We ask to have a reduction made on the raw material, making the duty 3 cents a pound and 10 per cent ad valorem. We ask further to have that apply to both uncut and cut mica, the cut mica that is imported being only a small percentage about 15 per cent of the total importation. From that difference hi the present act there is a great deal of confusion and a great deal of argument between importers and the customs authorities as to the proper classification. Our proposed amendment would simplify that and would introduce all mica under the same classification. Our proposed duty would amount, figured on an ad valorem basis, to 19.4 per cent on uncut and 15 per cent on cut mica. The CHAIRMAN. You propose to change the classification ? Mr. STORES. Simply introduce the unmanufactured mica under the same classification. I am making the point of putting the cut mica under a lower classification. It makes little difference in the revenue, from the fact that comparatively little cut mica is imported. The CHAIRMAN. The proposition is to leave the cut mica as it is? Mr. STORES. No; leave the uncut mica. The CHAIRMAN. As it is ? Mr. STORRS. Yes; the cut mica grouped together and a lower duty on both of them. Mr. JAMES. Does your statement include ground mica? Mr. STOEES. That would probably be considered as manufactured mica. We do not ask to change the last part of the paragraph that applies to manufactures. If the ground mica were considered a manu- 548 TARIFF HEARINGS. PARAGRAPH 91 MICA. factored mica it would come under the present rates 10 cents a pound and 20 per cent ad valorem. The CHAIRMAN. I understand you to say that most of the importa- tions come under the manufactured mica. Mr. STORES. No; I have not said anything about the manufactured mica. The cut mica is not considered as manufactured mica. It is considered as raw material; but it now takes the same rate as manu- factured mica, and that is one of the points troublesome to us, because the difference between the tariff on the raw material now and the manufactured product is so slight that German manufacturers and English manufacturers of mica board are now in a better position here than the domestic manufacturers. Mr. JAMES. What is mica used in the manufacture of ? Mr. STORRS. Making insulating material, which is largely used in electrical machinery. There is no other material that can take the place of it in many cases. It is molded into various forms for electri- cal insulation of all kinds, and' those are built up of scales or films of mica, fastened together with an adhesive material, which is then pressed, molded, and is used in various electrical machinery. Air. JAMES. Whom do you represent ? Mr. STORRS. My own concern manufactures lamp chimneys of mica, and our friends are representatives of the electrical insulating manufacturers and the importers. The names are signed to the brief which we submit. Mr. JAMES. What is the tariff that applies to that in which you are interested ? Mr. STORRS. That comes under the 10 cent a pound rate and 20 per cent ad valorem. Mr. JAMES. On the finished product ? Mr. STORRS. Yes. Mr. JAMES. You want that reduced ? Mr. STORRS. We do not ask to have that reduced. Mr. JAMES. You would allow that to remain ? Mr. STORRS. Yes, sir. Mr. JAMES. But you want this raw material that goes into the manufacture reduced ? Mr. STORRS. Yes. sir. The CHAIRMAN. The figures that you submit this morning do not differentiat? between the raw mica and the finished product. How much importation is there of the finished product ? Mr. STORES. I have not any figures on that; I do not think there are any figures. There is very little of it introduced. I am not familiar with that. It comes under the electrical end of it. The CHAIRMAN. Then it would be very proper to make some re- duction on the finished product, if we give you this reduction on the raw material ? Mr. STORRS. Personally, speaking for my own company, they would not object to that, but some of our friends would feel the competition of the English and German importers. Mr. JAMES. Would they be willing to have competition? Mr. STORRS. They have competition. There is absolutely free competition in all this line in this country. There is quite bitter SCHEDULE B. 549 PARAGRAPH 91 MICA. competition in our line and in the electrical insulating line. The local competition will take care of that end of it. Mr. JAMES. So far as you are concerned you are willing to have the tariff reduced on the finished product if a reduction is- made on the raw material ? Mr. STORES. Not speaking for our friends. Mr. JAMES. But speaking for yourself ? Mr. STORKS. Yes. Mr. DALZELL. How many friends do you include in that ? Mr. STORRS. About 10 different concerns. Mr. DALZELL. You speak for 1 in favor of reduction and for 10 against it. Mr. STORRS. I am not advocating reduction on the finished product. Mr. DALZELL. I say you are against a reduction on the finished product, and the 10 others are in favor of it. Mr. STORRS. No; they are against it. Mr. DALZELL. You are against it also ? Mr. STORRS. Yes. Mr. DALZELL. Then you are all of one mind. The CHAIRMAN. I understood the witness to say as far as he per- sonally was concerned he had no objection to a reduction on the finished product, but he could not speak for his friends. Is that correct ? Mr. DALZELL. I understand; 1 out of 11. Mr. STORRS. If the committee will allow me, I would like to give some of my time to Mr. Jefferson, who can speak in regard to that. Mr. HILL. Do you import any mica ground? Mr. STORRS. No, sir. Mr. HILL. Mr. Chairman, while this matter is under consideration, and for your information in the consideration of the bill, I want to call attention to and ask the gentleman's opinion about a matter. There is somewhat of a misconstruction of this paragraph. After this law was passed in 1909 ground mica made from scrap, worthless in the dump neap, was made dutiable as a manufacture of mica, just the same as the finished piece of mica for a stove, automobile, or any- thing of that kind. Just the ordinary waste scrap, which was ground up and shipped in here as a manufacture of mica. The Treasury Department made a ruling on it, and ruled adversely against that, and admitted it at a lower rate, as in my judgment it should be. But I think the language should be now corrected hi some way, so that it should not be construed at least with the highest grade of an article made from sheets of mica. Mr. PAYNE. There does not seem to be any trouble about that. Ground is imported at 20 per cent. Mr. HILL. On the manufactured article ? Mr. PAYNE. No. Mr. HILL. That is the way it comes in Mr. PAYNE. The ground is imported at 20 per cent. Mr. HILL (continuing). Because the Treasury Department have ruled arbitrarily upon the manufactured article. The CHAIRMAN. Your suggestion is 550 TARIFF HEARINGS. PARAGRAPH 91 MICA. Mr. HILL, (interposing). I have not any suggestion to offer. I sim- ply desire to call it to the attention of the committee, and for that reason I asked the gentleman if he imported any ground mica. Mr. STORKS. No; but I understand that ground mica is imported under the general division of scrap materials. Mr. HILL. No; that is not right. Some consideration should be given to placing it somewhere, so that there would be no doubt about it. Mr. STORKS. Very likely that would be held to come under the lan- guage proposed by us, "Mica, unmanufactured, cut or uncut." It certainly is unmanufactured. The CHAIRMAN. Do you agree with what Mr. Hill has said about ground mica being the same as raw material, that there is no real ad- vance in manufacture ? Mr. STORKS. That is a legal point about which I am not prepared to argue. The CHAIRMAN. As a business point, are you familiar with ground mica ? Mr. STORKS. We do not have anything to do with it. Mr. Chair- man, could I give the balance of my time to Mr. Jefferson ? The CHAIRMAN. You have not any time left. Mr. PETERS. One moment. What would you think of changing the duty from a compound duty to an ad valorem duty ? Mr. STORRS. I am afraid serious objection to that would be raised by the miners of American mica, because they need the specific duty. They feel that they do, in order to keep the market upon the American mica. Mr. PETERS. If the duties were changed from a compound duty, do you think it should rather be a specific duty ? Mr. STORRS. I think the specific duty would be more equitable. Mr. PETERS. I notice the importations have decreased under the Payne bill from 8768,000 in 1910 to $540,000 in 1912. Could you enlighten us as to any reason for that ? Mr. STORES. I do not understand the figures that way. The figures we have for the last three years show that importations have increased over 1908 and 1909. Exhibit A in our brief is taken from House Document 1504, and from later information furnished by the Department of Commerce and Labor. If these figures are correct, they show a marked increase in importations since the reduction in the Payne bill. Mr. : J ETEES. I am referring to table 26 of our handbook. Mr. STORES. May I not submit a memorandum to you on that point later rather than take up the time of the committee ? The CHAIRMAN. We would be glad to have you do that, and if you will submit it before 5 o'clock to-morrow night it will go into the hearings. Of course, it can go in at any time before the general hearings are closed, but it would be published with some other schedules and probably be lost if you do not get it in before 5 o'clock to-morrow night. The CHAIRMAN. The next witness is Mr. W. E. Wells. Mr. WELLS. Mr. Chairman, Mr. Burgess and I are both here for the same purpose, representing the same people. Would it be agreeable to you to have him present his argument first ? SCHEDULE B. 551 PARAGRAPH 91 MICA. The CHAIRMAN. As a general thing, we can not let witnesses swap, but in this case as you both come right together, and as Mr. Burgess follows you, you may swap places with him. Mr. WELLS. Thank you. BRIEF SUBMITTED BY MICA ASSOCIATION. JANUARY 8, 1913. Committee on Ways and Means, House of Representatives, Washington, D. C. SIRS: The above association, comprising persons, firms, and corporations engaged in business relating to mica as manufacturers, importers, dealers, and miners, whose names are subscribed hereto, respectfully petitions that the above-mentioned para- graph be amended to read as follows: 91. "Mica, unmanufactured, cut or uncut, three cents per pound and ten per centum ad valorem; built up mica, and all manufactures of mica, or of which mica is the component material of chief value, ten cents per pound and twenty per centum ad valorem. ' ' This paragraph in the act of 1909 reads as follows: 91. Mica, unmanufactured or rough trimmed only, five cents per pound and twenty per centum ad valorem; mica, cut or trimmed, mica plates or built-up mica, and all manufactures of mica, or of which mica is the component material of chief value, ten cents per pound and twenty per centum ad valorem." The changes asked are reductions of the duty as follows: Present duty. Proposed duty. Unmanufactured or rough trimmed mica. Cut mica $0.05 per pound and 20 per cent ad valorem. $0.10 per pound and 20 per cent f 0.03 per pound and 10 per cent ad valorem. $0.03 per pound and 10 per cent ad valorem. ad valorem. REASONS FOR PROPOSED REDUCTION OF DUTY. Much of the mica used in the various branches of industry is required to possess special characteristics which do not pertain to any mica mined in the United States. Especially is this true in the case of electrical machinery, which furnishes the largest field for the use of mica, there being no insulating material that can be substituted for mica in many electrical appliances. For instance, in 'commutators for motors and dynamos it is necessary to use either the amber mica of Canada or the India mica because of their being softer than the American mica and therefore wearing down uniformly with the alternate layers of copper. The larger proportion of the mica consumed by the electrical industry is used in making built-up or reconstructed mica in the form of plates, boards, rings, segments, and special forms. This is an insulating material of vital importance to the industry, made of mica films molded together with an adhesive material into various forms. The greater softness, superior cleavage, and elasticity of the Canadian amber and the India mica make it requisite to use these grades to supply a product of the necessary quality. In making mica lamp chimneys it is necessary to import the clear India mica, as no other mica can be obtained that possesses all the three requisite qualities as follows: Absolute clearness, perfect cleavage, and pliability, such that it can be rolled into cylindrical form without cracking. "The mica mined in the United States has its own field, chiefly for use in stoves, washers for spark plugs, etc. Attached hereto and marked "Exhibit A," and printed on page 8, is a statement obtained from the Department of Commerce and Labor, showing importations of mica for 5 years ending June 30, 1912, which includes the period during which the act of 1909 has been in force, with the average value per pound of the mica imported and average ratio of the entire duty paid, figured on an ad valorem basis. From this it will be seen that the duty collected under the present act on mica imported during the 3 years 552 TAEIPF HEARINGS. PARAGRAPH 01 MICA. ending June 30, 1912, averaged 35.87 per cent ad valorem on the rough-trimmed mica and 37.12 per cent on the cut mica. It seems to the petitioners that this is too high a rate of duty on raw material, the bulk of which is of a quality radically distinct from any similar native product and which must be imported regardless of the amount of the home product available. Your petitioners respectfully submit that the present rate of duty on raw mica adds an unnecessary and unreasonable burden of cost to the price the American consumer must pay for those articles that must be made of the grades of mica that are not pro- duced at home. Attached hereto and marked " Exhibit B," printed atpage 9, is a statement show- ing the actual imports of misa for the past 6 years, as in Exhibit A, but figured at the proposed rate of duty. Our proposed duty, figured on the importations of the last 3 years would average 19.45 per cent on the uncut, and 15.12 per cent on the cut mica. The price of amber and India mica has advanced continually for the past 5 years and very rapidly for the last year on account of the limited supply of this material and the increasing demand for same. That the reduction of duty asked for on this schedule will not injuriously affect the production of American mica is shown by the fact that the home production increased in the years 19K) and 1911 over that of 1909 in spite of the reduction of $0.01 per pound on uncut and $0.02 per pound on cut mica provided for by the tariff act of 1909. This is shown by the statement annexed hereto and marked "Exhibit C," taken from the " Production of Mica in 1911, " by Douglas B. Sterrett, published by the United States Geological Survey. In recommending the change in wording, which puts cut and uncut mica under the same rate of duty, we desire to effect a simplification of this provision and to eliminate the existing confusion in classifying imports, which frequently arises because of the varying methods of preparing mica for shipment in the various foreign markets, and to prevent the frequent discussion as to whether mica should be classified as "rough trimmed " or "cut," which is continually arising between the importers and the customs authorities and which has often resulted in litigation. Of the 7,276,312 pounds of mica imported in 5 years, as shown by Exhibit A, 84.6 per cent was unmanu- factured or rough trimmed only and only 15.4 per cent cut or trimmed, so this pro- posed change in classification will affect only a small percentage of the total im- portation. It will be noted that your petitioners do not ask for a reduction on built-up mica and manufactures of mica but respectfully urge that the phraseology of the latter part of this paragraph remain as in the present act. The foreign manufacturer of built-up mica or mica board, who pays no duty on his raw material, can export his product to the United States and pay the present duty at a lower cost than that at which the American manufacturer can turn out his product. Under the present act the American manufacturers of built-up mica pay a duty on their raw mica of 5 cents per pound and 20 per cent. Therefore, on a basis of 14 cents per pound valuation for raw India mica films, the total duty amounts to an ad valorem rate of 55 per cent. The foreign manufacturer imports built-up mica board on an ap- proximate valuation 54 cents per pound and pays a duty of 10 cents per pound and 20 per cent ad valorem, equivalent to an ad valorem duty of 40 per cent. Thus the American manufacturer of mica products pays a higher rate of duty on the raw material which he must necessarily import than his foreign competitor pays on the competing finished product. This difference is further accentuated by the lower labor costs favoring the foreign competitor. We feel that it would be a serious injury to those of your petitioners who are engaged in manufacturing to reduce the rate of duty on manufactures of mica as comprised in the last part of the mica para- graph. It is stimated that well over 5,000 people are employed in working up mica into manufactured products in the United States, while not more than 350 or 400 are employed in mining American mica. ESTIMATE OP EFFECT OF PROPOSED CHANGE ON IMPORTS. As to probable decrease or increase in the imports likely to be brought about by the proposed reduction, it is difficult to estimate the effect of this change with any degree of certainty. If business conditions continue as favorable as at present, it is fair to assume an in- creased importation, as it is shown by Exhibit A that after the reduction of $0.01 and $0.02 a pound in the tariff act of 1909 the importations for the three following yeara showed considerable increase. SCHEDULE 8. 553 PARAGRAPH 01 MICA. Further, the prevailing upward tendency of the price of Canadian and India mica will tend to keep up the revenue from this source. PROPOSED CHANGES IN PHRASEOLOGY. Our suggestion as to change in phraseology applies only to classification as between "rough trimmed" and "cut" mica and our reasons for suggesting this change are set forth in a previous paragraph. SUGGESTIONS AS TO ADMINISTRATIVE FEATURES. This same change that we have recommended in regard to classification will tend to simplify the administration of the tariff act as regards the paragraph in question. Respectfully submitted. THE MICA ASSOCIATION, Comprising Chicago Mica Co., Valparaiso, Ind., by A. W. Pickford, presi- dent; Joseph Huse & Son, Boston, Mass., by Fedr. R. Huse; The Macallen Co., Boston, Mass., by Louis McCarthy, treasurer; Mica Insulator Co., Schenectady, N. Y., by E. C. Wood, vice president; Eugene Munsell & Co., New York City, by Lewis W. Kingsley, presi- dent; North Carolina Mica Co., Boston Mass., by F. R. Huse, treasurer; The Palermo Mica Co., New York City, by W. H. Steinmuller, presi- dent; A. O. Schoonmaker Co., New York City, by A. 0. Schoon- maker, president; Storrs Mica Co., Owego, N. Y., by A. P. Stores, president; Watson Bros., Boston, Mass., by F. L. Watson. CHARLES P. STORRS, Secretary, Owego, N. Y. EXHIBIT A. Mica Imports and duties. [From H. Doc. No. 1504 and later information furnished by Department of Commerce and Labor.) UNMANUFACTURED OR ROUGH TRIMMED ONLY. Fiscal year ended June 30 Rate of duty. Quantity. Value. Duty col- lected. Value per unit Quan- tity. Ad va- lorem rate of duty. 1908 6 cents per pound and 20 per Pounds. 873,961 $360,874 $124,613 $0.414 Perct. 34.53 1909... cent. do 922,686 358,457 127,053 .388 35.44 1910 5 cents per pound and 20 per 1,891,749 586,268 213,918 .309 36.48 1911... cent. do... 1, 128, 705 359,868 128,409 .318 35.68 1912 .. .do 1, 343, 695 434,254 154,036 .323 35.47 Total 6, 160, 796 2, 099, 721 748,029 CUT OR TRIMMED. 1908 12 cents per pound and 20 77,560 $59,280 $21,163 $0.764 35.70 1909... per cent. .. ..do 66,723 51,285 18,264 .768 35.61 1910 10 cents per pound and 20 380,028 180,859 74,513 .476 4L20 1911... per cent, do 480,378 250,010 98,040 .524 39.21 1912 do 110,827 101,032 31,289 .911 30.96 Total 1,115,516 642,466 243,269 Grand total 7,276,312 2, 742, 187 991,298 554 TABIPF HEARINGS. PARAGRAPH 91 MICA. EXHIBIT B. Estimated duty on mica imported for five years ended June SO, 1912, figured at proposed new rate, S cents per pound and 10 per cent ad valorem. UNMANUFACTURED OR ROUGH TRIMMED ONLY. Esti- Esti- mated ad Fiscal year ended June 30 Proposed rate of duty. Quantity. Value. mated valorem duty. rate of duty. Pounds. Percent. 1908 3 cents per pound and 10 per 873, 961 $360,874 $62, 306 17.26 cent. 1909... ...do... 922,686 358,457 63,526 17.72 1910 . .do 1, 891, 749 586,268 115,379 19.68 1911... ...do... 1,128,705 359, 868 69,848 19.41 1912 . ..do 1,343,695 434,254 83,736 19.27 Total 394,795 CUT OR TRIMMED. 1908 3 cents per pound and 10 per 77,560 $59,280 $8,255 13.92 1909 cent. . ..do 66,723 51,285 7,130 13.90 1910... ...do... 380,028 180,859 29,487 16.33 1911 ..do 480,378 250,010 39, 412 15.76 1912 do 110,827 101,032 13,428 13.28 Total 97, 712 Grand total 492,507 EXHIBIT C. Production of mica in the United States, 1909-1911. [From "The Production of Mica in 1911," by Douglas B. Sterrett, Department of the Interior, United States Geological Survey.] Rough trimmed and cut mica. Year. Scrap mica. Total values. Quantity. Value. Quantity. Value. Pounds. 1909 1, 809, 582 $234, 482 283, S32 310, 254 Short tons. 4,090 4,065 3,512 $46,047 53,265 45,550 $280,529 337,097 355,804 1910 2, 476, 190 1911 1,887,201 SUPPLEMENTAL BRIEF SUBMITTED BY THE MICA ASSOCIATION JANUARY 9, 1913. COMMITTEE ON WAYS AXU MEANS, House of Representatives. SIRS: Referring to the comment of Mr. Peters during our hearing on January 8 as to quantity of imports of mica during the last three years, we beg to call your attention to the fact that the comparison made in our original brief is based on the fiscal years ending June 30, 1908 and 1900. As compared with those two years, the imports of mica for each fiscal year since the reduction in tariff made by the Payne bill have been larger than the imports in either 1908 or 1909. Figures given in our original brief. Exhibit A. are divided under the headings " Unmanufactured or rough trimmed only" and "Cut or trimmed." Respectfully submitted. THE MICA ASSOCIATION, CHARLES P. STORRS, Secretary. SCHEDULE B. 555 PARAGRAPH 91 MICA. STATEMENT OF MR. S. H. BROWN, ON BEHALF OF THE ASHE- VILLE MICA CO., ASHEVILLE, N. C. Mr. BROWN. Mr. Chairman, Mr. Vance Brown, who requested per- mission to make a statement before you to-day, has been detained at home on account of sickness, and he has requested me to either read or present this brief in his stead, with your permission. The CHAIRMAN. You may do so. What is your name ? Mr. BROWN. Hubbard D. Brown. I am a brother of Mr. Vance Brown. The CHAIRMAN. Are you informed about the question which is being presented ? Mr. BROWN. Yes, sir; I am a practical mica man. The CHAIRMAN. All right. Mr. Brown thereupon read the statement of Mr. Vance Brown, as follows: ASHEVILLE, N. C., January 8, 191S. CHAIRMAN WAYS AND MEANS COMMITTEE, House of Representatives, Washington, D. C. DEAR SIR: We have been given to understand that the importers of mica, both the dealers and large users, expect to take advantage of the declared intention of the Democratic majority to lower the tariff, and at this time ask a substantial reduction on pure mica, and that built-up mica be left as it is. They will ask either that mica be put upon a straight ad valorem basis instead of as now a specific 5 cents and 10 cents per pound and 20 per cent ad valorem, or for such a change in the wording that either way there will be a very substantial reduction in the amount of duty collected on what they import, but not on what they manufacture. While we are also importers of mica, we are the largest handlers of the domestic product, and the miners of this section rather look to us to put forward their protest against any change in the present schedule on this article. The Payne-Aldrich bill, on the request of the importers, made a reduction of 20 per cent on the specific duties, so that it is felt that at this time it is not necessary to again lower it. The production of mica in this section has gradually increased. The United States report for 1912 is not yet available, but it will show a substantial increase from this section over 1911, possibly 25 per cent. This mica is principally produced by hundreds' of small miners and bought from them by several dealers who manufacture it into various shapes for the consumer. The wage paid at the mines is from $1.25 to $2 per day. In the dealer's factory, where it is worked up, the wages are from 75 cents to $2.50 per day. On the whole the average in both would be somewhere near $1.50 per day. Practically all the mica imported that comes in competition with this product is received from India, much of it by way of London. In India the wage scale, in the production and working up of the raw material into the various grades for sale to the importer in this country, runs from 10 to 20 cents per day, so that in a free market it is certain that the production of this section ceuld not compete with this Indian production. While it is true that at the present time, because of the demand being greater than the visible supply, the price of this Indian product has advanced very considerably in the past year, this condition will be bound to increase the output both there and here, and such advance should be taken into consideration only over a series of years the same as a tariff act would effect. In reference to the request that the specific duty be removed: Taking the 1911 figures of the United States Geological Survey report, the specific duty should have been about $78,000 and the ad valorem $100,000, and it might be argued that the plac- ing of ad valorem at 40 per cent would raise even more revenue, but inasmuch as the greater bulk in weight is of the small, less valuable pieces, even allowing nothing for undervaluation that might be practiced, it would be found that 40 per cent ad valorem duty would neither raise nearly so much revenue nor would it give nearly so much protection to the domestic producer as the present schedule. 556 TABTFF HBABING8. PARAGRAPH 91 MICA. In respect to any change of wording: It might be changed to make it conform more to actual conditions, although the practices of the customs authorities are now well fixed on the meaning of the present wording. If any change is made it should leave it so that without any question cut or very closely trimmed mica should pay about twice as much specific duty as the uncut or roughly trimmed does, because in cutting to shape or size, or even trimming closely to expected pattern, there will be removed about naif the weight from the roughly trimmed sheets. If both cut and uncut were to pay the same specific duty, most of the cutting would be done in India or Europe where the labor is the cheapest, and the net result in revenue from duty collected of the importer would be practically one half the present duty. Any change in the pres- ent wording, except it be in respect to the raising or lowering of the specific or ad valorem duty, might easily make a great difference in the amount of duty collected and, therefore, should only be done after fully advising with those who understand the preparation of mica for the market and who thus can best judge the effect of any new wording both in respect to revenue to the Government and protection to the domestic producer. Most of the importers and largest users of mica are manufacturers of built-up mica. Of this very little is imported. The specific duty on built-up should be more than on the unmanufactured, because of the difference in the cost of labor in building up, but as this material contains considerable binder (shellac or like material) the duty has to be paid on this weight of binder also and thus the pro- tection is greater to the mica in this form than is the case with the cut form, which is pure mica like the uncut. The cost of producing mica in India should be from one-fifth to one-eighth of the cost in this country. The present duty gives protection to only a small part of this differ- ence in cost. If protection was used as a basis on which to draw a tariff on mica, the present rate would be multiplied many times. If revenue is to be the basis, there could with reason still be an increase on the present schedule. We as importers our- selves are not particularly anxious for an increase, but we do know that the domestic producer is already poorly enough prepared to meet the competition he already has, without any part of the slight protection now afforded being taken away. We ask, therefore, that any change of wording be closely investigated and that there be no further reduction made either in the specific or ad valorem duties, the 20 per cent reduction that was made two years age being all the domestic producers should be asked to stand. Trusting that you will give serious attention to the claim of our domestic producers, we are, Respectfully, ASHEVILLE MICA Co., Per W. VANCE BROWN. The CHAIRMAN. Are there any questions? [After a pause.] That is all. Mr. BROWN . Mr. Chairman, I have with me a couple of pamphlets which I do not desire to read, but I would like to have them submitted for the attention of the committee. The CHAIRMAN. Do you want them printed hi the record? Mr. BROWN. Yes, sir. The CHAIRMAN. All right; they will be printed. STATEMENT OF \V . VANCE BROWN, OF THE ASHEVILLE MICA Co., AND OP B. C. GRINDSTAFP, OF THE GREAT SOUTHERN MICA Co., OF ASHEVILLE, N. C. COM- PARATIVE COST OF MINING AND PREPARING MICA IN INDIA AND IN THE UNITED STATES. [Respectfully submitted for the consideration of the Finance Committee of the United States Senate, April, 1909.] We have each had about 20 years' experience in the mica industry in the United States. The mica-bearing veins or deposits are about the same in the two countries, both producing the Muscovite species of mica, and they produce practically all the world's supply of this species. The blocks of mica are found in veins of feldspar irregularly, both in distance apart from one another and in size, and as the size controls the value, the value of production i- irregular. SCHEDULE B. 557 PARAGRAPH 91- MICA. The domestic mica is equal in quality with the India varieties, both for use in stoves and for insulation. Splittings made from it are as good for built-up plate as the split- tings made from India mica. India has the advantage of larger developed mines, which means a relatively lower operating cost. The average price of labor in India is 15 cents per day; in the United States the average price is $1.50 per day for this class of work. Dividing the production of mica at the mine into two classes: (1) Unsound pieces that are only fit for grinding purposes and which is worth $8 per ton at the mine. (2) Small and large untrimmed sheets varying from what will cut in sound mica a 1-inch disk to that large enough to cut upward of 48 square inches. This will divide the production into about two equal parts in weight. It is sold by the miner in several grades classed according to size that can be cut out of it in sound material, the small being worth less than the average price of the output, while the larger sheets are worth very much more than the average. There is more in weight of the smaller sheets than of the larger. Allowing as mining expense the labor of splitting the blocks and sorting the pieces into various grades, according to their size. We can state that the average cost of producing the untrimmed sheet mica class will be 12 cents per pound in the United States. Seventy-five per cent of this 12 cents per pound cost is paid for labor alone. Thus 9 cents per pound is the labor cost. We have no data on which to base the total cost of mining per pound in India of untrimmed sheet. But allowing that 75 per cent of their cost was labor, as it is here, and their labor at one-tenth the cost of the same labor in the United States, as it is, and granting that its efficiency is only one-half, we have the fact that their labor cost per pound will be one-fifth of 9 cents, i. e., 1$ cents per pound, and the total mining cost, 2| cents per pound, for untrimmed sheet mica mined and split ready for the preparation it will get before it gets to the consumer. This is a difference in labor cost alone of over 7 cents per pound, and in total cost of mining, of over 9 cents per pound, in favor of the India producer. The cost of preparing the untrimmed sheet into the shape or condition the con- sumer requires it is another operation, taking another set of hands and not subject to the irregularities of producing the mica from the mine. It means cutting, punching, or trimming the untrimmed sheet to any iregular shape or pattern required by the consumer, or splitting it to less than five one-thousandths of an inch in thickness. None of this preparation changes the character of the mica itself, nor does it put any other substance or material to it. It only removes a part because it is unsound, or removes what is necessary to shape the piece to such pattern as is required by the consumer. The act of splitting only opens up the natural laminations. Some of this preparation may be done by machinery, but no machine has yet been invented that will prevent the further spending of 12 cents per pound average on each pound of mica prepared for the consumer. In doing this preparation it will take on an average 3 pounds of untrimmed sheet to make 1 pound of net mica as the consumer requires it, so that in the United States we have an average cost of preparing mica as follows: 12 cents per pound average cost of mining. 30 cents for waste in preparation 3 pounds for 1. 12 cents per pound for labor doing it. Making 54 cents the total cost of 1 pound of prepared mica. Whereas under the conditions in India we have: 2$ cents per pound average cost of mining. 6 cents for waste in preparation 3 pounds for 1. 1\ cents per pound for labor \ of United States labor. Making 11 cents the total cost of 1 pound of prepared mica. A difference in average cost of mica, prepared for the consumer, of 43 cents per pound in favor of India. Manufacturing mica plate is entirely a separate operation again, and is not consid- ered in the cost hereinbefore stated. The thinly split laminae are laid flat with edges overlapping, and on this surface a mixture of shellac is spread. More of the split laminae are placed on this, and again more shellac, and so layer upon layer, until a thick sheet is built up, 36 inches square, which when pressed heavily and baked makes a solid piece of insulating material . This is built-up plate, known under several names, as micanite, micabeaton. etc. 558 TARIFF HEABINGS. PARAGRAPH 01 MICA. As a fact the miner in India has nearly prepared his mica for the consumer as well -s mining it. And yet on nearly all the imported mica there has been o/ily paid 6 cents specific and 20 per cent ad valorem under the Dingley bill. . See United States report for 1907. The average valuation of imported mica in 1907 was 37 cents per pound, so that the average cost to the importer for his mica, duty paid, was 51 cents per pound, against the cost of the domestic of 54 cents per pound. The average selling price of the India mica (duty not paid) being 37 cents per pound as per United States report, 1907 and their cost 11 cents, the miner in India has had an average profit of 26 cents per pound. It is no wonder that the domestic miner has been only able to work in a small way, or if larger operations were attempted they were unsuccessful, except in extraordinary rich veins. The India miner has always had plenty of margin in which to develop his mines, and thus lessen his cost, while the United States miner, with exactly as good mica, has been strangled. If the domestic miner were put on equal terms with the India miner by a higher specific duty per pound on all mica that has been prepared for the consumer beyond the untrimmed state, the domestic mines would soon be put in such shape that they could stand as well as any other industry. And with the machinery and larger oper- ation, lower the cost of mining much below what it is now, and give the consumer hia product at about the present market rates. Some protection is needed against the phlogopite species of mica (Canadian amber), because it is mined from soft rock and is a soft mica, therefore less costly to work than the muscovite species. An equal duty should be put on built-up plate as on- thin split sheets, so that the building up will be done in this country rather than in Europe or India. With these differences in cost between the production of foreign mica and the domestic as shown, and asking only that the domestic miner be put on the same basis as the foreign miner, we insist that we must have a very much higher specific duty than heretofore on muscovite mica that has been prepared for the consumer beyond the untrimmed sheet stage. On the phlogopite species mined in Canada we do not require any higher duty than we have heretofore had. The Dingley Act made two classes of mica, using the words "rough trimmed" for the class on which 6 cents per pound specific was imposed, and the words "cut or trimmed " for the class on which 12 cents per pound specific was imposed. This has caused the Treasury officials and the domestic miners much trouble, for it has been difficult to determine where rough trimmed ended and cut or trimmed commenced. The India miner trimmed his mica closer and closer to get rid of the more weight, and yet there was practically none coming in under the higher classification. Then the Treasury officials took notice, and a case was tried lately in New York (decision No. 20677), and the importer lost. But further litigation must be gone into if the same word- ing is used and step by step the question decided. What constitutes rough trimming and what cut or trimmed? The word "thumb" should be substituted for the word ''rough," and thus make a clear distinction between the classes. For these reasons we suggest the following wording for the mica schedule in the tariff act: "Mica, unmanufactured or thumb trimmed only, 6 cents per pound and 20 per cent ad valorem. Muscovite species of mica, when trimmed or cut or split to less than five- thousandths of an inch in thickness, 25 cents per pound and 20 per cent ad valorem. Phlogopite species of mica, when trimmed or cut or split to less than five-thousandths of an inch in thickness. 10 cent? per pound and 20 per cent ad valorem. Mica plate or built up mica, and all manufactures of mica or of which mica is the component material of chief value. 25 rents per pound and 30 per cent ad valorem." If this were done scores of mines will be started at once mining mica in this country. Thousands of hands will be employed in mining and as many more will be put to work trimming, cutting, and generally preparing the product for the consumer. W. VANCE BROWN. B. C. GRINDSTAPP. MICA. To tie roU./i-tnrs of tie. sivtrnl ports irJxre mica is being entered for importation: We report fully a?k that: you revise the system of classing mica for duty as it has for sonic timo IMHMI practiced, and for your assistance we lay before you the following tacts and argument: SCHEDULE B. 559 PARAGRAPH 91 MICA. Generally speaking, mica is being imported in the following forms: (1) Variously trimmed with sickle knife, shears, or machine, irregular in shape, sometimes nearly rectangular. (2) Splittings or films. (3) Cut to rectangular or some other definite shape. (4) Built-up plate in various forms. There are some other forms in which mica is being imported, but these will cover the bulk of it and they are all we now wish to call your attention to. The trimming of mica has been carried to such a point during the past few years that there is now practically no "unmanufactured" nor "rough trimmed only" mica imported into the United States. The Dingley Act read: "Mica, unmanufactured or rough trimmed only, six cents per pound and twenty per centum ad valorem; mica, cut or trimmed, twelve cents per pound and twenty per centum ad valorem." The new act reads: "Mica, unmanufactured, or rough trimmed only, five cents per pound and twenty per centum ad valorem; mica, cut or trimmed, mica plates or built-up mica, and all manufactures of mica or of which mica is the component mate- rial of chief value, ten cents per pound and twenty per centum ad valorem." So that the wording is practically the same in both laws for the "unmanufactured or rough trimmed only" class. The practice has been to put under the lower classification all imported mica except such as was cut to some definite size or shape. Under this rule there was even yet much evasion of the higher classification by mixing a great number of sheets cut to various sizes and packing them loosely in the case, or by marking on the edge of each piece a line to indicate it would yet be cut again to make it a size mentioned in standard lists that are used by the trade. This matter came before the Board of General Appraisers in case No. 20677 Protest No. 315568 and was decided against the importers. But this only settled a very extreme case, and we claim that there is yet much mica coming in that is so trimmed and manufactured that it should pay the highest rate of duty. To better explain this we describe briefly the process of manufacturing mica. When mica is first mined put it is in rough blocks of various shapes, size, and thick- ness. These blocks are split to about one-sixteenth of an inch in thickness and the sheets sorted according to what size can be cut out of each piece in sound glass-like material. On the edge of each piece is some unsound material that is only fit for grinding into ground mica, and it is usual for the miner to at least roughly trim this off the piece before it is packed for sale to the dealer in or the consumer of the mica. Some miners further advance their product to the condition used by consumer before they dispose of it. Understand that this trimming is first of all done to get rid of the unsound material on the edge, but the closer it is trimmed to any desired or expected pattern the less waste there will be in cutting it to the desired pattern, and the less specific duty there will be to pay on it. And, therefore, very properly in both the new and old tariff law the lower classification read ' ' unmanufactured or rough trimmed only," and tie higher classification "cut or trimmed," not "cut and trimmed," as the appraisers worded it in their decision in case No. 20677. So, then ; the difficulty lies in distinguishing between what is "rough trimmed only" and what is "trimmed." It may be difficult for the inexperienced to draw the line closely between them under certain conditions, but as the bulk of the imported mica is now prepared, it is easy to see it is much more closely trimmed than could be termed "rough trimmed only." We claim that practically all the Indian, and much of the Canadian that is imported, is closely trimmed; very far beyond what could reasonably be called "rough trimmed only. ' ' And this is the case whether it has been trimmed with the sickle knife, shears, or machine. In every case they are trimming it so closely that there is little waste getting it to any desired shaped pattern or rectangular size, and it should be classed as "trimmed' ' and pay the highest rate of duty. Imported trimmed mica is not sold in the United States as rough trimmed, but as closely knife trimmed or closely shear trimmed; the importers' catalogues usually state "closely trimmed." In the London markets, where much of the Indian product is sold for export to the United States, it is usually called ' ' uncut' ' when sickle trimmed ; but also ' ' trimmed. ' ' "square trimmed,' ' "Calcutta trimmed," "circular trimmed," and other terms to designate the kind of trimming that has been done. But it is all "trimmed" until it reaches the United States customs, where it now passes as "rough trimmed only." The distinction between roughly trimmed and trimmed is well known and recognized among both the domestic and foreign producers, and why should it not be recognized when classing mica for duty? 560 TABIFF HEARINGS. . PABAGBAPH 91 MICA. We ask that all this trimmed mica (embraced under (1) on first page) as now pre- pared, be placed in the higher class and pay 10 cents per pound and 20 per cent ad valorem duty, until the foreign producer leaves his mica in a less advanced condition. The next step in the manufacture of mica is to take these trimmed pieces and either: (a) Split them with a hand knife to less than two-thousandths of an inch in thickness into what are termed "films" or "splittings." Several machines have been tried for this work, but so far they have not been so satisfactory as the hand work, and the bulk of it is yet done with hand. Understand, it is trimmed first and then split. Before good marketable splittings can be manufactured from the sheet, it is essential that each piece be closely not roughly trimmed. The law says "rough trimmed only" (notice the word "only") or "unmanufactured" in the lower classification, and "trimmed" and "all manufactures of mica" in the higher classification. So here we have a case where there can be no question of how much trimming has been done, for it is also manufactured (split). The material (films or splittings) is not "unmanu- factured " nor "rough trimmed only," and it is "trimmed," and it is "manufactured." Some years ago trimming before splitting was not demanded by the trade, and we imagine it was then the evasion first began. They used to take sheets that had been trimmed very little, if at all, in fact were roughly trimmed if at all, and split them thin to films. And as it is more difficult to notice the trimming after the mica is split to films than before, no doubt the difference was overlooked until the custom was estab- lished. Our attention was not called to it until we were called as witnesses in case No. 20677, above mentioned. We may state that the labor cost of doing; this splitting in the United States is 10 cents and 11 cents per pound, and there is about 10 per cent wastage of the mica in manufacture. We ask that all films or splittings (embraced under (2) on first page) be placed in the higher class and pay 10 cents per pound and 20 per cent ad valorem, as they should properly do. (b) Or the sheets may be cut to definite size or pattern embraced under (3) on first page. These sizes or patterns are innumerable. The term is "cut" (not "trimmed") to size or pattern. It would be a stretch of the word to say trimmed to size or pattern. To get a pattern out of sheet mica it is cut with either a die or shears. It can be trimmed closely to the pattern or size desired, but to get cut mica as the trade demands, it must be cut, and then it is known as "cut mica"; and while considered generally as a finished product it is sometimes again cut down or changed in shape, so that it is difficult to determine what is a finished product in mica. For the purpose of assessing duty, cut mica is now put in the highest class, but until case No. 20677, above mentioned, was decided, quantities of it came in under the lower classification; and the same thing may occur again, and is in fact, we believe, now being done, by so closely trimming the sheet that there would be, or is, but a small loss of weight to cut the pattern required. It is easy to determine "cut mica," and that is the reason we say case No. 20677 was an extreme one, and easy to decide. But as the law is worded "cut or trimmed," there is no more reason why closely trimmed mica, as now prepared by the foreign producer, should pay only the lower duty, than there is for the better known and determined cut mica. We ask that mica that has been trimmed closely to rectangular or some other definite shape be classed in the higher class the same as "cut" mica. Another step in the manufacture of mica is to take the films and build them up, layer upon layer, with some binder like shellac between the layers, until any desired thickness and size is formed. This is used in innumerable ways, shapes, and patterns, and is called by several trade names, or in general "built up mica." Cut mica is also used for building up, but not so generally as the films. Both are sometimes used with paper or other sheet material for making insulating material, any of which would be classified in the highest class under the new law. We, therefore, respectfully request that you have this matter investigated, and if necessary try a case on films first, and another on trimmed mica as now being imported. We will be glad to further post you on any facts in regard to the matter so that our contention can be settled on its merits. Yours truly, ASHEVILLE MICA Co., Per W. VANCE BROWN. THE GREAT SOUTHERN MICA Co., By H. F. SEYMOUR. SEPTEMBER, 1909. SCHEDULE B. 561 PARAGRAPH 91 MICA. BRIEF OF WATSON BEOS., BOSTON, MASS. WATSON BROS., Boston, Mass., February 14, 191t. 0. W. UNDERWOOD, Chairman Committee -on Ways and Means, House of Representatives, Washington, D. C. DEAR SIR: Yours of January 20 received. In regard to duty on mica, all that needs to be said can be said in a few words. As we are importers and also miners in this country, we are quite able to see both sides of the question. Undoubtedly a duty is necessary to protect domestic mining, not so much on account of difference in cost of labor as owing to the fact that in this country there are no mines that produce large quantities. Most of the product is the result of many small operations. Speaking for ourselves, we do not object to the present ad valorem duty, out we do object strongly to the specific duty of 10 cents per pound on cut and 5 cents per pound on uncut mica. As most of the mica produced is small in size, and the smaller the size the less the price, you can see that the specific duty will mean anywhere from a small per cent to one of 100 or 200 per cent, as con- siderable mica is bought and sold as low as 10 cents, 5 cents, and even less, per pound. Should your committee, in its wisdom, think that some compensation should be made for the specific duty, the ad valorem duty might be increased. There is great difficulty in classifying mica under the present specifications. We submit that these classifications are needless; that the ad valorem duty covers it all. As the price of cut mica is in proportion to its quality, the waste and labor is paid for in the higher rice. For instance, a pound of uncut mica costing $1 would pay 20 per cent and 5, or 25 cents per pound in all. Whereas a pound of cut mica, owing to the fact that usually half is wasted in cutting, would pay double the price, or $2. This at 20 per cent and 10 cents is 30 cents. As against this slight difference in favor of cut mica is the great difficulty of drawing the line between cut and uncut mica, as it comes from some sections roughly trimmed in square shapes. As this is generally trimmed over imperfections, the waste is somewhat less, but the first cost is higher, and in the additional price pays its proper duty. We respectfully ask that there should be one rate of duty, and that ad valorem, and but one description, and that the word "mica"; that anything in the shape of mica pay, say, 20 per cent ad valorem. Yours, truly, WATSON BROS. LETTER OF THE M. & G. MICA CO., PYRITON, ALA. PYRITON, ALA., January 21, 1913. Hon. J. THOMAS HEFLIN, LaFayette, Ala. DEAR SIR: The importers of mica are asking for a large reduction of the tariff on mica, while the Ashville Mica Co., in common with us and other domestic producers, are anxious that the present tariff thereon should be maintained. We insist that the tariff on mica should not be reduced for the very good reason that domestic pro- ducers of mica can not possibly compete with India mica if the present tariff were removed, or even reduced. The India mica, which is mined with labor that costs only from 10 to 20 cents per day, and even aside from the cost of labor is much more easily mined and less expensive to mine than mica in this country, would, if allowed to come in here without proper tariff restrictions, simply put every mica miner in the United States out of business and close every mica mine in this country. We have spent a large amount of money in your State and district in an effort to develop our property here and to pave the way for putting Alabama in the front rank as a mica-producing State. As fine mica as there is in the world is in the State of Ala- bama, and if the tariff is let alone the mining of mica will certainly become one of the prosperous industries of this State. Otherwise, it will be impossible to produce it here except at a great loss, and as you know that is not what men go into business for. We have what is said to be the best mica-mining plant in the United States, and we are operating it on a good mine that we have just opened up after two or three years of hard development work. So far we have not had a dollar in return for our large outlay, but if let alone we will pull through all right; but if the tariff on mica is reduced or removed it will simply mean that our expenditures here go for naught; 78959 VOL 113 36 562 TAEIFP HEARINGS. PARAGRAPH 91 MICA. that our lose is complete and our property worthless, because under such conditions we could not operate it. We will greatly appreciate your consideration of this matter and anything that you may see fit to do for us, or rather to protect the interests of domestic mica producers from injury, or we may say ruin, from such drastic legislation as the importers of mica are asking for. Such a reduction of the tariff on mica as they haye demanded, considered strictly from an economic standpoint, or more properly as an economic question, with- out reference to the interests of any particular class of people interested in the mica business, compels the conclusion, first, that the consumers of mica would not be bene- fited in the least if this reduction were made, because the present combination of importers could and doubtless would depress the price of domestic mica to the point where domestic production would be impossible and then put the price wherever they pleased and make the consumer pay it; secondly, it would decrease rather than increase the revenue to the Government derived from the importation of mica; and lastly and in a nutshell the mica-mining industry in this country would be com- pletely destroyed, and without benefiting anybody whatever except the combination of mica importers. Thanking you in advance for any suggestions or advice you may care to offer us in regard to the subject herein referred to, we beg to remain, Yours, very truly, M. & G. MICA Co., By EDWIN J. FORREST, Superintendent. BRIEF OF THE KEENE MICA PRODUCTS CO., KEENE, N. H. KEENE, N. H., January 18, 191S. The WAYS AND MEANS COMMITTEE, Washington, D. C. GENTLEMEN: We understand that there was recently a hearing before you regarding the tariff on mica, and that the importers have appeared before you with a request to have the tariff reduced on raw mica. We beg leave to state that we are producers of domestic mica in a somewhat large measure and anticipate extending our operations considerably along this line in the near future, and desire to have at least the protection against the foreign product that already exists, as on the last revision of the tariff the duty was lowered 20 per cent, and is at the present as low as the domestic miner can stand. In fact a further reduc- tion would, in all probability, make it impossible for us to continue producing mica in this country at all in a profitable manner. We have discovered large deposits of mica in this State, and if we can retain the pres- ent protection, or even a little more, against the foreign product it will become, within a short time, a very large industry. A large proportion of the mica used in this country has heretofore been imported, and the chief reason for this is that the largest users of and dealers in mica have sent the men best posted on preparing mica for its various uses to India and Canada, which has resulted in the foreign mica becoming the best selected and prepared for the various uses, whereas the domestic miner, as a rule, is unfamiliar with the various uses his product is put to, and is not so well posted in preparing it for use. However, the producers in this country are gradually becoming better posted on the selection and preparation of their products, which will shortly result in the change of these conditions, as we think the users will readily buy the domestic as the Indian mica, which will give the production of the domestic mica a new impetus. Trusting that you will find it advisable to avoid a further reduction of the tariff, and will give us the protection that is absolutely necessary for our welfare, we beg to remain, Yours, respectfully, KEENE MICA PRODUCTS Co., DONALD WALING, Treasurer. SCHEDULE B. 563 PARAGRAPH 92 POTTERY. PARAGRAPH 92. Common yellow, brown, or gray earthenware, plain, embossed, -or salt- glazed common stoneware, and earthenware or stoneware crucibles, all the foregoing not decorated in any manner, twenty-five per centum ad valorem; yellow earthenware, plain or embossed, coated with white or transparent vit- reous glaze but not otherwise ornamented or decorated, and Rockingham earthenware, forty per centum ad valorem. POTTERY. EXCESSIVE DUTY ON POTTERY IMPORTS. ST. Louis, April 4, 1918. Hon. 0. W. UNDERWOOD, Washington, D. C. DEAR SIR: In regard to excessive duty on imports, I beg to call your attention to one classification on which, even to me, a Republican, the duty seems absurd. I refer to cheap, bulky, unglazed pottery, such as flower pots; also to cheap, bulky, glazed pottery, such as jugs and earthenware bottles and receptacles of many shapes and sizes. Now, these goods are all very bulky. They hold a great deal of air, being "empties." Being so bulky and clumsy to pack and ship the freight is very high in proportion to the low prices at which they must be sold, which in itself is sufficient protection against sharp competition by foreign labor. To protect them from breakage in long voyages and repeated transshipments by rail with so much handling and rehandling, thev must also be packed with extra care and heavy crating or cases, all of which adds to the freight cost. It is ridiculous to think that American labor, even at high wages, is not sufficiently protected in this case by the great distance and high freights. It has been our need to import an article of unglazed cheap brown pottery, which the potters in this country are not skillful enough to make, but which those of Europe can make, and the duty of 25 per cent and the high freights make it difficult to do the business at all. Yet the article must be sold at a low price, owing to its cheap fabric and cheap appearance. If it was admitted duty free it would not be a hardship to American labor. Yours, truly, H. B. SCAMMELL, President. TARIFF ON STONEWARE. AKRON, OHIO, December 26, 191t. Hon. 0. W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: We note that the congressional committee, of which you are chairman, is to hold a hearing to consider matters pertaining to the question of tariffs on Jan- uary 8, 1913, and as we are especially interested in Schedule B, covering chemical stoneware, we beg to say that this industry, being now protected, as we understand it, by 25 per cent only ad valorem, would be in case of a reduction so seriously crippled that 'it would in all probability result in a cessation of this industry in the United States. Our skilled American workmen in this industry are now earning an average of $3.50 per day, whilst the wages paid by our foreign competitors is considerably less than one-half of this amount. You will therefore see that the imported article can be and, in fact, is shipped into this country in large quantities, and is the most formidable competition with which we have to contend . In view of these facts and in the interest of the chemical stoneware manufacturer and his employees we trust that your honorable body will deliberate against any further reduction in the present rate of tariff. Obediently, yours, in the interest of America and Americans. THE U. S. STONEWARE Co., Per J. M. WILLS, President. 564 TARIFF HEARINGS. PARAGRAPHS 92-94^-POTTERY. PARAGRAPH 93. China, porcelain, parian, bisque, earthen, stone, and crockery ware, includ- ing clock cases with or without movements, pill tiles, plaques, ornaments, toys, charms, vases, statues, statuettes, mugs, cups, steins, and lamps, all the foregoing wholly or in chief value of such ware ; painted, colored, tinted, stained, enameled, gilded, printed, or ornamented or decorated in any man- ner; and manufactures in chief value of such ware not specially provided for in this section, sixty per centum ad valorem. PARAGRAPH 94. China, porcelain, parian, bisque, earthen, stone and crockery ware, plain white, plain brown, including clock cases with or without movements, pill tiles, plaques, ornaments, toys, charms, vases, statues, statuettes, mugs, cups, steins, and lamps, all the foregoing wholly or in chief value of such ware, not painted, colored, tinted, stained, enameled, gilded, printed, or orna- mented or decorated in any manner ; and manufactures in chief value of such ware not specially provided for in this section, fifty-five per centum ad valorem. STATEMENT OF W. S. PITCAIRN, IMPORTER OF CHINA AND EARTHEN WARE, NEW YORK CITY. The CHAIRMAN. The next speaker on the list is Mr. William S. Pitcairn. To which paragraph do you address yourself, Mr. Pitcairn? Mr. PITCAIRN. Paragraphs 92, 93, and 94. I represent the importers of English china and earthen ware in the city of New York. Earthenware with the present duty of 55 per cent and 60 per cent is one of the highest-protected industries on which ad valorem rates are imposed. Under the present tariff American earthenware is protected by a nominal duty of 55 per cent on the white and 60 per cent on the decorated ware, whicn does not represent the full burden levied upon this commodity. The exorbitant character of the present tariff on earthenware can be best illustrated by a comparison of the selling prices of the English and domestic products. Tne comparison is simplified by the fact that the American factories adopted the English sterling scale at an established ratio of 88 per pound. In the illustrations which I shall give quotations are those of the best makers in each country, stand- ard brands of ware, in usual wholesale quantities. The figures rep- resent actual transactions at current prices in 1912. I wish to submit to you, gentlemen, a plate manufactured by Johnson Bros., of England, white granite, a common everyday white ware that goes into use by millions of people. I also offer in comparison a plate of Knowles, Taylor & Knowles, of the United States, white ware, and sold to the same class of con- sumers. The landed price of Johnson Bros.' product at the port of entry represents for a 100-piece dinner set, which is what you have been considering, $4.80. The selling cost, without a cent of profit, is $4.80 on the dock. The selling price of the Knowles, Taylor & Knowles product, a similar class of ware, is $3.36 per set. SCHEDULE B. 565 PARAGRAPHS 92-94 POTTERY. I also offer for your consideration a sample of a product of another prominent English manufacture, this plate being white and gold, the class of decoration that is very popular at the present time. This costs, duty included, landed at a port of entry like New York or similar port, $8.48 per 100 pieces, wliile the American company, who have complimented them by copying the decoration which I show to you now in their book, have a price for the same set of $6 per 100 pieces. There is a difference of 42 to 44 per cent. The English ware costs that much higher than the American selling price of goods that now stands before you, the same class, going to the same people, and the same production. The CHAIRMAN. If it will not interrupt, I would like to ask a ques- tion right there. Mr. PITCAIRN. Yes, sir. The CHAIRMAN. I would like to see a competitive tariff all along the line, and I will reserve the right to change my mind if any tes- timony comes before me to change it. It looks to me like this schedule on paragraphs 92, 93, and 94 is quite a competitive affair, more competitive than most of the paragraphs and most of the items we have to deal with. If there is any block in that competi- tion along certain lines, of course when you get to that point, we will be glad to have it pointed out. When we see the large amount of importations as compared to the American consumption, I believe we can ah 1 concede it is competitive as regarded from top to bottom of these two paragraphs 93 and 94. If there is a block along the line where certain articles are not competitive, I would be glad for you to point out to me if you can where that block exists. Mr. PITCAIRN. Yes, sir. Paragraph 92 is a dead letter, as your figures in the Treasury De- partment show. It is impossible for us to-day, with that class of merchandise, to pay the freight across the Atlantic Ocean without any duty at all. The CHAIRMAN. I am not talking about paragraph 92. Mr. PITCAIRN. Paragraph 92 is important also, if you do not mind. We used to sell those goods to you, and I am still importing them. The CHAIRMAN. I am inclined to agree with you that paragraph 92 is not competitive like the other two. But what I was talking about is this which comes under paragraphs 93 and 94. That strikes me as quite competitive. Mr. PITCAIRN. These which I have shown you are under 93 and 94. The American potter sells this identical proposition, as I said before, costing $6 per set, against the foreign merchandise $8.48. It is no marvel, Mr. Chairman, that the imports from old England, of the class of goods which I have submitted to you here as representing the earthenware, have gone from $4,500,000 to $2,000,000. Mr. PETERS. At the same time, have not the importations from Germany increased ? Mr. PITCAIRN. I am speaking of the matter of earthenware, and specifically the English earthenware, because it most directly comes in contact with productions of the American factories. Xinety per cent of that, approximately, is this class of ware, and when we did 566 TARIFF HEAEINGS. PARAGRAPHS 92-94 POTTERY. $4,500,000 of business, we were doing a pretty good business, with a great deal of courtesy to the American consumer. The American factories progressed, and they have all the advantages over us, but that is no reason why a prohibitive tariff should be put on, so we could not compete at all. If this thing goes on very mucn further, schedule 94 will be in the same class with schedule 92. We will be put out altogether, and then they will have the market to themselves but I presume that is all right. The CHAIRMAN. I am interested in this proposition because I want to get the facts. I notice that in 1896 there were $8,000,000 imported and in 1895 $8,000,000. In 1910 the imports increased to $10,000,000 and in 1911 to $10,900,000, and last year fell down to $9,615,000. It appears from our figures that the total consumption of articles under this paragraph was $34,000,000. You say that importation is over 25 per cent of the imports on these two paragraphs as compared with the American consumption. I do not know whether you are familiar with the tariff schedule or not, but that is a very large importation in comparison to the aver- age paragraph in the tariff schedule, and taking it as a whole it strikes me as quite competitive, reserving the right to change my opinion if you gentlemen can convince me. That is what I want to draw out. I want to see where there is a block, if at all. Mr. PITCAIRN. In the total importations I ask if you will kindly think of the matter of the English earthenware, because that is the bulk of all earthenware that reaches this country. The Americans do not make china, except incidentally. Of their $17,000,000 they do not produce more than $2,000,000 of china. I think those are about the figures; I am not speaking in exact dollars and cents. So that earthenware has gone down from $4,500,000 of English alone to $2,000,000 in English alone. As I said before, if the tariff remains as it is, English ware or any earthenware I say English because it is the bulk will be greatly eliminated from the market, and it will be, as I said before, in the same position as paragraph 92. The CHAIRMAN. Do you contend that most of these importations are in china, and not earthenware ? Mr. PITCAIRN. Your figures on that will prove that to you. They are 4 to 1, I believe, viz, $2,000,000 earthenware against $8,000,000 china. The CHAIRMAN. Where do you make the distinction between earthenware and chinaware ? Mr. PITCAIRN. We formerly had that distinction; before 1883. They were classified together again afterwards as one proposition, and in the schedule we present to you to-day we ask you once more to divide between earthenware, as it goes to most of the consumers, and chinaware. We ask you to separate china and earthenware. Mr. PETERS. What rate do you suggest on earthenware under this division ? Mr. PITCAIRN. I should like to present that matter to you fully. I should like to suggest the competitive figures we are dealing with. The landed cost we are dealing with as against the American market should be brought to your attention. SCHEDULE B. 567 PARAGRAPHS 92-94 POTTERY. Here, for instance [indicating], is a white and gold plate that cost $8.48. Here [indicating] is the same identical production that they sell at $6 per set. They are 40 per cent higher on the cost of the ware on the dock in New York than the same merchandise is sold for in East Liverpool. We want to be quite as generous as possible and still remain in the business of old English earthenware. We suggest a tariff rate at not to exceed 30 per cent. The CHAIRMAN. That is, on earthenware ? Mr. PITCAIRN. Yes, sir. These gentlemen, Mr. Burgess and Mr. Wells, appeared before you yesterday representing the "infant industry," and, with all its frail- ties, I have always noticed in the last 20 years it has a pretty lusty voice. This committee was informed yesterday morning by Mr. Burgess and Mr. Wells, representing these American potters, that their profits were restrained to about 7 per cent because of compet- itive conditions with foreign ware. These [indicating] are the wares they compete with directly. Earthenware is then* product. The CHAIRMAN. 1 may be wrong about this, but let me ask you this question. You refer to the English earthenware. I heard there was a good deal of competition in this class of earthenware coming from Austria? Mr. PITCAIRN. There is no earthenware from Austria. The CHAIRMAN. It is all china? Mr. PITCAJRN. Yes, sir. The CHAIRMAN. There is no earthenware ? Mr. PITCAIRN. No. I think I may say safely that 90 per cent of the importations of earthenware are from Great Britain, and always have been so. The CHAIRMAN. That which comes from Austria is china ? Mr. PITCAIRN. Yes, sir. That is the thing we suggest differen- tiating. As I say, these gentlemen informed this committee yesterday that their profits were restrained to about 7 per cent because of the com- petitive condition with reference to foreign wares. As a matter of fact, these are their prices, and there is a difference of 44 per cent between their selling price and our cost price, and I do not quite see the evidence of restraint. Mr. Burgess took occasion to mention that a very important English competitor, Johnson Bros., a few years ago, declared a divi- dend that he considered large. Johnson Bros, are one of the largest sanitary manufacturers in England. Mr. Burgess carefully omitted to mention the fact that they were the largest sanitary manufac- turers in England, and that in the year he referred to they had had a very successful year, and that the bulk of their large profit came from the sale of that sanitary product, which is absolutely prohibited from importation into this market at 55 per cent duty, and I doubt if there nas been any importation of it in 10 years. So when you come to consider those alleged large profits, kindly refer to the lact that it is on sanitary ware, in which the American market holds practically a monopoly. 568 TARIFF HEARINGS. PARAGRAPHS 92-94 POTTERY. In addition to the present tax of 55 and 60 per cent, we wish to emphasize the substantial protection afforded by the heavy expenses of bringing earthenware to this country from England. The freights from Staffordshire to Liverpool and sea freight to an American port, such as New York, Baltimore or Philadelphia, amount to approxi- mately 15 per cent in the value of the cheaper grades of ware and 10 per cent on the best grades. The Atlantic sea freight alone has been increased in the last three years over 200 per cent, and the sea freight on a crate has advanced from 80 cents to $2.50. The CHAIRMAN. Let me ask another question at this point. How much do you say is the amount of the American consumption of that class of earthenware that you have before you; that is, all that will be classed in schedules 93 and 94 as earthenware ? Mr. PITCAIRN. You are speaking of consumption ? You are speak- ing of the table wares which we are discussing, and you are not refer- ring to the sanitary ? The CHAIRMAN. The sanitary wares are all under schedule 92, are they not ? Mr. PITCAIRN. It is not, as a matter of fact. There is none in there. I do not believe No. 92 covers sanitary ware. The CHAIRMAN. I think it is in 93 or 94; that is, to the best of my knowledge and belief. They produced $15,000,000. We im- ported $2, 000, 000, approximately, we will say. That is $17,000,000 lor the two. You think the total consumption of that class of earth- enware is $17,000,000? Mr. PITCAIRN. I am speaking now of selling values. I do not know what the consumption price would be, but there is $15,000,000 of theirs and $2,000,000 of ours. The CHAIRMAN. I am talking about the wholesale or import prices. Would not that be correct ? Mr. PITCAIRN. If you are trying to reach the consumption, you would have to add our factory cost and the freights and the duties at the port. That would make our importations about $2,500,000 and the domestic production approximately $15,000,000 for that class of ware. Is that clear, sir? The CHAIRMAN. I think so ; yes. Mr. PITCAIRN. Yesterday some reference was made to the matter of geographical protection as a sort of myth. There is no myth about the price that we pay to-day for freight to Liverpool and these other charges which accrue. For instance, Mr. Burgess stated yesterday that the sea freight from Liverpool to Baltimore was 8 cents per hun- dred pounds. The fact is the rate is 25 cents per hundred pounds quite a difference. These transportation charges alone constitute a big protection against foreign goods. Under such conditions a duty of 30 per cent on earthenware would be more than generous protection. These freights represent actual money that we pay out, and amount to approximately 10 per cent on the highest class of ware and 15 to 20 per cent on the cheapest classes of ware. If you will go to paragraph 92, Mr. Chairman, I can give you an example. I imported to the Philadelphia port 12 crates of stoneware for retorts for the use of chemical manufacturing people, on which I paid 38 per cent freight of the total value of the goods. The invoice SCHEDULE B. 569 PARAGRAPHS 92-94 POTTERY. value is 54, and the freight we paid on the Philadelphia bill was 21 or 38 per cent. The gentleman from Ohio (Mr. Longworth) asked this morning about freight from Philadelphia. I pay 20 shillings per ton cubic measure, equivalent to 50 cents per hundred pounds on similar crates. I paid that amount on that particular crate. I was in England last month trying to make arrangements for freight for another year, the rates of which have been steadily advancing. There is coalition of these steaming companies, with which I think we are all familiar. I went into every steamship company in Liverpool and London, and I could not get separate quotations from any one of them different than any other from any port there to Boston, New York, Philadelphia, Newport News, or New Orleans, and when the canal is opened they will control the same proposition up to the Pacific coast ports, and you can not get a differential of a penny. We are paying to-day, sir, 25 cents per 100 pounds for every crate containing the earthenware that we bring into the United States, and if that is not substantial protec- tion, as I have said before, I do not know what is. It causes a mighty big freight bill, and costs us a great deal of money. To insure safe transportation these packages have to be very substan- tial, and are very expensive. The ordinary crate costs at the factory $4.10 net, and plus the 60 per cent duty costs $6.55. It is very readily seen that this item is a very heavy burden on the common grades of ware, a crate containing $60, duty paid, of ware, and is inequitable because it rests most heavily upon the cheaper ware which goes to the mass of the consumers. Crates and casks are produced in America fully as cheaply as in England and are not entitled to duty at the same rate as the contents. There is another item I want to call attention to in regard to the English ware. The conditions of manufacture in England have been steadily growing against them. The Government takes a great deal of interest in the working people. They have established industrial commissions and this insurance legislation; and that, in addition to the cost of labor and coal, has forced them in the past few years to advance their selling price in the markets of the world, of which this is one, from 12^ to 22 per cent. Consequently, as I have said, we are paying 60 per cent additional duty on that advance. It is true our friends in the United States have issued a notice of advance effective January 1, 1913, of 5 per cent on the $17,000,000, which will give them another $800,000 profit to add to the $300,000 or $400,000 they mentioned the other day. But there is the matter of 22 per cent additional value as represented in your customs house, on which we are paying the somewhat extraor- dinary charge, so far as this is concerned, of 60 per cent. When the 60 per cent duty first took effect away back in 1888 or 1890, as I remember, it was assessed on the ware, assessed on the contents, and not on the package. A little after that they worked in that old "joker," as we term it, and taxed the outside package at the same price as the ware. You know, and we all know, it is inequit- able if you have these wares in a package that costs $4.50, whether the package contains this cheap-priced ware to which I have referred or whether the package contains a set worth $500. The duty on the 570 TARIFF HEARINGS. PARAGRAPHS 92-94 POTTERY. $550 crate is the same as on the $50 crate, and that fact alone is one that we think is iniquitous. The American manufacturer produces his crate just as cheaply as we do in England. There is no question about that. When we get our crates and casks here into the port of New York and unpacked, we give them to the drayman, because he is there to carry them away for the sake of the straw. The CHAIRMAN. That is in the administrative feature of the law. Mr. PITCAIEN. Yes; but I would like to have it considered. We hope some day you will not forget this is a most onerous tax. The CHAIRMAN. I think the administrative features of the law will probably come up with this bill, so if you have anything to say on that proposition, we will be glad to have you file it with your brief. Mr. PITCAIRN. Thank you. We are recommending, Mr. Chairman, a division of schedule of earthenware and china. We strongly advocate a division of this schedule separating these classes of ware and favoring the earthen- ware products for many reasons. No. 92 has been obliterated so far as the importation proposition is concerned and so far as the revenue proposition is concerned or so far as even ordinary justice to the consumer is concerned. There is no competition; that has been eliminated. We have imported 1,000 worth of stoneware for these chemical and powder manufacturers, who still insist they want the old British quality to which they have been accustomed for so many years, and in spite of those disadvantages they still take some of that; but other- wise the importation of the common grades of ware, common yellow, brown, and brown stoneware have all been eliminated, and that is in the possession of the American manufacturer with no competition. The only thing we fear is that you shall bring paragraph 94 into the same condition. If we have gone from $4,500,000 to $2,000,000, as I have explained it to you, it will not be very long before we wipe out the rest, so far as competition is concerned. As I say, we urge the separation of earthenware from china. The sale of earthenware has been almost eliminated by reason of the high prohibitive rates of 55 and GO per cent duty in force. English earthen- ware imports have decreased fiom $4,500,000 in 1892 to $2,000,000 iu 1912, as I have previously stated. In the same period the domestic production increased from '8, 800,000 to approximately $17,000,000. We think the domestic industry would be helped and not injured by allowing competition with English ware, and that without this stimulus and incentive would deteriorate both in quality and effi- ciency. We advocate it on both grounds. The American manufac- turers themselves advocated it several years ago. They said then that there is no reason why they should be put together any more than silks and woolens, and we rather agree with them. We claim finally that the American potter has practically solved the problems in the matter of earthenware manufacture so far as such problems ever will be solved. He is no longer an infant, but has passed into the stage of full maturity and no longer requires the pro- tection that is almost prohibitive to us. We therefore ask relief from the. exorbitant, unnecessary duty of 55 and 60 per cent and urge a rate of 30 per cent on earthenware and 35 per cent on china as abun- SCHEDULE B. 571 PARAGRAPHS 92-94 POTTERY. dant, fair, and equitable, both to the manufacturer and to the con- sumer. The CHAIRMAN. I can see the force of your argument on this earthenware proposition, but why do you advocate a lower rate of duty on china when you say that is where all this competition lies ? Mr. PITCAIRN. No, sir; I say all the competition lies in earthen- ware. They are manufacturers of earthenware, just as we are. The CHAIRMAN. But I am talking about the great bulk of these imports that are coming in, as I understood you, which are in the china portion of the schedule, and that it was not in earthenware. Mr. PITCAIRN. That is correct. The CHAIRMAN. Therefore there ought to be a reduction on earthen- ware, but if your argument is correct that would show that the com- petition on chinaware has made it even more competitive than my figures would show, when they are all classed together. Mr. PITCAIRN. How will they compete if they do not produce the goods ? They are not producing chinaware, except hotel china. The CHAIRMAN. Who are not ? Mr. PITCAIRN. The Americans. The CHAIRMAN. Do you mean there is no chinaware made in this country ? Mr. PITCAIRN. There is about $1,700,000, according to the last figures they quoted. The CHAIRMAN. And chinaware is largely a luxury, is it not ? Mr. PITCAIRN. There is a great deal of very moderate priced china, from the continental countries particularly. The CHAIRMAN. The competition I am talking about is the com- petition that comes from other countries, not competition here at home. I am talking about your competition witn the American manufacturers. Mr. PITCAIRN. I have shown that we are not in a position to com- pete. The CHAIRMAN. On your earthenware; but there must be a very considerable competition on chinaware ? Mr. PITCAIRN. Competition with the American product ? The CHAIRMAN. Yes. What do you say is the amount of impor- tation of chinaware, and how much do the American manufacturers produce ? Mr. PITCAIRN. The importations last year, I believe, "were about $10,000,000. Two million dollars of that, I think, was earthenware. The CHAIRMAN. I am talking about china. Mr. PITCAIRN. I am getting down to that. Eight million dollars of it was china. About $4,000,000 of that, I should assume, or one- half of that product, was noncompetitive goods that are not pro- duced in this country at all. The CHAIRMAN. Those are in the noncompetitive articles and in the class of luxuries ? Mr. PITCAIRN. I do not know how far it would be in the nature of luxuries. The CHAIRMAN. That is what I am trying to draw out, to find if you do know. 572 TARIFF HEARINGS. PARAGRAPHS 92-94 POTTERY. Mr. PITCAIRN. I am totally interested in the British ware. So far as the English china is concerned, we concede it is a luxury. It is well made, carefully made, and is very costly. We therefore think the tariff on that is not material. People that have the money will buy it, and probably will be glad to pay for it. The CHAIRMAN. And they are the class of people that can well afford to pay the tax ? Mr. PITCAIRN. I think that is Democratic doctrine. I submit the separation of the classification for you gentlemen to consider, if you will kindly consider it. The CHAIRMAN. Will you kindly read it ? Mr. PrrcAiRN (reading) : Paragraph 92. Common yellow, brown, red, or gray earthenware; brown stoneware; plain, embossed, or salt-glazed stoneware and crucibles, all the foregoing not decorated in any manner, ten per centum ad valorem. The CHAIRMAN. You offer that as a substitute for portions of 92, 93, and 94 ? Mr. PITCAIRN. No, sir; we offer that by itself in substitution for the present 92, as against 25 per cent. It was the feeling of our committee that we could not go very far. Personally I would advocate that it should be wiped out entirely. As I say, the geo- graphical protection has prohibited it from coming into America at all. I should like to see the competitive conditions restored. I think it is good for the men here, as it is good for us, and for the consumer also. We are suggesting merely a reduction from 25 to 10. The CHAIRMAN. You do not change the classification on that? Air. PITCAIRN. Xo, sir. The CHAIRMAN. Are you proposing a change of -classification in paragraph 93 ? Mr. PITCAIRN. Separating china from earthenware. The CHAIRMAN. Have you it there ? Mr. PITCAIRN. We suggest as to paragraph 93 the following: China, porcelain, bisque, and parian ware, composed of a nonabsorbent and trans- lucent body, not specially provided for, including clock cases with or without move- ments, and all other articles composed wholly or in chief value of such ware, all of the foregoing, plain, embossed, or decorated in any manner, thirty-five per centum ad valorem. That is to say, the suggestion would be on our part that the old differential between white and decorated should be eliminated, and they should both go in for one. The CHAIRMAN. That is to cover earthenware ? Mr. PITCAIRN. That is china. On the earthenware we suggest as covering the whole of the im- portations of that class, the following: Earthenware, stoneware, crockery, white granite, and semiporcelain, whether or not vitrified in whole or in part, or whether or not composed of a hard opaque but porous body capable of absorbing moisture, including plates, cups, saucers, and other articles or pieces such as are commonly used in breakfast, dinner, tea, and similar table sets, toilet sets, hotel ware, Pill tiles, clock cases, with or without movements, placques, ornaments, toys, vases, statues, statuettes, mugs, steins, and lamps, together with all other articles composed wholly or in chief value of such ware, all of the foregoing, plain, embossed, or decorated in any manner thirty per centum ad valorem. SCHEDULE B. 573 PARAGRAPHS 92-94 POTTERY. Rockingham, yet, and Samian ware, plain or decorated, thirty per centum ad valorem. The CHAIRMAN. Do you contend the classification as you have written it there covers all the articles that are now included in paragraphs 92, 93, and 94? Mr. PITCAIBN. Yes, sir. Mr. LONGWOBTH. I do not think I understand any better than the chairman does why you should not be recommending a lower duty on china. Mr. PITCAIRN. I personally would, owing to the fact merely that the prices of all merchandise have been pretty high, and I think the American competitor has shown by his prices that the finer ware is not interfering with his product, that tne restriction of competition is not coming from this class of merchandise. Mr. LONGWORTH. You do not agree with Mr. Jones, who spoke here this morning ? Mr. PITCAIRN. I agree very much with him. Mr. LONGWORTH. He said there was a strong, active competition between American chinaware and English chinaware. Mr. PITCAIRN. I think perhaps there is a confusion of terms in that matter. English chinaware is in a class by itself. Mr. LONGWORTH. I see you do not agree with Mr. Jones on that, do you ? Mr. PITCAIRN. I defer always to a gentleman his age, and I would not offer to disagree with him Mr. LONGWORTH. Do you think that if paragraph 93 reduced china 50 per cent the Government revenue would be increased ? Mr. PITCAIRN. You mean whether the increased importation would equalize the present revenue? Mr. LONGWORTH. Or would more than equalize it? Mr. PITCAIRN. That is always problematical. Mr. LONGWORTH. You are not interested in the revenue question? Mr. PITCAIRN. You are speaking of revenue? Mr. LONGWORTH. Yes. Mr. PITCAIRN. I should think that a reduction in selling price always mean a wider clientele. Mr. LONGWORTH. That is not what I am asking you. Mr. PITCAIRN. That is the only way I can argue, to show how much more you will increase your sales. Mr. LONGWORTH. We are talking about a reduction of duty. You advocate a reduction of duty from 60 to 35 per cent ? Mr. PITCAIRN. Yes, sir. Mr. LONGWORTH. Is it your theory the Government revenues will be increased ? Mr. PITCAIRN. No, sir. * Mr. LONGWORTH. You do not think they would ? Mr. PITCAIRN. I do not know. Mr. LONGWORTH. You simply do not know ? Mr. PrrcAiRN. I do not know. Mr. LONGWORTH. You are not interested in the question ? Mr. PITCAIRN. Very much interested, but I do not know. Mr. LONGWORTH. Then why do you advocate it, if you do not know? 574 TARIFF HEARINGS. PABAGBAPHS 92-94 POTTEBY. Mr. PITCAIRN. Because I am importing the merchandise, and should like a wider market; because I do know that at a more reason- able price I can sell more goods. Mr. LONGWORTH. All that would come in would mean displace- ment of a corresponding amount of American ware ? Mr. PITCATRN. If the Americans made similar goods, that would be so; but they do not make them. Mr. LONGWORTH. Again you disagree with Mr. Jones ? Mr. PITCAIRN. I do not know that. Mr. LONGWORTH. He said there is active American competition. Mr. PITCAIRN. I do not know about that. I am not going to go into that. Mr. LONGWORTH. You had better confine yourself to earthenware, had you not ? Mr. PITCAIRN. I do pretty much. Mr. LONGWORTH. Then why can not you leave china alone ? You say you do not know anything about it ? Mr. PITCAIRN. I am still importing china, and in the old days I used to enjoy this differential. That was back in the old days before the gentlemen you represent came in control, that I enjoyed this differential. We would like to go back to the old days. However, we are keeping just as cheerful as we can under adverse circumstances. Mr. PAYNE. I have been looking over your draft somewhat. You purport to give some actual transactions, one with Johnson Bros. English, and the other with Knowles, Taylor & Knowles, American. Mr. PITCAIRN. Yes, sir. Mr. PAYNE. Those were actual transactions, were they? Mr. PITCAIRN. Yes, sir; representing Johnson Bros.' importations. Mr. PAYNE. You are mistaken in saying that it was an actual transaction. It was not imported, was it? Mr. PITCAIRN. Yes. Mr. PAYNE. '-Vho imported it? Mr. PITCAIRX. Johnson Bros.' customers. When our committee got together we supplied each other with figures, and the class of ware Johnson Bros, make is the same as the factories here make, of about the same prices, as I have explained. Mr. PAYNE. Were these goods of a similar quality? Were the two transactions, English and American, of a similar character? Mr. PITCAIRN. There they are [displaying two earthenware plates]. Mr. PAYXE. I do not know anything about quality. I am asking you as an expert. Mr. PITCAIRX. I should think they are very similar, visually, visually similar and actually similar. Mr. PAYNE. Were they high-class goods? Mr. PITCAIRX. Xo, sir. Mr. PAYXE. Low-class goods ? Mr. PITCAIRX. Low-class white ware goods, on everybody's table. Mr. PAYXE. And invoiced for $8 per pound sterling ? Mr. PrrcAiRx. Yes, sir. Mr. PAYXE. Did you ever know of any goods sold at that rate? Mr. PITCAIRN. I said the basis of $8 per pound sterling was the established ratio for the adjustment of American manufacturers' selling prices. SCHEDULE B. 575 PARAGRAPHS 92-94^POTTERY. Mr. PAYNE. That is the average, is it not? Mr. PITCAIRN. No, sir; it is an absolute arbitrary ratio that they established for themselves. Mr. PAYNE. $8 per pound sterling? Mr. PITCAIRN. Yes, sir. Mr. PAYNE. And they are bought and sold at that rate? Mr. PITCAIRN. They are sold at that here, with a discount of 66 and 5 and 1 , as that paper shows. Mr PAYNE. You finally sum up and make the cost of the English transaction for a similar amount of goods for $388.70 laid down in New York? Mr. PITCAIRN. Yes, sir; that is correct. Mr. PAYNE. That is without any duty? Mr. PITCAIRN. That is without any duty. Mr. PAYNE. 'And the American selling price for the same class of goods you show to be $401.29? Mr. PITCAIRN. Yes, sir. Mr. PAYNE. That is a difference of something over $12 ? Mr. PITCAIRN. Yes, sir; that is correct. Mr. PAYNE. And you still say these goods were imported from England ? Mr. PITCAIRN. Yes, sir. Mr. PAYNE. And the duty on that, if it had been honestly paid at 55 cents, would have been how much ? Mr. PITCAIRN. $187. Mr. PAYNE. And were they sold on the American market? Mr. PrrcAiBN. Yes, sir; they were. Mr. PAYNE. Does any firm do such business as that as a usual thing? Mr. PITCAIRN. Every American wholesale merchant is doing just that thing. Mr. PAYNE. Everv importing house is doing that thing? Mr. PITCAIRN. All others that transact a general business are doing it, doing that same thing; yes, sir. Mr. PAYNE. How long have they been doing it? Mr. PITCAIRN. Forty or fifty years, I think. Mr. PAYNE. Have tnere been any evidences or cases of bankruptcy in that business during that time ? Mr. PITCAIRN. We have had our disasters, like all other trades. Mr. PAYNE. But there has been an ordinarily successful business, has there not ? Mr. PITCAIRN. I do not think we can boast. Mr. PAYNE. I say ordinarily successful. Mr. PITCAIRN. What do you call "ordinary" ? Mr. PAYNE. If you are an ordinary business man you ought to know, without asking the question, whether you are in an ordinary successful business or not. Mr. PITCAIRN. It is such a variable one. At times it is prosperous; at tunes it is not. Mr. PAYNE. Do you want this committee to believe that the thing has been done paying $167 more for the goods than the selling price of the same kind of American goods successfully in this market ? 576 TARIFF HEARINGS. PARAGRAPHS 92-94 POTTERY. Mr. PrrcAiRN. Not successfully. I said we were being gradually and very quickly eliminated, but we are doing that very thing. Mr. PAYNE. I understood you to say that there were $2,000,000 left? Mr. PITCAIRN. Not of the white ware. We fell down on the white ware from $585,000 in 1903 to $300,000 last year; so you can see the gradual downhill movement. Mr. PAYNE. It has been running along for 50 years on that same line? Mr. PrrcAiRN. Oh, no; you did not always have that 55 and 65 per cent hanging over our heads. Mr. PAYNE. You do not mean to say the American goods cost less 40 years ago ? Mr. PITCAIEN. They were not making any, practically speaking. Mr. PAYNE. You have had the same discrepancy, have you not ? Mr. PITCAIRN. Oh, no. Mr. PAYNE. With that duty and competition I do not know why we should not increase the duty and make it easier for you. Mr. PITCAIRN. If you want to eliminate our goods from America, go right along if you want to eliminate the goods as you did in para- graph 92. Mr. PAYNE. I do not think it will eliminate them, according to your story. We do not seem to be able to eliminate it at all. It is my opinion, if you were telling the truth about these two bills, we woulcl eliminate your entire industry in 30 days. Mr. PITCAIRX. Do you question the statement I have made? Mr. PAYXE. That is my opinion of it. % Mr. PITCAIRX. I am sorry. Mr. PAYXE. I want you to tell us how you can succeed in making money on such terms as that? Mr. PITCAIRX. Mr. Payne, are you questioning the integrity of that invoice ? I will produce the figures. Mr. PAYXE. I am only questioning your statement. Mr. PITCAIRX. I will bring the figures from the United States Treas- ury Department. Mr. PAYXE. I want to know the business you are doing. Mr. PITCAIRX. I will bring the entry from the Treasury Depart- ment and show that is what we are doing every day of our lives. Mr. PAYXE. You had better get some figures for the committee besides that if you want me to believe it. Mr. PITCAIRX. I am sorry you do not believe it. Mr. PAYXE. I do not think the Treasury Department can bring any such remarkable showing as that. But aside from that Mr. PITCAIRX. But I do not want to step aside from that at all. Mr. PAYXE. What firms are you connected with ? Mr. PITCAIRX T . I am myself in business in New York, importer and buyer for others. Mr. PAYXE. Are you also connected in any way with Dolton? Mr. PITCAIRX. Yes. sir: I am agent for them. Mr. PAYXE. What other firm? Mr. PITCAIRX. I buy in the open markets from all the rest, what ever I find. SCHEDULE B. 577 PARAGRAPHS 92-94^POTTERY. Mr. PAYNE. How large a business do the Doltons do ? Mr. PITCAIRN. Bless you, I do not know. Mr. PAYNE. A million dollars? Mr. PITCAIRN. You mean in this market or some other? Mr. PAYNE. In selling crockery ? Mr. PITCAIRN. The Dolton firm is pretty large. They have 5,000 people doing business there. I have not the figures of their produc- tion. Mr. PAYNE. You have not any idea what business they do ? Mr. PITCAIRN. Certainly not. I would tell you if I had. Mr. PAYNE. Tell us why? Mr. PITCAIRN. I haven't it. It does not concern me at all. Mr. PAYNE. How much do you sell for them as agent ? Mr. PITCAIRN. We are selling about 50,000 a year. Mr. PAYNE. What is your business in selling goods as agent for crockery people ? How much is it in dollars ? Let the pounds go. Mr. PITCAIRN. Duty-paid value ? Mr. PAYNE. I mean your firm as agent. Mr. PITCAIRN. My firm as agent is not separate from my firm as importer. I am doing business both ways. I am selling goods for people and I am buying. Mr. PAYNE. How much is the entire business you are interested in ? Answer the question, and do not try to answer something else. Mr. PITCAIRN. If I can get a clear idea of what you mean, I will answer. I am doing an agency business and my own of, perhaps, 100,000. Mr. PAYNE. How much ? Mr. PITCAIRN. Half a million dollars. Mr. PAYNE. What percentage of commission do you receive? Mr. PITCAIRN. Two and one-half per cent on the staple goods. Mr. PAYNE. On these goods you have beon describing ? Mr. PITCAIRN. Yes, sir. Mr. PAYNE. What do you receive on china ? Mr. PITCAIRN. Five per cent. Mr. PAYNE. Do you sell any goods except imported wares? Mr. PITCAIRN. No, sir. Mr. PAYNE. You deal in those exclusively? Mr. PITCAIRN. Yes, sir. Mr. PAYNE. Do you sell china? Mr. PITCAIRN. Oh, yes; a little. Mr. LONGWORTH. I thought you said you were not interested in china ? Mr. PITCAIRN. I said I sell English china, which does not enter into competition with American goods. Mr. PAYNE. Do vou import any French china? Mr. PITCAIRN. No, sir; I am dealing in English goods. Mr. PAYNE. You are only agent for those people who sell? Mr. PITCAIRN. I am agent and importer. Mr. PAYNE. You sell for other merchants on commission? Mr. PITCAIRN. No, sir; I do not sell for any merchants. Mr. PAYNE. But do they import direct from France? 78959 VOL 113 37 578 TAEIFF HEARINGS. PARAGRAPHS 92-94 POTTERY. Mr. PITCAIRN. I do not know anything about their business. I have lots to do to attend to my own business. Mr. PAYNE. You do not know whether they import direct from France or not ? Mr. PITCAIRN. Who do you mean? Mr. PAYNE. The people for whom you do business. Mr. PITCAIRN. The people for whom I do business ? Mr. PAYNE. Dolton, for instance. Do they import direct from France ? Why do you not answer my question ? Mr. PITCAIRN. My dear friend, Dolton, is a manufacturer of con- siderable standing and does not buy goods from anybody. Mr. PAYNE. They manufacture in France? Mr. PITCAIRN. No, sir; they manufacture in England. Mr. PAYNE. And they do not buy any goods? Mr. PITCAIRN. They buy the materials, of course. Mr. PAYNE. They do not buy any imported goods? Do you understand the question? I want you to answer this: Do you sell imported china? Mr. PITCAIRN. Yes, sir. Mr. PAYNE. Do you sell any that is imported direct, either by yourself or your clients or your principals, from France ? Mr. PITCAIRN. No, sir. Mr. PAYNE. It is all bought of the New York house connected with the French house ? Mr. PITCAIRX. I have nothing to do with the French china at all. Mr. PAYNE. Do you not sell French china? Mr. PITCAIRX. I only sell English china. Mr. PAYNE. Exactly; I understand you now. Mr. PITCAIRN. It took a long while. Mr. PAYNE. You suggest a new paragraph here putting in certain other wares with Rockingham ? Mr. PITCAIRN. Yes, sir. Mr. PAYNE. You tried to do that under the present law, did you not? Mr. PITCAIRN. Yes, sir. Mr. PAYNE. At the customshouse you tried to do that under the present law ? Mr. PITCAIRN. We tried to do it before the Payne committee in 190S. Mr. PAYNE. You tried it before the appraisers, did you not? Mr. PITCAIRN. We tried to substantiate our record of 1908 before tlio appraisers, because we had the understanding before the com- mittee beforehand. Mr. PAYNE. What committee ? Mr. PITCAIRN. The Senate committee, when we were present. We presented Senator Allison's letter, and Mr. Aldrich sat there and said we could get a duty of 40 per cent. Mr. PAYNE. You tried it on an understanding with Mr. Aldrich to put it in the same schedule ( Mr. PITCAIRN. We tried it on representations Mr. PAYNE. You knew the language in that paragraph did not em- brace these words, did you not? Mr. PITCAIRN. 1 know the intention was SCHEDULE B. 579 PARAGRAPHS 92-94 POTTERY. Mr. PAYNE. You know the language of that law did not embrace those words, do you not? Mr. PITCAIRN. I know it has been sp construed, but I did not know that was the intention when we put it up. Mr. PAYNE. Did you sp construe it? Mr. PITCAIRN. I certainly did, originally. Mr. PAYNE. Did the other importers with whom you do business agree with you ? Did they agree with you ? Mr. PITCAIRN. Sure; of course, they did. Mr. PAYNE. Did not some of them protest against putting in that clause and say that it was ridiculous ? Mr. PITCAIRN. No; you have the wrong idea. Mr. PAYNE. You attempted it before the Board of Appraisers and went into the Customs Court and were heard on it ? Mr. PITCAIRN. Yes, sir; and we are still fighting. Mr. PAYNE. Do you know of any association of French importers? Mr. PITCAIRN. No, sir. Mr. PAYNE. You never heard of such a thing? Mr. PITCAIRN. An association ? Mr. PAYNE. An association for the purpose of aiding the United States commission, who are trying to ferret out alleged customs frauds ? Mr. PITCAIRN. The only help I ever heard of the United States commission getting was from Mr. Burgess's visit in Paris. Mr. PAYNE. The association that had for its object the alleged assistance of the United States in getting at the correct valuation of French china or any imported china ? Mr. PITCAIRN. You will have to kindly excuse me. I am only interested in English ware. I do not know anything about the other except in a general way. Mr. PAYNE. You do not know anything about such an association ? Mr. PITCAIRN. No, sir. Mr. PAYNE. You do not know anything about whether an associa- tion or any importers of French china offered to open their books to the United States commission if thev wanted to send people over there ? Mr. PITCAIRN. I wonder if England sent a commission over here, whether our people would open their books ? Mr. PAYNE. Will you answer my question? Mr. PITCAIRN. That is all; I really do not know. Mr. PAYNE. Why not say so? Mr. PITCAIRN. I beg your pardon. Mr. PAYNE. You do not know anything about it? Mr. PITCAIRN. No, sir. Mr. PAYNE. It may turn out you do. You do not know anything about imdervalutaion, I suppose ? Mr. PITCAIRN. No, sir. Mr. PAYNE. You have heard of it? Mr. PITCAIRN. I have heard the word; yes, sir. Mr. PAYNE. You have not even got as far as Mr. Jones in the matter of suspicion about it. These English factories have advanced their goods recently, have they not ? 580 TARIFF HEARINGS. PARAGRAPHS 92-94 POTTERY. Mr. PITCAIRN. Yes, sir. Mr. PAYNE. And are still selling them? Mr. PITCAIRN. Yes, sir. Mr. PAYNE. How much did they advance? It was about 10 per cent, was it not? Mr. PITCAIRN. Two and one-half per cent on gross or 5 per cent on the net list. Mr. PAYNE. If the advance is 5 per cent, how are they able to sell at American prices and still import and pay an honest duty ? Mr. PITCAIRN. They do not sell at the American prices by 40 per cent. Mr. PAYNE. They sell at how much more than the American price ? Mr. PITCAIRN. Fifty per cent, average. Mr. PAYNE. And still quality is substantially the same? Mr. PITCAIRN. No; the products are better. Mr. PAYNE. These presented here you said were the same, did you not? Mr. PITCAIRN. No; I said they were substantially. Mr. PAYNE. I did not say identically the same; I said substantially, too. Mr. PITCAIRN. All right. Mr. PAYNE. They are substantially the same? Mr. PITCAIRN. They are ^substantially the same. Mr. PAYNE. How are you able to sell goods substantially the same as the American goods at 50 per cent more than then* price? Mr. PITCAIRN. I think we are better salesmen. Mr. LONGWORTH. Are you an American citizen? Mr. PITCAIRN. Yes, sir. Mr. LONGWORTH. I am very glad to hear it. Mr. PITCAIRX. I have been for 30 years. I desire to submit a brief, Mr. Chairman. The CHAIRMAN. You may do so. The brief is as follows: WASHINGTON, D. C., January 9, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives. DEAR PIR: I represent the importers of English china and earthenware in the city of New York. Earthenware, with the present duty of 55 per cent and 60 per cent, is one of the highest protected industries on which ad valorem rates are imposed. Under the present tariff. American earthenware is protected by a nominal duty of 55 per cent on white and 60 per cent on decorated ware, which does not represent the full burden levied upon this commodity. The outside packages, which are costly in themselves abroad, costing $4 each, are dutiable at the same rate as the contents, and this cost, with the items of shipping charges and ocean freight, amounts to 82 per cent on decorated, and from 90 to 94 per cent on white ware. The exorbitant character of the present tariff on earthenware can be best illustrated by a comparison of the selling prices of the English and domestic products. The comparison is simplified by the fact that the American factories adopted the English sterling scale at an established ratio oi *S per pound sterling. In the following illus- trations quotations are those of the best makers in each country, standard brands of ware, in usual wholesale quantities. The figures represent actual transactions at current prices, 1912. Take, for example, an importation of white granite tableware. The plain white ware is daily used by millions of consumers. Exhibit A is Johnson Bros., English. Exhibit B is Knowlcs, Taylor tk Knowles, American. SCHEDULE B. 581 PARAGRAPHS 92-94 POTTERY. /- ENGLISH No. 1. . d. 10 crates assorted white granite, 16 160 Discount, 57J per cent 92 68 Discount, 5 per cent 380 64 12 Discount, 5 per cent 3 4 6 61 7 6 a. d. 10 packages, 16s. 9d 876 Value at factory, 69 15s., at 4.88 $340. 38 s. d. Freight to Liverpool, 800 pounds 2 13 4 Dock and town dues and commission. . . 84 Consular fee 10 4 Bill lading 2 Sea freight to New York, 510 feet, 10s. ton 6 4 AO OO Value at New York port 388 70 $340 duty, at 55 per cent 187 00 Customs entry. ; 1 50 577. 20 (100-piece dinner set, $4.80.) Same assortment K. T. K. American, 160 in bulk at factory, $8 per pound, sterling $1, 280. 00 Discount 66| per cent 853.' 33 426. 67 Discount 5 per cent 21.33 405.34 Discount 1 per cent \ 4. 05 401. 29 (100-piece dinner set, $3.36.) This shows that the English ware costs 40 per cent more than the American selling price. ENGLISH No. 2. Taking the same 10-crate lot and comparing the prices without any duty the result is as follows: 10 crates English at factory $340.38 Expense to New York 48. 32 388. 70 Cost before any duty 388. 70 American selling price 401. 29 From which it is easily demonstrated that a duty of 4 per cent would equalize the cost of English white granite with the selling price of American ware of the same grade. ENGLISH No. 3. It will be both illuminating and interesting to carry this example a step further, using the same 10-crate lot as specified, and compare the percentage of labor, mate- rial, etc., between the foreign and domestic costs. The percentages quoted for England 582 TARIFF HEARINGS. PABAGRAPHS 92-94 POTTERY. are those claimed and conceded by the most prominent English potters. Those for American are the official figures quoted by Mr. Burgess, the United States potters' representative. (Tariff hearing, Sixtieth Congress. First Print, No. 28, December 7, 1908, pp. 4008, Table X.) English. American. Factory $340.38 $401.29 Fuel and materials 45 per cent.. 153.19 38 per cent 152.48 Labor and salaries . 45 per cent.. 153.19 52 per cent 208.80 Interest and profit 10 per cent.. 34.00 10 per cent 40.01 The total difference in labor cost is $56, the duty paid at present tariff is $187, which is about 233 per cent more than the difference in labor costs, as above proved. The conclusion is irresistible, the tariff on earthenware is exorbitant, excessive, and unjustifiable. As stated at the beginning, it is practically prohibitive. English imports in 1892 were 100,000 crates. In 1912, 35,000 crates. The difference in cost of production at home and in England (from which country 90 per cent of the earthenware coming into the United States is imported) can not be fairly shown by the weekly wage scale paid -to labor, and such reckoning is without value, for the unit cost of ware made by potters earning $20 per week may be less than that produced by workmen making the same article and earning $10 per week. Labor cost of an article depends on the relation between labor and output. Undoubt- edly the inequalities in the wages of the English and domestic operatives are more than equaled by the increased production by, and greater efficiency of, the latter. DECORATION It is to be specially noted that the characteristic of decoration in earthenware to-day is the gold treatment finishing each article. The gold used by potters is the same value in the United States and England, so that on this preponderating item of all decoration 60 per cent duty on gold is a terrific tax. Here is a white granite plate from Johnson Bros., England, and this other is white ware from Knowles, Taylor & Knowles, East Liverpool. The English ware cost at the port of entry, duty paid, $4.80 for a 100-piece dinner set. The domestic factory sells the same set at $3.36. Here is a white and gold decoration from the factory of W. H. Gridley & Co., England. It cost, duty paid, at the port of entry $8.48 for a 100-piece dinner set. The same identical decoration was reproduced by Homer Laughlin Co., as shown in this illustration, and is sold by that firm for $6 for a 100-piece set of the same composition . In both these examples the white and the decorated the English costs on the dock, duty paid, 40 per cent more thanthe domestic selling price at factory. And yet this committee was informed yesterday morning by Mr. Burgess and Mr. Wells of the American potters that their profits were restrained to about 7 per cent by virtue of the competition of the foreign wares. Mr. Burgess took occasion to mention that a very important English competitor Johnson Bros. declared a few years ago a dividend of 66,000. He carefully omitted to mention that Johnsons are the largest sanitary manufacturers in England, and the bulk of their large profit came from the sale of that product, which is excluded abso- lutely from the American market by the prevailing tariff. GEOGRAPHICAL PROTECTION IS NOT A MYTH THE DISADVANTAGE OF DISTANCE. In addition to the present tax of 55 and 60 per cent, we wish to emphasize the sub- stantial protection afforded by the heavy expense of bringing earthenware to this country from England. The freights from Staffordshire to Liverpool and sea freight to an American port amount to approximately 15 per cent in the value of the cheaper grades of ware and 10 per cent on the best grades. The Atlantic sea freights alone have been increased in the last four years over 200 per cent, and the sea freight on a crate has advanced from 80 cents to $2. Mr. Burgess stated yesterday that sea freight from Liverpool to Baltimore was 8 cents per 100 pounds. The fact is the rate is 25 cents per 100 pounds quite a difference. These transportation charges alone con- sJitute a big protection against foreign goods. Under such conditions a duty of 03 per cent on earthenware would be more than generous protection. SCHEDULE B. 583 PARAGRAPHS 92-94 POTTERY. SELLING PRICES. During the past few years the conditions of manufacture in England (the chief country exporting earthenware here) have changed tremendously, owing to increased cost of coal and materials and to industrial legislation . The English factories have been compelled to advance their prices very substantially, varying on the different classes of ware from 12J per cent to 22 per cent, as follows: Old dis- count. New dis- count. Increase. White granite Per cent. 60 Per cent. 55 Per cent. 12 i Transfers, gilt edge 27J 17J 131 Prints: Best. 45 35 17* Common grade 55 45 22 During the same period American prices have remained practically unchanged, so that this increased cost of foreign ware, with 60 per cent duty added, constitutes a very heavy extra burden on the imported products. OUTSIDE PACKAGES. We earnestly protest against the unfair and onerous tax of 55 and 60 per cent on the crates, casks, and packages in which earthenware is packed and shipped. To insure safe transportation these packages have to be very substantial and are very expensive. The ordinary crate costs at the factory 16/9 net ($4.10), and plus the 60 per cent dutv, $6.55. It is readily seen that this item is a very heavy burden on the common grades of ware, a crate containing (duty paid) $60, and is inequitable because it rests most heavily on the cheaper ware which goes to the mass of the consumers. Crates and casks are produced in America fully as cheaply as in England and are not entitled to duty at the same rate as the contents. We urge the abolition of any tax on outside packages. I will not attempt to go into details on the various costs of production further than to note that when Mr. Burgess claims to put 66 per cent of the selling price in the pay envelope his figures do not agree with his own table of production and wages, which show only 52 per cent in the pay envelope. I might also refer to the discrepancy in his claim that in the United States pottery industry 100 males are employed to 19 females. Mr. Wells, in his statement before this committee in 1908, stated that his factory employed 794 people, namely, 508 males and 288 females, which is a very different ratio 100 to 57. DIVISION OF SCHEDULE OF EARTHENWARE AND CHINA. We strongly advocate rates of duty separating these classes of ware and favoring the earthenware products for many forcible reasons. First. The sale of earthenware has been almost eliminated by reason of the high prohibitive rates of 5o and 60 per cent duty in force. English earthenware imports have decreased from $4,500,000 in 1892 to $2,000,000 in 1912. In the same period do- mestic production increased from $8,800,000 to approximately $17,000,000. Second. The domestic industry would be helped rather than injured by the compe- tition with good English ware, and without this stimulus and incentive would deterio- rate both in quality and efficiency. The American potters themselves strongly advo- cate this division of this schedule as being in the interest of the industry. Mr. Wells, representing the United States Potters' Association, said (tariff hearing, 60th Cong., first print, No. 15, Nov. 24, 1908, p. 1748): "There is as much reason why China and earthenware should be assessed in separate paragraphs, and at separate rates as there is that plate glass and window glass should be assessed separately, or that silks, woolens, and linens should be covered by separate paragraphs." Mr. Burgess representing the domestic potters (first print, No'. 28, pp. 3999^000): "We believe the tune has arrived when these classes of merchandise should be separately classified and different rates fixed on China and earthenwares. They differ in many particulars as greatly as do cotton and silk. 584 TARIFF HEARINGS. PARAGRAPHS 92-9-1 POTTERY. TO SUMMARIZE. We claim that the American potter has practically solved the problems of earthen- ware manufacture; that the domestic industry has passed completely out of the stage of infancy to full adult maturity, and no longer requires or is entitled to the prac- tically prohibitive tax now existing. We ask relief from the exorbitant unnecessary duty of 55 and 60 per cent and urge a rate of 30 per cent on earthenware and 35 per cent on china as abundant, fair, and equitable, both to the manufacturer and the consumer. N. B. We think it should be prominently noted that sanitary ware, common yellow ware, and common salt-glaze stoneware are practically excluded from this country by the present rates of duty. The freight alone on such heavy bulk is sufficient protection. On a shipment of 12 crates by the steamship West Point to Philadelphia, December, 1912, the factory value was 54 16s. and the sea freight alone was 20 18s., amounting to 38 per cent of the value of the goods. We therefore recommend that the duty on these lines should not exceed 10 per cent ad valorem. SCHEDULE B, PARAGRAPHS 92, 93, 94. 92. Common yellow, brown, red, or gray earthenware; brown stoneware; plain, embossed, or salt-glazed stoneware and crucibles, all the foregoing not decorated in any manner, 10 per cent ad valorem. 93. China, porcelain, bisque, and Parian ware composed of a nonabsorbent and translucent body, not specially provided for, including clock cases with or without movements, and all other articles composed wholly or in chief value of such ware, all of the foregoing plain, embossed or decorated, in any manner, 35 per cent ad valorem. 94. Earthenware, stoneware, crockery, white granite, and eemiporcelain, whether or not vitrified in whole or in part, or whether or not composed of a hard opaque but porous body capable of absorbing moislure, including plates, cups, saucers, and other articles or pieces, such as are commonly used in breakfast, dinner, tea, and similar table sets, toilet sets, hotel ware, Pill tiles, clock cases, with or without movements, placques, ornaments, toys, vases, statues, statuettes, mugs, steins, and lamps, to- gether with all other articles composed wholly or in chief value of such ware, all of the foregoing, plain, embossed or decorated in any manner, 30 per cent ad valorem. Rockingham, jet and samian ware, plain or decorated, 30 per cent ad valorem. SCHEDULE B. Section 85, tiles and quarries. We submit that the present rate of 8 cents per square foot is excessive and should be reduced to 4 cents per square foot, and quarries should not exceed 15 per cent ad valorem. We append examples showing that the duty on tiles at 8 cents per square foot is equivalent to more than 60 per cent ad valorem, and on quarrie? the sea and ocean freight alone are equivalent to 160 per cent ad valorem, without any duty added what- ever. EXHIBIT No. 1. s. d. 20 casks containing 200 square yards (1 ,600 square feet), unselected quality, white earthenware tiles. , 6 by 6 or 6 by 3, at 5/9 per square yard 57 10 Less 10 and 5.. .869 49 3 3 At $4.88 per pound $239. 71 Duly is 8 cents per square foot (1,800 square feet) 144. 00 Equal to more than 60 per cent No. 2. QUARRIES. The cheapest kind of red flooring tile, 9 by 9 size. Present rate of duty is 45 per cent ad valorem. Cost at factory 100/ per 1,000 Freight from factory to Liverpool 101/ per 1,000 Ocean freight to New York GO/ per 1,000 SCHEDULE B. 585 PARAGRAPHS 92-94 POTTERY. From the above example we show that the freight alone to Liverpool is more than 100 per cent of the cost of the goods at the factory and that the sea freight to New York is equal to 60 per cent of the goods at the factory. We, therefore, submit that the geographical protection is more than abundant and we ask a reduction on this class to 15 per cent ad valorem. W. S. PITCAIEN. G. B. JONES. The following telegrams were also submitted by the witness: CLEVELAND, OHIO. W. S. PITCAIRN, Washington, D. C. We most heartily indorse suggested new tariff rates china 35 and earthenware 25, considering both fair and equitable. THE KJNNEY & LEVAN Co. CHICAGO, January 7, 19 IS. W. S. PITCAIRN, Washington, D. C. We just wired the Hon. Oscar Underwood as follows: As extensive handlers of both foreign and domestic earthenware and French and German china, we strongly recom- mend a duty as follows: Earthenware 25 per cent, and china 35 per cent. We author- ize you to advocate the above rates in our behalf. BURLEY & TYRILL. ST. JOSEPH, Mo., January 7, 191S. G. B. JONES or W. S. PITCAIRN, Washington, D. C. Thirty-five cents on china and 25 on earthenware is a fair and equitable rate of duty. We handle both American and imported china and earthenware. REQNIER & SHOUP CROCKERY Co. SAN FRANCISCO, GAL., January 7, 19 IS. WM. PITCAIRN, Washington, D. C. Think 35 on china and 25 on earthenware reasonable duty. DORHMANN COMMERCIAL Co. INDIANAPOLIS, IND., January 7, 1913. WM. S. PITCAIRN, Washington, D. C. We fully indorse your request. HOLLWEO & REESE. TOLEDO, OHIO, January 8, 1913. W. S. PITCAIRN, Washington, D. C. We indorse 25 on both china and earthenware. DAUDT GLASS & CROCKERY Co. PORTLAND, OREO., January 7, 1913. W. S. PrrcAiRN, Washington. D. C. We are in favor of reduction of duty on china and earthenware, and indorse your proposed new rates of 35 on china and 25 on earthenware. PRAEL HEGELE & Co. MILWAUKEE, Wis., January 7, 1913. GEO. B. JONES, Washington, D. C.: We indorse the request of new rates mentioned in your telegram. WILD & ROHN. 586 TARIFF HEARINGS. PARAGRAPHS 92-94^POTTERY. PORTLAND, OREG., January 7, 1913. GEO. B. JONES, Washington, D. C.: Fully indorse proposed rates earthenware. Will cheerfully give all assistance pos- sible. M. SELLERS & Co. KANSAS CITY, Mo., January 7-8, 1913. G. B. JONES, Washington, D. C.: We fully indorse your request for new rate of duty china 35 per cent, earthenware 25 per cent. We believe these rates to be fair alike to American manufacturers, to dealers, and to consumers. Goods in bond should be subject to new rates of duty when released. T. M. JAMES & SONS. ADDITIONAL BRIEF OP W. S. PTTCAIRN ET AL. A FEW ILLUMINATING FACTS AND FIGURES. Domestic productions and importations, 1912. - Domestic. Imports. Par. 92, common yellow and brown earthenware kitchen utensils, salt-glaze $14,000,000 $150,000 Pars 93 and 9 Mr. JONES. Well, it was their opportunity to get more, and, as customers, we agreed to it and gave them orders. Mr. KITCHIN. When the foreign price goes up, do the American potters take advantage of that price and put their price up instead of coining in competition with them and holding the foreign prices down '( Mr. JONES. They want all that is coining to them. Mr. KITCHIN. When the foreign price goes up, the American price of pottery goes up too, does it not 2 Mr. JONES. 1 beg your pardon. SCHEDULE B. 681 PARAGRAPHS 92-94 POTTERY. Mr. KITCHIN. I say, when the foreign price goes up for any cause, whether due to sea freights or for any other cause, the American man- ufacturer of pottery puts up his price, too, does he not ? Mr. JONES. I do not accuse them of that. Mr. KITCHIN. No; you do not accuse them; but they do it, do they not? Mr. JONES. I would if I were in their place. Mr. KITCHIN. I believe you stated awhile ago that they advanced their price ? Mr. JONES. They have. You are right. Mr. JAMES. All of that followed the advance in the foreign price of 10 per cent? Mr. JONES. I presume so. Mr. JAMES. Then it is a matter of conjecture whether or not that was the cause of it ? Mr. JONES. Yes. Mr. KITCHIN. This is not the first case that that has taken place in. They advanced their prices as the foreign price was advanced a couple of weeks ago, did they not ? Mr. JONES. Yes. The CHAIRMAN. Are there any further questions ? That is all, Mr Jones. STATEMENT OF FRANK H. HUTCHINS, ON BEHALF OF THE BROTHERHOOD OF POTTERS. Mr. HUTCHINS. Mr. Chairman and gentlemen, I represent the work- ingmen who are employed in making whiteware, In this tariff on pottery ware there seems to be a great deal of confusion. It is applied to all classes. We have to compete with the foreign work- men. In England the wages are 100 per cent lower than hi this country. In German}' they are 20 per cent lower than in England. In France and Holland they are 30 per cent lower than in England. In Japan they are about 45 per cent lower than in England. The tariff schedule as the percentage of protection is based on pos- sibly what England pays, and the result is these other countries have taken the place of England as the greatest importer of goods into America, and some of the English manufacturers have found it to their advantage to go over to Germany to establish factories and have their wares made there. The German manufacturers import their ware into England and undersell the English manufacturers in their own market. You would think that it would be impossible for Eng- land to continue in the pottery business, but the only salvation for England is its colonies. The condition of the pottery worker in England is awful. It is more like the conditions that exist among the mill employees in Law- rence, Mass., than anything I know of . People are in misery, want, and next door to starvation. They take their clothes and furniture to the pawnshops and pawn them to get enough to maintain body and soul together until they can get a little work to do. Mr. KITCHIN. Have you seen the conditions of Lawrence, Mass. ? Mi 1 . HUTCHINS. Xo; I say from what I have read. 632 TARIFF HEARINGS. PARAGRAPHS 92-94 POTTERY. Mr. KITCHIN. From the hearing that was before the committee ? Mr. HUTCHINS. .From the hearing that was before the committee; yes. Now, gentlemen, our experience has been in 1894 that a reduction in the tariff affected the men employed in this industry. We went on strike at that time against a reduction. We believed that the manufacturers were making fortunes, and we struck six months, and finally submitted to a 12 per cent reduction, and not one-half of the potters worked during the continuation of the tariff schedule. When it was restored, in 1897, the wages were immediately raised by the manufacturers the 12 per cent. Mr. JAMES. Why does not the tariff have that effect upon the laborers in Lawrence, Mass. ? They are working in a highly pro- tected industry over 100 per cent. Mr. HUTCHINS. I can not answer that, but any industry Mr. JAMES (interposing). They are protected over 100 per cent; yet you liken their condition to the condition of the potters in England. Mr. HUTCHINS. In England. Mr. JAMES. Which is true, and they under free trade. Mr. HUTCHINS. Under free trade; yes. Mr. JAMES. I would like to have you tell us how it is that this highly protected industry has such poorly paid labor ? Mr. HUTCHINS. In England ? Mr. JAMES. No, in Lawrence, Mass., if the tariff is the thing that causes good wages. Mr. HUTCHINS. Well, now, I was just going to explain to you that there is not any industry on the face of the earth now I am saying that on the face of the earth that I believe gives a larger portion of the receipts from the manufacture of its goods than the pottery manufacturers do. Mr. PALMER. To which portion of the laborers do you refer? Mr. HUTCHINS. The labor, the men who make the ware, and the skilled mechanics. Mr. JAMES. So in some cases these protected industries divide up, and in other cases they do not? Mr. HUTCHINS. Yes, sir; and we have come before you to-day, believing that the President-elect Wilson said that industries of this kind have nothing to fear, honest industries, industries that put a fair portion of the profits into the envelopes of the wage earners, and we know from past experience that there can be no retrenchment in the cost of manufacturing pottery ware except that it comes out of the wa.ue earners. Mr. JAMES 1 on spoke of Germany. Is there any protective tariff on manufacturers of pottery in Germany? Mr. HUTCHINS. Not that I know of. We are not competent to talk on tariff schedules, as they pertain in foreign countries, but in our dealings with the manufacturers we meet every two years in conference, and in an effort to regulate wages and conditions of work, and we try to get an increase in wae followed by a corresponding reduction of wages if our potteries are to continue m business. SCHEDULE B. 645 PARAGRAPHS 92^94 POTTERY. 8. That the quality has steadily improved and the cost to the ultimate consumer has steadily decreased during the growth of the American industry, retail prices being now materially lower than under the Wilson bill. 9. That the American pottery manufacturer holds no monopoly upon any part of the trade, but through difference in labor cost the foreign manufacturer holds a prac- tical monopoly upon the market for high-class china. Obviously, I can not prove all these assertions within the time allotted, but acting upon another suggestion embodied in the letter of Mr. Whitacre, which extract I quote below. I desire to submit a sworn statement covering certain vital facts. The following is the extract from Mr. Whitacre's letter: "If you are coming to Washington to ask any rate as necessary to your industry, you should at least now come to a showing of exact facts, free from general denunciation and claptrap statements. This is a time when sound horse sense should be applied and wild statements discarded." Within the past week sworn statements have been given to me by 21 pottery firms, which, with the exception of one small concern, include every firm in actual operation in the Ohio Valley, between East Liverpool, Ohio, and Wheeling, W. Va. These represent more than 50 per cent of the total production of this country in earthenware. The sworn statements set forth: First. The actual capital invested. Second. The actual sales, separately, for each of the three years, 1909, 1910, 1911. Third. The actual profits or losses in dollars and cents for each of these three years. While I shall not expose for publication the intimate facts shown by these indi- vidual statements, I have made an accurate tabulation, showing the aggregate facts for the 21 factories and have attached to this brief a sworn statement that this tabu- lation is a correct transcript from the individual statements. Further, I stand ready to submit the individual statements to any person your chairman may care to designate for that purpose. The reports were made by the following firms: D. E. McNicol Pottery Co., East Liverpool, Ohio; Knowles, Taylor & Knowles Co., East Liverpool, Ohio; Standard Pottery Co., East Liverpool, Ohio; Vodrey Pottery Co., East Liverpool, Ohio; Hall China Co., East Liverpool, Ohio; Globe Pottery Co., East Liverpool, Ohio; Cartwright Bros. Co., East Liverpool, Ohio; Colonial Pottery Co., East Liverpool, Ohio; Potters Cooperative Co., East Liverpool, Ohio; Smith-Phillips China Co., East Liverpool, Ohio; Trenle China Co., East Liverpool, Ohio; West End Pottery Co., East Liverpool, Ohio; C. C. Thompson Pottery Co., East Liverpool, Ohio; Harker Pottery Co., East Liverpool, Ohio; Edwin M. Knowles China Co., .Chester, W. Va.; Taylor, Smith & Taylor Co., Chester, W. Va.; Homer Laughlin China Co., Newell, W. Va.; Wellsville China Co., Wellsville, Ohio; United States Potteries Co., Wellsville, Ohio; Steuben- ville Pottery Co., Steubenville, Ohio; Warwick China Co., Wheeling, W. Va. The tabulation develops the following facts, and since the list of firms includes the recognized best profit makers in the trade, the result may be accepted as a fair show- ing of the percentage of earnings of all the potteries of the country: Ayyregate results taken from the sworn statements of the 21 firms named above cover- ing their business for the years 1909, 1910, and 1911. Total capital invested $6, 521, 772. 22 Total sales, 1909... 6,234,029.61 Total sales, 1910. . . 6, 983, 990. 18 Total sales. 1911 - - 6, 982, 429. 05 Total profits, 1909, 17 firms. . 461, 452. 62 Total losses, 1909, 4 firms _ 33, 883. 09 Net profits. 1909 427, 569. 53 Total profits, 1910, 18 firms 546, 559. 84 Total losses, 1910. 3 firms 23, 452. 43 Net profits, 1910 523, 107. 41 Total profits, 1911, 16 firms 409, 458. 19 Total losses, 1911 , 5 firms _ 52, 480. 71 Net profits, 1911 356, 977. 48 646 TARIFF HEARINGS. PARAGRAPHS 92-94 POTTERY. Percentage of net profits to capital stock: ** cent. 1909 6i 1910 8 1911 5J Total net earnings, 3 years 20 Average per year 6J Small fractions have been dropped in this percentage calculation, but an examina- tion of above figures will show the average earnings of 6 per cent per annum to be almost precisely correct. I respectfully submit that these figures should be taken into account in consider- ing a pottery tariff, and should any doubt exist as to their fairly representing condi- tions in the pottery trade, then the facts should be investigated at first sources by your own representative. It may be proper to add that I have not included in this calculation the returns from one firm in the Ohio Valley that has gone out of business and three that have failed during the past two years. Respectfully submitted. W. E. WELLS. SWORN STATEMENT. I, W. E. Wells, of Newell, W. Va., being first duly sworn, upon my oath say that the tabulation appended below represents the correct aggregate taken from the sworn statements (with exceptions as noted) of the following 21pottery firms: D. E. McNicol Pottery Co., East Liverpool, Ohio; Knowles, Taylor & Knowles Co., East Liverpool, Ohio; Standard Pottery Co., East Liverpool, Ohio; Vodrey Pottery Co., East Liver- pool, Ohio; Hall China Co., East Liverpool, Ohio; Globe Pottery Co., East Liverpool, Ohio; Cartwright Bros. Co., East Liverpool, Ohio; Colonial Pottery Co., East Liver- Eool, Ohio; Potters Cooperative Co., East Liverpool, Ohio; Smith-Phillips China Co., ast Liverpool, Ohio; Trenle China Co., East Liverpool, Ohio; West End Pottery Co., East Liverpool, Ohio; C. C. Thompson Pottery Co., East Liverpool, Ohio; Harker Pottery Co., East Liverpool, Ohio; Edwin M. Knowles China Co., Chester, W. Va.; Taylor, Smith & Taylor Co., Chester, W. Va.; Homer Laughlin China Co., Newell, W.'Va.; Wellsville China Co., Wellsville, Ohio; United States Potteries Co., Wells- ville, Ohio; Steubenville Pottery Co., Steubenville, Ohio; Warwick China Co., Wheel- ing, W. Va. Aggregate results taken from the sworn statements of the 21 firms named above covering their business for the years 1909, 1910, and 1911. Total capital invested $6, 521, 772. 22 Total sales, 1909 6, 234, 029. 61 Total sales, 1910 G, 983, 990. 18 Total sales, 1911 6,982,429.05 Total profits, 1909, 17 firms 461, 452. 62 Total losses, 1909, 4 firms 33, 883. 09 Net profits, 1909 427, 569. 53 Total profits, 1910, 18 firms 546, 559. 84 Total looses, 1910, 3 firms 23, 452. 43 Net profits, 1910 523, 107.41 Total profits, 191 1, 16 firms 409, 458. 19 Total losses, 1911. 5 firms 52, 480. 71 Net profits, 1911 356, 977. 48 SCHEDULE B. 647 PARAGRAPHS 92-94 POTTERY. IVrcontage of net profits to capital stock: Per cnt. 1909 ........................................................... 6i 1910 ........................................... g 1911 ......... 5 Total net earnings, 3 years ................................... 20 Average per year ...................... . ..................... 6f W. E. WELLS. Sworn to and subscribed in my presence at Washington, D. C., this 8th day of January, A. D. 1913. [SEAL.] EUSTACE C. OWEN, Notary Public. Exceptions: Sales of the Harker Pottery Co. not sworn to. Sales and profits of the C. 0. Thompson Pottery Co. not sworn to. COPY OF CIRCULAR LETTER BY MR. WHITACRE. It is definitely announced that the Ways and Means Committee of the House of Representatives will take up the tariff-revision program early in January. Hearings will be granted those who desire to be heard. Personally, I do not know whether the present rates on your products are too high or not. I would favor a proposition from you to the Ways and Means Committee to throw open your books and factories to the experts selected by the committee to ascer- tain the exact conditions that obtain in your industry as regards all matters which enter into your cost. You could also furnish for the benefit of the committee such information as you undoubtedly have with respect to prices of foreign articles entering into competition with you; that is, prices at which foreign articles are actually offered for sale in the country of production. Knowing, then, your cost and foreign actual sale price, it seems to me that a rate could be fixed which would at once be fair to the consuming public, yourself, and your employees. Generalities will no longer be accepted. Exact truths must be ascertained and stated. The cry of "ruin" has been so overworked that men no longer give credit to your statements. It is unfortunate that this is the case, but so it is. The reports of the present Tariff Board on the paper and woolen schedules demonstrate that exact conditions at home can be ascertained, and certainly these exact home conditions ought to be compared with the prices at which foreign-made goods are actually sold in the market of the country of production. If you are coming to Washington to ask any rate as necessary to your industry you should at least now come to a showing of exact facts, free from general denunciation and claptrap statements. This is a time when sound horse sense should be applied and wild statement discarded. You are entitled to fair treatment, and so also is the public who uses your goods. You should not be destroyed by unfair competition, and your customers should not be robbed by any unfair killing of competition on your part. To keep yourself from unfair foreign competition you should now lay yourself open to examination for exact facts in your industry. If you disclose the actual condition, you can rest assured of a fair rate. I want to impress upon you that the time is past when tariff rates will be fixed by you alone without regard to others. I take no stock in the statement of some that your interests shall not be considered, and am equally certain that yours is not the only interest to be regarded . You are entitled to have a rate fixed on the basis of truth as to your conditions of production and sale, but you should not be permitted to exclude foreign competition by tariff rates fixed by you to the end that your industry may have this market at your terms of sale, on the principle of the "public be damned." The public will not "be damned." The public has determined to take a hand in fixing the rates, and the danger now is that you will "be damned." Hence the necessity of moderate statements on the part of all . Common sense should prevail and fair rates" should be established. I shall be glad to aid you in this respect, but I am a Congressman for all the people, you included. I am ready to cooperate with you along the lines above indicated. J. J. WHITACRE. 648 TARIFF HEARINGS. PARAGRAPHS 92-94 POTTERY. DETAILED STATEMENT. POTTERY WARE. The term pottery or pottery ware embraces all wares made of earthy materials, of which the silicate of aluminum is the chief ingredient, and embraces products differing widely in character and in value, ranging from the cooimon brick to the most elaborate and artistic piece of chinaware, worth many times its weight in gold. Few, if any, industries have so large a percentage of labor cost in their production; the crude materials entering into the body of material ware are of nominal value as found in nature, being worth from 25 cents to 50 cents per ton in the ground. A dozen of the ordinary white china plates selling at $1.50 per dozen wholesale con- tains about 12 pounds or less of the combined materials. This amount of material is worth about one-tenth of a cent in the ground. The difference between one-tenth of a cent and $1.50 indicates the labor cost from start to finish. MATERIALS. A great variety of materials enter into the composition of a piece of decorated pottery ware, chief of which, however, are clays, quartz, and feldspar. In the glaze we have the addition of borax or boracic acid, lead, zinc, and paris white. In deco- rating we have the whole range of metallic colors and various oils. The production of the lithographer's art is largely in use. The clay comes largely from Florida, Georgia, North Carolina, Maryland, Dela- ware, Pennsylvania, Missouri, and Texas. The large quantities of china clay and ball clay are imported from England. The flint or quartz is produced in Maryland, Pennsylvania, Connecticut, Massa- chusetts, and some of our Western States. The feldspar of the quality required is found in limited quantities in Delaware, Pennsylvania, Connecticut, Massachusetts, Maine, and Canada. The borax and boracic acid comes from California. Coal, principally from Pennsylvania, Maryland, and West Virginia. The decorating materials are produced to an extent in this country, but are largely imported. CLASSES OK POTTERY WARE. There are two main general divisions of earthy products, technically known as earthenware and china, the chief difference being in the character of the body. A general definition of earthenware being ''wares of opaque and nonvitreous character," the body of the ware being to a greater or less degree porous or absorbent to liquids, whereas china is of a vitreous or glassy nature, owing to a larger proportion of fusible or vitrefiable material in its construction. When broken it displays a glassy fracture, and is generally translucent. In the manufacture of the earthenware the materials bear a larger ratio of value to labor in the total cost than is the case in the manufacture of chinaware. In conse- quence of this fact, the American pottery has been able to develop more rapidly in earthenware business in this country, owing to- the smaller proportion of labor cost. For the same reason the manufacture of chinaware has not progressed with any rapidity. In the production of tableware little machinery can be used, and where it is appli- cable the human hand is indispensable in connection therewith. The same is true in relation to the building of articles for sanitary purposes. In the making of por- celain for electrical purposes, and in the manufacture of tiles, machinery in the form of presses and dies is used to a considerable extent, but when machinery is used to the limited possibility, then labor must be applied in the finishing, handling, burn- ing, and decorating before the article is ready for market. PROCESS OF MANUFACTURE. Materials are delivered to the potters in a state ready for mixing. When the materials are brought into a liquid combination, which is simply a mix- ture and not. a chemical solution, the product is very carefully sifted and forced through filtered presses, after which it is cut up and forced through a compressing mill, so as to produce a density without losing elasticity. It is then ready for the potter's use. The various processes through which the material must pass and the manipulations it must .1:0 through are numerous before it is ready for the burning process. After being formed and thoroughly dried, while still in an extremely fragile condition, it SCHEDULE B. 049 PABAGBAPHS 92-94 POTTEBY. must go through the first firing process, after which it is inspected, brushed, dipped in a liquid glass, and again put into the kiln for a second burning. The ware is then sorted, carefully inspected, and is in a marketable condition. The process through which the ware must pass is slow and the turn over of the money invested is corre- spondingly slow, so that if a manufacturer can turn his investment one and one-half times in the year he is doing extremely well. The average, however, would not be more than one and one-fourth times the invastment; for example, a pottery invest- ment of $100,000 would do well to produce $125,000 in the year. COST OP PRODUCTION. In considering the cost of production we have a number of elements to be con- sidered, each of which when compared with conditions abroad show to the great advantage of our foreign competitors. In considering the cost of production of pottery ware the following elements must be taken into consideration: First. The relative amount of capital investment necessary. Second. The relative cost of materials. Third. The relative cost of labor. Fourth. The relative fixed charges, and overhead expenses. Fifth. Trade conditions. Under these heads I have subdivided the various subjects as follows: CAPITAL. I. Plant. 1, Land; 2, building; 3, machinery; 4, tools and implements; 5, blocks, casks, and molds; 6, saggers, or firing cases; 7, wareboards. II. Working capital. 1, For carrying merchandise and stock in the process of manu- facture; 2, for carrying book accounts and credits. MATERIALS. I. Materials used in the construction of the ware itself, and in decorating the same. 1, China clays; 2, ball clays; 3, quartz; 4, feldspar; 5, Cornwall stone; 6, carbonate of lead; 7, oxide of zinc; 8, soda; 9, borax; 10, boracic acid; 11, paris white; 12, deco- rating colors; 13, liquid bright gold; 14, coin gold; 15, decalcomania, chrome, or trans- fer sheets. II. Materials used in the process of making, but not part of the ware itself. 1, Coal; 2, wood; 3, plaster of Paris; 4, sagger clay or marl; 5, wad clay. I. Wages paid to the producing help all those through whose hands the ware passes in the process of making. 1, For preparing the body and glaze; 2, potters, or those who form the ware; 3, kiln or oven workers; 4, biscuit and glost warehouse workers; 5, decorators. II. Wages paid to the nonproducing help all other help necessary in operating the plant. 1, Modeling and mold making; 2, sagger making, etc.; 3, engineers and fire- men; 4, superintendents, foremen, etc.; 5, office help; 6, teamsters, stable help, and odd labor. FIXED CHARGES AND OVERHEAD EXPENSES. 1, Taxes; 2, insurance; 3, interest and discount; 4, repairs, etc. TRADE CONDITIONS. 1, Proportion of male and female labor; 2, age limit of child labor; 3, hours of labor; 4, apprenticeship regulations; 5, trades-union regulations: 6, government regulations. As in all other lines of industry, the cost of production varies according to the country in which the goods are produced. We must therefore consider the cost in the various countries, comparing the same with the cost of similar articles made in the United States. The wages paid in England being the highest of European countries, we will first consider the various items of cost from the English standpoint. Permit me to state that such a thing as an exact comparison of cost in many respects is an absolute impos- sibility, and the best I expect to accomplish is to give you a clear and fair statement of facts and figures as they exist, adjusting differences in conditions and money value to bring the comparison as far as possible to a uniform basis. 650 TARIFF HEARINGS. PARAGRAPHS 92~94 POTTERY. COMPARATIVE COST OF PRODUCING EARTHENWARE IN ENGLAND AND AMERICA. The methods used in producing earthenware in England and America are almost identical. Very accurate comparisons can therefore be made. The figures following are based upon information secured by me officially while occupying the position of American consul in the great pottery center of England. These figures were con- firmed in some cases by examination of the books of the factories. To further verify the figures I submitted the completed report to one of the leading manufacturers of England, who pronounced it accurate and fair in all its details. I have since verified my original figures on two separate occasions, making such alterations as had occurred during the interim. AMOUNT OF CAPITAL INVESTMENT. I. Plant investment. From actual valuations of land similarly situated, and from builders' estimates on the same plans, I have found that a plant costing $60,000 in England would cost $80,000 in the United States. These figures include fixtures and machinery. In addition to the above, it is necessary to have certain additional implements for the operating of the plant, which properly go into plant investment, viz: Saggars (or fire-clay cases), molds (plaster of paris), and ware boards. As these items are made piecework, the exact difference can be ascertained and are shown in following table: Plant investment. England. America. Land machinery buildings fixtures $60,000 $80,000 Molds. .. .. .. ... 4,680 8,660 Saggars 1,260 2,814 Ware boards 2,000 2,000 67,940 93,464 II. Working capital investment. In making the following statement, I do so based on the factories doing business with the United States, or for such part of their business as they do with the United States. The necessary investment is considerably greater in the United States for the follow- ing reasons: (1) The greater cost of materials and labor necessitates a greater cash outlay. (2) The foreign manufacturers make their goods largely on order for immediate shipment, whereas the American manufacturers have to carry large stocks of finished ware ready for immediate demand. The American manufacturer has to warehouse his merchandise for the great majority of his customers. This, of course, necessitates the locking up of a much greater amount of capital. (3) Many of the foreign manufacturers receive prompt cash for their shipments upon presentation of invoice and bill of lading to the foreign banker, whereas the American manufacturer as a rule has to carry large book accounts. (4) In considering the additional investment required in the American manufac- ture, we must also consider the greater rate of bank interest prevailing in America than in Europe, interest in England being from 4 to 5 per cent, whereas in America it is from 5 to 6 per cent generally 6 per cent. (~>) The fire insurance rates are enormously different in the two countries. In England the usual pottery rate is 3s. 6d. per hundred pounds sterling, or about 17 cents per hundred dollars. The minimum rate for the best risks in America is 75 cents per hundred dollars, whereas the underwriters inform me that the average risk is $1.50 per hundred. MATERIALS. The following table indicates the relative cost of the several materials laid down at the factories in Staffordshire, and in Trenton, N. J., based on 2,000-pound tons, with the exception of coal, which is based on the long ton, 2,240 pounds. SCHEDULE B. 651 PARAGRAPHS 92-94 POTTERY. Materials. - England. America. China clay: England per ton $7.87 (12.00 Florida do 10.75 Georgia .. do... 14.42 North Carolina do 14.78 Ball clay, England do .. 5.75 8.80 Quartz: Ground flints ...do... 11.75 11.76 Ground rock . do 8.40 Ground sand ...do... 11.76 Cornwall stoue ...do... 10.08 13.44 Feldspar do . 12.96 11.76 Saggar clay: England ...do... .90 Mixed American do.... 2.75 Wad clay, England .... do .. .96 Wad clay, American do 1.62 Coal, English: Cockshead... . . do . 2.56 Cobbles . do... 2.10 Slack do 1.38 Maryland do.... 3.45 Wood, for kindling per cord. . 4.88 4.00 Plaster. 300 pounds per barrel. . 1.32 1.90 White iead " . per pound. . .047 .051 Zinc oxide do .062 .12 Borax do.... .034 .06 Boracic acid . . . ...do... .043 .06} Soda do.... .008 .04 Paris white per 100 pounds.. .43 .65 The argument has been set forth that the western pottery manufacturers have great advantage in the use of natural gas. This was true when gas was first introduced, but to-day the gas is metered at a cost exceeding the cost of coal, the price being 13 cents per 1,000 feet, or a cost of $45.81 per kiln for the first or biscuit firing of a 16 foot 6 inch kiln, and $37.70 for a glost 16 foot 8 inch kiln. LABOR. Under this head we have two groups: I. The producing help. By that I mean the actual makers and placers of the ware. II. Nonproducing help, or those who have some part in the process of manufacture and the placing of goods in condition ready for market. Producing help. The wages to producing help will be considered under two headings: (1) A comparison of amount of wages earned by the various trade branches under similar conditions. (2) By comparing in detail the piecework prices. The following figures are based on journeymen's wages. Where blanks occur opposite the wages of women, they indicate that women are not employed in America. The figures indicate the net earnings to the operative, having deducted therefrom the amount paid by him to his assistants. Average net weekly earnings of the operatives in their respective branches. England. America. $6.90 $27.31) 8.42 29.01 7.22 24.60 Cup makers: Men 7.48 28.80 4.94 None. Saucer makers: Men 8.10 27.00 4.06 None. 8.60 24.60 5.94 18.59 5.82 18.90 2.60 10.72 9.96 30.22 7.70 26.00 9.12 28.01 C.68 30.00 6.44 27.23 Handlers: 6.76 29.41 3.50 None. Kilnmen 7.20 23.89 652 TARIFF HEARINGS. PARAGRAPHS 92-94 POTTERY. Confirming the above figures, the report of the English Board of Trade gives the following general statement of the weekly earnings paid to the potters of Staffordshire. Potters, clay workers, per week, 25s. to 35s. ($6.08 to $8.51). Oven men, kiln placers, per week, 30s. ($7.29). Painters, gilders, and decorators, per week, 30s. to 40s. ($7.29 to $9.72). Laborers, per week, 18s. ($4.37). The piecework prices have been reduced to a common basis of American currency, and to dozens, counting 12 to the dozen, for each item. The average percentage of difference considering the proportion of each item ordi- narily manufactured is about 111 per cent. Comparative piecework prices. PRESSING. England. America. Increase. Brush vases $0.219 $0.30 Percent. 37 Butters, covered .578 .64 10 Chambers, covered: 6-inch . . . .472 .97 105 9-inch .472 .88 86 Comports: 7-inch .299 .51 70 8-inch .299 .55 84 9-inch .339 .60 77 Cuspidors: 2s. unhd .758 1.29 70 Is. unhd .958 1.47 53 Covered dishes: 7-inch . .658 1.01 53 8-inch .718 1.11 54 9-inch .... . . . .778 1.24 59 10-inch .837 1.38 65 Covered casseroles: 7-inch .658 .97 47 8-inch .718 1.06 47 9-inch .778 1.20 54 10-inch .837 1.33 71 Creams: 24s .259 .45 74 30s .239 .42 70 Ewers: Gs. cable .058 .92 40 9s. cable .598 .82 37 Mouth .252 .45 78 Jugs: 4s .504 .85 69 OS .441 .70 56 12s .346 .55 59 24s .294 .50 70 30s ... .252 .46 82 36s .252 .40 58 Salads: 7-inch .309 .65 111 8-inch .369 .75 103 9-inch .459 .85 85 10-ineh .518 .95 83 Sauce boats . . .... .279 .42 51 Sauce tureens .658 1.00 52 Sauce stands . .219 .33 51 Sauce ladles .099 .25 152 Slop jars, No. 1 2.159 2.58 20 Soaps, covered and drs .438 .CO 37 Soup tureens: 9-inch 1.67 2.76 64 10-inch 1.91 2.99 56 Soup ladles .18 .34 89 Parlor spittoons . . . .239 .69 189 Sugars: 24s .438 .64 46 30s .399 .60 50 30s .359 .56 56 Teapots, 24s .598 1.00 67 Soup stand: 9-inch .438 .55 26 10-iuch .438 .64 46 SCHEDULE B. PARAGRAPHS 92 94 POTTERY. Comparative piecework prices Continued. JIGQERING AND JOLLYING. 653 England. America. Increase. Bowls: 24s |0 0346 SO 06 Per cent. 30s 0277 055 100 36s 0231 05 42s 0197 05 156 Butters, individual : 0126 0275 114 Basins: Outside 21 35 66 6 inches inside 21 30 43 9 inches inside 189 25 32 Cups, sponged 0147 0325 121 Saucers: Tea 0168 03 78 Coffee 0189 03 58 A. D 0126 03 138 Toy .x 0126 03 138 Fruits, all sizes 0168 03 78 Ice creams .0168 03 78 Nappies: 3-inch 0633 08 26 4-inch 0633 08 9fi 6-inch 084 10 19 6-inch .084 10 19 7-inch 0945 10 g 8-inch .0945 10 g 9- inch .1155 12 4 Plates: 4-inch, plain .0168 0325 93 6-inch, plain .0189 .0375 93 6-inch, plain .0215 0425 98 7-inch, plain .026 .0475 82 8-inch, plain .0304 .055 81 6-inch, plain, deep .0189 .045 128 6-inch, plain, deep .0215 .05 133 7-inch, plain, deep .0262 .055 110 8-inch, plain, deep .0304 .0625 106 6-inch, festoon .024 .05 108 7-inch, festoon .03 .055 83 8-inch, festoon .033 .625 89 6-inch, festoon, deep .024 .06 150 7-inch festoon deep . . . . .03 .065 117 8-inch, festoon, deep .033 .0725 119 HANDLING. Cups: Coffee block $0.0168 $0.04 132 A. D. block .0147 .035 138 Tea block .0147 .035 138 Toy block .0147 .035 138 Mugs: 24s block . .0315 .6 90 30s block .0252 .6 138 36s block . .021 .6 185 42s block .0179 .6 230 DISH AND BAKER MAKERS. Bakers: $0.0698 $0.09 29 .0898 .10 42 5-inch .0798 .11 38 6-inch .0798 .12 50 7-inch .09 .13 44 8-inch .0997 .15 50 .1097 .16 46 10-inch .1197 .18 50 Dishes: 3-inch .0698 .09 29 .0698 .10 43 5-inch .0798 .11 38 6-inch .0997 .12 20 .0997 .13 30 8-inch .0997 -15 50 .1107 .16 34 10-inch .1197 .18 50 .13 .20 54 12-inch .13 .22 69 14-inch. .1795 .29 62 16-inch... . 1995 .37 85 654 TAEIFF HEABING8. PARAGRAPHS 92-94 POTTEBY. Comparative piecework prices Continued. THROWING. England. America. Increase. Bowls: 24s SO. 0315 10.05 Percent. 59 30s .0252 .04 59 36s .021 .035 67 42s .0179 .035 96 Mugs: 24s .0315 .055 74 30s .0252 .045 78 36s .021 .04 90 42s .0179 .03 67 Sugars' 24s .0787 .12 52 30s .0787 .12 52 TURNING. Bowls: 24s out or mold $0.319 $0.06 88 30s out or mold . .... .0255 .055 115 36s out or mold .021 .05 119 42s out or mold .0182 .05 174 Mugs: 24s .0319 .085 166 30s .0255 .075 194 36s .021 .07 233 42s .0182 .06 | 229 Sugars: 24s with cars complete ... .159 .195! 23 30s with ears complete ,_ .159 .185 17 Nonproducing help. The following table gives a fair average of the wages paid to the nonproducing help. Individual ability and consequent worth necessarily differ greatly both in England and America. In some branches, however, the rates of wages are accurately fixed under the day-wage-piecework system, there being a fixed rate of wages per day with a certain amount of work to be performed for that amount of wage. Comparative wages per week, nonproducing help. England. America. Bookkeepers $7.75 $20 79 Clerks 4.70 13 75 Boys 1 50 6 00 Teamsters 6.00 12 00 Engineers 8 80 18 00 Laborers . .... 5.20 11 99 Kiln firemen.. 12 00 20 00 1 learl biscuit brushers 2.26 S 00 Head glost dressers. .. 2 26 9 oo Biscuit brushers 1 52 6 82 Glost dressers. 1 52 7 94 Olost warehousemen 7.50 15 00 Selectors 3.35 9 00 Slip-makers 6 48 16 50 Pugmill men 4.74 12 00 Dippers help: Women ... 2.26 7.42 Bovs 1 68 4 73 Watchmen . . . 6 48 15 00 Superintendent . 14.40 25 00 SCHEDULE B. 655 PARAGRAPHS 92 94 POTTERY. OUTPUT OF ONE POTTERY PLANT FOR ONE YEAR. To give a still more accurate idea of the cost of producing earthenware in England and America, I have taken from the books of a factory the actual output of their white- ware production, the comparison being confined to staple goods, and values figured on journeymen's wages. This comparison, however, is extremely favorable to the foreign manufacturer on account of a larger proportion of the goods being produced by apprentice labor than is the case with the American production. These figures leave out of consideration the apprenticeship question entirely. Total actual output in one pottery plant, for one year. Articles. Dozen. Articles. Dozen. Bakers: 24-inch . .... 450 Casseroles, covered: 7-inch 100 3-inch 75 8-inch 125 4-inch 25 9-inch 50 5-inch 25 Comports, 8-inch... 100 5-inch, single 200 Cuspidors, 2s 100 6-inch 300 Covered dishes: 7-inch 850 7-inch 200 8-inch 550 8-inch. . ... 800 9-inch . 375 Creams, 30s 700 lOJ-inch 500 Coffees: Bowls: Unhd 4,000 30s., oyster 800 Hand 10,000 24s . 1,000 Teas . . . 20,000 30s 3,500 Dishes: 36s . 1,000 4-inch. . 125 Plates' 5-inch 300 4-inch . . . . . . ... 500 6-inch 130 5-inch 5,000 7-inch 400 6-inch . 1,000 8-inch 275 7-inch 1,500 9-inch 450 8-inch 10,900 10-inch, 450 6-inch deep 1,000 11-inch 450 7-inch, deep 8,000 12-inch.. 400 8-inch deep 1,000 13-inch 275 5-inch, festoon 1,500 14-inch 400 6-inch, festoon ." 5,000 16-inch 250 7-inch, festoon 7,500 Ice creams: 7 500 3J-inch 1,500 500 1,000 8-inch festoon deep 3,000 Jugs: Cake 1,000 4s 25 Cup 500 6s.. 300 Sauce boats 500 12s 625 Saucers: 24s 1,500 Coffee 10,000 30s.. 700 Coffee festoon 3,000 36s 1,000 Tea festoon 12,000 Mugs: Tea 22, 000 24s. . 300 Fruit 30s 2,200 3,000 36s 400 Festoon 5,000 Nappies: 3 000 5-inch 200 6-inch .... 3.50 24s 450 7-inch 1,200 30s 1,000 8-inch 1,800 1,000 9-inch 400 100 10-inch 300 100 Vases 1,500 100 Basins, 9s 2,000 125 Chambers, 9s 1,500 100 Ewers, 6s 1,500 100 Ewers, mouth 600 1,000 Slop jars 150 Butters: Covered 400 Individual. . . 4,000 656 TARIFF HEARINGS. PARAGRAPHS 92~94 POTTERY. The total cost in England for producing this ware was $13,634.69, while in America the cost was $21,738.95. Adding to these figures the other labor cost, we have the total wage cost, as follows: Total wage cost. Branches. England. America. Potters' wages .. $13,634.69 $21,738.95 3,477.00 12, 186. 00 Mold makers' wages 1,129.00 2, 450. 00 Saggar makers' wages 861.00 2, 243. 00 All other wages 5,782.50 14,054.33 Office and management. . . 3.018.00 6.240.00 Total I 27, 902. 19 58,912.28 The material used in the production of the above quantities of ware are given below: Material costs. Description. England. America. $17,910.00 $22,156 00 Materials not entering into same ... 12, 102. 00 20,840.00 Total 30, 012. 00 42,996.00 Adding to the above the other elements entering into the cost, we have the following comparative total cost of the product: Total cost. Description. England. America. Labor $27, 902. 19 $58, 912. 28 Material. 30,012 00 42, 996 00 Interest . 5, 055. 00 9, 430. 00 Insurance. . . 300 00 1 500 00 Taxes 550.00 1,450.00 Gas and water 830 00 975 00 Total . . . 64.649.19 115. 263. 28 CONDITIONS. All hough the difference given above appears large, it does not fully indicate the real difference, largely on account of 1he conditions surrounding the manufacture of pottery in England and America: (!) The age limit of children working in the potteries under certain conditions is 10 years in England, and 14 years in America. (2) The ra'.io of male to female labor being 80 females to 100 males in England, while in America the ratio is 19 females to 100 males. The following quotation from the English Board of Trade report would indicate that the American potter need not look for any help in this direction. On page Xo. 141 of said report is the following: "It appears that women and girls are very largely employed in the pottery industry. In some branches cf the irade they being employed to an increased extent upon which a few years ago was performed almost exclusively by men. They are now actively engaged in competition with male labor, and as they are able to do similar work for lower wages, they arc gradually driving men from certain sections of the trade. The reason given for this is the usual one- women do the work as satisfactorily as the men, and the culling of prices in Irade competition drives the employer to'resort to low paid lalior." SCHEDULE B. 657 PARAGRAPHS 92-94 POTTERY. (3) In England the piecework wages are paid for "good from oven." That is, the workman is paid only for such ware as comes from the kiln in perfect condition. In America the ware is paid for "good from hand," the manufacturer assuming all the loss. The English manufacturer considers this method worth about 5 per cent of their clay shop cost. (4) The apprenticeship system is a great help to the English manufacturer on account of his long term of years of apprenticeship, having the use of the boys during that period at very low wages, and the further benefit of having well-trained operatives at the end of their term of apprenticeship, whereas in America the trade-union rules restrict the number of apprentices, limiting the time and consequent efficiency on entering the trade as a joxirneyman. DECORATING. The difference in cost of decorating is becoming more and more important, because of the fact that from 75 per cent to 80 per cent of the output of the American factory is now decorated. The following tables indicate the difference in cost of decorating materials, and labor cost: Decorating materials. England. America. Printing paper, per pound $0.16 SO. 33 Decalcomania sheets, each .15-. 20 .20-. 25 Decorating colors, per pound: 1.37 1 50 Turkish blue, No. 399 6.84 8.44 Turkish blue No 3 11.40 14.09 French brown, No. 67c 3.65 4.50 Golden brown, No. 25d 2.28 3.38 Gordon green No 1 . ... 1.83 2.25 Olive green No. 158 2.74 3.38 Maroon, No. 3 9.12 11.50 Maroon, No. 321 13.68 18.00 Pink No 6 . 4.10 5.07 Pink No. 25 . ... 2.74 3.38 Red, No. 280 1.82 2.40 Red , No. 8 1.37 1.69 Decorator's weekly earnings. England. America (55 hours). Superintendent $7. 20-114. 44 $24.53 3. 60- 4. 80 12.21 Printers 5.82- 7.20 19.19 Transferrers (girls) 2.40- 3.60 10.89 1.92- 2.40 6.71 Cutters (girls) 1.08 4.73 2.40 7.81 Liners and gilders (women) . 4.08 14.52 Gilders fine work (men) 7.20- 9.60 18.42 6.00- 9.60 18.42 9.60- 12.00 30.00 4. 80- 6. 00 8.40 21.45 Decalcomania transfprrers (girls) 2.40- 3.60 10.28 $1.80 per kiln. 3.50 The decorators' wages, like those of the potters, are based on piecework prices and show a corresponding difference in rate paid, so that in either the production of the white ware or the decorating of the same the question of greater efficiency of the one or the other is of no consequence in considering the cost of production. 78959 VOL 113- TARIFF HEARINGS. PARAGRAPHS 92-94 POTTERY. ENGLISH METHOD OP ARRIVING AT COST. I have taken the following table from the English Manufacturing Potters' Associa- tion's book of costs, inserting therein corresponding American costs, which again proves the previous tables showing the cost of production: Cost for 20 dozen 7-inch plates. English cost. United States equiva- lent. Ameri- can cost. Clay, taken in biscuit: 168 pounds at 3s. 6d. per hundredweight. *. d. 5 3 $1.26 168 pounds, at 1 cent per pound SI. 68 Making: 2 6 .60 Actual wages, 4J cents .90 Biscuit (first fire): 6 saggers, at 2Jd. each to cover all cost of biscuit 1 3 1.86 .30 2.58 9 saggers, at 10 cents each to cover all cost of biscuit .90 Loss in biscuit 6J per cent ". 1 7 2.16 .14 3.48 .22 Glaze: 13 pounds, at ld. per pound 1 10 .44 .65 Glost (second fire): 13 saggers at 4d. each . ... 4 4 1.04 13 saggers, at 16 cents each 2.40 ptiltSj spnrSj H"fl pins . . . 1 9 .18 .25 Loss in glost, 10 per cent 16 6 1 7J 3.96 .39 7.00 .70 Add for working expenses, 33J per cent 18 li 6 4 4.35 1 45 7.70 2 57 24 2 5.80 10.27 American cost 77 per cent higher than English. RATE PER HOUR. Realizing how largely the actual number of hours worked during a given nominal day enters into the cost of the product, and knowing how greatly the days differ in length in the different countries, I secured from over 20 of our largest manufacturers the actual number of hours worked by the various operatives covering a given length of time. These figures show that 4,967 employees men, women, girls, and boys, skilled and unskilled worked 469,516 hours (actual time being kept) and earned $126,560.74, or an average of 24.83 cents per hour. Segregating these figures, I find the following average: Skilled men earn at the rate of $0.405 per hour; unskilled men earn at the rate of $0.225 per hour; skilled women earn at the rate of $0.221 per hour; unskilled women earn at the rate of $0.1:58 per hour; unskilled boys earn at the rate of $0.162 per hour; unskilled girls earn at the rate of $0.086 per hour. Not having as accurate data for England and other foreign countries, but knowing that at the low rate of wages every hour of the day must be occupied to produce the meager wages earned by them, I find the following result: Average rate of wages in the United States per hour $0. 2483 Average rate of wages in England per hour 11 Average rate of wages in Germany per hour 0913 Average rate of wages in Austria per hour 086 Average rate of wages in France per hour 0825 Average rate of wages in Belgium per hour 0693 Average rate of wages in Holland per hour 065 A v-praen rat c of wages in Japan per hour 025 SCHEDULE B. 659 PARAGRAPHS 92-94 POTTERY. CONTINENTAL POTTING. Following the same general outline, I give brief comparisons on the Continent: HOLLAND. MATERIALS. First, earthenware. Holland. America. Ballclay $5.27 $8 80 China clay . .. . . 7 39 12 00 Quartz (ground sand) 2.40 7.00 Cornwall stone 9 60 13 44 Saggar clay 1.20 2.75 Wad clay 1.20 1.62 Coal (English) 2.60 3.45 LABOR. Comparative weekly earnings. Holland. America (60 hours). Potters . $4.80 $26.10 5.24 19.98 4.80 26.16 1.75 None. 3.60 13.32 4.80 33.00 1.80 None. Saggar makers 4.80 27.54 Piecework prices. Holland. America. per dozen.. $0.0144 $0.0475 do .0048 .03 do.... .0048 .0325 ....do.... .0144 .035 do.... .48 .90 ...do .30 .70 do.... .21 .68 BELGIUM. Materials practically the same as Holland. LABOR. Comparative weekly earnings. Belgium. America (58J hours). $5.48 7.48 4.32 5.18 2.00 $25.44 29.48 17.25 25.50 None. 20.41 22.00 12. 9S 32.17 None. 26.85 Kiln placers (women) Printers Decorators 6.72 4.32 Dippers (men) f>.02 2.52 5.02 Satreir makers ... 660 TARIFF HEAEINGS. PABAGBAPHS 92-94 POTTEBY. GERMANY. Materials. The following table will indicate the difference in cost of materials: Materials. Germany. America. China clay (English) $8.11 $12.00 Ball clay (English) 5.98 8.80 Cornwall stone 10.20 13.44 Quartz (ground flints) 9.52 11.76 Saggar clay 3.21 3.82 Saggar clay, mixed 2.62 2.75 Wad clay 1.80 1.62 Coal 2. 62-4. 75 Coal (value as mixed) 3.75 3.45 White lead.... .... .04* 05| Zinc oxide .06i .08} B oracic acid . . .041 Paris white .43 .65 Printing paper .16 .33 Decalcomania sheets 16.20 80. 20-. 30 LABOR. Comparative weekly earnings. Germany. America (60 hours). Jiggormen . . $7.57 $30.72 Throwers -. 7.44 29.54 Turners 7.20 28.74 Pressers . . . 8.09 20.22 Castors (men) . . . 7.68 23.70 Casters (women) 4.86 18.50 Dippers (men) 7.23 33.00 Dippers (women) 3.47 None. Saggar makers 6.36 27.54 Mold makers .. 8.20 30 24 Packers 5.86 26.16 Warehousemen . . 5.38 13.08 Kiln placers (men) 7.85 26.16 Kiln placers ( women) . 3.47 None. Firemen (skilled) 5. 86-10. 08 19.32 Firemen, decorating kilns .. 6.48 28.50 Printers 6.56 20.94 Hand painters. - . ... 7.20 30.00 Transfcrrers (women) 2.58 11.22 Laborers (men), heavy work . 5.26 13.32 Laborers (men) ordinary 3.36 9.50 Laborers (women) 3.22 None. Selectors 4.56 12.00 Germany. America (GO hours). Plates, S inch $0.0286 $0. 0625 Plates, 7 inch .0254 .055 Plates, (i inch .0190 .05 Plates, 5 inch .017,5 .045 Cups, h;mv I7 1.29 I 'll IU'1"! .1H1 ! 24.50 8.68 26.00 8.68 22.00 5.79 18.00 4.82 20.00 4.63 30.00 2.89 None. 5.79 22.00 Saggar makers 6.75 27.50 6.75 22.00 5.21 18.00 3.08 9.00 8.68 25.00 4.80 15.00 3. 86 7.40 9. 05-15. 24 20. 00-50. 00 662 TAKIFF HEAKINGS. PARAGRAPHS 92-94 POTTERY. Comparative piecework prices. FESTOON OR FANCY SHAPES. - France. America. Plates: $0.081 SO. 12 .069 .095 .065 .08 .072 .12 6J inches deep .061 .10 .047 .05 Saucers " . .047 .05 Cups, hand: Teas . . .05 .15 Dishes: 9 inches (pressed) .204 .27 .278 .30 12 inches (pressed) .36 .63 .461 .63 16 inches (pressed) .552 .75 .324 .52 Boup tureens (pressed) 1.50 3.75 Covered dishes (pressed) .924 1.70 Casseroles (pressed) .972 1.70 Sauce boat and stand (pressed) .924 1.55 .162 .33 Covered butters and drs. (pressed ) .336 .60 .346 1.12 Creams (pressed) .276 .75 PLAIN EDGE OR HOTEL SHAPES. SO. 062 .051 .047 .056 .043 .041 .074 .096 .121 .137 .162 .242 .30 .393 CASTING, FINISHING, AND HANDLING. Dishes: 9-inch $0 112 $0 27 10-inch .151 .30 12-inch .198 .53 14-inch .253 .63 16-inch .303 .75 Bakrr's, SJ-ini'h . . .178 .52 Soup tureons .825 3 75 Covered dishes .508 1.70 Casseroles .534 1 70 Sauc-p boats .508 1.55 Pickles .089 33 Sugars, (U .19 1.12 Creams, fit .151 75 SCHEDULE B. 663 PARAGRAPHS 92-94 POTTERY. Comparative cost of materials. Germany. America. China clay Feldspar Quartz (ground flints) Quartz (ground sand) Saggar clay Wad clay Sand (raw) Coal ............................... Plaster of Paris (300-pound barrel) . $10.71 7.73 9.10 4.30 2.85 1.62 1.43 3.69 .45 $13.25 11.70 11.70 8.40 2.75 1.02 3.70 3.45 1.90 OVERHEAD CHARGES AND GENERAL EXPENSES. The overhead charges and expenses are calculated at from 26 to 33J per cent of the total cost of materials and labor. These figures correspond very closely with the English method of arriving at cost. GERMANY. A variety of materials of the same general character are used in Germany, and for comparative purposes I have taken those most closely resembling in kind and quality the materials used in America. For example, German coal can be purchased as low as $2.62 per ton. Coal in Germany ranges from $2.62 to $6.19 per ton. I have taken a grade of coal, or a mixture of coals, which most nearly corresponds with the American coal, valued at $3.69 per ton. LABOR. The pottery industry is scattered over the entire country of Germany, and the wages vary somewhat in different localities. The figures of the Chamber of Commerce, Sonneberg, confirm my figures and show that I am giving high values. This table is as follows: Average weekly earnings by age. [Time, 60 hours per week.] Males under 16 years: Day wage $2. 30 Piecework 2. 88 Males, 16 to 20 years: Day wage 2.88 Piecework 4. 32 Males, over 20 years: Day wage 3. 60 Piecework (maximum) 7. 20 Females under 16 years: Day wage 2. 16 Piecework 2. 88 Females, 16 to 20 years: Day wage 2. 16 Piecework 2. 64 Females over 20 years: Day wage 2. 16 Piecework 3. 00 Consul General Dillingham's report also corroborates these figures: Consul General Dillingham's report: Jiggermen and pressers (tableware) $5. 99 Casters (females) (tableware) 4-39 Kiln placers and burners 4. 76 Decorators (tableware and fine china) 5. 62 CG4 TARIFF HEARINGS. PARAGRAPHS 92-94 POTTERY. In the following table I give the range of wages, but for comparative purposes use the maximum figures: Comparative weekly earnings. Germany. Maxi- mum. America. Jiggerers: Men $4. 46-$8. 00 $8.00 $25.00 Women. 2.33- 4.85 4.85 None. Casters: Men 4.06- 7.68 7.68 23.00 Women 2.33- 4.86 4.86 None. Handlers: Women 1.93- 2.43 2.43 None. Men None. None. 20.00 Dish makers 4.46- 6.78 6.78 24.00 Pressers .... . .. . 4. 46- 6. 78 6.78 22.00 Throwers 4. 46- 8. 12 8.12 26.00 Turners 3.26- 8.12 8.12 22.00 Kiln men 4.84- 6.24 6.24 20.00 Kiln placers, women 2.78- 3.47 3.47 None. Firemen and burners 5.86-10.08 10.08 22.00 DiP S : 4. 56- 6. 00 6.00 30.00 Women 2.78- 3.47 3.47 None. Saggar makers ... . 6. 36- 7. 40 7.40 27.50 Mold makers 8.22-8.42 8.42 22.00 Packers 4. 86- 5. 75 5.75 18.00 Laborers: Men . . 3.60-4.50 4.50 9.00 Women 2.22- 2.38 2.38 None. Painters: Cheap work 3.38- 5.26 5.26 18.00 Fine work . . . . 5.26- 9.60 9.60 30.00 Printers.. 4.06- 6.56 6.56 21.00 Transferors ' 1.90- 2.75 2.75 7.40 Gilders: < ; iris 1.90- 2.57 2.57 7.50 Men (fine work) 4.06- 6.56 6.56 25.00 Selectors 3.04- 3.57 3.57 9.00 Foremen ... 3.57- 6.56 6.56 18.00 PIECEWORK PRICES. The table following gives the actual piecework prices paid in certain of the Ger- man factories. The price given indicates the net prices paid for the completed article. It is the practice in some, if not all, of the German factories to deduct per- centage for the use of the machinery, steam, etc. In some cases as much as 15 per cent is charged for this service. SCHEDULE B. PARAGRAPHS 92-94 POTTERY. Comparative piecework prices. 665 Qennany. America. Plates: 8-iuch, festoon $0.06 $0.12 7-i rich, festoon . .. .053 09} 0-inch, festoon .045 .06 5-inch, festoon .023 .051 8-inch, festoon, deep .06 .13 7-inch, festoon, deep .053 .11 C-inch, festoon, deep .045 .10 8-inch, plain .048 .08 7-inch, plain .04 .07 6-inch, plain .024 .06 5-inch, plain . .. .019 .05 8-inch, plain, deep .048 .09 7-inch, plain, deep .04 .08 G-inch, plain, deep .024 .07 Fruit saucers .021 .05 Ice creams .021 .05 Oatmeals .024 .0? Cups and saucers: Ordinary .06 .17| Thin .09 .20 Cups only: Ordinary .04 .121 Thin .068 .15 Saucers. .021 .05 Dishes: 2 and 2 J inch . .019 .09 3-inch .022 .09 10-inch .097 .18 . 12-inch .15 .22 14-inch .195 .29 16-inch .245 .37 Covered dishes (cast) .72 1.11 Covered dishes, round (cast) .59 1.06 .80 2.76 Sauce boat and stand .146 .98 Pickles .097 .28 Salads . .117 .75 Teapots .25 1.00 Sugars .122 .60 Creams . .097 .42 . AUSTRIA. The following is a comparative table of the materials used in Austria: Materials. Austria. America. Kaolin: Best $12.82 $14. 78 Second grade 12.00 12.00 Feldspar 7.10 11.76 14.21 Quartz: Austrian . 6.18 8.40 9.27 11.76 Saggar clay 1.62 2.75 .80 1.62 Coal: 1.22 2.84 3.44 2.84 3.45 Wood per cord 4.38 4.00 04A -05i Oxide of zinc, per pound . .06^ .12 04^ .06J 9.00 10.50 .06-$0.10 . 10-$0. 20 Plaster of Paris per 300 pounds barrels . . .60 1.90 .43 .05 666 TABIFF HEARINGS. PARAGRAPHS 92-94^-POTTERY. Labor Comparative weekly earnings. Austria. America. Dish makers $4.46-47.10 $7.10 $24.50 Jiggerers: Men 4 06- 6.09 6.09 25.00 Women . .. . 2. 03- 4. 87 4.87 None. Casters: Men 4.06- 6.09 6.09 23.00 Women 2.03- 4.06 4.06 None. Handlers: Women 1.60- 2.03 2.03 None. Men. None. None. 20.00 Pressers . 4.46- 7.10 7.10 22.00 Throwers :... 2.84- 8.12 8.12 26.00 Turners 3.26- 8.12 8.12 22.00 Kiln placers: Men 3.26- 6.09 6.09 20.00 Women 2. 64- 3. 65 3.65 None. Firemen and burners .. .... 7.20- 8.00 8.00 22.00 Dippers: Men None. None. 30.00 Women.. . . 2. 64- 3. 65 3.65 None. Sagger makers .' 3.65- 8.12 8.12 27.50 Mold makers ... 4. 06- 8. 12 8.12 22.00 Packers 3.25- 4.06 4.06 18.00 Laborers: Men 2.43-4.06 4.06 9.00 Women 2.03- 2.44 2.44 None. 3 65-10 15 10.15 30 00 Printers 4.06- 6.09 6.09 21.00 .Tran lake care of the enormous business they are absorbing. liv reference to the illustration above it will be noted that while the actual value of the merchandise is $13.91, the cost of the case, which is $2.40, is 17.26 per cent of the SCHEDULE B. 669 PARAGRAPHS 92-94 POTTERY. equal to 15.60 per cent. While the tariff provides a tax of 60 per cent on decorated goods, by the inclusion of the value of the case and packing at the same rate of duty, the actual duty is $9.79, equal to 70.37 per cent. Taking into consideration all the various dutiable items as shown by this illus- tration, it costs the importer $16.82 to land $13.91 worth of merchandise, which makes 120.91 per cent actual protection on the cost price at factory. These are startling figures and show beyond cavil or question what, the real protection is that has favored these domestic potteries and is driving the cheaper grades of im- ported ware from the market. During the last ten years the importation of decorated china have on the whole re- mained about stationary; in some years showing a slight increase, in others a decrease. This, in spite df the fact that in these ten years the population of the United States has greatly increased, and in the same period the production of domestic goods has in- creased annually, until now it reaches a yearly output of over $16,000.000. Attention is particularly directed to the fact that this growth and increase continued during the period when the duty on decorated china was only 35 per cent. A cogent argument in the nature of a concrete proposition which shows clearly the relative positions of foreign and domestic wares are the exhibits we show herewith, giving the actual cost price of certain articles laid down at the port of entry, compared with that of similar merchandise of domestic manufacture. Attention is also directed to the fact that in selling the domestic goods the domestic manufacturer has his profit and selling cost figured in the prices stated and given in the illustrative exhibits, while the prices given for the imported goods dp not include the importer's profit or selling expense, but represent the bare cost of importation laid down at the port of entry. If likewise the importer's profit should be added to the price of the imported article, the difference in percentage would be still more pronounced. The value at which domestic goods are put on the market and the cost of the imported article at the port of entry indicates plainly that the present tariff is highly excessive. These are concrete examples and speak for themselves more clearly than arguments or long tables of figures. Difference in percentage of value of imported and domestic articles based on foreign cost and domestic selling price. EXHIBIT l. Austrian dinner plate, costing $1.54^ a dozen. Dinner set, represented by Exhibit 1, consisting of 100 pieces 12 plates, 8 inches; 12 plates, 6 inches; 12 coupe soups, 6 inches; 12 saucers. 4 inches; 12 individual butters, 12 teas and saucers, 2 covered dishes, 1 saueeboat and stand, 1 pickle. 1 baker, 1 covered butter and drainer, 1 covered sugar 30s. 1 cream 30s, 1 meat dish, 12 inches; 1 meat dish, 14 inches costs laid down at Baltimore, including all charges, excepting importer's profit and selling expense, $9.69 a set. ILLUSTRATIVE EXHIBIT 1. Domestic dinner plate, selling at $0.67 a dozen 128. 10 Dinner set of 100 pieces, same combination as above, represented by Illus- trative Exhibit No. 1, selling at $4.94 a set 96. 1 EXHIBIT 2. Austrian dinner plate, costing $1.32 a dozen. Dinner set. represented by Exhibit 2. consisting of 100 pieces, costs laid down at Baltimore, including all charges, excepting importer's profit and selling expense, $8.37 a set. ILLUSTRATIVE EXHIBIT 2. Domestic dinner plato. soiling at 71jcentsa dozen... 85 J Dinner set of 100 pieces, represented by Illustrative Exhibit, No. 2, same combination as above, selling at $5.21 a set .. 60 F.XHIRTT I?. Austrian dinner plate. cn8iin $2.57 :i dozen. Dinner set. represented by Exhibit 3, consisting of [00 piece?, costs laid down at Baltimore, including all charges, excepting importer's profit and selling expense. $10.21 a set. 670 TARIFF HEABINGS. PARAGRAPHS 92-94 POTTERY. ILLUSTRATIVE EXHIBIT 3. Domestic dinner plate, selling at $1.424 a dozen 80J Dinner set of 100 pieces, represented by Illustrative Exhibit No. 3, same combination as above, selling at $10.40 a set 56 EXHIBIT 4. Austrian dinner plate, costing $1.54 a dozen. Dinner set, represented by Exhibit 5, consisting of 100 pieces, costs laid down at Baltimore, including all charges, excepting importer's profit and selling expense, $10.11 a set. ILLUSTRATIVE EXHIBIT 4. Domestic dinner plate, selling at $0.75 a dozen .- 105J Dinner set, 100 pieces, represented by Illustrative Exhibit 5, same combina- tion as above, selling at $5.48 a set 84J EXHIBIT 5. German dinner plate, costing $1.75 a dozen. Dinner set, represented by Exhibit 6, consisting of 100 pieces, same com- bination as above, costs laid down at Baltimore, including all charges, excepting importer's profit and selling expense, $11.15 a set. ILLUSTRATIVE EXHIBIT 5. Domestic dinner plate, selling at $0.75 a dozen 134 Dinner set of 100 pieces, represented by Illustrative Exhibit 6, same com- bination as above, selling at $5.48 a set 103$ EXHIBIT 6. German plate, costs laid down in Baltimore, including all charges, excepting importer's profit and selling expense, $0.70 10/12 a dozen. ILLUSTRATIVE EXHIBIT 6. Domestic plate comparable with Exhibit No. 11. Sold in this market by the domestic potteries at $0.40 J a dozen 74. 9 It may be claimed that the imported articles for which prices are given above are china, while the domestic articles are earthenware. While this is true, we particu- larly direct attention to the fact that the appearance of both is the same, and that the articles of domestic earthenware above mentioned are sold in this country in direct competition with the imported chinaware. We point out further that many of the articles of domestic earthenware are plainly stamped with the word "china," indicating the intention of the domestic manufacturer to lead the consumer to believe that he is buying china and not earthenware (see Illustrative Exhibits Nos. 4 and 8). Attention is further directed to Illustrative Exhibit No. 8, marked "Dresden china," and No. 9, marked "Limoges china," and Exhibit 7, all of which are earthenware of domestic manufacture. Attention is also called to the fact that in making the above comparisons we have used similar classes of decorations. Yesterday it was slated here that $15,000,000 worth of tableware was manufactured here against importations of $11,000,000 in foreign value, but this is not correct, because , in this $11,000,000 is included a goodly portion of goods that are not tableware at all, for instance; vases, statuettes, busts, figures, umbrella stands, flower pots, clock cases, steins, plaques, cuspidores, lamps, pedestals, toy tea sets, etc. We have not the figures at our disposal as no separation is made for statistical purposes by the (Jovernment, but we believe there are from 25 to 33J per cent of the total importa- tions of white and decorated chinaware. Attention is also called to Ihe fact that while the said $11,000,000 are correct so far as the year 1911 is concerned, during 1912 the importations decreased to $9,997,698. In view of all these statements herein made it is respectively submitted that 35 per cent duty on decorated as well as white chinaware affords ample protection to (lie domestic potters and the revenue. In addition, it is submitted, that no duty phould be imposed on the outside cases, casks, or crates. SCHEDULE B. 671 PARAGRAPHS 92-94 POTTERY. EXHIBIT B. One case containing 60 dozen decorated German china creamers, at 1 mark, equals 23 A cents a dozen, $14.28. Weight, 517 pounds; measure, 44.97 cubic feet. Value. Percent. Cost of case $2 40 16 78 Freight from German factory to European port 1 90 13 28 Ocean freight to Baltimore (38 cents per 100 pounds) 1 97 13 77 Marine insurance, customs entry, loss 1 month interest, cartage 34 2 38 60 per cent duty on value of goods $14 28 60 per cent duty on valae of case 240 16.68 10.01 70.10 16.62 116.87 On the basis of 1912 ocean freight rates it cost $16.62 to land $14.28 worth of china creamers in Baltimore. EXHIBIT C. One case containing 60 dozen decorated German china cups and saucers, at 1.50 marks, equals 35^ cents a dozen, $21.42. Weight, 770 pounds; measure, 39.7 cubic feet. Value. Percent. Cost of case .. .. .. $1.92 2.79 2.93 .50 14.00 9.97 13.02 13.69 2.33 65.35 Freight from German factory to European port Ocean freight to Baltimore (38 cents per 100 pounds) Marino iTlsiirV"", niist.r>m Q r ion nnnnHci .58 16.06 2.31 64.03 26.76 22.39 89.27 On the basis of 1912 ocean freight rates it cost fruit saucers in Baltimore. 22.39 to land $25.08 worth of china i\v. ).:!.' -_ VOL L l.'J 43 674 TAEIFF HEABINGS. PARAGRAPHS 92-94 POTTERY. EXHIBIT K. One case containing 40 dozen decorated German china salads, at 2.75 marks, equals 65 cents a dozen, $26.20. Weight 700 pounds, measure 34 cubic feet. Value. Per cent. $1.92 2.55 2.66 .62 16.87 7.33 9.73 10.15 2.37 64.39 Freight from German factory to European port Ocean freight to Baltimore (38 cents per 100 pounds) Marine insurance, customs entry, loss 1 month interest, cartage 60 per cent duty on value of goods $26. 20 60 per cent duty on value of case 1.92 28.12 24.62 93.97 On the basis of 1912 ocean freight rates it cost $24.62 to land $26.20 worth of china salads in Baltimore. EXHIBIT L. One cafe, containing 30 dozen decorated German china salads, at 3.90 marks, equal 93 cent,? a dozen, $27.90. Weight 810 pounds, measure 45 cubic feet. Value. Percent. Cost of case $2.40 8.60 Freight from German factory to European port 2.95 10.57 Ocean freight to Baltimore (38 cents per 100 pounds) . .... 3 08 11 04 Marine insurance customs entry, loss 1 month interest, cartage .67 2.40 60 per cent dut v on value of goods $27. 90 60 per cent duty on value of case 2.40 30.30 18.18 65.10 - 27.28 97.77 On the basL of 1912 ocean freight rates, it cost $27.28 to land $27.90 worth of china ealads in Baltimore. EXHIBIT M. One rase containing 30 dozen decorated German china salads, at 3.10 marks, equals 13| cents a dozen. $22.] 2. Weight 70S pounds, measure 34 cubic feet. Value. Per cent. Co^t of rase $1.92 8 68 Freight from ' ierman factory to European port 2.60 11.75 Ocean freight to Baltimore (38 cent? per 100 pounds) . 2.69 12.16 Marine insurance, customs entry, lo.^s ! month interest, cartage .54 2.44 60 per rent dut \- on value of goods $22. 12 60 per cent duty on value of case 1.92 24.04 14.42 65.19 22.17 100.22 On th" basis <>f 1012 ocean freight rales it cust $22.17 to land $22.12 worth of china ealads in Baltimore. SCHEDULE B. 675 PARAGRAPHS 92-94 POTTERY. EXHIBIT N. One case containing 40 dozen decorated German china salads, at 2.20 marks, equal 52 J cents a dozen, $20.93. Weight 715 pounds, measure 42.3 cubic feet. Value. Percent. Cost of case $1 92 9 17 Freight from German factory to Kuropeanport 2 63 12 57 Ocean freight to Baltimore (38 cents per 100 pounds' 2 72 13 00 Marine insurance, customs entrv. loss 1 month interest, cartage 48 2 29 60 per cent duty on value of goods . $20 93 60 percent duty on value of case 1 92 13 71 22.85 21.46 102.53 On the basis of 1912 ocean freight rates it cost $21.46 to land $20.93 worth of china salads in Baltimore. EXHIBIT 0. One case containing 36 dozen decorated German china cake plates, at 2.70 marks, equals 64} cents a dozen, $23.13. Weight, 616 pounds; measure, 36 cubic feet. Value. Percent Cost of case $1 92 8 30 Freight from German factory to European port 2 26 9 77 Ocean freight to Baltimore ("38 cents p*er 100 pounds) 2.34 10 12 Marine insurance customs entry, loss 1 month interest, cartage 55 2 38 60 per cent duty on value of goods $23. 13 60 per cent duty on value of case 1.92 25.05 15.03 64.98 22.10 95.55 On the basis of 1912 ocean freight rates it cost $22.10 to land $23.13 worth of china cake plates in Baltimore. EXHIBIT P. One case containing 24 dozen decorated. German china sugars and creams, at 2 marks, equals 71^ rents a dozen, $17.14. Weight, 506 pounds; measure, 40.1 cubic feet. Value. Percent. $1.92 11.21 1.86 10.86 1.92 11.21 .42 2.45 19.06 11.42 66.66 17.55 102.39 On the basis of 1912 ocean freight rates, it cost $17.55 to land $17.14 worth of china sugars and creams in Baltimore. Attention is called to the fact that in the present year, 1913, the ocean freight rates are 31.6 per cent higher than given in the above exhibits. Respectfully submitted. GEO. KOLB, HERMAN SIEOEL, JULIUS ROSENFELD, Committee for the Importers of German and Austrian China, New York City. 676 TARIFF HEAEINGS. PARAGRAPHS 92-94 POTTERY. Mr. Kolb thereupon exhibited samples of china and earthenware to the committee. Mr. PAYNE. Do you know what they pay for decoration in Ger- many? Mr. KOLB. I could not give you any information on that score. I am a manufacturer and not an importer. Mr. PAYNE. I am told it costs $1.50 a week in Great Britain and $8 a week here for the girls who dp that work. Mr. KOLB. I think, Mr. Payne, if I would ask a manufacturer with whom I was dealing what he paid for the applying of the decorations or what it cost him he would tell me that was none of my business. Mr. PAYNE. I presume he would, if he was importing into the United States. The CHAIRMAN. Are you almost through, Mr. Kolb ? Mr. HILL. I would like to ask one question. Really, as a matter between one china and another, is not china to-day a luxury ? Mr. KOLB. No, sir; not the class of merchandise we are talking about here to-day. Mr. HILL. One will look just as well as the other and wear just as well ? Mr. KOLB. Sir? Mr. HILL. Is it not a luxury ? Mr. KOLB. Xo. sir; you would not call that a luxury [exhibiting plate]? Mr. HILL. If I was working for $6 or $8 or $10 or $12 a week, as the average workman in the United States does, it would be a luxury to me. Mr. KOLB. I would not say that. Mr. HILL. Is it not a luxury to the average American citizen? Mr. KOLB. Xo. sir. Mr. HILL. And ought it not to pay a high tax? Mr. KOLB. Xo. sir. Here is something that I would like to show, to show you that the domestic potter to-day is stamping a good portion of his ware as china. Here, for instance. 1 have a plate that is stamped "Dresden China'' (exhibiting plate); here is another platter marked "Limoges China." Mr. PAVXK. He ought to be sent to State prison for life for that. Mr. KOLB. That would happen if the importer did it. Mi 1 . PAYNE. You couldn't get an importer in State prison when he actually commits a fraud and gets thousands of dollars out of the Government ( Mr. KOLB. The Government would have to prove it first, before they could do it. The CHAIRMAN. Gentlemen, that concludes Mr. Kolb's statement. (i ];<>. BORGFELDT i Co., ('rsTOMs DEPARTMENT, Xnr York. X. Y.. January 30, 1913. Mr [>\\]ii ( '. !;.>[ IK. C'lrrl: f'miiniitln . P. M> I>i \i;Mi; Koi'Ki; l'.\ dircciiiui of the committee we beg to hand you herewith ii ci'j'V ui memoranda in rrl/uiial ui L-erlain sUUcineiHs made by Mr. Burgess and Mr. SCHEDULE B. 677 PARAGRAPHS 92-94 POTTERY. Wells in reference to the hearings before the committee on Schedule B, which I will thank you to have printed in the proper place, and oblige, Yours, truly, CEO. BORGFELDT & Co., JOHN E. DAWSING, Customs Manager. MKMORANDA IN REBUTTAL OP STATEMENTS MADE BY WILLIAM BURGESS AND W. E. WELLS, REPRESENTING THE DOMESTIC POTTERY INTERESTS. [Before the Ways and Means Committee, Jan. 8, 1913.] Mr. Burgess stated that fully 90 per cent of the total cost of pottery ware represents labor and that 66$ per cent goes out in the pay envelope. This is at variance with statement of the other representative, Mr. Wells, where he shows besides wages, the "pay envelope" kind of Mr. Burgess, a small item of over $20,000, made up of "all other wages, $14,054.33, and office and management, $6,240." This represents but one of his factories, and, presumably, the figures are most favorable. This is an expense and can not be considered anything else and certainly does not go into the beneficent pay envelope. Also in. this connection Mr. Burgess confuses the figures. He shows of the pro- duction of $115.263 the labor item to be $58,912, or 51$ per cent. Here he reckons interest at $9,430, whereas he states an investment of $100,000 should produce $150,000 of finished product, so that according to these figures, on a production of $115,263 a liberal estimate of investment necessary would be $80,000 with interest of about $5,000. Mr. Burgess stated that they are supplying less than two-fifths of the consump- tion of dinner ware. According to his figures the domestic production is $16,000,000 or $17,000.000, and the landed cost of importations would be about the same. In the amount of the imported goods represented 25 to 33 per cent of fancy articles, not dinner ware, and high-priced china goods which in no way come into competition with the domestic production and should not be used as a basis for comparison. In this connection Mr. Burgess in defending the domestic pottery interests made the sorrowful statement that the business never made a fortune for anyone. While that may merely be regarded as a relative expression, 200 per cent dividends might be regarded as approaching "comfortable conditions." The Onandago Pottery Co. (see recent issue of May 19, 1912, of the Pottery, Glass, and Brass Salesman), which is practically the only pottery company in the United States producing real china, declared a stock dividend of $500,000 on a capital of $250.000, or, in other words, a 200 per cent dividend. Mr. Burgess's allusion to Royal pottery companies is another misleading state, ment. The Royal Worcester is not a Royal factory of any sort. It is royal only in name and is not subsidized by the Government. There is no such thing as a " Royal Japanese Factory," nor has one existed for the past 50 years. These facts and others of like purport it does not seem probable the domestic interests were ignorant of. Mr. Burgess again submits misleading statements. He states the dividends of various foreign factories: Kahla. 25 per cent; Rosenthal, 18 per cent; Jonhson Bros., 26f per cent, etc., when as a matter of fact Kahla pays 25 per cent on about 2.000.000 marks ($500.000) of common stock and about 3$ to 4 per cent on about 4,000.000 marks ($800.000) bonds, making an actual dividend of 10 or 11 per cent on their capitalization; also these dividends are chiefly derived from electrical goods, such as insulators, etc., not imported into this country. The Rosenthal earnings are based on similar conditions, and the output of Johnson Bros, is practically two-thirds sanitary ware, none of which is imported into this market. His other statements have the same value for accuracy. In comparison of American factories he gives earnings of factories as averaging 6f per cent, which, if submitted, is equal to the factories of any of the pottery centers of Europe. In this connection Mr. Wells gives the average earnings of 21 factories as 8 per cent. He carefully gives the average. It would be illuminating to have the figures of a few of the most successful. We have shown one. supra, paying a 200 per cent dividend. Assuming the statement made by Mr. Wells indicating the average profit of 21 fac- tories to be (i per cent to be correct, this does not necessarily indicate that the Amer- ican factories are entitled to special protection, because o!' the Uct that they do not show large profits, although this is intended to be implied. 678 TARIFF HEARINGS. PARAGRAPHS 92-94 POTTERY. In any industry the dividend returns will vary in different factories making the same merchandise, according to the different degrees of ability displayed by the management. It is certain that the inducements of the actual profits, whether declared as divi- dends or in whatever manner received, have been sufficient to cause a large increase in the capital invested and an increase in the number of kilns built, from 239 in 1890 and about 1,000 in 1912, and several of the big factories have announced a further increase in the number of kilns. The increase and output has been from $4,000,000 to $17,000,000. As the protection enjoyed has been enormous, it appears evident that the normal rate of dividend shown is not an adequate index of the real prosperity of the industry. It seems probable that the well-managed concerns show consider- able profit, and that the figures are only held down to the average of (if per cent by reason of the poor showing of the poorly managed or equipped plants. The figures submitted do not disguise the fact that some of the factories were operated at a loss, but as they do not wish the actual dividends declared making up the average, they are not conclusive, and can not be used as an index of the condition in the industry. On page Mr. Burgess gives some figures which he states are based on informa- tion obtained by him while an American consul in the potting district of England. This was 20 years ago (1893) and although he states they have been confirmed he carefully refrained from giving any data on the subject. AM a further index of the misleading character of his statement to the Ways and Means Committee' we quote his figures and what they are actually to-day. It is unnecessary to suggest that this correct information, if not actually in Mr. Burgess' possession, could have been easily obtained. The price of coal in England. Mr. Burgess' figures: Coal, $2.56; cobbles, $2.10; slack, $1.38. Actual prices to-day in England of the grades of coal used by the pottery manu- facturers are an follows: Coal, 14s. lOd. ($3.61); cockshead or burgy from 13s. 15d. ($3.16 to S3. 65i: slack. 10s. 6d. ($2.57); coal, domestic (Mr. Burgess), $3.45 per ton. Actually delivered in East Liverpool: Coal, $2.75; slack, $1.75. Wages. English. American. Plate makers ("man): Present average price Includes 3 attendants earnim Average net earnini; Mr. Burgess's figures. Cup makers (women): Present average price Includes 3 attendants earnim Average net earninc. Mr. Burgess's figures. Saucer maker ( women 1: Present average price Includes 3 attendants earnins. f s. d. 5 10 1 8 300 180 500 1 4 300 1 8 3 10 1 2 $26. 88 0.81 20.07 6.90 14. GO 6.81 7.79 4.94 24.33 5.83 18.50 8.42 10. 00 0.81 9.25 4.06 17.03 5.35 11.08 7.22 15.81 5.94 SCHEDULE B. 679 PARAGRAPHS 92-94 POTTERY. Mr. Burgess made the statement that the cheaper grade of foreign goods can be sold at a less price than they can produce them here and that therefore the American manufacturers are confined to middle-grade goods, upon which the domestic compe- tition is keen, and that therefore profits have not been in excess of 5J per cent. The indisputable fact is that up to 10 years ago the 10-cent stores, which sold the cheaper grades of goods, supplied themselves almost exclusively with imported pottery, while at the present time 75 per cent of their purchases are made in this country. We also refer to our brief, and particularly to Exhibits 1 to 6, in contradiction of Burgess's statement that very few American goods (dinner ware) are sold in depart- ment stores, but that almost all is imported. It is, of course, true that they do not have to be kept in stockj as foreign goods do, because American goods can be pur- chased as wanted, which is in favor of the American goods and a handicap against the imported goods. In other words, a purchaser of foreign goods has to take the risk of currying stock and tie up hie money, whereas he can buy American goods as wanted. Freight rates obtained from English manufacturers: In former years from Liver- pool, England, to Baltimore, and from Liverpool to St. Louis show from figures that the published English freight rates now on earthenware are measurement rates. It should be shown now these measurement rates figure out if converted to the 100- pound rate. Mr. J. Jones, as stated to the Ways and Means Committee, seems to be of the idea that it figures out 25 cents on 100 pounds, or three times as much as wan asserted by Mr. Burgess. We also desire to direct particular attention of the committee to the false marking of earthenware by the very domestic manufacturers whose representatives appeared before you. We submitted samples of various earthenware which is stamped Limo- ges" china, "Dresden" china for "China." There is a very heavy penalty pre- scribed for the false marking of imported articles, the purpose being, of course, to protect the American consumer. There is, however, no corresponding penalty pro- tecting the American consumer from the false marking and misrepresentations of the domestic manufacturer, as set forth in this instance. It is a matter of common knowl- edge that Limoges china and Dresden china are the very best grades of merchandise manufactured, and the purpose of the false marking by the domestic manufacturers is clearly to deceive the consumer. We attach hereto also an advertisement clipped from the Cosmopolitan Magazine, marked "Exhibit A," referring to "Homer Laughlin China" manufactured by Homer Laughlin China Co. These goods are earthenware and not china, nor does this concern manufacture china. Mr. W. E. Wells, whose testimony is herein referred to, is con- nected with this concern and appeared as their representative. We also attach hereto an advertisement of "Limoges China Dinnerware," manu- factured by the Limoges China Co. of Sebring, Ohio. (Exhibit B.) We do not deny the right of a company using its incorporated name, but the purpose of stamping earthenware "Limoges china" seems clear and apparent. It is respectfully suggested that in giving the necessary consideration and weight to the testimony of the domestic pottery concerns that this committee take due cog- nizance of the many glaring inaccuracies of statements made, of errors of omission aa well as commission. Respectfully submitted. GEO. KOLB, HERMAN SIEQEL, JULIUS ROSENFELD, Committee for the Importers of German and Austrian China, New York City. EXHIBIT A. HOMER LAUGHLIN CHINA FOR SERVICE. For real household service, for real satisfaction, you can not buy better, more attrac- tive, or more serviceable dinner ware than Homer Laughlin china, but you can pay much higher prices than are asked for it. Sold almost everywhere. The trade-mark , "Homer Laughlin," stamped on the underside of each dish is our guaranty NOTE. People tell us that "The China Book " is one of the most beautiful and inter- esting brochures recently produced. Send for your copy. It is free. THB HOMER LAUQHLIN CHINA Co.. Newell, W. Va. 680 TARIFF HEARINGS. PARAGRAPHS 92-94 POTTERY. EXHIBIT B. The Limoges china dinner ware equals the best of imported ware at one-eighth of the cost, made in any size set or assortment. We are the recognized leaders on coffee and tea assortments. Our Royal Flow blue and French Flow green treatments are deserv- edly popular. We are constantly creating special plans to stimulate your business. Write us for samples. THE LIMOGES CHINA Co., Sebring, Ohio. STATEMENT OF WILL T. BLAKE, ON BEHALF OF THE NATIONAL BROTHERHOOD OF OPERATIVE POTTERS. Mr. BLAKE. Mr. Chairman, this is just a statement which perhaps will explain itself. In view of the fact that your committee is meeting at this time for the purpose of determining the wisdom of revising the tariff schedules on pottery, and mindful of the further fact that such revision if it be downward, judging from past experience, would undoubtedly prove a serious blow and setback to the American pottery industry, we herewith submit for your information and careful thought a few facts which we trust may be of some meager assistance to you in reaching a fair and equitable conclusion. Should the present tariff schedules on pottery be cut so as to re- quire a reduction in the present selling price of the American pottery manufacturers' goods, we have been given assurance by no less an authority than Mr. W. E. Wells himself, an official of and spokesman for the United States Potters' Association, that there must and inev- itably will follow a reduction in the wages of the employees of such industry in proportion to and as a consequence of such tariff revision. In confirmation of the foregoing statement, we herewith submit in part Mr. Wells's public declarations to the press: If the rate of duty on pottery is reduced, it will mean that the selling price must be reduced. The owners will not, and can not, sell their output on a closer margin than they are doing to-day, and if they must reduce prices they must either close their plants or reduce wages. Just as surely as the workmen are getting every dollar of the protection to-day they will have to stand every dollar of any reduction made. This is no threat nor bluff, but is the deliberate statement of one who knows pre- cisely what he is talking about. This result occurred in 1894, and there is more reason for it now than there was at that time. At present one-half of the pottery used in this country is made abroad, which is fairly good evidence that the protective tariff has not made a monopoly in this par- ticular line. We are fighting with the importer every day to hold our ground and still pay American wages. The owner can not take another dollar out of his pocket in hold his present proportion of the business, and it will bear repeating that if the new administration should invite pottery to this country at a lower price that dif- ference will have to be met right out of the workinsman's pocket. Mr. Wells, I believe, is present in the audience this afternoon, and if that statement is not correct I should be very glad to have him indicate it. It will be remembered, perhaps, by the older members of your com- mittee that when the Wilson bill was enacted into law back in 1894, materially reducing the tariff and thereby inviting greater foreign competition, many of the potteries closed oLown entirely, and few, if any, of them were operated much better than half time. The employees were not only forced against their wishes to accept irreg- SCHEDULE B. 681 PARAGRAPHS 92 94 POTTERY. ular employment, but were obliged as well to work at a 12$ per cent reduction. These conditions, too, obtained throughout the "life of the Wilson law. Following the enactment of the Dingle v law in 1897, which mate- rially increased the tariff, the trade of the domestic pottery manu- facturer in a comparatively short time assumed a more normal and prosperous condition, steadier work was furnished the employees, and the wage scale which prevailed prior to the 12$ per cent reduction was restored. No attempt has since been made on the part of the United States Potters' Association to reduce wages. On the contrary, in many branches of the industry material wage increases have been con- ceded to the workmen, which, in effect, have enabled them to surround themselves with more of the necessaries and comforts of life. In view of the expressed declaration of the United States Potters' Association as to what the workmen may expect should the present tariff schedules be lowered, and in view of what actually did nappen between the years 1894 and 1897 when the schedules were lowered, we say to you frankly, gentlemen of the committee, and with the utmost sincerity, that if the present schedules are reduced and the growth of the pottery industry is impaired or retarded, or if the wages of our men are jeopardized or lowered, we should consider it an act of retrogression a step backward. As prosperous at the country now is, and as considerate as our em- ployers have been on questions affecting wages, our men to-day, with all of these things in their favor, have an exceedingly difficult mathe- matical problem on their hands to meet the everyday obligations of life. They assuredly do not want to take a step backward, and be- lieving as they do that if the present schedules are lowered it un- questionably means a step backward, we, as their representatives, do urge upon you, Mr. Chairman and gentlemen of the committee, that the present schedules on pottery be not disturbed. This statement is signed by Frank H. Hutchins, Michael Kennedy, Edwin James Whitehead, Samuel T. Burgess, and Will T. Blake, representatives of the National Brotherhood of Operative Potters. I desire to yield the remaining portion of my time, Mr. Chairman, to Mr. Frank II. Hutchins, the first vice president of our organiza- tion, of Trenton, N. J., who wishes to make a brief oral statement. Mr. LONGWORTH. I desire to ask a few questions. You are a prac- tical potter? Mr. BLAKE. Yes, sir. Mr. LOXGWORTH. A member of the Potters' Association? Mr. BLAKE. Yes, sir. Mr. LOXGWORTH. How many of them are there? Mr. BLAKE. In our organization, I should say, Mr. Longworth, there are about 7,000. In the industry which we represent there are perhaps 13,000 or 14,000. But not all those are skilled laborers. We take in all of the skilled branches, with perhaps one exception. Mr. LONGWORTH. Would your experience as a skilled potter fit you for any other employment in case the pottery industry in this coun- try should be abandoned ? 'Mr. BLAKE. I think not. unless it would be to publish a trade paper of some character. Mr. LOXGWORTH. But no trade occupation? 682 TAKIFF HEARINGS. PARAGRAPHS 92-94 POTTERY. Mr. BLAKE. No trade occupation. The CHAIRMAN. Mr. Menge has already yielded his time to you. Mr. BLAKE. Yes, sir. The CHAIRMAN. You have consumed the time allotted to you, -and there are other witnesses to follow. We can hear him when we get through, unless it is a very brief statement. Mr. BLAKE. Just a brief oral statement. The CHAIRMAN. How long would he want ? Mr. BLAKE. About three or four minutes. The CHAIRMAN. I would not want to cut him off; I just do not want to have him go in ahead of other witnesses, but if it is only for a minute or two, I will hear him. If he wants to make a long state- ment we will hear him when we get through with these other wit- nesses. Mr. BLAKE. Yes, sir. The CHAIRMAN. I say, if it is only a minute or two we will hear him now. Mr. BLAKE. Thank you. WAGES IN THE POTTERY INDUSTRY. CHICAGO, January IS, 191 S. Chairman UNDERWOOD, Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: The Chicago papers have contained accounts during the last few days of hearings before the Ways and Means Committee in which the men interested in maintaining the tariff on earthenware, pottery, tiles, etc., defended the present tariff on these wares. Apparently the arguments used were that a reduction of the tariff would lower the American workman to the level of his European competitor. During the past year I have become closely acquainted with the pottery industry and the making of tiles in this country and in England, Germany, and Austria, in the course of a study I was asked to make for the Bureau of Labor. I do not wish to burden you with a long exposition of this subject, but only to call your attention to the fallacy of the arguments of men who claim that the protective tariff raises the wages of our potters and that the conditions under which they work are better than those in foreign countries. The white-ware potters of Trenton and East Liverpool are, it is true, well paid. They have short hours and can to a great extent control the conditions under which they work, but it is not the tariff which has achieved these results for them; it is their strong organization, the National Brotherhood of Operative Potters. The women in this same field are unorganized, and they are poorly paid and are not protected at all against the dangers of lead poisoning, as they would be were they working in English or German potteries. The "art and utility" pottery trade of the Zanesville district and the tile works of Ohio and other States enjoy, according to our consul in Staffordshire, as much pro- tection from the tariff as does the white-ware branch, but here you will find wages wretchedly low, women working for 85 cente to $1.10 a day; men from $1.35 to $1.65; skilled dippers of many years' experience making less than $2 a day. This is because these branches are unorganized, and in the Zanesville district no other work but this can be obtained. It is not an alien industry; the workpeople are all Americans except in a few tile factories. Their late of lead poisoning is more than twice as great as that of the white-ware potters, owing to the more dangerous glaze which is used and to the poverty of (he workers. As for conditions in those potteries and tile works, it seems absurd to talk of lowering American standards to the level of the European, for the latter is so much higher. The Englishman or German works under a system of factory control which eliminates as far as possible, in our present state of knowledge, the danger of lead poisoning. It is recognized that ho is employed in a dangerous trade and that he has a right to pro- tection. Our American potters and tile workers, men and women, work in an atmos- phere of poisonous dust and the barest essentials of sanitary control are wanting. As SCHEDULE B. 683 PARAGRAPHS 95-96 CARBON. a result, with less than one-quarter of the workers we have almost twice as many cases of lead poisoning in a year. The protective tariff does not secure fair wages for the workers in the pottery and tile industry. \Vhere wages are fair, they are the result of trade-unioniam. The unorganized branches are dangerous and a detriment, not an advantage, to the com- munities which harbor them, because of the character of the work, the lack of sanitary control, and the low wages which bring in their train the undernourishment predis- posing to lead poisoning. These unorganized potters and tile workers have no spokesman, but there are physicians in the Zanesville district who could speak for them and there are intelligent men and women among them who, if they wore not afraid, could testify to what I have said. If you wish any further details, Bulletin No. 104 of the Bureau of Labor will furnish them. Yours, sincerely, ALICE HAMILTON. TELEGRAM OF BURLEY & TYRELL CO., CHICAGO, ILL. CHICAGO, ILL., January 7, 191S. lf< m. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, Washington, D. C.: As extensive handlers of both foreign and domestic earthenware and French and German china we strongly recommend a duty as follows: Earthenware, 25 per cent and china 35 per cent. BURLEY & TYRELL Co. PARAGRAPH 95. Articles and wares composed wholly or in chief value of earthy or mineral substances, not specially provided for in this section, whether susceptible of decoration or not, if not decorated in any manner, thirty-five per centum ad valorem; if decorated, forty-five per centum ad valorem; carbon, not specially provided for in this section, twenty per centum ad valorem ; electrodes, brushes, plates, and disks, all the foregoing composed wholly or in chief value of car- bon, thirty per centum ad valorem. For talc, see Italian Chamber of Commerce, page 111. PARAGRAPH 96. Gas retorts, twenty per centum ad valorem ; lava tips for burners, ten cents per gross and fifteen per centum ad valorem; carbons for electric lighting, wholly or partly finished, made entirely from petroleum coke, thirty-five cents per hundred feet ; if composed chiefly of lampblack or .retort carbon, sixty-five cents per hundred feet ; filter tubes, thirty-five per centum ad valo- rem ; porous carbon pots for electric batteries, without metallic connections, twenty per centum ad valorem. CARBON. STATEMENT OF J. W. VOORHIS, ESQ., REPRESENTING THE AMERICAN EVER READY CO. PARAGRAPH 95. Mr. VOORHIS. J. W. Voorhis, representing the American Ever Ready Co. Mr. HARRISON. What is the paragraph to which you will speak? Mr. VOORIIIS. Paragraph 95 of the tariff act of 1909. Mr. HARRISON. Proceed. Mr. VOORHIS. Mr. Chairman and gentlemen, the item in question as defined in the tariff act of 1909 is ''Carbon not especially provided for in this section is dutiable at 20 per cent ad valorem." This is a sort of misnomer, for this article, which is the article in question which I wish to dwell upon, is carbon clinkers. 684 TARIFF HEARINGS. PARAGRAPHS 95-96 -CARBON. The paragraph in the act leads as follows: Articles and wares composed wholly or in chief value of earthy or mineral substances, not specially provided for in this section, whether susceptible of decoration or not, if not decorated in any manner, thirty-five per centum ad valorem; if decorated, forty-five per centum ad valorem; carbon, not specially provided for in this section, twenty per centum ad valorem; electrodes, brushes, plates, and disks, all the fore- going, composed wholly or in chief value of carbon, thirty per centum ad valorem, We pray that this article be placed on the free list as coal gas retort carbon clinkers. Coal gas retort carbon, as its name denotes, is a by-product in the manufacture of illuminating gas where coal is exclusively used. There are two ways in which the manufacture of illuminating gas is carried on in this country one where coal is used exclusively and the other where oil is used and produces what is known as water gas. Coal gas retort carbon is a residue which remains in the retorts and is only procured when these retorts are cleaned, which, in accordance with the style of the retort in use by the gas works, is done between three and six times annually. This material, which is nothing but a clinker or slag, is a morpheus carbon, and is formed on the inside of the retort, caused by the distillation of coal in the manufac- ture of illuminating gas. It is not an earthy or mineral substance, and should not be so classified as such in the tariff act. The gas works in the United States manufacturing gas exclusively from coal are very limited and are becoming less each year, because it is cheaper to make gas from oil, which is known as water gas. The residue or clinker from retorts making water gas is not the same material as the article referred to in this statement. It will not be many years before the manufacture of illuminating gas from coal is entirely abandoned. All manufacturers of electrical apparatus requiring carbon of this nature will be compelled to draw their supplies of this material from abroad, where, owing to the many different and varied uses of the by-products and other conditions both in England and con- tinental Europe, it pays them to manufacture illuminating gas solely from coal, because they derive a large revenue from the sale of these by-products, such as sal ammoniac, coal tar, sulphate of ammonia, and many other articles which are produced in the distillation of coal from which illuminating gas is made. Therefore, it is necessary for the American manufacturers to depend on the production from abroad to keep them supplied. This material when ground is one of (lie principal factors in the manufacture of dry batteries. 1 lie annual consumption of this material in the United States is approximately between six and ten thousand tons per annum. The domestic production of this material is approximately fifteen hundred tons per annum. It is not nearly sufficient to cover the require- ments, and the result is that importation has to be resorted to and a substitute for (his material has to be used when, for some reason or other, this material can not be procured abroad. The substitute, which is petroleum coke, a residue obtained in the distillation or refining of petroleum, is not equal to coal-gas retort carbon clinkers and has to be mixed with a high-priced graphite to increase its efficiency equal to coal-gas retort carbon, which increases the cost of production of dry batteries. SCHEDULE B. 685 PARAGRAPHS 95-96 CARBON. With the ever-increasing dry-battery business there should be no restriction in the way of duty or otherwise over this factor, which plays such an important part in the manufacture of these batteries that are a necessity to a large number of our people. The revenue derived from the importation of this material at the present time is only a very minor item. In fact, the duty being removed would not be of any moment in the revenue of this Govern- ment. It is impossible to-manufacture coal-gas retort carbon commercially in this country. The present duty on this material does not benefit any manufacturer, nor does it protect any American labor. All the efforts of gas manufacturers in this country are directed toward one point, and that is to decrease the accumulation of this clinker in the retorts, which in itself is the best evidence that the duty does not benefit them, as they do not regard any duty placed upon this article any inducement whatever to manufacture this material. We respectfully pray that your honorable committee will recom- mend to change paragraph 95 of the act of 1909, eliminating carbon clinkers from "carbon not specially provided for," at 20 per cent ad valorem, and place same on the free list, and that you define this as coal-gas retort carbon clinkers. BRIEFS SUBMITTED ON THE SUBJECT OF CARBON BRUSHES. ST. MARYS, PA., January $, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: We take the liberty of addressing you in regard to a revision of the tariff on carbon brushes. The present rate of duty on carbon brushes, carbon electrodes, and carbon plates is 30 per cent. This is not sufficient to protect the American manufacturers, as in the process of manufacture of carbon brushes and electrodes the labor is more than one-half the cost, and as the labor in Germany and France is so much cheaper we feel that a protection of 50 per cent should be given domestic manufacturers to equalize the difference in the cost of production. Every carbon brush, in going through the factory, is handled from 20 to 31 times before it is ready for the consumer. The importation of carbon brushes is on the increase right along, although the American product is equal in every respect to the foreign goods, and therefore the duty should be increased on all classes of carbon material for the protection of the American manufacturer. We trust that you will give this question your careful consideration. Thanking you, we are. Very respectfully, yours, SPEER CARBON Co., J. S. SPEER, President and General Manager. ST. MARYS, PA., January 4, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives. DEAR SIR: Our president, Mr. ,T. S. Speer, wrote you on the 3d instant in regard to the present rate of duty on carbon brushes, electrodes, and other carbon articles (paragraph 95 of the law of 1909V He requested me to send you samples of our product to show the amount of labor on fiame. and I am sending under separate cover throe small samples of carbon brushes, showing the hand milling which requires not less than 20 separate operations before the brush is finished. This is a brush that is sold by us at 3.3 cents each, and is equal in every way to the imported brushes. 686 TARIFF HEARINGS. PARAGRAPHS 95-96 CARBON. The importation of carbon brushes and electrodes is very large and is increasing very rapidly, and the present tariff rate does not give the American manufacturer sufficient protection. The rate at present is 30 per cent, and this should be increased to 50 per cent for the reason that this higher rate is necessary to equalize the difference in the cost of production. Yours, truly, SPEER CARBON Co., G. P. FRYLING, Treasurer. BRADFORD, PA., U. S. A., January 6, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: As manufacturers of carbon brushes for electric motors and generators we are interested in the tariff on this class of material. Competition at the present time is very keen, as there are a large number of manu- facturers in this country. Under the present tariff, the sale of foreign brushes has increased materially, and we are very apprehensive of the results that might follow from any curtailment of protection. One point which we desire to emphasize is that the cost of production of carbon articles is composed largely of labor. Our pay roll constitutes by far our largest item of expense, and the labor is of a kind that is ex- tremely well paid. We feel that the circumstances warrant a tariff of 60 per cent. Our company is engaged exclusively in brush manufacture, and whether we expand to include other carbon materials, for example, electric-light carbons, will depend largely upon what measure of protection we enjoy. It is our firm belief that a reduction from the present tariff will result in forcing out of business at least some of the smaller plants which are now manufacturing carbon. Very truly, yours, CORLISS CARBON Co., OTTO KOCH, President and Manager. PROTEST AGAINST REDUCTION OF DUTY ON CARBONS. PARAGRAPH 95. STACKPOLE CARBON Co., St. Marys, Pa., January 9, 1913. CONGRESSMAN TNDERWOOD. Chairman of the Tariff Committee, Washington, D. C. HONORED SIR: We wish to enter our protest, as manufacturers of carbon and carbon products, against any reduction of duty on this product. "We are obliged to pay $1.75 to 82 for ordinary labor in our works to manufacture the same carbon that the foreign carbon manufacturers pay as low as 35 to 50 cents a day for labor to do the same class of work. The writer absolutely knows this to be the case from the fact that several years ago we contemplated manufacturing a grade of carbon that was manufactured by a foreign carbon works, and one of the parties that was interested in this foreign carbon works contemplated taking stock in our company and gave us the manufactured cost of this carbon abroad in their plant and what it would cost to make it in this country; and I consider the present duty on carbons is entirely too low. Even at the present duty on foreign carbons the foreign manufacturers are in a position to undersell us on certain lines of carbon, and one case in particular we quoted our cost price on a particular carbon to find out how low the foreigner could go, and the exporter of this particular foreign carbon went below the price we quoted, which was cost; so this will give you some idea for the reasons that we enter our protest against reduction of the tariff on carbon products and the reason why we ask for an increase. If the foreign carbon manufacturers can bring their product here and pay the present duty and undersell us in cases I know of where we have quoted our cost price in order to find out how cheap they could sell their product at a profit, we certainly have just reasons to ask for an increase in duty on this particular product. Our books are open to inspection of any committee, and we are not trying to earn dividends on watered stock or inflated valuations. Our investment represents actual cash value and every share of stock that has been issued by this company has been paid for in cash. Hoping yon will give this some consideration, we remain, Yours, A- cry truly, STACKPOLE CARBON Co., H. C. STACKPOLE, Treasurer. SCHEDULE B. 687 PARAGRAPHS 95-96 CARBON. BRIEF OF THE CHAVANT MANUFACTURING CO., JERSEY CITY, N. J. PARAGRAPH 95. JERSEY CITY, N. J., January 6, 191S. The COMMITTEE ON WAYS AND MEANS, Washington, D. C. GENTLEMEN: I desire to file this brief in support of a proposed amendment to the pravision in paragraph 95, tariff act of 1909, for articles composed of earthy or mineral substances. Following is paragraph 95, tariff act of 1909, as it is desired to have it amended, the words to be omitted being inclosed in brackets and those to be substituted being italicized: ''95. [Articles and waresj Manufactures or materials composed or consisting wholly or in chief value of earthy or mineral substances, not specially provided for in this section, whether susceptible of decoration or not, if not decorated in any manner, thirty-five per centum ad valorem; if decorated, forty-five per centum ad valorem; *." (No change suggested for remainder of paragraph, which relates only to carbon articles.) The above amendment was drawn in order to accomplish what is believed to have been the original intent of Congress and to restore to said paragraph a wide variety of manufactured articles composed of earthy or mineral substances which have been excluded by judicial construction. The reason for the particular words suggested in the proposed amendment is found in the peculiar history of this paragraph and its prototypes. Probably in no paragraph in the tariff have repeated legislative efforts to broaden its purview met with so little success. The provision first appeared as paragraph 86, in the Wilson tariff of 1894, enumerat- ing "all articles composed of earthen or mineral substances, including lava tips for burners." The General Appraisers held that this did not cover putz pomade, a com- pleted article composed of mineral substances and ready for immediate use, being a metal polish put up in small tin boxes in the form of paste. The reason given for this conclusion was that, though it was not questioned that the merchandise being an "article" and "composed of * * * mineral substances " was literally within the language of the provision, yet it should be excluded therefrom and thrown into the catch-all clause for articles not enumerated in the act, on the ground that the paragraph was not intended to "cover a substance without form," such as the paste in question, also because the enumeration of lava tips "would indicate that Congress did not intend the provision to cover everything that was wholly or chiefly of mineral origin." (Ramsperger case, G. A. 3280, T. D. 16584.) The law was then amended in a broadening way, "wares" being added to the previous word "articles," "earthen" being changed to "earthy, "composed" being made more definite by the addition of "wholly or in chief value," and the provision for lava tips being omitted. (Par. 97, Dingley tariff of 1897.) But the courts still further narrowed the purview of the paragraph by holding that the pres- ence of the expressions "if not decorated" and if decorated" implied intention to exclude articles not susceptible of decoration. (Dingelstedt v. U. S., 91 Fed., 112; U. S. v. Downing, 201 U. S., 354.) The effect of these authoritative adjudications was to give the paragraph a more restricted operation under the act of 1897 than the really narrower paragraph of the preceding act of 1894 had received. In Notes on Tariff JRevisipn, a publication pre- pared for the use of the Ways and Means Committee in drafting the Payne Act of 1909, this comment was made (p. 109): "These judicial determinations have been followed in hundreds of decisions by the lower courts and by the Board of General Appraisers. The rulings cited have all but emasculated paragraph 97 and have undoubtedly caused a tre- mendous loss to the revenue; for the articles excluded from classification under this paragraph, where they would have yielded 35 per cent duty, have, in the vast majority of instances, been relegated to the provision for nonenumerated articles dutiable at only 20 per cent. The remedy is to amend the paragraph so as to provide that such articles of earthy or mineral substances as would otherwise fall within the terms of the paragraph shall not be excluded therefrom because they are not suscep- tible of decoration, but shall be dutiable under the provision therein for such articles when not decorated." With this information before it as to the results of its legislation, Congress made another effort to extend the paragraph by adding the words "whether susceptible 688 TARIFF HEARINGS. PABAGBAPHS 95-96 CABBON. of decoration or not." These new words have, of course, been given some effect, but the courts have followed the previous policy of imputing to the paragraph the narrowest possible intendment. For instance, the Court of Customs Appeals held that the law did not cover merchandise which unquestionably was "articles or wares," and was "composed wholly or in chief value of * * * mineral substances." (Salo- mon v. U. S., 2 Ct. Gust. Appls., 92, T. D. 31635; U. S. v. Embossing Co., 3 Ct. Cust. Appls., T. D. 32536; Bartley v. U. S., 3 Ct. Cust. Appls., T. D. 32961.) As showing the narrow distinctions forced upon the court, it is pointed out that in two of these decisions the merchandise was held to be "articles" within the mean- ing of the catch-all clause of paragraph 480 (under which the court placed them), but not "articles" within the meaning of the paragraph now in question. The Salomon case, just cited, related to powdered talc. The reason given by the court for excluding it from the mineral paragraph was that the words "composed of" meant "made up of a mineral substance, and not the substance itself, which the ground talc clearly is." In the Embossing Co. case the articles in dispute consisted of so-called plasticine and plastilina, which were concededly of mineral origin and were completed articles, ready for the ultimate consumer, being in small boxes in a form adapting them for their intended use, chiefly by young children for modeling purposes, both at school and as toys at home. It is found at the toy counters of department stores. The reason given for excluding it from the paragraph was that the law was not intended to cover merchandise having no "specific or definite form or shape." This decision was followed in the Bartley case, which related to so-called plate powder put up in small boxes for retail, with sealed printed coverings containing directions for use, therefore being in its final condition and completely ready for use by the ultimate consumer in polishing silver. The court said that the paragraph could not be held to cover an impalpable powder like that just described. The Board of General Appraisers went even further and held that the word "com- posed" should, by reason of its etymological significance, be construed as relating only to compositions, and not including articles made from a single material; but this ruling was reversed by the Customs Court. (U. S. v. Tamm, 2 Ct. Cust. Appls., 425. T. D. 32173.) The foregoing is not meant as a criticism of the various judicial tribunals concerned in making the rulings referred to, nor as suggesting that strong reasons did not exist for their conclusions. The application of their decisions, however, leaves the law uneven in its practical operation. Suppose the plate powder in the Bartley case had been pressed into cakes, the same as some other well-known articles of similar use, probably it would then have been held to be within the mineral-substance paragraph, because having a specific form. The same is true of the talc involved in the Salomon case, if. instead of having been ground to powder, it had been ground into disks, rubes, or other forms. From the legislative standpoint no reason exists why in the one case the duty should be 20 per cent and in the other 35 per cent. Our purpose is to secure the adoption of a form of words that will result in a uniform rate of duty, whether the merchandise shall have a specific form or otherwise. Under the traditional legislative policy that increases duty in accordance with the labor that goes into the production of an article, the rate of 35 per cent would have been much more appropriate on plasticine, plastilina, and plate powder, which are carefully prepared articles, than on some of the much simpler articles of a specific form which the court has held were properly so assessed. In order to meet the decisions above cited, to secure symmetry of rate, and to restore i ho effect which it is very likely Congress intended the provision should have from iho very beginning in 1S94, it is necessary to use words not subject to the limitations which the courts have attached to the present form of expression. It is thought that this can surely bo accomplished in the way suggested at the beginning of this brief, namely, by striking out the ineffective words ''articles and wares" and inserting in lieu thereof ''manufactures and materials," as well as adding "consisting." The use of the word "manufactures' 1 was suggested by the Customs Court in the Embossing Co. case, where it said: "Had Congress intended to change the meaning given to 'articles and wares' by the tribunals whose duty it was to interpret the paragraph, it could have done so very readily by substituting for the words 'articles and wares' the word 'manufac- tures. ' ' The word "materials" might not ho necessary were it. not for the strong judicial inclination to give the provision a narrow scope. It is possible, in view of this ten- dency, that the icrni "manufactures," by itself, would be held applicable only to SCHEDULE B. 689 PARAGRAPHS 95-96 CARBON. articles of substantial structure, that is, in definite and specific forms, and completely ready for ultimate use. So narrow a meaning could not be imputed to "materials. ' The new word "consisting" probably would not be necessary in other paragraphs of the act which have not been so narrowly construed, but in view of the disposition to restrict the paragraph, it is prudent to make the provision in question as explicit as possible. That at least can do no harm. It may be urged that the suggested amendment, while having the effect of assuring the desired classification, would also include crude articles which ought to be free of duty. This is answered by pointing to paragraph 626, which will presumably be reen- acted, and which places on the free list: "Minerals, crude or not advanced in value or condition by refining or grinding, or by other process of manufacture, not specially provided for in this section. This specific language would retain within the free list any imports now classified there. The only effect of the proposed amendment would be to place within para- graph 95 articles which by judicial action have been taken out of tnat paragraph. Respectfully, CHAVANT MANUFACTURING Co., Jersey City, N. J. BRIEF OF THE CHAMPION CARBON CO., CINCINNATI, OHIO. CINCINNATI, OHIO. January 11, 191S. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. MY DEAR SIR: It was my intention to have appeared. before your committee during the adjustment of the tariff schedule on carbon, and because of unavoidable conditions which prevented my being present, I wish to add my protest to any reduction of the present tariff, and at the same time emphasize to you many reasons why the tariff on carbon products of every description should be increased rather than reduced. It is only natural that the importer and domestic manufacturer should be far apart, but in view of the fact that the importations under the present tariff have increased enormously and that home manufactures have been unable to increase their output anything like an apportionate amount, shows conclusively the necessity and justness of further protection for American manufactures of carbon. I would say and urge that your honorable committee increase the duty on flaming arc carbons to at least 50 per cent and on brushes, electrodes, plates, disks, and that class of carbons to 50 per cent. Nothing less would be high enough to cover the difference in the cost of manufacture in this country and Germany and France, where most of the imported product comes from. No statistics give us the exact consumption of the various forms of carbons, but we who are constantly canvassing the consumers, know and fully understand the tremen- dous increase in the sale of foreign carbons and realize that the importers, because of the German and French labor being fully not more than one-third of our cost of labor, are getting rich, and we feel that the above increase is necessary to give even moderate protection to domestic manufactures. Now, in view of the fact that our product is used only by municipalities and large corporations and does not affect the great common people nor the laborer, except as moderate and just protection will permit us to maintain our present scale of wages, may we urge that you increase the duty rather than decrease it? Most respectfully submitted by THE CHAMPION CARBON Co., By CLAY B. STEELE, Vice President and General Manager. STATEMENT OF HUGO REISINGER, OF 11 BROADWAY, NEW YORK, ON THE SUBJECT OF ELECTRIC-LIGHT CARBONS, ETC. The CHAIRMAN. Will you kindly state what paragraph you wish to talk about? Mr. REISINGER. Paragraphs 95 and 96, eJectric-light carbons, bat- tery carbons, and brushes. 78959 VOL 113 44 690 TARIFF HEARINGS. PARAGRAPHS 95-96 CARBON. The CHAIRMAN. You may proceed, Mr. Reisinger. Mr. REISINGER. Mr. Chairman, and gentlemen of the committee, I had an opportunity of making oral statement to the Committee on Ways ana Means on Monday, November 23, 1908, on the subject of a duty on electric-light carbons, battery carbons, and brushes, and I pointed out at that time that by procuring from the Fifty-fifth Con- gress an enactment of a practically prohibitory duty on this class of goods the trust, known as the National Carbon Co., has been able to prevent the importation of low-grade carbons entirely and to secure such an amount of protection on the high-grade carbons as to enable them to control 80 per cent of the output of this kind. After I had spoken, a statement was made by Mr. J. S. Crider, of Cleveland, Ohio, representing the National Carbon Co. (see hearing, pp. 1545 to 1551), and in view of that statement I now beg again leave to respectfully submit in writing a few additional suggestions on this very important subject. It will be remembered that my statement made before the Commit- tee on Ways and Means on November 23, 1908, that the carbon busi- ness was in the hands of a trust was not denied. On the contrary, on page 1459, in answer to questions by Mr. Underwood, Mr. Crider conceded that his company was the only concern that made high-grade carbons and that it had a monopoly of the American market. It also appears from his testimony on the same page that his com- pany had $4,500,000 of preferred stock (presumably representing the actual capital investment), and $5,500,000 common stock (presum- ably representing expectations or hopes, in fact water) . The National Carbon Co. are paying 7 per cent dividends on the preferred stock and 6 per cent dividends on the common, and on November 7, 1910, paid an extra dividend on the common stock of 15 per cent. Besides they have accumulated an enormous surplus. The Carbon Trust 1ms been protected by an unreasonably high rate of duty since the Dingley tariff went into effect, and in fact was founded on the strength of this tariff. The present administration, as everyone knows, promised a down- ward revision, and I take the liberty to explain to you how this revision, which is always advertised as "downward," looks in reality. The duty under the Dingley tariff was 90 cents per 100 carbons. This rate was "reduced" by the Payne- Aldrich tariff to 65 cents per 100 feet, but the adding of the wor.-nt, on lampblack 25 per cent, and on retort carbon 20 per cent. These SCHEDULE B. 699 PARAGRAPHS 95-96 CARBON. are raw materials for the carbon industry; and in view of the fact that these materials are much cheaper in Europe than in the United States, also that the cost of labor in the foreign factories is at least 70 per cent less than in the United States, we respect- fully ask that these flaming carbons or flaming electrodes be assessed at an ad valorem duty of not less than 45 per cent. To provide this, we suggest the insertion after the duty on lampblack carbons, in paragraph 96, and preceding the duty on filter tubes, of the following: "flaming or luminous arc-lamp carbons or arc-lamp electrodes having flame-producing chemicals in the core, on the surface or mixed homogeneously into the body thereof, or manufactured in such manner that the weight of any materials other than carbon is more than 5 per cent of the total weight, 45 per cent ad valorem." We are confident that the foreign cost of flaming arc carbons plus cost of transporta- tion to this country and a duty of 45 per cent will total an amount considerably less than the cost of manufacture of the same size and grade in this country under the most favorable conditions and that the duty requested will provide a continuance of the abundant foreign competition which has always existed in the carbon industry. The ad valorem rate we have asked to cover flaming arc carbons will provide for a duty in proportion to their value and will result in a reduction of from 10 to 15 per cent in the duty on the styles of flaming arc carbons which have been in use for several years. With regard to that portion of paragraph 95 relating to carbons and reading as follows "carbon, not specially provided for in this section, 20 per cent ad valorem, electrodes, brushes, plates and discs, all of the foregoing composed wholly or in chief value of carbon, 30 per cent ad valorem" we understand that the first clause is intended to cover retort carbon or any other manufactured form of carbon used as raw material, but does not include lampblack, which carries a duty of 25 per cent as provided in paragraph 45. Lampblack and retort carbon are important raw materials in the manufacture of the carbon articles enumer- ated in the second clause, and labor constitutes from 40 to 60 per cent of the cost, and in some of the more highly finished articles it is more than 75 per cent of the cost. In the case of carbon brushes many of them are imported with flexible copper cable terminals commonly called "pigtails" attached, and these copper cables if imported separately would be assessed with a duty of at least 45 per cent. We understand, however, that both carbon brush and copper connection, the latter usually being worth more than the brush, are admitted at 30 per cent duty. The first clause of paragraph 95 reads: "Articles and wares composed wholly or in chief value of earthy or mineral sub- stances, not specially provided for in this section, whether susceptible of decoration or not, if not decorated in any manner, 35 per cent ad valorem; if decorated, 45 per cent ad valorem." While copper coating, tinning, and copper connections may possibly not properly be termed decorations, it is certain that many of these carbon articles are highly fin- ished products and that labor forms a large part of their cost. Developments in electric motors and generators have made the brush business more complicated, so that instead of the plain rectangular carbon block formerly used the demand is for highly finished pieces with bevels, holes and slots and metal connections securely attached thereto. This is also true of other carbon articles used in connection with electrical apparatus. Most of this work is done by hand, and in order to compete with the products of the German and French factories some readjustment is necessary. We believe that the duty on these manufactures of carbon should be at least as much as provided in the paragraph just quoted and respectfully request that the balance of the paragraph be changed to read as follows: "Unmanufactured carbon, not specially provided for in this section, twenty per centum ad valorem; electrodes for electric furnace, electrolytic and battery purposes, brushes, plates and disks, all of the foregoing composed wholly or in chief value of carbon, thirty-five per centum ad valorem; if metal plated or having metal attach- ments, forty-five per centum ad valorem." We have suggested a slight change in the wording of this clause in order to more specifically describe electrodes and definitely distinguish them from lighting carbons which are frequently referred to as lamp electrodes. In conclusion permit us to call your attention to the fact that the French tariff is 75 francs per hundred kilos. This" is equivalent to 79 cents per hundred feet on \ by 12 inch regular high grade electric light carbons and a correspondingly high ad valorem rate on brushes and similar carbon products. The German tariff is 30 marks per hundred kilos but according to bulletin of the Department of Commerce and Labor entitled Tariff Series No. 7, the German Government imposes an internal-revenue tax 700 TARIFF HEARINGS. PARAGRAPHS 95-96 CARBON. on imports of electric-light carbons which is from two to three times the amount of the customs duty and in addition to it. This is equivalent to an ad valorem duty of about 123 per cent on \ by 12 solid carbons and 189 per cent on the same size of cored carbons. The foreign manufacturers of high-grade carbons are located chiefly in Germany and France and supply not only their own countries but all of the balance of the world, with the exception of about 50 per cent of the consumption of high-grade carbons in the United States. Respectfully submitted. NATIONAL CARBON COMPANY, JAMES PARMELEE, President. J. S. CRIDER, General Manager. The following statement of net sales, cost, gross and net profit on high-grade carbons for the period of 2 years and 10 months ending October 31, 1912, has been by me verified and found correct: Net sales Jan. 1, 1910, to Oct. 31, 1912 $1,551,931.55 Cost 1, 375, 878. 83 Profit 176, 052. 72 Less annual depreciation charges, not included in cost of product 83, 414. 55 Net profit 92, 638. 17 Per cent of profit on sales 11. 34 Per cent of net profit 5. 97 F. D. LAWRENCE, Auditor and Assistant Treasurer. Subscribed and sworn to before me this 4th day of January, 1913. [SEAL.] HOWARD L. BARKDULL, Notary Public. MEMORANDUM OF CHANGES SUGGESTED IN DUTIES ON CARBON PRODUCTS, PARAGRAPHS NO. 95 AND 96. 95. Beginning with the word "carbon" strike out balance of paragraph and insert the following: "Unmanufactured carbon, not specially provided for in this section, twenty per centum ad valorem; electrodes for electric furnace, electrolytic and battery purposes, brushes, plates, and discs, all of the foregoing composed wholly or in chief value of carbon, thirty-five per centum ad valorem; if metal plated or having metal attach- ments, forty-five per centum ad valofem." !)(>. After the words "sixty-five cents per hundred feet" and before the words "filter tubes" insert the following: "Flaming or luminous arc lamp carbons or arc lamp electrodes having flame-produc- ing chemicals in tho core, on the surface, or mixed homogeneously into the body thereof, or manufactured in such manner that the weight of any materials other than carbon i.s more than five per centum of the total weight, forty-five per centum ad valorem." NATIONAL CARBON Co., Cleveland, Ohio, January 9, 1913. Hon. OSCAR \Y. ['XDKRWOOD, Chairman Wans and Means Committee, Washington, D. C. DEAR SIR: In view of the statements made at the hearing on the 8th instant by Hugo Reisinger, an importer in New York, relative to the tariff on carbon products, paragraphs 95 and !)(;. and particularly his statement that the National Carbon Co. is a trust and has nearly all of the carbon business in the United States, we beg to state that this company is not a trust, it is not interested in any other carbon company, and it has not a monopoly of the business in this country. We manufacture a complete line of carbon products, including electric-light carbons, flaming arc- carl tons, carbon brushes, carbon electrodes, carbon specialties, wet and dry SCHEDULE B. 701 PARAGRAPHS 95-96 CARBON. batteries. We have less than 50 per cent of the total business, including petroleum coke carbons, high-grade carbons, flaming arc carbons, carbon brushes, electrodes, and batteries. In addition to the National Carbon Co., the following are manufacturers of carbon products in the United States: American Carbon & Battery Co., East St. Louis, 111.; Champion Carbon Co., Love- land, Ohio; Ntmgesser Carbon & Battery Co., Cleveland, Ohio; Speer Carbon Co., St. Marys, Pa.; Stackpole Carbon & Battery Co., St. Marys, Pa.; Corliss Carbon Co., Brad- ford, Pa.; Pure Carbon Co., Wellsville, N. Y.; Electrode Co. of America, Niagara Falls, N. Y.; International Acheson Graphite Co., Niagara Falls, N. Y.; Holmes Fibre Graphite Co., Philadelphia, Pa.; Manhattan Electrical Supply Co., New York, Jersey City, N. J., and Ravenna, Ohio;.Jos. Dixon Crucible Co., Jersey City, N. J. While dry batteries constitute about 60 per cent of the total annual sales of this company, we supply probably not more than 40 per cent of the dry batteries used. The principal other manufacturers of dry batteries are : Manhattan Electrical Supply Co., New York; American Ever Ready Co., New York; Stackpole Carbon & Battery Co., St. Marys, Pa.; Nungesser Carbon & Battery Co., Cleveland, Ohio; Rock Island Battery Co., Cincinnati, Ohio; French Battery Co., Madison, Wis.; American Carbon & Battery Co., East St. Louis, 111.; and a number of smaller manufacturers. Reference was also made to cost of labor and raw materials. We pay our labor more than three tunes the wages paid for similar work in France and Germany, and lampblack, an important raw material, costs here almost twice as much as in Europe. On account of its nature the freight rate is high and cost of package very expensive for which reason we do not import it although duty is only 25 per cent. In addition to Mr. Reisinger, the following are known to us as importers of carbon products: L. Frorup & Co., New York; H. M. Hirschberg Co., New York; E. E. Cary Co., New York; W. J. Jeandron, New York; Morgan Crucible Co., New York; Kiewert & Co., Milwaukee, Wis. We know also that carbon electrodes are imported from Sweden and a factory in southern France, but we do not know names of agents here. Electro Metals (Ltd.), of Welland, Canada, also sell electrodes in the United States. If Mr. Reisinger's business has fallen off as he intimated, it must mean that other importers have increased their sales, which we believe to be the case, as the Govern- ment statistics show an increase in both value and amount of importations. Since we began making high-grade carbons the price in this country has greatly decreased and the cost of high-grade inclosed-arc carbons, the kind chiefly used for street lighting, ia less than 75 cents per lamp per year. Respectfully submitted. NATIONAL CARBON Co., J. S. CRIDER, General Manager. NATIONAL CARBON Co., Cleveland, Ohio, February 4, 191S. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives Washington, D. C. DEAR SIR: In reviewing the testimony submitted at the tariff hearings and in the preparation of a new bill, we ask your consideration of the petition and supplemental letter and statements submitted by us. We wrote on January 2 that we expected to present a statement but in some way our name was not put on your schedule, which was no doubt due to the great amount of work in connection with preparations for the hearings. The writer was present and, when it appeared that there would be no time for appearances other than those on the calendar, filed the statement with Mr. Roper late on January 9, the last day for hearings under Schedule B. When the Payne bill was being prepared and during its consideration by Congress many misleading, and in some cases manifestly untruthful, statements were made by importers of carbon products, in circular letters and in the public press, one of them being that if the proposed duty on electric-light carbons was adopted it would mean an increase in cost to electric lighting companies of $9 per thousand, which in later statements was reduced to $3.50 per thousand. Instead of the large increase in price predicted, the prices on high grade electric lighting carbons are now about 20 per cent lower than they were prior to the adoption of the present law, and the statistics appar- ently show that the importers have at least 50 per cent of the total trade in the United States in high grade carbons. 702 TARIFF HEARINGS. PARAGRAPHS 95-96 CARBON. We supply about 50 per cent of the total number of high grade electric light carbons used in this country, and even including the low grade electric light carbons, the use of which is rapidly disappearing, our proportion of the total trade in all kinds of carbons used for lighting is less than 60 per cent of the total value. The sworn statement which we submitted shows that our profit on high grade carbons, from January 1, 1910 to October 31, 1912, was but 5.97 per cent, and in view of this we earnestly hope that your committee will make no reduction in the duty on regular high grade electric light carbons. We have suggested an ad valorem duty to cover flaming arc carbons on account of their great range in prices and the uncer- tainty as to what the future may bring forth, but the established prices on regular high grade carbons are within a comparatively close range, and we therefore ask for a continuance of a specific duty on them. We manufacture a complete line of carbon products, but our production is probably less than 50 per cent of the total consumption of these products. High grade carbons for electric lighting comprise only about 10 per cent of our total sales, while dry batteries constitute about 60 per cent of our total business, and yet we supply as near as we can estimate not more than 40 per cent of the total number of dry batteries sold. We have very active competition in all branches of our business, the other domestic manufacturers being as follows: American Carbon & Battery Co., East St. Louis, 111.; Champion Carbon Co., Loveland, Ohio; Nungesser Carbon & Battery Co., Cleveland, Ohio; Speer Carbon Co. and Stackpole Carbon Co., St. Marys, Pa.; Corliss Carbon Co., Bradford, Pa.; Pure Carbon Co., Wellsville, N. Y.; Electrode Co. of America and International Acheson Graphite Co., Niagara Falls, N. Y.; Holmes Fiber Graphite Co., Philadelphia, Pa.; Manhattan Electric Supply Co., New York, Jersey City, N. J., and Ravenna, Ohio; Jos. Dixon Crucible Co., Jersey City, N. J. In addition to these there are a number of companies which make dry batteries only and it will therefore be apparent to you, despite statements of importers to the contrary, that we do not have a monopoly of any branch of the carbon business in this country. This company is not a trust and is not interested in any other carbon company. Yours, respectfully, NATIONAL CARBON Co., J. S. CRIDER, General Manager. BRIEF OF CORLISS CARBON CO., OF BRADFORD, PA. [Carbon (Pars. 95 and 96. Tariff of 1909).] CORLISS CARBON Co., Bradford, Pa., January 9, 1913. As the representative of one of the independent carbon manufacturers, I beg to state that the company I represent, namely, the Corliss Carbon Co., was organized and incor- porated about three years ago under the laws of the State of Pennsylvania. That the present existing tariff laws have some bearing upon the existence of our enterprise can not be doubted. Our capitalization is $200,000, fully paid in. The stockholders of the company are mostly business men of Bradford, Pa., and Buffalo, N. Y. These gentlemen furnished the capital for this industry with the natural expectation of at least receiving a fair remuneration on their investment, but as yet said remuneration has not been forthcoming. During the period of the operation of this plant, to wit, two years, money has been actually lost. The perfecting and manufacturing of high- grade carbon product is exceeding slow, tedious, and expensive, and with the con- tinued demand and the rapid development in the electrical world for higher efficiency in carbon brushes the cost of operating the plant is growing more expensive. Par- ticularly is the work of experimenting of necessity very costly. In the manufacture of carbon products we must employ workmen who are excep- tionally skilled, their wages ranging from $2 to $5 per day, and as a result our pay roll constitutes the largest item of expense. Besides these skilled mechanics, we employ electrical engineers, as well as expert electrical chemists. Competition at the present time is very keen owing to the existence of a number of large manufacturers in this country. Under the present tariff the sale of foreign brushes has increased amazingly, and we are very apprehensive of the result from any curtail- ment of protection. In fact, we feel that the circumstances warrant an increase of tariff. Our company is engaged exclusively in carbon brush manufacture, and whether we will eventually expand to include other carbon materials for example, electric-light carbons, battery carbons, etc. will depend largely upon what measure of protection we enjoy. SCHEDULE B. 703 PARAGRAPHS 97-98 GLASS AND GLASSWARE. The personnel of our stockholders comprise practically the principal stockholders in an independent oil refinery located in the city of Bradford, Pa. Petroleum coke is one of its by-products which constitutes the base for raw material in the carbon industry. It is an undisputed fact that three years ago this product was a drug upon the market and hard to dispose of, which, together with the fact that fuel oil, another by-product of the refinery was also a drug on the market, the market price of which was 2 cents per gallon at that time. Undoubtedly this condition was the principal reason for this company engaging in the carbon industry. I trust this committee will consider all the foregoing facts carefully and before mak- ing any recommendations procure further facts pertaining to this industry. CORLISS CARBON Co., OTTO KOCH, President. PARAGRAPH 97. Plain green or colored, molded or pressed, and flint, lime, or lead glass bottles, vials, jars, and. covered or uncovered demijohns, and carboys, any of the foregoing, filled or unfilled, not otherwise specially provided for in this section, and whether their contents be dutiable or free (except such as contain merchandise subject to an ad valorem rate of duty, or to a rate of duty based in whole or in part upon the value thereof which shall be dutiable at the rate applicable to their contents), shall pay duty as follows : If holding more than one pint, one cent per pound; if holding not more than one pint and not less than one-fourth of a pint, one and one-half cents per pound; if holding less than one-fourth of a pint, fifty cents per gross: Provided, That none of the above articles shall pay a less rate of duty than forty per centum ad valorem: Provided further, That the terms bottles, vials, jars, demijohns, and carboys, as used herein, shall be restricted to such articles when suitable for use as and of the character ordinarily employed as containers for the holding or trans- portation of merchandise, and not as appliances or implements in chemical or other operations. For glass bottles, see Italian Chamber of Commerce, page 481. PARAGRAPH 98. Glass bottles, decanters, and all articles of every description composed wholly or in chief value of glass, ornamented or decorated in any manner, or cut, engraved, painted, decorated, ornamented, colored, stained, silvered, gilded, etched, sand blasted, frosted, or printed in any manner, or ground (except such grinding as is necessary for fitting stoppers or for purposes other than ornamentation), and all articles of every description, including bottles and bottle glassware, composed wholly or in chief value of glass blown either in a mold or otherwise ; all of the foregoing, not specially provided for in this section, filled or unfilled, and whether their contents be dutiable or free, sixty per centum ad valorem: Provided, That for the purposes of this act bottles with cut glass stoppers shall, with the stoppers, be deemed entireties. GLASS AND GLASSWARE. STATEMENT OF HARRY JENKINS, ALTON, ILL. The CHAIRMAN. What do you wish to talk about, Mr. Jenkins? Mr. JENKINS. The bottle schedule. The CHAIRMAN. All right; proceed. Mr. JENKINS. We ask that this committee do not reduce the tariff on bottles any lower than it is. We have always had the bottle tariff and been protected from the lower-paid workmen of Europe, whose bottles are shipped in here in greater quantities than one would imagine. It has been helpful to us in the years gone by, and we believe we have been able to maintain a living wage by that tariff being on there. The CHAIRMAN. What is the production of bottles in this country? Air. JENKINS. I could not say as to that, sir. I do not know. I have not the least idea in the world. I speak from a workman's 704 TARIFF HEARINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. standpoint. I do not know anything about the manufacturing end of it. I am a workman, a member of the union, and only know just exactly what I see in traveling around, and could not tell you what the production of bottles is. But we do believe we have perhaps had it drilled into us in years gone by, that as a result of a reduction of tariff on bottles, upon the goods of foreign workmen, we know it to be a fact that there was, in the years gone by, some 10 years ago, perhaps, on the Pacific slope, oottles sent hi there as ballast and used in the wine and water trade. The CHAIRMAN. Do you know of any bottles coming in on the eastern seaboard at all ? Mr. JENKINS. I could not say that I do know anything about that; no, sir. I could not say that. But there are some that come in that way, there is no doubt, because we hear of that. The CHAIRMAN. Is that all ? Mr. HILL. Of course, you are an American? Mr. JENKINS. Yes, sir. Mr. HILL. Born here ? Mr. JENKINS. Yes, sir. Mr. HILL. Are you acquainted with any of your associates who are working in this industry who are foreigners ? Mr. JENKINS. Oh, yes. Mr. HILL. Who have worked on both sides of the water? Mr. JENKINS. Yes. Mr. HILL. Is it your judgment that they are any more efficient here, can turn out any more work, than they would on the other side ? Mr. JENKINS. According to the conditions, I think they turn out more work here than they do on the other side. Mr. HILL. Are those bottles blown by machinery or otherwise? Mr. JENKINS. By both. Mr. HILL. Both'? Mr. JENKINS. Yes, sir. Mr. HILL. Which method produces the larger profits, machinery or Mr. JENKINS (interposing.) I presume the machinery. Mr. HILL. Is the foreign workman more or less efficient on the machinery or on the individual power than the American workman? Mr. JENKINS. There is hardly a comparison. They work in a dif- ferent way here. There is a different way they have of working, and when they first come to this country a number of them work the same way as they did in Europe, but it has been gradually discontinued. That is what is known as '''seamless bottles." Mr. SHACKLEFORD. Then the disparity in wages is not compensated for, but the foreigner himself working here, you say, is more efficient than ho is on the other side, to some extent? Mr. JEXKIXS. lie makes hotter wages by reason of the fact that the list is higher on this side. Mr. SHACKLEFORD. That is not the question. You misunderstand my question. I do not care for theories. I want to know the facts. Mr. JEXKIXS. J am giving you the facts. Mr. SHACKLEFORD. It is piecework, is it? Mr. JEXKIXS. Yes, sir. Mr. SIIACKI.EFORD. Is it piecework on the other side? SCHEDULE B. 705 PARAGRAPHS 97-98 GLASS AND GLASSWARE. Mr. JENKINS. I believe so. Mr. SHACKLEFORD. Then the difference in the question of efficiency does not come in at all, does it ? Mr. JENKINS. Yes, sir. Mr. SHACKLEFORD. How does it come in, if it is piecework ? Mr. JENKINS. If he is not a competent workman he does not make a good day's wage, or does not malte first-class ware. Mr. SHACKLEFORD. If his piece price over there and piece price here were maintained just the same, regardless of how much he does, it would not make any difference? Mr. JENKINS. Perhaps so. Mr. SHACKLEFORD. Consequently it is not a question of efficiency that counts. That does not count at all. Mr. JENKINS. No, sir; I did not say that, but the efficiency I told you that he worked the same way hi this country after he landed here until he became acquainted with the American way of working, that he worked the other way. Mr. SHACKLEFORD. The point I w^ant to get at is the cost of the article, whether it is lowered by reason of superior efficiency. Where does that question exist, if it is a question of piecework? If it was by day's labor and a man could do twice as much, the American manufacturer could afford to pay twice as much, but if he pays by piecework there can be no question of efficiency in this trade any more than in any other, so far as the unit cost of the article is con- cerned. Mr. JENKINS. Well, the protection according to what we under- stand from our point of view, they do not make much more than two- thirds as much ware on that side of the water as we do. Mr. SHACKLEFORD. And do not get so much product ? Mr. JENKINS. No; not by two and one-half times as much. Mr. SHACKLEFORD. That is what I wanted to find out. In a ques- tion of piecework the question of efficiency does not enter in at all. Do you know what prices are paid for labor in foreign countries ? Mr. JENKINS. No; I do not know much about that. Mr. SHACKLEFORD. Have you any knowledge on the subject as to what the foreign wages are ? Mr. JENKINS. They get about $2 I think, something like that; something like $1.25 to $2.50 a day. Mr. SHACKLEFORD. How do you get your information? Mr. JENKINS. From the workmen themselves that told me about it; that they got so many marks. Mr. RAINEY. You speak for the workmen, do you? Mr. JENKINS. Yes, sir. Mr. RAINEY. Your plant is at Alton, 111. ? Mr. JENKINS. I work there; yes, sir. Mr. RAINEY. You are employed in that plant? Mr. JENKINS. Yes, sir. Mr. RAINEY. They use machinery largely there in making bottles, do they not ? Mr. JENKINS. Yes, sir. Mr. RAINEY. How many blowers were employed there before they introduced machinery ? 7S'tol) VOL 1 13 i5 706 TARIFF HEAEINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. Mr. JENKINS. About 520; perhaps 530. Mr. RAINEY. And when did they introduce machinery to make bottles? Mr. JENKINS. How did they come to introduce it ? Mr. RAINEY. When; about how many years ago? Mr. JENKINS. I think it has been about two years ago, perhaps, or three. Mr. RAINEY. They are now installing a couple or more large machines, are they not ? Mr. JENKINS. No; I think they are done. Mr. RAINEY. They have just finished installing two new ones ? Mr. JENKINS. Perhaps; but I do not know. Mr. RAINEY. How many machines have they in there with which to blow bottles ? Mr. JENKINS. Eighteen. Mr. RAINEY. How many blowers are employed there now? Mr. JENKINS. About 315. Mr. RAINEY. About half as many as you had before the machines were put in ? Mr. JENKINS. A little more than half. Mr. RAINEY. Do they get as much wages now as they did before the machines were put in ? Mr. JENKINS. No; they do not. Mr. RAINEY. Then the competition of the machines brought down wages ? Mr. JENKINS. Yes, sir. Mr. RAINEY. Do they employ children there? Mr. JENKINS. No; sir. Mr. RAINEY. Has there not been a scandal there two or three times recently, and investigations by the State. Mr. JENKINS. What would you call recent? Mr. RAINEY. Within the last two or three years. Have not chil- dren been smuggled around the place ? Mr. JENKINS. I do not know about that. Mr. RAINEY. Did they not have a system of picketing around the front of the factory there by which warnings were sent inside, and when the State officials approached the children were all hidden in the warehouse? Mr. JENKINS. You are asking me something I do not know any- thing about. I have never heard that story before. It may possi- bly be true. That would devolve on the company itself. Mr. RAINEY. I know it does not devolve on you; but I am discussing it in connection with this matter. Mr. JENKINS. I do not know anything about that; but I do know that they have had young and middle aged men, and perhaps old men, employed there perhaps 8 or 10 years doing what was formerly done by boys before the passage of the child-labor law. Mr. RAINEY. I mean in the basket shops, where they do this wicker- work. Is that not done by children ? Mr. JENKINS. I believe it is done by girls. Mr. RAINEY. Little girls, too? SCHEDULE B. 707 PARAGRAPHS 9T-9& GLASS AND GLASSWARE. Mr. JENKINS. That I could not say. I do not see that work once in a year or perhaps two years. I am only in the blowing department, where they blow the bottles. Mr. RAINEY. That is the largest bottle factory in the country ? Mr. JENKINS. I believe so; yes, sir. BRIEF SUBMITTED BY COMMITTEE REPRESENTING NATIONAL VIAL & BOTTLE MANUFACTURERS' ASSOCIATION. Mr. Chairman and members of the Committee on Ways and Means: We, a committee from the National Vial & Bottle Association, an organization whose purpose is the pro- tection of its members from improper railroad rates and classification rulings; the inves- tigation of all legislation which affects the bottle industry; the investigation of all tariff measures; the making of a uniform wage scale once each year with the Glass Bottle Blowers' Association; also the recognized organization with authority to treat with the union of glass bottle blowers and make working rules, etc., which govern the entire trade in union plants, do respectfully protest against any reduction in the present tariff on glass bottles, Schedule B, paragraphs No. 97 and No. 98, for the following reasons: Under the present tariff the price of bottles to the consumer is the lowest in the history of the industry. Almost without exception, every line of ware made in bottle plants has been reduced in price until now the prices to the con- sumer are the lowest ever known. This is due to the sharp competition among bottle manufacturers, to the improved and modern methods introduced into the factories during the last few years, and to the increase of machine-made bottles. Again, the present profits to the manufacturer in the bottle business are the smallest by comparison over a long period, the competition being particularly keen between the hand-blown factories. Again, the matter of costs in the bottle business has been brought to the lowest point heretofore known. Manufacturers have spent largely of time and money to reduce costs, and in consequence reduced the price of the finished product. If a tariff reduction was made to a point that will admit foreign made bottles, the manufac- turing costs being to the lowest point they can be brought, it would mean inevitably and absolutely a reduction in our labor costs, because this is the only feature of our manufacturing costs which can be reduced. It must be borne in mind that the mate- rial costs in this industry are comparatively small, and that labor is the principal and important item in the cost of production. The figures for the following comparison are taken from the Government Consular Reports, from the reports of labor organizations, and from the reports of the Depart- ment of Commerce and Labor. In England the bottle blower earns from $1.50 to $2.50 per day. An average for a large number of blowers, covering several different periods, was $1.61 per day. In Germany the average is almost identical. In the United States the bottle blower receives from $3.50 to $10 per day, the average for several large and representative plants being over $6 per day. In fact, the average over the whole United States, covering all blowers, is given by the officials of the union as $4.60 per day for the entire fiscal year, June 30, 1911, to June 30, 1912. If you will look at the figures, you will see quite a large importation of empty and filled bottles; and would also call attention to the larger number of filled bottles which come in duty free because the contents are taxed. These bottles become, soon as they are empty, a menace to the manufacturer and workman alike, as they are sold at ridiculously low prices as second-hand bottles. The Government looses a consid- erable sum in reA-emie. and the American manufacturer and workman loses the opportunity to make many of these bottles. It is highly possible that if thorough and reliable information could be obtained as to foreign labor costs, that a slight reduction could be made in Schedule B as applied to bottles, but we most respectfully ask that you do not change the tariff rates on bottles in any manner, that will not give ample protection to our manufacturers, and to our workmen, against the cheap labor in European markets, bearing in mind at all times that we pay"both to skilled and unskilled labor in the bottle industry in the United States, approximately two and one-half times the rate of wages paid to the same class if laborers in foreign markets. Our committee "represents directly 38 of the largest bottle factories u the United States, and indirectly 75 additional factories all over the glass-producing States, em- ploying over 35.000 workmen, of which number about 11,000 are skilled men, and the output in the last year had a value of approximately $48.000.000. You will see that we represent one of the important American industries and it is our earnest request that 708 TARIFF HEARINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. in forming this new tariff measure that you will make Schedule B as applied to glass bottles so that it will afford us ample protection against all foreign competition, and afford our workmen an opportunity to earn decent wages. Respectfully submitted. GEORGE W. YOST, Bellaire Bottle Co., Bellaire, Ohio; JOHN F. PERRY, Cumberland Glass Mfg. Co., Bridgeton, N. J.; J. L. CLYDE, The Olean Glass Co., Olean, N. Y.; Committee. Companies represented: Illinois Glass Co., Alton, 111.; Whitall-Tatum Co., Mill- ville, N. J.; Poughkeepsie Glass Co., Poughkeepsie, N. Y.; Fidelity Glass Co., Taren- tum, Pa.; Burney-Bond Bottle Co., Bradford. Pa.; J. F. & A. Hamilton, Pittsburgh, Pa.; Kerns-Gorsuch Bottle Co., Zanesville, Ohio.; American Bottle Co., Streator, 111.; Swindell Bros, and Carr-Lowry Glass Co., Baltimore, Md.; Old Dominion Glass Co., Alexandria, Va.; Turner Bros. Co. and Root Glass Co., Terre Haute, Ind.; Marion Flint Glass Co., Marion, Ind.; The Williamstown Glass Co., Williamstown, N. J.; Gaynor Glass Works, Salem, N. J.; A. Busch Glass Mfg. Co., St. Louis, Mo.; The North Wheeling Glass Co., Wheeling, W. Va.; N. Baltimore Bottle Glass Co., Terre Haute, Ind.; The Diamond Glass Co., Royersford, Pa.; The Franzen Glass Co., Mil- waukee, Wis.; The Illinois Pacific Glass Co., San Francisco, Cal.; Coshocton Glass Co., Coshocton, Ohio.; The Rhodes Glass & Bottle Co., Massilon, Ohio.; The Star Glass Co., Philadelphia, Pa.; The Morris Glass Co., Point Marion, Pa.; F. E. Reed Glass Co., Rochester, N. Y.; Chattanooga Glass & Bottle Co., Chattanooga, Tenn.; H. C. Fox & Sons, Philadelphia, Pa.; Binghamton Glass Co., Binghamton, N. Y.; O'Bear-Nester Glass Co., St. Louis, Mo.; Sheldon-Foster Glass Co., Chicago Heights, 111.; Maryland Glass Corporation, Baltimore, Md. BRIEF OF THE CONSOLIDATED LATJSITZ GLASSWORKS CORPO- RATION, NEW YORK, N. Y VEREINIGTE LAUSITZER GLASWERKE A.-G., (CONSOLIDATED LAUSITZ GLASSWORKS CORPORATION, New York, February 3, 1913. Hon. O. UNDERWOOD. Chairman Ways and Means Committee, Washington, D. C. SIR: As manufacturers and importers of German glassware, we desire to refer to the existing duty on glass bottles of all kinds, being used as containers on which under the present tariff, according to paragraph 97, a duty of not less than 40 per cent ad valorem is assessed . We believe that this rate of duty is not only high but also unjust, inasmuch as on one hand it prohibits the importation of bottles from Germany to compete with the American-made bottle, thereby eliminating the possibility of obtaining revenues; on the other hand this high rate of duty does not protect the skilled glass blower, as in this country the majority of bottles are being made by automatic machines, the appli- ance of which has thrown out a large number of skilled glass blowers. These machines are run and operated by two or three boys or helpers. The assessed duty, therefore, does not offer any protection or advantage to the skilled glass blower, as is claimed, but simply helps the manufacturers to keep out all foreign competition, and in spite of the low producing cost of the machine-made bottles over the European lung-blown bottles, he obtains an opportunity to control prices at will. I'p to about a year ago. only the larger sixes of bottles were made on the so-called ''Owens bottle machine;" however, this machine has been considerably improved recently and bottles of as small a size as 1 ounce can now be made on this machine. The capacity of this machine is figured from 40 to 00 bottles per minute, according to size of bottle. The patentee has formed a company not only to place such machines in glass facto- ries, but they have built a glass factory and will manufacture glass bottles themselves. They intend to control prices on the manufactured article by selling the machine to outside factories not outright, but Dimply by leasing same. Furthermore, to coin ml the situation even closer, the outside manufacturers will be allmved to u-e the leased machine only for certain individual type bottles, whereas other outside factorie> a train will lie allowed to work a few other special shape of bottles. SCHEDULE B. 709 PARAGRAPHS 97-98 GLASS AND GLASSWARE. Besides this limitation as to the variety of patterns, each factory is held down to manufacture only up to a certain amount, to limit production. You will therefore readily see that such conditions tend in a very high degree to monopolize the market on a product of necessity in numerous trades. The present rate of duty, in view of the machine production being detrimental to the skilled glass blowers and not offering any revenue is entirely inconsistent, and we would therefore respectfully suggest that the rate on bottles for use as containers ehou K I be considerably reduced to enable the foreign product to get into this market and com- pete with the American product, which shows a monopolizing tendency. The producing cost of machine-made bottles compared even with the lowest wages paid in Germany is still from 20 per cent to 40 per cent lower, and if such bottles can not be put on the free list, the rate of duty, in our opinion, should be lowered to 10 per cent. At this rate, there is a possibility to place the imported article in this market and offer the consumer a product at competitive prices. The cut in duty wfll not be detrimental to the wage-earners but simply serve to cut down the large profits of the American manufacturers, who, under the present tariff, have held great advantages. We respectfully offer the foregoing for your earnest consideration and action. Very truly, yours, VEREINIGTE LAUSITZER GLASWERKE, A. G. (CONSOLIDATED LAUSITZ GLASSWORKS, CORP'N), J. E. BIEBER, Manager, New York Branch. PROTEST AGAINST REDUCTION OF DUTY ON GLASSWARE. GLASS BOTTLE BLOWERS' ASSOCIATION OF THE UNITED STATES AND CANADA. PHILADELPHIA, PA., Jan. 9, 1913. The SECRETARY OF THE WAYS AND MEANS COMMITTEE, House Office Building, Washington, D. C.: Under the present tariff law the glass-bottle blowers of this country are protected against the products of the lower-paid workmen of Europe, and which is necessary in order to create the opportunity or basis upon which we have been enabled to maintian a living wage. There are in this country about 11,000 skilled glass-bottle blowers, whose average wage per day is not in excess of $4.60 as against the lower wage of the foreign blower. The entire membership of our association favors a continuation of the present tariff, and instructed us to make this known to you. Dependent upon the glass-bottle industry are about 35,000 unskilled workmen and their families, who would be affected by the importation of bottles into this country in competition with the American bottle blower. The necessity for maintaining the present tariff is as great now as at any former time, for work is not as plentiful as it once was, and the effort to maintain wages is harder now than heretofore, especially in view of the fact that improved machinery has come into our trade. This in connection with a lower tariff rate would force the bottle blowers' wages down to such a low rate that they would hardly make a living wage. A reduction in the tariff on glass bottles is always followed by a strong demand from the manufacturers for a reduction of wages of the workmen, basing their demand on the importation of bottles from foreign countries filled and unfilled. We would urge that where bottles are sent in filled and no duty is imposed, except on the contents therein, that the same rate of duty be imposed as though they were empty or separate. Much of the ware imported under this guise is again used in other channels. For instance, claret wines imported into San Francisco filled with Apollinaris water are afterwards used for claret wine. If these bottles were made in this country and not imported it would furnish employ- ment for several thousand more skilled workmen and a proportionately large number of unskilled workmen. Therefore, in view of the facts as above stated, we would urgently request that there be no reduction from the present rate of tariff on foreign-made glass bottles. Respectfully submitted. D. A. HAYES, President Glass Bottle Blowers' Association. Attest: [SEAL.] WILLIAM LAUNER, Secretary. Executive board: John A. Voll (vice president), J. E. Daily, James Maloney, E. E. Tharp, J. L. Lanoux, F. M. Edwards, Arthur Muhleman, E. E. Evans, Harry Jenkina (secretary), executive board. 710 TARIFF HEARINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. Hon. OSCAR W. UNDERWOOD, M. C., House of Representatives, Washington, D. C. HONORABLE SIR: Our attention has been called to the fact that the Ways and Means Committee is now considering a revision of the tariff laws on imported glass wares, and has the subject under consideration known as paragraph 98, Schedule B. We most respectfully call your attention to the fact that a reduced tariff means reduced wages to our members and other sacrifices, such as were experienced under the Wilson tariff law. We therefore beseech you and your committee to not make any reduc- tion on the present tariff rates on imported glass wares, as the present tariff rates do not afford sufficient protection to the American workman, as considerable glassware is now being imported, notwithstanding the extraordinary keen competition pre- vailing in the glass markets of our country. There is no monopoly on glass wares in the American trade, and no organization among the flint-glass manufacturers. All are free to sell as they please, and prices are very low. There will be no relief afforded to the citizens of our country if the tariff rates are reduced, as it will only intensify the present deplorable state or affairs. Therefore we most respectfully protest against any reduction in the tariff rates, and we trust you will act favorably on our appeal. Sincerely, yours, [SEAL.] JOHN A. ROSENBERGER, Secretary L. U. No. S. ALEXANDRIA, IND. (A communication identical with the above and signed by the officers and 61 members of Local No. 127 of the American Flint Glass Workers, Lancaster, Ohio, was also filed.) STATEMENT OF T. W. HOWE, IN BEHALF OF THE AMERICAN FLINT GLASS WORKERS' UNION. Mr. HOWE. Mr. Chairman and gentlemen, I represent the American Flint Glass Workers' Union of North America. I am here represent- ing the workers. I never had the pleasure of meeting Mr. Carey, and I never met Mr. Dorflinger until yesterday. I am here representing the workers in this industry. Mr. HARRISON. What paragraph do you refer to ? Mr. HOWE. Paragraph 98. I am here to protest against any reduction in the present tariff rates on all plain glasswares. I represent the men that make the blanks, the men that do the cutting, and the men that do the engrav- ing; I represent the workmen that make everything in the illuminat- ing line, from the incandescent electric bulb up to all the shades and globes; I represent the men who make everything in the pressed line, common ordinary tableware; in fact, everything that is made in the general glass trade in the United States, except window glass. We are opposed to any reduction in the present tariff rates, because we have boon obliged to make many, many sacrifices to meet the evil of foreign competition. Our organization has spent an enormous amount of money to investigate this situation. Ten years ago, in the interest of our organization, I toured France, Belgium, Germany, Austria, Bohemia, Italy, Scotland, and Ireland. Last year I attended the International Congress of Glassmen in Berlin, and again toured all the continental European countries and the British Isles. The con- ditions under which the people are employed around the glass works in continental Europe are so horrible that they defy exaggeration. Wages of continental European glassworkers are about one-fourth SCHEDULE B. 711 PARAGRAPHS 97-98 GLASS AND GLASSWARE. that paid to American glassworkers, and in addition to that there is female labor and child labor. I saw married women carrying their babies to the factories the manufacturer having provided a nursery, so that when the baby became hungry, the motner could leave her work and go nurse the baby. I visited the large factory at Val St. Lambert, referred to by one of the previous speakers, and I saw young girls wheeling cinders and coal, and carrying boxes that I am sure would tax the strength of an ordinary man. Ten minutes is almost too brief a time to cover this matter, in the way I would like to do it, and I believe I had better confine myself to what we have done in the United States as workmen, trying to meet this evil of foreign competition. When the tariff was reduced in 1893 or 1894, goods were shipped into this country by the boatload, loaded in cars and laid down in the factory yards in competition with the products of the American workmen, cheaper than the labor cost. A large number of our plants were thrown into idleness. We accepted a 20 per cent reduction in wages. We doubled our production of goods in a large number of lines, particularly the blown stem ware, such as plain tumblers, glasses for wines, cordials, cocktails, and that class or goods. When the tariff was changed the American manufacturer restored that 20 per cent reduction in wages, but we have never changed back to our old system of production. That increased production that was granted at tHat time still remains in force. Two years ago on chemical lines, or wares used in laboratories and hospitals, which I understand comes in free of duty and on which class of goods I understand there is considerable deception not smuggling, but deception practiced by the importers of this country, we in- creased our production 90 per cent. We removed the limit of pro- duction and reduced the wages on certain lines with a view of enabling the American manufacturer to meet the foreign competitor and at the same time protect the American workman, so as to assure him a little more steady work than he had enjoyed. I am glad to say it has done some good, but that it has not entirely remedied this evil. I want to say that every time the tariff has been touched and there has been a reduction in glassware, it has meant a reduction in wages and in- creased production. It has meant a change hi system and it has a general disturbing effect upon the American glass industry". I do not want you gentlemen to think that the American glass- worker receives a very high rate of wage. I am familiar with the general cut-glass industry. I am familiar with the man who makes the blanks and am thoroughly familiar with the general cut-glass industry of this country. The men who cut the glass are the lowest- paid skilled mechanics in the United States of America. The men are obliged to serve five years' apprenticeship in that department of the trade. There are men working in that industry for $9 a week, and they are not the youngest men. The minimum rate for the union glass cutter is $15 a week for 55 hours' work. I do not think anybody will say that is an exorbitant wage. The average wage is just about as Mr. Carey states, at union shops, sixteen to seventeen dollars a week. There are nonunion shops in the State of Pennsyl- vania and in south Jersey that employ boys and girls. The average wage is about $7 a week. 712 TARIFF HEARINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. Mr. PALMER. How much do the blowers get ? Mr. HOWE. Gentlemen, I do not want you to be timid about asking me questions. I am familiar with the wage paid in every line, from the small incandescent electric bulb on up. A man starts in at $2.80 a day. The blower gets $4.50. The man that blows that little glass globe that covers that electric bulb, when it is done on the American system, gets $4.50 a day, but when it is blown by the German method we have instituted the German method with a view of trying to meet the competition of Austria, Bohemia, and other southern continental European countries the blower of that class of goods receives $6 a day. One of his helpers receives $4 a day ; the next helper receives $3 a day. They are in a graduating period. The youngest man in the shop receives $3; the next man in the graduating period receives $4; and the next man $6 a day. Mr. PALMER. They are a very highly paid class of skilled labor? Mr. KOWE. That depends upon how you place them. There are about 30,000 skilled glassworkers in the United States. We have approximately 9,000 members in our organization. The average wage of our members for the year is $14 a week. Mr. PALMER. For blowers ? Mr. ROWE. Yes, sir. Mr. PALMER. The average wage of the blower is $14 a week? Mr. ROWE. Yes, sir. Mr. PALMER. Does that include helpers and apprentices ? Mr. ROWE. No, sir. That includes only the glassworker. The average wage paid members of our organization for the year is $14 a week. The CHAIRMAN. Mr. Palmer asked you to confine your statements to the blowers. Mr. PALMER. You just told me that the wages of the blowers ran from S3 to $4.50 a day. Mr. ROWE. From S3 to S6 a day. Mr. PALMER. Now you say that the average of the blowers in your organization is SI 4 a week. Mr. ROWE. That is for the year; the average for the year. You will understand in the glass trade there is such a thing as the ingredi- ents not running properly. The sand may not be in proper shape; the soda may not be in proper shape; the lead may be bad. A man reports to work on Monday morning, and it is found that the glass is bad and he is knocked out of that day's work. That glass is ladled out and remelted. Mr. RAIXEY. It is piecework, is it? Mr. ROWE. About 85 per cent of the ware produced in the United States is on the piecework basis. Mr. DALZELL. There is a certain period of the year when the glass- workers do not work at all, is there not? Mr. ROWE. The only period is two weeks in the summer. The only stop is the first two weeks in July. That is the only compulsory stop, and it is the vacation period agreed on between the manufac- turers and the workers. Mr. LOXGWORTH. Do you represent the same organization that is represented by Mr. Kalkner ( SCHEDULE fe. 713 PARAGRAPHS 97-98 GLASS AND GLASSWARE. Mr. HOWE. No, sir; he represented the National Window Glass- workers and I represent everything that is made in glass, etc., except window glass. Here is a little pamphlet that I wrote, reporting to our convention held at Montreal, Quebec, in July, 1912, giving the conditions pre- vailing in the British Isles, England and Scotland, and particularly in France and Belgium, Holland, Germany, Austria, and Bohemia. I would like to leave a copy of this with the committee, and I would like to mail a copy of this to each member of the committee, if they have time to look it over. The CHAIRMAN. If you will hand that to the stenographer it will be printed in the record, where everybody will see it. Mr. ROWE. I would be glad to leave a copy of our quarterly report, showing that from June 1, 1911, to June 1, 1912, our average unem- ployed membership was 14 per cent. I would also like to leave a copy of the quarterly statement of the Glass Bottle Blowers' Associa- tion, which shows their average number of unemployed men in the past year was 25 per cent. We have a large number of idle men in the American glass industries. We have no stone wall around the industry; we teach the American apprentice, and admit him to our organization without any high initiation fee; and we do everything we possibly can. At the same time we try to work in harmony with trie manufacturers, in order to have all glassware used in the United States made by American workmen. You can go into any 5 and 10 cent store in this country and you will see there the stem ware from Belgium and Germany. I visited the McAlpine Hotel on Monday and one contract for stem ware alone bar goods such as cordial glasses, wineglasses, goblets, and high-ball glasses, etc., amounted to $30,000 in one order, to be sup- plied through Wanamaker, importers for Val St. Lambert Glass Co., of Brussels, Belgium. The chandeliers in this room are not made in this country. Mr. RAINEY. You say the chandeliers in this room are imported ? Mr. ROWE. Yes, sir; they are not made in the United States. They can not compete with the imported article. Mr. RAINEY. You must remember that they were all put in before the Democrats got control. The CHAIRMAN. Mr. Rowe, you may file your briefs and they will be printed in the record. BRIEFS SUBMITTED BY MR. T. W. ROWE. WASHINGTON, D. C., January 7, 1913. Hon. O. W. UNDERWOOD, Chairman Ways and Means Committee, Washington, D. C. HONORABLE SIR: In view of the following facts I hereby protest in behalf of the American Flint Glass Workers' Union against any reduction of the present tariff rates placed on imported glasswares. First. Approximately there are 125,000 people employed in the American glass industry. Of this number there are, at least. 30,000 skilled mechanics. Second. The wages paid the skilled glassworkers in continental Europe are about one-fourth and the unskilled labor about one-third the rate paid in the United States, while the cost of materials essential to glassware production is equal, and the advan- 714 TARIFF SEARINGS. PABAGBAPHS 97-98 GLASS AND GLASSWARE. rage, long hours of labc homes and stores, with their independence-destroying systems, all contribute their share toward large importations of glasswares and their accompanying injurious effect to the American workmen. Fourth. Due to the aforestated truths, the members of the American Flint Glass Workers' Union reduced wages on certain lines, doubled their day's work with no material increase in wages on other lines, increased production on other lines, and suffered many other sacrifices for the purpose of having glasswares used in the United States, made by American workmen, and steady work, with its attending blessings enjoyed by them and their families. Fifth. Notwithstanding the facts cited, 25 per cent of the members of the Glass Bottle Blowers' Association, and 14 per cent of the members of the American Flint Glass Workers' Union were in total idleness during the fiscal year, June, 1911, to May 31, 1912, while the continental European glass workers were steadily employed and their product landed on our shores and distributed among our people. Evil competition in the American glass industry, due to the disturbing effect of foreign importations and domestic rivalry, causes blown glasswares to be sold at amaz- ingly low prices, and that fearful fact renders the present American wage and condi- tion insecurable, and aggravates an intensified nonprofitable relation between the employer and employee, which may lead to a terrible conflict if present tariff rates on glasswares are reduced. In substantiation of the facts stated, I submit herewith a copy of the report ot the American Flint Glass Workers' Union, delegate to the International Congress of Glass Workers, held in Berlin, September, 1911, and respectfully call your attention to the facts submitted and comparisons in wages, labor cost, cost of living, etc., as printed on pages 4, 5, 10, 11, 13, 24, 26, 28, 29, 30, 36, 44, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 62, 63. Please observe that this report was written in June, 1912, and intended only for the enlightenment of the members of the American Flint Glass Workers' Union. Therefore, we beseech you not to reduce the present tariff rates on glassware. Respectfully, T. W. ROWE, President American Flint Glass Workers' Union, Toledo, Ohio, In behalf of said Union. EXTRACTS FROM REPORT OF T. W. ROWE, DELEGATE TO THE INTERNATIONAL CON- GRESS OF GLASSWORKERS. BERLIN, GERMANY, SEPTEMBER, 1911. WORKING HOURS. The British flint glass worker toils six turns of eight hours each, or 48 hours a week. The turn generally commences on Tuesday morning and they complete their week's work early Saturday morning. But in some cases they commence at 7 o'clock Mon- day morning and finish their week on Friday night. Another surprising feature connected with the British glass working conditions is their lack of uniformity in production. Each department establishes that which they term a move. In some districts they are permitted to make two moves in one turn, in others two and one-quarter, in others two and one-half and in some places, they make three moves in a turn. This, of course, makes their weekly rate of wage different, and it may be pertinent to state all work on a piecework basis. The wages of the very best caster place workmen in the British Isles would run from $13 to $18 a week, and in only a few cases do they exceed $15 a week. The servitor's wages would run from *10 to $12 a week, and the foot maker from $7 to $9 a week. The second-class caster place gaffer would average $11 to $12 a week, the servitor would average $8 to $9 a week, and the foot maker $6 to $7 a week. The highest paid wine workmen would run from $12 to 14 a week, the servitor $8 to $10 a week, and the gatherer from SG to 7 a week. A second-class wine shop would average from $10 to $12 a week, oervitor 7.50 to $8.50 a week, foot makers from $5.75 to $6.50 a week. SCHEDULE B. 715 PARAGRAPHS 97-98 GLASS AND GLASSWARE. The best pressers in England earn $9 and $10 a week; finishers earn the same amount, and the gatherers earn $6 and $7, and in some cases as low as $5 a week. The aforegoing wages are the very best that are paid. APPRENTICE SYSTEM. A very peculiar feature connected with the British glass industry is their appren- tice system. When a boy is put on as an apprentice he must work at whatever wages the employer deems it wise to pay until he reaches the age of 21 years in England, in Scotland 23 years, and it is a well-known fact that there are young men serving their apprenticeship blowing paste and iron mold wares at 2 shillings a turn, or about 48 cents; and there are apprentices gathering shades and caster place wares for $3.50 a week of 48 hours. An exceptionally favored apprentice doea not exceed $5 a week. Secretary Hussellbee informed me that he served in a wine chair for six years at $4 a week. Secretary Bradford ser\ed six years and 10 months at the same rate, and several years at $2.50 a week. Small boys gathering handles and doing other small boys' work at a factory receive 1 shilling or 24 cents a turn, and this system has pre- vailed since 1848. ELECTRIC-BtJLB CONDITIONS. There are two factories located on the Tyne making electric bulbs one at Lem- mington and the other at New Castle. The blower gathers and blows his bulb. On bulbs 2$ inches and smaller they receive Is., or 24 cents, a hundred; from 2f to 3 inches in diameter, they pay Is. 2d., or 28 cents, a hundred; on 3 to 3 inches, they receive 32 cents a hundred. On large tungsten bulbs they receive 24 to 34 cents a hundred, and the blower is assisted by one boy, who receives 48 cents a day of 11 hours. At Ponders End, 12 miles from London, where the Edison & Swan Co. employs 38 bulb workers and 8 men on tube shops, the bulb blower gathers and blows his own bulb. On the email sizes they receive 36 cents a hundred and on the larger sizes they receive 40 cents a hundred. They work on a strictly piecework basis. They explain the reason they receive a higher rate of wages per hundred for blowing bulbs than that paid in New Castle is due to the fact that at Ponders End they use a carbon mold that requires no paste or any wetting. They refer to it as being made of plum- bago or black lead and assert that it is a slower method of blowing bulbs. Conse- quently they secure a higher rate of wages. TUBE SHOPS. The tube shops at this factory work 10J hours a day, and they work with two men on the shop. The gaffer receives $3 a day and the servitor $2 a day. This company operates with two furnaces, an eight pot and a six pot, and has quite a large plant fitting out electric bulbs. SUMMER STOP. The British glassmakers have no summer stop. WAGES IN OTHER TRADES. In addition to the wages paid to the glassworkers in England, I inquired about men employed at other trades and I found that the wages of other mechanics are as follows: Blacksmiths, 53 hours a week $9. 00-$9. 50 Carpenters, 49 hours a week 9. 00 Stonemasons and bricklayers, 49 hours a week 9. 50 Motormen, 52 hours a week Conductors Teamsters, 60 hours Railway engineers, per day Firemen, per day Gatemen and guards, a week Car cleaners and examiners, a week 1- 85- 4. 50 Coal miners, 8 hours a day, a week 716 TARIFF HEARINGS'. PABAGBAPHS 97-9S GLASS AND GLASSWABE. Longshoremen, 12 to 16 cents an hour, paid only for time worked. Female clerks in department stores, $1 to $1.50 a week, they work from 8 a. m. lo 8 p. m. daily, except Saturday, and on Saturday they work from 8 a. m. to 10 and 11 p. m. COST OP LIVING SEPTEMBER, 1911. In discussing the extremely low rate of wages in the British Isles, and expressing surprise as to how the people could exist, they generally try to excuse their position by the difference in the cost of living between their cost and the cost in the United States, but I found very little difference in that respect. At Barnsley Mrs. J. J. Rudge informed me that roast meats were selling at the following prices: Cents. Roast beef, veal, mutton pound . . 2O-25 Mutton chops do 25 Round steak do 25 Flour do Potatoes bushel . . 60 Cabbage head. . 4 Kidney beans pound . . Tomatoes do 20 Coffee do. ... 43 Tea do 45-50 Bacon do 25 Eggs dozen . . 37 Bread 4 pounds. . . 13 Granulated sugar pound . . 5 Soft coal in Manchester $5 a ton, and in Barnsley, in the heart of the coal district, $3 a ton. 1 have the prices of food furnished by Brother Challingsworth. at Birmingham, and by another brother at Ponders End. and they all compare favorably with the prices I quoted above. In the consideration of these prices, you must bear in mind that they prevailed during the latter part of August and the first of September, 1911, while I was in their midst. I found as a rule the glassworkers in England paid less rent than the American glass worker, but they live in a smaller and a different kind of a dwelling. Their rents generally run from $6 to $8 per month. As a rule, they pay from $1.50 to $2 for their shoes, from $1.50 to $2 for their hats, from $5 to $8 for their suits or an overcoat. In that respect they live a little more economically than the American glassworker. But in the consideration of these points you must bear in mind t 2. Work can only be accepted with the consent of the respective national union to which the member seeking work has bejpnged up to that time. In case of emigra- tion the union of that country must apply to the country to which that member intends to move, making inquiries whether there are any objections to his seeking work. Regarding facilities respecting emigration and immigration, the various national unions must mutually agree. 3. We most emphatically condemn the practice of glassworkers emigrating and accepting work at the glass trade in a foreign country contrary to the principles of this declaration and resolution, and we denounce those who emigrate to accept the places of striking glassworkers as traitors to the working class and humanity's interest, and we hereby pledge our honor to exercise our best efforts to end such injurious habits. EMIGRATION QUESTION. When this resolution was brought to the attention of the congress in the form of a resolution your -delegate and the Italian representative had the resolution amended to a much stronger degree. We severely criticized glassworkers migrating from one country to another and accepting work regardless of union or nonunion conditions. We cited a number of instances in this country where we were and are now gravely injured and our department affairs seriously jeopardized by injudicious action of this kind. The Italian delegate stated a number of instances where they had been injured by men migrating from various countries to their country during times of strikes and helping the employers to defeat them. The impression seemed to prevail among the delegates that we charged a high initiation fee to foreigners. They had our association confused with the $500 foreign initiation fee prescribed by the laws of the Glass Bottle Blowers' Association. I explained our law and the change of our position in this particular respect the past few years, which seemed to satisfy the delegates, except that they were almost unani- mous in their opinion that if glassworkers, members of the union, migrated from one country to another in conformity with the spirit of these resolutions, their cards should be recognized and they should be admitted without any initiation fee. There are some countries that now have what they term a "treaty," which pro- vides that if glassworkers migrate from one country to another, through official per- mission from the organization of which they are members, their card is recognized and they are admitted without any initiation fee. RESOLUTIONS ADOPTED. WORKING TIME. 1 . Working time in a week shall not exceed 8 hours a day. 2. Night work should be reduced to a minimum, work to stop from 10 o'clock at night until 4 o'clock in the morning, with the exception of such as attend to furnaces and the melting. 3. Sunday work shall be abolished. Firemen and furnace men will attend to furnaces when employed on Sunday, and must, during the week following, have a rest of at least 36 hours. 4. Intermission for meals and rest during working time of 10 hours must be at least 2 hours, and during a working time of 8 hours at least 1 hour. 5. All extra work, besides the usual work, must be omitted during regular working time as well as after it. INTERNATIONAL REPORTS. In order to get reliable information regarding the momentary condition respecting employment in the various professional branches in all countries and concerning want of employment in the various branches, and also concerning the current wage and working questions as well as strikes and lockouts and their causes, the congress thinks it useful that the unions affiliated with the secretariat should send reports to the secretariat at regular intervals. The international secretary shall be obliged to arrange the reports and publish them in the principal languages. You will note that resolution No. 7 will work in harmony to some degree with reso- lution No. G. This resolution was intended to keep the international glassworkers informed concerning trade conditions in the various countries. If we submit our report to the international secretariat, and thereby keep him in touch with trade con- ditions in this country, it will have a tendency to prevent glassworkers immigrating when trade conditions do not warrant their arrival. SCHEDULE B. 723 PARAGRAPHS 97-98 GLASS AND GLASSWARE. FOREIGN COMPETITION AND IMPORTED GLASSWARES. In view of the fact that during the discussion on international affairs at the conven- tion it developed that in several countries, Holland and Austria, for example, glass- workers work 20 per cent less than their regular working rate of wages on wares that are to be exported to the United States, I offered the following resolution, which excited quite a discussion and was finally adopted: IMPORTED WARES RESOLUTION. "The enormous amount of glasswares exported from continental Europe has caused the American glassworkers to suffer many sacrifices and has been responsible for many unjust alterations in our working conditions and has cost the American Flint Glass Workers' Union hundreds of thousands of dollars, and we are obliged to resist the employers' demands for higher production or lower wages each year, their demand being based entirely on 'foreign competition,' and our Government reports show that annually $7,000,000 (28,000,000 marks, 35,000,000 francs, 35,000,000 lires) worth of glassware reaches our shores from continental Europe, principally from Germany, Austria, and Bohemia. "This im potation of glasswares has thrown many of our workmen into idleness, as our official reports will prove, and it renders it difficult for us to maintain our present rate of wages and conditions, and we therefore appeal to the continental European workers to do their very best to increase their wages, shorten their hours of labor, abolish child and home labor, and improve their general conditions, and above all not to make further concessions to enable employers to export glasswares to the United States. "We beg our comrades on the Continent to send us a schedule of the wages paid in all localities for various classes of glasswork, the hours of labor each day and week, in order that we can intelligently debate this important point with American employers." Delegate Sassenbach took the position that there is no trade-union in Germany that ever made a concession to the employers to export their goods cheaper. He said: ''Our unions do their best to improve conditions of life. I give this explanation in the name of the free German trade-unionists." I called their attention to that which I had learned from Delegate Baart, of Holland. One of the Austrian delegates arose on the floor and admitted that which I said was true, and they pledged their honor to exercise their best efforts to equalize the wages at home on all goods made regardless of whether or not it is for export purposes. GERMAN GLASSWORKERS' WAGES. I desire to impress the fact upon the minds of our members that there is no universal rate of wage paid the glassworkers in Germany. I tried to ascertain from Secretary Girbig the prevailing rate of wage, and he said he did not know, as they have no accu- rate way of learning, because their membership does not pay assessments on their earn- ings. They are taxed so much per week per member to defray the expenses of the organization. In some factories the men are paid a different rate of wage on account of some being favorites or better workers. Each individual, especially those who are favored, guards his earnings with the utmost secrecy possible, for fear his interest will be injured by divulging the fact to his fellow worker. On this account he was unable to inform me the rate of wage paid in the various departments, except in a general way. He stated that bottle blowers earn about 5 marks ($1.25) a day on a piecework basis, and that they would average about $25 a month. Mr. Girbig stated he was a paste-mold blower and that he made large paste-mold bowl-shape electric globes piecework, and he averaged about 24 pieces an hour, and received 2 cents each. From this he paid the gatherer and blocker 10 cents each an hour and paid the boy on the shop 5 cents an hour. The shop was composed of blower, blocker, gatherer, and one boy. ENSLAVING SYSTEM. The German manufacturers have in vogue the most exact system I ever witnessed to keep their workmen in subjection. It is so firmly established that it will undoubt- edly require years to abolish it, unless some revolutionary incident occurs. When this system is described, I am sure you can realize the cunningness by which the em- ployer has established complete control over the workingmen, and the difficulty it 724 TARIFF HEARINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. will be for the German glass worker to release himself, unless he is possessed of extraor- dinarily strong qualifications. A company engages a man that we term a "gaffer"; they term him "manager." This "manager" is boss of the shop and does the blowing, or if it is ware made by hand he is the gaffer of the shop, but he is manager of that shop and the company holds him responsible for the work done by each individual on the shop, for their con- duct in the factory, and out of the factory, and their strict obedience to their masters. The company fixes the rate of wage they will pay the "manager," and he arranges with his blocker, servitor, gatherer, and boys the amount that he will pay them. You can understand that under this system it is the company's interest to get a gaffer, or "manager," as cheap as possible, and the gaffer tries to get the shop as cheap as he can and endeavors to get as much work out of them as possible because they are en- gaged on the unlimited piecework basis, and the manager of the shop is held responsi- ble for the success or failure of his shop. In nearly all cases, unless the servitor or gatherer is married, the gaffer agrees to pay them so much an hour while working for him and agrees to board them. Even small boys whose parents reside in the same town are obliged to board with the gaffer. This, you see, gives the gaffer, or the "manager, " as the company terms him, complete control over the shop, and it places him responsible to the company for the quantity and quality of the ware produced, and the general conduct of the men on his shop. Another significant feature connected with this system which holds the German worker in subjection and keeps his condition at its present low standard in the glass trade is that in nearly every city in which there is a large factory the company owns the houses in which the workers live. They build a row of brick housed extending for blocks and expect the workers to reside in them. In fact, it is obligatory to live there in order to hold a position with the company. In some cases the employer will state, "We do not force them to live in the company's houses if they do not wish to do so," but men living in those houses who disobey factory rules or render themselves ob- noxious to the company in any way are dismissed from service and evicted from their homes very promptly. This ha? a terrorizing effect on a great many, notwithstanding the fact that they live in two or three rooms and raise a large family. At Schreiberaii, in Saxony, the committeeman informed me that he and his wife and two children lived in one small room and a kitchen, and paid $2.50 a month rent. At \Yeiswasser the workmen pay $2.50 a month for two rooms and a kitchen, and the company offers to sell these houses to those who desire to buy. At Jena, a? a rule, the workers and their families live in two rooms, sometimes three, and a very few have four rooms. In some towns they have two rooms and a "cabin," as they term it. A cabin is a small room for sleeping purposes, and they pay from $3.50 to $5 a month rent. Under this system it is extraordinarily difficult for the workers to change their pres- ent condition. As a matter of self-protection and self-interest the gaffer holds his shop in subjection. In that manner it is almost impossible for these men to get relief, in view of the fact that there is such an excellent police and state official control. You can see how difficult it is for organized labor to make much progress, as it is so difficult to get matters started without the employer of the shop knowing all that is transpiring. It is on account of that serious state of affairs that the German workers are depending so largely upon political action, and expect to accomplish more through legislation than through the trade-union movement. A VISIT TO WEINBOHLA, GERMANY. Accompanied by Secretary Girbig, Comrade George Horn, and an interpreter, I visited Weinbohla. Here they have two large tableware factories; they also make eomo iron mold goods, have a couple of semiautomatic jar machines, similar to our Teeple-Johnson machine. The quality of the ware produced was far inferior to the pressed wares made in this country, the glass being poor and worked very hard, and the ware poorly polished. The average wage of the presser and gatherer is $8 a week. Very few earn $10. The finisher receives 25 cents a turn more than the presser or gatherer. A mass meeting of glass workers and their families was held in this city, about 800 people attending. The meeting was addressed in German by Brothers Girbig and Horn. In a 40-minute. address I explained our conditions and our interest in theirwelfare and encouraged iln-m to tight for improved conditions. The meeting was a very enthusiastic gathering and keen attention was paid to the interpreter explaining my expressions. This \sa.s a grand meeting. SCHEDULE B. 725 PARAGRAPHS 97-98 GLASS AND GLASSWARE. SCHREIBEKAU, SAXONY FINE WARES MADE AND TERRIBLE CONDITIONS. The glass factory at this city, as well as a hotel and miles of fine land surrounding the factory, is owned by Count Schalfgotsch. It was exceedingly interesting to visit this place and see the fine line of stem wares, vases, and that class of goods made from crystal, ruby, blue, and green colors. In some cases the articles were made by crystal core and the colors covering it, the patterns cut from the colors to the crystal, such as you often see in fancy cut goblets or vases. It was a pleasure to watch them make a fancy goblet in this manner: One man would gather a crystal core, make a crystal ball, let the boy hold the same, then make a ruby core and gather over a core and make a ball, then stick the ruby-covered ball to the flint ball, release it from the pipe, warm it in, shear off the rough edges caused by cracking it off the pipe, then flare the ruby-covered ball back over the crystal ball, block the same, then blow it in a wooden mold. While the gatherer and servitor were doing this work, the gaffer would make a twist leg by hand and block it in a tool, then stick it to the bowl, cast a foot on it, stick it up, warm it in, shear the edge, and finish the article. Their fancy stem ware was made in the same manner, except that the fancy twist leg was made by a tube shop and cut in small pieces, and pieces needed were laid on the breast wall of the furnace, stuck up, warmed in, and drawn out in its proper shape, then stuck to the bowl. A very, very surprising feature connected with the excellent class of goods made by this concern was the awfully low wages of the men. Excellent stem-ware workers and gaffers making fancy vases, jugs, etc., were working 60 hours a week for $7, $8, and $9 a week. The man who did gathering and serving (they only use two men on the shop) did that class of work for wages averaging from $1.75 to $2.50 a week. The small boy on the shop received from $1 to $1.50 a week. All of the wages were paid to the gaffer, or "manager" as he is called, and he pays the rest of the shop according to the best arrangement he can make with them. Here again the gatherer and servitor, and the small boy on the shop, board with the gaffer, and he takes a certain amount from their wages to pay for their board. I urged upon Secretary Girbig, who accompanied me, to explain how the subordi- nate men on the shop had anything left when the gaffer got through' with them, and he only replied that it was a pitkble state of affairs and they were doing their best to overcome the same. Glass cutters employed at this factory on this fine class of work, and I assure you it was extraordinarily nice work, earn from 70 to 95 cents a day. ELEGANT FACTORIES AND AWFUL CONDITIONS IN WEISWASSER. This . city is one of the most, if not the most, important glass centers in Germany, there being 36 furnaces in operation, and three idle. There are 800 union men and 1,000 nonunion men employed. The secretary told me that in the district of Ober- lausits, in which Weiswasser is located, there are about 15,000 people engaged at the glass-working industry. There are about 30,000 skilled glass workers employed in Germany, not including the bottle or window glass workers. Including Austria, Hungary, and Bohemia, there are about 80,000 people engaged in glass making. At this city 12 furnaces for making electric bulbs were erected in the past eight years. At the Neue Oberlausitzer Glashuettenwerke Actiengesellschaft they have eight fur- naces running on electric bulbs. At this factory the men are paid 20 cents per 100 for gathering, blowing, cracking off, and cleaning off their irons. They have excellent facilities for the men at this place. This company has one of the most magnificent glass factories I ever saw. The com- pany is bitterly opposed to organized labor, consequently it is difficult to make much progress toward organizing the men in the factory. The plant is growing at a tremen- dous rate, owing to the great increase in the use of electric bulbs in Germany. SYSTEM OF WORK, WAGES, AND SELLING PRICES. I visited the Joseph Schweig Glass Co., which has 10 furnaces. I saw them making pressed ware, lamp chimneys, paste-mold wares, electric bulbs, globes, and stem ware. At one furnace there wore' 60 bulb blowers gathering and blowing then- own bulbs. On the small size bulb they made from 600 to 800 a day, and on the large size tungsten they made from 560 to 600 a day, and received 25 cents per 100 for gathering, blowmg, cracking off, cleaning off their own pipe. Some of the best workmen would gather over a stem, as they do in bottle houses, making a certain class of bottles; that is, they would leave a small stem on the end of their pipe and would gather several times over that stem and marver and blow a bulb before they would clean off their iron. They made their bulbs in a wooden mold. 726 TAEIFF HEARINGS. PAEAGBAPHS 97-98 GLASS AND GLASSWABE. In conversation with a bulb blower, he stated that the very best they could possibly do, working 60 hours a week, was to earn from $10 to $12. They asserted that when trade is dull, the employer tells them not to work fast and not to produce too great a number. They work slow and make about $1 a day. IMPORT AND SHADE INFORMATION. I watched them make a 10-inch Welsbach shade blown in a wooden mold, one end finished on an iron. Three men and one boy would make 33 dozen in nine hours' time, and the men and company told me that this article sold at wholesale prices 1 mark and 30 pfennig, or 31 cents a dozen. I watched them make a 12-inch dome with a 10-inch fitter, Paris top, six men on a shop making 55 dozen a day. In another shop I saw four men and one boy making 38 dozen a day (28 cm.) or 11 inches wide. These articles were blown in a wooden mold with the top down and the top opened up and finished ; the bottom was cracked off and glazed behind the lehr. These articles sold at wholesale price for 2 marks (48 cents) a dozen. I exerted great care to ascertain absolutely the prices of these shades, as you surely can not forget that we have con- tinually felt that the appraised values of these shades in the New York customhouse were wrong. I found that shades from 10 to 12 inch size sold all the way from 32 to 48 cents a dozen in Germany. Shades made at this factory for export purposes are made 15 per cent less in wages than those for domestic purposes. In conversation with Mr. Schweig^ I learned that they own an extra large pottery works and 25 per cent of its production is exported. When I talked to him of the low selling prices on shades he declared that both the company and workers were dissatisfied with the condition of affairs, but their export trade was essential to keep their factory steadily operating. Mr. Joseph Schweig, who recently toured this country, personally conducted me through the factory. He speaks the English language clearly and acted very urbanely to me. He explained the reason for his courteousness was due to the fact that he was treated very kindly by the Americans during his recent trip to this country. When I asked him about the production of any article or the wages, if he was in doubt, he would call the foreman or a workman from the platform and have him answer any question I asked regarding wages and production. When I asked him about the selling price he took me into the office and he phoned to their selling department in order to get the exact rates. The factories in Weiswasser, Germany, are undoubtedly the most modern glass factories in the world so far as factory construction is concerned. The Government has passed a law requiring the roofs to be a certain height, proper ventilation, etc., and all the factories now being erected are conforming to the law. In the Schweig factory in a number of departments they have revolving electric fans placed above the heads of the workers, fans similar to those used at American cafes. The furnaces were down-draft furnaces and artificial gas made from coal pressed in cakes was used. The buildings were made of pressed yellow brick, with high stacks. The cracking off and glazing machines were of the latest type. The Schweig company employs GOO glass workers and about 1,500 people in all departments. VISIT TO HIRSCH FACTORY. I also visited the Hirsch factory, a concern that operates two furnaces making paste mold chimneys, globes, a few chemical wares, and shades. A shade shop making a 10-inch shade, with an 8-inch fitter, made from 25 to 30 dozen a day. The shop was composed of three men and one boy, and the total shop wages vary from $23 to $25 a week. I watched them make 16-inch shallow opal round and square top shades, and they make 12 do/en a day of nine hours. On this job the shop was paid from i?23 to *27 a week, and the wages per week distributed in the following manner: Gaffer $12. 00 Servitor 6. 00 Gatherer $4. 00-4. 50 Boy 2. 00-3. 00 In a conversation with one of the blowers he said that his wages ran from $7 to $10 a week, and if he could average $7.50 a week the year around he would be happy. He stated that he has six children and last year he made a very poor year. The com- pany would not allow him to work fast because business was dull and he didn't want SCHEDULE B. 727 PARAGRAPHS 97-98 GLASS AND GLASSWARE. to lay off. During the year he made 788 marks, or about $195. To use his- exact language he declared: "We would have starved only for the fact that I got a job selling beer for a brewery, working after I was done each day at the glass factory. I got a commission selling beer at night." This man informed me that he paid 180 marks, $45 a year, or $3.75 a month, rent for two rooms and a cabin. He blows paste mold weiss beers, paste mold chimneys, and that class of goods. He further stated that on Friday, September 22, he made heavy bottom weiss beers and after he paid his shop the amount due them for nine hours' work he had left 1 mark 50 pfennig, or about 37 cents. I asked him the cause, and he said the glass was bad, due to bad color; it had turned green and the workmen are paid only for wares packed and shipped. They are held responsible for every- thing. He said they were perfectly satisfied if their loss did not exceed 20 per cent. Another nice-looking and well-dressed worker to whom I talked, and who accom- panied us to the depot, said he earned from 25 to 30 marks a week of 60 hours, and he would be satisfied if he could earn 28 marks, or $7 a week. Weiswaser Comparison in the cost of production. 16-inch shallow opal shade, one end finished: Their wages per day Gaffer $2. 00 Servitor 1. 00 Gatherer 75 Boy 50 4.25 Our wages per day Gaffer 6. 00 Servitor 4. 50 Gatherer 3. 00 Boys 3. 00 16.50 Their production, 12 dozen Our production per day, pieces, new process 124 Cost per dozen $0. 35 Our cost per dozen 1. 60 10-inch dome shade, one end finished: Their wages $4. 25 Our wages $15. 50 Their production, pieces Our production, pieces Cost per dozen $0. 17 Our cost per dozen $0. 62 10-inch Welsbach, one end finished: Their wages $ 4 - 25 Our wages $15- 50 Their production, 33 dozen Our production, pieces Cost per dozen Cost per dozen $0- 62 Paste-mold cost of production : Blower * 6 - Blocker Gatherer 3.00 Boys 2 - 16.00 Sixteen-inch, move double 88, 166 pieces per day. Cost per dozen, $1.16. Ten-inch, move 125 double, 250 single, 500 pieces per day. Cost per dozen, 38 cents. 728 TARIFF HEARINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. New York importers' quotations per dozen on paste-mold shades. Fenster 1 Sanduskv ?6 26 26 Shirley Bellaire 27 3 13 ? 13 79 58 ?1 Marion 31 1 32 32 Monaca . (i 6 q 47 2 99 io 102 70 3? Cincinnati 3 3? 35 35 Beaver Falls 29 fi q s 3 1 1 57 52 5 Weston... 40 1 S 4 53 47 6 Charleroi Millersburg Vineland 64 64 62 ? Toronto, Ontario. ] 18 ? 3 24 24 Millville 34 41 75 67 8 Point Marion 3 4 7 3 4 Brackenridge 4fi ? 1 49 41 8 Fairmont 9 167 in 7 4 302 276 ?6 El wood 23 1 24 ?4 Kokomo i9 - 3i 61 56 5 Swissyale 16 > 17 99 IS 75 67 8 Wheeling ... 44 44 42 ?, Brilliant ^ 6 s 12 12 Washington 49 16 in 3 1 85 78 7 Brackenridge 15 15 15 Philadelphia 12 12 10 ? Wheeling 25 3 28 23 5 Moundsville J4 q 4 1 38 38 Lancaster 12 4 16 i'S 60 60 35 35 34 1 Toledo . 2J 21 i" 2 Meriden 47 ("i 53 53 Philadelphia -3 23 64 iq 7 47 253 176 77 6 61 60 1 IS 18 17 1 47 47 47 447 1 448 440 8 21 21 W 1 Toronto, Ontario... 4.') i .-, 51 49 2 734 TARIFF HEARINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. Statement showing the number of members of each department in each local union, total membership, number of employed and unemployed, as far as reported Continued. No. local union. Location. "3 t> i* PH Chimney. XJ "3 Punch tumbler and stem ware. Mold making. Paste mold. Iron mold. Machine jar and bottle. 1 M 9 02 Engravers. Insulators. Stopper grinders. Total membership. Total employed. Total unemployed. 71 72 73 74 77 7s 7'J Ml 81 82 83 84 86 87 88 89 90 92 93 94 95 96 97 98 99 li.I 103 L04 L05 106 107 108 109 lUi 11] 112 L13 i!; 116 117 119 12 126 127 13fi 137 4 19 96 8 2 B 41 96 156 150 132 94 26 46 462 20 31 30 252 8 37 91 145 150 131 92 24 46 462 18 28 25 231 4 5 11 .... 2 2 ""2 3 5 21 8 "i 25 3 ""2 "26 '"2 2 "2 "is 12 4 2 1 39 4 North Vernon . 2 113 128 1 25 11 4 22 6 91 6 1?0 8 26 Coraopolis y 2 5 12 i 17 3 Toledo 446 16 4 Toledo 29 f Philadelphia 30 Jeannette 35 162 9 7 >s 4 1? K 3 Tuba 1 61 61 17 44 225 30 110 41 55 21 60 19 6 117 15 35 14 141 48 17 56 104 98 225 18 55 8 36 74 39 53 39 61 17 43 200 27 110 41 53 21 40 19 4 115 15 33 14 123 48 17 56 92 98 225 18 55 8 36 70 37 52 Cambridge . . . 4 11 VI 1 22.5 10 29 4 Honesdale . . Elrnira Heights 30 Corning no Morgantown Steuhenville. .. 5 14 31 23 3 2 9 1 (i T Buckhannon 20 Hawlev 60 Philadelphia.. 19 Tiflin (i Grapevine 20 15 65 11 ?1 Ottawa, Ontario 35 St. Charles . 14 Dunkirk' 126 f) 6 Bridgeport, W. Va. . 48 Minneapolis 17 Cincinnati 56 Jeannette 8 52 12 13 14 Chicago 98 New Bedford 195 77 3 Lansing. 18 New York Citv . Elgin 8"" South Connellsville . Somerville 30 1 6 74 Wel'.sburg fi 24 9 Lancaster 41 2 14 :-i 5 2 Rochester 24 1 Cumberland Total Orand total. .. 2 12 4S 5 G 6. 79 75 637; 356 102 122 644 46 24 74 514 6-5 2 14 28 67 46 3 1,473 1,365 108 2,011 2.045 1 1,053 767 593 476 393 60 136 14 8,819 8.010 809 SCHEDULE B. PARAGRAPHS 97-98 GLASS AND GLASSWARE. 735 SECRETARY'S QUARTERLY STATEMENT FOR THE QUARTER ENDING SEPT. 30, 1912, GLASS BOTTLE BLOWERS' ASSOCIATION OP THE UNITED STATES AND CANADA. Statistical. g |St 1 2 3 5 fi 7 8 9 10 12 14 15 16 17 18 20 21 22 23 24 25 26 27 28 29 31 36 37 38 42 44 45 46 47 48 49 52 54 55 60 61 63 64 66 72 73 75 76 78 83 85 91 92 93 95 101 102 106 109 110 113 115 120 122 123 Location. Number of factories. Operating. o Journey men employed. Apprent Ices employed. Total working force. a B . >*s |2 !- Apprent ices idle. Total mem- bership. Pittsburgh, Pa 3 6 5 1 9 18 11 9 3 1 4 3 2 8 5 2 1 6 3 5 8 2 1 1 2 1 1 1 3 5 5 1 1 1 1 2 4 1 1 2 4" 1 6 8 5 1 2 82 220 2 2 84 220 2 30 225 220 153 118 25 337 59 84 2 68 45 3 138 24 9 5 20 33 100 72 5 2 112 445 *>80 153 210 438 561 309 102 42 68 212 76 138 113 72 58 230 33 122 72 77 82 24 23 47 27 29 137 95 83 27 25 48 50 13 63 48 38 313 182 175 9 99 47 94 24 81 89 89 21 35 61 94 89 120 54 50 61 111 43 22 59 39 94 Alton, 111 114 Streator, 111 St. 1 A) 11 is, Mo 26 32 5 15 1 7 Salem, N. J 3 10 6 8 1 1 02 413 189 240 18 27 R 4" 46 40 6 1 100 458 235 280 24 28 Millville, N. J Bridgeton, N. J Baltimore. Md Royersfora. Pa Muncie, Ind . Woodburv, N. J.. . 4 6 Milwaukee, Wis 3 1 167 66 15 6 182 72 Ravenswood,Long Island, N.Y. Massillon, Ohio 1 8 2 7 3 Montreal, Canada 3 2 1 6 89 52 53 210 9 9 7 8 98 61 60 218 Zanesville, Ohio Richmond, Va San Francisco. Cal 12 Belleville, 111 3 5 8 Newark, Ohio Clayton, N. J 18 Rochester, N.Y 2 1 1 1 1 72 75 24 8 47 27 29 114 14 13 6 2 6 86 88 30 10 53 27 33 121 Reading, Ohio Brockwayville, Pa Hawley. Pa 1 15 1 Spring City, Pa Cofleyville, Kaiis 1 3 Lancaster, NY . 1 2 4 7 Marion, Ind . 1 5 3 75 41 7 1 48 1 13 40 8 15 5 2 Olean, N.Y 2 1 1 42 20 24 8 4 3 50 24 27 Allentown, Pa Parkersburg, W. Va Sheffield Pa 1 7 Wilcox, Pa 1 46 2 48 12 Brooklyn. NY 2 1 1 8 1 5 1 3 1 1 2 8 3 2 1 1 3 2 2 2 2 2 1 2 1 1 1 2 2 2 Medford N J 1 1 4 1 5 40 30 200 66 93 8 6 44 6 17 48 36 244 72 110 McDonald, Pa Terre Haute, Ind 4 113 116 67 9 53 3 2 64 32 5 4 9 1 2 Gas City, Ind 1 2 1 1 1 1 5 1 2 44 44 88 22 73 81 72 2 5 12 6 8 13 3 46 49 100 28 81 94 75 Smethport, Pa 1 3 2 Sharpsburg, Pa 3 7 13 21 3 2 East St Louis 111 Butler Pa 1 4 1 Kane Pa 1 1 3 1 2 2 1 1 1 2 1 1 1 1 2 32 61 77 70 106 42 39 61 92 33 20 47 30 89 1 9 14 9 18 6 12 7 16 14 4 6 6 33 70 91 79 124 48 51 68 108 47 24 54 36 95 Alton Park Tenn 1 17 16 4 12 11 4 1 1 Columbus Ohio 7 Cape May Courthouse. X. J 18 7 2 7 9 5 10 Shingle House, Pa 1 3 Greensburg, Pa Total 203 110 93 4,100 530 4.630 2,544 440 6,937 736 TARIFF HEARINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. ADDITIONAL DATA FURNISHED BY MR. T. W. ROWE, OF THE AMERICAN FLINT GLASS WORKERS' UNION AMERICAN FLINT GLASS WORKERS' UNION, P - Toledo, Ohio, January 11, 1913. Hon. OSCAR UNDERWOOD, M. C., Washington, D. C. HONORABLE SIR: In addition to the statements I made before the Ways and Means Committee and the brief on file at the hearing accorded me Wednesday, January 8, I desire to submit the following, with the hope that it will be made a matter of record, in order that our opposition to any reduction in tariff will be clearly understood. Regarding the "Average wage," I quote herewith an extract from the annual report of our national secretary, Wm. P. Clarke, as found on page 99, and statistics on "Em- ployed and unemployed," as found on page 101 of the proceedings of the Montreal, Quebec, 1912 convention, a copy of which I send you under separate cover. AVERAGE WAGE. " In 1895 Secretary Kunzler reported to our Toledo convention that the general average earnings of 7,300 members equaled $8.12 a week, for 52 weeks in the year, or a total of $422.24 earned by each member during the entire year. "In 1910 the writer reported that 8,901 members had earned on an average of $10.65 a week, for 52 weeks in the year, or a total of $553.80 each. These figures showed an increase of 31 per cent over those reported by Secretary Kunzler 15 years previous. "To-day we have the pleasure of reporting that an average of 9,002 members during the past year, earned on an average of $12.42 a week, for 52 weeks in the year, or a total of $645.60 each. This being an increase of 17 per cent over that reported two years ago; or, if you return to the figures of 1895, and make a comparison with the figures herein presented for the past year, you will discover that the earnings of our members have increased 53 per cent in the past 17 years. However, as a matter of justice, I must state that the year of 1895 contains one of the darkest pages in the history of our organization.'' Employed and unemployed. Member- ship. Employed. Unem- ployed. Percent p "* n t employ*. ^ Cutting 1,860 1,613 247 0. 87 ' 13 Press 1,929 1,727 202 . 90 : .10 Chimnev 1, 150 788 362 .09 ' 31 Bulb S04 794 10 .99 .01 Punch tumbler ami si em ware M ,9 5S2 X7 .87 ' 13 Mound making .. .. 5X4 582 22 .96 .04 Paste mold 514 441 73 .86 14 Caster place 441 409 32 .93 .07 Iron mold 354 >s,s 66 M 19 Machine jar and boille 170 167 9 .95 .05 Shade and j;lobe 145 110 35 76 24 Engraving 62 53 9 86 14 Insulator . . 41 11 Stopper erinder. . . 14 14 8,743 1,154 .13 On account of the reduced tariff tinder the Wilson bill, our members were obliged to double their day's work without any increase in wages on duplex globes. In the blown department and stem-ware department, where they make wines, cocktails, Cordials, goblet?, and that class of goods, our members suffered a 20 percent reduction in wages, removed the limit from their day's production, and adopted an unlimited piece-work basis. On numerous occasions we have increased our day's work on dome, cone, and flat shades made in opal, <_ r reen, and white plated. Notwithstanding this, many shades are beitiir imported ai the present time. \Ve understand that the Welsbach Light Co. if Gloucester, \. .1 .. briim them to this country by the shipload, and that old reliable concerns operating in Philadelphia. Pa., just across the river from theWelsbach Light Co.. arc unable to meci this evil competition. SCHEDULE B. 737 PARAGRAPHS 97-98 GLASS AND GLASSWARE. Two years ago our members increased their day's production as high as 40 per cent on what is known as chemical wares, such as beakers, flask beakers, and other wares used in hospitals and laboratories. And they removed the limit from their production so that they could work on a nonrestrictive basis with the hope of com- peting with the imported article. Notwithstanding this great change and sacrifice made by our members, the foreign manufacturer exports wares to this country. I respectfully direct your attention to the fact that the new McAlpine Hotel, Thirty-fourth and Broaaway, New York City, was supplied with $30,000 worth of imported bar wares supplied through the Wannemaker & Co. The ware was produced by the Val St. Lambert Co., Val St. Lambert in Belgium. Another very important feature connected with this affair is that we understand that all the glass wares used in the United States Navy Department on battleships are of foreign make. In addition to this, the Hudson River boats are furnished with foreign-made goods. We understand they come in duty free because they are used on navigable steamers. Yet this is a grave injustice to the American manufacturer and the American worker. A significant feature connected with the importation of chemical wares and wares used in hospitals and laboratories for experimental purposes is, as we understand it, that the wares are admitted free. When a jobber calls at a hospital or laboratory for an order, an order is given for a certain class of goods, and they tell the jobber to double or triple the order; but it will not be necessary for the party ordering to take the ware unless they really want it. The ware can be stocked by the importer and the order thus signed by the party ordering some ware is shown as evidence to the custom officials in New York and elsewhere as a bona fide order, and when the ware is secured, only one-third, or one-half of it, is delivered, and the balance is used in open competition with the product of the American manufacturer. This report was submitted to me by one who made an extensive investigation of the matter, and we believe that something should be done to prevent deceptive practices of this kind. In my statement before your committee on Wednesday, January 8, I mentioned electric bulbs. I would like it distinctly understood that I mean electric bulbs with or without filament, that is, sent here to be fitted with carbons or filaments, or sent here complete, as competition between American manufacturers and workers on this line of goods is extremely keen, due solely to the very low wages under which bulbs are produced in Continental Europe. Even with our 60 per cent duty I under- stand that 10,000,000 bulbs arrived on our shores last year. The wages of the electric bulb blower are low at the present time, and only recently we succeeded in securing an increase in wages for the gatherer from $2.80 to $3 a day. If the tariff is changed on this line of goods, it will certainly effect the interests of our men and probably cause some great sacrifice to be made by the members of our organization. We understand that the Treasury Department has transferred incandescent lamps from paragraph 98, Schedule B, known as "Glass schedule," to the metal schedule. We sincerely believe that these articles should be restored to the glass schedule specifi- cally and placed with blown glassware which includes electric bulbs, because of the fact that the largest proportion of the labor cost, or materials used in incandescent lamps, is composed of glass. We trust your committee will not be misled by this transfer, as any change made on electric bulbs under the metal schedule would be a grave injustice to the members of the American Flint Glass Workers' Union and the employers who are exercising their best efforts to cooperate with us in a harmonious degree consistent with the keen competition prevailing at the present time. You will note by the statistics given that while the season 1911-12 was one of the very best seasons, over 13 per cent of our men were unemployed, and it is impossible for us to find employment for these men in the trade, owing to the fact that there is not sufficient work for them. I am sure that if the tariff on imported glassware is reduced that the present serious competitive state will be intensified and a great number of our members thrown out of employment. In behalf of the American Flint Glass Workers' Union I respectfully request that your committee do not reduce the tariff on blown glassware. Please convey to the members of your committee my sincere gratitude for extending the time of your session in order to allow me to present our protest. Respectfully submitted. T. W. HOWE, President, American Flint Glass Workers' Union. 78959 VOL 1- 738 TABIPF HEAEINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. AMERICAN FLINT GLASS WORKERS' UNION, Toledo, Ohio, January SO, 1913. Hon. OSCAR W. UNDERWOOD, M. C., Chairman, Ways and Means Committee, Washington, D. C. HONORABLE SIR: In connection with the tariff revision on glassware I desire to add the following to that which has been submitted, on behalf of the American Flint Glass Workers' Union, and I sincerely hope that the presentation of the following facts will not consume too much of your time or trespass upon your patience. Owing to the fact that the question of imported glassware is extremely serious to us, we have concluded that it is advisable to present all possible sides to you on the subject, with the hope that judicious legislation will follow. The American flint glass trade is in a rather precarious condition to-day, due to the fact that there is no organization among the employers to regulate prices, and competi- tion is extremely intensified on account of a lack of unity and the competitive rivalry and the fact that the present tariff rates do not furnish adequate protection from im- ported articles, our country is flooded with wares from abroad, particularly continental Europe. The wages prevailing at glass factories in continental Europe are from one-third to one-fourth the prevailing rate in this country. German glass factories are finely con- structed and all the necessary facilities are supplied in order that quality and quantity can be produced, and this fact with the low wages and long hours prevailing, enables them to ship goods to this country, even though we have a high tariff rate on certain lines. Our principal competition in Germany is from the factories at Jena, Gehlberg, Ilmenau, Weiswasser, and Prague. The principal competition in Belgium comes from Val St. Lambert Glass Co., with factories at Val St. Lambert and Namur, and goods produced by this concern can be found in almost any principal city in this country, and we agaiu remind you of the fact that the new McAlpin Hotel, New York City, recently opened, was supplied with $30,000 worth of fine stemware, such as cordials, wines, goblets, and other barware utensils. All supplied by the Val. St. Lambert Co. The principal competition in France is from Baccarac. This concern ships blanks for cutting and cut glass. We ask you to remember that the glassware used on naval vessels and on the Hudson River steamboat lines is imported ware, and another significant fact that should require your attention is that all the syphon bottles used in the United States are imported articles, and the firm that formerly made this class of goods, Thill & Co., Brooklyn, X. Y., passed out of existence, due to the competition in this line of ware. It is con- eervately estimated that there are sufficient syphon bottles used in the various cities of this country to keep three large furnaces in operation and several attempts have been made to meet this competition and on each occasion they have proved failures. Last year we understand there were 10.000,000 incandescent electric bulbs shipped into this country from Germany and Austria, and we now understand that the importers are trying to have the finished incandescent lamp, which is governed at present by the metal schedule tariff, reduced from 45 to 10 per cent. We certainly consider this one of the deceptive acts resorted to by the importers, as we know that the principal cost in finishing an electric incandescent lamp is in the glass-working department. The con- cern that made this request has its factory in Holland where the glass blowers do not ever get tor regular work more than one-fourth or one-third of the wages paid here, and the living conditions of the workers are very poor. On top of this these Holland glass workers get 20 per cent deducted from their regular wages when the goods they make are for export to this country. (See the extracts from my report on labor conditions in Europe, which 1 filed with you when I appeared before you on January 8. It is printed on page of your hearings on the glass schedule. That investigation was not made for your committee, but was made by our union for it to know what competi- tion it was meeting, and is the most complete collection of actual facts about glass workers that there is.) If there are any serious changes regarding the tariff rates on incandescent lamp bulbs with or without filaments, the members of our union will seriously suffer on that account, and instead of reducing the tariff on the incandescent lamp bulb with filaments, we believe and urgently advise that incandescent lamp bulbs with filaments be taken from the metal schedule and be placed on the blown glassware schedule, which provides for a 60 per cent duty, as there is no doubt in our niinds as to that, being its proper place, and we hope that you will not overlook that very important point. It would lie like giving us something with one hand and taking it away with the other to give us protection on bulbs and then follow the request of these Holland importers to lower the duly on the lamps which is the only article for which the bulbs can be used. SCHEDULE B. 739 PARAGRAPHS 97-98 GLASS AND GLASSWARE. In connection with the terrific competition prevailing in this country we desire to state that if you simply visit a few of the large glass dealers or the 5 and 10 cent stores of the principal cities of our country, you can not help but observe that glass is sold extremely low, and on account of the low prices prevailing a number of flint glass factories have been forced to retire in recent years. Chiefly among these are J. J. Murray Co., of Philadelphia, Pa., an old-time manufacturer, manufacturing shades and globes; a concern that thoroughly understood the business and had an excellent crew of men. Welsbach Light Co., Gloucester, N. J., are importing shades by the shipload and laying them down in Philadelphia cheaper than they could be produced in Philadelphia. A number of workmen left the J. J. Murray Co. and started a cooperative glass factory at Addison, N. Y., but they lasted only a short period when they had to give ii up. Later, another crew of experienced men started the old Boston-Sandwich Glass Co., Sandwich, Mass., and lasted only about a year when they were compelled to retire. Among the recent failures are: Brpnx-Ryal Glass Co., Port Jervis, N. Y.; Solar Glass Co., Owensboro, Ky.; Cheat River Glass Co., Point Marion, Pa.; The Crystal Tumbler Co., Morgantown, W. Va.; C. M. Rodefer Co., Shadyside, Ohio; Ohio Flint Glass Co., Lancaster, Ohio; Eyansville Glass Co., Evansville, Ind.; Millersburg Glass Co., Millersburg, Ohio; Continental Glass Co., St. Louis, Mo.; Pioneer Glass Co., Coffeyville, Kans.; Bartlesville, Glass Co., Bartlesville, Ohio; and I may add that the idle Ohio Flint Glass Co.'s factory at Lancaster, Ohio, and the idle Evansville Glass Co.'s factory at Evansville, Ind., each cost about $700,000 to erect and equip, and are considered two of the best constructed glass factories in this country. I again desire to remind you that the average wage of the American flint-glass worker is less than $14 a week for the year, and that there are no glass manufacturers in this country declaring any large dividends. It is estimated that the average dividend will not exceed 4 per cent. If the tariff is reduced on any of the illuminating lines of glassware, such as incan- descent electric bulbs, with or without filaments, lamp chimneys, electric shades or globes, or lamp shades or street lights, blanks for cutting or cut glass, stemware, such as cordials, wines, goblets, and other barware goods, it will play serious havoc with the American industry and the present deplorable competitive condition will un- doubtedly do the American flint-glass weaker a grave injustice, because of our experi- ence has proven that when such competition reigns supreme and the employer can no longer profit by his business, that concessions are always demanded and generally granted where the facts are self-evident, as it will certainly be proven in this case. If any tariff changes are to be made they should be made on the very commonest line of glassware, and should not be made on the higher grades. Please do not forget that the past year was considered a good season, as far as the quantity of production was concerned, and during that period 14 per cent of our members were idle and vainly sought work. Therefore, on behalf of the American Flint Glass Workers' Union of the United States, we must respectfully beseech your committee to not reduce the tariff on pressed or blown glassware, or on goods made and known or recognized in the general glass-working trade as flint glassware or blown glassware, and the goods which we have enumerated in our protest. Very respectfully, yours, T. W. ROWE, President American Flint Glass Workers' Union. STATEMENT OF WILLIAM F. DORFLINGER, REPRESENTING THE AMERICAN ASSOCIATION OF FLINT AND LIME GLASS MANU- FACTURERS. PARAGRAPH 98. The CHAIBMAX. Mr. Dorflinger, to what paragraph will you refer ? Mr. DORFLIXGER, To paragraph 98. The paragraph that covers the articles about which you asked a few moments ago. I represent the manufacturers of the glass. We are also glass cutters, etchers, engravers, and, in fact, all those things which are enumerated in that paragraph. 740 TABIFF HBAEINGS. PABAGBAPHS 97-98 GLASS AND GLASSWARE. I would like to give you a few facts, if you will bear with me; not figures. I want to tell you some things I do not believe you hear about or know about. In the first place, there is absolutely no question that the fine glass the tableware which is made hi this country, whether plain or cut or etched, is the finest that is made in the world. There is no question about it. The reason for this is t.iat we have the best sand that is knowi to the world. It is a matter of record that the sand for the English exhibit hi Paris, I think hi 1868, was brought over from America. We take prizes everywhere at Chicago, Philadelphia, at the Centennial in Paris, and everywhere first prize for glassware. Under those circumstances you would think there would be no trouble hi selling it here, but that did not seem to count. It is the price that counts. One of the reasons why we co not sell more of it is beacuse the dealers prefer imported ware; and why? Because they make more money on it. They buy cheaper than they can buy domestic ware and they get a bigger price tha . they could get for the domestic ware. Conse- quently, they boom it and push it. You can go into any store in New York or Philadelphia and ask them which is the best glass they have, and they say "English," and the next best is Swedish. I have had that experience within two weeks, When I mildly suggested that there was good glass made in the United States, trie saleslady said, "Well, yes; some, there is some," and our ware was on their shelves at the very time. Glass is sand, silica; it is melted sand. We put it into a crucible and apply heat, and it comes out glassware. Of course, there are other ingredients, alkalis, etc., on some of which we pay duty lead and potash. When that glass is melted, or rather the sand is melted, the rest of it is labor, every bit. Everything in the manufacture of glass has advanced in the last few years. I do not mean skilled labor, but the unskilled labor and everything in connection with the works have advanced. All the materials have advanced hi price and prices for the glass have been going down steadily. As my friend said a moment ago, there has never been such a condition in the United States; there have never been such low prices. I remarked that the dealer preferred imported glass. Now, let mo illustrate. Tiffany, of New York you all know Tiffany sells domestic American cut glass bought directly from the manufacturer at .33^ per cent advance. I can take you to half a dozen stores within two or three blocks of Tiffany's, where they are selling im- ported glass, and making from 100 to 200 per cent. There is no question about it. It is done every clay. We are not patriotic here. In France you can not give them American glassware. They want French; they do not want anything else, but here we want imported glass. It is a magic word, and as the women buy the glass- ware particularly, that is the word that charms them; and it covers a multitude of defects. Fine glassware is a luxury. And yet, when I say it is a luxury, the class of people that you think would buy it are those that go to other side. Let me illustrate. Two or three years ago I was talking with a dealer on Fifth Avenue, a dealer in very high-grade goods. I said to him. "T suppose your trade is confined to Fifth Avenue?" "Xo," he said, "I do not believe you know the class of people I sell SCHEDULE B. 741 PARAGRAPHS 97-98 GLASS AND GLASSWARE. to. I do not sell to the very wealthy and fashionable people, the people who go abroad. What do you suppose Mrs. A buys in this country? Her milk and her morning paper. Everything else she gets in Europe." And there is a great deal of truth in that. The very people who should buy our glass and who should buy the best quality are the ones who get it from Europe. Every little while we read that Mrs. So-and-so has had an expensive set made in Europe, especially designed and imported to order. Yet the very best glass hi the world is right next door to her. The poor people do not want our class of glass; they can not buy it. If it was given to them they would not know what to do with it; they would break it. Our trade is confined, you might say, to the average well-to-do citizen, who is cultivated and educated. With him it is a necessity. Unfortunately the women buy the glassware, and when the dealer says, "This is imported; it is the latest thing," that settles it. I can assure you that if you take two articles, identical in every way, made at the same place and under the same conditions, and you say to the average woman, "This one is $12, the other one is $15," she will ask you, "Why is that $15?" and you say, "It is imported," and she will take it. She does not know anything about it; she simply relies on what the dealer tells her. Mr. LONGWORTH. That is like imported positions. They will not give them to the natives, but have to import. Mr. DORFLINGEB. It applies to a great many things. I would like to refer to a statement made a few moments ago in regard to the importation of glassware. I am surprised to know that the importation is falling off. You know that statistics are not complete. In fact, the more I look into them the less I know about it. A great many kinds of glassware are bunched together, but we do know that there have been large importations, and I think you will find, if you can get at the data say, for the impor- tations from Sweden in the last five years and you will find a phe- nomenal growth. Mr. HARRISON. We asked the last witness to tell us whether in his opinion importations under paragraph 98 consisted chiefly of c"t glass and he said that they did. I was proceeding upon that assump- tion. Mr. DORFLIXGER. I think he is wrong. I do not think the gentle- man is familiar with that subject. That paragraph covers a great many things; it concerns plain ware, etched ware, engraved ware, stained ware, and all that sort of thing. It is very hard to divide those up. The fact is there is comparatively little cut glass im- ported; that is, cut glass as we know it here heavy, rich cut glass. The glassware that we manufacturers afe interested in is tableware, the fine glassware for the table, dishes, and stem ware for table service, that is the kind which is brought in here to such a large extent. For a great many years, off and on, my firm had the contract for the Navy ware. We had it last year. This year we lost it; it has gone to the other side. The contract for 1913 is placed, and the factory to which that order was given is a very large shipper to this country- very large indeed. I do not think the figures that you have are reliable, not that they are wrong, but because they cover too large afield. 742 TABIFP HEABINGS. PABAGBAPHS 97-98 GLASS AND GLASSWABE. The CHAIRMAN. So far as the import figures on glassware are con- cerned, it is practically conceded that there could be very little smuggling in glassware and the Treasury figures must be correct. Mr. DORFLINGER. You do not refer to undervaluation ? The CHAIRMAN. What is that ? Mr. DORFLINEGR. You do not refer to undervaluation ? The CHAIRMAN. No; the undervaluation would amount to as much in one year as in another year, and the comparison remains the same. Mr. DORFLINGER. Yes; but it is very hard to estimate it. I do not believe, gentlemen, that anything is to be gained by lowering the duties on this class of glassware, except the loss of revenue to the Government. A thing is worth what it will bring in the market. If this Swedish ware will bring $15 to $18 for a goblet, when it costs $5 or $6 or $6.50 or $7, what difference is a small decrease in duty going to make ? The only difference it will make, apart from the loss of revenue, will be an increase in the profits of the foreign manufacturers or the importer. I am sure the dealer will pay the same price, and he will ask the same retail price. You win find in some of the briefs submitted here figures and state- ments as to conditions on the other side. Only yesterday I was told by a gentleman who visited one of the largest factories in BcJgium a year or tw T o ago, a factory that perhaps figures the largest in exports to this country, that about one-half of the force were women and girls; the laboring work was done by women. The coal was handled and the ashes wheeled by women. We do not want that condition here. I do not believe there is a glass manufacturer in this country that would work under those conditions. And if he would, you would not let him. So I ask you gentlemen to protect us in this industry and not benefit those concerns on the other side who do not seem to recognize the benefits and the advantages of present civilization. WASHINGTON, D. C., January 7, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, Washington, D. C. HONORABLE SIR: We, the manufacturers of handmade blown glassware covered by Schedule B, paragraph 98, do hereby enter protest against any revision downward of the tariff now in effect. Our reasons for objection to changes are based upon the following facts: I. That under present conditions no unreasonable profits have been made by the manufacturers of blown glassware in this country. Careful investigation proves that the average return upon the necessary investment is about 4 per cent. This state- ment is open to investigation. II. Under the protection afforded this industry by the present tariff a very marked improvement in quality has been made in production of American blown glassware. The introduction of modern methods has reduced manufacturing costs, but unfortu- nately these advantages have been more than offset by increases in cost of skilled and unskilled labor, advances in prices of materials, and fuel. These increases have all been absorbed by the manufacturers without any increase in selling price; on the contrary prices have gradually declined. Blown glassware is now sold in the open market by American manufacturers at about the lowest prices on record. Large purchasers of this product are the popular 5 and 10 cent stores. A visit to these stores will easily convince your committee of the fact that the American manu- facturer has small opportunity to make big profits. In these same stores, which im- port foreign goods direct, will be found many lines and items of etched imported blown SCHEDULE B. 743 PARAGRAPHS 97-98 GLASS AND GLASSWARE. glassware. These items show that the American manufacturer is not yet in a position to produce at a satisfactory price in competition, notwithstanding the protection afforded under the present tariff law. III. In the manufacture of blown glassware an important factor is we are, to a great extent, selling labor and fuel, the average proportion of cost of labor to the total cost of the finished article being from 70 per cent to 80 per cent. We ask your full consideration of these facts. Yours, truly, AMERICAN ASSOCIATION OF FLINT AND LIME GLASS MANUFACTURERS, Stevenson Building, Pittsburgh, Pa. WM. F. DORFLINGER, WM. M. ANDERSON, E. O. CROSS, A. B. HOUOHTON, W. H. C ASS ELL, N. KOPP, A. J. BENNETT, W. A. B. DALZELL, Committee. MEMORIAL OF AMERICAN FLINT GLASS WORKERS' UNION. COMMITTEE ON CLAIMS, HOUSE OF REPRESENTATIVES, UNITED STATES, Washington, D. C., January SO, 191S. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee. MY DEAR COLLEAGUE : I herewith transmit for your consideration in connection with paragraph B, schedule 98, a communication from the American Flint Glass Workers' Union, which I will be glad to have filed as a brief and printed in the record of the hearings. Yours, very truly, WM. D. B. AINEY. HEADQUARTERS LOCAL UNION No. 92, A. F. G. W. U., Honesdale, Pa., January 25, 1913. Hon. W. D. B. AINEY, Washington, D. C. HONORABLE SIR: Our attention has been called to the fact that the Ways and Means Committee is now considering a revision of the tariff laws on imported glasswares and has the subject under consideration known as paragraph B, schedule 98. We most respectfully call your attention to the fact that a reduced tariff means reduced wages to our members and other sacrifices such as were experienced under the Wilson tariff law. We therefore beseech you and your committee to not make any reduction in the present tariff rates on imported glasswares, as the present tariff rates do not afford sufficient protection to the American workman, as considerable glassware is now being imported, notwithstanding the extraordinary keen competition prevailing in the glass markets of our country. There is no monopoly on glasswares in the American trade, and no organization among the flint-glass manufacturers; all are free to sell as they please, and prices are very Tow. There will be no relief afforded to the citizens of our country if the tariff rates are reduced, as it will only intensify the present deplorable state of affairs. There- fore we most respectfully protest against any reduction in the tariff rates, and we trust you will act favorably on our appeal. I am, fraternally, yours, GEO. GRAMBS, Corresponding Secretary. 744 TARIFF HBAEINGS. PAB-AGBAPHS 97-98 GLASS AND GLASSWARE. STATEMENT OF H. D. CAREY, PRESIDENT NATIONAL ASSOCIA- TION OF CUT-GLASS MANUFACTURERS, OF SCRANTON, PA. The CHAIRMAN. Mr. Carey, what paragraph do you wish to refer to ? Mr. CAREY. Paragraph 98, I believe it is, on cut glass. The CHAIRMAN. That is glassware. Do you wish to refer entirely to cut glass ? Mr. CAREY. It refers to cut glass, decorated, etc., I believe. I wish to confine all of my statements to cut glass. That is the only thing I know anything about in connection with this line. The CHAIRMAN. You may proceed. Mr. CAREY. Gentlemen, I believe the cut-glass industry is in a different condition than most people realize, and in a different condi- tion from most other manufacturing industries, it being a luxury, and at the same time the price at which it is being sold is on as close a margin as a necessity. I believe that this committee are desirous of gaining actual knowledge of the facts as they exist, and of passing upon them according to those facts; and for that reason I have gone to some little trouble and given it the most careful consideration that I could in the short time which I had, in order to give this com- mittee a good idea of the conditions in the cut-glass business. As an introductory statement I will go into the history of the busi- ness a little to show you that there are no trusts and no combinations ; that the business is conducted and managed by men of very moderate circumstances. Nearly all of them that are in the business are men who have been workmen behind the frame, and they are now running the shops ; and in many of the shops all of the workmen in the shops are members of the firm. That is a very common thing. In 1876 there were 5 cut-glass factories in the United States. In 1897 there were 18 cut-glass factories, with 1,952 frames, or an average of about 108 frames to the shop. By frame we mean that the glass is put be- hind a frame, in the actual cutting of the glass, and there would be an operator for each frame. In 1902 there were 80 and I want you to mark this, gentlemen, in 1876, 5; in 1897, 18; and in 1902, 80. In 1902 there were 3,500 frames, or an average of 41 frames to the shop. In 1912, at the pres- ent time, there are 139 factories, 4,800 frames, or an average of 35 frames to the factory. Those are the frames which are operative. Every factory is equipped I might say nearly every factory, because there might be a very few to which it would not apply but nearly every factory is equipped to operate considerably more than they are now doing. There are at least 1,000 frames at the present time that are inoperative, which would supply a further production of from a million dollars to a million two hundred and fifty thousand dollars. Our factories during the last year cut and produced and sold in this country about $6,000,000 worth of cut glass. The foreign im- portation, as near as I can get it from the Bureau of Statistics, is over a million dollars, not including the duty, which would make it over a million and a half of dollars, or about one-seventh or over one-seventh of the total amount produced. SCHEDULE B. 745 PARAGRAPHS 97-98 GLASS AND GLASSWARE. Mr. HARRISON. So that you estimate all of the importations under paragraph 98 are cut glass ? Mr. CAREY. No, I do not. The importations under paragraph 98 in the last year, ending June 30, 1912, was $1,001,542 without the 60 per cent duty. The greater portion of that is cut glass. It does not distinguish as to what is cut glass and what is nok With the 60 per cent added, I estimate that the value, as laid down in this country, will amount to $1,500,000, and I think that is a conserva- tive estimate, making due allowance The CHAIRMAN (interposing) . You mean importations ? Mr. CAREY. Yes, sir; that is the value of the importations, about $1,000,000. Mr. HARRISON. Practically all of the imports under paragraph 98 are cut glass ? Mr. CAREY. Yes, sir; practically all are cut glass, as I understand it. The CHAIRMAN. The figures that we have here have come from the Census Department, the Census of 1910, and they show that the American production of this article amounts to $27,000,000. Mr. CAREY. Of cut glass ? The CHAIRMAN. Covering all these articles: Glass bottles and decanters, and all articles of every description, composed wholly or in chief value of glass, ornamented or decorated, cut, engraved, painted, colored, stained, silvered, gilded, etched, sand-blasted, frosted and printed, or in any manner, or ground, etc.; all the foregoing filled or unfilled, and whether their contents be dutiable or free. What articles do they refer to there ? Mr. CAREY. They refer, perhaps, to a good many articles that are not listed in the statistics which I have, or which I know anything about. Ground glass may be a great many things and may be used and included. The CHAIRMAN. You think the imports of those articles are confined solely to cut glass ? Mr. CAREY. Not solely, but nearly so. Mr. HARRISON. You are basing your argument upon the assump- tion that practically all of the imports are cut glass, and yet only $6,000,000 out of the $27,000,000 of the American production are cut glass. Mr. CAREY. I deny absolutely that there is a production of $27,000,- 000 worth of cut glass. I have gone over this matter very carefully and I can speak authoritatively on the subject. The amount manu- factured in this country is but $6,000,)00 worth. I can speak more accurately than the Census Bureau can speak on this subject. The CHAIRMAN. The Census Bureau's figures cover the whole paragraph. Mr. CAREY. They cover a good many other items, and, including all the other items, it is probably over $6,000,000. But I am confining myself to cut glass or decorated ware. The amount that is imported into this country would compare almost equally in proportion to the amount that would be produced by the idle frames which we have in this country to-day. If you will observe, we have 1,000 frames idle in this country to-day and they would just about manufacture the amount of cut glass that is imported into this country. 746 TABIFF HEARINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. As I said before, there is an average of about 35 frames or 35 cutters to each shop, so that you can see the matter has gotten down almost to where it is managed and controlled by the workmen in the greater percentage of the shops. I will say that 90 per cent of the cut-glass shops, the cutting shops and it may run higher than that are run by men who have been employed behind the frames, and a great percentage of the workmen in the shops are the men who own the business. That applies to cut glass, but I think it will apply to very few of the other items. You will bear in mind that in starting into the cut-glass business it does not take very much capital. Cap- ital is employed when they grow larger; but with only 35 frames there is not a very large amount of capital employed in any one factory. They are all in the keenest competition with each other. Cut glass to-day is being sold far, far too cheap. You can inquire of any buyer of cut glass in any of the big department stores that you please and they will tell you that cut glass is being sold entirely too cheap. It is common knowledge in the trade, and it has been caused by extreme keen competition, not only at home but abroad. The American manufacturers have attempted to enter into competition with the foreign manufacturers, but even with the 60 per cent duty that is on cut glass to-day it does not make up the difference, as I figure it out, between the cost of production abroad and in this country. Mr. HARRISON. The imports in 1912 were only a little over $1,000,000 and in 1905 they were nearly $1,800,000? Mr. CAREY. Yes, sir. Mr. HARRISON. How do you account for that ? Mr. CAREY. I can answer it in this way. There are not one-tenth of the cut-glass factories in the United States to-day that are paying any dividends. Most of them will show a loss. Mr. HARRISON. You do not believe that is because they have nearly equalized the cost of production in both countries? Mr. CAREY. No; but 1 ecause the American manufacturer is at- tempting to meet the competition with the foreign manufacturer. The cost of labor in Europe is one-half or one-third, as I am informed, of the cost that the American manufacturer as to pay for the same class of labor. I can not speak authoritatively on tiat; that is simply the report that has come to me, but I think it is correct. If you gentlemen have any figures on that subject, I think they will bear me out. Mr. PAYXE. The imports of 1911 amounted to $1,341,000. Mr. CAREY. Yos. Mr. PAYXE. They have not been uniform from yeag to year? Mr. CAREY. Xo, sir; cut glass is a luxury. If the country is pros- perous, if everything is going along well, then you will see cut glass is being sold, because it is a luxury. Mr. PAYXE. The following articles are mentioned in paragraph 98: Glass bottles and decanters, and all articles of every description composed wholly or in chief value of glass, ornamented or decorated, cut, engraved, painted, colored, stained, silvered, gilded, etched, sand blasted, frosted, and printed. And so forth. On which of those articles do you have to put the most labor? Mr. CAREY. On cut glass. Every indentation or cut on a piece of cut glass means so much labor. SCHEDULE B. 747 PARAGRAPHS 97-98 GLASS AND GLASSWARE. Mr. PAYNE. So that the duty being 60 per cent, that would be more apt to affect the cut glass than any of these other articles, because there is more labor used on the cut glass ? Mr. CAREY. Yes, sir. Mr. PAYNE. And the difference hi the cost of labor is greater ? Mr. CAREY. Yes, sir. Mr. PAYNE. You said the difference was a half or a third less in Europe. Do you mean that or did you mean that it is a half or a third of the labor cost in the United States ? Mr. CAREY. I mean that a man that would receive $12 in the United States would only receive $4 or $6 in Europe. Mr. PAYNE. It is two-thirds less instead of one-third. I thought you were mistaken about that, because it is different from my infor- mation on the subject. Mr. CAREY. I hope you will take me as to what I mean, if I mis- quote myself. During the last 10 years, speaking of the production in the cut- glass industry and I am really ashamed to make this statement with regard to any manufacturing industry, and especially one in which I am personally interested during the last 10 years there have been 98 firms that have either failed or discontinued. Mr. HARRISON. And all this under a high-protective tariff' ? Mr. CAREY. Under a high-protective tariff; yes, sir. I say that 60 per cent does not cover the difference in the cost of manufacture. The total number in that length of time, considering all those that failed, was 237, or 40 per cent of the total; 70 per cent of the number that was in business at any one tune. One hundred and forty is the greatest number of factories that have been hi business at any one time, and 70 per cent of that number have either discontinued or failed. A number of them discontinued because there was abso- lutely no profit and they could not meet the competition such as we have. This is a rather lamentable state of affairs; but I will state, like some of the former speakers have done, that we are willing for this committee or any committee, or anyone that this committee may designate, to examine the books of any of the cut-glass manufactur- ers, or all of them, because they are open to this committee, and any statements which I have made here will be borne out accurately as I have made them. I have made an illustration of the cost figures that may be of interest to you gentlemen. All the representatives that have ap- peared before this committee have been representatives of manufac- turers that have been interested hi both the manufacture of glass and the cutting of glass. The cutting shop does not manufacture any glass. They go out on the market and buy their blanks and thev cut them and do the other work on them. For instance, we will take an 8-inch bowl for illustration. Suppose we pay $9 a dozen for the blanks in this country, and we wnl say we pay &4 for the roughing and $6 for the smoothing; then the breakage and the overhead expense, clerk hire, and all those things going into it will figure 100 per cent on roughing and smoothing, as near as I can get at it, and I think it is very accurate. I have taken percentage fig- ures so as to make it more plain. It would amount to $10, the roughing and smoothing, and it would make the total cost to the 748 TABEBT HEABINQS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. factory for that article of $29. They are paying one-half for labor. The blank would be cheaper without duty. I have taken off 20 per cent, and when you take off 60 per cent you have got about 36 per cent. I have done this to show that I am conservative in my esti- mates. Taking off 20 per cent would leave for the blanks $7.20 a dozen; counting foreign labor at one-third of labor cost in the United States, it would make the roughing $1.33 and the smoothing $2, and it would make an overhead expense of $3.33 granting that there is the same amount of breakage there as here or it would make a difference of 110 per cent in the cost of production. If you take it on the basis of labor costing one-half, you nave a cost abroad of $17.20 against $29, or a difference of 69 per cent. Those are correct figures, and when I say that 60 per cent would not cover the differ- ence in the cost of production, I am speaking accurately and not estimating. I have here a letter that may bear a little on this subject, from one of our manufacturers in St. Louis, with reference to the running of a factory by him in England, which reads as follows: I was thoroughly familiar with the wages paid there, and we had no difficulty in getting a good glass cutter to work for $7 a week. As you doubtless know, glass cutters in England are paid higher wages than in any other European country. In France, Sweden, and Belgium the wages paid grade lower. Then he goes on and mentions an importer that was recently dis- playing a line of samples in St. Louis, and states that judging from the prices which he was asking for those goods that even with the 60 per cent duty we could not pay our men $9 a week and get the same articles cut. I will say this it may be new to you gentlemen, in spite of the fact that you are very familiar with this subject that the Japanese Government, which, as we know, is very aggressive and progressive in this day in the way of manufacturing, has employed experts from both the United States and from Europe, and is attempting to estab- lish the cut-glass business, with the idea of competing. You all know that they have extremely cheap labor in Japan. So far we have never had any importations of cut glass from Japan and there has never been any cut glass manufactured in Japan to my knowl- edge, but they are now working upon that subject. We are one of the very small industries that will appear before you, perhaps one of the smallest although I have heard of some here that were smaller but we employ a great many men in comparison to the amount of our production, and we ask that you gentlemen give this matter the same consideration that you would give to some of the larger affairs. While it may not bo important from a governmental standpoint, it is vitally important to the men who have their all invested in the glass-cutting business; just as vitally important to us as though the business were much larger. After you get the facts which give you a knowledge of this business I am satisfied that instead of any reduc- tion or any lowering of the rates there will be a raising of the rates. We are perfectly satisfied to have the rule which has been announced from the platform so many times during this campaign, that the difference in the cost of production abroad and here will be the rate SCHEDULE B. 749 PARAGRAPHS 97-98 GLASS AND GLASSWARE. of duty. If that rule is applied we have no complaint; we are satis- fied with that rule. The CHAIRMAN. Do you know anything about the other articles that are covered in this paragraph outside of cut glass? Are they all classed as articles of luxury ? Mr. CAREY. They are all luxuries; yes, sir. Hand-painted ware would be a luxury, and anything of that kind would be , luxury; they would all be classed as luxuries. Mr. HARRISON. Why do you believe that the revenue is dwindling so under this rate ? Mr. CAREY. Why do I believe that the revenue is dwindling ? Mr. HARRISON. Yes. The imports are reducing in amount from year to year, apparently. Mr. CAREY. Tne American manufacturer, as I say, is attempting to meet foreign competition. In doin<* that they have perhaps made a mistake. They have done it under the 60 per cent duty; they have in vested their money, and they want to make it good. They are selling it entirely too cheap. Most of those that have their money invested are the workmen; it is their business, and they keep per- sistently at it, as one who has got into something bad and wants to make it good. They have given it a great deal of attention. The manufacturer has tried to do everything he can to scientifically pro- duce the articles here in order that he can meet that foreign com- petition. Mr. HARRISON. Prices must have been falling off? Mr. CAREY. Yes, sir; prices have fallen off 50 per cent. The CHAIRMAN. In what period of time? Mr. CAREY. Within six years. Mr. PAYNE. In cut glass ? Mr. CAREY. In cut glass; yes, sir. Mr. PAYNE. Was the quantity imported very much greater on the million dollar's worth basis Mr. CAREY (interrupting). Oh, yes; very much greater. Gentlemen, I thank you for the attention which you have given me. If there are any facts that you wish in connection with this matter, 1 will be only too glad to supply them to you if it is within my power. I have means of getting data from the different factories, and I will be glad to supply you with any information desired. Mr. RAINEY. How many factories are there now ? Mr. CAREY. One hundred and thirty-nine. Mr. RAINEY. And how many failed in the last two years ? Mr. CAREY. Ninety-eight in the last 10 years. Mr. RAINEY. Have there been any new factories started ? Mr. CAREY. Yes, sir; wherever there has been a failure there is a plant that is absolutely worthless unless it is used as a cut-glass factory; there is the machinery, and where there is a failure, as a rule, some one connected with that shop has started it up again in a smaller way. Mr. RAINEY. So that the failures have not decreased the number of factories actually in operation? Mr. CAREY. No; the factories are as great to-day in number. The production is very much greater, because it is sold so much cheaper. 750 TARIFF HEARINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. Mr. RAINEY. How old is the industry ? Mr. CAREY. In 1876 there were five factories. I have named them in my brief. Mr. RAINEY. About how many men are employed ? Mr. CAREY. In the cutting there are about 5,000, and then the clerk hire and other employees would probably bring that up to about 7,000. Mr. RAINEY. In the cutting the employees are skilled laborers ? Mr. CAREY. Yes; they are all skilled laborers. Mr. RAINEY. And they receive about how much per day ? Mr. CAREY. I think in a union shop they receive a minimum of $15 a week, and it runs from there on up to $21 and $24 a week, according to skill. They are not all union shops and the wages will run any- where from $12 to $24 per week. Some very skilled labor will get more than that, as high as $30 a week. It will average around $16 to $17 or $18 a week, I think. BRIEF OF MR. H. D. CAREY. To the honorable the Committee on Ways and Means of the House of Representatives of the United States of America in committee assembled: The petition of the undersigned, representing the cut glass manufacturers of the United States, respectfully showeth: 1. In the year 1876 there was in the United States only 5 cutting shops, to wit: C. Dorflinger, White Mills, Pa.; J. Hoare & Co., Corning, N. Y.; Mount Washington Glass Co.. New Bedford, Mass.; Meriden Silver Plate Co., Meriden, Conn.; and Wilcox Silver Plate Co., Meriden, Conn. 2. In the year 1897 there was in the United States 18 shops, using 1,952 frames. In the year 1902, 80 cutting shops and 3,500 frames, and in the year 1912 there are 139 shops and not less than 4,800 frames in actual use and about 1,000 frames inactive, making a total of 5,800 frames, and about 5,000 glass cutters actually employed besides a large amount of other help necessary around a manufacturing plant. 3. The average frames per shop in 1897 was 108, and in 1902, 44, and in 1912 less than 35. During the past year these shops have produced and sold more than $6,000,000 in cut glass. Nearly every shop is equipped for very much larger production, which is limited only by the market demand. 4. That in the cut-glass trade there are no trusts, monopolies, or large combinations controlling either prices or production, and there is the very liveliest competition among all of the several cut-glass manufacturers. This competition is not only with the factories in this country but also with the factories in Europe. Nearly all of the shops in tliis country are owned, managed, and controlled by men of very moderate means: a very large percentage of the owners being men who have learned their trade in other factories, saved a little money, and started in business for themselves, and with the keen competition at the present time all of the cutting shops have more than their due burden. By reason of this strong competition both at home and abroad, during the last 10 years 98 firms have either discontinued business or failed out of of a total of 237 firms in business showing 40 per cent on a total and a much greater percentage on the number of firms in business at any one time, which perhaps would not exceed 140. but. as firms have failed or discontinued new shops have started to lake their place, composed usually of workmen who have been employed in the old or discontinued shop. Therefore, the number of firms who discontinue business during the last 10 years would equal 70 per cent of the total number of cut-glass manu- facturers iu business at any one time during this period. 5. In the year 1897 four shops continued more than one-half of all the frames, any one of which were much larger than any of the shops to-day. You will therefore observe that while cut glass has become very popular and the number of firms and the men employed greatly increased that the frames in the shop have decreased from an average of 108 in 1897 to less than 35 in 1912. 6. Cut glass is a luxury and is now sold much cheaper than any manufacturer in the United Slates can afford to sell it. and if any of you gentlemen are familiar with the cut-glass business you will readily agree that it is a fact that very few cut-glass SCHEDULE B. 751 PARAGRAPHS 97-98 GLASS AND GLASSWARE. manufacturers are paying any dividends upon the money invested, and any depre- ciation in- the tariff that would allow stronger competition from European countries would mean ruination to a large number of manufacturers. 7. We regret exceedingly that we are unable to produce accurate data concerning the cutting shops of Europe and the labor paid in same, but on the best information we are able to get the cut-glass factories in Europe are very numerous, and we believe that statistics from the customhouse will show large importations of cut glass from Austria, Germany, Belgium, France, and England, and particularly in the last five years from Sweden. This class of ware has made deep inroads to the American trade by reason of the very good quality of the ware and the very low prices at which it is Bold. We believe it can be shown that some of this ware is sold in the large stores of this country at three times its cost and at a profit of 200 per cent, whereas the profit on domestic ware is based on selling it for 33J to 50 per cent advance on the costs, and in very rare cases at 100 per cent over cost. 8. As above stated, this business is owned, managed, and controlled by people who were formerly workmen, and are of only very moderate circumstances. That there is no demand in this country for cheaper cut glass, and in fact it is now being sold at considerably less than the manufacturer can afford to market it. We believe that the present tariff rate of 60 per cent is, if anything, too low, and will not equalize to the American manufacturer the difference in the cost of production. In considering this matter please bear in mind that the American manufacturer is obliged to buy blanks for cutting upon which there is a duty. On practically all the supplies he uses there is a duty, and that these articles are much more expensive in the United States than they are in Europe; that if you will refer to accurate statistics upon the matter of labor you will find that labor in this country is paid much greater wages than the glass districts of foreign countries. When all these matters are taken in consideration and accurate calculations made upon the basis of cost of production in Europe and in this country you will find that the present duty of 60 per cent ia too low to cover the differ- ence in the cost of production. 9. We are reliably informed that the Japanese Government has in the past two years attempted to establish the cut-glass business in that country, and has employed experts both from Europe and America to teach their help. We believe, gentlemen, that it is unnecessary for us to tell you that it is impossible for the American mechanic to live on the same wages as is paid to European and Japanese labor, and we sincerely trust that you will give this subject your most careful consideration, and will not allow any reduction in the present tariff of 60 per cent. Respectfully submitted. WM. F. DORFLINGER, H. D. CAREY, Representatives of the Cut-Glass Manufacturers. MEMORIAL OF CUT GLASS MANUFACTURERS' ASSOCIATION. THE CUT GLASS MANUFACTURERS ASSOCIATION, Brooklyn, N. Y., December SI, 1912. Hon. JOHN J. FITZGERALD: Having been informed that there will be a hearing on January 8, 1913, about the matter of the United States customs tariff on cut glass before the Ways and Means Committee of Congress, at Washington, D. C., and having been advised to present the following facts to our Congressman with the request that you kindly present same to the proper authorities, the Cut Glass Manufacturers Association, of Brooklyn, N. Y., at a meeting held December 30, 1912, beg leave to offer the following facts, to wit: That the duty of 60 per cent as at present charged on cut glass, which is a luxury, is absolutely necessary to protect this industry in the United States, for the following reasons: That the wages paid to the workmen cutting glass in the factories of the undersigned and other factories manufacturing cut glass in the United States average from $16 to $23 per week, while in the European factories the workmen doing glass cutting of the same kind receive only from 6 to $12 per week; and even under these conditions we have hard work to compete with the foreign-made cut glass, and any reduction in the present duty of 60 per cent on same would tend to greatly reduce the cut glass industry in the United States and throw many workmen at present engaged in this industry in the United States out of work. At present, and for some years past, we have been employing about 750 men in this industry in Brooklyn, and there are many more factories in our line throughout the 752 TARIFF HEARINGS. PARAGBAPHS 97-98 GLASS AND GLASSWARE. United States who will probably offer similar facts and petitions through their Repre- sentatives. We should be very pleased to give you any further information which you might desire about the foregoing matter. Trusting that you will give this matter your kind attention, and hoping to hear from you about same in due course, we are, Yours, very truly, CUT GLASS MANUFACTURERS ASSOCIATION OF BROOKLYN, N. Y. By THOS. B. CAMPBELL, President. J. H. HERRFELDT, Secretary. STATEMENT OF G. P. ALTENBERG, PRESIDENT OF THE "ICY-HOT" BOTTLE CO., CINCINNATI, OHIO. The CHAIRMAN. Mr. Longworth, I believe you desired to have some one from Cincinnati make a brief statement ? Mr. LONGWORTH. Yes, Mr. Chairman. Mr. Altenberg of Cincin- nati desires to present something to the committee. The CHAIRMAN. We will hear from him at this time. Mr. ALTENBERG. If the committee please, I manufacture vacuum bottles, jars, and carafes, used for keeping food and drinks hot or cold. These are usually sold in their metal casings. Sometimes they are sold without the casing. This is an entirely new industry hi this country. It is less than five years old. The American output is now about 8600,000 a year. It is produced by five concerns, the largest of which is an offshoot of the largest German company. Ger- many still produces most of the vacuum bottles made in the world. Recently the German manufacturers solicited us to discontinue the manufacture in this country and offered to supply us with these bottles, read} 7 to put into their casings at 80 per cent of what it cost us to make them now. In other words, they would lay them down in Cincinnati, freight and duty paid, delivered to us at 80 per cent of our present actual cost. Mr. LOXGWORTH. To what paragraph are you addressing your- self '? Mr. ALTENBERG. Paragraph 98. German bottles in metal cases, which is the form in which they are usually sold, have recently been imported and laid down here, in- cluding the 60 per cent duty and freight, at a cost of 64 cents, while it cost me 80 cents to make the same article. Therefore, the impor- ter from Germany can to-day undersell us 20 per cent. Almost everything of value that enters into our cost is actual labor performed in our factory or some other factory working for us. I recently made an experiment to see whether we could compete with Germany manufacturers if we wont on the same basis they are on; so I imported the raw material from Germany, in order to get the benefit of the drawback when I reexported the goods. I have here a number of letters from our foreign customers informing us that our prices arc too high, even though we offered them the goods at the actual cost of production. Wo wanted to see how low we had to get in order to compete with Germany, using the German material on which we get the drawback and we actually offered these goods at the cost, just as an experiment, and we could not land the business. SCHEDULE B. 753 PARAGRAPHS 97-98 GLASS AND GLASSWARE. Heretofore, considerable confusion has been created in assessing the duty on these goods because, being a new line, they were not taken into consideration when the last tariff was framed; so that some of them have been coming in properly under paragraph 98. Mr. HILL. Is it a patented article ? Mr. ALTENBERG. The patents do not amount to anything. There are no patents on the principle, only on each individual manufac- turer's design. The proper classification would be paragraph 98, but we found where some people were bringing them in under para- graph 199, by claiming that the chief element of value was the metal casing, which was incorrect in both cases, and we brought it to the attention of the Treasury Department. The Treasury Department held, after considerable correspondence with me, that when this bottle is brought in without its metal con- tainer it should be entered under paragraph 98, and when the metal container is of less value than the bottle it should also come in under paragraph 98; but when they put that bottle into a fancy case they can bring it in at 45 per cent duty under paragraph 199 on the plea that the case is of greater value than the Dottle. On that account, I would respectfully suggest that in framing a new tariff act some provision be made for these bottles to prevent that confusion. Mr. HARRISON. Is it true the container is more valuable than the bottle ? Mr. ALTENBERG. Very seldom. In rare instances the container is a fancy, elaborate affair that is worth more than the bottle; but I should say in 90 per cent of the cases where the bottles are sold the bottle is of greater value than the container. But it has left a way open for fraud, and we pointed out several instances of fraud to the Government. On that account, I would suggest that some provision be made under this wording: Double-walled glass vessels, bottle, jar, and carafe shaped, either silvered or unsil- vered, or silvered and evacuated, dutiable at 60 per cent. That would cover the bottle either in a finished or partially finished state. I would also recommend that the same vessel, when contained or mounted in a container of metal or other material, be dutiable at the same rate. That would give us some measure of protection. As it stands now, these bottles when brought in at 60 per cent duty can undersell us about 20 per cent. But I am not afraid of that, "because we are on the ground, we can go after the business, we can send our salesmen around every two or three months to solicit the business and get it. But we could not fight foreign competition under any greater handi- cap than that. I want to show you just what this stuff costs. We have an offer from Germany, as 1 have said. I have the original offer in my pocket. This offer is to supply us with a pint size of bottle, ready for us to put into the container, at 18 cents in Germany. The freight and duty, ah 1 laid down in Cincinnati, would make that thing cost us about 30 78959 VOL 1 13 -IS 754 TARIFF HEARINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. cents or 32 cents all complete; possibly it might be 33 cents at the outside. It would not be over 33 cents, but it would probably be 32 cents. To make that bottle I have the blank from which we make the bottle, made in New Jersey, and I pay 10 cents for that laid down in Cincinnati. The silver and the actual cost of the labor, without a penny of overhead expense, cost us 20 cents. We use a great deal of gas in that work. We figure that the gas and power and super- vision and foremen and rent and insurance cost us 10 cents on that bottle. That makes the actual cost of production 40.5 cents in Cincinnati, while I can buy it laid down for 32 cents from Germany, taking the finished bottle as it goes to the customer, or as the con- sumer buys it. We recently found these bottles coming in at what we thought was undervaluation, and I brought it to the attention of the Treasury De- partment with the complaint that these goods were being undervalued, and after a long investigation the Treasury Department wrote to me at Cincinnati, under date of August 3, 1912, that the price at which these finished bottles, in metal containers, were entered for duty was the actual value in Germany. That price was 38.5 cents. That identical bottle cost me 40.5 cents to make, as I have shown you, for the bottle alone; the container and the overhead expenses on that part belonging to the container runs the cost up to 80 cents, without any selling cost. If thoy pay 38.5 cents in Germany and they pay 60 per cent duty on it and freight, it costs them 64 cents laid down in New York. Under those conditions we thought that 60 per cent, the present duty, is not excessive. We could not live at any lower rate of duty. I made the statement a moment ago that we have tried it to see how low we would have to go to get that foreign business. I have here a copy of a letter from the largest concern in Australia, Anthony Hordern & Sons (Ltd.), the concern which owns the largest depart- ment stores in Melbourne and Sydney, a concern capitalized at 5,000,000. Those people formerly bought our goods, and quit buy- ing them about a year and a half ago. Their letter is dated Sydney, November 25, 1912, and roads as follows: DEAR SIRS: Sample bottle advised in yours of 19th September to hand, and while of satisfactory manufacture it is so very much dearer than the German article that we could not entertain your proposal. That was a try-out. We did not want the business at that price but we wanted to see how low we would have to go to get business, and we figured on supplying this firm with the goods made with material imported from Germany, on which we could claim the drawback. Therefore our raw material in that instance would cost us the same as the German manufacturer. The only difference in cost would be the labor cost and the cost of doing business in this country. I will explain that. I am paying the cheapest glass blower that I have SI 5 a week. I am paving my best man $25 a week. I have to have a number of learners coming along. The cheapest of those receives 87 a week, and after they have been with us five or six months can do a littlw work and are then paid from $10 to $11 a week. It takes about two and one-half to three years to develop that man SCHEDULE B. 755 PARAGRAPHS 97-98 GLASS AND GLASSWARE. into a real glass blower, where he is worth $15 to $18 per week. Instead of using that kind of labor, the German manufacturers, who are located in small towns, use girls. These girls work 11 hours a day and receive from $4 to $6 a week, according to their scale. That is the chief reason why we can not compete. We can not use that kind of labor. In the first place, you could not get an American woman to go and do the work. You could not get an American woman to stand over a great, big hot flame, that is about that long [indicating], that roars like a cyclone all day, and work in that heat; but they can get them over there, and they get them cheap. That is what we have to compete with. Mr. LONGWOETH. About what proportion of your entire cost is labor cost ? Mr. ALTENBERG. I have shown here that out of the 40 cents, 20 cents is labor paid out in our factory, and 10 cents is what we pay for the blank. That glass blank is almost all labor, but we do not make that glass blank. It is made for us in New Jersey. That glass blank, if American made, is with high-priced labor. When we buy that blank from Germany, as we do in the export business, we pay 3.8 cents for it. Mr. LONGWORTH. Your actual factory cost is how much ? Mr. ALTENBERG. My actual labor cost is 20 cents out of the 40 cents. Mr. LONGWORTH. Fifty per cent ? Mr. ALTENBERG. Yes. Out of the 40 cents, I pay 20 cents in actual labor. Then I have some overhead expense to be added to that, which is not included in this 20 cents. That overhead includes my foreman and superintendence. I should say that is another 5 cents: so we would have, as a fair proposition, that my labor cost is 25 cents out of the 40 cents. Mr. HILL. What is the metal of the container? Of what metal is it made ? Mr. ALTENBERG. About half of the containers are made of sheet steel run through a lithographing process like these ornamental signs you saw. The other half of the containers are brass nickel plated. These brass containers, nickel plated, cost just about the same as the bottle. I will give it to you exactly. One of my brass nickel-plated containers that contains a 40-cent filler costs me 40 cents. The fancy containers cost me 42 cents. So you see if I use the simple brass container it is cheaper than the bottle, but if I use the fancy one it costs 5 per cent more than the glass lining. Mr. HARRISON. Have you ever made a careful calculation to ascer- tain how much more efficient your highly paid American workman is than those German girls ? Mr. ALTENBERG. I am very sorry to say that at the present time it is not in favor of our men. But that is not the fault of the men. It is due to the newness of the industry. You must remember these bottles have only been made in this country four and one-half years. The oldest man with me on that work has only been on it three years. Mr. HARRISON. Do you think you could go back to your factory and tell your American workmen that they are not as efficient as the German girls ? 756 TARIFF HEARINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. Mr. ALTENBERG. We have had German workmen over here to teach our American workmen, and our American workmen have not yet been able to produce in a day or in an hour the same quantity of work that our German teacher produced in the factory. We had three Germans. Two of them we had as teachers. One of those teachers produced each day 140 pieces, and he worked eight hours to do it. The most that any of the men he taught can produce up to the present time is 110 similar pieces in 10 hours. These men are getting a little faster each week. You must remember that the Germans I had had been at this business 15 years. These men that we have have only been able to do this work probably successfully a year. Up to that time they were just learning. I only got rid of my German teacher last March. Mr. HARRISON. I suppose the German teacher was a fair average of what the German girls can do ? Mr. ALTENBERG. I can only give you the word of the teacher. The teacher told me the girls produced the same as the men, and he said he left Germany because he would not compete with them. Mr. LONGWORTH. It only requires lung power, does it not ? Mr. ALTEXBERG. And a little endurance. I want to call your attention to another letter from Sydney, Aus- tralia, from the firm of Arthur Cocks & Co., dated Sydney, March 18, 1912: We are in receipt of yours of the 6th of January and thank you for your proposition with regard to the "Icy-Hot" products. We have gone into this matter and can not see our way clear to handle these goods, as by the time we got them here, with the heavy duty and expenses, the goods would be too expensive for us to do anything much with, as tha lines that are selling out here are of a similar nature, manufactured in Germany, and of course a much cheaper line. However, we thank you for your offer, and perhaps later on we may be able to do something in another direction. I have another letter here from Johannesburg, dated the 5th of February, 1912, from Mr. P. B. Findlay, reading as follows: 1 beg to own receipt of your favor of the 14th of December, and am obliged for your further offer to me to handle your goods as your agent. I have, however, definitely decided not to go further into this business, as I have found a very great difficulty in disposing of the small stock of samples I had from you before; have in fact several still on hand and will have to lose money to get rid of them at all. This is owing to the keen competition between the English and German houses, and I may add for your information that the German manufacturers have placed a cheap line on the market which they can afford to sell here at about the figure you ask for your product in the States. I have endeavored to obtain for you a decent house to take up your product, but have failed lor the reason given above. There is one other concern here from which I have a letter and with which I dealt for a great many years. They are located in Kingston, Jamaica. We made this same offer to these people that we made to the Australian people, and they being in a different quarter of the world, it shows you how the}* feel about it. This letter is from John M. Crosswell & Co., and is dated the 17th of July, 1912: We own receipt of your letter of the 21st ultimo, which only reached us a few days ago. contents of which meet with our attention. \Ye thank you for bringing to our notice and also observe your remarks with reference to the ayency we hold for your article. Our only regret has been that we have not been able to pass you more orders, but as we have written you from time to time, both German. English and other makes of bottles are coming here, and these cost consider- SCHEDULE B. 757 PARAGRAPHS 97-98 GLASS AND GLASSWARE. ably less than your article, hence our reason for not being able to compete with the other houses. Whilst we are willing, and have done everything in our power, yet conditions are such that we have been unable to prevent sales against your make, which, as already pointed out, costs much more over the English and other makes. That is the way we are up against it. There is only one other suggestion I have to bring to your notice, and that is this: These goods are made out of what we call "glass blanks." There has been more or less confusion as to what the rate of duty is which these glass blanks pay. We are not particularly interested hi that except in an indirect way. The glass blanks are at the present time dutiable at 60 per cent. But if there is any alteration in the tariff on these bottles which we make, we think the duty on the glass blanks ought to come down to at least compensate for it. It can not compensate much, because the price in Germany for glass blanks is only 3.8 cents, and that goes to make a 40-cent bottle; but still it amounts to something. Of course we are not importing stuff for our work at present. We are buying it in New Jersey. Gentlemen of the committee, I thank you. Mr. RAIXEY. How many men make these bottles here in this country ? Mr. ALTEXBEEG. There are now five concerns in the business. Mr. RAINEY. How many men are employed ? Mr. ALTEXBERG. Offhand, I should say 500 men and boys. I employ 50, but I am not the largest. The largest is the offshoot of the great German concern that practically dominates the markets of the world. Mr. HILL. Do they pay a royalty ? Mr. ALTEXBERG. They started to pay them a royalty, but I have heard, though I can not verify this, that they have since paid them a sum of money in settlement of that royalty to get rid of it. Mr. HILL. Can anybody go in the business now and manufacture these bottles ? Mr. ALTEXBERG. There are five in the business at the present time. Mr. HILL. Do they all pay a royalty ? Mr. ALTEXBERG. No; nobody pays a royalty except that one com- pany which was established here by the parent company in Germany as an Ameii-an I ranch, and then they took in American capital, and I do not know how it is run now. Americans are running it at the present time. They and the German company work very closely together, as I have found to my sorrow several times, because I was shut out twice from the purchase of material by the German com- panies pushing in and offering an order provided the people would not sell to me. Mr. RAIXEY. You think as your workmen become more skillful they can produce more bottles per day ? Mr. ALTEXBERG. I think so, after they become more skillful that they will be able to produce more, but we must not lose sight of the fact that the wage scale is three times as high per day. I do not think they will produce more than the Germans do, because I must say those people work very, very hard. Mr. RAIXEY. As they will become more skillful and produce more, then you will need less and less tariff ? 758 TARIFF HEARINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. Mr. ALTENBERG. In time, yes ; but as we are situated now, we have to pay from $15 to $25 a week to an operative who produces less than the German girl produces for $4 to $6. Mr. RAINEY. You say they are improving every week ? Mr. ALTENBERG. They are improving a little bit right along. You can form your own conclusion. It has taken me three years to bring them up to 100 pieces a day, while the German produces 140 pieces in 20 per cent less time. In other words, the German would produce in that same time somewhere about 170 pieces, while my operative produces 100 pieces. Mr. RAINEY. What proportion of the number of bottles consumed in this country do you suppose are imported ? Mr. ALTENBERG. That is a very-hard thing to get at. I have tried repeatedly to ascertain that fact. I find them in Cincinnati, I find them in Iowa, I find them in Kentucky and in New York and every- where ; but there are no statistics kept by the Government on vacuum bottles. I have no way to get at it. The only way we know it at all is from the traveling salesmen, when they write in from Iowa or Kansas or elsewhere, "I have lost an order because the party bought the German bottles on account of their being cheaper." We are getting that "song" a little too often now. For a while we did not care, because they only came in occasionally, but now it is a daily occurrence. I desire to file a short brief. The CHAIRMAN. You may file that with the clerk. BRIEF OF GEORGE P. ALTENBERG, PRESIDENT OF THE "Icy-HoT" BOTTLE Co., CINCINNATI, OHIO. In re tariff hearings, 1913, on Schedule B. Earthenware and glassware. Schedule C. Metals and manufactures of metals. Glass vacuum bottles, being one glass bottle on the inside of another with a vacuum between and silvered and either encased in a metal or other casing, or unencased, dutiable at 60 per cent under paragraph 98, and at 45 per cent under paragraph 99 of the present tariff act when the casing is of greater value than the glass. The Treasury Department has held that glass vacuum bottles, when not in their casing, are dutiable at GO per cent under paragraph 98 of the present tariff act, and when completed, as usually used, encased in a metal casing, then if the metal casing is the chief element of value, they are dutiable at 45 per cent under paragraph 199 and when the casing is of least value they are dutiable at 60 per cent under paragraph 98. Three elements of value enter into consideration: (1) The glass vacuum bottle itself (not encased). (2) The glass vacuum bottle when contained in an inexpensive metal container. (3) The glass vacuum bottle when in a nickel-plated container. When this bott le is in a cheap metal container, the glass is the chief element of value, and therefore is dutiable at 60 per cent. When ihis bottle is encased in a nickel-plated container, then the metal casing is the chief element of value, and therefore the completed article is dutiable at 45 per cent under paragraph 199. The blanks, or bottle-shaped containers of blown flint glass from which the glass vacuum bottle itself is made, are also dutiable under paragraph 98 at 60 per cent. Heretofore much confusion has arisen in assessing the duty on these goods, either in their completed or uncompleted state, and we therefore recommend that a special paragraph be allotted to glass vacuum bottles, jars and carafes, and that said paragraph should specify these articles in the following language: (a) Double- walled glass vessels, bottle, jar and carafe shaped, either silvered or unsilvered, or silvered and evacuated, dutiable at 60 per cent. (6) The same vessels when contained or mounted in a container of metal or other material, dutiable at 60 per cent. SCHEDULE B. 759 PARAGRAPHS 97-98 GLASS AND GLASSWARE. This is a new industry, having been started in this country about four and a half years ago, and the American production we estimate at about $600,000 per year. We have no means of judging the amount of imports at the present time. The estimate as to the domestic production is based on our own output and that of our competitors. Our reasons for suggesting that the tariff be maintained as now, at 60 per cent, and that it be made to cover the luxurious fancv bottles in nickel-plated cases as well as rresponds with 70 per cent of Ocean freight: 1.75 per cubic meter, 1 case=0.75 cubic meter, $1.31 per case of 16 dozen.... -- Marine insurance, customs entry, consular certificates, cent of 57. 12 cents expense in Hamburg, 8 per Cartage Total cost laid down in United States 123.56 Per dozen. RECAPITULATION. Cents. Per cent. Cost at factory 57.12 100 Duty 39 67 70 Ocean freight 8.20 15 Other expenses 18.57 35 123.56 220 768 TARIFF HEARINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. Fourtcen-inch opal dome shades. [Used for parlor or dining-room oil lamps. One case contains 4 dozen. 1 ) Per dozen. Marks. Cents. Price at the factory in the interior of Germany. Packing and case 3.85 1.40 Inland freight .' United States duty, 60 per cent on 126.04 cents, actually corresponds with 81 per cent ofcost of goods (92.44 cents) Ocean freight Marine insurance, customs entry, consular certificates, expenses in Hamburg, 8 per cent of 92. 44 Cartage 5.25 .63 Total cost laid down in United States. 92.44 33.60 126.04 15.00 75.60 44.00 7.36 6.00 274.00 RECAPITULATION. Cents. Per cent. Cost at factory. . Duty Ocean freight . . . Other expenses. 92.44 75.60 44.00 61.96 100 81 48 274.00 295 Flint-glass lantern globe, staple article with large consumption. Can not be im- ported under present tariff. Packed in cases of 12 dozen; gross weight, 100 kilos. German marks per dozen. 1 . Foreign cost at factory without packing 0. 48 2. Additional charge for packing 10 3. Additional charge for cases 25 4. Total dutiable value 83 5. United States duty, at 60 per cent .50 6. Inland freight from factory to Hamburg .17 7. Expenses at Hamburg .05 8. Ocean freight .48 9. Cost f . o. b. port of New York 2. 03 10. Less cost at factory as above .48 11. Difference, or cost of transportation and duty 1. 55 12. This difference expressed as percentage of foreign cost at factory, showing actual protection afforded domestic producer 320 RECAPITULATION. Cents. Per cent. Cost at factory 0. 48 100 Duty .50 104 Ocean freight .48 100 Other expenses .57 119 2.03 423 SCHEDULE B. 769 PABAGBAPHS 97-98 GLASS AND GLASSWABE. The exhibits of clear pressed-glass globes for gas and electric light having large con- sumption in United States, of pressed-glass candlesticks, of blown-glass electric globes, crystal, frosted inside, and of pressed-glass bpbeches, can not be imported under present tariff, and can be purchased from domestic producers at prices cheaper than those obtainable in foreign markets, irrespective of duty and other expenses attending importation to this country. Duty prohibitive. Exhibit of 3 by 6 crystal ball globe, frosted inside, used extensively in all sizes for electric lighting. Can not be imported under present tariff. Packed in cases of 10 dozen, gross weight 128 kilos. German marks per dozen. 1. Foreign cost at factory without packing L 92 2. Additional charge for packing 12 3. Additional charge for cases 30 4. Total dutiable value 2. 34 5. United States duty, at 60 per cent 1. 40 6. Inland freight from factory to Hamburg 26 7. Expenses at Hamburg 08 8. Ocean freight 73 9. Cost f. o. b. port of New York 4. 81 10. Less cost at factory as above 1. 92 11. Difference, or cost of transportation and duty 2. 89 12. This difference expressed as percentage of foreign cost at factory, showing actual protection afforded domestic producer per cent. . 150 RECAPITULATION. Marks. Percent. Cost at factory . Duty Ocean freight... Other expenses . 1.92 1.40 .73 .76 100 73 38 39 Cost in United States. 4.81 250 Duty prohibitive. Exhibit of ruby.glass lantern globe for standard tubular hand lantern. Staple article, with large consumption. Importation limited under present tariff. Packed in cases of 12 dozen; gross weight, 100 kilos. German marks per dozen. 1. Foreign cost at factory without packing 1. 96 2. Additional charge for packing 12 3. Additional charge for cases .25 4. Total dutiable value 2. 33 5. United States duty, at 60 per cent 1. 40 6. Inland freight from factory to Hamburg 17 7. Expenses at Hamburg 05 8. Ocean freight '. 48 9. Cost f. o. b. port of New York 4. 43 10. Less cost at factory, as above 1. 96 11. Difference, or cost of transportation and duty 2. 47 12. This difference expressed as percentage of foreign cost at factory, showing actual protection afforded domestic producer per cent. . 126 78959 VOL 113 49 770 TARIFF HEAEINGS. PABAGBAPHS 97-98 GLASS AND GLASSWABE. RECAPITULATION. Marks. Per cent. Cost at factory. . Duty Ocean freight... Other expenses. 1.96 1.40 .48 .59 100 73 25 30 4.43 228 Duty unprohibitive. Exhibit of 2^-inch electric globe, blown glass, with deep-etched design. Staple article with large consumption. Importation limited under present tariff. Packed in cases of 10 dozen, gross weight 122 kilos. German marks per dozen. 1. Foreign cost at factory without packing 4. 94 2. Additional charge for packing 12 3. Additional charge for cases 30 4. Total dutiable value 5. 36 5. United States duty, at 60 per cent 3. 22 6. Inland freight from factory to Hamburg 24 7. Expenses at Hamburg 08 8. Ocean freight j .70 9. Cost f. o. b. port of New York 9. 60 10. Less cost at factory as above 4. 94 11. Difference, or cost of transportation and duty 4. 66 12. This difference expressed as percentage of foreign cost at factory, showing actual protection afforded domestic producer per cent. . 94 RECAPITULATION. Marks. Per cent. Cost at factory 4. 94 100 Duty " 3. 22 65 Ocean freight .70 14 Other expenses .74 15 9.60 194 Duty unprohibitive. Exhibit of 4-inch pas globe, blown glass, with light etched or sand-blast design. Staple article of large consumption. Importation limited under present tariff. Packed in cases of 10 dozen each; gross weight, 110 kilos. German marks per dozen. 1 . Foreign cost at factory without packing 2. 61 2. Additional charge for packing 12 3. Additional charge for cases.." .30 Total dutiable value 3. 03 United States duty, at 60 per cent 1. 82 Inland freight from factory to Hamburg 22 Expenses at Hamburg 07 Ocean freight. . .63 11. Difference, or cost of transportation and duty 3. 16 12. This difference expressed as percentage of foreign cost at factory, showing actual protection afforded domestic producer per cent. . 120 SCHEDULE B. 771 PARAGBAPHS 97-98 GLASS AND GLASSWARE. RECAPITULATION. Marks. Percent Cost at factory 2.61 100 Duty 1.82 70 .63 24 .71 27 5.77 221 Importation limited. Exhibit of 2J-inch electric globe, blown glass, with light etched or sandblast design. Staple article, consumed in large quantities. Importation limited under present tariff. Packed in cases of 12 dozen with gross weight of 90 kilos. German marks per dozen. 1. Foreign cost at factory without packing 2. 00 2. Additional charge for packing 10 3. Additional charge for cases 25 4. Total dutiable value 2.35 5. United States duty, at 60 per cent 1. 41 6. Inland freight from factory to Hamburg 15 7. Expenses at Hamburg 05 8. Ocean freight .43 9. Costf. o. b. port of New York 4.39 10. Less cost at factory as above 2. 00 11. Difference, or cost of transportation and duty 2. 39 12. This difference expressed as percentage of foreign cost at factory, showing actual protection afforded domestic producer per cent. . 120 Importation limited. RECAPITULATION. Marks. Percent. Cost at factory ... 2.00 100 Duty 1.41 71 Ocean freight .43 22 Other expenses .55 28 4.39 221 Exhibit of blown glass globes for inverted gas burners, upper half frosted. Staple article with large consumption. Can not be imported under present tariff. Packed in cases of 18 dozen; gross weight, 155 kilos. German marks per dozen. 1. Foreign cost at factory without packing 0. 88 2. Additional charge for packing 10 3. Additional charge for cases 16 4. Total dutiable value 1. 14 5. United States duty at 60 per cent 68 6. Inland freight from factory to Hamburg 16 7. Expenses at Hamburg 05 8 . Ocean freight 7 46 9. Cost f. o. b. port of New York 2. 49 10. Less cost at factory as above 88 11. Difference, or cost of transportation and duty 1. 61 12. This difference expressed as percentage of foreign cost at factory, showing actual protection afforded domestic producer per cent. . 183 Duty prohibitive. 772 TARIFF HEARINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. RECAPITULATION. Marks. Per cent. Cost at factory . 0.88 100 Duty .68 77 Ocean freight . .46 52 Other expenses .47 52 2.49 281 Shipment of 11 cases of glass bowls. Value in marks. Value in dollars. 396 pieces at 1.25 marks per piece 495 88 117.80 20.95 83.25 15.47 3.72 33.80 2.50 3.30 Cost of case and packing*. . . T Duty at the rate of 60 per cent on $138.75 Freight from factory to Hamburg, 2,600 kilos at 2.50 marks per 100 kilos 65 Hamburg forwarding charges, 2,600 kilos at 60 pfennig * Ocean freight, 13 cubic meters at $2.60 per cubic meter Customs entry Cartage, 11 cases at 30 cents Total cost laid down in United States 280.79 RESUME. Amount. Per cent. Value of goods at factory $117.80 100 Duty . . . 83.25 70 Other charges 79.74 67 280.79 237 Duty prohibitive. Shipment of S% cases of glass globes, S dozen to case. Value in marks. Value in dollars. 281.28 66.95 Case and packing 32 cases, at 5 marks per piece . .... 160.00 38.08 Dutv on $105.03, at 60 per cent 63.01 Freight from factorv to Hamburg, 3,250 kilos, at 2 marks per 100 kilos 38.72 9.20 Hamburg forwarding charges, 3,250 kilos, at 60 pfennig per 100 kilos . 20.15 4.80 Ocean freight, 33J cubic meters, at $2.60 per cubic meter 87.10 Customs entry 2.50 9.60 Total cost laid down in United States 281.24 RESUME. Amount. Per cent. Value of goods at factory $66. 95 100 Duty 63.01 93J O ther charges 151.28 236 281.24 429J Duty prohibitive. SCHEDULE B. 773 PARAGRAPHS 97-98 GLASS AND GLASSWARE. One case common ordinary table goblets. The following schedule shows the factory selling price to the importer of a goblet and the percentage of duty and the percentage of the cost to land at seaport: Naked goods, Fc. 38.85 $7. 55 Package, Fc. 6.75 1. 30 Freight from factory to seaport, Fc. 3 60 9.45 Expenses at seaport (about 5 per cent) 47 Ocean freight 1. 25 11.17 Duty on goods $7. 55 Duty on package 1. 30 Additional duty to make market value 3. 17 12.02 Less inland freight 60 11.42 At 60 per cent 6.85 Actual cost of goods, including duty and freight 18. 02 The actual duty paid on naked goods, which is $7.55, is 90 per cent. The percentage of expenses on the actual cost of naked goods to land in America is 140 per cent on the cost of the naked article. RECAPITULATION. Amount. Per cent. Cost of goods at factory. Duty Other expenses $7.55 6.85 3.62 100 90 50 18.02 240 One case of 50 dozen water tumblers, 9-ounce, melted edge. Coat price at the factory per dozen heller $0. 75 Kronen 37. 50 Case 6. 00 Kronen... . 43.50 At $20.3 8. 85 60 per cent duty 5. 31 Inland freight 1. 30 Ocean freight 1. 50 Insurance and entry charges 30 Dollars 17.26 RECAPITULATION . Percentage of duty on actual cost of goods at the factory, 70 per cent. Cost price per dozen, 34 cents. Market price to-day, from 25 to 30 cents per dozen. 774 TAEIFP HEARINGS. PARAGRAPHS 97-98 GLASS AND GLASSWARE. One case of 100 dozen S-ounce cut fluted whisky tumblers, melted edge. Cost price at the factory, per dozen heller. . Kronen 96. 00 Case... 6.50 Kronen.. . 102.50 At $20.30 20. 81 60 per cent duty 12. 49 Inland freight 1. 75 Ocean freight 2. 25 Insurance and entry charges 50 Dollars 37. 80 RECAPITULATION. Percentage of duty on actual cost of goods at the factory, 64 per cent. Cost price per dozen, 37.8 cents. Market price to-day, 36 cents per dozen. One case of 100 dozen 5-ounce champagne tumblers, melted edge. Cost price at the factory, per dozen heller. . 66 Kronen 66. 00 Case... 7.00 Kronen.. . 73.00 At $20.30 14. 82 60 per cent duty 8. 90 Inland freight 2. 25 Ocean freight 2. 75 Insurance and entry charges 40 Dollars 29.12 RECAPITULATION. Percentage of duty on actual cost of goods at the factory, 66J per cent. Cost price per dozen, 29 cents. Market price to-day, from 22 to 25 cents per dozen. Common water bottle with plain cut fluted neck. Per cent. Duty 60 Duty on case and packing 6. 25 Cost of case and packing 10. 50 Ocean freight 12 Consular fee, customhouse entry, cartage, inland freight to Antwerp, and in- eurance... 5 Charges above naked foreign coat 93. 75 Foreign cost per dozen $1. 958 Expense to import, 93.75 per cent 1. 835 Cost per dozen landed in United States 3. 793 SCHEDULE B. 775 PARAGRAPHS 97-98 GLASS AND GLASSWARE. Glass jug (used by cutters in the United States for manufacture of rich cut glass). Per cent. Duty 60 Duty on cask and packing 3. 10 Cost of cask and packing 5. 30 Ocean freight 10 Consular fee, customhouse entry, cartage, inland freight, and insurance . 5 Charges above naked foreign cost 83. 40 Foreign cost of goods per dozen $7. 197 Expense to import, 83.40 per cent 6. 004 Cost per dozen landed in United States 13. 201 LAMP SHADES AND CHIMNEYS. NEW YORK, January S. 191S. Hon. OSCAR UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: The following matter, while directly germane to the glass lamp shades and chimney schedules, affects practically every other schedule. The freight rates from European ports are controlled and arbitrarily fixed by a combination and pooling agreement between the trans-Atlantic steamship lines, of which pool the Hamburg American Line is the dominating factor. Meetings of the ool members and their decisions fixing rates are freely published in the foreign press, he existence of the pool is not only a matter of common notoriety, but is the basis of suits now being prosecuted by the Government, after due investigation, seeking a dissolution of the pool and an injunction against its oppressive practices. As an illustration of the arbitrary power of the members of this combination affect- ing American merchants, I desire to call to the attention of your committee the treat- ment just meted out to my clients, M. Kirchberger & Co., for 22 years one of the largest importers of lamp shades and chimneys, at whose instance I am communicat- ing with you. Every such importer secures what are called special rates, very much lower than the so-called regular freight tariff, by entering into a yearly contract to ship all his freight by one line, or by such substituted lines as the carrier shall designate. The 1912 contracts expired with the end of the year. M. Kirchberger & Co.'s contract was with the Hamburg American Line, which controls all shipments out of Hamburg, the only port available to the shippers of these goods. On October 11, 1912, this firm was notified by cable that "Pool rates next year 25 cents cubic meter higher." Mr. Kirchberger, exasperated by this last of a series of advances since the formation of the pool, and realizing the helplessness of American merchants, ventured to write to the press a protest at this increase of 16f per cent over existing rates on a commodity which enters the poorest household, the advance representing from 25 to 30 per cent of the foreign value of the commodity and neces- sarily increasing the price to the consumer, as in the case of duties. The point of Mr. Kirchberger' s letter was, as stated by him, that: "They (the steamship lines) are not subjected to any control like our railroads, and can dictate simply the amount of trib- ute that the consumer should pay them. Care must therefore be taken that the reduction of the tariff, which we apparently are going to get at last, does not widen this limit, and that simultaneously with a reduction of duties, this octopus be dealt with in a manner that will prevent it from cheating the public by absorbing the bene- fit of a reduction in duties for its own gain . ' ' For his temerity in exercising the Amer- ican right of free speech and calling public attention to an evil, Mr. Kirchberger was promptly notified by cable that unless he retracted and expressed his regret for hia criticism the Hamburg- American line would make no contract whatever with him, even at the advanced rate for the ensuing year, but that he would be compelled to pay $1 a cubic meter more than his competitors for future shipments. Such a discrimination is, of course, sufficient to put any firm out of business. Guided by this experience, which is fairly typical of conditions now obtaining in our foreign trade, it is earnestly urged that in making tariff reductions your com- mittee couple the reductions with some effective regulation, calculated to give the 776 TABIFP HEABINGS. PAR A GRAPHS 97-98 GLASS AND GLASSWARE. consumer the benefit of the reductions instead of giving the benefit to the foreign steamship pool. Such a regulation might be one providing that the reductions should not affect importations from any country, freight rates from the ports of which are controlled and fixed by agreement between steamship companies engaged in transportation between the ports of such country and ports in the United States. If possible, I should like to be heard briefly on this subject before your committee on January 6, when the hearing on this schedule comes up, or at such other time as may be fixed. With great respect, I am, Yours, very truly, CLARENCE J. SHEARN. STATEMENT REGARDING HOLLOW GLASSWARE. NEW YORK, December 24, 1912. Hon. OSCAR UNDERWOOD, Washington, D. C. DEAR SIR: I beg to call your attention to hollow glassware, such as shades and chimneys, which were dutiable under the McKinley bill at 45 per cent ad valorem, cases and packing free. Since then a powerful syndicate of high protectionists caused the passage of a bill, advancing the duty to 60 per cent ad valorem, including the cost of cases and packing, so that we pay 75 to 80 per cent duty on the glass, as the cases and packing are worthless after unpacking. We are even forced to pay full duty on breakage, so that a case with 50 per cent breakage, such as occurs not infrequently, cost us 125 per cent duty. On many articles which I import I have to raise my invoice 2 J to 5 per cent, because the examiner and the appraisers claim that other importers of smaller quantities have paid more for the same article, and make no allowance for quantities or better buying ability. You and your colleagues will readily see that a revision of the tariff on shades and chimneys and other glassware is warranted and equitable. Forty-five per cent duty on the naked glassware is surely an adequate protection for this industry. On the 1st of January, 1912, ocean freight rates are being advanced 20 per cent, thus giving the American manufacturers still further protection. Sincerely hoping that you will give this matter your consideration, I remain, Respectfully, yours, OSCAR O. FRIEDLAENDER, MEMORIAL FROM GLASSWORKERS' UNION, PHILADELPHIA, PA. HEADQUARTERS LOCAL UNION No. 99, A. F. G. W. U., Philadelphia, Pa., January 27, 191S. Hon. OSCAR W. UNDERWOOD, House of Representatives, Washington, D. C. HONORABLE SIR: Our attention has been called to the fact that the Ways and Means Committee is now considering a revision of the tariff laws on imported glasswares, and has the subject under consideration known as paragraph B, schedule 98. We most respectfully call your attention to the fact that a reduced tariff means reduced wages to our members and other sacrifices such as were experienced under the Wilson tariff law. We therefore beseech you and your committee to not make any reduction on the present tariff rates on imported glasswares, as the present tariff rates do not afford sufficient protection to the American workman, as considerable glassware is now being imported notwithstanding the extraordinary keen competition prevailing in the glass markets of our country. There is no monopoly on glasswares in the American trade, and no organization among the flint-glass manufacturers. All are free to sell as they please and prices are very low. There will be no relief afforded to the citizens of our country if the tariff rates are reduced, as it will only intensify the present deplorable state of affairs. Therefore we most respectfully protest against any reduction in the tariff rates, and we trust you will art favorably on our appeal. Sincerely, yours, JAMES P. McExTEE, Secretary. SCHEDULE B. 777 PARAGRAPH 99 WINDOW GLASS. PARAGRAPH 99. Unpolished, cylinder, crown, and common window glass, not exceeding one hundred and fifty square inches, valued at not more than one and one- half cents per pound, one and one-fourth cents per pound; valued at more than one and one-half cents per ppund, one and three-eighths cents per pound; above that, and not exceeding three hundred and eighty-four square inches, valued at not more than one and three-fourths cents per pound, one and three- fourths cents per pound; valued at more than one and three-fourths cents per pound, one and seven-eighths cents per pound; above that, and not exceeding seven hundred and twenty square inches, valued at not more than two and one-eighth cents per pound, two and one-fourth cents per pound; valued at more than two and one-eighth cents per pound, two and three-eighths cents per pound; above that, and not exceeding eight hundred and sixty- four square inches, two and three-fourths cents per pound; above that, and not exceeding one thousand two hundred square inches, three and one- fourth cents per pound; above that, and not exceeding two thousand four hundred square inches, three and three-fourths cents per pound; above that, four and one-fourth cents per pound: Provided, That unpolished cylin- der, crown, and common window glass, imported in boxes, shall contain fifty square feet, as nearly as sizes will permit, and the duty shall be com- puted thereon according to the actual weight of glass. WINDOW GLASS. STATEMENT OF J. R. JOHNSTON, PEESIDENT OF THE JOHNSTON GLASS CO., HARTFORD CITY, IND. Mr. JOHNSTON. Mr. Chairman and gentlemen of the committee, since coming here I find there are three representatives of the window- glass industry, who have prepared arguments that contain very much that I contemplated saying. Therefore I am going to surrender my time and submit a brief in behalf of my company. It has been sug- gested by these three gentlemen, Messrs. Hilton, Neenan, and Stone, that if 15 minutes were added to my allotted time, the window-glass industry could be disposed of to-day. The CHAIRMAN. We will have to get through with the witnesses that are here, but if we can get through with them to-day we will try to accommodate them. Your brief will be inserted at this point. BRIEF or J. R. JOHNSTON, PRESIDENT JOHNSTON GLASS Co. JANUARY 8, 1913. To COMMITTEE ON WAYS AND MEANS, Washington, D. C. MR. CHAIRMAN AND GENTLEMEN: The continuance of manufacturing window glass in the United States by hand methods depends upon the retention of sufficient tariff to keep foreign glass out of our market. The removal or any large reduction in the tariff would admit Belgian glass in such quantities that it would force the closing of our plants in a very short time. I have been engaged in the manufacture of window glass since 1890 and have found the business exceedingly erratic, caused by various changes in methods, ruinous competition at times bet.veen manufacturers, labor troubles, and overproduction. Some of the opponents of a protective tariff have stated that the business has not prospered, even though protected; and while this to a certain extent is true, the manu- facturing of window glass would have ceased long ago in the United States had this protection been removed. It has been the history of the business that years showing losses have been freely intermingled with those showing profits, and it is a fact that not a single rich man can be named in the window-glass business who accumulated his means through the manu facture of glass. 75262 B 13 21 778 TARIFF HEARINGS. PARAGRAPH 99 WINDOW GLASS. In the earlier days 10 months was considered the operating period, and for several years factories operated for that length of time; but the production grew so rapidly that when the output was at its height there was a total of 4,000 pots in the country that could manufacture window glass, and with this increased output the period for operating the factories gradually worked into fewer months, until now eight months is considered a long period of operation, and more frequently our plants operate seven months. To-day less than 1,400 hand-operated pots are in blast, and 20 modern plants are idle and 20 other factories of more or less modern construction are not operating. Natural gas has played a very important part in building up the industry. It is an ideal fuel for making window glass, but it can scarcely be said to have been of very much financial gain to those who have invested their money in the business. When a gas field has been discovered promoters, land companies, and commercial clubs have offered extraordinary inducements to establish window-glass factories because of the attractive pay roll, and in many cases gas was furnished free of charge or else at an exceedingly low rate, which price was many times below the cost of artificial fuel. When the gas in any certain field would fail, the factories were either aban- doned or moved to some newly-discovered field. This can be shown by the list of factories attached, which is made from a directory of 1898. There isn't a single factory in this list, that is operated by hand, in the location named at that time, and about 90 per cent of them have been dismantled and gone out of business. The principal cost in making window glass is in labor, about 60 per cent, and any further reductions in American costs would have to come from that source; and with glassworkers employed on an average of seven months a year, there is no room for economy in that direction. The other important costs are fuel and lumber, both of which are continually advancing and are likely to show further increases from year to year. In this country about two-thirds of the glass used is in single strength, and from 50 to 60 per cent of this single strength is in the first three brackets, which means sizes 16 by 24 and smaller. These sizes especially need an increased tariff, for the reason that in Belgium the percentage of first three bracket sizes consumed is only about 20 per cent, which leaves that country with a surplus of small glass that they are only too anxious to distribute in the United States and other world's markets. Under the present tariff schedule the margin of profit on first two bracket sizes in single strength is practically nothing, and American manufacturers make and sell at least 1,000,000 boxes of small glass at an actual loss. On this small glass we should have increased protection. The amount of tariff on these sizes should not be less than 2 cents per pound. Personally I would be willing to leave the arrangement of the tariff schedule to any fair-minded committee that would investigate foreign costs and base the protection on the difference between labor in Belgium, skilled and unskilled, as compared with wages for similar workmen in the United States, adding what any business man would consider a reasonable profit on the investment. The differences in wages in Belgium as compared with wages paid in the United States is one of the strongest arguments why no lowering of the tariff should be consid- ered. Common labor in Belgian window-glass factories receives 60 cents per day as against our men at $2 per day. In the skilled trades the same relative difference applies. In the Belgian factories are employed many women, and girls are employed at wages much lower than are paid their own men. These Belgian factories operate continu- ously, viz, 24 hours daily and 7 days in the week. Comparative figures show that for every $35 paid by foreign manufacturers as win- dow-glass labor, we manufacturers in this country pay $100 for the same service. The estimated consumption of window glass in this country is between seven and seven and one-half million boxes. The returns for all of the glass manufactured in the United States to the manufacturers does not exceed $15,000,000. Therefore, as compared with the great industrial world, it is insignificant, as innumerable busi- ness houses conducting small establishments do this much business annually. Attached is statement showing the annual imports for the last 25 years. We have never been able to dispose of any of our goods outside of our own country, as we are met with Belgian competition in Canada, Central America, South America, and Mexico, which would mean a serious loss to us if we met the selling price of our competitors in these countries. Therefore, our sales are confined to our own terri- tory and we hope that we will not be disturbed in marketing our goods at home. The price of glass is not high, and the percentage of cost in construction is trifling. Belgian manufacturers handle their business through syndicates which are en- couraged and supported by their Government. Therefore, if we remove the tariff on SCHEDULE B. 779 PARAGRAPH 99 WINDOW GLASS. window glass we will not only abandon glass making to the foreign laborer and manu- facturer but we will be buying our glass from one of these trusts which are so strongly condemned at home. I attach two estimates herewith showing the cost of glass in two dwelling houses, which, at the price the retailer obtains for this glass, is only 1 per cent of the total cost of the buildings. Window glass is the cheapest form of construction and can not be duplicated in cost by using any other material. It is far cheaper than wood, stone, brick, steel, etc., per square foot. When noting the amount of window glass being used it can not be said that prices are high and that the consumer is paying more than a normal price for our product. We hear of no complaints on prices, or tariff, excepting from a few importers whose selfish commercial interests cause them to lose sight of American laborers and the owners of plants who contribute no small part to the building up and support of our country. Not only does foreign labor make the retention of present tariff imperative, but the low ocean transportation charges work to our tremendous disadvantage. The rates from Belgium to Pacific coast points are about one-third of our freight charges on rail shipments from pur factories to the Pacific coast. About one-tenth of our product is used on the Pacific coast. In conclusion, will say that I firmly believe that if the tariff on window glass is removed or lowered the industry will be destroyed. The glass workers will be com- pelled to work for impossible wages until such time as they finally abandon their trades, and the factories we own will drift into the junk heap. Respectfully submitted. J. R. JOHNSTON, President Johnston Glass Co., Hartford City, Ind. GLASS IMPORTS AND EXPORTS. The following tables are interesting as showing the amount of American money which has gone to foreign countries during the past 25 years in exchange for glass and glassware and the amount of foreign money which has been expended for our products during a corresponding period. The tables presented do not include all of the foreign glass which reaches our shores, plates or disks, rough cut or unwrought, for optical instruments, which come in free of duty, being an exception, and for this class of goods alone there was imported during the fiscal year ending with June 30, 1912, $383,234 worth, our total expenditure for foreign glass during the 12 months ending with June 30 of this year having been $6,210,625, while the value of our expor- tations during a corresponding period was $3,494,153. The record of window-glass importations for 25 years is as follows: Year. Boxes. Value. Year. Boxes. Value. 1888... 1,184,219 $1, 389, 928 1901 470, 610 $922, 690 1889. 1 249,576 1,425,515 1902 950 196 1 797,681 1890. . . 1,193,954 1,430,777 1903 1 059,790 1, 762, 767 1891. . . . 982, 212 1,475 338 1904 855 682 1 381,104 1892 1,112,000 1,549,707 1905 297, 662 627, 618 1893 . 1 045 961 1 425 551 1906 570 833 1 306 723 1894 888, 332 1, 067, 787 1907 530 166 1,037,770 1895 663,081 835, 730 1903 424,239 824, 616 1896 886, 372 1,067,990 1909 389, 493 760,164 1897 932, 697 1, 181, 696 1910 450, 078 810, 915 1898 648, 483 953, 116 1911 520,832 948, 959 1899 786, 494 1,275,185 1912 413, 478 950, 123 1900 855.723 1,655,926 780 TAKIPF HEAEINGS. PARAGRAPH 99 WINDOW GLASS. The following statement shows the amount in boxes and pounds, and the value of cylinder, crown, and common window glass, unpolished, imported during July, 1912, at the ports of entry designated: District. Pounds. Boxes. Value. District. Pounds. Boxes. Value. Baltimore 13,000 217 $394 Cuyahoga 30 992 517 $961 Boston 100, 312 1, 672 3, 627 Genesce . ... 820, 352 13 673 34 114 New York 469, 589 7, 826 19, 666 fHnninnftti 1 897 31 41 Philadelphia 156,923 2,615 5,271 Denver 205 3 82 Porto Rico 722 2 21 Tnriiftnupolis 28 184 470 812 Galveston 23,307 388 692 Lincoln . . 2,080 35 89 Portland 9,464 158 286 St. Louis 340 342 5 672 14 249 Buffalo 31 799 530 1 824 Chicago 157^247 2,621 ; 5,489 Total 2, 186, 415 36,440 87, 618 The following statement shows the amount in boxes and pounds and the value of cylinder, crown, and common window glass, unpolished, imported during August, 1912, at the ports of entry designated: District. Pounds. Boxes. Value. District. Pounds. Boxes. Value. Baltimore 24, 216 403 $901 Genesee 364, 311 6,071 $14, 937 Boston 75,034 1,250 1,697 Columbus 11 6 New York 705, 683 11,761 29,839 Denver 57 231 Philadelphia. 37,966 632 2,189 Lincoln.... 27,040 450 1,082 New Orleans. 16,800 280 179 Omaha . ... 35,204 586 1,414 Los Angeles . . 41,872 698 1,186 St. Louis 253,805 4,230 10,583 32 656 544 944 San Francisco 72, 384 1,206 2,222 Total 1, 762, 055 29,361 72, 698 Chicago 75,016 1,250 5,288 In the above table it will be observed that Columbus is credited with taking 11 pounds, the value being $6, while Denver imported 57 pounds, at a reported cost of $231. That strikes us as being sort of funny, but it is the showing made in the Govern- ment's official record. The following statement shows the amount of boxes and pounds and the value of cylinder, crown, and common window glass, unpolished, imported during September, 1912, at the ports of entry designated: District. Pounds. Boxes. Value. District. Pounds. Boxes. Value. Baltimore 12,914 215 $396 708 695 11 812 $30 579 Boston 104.025 1,734 3,078 Milwaukee 57,200 953 1 894 New York 352, &3S 5.877 16, 744 Minnesota 27, 328 455 1,241 Philadelphia . 99, 183 1,653 3,788 Columbus 279 5 87 New Orleans. 80,800 1,347 2,919 Denver 29,955 495 1,237 Los Angeles. . Puget Sound. 14, 868 11,624 248 194 523 346 Kansas City Memphis 30,415 694 507 12 1,229 63 San Francisco 20,608 343 1,131 St. Louis 147, 764 2,463 5,958 Buffalo 2 003 33 481 Chicago IS"! 078 3,118 6,108 Total 1, 917, 555 31, 959 78, 717 Cuyahoga 29,484 491 915 SCHEDULE B. 781 PARAGRAPH 99 WINDOW GLASS. t The following statement shows the amount of boxes and pounds and the value of cylinder, crown, and common window glass, unpolished, imported during October, 1912, at the ports of entry designated: Districts. Pounds. Boxes. Value. Districts. l Pounds. Boxes. Value. Baltimore 10,046 167 9236 Chicago 81,253 1,354 $3,351 Boston and Cuyahoga. ....... 75 2 74 Charleston. ..... 112,308 1,871 5,112 Genesee 721,499 12.024 28,722 New York 900,682 15,012 30,484 Miami 33,532 558 1.219 Philadelphia . . 145,970 2,432 6,571 Superior.. ....... 140 3 21 New Orleans.. 13,887 231 424 Cincinnati. ....... 72,930 1,215 1,896 Alaska 25 1 7 Pittsburgh . . 2,058 33 356 Los Angeles 62,000 1,033 1,932 St. Louis 590,823 9,847 23,397 9 800 163 295 Buffalo Creek.. 29^325 485 957 Total 2,786,353 46,431 105,054 Glass in house of No. 2 Johnston' s first addition. B single. A double. 10 lights, 24 by 28... 27.27 46.14 18 lights, 24 by 26 69.75 117.00 2 lights, 22 by 40 8.44 14.00 1 light, 23 by 40 4.22 7.00 2 lights, 8 by 28 1.75 2.85 111.43 186.99 Jobbers' list: B single, at 90-20-8. 91-.011 of cost of house, $800; A double, at 90-25-14. 02-.0165 of cost of house, $800. Above glass figured from manufacturers' list: B single, at 90-17^-6. 89-.0086 of coat of house, $800; A double, at 90-22J-10.86-.0125 of cost of house, $800. Glass in residence of J. R. Johnston. 16 lights, 14 by 22 A. D. S $25. 54 2 lights, 14 by 22 3. 96 1 light, 14 by 26 2. 28 4 lights, 14 by 30 11. 65 6 lights, 16 by 26 17. 47 2 lights, 20 by 20 5. 50 4 lights, 20 by 27 15. 23 2 lights, 20 by 41 12. 44 2 lights, 21 by 22 6. 60 2 lights, 22 by 22 6. 60 2 lights, 22 by 24 7. 08 2 lights, 22 by 26 7. 61 2 lights, 22 by 28 8. 25 6 lights, 22 by 32 30. 46 2 lights, 22 by 41 14. 00 6 lights, 24 by 30 30. 46 Jobbers' list, at 90-25-46. 73-.0058 of cost of house, $8.000. 8 lights, 24 by 32 $46. 22 2 lights, 25 by 41 16. 00 2 lights, 26 by 28 10. 40 8 lights, 26 by 32 46. 22 4 lights, 26 by 30 23.11 1 light, 26 by 41 8.00 2 lights, 30 by 36 16.00 4 lights, 30 by 41 41. 00 6 lights, 30 by 32 42. 00 1 light, 31 by 61 17. 00 1 light, 32 by 32 32.00 1 light, 44 by 66 42. 90 1 light, 56 by 66 77.14 Total.. . 623.12 782 TABLFF HEARINGS. PARAGRAPH 99 WINDOW GLASS. Window-glas* factories in operation in 1898. WESTERN DISTRICT. Firm name. Furnaces or tanks. Pots or blowers. Location. Remarks. Alexandria Window Glass 1 furnace.... 10 pots Aifi^andrift, Tnd. . , , Dismantled. Co. American Window Glass 1 taut. .. 54 blowers . Gas City Ind Do. Co. Anderson Glass Co 4 furnaces... 40 pots Anderson, Ind... Do. Bellefonte Glass Co. . 1 furnace... Spots Bellefonte, Pa Do. Brickner Window Glass Co. 2 furnaces 12 pots Sweetser, Ind , Do. Barnesville Glass Co do... 18 pots. . Barnesville, Ohio.. Do. Bates Window Glass Co . .do 12 pots Dunkirk, Ind Do. Baur Window Glass Co 1 tank 24 blowers.. Eaton, Ind Idle. Bradford Glass Co do do Bradford, Pa Removed to Clarks- B. N. McCoy Glass Co 2 tanks. ... 60 blowers... Kane, Pa burg. American Window Big Four Window Glass Co 2 furnaces . . 12pots... . Fairmont, W. Va.. . Glass Co. machine. Dismantled Buckeye Window Glass Co . do ... .do Albany, Tnd . , Do. Chambers Glass Co 3 tanks 162 blowers. . Arnold, Pa American Window Chambers & McKee Glass ...do 168 blowers. . Jeannette, Pa Glass Co. machine. Do. Co. Columbus Plate & Window 1 furnace... 10 pots Lancaster. Ohio Machines. Glass Co. Crystal Window Glass Co. . do do Summitville, Ind Dismantled. Clyde Window Glass Co 2 furnaces 18 pots Frankton, Ind ....... Do. Columbia Window Glass 1 fnrnfWfi 10 pots Greenfield, Ind Do. Co. Cunningham Glass Co., (2 furnaces . . 20 pots Pittsburgh, Pa Idle for several years. D. O. \1 tank 30 blowers... do Do. Cunningham & Co. (Ltd.) . 1 furnace .. 12 pots do Dismantled. Dunkirk Window Glass Co. 4 furnaces 24 pots Dunkirk, Ind Moved to Charleston, Ely Window Glass Co 1 furnace . 10 pots Oilman, Ind W. Va. Dismantled. Enterprise Window Glass 4 furnaces 36 pots Dunkirk, Ind... Do. Co. Elwood Window Glass Co 1 furnace 12 pots Elwood, Ind Do. Estep Glass Co Frankton Window Glass 2 furnaces . . . 1 furnam . . , do do Marion, Ind Frankton, Ind Do. Do. Co. Globe Window Glass Co 1 tank 30 blowers Findlay, Ohio Idle abandoned. Gem Window Glass Co Getman Glass Works 2 furnaces... 1 furnace 12 pots 10 pots Dunkirk, Ind A venmore, Pa Dismantled. Do. Hartford City Glass Co.. .. 2 tanks 120 blowers . Hartford City, Ind.. American Window The Hurrle Glass Co 2 furnaces . 12 pots do .... Glass Co. machines. Now J. G. Co., idle. Ihmsen Glass Co do... 22 pots Pittsburgh, Pa Dismantled. Indiana Window Glass Co.. do 20 pots Pendleton, Ind Do. Lawrence Glass Co 1 tank 45 blowers. . . New Castle, Pa American Window McKee & Co., S... 3 furnaces 26 pots Pittsburgh, Pa Glass Co., idle. Dismantled. McCullv. Wm. P., A- Co.... 1 tank 30 blowers. .. do Do. Maring. Hart & Co . . .do 54 blowers . . Muncie, Ind Do. Marion Window Glass Co 1 furnace 10 pots Marion Ind Do. Mahler Glass Co., J do. ... do Du Bois, Pa Do. Monongahela Window Glass Co. Mutual Glass Co do .. do do 8 pots . ... New Eagle P. 0., Pa.. Ithaca, N. Y. Do. Do. Over, C. H 1 tank... 51 blowers... Muncie, Ind Do. Ohio Window Glass Co do 30 blowers . Arcadia, Ind . .. Do. Pendleton Window Glass 1 furnace .... 8 pots Pendleton, Ind Do. Works. Phillips Glass Co f....do 10 pots Do Quaker City Glass Co \ 1 tank 36 blowers... 10 pots Quaker City Ohio Do. f....do do (American Window \1 tank 51 blowers \ Glass Co. machines. Stewart-Estep Glass Co Shenango Glass Co. 3 furnaces. . . 1 tank 26 pots Marion, Ind New Castle, Pa Dismantled. American Window Standard Window Glass Co 1 furnace 10 pots Redkey, Ind Glass Co., idle. Torn down. T. Campbell Co Thos. Wightman Glass Co.. Union Glass Works United Glass Co Victor Window Gla^ Co 2 furnaces... 1 tank 1 furnace 1 tank do 16 pots 45 blowers... 10 pots 57 blowers... 24 blowers Pittsburgh, Pa Anderson, Ind Orestes, Ind Do. Abandoned. Do. Dismantled. Do. W. K. Jones & Co 10 pots Do. Wells, S. K do do Greenfield Ind Do. W. C. Deinimv t v Co 1 tank 48 blowers... Alexandria, Ind Do. SCHEDULE B. PARAGRAPH 99 WINDOW GLASS. Window-glass factories in operation in 1898 Continued. EASTERN DISTRICT. 783 Finn name. Furnaces or tanks. Pots or blowers. Location. Remarks. Atco Glass Co 1 furnace 2 furnaces... do Spots Atco. N. J..., Idle. Abandoned Do. American Glass Co doned. Converted use. Abandoned. Do. Do. Do. Do. Do. Do. Do. Do. Do. Do. Do. Window ., aban- to other Baker Bros. & Co 16 pots Baltimore, Md Christiana Window Glass Co. Cohansey Glass Manufac- turing Co. Cumberland Glass Manu- facturing Co. Edw. R. Wood . do Wilmington, T^Pl 1 tank 54 blowers... 16 pots Philadelphia, P ft 2 furnaces... 1 tank Bridgeton N J 18 blowers... 16 pots Millville N. J Franklin Window Glass Co. Bennett & Co 2 furnaces . . . do Woodbury, N. J do Spring City, Pa Glassboro Window Glass Co Henrietta Window Glass Co Hires & Co 11 furnace Spots 29 blowers... 18 blowers... 16 pots JGlassboro, N. J do St. Dennis, Md 2 furnaces . . . 1 furnace 3 furnaces . . . 2 furnaces . . . do Quinton, N. J. ... More-Jonas Glass Co. .... 8 pots Bridgeton N J Norristown Glass Co 30 pots Norristown, Pa . . Henry Seim & Co 16 pots Baltimore. Md ..... Swindell Bros do do Win. King & Bro 3 furnaces 12 pots do United Glass Co 1 tank 48 blowers... Cleveland, N. Y NORTHERN DISTRICT. Bernhards Bay Glass Co 1 furnace 10 pots Bernhards Bay, N. Y Abandoned. Covington Glass Works ... do. ... 8 pots Covington, Pa ... . Dismantled. Elmira Glass Co 1 tank 36 blowers... Elmira, N. Y Do. Harding & Cummings.. 1 furnace 10 pots Berkshire Mass Do. Washington Glass Co ... do.. 8 pots Ithaca, N. Y Do. Wellsboro Co-Operative .... do 16 pots Wellsboro, Tioga Idle. Glass Works. County, Pa. Window glass factories, January, 191S. PENNSYLVANIA. Factory. Location. Hand. Machine. Operat- ing pots. Not oper- ating pots. Operat- ing pots. Not oper- ating pots. American French Belgian Co Du Bois 30 24 36 \lleganv Window Glass Co Port Allegany Brookville .... 24 Brook viLle Glass t. is not a proper wage for a working man. I do not think it is. Mr. PAYNE. Suppose the material costs more here than abroad? Mr. NEEXAX. It does. Mr. PAYXE. Suppose those gentlemen do not provide for the differ- ence in the cost ot materials. Is that going to benefit you? You do not expect the manufacturers are going to pay that out of their own pockets, do you ? Mr. NEEXAX. Who do you mean provide it ? The tariff committee ? Mr. PAYXE. The tariff committee. I do not mean you. Mr. NEEXAX. Why, we know that if the manufacturers are selling something for 90 cents that we can not make them pay us $1 to produce it. SCHEDULE B. 801 PARAGRAPH 99 WINDOW GLASS. Mr. PAYNE. Of course not. Some of the questions seem to indicate that you could. Mr. LONGWORTH. You realize this, that if the manufacturer does not make a profit your wages are not going to be increased ? Mr. NEENAN. Certainly. Mr. LONGWORTH. You realize that they are really going to be reduced or that you will lose your job? Mr. NEENAN. Yes; one thing or the other. Mr. LONGWORTH. You realize that if a duty is put on this article so low that it will not pay the difference between the cost of produc- tion here and abroad, that your wages will either be decreased or that you will lose your jobs entirely? Mr. NEENAN. Yes, sir. Mr. LONGWORTH. That is the reason you are here; in an effort to prevent the duty being so low that our manufacturers will not be able to compete with those abroad ? Mr. NEENAN. That is it exactly. Mr. JAMES. What you really want is a tariff so high that it will keep out foreign imports ? Mr. NEENAN. I would not say that. The amount of glass that is coming into this country to-day, we can get along on that. If that condition is maintained I do not think the window-glass workers will have any cause of complaint. But as I have stated, I believe it will be better to have that maintained so that work can be done by American workmen. It would be better to do that than to have the glass made in Belgium, if it can be arranged in any way. Mr. KITCHIN. Some remark has been made about tne cost of ma- terials, that they may cost more abroad than here. What are the materials that enter into the manufacture of window glass ? Mr. NEENAN. Materials that enter into the manufacture of window glass? Mr. KITCHIN. Yes; the chief materials. Mr. NEENAN. Lime, salt cake, carbon, and coal not coal, carbon is coal. We call coal carbon. Sand, lime, salt cake, lumber the lumber is for the boxes silica brick for repairing the tanks. I have a note I would like to read. Sand sells for 80 cents a ton in Belgium, and in this country it costs upward of $2 a ton; coal is $3.50 a ton hi Belgium. We have, of course, cheaper coal hi this country. The Belgium manufacturer, in order to reduce the cost as low as he pos- sibly can, compels the Belgium glass workers to double up. For in- stance, what would be a 48-blower tank in this country, with 16 open- ings, would only have 8 openings there, and 2 men would be worked at each one of those places. Lime sells for 97 cents a ton over there. I am not positive what it sells for here. Mr. KITCHIN. Lime sells for 90 cents a what ? Mr. NEENAN. A hundred. I should have said a hundred. Mr. KITCHIN. Do you know that lime is cheaper here than any- where else in the world; that they make it cheaper here? Mr. NEENAN. That may be. I will not have much to say on lime. Salt cake is $7.50 a ton hi Belgium and it is $12 a ton here. Lumber is $17.75 to $20 a thousand feet, I suppose that means. 78959 VOL 113 51 802 TARIFF HEARINGS. PARAGRAPH 99 WINDOW GLASS. Mr. KITCHIN. We are shipping lumber to Belgium from this country ? Mr. NEENAN. Yes, sir. Mr. KITCHIN. And they are getting it cheaper than we are ? Mr. NEENAN. I haven't anything to say about that if they are. I know that it is dearer than that here. Tank blocks are $13.50 per ton and in this country they are $30 a ton. Silica brick is $7.90 a ton and in this country it is $30.90 a ton. Mr. KITCHIN. If they have fooled you about the difference in the price of lime, lumber, and coal, they might have fooled you about the difference hi the price of these other ingredients. Mr. NEENAN. We know what the price of coal is. Mr. LONGWORTH. He said coal is cheaper. Mr. NEENAN. Coal is cheaper here. Mr. KITCHIN. Tell us who handed you those figures? Mr. NEENAN. I had two Belgian window-glass workers, who learned their trade in Belgium and who were in correspondence with the president of the Belgian Window Glass Workers' Association, and they got this data for me by writing to him. He secured that data and sent it to these men, and they came into my office a week ago last Saturday and gave me this information. Mr. KITCHIN. Suppose you file that letter from the president of that association, if you have it ? Mr. NEENAN. I would have to get it from the parties that came into my office. Mr. KITCHIN. Suppose you file that letter with this committee if you can do it. Mr. NEENAN. I will. I also secured a contract that the Belgian window-glass workers are compelled to sign before they can accept a place. I believe I have that with me. That would not be of much interest to you. as it does not enter into the cost; but it shows the conditions under which they are working. Mr. KITCHIX. Are they the only people that are making window glass that are competing with us ? Mr. NEEXAX. Practically so. France has a duty. France had to establish a tariil' rate. The English did not establish a tariff rate and they have driven the English manufacturer out of the market, prac- tically speaking. Mr. KITCHIX. You believe Belgium is the country that has exported all of this window-glass goods to this country? Mr. NEEXAX'. I would not say that positively. Mr. KITCHIX. You really do not know? Mr. NEEXAX. 1 believe the greatest percentage of it is from Belgium. The CHAIRMAN*, is that all, gentlemen? Mi\ NEENAN*. That is all I have to say. I thank you. SCHEDULE B. 803 PARAGRAPH 99 WINDOW GLASS. STATEMENT OF H. R. HILTON, ESQ., ON BEHALF OF THE NA- TIONAL WINDOW GLASS MANUFACTURERS' ASSOCIATION. Mr. HILTON. Mr. Chairman and members of the committee, for your guidance in considering the schedule on window glass, paragraph 99, I simply want to give you a few facts from the manufacturers' standpoint: Window glass is manufactured to-day in eight States, viz, Penn- sylvania, West Virginia, Ohio, Indiana, Kansas, Oklahoma, Texas, and Louisiana. The industry produces about 5,000,000 boxes of single-strength glass and 2,000,000 boxes of double-strength. Total, 7,000,000 boxes. Value, approximately $15,000,000. This industry employs 12,000 workmen in the several factories, 72 per cent of those in the hand plants being skilled workmen. About 60 per cent of the cost of manufacturing a box of window glass is labor and the material used has as large a proportion of labor in its cost. The window-glass industry of the United States to-day consumes and furnishes a market in each year for 160,000 tons of sand, 70,000 tons of salt cake or soda ash, 60,000 tons of ground limestone, 50,000,000 feet of lumber, and 3,200 tons of coal carbon. Both coal and natural gas are used as fuel in manufacturing win- dow glass. If all the factories used natural gas, the yearly consump- tion would be 14,000,000,000 cubic feet. If all the factories used coal, then 400,000 tons of coal would be consumed. The manufacture of window glass hi the United States by either hand or machine process is impossible without the aid of a protective tariff. To sustain this statement, we submit the following: Comparative table of labor cost, 48-blower factory. SKILLED LABOR. [50-foot boxes s. s.] Belgium. United States. Weekly production (54 hours) per shop, 140 boxes s. s. Cost per box. Weekly production (40 hours) per shop, 104 boxes s. s. Cost per box. Blower 511.20 Blower $26 00 Gatherer 7.30 Gatherer 20 80 Second gatherer Crane tender 2.00 1.00 Snapper . Cutter 12.00 10 35 Cutter 5.00 ' Flattener 10 92 Flattener. 3.50 30.00 80.07 Relative cost 37.50 Relative cost 100 00 804 TARIFF HEARINGS. PARAGRAPH 99 WINDOW GLASS. Comparative table of labor cost, 48-blower factory Continued. UNSKILLED LABOR. Belgium. United States. Weekly. Total. Weekly. Total. 1 bookkeeper $7.50 3.00 7.50 12.50 6.25 6.25 5.25 3.50 1.75 1.75 4.20 $7.50 3.00 7.50 12.50 12.50 12.50 10.50 28.00 14.00 10.50 126.00 1 bookkeeper $18. 75 12.50 21.00 19.50 19.50 15.00 15.00 11.50 10.50 8.00 11.00 $18. 75 12.50 21.00 19.50 39.00 30.00 30.00 92.00 84.00 48.00 330.00 1 stenographer 1 stenographer 1 master teaser 1 master teaser 1 machinist 1 machinist. 2 blacksmiths 2 blacksmiths 2 box makers 2 hnx makers 2 packers 2 packers 8 tear tenders (girls) 8 fehr tenders 8 shove boys (girls) 8 shove boys 6 roller boys (girls) 6 roller boys 30 laborers 30 laborers Relative cost 244.50 694. 75 35.18 100.00 Comparative table of cost of material. Belgium. United States. Sand, per ton $0.80 $2.00 .97 2 40 Salt cake, per ton 7.50 12.00 17 75 21 00 Coal, per ton . 3.50 2. 25-2. 70 TanK blocks 13.15 30.00 Silica bricks 7.90 30.90 Coal is the only item of cost that is higher in Belgium than in the United States, but the average of all material used is much less in Belgium. Of the 5,000,000 boxes of single-strength glass made annually in the United States, consumers call for 50 per cent in the small sizes up to 16 by 24. The poorest glass is usually cut into the first bracket (25 united inches), or all sizes up to 10 by 15, and represent one- fifth of the total production. These sizes always come in excess of the demand both in Belgium and the United States, and the country is always overstocked with them. In consequence, ic is only in rare instances that a manufacturer can sell this product at cost price, notwithstanding the fact that on these small sizes of third single the skilled workman receives not more than S2 to $2.25 per day. The Pacific coast consumes about 10 per cent of the glass used in the United States, and yet United States factories can not compete with Belgium in Pacific coast market in these small sizes at the present tariff, as the following table will show: BELGIUM. 1 box 10 by 15 third single at Antwerp (selling price) $0. 75 Freight to San Francisco as ballast in tramp steamers, 52 pounds, at 35 cents per 100 18 Duty, 1-jj- cents per pound on 52 pounds 72 1.65 SCHEDULE B. 805 PARAGBAPH 09 WINDOW GLASS. UNITED STATES. 1 box 10 by 15 third single at factory (cost price) $1. 50 Rail freight to San Francisco, at 90 cents per 100 (70 pounds) 63 2.13 This statement does not figure any profit to the American manu- facturer and shows that the American manufacturer can not recover the market for small glass on the Pacific coast from Belgium factories unless protected by a tariff of 2 cents per pound on the first bracket and 2 cents per pound on the second bracket, except by a marked reduction hi cost of labor, and this is scarcely feasible under present conditions and present cost of living. Belgium reaches all our Atlantic seaport cities at less freight cost than can any United States factory, and this advantage is more marked in the Gulf ports, which give Belgium a better rate to St. Louis and all points south and west of it than is open to any Penn- sylvania or West Virginia factory. Window glass to-day is a cheap product. The window glass in a $1,000 home will cost, about $7.50, or three-fourths of 1 per cent of the total cost. A $1,600 home can be glazed with second double glass for $16, and with third single for $10. The glass in the house per square foot costs less than the lumber. The history of window-glass manufacturing during the past six years is strewn with financial wrecks. The average of all the hand factories shows a business without profit. The only way open to reduce further the cost of window glass is by reducing the cost of labor. The cost of a box of first bracket third single American glass delivered in Atlantic seaport cities is $1.65. The present selling price in these cities is $1.63 per box. This makes a loss of 2 cents per box to the American manufacturer at eastern ports, and a loss of 48 cents per box in meeting Belgium selling prices at Pacific ports. On this small glass the manufacturer has nothing to concede because he has no margin, and if a reduction of tariff is made it must follow that either labor must stand a reduction in wages equal to the reduction in tariff or the manufacture of window glass in the United States must cease. The competition between American hand and machine factories gives greater assurance of a lower price for window glass to the con- sumer than would be probable with control of the market of the United States absolutely in the hands of as strong a syndicate of window-glass manufacturers as now exists hi Belgium that now controls and fixes the prices for all the open markets in the world. We hope your committee will consider the interests of the work- men of whose interests the manufacturers have not been unmindful since they have agreed to share with their skilled employees any advances that may be made in prices, but that you will also consider the interests of a business in which dividends are rare and in which in the past six years the losses have exceeded the profits. We ask the privilege of submitting further data at a future time, to be named by the committee. 806 TABHT HEARINGS. PARAGRAPH 99 WINDOW GLASS. This statement is submitted on behalf of the committee on tariff for Window Glass Manufacturers' Association, composed of J. S. Walker, secretary; Myron L. Case, O. C. Teague, Frank Bastine, and myself as chairman. Mr. DALZELL. Mr. Hilton, did I understand you to say that the American production averaged $15,000,000 a year? Mr. HILTON. Yes, sir. That estimate is based on the present market price, which is the best price we have had in seven years, with one exception. Mr. DALZELL. What does that cover? Does that cover anything but common window glass ? Mr. HILTON. Nothing but common window glass. Mr. DALZELL. It does not include cylinder or crown glass ? Mr. HILTON. I think there is a good deal of misunderstanding about that. The use of the words "cylinder" and "crown" comes down to us from an old system. I think they used to call all window glass crown glass, because it was made by a different process; and then it has been called cylinder glass. I think these are all one. I do not think there is any such thing as crown glass or cylinder glass as distin- guished from window glass to-day. That is my judgment; I may not know, but I have always put that interpretation upon it. Mr. DALZELL. The figures that are furnished the committee here show the production of cylinder, crown, and common window glass in 1910 was over $38,000,000. Mr. HILTON. That is inevitably an error if it applies to window glass, because that is an impossible figure. If the manufacturers had received half that amount, or $19,000,000 for their product, they would all, or nearly all, have been able to pay some dividend this year or during the past year. Mr. KITCHIN. You do not mean to say they have not paid any dividend under the Payne Act, do you ? Mr. HILTON. I do. Mr. KITCHIN. Is that on account of the reduction of the tariff under the Payne Act ? Mr. HILTON. It was on account of competition among ourselves and a lowering of the price among ourselves and in competition between machine and hand plants. Mr. KITCHIN. You say the figures of the Department of Commerce and Labor must be wrong ? Mr. HILTON. It is an impossible figure if it applies to the window- glass production in this country in one year. Mr. HARRISON. In discussing the possibility of a reduction of the duty on window glass, you mentioned the cost of your materials manufactured. Mr. HILTON. Yes. Mr. HARRISON. Are you aware that certain bills have passed the House already, and which are possibly again under consideration, which will reduce the duty upon those materials? For example, one of tho things you mentioned was lumber. Lumber was put upon the free list in the Democratic bill. Soda ash was cut from one-quarter of a cent a pound to one-eighth of a cent; and salt cake, at $1 a ton, has been taken off and put upon the free list. Then there SCHEDULE B. 807 PARAGRAPH 99 -WINDOW GLASS. is the further possibility of duties upon lime and coal being reduced, combined also with the fact that the United States sand is supposed to be the best in the world. Mr. HILTON. The cost of nearly all that material is a labor and transportation cost. Mr. HARRISON. That was the basis of your argument, as I under- stood it, and I only call these matters to your attention. Mr. HILTON. Of course, if the duty is taken off salt cake there would be a very slight advantage there ; but it would not be a material one in the total cost. Mr. HARRISON. You advance that as a great impediment in your competing Mr. HILTON. No; I simply wanted to point out the difference in price of material between the two countries, the disadvantage we are at regarding all of the items. The amount would be very small. The reduction on the one item of salt sake or soda ash would be perhaps $1 a ton. We are paying $12 now; we might get $11. If we got it for $11 it would be a slight advantage, but a reduction of tariff on sand and limestone would not help much at inland points. At present it is practically all a labor and transportation cost. Mr. HARRISON. Those were your own arguments, and what is sauce for the goose is sauce for the gander. Mr. HILTON. We are simply showing the difference there is be- tween our total cost and the cost in Belgium, and that on smaller sizes is about 80 cents a box. And I want to show where we may do it. Mr. HARRISON. We want to lighten some of the burden on you. Mr. HILTON. You will lighten it about one-fourth of a cent per box. We get the sand at our door and grind it ourselves. We could not put it on the cars at all and bring it from New York, or any sea- port, for less than $1.50 a ton. Mr. RAINEY. Coal is the important item in the production of window glass? Mr. HILTON. Yes. Mr. RAINEY. The most important of all ? Mr. HILTON. But we are nearer to the coal mines than to the seaports. Mr. RAINEY. It is more important than lumber and soda ash and salt cake, the other costs you mentioned ? Mr. HILTON. Yes. Mr. RAINEY. It is more important than all combined ? Mr. HILTON. I would not say that. Mr. RAINEY. They get coal in Belgium 25 and 30 per cent cheaper than you can get it here ? Mr. HILTON. No; the coal is higher there. Mr. RAINEY. I mean higher in Belgium than it is here. Mr. HILTON. Yes. Mr. RAINEY. The coal is in your favor ? Mr. HILTON. Yes; the coal is hi our favor at present. Mr. RAINEY. Does not that more than offset the other advantages that they have over there ? Mr. HILTON. No; they still have the advantage in material, not- withstanding the advantage we have on coal. 808 TARIFF HEARINGS. PARAGRAPH 99 WINDOW GLASS. Mr. RAINEY. I understood you to say that the advantage in mate- rial did not amount to much. Mr. HELTON. Looking at it from this standpoint, the raw material in a box of glass itself is not more than 20 per cent of the entire cost. You can not figure the percentage of reduction on the whole cost of the box. You can only figure it on the part of it that the material enters into. So that a 5 or 10 per cent reduction on one-fifth of that cost does not make much of a reduction on the total cost of the box. Mr. JAMES. In speaking of glass, as to its production, that includes making window glass of all sorts, does it not ? Mr. HILTON. Yes, sir. Mr. JAMES. The Treasury Department says that the production in this country in 1910 was $38,055,297. Mr. HILTON. They must have taken a different basis of valuation and of selling price. There is not more than 5 to 8 per cent difference in the selling price of all the factories. Mr. JAMES. They say in 1905, under the Dingley tariff, the pro- duction was $33,308,712. Mr. HILTON. Then there is a different basis of valuation from that which the glass is actually sold at every factory, because we have never approached half that price in any year, on the market we have had. Mr. PAYNE. Has the price of soda ash gone down in the market in the last four years? Mr. HILTON. I do not use it myself. I use salt cake. There is probably a slight reduction, but not very much. It has held at a very uniform price. I am not myself a user of it, and I am not very familiar with it. Mr. PAYNE. Lumber costs you more now than it did four years ago ? Mr. HILTON. Yes; this year it is 15 per cent higher than last year. Mr. PAYNE. Soda ash was reduced from three-eighths to one- fourth of a cent and lumber from $2 to $1.25. If they have gone up, I do not see the advantage of reducing them again. Mr. HARRISON. He says that soda ash has gone down, and the probability is if they do not put lumber on the free list it will soar up to the skies. Mr. HULL. Do you think of any other glass which might be included in this Treasury estimate ? Mr. HILTON. No. There may be something there I do not know about. Mr. KITCHIN. You claim the raw material in the manufacture of this glass is a good deal lower in Belgium than in this country? Mr. HILTON. I do. Mr. KITCHIN. "VVhat per cent of the finished product is represented by the raw material ? Mr. HILTON. About 20 per cent is raw material. Mr. KITCHIN. Twenty per cent is the raw material ? Mr. HILTON. Yes. Mr. KITCHIN. How much is labor ? Mr. HILTON. Labor is 60 per cent. Mr. KITCHIN. That includes salary of officers, sales agents, and everything of that kind, bookkeepers, and so forth? SCHEDULE B. . 809 PARAGRAPH 99 WINDOW GLASS. Mr. HILTON. Yes. Mr. KITCHIN. All that ? Mr. HILTON. Yes. Mr. KITCHIN. What are the wages of what are called wage earn- ers not including the clerical force, agents, and salaried officers ? Mr. HILTON. The lowest wage we pay is $1.75 per day; the average to unskilled labor is $2. Mr. KITCHIN. What percentage of this cost of the product is paid to the wage earners ? Mr. HILTON. Close to 60 per cent it will be over 56 per cent. Mr. KITCHIN. You say that lime, lumber, and coal are the chief ingredients of this raw material ; that is, the most costly ? Mr. HILTON. Yes. Mr. KITCHIN. Do you not know we are exporters of lime, and that lime is cheaper here than it is in Belgium. Mr. HILTON. We are paying 90 cents a ton at the quarry, 75 cents of this cost being labor. Mr. KITCHIN. Where did you get that inf ormation ? It must have been from the gentleman over in Belgium, about whom our young labor-organization man was speaking. Mr. HILTON. I have it from three or four different sources. Mr. KITCHIN. You had identically the same figures. You said the lumber cost you more ? Mr. HILTON. Yes. Mr. KITCHIN. Don't you know as a matter of fact we are export- ing to Belgium every year millions and millions of feet of lumber ? Mr. HILTON. Yes. Mr. KITCHIN. And that we shipped to Belgium last year over $70,000,000 worth of box boards? Mr. HILTON. Is not that exported from the Northwestern Terri- tory? Mr. KITCHIN. I do not know. Mr. HILTON. That is where they get it. They have as good a rate to Antwerp as we have to New York, and they get delivery by water, while we have to pay the charges from the docks to the factory. Mr. KITCHIN. Do they carry it from the seacoast to Belgium ? Mr. HILTON. Yes. Mr. KITCHIN. And then get a cheaper rate than people shipping across the Continent? Mr. HILTON. Yes. I am sure they have a cheaper rate to Ant- werp than we can get around Cape Horn on a vessel to New York. Mr. KITCHIN. They can carry it from Oregon or Washington or California around the Cape and sell it to Belgium cheaper than you can get the lumber? Mr. HILTON. Cheaper than we can get the same lumber. Mr. KITCHIN. The same lumber? Mr. HILTON. Yes. The distance from Puget Sound to Antwerp by water is no greater than to New York. Mr. KITCHIN. Where do you get your lumber from ? Mr. HILTON. We get some of it locally. We are paying $21 a thousand to-day; we paid $17.50 last year. It was cut right in* the vicinity, and there was only a switching charge to pay for its trans- portation. 810 .TARIFF HEARINGS. PARAGRAPH 99 WINDOW GLASS. Mr. KITCHIN. Do you not know as a matter of fact that the present rate is practically prohibitive; that you practically have no compe- tition at all from foreigners, or from Belgium, on window glass? Mr. HILTON. We have competition on first bracket glass, because it is a by-product with them, or a waste product, and they sell it very cheap, sell it as a very cheap product, and we are doing the same. Mr. KITCHIN. Do not statistics show that of every $100 worth of window glass sold and consumed in this country less than 2 per cent is imported here ? Mr. HELTON. Yes, I know it is small. Mr. KITCHIN. You sell 98 per cent, and the foreigner sells only 2 per cent; that is, out of every $100 you sell $98, and the foreigner, from all over the world, $2. And you do not think this rate is prohibitive ? Mr. HILTON. Let me make this point: The competition with them is practically on the small glass. Mr. KITCHIN. What do you call small glass, 15, 14 by 20 inches? Mr. HILTON. Up to 10 by 15 and 14 by 20 inches. Mr. KITCHIN. How many square inches ? Mr. HILTON. Twenty-five united inches. That is the first bracket. Mr. KITCHIN. Do you kaow how much of that came in last year, the amount you actually compete with, or the amount that actually competes with you, of that size ? Mr. HILTON. I only know what the total production is. I do not know the total of that particular bracket. Mr. KITCHIN. How much would you imagine? Mr. HILTON. I do not know. Mr. KITCHIN. Not 1 per cent of what you make. Mr. HILTON. Very well; but we make more of that than the country will take, and we have to sell it at a loss, anyway. Mr. KITCHIN. Oh, yes; you sell it at a loss? Mr. HILTON. Yes; we sell it at a loss. Mr. KITCHIN. So the Payne- Aldrich tariff bill compels you to sell your product at a loss ? Mr. HILTON. Yes; on that one bracket. Mr. KITCHIN. I want to know something about this patent ma- chinery that has taken the place of gatherers, snappers, and blowers in the glass business. Can you tell us who owns that machinery what corporation owns those machines ? Mr. HILTON. Of course, I can not tell you that by knowledge of my own. Mr. KITCHIN. Tell what you have heard. Mr. HILTON. I have heard it is a window glass company that owns it. Mr. KITCHIN. Just one corporation that owns it? Mr. HILTON. Yes. Air. KITCHIN. And glass makers must use it? Mr. HILTON. Must use what? Mr. KITCHIN. Can buy only from this one corporation these machines ? Mr. HILTON. No; you are mistaken. We have 10 factories now being changed from hand to machine process, and they are using four different patents; different from the American. SCHEDULE B. 811 PABAGRAPH 99 WINDOW GLASS. Mr. KITCHIN. Do you not believe that fully one-half of the window glass that is made in this country is made by this patent machinery that is owned by this one corporation? Mr. HILTON. About one-half. It will be in that proportion anyway in the future. Mr. KITCHIN. And since that, wages have actually been reduced to the laborers ? Mr. HILTON. Yes. The competition between the hand and machine factories has two or three times reduced wages. Mr. KITCHIN. In spite of the high tariff, ranging from 38 to over 100 per cent ? Mr. HILTON. Yes. Mr. KITCHIN. You are not one of those manufacturers who be- lieve this tariff is made for the benefit of the laborer, are you ? It is made for the benefit of the industry and manufacturers, is it not ? Mr. HILTON. It is made for all of them. Mr. KITCHIN. Are you one of the gentlemen that never gives an employee higher wages until he strikes, although you have this high tariff ? Mr. HILTON. I do not understand your question. Mr. KITCHIN. I say, is your concern one of the companies that never increase wages of employees unless they strike and force you to doit? Mr. HILTON. No. Mr. KITCHIN. Notwithstanding the fact you have this high pro- hibitive tariff made in the interest of the laboring man ? Mr. HILTON. We have made three scales with the workingmen in the last three years, and we have twice given them increases. Once it was a decrease because the market condition was so low they had to come down to the cost of the glass, and that year we sold the glass at cost. Mr. KITCHIN. That was a market condition, not brought about by any importations of foreign glass. Mr. HILTON. The importations during the last three years have not been a serious problem for us, but they do help to fix the price, because we have to get rid of so much of this small glass that comes in in spite of all we can do. It is so large a proportion of our pro- duction, and we have to sell it so cheap, that it does affect the rest of our operation. Mr. KITCHIN. Does your association regulate your price here by the foreign price; that is, find the foreign price and then add to it the tariff, and that makes the American price ? Mr. HILTON. Xo. I never knew what the tariff was until the last two or three months. Mr. KITCHIN. So you do not know anything about the tariff ? Mr. HILTOX. No; we did not know anything about it. Prices are fixed by supply and demand. Mr. KITCHIX. You say you have suffered considerably since the Payne Act of 1909 went into effect ? Mr. HILTON. We have suffered considerably since machines came into competition, and from overproduction. Overproduction has been the cause of nearly all of our losses. We have many plants lying idle. 812 TAEIFF HEABINGS. PABAGRAPH 99 WINDOW GLASS. Mr. KITCHIN. Has the price of window glass decreased or increased since 1909 ? Mr. HILTON. It has been up and down. Mr. KITCHIN. It is higher now than it was in 1909 ? Mr. HILTON. In a part of 1910 it was a little higher than it is now. In 1909 it was not quite so high as in 1910, but higher than it was in 1911, and not as high as it was prior to 1907. Mr. KITCHIN. 1907 and 1908 were pretty bad years for you, too, were they not ? Mr. HILTON. Yes. That was when the machines came in and we had that- competition. Mr. KITCHIN. The panic of 1907 affected you, which continued over until November, 1910? Mr. HILTON. Yes; it had some influence in lessening the demand. Mr. KITCHIN. That had some influence? Mr. HILTON. Yes; it lessened the demand and compelled us to carry heavy stocks. Air. PAYNE. Since window glass has been manufactured by ma- chinery in this country by what amount have the wages of the gatherers, blowers, and snappers been decreased ? Mr. HILTON. We have not decreased any this year; but some years since they commenced they have decreased all the way from 25 to 40 per cent, I would say, among the snappers and blowers and gatherers. Mr. JAMES. Have not the wages of the blowers, gatherers, and snappers, since they commenced to decrease, caused by machinery, been reduced 50 per cent ? Mr. HILTON. No, not that much, unless you go away back 10 years or so to make a comparison of wages. Mr. JAMES. I said since they had commenced to manufacture the glass by machinery. Mr. HILTON. No. Mr. JAMES. How much would you say they have been reduced? Mr. HILTON. From 25 to 40 per cent. Mr. JAMES. From 35 to 40 ? Mr. HILTON. From 25 to 40. Mr. JAMES. The tariff has remained the same all the time, has it not Mr. HILTON. Yes. Mr. JAMES. But somebody is getting the benefit of that much protection, and inevitably it is not the wage earner, is it? Mr. HILTON. Neither the wage earners nor the manufacturers are getting any benefit from that. There is no use made of it whatever. Mr. JAMES. Then we could take 25 or 30 per cent off? Mr. HILTON. There are some sizes it could be reduced on, but the main thing the higher brackets are probably a little too high and the small glass is just a little too low. There is a difference in the cost in wages between Belgium and this country of about 80 cents a box, and we want that covered by protection. Mr. JAMES. On this glass that is manufactured by machinery, which has caused a reduction in wages to blowers and gatherers to the extent of 35 to 40 per cent, do you think that the tariff might be reduced upon that character of glass ? SCHEDULE B. 813 PARAGRAPH 99 WINDOW GLASS. Mr. HILTON. It could be reduced on the larger brackets, the brackets above the second one. Mr. JAMES. How much would you say it could be reduced ? Mr. HILTON. I have not made any close calculation, but I would suggest you make it 2 cents per pound clear through. Mr. JAMES. You heard tne testimony of a gentleman that was before the committee here testifying for the window-glass people, by the name of Neenan ? Mr. HILTON. Yes. Mr. JAMES. He told us that the wages of laborers had not been decreased in the last seven or eight years. He was mistaken about that, was he not ? Mr. HILTON. I do not understand that he said that. Mr. JAMES. That is the way I understood him. Mr. HILTON. No, I think not; I did not hear him say that. Mr. JAMES. He told us that the wages were reduced, I think, about 12.5 per cent and were restored after the passage of the Payne bill. Mr. HILTON. Well, they were reduced and restored. I know the machine competition was the question that had determined that with the manufacturers. Mr. JAMES. Of course his testimony is in the record and it will speak for itself. Mr. HILTON. It is in the record, but I think you will find he did not make that statement. Mr. JAMES. Is it not true that those who manufacture this glass by machinery, who own this machinery it is a patent, is it not ? Mr. HILTON. Yes. Mr. JAMES. Is it not true they practically dictate and control the price of glass ? Mr. HILTON. When it was so cheap a year or two ago, the year prior to this one, when glass went down so low, some of our hand plants in their financial straits and necessities sold glass below their price, and they came down and met it. They would do the same thing if we made an advance, and would meet that. If the hand plants made another cut, they would make a sacrifice and meet it. The American Glass Co. would always go down and meet the cut. But it was the hand plant that made the cuts first. They were always able to go as low as we did. Mr. JAMES. It is true, is it not, that those who control the machines are the masters of the market ? Mr. HILTON. They control half of the production. They are one individual and of course they have more control than the hand plants have over the market to-day. In fact, we have none what- ever. Mr. HARRISON. How many factories are embraced in the Associa- tion of Window Glass Manufacturers ? Mr. HILTON. That was submitted in a list filed by Mr. J. R. John- son yesterday in a statistical statement, so that you will find it all there. Mr. HARRISON. They are all in there? Mr. HILTON. Yes; all listed, every one. Mr. HARRISON. You are speaking for all ? 814 TAEIFF HEAEINGS. PARAGBAPH 99 WINDOW GLASS. Mr. HILTON. I am speaking for all hand slants, not the machinery plants, except machine plants that are putting in other patents than the American this year. Mr. HARRISON. Is there not some suspicion there is a window- glass trust? Mr. HILTON. I do not know of any. Mr. HARRISON. Are they all incorporated? Mr. HILTON. The companies are all incorporated individually. Mr. HARRISON. Have they not been under suspicion over here in the departments? Mr. HILTON. They were two years ago, when 40 per cent of them organized. They had been cutting prices, and cutting each other for a year or two. The business was demoralized, and practically all gone to pieces, and so 40 per cent of them organized, and sold their glass all through one agency. Mr. HARRISON. The machine factories you say are not in the National Association? Mr. HILTON. No, sir. Mr. HARRISON. All the others are? Mr. HILTON. Yes. Mr. HARRISON. What company are you connected with? Mr. HILTON. I am connected with the Allegany Window Glass Co., of Port Allegany, Pa. Mr. HARRISON. What is your relation to that company? Mr. HILTON. What company? Mr. HARRISON. The company with which you are connected. Mr. HILTON. I am secretary, treasurer, and manager. Mr. HARRISON. Do the companies that are embraced in your asso- ciation avoid paying dividends by paying salaries to their officers ? Mr. HILTON. No. The window-glass industry does not pay any large salaries. Mr. HARRISON. How much salary do you get? Mr. HILTON. I get $2,000 a year, and 1 am the only salaried officer. I am manager, secretary, and treasurer. I think that is about the average they get. Mr. JAMES. No skilled workmen are required in making glass by machinery ? Mr. HILTON. Not skilled. There is some skill developed, but they are not an organized body, and they do not call themselves skilled workmen. It is cheap labor. That is the reason we can not compete with them. Mr. LONGWORTH. You said 56 per cent of your factory cost was labor. Mr. HILTON. Yes: it is more than that. When I come to think it over, our office cost is not over 2 per cent, and 58 per cent is common labor around the factory. Mr. LONGWORTH. And 20 per cent is your material? Mr. HILTON. Yes. Mr. LONGWORTH. About 20 per cent overhead charges? Air. HILTON. Yes. About 20 percent material and 20 per cent fuel. Mr. LONGWORTH. That is the way you figure your cost? Mr. HILTON. Yes, sir. The overhead charges include the fuel. Mr. LONGWORTH. Includes fuel? SCHEDULE B. 815 PARAGRAPH 99 WINDOW GLASS. Mr. HILTON. Yes. Mr. LONGWORTH. So that in round numbers 60 per cent of your cost is the labor ? Mr. HILTON. Yes. Mr. LONGWORTH. You have spoken of the disadvantage you were at in comparison with Belgium, on your material ? Mr. HILTON. Yes. Mr. LONGWORTH. That is relatively insignificant, is it not, as com- pared with the disadvantage as to labor? Mr. HILTON. Certainly. Mr. LONGWORTH. You would be willing would you not, to have glass put on the free list, if you could reduce your wages to what is paid in Belgium ? Mr. HILTON. Certainly. Mr. LONGWORTH. You would be willing to do that ? Mr. HILTON. Yes. Mr. LONGWORTH. You would take free trade and pay your labor the same as they do ? Mr. HILTON. Yes. Mr. LONGWORTH. So your protection practically all goes to labor? Mr. HILTON. It all goes to labor. The CHAIRMAN. That is all. The witness at a later date filed the following communication with the committee: AIXEGANY WINDOW GLASS Co., Port Allegany, Pa., January 15, 191S. THE COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. Re Schedule B, paragraph 99. The National Window Glass Manufacturers Association through its tariff committee begs to submit the following additional data to that given before your committee at the hearing of January 9. In further reply to the questions of Mr. Dalzell and Mr. James, shown on pages 655 and 657 of Hearing No. 4, January 9, as to valuation of window-glass production in the United States in 1910 by the United States Treasurer as being $38,055,297, we beg to submit the following evidence to sustain the estimate of the manufacturers' com- mittee as to the value of window-glass production in 1912: Year. 50-foot boxes. Value. Value per box. 1899' 4,341,282 $10,879,355 J2.50 19041 4.852,315 11,610,851 2.39 19091 6.921,611 11,742.959 1.70 1912 s 7,000.000 15, 000, 000 2.14 1 Figures taken from Thirteenth United States Census, Bulletin on Manufactures, p. 64. * Manufacturers' tariff committee's estimate. We also beg to submit a copy of the wage scale made between the manufacturers and skilled workmen for the present blast, or working year, and call your attention specially to the scale itself on first page and to paragraphs 2 and S. showing that the manufacturers have agreed to share with their skilled workmen any advances in prices they may secure. The window-glass factories of the United States commenced three years ago manu- facturing a heavy-weight glass, known as 32-ounce, being double the weight of single 816 TABEFF HEAEINGS. PARAGRAPH 99 WINDOW GLASS. strength and 25 per cent heavier than double strength. As this is still a competitive industry, we protest against any change being made in the tariff on this product. Signed in behalf of the tariff committee of the National Window Glass Manufacturers' Association. H. R. HILTON, Chairman. BRIEF OF SEMON BACHE & CO., RELATIVE TO COMMON WINDOW GLASS. NEW YOEK, January 18, 1913. COMMITTEE ON WAYS AND MEANS. House of Representatives, Washington, D. C. GENTLEMEN: We request your consideration of the propriety of a substantial reduc- tion in the duties throughout this paragraph. The present domestic production of window glass was stated by Mr. J. R. Johnston in his testimony before the committee on January 8 last as about 7,500,000 boxes per year. The boxes referred to contain, approximately, 50 square feet each and weigh, net, about 55 pounds to the box in single thick and 80 pounds to the box in double thick. The 7,500,000 boxes annually produced is the equivalent of about 475,000,000 pounds. The importations run from 30,000,000 to 35,000,000 pounds annually; that is about *l\ per cent of the domestic production. The manufacturers ascribe this relatively small importation, which still existe, as due to insufficient protection in the small sizes. The fact is, however, that the importa- tions consist almost entirely of special varieties of window glass, imported solely on account of their suitability for particular requirements and not on account oflow pnce. In fact, the vast majority of the importations do not compete with the American product at all. For instance, there are imported annually about 12,000,000 pounds for the manufac- ture of photographic dry plates, lantern slides, etc. At least 10,000,000 pounds consist of high quality picture glass. These two items alone account for two-thirds of the importation, and in addition there are numerous other imported specialties, such as clear fluted glass, colored window glass, muffled glass for art glass workers, etc. In fact, Mr. Johnston's own figures of glass imports, reprinted on page 408 of print No. 3, Tariff Hearings. January 8, 1913. show conclusively the nature of the importa- tion. The average price per box for the period from 1888 to 1912, inclusive, works out as follows: $1.96 1.89 1.66 1.61 2.11 2.29 1.96 1.94 1.95 1.80 1.80 2.29 1888 $1.17 1901 1899 1 14 1902 . . 1890 1 19 1903 1891 1 50 1904 1892 1. 39 1905. . 1S93 1. 36 1906 1S94 1.20 1907 ... 1895 1 26 1908 189G 1.20 1909 1897 1.27 1910 189S 1.47 1911 1899 1.62 1912 1900... 1.82 It will be observed that up to 1S9S the importations did actually consist of glass of comparatively low value. Since then, however, there has been a consistent advance in the foreign value of the importations. The fact of the matter is that the American manufacturers of window glass are so enormously overprotected that most of the time they don't take advantage of their production, even in tho small si/es, but sell their product at 20 or 30 per cent less than the cost of Belgian glass laid down in New York. The larger sizes, those exceeding 16 by 24 inchi-s, are frequently sold for much less than the cost of the Belgian product that is. tho foreicrn cost f. o. b. Antwerp, without duty, and frequently for less than the duty alone on the imported article. In fact, under competitive conditions the price of American window glass never gets anywhere near the importation point and the public doesn't suffer from the operation of the tariff. At intervals, however, the domestic manufacturers get together in a trade agreement or selling agency or some- thing of that sort and the public pays handsomely. SCHEDULE B. 817 PARAGRAPH 99 WINDOW GLASS. In our brief presented to the Ways and Means Committee in 1909, we pointed out that allowing this exceedingly high tariff to stand simply offered a premium for the forma- tion of a combination behind it. Prophecies have seldom been fulfilled more promptly. During the early part of 1909, the American window glass manufacturers had been engaged in the formation of a combination, but as the project attracted some attention during the tariff discussion of that year, the scheme was temporarily dropped. The ink was hardly dry on the Payne bill, however, before it was revived and by the end of 1909 a selling agency known as the Imperial Window Glass Co. was in full operation. This organization comprised some 70 plants, including 15 plants which were leased for the purpose of shutting them down, and there were not more than half a dozen small factories left outside when the combination was formed, so that together with the Amer- ican Window Glass Co., who at that time produced all the glass made by the machine process, amounting to about half the entire production, they controlled the market absolutely. The effect on prices is illustrated in the attached tables Nos. 6 to 12, inclusive, showing the fluctuations in selling prices during the past four years. It will be seen that in some cases prices were more than doubled and that the advance averaged all round considerably over 50 per cent. The Imperial Window Glass Co. was merely a selling agency, operating principally on a commission basis, and most of this enormous increase in price went direct to the manufacturers, whose product was sold through the Imperial. Roughly speaking, the additional profit during 1910, including the profits of the Imperial Co. itself, were in the neighborhood of about $6,000,000. The Imperial Co. did not last 'long. The profits of the business were so great that old plants that had been shut down for years were renovated and manufacturing recommenced, so that by the fall of 1910 there were 14 independent factories in opera- tion and 5 new ones in process of construction, and as glass had been produced at an unprecedented rate during the first half of 1910 owing to the stimulus of high prices, the overproduction, together with outside competition, finally broke the market late in the fall of 1910. During its brief existence, however, the combination had, as stated above, cost the country something like $6,000,000, which was a pretty good price to pay as a direct result of the operation of the Payne tariff. From the late fall of 1910 until the summer of 1912, competitive conditions existed in the window-glass business. Last summer, however, the Imperial project was practically revived by the formation of the Johnston Brokerage Co., Mr. J. R. Johnston, the president of this concern, who appeared before your committee on January 8, having been the secretary of the Imperial Co. The Johnston Brokerage Co. handles the product of most of the factories that were formerly affiliated with the Imperial concern. The effect of this last combination is shown in Tables Nos. 11 and 12 attached. For a graphic demonstration of the violence of the fluctuations in price due entirely to the presence or absence of competitive conditions, and impossible except under the existing tariff, we show hereunder comparative prices of four popular sizes at different periods: Net prices per box. A single (16 by 20 inches). g B single (28 by 34 inches). B double (16 by 24 inches). A double (30 by 36 inches). April, 1909, open market $1 35 11 52 $1 67 $2 31 January, 1910, Imperial Window Glass Co. formed. 1 92 2 23 2 79 3 78 July, 1910, Imperial Window Glass Co. maximum 1 92 2 64 3 24 4.39 January, 1911, Imperial Window Glass Co. dissolved 1.69 1 85 2 17 2 94 October, 1911, open market 1 21 1 35 1 49 2 14 September, 1912, Johnston Co 1 80 2 02 2 17 2 94 January, 1913, Progress Johnston Co 1 95 2 33 2 71 3 72 Cost of Belgian glass in same sizes f. o. b. New York at average price 2 26 3 31 2 99 5 37 Duty on imported glass 97 1 69 1 50 2 60 Freight l on imported glass 14 14 20 20 Glass at 74- per cent 1 15 1 48 1 ^ 2 57 1 And insurance. 78959 VOL 113- 818 TABEFF HEARINGS. PARAGRAPH 99 WINDOW GLASS. It will be observed that under competitive conditions it would have been impos- sible on the one hand to import ordinary Belgian window glass for glazing purposes, even if it could have been brought in free of duty, as the foreign cost of the Belgian glass was in many cases higher than that of the domestic factories here, while, on the other hand, if the Belgian glass had been given away, it still could not have been imported, as the duty was higher than the cost of the American glass. In justice to the American manufacturers, we are free to say that a combination of some sort appears to be the only alternative to ruinous cut-throat competition, and we don't think any consumer of glass should object to a reasonable combination to steady the market, but the combination should not be allowed the benefit of the present excessive protection. The public should also be protected by at least the possibility of foreign competition. We are unable to figure out the basis for the comparative labor cost given by Mr. Neenan and Mr. Hilton. In fact, we don't see how a really exact comparison could be made. The American window glass blowers' wages are determined by the sizes into which the glass he blows is eventually cut, whereas the Belgian blower is paid by a piece-rate system. The same statement applies to gatherers, flatteners, cut- ters, etc. It is sufficient to say regarding this labor matter that up to 10 years ago or so, there was steady immigration of window glass workers from Belgium, a large proportion of the workmen in the trade to-day being of Belgian origin. This immigration has practically ceased, which is sufficient demonstration that conditions in the trade here are no longer attractive as compared with conditions in Belgium. In fact, both Mr. Neenan's and Mr. Hilton's testimony show conclusively that the tariff has absolutely nothing to do with the prosperity of the American window-glass worker, as under the Dingley and Payne tariffs wages have been reduced 40 per cent or more in spite of the enormous protection. Mr. Hilton in suggesting a flat rate of 2 cents per pound (see print No. 4, tariff hear- ings, Jan. 9, p. 662), practically admits the propriety of a reduction running from 20 to 50 per cent in all the larger sizes, those above 16 by 24. He insists, however, that he suffers from Belgian competition in the small sizes. We think that a glance at the attached tables on pages 6 and 10, showing that the American manufacturers have sold this small glass frequently at only 20 or 30 cents per box higher than the duty on the imported article will disprove this conclusively. The American manufacturers may have been selling these small sizes too cheap, but the tariff had nothing whatever to do with it. Respectfully submitted. SEMON, BACHE & Co., F. J. GOERTNER, Sales Manager. [National Glass Budget, Pittsburgh, Saturday, Apr. 30, 1910.] A DEMURRER IN IMPERIAL CASE WILL DELAY TRIAL AT LEAST SIX MONTHS POSSIBLY A YEAR OR MORE SUIT NO LONGER A MENACE TO SPRING AND SUMMER MARKET INDICTMENT MAY BE QUASHED PRICES ADVANCED. As a result of an agreement arrived at between counsel for the Government and the Imperial Window Glass Co. early this week the Imperial's attorneys will file a demur- rer in the case on the 9th of May. The court will then set a day for argument. If the demurrer is sustained it will then be optional with the United States district attorney whether the case will go to the circuit court of appeals for review or be quashed. If overruled the Imperial has no alternative but to go to trial, in which event the case can not come up before the October term of court, and it may possibly be carried over to the May term in 1911. In the event of the case going to trial before the local court and an adverse decision rendered, the Imperial Co. will still have the privilege of appealing it to the circuit court of appeals for review. United States District Attorney Jordan, on Wednesday morning, said: "This is the first case of this character to come before the local United States court and it is desired on the part of the court to ascertain beforehand whether we are moving in the right direction. Argument will determine whether the case will go to trial or be quashed." It will thus be seen that the executive officers of the Imperial Co. are to be given an opportunity to state their case before the court, and, in view of the voluminous evi- dence that they will be able to submit sustaining their position, they feel confident SCHEDULE B. 819 PARAGRAPH 99 WINDOW GLASS. that they will be able to maintain their position, through demonstrating to the court that they are neither criminals, nor criminally inclined, but on the other hand have resorted to the only available means looking to the safe-guarding of investments and the paving of the way for living wages for the men who toil in front of window-glass furnace fires. In any event this action removes a menace from the business for many months ahead, putting the case entirely out of the way of spring and summer business. [National Glass Budget, Pittsburgh, Nov. 19, 1910.] THE WINDOW-GLASS SITUATION GOVERNMENT CASE ENDED BY IMPOSITION OF FINES IMPERIAL NOW IN COURSE OF LIQUIDATION OUTPUT CURTAILED OWING TO WORKERS* STRONG STAND IN SUPPORT OF WAGE AGREEMENT. The Government action against the Imperial Window Glass Co., which was listed for trial on Monday of this week, is at end, the defendants having appeared in court on Friday afternoon of last week and pleaded "nolo contendere" before Judge James S. Young to the counts that had been entered against them under the antitrust laws. This was followed by the imposition of a fine of $2,500 against the company, and fines of $500 each against its 15 directors, in both cases the cost having been assessed against the defendants. ******* The sudden termination of this proceeding, Mr. Wickersham of the Department of Justice states, was due to overtures made by representatives of the defendant com- pany the day prior to the termination of the court action, while on the other hand, representatives of the Imperial insist that their action was due to the fact that internal dissentions and outside competition had nullified the usefulness of the organization. NEW YORK, January 5, 1913. COMMITTEE ON WAYS AND MEANS OF THE HOUSE OF REPRESENTATIVES, Washington, D. C. GENTLEMEN: Further to our communication of January 18, we beg to inform the committee that although the statement is frequently made that American window glass can not be exported, it is, as a matter of fact, at this very time being offered in Canada at prices considerably below those ruling in the American market. We have recently seen offers of large quantities to Canadian buyers at discounts of 90 and 40 per cent and 90 and 50 per cent from the list, whereas the discounts for the United States market are 90 and 17^ per cent to 90 and Tl\ per cent, plus packing. Using for an illustration the same four sizes as we used in our statement of January 18, the comparative prices are as follows: Price to United States buyer. Price to Canadian buyer. United States duty on Belgian glass. 16 by 20, A single $1.95 $1.33 $0.97 28 by 34, B single 2.33 1.73 1.69 16 by 24, B double .". 2.71 1.55 1.50 30 by 36, A double 3.72 1.90 2.60 It will be observed that double-thick glass is being offered to the Canadian buyer for less than the American duty on the imported glass, and that even in the single-thick glass the selling price for Canada is only a trifle higher than the American duty. Respectfully submitted. SEMON BACHE & Co., F. J. GOERTNER, Sales Manager. 820 TARIFF HEARINGS. PARAGRAPH 99 WINDOW GLASS. PRICES OF ORDINARY WINDOW GLASS. DANBTJRY, CONN., January 10, 191S. Hon. OSCAE W. UNDERWOOD, Washington, D. C. DEAR SIR: As a retail dealer in ordinary window glass, I wish to place some facts of the business before your committee while the hearing on glass schedule is going on. The average run of price on glass per box of 50 square feet, factory shipment, has been from $1.20 to $1.40 per box for sizes in first bracket, i. e., of 150 united inches or less. One year ago price was suddenly lowered to 99J cents a box on above sizes. Upon making inquiry learned what purported to be the following facts: That the American Window Glass Co. had perfected a machine which displaced about 48 of every 50 glass blowers in the business; that they were cutting prices to get control of 'the business into their own hands, as price has been subsequently advanced again. It is, I believe, reasonably safe to assume that they carried their point. Now, then, how much tariff do manufacturers need that can voluntarily sell glass (and good glass, too) at $1 per box? Respectfully, yours, D. F. STEVENS. ["Extract from Daily Consular and Trade Reports.] PROSPERITY IN BELGIAN GLASS INDUSTRY. [From Consul General Ethelbert Watts, Brussels.] Belgian manufacturers of window glass are enjoying a period of unusual prosperity because of a close understanding among themselves on prices for the various export markets high where conditions permit it, low where there is competition and where it is a matter of dumping surplus production. Although the wages of blowers have been recently slightly advanced, they remain reasonable. It seems that the work- men are moderate in their demands for better wages, in order not to encourage the introduction into Belgium of the American window glass blowing machine. Belgium plate-glass manufacturers are very prosperous, paying yearly dividends as high as 30 per cent. Because of the cheap labor the plate-glass industry in Belgium maintains on all foreign markets its power as price regulator. The advantage of a lo\v cost of production (11 cents, United States currency, per square foot of polished plate glass) is assisted by the successful operation of the International Syndicate of Plate Glass Manufacturers, which regulates selling prices according to conditions existing in each foreign market. These arbitrary selling prices are consequently of great variety. For example, the same glass and the same sizes, quality for silvering, are sold (off the gross prices of the same list) at 20 per cent discount for England and 30 per cent discount for the United States, and quality for window at 30 per cent and 2i per cent for England, against a discount of 45 per cent and more for the United States". The reason for this discrimination is said to be the fact that the American plate- glass manufacturers are not associated with the European syndicate, and consequently the syndicate establishes a low range of prices for the American market on the kinds and sizes of glass which, through overproduction, must be disposed of by the Ameri- can manufacturers regardless of cost. PARAGRAPH 100. Cylinder and crown glass, polished, not exceeding three hundred and eighty-four square incites, four cents per square foot; above that, and not exceding seven hundred and twenty square inches, six cents per square foot; above that, and not exceeding one thousand four hundred and forty square inches, twelve cents per square foot; above that, fifteen cents per square foot. SCHEDULE B. 821 PARAGRAPHS 101-102 PLATE GLASS. PARAGRAPH 101. Fluted, rolled, ribbed, or rough plate glass, or the same, containing a wire netting within itself, not including crown, cylinder, or common window glass, not exceeding three hundred and eighty-four square inches, three- fourths of one cent per square foot; above that, and not exceeding seven hundred and twenty square inches, one and one-fourth cents per square foot; all above that, one and three-fourths cents per square foot; and all fluted, rolled, ribbed, or rough plate glass, weighing over one hundred pounds per one hundred square feet, shall pay an additional duty on the excess at the same rates herein imposed: Provided, That all of the above plate glass, when ground, smoothed, or otherwise obscured, shall be subject to the same rate of duty as polished plate glass unsilvered. PARAGRAPH 102. Cast polished plate glass, finished or unfinished and unsilvered, not exceeding three hundred and eighty-four square inches, ten cents per square foot; above that, and not exceeding seven hundred and twenty square inches, twelve and one-half cents per square foot ; all above that, twenty-two and one- half cents per square foot. PLATE GLASS. STATEMENT OF JOSEPH S. AUEKBACH, OF NEW YORK CITY. PARAGRAPH 102. Mr. AUERBACH. Mr. Chairman and gentlemen of the committee, before stating my position in detail as to the paragraph now under consideration, I ask the indulgence of the committee in making cer- tain suggestions applicable to it and to the other interests for which I shall appear in these hearings, and applicable in a measure to industry generally to be affected by your proposed revision. By such a plan, I am confident, I shall be enabled to avoid repetition and so economize your time. My view is that your decision to hold these hearings indicates that you invite such suggestions because your minds are not fully made up as to the bills you are to report; that they are not necessarily to be in substance mere duplicates of the tariff bills of last year, but that with open minds you are seeking new and additional information to enable you to give the most satisfactory answer to the many per- plexing questions before you. On behalf of these several interests I represent, I wish at the outset to tender you the loyal cooperation of their management and counsel in the task before you, which is to have such a momentous effect upon the public welfare. For with all our selfish interests, which we do not minimize, we have a correspondingly great stake in the prosperity of industry that is halting upon your action; and if we were unduly favored at the expense of other industries, it would not in the end be to our permanent advantage. When general prosperity is lacking, I a particular industry is almost certain to be injuriously affected, for commercial depression is hopelessly contagious and we in the end shall not be immune. Then, too, if we should succeed in securing for ourselves inequalities, this will doubtless be true as to others, and again we shall have a tariff with which the public will not be content, and further agitation will ensue; and the manufacturer knows full well that the course of treatment best for him in this case is rest from such disturbing agitation. 822 TABIFF HEAEINGS. PARAGRAPHS 101-102 PLATE GLASS. Lest my assuming to speak to you on the subject be deemed presumptuous, let what has been said so often be repeated now that the best tariff legislation can not be said to be truly scientific, but merely the adoption of some practical plan to raise revenue for Government needs without injustice, inequality, or discrimination. And anyone possessing only general information and intelligence as to governmental affairs may, perhaps, make some helpful contribution to your deliberations; though I wish it to be understood that my contribution is not the discovery of something novel by way of a cure-all nostrum. Observation teaches that no arbitrary rule will serve your purpose of raising income. If there is a 10 per cent duty on a given article, its reduction to 5 per cent or its increase to 20 per cent would not necessarily mean in the one case, one-half, or in the other twice the income. The reduced tax might produce jess or more revenue than the original tax; and the increased tax might have a similar result. You feel your way rather than see your way to a result; only you have a great experience as your guide, and what might be a mere guess on the part of others becomes a matter of reasonable proba- bility when, with your familiarity concerning the subject, you estimate the outcome of your revision. It is true that you are to have before you the duty of living up to the pledges of the Democratic Party to the people; but as a Democrat by principle and practice, I have no fear of them rightly interpreted. We are not, however, to confuse ourselves as to what were those pledges even though prepared to accept them at their face value. While there was a demand in the Democratic platform for the imme- diate revision of tariff duties, it was accompanied by the declaration that We recognize that our system of tariff taxation is intimately connected with the business of the country; and we favor the ultimate attainment of the principles we advocate by legislation that will not injure or destroy legitimate industry. President Elect Wilson, throughout the campaign, voiced this view; and again and again he gave his assurance to the American people that in the reform of the tariff no legitimate business industry need fear unjust treatment. The tariff, being a necessary governmental agency to produce reasonable revenue for its just needs, the problem is to produce that revenue in such a way that neither the wage earner nor the producer nor the consumer will be unnecessarily injuriously affected, while if possible the interests of all these classes may be promoted. The way of the tariff 1 should be a toll road and not a highway where highway- men may ply their trade. Xaturally you must approach }~our task with solicitude as to the result; for you have in your keeping not only the future of political parties but the welfare of the whole nation. Some injury to one or more of these classes will probably result from whatever you do, but unquestionably you will have cause to congratulate yourselves if the specific injury be reduced to a minimum and the general benefit made a maximum. You have in all this proposed legislation the administration of a great trust, and you will very inadequately dis- charge your duty unless you know the rights as well as the needs of SCHEDULE B. 823 PARAGBAPHS 101-102 PLATE GLASS. your cestuis que trustent. In no other way can your stewardship be successful, however much you may receive a temporary popular applause, which, though not to be wholly disregarded, you understand full well is not always the fixed index of approval, but often the weather vane, and you must, if necessary, be content patiently and courageously to await the final verdict made up when wnat you have accomplished has been weighed in the balance and not found wanting. What then, rightly interpreted, was that tariff reform pledge, made by the Democratic Party to the American people ? Whatever it was, it was clearly not some things, and when these are eliminated from consideration we can the better see what that pledge involved. It was not free trade or any approach to it, and if it had been so understood the Democratic Party would have gone down to certain defeat. It was not discrimination against the manufacturer or the producer who makes prosperity possible, or again the Democratic Party would have gone down to certain defeat. Nor was that pledge an undertaking to raise less money for the reasonable needs of govern- ment, for any such proposal, witn the increasing necessity for legiti- mate and enlarged national expenditures, would have been unintelli- gent or insincere. Nor was it, as some insist, an arbitrary scheme of taxation to get the largest return possible from tariff duties without regard to individual or collective hardship. The pledge was none of these things; but, stating it colloquially, it was that the Democratic Party would so readjust the tariff that, in producing the same or even more revenue, existing inequalities would as far as possible be done away with and the burdens of the high cost of living to the general consumer be lightened. In all this, however, the solemn promise was that there would be taken into account and allowed for the difference in cost of produc- tion here and abroad. The chairman of this committee again and again has expressed this view forcibly, eloquently, and persuasively, too, as the result of the last election makes abundantly clear. Accepting the view, therefore, that you all are at work, either as leaders or in the ranks, to reduce the high cost of living generally, how are you going to go about it always remembering that this so-called high cost of living is often a misnomer for the cost of high living. Let us not overlook that fact. Clearly, one of the ways is first and foremost the straight and direct way to reduce the cost of things having directly and immediately to olo with living the things we eat, and then the things we wear, and then the things we use, without, however, producing a result approach- ing general industrial disturbance. We have all heard from the President elect about that gibbet of shame, high as Haman's, upon which he proposes to hang the panic-breeder; and of course none of you long for the gibbet or even the public stocks. You wish, on the contrary, to give an account of your stewardship that will be reflected in a defensible prosperity not to the few and favored but to the many; and, as the chairman of this committee once said on a notable occasion, to avoid a result so often characteristic of our legislation, both State and National, with its artificial ups and downs, which are no better for the body politic than was, of old, the prevailing disease of chills and fever good for the human body. The normal condition 824 TAKEFP HEABINGS. PABAGBAPHS 101-102 PLATE GLASS. is as essential for the manufacturer in his business as it is for the individual in his life. In connection "with the reduction of the tariff on the things we eat and wear, and the things we use in our home life or in our ousiness, this tariff must produce a revenue which must at least be as large as it is now; for the crying need of important undertakings such as Federal courthouses, the dredging of our great waterways and har- bors to prepare for the new era of commercial activitv to result from the opening of the Panama Canal, modern post-office buildings to handle the mails, and the parcel post departure (I have not time even to call the roll of all the needs) makes a greater rather than a smaller revenue almost imperative unless we are prepared to suffer in national pride and national advancement. Under all these conditions the duty of the Democratic Party is clear enough. Having pledged itself to a revision of the tariff which shall be designed for revenue only, and having asserted, till it has become an inseparable part of that pledge, that, in readjusting the tariff the difference in cost between production here and abroad is to be taken into account and equalized, the primary consideration is, how is this difference in cost to be arrived at. Many rush to the conclusion that it is to be confined to the mere difference in the wages of the laborer here and abroad. But clearly this is altogether too limited and narrow a view of the subject. For has not the cost of the installation of the manufacturing plant here and abroad of necessity much to do with the relative prices of pro- duction ? If the plant here is built by the American workman who demands and commands a higher wage than the foreign workman; if the price of material used here in construction is higher and therefore the expenditure for the plant more than for a plant of similar capacity abroad; if maintenance and depreciation are higher these elements, too, are to be given due weight in ascertaining the cost of production. Yet these are not all, for there is the productivity of the workmen employed in the industry; and if a workman with a given wage abroad produces more than the workman here proper weight being given to the question of the respective quality of the foreign and domestic product that element, too, is not to be ignored. If the reply be that your time is too limited to pursue the subject into such rami- fications and details, then it may well be said that you may be doing a great injury as well as taking a leap in the dark; and I, for one, am not prepared to believe that you are disposed to commit the wrong of the injury or take the risk 01 the leap. You are not to be judges and yet insist that you have not time to hear testimony and independently examine and weigh facts. That would be a course not to be tolerated in a free country, and tyranny has never assumed a more forbidding form than when guilty of like practices. It would indeed be execution before judg- ment and you do not need to be reminded by me that execution before judgment is a poor form of justice. You may do an injury after all painstaking effort and research; but then you will not run the risk of having the accusation success- fully brought against you that this result was traceable directly to neglect or indifference. SCHEDULE B. 825 PARAGRAPHS 101-102 PLATE GLASS. Then, too, what an ideal prospect opens up before you. You have no precedents to control you, as the judges of our courts so often have, compelling them at times, in obedience to those precedents, to bring about individual hardship. There is no rule of stare decisis to hamper you, and being thus free to decide each case on its particu- lar merits, you are enabled to go a long way in the effort to avoid injustice. Perhaps, however, it may be error to conclude that in every case you must necessarily delve into all these indefinable and rather intricate methods of determining cost; and it may be that at least as to more than one of the industries which I represent, and I think this is true of many other interests to be before you there is a short cut to results, not necessarily controlling, but influential and helpful for your deliberations. However difficult of ascertainment this matter of cost may often be and the person is hopelessly inexperienced who asserts the contrary one way of approaching it is to inquire, what in the par- ticular case have been the results of manufacture and trade under the existing tariff ? Is the capital stock artificial or does it represent actual investment? Is the management efficient and economical, or the reverse ? And I wish to say with all the emphasis which can be put into language that the earnings of an industry having this efficient management and this low capital stock contrasted with the result of similar manufacture abroad are factors you can not fail to take into your calculations as a labor-saving device and a fairly safe guide in helping you to arrive at cost. You are bound, too, to contrast the industrial organization thus administered and capitalized, and yet paying meagre returns upon the capital invested, with the other home organization having excess- ive capital and ineffectively administered, and also with the agri- cultural industry so conducted as to reflect indifference to the gospel of soil efficiency and productivity preached by every national agri- cultural experimental station. If an industry is infant only in efficiency but adult in its date of registration, or if the farmer has no anxiety to make two blades of grass grow where one grows now, you certainly can not justly ignore these facts. While adjusting the tariff primarily so as to produce income, as an immediate accom- paniment of that idea, you will enable the slothful manufacturer and farmer to enjoy prosperity only if they indicate a willingness to earn and enjoy it by industry and intelligence and the employ- ment of the most modern-day methods hi their labors. Any other course would be intolerable. In no safe way can the tariff be regarded as absolute rather than relative; and if you say, well, each case in its turn must be taken up, my comment is yes, provided always each case, though con- sidered by itself, be considered also as part of the whole problem. Permit me to give you an illustration not without application to this subject. In railroad reorganizations the judicial decree often requires that you ascertain certain auction block values by a dual method. First, each separate piece of property is offered for sale under the so-called unit bid, and then tne property is put up as a whole. Whichever method produces the highest amount whether 826 TARIFF HEABINGS. PARAGRAPHS 101-102 PLATE GLASS. the single bid or the aggregate of the unit bids determines who is the successful purchaser. Applying this principle to the involved sub- ject before you, you are to consider each in considering the whole, even though you legislate by schedules you are not prevented from taking into account the elements which would be controlling in one general bill; and as a matter of good sense and fair play, and in line with what our ex-President has termed the square deal, no schedule should be finally determined upon except it be thus regarded as part of the whole. Let me see if I can make another point clear to you as it is to me, concerning allowance for this difference between foreign and domestic cost, for it is of critical and far-reaching importance. The counterpart abroad of more than one industry here, as is true of this industry, is controlled in manufacture, output, management and distribution by a dictatorial combination or trust not only toler- ated but favored and legalized by the foreign government. Its unlawful existence here would be enjoined and its promoters indicted and convicted; and under certain circumstances, importations of the output of such a combination might be against the letter as well as the spirit of our antitrust acts. Surely you are not solicitous about contributing to its profits or advantage, though for the moment I am not directing your attention to this aspect of the case, but to the effect of such a combination upon the cost of production. Under this absolute dictation as to price and output only a given number of machines are permitted to operate, the others are sealed up and can be put into operation only by the sanction of the trust. The fac- tories are not run to their full capacity. If under such regulations you superficially figure the cost as it appears to be under this artificial restraint, you do not really arrive at it. Your calculations must take into account what would be the lower and the real cost if the factories were permitted to run naturally and freely and not held in the strangle hold of this trust, and as they would be run if you open the floodgates of a ruinous cutthroat, and unlawful competition upon home manufacture. An estimated foreign cost under such conditions is not the cost of manufacture but a manufactured cost; and the often perfunctory consular report ought not to be either the law or the gospel of your tariff revision. In all this there is no suggestion that you are to protect the profits of an industry industrial or agricultural. The time has gone by for controversy on this subject, since once and for all this contention has been rejected not only by the Democratic Party but by the American people. Yet we are not to deceive ourselves as to what is involved in this rejection. It does not mean that you are to be responsible for a course of conduct which will, without warrant, injuriously affect those profits, if they be legitimate. To state the case in its offensive aspects, suppose there are two industries producing profits even arti- ficially through the protection of the tariff; it would not be according to the spirit or even the letter of democratic doctrine to discriminate against one and hi favor of the other. Each industry is to be made to bear its burden of new legislation. Suppose you are legislating as 3 r ou soon will bo for a free list or, more accurately, a freer list of food stuffs. Are you not always having to reckon, of course, with the SCHEDULE B. 827 PABAGBAPHS 101-102 PLATE GLASS. problem of raising revenue bound to have some idea of equalizing of the new burdens upon the producer, as well as the new benefits to the consumer? You are not by your revision even to expose one such article to a ruinous competition from abroad, and let the other by reason of what you have done or failed to do, enjoy a full measure 01 protection. Such a course is not protecting profits but rather avoiding injustice, and I do not hesitate to say that there are instances where, though the tariff be in a sense prohibitory, it ought riot to be disturbed, pro- vided you can secure the necessary revenue elsewhere. Let us for a moment see whether this is not the correct conclusion. The Demo- cratic platform declares that "Articles entering into competition with trust-controlled products and articles of American manufacture which are sold abroad more cheaply than at home should be put upon the free list." Do you intend to disregard this principle, which you may consider good economic, as well as good political doctrine, when applied to the foreign trust-made product ? Clearly not, if you are mindful of home industry and our national dignity; and the correct application of that principle, as its logical corollary, may in some cases result" in a practical exclusion of such foreign product from competition with our own manufacture. We have been legislating in this country, civilly and criminally, against trusts and organizations opposed to the public welfare. Is the Government of the United States so much in need of money that it is, in ah 1 cases, anxious to collect at the customhouse revenue from the importation into this country of products which could not lawfully be made here ? Is there not some censorship to be exercised over the articles of such manufacture, and might not some one say without exaggeration that there are instances in which such duties would be in the nature of indefensible receipts ? We have rigorous laws as to the offering for sale of unwholesome food products, and would not long tolerate their importation into this country. Yet looking at the tariff as a relative question having to do with our national dignity and national policy and national revenue as well as with the general prosperity of labor and capital there is, under given conditions, no more justification for the importation of articles manufactured by the foreign trusts than there would be for permitting the importation of such unwholesome food products. For one may not be more injurious to the physical body than is the other to the body politic. If you are to legislate for free bread and free beef and leave other branches of agricultural products unaffected by your revision, how can that course be justified unless you are driven to it by the necessity of providing revenue; and assuming that revenue to be as satisfac- torily realizable by a reduction of duties generally as to all food prod- ucts, is there any question as to your proper course ? For with equal revenue provided in the two cases, you are benefiting the general public, while at the same time you are not discriminating against the particular producer. What is true of agricultural products is true also of manufacturing products. From a narrow, selfish, superficial point of view it might seem to be to the immediate benefit of the manufacturer that as many agricuL 828 TABIFP HEABINGS. PARAGRAPHS 101-102 PLATE GLASS. tural products as possible, irrespective of the comparative equity of such a program, be put upon the free list, so that the necessity of providing for this abandoned revenue enure to the greater protection and advantage of the manufacturer. But again such a procedure, as I have said in another aspect of the case, would ignore the interest of the manufacturer in a common prosperity. And the manufacturers I represent are unalterably opposed to and protest against such an injustice, and urge that a similar equitable principle of justice be applied to them as to the farmers. Nor are all these suggestions contrary either to the lately announced platform of the Democratic Party or to its old articles of faith reaching back to the founder of that party, Jefferson himself ; for no one better than he understood the complexity of the tariff or the labyrinth from which we are to find our way out. Moreover, he looked at the tariff question as we must all look at it, unless we put a premium upon error, as a relative and not an absolute question. He held no brief, as you must hold no brief, either for or against the manufacturing industries of this country; but a brief for the national welfare. He saw the problem, not hi a valley with horizon shut in, but, as you must desire to see it, from high peaks where broad and extended vision was possible; and he took into consideration some things which you may well take into consideration, additional to those I have just endeavored to urge upon your attention. He was not in accord with Hamilton as to the protection of our manufacturing industries, whether infant or adult; but he did have this one fundamental controlling thought, showing how complete and broad his view was that in such legislation as you are under- taking there are involved not alone individual cases but national and even international considerations as well. And he said these words, which you can with much benefit ponder over now: Should any nation, contrary to our wishes, suppose it may better find its advantages by continuing its system of prohibition, duties, and regulations, it behooves us to protect our citizens, their commerce and navigation, by counter prohibitions, duties, and regulations, also. Free commerce and navigation are not to be given in exchange for restrictions and vexations; nor are they likely to produce a relaxation of them. And again: We wish to encourage navigation and commerce by throwing open all the doors of commerce, and knocking off its shackles. But as this can not be done for others, unless they will do it for us, and there is no probability that Europe will do this, I suppose we shall be obliged to adopt a system which may shackle them in our ports as they do us in theirs. Undoubtedly, these were correct views when Jefferson uttered them. Yet how much more pertinent are they now, and how much more emphatic \\ould certainly have been his expression if he were speaking at this time, when foreign Governments not only impose high duties upon our manufactured products but promote the exist- ence and favor the operation of trusts which would be unlawful here, but which, nevertheless, seek this market as a dumping ground for their product hi unequal, unfair competition with domestic manu- facture. To-day many of our great manufacturing interests, in order to carry on their foreign trade with profit, are obliged by the laws of those countries to establish within their borders and subject to their laws SCHEDULE B. 829 PARAGRAPHS 101-102 PLATE GLASS. foreign factories. To outside capital, but not to goods manufactured elsewhere, those countries issue a generous invitation. We do the same; and there is now no duty or embargo upon foreign capital which seeks here a profitable, competitive field for its operations; on the contrary, it meets our capital on an equal footing. The tune was when doubtless this was not so, but under the late interpretations of the antitrust laws by the Supreme Court, the door of opportunity to competitive industry is no longer closed and boarded up, no matter whether the capital employed be foreign or domestic, but thrown wide open. The fact that the output of a corporation is great or its operations extended, is not the test of unlawf ulness ; but the searching question is, How were they secured and how are they maintained? If by monopolistic practices, the act is utterly condemned by civil and criminal statute, and unfair trade and competition have received a death blow at the hands of our greatest court, over which presides the wisest judge in the English-speaking world. Therefore in large measure, when you come to frame your laws, you must, as a matter of national pride and commercial prestige, consider how other nations treat the industry, whose future you are affecting by your legislation. Jefferson not only advocated but he put into operation something else, which shows at least although it may be premature for you to adopt it how completely relative he regarded this question of the tariff, and how inseparably associated it was with other considerations having to do with the national welfare. In his effort to benefit the whole people he saw in the tariff a means of building up our merchant marine; and in 1802 was responsible for a discriminating tariff which provided that goods brought to this country in American bottoms should pay at the port of entry a much less tariff than those brought in foreign bottoms. And as a result, our merchant marine received an impetus which enabled it to secure a mighty influence in the carry- ing trade of the world raising it, if I recall rightly the statement of the chairman of this committee, from 17 to 90 per cent, which, by our slothfulness and inactivity and mistakes and indifference, we have all but lost. With the evidence confronting you everywhere that the whole subject matter of tariff revision is relative and not absolute, with the certainty that what you must do is not only to raise revenue but so to raise it as to cause the least disturbance to legitimate business, and setting your face always and unalterably against methods of busi- ness if there be such which would prey on the community, you are, by the many declarations of Democratic leaders, committed unqualifiedly to the proposition that you are to legislate with care and foresight and equity, so that neither the wheels of the machinery of government nor of industry shall come to rest. You are not to legislate either for a glut of revenue or for a glut of apparent but unreal prosperity. Too great a revenue might be responsible for national extravagance, and an abnormal prosperity would be more than likely to promote undue production and its corresponding depression together with a disregard of many considerations which must enter into our conceptions of a higher and more responsive citizenship. 830 TARIFF HEAKINGS. PARAGRAPHS 101-102 PLATE GLASS. Then, too, while the people accepted the pledge of the Democratic Party, as a pledge so to readjust tariff conditions that, so far as possi- ble, inequalities of burdens should be done away with, it was, as we all know, with the proviso that law-abiding nidus try was to be given a fair and reasonable opportunity to adjust itself to the new order you are to establish. That not only rules of conduct but rights of property often proceed from wrongs is familiar enough, not only to men of my profession but to all intelligent observers. If an unjust tariff has produced artificial activity, you are not ruthlessly to destroy the industry but to seek to regulate it and get it acclimated to the new conditions of exposure. You are not to take the hothouse plant which this country by its tariff policy rightly or wrongly and often it was wrongly done, I am free to admit has permitted to grow up and consign it to rough wind and weather without some thought of adequate provision for its shelter and support, merely telling it to enter at once and without aid into the struggle for existence and live. For you know it can not live, but must inevitably die. No roving commission was issued to the Democratic Party to com- mit injustice. You do not have to take my word for this. There sit men on this committee who are not strangers to this thought, but who have given it forceful utterance; and if the voters of this country had thought otherwise, no one in his senses can entertain the view that the late election would not have had an entirely different result. Permit me to give you a further authority for this statement. In 1909 Mr. Wilson wrote for the North American Review an article condemning utterly the Payne-Aldrich tariff. He characterized it as the " Tariff make-believe;" and I am in as much accord with his presentation of the matter as any of you can possibly be. Yet he said in that article words of prudence and wisdom and justice, just as over and over again he expressed the same sentiment in many a cam- paign speech. If he had taken any other attitude, not only could he not have been elected but he could not even have been nominated. The people trusted him; they trust } T OU and you will not now, I know, throw overboard the chart and compass of reason and put behind you the solemn assurances of the Democratic Party as you set forth on your voyage, for that would be to invite certain shipwreck not only for yourselves, but for your party and for the whole people. Rather you will summon to your aid and keep always to the front all tried and just methods to enable you to take the observations which will guide you aright. And certainly one of the methods is to be found in these words from the President-elect : The existing system was built up by statesmanlike and patriotic men, upon a theory which even the most skeptical economists must concede it possible to found a valid and effective policy. It is very likely that by slower, sounder, less artificial means the country might have worked its way up to the same extraordinary development and success, the same overwhelming material achievement and power; but that is a ques- tion no longer worth debate by practical men. As a matter of fact, the method of artificial stimulation was adopted, has been persisted in from generation to generation with a constant increase of the stimulation, and we have at last, by means of it, come to our present case. It will not do to reverse such a policy suddenly or in revolutionary fashion. SCHEDULE B. 831 PARAGRAPHS 101-102 PLATE GLASS. And lie added: Existing protection should not be suddenly withdrawn, but steadily on a fixed pro- gram upon which every man of business could base his definite forecast and systematic plan. I could multiply additional quotations of like import from Mr. Wilson and other leaders of the Democratic Party, but they would merely be cumulative and need only to be referred to in passing, for the view expressed is so sane that somewhere in the tariff revision program it must find expression. It may well be that all the industries I represent here did not need to have all this said in their behalf, for their only reasonably pros- perous condition rests upon the security of a present ability to com- pete on any just scale with foreign-made goods. Yet in a measure I say it in behalf of them all, irrespective of their ability to meet such competition, on account of their immediate concern with the general prosperity; for if this is legislated out of existence those industries, too, will find themselves among the debris you will be responsible for. And I say without fear of contradiction hereafter that if these reason- able views are not given heed to, we shall all live to see the day and we do not need to live long when there will be a reckoning once and finally with the resentment of the American people. If, on the contrary, as I am sure will be the case, you legislate wisely and do not reject the counsels of prudence and equity you will without doing violence to your convictions, but with their approval enjoy the high privilege of ushering in a new era of normal, legitimate prosperity, which wifl not be here to-day and there to- morrow, but which will stimulate and perpetuate as well the steady, economic growth of the activities of a whole people. Only by such a course can you hope to receive the commendation that you have been good and faithful servants; and this you cannot expect if you reject the very cornerstone on which you have agreed to build the new order; you can not to quote those words which sum up the highest obligations for political as well as social conduct resting on all of us keep the worcf of promise to the ear and break it to the hope. Mr. PALMER. Mr. Auerbach, I am interested in the foreign-trust proposition. It has been represented to me lately by the glass manufacturers in this country that there is in Germany a manufac- turing concern, of which the former owner, upon his death, created a trust in the Government to be run for a long time for the benefit of the employees. Do you know anything about that? Mr. AUERBACH. No; I am not familiar with it, but I will ask and find out. Mr. PALMER. I would like to know about that. If there is such a concern in Germany, as has been represented to me, would not that be a very serious competitor of those other trusts that you speak of there ? Mr. AUERBACH. Of course I should have to assume its existence, as I do not know about it. Its operation would depend upon the terms of the trust. It may be a hard and fast trust. Trusts as a rule being favored by the German Government, I am sure the Gov- ernment would enter upon the execution of no undertaking that would interfere with this general policy. 832 TABIFP HEARINGS. PARAGRAPHS 101-102 PLATE GLASS. Mr. LONGWORTH. Does it not seem to you that we would have had just exactly the source of obtaining the information that you have referred to, which you advocate, had it not been for the de- liberate action of the Democratic Party in opposing a tariff com- mission ? Mr. AUERBACH. No, I can not assent to that. Bills of revenue originate constitutionally here, and I think you should have aids to this committee in arriving at the result; but I do not think con- stitutionally you are entitled to have a boss. That is generally my notion about the Tariff Board. Mr. LONGWORTH. There was no intention on the part of anybody that the Tariff Commission should be anything more than a mere instrument for the purpose of finding out facts upon which this committee, primarily, and Congress were to act, and, as I under- stand, it is precisely the thing you are asking for; in fact, I heard you make a rather significant remark, it seems to me, a little while ago, that, if this committee were n,ot fully cognizant of the question of cost of production, it is not competent to legislate. Mr. AUERBACH. I think so. The question of what agencies they shall employ, whether an agency such as the Tariff Commission, created in the way in which it was created not by the House of Representatives at all, but a personal agency of the Executive Office is quite another thing. I do not by any means intend to approve of that. Mr. PALMER. You will remember that Governor Wilson, in his speech of acceptance, said that the tariff would be revised down- ward, and steadily downward. Mr. AUERBACH. I recall his statement. Mr. PALMER. That statement was accepted by the Democratic Party everywhere throughout the country as the policy upon which we would enter if brought into power. Mr. AUERBACH. Yes; I understand that. Mr. PALMER. Now, is it not a fact, therefore, that any statement before this committee by American manufacturers asking us to leave the duties as they are or to increase them, is an invitation to us, as Democratic members of the Ways and Means Committee, to break the pledge that our candidate made, and that we have made, to the American people recently ? Mr. AUERBACH. Well, if there were any undertaking in the speech of acceptance by the President-elect of the United States that there was to bo any absolute hide-bound rule by which you were to deal with industry, irrespective of the special conditions as they would arise; if he has made that commitment on the part of himself that this was to be revision downward, so that it might be impossible for you to carry it into effect without gross individual injustice, then I say that this speech is not binding upon you. I believe that irrespec- tive of what lias been said by anybody that if anyone in public life or seeking public of I ice should assume that arbitrary position, he will, as I have said, have to meet once and finally, as he has always had to meet under such conditions, the resentment of the American people. Is there any doubt about that, in your opinion? I do not believe there is. However, I do not understand from any declaration Mr. SCHEDULE B. 833 PARAGRAPHS 101-102 PLATE GLASS. Wilson has made that he believed the country was entering upon any such course of procedure. Mr. HILL. In the course of your remarks, you quoted President- elect Wilson. Now, I want to read you a later utterance of his. On the 21st day of August of this year, three months later, he made this statement in New Jersey: But I want at every turn of every argument that I make of this nature to say that the legitimate enterprises of this country have absolutely nothing to fear If he had stopped right there, I would have a word to say, but he continues : provided they will stand on their own bottoms, but that they have everything to fear if all they have under them is the prop of a tax, which everybody is obliged to pay in order that they may be able to conduct their business, and I believe that is a just principle of Government. Do you know of any protected industry in the United States that is not sustained by the prop of a tax? Mr. AUERBACH. I think that is right doctrine. If the sole support of an industry is a tax enacted for its own selfish interests, and that is the only support it has, it ought to be withdrawn. Mr. HILL, lou fail to recognize, then, or take into consideration the difference in wages ? Mr. AUERBACH. No, clearly not, but also all the other factors I have referred to which go to make up the difference between the foreign and domestic cost of production. What Mr. Wilson clearly intends to state is that each industry is to stand upon its own bottom and be put upon a competitive basis, but not upon a ruinous basis. Mr. HARRISON. Is it not true that the importations of this tariff are onlv about half as much as thev were sixteen years ago, under the Wilson" tariff? Mr. AUERBACH. Yes; very appreciably less, and that is due to internal competition and the operations of the Foreign Trust. Mr. PALMER. Was there not a prosecution some years ago against the plate glass people ? Mr. AUERBACH. That I do not know. Mr. PALMER. What company was that ? The CHAIRMAN. That was the plain window glass company. Mr. PALMER. In your opinion, the revision which is to "be made must still be downward and steadily downward, but not horizontally downward ? Mr. AUERBACH. I do not know that I quite comprehend the mean- ing of that phrase. Those words are a little enigmatical to me. I would answer that question by saying that I do not believe there is a pledge on the part of the Democratic Party in its compact with the people that it is bound to revise everything it finds lying around, irrespective of the equities of the case and irrespective of this question of foreign and domestic cost and irrespective of the question as to whether the foreign industry is in the hands of a trust. Mr. PALMER. What proportion of the foreign trade is controlled by this trust that you speak of ? Mr. AUERBACH. All of it Mr. PALMER. All of it. 78059 VOL 1 13 53 834 TARIFF HEARINGS. PARAGRAPHS 101-102 PLATE GLASS. Mr. AUERBACH. All of it ? Mr. PALMER. Absolutely all of it ? Mr. AUERBACH. All of it. It is an international glass trust per- mitted by the Government. Of course, all such trusts are not only permitted but favored by foreign Governments. If we, too, want to favor the foreign trusts, operating in ways distinctly against our public policy, well and good. Mr. PALMER. We are apt to consider in this country a trust as a business concern which controls a very large proportion of that par- ticular business. Mr. AUERBACH. I think that would be erroneous. Mr. PALMER. We do so, however. Mr. AUERBACH. No. I do not think you and I do, as lawyers. Mr. PALMER. We speak of the Unitea States Steel Corporation as the Steel Trust, yet I observe that it controls only about the same proportion of steel business as the Pittsburgh Plate Glass Co. controls of the plate-glass business. Mr. AUERBACH. One might perhaps be justified in calling that a trust, inasmuch as it is popularly understood that the Government in the pending litigation has so characterized it. A corporation may have a large amount of business, a large output, and a large control of trade. That is an element in determining what is a trust. But that is not the controlling element, the final thing. Under the interpreta- tion of the Supreme Court the question now is, "How was the volume and control secured, and how are they maintained? Were they secured through monopolistic practices, and are they maintained through monopolistic practices either by raising the price or by cut- throat practices, by lowering the price or otherwise, so that a com- petitor is killed and its business absorbed ?" If so, there is a clear violation of our antitrust acts. Mr. DALZELL. As I understand, all you want is to maintain the present law. Mr. AUERBACH. That is all I dare ask for, though the difference between the foreign and home cost of production as set forth in our brief would justify me in asking for an increase rather than in merely protesting against a decrease of duty. Mr. AUERBACH. If there is anything further you would like to have, we shall be glad to submit it. The Audit Co. of New York has not been able to do all of its work yet, but if you want it done, although it will be a matter of considerable expense, several thousand dollars, the Audit Co. will go over every plant engaged in this industry in the United States and submit its report, as you will find in the back of the brief it has, within the limited time at its disposal, done as to two or three corporations. Before I close, I wish to say that I am told that the trust Mr. Palmer has referred to is a trust in optical goods in Germany, Schoot & Genos- sen, at Jena, and has nothing to do with the plate-glass industry. SCHEDULE B. 835 PABAGBAPHS 101-102 PLATE GLASS. BRIEF SUBMITTED ON BEHALF OF THE AMERICAN PLATE GLASS INDUSTRY. [Represented by the following companies: Allegheny Plate Glass Co.. Glassmere, Pa.; American Plate Glass Co., Kane, Pa.; Columbia Plate Glass Co., Blairsville, Pa.; Federal Plate Glass Co., Ottawa, 111.; Heiden- kamp Mirror Co., Springdale, Pa.; Penn American Plate Glass Co., Alexandria, Ind.; Pittsburgh Plate Glass Co., Pittsburgh, Pa.; Saginaw Plate Glass Co., Saginaw, Mich.; St. Louis Plate Glass Co., Valley Park, Mo.; Standard Plate Glass Co., Butler, Pa.; Edward Ford Plate Glass Co., Rossford, Ohio; Kit- tanning Plate Glass Co., Kittanning, Pa.] To the honorable members of the Ways and Means Committee of the House of Repre- sentatives: Although the above companies are rivals in business and carrying on their operations under keen competitive conditions between themselves, they have joined in this appeal to Congress because the plate-glass industry in the United States is in a pre- carious condition even under the present tariff. This condition exists by reason of the enormous difference between the cost of production here and abroad, and also owing to the operations of the European Plate Glass Trust. This trust in its control of the output and the regulation of prices is favored by the policy of the foreign Government, while in this country a similar trust would be condemned by public opinion and be unlawful. The subject of this brief comprises paragraphs 100, 102, 103, 104, and 109 of the Payne-Aldrich tariff bill. In the following presentation we refer specifically to paragraph 102 which has to do with oast polished plate glass, unsilvered. The present duty under paragraph 102 is as follows: Cents per square foot. On plate glass measuring 384 square inches and under 10 On plate glass above 384 square inches and not exceeding 720 square inches. . . 12 On plate glass above 720 square inches 22J WORLD PRODUCTION AND CONSUMPTION. The production of plate glass throughout the world is estimated at 125,000,000 feet, a little less than one-half of which is produced and consumed in the United States. The European factories have a capacity of 45 to 50 per cent more than their present production. Their production is curtailed and prices fixed under a trust combina- tion which would be indictable here. CONDITIONS OF INDUSTRY ABROAD. Factories. The plate glass factories of Europe are equipped with modern machinery and are as up-to-date and efficient as those of the United States. A great advantage to the foreign manufacturer is that the cost of building and equipping the manufacturing plant abroad is less than one-half the cost of a similar plant here. This item is partic- ularly important in that it enables them to turn over their capital every 8 to 10 months, whereas in the United States it is impossible to turn the capital over more often than once in two years. This extraordinary condition is made possible, first, by the difference in the original cost of the plant; and second, by the fact that they are main- taining through their syndicate operations a very high price for their product which would be considered intolerable in this country, whereas the market conditions in the United States have barely permitted the manufacturers to maintain their existence. This makes the overhead charges and depreciation of the Belgian manufacturers, figured per foot, materially less than one-half what they are in this country. Labor. The foreign plants have the advantage of labor that is better trained and more skillful than American labor, as abroad the trade descends from father to son, and here the laborer has to be trained and developed. The rate of wages in Belgium, the chief producer and exporter of plate glass, is less than one-third that which is paid in this country, and enables the manufacturers there to produce glass cheaper than any other country in the world. 836 TABIFF HEARINGS. PABAGEAPHS 101-102 PLATE GLASS. The producing countries are Belgium, Germany, Austria, France, England, Italy, Spain, and Russia. As Belgium produces more glass than any of the other countries, at the lowest cost, and .exports 95 per cent of its product, we submit herewith a report of the consul general residing at Brussels, giving rates of wages in Belgium, to wit: [United States Daily Consular and Trade Reports, Oct. 31, 1912, p. 566. From Consul General Ethelbert Watts, Brussels, Belgium.] "FOREIGN WAGES AND COST OF LIVING. "According to data published by the Government, wages in Belgium are lower generally than in any other European country. The Annuaire Statistique, which gives the official figures for 1910, shows the following daily wages: Number of wage earners. Daily wages. Number of wage earners. Daily wages. Male, under 16 years: 4 667 . .... Less than $0.10 Male, over 16 years Continued. 1,653 $1.25-*1.35 12,748 $0. 10-. 19 4,357 , $1.35 and over. 15 090 . 19-. 29 Female, under 16 years: 10,128.. . .'0. 29 and over. 3,575 Less than $0.10 Male over 16 years' g 480 . . $0. 10-$0. 19 20,883 . Less than $0. 29 6,946 $0. 19 and over. 28 638 $0. 29-$0. 38 Female, over 16 years' 62,195 .38- .48 6,609 Less than $0. 19 87 Oil .48- .58 i 22,420 $0. 19-$0. 29 100 367 . ... . 58- . 67 21.349 .29- .38 65 781 . 67- . 77 13 429 .38- .48 50,874 . 77- . 87 5,362 .48- .58 21 134 . 87- . 96 2 233 .58- .67 13,832 .97- 1.06 652 . 67- . 77 5,776 1.06- 1.16 395 $0.77 and over. 3,668 1.16- 1.25 "About 65 per cent of men workers over 16 years earn less than 68 cents. Of the women, 67 per cent earn less than 39 cents, and 93 per cent less than 58 cents. "In 1907 inquiry was made at the public schools of 18 towns, distributed over the country, into the quantity and kind of food each one of the children had had during the preceding 24 hours. The answers compiled have shown that 21.33 per cent of the children were insufficiently nourished." The rates of wages paid to Belgian plate-glass workers are no higher than the general rates above given, while the average rate of wages paid by the American plate-glass manufacturers is about $2.30 per day. Tariff. Germany (whose tariff is admittedly the most scientific in the world) taxes plate glass at a flat rate equivalent to 12.42 cents per square foot; Austria, a flat rate equivalent to 12.60 cents per square foot; Spain, a flat rate equivalent to 14.80 cents per square foot; France, 5.40 rents to 6.30 cents per square foot; and Italy, 7.79 cents to 9.86 cents per square foot. The European countries maintain this tariff notwithstand- ing that their costs of production are not materially higher than the cost of production of Belgian manufacturers. Foreign Plate Glass Trust. The European manufacturers are organized into one of the strongest and most successful trusts known to the commercial world, controlling absolutely and arbitrarily the output of its members. This trust, known as the Inter- national Glass Convention, was organized in 1904. and has been extended until 1924. It includes nearly all the continental manufacturers of plate glass. It has been very successful in its operations, some of its members earning as high as 83 per cent per annum on their capital, and paying as high as 30 per cent per annum in dividends, as is shown by the following extracts from the balance sheets of the two principal manufacturers in Belgium, published in 1911, according to the Belgian law. Capital. Earnings. Per cent. Dividend. Percent. Saint Rooh Francs. 4 500 000 Francs. 3.384,047 75 Francs. 1.350.000 30 2 000 000 1 004 93S 83 COO 000 30 SCHEDULE B. 837 PARAGBAPHS 101-102 PLATE GLASS. This trust and its operations are described in the following extracts from the United States Daily Consular Trade Reports: [United States Consular and Trade Reports, Aug. 18, 1909, pp. 2-3.] "PLATE GLASS TRUST IN EUROPE. * * * * * * * " The scope of the plate-glass syndicate is mainly to place the manufacturer of plate glass in direct connection with the consumers of this article, in order, in a measure, to give stability to the selling price and to prevent overproduction, which always results in excessive damage in any form of industrial activity. "LIMITING PRODUCTION. "In order to attain this object, the syndicate agreed theoretically, it is stated, to reduce the productive capacity of the syndicated concerns to 126 days per year work- ing at full power. They have therefore imposed on the members of the combine a stoppage of work for a period of 180 days out of the 306 working days of the year. In this arrangement there is a tendency to oppose the interests of the working force, the members of which can with difficulty accept such a long period of enforced idleness. In order to obviate this inconvenience the shutdown was in practice regulated as follows: The factories in the combine were forced to remain in operation during the entire year, but with a productive capacity of machinery that would limit the output to what it would have been had they worked but 126 days during the year. Thus, a factory possessing 10 machines, according to the agreement, would have a productive capacity of 1,260 days working at full force., Instead of working 126 days at full force, however, the factory would work during the entire year but four of its machines, leaving the remaining six idle. ^This arrangement enabled the managers of the differ- eat factories in the combine to eliminate the least valuable element among their work- ing forces, and to retain only the most skillful workmen. Besides, there resulted a saving in the cost of operating a large number of machines. ******* " The board of management (conseil general) of the international syndicate follows very carefully the movements of the different markets; the board meets every three months in order to regulate the matter of production. Besides a special committee examines each month all statistics communicated by the members of the syndicate, while an organization composed of agents of the principal factories meets at least once a month in order to regulate the question of orders received and communicate to the board of managers such information as may be deemed opportune." The United States trade report of July 22, 1912, page 376, says, concerning the Belgium industry: "CONDITIONS IN THE PLATE-GLASS INDUSTRY. "Plate glass is one of the most important articles of export to the United States. The shipments last year were valued at $568,199, compared with $1,166,026 for the previous year. The large decrease last year was due to the fact that in 1910 one of the principal plate glass factories in the United States was destroyed by fire, thereby increasing the demand for the Belgian product. "In 1904 the International Glass Convention was organized, with a view to control the production and sale of polished glass. With the exception of two companies, one in France and the other in Belgium, all the plate-glass companies in Germany, Austria, Belgium, France, Netherlands, and Italy agreed to the convention which is still in operation and which operates to the satisfaction of all concerned. Since the agreement the plate-glasss manufacturers have prospered, while prior to that time the industry was unsatisfactory. Great improvements have been made in the machinery. A glass- polishing machine of 1 square meter to-day produces as much or more than one of 2 square meters before the convention. Great improvements have been made in the manufacturing of the rough glass (glace" brute) and the cost greatly reduced. Eight years ago the cost of manufacturing glass in Belgium was 9 to 10 francs ($1.74 to $1.93 per square meter (10.76 square feet). At present it is 5.60 to 6.50 francs ($1.06 to $1.25) and rough glass is now manufactured at the cost of less than 2.50 francs (48J cents) per square meter (10.76 square feet) or 4J cents per square foot." 838 TARIFF HEARINGS. PARAGRAPHS 101-102 PLATE GLASS. The report of November 6, 1912, states as follows: "Belgium plate-glass manufacturers are very prosperous, paying yearly dividends as high as 30 per cent. . Because of the cheap labor the plate glass industry in Belgium maintains on all foreign markets its power as price regulator. The advantage of a low cost of production (11 cents United States currency per square foot of polished plate glass) is assisted by the successful operation of the international syndicate of plate glass manufacturers which regulates the selling prices according to conditions existing in such foreign market. These arbitrary selling prices are consequently of great variety. For example, the same glass and the same size, quality for silvering are sold (off the gross prices of the same list) at 20 per cent discount for England and 30 per cent discount for the United States, and quality for window at 30 per cent and 2J per cent for England against a discount of 45 per cent and more for the United States. "The reason for this discrimination is said to be the fact that American plate glass manufacturers are not associated with the European syndicate and consequently the syndicate establishes a low range of prices for the American market on the kinds and sizes of glass which, through overproduction, must be disposed of by the American manufacturers regardless of cost." Organization of foreign sales agency. Within the last 30 days a new and most im- portant step has been taken by the foreign manufacturers of plate glass. The trust described above left to each factory the sale of its own product, under certain restrictions which left the manufacturers in limited competition with each other. The product of each factory being handled separately, the trust had not the power to control and regulate markets as it would have had if it had charge of the selling of the entire product of all its members. This power has just been vested in the trust through the organiza- tion in Belgium of a selling company, which will purchase from each manufacturer his entire product and then distribute and sell it in such markets and at such prices as is deemed to the best interest of all the manufacturers in the syndicate. The con- trol of the entire output of the factories gives the trust an enormous power. It can undersell competitors in any market in the world and recoup its losses by adding them to the price of glass in markets that it controls. The trust is therefore in a position to at once successfully invade the American market, which consumes practically half the glass production of the world, and is the only market which the foreign manufac- turer does not at present control, although it does regulate the prices upon part of the American product and could easily do so on all of it. CONDITIONS OF THE INDUSTRY IN THE UNITED STATES. Production. The production in the United States is about 60,000,000 square feet, about 47 per cent of which is produced by the Pittsburgh Plate Glass Co. and the remainder by 11 separate companies. None of the American product is exported, excepting a negligible quantity to contiguous territory to supply pressing require- ments. The capital invested in the industry in this country is about $49,000,000, the smallest concern in the industry having a capital investment of about $1,000,000. The average number of men directly employed in the industry in this country is about 11,000. Those indirectly employed will equal more than twice this number. Importations. Importations of unsilvered polished plate glass into the United States from 190G to 1911, inclusive, in feet, were: Duty. 1906 1,050,313 1907 1,207,576 1910 1911 10 cents. 505,478 390, 159 Duty. 10 cents. 5,178,212 4,577,059 2,590,302 1,611,845 49,706 12\ cents. 2,057,277 2,800,542 Duty. S2\ cents. 898,294 741,947 643,715 300,010 14,813 $&\ cents. 511,860 683,278 Duty. S5 cents. 164,416 180,913 150,345 22,517 7,068 Total. 7,291,235 6,707,495 3,827,224 2,279,933 3, 150, 176 3,873,979 An inspection of the table of imports given above shows that most of the importa- tions consist of small sixes. Small sizes of plate glass have never been adequately protected, and the American product under 384 square inches, now bearing a duty of 10 cents per square foot, and above same but not exceeding 720 square inct es bearing a duty of 12 cents per square foot, does not yield an average price equal to SCHEDULE B. 839 PARAGRAPHS 101-102 PLATE GLASS. the cost of production. (See Annexed report of the Audit Co.) This was not im- portant originally, because the production in this country was not equal to the demand for large sheets and there were large quantities of all sizes imported. The manu- facturer in those days contented himself with selling such quantities of small glass in the two brackets named as resulted from breakage and was incidental to the op- eration of his plant, which amounted to about 10 per cent. Prices to consumer. The prices to consumers of plate glass in the United States have, on the whole, been in distinct contrast to the upward tendency in the price of most commodities during the last 10 years, while the manufacturers nave been com- pelled to pay more for the materials entering into its production and have been com- pelled to increase wages in keeping with the general upward tendency of wages, all of which for a time increased the cost of production. Nevertheless, by the intro- duction of labor-saving devices and new inventions, the tendency in the cost of pro- duction for the last four years has been downward, and the cost to the consumer has also had a downward tendency, as is shown by the following table, giving the retail price to the actual consumer: 1875 1880 1885 1890 1895 1900 1905 1908 1912 1 toSfeet $0.71 $0.51 $0.46 $0.40 $0.30 $0.31 $0. 1875 $0. 1875 $0.22 3 to 5 feet .84 .61 .55 .48 .36 .38 .225 .225 .247 5 to 10 feet 1.12 .80 .72 .64 .48 .60 .36 .36 .342 10 to 25 feet 1.49 1.06 .96 .85 .63 .81 .416 .39 .365 25 to 50 feet 1.56 1.11 1.01 .89 .66 .85 .436 .408 .38 50 to 100 feet 1.69 1.21 1.09 .97 .72 .90 .462 .432 .392 COST OP MANUFACTURE OF GLASS IN THE UNITED STATES. At the hearing before the Ways and Means Committee in 1908 there was a conflict of testimony as to the cost of manufacturing plate glass in this country. At that time a representative of the importers of plate glass stated that the importers "would ask for nothing better than to have the subject (cost) gone over by a public accountant and the new tariff based on the difference between the cost of production here and abroad." (Hearings of 19'08, Schedule B, p. 1124.) Upon receipt of your notice of these hearings the Audit Co. of New York was author- ized to proceed at once with the work of ascertaining the cost of production of the American manufacturers of plate glass by auditing the books of the plate-glass manu- facturers in this country, and has worked diligently upon the preparation of this audit, but has not been able to complete an audit of all the companies up. to the date of draw- ing this brief. It has found that the average cost of manufacturing plate glass by the companies so far examined was, in 1909, 28.16 cents per square foot and in 1912, 23.98 cents per square foot before adding depreciation. With depreciation added, but without allowing anything for interest on bonds or capital invested, the cost of glass per square foot was, in 1909, 33.71 cents and in 1912, 28.45 cents. (See audit annexed.) The Audit Co.'s chief mechanical engineer has carefully estimated the cost of de- preciation over and above the sums which have been charged for repairs and main- tenance. The aggregate charged for the maintenance of buildings and equipment, including the depreciation, aggregates but 12 per cent on the actual costs of the build- ings and equipment, which is not higher than exists in many other lines of manufacture in the United States, although the strain on much of the equipment is very great, owing to the very high temperature and the necessity for running power plants with less than normal rest. The average selling prices obtained during the years ending July 31, 1909, and November 30, 1912, were as follows: Year ending in 1909. Year ending in 1912. 384 square inches and under . . Cents. 16.01 Cents. 13.43 Above 384 square inches to 5 square feet 22.39 21.45 Over 5 square feet 29.97 28.64 A comparison of the foregoing costs before deducting depreciation or any interest in bonds or capital, compared with the average selling prices for the same periods, show that all glass under 5 feet was sold at a large loss, while the margin of profit on glass 840 TAEIFP HEARINGS. PARAGRAPHS 101-102 PLATE GLASS. over 5 feet was but 1.81 cents per square foot in 1909 and but 4.66 cents in 1912. If we include depreciation, which is an actual cost of production and should be invariably considered, there existed on sales of glass over 5 square feet an actual loss in 1909 and but nineteen one-hundredths cent profit per square foot in 1912. The companies which have been examined by the Audit Co. on the average there- fore show losses instead of gains, after considering depreciation, but before allowing anything for interest on bonds or upon actual capital invested. The companies examined are fair examples of a majority of the manufacturers. If this committee desires it, the audit company will be instructed to proceed with the audits of the remaining companies or we shall be glad to have the committee designate any competent auditing concern to complete the audits. FOREIGN COST OF PLATE GLASS. The cost of plate glass abroad is understood to be from 10 to 11 cents per square foot, and this is borne out by the United States Daily Consular and Trade Keports of July 22, 1912 (p. 376): "Eight years ago the cost of manufacturing glass in Belgium was 9 to 10 francs ($1.74 to $1.93) per square meter (10.76 square feet). At present it is 5.60 to 6.50 francs ($1.06 to $1.25), and rough glass is now manufactured at the cost of less than 2.50 francs (48 cents) per square meter (10.76 square feet), or 4 cents per square foot." And November 6, 1912 (p. 688): " The advantage of a low cost of production (11 cents, United States currency, per square foot of polished plate glass) is assisted by the successful operation of the inter- national syndicate of plate-glass manufacturers, which regulates the selling prices according to conditions existing in each foreign market." The present Belgian cost, as above, is the cost on the basis of operating at 66 per cent of their capacity, and would be decreased if the foreign syndicate should release the excess capacity and let their factories run to full capacity . FREIGHT RATES. The transportation problem is another phase of the tariff question, and must be taken into account. Plate glass can be imported from Antwerp, Belgium, to any of the Pacific coast cities for approximately 2 cents per square foot and in any quantity. We now pay the railroads in this country about 7 cents per square foot to transport plate glass from the factories to the Pacific coast in carloads and about 10 cents on less than carloads, and the railroads have filed rates to increase this charge to 10 cents per square foot in carloads and 18 cents per square foot on less than carload quantities. The rate from Antwerp to New Orleans is less than 1 cent per square foot regardless of the quantity of plate glass shipped. The rate from the Pittsburgh district factories to New Orleans on American-made plate glass is about 3 cents in carloads and about 5 cents per square foot on less than carloads. ALL PLATE GLASS COSTS THE SAME PER SQUARE FOOT, REGARDLESS OF SIZE. It should be borne in mind that a square foot of plate glass costs the same amount whether manufactured in large or small plates, because it must of necessity be cast first in large plates exclusively. Glass can not economically be melted in small quantities. It is necessary to manufacture in large sizes, in the course of which manufacturing process the unavoidable breaking and cutting down for imperfections produces some smaller sizes under 5 square feet. Normally this production of small sizes, to wit, under 5 square feet, is about 10 per cent. In answer to the statement made by the representative of the importers four years ago, that the cost of small glass was not the same as the cost of large glass, and to the effect that the small glass was a by-product, we wish to distinctly say that neither one of these statements is in accordance with the facts. Assuming now for the sake of argument that the 10 per cent of glass under 5 square feet above referred to is a by-product, it must be borne in mind that the consumption of the country for glass of this character has now grown to be nearly 50 per cent of the entire production, which compels the manufacturer to cut 35 to 40 per cent of additional glass which would normally be large sizes down to the market requirements under 5 square feet, and which can certainly not be considered a by-product from any standpoint. The query may naturally arise as to why the manufacturer should supply this additional glass if he does it at a loss. The answer is that by increasing his output SCHEDULE B. 841 PARAGRAPHS 101-102 PLATE GLASS. by this large additional amount of business he is enabled to operate his plants nearly to their capacity, and thus reduce his general production cost. If the American manufacturer were to cease to supply this business, the cost of production would be advanced at least 3 cents per foot. We do not claim that all glass under 5 square feet is sold at a loss, because for the finer qualities we get what appears to be a fair price; but in order to secure the small pieces of fine quality, it is necessary to cut out of the large plates the patches of fine quality, with the result that this cutting reduces the balance of the plate to odds and ends and strips. The average price secured for all the glass sold under 5 square feet has always netted a loss to the manufacturer, FOREIGN TRUST SELLING AGENCY A NEW PERIL TO THE AMERICAN INDUSTRY. The great danger to the American plate-glass industry is that the foreign trust, through its newly formed selling agency, is in a position to run its plants at increased capacity, and by so doing reduce its general cost very considerably and to dump the surplus product into the United States at shop cost or less. The foreign trust selling agency can sell its surplus product in the American market at a price of 10 or 11 cents per square foot. This price, plus the existing rate of the American tariff, would enable the glass to be sold to the jobbers in the United States at an average price which the American manufacturer would have to meet at a loss. This would drive the American manufacturers out of business. When it is considered that there is this trust in Europe which has controlled the output for years and that within the last 30 days it has organized a selling agency which will handle the entire product and sell it at such prices as may seem best to the foreign manufacturers, and that the only market in the world in which they can dump their product is the American market (the only market they do not now control), your committee must realize that there is a grave danger hanging over the American industry which should incline Congress to increase rather than to main- tain the present rate. The argument so far has treated of cast polished plate glass, unsilvered, covered in paragraph 102 of the existing tariff. All glass covered by paragraphs 100, 103, 104, and 109 is competitive with the product of the American factories, and the differences between the rates of tariff fixed in those paragraphs and those fixed in paragraph 102 are in logical balance with the difference in the character of the prod- ucts and cost of production, and the same relation should be maintained. Respectfully submitted. Allegheny Plate Glass Co., Glassmere, Pa.; American Plate Glass Co., Kane, Pa.; Columbia Plate Glass Co., Blairsville, Pa.; Federal Plate Glass Co., Ottawa, 111.; Heidenkamp Mirror Co., Springdale, Pa.; Penn American Plate Glass Co., Alexandria, Ind.; Pittsburgh Plate Glass Co., Pitssburgh, Pa.; Saginaw Plate Glass Co., Saginaw, Mich.; St. Louis Plate Glass Co., Valley Park, Mo.; Standard Plate Glass Co., Butler, Pa. JANUARY, 1913. THE AUDIT Co. OF NEW YORK, New York, January 3, 1913. To the Committee of Plate Glass Manufacturers, New York City. DEAR SIRS: Agreeably to your request, we have audited the books and accounts of certain plate-glass manufacturers for the two years ending July 31, 1909, and November 30, 1912. 842 TAEIFF HEABINGS. PABAGRAPHS 101-102 PLATE GLASS. The average sales prices obtained for the various sizes and the costs of production we find to be as follows: Year to July 31, 1909, average per square foot. Year to Nov. 30, 1912, average per square foot. Prices from net sales: 384 sqnarfi innhes and iindnr ....... , , , , Cents. 16.01 Cents. 13,43 384 square inches to 5 square feet 22.39 21.45 Over 5 square feet 29.97 28.64 Costs of production before adding depreciation 28.16 23.98 Add depreciation 5.55 4.47 Costs after depreciation but before adding Interest on bonds and capi- tal invested 33. 71 28.45 We hereby certify that the foregoing average results form a true showing as prepared from the books of the companies audited by us, excepting as to depreciation, which we have carefully estimated. Very truly, yours, THE AUDIT* Co. OP NEW YORK. A. W. DUNNING, President. G. A. BOWERS, Secretary. REPLY BRIEF SUBMITTED ON BEHALF OF THE AMERICAN PLATE GLASS INDUSTRY. [Represented by the following companies: Allegheny Plate Glass Co., Glassmere, Pa.; American Plate Glass Co., Kane, Pa.; Columbia Plate Glass Co., Blairsville, Pa.: Federal Plate Glass Co.. Ottawa, 111.; Heidenkamp Mirror Co., Springdale, Pa.; Penii American Plate Glass Co., Alexandria, Ind.; Pittsburgh. Plate Glass Co., Pittsburgh. Pa.: Saginaw Plate Glass Co., Saginaw, Mich.: St. Louis Plate Glass Co., Valley Park. Mo.; Standard Plate Glass Co., Butler, Pa.; Edward Ford Plate Glass Co., Rossford, Ohio; Kittanning Plate Glass Co., Kittanning, Pa.] To the honorable Members of the Committee on Ways and Means, House of Representatives: By permission of your committee we file this supplemental brief in reply to the briefs filed by Semon. Bache & Co.. on December 1. 1911 (at least bearing that date, though perhaps filed later), and January 13, 1913, In the interest of the economy of your time, it will be necessary to call your attention to a few of these misstatements. At the outset it should be stated that the briefs were written by importers either not knowing or suppressing the facts, who naturally view the matter from the stand- point of advancing their interests through creating a large market in the United States for European products, and are wholly indifferent, if not hostile, to the prosperity of the American manufacturer. We wish particularly to call attention to two features of their brief: I. That the Audit Co.. of New York, which made a report that certain of the com- panies it had examined had produced little, if any. earnings, had selected those com- panies with a view of being able to make such a report. The fact is wholly misrepre- sented. These companies are among the most modern and representative of the whole industry; and. until the committee indicated no desire to have the remaining com- panies examined, it was intended that the Audit Co. should make a complete audit of all the companies engaged in this industry. That offer was made on the oral argu- ment, and still holds good. II. The assertion to the effect, that the foreign plate glass convention is "not a trust at all," is sufliciently contradicted by themselves in their statement in the same para- graph that the convention only primarily adjusts production, and incidentally fixes prices. To show the inaccuracy of this statement, and the real scope and power of this foreign trust, we append in original 1 and translation, in Exhibit A hereto annexed, articles fcpom the Action Economique, a Belgian publication, of December land 8, 1912. The novel but incidentally criminal course suggested in the importers' brief is for the American manufacturer to retaliate against the foreign trust by itself engaging in what in this country would be a conspiracy. The foreign trust may seem of little significance to importers inasmuch as it is their ally; but to the American manufacturers its significance is of vital importance, because 1 Translation only printed. SCHEDULE B. 843 PARAGRAPHS 101-102 PLATE GLASS. it is a legalized organization which can so control an industry and dictate prices as to enable its members to make 75 to 80 per cent a year, and possesses a power which, if unfairly favored by American legislation, must inevitably be exercised in this market to the disaster of the home industry, even now struggling to keep its feet. Another evidence of the importers' willingness to confuse the subject and make it difficult for the committee to clearly comprehend the actual conditions existing in this industry in regard to importations, is that their briefs do not show the division between glass in which the American manufacturers compete only among them- selves, and glass in which the American manufacturers are in active competition not only among themselves, but with the foreign producers. The plate-glass business divides itself into two general classes, viz : First. Glazing quality (the kind of glass used for windows), with regard to which there is the keenest and most active domestic competition, and which forces the manufacturers to sell it without any regard to the rates of duty imposed; and, Second. Glass of silvering quality, glass of selected quality and sizes for special purposes, with which the American manufacturers are now, and always have been, in keen competition with the foreign manufacturers. The imports, no matter whether large or small, for the last 15 or 20 years have been almost exclusively of this character. Disregarding this fact, the importers, when they compare American prices with foreign prices and the existing rates of duty, show only the prices for glazing quality, as to which we are not in competition with the foreigner, and give you the impression that this is the only kind of glass the American manufacturers make, suppressing the fact as to the prices for silvering and selected qualities and special sizes, with which we are in active competition with the foreigners. Four years ago, when these importers were before the Committee on Ways and Means, they stated that the American manu- facturers could not produce silvering and selected qualities and that they were not, therefore, entitled to protection thereon, the inference being that if we were able to make silvering quality, and were therefore actually in competition with the foreign manufacturers, we might be entitled to proper protection. Mr. Goertner, the im- porters' representative at that time, made the following statement (p. 1125, Vol. II, Tariff Hearings 60th Cong.): " The glass now imported is imported because it is especially suitable for the pur- poses. It is not really in direct competition with American glass." Now that it has been conclusively shown that the American manufacturers are able to supply the fine qualities required, the importers carefully fail to state the fact that while glazing quality is selling at low prices the American manufacturers are in active competition with the foreigners on all silvering and selected qualities and special sizes, which represent a very important part of the business. It has been intimated that a tariff on plate glass should be on a scale corresponding to the large number of gradations in the quality, but this is impracticable from an administration standpoint. The distinction of grades is a matter of expert judgment, made under special conditions, requiring such a large amount of space that it would be impracticable in the Government warehouses, and every sheet of glass imported would have to be separately inspected. A tariff based on quality would be productive of endless disagreement and frauds. As proof of this statement, we quote Mr. Goertner (Hearings of Nov. 23. 1908, p. 1131): "Mr. UNDERWOOD. Can you describe to the reporter the distinction technically between these two classes of glass (silvering quality and glazing quality) so that the committee can technically distinguish it? "Mr. GOERTNER. It could not be described to anybody, Mr. Underwood. I could not describe it to another man in the trade; you can only point it out when the two classes are in front of you. It is the most intangible proposition in the world; it is a matter of judgment." In answer to the importers' reference to the large increase in the production of what is ironically characterized as "a languishing industry," we wish to say that this increase in production was caused primarily by the enormous increase in the con- sumption of the country, and incidentally by the fact that once embarked in busi- ness every manufacturer is compelled to make every possible effort to reduce his costs and "keep in line with progressive conditions, and volume of output is always one of the principal determining factors in reducing costs. To accomplish this, the manufacturers in this country have been compelled to put in large amounts of new money for the purpose of keeping their equipment up to date; and while these addi- tional investments have not been profitable to the extent that investments normally should be, they have been absolutely necessary in order to escape dry rot and the ruin which otherwise would have inevitably overtaken them. 844 TAKUT HEARINGS. PABAGBAPHS 101-102 PLATE GLASS. The importers claim that the present rates of duty are dangerous because they put a premium upon the promotion of trade combinations. This statement is at least lack- ing in seriousness, for, if the manufacturers were ever going to combine for the purpose of advancing their own interests at the expense of the consuming public, they would have done so. To-day, with the late interpretation by the Supreme Court of the antitrust acts, the suggestion of such a combination is preposterous. The plate-glass manufacturers as a whole have made very little money for the past 10 years; most of them have paid no dividends whatever, and the dividends have been totally inade- for any normal business condition; and of all this the public has been reaping its advantage. The importers say the American manufacturers only get 20 or 21 cents a foot, while in other parts of their brief they quote domestic prices which they say average from 30 to 41 cents per square foot. These contradictory statements need no comment, except that the American manufacturers readily admit that the selling prices have -een altogether too low too low, in fact, to leave anything for depreciation, and frequently nothing for overhead charges; but there never has been any average selling price for any American factory nearly as low as the figure of 20 to 21 cents. The importers claim that it is not necessary to verify the foreign cost which they give (14.79 cents), as it was practically admitted by the plate-glass manufacturers at the hearings in the Sixtieth Congress. They ignore entirely the fact that, by the introduction of the Lehr, an American device, it should be remembered, and other important improvements in methods of grinding and polishing, the foreigners have reduced their cost 3 to 4 cents per foot in the past four years. The comparative cost sheets submitted by the importers are ingenious only as they deal in invention and not in facts. For example: It is the cost sheet of an old type of kiln factory now obsolete; it omits altogether an important item of cost the breakage and shrinkage incident to manufacture. The shrinkage charge in connection with general expendi- ture is not sufficient to cover that incident to cutting orders, and can not by any pre- tense cover the shrinkage incident to manufacture; it charges soda ash at $26 per ton, a price that was current 20 years ago. The present price is about half that figure. These facts, which could be largely added to, if it were necessary to give cumulative evidence of what we say as to the methods pursued in the preparation of their briefs, are all unqualifiedly contradicted by The Audit Co. as well as by the consular reports. We respectfully submit that the committee should not be called upon to waste its valuable time on inferences and guesses, when they are afforded every opportunity to examine and ascertain the facts and conditions as they exist. The importers say that the American public have paid heavily for the excessive protection given to the plate-glass industry, and refer to various fluctuations in prices. This statement is answered in part by the fact that the fluctuations in the prices of plate glass have on the whole in recent years been less than in most other commodities; that the high prices have been very brief in their duration, due to temporary shortages of production or excessive demand. But the best answer to unsupported and inac- curate assertions is the fact that the industry has made so little money during the period in question, while, as we have shown the committee, there has been a gradual and progressive decrease in the cost of the product to the consumer. The importers also give us a further evidence of the method adopted in the prepara- tion of their briefs: "That the ink was hardly dry on that document (the Payne-Aldrich bill) when new prices, as shown on page 12. were issued." This is a wholly indefensible statement, inasmuch as the impression is sought to be conveyed that the prices were advanced as the outgrowth of the Payne-Aldrich bill. As a matter of fact, of the 11 prices shown. 8 were within the range in which the duty was reduced from 35 to 22. V cents by the Payne-Aldrich bill, 1 was for the 5 to 10 foot bracket, which in the Payne-Aldrich bill remained unchanged, and only 2 were within the range of the two brackets, the 5 square feet and under, upon which the very slight increase in rates was made. Another misleading statement is with regard to the Belgian manufacturers having no foreign market in which to dump for the reason that 90 per cent of their product goes into foreign markets. The brief omits to say that practically all of this 90 per cent of glass exported goes into markets other than the United States, which they abso- lutely control and in which they maintain fictitiously high prices, due to the operations of their syndicate. While they are shipping a comparatively small part of the 90 per cent to the American market they could, by operating their plants to full capacity, largely increase this output, as the articles from the Action Economique clearly show, and dump their sur- SCHEDULE B. 845 P ABA GRAPHS 101-102 PLATE GLASS. plus into this country at cost without in any wise affecting the export trade they now control, and upon wnich they make a very large profit. The increase in production thus made possible will also enable then to largely reduce their cost and further increase their inflated profits, which now run as high as 83 per cent per annum. There ought certainly not to be, if the prosperity of American industry is to be regarded, any further invitation to commit this wrong. Having therefore conclusively shown to the committee^ I. That the American industry is in a highly competitive condition, first, with regard to glass for glazing purposes among themselves, and, second, that they are in active competition not only among themselves but with the importers under the existing rates of duty with regard to glass for mirror purposes and other selected require- ments; II. That under this existing state of competition the profits realized by the manu- facturers are altogether too meager for the healthy perpetuation of any industry; III. That, according to the Audit and consular reports, the cost of foreign produc- tion and the home cost of production is scarcely equalized and allowed for by the present tariff; IV. That this foreign cost would be appreciably lower if the foreign factories were running full and not curtailing production by the arbitrary, dictatorial operations of the foreign trust; and V. That no trust or combination or understanding exists among American manu- facturers as to the output or prices of product, or otherwise, but that the foreign trade is completely in the hands of the trust and that there is in this trust a real menace to the American industry if conditions are made to favor its operation in this market; we submit that no reduction in the present rates of duty can be justified. Respectfully submitted, Allegheny Plate Glass Co., Glassmere, Pa.; American Plate Glass Co., Kane, Pa.; Columbia Plate Glass Co., Blairsville, Pa.; Federal Plate Glass Co., Ottawa, 111.; Heidenkamp Mirror Co., Springdale, Pa.; Penn American Plate Glass Co., Alexandria, Ind.; Pittsburgh Plate Glass Co., Pittsburgh, Pa.; Saginaw Plate Glass Co., Saginaw, Mich.; St. Louis Plate Glass Co., Valley Park, Mo.; Standard Plate Glass Co., Butler, Pa.; Edward Ford Plate Glass Co., Rossford, Ohio; Kittanning Plate Glass Co., Kittanning, Pa. January 30, 1913. Filed by Harrison Osborne, 34 Nassau Street, New York, N. Y. EXHIBIT A. [From the Action Eeonomique, Dec. 1, 1912.] INTERNATIONAL CONVENTION OF PLATE GLASS MANUFACTURERS THE CONDITIONS OP ITS RENEWAL THE ORGANIZATION OF A COMMERCIAL AND CONTINENTAL UNION OP PLATE GLASS MANUFACTURERS THE PURPOSE OF THIS UNION. We think it may be interesting to give some details concerning the conditions under which the International Convention of Plate Glass Manufacturers was renewed. This organization, as is known, began to exist really on the 17th of August, 1904, and ended on the 17th of August, 1909; it was renewed about two years before this last date for a period of five years, and on the 15th of November last it was decided to again extend it; but this time for a period of 10 years beginning with the expiration of the agreements, viz, the 17th of August, 1914, so as to end it on the 17th of August, 1924. The concluded agreements embrace practically the whole of the European factories with the exception of the Societe des Glaces de Courcelles and the firm of Pilkington Bros, at St. Helens (England). The following corporations are members of the syn- dicate : First. Manufactures de Glaces et Produits Chimiques de St. Gobain, at Paris (fac- tories at St. Gobain, Chaumy, Cirey, Montlucon, Mannheim, Stolberg, Pise, and Franiere). Second. Nouvelle Societe des Glaceries Ne'erlandaises, at Sas de Gand (Netherlands. Third. Schlesische Spiegel Manufactur Carl von Tielsch, at Altwasser (Germany). Fourth. Socie'te' Anonyme de Glaces Nationales Beiges, at St. Roch Auvelais. Fifth. Societe Anonyme Glacerie Germania, at Porz Urbach (Cologne), principal office at St. Roch Auvelais. 846 TABUT HEAEINGS. PABAGRAPHS 101-102 PLATE GLASS. Sixth. Socie"t6 Anonyme de Glaces de Ste. Marie d'Oignies, at Aiseau. Seventh. Compagnie de Floreffe, at Floreffe. Eighth. Soci6t6 Anonyme des Glaces de Moustier-sur-Sambre, at Moustier-sur- Sambre. Ninth. Socie'te' Anonyme dea Glaces de Auvelais, at Auvelais. Tenth. Socie'te' Anonyme des Glaces de Charleroi, at Roux. Eleventh. Compagnies re^unies des Glaces et Verres sp^ciaux du Nord de la France, at Jeumont (a corporation formed by the fusion of the Compagnie des Glaces at Verres spe^ciaux de France at Boussois ana of the Compagnie des Glaces et Verres spciaux du Nord, at Jeumont). Twelfth. Soci6t6 Anonyme des Verreries et Manufacture des Glaces d'Aniche, at Aniche (North). Thirteenth. Soci&e' Anonyme des Glaceries et Charbonnages de Boheme, at Stan- kau (Bohemia), principal office at Brussels. Fourteenth. Socie'te Anonyme Glas-und Spiegel Manufactur, at Schalke (West- phalia). Fifteenth. Socie'te' Anonyme Herzogenrather-Spiegelglas und Spiegelfabrik, at Herzogenrath (Germany). Sixteenth. Socie'te' Anonyme Rheinische Spiegelglasfabrik, at Eckamp, near Ratingen (Germany). Seventeenth. Socie'te' Anonyme Deutsche Spiegelglas A. G., at Freden (Hanover). The convention is, in fact, an organization naving as its object to establish prices and sale conditions of plate glass, polished and unpolished, plain or silvered, on the different markets. All the factories of the convention, that is to say, all the European plate-glass factories (with the exception of Courcelles and Pilkington, with the reserva- tion which we shall give later), have agreed between themselves to respect the prices and sale conditions as fixed by the convention, and not to evade them in any way, under penalty of heavy fines, either favoring the buyer by taking all the breakage risks or by guaranteeing for each delivery a premium for breakage if it should reach a certain percentage. The convention desiring to bring production in direct relation to consumption, each factory must shut down as many days per quarter that it is directed. Every plate-glass factory, whether German, Belgian, French, or Austrian, may sell on all the markets without any distinction whatsoever, in Belgium, Holland, England, Germany, Austria-Hungary, in the Balkans, in Italy, Spain, Extreme Orient, Orient, Russia, Poland, Finland, Scandinavia, South America, United States of America, Canada, and Africa. It is sufficient that the contracting firm should respect the conditions and prices as fixed by the convention. Each factory has, moreover, its own agent in practically every market. As a matter of fact, competition exists between the factories which are members of the convention; but it is simply limited to the quality of glass which is furnished, the prompt delivery, the care taken in packing, and other secondary details. The Pilkington and Courcelles factories have themselves given up price competition with the factories of the convention. These two manufacturers, although not bound by any understanding, nevertheless observe the prices of the syndicate, and, in fact, their competition does not go beyond that which is authorized between the affiliated factories. Had the syndicate not been renewed it would have resulted to the enormous preju- dice of the interests of the plate-glass industry. There would in fact have been a return to the situation prevailing before 1904. At that time the plate-glass industry was going through a very acute crisis. Through excessive competition, prices had fallen in considerable proportion, and, on the other hand, the rise in price of the raw materials influenced unfavorably the cost price. Under these conditions, the future of this industry seemed very dark, and though some strong companies could face without fear a price war, the situation was not the same for the other companies, especially for those whose products are not of the first quality. One may say that under these conditions, without any exaggeration, the non- renewal of the convention would have been a disaster for the great majority of the factories. It had lately been reported that the German syndicate of plate-glass manufacturers and the international syndicate had decided to extend their agreement for a new period of 10 years. The information in this shape is not quite exact, and the reason why is this: The Verband Deutscher Spiepelfabriken is the syndicate of plate-glass manu- facturers which regulates the market of the German Confederation, from the point of view of prices and sale conditions. But the German factories have joined the con- SCHEDULE B. 847 PARAGRAPHS 101-102 PLATE GLASS. vention, and the latter has adopted for the sale in Germany the conditions of the verband. There has, therefore, not been, and there could not have been, a renewal of the understanding, so to speak, between the verband and the convention, because in fact there is no special understanding between these two organizations, which are working together. The renewal of the convention implied that of this understanding. In fact, the verband is a division of the convention which each of its members has joined. A new event has marked this year the negotiations which have taken place con- cerning the renewal of the International Convention of Plate Glass Manufacturers. There is under consideration the draft of a constitution of an actual plate-glass trust which shall be named 1' Union Internationale et Commerciale des Glaceries. This project will not be long delayed. A plan for the organization of this union is at present submitted for the definite approval of the interested parties. L'TJnion Internationale et Commerciale des Glaceries will centralize at Brussels, all the commercial services of the plate-glass companies, thus forming, as we said, a genuine trust, a trust which will control all the branches interested in the plate-glass industry, because the new organization makes provision in its by-laws for being a party to the production of raw materials, of shipping companies, etc. Contrary to what might be supposed, 1' Union Internationale et Commerciale des Glaceries is not intended to replace the International Convention of Plate Glass Man- ufacturers. The renewal of the latter has brought about the foundation of the union. The union will act as an exporter which will buy the production of all the factories, in accordance with its needs; that is, the orders received at a price fixed per square meter, and resell this production at price and conditions fixed by the convention. The capital of the union will be furnished by the factories of the convention, which will pay into the corporation to be formed a part of their own capital. This proposition originates from Mr. Henin, administrator of the plate-glass factories of Charleroi, at Roux. It is, as one may see, tremendous, and is bound to strengthen still further the position of the plate-glass industry, and the union among the members of the syndicate. A. MAUREY. [From the Action Economique, Dec. 8, 1812.] We have given in the last number of the Action Economique some information concerning the renewal of the International Convention of Plate Glass Manufacturers. We think it may be useful to complete this with more precision. The principal object of the convention, as we said before, is to put production in direct relation to consumption, so as to give stability to the prices and avoid an over- production, injurious to every industry. The production of the factories is, therefore, limited by the imposition of a certain shutdown. If, for example, a shutdown of 45 per cent is decreed, the factory would only be allowed to produce 55 per cent of its productive capacity. How is the control of this shutdown process effected? In the following way: The factories can produce at will any amount of rough plate glass; but as soon as it is sub- jected to the finishing process the control by way of shutdown interferes. The grinding and polishing apparatus are sealed for the number of days or hours during which the shutdown is decided for each period of three months. New agreements have been talked about in view of an understanding on the limita- tion of the respective productions between the convention and the famous English Pilkington Co. which, as is true of theCourcellesCo.,isnotamember of the convention, but respects the prices fixed by it. It is important to notice that the only difference, or at least the most important one with the other affiliated factories, is that the English Co. does not pay any attention to the special conditions of each market (for example, the sizes intended for mirrors sold in qualities used for windows). Therefore, there has not been, and there could not have been, negotiations in view of a new agreement between the Pilkington Co. and the convention, the existing agreements renewing themselves automatically at the same time as the convention itself. The situation, in this direction, is identical with that of the verband for Germany, and it is, in fact, that of the French group. In other words, there are three protected markets, viz. France, Germany, and England, which are governed by their own federation of manufacturers under the control of the convention. It ifl nevertheless true that efforts are being made to obtain from the Pilkington Co. a limitation of its production, and it is precisely in view of this that the new 848 TAEIFF HEAKINGS. PARAGRAPHS 101-103 PLATE GLASS. organization 1' Union des Glaceries, whose organization we have referred to, will be able to be of service. We can already, in the most formal fashion, affirm this: The business activity of 1' Union Internationale et Commerciale des Glaceries (International and not Conti- nental) is only a question of three or four months. The constitution of this organization is to-day a definite one. Certain manufac- turers, it is true, were hesitating to join the union before the renewal of the conven- tion; but the fact itself of this renewal for a period of 10 years has done away with this. Alone, the Glaceries Nationales Beiges have not yet given their assent, but one may predict that it will not be long before they join, their holding aloof being without reason. The union will be, as we have already said, a genuine trust. It will concentrate the production of all the factories and will buy it in toto at a price per square meter fixed by the union itself, the latter being the representative of all the plate glass factories. Rebates will naturally be granted to the different factories according to the sale prices. The principal advantage of the union will be in fact the complete suppression of competition. The present competition on the quality of glass and the quality of the packing will be itself completely done away with. There will be no more glass of Floreffe, or Charleroi, or Auvelais; there will only be union glass. The distinction will have enormous consequences, especially from the point of view of modifications which will have to be made in the organization of sales on foreign markets, where the factories all have actually their own agents. We may add: The capital of 1' Union Commerciale et Internationale des Glaceries will be of 2,000,000 francs. A.M. NOTE. The sales corporation above referred to which is the final step taken by the trust to wholly dominate the foreign industry was formally incorporated at Brussels in December, 1912, under the name of Union Commerciale Con tinentale. BRIEF OF SEMON BACHE & CO. EELATIVE TO ROUGH PLATE GLASS. PARAGRAPH 101. NEW YORK, January 25, 1913. THE COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. GENTLEMEN: The duties in this paragraph are ostensibly levied on a square-foot basis, but the provision that any excess over a weight of 1 pound per square foot shall be dutiable at the same rate practically converts the rates to a weight basis, as none of the glass weighs as little as 1 pound to the foot; that is, the rates of f cent, 1 cents, and If cents per square foot are actual rates of f cent, 1^ cents, and If cents per pound. Samples of the commoner varieties of the material covered by this paragraph are sent herewith. The process of manufacture is very simple. The molten metal is ladled out of the melting pot or tank and poured on an iron casting table from 2 to 4 feet wide and about 12 feet long and a roller is then run over it. A plain casting table is used for the ordinary rough glass. The ribbed glass and the various patterns shown by the samples are produced by cutting the ribs or the patterns in the surface of the table. In the case of wire .o, sir. Mr. PALMER. Are there any others ? Mr. WELLS. I beg your pardon ? Mr. PALMER. Are there any others in this country? Mr. WELLS. Yes, sir. Mr. PALMER. Where are they located ? Mr. WELLS. As I stated in my remarks, there are 25 or 30 other manufacturing concerns, located in New England, New York, Penn- sylvania, and Michigan. Mr. PALMER. Have they had such a struggle as you have had during these 45 years, to get along? Mr. WELLS. I think they have had; yes. Mr. PALMER. Just about the same ? Mr. WELLS. Of course they are not as old in the business as we are, and they have not become as well established as we have. Mr. PALMER. Are they earning about the same return on the capi- tal invested during all these years ? Mr. WELLS. I can not say. Mr. PALMER. That is all. Mr. RAINEY. Mr. Wells, you say that your father w r ent there 45 years ago to learn the trade ? Mr. WELLS. Yes, sir. Mr. RAINEY. How long did it take him to learn the trade ? Mr. WELLS. I should say three or four years at that time. Mr. RAINET. Then he became a workman in the factory ? 870 TARIFF HEARINGS. PARAGRAPHS 105-108 SPECTACLES, LENSES, ETC. Mr. WELLS. Well, he was a workman while he was learning the trade. Mr. RAINEY. How long did he remain as a workman in the factory before he became interested in the business ? Mr. WELLS. Well, he always considered himself a workman. He was the foreman of a department and superintendent probably for 20 years. Mr. RAINEY. For 20 years ? Mr. WELLS. Yes. He became president of the company 45 years in all. Mr. RAINEY. Yes; I understand that; but he was there 24 years before he became the president. Mr. WELLS. About that time ; yes. Mr. RAINEY. At that time did he become interested in the com- pany ? Mr. WELLS. Before. He became interested while he was still a workman in charge of one of the small departments. Mr. RAINEY. When did he make the $4,000 investment ? How long had he been a workman then ? Mr. WELLS. I think that was about 5 years after he had started in the business, and he had to borrow the money to buy the stock. Mr. RAINEY. Then, it was 14 years after he went there to learn the business before he made this investment of $4,000? Mr. WELLS. No, sir; about 5 years. Mr. RAINEY. Then this very satisfactory increase in your original investment has not occurred in 45 years, but in 31 years? Mi 1 . WELLS. Well, the development has been mostly in the last 25 years. Mr. RAINEY. The development has been mostly in the last 25 years ? Mr. WELLS. Twenty-five to thirty-five years. Mr. RAINEY. I understood you to say a while ago that this increase in the original investment, in which you now have such a satisfac- tory surplus, was the result of 45 years' labors. However, it is only the result of 25 years' work instead of 45 years. Mr. WELLS. Xo; I should not say that. The principal develop- ment was in the last 25 or 30 years, but the present business has been gradually built up during all those 45 years. Mr. RAINEY. But your father was not interested for about 14 years in the business at all. Mr. ' v \ ELLS. Yes, sir: for about 5 years. Mr. RAIXEY. When he put in his 4,000? Mr. WELLS. Well, there were others interested in the business, who have since' died. Mr. KAI.NEV. When your father put the 84,000 in the business, he did not figure it was worth over $60,000, the business and plant and everything else ( Mr. WELLS. 60,000 was the amount of the capital stock. Mr. RAIXEY. That was about 31 years ago when that happened? Mr. WELLS. Forty-three years ago when he bought his stock. Mr. KAIXEY. Then, the increase from $60,000 to over $2,000,000 has occurred in the last 31 years, all of it, has it not? Mr. 'WELLS. Mostly. SCHEDULE B. 871 PARAGRAPHS 105-108 SPECTACLES, LENSES, ETC. Mr. RAINEY. And not 45 years, as you stated a while ago, but most of it has occurred in the last 25 years. How many other fac- tories are engaged in this business ? Mr. WELLS. "About 25 or 30. Mr. RAINEY. Where are they located in your neighborhood there ? Mr. WELLS. No; there are some in Massachusetts. There are three other factories in Southbridge, Mass., where we are; and there are others in Providence; some in New Hampshire, some in Con- necticut, and some in New York State, Pennsylvania, and Michigan. Mr. RAINEY. Do they all put their products on the market at the same prices ? Mr. WELLS. Very much the same price. Mr. RAINEY. Is that a coincidence or is it the result of some gentle- man's agreement between them? Mr. WELLS. No, sir; there is no agreement. Mr. RAINEY. Just a coincidence? Mr. WELLS. Just free competition, competitive conditions. Mr. RAINEY. But before they get into any active competition with each other they divide from about 50 to 100 per cent on their hi vest- ment each year, do they ? Mr. WELLS. I think not. Mr. RAINEY. None of them make as much as you do ? Mr. WELLS. We do not consider we make very much money on the investment we have there to-day. Of course, the competitive con- ditions Mr. RAINEY. How many men are employed in your industry ? Mr. WELLS. How many men ? Mr. RAINEY. Yes. Mr. WELLS. We have about 2,400 or 2,500 employed at the present time. Mr. RAINEY. How many people are employed in this entire indus- try, in all of these factories. "Mr. WELLS. I should think something around 6,000. Mr. RAINEY. What wages do you pay? Mr. WELLS. Do you mean the amount of our pay roll ? Mr. RAINEY. No ; the average amount that you pay your men ? Mr. WELLS. I think the average per man would be about $13 a week. Mr. RAINEY. Do you employ any women ? Mr. WELLS. Yes. They would average $8 a week $7 to $8 a week. Mr. RAINEY. Do you employ any children ? Mr. WELLS. No cnildren. Mr. RAINEY. How many men do you employ as compared to the number of women that you employ? Mr. WELLS. We have in the neighborhood of 639 women. Mr. RAINEY. About one-third of the total. Mr. WELLS. Yes, sir. Mr. RAINEY. Is that true with reference to the other factories? Do they employ about one-third women ? Mr. WELLS. I do not know about that. Probably about the same. Mr. RAINEY. You get all your raw material from abroad, do you ? Mr. WELLS. Our glass; yes, sir. Mr. RAINEY. Where does it come from ? 872 TARIFF HEARINGS. PARAGRAPHS 105-108 SPECTACLES, LENSES, ETC. Mr. WELLS. It comes from Germany, France, and England. Mr. RAINEY. You have been getting that free all these years ? Mr. WELLS. Yes, sir. Mr. RAINEY. That is all. Mr. DIXON. What is the amount of your yearly business, the value of your output per year ? Mr. WELLS. Our sales this year, I think, will be about $2,700,000. Mr. DIXON. What has been your average for the last 10 years? Mr. WELLS. I could not tell you that. Mr. DIXON. Approximately? Mr. WELLS. A little less each year. I think the year before was about $2,600,000. It increases about $100,000 a year. That is an approximation. Mr. DIXON. That is all. Mr. HARRISON. Are there any further questions ? Mr. RAINEY. Is there very much of your finished product imported into this country from abroad in volume ? Mr. WELLS. I would say there are quite a good many. As to the amount, I have no means of knowing, except what is printed in the statistical reports. The following additional statement was filed by the witness: SOUTHBRIDGE, MASS., January 16, 1913. Hon. OSCAR W. UNDERWOOD, Chairman, Committee on Ways and Means, House of Representatives, Washington, D. C. MY DEAR SIR: On January 9, 1913, I appeared before your committee and made a statement in behalf of the American Optical Co. with relation to Schedule B, sections 105 to 107 of the existing tariff, concerning duties on optical goods. At that time I was questioned by Messrs. Palmer and Rainey regarding the capi- talization of our company and the dividends paid. Owing to the somewhat confusing character of their questions and my unfamiliarity with many of the matters which they inquired for (because 1 have not had charge of the finances of our company, but have been principally concerned with the selling of goods), the answers that I made were in many instances incomplete or inaccurate as to the facts and led them to draw wrong inferences which do us injustice and may well tend to mislead you and others. 1 therefore ask leave to supplement the record of my examination by the addition of this statement, which I ask to have inserted in the record of my exami- nation and particularly submitted to Messrs. Palmer and Rainey. The facts are these: The American Optical Co. was organized in 1869 with a capital of $40, 000, at which time my father invested $4,000 in the stock, not $10,000, as I stated. In 1871 the capital stock was increased to 60,000, and fully paid in cash. Between 1S7J and 1911 there was added to the actual cash invested in the plant and business 1,740.000 from earnings in a period of 41 years, in pursuance of a conserva- tive policy whi''h looked to improving and increasing the size of the plant and ita efficiency. In lull $:>00.000 new cash capital was subscribed and added, making the present capitalization of $2.100,000, which fairly represents the value of the invest- ment in real estate, buildings, machinery, and stock. The sum -SI, 740, 000 was added to the capital account from earnings without increas- ing the number of shares of the nominal capital stock, but accomplished what in other businesses may have been done by the sale of capital stock to stockholders who have reinvested their money. This sum, though large in the aggregate, compared with the original capital, repre- sents a little less than 8 per cent on the original investment of $60,000 if added each year to the investment of the previous year. The dividends of $30,000 paid in recent years, while representing 50 per cent on the nominal capital stock, in fact represent less than 3 per cent on the money actually invested in the business, and our present dividend rate represents less than 2 per cent on our money actually invested. An analysis of the figures given and careful computations carried through this period of more than 40 years will demonstrate the truth of this statement. During the period SCHEDULE B. 873 PARAGRAPHS 105-108 SPECTACLES, LENSES, ETC. when Messrs. Palmer and Rainey inquired for dividends the stock was held almost entirely by men who worked for and were officers of the company. The salaries were small, and the sums paid by way of dividends in part were recognized as compensation for services rendered. When I stated in answer to a question that we had a surplus of $200,000, I stated the amount of cash on hand. We have, in fact, no surplus above our present capital of $2,100,000. Our average profit on our total turnover for the last five years is less than 6 per cent, or about 7 per cent on our present capital. These considerations should be given their just weight and importance. Hasty calculations attempted on the witness stand are not usually accurate and frequently mislead both questioner and witness. It is not safe to base a present dav tariff on conditions of 40 years ago. We were the first to start, hence established before others entered the field. To-day competition has grown until there are between 25 and 30 domestic concerns, and foreign competi- tion has greatly expanded and increased. The percentage of profits has been steadily decreasing for years, until at the present time we are able to earn only about 7 per cent on our present invested capital. Respectfully submitted. AMERICAN OPTICAL Co., By C. M. WELLS, Vice President. STATEMENT OF HENRY B. GRAVES, ESQ., REPRESENTING THE STANDARD OPTICAL CO. AND THE UNITED STATES LENS CO. The CHAIRMAN. Mr. Graves, we have about half a dozen more witnesses and we would like to finish this schedule to-night because the iron and steel schedule is coming on to-morrow. If we do not finish to-day's schedule, it will have to go over. If the committee is agreeable I would like to hold the remaining witnesses down, so that they may all take about 10 minutes. We have about a half dozen more witnesses, and I would like to get through them to-night. Mr. PAYNE. I think we had better go on and see what develops. Mr. GRAVES. Mr. Chairman and gentlemen, representing the Standard Optical Co., of Geneva, N. Y., manufacturers of spectacles and eyeglass frames, mountings and machinery used in the man- ufacture of spectacle and eyeglass lenses, and optical instruments, and the United States Lens Co., a subsidiary corporation, manufactur- ing lenses only, I submit the following and respectfully request that you retain the present rates of duty on sections 105, 106, 107, and 108, as far as it applies to optical instruments, of Schedule B and section 577 of the free list. This company was originally organized in 1883 and reorganized in 1896, at which time it was compelled to reduce the par value of its common stock from $100 to $40 per share, owing to the fact that it had been unable to do business at a profit up to that time and had actually lost money, but since 1896 the business has developed considerably, as we added some new lines of goods which were then more profitable, and we now employ more than 550 operatives about half men and half women and girls. Owing to the necessity of furnishing lenses with our other goods, we invested fully $100,000 in the development of that branch of the business, employing the best talent we could secure for that purpose, but unsuccessfully, as the building and installing of expensive machinery and the training of operators until they become skilled in their respective operations requires years of training. 874 TARIFF HEARINGS. PARAGRAPHS 105-108 SPECTACLES, LENSES, ETC. In 1909 we had the good fortune to secure the services of a man who had demonstrated his ability to erect and operate suitable machinery for the purpose, and with his experience and his financial investment in the United States Lens Co., coupled with a similar investment by another manufacturer interested in the production of spectacles and eyeglasses to compete with the cheapest imported goods, we started with fresh hopes to strengthen our industry, one of our most important aims being to supply to the poorest class of our citizens a far superior article to those imported, the serious injurious effects of which were brought before the committee in the testimony of Mr. John S. Spencer, at its hearing in 1908 (see p. 1225, proceedings of 1908). Spectacle lenses are not a commodity only, but are comparable to medicines or scientific instruments. They actually prolong the usefulness of the wearer and his earning capacity during all of his life after 40 or 45 years if they are properly fitted to his eye and features. We are now employing more than 200 persons in the lens factory, as against 57 in 1909, most of whom are women and girls. We are, of course, hoping to make our lens business profitable, but after three and a half years, during which we have perfected our machinery and trained our help, our statement of July 1, 1912, for the six months ending June 30, showed an actual loss of over $5,000. We are, nevertheless, confident of success if tariff conditions remain as at present. The quality of our goods is unsurpassed and can not be classed with any similar goods made in Europe, although a reduction in the tariff would undoubtedly stimulate the importation of large quantities of lenses made in Germany and France, which, although interior to our goods, would displace them to such an extent on the market that we would be forced to meet the competition either by reducing the quality of our goods or by reducing our prices to an extent which would jeopardize and might ruin our industry. The United States is at least 25 years ahead of Europe in the quality of glasses worn by our citizens, the greater part of them being pre- scribed by oculists and optometrists capable of prescribing glasses which exactly fit the patient, and the standard of our prescription lenses is held so high by the manufacturers that unscrupulous parties can not procure low-grade lenses to prescribe to their patients. Any condition which would permit the inferior foreign lenses to enter this country in larger quantities would be a great injury to the wearers of spectacles, which could not be measured in dollars and cents. The fact thai there were but two successful factories in this country until within the last six years, although others have been started and failed, shows how difficult it is to manufacture spectacle lenses of the American standard of quality. The wages of our employees have been increased within the past five years nearly 50 per cent, the average in 1898 being about $8.50 per week per employee, and at the present time over $12.15 per week per employee. Our wages have gone up nearly 10 per cent since the passage of the 54-hour law by the Legislature of the State of New York hi hi 12. SCHEDULE B. 875 PARAGRAPHS 105-108 SPECTACLES. LENSES, ETC. The wages paid to girls in the optical industry in Germany is 1 mark 24 cents a day, whereas we pay 10 cents per hour to per- fectly unskilled girl beginners. Foremen in Germany, with gener- ations of inherited training and experience, can be secured at $9 a week, whereas we must pay similarly skilled men from $18 to $25 a week. We are almost shut out of the South American and Oriental market by German and French competition and in free-trade England the whole lense industry has been killed by this competition. Our profits on our whole output for the past five years has been less than 6 per cent, and it requires the most rigid economy and improved methods of manufacture to make a sufficient profit to pay our annual dividends, the peculiar nature of the business com- pelling us to tie up our earnings year by year in improved machines, and in additional plant and merchandise as the business develops, besides increasing our new capital almost yearly. We are now endeavoring to raise additional capital to develop our business. And right here, if I may be allowed, I want to say just a word with regard to the testimony this morning from Mr. George W. Wells, who built up the American Optical Co. Although it started with small capital, by the closest economy in the business as well as in his living, by a very high grade of mechanical organizing and busi- ness ability, he was able to develop a plant and stock of goods equal to their present capital, while others totally failed, almost inducting ourselves. He is my strongest competitor, but I am very glad to bear that testimony. In my brief I state our percentage of profit as 6 per cent. I can be a little more exact, if it is desired. In 1908 our percentage of profit was 4.4 per cent; in 1909, 3.5 per cent; in 1910, 4.6 per cent; m 1911, 6 per cent; and in 1912, while our statement is not yet pre- pared, approximately it is 6.4 per cent. During the past 18 months, which has been the most prosperous in our history, our net earnings have been produced largely through the manufacture of our optical machinery, all of which is covered by United States patents, and in special styles of eyeglasses, which are also covered by patents. Our other departments, in which, in fact, the greater part of our capital is invested, do not show earnings in proportion to the invest- ment, owing to the keen competition to which we are subjected, and to the rapidly increasing scale of wages, and the steady reduction in selling prices occasioned by our competition. A department which showed good earnings in 1907 and 1908 to-day is barely self- supporting. At the same time these comparatively unproductive departments enable us to dispose of our other goods on which there is a better profit, and on which we can secure better prices owing to the fact that they are covered by patents. The least productive department, that in which our cheap metal goods are manufactured, has never shown a profit, and that in which our gold and gold-filled goods are manufactured and in which nearly half of our capital is invested has been reduced very greatly within the past five years owing to the reduction in selling prices and increased wages. 876 TARIFF HEARINGS. PABAGBAPHS 105-108 SPECTACLES, LENSES, ETC. Both of these departments would be seriously injured, if indeed we would be able to maintain them at all, if we were subjected to the competition of foreign-made goods, which would both reduce the prices which we receive for our goods and compel us to make a lower quality of goods than we are now making to meet the foreign com- petition. Our exports amount to about 5 per cent of our output and a large part consists of our patented machinery. We have unquestionably lost money on the other business we have done hi Europe, as it has been mostly in goods made especially for that market, and so far we have not been able to sell in large enough quantities or high enough prices to enable us to manufacture and sell at a profit. Our only hope in that market is slowly to educate the retail trade to appreciate American quality, demand American goods, and pay American prices. In conclusion, I ask you to at least maintain the present rate of duties on the items in Schedule "B" covering our line of manufacture. Mr. PALMER. I would like to ask you one or two questions. You are engaged in precisely the same kind of business as the American Optical Co., which was represented here this morning by Mr. Wells ? Mr. GRAVES. Practically so. They make two or three lines which we do not make, which are not very important. Mr. PALMER. They are, as I understand you, your chief competitor in this country? Mr. GRAVES. Yes, sir. Mr. PALMER. But you have very generously stated that the reason for the phenomenal success of that company was to be found in the efficient, skillful, and economic management of the plant by Mr. Wells and his father. Mr. GRAVES. Yes, sir; a great deal of it was when prices were a good deal higher than they are at present. Mr. PALMER. I assume if that be so that the reason for those who have not been so successful, on the part of other gentlemen engaged in the trade, is that they did not exercise the same skill, efficiency, and economv in the operation of their plants as was exercised by Mr. Wells. Mr. GRAVES. They did not have any plants. Our plants were started years after his plant was a tremendous success. Mr. PALMER. During the very years when you say you have been making 3, 4, 5. and 6 per cent, Mr. Wells has been making very much larger profits than that, has he not? Mr. GRAVES. He has a much larger business, and a much more highly developed business. Mr. PALMER. Do you really think that in writing a tariff law we ought to consider conditions made or existing in inefficient, unskill- fully managed plants, or that we ought to consider conditions made in efficient and skillfully managed plants ? In other words, is it your theory that the law ought to protect inefficiency in American manu- facture I Mr. GRAVES. Certainly not. Mr. PALMER. If no duty is required for the protection of a reason- able amount of profits, \ve will say for a concern so well managed as SCHEDULE B. 877 PARAGRAPHS 105-108 SPECTACLES, LENSES, ETC. the American Optical Co., by reason of its efficient management, do you still think we ought to vote a duty on the goods in order to take care of men who admit that the reason for then* comparative failure is that they did not equal the efficiency of that plant ? Mr. GRAVES. I do not think that is a fairly stated question, sir. You take the ground that they do not need the tariff, and that we do need it on the ground of inefficiency, neither of which is correct. Mr. PALMER. I frankly say I do not believe any concern which is making the money Mr. Wells admitted his concern is making, has very much right to come here and ask us to keep this tariff rate up to the present figure. Mr. GRAVES. His concern is making less than 10 per cent on the present capitalization, which is not excessive. Mr. PALMER. It is about 200 per cent on the actual capital invested in the company. Mr. GRAVES. I do not admit it. Mr. PALMER. Mr. Wells admitted it. Mr. GRAVES. He did not do his father the justice I am willing to do him. If his father was willing for years to live economically and instead of drawing a large salary, keep it in the business, put it in there and develop the business, that was exactly the same as if new money was put into it. If he had drawn a large salary, which he would and could have demanded, if some one else had furnished the capital, he would have had new money to put back into the business; and that is exactly what he did in effect. Mr. PALMER. He would have taken that increased salary right out of the profits of the business. Mr. GRAVES. No, sir; it would have been taken out before the profits were shown, because it was earned. It is wages, not profits. A salary is not a profit. Mr. LONGWORTH. It is part of the cost to produce ? Mr. GRAVES. Absolutely. Mr. PAYNE. I do not exactly understand that, Mr. Graves. Mr. GRAVES. I say, properly speaking, salaries are not profits; they are part of the cost of production. Mr. PAYNE. Have you stated the amount of your capital paid in, in the first place, in this company? Mr. GRAVES. Our company's total capital stock is $237,000 up to the present time. Mr. PAYNE. Have you ever reduced the capital ? Mr. GRAVES. The par value of the common stock and the total common stock was reduced from $100,000 to $40,000 in 1898. I have been connected with the business since 1897. Prior to that time they had been manufacturing a limited number of lines and had actually lost money. It was one of the first things I did to insist on the capital stock being reduced to the actual condition of the business. Mr. PALMER. As to these dividends you have spoken of, on what capital were they declared? Mr. GRAVES. We have paid 6 per cent dividend. Mr. PALMER. On what ? Mr. GRAVES. On our total capitalization since 1896. Mr. PALMER. On how much capitalization? 878 TABIFF HEARINGS. PABAGBAPHS 105-108 SPECTACLES, LENSES, ETC. Mr. GRAVES. On an increasing capitalization from $90,000, since which time we have added to our capital stock three times, until the present tune. Our last issue of capital stock, which was a 7 per cent preferred stock, was three or four years ago. Mr. PALMER. Have you ever paid dividends on that stock which you charged up ? Mr. GRAVES. No, sir. Mr. PALMER. You never paid dividends on that ? Mr. GRAVES. No, sir. Mr. PALMER. But you did pay dividends on what was left ? Mr. GRAVES. Yes, sir. In reply to the suggestion that the business has been inefficiently managed, we have also built up a surplus which is represented not in cash but in plant of about $263,000, which is a little more than our capital stock. Mr. PALMER. I did not make the suggestion your business was inefficiently managed. Mr. GRAVES. I understood it so. Mr. PALMER. I thought you had suggested it in acknowledging the reason for the unusual success of the American Optical Co. The CHAIRMAN. That is all, Mr. Graves. GENEVA, N. Y., January 9, 191S. The WAYS AND MEANS COMMITTEE, House of Representatives, Washington, D. C. DEAR SIRS: Representing the Standard Optical Co., of Geneva, N. Y., manufac- turers of spectacles and eyeglass frames, mountings, and machinery used in the manu- facture of spectacle and eyeglass lenses and optical instruments, and the United States Lens Co., a subsidiary corporation, manufacturing lenses only, I submit the following and respectfully request that you retain the present rates of duty on sections 105, 106, 10V, and 108 of Schedule B and section 577 of the free list. This company was originally organized in 1883, and reorganized in 1896, at which time it was compelled to reduce the par value of its common stock from $100 to $40 per share, owing to the fact that it had been unable to do business at a profit up to that time, and had actually lost money, but since 1896 the business has developed considerably, as we added some new lines of goods which were then more profitable, and we now employ more than 550 operatoos, about half men and half women and girls. Owing to (he necessity of furnishing lenses with our other goods, we invested fully ? 100, 000 in the development of that branch of the business, employing the best talent we could secure for that purpose, but unsuccessfully, as the building and installing of expensive machinery and the training of operators until they became skilled in their respective operations requires years of training. In 1909 we had the good fortune to secure the services of a man who had demon- strated his ability to erect and operate suitable machinery for the purpose, and with his experience and his financial investment in the United States Lens Co., coupled with a similar investment by another manufacturer interested in the production of spe 't.u'los and eyeglasses to compete with the cheapest imported goods, we started with fresh hopes to strengthen our industry, one of our most important aims being to supply to the poorest class of our citizens a far superior article to those imported, the serious injurious effects of which worn brought before the committee in the testimony of Mr. John S. Sponcer at its hearing in 190S (see p. 1225, proceedings of 1908). \Vo it re ii"\v employing nmro than 200 persons in the lens factory, as against 57 in 1909, most of whom are women and girls. We are, of course, hoping to make our lens business profitable, but after three and a half years, during which we have perfected our machinery and trained our help, our statement of July 1 . 1012, for the six months ending June 30, showed an actual loss of over S5.000. We are nevertheless confident of success if tariff conditions remain as at present. The quality of our goods is unsurpassed, and can not be classed with any similar good? made in Europe, although a reduction in the tariff would undoubtedly stimulate SCHEDULE B. 879 PARAGRAPHS 105-108 SPECTACLES, LENSES, ETC. the importation of large quantities of lenses made in Germany and France, which, although inferior to our goods, would displace them to such an extent on the market that we would be forced to meet the competition either by reducing the quality of our goods or by reducing our prices to an extent which would jeopardize and might ruin our industry. The United States is at least 25 years ahead of Europe in the quality of glasses worn by our citizens, the greater part of them being prescribed by oculists and optometrists capable of prescribing glasses which exactly fit the patient, and the standard of our prescription lenses is held so high by the manufacturers that unscrupulous parties can not procure low-grade lenses to prescribe to their patients. Any condition which would permit the inferior foreign lenses to enter this country in larger quantities would be a great injury to the wearers of spectacles, which could not be measured in dollars and cents. The fact that there were but two successful lens factories in this country until within the last six years, although others have been started and failed, shows how difficult it is to manufacture spectacle lenses of the American standard of quality. The wages of our employees have been increased within the past five years nearly 50 per cent, the average in 1898 being about $8.50 per employee, and at the present time over $12.15 per employee. Our wages have gone up nearly 10 per cent since the passage of the 54 hour law by the legislature of the State of New York in 1912. The wages paid to girls in the optical industry in Germany is 1 mark (24 cents) per day, whereas we pay 10 cents per hour to perfectly unskilled girl beginners. Foremen in Germany, with generations of inherited training and experience, can be secured at $9 a week, whereas we must pay similarly skilled men from $18 to $25 a week. We are almost shut out of the South American and Oriental market by German and French competition, and in free-trade England the whole lens industry has been killed by this competition. Out profits on our whole output for the past five years has been less than 6 per cent, and it requires the most rigid economy and improved methods of manufacture to make a sufficient profit to pay our annual dividends, the peculiar nature of the busi- ness compelling us to tie up our earnings year by year in improved machines and in additional plant and merchandise as the business develops, besides increasing our capital almost yearly. During the past 18 months, which have been the most prosperous in our history, our net earnings have been produced largely through the manufacture of our optical machinery, all of which is covered by United States patents, and in special styles of eyeglasses, which are also covered by patents. Our other departments, in which in fact the greater part of our capital is invested, do not show earnings in proportion to the investment owing to the keen competition to which wo are subjected, and to the rapidly increasing scale of wages, and the steady reduction in selling prices occasioned by our competition. A department which showed good earnings in 1907 and 1908 to-day is barely self-supporting. At the same time these comparatively unproductive departments enable us to dispose of our other goods on which there is a better profit, and on which we can secure better prices owing to the fact that they are covered by patents. The least productive department, that in which pur cheap metal goods are manu- factured, has never shown a profit, and that in which our gold and gold-filled goods are manufactured and in which nearly half of our capital is invested, has been re- duced very greatly within the past five years owing to the reduction in selling prices and increased wages. Both of these departments would be seriously injured, if indeed we would be able to maintain them at all, if we were subjected to the competition of foreign-made goods, which would both reduce the prices which we receive for our goods, and compel ua to make a lower quality of goods than we are now making to meet the foreign com- petition. Our exports amount to about 5 per cent of our output and a large part consists of our patented machinery. We have unquestionably lost money on the other business we have done in Europe, as it has been mostly in goods made especially for that market and so far we have not been able to sell in large enough quantities or high enough prices to enable us to manu- facture and sell at a profit. Our only hope in that market is slowly to educate the retail trade to appreciate American quality, demand American goods, and pay American prices. 880 TARIFF HEARINGS. PARAGRAPHS 105-108 SPECTACLES, LENSES, ETC. Asking you to at least maintain the present rate of duties on the items in Schedule "B" covering our line of manufacture, I am, Very respectfully, yours, STANDARD OPTICAL Co., UNITED STATES LENS Co., HENRY B. GRAVES, Secretary and Treasurer. BRIEF OF TILTON OPTICAL CO., IN RE SPECTACLE AND EYE- GLASS LENSES. PARAGRAPH 106. TILTON, N. H., January 6, 191S. CLERK OP THE WATS AND MEANS COMMITTEE, House of Representatives, Office Building, Washington, D. C. DEAR SIR: We understand your committee have appointed January 8 as the day on which to hear arguments regarding the glass schedule, under which the product of our factory is classified, and in which we are most vitally interested. We would submit, therefore, for the consideration of your committee some of the reasons which we believe warrant the retention of the present tariff rate. In our factory we manufacture for sale only spectacle and eyeglass lenses. We have been manufacturing them now for something like 12 years. The profits which we have made have been small as compared with those which should be reasonably expected from a manufacturing plant with an amount of capital as large as we have invested in our business. The principal item of expense which goes into the cost of lens manufacturing is that for labor, for which we pay a much higher rate than prevails abroad. We pay our girls and women, when they enter our employ without experience, 11 cents an hour, increasing this amount as their ability warrants at the rate of about ] cent per hour per month, until we are paying them an average of 16 cents per hour. Some of the girls make more than this amount. Our boys (none of whom are under 15 years of age) we pay at the same rate as the girls. Men entering our employ without any experience we pay at the rate of 16 rents per hour, increasing them at the rate of 2 cents per hour until they are earning 20 cents per hour. This usually takes about two months before they are getting this standard pay. If a man shows exceptional ability, we pay him more. All of our men have .an opportunity of earning a bonus of $1 a week whenever they produce a percent- age of first quality "lenses averaging above a given standard. In the principal optical centers of Germany, after three years' service, men are receiving about $6 a week and girls an average of less than $5. We are paying our employees on an average about 100 per cent higher than the rate prevailing there. In addition to this higher rate of wages, our American factories maintain a higher standard of quality than is maintained by the European manufacturers; that is, the lenses of our production are more free from scratches and surface imperfections and defects in the glass than those made abroad. We also maintain a more uniform standard of lens thickness and size of blank, all of which add materially to the net cost of production. We believe, therefore, that the rate now prevailing is just to our manufacturers and not an undue burden upon the consumer, and we feel that a decrease in the present tariff rate would force our American manufacturers to drop the standard of quality to that now maintained by our European competitors. This would be a rendition very unfair to the American consumer, in whose behalf our orulists and opticians are urging an even higher standard than that we are at the present able to maintain. We respectfully submit the above for your consideration, and remain, Yours, very respectfully, TILTON OPTICAL COMPANY. STANTON E. SMITH, General Manager. SCHEDULE B. 881 PARAGRAPHS 105-108 SPECTACLES, LENSES, ETC. STATEMENT OF F. E. HAMILTON, ATTORNEY FOR THE TAYLOR-HOBSON CO., OF NEW YORK. PARAGRAPH 106. The CHAIRMAN. To what paragraph do you wish to address yourself, Mr. Hamilton? Mr. HAMILTON. Paragraph 106. My clients desire to approve the reduction of the duty. The suggestions made by them are contained in these briefs, whicn I will hand to the clerk and thereby save the committee the necessity of listening to me. The CHAIRMAN. You may hand them to the stenographer and they be printed in t le record at this point. BRIEF OF PARAGRAPH 106, SCHEDULE B LENSES. To the honorable the WAYS AND MEANS COMMITTEE, Souse of Representatives, Washington, D. C. GENTLEMEN: The Taylor-Hobson Co., of New York City, respectfully requests a reduction upon lenses of glass or pebble, molded or pressed, ground and polished to spherical, cylindrical, or prismatic form, and ground and polished piano or coquill glasses, wholly or partly manufactured with the edges unground, from 45 per cent ad valorem to 20 per cent ad valorem. The present rate of duty represents much more than the difference between the cost of production at home and abroad. The importation of lenses of very high quality only can meet this high rate of duty, and 95 per cent of the trade in lenses used on small kodaks and moving-picture machines has become practically a monopoly in the hands of American manufacturers solely on account of the above tariff, which ia absolutely prohibitive. Within the past 60 days we were asked to submit quotations to the Edison labora- tories at West Orange, N. J, for lenses to be used on the Home Kinetescope in lota of 30,000. The contract was awarded to one of our competitors, an American manu- facturer, at the following rates: 1A condensing lens, mounted $0. 38 IB condensing lens, mounted 39 1C condensing lens, mounted 44 1A stereo, lens, mounted 42 IB stereo, lens, mounted 65 1C stereo, lens, mounted $0. 75 1A motion-picture lens 1. 75 1 A motion-picture lens 93 IB motion-picture lens 1. 85 1C motion-picture lens 2. 55 These figures are practically the same that the goods cost us to lay down in New York after a 45 per cent duty, thus clearly proving the absolutely prohibitive char- acter of the present duty charge. This is only one instance, which we could easily multiply, of our inability to com- pete with American manufacturers upon the prices of photographic and other lenses, owing to the high rate of duty under the Payne-Aldrich bill, and it has become the rule with us to decline to bid wherever price is the determining factor rather than high quality. We believe that a reduction of the present rate of 45 per cent to 20 per cent would result in approximately increasing our business threefold, since we are unable to enter the field of moving-picture machines and cameras, the two largest fields in the use of lenses. Another illustration of the present high rate may be offered in com- paring the lens and shutter used by the Sears-Roebuck mail-order house of Chicago on their camera known as the "Conley." This house lists the lens and shutter in question with complete equipment, includ- ing camera, at $42.85. The same camera, with an ordinary cheap lens and shutter, they list at $15.40, so that the difference of $27.45 represents the amount which Sears- Roebuck & Co. receive for the 4 by 5 lens and shutter, and even at such figures they must necessarily make a profit. The house that manufactures the lens and shutter in question lists the same at $40. The only conclusion to be drawn is that the present 45 per cent duty rate protects the American manufacturer and as well the American 78959 VOL 113 56 882 TARIFF HEARINGS. PABAGRAPHS 105-108 SPECTACLES, LENSES, ETC. jobber to such an extent that an article listed at $40 can still be sold for $27.45 and make a profit, since the high duty rate prohibits the competition of the foreign lens. It is claimed for the imported lens that they are of better quality at an even price with that of the American manufacturer, but there is no opportunity of testing this question under the present exorbitant duty rate. We respectfully urge the reduction of the rate in question from 45 per cent ad valo- rem to 20 per cent ad valorem. All of which is respectfully submitted. THE TAYLOR-HOBSON Co., By FRANCIS E. HAMILTON, Counsel, 32 Broadway, New York. JANUARY 3, 1913. BRIEF OF BATJSCH & LOME OPTICAI CO., ROCHESTER, N. Y., IN RE OPTICAI INDUSTRY. BAUSCH & LOMB OPTICAL Co., Rochester, N. Y., January 7, 1913. WAYS AND MEANS COMMITTEE, House of Representatives, Washington, D. C. HONORED SIRS: In view of our inability to appear before your honorable body in person, we beg to present our arguments relating to tariff Schedule B, paragraphs 106, 107, and 108, in writing, and will preface the same with a general statement relating to the optical industry in the United States before entering into the subject from our own point of view. The industry originated in Europe, and for decades American opticians were dependent for the greater share of their requirements on this source of supply. Under the protective policy of our Government, this condition has changed. Since 1850 considerable development toward home manufacture has taken place, until now few optical goods are imported, except for educational purposes, and largely for the reason that American ingenuity steadily raised the standard of perfection in optical apparatus covering the various branches of science, and to such an extent that Euro- pean manufacturers now copy instrumental, methods, and appliances, a fact well worthy of note. The optical industry in the United States is represented by about 25 manufac- turers with a capital investment approximating $10,000,000, and employing in round numbers 10,000 people. The production of optical instruments requires not only skilled labor, but scien- tific attainments in the computation of optical systems for the great variety of goods comprised thereunder. This labor can only be obtained and the skill attained through years of preparation, and it is only reasonable to say that the transfer of trade to the United States for home consumption could never have been accom- plished without proper compensation to American workmen on a scale comparative with our cost of living. We have it from reliable sources that the European labor rate in the construction of apparatus of similar character ranges from ?S for semiskilled to $12 for skilled labor, while our wages range from $12 in the semiskilled to $18 and more for skilled labor, per week. For our manufactures the raw material is the smaller part of the completed cost of goods, and while it varies for different instruments, the relation i? about 35 per cent for material to 05 per cent for labor. The present rate of duty for the products covered under the above-enumerated paragraphs is 45 per rent ad valorem, which, if compared with the above, assuming material cost 1o be about the same as abroad, does not properly compensate for the difference in labor rates. For many reasons it is important that this development in apparatus lor scientific research and use should be fostered within our own borders, and no encouragement on the part of the Government in the regulation of its tariff schedules can be greater than to provide the necessary protection to American labor, to insure the incentive for even greater accomplishments in an industry that may be of small proportions to the commerce of the country, but of great value to the Government itself and the scientific world. Any reduction from the present tariff rate would be injurious to this development, would create serious disturbance and prove a heavy burden to American producers and their workmen, and we therefore appeal to your honorable body to recommend SCHEDULE B. 883 PARAGRAPH 108 LENSES, CAMERAS, ETC. that the existing rate of duty for the schedules named be maintained in order that what has been accomplished will not be undone by any act that can but slightly affect the revenues of the Government, but would retard the progress of a growing American industry. Respectfully submitted. BAUSCH & LOMB OPTICAL Co., J. J. BAUSCH, President. LENSES, CAMERAS, ETC. STATEMENT OF G. C. GENNERT, ESQ., OF NEW YORK CITY. The CHAIRMAN. To what paragraph do you speak ? Mr. GENNERT. The paragraph about which I wish to speak is 108, concerning cameras, which are there classed as optical instruments. The firm I represent has, since 1854, been engaged in New York and Chicago in the manufacture and as dealers and importers of the photographic materials in question. Our present position is that we have been directly forced, in order to get cameras, to import the same. The entire market in cameras, as well as in all other photographic materials, is tight in the grip of the Eastman Kodak Co., that owns the business body and soul. It is undoubtedly a safe and conservative estimate to say that upon that particular class of merchandise, of cameras, they produce and sell at least seven-eighths. Their policy is to sell these cameras, as they do with their other goods, on a restrictive policy as to price and on a restrictive policy as to persons buying similar goods of other independent manufac- turers. For instance, we can buy no cameras from the Eastman Kodak Co., we can buy no plates from the Eastman Kodak Co., we can buy no films from the Eastman Kodak Co., because we have had the te*merity to sell other brands, or attempt to sell other brands, excepting their own. The duty on cameras is 45 per cent ad valorem. That the industry in this country needs absolutely no protection is evident when we con- sult the dividend record of the Eastman Kodak Co. After a steady increase in the last 10 years it finally, in 1911 and 1912, reached the tremendous basis of an annual dividend of 40 per cent on about twenty millions of capital stock. If I may detain you just long enough, I want to read from a recent article in a photographic trade journal, commenting upon the Eastman dividends: i Eastman Kodak common dividends seem to be stationary at 40 per cent per annum. That is the amount declared so far this year, the same as in 1911 and 1910. In the forward march of net earnings of this remarkable company there has not to date been a single misstep. Profits have quadrupled in the 10 years of its existence and are now each year equal to well over one-half of the $19,512,300 common-stock issue. The career of the Eastman Kodak Co. reads like a page of financial romance. In slightly more than a decade it has paid common shareholders dividends aggregating $249 per share, or an average of $23.50 annually. The company is now selling in the market for about $146,000,000 the $6,165,700 6 per cent preferred at 125 and the $19,512,300 common at 710. Manifestly this huge sum is far and away greater than the value of actual property assets; it is rather an expression of the spectacular earn- ing ability of the company. 884 TARIFF HEARINGS. PARAGRAPH 108 LENSES, CAMERAS, ETC. We are in a position that we can not get these cameras except by importing them. We import them. The imports have to date been so slight that the Department of Commerce and Labor does not even furnish any statistics, and I should estimate them at approximately $30,000, whereas the exports are in the neighborhood of $1,000,000, not quite a million for the last 11 months, but steadily increasing from month to month. What happens when we go out in the market and attempt to sell our goods in competition, if I may use the almost amusing word, with the photographic trust? What happens is that we get letters, of which I hold about a dozen in my hand and have others, from cus- tomers to whom we have shipped our cameras, which we in large part import from England. I mention no names hi connection with these letters, because the moment the names were made public undoubt- edly the Eastman Kodak Co. would refuse to ship their goods to the customer in question. The letter to which I have reference now is as follows : We are returning herewith one Ensignette camera, list $10; one Ensignette, list $15. Please credit these to our account. We could no doubt have sold a large num- ber of these cameras, but as the Eastman Kodak Co. refuses to sell us their product if we sold Ensignettes, we are obliged to discontinue the sale of them. I have one where even the following humiliation of expression is swallowed by the retail customer who had attempted to buy goods from the applicant: I am returning via United States Express one Ensignette camera, which I wish you would give me credit for, as the Eastman Kodak Co. have stopped me from selling it. That is not the exact letter I had reference to, but I do not lay my hands on it for the moment. In any event the letter contains this phrase: The customer writes us, saying: "I must return the camera because I can not afford to incur the displeasure of the Eastman Kodak Co." It seems it is a very unusual situation that an American business man must fear for his very existence, that he is going to incur the displeasure of a company whose profits seem to be without limit. The CHAIRMAN. You want the reduction on cameras allowed? Mr. GENXERT. I can only take up the question of cameras alone, because the cameras are the sole photographic article that come under the paragraph that the committee is considering to-day. Mr. LOXGWORTH. What is the number of that paragraph? Mr. GENNERT. One hundred and eight. Mr. PALMER. Your business is the business of selling photographic supplies ? Mr. GEXXERT. Yes, sir; and to a certain extent manufacturing. Mr. PALMER. What line do you manufacture? Mr. GEXXERT. We have formerly to a considerable extent manu- factured cameras, but we were unable to sell them owing to the restrictive policy pursued in the main by the predecessor of the present Eastman Kodak Co., the Rochester Optical Co., which in turn has been absorbed by one of the companies, which in turn has been absorbed by the present corporation, the Eastman Kodak Co., which is a corporation of New Jersey. SCHEDULE B. 885 PARAGRAPH 108 LENSES, CAMERAS, ETC. Mr. PALMER. Did I understand you to say the Eastman people have seven-eighths of the business now in this country ? Mr. GENNERT. I think it is a conservative estimate to say they have seven-eighths of practically every branch. Mr. PALMER. Is that a patent monopoly or a monopoly obtained by combination of various companies which own patented articles ? Mr. GENNERT. That opens a question that I can only give you my side of. Mr. PALMER. I would not expect you, after what I have heard thus far, to give the Eastman side of it. Mr. GENNERT. The main patents on the films have expired, and the main patents on the cameras have expired. But for films and plates they relied largely on the secret-process idea, which has, by a recent decision, been exploded. Mr. PALMER. Is the Eastman Co. also a company of a number of other concerns which were engaged independently in the business of making cameras ? Mr. GENNERT. A good many years ago, yes. It has absorbed three or four of the largest camera-manufacturing companies. Mr. PALMER. You say that the American manufacturers of cameras to-day can not compete successfully in this market ? Mr. GENNERT. They can not. Mr. PALMER. With the Eastman people ? Mr. GENNERT. They can not. Mr. PALMER. Is that the reason you went out of business ? Mr. GENNERT. We were forced out of business because we could not seh 1 our goods, owing to the restrictive policy of the forerunner of the Eastman Kodak Co. Mr. PALMER. What do you mean by the restrictive policy? Do they fix a price ? Mr. GENNERT. They had films, but we had no films. We had cameras. But each retail dealer had to have a film, which we did not have. And as a result they cut our cameras out because we did not have the films to sell them. We are left high and dry, and one by one our customers are throwing us overboard. I intend to make a similar argument when this committee reaches the film schedule, which I believe is among the sundries. Mr. PALMER. Have the prices on photographic products gone up or down, in view of the controlling operations of the Eastman Co. ? Mr. GENNERT. I do not think there has been a great change either way. Mr. PALMER. In what length of time, say ? Mr. GENNERT. About 10 years. Mr. PALMER. There have been great advances made in the camera manufacturing business in 10 years in the way of improved cameras, have there not ? Mr. GENNERT. There have. Mr. PALMER. But the prices you think have remained about the same? Mr. GENNERT. The prices have remained about the same. Mr. PALMER. Are there foreign cameras which are equal in quality to the Eastman camera ? 886 TARIFF HEARINGS. PARAGRAPH 108 LENSES, CAMERAS, ETC. Mr. GENNERT. There are, but we can not bring them in at the price the Eastman camera is selling for here. We are selling some, out at a higher price than the Eastman. We sell, for instance, a small cheap camera for $2.50 which we import. That is, we sell it if we can. The Eastman Kodak Co. is selling the same camera for $2. Competition under those circumstances is very difficult. Mr. PALMER. You mean the same kind of camera, about the same quality ? Mr. GENNERT. Yes, cameras similar to each other, which will do the same work ours will do. Mr. PALMER. Would the removal of this 45 per cent duty open up this entire American market to the foreign article ? Mr. GENNERT. It would give us an opportunity to compete. At the present moment we not alone have difference in prices against us, but we have the restrictive policy which scares off the customer. If we could get a much lower duty we could at least meet the East- man Kodak Co. in price, and we might even afford to spend more money for advertising, and thus create a market. Mr. PALMER. I should think that the Eastman Co. would be satis- fied with a reasonable profit on its capital of, say, 10 per cent, or even 15 per cent, which is a fab- manufacturers' profit, and it could reduce the price of cameras so as to still keep out the foreign camera. Mr. GEXXERT. The profit is so enormous it is hard to tell where the point would be reached by the Eastman Kodak Co. They could afford to keep dropping and dropping. It is unique. I do not remember just what the profit of the Standard Oil Co. is, but even with its tremendous dividends there is a surplus that in a very few years will exceed the capital stock, mounting and mounting by leaps and bounds. Mr. LONGWORTH. But the tariff has nothing to do with the Stand- ard Oil Co.; that is not protected. Mr. GEXXERT. I merely used the instance of the Standard Oil Co. as an instance of prosperity. Mr. LOXGWORTH. But you fire speaking of the tariff. Mr. GEXXERT. My example was probably badly chosen. I did not use it for the purpose of producing a tariff argument. If I created that impression, I want to correct it. The CHAIRMAN. This paragraph reads, "Opera and field glasses, telescopes, microscopes, photographic and projection lenses, and optical instruments. It seems the Government gets about $240,000 or $250,000 out of this item. There must be competition in some of these articles that are in this paragraph to produce that amount of revenue. Mr. GEXXERT. There undoubtedly is, Mr. Chairman, and we make the point that photographic lenses do not belong in that schedule. The CHAIRMAN. What I wanted to ask you was that very question. Does the term "photographic lenses'' cover cameras? Mr. GEXXERT. It does not. A photographic lens is on a sepa- rate piece of wood and easily detachable from the body of the camera. In other words, the only optical part of the camera, is the lens. Mr. PALMER. Cameras come under this section as photographic lenses ? SCHEDULE B. 887 PARAGRAPH 108 LENSES, CAMERAS, ETC. Mr. GENNERT. They come in under optical instruments. The board of appraisers has classed them as optical instruments. Mr. HARRISON. It says, "Photographic and projection lenses and optical instruments, and frames for mountings for the same." Mr. GENNERT. Yes, but the Board of General Appraisers has said that cameras are optical instruments. Mr. HARRISON. You probably know that the Democratic plat- form calls for the placing of trust-controlled products on the free list. Suppose we attempted to put the products of the Eastman Co. upon the free list; what effect, if any, would that have upon any of the manufacturers of cameras in the United States ? Mr. GENNERT. It would be a benefit to everybody, and it would permit a competition between outsiders and the Eastman Kodak Co. There would be only one class of manufacturers who might be harmed. The manufacture of lenses and shutters, while it is not a large part of the industry, is still carried on on a fairly competitive basis. The suggestion I was going to take the liberty of making to this body was that a separate duty be levied on cameras. We desire to import from Europe camera bodies, namely, a box, which is not optically equipped with a lens and a shutter. When this box has been imported from Europe we intend to go to the American manu- facturers of lenses and shutters, an industry which is still independent, and equip our European-bought bodies with American optical por- tions. And I might add that we do not manufacture these Ameri- can optical portions. Mr. HARRISON. How large a proportion of the camera production in the United States is controlled by the Eastman people ? Mr. GENNERT. At least seven-eighths, if not more. Mr. HARRISON. Are they selling their products cheaper abroad than they are in the United States ? Mr. GENNERT. As to answering yes or no, I do not think I can answer. Their sale in foreign countries depends upon the condition of those countries. If, for instance, there is a duty into the country, persons buying are given a large discount for customs, so that they can meet competition. I do not think there is a great difference between the prices they get abroad and the prices the others get. They are always there and sell cheap enough to be able to compete abroad; and, while they have not the control abroad they have in America, they still do a large business in practically every civilized Eur6pean country. Mr. HILL. Do you know if they have factories abroad ? Mr. GENNERT. They have factories for certain articles, but which ones I can not tell you. Mr. HILL. Do you know whether there is any financial connection between the Eastman Kodak Co. and the foreign Kodak Trust in England ? Mr. GENNERT. There is undoubtedly some connection. Mr. HILL. There is undoubtedly? Then putting the article on the free list, even though the Democratic platform called for it, does not necessarily call for putting the foreign trust on the free list, but only domestic articles on the free list ? 888 TARIFF HEARINGS. PARAGRAPH 108 LENSES, CAMERAS, ETC. Mr. GENNERT. I might say Mr. HILL (interposing) . Can you reach these people by the tariff ? Mr. GENNERT. Yes. Mr. HILL. Then I would like to know why could not the Eastman Co. manufacture abroad any article made free, manufacture it in their factories abroad, and ship the finished product here and sell it here under the free schedule ? Mr. GENNERT. They make everything here that thev can make cheaper; they do not manufacture abroad for the American market at all. Mr. HILL. Why would not they do it if it was free ? Mr. GENNERT. I do not know. Mr. HILL. That is what I say. Can you reach this problem by tariff regulation ? Mr. GENNERT. If the tariff is reduced we can. Even if we do not buy the goods from Eastman, if the tariff is reduced, we can get the goods from others at such a price that we can compete here. Mr. HILL. I am just as much opposed to the trust proposition as you are. But the question I w r ant to know about is what is the best way of reaching it. If the Eastman Co. has a factory in England, and another in Germany, and the articles they make are put on the free list, how have you helped the situation any? Mr. GENNERT. To answer your question properly, I would have to know more than I do about the extent to which the Eastman Kodak Co. manufactures abroad. Mr. G. C. GENXERT. I think I can answer your question. The Eastman Kodak Co. does not manufacture in Germany. Mr. HILL. Do they in England ? Mr. GENNERT. They have a factory in England. I do not think they make any cameras in England. Mr. HILL. Have the}- any business connection with anybody else in other countries, or is it the same company there as here? Mr. GENNERT. They have none that I know of. They have offices for the sale of their goods. There was a report some time ago they had joined with a company in Dresden. I tried to verify that report when I was in Germany this summer, but I was assured there was no truth in it by the officers of the company. Mr. HILL. Are you manufacturing here ? Mr. GENNERT. I manufacture on a small scale here. Mr. HILL. What would be your judgment if they did have a factory abroad whether putting the product on the free list would in any way relievo the situation? Mr. GENNERT. The putting of cameras on the free list will relieve the situation in this way: There are factories abroad at the present moment prepared to supply us with goods appropriate for our use. There are none in the United States. We are making plans now to go into the manufacture ourselves. We arc not afraid of the free list. There will always be a certain trade in this country in cam- eras of foreign manufacture. Mr. HILL. You are not manufacturing now? Mr. GENNERT. We are on a small scale. We are preparing to embark on a larger scale. It is only a year since the Houston patent, SCHEDULE B. 889 PARAGRAPH 108 CAMERAS, LENSES, ETC. which controlled the camera, expired. Before that the Eastman Kodak Co. had absolute control, except of a license owned by the Ansco Co. Mr. HILL. While I am opposed to the trust proposition, I can not quite see how, for instance, taking sewing machines that are made here, and then having the same machines made as extensively abroad as here how it is going to relieve the situation by putting such an article on the free list, when it can be made abroad cheaper than it can be made here. Mr. GENNEET. I have not said it could be made abroad cheaper. I do not believe the kodak company would save any money by manu- facturing in Europe. Mr. HILL. They certainly are not barred out of England by a pro- tective tariff, and if they have a factory in England there would be nothing to prevent them making them there, and if they could make them cheaper, selling them over here in competition. Mr. GENNERT. They do not make them hi England. They export to England, Germany, and France, as far as I know. The exports amount to more than half a million dollars, photographic cameras alone. Mr. HARRISON. What do the imports amount to ? Mr. GENNERT. They are very small. Mr. HARRISON. About one-half million came in under paragraph 108, but they are classed by the Treasury Department with these other goods, under the same paragraph, and we do not know what proportion was photographic material. Mr. GENNERT. It is so infinites imally small they could not be con- sidered separately. Mr. HARRISON. Putting cameras on the free list, then, would have no effect upon the revenue? Mr. GENNERT. None whatever. It would, in so far as the imports would increase, and if there was a light duty the Government would have that advantage. Of course, if they are put on the free list that would not be the case. Mr. DIXON. Do the Eastman people manufacture everything that goes to make up a camera ? Mr. GENNERT. They manufacture everything that is used in photography. Mr. GENNERT. In conclusion I would like to read the suggestion I have taken the liberty to put into my short brief. We request the following new paragraphs in the law that is being prepared, in place of the present duty of 45 per cent on cameras- levied as optical instru- ments under paragraph 108 of the present tariff law: 1. Camera bodies not optically equipped and parts thereof to be free. 2. Cameras optically equipped, 15 per cent ad valorem. Mr. Chairman and Members of the Ways and Means Committee: I am here before your committee for the purpose of requesting changes in the tariff on photographic cameras. These changes, if made, will tend to free the trade in these instruments from the unfair selling restrictions under which it is now laboring, by reason of the fact that the entire photographic supply business in this country is con- trolled by the Eastman Kodak Co. These changes would increase the revenue to the Government by changing the present conditien of merely nominal imports to one of considerable importation, and would benefit the public by making possible a reduc- tion in prices. 890 TARIFF HEARINGS. PARAGRAPH 108 LENSES, CAMERAS, ETC. Some years ago there were a number of factories engaged in manufacturing cameras in America. At the present time one single company, the Eastman Kodak Co., which has absorbed the most importantcamera factories of this country, is producing at least seven-eighths of all the cameras made in America; the Eastman Kodak Co. is selling cameras to retailers under a restriction policy and refuses to allow anybody to sell its cameras who either sells cameras made by any other manufacturers or who sells films used in the cameras which are not the product of the Eastman Kodak Co.; this same principle they apply at will to their other products. That the charge that this company is a trust in violation of the Sherman law is not an empty statement, is best evidenced by the fact that this company's methods are now under investigation by the Department of Justice, where detailed information can most easily be obtained by this body. I append a copy of a letter received by my firm from a dealer in photographic materials in New York City, whose name I will not give, unless this committee re- quests the same, in order that this dealer may not be cut off from further supplies of goods by the Eastman Kodak Co. The letter is as follows: "We are returning herewith 1 Ensignette camera, list, $10; 1 Ensignette, list, $15. Please credit these to our account. We could, no doubt, have sold a large number of these cameras, but, as the Eastman Kodak Co. refuses to sell us their product if we sold Ensignettes, we are obliged to discontinue the sale of them." This letter is dated March 27, 1912, and is one of a large number of similar import, which we are prepared to submit to this body. That the Eastman Kodak Co., which not "alone dominates but controls the entire photographic business of this country in cameras, plates, and films, is in no need of a protective tariff is best evidenced by the fact that it has paid in 1911 and 1912 a divi- dend on its common stock of 40 per cent per annum, and that its earnings on the com- mon stock for 1911 were 57 per cent, the common stock amounting to about $20,000.000. My firm, for instance, is unable to buy any goods or to buy any cameras or films from the Eastman Kodak Co. simply because we have the temerity to wish to sell also films and cameras not manufactured by the trust. Under these trade conditions and particularly in view of the high duty of 45 per cent levied on cameras, competi- tion has been impossible, and we have been forced to go to Europe to get our cameras, which we must import and sell with very little profit. This is a situation from which we now desire relief. Cameras have never been specifically provided for in any of our tariffs; they have been classified by the board of appraisers as optical instruments, which we contend they are not. Cameras are made up of a camera body and a lens, which latter is an optical instrument. Th^ camera body is certainly not an optical instrument. The lenses, and the shutters used to govern the quantity of light admitted through the lens, both of which are properly optical instruments, are not under the domina- tion of any trust in this country, and their manufacture is independently and suc- cessfully carried on in the United States at present under proper and fair conditions, quite different from the completely equipped cameras. We desire to import camera bodies as we have been doing in the past that is to say, cameras not equipped with a lens and shutter for the reason that we can not buy these bodies in America. After their importation we will equip these bodies imported from abroad with lenses and shutters of American manufacture, thus giving employ- ment to American labor. The optical portion of the camera that is to say, the lens and shutter-^originally constitutes about one-third of the value of the completely equipped camera. We request, therefore, the following new paragraphs in the law that is being prepared in place of the present duty of 45 per cent on cameras levied as optical instruments under paragraph 108 of the present tariff law: 1. Camera bodies not optically equipped, and parts thereof, to be free. 2. Cameras optically equipped, 15 per cent ad valorem. We feel sure that if these changes in the tariff law are made, the present importa- tion of cameras, which is so small that the Department of Commerce and Labor fur- nishes no statistics in regard thereto, will be increased at least fourfold over the present figure, of less than $50,000 per annum, an amount to which the undersigned is no doubt the largest contributor. Opposed to this small amount are exports of cameras and other photographic apparatus which amounted for the nine months ended March, 1912, to 535,158, an amount shown by the last statistics of the Bureau of Commerce and Labor to be on a constant increase. Respectfully submitted. G. GENNERT, 24 and 26 East Thirteenth Street, New York, N. T. NEW YORK, January 9, 1913. SCHEDULE B. 891 PABAGBAPH 108 LENSES CAMEBAS, ETC. LETTER OF WILLIAMS, BROWN & EARLE (INC.), REGARDING LENSES, ETC. PHILADELPHIA, January 10, 1913. CHAIRMAN OF COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. DEAR SIR: We desire to call your attention to the unnecessary duty on microscopes, photographic and projecting lenses. Microscopes are manufactured in the United States to-day and sold at prices which are as low as goods of similar quality can be imported into the United States. It, therefore, is not necessary for any duty to be levied on microscopes, so far as a protec- tion to the industry is concerned. The American manufacturers of photographic and projecting lenses are amply able to compete with their product without any duty being levied upon such lenses. Micro- scopes, photographic and projecting lenses are scientific instruments used in the arts and therefore should be free of duty so as to enable institutions and individuals engaged in research work and investigation to get their goods at a lower price. Many physicians of limited incomes are deprived of the use of a microscope owing to the high prices that are charged on account of the duty which is levied on the foreign product and on account of the large profits made by the American manufac- turers on microscopes. We hope, therefore, that you will remove the duty on microscopes as well as on photographic and projecting lenses, neither of which are luxuries, but are intended for scientific research and purchased by those who are not able to expend large amounts of money and are used by them in many cases for a lifetime in their profes- sion 01 occupation. Yours, very truly, WILLIAMS, BROWN & EARLE (!NC.), HENRY S. WILLIAMS, President. REQUEST OF CALIFORNIA CAMERA CLUB, REQUESTING THAT PHOTOGRAPHIC APPARATUS BE PLACED ON FREE LIST. SAN FRANCISCO, CAL., January 16, 1913. Hon. OSCAR W. UXDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: The California Camera Club, an organization in this city of about 400 users of photographic apparatus, and no doubt representative of the attitude of thou- sands of other photographers, at a recent meeting passed a resolution to be presented to your honorable committee, asking that in the proposed revision of the tariff down- ward, the excessive duties of 45 per cent prevailing on photographic apparatus be removed altogether and they be placed on the free list or the duty reduced to some figure that is equitable to thousands of consumers. It is alleged as a special and good reason for drastic action on the part of your commit- tee on this schedule, and it is a matter of common knowledge that the business of the United States in photographic apparatus and supplies, with the exception of a com- paratively negligible amount, is done and controlled by one concern and its several subdivisions, and that this concern by a trade agreement rigidly enforced for the past 12 years upon dealers in photographic supplies, has prevented the development and marketing of competitive photographic products. As an example of the working of this restrictive system, it is cited that the San Francisco City directory of 1912 list 26 exclusive dealers in photographic products, of whom there is only one known to be not doing business under this trade agreement. This condition is universal throughout the country. The only relief for the consumer from this noncompetitive condition is by purchasing abroad where supplies and apparatus of the highest character can be had at reasonable prices, but this relief is denied him because of the prohibitive protective tariff duty. It is a well known fact that the concern referred to above does an enormous foreign business in its products in Europe and England as well as in other parts of the world, under keenest competitive conditions prevailing there, and it is self-evident that a protective tariff duty is not needed in this country excepting as it has served during the past 12 years as a bulwark to the non-competitive business policy of this concern 892 TARIFF HEARINGS. PARAGRAPH 108 LENSES, CAMERAS, ETC. enforced through its trade agreements. During the period referred to, it is not known to have given the consumer the benefit of any reduction in price originally established. It is also asked that relief be afforded from the prohibitive duty of 45 per cent on photographic lenses, particularly in relation to scientifically corrected lenses known at. anastigmats, which are universally used in the arts and sciences in the production of accurate photographic work. As an incident of the controlled development of the photographic business of the United States as referred to above in this communication, there has in consequence developed in this country only one large and prominent manufacturer of photo- graphic lenses. We believe investigation will show that bis concern, which manu- factures the bulk of corrected American-made lenses (under German patents and royalty) is publicly advertising and selling its lenses abroad at figures corresponding to prices charged consumers in this country less the 45 per cent duty. It is necessary in this communication to cover the contingency that in your hearing there may be representation by other so-called American manufacturers of foreign lenses against a reduction of duty. It is therefore desired to call to your attention that there are several concerns of this kind who import the glass elements of expensive anastigmat lenses unmounted ready for assembling and bringing them in under the low duty charged against unmounted lenses. These finished lenses ready for assem- bling are mounted at small cost compared to the cost of production of the glass elements in metal cells and sold to the American purchaser at a price that includes the full 45 per cent duty, notwithstanding the fact that no such duty has been paid. Basing our information as to the high cost of anastigmat lens on the information thereon given by manufacturers in various lens catalogues the bulk of the cost of such len undoubtedly lies in the grinding and finished polishing of the lens elements and the culling out of faulty lenses after all the work on them has been done. The various allegations made above concerning these various concerns are not made for the purpose of criticising them, but for the sole purpose of showing that an intolerable and unjust condition has existed for years, which was in part made possible by high protective tariff duties, which without the tariff would quickly and equi- tably regulate itself. Abroad, where free trade or reasonable duties prevail, no such condition exists, and there is the keenest competition and wide varieties of photographic manufac- turers for purchasers to select from. The condition in this country, it is contended, has stifled individual enterprise and native ability, and where in other lines we are pieemme:it such is not the case in photography. It may seem irrelevant in a communication of this character to make such asser- tions, but it is an interesting fact that the epoch-making discoveries and inventions in the art and science of photography in the last 10 years, as instanced by the dis- covery of color photography by Lumere and the invention of new anastigmat lenses and developments of the chemistry of photography, have been made abroad and not in the United States. The California Camera Club four years ago, at the time when this schedule of the Payne-Aldrich bill was up for revision, took up the matter of the reduction of these duties in a personal communication to the chairman of that committee, and the only acknowledgement of it was that it had been received and filed. We trust that our interests and the interests of thousands of others who are not able in any other way to present their case to your committee will fare better at your hands. Begging leave to remain, we are. Respectfully, yours. RESOLUTION COMMITTEE OF THE CALIFORNIA CAMERA CLUB, C. P>. AUKKBACH. Chairman. BRIEF OF SENECA CAMERA MANUFACTURING CO., OF ROCHES- TER, N. Y., RELATIVE TO THE DUTY ON PHOTOGRAPHIC CAMERAS. ROCHESTER, N. Y., January 15, 1913. To the Committee on Ways and Means of tJte House of Representatives: The Seneca Camera Manufacturing Co., of Rochester, X. Y., files this statement relative to the tariff upon photographic cameras in answer to the statement of Mr. G. C. ( iennert. an importer and dealer of New York City, made to the committee on January !). 1!M3. The present duty is 45 per cent ad valorem under paragraph 108. SCHEDULE B. 893 PARAGRAPH 108 LENSES, CAMERAS, ETC. The Seneca Camera Manufacturing Co. is engaged in the manufacture of photographic cameras at Rochester, X . Y. It manufactures no other line of goods. It has an invest- ment of at least $125,000 in that business and employs at least 175 hands upon the aver- age throughout the year in the manufacture of cameras. Mr. Gennert advocates such change in the law as shall put camera bodies not optically equipped and parts thereof on the free list and a duty of 15 per cent ad valorem on cameras optically equipped. In support of this he states: First. "That domestic dealers like himself in photographic cameras can not buy and sell cameras of domestic manufacture, because the entire supply thereof is con- trolled by the Eastman Kodak Co. That the Eastman Kodak Co manufactures seven- eighths or more of the domestic product. That no domestic manufacturer of photo- graphic cameras can compete with the Eastman Kodak Co." The fact is that there are five substantial business concerns manufacturing photo- graphic cameras in the United States, all of which are wholly independent of the Eastman Kodak Co. and are successfully competing with it. These are: The Ansco Co., Binghamton, N. Y.; Burke & James, Chicago, 111.; Connolly Camera Co., Roches- ter, Minn.; Gundlach-Manhattan Optical Co., Rochester, N. Y.; Seneca Camera Manufacturing Co., Rochester, N. Y. In addition there are some smaller companies which it is not necessary to mention. The foregoing five establishments have an aggregate investment in the manufacture of photographic cameras of at least $750,000. They have upward of 850 employees in that line of manufacture alone and they produce at least one-fourth and probably one-third of all the photographic cameras sold in the United States. Mr. Gennert can buy domestic made photographic cameras from any one of the above-named five con- cerns on terms which will enable him to compete successfully, so far as the character c.i the product or the price is concerned, with the cameras manufactured by the East- man Kodak Co. For several years he has purchased cameras of the Seneca Camera Manufacturing Co. For the year 1910 his purchases from that company amounted to $6,855; for 1911 to $5,053; for 1912 to $4,258. Mr. Gennert states: Second. "That the placing of photographic cameras upon the free list would not affect any domestic production except that of the Eastman Kodak Co., which needs no protection because its profits have been so large that it is paying annual dividends of 6 per cent on upward of $6,000,000 of preferred stock and 40 per cent on upward of $19,000,000 of common stock, the common shares of the par value of $100 having now a market value of upward of $700 each." The profits of the Eastman Kodak Co., as shown by the value of its stock and by the rate of dividends which it is now paying are correctly stated, but the inference that these profits are made from the manufacture and sale of photographic cameras is wholly incorrect. The Eastman Kodak Co. has never made any unusual profit from the manufacture and sale of cameras, which is but a very small part of its business. For many years that company has manufactured and sold a complete line of photographic goods, including besides cameras, photographic papers, plates, and films, develop- ment apparatus and supplies, moving-picture films, etc. Until the year 1906 it had never paid a dividend upon its common shares of more than 10 per cent. Up to 10 years ago its preferred and common stock was selling at par or slightly above par. Then came the moving-picture business, for which it mamifactures the films. It has now a complete monopoly of the manufacture of moving-picture film in the United States and a complete monopoly of supplying moving-picture film to the moving-pic- ture establishments in the United States. This business has proved enormously profitable and accounts for the extraordinary profits of the company. Mr. Gennert also states: Third: "That the Eastman Kodak Co. refuses to permit dealers in photographic sup- plies to purchase and sell its goods if the dealer undertakes to sell a camera of any other manufacturer. Having stated that there was no, or substantially no, domestic pro- duction except that of the Eastman Co., he leaves the inference to be drawn that the Eastman Co. would be properly dealt with by putting its product on the free list." It is true that the Eastman Kodak Co., by methods which are probably within the law, restricts its retail dealers to the sale of its products exclusively. The independent manufacturers of photographic apparatus and supplies have suffered enormously from this practice of the Eastman Co. They have maintained their position hi spite of it. They would welcome the abolition of this practice and the removal of this obstacle to 'then- growth heartily, as heartily as Mr. Gennert would, for their interest and his in that respect are identical. They fail, however, to see how the removal or reduction of the duty upon cameras would accomplish that even to the slightest 894 TARIFF HEARINGS. PARAGRAPH 108 LENSES, CAMERAS ETC. degree. The Eastman Kodak Co. manufactures a complete line of photographic appa- ratus and supplies. It advertises its goods extensively so that they are well known. It is, therefore, to the advantage of the retail dealer to handle their goods. If the Eastman Co. can legally require the retail dealer or legally make it an object to the retail dealer to handle Eastman goods exclusively, it will, of course, do so. The tariff, however; has nothing to do with that. Neither the rate of duty nor the absence of duty upon imports will affect that feature of the business. If, however, the Eastman Kodak Co. was the only domestic concern to be affected it might very well be urged that it deserves no protective duty, but that is not the case as we have already shown. The Eastman Kodak Co. controls the Canadian Kodak Co. (Ltd.), of Toronto, Canada; the Kodak (Ltd.), of London, England; the Eastman Kodak Socie'te' Fran- caise of Paris, France, and the Kodak Gesellschaft, of Berlin, Germany. It is, there- fore, in a position to take advantage of any reduction in the duties upon imports imposed by the United States and to manufacture its goods abroad and supply the domestic market. The contrary is true of the independent manufacturers in the United States. Mr. Gennert further states in effect: Fourth. "That the present duty of 45 per cent prevents the importation of cameras at a price which will compete with the domestic made article." To bear out this statement Mr. Gennert refers to a small camera which he imports to sell at $2.50. He states that the same camera of domestic make sells for $2. The camera which he refers to as imported by him is the "Ensign " 2| B made by Hough- tons (Ltd.), of London and Glasgow. The $2 domestic camera to which he refers is the No. 2 "Brownie" made by the Eastman Kodak Co. which corresponds to the No. 2 "Scout " made by us. We submit with this statement a sample of each of these three cameras in order that the committee may see that the $2.50 English made camera is superior in every way to either of the $2" American cameras. The difference in the cameras accounts for the difference in the retail price, and when the difference in the cameras is taken into account it is apparent that the present tariff of 45 per cent does not prevent an English made camera from competing as to price with a similar camera of domestic manufacture. Furthermore, the letters from customers produced by Mr. Gennert before the committee show that with the present rate of import duty upon cameras, English made cameras can be imported at a price which will enable them to compete freely with American made goods. One of the letters produced by Mr. Gennert before the committee read as follows: "We are returning herewith one Ensignette camera, list $10, and one Ensignette, list $15. Please credit theso to our account. We could no doubt have sold a large num- ber of theso cameras, but as the Eastman Kodak Co. refused to sell us their product if we sold Ensignettes we are obliged to discontimie the sale of them." Another letter produced by Mr. Gennert read as follows: "I am returning via United States Express one Ensignette camera which I wish you would give me credit for as the Eastman Kodak Co. have stopped me from sell- ing it.'' Another letter road: " I must return the camera because I can not afford to incur the displeasure of the Eastman Kodak Co." The " Ensign pt to ' ' cameras above referred to are manufactured by Houghtons (Ltd.), of London and Glasgow, and are a folding vest-pocket or small type, as the name indicates, of thoii "Ensign" camera. It is therefore apparent that the duty of 45 per cent under existing law does not prevent Mr. Gcnnort from dealing in foreign made cameras through retail dealers in the United States, but that the dealers were only prevented from handling the foreign marie goods by the practice of the Eastman Company in restricting such dealers to the Eastman Co.'s goods exclusively. It is true, as was pointed out at the hearing before this committee on the 9th inst., I hat the importation of foreign-made cameras under existing law is very small. It does not follow, however, that the present duty of 45 per cent ad valorem is prohib- itive. On the contrary it appears from what has been above stated that American dealers can handle and would be very u;lad to handle foreign cameras under the present rate of duty were it not for the restrictions put upon the retail dealers by the East- man Kodak Co. The Seneca Camera Manufacturing Co. has a modern plant of the highest efiiciency. It is in keen competition with the Eastman Kodak Co. in the manufacture and sale of cameras and with the four other independent manufacturers herein named. It pays out to its employees in wages an amount equaling over 69 SCHEDULE B. 895 PARAGRAPH 108 LENSES, CAMERAS, ETC. per cent of its output of manufactured goods. If the duty of 45 per cent ad valorem under which it has been able to establish its business as a competitor of the Eastman Kodak Co. is removed or materially reduced its business can not continue. The same must be true of the other independent camera makers above named. It is, therefore, respectfully submitted that the present duty of 45 per cent ad valorem so far as it applies to photographic cameras is reasonable and should not be changed. SENECA CAMERA MANUFACTURING Co., By F. K. TOWNSEND, Secretary and Treasurer. DISCUSSION OF THE CAMERA INDUSTRY. LETTER OF THE ANSCO Co., BINGHAMTON, N. Y. ANSCO Co., Binghamton, N. Y., January 15, 19 IS. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, 9 House of Representatives, Washington, D. C. DEAR SIR: We read a few days ago in the newspapers an account of the hearing on the schedule affecting duties on photographic cameras, and regret that through lack of notice or inadvertence on our part we were not represented at the hearing. According to the press reports Mr. G. Gennert has made the statement that there is a large profit in the manufacture of cameras; that the Eastman Kodak Co. has made enormous profits from that end of their business, because of the high import duties, which keep foreign-made cameras out. The facts warrant me in stating that Gennert'a attention is absolutely unwarranted. The Ansco Co. makes a line of cameras paralleling that of the Eastman Kodak Co. The cost of production, namely, the raw materials and the high wages which prevail, makes that branch of the Ansco Co.'s business almost unproductive. All the independent dealers in photographic supplies in this country know that we have for several years freely admitted that we only manufacutre cameras for the purpose of giving the independent dealer a complete assortment of photographic goods to parallel that of ; he Eastman controlled dealer. This statement has been made to Gennert, who, as a dealer, was at one time interested in the sale of Ansco cameras. In other words, we manufacture cameras practically at no profit, after the large investment is taken in consideration; so that the independent dealer, whom the Eastman Kodak Co. declines to do business with, may have cameras to sell as a vehicle to dispose of other goods on which we and other independent manufacturers make a reasonable profit. The importation of cameras from Europe has not in any way been impeded by the duty as it now stands. The duty is less than the difference between the cost of manu- facture in Europe, where labor is cheaper, and the cost of production in this country. There are now being imported into this country all the different models of cameras made in Europe for which a market has been created here. If more are not imported and sold . it is because the European manufacturer does not create or produce business, but merely waits until the American manufacturer has established a demand. There are many types of cameras now made in Europe in imitation of the American designs, devices, and models, which have been widely advertised in this country, and for which the American manufacturer, at an enormous expense for propaganda, has created a large demand. Those cameras may not be imported into this country to fill this demand created by tl.e American manufacturer who has been able to advertise them because of patent protections simply because they are alleged to be infringements of American patents. The hindrance heretofore to the importation of these styles of cameras has been the Houston patent. The Houston patent has recently expired, and the European makers will now have a chance to see what they can do on an even basis with American manu- facturers, whose protection is simply a duty equivalent to less than the difference between the cost of production in Europe and the United States. To lower the duties will be throwing away revenue and will only result in injuring American industries. Photographic cameras, especially the amateur variety in which importers are inter- ested, may only be classified as an article of luxury purchased mainly by those who can afford to indulge in the pastime. In accordance with what we understand is the policy to be pursued, the Government is committed, and properly so, to tax such 896 TARIFF HEARINGS. PARAGRAPH 108 LENSES, CAMERAS, ETC. articles of luxury to the end that the downward revision on necessities may not affect the total revenues. It is stated by Gennert that the Eastman Kodak Co. is a trust; that it has through many reprehensible practices restrained trade, so that they are in reality a monopoly. We quite agree with Mr. Gennert in this respect; and if the Government is in a position to correct these abuses in restraint of trade it will help us in the fight we have, after a long struggle, waged 'successfully in building up a business on independent lines, which affords some relief to the photographic dealer and to the photographic consumer by means of open competition. We certainly, however, must protest against any attempt to punish the Eastman monopoly by reducing duties on imported cameras, for this, instead of punishing the Eastman Kodak Co., will be the means of putting out of business those independent concerns, like ourselves, which have afforded the only competition in the manufacture and sale of photographic goods in this country. The Eastman Kodak Co. is an international concern. It has factories in several countries in Europe and in Canada. If the duties were reduced so that it would not be profitable for them to manufacture cameras in this country they will surely manufac- ture the cameras in England or elsewhere, where labor and raw materials are lower, and simply export them to this country. If the Eastman Kodak Co. is forced to manufacture in Europe for the purpose of exporting cheap-labor cameras, because of a lower scale of duties, they would have no difficulty in consolidating and acquiring the few camera factories in Germany and England through their European company. In that way they would destroy the American independent manufacturer and would control the price to American con- sumers without the Sherman law being operative against them. Indeed, it has already been reported that the Eastman Kodak Co. has acquired the lea Co. and other leading factories in Europe. This method of stifling competition in this country is nothing new, for the Eastman Kodak Co. a few years ago did this very same thing with manufacturers of raw photo- graphic paper in Europe. This paper deal was the foundation for the Eastman Kodak Co.'s strong financial and commanding position and for the use they now make of their preponderating capital and output. Mr. Gennert, who himself is now advocating the destruction of the American camera industry, would be a sufferer from his own cupidity, for if the Eastman Kodak Co. manufactured cameras in Europe for importation into this country, as before out- lined, and in addition controlled the European manufacturers, Mr. Gennert's con- tract with his camera maker in Europe would not in that event be worth the paper it is written on. The Government must not lose sight of the fact that from a revenue standpoint it would not be any better off. The revenue in the way of duties on imported finished cameras might increase, but the revenue in the way of duties on raw materials will cease, such as, for instance, the duty on glass for the manufacture of lenses. Revenues in the way of duties, in the last analysis, are collected from the consumer, and since revenues are derived from the people and from no other source it is plain that every industry, receiving a body blow through the tariff, means so many thou- sand operatives who find their purchasing power reduced, and the more the purchas- ing power of the people is reduced the fewer goods will they be able to buy on which the Government can collect duties. Gennert and other importers who have not the ability or courage to manufacture cameras in this country and who are simply selfishly interested in making greater profit as parasitical middlemen, are distorting facts for personal gain at the expense of ihe Government and to the lasting detriment of the American people. If there are to be further hearings affecting photographic goods, I shall be greatly obliged to be advised of same by wire at my expense, if the time is short, in order that we may cooperate with the Government in reaching a conclusion fair alike to the Government, the consumer, and the manufacturer. Very truly, yours, Axsco Co., T. W. STEPHENS, President, SCHEDULE B. 897 PABAGBAPH 108 LENSES, CAMEBAS, ETC. (LETTER OF G. GENNERT, NEW YORK, N. Y.) FEBRUARY 19, 1913. The COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. SIRS : Referring to the letters sent to this committee by the Seneca Camera Manufac- turing Co. and the Ansco Co. in opposition to your petitioners request for a revision downward of the present duty of 45 per cent on photographic cameras assessed under Schedule B, paragraph 108, as optical instruments, we beg briefly to state as follows: Both letters consist merely oi denials of petitioners evidence and contain no facts that will or can enlighten this committee on the real condition of the industry. The objectant letters entirely ignore the following salient points: (1) There are now practically no imports of camaras, whereas the exports for the year ending December, 1912, were $672,108. Lowering the duty to 15 per cent will greatly increase the revenue. (2) The Eastman Kodak Co. can manufacture more cheaply in America by its tre- mendous output than any European factory. This company is practically the only exporter to Europe, where it competes vigorously but where it does not manufacture cameras. The Eastmen Co. will not therefore buy up the European factories and export cameras to the United States if the duty is reduced. The Seneca Camera Manufacturing Co. in its letter to this committee seems to want this committee to believe that the Eastman Kodak Co.'s methods are not illegal. On November 28, 1911, the Seneca Co. sent out to the trade the annexed circular, which throws a strange light on the sincerity of their present attitude before this committee. Respectfully submitted. G. GENNERT, 24 East Thirteenth Street, New York. [Letter annexed to statement of G. Gennert.] SENECA CAMERA MANUFACTURING Co., Rochester, N. Y., November 28, 1911. To the photographic trade: The pitiable, humiliating spectacle of a great man brought to his knees, that's the mental picture the Camera Trust's recent announcement suggests. We mean, of course, the letter sent you under date of November 15, 1911, by the Photographic Trust. Have you digested it? Was there ever such a commingling of craven, abject fear, with fawning hypocrisy? In your mind's eye cast back through the years of tyrannous oppression, when Bill, the chiD swinger, and his corps d' espionage ranged the land; when no dealer was safe for a minute from the paid minions of their corps of detectives; look along the pathway of years, strewn with wrecks in the photographic business, and place the responsibility; recall the restrictions, the rebates, the systems of petty meddling. Think what you have had to put up with in your struggle to eke a living out of this business. Friend, ask yourself what has ever been the attitude of the trust. Hasn't it used the photo- graphic dealer as one would a common conveyance? Has it ever given to him as much thought as you would bestow on an office boy? As the photographer may inadvertently take a picture on a plate already exposed, so everything has appeared to the trust through the film of money. This film has grown to be a cataract and an operation is necessary, in fact, overdue. You will remember that often, like Daniel of old, we called the attention of this Belshazzar, drunk_with sordid gain, to the handwriting on the wall. At last, outraged freedom shrieked aloud and the Government came to the rescue. Trusts fell on all sides; from the proud position of mighty arrogance the Photographic Trust fled in terror. Calmly the requirements of the Department of Justice regarding corporations were formulated into three questions, on which every corporation could test itself as to whether it was complying with the law or not. Here are the questions: Are you restricting production? Are you using duress upon your competitors? 78959 VOL 113 57 898 TARIFF HEARINGS. PARAGRAPH 108 LENSES, CAMERAS, ETC. Are you, by your combination, regulating the prices at which your goods are resold? Can the Camera Trust answer any of these questions in the negative? What is that we hear from you, friend? Caught with the goods? Now, listen to tne wail of the octopus in its official letter: "With restrictions re- moved, we fear there will be a tendency to reduce the dealers' profit." Noble and trenchant thought! .The trust is capitalized at $35,000,000; you know how much of that is water. It is paying annually 40 per cent dividends. Has it ever given thought before to what you were making? And do you make 40 per cent on the real capital invested in your business? With a fawning, ingratiating, solicitousness that is en- tirely new to its character, the trust asks you in its letter what it shall do in the future, what shall be its policy. You are invitea to commend the system that has enthralled you in bondage for years, and stood with its foot on your neck. Why? So that if the Government goes further, the trust can rally you to its support. Was there ever anything so impudent as this? Were you ever asked to help the strong man formu- late a policy for running his business before? Why does he come to you when he is in trouble? And, then, that concession on film that he makes, which amounts to nothing. Beware the Greeks bearing gifts. Friend, there is another and entirely different aspect of this whole matter: The inalienable right of the dealer to buy and sell what he wishes is restored to him. Throughout the land the rumble of freedom is swelling to augment the grand reces- sional. We stand forth with renewed courage and rejuvenated spirit; our eyes have fallen on the promised land. The Seneca Camera Manufacturing Co. is the largest independent camera-mak- ing establishment in the world, and commends itself again to your notice. We feel that the time is here when our goods and ourselves are worthy of your serious con- sideration. We can supply you with everything photographic and no one can dis- criminate against you for selling our goods. Will you seek a better acquaintance? To-day is the day and this is the hour. Yours, for an early reply, SENECA CAMERA MANUFACTURING Co. BOSTON, MASS., January IS, 191S. Mr. OSCAR UNDERWOOD. DEAR SIR: Cut the duties out on all goods sold in foreign markets cheaper than the same is sold in our markets. That is what the people want, though the majority of those who appear before your committee have an ax to grind, and are therefore the only enes you hear from. I note testimony of Gennert of New York. There is no doubt that there is a photo- graphic trust. I am an amateur photographer of 25 years' experience. The Eastman Co., and its allied concerns, Folmer-Swing, Bausch & Lomb, Rochester Camera Co., etc., are in my opinion all in it. It is impossible to get a well-made camera or lense that is made in this country. I am the owner of a Blair English compact camera, made before they were gobbled by the trust; Honduras mahogany, brass screwed, tongued and glued, and after 20 years it is still solid and sound. That camera or one as good can not be found in our markets to-day unless foreign built. To-day they are all basswood or white wood, glued up with fish glue and stained, or of cheaper cedar, filled and polished to look and sell for mahogany. I have just imported for a State institution, several thousand dollars worth of genuine Carl Zeiss goods lenses, microscopes, etc. Comparing them with supposedly the same goods made by Bausch & Lomb under the Zeiss patents show plainly that they are much superior to the American make. Their execution is far better, definition and covering power, and the mounting is superb. Now, I do not doubt that Bausch & Lomb can do good work, but they don't have to under this accursed tariff and therefore they won't. There are no American goods in the line of photographic goods and microscopes that can compare with any one of a half a dozen foreign makers. It all works to the bad it injures the workman, saps our national pride in our goods, and costs those who want the best a lot of money that only goes into the pockets of certain people who have no patriotism save the almighty dollar. Foreign makers don't even send their best goods to this market they don't have to. Their second- rate goods are better than our best. We are the dumping ground for the second-rate products of the world. Patents are bought up or kept out of the market in other ways, so that such concerns can pay ungodly dividends on their watered stocks. There is no national pride in SCHEDULE B. . 899 PARAGRAPH 108 LENSES, CAMERAS, ETC. our products there never will be until we can get men in our Congress that can hear the shout of the common people as plainly as they can the voice of the dollar. This is hastily written, but by a man whose ancestors helped build this country from the very start, and taken together with his father, voted for every Democratic President since Jefferson. This iniquitous tariff business has had my goat so many years that once started I am afraid I don't know enough to stop. I hope that we are at the end of building millionaires at the expense of the people, but we shall see what we shall see. Our successes in the past were but a change of vendors. Yours truly, GEORGE H. UNDERBILL, M. D. Kodak goods could be sold at a profit, if sold at all, in competition with the rottenest goods made in the world. A tariff needed to protect such goods? Bah! A tariff is needed to sell them at all they are the cheapest of the cheap. This is but cold frozen fact. NEW YORK, Jan. 6, 1913. Mr. OSCAR W. UNDERWOOD, Chairman, Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: As it very likely will not be possible for me to be in Washington at the forthcoming hearings on tariff schedules, I take the liberty of addressing you by letter, lending whatever assistance I can. It is needless to say that I have always fought for tariff reduction, believing the present rate top high in my particular line, which, as you will notice from this letter head, is in scientific instruments and optical apparatus and cameras. I sincerely believe that a reduction of the tariff on cameras, binoculars, microscopes, telescopes, and other high-class optical instruments from 45 per cent ad valorem to 25 per cent ad valorem as assessed under the former Wilson tariff, is fully sufficient. This lower rate of duty will certainly not put out of business any American manu- facturer. In the first place, as regards the camera line, only the cheaper grades are made here by about three or four concerns, of which the Eastman Kodak Co. is the biggest one, and an iron-bound trust at that. These companies, particularly the Eastman Kodak Co., will, even if the tariff should be lowered to 25 per cent, be able to make just as big profits on their goods as heretofore. Of course that company is by coercive trust measures so well entrenched that independent camera manufacturers do not have much show any way, and it is therefore in the interest of the people in general to open the way for competition. Nevertheless mostly foreign cameras of the higher grade are imported, which are not made here. The Eastman Kodak Co. declared in the last few years dividends of between 50 and 60 per cent, and they have a surplus now of a larger amount than their actual capital consists of. This surplus will be converted into watered stock within a short time according to reliable information. The present stock of the Kodak Co. sells upward of $700 per share. Now regarding microscopes. The fact that in spite of the 45 per cent tariff on foreign microscopes the American manufacturers have been able to reduce their prices since the enaction of the Dingley tariff by fully one-third or more shows conclusively that the profits they have made before they reduced the prices were very high and even now, at the reduced prices they are making very handsome profits and are able to compete very successfully with foreign microscopes, even on the duty-free basis. By "duty-free importation" I mean that duty to such educational institutions, which are entitled to duty-free entry under the act of Congress, is remitted. Consequently it is evident that a reduction to 25 per cent duty on microscopes will not hurt the American manufacturers in competition with foreign goods. Now as regards opera glasses, prism binoculars, etc., very few are made here to *peak of. There were a few prism binoculars made in Cleveland and some in Roch- ester, but practically the only prism binoculars now made are manufactured by the Bausch & Lomb Optical Co., who uphold their prices to the same level as the imported equivalent, the Carl Zeiss prism binocular, after which they are modeled. Should the tariff on these be reduced to 25 per cent, and consequently the selling price of the imported ones be lowered, the price for the few made here in America will also be consequently lowered, but will still leave a handsome profit to the manufacturers. Field glasses and opera glasses are not made in this country at all. Neither are telescopes except a few special ones made, for instance, by the John A. Brashear Co., 900 TARIFF HEARINGS. PARAGRAPH 108 LENSES, CAMERAS, ETC. Pittsburgh, Pa., and even these people import most of the optical parts from abroad, chiefly doing the mounting here. Photographic lenses (also optical instruments) could also stand a reduction in tariff duty, as the majority of photographic lenses are imported notwithstanding the high present duty of 45 per cent, and in spite of some domestic manufacturers having combined with certain foreign firms as to scientific data, thus showing that the domes- tic manufacturers, even with a reduction of the tariff, could easily meet foreign com- petition. Finally, I want to say a word as to the duty-free clause, and that is this: That all those laboratories engaged in scientific research work should be entitled to duty-free importation of high-class scientific instruments only, not in everything they need, as the domestic manufacturer has to be protected as well. It is incongruous to think, for instance, that the State department of health of say, Oklahoma or Arizona, with its small needs should be entitled to duty-free importation, whereas such a large department as the health department of the city of New York, with its many research laboratories, is required to pay duty on everything they import. Mind you, I do not believe in having everything imported free of duty, but the laws should be more equalized, that whatever importations, like, for instance, the research laboratories of New York City, Philadelphia, Washington, etc., do need scientific instruments not made in this country, they should be entitled to duty-free entry of same. A like tolerance should be shown toward laboratories of large hospitals. It is incongruous to think, for instance, that a hospital spending thousands of dollars per year for laboratory research and buying, for instance, say, microscopes worth $200 each, should be required to pay duty on the instrument, whereas a little country "University", so called, may get its single $20 microscope in free of duty. It is self-evident that a hospital with a research laboratory is doing more to advance science than this little country university, and nowadays, at the least in all larger cities, the men working in hospital laboratories are all connected with the staff of scientific institutions, if not a part of the faculty thereof. I could name you, for instance, numerous instances of such close affiliation and cooperation in New York City alone, not to speak of other cities. If there is any other information you desire to obtain in regard to optical and scien- tific instruments, I shall be pleased to give you same as I feel myself particularly fit to do so through my very long experience in that line, which is also highly regarded here by the general appraisers, for whom I have, at a number of times, appeared as qualifying witness. I do hope that this letter may help toward reduction and equalization of tariff duty for revenue only, which I strongly believe in and work for. Respectfully, yours, MAX MEYER. PROVIDENCE, R. I., January 4, 191S. The WAYS AND MEANS COMMITTEE, House of Representatives, Washington, D . C. DEAR SIR: In regard to the metal schedule which we understand comes up on the 10th of this month, we would like to file the following brief as to why we feel the duty on optical goods should remain where it is. (1) We find the average wages paid in Rath enow, Germany, for labor on optical goods is as follows: Girl apprentices, $1 to 2 per week for first three years, and $3 to $4 after three years. For men, SI. 25 to $2.50 for first four years, and an average wage of $(-> thereafter. The lowest wage? paid by us for girls is $7.50 and for men $9 per week. (2) We feel that it will be for the best interests of the country to have a tariff equal to the difference in waaes paid in this country and abroad, otherwise we will be unable to keep up the high standard of quality which has been maintained heretofore. (3) Under the present tariff we have been able to set a standard which up to the present time has not been approached by our foreign competitors, although they are making vast strides by sending men into this country to work at the bench and buy American machinery, so we feel it is only a question of time before they will be on the same plane. (4) Furthermore, owing to fair competition in this country the manufacturer's price has been trending steadily downward, although the consumer pays the same price he did 10 years ago. Hence he would not benefit by a lower tariff, as he would only be paying the same price for an inferior article which we would be forced to manufacture to meet foreign competition. SCHEDULE B. 901 PARAGRAPH 109 STAINED WINDOW GLASS. We might add that the retailers' gross profit of 300 or 400 per cent is not exorbitant, as an oculist or optician has been obliged to spend years of preparation for his work, which can be likened to that of any other profession. An oculist or optician who makes more than a fair living is the exception. Finally, it will be readily understood from the foregoing that a lower tariff will mean a poorer American product, less than a living wage to the employee of this industry, and no benefit to the ultimate consumer. Yours, very respectfully, MARTIN-COPELAND Co., L. C. MARTIN. MOVING-PICTURE CAMERAS. NEW YORK, July 1, 191t. Hon. W. E. TUTTLE, Jr., ' Stoneleigh Park, Westfield, N. J. DEAR SIR: As a member of vour congressional district and one who voted for you at the last election, we would like to call your attention to the duty on moving-picture cameras. I am interested in a firm importing moving-picture cameras, on which there is a duty of 45 per cent, grossly unfair both to ourselves and the many moving-picture men and others who are using moving-picture cameras. There are no makers of the same in the United States worthy of mention, their cameras being inferior in make, and their numbers, I think, one or two. We see no need of protection, as it is impossi- ble for American firms to duplicate in any wa> foreign moving-picture cameras. We hope we may count on you to use your best efforts to have this unjust duty taken off. Hoping we may hear of your success in this matter, we remain, Yours, very truly, R. M. MOORE. PARAGRAPH 109. Stained or painted glass windows, or parts thereof, and all mirrors, not exceeding in size one hundred and forty-four square inches, with or without frames or cases, and all glass or manufactures of glass or paste or of which glass or paste is the component material of chief value, not specially provided for in this section, forty-five per centum ad valorem. See Joseph Auerbach, page 835. STAINED WINDOW GLASS. STATEMENT OF T. M. LANE, ON BEHALF OF MAYER & CO., STAINED WINDOW GLASS. The CHAIEMAN. On what paragraph do you speak, Mr. Lane ? Mr. LANE. Paragraph 109, stained-glass windows. I appear in behalf of certain importers of stained-glass windows, and just at this point I would like to correct a misstatement that I see indorsed on our brief, apparently through inadvertence, that we appear for importers of stained window glass and stained-glass windows. We do not appear for importers of stained window glass, using that term as implying glass in sheets, in bulk quantities. The only thing we ask your committee to deal with, so far as our applica- tion is concerned, is the item of stained-glass windows. As to those, we ask for a reduction in the present rate of duty of 45 per cent, and we ask you to restore to the free list the provision for stained-glass windows imported for presentation to churches. Our case is stated in our brief, and I will take but a very few minutes to call the committee's attention to the salient points only. We are asking you to conform the provisions of the new act to the immemorial policy of Congress, an exception to which has existed under the McKinley Act and the Dingley tariff and the tariff of 1909, with respect to stained-glass windows. 902 TARIFF HEARINGS. PARAGRAPH 109 STAINED WINDOW GLASS. Prior to the McKinley tariff these windows were admitted free under the provision for paintings imported for churches. When the McKinley tariff was enacted certain manufacturers of stained glass windows appeared before this committee and urgently represented that the industry of manufacturing stained glass windows was then in its inf ancy in this country and needed protection. The result was the passage of a law which contained a specific provision for stained glass windows the first, I think, that had appeared in the tariff up to that tim& at a duty of 45 per cent, and for a specific exclusion inserted in the free list excluding stained-glass windows from the provision statuary and works of art imported for presentation to churches. The result of that is that since the McKinley tariff of 1890 up to the present time this industry in this country has had the benefit of a protective duty of 45 percent, and churches have been unable to import these windows as they formerly were, free of duty, with the exception of the brief interim under the Wilson tariff, when they were again given free entry, and the duty was reduced to 35 cents. In other words, in 20 years out of 23 this industry has had an absolute protective rate of 45 per cent. The industry is not one that is controlled by a trust, so far as I can find out, either here or abroad. Stained glass windows are the products of a few manufacturers scattered around through Germany, Austria, Great Britain more in the nature of ateliers than factories. The business itself is essentially an artistic business, the production of a more or less high art in that country, and I think the same is true in this country. The revenue which the Government derives, of course, is not enormous, though I suppose it is substantial. I have noticed for the fiscal year ending June 30, 1911, this paragraph, which covers glass windows, stained or painted, and mirrors, not exceeding 144 square inches in size, brought a duty of $161,000. The mirrors are robably substantial. There is no separation of these two items, he total from glass windows, stained or painted, and mirrors was $161,000. The result probably is that a very much smaller quan- tity is sold in this country under a rate of 45 per cent than would be under a rate of 25 or even 35 per cent. The proposal that we make to you for a reduction in rate to 25 per cent would mean practicality that churches and perhaps 9 out of 10 of these windows are bought by churches Mr. HARRISON (interposing). Is it not now the custom of Congress to pass bills refunding to churches the duties that they have paid for stained-glass windows? Mr. LAXE. If there have been such bills passed, they must have been very few in number in comparison with the number of churches that buy this glass, for practicaUy all of it is sold to churches. Mr. PP:TERS. The only bill that was passed was in a case where a contract was made to purchase the glass brought under a ruling of the Treasury Department that it would come in free, or the local collector that it would come in free, and later such ruling was reversed and the duty collected. Mr. JAMES. That, was the reason that the bill was passed. Mr. LAXE. It does not seem to me that this is essentially a proper subject for treatment by a protective duty anyway. There are a few high-class studios in this country, like the Tiffany studios and Lamb studios, who appeared before the committee at the last hearing under SCHEDULE B. 903 PARAGRAPH 109 STAINED WINDOW GLASS. the tariff of 1909 and asked for a high rate of duty on this article, and yet I suppose that any one of the artists connected with those concerns and they have some high-class artists connected with them would resent the imputation that the American artist needed a protective duty to continue his business. The request made at the last tariff hearing was a very modest one. I very briefly would like to call the committee's attention to the only concrete illustration of the cost of manufacturing these articles abroad as against the cost hi this country that was given at the last hearing. It is found on pages 1232 to 1235 of tariff hearings of 1909, which I have open before me, and it was there attempted to show that the factory cost of making abroad a window containing 165 feet of glass was about $120, selling price about $216, and the modest request was made that a specific rate of $2 per square foot and 20 per cent be substituted for the then existing rate, and a very simple arithmetical process will show that that rate on a window containing 165 square feet of glass valued at $216 would be $259, or about 120 per cent. I am glad to say that the committee refused to raise the rate, which the highest of the protective tariffs had contained, and con- tinued it at 45 per cent. This industry survived the rate of 35 per cent, and the provision for free entry for windows imported for churches which existed under the Wilson tariff, and it is a very thriving, very strong industry in this country to-day. It is an industry which does and should stand on its merits or its ability to make glass that has a high artistic character, and it should not ask any protection, As it is, if you will reduce this duty, continue a duty and reduce it, the churches that import windows directly for purposes of construct- ing new buildings will pay that duty without question. If you restore to the free list the provision for the free entry of glass presented to churches you will merely restore the provision of the tariff as of 1894 and the practice as it existed prior to the act of 1883, and vou will, we think, conform the law to the long-established policy of Congress, which has been to exempt not only stained-glass windows but all works of art of all descriptions, of regalia, gems, statuary, specimens of sculpture when imported by churches or imported for presentation to churches. A great many windows brought into this country, as you natu- rally will infer, are memorial windows and are very beautiful works of art, and it seems almost irreverent to tax the feelings that inspire the donors to give such beautiful works of art to churches. The American manufacturers have not apparently been heard on this question as yet, and I do not know wnat figures they will lay before you, but I want to ask for just a moment your consideration of the figures they submitted at the last tariff hearing. The window that they showed as typical they said could be made in Munich for 3 marks per square foot. We have produced before you and printed in this brief an affidavit of Simbert Sallinger, a certified ac- countant, who went over the books of Mayer & Co., the largest stained glass window manufacturers in Germany, and their factory shows for a year's output the average factory cost of at least 8.5 marks; nearly 8.58 marks per square foot; nearly three times what the American 904 TABIFF HEABINGS. PABAGRAPH 109 STAINED WINDOW GLASS. manufacturer asserted the German cost to be. It was further asserted that that window could be sold in Germany for 5.5 marks per square foot. Under the present rule of appraising this glass at the foreign market value, the New York customhouse is to-day passing it at an average of, I. think it is safe to say, nearly 20 marks per square foot, certainly over 15 marks. The scale is a sliding one, depending on the number of figures in the window. For one figure it is 18 marks per square foot; two figures, it is 20 marks per square foot; three figures, it is 22 marks per square foot; and four figures, it is 23 marks per square foot. The very lowest value stated in this schedule of appraised values at present in force is 8 marks per square foot for plain ornament. And these are the duties on which I believe every importer of German stained glass is paying duties at the New York customhouse at the present tune. And notwithstanding that, we find the American manufacturer coming before your committee at the last tariff hearing and asserting that a window of that kind could be sold for 5.5 marks per square foot in Germany. That is all of your time that I will take. I would like permission to file this brief, and if the committee will allow it, the petitions from various churches and ecclesiastical authorities. The CHAIRMAN. They may be filed. Mr. LANE. Is there any objection to my later presenting some pe- titions that may come to me here ? The CHAIRMAN. You may present them to the committee when you receive them. The following petition was filed at a later date: The COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. SIRS: The undersigned res] e t fully urges upon your committee and Congress that the duty on stained glass windows shall be reduced to 25 per cent and that pro- vision be made in the free list of the new tariff act for the free entry of stained glass windows, statuary, and casts of sculpture imported for the use of churches and other societies of a religious or educational nature. Respectfully, yours, E. F. Prendergast, Archbishop of Philadelphia; P. J. Riordan, Arch- bishop of San Francisco; Charles H. Culton, Bishop of Buffalo, N. Y.; James J. Keane, Archbishop of Dubuque; D. J. O'Connell, Bishop of Richmond; Joseph Schremtz, Bishop of Toledo; Regis Canenin Bishop of Pittsburgh; Henry Gabriels, Bishop of Ogde'^sburg; James II. Blenk. Archbishop of New Orleans; George Albert C uertin, Bishop of Manchester; John E. Fitzmaurice, Bishop of Erie: Henry Joseph Richter, Bishop of Grand Rapids; John S. Foley, Bishop of Detroit; Camillas P. Maes, Bishop of Covington; Henry Moeller, Archbishop of Cincinnati: Francis Silas Chatarcl, Bishop of Indianapolis; Herman J. Alerding. Bishop of Fort Wayne; Thomas Sebastian Nyrne, Bishop of Nashville: Henry P. Northrop, Bishop of Charleston, S. C.; John Janssen, Bishop of Belleville; E. A. Gauey, Bishop of Altoona; James Cardinal Gibbons, of Baltimore. SCHEDULE B. 905 PARAGRAPH 109 STAINED WINDOW GLASS. OBJECTIONS TO CHANGES IN WORDING OF PARAGRAPH 716, AS IT RELATES TO THE IMPORTATION OP STAINED-GLASS WINDOWS. 'Presented by Frederick E. Mayer, 138 W. Pomona Street, Philadelphia, Pa.] The COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. GENTLEMEN: The undersigned respectfully suggests that the word "except," preceding the phrase "stained or painted window glass, or stained or painted glass windows, " as found in paragraph 716, be retained, and that the entire sentence relating to stained glass windows be incorporated in its present form in the new tariff act now under consideration by your honorable body. My reasons for urging this action upon your committee, are as follows: (1) While it is impossible to make accurate statement, a fair approximation shows that of the stained glass windows sold to American churches about 85 per cent are windows of foreign manufacture. (2) If the foregoing statement be true, then the present duty of 45 per cent ad va- lorem is scarcely adequate to protect the American artist. (3) No American manufacturer of leaded and stained glass depends exclusively upon his ability to sell his stained glass church windows in competition with the product of the foreign maker of stained glass. As a matter of fact a considerable pro- portion of our business is composed of opalescent and ornamental glass such as is used in private dwellings, business buildings, and public buildings. Foreign manufacturers can not readily compete with us in this class of work, because the rapidity of American building construction prevents the prompt delivery of for- eign goods; and, second, because of the architects' specifications, which usually require inspection of the commodity during the course of manufacture. The advan- tage, therefore, accruing to the American manufacture of commercial stained glass is peculiarly local in character and is not directly the result of tariff legislation. Stained-glass windows for churches, however, are usually ordered six months or even a year in advance of their installation. These long-time contracts, therefore, enable the foreign makers of stained-glass windows to use their cheaper-paid labor to the dis- advantage of the American maker of stained-glass windows, thus enabling the foreigner to control the sales of about 85 per cent of the stained-glass windows in America. The production of the ecclesiastical stained-glass windows by American makers should therefore be directly encouraged by the imposition of an ad valorem duty of about 50 per cent. (4) The making of ecclesiastical stained-glass windows represents the higher devel- opment of the glass painters' art. Our best results are almost invariably attained in the making of the stained-glass windows for churches. Placing upon the free list stained glass- windows designed for churches would rob the American maker of stained- glass windows of his opportunity to sell his admittedly skilled labor upon a fair competitive basis. His only hope under free importation would be in finding a prospective donor with sufficient patriotism to give preference to the American maker, irrespective of the selling price of the window. Or his other alternative would be to find a prospective purchaser who would place an order with him for purely personal reasons. (5) In the brief filed by Mayer & Co. with your committee, I find the following state- ment: "The present tariff has imposed a severe and burdensome tax upon churches, and upon those whose religious inclinations have prompted them to make gifts of the beautiful devotional works of art to churches." This statement, gentlemen, is not true. Stained glass church windows are seldom paid for out of the funds of church corporations. They are, in nearly every instance, the gift of wealthy individual donors, who either make their provisional donation to the church or who buy direct from the maker. It would, therefore, be no hardship upon the church corporation were the churches obliged to pay the present duty or a higher duty of, say, 50 per cent ad valorem. (6) In the brief filed by Mayer & Co., I find the following statement: "We respect- fully submit that the stained glass industry is no longer in its infancy." The American artist cheerfully admits this assertion . Figuratively speaking, we are no longer infants. We are boys who have just put on their long trousers. We are young and hopeful and enthusiastic, but we are weak in comparison with the corporation of Mayer & Co., of Munich. This corporation has a highly developed factory svstem in Germany, and has firmly established agencies who sell to Central America, Mexico, South America, Australia, Africa, and continental Europe. 906 TAEIFP HEARINGS. PABAGBAPH 109 STAINED WINDOW GLASS. We respectfully ask that your committee do not place a club in the hands of this corporation that would give it an overpowering advantage. (7) Included in the brief of Mayer & Co. are two apparently distinct propositions: First, that the duty on stained or painted glass windows, or parts thereof, as found in paragraph 109, be reduced from 45 to 25 per cent ad valorem. The second propo- sition is that the word "including" be substituted for "except," preceding the phrase "stained or painted window glass, or stained or painted glass windows," as found in paragraph 716. Right here, permit me to show you the colored gentleman in the woodpile. Your committee is asked to change paragraph 716, so as to give the privilege of free entry to stained-glass windows intended for church use. If you grant this privilege, para- graph 109, imposing an ad valorem duty, would be of noneffect, because your appraiser would undoubtedly be confronted with this statement: "My dear sir, these stained- gkss windows are a donation to a certain church, and under paragraph 716 they can not be subject to the imposition of any tax whatever." A recapitulation of my state- ment shows that of the total number of stained-glass windows sold to American churches for church use, about 85 per cent are made by foreign manufacturers, and that virtu- ally all stained-glass windows sold for church use are primarily presented to the churches as donations. The American maker of stained-glass windows is therefore confronted with the proposition that he makes stained-glass windows for church use under absolutely free-trade conditions. (8) To place stained glass upon the free list would deprive the Government of an annual revenue of about $120,000. The last report given by the Bureau of Foreign and Domestic Commerce is as follows: Imports of glass windows, value, $266,408; a duty at 45 per cent ad valorem, $119,883. If you place stained-glass windows, intended for church use, upon the free list, you give up about $120,000 annually, at the same time presenting to the importer and foreign manufacturers additional profits by reason of the increased volume of business that would accrue to them. Respectfully submitted. FREDERICK E. MAYER. IMPORTERS OF STAINED WINDOW GLASS AND STAINED-GLASS WINDOWS. Curie, Smith & Maxwell, attorneys for importers of stained window glass and stained glass windows, 32 Broadway, New York City. Thomas M. Lane, of counsel. To the Committee on Ways and Means, House of Representatives, Washington, D. C. GENTLEMEX: We beg to submit the following brief in behalf of the importers of stained glass windows, who ask for a reduction of duty on said windows, or for their free entry when imported for churches. Prior to the enactment of the McKinley tariff of 1890, stained glass windows portray- ing biblical and relisrious subjects were admitted free of duty when imported for presentation to religious societies. (Par. 819, tariff act of 1883; 146 U. S., 71, 73.) The McKinley tariff of 1S90 (par. 122) made specific provision for stained glass windows and stained window glass at a duty of 45 per cent and expressly excluded such stained glass and stained glass windows from the provision exempting paintings imported for presentation to churches (par. 757) . This action was taken upon the urgent plea of manufacturing interests that the stained glass window industry was then an infant industry in this country and entitled to protection. A decision of the United States Supieme Coin I upon a test case taken up under this tariff held that, in view of the exclusion of stained glass windows from free entry under paragraph 757, such exception must be considered implied in the other paragraphs relating to impor- tations for churches. (U. S. r Perry, 146 U. S., 71.) This decision definitely fixed the duty on all stained glass windows, for whatever purpose imported, at 45 per cent, and gave the domestic interests the fullest measure of protection. From 1890 to the present day this rate has been continued except for a brief interval of three years under the Wilson tariff of 1894, when the rate on stained glass windows w;>s reduced to 35 per cent (pnr. 1021, and the provision admitting such windows to free entry when imported for presentation to churches was restored to the free list ('par. 686). The Dinyley I a riff of 1897 reenacted the provisions of the act of 1890, and the Payne-Aldrich tariff of 1909 continued them. Since this protect ion was given it. the stained glass window industry in this country has grown and llonrishod and H now an established business. This is evidenced by SCHEDULE B. 907 PARAGRAPH 109 STAINED WINDOW GLASS. the number of houses doing business in this line, some of them important and prosper- ous. A glance at the published hearings on this subject under the various tariffs is sufficient evidence of this. Nevertheless, when this question came up at the preliminary hearing on the Payne- Aldrich act of 1909, the American manufactiuers, notwithstanding the growth of their industry under a protective duty of 45 per cent ad valorem, which they had enjoyed for practically 18 years, and which had not been seriously unpaired by an interval of three years, during which competitive conditions with European manufacturers were restored, petitioned Congress for even greater protection than they had hitherto en- joyed . We anticipate that a similar effort will be made before your committee and will briefly discuss some of the representations male to the Ways and Means Committee of the Sixty-first Congress, upon the assumption that they may be renewed here. The application of the Von Gerichten Art Glass Co., of Columbus, Ohio, found in Tariff Hearings, 1908-9, Schedule B, pages 1232-1235, offers a fair example of the extravagant demand for protection made by the domestic manufacturers. This com- pany asked that a specific rate of $2 per square foot and 20 per cent ad valorem be substituted for the existing rate of 45 per cent ad valorem, and represents that this difference in rate reflects the difference in the cost of manufacture of the same window hi Europe and in the United States. They use for purposes of illustration a window containing 165 square feet of glass, which they say can be sold in Europe for $216. The duty on 165 square feet of glass, at $2 per square foot, is $330, and the duty at 20 per cent ad valorem on the foreign value of $216 is $43.20. The total duty proposed was therefore $259.20 on a window sold abroad for $216; a duty equivalent to 120 per cent ad valorem. This rate was nearly three times as high as had ever been placed upon stained-glass windows by the most radical of the protective tariffs. An industry demanding such a rate of protection would evidently be of the "hothouse" variety, and its existence in this country could only be assured by taxing the consumer to an extent entirely out of proportion to the importance of maintaining such an anemic industry. But there is abundant evidence that the industry of manufacturing stained-glass windows in this country is not of such a character and needs no such measure of protection. It has grown strong under a duty of 45 per cent ad valorem, and was apparently not seriously injured by the rate of 35 per cent and the privilege of free entry for windows imported for churches, which prevailed under the tariff act of 1894. It is incredible that your committee would seriously entertain a proposal to increase the present high rate of protection. To do so would be to raise an effective tariff bar against some of the most artistic glass in the world, which is available to our churches and to those who seek to beautify them by gifts of memorial and other windows. Such legislation would also wipe out the substantial revenue derived from the duties on stained-glass windows and would place our churches and the donors of many splendid works of art at the mercy of the domestic manufacturer, whose way to exorbitant profits would be made easy. We respectfully submit that there is nothing in the policy of our tariff legislation which requires that the cause of religion should be made to suffer to enrich a few manufacturers. Upon the contrary, we urgently insist that the present duty on stained-glass windows should be reduced. It has been the policy of Congress, recognized in many tariff acts, to favor the cause of religion by allowing free importation of articles intended to be used for religious purposes. The striking out of all provisions for free entry of stained-glass windows imported for presentation to churches under the tariff acts of 1890, 1897, and 1909 was a pronounced and radical exception to the general policy of Congress. The present tariff has imposed a severe and burdensome tax upon churches and upon those whose religious inclinations have prompted them to make gifts of beautiful devotional works of art to churches. The domestic manufacturers have had 23 years in which to put their industry on its feet. They have not only succeeded in putting it on its feet, but have made it a very strong and thriving industry. They are more than holding their own against foreign competition and ought to be disposed to make concessions after such a liberal treat- ment over so long a period of time. We respectfully submit that the industry is no longer in its infancy and that the tune has come when it is entirely proper that Congress should withdraw from it some of the protection it has been enjoying. This would be in accord with the soundest economic principles, held even by those who advocate the protective policy. We ask your committee to accept with caution figures that may be given by domestic manufacturers for labor in various countries in Europe. Hitherto these figures have 908 TARIFF HEARINGS. PARAGRAPH 1O9 STAINED WINDOW GLASS. been accompanied by no statement as to the authority on which they are given, and we are satisfied that they have been far from correct. We submit that hearsay evidence on this question of wages or cost of production should not be received. It should always be borne in mind, in connection with these statements as to lower wages paid to European workmen, that the American manufacturer requires and obtains from his workmen nearly twice as much work in a given number of hours as can be obtained from corresponding workmen in a European establishment. That the figures given by the American manufacturers are unreliable can be shown by the example already cited by them from the last tariff hearing (ante, p. 3). It was asserted that a window containing 165 square feet would have a factory cost in Ger- many of $120.50 and could be sold for export in Germany at $216. Expressed in German currency, this is a factory cost of approximately 3 marks per square foot and a selling price of 5J marks per square foot. The actual facts are very different. The books of Mayer & Co., of Munich, the largest manufacturers of stained-glass windows in Germany, show an average factory cost upon a year's business, including "Regie," or administration expenses, of 8.58 marks per square foot for all glass made, or 10.72 marks per square foot after adding 25 per cent profit to arrive at a fair selling price. The authority for these figures is the affidavit of a sworn accountant who examined the books of this company, printed as an appendix to this brief. The original of this affidavit is at the disposal of your committee if it desires it. The schedule of values now being used for the purpose of appraising this glass at the port of New York, which can be verified by the appraiser at that port, is as follows: "One single figure, 18 marks per square foot. "Group of two figures, 20 marks per square foot. "Group of three figures, 22 marks per square foot. "Group of four figures and over, 23 marks per square foot. "Landscape, 12 marks per square foot. "Ornament, 8 marks per square foot. "Busts, 14 marks per square foot." While the above values adopted by the appraising officers as the foreign market value of this glass are believed to be much too high, in view of the actual conditions shown by the books of Mayer & Co.. they serve to emphasize the absurdity of the claims made by the American manufacturer, who asserts that this glass can be turned out in Germany for 3 marks per square foot and sold for 5J marks per square foot, and makes his claim for protection accordingly. Recurring to the window of 165 square feet chosen as an example, the American manufacturer tells us that its factory cost in this country would be $257. (Tariff Hear- ings, 1908-9, pp. 1233 to 1234.) This is equivalent to 6. 55 marks per square foot. Com- pare these figures with Mayer & Co. 's average factory cost of 8.58 marks per square foot. Where do we find any basis for the plea that the American manufacturer needs a pro- tective duty of 45 per cent to compensate for the difference between the cost of }>ro- iucing his window and that of the German manufacturer? Hitherto the American manufacturers applying for protection have failed to furnish any figures as to the increase of their business since 1890, or the amount of their profits, or, if they are incorporated, the dividends they pay on their stock, or the relation their stock issue bears to the actual amount of money invested in the business, etc. In short, as to all the facts peculiarly within their own knowledge, they have been reticent to the last degree, whereas as to those of which they can have no actual knowl- edge they have been exceedingly ready to talk. It should be borne in mind that the competition between foreign and domestic .stained glass, which is the subject of the present dispute, exists only as to stained glass windows imported for churches, etc. As to the opalescent and ornamental glass, such as is used in private houses, public buildings, etc., the domestic manufacturer now enjoys a monopoly, and the foreign houses have not attempted and do not now seek to compete with him. For the foregoing reasons we respectfully urge the following changes in the existing law as found in paragraphs 109 and 716 of the tariff act of 1909: (1) That the duty on stained or painted glass windows, or parts thereof, as found in paragraph 109, be reduced from 45 to 25 per cent ad valorem. (2) That the word "including" be substituted for the word "except," preceding flie phrase, "sluined or painted window glass or stained or painted glass windows," as found in paragraph 710, thus restoring the privilege of free entry to church windows SCHEDULE B- 909 PARAGRAPH 109 STAINED WINDOW GLASS. as it stood under the Wilson tariff of 1894, and as it was accorded prior to the tariff act of 1890. Dated, New York, January 6, 1913. CURIE, SMITH & MAXWELL, Attorneys for Importers of Stained Window Glass and Stained Glass Windows, No. 32 Broadway, New York City. THOMAS M. LANE, Of Counsel. APPENDIX. (Translation.! Register No. 673. To-day, the 27th day of February, 1912, appeared before me, Justizrat Karl Lens, royal notary at Munich XII, in my office, Mr. Simbert Sallinger, known to me per- sonally as sworn auditor and competent judge in matters of bookkeeping, residing at 12/IV Barerstrasse, Munich, and declared his intention to make an affidavit. I, notary, thereupon called expressly Mr. Sallinger 's attention to the legal impor- tance of an affidavit and the criminal consequences in case he knowingly or carelessly made a false statement on affidavit. Thereupon Mr. Sallinger declared with his request of having his statement recorded the following: Requested by the firm Mayer 'sche Kgl. Hofkunstanstalt in Munich to calculate upon the entries in their books the market value of one square foot of their production in stained glass, I undertook the task in the offices of the said firm between February 21 and February 24, 1912. Before examining the books I inspected attentively the studios of the firm already well known to me, and after examining the properly kept books basing my calcula- tions upon the business year from March 1, 1910. to February 28, 1911 as the last year balanced have arrived at the following results and affirm: That in the period mentioned the production of stained glass amounted to 34,800 square feet, that the cost of production per square foot was 8.586 marks, to which amount added 25 per cent for profit, 2.147 marks: follows that the market value per square foot is 10.733 marks. In detail the books show the following itema Marks. For making cartoons 39, 767. 10 For material: Marks. (a) Glass ." 18,074.03 (&) Colors 3, 570. 55 (c) Lead and zinc 5, 379. 57 (d) Various 717. 17 27,741.32 67, 508. 42 For wages, etc 199, 105. 95 For working expenses 11, 741. 27 For Regie 20, 453. 65 231, 300. 87 298, 809. 29 8.586 2.147 Total per square foot - 10. 733 The above-mentioned figures have been arrived at with the utmost exactness and will correspond in the average with the cost of production of other producers of stained glass in Munich. What the firm pays more in higher wages they really save, as, owing to their widespread circle of customers and large output, the cartoons, the production of which requires great outlay, can be used over and over again. Thus, this item amounts to only 1.13 marks per square foot, although the firm employs prominent artists. I state hereby particularly that the market value as figured above is based upon the total production of stained glass by the firm in the year 1910-11, and that the mar- ket value for the stained glass supplied to the New York house would figure out 910 TARIFF HEARINGS. PARAGRAPH 109 STAINED WINDOW GLASS. much less, as for these supplies the advantages of a wholesale production are most apparent. Now, referring to the custom of the firm to charge to the New York house higher prices than calculated above and declared in the legalized invoices for custom pur- poses as market value, the reason for this lies in the inner conditions, to wit: In the annual balance the profit for the New York house is figured separately, as the manager of that branch draws a share of the so-established profit. As the mother house in Munich takes a certain amount of the profit beforehand, on which the New York house gets no share, the New York house has to accept the goods at a higher amount. This is, therefore, as already mentioned, a purely internal and book "technical matter, and the making out of invoices to that effect could just as well have been omitted and the matter arranged at the annual balance. For the custom declaration, the above figured market value only is material and correct. I confirm by affidavit the correctness and completeness of my statement given above. This present document, of which a copy has not been retained, is to be handed over to the Mayer'sche Kgl. Hofkunstanstalt against payment of costs. Read out by the notary, acknowledged by the interested parties, and signed m. p. [SEAL.] SIMBERT SALLINGER, Justizrat Lem, Royal Notary. UNITED STATES OF AMERICA, State, City, and County of New York, ss: I. the undersigned notary public in and for the county of New York, familiar with the English as well as with the German language, do hereby certify that I have com- pared the foregoing translation with the German original attached hereto, and found that it is a correct translation of the German original. New York, March 19, 1912. [SEAL.] ROB. SCHWARTZ, Notary Public, 104, for New York County. MEMORIAL OF ORNAMENTAL GLASS MANUFACTURERS' ASSO- CIATION. Hon. OSCAR W. UNDERWOOD, Chairman Committee on Ways and Means. House of Representat ires. Washington. D. C. On behalf of the National Ornamental Glass Manufacturers' Association, composed 01020x10 1 - 28 Variegated.... <*.JI>, ^.U x I.U. 22 Florence } [ .20 Isle La Motte 28 Blue 28 Dots 0.5 square and under, each 08 Crating tile, per superficial foot : 03 All other sizes at special prices. Diagonal half and quarter tile will be charged as whole square tile. For tile 1} inches thick, add 30 per cent to above prices. Special prices on all tile ordered of uniform thickness. Cornered tile of regular sizes for dots not larger than 0.3; extra for each corner cut, I0.01J. Cornered tile of regular sizes for dots larger than 0.3 and not larger than 0.6, extra for each corner cut, $0.03. Border. Ordinary widths, 0.6 or over, if ordered with tile, same price as tile. Border, ordinary widths, 0.6 or over, if ordered without tile, 20 per cent higher than tile 1.0 square. Border under 0.6 in width will be charged as 0.6 wide. Crating border, if ordered without tile, per superficial foot, |0.05. 920 TAEIFF HEARINGS. PARAGRAPHS 111-112 MARBLE. TERMS. Two per cent discount for cash within 30 days from date of invoice, or payment in full after 60 days from date of invoice. A discount of 5 per cent will be given on carload lots of sawed marble of 30,000 pounds or more in one order. Special and net prices are not subject to carload discount. All claims for errors in measurements or for unsoundness must be made within 20 days from receipt of marble, and no charge for work on defective marble will be allowed. All marble will be carefully loaded on the cars free of charge and shipped the day the bill is dated, which is a delivery to the purchaser. The railroad company's re- ceipt shall be sufficient evidence of such delivery. Unless otherwise directed all marble will be shipped by the cheapest route, "owner's risk released," and subject to the official freight classification. MARBLE INDUSTRY EMPLOYERS' ASSOCIATION, New York, January 16, 191S. To the COMMITTEE ON WAYS AND MEANS, Washington, D. C. GENTLEMEN: The manufacturing members of the Marble Industry Employers' Association of New York City desire to supplement their brief filed at a hearing before your committee on January 8, 1913, as follows: First. We believe the request of the importers for the maintaining of a duty on rough marble (in blocks, rough or squared) makes for control and monopoly, and also to make it as troublesome as possible for manufacturers to import direct, and to dis- courage anyone from entering the importing business because of the greater capital required where duty is to be paid than if there were no duty. Second. We indorse, excepting as to the recommendations for the maintenance of any duty on marble blocks, all the statements made under the heading of "Marble," in a memorial presented by the Italian Chamber of Commerce before your committee and printed in the hearing under date of January 9, 1913. (Print 4, page 741.) Third. We beg to file the following additional signatures received from those engaged in the manufacture of marble for interior use, approving the recommendations in our petition of January 8, 1913, entitled Tariff on Marble: Peoria Stone & Marble Works, Peoria, 111.; N. 0. Nelson Marble Co., Edwardsville, 111.; The Puffer Manu- facturing Co., Boston, Mass.; Jacoby & Sons Co., Philadelphia, Pa.; S. Klaber & Co., New York, N. Y.; Voska-Bremer Marble Co., Kansas City, Mo.; Allen & Haworth, Cleveland, Ohio; The Liquid Carbonic Co., Chicago, 111.; Standard Marble Works, Cincinnati, Ohio; American Soda Fountain Co., Boston, Mass.; Flavin Marble Mill, Chicago, 111.; Davis Marble Co., Philadelphia, Pa.; The Bowker Torrey Co., Boston, Mass.; Feeney & DeVanny Co., New York, N. Y.; The Eckhardt Monumental Co., Toledo, Ohio; The Johnson Marble Co., Boston, Mass.; H. Marquardt Marble & Granite Co., St. Louis, Mo.; John M. Gessler's Sons, Philadelphia, Pa.; Northwestern Marble & Tile Co., Minneapolis, Minn.; The Buckeye Marble Co., Cincinnati, Ohio. Trusting this communication will receive favorable consideration, I beg to remain, Respectfully, WM. K. FERTIG, Secretary. STATEMENT OF JOHN S. SEWALL, REPRESENTING THE ALABAMA MARBLE CO. Mr. SEWALL. Mr. Chairman and gentlemen, I represent the Ala- bama Marble Co. as its general manager. I am authorized also to speak for other American producers whose names are signed to a brief statement, which we have submitted to the committee in printed form. In this statement we have set forth facts which we believe justify the maintenance of the present tariff on marble in all of its forms, regardless of the point of view from which we consider it. We desire further to state the following facts: The total investment of the companies whose names are signed to the printed statement is not less than 825,000,000. The develop- ment of a marble deposit to a point of profitable production is the SCHEDULE B. 921 PARAGRAPHS 111-112 MARBLE. work of almost a lifetime and calls for the expenditure of enormous sums of money. Very few of the American producing companies are yet on a dividend basis, and it is safe to say that, taken as a whole, their annual net earnings do not average as much as 6 per cent on the actual investment. In making that estimate the interest on capital is not reckoned as an item of cost. Most of them are still putting every cent they earn over actual cash operating cost into the maintenance and development of their properties, and the dividend period is not yet in sight. Marble for interior use is a luxury and not a necessity. Consid- ered as a building material for interior use, marble is not fireproof. Whenever exposed to a severe fire it has invariably shown a total loss. From a purely sanitary point of view it possesses no real ad- vantages over competing and cheaper materials. Its only advantage lies in its richer texture and more pleasing appearance. This fact becomes painfully apparent when we endeavor to sell the less hand- some grades at which might be termed marble prices in competition with slate ceramic tiles, hard plaster, metal door and window trim, and certain of the ordinary limestones which are sometimes used for interior work. Interior marble enters not at all into the cost of ordinary living and is but a small factor in the cost of high living. The American quarries can easily produce enough marble suitable for interior use to supply the country's needs. But, even when of as good quality and just as handsome as the imported marbles, it is of such a different appearance that architects and owners often insist upon the imported marble in order to secure certain definite archi- tectural effects. The matter is often a matter of taste, pure and simple, and, within rather wide limits, is not a question of cost. Tne average cost to the purchaser of imported marble, as finished and set in place in the building, is not less than $12 per cubic foot. The tariff of 65 cents per cubic foot would not make much difference to the purchaser, even if he benefited by its removal, which he prob- ably would not. The imported marbles have a large market in this country, based mostly on differences of taste and partly upon a prejudice hi favor of imported materials, which the American producers have so far not been able to capture in whole or in part, and this fact is not at all due to any lack of good American marble. The existence of the tariff has enabled American producers to secure prices for a small part of their product not more than 10 per cent of the whole that are comparable with those at which imported marbles are sold. This has compensated, in some measure, for the very low prices at which most of their product must be sold, if sold at all. We are fully convinced that if the tariff on blocks is removed or seriously lowered, the only result will be a reduction in the revenues of the Government and an appreciable loss to the American pro- ducers. Were it otherwise, the American producers would long ago have driven the imported marbles out of this country. In our attempts to supplant them, we often cut the price by more than the amount of the tariff, but without result. From 1910 to 1911 the average price of marble blocks imported into this country increased by about 36 cents per cubic foot; 1911, 922 TABIFF HEARINGS. PARAGRAPHS 111-112 MARBLE. however, was rather a dull year in the interior marble business. The decrease in the quantity of imported marble used in 1911 as compared with that used in 1910 was about 20 per cent, accompanied with an increase in the price of marble of 36 cents per cubic foot. The corresponding decrease in the use of domestic marble for inte- rior purposes during the same period was nearly 23 per cent, so that the use of domestic marble diminished more than the use of imported marble, notwithstanding the increase in the price of imported marble and with practically no change in the price of domestic marble. We do not believe that the manufacturers using mainly imported blocks and having no quarries of their own, are at any serious disadvantage as compared with the American producers. About 25 per cent of the manufacturing capacity of the country not connected with any quarries is located in Greater New York. As a matter of fact, the labor conditions in Greater New York are such that business there is not attractive to the American producer, and it is a fact that American producers do not ship one penny's worth of finished marble into Greater New York at the present time. Therefore, in the matter of finished material, the New York manu- facturers in their own city, which is the greatest interior marble market in the world, have absolutely no competition from the American producer. We simply request that the members of the committee, if they can possibly find time, will read the brief which we have submitted, and beyond that I have nothing further to say. The CHAIRMAN. We will give consideration to your suggestions. TARIFF ON MARBLE. To the honorable Committee on Ways and Means, House of Representatives, Washington, D. C. GENTLEMEN: The signers of this memorial represent at least 95 per cent of the business of American marble producers who produce marble suitable for interior work. We respectfully request that the tariff on marble be maintained at its present value. Our primary reason for making this request is that we believe the maintenance of the present tariff is essential to the reasonable success of our business. Practically all of the marble imported into this country is used for interior work; the question, therefore, lies between all of the imported marble on one hand and that portion of the domestic marble produced in this country which is used for interior work. Interior marble is not a necessity of life; it is not used by people of moderate and lim- ited means; it is used only by corporations and people of considerable wealth: we, there- fore, submit that it is a proper article upon which to levy a tariff for the purposes of revenue. We believe that the present tariff on marble will yield more revenue than any lower tariff; it is even probable that an increase in revenue would result from some increase in the tariff, but as the present tariff has been used for a number of years and we have our business adjusted on that basis, we confine our request to the maintenance of the present tariff just as it is. The reports of (he Treasury Department show that for the eight fiscal years from 1905 to 1912. inclusive, there were imported into this country in the form of blocks alone, and neglecting all other marble products, a total of 4,859,362 cubic feet, an average yearly importation of 607,420 cubic feet. From the report of the Geological Survey on the production and consumption of stone in the United States it appears that during the eight calendar years from 1904 to 1911, inclusive, of domestic marble produced in this country a total of 3.890.106 cubic feet were used for interior work; this is a yearly average of 486.263 cubic feet, as compared with a yearly average for the imporlc-d marble of 607,420 cubic feet. SCHEDULE B. 923 PABAGBAPHS 111-112 MABBLE. The present tariff on marble blocks is $0.65 per cubic foot. The average yearly revenue for the years from 1905 to 1912 on the marble blocks imported during that period was, therefore, $394,823. If the tariff were reduced to 50 per cent of its present value and imported marble substituted for all of the domestic marble used for interior work, the yearly revenue would amount to $355,446.98. The annual reduction from the revenue actually collected would be $39,376.02. In the classification of domestic marble by the Geological Survey is an item of ' ' rough blocks sold to manufacturers." It is probable that a portion of this marble finds ita way into interior work; we have no means of getting at the exact amount, but we do know from our knowledge of our own business that it is a relatively small percentage of the whole. The omission of this marble from the table submitted herewith is more than offset by the following facts: Even among the domestic marbles used for interior work there is a large percentage which is of relatively low grade. It is sold at a price with which imported marble could not compete, even if there were no tariff; it is sold at this low price because the people to whom it is sold would not use marble at all if they had to pay the price at which the imported marble would have to be sold even if it were admitted duty free. For these reasons we believe that our estimate of the reduction in revenue that would result from a reduction in the tariff on imported marble is too small rather than too large. The tariff on imported marble does not amount to more than 6 or 7 per cent of the value of the marble set in place in the building. In those cases where owners and architects want the imported marble we believe they would still use it even if the tariff were somewhat higher. The existence of the tariff enables the American pro- ducers to sell then- better grades of marble at a price which compensates for the lower prices thay have to accept for their lower grades. AYe are fully convinced that con- siderable variation might be made from the present tariff in either direction without any material effect on the amount of imported marble used; on the other hand, a material reduction in the tariff would seriously diminish the amount of domestic marble used. The total consumption of interior marble is necessarily limited; it depends entirely upon the activity in the building trades and is confined to buildings of the more expensive class. There is submitted herewith a table showing the importation of foreign marble blocks for the eight years above mentioned, also a table showing the consumption of domestic marble for interior purposes for the calendar y^ars from 1904 to 1911. By comparing these yearly figures with the dates of financial stringency it will be readily seen that the consumption of both classes of marble for interior work is directly dependent upon the state of trade. The figures yield no reason whatever for supposing that the present tariff has had any deterrent effect upon the use of im- ported marble. Since about the year 1880 there has been a steady increase in the price of Italian blocks, due to concerted action of the Italian producers and exporters. About 1880 Italian blocks of low grade could be purchased in New Yor"k for about $1.80 per cubic feet; similar blocks now bring not less than $2.80 per cubic foot. Dur- ing the intervening time the tariff has varied somewhat. Notwithstanding the tariff and the increased price of Italian blocks, the consumption of imported marble has increased with the increase in expensive buildings and has varied directly with the number of such buildings under contract at any time. The table indicates that the use of imported marble in this country is in excess of the use of domestic marble for interior work. It should be noted that the use of interior marble falls off a little after the severest stress of a panic is passed and does not increase for some time after better conditions have come about. This is due to the fact, in the first place, that contracts made during prosperous times have to be completed, and, in the second place, that new contract" are not entered into for some time after prosperity begins. Most of the marble imported into this country comes from the Carrara district in Italy; its export from that district is controlled by a relatively small number of firms, who undoubtedly act together in the matter of controlling the price. Marble exported from Italy is also subjected to an export tax; of this fact the signers of this memorial are sure, but we are not in possession of the exact amount of the tax. There is abso- lutely no combination with a view to regulation of prices among American producers; competition between them is absolutely free and extraordinarily keen. There is no understanding as to the control of prices between American producers and American manufacturers. The competition between them is also entirely free and very keen. Natural conditions make it imperative for the American producers to finish a consid- erable portion of their own products; the material from which much of this finished work is made is subject to so much waste that it would not stand the cost of transporta- tion to other points in the rough block. The fact that the American producers do a large amount of finished work is a source of differences between them and the manu- 924 TABIFF HEARINGS. P ABAGBAPHS 1 1 1-1 12 MABBLE. facturers, and the necessity they are under of working up the material is practically a permanent guaranty that competition will always be keen. As marble producers with a considerable amount of capital invested in American industries and employing American labor, we feel that we are entitled to some protec- tion against the imported material; we are taking the liberty of submitting herewith a memorial which was submitted to this committee some years ago. We content our- selves, in this instance, with simply submitting this former memorial, with the statement that all of its arguments are just as applicable to-day as they were when the memorial was originally submitted. Alabama Marble Co., Alabama; George B. Sickles Marble Co., Georgia; Eoyal Marble Co., Tennessee; T. S. Godfrey Marble Co., Tennessee; Gray Eagle Marble Co., Tennessee; Tennessee Producers Marble Co., Tennessee; John M. Ross, Tennessee; Knoxville Marble Co., Tennes- see; Empire Marble Co., Tennessee; Meadow Marble Co., Tennessee; Boss & Republic Marble Co., Tennessee; Vermont Marble Co., Ver- mont and Alaska; Georgia Marble Co., Georgia; Blue Ridge Marble Co., Georgia; Asbury Marble Co., Tennessee; Evans Marble Co., Ten- nessee; John J. Craig Co., Tennessee; Knox Marble & Railway Co., Tennessee; Victoria Maible Co., Tennessee; Fenton Construction Co., Tennessee; Appalachian Marble Co., Tennessee; Cumberland Marble Mill Co., Tennessee; Colorado- Yule Marble Co., Colorado; Barney Mar- ble Co., Vermont; Grant Marble Co., Milwaukee, Wis.; Pickel Marble & Granite Co., St. Loui, Mo.; St. Louis Marble & Tile Co., St. Louis, Mo.; Drake Marble & Tile Co., St. Paul, Minn.; Joseph Musto-Sons- Keenan Co., San Francisco, Cal. Comparison of amounts of marble (in cubic feet) imported into the United States and amounts reported as used for interior work by American producers. Fiscal year. Imported. Calendar year. Domestic marble used for interior work. 1905 657, 099 1904... 359, 418 1906 S20, 040 1905 480, 757 1907 707, 598 1906 492, 127 1908 . ... 625, 159 1907 543, 129 1909 . 665, S27 1908 555,357 1910 726, 326 1909 445,081 1911 637,224 1910 571, 899 1912 619, 488 1911 442,338 Yearly average *, 859, 301 607, 420 Yearly average 3,890,106 486, 263 TARIFF ON MARBLE. To the honorable the Committee on Ways and Means, House of Representatives. The presenters of this memorial represent more than 90 per cent of the business of the American marble producers, the foreign marble importers, the marble mills, and marble manufactories of the United States. By the tariff act of March 3, 1883, the rates of duty on all classes of marble were materially reduced. The act of October 1, 1890, made no change. The act of August 27, 1894, somewhat reduced these rates; but the act of July 24, 1897, restored the rates of 1883, with only a slight change in the classification of the unimportant items of slabs and mosaics. Eighty per cent of all the marble imported into the United States comes from Italy. Any comparison, therefore, of the relative methods and conditions of producing marble at home and abroad is necessarily with Italy. The first process in the production of marble is the quarrying of blocks. The con- ditions of quarrying in this country and in Italy are very diverse. The deposits in the United States are often deep below the surface of the ground, and in all cases it is necessary to actually cut the blocks out of the quarry by machinery or tools to avoid shattering the marble. In Italy, the deposits are exposed on the surface of the moun- SCHEDULE B. 925 PARAGRAPHS 111-112 MARBLE. tain, and the blocks are simply blasted off and afterwards pointed or ecabbled into regular shapes. The second process is the sawing of these blocks into slabs the full size of the block, or into smaller pieces, sawed to size, for parts of monuments, or other specific purposes. The full-size slabs are finally coped, or broken into slabs of smaller dimensions. The third process is the finishing of sawed marble by rubbing, cutting, carving, turning, polishing, etc., for its final use. For the six years ending June 30, 1908, 69 per cent in value of all marble imported into the United States was in blocks, 6 per cent in slabs, 22 per cent in manufactures of marble, and 3 per cent in mosaic cubes. Almost the entire importations of onyx are in blocks. FOREIGN MARBLE IS A PROPER COMMODITY UPON WHICH TO RAISE REVENUE. People of moderate means use little marble except for cemetery purposes. For that they use a large amount; but they now use, and they will continue to use, Ameri- can marble almost exclusively, because it is better for outdoor use, and that mainly used in cemeteries is cheaper than any foreign marble would be, even if admitted free of duty. Foreign marbles imported into the United States are either colored marbles or expensive grades of lignt marble. They are a luxury and their use de- pends more upon conditions of general prosperity than upon variations of cost. For example, under the business depression beginning in 1893 the total importation of marble fell from $1,135,176.23 for the year ending June 30, 1893, to $711,289.80 for the year ending June 30, 1894; and under the business depression beginning in No- vember, 1907, the total importation fell from $1,536,156 for the year ending June 30, 1907, to $1,159,543 for the year ending June 30, 1908. THE DUTY ON FOREIGN MARBLE TENDS TO REDUCE THE PRICE OP THE MEDIUM AND CHEAPER GRADES OF MARBLE. The production of Italian marble is confined to a Email territory about Carrara, and its export price to this country is controlled by a few Italian firms. In so far as the duty on marble is not, in effect, paid by them, it operates to tax the wealthier consumer who buys expensive ornamental marble, while the buyer of grades of marble in com- mon use by the people at large gets them at a lower price by reason of the tariff. The finer grades of American marble are so mixed with the cheaper grades in the same quarries that they must be worked together. The more of the finer there is pro- duced the more of the cheaper grades there must be, and the lower their price. The marble in ordinary use for cemetery purposes and much of that used for building purposes could not be produced by itself alone for the price at which it is sold. It is the production from the same quarries of the higher grades of ornamental marbles competing with foreign marbles that admits of the production of much of the cheaper marble. Of the total output of sawed marble for the last five years of the largest American producer, whose quarries produce the highest-priced marble in this country, (1) 45 per cent was sold for less than $1 per cubic foot, (2) 15 per cent for $1 to $2 per cubic foot, (3) 34 per cent for $2 to $3 per cubic foot, (4) 6 per cent for $3 and over per cubic foot. None of the first and second divisions and only a part of the third and fourth are in competition with Italian marble. Considerable of the third division is sold below the price of Italian marble and considerable of the fourth above it. A PROTECTIVE DUTY ON MARBLE IS NECESSARY. Any advantage to American quarries from machinery is more than offset. The Italian quarries have certain natural advantages over the quarries of the United States. In the first place almost their entire product is high-priced marble, and hence the cost of quarrying it is a much less percentage of its selling price than in the case of American marble. The character of the Italian deposits, as hereinbefore explained, more than offset any advantages accruing to American quarries from the use of machinery. Machinery is used in our quarries from necessity and it is not used in the Italian quarries, by the larger producers at least, because the present method is cheaper. The American quarries derive no protection from freight. To the principal distribut- ing points in the United States the freight will average as much as from Italy. For example, the present rates per cubic foot are approximately: To New York from Italv by steamer 36 cents, from Vermont 25 cents, and from Tennessee 65 cents; to Baltimore from Italy by steamer 38 cents, from Vermont 37 cents, and from Tennessee 926 TARIFF HEARINGS. PARAGRAPHS 111-112 MARBLE. 59 cents; to New Orleans from Italy by steamer 40 cents, from Vermont 74 cents, and from Tennessee 35 cents; to San Francisco from Italy by steamer 90 cents, from Vermont $1.33 by steamer or $1.80 all rail, and from Tennessee $1.80. The comparison from the Georgia and Alabama quarries would be quite as favorable to the Italian quarries, and from the Colorado and Alaska quarries still more so. Our quarries, therefore, even in our own market have no natural protection against those of Italy. Blocks are not rait) material, but represent almost entirely labor. The raw material in the mountains in Italy is of relatively small value, but the cost of the blocks is chiefly the labor required to quarry them and move them to the seaboard. In this country also an undeveloped quarry is of little value. The prevailing royalty paid a land- owner for the right to quarry marble on his land is only 5 cents per cubic foot of mer- chantable marble produced. Two-thirds of the expense of producing marble in this country is for labor direct, and about one-fourth for supplies and material, including machinery, iron, tools, coal, etc. It is estimated that 90 per cent of the expense of the production of marble is directly or indirectly for labor. The competition between Italian and American marble, therefore, is peculiarly a competition between Italian and American labor. THE PRESENT RATES OP DUTY ON MARBLE OUGHT NOT TO BE REDUCED. The duty on marble yields a revenue on an article which is a luxury. It tends to decrease the cost of the cheaper grades of marble which are used by the people at large. It is the protection afforded the high-priced marble that has made possible the pro- duction and use in the United States of great quantities of medium and cheaper grades of marble for cemetery purposes, buildings, etc. Such use of marble is entirely peculiar to our own country. It affords protection direct to American labor, not by lessening the importation but by upholding the prices of high-priced, colored marbles and expensive grades of light marbles. It tends also to further develop the remarkable marble deposits of this country. Marble is abundant in all the States along the Appalachian range, from the Gulf of Mexico to the Canada line, viz: Alabama, Georgia, Tennessee, North Carolina, Virginia, Maryland, Pennsylvania, New York, Con- necticut, Massachusetts, and Vermont. It is also found in Missouri, Colorado, Idaho, Texas, New Mexico, Arizona, Utah, California, Washington, and Alaska. The ornamental or colored marbles found in Tennessee, Georgia, Vermont, Missouri, Arizona, and many other sections of the country are of the highest artistic order. The development of new marble quarries in Alabama, Colorado, and Alaska is at present very active. But the obstacles to be overcome in developing these natural resources can not be appreciated except by experience. The difference in the cost of labor employed in the production, sawing, and manu- facture of American and foreign marbles is much greater than the present rates of duty on marble, and those rates are not sufficient to equalize, in our own markets, the position of the marble quarries, mills, and shops of the United States with like indus- tries abroad. We recognize, however, that the present rates have prevailed since 1883, except for the short period between 1894 and 1897, and that business and trade relations have long been adjusted to those rates. Therefore the undersigned, representing more than 90 per cent of the American marble producing and foreign marble importing interests of the United States, and of its marble mills and manufactories, ask that the present rates of duty on marble be left as they are. We call your attention to two instances of wrong classification which work great in- justice to marble and ought to be corrected. Limestones susceptible of polish and usable for decorative purposes. -Under the present tariff (par. 117) limestone unmanufactured is dutiable at 12 cents per cubic foot less than one-fifth the marble rate. Under this paragraph the right is claimed to import Istrian, Hauteville, Botticino, and other fancy stones, which are sold and used in direct competition with regular high-grade marbles. The commercial and ordinary or popular meaning of marble is either any limestone which is capable of taking a polish or else any limestone which is suitable for being used for decorative or ornamental purposes. (See Century Dictionary, New American Encyclopedia, New International Encyclopedia.) Accordingly the Board of General Appraisers have held that Istrian (Decision 3803) and Hauteville (Decision 6398) should under the present tariff be classed as marbles and pay the marble rate. The decision in the latter case was affirmed by the United States Circtiit Court, but on appeal was reversed by the United States Court of Appeals, which followed the more technical and limited definition that only that limestone is marble which is of a crystalline structure. The SCHEDULE B. 927 PARAGRAPHS 111-112 MARBLE. whole subject of the proper classification of these stones under the present tariff now remains much confused and is still in litigation. Without reference to what may be their proper classification under the wording of the present tariff, they should in the new act be classed according to the purposes for which they are capable of being used, and in fact are used (in conformity with the similitude clause of the present tariff act, sec. 7), and on an equality with the stone with which they directly compete. They are capable both of being polished and of being used for interior decorative purposes of a high order, and in fact are so used in many important build- ings in direct competition with regular marbles, both American and foreign. We therefore respectfully request that limestones, when susceptible of taking a polish and suitable for interior decorative purposes, be specifically classed with marble and take the marble rate. Limestone of low grade used as a building stone and not for higher decorative purposes should continue to be classed with freestone, sandstone, and other building stone. Breccia. Under the present tariff (paragraph 508) breccia is admitted free. It is a conglomerate marble susceptible of taking a polish and used in direct competition with regular marble for interior decorative purposes in many public and other large buildings. In the statistics of the Department of Commerce and Labor, "Importations entered for consumption, ' ' breccia is now included in the statistics of marble, being classed as free marble as distinguished from other marbles which are dutiable. We respectfully request that it be specifically included with marble and take the marble rate. Another great advantage of the Italian quarries lies in the following facts: The unsound and worthless material can be separated from the good and rejected immediately after the marble is blown down from the quarry faces. At this stage the rejected material can not have cost more than 5 cents per cubic foot. In the American quarries the marble has to be taken out a block at a time. The blocks which prove worthless and have to be rejected on the bank of the quarry, represent an actual cost of not less than 40 cents per cubic foot. The rejection of worthless material does not end here, however. There are still many blocks which contain good and bad in the same block and they can only be separated after sawing. Everything rejected at this stage represents a cost on the average of not less than $1 per cubic foot. All of the material rejected in both Italy and America is a burden of added cost that has to be borne by the good material. It is evident that on this point the Italian quarries have a much less burdensome load to carry than the American quarries. Respectfully submitted. Vermont Marble Co., Vermont; Rutland-Florence Marble Co., Vermont; Brandon Italian Marble Co., Vermont; Barney Marble Co., Vermont; Norcross-West Marble Co., Vermont; O. W. Norcross, Vermont; George P. Eastman, Vermont; South Dover Marble Co., New York; Waverly Marble Co., New York; White Marble & Terrazzo Co., Massachusetts; Westfield Marble & Sandstone Co., Massachusetts; Lee Marble Works, Massachusetts; Evans Marble Co., Maryland; Georgia Marble Co., Georgia; Geo. B. Sickles Marble Co., Georgia; Blue Ridge Marble Co., Georgia; Georgia Marble Finishing Works, Georgia; Southern Marble Co., Georgia; Kennesaw Marble Co., Georgia; John M. Ross, Tennes- see; The Knoxville Marble Co., Tennessee; Gray Eagle Marble Co., Tennessee; Jno. J. Craig Co., Tennessee; Empire Marble Co., Tennes- see; Godfrey Marble Co., Tennessee; Ross Marble Co., Tennessee; Republic Marble Co., Tennessee; American Marble Co., Tennessee; The United States Marble Co., Tennessee; The Victoria Marble Co., Tennessee; Tennessee Producers' Marble Co., Tennessee; Knox Mar- ble & Railway Co., Tennessee; Alabama Marble Co., Alabama; Colo- rado-Yule Marble Co., Colorado. John Eisele, of Batterson & Eisele; W. K. Fertig, of R. C. Fisher & Co.; J. W. Harrison, of Ellin, Kitson & Co.; E. J. McGratty, of McGratty & Sons; John R. Taber, of Taber & Co.; C. D. Jackson, of C. D. Jackson & Co.; R. C. Fisher, of R. C. Fisher & Co.; Committee of the Marble Industry of New York. W. H. Evans, of Baltimore. President and Committee of the National Association of Marble Dealers. WASHINGTON, D. C., November 23, 1908. 928 TARIFF HEARINGS. PARAGRAPHS 111-112 MARBLE. STATEMENT OF MR. JACKSON, REPRESENTING C. D. JACKSON & CO., OF NEW YORK. PARAGRAPHS 111 AND 114. The CHAIRMAN. Mr. Jackson, will you please state the paragraph to which you wish to refer ? Mr. JACKSON. Paragraphs 111 and 114, marble. WASHINGTON, D. C., January 9, 191S. The COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C.: Since 1908 a number of changes have taken place in the cost of production of marble and stone in rough blocks (and consequently in rough sawed slabs) in all the quarrying districts abroad through higher wages, pension funds, road taxes, transportation, etc., which necessitated the increase in selling prices abroad and consequently in the United States. The adherence to a disproportionately high duty of 65 cents per cubic foot (un- changed since the tariff act of 1897) on rough blocks of marble hindered the importa- tion of foreign marbles necessary in the construction and ornamentation of buildings. The cost prices of the different foreign marbles vary in accordance with the facilities with which the material can be quarried, the location of the quarries, the distance to be covered by railroad transportation between the quarries, and the port at which marble is embarked for the United States. In the following tabulation we wish to show the present approximate average costs of marble in rough blocks, average sized, large and small blocks mixed, as produced by quarries, loaded on cars at railroad station nearest to the quarry. Duty. Category 1. Present average cost of poushable hard limestone, 85 cents per cubic foot ._ $0. 65 Category 2. Present average cost of ordinary marble, $1.30 per cubic foot 65 Category 3. Present average cost of veined type, $2 per cubic foot 65 Category 4. Present average cost of veined statuary type, $2.40 per cubic foot . . .65 Category 5. Low-priced colored marble, $1.50 per cubic foot 65 Category 6. Medium-priced colored marble, $3.50 per cubic foot 65 Category 7. High-priced colored marble, $7 per cubic foot 65 Based upon the foregoing average cost prices (being the wholesale selling prices to dealers abroad) Per cent. The duty on category 1 amounts to 76J The duty on category 2 amounts to 50 The duty on category 3 amounts to 32J The duty on categoiy 4 amounts to 27 The duty on category 5 amounts to 40 The duty on category t> amounts to 18 The duty on category 7 amounts to 9 The importation into the United States of the different categories can be classified by percentage as Per cent. On categoiy 1, about 30 On category 2, about 45 On category 3, about 5 On category 4, about ] On category 5, about 15 On category 6, about 3 On category 7. about 1 From this it will bo seen that the present duty of 65 cents per cubic foot means an average duty of about 53.97 per cent on a crude article such as marble in blocks, rough or squared only, at point of loading from quarries abroad. A further detrimental feature enforced since January, 1913, will tend to reduce still more the importation of foreign marble. SCHEDULE B. 929 PARAGRAPHS 111-112 MARBLE. The steamship pool, regulating the steamer freight rates from abroad, has imposed a new hardship on all imported marble. The freight rates have been increased from 20 to 35 per cent, which necessitated an increase in the selling prices here of from 10 to 15 cents per cubic foot. Another very serious and appreciable increase is now imposed by the lighterage and hoisting companies operating in the port of New York, who increased their minimum charges for transportation to consignors of marble by nearly 30 per cent, which will increase the cost, namely, the delivery of materials to mills, by additional 5 cents per cubic foot. This increase went into effect on January 1, 1913. It will tend to decrease more the demand for foreign marble, since a long time unable to compete with domestic products which are not subjected to these exorbitant charges. We therefore respectfully recommend to the Ways and Means Committee to reduce the present tariff act of 1909, reading as follows: "Marble and onyx blocks, rough or squared only, 65 cents per cubic foot," to 45 cents per cubic foot, and if so considered, the tariff should read: "Marble and onyx in blocks, rough or squared only, 45 cents per cubic foot." While the amount of this reduction may not seem large enough to your honorable committee, it is our belief that it would be suffi- cient to overcome the existing hardship, at least, imported marble could be sold in future at the same prices as it was sold up to January 1, 1913, and it will prevent a further decrease in importation, which would further reduce the revenues to the Government. We wish to state the tariff act of 1894, paragraph 103, provided a tariff on marble of all kinds in block, rough or squared only, of 50 cents per cubic foot. The following facts should also be taken into consideration, i. e., that none of the different species of marble imported into this coun- try exist in the United States and consequently can not be produced here, so no harm to domestic quarry owners can result by the im- portation of marbles from abroad at a lower tariff than the existing one. The Government report shows that the importation of foreign marble into the United States is as follows: Cubic quantity. Import value. Duties. 1907. . . 707598-0 $1 083 188 $459 939 11 1908 525159-0 796, 873 341,353.91 1909 565827-0 877 413 367 789 98 1910 726326-0 1,116,058 472,112.30 1911 637224-0 1 042 285 414 195 76 1912 619488-0 979,310 402,667.29 It shows the falling off of importations of foreign marble in rough blocks considerably. Comparing the year 1907 with the years 1908 and 1909, it shows a decrease of im- portation of 314,210-0 cubic feet, and a decrease of duties collected by the Government of $210,774.33. During the year 1910 a large demand for building material existed generally and domestic quarries not being able to supply the demand, in consequence the impor- tation of foreign marble increased during that year. However, the comparison between the years 1910, 1911, and 1912 shows that the importation of marble in rough blocks during the years 1911 and 1912 decreased by 195,940-0 cubic feet, and the Government collected during 1911, $58,016.54 less duty than during 1910 and during 1912, $69,545.01 less than in 1910, or a total decrease of $127,561.55. Marble slabs. Only Carrara marble slabs are imported to this country, as they are the only material that can stand the strain of transportation without great damage, namely, breakage. 78939 VOL 113 59 930 TAKIFF HEAKINGS. PABAGBAPHS 111-112 MABBLE. The average prices for average-sized slabs of average grade, free on cars Carrara, are: Cost price (square foot). Duty (square foot). Equal to Category 1: Up to 1 inch to thickness (mostly J Inch are imported) Cents. 12 Cents. 8 Percent. 66.6 Category 2: Up to 1} inches to thickness 1." .*. '. 17 10 58.5 Category 3: Up to 1J inches in thickness 22 10 45.5 Category 4: Up to 2 niches in thickness 27 12 44.4 ^ The proportion of each of these categories imported, based upon the entire importa- tion of sawed slabs in this country, is as follows: Per cent. Category 1, up to 1 inch 65 Category 2, up to 1} inches 30 Category 3, up to 1$ inches 3 Category 4, up to 2 inches 2 which means an average duty of 63.3 per cent on the value of the slabs, being the wholesale selling price to dealers abroad. As we respectfully recommended a reduction on rough blocks from 65 cents to 45 cents, being about 30 per cent reduction, the duty on slabs should be reduced in the same proportion, i. e.: Present duty. Proposed duty. On slabs up to 1 inch Cents. 8 Cents. 6 On slabs up to li inches 10 71 On slabs up to 2 inches 12 9 The tariff act of 1894 provided approximately the same duty on slabs as proposed herewith and if our recommendation should find due consideration, the new tariff act should read: "Marble and onyx sawed or dressed if not more than 1 inch thickness, 6 cents per superficial foot. If more than 1 inch and not more than 1 inches in thickness, 7$ cents per superficial foot. If more than 1 inches and not more than 2 inches in thick- ness, 9 cents per superficial foot." Imported slabs are largely used by marble manufacturers who dp not buy blocks and have same sawed in the custom sawmills. These custom sawmills are disappear- ing rapidly in this country, as all the larger marble manufacturers are equipped with their own sawing plants as part of their manufacturing equipment solely for their own use. This proposed duty will stimulate the demand and importation of foreign slabs, which has fallen off lately to a very insignificant amount, while under the tariff act of 1894, paragraph 104, reading as follows: "Marble sawed, dressed, or otherwise, including marble slabs, mosaic cubes, and marble paving tiles, 85 cents per cubic foot (no slab to be computed at less than 1 inch in thickness)." The importation of slabs amounted to thousands of tons per year. Tiles. The present duty, according to tariff act of 1909, on imported marble tiles, classified in the tariff as specified under paragraph 111, provides that the duty on "Slabs or paving tiles of marble or onyx containing not less than 4 superficial inches, if not more than 1 inch in thickness, 8 cents per superficial foot. If more than 1 inch and not more than 1 inches in thickness, 10 cents per superficial foot. If more than 1 inches and not more than 2 inches in thickness, 12J cents per superficial foot. If rubbed in whole or in part, 2 cents per superficial foot in addition." This duty is entirely out of proportion to the value of the goods in themselves. SCHEDULE B. 931 PARAGRAPHS 111-112 MARBLE. Marble tiles are made from slabs, either unfit for shipirtent as such on account of defects, such as cracks, etc., or from pieces of marble slabs broken or damaged while being taken out of the saw frames, or broken in yards of sawmill. Tiles vary in sizes from about 1 to 6 square feet, according to the demand and sizes of floors to be covered, according to specifications of architects. Such small sound stock can be usually found in such salvage to make these tiles. Tiles are used either in thicknesses of three-fourths inch or seven-eighths inch. The present prices abroad are about 16 cents per square foot, finished and ooxed, free on ci- -s at the mills of the quarry. The present duty on marble tiles up to 1 inch in thickness is 10 cents, equal to 62$ per cent. You will readily see the inconsistency of such high tariff on an article representing hardly any outlay of labor or any value of material, if you compare it with the present duty on richly finished carved and polished marblework which pays only an ad valorem of 50 per cent. For comparison, we name herewith prices on domestic tiles sold by quarries in the United States: Vermont or Alabama, or Lee white tiles, seven-eighths inch, from 15 to 20 centa per square foot. Tennessee tiles, 20 cents per square foot. All of same are manufactured from salvage by domestic quarry owners and sawmills in the same manner as by the foreign producers. The total duty on rubbed and finished tiles to 1 inch in thickness should not be higher than 6 cents per square foot, and on tiles up to 1$ inches in thickness, 8 cents per square foot. The present duty is so prohibitive that tiles can not be imported, being unable to compete on account of this high duty with the domestic tile. Under the present tariff, the Government assessed a duty without receiving any revenue from an article which could be imported to this country in large quantities, provided a rate of duty consistent with the actual value of the article were assessed. Mosaic. The present duty on mosaics is one-fourth of 1 cent per pound and 20 per cent ad valorem. Marble mosaic, with the exception of Tennessee marble, which is cut from the smallest waste occurring in marble mills in Tennessee, is not produced in this country, and the demand for Tennessee marble mosaic is only a very limited one, hardly more than 1 per cent of the entire amount of mosaic used in this country. Marble mosaic is cut from such small debris in small cubes of one-half inch, five- eighths inch, and three-fourths inch square. The importation of marble mosaics is diminishing from year to year on account of the competition of ceramic tile. While ceramic floors are undoubtedly very good sanitary floors, they lack many decorative and other qualities. Good, sanitary mosaic floors, but more practical and decorative, not alone in color but also in designs, etc., can only be produced from marble mosaics, in which the different variety of shades and colors well blended produce the artistic effects. While the duty on mosaic has been reduced under the present tariff act 1909 from that assessed under act 1897, viz, from 1 cent per pound and 20 per cent ad valorem to one-fourth of 1 cent per pound and 20 per cent ad valorem, we would respectfully submit the abolition of the 20 per cent ad valorem duty, for the following reasons: The United States custom authorities ignore completely the contracts made on the other side in accordance with which the material is actually purchased. The value of invoices to buyers of small quantities who purchase their stock from second and third hand, are adopted as established market values, and in order to avoid annoyances, importers have to accept an arbitrary valuation fixed by the United States appraisers, and on this the 20 per cent ad valorem duty is paid. We offer the following suggestion as a remedy: The specific duty on this article, viz, one-fourth of 1 cent per pound, should remain and the additional 20 per cent ad valorem duty should be dropped. This would give less expenses to the Government for research and other work and render more revenue to the Government on account of the increased importation which would undoubtedly follow, if importers and dealers are freed from these petty and useless annoyances caused by the ad valorem appraisement. 932 TARIFF HEARINGS. PABAGBAPHS 111-112 MABBLE. For comparison, we wish to name the following figures: Foreign wholesale market Present Per cent value duty. (about). (per 224 pounds). Mosaic cubes of Carrara mosaic $2.33 $1.03 44 No>r V\n ,,.,,...,,, 2 82 .12 40 Ste. Anne 2 82 .12 40 Rouge Beige 2 oo 12 40 Rouge Chagny 3.08 .18 38 Rouge Cuit 3.64 .29 36 Jaime de Lyon. ... 3.20 20 374 Blanc de Nimes 3.50 .26 36 The above figures give the wholesale market value per 224 pounds, free on board Genoa, Leghorn, Antwerp, or Marseille. In this price the packing and railroad freight are included. The railroad freight is about 32 cents per 224 pounds. It gives the amount of the United States duty paid per 224 pounds and also the percentage in pro- portion to the value of the respective merchandise. Should, however, the specific duty of one-fourth of 1 cent not be sufficient, we rec- ommend a total specific duty of one-third of 1 cent to overcome the difference of the 20 per cent ad valorem duty. The new tariff act should therefore read: "Mosaic cubes of marble or onyx not exceeding 2 cubic inches in size, if loose, one- fourth of 1 cent per pound (or one-third of 1 cent per pound). If attached to paper or other material, 5 cents per superficial foot and 35 per cent ad valorem." Terrazzo and granito. The present duty of 20 per cent ad valorem is inconsistent with the nature of the material. The article in itself is nothing but the waste d6bris of quarries and sawmills, broken slabs, chips, etc., which can not be used for anything else, not even for road making. In order to clean up the accumulating de'bris, mostly in factories, they are ground up into granular particles, and these particles are packed in bags and shipped to this country. The same customhouse conditions and regulations exist with regard to this article as mentioned above on mosaics. A specific duty of 60 cents per gross ton should be assessed, which covers the present ad valorem duty. The material in itself has absolutely no value; the mills and quarries abroad are only charging for the actual labor required in grinding up this de'bris. The price for this granito at Carrara is 16 lire per gross ton, equal to about $3. 10 The present freight rate from Carrara to New York is about 6. 00 Duty on same 62 Which brings the net cost price per ton (ex steamship New York) 9. 72 Additional handling, lighterage and freight expenses in the port of New York will bring the net cost to importers to about $11 per ton. Domestic quarries and marble manufacturers are making this terrazzo or granito in the same manner also, to clear their quarries and workshops of de'bris. The white granito or terrazzo produced in Vermont, Alabama, Georgia, or Massa- chusetts factories is sold at 85.50 per net ton f. o. b. cars respective quarries. The high cost of transportation, freight, etc., on the imported article, already forms an ample protection to domestic producers. Carrara granito is an essential necessity for the top layers of terrazzo floors as the granito made of domestic marble is too soft, it wears out quickly and discolors as soon as cement is applied. A very good granito is produced in Tennessee but the price for same is $8 per net ton on cars Knoxville. Tennessee granito is the only granito hard enough to be applied for floors, but on account of its peculiar color from light gray to dark brown, does not find the demand that the white granito does but it commands a higher price than any white granito or terrazzo. freestone. The present United States tariff act, 1909, paragraph 114, reads: SCHEDULE B. 933 PARAGRAPHS 111-112 MARBLE. "Freestone, granite, sandstone, limestone, and all other monumental or building stone except marble, breccia, and onyx not specially provided for in this section, hewn, dressed, or polished or otherwise manufactured, 50 per cent ad valorem. Unmanufactured or not dressed, hewn, or polished, 10 cents per cubic foot." The importation of freestone or limestone of French, Italian, and other origin coming under this classification, amounts to only about 30,000 to 40,000 cubic feet per year, a very small amount compared with the millions of cubic feet produced in this country. Freestones of light color like the French limestones, chassignelles, Caen stone, lens stone, Italian limestones, Travertine, etc., all of light delicate shade, are not in ex- istence in this country and consequently can not be produced here. The average cost of these materials at the quarry abroad, amounts to about 30 cents per cubic foot, delivered on cars quarry. To this an average railway and steamer transportation of about 90 cents per cubic foot has to be added. The high cost of transportation gives ample protection to domestic quarry owners if you consider that the limestone quarried at Bedford, Ind., is sold in New York, one of the farthest points from their quarries, at 75 cents per cubic foot. The duty of 10 cents on imported limestones is unproportionately high toward the value of the material in itself, it amounting to about 33J per cent. If the duty on this material would be reduced to 5 cents per cubic foot, it may lead to larger adoption and consumption in the United States, and this material could then be employed in larger proportions than heretofore. We propose that the tariff act should read: "Freestone, granite, sandstone, limestone, and all other monumental or building stones except marble and breccia and onyx not specially provided for in this section, hewn, dressed, or polished, or otherwise manufactured, 50 per cent ad valorem; not manufactured, dressed, hewn, polished, or otherwise manufactured, 5 cents per cubic foot. " All the above data are given after an exhaustive research, and we recommend to the honorable Ways and Means Committee all the facts and suggestions for their best consideration. Respectfully submitted. C. D. JACKSON. TABER & Co. PISANI BROS. HlLGARTNER MARBLE Co., C. L. HILGARTNER, President. EVANS MARBLE Co. E. L. ASHLEY. The CHAIRMAN. Are there any questions? Mr. HILL. I would like to ask the gentleman a question. Do you import Italian granite only? Mr. JACKSON. No; all kinds. Mr. HILL. What would be your idea of the wisdom of striking out these specific duties on marble blocks of these various kinds and making them all ad valorem or just the same as that which is partly manufactured ? Mr. JACKSON. The ad valorem duty if you had an ad valorem, it would work great harm in the importation of marble. Mr. HILL. Why in regard to marble more than anything else? Mr. JACKSON. Because there is no expert here in United States employment who can say what is first, what is second, third, or fourth quality marble. The unscrupulous shipper on the other side will send first-quality and classify it as fourth-quality marble. Mr. HILL. There are no such things as unscrupulous shippers, are there ? Mr. JACKSON. There are. Mr. HILL. Why should there be an a/1 valorem duty on a piece of marble or a piece of granite that has work on it, and a specific duty on a block of the same stone, or the same piece of stone, without any work done on it ? 934 TARIFF HEARINGS. PARAGRAPHS 111-112 MARBLE. Mr. JACKSON. That is very easy to answer. You might employ on a piece of marble, which is only a cubic foot large, several hundred dollars' worth of work, richly carved, but it measures only a cubic foot, and the marble in itself might be worth $2. Mr. HILL. Then that is the reason, is it, for these specific duties, the very high duties that are shown here, not intrinsically high, but merely because of the necessity of providing a tariff in this way ? Mr. JACKSON. No; it is impossible. The only just duty on marble in the rough should be a specific duty. Mr. HILL. Why should we throw out anything on which a specific duty could be applied ? Mr. JACKSON. Because you sell marble by measure, cubic foot measure. It is measured in the United States. It eliminates all entanglements. You can not transport a block of marble of 24 or 30 tons and shove it into a storage warehouse. It is impossible. The United States measurer comes and measures, and that ends the dispute. Mr. HILL. Why would that not be equally applicable to every other item in the tariff bill ? Let me refer you to this: Freestone, granite, sandstone, limestone, and all other monumental or building stone, except marble, breccia, and onyx, not specially provided for in this section, hewn, dressed, or polished, or otherwise manufactured, 50 per cent ad valorem; un- manufactured, or not dressed, hewn, or polished, 10 cents per cubic foot. There is no fair comparison between all these different stones, that they should be classified at 60 or 80 per cent duty. Mr. JACKSON. Yes, sir. Mr. HILL. It is specified 10 cents a cubic foot. That might mean a hundred per cent on one piece and only 20 per cent on another ? Mr. JACKSON. You are talking from the manufacturer's point of view. Mr. HELL. No; I am talking from the viewpoint of the making of the tariff. I am not talking from the viewpoint of the manufac- turer or the importer. I am simply after the best administration. Mr. JACKSON. I have been in the business 28 years. I have fol- lowed up this question thoroughly. I was not present during the tariff hearings of 1893 or 1894, but I consulted foreign producers as to which would be the safest and wisest way to get the merchandise before the public hi the United States, and they said, "Do you prefer ad valorem or do you prefer specific duties?" They all told me the ad valorem duty can not gauge the value of a piece of marble. Now, if this piece of marble should represent a block measuring, for instance, 120 cubic feet, and if it should be absolutely sound, the price would be $7 on the other side; but if this piece of marble should show a crack up to here [indicating], it is sold at once by the producer as defective and he would reduce the price to So per cubic foot. Mr. HILL. It would pay the same specific duty per foot ? Mr. JACKSON. Yes. Mr. HELL. And the duty is double in the estimates? Mr. JACKSON. No; that is not right. How can the United States appraisers, after all the annoyance we have in New York, alleviate it? Suppose the importer bought it for $5 on account of that crack, is he the judge to decide about it ? SCHEDULE B. 935 PARAGRAPHS 111-1 12 MARBLE. Mr. HILL. Is it not as possible for him to make a correct ap- praisal as for the man who sells it to make a correct price ? Mr. JACKSON. No, sir. If I could find an expert to-day to do this, I would be willing to pay him $25,000 a year if he could select marble for me on the other side. Mr. HILL. Then, in your judgment and from your experience as an importer of marble, would you say that the duties here should con- tinue to be on the specific basis? Mr. JACKSON. On the specific basis. The only basis where the United States will receive honest duties, which they collect, is the specific basis. Mr. HILL. I supposed they were all honest. Mr. JACKSON. No. Duties are unquestionably honest on specific values; otherwise not. The CHAIRMAN. Are there any further questions? Mr. RAINEY. Are you prepared to discuss the question as to how much more revenue the Goverment could get out of these various articles that you discussed a while ago ? Mr. JACKSON. Yes; I think I am. Mr. RAINEY. If the rates you suggest are put into effect. Mr. JACKSON. I think I am prepared to do so. I have given it some considerable study for years. Mr. RAINEY. How much more would we get out of it ? Mr. JACKSON. I do not think the Government would lose any- thing by it. I think you would receive about the same amount. We are in a peculiar situation. We are in the hands of the steam- ship companies, who formed an ironclad pool on the other side, and unless we accept their rates, we can not have any marble shipped. Now, the hoisting companies in New York City have advanced their hoisting charges from 50 to 90 cents a ton. The lighters in the New York Harbor everything has to be lightered to the railroads or to the yards of manuf acurers or dealers has been increased, and the increase will amount to about $30,000 a year additional cost. They have combined, and we are at their mercy. We can not do anything. The question was sprung on us on the 15th of December, and they said that that tariff would go into effect on the 1st of January. Now, we can not build hoisting gears or boats to transport these things over night. It would take us about from six to ei^ht or nine months to build such boats to transport it. The importations would remain the same. Domestic quarry owners usually follow the prices set for the imported article. Mr. RAINEY. Do you think you could not make it more if the tariff were lowered ? Mr. JACKSON. No; it could not be increased. It depends also on foreign conditions. America is not the only consuming country. I have tabulations here showing the consumption. We are only a small consumer of foreign material. There is South America Mr. RAINEY. If we should reduce these tariffs, who is going to get the benefit of the reductions ? Mr. JACKSON. Nobody would get the benefit of it. Mr. RAINEY. Then, why are you asking us to do it ? Mr. JACKSON. To help to maintain the importation of material. Mr. RAINEY. Who would be benefited by it ? 936 TARIFF HEARINGS. PARAGRAPHS 111-112 MARBLE. , Mr. JACKSON. The benefit would be with the importations. The importations would remain in this country. Otherwise, if the tariff is not reduced, it will be driven out. Mr. RAINEY. Do importations have any effect upon prices made in this country by domestic producers ? Mr. JACKSON. They usually follow. For instance, we had to raise these prices 20 or 25 cents on account of the freight rates for trans- portation. They follow. They say, "All right; the importer has got to pay so much more, and the article is worth so much more, and we will raise it about 15 or 20 cents." It is quite a natural condi- tion. For instance, if the duty should remain the same to-dav the material is worth $3, and we have to pay 25 cents more now. We can not sell it for less than S3. 25. The domestic material is sold for $1.75. They say, "Now the importers have to pay 25 cents more freight and duty; the material can be bought cheaper from New York; let us take advantage of the situation and still have $1.95 or $1.90." Mr. RAINEY. All right; that is all. Mr. HILL. Was there not a reduction in the Payne bill from the Dingley bill ? Mr. JACKSON. No. Mr. HILL. As to none of these ? Mr. JACKSON. A reduction was only made on slabs, not on blocks, where the slabs were reduced by 2 cents a square foot. Mr. HILL. Was there any reduction in granite ? Mr. JACKSON. That was from 12 to 10 cents. We import I can not say that I am the only importer of this limestone we import to-day about 15,000 cubic feet more per year on account of the reduction of 2 cents. Mr. HILL. But you get no more profit ? Mr. JACKSON. No; we gave them the benefit of it. If any tariff is reduced by certain proportions, the manufacturer will get the benefit of it. Mr. HILL. I supposed it would go to the other side. Mr. JACKSON. No; here. Mr. HILL. The man who buys and manufactures it ? Mr. JACKSON. Yes. Mr. HILL. He passes it on down to the consumer, just as you pass it down to him, does he not ? Mr. JACKSON. That is a question. STATEMENT OF GEORGE W. ASHLEY, ESQ., REPRESENTING THE SISSON MARBLE CO. Mr. ASHLEY. Mr. Chairman and gentlemen, I represent the Sisson Marble Co. and the sentiment of 10 others from whom we have heard, in a quick correspondence on the subject, in regard to the tariff on marble, which is covered in paragraphs 111, 112, and 114. The present assessment of block marble, taking that as a basis, is 65 cents a cubic foot. The average cost of quarrying marble in this country ranges from 40 to 60 cents a cubic foot. The average cost, using as a basis the white marble, the Carrara marble, on board ship, is 83.10 per cubic foot. SCHEDULE B. 937 PARAGRAPHS 111-112 MARBLE. It is not only that it is excessive when compared to the cost of marble in this country, but the range of the duties on sawed mate- rial is inequitable. For instance, if you take a block of marble and saw it into slabs, say three-quarters to an inch thick, it costs you 60 cents a cubic foot for the service. You can obtain from 10 to 11 slabs. It makes the cost in this country for slabs 1 inch thick 37 cents per superficial foot. You can buy those same slabs in Italy and the exporter will be paid at \1\ or 18 cents on board ship. I put it in my statement here 10 pence, which is 20 cents, and with the prevailing duties at 8 cents and the ocean freight at 3 cents, it amounts to 31 cents, against the cost in this country of 37 cents. I want to say, simply as a matter of revenue, if the duties are kept on block marble the duties on the sawed material should be rearranged at least to make it possible that a manufactory or mill in this country can produce from a block of marble, which is the raw material, at a cost not exceeding that at which it can be imported. Under one of these schedules, there is no provision made for an article that is largely imported. Wecallitgranito. It is being assessed at present under paragraph 480. They have tried numerous ways of having it admitted under the classification of waste at 10 per cent, but under paragraph 480 it has a duty of 20 per cent. This granito costs on board steamer on the other side one-filth of 1 cent per pound, or $4 a ton of 2,000 pounds. The freight on that is $4. That is $8, which is the cost to land it exclusive of duties. It is sold in this country from $9.50 to $10, the cost not exceeding $5, manufactured on this side. Under the same classifications you are admitting granite, sandstone, limestone, and other material of that character on a basis of 10 cents a cubic foot. Why should this discrimination be made against mar- ble? There is a large percentage of limestone, Italian and French, that is now known to the architectural trade and to the trade gen- erally as monotone marbles, which is being used for decorative pur- poses limestone 10 cents, granite 10 cents, sandstone 10 cents, mar- ble 65 cents. It is easily explainable how duties on marble was arrived at 65 cents. Speaking for the manufacturers, and I have known them for the last 30 years, who have been accustomed to bear this burden, if this duty is retained at 65 cents we desire to ask your committee to at least readjust the duties on the sawed material so that we can produce them in this country at a cost not exceeding that at which it can be imported. The CHAIRMAN. Are there any questions ? That is all. BALTIMORE, MD., January 4, 191i. To the honorable COMMITTEE ON WATS AND MEANS, Washing Ion, D. C. GENTLEMEN: Present tariff on marble and onyx: On block per cubic foot. Sawed over 2 inches thick per cubic foot. Slabs 1 inch and under per superficial foot. Slabs over 1 inch and not exceeding H inches per superficial foot. Slabs over 1 inches and not more than 2 inches thick... per superficial foot. $0.65 1.00 .08 .10 .12* 938 TABIPF HEARINGS. PARAGRAPHS 111-112 MARBLE. This classification of rates discriminates in favor of slabs sawed abroad, thus: Average cost of Italian white ordinary, marble in this country, duties and freight paid, is $3.10 per cubic foot. Cost of sawing in this country, 60 cents per cubic foot. Ten slabs of 1 inch thickness can be produced to the cubic foot, making the cost of 1-inch slabs produced in this country 37 cents per superficial foot. Slabs not exceeding 1 inch thick can be purchased abroad f . o. b. steamer at cost of 10d., say per superficial foot. . $0. 20 Prevailing duties per superficial foot.. .08 Ocean freight per superficial foot.. .03 .31 A differential of approximately 20 per cent in favor of imported slabs not exceed- ing 1 inch thick. The differential in favor of imported slabs over 1-inch and not exceeding 1$ inches is approximately 15 per cent. We claim that if the present rate is continued on blocks, the schedule on slabs should be increased to equalize costs. Other than a source of revenue there is no logical reason for duty on marble in block form (which is raw material), for the reason that the average cost of quarrying marble in this country is approximately 50 cents to 60 cents per cubic foot. The average cost of Italian ordinary white blocks, f. o. b. steamer abroad, is $2 per cubic foot; ocean freight, 45 cents per cubic foot. Paragraph 111 should be amended to include breccia, which is not provided for in existing classification, excepting wholly or partly manufactured. The existing schedules admit freestone, granite, sandstone, and limestone, unmanu- factured or not dressed, hewn, or polished, at 10 cente per cubic foot. Does any reason exist why marble blocks should be made to pay a duty six and one- half times as high as that assessed against limestone, granite, etc.? It is, however, easily explainable in that limestone, granite, sandstone, and freestone are not quarried in Vermont, from which influence the present rate on block marble was assessed to provide a needless protection for a material that cost less to quarry than the duty assessed. If block marble abroad were given away and ocean freight free, then the prevailing duties still represent an excess of the cost of quarrying in this country. Granito, which is imported largely, is not provided for under the existing tariff law, but is assessed at 20 per cent ad valorem under paragraph 480. This material, made from spalls of white ordinary Italian marble, can be purchased abroad at lit. 2.40 per 100 kilos f. o. b. steamer, Bay one-fifth of 1 cent per pound, or say $4 per ton of 2,000 pounds. Freight on same, say $4 per ton, as against a net cost of $5 per ton when produced in this country. We suggest this article be admitted free of duty. Placquettes or mosaic cubes of white ordinary Italian can be purchased abroad for lit. 12 per 100 kilos, say 1 cent per pound, or $20 per ton of 2,000 pounds f. o. b. steamer. The demand for it has decreased gradually for past decade, largely because of excessive duties, which are substantially 45 per cent, and should be reasonably reduced. We suggest that paragraphs 111, 112, 114 be revised to read: "Marble, breccia, onyx, freestone, granite, sandstone, limestone, and all other monu- mental or building marble and stone, in block, rough or squared only, unman ufac- tured, or not dressed, hewn, sawed, or polished, ten cents per cubic foot; marble, breccia, and onyx sawed over two inches in thickness seventy-five cents per cubic foot; slabs or paving tile of marble, containing not less than four superficial inches, if not more than one inch in thickness, eight cents per superficial foot; if more than one inch and not more than one and one-half inches in thickness, ten cents per super- ficial foot; if more than one and one-half inches and not more than two inches in thickness, fifteen cents per superficial foot; if rubbed in whole or in part, three cents per superficial foot in addition; mosaic cubes of marble not exceeding two inches iu size, if loose, twenty per centum ad valorem; if attached to paper or other material, thirty-five per centum ad valorem. "Marble, breccia, onyx, alabaster, limestone, and jet wholly or partly manufactured into monuments, benches, vases, architectural designs, and other articles or of which these substances or either of them is the component material of chief value, and all articles composed wholly or in chief value of agate, rock crystal, or other semiprecious stones, except such as are cut into shapes and forms fitting them expressly for use in SCHEDULE B. 939 PARAGRAPHS 111-112 MARBLE. the construction of jewelry, not specially provided for in this section, fifty per centum ad valorem." Respectfully submitted. Yours, truly, SISSON MARBLE Co., Per GEO. W. ASHLEY, President. PEORIA STONE & MARBLE WORKS, Peoria, III., January 2, 191S. Mr. GEO. W. ASHLEY, Care of Sisson Marble Co., Baltimore. DEAR SIR: We beg to advise you that we certainly favor a reduction in the tariff on imported marble and feel that block marble should come in free of duty as the cost of producing domestic material does not amount to as much as the duty per cubic foot. There is several million dollars invested in manufacturing plants that their existence depends on the use of imported marble as the producers of domestic material make the price so that we can not buy their stock and compete against them, which we are com- pelled to do. The duty imposed places the foreign product in the hands of a few wealthy importers and bars the smaller manufacturer in this country from purchasing his material direct from the producer on the other side, and we have always noticed the large importers who have representatives in this country oppose the reduction in duty, as the imposing of a duty enabled them to control the situation here and charge us such profit as they see fit. We certainly hope the Ways and Means Committee will assist the manufacturers of this country to break up any combination that may exist by taking off all duty and let us have free raw material. Yours, truly, PEORIA STONE & MARBLE WORKS, Per H. A. FARLEY. STANDARD MARBLE WORKS, Cincinnati, December 16, 191g. Mr. GEO. W. ASHLEY, Care of Sisson Marble Co., Baltimore, Md. DEAR SIR: I have your letter of the 14th instant and note the contents. I cer- tainly think that some concerted action should be taken to bring to the attention of the Ways and Means Committee the schedule of tariff now levied on marble, as being excessive and inconsistent. They should be told emphatically that the present duty is excessive and inconsistent. I am heartily in favor of having the duty on block marble taken off entirely. If any duty is placed on marble, let it be on slabs and finished stock and on finished stock in particular. I understand that finished marble when intended for church purposes is brought in free, and this should be called to the attention of the Ways and Means Committee and a heavy duty placed on marble of this character. I am ready to act with you, and if you will advise me what I can do to bring the matter in a proper way to the attention of the Ways and Means Committee, I will be glad to act promptly. Yours, very truly, JOHN M. MUELLER, Jr. HENRY MARBLE Co., Chicago, January 2, 1913 SISSON MARBLE Co., Baltimore, Md. GENTLEMEN: Replying to your inquiry regarding our views on the subject of tariff on marble would state that we are strongly in favor of a reduction in the tariff, and can not see how we can successfully compete with some other materials that are thrown on the market at the present time, unless tariff is reduced considerably on imported marbles. Hope your committee will be successful in influencing this re- duction at an early date. Yours, very truly, HENRY MARBLE Co., Per H. K. TOWNSEND. 940 TARIFF HEARINGS. PARAGRAPHS 111-112 MARBLE. FEENEY & DEVANNY Co., New York City, N. Y., December 16, 1912. Mr. G. W. ASHLEY, Care of the Sisson Marble Co., Baltimore, Md. DEAR SIR: We acknowledge' receipt of your letter of the 14th instant regarding the tariff on marble. -We heartily agree with your views and presume that you have some plan in mind and in going over the matter we take this occasion of a hearty co- operation and when your plans are formulated we would appreciate the opportunity to participate in them. Very truly, yours, FEENEY & DEVANNY Co. GORDON STEWART. N. O. NELSON MARBLE Co., Edwardsville, III., December 16, 1912. SISSON MARBLE Co., Baltimore, Md. GENTLEMEN: We have your favor of the 14th, addressed to the Illinois Marble Co., whose successors we are. We agree with you that the present tariff on imported marble is excessive, and we would have no objection to joining in with other marble dealers in getting the tariff reduced. In fact, it seems to us that when the Democrats get to work on the tariff there will not be much trouble in getting them to cut this item, as well as many others. We are with you in this movement and will be glad to join forces with you and others when the proper time comes. Yours, truly, N. O. NELSON MARBLE Co., L. D. LAWINN, Treasurer. THE CHAS. MCDONALD MARBLE Co. (!NC.), Cincinnati, Ohio, December 21, 1912. GEO. W. ASHLEY, Care of Sisson Marble Co., Baltimore, Md. DEAR SIR: We are in receipt of yours of the 14th and think some concerted action should be taken regarding the marble tariff. The board of directors of the National Association of Marble Dealers had a meeting here Thursday and those not interested in native quarries thought it was all right. Mr. Farley said that he was going on to Washington, and that he had had several talks with Mr. Champ Clark regarding the matter. Kindly keep the writer advised regarding the situation. Yours, very truly, THE CHAS. MCDONALD MARBLE Co., Per WINSLOW. JACOBY & SON Co., KEYSTONE MARBLE WORKS, Philadelphia, December 14, 1912. SISSON MARBLE Co., West, Twenty-third Street and Baltimore & Ohio Railroad, Baltimore, Md. GENTLEMEN: Replying to yours of 13th, would say that we agree with you that something should be done to reduce tariff on marble and will be glad to do our share in the matter. Yours, truly, JACOBY & SON Co. II. MARQUARDT MARBLE AND GRANITE Co., St. Louis, Mo., December 16, 1912. Messrs. SISSON MARBLE Co., . West T verity-third Street and Baltimore & Ohio Railroad, Baltimore, Md. GENTLEMEN: Wo have received your favor regarding the new schedule of ocean freight rate? and tariff, etc., which may come up before the Committee on Ways and Means, said rates and tariff discriminating apparently in favor of the domestic marble combinations. We certainly are willing to aid in the revision of said tariff, if advised. Hoping it will be successfully carried out, we remain, Respectfully, yours, II. MARQUARDT MARBLE & GRANITE Co., Per H. M. SCHEDULE B. 941 PARAGRAPHS 111-112 -ONYX. JAMES B. CLOW & SONS, Chicago, December 16, 1919. SISSON MARBLE Co., West Twenty-third Street and Baltimore